Harsha Engineers International Ltd (NSE: HARSHA) Q3 2026 Earnings Call dated Feb. 05, 2026
Corporate Participants:
Vishal Rangwala — Vishal Rangwala Chief Executive Officer, Whole time Director
Vishal Rangwala — Vishal Rangwala Chief Executive Officer, Whole time Director
Maulik Jasani — Group Chief Financial Officer
Analysts:
Harshit Patel — Analyst
Amit Anwani — Analyst
Saket Kapoor — Analyst
Manish Goel — Analyst
Jamie Kramer — Analyst
Jason Soans — Analyst
Presentation:
operator
It.
operator
Foreign.
operator
Ladies and gentlemen, you had been connected to Harsha Engineers International Limited Conference call call will begin shortly. Please stay connected. Ladies and gentlemen, you had been connected to Harsha Engineers International Limited Conference call call will begin shortly. Please stay connected.
operator
It. It.
operator
Ladies and gentlemen, good day and welcome to the Q3FY26 Hersha Engineers International Limited earnings conference call. As a reminder, all participant lines will be the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator. We’re pressing Star then zero on your dashboard phone. Please note that this conference has been recorded. I would now hand the conference over to Mr. Vishal Rangwala, CEO of Harsha Engineers International Limited. Thank you and over to you sir.
Vishal Rangwala — Vishal Rangwala Chief Executive Officer, Whole time Director
Hello all. Warm welcome to our Quarter 3 FY26 Investor Call. As usual I will ask Mr. Moulik Jasani for CFO to take us through number in greater details later on. However I’m assuming that you would have had a chance to look at that already. First and foremost let me start with overall. I’m really happy to note that macro level quite a few positive events have happened which has definitely improved overall market sentiment. This would include India UK FTA followed by FTA with few other countries and a very positive India EU FTA recently concluded and to top it all much awaited India US Trade Agreement again with some strong directional push in capex plus long term tax holidays announced in certain key segments.
The last budget we are all fairly confident that India can sustain a good GDP growth rate of around 7% in coming years. As you would have observed from our numbers at the outset. I’m happy to report that quarter three FY26 performance is broadly in line with our expectation except for a slight blip in the form of below par performance in Romania. Our India engineering business comprising of our company plus our wholly owned subsidiary Hersha Advantage has continued to show a strong performance both in top line as well as bottom line. Notwithstanding the fact that Hersha Advantage which has commissioned its Greenfield facility in current financial year year has reported losses at the PET level primarily owing to impact of higher interest and depreciation.
Further, as you would have seen, we had to make a one time provision of around 5.97 crore in quarter three in India for additional gratuity and leave and encasement to give effect of the changes made by the new Labor Code made effective by the Government in quarter. This is a one time exceptional provision required to be made retrospectively in quarter three Our India engineering business has reported a 17.4% revenue growth in Q3 on a YoY basis and if we normalize the effect of one time exceptional provision then our India engineering business operating EBITDA margin has shown a healthy 23.8% though the reported EBITDA is at 21.7%.
As mentioned earlier, this is after absorbing net loss of rupees 3.7 crore in Harsha Advantech in quarter three. We expect a much stronger revenue performance in Hersha Advantech subsidiary in quarter four which should increase the data and reduce the Q4 loss in Advantech subsidiary. Talking of outsourcing of cages in our India engineering business we are steadily growing in this segment owing to a combination of favorable factors. If I talk of a cage demand in India the same is on rise and we continue to have a dominant market share across variety of customers.
Vishal Rangwala — Vishal Rangwala Chief Executive Officer, Whole time Director
And.
Vishal Rangwala — Vishal Rangwala Chief Executive Officer, Whole time Director
We have started supplies to a lot of our customers new facility in India which caters to various world markets. Our export from India are also gradually going up with EU continuing to show revival in industrial demand for cages though wind demand is still not picking up in Europe, I believe that with the favorable FTAs the demand should go up in Europe in coming quarters. In this regard large size kgs have continued to show strong performance having achieved sales of around 39 crore in nine months period to December 25 as against 31 crore achieved in the corresponding previous year nine months pace of new product development continues to be Strong at around 123 SKU up to quarter three or only in quarter three resulting at 382 SKUs for the nine month for the period ending December 25th.
Again if you see our other growth drivers, I’m happy to report that bronze bushing business has continued its strong growth trajectory reaching a sales revenue revenue figure of about 92 crores in nine months ending in December 25. As per our earlier estimate, we are on track to achieve about 30% plus growth YoY basis in this segment. If I talk stampings, while there was a blip in Q2 due to some seasonal impact on consumer goods segment, they are again catching up in Q3 and stood at the overall revenue for 9 months stood at 41 crores up to December.
I expect stamping sale to further grow in coming quarter due to few new stamp components which are under development which are likely to be commercialized in next financial year. Lastly, while sales growth to Japanese customer is slow, it is still a positive direction. We are confident that though this is taking longer time There is no dilution in our efforts as well as the opportunity for a significant growth in our market share with our Japanese customers. Talking about overseas subsidies, I’m glad to state that Hersha China has continued to report a consistent steady performance resulting into maintaining a decent profitability and a growth strategy.
