Rolex Rings Ltd (NSE: ROLEXRINGS) Q3 2025 Earnings Call dated Feb. 17, 2025
Corporate Participants:
Hiren Dilipbhai Doshi — Chief Financial Officer
Mihir Rupeshkumar Madeka — Wholetime Director
Manesh Dayashankar Madeka — Chairman & Managing Director
Analysts:
Jason Soans — Analyst
Unidentified Participant
Presentation:
Operator
From the management side, we have Mr Manish, Chairman and Managing Director; Mihir, full-time Director; and Mr Hirin Doshi, CFO.
So without further ado, I would like to now hand over the floor to Hiren sir for opening remarks, post which we’ll have a Q&A session. Over to you, Hiren sir.
Hiren Dilipbhai Doshi — Chief Financial Officer
Thank you, Mihir. Thank you very much for arranging Q3 earnings call with the investors. A warm good afternoon to all the participants, attendees or investors. Here, Hirin Doshi, CFO from Rolex. I’m there with our MD, Mr Manish Madeka and Whole-Time Director, Mr Mehil Madeika. As you people are very much aware that the economy or rather than the phase where the overall engineers and these things are being passed. And particularly the industries or a company who are bit off having much of overseas share in terms of their revenue, particularly from Europe and US, they are also having some kind of more difficulties or rather more obstacles what they are facing every quarter. They are expecting some better, but something new, something new has scaled-up.
Without taking much of this thing, I’ll let you through the financials and the presentation from the company and thereafter we can have a Q&A session I would like to update that revenue from operations for the Q3 of the current fiscal company has recorded net revenue of INR259 crores or rather INR260 crores, that is mainly component sales and incentives, which was in Q2 of this current fiscal, it was somewhere about INR300 crore. And if we compare the same number for the corresponding fiscal for the quarter, it was INR273 crore. In terms of EBITDA, for the particular Q3 quarter, we have recorded almost 21%, which was 24.4% in-quarter two of FY ’25. And in the corresponding previous fiscal for the quarter, it was somewhere about 20.5 percentage.
In terms of PBT and PAT, I would like to tell that in-quarter three of FY ’25, my PBT was INR445 crores, which was INR65 crore in Q2 of the current fiscal and INR50 crores in the same quarter for the corresponding previous year. Here, I would like to tell you and as we have already submitted a note on our results also that this particular quarter, my PAT has gone down because of an additional extraordinary item provision of INR18.6 crores, which is amount what we are providing towards the liability of write-off recompants to our lenders for the debt restructuring what we did in 2030. By forgetting to our revenues, surprisingly our rings segment is decreasing compared to increase incremental of auto components. And this for the nine months, my overall auto component share was 55% in terms of revenue and 45% in terms of bearings.
Here, I would like to mention it — this ratio has just reversed because of the drastic reduction in overall bearing rings market, whether it is domestic, whether it is overseas. That is because of the ratio of auto components has gone up significantly or we can say has gone down. In terms of overseas and domestic operations, my exports were somewhere about 48% for this nine months and 52% in the domestic. Here also we have a bit of the slight changing or rather the numbers are swepping over there, where the domestic revenue has increased, that is mainly because of certain auto component business and a reduction in exports market significantly for the Ring segment. That is why the ratio of 52% is there in domestic and exports 48%.
Yeah, I would like to update our investors that company is very much confident and positive for the coming fiscal because of the new awards, new business, what we have already received, the nomination program has already been received with the company and we have given the indicative or rather almost a forecast what has been given by our customers for the various geography, that is particularly from Europe, Latin-America, North-America and even from the domestic market.
If I’ll tell you in terms of segment, there is a one big customer having multiple plant location in Europe and Latin-America. They are into auto and even the auto components for the EV, wherein we expect — and this expectation, what we have mentioned over here that is purely on the basis of the nomination what they have told, it is this particular one customer, it is somewhere about INR80 crore rupees of the components, what we are planning to dispatch in next fiscal. For the another customer-base that Latin-America for the auto components segment, tentatively INR25 crore rupees of the business or dispatches additional what we are going to make to this new customer. Again, from the North-America, another customer, INR25 crore odd.
