Nelcast Limited (NSE: NELCAST) Q4 2025 Earnings Call dated May. 15, 2025
Corporate Participants:
Unidentified Speaker
Abhisek Bhatt — Investor Relation
Deepak Reddy Ponnavolu — Managing Director & Chief Executive Officer
Sivakumar — Chief Financial Officer
Analysts:
Unidentified Participant
Raman KV — Analyst
Vidit Shah — Analyst
Anusha Singh — Analyst
Ria Mehta — Analyst
Karthik Keyan V K — Analyst
Ankur Kumar — Analyst
Saket Kapoor — Analyst
Ajit Sethi — Analyst
Soham — Analyst
Sicomoro Advisors — Analyst
Shubham Zope — Analyst
Nirmal Shah — Analyst
Presentation:
operator
Ladies and gentlemen, the call will begin shortly. Please stay connected. Thank you ladies and gentlemen. Good day and welcome to the Nelcast Limited Q4 and FY25 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 assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone. I now hand the conference over to Mr. Abhishek Bhatt from E&Y Investor Relations. Thank you. And over to you.
Abhisek Bhatt — Investor Relation
Thank you. Good morning everyone. On behalf of Nelcals Limited, I welcome you all to the company’s quarter four and FY25 earnings conference call. You would have already received the results and investor presentation which is also available in the 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. S.K. Shivakumar, CFO of Nelcast. Before we proceed to the call that anything said on this call during the course of interaction and in our collaterals which reflects the outlook towards the future or which should be construed as certain forward looking statement must be viewed in conjunction with the risk the company faces and may not be updated from time to time.
More details are provided at the end of the investor presentation and and other filings that can be found on our website www.nelkas.com. if 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 collateral. With that, I would like to hand over the call to Mr. P. Deepak. Thank you. And over to you sir.
Deepak Reddy Ponnavolu — Managing Director & Chief Executive Officer
Thank you. Good morning and thank you all for joining today’s call to discuss our performance for Q4 and FY25. FY25 has been a year of mixed experiences for us. We celebrated the 40th anniversary of Nelcast and we also saw a robust recovery in performance during Q4 of FY25 following a period of consolidation. The first nine months of FY25 were challenging due to the macroeconomic events that were happening world over and in India. But we managed to weather the storm. However, Q4 FY25 brought a significant rebound in both our top line and bottom line along with enhanced operational profitability and a positive trend in our export business.
We are optimistic that this growth will continue in the future. On the exports front, we have demonstrated strong performance with a remarkable 21% year over year growth in Q4 of FY25. Currently we do not anticipate any significant risks from the tariffs that are imposed by the US which is a major market for our exports. While there has been a lot of news about the duties, we strongly believe that the duty as applicable will be borne by our customers and resulting in minimal impact on us. Our existing business will continue without any major disruptions. Our customers are not halting their new projects either.
We have made also steady progress in Europe. Four new customers have started the process of approving our plans which include fairly stringent audits. This is an investment in time and resources by these customers and communicates serious interest. These are significant advancements and we are optimistic that these relationships will lead to new business opportunities in the coming months, further strengthening our position in the global market. In terms of product development, we are entering an exciting phase. We have several innovative products in the pipeline, each at different stages of development. One of the key things to note is we are developing a new high value product that weighs nearly 500 kgs which marks a significant advancement from our current product range.
This type of products will encounter minimal global competition and command high realizations as there’s only a few players worldwide capable of manufacturing such products. This unique position provides us with a distinctive competitive advantage and enables us to capture meaningful market share as we ramp up production in this new segment. This will also add diversity to our exports with more off highway in addition to the commercial vehicle and light vehicle that we are already in. Looking ahead, the company is seeing promising signs and we believe that the growth momentum will continue leading to a strong year ahead.
Our confidence is supported by a robust order pipeline for value added products which will drive growth and enhance profitability bringing us closer to our goal of achieving that EBITDA of Rs.15 kg. Many of the new products will be produced at the Pettiparya facility which will significantly improve our utilization in FY26 and further enhancing our return ratios in the future. We’re very excited about the coming years, diligently working towards our goals and we are expecting substantial growth ahead. Thank you and I look forward to our continued success. Lastly, commenting on the financials, the total income for Q4 of FY25 was at 334.4 crores compared to 299.2 crores in Q4 of FY24 and the total income for the year stood at 1268.8 crores compared to 1281.2 crores the exports for FY25 and FY24 were both 445 crores.
The EBITDA for Q4 of FY25 was 34.3 crores compared to 19.3 crores in Q4 of FY 24. For the full year, EBITDA stood at 105.6 crores versus 106.5 in FY24. And profit after tax during Q4 of FY24 was 13.5 crores compared to 5.1 crores in Q4 of FY21. And for the full year at 37.3 crores in FY25. Thank you. I will now open the floor to any questions you might have. Navya, we can now open the floor for any questions.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press STAR and one on their touchtone 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. We take the first question from the line of Raman KV from Sequent Investment. Please go ahead.
Raman KV
Hello sir, can you hear me?
Deepak Reddy Ponnavolu
Hi. We can. We can hear you. There’s a little, was a little bit of background noise, but we can hear you. Yes, sir, please go ahead.
Raman KV
Now. Can you hear me?
Deepak Reddy Ponnavolu
Yes.
