Ladies and gentlemen, good day and welcome to Timken India Limited Q1 FY26 Post-Results Earnings Conference Call hosted by Batlivala & Karani (B&K). 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. Annamalai Jayaraj. Thank you, and over to you, sir. Thank you, Hoda. Welcome to Timken India Limited Q4 FY24 Post Results Conference Call. From Timken India Limited Management, we have with us today Mr. Sanjay Koul, Chairman and Managing Director, Mr. Avishrant Keshava, Whole-Time Director, and Mr. Sujit Kumar Patnaik, Chief Financial Officer. I will now hand over the call to Mr. Sanjay Koul for the opening remarks to be followed by question and answer session. Over to you, sir. Thank you very much. Thanks a lot. Now, okay, good afternoon formally. Good afternoon to everyone, and thank you for joining today. So it is obviously our pleasure to welcome you to this investor call for Timken India. And obviously, we are here to discuss the financial results for the first quarter of the financial year 2026. Obviously, our last quarter in FY25, which was, as you all know, historically generally our last quarter is the best-performing quarter. And as we enter the new financial year on a steady and a very disciplined note, our Q1 performance reflects the resilience we have in the demand and continued momentum in our core industrial segments, and a pretty nice strong focus on the operational efficiency and execution as well. The update generally for the Q1 FY26 is revenue from operations stood at INR 808.8 crore, which was a 3.2% increase over the same period last year. While it was lower due to seasonality after Q4, this remains our best-ever first quarter till date. PBT came in at INR 130.4 crore, broadly flat on a YOY basis and lower sequentially as expected. PBT margin was healthy at 16.1% compared to 16.6% in Q1 of the previous year, same period supported by cost control efforts. As we know, there is some softness in volumes, and there are obviously always the cost fluctuation. Bharuch Plant continues to stabilize well. We have successfully capitalized one CRB line, and we have commenced the commercial production in late June there. Obviously, we have started invoicing from July. We remain committed to building capacity for growth and improving efficiency across the supply chain, investment in rail expansion Jamshedpur, and some plain bearings in Bharuch is progressing as per plan. Overall, the macroeconomic uncertainty continues. We are cautious, optimistic about the demand environment across our key industrial sectors. Our focus remains on execution excellence, operation disciplines, and delivering value. With that, I would now stop here and throw the lines open for questions. Thank you. Thank you very much. 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 Mukesh Saraf from Avendus Spark. Please go ahead. Yes, good evening, and thank you for the opportunity. My first question is on the revenue mix, if you could give us the mix in the first quarter, how much was from railways and the other segments that you usually give the breakup for? Yes. Thanks for the question. And our mix in the Q1 FY26 rail was INR 156.5 crore, which is 24% of the total pie. Mobile was INR 156.9 crore. Distribution was INR 146 crore, 18% of the pie. Cranes was INR 142 crore, which was 18% of the pie. Exports stood at INR 164 crore, which was 20% of the pie, and we did also an export incentive. So overall, it was INR 808.8 crore. Sure. Sure. Thanks for that. And secondly, on the new plant, you said that you have capitalized one line. Now that it has started operations, could you kind of give an update? I think last time you had mentioned that by end of this year, you're expecting to hit a utilization of 45% for this new facility. So how do we kind of look at it now? Does that stay the same, or is there some change to that estimate? I think more or less we will be there. We would be staying close. The first line is capitalized, and the other lines of spherical roller bearings, hopefully, we will shortly get capitalized. And we should be able to deliver almost same, a couple of percentage here or there, but yes, we would be there. The factory people training, new lines, qualifications, PPAPs, so a lot of busy time there. And yes, to direct to your question, Mukesh, we should stay close for the end of that target, what we spoke of here as well. Right. Right. In relation to this, you had also mentioned that about half of this would be exports. And with all the noise around tariffs and the fact that there is expected weakness in the Class 8 trucks industry in North America, we still think exports, are you really confident that exports can kind of grow from here? I think, obviously, this is a CRB, SRB, so Class 8 is not really, so that is out. It is not great news on the tariff side. So obviously, the US is a pretty big market, though for CRB, SRB, our target market of exports are the rest of the world: Australia, South Africa, Europe, ASEAN, etc. And obviously, some would have gone to the US as well. Now, how does this tariff. Obviously, nobody knew about it previously. Nobody knows even as we speak how it will happen by the end of the year. So nobody can predict it. Experts say that they might fall down to 15 eventually, but we will see. But overall, I don't think it is not great news. Obviously, it's a great market. This is a market which everybody loves and everybody wants. We are not connected to the class, so that is disconnected here. But the overall exports, still