RAJRATAN GLOBAL WIRE LTD (NSE: RAJRATAN) Q4 2026 Earnings Call dated Apr. 22, 2026
Corporate Participants:
Sunil Chordia — Chairman and Managing Director
Yashovardhan Chordia — Chief Executive Officer and Deputy Managing Director
Pranay Jain — Chief Financial Officer, Thailand
Analysts:
Sailesh Raja — Analyst
Sanjay Shah — Analyst
Preet Pitani — Analyst
Vinit Thakur — Analyst
Bhargav Buddhadev — Analyst
Ajit Sethi — Analyst
Saloni Arya — Analyst
Shashank Kanodia — Analyst
Vipul Makwana — Analyst
Saket Kapoor — Analyst
Maitri Shah — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to Rajratan Global Wires Limited Q4 FY26 Earnings Conference Call hosted by 360 ONE Capital Market. [Operator Instructions].
I now hand the conference over to Mr. Sailesh Raja from 360 ONE Capital Market. Thank you, and over to you, sir.
Sailesh Raja — Analyst
Good evening, all. Thank you for joining us for Rajratan Global Wire Limited fourth quarter of FY26 earnings conference call. During this call, from the management side, we’ll be hearing from Mr. Sunil Chordia, Chairman and Managing Director; Mr. Yashovardhan, CEO and Deputy Managing Director of the company; Mr. Pranay Jain, CFO, Rajratan Thailand; and Mr. Hitesh Jain, CFO, Rajratan India.
I would now like to turn the call to our Chairman and Managing Director, for the opening remarks, followed by Q&A. Sir, you may begin now.
Sunil Chordia — Chairman and Managing Director
Yeah. Thank you, Sailesh, and thank you all the participants for your interest in Rajratan. And I’m happy to say that we are meeting in a very exciting times when the global businesses are affected by geopolitical situation, war situation in GICC countries. Lot of businesses are affected. Supply chains are disturbed, okay. But our company has been able to perform well, in spite of all the difficulties. And we have a mix of good news and some, not so good news.
Good news is that, we have been able to achieve the highest ever sales tonnage. Our sales on year-on-year basis have increased by 18%. We have done more than 133,000 tons of total sales from three locations. And particularly in this quarter, we could not achieve the EBITDA, the targeted EBITDA. That is because of the high prices of raw material. There was a sudden increase in steel prices beginning from January. So from January till March, the prices went up by almost INR10,000 a ton, which we could not pass on to the customer. And that is why the EBITDA percentage in this quarter has gone down.
Coupled with that, the availability and the price of energy was a difficulty, which also affected the EBITDA margin, particularly in this quarter. So — but we have been able to pass on the price increase in the current quarter, and we see a robust demand from all of our customers in India as well as in Thailand and globally also. So I can say that this year, should be another growth year for Rajratan, and we target to grow our business in volume by around 17%, 18% in the current year also.
With this, I’m happy to answer all your questions along with my team members. Thank you so much.
Questions and Answers:
Operator
Thank you. We will now begin the question-and-answer session. [Operator Instructions]. The first question is from the line of Sanjay Shah, KSA Securities Private Limited. Please go ahead.
Sanjay Shah
Good evening, sir. Thanks for opportunity. And sir, sincerely appreciating the performance in this global volatile situation. My question was regarding — can you please highlight upon and talk about export business opportunity region wise for our bead wire and even some non-tire segment globally?
Sunil Chordia
So Sanjayji, we won’t be able to give very specific information. But generally, Yashovardhan is handling the global business. So, he will answer you what are the developments in different markets. Yeah.
Yashovardhan Chordia
Yeah, Sanjayji, hi. So, because of volatility, to be honest, the only impact that we’ve seen till now is disruption in shipping, especially from our Thailand plant. But overall, the development of export market remains robust for us. There are many companies that have already approved us in Europe. And we are under regular supplies to them since last six months. Definitely, ensuring that the material reaches them on time is something that we are struggling with since last 30 days, 40 days. But I think that should ease out. And also in American market, the demand still continues to be robust. So, we were expecting that the geopolitical issues will create or reduce the demand, but it has not happened till now.
Sanjay Shah
That’s great. So, basically it’s in tire segment itself or in non-tire also, we are looking?
Yashovardhan Chordia
I would say 70% of the efforts and development is happening in tire segment, in terms of number of counters and number of plants. But today non-tire segment volume is also substantial. But this ratio will keep changing, because you know tire companies take a long time to approve. Products are faster, approvals and volumes come in faster. So it’s a mix of both.
Sanjay Shah
Right. Sunil sir, I have one question for you, was regarding our Chennai plant. Can you share the ideology of working where we have shifted many tire industry supply from Chennai, and we are catering to some low margin customers from indoor. So, how do you see that panning out in near future. And how do you see that capacity over there? And do we need any capex in any, each of the plants further?
Sunil Chordia
Yeah. So you know last quarter Chennai utilized capacity almost 85%, 90%, okay. If you look at their exit rate, against 30,000 tons capacity they have been producing 2,200 [Phonetic] tons, 2,300 tons per month, okay. And that is why we decided to put in the money for balance equipment. And some equipments have started arriving and will become a 60,000 tons capacity plant by second quarter of this financial year, okay. This year, our plan is to sell around 35,000 tons from Chennai to all the customers who are in that region. So, we will be able to cater to customer in North India, who might be a lower price customer, okay.
So as specified earlier, we don’t want to lose our market share, okay. As long as the product is giving us some contribution we want to continue with our high market share. And in tire sector, our market share has again reached to 40% to 43%, which had come down to 35%, 37%. And we are also putting in capex for steel cord for conveyor belt in our indoor facility. So, that project of course got little delay because of the reconstruction of the shed. We have broken the old shed which was made in 1989 and built up a new big shed. But now that work is over and machines are getting installed, and we’ll be able to start trials in the second quarter of that product also. So apart from this to capex, there is no additional capex planned for this year as of today, yeah.
Sanjay Shah
So what will be that amount of capex?
Sunil Chordia
No, in the steel cord, we have already invested around INR55 crores. I think INR45 crores to INR50 crores, and we’ll require another INR25 crores to complete that capex. And Chennai, this year will be close to INR25 crores to complete the capacity to 60,000 tons.