Raman KV
Okay. I just wanted to understand what is the current capacity and at the company level and what is the capacity utilization?
Deepak Reddy Ponnavolu
Sure. So the current capacity at the company level is 160,000 tonnes a year. And I think what is a fair expectation of what can be achieved is maybe about 80% of that. Currently. If you see for the year we were at about 83,600 tons.
Raman KV
80.
Deepak Reddy Ponnavolu
83,600.
Raman KV
Okay, sir, so I just follow up with this. So you said The EBITDA per kg will increase from 14.5 to 15 in the coming years. So will it be driven mainly by the increasing the capacity utilization which is currently at almost 50, 52%.
Deepak Reddy Ponnavolu
So I think the move towards the 15 rupees per kilogram that I was talking about is I think if you look at it from full year perspective, not just the quarter perspective. I think from a full year perspective we were at about a 12.63 for the full year. That’s the number that even though the fourth quarter was a better quarter, I think we look at stability over a longer period of time rather than 1/4 up. And one quarter down. So that’s the number that we want to achieve for the full year going forward in the near future.
Raman KV
For the full year as like for FY26.
Deepak Reddy Ponnavolu
I think that it would be. I think we believe that somewhere around FY27 that is certainly what we have been communicating and we’re still confident that we’re on that front.
Raman KV
15 per kilogram will be by FY27. Right. So, and the second question is, so what percentage of total revenue is your value added product as of now and going forward, what’s your aim go, let’s say about two, three years down the line? How much are you trying to increase the contribution of value or added products?
Deepak Reddy Ponnavolu
So I think there’s very different ways of defining value added product in terms of the complexity of the product that we are doing. I would say that it’s not a binary thing where you say something is value added and something is not. It’s a scale. Some are slightly complex, some are incredibly complex. So I think it’s more about just an overall move towards the more complex parts. And we see that happening in two ways. One, with the new business that we are winning both for the domestic and the export sector. But the second is also the existing products.
As the customers are trying to optimize the designs, some of the existing products which might not be as complex are getting one or two levels higher up on that complexity scale as we are trying to optimize the design, which I think is a big advantage for us.
Raman KV
And my final question is with respect to the energy cost saving which you mentioned that you will be using the solar, you are planning to install solar plant, which will help in cost optimization. And when it comes to power and fuel as a percentage of total revenue for SR25, it was. Can we expect. This to reduce to 100bps?
Deepak Reddy Ponnavolu
So this one. So when we look at our power consumption, obviously energy is a pretty big part of or cost after raw material. And this is I think fairly obvious because we are melting iron at a temperature of about 1,500 degrees Celsius. So given that energy is going to be a big chunk of our cost, we have worked quite closely for many different reasons, one of course being the fact that this is the biggest impact that we believe we have on the planet from a sustainability standpoint. And we’ve managed to reach about 65% renewables. We would like to increase this number from 65% to 80% and we would like to do this parallel.
We would also like to be increasing our production. So I think that increases quite a bit in terms of what we will be doing in the future. But we will also have, in addition to the new investments coming online, we believe that our capacity utilizations also will go up and therefore will also require further investment. So difficult to pinpoint to a number on this, but certainly this is an area that we are focused on.
Raman KV
So can you give any guidance with respect to the capacity utilization in the coming year?
Deepak Reddy Ponnavolu
Yeah, so I think it’s hard to give a clear guidance, but we believe that we will be moving because it depends on how the overall market is going to look like. But we believe that we should be able to get to a number that’s perhaps 20% higher than the current year. Right. FY25, what we believe that we are, we expect to see in this year, based on the projections that we have right now from our customers, is about, we’d be targeting about a 20% growth this year.
Raman KV
Okay, thank you, sir.
Deepak Reddy Ponnavolu
Thank you.
operator
Thank you. Next question is from the line of Vidit Shah from Spark Capital. Please go ahead.
Vidit Shah
Hi, thanks for taking my question. Just firstly to clarify, this 20% higher. Number that you mentioned previously is on. Volume terms, is it correct? In volume terms?
Deepak Reddy Ponnavolu
We got it.
Vidit Shah
So my first question was, you know, our margins have been fairly volatile over the past two years and my understanding was that we pass most of, most of the cost, raw material cost fluctuations to the customer. So I understand that the shift in mix towards export and domestic is a little bit of a driver. But particularly this quarter, we’ve posted really, really strong margins at 14.8, whereas the export mix hasn’ changed materially. So could you just help me understand what is causing this volatility and how do we look at margins going forward?
Deepak Reddy Ponnavolu
Yeah, so I think from a volatility standpoint, so part of the reason I was also clarifying kind of on a stable annualized basis is I think if you look at the year as a whole, there might have been variations that were there in raw material prices that do get passed through at a lag. So the lag effect does have positive and negative consequences of it. So that’s why we look at it when we look at it over a period of a year, especially this year, it was a reasonably stable year from beginning to end, even though there were a few moves that happened through the year.