there will be a Class 8 impact? Yeah, I think obviously we are looking at all the markets closely, and we are looking at tooling up and things like that. And de-risking U.S. on this is part of the whole plan. So I don't think it is a showstopper, but it is certainly a speed breaker a little bit here and there, so we will risk mitigate that. Got that. Got it. And just last one clarification. So now that we have capitalized the lines, we have still not seen the depreciation or any fixed overheads? Yeah, you'll see. Okay, we'll see it come next week. All right. I think it has last week or June, so you'll see it next week. Okay. All right. Got that. Thank you so much. I'll get back with you. Yep. Thanks a lot. Thank you. The next question is from the line of Ankur from HDFC Life. Please go ahead. Yeah, hi. Good afternoon, sir, and thanks as always for your time. If you could just talk a little on the rail and the process markets, how are these doing? What are your growth expectations from these markets? Would it be led more by industry growth? Would it be led more by market share? Just some more color and that would be helpful. Yeah, sure. So on rail, as I always say, the growth will be there. It will be slow and steady overall. And generally, the wagon builders have their own targets to complete. So the last quarter is always a quarter which is always busy so that people complete the orders and things like that. So that remains there. This railway business and many of the businesses are seasonal in nature. So overall, rail as a segment is never going to be hockey stick. It will be decent growth, and there will be some quarters of weakness, some quarters of strength. But overall, Indian Railways is committed, so I don't see there is any such change in the policy. So that is heading. And then the DFC is slowly becoming better and better and better, which means that freight goes to dedicated. You can put more passenger trains on the tracks, which means that now the passenger trains are not going to be the old conventional trains. They are all going to be one-way platforms, which means that the tapered and cartridge bearings have that. So there are two aspects to the rail. It is passenger. It is locomotive. It is metro, and it is freight. So apart from some segments, there is growth in the market, and some segments, especially the locomotive segment. For us, it would be also market and penetration. Freight, we are generally leaders, so market growth and maintaining our leadership would be there, and rail will keep on going in India, and you see, it has to be seen on a five-year horizon rather than a quarter to quarter, and then on the process side, I think you people know the process. The major process is stationary equipment, which is metal, which is energy, and which is infra, which is cement, etc., etc. So these are these three, four core sectors. So mining is weak. It's not great, but you certainly have solar is booming. We don't do much solar yet in India, but we have started doing a little bit. Wind is doing very well in India, and we'll keep on growing. On steel, it is a mixed kind of thing. More investments are needed to be done by the steel industry in India. There is obviously their need to be. They need to see the demand out there. And I think last quarter, the demand was a little bit less, and you see the melt has also gone down a little bit. So process industries are a little bit of a mixed bag there. While wind is doing okay. Steelmaking is a little bit sluggish, and cement is also a mixed bag a little bit there. And that obviously is connecting to more spending on the infrastructure and then people investing in steel, etc. So overall, the story is going to be okay. And quarter on quarter, there will be these changes. And then geopolitics has this own emotional impact both on the market and on the industrial people who have to invest. But I am kind of very optimistic that the overall story on process and rail, I always believe, knowing rail a little bit well, that it is going to be slow and steady growth because of many manufacturers in there. So you said we could assume that rail probably grows in double digits and process maybe in high single digits. Is that how we should look at the market at this point? I don't think rail can be double digits. And though next this if you go to 2026, 2027, we are still saying that the overall GDP is going to be 6.4-3.5%. But both rail and process would be high single. And also, you have the steel industry as well, if you would. I remember you said more like a 3-4% growth was what you were expecting, at least in your quarter back. Yeah. So it would be, see, there are three ways to look at this. One is average, one is poor, one is optimistic. So now it is your call what you want to look at it. So it is between zero to nine, you have to take your call whether it is going to be optimistic, average, or poor. Okay. Just lastly, if I may, on your gross margins, which this year dipped this quarter by about 50 basis points. Even overall, it's about 18%. We used to be in that 20% plus range maybe a year, two years back. Do you believe we can get back to that 20% plus kind of range anytime soon, or is it going to be more till we get faster revenues and leverage? Will we get back to that 20% plus range? So, Ankur, your question has the answer. You know the business area. So, when you have the volumes, your leverage is better. Your leverage is better, it costs a little. So, in the simple game, in the game of