In fact, you would have seen in our disclosure made by us to the stock exchanges we have formed up a brownfield expansion plan in China at the outlay of approximately US$9.94 million for expanding Cage manufacturing capacity in China with primary focus of steel cages. The logic of this expansion is that we are there is a good demand for steel cages in China primarily in industrial segment. We believe that we can significantly improve our market penetration in this segment in China if we increase our cage manufacturing capacity in China as a local player, which is essential not only for our existing key MMC customer present in China but also for local Chinese bearing manufacturers who can be serviced if we have adequate steel gauge capacity in China.
We will fund this expansion primarily through not debt and then up to maybe 70 to 80% and or rather we will fund this by borrowing locally and balance of it will be funded through equity contribution from Harsha India. The expansion will be implemented at our existing site as a brownfield expansion and we intend to make this operational before end of financial year 28. In this quarter we again saw Romania performance coming under pressure primarily owing to a steep increase in copper prices globally which could not be passed on to the customer immediately as there is a lag.
This has resulted into an operating loss at Romania and the combined net loss of our foreign subsidiary stood at around 3.98 lakhs or 3.98 crore in quarter three and for nine months it stood at 6.09 crore in nine months or year to date. However we still remain confident about Romania likely Romania likely to do better in coming quarter because of our consistent and conscious shift and focus on the finish cage business, customer diversification as well as cost control strategies under implementation. Talking of our Solar business, the Solar division has reported a strong performance in quarter three reporting a top line revenue of around 59 crores an EBITDA of around 9%.
However I mentioned earlier this is an order driven business and the overall performance in the current financial year will be you know it’s good and continues positive contribution. This division is continuing the positive contribution to overall business. Lastly I feel very confident that we’ll continue to perform well in quarter four in this segment as well and we should be able to achieve overall guidance given in financial year 2026. More importantly, we feel that we are on a good trajectory for next financial year and hope to continue this direction. However, we would prefer to give over Overall guidance for FY27 at time of quarter four FY26 annual result.
Now I transfer over to Moulik who will take us through numbers in a little bit more detail. Over to you Molik.
Maulik Jasani — Group Chief Financial Officer
Thank you Vishal Bhai for the overall business overview. Good afternoon everyone. As you would have noticed for the quarter ended December 25, our engineering business at consolidated level have achieved a top line of rupees 350 crore against the 363 crore top line in the immediate previous quarter and 302 crore top line in the same quarter last year. We have achieved consolidated EBITDA for engineering segment of rupees 58.6 crore against the reported EBITDA of 63 crore in the last quarter and 48.2 crore in the previous quarter. But however adjusted EBITDA is of rupees 64.3 covered in this quarter after adjusting the one time provision impact of the new labor code.
Increasing trend in metal prices, especially copper and lag in raw material pass through has impacted our EBITDA margin and pat compared to last quarter and also our new greenfield sites. Baila at Baila has reported a net loss as USAR as mentioned due to the first year operations and we also capitalized the second building in our Baila sites In the last quarter both foreign subsidiaries have jointly contributed EBITDA loss also of around rupees 51 lakhs at a total level of both foreign subsidiaries. Solar business as mentioned has achieved a revenue of 59.7 crore with a EBITDA of 5.5 crore.
Overall working capital cycle at consolidated level is around 140 days against 146 days in the previous quarter and 145 days in the last year same quarter we have incurred capex of rupees 32 crore in the last quarter and cumulative capex of around 100 crore in the last three quarters in the current financial year. With this brief note on the financial numbers, I request operator to take the Q and A from the participants. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask question may test our one on the touchdown telephone. If you wish to remove yourself from question queue, you may press Star in two. Participants are requested to use handsets for asking a question. Ladies and gentlemen will wait for a moment while the question queue assembles. The first question is from the line of Harshit Patel from Aquarius Securities. Please go ahead.
Harshit Patel
Thank you very much for the opportunity. Firstly on the India engineering business this was the second consecutive quarter of a very strong growth wherein we have done a mid double digit to a high double digit kind of a growth in this business. Could you highlight which are the factors some of the end user industries with him through this performance. Also if you could give us a flavor on pricing versus volume growth mix within this 17% growth that we have posted in this quarter that will be very helpful.
Vishal Rangwala
So 1 harshit from our point of view for us the geography point of view, India is doing very well as well as Europe as I mentioned earlier and both are driving overall growth for us being a very big segment. For us this growth is primarily we are seeing it’s purely quantity driven growth and we are seeing a volume growth as yet I think in the last quarter three we don’t see any you know material impact or pass through which has materialized so which will happen in the current quarter. And overall we are seeing India, we are seeing you know strong demand across all segments industrial as well as automotive and overall globally we are seeing industrial segment slow improving which was in a negative cycle over the last year and a half.
