Kross Ltd (NSE: KROSS) Q1 2026 Earnings Call dated Aug. 11, 2025
Corporate Participants:
Unidentified Speaker
Sudhir Rai — Chairman and the Managing Director
Sumeet Rai — Whole Time Director
Kunal Rai — Whole Time Director and Chief Financial Officer
Analysts:
Unidentified Participant
Mihir Vora — Analyst
Sanket Kelaskar — Analyst
Ankur Poddar — Analyst
Maitri Shah — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Cross Limited Q1 FY26 results conference call hosted by Equity Securities Private Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touch tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Mihir Vora from Aquarius Securities. Thank you. And over to you sir.
Mihir Vora — Analyst
Thank you. Good morning everyone. On behalf of Equivoc Securities I welcome you all to the Q1FY26 results conference call of Cross Limited. From the management side we have Mr. Sudhir Zai, Chairman and Managing Director Mr. Sumit Rai, Whole Time Director and Mr. Kunal Rai, Full Time Director and CFO. So without further ado, I now hand over the floor to Sudhir sir for opening remarks. Over to you sir.
Sudhir Rai — Chairman and the Managing Director
Yeah. Thanks. Thanks Nahid. Thank you. Good morning everyone. Thank you for joining us for this earning calls for Cross Limited first quarter ended June 2025. Along with me I have Mr. Sumit Rai, full time director and Mr. Kunal Rai, full time director and CFO as well as other senior members of our Investor Relation Advisory Strategic Growth Advisory. I’ll begin by walking you through our performance highlights and then share updates on our key strategic initiatives and growth plan. Now, despite the cyclical slowdown over the past 1617 months, we have managed to remain steady. While the overall environment was challenging, we maintained a healthy order book and our margins improved relatively to broader market conditions.
Our diversified product and models, business models has enabled us to effectively navigate the downturn. Although the trailer and CV segment underperformed compared to the previous year’s quarter, our strong growth in tractor and export segments helped us offset this decline, partially allowing us to maintain our margins. With the necessary infrastructure now in place, we are well positioned to capitalize on growth opportunities once the market stabilizes. We began the financial year with profit after tax growing approximately by 40% to 10.7 crores with the PAC margin improving 245 points to 7.7% from 5.2% to. In Q1 FY25 the revenue stood at 139.4 crores making an approximate 5% decline compared to FY25.
However, EBITDA stood at 16.2 crores and EBITDA margins improved by 27 basis points up from 13.3 to 13.6 reflecting our continuous focus on operational efficiency and measured cost control. Our key strategic initiatives and progress steadily. Although there has been a slight delay in compared to our earlier guidelines, the machinery for our new extrusion line has successfully been delivered. Commercial production is now expected to commence from Q3FY26. This advanced extrusion line, the first of its kind in India, is set to significantly enhance our manufacturing capabilities and it will expand our axle manufacturing capacity from 5,000 to 7,500 per month, reducing cost, improving product reliability, thereby strengthening our long term competitiveness.
Now let me update you on our seamless tube facility which is progressing well and remains an important milestone in our long term growth journey. This project is a strategic move to deepen our backward integration and cross will fulfill this infrastructure requirement of the country. Once operational, it will give us greater control over key input components helping us to drive cost efficiency and improve product quality across the board. I’d like to add one more point on the seamless tube. The usage of seamless tube. Of course the biggest usage of seamless tube is on transporting of oil and gas, but second to that is in auto components and CROs will be the first source to have backward integration in a seamless tube for auto components.
No auto component manufacturer has an in. House facility for seamless tubes. Construction of this facility is on track and expected to be completed by December 25. The machinery for this facility is scheduled to be dispatched by March 26th after which we will proceed with installation and commissioning. The other good news is of course VISA regulations for having Chinese coming into India has also been sorted out. We are now targeting production to begin in Q4 FY27 with meaningful revenue contribution. Expected to start thereafter.