So I think that’s one talking about the margins for the year and some volatility in the margins because it’s not only the raw material prices that are getting passed through it’s also the freight costs that are getting passed through on the export front. So there’s there also there is a little bit of a lag effect that’s there coming to the performance of the fourth quarter and the better numbers. Part of why we believe that this was a good quarter was because we did see that rebound in exports compared to the third quarter. Third quarter, I think primarily driven by U.S.
elections, there was quite a bit of a slowdown in our demand for the products into the US So there was in the third quarter quite a bit of slowdown. I think what we saw in fourth quarter was more a return to normalcy from that front. So if you look at it in terms of the growth, the biggest chunk of the growth, whether you look at fourth quarter of last year or third quarter of this year, with respect to the fourth quarter of this year, the biggest jump has happened in terms of the export. Right. And that’s helped also drive the margins up a little bit.
Vidit Shah
Okay, got it. I think with your export versus third quarter of this year versus fourth quarter of this year is broadly flat. Right. I mean I think the growth in exports is about 5% and margins have, you know, shot up by about 3 rupees.
Deepak Reddy Ponnavolu
Third quarter versus fourth quarter. Third quarter export sales had actually come down quite significantly because of, I think primarily led by some uncertainty around US election. So they were down to about 90 crores, whereas in the fourth quarter they’re up to about 128 crores. 128.8. So there’s a significant jump between third quarter to fourth quarter on the export number.
Vidit Shah
Got it, got it.
Deepak Reddy Ponnavolu
Even though for the full year it was flat, but on the third quarter was really, you know, had a big slowdown in the fourth quarter. Had a big jump up.
Vidit Shah
Understood. And the new high value product that you mentioned in your opening remarks, you know, the 500 kilo product, any further color you can add to it in terms of its use case? I know you said it’s a off highway product, but you know, the sort of demand or the market size that we have and the competitive trend globally. Intensity globally.
Deepak Reddy Ponnavolu
Yeah. So that product is the end use of the product is in a tractor and the high end tractors. So these are the tractors that use tracks instead of wheels and tires. The customer that we will be supplying to is located in the US and they will assemble the entire axle and supply the axle to their end customer. So this is an existing product that’s already running with the product with the fastings being made either in some of the Cases in China and in some of the cases within the U.S. so this is a kind of resourcing to us.
And I think in total they are looking at pretty good volumes, I think for a product of this size. And yeah, I think it will be a fairly good business for us. We’re looking at samples within the next three months of the full range of products. It’s not just one single part. So the full range of products will be over the next three months or three to four months. We will be submitting samples to customers and we expect to be in production around the end of the year.
Vidit Shah
Got it. And if you could just help help us understand the cost differential between, you know, manufacturing and Nelcas versus China and the usa, given that the tariff environment is still a little volatile and uncertain, would be just great to understand how much cheaper we are compared to the US and China in terms of manufacturing.
Deepak Reddy Ponnavolu
I think in a product like this, these kind of products, I am quite certain there would be at least a 30, if not a 40% price differential on machine parts to casting. Casting plus machining could and transport everything put together. My belief is that that number is in the 30 to 40% range and it might be somewhere in the 25 to 30% range for maybe some of the smaller, higher volume products. But that’s my understanding. I think China, if there is an additional 20% tariff that’s put on, I believe that we would be highly competitive, maybe a better price than even China.
Vidit Shah
Okay, understood. Thanks for these clarifications and all the best to get back into for further questions.
Deepak Reddy Ponnavolu
Thank you.
operator
Thank you. We take the next question from the line of Anusha Singh from Equity Capital. Please go ahead.
Anusha Singh
Hi. Am I audible?
Deepak Reddy Ponnavolu
Yeah, Anusha, you’re audible.
Anusha Singh
Since my first question to you is since we currently have machining work done by Kraft, are there any future plans to bring this in house?
Deepak Reddy Ponnavolu
So at the moment, no, there are no any significant investments that we are going to make into machining. We do have multiple vendors, including the one that you mentioned that we have great relationships with and that have been very reliable partners for us. So at the moment we do not see that as one of our priorities, given what we believe the next two, three years hold for us in terms of opportunity and we do not want to lose focus on the opportunity we have ahead.
Anusha Singh
Okay. And my second question would be, are. There any new customer wins on the export side that you can share with us?
Deepak Reddy Ponnavolu
Yeah, so one of those is that particular product range that I talked about. So there’s which goes into the tractor segment. So but overall, I think what we are looking, what we have won in terms of new business in the last three months or last three and a half months or so is something in the range of about maybe about $30 million or so of new business. And there’s a lot more that is under discussion and under quite serious discussion. So makes us very, very optimistic for the future and the pipeline that’s going to be there.
We believe the next two, three years will have significant growth that will happen both in export and domestic. And we are gearing up for that.
Anusha Singh
All right, thank you, sir. And all the best.
operator
Thank you. Participants who wish to ask questions may please press N1 at this time. Next question is from the line of Ria Mehta from Malabar Investments. Please go ahead. Hello.
Ria Mehta
Thanks for the opportunity. Thank you for the opportunity. So my question is what are the new orders which are under development and can you share the competitive background of the scene?
Deepak Reddy Ponnavolu
Yeah. So I think the positive thing is a lot of the new products that we are developing are more complex products that are either heavier in weight, larger in size, or have some degree of complexity to it. A lot of this actually is coming from the off highway sector. I would say more than 50% of our new orders right now that we are working on are coming from the off highway, which if you look either in the US or in Europe, they will categorize even tractor as off highway. Right. So I’m using that same categorization come into the off highway sector, which I think is quite different from what we have seen in the past.