For the Europe, a good part that we have also developed bearing ring customers also, wherein we are expecting INR30 odd crores something revenue for these new customers in the next fiscal. Again, in domestic also, we have gotten nomination from foreign auto components to the tune of INR10 crore, something what we are planning to dispatch in the next fiscal. Same way in domestic bearing ring segment, again, almost INR7.5 odd crores something what we are planning to dispatch additionally in the next fiscal.
I would like to tell that as I mentioned that all these orders are either from the new customers or the new programs given by our existing customers. So that is all put together somewhere about INR175-odd crore business. Definitely, it will be added to the annual revenue of these fiscal in the FY ’26. Particularly when we are initiating the project, generally the first year the project volume or the ramp-up is to the extent of 25% to 30%, something like that.
Here, I would like to indicate that when I’m saying 25% to 30%, obviously, if these things will go up and then in FY ’27, again, company would be having maybe 50% to 60% of the ramp-up to these new programs. In terms of bifurcation or revenue mix in the application, again, my passenger vehicle segment has been increased that is 46%. Industrial, 17.3%. Here again the bearing ring industrial overseas business significantly affected. That is why the percentage has gone down. In terms of commercial vehicle for the domestic or in the US, we are almost at par and we are at the same level, which is 29%. EV and hybrid segment is somewhere about 7.7 percentage.
If I talk about total revenue from the operations, for the nine months, it is INR871 crores, which was in the previous fiscal INR1,22 crores. Again, by forgetting to that, outside overseas revenue is somewhere about INR420 crores in the Nine-Month figure and INR450 crore for the domestic for — till the date of this December ’24. The same number it was INR636 crore in the previous fiscal for the overseas business and INR586 crore for the domestic business. Comparing the annual numbers of EBITDA, this for the nine months company has recorded EBITDA of INR207 crore, which is 23.3 percentage. Last fiscal, it was INR277 crore, which was 22.4 percentage. Here, we had a bit of additional EBITDA margin.
Talking in terms of PBT or PAT for the nine months company has recorded INR119 crore rupees of PAT of vis-a-vis PBT of INR177 crore. It was in previous fiscal INR156 crore PAT and PBT was INR242 crores. The reduction of PAT, again, as I mentioned you, that is an additional provision of INR18.6 crore and bit of reduction in overall revenue of the company, which has also bit increased my fixed up — fixed-cost absorption, that is why the number has bit reduced. Operating cash-flow company is having sound cash-flow. Even in the first-half of this fiscal company had almost INR124-odd crore operating — net operating cash inflow, which is, if I’ll say, as on December ’24, it is in-between somewhere about INR150 crores INR260 crores of operating — net operating cash inflow. Debt, needless to say that for last almost one, one and a half year company is into net negative debt and company has significantly reduced or rather what you can say, it’s a zero-debt company and company has already having some kind of cash surplus with them.
Obviously because of my PAT reduction and having such kind of extraordinary provisions for the ROR and those things, my ROE for the — this fiscal, we are expecting beta downside. If we compare quarterly revenue of this particular two-quarter, I was almost down by — in terms of total revenue reduced by 5%. And if we compare corresponding quarter of previous fiscal, it is somewhere about — sorry, 8% compared to the December ’23. And in terms of overall nine months number, my overall revenue has just reduced by 2.9%. Profit before-tax compared to the previous quarter, it has almost down by 10% if we say for the 10% that is comparing to the December ’24 vis-a-vis December — or December ’23 vis-a-vis December ’24.
