Kirloskar Ferrous Industries Ltd (NSE: KIRLFER) Q3 2026 Earnings Call dated Feb. 11, 2026
Corporate Participants:
R. V. Gumaste — Managing Director
R. S. Srivatsan — Executive Director (Finance) and Chief Financial Officer
Analysts:
Unidentified Participant
Pallav Agarwal — Analyst
Digant Haria — Analyst
Aashav Patel — Analyst
Manish Goyal — Analyst
Mahesh Bendre — Analyst
Sahil Sanghvi — Analyst
Bharat Sheth — Analyst
Presentation:
operator
Ladies and gentlemen good day and welcome to Kildoskar Ferris Industries Ltd. Q3 and FY26 analyst call hosted by Antique Stock Broking Ltd. As a reminder all participant line will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation Conclude should you need assistance during the conference call please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Pallavakarwal from NTX Stockbroking Ltd. Thank you and over to you sir.
Pallav Agarwal — Analyst
Yeah thank you Danish and good afternoon everybody. Welcome to the Kiloscope Ferris industry third. Quarter results call so we have the. Senior management of the company represented by Mr. R.V. Gumaste the managing director and Mr. R. S. Rebutzen the ED finance and the CFO so I would now like to. Hand over the call to Mr. Gumaste. For his opening remarks over to you sir.
R. V. Gumaste — Managing Director
Yeah thank you Pallav. Thank you very much and let me first of all welcome everyone on the call for Kirloskar Ferrous Industries Q3. You know the result call. Let me start with some production details. We produced 21% more Pigarin in copper unit and overall flat kind of thing because we didn’t run Hiryur plant for most of the quarter we are now geared up with higher quantity of production from Blast Furnace 1 and 2 and we have capability to produce up to 46 47,000 tons per month from Blast Furnace 1 and 2 and of course is at about 14 to 15,000 metric ton per month so the ability to produce high quantities almost in place at the same time I would like to say that the Pigeran plant is running well with respect to all aspects except definitely continued pressure on margins in Pigeren some light at the end of tunnel From January there are price increases which have come into market Northern India almost like 4000 rupees per ton of pigeon which is like around 10% but other areas especially south and west slightly less but there has been a increase in the picarian prices which should support us in improving the margins testing production was 39,000 against 35,500 which is about 10% increase in the production tube Amadnagar there is an increase of 11% and Baramati we have gone down because of the planned shutdown which was taken during the quarter slightly extended to upgrade one of the heating furnaces coming to the sales figures.
So we are almost flattish kind of Quantity we have 2% growth on the sales quantity cumulatively year to date from 3:76,000 to 3:85,000 which is 2% increase. Whereas the piggeren prices have come down by 9% compared to last year resulting into value turnover coming down by 7%. In case of castings there is a growth of 5% from in the last nine months from 1 lakh metric ton per annum to 1 lakh 5000 metric ton per annum. In addition to this we also have the production and sales of Oliver which is not part of this figure which is the Punjab foundry.
With respect to tubes, you know the last nine months figure if you look at total tube sales has gone up from one 17,000 metric ton to one 37,000 metric ton which is a growth of 17% overall. And in steel we have sold 60,000 tons from 52,000 growth of 16%. In case of casting we have a sales realization dropping marginally but not big way. So we get the benefit of volumetric growth directly. In case of tubes sales realization have substantially gone down especially in Baramati as much as 16% overall in tubes about 11% is the drop in the prices.
With this in terms of value tube sales growth is 5% whereas steel sales growth is much. Steel sales is 10% whereas tube sales is 5% of. We have progressed well in terms of green power. We have as you know we have commissioned about a year back 70 megawatt solar power plant. We have the full benefit coming from that. In addition to that we are already executing another 70 megawatt of solar power plant. In addition to that we are also pursuing 25 megawatts or 12 machines of 2.1 megawatt each for the wind power. So all this we expected to get commissioned in quarter two of next year and bringing additional 1 effectively 130 megawatts so that we can reach effectively close to 200 megawatt solar equivalent.
