Kalyani Forge Ltd (NSE: KALYANIFRG) Q4 2025 Earnings Call dated May. 28, 2025
Corporate Participants:
Unidentified Speaker
Viraj G. Kalyani — Managing Director
Viraj G. Kalyani — Managing Director
Nilesh Bandale — Chief Financial Officer
Analysts:
Unidentified Participant
Ankur Agarwal — Analyst
Presentation:
operator
Good morning ladies and gentlemen and a very warm welcome to Our Kalyani Bush Ltd. Fourth quarter and financial year ended 31 March 2025. Analyst and investor Confidence Corp. This is a channel Mango that all participant lines will be in win only mode and there will be an opportunity for you to ask question after the presentation concludes. Should you need any assistance during the conference call, please signal an operator by pressing Start then zero on your touch or your system. Please note that the this is once is being recorded before we move on to the presentation.
A small disclaimer to participants. This conference call may contain forward looking statements about the company which are based on beliefs, opinions and expectations of the company. And on the date of this call, these statements are not the guarantee of future performance and involves risks and certainties that are difficult to predict n ow. I now hand over the conference over to Mr. Viraji Kalyani, Managing of Kalyani Porsche Ltd. And Mr. Nilesh Bandare, Chief Financial Officer of the company. Thank you. And over to you Viraj sir.
Viraj G. Kalyani — Managing Director
Yeah. Good morning. Good morning everybody. Very warm welcome to all our investors, shareholders, potential investors and general participants who are in interested in Kalyani Forge. Those who have been regular to our investor meet. We are very happy to have you back. And we look forward to a very insightful and interactive participation today. So I will take you through our investor presentation and after that we will go through some Q and A which both myself and our CFO Nilesh will try our best to answer your questions. Okay. Rachna, can you confirm the screen is visible for all? The presentation is visible to all?
operator
Yes.
Viraj G. Kalyani — Managing Director
Okay. So this is our Investor presentation for Q4FY25 as well as for the financial year FY25. So as Rachna already mentioned, this is a safe harbor statement that this presentation contains forward looking statements that may be based on assumptions and information available to management. So please exercise caution while using this in information when taking your investment decisions. Can you hear me now? Yes. Okay. So please exercise some caution while taking your investment decisions. The next few slides are a repeat from earlier presentations. So I’m going to go through them very quickly. The presentation is also available online on the stock exchange portals.
And it will also be available on our website on the investor section. So these are our company stats. We are established in 1978 around 50 years in the industry located in Pune. There are five plants in the same 1km radius. The recording has stopped. These are our company milestones from 1980s till the 2000s we have evolved through many important milestones of growth starting from two wheelers to passenger cars to trucks and industrial segment forgings. And throughout the journey we have been pioneering in technology making very high precision quality forgings. And we were also the first to make the fracture split connecting rod which continues to be one of our core businesses today. These are our product offerings Engine, driveline and access. This meeting is being recorded are the. Three major product groups. Again this is a slide which is just for everybody’s reference and I have shared it earlier but connecting rods continue to be a major part of our business in especially in the ICE segment. But in the XCV segment the driveline business is growing very fast and we’re also doing a graduating from asphalt supplies to machine fully finished supplies. The axle products are also Xev and fuel agnostic components. This is also a major growth segment with high tonnage business which were which is produced on our larger presses. We are well diversified and leveraging common strengths across market segments such as commercial vehicles and trucks, passenger cars, industrials and agro segment.
All four segments we have different strategies because they have a different way of of evolving as markets and we we see a lot of growth potential in each of these four segments. This is our leadership at the board of director level. Our executive chairperson is Mrs. Rohini Kalyani. Myself I’m the managing director Viraj Kalyani. Gauri Shankar Kalyani is our non executive director and we have three independent directors Mr. Ajay Tandan, Mr. Jeevan Mahaldar and Mr. Abhijit said. All board members have deep expertise and experience at scale especially auto, automotive manufacturing, domain knowledge, global expertise and strong strategic skills.
So this is a our growth formula, KFL growth formula which I have been presenting every quarter and it is still our backbone of growth and profitable growth which we will show in the next few slides in more detail. But the main aspects are strong execution plus business development plus CAPEX equals growth. That is the formula and we work on all three pillars in a lot of detail. Especially the last quarter we have been able to achieve a good amount of depth of process in these areas and we can see that in the results as well.
