Ladies and gentlemen, welcome to the Q1 FY2026 Earnings Conference Call hosted by Bharat Forge Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Amit Kalyani, Vice Chairman and Joint Managing Director of Bharat Forge Limited. Thank you and over to you, sir. Good evening, ladies and gentlemen, and thank you for joining our quarter one analysts in this call. We are definitely in very interesting times. Given the undercurrent, I would take you through first the numbers, and then our team will take your Q&A. I have with me our Finance and Investor Relations team. Q1 revenue for Bharat Forge as a standalone was INR 2,105 crore, which is down by 2.7%. The uncertainties around the whole tariff have created a lot of disruption in the global outlook for automotive globally in the U.S. and worldwide. The pause in the emission norms has pushed out the pre-Budget which was anticipated, and some amount of seasonality in the electric business has also contributed to topline weakness. Standalone EBITDA in quarter one was INR 588 crore, which is 6.5% lower due to low utilization and a different product mix. We have absorbed about INR 14 crore worth of tariff-related expense in Q1. At a consolidated level, Q1 revenue was INR 3,909 crore, which is 1.5% higher quarter-on-quarter. EBITDA moved up to INR 682 crore, which is a margin of 17.4%. The consolidated performance showed an improvement on the back of better profitability in the overseas business and reduction of losses in the Kalyani powertrain. During the quarter, we have secured new business growth of about INR 900 crore, which is Bharat Forge INR 429 crore, Defense INR 269 crore, and J&T about INR 149 crore. On the overseas subsidiaries, our EU aluminum operations were stable. Utilization levels are at about 70%, and we had an EBITDA of about INR 33 crore. The U.S. aluminum business had a fairly decent quarter driven by operational efficiencies and better utilization, with the second consecutive quarter positive EBITDA margins of 6.1% in quarter one. Current utilization levels for the aluminum business is also about 70% of phase I volume. We would continue to evaluate the restructuring options for the European steel business, and we'll update you on the progress in due course. I think we put up a fairly decent show given the current circumstances, which continue to evolve as we speak. Tariff-related uncertainty is definitely something that nobody has ever experienced before, and it's something that we are engaged with our customers in finding a resolution. I just want to highlight to you that only about 1/3 of our exports from our Indian manufacturing, that is Bharat Forge, that is India manufacturing, which is BFL plus industrial plus defense etc., were to the United States in Q1. Our overseas aluminum operations have turned the corner, driven by higher utilization rates and better operating metrics. In India, a wide portfolio across steel forging, ferrous, and aluminum casting is helping us increase our content per customer across sectors and geographies. In the medium to longer term, you will see the center of gravity shift back to our India operations as manufacturing in India becomes larger and more lucrative, and they're already seeing opportunities emerge for machine tools for supply to emerging sectors in the domestic market as well. Our acquisition of the American Axle India CVF is another step to build upon our India breadth and to add more value-added products in our lineup. This gives us access to the sliding light commercial vehicle and SUV segments as well. In addition to manufacturing facilities, these assets provide us with vital engineering know-how to design axles and approve axle design. With the good RFQ pipeline and the different businesses, we expect to see some orders getting finalized traditionally in this cycle. Q2 looks a little weaker, driven by U.S. exports and hopefully a master low for this cycle. The second half should be better than the first half. Talking about the rest of the year, we expect that aerospace should continue with 20+% growth annually, YoY. This business has limited exposure to the U.S. market. American Axle could add about INR 1,000 crore to the consolidated topline for the year. We will see it consolidate from quarter two FY2026. Our steel Europe, as I mentioned, in six months, we'll have a roadmap in place which will outline the entire process that we will undertake for this. Q1 in JS Auto is a seasonally weak quarter, aggravated by tariff uncertainty and some amount of slowdown in the renewable energy sector due to the pullback on renewables in the United States. I think to sum it up, from where we are today, we should see positive momentum in news flows and performance, especially in the second half. Like the bar, we will use this period to pivot and come out stronger than before. Thank you very much. I will now have my team answer your questions. Thank you, sir. We will now begin the question -and -answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Mr. Sapil Singh from Nomura. Please go ahead, sir. Yeah, good evening, sir. Indeed, a tough quarter, but I would say a good performance considering the circumstances. I just wanted to ask you regarding the tariffs. You know, firstly, a more fundamental question. Who bears the tariffs? Is it, you know, distributed across the entire chain of customer, OEM, and suppliers? Does Bharat Forge bear more? Just, you know, your perspective on this thing. You're asking essentially, how is the tariff compensated? Yes, sir. Yes. Right