Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
RAJRATAN GLOBAL WIRE LTD (NSE: RAJRATAN) Q4 2026 Earnings Call dated Apr. 22, 2026
Corporate Participants:
Shailesh Raja
Sunil Chaudhia — Chairman and Managing Director
Analysts:
Sanjay Shah — Analyst
Bhargav — Analyst
Preet — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Rajathan Global Bias Limited Q4FY26 earnings conference call hosted by 361 Capital Markets. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr.
Shahlesh Raja from 361 Capital Markets. Thank you. And over to you sir.
Shailesh Raja
Good evening all. Thank you for joining us for Rajarathan Global Virus Ltd. Fourth quarter of FY26 earnings conference call. During this call from the management side, we’ll be hearing from Mr. Sunil Chaudhia, Chairman and Managing Director. Mr. Yashabad Ghan, CEO and Deputy Managing Director of the company. Mr. Pranesh Jain, CFO Rajarakhand, Thailand and Mr. Hitesh Jain, CFO Rajarakan, India. I would now like to turn the call to Chairman and Managing Director for the opening remarks followed by Q and A.
Sir, you may begin now.
Sunil Chaudhia — Chairman and Managing Director
Yeah. Yeah. Thank you. And thank you all the participants for your interest in Rajatan. And I’m happy to, you know, say that we are meeting in a very exciting times when the global businesses are affected by, you know, a 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, you know, 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 in particularly in this quarter we could not achieve the EBITDA 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 10,000 rupees 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. 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 Rajathan. 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. Anyone who wishes to ask a question by press star and one on the test on telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Sanjay Shah, PSA 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 beadwire and even some non tire segment globally.
Sunil Chaudhia
So Sanjay, we won’t be able to give very specific information. But generally Yashodhan is handling the global business. So he will answer you what are the developments in different markets? Yeah.
Shailesh Raja
Yeah. Sandraji. 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, 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 entire segment itself or in non tire also we are looking.
Shailesh Raja
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.
Sanjay Shah
So it’s
Shailesh Raja
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 Chaudhia
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 20 to 2300 tons per month. Okay. And that is why we decided to put in the money for B 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 entire 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
Sanjay Shah
What will be that amount of Capex?
Sunil Chaudhia
So in the steel card we have already invested around 55 crores. I think 45 to 50 crores. And we’ll require another 25 crores to complete that Capex. And Chennai this year will be close to 25 crores to complete the capacity to 60,000.
Sanjay Shah
That’s helpful. So my last question was regarding margin uptick. Can we see that establishing the rising raw material and energy the prices get passed down in coming future time in this, this year itself.
Sunil Chaudhia
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 because there is a shortage of raw material also. Okay. But I think that will become 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, you know issue. Yeah. That uncertainty will remain. So what whatever I am talking of is a normal situation. Yeah. Us export. 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 or 60 days after he receives the material. So that credit cycle has become bigger.
Sanjay Shah
Okay sir thank you sir. Very helpful and best of luck.
Sunil Chaudhia
Thank you. Thank you.
Operator
Thank you. Participants. Anyone who wishes to ask a question by press star and one on the test on phone. We have next question from from NCRED NC Please go ahead.
Shailesh Raja
Thank you for the opportunity. Congratulations for the 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 10,000 rupees per term which has been increased in the cost do we mean to say that we would be able to reach 3839 gross margin which we. Which we were doing in Q3 back in Q1. Is my understanding clear?
Sunil Chaudhia
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 we’ll be able to do that. Not an issue. Yeah.
Shailesh Raja
I don’t see an issue in
Sunil Chaudhia
This quarter. Yeah.
Shailesh Raja
Okay. And I was seeing your Thailand as well as India India numbers in India there was a pressure on gross margin But I can see that in quarter four Thailand cross margin stayed constant quarter on quarter. But we have seen huge other huge increase in other expense for this quarter as well as for this full year. Any particular reason? For the same
Sunil Chaudhia
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 Rajathan USA. Okay. So there is a cost of around 30 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 30 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.
