Nelcast Limited (NSE: NELCAST) Q3 2025 Earnings Call dated Jan. 31, 2025
Corporate Participants:
P. Deepak — Managing Director
S. K. Sivakumar — Chief Financial Officer
Analysts:
Abhishek Bhatt — Investor Relations
Saket Kapoor — Analyst
Vidit Shah — Analyst
Priyam Shah — Analyst
Rohan — Analyst
Rahil Shah — Analyst
Akansh Aarav — Analyst
Anand Gupta — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the Limited Q3 and Nine-Month FY ’25 Earnings Conference Call. 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 assistant during the conference call, please signal an operator by pressing star 10 on a touchdown phone. I now hand the conference over to Mr Abhishek from ENY Investor Relations. Thank you, and over to you, Mr Abhishek.
Abhishek Bhatt — Investor Relations
Thank you. Good morning, everyone. On behalf of Limited, I welcome you all to the company’s quarter three and Nine-Month FY ’25 earnings conference call. You would have received the results and investor presentation, which is available in our filings with the exchange. To discuss the company’s business performance during the quarter and outlook we have with us today Mr P. Deepak, Managing Director and CEO; and Mr SK Shivakumar, CFO at Limited.
Before we proceed to the call, a disclaimer. Please do note that anything said on this call — during the course of the interaction and in our collaterals, which reflects the outlook towards the future or which should be construed as a certain forward-looking statement must be viewed in conjunction with the risks the company faces and may not be updated from time. More details are provided at the end-of-the investor presentation and other filings that can be found on our website,. Should you have any queries or need any further information at the end of this call, you can reach-out to us at the email address mentioned in the company collaterals. With that, I would now like to hand over the call to Mr Deepak. Thank you and sir.
P. Deepak — Managing Director
Thank you, Abhishek. Good morning, and thank you all for joining us on today’s call to discuss our performance for Q3 and the nine months of FY ’25. I’m excited to share the wonderful news that Limited has recently celebrated our 40th anniversary. I’d like to express my heartfelt gratitude to everyone for their unwavering support. That’s gotten us through four decades.
It’s been a period of considerable challenge for Nelcast. The resilience that we have shown in the face of market fluctuations is a clear indication of the strength and stability of our business model. We are not just navigating through a temporary dip in-demand. We are actively preparing for a future filled with promise and potential. During the quarter, our exports witnessed a decline because of macroeconomic headwinds in our key export market, which is the US. However, the domestic market has shown signs of recovery, particularly in the tractor segment.
We believe the worst is behind us and we are poised for significant growth in FY ’26. Our confidence is supported by the promising prospects of new order wins on the export front, which we expect to materialize from the beginning of FY ’26. Coming to the segmental performance, during the nine months of FY ’25, the Tractor segment witnessed a year-on-year growth of 10% in volumes and its revenue-share grew to 24% from 21% in the nine months.
The M&HCV segment revenue stood at 37% despite a moderate volume decline. Export volumes during the nine months of FY ’25 witnessed a slight decrease, yet that share of total revenue remained consistent with the previous year at 35%. Our commitment to business development has never wavered. Our team has been proactive in our efforts to secure new orders and we’re poised to see a significant addition of export orders that will enhance our order pipeline. This momentum is set to build a strong order book, which we believe will be the key catalyst for strong revenue growth in the upcoming financial year. Moreover, the domestic market is showing some positive signs of infrastructure development pickup as well as growth in e-commerce sector and new scrappage policies are expected to sustain demand for commercial vehicles.
Looking ahead, we are confident in trajectory of growth and success with a clear order visibility, an exciting range of new products in the pipeline. We are strategically positioned to deliver enduring value to our stakeholders and solidify our standing in the market. Your continued support is invaluable to us as we progress on this path to a promising and prosperous future.
Lastly, commenting on the financials, the total income for the quarter stood at INR297.1 crores compared to INR323 crores in Q3 of FY ’24. The total income for nine months stood at INR934 crores compared to INR982 crores in the nine months of FY ’24 and our exports stood at INR318 crores compared to INR338 crores last year, which is a degrowth of 6%. Our EBITDA for the quarter was at INR22.9 crores compared to INR28.2 crores in the same quarter last year. And our EBITDA for nine months stands at INR71.3 crores compared to INR87.2 in the nine months. The profit-after-tax during the quarter was INR6 crores and INR23.7 crores for the nine months respectively.