Sanjay Shah
That’s helpful. So my last question was regarding margin uptick. Can we see that establishing the rising raw material and energy prices get passed on in coming future time in this — this year itself?
Sunil Chordia
[Foreign Speech], whether you — whether it is the steel price, or it is other consumables or even energy prices. And currently, we are seeing that there is a pressure on the dispatches. We are not able to meet the demand of customers to supply them on time, okay, because there is a shortage of raw material also, okay. But I think that will become smooth by end of this month, and we’ll be able to meet our overall production target and sales target for this year unless something major happens again, okay. So you cannot — you have to keep your fingers crossed, another war, another issue, yeah. That uncertainty will remain. So, whatever I am talking of is a normal situation, yeah.
Sanjay Shah
Got it, got it. On receivable side, [Foreign Speech].
Sunil Chordia
[Foreign Speech], we supply to our company in USA, who imports paid 50% duty on the product. So, that amount also adds on to the working capital cost. And then customer pays us in 30 days or 60 days after he receives the material. So, that credit cycle has become bigger.
Sanjay Shah
Got it, sir. Thank you, sir. Very helpful, and best of luck, sir.
Sunil Chordia
Thank you, thank you.
Operator
Thank you. [Operator Instructions]. We have next question from Preet Pitani from InCred AMC. Please go ahead.
Preet Pitani
Thank you for the opportunity. Congratulations for good set of volume numbers. Sir, my first question would be on raw material cost. So by telling that we are able to pass on the entire INR10,000 per ton, which has been increased in the cost. Do we mean to say that we would be able to reach 38%, 39% gross margin which we were doing in Q3, back in Q1? Is my understanding clear?
Sunil Chordia
It will be little more, because in percentage we’ll be able to maintain gross margin. So, on absolute numbers because prices have gone up, and we’ll be able to do that, not an issue.
Preet Pitani
Yeah. So [Speech Overlap].
Sunil Chordia
I don’t see an issue in this quarter, yeah.
Preet Pitani
Okay. And I was seeing your Thailand as well as India numbers. In India there was a pressure on gross margin. But I can see that in quarter four Thailand gross margin stayed constant quarter-on-quarter. But we have seen huge increase in other expense for this quarter as well as for this full year. Any particular reason for the same?
Sunil Chordia
[Speech Overlap] other expenses. It is not Thailand other expenses. We have now one more 100% subsidiary, which is getting merged in this balance sheet. That is USA, Rajratan USA, okay. So, there is a cost of around INR30 crores, which is for six months wherein we have — we have been supplying to USA on a FOB basis because the import duty in USA is on the FOB cost of the product, okay. And the US company pays for the shipping cost and logistic cost. So, that INR30 crore of cost for second half of the year is booked in the USA balance sheet, okay. So, because both the balance sheets are merged and you can’t see USA balance sheet separately, you think that it has gone up in Thailand. It has not gone up in Thailand, it has gone up in USA, okay.
Preet Pitani
So now it is new normal that we would be incurring around INR60 crore [Phonetic] cost for the full year in this subsidiary, or –?
Sunil Chordia
If the export volumes are like this, or we have a projection to increase that. So, this will be further increased.
Preet Pitani
So can you just help me explain between the EBITDA per ton or EBITDA margin differential between when we sell in India or we sell in Thailand or we sell in USA or any other export countries. Or the EBIT — is EBITDA per ton maintained at the same level? Or if you could just tell us taking order?
Sunil Chordia
No, because there will be very different prices, okay. Logistic cost prices, long term contracts. You know, some orders are at good price, some orders are long term commitment. It is very difficult to tell you that what is EBITDA in USA Market? What is EBITDA in Thailand or customer-wise, okay? In Thailand, we have a mix of customers. The prices ranges from something like THB26,000 to THB34,000, okay. So, very difficult. You can continue to assume that we’ll be able to maintain this EBITDA level, 13.5%, 14% safely.
Preet Pitani
Across plants, across [Indecipherable]?
Sunil Chordia
On a consolidated basis.
Preet Pitani
On a consolidated basis. And sir, one question from my head. This year you have also shown the segmental difference in the quarter, quarter four financial about how much we have got from India, how much we have got from Thailand, USA, and rest of world. Can you break up this 17%, 18% volume growth which you mentioned region wise, how much growth we expect in India, how much growth we expect in Thailand, and how much growth in USA?
Sunil Chordia
I think we have given — we have grown 19% in sales volume in India, we have grown 17% in Thailand, and the overall consolidated growth in volume is about 18%, okay.
Preet Pitani
I’m asking for — sorry, sorry for interruption. I’m asking for FY27 guidance, the guidance which we are giving 17%, 18% volume growth for FY27. If you could just break it up further, how much growth we expect in India, how much would we expect in Thailand?
Sunil Chordia
Yes, yes. I can tell you. Thailand, we are not expecting 20%, we are expecting around 10% to 14%, because there is a capacity constraint in Thailand, okay. We are doing some debottlenecking. So, Thailand from current year volume, which is close to 51,000, will grow to 55,000, 56,000. That is why I’m saying 10%, 11% growth in volume in Thailand. Balanced growth of — to make it to a consolidated 17% will come from India, because Chennai capacity is ramping up. And we have little growth possible in Pithampur factory. And in all these numbers, I’m not including steel cord. So, steel cord will be trials and it will take some time before we talk of volumes of that product, yeah. So next year, you can estimate155,000 tons of total sales, if things remain normal globally, yeah.
Preet Pitani
Yeah. I’m not asking about, not plant-wise growth, I was asking about region-wise revenue growth like USA, we — last year we did towards [Speech Overlap].
Sunil Chordia
So USA will further grow. I’ll be — like this year, export from India has grown by 250%, okay. But in different markets, we choose where to supply from, okay. So, matching both this is little difficult, okay. We look at the transportation cost, capacities available in different plants, okay. But we have a plan to grow around 30% in North America, I can tell you. And yeah. And some growth in Europe, which will be around 50%. And Southeast Asia 10%, 15%, because we were supplies in South Asia, Southeast Asia for many, many years. So not many opportunities left for us.