2 so which is recovering is how we look at it. And so that’s how we are seeing it. And for us also positive is wishing growth and stamping business growth which are largely domestic focus. So that also supports India. India growing overall very well. So that is also supporting just to.
Maulik Jasani
Quickly add one thing this year if you see there is also growth in exports. So for last couple of years that India was growing domestically but exports were pulling us down a bit. Now export is also showing about 10% growth so that is helping us showing a much better growth number at India.
Harshit Patel
Secondly on the CapEx that you have announced in China we have announced the capex worth about $10 million. It is a pretty significant number now given that we are still operating at about 55% capacity utilization over there. So do you see that the demand is going to be very strong in the near term and that is why we are expanding. We are sort of trying to preempt the demand over here. So also if you could give some flavor on when we would have expanded this capacity. So on that scale and size of the plant what would be the maximum revenues we can do at the China level? Maybe in FY29 because FY28 is where your expansion will get completed.
So at that scale what kind of revenues and ebitda margins we are aiming to do slightly longer term broader question but any outlook on that will be very helpful.
Vishal Rangwala
Yeah. So again we are in. In China there are a couple of things happening. As I mentioned we have a significant brass capacity located locally in China. However when it comes to industrial steel cages we don’t have any local capacity and we are trying to. We are seeing industrial segment grow and our ability to participate and get some share of business significantly changes when we are a local manufacturer there. So that’s the what is primarily driving this capacity expansion within. Within China. What what we are doing is so there is some amount of brass capacity also expansion part of this expansion plan.
Now in this investment a big chunk about 40% plus is infrastructure which includes building and a few basic infrastructure we need to build to actually house a lot of our dedicated capacity there. So that is a big chunk of this investment. And then we are adding cage capacity as I mentioned primarily in the steel industrial side where we are seeing good demand and growth and opportunity to penetrate local markets. So that’s the rationale from a number point of view it will be very difficult to give you a very precise number. Having said that we are looking at for the piece or for the equipment which we are going to install we are expecting at full maturity it should.
It should give.
Maulik Jasani
Current revenues will be double India.
Maulik Jasani
So we are looking at the double 2x overall revenue in China when the full maturity of all this capacity takes place. Now that. That still leaves us with additional infrastructure for expansion because we are doing a full infrastructure expansion right now. So and we are kind of keeping space to accommodate any. Any growth opportunity comes our way in a different segment and so on.
Harshit Patel
That’s good. Sir, thank you very much for answering my question. I’ll come back in between.
Vishal Rangwala
Thank you.
operator
Thank you. The next question is from the line of Amit from PL Capital. Please go ahead.
Amit Anwani
Hi sir, thank you for the opportunity. Sir, my question again on China. What is the kind of understanding the rationale to expand? So will it be you’re penetrating completely local this 2x sales which are trying to achieve by F29 F30.
Vishal Rangwala
So it’s a combination of our existing customer as well as local. We are seeing opportunity to get better market share through localization even in our existing customer base as well as some of the access to customer is not available if we are you know supplying out of India. So we are kind of creating that. So it’s a combination of both local customer as well as our global MNC customer increasing the wallet share with them.
Maulik Jasani
And Just to add that Amit in the specific industrial segment there are areas where. There are. Where in China there is only one or two local suppliers and there is no major suppliers available. And hence even the local bearing manufacturers need reliable and consistent suppliers as alternate suppliers. And there where we have a great opportunity to even capture the local manufacturing bearing companies in the industrial segment of the steel areas.
Amit Anwani
Right. But is there anything like with the existing customer you’ll be able to utilize maybe 50, 60% of what you’re installing Any. Any ballpark or it is still open.
Amit Anwani
That once
Vishal Rangwala
the factor is there is definitely great dialogues. We don’t have a clear commitment. However we have a. We have. We have a good engagement and discussion going on and we are some portion of capacity will definitely go towards supporting our existing customer and a bigger wallet share their demand.
Amit Anwani
Right. And are we like kind of confident of margins having you know from the past experience in China. So what is we are looking for in terms of margins or something with this expansion? Probably looking at the past we have seen challenges with our international subsidiaries anyways. Yeah.
Vishal Rangwala
Yeah.
Vishal Rangwala
So we.
Vishal Rangwala
We will definitely. We are confident that at the right revenue level we will improve our existing EBITDA in China. We definitely. We are definitely trying to. We see a better margins possibility here and and that’s also one of the incentive for you know us to go there also there is a scale need of scale at level which. Which will also help us create operating leverage improve over margin even on the existing portfolio as well. So.
Amit Anwani
Right sir, again on this thing you said somewhere in the commentary when demand is not picking up in Europe. So I think is there any implication for Bushing’s business that there might be some challenge or. Because I think you have written it is going strong. But I am just trying to understand what you mean to say by wind demand.
