RAMKRISHNA FORGINGS LTD (NSE: RKFORGE) Q3 2025 Earnings Call dated Jan. 17, 2025
Corporate Participants:
Lalit Khetan — Whole Time Director & Chief Financial Officer
Milesh Gandhi — Whole-time Director
Naresh Jalan — Managing Director
Analysts:
Manav Shah — Analyst
Chirag Shah — Analyst
Shaleen Kumar — Analyst
Kanchi Shah — Analyst
Analyst
Dhaval Shah — Analyst
Devvrat Mohta — Analyst
Viral Shah — Analyst
Khush Nahar — Analyst
Vidrum Mehta — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to Ramkrishna Forgings’ Q3 FY ’25 Earnings Conference Call hosted by Nuvama Wealth Management. [Operator Instructions] I now hand the conference over to Mr. Manav Shah from Nuvama Wealth Management. Thank you, and over to you, sir.
Manav Shah — Analyst
Thank you, Steve. Good evening, everyone. On behalf of Nuvama Wealth Management, I would like to welcome you all to the Q3 FY ’25 Earnings Call of Ramkrishna Forgings. I would like to thank the management for giving us this opportunity.
From the management team, we have with us today Mr. Naresh Jalan, Managing Director; Mr. Chaitanya Jalan, Whole-Time Director; Mr. Lalit Kumar Khetan, Whole-time Director and Chief Financial Officer; Mr. Milesh Gandhi, Whole-time Director, Marketing; and Mr. Rajesh Mundhra, Vice President, Finance and Company Secretary.
Before we begin, may I remind you of safe harbor. The management may be making some forward-looking statements that have to be understood in conjunction with the uncertainties and the risks the company faces.
I shall now hand over the call to Mr. Lalit Kumar Khetan for opening remarks. Over to you, Lalit, sir.
Lalit Khetan — Whole Time Director & Chief Financial Officer
Thank you. Good evening, and best wishes to all participants for a happy and prosperous new year. Amid continued macroeconomic challenges, I am pleased to report a robust performance for the third quarter. The demand for light vehicles and two-wheelers remains encouraging in both domestic and international market, though demand for commercial vehicles has moderated comparatively.
Despite the moderation in CV demand, we have achieved strong volume growth driven by increased business share across several customers and momentum from new component pipelines. We are able to achieve this due to focus on value-added products and excellence in product engineering.
Our strategic focus on diversification continues to move ahead. We are excited to say that our offerings for two-wheelers and passenger vehicles are set to launch in upcoming period, adding further growth avenues in the automotive sector while reducing our current high dependence on the commercial vehicles.
The quarter has seen further progress on integration and capacity ramp-up of our recently acquired subsidiaries, including tying up of financing. These efforts will result in enhancement of capacities in forgings while adding capabilities in castings, allowing us to diversify beyond predominantly forging-based industry.
We have already announced that aluminum forging facility of 3,000 metric tonne at Jamshedpur in the last quarter. This initiative will cater to electric vehicle segment forming a foundation for our plant to address opportunity in this segment. Additionally, we are going to commence very shortly the cold forging capability of 25,000 tonnes and in the very near term hot forging capability of 40,000 tonnes.
In North America region, Ramkrishna Forgings in Mexico has also commenced, its operation, positioning it as a strategic hub to serve our international business in the region. As we previously indicated to you all, we expect growth momentum to accelerate in the second half of next year, or rather to start in the next financial year. Our initiative, including diversification within the automotive sector and steady expansion into non-automatic segments such as oil and gas, railways and farm equipment, position us well — position us well for balanced and sustained growth.
To summarize it, growth drivers in the near and medium term will be the new products, new customers, new verticals being served and new capacities. Now let me share our financial performance highlights for the third quarter of financial year ’24-’25. Revenue for the quarter — consolidated revenue for the quarter stood at INR1,073.78 crores, depending year-on-year growth of 8% in value terms and 13.9% in volume terms.
Consolidated turnover for 9-month period is INR3,086.89 crores versus INR2,730 crores. That is a 13% growth on a year-on-year basis. Due to increase in raw material prices, the realization for the 9-month period is lower by 3%. Otherwise, the revenue for this 9-month period may have been higher by 3% in this period.
EBITDA for the quarter stood at INR231.52 crores on consolidated basis versus INR219.72 crores, an increase of 5.4% year-on-year. And EBITDA margin stood at 21.6%, which is moderated by almost 30 basis points from the previous quarter. And this is mainly due to the expenditure incurred by the company in its Mexico subsidiary, which has just started operations. So the expenditure — and that’s almost a five-fold expenditure on the Mexico, otherwise, EBITDA could have been higher by INR5 crores in this quarter.
Consolidated EBITDA for 9-month period is INR668 crores versus INR607 crores in the year-on-year basis. That is a 10% increase on year-on-year basis. Profit after tax is INR99.61 crores in Q3 FY ’25 compared to INR86.86 crores, that is, again, a 14.7% increase year-on-year basis.
Just want to, one financial highlight, the company has also got a AA stable rating from CRISIL during the quarter and a long — for long-term debt and A1+ for the short-term debt. Our leverage remains comfortable with adequate headroom and — to support our growth plans.
