Rolex Rings Ltd (NSE: ROLEXRINGS) Q3 2026 Earnings Call dated Feb. 10, 2026
Corporate Participants:
Hiren Dilipbhai Doshi — Chief Financial Officer
Analysts:
Mihir Vora — Analyst
Jason Soans — Analyst
Unidentified Participant
Presentation:
Mihir Vora — Analyst
[Starts Abruptly] So, without further ado, I would like to hand over the call for opening remarks, post which we can have a Q&A session. Over to you, Hiren bhai.
Hiren Dilipbhai Doshi — Chief Financial Officer
Thank you, Mihir. We at Rolex acknowledge the efforts of team Equirus for arranging this call for the earning updates for the quarter ended and period ended on, 31st December, 2025. Warm good afternoon to all the participants. Thank you very much for spending your valuable time. I welcome you all.
Before taking you through the numbers, I would like to appraise the overall business outlook, management perception for the approximate future. As you all are aware that recently the U.S. has came out or rather declared the U.S. tariff — the U.S.-India tariff deal, and announced that they have reduced the import duties to 18% where it was 50% in the cases. Would like to update over here that particularly what they have — the notification what it has been issued by the U.S. Gazette and U.S. Customs from the president’s office that they have removed this Russian oil penalty, which was levied in the — somewhere in August 2025 by particular proclamation. And that particular notification is being withdrawn.
Now effectively today is the first, rather you can say, a working day at U.S. post announcement of this tariff structure. We are yet to get the final inputs or final outcome that how it would be 18% or what would be the rate on our products at U.S. because in November ’25, the reciprocal — this Russian oil penalty has already been moved off from the — particularly the products or for use for medium and heavy-duty vehicles, parts for the medium and heavy-duty vehicles. So, till now, or rather from 1st November onwards we have been charged 25% duty apart from the regular base structure of 3%. Now it’s yet to see how this 25% would come down to 18% or how it would be effective.
Again, almost 40%, 43% of the days of the current or last quarter of this fiscal has already been passed when these announcements have made. So, there would be an hardly positive or rather pushing moment for this particular last quarter of this fiscal. But we are very much positive from the first quarter of FY ’27 that now the things are — things would be on a very streamline and U.S. would be on track because till now, for last six to eight months, customers are very much in the state of the wait and watch kind of situation. They hold on the entire, or rather more than 50% of their imports, and they were not able to. Rather, their customers are also not giving that feedback and entire chain has already been disturbed. So, we expect that hurdle to be overcome in the — from the first quarter of next fiscal, that is April ’26 onwards. And we hope that we will be on track, or rather U.S. would be on a — moving positively from the next fiscal.
Coming to the quarterly numbers for the quarter ended December or rather Q3 of FY ’26, would like to tell you that there is a quite positive movement in auto components in both the front, domestic as well as export. Would like to tell that over quarter two, we had a growth of almost 14% on the auto component revenue in this Q3. Same in case of bearing rings we had a de-growth of 7.5% over quarter two.
Further to drill down this improvement, there is almost 10% incremental revenue in Europe exports over quarter two and which is, you can say, almost 25% compared to my FY ’25 full numbers with the nine-month number percent — I’m talking in terms of percentage. So, there is a good movement and momentum at European market where we were struggling till like last fiscal. In the domestic front also, it is almost 5% to 6% upward trend compared to Q2 of this fiscal and vis-a-vis 15% improvement over the entire fiscal of fiscal ’25.
The only worry, or rather where we got an hit is in the U.S. market, wherein 10% downfall in the Q3 compared to Q2. And if you — if we annualize it is almost 30% down in — compared to fiscal ’25 what we had. So U.S. is still under the shadow of tariff deal. And now we expect some kind of U-turn of this downfall from the Q1 of FY ’27. On the other hand, as I told that domestic and European markets have been in the positive curve and expect it to be continued — to be improved from the first quarter onwards. On the basis of the program, on the basis of the orders what we have received, forecast we have been given by the customer, we are very much positive as far as fiscal ’27 is concerned. And in this last quarter, couple of new customers have already been enrolled, or rather it has — SOP has been started to a marginal level. But down the line, from the Q1 of fiscal ’27, it will be ramped up and further it will be increased.