In terms of over — with comparison of quarter two, it was INR65 crore and it has reduced to INR45 crores in this quarter, mainly because of certain fixed-cost absorption and a bit of additional depreciation and certain — to the certain level of change of my product mix sale revenue, as I already mentioned, comparatively, we are almost on the same verge what we had for the fiscal ’24, I’m talking about annualized number. So we are planning to have more or less the same kind of number. But as I said earlier that the company is very much positive for the next fiscal. As we got this nominations, what I already mentioned, we got this orders and confirmed dispatch planning from our customers, which would be implementing which would be come to the paper on next fiscal. These are the numbers of balance sheet, what we have already given in detail. I’ll not take these numbers individually or other this number in detail. Thank you very much for patient hearing.
Mehir, I request if you can initiate the Q&A.
Questions and Answers:
Operator
Thank you, sir, for the opening remarks. So we’ll now open the floor for Q&A. Anyone who wants to ask a question can please use your raise your hand option. Once you are done asking your option, please lower your hand. Hand. We’ll wait for a couple of minutes for the queue to assemble and then we may start.
Yeah. So the first question is from the line of Jason and sir, you have been unmuted and you can go-ahead. Jason? Yes. Audible? Yeah.
Jason Soans
Yeah. Okay. Thanks for the opportunity. First, first just wanted to here sir, just wanted to know the absolute numbers, the usual breakup which you give for bearing rings and auto components, domestic and export. So for Nine-Month FY ’25, what would that be as scrap export windmill as well?
Hiren Dilipbhai Doshi
Okay. Okay. In terms of domestic bearing ring, my Nine-Month number is somewhere about INR247 crores in terms of domestic auto component, it is INR134 crore. Export bearing ring 116. Auto components overseas, INR303 crore. Our scrap is INR59 crore for these nine months figures and export incentives is somewhere about INR12 crores for this nine months.
Jason Soans
And I assume mill income wouldn’t be reasonable.
Hiren Dilipbhai Doshi
No, INR1 million is not there because that is being nullified against my power and fuel cost.
Jason Soans
Sure, sir. Thanks for that. And so I just wanted to understand, of course our bearing rings performance has taken a hit and similarly, industrial contribution also has gone down. So I mean when we look at — look-back at it, we have looked at the big three doing significant capex for localization in India. So just wanted to know what has — what is dealing the segment probably, is there some delay in the capex plans? Why do you see some industrial weakness pulling the bearing rings? Just wanted to know the reasons and take deeper for this.
Hiren Dilipbhai Doshi
Yeah. To truly see that the big players in our bearing ring segments, they are in the expansion mode, but let me tell you that this expansion has significantly — they have reduced the pace of this expansion and they got certain deferment also because if you see their domes or rather their overall numbers are also got hit in this particular 3rd-quarter and the things have been deferred and it is going through a bit slow compared to the early one. And they have also, you know with one of our main customer when we were just checking, they have also cut-down their capex in two-phase, which something what they want to do it on one phase. Now they have deferred by almost six months-to one year, again depending and looking to the overseas scenario, particularly from the Europe market. So that there is a slight reduction and slight deferment of this program. I would like to request Mr Mihil Madika to throw some more light.
Mihir Rupeshkumar Madeka
And one of the biggest bearing player in the world. Recently they have acquired a very big group in — so now almost that group is having a turnover of, I can say 60% — 50% to 60% of what that group was doing earlier. So they acquired that group and that is the reason there is a bit delay because very big team from them there — they visited our facility recently.
And now what they are saying that from this year-after maybe two, three months means for our financial year when it will start from April-May, the things is going to move fast because now they have merged and they have already made their plans to expand in India and to move some of the facilities from there Europe and some other continent they are going to move here in India and also they are going to have some addition, more additions.
Jason Soans
Sure, sure. So thanks for that. So — but just some color. I mean, so the progress is slowed domestically as well as more, but it’s more to do with the international demand being slowed, especially with Europe with Europe demand is weak.
Mihir Rupeshkumar Madeka
Yeah, really, okay, sure, sure. Okay. And due to that, it is impact in India.
Jason Soans
Right. Yes, yes. And sir, just also with regards to this 186 million which we had booked for the ROR expense, do we anticipate any other charge in this year itself? Last year, we had this charge of around INR320 million in the last quarter, the Q4. So do we expect any more charge for this ROR going into Q4?