On the operational front, we continue to strengthen our forging capabilities. In FY26 we doubled our forging capacities with the addition of a 2000 ton screw press and 1000 ton screw press, both already commissioned. Furthermore, we plan to install a 1,600 ton press plus a 2,000 ton press in H2FY26. All of this will enhance our production efficiency and capacity. Please note that all these are from the proceeds of the IPO in our export segment. Revenue contributions stood at 4% in Q1 FY26, keeping us on record to achieve a full year export target of 5% with our existing customers in Europe.
Earlier we were serving their requirements in Europe only, which has now been extended to their South American facility. The company has received schedules for the next six months to be executed. We have Also secured a new export order from a leading European Type 1 manufacturer. With the production schedule to commence in Q2 FY27, the product lines for this customer is very similar to our existing customer and the potential of generating about 40 crores revenue annually in the next two years. With the above, we aim to reach a double digit export contribution by the end of FY27. I would like to highlight that our export revenue exposure to the US is minimum and the recent tariffs have no impact on our business.
Now I’d like to hand over the call to Mr. Sumit Rai to update you on trailer business and the quarter ended for 30 June 2025.
Sumeet Rai — Whole Time Director
Thank you. In the trailer segment there’s an ongoing effort to expand our customer base and continue to strengthen our market outreach. In the last quarter we added over 10 new customers. Regarding the new developments on the trailer. Front, we are getting into the business. Of manufacturing tipping jacks and we are going to launch our tipping jack products by end of October 2025. With the starting of the extrusion line in Q3, we hope to expand our customer base of our trailer axles and suspensions. Right now our customer base is entirely domestic and with this extrusion line commencing we aim to kick start exports of certain trailer parts too. We have launched our car carrier axle in this quarter and also the car carrier suspension. This product will open up our sales to a new segment in the trailer space and we hope to get orders for this in Q3 of FY26.
Our extrusion line, as I said will be operational by end of Q2 of FY26. We are also launching our own landing leg or landing gear which will be manufactured in house. Right now this product is currently under testing with ARAI and beginning of next quarter we will have it ready to sell to our customers. In the agriculture segment, we have expanded our offerings to a new domestic OEM with production expected to begin by Q4 of FY26. With a sharpened focus on this segment, we aim to increase our exposure to 15% of total revenue from currently 11% over the next two years. Looking ahead, backed by a healthy order pipeline, we remain confident in our ability to deliver sustained and consistent growth. Our strategic focus continues to be on product innovation and geographical expansion initiatives aimed at creating long term value for our stakeholders.
With this, I would like to hand over the call to Mr. Kunal Rai to update you all on the financial performance for the quarter ended 30 June 2025.
Kunal Rai — Whole Time Director and Chief Financial Officer
Hi, good morning everyone. I would like to take you briefly through the key financial performance for Q1 of FY26. On the revenue front, our revenue stood for the quarter at 139.4 crores reflecting a decline of 4.8% on a year on year basis. The revenue softness primarily was due to the weak demand and lower sales in the CV segment. However, the shortfall was partially offset by the strong growth in the agriculture and the export segment. Our diversified business model provided resilience against the downturn. Performance remained broadly in line with our expectations. In terms of bottom line, EBITDA for The quarter stood at 16 and EBITA margins were up to 11.6% from 11.3% in the same quarter last year.
PAC stood at 10.7 crores as compared to 7.7 crores in Q1 F1.25. Reflecting a year on year trend of approximately 40%. The PAC margins to that 7.7% up from 5.2% in the same quarter last year. In terms of our sales mix, revenue from our trailer axles and suspensions stood at 40% and the other component business stood at 60% for this quarter. To summarize, while the quarter witnessed some softness in the top line, improvement in profitability margins underscore strength of our operations. We continue to make steady progress on our long term strategic roadmap with a clear focus on execution and resilience.
We obviously are always committed to deepening our backward integration, expanding our capacity, especially on the forging front and diversifying our product portfolio. Also, to let you know, in terms of our IPO. Proceed. We’ve now utilized 80% of these proceeds and the balance 20% will be utilized in this financial year itself. These investments are obviously crucial enablers for the next phase of our growth. With strong fundamentals and a healthy order book, a sharp focus on margin protection, we are well positioned to navigate these short term headwinds and deliver sustainability long term value for all our stakeholders.