Demand forecasting continues to be very strong from all the sectors tractors, automotive, commercial vehicles as well as the earth moving equipment. We are working on improving the production and sales and we expect the volume to grow in casting across all the segments. With respect to tube business I would like to add one small point here that we will be taking up the deliveries of high volume customer tubes and some additional benefits should come in the quarter four. Also we expect the margin improvement benefit should come in quarter four. In the pigger and business we continue to be committed to all the projects which have been lined up and we are continuing with our journey to invest on key projects and there is no change in Our stance, we will take up all those projects as per the timeline in coming quarters.
With this brief introduction, I would request the start of Q and A and we’ll be happy to take up the questions. Thank you very much.
Questions and Answers:
operator
Thank you so much, sir. Ladies and gentlemen, we’ll begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touch telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. Thank you. Our first question comes from the line of Digant Harya from Greenwich Wealth Management. Please go ahead.
Digant Haria
Hi. Thank you for the opportunity, sir. Two questions. One is, see, pig iron prices were very low and you know that that led to lower margins that we understand. But, but you know, shouldn’t the casting division and the tubes division at least get some benefit? Because we sell lot of our pig iron to these two divisions also. So any color you can give your own, you know, at what price do we sell it to them and you know, like do they benefit when pigs iron prices are low and now pig iron prices are up? So will they face some margin pressure?
R. V. Gumaste
Yeah. Thank you very much. As you know, most of the casting customers we have entered into, you know, price variance mechanism. If the commodity prices go up, we get the increase in the casting prices community goes down. We have to pass on the benefit to customers so we won’t get directly too much benefit but we have to pass it on to customers. And as you see, even though there was a big deal drop in the both pigger and prices and steel scrap prices, our casting prices have not come down that much. Very marginal. Or rather we have maintained the casting prices.
That is because of the product mix. We’ve been able to develop high price castings, critical castings and we are started the delivery of those and hence we have managed the sales realization.
Digant Haria
Okay, okay, second question is. Yeah, the second question is on the castings division that see we are seeing the strongest trends possible in you know, tractors and CVs and you know, all our underlying industry. So where do you expect like you know, can we reach 50,000 tons next quarter or you know, is that number at least a year away if you can give just some color? Because you know, we were hoping that casting division would scale up even more this quarter. The Q3 itself. So just any, any thoughts here?
R. V. Gumaste
See, the addition to sales quantity comes from two increasing the productivity and getting higher volumes in the existing foundries. The provision of increasing the sales in copper foundry is very marginal. Maybe we can get another 5000 increase there per annum which is 400 tons per month. Whereas as you know Solarpur we have added the second foundry line. And we have to increase and improve the capacity utilization in Solarpur which has still enough capacity. We expect to produce and sell around 50,000 ton but it can go up to 70,000 ton. So I don’t think it will happen in one year.
But definitely it could should happen. We are working for that to reach those levels in two years. So I can expect about 802,000 tons per month increase in Solarpur in coming quarters. Another thing is by end of this year we are looking forward to merge the Punjab foundry into kfil. Oliver into kfil. And we are in the process to merge it. That foundry this year will produce and sell close to 15,000 tonnes. And that is not reflecting here. If I take that our growth in the casting business is 15 to 16%. Our growth in the tube and business is also 15%.
Our growth in the steel sales would be more than 15%. Where we are not achieving volumetric growth or only 2% so far is in the piggeren which I expect last quarter it will improve and it should also be having 4 to 5% decent growth in the volume and in terms of sales in crores. Depends on the price figure and price increase should help us. And figure and price increase should also help in improving casting and tube prices. Thank you.
Digant Haria
Thank you so much. Thank you.
operator
Thank you. Ladies and gentlemen. Anyone who wishes to ask a question may press star and one on their touchstone telephone. Our next question come from the line of Asha Patel from Molecube Venture pms. Please go ahead.
Aashav Patel
Thank you for the opportunity. A very good afternoon to the entire team. So sir, my primary question is we have somehow not able to deliver on our volume guidance especially in casting segments. Despite having additional expansion expanded capacity we are still stuck at 35,000 metric ton of rate and quarterly run rate. And whatever we have in the past guided that has not been able to achieve. So I am just. I just fail to understand when the industry is doing so well. The tractor industry has been doing good for last five quarters. Casting for last two quarters.
