Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Synergy Green Industries Ltd (NSE: SGIL) Q4 2026 Earnings Call dated May. 19, 2026
Corporate Participants:
Nilesh Mankar — Secretary
Shreya Shirgaokar — Associate Vice President of Commercials
Unidentified Speaker
Analysts:
Unidentified Participant
Presentation:
Nilesh Mankar — Secretary
Hello everyone. Thank you for joining the call. I am Nilesh Mankar, Company Secretary of Synergy Green Industries. This meeting is
Unidentified Participant
Being recorded,
Nilesh Mankar — Secretary
So shall we move to the disclaimer? This is a disclaimer from companies and. Yeah. Next, This is the agenda. First we will give the brief introduction about the company. Then Ms. Raya will give the presentation about the quarter four financial statement and after that Q and A session will be handled by Edison. These are the guidelines regarding asking the question. You can take a printout, print screen and you can go through detail. Next. So, dear participants, welcome to the Q4 Financial Year 202526 earning call an investor presentation of Synergy Green Industries Ltd.
Synergy Green Industries Ltd. Is one of the India’s leading state of art foundries producing SJR gray iron and steel casting for wind turbines, wind gearbox and general engineering industries in the weight range from 3 metric ton to 30 metric ton. Synergy Green has an install capacity of 45,000 metric ton per annum and in house machine facility of 20,000 metric ton per annum capacity. The company houses best in class equipment, IT infrastructure and quality testing facilities and is a top supplier to major wind OEMs as well as leading gearbox players in the world.
SGIL is a part of Shirokar Group which has diversified business interest over its 80 plus year history spanning across sugar manufacturing, foundries, hospitality and market market research among others. We have with us Mr. V S Reddy, Executive Director Ms. Shreya Shirvalkar, Associate Vice President and myself Nilesh Mankar Co. Separate. Now Ms. Shreya will be presenting the highlights of quarter four earnings and take us through the key areas of the development in the investor presentation. Over to you Srima.
Shreya Shirgaokar — Associate Vice President of Commercials
Good evening everyone. I’ll be walking you through the key highlights of the investor presentation. So the global as well as Indian wind industry performed well in 2025. Global wind installations grew by 40% and global wind installation stood at 164.6 GW. This was mainly led by the APAC region to name India and China. Specifically India was the second largest wind country for wind installations in 2025. Indian wind installations in FY26 grew by 85% and it stood at 6.34 GW for the year going forward.
The industry going forward. By 2030 global wind installations are expected to exceed 2 terawatts and there is still a gap as per GVEC’s report of around 77% of required capacity for the net zero pathway outlined. There are also key drivers in the domestic wind driving growth over the next several years. Looking at the company profile, we have state of the art facilities based out of Kolapur and Maharashtra. Our foundry capacity stands at 45,000 tonnes per annum and machining and surface treatment facilities that were established in the current fy stand at 20,000 tons per annum.
To draw your attention to certain quality certifications that we’ve added in the current year, besides the ISO certifications of 9001-14001, 18001 as well as 27001 and 50001, we have recently been qualified for the 400×18 SSDI grade. In addition to the TPG certification, Our customers are spread across wind as well as non wind and we work with 6 out of the 15 leading global OEMs in the world. As of 2025 we have on our board Westas, Siemens Gamesa which is now Vyona, Senvion, Adani, Envision, G, Nordex as well as Flender and ZF from the wind gearbox segment.
Besides this we’ve also added new customers in the Nonwind segment. Besides Terex, Millikron and Willow, we now have Mahindra as well as L and T on our board. Fy 26 was a big year of strategic transformation for the company. We’ve achieved several milestones in the current fy. We expanded our foundry capacity, it was a brownfield expansion and we expanded from 30,000 to 45,000 tons per annum. We’ve also increased the maximum casting weight produced in the foundry up from 23 metric tons to 30 metric tons of single piece.
This now enables us for production up to the 5 megawatt turbines. We also added machining and coating capacities by establishing a new plant close to our foundry of 20,000 tons per annum capacity. The commissioning and development of this planned happened within a very short span of time including manpower, onboarding, customer development and training. We’ve in the current FY26 we’ve new product development for 12 of the we’ve had 12 new product developments for major OEMs including new customers as well as new products for old customers enabling us to enhance our capacity to enhance our capacity utilization.
Additionally, we also have 10 megawatts of solar captive capacity from October 2025 onboarded. FY27 presents us with a lot of opportunities as well as key priorities that need to be our focus areas. In terms of opportunities, there is a strong order book outlook which supports our growth visibility for the year. Additionally, the INR depreciating against the USD by about 10% over the last 12 months and over the Chinese won by 20% has improved our export as well as domestic competitiveness. The key priorities for us in the coming year are to mitigate the input cost inflation that is arising from the West Asia geopolitical tensions which we’re seeing early signs of already in FY26.
We can achieve this through manufacturing efficiencies as well as calibrated past price pass throughs. We also aim to focus on stabilization and ramp up of our expanded foundry as well as machining capacities in order to drive utilization and operating leverage. These are some of the strategic initiatives that have laid the foundation for our future growth as well as margin expansion. Taking a look at the annual capacity utilization FY2526 capacity utilization at a 30,000 metric ton level stood at 93% which is at peak levels.