We thank you again for your continued support and joining this call and we can now open the floor for further questions and answers.
Questions and Answers:
operator
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press STAR and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press STAR and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Mehi Vora from Aquarius Securities. Please go ahead.
Mihir Vora
Yeah, thank You. So sir, basically my question is on. The current CV situation. How are you seeing it panning out in Q2 and what do you expect from the CV industry in the full year? Like will it be the continued to be subdued as it was in last year or how will it go ahead? So some color on the change we see.
Kunal Rai
You. You want me to take this?
Sudhir Rai
Yeah, I’ll take it. Kunal.
Kunal Rai
Yeah, okay.
Sudhir Rai
Yeah, I’ll take this question. You see, what has been indicated by leading OEMs and Taiwan manufacturers is that H2 will be far better than H1. Now what happened in H1 was a regulatory mandate which the government had given for the AC cabin. Okay. So this was supposed to be with effect from 8th of June. And the OEM what they did was in the month of April and May they produced very good quantity not just in. In order for them to make stocks of non AC cabins so that they can have a easy migration into AC cabins in the month of June and July. But this work and the government did not allow them to sell those vehicles this thing and after they have had. Relaxed on this. But this was one oil sport which took place. As far as other indicators which they have given us, the government spending on infrastructure has improved a lot. And so H2 is going to be much, much better than H1. And this is what the OEMs do during the window conferences and other. This thing has given us to understand.
Mihir Vora
Secondly, on the trailer market also we see that the wholesale this time were down around 5% on a year, on year basis despite the last year being on a low base. So are we seeing some feedback on that? What is the real issue in terms of why the trailer sales have been moderated for last 5, 6 quarters as such?
Sudhir Rai
Well, you see, one is 5, 6 quarters. No, the Q4 of last year was okay, Q4, we had recovered this thing. Now what happens is if the CV sector is weak, obviously the trailer segments, they are not going to carry two trailers per vehicle. So if the trucks come down, the this industry also is affected. And as far as the monsoon season is concerned is the worst time for the trailer. Okay? They do not want to build trailers during the monsoon season. So these were the two. One of the two major one is. The slowdown in the output of prime movers. And the second one is on the monsoons and this one, this time the monsoon has been relatively good.
Mihir Vora
Okay, so I’ll call back.
Sudhir Rai
See the migration of. The migration of heavy vehicles towards prime movers. There is no shift in that. Okay? There is no Shift in the migration taking place between CV into prime movers. That is intact and that’s most important.
Mihir Vora
Okay.
operator
Thank you. A reminder to all participants. You may press star and one to ask a question. The next question is from the line of Ashish Raut from DC Securities. Please go ahead.
Unidentified Participant
Hello.
operator
Yes sir.
Unidentified Participant
Yeah. So I have two questions.
operator
There is a little disturbance in your line. Can you please check?
Unidentified Participant
Hello.
operator
There is a disturbance.
Sudhir Rai
Your voice is cracking a lot.
operator
Okay. Hello. Hello.
operator
Sir, I request you to rejoin the queue. Your voice is cracking. Can you please check. A reminder to all participants. You may press star and run to ask a question. The next question is from the line of Sanket Kalesekar from Ashika Stockbroking limited. Please go ahead.
Sanket Kelaskar
Thank you for the opportunity, sir. So my first question is on a trailer segment. So that has declined significantly somewhere by 13%. So can you quantify like how has been the industry growth for the trailer segment in Q1 and what is your current market share in this one?
Kunal Rai
Yeah, I’ll take that question. Sunit can also probably add in terms of what the exact projections are. But if you look into the entire trailer industry Sanket, the volume drop that we see quarter of last year versus first quarter of this year that’s been approximately 7 to 8%. That has been the drop year on year. And if you look into the entire drop which we saw in the last year that is FY20 versus FY24 it was at approximately 5 to 6%. However we last year, you know we were able to maintain our sales intact. We did close to 270 crores revenue.