What exactly is the bottleneck which we are facing Instead of generalized reason. If you can give specifics that would be really appreciated why we are not able to scale. Because at the time of initiating the expansion what we communicated to the shareholders were that the orders are already in hand and the expansion should be very fast.
R. V. Gumaste
Thank you very much, Ashok. I think two things are very important. Is the capacity utilization in Solarpur to increase. It has improved but not to the satisfaction of us. It is related to new product development and ramp up of newly developed castings. I think we have now come up to about effectively about 1,200 tons from the new foundry. Whereas we have to go up to 3,000. So that is the gap. About 2,000 tons per month coming out of Solarpur. Our take on Solarpur going up is they will keep expanding about 10,000 tons per year. So currently this year they are at 4200 average.
We expect that they will go to next year 5200 and next to next year about 6200. More than that. When we are trying to ramp up, we are not in a position because it has a complex new product development and ramp up aspects. This is on the solar port addition to this we were about to also to, you know bring in Oliver or Punjab Foundry. We have. We are as I mentioned in the very first year of operation we will be having sales very close to 15,000 metric ton per annum. And second year FY26.
Aashav Patel
The ongoing year or for next year?
R. V. Gumaste
Ongoing year.
Aashav Patel
So far how much out of those. 15,000 expected sir?
R. V. Gumaste
Srivatsan, you have that number so far how much has happened production sales in Oliver? You have to unmute and speak.
R. S. Srivatsan
Maybe another two minutes. I’ll tell you sir.
R. V. Gumaste
Okay, we’ll give sir. But it is in line with going to 15,000 by the end of the year. Maybe it is very close to 11,000 ton.
Aashav Patel
And next quarter. Sir, how much do you expect this 35,000 run rate. Ongoing run rate to move to for the standalone entity.
R. V. Gumaste
No, as I told you we should expect casting. We are currently at including the Oliver we are at around 14,000. Fourteen and half thousand currently.
Aashav Patel
No, I did not understood this figure, sir. What is this?
R. V. Gumaste
See production and sales we have reached a run rate of 14,500 tons per month. Okay. The numbers you are saying is without Punjab Foundry. With Punjab Foundry it’s. And once we have the merged entity we can expect 45,000 per quarter.
Aashav Patel
Okay. Okay. And sir. Okay. And regarding the pig iron segment I understood. I understand that we are part and parcel of the broader commodity cycle. So the realizations have been under lot of pressure for last two years now. Spreads have been reducing. But given that we sell in spot most part of our quantity volumes and spot pig iron realization even for foundry grades are now at almost a yearly highs. So when do you expect the Benefit of realization to click in to be reflected in the numbers. Whether it would be Q4 itself or it would be a quarter after that.
R. V. Gumaste
No, it should reflect definitely in quarter four. Okay. See, we don’t have rate contracts long term. It is spot whatever is the price increase. See. Except I can say that typically 15 days or order bookings are for dispatch in next two weeks. Other than that we should get the benefit.
Aashav Patel
So based on reported numbers, you feel that quarter three was already the bottom for the piga. And given that the prices have now meaningfully upward, revised upward and hope we continue it continues that way.
R. V. Gumaste
Yeah, hope management, you told me. I’ve been talking about it has bottomed out for so many quarters and the bottom was not to be seen. Hopefully the upcycle coming in, I can say that bottom is over.
Aashav Patel
But with regards to coking coal prices, even that has been increasing. Right. So don’t you feel large part of spread increase due to realization would be eaten away by coking coal increase?
R. V. Gumaste
I only say that at least for short period we should enjoy that because I have coverage of coking coal for three, four months.
Aashav Patel
Okay, okay, okay. Got it.
R. V. Gumaste
At the earlier prices. Let us see what happens. See, you know it’s very important. These are not straightforward straight lines. One is I’ve covered for three, four months. Another is why did the coal prices go? They went. One of the reason everyone talked about was went up because of the flooding rains in Australia. I expect that by February it should be all over. Summer gets over and from March whether the coking coal prices will come down. I can always wait up to March to source my coal. So let us see how it goes. But right now I would say that we have some improvement in the pigeon prices and we are covered with the coking coal required up to maybe for the next four months from January.
