Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Menon Bearings Ltd (NSE: MENONBE) Q4 2026 Earnings Call dated May. 19, 2026
Corporate Participants:
Arun Aradhye — Managing Director
Aditya Menon — Promoter Group
Analysts:
Vinay Pandit — Analyst
Himanshu Upadhyay — Analyst
Unidentified Participant
Raghav Maheshwari — Analyst
Presentation:
Vinay Pandit — Analyst
Ladies and gentlemen. On behalf of Captify Consulting Investor relations team I welcome you all to the Q4 and FY26 post earnings conference call of Men and Bearings Limited. Today on the call from the management team we have with us Mr. Arun Aradhya. Managing Director, Mr. Aditya Menon part of the promoter group. And Mr. Anshul Menon again part of the Promoter Group. As a disclaimer, I would like to inform all of you that this call may contain forward looking statements which may involve risk and uncertainties.
Also a reminder that this call is being recorded. I would now request the management to brief us about the business and performance highlights for the period ended March 2026. The growth plan and vision for the coming year. Post which we will open the floor for Q A. Over to the management team.
Arun Aradhye — Managing Director
Hello everybody. Good afternoon. Thank you for joining us to discuss Men and Bearing Limited audited financial results for the quarter and Full year ended 31st March 2026. This has been a landmark year for the company. We have achieved significant growth across all key financial metrics reflecting our strong position in auto component segment. So, total income growth. Our consolidated total income for 2526 reached 300 plus crores or over 23.16 increase over the previous year. So far as profitability is concerned, our path for the full year stands at rupees 38.25 crores representing a growth of 53.41%.
Which is really phenomenal so far as quarterly performance is concerned. The fourth quarter was particularly too strong on a consolidated basis. Our PAT for Quarter 42526 was up by a remarkable 108.55% over last year. The that is year on year. So earning per share has also gone up from 4.45 to rupees 6.83 per share. Now coming to operational ex excellence and strategic updates. So we have. The performance overall was driven by increased operational efficiencies and a focused approach to market expansions.
We continue to operate within our primary segment of auto components where we are seeing sustained demand now as a legal compliance. So the new labor code has been introduced by the government and the regulations have been issued in the month of April 25th. However, we have taken proactive measures to see that the impact of the same is already taken care of and has been accounted for in the previous year. So there is no further liability in this regard will be arising. For the past years that care has been already taken so far as gratuity and basic and bonus and all components are concerned.
That has been already taken care of. So asset management is concerned. You see our total assess stands at 257 crores. So the asset turn is almost 1.5. So far as bearing is concerned, asset turn is 2. Alcove it is 1.5 and bricks it is almost 1, which is likely to be. Are we targeting about 2 in the next year? Including this year, Looking ahead at 26, 27, we are extremely optimistic. Our new development parts pipeline is robust with 51 new parts across major customers like John Deere for India domestic and exports as well.
Eaton, Taco, Prestolite and Mayakawa representing a business value of almost 30 lakh 30 crores of rupees within this year and next year. Most of the items are under development. Some of them have been already approved by the customer. Some are in the commercial discussions with this. Apart from this, in bimetal division also we are having a robust pipeline of more than 50 crores of rupees and that for the bricks it is almost 10 crores of rupees for the next two years. With this, we hope that there will be a question in your mind that whether we can sustain the performance that we have given in the last quarter.
I am 100 sure with the business in pipeline and so many actions that we have taken in the past so far as material consumption in raw material prices are going up, we were successful in passing on that burden of raw material to the customers. To the larger extent, maybe one or two customers are left and that will be completed during this quarter also. And again we’ll be sustaining this because of increase in the overall turnover which we are targeting at a rate of 25% year on year for next two years.
And you can calculate as to which volumes we can reach by 2028. To be optimistic, we have in our mind estimate, which depends upon the overall geopolitical situation. All these things we should consider that. But we are very optimistic to see that and we will Take all out efforts to see how we can reach 500 crores by 28. So there are several other customers. And in conclusion, Menon Bearing is entering in the new financial year with strong momentum and healthy order book and a solid financial foundation.
I again assure you that considering the present situation going forward, we will be able to maintain ebitda more than 20% and it should be about between 20 to 22% during next two years. We remain committed to delivering sustainable value to our shareholders. Now we will now open the floor for questions. Thank you very much.
Himanshu Upadhyay — Analyst
Thank you sir. We’ll now begin the question and answer session. All those who wish to ask a question, please use the option of raised hand and we will invite you to ask a question. You can also put your question in the chat box or in Q A box. We’ll take the first question from Augusta. Dave, please go ahead.
Questions and Answers:
Unidentified Participant
Audible
Himanshu Upadhyay
Yes.
Unidentified Participant
Thank you very much sir. Sir, congratulations on amazing performance, sir. Very very well done, sir. And also I would like to thank you for starting the con calls and appointing an IR agency, sir, putting up the presentations. It’s very, very useful sir. I really appreciate it. I’ve been tracking your company for more than 10 years and I was a shareholder long long time back. And again I’m a shareholder again. So even in that time you guys did very well, sir. Even now you’re doing very well. So congratulations sir.
So one request in the quarterly numbers which have come out, they don’t quite tally with the format. In the annual report there are slight changes reclassifications especially in the employee expenses and the other expenses. It’s difficult to tally if the two formats are very different. So I would request sir, for 2026 annual report and the subsequent quarters, if you can stick with one particular format which is consistent across annual reports and also in the quarterly results so that we can tally individual line items.
That would be of great help, sir.