The same as we had done the previous year. In this year. If you look into our degrowth in terms of our axles, the trailer business versus Q1 of last year it’s at approximately 5 to 6%. We had done approximately 65 crores in Q1 of the previous year and this year we’ve done approximately 56 crores. So the first two quarters have always seen a slight. It’s quite muted. But we’ve seen the trend over the last two years. Is that from when the CV volumes also do pick up Q3 and Q4 perform better.
Sanket Kelaskar
Okay sir, that means we have underperformed with respect to industry. So we might have lost some market share to yacht.
Kunal Rai
We have not, you know, really underperformed as compared to the industry. Again as I mentioned, the drop in in volume of trailers in Q1FY25 versus Q1 of FY26 has almost been at 7 to 8%. Whereas our drop in sales has been approximately 5 to 6%. So we don’t see any market share that we have lost. We have in fact only added on more, you know, state we are doing it in Chhattisgarh in Rajasthan. We’ve expanded our reach to Maharashtra. So we don’t see any market share that we have lost in these last quarters.
Sanket Kelaskar
Okay sir, so my second question is on gross profit margin. So in this quarter one, despite all the uncertainties, our gross profit margins have risen to a really very high extent. So I wanted to understand what are the reasons and also if you can share what how is the fleet cost in Q1 and with respect to last. Year as well, how is the freight. Cost with respect to revenue? Freight cost as a percentage of revenue? Yes.
Kunal Rai
So the freight cost, our freight costs are approximately 3%, 3.5% of our revenue. And that has been the same as what we have had over all the quarters. Okay. Not to forget our largest customer is being located in Jamshedpur is approximately 15, 16% of our revenue and our entire sales of 85% is outside. So freight costs in that way are controlled. It’s not increased from the previous quarters. And as far as on the gross profit margins has slightly gotten better over the last quarters we’ve been able to, you know, control our. We’ve had a lot of cost reduction activities which have been going on. Steel prices also in the last year have slightly softened. We’ve seen one decrease of steel prices of approximately two, two and a half thousand rupees per ton as well, coming down per kg. So we would be able to maintain this gross profit for the coming quarters as well.
Sanket Kelaskar
Okay sir, so my third question is on our. As we have introduced our agricultural equipment as well in this quarter. So I want to understand like what. Are the major components that we produce under this agri segment as well as I want to understand whether the capacity is fungible between the agri and the trailer segment.
Kunal Rai
Just to correct you on that, we have always been in the agri business. We’ve been in the agribusiness since 2001. 2002 in fact. Okay, so it’s just that what we have done now we have added on a new domestic OEM is what we had mentioned during our transcript. And we supply to them a variety of codes and machine parts as well as casting parts. And for any customer, whether be it agri or cv, we’ve got a dedicated machining facility for them. Okay. So capacities are something we have in place. The tractor Industry is also quite a cyclical industry. We see very good volumes in the first eight to nine months and during the year end it does soften out. But we’ve got capacities that quite dedicated for all these customers.
Sudhir Rai
The capacity for the tractor segment and. The capacities for the commercial vehicle OEMs. Are, I mean that can be used. Interchangeably. Sort of interchangeably. But the capacities for the trailer segment are completely different because the product range is entirely different.
Sanket Kelaskar
Okay, so understood. So lastly, I want to ask on working capital cycle. Working capital cycle have risen in FY25 somewhere around 86 days. So what, what is the timeline? Do we look to bring it down to a normalized level? And what has been the major issue going on with the working capital cycle? Because our cash flow from operation has also been turning to negative in FY25.
Kunal Rai
In terms of our working capital cycle. We do see it getting better from quarter three and quarter three, hopefully. And yes, for sure, quarter four, we should be able to be at where we were in the last year. We see that due to the cyclical industry, the trailer segment especially has been quite slow. Okay. And we see that the receivable days in this business now is almost contributing close to 40,000 of our revenue. So the receivable days have gone up in this business of ours. But we don’t have any kind of a bad debt or anything with any of our customers. We continue to serve them and we see that recovery. Once the business and the overall outlook starts looking better, our working capital cycle will also obviously start getting better.