Vishal Rangwala
Yeah. So. Yeah. Yeah. So I think our Bushing business is focused on replacement driven funds. So that’s why that is continuing to grow in spite of you know Europe wind not doing as well as we expect. However we are some significant portion of our Romania facility is supporting wind market. So which is not as a wind market overall in Europe is not doing that great. And that’s the reference I was kind of mentioning. So we don’t see that as correlated at a full conversion majority. The pushing business will follow the wind market. What is going on in wind market.
But having said it right now we are in a very different phase when it comes to Bush where the focus is on whatever is the existing wind application converting into Bushing and that will drive the bushing.
Amit Anwani
All right, so lastly on Romania you said this quarter was impacted by commodity prices and probably that might continue in 4Q. So what is that we are looking at now? Romania last time I think there was some recovery there and you highlighted that time. So now with this challenge, what’s the outlook for next one or two quarters in Romania?
Vishal Rangwala
So I think we’ll not be able to exactly say how it’s going. There is a lot of volatility in the commodity market. We do have a pass through mechanism so we have a quarter to quarter impact and correction. But as I mean not knowing future but what we have seen. So there’s significant volatility. So that is a risk and a concern remains. Having said that as I mentioned earlier that our improvement program is going on. We are improving the revenue and the product portfolio, doing more cages and so on which is taking traction. So apart from this specific challenge, I think if you look at comparison on the revenue side over last year, similar quarter we have grown and we have improved our product portfolio.
We are not at all where we need to be. So we are continuing to work on that and evaluate the situation, engage with customer and see what’s the right path going forward on this.
Amit Anwani
Thank you sir. Thank you so much, much.
Vishal Rangwala
Thank you.
operator
Thank you. The next question is from the line of Saket Kapoor from Kapoor and Company. Please go ahead.
Saket Kapoor
Yeah, namaste sir. Hope I’m audible. Yeah, thank you sir. Firstly, if you could just reiterate for the sake of repetition also on the on the guidance front on what is the likelihood for us to exit fi.
Saket Kapoor
Firstly.
Vishal Rangwala
So we had Saket said that we will be in terms of growth a little over 10% overall. So this Q4 should also continue the same run rate with maybe a little bit marginal improvement. So let’s see. So that’s what the guidance was. So we are I think on track, we should be okay.
Vishal Rangwala
And on the margin front also on the standalone business reportedly margin will be.
Vishal Rangwala
Better and we should, we are aiming at, you know, in the EBITDA range as we had talked about and the PAT range reaching, taking the last Q3 run rate and then slightly improving our Q4. We should have a much better bottom line growth in FY26 as compared to FY25.
Saket Kapoor
No sir, the EBITDA margin we have for the standalone business part as 23% 23.4. That is what we have reported.
Saket Kapoor
So.
Saket Kapoor
So we are confident on maintaining.
Maulik Jasani
No, no, see what happens. There is always a quarterly lag between the commodity prices and the selling prices will consistently we should be in the range of 20 to 23. And then a little bit of impact of Advantech will be little lower as compared to Q3 this year in terms of loss, the third loss, it will not completely break even.
Maulik Jasani
It should break even from next year.
Maulik Jasani
Though the turnover is steady increasing. Advantech may orbit Q4 as we shall say. There are quite a bit of moving pieces but we should be reaching the targeted PAT level in the range of.
Maulik Jasani
Around 35 or so. Let us see.
Saket Kapoor
Okay, if you could just give the nine monthly performance for sales and profitability for Romania, China as well as Advantage separately. Just if you could give the number and then sir, on the Romania part of the story, if I correct, if I remember correctly, we were about to discuss and articulate the strategy or restructuring for the unit wherein better deliverables from the same can be derived. So where are we sir, in terms of that?
Maulik Jasani
On the numbers we have already given numbers in our investor presentation for India engineering, business and foreign subsidiaries performance. So you may refer our investor presentations there you will find the numbers. And on the Romania story, yes, our focus is still on the same side on enhancing our cage proposals compared to our current casting proposal and the dialogues is already on with the customer.
Saket Kapoor
Sir, I was looking for the split between the China and the Romania business separately and the advantage can you add that all three separate numbers?
Maulik Jasani
So I tell you as a matter of strategy, in the past we are always giving a combined number at the foreign subsidiary level. So you will see that the loss was about 6 crores in the nine month period. At the foreign subsidiary level there could be a little reduction in Q4 in terms of combined loss. But you may take a combined loss in the range of maybe around 8 crores for the year end for the foreign subsidiaries. We have already given as it was 370 lakhs in the Q3, it should reduce in Q4 but it will still be at a loss level.
So I think exact number we will not be able to give it. This is already given the way we have explained.
Maulik Jasani
Actually.
Saket Kapoor
Two small points in your presentation you have mentioned about and earlier also about this lower offtake from your Japanese customer. So if you could just allude to us, where are we in terms of the deliverables and the order booking from the Japanese concerned. And then sir, when we in the slide we have mentioned about this diversification in precision stamped and brushing components. So this stamping is also attributed to.
Saket Kapoor
The brushing part of the story or.