Shailesh Raja
Okay. So now it is new normal that we would be increasing around 63rd cost for the full year in this subsidiary. Or if
Sunil Chaudhia
The export volumes are like this or we have a projection to Increase that. So this will be further increased.
Shailesh Raja
So can you just help me explain between the EBITDA per turn or EBITDA margin differential between when we sell in India or we sell in Thailand or we sell in USA or any other export country, are the is EBITDA per ton maintained at the same level? Or if you could just tell us taking order?
Sunil Chaudhia
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 editor 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 26000 Baht to 34000 Baht. Okay. So very difficult. You can continue to assume that we’ll be able to maintain this EBITDA level 13 and a half, 14% safely
Shailesh Raja
Across plants, across coordinates,
Sunil Chaudhia
On a consolidate, on a consolidated basis.
Shailesh Raja
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, 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 Chaudhia
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,
Shailesh Raja
I’m asking for. Sorry, sorry for interruption. I’m asking for FY27, the guidance which we are giving 1718 volume growth for FY27. If you could just break it up further. How much growth we expect in India, how much would we expect? Yes,
Sunil Chaudhia
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 debottle making. So Thailand from current year volume which is close to 51,000 will grow to 55,56,000. That is why I am saying 10 11% growth in volume in Thailand. But balance growth to make it to a consolidated 17% will come from India because Chennai capacity is ramping up and we have little growth possible in factory. And in all these numbers I am not including steel cord.
So steel cod will be trials and it will take some time before we talk of volumes of that product. Yeah. So next year you can, you can estimate 155,000 tons of total sales if things remain normal globally. Yeah,
Shailesh Raja
Yeah. I’m asking about not plant wise growth, I was asking about region. While region wise revenue growth like usa we last year we did no revenue.
Sunil Chaudhia
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.
Shailesh Raja
Northern Europe you mentioned 50%. 5050.
Sunil Chaudhia
Yeah, yeah. Because the base is low.
Shailesh Raja
Yeah. And Southeast Asia you mentioned around 10%.
Sunil Chaudhia
You are 10 to 15. Yeah. Base is high. And us we see bigger opportunities. Yeah,
Shailesh Raja
Got it, got it. And sir, if you could, if you could mention about working capital defense like you mentioned, if we sell to USA we take additional 30, 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 Chaudhia
Thailand is overall every 30 days and India is about, you know, 50 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 to 60 days and then there is a credit to be extended. Yeah.
Shailesh Raja
So 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.
Sunil Chaudhia
Yeah, yeah. It is good to borrow at seven, seven and a half percent. Okay. And invest in a profitable business. So working capital borrowing will continue.
Shailesh Raja
I’ll join back in the queue. Thank you so much, sir.
Sunil Chaudhia
Yeah, thank you.
Operator
Thank you. We have next question from the line of Vinit Thakur from Plus 991 NC over to you sir.
Shailesh Raja
Good afternoon. Yeah, congratulations on the volume growth. So 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 Chaudhia
Yeah. So as told you in the earlier question, you know the margin dip is because. Purely because of the sudden increase in virod 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 and a half in the current quarter itself. If everything remains normal, if there is another situation, another breakout event happening in the world then yeah
Shailesh Raja
Answer. 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 Chaudhia
W. Rope and steel cord are one. Okay. Earlier we were telling that it is a wire 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.
Shailesh Raja
So sir, as I know steel code gets a higher realization and has a higher. It
Sunil Chaudhia
Is. It is. It is not that steel card for tires this is a steel card for conveyor belt. Okay?
Shailesh Raja
Yes sir. So
Sunil Chaudhia
Very niche product and a niche market.
Shailesh Raja
So sir, what would be the capacity of. The total
Sunil Chaudhia
Capacity of this plant is 10,000 tons a year and the generation at current level of pricing the top line possible from this Investment is around 150 crores
Shailesh Raja
That would be I’m assuming in 3 to 4 years to reach peak utilization. 2 years.
Sunil Chaudhia
2 years
Shailesh Raja
From next year onwards.
