Ladies and gentlemen, good day and welcome to MM Forgings Limited Q1 FY 2027 earnings conference call hosted by 360 ONE Capital Market Private 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. Dineshk umar from 360 ONE Capital. Thank you, and over to you, sir. Thanks, ma'am. Welcome to MM Forgings Limited 1Q FY 2027 post-results conference call. From the management side, we have with us today Mr. Vidyashankar Krishnan, Chairman and Managing Director, and Mr. Raghunathan, Chief Financial Officer. I will now hand over the call to Mr. Vidyashankar Krishnan for the opening remarks, to be followed by question- and- answer session. Over to you, sir. Good afternoon, everyone. Thank you all for joining us on MM Forgings' Q1 FY 2027 results call. Basically, we've seen considerable improvement in the markets as far as Q1 is concerned, and we see the same optimism going through the rest of calendar fiscal 2027 and going into calendar [2027] as well. With strong momentum from both domestic as well as export markets, particularly the U.S.A. We've seen growth in the U.S. market and also the CV market, the CV tractor and passenger car market in India are all running pretty hotly. As a result, MM Forgings has posted a total sales of INR 427 crores as against INR 369 crores for the corresponding period in the previous year. Our EBITDA stands at 82% gross and INR 75, INR 82 crores gross, sorry, and INR 75 crores net of other income. At 18% net of other income, as against 16%, sorry, 19-odd%, considering other income as well. Excluding other income, EBITDA stands at 18%. Revenue growth has been almost 16%. EBITDA has grown by the same 16%, and PBT has grown by 30%. All this is excluding the sale of assets. We have sold land in the Oragadam area of Chennai. We've sold and realized INR 60 crores as net profit, INR 58 crores net of taxes, INR 64 crores gross. That's a profit on sale of asset, not gross. Profit on sale of asset. All that has not been factored in into these EBITDA numbers, naturally, being one-time gains. Domestic sales stands at 63.5% and exports at 36.5%. As against 61% and 39% in the corresponding period last year. India accounts for 63.5%, U.S. 18%, South America 4%, Europe 14%, and others about 1% of today's sales breakup. Commercial vehicle stands at 71%, passenger car 14%, and agri and off-highway 14% of overall sales. Balance 1% is others. 67% is machined, 33% is directly forged. Our heavy forgings constitute 42% of our sales, as against 43% in the previous year under reference. Sales per ton has gone up from INR 193,000- INR 202,000, meaning INR 2.02 lakhs, versus INR 1.93 lakhs in the previous quarter. These are some of the brief numbers that we have prepared for you. We have this as a PPT that will be mailed out to all of you by end of this meeting. With these opening remarks, I would like to throw open the floor for questions, and I would be happy to answer whatever I can in the best possible time. Thank you very much. We will now begin the question- and- answer session. Anyone who wishes to ask a question may please 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 Mumuksh from Anand Rathi Institutional Equities. Please proceed with your question. Yeah. Thank you, sir, for the opportunity, and congrats on a good set of results. Firstly, sir, we have seen a good growth coming back in Q1 quarter. Just if you can give a view for the full year, what kind of a growth we expect in the domestic and exports market, and particularly for the U.S. market. Also, I think very interestingly this time you mentioned a very good mix of machining in the quarter. What led to the notable jump in the machining mix? Hello, sir. Are you there? Yeah. Sorry, I was muted. I muted the phone. We did about INR 1,600 crores last year. We can expect the same 18% growth for this year also. We should be looking at turnover in the region of around INR 1,800-INR 1,900 crores. Regarding machining mix, a lot of money has been invested by the company in the last three years in machining, and that has led to a higher machining mix as a percentage of sales. On the machining mix, should this current run rate of 67% continue for the rest of the year, sir? Yeah. I think it should hover in the 65%-68% range. Got it. Sir, also I think this quarter, particularly gross margin, has seen a notable improvement sequentially on almost more than 350 basis points. Is it part of the reason being a better machining mix and exports mix, sir? Yes, we have had overall realization go up, Mumuksh, this quarter. That would definitely result in a better gross margin. Got it. Just on the employee and other expenses which had increased quarter-over-quarter, any reason for the increase? How do you see the run rate for those expenses, sir? The increase has been steep in Q1. Largely because last quarter, the period under reference, we had not given an increment, and that was done only in the subsequent quarter. This quarter effectively, at this time, we had given increment in first quarter itself, right from 1st of April. That is one reason why there is a significant increase in personal cost, relatively speaking. Plus, we also added some numbers, but overall now numbers and increments increases have stabilized. Right through the year, these kind of numbers should hold. Got it, sir. Sir, lastly, just on the debt reduction plan with the land sale now, how do you plan to further reduce the debt? Just can also update us on the interest run rate expected ahead with the change on the interest rate policy, which we had done earlier. We hold that last year, FY 2026 opening, the debt was around INR 