Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Rolex Rings Ltd (NSE: ROLEXRINGS) Q4 2026 Earnings Call dated May. 18, 2026
Corporate Participants:
Hiren Dilipbhai Doshi — Chief Financial Officer
Analysts:
Mihir Vora — Analyst
Jason Soans — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good morning and welcome to The Rolex Rings Limited Q4FY26 earnings conference call. Before we begin, a brief disclaimer. This conference call may contain forward looking statements about the company which are based on the beliefs, opinions and expectations that the company has on date of this call. These statements are not the guarantee of future performance of the company and it may involve risk and uncertainties that are difficult to predict. As a reminder, all participant lines will remain in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes.
Should you need assistance during the conference call, please signal the operator by pressing Star then zero on your touchstone telephone. Please note that this conference is being recorded. I will now hand the conference over to Mr. Hiren Doshi, Chief Financial Officer of Rolex Wings Ltd. For opening remarks. Thank you. And over to you sir.
Hiren Dilipbhai Doshi — Chief Financial Officer
Thank you. Good morning and warm welcome to everyone present on the call. Along with me I have Mr. Manish Madika, chairman and managing director of Rolex Rings Limited and SGA, our investor relations advisors. I hope you have all received our investor tech by now. For those who have not, you can view them on the stock exchange and the company website. Fiscal year 26 has been a year that has tested our resilience challenges in numerous ways and ultimately reinforced our conviction in the long term opportunity that lied ahead for Rolex Rings Ltd.
We navigated one of the most complex external environments in the recent memory, held our business together with discipline and came out the other side of with our fundamentals intact, our relationships with strengthened and our future looking genuine exciting. Before I speak about fiscal 26, I want to take a moment to reflect on the bigger picture that we Rolex Rings were admitted to corporate debt restructuring that is CDR in 2013, a period that tested every part of this organization. But we stayed the course, focused on the building a better business and by 2022 we had fully exited CDR by clearing all dues to our lenders.
That was a defining moment for this company. In March 2026, precisely on 31st of March 2026, Rolex rings held honored its right of recompense obligation in full making total payment of rupees 101 crores to our consortium lenders. Every commitment made to every lender has now been met. The sled is completely clean. This is a statement of character. This company made a promise and it kept it. And with the ROR now fully settled, we enter the next phase of our journey. With no legacy obligations, no covenants, no restrictions, we are entirely free to focus on what matters most.
That is a building of great business and rewarding the shareholders who believed in us. In April 2026, our board approved a buyback of 1 crore shares at rupees 180 per share, aggregating to rupees 180 crores. The promoter promoters Group has chosen not to participate, ensuring that full benefit of this buyback flows directly to all public shareholders. Coming to operating fiscal FY26 FY26 was not without its challenges. The sharp escalation of US import tariffs, which picked at over 50% on our auto components, created significant headwinds in our export business, particularly in the commercial vehicle and heavy commercial vehicle segment that makes up the core of our US Exposure.
At the peak of the tariff uncertainty, a major customer temporarily shut down the relevant plant entirely. When duties import tariffs moved from 3% to 53%, our supply to that program went to almost zero. On an annualized basis, our U.S. Exports were approximately 30% lower than what we had in fiscal 25. And yet I am pleased to report that despite this disruption, we held our ground. We maintained our momentum. Full year revenue from operations came in at rupees 1144 crores, broadly in line with last year revenues.
We more than compensated for the US Shortfall through strong growth in Europe and a robust domestic performance. That ability to pivot, diversify and recover in real time is what makes this business resilient. Revenue from Europe grew by almost 25% during the year compared to previous fiscal and out of that, 60% of our new business nominations came from European customers only. This is a strong and direct endorsement of our product quality, delivery, track record and engineering capabilities. The the relationships we have built over decades with global bearing and automotive tier one companies are paying off in a very tangible way.
India continued to perform well. Domestic revenue grew by 50% year on year, with both bearing rings and auto components contributing meaningfully. Our domestic business has grown steadily over the last few years and we are now seeing a broader set of Indian OEMs and industrial customers recognizing the quality and competitiveness of our products. Though we face challenges in the U.S. I want to be clear we have not lost a single US customer. These are long standing relationships with leading global customer base and the programs are intact.
The disruption was tariff driven and temporary. With duties now normalizing, we expect the US order flows to resume meaningfully from Q1 of current fiscal I.e. FY27 coming to the operating numbers Operating Margins Our gross margin expanded meaningfully from 49.4% to 51.5% in fiscal 26 reflecting the positive shift in product mix towards higher value machined auto components and a better raw material management. The quality of our revenue is improving and that is a trend I expect to continue in coming days.
Even as the US import tariffs created revenue headwinds, we held ebitda margins above 20%, a testament to the underlying quality of our business, the strength of our customer relationships and our ability to adapt quickly to changing market conditions. Auto components now contributing almost 50% plus revenues and going ahead we continue to maintain it at 50%. This shift in business mix will be a driver of margin expansion going forward. I want to draw your attention to two specific items that together explain the substantial increase in my other expense breakup in Q4 of FY26 which are not indicative of any structural cost increase in the business.
Both these expenditures are a kind of one time expenditure. The company has spent almost 22 crore rupees by way of payment of customs duties at us. Out of that almost 50% of that are yet to be receivable from the customers on a prudence way on a conservative way. We have recognized entire expenditure in this quarter but the revenue is yet to be recorded in the top line which would be there in the first and second quarter. Apart from that we incurred approximately rupees six crores which is sixty million rupees in legal and professional expenses directly related to the closure of our right of recompense settlement with consortium lenders.