Hiren Dilipbhai Doshi
See, here and Dushy here. See what we did or rather the — on the basis of the approval letter from CDR sell and the sacrifice what these lenders have made, what we are in impression and what we got some kind of feedback and some kind of guidance in this matter that maximum what we are expecting the liability for this kind of thing is to the extent of INR50.60 crore. So considering that we have provided when we got a letter from our lenders, though the lenders have demanded significantly high, but because of on the basis of the agreements on the basis of the sanctions and the approval letter of CDR, what we are having a positive confidence that it would be restricted to INR50.60 crore and that is why we have provided the entire amount.
Now if there are certain while calculating these things in detail while negotiating with the lenders, this figure may — they may — you know, going to ask a bit on that some additional component on the delay of this from 2022 to 2024 or 2025 till the time of final payment. So those things, which is bit unexpected or other not even as of now?
Jason Soans
Okay, okay. But just to clarify, INR50 cro I 60 crores which you mentioned, so INR50 crore has been taken off, INR32 crores last year and now so that INR50 crore has been covered, but you never know with the negotiations more expense could be incurred, right? That’s what you’re saying.
Hiren Dilipbhai Doshi
Yes. Thank you. Okay, sure, sure. And sir, lastly, just again, I think by the end of next quarter-end, maybe by the March, though we are pushing with the our bankers to close it down even before end of March and we would like to pay it off the claim of ROR so that it will — or rather it will open many doors which are closed as of now. So we are very much pushing rather behind with the all lenders?
Jason Soans
Okay, sure, sir. And just lastly, just wanted to understand in terms of sir, you have mentioned you have won quite a few orders in the last two quarters. So any revenue that you should want to you know, give for ’26 ’27.
Hiren Dilipbhai Doshi
Sorry?
Jason Soans
Hello?
Hiren Dilipbhai Doshi
Yeah.
Jason Soans
Yeah. What I mentioned is sir, you have mentioned some orders you know which you have won in the last two quarters. So just in light of that and on the back of that, would you want to give any revenue guidance for ’26 and ’27, FY ’26 and ’27?
Hiren Dilipbhai Doshi
Yes. I already told that this INR175 crores something it’s then starting size or rather the volume of the business in the first year. Now in the — more than 50% of the project, this — the value what I have shown is somewhere about, 30% 35% of their pick revenue.
Generally in the second fiscal, that 30% figure will go up to 50% 60% or something like that. So we are expecting — if I’ll not tell you the precise number, but we are expecting on this INR175 crore additional of somewhere about 25% to 30% of additional supply for FY ’27.
Jason Soans
Okay. Okay. Sure, sir. Okay. No, but you just mentioned that 25% to 30% if the first year ramp-up is 175% subsequent ramp-up will double it, right?
Hiren Dilipbhai Doshi
I mean if not to double it, sir, exactly, but it will — it will go up to say, you can say somewhere about INR250 crores.
Jason Soans
Okay. Sure. Sure. Okay. Thanks, sir. Those were all my questions.
Operator
Thank you. So before taking the next question, a reminder to participants to use the raise and function for Q&A. Our next question is from the line of Nikhil Kal. Nikhil, you have been unmuted. You can go-ahead.
Unidentified Participant
Hi, am I audible?
Hiren Dilipbhai Doshi
Yeah. Yeah.
Unidentified Participant
Yeah. Thank you for taking my question. Just one clarification. You mentioned the INR175 crore order book that order win that you’ve given for FY ’26, that is the annual value and you expect, 25% 30% of that coming in FY ’26 or is it the 25%, 30% comparable?
Hiren Dilipbhai Doshi
No, this is the INR175 crore. See, I told even that in 13 programs, the first year is 50% 60% what they are asking. So obviously, it would not be double in the next year. But the overall number of INR175 crores what we have mentioned, I am expecting additional INR50 crores to INR75 crores in that volume for considering all these programs for the next fiscal.
