PITTI ENGINEERING LIMITED (NSE: PITTIENG) Q3 2025 Earnings Call dated Feb. 14, 2025
Corporate Participants:
Akshay S Pitti — Vice Chairman and Managing Director and Interim Chief Financial Officer
Unidentified Speaker
Analysts:
Dipak Saha — Analyst
Sanjeev Zarbade — Analyst
Het Choksey — Analyst
Balasubramanian — Analyst
Naysar Parikh — Analyst
Neerav Sin — Analyst
Ram Chandra Nayak — Analyst
Dhruman Shah — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Pitti Engineering’s Q3 and Nine Months 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 at the end of today’s presentation. Please note that this conference will be recorded.
Before we begin, I would like to mention that some of the statements made in today’s call may be forward-looking in nature and may involve risks and uncertainties. For a list of such considerations, please refer to the earnings presentation.
I would now like to hand the conference over to Mr Akshay. Thank you, and over to you, sir.
Akshay S Pitti — Vice Chairman and Managing Director and Interim Chief Financial Officer
Thank you. Good evening and a warm welcome to the Q3 FY ’25 earnings call. We will begin with a brief overview of the performance during the quarter, followed by the Q&A session. Starting with the operational performance during the quarter, we registered the highest volumes for machine components in the company’s history.
We also developed and started commercial supplies for parts used in hydrogen electrolyzers during the quarter., on the sheet metal side of our business, we saw some decline in volumes on a quarter-on-quarter basis. The decline is mostly attributable to the nature of some of our end-user industries, the new emission control norms CPCB Bharat 6 affecting the alternator business and the volatility in small LV motors market, mainly on account of destocking.
Moving to our consolidated financial performance. The revenue from operations for the quarter was INR414.98 crores, up by 37.46% on a Y-o-Y basis. EBITDA stood at INR66.95 crores for the quarter, registering a growth of 30.05%. EBITDA margin in the quarter was 16.13%. Net-debt stood at INR432 crore as of 31st December.
During the quarter, the company also incurred a INR3.76 crores mark-to-market ForEx loss, which is notional in nature as well as a one-time expense-related to the merger of Pitty Castings amounting to INR2.2 crore. Looking ahead, the product development pipeline for machine components is very promising and has been further augmented as we start the machining of castings made at our subsidiary, Dakshin Foundries.
In the sheet metal side of our business, we expect that both the volatility in the small LV motor market and the disruption in the alternative market on account of CPC 6 norms will normalize by Q1 FY ’25. We are proud to note that we commissioned our coating line, making us the only commercially available source for re-vonish laminations used in hydro and thermal power generators. This will help us gain business as we’ll be able to offer import subscription to our clients in a niche market.
As I conclude the opening remarks, we can begin the Q&A session.
Questions and Answers:
Operator
Thank you. Thank you very much, sir. We will now begin with the question-and-answer session. Anyone who wishes to ask questions may press star and one on their touchstone phone. If you wish to withdraw yourself from the question queue, you may press. Participants are requested to use only answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles the first question is from the line of Deepak Saha from KR Shares; Securities. Please go-ahead.
Dipak Saha
Hi, thanks for the opportunity. You’re audible?
Operator
Yes, sir, you’re audible. Please proceed.
Dipak Saha
Okay. Sir, my first question is, if we look into gross margin in this particular quarter, there has been an expansion — material expansion. So is it more of a seasonal development or do you think do you see this kind of gross margin will factor here.
Akshay S Pitti
So if you see the machine components business, which has grown significantly during the quarter, typically has higher gross margins. Therefore, the overall gross margins for the company look better when compared to the previous periods. So we see that this level of gross margins will fluctuate slightly between the historical and current levels based on the product mix between the machine components and the sheet metal business.
Dipak Saha
Okay. Okay. So this higher mix of machine component is the reason that has led to this. And you think it would kind of sustain in the coming quarters, right?
Akshay S Pitti
Yes.
Dipak Saha
Okay. Okay. Sir, looking at the volume numbers, if you can share consolidated volume for the quarter.
Akshay S Pitti
So consolidated volumes on the lamination products is about 14,738 tonnes. So 14,738 tons. Yes.