Sudhir Rai
I think you’ll see a Definite improvement in Q3.
Sanket Kelaskar
Sir. That’s great. Thank you, sir. Wishing you the best.
operator
Thank you. A reminder to all participants, you may press star and one to ask a question. The next question is from the line of Ajay Khalif, who is a retail investor. Please go ahead.
Unidentified Participant
Yeah. Sir, you said your second half will be better than the first half can quantify. How are you looking at Q2, FY26, second up and way forward in terms of business growth?
Kunal Rai
In terms of. In terms of our top line, obviously, you know, it’s not that the PV industry or the tractor industry gives us a lot of guidance. What we’ve been trying to do is obviously de risk our businesses as much as we can. We have one or two good growth factors which are coming in and one. Of them are exports. As compared to doing 1% export in FY24 last year we did 3 and a half. We’re now trying to grow to 5, 6% and by the end of next year grow to approximately 8 to 10% on our export contribution. Plus the new business in the trailer segment of tipping jacks, which is coming in H2 also for us. So quarter one and quarter two are muted in terms of our volumes from the CV business. Tractors are still doing well and with all our capacities now set in place, if everything goes well, we’re looking at at least a 10 to 12% increase in the top line for this year.
Unidentified Participant
And the margin will be proportional.
Kunal Rai
The margins will be proportional. Margins would be getting better as compared to our Q1 margins. If you look into our margins in the March quarter, EBITDA margins were approximately at 14, 14 and a half percent. Pat margins were around at 9%. So we’re looking at similar margins for this year as well.
Unidentified Participant
My second question. Thanks. My second question is you ruled out the Paris concern already on the cost, but do you see any other headwind in the business?
Sudhir Rai
You, you want to take that?
Unidentified Participant
Yeah. You have ruled out the concern with respect to Terry seems very limited or. No. Is what my understanding. But do you see any headwind in the business way forward
Kunal Rai
headwinds in the business? Europe. Is not doing too well right now. But in spite of that, because our Exports are just 5%, we have so much growth opportunities, you know, when we reach a figure of 15, 20% at that time we can see that there will be, you know, a slowdown. But right now it is just a path of growth. As far as even the U.S. it’s not that it will remain like this. Everyone knows their political situations and all that. It is a time right now which is being used better deal. And this is, of course the dust is going to settle down on the U.S. business. Our U.S. business is, you could say, 5% of our total exports. So we are not affected on the US front and on the European front. I like what we just mentioned to you. Our European partners have another business with them in Latin America and that’s been cleared for us. So we have got the first schedule line for the next six months of dispatches, which is approximately seven crores of rupees. So this will increase many folds.
Unidentified Participant
Yeah, I did that. My, my question was not just from a point of view of export because I understand the export percentage is limited, so the opportunities are big. It is more to do with the. Overall, you know, headwind of the business. Respective of your export business headwinds.
Sudhir Rai
Now during the slowdown there are headwinds, okay? We all manufacturers try to work out a better deal with the OEMs. Or anything. But it is not something. Once demand picks up, headwinds comes down. The question has to be that the demand for MNHCV segment has to rise. And that is something which will happen. You see, if you look into what tonnage capacity of the vehicles are, that has gone up by 20%. Okay. This is what the OEMs are saying is the increase in the tonnage capacity already. So if there was no demand, how did this 20% take place? Right now, with the same number of vehicles that they produce, they are carrying 20% extra load.
So it will take a little time. This, this time, the recession, not recession. We could say the slowdown is going to be maybe a little muted and overloading is still taking place. They have not put a cap on that. Also these are factors which, you know, affect our business. Scrappage policy has not taken off. These are the true headwinds. You can say that, you know, reforms unfortunately are not taking place. They are on paper only as yet. But it will happen. Surely it will happen.