In the past, our biggest growth has come from the commercial vehicle, even from the export. And then we’ve made some inroads into the light vehicle space as well. So now I think it’s a good diversification that’s happening as well into our.
Ria Mehta
Okay, okay. So one more question. During Korea plant and can you give the weight on teams?
Deepak Reddy Ponnavolu
You mean in FY25,
Ria Mehta
26 means.
Deepak Reddy Ponnavolu
We believe that, that we believe that that number will be higher than where we are today. So that number will be around 40% is where we expect to exit for Pettapadi utilization. And you know, we are hoping that, you know, we’ve got a good pipeline of orders. FY27, we’ll be targeting to actually get to get beyond 60%.
Ria Mehta
Okay, thank you so much, sir.
Deepak Reddy Ponnavolu
Thank you.
Ria Mehta
That’s all from my side. Thank you.
operator
Thank you. Next question is from the line of Karthik VK from Suyash Advisors. Please go ahead.
Karthik Keyan V K
Yeah, good Morning Deepak. Thanks for the inputs. A couple of clarifications. One is have you been able to explicitly discuss tariff pass through with your customers and if you can share their mindset and I’ll also ask you the second question, you can answer both outside of usa, how is the competitive dynamic developing? Has that increased by any chance because of what is happening in usa? Some clarifications will help.
Deepak Reddy Ponnavolu
So on the first one, in terms of the tariffs, there have not actually been any serious discussions with customers. You look at how the tariffs are put in, they are intended to be for passenger cars as well as light trucks. If you look at our business, a very small portion of our business is in the light truck space. We are more in the heavy truck space. So those are more subject to the reciprocal tariffs that are there, which are currently on hold for 90 days and at a lower 10%. But even that 10% has not yet become applicable because that’s applicable for shipments that have saved past the 9th of April.
So we’ll see how that part of it pans out. But at the moment we’re not really seeing anything from our customers coming back to us for to share the pain or anything like that. At the moment we’re not seeing that. But you know, this is something I think as I mentioned in my opening remarks that we do see as a pass through. And you know.
Karthik Keyan V K
I heard your opinion from one of the webinars as well, but I was just trying to understand if anyone has spoken to you specifically. That’s really what I was trying to understand.
Deepak Reddy Ponnavolu
No, nobody. It’s not in specific because I think perhaps those conversations might happen in the next month But so far.
Karthik Keyan V K
Sure, sure. And outside of usa, have you seen competitive intensity increasing? Have you heard anything, felt anything? That would be more interesting because it.
Deepak Reddy Ponnavolu
Seems, I think the Chinese are actually quite active in terms of and have been aggressive for a while in Europe, which is a big market. I think that’s a fairly we’re not seeing anything drastically change in the last few months. I think people are just trying to avoid making any drastic decisions, especially in these 90 days or so.
Karthik Keyan V K
Just to get one thing right. So any program that you work for you will be assured of a certain amount of business at least for the life of the program. Right. You can’t have lateral people being brought in through the program right in the middle of the program. Is that a reasonable thing to remember?
Deepak Reddy Ponnavolu
Typically. Okay, there’s two ways to look at it. One, one way to look at it is it’s actually very expensive for customers to do product level testing and validation. So unless there is a really, really large cost differential that’s there, it’s just not worthwhile for them to even think about it. So that’s one side of it. So it’s the motivation part of it. The second part of it is I think in terms of agreements and contracts that are there with some of the customers, we do have contracts that assure us a certain percentage of business which might even be 100%.
And with some customers, while we don’t have that contract, we believe it’s very unlikely that they try to resource the business given that it’s quite expensive for them to test and validate and approve. And at the same time we don’t believe it will be worth their while because we don’t believe there’ll be significant cost savings coming out of it.
Karthik Keyan V K
Sure. If you’ll allow me one last question and then I’ll get back in the queue. At Pedda Pariya. What would be the profitability level? Let’s say 40% utilization and 60% utilization.
Deepak Reddy Ponnavolu
I think that’s a little of a hypothetical question given that the product mix is quite different and we are adding quite a bit of this off highway product mix into that plant. But I think we would be very, very happy to be at the 60% but it will definitely have quite a bit of positive impact on the overall company.
Karthik Keyan V K
Thanks for answering and very appreciative.
Deepak Reddy Ponnavolu
Thank you.
operator
Thank you. Next question is from the line of Ankur Kumar from Alpha Capital. Please go ahead.
Ankur Kumar
Hello sir. Congrats for a strong set of numbers then. My first question is on the export side. So we did 445 crore of export in this year which was which you said is largely flat. So what is the outlook for FY26? How much of total export sales can you expect?
Deepak Reddy Ponnavolu
So what we are seeing is if you look at what the picture looks like, we’re seeing relative stability in spite of all this noise that we’re hearing. The scheduling that we are receiving from our customers seems to be reasonably flat. There’s no great excitement either up or down in terms of the numbers. So we expect the first half of the year to be largely in line with FY25. Right. So we don’t really see that in the current quarter or the next quarter that there will be any kind of big spikes in terms of export volumes.
But then I think as we come into the third and fourth quarter, as our new product development happens and the ramp up happens on that, we will see growth. The pace of the ramp up will determine the growth, but it’s a little harder to comment on it. But we do expect to see fairly solid growth in the second half, perhaps more so in the fourth quarter. But it will be a ramp up stage and some of that will determine on whether our customer, their projects are getting on time or delayed and all of that. So little harder to project that.