In the current FY. We plan to achieve about 80% of our expanded capacities utilized. Here’s a summary of the audited financial results A Look at the Income Statement Total income for the quarter ended 31st March 2026 stood at 123.45 crores. PBDIT stood at 14.83 crores which translates to a 12.01% margin. Similarly, for the year ended 31st March 2026, the total income stood at 376 crores and PBDIT stood at 48.67 crores, translating to a PBDIT margin of 13.10. The depreciation and amortization expenses for the year ended 31st March 20206 stood at 20.33 crores as well as finance cost stood at 20.79 crores.
These are mainly attributable to the CAPEX program that we’ve set throughout the year. There are several revenue as well as profitability parameters that I would like to highlight over here. So for the revenue, certain project delays as well as operational disruptions which happened due to the brownfield expansion constrained our revenue growth. Existing facilities also operated near peak utilization prior to the commissioning of the expanded capacity. Profitability parameters included higher outsourcing costs during the relocation and facility transition, increase in manpower as well as overhead costs associated with the new facility establishment, lower export realizations due to discounted pricing which factored in in house machining which is currently under development, and certain early impacts of commodity as well as energy cost inflations on account of the West Asia conflict.
Looking at an overview of the balance sheet, the to the net worth as on 31st March 2026 stood at 111 crores. Long term borrowings grew in line with our strategic investments throughout the year. Next, our revenue streams are divided across five areas. Segments Wind, Domestic, OEM Exports, Direct Exports, Gearbox as well as non Wind. We had a 3.5% growth in revenue in the current FY26. It was mainly muted due to project delays and operational disruptions throughout the Brownfield. Expansion in FY27 with the expanded capacity that is coming in hand as well as the new customer development, there is a visibility for a healthy double digit revenue growth.
We’re projecting a 33% growth that takes our revenues to 500 crores in FY27. Looking at the PBDIT over the period, PBDIT margins stood at 13.1% in FY26. This is an 8% drop at an absolute level over the previous financial year. Strategic investments along with the projected revenue growth are expected to together strengthen our margin by over 300 basis points in FY27. Looking at the FY27 performance outlook, just to sum up, we’ve projected a revenue growth of about 33% with new customer additions as well as enhanced capacity.
Our export revenues are projected to remain stable in line with the previous years contributing around 25 to 30% of our revenue. And PBDIT margins are expected to expand by over 300 basis points year on year. With this I close the presentation and I open the floor for Q and A.
Unidentified Speaker
Good evening everyone. Once again thank you all for joining this call. I request Mr. Nitin please go ahead with your question.
Questions and Answers:
Unidentified Participant
Yeah, thank you for the opportunity sir. Am I audible?
Unidentified Speaker
Yes sir. Please go ahead sir.
Unidentified Participant
Okay, so sir, we did mention last time, I remember that next year 530, 550 crore revenue possible. So why are we now taking 500 crore revenue projection and what is the margin guidance for financial year 27? We said said that we will have 300% upside possibility in the in the margin. So can you please elaborate on these two points?
Unidentified Speaker
See, there are two aspects. If you look at order week perspective, I see closer to 530 or 550 level. Actually no, because we have added a lot of new customers and already confirmations are there from the majority of the OEMs. Actually the second thing is whatever the expanded capacity we see a quarter or two, there will be a ramp up this week because we have almost 30 40% new people added into the team. The train and other thing, that’s one. The second thing is because we are starting with a totally fresh capacity Generally my observation is in the previous historical this thing, the first quarter and second quarter particularly I’m talking domestic market will be little slow in takeoff actually no.
But this year I see very strong this thing. So always there was an expectation from university under commitment over perform Actually considering all those things it may be between in the 500 to 530 range but as of now we are given a guidance of 500 plus kind of the the revenue guidance regarding the margin expansion SH has already mentioned there are two key things for us like if instead of 500 if I do 530 probably I’ll get another 100 basis point extra the margins because over are already covered then the margin directly the higher revenues directly add to the the margin action.
But at the same time in the last three months I’m talking about from the month of January Government of India has put some restrictions on the Chinese input of the steel material which has given at least sign of commodity prices escalation. Actually no. Then thereafter from the mid of February onwards once this Iran story has started there is almost 20% rise in the commodity. Of course there is not much challenge with the commodity because we get the competition from the customer. But again it comes with one cutter lag.
Now it’s a difficult thing to predict how this is going to unfold in the going forward. We’re little cautious on the commodity side. If it stays at this level it’s good means I don’t see any big thing. But if it is on the continuous rising cycle always there will be a 1/4 lakh from that. So that there could be that small effect in that there is a third thing. Whenever inflation is on the rising side it’s not just the commodity. Many other elements also goes up as you know. So we are little bit conscious on the input side.
And the last thing is from in the month of March there was a dispute going on within the MSCB Electricity board and the the users about the banking of the facilities. Even though we added 10 megawatt there are some changes in the policy which this is in a legal system. The debate is going on due to that there are some lapse units in the last three, four months. Actually no, of course with increased capacity we don’t have that risk of solar generation units not using. But till we ramp up that capacity there will be a little bit of this.
