Synergy Green Industries Ltd (NSE: SGIL) Q3 2026 Earnings Call dated Feb. 11, 2026
Corporate Participants:
Nilesh Mankar — Secretary
Shreya Shirgaokar — Associate Vice President of Commercials
Analysts:
Unidentified Participant
Presentation:
Nilesh Mankar — Secretary
Good evening everyone. We’ll start the meeting now. Thank you for joining the call. I am Nilesh Mankar, company secretary of Synergy Green Industries and will be moderating today’s session. Before we begin I would like to inform you that we will be recording this call. In case of any participant are not comfortable. You may feel free to drop off before we start the recordings. Thank you. This meeting is being recorded. Yeah. The agenda of the meeting is. First a brief introduction will be given by me. After that investor presentation will be given by Shreya madam and Q session. Q and A session will be held so next. So I would like to share the guidelines of the call. All the participants are kept on listen only mode by the host. All the participants are requested to not to record the call. And during the Q and A session we request you to introduce yourself. You with your name, organization name and then your question next. So we’ll move to the introduction of the company.
Dear participants, welcome to the Q3 of financial year 202526 earning call and investor presentation of Synergy Green Industries. Synergy Green Industries Limited is one of the India’s leading state of art foundries producing SJN Korea and steel casting for wind turbines, wind gearbox and general engineering industries. In the weight range of 3 to 30 metric tons. The Synergy Green Industries has installed capacity of 30,000 metric ton per annum and is in process of upgrading up to 45,000 metric ton. The company houses best in class equipment, IT infrastructure and quality testing facilities and is a top supplier to a major window EMS as well as leading gearbox players in the world.
SGL is a part of the Shirgaker Group which has diversified business interest for its 80 plus year history spanning across sugar manufacturing, foundries, hospitality and market research among others. We have the panelists for today. Mr. B.S. reddy, executive director, Ms. Shore, AVP Commercials and Mr. Nilesh Nara, that is myself, company secretary of a company. Now I would request Ms. Sh Madam to give the highlights of quarter three financial performance of the company.
Shreya Shirgaokar — Associate Vice President of Commercials
Good evening everyone and thank you for joining today’s call. The presentation is divided between industry overview, company profile and business business performance. And for the purpose of today’s call I’ll be skipping over the first part and directly covering the company profile as well as business performance. So Synergy Green has state of the art facilities based out of Kolapur, Maharashtra. With the current expansion in progress, we’re now split between foundry and machining. In the foundry we can produce up to 30 metric tons single piece castings. And we are in the process of upgrading to 45,000 metric tons in the machining.
We can also machine 30 metric ton single piece castings and we’re in the process of setting up the machine shop for 20,000 tons per annum capacity. Additionally, we’re also expanding our renewables portfolio and have installed 10 megawatt of Solars to support around 15,000 tons per annum. Our products are split between wind castings. About 70% goes to this segment, gearbox castings for the wind industry added about about 15% more and the balance goes to the non wind castings of mining, plastic injection parts, pumps, turbine casings as well as coal pulverizers. We’re trusted by 50% of the world’s top wind OEMs out of these A few business development updates that I’d like to highlight for today’s call.
We’ve successfully completed the development of 5 megawatt components for Nordex which has created opportunities for synergy across both domestic as well as export markets. Proto development for Envision has been successfully completed and we’ve received the go ahead for serial supply in FY27. However, this business has been slower than is expected for the offtake. We’ve also secured a pulverizer order from L and T and upon successful development of this we’re expected to contribute to the non wind segment and finally, we’ve received facility approval from BHEL for the production of power equipment castings. Moving to the business performance, our capacity utilization continues to be at peak levels in the current FY.
As of 31 December 2025, we’ve reached 89% of capacity based on the 30,000 ton per annum capacity levels. Now coming to the summary of unaudited financial results for the quarter ended 31 December 2025, the total income for the quarter dropped by 4.8% over the same period in the previous financial year the PBDIT stood at 9.62 crores which is around 34% drop over the same period in the previous year and PBDIT margins stood at 10.32%. Similarly, looking at the nine month ended data, we’ve had a similar a 4.8% drop in the nine month total income which stands at 252.92 crores and the PBDIT stands at 34.48 crores, a 10.2% drop.
The PBDIT margins for the nine months ended 31st December stand at 3.63%. There are a few parameters that have impacted our profitability in the current in the third quarter as well as that’s reflected in the nine month data. There have been higher outsourcing costs that are incurred during the relocation of our equipment from our old unit to the new unit. There have also been increase in operating expenses including manpower and other overheads which have happened during the establishment phase of the new unit. Increased finance costs and depreciation have risen from the expansion activity. These are all related to the CapEx plan that we have a program that we have as an ongoing activity.
Additionally, we’ve also taken a provision for the new labor code Impact on the financials finally, on the customers end we have lower export realizations in the third quarter. This is because of discounted pricing that kicked in in Q3 which was factoring in in house machining facilities that is currently under development. A summary of the unaudited financial results for the balance sheet for Q3FY26 the long term borrowings and non current assets have increased on account of the CAPEX or capital advances, drawing your attention to the short term borrowings and other current liabilities. There has been a corresponding increase in production as well as inventory to take care of current quarter sales as well as advances to suppliers on account of capital purchases.
Here’s a brief overview of our financials looking at revenue streams and estimates for the year. The revenue growth in the nine month ended 31 December was muted and this was majorly due to the delayed ramp up of new wind product segments that we were expecting as well as disruptions from the ongoing expansion activities that are currently taking place. Basis this our current order book the full year revenue growth we’re expecting around a 5% increase in the previous year. This means that the executable order book projection for the whole year stands at around 380 crores. Looking at the PBDIT margins over the period, the PBDIG margins drop marginally from 14.44% in nine months FY25 to 13.63% in nine months FY26 for the full year FY26 margins are predicted to be around 14% considering the ongoing activity Expansion Activities.