Unidentified Participant
Understood, understood. And sir, I mean, you mentioned that these are completely news, but in your existing business, there will always — obviously, every year there will be some business that will kind of go off. Typically, I mean, is there some sense on — as a percentage, I mean, how much business does it kind of typically expire and you have to kind of replace it.
Hiren Dilipbhai Doshi
See, we didn’t have much of the business expiring, it is basically the reduction of overall volume of a particular program or a particular product. Now if I tell you in terms of bearing rings, none of the bearing rings components what we are supplying to our customers who are into industrial applications and so on. It’s not like that one particular ABC component what they were asking, now it is zero. But the volume has significantly down. You can say 50% now.
Mihir Rupeshkumar Madeka
Because their volume has been reduced, decreased.
Hiren Dilipbhai Doshi
No. And the earliest program which is expiring is somewhere about maybe in 2028 from one customer. But by the time we will be having new programs or new plants for the same customers.
Unidentified Participant
Okay. But just kind of understanding these bearing rings, exports decline that you’ve seen. Is this kind of across customers or there was some one customer you mentioned that there has been some issues there wherein they’ve kind of done this merger. Are you seeing this kind of volume decline across customers?
Hiren Dilipbhai Doshi
If we say a majority is from the one particular group of the customers, but again, in other customers also, we are facing reduction of, 25% 30% over there, but one particular customer might be reducing 45% to 50%, but the other customers also have some kind of reduction or 25% to 25 percentage oat. So overall, all the customers are facing this downfall.
Unidentified Participant
And fair to say this decline is also a function of the destocking that would have happened the end-market demand wouldn’t be this week?
Hiren Dilipbhai Doshi
Now the destocking would not be a much of the issue, but overall their production schedule, their demand dispatches to their principal OEMs and do you think those were significantly reduced.
Unidentified Participant
Understood. Last question that I mean, then going-forward, when do you expect this to kind of bottom out and probably stabilize and then kind of start increasing going-forward. I mean is this decline kind of continue for like maybe a couple of more quarters? How are you looking at it?
Hiren Dilipbhai Doshi
It is bit difficult, you better know the — how the situations and the things are moving at overseas and this particular downfall major chunk is from the overseas and again from the Europe and the US continent. And because of disturbance over there, it is a bit difficult to tell you that it may last for another 1/4 or so. But as I told you that we have also added one — a couple of bearing ring customers for the European market, so which may give some kind of recoup or some kind of. But to getting back to the normal level of my overall bearing ring business, I think we need a couple of quarters or something like that.
Unidentified Participant
No, I mean, I was thinking that you’ll be getting like purchase orders or something. So at least you can get some understanding of some trend that, okay, this is now kind of stabilizing at a particular level.
Hiren Dilipbhai Doshi
See, as of now also the indication or the forecast what they have given for the March quarter or something like that, we had — we have some kind of positive move over there, but not in a significant way.
Unidentified Participant
Okay. Understood. Understood.
Operator
Thank you. We have a next question from Abhir. Abhir, you can go-ahead.
Unidentified Participant
Am I audible?
Hiren Dilipbhai Doshi
Yes.
Unidentified Participant
So this is my first question was on our ROR provision, which is less than the ROR sacrifice that the bank made of INR83.6 crores. So on what basis are we assuming that the bank will forgo its principal amount? Or are we thinking of adding incremental provisions as we go-forward.
Hiren Dilipbhai Doshi
Sir, as I mentioned earlier also that in my CDR approval or rather the CDR sell the particular package or the — it was approved, wherein the sacrifice value was stated bank-wise lender sacrifice which are aggregating to INR50.6 crore.
And now the demand what the bank has raised, even as you are specifically asking for INR83 crores, even in that INR83 crores, we have already raised our observation concerns with the couple of banks, which is to the tube of somewhere about INR10 crores to INR11 crores, which they have charged in excess, which they have recovered in excess and that definitely we are going to get back that rebate into our overall.
