Please note that this conference is being recorded. I now hand the conference over to Mr. Vishal Rangwala, CEO and Whole Time Director. Thank you. Over to you, sir. Hi, good afternoon to all. Thank you very much for attending this Q1 FY 2024 investor call for Harsha Engineers. With me today on the presentation is Mr. Sanjay Majmudar, who is Strategic Advisor to Harsha, and Mr. Maulik Jasani, who is the CFO. I'm assuming that you have already had a chance to look at the numbers. However, our CFO, Mr. Maulik Jasani, will take you through key numbers after my briefing. As indicated in our previous call, the Q1 numbers are reflecting a overall subdued performance, primarily due to the underperformance of our subsidiary company, as well as difficult market conditions in Europe and China region. However, we continue to perform quite strongly in Indian market, as well as capturing opportunities across the global market. We are working on several new opportunities pertaining to our core segment, which is capitalizing on the available outsourcing opportunity in bearing cages. Again, I'm happy to inform that we have continued to witness strong growth in the segment of large-size bearing cages, which we have reported a 19% growth in Q1 FY 2024 over Q4 FY 2023. Similarly, we are seeing a very strong traction with Japan, Japanese, Japan-based customers, and which is also very encouraging, 20% growth in Q1 versus the previous quarter. We are internally also quite excited about upcoming opportunities in India, from, you know, new projects, which has been announced by our customer, and driven by primarily China Plus One initiative taken by them. We believe that we will be a natural beneficiary for the bulk of the bearing cage requirement for these new projects. Further, as you may be aware, we are also enjoying high market share when it comes to requirement of Indian Railways, and we are quite excited about upside potential, the aggressive capital expansion and growth plan in this segment announced by Indian Railways. I'm also happy to share that we have witnessed early sign of revival in demand for bronze bushings, and we have started seeing fresh orders coming in the current quarter with, you know, very positive forecast in the second half of the year. I'm also, you know, in, in so far as you know, Romania is concerned, we are closely observing the situation, and we believe that demand conditions should start improving from third quarter current financial year, based on various interactions we've had in Europe with our key customers. Similarly, we believe that our China performance also should start improving in coming quarters of the current financial year. In as much as, you know, greenfield project in our wholly owned subsidiary company, Harsha Engineers Advantek Limited is concerned, we are in the final stage of concluding acquisition process of the land, and we will finalize CapEx plan in coming months. Thus, in spite of relatively soft Q1, we feel that consolidated basis for the full-year FY 2024, we should be able to achieve higher single-digit overall growth in top line and a decent double-digit growth in bottom line. With that, I request Maulik to walk us through key numbers for quarter one. Over to you, Maulik. Hello, everyone. Good afternoon. Thank you, Vishal, for the business overview. For the last quarter ended June 2023, for our engineering business at consolidated level, we have achieved the revenue of INR 331 crore against the revenue of INR 325 crore in the immediate previous quarter, and INR 358 crore in the same quarter last year. We have achieved consolidated EBITDA of INR 48.8 crore in Q1 FY2024, against INR 56.5 crore in Q4 FY2023, and INR 55.2 crore in Q1 FY2023. The major impacts on the EBITDA is on account of the RM price increase in the last quarter, as well as the operational cost increase witnessed by minimum wage implementation and the power and fuel increase. In our solar division in quarter one, we have incurred a one-time O&M expenses for the maintenance cost of INR 2.4 crore, which is not supported by the revenue. At our consolidation, there is also a one-time impact of INR 2.4 crore on account of negative exchange rate, loss booking at COGS level while converting our foreign subsidiaries financials into INR. The company has incurred a CapEx of INR 21.7 crore in quarter one, FY 2024, which includes CapEx of INR 10.6 crore as per the IPO end-use plan. With this brief on the financial number, I hand it over to Michelle to take the Q&A. Thank you very much, 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 withdraw yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, please wait for a moment while the question queue assembles. We have the first question from the line of Harshit Patel from Equirus Securities. Please go ahead. Good evening, everyone, and thank you very much for the opportunity. Sir, my first question is on the India engineering margins. They have declined quite substantially on Q-o-Q basis, from 24.5% in the previous quarter to less than 21% in this quarter. I think while Maulik sir mentioned quite a lot of factors for that, if you could explain what exactly happened here. Was it due to product mix change or any further pricing adjustment with the customers? I think that would be very helpful. Hi, Harshit, as I explained, there has not been a significant product mix. Obviously, product mix will always play a role in our kind of a business, where product varieties are many. The major one of the major difference, which I could not explain in my speech, is also on account of the exchange rate impact, which has been negative this time, due to our forward rates taken last year, when price was very high, and that forward rate has realized as a negative as of now. Both that positively impact us. You can see that impact in our other income breakdown, given in our presentation. Right. Understood. Just to add, Maulik, we have