Sunil Chaudhia
29.
Shailesh Raja
29. Got it sir. And sir, what would be the average realization for steel steel cord?
Sunil Chaudhia
Different sizes, different prices but on an average 150 rupees a kilogram
Shailesh Raja
And what are the margins on this product?
Sunil Chaudhia
The current sales and if you look at financials the E margin as of today are around 20%. We’ll have to see going forward. Yeah how it works out
Shailesh Raja
And so 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 Chaudhia
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 card and remaining capex in Chennai required more, you know, term loan but we have paid around 50 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 you know, save dilution of equity.
Shailesh Raja
So there’s 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? Other
Sunil Chaudhia
Income is. Other income is gain on foreign currency fluctuation. Foreign currency appreciation. So dollar has appreciated as we have a bigger, you know, export we gained on dollar and Thai bath has also become strong. So there is. There is a growth. There is a appreciation of B which has reflected in the balance sheet.
Shailesh Raja
Okay, sir, thank you so much for answering the questions. All the best, sir.
Sunil Chaudhia
Yeah,
Operator
Thank you. I reminded all the participants. Please press star one on the test on point to ask any questions we have. Next question for Mr. Bharma from.
Bhargav
Yeah, good afternoon sir. And congratulations on a good performance in a tough market. Yeah. Yeah. Is it possible to share what is the exports from India which we have done? Total
Sunil Chaudhia
Volume. I can tell you from India we have done I think close to 9,000 tons this year. I can give you that number separately also.
Bhargav
Okay. So FY26,
Sunil Chaudhia
You know, remember the show,
Shailesh Raja
It is little more than 9,000 tons. Yeah. Volume balance is from Thailand.
Bhargav
Okay. So in FY26 the export from India was about 10,9000 odd tons. More than 9,000 tons.
Shailesh Raja
Yes.
Bhargav
Right. Okay. And next year what are we planning? This number can increase to how much? I mean in FY27 from India.
Shailesh Raja
Yeah. So next year probably we are expecting to touch about 15,000 tons of export from India.
Bhargav
15,000 tons.
Shailesh Raja
Okay.
Bhargav
And this will be mainly from Chennai, I presume.
Shailesh Raja
Again, specific things are very different to compare today. Okay. Wherever we get a container, whenever we have capacity.
Bhargav
Sure, sure.
Shailesh Raja
Secondly,
Bhargav
Sir, you mentioned 25 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 25 crores can be recovered in a year’s time. Is it fair to assume?
Shailesh Raja
No, I think you know, the plan is not to ramp up. So far 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.
Sunil Chaudhia
Okay. Okay.
Shailesh Raja
Yeah.
Bhargav
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.
Shailesh Raja
Yeah, definitely.
Bhargav
Sure, sure, sure. Margin increase.
Sunil Chaudhia
We. We are very conscious that we are in a competitive market. Okay,
Bhargav
Perfect, perfect.
Sunil Chaudhia
So competition will also play
Bhargav
The
Sunil Chaudhia
Moment. We pass on some benefits. So very difficult to.
Bhargav
And so lastly, what has been our peak market Share in history. I mean what was our Highest market share? 43.
Sunil Chaudhia
40%. 43, 44.
Bhargav
We are back to close
Sunil Chaudhia
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
Also. So 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 you are the competition would face far more challenges given the inflation and also the issues in terms of availability. I
Sunil Chaudhia
Heard. I heard that everybody in the wire industry is having raw material issue. Okay. Yeah.
Bhargav
Great sir. Thank you very much and all the very best.
Operator
Thank you. We have next question from Ajit Seti from Eco Quantum Solutions.
Preet
Thank you for the opportunity. Sir. What is the capex amount we are spending on steel cord wire?
Sunil Chaudhia
Close to 70 crores.
Preet
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 FY 282829
Sunil Chaudhia
By in as said earlier, it takes time to build capability. Okay. So it’s a question of our capability, Customer approval, customer confidence. A lot of things are involved. Yeah.