With that, I conclude my remarks. I would like to hand over to my colleague, Milesh, who will provide an update on our Asian business. Over to Milesh.
Milesh Gandhi — Whole-time Director
Thank you, Lalit ji. We have secured orders during the quarter for INR697 crores to be executed over a period of four years. This mainly come from the non-auto sector. That’s from my side. Thank you.
Lalit Khetan — Whole Time Director & Chief Financial Officer
So Steve, you can now take it forward and open the house for the Q&A.
Questions and Answers:
Operator
[Operator Instructions] The first question is from the line of Chirag Shah from White Pine Investments.
Chirag Shah
Congratulations for a good set of numbers in this tough environment. So my first question is with respect to Slide 41, where we have shown almost 50% increase in installed capacity by end of ’25. I just wanted to understand, based on the current demand environment plus the order of new business orders that you expect, when do you — by when can we see the optimum utilization of this incremental capacity? And if you can throw more color in terms of granularity how to — from this segment, which — how do you look at this utilization?
Naresh Jalan
Our FY ’25 capacity addition, whatever is happening, basically, it is in different from forging, casting every — I think, Lalit in his opening statement also has said, that the capacity addition is across subsidiaries and parent in terms of RKFL. And we have assured businesses, whatever order wins, new order wins we have had.
And this capacity, which has been put up has already been declared in different times in past quarters of 8,000 tonne plus cold forging, which is now going to start in this month onwards. And similarly, addition of casting plant of 30,000 tonne capacity, which has already been informed to stock exchange. And we have order pipelines, accordingly, new order wins, which have been announced is basically catering to these capacities itself.
Chirag Shah
Sir, my question was, so over two years, can we assume that utilization can happen? Because, it will not happen at one go, right? Once you start — have the capacity, say, by March ’25, it will take some time for you to stabilize and then ramp it up?
Naresh Jalan
No, entire — we are estimating these capacities to be up and running. And I think the capacity utilization in staggered manner is going to be utilized. I think we are looking at almost getting to 80% plus utilization by last quarter of FY ’26.
Chirag Shah
Large quarter. So that basically means almost 30%, 35% kind of a potential volume growth in ’27? That’s how I — if the demand environment supports.
Naresh Jalan
We are looking at almost 15% to 20% — 15% to be precise, we are looking at approximately 15% year-on-year growth for next two years.
Chirag Shah
Next two years. This is helpful. And the second question is on the profitability. See, I understand margins. But in general, be it on per tonne basis or per kg basis, is there scope to further increase our profitability? I am not focusing on EBITDA margin as such percentage wise, but given the way the quality of product is improving for us, the traditional EBITDA per tonne profit metrics that we had, can you there see a significant improvement?
Naresh Jalan
Chirag, this quarter itself, our gross margins have been much better than the previous quarter. If you calculate and see the gross margins have improved considerably. And going forward also, gross margin is going to continuous to — it’s a continuous effort. Maybe it may not happen every quarter, but you will see significant expansion in margins in gross margins in coming quarters and years.
Chirag Shah
Yes. And sir, last question, if I can or a suggestion, sir. Now that our focus is on consolidated performance and the share of standalone is likely to keep on reducing in overall scheme of things. In the presentation, if you can figure out a way of giving a consolidated volume data, operational volume data, it would be helpful, sir. Because in all our discussions, we focus on consolidated performance. So, and our presentation is more about stand-alone volumetric data. So if possible, over a period of time, if you can just figure out how you can add the volume data of the subsidiaries or on consolidated basis, it would be helpful, sir.
Naresh Jalan
Sure, we will try and do it.
Operator
The next question is from the line of Shaleen Kumar from UBS.
Shaleen Kumar
Naresh ji, can we get a status on the ACIL units? Like are they operational or what.
Naresh Jalan
ACIL business?
Shaleen Kumar
Yes. ACIL business.
Naresh Jalan
ACIL business, I think, from this quarter onwards, in the current quarter, as we speak, is going to start making profits. So I think in the last quarter, it was not making profits. We are — we had incurred, I think, in last quarter about almost around INR5 crores losses over there. But most of our products in two-wheeler and as well as farm equipments have been approved — as we approved it end of December. And this quarter onwards, almost with RKFL own forging, this subsidiary is going to start performing and doing — is supposed to do well. And we are expecting quarter-on-quarter at least a growth of almost 25% to 30% in terms of top line and significant improvement in bottom line from this company.
Shaleen Kumar
So 25%, 30% growth in ACIL unit or RKFL?
Naresh Jalan
ACIL.
Shaleen Kumar
ACIL growth. And sir, any sense of how much ACIL has done?
Naresh Jalan
ACIL in last quarter, I think, it did INR16 crores. This quarter, we are expecting in absolute terms to be as closer to INR30 crores, it means, around anything between INR27 crores to INR30 crores, we should be there. Next year, we are looking at a considerable growth, because the full year performance, we should be somewhere around — in ACIL around INR200 crores plus.
Shaleen Kumar
This is both the plants we’re talking about or it is only one plant?
Naresh Jalan
ACIL only one plant is there. ACIL.
Shaleen Kumar
Manesar.
Naresh Jalan
Manesar is the only one plant ACIL.
Shaleen Kumar
And the Jamshedpur unit, sir?