now, irrespective of who pays the tariffs, whether we pay the tariff or the customer pays the tariff, at the end of the day, it is compensated in price. Usually what happens is customers work with us to find some solutions because obviously these are extraordinary circumstances. Given the fact that we provide critical products, all customers are working with us to find suitable solutions because that is the need of the hour right now. Okay. Sir, this INR 14 crore impact that you brought, was that for the whole quarter or was that for a part period? No, no, that was the full quarter. Okay. Tariffs were applicable for the full quarter? Yes. Okay. The second question is, you know, currently, with the tariffs currently at 25%, how is the competitiveness of Indian exports, and which are the geographies from which you are facing competition for products like crankshafts and contractions? I'll answer this in a very simple way. All the countries that produce these parts have the same tariffs. I mean, either we are the lowest or we are equal to what anybody else is. Nobody is lower than India. The other two geographies are China plus another one, both of which are at higher levels. Is there a case that you need to think about setting up manufacturing for some of these products in the US, and if the tariff uncertainty is affecting any order inflow from the customers as well? That would be the last question from me. We are not looking at setting up any other facilities right now anywhere outside India. On order inflows, I think I'll let Subodh answer that. At this point, there is no impact on order inflows because typically, you know, for the products that we are engaged with, it takes anywhere between two to four, three years to, you know, complete the whole approval and validation cycle, even if we have to move it anywhere ourselves. It is a very complex process, so currently, there is no impact on the order flow because of this reason. Okay. Thank you, sir. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in this conference, please limit your questions to two per participant. Should you have any follow-up questions, we would request you to rejoin the queue. The next question is from the line of Gunjan from Bank of America. Please go ahead. Yeah, hi. Thanks for taking my questions. Just one quick follow-up on tariff and then we'll get to the rest of the business. You mentioned in the prior call that the tariff was different for industrial and autos, right? Is there any change to that with the recent 25% imposition? Does the industrial also get, you know, has the same tariff now, that the TV part of the business also gets impacted and we see 25% implication on that? Currently, that is the scenario, and that is under evaluation by the U.S. government as well. This INR 14 crore, again, you know what Kedar Dixit was asking, the tariff is applicable only when the shipment reaches the U.S., in which case the tariff would have been applicable only maybe towards June or something. Is it fair to assume that we will see more impact of tariff going into the second quarter? Even for this tariff that is applicable now, the effective date of implementation will be 7th of October or something like that. We will have some time for whatever is being shipped. 7th of October, right? August. 7th of August. Okay, got it. Let me move on to some other parts. I think maybe it would be good to hear from you on the defense. You do mention that there is a pipeline, you referred to some pipeline and strong visibility on that. Can you talk a little bit around it? What is it, what is it just being? Is it on exports and is it still? As you know, we have announced that we had a pipeline of INR 9,000 crores, after which we have won one more tender, which has to get converted into a signed order. Once that happens, that will add another INR 1,400 crores to our order book. That's domestic? That's a combination. This last order that I'm talking about is domestic. Okay. Got it. You lastly just told me, rejoin the queue. Sorry, we are only, yeah. Okay. All right. Thank you. Thank you. The next question is from the line of Mr. Pramod Kumar from UBS. Please go ahead, sir. Yeah, thanks a lot for the study. Amit, I just wanted to understand, you said every country which is exporting into the U.S. is either paying tariff as well as India or higher. Is there no? All the countries which are producing at the same cost. Is there no onshore U.S. plants for forging by technical core anyone? There are forging plants, but not for machines. Not machines. On the forging side, there could be some competition or cannibalization with the, sorry? Not really. I don't think there's any capacity. Oh, they don't have capacity. No additional capacity as far as we understand. Fair enough, sir. You did talk about second half being better than first half. I'm just trying to understand the reasoning behind that. Also, within the first half, how should one look at 2 Qs versus 1 Q, sir, if you can just help us navigate this uncertainty in a much better way? Honestly, look, the tariffs were around three days ago, okay? I think we have to wait to understand the overall situation and then come back to you. This is basically what we are hearing from our customers. Okay. Second half assessment is based on what he's picking up from customers, basically. Yeah. Yeah. Yeah. Fair enough. Sir, on the different side, last one, we've seen that recent orders with the entire situation we had in India, even the Israel-Iraq, that increasing the war