Now taking you to the numbers for the Q3 as well as nine months for this current fiscal. Revenue from the operations for the Q3 of this current fiscal, it has touched almost INR275 crores, which was INR271 crores in the last quarter vis-a-vis INR260 crore of the same quarter in the corresponding previous year, that is December ’24. Here we had a growth of almost 10% in — 6% to 7% on Q3 of FY ’25 versus Q3 of FY ’26. Compared to the previous quarter, we had a marginal growth of couple of percentage only.
In terms of EBITDA, we have — we are maintaining or rather we are trying to improvise on the basis of the scale of this cost measurement and cost production area. In Q2, we had an EBITDA in terms of almost INR69 crore, which was 24.2 percentage of my overall gross EBITDA. And in this last quarter ended December ’25, we recorded INR75 crore of EBITDA, which is consisting — coming to 25.7% of my gross revenue. If we talk about the EBITDA net of the other income, it is almost 21% in Q3, that is December ’25, which was 20.2% in the previous quarter, and it was somewhere about 20.80% for the last fiscal, that is FY’ 25. For the corresponding nine-month period if I’ll tell you, we had this net EBITDA, netting of other income, it is 21.6% in the fiscal ’24, and almost again on the same line, 20.77 percentage for the nine months ended on December ’25.
Coming to operating PBT and PAT, in this Q3 of FY ’26, we have recorded INR65.5 crore as the profit before tax, which was INR59 crore in the previous quarter, that is second quarter of fiscal ’26. And the same, it was INR45 crore in the Q3 of FY ’25, that is December ’24 quarter. So, there is a sharp increase on a quarterly basis as well as on comparing to the previous year’s quarter. Here, would like to tell, there is a significant improvement because of the overall other income, what it has been increased in this particular quarter compared to previous quarter, as well as the quarter which was there in December ’24.
Profit after tax in Q3 for fiscal ’26 it is almost INR48 crore, which was INR44 crore in the previous quarter, and again, in December ’24 it was INR20 crore only because we had an exceptional item of ROR [Phonetic] interest provided in that December ’24 quarter. Here in this quarter also, PAT is being reduced by almost INR2.5 crore. That is by way of exceptional item which is for the impact of the new labor code which has been implemented from 21st November, ’25, wherein the potential gratuity liability — it is supposed to be disclosed and valued and to be accounted in this December ’25 quarter only. So that has been valued at INR2.5-odd crore which has been net off in this profit after tax figures.
Revenue bifurcation, bearing rings, it is almost 52% of my overall revenue of components; 48% consist of auto component business. In terms of exports, it is 47% and domestic 53 percentage in this nine-month period.
Certain business development, as I mentioned that 10% improvement on overall exports to Europe over Q2, 25%compared to fiscal ’25 and again, 10% downfall in exports U.S. over Q2 which is almost 30% down over fiscal ’25 as I have informed before. As I told that tariff hangover is expected to be normal from Q1 FY ’27 and we expect a sharp recovery in the U.S. market. The downfall what we had, 30% of the revenue in this fiscal, would definitely move further in a positive way. We do have a bit more visibility as far as the auto component business or growth in the auto component business on the basis of the orders or forecasts given by the new customers, particularly from the Europe. We have also added one customer from Mexico and one from USA that would be starting somewhere about mid of fiscal ’27 and one customer in quarter three of fiscal ’27.
On the bifurcation of my revenue split, rather it is 53 percentage of overall revenue, it goes to the passenger vehicle, then it’s 19% which is there for the industrial segments and 21% for the commercial vehicle and heavy commercial vehicle and EV almost 7.5%, 7.6% of my overall revenue. Here would like to tell that 53% of this passenger vehicle share is because of good reduction in my CV and HCV portion. The U.S. — one of the main customers who is vital or rather who is procuring good amount of auto components for the CV and HCV is under pressure because of this tariff. So actually, it’s not like that we have reduced or rather we got the incremental share in passenger vehicle, though it is almost on the same line, but the downfall in the commercial vehicle has gone up by percentage of my passenger vehicles.