Taking a look at the progress of the CAPEX plan and its status, the foundry expansion is currently in progress and equipment commissioning is at its final stage which is expected to be completed in this the current quarter. The captive renewable power plant has been completed and operational since October 25th and in house machining, the first phase of machining machines have been set up and are operational. We’ve also successfully developed the protocastings and got them first time right in the machine shop as well as paint shop from our facilities. The phase two of machines to be commissioned are are expected to be commissioned in the first quarter or FY27.
Finally, taking a look at the FY25 26 performance outlook. The revenue growth is projected at 5% in FY26 over the previous year. This has been impacted by delayed ramp up of segment products and disruptions from the ongoing activities. As mentioned earlier, we also we are expecting export revenues to remain stable close to the previous year. PBDIT margins however are expected to be 14% for the current year considering the ongoing CAPEX plan. With this I’ll close the presentation and open the floor for Q and A. Thank you.
Questions and Answers:
operator
So good evening everyone. Thank you for joining this call. Now I would like to take you through the Q and A session. I call the names and please unmute yourself and go ahead with your question. The first question is Mr. Nitin Dharma sir, please unmute yourself and go ahead with your question, sir.
Unidentified Participant
Yeah, thank you for the opportunity, sir. So first of all I wanted to understand were we not aware about, you know, the changes in. In the numbers which are now, you know, suggested in the previous quarter Also because this expansion that we are seeing that is responsible primarily because of the margin changes and, and the top line, you know, projections. So were we not aware of or is it something that has got developed in last, you know, three months?
Shreya Shirgaokar
See, first thing is we were expecting like last quarter, you are right. We were projecting retaining a growth rate of around 20%. We had some signs of maybe around 3, 4% impact as well. But we don’t wanted to correct it because of the marginal 3, 4% kind of the revenue drop. Actually, you know, there are two major events the last quarter. We were expecting a big takeoff from the envision the product development. We are completing the product development due to some commercialization. These guys have dragged the serial productionization of that product. That was one. And the second thing is regarding the expansion activity, we already completed the commissioning of the one production, the contest.
We were expecting some kind of a takeoff. But we did not anticipate the kind of disruption in relocating the plantation. It was enormous. It was only a simple movement of the what you call the crashings from here to the unit two. But actually the entire set of the people moving over there, setting down. It took much more than what the way we were anticipating. These are two major reasons why we need to revise our guidance.
Unidentified Participant
So you mentioned about there is a disruption from the customer side Also what is the impact now? Are they. Are they lifting the things or they.
Shreya Shirgaokar
Are not see Envision the customer. What happened? There was a some specific query came from China. In fact I had a pur order and also I got a let of credit in my hand. And they have raised something related to the warranty related issues. So because of that then it went into the clarification. We have to hold the production. Actually no. So finally we got a clearance. Now we are moving into the the pre serial and the serial equity. So this the whole thing of envision which we were anticipating a business in the current year almost around 30 gross business which we were expecting that is getting spill over the the Q1 of next year onward section.
This we not anticipate because initially they took a lot of time in moving into the production. But when I had a purch and letter of credit in my hand we were very sure about it that things will move. But in between the project has to hold because of the some commercial discussions. And then finally it got clearance actually know.
Unidentified Participant
So are we saying that this is not cancelled? This is just got postponed the first quarter this number will be visible. Are we saying this way?
Shreya Shirgaokar
Yes, you are right. Yes.
Unidentified Participant
So the same number. There is no. No change in the. In the top line only the thing is that got shifted by one. One quarter.
Shreya Shirgaokar
Yeah, one quarter. You’re right. You are right.
Unidentified Participant
And we’ll be able to deliver it despite having the challenges in. In terms of our shifting the operations from one location to another. Or will there be some delay?
Shreya Shirgaokar
Yeah, this shifting has already been completed. Actually this we did the month of November we relocated October end of November beginning. We relocated our plan to the new unit. Actually no. Now the sequence is like this. The existing plant has got a three major operations. I’m talking in the past. Molding, melting and fettling. So what we did is we removed the fitting section from here and taken to the new unit. Whatever the space is created. By removing the fetling, we are adding a second production line. The first job is to move this activity to the new unit.
That we are done in the month of October or November. Now we are completing the balance of the civil activity that is also completed. One equipment is erected. The second equipment has to be erected. With that the complete the expansion activity get completed. Actually. So I don’t see any impact onto either order book or into terms of the the execution. You know, most probably this impact should be a a postponement of the whole subject by a quarter actually.
Unidentified Participant
So we are saying that Foundry and In house machining both the things are complete. Foundry is something which is getting completed in this quarter.
Shreya Shirgaokar
Right.
Unidentified Participant
Q4. So was there any delay in that? Also from the.
Shreya Shirgaokar
Yeah, mentioning there was no delay. See we have given the guidance of the two phases. Phase one is completed as per the original the plan and the phase two we are going in March. So both the things are happening maybe three, four weeks maximum. If one of the equipment total six machines were installing the one machine may get because there was a shipment delay from China to get that machine. So barring that I don’t see any significant delay in the machining action. Second thing is after commissioning of the machining we have already successfully developed this because this was one major technical vertical hurdle which we have to go through because we are a foundry guys for the last one and a half decade then machining is a new technology.
No, I’m happy to share that we got the right first component perfectly all right. In fact I. We got the approval from Vestas and also send me an actually no. Now we are gradually ramping up and plus we are also getting approval from the various other clients. That activity is going on. In fact last week only we got the recent quality certificates from the ISO and all those things are happening. Actually no. So the machine shop is in line with the way we have planned.
Unidentified Participant
So the margin improvement that we are talking about is not happening in this financial year. In this quarter, maybe next quarter onwards we’ll see. Or will there be some more time for stabilization of the operations of machining in the foundry?