manufacturing bearings, volume and leverage is a big play. Sure. Big play. Got it. Got it. Okay. All the best. Thank you. Thank you, Ankur. Thank you. The next question is from the line of Vimal Jamnadas Gohil from Alchemy Capital Management. Please go ahead. Yeah. Thank you for the opportunity, sir. Just one follow-up on Bharuch ramp-up. You mentioned the billing started from July. Would it be fair to assume that whatever is being billed as of now is mostly for export markets this quarter? Hello? Hello. Sir, are you there? Yeah, I'm here. Sorry. Hello, sir. Can you hear me? Yeah, I can hear you. Can you hear me? Yes. Has the management line got disconnected? No. So yeah, so Mike. Give me a moment. Let me check. Ladies and gentlemen, wait for a moment. I will connect with the management. Let me check what went wrong. I think there's some problem. You're not able to connect us. Ladies and gentlemen, thank you for being on hold. The line for the management is now reconnected. Thank you. I'm sorry, Mr. Vimal, you had started asking the question, and unfortunately, technology failed us, and we got disconnected. Sure. Sure. No issue, sir. I'll repeat my question. Sir, just for the follow-up for the Bharuch ramp-up that we saw this quarter, you mentioned that we started billing from July onwards. I just wanted to check if most of the revenues that we or whatever that we've billed this quarter is mostly for the export markets. Would that be a fair assumption, or is it fairly spread out between exports and domestic? No, we did not build anything in the April, May, June. Oh, no, no. I'm talking from July onwards. Whatever we are billing is. July was export. Okay. Okay. Fair enough. And sir, while you mentioned the mix, if my calculation serves me right. No, rail was down, so volume was down. So obviously, rail was generally last quarter is good, and our last quarter in rail last time was the best ever in 30 years, INR 303 crore. So rail was the major mix which was down. Right. And sir, if I were to look at the overall mix, it does seem that there is a fair bit of export incentive this year, about 90-odd crores. Is the calculation correct, or? No, no, no, no, no. We don't have any export. INR 36 million it is. Actually, for the quarter, it's INR 36 million, which is about. Fair enough. Fair enough, sir. Thank you so much and all the best. Wish we had INR 90 crore. I would have been happy. Thank you. A reminder to all participants, you may press star and one to ask a question. The next question is from the line of Rishi Vora from Kotak Securities. Please go ahead. Yeah. Thank you, sir, for the opportunity. My first question is around exports. Can you just give us what would be our geographical mix at, let's say, a FY25 or one Q of FY26? And secondly, if the tariff situation persists, which is at 25% today, how will the pass-through happen with our parent? Any color on that? That, will we be able to pass on all the impact, or will we need to share the cost with the parent? Just any color on that. Yeah, so the verdict is not yet out on the tariff, so obviously, in this game of negotiation, putting pressure, all that is there, so you guys know it better than me, so I think even if it is, whatever, 15, 20, 25, that is the import tariff which has to be paid by the buyer, so I'm a seller, so somebody has to buy it and clear it and sell it onwards, so now, if there is 35% on China, by your papers, for China, it was more than 75% for 30 years, so that remains there, so where are the products going to come from? That is also a large question, and the cost of energy and cost of labor in Europe and the problems in Europe, even if it is only 15%, still would weigh towards this. So I would say that while America is a great market, and this is a market which has obviously a huge base, close to $30 trillion, and then the consumption is pretty significantly high, so that market is important for everybody. But at the end of the day, if the duties, the way we see it, between the cost of manufacturing in Mexico and their duties, cost of manufacturing in China, their duties, cost of manufacturing, and the base in India, and then compared to Europe, I would say that I can only assume and guess. Obviously, we have to wait and watch how it pans out. But at the end of the day, the cost of manufacturing in the U.S. is going to go up, or consumption is going to go up because putting up, if the intent of the U.S. is that this will bring manufacturing in, then the infra has to be there. Steel making has to be there. Forging has to be there. Casting has to be there. That infra has to be there. And the biggest thing is that is power available in the U.S.? Is enough energy available there? Etc. So I think certainly an important market, U.S. And there would be tariffs going to be. India has, say, on steel, it is about 12%-13%. We are importing things like that. And if it is 15%, we are importing. So I'm not worried. Though it is to be seen how it pans out, but it is not a worry, and then it also gives us a good chance to make sure that you don't go after an easy market. If you have the product, you have the technology, you have the cost, quality, etc., then U.S. becomes a pretty easy market, if I can use that word, so we don't have to take it in a little sense compared to other markets where the currency challenges or the other related challenges are there, but it kind of forces you to excel in those markets, and when we exported our first bearing from the new Bharuch plant was not to