But we do expect to kind of make the next jump in exports and in a gradual way. And that will start during the second half, more so in the fourth quarter.
Ankur Kumar
Got it. And sir, on this EBITDA per kg thing, if I look at slide number four, export was similar number in second quarter also. But our EBITDA was 11.8 rupees per kg which was largely similar for last four quarters. But this has jumped quite substantially to this quarter. Can you comment? Why has that happened in so much?
Deepak Reddy Ponnavolu
Yeah, so I think actually if you look at third quarter that was I think a little bit of a lull. Right. I think that was mainly because of US elections. Otherwise we would have so a little bit more weight on what’s happening. The inventory levels of automotive kind of ballooning up a little bit in terms of the finished goods that the OEMs were carrying. So they cut their productions in the third quarter because of that. I think fourth quarter has been a little bit of a return to normalcy. We have not really seen anything change in terms of.
We’ve not really seen anything change right now either into the first quarter. But time will tell if you look at the production standpoint overall also the production quantity compared to the second quarter was around 22,000 and in fourth quarter was more than 23,000. So there was some overall increase in production as well that did happen in the fourth quarter. And then there’s of course also a few effects of raw material as well as I think the second quarter was also when we had peak freight costs as well that were there.
Ankur Kumar
Sure sir, thank you and all those.
operator
Thank you. We take the next question from the line of Raman KV from Sequent Investment. Please go ahead.
Raman KV
Hello sir, I just have follow up questions. So in the PPT you mentioned that you will be shifting from manual module.
Deepak Reddy Ponnavolu
And Mr. Raman, there’s some background noise. I’m not able to hear you again. Yeah, I think this is better now.
Raman KV
So. Yeah, so in the PPT you mentioned that you will be shifting from manual molding to fully automated automating, automated molding and there will be some plant. What will be the cost incurred for the bottlenecking and shifting from manual to automation. During this year.
Deepak Reddy Ponnavolu
Actually just completed all our projects of shifting from manual to automated. So that’s all of that is already completed. Now in terms of debottlenecking, there will be investments that will be more specific to new business wins and for better material handling and things like that. Overall, I think over the next, over this FY26 and FY27, I think we expect that from a Capex standpoint we’ll be roughly at the rate of. Of depreciation. Right. So depreciation I think is about 24, 25 crores a year. So roughly that’s what we expect that we will be investing in the, in this, in the next year until we get to that, you know, 80% ish capacity utilization.
Raman KV
Okay sir. And sir, with respect to the three plants which we have, you said the penal plant is at 40% utilization. You expect it to go to 60%. And what about. Sir, the Fertifaria plant? Yeah. And so what about the remaining two plants? What’s the capacity utilization and what’s your expectations for the coming year?
Deepak Reddy Ponnavolu
So our Puneri plant is actually currently operating close to 90% and our Guru plant is operating at about 55%.
Raman KV
So basically we are lagging in Paria and the Grule brand, right?
Deepak Reddy Ponnavolu
Yeah, that’s. That’s correct.
Raman KV
Okay sir, thank you.
operator
Thank you. Participants who wish to ask questions may please press star and one at this time. I repeat to ask a question please press star and one. Now next question is from the line of Saket Kapoor from Kapoor and company. Please go ahead.
Saket Kapoor
Congratulations to the team for very strong set of financial and operational numbers. Sir, if you could firstly give some more color. As Deepaki, you were mentioning about some lower input cost also factoring in for Q4. If you could just give us some understanding what led to us posting this. 14.8 rupees per kg EBITDA per kg the factors.
Deepak Reddy Ponnavolu
Yes. So I think we saw fairly stable input costs. Only small difference that I think the other one that we saw was in terms of the growth in export. I think we had a very good product mix actually that was there in Q4. And I think overall the production also was exceeded 23,000 tonnes. I think that also had. So I think overall really positive quarter with I think better utilization, good exports, good product mix, slight raw material, nothing serious. But yeah, I think overall fairly good quarter that way.
Saket Kapoor
So it was totally an operational performance with higher tonnage. I think 23,600. You mentioned for Q4. 23,100 23,100. So we did 83,600 in totality. So Q4 was the exhibited the highest energy.
Deepak Reddy Ponnavolu
That’s correct, yes.
Saket Kapoor
Okay. And the taking factoring into I think so the current domestic preparation. We had other players also. They’re mentioning that from the MSCB segment area there are a lot of situations or the order booking is very strong. So are we also getting the same filler in terms of the the MHCB segment supporting the the execution going ahead and also in terms of 23,100 as the base and you guiding for a 20% growth in damage. What should be the expected trend for the first half and the second half? Can you if you could give us some color of how the synergies would be going ahead?
Deepak Reddy Ponnavolu
Yeah, so I would. What I would. First question was on the MNHCV side, right. We are actually seeing fairly good positive signs on the MNHCV if you look at April and at least you know until the first half of May. So typically if you look at, you know, from a standpoint, the April, May, June is usually when the MNHCV is at the slowest and Jan fell March is when it typically peaks out. So we are seeing reasonably strong MNHCV numbers even in April and May. So we are hopeful that this will continue through the year and if it does then I think certainly that’s part of our why we believe that MNHCV will help drive some of those volume growth.