So first coming to strong execution these are our financial results for quarter. For the quarter ended the 31st of March. So what you see is quarterly figures. Our total income was 59.34 crores. It’s grown over the previous quarter of 58.6 crores and also significantly grow over the same quarter last year which was 56.82 crores. EBITDA is at 6.74 crores. We have maintained a good level of EBITDA growth over the last three quarters and we will continue to build on this and that is what is reflecting in the bottom line. Our PAT for Q4 is 2.23 crores which is also fairly healthy level at this point in time.
It’s much more than the PAT of Q4 last year which was only 71 lakhs. So we’re seeing a PAT increase of almost 3x compared to last year’s quarter. EBITDA is 11.4% which is also in line with our expectations and the EBITDA margin expansion. We will continue to build on this in the coming year and I will explain the major initiatives that we have taken for EBITDA improvement. This is our yearly trends. So for the financial year FY25 the same charts of revenue, EBITDA PAT and EBITDA margin. So revenue is 240, 239.2 crores which is flat compared to last year of 240 crores.
As explained in earlier quarterly presentations, we have been we have a good amount of new business that is part of FY25 sales but we have also consciously got rid of non profitable business or non strategic businesses and hence our overall revenue is flat. In addition to this there have been some market Factors especially in Q3 of this year where there was some reduction in demand in the automotive space, but that was expected. The the major point and highlight of this year is that we have achieved our highest profit after tax in 10 years and that is 8.3 crores in FY25.
So I’m very happy to share this news with all of you. This is a significant jump from the previous year PAT of 4.6 crores and it is driven to a large extent by our EBITDA increase which is also one of the highest in the last 10 years our EBITDA stood at 26.5 crores compared to 17.7 crores last year and it was around that level last three years. Our EBITDA margin has also taken a good jump to 11.1% compared to the previous four years trend which was more in the range of 7 to 8%. So this has been unexpected lines where we are working on improved operational efficiencies, improving the sales mix and the business mix, simplifying the business, removing inefficiencies and by being more strategic about the businesses we want to work in, we are able to improve our pricing and the overall realization from sales.
So those are the major high level factors affecting and propelling our results this year. Continuing with strong shareholder returns, we have declared a dividend of 4 rupees per share for FY25. This is also our highest dividend so far at least in the last five years. And our share price bounced back to an all time high of 890 rupees during the last few months which is also very heartening news to see that the market has been keeping track of our progress and rewarding us with better valuations. So I’d like to thank our shareholders for their contribution and encouragement throughout this journey.
There’s still a long way to go and we will do a lot more going forward. Our second pillar in the growth formula is business development. Here also I’m very happy to share that we have got a all time high new order wins of 115 crores in FY25. This is about 10 crores higher than the previous year where we received 95 crores of new order wins. The important thing to see in the graph is that the last two years the engines of growth have been really activated and especially the engines of long term growth and therefore our business development efforts have been continuous and on an increasing trend and that is our major the major raw material that we need for growth of any company.
Particularly in the last quarter we have two new machine connecting rod programs which had SOPS. SOPS means start of production. This commenced in Q4. We also have samples approved for a new automotive export order. So it’s high volume and good value order and it will add to our exports portfolio which is also strategic, strategically important. Again I’m very happy to share that we received a collaboration excellence award from Mahindra for fast development of connecting rods for their engine program. So this is a matter of great pride for us. Mahindra has been a very long standing customer and the fact that we our team really pulled a lot of effort in a matter of one or two months to put up a new connecting rod line, develop the samples, get them prepacked and start SOPS was very well appreciated by one of our very important customers I.e.
mahindra and therefore in a nutshell, Kalyani Forge enjoys an entrenched position with multi decade relationships with OEMs and the numbers are testimony of that. Our third pillar of growth is CapEx. And this time I’m going to share you a more detailed picture of our CAPEX investments. This is also based on feedback from earlier investor calls where we did not have all this data at that point. So the capex that we did in FY25 was 24.4 crores. This is slightly lower than the previous year of 26 crores. And our next year’s budget FY26 budget is 25 crores which is approved by the CAPEX Allocation committee and the board.