Dipak Saha
Okay. And sir, when we look into the bifurcation you have given in your PPTs, if you just help us because there are certain minor differences we get when you try to club it up with the numbers. So what are the heads that we need to consider on the standalone side? Standalone sites, we have lamination, new lamination and high-value added and machine component. If we take this three, then we are getting somewhere close to the numbers of previous quarter that you said on the con-call. Anything else that you are missing or any clarification you’d like to give here?
Akshay S Pitti
See what we are doing, we are giving the breakup between machine castings as well as lamination. So if you see the slide number seven in the PPT, we have the top paragraph where we are PT engineering sales, the first five line items, loose laminations, high value-added SMB, state of rain, shaft and child part. If you accumulate these five items, you get the standalone lamination volume.
So when you say consolidated volume, you have to add the sales of Pitty Industries Private Limited, which is in the second paragraph of the WS sales, 2,982 tonnes. So that will give you the total lamination volume. So post the Pitti casting merger, we have started giving this machine components weight as well, which was not there before, as we used to do only the machining.
So to understand the machine component rate or the casting weight in total, you have to take the machine components, raw casting data frames as well as the Foundry Private Limited volumes.
Dipak Saha
Okay, fine. That’s clear. Okay. Now look on the 62,000 volume guidance that you were talking about last quarter, I think that remains impact for the full-year or we see some moderation there? This is one part. And secondly, on the INR2,000 crore revenue guidance that we are talking about for the full-year, I think there is — because of the slowdown that we have seen on volume side, so I think there is some shortage for the full-year. So what would be the revised guidance for what kind of the number you are looking for the last quarter, if you can share some clarity there?
Akshay S Pitti
So see on the volume front, 62,000 tons on the lamination volume on a consolidated basis, we are all good for. In terms of revenue, we should be ending up somewhere around INR250-odd crores for quarter-four in the ballpark vicinity of INR450 crores for the quarter-four.
Dipak Saha
Okay. Okay. Okay. Got it. So there would be some sort of fine. And so that’s clear. And you’re talking about slowdown. If you can elaborate the nature of slowdown in any industries that you’re alluding to?
Akshay S Pitti
No slowdown. There’s volatility in the LP motor segment, basically on the small motors as the raw-material prices are kind of fluctuating in India and China and we are seeing some increases in pricing, further increases in pricing Pricing vis-a-vis declining trend till last quarter. So because of that, there is some volatility in the LV motor market. There is some pushout of orders because of this pollution control norms Bharat 6 related to DG sets. So the alternators which are used in that are getting delayed as the engine manufacturers are upgrading themselves to meet Bharat 6 requirements and the market accepts those products.
Dipak Saha
Okay. Okay.
Akshay S Pitti
Two things that are happening structurally. Other than that, there is a seasonality to certain products. So like if you see our pumps and appliances segment, those products are typically seasonal in nature. Although not significant revenue, they have higher-volume contribution. That’s why you see a small volume decline in.
Dipak Saha
Okay. That’s helpful. Sir, just one clarity. After our discussion with different players, especially in the railway segment associated with this motor business, there is some feedback we’re receiving that the volume offtake has been kind of slower, at least in last quarter, right, the December ended quarter. What is your observation? And do you see any slowdown as far as volume offtake is concerned, especially on the railway side and what is the reading you have? And how should we look at this?
Akshay S Pitti
If you’re asking me as a sector or for our company’s perspective, because those two things are quite different. As a company, we don’t have a very large exposure directly to Indian Railways today, we are just ramping-up that business. So despite certain slowdown, if I may say, on the order pickup at the railway side, our business with them is still growing. So at a broader level, certain of their product leads, they are definitely deferring certain purchases.
So again, there are many reasons for that. There is a systemic thing wherein the Bharat trains are only producing one manufacturer today and there is a capacity issue also on that front.
Dipak Saha
Okay, noted. And on the export side, do you see any early discussions with your customers or anything on the tariff side that might come from US? I know that might be very small part to our overall revenue as only US is concerned, but if you can clarify because I think 35% of the Nine-Month revenue is export and within that, how much would be US and is there any kind of risk we exposed to? It’s not first order, but at second order level, is there any kind of risk that we expect exports to?