Preet
But let
Shailesh Raja
Me clarify. I think it’s not fair to assume peak utilization so soon. Okay,
Operator
Thank you. We have next question from Pete Pitani from incurred nc.
Shailesh Raja
Yeah. So this quarter tax rate was very low. Any specific reason?
Sunil Chaudhia
Yeah, it was low on a consolidated basis because. Pranay, will you answer?
Operator
Hello. Hello.
Sunil Chaudhia
Yeah.
Shailesh Raja
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% after volume of 36,000 on an analyzed basis.
Operator
Yes. Yeah. This
Shailesh Raja
13% 10% is on entire profit or 36,000. Whatever. We are making
Operator
Entire profit 13% because it is prorated. I am telling you effective take state. So up to 36,000 the income is taxed up to 20%. And beyond sales of 36,000 there is no tax.
Sunil Chaudhia
It’s like
Shailesh Raja
That’s where we see a lower tax rate. Okay. On the PLI up front. Yeah. Thank you sir. On the PLI up front. Last year we did not get the PLI because of. Because we were not able to produced in January. But this year we have done so and we are expecting 527 as well. So will the PLI benefits flow what is stable? Hello.
Operator
So you’re audible.
Sunil Chaudhia
Hello.
Shailesh Raja
Yeah,
Sunil Chaudhia
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.
Shailesh Raja
If. If it gets approved, how much would be the PLI percentage
Sunil Chaudhia
Percent on sales incremental sale every year 8% from Chennai.
Shailesh Raja
From Chennai. And total
Sunil Chaudhia
Total Quantum will be 40 to 50 crores in five years time.
Shailesh Raja
Okay, Got it. And sir, I see every year we get around 3 crore of state investment subsidy. I think it would be because of Chennai plant. How many years still we will be getting more to subsidy?
Sunil Chaudhia
No, it is not Chennai. It is indoor. We had done investment in 20, 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 24, 25 crores was sanctioned. And every year we get three and a half four crores. So it is that money coming to balance sheet from NP state government. We get similar subsidy from for our steel cod investment.
Shailesh Raja
Okay. And is this subsidy shown in the P L or is it directly knocking off the capital? No, no, it
Sunil Chaudhia
Is. It is knocking off from the. You know, investment.
Shailesh Raja
Okay. And then for this year what would. What would be our viral volume?
Sunil Chaudhia
We are not assuming any volume. This year maximum it will be two three two three thousand. Okay. But right now we are not talking of numbers
Shailesh Raja
In FY26. I’m asking about the year which has just passed.
Sunil Chaudhia
No, there was nothing from Viro.
Shailesh Raja
So there was some other wire also we do which come to be around 34 which is 14,000
Sunil Chaudhia
Tons. Which was 14,000 tons in indoor factory.
Shailesh Raja
14000 run for FY26.
Sunil Chaudhia
Yes.
Shailesh Raja
Okay. And our 1718 growth projection and 1 lakh 55000 volume projection include this these 14 000. Right?
Sunil Chaudhia
Yes. Yes. Yes.
Shailesh Raja
Got it. And then last on the competitor competitive upfront like we have been hearing that competitor has done in excess 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 direct 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 the. What would be our strategy
Sunil Chaudhia
If 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 find this kind of margin in last four, five years. Four years at least. Okay. So competition is not new.
Shailesh Raja
And what would be the price difference between our. Our product and their product? Is there any difference or we are at the same levels?
Sunil Chaudhia
Sorry.
Shailesh Raja
Me and our competitor realization. No, no. There’s a big,
Sunil Chaudhia
Big, big, big difference.
Shailesh Raja
We are at on the higher end or we are on the lower end. Any
Sunil Chaudhia
New entrant has to enter with a price cut. Okay.
Shailesh Raja
Yeah. So what makes us different? That it’s our relationship with the clients or what is the difference that they are purchasing 30 years
Sunil Chaudhia
Of. 30 years of hard work and knowledge of this product and relationship. Everything. Yeah. Yeah. Okay.
Operator
Thank you. We have next question from Saroni Aria from Molecule Ventures.