also the factor of a reversal of kind of the reversal impact of the pass-through, where your selling prices have actually softened a bit, but raw materials in the later part of the quarter have increased. Again, that would have taken a toll, actually. Yeah, to some extent, that is also there, in addition to what I have said about minimum wage increase and other, again, power and fuel costs. Understood, sir. For sure. Sir, my second question is on our subsidiary performance. I think the revenue performance was quite healthy at the subsidiary level, despite the global macro challenges. If you could give some flavor on both China as well as Romania performance in terms of sales, margins, et cetera, it will be very helpful. Harshit, this is Vishal here. Primarily on the Romania side, you know, semi-finished, even though revenue side things are not too bad, it's primarily semi-finished revenue, basically with very limited margins there. On the, on the finished product revenue, we're actually declining or, or softer versus the previous quarter because of the market conditions there. On the China side of things, again, market was very challenging in during quarter one. However, we were -- we actually did not, not too bad and, and actually primarily loss is coming from the conversion of, you know, inventory valuation due to exchanges, basically. That's overall both remain a challenge to us. However, we are happy to see operational improvements in China and both once the market turns around, we are very confident of, you know, seeing a positive numbers there as well. Understood. Sir, just a small follow-up on that. If you can give some outlook on the energy cost in Europe. Have they started coming down substantially, or are we or, or, or have we already contracted those energy prices, at the, old rates, and therefore it will continue to hamper us for some quarters? If you can give some outlook on the overall energy cost that we are incurring in Europe. We have seen some softening of energy prices in Europe, meaning that they have started coming down. They are not substantially down as yet. Over there, what we have is a, you know, 3-month contract going on. I mean, it's not a very long-term commitment as of right now. And with our customer also, you know, we have, we've actually received most of that increase, whatever we incurred up till now. However, right now, we are also waiting and watching how that situation develops in Europe, and hopeful that this should significantly come down in next few quarters. However, we are, we are actually not sure exactly how it will look. Understood, sir. Thank you very much for answering my questions, and all the best. Thank you. Thank you. We have the next question from the line of Amit Anwani from Prabhudas Lilladher Private Limited. Please go ahead. Hi, sir. Thanks for taking my question. My first question is on one thing on, on the subsidiary performances, which we, we highlighted that Q3, Q4, we can see some revival starting Q3, Q4 onwards. We also mentioned that still we are seeing, you know, weaknesses in the global markets, and still there are challenges. What gives us confidence that this performance will, will start improving, if you could so throw some light? Then at the same time, if you would like to give any guidance on Romania and China as well with respect to full-year, and what we have factored in, in this high single-digit top line growth and double-digit profitability. Yeah. On the, you know, Romania and China, what based on what we are talk- our customer inputs we have received, it gives us confidence that the situation will change in next few quarters. However, it's not for sure. Just to add, Amit, you see what is happening. Overall, if you see last one, one and a half years, Europe has been down, and the indications that are given is that this is such a long down cycle, people have started to live with, bit of higher inflation, and now with inflation seemingly coming under control, the demand revival is definitely on the cards. This is what our analysis and the, the information that we get from our subsidiaries, that is what we feel. Again, I'll be very honest, we don't have a crystal ball to gaze, and this is, sort of a feeling that we are getting. We have to wait and watch, but we are pretty hopeful that it should happen. You know, we don't give subsidiary-wide guidance, so it would not be, you know, possible for us to give any specific guidance. At best, our internal target is that they should turn around, in the second half. This is what we are targeting. Right. So my next question is on bronze bushing. You highlighted that we are seeing revival there. So just wanted to understand more color. Is it the similar customer through which we were supplying bushings? What are the targets, and what is the contribution this quarter from bronze bushings? I'll ask Moulik to give you a more specific number, if that's possible. Having said that, you know, these, we are working with set of fixed customer on this specific product. This growth is coming from these customers only. We are seeing good forecast from them with, you know, good revival in specifically second half and some improvements in demand even happening in second quarter. In terms of, you know, projection, we are projecting for the year, I think, about INR 45 crore or the revenue coming out of bushing. I think we can't share more specific detail numbers beyond that. Right. My, my last question on the Japanese customer, we are seeing pretty good growth from past 2 quarters there. Are we on track for 10%-12%, as you have been highlighting in next 2-3 years there? Is it the contribution coming for the outsourcing of large cages, which you already, you know, also highlighted that we have seen traction in large cages as well? Just wanted to understand more on that. Yeah. Japan-based customers, you know, we have seen a very good growth. Even just, current