Preet Pitani
Northern Europe you mentioned 50%, 5-0, 50?
Sunil Chordia
Yeah, yeah. Because the base is low.
Preet Pitani
Yeah. And Southeast Asia you mentioned around 10%?
Sunil Chordia
Yeah, 10% to 15%, yeah.
Preet Pitani
10% to 15%.
Sunil Chordia
Base is high. And US, we see bigger opportunities, yeah.
Preet Pitani
Got it. Got it. And sir, if you could mention about working capital defense like you mentioned, if we sell to USA, we take additional 30 days, 40 days to receive our money because of the long supply chain. What would be the difference between this, the working capital in India and Thailand. Do we receive it in 30 days or 60 days?
Sunil Chordia
Thailand is overall average 30 days, and India is about 50 days to 60 days, and then some working capital for stocking and finished good and raw material. So — but export has a longer working capital cycle because Europe shipping line takes 45 days to reach, USA takes anything from 45 days to 60 days, and then there is a credit to be extended, yeah.
Preet Pitani
Got it, sir. We would continue to see short term loans at a higher — working capital loans at a higher range for next couple of years until we reach to a mature stage?
Sunil Chordia
Yeah, yeah. It is good to borrow at 7%, 7.5%, okay, and invest in a profitable business. So, working capital borrowing will continue.
Preet Pitani
I’ll join back in the queue. Thank you so much, sir.
Sunil Chordia
Yeah, thank you.
Operator
Thank you. We have next question from the line of Vinit Thakur from Plus91 AMC. Over to you, sir.
Vinit Thakur
Hi, sir. Good afternoon.
Sunil Chordia
Yes.
Vinit Thakur
Congratulations on the volume growth. Sir, I wanted to know what would — when would we see a margin reversal to the expected levels of around 13% to 14% as we had spoken on nine months?
Sunil Chordia
Yeah. So as told you in the earlier question, the margin dip is because — purely because of the sudden increase in wire rod price in January, February, March, which we have been able to pass on to customers in the current quarter, April, May, June. So you will see the margin coming back to 13%, 13.5% in the current quarter itself, if everything remains normal. If there is another situation, another breakout event happening in the world then, yeah.
Vinit Thakur
And sir, so like we had spoken about the wire rope expansion as well and the steel cord expansion as well. So what is the timeline of the steel cord? When would it be online itself? And yeah, so —
Sunil Chordia
Wire rope and steel cord are one, okay. Earlier we were telling that it is a wire rope project, but now it’s a similar product, but we have decided to make the same product what was being made in the same factory in Greece. So, and that will start production in — trials in second quarter and will take some time for approval and regular production so you can expect bigger revenue next financial year. And in all our discussion and projection, we are not including bigger numbers of this product.
Vinit Thakur
So sir, as I know steel cord gets a higher realization and has a higher [Speech Overlap]
Sunil Chordia
It is not that steel cord for tires. This is a steel cord for conveyor belt, okay?
Vinit Thakur
Yes, sir.
Sunil Chordia
So, very niche product and a niche market, yeah.
Vinit Thakur
So sir, what would be the capacity of the —
Sunil Chordia
Total Capacity of this plant is 10,000 tons a year.
Vinit Thakur
Okay.
Sunil Chordia
And the generation — at current level of pricing, the top line possible from this investment is around INR150 crores.
Vinit Thakur
That would be, I’m assuming in three years to four years to reach peak utilization? Would that be correct?
Sunil Chordia
Two years.
Vinit Thakur
Two years?
Sunil Chordia
Two years, yeah.
Vinit Thakur
From next year onwards.
Sunil Chordia
From FY29.
Vinit Thakur
’29. Got it, sir. And sir, what would be the average realization for steel cord?
Sunil Chordia
Different sizes, different prices, but on an average, INR150 a kg.
Vinit Thakur
And what are the margins on this product, sir?
Sunil Chordia
[Foreign Speech] to the current sales, and if you look at financials, the EBITDA margin as of today are around 20%.
Vinit Thakur
Okay, sir.
Sunil Chordia
We’ll have to see going forward, yeah, how it works out.
Vinit Thakur
And sir, there is a debt increase as well in short term and long term, what would be the peak that we are assuming post the capex cycle once it’s completed?
Sunil Chordia
Yeah, I have been telling that this is the peak, but because of business situation our volumes in North America have grown substantially, which has been — which needed more working capital, so we had to borrow. Similarly, capex in steel cord and remaining capex in Chennai required more term loan, but we have paid around INR50 crores of term loan in the current year also. So, that is the company culture. We keep borrowing and repaying, and we still feel rather than diluting equity, we should continue borrowing at a lower cost and save dilution of equity.
Vinit Thakur
And sir, there is a very quite a spike in the other income as compared to last year. Could you shed some light, is it like a one-off?
Sunil Chordia
Other income is gain on foreign currency fluctuation, foreign currency appreciation. So, dollar has appreciated as we have a bigger export, we gained on dollar, and Thai Baht has also become strong. So, there is a growth. There is a appreciation of Thai Baht, which has reflected in the balance sheet.
Vinit Thakur
Okay, sir. Thank you so much for answering the questions. All the best, sir.
Sunil Chordia
Yeah.
Operator
Thank you. [Operator Instructions]. We have next question from Mr. Bhargav Buddhadev from Ambit AMC.
Bhargav Buddhadev
Yeah. Good afternoon, sir, and congratulations on a good performance in a tough market.
Sunil Chordia
Yeah, yeah.
Bhargav Buddhadev
Is it possible to share what is the exports from India, which we have done in FY26?
Sunil Chordia
Total volume I can tell you.
Bhargav Buddhadev
Yeah, yeah.
Sunil Chordia
From India, we have done I think close to 9,000 tons this year. I can give you that number separately also, yeah.
Bhargav Buddhadev
Okay. So, FY26 —
Sunil Chordia
Yashovardhan, do you remember? Yashovardhan?
Yashovardhan Chordia
It is little more than 9,000 tons —
Sunil Chordia
Yeah.