Naresh Jalan
Jamshedpur does not have ACIL plant.
Shaleen Kumar
New unit. I wanted to get the status on the new unit of Jamshedpur plant. What’s the scene over there of the plant number 8?
Naresh Jalan
Plant number 8 is the casting plant which we are setting up, I think that is going to be up and running since April ’25 onwards the capacity is going to go into production. And we have a strong order book of castings from there. And we are looking at almost by third quarter to reach 70% utilization from that capacity. And by last quarter, we should be doing almost to the tune of 85% to 90% utilization on this capacity.
Shaleen Kumar
And what kind of revenue are we looking at?
Naresh Jalan
We are going to sell machine casting. So I think, Lalit can tell you the average realization should be close to around INR130, INR135 per metric tonne, in terms of casting. Lalit, if I’m right, please?
Lalit Khetan
Sir, it is a little more. It will be somewhere around INR150.
Naresh Jalan
INR150 per metric tonne is going to be the — and that is what we are looking at from that capacity in next year.
Shaleen Kumar
Got it, sir. Got it. Sir, just there is a bit fall in our export volumes sequentially. Is it largely because of the auto side sea side?
Naresh Jalan
No, Shaleen, every year, if you see, because being a Christmas, New Year month, there is a 15-day holiday. So we get only 2.5 months of working. So basically that is — and that is the phenomena every year. It starts from first quarter, second quarter — because we operate from April to March, they operate from January to December. So end of December 15 days, probably there is practically no offtake or dispatches. So accordingly, we need to readjust our dispatches of inventories. And that’s every year, if you see our exports, the strongest quarter for us is the current quarter, which is going on. And the last quarter means, December quarter, third quarter for us is the leanest quarter.
Shaleen Kumar
Weakest quarter. Got it. Last question, I had. I have many more, but let me ask last question and then I’ll go back in the queue. Sir, can we get a little bit more color on the new order book which you have talked about some INR600 crores plus, which is non-auto. So in terms of which segment, which geography, any more sense on that?
Naresh Jalan
It is more, I think, Milesh, are you there?
Milesh Gandhi
Yes. So when I stated that we have received this INR697 crores order book during this quarter, INR600 crores has come from the mining and earthmoving segment; around INR54 crores have come from oil and gas segment; and around INR43 crores have come from railway segment.
Shaleen Kumar
So this mining segment, is it domestic or export?
Milesh Gandhi
This is complete export.
Shaleen Kumar
Complete export. Okay. Just last bit, sir, before I go back in the queue. Sir, Trailer Axle, how much it has contributed to the run rate, etc?
Lalit Khetan
So Shaleen, the Trailer Axle, this quarter is about INR28 crores.
Shaleen Kumar
Almost INR10 crores per month.
Lalit Khetan
This quarter, INR28 crores.
Naresh Jalan
And, Shaleen, to be more substantiative on Trailer Axle, I think, we are doing extremely well. And we are looking at almost doubling our sales from Trailer Axle in the coming financial year. I think, this sector is doing extremely well. Our product launches have been extremely good. Product has been well accepted by the market. And in 9 months of sales, we have reached a quarterly sales of around INR27 crores, INR28 crores. And we are looking at almost doubling the sales in the coming financial year, on quarter-on-quarter basis.
Shaleen Kumar
So INR200 crores plus, sir?
Naresh Jalan
Yes. We are looking at almost doubling our sales next year from this sector.
Operator
The next question is from the line of Kanchi Shah from MC Research.
Kanchi Shah
So is it possible that you can give us the breakup of revenue segment-wise, like how much was from the commercial vehicle, passenger vehicle, and non-auto, etc?
Naresh Jalan
No, I think we have, in our presentation, given the details in auto, non-auto, we have given the entire breakup like domestic auto, railways, mining and miscellaneous. And in exports, we have given auto and oil and gas and others. So basically, in auto we are — it is difficult for us to break up into PV, LV and all these sectors.
Operator
The next question is from the line of Vijay Pandey from Nuvama.
Analyst
Sir, I have two questions. One was, I wanted to check on what is your long-term view on the like exports, that like, what is your target, especially coming from the auto sector in the export segment? It has been slightly declining, and we know that auto sector in general outside India has been on declining trend. So just wanted to check, are you planning to move to increase share in other segments in the export?
Naresh Jalan
No. While we — our continuous endeavor is to continuously improve in terms of all the segments, but I don’t see a decline in terms of our exports to our — in auto sector. And we continue to gain new orders, new segments within the auto sector and continue our vision of growing our exports into automotive plus non-automotive. With the new automotive order wins, we are growing our business in export, but that does not mean that we are — anyway, our exports to automotive segments have declined.
You can — I think, if you only see the month of quarter of — third quarter, but I don’t see that there is a decline in terms of our fourth quarter exports to auto segment. In 9 months, we have done almost — last year, we did 37.4% in terms of our automotive exports. This year, we have done almost 37.8% automotive exports. So I think, we are well on track with the growing top line. We are maintaining our percentage in terms of overall contribution in revenue.
Lalit Khetan
Just to add here — just to add here, we have done an export of INR1,172 crores for the 9 months versus INR1,070 crores for the previous year. There is a growth of almost 9.5% in the current year in the exports revenue. And that is mainly consisting of exports — auto only.