Total revenue in terms of operations for the nine-month figure, it is INR838 crores almost without considering other income. Other income is almost INR47 crore, both put together, INR885-odd crore gross revenue has been recorded in this nine months of the current fiscal, which consists almost INR365 crore revenue from the overseas business which is my exports as well as my export incentives and almost INR473 crore in the domestic market which is including my product sales as well as scrap revenue which was, in last year, fiscal ’24, it is — totality, it is almost INR1,155 crores wherein INR553 crores consist of exports and INR601 crores in domestic market. Would like to tell here, we are almost on the same line or as I already informed that we would be having the same kind of numbers for the fiscal ’26 what we had in fiscal ’25.
But let me tell you the EBITDA what we had in fiscal ’25 which is 22.7 percentage, it has almost 24.9% in this nine-month period amounting to INR221 crore which was INR269 crore for the full year. As I was mentioning earlier PBT and PAT for this entire nine-month, profit before tax is almost INR192 crore which was INR226 crore for the full fiscal of FY ’25. Again, PAT, it is INR141 crore which was INR174 crore in the full fiscal of FY ’25. Here, we do have, as I told you that here the PAT is bit improved compared to the fiscal ’25 numbers and as well as PBT also it has increased by a bit compared to the overall fiscal of FY ’25. Operating cash flow we had for the first half, it is almost INR87-odd crore free cash flow what we have generated again within capex of hardly INR12 crore in terms of couple of furnaces and a small 4G [Phonetic] client.
As you are very much aware that company is having negative debt for last couple of years, company is having surpluses which has been parked for to raise another income. so overall there is a negative or rather debt equity ratio. Coming to the ROCE, return on equity, it is 17% for fiscal ’24. It is 16% for fiscal ’25, and I expect to be in the range of 15% to 16% for the fiscal ’26.
These are the detailed numbers, what has already been shared with you people. Now I would like to request team Equirus to take it further and we can initiate Q&A session.
Questions and Answers:
Mihir Vora
Yeah. Thank you, sir, so thank you for the opening remarks. We’ll now open the floor for the Q&A. [Operator Instructions]. Yeah, So the first question is from the line of Jason Soans. Jason, you have been unmuted, you can go ahead.
Jason Soans
Yeah, thank you. Am I audible?
Hiren Dilipbhai Doshi
Yeah, Jason.
Jason Soans
Yes, sure. So, first I just wanted to know, sir, the numbers in terms of the segments, export bearing rings — export. So firstly, the numbers for Q3 FY ’26 and then Q3 FY ’25.
Hiren Dilipbhai Doshi
See, for the Q3, the domestic bearing ring, we have recorded — I’ll tell you in terms of million. It is INR953.69 million. Export bearing ring, it is INR380.55 million. Domestic auto component, it is INR397.80 million. Export auto components, it’s INR839.87 million. Scrap revenue, it is INR149.11 million. And export incentives, it is INR27.35 million. This all puts together 273.37 [Phonetic] for the Q3 of December ’25.
Jason Soans
Okay. And now, Q3 FY ’25, sir, which is the last year, corresponding?
Hiren Dilipbhai Doshi
You want the full year or for the nine months?
Jason Soans
No, no. Only the Q3, sir, Q3. The…
Hiren Dilipbhai Doshi
Okay. Q3.
Jason Soans
The last quarter.
Hiren Dilipbhai Doshi
Domestic bearing ring…
Jason Soans
Yeah. The one ending in December. Yeah.
Hiren Dilipbhai Doshi
Domestic bearing ring, it is INR730.39 million. Export bearing ring, it is INR283.33 million. Domestic auto component, it is INR386 million. Export auto components, it’s INR995.38 million.