So thank you. And I’ll now open the floor to any questions you might have.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask questions may press star N1 on the touchtone telephone. If you wish to remove yourself from question queue, you may press star N2. Participants are requested to use handsets while laxing a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assemble first question is from the line of Saket Kapoor from Kapoor; Company. Please go-ahead.
Saket Kapoor
Shiva, sir, and thank you for this opportunity. Am I audible, sir?
P. Deepak
Yeah. Yes, you’re audible now skar.
Saket Kapoor
Yeah. Sir, firstly, in your press release part, sir, I’m just quoting you, we have mentioned that we have a relentless focus on business development and the team has been working tirelessly to secure new orders and we anticipate a significant addition to our order pipeline going ahead, strong and a strong momentum in exports, which you alluded to in your opening remarks. Sir, if you could give us some more color to what are we trying to express and sir, firstly, sir, for this three months, what were our export numbers in the absolute and the comparable with the second-quarter?
P. Deepak
Yeah. Our export numbers in this — in this quarter was about INR91 crores approximately. And in the previous quarter, it was about INR129, about INR130 crores approximately. So we believe that this slowdown was specific to the quarter, mainly because I think there was a lot of uncertainty that was there in the US with the elections that were happening and potential rate cuts. So this is the reason we believe that there was a significant slowdown. I think there’s also some amount of inventory level correction that our customers were doing at their end and therefore reducing their production numbers as well. So this is why we believe that there was a significant drop-in the 3rd-quarter. We are looking at a 4th-quarter that is at the moment looks to be coming back towards normal.
Saket Kapoor
Yeah, and sir, you alluding to this fact about the new order and also how are the are as requested earlier also, we have not mentioned the tonnages for the quarter and for the nine months. So would request again the IR team to please provide the same input on a continuous basis along with the results, that would suffice some of the questions and yeah.
P. Deepak
So let me answer this point as well as the one that the previous one that I had not answered. So this — in terms of tonnages, our sales quantity in terms of tonnage in the last quarter was about 19,700 tons okay and a production quantity of about 19,450 tonnes. Yeah. So comparing to the second-quarter, we are — we were at — production quantity was about 22,000 tonnes and the sales quantity was 21,800 tonnes in the previous quarter.
Saket Kapoor
That’s a significant lower than I said.
P. Deepak
Yeah. So the second-quarter to 3rd-quarter, I think the dip is one of course, as I mentioned in terms of the reduction in the exports. So primarily driven around some uncertainty regarding interest rates as well as the US selection. But I think some of it was also a general seasonal drop that happens due to the tractor industry moving from Q2 to Q3, the Q2 is the peak of the tractor industry and Q3 is — and Q4 are the low points. And commercial vehicle has not did not yet pick-up until at least if we started to see a pickup in probably towards the end of November. So we don’t really see that reflected as well here. Now I think for the full-year, if you look at from a sales perspective, for the nine months so-far, we are at about 61,500 to 500 tonnes. The same nine months last year was about 62,700 tonnes. So we believe we will be able to at this point based on our current order visibility, I think we will end-up at a number that is the same or very close to the same as last year. On a year-on-year basis, we will see — we anticipate at this point that we will see a stronger Q4 this year than we did see last year. That’s the indication at the moment.
Now coming to the new orders, the question that you had asked and what we are working on. I think there’s quite a bit of serious discussion that is happening and we believe we’re very close to being awarded some business that would potentially be able to add anywhere from about $25 million to about $60 million of new product wins that we hope will materialize in the next — in the next three months or so.
Saket Kapoor
Okay. And sir, what would be the likely deliverable scheduled for them this order after securing the.
P. Deepak
So these are not — this is not one order. So there’s a variety of different orders. Some of these we’ll be looking at a start of production that will be in early part of maybe Q4 of the next financial year of Q4 of FY ’26 to — will be the start and then there will be a ramp-up period. And — but I expect that within about two years or so that the ramp-up will be completed towards the business value.