750 crore, net debt. Term debt, at least. Sorry, gross debt. That will remain at those levels. Sorry, gross debt stood at INR 750 crore. That will hold at those levels for this year also, approximately. We would be repaying about INR 170 crore this year, and the same would be drawn back as further loans for investments being made in this year. So gross debt will remain at approximately the same levels. Got it. CapEx would be also INR 170 odd crore, sir? Yes, approximately INR 150 odd crores. Got it, sir. Thank you. Thank you so much for the opportunity, sir. All the best. Thank you. Thank you, sir. The next question is from the line of Ramesh from S.J. Investments. Please proceed with your question. Hi, sir. Thank you for the opportunity. You mentioned that some tailwinds from the U.S. side. Could you elaborate further on what exactly you mean by those tailwinds? Is it in the commercial vehicle sector only or other sectors also? For us, it is the commercial vehicle sector. The CV market, particularly Class 8 trucks in the U.S., is booming quite strongly. We see huge traction there. Got it, sir. Overall, in terms of, let us say, CapEx, we have done a huge CapEx cycle already, and you are mentioning the CapEx cycle to further continue. Could you explain on why are we investing so much, and are we increasing our capabilities? What exactly is happening in terms of our CapEx building? Of course, we are increasing our capabilities across a wide spectrum of machined products. That is where much of the CapEx. Okay, sir. Is into machining. Plus, we are also adding a few equipment into our forging repertoire, if I can use the word. We are adding the 16,500 ton press, which will go into production by end of this fiscal in Q4. We also have a 4,000 ton press that has gone into production in the last couple of weeks. These are the basic additions on the forging side, apart from a little bit of debottlenecking and replacement CapEx cycle coming in on the forgings side. Got it, sir. So right now, in terms of machining capacity, where are we at? With the expectations, where do you want to end up in terms of capacity utilization, machining? Machining is a very mixed bag. I did not get your name. Ramesh, sir. Ramesh? Yes. Yeah. Hi, Ramesh. Machining is a mixed bag. It's very difficult to quantify the machining capacity outright in numbers. What happens is that if you look at numbers alone, a small product with huge numbers in machining would overshadow a much bigger product with much less numbers. But the bigger product would be more value add and probably also more bottom line accretive. It's tough to give a single number that will quantify the machining side. And one good thing at this point of time from April onwards itself, I should have made that in the opening remarks, April onwards itself, I'm happy to say that all the cells at MM Forgings, machining and forging, are running to the fullest of capability. Note the word capability, not capacity. April and May were down, were hampered by an availability of labor, which was prevalent right across the country. We were not new to it, alone to it. The rest of the country was also a part of the shortage of labor, and ours was no different in April and May. June was a lot different. We were able to bounce back with new hires, largely local, and also a little bit of migrant, and ensure that we were up trumps in June. Got it, sir. Going forward from July onwards, we see that our capability has gone up considerably. Now it is hardly for want of manpower. Few cells have technical issues hither and thither, not much, but a little bit, let us say in the last 7%-10% here and there. We are now working on harnessing those and debottlenecking. I would say 10%-20%, not just 7%. I would say it would be over between 15%-20%. There is a good growth potential further ahead, and we are pushing those numbers from July onwards. Got it, sir. Sir, in terms of automation, I understand that we are building capacities in machining and forging. Automation also, are we investing in and how much have we invested so far in the last four years? Automation has been largely in the last couple of three quarters only. Overall, I would estimate that our investment in automation is about INR 7.5 crores-INR 10 crores. Going forward, do we expect a lot more going towards this list of capacities? Absolutely. This number should triple, if not reach about INR 40 crores- INR 50 crores by end of this fiscal. At least it should be in the region of INR 30 crores. Got it, sir. You mentioned that INR 150 crores are of investing this year. When do you think we will start. Sorry to interrupt, Ramesh, sir. May we request that you return to question queue for follow-up? Yes, sure. Thank you. I'll answer this question so that it'll benefit everybody else. We would expect this to result in increase in turnover in about two years from now, one to two years from now. Got it. Thank you, sir. Thank you. The next question is on the line of Nipun from CD Research. Please proceed with your question. Yeah. Hi, sir. Are you facing any pressure from the government to boost our export? Sorry? Are you facing any pressure from the government to boost your export? No, nothing specific. Okay. Because I was asking because there's a lot of. We want exporting and our export numbers have been reasonable right across time, though in percentage terms, exports has dropped. That's because domestic has grown. You know all that. Yeah. Okay. Fine. Because I had that question. Okay. Thank you, sir. Ladies and gentlemen, the line for the management seems to have disconnect. Please hold