North America, was to another new customer in a new territory, so overall, I'm not worried. It is a cause of how do you position yourself and how it pans out. But overall, should not be really that as the more worrisome is the U.S. economy. That is more worrisome. My worry is more on the U.S. economy. How does the U.S. economy? Has they bottomed out, or it is a soft landing, and is 2026 going to be coming up strongly? I think that is more important than this is important, of course. But this has to be seen how it happens. But more importantly, is U.S. market going to revive quickly or not? Understood. And sir, what would be our geographical mix of exports? So generally, I think it is 50/50, roughly. We have 5% here, then generally 50/50. And in that geography, North America, we have it in the heavy truck and rail is 50/50. America. Okay. And in the rest of the 50, what would be our end market? This is the same mix, tractor, off-highway, trucks, trains, rails. Understood. And sir, my second question is on the CRB, SRB, which we have exported in the month of July. Again, over here, what would be our end markets which we are targeting at this point in time? And I think we are guiding for 40%-50% exit utilization at the end of this financial year. So as we go into second half, I am assuming that even in the domestic market, we'll start supplying. So again, have we seen any order visibility over there or any color you could give on that would be helpful? Yeah. So we have obviously, when you start a plant, you have to first all the potential customers will approve those lines, PPAPs, and things like that. So those processes are on. And we certainly have a domestic market, rather a very strong domestic market. So just for the sake of application, it goes into cement industry. It goes into material handling equipment. It goes even into railway, which we are not supplying till date. Say, for example, in Indonesia and Malaysia, the palm oil crushing uses spherical bearings, thrust sphericals, and sphericals. So there are diverse areas, but largely cement, energy, palm oil crushing, and other related areas. So it is even including railway. So wherever you see in auxiliary equipment, in a steel plant, auxiliary equipment, in any other plant, you'll see SRB. Generally, the difference between SRB, it is generally used where it can align itself. If there is a misalignment, a little bit, sphericals have a good role to play. And this is across, say, for example, if there is a large material handling, such as stackers, reclaimers, crushers, it will use SRB, CRBs. Understood. And sir, again, the domestic market, do we have any order visibility at this point in time? We have. Yeah. We are doing the PPAPs, and we are getting qualified. We should have, and as we start getting qualified, we will start pitching in for more, like for railways, there would be qualifications required. And I can tell you that one of the locomotives, we have got the first order from Indian Railways as well on a locomotive application. Understood. And, sir, lastly, any order book which you can share for the CRB, SRB, which you have both domestic export combined? No, I cannot share the order book yet because obviously for the right reason, but as I said, that we are racing towards filling up the plant, and as I said, there's 50% utilization by the end of the year, and that will end here. Okay. Thank you so much, sir. All the best. Thank you. Thank you. The next question is from the line of Mayank Bhandari from Asian Market Securities. Please go ahead. Yeah. Thanks for the opportunity. Just wanted to highlight one point which you have mentioned in your annual report. There is additional that you are investing INR 120 crores for the capacity of cups and cones and railway facility in Jamshedpur. Yeah. So is this part of, I mean, is this something new which you have announced, or you already announced it before? Yeah, we announced it before. It is already announced, and yeah. What kind of a turnover and all you project from this 120? This is, as our factory in Jamshedpur is catering to, obviously, India, Indian subcontinent, also exports, and then the growing need of heavy-duty bearings in South Africa and U.S., etc. So it is aimed towards that. And on asset turns, more than two for every $1 invested, that would be ensured. So this is basically we are getting into component manufacturing through this. This is capacity enhancement of what we have. Or the TRB only? Yes. These are all tapers. These are all tapers for rail lines, for railway business. These are the tapers which we call as CTRB. These are sealed bearings, sealed tapered roller bearings. And Sir, the consistent answer of the export thing, you mentioned that you are more worried about the demand from the U.S. If you could just highlight. Yeah. I said in general. I said, yeah, yeah. So the question was, the answer was in general to Rishi's question was in general, is tariff from a best-cost country like India, China, etc.? The worry, tariff obviously is a little worry. Larger worry is always the just imagine if the American market is booming and they need bearings. Do you think that tariff will be a worry? When the offtake of demand takes and consumption needs, then the say, for example, the gems. From India, the gems to America is $10 billion. Even if the tariff is 50%, do you think it will not stop? It will not stop. The buyers are the guys who buy gems, don't care. It is even further investments. So when the demand picks up, that is