Tractor also seems to be fairly strong if you compare it with last year so far. But I think the tractor sales can be highly volatile and very concentrated during the festival season. So it’s a little harder to put a finger on what will look like over there. I think the other part of it is of course as I mentioned the new product developments than the export growth that we are expecting in the second half. We think this should push us beyond the 100,000 tons this year from the, you know, 83,600 tonnes or so that we’ve done in the past year.
Saket Kapoor
And to the second question, sir, how should the tonnage be going ahead for if you could give us some color because there are lot of graduation also sir, you pointed out that 14 closer to 15 rupees would be our target for FY27. So with this closing for this quarter at 14.8 this but we are already there at the vicinity. So why are we taking another one year to exhibit the team? That means there would be a declining per kg for the time period. But what are we Trying to explain when we are giving the hurdle of FY27 to achieve this 15 rupees, I.
Deepak Reddy Ponnavolu
Think it’s a little bit more about market volatility in terms of the margins that we’re trying to consider. Also a little bit of understanding of maybe how material prices and what that impact might be. But I think more than anything else you were asking about the volume, I think typically it’s fair to assume that it will be above maybe 45. A little over 45% will be in the first half and maybe about 55 in the second half. This is I think a fairly normal kind of a thing in terms of what we typically would see in a year, about 45% in the H1 and 55% in H2.
Given that MNHCV will peak out a little bit more in H2 and bigger portion of our sales and the tractor which we have out in H1 and you know, typically mid third quarter.
Saket Kapoor
Right, sir, and your comment on this 15 rupees part when you are.
operator
Sorry to interrupt but maybe. Please request you to return to the queue for follow up questions. There are several of the participants waiting.
Saket Kapoor
Yeah, yeah, definitely I will honor that. But just the concluding remarks on sir and I hope are given an opportunity again.
Deepak Reddy Ponnavolu
I think it’s more about market volatility and raw material prices. We’re just trying to watchful of that.
Saket Kapoor
Okay. And joining the queue, I hope given an opportunity again before the call concludes. Thank you.
operator
Thank you. We take the next question from the line of Ajit Sethi from Eco Quantum Solutions. Please go ahead.
Ajit Sethi
Thank you for the opportunity. I just had one question. Can we expect optimum capacity utilization by FY27?
Deepak Reddy Ponnavolu
Yeah, I think certainly that’s what we believe. And with the business pipeline as well, I think the business side will support, I think the operational side also will be there. So we believe that we should be, you know, close to that 80% target that we have that we have for the capacity transition.
Ajit Sethi
Thank you.
operator
Thank you. Next question is from the line of Soham from RV Investments. Please go ahead.
Soham
Thank you. Sir. Am I audible? Sir, if you could help me understand the margin differences between exports and domestic.
Deepak Reddy Ponnavolu
It’s not a. I mean obviously it’s very different depending on the product of domestic versus export. But I think by and large as a guideline I think we, we can say that, you know, domestic is maybe somewhere around 10 rupees a kg and export is closer to around 20. Obviously there are exceptions to that in both directions.
Soham
Okay, sir. Man, that is more of a product Mix thing. If you quantify the orders you have. In hand right now or you know. The order book or inflows you are getting right now
Deepak Reddy Ponnavolu
. Yeah. So I think if you look at the way that it works is we typically will have an open audible, open purchase order from the customer and they give us what they give as their schedules of forecast and with a much shorter firm period. So based on current schedules we are seeing, I think we believe that Q1 should be largely in line with Q4 in terms of the number of volumes. That’s what we are seeing as of now. Of course, given that it’s schedule based and there are no, you know, orders that are far out.
It’s all subject different.
Soham
Understood. And you just said that we should be aiming for optimum utilization by FY27. So when would we require that 50,000 brownfield? We can, we have a potential at our existing plants which you have mentioned in your presentation. When will we should be requiring that? So I think we look at that.
Deepak Reddy Ponnavolu
Probably we might require that for maybe FY28 or so is what we think. So we’ll look at that maybe in the latter half of FY27.
Soham
Okay, sirant, thank you. Thank you.
operator
Thank you. Next question is from the line of Shubham Zope from Sicomoro Advisors . Please go ahead.
Shubham Zope
Thank you for the opportunity. Conversation from a good set of numbers. So my first question is that. So in your previous convoy we mentioned that the update on the Europe that some client have visited our plant and the meaningful deliveries for Europe will happen in FY27. I just wanted to know that given the global uncertainty now happening, is there any change in that or is there any opportunity to increase our exposure in Europe? That is my first question.
Deepak Reddy Ponnavolu
Yes. So I don’t think that the US is really not a significant supplier of castings issue Europe. So at least in the casting space we don’t really see that this will have any, you know, any real impact that’s happening because of US tariffs or anything else like that. I think the bigger change is really coming out of, you know, the structure within Europe in terms of potentially some bankruptcies or something like that. That being said, so I think we’ve gone through in the last year, we’ve really gone through a part where we’ve started meeting customers, building relationships.
They’ve come visited us. Now they’ve kind of gone to the next level which is actually having our facility audited and approved into their list of approved suppliers. So that is what is currently going on and perhaps the next we expect the next few months, maybe the next six months or so, we’ll have a lot of that happening. And once that’s there, there are absolutely no barriers for them to actually release orders to us for developing new parts. So we believe that we hope that those orders will come through by the end of the year for product development, given testing, for timelines and all of that, probably mid next year or so into actual getting into production.