Aashav Patel
Got it, sir. So last question my side. Why are we. Where do we. My question is to cfo Sir. So where do we see the River Foundry performance in our reported numbers? As you rightly mentioned, it is not yet consolidated. And that is why you are not reporting even the volume numbers on the ppt. But where do we see the improvement in our financials exactly from that?
R. V. Gumaste
No, sir, as of now it is 100 subsidiary. Okay. As of since it is not listed that numbers are not coming.
Aashav Patel
Financial financial numbers would be reflected, right?
R. V. Gumaste
If it is correct, it is in the consolidated. You can see.
R. S. Srivatsan
Yes, yeah, yeah.
Aashav Patel
That is my question. The consolidated numbers we can see the contribution of Oliver also, right?
R. V. Gumaste
Yes, yes, yes.
Aashav Patel
Okay. And sir, why was Our design plant shut down for like almost 40, 50 days. Because the no down was expected at least in FY26 and 27 after multiple round of shutdowns for last few years.
R. V. Gumaste
See we started with maintenance activity which was required but extended because of the bad market conditions. There’s no point in running the plant if there is negative contribution.
Aashav Patel
Fair enough. Absolutely agreed. And sir, in Loops division.
operator
Mr. Patel, I’m really sorry to interrupt you but you may please rejoin the K for me. Thank you. Thank you. Our next question comes from the line of Manish Goel from Think Wise Wealth Managers llp. Please go ahead.
Manish Goyal
Yeah, thank you so much. Sir, a couple of questions. Sir, just continuing on the casting volumes. What we see sequentially the volumes are down 4%. A bit curious to know like despite tractors and CV industry doing so well, why is it that our casting volumes are down? In fact if I look at your sales breakup of the castings, the revenue from CV has declined YoY as well as quarter on quarter. So that was the first question sir, if you can highlight on that. And second is on the Oliver volumes. How much were the Oliver volumes in the quarter three and in nine months.
That was the first set of questions.
R. V. Gumaste
Yeah, I think sequentially there could be some small issues relating to many aspects. Because it’s 35,255 metric ton versus quarter two of 36,650 tons. What we are looking at is against last year’s 2 lakh. Sorry 1 lakh 30 thousand we should be going up very substantially and which I say that it should be around 15 to 16% growth including the Punjab and subsequently then we look forward at least going to 1 lakh 85, 1 lakh 90,000 ton next year.
Manish Goyal
Okay. Okay sir. And maybe if you, Mr. Silverson, if you can give us the Oliver numbers for the quarter three, what was the volume and for nine months.
R. V. Gumaste
I’ll check and say that.
Manish Goyal
Okay, sure sir. And sir, what would be our production loss due to Baramati plant shutdown for the tubes? Because tubes volume are also down this quarter, quarter on basically sequentially. So what could be the impact because of that? Number one. And number two, the large order, what we are expecting in Q4 is it pertaining to the order which we had received from ONGC a couple of quarters back. So what could be the value of that order? Sir, these are the two questions.
R. V. Gumaste
First of all the large volume is ongc. I agree with you, you and we see, you know these are heavy tubes and we will get both volumetric as well as the business in terms of value also it comes into the growth. I won’t, I don’t have the relevant data to say exactly how much it comes but we have a good lineup for this quarter. Sales in island gas sector.
Manish Goyal
Sure. And. And on the export side, what kind of better realization we have in the tube? Sir? Because Exports is roughly 10% value in the tube so.
R. V. Gumaste
Oh my God. I don’t have exact. Okay margin difference but it’s a. It’s good business. And we are this year at least we have grown in that and in this is in spite of 50% duty.
Manish Goyal
And sir, on pig iron you mentioned that there has been 4 rupees increase in the north India and not equivalent increase in south and west market. So this we are talking for the foundry grades.
R. V. Gumaste
No, see this north it’s combination of foundry grade as well as basic grade. And I. I would say across all grades increases across all grades. And south as the prices were slightly higher than north. So increase is not 4000. Maybe it is around 3000 rupees per ton in the south and west maybe west will also come to 4,000 this increase.
Manish Goyal
Right sir. So sir, now with the rupee depreciation have we also seen the scrap prices going up which are probably supporting the price increase in pig iron. And how should we understand that in terms of sustainability of this? And will imports of piga and also decline because of this? Just want to understand that overall demand supply. How should we look at it which was probably a mismatch sometime back for last couple of years.