What I want to highlight here is that this is the first time that over a three year period we have had significant amount of CapEx compared to earlier trends. And this also means that we as a company and as leadership right from the board level we are very serious about capex. We are very optimistic about market prospects and the company’s ability to and cash on them. And hence we are doing these continuous investments. Another important point of why this CAPEX program is so important is that we are also making up for some of the lost time in the past where we did were not as aggressive in doing these investments.
So a good amount of this CAPEX budget especially for FY26 is allocated towards existing business programs which means reconditioning of old forging presses and machines, bringing them back to life or improving their performance specs. So as you can see a photo here on the right hand side is our first full recon project completed for a 1600 ton forging press. And this is something we are going to do in a more structured way this year onwards as part of our forging modernization program which is initiated for profitability improvement. So we are going to take different press lines every few months for complete overhaul reconditioning and make them as good as new so that their performance parameters are up to the mark.
The quality level of the products will be very good. So our OES will improve and are which directly impacts our ability to produce and deliver and achieve the sales and EBITDA targets. So this is one of the important programs sub programs within the overall CAPEX program. Our fixed assets for Q4 at the end of Q4 stood at 60.4 crores and as you can see in the graph below 15 crores is the CWIP capital work in progress. So there have been new additions as well as new projects that were started in Q4 and this cycle will continue into the next quarter.
We should be commissioning a lot of these projects in Q1. Some more notable highlights of the quarter we have a new Chro who has joined the company to strengthen HR. His name is Mr. Kedar Nimbalkar. We have upgraded our performance appraisal system across all staff. This was very important to build a cultural transformation within the company to become a more performance oriented organization across all levels and to align everyone’s goals from top to bottom in line with the long term goals of the company as well as the annual goals. We conducted a detailed energy audit of all our plants.
This has helped us to identify several improvement areas pertaining to power cost reduction, improving energy efficiency, reducing downtime in our plants, etc. The Capex Allocation Committee sanctioned a budget of 25 crores for FY26. The important thing to highlight here is that this is the first time that we have had a very detailed analysis at the board level on capex and this sets the tone for going forward where we will be very judicious in our CAPEX spend but also be very timely and ensure that the right capacity is put in place at the right time and we do not fall short of our growth prospects.
Term loans were also secured for funding this CAPEX of FY26 in the last quarter so. So we are pretty comfortable from a funding standpoint and we also achieved a sustainability assessment score which crossed 70%. This is a growing trend and an important requirement to also win orders and in general it’s a very important initiative where through sustainability the company becomes more efficient and we are protecting the planet, taking care of our environment or you know, the the taking care of the emissions from our indirect processes and supply chain. So we have started that journey as well and finally this is our game plan for the next 12 months that is FY26.
So since we have ended the last financial year I want to just give an overall picture of the next 12 months. We have established a Vritti Council which is a council of project leaders in line with our mission of 2027 where we have a growth target of doubling revenues and increasing EBITDA margins. So in this year we have identified 13 high impact initiatives for growth and EBITDA expansion themes like machine reconditioning, purchase cost reduction, power cost reduction, productivity process optimization and COP Q reduction. Those are some of the major themes for these high impact initiatives.
There are new business sops worth around 50 crores that we are planning in this year. Execution of 25 core CAPEX projects Digitized Compliance Management system to ensure that our governance is strengthened and we are much more robust especially in a growth journey. Enhancement of ERP and SAP based functionality of controls Deepening Case Carda Portal with Kalyani Studio so this Case Carda is a digital platform that we have developed as our manufacturing execution system. It takes a lot of data from our various softwares like SAP and other, you know, other machine data etc. And provides very insightful analytics and visibility of trends for for managers and leaders inside our company.
This is developed with Kalyani Studio, one of our sister concerns in the group and it’s a major, major advantage for which helps in our strong execution and helps us take better informed decisions. So overall this is the game plan for the next 12 months and with that I come to the end of our presentation. So thank you very much and I look forward to your Q and A.
Questions and Answers:
operator
Thank you sir. Thank you for your insightful presentation. So there are a few questions in the chat box.