And on the positive side if you look at we have a very good this thing, you know, export revenues current year particularly for Nordics also coming into the picture now west also there and currency depreciating should be a very positive thing. And third thing is Yuan also has appreciated INR has depreciated a lot against the Yuan. Actually no. So today I don’t see big pressure from the price pressure from the Chinese imports because we already quite competitive or even cheaper than the landed cost basis Chinese.
As you know, this is the overall situation I see means it’s a well balanced guidance we have given. Yes, there is a range we can maybe somewhere around 500 to 530. But that’s the thing which again on the market side also I have mentioned about the parameters which can influence the over margin action.
Unidentified Participant
I. I got it. So there is a possibility of upside by 100 basis point in case we reach 530. Is that a correct understanding? You
Unidentified Speaker
Are right. You are right. You are right. Because majority of the warheads get covered at a finder level. So that 30 will come with the gross contribution directly goes to the margins. Actually no.
Unidentified Participant
And for that we are assuming that stability of the raw material prices remain or there is a lag of three months in the escal of the prices with.
Unidentified Speaker
You’re right. Because if this commodity remains stable and something resolution happens, there’s no issue. But if it goes on continuously upward the cycle then always we carry this lag. Actually no.
Unidentified Participant
So now as you said that first two quarters are little challenging. And 15 days of this quarter has already gone out of 90 days. Not a big time, but 15 days you’ve seen that. So considering your previous experience of last one decade, how do you see this 15 days have gone so far in terms of demand both domestic and overseas. And was there a significant margin?
Unidentified Speaker
Yeah. My observation is generally there will not be much changes in the export. They are very form. Actually no. The challenge only with a domestic OEM there will be a some rescheduling or fluctuation in the schedule S. You know. And the second thing is we have also seen the execution is in the ratio of 45.55 means first off is closer to. It’s a very approximate number I can spell out. So 55% of the revenue comes from the second half and 45% of the revenues comes from the the first of the year. Actually no.
And it seems as of now whatever. Of course it’s a very early period. We are just one and a half month now. So we should be able to catch up with these numbers. Actually, no.
Unidentified Participant
Is there any logistics challenges you have seen because of the Middle east crisis Especially with regard to the export from our side or it is smooth for us.
Unidentified Speaker
You’re right. You raised a valid point. See, what is happening is a lot of our custom or anybody they are taking exports. Many of the consentment got stuck in the midway. Actually. Now they’re taking it through longer routes. Of course. Fortunately our scope is from Xbox or fca. So we are not taking the responsibility. On the logistic is a lot of volatility in the shipping cost and other things including insurance and all. But that is not part of other thing. But as of now I. We did not see any much impact on the demand because of all those things actually.
So should be able to agree with the numbers actually.
Unidentified Participant
Got it, got it. And what is the current capacity utilization? If you can give some details about that. You mentioned about last financial year and you talked about the next financial year with the expanded capacity. What is the current capacity utilization?
Unidentified Speaker
See, now we are doing this month we may do closer to two and a half thousand tons which is about to 30000 tons. Okay. Which is almost 100 of the previous capacity. But it will take two, three months before we ramp up. Another thing what we noticed in the early period is earlier we were operating with only two OEMs. Whether it is Westas or Gamesa are four products. But now we have developed a lot of products. 12 products. You know, means complexity of the operations have gone up. Plus the new plan and the new people.
When I put all those things in place, it takes some time for us to stabilize and synchronize with all this new scenario. Actually no. Even though we have added a lot of OEMs. Actually these patterns are the products which we have already have. They are capable of giving a revenue of comfortably around 718 crores or even go much beyond the number. So we need to tackle the distribution of the schedules across the VMs. Because when you add more product always utilization becomes a challenge because of the change in product and the variety actually.
So we’re trying to manage what you call adjust according to the new the trend. And we’re trying to synchronize the production with a full capacity utilization. It may take say maybe four, four months to come to 80 by 90% kind of the level. Actually gradually the ramp up should happen. So we are saying second quarter should be able to get up the the good thing, you know. And as far as the machining is concerned, we have already commissioned five machines. Fifth machine, sixth machine, last machine which should be happening another two, three weeks time.
And three, four machines already got stabilization. We are at a around 50% kind of the capacity relation. Again, machining is also all 12 products needs to develop. We have completed another 30, 40% of the product development on the machining side because it is a long cycle. When I take up the machining of the first component, it takes some anywhere between seven to 10 days to establish the first product. Second time one, it may take four days or five days. Gradually it will take it down to optimal level.
Actually no. We have also seen the certain products which were doing for last two, three months. It has already reached the optimal. That’s a good sign. But we need to handle all these products, establish the machining and then everything gets synchronized. Actually, no, it may take a quarter plus three to four months. I expect to come to the completely synchronized level
Unidentified Participant
Since a couple of machines are already, you know, established and reaching towards, you know, stability of the operation. So do you see quarter one margins? Because machining was something where we were expecting, you know, margin boost. So do you see any possibility of having some improvement in the margin with respect to the previous year for quarter one?