while we reconnect them. Ladies and gentlemen, the line for the management has been reconnected. The next question is from the line of Naveen Vijay from NS Capital. Please proceed with your question. Hi, sir. My first question is, where are you currently seeing momentum or new avenues for growth in the order book? We recently had a power backup company secure a large order from hyperscalers. Just wanted to know if we are positioned to supply crankshafts for such OEMs. Naveen, yes, the hyperscaler business is featuring out into the domestic forging market, and there is a strong demand from such companies. You are right. Thank you, sir. My second question is on the power and fuel cost still being elevated despite the addition of green power. Could you please quantify what has led to this? There has been a huge increase in fuel costs in Q1 on account of the West Asian conflict. That has been, of course, over after Q1, it has reasonably stabilized. That is the reason why power and fuel has gone up. Got it. Plus, we are taking a hit with rising EV power costs due to the policy of the Tamil Nadu government. But that has not come in Q1 of this year. Got it. The new government annual increase in TNEB costs. Got it. Got it, sir. Got it. Another small bookkeeping question on depreciation. It has gone up 20% year-on-year. Just wanted to know which facilities or product lines are seeing bulk of these CapEx additions. Largely forging and machining CapEx. Machining CapEx, I would say, mostly. Okay, sir. We could see the machining share go up very nicely. My last question before I join. That is the intent. Yeah. My last question before I join back in the queue is on Abhinava Rizel, sir. We had customers getting added on. Just wanted to get an update on how many customers that we are billing and the pipeline and an overview on that, sir. Yes, sure. Abhinava Rizel is on the cusp of getting its first business. It has gotten its first business, and I am thrilled to say that we are into initial phases of SOP, start of production. We are producing parts between production and sample stage, I would say a ramp-up stage, and that is real good news for us. Thank you, sir. I will join back in the queue. Thank you, sir. The next question is from the line of Manas Jain from Sanjay Jain Family Office. Please proceed with your question. Hello, sir. Good set of numbers. Actually, we are shareholders of our company for last 30 years continuously. It has been a very privilege to be a part of this company for last 30 years. I had just two questions, sir. I remember seeing two, three conference calls back, and you also alluded to it saying that the trailer tractor is reducing the front axle demand. I just wanted to understand, is MM Forgings looking at entering the trailer axle suspension assembly? I understand the process might be different and the customer segment is also different, but some of the forging companies have started doing this in order to negate that business loss. I wanted to understand if we are considering in that direction. Not at this moment, Manas. Okay. Not at this. Any particular reason, sir? Is it margin dilutive to our existing business? Is that one of the reason? One would be, yes, it is margin dilutive. Second, we have enough on our hands in terms of growth, managing debottlenecking and ensuring that there is further this thing of improvement on EBITDA and costs. This quarter has been struggling to just keep supplies going. Okay. We have to now organize ourselves on cost reduction. There is a lot to do in the current business. Okay. Yes. Thank you, sir. Second question, sir. I think I saw. Without getting stuck here, we have to ensure that we are moving along in this line of business first. Okay. Fair enough. We have now. The traction is there very clearly, and we need to carry this to its logical conclusion across the spectrum of the business itself. I am talking with the. Okay. Second question, sir. I remember seeing some interview of two months back on one of the media channels where you said, subject to any QIP, you might want to do a INR 400 crores growth CapEx. I just wanted to understand, I know it is very far stretched, but I just wanted to understand where are we targeting, like existing product, existing business, or we are looking at non-auto industrial, or we are also evaluating non-ferrous products such as aluminum, titanium for aerospace. I am just trying to understand where our existing machining and engineering capabilities can be leveraged. So where are we looking at for that INR 400 crores of growth CapEx? First and primary, we would be looking at our own business. Okay. Mainly in hot closed die steel forgings. Okay. That is the primary zone. The second would be anything else in the metalworking space. Okay. In the? In the metalworking space, means metal machining. Okay. Machining, assembly, value-added parts. Okay. But non-auto would be industrial, maybe one of the application you might be looking at. Definitely, 100%. Okay. Got it. Got it, sir. Thank you. Thank you. Thank you, sir. The next question is from the line of Suraj from Catamaran. Please proceed with your question. Hello, sir. Thank you for this opportunity. Sir, first question is, of the CapEx of INR 150 crores, what percentage or what amount would be replacement CapEx and what percentage would be new CapEx? Sorry, Suraj, can you repeat? Sir, of the INR 150 crore CapEx that we plan to do, what amount would be the replacement CapEx and what amount would be for new machineries and equipment? Growth CapEx. Roughly about INR 30 crores- INR 50 crores will be, up to INR 50 