Shreya Shirgaokar
I don’t see many this thing, it may be a gradual ramp up particularly this quarter. We were also not anticipating to go down below the the previous quarter this thing, you know, maybe a 1% here and there. Mainly because of the. What you call. We have added a lot of manpower to the new unit including the machining and there are a lot of development activities are happening apart from that. Simultaneously we are also doing a lot of product development, product development and capacity development. Both the things simultaneously happening, you know. So these expenses have come in this quarter and without corresponding realization of the the output from the machine shop now which will start gradually giving in accruing the benefits from the machine shop from the Q1 onwards.
Unidentified Participant
Yeah, because last year I remember that we were saying something like, you know, 500 crores plus kind of, you know, revenue possibilities. Now we are talking about only 5% top line growth. If I’m not wrong, just correct me if I’m wrong.
Shreya Shirgaokar
This year we’re not given 500 crores to top line. If. If you go back to the holiday this was given for the next year not for the current next year.
Unidentified Participant
Next year.
Shreya Shirgaokar
Next year. Yeah, next year. I don’t see any change in our guidance actually that should be intact.
Unidentified Participant
Okay, so 500 crore plus for the next year is intake as of now we have the sufficient orders for that, right?
Unidentified Participant
Yes, absolutely.
Unidentified Participant
And second is about the the margins. Will. Will we have the same margins or will will there be an improvement in the margin because we have now deployed the machining also in house it should go up.
Shreya Shirgaokar
Definitely it will go up. See at least I expect minimum 16 plus kind of the margins for the as far as the next financial year is concerned actually know.
Unidentified Participant
So what is the risk you see over there in top line and bottom line for next year?
Shreya Shirgaokar
See as far as the top line is concerned order book point of view. We have developed four major new OEMs. Whether it is a NX, Sen4meg platform, Envision and Adani. These are the four new products which we’ve added. Really if they give the orders based on the projects what they got. I don’t have a capacity to produce that much of castings. So we are discounting something one or the other customer even doesn’t perform Still I should be able to make a 500 crores plus kind of revenue. So looking at this situation I don’t see any big challenge as far as the top line of finder crores is concerned.
Actually no. The second part is as far as the margins are concerned the key target of enhancing the margins for coming from the two aspects. Solar is a very passive thing. Actually no. Once you install you get the electricity generator and it will get contributed margin There is no set. The second part is the machining Actually no. So machining the major hurdle of developing the product and technology prover that part we have done it now only thing what we need to complete is complete successfully complete the balance of the three machines action and execute the the product.
I don’t see much bigger risk on the the other side as well actually know. In fact our basis of margin expansion is totally based upon simple logistic cost saving. Today what is happening is for the US market we’re taking the overcastings all the way to Chennai and getting back to for the U S exports. So almost 3% kind of the logistic cost we are going to save to avoid the transportation to Chennai and getting it machined. Actually no. Plus the savings on account of in house machining These are the two drivers which I don’t Think fundamentally has gone away anywhere actually you know, because we are going to do next door.
So these cost should definitely accrue with us.
Unidentified Participant
I understand. No, because last time I remember that we were talking much bigger margin expansion. But today you seem to be more conservative. So that’s why I was little concerned. Are we saving sufficiently or are we looking at some other additional risk?
Shreya Shirgaokar
No, no, no. See I If you really on our this thing doesn’t change 18, 20% month it’s 100% intact. I don’t see any reason it will go away. When you asked about the next year how it is going to be because the first machine is going. All the machines are getting commissioned in the March or April. So the maybe a 1/4 kind of thing it may take off in terms of the getting the full potential margin getting added up. That’s why I’m telling probably if you look at the. The second half of the quarter we may be clocking 18, 20% kind of thing.
But I’m taking on a weighted average role at no cost. It should not go anything actually. See 100 basis point margin always keep on oscillating because of the. The commodity cycle and what you call the customer realization. Today if you look at the kind of commodity the way it is moving on a daily very volatile kind of thing. You know particularly I’m talking about from January onwards the commodity prices have gone up by 8 to 10% actually that’s the kind of thing but I’ll get the correction from the customer. But it will happen with a 1/4 lag actually.
You know. So these are the various. The. Because the copper has moved up the other commodities the way it is placing. Barring that I don’t see any risk from the customer side and everything because the prices are frozen. I have a contracts in my hand. The only thing it can affect my margin is the commodity action. That too if what happens it happens impacts for a quarter and it gets neutralized in the next quarter because there is a back to back hedging on the commodity actually know.
Unidentified Participant
Okay, my final question is what do you see about the impact of the trade deals that have happened? Is there any impact on us? Was the tariffs which were imposed in between was was it also impacting us? So. So just wanted to have your thoughts on that as well.
Shreya Shirgaokar
It’s a very important subject. You arise in fact in the past even though no customers can ask for a 50 discount corresponding to the 50% trade tariff barriers Actually no, but always there will be some element of pressure if not 50% can you contribute for 2% 3% this kind of margin dollar always will be there when that kind of tariff is sitting on our right action neither customer can leave us nor we can leave the customer actually no we have to carry forward but there is some element of pricing pressure when it comes to such a kind of 50 kind of margin is there on our head but now since this has got relieved I don’t see that kind of the impact the second important thing is soon after margin this thing was.
Sorry tariff was announced Waiver of tariff was announced I got a immediate call from some of the US clients so I’m expecting a big order book now he’s saying don’t stop the production please go at the full speed Means this is the kind of the positive impact what I’m losing from the thing I.
Unidentified Participant
Am expecting what is the capacity utilization.
Shreya Shirgaokar
Currently See if you consider the last the existing 30,000 tons kind of capacity we are almost doing around 90 plus kind of the capacity utilization but as I told in the previous soon after we relocated our new unit we have started one machine for example we were handing a production of 30 to 45,000 tons so now current month I have got additional 5,000 tons extra production is going on because partially I have already started a production from the new line actually you know but to get the all 15,000 tons addition so that I need to finish the second of the equipment that automation line that direction is going on if that is done the complete thing will be there so today the capacity like last month we had done a Highest production almost 2,800 tons kind of thing which was historically 10% higher than the my previous the best production actually no got it sir, I.