Akshay S Pitti
On the export side, out-of-the 35% of revenue coming from exports, about 30% is to the North American market. If you factored in the second level orders that go from Mexico or Canada or Brazil to US, I think that would take care of the entire 30% that goes to the North American markets.
On the tariff side, we are not seeing much effect at least for our products there. On the contrary, there is opportunity as there is a willingness at the customers to further accelerate their move from China to India for their supply-chain flexibility. The fluid — the situation on that remains fluid because we don’t know what future tariffs may come.
Dipak Saha
Okay. Okay. Fine. And sir, last question, if I follow-up on the queue, if you are — I think earlier we were talking about somewhere around December, we’ll have the facility ready. What is the update there? Because when I look into PPT, the consolidated number for annual capacity is still at 64,000. I mean, is it somewhere 64,000 standalone level, but if you can give some color when we should expect that facility 72,000 that we’re talking would be ready of commissioned?
Akshay S Pitti
As on-date it is commissioned and in-quarter three, we shall be giving that capacity in our PPTs.
Dipak Saha
Okay. So in Q4 PPT that would be there right?
Akshay S Pitti
Yes.
Dipak Saha
Okay. Thank you. Thanks for answering all the questions and all the best. Thank you.
Akshay S Pitti
Yeah. Thank you.
Operator
Thank you. We’ll take the next question from the line of Sanjeev from DreamLadder Investment. Please go-ahead.
Sanjeev Zarbade
Thanks. Sir, for taking my questions. My first question is, how is your EV business taking shape as we are hearing before that you are getting into the hydro — hydrogen green hydrogen segment also.
Akshay S Pitti
So see, those two things are very separate. The EV side of the business is mostly from the lamination that go into the motors more than the EV, we are excited about the internal combustion engine. The current sales of EV is to internal combustion, internal combustion is far higher than EV.
So while we are developing ourselvest into making EV-related products, we believe that today the volume will come from internal combustion. So that — both part of the business is growing. So coming to hydrogen, this has got nothing to do with the automotive. This has got to do with hydrogen production. We are making parts which go in electrolyzers, which basically split water into hydrogen and oxygen. And these are predominantly export-oriented to the European market.
Sanjeev Zarbade
Okay. And sir, my second question is, we are hearing a lot of slowdown related reports. So-far as the European automobile market is concerned and several domestic auto component stocks have also come off following the news. So what would be the current size of your components business from Europe? And how is it going?
Akshay S Pitti
Sorry, see, on the automotive side, our business is entirely domestic and it’s entirely from the lamination side of the business. It constitutes only 1.3% of revenue for quarter three. If you see the last three years that percentage is growing. So we are seeing scope where the domestic auto companies are having to bring in lot of their parts and localize them. These are the parts which are left out in their supply-chain and we imported.
So as they move to localized parts, we will continue to get orders despite the slowdown. But it’s a very, very long-term project. I mean, these are complex supply chains that need to be established in India and we are just one part of that supply-chain.
Sanjeev Zarbade
And sir, we are seeing a lot of new clientele being added in your presentation. Can you throw some light on which are the businesses where you would have added these clients, especially Tata see
Akshay S Pitti
Tata Group, we’ve added mainly on the automotive components with Tata Auto Components Private Limited, we’ve added in the automotive side,,, they already are customers. And then the other customers that you see added like SKS and all, they are primarily from our subsidiary company, Foundries, where they make parts for locomotive gear cases and action houses?
Sanjeev Zarbade
Okay. And sir, just last question, if I can squeeze in, how is your IC vehicles business fair enough.
Akshay S Pitti
So actually, we are just starting that. Even in the IC side, we do things like alternators, small motors which are required, like we are talking of steering motors, etc. So that business is very small. Like I said, about 1.2% of consol revenues and we are seeing that business growing as the supply chains localize in India.
Sanjeev Zarbade
Thank you. Okay. Thanks, sir. That’s it from my side. And if I have more questions, I’ll come in later.
Operator
Thank you. We’ll take the next question from the line of Hit Choksey from. Please go-ahead.