Vishal Rangwala
We are separately Doing stamping of other tools also.
Saket Kapoor
So yeah, we are doing beyond bearing cages and bushing. We also supply stamping components to our customer which are automotive as well as consumer goods and some industrial goods and so on. And. So.
Vishal Rangwala
Yeah, stamping is a very different. Yeah, it is an extension of our capability for manufacturing steel cages which is a stamping process. But we have developed some very special components like you know, railway seals or compressor, special type of compression stampings, etc. Which is extension of our technology skill set into a little diversified field. But keeping the same value addition in mind can be. So we are not doing me too.
Vishal Rangwala
Kind of a situation.
Vishal Rangwala
But bushing is a replacement for bearings in the gearbox, windmill gearbox. So it’s a very different application.
Saket Kapoor
Okay. Just to happen over the sample parts. This will be in the advantage unit we are doing or it is in the older plants.
Vishal Rangwala
We have existing. Maybe here Advantage maybe have created additional capacity for bushings and large size cages.
Saket Kapoor
Okay.
Saket Kapoor
And lastly, sir, lastly, if you could just give us your message for your investors. We got listed in 2022, so we were scared from what happened in Covid in terms of valuation. But even if it had taken into account the degrees of the market, the business environment, geopolitical issues, every aspect shareholders have no value creation has not happened for your investors, that is including the promoters who hold three fourths of the equity. So we have seen, we have seen on the deliverable front, what else and how quickly would this translate into value creation for us in terms of consistent, profitable, predictable growth for the organization? So if sir would just throw some insight on the same.
Vishal Rangwala
You are right in what you have observed. But also please appreciate that macro level factors are beyond our control at every single point in time. We have been very transparently communicating with the shareholders and investors that what is the current status with 35% of my business coming from Europe globally and Europe going down and then the geopolitical tensions with all this, I think we have done very well in terms of quickly going to the drawing board, reworking our strategies and trying to grow and trying to maintain a decent growth. I think I don’t want to speak more, but it seems that this year was much better than last year and now next year will still be better.
Our job is to be transparent about what the current state of affairs is, what is our strategy and how we want to keep the company on the growth path. Market is something which nobody knows and we can’t control, that’s all. And we’ll be very communicative about what.
Vishal Rangwala
We want to Always transparently feel is correct.
Saket Kapoor
Right Sir, I joined the queue sir. Yeah. Yes I’m joining the queue. My.
Saket Kapoor
Thank you.
operator
Thank you. Thank you. The next question is from the line of Manish Koel from think wise wealth managers. Please go ahead.
Manish Goel
Yeah, thank you so much and congratulations on very good setup number sir. So a couple of questions. First if you can give us the revenue breakup for your new businesses. Bronze bushing stamping, bath size and Japan based customers for nine months current year and comparable numbers of last year.
Maulik Jasani
Yeah I think Amani that was covered in Vishal’s commentary. Let me repeat it for you. Easy reference.
Manish Goel
Yes.
Maulik Jasani
Last size cages we did 9 months 39 crore around versus last year same 9 months it was around 31 crore. Japanese customers is around 51.5 crore or 50 against 50 crore rough in the last year. So almost stagnant stamping we did around 39 crore and 41.2 crore in this year while the busing around 7475 crore last year versus 92 crore this year for nine months.
Manish Goel
Okay. And so related question is that roughly if I do the math it is contributing 21% of your revenue all these three, four categories. So how do we see this going forward over a period of next two years and three years or maybe what kind of visibility we have can it probably this business can develop in two years. That was first question and second also question is on the cages business that independently how do we see growth rate in the kgsp?
Vishal Rangwala
So I don’t have a very precise double up number like that. But these are our focused growth drivers where we see good opportunity and that’s why we keep on mentioning the numbers and sometimes we don’t do as well as we expect. Having said that we see we expect a very good growth in all this segment. It may happen that one segment may kind of falter for a while or something like that. But you know across all this segment we have signed lot of new supply agreements with our customers and we feel that they are they are on a good growth trajectory and realization will happen soon.
And on the cage side we see that as a product very strong growth continuing. It’s basically what we offer to our customer in terms of cages is a very unique proposition. And we are fairly confident that what we bring to the table will bring us that additional growth. We are seeing also that is also driven by existing business which was supplied into Europe or US or other locations. How those agents are doing. However in India it is doing very well, continues to grow and we feel fairly confident overall about cage business as well.
Maulik Jasani
So just to add large size cage actually is a subset of our cage outsourcing for the simple reason it’s carved out separately because it was a relatively low wallet shed five years, just half a percent, 1%. Now we are targeting it maybe at least 5 to 7% and that’s one area which is growing very well.
Maulik Jasani
So that’s very much a part of outsourcing.
Maulik Jasani
And I think overall all these Japanese customers are saying our wallet share with them was 1 or 2%. We are targeting at least 5 to 10% in next two, three years. So you know, these are within the bigger subset of outsourcing. These are the carved out subsets with specific focus.