Unidentified Participant
Okay, great. Thank you so much.
operator
Yeah, thank you. The next question is from the line of Ankur Podar from Swan Investments. Please go ahead.
Ankur Poddar
Hi, thank you for the opportunity. My first question is regarding your tag access. Is there an update if you have submitted samples for this to the series and like or will there be any SOP in FY26?
Sudhir Rai
Yeah, you see, the sample can be submitted that we just told you that the equipment has come in. And by end of Q2, that is. By September, October, we will have our. First sample being produced. Of course, an LOI has been given by leading OEMs. But validation, all these things will take place. The OEM business will come in a little later. But nevertheless this and for our own trailer application, it will have the.
Ankur Poddar
All right, understood. And my second question is regarding the testing Jack. So they will be launched in H2 of FY26. Right. So what is the contribution to the top line which we can expect for FY26 and then also for FY27?
Sudhir Rai
FY20. Okay. So. We are hopeful to launch our products in the month of October. And we expect on the top line 10 to 12 courses added to our revenue as this. This new product should be bringing 10 to 12 crores of added revenue for. H2. But. With what we know about the market this in. In FY27. FY27, we should be able to do a turnover of upwards of 80cr on this product line. So that’s what our projections are for the tipping jacket.
Ankur Poddar
Understood? Understood. All Right. So my last question is regarding the overall guidance. So since majority of like for your. New equipment, but from the extrusion plan, the tag access and shipping, that’s the. Peak revenue would come in in FY27 or FY28. And if you could also give the. Guidance for FY27 revenue overall.
Kunal Rai
In terms. Of our guidance for revenues for so long, it’s basically, you know, what we are planning now. FY26, FY27 is all going to be revenue in terms of our components and our new businesses. FY28 would see revenues coming in from hopefully the seamless tube project as well. Okay. So it’s obviously very important to see as to how the industry is performing, but with our exports, as I mentioned, what we plan to do for this year, what we plan to do for next year. Now the tipping jack business also has mentioned to you about it in the trailer segment also extrusion line which is going to commence. So with things better this year, at least in H2 for this year, we’re looking at a 10% or 12% increase in terms of our top line with all these new projects coming up and next year obviously we’ll have to see more as to how the industry is performing.
Ankur Poddar
All right. Okay, thank you. That’s all from this.
operator
Thank you. The next question is from the line of Ashish Raut from DC Security. Please go ahead.
Unidentified Participant
Hello. I’m audible.
operator
Yes, but your voice is still tracking, sir.
Unidentified Participant
Hello? Is it better now?
operator
No.
Kunal Rai
Probably you can ask your question and there’s a lot of disturbance, but you can ask your question and if we are able to get it, we’ll surely.
operator
Answer it question and then mute your lines when you’re not talking.
Unidentified Participant
Okay. Okay, so my first question is on trailer Excel contribution has now come down sequentially and what is, what is the mix you see this year between business?
Kunal Rai
Okay, it’s not come down considerably. We have been at around 40 to 45% in terms of our trailer axle revenue contribution, trailer business contribution to our revenue. We always see that in the first two quarters it is at approximately this same percentage, which will grow to approximately 45% for the year ending. We don’t see any substantial change in this percentage. You know, even with all the facilities that we are adding in the trailer business line for axles and suspensions, especially the extrusion. Our other component business, especially our exports and agri is also growing. So we don’t forecast any major shift in terms of this percentage.
Unidentified Participant
Okay. And my second question is on excluded exchanges it has been capacity will increase from 5,000 to 7,500 units per month. So when do you expect it to ramp up to utilization?
Kunal Rai
With this extrusion facility coming in, it will increase from 5 to 7,500 per month. We obviously have to wait for the industry to get better. In Q4 of last year we were doing approximately 4000 axles per month. In this year it has softened in Q1 because of lower demand. And also in the in this business there is going to be a contribution from the tag axle business also which will come in from the next year. So if things get better in Q3 and Q4, at least we have all the capacities available to make those money.