Viraj G. Kalyani
Yeah,
operator
I will take that off and then we can go ahead with the one to one questions. So the first two questions were asked Mr. Harish Zala. That is one. In last quarter we mentioned nearly 350 crore order book. Here we are presenting 115 crore new order win. Is this addition to 350 crore. And the second question is a really good job done at improved PAT. But sir, our top line is trending since last 10 years to about 230 crore.
What we expect top line in next two years. These are the two questions.
Viraj G. Kalyani
Okay, so the three hundred and fifty crores that we showed in last year, I mean in the last one of the earlier presentations was an overall order book value which includes multi year programs. The 115 crores is a peak annual values for these programs. So we have just made our measurement much more consistent so that we can compare these numbers to the sales figures. So the two figures are not the same definition. So 115 crores is peak annual sales value. As you can see in the footnote below the graph the second question is on top line.
So definitely again it’s this new new order wins that are going to add to our top line. We are expecting a healthy growth in the next year as we are focusing a lot on our sample development start of SOPs and ensuring the capacities are in place or ramped up for the additional revenues. So that is the very concerted effort that we will be taking to ensure a significant growth in top line as well in the coming year.
operator
Moving ahead with the next question which come from Nitin Gandhi. His concern is from capex, what is asset turnover payback period, addition, expected margin and optimal revenue. And post expansion what is expected peak potential revenue?
Viraj G. Kalyani
Can you Repeat that about capex?
operator
Yes sir, Mr. Nitin is asking for capex, what is asset turnover, payback period and expected margin at optimal revenue and post expansion what is expected potential revenue.
Viraj G. Kalyani
Asset turnover Payback period. And then what’s the third one?
operator
Expected margin at optimal revenue.
Viraj G. Kalyani
Expected margin at optimal revenue,
operator
yes. And post expansion what is expected peak. Potential revenue
Viraj G. Kalyani
post expansion? Okay so asset turnover currently is. So just for everybody’s awareness that is sales divided by total assets we have currently a very high asset turnover ratio compared to the industry benchmark. Our objective is to bring the asset turnover to the benchmark level. That means there will be some reduction in the asset turnover ratio. Typically in the forging industry asset turnover ratio of two is to one is a thumb rule. So that’s what we are going to aim towards. But that journey will take time as we continue to increase our CapEx over several years.
Right now our asset turnover would be.
Nilesh Bandale
IT’s network is 60 crore and our turnover is near about 240. So
Viraj G. Kalyani
yeah
Nilesh Bandale
consider with network then our asset turnover. Asset sales are four times of assets.
Viraj G. Kalyani
Okay, four, four times, yeah. So that’s the, the plan. I mean don’t take these figures as a fixed amount because the denominator can change by definition payback period. We, it depends from project to project. Some projects we expect payback within six months, some are within one year and some are within two years. So some have longer gestation based on the product development lead time, the establishment of process manufacturing process and so on but those are, that’s the general range expected margins as well. I cannot give exact details and these are proprietary in nature but definitely the, what we keep an eye on is the CapEx ensures we maintain our existing margins or we are increasing the margins with much more efficient machinery or newer technology.
operator
Thank you sir. We’ll be taking next question. That is from Mr. Vanesh. What is the sustainable EBITDA margin? Also what has added the margin in financial year 25? What are the expectations going forward?
Viraj G. Kalyani
Yeah Nilesh, do you want to take this and I can add.
Nilesh Bandale
Yeah. Sustainable EBITDA margin. Right now our EBITDA is near about 10 to 12% but our long term goal is 15%. So in future also we will, we will be able to do that in that range 10 to 12%. And second question was for increase in profit. It is because of operational efficiency. We do, we did lot of efforts on operational excellence and that are reflecting here.
Viraj G. Kalyani
Yes. Additionally we improved our sales mix and removed some low profit businesses as well.
operator
Thank you sir. If any of the participants wants to ask questions kindly raise your hand or post it into the chat box. Yes Mr.
Unidentified Participant
Namaskar, thank you firstly for this opportunity. So the first point was regarding the, the CapEx part so you did, you did alluded to the fact that we are in the CAPEX mode for the last two years and other two more years are where we would be investing. So what would be the peaks peak? When will we be picking at the CAPEX part? How much will be investing and then onwards how will the our utilization levels or our turnover likely to shape up and what kind of capacity additions are we going through in terms of my.