And then obviously when you win a few and you do well, you win a lot more. So we’re quite sure that will grow quite significantly on the basis of performance.
Shubham Zope
Okay, thank you. And my second question is that. So as per your press release which you gave yesterday on the exchanges, you are expecting that your FY26 revenue will be grown at around 10 to 15% as compared to FY25. And as in a con call you mentioned and also in previous con call you mentioned that you are expecting a tonnage growth of 20%. So are we expecting a realization decrease in next year? Because as far as our understanding that generally we are targeting a high value end product which will have a high realization. So I just wanted to get your context on that.
Deepak Reddy Ponnavolu
So I think it’s just more about being. I think raw material prices can have significant effect. And given the trade war that’s currently happening, there’s a lot of uncertainty on raw material prices. So I think in terms of top line, that’s the only reason that we kind of considered it a little bit on the lower side, considering potentially maybe what might be the worst case scenario of raw material prices into revenue.
Shubham Zope
Okay, thank you. Thank you so much. Go back to the Q.
operator
Thank you. We take the next question from the line of Saket Kapoor from Kapoor and Company. Please go ahead.
Saket Kapoor
Yeah, thank. Thank you sir, once again for the opportunity. Just a second. We have seen our capital work in progress being capitalized closer to 40, 45 crore. So if you could, in fact, for the consolidated level it is closer to 53 crores. So if you could just give some explanation what has led and which are the projects that got capitalized for the period ending March25.
Deepak Reddy Ponnavolu
Yeah, so the big one we capitalized was our Paneri plant. We had done the modernization of the second line. So that was the big project that we had done over there. And that’s what was capitalized. I think that’s what you’re referring to in the sandbound. Right.
Saket Kapoor
Okay. So this modernization will lead to more efficiency and thereby contributing to the bottom line. That is what the.
Deepak Reddy Ponnavolu
Yeah. So the biggest effect of this is going to. It’s going to give us a better product mix because the current if you see we had one automated line and. And there was a manual line that was hardly used in Puneri. So it limited what we could do in terms of our exports from Puneri. So almost all of our exports were driven purely by the Kuru plant. Now with this we believe that there will be significant ramp up of opportunities in terms of export for the Ponheri plant as well.
Saket Kapoor
Okay. And sir, for the year as a whole you mentioned that 10 edge growth of 20%. We might be hitting the 1 lakh number or slightly above than that. What should be the contribution of export from the total I think to 440 was the number 445. What was the number for FY25 sir, what should be sent me in in terms of export contribution to the total pie for FY26.
Deepak Reddy Ponnavolu
So I think export will maybe be slightly more. Right. So we’re currently at about a 36 ish. 35, 36% number in terms of percentage of revenue. We expect there’ll be some small increase in that. So it will still be somewhere in that 35 to 40%. But I think we’ll start to see towards Q4 that there will be much greater growth in exports. I think that’s our expectation. Hard to put a number right now because of the new product launches and the ramp up which has degree of uncertainty to it. But we believe we should be in quite a good exit the last year.
Saket Kapoor
Okay. This week the line item for finance cost. This, this line item has remained on the. Always on the increasing trend. So what is, what is the thought process of the management in terms of. Is it the increased business volume that will commensurate to this higher increase in finance cost or how should we look at it? This number now this is closer to 10 crore on a quarterly basis.
Deepak Reddy Ponnavolu
Yeah. So I think in terms of finance costs some of it is driven mainly by working capital. And as we the growth happens there will be some increase that will be there in working capital. However we do intend to reduce what our term loans are as we pay them off. So I think overall know we’d like to keep it fairly stable. Not have much of a much of a change to that number.
Saket Kapoor
Absolute number or as a percentage of the profits. What should we factor in? Sir?
Deepak Reddy Ponnavolu
Ideally I’d like as an absolute number I’d like it like to keep it as constant as possible but I mean recognizing the fact that you know the sales growth happens quite significantly that there will be coming capital. Right. But we will also parallel reducing our long term debt as well. So I think as an absolute number our goal will be to keep it somewhat similar in the same ballpark as we are.
Saket Kapoor
Only two small points. And I joined that. You firstly said do we see this a secular trend in the casting business not only pertaining to kernel cast developing this complex a product of 500kgs or there’s a secular change in the carting segment altogether wherein we are seeing disproportionate opportunity both in the domestic and the export market or is it only curtailed to us having developed that product profile especially I think of the portfolio unit which we are on going ahead. If you could just outline towards the basis or the genesis of this improved performance whether there is a significant change in the underlying casting business altogether for the industry as a whole.
Deepak Reddy Ponnavolu
Yes, I mean I think there are opportunities for the industry as a whole. I think. I think we’ve got some better opportunities than the industry mainly because of the pedopharya plant. And while it has been a challenge over the last four and a half years or so, I think where we believe that we are now at the stage where we see the light at the end of the tunnel. So that’s something that we are quite excited about, giving us some new opportunities with better realizations. But as an overall I think there are opportunities for everyone in the industry.