Arun Aradhye
Sir, I know what is your observation that I also object and we have given a particular note in the presentation that has been submitted to submitted on website as well as to uploaded on the BAC NAC the assets. Also we are given a precise note as to why there is a change. Last year the tooling cost so far as tooling manufacturing is concerned was shown under operating expenses. Now it has been shown under actually raw material consumption. And that’s why there is a difference. And that note has been already given.
So we will see that apart from that
Unidentified Participant
There is one on employees also.
Arun Aradhye
So this is that goes on varying so that we will be giving details in the agm.
Unidentified Participant
Okay, perfect, perfect. It’s a small thing, sir. I just wanted to make sure that I put that point across. So given the new segments that you’re working on and what has been written in the presentation about the new components that you’re developing and the trials which are happening after that. Sir, how do you see the margin profile of the company changing? So one is the operating leverage which will come in because you are growing volumes. Second is the mix change that you are undergoing. So how do you see the margin, the gross margins and the EBITDA margins changing?
Sir,
Arun Aradhye
You see, so far as new developments are concerned, more than 50% of the new business in pipeline is exports.
Unidentified Participant
Okay.
Arun Aradhye
That is for exports where margins are always better than aftermarket or OEM. So considering that we are 100% sure that we will, we will not be only able to sustain the margins, but the margins will further improve.
Unidentified Participant
So this will be like 50 basis points every year or will there be a bigger jump because the other divisions will now start contributing quite meaningfully. Right?
Arun Aradhye
You see it depends upon exactly how the, at what, what time the business starts. So those are concerned because you see we have already explained in so many meetings that once we received an inquiry, the total time for testing, validation, preparation of sample submission and actual production, it takes lot of time. That is between six months to one year.
Unidentified Participant
So depending
Arun Aradhye
Upon when the actually the business of export starts, the it is productionized depending upon that 15 basis point or even more than that we can definitely and I’m sure that it goes above 15 in the next year.
Unidentified Participant
Great sir. So what is the plan capex for the coming year?
Arun Aradhye
Plan Capex for main and bearing it is A bearing division, it is b metal division. 25 crores for next two years. And for alcohol it is 7 crores. And breaks it is 3 crores.
Unidentified Participant
So 25 crores each for two years. For
Arun Aradhye
Two years combined
Aditya Menon
Combined together two years.
Unidentified Participant
So 12 and a half. 12 and a half and then 7
Arun Aradhye
And then maybe 20. I have plus 5. But it taken together it did 25 for two years.
Unidentified Participant
Answer for the brake division
Arun Aradhye
Break division it is 3 crores.
Unidentified Participant
Okay, perfect. One final question, sir. The one thing which is sticking out is the high interest expenses. Is there a particular reason for that? Sir? Is there a way to control that? Any, any commentary on, on that part would be of great help.
Arun Aradhye
You see, since we have started the business and our exports have gone up, particularly in USA, the total turnaround time of debtors is more than 180 days. And the exports have increased substantially.
Unidentified Participant
Right.
Arun Aradhye
So increase in export is more than 3 crores. And if the turnover time of 180 days is there. So obviously the data you can see from the balance sheet, yeah. Debtors
Unidentified Participant
Have also
Arun Aradhye
Gone up and it is obvious. But at the same time what we have done since the interest subvention on exports is available by the government, they have made it available on our request. Particularly on our company’s request. Hon. Prime Minister has considered that our Ministry of Commerce have considered and they are now offering 2.75% sub pension on export subsidies. Okay. So we are going with PCFC limits and we already talked. We have taken 6 crores of loan from the bank so far as PCFC is concerned which is available at the rate of 4% now.
4.70%.
Unidentified Participant
Right.
Arun Aradhye
So over a period of time when the total limits we are availing from the bankers is to the tune of 25 crores so far as PCFC limits are concerned. So that the total cost at the rate of 4.72% instead of 8,8% blocking will be higher because of data. So we can bring down that total working capital limit. And at the same time we’ll be saving about 4% on working capital limit. So that interest part of it will come down and whatever cap is that we are going to do that most of the same, most of it will be financed with internal accuracy.
Unidentified Participant
Great sir. So I have other questions as well. But I’ll go back in the queue and come back again. Thank you very much sir.
Arun Aradhye
Thank you.
Himanshu Upadhyay
All those who wish to ask the question please use the option of raise hand. We’ll take the next question from Garvit Goel. Please go ahead.
Unidentified Participant
Am I audible?
Himanshu Upadhyay
Yes.
Unidentified Participant
Hi. Thanks for the opportunity. I’m a bit new to the company so just trying to understand what kind of new products are we currently working on. What are the sectors that they cater to?
Aditya Menon
So primarily our main customers are in the tractor, HCV LCB division. Then generators, earth moving. In the recent three years we’ve moved towards little bit EV. We’re making parts for VR like Tier 2 supplier for Tesla through concentric pumps. We do, we give parts to Eaton Transmission. They do parts for Porsche E Mobility. We also started supplying to Taco Prestolite, Tata Motors for the electric cars. So we shifted little towards EV. We entered new products that like new product like Mr. Arabi said we’ve entered into the friction material.
So we’re doing HCV LCV two wheelers now. Now we entered new products into three wheelers. We’re exploring a railway. So from August or like by end of this year railway business would have been started in aluminum. We are diversifying into oil and gas house automation. The product there are different. There’s a different area of products which we are doing. Now
Unidentified Participant
You mentioned about ev. What percentage of your revenue right now is coming from EV sir?
Aditya Menon
So aluminum division around 10% is coming from EV.