This is again a one time charge that will not recur. So both these things have made some abnormality on the face of my operating numbers. As far as other expenses are concerned, our business generated rupees 190 crores in operating cash flow and spent hardly 36 crores on capex, leaving substantial free cash for the company to deploy. Looking ahead to fiscal 27, one of the most exciting developments of fiscal 26 was the adding new plants of our existing customers based at various locations with few of the European customers.
We have not presence in their US and Mexico based plant which we got the program which we got the orders in the previous fiscal. These programs are on track to ramp up meaningfully from Q1 of fiscal 27 onwards as we step into fiscal 27, the business environment feels more favorable than a year ago. First, the US is coming back, tariffs have normalized and customers who were in a wait and watch mode through fiscal 26 are now re engaging. We expect US orders to recover from Q1 of current fiscal 27.
The 30% revenue decline we experience in the US through FY26 is entirely recoverable and the pace of recovery will depend on how quickly our customer rebuild their inventory, pipelines and production schedules. Second, Europe continues to fire the the growth momentum. What we built in fiscal 26 is continuing into fiscal 27 and more than 60% of our new program. What we awarded from the customers are from European customers only. We have genuine structural tailwinds in Europe, a combination of China plus one sourcing strategies, our qualification track record and the long term relationships we have cultivated with global tier one companies.
Third, our domestic business has strong legs. India’s automotive and industrial markets continue to grow. We are also beginning to see early contributions from EV and industrial programs, segments that we believe will become increasingly meaningful over the next two to three years. Rolex Rings has come a long way from CDR to debt free from financial stress to surplus cash, from a single geographic dependence to a truly diversified global customer base, from a pure forging company to vertically integrated precision machine components manufacturer.
Every step of this journey has been earned in last couple of decades. Fiscal 26 was a year that reminded us that no business is immune to external disruption. But it also reminded us that a business built on the strong fundamentals, deep customer relationships, operational discipline and a capable team can weather can face any storm. As I look ahead to fiscal 27 and beyond, I see Rolex Rings as a company that is well capitalized, well positioned and well prepared for the next phase of growth. Our ambition remains unchanged to be the most trusted precision forging partner for the world’s leading bearing and automotive OEMs.
We are well on our way with this I would like to thank all the participants who have joined and now I request we can now open the floor for Q and A session.
Operator
Thank you ladies and gentlemen. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use their handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Ladies and gentlemen, if you wish to ask a question, please press Star and one. Ladies and gentlemen, a reminder if you wish to ask question please press star and 1.
We take the first question from the line of Mihil Vora from Aquarius Securities. Please go ahead.
Questions and Answers:
Mihir Vora
Yeah, hi, thank you for taking a question. So sir, my question basically is on the current situation where we are seeing this geopolitical issues. So are we seeing any sort of, you know, order delays from the customers, freight cost increases and what kind of issues are we facing currently? Or is you know sort of the situation still in control?
Hiren Dilipbhai Doshi
Yeah Meher, as you said rightly the freights are bit increasing but the positive side is that we didn’t have any indication of differing or delaying the orders as of now for last couple of months, that is from March 26 onwards our customers came back on the track and they are rather giving us forecasting or dispatch schedules as per their original program. We do not expect much of the disturbances from now subject to this geopolitical reasons. Further it will not abstract
Mihir Vora
But just so in the terms of container availability, is it issue or is it not an issue as of now,
Hiren Dilipbhai Doshi
Partially it is but somehow we are trying to manage, you know we are trying to get the containers maybe by giving some premium on that just to meet the customer production schedule and ordering their dispatch schedule schedules. We are trying to managing but there is a delay of you know maybe two to three weeks on availability of container and maybe a bit of extended transit days also. But we try to manage our inventory at a warehouse and consignment shop. But that’s true that we are getting some difficulty in containers.
We expect that to be resolved maybe in coming days.
Mihir Vora
Okay, and just a follow up on this sir like see there are cost inflation in terms of trades and commodities. So what is a normal pass through period for us in terms of overseas customers? Is it a quarter lab or a two quarter lab?
Hiren Dilipbhai Doshi
With majority of our overseas customer we have a quarterly pass on for the raw material cost maybe with the couple of customers it’s on a half yearly base kind of thing.
Jason Soans
Okay, okay, okay. So my second question is just something bookkeeping. Can you give me the segment wise number which you regularly give on the call that is domestic bearing, export bearing Etc.
Hiren Dilipbhai Doshi
Yeah, for the fiscal 26. I’m telling you a domestic bearing rings is 386 crores. I’m rounding up to cross domestic auto components it is 170 crores. Export bearing rings it is 154 crores. And export auto components it is 350 crores. All put together it’s almost 1060 crore.
Mihir Vora
It’s
Hiren Dilipbhai Doshi
Only components scrap revenue 71 crores. Export incentives is 1313 crores. 1143 cross.
Mihir Vora
Okay. Okay. Got it. Got it. Okay, I’ll fall back in the queue. Thank you.
Operator
Thank you. We take the next question from the line of Anubhav Mukherjee from Prescient Capital. Please go ahead
Jason Soans
Sir. Thanks for the opportunity. Sir, what would be the tariffs that list that we are currently like for bearing wings and auto companies.