Preet
This call will be recorded.
Sunil Chaudhia
Yeah.
Preet
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 screen code. If I’m right, we have already spent around 70 crores in the wire group pilot project. Right.
Sunil Chaudhia
We have invested 50 crores. Balance will be invested in current year.
Preet
And how much are we expecting to do in terms of revenue from Virus?
Sunil Chaudhia
Peak revenue will be 150 crores. Which will take at least two years to reach.
Preet
That is just for virus.
Sunil Chaudhia
Still called whatever you say. Yeah.
Preet
It’s the same thing.
Sunil Chaudhia
Yeah. Yeah. Same thing.
Preet
Yeah. What first of all led us to venture into this segment because it is completely new for us. And it’s a niche segment.
Sunil Chaudhia
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 Rajathan. 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 is a. It’s a pilot project. I’ll say.
Preet
But industries in this segment would be different. The conveyor belt. Right. So it would not be
Sunil Chaudhia
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, you know, more than 40, 50% from one supplier. Okay.
Operator
So
Sunil Chaudhia
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.
Preet
If, if you could give me enough ideas here about the potential market size of this product and if luckily works out for us, you know, how much it is
Sunil Chaudhia
A niche. It’s a niche product, not a very global market. Itself will be some 70, 80,000 tons. Okay. So.
Preet
But
Sunil Chaudhia
This will also teach us how to make virod wire ropes. So the next project might be wire ropes. Okay. Which are similar in nature and similar in properties and manufacturing process.
Preet
So this, 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 virus. Am I correct in understanding that?
Sunil Chaudhia
Yes. Yes. Yes.
Operator
Thank you. We have the next question from Shashank Kanodia from ICICI Securities.
Shailesh Raja
Yeah. Good evening, Dean. So thanks for the opportunity. So this. Just wanted to check that you’re given a guidance of 13 and a half to 14% sustainable margins for us in the consult basis. So are there any drivers for margin improvement organically, given that we have been ramping new capacities and optimizing the bread portfolio?
Sunil Chaudhia
Sorry, I didn’t get your question.
Shailesh Raja
You guided that. The sustainable margins for us is 13 and a half to 14%, the consolidated level. Right. 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, you know, to 18, 20% that we had in the past of 15, 16% as a basis?
Sunil Chaudhia
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, you know, a good surprise for all of us.
Shailesh Raja
Right. 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? No. No.
Sunil Chaudhia
Nobody gives. Nobody gives.
Shailesh Raja
Okay. Okay. And so last you know there is. There is a fear among, you know that the auto sales might slow down because of some supply chain issues as well as price action orient. So any demand outlook we’ve been hearing from target players regarding, you know, how do they see the market both on the domestic and the export sprint.
Sunil Chaudhia
No, when we meet our customers, everybody is keeping fingers crossed. Okay.
Shailesh Raja
But up till
Sunil Chaudhia
Now there is no negative impact. Okay. But all of us are expecting April. And then lot of it depends on Mr. Trump. Okay.
Shailesh Raja
Is it lastly any take on the corporate intensity? I think no demand supply mechanics in terms of capacity scale domestically and globally. If you can help us understand,
Sunil Chaudhia
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.
Shailesh Raja
Right? Right. Fine. Sir, thank you so much for your input and wish you all the best.
Sunil Chaudhia
Thank you.
Operator
Thank you. We have next question from Vipul Mukwana from Stylus Holdings. Please go. Your line is muted.
Shailesh Raja
Can you hear me now?
Operator
Yes, hello. We can hear you. Yes.
Shailesh Raja
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 Chaudhia
You know Chennai, these 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 indoor continue to operate at 90% capacity utilization and so island. Okay. So our capacity utilizations have been to peak level in both in Thailand and indoor. And Chennai is ramping up. So there will be open capacity in Chennai for the next year.
Operator
Okay. Okay. And the second question would be for Yashwadan as well as you that in case of exports due to the war, was there any situation that sales got affected
Shailesh Raja
Or are in transit or we couldn’t book sales or something of that sort of. Could you throw some light on it?