You have spoken about modernization but there should be also the volume addition. Yes, sometimes. But also if you could just allude to. We would get better understanding.
Viraj G. Kalyani
Yes, definitely. I only. I only mentioned about the reconditioning and modernization projects. But that’s only one part of it. Another major program is the machining capacity addition. So we are expanding new machining lines for our various products which are like connecting rods, driveline parts and axle parts. That. That will be a major capacity addition. We are also investing in particular machines which help in debottlenecking some of the lines that will also add incremental capacity. This CAPEX cycle will continue as our growth plans, you know are. Are in place for the next few years. So. So we will be deciding on the next year’s CAPEX in about three to six months.
The CAPEX allocation committee will again is planned to meet sometime in July or August and that’s when we will review the next year’s CAPEX plan.
operator
Thank you sir.
Viraj G. Kalyani
And one more point to add on utilization. So as we are doing a lot of reconditioning we will improve the utilization of some of the existing machinery. So it may not add capacity but it will improve utilization and therefore it will improve our profitability as well as sales. Yes,
operator
thank you sir. We are taking him.
Unidentified Participant
Sir. Good afternoon.
Viraj G. Kalyani
Yeah, good afternoon.
Unidentified Participant
Thanks a lot for heartwarming results for the year 2425.
Viraj G. Kalyani
Thank you. Thank you.
Unidentified Participant
The magnificent sporting margins and net profits are a boon to all the stakeholders or thanks to chairperson and dynamic MD Sri Viraj and I hope that AFL growth formula will continue to serve the interest of our nation. But I have a question. Are we focusing more on defense sectors?
Viraj G. Kalyani
We are. We. We have started a project with one of our customers. Given the, you know the. The sensitive nature of some of these projects, I cannot divulge details but our projects and new business in defense are currently focused on our existing product portfolio. As we evolve and build our capacity we will look at more such allied products or components which we can leverage with our existing facilities. But it is part of our long term growth strategy.
Unidentified Participant
Yes sir.
Viraj G. Kalyani
Yeah, thank You.
Unidentified Participant
And one more. Thanks for rising dividends. Yes, yes. We are happy to share the good news and and definitely reward our shareholders whenever we have good results.
operator
Thank you, sir. We’ll take Next question from Mr. Ankur.
Ankur Agarwal
Sir.
Viraj G. Kalyani
Hello. Yes.
Ankur Agarwal
Any expansion towards railway sector? Some growth done on next four or five years.
Viraj G. Kalyani
We are already present in the railway business. We make some niche components for railway braking systems which we are exporting to Europe. We will look at new products in this portfolio. But over the next few years our current strategy is to grow our core business so that we have enough cash flows to invest in new product development in these different segments like railway and defense. There are also some components in railways that require larger presses. So our 4,000 ton press project will help in catering to those type of products.
Ankur Agarwal
You have some Capex plant, you have to raise depth and that will hurt your bottom line.
Viraj G. Kalyani
Sorry, can you repeat that?
Ankur Agarwal
As you have a Capex plan, so you have to raise debt term loan that will hurt your bottom line or it will be managed.
Viraj G. Kalyani
It will be managed. I think Nilesh can share more details on how you’re doing that right now.
Ankur Agarwal
As. As Mr. Bilasar spoke, it is for larger parts and we have already one larger press, 4,000 ton press in our CV. So if there are any business from this sector, we’ll cater without any. Without hampering our bottom line.
Viraj G. Kalyani
I think the question was around debt taking. No, no debt and how we will manage our bottom line.
Nilesh Bandale
There will be more new debts because the. The larger prices in CB 4000 ton press for larger parts. So there will be no additional debt other than this current Capex plan. So there will not be any additional hit to our bottom line.
Viraj G. Kalyani
And we are also retiring some of our older debt. So there’s a close watch we’re keeping on our debt to equity ratio.
Ankur Agarwal
The projection for 15% margin up to when, which year you will be achieved that.
Viraj G. Kalyani
We can’t make an exact prediction but it is definitely our target. This is part of our target over the next few years.
Ankur Agarwal
Next fewer means five year or three year plan.
Viraj G. Kalyani
We cannot give a specific because it’s. You know, you’ll see the results. We are confident of getting there sooner than later.