Now coming back to 73 to 50.6, again the method of calculation what they did and the method of calculation of what company did with the help of certain consultants. That is again debatable and it would you know on the discretion of the lenders and we are going to once we sit on across the table with them that can be rather that will be finalized. And obviously, if any additional this thing, that will come to the coming quarter.
We expect, as I told you earlier also that we are pushing this thing to finish it by March ’25 or so as any company would like to settle this thing with the one-shot payment, a kind of OTS this thing. So we are expecting much of the rebid or a waiver in that particular amount of INR73 crore, what we have requested to the lenders.
Unidentified Participant
Understood. My second question would be, are we losing any kind of wallet shares with our client given that there is a 50% kind of decline in export bearing. Is that something we should be concerned about?
Hiren Dilipbhai Doshi
Yeah. We are not losing a wallet share. You know it’s not as I told earlier also, it’s not that some products they were sourcing from me now they have started from somewhere else. There might be what you say out of 10 components maybe my customer might have a discard one-product and they may got these product from somewhere else, something. But again, that is very few components in ring. And in the particular bearing ring segment from a — but apart from that, we didn’t have reducing the wallet share, but the quantum of the volume has gone down. That is the main reason.
Mihir Rupeshkumar Madeka
So once it will be up, definitely again we will have those orders.
Unidentified Participant
Understood. And my last question would be on falling EBITDA margin. So is it just a function of scale that despite our power and fuel cost, it’s going down or is there something else there or.
Hiren Dilipbhai Doshi
Definitely the major portion is decreasing the scale. And again, I would like to tell you that bit of change in-product mix, particularly in this quarter, December ’24 quarter, that has impacted. Again, apart from that, my — you know the renewable energy revenue that is from windmill and solar, this is a something slowdown period for this particular segment. Segment and whereas my certain fixed-cost has already been there and those are being less absorbed. So these are the multiple reasons for reduction in my overall EBITDA. Q-on-Q are.
Unidentified Participant
Understood. Thank you and all the best.
Operator
Thank you. Next question is a follow-up from Jason. So Jason, you have been allowed to talk and you have been unmuted. Sir.
Jason Soans
Thanks for the opportunity again. So just wanted to ask since we have exposure to both bearings and automotive components, with the increasing adoption of EVs, just wanted to know, does that open up more opportunities for us and more precision autocomponents or bearings. I think more to do with auto components. Just wanted to know your thoughts on that in terms of better and more higher engineered products, higher-margin for EV, especially, right.
Hiren Dilipbhai Doshi
Yes. See, Jason, if you have seen that the new program, what we have awarded, there are two-three to four programs, which is — belongs to the EV segment. But let me tell you the way what we were expecting and what we were envisaging the curve of moving EV segment up, that has also been what you say is a bit stagnant as of now. But at the same side, what we are getting opportunity for the passenger vehicle and rather the non-EV or IC segment in the overseas and domestic both. So there is a demand in terms of those kind of vehicles also. Definitely, we are open to have EV hybrid both and we do have that kind of horsatile capacity. But as of now, the new order what we are winning, that is you can say almost 65% for them other than EV hybrid.
Jason Soans
If you’re seeing the new orders basically are for non-EV segment, right?
Hiren Dilipbhai Doshi
Non-EV is somewhere about 65% compared to the EV segment. Even in one of the major domestic player of car manufacturer, the way they — they came up or rather the way they have exposed to this thing that EV would be the is that. Now what they were expecting, again, it is not as per their expectation, but being slightly a having upward trade-in the coming quarters. And I have mentioned in my list also that one of the domestic auto customer for the EV, we got an order.
Mihir Rupeshkumar Madeka
So this is the ramp-up year for that customer and we already started. So from next month, we have a good volume for them and it is going to ramp-up. In that also the EV volume is 66% and 33% is the IC volume out of what they are they are going giving as a schedule and they are showing that the car has got a very good response and they got a good order book and so it is good. So from next month our bulk supply is going to start basically.
Jason Soans
Sure. And so this customer which you just spoke about, that’s more on the domestic side or on the more on — or domestic OEM directly or domestic OE.