quarter, or rather quarter one over quarter four last year, we have seen 20% growth. If you look at our commentary, we have been maintaining a very high number, around 20%-30% every time. That's, that's what we see constantly happening. There is a good growth and good pipeline within the Japan-based customer. Now, that, that's primarily not yet happening on the large size cages. When it comes to large size cages, outsourcing, that is, you know, predominantly with our customer based out of Europe and other regions. However, we are hopeful that we are discussing similar large size cages with Japan-based customer, and that also will come there. Very confident and hopeful that in next one or two years, we will see a significant shift on there as well. Yeah, just to add, Vishal, I think 10% in two or three years is a bit aggressive. Let us see. How much should be the contribution now, sir? Are you trying to talk about the wallet share of Japanese customers or- Yeah, wallet share. Wallet share. Wallet share still is in the range of 2%-3% only. Right. Okay. 10% is our three to five year target. Exactly. Three to five is a more realistic number, actually. Great. Thank you and all the best. Yeah. Yeah. Thanks. Thank you. Participants, to ask a question, you may press star and one now. The next question is from the line of Nikunj Doshi from Bay Capital. Please go ahead. Hi, good evening. Just wanted to understand during our last one of the interactions, it was mentioned that solar will be discontinuing once the accumulated tax benefit is taken. Why are we continuing with the business when it's not our core strength? Nikunj, we have what we have shared that we will take appropriate call when it comes to solar business, not necessarily discontinuing, so to speak. However, we are actively considering, you know, all the options. Having said that, you know, as a solar business, we have some challenges, and we know that. However, our endeavor has been and fairly successful in achieving a positive cash flow situation, at least going forward out of solar. We are confident that this one-time cost issue also will have a appropriate counter in future. Right now, that's the challenge we have with solar business. And, and- Two points which are important. We have a few AMC contracts, which we have assumed over a period of time, plus we are focusing mainly on rooftop solar. Thirdly, there is a window of three to four years, which as per our advisors, is the period which is safe enough for us to continue. Therefore, I think at least for next one or two years, we will just keep it low profile and then take a call, as Vishal said, going forward. However, very clear, we are not taking any big projects, no big risks at all, and no major CapEx allocation. Okay. Another thing, this, $1 billion liability, product liability that we announced, sometime back. What is the status of that? Is already paid? Have you recovered from insurance? What is the status? Is it proven that, it was a product mistake, or it, it could be mounting mistake or some other technical issue also for the breakage? See, we were informed about a potential issue, about a year or so back, about this. Since then we have worked with our customer to address, resolve it. We are fairly confident that this is now addressed and resolved. However, when it comes to claim, it was just recently raised by our customer. We have not paid for, now we are now claiming this, talking to our insurance and working with them to address this issue. We have not taken any hit against this, and we are not planning to earn it so far. We are sufficiently insured. Just to add over there, the supply of the same cages has started, regularly since last five to six months also. Okay. Again, is there any other such liability which is outstanding or under this thing, litigation or something? Yeah, we don't believe there is anything else, at least to best of our knowledge. No customer integration. Yeah, this is the only customer integration we had received earlier, which we had informed as part of, part of our DRHP as well. Okay, okay. Just wanted to understand, we are leaders in this space. We are, we have a decent market share, but it's not witnessing the pricing power, I believe, because margins have been fluctuating, and we are seeing margins coming under pressure very often. What is the, can't we pass on to the customers? Because, since we are assuming we are leaders. Yeah, so, one, on the material side, we are able-- we have a clear price pass on mechanism, and we are able to clearly pass that on to our customer. However, what you see a variation is, you know, lag of it, at times, so you, you don't see exact impact in every quarter. That is one part of it. The other part is that beyond material, there is no other pass-through. So when, you know, some of the cost challenges come our way, we, we face that issue, and we have to take that, you know, te- because we have a long-term contract and it's a long-term supply agreement, we have to manage that, and that becomes our responsibility. Ultimately, we, we look at a very bigger picture and long-term picture and say, "Hey, this is what we need to pass through, then we are able to work with our customer," or else, there are bumps sometimes, based on. Q1, whatever we have witnessed, minimum wages, implementation or power, utilities, cost and other things, so that, we can assume it will be passed on in the Q2 onwards, to the clients, or it will still affect? I think it would normalize so that at India level, at least a 20%-21% consistent margin, which we have demonstrated over the last many years, will be maintained. This Q1, you know, this provisioning has come. Again, there were impact of that pass-through mechanism working at times negatively. Mm-hmm. You see? Overall, if you look at the whole year, it will normalize. Okay. Just to add to what Vishal explained on the margins. Mm-hmm. You see, the problem