crores will be replacement CapEx. Got it. Replacement. Sir. We got to. Got it. Sir, on the current gross block of roughly INR 2,100 crores, what is the peak revenue that we can generate? Close to that number. Got it. Sir, one last question. What was our revenue from the U.S. market, in the base quarter, like last year same quarter? One sec, I will give it to you. Percentage terms, 18% in this quarter versus almost 16% in the previous year's first quarter. Got it, sir. Thank you very much. Thank you, sir. The next question is from the line of Subrata Sarkar from Mountain Intra Company Limited. Please proceed with your question. Hello. Am I audible? Yes, sir. Yes. Yes. Sir, kindly can you share, in terms of volume, what is our current this quarter, whatever we have done, and what is our expectation in terms of volume share versus last year? What kind of volume we are doing? Sir, one, two clarifications. I understand and I also follow your company for a long time. We are operating at a relatively much lower capacity utilization. But still, sir, we are continuously doing our CapEx. In that case, sir, can you guide us like what can be the top level, or what can be the key CapEx that we can do, or what is the next one or two years in which direction we want to make the CapEx and why, basically. Despite having such an underutilized capacity as of now. Vis-à-vis, sir, how much dates in the case we need to additionally take or reduce or whatever, sir? Two, three years roadmap if you can share it. Okay. Can I get your name, please? My name is Subrata Sarkar from Mountain Intra Finance, sir. We also follow your company for a very long time, and we have enough faith on you. That is why, sir, we are asking for some time, roadmap. Your first name, Subrata, is it? Subrata. Yes, sir. Subrata Sarkar. Sarkar. Okay. Yes. We see the capacity utilization is going up considerably, Subrata. Last year we did about 78,000 tons of sales. Now we have done about 20,000 tons in Q1. We expect Q2 and beyond to be much better. Should hover at around 24,000 tons for each quarter, 23,000-25,000 tons minimum in Q2 and beyond. As discussed or as we have been guiding, we would expect to cross the 90,000 ton mark in this year. Next year challenge the 1 lakh 10,000 ton mark. The momentum is on, and we see traction in moving our outputs to 1 lakh tons plus. We will currently from Q2 and onwards, we should be almost at a 1 lakh ton per annum range. Annual range. Maybe just a little more. Capacity utilization is going up. I am happy to say that. From 80,000 tons, this year we should be 90,000 + with a run rate definitely of 1 lakh tons per annum. Okay. Maybe even end the year with much more than 1 lakh tons. Things hold, we should be able to push the run rate beyond 1 lakh. Our internal target continues to hit 27,000 and then 30,000 tons per quarter. Okay, sir. Sir, a small clarification. In that case, whatever revenue growth we are expecting almost entirely from volume growth itself? Correct. The consequence of that is the next part of your questions, is where are we investing in? We are largely investing in the machining side and this year about INR 50 crores on debottlenecking, mostly on the forging side. A little bit of that INR 40 crores will be forging, INR 10 crores will be debottlenecking on the machining side. This debottlenecking will result in greater utilization and more machined products going to customers. That's the plan. Thank you. Sir, most of the CapEx for next two, three years will be from our internal F2 sir, or we will take some additional debt? Thank you. No, we do not plan to increase debt beyond these levels. INR 750 crores- INR 800 crores is where gross debt levels will stand at this point of time. If turnover increases separately. Yeah. Sir, last time. I will answer it. Yes. Once turnover increases reasonably and EBITDA along with it, at that point alone we could consider raising gross debt levels. Otherwise, I would like to see it capped around these levels, give or take INR 50 crore. Not give or take, give INR 50. Right. At this point, hunger for capital, we may not be able to reduce the borrowings, but we want to maintain it as we have announced for quite a few quarters. Okay. Sir, last clarification. Whatever funds we will be receiving because of this land sale, what will be the utilization of that, sir? Go again, Subrata. Yes. Sir, this quarter we have sold our land and we have realized some money, sir. What we will do with this? That will be used to reduce our working capital and our capital borrowings. Okay. Perfect. Thank you. Thank you, sir. The next question is from the line of Nishanth from Shri Dev Abrasives. Please proceed with your question. Hello, sir. Hello. Hello. Yeah, sir. I have a question about the current capacity utilization. Yes. How do you plan to increase it, sir? Do you have any plans of capacity expansion in the near future? I just answered that now, Nishanth, when I answered Subrata. Last year we did 78,000 tons approximate of sale. This year in Q1, 20,200 tons. Yes. Q2 onwards, we expect to strike somewhere between 23,000 and end the year at about 25,000+ tons. Okay. One more question, sir. Are we catering to any EV business, sir? One second. It should mean a run rate of 1 lakh tons a year, and that should set the tone for FY 2027 to reach 1 lakh to 1 lakh 10,000 tons. That's it. Is behind us. Okay. One more thing, sir. Are we catering to the EV business, sir? Two-wheelers or three-wheelers? You say from the EV sub or you're talking from the parent company? No, sir. From the parent company, sir. From the parent company. Okay, fine. That's