Analyst
Okay, sir. I just wanted to confirm up on the pricing, the average realization, if you can just guide us how it looks like, how would the realization will look like for the fourth quarter and for FY ’26? Is it going to be broadly in line, or do you expect to increase it.
Naresh Jalan
No. I think, right now, it is very difficult to comment. Realization is directly linked to raw material pricing. And it will depend on how the raw material — steel continues to perform. And if steel declines, we — I don’t think there is going to be any decline. We are more concentrated on our conversion margin. And I think, in terms of our conversion margin, we are keeping on increasing. And that’s the reason our realization still remains intact while there is a raw material decrease in last quarter. Our realization has not impacted — been much impacted in terms of the overall drop in steel prices.
Analyst
So you — in the case of the steel prices increases, we will be able to pass on the price increase?
Naresh Jalan
Yes.
Operator
The next question is from the line of Dhrumil Wani from Girik Capital.
Dhaval Shah
Dhaval Shah, this side. Sir, great set of numbers. Congratulations. Only one question I have. If you can help us understand the cost saving initiative which we had taken by onboarding a consultant. So how is that progressing? And is it getting — the benefits are getting lost in the other operational expenses, which we are doing for our expansion plus Mexico and plus other subsidiary investment. So ex of that, how are the — where is the cost saving benefit visible on the P&L?
Lalit Khetan
So Dhaval, see, the cost saving benefits are continuing and result will certainly will come in the year — in the upcoming year, as we exercise in the midst of the — already at a quite advanced stage and in progress. So just wait for some time, then we will elaborate more on that.
Dhaval Shah
Got it, sir. And just one more. This utilization about 80% by the fourth quarter of next year, you mentioned on the consol level. Am I correct?
Naresh Jalan
No, it is for the casting plant.
Dhaval Shah
Of the casting plant. Okay.
Naresh Jalan
Yes, which we are just setting up the capacity.
Dhaval Shah
Okay. And the expanded capacity, which is 392,000 tonnes, at the — including subsidiary, on that utilization, what you had commented?
Naresh Jalan
392,000 tonnes includes casting facility. So from — right now, casting facility inclusive it is 266,000 tonnes, and that’s why it is going to move to 392,000 tonnes. So individually, I think in terms of casting capacity, 62,000 tonnes, we are looking at almost 80-plus percent utilization in the coming year. And in forging, we are looking at almost 15% growth in the coming year from where we end this year.
Dhaval Shah
On the forging side. Okay. Okay. So currently, since the consol volume is not mentioned, so the existing forging is only 4,000, right, in the subsidiary under RKCSL?
Lalit Khetan
Yes, correct. RKCSL, we have only 4,000 casting — forging capability right now. 18,000 is under commissioning. So this will also.
Dhaval Shah
Okay. So this would be — so there, we have started the production. Out of this 4,000, how much did we.
Lalit Khetan
Yes. So if you look at the precise number, I don’t have the exact number. We have produced around 500, close to 600 tonnes of forging in this quarter.
Operator
The next question is from the line of Devvrat Mohta from Capital International.
Devvrat Mohta
Just one quick question. I wanted to understand, between Q2 and Q3. On a consol basis, EBITDA did not really grow a lot. Like what’s happening on a quarter-on-quarter basis? Like why is it not growing?
Naresh Jalan
No. EBITDA has grown, Devvrat. I think, if you see the overall expense side, there are a few things which are not — if you see, the raw material decrease, which has happened in this quarter is basically close to around INR3,000 per metric tonne in the domestic side and in export close to around INR4,500 per metric, which has hit our inventory available with us, plus the warehouse and what was material in transit. So all this has been accounted for in this.
And second, is our other expenses, which have gone up by almost INR13 crores, which includes the — around INR7 crores is on account of labor wages, means the, blue-collar labor, which are basically contractual labors, the minimum wages which has gone up in India, for that and plus INR6 crores for the expenses, which we incurred for setting up our entire booth in Hannover Fair. So all these taken together, if you see, the overall impact has been close to 2.5% of the EBITDA, which we could have got in case these expenses would not have been there.
Devvrat Mohta
So Lalit ji, how much would be the impact from just this inventory — Q-o-Q inventory impact on the consol basis? Just the inventory, not Hannover and labor cost.
Naresh Jalan
Inventory hit is close to — Lalit, what is the exact inventory quantum hit?
Lalit Khetan
So, it will be somewhere around INR12 crores to INR13 crores, value terms.
Devvrat Mohta
Got it. Got it. And this is basically, you are saying that it is your pass through…
Naresh Jalan
Labor wages, Hannover and this taken together is close to around 2% of the EBITDA, basically. That is what we feel. 2.5%.
Devvrat Mohta
So the labor wage — but the labor wage is a recurring thing, right? That will happen even next year, right?
Naresh Jalan
No, that is not a recurring thing. Basically, what happens, this was — there was a substantial VDA increase in this quarter, but because of election, it was not there for the 6 months, and suddenly in the month of October, the back effect was given and from 1st October it was increased. So entirely came in one quarter at one stroke.
Devvrat Mohta
So then, this will not — so next quarter, for example, this will not recur, is it?
Naresh Jalan
In this current quarter, it will not recur.