Unidentified Speaker
Yes, most probably. Q2 should catch up because first we had to set up the word cost. First quarter we are mainly focusing on the product development even though the machining is happening. But we are trying to take all the products on our board. Actually no, that’s the the first thing. So I don’t see any significant thing coming on the first quarter because of the machining. Because more than 50, 60% of the time it’s going to take for the development activities. Once that is done, Q2 should give a good progress on the the margin expansion side.
Unidentified Participant
Got it. And what is the further Capex plan? If you can elaborate that also.
Unidentified Speaker
But as I mentioned, the market is very bullish, means very strong actually particularly I’m talking about the export market with someone like Nordics coming in even we are almost on the verge of finalizing the big contract with Vestas, which is closer to the next financial year. We have secured account which needs to be signed. That is between January 2027 to December 2027, almost 30, 40% decent growth over the the historical numbers. Actually no. And second most important thing is the domestic market.
If you look at last year, it’s almost 70% growth. We see even another 30, 40 growth in the current financial result. I see a strong momentum in the domestic market as well. So there should be a very strong order book. Within no time we should be able to come to a level of shortage of capacity. Again. Maybe we might come back to you with the further listing, you know in this progress we are looking for a land because that is the biggest challenge. In the earlier case we have seen it, there is some progress is happening.
Let us see this year we have a target at least to acquire the land. If we are able to do that then next year definitely we should be able to look at adding the next. Because
Unidentified Participant
If we are saying that we’ll be you know at 90% capacity utilization in this year then we’ll have a challenge of further, you know, capacity ramp up. So that plan is something that we have to think now.
Unidentified Speaker
Yes, you are right. So presently how we are looking at this first quarter and second quarter to stabilize and get the revenue going. This is one plus now try to next to six to nine months can we acquire the land? This is what the target we have in our mind. And once that is done the next year definitely we can look at the further additional this thing. You know depending on the overall progress of the the our business and also on the the market side actually.
Unidentified Participant
So what is the long term debt that we have now?
Unidentified Speaker
I think as of now it is borrowed around 160 crores. 165. But still there are some money has to be drawn for the balance of the machine payments and other things are there and some repayment also closed by this year. So I expect the closing balance sheet of FY27.
Unidentified Participant
No, sorry, your voice.
Unidentified Speaker
Yeah, hello. Yeah, no, what I’m going to say is yeah, last year our Debt is around 165 crores. Closer to that number and the current year still I have some money to be drawn to some payments to be done for the final commissioning the payments to the, the CapEx, whatever is going on. So considering all those things I expect maybe 175, 180 crores by end of the year.
Unidentified Participant
Oh peaked that will be around 175.
Unidentified Speaker
Yeah and with a daily quotation of closer to 1.5 or something like that below 1.5.
Unidentified Participant
And have you considered the capacity expansion land purchase in this or that will be extra.
Unidentified Speaker
We need to see means with the current year revenue. So can we add that because land cannot be acquired through debt. Actually no, it has to be done through the internal accrual. Nobody funds for the land acquisition. It has to be funded to internal.
Unidentified Participant
Got it. No, if I, I mean to say that considering that because some cash flow will go whether it is coming from debt or from internal accrual because internal accrual otherwise would have gone to for debt repayment. So from cash Flow perspective. I think that. Have we considered that also in this.
Unidentified Speaker
Okay. If I had to put this thing. Definitely I don’t see any this debt number going up. Even if land acquired maybe plus minus 10 crores here and there. Actually no. Because land we are looking at somewhere around 1516 acres of land which is in our closer proximity may cost around 25 or something like that. So maximum it may 10 crores plus minus can happen depending on the other situation. Actually no.
Unidentified Participant
Got it. Got it. Thank you and wishing you best sir.
Unidentified Speaker
You are most welcome sir. Thanks a lot. May I request j. Sir you please unmute yourself and go ahead with your question.
Unidentified Participant
So yeah, most of my questions were answered. Some questions were asked and some was there already in your answers. So good evening again. And so. So one of the questions I have is any of a raw material is imported do we or everything is domestic
Unidentified Speaker
Picker and we import. This is one not bigger than not 100%. There is a special grade pig is there that we call it as a high purity sodal pig. Generally it is imported from Brazil and we also import the resin. These are the two major import. If I have to figure out the import content versus the domestic procurement it should be around 10%. 10 12% should be the input content in our raw material purchases.
Unidentified Participant
Okay. So with the currency weakening that would affect that portion of our imports. So how much you
Unidentified Speaker
Are right.
Unidentified Participant
Does it put on the. On the. Is it a pass on or how does it work?
Unidentified Speaker
Actually fron region is a person with majority of the clients means that is a directly whatever the purchase cost gets passion. But there are a lot of other small small things doesn’t form of the part of the the indexation. So there are two kind of pricing mechanism works. One is the. The. What you call a class items bigger and CRC. And these three things gets indexed on a quarterly basis. But rest of the all elements gets adjusted in the annual pricing. Actually you know there may be some 50 basis point kind of here and there.