Hiren Dilipbhai Doshi
See as of now our product falls under 232 section and it comes under Duty Terry for 25% at US
Jason Soans
And both. Both the products like both bearing
Hiren Dilipbhai Doshi
Certain kind of industrial bearings depends on their you know tariff adjacent classification which are there under 18. Majority of them are in 25 and auto components it is 100% under 25 percentage.
Jason Soans
Get that. And sir, will it be possible to share the split of exports by geographies like.
Hiren Dilipbhai Doshi
You want the precise in the numbers or the percentage of revenue?
Jason Soans
Either would be fine.
Hiren Dilipbhai Doshi
Okay, let me tell you of My total revenue US is somewhere about touching to 23 percentage whereas Europe again is almost 22%. Mexico, Canada and some other all put together couple of percentage and remaining 54% is there in domestic.
Jason Soans
Thanks for sharing that. And sir, I have a basic question. In your investor presentation it was mentioned that the domestic dairy wearing market is somewhere around 2,200 crores as far as I remember. So will it be possible to share what kind of market share do we have in that?
Hiren Dilipbhai Doshi
See what we have shared or rather what we have stated in the presentation. That is overall bearing rings business which is consisting of quite a wider range. And in our addressable segment say from a 20 mm in a diameter to 900 mm outer diameter product range. And again particularly from the hot forging route what we envisaging or rather we expect that overall market is somewhere about 1600-1800 crore domestic market wherein we do have share of almost 30% of that business.
Jason Soans
Answer. This is entirely catered by domestic manufacturers or is there any import component at all?
Hiren Dilipbhai Doshi
Partially it is there still there are certain import constituents. Are there certain kind of non availability of higher range of the products that those are still under import. But let me tell you those components have significantly reduced in compared to what we had before two years back. So there is potential to producing or other the import substitute or Indian manufacturers are getting better chance to produce those components also.
Jason Soans
And the final question from my side is like. Like what portion of our revenue is like actually fully machined and.
Hiren Dilipbhai Doshi
Almost 85% of my revenue it is machined components revenue and for 15% of my component revenue is from only through forge products or other to only forging process.
Jason Soans
What. What will be our current utilization?
Hiren Dilipbhai Doshi
My utilization is almost same what we had. As you have seen that my top line is almost at same this thing. So we are in the range of 62 to 63 percentage of utilization of my available or achievable capacity.
Jason Soans
Thanks, I’ll get back.
Operator
Thank you. Ladies and gentlemen, a reminder, if you wish to ask a question, Please press star and 1. We take the next question from the line of Saurabh Jain from Sunidi Securities. Please go ahead.
Unidentified Participant
Hello. Yeah, good morning sir. I have a couple of questions. One is on gross margin. This quarter we saw substantial expansion in the gross margin. So if you can, you know, throw some light on what was the reason? Was it entirely because of the product mix or anything else? And also if you can, you know, guide us on what kind of growth are we looking at for FY27 and FY28? Yeah, that’s all.
Hiren Dilipbhai Doshi
Okay, Taking to your first question. Yes, as you rightly said, the major portion or rather major factor for incremental GP gross margin is because of the product mix only. That is. Well apart from that there are some revenue as I told initially also that the custom duties, you know, what we have already received in the second quarter, third quarter from the customers that has been accounted as an part of total revenue. So cutting out that one. My major factor of this incremental GP margin is due to product mix and and even due to change of the steel from say overseas to domestic on certain product processes.
That is the main reason. Coming to the next part of your question, that is growth for FY27. FY28 would like to inform that for fiscal 27 what we expect as on date is maybe a mid teen growth 15 to 17% growth, something like that. And again same kind of growth would be there or maybe income maybe bit on higher high teen growth in the fiscal 28 that is on the basis of the orders programs, what we have already won and the ramp up what it would be there. But I have not considered the any kind of, you know, additional revenue what we have lost during this last one and a half year because of this geopolitical reasons, Terry for etc.
So that would be an additional to my overall revenue whatever the addition. As I told you initially that 30% of my U.S. Business has, you know, lost in this particular fiscal or of overall revenue. So we expect at least 50% of that would Be added again back to my normal practice minimum in the first half only and the remaining again it would be increasing, increasing in the second half. So but again conservatively I would like to stick on that. We are expecting somewhere about 15 17% growth in fiscal 27 and obviously hygiene or even beyond that in for fiscal 28.
Unidentified Participant
Okay, and so my next question is on CapEx over the next 2 to 3 years because of course we are running at lower utilizations but in case if we want to diversify a bit because we have a cash position of 367 crore. So another question is on now we are out of financial encumbrance so what kind of dividend policy are we looking at with not any significant capex and substantial cash on the books?
Hiren Dilipbhai Doshi
Yeah, see as you say that we had a huge amount of cash surplus but at the same time we have already announced this buyback which is of 180 crores. So that would be and some kind of you know, initiation to honoring the the stakeholders and where in particularly promoters have not taken not going to participate. So that is one apart from that what you ask is for the dividend. Definitely we are in process or rather we are in the thought process to you know, even offer for the dividend. But we would like to have some kind of.
We would like to preserve some cash with the company. As you know that ours is a capital intensive industry. No doubt we do have capacity, spare capacity available but there are certain kind of range of the products where the equipments are almost 80, 85% capacity utilization. So in that segment we need to capitalize or we need to incur capex year on year basis. So there would be there on minimum 30 to 40 crore bare minimum capex plus maintenance capex etc that would require for a year on year basis.