Devvrat Mohta
So this is INR6 crores onetime because of whatever — because of whatever reason, there is INR6 crores extra.
Naresh Jalan
The Hannover Fair also is the onetime expense, which happens only every three — once in three years.
Devvrat Mohta
Got it. Okay. Understood. And the — and just — so you’re saying basically, all of these three things put together is about 2% of EBITDA margin?
Naresh Jalan
Yes, what we feel.
Devvrat Mohta
Understood. And just your forex loss that you have, you basically explained that steel is a pass-through — effectively a pass-through. And so, you want — so, basically.
Naresh Jalan
With a one-month lag, we have to pass on.
Devvrat Mohta
You pass it on. So, then you — so on whatever inventory that you have, you take a write-down, but when you sell it, it’s already sold at a particular — can you explain the contract a little bit, just exactly how it works?
Naresh Jalan
No, basically, material, which is in sea and in my warehouse, and like Europe or LLC, in RKFL LLC, with the warehouse which we have in U.S., whatever inventory is sitting there on the day we invoice, that is the day the rate is applicable, whether it is increase or decrease. So we need to take a hit in the inventory plus whatever material like two months of inventory for all the exports as — in some cases it is 30 days, in some cases it is 40 days. We need to maintain inventory in our plan to basically adjust to ramp up or ramp down. So that inventory also gets the beating on that.
Devvrat Mohta
Got it. But sir, for example, if you buy steel at INR100 and you sell it at — I mean, the day the sale is made, steel is at INR98, that INR2 inventory that is sitting in your books, you take a hit on it. But with the customer, so my question is really eventually you’ll get paid for this or you don’t get paid for it?
Naresh Jalan
No, I don’t get. If there is a steel decrease, if INR100, if there is a INR3 steel decrease, then INR3 get — I get paid on INR97. And if there is a INR3 increase, I get paid whether I am — I bought it at INR100, I’ll get at INR103. So either side, if there is an increase, I get paid extra. And if there is a reduction, it will get deducted.
Devvrat Mohta
Understood. Okay, fine. And this is basically on whatever steel that you have, which is either lying in your godown or it’s on the sea, basically?
Naresh Jalan
Yes.
Devvrat Mohta
Got it. Okay. Perfect. So basically adjusting for this, your EBITDA should have been roughly, I mean, INR20 crores higher, INR20 crores to INR25 crores higher?
Naresh Jalan
INR22 crores higher, roughly.
Operator
The next question is from the line of Viral Shah from ENAM Holdings.
Viral Shah
Sir, first I just wanted to check on the net debt number, what would that be at the end of the quarter?
Lalit Khetan
So net debt number, right now, we are with 1,244 at the end of quarter.
Viral Shah
Okay. So it’s flat largely on a quarter-on-quarter basis?
Lalit Khetan
No. So it’s up by almost INR250 crores quarter-on-quarter.
Viral Shah
This is a consolidated number, right?
Lalit Khetan
I was talking about the stand-alone. Consol number is somewhere around INR1,500 crores.
Viral Shah
Okay. Okay. Okay. Secondly, can you just throw some light on the working capital? How is it? I think, in the previous quarter it was slightly elevated. So how are you seeing working capital coming along?
Naresh Jalan
I think, it is still elevated, Viral. Because right now, because of the Red Sea issues, transits whatever were delayed, it still remains. I think, this quarter, we will see a fairly good reduction in the debtor days.
Viral Shah
Okay. Okay. So where do you see this debt number by the end of the quarter, because.
Naresh Jalan
I think it will be flattish.
Viral Shah
It will remain flattish.
Naresh Jalan
Yes. It is elevated because of the debtors. And I think, by the year-end, it will even get to flattish — by financial year-end.
Viral Shah
When you mean flattish, it will remain at this level? Is that?
Naresh Jalan
No. I think, we are looking at close to around 1,240 consolidated debt levels by the year end.
Viral Shah
Okay. Okay. Sir, second just a clarification on the casting announcement that you made. So in one of the slides, you have said that your capacity by the year-end will be 392,000, including casting capacity expansion from 33,600 to 62,400. Does this number include the 30,000 expansion also or this does not include?
Naresh Jalan
No. This includes the 30,000 tonnes capacity, which we are planning to put up.
Viral Shah
So just mathematically, if I subtract 62,400.
Lalit Khetan
Mathematically, there is a little adjustment there. It has to be 63,000 tonnes, there is an error in printing. It has to be 63,600, instead of 62,400.
Naresh Jalan
1,200 tonnes by mistake has got missed out.
Operator
The next question is from the line of Khush Nahar from Electrum PMS.
Khush Nahar
Am I audible?
Naresh Jalan
Yes, you are audible.
Khush Nahar
So my first question was, I see that the last three quarters, our gross margins increased substantially to 58%, 57%. So can you — what are the major attributes for this increase in gross margin compared to our earlier years?
Naresh Jalan
No, basically, the addition of new portfolios, which are coming in like Trailer Axle, suspension. And all these items which we have started and main — majorly moving into large assemblies is helping us to improve our gross margins.
Khush Nahar
So going ahead, we see further improvement? Like what kind of sustainable EBITDA margins we can do?