But see this year is a very transformation year for us. There are a lot of positive things because of the what I call capacity enhancement and also machining coming in, solar coming in and all. So we should be able to still achieve the the margin expansion in spite of all these scenarios.
Unidentified Participant
Perfect. Now see we are guiding for a 82 and if we do 530 crores maybe 8590 capacity utilization or at least we will you know end in the last quarters with that those kind of 80 by 90% capacity utilization. So when is it that you know, you already mentioned that you’re already looking for land and all that. But when do we finalize, you know, expansion plans? Because can we can see the growth coming for this year but what about next year? How. How we can you know, grow? So that is. That is my question in the sense that, you know what are we planning so that you know this growth can continue.
I mean not similar but the sustainable growth can continue. Understand.
Unidentified Speaker
See we are looking at the CSR growth percentage. That’s one the current year. If you look at 33% growth what we have forecasted to find it and cross top line. And of course last year we didn’t had a any sizable growth. So if you look at the previous year point of view we are targeting somewhere around 15 to 20% kind of CAGR growth. Now coming back to the question if current year we do around 500 I see a headroom up to another 10 15% growth for the next financial for sure. So next year growth is visible because we’ll be entering with a fully stabilized plan with all established customer.
We should be able to get a better revenue. And prior to completion of the next year definitely we’d like to get some capacities for the F28 miss. So we are aligning ourselves and also we’d like to manage our dates because today what we have is like Nitinji whatever he asked the total the closing date somewhere around 170 or 180 crores. If we have a good balance sheet next year maybe below 100 crores. 70, 80 crores. It’s a very comfortable less than one for sure the bigger ratio or 0.8 kind of thing.
And we’re good to move actually know.
Unidentified Participant
Okay so generally when you decide that okay now we want to go for expansion till the time the everything is put up. What is the the period it takes for. For all that to happen? I mean in the past.
Unidentified Speaker
Yeah yeah. We looking at somewhere Q3 is a good working number. Actually no. So Q3 if is aligned. I think we should be in a position to move
Unidentified Participant
Current year. So my question is let’s say
Unidentified Speaker
Will you preparing for the next expansion cycle. Yeah Q3 numbers should be a good point because we also because Q1 Q2 will be a lot of domestic market. As I mentioned there can give some kind of volatility means because of the particularly what happens Q1 for every manufacturing industry in the country will always be slow start on the Indian business model. But Q2 due to rainy season the installations will be little less because the project sites and Others are not accessible. So Q2 domestic market generally there will not be much pressure.
Q3 people start and Q4 is the peak pressure. This is how it works actually. You know, seasonality basically. Yeah.
Unidentified Participant
No, so. So my question was more towards that. Let’s say in Q3 we decide that we want to go for expansion. So putting up the financial plan in place, whatever is required this thing that. And then actually for commissioning of the expansion. How much time it takes.
Unidentified Speaker
Sorry, you can take somewhere around 15 months kind of the timeline. Say let us take example of Q3 numbers are there and we initiate something and Q1 of FY28. Okay. Eventually then by Q2 of FY29 should be there this capacity. Actually no means then this year we are already having growth. Next year we get around 1520 growth. And the forthcoming year partially we get the growth from the new like that we can see seamless growth for the upcoming year actually.
Unidentified Participant
Perfect. Perfect. So can. Can we optimize our capacity and get some levers in the sense that. You know, if we do the more higher castings and all that and can we optimize it to that, you know that we can get some higher revenue potential from the existing facilities?
Unidentified Speaker
Yes, it is possible. Our observation is if we restrict the product mix, this capacity can easily be stretched by 10, 15% or even 20%. Actually no. But we are focusing on broadening our client base. If I do only with two clients, probably my capacity will be almost 100% kind of thing. Because when I add more product varity, the my productivity is little lower. Actually no. But again we don’t want to restrict the new cominging customers just because we would like to optimize the existing facility.
Because they are going to create as a platform for the the next unit. Actually know this is how we are looking at.
Unidentified Participant
Perfect. That’s all.
Unidentified Speaker
Thank you. Sir, may I request Mr. Vinit Takur to unmute yourself and go with your question please.
Unidentified Participant
Hi sir. Thank you for the opportunity. Most of my questions are already answered. But I would just like you to reiterate the same for me. That if that’s all right for you. I just would like to know what is the other? Why is the other income so high said this year? This year in this quarter itself.
Unidentified Speaker
Yeah. There are two things. One is foreign exchange the fluctuation. That is one. The second is as we mentioned in the previous quarter call. Also there is the. What we put as a deposit. This rights issue. Money, what we raise. Deposit, Deposit. Many interest is also into the other income. Generally we have something called as a duty drawback that is mainly related to the associated with the top line. So when you do the exports we get some incentives and also this thing, you know road tape that is export incentive under duty drawback.
So these are the two incentives goes into the other income. Actually
Unidentified Participant
Could you explain what is. What is the percentage of duty travel you will get back like if you do X amount of revenue what percentage of duty travel you get back and how do you how
Unidentified Speaker
2%. 2% of the top line we get the duty drawback.