Het Choksey
Hi, Akshay. Congratulations for a phenomenal Q3 and nine months performance in FY ’25 and best wishes for the last quarter of FY ’25 and FY ’26. Thank you so much. It’s just — it’s absolutely amazing to see this kind of resilience in your earnings vis-a-vis the entire industry. So I really wish that we scale-up all capabilities and move-up the ladder in years to come. So keep it up.
So like the few questions which are pertaining to the entire export revenue and the concerns around the US tariffs. What is exactly your percentage of exports as a percentage of revenue? And if you can just put USA into that picture, how much would that be as a percentage of total revenue?
Akshay S Pitti
See, about one-third of our revenue approximately is export-oriented, 30% in-quarter four-quarter three, about 31% of revenues were export. Of that about 25% would be directly or indirectly going to the US. And as far as tariff risk risks are concerned, on quite a few many parts, I would say about 75% to 80% of the parts, we are the sole supplier for our customer globally.
So tariff or no tariff, that particular part of the business will not have sensitivity to any regulatory action that the US government might take.
Het Choksey
Okay.
Akshay S Pitti
Only where we have competition at a global level where there are other sources where there is no tariffs in play, then a tariff barrier may affect sales . As far as I understand from our customers, of course, they also are quite concerned with these things, if there is a tariff, it’s going to be similar in nature to both India and China, which let’s face it are the only two manufacturing countries that export such products to the US. And within that, the generic view is that China will face more tariffs when compared to India, if at all-India faces tariff. So overall, we are being given a direction and a viewpoint from our customers based in US that you should gear up for more product development in the coming years as they would want to eventually move-out and get products developed in India, which are currently happening in China.
Het Choksey
So if I take 31% of your total revenue from exports, if I just say 25% of the 31%, that is around 7% to 8% of your total revenue comes from the US market.
Akshay S Pitti
31% of the total revenue is exports, of which 20 — of which 5% is non-US based. The remaining 26% of the overall revenue is US-based.
Het Choksey
Okay. Okay. So 26% of the total revenue is US-based. And out of that, you are saying that closer to 75%
Akshay S Pitti
Of that is insulated as we are the sole sources for those products, right?
Het Choksey
And you don’t see any impact going-forward.
Akshay S Pitti
Actually, even if the continue for long-duration, the nature of these products are said that it takes three to four years for any development to happen. So if we are slapped with unequal tariffs when compared to some other low-cost country, even for our customer to move-up, the supply-chain will take two to three years,
Het Choksey
Okay? And what is the — what is the possibility that if US is imposing such kind of tariffs that we may allocate some of the manufacturing dedicatedly for the US market in US to escape these tariffs?
Akshay S Pitti
Also see this product, I don’t think is possible to manufacture in US because the steel is the base input product and the tariffs for steel in the US as such that if you do a cost-benefit, it’s better to pay the tariffs and manufacture it in India because the steel is cheaper in India as well as labor is cheaper in India. Okay.
Het Choksey
Okay. So that means that still those customers will prefer despite the tariff hikes our products.
Akshay S Pitti
Absolutely. See, the only arbitrage or opportunity for our customer would be that compared to India, some other low-cost country like China, Vietnam, Thailand, where such a product might be made and what the tariff arbitrage is and what the risk of moving such complex supply chains, which have taken three decades to develop is?
So those are very complicated questions to answer. Even when in 2018, there was this tariff on China, there was a lot of euphoria that products will move. It’s been say now eight years and still we are hardly seeing a 2 million worth of business moving from China to India as a result of that. So even though that tariff is there on China, it’s not easy to move those supply chains. It takes a lot of time.
Het Choksey
Okay. And second question which I had was we have seen some kind of a slowdown in execution of orders in the railway components and traction motor business in this quarter. I understand that might be primarily because of the consistent central and state elections in this year, which has resulted into delay in order execution or distribution of funds as part of the budgetary allocation of the central government.
Do you see this reversal happening in the quarter-four and going-forward in the next financial year, when capex will be much more streamlined and as a part of the budget reallocation, the allocation might happen on-time.
Akshay S Pitti
So see, most of our railway and traction motor-related business is export-oriented towards the countries I mentioned earlier and that volume drop is purely seasonal in nature. Last quarter being the financial year-end as well as the holiday season, they typically buy less. So you could see a resurgence in-quarter four that business?