Unidentified Participant
Okay. Okay. And are we planning to enter into apart from the automotive sector like the ones railway you mentioned? But again it is into the mobility part of it it. Right. So do we have any plan to enter into precision manufacturing for aerospace or something like that? Do we have any kind of adjacent capabilities in that area? Sir,
Aditya Menon
We are doing high end technology. We can do aerospace parts. We have also entered aerospace. We’re doing some parts for Anival for airport and aerospace solutions. But not we have not entered it largely yet. But our company capability is is there to do aerospace and we are exploring options but we are doing few parts for our
Arun Aradhye
Capability into entering into aerospace. But what we are concentrating as in the initial discussion and in the speech I told you that we are concentrating more on auto components where auto components focus industry and manufacturers.
Unidentified Participant
Understood. And so what kind of demand scenario are we seeing in particularly in US market right now from the CV part CV side of it
Arun Aradhye
In so far as USA market is concerned our exports have gone up by almost 50% over last year so far as USA market is concerned and there is lot of opportunities we are looking for apart from USA we are targeting now European countries as well. Since European countries are looking to divert their volumes and businesses from China to India and they are tapping our doors and we’ll be very happy to see that they come into our port from the next year.
Aditya Menon
And as men in bearings has a good brand name we are doing high value parts for the last 30 years. As your like Mr. Aaradi said as the Europe is looking for new new vendors, new suppliers in India that would last six months we have got so many inquiries. We are getting overwhelmed by so much RFQs that are coming toward towards us. So Europe business also will start in the future. Today out of the whole pie chart we are doing around 35% out of 100. We are doing export and around 80% of export goes to Europe.
But now we are seeing lot of European demand and European inquiries coming maybe in the next two, three years. Europe and Europe also will have a good share in our export. Europe market will have a good share in men and bearing export. Thank you.
Unidentified Participant
Europe also like Entirely we will be focusing on auto parts. Right?
Aditya Menon
Yes. All are component bi metal division, aluminum division and brakes division.
Unidentified Participant
Good. That’s it for my third sir. Thank you.
Himanshu Upadhyay
Thank you. We’ll take the next question from afsh. Please go ahead.
Unidentified Participant
Hi, thank you for the opportunity. I just want to confirm the margin guidance. So. So for FY26 we’ve done 22% and 2728 we are basically estimating that each year will there’ll be a minimum increase of at least 50 basis points. Right. Okay, thank you.
Arun Aradhye
We will certain that.
Himanshu Upadhyay
Thank you. We’ll take the next question from Himanshuad. Please go ahead.
Unidentified Participant
Hi, good afternoon. Good set of numbers. Yeah. Hi. See one. Hello. Am I audible? Yeah.
Arun Aradhye
Yes, please go ahead.
Unidentified Participant
Yeah. So one thing, one place which has still not done well for us has been lcop. Okay. So in last two, three years the expectation was this will grow at a much faster pace then our Bearings business because it is at a very nascent stage and a lot of new product deliveries were to happen and development. But if you look at 24 it was around 64, 65 crores. And FY26 has shown some growth but the way the business was expected to grow it has been slower and Bearings has been the positive surprise for us.
Okay, so Bearings has done pretty well. So can you elaborate on what is the reason for that?
Aditya Menon
Last two years if you say alcop result there has been growth but not as. What do you say exponential growth as men and Bearings. But this year like how we mentioned we have developed parts in the aluminum segment for various OEMs and different customers from. If you see last quarter from January you have seen there has been significant growth per monthly or quarterly growth in alcohol. Particularly
Arun Aradhye
If you refer to the fourth quarter of this year for aluminum is concerned you can see there is a growth quarter on quarter to the extent of almost 25% and we are assuming a growth in alcohol for the next two years at the rate of 29%.
Aditya Menon
Actually because of the war a lot of delays were happening. Lot of aluminium parts which we made were new new engines. So last three months have been quite. What do you say? The export routes have been taking delays. Customers have last six, eight months because of war and raw material prices increased on Donald Trump’s tariffs. So the customers have been little bit slow. So when if our samples had to like be delivered in January, they were okay for March because all customers could like. You know we make small parts of one engine where customary requires around 800 parts from different customers.
So that Was taking a time. But last quarter and this quarter what all parts we have been developed, we are seeing that come into production. And last quarter and this quarter also you will see a much significant growth for Marin Alcop also. And the next two years Marin Alcop will be contributing as much as Marin Bearing in the whole pie chart.
Unidentified Participant
Okay, okay. And in B Metals have we added many new customers because of which we are seeing so very good growth or it is the existing customers and the very good growth what we have seen. Yeah, that is. That
Arun Aradhye
Is a mix of both new customers as well as the existing customers of whom the business has grown up substantially. And again, I repeat here that ALCOP for next two years will grow at a rate of 29%. I am 100% sure because most of the items have been. All samples have been already approved. We are just waiting in tranches. They will start issuing the order so far as procurement is concerned. The only thing is that we are waiting for the orders now and it will be completed over a period of two years.
And as I told you that there is a pipeline assured pipeline of 30 crores that can be complete completed within two years from now. As such, there will be a growth of easy. I can tell you we can reach more than 120 crores in next two years. So far as Alcop is concerned
Unidentified Participant
And breaking business, the dynamometer has it settled down and are the testing for the railways and which were pending.
Arun Aradhye
What is the progress
Unidentified Participant
There?