the time. For example, in India, demand picks up, that is the time you get better pricing. So it is to be seen. Tariff is obviously a challenge. And especially when the world had enjoyed lower tariffs into America, and people had got accustomed to whatever, 5.6% as tariff there. So now that all of a sudden, that 10, 15, 20% delta, somebody has to absorb. So that is there. But bigger worry for the general economy is when America picks up. So that I would say would be more important, more worrisome than risk, if in general, I'd say. But then with geography becomes much more attractive in terms of importing U.S. So, for example, Indonesia is picking up. Vietnam is picking up. South Africa is picking up. Australia is also not that bad. So other geographies are also picking up. And North America, obviously, has it? The question is, has it already touched the bottom? And the soft landing has happened, or it will further fall next two, three months, six months? We'll get to know. A lot of people are saying that next year, 2026, might be the start of the revival of America, but that is only the economy, some of the guys say. So yeah. Okay. Thank you. Thank you, Mayank. Thank you. The next question is from the line of Alka Chandrakant Kulkarni, who is an individual investor. Please go ahead. Yeah. Good afternoon, sir. Good afternoon. Are you getting me? Yes. My question is regarding the portfolio pairing, non-bearing portfolio. Do you have any plans to finalize yet for India rollout? So this is obviously a very nice low-hanging fruit, if I can use that term, that the parent has the technology on lubrication, on chains and belts, and other related areas as well on linear motion bearings, on plain bearings, etc. So plain bearings, we announced last time, we have started the first step of investing the first line on plain bearings, which is getting hopefully next year we'll start producing in Bharuch. So that is happening. But if you ask on the linear motion big ticket item like couplings, etc., etc., so we have the technology now. How do we do a greenfield, brownfield, M&A, all that stuff? It is a continuous discussion and continuous looking around. So that is where we are. It is definitely a low-hanging fruit, if I can use the term once again. I'm saying that because of the technology which is available with the pairing of Groeneveld-BEKA on lubrication, and then Diamond, obviously, on the chains, and Carlisle on the belt, and Lovejoy on the coupling side. So yeah, it is a continuous discussion, and we have to be careful investing, looking at the markets, etc., and we are continuously looking at all aspects so that we can harness the growth in India in industrial motion. Okay. Thank you, sir. My next question is regarding the services income. In process industry, we were talking of monitoring the bearings and repairing them and all that stuff. So do we report services income separately? No, we don't. We don't. And we don't do that separately, but we are continuously. I can tell you that the endeavor is on. We maintain almost more than two dozen sites within the steel companies where we do choking, de-choking, grinding, etc., etc. And similarly, on bearings, we do thousands of bearings for repair, which is not actually repair, which is a refurbishment is the right word for that. And that business is bound to grow in India. After some time, the big bearings of the wind will also need that. So we are on that, but we are not reporting it separately. Okay. Thank you, sir. That was it for me. Thank you very much. Thank you. The next question is from the line of Ankur from HDFC Life. Please go ahead. Yeah. Hi, so just a quick follow-on on the Bharuch factory. And as you said, we touch about 45%-50% utilization in the next one to two quarters. So fair to assume this adds about 200-250 odd crores to your top line on a quarterly basis, assuming about 800,000 crores annualized. Is that how we should think of it? I think we need one more quarter. Obviously, smaller bearings are small value. Large bearings are large value. We'll see the mix. Same question, we are looking ourselves currently, looking at the demand which is flowing in. As you can see that we have just started PPAPs, and every customer has to qualify us. That is happening. So we're fair on my part to answer this maybe one quarter down the line. Okay. Thanks. Great. Thanks. Thanks, Ankur. Thanks. I think we can get the last question. I have a stop at 5:15 P.M., so any last question, we can take that. I think more or less we have covered everything. The next question is from the line of Rahul Kumar from Nuvama Wealth. Please go ahead. Thanks for the opportunity, sir. Just one question on CapEx. What is the expectation for FY26 for CapEx? So from the rail expansion which has happened, that is INR 120 crores, and then the plain bearing is roughly 35-odd crore rupees. So that is on this immediate expansion. CapEx is around 150-plus crores that is going to happen between now and next year. On maintenance? Maintenance, the usual that remains the usual. So yeah, yeah. We don't short-change. So we go as per the norm on maintenance, so that will flow as it is flowing. Okay. Thank you, sir. Okay. Thank you, Rahul. Thanks a lot. Thanks a lot. Thanks for your time today. I'm sorry the line got disconnected. I think we had answered most of the questions, and with that, I wish everybody a very good evening. Thank you very much. On behalf of Batliwala and Karani Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.