And as I told you the situation, the geopolitical disturbances and there are uncertainties is still prevailing into the world global economy. So we would like to be with some kind of conservative as far as our surpluses are concerned. So that would like to be there in the company but again it is not, it doesn’t mean that we are not going to distribute profit to the stakeholders. That is again in the next agenda of our line item faster. We would like to honor this buyback and thereafter we may think further on that.
Unidentified Participant
So 50 to 50 odd crores of annual capex, is that right for this year and next fiscal
Hiren Dilipbhai Doshi
Broadly? Yes, yes.
Unidentified Participant
Okay, that’s all from my side sir. Thank you. Wish you all the best.
Hiren Dilipbhai Doshi
Thank you,
Operator
Thank you. We take the next question from the line of Nishita Sanklesha from Sofia Capital. Please go ahead.
Unidentified Participant
Yes, hello. So most of my questions have been answered. I just had a question on order book. If you could like quantify the order book we currently have and the order book. We expect the order book pipeline in FY27.
Hiren Dilipbhai Doshi
See in my case customers are giving broadly awarded a program for five to seven years. And then once the program starts, SOP starts, you know, it will drill down on the forecast of three to six months kind of thing for the overseas customer and for the domestic it would be maybe a couple of months or something like that. If I’ll tell you as of now I do have a monthly order book for next three to four, three to six months even till the first half of this fiscal. Current fiscal on an average 115 to 125.5crore rupees dispatches plan for this first half on a monthly basis.
Unidentified Participant
Okay. Okay.
Hiren Dilipbhai Doshi
See as I told you earlier that you know the certain order programs what we won in fiscal 26 those have just started with a volume of maybe 10, 15%, 20% kind of thing. Now those orders further will be ramp up to 50% 60% of their overall pick level. And that would be ramp up in this current fiscal during these four quarters or something in there in first, second, third, fourth and onwards. So these are the. Apart from that we are also in you know, process or rather in dialogues with couple of new customers for the new program.
But in our business, in our industry, the new customer evolution and final program winning. It’s a validation activity of more than 15 to 18 months. And if it is a critical components for the auto comp. Auto application definitely this time may extend more than 18 months. So with the new customers, with the new plants of our existing customer with whom we are in dialogue as of now that would be recognized maybe down the line one and a half year or somewhere in fiscal 28.
Unidentified Participant
Okay, okay, understood. And just wanted to understand how has the current geopolitical situation affected our inventory days? If they have affected
Hiren Dilipbhai Doshi
Inventory days but stretch not significantly but we tried to manage and you know in. In. In between fiscal 26 we have also red is as our customers at us are facing some kind of slowdown and they’re partially shut down something kind of thing. So that we have stopped and good amount of our consignment inventory have already been consumed. So will not have significant impact as far as the inventory days are concerned. But definitely we do have imports also where in the transit period has been stretched But I think in next three to four months that thing also will be settled.
So there would not be any significant impact on inventory days.
Unidentified Participant
So like what is the range that our inventory days to be around?
Hiren Dilipbhai Doshi
Sorry,
Unidentified Participant
What? What is the range that we expect our inventory days to be around? Like in a season cut
Hiren Dilipbhai Doshi
Off date on an annual. You know if you check my annual numbers, audited numbers wherein the inventory which is in transit also been considered as my. You know sales which is in transit is considered as my inventory because of my incotums with the customer. But if I’ll move out that portion, I would be having some about 70 to 85 days of inventory. But considering that sales in transit it would be touching 150 or 160 days.
Unidentified Participant
Okay, okay, understood. That is it for myself. Thank you.
Operator
Thank you participants. A reminder, if you wish to ask a question, please press star and one we take the next question from the line of Jason Sones from IDBI Capital. Please go ahead.
Mihir Vora
Thank you so much for taking my questions. So my first question just for 10. I know you gave the breakup for 26 revenue. Just wanted the breakup for the 25 revenue sir in terms of segments export bearing rings, export automotive in those segments.
Hiren Dilipbhai Doshi
Yeah. Kindly note it down. Yeah. For fiscal 25 the domestic bearing rings was 329 crores. Domestic auto components 177 crores. Export bearing ring 155 crores and export auto components 399 crores. Crap it was 78 crores. Export incentives were. 16 crores. One existing.
Mihir Vora
Sure sir. Thanks. Thanks so much for that. Now I just wanted to know you spoke in detail sir about the outlook and all. Just sir wanted to know how is the domestic demand outlook looking? You know things have been little weak for us this year but now going there was some slowdown in the bearing segment and all that. So just with regards to the big three in terms of the bearing manufacturers, how is the demand looking on the ground, localization and all they were speaking about capex on the ground etc in terms of India.
So just wanted to know how is the domestic faction looking sir in terms of the demand for the bearing ring.
Hiren Dilipbhai Doshi
I’m bit more bullish on domestic bearing ring business also because if you see in fiscal 25 what we had is somewhere about 329 crore revenue whereas in FY26 it has gone to 386. So more than 15 17% growth, 18% growth in this domestic bearing ring business only. So we expect to remain it continue. And again as I was mentioning that 13 or good amount of import substitute have already been started producing in domestic market and those will be in continue. And we expect our customers are also growing as far as their capacity as far as their production.