Okay. Sure. Thanks, sir. That was all from my side.
Operator
So we have a next question from Kush Nahar. Kush you have been unmuted and you can go-ahead. Thank you for the opportunity.
Unidentified Participant
Am I audible?
Hiren Dilipbhai Doshi
Yeah.
Unidentified Participant
Yeah. So my first question is on these tariffs. I think the US tariffs that might be in India and other countries. So what is our stance on that? And will it affect our export business since exports is a 55% revenue mix.
Hiren Dilipbhai Doshi
See, as of now, the tariffs and the HSN particularly the product-wise list what they have published out or they came out. Fortunately, there is hardly one component wherein we may have some kind of you know this duty hike would be there. But again, that will not be affecting overall value and even to my customer because that’s not a very big significant volume or significant value over there. So as of now, we didn’t have much of the, you know any negative as far as this tariff declaration is like to say.
Unidentified Participant
All right, sir. And. And sir, my second question was what kind of recovery like timeline-wise, if you could guide us considering the reduction in volume, when do we expect some uptick or some positive move-in terms of volume delivery for us?
Hiren Dilipbhai Doshi
Do we expect in next fiscal, as I mentioned you that with the help of the additional new program and the additional volume to be increased, the scale of economy will increase, which will give me the top-line, bottom-line bush up in the next fiscal?
Unidentified Participant
Yeah. 15% 20% revenue growth, is that right?
Mihir Rupeshkumar Madeka
Yes, yes, yes. We are expecting the same.
Unidentified Participant
And margins coming back once the scale comes back to around 22% 23%.
Mihir Rupeshkumar Madeka
Yes, 10%. It would be right.
Unidentified Participant
All right, sir. Thank you.
Operator
Thank you. We have next question from Dhruv Bhatia. Dhruv, you may go-ahead.
Unidentified Participant
Hi, good afternoon, sir. Sir, I have two questions. You’ve talked about an annual business expected from ’26 indicative of about INR175 crores. In your best understanding because of the uncertainty that’s there in the overall market, entire demand across different regions. What is your probability of you converting this 175 million into actual revenue? I mean, is there the visibility confirmed there for having this entire 175 converted into revenue or is there a risk of this getting postponed to some extent?
Hiren Dilipbhai Doshi
So as of now the forecast and the dialogues or other the conversation with these customers and the way they are approving the PPAP and all these things in a quick manner. Again, no doubt we — my customers have given me some additional or rather the higher number of this forecast. But conservatively, what we tried to mention or this INR175 crore, again, if you ask me to the best of this thing, I think we didn’t expect maybe deviation of 10% or more than that.
Unidentified Participant
Okay. And because you’ve won these orders maybe in the last year or so, are these orders come at a profitability at where we stand today equal to worse off or better-off than what we’ve been doing in the past?
Mihir Rupeshkumar Madeka
Yes, yes, yes, definitely because the orders what we are getting or the customers what we try to tap, we will be having the same kind of margin and we are not compromising on the margin front as far as this thing, because of our high-technology and the high-precision level, we are able to get the optimum margin.
Unidentified Participant
Okay. And sir, the last question, because when all your customers, a large part of them are global companies and they have plants across different regions. Generally the thought process of any global player would be to first absorb existing capacities in different regions to a certain level where fixed-cost gets covered and then you start ramping-up, right?
And hence because if Europe is soft and many other regions are soft, they would want to get catered to and ramp-up those capacities more than what India could. So in that context, is there again a risk of you being able to service their requirements because it could be coming from some other source?
Hiren Dilipbhai Doshi
See, first of all, we didn’t foresee much of the threat as far as their own capacity for forging and this thing because couple of big players have already announced and they have started closing down their forging facilities and maybe a couple of — have already started to close their entire plant and they are moving towards India and low-cost country. So we didn’t expect — expect much of these disturbances as far as their capacity of forging or this thing, because there are hardly one or two players are there having a couple of plants in which they are able to produce this rings or auto components. So we didn’t expect much of the thing.