an easier question to answer. Yes, we are serving products to EV customers or that go, not EV customers, that go into electric vehicles across several platforms. But not two-wheeler, four-wheeler. Okay. Thank you, sir. One line of products goes export, another line is going domestic. Thank you, sir. That is all. Thank you, sir. The next question is from the line of Prajesh Maroo from MoneyCurve Analytics. Please proceed with your question. Yeah. Good evening, sir. Thank you for the opportunity and great set of numbers. One of my questions has already been answered. I have one more clarification. Sorry if this is a repeat question. We are setting up our large space of 16,500 tons. You have already said that its revenue will creep in in next two years. Do we have plan to move towards hyperscaler or any other segment like defense or anything, which you are looking to explore the opportunity with this kind of capacity, sir? We are definitely moving into businesses that support hyperscalers. No doubt, we see that right in front of us, and a lot of business is coming our way. Regarding defense, it is a mixed bag. It is a mixed bag because once we get into the business of defense, it will not stop with just serving the Indian market. We will start looking at capacity utilization. A line may not fill up entirely with the business from Indian defense. So immediately we look at what we can do outside of the country, and that is something which, at a personal level, I am not so inclined to. Thank you, sir. The line for the current participant has dropped. Should we move to the next? Yeah, of course. He will join back if required. Okay, sir. The next question is from the line of Ramesh from S.J. Investments. Please proceed with your question. Mr. Ramesh, your line has been unmuted. Please proceed with your question. As there is no response, we will move to the next question. The next question is from the line of Suraj Malu from Catamaran. Please proceed with your question. Thank you very much. Sir, can you help us understand why did other expenses increase by 35% year-on-year? You will give me a few minutes? I will come back to you on that. Sure. Okay. I do not have the number. One second. My team is throwing it up. Hold on. Sure. Your other expenses will be a combination of a couple of things. One is fixed, what is attributable to the regular other expenses coming in the P&L. It will also have a component of it as export expenses relating to freight. Freight has risen sharply. I am hearing some echo. Yes, sir. We can hear you. Other expenses, what we call as the traditional other expenses, the fixed overheads of running an organization like starting from rent up to fax and paper and computer, IT, blah, blah. That runs at an increase of around 10%. From INR 8 crores, it has gone up to INR 9 crores. Got it. In quick nutshell, the biggest jump in other expenses of around INR 4.2 crores is increase in the published results. Of that, export expenses itself accounts for INR 4 crores. Got it. Understood, sir. That is largely due to rates going around the Strait of Hormuz, for obvious reasons. Understood, sir. Sir, can you help us understand why is the revenue from Europe declining for us? Because U.S. has grown, domestic business has grown. Europe has de-grown volume? Surprise for me. I do not think so. Last year was. Because if we look at the last four quarters, like in Q2 of FY 2026, we were INR 82 crore from Europe, which became INR 89, then dropped to INR 68, and now INR 59. Basically, Europe is a stable market and goes reasonably up and down in tune with demand. Nothing noteworthy from Europe in terms of. No business has been lost. That much I can say very clearly. It is just customer demand that is going up or down. I see. Because, sir, in general, we hear that European forging shops are shutting down, so that should be a large opportunity for us, right? It should reflect in the growth. Yes. Overall, the trend continues. Okay. Sir, in terms of machining, what percentage of our gross block would be the CNC machines? Ladies and gentlemen, the line for the management seems to have dropped. Please hold while we reconnect them. Ladies and gentlemen, the line for the management has been reconnected. Thank you and over to you, sir. Suraj, sir, your question is answered? No. My question was, how many CNC machines do we have, and how much does that amount to of the INR 2,100 crore gross block? Ooh. A tough question, Suraj. I don't have that number across the board. It'll run into hundreds, that I can tell you. I'll note it down. We'll note it down and we'll come back to you on this. Sure, sir. Thank you. I can tell you what it constitutes. I can tell you what our investments machine shop constitutes out of the INR 2,100. If you give me a minute, if you give me a few, this thing, I can locate that sheet for you. That is possible. Please, sir. Yeah. One second, hold on. I will get back to that answer. We have the data, just fishing it out. Sure, sir. Two quarters ago, you had mentioned about reaching INR 3,000 crores in revenue by FY 2030. Do we still look to that number? Yes. All right, sir. Thank you very much. Thank you, sir. The next question is on the line of Gautam Kishen B Mehra from 360 ONE. Please proceed with your question. Thank you for the opportunity. Good afternoon, sir. Trust you are well. Congratulations on a great set of numbers. Hi. How are you? Very well, sir. Thank you. Sir, as we move from 20,000 tons per quarter to 25,000 and eventually to 27,000, 30,000, where do you think or believe your maximum growth could come from? Is it