The numbers are quite encouraging and we are getting good response or good reward from them. Also in terms of order winning, let me tell you one of the domestic customer who. With whom maybe before one and a half year back I was almost at zero. And today of my monthly revenue maybe three and a half to four percent of my revenue that goes to only that one bearing manufacturer. So again my existing other customers like big OEMs. Sorry, big bearing manufacturer, they are in rather I got an incremental component increase as well as the current volume of the existing products from both the way from almost my four customer out of six customers only.
We are facing some kind of, you know, stagnancy as far as the industrial bearings or a bigger size of bearings are concerned where entire industry is also facing such issue.
Mihir Vora
Okay, sure, sir. And sir, on this you did mention that the tariff, of course the tariff situation last year has been pretty volatile. So it was first half, I believe it was 53%. Then it came down to 28%. Now sir, on the average portfolio you said tariff is 25%. Now considering that we see the good demand coming in from the US going into a point 27.
Hiren Dilipbhai Doshi
Yeah. As of now my customers are, you know, just for last, very frankly for last four months, five months, there was not a change in any kind of duty structure except that you know, the Supreme Court decision, what it came out now the further half it would be we don’t know. But unfortunately that Supreme Court decision do not car cover this 232 section. So in our product it is 25% as of now, which my customers have also accepted. And the markets has of their OEM also accepted that one. And you know, these 25% on my component may not be a substantial on the overall assembly what my customer is selling to their OEMs.
So I think my customer and OEMs are well prepared with this 25% base. And for last two and a half months again it came on track. And further whatever the loss we had in the previous fiscal, we expect that it would be come on the back on the track on a monthly revenue what we had prior to that.
Mihir Vora
Okay, okay. So customers have accepted this 25% and now you think things should improve from your own, right?
Hiren Dilipbhai Doshi
Yes, yes.
Mihir Vora
And this is, I mean you have you know mentioned in the presentation also that there’s your customs duty Due to which the other expenses have gone up. Now what I understand is would that mean that, you know, when it was 53%, you paid a lot more and there is some reimbursement supposed to come because I’m a little unclear on how that other expenses exist. Exactly.
Hiren Dilipbhai Doshi
You right, you rightly understood that, you know.
Mihir Vora
Yes. You know, for
Hiren Dilipbhai Doshi
In between portion I have paid 53 percentage of Europe customs duty. And very my customers are going to reimburse me 25% which are yet to be recognized. And you know, even post decision of the Supreme Court, I’m supposed to get some kind of refund from the US Government. And out of that refund, you know, partially, we are supposed to pay back to my customer also. So whatever I am supposed to pay back to my customer that I have already recognized in my expense and I’m conservatively, I have not recognized the revenue, what I’m.
Or rather the inflow what I’m expecting in this quarter, maybe by September 26th. So that would be added back straight to my revenue when as and when I received.
Mihir Vora
Sure. But just one thing, I mean, when before October, I believe it is 53% or something like that. So I mean you must have put the revenue as well as your customs duty as well. Why there is a lag?
Hiren Dilipbhai Doshi
Not directly, you know, one to one kind of thing. There is a assignment arrangement with my customer. So the duty applicability for me it is as and when the goods are cleared for you at U.S. Customs. But for my customer, as and when they lift the material from the warehouse, you know, they are going to pay back me accordingly as per the credit terms. So there is a time lagging in between the. That.
Mihir Vora
Okay, okay. So you are saying some, some of the goods still have to be lifted by the customer. So when they lift it, when they lifted the revenue will come into your, your top line and the excess, let’s say 53, you have paid. So whatever differential that also will come through. Is it a, is it like a retrospective? Yeah, yeah, yeah. Okay. So that is what yet to
Hiren Dilipbhai Doshi
Be recognized. And whatever the, you know, even the consignment which is there at my warehouse, or rather a nominated warehouse at us, those are entirely duty paid. And that has been already recognized.
Mihir Vora
Thank you, sir. Thank you. And also one question I had is Europe also was pretty weak in the initial part of the year. You know, when you go back 12 months and now Europe seems to have improved quite a bit. You know, you’re talking about good outlook, anything macroeconomically also Europe was pretty weak so even peers are saying that Europe is seeing good demand improvement. Anything that has changed on the ground materially in terms of policies or something which is bringing back growth in the Europe.
In Europe.
Hiren Dilipbhai Doshi
See definitely there are certain kind of stimulus, some kind of, you know, boosting to just revive the European economy and the industries or the consumption, the production which was almost zero at Europe level. And the even as of now they are facing some kind of inflationary for this conversion cost, power cost and other remaining, you know, labor issues, etc. But the demand, end use, demand retain that is being started off. And that is why the reason, you know, the orders or rather the quantum which has reduced in fiscal 2425 that has came up again.
And for me the good part is that we got new orders from my customers as well as for the new plants, which was completely zero to me. But even as of now they are at say 30, 40% of their production. But it is 100% growth to me when I they add back these 30% 40% to me. The first half maybe till July 25. We had initially just started some kind of initial dispatches and then the ramp up has started. Though it has not significantly ramp up in current fiscal. That is a fiscal 26, particularly in the last quarter of fiscal 26, that is Q4 we had a good thing from the Europe and that will remain continue and to be increased in fiscal 27.
Mihir Vora
Sure, that’s good, that’s good. And sir, one you had given an update on the the 1.75 billion of order inflows which we’re expecting. Of course I know that this year has been very, very volatile with tariffs and all. But most of that those orders, that pipeline which you had mentioned that was in Q3FY25, is that on track or how is that? I just wanted an update on those order inflows which you had mentioned.