Unidentified Participant
So of the all the Exports you do 2% means that Export
Unidentified Speaker
Inc. Yeah, yeah. 2% of the Export revenue we get the export incentive
Unidentified Participant
And so I know we’ve spoken about capex a lot but could you just give me the CAPEX guidelines for next two years or do we have a schedule for next two years? What are you estimating? And
Unidentified Speaker
In the existing the plant we almost got a peak the CAPEX cycle barring today we have invested for a 50% of the machine capacity. If you want we can do it but we have to prioritize whether it’s a capacity addition or further go with the replacing the machining outsourcing. Actually no. So it will be decided based upon how the industry progress in the next 2 3/4. Based upon that we will be deciding on the investing into the the current capex. Barring some small investments into the product development, some tooling and other things I don’t see any big capex in the current the plant as far as the new greenfield project is concerned because now dollar is going every day here and there.
There will be a good amount of import content and we need to see how the project cost is going to work out. Earlier our estimate was standing between around 500 to 600 crores. This is what the rough estimate what we had but we need to do this working. But presently our priority is to whatever that we have invested we’d like to look at in nature. Yeah, yeah, sorry yeah please go.
Unidentified Participant
Actually I could not hear that after the project cost you mentioned.
Unidentified Speaker
Yeah, yeah, no the point what I’m trying to say the earlier our estimate was closer to 500600 crores that is including off foundry around 50% in machining and also the captive renewables. These are the three combination which we have worked out but this cost needs to be reassessed based on the currency and other things. Probably this we’ll be doing somewhere on Q2 Q3 this exercise and we’ll have a better clarity.
Unidentified Participant
So sir, have you already invested Some capital in this and if so what would be the amount?
Unidentified Speaker
So current year we done about 250 crores per the existing facilities. That is a foundry expansion and the machining and the solar. Actually you know as far as the new plant is concerned we’re only planning to take up land acquisition in the current financial year. The balance of the the majority of the capex is going to happen in the upcoming financial years.
Unidentified Participant
And so would it be funded by debt or internal accruals or it will be a mix of both.
Unidentified Speaker
See this year what we have done is the current 250 crores capex is done through three combinations. One is internal approvals. Second is partially with some amount to be raised through the the equity and to through the debt. So we’re Targeting some around 1 is to 1.1.2 kind of the the distribution between the both debt and equity part of it.
Unidentified Participant
Okay, so FY27 we don’t have a clarity on how much capex are we going to do for this year. As of correctly is it correct understanding sir? As of right. See
Unidentified Speaker
If the way we are planned, Q3 and Q4 goes well the way we are projected and all. Definitely we’ll be taking up with a capex cycle for the next financial year. I’m talking F28, not in 2727. As I mentioned it’s a nominal thing only balancing and other things. If anything required we’ll be doing a small capex but the big capex will happen in FY28 or not.
Unidentified Participant
Okay, thank you so much sir.
Unidentified Speaker
You’re most welcome. May I request Mr. Amitabh Watsa please unmute yourself and go ahead with your question please.
Unidentified Participant
Hi sir. Thank you for the opportunity.
Unidentified Speaker
Yes please. Yeah,
Unidentified Participant
Yeah.
Unidentified Speaker
Yes please, please go ahead. Yeah.
Unidentified Participant
My question is on slightly more on a macro related to the industry dynamics. Like you have onboarded InVision and you are trying to inboard win win of some Chinese OEMs. Visibase you have European as well as American and in domestic oem. So what is your preference order and what is our strategy ahead in terms of picking or choosing up some product with respect to some OEM so that we can maximize on the margin front
Unidentified Speaker
There are two parts. One is my comfort with MNC OEMs is very good because their schedules are very stable and what they project that happens there is a little challenging with respect to the domestic OEMs because there is a lot of rescheduling and other things happens. That’s what we are seeing oscillations and third Part is Chinese oem. It is also new for us. I do believe they should perform the way other MNC OEMs are there. But till date it’s not up to the our expectation. Actually, you know, one reason could be China may be having lot of approach toward the Indian supply chain because they were able to get at a lower prices from China.
But in the last couple of months I have seen the very aggressive one is yuan going up 14 rupees plus which is almost 20 appreciation from the previous this thing. I don’t think now they have a choice to keep continuing with the importing of the casting from the China. Actually no. So but we need to see white and watch actually know how the envision unfolds in the going for. So as and date we are operating with only one Chinese OEM that is Amazon under the balance totally six major OEMs. And of the half of it is from MNC, half of it is from the domestic OEM section.
And the pricing point of view we get a better realization in the exports. One is due to incentive and also second part is the currency and always will have some headroom. But I would like to strike a balance between a domestic under export revenue. The reason is export is good, but we should not be going overboard on the exports. Because export is subject to many external factors. Whether it is a policy, tariffs, currency. So many things happen shipping and all those things. Actually no. So domestic is one thing we should be holding our fort because that cannot be replaced.
Say for example, I have a better realization on the exports. I move everything capacity to the exports. But domestic is going to manage with someone else. Right? So we lose the domestic market. So we should never lose means this is our thinking process. We would like to strike a balance between domestic versus exports is marginal priority. But before that protecting the market is also equally good priority actually.