the Indian markets or the European markets or the American markets, or a combination of all? Combination of all. First answer will be combination of all. India today being 63% of our sales, naturally will carry a lot of the tailwind. We are also getting a lot of order wins on the export side, so that also augurs well. Overall, I would say numbers should go across the globe. See, the point is, Gautam, many customers are also setting shop in India, so global customers. So some amount of global business is becoming Indian business. Right, sir. Just a small follow-up. Sir, of the last, say three, four cycles, do you think the combination of all three regions of yours, this is the highest growth you could see? The current cycle. Please repeat, Gautam. Sir, we've had multiple cycles over the last 20 years. The current combination of business being great from India, Europe and America, do you feel the current scenario is the best in the last three or four cycles that we've seen? I think so. Perfect, sir. Thank you. We haven't reached this level of, what shall I say, strength in demand across all customers. At some point of time, some customer, some region or the other has been moribund. This time around, as I told a few minutes back, every cell, every machining line is running to the fullest of its capability. We have tons to go in terms of productivity improvement, at least from my vision. We are working, and my team is working really hard on that. We have a lot to do on the productivity side, even at these levels. That's the headroom that we have. Having said that, today, every line is virtually running at its reasonable fullest. That can be pushed by another percent easily. Understood, sir. In some cases, it takes a lot of work, but that work is anyway, it is a must. It is unavoidable, and it must be done to improve the overall asset utilization of the organization. Wherever, during such quests, we find that we have to debottleneck or replace, we are also considering that. Great, sir. Thank you, and we look forward to fantastic numbers in FY 2027 and FY 2028. Congratulations once again. Thank you. Thank you, sir. The next question is from the line of Prajesh Maroo from MoneyCurve Analytics. Please proceed with your question. Thank you for this opportunity again, sir. Yes. In last two, three calls, you had consistently said that we have taken some cost-saving measures in terms of saving the power and fuel cost, in terms of interest cost, as well as labor cost by putting robotics. If I am right, in one of the institutional calls, you had said that you are also incrementally trying to use AI to become more efficient on the ancillary functions of the company. Given all these things, sir, and with the volume going up, do you see any headroom for EBITDA margin to expand from current 18% level, sir? If yes, then what kind of margin we can see, sir? Thank you. Thank you. Can I get your name, please, again? My name is Prajesh Maroo, sir. Oh, Prajesh, you were there a few. Yes, sir. Rounds earlier or just before Gautam actually. Yes. Yes, Prajesh, there is a scope for EBITDA improvement. I would be naive to say that there is no scope or that we have reached peak EBITDA. There is a scope, and we have to work on it to get to I would say, I quote the previous thing, our target would remain a 20+ goal. We have to squeeze out another 2%-3% from the system. Okay, sir. Thank you, sir. 1% I have the clear visibility for, 1%-2%. But I would say 2%-3%, that should be our goal, and that's a challenge for the team. Thank you, sir. Thank you so much. Thank you, sir. The next question is from the line of CA Garvit Goyal from Serene Alpha Analytics LLP. Please proceed with your question. Hello, am I audible? Yes, sir. Sir, my question on working capital side, like in last two years, we see the working capital around 30% of the revenue. In FY 2024, this is about 23%. In given standalone revenue, any operational contract around INR 4,094. Are we able to convert this cash in trade receivable and other in Q1 FY 2027? Is there any working capital intensity still there, or we can come with 23% as we forecast performance? Very good question, Garvit. We are working on this increase in working capital, and it is our endeavor to bring it down. That is the goal. No doubt about it. Okay. By cutting down on inventory. To answer a previous, I do not know, you asked this question about AI? No, sir. My question on working capital. Prajesh Maroo asked it. Yeah. Yeah. Oh. Yeah, sir. I did not answer that question for Prajesh. I am sorry. One sec. Using the two together, we are using now AI tools to identify where the inventory is getting stuck. Believe me, in the last 7-10 days, it has become a revelation on stuck inventory. So many teams are now, a rapid action force has been formed to dissolve this inventory, if I can use the word, literally. Push it out from us. Which customers want. Second is to get down our money that is stuck in goods. Point well taken. That is one of our goals for the months to come. In answering this, I also would say that Prajesh's question on AI tools, that we are using those effective quite. We have started using at least to crunch the data and see. The insights are amazing, really amazing. Because it is able to map down and say, "This is the data. These are the parts. These are the particular part numbers which are required and in stock, and we need to push these." So it is giving a lot of insights to the management team. I hope in the next few weeks we should see, not I hope, I expect over the next few weeks, this to start yield results. What we want to do