Arun Aradhye
That is. That is under production and we’ll be receiving it by the end of August. And thereafter we will take up the business not only of Railways, but OEMs business also will be in our fold. I am sure. We had a meeting today morning itself. So far as railway business is concerned, we are already tied up with them. They are already inspected. They are just waiting for the arrival of dynamometer. After that we will get the registration and vendor code number and we’ll start. The business may not be a large scale at to start with, but slowly we can take up with railways as well as OEMs.
Unidentified Participant
And any specific reason so much delay in dynamometer? Because I think it was to come last year,
Arun Aradhye
You see. You see, we actually order this machine or testing machine for two other manufacturers. But unfortunately they could not complete because of certain reasons which cannot be explained here. But now that is in progress and we are 100 sure that it will be completed.
Aditya Menon
Nanometer is not an easy testing equipment. It’s very expensive. First of all, and there are very few players in India who do it and what technical specification men in brakes were demanding. Few of the customers couldn’t achieve it. So finally we found a partner which is delivering the specifications which we want. Which can do even high end railway parts like Vande Bharat and the new age trains. We just didn’t want if you’re investing so much money. We wanted to have a technology that can help us for the next 10 years.
So lot of back and forth with many companies and engineers and consultants. And finally we reached on a party which is delivering our requirements and that is coming in at the same time we’ve developed new parts and brakes. We entered a two wheeler segment, three wheeler segment. We are also submitted samples for OEMs. And the dynamometer also is coming in August. And we are also like Mr. Arade said today we had a very positive meeting with the railway railway segment. So that business also is looking forward.
So brakes also has a good future lining up.
Himanshu Upadhyay
Thank you sir.
Unidentified Participant
Okay, thanks.
Himanshu Upadhyay
Thank you. We’ll take the next question from Pritesh. Please go ahead.
Unidentified Participant
Hello sir. Hello sir. On the bimetal bearing side, what is the dependence on CV and what is the dependence on tractors in our business line? If you could share that mix. And second is you know these material cost increase. Because I am assuming bimetal means copper will also be a part of the raw material. So. And there is a lot of inflation this base metal. So how do we handle the bimetal bearing in terms of the growth next year and also the margin outlook considering the metal price being up.
Arun Aradhye
Okay, there are two things that you firstly asked as to what are the segment wise revenue percentage Tractor it is 35% of the total revenue and HCV LCV it is between 20 to 25%. Secondly. So then what.
Unidentified Participant
What is the balance? 25 and 35.
Arun Aradhye
So brakes is 20%. Transmission is 15 and others engineering, goods and electricals etc, that is 10%.
Unidentified Participant
So brakes will then be a part of some auto right?
Arun Aradhye
System for braking system not brake liners. This is a parameter. We are telling you our
Aditya Menon
Bushes go wherever rotation is there. But it goes in hcv LCV brakes India gives to all all segments. But as primary OEM 35% distractors. 25 is HCV LCV then 20 is bricks brakes usage 15 transmission we give to Alison transmission, Magna transmission and rested. 10 is electrical application and other industrial application. What where we give up products. So that’s the application pie chart.
Unidentified Participant
So I am assuming that this breaks and transmission where you are secondary supplier in turn goes to auto. So auto will Be auto will be like 90, right? And in that, if one has to look at in that 90, how much is HCV and tractor will it be similar? As you are a primary intern, Secondary also will come out to be a same breakup.
Aditya Menon
Similar breakup, I would say. Okay then. Yeah,
Unidentified Participant
Similar. Okay, no problem, sir. Yeah.
Arun Aradhye
Okay. So far as raw material is concerned, you can see raw material prices are not increasing now. Only since October they have been increasing like anything. And we have already passed on that burden to the customers. We are having three decided formulas. RM indexing is there, raw material indexing is there. And accordingly, we are passing on that burden to customers. Not to worry about the margin so far.
Aditya Menon
For your better understanding. Before we used to have a delta. So three months the prices have increased. We buried the whole in one one and a half year is equal out some some three months. The customer bears it, some we bear it. But now as prices are more volatile and increasing significantly every day, the management, our marketing teams are having chats with the customer. How we can reduce this delta from 3 months to per monthly basis. Or how we can reduce the burden which is bear by the company even more.
But whatever raw material increase happens, the customer bears it. Because we are supplying high end technology parts to them. We are their partners. If our products don’t reach their assembly lines stop so they have a bigger cost. If that happens. So customers and us, we have a very good relation. We work in tandem and they give us raw material price increase. But as marine bearings, as management, we are trying to make this gap as small as possible.
Unidentified Participant
Okay.
Aditya Menon
And
Unidentified Participant
The growth, growth outlook in the Bi metal bearing. Considering FY26 was one of the best years for tractors and HCV.
Arun Aradhye
So we could not get your question.
Aditya Menon
Growth this year also for Marine bearing also has been significant. Next year alone also we are growing at 25,
Arun Aradhye
23
Aditya Menon
Next year also. But like I would like to clarify one more thing. I’ve always said it in our investor meetings. Our top management or our company philosophy is growing sustainably. If you look for the last 10, 10 years, 15 years, our EBITDA margins have remained the same. Our top line must have not grown so aggressively. But our profit margins and EBITDA margins have remained the same. So when we are talking about growth, our policy, our philosophy of our companies to have the same margins. So tomorrow when Mr.
Arabic says we’ll reach 500, we are going to maintain similar EBITDA and profit margins. So we take different policy matters to grow sustainably. So we don’t get greedy behind growth or top line. Or one customer we get big business. So none of our customers has more than 15%. As
Arun Aradhye
You said, we are not after volumes. We are balancing between volumes as well as margins so that we are sustaining that over a period of time and we will sustain it in future as well.