Naresh Jalan
I think, it is not going to be every quarter to be precise. But yes, for the full year, next year, we are looking at substantial improvement.
Khush Nahar
In our EBITDA margins?
Naresh Jalan
In our gross margins.
Khush Nahar
Gross margins. Okay. And sir, any particular reason that depreciation is a bit lower than last quarter, the quarter three FY ’24 versus ’25?
Naresh Jalan
Lalit?
Lalit Khetan
On the EBITDA margin?
Naresh Jalan
No, depreciation.
Khush Nahar
No, absolute depreciation.
Lalit Khetan
Absolute depreciation, there was a correction last year, if you look at, the last year, we did the adjustment in the machining life. Machine assets like we have increased the useful life. That was done in March ’24 numbers. So that’s why it is quarter-on-quarter. If you look year-on-year, it looks decreasing. Otherwise, quarter-on-quarter, it is increasing. So it has gone down from the March ’24 quarter.
Khush Nahar
So the current level is a sustainable quarterly run rate?
Lalit Khetan
Yes.
Operator
The next question is from the line of Aditya Gupta, an Individual Investor.
Analyst
I first of all wanted to inquire about the current estimated go-live dates of the various plants. So we have the 25,000 cold forging line and the 14,250 that I’m guessing we are saying should come up this quarter. Is that right?
Naresh Jalan
It is going to come up in this month itself. We have already submitted our samples and already we have started manufacturing samples. Once we start serial production, which probably I think is going to be in this month itself, we are looking at almost by last week of this month to go live in cold forging.
Analyst
As well as the 14,250?
Naresh Jalan
14,250 means?
Analyst
14,250 forging plants.
Lalit Khetan
Our sector capacity is also under commissioning, our sector capacity of 14,250 is also under commissioning. This will also commence within this quarter.
Analyst
This quarter, Understood. And can you give similar go-lives for the 40,000 hot forging aluminum, the 18,000.
Naresh Jalan
I think the 8,000 tonne Press and Aluminum forging both are going to go-live by July coming years — sorry, in this current year by July.
Analyst
July ’25?
Naresh Jalan
July ’25.
Analyst
And for the subsidiaries, we have 18,000 tonne forging capacity and a 28,000 tonne casting capacity.
Naresh Jalan
18,000 tonne forging is going to go-live in this quarter itself by the end of this quarter in the subsidiary. And in casting, it is going to go live by April ’25 almost about 80% of the capacity and balance is going to go live by July of ’25. So the capacity expansion from 266,750 to 392,000 plus almost by July, we are going to be done with all these things and the capacity — entire capacity is going to be in place.
Analyst
Understood. And old expansion in the subsidiary of 28,800 is now what we are — is the same thing that we now are seeing is a 30,000 capacity increase. I’m just ensuring.
Naresh Jalan
Yes.
Analyst
Okay. Understood. And just one — and on the same thing, like on the 25,000 cold forging, I think, from about a year ago, we have been saying that we are fully booked in advance in terms of order for this capacity. And in spite of that, we have delayed this plant by almost a year, so.
Naresh Jalan
I think, we have not delayed the plant. It is basically, because of the Red Sea issue, first of all, the plant came in three months delayed. And because of the kind of automation and complexity it is to establish the plant, the equipment manufacturer took almost 6 months time. And now for since, December, we are already making samples and other things. We are going to go live like by this, confidently telling you by the month end, January end, we are going to start serial production. And any new project or any new technology which we bring in, sometimes they have their own complications. And that’s the reason it takes more than estimated time. And that is what has happened.
Analyst
Understood, sir. And just one last question from my side. Like because of the, like, current uncertainties around like trade regulations, particularly for the U.S., any thought work that we might have ongoing for our Mexico plant? And earlier as well, we had mentioned that we might invest more over there for — from a capex point of view. Just wanted to hear what your thoughts are around the same?
Naresh Jalan
No, I think our Mexico operations are going as per plan. I think, it’s slightly delayed, but it is on track and we are expecting that to go full on in the coming year, and we have already received almost a $5 million new order of conversion over there in our Mexico operations. So we are looking at this as an exciting opportunity in Mexico. But regarding these trade issues, which after the regime change, we are hearing a lot of things. But I think, it is — we are — whatever we are manufacturing in Mexico will be sold by us in within Mexico. And I don’t know what my customers ultimately are going to do with the product, how they are going to take it to U.S. or what they are going to do. So I am not much of concern with that. So I would not like to comment also in that.
Analyst
That makes sense. And then, just on the same line, like a lot of our growth over the last few years has been export based. And so, it’s like on similar lines, do you foresee like what’s your thought process on risks or challenges that might come from these? Definitely…
Naresh Jalan
No. I think, not only in exports, we have grown both domestically and both in exports. And I think, in my — in the opening statement of Lalit as well as my statement in the presentation, we have very well highlighted our next level of growth from PV and two-wheelers in the domestic segment and the farm equipment are going to be one of the biggest catalysts for growth in the coming few years — coming few quarters and as well as coming couple of years.
So — and as well as the non-auto segment, new order wins, which has happened in North America to the tune of close to around INR600 crores. So obviously, all these deals taken together, we are very confident of our performance both in export and the domestic segment.
Operator
The next question is from the line of Manav Shah from Nuvama Wealth.