Saket Kapoor
Right, sir. And sir, two questions for Siva, sir. Sir, lastly for the September
Operator
Follow-up into queue for the
Saket Kapoor
Madam, this is a numerical one and I’ll join the queue.
Operator
Sure.
Saket Kapoor
Thank you, Madam. Shiva sir, the capital work-in progress closing balance on a consol level was INR68 crores for 30th September. Sir, if you could just put some more color, where-is this money we have spent and what?
S. K. Sivakumar
So earlier also you mentioned that the modernization project at our plant has been capitalized now.
Saket Kapoor
Okay. So the entire amount has been and the depreciation therefore, we have amortized the same also for this quarter
S. K. Sivakumar
Yes, yeah.
Saket Kapoor
Okay. And sir, can you give the debt numbers also, sir? Our long-term borrowing and short-term borrowing or the net-debt level also would suffice.
S. K. Sivakumar
Net-debt for the quarter ended INR267 crores, including short-term and long-term.
Saket Kapoor
Okay. INR67 crores. And any current — any maturities we have for the coming quarters of March ending 2025
S. K. Sivakumar
The repayments is continuing, whatever the ELA repayments. So that we are continuing. 4th-quarter repayment
Saket Kapoor
What should we end the year, sir then for as a closing balance.
S. K. Sivakumar
As of now, I cannot do that because 4th-quarter repayment is no.
Saket Kapoor
Okay, okay. I will join the queue, Deepak, sir, for my follow-up questions and all the best, sir. I have couple of them.
Operator
Thank you. The next question is from the line of Vidit Shah from Spark Capital. Please go-ahead.
Vidit Shah
Hi, hi, Deepak and. Thanks for taking my question. My first one was on the MHCV volumes and sales, we’ve seen a little bit of a slowdown over the last couple of years, a couple of quarters and may continue into this quarter as well. So any terms of any outlook that you could provide on where we are seeing the sector in 4Q and how we are seeing recovery come through and if we are witnessing a prolonged slowdown there?
P. Deepak
So we are seeing MNSCB more so I would say in the tipper type of a product and the hallish product. We are seeing some recovery. It seems to be that maybe this is due to infra spend. We also had a very low-base last year, if you look at the 4th-quarter because there was a fairly drastic cut in-production numbers that all the OEMs undertook because they were expecting again a very slow first-quarter because of elections happening in India. So this year, we don’t anticipate that, that will happen. We’re not seeing any signs of it. In fact, we’re seeing fairly good projections, robust projections for Jan, Feb and March, which is typically the peak season for the M&HCV. So I think we’re seeing in the current quarter, what we expect to see is a more of a normal seasonality. But that being said, I think we still do expect that as a whole year, MNHCV will have a — will have a degrowth as from a total industry volume perspective. That being said, we expect at the moment that we will — we will have a moderate growth on our sales-through the MNHCV segment. There have been a couple of places where we’ve gained some market-share. And so I think that will help us offset that industry degrowth and actually be able to grow a little bit.
Vidit Shah
Got it. And previously, you had stated of a target of about 110,000 per metric ton of volumes in FY ’26. Now given where we are right now and the order book visibility you have, do you think are you — that you’re still on-target to achieve this or do you think this is push to FY ’27 given that the new order, that $25 million to $60 million order that you said is — will only ramp-up from FY ’27?
P. Deepak
So I think this is a number we’d like to work towards, about $105 million to 108% is what we are currently hoping for. Some of that has to — will depend on two factors. One is the industry itself. And so if the industry doesn’t — I think if the industry grows by about 5% to 10%, then where those are definitely on to be able to hit that. And the other part is the new product development and the launch timelines on the new product development. So there are specific timelines that we believe in terms of when the business would get awarded to us, when samples would be required, when testing would get completed and when our customers would go into production for these new orders that we believe that we’re very close to winning. So if that happens, then exactly as per plan, then yes, somewhere between 105 to 110 million is on the cards. But if there are delays in that, then that might create some shortfall to that target.
Vidit Shah
Got it. And just one clarification. These new order wins are from what geography?
P. Deepak
So they are sort of it’s a mix, but still a big chunk of these new orders that we are anticipating to win. We haven’t won them yet. So I just want to be careful, but our new order wins, that decision we expect taken in the next couple of months. A biggest chunk of this is still from the US and North American market. But even within the US and North American market, a chunk of this is actually from a different segment, which is the agriculture segment — agriculture and construction equipment of highway segment and some of it is from the commercial vehicle segment.