Aditya Menon
And none of our customers has more than 15% market share like share of the company. So we are not dependent on one customer. Or like you might say like auto is a big margin. So we have a good diversification of tractor companies. We give to good diversification of import and export. So even if one cycle is down, we are not affected as a company as whole in the long in a bigger picture. So we take, we take care of all of that and take decisions accordingly.
Unidentified Participant
Okay, so just one last question on LCOP. We are a 2000 ton capacity, right?
Arun Aradhye
That is actually 1450 tons capacity. But we are having another spare holding furnace. So we can double that capacity at any time considering when
Aditya Menon
Volumes are there, when water the
Arun Aradhye
Volumes and, and feature that we will have to install that capacity as well and start production on that. So
Aditya Menon
More than 2000 if. If required. Currently we operating at 1500.
Unidentified Participant
So 300 tons per annum, right?
Arun Aradhye
Yes, yes,
Unidentified Participant
500 tons per annum. And what is the utilization?
Arun Aradhye
Utilization as of now is 65% and it is likely to go up to 90% by the end of this year. So that we will have to engage another furnace next year.
Unidentified Participant
Okay, thank you very much Sir.
Aditya Menon
Yeah. And Mr. Chad, I would like to like you know for aluminum for at least man Alcob don’t try to calculate by tonnage because if you see, if you see any of our competitors in the market for basically I will say before price increase aluminum was for 200 rupees a kilo average realization. If you see competitors, even big players
Unidentified Participant
They
Aditya Menon
Do around 450, 500 is high higher end average realization of value addition is 200 or 250 rupees more. Where alops average realization is 750, 700. So we are focusing on very critical high value parts. So tonnage calculation won’t give you correct. Like you know, if you go try to reverse calculate it won’t give you. You won’t come to our. Our figures.
Arun Aradhye
So what we we are telling you that we are not after volumes. We are balancing both, both, both the games. You see volumes to the certain extent which can features margins which are sustainable.
Aditya Menon
And even if you see in the aluminum division big companies, I don’t take my competitor’s name, they are working at 6 and 8% margins where in the aluminum division also we are working around 20 margins. So that’s the difference between man and Alcop and other players in the market.
Unidentified Participant
Okay,
Aditya Menon
Yeah, thank you.
Himanshu Upadhyay
Take the next question from Raghav Maheshwari. Please go ahead.
Raghav Maheshwari
Hi. Am I audible?
Aditya Menon
Yes.
Raghav Maheshwari
Yeah. Hi sir. Thanks for the opportunity and congratulations on a great result and a great FY26. So sir, first of all I wanted to understand, like you mentioned repeatedly that you were able to pass on the, you know, raw material price hikes to the customers. But just wanted to understand a little bit, you know, what’s going on in the industry. How much of the price hike were you able to see? Like I know you have passed it on, but how much was the raw material inflection?
Aditya Menon
It was significantly high this year. Aluminum also we used with different alloys and different grades technically, but some grades that cost 250, 240 rupees a kilo went to 280. Copper rate, everyone’s nose.
Arun Aradhye
Last, last one is what, 1210. Now it has reached to 1275 though it is fluctuating according to the geopolitical situation and market. So they are, they are very volatile. We cannot say if it has gone up to 1275. Maybe in the next week it will go down to 1200 and 12 as well. But this price around
Aditya Menon
One year back was 900 rupees. So if you see there has been significant jump. But we have to buy, do we do buying every month or quarterly? So these prices have been very volatile. But customers, because we are doing high value addition and our customers are OEMs. We are not doing any like, I don’t want to say altu paltu but all our customers are a great customers.
Raghav Maheshwari
They also
Aditya Menon
Appreciate our effort and they give us, we have a very good relation for the last 30 years and they, they support us for this price increase.
Raghav Maheshwari
And any difficulty or challenges you are facing or you might face in sourcing the raw material apart from the price side.
Aditya Menon
No, sourcing is not an issue. Pricing is the issue. But there are some logistic issues now because of the war, logistic lines are taking little longer. So now because of that we have to be proactive, be in touch with the logistics. Our logistic partner partners more often try to get the best routes. So from that end we are spending more energy and time making sure all that happens on time. Where before the war it was more smooth of smooth situation. That
Arun Aradhye
Is more or less true so far as exports are concerned. Most of the raw material required, we are procuring it domestically. So the warlike situation and geopolitical situation doesn’t affect much so far our industries are concerned
Aditya Menon
Except for alop
Arun Aradhye
Some imports we have to do so we have. We have to take little more effort so far as certain material is concerned. But overall situation is normal for us.
Raghav Maheshwari
Right. We
Aditya Menon
Have to be more proactive and monitor the situation better.
Raghav Maheshwari
Understood, sir. That helps. And sir, in the last phone call you said that exports you’re targeting almost 90 to 95% of exports. You want to bill it X works. So how far are we in that
Aditya Menon
We are working. Most of our export orders are getting converted to x works. Around 80% of our orders are x works. Remaining 20. We are in talks. So it’s not very easy. Some customers are say
Arun Aradhye
That they add what happens, you know, when we are discussing and negotiating with such customers where our quantum of business is too high and where our terms are DDP I.e. Duty delivery, duty paid. So we are talking to them at the same time they are asking for deduction to the extent that we cannot afford. So instead of that, better we continue with DDP terms. That is what that is happening. But when like I am visiting USA next month, maybe Canada next month and USA month then we will have talked to them and we’ll see what best we can do.
Whether it can be from 80% we can move it to 90. Let us see. But
Aditya Menon
Majority of our export still out of 180 is X work. So that is still very. We are in a very good position where we are not letting a third third party like a war or a third. So external factors affect our quality and Delivery timings.