Het Choksey
And also could you sort of throw some light on the power generation business as to how do you see this thing going-forward in the next three to four years with the entire HVDC market shaping up in India. How do we see ourselves in position in this space?
Akshay S Pitti
See, in the power generation side, our business is threefold, leaving aside the renewable energy threefold. One is for hydro power, second is for thermal power generator component that is. And the third one is DG sets. So on the DG sets, like I said, we are currently being slightly impacted as a result of the CP, CVs Maharat 6 norms for one customer-base in South India. So that should get streamlined by April or so, and we should be back on-track.
As far as hydro and thermal power goes, we are seeing the resurgent demand. And as a result of that, we have commissioned this coating line. So because these products require the laminations to be coated with a special vornish as it’s exposed to corrosive environment in hydro and thermal, steam thermal power plants.
So we are the only commercially available source for this and we expect the business to grow in this over the next two to three years as we do import substitution for our customers.
Het Choksey
Okay. And my last question would be on foundry. This acquisition might be probably a star in our like a feather in our entire cap. What would you see — how would you see the new product-line, new product development happening in this? And can you also throw some light on the potential applications which might come out from this facility in the near-future, the potential areas of applications?
Akshay S Pitti
See, again, is a railway and metro business heavy a sales portfolio, about 50% to 60% of its revenue comes from that segment. And what’s interesting is that they export to in the European Union, which is a very, very specialized quality requirements and they have those upgradations.
What’s interesting is, historically, they have never done much machining as they invest in machine shop. And where we see the juice for us is that this casting that they produce which are critical in nature to a very discerning customer, we can provide the complete solution in machining with so over the next year and a half, we see a massive margin profile increase in that business as a result of this supply-chain transition.
Het Choksey
Okay.
Akshay S Pitti
In terms of other appliance applications for those products, in the past, from what we understand, the company used to also do parts for gas turbine generators, transmission housing of highway vehicles. So similar portfolio like ours, but different size of components. So it will slot very well with our overall product-line. The missing gap in smaller casting will be fulfilled by and we will fulfill the machining at their end.
Het Choksey
Okay. Okay. Fair enough. I think all the very best, Akshay and keep up the good work.
Unidentified Speaker
Thank you.
Operator
Thank you. The next question is from the line of Balas Subramanian from Arihant Capital. Please go-ahead.
Balasubramanian
Good evening, sir. Congratulations for a good set of numbers. My most of the questions have been answered. Sir, like what is the order book status on fit engineering standalone and Foundry as of Q3.
Akshay S Pitti
Bhara, like I said last-time, order book is not much relevant in our context of business, but still I think the order book in Pitti Engineering on a standalone basis would be in the vicinity of INR800 odd crores and consolidated, you can add probably about another INR100 crores. I don’t have the consolidated number with me as I to split it between estimated to be about INR100 crores.
Balasubramanian
Okay, sir. Okay. Sir, in this is majorly like supplying agricultural to like Texmo, like how do you see in this business over next two to three years? Years because right now, it’s around 2 percentage of our overall sales.
Akshay S Pitti
Yeah. So see the pump market is interesting. It’s early days, but from what we are given to understand from some of these customers, there is a huge demand coming from US as a result of the trade war with China and other countries. But again, the situation is fluid, so I can’t give you a specific answer as to how that segment will do in the future.
Balasubramanian
Okay, sir. Sir, regarding our working capital side, like if you could like throw some light on our — how is our inventory stables and receivables side?
Akshay S Pitti
So on the inventory side, we have a slight expansion in inventories when compared to the previous quarter and the year-ago. It’s mainly on account of stocking some extra material as we are expecting disruption in the electrical steel market starting in April. There are BIS licenses which are not being renewed for the Chinese mills, which contribute about 25% of the Indian market’s consumption.
And if you see the Indian market and The capacities that are available in India, India is short by about 20% of its consumption in terms of manufacturing capacity. So we see a tightness and supply-chain disruption in the electrical steel industry in the next six to nine months. So other than that, I think all of the parameters on the days sales outstanding get better. We are about 60 days BSO payable is about 66 days. So net working capital stands at about 67 days. Only the inventory piece is slightly up on a quarter-on-quarter basis. So on a year-on-year basis, we are down from 77 net working capital days to 67 days.