Vidit Shah
Okay. So if you could just give us an update on how we’re doing in Europe because that was the next line of growth that we were expecting that.
P. Deepak
So Europe, we’ve had one of the European customers come and visit and complete an audit. And based on the audit, they’ve given where there is an action plan to close a handful of points that they’ve — that they’ve requested, which we expect to complete within the next — by the end-of-the quarter. So parallelly also some commercial discussions are going on. I think that customer intends to start with a small order to try us out and then — but there is a fairly good order book pipeline that’s there once the first order comes through and is successful.
Vidit Shah
But that — like so basically we’ll start small, but meaningful deliveries will only happen in FY ’27, would that be right assumption?
P. Deepak
Yeah. Yeah. I think that’d be a fair assumption for that — for that. So that’s one. There’s a few other discussions that are happening and we’ll see how those pan-out.
Vidit Shah
Okay. Thanks so much for these clarifications and all the best. Thank you very much.
Operator
Thank you. A reminder to all participants you may press and one to ask a question. The next question is from the line of Priyam Shah from Value Equity. Please go-ahead.
Priyam Shah
Good morning, sir, and thanks for the opportunity. So this is with respect to our revenue mix. Just wanted to know whatever revenues that we are garnering from MHCV segment, does that comprises only of export or it is completely domestic sales? If you can just give the split of that.
P. Deepak
So the 37% of MNHCV that I said, that entire 37% is domestic MNHCV. Exports is independent of that and exports is about 34.7%, 35%.
Priyam Shah
Okay, okay. And my second question is with regards to how does our ballpark of our order book pipeline, as you mentioned looks upon like you’ve seen that this is very strong. If you can quantify that?
P. Deepak
Yeah. So I think you know, I think I did, I said a number that’s probably between up to $60 million of new business is what we are working on the export front. There’s also some stuff we’re working on the domestic front. We believe that these are — these are not just things that we quoted, but these are things that have a very-high potential of us winning it.
Priyam Shah
Okay. And would these be executed over the next, let’s say, 15 odd months?
P. Deepak
Yeah. So we — so this — the business will — all of these businesses that we are talking are businesses that would start production within the next 15 months is what we are discussing. But the ramp-up of — will start at that particular point of time and the ramp-up might take-up to another year or so.
Priyam Shah
Okay. Okay. And I’ll take the last question. See, as mentioned in our presentation, our EBITDA per KG stands at INR11.8. Okay. So what are the measures that we are taking to improve our EBITDA per kg?
P. Deepak
Yeah. So I think there were largely three things that we’re looking at. One is in terms of the product mix. So if these orders — new orders do materialize, we’d be looking at a significantly higher export volume, which is a better product mix for the plant. That is one. The second is in terms of renewable energy as well as other cost benefits that we can do out of our operations and cost-reduction programs that we have running. And the third is also in terms of operating leverage. As we look at maybe a 50% in the next couple of years, we’d like to target to grow by 50% in the next couple of years, which will happen if these orders materialize. So between these three, we are quite confident that we’ll be able to push this number to about 15%.
Priyam Shah
Okay, okay. So this 15 number that you are mentioning that would be in the year FY ’27 or beyond and beyond?
P. Deepak
Yeah. I think once these businesses are ramped-up, which would probably be the latter part of FY ’27, we believe these numbers would be achievable.
Priyam Shah
Okay. Okay. One final question. How do you see our company shaping up probably five years down the line, FY ’30, something of targets that you have a vision kind statement?
P. Deepak
Yeah. So we’ve actually just last week on our — at our 40th anniversary, we did an vision that we’d like to be among the top-five iron casting companies in the world. This is something that we are preparing that roadmap and we’ve got a — we know where we need to get and how we’re going to get there. We’ve got to work on a lot of things, but that’s our target. I don’t know if that’s realistic that we would achieve that in the next five years, but certainly, we believe we can achieve that in about a 10-year timeframe.
Priyam Shah
Okay. Thanks for the detailed answer. Needed, I’ll be back-in queue. Thank you so much. I wish you all the best, sir.