R. V. Gumaste
No, it’s a very long overdue. Many countries, including European countries were supposed to discourage export of scrap and they were supposed to encourage local consumption, reduce the emission. And its logical expectation is that import of steel scrap should become costly day by day. And India imports 10 million tons, close to 10 million tons of steel scraps. And India generates 30 million tons of steel scrap. We expect the both domestic as well as the imported steel scrap should go up. But if you look at last couple of years they have not gone up as much as we expect them to go up in spite of rupee depreciation.
So I’m still hopeful that the scrap prices will pick up and it should support together. And in India also there has been a movement which has taken good shape recently is that even the steel makers who want to produce steel with induction furnace, with arc furnace, they want to consume more and more steel scrap. Even large steel plants are taking the drive to consume more scrap, bring recycling and improve their commitment and performance to reducing the. You know the CO2 emission. So I expect coming quarters steel scrap should pick up and it has truly not reflected that is the matter of concern.
But we are still looking forward steel scrap prices to pick up. We should support bigger.
Manish Goyal
And sir, one clarification on the Solarpur new foundry. What is the current production? And you, you did mention I missed on that. And how should we look at it?
R. V. Gumaste
See I just mentioned that we can expect 4200 ton on an average sales per month for this current year. And we are trying to take this to average 5200 tons sales per month for the next financial year which will give us a 12,000 ton increase over the 50,000 ton which is more than 20% growth in volumes. I know it should have happened earlier but it has not happened that we are I think reasonably confident that we should go to 60,000 volume from Solarpur next year. Keeping couple around 1 lakh 5000, 1 lakh 8000 kind of thing.
And if Punjab foundry brings in another 24,000 ton you can make the total. I think we’ll go very close to 2 lakh ton, maybe around 190.
Manish Goyal
Nature. And sir, last question on our two part foundry. How is the progress? When can we expect to start?
R. V. Gumaste
July commissioning is still possible. I look forward to that.
Manish Goyal
Sir, I have few more questions. I’ll come back in the queue sir, thank you so much.
R. V. Gumaste
Sure. Thank you Manish.
operator
Thank you. Our next question comes from the line of Mahesh Bendre from LIC Mutual fund. Please go ahead.
Mahesh Bendre
Hi sir, thank you so much for the opportunity. My question is related to casting business Sir, India’s largest CV manufacturer on their.
operator
I’m sorry to interrupt you Mahesh but if you can just little bit loud please.
Mahesh Bendre
I’m audible now better.
R. V. Gumaste
Hello. Yeah, yeah, yeah go ahead Mahesh.
Mahesh Bendre
So sir, India’s largest CV manufacturer on the call said that given the strong demand uptrend they have seen in the CV market there are shortages in the some of the components including casting. So this is what we have heard from the largest manufacturer of CV in India. So apart from the volume growth do you see any change in the pricing in the upcoming quarters for us?
R. V. Gumaste
No. I think casting manufacturers should definitely get benefited with the demand increase. But unlike piger and casting pricing is long term fixation and also some linkage to the raw material linkage. So bit difficult but one should try and get some benefit on casting prices.
Mahesh Bendre
Because even if you don’t get it.
R. V. Gumaste
Doesn’T go like figure and we can’t increase prices. It’s A long term manage. We develop the parts for long term and any change in the pricing has to be negotiated and settled.
Mahesh Bendre
No, I mean foundry business operating leverage is very important. So if the volume picks up the margin should improve. I mean this has been the past.
R. V. Gumaste
I think it will benefit a little bit. Because capacity utilization improves then margin should improve. But contribution or gross margin is proportional. Directly proportional to the volume. So there will be definitely profit in capacity utilization and also any price correction. It is a little bit long term fight. We should try and achieve it.
Mahesh Bendre
Sure. Thank you so much sir.
R. V. Gumaste
Thank you.
operator
Thank you. Aniscation come from the line of Sahil Sanghvi from Monarch Net worth capital. Please go ahead.
Sahil Sanghvi
Thank you for the opportunity sir, just wanted to clarify the begin production capacity now. So you said that 47 kiloton each blast furnace at Copal and roughly 45 at Hiriyur.
R. V. Gumaste
So 140 to 155. No, no, no.