Manish Goel
Sure. So like you did mention that the new product development is gaining pace. So would like to get a perspective as to are we gaining market share with your customers and resourcing like you said, started supplies to the customers, new facilities in India. So how should we look at it that probably next year we can look for a double digit growth overall for the company.
Vishal Rangwala
So see for us, product under development or development is a leading indicator. What that means is that customer is continuing to give us product which we will develop. And commercialization of such product may take anywhere between six months to two to three years, depending on how customer is approaching. In case customer will decide sometimes that only when you complete the complete portfolio that we will start commercialization and so on. So basically we mentioned that as kind of an indicator that, you know, our pipeline is strong and that’s the case now in terms of, you know, doubling the growth, I think it depends on variety of factors.
It depends on how the industry is doing as well as how the new projects come online. And we are very hopeful and confident that good revenue growth is in pipeline. But it depends on all those factors. So difficult to exactly put a number to all that.
Maulik Jasani
Next year we will go for a double digit growth. Correct. So as I said, definitely that is the target. But we want to give you a little more precise guidance based on certain new developments. We’ll come back to you at the end of Q4.
Manish Goel
Okay. And sir, particularly on the margins like India, the standalone engineering margins, what we have seen for engineering business at roughly 25% for this quarter, is this sustainable going forward? Also in context with now that steel prices have started inching up, copper prices are inching up. So how should we look into it, sir?
Maulik Jasani
Usually Manish, we have said that our margins should be tracked on the absolute front considering there is a material path for impacting the percentage either on the upper side or downward side as the case may be or according to in these cycles we are going into. So our suggestion is the same please stress our absolute margin improvement and we are confident to improve that margin definitely year over year as well as quarter over quarter.
Manish Goel
So M like what is the time like for you to pass on the cost? Is it on monthly revised?
Maulik Jasani
3 months is the period and with a 1 month as a leg in so 4 months total leg but again customer to customer it varies so and on average you can consider as a four month.
Manish Goel
Right sir.
Manish Goel
And.
Manish Goel
Are we seeing any immediate benefits from the fta? Is what India signed with UK and EU and also now with tariff coming down in US how should we see the prospects going forward?
Maulik Jasani
Obviously the export demand will pick up. That’s our expectations. There is no direct linkages but definitely there is a linkages and considering that of course product is a multi usage product and multi industries usage product we can’t identify the exit end to end benefit but yes we see that as a positive outcome for our business line.
Manish Goel
Okay, and last question.
Maulik Jasani
Our share was not very big anyway in US around 8, 9% so to that extent we were rather you know, sort of neutral or agnostic to that.
Manish Goel
Yeah sure.
Manish Goel
Last question sir on the new facility now we have started the second building, the second building as well. So what kind of ramp up we see, what kind of utilization visibility we see from it next year and.
Manish Goel
Can.
Manish Goel
It revert to company level margins next year?
Vishal Rangwala
Our anticipation is to do it early but as we have committed any new capex usually takes two years to reach to the peak and we are on the same track. We don’t see anything lagging there.
Manish Goel
Sure.
Manish Goel
Thank you so much for all that and hello.
Manish Goel
Thank you.
Manish Goel
Yes, no, just one question, just wanted clarification this Q3 presentation, the International revenue share has been restated for the quarter 2 FY26 so any reason for that? Was there a typo earlier?
Maulik Jasani
Yeah, we observed some arithmetical error in.
Maulik Jasani
The last quarter we made some arithmetical error. We have just corrected it.
Vishal Rangwala
Okay. Because even Q1 has a very higher share of international revenue. So maybe if you can provide that.
Maulik Jasani
See yeah, that’s what Q1 and Q2 There was an arithmetical error. The base number has been corrected now and that’s the, that’s the reason the previous years were correct.
Manish Goel
Okay, fine Molly, from you. Yeah, I get the numbers from you. Thank you so much.
Maulik Jasani
Thank you.
operator
Thank you. The next question is from the line of Jamie from ar they call asset Manager. Please go ahead.
Jamie Kramer
Yeah, thanks for taking my question. One is the European demand piece how you.
Jamie Kramer
I mean how does your current inquiry.
Jamie Kramer
Partner look like in European oem? Any color of advancing to all.
operator
I’m sorry to interrupt, voice is not audible properly.
Jamie Kramer
Hello, can you hear me now?
operator
Yes sir.
operator
Yes sir.
Jamie Kramer
Just wanted to understand on the European demand front, any new program for the RSQ advancing towards to prototype for the validation stage or any new program means.
Jamie Kramer
For the global sourcing mandate which provides.
Jamie Kramer
Comfort for our sustainable double digit growth for near term.
Jamie Kramer
On Europe.
Vishal Rangwala
Yeah, so we from a customer engagement and all those point of view, I mean we continue to respond to RFQ but for us the RFQ2 realization cycle is pretty long. What we see is what our customer is asking us to develop which becomes a more better benchmark in terms of how growth is coming, how things look like and that has remained strong in spite of whatever we have seen last one to one and a half year, that part of it has remained strong. We are engaged on few additional RFQs, additional opportunities, but depends on those projects get decided based on variety of factors and not just in our hand or our competitiveness.