Manav Shah
Just one question. Can you share the order wins for the quarter and the breakdown of it?
Naresh Jalan
I think, Manav, it is already there in our presentation. And I think, Milesh has also in his opening statement — Milesh, can you again elaborate it?
Milesh Gandhi
So in this quarter, INR697 crores order book has been received to be executed over a period of four years, in which I specified INR600 crores came for an export order for mining and earthmoving industry, INR54 crores came from oil and gas, and from railways, we’ve got a INR43 crore order book.
Operator
The next question is from the line of Chirag from White Pine Investments.
Chirag Shah
Lalit ji, just one question on this INR depreciation. If you can help us understand how does it help us, because there is a reasonable depreciation of late. So we must be doing some forward contracts. So when does the benefits start flowing in P&L?
Lalit Khetan
So Chirag, see, you are talking about the foreign exchange gain basis, right?
Chirag Shah
Yes.
Lalit Khetan
So certainly, it is helping us — and see, we have a policy of hedging the exports also. So we have a policy of hedging our 50% to 60% exports. But simultaneously, we have the import, we have the packing credit also that offsets also some of the other gains. So we are consistently gaining on the dollar. But the currency is very volatile.
But we are keeping us quite on the edge and monitoring it. And for the 9 months, we have gained a INR20 crore in the absolute terms in the currency negating all the import factor also. So net gain for the 9 months is about INR20 crores on the currency side. And we hope to continue with the currency gains every quarter.
Chirag Shah
So sir, in a very simple way, if the recent INR depreciation, say in, last whatever one month, the benefit of that will be visible 6 months down the line, right?
Lalit Khetan
That will be visible, but Chirag, that will be somewhat offset with the import obligations we have.
Naresh Jalan
Chirag, also, this is basically entire currency gain is not with us. Every quarter, our price is reset also with the currency adjustment, plus minus 5%. So entire is not coming to our kitty. So our exports become more competitive for our customer and imports for them is more competitive.
And the currency, basically, if you see the devaluation which has happened, it has happened globally for all currencies. So to, basically, compete with our customer, we cannot expect the entire currency gain to come to our balance sheet. Otherwise, we will not be able to get new businesses from our customers looking into the competition, which we have globally.
Chirag Shah
No, sir, this is a good strategy, a perfect strategy. And sir, one last clarification. Recently, there was an announcement of creation of SPV for railway wheel. So is it the same kind of continuation to the earlier JV that we had or this is something over and above that?
Naresh Jalan
No, no. It is in continuation to the JV we have. Basically, the railway wheel contract has been assigned to the SPV and now the SPV has taken up the manufacturing of the wheels.
Chirag Shah
The SPV means JV, right? The JV that we have.
Lalit Khetan
Yes.
Naresh Jalan
Yes.
Operator
The next question is from the line of Vidrum Mehta from ASK Investment Managers.
Vidrum Mehta
Sir, firstly, can you help us with the Q3 revenue for subsidiaries, that is Multitech and JMT?
Lalit Khetan
Certainly, Vidrum. So see, INR952 crores is the revenue for the company. And if you look at JMT, JMT revenue was somewhere around — sorry, the INR42 crores and ACIL is INR16 crores, and Multitech is somewhere around INR100-odd crores. So that’s the revenue. But there is an elimination also within the — because of the inter related party, so that’s why it is around INR1,073 crores on the consol level.
Vidrum Mehta
Okay. Okay. Sir, you alluded to the fact that in your opening remarks that the CV demand is relatively moderated or muted. And you expect the recovery from H2. So just wanted to understand, is it H2 of FY ’26 or H2 probably of CY ’25?
Naresh Jalan
No, no. I think, to be precise, we are already seeing a limited demand from this quarter in the commercial vehicle. And what Lalit wanted to basically more elaborate that we are expecting the calendar year, means, second half of this calendar year, to be precisely very robust, to seeing all the election and other things being over and budget also over. So we feel that post the budget allocation and everything, the demand is going to be extremely elevated in the commercial vehicle sector.
Vidrum Mehta
So what kind of growth do we envisage?
Naresh Jalan
No. In terms of RKFL, we are looking at almost 15% year-on-year volume growth in the coming year also. And if you see the precisely overall in the consolidated level, that we have — in the volume terms, we have almost had 13% growth. And we still feel that in this quarter, post closure of this quarter, we should be almost 15% plus, which we had envisaged when we started the year. So we will be 15-plus percent in terms of our volume growth. And next year also, we are looking at 15-plus percent growth year-on-year.
Vidrum Mehta
Sir, on the consolidated basis, I agree, but I guess this year, we are consolidating some of the subsidiaries, and that is why the volume looks higher.
Naresh Jalan
No, I think, in subsidiary — if you see in the subsidiaries, I think, ACIL does not have forgings. JMT has miniscule forging right now, like Lalit has said, only 500 tonnes of forging. In Multitech casting we have done extremely well. We have increased our casting. If you see the overall — full year results, we have been able to achieve in 9 months, almost in 9 months. So we have been able to ramp up everywhere.
Vidrum Mehta
Sir, what I was referring is, I guess, when we were guiding for 15% to 20% volume growth, it was more to do with the stand-alone volumes, which we were referring to. You can correct me if I’m wrong. And for the 9 months, roughly, we have grown by 7% on the volume front.