Yashovardhan Chordia
Volume. Balance is from Thailand.
Bhargav Buddhadev
Okay. So in FY26, the export from India was about 9,000 odd tons, more than 9,000 tons?
Yashovardhan Chordia
Yes.
Bhargav Buddhadev
Right? Okay. And next year what are we planning? This number can increase to how much? I mean, in FY27 from India?
Yashovardhan Chordia
Yeah. So next year, probably we are expecting to touch about 15,000 tons of export from India.
Bhargav Buddhadev
15,000 tons.
Yashovardhan Chordia
Yeah.
Bhargav Buddhadev
And this will be mainly from Chennai, I presume?
Yashovardhan Chordia
Again, specific things are very different to compare today.
Bhargav Buddhadev
Okay.
Yashovardhan Chordia
Wherever we get a container, whenever we have capacity.
Bhargav Buddhadev
Sure, sure.
Yashovardhan Chordia
Yeah.
Bhargav Buddhadev
Secondly sir, you mentioned INR25 crores of capex at Chennai for the 30,000 tons. So assuming that you are able to ramp it up in a year’s time than that INR25 crores can be recovered in a year’s time. Is it fair to assume that?
Yashovardhan Chordia
No, I think, the plan is not to ramp up so fast. The decision is to invest and keep the capacity ready. But the volumes will increase gradually only. And I think the plant will also develop capability to increase volume gradually. So I think it’ll be wrong to estimate 60,000 figure and then next year’s production will be that much.
Bhargav Buddhadev
Okay, okay.
Yashovardhan Chordia
Yeah.
Bhargav Buddhadev
And lastly sir, on the Chennai location, being very close to your south Indian clients, is it fair to assume that there could be some savings in terms of freight expenses? Have they started realizing, or it will take some time?
Yashovardhan Chordia
Yeah, definitely. [Foreign Speech].
Bhargav Buddhadev
Sure, sure.
Yashovardhan Chordia
[Foreign Speech].
Sunil Chordia
[Foreign Speech]. We are very conscious that we are in a competitive market, okay.
Bhargav Buddhadev
Perfect, perfect.
Sunil Chordia
So competition will also play, the moment we pass on some benefits. So, very difficult to —
Bhargav Buddhadev
And sir lastly, what has been our peak market share in history? I mean, what was our highest market share? And —
Sunil Chordia
43%, 40% — 43%, 44%.
Bhargav Buddhadev
[Foreign Speech]. We are back to 40%?
Sunil Chordia
Close to that, close to that. Exact numbers are difficult. But our monthly data collection shows that we are back at 40% to 43% kind of market share in India.
Bhargav Buddhadev
Also sir, you mentioned that there are some challenges in terms of raw material procurement. So you being a market leader, if you are facing challenges, is it fair to say that your competition would face far more challenges given the inflation and also the issues in terms of availability?
Sunil Chordia
I heard that everybody in the wire industry is having raw material issue, okay? Yeah.
Bhargav Buddhadev
Great, sir. Thank you very much, and all the very best.
Operator
Thank you. We have next question from Ajit Sethi from Eiko Quantum Solutions.
Ajit Sethi
Yeah. Thank you for the opportunity. Sir, what is the capex amount we are spending on steel cord wire?
Sunil Chordia
Close to INR70 crores.
Ajit Sethi
INR70 crores, okay. So in FY27, we had given a guidance of 37,000 from Chennai plants, which comes around 60% utilization. So, it is fair to assume that we can achieve a peak utilization from Chennai plant in FY28?
Sunil Chordia
’28, ’29, by — as Yashovardhan said earlier, it takes time to build capability, okay. So, it’s a question of our capability, customer approval, customer confidence, lot of things are involved, yeah.
Ajit Sethi
Okay, sir. Thank you.
Yashovardhan Chordia
But let me clarify. I think it’s not fair to assume peak utilization so soon.
Ajit Sethi
Understood. Okay, sir.
Yashovardhan Chordia
Yeah.
Operator
Thank you. We have next question from Preet Pitani from InCred AMC.
Preet Pitani
Yeah. Sir, this quarter tax rate was very low. Any specific reason?
Sunil Chordia
Yeah, it was low on a consolidated basis, because Pranay will you answer?
Pranay Jain
Hello, hello?
Preet Pitani
Yeah.
Pranay Jain
Yeah. So, in Thailand we are getting exemption on income tax after sales of 36,000 tons. And we are a BOI privileged company. So, the base tax list is 20% for the normal companies and privileged companies the effective tax rate comes to be 13.9%.
Preet Pitani
After volume of 36,000 on an analyzed basis?
Pranay Jain
Yes. Yes.
Preet Pitani
Yeah, this 13% is on entire profit, or for 36,000 tons, whatever we are making?
Pranay Jain
No. Entire profit, 13%, because it is prorated. I am telling you effective take rate. So, up to 36,000, the income is taxed up to 20%. And beyond sales of 36,000 there is no tax. It’s like —
Preet Pitani
That’s why we have seen a lower tax rate. Okay. And sir, on the PLI front, yeah, thank you, sir. Sir, on the PLI front, last year we did not get the PLI, because of — because we were not able to produce in Chennai. But this year, we have done so, and we are expecting 527 [Phonetic] as well. So, will the PLI benefits flow?what is stable?
Sunil Chordia
Hello?
Operator
Sir, you’re audible.
Sunil Chordia
Hello? As I said, we are knocking the doors of Steel Ministry. We are also making the presentations to Commerce Ministry, who is overall in charge of the PLI, okay. They all hear us, but nobody is giving assurance. I think it will take some time before I can confidently say that we are getting PLI. But we could not achieve first year target — targeted production as committed to them. And second year targeted production was also not achieved. Because first year was missed. Second year was also missed. So, we have requested for change in the letter, okay. If that is approved, we’ll get PLI. Otherwise, as of today the question mark is there on the PLI. And in all our projection discussion we are not including PLI as a benefit, okay.
Preet Pitani
Okay. If it gets approved, how much would be the PLI percentage?
Sunil Chordia
[Foreign Speech] percent on sales, incremental sales every year, 8% from Chennai.