Balasubramanian
Yeah. Got it, sir. Sir, my next question — next question regarding this facilities, like earlier we plan to transport around 6,000 metric ton from like facilities to this. But after these facilities like the transport isn’t cost around INR3,000 rupees per ton, like how much synergies we have been achieved till now
Akshay S Pitti
See at Pitty Industries Private Limited, we, as I mentioned earlier, have a capacity space constraint. The facility is small. We are moving into a larger facility on a lease basis and we expect to have that operational by quarter one. So once that starts, the production which is happening in, we shall start moving to Bangalore.
So today, the basic raw-material savings and material utilization savings have already started. The last bit, which is the logistical savings will accrue to us once we move these operations there.
Balasubramanian
So basically from FY ’26 or FY ’27 onwards, we can expect around INR12 crore to INR13 crore kind of synergy benefits.
Akshay S Pitti
Already a lot of the synergy benefits have accrued to us, if you see what is left is like you mentioned 6,000 tonnes into 3,000 rupees is barely 1.8 crores which is remaining to be accrued.
Balasubramanian
Got it, sir. Thank you.
Operator
Thank you. We’ll take the next question from the line of Nirav Sin from Julius Bair. Please go-ahead. MR. Sain, I have unmuted your line. Please proceed. As the current participant is not answering, we will move on to the next question, which is from the line of Naisar Parik from Native Capital. Please go-ahead.
Naysar Parikh
Hi, am I audible?
Operator
No, sir, there is an airy disturbance. We can’t hear you clearly. Please use your handset.
Naysar Parikh
Okay, I will join.
Operator
Okay. We’ll take the next question from the line of Deepak Saha from KR Choxy Shares and Securities. Please go-ahead.
Dipak Saha
Hi, am I audible?
Operator
Yes, sir. Please proceed.
Dipak Saha
Hi., sir, just one follow-up. The volume number you gave for 14,738, if you can just help me with the breakup, struggling a bit to add it up with the PPD number.
Akshay S Pitti
So if you — let me just go back to slide number 7. So if you add 7,657 tonnes, which is the first-line, second-line which is 2,484 tonnes, third-line which is 768 tons and fourth line which is 283, the next line, which is trial parts 564. So that is my standalone number. Applied to that 50 Industries Private Limited sales volume, which is 2982.
Dipak Saha
Okay. Okay.
Akshay S Pitti
You get 14.738. So this is lamination sales. When you come to machine components and casting sales, it is 145290 to 295 plus DFPL volume, 714. So historically so second summation which I have given you was never mentioned historically because we were only reporting the lamination volumes.
So in the past, when we used to do EBITDA per ton, we should take this tonnage breakup of the standalone number and divide the EBITDA by that.
Dipak Saha
Okay.
Akshay S Pitti
So what you assuming this method on a standalone basis, we are about 51,000 EBITDA per ton and on a consol basis, we are about 45,500 EBITDA per ton.
Dipak Saha
Got it. Got it. So what you’re essentially saying is this 14,738 is basically the lamination number. And if we add this casting then stone and your DSP sales volume, you are getting the consolidated volume, right?
Akshay S Pitti
No, no, no, I’m not — yes, consolidated volume, but you cannot add both. You have to keep both separate because you have separate type of products.
Dipak Saha
Yeah, exactly. That was my. Get clear. Thank you. Yeah. My second question is, just on the guidance part, the guidance earlier you mentioned for FY ’27, do we stick to that? And secondly, what is your guidance for FY ’26.
Akshay S Pitti
So for FY ’26, we still maintain our original guidance of about 66 — sorry, 69,000 to 70,000 tons on a consol basis and about 54,000 tons on a standalone basis.
Dipak Saha
Okay. Fine.
Akshay S Pitti
And FY ’27, we stick to the earlier guidance that we have given 72,000 peach utilization of the consolidated 90,000 tonnes at 80%.
Dipak Saha
Okay. Got it. Fine. Thank you. Thank you, sir. And all the best.
Operator
Thank you. We’ll take the next question from the lineof Neerav Sin from Julius Bair. Please go-ahead.