Sahil Sanghvi
Per quarter.
R. V. Gumaste
No, this 47,000 is per month. No, not quarter.
Sahil Sanghvi
So sir, what should be the annual capacity of the guy now?
R. V. Gumaste
Annual capacity. Let me come back to you. I think 7.2.
Sahil Sanghvi
7.2. Which could be operated optimally at what? 85, 90%.
R. V. Gumaste
See let me have to do some calculation for you quickly because.
Sahil Sanghvi
But sir, we will look for some volume growth next year right On Pagan. That’s. That’s the main question over here.
R. V. Gumaste
One minute. 7 lakh 20. Yeah, I think this is 7 lakh out of 720 is achievable realistically.
Sahil Sanghvi
Right sir. Right sir. Because sir this year we might close something near to 525 50. But do you expect that to.
R. V. Gumaste
No, no. You have to see two things. One is internal consumption and external sales. I think difference is coming because of that about 1 lakh ton we consume internally.
Sahil Sanghvi
Right sir. Right sir.
R. V. Gumaste
Maybe 90 to 90,000 to 1 lakh.
Sahil Sanghvi
Right. Forecasting and Jesury. Right.
R. V. Gumaste
So then we even have scope of growth.
Sahil Sanghvi
Yeah, we have some scope next year in figure. Yes, yes, yes.
R. V. Gumaste
Yeah, yeah. Definitely we have. We want to even upgrade a hiryur for Pigueran platforms. And we can expect something like 52 2173 into 12. We can upgrade it another 50 to 60. No, we can upgrade it to almost 9 lakh ton. Hot metal, not bigger and not sales. We can upgrade together to go to 9 lakh ton. And we plan to do it. We plan to do it. See margin, low margins, margin pressure discourage us to do something. You know. So some light should be there. So I think we have long term Commitment in terms of producing more hot metal converting some some part of it to steel so that pressure of gear and sales comes down and we make some reasonable margins both in figure and better in steel but 9 lakh hot metal is possible yes, we plan to.
Sahil Sanghvi
The Hiryur I mean project should we. Will we take it in next year? FY27.
R. V. Gumaste
We have so many projects which use so many benefits we have no choice but to prioritize whether it is steel project whether it is solar and wind project Whether it is casting capacity enhancement project so I think some prioritization will happen but upgrade could be next year or next to next year Everything is required to be done.
Sahil Sanghvi
Sir My second question is if you can help us with the status of the steel plants are at Copeland where are we? What is the progress over here?
R. V. Gumaste
Everything is ready we have to sign off and order the equipment so I think before end of this 31st March we will take that step so that two years we should commission steel plant.
Sahil Sanghvi
Right sir, Right and lastly sir would you be able to give a number to the EBITDA pattern we are doing right now in Piga And I mean are we even making thousand rupees on EBITDA or is it. Is it even low? I mean.
R. V. Gumaste
No, no I think we are doing very close to 9% EBITDA 1 second I don’t. Can you add. I think we are around 9 to 10% EBITDA.
Sahil Sanghvi
Before the pre price hikes I mean before the price hikes or is it.
R. V. Gumaste
I think. One minute. Give me a minute let’s go ahead with the next question before close we. I’ll give you the numbers.
Sahil Sanghvi
No sir that. That’s all. That’s all from my side yeah thank.
R. V. Gumaste
You thank you.
operator
Thank you Our next question come from the line of Amar Iher from red and capital Please go. Ahead.
Unidentified Participant
Hello, I’m audible sir
operator
yes you are Please proceed.
Unidentified Participant
In this quarter can you just repeat and clearly I missed. Yeah, just give me. Hello. Yeah can you help me with the. Utilizations you have done in this quarter?
R. V. Gumaste
Capacity utilization?
Unidentified Participant
Yeah, utilizations.
R. V. Gumaste
See pigeon is above hundred and casting remains only copper and Solarpur from the achievable level about 84. No. 68% is Solarpur 93% is copper and Ahmednagar 69% Baramati 49% Jejuri 68% these are the capacity utilization we have potential across many plants to increase output okay.
Unidentified Participant
Sir God got it so that’s it from myself thank you so much thank you.