Preet Pitani
From Chennai —
Sunil Chordia
And total quantum will be INR40 crores to INR50 crores in five years time.
Preet Pitani
Okay. Got it. And sir, I see every year we get around INR3 crore of state investment subsidy. I think it will be because of Chennai plant. How many years still we will be getting more to subsidy?
Sunil Chordia
No, it is not Chennai. It is Indore. We had done investment in 2020. So, we were getting 30% of the capital subsidy. So, whatever we had invested that year, every year we get, you know in seven years that disbursement happens, okay. So I think some INR24 crores, INR25 crores was sanctioned. And every year we get INR3.5 crores, INR4 crores. So it is that money coming to balance sheet from MP state government. We get similar subsidy from — for our steel cord investment.
Preet Pitani
Okay. And is this subsidy shown in the P&L, or is it directly knocking off the capital?
Sunil Chordia
No, no. It is knocking off from the investment.
Preet Pitani
Okay. And sir, for this year what would be our wire rope volume?
Sunil Chordia
We are not assuming any volume this year. Maximum it will be 2,000, 3,000, okay. But right now we are not talking of numbers.
Preet Pitani
In FY26, I’m asking about the year which has just passed.
Sunil Chordia
No, there was nothing from wire rope.
Preet Pitani
So there was some other wire also we do, which come to be around 3%, 4% [Phonetic] —
Sunil Chordia
Which is 14,000 tons, which was 14,000 tons in Indore factory.
Preet Pitani
14,000 tons for FY26.
Sunil Chordia
Yes.
Preet Pitani
Okay. And our 17%, 18% growth projection and 1,55,000 volume projection include these 14 000, right?
Sunil Chordia
Yes, yes, yes.
Preet Pitani
Got it. And then last on the competitive front, like we have been hearing that competitor has done in excess capacity and there is a pressure on pricing. So, what makes us different with respect to competitors? And will we be able to maintain the 13%, 14% margin, if their excess supply comes off on the road? Or do we have to reduce the price and take a hit on margin to preserve our market share? What would be our strategy?
Sunil Chordia
[Foreign Speech] competition decides to further reduce the price, to our understanding, they are already losing heavily in this — at this price. If they decide to lose further, okay, I don’t know. So very difficult to predict, okay. But we are surviving and making this kind of margin in last four years, five years, four years at least, okay. So competition is not new.
Preet Pitani
Okay. And what would be the price difference between our product and there product? Is there any difference, or we are at the same level?
Sunil Chordia
Sorry?
Preet Pitani
We and our competitor, realization —
Sunil Chordia
No, no. There’s a big, big, big, big difference.
Preet Pitani
We are at on the higher end or we are on the lower end?
Sunil Chordia
Yes, we are at higher end, definitely. Any new entrant has to enter with a price cut, okay?
Preet Pitani
Yeah. So what makes us different that it’s our relationship with the clients, or what is the difference that they are purchasing –?
Sunil Chordia
30 years of hard work and knowledge of this product and relationship, everything, yeah.
Preet Pitani
Got it.
Sunil Chordia
Yeah, okay.
Operator
Thank you. We have next question from Saloni Arya from Molecule Ventures.
Saloni Arya
Good evening, sir. Thank you — hello?
Sunil Chordia
Yeah, Saloni.
Saloni Arya
Yeah. Good evening, sir. Thank you for taking my question. I want to basically get a bit more understanding on the new verticals that we are trying to do pilot projection, that is wire rope and steel cord. If I’m right, we have already spent around INR70 crores in the wire rope pilot project, right?
Sunil Chordia
Yeah, correct. We have invested INR50 crores, balance will be invested in current year.
Saloni Arya
Okay, okay. And how much are we expecting to do in terms of revenue from wire rope volumes?
Sunil Chordia
Peak revenue will be INR150 crores, which will take at least two years to reach.
Saloni Arya
That is just for wire rope, sir.
Sunil Chordia
Wire rope, steel cord, whatever you say, yeah.
Saloni Arya
It’s the same thing.
Sunil Chordia
Yeah, yeah. Same thing.
Saloni Arya
Yes, sir. So sir, what first of all led us to venture into this segment, because it is completely new for us, and it’s a niche segment as well?
Sunil Chordia
I’ll say, it is not completely new. It is a wide range product, okay. On the end, it goes into rubber application, okay. So 70%, 80%, we know the business, okay. And we wanted to identify one more product for growth in Rajratan, okay. So we choose to do that, okay. It’s not a very big investment anyway we are making. We’ll wait and watch the performance of this investment. And then we may decide to go in a big way. But right now it’s a pilot project, I’ll say.
Saloni Arya
But sir, any other [Phonetic] industries in this segment would be different than [Phonetic] the conveyor belt, right? So, it would not be [Speech Overlap] at all?
Sunil Chordia
Definitely, it is not existing client, but there is a limited growth you can achieve in the existing client, and in one product, okay. You can’t expect every customer to buy more than 40%, 50% from one supplier, okay.
Saloni Arya
Correct.
Sunil Chordia
So, if we expect a growth in our business, how much can we grow in one product, okay? So we are also — we are also trying to identify areas of growth, okay. So this was an effort to achieve that, yeah.
Saloni Arya
If you could give me enough ideas here about the potential market size of this product? And if it luckily works out for us, you know, how much —
Sunil Chordia
No, no, no. It is a niche — it’s a niche product, not a very global market itself will be some 70,000 tons, 80,000 tons, okay. So —
Saloni Arya
Okay.
Sunil Chordia
But this will also teach us how to make wire ropes. So, the next project might be wire ropes, okay, which are similar in nature and similar in properties and manufacturing process.
Saloni Arya
So this is not just an experiment for us. We are trying to basically venture into this, because we want to create a new segment and potentially get into the wire ropes. Am I correct in understanding that?
Sunil Chordia
Yes, yes.
Saloni Arya
All right. Thank you so much, sir.
Operator
Thank you. We have the next question from Shashank Kanodia from ICICI Securities.
Shashank Kanodia
Yeah. Good evening, team. So, thanks for the opportunity. So just wanted to check that you’re given a guidance of 13.5% to 14% of sustainable margins for us in the consol basis. So, are there any drivers for margin improvement organically, given that we have been ramping new capacities and optimizing the bead portfolio?