Sunil Chaudhia
No. As of today other than shipping lead times have increased and there is congestion at Singapore port. There’s
Shailesh Raja
Congestion at the Colombo port. Other than that we have not faced any disruption.
Operator
Okay. In terms of.
Sunil Chaudhia
Incidentally. Incidentally, we don’t have a customer in GCC countries. Okay.
Operator
Okay.
Shailesh Raja
Where the exports
Sunil Chaudhia
Are Totally have come down to zero.
Shailesh Raja
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. From Kapoor. Please go ahead.
Shailesh Raja
Hello.
Sunil Chaudhia
Yes,
Shailesh Raja
Hello. 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 cannons for Q1 contribution from Chennai and then going ahead.
Sunil Chaudhia
So there’s a many. 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.
Shailesh Raja
Okay. So last year Tanish was 17,000 on installed capacity of 30,000. Now this year on installed capacity of 60 we are expecting 34,
Sunil Chaudhia
3435. Yes.
Shailesh Raja
Capital work in progress. Closing balance. How will this shape up force this commercialization.
Sunil Chaudhia
Everything will be capitalized. So you will see a very a small number in wip. All this will be capitalized and up and running.
Shailesh Raja
Okay. When we. When we look at this number for say 20 crore increase in the console. This is pertaining to the Thailand unit. That is the debottle making exercise we are doing. Or Thailand number is
Sunil Chaudhia
Very small. Thailand number is very small. On consolidated basis all this is Pitampur steel card project and Chennai balancing equipments. There is no other wipe.
Shailesh Raja
Okay, so and in that case then the 50 crore number which you have said for the Steel court part. How much have we invested?
Sunil Chaudhia
Okay.
Shailesh Raja
Okay.
Sunil Chaudhia
Yeah.
Shailesh Raja
Okay. And and Steel court will be commissioned. This 50 crore project will be commissioned by
Sunil Chaudhia
Second. We’ll start trials in second quarter. But third quarter we should be able to capitalize.
Shailesh Raja
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. That is the factor already there. So how much?
Sunil Chaudhia
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
Shailesh Raja
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 administer we were also looking for some new geographies earlier Japan 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. In the. In the numbers we have mentioned within USA the revenue at 118 crore so how was tariff affected?
This case number two U. S
Sunil Chaudhia
I think yes or then will be better but we’ll be giving a guarded answer don’t expect us to tell you everything
Shailesh Raja
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 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
Sunil Chaudhia
The same but because they have various factories in the world we are trying to explore opportunities around the globe
Shailesh Raja
Just to make things understandable thank you sir, can we request
Operator
You to come again in the question
Shailesh Raja
Just what was mentioning? I was just trying to make sense of if I may and then I joined in. You were mentioning that we are setting up infrastructure so this is excluding the one we have or. I could not understand that
Sunil Chaudhia
No, I meant to say we’ve been sharing updates about this every quarter it started with setting up marketing teams two
Shailesh Raja
Years back which has now reached two approvals from customers from various geographies There is no specific region 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
Sunil Chaudhia
I just wanted to explain that our efforts are all over
Shailesh Raja
I joined the queue on the TED if you please answer in the follow up how was tariff impacted under 18 crore revenue from USA how has tariff rated part there? Thank you.
Operator
Thank you sir we have a next question from Matissa from Sapphire Capital.
Unidentified Participant
Yeah. Hello.
Sunil Chaudhia
Yes.
Unidentified Participant
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. On the US side. Did we have the sales, most of the exports from India or from Thailand, any cash. So
Sunil Chaudhia
You know, 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.
Preet
Your question on.
Sunil Chaudhia
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.
Unidentified Participant
And
Sunil Chaudhia
I answered the earlier question also with this. Yeah.
Unidentified Participant
Secondly, on the Chennai plant, so 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 increasing our capacity in Chennai, we actually doubling and 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 sour 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 Chaudhia
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, you know, kind of margins 18, 20%
Unidentified Participant
Which
Sunil Chaudhia
Are not there but 13, 14 is a decent margin to even plan an investment. Yeah.