Hiren Dilipbhai Doshi
See, let me tell you the order book of hundred and this 1.75 billion what you mentioned. We told it that somewhere in December 24th that we are expecting these kind of revenue on the basis of the order book in fiscal 26. Right. But let me tell you out of that, you know, the partially it was from us and partially from Europe wherein Europe has turnaround with the certain positivity. But we got a hit in the US business out of that 175, you know, maybe 75, 80 odd crore business, something we were able to add into my fiscal 26 business.
But remaining not but of that program, you know, couple of programs are still on hold at us. I’m not considering that thing in my fiscal 27 estimation. But beyond that all the orders are on track and apart from these 1.75 overall business we got a new orders from European customers which further would be added. So partially it was started. Few orders are still on hold but the remaining would be added in fiscal 27 along with the new orders. What we win from European side. So in. In this current fiscal.
That is fiscal 27 I expect again on the basis of the order and all this pre. You know fiscal, previous fiscal order pendency etc all put together again 160, 10665 crore revenue would be added apart from my existing business.
Mihir Vora
And just one thing, just on the direct thing. Again just some clarification this one now again the 31st of October before it was 53%. Now it is 25%. So just wanted to understand if it’s 53% when the tariff has been reduced to 25% are we getting that extra money back? Also as in what I meant to say is that extra 28% what we paid is it going to come back or is that. Is that gone and now it’s 25% from now on. Just wanted some clarification on that.
Hiren Dilipbhai Doshi
See as per the Supreme Court judgment, you know. Yeah. Till till November my product was class was not there in the list of 232 section. So whatever the duty I have paid during that point till that point of time it would be refunded additional duty which has implied because of IPA right. That will be refunded. But beyond that say from November 25th onwards whatever the duty I have paid which is 25% of that I’m not going to get back because that is under 232 section.
Mihir Vora
Okay. Okay. So before October that what you paid 28 roughly you know this that you will be that way you will get refunded which is. Which should be a good amount. So that is very positive for you see
Hiren Dilipbhai Doshi
It is not there. And for the entire till October 31st I’ll be get. I was paying 28% or rather 53%. There were a portion prior to that it was 28. There was a portion prior to that it was 13. Right. So it starts from that thing and this 1328 and 53 there is a basic the duty which was already there 2.97 prior to this hyper Terry for this thing. So that would not be refunded. So it is a question of 10 additional 10% additional 20 25% and additional 50% out of that whatever. I hope it till now 31st of October under hyper tariff.
That would be. I’m expecting refund on that amount, not beyond that. Again, there are certain litigation as far as the online refund and all these things that we are trying to coping and to the best possible of these things we are going to get back. And that would be straight away added to my revenue.
Mihir Vora
Sure. And just finally one question wanted to ask on the TV side, even domestically and export side also, are you seeing some good traction? Because now finally I see EV is seeing good traction in the domestic market also. So just wanted to in terms of bearing rings or automotive components, are you seeing good traction on the EV side?
Hiren Dilipbhai Doshi
See, we are not facing or we do not see much of the traction as far as the EV market in overseas countries till now, even when we are talking with our customers for the new programs or for the new business, they are still on the more concentrated on this ICE and the hybrid kind of vehicles or other transmissions. So it is true that some portion in India domestic market it has been increased. But if you see overall the other ICE market has also increased. We do not see much of the traction because of ev.
And again, we are well prepared if we. Even if the significant penetration would be there, which is as of now for next five to seven years, we do not foresee. But even after that, if it is, oh, we are able to produce, you know, the components required for the EVs in terms of, you know, gears, transmission parts or maybe bearings also required in those EVs. So that would not be a much of the issue.
Mihir Vora
And this ROR element is absolutely finished right now. There is no more anything coming up on that front.
Hiren Dilipbhai Doshi
Yes, yes, yes.
Mihir Vora
Thanks for answering my question, sir. Thank you.
Hiren Dilipbhai Doshi
Okay,
Operator
Thank you. We take the next question from the line of Kush Nahar from Electrum pms. Please go ahead.
Mihir Vora
Yeah, thank you for the opportunity. So, couple of questions. So first being that like you elaborated that the gross margins had expanded for this quarter because of the product. So I just wanted to understand how sustainable are these margins and excluding the other income, where do we see our EBITDA margins on a normalized basis in the next two, three years? And secondly, so do we have any plans to enter into warm forging or cold forging where the products are, you know, near net shapes and less machining is required and the NGOS can be in a more precise industry in terms of engineering.
And so lastly, like you mentioned that there are some OEMs which have shifted their manufacturing and imposed substitute is happening so directionally since we are the largest players in terms of installed capacity in India, do we see this market share of 30% increasing to maybe 50%, 70% because of capacity that in line are we doing the capex accordingly?
Hiren Dilipbhai Doshi
Okay, so from the bouquet of your questions, let me take the part one is for this incremental GP and the what would be generalized gross margin in a normal case. See as of now, let me tell you in my kind of business, or in my business particularly, you may expect expect overall gross margin to the extent of, you know, in the range of 49 to 53 percentage kind of thing. That would be there again product mix. And you know, because as I do have a good amount of our versatile range of the products. So there is a different kind of inputs in different kind of steels required domestic over overseas and with the different companies position.