is......that yes, on a standalone basis, Romania and China both look to be dampening the overall scenario of margins. However, the fact of the matter is that these acquisitions and these plants that we had set up in China, first as a greenfield and then as a brownfield, were more strategic in the sense that because of their presence, our profile is actually of an MNC player having multiple locations. Yes. It helps us in de-risking the overall profile of the company. Secondly, it helps us in getting more business in India, which is more profitable. Having said that, yes, we completely agree that China and Romania businesses ought to turn around sooner. It's just a matter of time. Overall, therefore, we have always given an indication that even on a console basis, our target EBITDA is to reach at least 18% over the next couple of years. I think we are working on that. We're pretty hopeful we should achieve it. Okay. Okay. Thank you, and all the best. Thanks. Thank you. The next question is from the line of Jignesh Bhate from IDBI Capital. Please go ahead. Yes, sir. Thank you for taking my question. Just wanted more, some more color, sir, on this gross margins clearly have come in on a consolidated basis, I mean, have come at 44.8% when your usual gross margins, when you go back, hover around 48%-49%. I do understand that you have given some commentary on the COGS, the exchange loss, but is there any other factor contributing to it in terms of raw material increase or some other things? Yeah. Hi, Jason, Maulik this side. Yes. Basically, at the console level, the gross margin is also been impacted because of the incremental sales done on the semi-finished casting in Europe, where we have seen the growth in the Q1, and that is the reason which has impacted the overall margin as well as the gross margin at console level. Apart from the one point we already discussed on conversion loss of foreign subsidiaries impacting the COGS due to inventory conversions. These are the major. Apart from that, there can be some minor impact on account of product mix as well as raw material price movements happening in the last quarter, which is not yet passed through to the customers. Okay, sure. Sure, sir. So this INR 24 million basically is a conversion loss? Overall long-term gross margin- Yeah. Will remain at around 50%. Overall gross margins, you estimated to be around 50% going ahead? Yes. Overall long term, I'm not saying next quarter, but on an average basis. Okay. Okay. In terms of growth, I just wanted to understand, you know, even say, globally or in domestic, you can probably break it up. Like, which sectors are you seeing contributing to growth in terms of... in terms of bearings, goes to a lot of host of CapEx related sectors. Which sectors are you seeing growth coming in from? Yeah. We are, actually, when I, when I talk, domestically... Yeah We are seeing a strong growth, coming out of, you know, railway, side of things. Yeah. As well as, you know, we are continuing to see a decent growth on the automotive side. Basically in India, across the board, but one specific sub-segment is railway for us. Beyond that, you know, we have such a vast portfolio, so I think practically we are touching on most of the sectors and bearing has a lot of interchangeability within sectors, so I can't fully define the sector-specific things. On a global basis, you know, we were seeing a quite challenging environment so far for the automotive. However, we are starting to receive indication of automotive revival. You know, industrial and wind, even though currently soft globally, we are getting some indication of wind revival in second half of the year. That's broadly what we have. Okay, okay. Sir, any incremental orders or any new customers or new, any new orders in the pipeline? We are seeing significant incremental orders. That's something, you know, specifically, I, I would not like to kind of, you know, pinpoint because we are very closely working with our customers on some of the various projects, and, you know, they, they continue to give us more orders on the piecemeal basis. There are couple of big projects and orders in pipeline, and as and when we have, you know, proper LOI or indication from customer, we will announce it as per the requirement. Otherwise, I think, overall, what I would like to say that our order pipeline is very strong. Just, you know, over last quarter, we have actually absorbed significantly higher amount of new orders, which, considering our product development and, you know, realization cycle, it will take, you know, six months to develop and 1 to 2 years to mature. There is a, there is a whole cycle to it, and that gives us a good confidence of about our future. Beyond that, I can't share much. Okay, sir. Sir, just my final question, that negative exchange loss of INR 24.2 million, could you just throw some more color on it? What exactly has happened there? Of course, I mean, just relates to Rupee depreciation or some color in terms of that. Yeah, it is on account of the rupee depreciation and Chinese yuan appreciation. As you know, on consolidation, we have to convert the financials of the foreign subsidiaries at an average rate, except the balance sheet item at a opening closing rate. Change in stock has this impact of INR 2.42 on the COGS front, because we have to convert the inventory at the respective rate of opening and closing. Okay, sure, sure. Thanks. Thank you. That's, that's all from me. Thank you. The next question is from the line of Ashish from JM Financial. Please go ahead. Yeah, good evening, sir. Sir, my question is, first, I mean, you did touch upon the guidance, but, can you just split that into, let's say, what are you looking for the India business in terms of revenue growth, and margin, and, and what are you looking at the individual entities of Romania and China in terms of, a top-line guidance? See, it will be difficult for us to give