Unidentified Participant
Okay. So currently the sales from Chennai are also. Yeah. So they are in the range of 13 to 14. Yeah.
Sunil Chaudhia
Yeah. Yes, yes. Thank you.
Unidentified Participant
Sorry.
Operator
Okay, we have next question from Pitani from nk. Please go ahead.
Shailesh Raja
Thank you for the follow back opportunity. Sir. On we have mentioned that we have raised the bike or raised the price or passed on the cost from Q1. So is it fair to assume that the 84, 85, 86,000 average realization would. Would improve about 90000 from for this FY27?
Sunil Chaudhia
Yeah, it has improved.
Shailesh Raja
It has gone beyond 90000 is my understanding, right? Yes.
Sunil Chaudhia
Yeah, yeah,
Shailesh Raja
Yeah. And this we are taking price egg. 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 now?
Sunil Chaudhia
It’s. 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 Madrid 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 ir. Otherwise we can’t remain competitive in the global market.
Shailesh Raja
Yeah, but. So 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 Chaudhia
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.
Shailesh Raja
Yes. Yes.
Sunil Chaudhia
Ireland and your subsidiary are same. There is no change in their business. No substantial change in the business. Yeah,
Shailesh Raja
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? I think. What is
Sunil Chaudhia
That one minute highlight the beta margin for quarter four. I think we’ll give you this answer separately. I don’t have that calculation right now.
Operator
Thank you. Sir, we have a follow up question from. Please go ahead.
Preet
Just. I just want to clear up one confusion. Basically you said that the global market price for steel cord is 70 to 80,000 it’s the same as the wire.
Sunil Chaudhia
Sorry, come again.
Preet
You said that.
Sunil Chaudhia
No,
Shailesh Raja
It’s different than wire rope. It’s different than wire rope. What we tried explaining is the method to produce steel cord for conveyor belt is very similar to W. So by this project we’ll be able to also understand how to how do like wire rope. So that’ll give us an experience to make wire.
Preet
Right? Because earlier in the concourse part controls we mentioned that we were setting up 10,000 tons capacity for wire ropes which now. Right now it’s for steel cord. Yes.
Shailesh Raja
Yeah,
Sunil Chaudhia
Same. Okay. We had bought the machines for making viro. But steel cord is one of the viral products you can take. Okay, so application of galvanized steel rope for making conveyor belt then it is called steel card. But 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 Mrs. Follow Up Question from Kapoor.
Shailesh Raja
Yes sir. Only just to summarize in what 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. On what? Explain that. And secondly.
Sunil Chaudhia
And we are not expert of auto industry but we continue to see a good demand from our customers which are tire companies.
Shailesh Raja
Can you give me the absolute impact on the editor because of the increase in RN which we do not pass on.
Sunil Chaudhia
I told you it is about 4, 4 and a half percent in the EBITDA margin. If you look at our raw material consumption percentage from 57 has gone to 63%.
Shailesh Raja
Okay. And this is normalized in Q1 question.
Operator
Yes, we have next question from Incad MC.
Shailesh Raja
Yes, thank you for the opportunity. Sir, you mentioned to one of the previous participants that 88 crore capital working progress include 2530 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 of.
Sunil Chaudhia
Machine supplier co 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.
Shailesh Raja
So these are. 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 25 more for addition.
Sunil Chaudhia
Yes,
Operator
Thank you. We will take that as our last question for today. I now hand the conference over to Mrs. For closing comments.
Sunil Chaudhia
Yeah. Thank you all. Sir,
Shailesh Raja
Would you like to make any closing comment
Sunil Chaudhia
Yeah. So the same comments, you know, unless there is a global change in the situation or something new comes up, I think Rajasthan 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 Rajutan critically. And thank you for asking very critical questions. We would love to answer all the questions but or, you know, because sometimes all of 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
Thank you. Thank you, sir. On behalf of 361 Capital Markets. That concludes this conference. Thank you for joining us. And you may now disconnect your lines. Thank you.