as a result of this is to convert our WIP to the barest minimum, say a week's time, and move everything else as finished goods. Overall, there would be a reduction in inventory numbers, but not to insanely low levels. But at some point, I would focus on getting that inventory to a bare minimum in WIP terms, means work in process terms, and push the numbers on, convert all that into what we call as RFD or ready for dispatch. Okay, sir. Good to hear, sir. That's all my questions. Thank you, sir. The next question is from the line of Priyankar Sarkar from Square 64 Capital Advisors LLP. Please proceed with your question. Hi, sir. Good evening. Congratulations on a good set of numbers. Just one basic question. Is there any update on that enabling QIP resolution that the board had passed a few months back? Yes, I answered it a few rounds back. The QIP is largely centered around a sharp opportunity that we might see in market. Certainly it's on the cards, and we are mulling it. At an appropriate time, we would definitely consider it. Sure, sir. Thank you very much, and wish you all the best. Thank you. Thank you, sir. The next question is from the line of Nitya from KK. Please proceed with your question. Yeah, hi. My question has been answered already. Thank you. Oh, okay. Thank you, sir. The next question. Yeah, please go on. You could identify the next caller, please. One of the data that was required was what is our CapEx in the machining side, and where have we put the money in? Overall, we have invested about INR 1,100 crores in the machining side, of which in the last five years, we have put in INR 625 crores, and last 10 years, the number is about INR 1,000 crores. So INR 100 crores prior to 10 years has now become INR 1,000 crores in the last 10 years, and of that INR 1,000 crores, INR 625 crores has been invested in the last five years. I hope I am clear. Just repeating the numbers, about INR 1,100 crores overall on the machining side, of which INR 100 crores dates back beyond 10 years. INR 1,000 crores is for the last 10 years. I am giving approximate numbers, okay? All rounded off last five, 10, 20 crores. INR 1,000 crores for the last 10 years, and of this INR 1,000 crores, INR 625 crores in the last five years. Sir, should we take next question? The next question is on the line of Ramesh from S.J. Investments. Please proceed with your question. Thanks, sir. Thank you for the follow-up. As you already alluded to, sir, you spent around INR 1,100 crores over the last 10 years, right sir? Just trying to understand, how did the capacity develop? About 10 years ago, how much was the capacity versus what is it today in machining today? Machining capacity is extremely difficult to pin down in terms of numbers or in terms of tons, because I can tell you there's one part that is very heavy and requires relatively less machining. There's another family of parts, very popular today, accounts for about a good portion of our sales, which is heavy and requires extensive machining. Then there are light parts that require less. We'll try to quantify this over a period of time. Give us a couple of months. I noted down from the first question that Mumuksh himself has asked. Right from there, this question is persisting. We have a number tracker, but that number tracker is of no use to you guys. We need to quantify machining capacity. We'll work on it and come back to you with a method of quantifying our own machining capacity. I'm sorry that we are answering such an important question with such a vague manner, but that's the way things stand. We'll apply our mind and try to bring some method to that madness, if we ever we can. Understood, sir. Got it, sir. That will be helpful. Yes. Just. Kind of. And one more thing, sir. Coming to the American opportunity, right now, contribution is around 10% or 15%, right? Where do you think this contribution from U.S. is going to expand to in the next years? Because you are very bullish about it, right? It is around 16% now, if I am not mistaken. U.S. should increase by around Should hold these levels, 18% now. It should maybe increase by a 1% or 2$. Because the rest of the world is also growing. This time around, it is not just one zone that is growing in regards to the others. Every zone is reasonably growing, barring a little bit of a blip from Europe. Got it, sir. Just trying to understand just one more thing, sir. Trying to understand the market. Most of our exports go to Europe, right? Just trying to understand, are forged products more used in Europe than U.S.? Is that the fact, or is it just the fact that we have a longer relationship with the European customers than U.S. customers? Could you explain? Trying to get the new. Forged parts are used in any economy. In any economy, forged parts are used. Because without forgings, you do not have motion as we know it today. As engineering stands today, forgings are at the center of where motion is, where transportation is. We know how both are so critical to any economy, right? But what happens is that where these get consumed is the original equipment manufacturers or the tier ones. Now, where are they located? Therefore, where does it get It gets sent to those geographies. Obviously, it will be unwise to say that the rest of Asia is-- It will be downright foolishness to say rest of Asia is not at all into the transportation or the forgings market. The rest of Asia is huge. Japan, China, Korea. But these are all traditionally closed markets as India is. That is the reason why everybody looks at forgings, castings and all into Europe and Americas. This kind of