theater, the action is moving towards air, air-based system, drone, missiles, anti-drone. What is the group's strategy? Because you have very deep roots on the land side. No, we have a presence in every sector. As you are aware, we signed the agreement with a company called Turgis Gaillard for nail drones. We have a solution right from nail to super light drone. We have an entire range of airborne unmanned aircraft. We have for land-based unmanned products and for water-based unmanned products. If you can just help us understand, what are the different order backlogs, including the INR 14 crore that you're talking about, how much will be the component of non-land systems? ATACMS is normally what everyone associates Bharat Forge with, and even the carbides. If you can just help us understand that next. See, land, when you say, it includes facility vehicles. It includes, you know, artillery systems. It includes a lot of things. Artillery itself is about INR 4,000 crore. Artillery alone? Yeah, it's less than half. Carbides and other stuff? Carbides is a recent order, right? It's not yet included in that. Oh, it's not included in that? Because if I'm not wrong, media reports suggest that you are L1 already on. Yes, we are L1, but the contract is not yet signed. How big could that opportunity be? Because that's a large one. I believe it's discussed that is INR 1,400 crore. Okay. That's INR 1,400 crore. Is the market much larger for such carbides? I believe there are procurement of the, it's huge, state government level. It's only 200,000. Yeah, sounds good. Thanks a lot, sir. I wish you all the best. Thank you. Thank you. Participants, the request is to limit your questions to two per participant. Should you have any follow-up questions, we request you to rejoin the queue. The next question is from the line of Amyn Pirani from JP Morgan. Please go ahead, sir. Yes, hi. Thanks for the opportunity. Am I on the call? Yes. Yes, sir. Yes, hi. Two questions. First of all, on the U.S. aluminum profitability, does this business get any benefit because you know the U.S. has imposed tariffs on a lot of things? That has some profitability tied, or if you can highlight what is causing the sharp improvement in profitability here? One factor is that our operating metrics instead of volume capacity utilization have improved. That's really fueling this improvement. I'm hoping that having a competitive source made in the U.S. will help other U.S. OEMs maintain their MCA requirements. Managing MCA requirements is an important factor. That would help us with securing new business. I think still last year you were also mentioning that there were sales increases from. Sorry, go ahead. Go ahead. Sir, there's a static disturbance at your end. Is it better now? Please go ahead. I'm just saying that I think the last quarter you were also mentioning that there were some delays in getting the price increases from the customer on the aluminum business. Is that behind us now? No, it's not yet done. That's still—hello? Yes, yes, I can hear you. That's not yet done. Okay. Thanks. I'll come back in the queue. Yeah, thanks. Thank you. The next question is from the line of Mr. Pramod Amthe from InCred Capital. Please go ahead. Yeah, thanks for the opportunity. Amit, considering that this tariff overhang has been there for some time in the system, is there any prebuying by the clients? Has it happened in the last couple of months? No. Nothing of that sort, you said, see? No, no. Okay. Thanks. Second, with regard to the U.S. aluminum forging, what is the plan now with regard to the second line of capacity? Are you advancing that, looking at the contracts? That's already under implementation. It's on time. It's under implementation. Okay. There are also capacities that have been moved, or how is the scenario? Not all of it. We have some empty capacity. We have deliberately kept some capacity empty because we thought that, you know, if there is some positive development on the demand in the U.S. and mail in the U.S., that gave us some, you know, leverage in the future. Sure. The last one with regard to defense, considering the recent conflict, how are you looking at addressing or adding up more addressable segments to your defense targets for the next three to five years? We are working on. In terms of product lines. We are working on multiple areas. We are working on, as I mentioned earlier, drones, right from air, land, and sea to air defense to naval guns to lots of other advanced systems. Within all these systems, we will have high domestic content. That's our goal to have a broad-based business. Sure, thanks a lot. Thank you. Thank Thank you. The next question is from the line of Mr. Kapil Singh from Nomura. Please go ahead, sir. Yes, sir. Thanks. Just one follow-up on KSSL revenues. You know, they have come off over the last four quarters. Just some understanding as to what is happening over there. You know, KSSL's revenue, don't look at it on a quarterly basis. Look at it on an annual basis because there is a lot of lumpiness in this business. I would look at it on an annualized basis. Okay. Yeah, you will see a recovery in Q3 and Q4. Okay, on an annual basis, there should be growth in the revenue. That is what we are projecting. Okay. What percentage of these revenues, you know, or what percentage of the supplies go from domestic for this? Everything. From the standalone. From here. From the standalone operations, what is the overlap between the revenue? Yeah, the forging component of. See, the thing