It’s a macro big level, big projects which depends on how our customers are approaching variety of things. But overall I would say it remains positive without saying that that’s not a very accurate indication for us.
Jamie Kramer
Got it.
Jamie Kramer
And so on a sales to your.
Jamie Kramer
Japanese customer it should be stagnant for a YTT basis. Is it more of your slower program.
Jamie Kramer
Ramp up on the customer side or.
Jamie Kramer
Is it like a technical delay from our side?
Vishal Rangwala
It’s a little bit of both. As I was mentioning that there were last quarter I mentioned that there were some programs which got delayed at our end and then some of it was demand and delay from customer and so on. So it was combination and we are very hopeful that we’ll come back on.
Vishal Rangwala
Track and also add in Jamie, there are also the global queues ahead over there because of the global uncertainty, customer was also delaying their long term calls of transferring or enhancing their supply chain outside their comfort zone. So we see that the things are settling down in global side. These things will ramp up now.
Jamie Kramer
Got it sir, got it.
Jamie Kramer
And we understand, I mean, you know, advantage front.
Jamie Kramer
I mean it will not take two years to reach an optimum mix.
Jamie Kramer
If you could just help us, I.
Jamie Kramer
Mean how your scale up looks like for the next year, for the next year itself. How should we think about that?
Jamie Kramer
Is there any delay on the customer validation front?
Jamie Kramer
Anything on that color front?
Vishal Rangwala
No, things are online Jaimin. But Considering this is a new plant and at an early stage, give us a quarter or two quarters more where we will be able to give you better guidelines considering the customers acceptance and approval stage over there. But yes, as we said, we see that we are on the same track of achieving the optimum level within two years or around in two years from our capitalization and we see that ramp up will come and it will come faster stage once we get the approvals.
Jamie Kramer
Got it, sir. Got it.
Jamie Kramer
Yeah. That’s it for my friend.
Jamie Kramer
Thank you so much. Thanks.
operator
Thank you. The next question is from the line of Jason from IDBI Capital. Please go ahead.
Jason Soans
Yeah, so thank you for taking my question. I’m audible, right?
Vishal Rangwala
Yeah, yeah, yeah, yeah.
Jason Soans
Yes, yes. Sure. So the first question just pertains to, you know, when I just take this the console minus standalone. So you get the subsidiary numbers. So when you look at it, the loss is around 157 million. Now I understand even this quarter, 4 crore losses from the advantage and 4 crore losses from the overseas subsidies. That is how it is panning out. So sir, just in light of the same, just wanted some color on 26 is almost done. So 27, how should it look when you look at, you know, even you look at Advantage and you look at the OC subsidies, how do you look at it? How does this loss thing should go ahead or some profitability, just some color on these, these two aspects you wanted, I wanted from you.
Maulik Jasani
So Jason, I think some arithmetic I want to clarify before Vishal or Maulik moves on. So at the subsidiary level, as I said, the loss for nine months is about 6 crores. Correct. And Advantage, as you could see, we have already given the figure that that advance take was around 9 crores. That is how you are looking at 15. Right. For 9 months. 15 crores, right.
Jason Soans
No, no, no, sir. See when you look at the complete subsidiary loss. Okay. Just for. So my number, what I said was 157 million was for nine months. Okay. So that’s a pat number. I’m looking at 157 loss.
Maulik Jasani
Okay. Simple console minus standard. Yeah, yeah, yeah, yeah. Reported pat. Yeah. So now this, this quote, now let’s not confuse. But I understand it’s a combination of Advantage loss and the OC subsidiaries loss. This is what predominantly is 80, 90% of the things. Yeah. So just wanted to know how this should go to 26 and 20. 26 is almost done.
27. How do you look at these two factors playing out? How should it, how should we look at it?
Maulik Jasani
So that’s what we said. We will give a better guidelines on 26 in the quarter four year end. But just to give you some heads up.
Maulik Jasani
Yeah.
Maulik Jasani
Is that obviously Advantage will turn positive and China continues to grow in the same territory with a better margin. And Roman, our intention is to make it break even fast at EBITDA level followed by at a profit level. That’s. That’s the major intent.
Jason Soans
Okay. Okay, sure. So I’ll look forward to the Q4 guidance. Sure. And sir, on. In terms of the standalone revenue we should be able to track. I mean you did mention standalone engineering revenue. Just would want to know. 10% revenue growth should be a fair assumption for 26, 27 going ahead. We should be able to do this. 10% revenue growth at least.
Maulik Jasani
Yes.
Maulik Jasani
And same answer. Wait for Q4N.
Maulik Jasani
Yeah, but. Yeah, I mean you may.
Jason Soans
Yeah. Yes, yes, yes, yes. Okay. Okay. And sir, just in terms of this ramp up you mentioned Advantage will take two years.