Ankur Agarwal
Any dividend policy for how much percentage of dividend of total net profit?
Viraj G. Kalyani
Yes, that’s a very good question. We have started strategically looking at our dividend policy. This is something we will take up in the next board meetings. For this phase in our journey we have to balance between dividend payout ratio which is for different types of investors. But I’d like to say this, that strategically we want to prioritize value investing so we want to invest more money back into the company for growth and expansion which will in turn increase the value of the company and the shares for the shareholders.
Ankur Agarwal
As our company equity is very low. Any plan to raise the equity capital by way of right issue QIP or promoter hike stake?
Viraj G. Kalyani
Yes, we are currently discussing this, these plans. I cannot give a certain date for this but as a promoter CEO I can, I can say pretty optimistically that this is a path that we are taking, taking up in the future and we are very optimistic and about the long term prospects of this business.
Ankur Agarwal
And now as we all know that the EV is now in the market, so any threat to our business, IC business, we are shifting some parts to ev.
Viraj G. Kalyani
We have been shifting a good amount of parts to the XEV segment which means parts which work both in ICE and evolve vehicles. So the driveline and axle components fall in that category and both are fast growing segments.
Ankur Agarwal
Okay, thank you. That’s all from my side. Thanks.
Viraj G. Kalyani
Thank you.
operator
Had some questions for that.
Unidentified Participant
Actually ma’ am, I muted myself to lower the background noise so I was not done with my questions so I just tried to put forward and if you could just authorize us to unmute also then it would be easier so that the background noise could have been avoided. Anyway sir, firstly as you said mentioned, you are interested in deploying capital and raising your stake. So means in, in this, in this CAPEX journey, you want to fund the capex through the equity issuance that is what you are aligning to?
Viraj G. Kalyani
Yes, what I’m, what I’m saying is that raising capital from equity is something we are looking at in the future. This is something we haven’t done in the past, but now we feel it’s a right time and as promoters as well we are, you know, we definitely have a strong inclination to participate in such fundraise but I cannot give any definitive, you know, announcements at this point. Let’s just say that it is under evaluation.
Unidentified Participant
Yes, that is correct, it has to be evaluated. Program need to be done then only it would be executed. As you have already given the roadmap to growth profitability, there is also a roadmap for fundraising exercise also absolutely correct on that front. But since for the last two years we have already done capex to the tune of 49 crore and for the current year also I think the 25 crore has been outlined. So in total 75 cr is the capex. However our top line has Been to the close to the tune of around 236 to 40 crore for the last two fiscal.
So just to get an understanding 75 crore is a huge amount being invested. So if you could just give some color on what will did catapults. And also my second question was although our top line was flat, our bottom line doubled. So the factors which led to this doubling, whether it is the product mix, what kind of efficiency.
Viraj G. Kalyani
Yes,
Unidentified Participant
answers the best.
Viraj G. Kalyani
I think the two or three points that you’ve highlighted are all interrelated. The capex that we have done has actually helped us in the first phase in improving the profitability and the bottom line and on the and so it has not completely flown into top line. A significant portion of this capex is for replacement machinery and reconditioning of existing machinery. So it helps to maintain the existing business as well as improve the opera operating effectiveness and efficiency of the business which Nilesh pointed out was one of the major factors for EBITDA growth. So that is the story so far.
There are also several projects that are in that are work in progress and they take time to you know convert into regular production. So that’s, that’s the typical nature of these investments
Unidentified Participant
Sir. Any color you can give on the tonnage part. What what I could make understand is that the joby apnea capex that is for the efficiency part just may capacity addition but yield product mix say profitability increase.
Viraj G. Kalyani
Yes. So actual production installed capacity tonnage here with the 4000 ton press and we have a new 1600 ton press. So these are additional presses which are adding to the overall tonnage. But the rest of the reconditioning and modernization programs will improve our actual production tonnage. Apart from that our machining capacity has been increasing in terms of capacity value as well as quantity production quantity for the year. So that is something we we actually track daily production quantity for each of our machining lines and we work on improving that capacity or adding new capacity.