Operator
Thank you. A reminder to all participants, you may press R and one to ask questions. The next question is from the line of Rohan, an individual investor. Please go-ahead.
Rohan
Hi, sir. Thanks for the opportunity. First of all, I would like to congratulate you for the 40th anniversary of the. Sir, two questions from my side. So first one is, can you please put some light on what will be the revenue mix going-forward by FY ’27?
P. Deepak
Okay. Like I said, it’s a little bit hard to answer that question because we are expecting a decent amount of wins on the export, as I’ve already mentioned. We’re also seeing some amount of good traction on the domestic side on a couple of new things that we are doing as well as some of our domestic customers who want to export but need to buy castings to make their assemblies that they export. So it’s difficult to put a number. I would say the number that we would like to work for is 50-50. I don’t know if that will happen in two years or three years, but if we miss that number because the domestic has grown faster, I’ll be quite happy with that.
Rohan
Okay, sir. Understood. And the next one will be, sir, just wanted to understand according to you, like what would be the key macroeconomic factors anticipated to drive our growth in the coming years.
P. Deepak
So I think, you know from a domestic standpoint, there are two big one segments that we’re in, right? One is MNHCV and more specifically within the MNHCV, we have a greater content that go into tippers. So that will depend, I believe, largely on infra spend, right? So if the government does make a serious investment in infra, I believe that segment will grow and that will have a significant impact on us. So that’s one thing that I will be very closely watching in the budget tomorrow. The second is in terms of rural growth and that would impact tractor sales, which is another key segment for us. So that’s the other thing, right? So if I was to look at what are the macroeconomic factors, it would certainly be infra investment and rural growth.
Rohan
Okay, sir. Thank you. That’s from my side. Thank you, sir.
Operator
Thank you. A reminder to all participants, you may press char and one to ask question. The next question is from the line of Rahil Shah from Crown Capital. Please go-ahead.
Rahil Shah
Hi, sir. Good morning. Can you hear me?
P. Deepak
Yeah. We can hear you. How are you?
Rahil Shah
Yes, hi. Firstly, congratulations on the 40th anniversary. Sir, first question, you said you expect a really strong Q4 year-on-year, right? So if we have to look at the whole year numbers FY ’25, I believe in nine months, you have done around INR920 crores in that vicinity. So how do you expect to close-out the year? Will it be flattish or more or less above last year’s numbers in terms of revenue? And if you could also…
P. Deepak
I think for… Yeah. I think for the full-year, we expect that sales will actually be negative, even though the 4th-quarter compared to last 4th-quarter, we are expecting growth. But I think for the full-year, it’s — there’s still quite a bit of a gap of INR50 crores that I don’t believe that we’ll be able to bridge in this current quarter, but certainly where we will be trying to work for that. So a flattish to a very minor low single-digit growth is what we see in terms of sales for the full-year. In terms of revenue. In terms of tonnage, it will be largely flat. There’s been a reduction in raw-material prices which got passed-through to customers. So from a tonnage perspective, we’ll be — we believe will be largely flat and from or actually slight growth on a tonnage perspective, from a revenue perspective, there’ll be a slight degrowth.
Rahil Shah
Okay. And your margins will also depend on those tonnage or how will they factor out?
P. Deepak
Yeah. So we think certainly compared to where we were in Q3, we would — given the better volumes and the, I would say resumption of export to a closer to normal level, we do believe that our margins in this quarter will be better than what they were in the previous quarter. But again, we’ll have to see how raw-material prices move and all of that. So I don’t want to comment too much on margins. But my expectation is all things being equal, we should — our margins in the current quarter will be better than what they were in the 3rd-quarter.
Rahil Shah
And exports, they offer better margins, correct, compared to domestic?
P. Deepak
Yes. Yeah.
Rahil Shah
Okay. So when you say you are expecting this huge of export order, you have a bit pipeline of a good amount, which you expect to materialize by end of next year. So is it like-kind of fair to say that like a year or like 15 months later, you can get back to those double-digit EBITDA margins.
P. Deepak
That will be the goal. So typically though with exports and with a lot of these more complex products that we’re taking on, it’s usually from the time we start production, it takes us about six months or so to stabilize before we really start a getting to where we want to be.