metalworking is popular and strong in the Asian economies and is declining in the other economies. Got it, sir. So basically, U.S. and Europe is where these capacities are reducing, and our opportunity also lies there. I was just trying to understand a little bit. Add South America to that list. Okay. South America also the capacities are declining. Tough question to answer that. Brazil is fighting back. There are a lot of indigenous forgers now coming up in Brazil. A lot are coming up. It is quick to write off and say, South America is a declining market. South America is another market where there is scope. That much I can very clearly say. Understood, sir. I was just trying to understand the roots of why European customers are much bigger contribution in terms of our revenues. I am just trying to understand what exactly, why, because usually it is other way around. U.S. is higher proportion compared to Europe. They are high-cost economies, high labor cost economies. Labor and cost pressures ensure that such businesses go out of those geographies. Got it, sir. But for us, how did Brazil. Posted by the U.S. government in recent times. None of the forging buyers in the U.S. have balked as a result of that. Fortunately for MM Forgings, huge fortune that none of our contracts, we bear the customs duty. That would have been hell otherwise. Since even though there is huge amount of duty imposed, customers are still buying, means that they are not able to One, setting up these capacities is difficult. Setting up a forging capacity, getting hold of people to operate forging presses and processing the parts, it is not easy. It is damn difficult. Even in India, forgings will be a sector that will be difficult to man in the next few years. Man or woman, I can use the word. Currently, we do have a significant portion of women coming into our workforce. Understood, sir. Ultimately, the point of the matter is that these economies will find it difficult to. Also those skills get lost over a generation. If for 20 years you haven't forged, then getting this back is difficult. You can also jump the skill game. Quick this thing in glances, India jumping the GSM bandwagon. We didn't go through the CDMA route and struggle on the mobile phone side, connectivity side. We straightaway jumped into GSM, and we leapt forward by about 20 years. Like that, in the forging side, it is possible to somehow gain, but that will have to come in very restricted circumstances, where there is huge level of automation, and you will have to pour in capital, which means that you need to have customers who are backing you to the hilt. All these are strategic, seismic shifts in the costing landscape, which will be very difficult to unravel. Understood, sir. Just one last question, just trying to understand. You mentioned that because of declining capacity, we're getting orders. Probably our main competition is China. Where do you think we're getting most of our orders? Is it because of declining capacity or China resourcing? We are getting new orders also because customers there are growing their business. They want to source from BCC or LCC, best cost countries or low cost countries, for those respective parts. It's wrong to say. Okay. Those markets are in pure decline alone. For all that you know, the U.S. market may be growing also in forgings. For all that you know, I have no clue. Many orders are coming our way across the global landscape because customers want to buy from India. See, ultimately. Got it. The need at an entrepreneur or at an organization level, to service a business at 18% EBITDA will be a lot higher than servicing a same business at 5% EBITDA. Yes, sir. Fair enough. Right. That need makes for customer satisfaction. Got it, sir. This is my perception over the last 15, 20 years. Sir. That can be very difficult. How much more expensive would it be compared to China? Sorry to interrupt, Ramesh, sir. We will take this as a last question from you due to time constraint, sir. That's fine. Thank you. Thank you, sir. Send your question by voicemail or something, and we will try to answer it for you. Ladies and gentlemen, that was the last question for today due to time constraint. I would now like to hand the conference over to management for closing comments. Thank you all for participating with your time and, as usual, with your intrusive questions, which have given us a bit more of insight into our own business. Hopefully, we will see more of this as we go on. I expect that MM Forgings would do strong in the quarters to come, with about targeting 25,000 tons of sales at a bare minimum in the coming two to three quarters. Reach that, and then look beyond to touch 27,000 and then 30,000 tons every quarter, thereby quickly galloping to a capacity utilization of around 1 lakh 20,000 tons, backed up by strong machining exposure. As we see, most of the orders that we are getting now are all machined and very few are as-forged. That in turn means that capital requirements are more. As we move forward, we see challenges on the cost side, and we also need to do some trimming internally in terms of both costs as well as working capital and inventory, which all came up over the last few months internally as well as in this meeting. Thank you all for your wonderful participation, and looking forward to posting better numbers and much more growth in the quarters to come with the hard work of the team and of course, God's grace. Thank you all. Jai Hind. Thank you, sir. On behalf of 360 ONE Capital Market Private Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines. Thank you.