Unidentified Participant
The point which I want to understand is the what what since you mentioned that whatever money has gone into major part has gone into the efficiency improving the profitability so on on. On a turnover base of say 240 crore with the type of capex and efficiency that we have were seen in this year. What should we look forward in terms of incremental growth in the tonnage part? And secondly sir, as you mentioned that are we sourcing our casting from from market or how is the casting is is the casting process. And also one more suggestion sir, third point is that if you could just elaborate the process processes through which our RM so, so we can understand.
Viraj G. Kalyani
Okay. Regarding your tonnage question on the. On you know, next year again that’s more of a forward looking prediction which we cannot make. Currently our tonnage is in the range of 11,000 to 12,000 tons of production. Definitely with the top line growth, there will be some increase in tonnage next year. But we are also looking at value increase. So with more machine products the sales value would increase but the tonnage may may not increase as much in terms of the manufacturing process. And on your question about casting. So we don’t do casting, we only do forging.
We make our dies and tools in house. In terms of the manufacturing process. Yes, this was something we, we discussed in the previous call as well. The entire process is available on our website. But just in a nutshell, the major processes are from cutting, forging, heat treatment in some cases. Then there’s finishing processes like short blasting and final inspection on the forging side. And after that there is a machining processes which are on a machining line.
Unidentified Participant
Two short points and I’ll join the queue. Firstly, when. When we look at the PNL for this financial year, the employee cost is also I think so the largest component I more than 15, 16% of the revenue goes into it. So going ahead this would be the fixed cost component because for the last two years the employee cost have remained the same. So as a turnover. So what should be to look at this line item with the type of efficiency which you are alluding to. And on this 11,000, 11,000 ton tonnage, what was our utilization level for the last two fiscal.
If you could give some color on this.
Viraj G. Kalyani
Okay, so you’re trying to back calculate our capacity. Okay. On the employee cost we are targeting to bring it to a much more efficient level. But the major lever is increasing the top line. So employee cost as a percentage of sales would come down. We have had several meetings of the nrc. That’s the nomination and remuneration committee of the board where this year for the first time we have taken a lot of detailed analysis and strategizing on our talent pipeline, focusing on our human capital assets and looking at growing our employees along with our growth journey.
An important part of this, as I highlighted in my presentation is the cultural transformation to becoming a much more high performance oriented company. So good performance will be highly rewarded within the company and in our employee base and bad performance will have, you know, different will have different consequences or not be rewarded. So we are making that distinction More and more clear in this transformation journey. In terms of the utilization on production tonnage. This is purely on the forging side. So. And it differs from press to press. But at an overall level I can say that we are at between 50 to 60% utilization.
Unidentified Participant
Okay. So there’s a lot of headroom to grow on from the existing capacity. Definitely coming here.
Viraj G. Kalyani
I mean that’s a good target to have. It’s in forging it’s always a little difficult to drastically increase utilization because the time it takes to overhaul the presses and all is involved. But yes, that is a. That is a target.
Unidentified Participant
Very simple growth.
Viraj G. Kalyani
So it’s on high priority. I think we need to give a chance to.
Unidentified Participant
I am joining that other was just concluding remarks. If I could visit the facility and have some more understanding on ground whether you are facilitating the same. Because it’s a very small lesser known company with the type of Capex and all you are doing. So there will be lots.
Viraj G. Kalyani
Yes, we. We do organize visits to select shareholders. I mean so based on. You know, based on time availability and coordinating schedule. So our investor relations team of Rajkumar and Rachna will. You can be in touch with them. Yeah.
Unidentified Participant
Okay. Rachna ma’ am, kindly coordinate. You have my details, my number and everything is available. Post the call as per your convenience. Thank you, sir.
Viraj G. Kalyani
Thank you. Thank you.
operator
There are few question in the chat box.
Viraj G. Kalyani
Yes. Just in terms of time.
operator
This is from Mr. Harish. Hello.
Viraj G. Kalyani
Sorry Rachna. Just so how much more time will we be continuing? Just so that everybody
operator
we have half an hour more.
Viraj G. Kalyani
Okay. I think by. All right. Yeah.
operator
So the question is from Mr. Harish that can we expect 350 crore top line next year.
Viraj G. Kalyani
Yeah. We. We cannot make a forecast. We do have our internal plans to substantially increase our top line.
operator
Thank you, sir. The next question is from Mrs. Shaurya. What is our current capacity and what will be post Capex? And what is the capacity utilization. This has been answered time to time in this discussion.