Unidentified Participant
Wish you best Just a closing comment from my side wishing you best and markets does not just you know like sometimes the surprises which has come today’s result maybe we can be little conservative on that side but you are the best judge for the situation thank you and wishing you best sir yeah, thank.
Shreya Shirgaokar
You Just I want to add a point of course you are rightly pointed we are also taking due care that we don’t give any surprise we keep a lot of things before commenting something on the outside action but certain cases what happens like if you know the people, our team, customers in our hand we know what they’re doing but when you do a project like this see if you look at the Capex if you Historically in the last 13 years we’ve done about 200 crores capex this year alone we are doing 200 crores capex means it’s a 15 years worth capex we’re doing in one year.
Actually no. So the capex calls for an involvement of lot of external people. Even though we do a lot of due diligence before placing an orders and all. For example particular civil guys the way they commit with the penalty orders they take and the reality what they execute is totally different than what we think. So these are the challenges beyond our control. Actually if somebody is agreed in order has taken a commitment but he doesn’t execute according to the that I have very little control on the moving that guy to someone else. Actually these are the challenges the civil execution related things which project got impacted.
Actually no.
Unidentified Participant
Yes civil guys may be you know pardoned by the company but markets do not pardon very easily. So we need to be little sensitive about this fact. But I. I’m sure that you have done fantastic job and you will. You will do well next year also. And I wish you good luck sir.
operator
Thanks a lot Sir. Thank you. Mr. Pratham Raghani, can you please unmute yourself and go ahead.
Unidentified Participant
Hi sir, this is Parth here. Hope you’re doing well.
Shreya Shirgaokar
Yeah.
Unidentified Participant
So I think the previous participation participant has covered quite a few questions. Obviously the current quarter results were not good. Sir, just some sense on. You know you’re still guiding for a 5% growth next quarter which is about 125 crore in the next one which would be our highest quarter by. By a mile. Do you think we can achieve maybe. You know we just tone down our expectation right now and not give a negative surprise next month.
Shreya Shirgaokar
No, no, no, no. I don’t see any significant thing. See because say I will share one more thing. The last quarter we were expecting 105 even it was a surprising thing for me as well. Means we were not expecting these kind of numbers. Otherwise we would have given this guidance in the previous quad. No. What happened physically when we were relocating the plant from unit one to unit two there was a disruption. Means it’s much bigger disruption than the way we thought. Actually particularly people are accustomed to the existing unit and they are well infrastructure everything settled down.
Actually If I move 300 people from one plant to the other plant. So it’s not like going to another office next day morning and starting in a full speed. So they come out with lot of possible things that that is not there. This is not there and all. So there was a disruption. Now because of that I need to postpone certain schedules from vistas particularly I’m talking I have to push back request Otherwise the sales would not have dropped so significant I had inventory it is lying over there but I’m not able to push because there is reception inventory is lying in my hand so these are the challenges what happened now? Having settled down the unit one I don’t see any big surprise as far as the current quarter guidance is we should be able to fairly able to do that actually you know okay.
Unidentified Participant
And second sir, I think the solar capex would already be on stream so have we seen some meaningful cost saving because the internal power generation or maybe some some of the benefit will still take a quarter or two for it to fully reflect as far as solar.
Shreya Shirgaokar
Is concerned it is already delivering the results almost we are saving around 6070 lakhs worth of the electricity bill on our book it is happening post payment of the transmission service and all those things again it has not translated into the the profitability because the how it flows is the cost of manifesting first to the work in progress then finally sales happens this gets translated into profitability actually know since we started in the mid of October so this whatever the savings it has gone to the work in progress something it should improve in the current quarter actually know like if you look at last quarter we about 10.3 there are couple of things in the current quarter things as far as positivity is concerned Solar already confirmed generation is happening that will we add positive to the margin that’s one as far as the machining is concerned again development I’m not expecting a very big contribution but some kind of small contribution should be coming from the the machining the third part is since we are going to do significantly higher volume in the last quarter it will also give some kind of the cost benefit and the negative side what I’m looking at still we are doing a lot of development activities machine related expenses will be there because that is a new overhead if I have to spell out around 250 people were recruited for the new plant actually no that man broadcast the hand will be there that is one and third thing is particularly after January you know there is a little bit more volatility in the commodity actually so that may be small thing so that’s why I’m keeping it finger cross otherwise I would have given a very good guidance for the current if that commodity the volatility part not have happened actually and all so if I have to spell out around 3,000 to 4,000 rupees per ton increase in the commodity prices in the last four weeks actually know but we cannot go back to the Customer overnight because we need to follow the Laxman rule that I need to wait for 1/4 and then only I can go to the customer.
Otherwise customer also what we’ll do whenever there is a price index next morning you’ll come and ask me to reduce the price index actually know so this always the business business 1/4 up and down will be there. So considering all this overall I don’t see any the big the risk in the commitments what we’re making one is on the top line or on the margin. So there are three positive things. There is a one two things which I want to mention for the community overall we should be able to do fairly then barring the. If you take the Exception as the Q3 so Q1 Q2 level definitely we should be able to do the experiment.
Unidentified Participant
Fair sir, fair. I think certain. Certain challenges are beyond our control and we fully appreciate it’s easier said than done to just give guidances and execute. No harm done. So just one last thing in your presentation we can see some new products on non wind castings. Is that the case? Maybe the coal pulverizer or such where we’ve gotten certain new products, new orders, new customers. And lastly what would be our order book as of today if you can help us with this.
Shreya Shirgaokar
Actually recently I came to know because LND has approached us that there is a big casting requirement. We are also not aware they themselves approached us. When I explored that I came to know that government of India has cleared 80,000 megawatt of conventional power installation. Actually no. Today LND and BHD is sitting with huge auto backlog which is beyond their capacity. Actually no. So that takes us this order book what we have done. We are expecting this order book is to be for next upcoming 10 years. That’s the kind of thing looking at the schedules what they have given based upon the share of business.