So that cost matters. But generally it ranges in between, you know, 49 to 53 percentage kind of gross margin. Then I think you have also asked for the EBITDA net operating EBITDA that is other apart from the other income. As you must have seen that generally we have this operating EBITDA in the range of 19 and a half to 21% kind of thing. I expect on a conservative way operating EBITDA would not be less than, you know, 20 and a half percent, 21% kind of thing. And with the incremental growth further it may improve because maybe I’ll be getting the benefit of scale of economy and fixed cost absorption.
I think those were the couple of this thing and the next one. What you have asked is about warm forging and cold forging kind of thing. Let me tell you, we are 100% there in the hot forging route as of now and we are producing you know, major chunk or more than 85% of my overall business or products are machined one and those are also near net shape kind of thing. So we are already there into that and cold forging. Again it is some entirely a diversification kind of thing and it is requires a different kind of entire setup.
So down the line as of now, it is not that aggression that we are going to have a cold forging business, but it is there in our mind. But once we would like to utilize or get the maximum benefit of this hot forging for which we have already settled, good amount of equipments and entire facilities that is there. And the other other portion, I think what you have asked is for the import substitute kind of thing in the domestic business. Let me tell you the way it was expected. Definitely it is not that encouraging that import business is straight away coming back to India.
But partially it has increased and still it is on the, you know, coming way. My customers are diversifying or rather increasing their capacity to produce a bigger size of products or to considering them as an import substitute and settling the facilities. But because of all these geopolitical disturbances also that also gets some kind of disruption. But the things have started and we are also going benefited with that and partial business or some kind of new range of those products. It has already been started with us.
Not may not be significant as of now but down the line it would definitely increase. Coming to other part of your question that currently is it is 30% of my bearing ring business in rather than in domestic which may go up to 50, 60, 70. See 50, 60, 70. Definitely it’s a big time or a big journey. Maybe in not one and a half two years I will be having 50% stake in the domestic market. But definitely I expect 10 to 15% jump on my domestic bearing ring business on year, on year basis. So that will definitely increase my share into the domestic business.
I hope. I have considered or rather I have taken all of your questions.
Mihir Vora
Right sir, thank you for the detailed answer. So just lastly, so since we have a 30 market share who would be a next serious competitor?
Hiren Dilipbhai Doshi
I don’t want to name any serious competitor. First of all, I am very much concentrated on my business, my facility because the kind of my setup and the facility what we have maybe the down the line the other people having hardly 20% of that or even something like that. The kind of different, different, you know, more than 26 kind of different forging lines. More than 625 CNC spindles under one setup with these kind of value added processes. Definitely it’s nobody’s there but my, I cannot say even my peer or rather the other players who are there into this kind of business or within the certain range of the products what I am producing as of now.
So they are there but in fact or rather they are more than what you said, not more than 10 to 15%, 20% of my overall capabilities.
Mihir Vora
All right, so thank you.
Operator
Thank you. We take the next question from the line of Radha from Motilal OSWAL Financial Services Ltd. Please go ahead.
Unidentified Participant
Hello sir. Thank you for the opportunity and congratulations on the settlement of the long pending restructuring case. Sir, I wanted to understand in Europe is the demand recovery only in the commercial vehicle space or also in the passenger vehicle space and what kind of industry growth do you expect in FY27
Hiren Dilipbhai Doshi
In Europe? I think major chunk what we got a growth is from, you know, the passenger vehicle as well as the light commercial vehicles growth. And the portion of that growth is you can say 70% it is there from this segment and maybe balance 25, 30% is from the industrial segment or something thing. And we expect that this industry growth definitely automotive growth would be on a higher side compared to industrial growth. But in domestic and in Europe we expect that industrial applications for the bearing ring business that is the high time to grow now as of now maybe.
Unless and until this disruptions geopolitical factors may be settled down in before end of rather first half or maybe in next couple of months. I think there would be a good significant improvement what we are envisaging.
Unidentified Participant
So what is driving this growth, sir? Is it inventory restocking that is happening over there?
Hiren Dilipbhai Doshi
No, for Europe it is not inventory. You know, this consumption of inventory or inventory clearance of inventory pile up. Because as such as I told you that for me these are the new customers or new plants. So obviously there would not be a question of any kind of inventory pile up. But Europe again it was very low for last one and a half year. And there is no inventory pile up issue over there. So it is an growth in their production, in their actual ramp up.
Unidentified Participant
Out of the 30% revenue loss in US how much revenue loss can be attributed to that one customer which has shut down the plant due to the tariff?
Hiren Dilipbhai Doshi
Major chunk of that. You can say 75% of that is because of that, you know, duty tariff of 53 percentage.
Unidentified Participant
You had given a comment that this entire 30 revenue loss is recoverable. So if 75% of the revenue loss is attributable to the shutdown of plant by a customer, then how is the. How is this portion of the revenue? I told you
Hiren Dilipbhai Doshi
That that was a temporary shutdown. And for last four months again it came on the track. And for last couple of months I was. I have already started dispatching the level what we had prior to this slowdown.
Unidentified Participant
It’s
Hiren Dilipbhai Doshi
Not that, but they have cut down my. You know, the products have been shifted. They cut, canceled my order. It is a simply reduction of particular this though they have been asking all the components what I’m supplying to them. But in a reduced quantum prior to this three, four months back. But from February 26 onwards it again came back on the track. And the volume what I have lost or the 30%, something like that. Partially it has already been started in a recovery mode.