Viraj G. Kalyani
Yes. Yes.
operator
You want to. Moving ahead with the next question from Mr. Shaulia Punyani only. How much export are a percentage of revenue. And what are the major countries to whom we are exporting.
Viraj G. Kalyani
Yeah, our exports is. We had a 11% increase in exports in FY25. Now don’t quote these numbers because they are still under evaluation. But we did 48 crores in exports in FY25. And in FY24 it was around 43 crores. Again these are not fully verified data. Hence we haven’t Published it in the presentation. So just going by that as a percentage of our product sales this comes to about 20, 23% purely with product sales. But from total revenue it would be about 20%. So this has increased compared to 15% earlier. And this is a very healthy development.
It’s very strategic that we want to increase our exports business. Take it up to 50% of total revenues in the next few years. So that is the direction we are going in.
operator
Thank you sir. We are taking the next question from Mr. Vanesh. So does that mean the tonnage will remain same as 11,000 metric empty?
Viraj G. Kalyani
We can’t say for sure. I mean we would like the tonnage to increase. It won’t increase in the same ratio as the sales growth because we are doing more value added sales. So it may not be a one is to one mapping but definitely tonight should increase.
operator
Okay. He has one more question. That is defense order also there in the audible for expectation going forward.
Viraj G. Kalyani
There are some orders but those are in the initial stages. So the volumes are also low and. But those are important projects. That’s all I can say at this point.
operator
Thank you sir. We will take up the next question from Mr. Ankur Agarwal.
Viraj G. Kalyani
Yes.
operator
Yes.
Ankur Agarwal
5060 year old company. We have enough land bank for expansion. We have to need add more land bank for further expansion.
Viraj G. Kalyani
We are very fortunate to have a vast amount of land, open land in our existing premises. Thanks to our visionary executive chairperson who took the bold decision to acquire a big portion of land in Sanaswari. So currently we are occupying, I’d say less than 25% of that land. So we, we have good amount of space to expand
Ankur Agarwal
and we have some. Extra land for monetized for further expansion. Not have some land for the monetization so that we can fund our expansion.
Viraj G. Kalyani
That is something we have to. We have not yet strategized on monetizing existing land to fund, you know, the business. Our core focus is on growing the core business. That is what we would do at this point. But we have optimized a lot of our land usage, even our shop floor space. So we were able to. Last quarter we were able to free up another complete shed by shifting the existing machinery closer to the other machinery. This way we are, we have also created a new town hall for the company. So we have every quarter town hall presentations given by myself and some of the senior team members to the entire staff.
And we are able to, you know have increase our communications across the company and across all the plants.
Ankur Agarwal
How much acre land bank we have. Sorry, how much acres land bank we have.
Viraj G. Kalyani
I don’t have the numbers at my fingertips but it is. It’s substantial.
Ankur Agarwal
Okay.
Viraj G. Kalyani
For our size of business.
Ankur Agarwal
Okay. Thank you. From my side. Thanks.
Viraj G. Kalyani
Thank you. Yeah.
operator
Any more questions.
Viraj G. Kalyani
Rajna? If we can wrap up by 1215 that would be good.
operator
Sir, there are no question it snakes.
Viraj G. Kalyani
I think has one has raised his hand.
Ankur Agarwal
No. No.
Viraj G. Kalyani
Okay.
operator
Yes. We can take up last one question. If any of the investor or interested members present has. Okay. So there are few requests we are receiving for plant visit.
Viraj G. Kalyani
Okay.
operator
In the chat box we are receiving few requests from the investors. Those are very investors and recent interested investors. So we’ll plan meeting to the plant.
Viraj G. Kalyani
Okay.
operator
Rest. We can conclude the meeting with your.
Viraj G. Kalyani
Yes, sounds good. Thank you very much for everybody’s participation. And thank you Rachna for organizing this investor call. Looking forward to meeting again next quarter.
operator
Thank you. Thank you all members. Thank you investors, all stakeholders. We will now end up endlessly and we’ll surely plan for a plant visit as request received and plan another analyst call shortly. Thank you so much for your active participation. We will be ending meeting for all. Have a good day.