Saket Kapoor
Okay, thanks again to the team. And also we have proposed to increase the dividend payout also. That also gives confidence to be investing community on your on your approach towards your shareholders. So I congratulate the board for upping up the dividend payout also. And Matthew said When you mentioned 14 point, what I am trying to understand is 14.8 per kg for the quarter 4 is now 1 not is of a one off item. It is all the operations there. It is all the higher tonnage, better absorption of cost and hence the flow to the profitability.
And for an average of 12.6 depending upon what the conditions are today, we should be in a very good position to be higher than this average number for this financial year. Although we are very, very, very quarter one is only 45 days. But taking into account the background or the setup we have for the industry, we should be pursuing in at a higher EBITDA per kg for this year also which should not be a one off is what my thought was. Correct me there.
Deepak Reddy Ponnavolu
That is what we’re working for. And I think the product mix I think was Quite good in Q4 between the mix of also tractors being a little bit lower, commercial vehicles being a little bit, a little higher, exports being quite strong. Obviously the product mix is not the same in this quarter, but we will certainly aim to do well on the EBITDA front.
Saket Kapoor
Okay, sir. Thank you, sir. And all the best to the team. Thank you.
operator
Thank you. Participants who wish to ask questions may please press star and one at this time, I repeat, to ask a question, please press star N1. Now we take the next question from the line of Ankur Kumar from Alpha Capital. Please go ahead.
Ankur Kumar
Hello, sir. Thank you for the follow up. Sir, I wanted to know, in terms of export, CV and tractors, what is roughly our EBITDA per kg for all the three segments?
Deepak Reddy Ponnavolu
So we don’t actually, I mean, track it that way. We track it very differently in terms of how we track it. But like I said, largely speaking, I think you can say export is roughly around 18 to 20 and domestic is roughly around 10. It varies quite a bit based on product and product mix and size of the product that we do. So it’s a little hard to. We look at it quite differently in terms of product families or customers, not in terms of the overall segment.
Ankur Kumar
And in domestic, tractor is lower than cv, sir.
Deepak Reddy Ponnavolu
Yeah, tractor is a little more competitive than the cv. Both are very competitive. But because tractor has a. What we supply to the tractor has much more of gray iron in it versus what we supply to CV is more of a ductile iron to it. So there is some technical differences as well that result in, you know, lower realization.
Ankur Kumar
And export is much higher. So if our export share can increase, then our EBITDA but can go to higher.
Deepak Reddy Ponnavolu
Yes.
Ankur Kumar
Yeah, sure. Thank you. And all those.
operator
Thank you. Next question is from the line of Nirmal Shah from Seraphic Management. Please go ahead.
Nirmal Shah
Yeah. Good afternoon, Mr. Deepak. Congratulations for a very good set of results. I had just two questions. One was with respect to the current uncertainty in terms of tariffs. Typically in this kind of environment, the clients just hold back or they go slow. But probably you have actually got quite a lot of good contracts. So I was just trying to understand more behind that thought process. Can you just give me some more color on this?
Deepak Reddy Ponnavolu
So I think, you know, the order ones that I think is based on two things. One, if somebody has a new project that’s happening, they are not delaying the timeline for the new project. So I think there’s a firm belief that the tariff war will likely have a negotiated tariff rate. And the reality is, even if that tariff rate is 10% or whatever. It doesn’t really alter their decisions. So we are seeing people still move forward, especially when it’s new projects. When it comes to projects that are resourcing as well, they still believe that our deal will be reached and something will get sorted out.
That there may be a little bit more of a wait and watch. Unless even with whatever the worst case scenario, tariffs, they still believe that there’s a significant cost saving, which I still believe still does exist. The other part of it is the capacity really does not exist in the US to be manufacturing these kind of products. To invest in new capacity is going to take a minimum of three years and a significant investment, maybe another couple of years to break even, maybe another five, seven years to earn your return on investment. So given that, I don’t foresee that anybody would actually invest in a new facility with the hope that these tariffs will still be around in 12 years from now or will be higher 12 years from now.
So I think there’s a lot of. While there might be some uncertainty, I think those customers who have new projects and new products that they want to launch do not see the point of delaying the launch of their products and are making what they believe is a calculated call right now.
Nirmal Shah
And the last question is the. What would be the size of the framework contract size annually for you? Like you mentioned, 30 million dollar number. Is it cumulative or is it annual number of all new orders? In fear?
Deepak Reddy Ponnavolu
That is the annual number.
Nirmal Shah
Okay.
Deepak Reddy Ponnavolu
So that it goes into production. They would all go into production perhaps at different, different projects at different times.
Nirmal Shah
Right, right. But then once it goes into production annually, there is an additional $30 million worth of additional contracts. You want post December quarter. Okay, got it. And how does it look like in future?
Deepak Reddy Ponnavolu
We’ve got a lot more we’re working on. Let’s hope that they materialize.
Nirmal Shah
Okay. Okay. All the best, sir. Thank you.
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.
Deepak Reddy Ponnavolu
Thank you, Navya. In closing, I want to reiterate our commitment to excellence and our focus on delivering long term value to all our stakeholders. The resilience we have shown in the face of market fluctuations, I think it’s a clear indication of the strength and stability of our business. We’re not just navigating through a temporary movement in demand, but we’re actively preparing for a future that’s filled with promise and potential. Thank you.
operator
On behalf of Nelcast Limited. That concludes this conference. Thank you for joining us. And you may now disconnect your lines. Thank you.