Jason Soans
INR995 million you said, sir?
Hiren Dilipbhai Doshi
Yeah.
Jason Soans
INR995.38 million. Okay.
Hiren Dilipbhai Doshi
Yes, yes.
Jason Soans
And sir, scrap and export incentive?
Hiren Dilipbhai Doshi
Scrap was INR167.38 million. Export incentives, it is INR36.42 million.
Jason Soans
INR36.42 million?
Hiren Dilipbhai Doshi
Yes.
Jason Soans
Okay. Sure, sir. Thanks for that
Hiren Dilipbhai Doshi
So, it’s INR2,598.82 [Phonetic] million.
Jason Soans
Sure, sir. Thanks for that. Now next, just wanted to ask, sir. So, I mean, even in the previous con call last quarter, you had mentioned that you are expecting the tariff from the 53% to be reduced to 18% to 20% on auto components. Now just wanted to know that has — you did speak in the opening remarks that although that has –18% has come but fine print has still not come. So just wanted some clarity, sir what exactly. And also, I wanted to know, 18% on the MHCV parts, which is basically the auto component parts, and bearing rings as well, right? So, both will be reduced to 18% — the tariffs?
Hiren Dilipbhai Doshi
See, as I told you initially, for these auto components, till 31st of October, it was — in totality, 53% import duties were there. From 1st of November, they have given certain relaxations. That is from Section 232 which has reduced 25% duty from 53%. And as of now, or rather till 7th of February, we have been charged at 25% with the duty plus basic customs duty, what it was 2.97% along with merchandise fees and this thing.
So, now looking to the notification or rather the — issued by the U.S. government, we are not sure whether this 25%, what it is applicable to us as of now, because we also got a feedback that it would be a 0 also in certain auto components, it would be an 18% also on certain kind of this thing, or it may continue with the 25% also. But that is subject to the clarification and detailed notification along with the respective HSN. Then only we’ll be able to know.
And once we’ll have some kind of clearance at U.S. customs and we’ll be able to know, maybe in next couple of days that how this would be implemented and what has been interpreted at that level. Because broadly they have simply told that — on the one side, they told that Russian import duty has been moved off, which was 25%. On the other side, he is telling that duty would be 18%. So, we are bit not aware unless and until — or even not would like to comment unless and until we have something authenticated on paper.
Jason Soans
Sure, sir. So just to summarize, till 31st October, you had 53% tariffs. Then from that 1st November to this point in time, you had around 28% tariff, you said 25% plus some surcharge, etc., which was coming up to 28%. And now you will wait for the fine print with the HSN, etc., as to what exactly — that will give us the clear picture. Correct? Correct, sir?
Hiren Dilipbhai Doshi
Yes, very true.
Jason Soans
Correct. Correct, sir, okay. And sir, this — so again — so auto components definitely must be going by a large number to the U.S. How about bearing rings exports, sir? What is that proportion? Is that also significant proportion?
Hiren Dilipbhai Doshi
Bearing ring, as I told you, if you see bearing ring in terms of exports it is, we can say, up 15% to 16% of my overall revenue, which is there. And there we got a hit from — majority from the European market and it has not been fully recovered. If you see my last three quarter or rather all these three quarters for this current fiscal, my bearing ring export of overall revenue, it is 13% — it ranges in between 13% to 15%. But let me tell you in, say, fiscal ’24, the same number is — was almost 23%. And in fiscal ’25, it went down to 15%. And in these last three quarters, we are having average of 13% to 14% of overall export bearing ring.
Jason Soans
Okay, okay. No, sir, what I wanted to know is — so — see, the tariff is basically emanating from the U.S. Now what I understand is the bearing rings is basically 55% domestic and 45% is exports. So, from that export component, how much goes to the U.S.? Only I’m talking about bearing rings. I’m only talking about
Bearing rings.