Jason Soans
Okay.
Jason Soans
To ramp up. I understand. So peak revenue again probably 2x is a fair assumption. So how much of investments are in Advantage? Just wanted to know. So I mean just a calculation of peak revenue.
Vishal Rangwala
So on the plant and machinery investment. Yes. You can consider 2x.
Vishal Rangwala
2X.
Jason Soans
So how much infrastructure and land and building. Yeah, yeah.
Vishal Rangwala
Correct.
Vishal Rangwala
Currently Investment is around 210 crore plus. Precise numbers on hand.
Vishal Rangwala
Okay.
Vishal Rangwala
But majority of that is also infrastructure and land and building. While is around 100 crore plus 120 crore something machinery. That will be.
Jason Soans
Okay, so we have to take the 2x on the machinery. Right. Okay, fine. Right. Right sir. Okay. Okay. And the main products are from.
Vishal Rangwala
Sorry, Jason. We will also incremental machinery is coming up and that will be still in a pipeline. And we will give the. That also in guidelines.
Jason Soans
Sure, sure. Of course. Of course it has to be on a plant and machinery only. The other infrastructure is common infra. Get it, sir. And so the main products from Advantage you have mentioned before, but just wanted to clarify. The bushing stampings and the large size carrying large sized cages. These are the main products from Advantech. Is that right?
Vishal Rangwala
You’re right. The incremental growth and new businesses of these three lines.
Jason Soans
Sure, sir.
Jason Soans
That’s.
Jason Soans
That’s all from my side. Thank you. Thank you so much for answering my question.
Maulik Jasani
Thank you.
operator
Thank you. The next question is from the line of Saket Kapoor from Kapoor and company. Please go ahead.
Saket Kapoor
Just a follow up on what the participant just mentioned. For advantage, the product profile would be skewed towards bushing and large size cages.
Maulik Jasani
Correct?
Vishal Rangwala
Yes. And sampling a Little bit.
Jason Soans
Okay, I think so for the large size cases you did alluded earlier about the market and there were some deterrents which we were trying to resolve correctly. What’s the business environment or the demand pertaining to the last size cases what are the fillers?
Vishal Rangwala
A couple of quarters back, few quarters back we did mention that market for industrial product was very sluggish and that was the reason for very moderate or not much growth in large size. We might have mentioned that. I think we are seeing that turning around over and above the fact that we are looking at more additional product development in order to for future in this. So yeah those factors are somewhat improving what we had mentioned earlier.
Jason Soans
Okay, total investment for advantage. Are we done with the entire capex? And also for the commercialization part what is any closing for capital work in progress? Is there.
Vishal Rangwala
In the previous questions? I already said in the previous question saket the incremental plant and machinery will continue in advantage considering that wherever there is a requirement of additional capacity and wherever we see the incremental growth can come we will continue to have a plant and machinery spending there.
Jason Soans
But I still said we have something to commercialize. I want to if you could give that as a date how much can be invested including the land for for this unit or if you could give the bifurcation.
Maulik Jasani
No as for to answer your question yes there are few working progress in CAPEX side also including on the including on the building side there are some other buildings like admin and others are under capitalization yet to be capitalized and some plant and machinery under installation so around 40 crore is the rough number. Stop on my head.
Jason Soans
Okay, what should be the then the total investment for this unit as a whole as on date at the first.
Maulik Jasani
So it’s an ongoing thing but yes we expect it to end this year around 250 crore plus.
Maulik Jasani
250 and and the peak revenue for this also will be 2x or will be different to assume today because of that the large size cages and the bushing part what should be the peak turnover that we may expect or the asset turnover issue.
Maulik Jasani
2X of the plant and machineries and but you also have to keep in mind the incremental plant and machineries to be to be in pipeline but yes 2x of the plant and machinery not of the full capex.
Jason Soans
Okay right.
Jason Soans
Thank you for all these elaborate answers and all the best to the team.
Maulik Jasani
Thank you.
operator
Thank you. The next question is from the line of Jason from IDBI Capital. Please go ahead.
Jason Soans
Yes sir. Thanks for taking my question again sir, just one last question. We just wanted to know, sir, in terms of CapEx, what we are guiding for 20166 and 27 on a console level.
Vishal Rangwala
Wait for Q4. Jason, same answer.
Jason Soans
Okay. Sure, sure. Sure, sir. Okay. Okay.
Vishal Rangwala
Thank you.
operator
Thank you.
operator
Is there a. No further questions on the participants. I would now hand the conference over to Mr. Vishal for closing comments. Over to you, sir.
operator
Thank you.
Vishal Rangwala
And today I would like to thank you all for continued confidence and support for Harsha Engineers. And then I wish you all very good evening. Thank you very much.
Maulik Jasani
Thank you.
Vishal Rangwala
Thank you everyone.
operator
Thank you. On behalf of Harsha Engineers International Ltd. That concludes this conference. Thank you for joining us. And you may not now disconnect the lines. Thank you.