Neerav Sin
Yeah, hi. Sorry, I got disconnected the last-time. I just wanted to confirm with the revenue numbers that you stated earlier on the call, the guidance, what was that again? Can you please repeat it?
Akshay S Pitti
I’m sorry, you’re not very audible.
Operator
Sir, can you repeat your question, please?
Neerav Sin
Hello, am I audible now?
Operator
Yes.
Neerav Sin
Yeah, I was saying, I’m sorry, I got disconnected the last-time. I wanted to confirm with the revenue guidance that you gave earlier in the call. I could not hear it properly. So if you could repeat it, please.
Akshay S Pitti
So for quarter-four, we are guiding to a revenue of about INR450 crores and that will take our consol revenue for the year to roughly about — so we have reported INR1,271 crores of revenue and INR450 crore on-top. About INR1750 crores, you can round it up for the full-year.
Neerav Sin
1750 for full-year. Okay. Thank you.
Operator
Thank you. The next question is from the line of Balas Subramanian from Arihant Capital. Please go-ahead.
Balasubramanian
Sir, a quick question regarding our incentive side. Q4, how much is expected to accrue?
Akshay S Pitti
For quarter-four, we don’t expect anything further. For the year, we have fully accounted the INR35 crores other income in the first-nine months.
Balasubramanian
Okay, sir. And from next year onwards,
Akshay S Pitti
So Bala next year also will be about INR30 32 crores and from the year-after it will increase to about INR40 crores.
Balasubramanian
Okay. Okay, sir, how much capex is left for out of this INR90 crore for capex? Earlier we planned for some order initiations.
Akshay S Pitti
So entire — all of that is entirely in and will be capitalized by the year end.
Balasubramanian
And any other plans to expand the capex after this?
Akshay S Pitti
No, as of now, we have no plans. This capacity is good for us till FY ’27. We shall review something towards H1 of FY ’27.
Balasubramanian
Okay. Got it. Sir, any plan to repay the debt?
Akshay S Pitti
So we are monitoring and balancing our net-debt, we do not intend to further prepay any debt. We want to create a cash file and keep that in case there are any opportunistic things that come our way. So we are keeping ourselves with the cash balance available to take chance of those opportunities?
Balasubramanian
Okay. So what is the cost of funds as of now?
Akshay S Pitti
Yeah. So weighted-average cost of funds, I think it should be about 8%, around 8%. See, about half of our debt is US dollar-denominated and the remaining is INR at about 8.25%, 8.5%.
Balasubramanian
Okay, sir.
Akshay S Pitti
So you mentioned about they typically will keep moving with the so-far and the benchmark rates?
Balasubramanian
Okay, okay. So you mentioned about INR3.76 crore like MKM losses. And like is there any reversal are expected in coming quarters? And what are the strategies we are taking for this manage the forex side.
Akshay S Pitti
So see this is as a result of how we manage our forest rates. So with our customers, we have an INR denominated price agreed for all our export customers. And on a quarterly basis, the price is recomputed based on the price variation formulas, which take into account raw-material, scrap and currency fluctuations. So the currency reference Reference rate for the exports is always taken 1/4 prior to the sales. So for example, in-quarter three, we would have to take the average of quarter three for our quarter-four sales. So we hedge 100% of our exports based on that contract with the customer back-to-back formula. So at the end-of-the period, if that rate has moved vis-a-vis the contract we have taken, we do MTM loss. So that gets reversed as we make the actual. So this is purely notional in nature.
Balasubramanian
Got it, sir. Thank you.
Operator
Thank you. Participants, you may please press star and want to ask questions. We’ll take the next question from the line of Ram Chandra Nayak, an Individual Investor. Please go-ahead.
Ram Chandra Nayak
Thank you. Can you hear me?
Operator
Yes, sir, please proceed.
Ram Chandra Nayak
All right. Hey, Akshay, well done again. I just heard in the previous question about the consolidated turnover, we’re going to be reaching for financial year ’25 and it looks like it’s going to be around INR1,70 — INR1,750 crores, if I’m not mistaken. About six months ago, when we had this discussion, you are quite optimistic about trying to hit a INR2,000 crore turnover.