Hiren Dilipbhai Doshi
Okay, that portion of bearing ring to U.S., let me tell you, in terms of number, say for example, for this nine-months, I told you that export bearing ring was INR112 crore, INR113 crore. Out of that, the export to U.S. is INR32 crores.
Jason Soans
Okay, it’s INR32 crores. Okay, sure.
Hiren Dilipbhai Doshi
So, you can say one-third of overall bearing ring business rather export bearing ring business, that comes from the U.S.
Jason Soans
Okay. Okay.
Hiren Dilipbhai Doshi
And remaining is from Europe and Canada, Mexico.
Jason Soans
Okay, okay. And sir, on this — the tariff is — that also will be clarified? That’s what you’re saying.
Hiren Dilipbhai Doshi
That — there we expect, because we didn’t have any kind of duty paid structure with the — for the bearing ring business, but there we expect it would be coming down too, because it was 53% and now it would be coming down to 25%.
Jason Soans
Okay, now you’re expecting it to come to 25%.
Hiren Dilipbhai Doshi
Yes.
Jason Soans
And sir, revenue guidance ’26, I think you alluded that it will be flat in terms of revenue and for ’27, you still stick to the mid-high teen growth for ’27 revenue-wise?
Hiren Dilipbhai Doshi
Yes. As of now, we still expect and on the basis of the forecast on this end, we expect in between maybe 16% to — or rather 15% to 18% of overall growth. See, because in U.S. like 25% has been from 50%, they have reduced to 25%. So, our customers in U.S. they are happy with this 25% also. But now definitely it is going to be 18%, but when? We are waiting for the announcement from U.S. government. So — and it has already been declared, so it is definitely going to be there within a week or two weeks or something. So, once it is there, then there are more chance of getting more business from U.S.
Jason Soans
Sure, sir. And just lastly, one thing. Just wanted to know the revenue breakup between U.S., India and Europe and others for nine month.
Hiren Dilipbhai Doshi
Total revenue?
Jason Soans
Yeah, total revenue. U.S., India, Europe and others.
Hiren Dilipbhai Doshi
I’ll tell you broad percentage of that. See, 54 percentage is domestic.
Jason Soans
Okay.
Hiren Dilipbhai Doshi
22 percentage is U.S.. Same percentage it is there for the Europe.
Jason Soans
Okay.
Hiren Dilipbhai Doshi
And remaining in between Mexico, Canada, Thailand, etc., might be couple of more for 2%, 2.5%, 3%, something.
Jason Soans
Sure, sir. Thanks for answering my questions. Thank you so much.
Mihir Vora
Thank you, Jason. So, our next question is from the line of Amar. Amar, you have been given the permission, you can go ahead.
Unidentified Participant
Hello. Am I audible, sir?
Hiren Dilipbhai Doshi
Yes.
Unidentified Participant
Sir, I just wanted to ask you that what are the current capacities you have right now?
Hiren Dilipbhai Doshi
See, in terms of metric tonnes, the achievable production capacity is somewhere about in the range of 105,000 metric tonne to 115,000 metric tonne per annum.
Unidentified Participant
Okay. And what’s your order book including the additions in Q3?
Hiren Dilipbhai Doshi
Order book as of now on a monthly basis, it is ranging somewhere about INR95 crore to INR105 crore for the next three months.
Unidentified Participant
Okay. For one quarter, right? This is for?
Hiren Dilipbhai Doshi
Yeah. Last quarter. Yeah.
Unidentified Participant
Okay. And what is the total order book, sir?
Hiren Dilipbhai Doshi
Total order book — you know what happened? Sometimes my overseas customer gives us the forecast on — for a six months or something like that, whereas domestic might be of couple months. But if you ask me Q1 what I am looking for, or rather on the basis of the forecast, what we are targeting is somewhere about INR325 crore or something like that for the very first quarter.
Unidentified Participant
Okay. So, for the first quarter of FY ’27, your order book will stand at close to INR325 crore? Is that what you’re saying?
Hiren Dilipbhai Doshi
INR325 crore to INR330 crore.