you very specific, individual, you know, numbers. However, one, I would mention one thing that we are, we are looking at growth both in Romania and China, which may be little subdued versus India, which would be little higher side. You know, on the margin side also, we have kind of mentioned that, you know, we are working on in Romania and China, you know, breaking even, and, and, you know, India growing the bottom line. The overall what we have given that stands, and then, you know, these are some of the additional colors, but beyond that, I'll not be able to share. Sure, sir. Also, sir, if you can just help with, you know, some balance sheet numbers, like what could be the net debt as of June? Net debt as on June, is INR 248 at a standalone level. INR 248 crore as standalone level. INR 248 at standalone, and consolid, sir? Net borrowing, net negative, right? Yeah. Net negative, huh? Yeah. Negative, yeah, sure. Right. There's no debt because of the proceeds still lying with us. Correct. Net negative. At consolidated, net -INR 177. -INR 177. Sure. Lastly, sir, there have been some instances of, you know, failures in the overseas, you know, in some of the windmills, et cetera. Some of the, you know, larger OEMs have been facing some sort of investigation or issues. You know, where do we stand as in, are our products under any kind of, you know, sort of scrutiny or any investigation, or have you heard anything from our clients, anything in that regard? No, as of right now, we have not heard from any customer related to any new investigation or any scrutiny. The one which was historical in past, and that's what we have informed, and that's what related to that we have received the recall, you know, cost or claim. That's, that's all there is to it right now. We are fairly confident there is nothing more in, like, in all the new pipeline and all the future products. We are fairly confident we have corrected that issue, and don't see any... I mean, I'm not able to predict future, but right now, we don't have any other information on that. That too, Vishal, I mean, that too, it was pretty old. It is not recent. Correct. This, that claim is related to supplies which happened between 2018, 2019 to 2020, maybe up to 2021. That's it. Right. Exactly. Sure. No, got that, sir. Thank you very much. Yeah. Thank you. Before we take the next question, a reminder to all the participants, anyone who wishes to ask a question may press star and 1. The next question is from the line of Sabyasachi Mukerji from Bajaj Finserv Asset Management. Please go ahead. Yeah, hi. Thanks for the opportunity. You know, going bit deeper on the, the growth guidance of, you know, high single digits that you have mentioned for FY 2024. You know, if I look at your commentary and the, and the, you know, presentation, and, and, and the initial commentary also, you are, saying that the India continues to be, you know, showing good, prospects in terms of growth as well as Americas. Domestic market, especially is, you know, showing good growth prospects. On the other hand, the exports market, especially in the European market, is little s- a bit subdued. If I were to kind of, you know, split the growth numbers between, let's say, domestic exports and China, Romania-. You know, largely, the numbers that I get is India domestic should grow probably somewhere around, you know, mid-teens in FY 2024, with exports probably going at, you know, mid-single digits and China, Romania at lower single digits. Is that a fair assumption or fair calculation that I have? Yeah, I mean, I, I couldn't hear you very clearly. I think, yeah, yeah. I hear the 2nd part, yeah. Your voice got fainted, but I understand what you're trying to say, that India domestic should grow at around mid-teens, so maybe definitely higher than 10%. China and Romania, we lost it, but probably you meant that it could be minor degrowth or it would be at best, flat. Am I right in understanding your question? Yeah. China, Romania would be largely flat, and probably exports would be somewhere around low to mid-single digits, given the kind of- That's right. you know, environment. You're right. Right. You know, on the back of that, if I just look at the Q1 numbers, you know, domestic, India domestic has, you know, Y-o-Y basis has declined by 9%. If I look at the Q-o-Q, that is Q4 to Q1, the growth is also little subdued at 7%. Right. Do we expect a much, you know, kind of higher recovery at the in the H2 of current fiscal? I mean, how are the environment, how are the orders, you know, are there do you have that confidence that probably H2 will be much better than H1 of current fiscal? While Vishal will take care of the second part of the question, Y-o-Y, the only problem was the commodity pricing. You know, if you look at our Q4 FY 2023 annual results call, we had indicated that there was actually a little decent growth on the volume terms. However, if you look at Q4 versus Q1, the pricing is more or less at a comparable level, and therefore there is a modest growth. Secondly, Q1 always is not very strong. It is a function of many factors, I think Vishal will elaborate that how he feels more confident, particularly on the H2 part, because of the order intake and whatever indications we are getting. Over to you, sir. Yeah. Thank you, Sanjay bhai. Correctly, Sanjay bhaii mentioned comparison versus last year, as a whole, price adjustment mechanism into picture. On the talking about H2 going forward, definitely just based on, you know, our customer indication, we are sharing that, you know, we feel the H2 to be better. On the, you know, partly, the recovery, what you mentioned, Q1, is just 7%. Yes, that part recovery will happen in Q2 based on, you know, various, various factors in the market, including expectation of wind revival. We are seeing some good forecast from our customers, as well as, new order wins from our customers. We are actually, while, you