Rahil Shah
Okay. And you mentioned something like exciting range of new products in pipeline. It was your statement. So can you give any details about these?
P. Deepak
Yeah. So I mean, I think that’s what I was referring to was the new business wins that we are some of which are in development, but the biggest chunk is what we anticipate that we will most likely win within the next 60 to 90 days.
Rahil Shah
That was the bid pipeline you mentioned $60 million. Yeah, that is a part of that.
P. Deepak
Exactly.
Rahil Shah
Okay. Okay. Any FY ’26 revenue top-line — sorry, top-line growth guidance you can give at this moment?
P. Deepak
Not at this moment. Like I said, I think what we are targeting to do is and this will depend on all the factors that I mentioned earlier, we’d like — so maybe if everything works very well, we believe 20% is possible and that’s what we’re working for to get to that 105,000 to 110,000 tonne range. But that would depend on the key factors, the domestic segment doing well, the export segment doing well and all the new products launches being on-time. So which is not necessarily related to us, it’s related to our customers and a whole bunch of other suppliers that they have and their end-customers as well. So if all goes well, that’s what we would like to be able to achieve.
Rahil Shah
Okay, all right, sir. Thank you for your answers and wish you all the best.
P. Deepak
Thank you.
Operator
Thank you. The next question is from the line of Akansh Aarav, an Individual Investor. Please go-ahead.
Akansh Aarav
Hello
Operator
Mr. Akansh, go with your question. Is there any response from the participants, we’ll move to the next. The next question is from the line of Anand Gupta, an Individual investor. Please go-ahead.
Anand Gupta
Sir, do you see pre-buy already happening due to the change in upcoming emission laws?
P. Deepak
This is specific to the US market you’re talking about?
Anand Gupta
That’s right.
P. Deepak
We don’t see that impact yet. I think the anticipation is that we would see that actually in the next calendar year. The emission norm change, I believe is scheduled for the 1st of January 2027. So the anticipation is that it will happen in 2026 more likely. I don’t think there’ll be a significant impact of that in 2025, calendar year.
Anand Gupta
Okay. That’s all from my side. Thank you.
Operator
Thank you. The next question is from the line of Saket Kapoor from Kapoor; Company. Please go-ahead.
Saket Kapoor
Yes, sir. Thank you, sir for the opportunity again. Sir, sir, we have seen some non-core asset sale for the nine months. So are we done with all the land-bank which are for disposal — which were for — to be disposed or what to be sold-out or do we have more assets, sir?
P. Deepak
It’s complete.
Saket Kapoor
Okay. And as Shivasa was mentioning about the modernization where we have put around INR60 crore. So sir, how will — when which units have we put that money and how are our yields going to improve or if you could just elaborate the benefits that we would derive from the same?.
P. Deepak
Yeah. So this particular modernization project was done at our Poneri plant, the biggest — so that’s the biggest chunk of that that you’re talking about. The biggest chunk of it was at our Poneri plant. And the purpose of this modernization that we did at is because if you look at our product mix today, the biggest chunk of our export comes out of our Guru plant. So we wanted to also have that ability out of our Poneri plant. So to increase our exports, specifically, the — we have made this investment in our Poneri plant. So it will be — the new investment will help us grow our export business there.
Anand Gupta
Okay. And sir, what is our take on our units currently? How are the utilization levels there? I think that is the most modern plant built by us
P. Deepak
Yeah. So the utilization levels at Padaparia have now, I think finally come up to about 30% and I think that is — going-forward, if you look at this $40 million to $60 million range of or $25 million to $60 million range of new business that we are looking at, almost 50% of that or 60% of that is actually intended for the Pedaperia plant. So that will make a big difference to the plant.
Saket Kapoor
Right. Sir, you also mentioned about businesses taking new shapes for the domestic industry. We have also seen players like craftsmen and DMW who are into the CNC machining part also looking for backward integration. So if you could just like explain to us sir, how are the — how is the landscape changing with respect to your customers, correct me there, are themselves looking to create the casting and the foundries themselves going ahead. So what is your thought process on the same side?