Because today I have a purchase only for the development order. I Fairly expect around 2025 crores annual business coming from this particular customer. This product which we have received the order. Actually no. And again this order may materialize in the second half of the next year because it will take about six months for the development activity. So thereafter it should contribute to the revenue actually.
Unidentified Participant
Perfect sir, perfect.
Shreya Shirgaokar
Thank you.
Unidentified Participant
I will join by the queue. If you could just probably mention the order book that we have. I don’t think it’s there on the presentation would be very helpful.
Shreya Shirgaokar
Actually we have put executable order book on the current year but next year I think we’re not mentioned But I Can spell out. Actually as far as the order book is concerned I see somewhere well above 500 pro stocks. You know the key is how does the customers take off and how the execution happens. These are the two elements actually. And the second thing as I mentioned Nitinji has asked me the same question earlier. The kind of projections customer has given this order books exceeds 650 to 700 crores. But we believe there will be some element of discounting happening from some of the customers because what they project and what actually happens.
So that’s how we are saying fairly. We should be able to do well above finder crores. This is how we are estimating for the next financial. You know. Thank you.
Unidentified Participant
Thank you. That’s all from my answer.
operator
Thanks for. May I request Mr. Pratik Jain to unmute yourself and go ahead with your question please.
Unidentified Participant
Thanks for the opportunity. So my first question is given the you know new developments. There has been a delay in ramp up. What do in your view what is the reasonable time frame by when you can, you know, sweat out the incremental 15000 ton capacity.
Shreya Shirgaokar
See, as far as the the capacity is concerned should not take more than a quarter actually you know, three months period. Because once the erection is completed then we can deploy the new manpower, train them and take up that are two aspects. One is the addition of the capacity or equipment installation of the thing. Second thing is the product development. We have already taken up a lot of product development activity that includes Sen. I’m quite happy to say that the current quarter increase what I am talking about 4 megawatt product we developed last year actually.
But now that is getting materialized in a big way. You know, we are doing almost very good production actually on that. And we have also completed the NV development. But due to customer commercial reasons that did not take off but that we are ready to move. Actually know it’s a good sizable the capacity. Third thing is the NX development. What we done. We already successfully developed India’s largest the wind turbine part for a 5 megawatt platform. Almost 20 cachings were done. With trade tariff barrier going away. I see a good volumes coming from the from the export market.
So overall if I look at the majority of the product development we are through means we had four customers product development. So generally each product development takes six to eight months. Actually you know, the only one product development is lying that is on the Adani we already produced the samples are on development. Barring that we have already got out of the the development phase. Actually no.
Unidentified Participant
So if I have to summarize then can this 45,000 metric ton capacity get fully sweated out by next year?
Shreya Shirgaokar
See the challenge how it happens is the Q1 Q2 typically if you look at the Indian engineering businesses the Q1 Q2 is 40% and 60% happens in the the second year. So just capacity is getting materialized. So somewhere around 90, 85, 90% capacity we should be able to utilize in the next year. Actually you know.
Unidentified Participant
Got it, got it. And so my second question was. You know in the press release it was mentioned that there was some impact on margins because of discount taking a discount given to the customer. Can you please explain what exactly is this?
Shreya Shirgaokar
See we have negotiated a contract with Vistas in particular the export market starting from January for the US market to be shipped out of from the color. Actually no means that is not on January. It is a full financial year. They negotiate the prices interest market on a calendar year basis I.e. january, December basis. So at the time when we are negotiating there are a lot of types and other things. So we were looking at a cost of ideas. So that includes the elimination of the logistic cost that is one. Plus the benefit of some of the thing which I was mentioned in many of the calls we wanted to pass on something to the customer both put together discount was offered.
Now what was happening is what customer is saying. Mr. This the inventory, the. The orders which I released for January assembly is for the next financial year. So we ended up in passing on that revised prices from the Q3 of our exhibition itself. You know. So that is how since still I am contin to machine from the outside. But the prices are belonging to the machined in house and shipped from the Kur. This is the major difference.
Unidentified Participant
And if I have to simp. I mean for my understanding can we take these margins back up again after some time?
Shreya Shirgaokar
Yeah. See this is the additional cost we are incurring today is because of I’m going all the way to Chennai and getting it machined and sending it to US market. Otherwise I can very well supply here directly from Mumbai to us. Actually no. So this cost will be temporary till my machine shop gets approved and supply current Super.
Unidentified Participant
That’s from my.
operator
Thanks Mr. Amitabh can you please unmute yourself and go ahead please. Yeah. I hope I’m audible. Yes sir. Yes please go ahead.
Unidentified Participant
Yeah yeah.
Shreya Shirgaokar
I have one question with which is a kind of follow up from last quarter 1 FY26 you had said about Siemens Gamesa order being actualized in this quarter quarter three I think that was the timeline given so. And so far I have not heard of about the update on that. So. Yeah, you’re right again the Siemens Games ownership was getting changed. Another, I think you rightly pointed out this year revenue growth was predominant. All four new major customers. Actually you know, that is on the Amazon and Siemens gamesa or Nordics. These were the major things, you know, siemensa they were projecting to take off from.
I had schedules beginning from the the third quarter. But actually when company migration happened there were a lot of procedural things inside the organization. Actually finally they took hardly three, four sets in the end of the December. But now current quarter they are giving the schedules. Actually no. So almost there was a pushback about a quarter by Siemens Commerce as well. Actually you know, on the takeoff. Okay, okay. And you spoke about some approval from Invison. So we got approval for 53 megawatt or 5 megawatt. It’s 3.3 megawatt what we developed. Right now I think they are building around,400 turbines.
So that translated into around 50, 60,000 tons kind of demand is there? Actually no, we are expecting at least 10,000 tons from Synergy contribution to their takeoff. Okay. And so in vision is. I mean are they taking similar order, similar supply from anybody else in market in India or you are the source Today they are 100 importing from China. Yeah, we are the first supplier to develop that product. Otherwise it is coming from China today. In fact they were bringing it in a CKD condition. So semi assembled condition from China. But government of India has bought a regulation.