R. V. Gumaste
Thank you very much thank you Our.
operator
Next question comes from the line of Bharat Seth from Quest Investment Advisors. Please quit.
Bharat Sheth
Hi sir. Thanks for the opportunity. Hello. Am I audible?
R. V. Gumaste
Yeah, yeah you are.
Bharat Sheth
I just want to get a sense that how much increase in we have seen in the deem exports this year over last previous year. Or was it some plate or decline because of that our volume some kind of. I mean softness we are seeing.
R. V. Gumaste
No, we are not seeing any softness. Our exports deemed exports to both the customers continues normal and they remain talk to customers and. No change in the demet export slight increase, not big increase. Okay.
Bharat Sheth
Okay. Second thing you said on the Solarpur the problem was. I mean a new development product because which is very complex and it is taking time. So how should we read what is that this product is for? Which kind of I mean ultimate you. Is it for earth moving or. We were also looking for a commence order. So if you can give little more color.
R. V. Gumaste
See what it should be read is if the new foundry is simple casting like housing in Oliver from zero we can go to full volume in two to three years. Yeah. In case of more complex cylinder head cylinder blocks that to auto block, auto heads etc. We should take it that it takes a ramp up would be 15 per year. So full capacity can be reached only in five years not in two or three years.
Bharat Sheth
That says understanding because of. I mean you said that which is checking. So I mean rejection rate in initial.
R. V. Gumaste
Time is little higher.
Bharat Sheth
So that is also affecting some extent our margin.
R. V. Gumaste
Getting into quality rejection issue has nothing to do with only commissioning. Sometimes we do get into some of the new product not performing as per expected thing. But you are true that when we start the foundry and we start capacity utilization in foundries lot of testing, development is involved and we are likely to face challenges and problem in the beginning.
Bharat Sheth
Okay.
R. V. Gumaste
But we have to manage everything and then progress. So we look forward that from 1 lakh 60. 60,000, 63,000 something like that. Those number including Punjab foundry we should go to very close to 1:90,000 next year. Of course performance with respect to productivity and the quality has to be kept intact to move forward.
Bharat Sheth
We were looking for a more than 2 lakh ton forest tube in 27. So looking at current demand and supply scenario. So are we on a trek or there could be some delay over there?
R. V. Gumaste
No, I think tube we are more or less. More or less on track if at all any off track is only in the steel because of the our manufacturing cost being high and our mindset not to sell at low prices. Why sell without contribution? But Tube I think we are progressing well including and we should be very close to 2 lakh ton this year and do maybe 10% more in the next year.
Bharat Sheth
Okay. Okay, great sir. And thank you.
R. V. Gumaste
We expect that current installed, whatever equipments are there, we should be able to go up to 2 lakh 30. And we are planning for an expander mill so that beyond 2 lakh 30 we get the benefit of the new mill and not existing. Thank you. Thank you.
Bharat Sheth
Thank you. Thank you.
operator
Thank you. Our next question comes from the line of Deepak from Sundaram Mutual fund. Please go ahead.
Unidentified Participant
Yeah, thank you for the opportunity. Am I audible, sir?
R. V. Gumaste
Yes, Deepak, go ahead.
Unidentified Participant
Yeah. Hi sir. My first question is on seamless queue. So this quarter we saw an dip of 20% QoQ. So is it completely attributable to delay in dispatches of that ONGC order or is there any other reasons also?
R. V. Gumaste
No, there is. I mentioned about the upgrading of one of the furnace. Heating furnace. But if you look at tube production, tube production, it is compared to last year third quarter, it’s down by about 7,000 tons. Less than 7,000. Around six and half thousand tons. But it’s not because of lack of orders. I think we have to do some maintenance or for the long term benefit. And we have to recover. We have one quarter, whatever best possible. We love to recover. And we are currently at the tube sales volume. We are at one second casting.
Yeah. Tube sales, we are at 1:37,000. And we have a big task and we look forward to cover it as much as possible in the last quarter. I think still we have an opportunity to get the growth. Yes.
Unidentified Participant
Okay. Let’s say if you completely exhaust your own GC order which you have won, let’s say in volume terms or how much can that contribute?
R. V. Gumaste
I think I cannot exhaust and finish in this quarter. It will go to next quarter also.
Unidentified Participant
Okay. So I’m asking for the complete order. Let’s say if you execute that whole order.