Unidentified Participant
Okay, so do you have any audible kind of scheduling with OEMs and if you can share some light on that.
Unidentified Speaker
Yes, I’ve already mentioned. Of course I’ll not be able to share the individual OEM wise. But the our revenue forecast, what we have given in the split of 45:55 is the very rough number. Actually no across the quarters you can consider actually and these numbers what we’re committing. This order book point of view. I don’t see any big problem 530 kind of thing. It all depends on how we compare and execute. And also how the domestic OEM perform. That is the key factor for our achieving this number actually.
Unidentified Participant
Okay, so I meant to say that order Book in terms of visibility of order book for next years or so. Like you’re
Unidentified Speaker
Talking FY28. Yeah,
Unidentified Participant
Yeah.
Unidentified Speaker
No, as I mentioned in the beginning. I don’t see any problem for even 700 crores kind of for the order book. Actually if you go and pull I don’t see that problem. My bigger problem is on the capacity side. Actually. No.
Unidentified Participant
Okay. That’s a good problem to have. Rather than having a order book problem.
Unidentified Speaker
Idle for keep waiting for him. Actually no, we need to quickly come out personally. Order book is never the issue actually. You know.
Unidentified Participant
Okay, but do you see any alternatives they are looking out for because there are so many pli incentives. I mean not literally to vend oem but as such there are so many made in India push. Are there? So any new competition coming up. Coming coming up. Or any big companies like Reliance or Adani getting into this domain?
Unidentified Speaker
No, no, no. I don’t think. See it is a very small for a big player but a big business for the smaller player. That is one second is the entry barrier is very high. Even if any foundry starts tomorrow morning. Nothing less than three to five years to come on board. Actually no one is planned. Establishment itself will take about 18 months. Needless to mention about the the technology establishment and customer onboarding will take almost 12 months. Means three years is the minimum required and capacity improvement all put together to command competitive synergy.
Anywhere between three to five years. How I look at actually know. So next at least four or five years should not have if even if anybody comes tomorrow morning itself.
Unidentified Participant
Okay, one last question with respect to the non wind portion of your business. So did we have any initial success or any pipeline of non vend business?
Unidentified Speaker
We got a lnt order for the what you call power plants. It was interesting thing to know that government is coming up with 80 gigawatt of conventional power. Actually know this was also surprising move. We got a super thermal this thing, you know. So we got the order from that. It’s a new order for us. And also we are in discussion with BHL that will also likely to be get finalized. Actually know these are the two new this thing only thing we are trying to debate ourselves. Are we taking too many orders?
This is a question internally we are debating ourselves problem what is happening is when I have more orders, more products my efficiency, productivity, my concentration is getting diverted. Actually no. Even though we see very good the value creation and other things are happening in the Norman. So now today we are pick and choose where the high value high volume business is. There we are not saying no, but at some point it seems we need to consolidate this order intake. Actually this is what we are debating ourselves.
Unidentified Participant
So any margin sacrifice you have to do if you go on that super thermal site.
Unidentified Speaker
No, no, That is not the issue. But the problem is we should not look at the purely margin point of view. We should also look at the. What you call the volumes. Because wind gives 100 business just like that. But those kind of business will give 20 crores, 30 crores. So it doesn’t add up to the our big number and the top line side. Actually no,
Unidentified Participant
But the kind of client like BHEL and lnt they have a huge of pipeline at least so to see. I mean that. That you can. I mean there’s also. I
Unidentified Speaker
Know because they are quoting. They have order book up to 2037. Like that is the kind of numbers what they are quoting actually. So listening to these things we have gone ahead and started booking the order. But at some point in time it’s good thing is to have three foundries actually. You know, so that is a better situation. But we can’t do it overnight. We need to nurture it over a period of time actually.
Unidentified Participant
And. And if you can just last follow up on that. What piece of puzzle in the super thermal we are solving in terms of product. The piece, the component which we are making. No,
Unidentified Speaker
Basically there will be a case. Yeah. There will be a casings for this chamber. Actually no. So they are all the big casings. 30 tons kind of the big casings. So those two components were planning to supply today. They are all imported. There is no supplier in India. But we are trying to make it input substitute component. Actually
Unidentified Participant
It’s a part of turbine.
Unidentified Speaker
Yeah, it’s a part of the turbine. It’s part of the topic. Okay, thank you. Thank you. Thank you. May I request Mr. Ankur Gulatri to unmute yourself and go ahead.
Unidentified Participant
So what is the production or sales in terms of tonnage in Q4?
Unidentified Speaker
Q4 I think 6500 tons. 6400. This
Unidentified Participant
The same as last quarter? More or less. Right. I think Last quarter was 6,675.
Unidentified Speaker
7,200. 7,200 was the last quarter. Previous was 6,500 and 6,000
Unidentified Participant
Q3.
Unidentified Speaker
6,200 and 7,200 was the last quarter.
Unidentified Participant
Okay, so this quarter is 6,400 approximately.
Unidentified Speaker
Yes.
Unidentified Participant
Which means average realization is 1,085,000 or 1,86,000. Is it correct? No, no
Unidentified Speaker
It’s not. Look at that way because there will be Something called as a work in progress and all. Generally we get around 135. 140 is the relation what we get.