Naresh Jalan
No. In RKFL, on a stand-alone basis, I think we have grown almost by 8.5%. Lalit?
Lalit Khetan
Yes, around 8% only.
Naresh Jalan
Only 8%, in terms of RKFL on a stand-alone basis. And this is mainly due to, I think, our cold forging getting delayed and as well as slight subdued demand in the domestic market. If cold forging would have started, I think, which we had guided to be start in month of September, we would have added almost 6,000 tonnes volume in the last third quarter. So cold forging, which has not started, has eliminated almost 6,000 tonnes of forging from there, from a capacity of 24,000 tonnes which we are setting up.
Lalit Khetan
And, with them, being the fourth quarter, we see a significant uptick in terms of RKFL stand-alone, because cold forging is getting started and volume will be more. So we will be certainly getting a much better.
Vidrum Mehta
And sir, Trailer Axle revenue, you said INR28 crores will be for Q3 and that will be part of stand-alone, correct?
Naresh Jalan
Yes, part of stand-alone.
Vidrum Mehta
So if I adjust that, probably the growth looks very subdued. Because, last year in Q3, Trailer Axle was not a part of our business, right?
Naresh Jalan
Lalit?
Lalit Khetan
Yes. Can you repeat the question? I missed the question, please?
Vidrum Mehta
Sir, Trailer Axle revenue is INR28 crores for Q3. That is a part of stand-alone business. If I adjust that, the growth for the stand-alone looks flattish, because last year Trailer Axle was not a part of our business.
Naresh Jalan
But to be precise, I think, Trailer Axle also requires forging. So forging — from there only the forgings are going to come.
Lalit Khetan
So the Trailer Axle capacity, tonnage also is added, also in our tonnage also. And if you look at the current quarter tonnage also, Vidrum, so domestic volume is 35,000 tonnes in the quarter, then the 27,000 tonnes for the previous quarter, and 28,000 tonnes for quarter-on-quarter. So you can see the increase in tonnage that includes for Trailer Axle also. And that is part of domestic sales, in previous quarter also, this quarter also. So what we see the INR570 crores of sales over INR537 crores, that includes in both the quarter Trailer Axle.
Vidrum Mehta
Sir, capex number for ’25 would be INR650-odd crores, which last time you had guided, or will it change because of this new capacity expansion plan?
Lalit Khetan
Little bit due to that expenditure and that will be added on the casting plant. Otherwise, that will be near to that only.
Vidrum Mehta
And for ’26, how much should we assume?
Lalit Khetan
So give us some time. We will update on the next con call for the ’26, because a lot of things are happening, we’ll give you correct update on the FY ’26.
Naresh Jalan
But I think, Vidrum, next year, a bit almost all the projects getting whatever we are adding is going to get completed by July. We don’t see significant capex happening in next year. There is going to be — I think, this — whatever capacities we are putting in is going to be for next two years more than enough, any capacity addition, which is going to significantly happen is going to happen only in FY ’27. So FY ’26, we don’t see any significant, except these projects, which are up and running and to get completed by July this year.
Vidrum Mehta
Sir, lastly, can you share the cumulative order book which you have in your books right now, which is to be executed over the next three-year, four-year period? What would be that number?
Naresh Jalan
Milesh?
Milesh Gandhi
So, for this quarter, we have already communicated as to what is the order in which we have, but I think he’s trying to ask for a holistic view, right?
Naresh Jalan
Holistic what — I think, in last two quarters, what we have got. He is asking for the total order book?
Milesh Gandhi
Yes. So in last quarter, if you see, we had communicated, we got a INR1,522 crores order book for — to be executed over a period of four years, in which basically a good chunk of around INR14,075 crores came from North America, and around INR47 crore business from India. And in this quarter, we have got INR697 crores, in which around INR600 crores is against from exports market for mining and earthmoving industry and INR54 crores from oil and gas, and INR43 crores from railways. So I think you can add up on INR1,522 crores plus INR697 crores is what we have been able to get the order book.
Naresh Jalan
These are the new businesses.
Milesh Gandhi
For the new business.
Vidrum Mehta
Yes, sir, in addition to that, in Q1 also, we got orders worth INR16 crores, INR17 crores. So, I was.
Lalit Khetan
All together, INR3,900 crores for the 9-month period.
Vidrum Mehta
Yes. So, I was just referring to the overall order book which you have right now in your books.
Naresh Jalan
I think, our order book, basically.
Vidrum Mehta
Adding the last four or six quarters, adding up all those four, six quarters.
Naresh Jalan
We don’t maintain this way, Vidrum. I think, we basically go — because once this — basically are annual projections which we get from the customer and then based only for the railway, we have a firm order book. And the rest of the order books move into a 6-month scheduling system.
Operator
As there are no further questions from the participants, I now hand the conference over to the management for the closing comments.
Lalit Khetan
Thank you very much. Thank you. We’ll take this opportunity to thank everyone for joining the call. We hope that we have been able to answer and address all your queries. For any further clarification or information, kindly get back to us or touch our Investor Relations advisers. Thank you very much for sparing your time and joining us on the call. Thank you, and have a good weekend.
Operator
[Operator Closing Remarks]