know, market, demand sometimes goes down, we continue to win more, new product orders from our customer, and that also supplements, you know, our growth. Combination of all factors, including new product wins and, forecast and things like that, we are fairly confident of a good H2. Sir, just a clarification. In the previous participant's question's reply, you mentioned that, you know, you saw significant orders probably in the last quarter, Q1. Correct me if I'm wrong, and probably this will take another six months to get into production, and probably the ramp-up will happen and the peak, you know, the optimal sales will, you know, take around 12-18 months from now. Is that a correct understanding? Right. That is our normal cycle. When what confidence I'm deriving from is, you know, the order wins, which has happened over six to eight months back, and those products, you know, materializing. When we say, you know, they after six months, these products are generating revenue, even though they might take one or two years to get to their full potential value. It's a combination of all those factors. Your understanding is correct. However, this confidence is coming from, you know, previous wins and previous awards we have received from our customers. Can we quantify any, any number on the order inflow, let's say, last 6 months? What, what kind of order inflow that we had? No, it will be not fair to quantify that number. We don't intend to share that. It comes into the Q3. Okay, last question from my side. This is more of a clarification on the China, Romania piece of the business. Are we looking at any positive contribution or positive EBITDA this year, or it will again be some loss, or probably a best case will be a break even? Definitely a positive EBITDA contribution this year. Even with the quarter one loss, our endeavor and internal target is to at least break even, if not do better, when it comes to these two subsidiaries. Got it, sir. Thank you. That's all from my side. Thank you. Thank you. We'll take the next question from the line of Shirom Kapur from Prabhudas Lilladher. Please go ahead. Hi. Thanks for the opportunity. Just wanted to follow up on the question regarding, you know, Romania and China's margins. In the last quarter, we indicated that, you know, margins in Romania and China could, going forward, improve to about 5%-6% in Romania, you know, on account of reducing the share of the casting business from about 80%-85% to 60%-70%. Similarly, in China, we can see margins going up to 12%-13%. You know, given the weak, you know, profitability in Q1, where I believe the Q1 loss was as much as the full-year last year, are we on track with this long term, or are we gonna see, like, a delay in this margin improvement, given the, you know, now you're only expecting about a break even or so this year? See, when we were talking about that number, we were talking about EBITDA margin, and we are still targeting those numbers, but obviously the quarter one does create a challenge. So that being the case, specifically on the China side, I think there is, we feel more confident considering the fact that, in that loss, you know, we had that currency conversion impact, which was explained by Maulik earlier. That gives us confidence that, even though first quarter results are what they are, we are hopeful of improving from here on. Even in Romania, same, same story. Yes, there is an impact of first quarter results. Just to add very quickly, I think 5%-6% is a little longer term, which cannot probably come on an overall basis this year, but definitely it will be improvement from Q1, maybe somewhere closer to that. That's what we are targeting, but let's see. Understood. Thank you. Next question regarding, you know, the employee cost figures. So you mentioned there was a one-time wage increase, but this should normalize over the year. So I just want to understand the Q1 employee revenue, employee cost that we saw, is that something we can annualize for the rest of the year as a trend going for the rest of the year? Effectively, you can consider, annualize, but as Insa has mentioned, we work on the regularizing this by creating various projects within the company. We follow very aggressive cost improvement projects, as well as converting the annual to automation, so that we can rationalize on the manpower cost, and that will also have a positive impact during the year. It will not definitely been seen in the first quarter itself, but yeah, that, that activity has already been started within the organization. Okay. And you mentioned at the in your opening comments that the margin declined in India business due to, you know, raw material costs increasing and, and the, the employee costs, and also you mentioned power costs going up. You know, from what I understand that we started that hybrid power plant to kind of help reduce our power costs. Are we not seeing that impact, the benefit of that yet? Are we going to see it later this year? The hybrid power cost benefit has started accruing. Our last year cost of the real power consumption has gone up. Yes, you are right, on the part of hybrid power, we got a benefit. Net, net level, it is almost 50. On account of this renewable energy, we are not 100% coverage when it comes to our internal consumption. Obviously, that there is some benefit, but again, that there is additional cost for part which is not covered through the renewables. Okay, understood. That, that's helpful. Just my last question is, you know, just I want to get some color on how the stamp, precision stamp component business did. You know, what were the sales in this quarter growth, and what's our growth outlook for FY 2024 and for the next couple of years in this business? Yeah. Yeah, stamping also, I think I failed to mention that we are seeing a significant traction on that stamping components front. In terms of, you know, order wins and pipelines, you know, very aggressive growth we are projecting. With stamping, good growth in the range of about 15%-20% is what we are expecting in FY 2024. And if I compare with, you know, Q1 versus the last year, we have seen, I believe, like, Last year average is around 17%. Yeah. Around we grew about 17% versus last year in quarter one. I think we are expecting that we'll maybe improve that or continue in that range, what we are projecting right now. Okay, got it. Thank you so much, and all the best going forward. Thank you. Thank you. The next question is from the line of Sabyasachi Mukerji from Bajaj Finserv AMC. Please go ahead. Yeah, thanks for the follow-up. Just a question on, on a bit longer term. So you mentioned in a, in a the earlier calls, that medium to long-term growth guidance is somewhere around-... 