Unidentified Participant
Okay. That will be your total order book as of Q1, right?
Unidentified Participant
Yes.
Unidentified Participant
All right, sir. That’s all from my side. Thank you so much for answering my question, sir.
Mihir Vora
Yeah. Thank you, Amar. We take the next question from line of Manish. Manish, you can go ahead.
Unidentified Participant
Hello?
Hiren Dilipbhai Doshi
Yes.
Mihir Vora
Yeah. Manish sir, you are not audible if you’re speaking something. I would request you to…
Unidentified Participant
Am I audible?
Mihir Vora
Yeah. Now you’re audible. Yeah.
Unidentified Participant
Sorry for that. Sir, first of all, good evening, and congratulations for the good set of numbers. So, I have two queries. Now first query is, what we have seen is promoters buying some shares and selling some shares in December quarter within a couple of days. So normally we don’t see that happening. So, can we know the reason behind it?
Hiren Dilipbhai Doshi
Its — let me tell you, definitely you have not seen frequently in past, and again you will not be seeing the same in future. There is some kind of, I would say, miscalculation or something, some kind of — initially promoters has acquired to increase his stake only, but there were some kind of urgency wherein the fund was supposed to be deployed in a day or two only. So that was the temporary option available to a particular promoter. And that is why it has — and on the contrary, promoters had a loss in selling off this and tax implication was quite negative. But that was by way of some compulsion it has been done, but now onwards it would not be there.
Unidentified Participant
Okay. No, I just asked because its little weird, promoter buying some share at INR118 and selling at INR129. So that’s the reason I asked this question. My second thing is we have seen the pledging from promoter first time. So, what — do you know any reason for the pledge?
Hiren Dilipbhai Doshi
Pledge, again, they have given or rather raised certain fund towards that security and which is some — they have committed to invest somewhere. And — but if you see overall quantum of the pledge against their holding — promoters holding, you can say it’s hardly 4% to 5% of overall promoter stakes, less than 5%. And in terms of totality equity, it is somewhere about 2.5%, 2.7% something.
Unidentified Participant
That’s what. The pledge is so small, that’s the reason — what was the necessity of doing that?
Hiren Dilipbhai Doshi
That is the amount they have committed and maybe down the line, 3% to 6% would be squared up also.
Unidentified Participant
Okay. That’s all from me. Thank you, sir. Thank you for taking my queries.
Mihir Vora
Thank you. We have our next question from the line of Saurabh Jain. Saurabh Jain, you can go ahead.
Unidentified Participant
Hello? Yeah. Am I audible, sir?
Mihir Vora
Yes.
Unidentified Participant
Yeah. Thanks for the opportunity. I have a couple of questions. To begin with, we — sir, at the beginning of the year, we had SOPs of INR175-odd crore, which were supposed to get into schedule during the second half. So how much of that INR175-odd crore got registered in Q4? And do you still think that — last time on the call, you had mentioned that the SOPs of around INR225 crore to INR235 crore would go into FY ’27 because we had some orders — new orders of INR40 crores, INR50-odd crores. So, if you can just throw some light on that?
Hiren Dilipbhai Doshi
See, your first part of your question, say, out of that INR175 crore revenue, what we have projected, and for the new program, new customers, out of that, almost 60% of that volume, it has been started. Why 60%? it’s not like that order cancelled or rather order has not started. It has started with a low offtake. And certain orders, it has been postponed because of this — let me tell you, two big customers based at U.S., it was completely — rather they have, what do you say, temporarily just closed down that particular plant where the import duty was 3%, and thereafter phase-wise it has been to 53%. So, it is something, what do you say, a very unviable factor for the customer of my customer.