They cannot bring the ckd More than 200 turbines or some 200. There is a regulation? Actually no. So in line with that they initiated development. Synergy was the first company to come forward and development this product already. We developed the product, first part is already assembled. Turbine is gone ahead actually. But we were supposed to get a serial production this thing. So there was a quarter delay like there was some other commercial discussions came on related to some warranty and other things. So then finally it got sorted out actually, you know, so I am expecting from Q1 onwards the Amazon revenue should materialize.
Okay. And is there anything you would like to talk about on the industry level? Like because I’ve heard some some of your competitor has also started expansion. So are we gearing up for our future expansion or how you are looking at the supply side of the things. See if you look at last six months or eight months, a lot of positive things are happening in the Indian market. Actually first thing is Indian Market competitiveness have dramatically improved because the Yuan INR relationship has changed in INR has depreciated almost 15. So that gap whatever was there between China and India that has vanished.
Actually no means now there is more incentive for the local OEMs without looking at the Chinese suppliers to buy everything from India. Actually this is one so I see a positive effect on our content. The second thing is last three, four years. If you look at in fact many of the calls I have violated this. I also did not understood the thing. A lot of solar installation is happening without much growth in the wind sector. Actually no. At the end of the day you cannot survive round the clock energy only with solar. Actually wind has to catch up.
So now what has happened the Maharashtra MSCB around three, four months back They’ve come with a regulatory thing saying that they are penalizing solar generation by 25% and they are giving incentive by wind by 25%. Means the tariff difference between wind and Solar has made a 50 difference in the cost. Now everybody is rushing behind the wind turbine installation because there is no power generation is happening in the evening hours. The significant pump injection is happening in the daytime because of lot of solar installation happened in the last three, four years section. So that is also giving a very good demand for the industry for the wind sector Both industry side improvement in the market conditions.
Second supply side currency has played a big role to cater this demand to the domestic players like us. Actually no. So these are the two things I see positive. And everybody is doing expansion. I know in fact better also trying to add another 15, 20,000 thing even se for also may be thinking. And we all of us has got a lot of demand. Actually I see Particularly if you look at the export market and all many people are looking at non Chinese the supplies. So all of us has got enough market to play this game.
Actually last time you were talking about some deemed export benefit not accruing to the company. So is there any change into that into that stand? No, no, no. That we were not in any benefit there was because you do some bit of 4, 5% of your order book is into is a deemed export. So you it’s almost 20%. For example, some of the OEMs like Nordics, Vestas are in couple of customers. They buy the casting from us, assemble in India and export to the US market or European market. Actually no. So that has not changed.
There is no regulatory thing. Only the difference in that. If I understood well, export this thing. They can import the casting from China without a customs duty. Because they are going to bring this with an obligation for the exporting. Actually no means there will be a 8.3% duty difference for the guys one who is a deemed export. Actually no. Yes, that will still continue to be there. But at the end of the day because of this currency the majority of the gap has gone away. Actually if somebody is buying a casting if for a 2, 3% nobody will go away.
But if it’s a 10%, 12% definitely they look at the cheaper sources. Actually no. Yeah. That’s not that material. Yes. One last question. And by any chance the capex you are doing 200 crore is. Does it qualify for any Maharashtra infrastructure definition of large infrastructure project. And some incentive in terms of duty. Yes, we have an incentive. It’s Almost I think 29 crores incentive we got. Of course I have an approval. I need to claim over a period of say 10 years. So I am expecting closer to 2.9 crores per year. We are already having a letter with us.
There are some certain conditions means I need to do the Maharashtra sales. So when I do it I get the state gst. What we are paying that will be refunded. But there will always a 12 months lag between execution of the orders and getting back from the government. Actually yes. We do have a incentive of around 29 crores sanctioned from the government. Master government. Okay. But this is a compulsory sales. Is Is. Does it. Is it binding? Like you have to sell it to Senny or somebody who is localized into Maharasht. Because your customer are widespread across India.
No, no. But we have a good amount of Maharashtra sales customer also. Fortunately because we didn’t see having a two hubs. One is Chennai. Second is a Pune. Someone like Senan Andan. All are based out of Pune. So I have enough customer base to claim that the incentive what is sanctioned. Actually no. Okay. Okay. That’s all from my side. Thank you. Thanks Amita. Mr. Praneet, can you please unmute yourself and go ahead? Yeah. Thanks for the opportunity. So one question I wanted to ask. I understand that by 27 you would want to go to the 500 crore mark.
But the thing is production wise we still are expanding. And do you think we’ll be able to add the 15000 capacity in terms of production also because I think we still have problems. And expanding at that rate is substantially very difficult in the casting usually industry. Right. Should not be a problem. Like I’ve spoken in the earlier participants question as well. One is a market business. There is enough business. The Second is a product development. That is what the major activity the current year were taken up. Even though we are all looking at the synergy performance with the year on year what is not reflecting in this balance sheet is the kind of task we are taken up in product development and also completing the expansion.
That is a major milestone which we have in the finance. Of course we are taking an ambitious the goal apart from doing these two major tasks, we wanted to grow without failing in the last current. Of course there were some delays in our expansion activities. Coming back to your question, I don’t see any big the challenge in ramping up. In the past also we have grown 30, 40% kind of the numbers the last two years, three years if you look at revenue were almost at the peak level because our capacity was at the the high end of the utilization.
Since new capacity is getting materialized and the products are already developed, we should definitely able to get a significant revenue growth in the next financial year. Actually and one more thing is regarding your power opportunity. So are they also large castings? Are they similar size to the wind castings or what is the size of those? Yeah, it’s almost 25, 30 kind of the castings they’re quite big. And since synergy strength is in producing the large casting in a repetitive nature When I go to the non industry, you don’t get too many such business opportunities. Since the power sector is opening up, it is new demand which is coming up, you know.