is that old orders that have been taken in Bharat Forge Limited will continue to be, let's say, completed from Bharat Forge Limited. New orders will all come, will be from KSSL. It is at 100% subsidiary of Bharat Forge Limited as well. Okay. What about the ATACMS done? Where will that be accounted for? It will be accounted for in Bharat Forge Limited. As Amit Kalyani has also mentioned, we should look at it on a consolidated basis because it's a 100% subsidiary of the company. Yeah, I understand that. Thank you. Thank you. The next question is from the line of Mr. Balasubramanian from Arihant Capital. Please go ahead, sir. Good evening, sir. Thank you so much for the opportunity. Sir, service and SMC lines are new ones here, and what kind of business opportunities are we having in the coming years? How does this align with the government aims, indeed? Our SMCs, we have electronics as a part of our business in defense and in EV and other electronics businesses. We see an opportunity to make electronics components, subsystems, and also some end products as an opportunity for the Indian market and also as a backward integration for defense and EV business. That is what we have set that up. We are already generating revenue from this, and we will also get TLIs for all this. We have applied for the TLI for this. Hopefully, that would come soon. Okay, sir. Sir, especially in construction, mining, and aerospace, those areas are prepared to reach performance because the demand side issue of existing related and don't become exposed to recovery. Secondly, sir, this e-mobility subsidiary, when we can expect breakevens, whether it is in H2 or beyond that? First of all, aerospace, we will have strong growth in the year. Again, you have to look at it on a YoY basis. We should see upwards of 20% growth, maybe even higher than that. Construction and mining, there has been a dip, but hopefully, that will also improve in the second half. What we are seeing is a growth in construction and mining in India, as the whole infrastructure development in India is taking off. The other question? Yeah. We are working on a few. First of all, we have reduced our costs and we have reduced our losses. For the profit, I think it depends on getting a couple of big contracts going, which we are working on. Let's see. Right now, there are challenges in EV for everyone because of the whole, you know, no magnets available and things like that. Let's see. Thank you. Thank you. The next question is from the line of Mr. Viraj from SIMPL. Please go ahead. Yeah, hi. My question is something long-term. Just two pretty specific questions. Yes. Is it better now? Yes. Yes. Hello? Yeah. Most of my questions will be answered. Just a few questions on American Axle India CVF. I think we will start consolidating from Q2. If you look at the past performance last three years, we have seen a very good, healthy growth in that, traffic from, so what is driving that? Where does that play going forward? I think we also focus on stake in automotive actually. Is there any more companies or any colors in this? How are we approaching this growth path? We see a large opportunity in India in a variety of sectors, not only on highway but also off-highway and in new sectors to get into. We will continue to pursue growth opportunities in India and grow our business and grow our profitability. That is what we are after. Are there any more companies with automotive axles? I mean, eventually, can we also participate in MSCV or will we be restricted to L3D and TD? We are an axle manufacturer. We will make axles. Okay. Thank you. Thank you. The last question for this session is from Mr. Mithun Aswath from Kiva Advisors. Please go ahead. Yeah. Driven from a partnership with Compile Electronics to manufacture servers in India, could you highlight in terms of how large these opportunities that you're getting into could be in the next few years? Yeah. There are three sectors of servers that we are targeting in India. There is one sector where servers have to be made in India. There is a second sector where you have AI-based servers, and the third is just data servers. We're targeting all three. I believe that there is a large market for servers, something in the order of 20,000 a year, going up to 75,000 a year. These are large servers. These are not just small servers. This is a big market, and we want to see how we can be a competitive player in this market and a local player. Right now, we're starting small, but we will build the capability to do much more development and much more valuation in our servers, for our customer base over here, especially the niche and specialty customer base. Thank you, sir. Thank you. I would now like to hand the conference over to Mr. Amit Kalyani for closing comments. Please go ahead, sir. Thank you very much, ladies and gentlemen, for your comments and questions. As you know, we are facing unprecedented times. This company has weathered a lot of downturns and a lot of uncertainty in the past, and we've come out stronger because we've always looked at our capabilities and expanded into new areas. We've worked internally to make ourselves more competitive. That's the same thing that we will do this time around also. I'm quite confident that we will come out stronger and better at the end of this. Thank you very much for your time and interest, and I wish you all a very happy evening. Thank you and good evening. Thank you. On behalf of Bharat Forge, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.