So those couple of programs have completely been on hold, or rather you can say a zero supply as on date, which was significant amount, and here again, as I told you initial part or maybe in the earlier commentary also that we had a loss of existing business maybe of 20% to 30% of bearing rings as well as particularly from the U.S. as I have just told that 30% of my U.S. revenue compared to previous fiscal, it has reduced in this current fiscal. Now these numbers, whatever the reduction is there, in spite of that, we are having the same kind of flat top line. So how I will be able to maintain that top line, that is because of the new orders, new customers. So, it’s not that it has not moved. It has moved. Couple of reasons, as I told you that volume has been reduced. A few orders have been deferred to three to six months. Few orders have deferred by almost a year or so.
Coming to the second part of your question where you were mentioning that INR225 crore, INR230-odd crore something for the fiscal ’27, we expect, as I told you, that maybe we would be closing somewhere about INR1,150-odd crore something top line in this year wherein I expect almost INR200-odd crores — somewhere about INR180 crore to INR200 crore additional revenue from these new programs because something it has already been started.
Unidentified Participant
Yeah, that’s helpful, sir. Just a follow-up to the previous question. You mentioned that we have a monthly order book of INR95 crore to INR105 crore for the coming three months. So, if you can just bifurcate that for us in terms of bearing rings and auto components?
Hiren Dilipbhai Doshi
Sir, bearing ring ranges are near to 45 percentage to 48 percentage, auto components again 50 percentage to 55 percentage.
Unidentified Participant
Okay. And sir, another thing is, of course you have mentioned about the tariffs and more clarity is required, but post the recent announcements of Europe FTA and recent developments with respect to U.S. tariffs, how has been the communication with our overseas clients, like in terms of what kind of volume offtake can we see in the coming fiscal if at all it comes to 18% and 25%?
Hiren Dilipbhai Doshi
See, I told you, this 18% number as they have announced somewhere on 4th of Feb or something and they again came out that from 7th Feb it would be implemented. 7th Feb, it was Saturday, and today we are on the 10th afternoon, which is you can say the first working day. It was 9th over there. So, we are yet to know how it is, but as far as overall, we communicated and Mr. Mihir also conveyed, that my customer, as of now, they are okay or rather they have already absorbed 25% of import duty and we think once the momentum starts or once the overall activity would be on back to track, we would be — do not expect any negative impact on this thing. That can be managed because the kind of quality of the components and the range of the components, what we are supplying, it would be difficult to get it from some other part, other countries on a very decent way or even in other countries as you must have seen the duty structure might be on a higher side compared to India.
Coming to the other part, Europe deal as — new deal, definitely it is welcome and our customers have again starting reviving or rather revising their certain calculations and they are in — they have already indicated that they would like to source more from India. Now they are exploring what kind of components and how the value-added full components they can be import from the India and particularly from the Rolex. That is what the feedback we got from the European customers.
Unidentified Participant
Okay. If I can ask this from other perspective, what has been our capacity utilization in first nine months, and how do you think it is going to play out in FY ’27 and ’28?
Hiren Dilipbhai Doshi
We are almost 60% to 63% utilization of my overall this thing, and I hope or rather we expect it would be somewhere about — crossing 70 — in between 70 percentage to 75 percentage of utilization in next year.
Unidentified Participant
Great, great, sir. And lastly, if you can comment on profitability, how do you see with tariffs moving and volumes going up? As you mentioned that utilization is expected to increase from 60% to 63% to 70% to 75%, so how do you see profitability? Vis-a-vis, if you can just throw some light in respect to both the segments: bearings and auto components?
Hiren Dilipbhai Doshi
See, would like to comment on the net operating margin, because I’m not considering the other income margin, it might be temporary, because it consists of my investment income and foreign currency gain, etc. But coming to the net operating revenue, or you can say net EBITDA, which is somewhere about — it ranges of 20% and — in between 22% to — that is 20% to 21%. And once I’ll be having utilization up to 68%, 70% or something like that, definitely this operating margin would touch maybe 22% or 22.5% even, we can achieve once we have that kind of scale of economy.
Again, bifurcating into the bearing and auto components, definitely auto components, we have better margin compared to the bearing rings because of the critical operations as well as multi-operations and the high precision level. But broadly, we can say bearing rings would be in the [Technical Issues].
[Ends Abruptly]