So that’s why we gone ahead and picked up that order. So we should be able to get a good repetitive business from that sector. So are margins similar to the wind castings or are they higher? Generally Normally I get a better contribution. Actually no. But only thing we get less opportunity to get a big casting large volumes. But this yes. Should we have a better contribution actually? So are there any plans of building let’s say dedicated facility to the power sector? Because you see there’s a huge opportunity, right? I understand that wind is a forte but would it be possible to also expand? Especially you’re mentioning that contribution is also higher for this as of now we are not gone in that direction thinking we always kept in mind 25% diversifying our capacity to the non wind segment.
Actually no. So many times this thought came why we should not be operating completely our foundry on the non wind. Probably if you ask me the same question after three years, I may say yes. But as in today we are trying to add incrementally increase the capacity because just first we are trying to observe this 45,000 capacity and back to back we are seriously. Because if this trade tariff or nothing, nothing seriously anything goes wrong in the next six months or so I see a lot of pressure coming up from the international market for adding additional capacity.
Actually no. So we are next to immediate task. We are looking at Having completed this 45,000 story in the next three, four weeks or so our focus will be on how do you build the next capacity of 100,000 tons. Actually no. So during that definitely will not think of building a separate capacity for the non wind or some kind of thing but definitely we’d like to add more product mix like the what we took on LNT so that we continue to retain the 25% non wind portfolio product mix in our business actually understood. And one thing before the tariff situation I think we were at a 5% differential in the export market right.
Compared to the Chinese with the Yuan appreciating has a difference disappeared or how was that right now see this was like and I mentioned many times our guess is again the China is difficult to predict what price they are selling and all we try to compare the market study and all that is around 24% price difference was there but today I know the landed cost of the majority of the Chinese customs coming to India I think we are cheaper maybe 3 to 5% that’s what it appears. Of course that is impacted with a basic assumpt of 8% means we are almost at par closer to within 2, 3% actually.
You know so we are competitive now coming to the US market If you go back prior to the Trump there was always a 25% tariff on China and India had a. China had a 25% cost advantage. So ultimately the US market we did not any barrier actually no but recently when the tariffs were increased to 50% and China was enjoying 47% so there is a significant distortion and account of tariffs actually. But taking back this 50% tariff story back to the 18% now Indian cashings are quite competitive in the US market actually. But would it be cheaper as a result of the currency testing or no? Yes, today we have become cheaper actually no in India I’m talking about and if you add the tariff and all we are little scared actually you know because I see a lot of social media posting saying that this is only valid till the we don’t buy any Russian oil from that I don’t know how which day the what tariff happens.
So I’m not predicting that. But if you look at what is there on the paper today we are Much cheaper in the US market. There is no doubt about it. Okay, thank you so much for your answers. Thanks. May I request Mr. Sunil Jain please unmute yourself and go ahead. Mr. Sunil Jain? Yeah.
Unidentified Participant
Good evening sir.
Shreya Shirgaokar
So first of all thanks for a fantastic clarification to the previous questions. That solves a lot of doubts. My pointed question is sir, are finance costs are consuming a significant portion of our operating profits? So does the management or do we have any specific plan for debt reduction or some refinancing over these next 12 months? I mean how are we going to improve the bottom line? Because this is eating away our profits. See you don’t look at the profit today what has happened like as I mentioned in the last 15 years our CapEx was shown because this year alone it’s almost getting doubled actually note and again when we did we did not go with the full levers of our balance sheet.
Today we are at a dedicated ratio closer to 1 is to 2x. You know maybe by if you look at the next financial year if everything goes right somewhere around 1618 margin if we do closer to find it close plus kind of thing we may end up in doing early repayment of the sum of the term loans. I don’t see the. As far as the finance cost ratios percentage concerned it should not be more than 3 or 4% of our total the revenue. Actually today you see finance cost higher because completely we’re in a project phase and whatever the capex is done that does not reflect into the the revenue contribution or the profitability contribution.
Actually no, this is a temporary period. Probably if you look at Q3 of next year this also significantly changes. Okay, fine sir, thank you. Thank you. Can you please unmute on? Go ahead. Yeah, so sir, you mentioned that there were increase in outsourcing costs. So all these costs were related only to machining or any other also? No, actually. What is that? Heat treatment. We had a 100 in house facility actually you know but I have to discipline this equipment to relocate the the new plant. So during this process it almost took one of three months for me to dismantle and take it so.
But I have schedules and the customer I need to serve. Actually no. So we ended up in taking all these castings all the way to Hyderabad and getting it back. Say for example I was spending hardly 5 rupees per kilogram in house variable cost. I ended up paying 1718 rupees. Okay. To including transportation and paying additional outsourcing per signal. So that is a another big addition in the last quarter Actually no, this is outsourcing activity. So what would be the quantum of that in our that will be closer to some 600, 700 tons is what we had done outsourcing in the last quarter itself.
So 1% of margin was eaten away only because of that outsourcing equity closer to 1%. Right. And so you mentioned that the Westas had negotiated a discount so. So is this a one off or every year because of this commodity pricing that we cann pass on. We can pass on only after a quarter we’ll face such situations in future also see all Williams are this is not only for our industry all engineering industry There will always be expectation to improve the cost year on year. This is the thing actually know now coming back to specific the current year we are planning to increase the business and share of the wallet so we have put an effort to reduce our UN cost by eliminating the logistic cost to Chennai.
Actually no, that is one that is which is passed on to the customer. The second is we are also expecting some amount of savings on account of in house machining actually because the scrap generation happens plus the waiting time and all those things. So based upon this these discounts were passed on but today if you look at in Q3 numbers what we have executed still those things are not materialized in our hand because when we negotiate with the customer it is not negotiated for a quarter it is negotiated for the full year Actually no, because I don’t get an opportunity to go and sit with him in the march and again discuss.