15%-16%, if I'm not wrong. Depending on the order pipeline and the order wins, and the environment that you see, from a medium to long-term perspective, does that hold, what is the kind of thoughts on that? Yeah. Definitely we see that holding, and, you know, feeling fairly confident of that, you know, executing that. Specifically within that, we are seeing a very strong growth in India, basically. For, this is for our global demand, not only demand in India, but also, demand in India projects what we are working with our customers, and all the, you know, various plant setups, CapEx amounts by our customers. We are seeing a good traction for those supplying into those, you know, demands. Yes, those numbers still hold true and fairly confident of achieving. When you say good demand, strong demand in India business, so is it only the domestic business where probably you are supplying to the, you know, international clients having set up, plant set up in India? Or is it also because exporting to, you know, other plants of, of these, you know, global giants, bearing giants? How is it? Is it both or, or only domestic? Immediately when we talk about we are seeing a good number in India, we are talking about, you know, domestic consumption, and primarily our customers are supplying to domestic market. Our customers also supply using their plant in India to a global market. Again, I don't have a very definite commentary, but, you know, we feel that they, they might be also seeing a soft demand from their global counterpart. However, when we talk about, you know, medium-term growth, we are talking about both Indian domestic market as well as our customer setting up facility in India to supply to the global market. We are seeing that mid-term very strong, and that realizing positive realization to Harsha also and to definitely our customer also. Just to add, we are also, I think, maintaining the export momentum out of India, so that around 50%, 51%, 52% seems to be, like, maintainable. Yes. Correct. Got it, sir. Thank you. Thank you. That's all from my side. Thank you. Thank you. The next question is from the line of Jason Soans from IDBI Capital. Please go ahead. Yeah, sir. Thanks for taking my question again. I just wanted to, if I mean, if you could just provide some color, actually. I mean, there has been enough questions regarding the Romania and the Chinese operations. In, when I go back, you know, if just look at the subsidiary operations, you know, you have had good margins of 7.5%, 10% going FY 2021. From that's been on a decline, FY 2023, EBITDA margins were around 4%. I'm just talking about the subsidiary business, which predominantly consists of China, China and Romania. You're going ahead, how do you see it, you know, by, by what, what is a reasonable or a realistic margin we can take going ahead for, you know, 2024, 2025? What are you expecting? I know there are a lot of global headwinds here, but still a realistic, what, what would you target? Yeah. In Romania, we, there are 2 pieces to the business. We have a semi-finished business and a finished cage product. Semi-finished is a single-digit EBITDA margin business, whereas cage is a respectable 15% plus EBITDA margin business. On a blended basis, medium term, we are, we are trying to achieve about, you know, 8%-9% EBITDA margins from Romania. Similarly, in China, we are, a cage business has again another 15%-18% EBITDA margin on an ideal basis. We, we are, from a cage business point of view, trying to achieve that 15%-18% EBITDA margin business. In China, we also do a little bit of trading, so depending on what trading volumes are, because we, we actually partially, for most of our products going from India to China, we sell it directly, but partially we sell it through our Chinese subsidiary, which may have an impact depending on that quantum, impact of diluting the overall Chinese margin. Having said that, right now, based on what we know on that blending, we expect to achieve about 12%-14% EBITDA margin in China, including traded business. That's the directionally what we are looking at and feeling fairly confident in, in next two years or so we will make that. Sure, sir. Standalone, I believe you must be targeting the usual 16%-17% margins in the standalone entity. Standalone is 20%+. Yeah, standalone? 20% plus EBITDA margins, you know, sustainable base. India? India, yeah. India, India, 20%. Yeah, yeah. India. Engineering, India Engineering. Okay, okay. Okay, sure. Sir, just for my understanding, just would want to know, I mean, in terms of proportion, when you look at, of course, this large-size bearing cages are a big revenue growth avenue for you. Just as a proportion, ballpark number, how much would be probably outsourced at this point in time and how much do the companies do it in-house? Is there a ballpark number to it and how it can grow? Yeah, so, I again, this is my judgment. I don't have a, you know, report out there which can support me. However, roughly our estimate is that, about, 20%-30% is outsourced. 70%+ likely is insourced today by our customers. 