Raghav Maheshwari
Right. 20
Aditya Menon
Is left. We are still negotiating and trying our way how we can get X works.
Raghav Maheshwari
And that is yet to reflect in the trade receivables.
Arun Aradhye
Yes, yes.
Raghav Maheshwari
And so also second thing,
Himanshu Upadhyay
May I request you to rejoin the. Thank you. I’ll take the next question from Murtaza and I’d request the participants to limit their questions to two participants.
Unidentified Participant
Hi sir. Good afternoon. Thank you for the opportunity and congratulations on a good set of numbers questions. So firstly, just continuing the previous participant like what is the time lag we have in terms of passing on the cost? Is it a month or a quarter? How do we do it?
Arun Aradhye
Quarterly. Yeah,
Unidentified Participant
Okay, quarterly. And so secondly, earlier we had mentioned that we are trying to improve our asset turns to somewhere around 2 to 2.5. So like what sort of timeline and are we on track and what are the key changes or steps we are taking in.
Arun Aradhye
So we are right on track. You see for the next two years what I already told you that there is a growth of 25% envisioned year on year. With that we will be able to on overall concerted basis we should be able to reach asset turnover turnover of 2 by 28 we should be reaching that 100.
Aditya Menon
And you mean by efforts we take efforts on daily basis we are doing heavily monitoring, monitoring. There is technology upgrade upgradation training of our teams. So a lot of effort taken by the management to make sure that we are achieving these set of numbers.
Unidentified Participant
Appreciate that effort. And lastly just just also wanted to understand earlier in last quarter con call regarding the PTFE bush opportunities for the EVs. We we had sent some samples. So I just wanted to know like how is the have we received the approvals? How has it been needed Some commentary if you can.
Arun Aradhye
You see total inquiry for such PTFE buses is for seven parts out of that one part. They were initially asking us to provide the samples which has been approved by the Europe European country. And their vice president is visiting Pune office, Pune manufacturing facilities of that customer by 26 where our marketing manager will visit them and will take it forward. And for once that approval that they have orally they have received the communication that the sample is approved. Now that vice president will put up another inquiry for remaining six parts so far as PTF is concerned.
And those all will be manufactured by a samples will be sent to European countries. And once that is approved then maybe for so far as 1 lakh of bushes per month is concerned we will be getting that order within a month or two. And for rest of the items those samples will be sent to them. And we are likely to get that order to be productionized by this year. And that quantum will be about 6 lakh of pieces per month.
Aditya Menon
And there is significant growth in the PTFE industry also like the newer, newer age engines will be moving towards PTFE and new coatings and new technology and and last three, four years men and bearings. We have as a team working very hard on this technology and finally we have perfected it I would say. So moving ahead lot of growth will be there in this segment because the newer age engines required this. And that’s why like Mr. Arade said, European companies are interested now and we are submitting our samples.
So in the next two years you will see a growth in this PTFE market. Also the last three, four years of R D and research in PTFE is benefiting us now.
Unidentified Participant
Sure, sure. Thank you very much. Just one final question. I guess earlier in the investor Presentation. We were exporting South Africa via a Dubai distributor. So I just wanted to know because of the disruption of the West Asia war. So have we changed our path to it and how are we planning or doing it?
Aditya Menon
No, we still are doing export through Middle east only because we have not. We had past a bad experience directly working in Africa during payment conditions and all. So this merchant exporter gives advanced payment which goes to Africa. So now the time period is longer. The consignments are going before it went three times a month, is going once a month because of congestion in the Dubai ports and Middle east ports. But work is happening through Middle east only. We are. We want to be safe. We don’t want to.
Our material we’re doing. We have certain payment terms and conditions which we are focusing on and we don’t deviate from that.
Arun Aradhye
Yeah, I think you are targeting. The question is actually the material that we are sending to African countries through Dubai.
Unidentified Participant
Yes, yes.
Arun Aradhye
So what has happened so far as Dubai is concerned? The exports to African countries through Dubai for last three months we are that export is halted. That has affected to the extent of almost 2 crores of business that we have lost during last three months. However, at the same time that has been compensated by customer for African countries we have got orders of almost 6 crores of rupees for 6 crores of rupees for the entire year. And here the merchant exporter is lifting the material from us and sending directly to African countries.
And from the merchant exporter we are getting the payment in advance. So overall there is no impact on our sales or volumes as such.
Unidentified Participant
Sure. Sure. Sir. Thank you very much. All the best for the future. Thank you.
Himanshu Upadhyay
Thank you. We’ll take the next question from Ajay Sharma. Please go ahead.
Unidentified Participant
I just want to check for LCOP. You have mentioned that almost 50 to 60 crore revenue will come from just one single customer. Is that correct?
Aditya Menon
Not one single customer. There’s John Deere, there’s Honeywell, there’s Taco Prestolite, there’s Eaton. There are many customers but we develop lot of export parts. Like when I say John Deere, there’s John Deere plant in Mexico, there’s a John Deere plant in usa. There’s a John Deere plant in Europe. So it’s not one plant like. And that one plant does 2000cr turnover. So if you see that there are 10 different customers which we are developing parts for. So the next two years growth there are different segments.
So John Deere is one of the larger players. But we Are developing parts for Honeywell Concentric Taco Presto light
Arun Aradhye
What I in the initial speech or what I told you know that I will repeat it again. New development parts pipeline is robust with 51 new parts across major customers like John Deere for domestic as well as for exports. Then Eaton Taco pastoralized at Myogawa representing a business value of more than 29.69 crores so far as aluminum business is concerned. And that all will be productionized in this year as well as some part of it you will be in the next year. So overall 30 crores business pipeline in Alcop is pending and will be completed during these two years.