Sunil Chordia
Sorry, I didn’t get your question.
Shashank Kanodia
Sir, you guided that the sustainable margins for us is 13.5% to 14%, the consolidated level, right?
Sunil Chordia
Yeah.
Shashank Kanodia
So are there any drivers for margin improvement given that you’re ramping up new capacities, you’re working on the product portfolio. So, is it a case that we can improve it to 18%, 20% that we had in the past of 15%, 16% as the best case?
Sunil Chordia
[Foreign Speech] That is possible, but we would not like to guide you with that high number, okay. We are conscious of the fact that we are in a competitive market. Some of the participants already asked me a question. Are you scared of competition? Will you have to further reduce the price, okay? So you are asking me totally opposite question, okay. So we are projecting and we are talking in middle, okay. We are not optimistic about 18%, 20%, but we are also not pessimistic about 11%, 12%, okay. We should be making a decent margin of 13%, 14%, okay. If anything better comes up, it will be a good surprise for all of us.
Shashank Kanodia
Okay. And sir, given the fact that you already passed on the rising metal prices to your customers. Do we receive any compensation for loss of profitability for Q4? Any one time compensation for —
Sunil Chordia
No, no, nobody gives. Nobody gives.
Shashank Kanodia
Okay, okay. And sir, lastly, there is a fear among, that the auto sales might slow down because of some supply chain issues as well as prices in auto OEMs. So, any demand outlook we’ve been hearing from target players regarding, how do they see the market both on the domestic and the exports front?
Sunil Chordia
No, when we meet our customers, everybody is keeping fingers crossed, okay. But up till now, there is no negative impact, okay. But all of us are expecting April, and [Foreign Speech]. And then a lot of it depends on Mr. Trump, okay.
Shashank Kanodia
Right, right. And sir, lastly, any take on the cooperative intensity? I think no [Foreign Speech] demand supply mechanics in terms of capacity [Foreign Speech] domestically and globally. If you can help us understand.
Sunil Chordia
Currently capacity is much more than the demand, okay. So there is a competition and some of the companies globally are also, whether they will survive or not is not clear. So, consolidation is also happening.
Shashank Kanodia
Right, right. Fine, sir. Thank you so much for your inputs and wish you all the best.
Sunil Chordia
Thank you.
Operator
Thank you. We have next question from Vipul Makwana [Phonetic] from Stylus Holdings. Please go ahead. Mr. Vipul, your line is muted.
Vipul Makwana
Can you hear me now?
Sunil Chordia
Yes.
Operator
Hello. We can hear you. Yes.
Vipul Makwana
Yes. I wanted to speak — good evening. I wanted to know the capacity utilization individually across our plants. What would be that for FY26?
Sunil Chordia
You know Chennai reached peak in the month of March, which was 85%, 90% of installed capacity. So, we have decided to put in balancing machines to double the capacity. Indore continue to operate at 90% capacity utilization, and so Thailand, okay. So our capacity utilizations have been to peak level in both in Thailand and Indore. Pithampur and Chennai is ramping up. So, there will be open capacity in Chennai for the next year.
Vipul Makwana
Okay, okay. And the second question would be for Yashovardhan, as well as you, that in case of exports due to the war, was there any situation that sales got affected or are in transit, or we couldn’t book sales or something of that sort. Could you throw some light on it?
Yashovardhan Chordia
No. As of today, other than shipping lead times have increased and there is congestion at Singapore port. There’s congestion at the Colombo port. Other than that we have not faced any disruption.
Vipul Makwana
Okay. In terms of —
Sunil Chordia
Incidentally, we don’t have a customer in GCC countries, okay.
Vipul Makwana
Okay, okay.
Sunil Chordia
Where the exports are totally have come down to zero.
Vipul Makwana
Yeah. Great, great. That’s it from my side. Thank you for the clarification.
Operator
Thank you. Next question from the line of Mr. Saket Kapoor [Phonetic] from Kapoor and Co. Please go ahead.
Saket Kapoor
Hello?
Sunil Chordia
Yes, Saket.
Saket Kapoor
Hello. [Foreign Speech]. Thank you for the opportunity. Sir, firstly when you mentioned that we are — we have done some installation of finishing line at the Chennai unit, and then we will have open capacity. So can you elaborate in terms of tonnage what would be the addition in the Chennai unit. And what are we factoring in, in terms of the tonnage for Q1 contribution from Chennai and then going ahead?
Sunil Chordia
[Foreign Speech] I have mentioned that Chennai we had installed 50% of the machines. So capacity was till last year was 30,000 tons per annum, which is being doubled to 60,000 tons per year by addition of some balancing equipment, and it will happen in the second quarter. Some of the machines are already installed and it started running. So, this year we’ll have a growth in the manufacturing from Chennai. And from 17,000 tons last year, we are doubling our business from Chennai.
Saket Kapoor
Okay. So last year tonnage was 17,000 on installed capacity of 30,000. Now this year on installed capacity of 60,000, we are expecting 34,000.
Sunil Chordia
Correct. 34,000, 35,000, yes.
Saket Kapoor
[Foreign Speech] capital work in progress, closing balance. How will this shape up post this commercialization? Sir, on standalone [Foreign Speech].
Sunil Chordia
[Foreign Speech] everything will be capitalized. So you will see a very a small number in WIP. All this will be capitalized and up and running.
Saket Kapoor
Okay. Sir, when we look at this number for say INR20 crore increase in the consol, this is pertaining to the Thailand unit, that is the debottlenecking exercise we are doing, or —
Sunil Chordia
Thailand number is very small. Thailand number is very small. On consolidated basis all this is Pithampur steel cord project and Chennai balancing equipment. There is no other WIP.
Saket Kapoor
Okay. And in that case sir, then the INR50 crore number which you have said for the steel cord part, how much have we invested out of –?
Sunil Chordia
[Foreign Speech].
Saket Kapoor
Okay. Sir, [Foreign Speech] INR88 crore, closing balance, [Foreign Speech].
Sunil Chordia
[Foreign Speech].