Unidentified Participant
Okay, thanks. Thanks for the answer, sir.
operator
Thank you. The next question is from the line of Maitri from the Fire Capital. Please go ahead. Hello. Please continue. Yeah.
Maitri Shah
Firstly on the 5,000 to 7,500, the capacity increase, what sort of capacity utilization are we expecting for the whole year?
Kunal Rai
I couldn’t understand the question.
Maitri Shah
For the axle beam the capacity increased from 5,000 to 7,500. What sort of capacity utilization are we expecting for the entire year?
Kunal Rai
We are looking at a utilization of approximately 60, 65%, not more than that.
Maitri Shah
And my second question was the seamless tube facility, what sort of peak revenue can we expect from that facility?
Kunal Rai
You want to take that sameet?
Sumeet Rai
See, the purpose of setting up this. Seamless tube is to be back. Not want to be another seamless tube manufacturer in the country. That was not the whole purpose. The purpose is to be utilizing, taking the seamless tube and value adding on it. So about 25 to 30% of the requirements will go for our own in house consumption. Okay, that is the trailer axis. So our instead of importing these seamless tubes, we will be making it ourselves. That is one part. The other part is the opportunities we will have in producing components for from seamless tubes. Okay.
There are a large number of components which are being made right now. But now we will have our own seamless tube plant. Like certain sleeves which we have got inquiries from our existing customers. We will be open to those also during once we have our own seamless tube, then the tipping jacks also require seamless tubes. The tipping jack cylinder is a seamless tube of various sizes. There again we will have our in house consumption.
So these are some of the major reasons we expect that our in house requirement in the next two years will. Grow to about 45 to 55%. And the rest of it we will look into revenues coming in from the oil and gas transportation system, how much that will contribute is an area. I mean if you look into the math part of it, we are talking of 50,000, 120,000 tons is. So 60,000 tons is the capacity which we will have for sale of tubes to the for the oil and gas transportation. If you multiply that by about, I think we are talking about 600 crores in the next two, three years coming in. That is using 50% for our own in house consumption and using 50% for our sale of the tubes.
Maitri Shah
Okay, just one clarification. So the 50% will contribute 600 crores and the rest 50% will be used for backward integration. What sort of margin improvement do we see from the backward integration happening?
Sumeet Rai
You see everything is not based on margins today. If you have to buy large size seamless tubes you have to rely on imports. Okay? The government doesn’t favor imports. We should not be reliant on imports when more than 55% of our sales is using tubes. Okay? So even if it costs the same, I don’t think it should be a risk that is to be taken. And it is better to be self reliant than to work on imports. So everything is not just done on margins, it is done on sustainability also.
Maitri Shah
Yeah, that makes sense. And the last clarification I just wanted for the guidance of FY26. We’re looking at an overall growth of 10 to 12% for the whole year or just for the second half?
Sumeet Rai
No, no, it is of course everything is done on a yearly basis. So 10 to 12, let’s say hopefully. For 15 UN. We’Ll have new product lines also. That is the tipping jacks is going to contribute. Sumit just mentioned about 8 to 10 crores for this H2 time and H2 is going to be at least 25% better. We are hopeful that between 10, 12 and 15% we should do better than last financial year.
Maitri Shah
And we’re looking at the margin trajectory to reach 14, 14 and a half percent by the end of the year. Is that correct?
Sudhir Rai
Margins? EBITDA margins?
Maitri Shah
yeah, EBITDA margins, yeah.
Sudhir Rai
So we were at 13.5. It will climb to 14 in that same bracket. 13.5 to 14%.
operator
Thank you. Thank you. As there are no further questions from the participants, I now hand the conference over to the management for the closing comments.
Kunal Rai
Yes, we thank everybody to join in for this call. We appreciate your participation in our earnings call today and we trust that we’ve addressed the queries of the investors. And obviously should you have any further questions, please Feel free to reach out to strategic growth advisors who are our investor relation advisors. Thank you.
operator
On behalf of Equerio Securities Private Limited. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.