P. Deepak
So if you look at, I think what they’re doing, whatever their investments into foundries are actually complementary and in spaces that we are not present. They’re not necessarily in spaces. They are not intended to be in spaces where we are already working with them. So that is — so and they are more than customers, the majority of what they do, there are vendors. They do the machining activities for us on a job work basis. So we’ve got an extremely strong relationship with them and we look to grow together. Of course, there are spaces that we are not present and we don’t intend strategically to be present in the at least the medium to term future. And so we don’t have a problem if they invest into those spaces.
Saket Kapoor
Just to happen over itself for the machining part, sir, why are the capabilities not being created by us for the machining segment and why do we rely on for the job work? Are these not margin-accretive line-of-business?
P. Deepak
So I would say they are. But the reason why we chose especially not to focus on those areas and to focus on what we do best, which is the casting is one, we believe that this is our core competence and strength. This is how — what we know to do. And we do recognize that if we want to develop some other core competence, it will request — require a significant amount of investment of not just money, but also time and management attention. The second point is we believe that in these next few years, there is a great opportunity for growth. There are some really interesting things that we are working on this, not just on new business, but even in terms of trying to take manufacturing to the next level. And I think the third point is, so-far, we’ve not had a situation where we’ve lost any business with any customer because we’ve not been able to offer them a fully machined solution. We’re able to use our vendors as — and work closely with them and be able to offer a solution that the customer wants. So we haven’t also lost business. So I think as long as these three conditions still hold, we will not be looking at getting into machining or expanding our machining. We do have a small operation in machining. But if these three change, then we’ll have to rethink it. But at the moment, that’s not on the cards.
Saket Kapoor
And last point about this other income component, sir. You did alluded earlier during the call that it is the rupee depreciation that is what results into the higher realization and that is booked under the other income component. But I think it is quarter-on-quarter it is up by INR1 crore. So is it only the depreciation of the Indian rupee versus the dollar that has translated into the other income component or do we have some scrap and all sales also? If you could just quantify the same. This is a very-high number, INR5.65 crores.
P. Deepak
Yeah. So other income has a variety of other things other than ForEx. The biggest chunk is of course for ForEx gain. There is a variety of different reasons, things that it comes to. But it’s not just the depreciation of the rupee, some of it might be when we do some strategic forward covers and things like that as well. So there’s a variety of things that go into it. If you’ve seen it’s something that’s been relatively there for us for the last several years.
Saket Kapoor
No, what kind of number should be in then, sir, this is a big number because for nine months it is INR12.49 crores. Our — our margins and EBITDA are not fallen in-line, but our other income is have seen a good growth. So just wanted to understand this nature of the line-item and the way forward also.
S. K. Sivakumar
Saket, that is mainly on account of interest on our EBIT deposit plus ForEx income, forex that’s only these two factors.
Saket Kapoor
Yeah. Okay. And last point, sir. On the value-creation exercise, sir, it is very heartening to hear from you that we will land into the top-five if I heard you, top-five players in the in the casting business in times to come and also the order wins which we are anticipating going ahead. Sir, if we take into the value-creation exercise for your shareholders who have the faith on the organization and on the management for since time of listing until today, I think so the returns have been subpar for the investors. So the very short point was that the wait has been very long for your investors and you among them being the largest shareholder. So that was only the concluding mark find that investor value-creation has not happened, although market capitalization over the years for various listed companies have moved up by leap and bound along with good profitability, but somehow the somewhere or the other, the time has been tough for our segment and your investors in particular. So I hope that going ahead, these plans fructifies and that translates into a actual value-creation for your investors also. That was my thought, sir, which I would like to share this.
P. Deepak
So let’s — let’s hope that with the longer wait, the fruits will be sweeter. That’s all that I can hope for along with you.
Saket Kapoor
Yes. Thank you, sir. And all the best to the team, sir, going ahead.
P. Deepak
Thank you, Saket.
Operator
Thank you. As there are no further questions from the participants, I now hand the conference over to Mr P. Deepak for closing comments. Over to you, sir.
P. Deepak
Yeah. Thank you very much. I just wanted to thank everybody again for your trust in us and for being part of our journey. We look-forward to sharing our success with you in the next earnings call. In case you have any queries post this call or anything has remained unanswered, please connect to our IR team at Ernst Young and thank you very much. Bye.
Operator
Thank you. On behalf of Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.