30% is outsourced, or 70% is insourced? Yeah, 20-30. Yeah. It will depend on customer to customer, of course. Okay. Okay. Okay, sure. Okay, Sir, just lastly, just one question I want to qualitatively would want to ask. Now, of course, you have a business coming in from the global bearing giants, Schaeffler, SKF, and other players. What I've come to understand is Japanese players are actually a kind of, because being Asian and they have very, you know, what you say, very precision engineering roots or a big, rich tradition of that. They tend to be a little hesitant on outsourcing. What... That's what I've, you know, gathered. They tend to be a little hesitant on outsourcing and other things, and hence, you know, converting Japanese customers would be, could be an issue as well, or probably a hindrance, or it could be slow. Just wanted your comments on it, as regards to, you know, the global bearing giants, plus, as compared to the Japanese customers. Yeah, I think your, your assessment is correct. They tend to be very slow. We started working with Japan, Japanese customer, actually, in Europe and U.S., and last 10-15 years, and only last three, four years back only, we started supplying them into Japan. This is relatively a slow process, but however, we think that we were, you know, last one, one and a half year, we have been at the inflection point where we are seeing the base also increase significantly and our growth percentage with them, as we have been sharing about 20%-30%, you know, it's going on. We think that, that will continue because we see a good value provided by Harsha in variety of aspects. Challenge here is that our number 1 competition is a Japan-based company called NKC, and they have very strong hold within Japan, Japanese customers. A combination of all that factor, it's a slower process, but fairly confident of getting there. Sure, sir. Thanks. Thanks for answering. Thank you. Thank you. The next question is from the line of Shreya Jain from Niveshaay. Please go ahead. Good evening, sir. Thank you for the opportunity. My question is regarding the wind energy sector. I'd like to know what are the growth opportunities for Harsha from the global and domestic wind energy sector? My second question is from the railway sector. Do we need or any order- Ma'am, your voice is breaking. Could you please use your- Yeah. to ask your question? Hello, is it audible now? Yes, ma'am, please continue. Yeah. Good evening. Thank you for the opportunity. My first question is regarding, wind energy. What is the- Excuse me, ma'am, I'm sorry to interrupt. Ma'am, your audio is feeble. We are not able to understand what you're speaking. Just a minute. Let me come back with you. Sure, ma'am. Thank you. Yeah. Participants who wishes to ask a question may press star and one now. I think, Moderator, if we don't have any further queue, I think we had a decent dose of questions, so we can close the call. Sure, sir. Thank you. Yes. Ladies and gentlemen, we'll take that as the last question for today. I would now hand over the call, conference to the management for closing remarks. Over to you, sir. We can take Shreya's call. Yes. Yeah, we can take quick one last call, and then- Okay. Ask question, and then we can- Thank you. Is she assembled back in the queue? Yes, sir, she is back in the queue. Yeah, please, then take that as the last one. Thank you. We'll take the question from Miss Shreya Jain from Niveshaay. Please go ahead. Hi, good evening. Am I audible? Yeah. Yes, ma'am. Yeah. Thank you for the opportunity once again. My question is regarding the wind energy sector. What is the global and domestic outlook growth opportunity for Harsha in the wind energy sector? Yeah. For wind, you know, Harsha participates in a multiple way. One, we supply bronze bushing to wind industry. Through our customers, for bearings, we supply significant bearings in this market. That happens across the globe, out of our facility in Romania, out of our facility in China, as well as significantly out of India. We supply a variety of cages as well as bushings. Right now, what we are hearing from our customer is that wind market is a little soft, and it will likely grow in the second half of this year. I'll come back. From a opportunity point of view, India is, you know, seeing a significant wind market, supply chain base. We see a lot of opportunity within that in India, as well as, you know, our plant in Romania caters to all that opportunity. Specifically, Romania is focused on larger size cages, which go primarily into wind market. That's one of the reason we are seeing a little bit soft finished product demand in Romania. Okay, sir. Thank you. My second question is regarding the railway sector. Do we have any leads or any orders in the pipeline? Yes, we have a very strong market share within railway when it comes to bearing cages. We, we are seeing a very good traction. We are seeing a increased demand out of specifically Indian Railway. We are supplier to global, you know, rail bearings globally for our customer, so that is also there. Also beyond the cages, certain set of stamping components we supply to our customer, which goes into assembly of railway components, and that is also, you know, growing demand for us. Okay, sir. Thank you so much, and all the best for the future. Thank you! Thank you. Ladies and gentlemen, as that was the last question for today, I would now like to hand the conference over to Mr. Vishal Rangwala, CEO and Whole Time Director, for closing comments. Over to you, sir. Thank you. Thank you very much, everyone, for attending this call. And we hope we were able to give you, you know, highlight of various, you know, aspects of our Q1 result, as well as, you know, how we feel confident about mid to long-term growth story and opportunity we are presenting. And appreciate you attending this. Thank you. Yes, thank you, and have a nice evening. Thank you. Thank you. Members of the management-