Saket Kapoor
Okay. And steel cord will be commissioned. This INR50 crore project will be commissioned by?
Sunil Chordia
Second — we’ll start trials in second quarter. But third quarter we should be able to capitalize everything.
Saket Kapoor
[Foreign Speech] So I think so we closed this year at a long term borrowing at 130, and the short term, including the working capital requirement at 200.
Sunil Chordia
Yeah.
Saket Kapoor
So [Foreign Speech] that is the factor already there. So how much –?
Sunil Chordia
[Foreign Speech]. Okay. Last year also we have reduced the long term loan to that extent. And working capital might be required because of high prices now, because there is a price increase of around 10% to 15%. And also the increase in volume, we are talking of 17%, 18% volume growth which might require some working capital borrowing also and long lead time for exports. So, all these factors put together. We don’t expect any reduction in working capital requirement, rather we see some more requirement of working capital, but term loan may not be required. There will be a reduction in term loan.
Saket Kapoor
Just to conclude that in your presentation in your slide you have mentioned that we have robust sales pipeline established with market client customers. So, if you could just give us some understanding, as you say, we were also looking for some new geographies, earlier said, [Foreign Speech], if I’m not wrong correct me there that we were trying to look for new customers from that part of the globe also. So, what are you trying to explain here? And then sir, one more point was in the numbers we have mentioned within USA the revenue at INR118 crore. So, [Foreign Speech], how was tariff affected this case number two in US?
Sunil Chordia
I think Yashovardhan will be better, but we’ll be giving a guarded answer don’t expect us to tell you everything. Yashovardhan, hello?
Yashovardhan Chordia
Yeah. So, we had shared the export plan, I think every quarter we are discussing this about setting up infrastructure two years back, which is now reached at final approval from customers. Overall, our efforts is not specified to any particular region. We see US as a big potential. We also see Europe as one of the largest market for bead wire. And surprisingly, Southeast Asia remains to be competitive, but Japan is turning out to be a new opportunity. Now, all of this is just increasing our existing customer relationship to different geographies. The set of customers in terms of name remains the same, but because they have various factories in the world, we are trying to explore opportunities around the globe.
Saket Kapoor
Sir, just to make things understandable —
Operator
Saket sir, can we request you to come again in the question queue.
Saket Kapoor
Just what Yashovardhan sir was mentioning, I was just trying to make sense of, if I may, and then I join the queue. Yashovardhan sir, you were mentioning that we are setting up infrastructure so this is excluding the one we have, or sir, I could not understand that?
Yashovardhan Chordia
No, I meant to say, we’ve been sharing updates about this every quarter. It started with setting up marketing teams two years back, which has now reached to approvals from customers from various geographies. There is no specific reason that we are targeting. US also has a good potential, Europe is one of the biggest markets for us. And Japan also is turning out to be, but it is very initial to discuss any specific development. I just wanted to explain that our efforts are all over.
Saket Kapoor
Correct, sir. I’ll join the queue. On the tariff, you please answer in the follow up. How was tariff impacted INR118 crore revenue from USA, how has tariff rated part there? Thank you.
Yashovardhan Chordia
Thank you, Saket.
Operator
Thank you, sir. We have our next question from Maitri Shah from Sapphire Capital.
Maitri Shah
Yeah, hello.
Sunil Chordia
Yes.
Maitri Shah
Yeah, good evening. Most of my questions have been answered. Again, the previous participant I think asked a question on the tariff. So, if you could kind of elaborate on the impact that we had on the US side. Did we have the sales, most of the exports from India, or are we exporting from Thailand? Any [Speech Overlap].
Sunil Chordia
So tariffs have not affected the volume or the business, because tariff, we are under Section 232, where US has put tariff against all the imports, whether it is coming from India or Thailand or China or Mexico, okay. So, we are at par with all other countries. So, it is not affected. It might have affected the customers there that they have to pay extra price for the product. Your question on —
Maitri Shah
[Speech Overlap] the tariff —
Sunil Chordia
Yeah, yeah, it is customer. Yeah, definitely, definitely. And the sales revenue includes the tariff, which comes under our USA entity, okay, which is consolidated with this, yeah.
Maitri Shah
Okay.
Sunil Chordia
And I have answered the earlier question also with this.
Maitri Shah
Yeah. Okay. Secondly, on the Chennai plant, sir, you previously mentioned that we’re taking low margin, kind of — like low margin sales on the Chennai side to kind of fill in the capacity. And you also mentioned that there has been like a disruption because there’s a lot more capacity than the demand currently that there’s increased competition and consolidation happening. But yet we are increasing our capacity in Chennai, we actually doubling it. Any reason for this increase in capacity when the margins are so in such a big pressure. And also there’s a pressure on the raw material, those thing. There’s also pressure on the supply from us to the customers in Europe and US. So, if you could kind of give me like a trajectory of why we’re increasing the capacity in Chennai, right now?
Sunil Chordia
No, no, it’s not that we are making a big investment. So, and now, we are not selling any customer from Chennai, where we are losing money, okay. So all the customers supplied from Chennai are profitable, one. Number two, we don’t want to lose the market share. Number three, increase in production reduces our variable cost also, okay. And we want to be in the game, okay. In a competitive market, if we are contributing to our profitability, we do the business, okay. So, this I must have told in respect of earlier kind of margins 18%, 20%, which are not there, but 13%, 14% is a decent margin to even plan an investment, yeah.
Maitri Shah
Okay. So currently the sales from Chennai are also [Speech Overlap].
Operator
Ma’am, we would request you to rejoin the queue. The participant —
Maitri Shah
Yeah.
Sunil Chordia
Fairly. Yeah.
Maitri Shah
Yeah. So they are in the range of 13% to 14%.
Sunil Chordia
Yeah, yeah. Yes, yes. Yeah, thank you.
Maitri Shah
It’s okay. And —
Operator
Thank you. We have next question from Preet Pitani from InCred AMC. Please go ahead.
Preet Pitani
Thank you for the follow back opportunity. Sir, on — we have mentioned that we have raised a bike or — raised the price or passed on the cost from Q1. So, is it fair to assume that the 84,000, 85,000, 86,000 average realization would improve about 90,000 from — for this FY27?