Unidentified Participant
Lastly, if you see the last five years revenue, overall revenue for the company, the growth seems to be constrained as you are present in three key geographies and there is rarely a time when the demand of all trade geographies remains strong. So going forward, what are the key growth drivers that we can expect from the company in order to address these demand and technical challenges that we have across geographies? Are there any plans for new product introductions or new customers, any market share gains, anything that you can have?
Also
Hiren Dilipbhai Doshi
See madam, that is a continuous process over here. Let me tell you, in last three and a half years though my revenue is continuously maybe on same kind of level. But in last three years we have developed many components for the heavy medium and heavy duty vehicles, for ev, for hybrid and for an industrial customer. So many products have been and because of that only we got new orders in the previous fiscal. Let me tell you, prior to this new orders from Europe we do not have. We didn’t have much of the presence of in auto segments in European business.
Now it would be there combination of. You know though the bearing ring segment in Europe is bit down because of industrial this thing. But again now I do have a good presence in this auto components. So the growth in the business in Europe compared to previous fiscal is 25% in business fiscal 26. That is mainly from the side of business. So there is a development in that segment. In US we have also didn’t have much of the growth because of this duty tariff and all these things. But again we are in dialogues with a customer wherein the couple of bearing ring companies into industrial bearings they are in process of appreciating.
But again they are just differing this because of this duty matter etc. Coming to the domestic I if you see my numbers for last three years on a bearing ring business, I am getting incremental business into the bearing rings. Even I am getting incremental business in the auto segments. Also I was not supplying indirectly to the OEMs based in domestic market for the automobiles. But now through my couple of supplies I have already started good amount of business to these car manufacturers.
Operator
Thank you ladies and gentlemen. Due to time constraint we take one last question from the line of Pratik Bantia from Fermi 325 Investment Advisors. Please go ahead.
Mihir Vora
Yeah. Hi. Congratulations on stable set of number in a challenging environment. I just had two questions. One was in how in what percentage of factories are we present with our top five customers and what kind of share of business do we have with them. And the other question is as we have created a deep capability in bedding rings. What other auto component segment, you know, do you think similar capability can be built by us?
Hiren Dilipbhai Doshi
See, the first part is, you know, the first five customers. I think you have asked the contribution from first five customers, I would like to tell not of five customers. I would like to say a five customer groups. You know, when I see one customer, they are having certain plants in us, in Europe, in domestic. So I am supplying to all these different plants and for me each plant is a different customer. When I see a top five groups, you can say almost 65%, 70% of my business is from these top five groups, which may drill it down to somewhere about more than 15 plants or 15 different customers.
Mihir Vora
And what share of business do we have with them
Hiren Dilipbhai Doshi
On an average with this, let me tell you, with the bearing manufacturers, I think we are at 45, 50% of their wallet share, the major three players. And in auto components with certain players, I We are at 35 to 40% of our their wallet share.
Mihir Vora
Okay, and the second question was like we have built deep capabilities on the bearing ring side. What other auto component segment do you think
Hiren Dilipbhai Doshi
We do have capabilities to produce hot forged auto components, which we are, let me tell you today we are producing more than 150 kind of different auto components consisting of, you know, rough gear blanks, pinion, crown, wing crown and pinion, then sun ring, then gearing, then bush, then shafts. So these are the things what we are very much capable to produce. But we do have expertise, or rather you can say a bit of more competence in producing transmission parts, chases part and few of the steering components.
And there we have good amount of opportunities.
Mihir Vora
Okay, and one last question. We
Hiren Dilipbhai Doshi
Are able to produce, you know, the components required for the EV and hybrid both so that also can be produced from our capabilities.
Mihir Vora
Okay, and one last question was going ahead, what percentage of capex, you know, would be what the capex split between, let’s say machining and forging.
Hiren Dilipbhai Doshi
See, machining, it depends on the kind of the new business. What I have been awarded forging is in the range of the business. What are the range of the products, what I would like to address. So you can say 70%, 75% of out of 100 rupee it is towards forging kind of setup and maybe 25, 30 rupees required for machining and other capabilities.
Mihir Vora
Okay, and any inorganic opportunities are we looking at since we have some cash on the balance sheet?
Hiren Dilipbhai Doshi
We are exploring that couple of things. But again it is on a primary stage, but we want to you know jump in into that thing as the things that overseas in US and Europe are not much encouraging or rather they are still under you know having in distance portion. So we are just exploring it. But we are on a very preliminary stage but we are very much open and we are in finding the proper opportunity. Also
Mihir Vora
Any specific segment we are looking at,
Hiren Dilipbhai Doshi
No segment would be broadly extended to our products or rather our capabilities or maybe in the line of the this thing on hot forging or extended value added processes.
Mihir Vora
Okay, thank you and all the rest.
Hiren Dilipbhai Doshi
Thank you.
Operator
Thank you ladies and gentlemen. With that we conclude the question and answer session. I now hand the conference over to the management for their closing comments.
Hiren Dilipbhai Doshi
Well, on behalf of Rolex Rings I would like to thank you everyone for joining us. I hope I have been able to answer all your queries. We look forward to such interactions in the future. We hope to meet your expectation in the future too. In case you require any further details or this thing you may contact directly to the company to me and or our invest advisors SGA that is Strategic growth and Advisors our investor relations partner. So once again I thank you all the participants for sparing your valuable time for considering our invest earnings call.
Thank you very much.
Operator
Thank you on behalf of Rolex Rings Ltd. That concludes this conference call. Thank you for joining us. You may now disconnect your lines.