So this is how it works Actually no. Right. The final question that you told that for you have started one line so 5,000 tons. So other two lines will be started by a March end. Yes. Basically the second line is the complete this thing that is automated line the one manual line we already started so that last month itself there is a almost 10% increase in the production. In fact as mentioned highest production we done in the last month actually know. So once that the balance of the line gets completed we should be able to go up the production of the total for 45,000 tons again yeah, when I mentioned 45,000 tons what I was looking at 1995% kind of a capacity relationship we should be able to 90% plus kind of the capacity relation with a strong order book in hand.
So from Q1 onwards at least we would be able to utilize 45,000. Yes, 90% of the body. Yeah. Yeah. Okay. Thank you. You’re welcome. Mr. Nikin Gopani, can you please unmute yourself and go ahead?
Unidentified Participant
Hi sir. Am I audible?
Shreya Shirgaokar
Yes, please go ahead again.
Unidentified Participant
Yeah, sir, just wanted to first understand a little bit in terms of, you know, there were some startup related costs and discounts related cost which have also impacted the performance. So if we have to just look at and like to like if you adjust for the startup or the new, you know, expansion related cost directionally compared to the same quarter last year, would the gross margins have seen some deterioration or are they same or what is the trajectory on the gross margin?
Shreya Shirgaokar
If I have to break up this whole cost somewhere around 3% margin is an account of the the pricing product out of which 1 1/2 percentage is in the logistic cost. 1 1/2% is another 1 of the price. Actually no 3% has come only because of the revised pricing mechanism. That’s 1 and 100 basis point which I discussed with the previous participant on the outsourcing of that activity, the heat treatment that is of course perfectly related to one particular project, you know, so the 4% is because of these two aspects there is some marginal contribution of the slightly higher man forecast because we recruited the people for the new plant.
But still the output has not started contributing as you know. So on an overall level basis if I take out this noise related to the expansion, I don’t see any margin deterioration in this whole thing.
Unidentified Participant
Actually you know, this discount is something that will not continue to be there in the remainder of the year or the next year. I mean see we are going to.
Shreya Shirgaokar
Do the savings that is passed down to the customer, right? So means I’m not going to incur when I start mentioning here I need not incur the logistic cost which I’m supposed to spend today I’m spending almost 3% logistic cost I’m spending to move to Chennai actually you know that cost get eliminated so that the price get adjusted actually so.
Unidentified Participant
So when we sort of indicated initially when we took up this project that there would be about 300 basis points net improvement in margin because of the machining aspect and about 200 basis point because of solar. So the net improvement of 300 basis point remains even after adjusting for the discount and everything.
Shreya Shirgaokar
Yes, because if you look at the overall, the machining, the cost which we are spending almost 12 to 15% actually no, but cost of running is not more than 3%. So almost 78% comes. So in that we have factored 4 to 5% 3% back to our bottom line. This is how we have planned actually no, so.
Unidentified Participant
So let’s say when we are in Q4 of next year when we will have the full capacity running at full steam and you would have the machining also in place. Is it fair that you would be somewhere closer to the 20% mark in terms of margins?
Shreya Shirgaokar
Absolutely, you’re right. I don’t see any challenge in that action. So that’s why I’m really carrying some commodity here and there. Noise of 1% here and there always I am giving a raise of 18 to 20%. I don’t think any fundamentals have changed as far as this guidance is concerned.
Unidentified Participant
Lastly, in terms of when do you start you know meaningful supplies to envision in terms of numbers and so for.
Shreya Shirgaokar
As well see as far as AAN is concerned there are two platforms. One is a 5 megawatt platform and a 3 meg platform. 5 meg platform Huban mainframe the bigger parts weights are much beyond our capability which is a 35 meton. Our maximum weight is 30 tons only. So they ended up in importing all the castings. As far as the 3.3 megawatt is concerned, those castings fall under 20 to 22 ton actually know. So those product development we have taken. We have almost bought the mainframe hub. The second casting is getting bored this week actually.
So we’re expecting by next month this development activity of the Adani also should get completed. We were already having a serial supplies of bearing housing. But that doesn’t give much Ali around 20 crores business is giving. But with this 3.3 megawatt coming into the picture we expect around 60 to 80 crores kind of the revenues coming from the Adani as well. Actually no. See as far as Envision is concerned. I’m really scared of the way those guys are asking me the question. They are asking 40,000 tons, 35,000 kind of numbers. Boss, I’m telling first you use the 10,000 tons.
We’ll talk about the 30, 40,000. Because as I know they have scheduled for a 1400 turbines for next financial year. The current the year which is going up which is a 65 70,000 tons is what they require. Actually no. And back to back I already got an inquiry for the 5 megawatt turbine as well. But we are saying was take off some volumes. So I don’t see any big challenge. 10,000 should be fairly easily taken by Envision. Actually no. If you do well the they have an expectation of at least 2030000 kind of the takeoff.
But unless we don’t understand the customer he constantly take off. We don’t want to allocate significant capacity today. But we’ll do it this subject gradually. You know this is also taking us to the second lead. One is the US market improving. Second is this envision things. I hope today there is no second thought about it. So then this becomes a good starting point for now. The next greenfield project actually.
Unidentified Participant
What’s up people? Thank you so much for your answers. Thank you.
Shreya Shirgaokar
Thanks. I think I don’t see any further hands up. So if there is no more questions. I once again thank all of you for joining us and understanding our the situation. Otherwise, just I want to put one simple concluding remark. Fundamentally nothing has changed. I I do know there is an expectation has to happen the Quadrant Quadrant other things but there are certain things we are going through the major. The transformation period the three aspects which we spoke. We have gone on the first part, the product development part we have done it very successfully. The second part, expansion.
Yes. There is a delay by three months. That is the thing which is beyond our control under the revenue. I think it’s a temporary thing actually. No. So if all those things there is no reason why results should be lagging. So this much only I will tell and conclude with this. Thank you all again. Once again, thanks a lot. Thank you.