Sunil Chordia
Yeah, it has improved.
Preet Pitani
It has gone beyond 90,000. Is my understanding, right?
Sunil Chordia
Yes. Yeah, yeah.
Preet Pitani
Yeah. And this — we are taking price hike [Phonetic]. So, it applies to all across world like US and Europe. Europe also we are — we would be getting better realization. How is their agreement with us? Is it same like India, or –?
Sunil Chordia
Now, it’s not that big increase there because the dollar has become strong. So we have been able to pass on a little bit, because for export we look at the international prices of raw material, and we calculate from there. And there is an opportunity to import also, if the prices in global market is lower, we do import raw material. So global pricing is done on the global price of wire rod. Otherwise, we can’t remain competitive in the global market.
Preet Pitani
Yeah. Got it. Sir, I can see that realization for this our subsidiary, which is combined Thailand as well US, their realization has also improved this quarter and which has helped us protect gross margins there. Despite increase in realization, we have found that — we have seen that the margins have declined by 400 basis point on EBITDA levels. So, is it fair to assume that in Thailand and US subsidiary combined together we would be doing EBITDA margin of around 9%, 10% only, or what would be the levers which would improve margin there?
Sunil Chordia
No, no. I had in the very beginning said that India, EBITDA margin decline because of the higher price of raw material in this last quarter, January, February, March, which has come back to same, because we were able to pass on the price increase to our customers. Our customers agreed to buy at a new price, okay.
Preet Pitani
Yes, yes. And also Thailand and US subsidiary?
Sunil Chordia
Thailand and US subsidiary are same. There is no change in their business. No substantial change in the business.
Preet Pitani
We are doing 9% margin there, 9% EBITDA margin for quarter four in our subsidiary, which was around 12%, 13% — which was around 11%, 11.4% last quarter and 13.5% in quarter two. So what would be the range of margin which we — which is fair to us?
Sunil Chordia
I think, what is that? One minute, Pranay, highlight the EBITDA margin for quarter four.
Pranay Jain
[Indecipherable]
Sunil Chordia
Yeah. I think we’ll give you this answer separately. I don’t have that calculation right now.
Preet Pitani
Okay. Got it.
Operator
Thank you, sir. We have a follow up question from Saloni Arya. Please go ahead.
Saloni Arya
Sir, just — I just want to clear up one confusion. Basically you said that the global market price for steel cord is 70,000 to 80,000, and it’s the same as the wire ropes we received?
Sunil Chordia
Sorry, come again?
Saloni Arya
You said that global market —
Yashovardhan Chordia
No, it’s different than wire rope. Yeah, Saloni, I’ll answer that. It’s different than wire rope. What we tried explaining is the method to produce steel cord for conveyor belt is very similar to wire rope. So by this project, we’ll be able to also understand how do like, to make wire rope. So, that’ll give us an experience to make wire rope.
Saloni Arya
Okay. Because earlier in the con calls, part con calls you mentioned that we were setting up 10,000 tons capacity for wire ropes, which now, right now it’s for steel cord.
Yashovardhan Chordia
Yes. Yeah.
Sunil Chordia
Wire rope and steel cord are same, okay.
Saloni Arya
Okay.
Sunil Chordia
We had bought the machines for making wire rope. But steel cord is one of the wire rope products you can take, okay. So application of galvanized steel rope for making conveyor belt, then it is called steel cord. But [Foreign Speech] manufacturing process and quality of — there is not much of the difference, okay.
Operator
Thank you. Ladies and gentlemen, we request you to limit yourself to one question. We have Mr. Saket Kapoor has a follow-up question from Kapoor & Co.
Saket Kapoor
Yes, sir. Just to summarize in what you have mentioned. If you can just hear me out. Sir, firstly you mentioned about the general auto industry slowdown part. So, if you could just throw some more light on what you were trying to explain that the April [Foreign Speech]. And secondly —
Sunil Chordia
[Foreign Speech]
Saket Kapoor
[Foreign Speech]
Sunil Chordia
[Foreign Speech] And we are not expert of auto industry, but we continue to see a good demand from our customers which are tire companies.
Saket Kapoor
Thank you, sir. Sir, can you give me the absolute impact on the EBITDA because of the increase in RM, which we do not pass on?
Sunil Chordia
I told you it is about 4%, 4.5% in the EBITDA margin. If you look at our raw material consumption percentage from 57% has gone to 63%.
Saket Kapoor
Okay. And this is normalized in Q1? Sir, you normalized [Foreign Speech].
Sunil Chordia
Yeah.
Operator
Sir, one question at a time, sir. We have next question from Preet Pitani from InCred AMC.
Preet Pitani
Yes. Thank you for the opportunity. Sir, you mentioned to one of the previous participants that INR88 crore capital working progress include INR25 crores, INR30 crores of Chennai capex which we have not yet capitalized. May I know the reason why we have not yet capitalized those, because plant is full operational —
Sunil Chordia
[Foreign Speech] machines are on the way. Some machines are arrived which are to be installed and put to use. So unless they put to use and start using commercial production — start doing commercial production, we cannot capitalize.
Preet Pitani
So these are the machines which that — these are the machines which are still on in transit. And this is the reason why we will be needing only INR25 crores [Phonetic] more for addition.
Sunil Chordia
[Foreign Speech]
Operator
Thank you. We will take that as our last question for today. I now hand the conference over to Mr. Sailesh Raja for closing comments.
Sailesh Raja
Yeah. Thank you all. Sir, would you like to make any closing comment?
Sunil Chordia
Yeah. So the same comments. You know, unless there is a global change in the situation or something new comes up, I think Rajratan is on a path to growth, okay. This year we have shown a good growth last year, and we are going to show a good growth next year also. So, keep watching, keep in touch and keep looking at Rajratan critically. And thank you for asking very critical questions. We would love to answer all the questions, but because sometimes all our answers become counterproductive for us. So, we don’t want to share more information than this. I think we are quite transparent and very, very transparent and straightforward with our investors. So, thank you very much. Bye.
Operator
[Operator Closing Remarks]