Unidentified Participant
So can you give me the sales tonnage if not the production tonnage?
Unidentified Speaker
Often I don’t have. If you write a mail I can reply to separately because this number I don’t have the tracking immediately or if I have to spell out something. 120 divided by. 120 plus divided by 140. Actually we are done. I think last year quarter 8,000 tons plus sales wise.
Unidentified Participant
Because
Unidentified Speaker
There was a inventory carryover from the previous quarters
Unidentified Participant
Is
Unidentified Speaker
Q3 because there will always be cycles. Actually what I produce today I may not sell same everything in the same quarter. Many a times this I produce for the future orders and then it gets converted in the upcoming quarters. Eight and a half thousand. Nine thousand tons is the sales in the last quarter. Eight and a half thousand.
Unidentified Participant
Perfect. Second, what percentage of exports is FOM basis and CIF basis? If you can spell
Unidentified Speaker
No, everything is FCA basis.
Unidentified Participant
So no, no shipment cost only.
Unidentified Speaker
No, no, no. We don’t take. Only domestic we take the shipment. But exports we don’t take any shipments
Unidentified Participant
Because we’re
Unidentified Speaker
Seeing a lot of volatility in the shipping cost. We don’t want to take that risk.
Nilesh Mankar
That’s fine.
Unidentified Participant
For 80%
Nilesh Mankar
Capacity
Unidentified Participant
Utilization in FY27 we’ll have to sell roughly 36,000. So 9,000 per quarter.
Unidentified Speaker
You’re right.
Unidentified Participant
Okay, fair enough. For F28 can we go to 9293 because new capacities will not come.
Unidentified Speaker
Should be. Should be possible. 90% plus kind of things should happen.
Unidentified Participant
And on your average realization of 1.2, 1.3 lakh. What kind of escalation or is it indexed to the commodity?
Unidentified Speaker
It’s difficult to predict how commodity cycle is going to operate. But generally we get around 140. You can take mean values. Actually you know the relation always
Unidentified Participant
140.
Unidentified Speaker
Yeah. 135
Unidentified Participant
Last I think Shreya said 300 basis point margin expansion is the target for F27.
Unidentified Speaker
So
Unidentified Participant
That means 16. 16 and a half broadly.
Unidentified Speaker
Yeah, you’re right.
Unidentified Participant
And this factors in all the machining benefits.
Nilesh Mankar
No problem.
Unidentified Speaker
Yes. And we are also trying to see the both on the commodity cycle side. Because today we are in the lag side. Because the last quarter also there was a price increase current quarter also. Still it is in the increasing trend. Actually no. Assuming that this gets stabilized in this quarter next quarter and everything get absorbed in the the quarter. But if this keep on going up up to the fourth quarter then there will be a lag actually
Unidentified Participant
And F28 this, this let’s say 16, 16 and a half goes up slightly more because the whole impact of bit more operating leverage should come another 50. That’s
Unidentified Speaker
How we are given a guidance of 18% plus in our original the plan. I think we are in line with that guidance.
Unidentified Participant
Okay. All right, thanks always.
Unidentified Speaker
You’re most welcome. I think I have covered all the questions if anyone has got a question so please raise your hand. Nilesh, I think we have covered. So you can go ahead with the conclusion. Yeah,
Unidentified Participant
Sorry. Thank you
Nilesh Mankar
For running.
Unidentified Speaker
Thank you again once again.
Unidentified Participant
I mean given that we are let’s say six months behind schedules to some extent the next phase of capex is now F28 and. Right. Which means
Nilesh Mankar
Any
Unidentified Participant
Fundraiser is also now F28 or F28 mid, not F27. Any equity fund.
Unidentified Speaker
See between mid of Ms. Fag end of the F27 or early F28 we are looking at somewhere the Q4 F127 or Q1 Q2 of F28
Unidentified Participant
And this quarter Q4. The the manpower cost bump is let’s say I think 11 crore. Is that a steady state run rate now?
Unidentified Speaker
Yes, somewhere closer to. But this is the full manpower cost at the peak capacity. Actually no maybe means it has gone to the majority of the level. Yeah, it’s already there.
Unidentified Participant
And other expenses used to be let’s say 36 crore run rate have gone up to 47 48. So why this 1/3 jump in 400 quarter?
Unidentified Speaker
No other expenses. There will be machining outsourcing costs because when your revenue goes up by 30 40% the other expenses consider the outsourcing cost. So that is also built into that other expenses.
Unidentified Participant
So this, this quarter 48 crores on 6
Unidentified Speaker
Proportion as a percentage of thing than looking at the absolute numbers with respect to the sales you should compare the the splits.
Unidentified Participant
Understood. Okay. All right, thanks.
Unidentified Speaker
Thank you. Yes, Nilesh. Yeah. You can go ahead and conclude.
Nilesh Mankar
So thanks everyone for sparing your time and joining today’s meeting. On behalf of entire Synergies team, I conclude this meeting has been over. I say that this meeting has been over and I wish all the best for your investing. Thank you. Once again. The recording has stopped.