R. V. Gumaste
I don’t have. I don’t have that much detail in this call. Okay.
Unidentified Participant
And for one question on your cost reduction plans with respect to solar and wind. So as per your presentation, one solar power is about to get commissioned in Q4. Right. And then there is a one windmill phase one again Q4. But earlier in the call you highlighted that most of the commissioning will happen in Q2 of FY27. So just wanted some clarification that what kind of capacity is coming in which quarter for you to completely achieve that 130 megawatt incremental green power.
R. V. Gumaste
See, we have ordered a 25 megawatt of wind and we have ordered 70 megawatts of solar. And all these have some of the other challenges relating to relating to land. I would say that Yasmin date none of this has got commissioned and this commissioning process will start from beginning from April onwards. And my understanding today is that between April to September everything will get commissioned because we do not most especially most of the land requirement in solar is in position and windmills identification location all is in position. I expect everything should get commissioned on or before September.
As told earlier of you know, this year, the whole thing. 70 plus 25.
Unidentified Participant
Okay. 70 plus 25.
R. V. Gumaste
Yeah.
Unidentified Participant
Okay. And sir, one final question on castings. You know it has been asked by previous participants also and you also said that due to some new product development and complexity of those new products there have been slowness in the ramp up. But given that our existing customer also would have given you more volumes.
Sahil Sanghvi
Right?
Unidentified Participant
Since the industry is doing very well in terms of CV especially especially in terms of tractor. So let’s say even at the existing facility of Solarpur which was running at a low capacity utilization, we are still not able to ramp it up let’s say on the existing models or existing product rather than the new development of product. So would it be fair to assume there could be some market share loss to any other participants or player in the market means would it be possible in certain SKUs that we must have lost some market share?
R. V. Gumaste
I think, I don’t think loss of market share. You know, it’s basically I would say that we have been the single source in almost 80% of our customers casting what we develop. But we have opportunity to increase into new businesses, new orders. And that is the area where I would say that it is from Solapur second line where you know, we have been facing some challenges in not able to ramp up some results have come in and that’s why I have been able to give some more specific number that we should go to 52,000 in this year and look forward to no 50,000 this year and looking forward to 62,000 next year.
It’s not possible without resolving some issues. I think we will resolve that and move to higher volumes next year.
Unidentified Participant
Okay, so if I squeeze in one. More. Any ballpark number on the other side of the business apart from casting, like what kind of external sales volume are we looking at from tube steel and let the pig iron.
R. V. Gumaste
No, we are talking about one is increasing the steel sales next year. Hopefully we should I think it’s a long pending demand that we sell at least 1 lakh 20,000 ton of steel. And we talked about 2 lakh 20,000 ton of tube from maybe 190, 195 this year. And casting sales, I just mentioned about 1 lakh 90,000. And I think Pigueran should remain around very close to 6 lakh tons.
Unidentified Participant
Okay, so this 6 lakhs ton is external sales, right? When excluding internal.
R. V. Gumaste
No, no, not exactly 6 lakh. I have not done the calculation. Could be 58596 because we can produce 7 lakh ton. Out of that internal consumption is 1 lakh. 3% goes into skulls. So very close to 6 lakh ton. So we had all these numbers together. We are talking about a good growth. Not very high but reasonably good growth. If we can continue to grow 15 to 20% I think that will take us to the our stated goals of continuing the progress CAGR of 14, 15, 16%. And all these especially value numbers have to be seen with respect to product price drop which is 9% in figure and 10% in tubes.
These are the market forces which we continue to face. And in spite of that we have to succeed and progress and continue to strive for that. Thank you very much.
Unidentified Participant
Yeah, sure sir. Thanks a lot. All the best.
R. V. Gumaste
Thank you.
operator
Thank you. Ladies and gentlemen, as there are no further question from the participant I would like to hand the conference over to the management for the closing comments. Thank you. And over to you team.
R. V. Gumaste
Thank you. Thank you very much.
operator
Thank you sir. Ladies and gentlemen. Thank you. Ladies and gentlemen, on behalf of Antique Stockbroking Ltd. That concludes this conference. Thank you for joining us and you may now disconnect your lines.
R. V. Gumaste
Thank you.