Okay.
Unidentified Participant
Yeah, got it. And for Bi Metal I guess you are targeting 23 growth, right? And so where, where is the additional growth coming from? Is it coming?
Arun Aradhye
There are so many, so many customers and pipeline is very large. You see so entire page is there. Almost more than 28 to 30 customers are in pipeline. We are issued RHQs, not only issued RFQ. Some of the commercials have been already finalized, Some of the samples have been already sent. Some of the samples have been already approved. And we are getting orders from them one by one by one. And during next two years, including this year, I hope that the new addition into biometric business will be more than 50 plus.
Aditya Menon
Like Mr. Arabia said today’s meeting that happened for new business, that business will get actualized after two and a half years. So what growth we are seeing today is last two years effort. So today what new business we’re looking at because it’s an engineering and very technical product. There’s a lot of time that goes into developing the parts then testing, validation. Then they have to get all the new engine killer parts from all their suppliers. Then six months testing then they start business in a small way.
If the order is 10,000 pieces first month they don’t do 10,000 pieces. They start with 2,000 pieces, then 4,000, then 8,000. So the quantity increases. So it takes little bit more time. So in the BI Metal bearing it takes around nine months from start to order. Maybe in the aluminum division it takes long, little longer time. Around 12 to 14 months from start. From the day we get RFQ till we the startup business happens. And these external factors like the war and etc doesn’t help in this situation.
Unidentified Participant
Okay,
Aditya Menon
Thank you very much. Thank you.
Himanshu Upadhyay
I will take the next question from Divyan Gupta. Please go ahead.
Unidentified Participant
I just have one question. In the revenue split that we have given right there is OEM replacement and aftermarket OEM Aftermarket. Aftermarket and
Arun Aradhye
Exports. Exports.
Unidentified Participant
But there’s also another line others. So what is this others?
Arun Aradhye
That is industrial. Industrial generators, compressors, fans, coolers. Etc
Aditya Menon
Lot of air conditioning are bushes. Go for a lot of air conditioning applications.
Unidentified Participant
Got it. Air
Aditya Menon
Conditioned, industrial, fridge. Those go in hotel industry.
Arun Aradhye
Then compressors. Compressors,
Aditya Menon
Generators.
Arun Aradhye
Yeah.
Unidentified Participant
But give. And how do we see the growth of this segment? Because let’s say now with all the power demand both on consumer side. In our industrial side
Arun Aradhye
You see we already issued RFQs from Compressor Division. Like my cover they are into Japanese company. They are into compressors. Similarly we have got inquiries from Mahindra for their generator generator sets. And that will be completed within this year itself.
Aditya Menon
So from the auto segment also we are looking at other options to diversify and grow also. Like how real estate boom is happening in India everywhere. Electricity, electricity is required. Almost all buildings, restaurant need a generator. So this growth is going to get bigger and bigger in the future. So we are looking at different companies, different applications where we can help and support. And
Arun Aradhye
Apart from that we are already supplying to PSA like that he said Mr. Aditya told you regarding air conditioning. That is a huge business. We are receiving. And it is increasing every every month. That is increasing. Apart from that so many compressors and generator sets. We are receiving the inquiries like we are already into comments. Then into Mahindra. Then other my coverage also there so far as compressors are concerned. And those inquiries are being floated to us and we’ll take care of.
Unidentified Participant
Got it. And this 10% revenue in this 11 12% motor. Motor in this.
Arun Aradhye
What happens you know when this revenue also goes up at the same time. Domestic and export is also
Aditya Menon
Same for last 10 years is similar. But now we have reached 300 crores. But the others also remain same. Similar percentage.
Arun Aradhye
When you see the pie chart our aftermarket is almost stagnant. 8% over last more 4 to 5 years. But the business has gone up from 10 crores to now 16 crores over last 4 years. And we are targeting PI will remain same. Yeah.
Unidentified Participant
The overall pie is going up. So that’s why. So the question that I had follow up is that this let’s say 8% or 9% for this year. This is completely in bimetals business. Or it’s also split across.
Arun Aradhye
No no. That is. That is so far as in aluminum division we don’t have any aftermarket.
Unidentified Participant
No no. I meant for this others business.
Arun Aradhye
Other business that is so far as biometry. God.
Himanshu Upadhyay
Will take up questions from the chat. Has a Few questions first. First of all what’s our current order book and what size of orders are we looking to close over the next three to six months?
Arun Aradhye
You see our current order position is more than 32 crores. Out of that will be serving almost more than between 30 to 31 crores. On a consolidated basis going forward. What we feel that will be targeting almost 190 crores for first six months.
Himanshu Upadhyay
Okay. Her next question is what would be the industry mix in this product? Mix?
Arun Aradhye
Sorry.
Aditya Menon
Industry. What will
Himanshu Upadhyay
Be the industry mix? And how much would be auto? How much aerospace. How much railways.
Aditya Menon
See biomet. All. All the three divisions have different application. Like? Like bi metal. Like we mentioned before tractor is 35% 25%.
Himanshu Upadhyay
She’s specifically asking regarding the order book. So how much will be auto? How much? Yeah. How much aerospace and how much railways. And
Arun Aradhye
Truly speaking we are not bifurcating order book solution into auto. And once sale
Aditya Menon
Happens then only we consider it.