Unidentified Participant
Understood, sir. Thank you and all the best, sir.
Operator
Yeah. So we have a next question from the line of Kushnar. Kush, you can go-ahead. You are not audible.
Unidentified Participant
Am I audible now?
Operator
Yeah. Yeah.
Unidentified Participant
Thank you for the follow-up opportunity. So my question was you mentioned that I think out of 10 one-product was given to some other competitor. So was this due to some quality issue from our side or was the other more location — they had a location advantage or anything like that. If you can elaborate on that?
Hiren Dilipbhai Doshi
Yeah, I’ll go to Mr to see this.
Mihir Rupeshkumar Madeka
See, this statement it was because of — maybe out of maybe 10, maybe one or maybe out of 50, maybe two or three times or maybe customer has diverted due to maybe pricing or whatever, never with due to quality, okay. So — but 99%, whatever bearing ring business is down, it is not because of the diversity if you means like shifting from one supply to the another. It is because really their market scenario is not good means they have lost their business. It means their customer like OEM, what they predicted the volumes or what they were having the volumes month-on-month, it has been reduced. So the moment that will pick-up momentum will come, definitely that business will again — will start with us only.
Unidentified Participant
Right. Okay, sir.
Mihir Rupeshkumar Madeka
99%, they are not producing the billing at the moment.
Unidentified Participant
Okay, sir. Thanks.
Mihir Rupeshkumar Madeka
Yeah. So you might have heard also in last — I can say last six months or so my customer has even stopped their line many lines for 15 days, one month continuously. Every month they were stopping their line for 15 days, then they run for 15 days, again, they will stop for 15 days. Otherwise, they cannot stop the line even for an hour. It is a huge cost to stop the bearing line for one-hour.
Unidentified Participant
All right. Thank you.
Operator
Thank you. So a reminder to the participants, you may use the raise and function to ask question.
Hiren Dilipbhai Doshi
And shall closing them Dejo. So we are very much confident for the next fiscal as well as.
Operator
So there are two questions from my side. So sir, basically the orders which you highlighted, so do we require any additional capex on that or are we already equipped?
Hiren Dilipbhai Doshi
No, we are already equipped with these things and for this volume, we didn’t require significant capex, maybe to the tune of INR5 crore, INR7 crore something what we are going to have it. But down the line, 1.5 years, two years when this volume will be multifold, there we may need your capex. Again, not a significant capex, but maybe to the tune of INR20 crores INR30 crores or something like that.
Operator
And sir, based on this, do we — like any revenue guidance for the 4th-quarter, are we on-track to go towards the INR300 crore odd figure in the 4th-quarter or how is the traction right now?
Hiren Dilipbhai Doshi
Yes. Broadly, even initially I told that my annual number is something what I’m expecting with the last fiscal number. So we are trying our best to match that annual number and crossing this INR300 crore in last quarter.
Operator
All right, sir. Okay, that’s all from there. As there are no further questions, I’ll hand it over to the management for the closing remarks.
Hiren Dilipbhai Doshi
Thank you. Thank you. Thank you very much for their patient hearing for this investor. I would like to request our MD, Mr Manish Madika, to say a few words and to closing remarks on that.
Manesh Dayashankar Madeka
Looking to the current what we have got and the stample submission is going on. We feel that our in future we may have good business with good profitability because most of the numination what we have got it from auto component and for export in Europe and USA. So many nomination projects are going on at present we are submitting sample. And as you know, in automotive, we take one year, one and a half year to start the bulk supply, so we are very much hopeful that our future is bright.
Operator
Thank you, sir. So this marks the end-of-the call.
Manesh Dayashankar Madeka
FY 2027, we expect very good growth in financial year 2027. 15% to 18% growth we are expecting next year looking to the nomination of what we have been we have received.
Hiren Dilipbhai Doshi
Thank you, Manisha. Thank you very much for your patient hearing. And is there any further queries or concerns, I request team us or the particular of attendees, they can send an email to us and company is going to reply on that. Thank you. Thank you very much