My question to you is, you know what has changed in the six months that there is a gap of around INR250 crores? And second, you know, when do you think you would be aiming to cross that INR2,000 crores mark?
Akshay S Pitti
The revenue, like I mentioned the last-time also in our business is quite misleading. It has to do with the price of raw materials and we have a quarter-to-quarter price clause. So for example, if I guide today for INR2,000 crores revenue for next year and the raw-material prices jump-up by 10%, then that number is going to be something like INR2,400.
So the real barometer that the company needs to take is the sales volume. So we published that in the operational highlights, slide number 7 of what our sales have been in quantitative terms and that is what we have track in terms of growth and de-growth. So on the volume front, we are pretty much on-target for our guided numbers.
Ram Chandra Nayak
Okay, excellent. I’m also looking at your slide number 13, which talks about the various industry. I mean, you’ve given the breakup from industry standpoint. I wanted to check with you on the progress you’re making in terms of — I see data center as a big opportunity across whether it’s in India or also across the world. And wanted to check with you what is it that you’re planning to do in this area.
I mean, do you see this to be around 3% or you think the next two, three years, this is going to jump significantly?
Akshay S Pitti
See, as an individual line-item, we see the data centers doubling as a percentage of overall revenue that will depend on how the other sectors perform. But yeah, on an individual levels, the revenue from data centers looks to double, if not more than doubled over the next one year.
Ram Chandra Nayak
Okay, that sounds very good. Last question. I mean, you’ve done these two acquisitions. And so-far it looks really good. Just wanted to check with you how is the entire integration process coming along? And are you seeing any benefits that are now beginning to flow into your financial statements?
Akshay S Pitti
Yeah. So the integration is ongoing. 15 industries is fully-integrated, Foundry’s integration is ongoing. And like I said, the machine components is a big opportunity for the parent company. Predominantly sells raw castings and the customers anyways require machines. So that’s a good opportunity where we can make a lot of revenue and profitability gains. Other than that, I think the administrative integration is a matter of formality to go through.
Ram Chandra Nayak
Thank you all right. Thank you so much wonderful to see you progress and do well.
Akshay S Pitti
Thank you.
Operator
Thank you. Participants, you will please star and one to ask questions. The next question is from the line of Dhruman Shah from DTF Capital. Please go-ahead.
Dhruman Shah
Yeah. Hi, sir. Am I audible?
Operator
Yes, sir, please proceed.
Dhruman Shah
Yes. So I have two questions. Like why I missing — we are missing the guidance of 2017 for FY ’25 and the next question for FY ’26 volume is revenue-wide
Akshay S Pitti
Is Roman, I’m sorry, I couldn’t understand what you were saying.
Operator
Sir, it’s equish actually, your voice is equish. So why would we request you to use your handset, please, if you’re on your head.
Dhruman Shah
Hello.
Operator
Yes, sir, please sir.
Akshay S Pitti
Yes.
Dhruman Shah
Yeah. So I am asking why are we missing the guidance target of INR2,000 crore revenue for FY ’24? And second question is of, can you provide me the guidance, can you help me for volume guidance for FY ’26?
Akshay S Pitti
See in volume terms, we had estimated roughly 63,000 to 65,000 tonnes for the full-year when we had given that guidance about a year-ago and we estimate to-end somewhere between that 60,000 to INR64,000. So it’s not really off in terms of volume. But on a consolidated level, in revenue terms. In terms of revenue, it is like I said, the price variation is always a factor when we do all the projections and we give you the revenue for the next year, it’s based on last year’s selling prices.
Dhruman Shah
Okay. Okay. Got it. Thank you, sir.
Akshay S Pitti
And in terms of volume, like I already said earlier, we are estimating about 54,000 tonnes at engineering next year and about 16,000 tonnes — sorry, 14,000 to 15,000 tonnes in the industries.
Dhruman Shah
Okay. Okay, got it.
Operator
Thank you, sir. As there are no further questions, ladies and gentlemen, we have reached the end-of-the question-and-answer session. And on behalf of Pity Engineering, that concludes this conference. Thank you for joining the call.
For further queries or visiting the plant, please be in touch with Mr from Intellect PR on double I repeat double 920209623. Thank you for joining us and have a wonderful day. Thank you