Arun Aradhye
But overall Mr. Aditya will tell how much will be the auto, what will be the home applications, what is the pipeline business? Tractor business. He will let you know accordingly and it will remain more or less constant. Okay.
Aditya Menon
Roughly I’ll give you an idea about our order book. Out of 100 of order book around 60% is export, 40% is domestic. So you can get a better understanding on that. 60% export, 40% domestic. Majority of it is from the auto industry. We are doing like tractor. We are doing HCV, LCV and lot of transmission work. So that is one. We also doing around 10% of the new order book is from EV. Like we mentioned we are doing. We are giving parts to Tesla Motors, to Porsche E Mobility. Now we entered Tata Motors for Tata Electric vehicle parts.
So we entered this as a new client to taco presto light. Two years ago we were only doing two parts with them. Now now we do more than four parts with them. We’ve gotten more four RFQs with them. So in the near future even the EV presence of men and alcohol will increase. So this is like a basic. Once railway start, we’re doing zero business till now for railway. So we are finished our registration with railway. Railway people visited our planned for audits. So in the near future even railway business will start from like 5% 10%.
But we are looking for railway business in the future also to increase.
Arun Aradhye
Overall on consolidated basis auto will be 75 and 25 will be restricted.
Aditya Menon
Yes.
Arun Aradhye
On a consolidated basis.
Himanshu Upadhyay
Okay sir. He further asked you had earlier guided for 350 crore revenues in FY27. Are we maintaining the same or is there a material upside to this number?
Arun Aradhye
What I feel that we should be exceeding that target.
Aditya Menon
I just want to say now we have been captify also for the last three, four years. Two years ago we had submitted. I don’t know who all are following the company for a long time we had given a figure of 275 for this year that we are going to achieve and
Arun Aradhye
Which was subsequently rewarded
Aditya Menon
Our management, everything working together we have exceeded the number by 25 crore. So if number is 350 I am pretty confident. And Mr. Was saying we will surpass that number. But how much that we have to see next year. But we will be surpassing that number also
Arun Aradhye
Recently what we estimated is more than 360 crores.
Aditya Menon
Yes.
Himanshu Upadhyay
Okay sir. And her last question is. I understand that we’ll maintain ebitda margins about 20% now. However we did 25% in Q4.
Arun Aradhye
So
Himanshu Upadhyay
Suffice to say that depending on the export mix in that quarter our profitability number may move in a range of 22 to 25%. Is that correct, sir?
Aditya Menon
Yeah, that is correct. Depending on what kind of high volume products come. You
Arun Aradhye
See sometimes what happens that raw material goes up and we can pass on that burden in the next quarter. In the meantime we have to sustain that burden. And maybe temporarily it can come down and subsequently it can go up again. But overall we can tell that we will be able to sustain EBITDA margins to the extent of 20% to 22% overall for the entire year. On a safer side or on a conservative side.
Aditya Menon
If the environment the third external factors are in our favor, it should be higher. You
Arun Aradhye
See, electricity is going up, labor cost is going up. New lower labor code has been implemented. All these cost needs to be considered while calculating the EBITDA margin. So that on a conservative basis we can say we can sustain that between 20 to 22%.
Himanshu Upadhyay
Thank you sir. We’ll take the next question from Manas Jain. Please go ahead.
Unidentified Participant
So just. I mean coming to the same question of EBITDA margin. I just wanted to understand. This quarter is purely. There’s no one off if just pure operating leverage coming out just for academic purposes.
Arun Aradhye
So that is. You see our production capacity is something. During the previous quarters you will see the cap utilization utilization was about 60 to 70% or maybe about 75%. Now we have achieved the production targets and capacity utilization to the extent of 85% in biometric. In aluminum we in capacity utilization gone up from 45 to 60. Similarly in brakes also we increase the capacity by almost 1 lakh of pieces per month. And that capacity utilization also has gone up. What happens, you know, when the production capacity utilization goes up, the productivity increase, the expenses related variable expenses to some extent increase but the fees cost are remain the same.
So the total cost of production goes down and because of that we get sustained margins or overall margins are increased. So overall when the production volumes are high, sales volume is high, then we can have better margins as compared to the corresponding period of last year or previous month.
Unidentified Participant
Got it. So it’s operating leverage basically. Yes,
Arun Aradhye
Operating
Aditya Menon
Leverage. Of course it’s operating leverage. But all different parameters.
Arun Aradhye
I explained to as to how we achieve that. Yeah,
Unidentified Participant
Okay, perfect. Thank you.
Himanshu Upadhyay
Thank you sir. Since that was the last question, would you like to give any closing comments?
Arun Aradhye
So, in conclusion, man and Bearing is entering the new financial year with strong momentum, a healthy order book and a solid financial foundation. We remain committed to delivering sustainable value to our stakeholders, shareholders. And I thank you for both the promoters to be present in the meeting and guiding you people as well as imparting the information they have got their export opinion so far as the performance of the company is there. And overall, I am sure with support of all of you, by the grace of God, whatever, we have decided to grow at the rate of 25%.
And our optimistic target, if something doesn’t go wrong, we should be able to reach 500 crores. And with this I thank you once again for participating in the meeting and then asking us some leading questions so that we can think upon that wherever improvements are required, we will definitely improve. And in the next meeting, whatever the questions you have left, those will be answered in the next meeting. Thank you very much. Have a good day.
Aditya Menon
Thank you. Thank you so much. Thank you.
Himanshu Upadhyay
Thank you to the management team and thank you to all the participants for joining on this call. This brings us to the end of this conference call. Thank you.
Raghav Maheshwari
Thank you. Bye bye.