Ladies and gentlemen, good day and welcome to the Harsha Engineers International Limited conference call. 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 touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Vishal Rangwala, CEO of the company. Thank you, and over to you, sir. Hi, good evening to all of you, and welcome to Harsha Engineers quarter two H1 FY 2027 post-result update call. As per our normal practice, I will just talk through how we look at these numbers and what are our thoughts, and then Mr. Maulik Jasani will take us through more details in the numbers. However, I am assuming that you would have had a chance to go through the numbers and the presentation. If I have to summarize our quarter one performance in one sentence, I will say it was a business as usual and largely on track. However, let me touch bases on our key business vertical, starting with our India engineering business, comprising of Harsha Engineers International as well as our wholly owned subsidiary, Harsha Engineers Advantek. As you will see from the numbers, we have witnessed a strong top-line growth over 24% in quarter two, with an equally strong 23% in first half on YoY basis. This growth has come more or less from almost all the key verticals, including cages, bushings, as well as stampings. Talking of cages, I am happy to state that we have witnessed a decent demand traction both from industrial as well as automotive segment in India. Similarly, on the export front, we have witnessed continued strong demand coming largely in industrial segment from key geographies of Europe, U.S., as well as Japan and other countries. Again, as announced earlier, the progress on the new insourcing, outsourcing project that we had announced last year is quite good, and we expect the commercial sales under this project to commence sometime in quarter three and quarter four in the current financial year. The real visibility will start coming in quarter four. Although the sales relating to this project will start in a gradual way, at peak level, the sales can reach a run rate of around INR 75 crore per year. Also, we are working on couple of other insourcing, outsourcing project from Europe and North America markets. The first project is relatively small, but it is at a fairly advanced stage of development, and we expect the commercial sales to also start somewhere in financial year 2027-2028. Second project where we have just commenced initial development and which could start in somewhere financial year 2028-2029. Again, under the cage category, we have a strong demand visibility for large-size cages, and we expect a significant ramp-up in sales in this segment in second half of financial year 2027, which will result into an overall annual growth of at least 20% in the current financial year in this segment. Similarly, we have started witnessing a decent growth in sales of cages to our Japan-based customer. Though it is slow, it should definitely pick up speed in coming quarters, which gives us confidence of over 10%-15% annual growth in this segment. Lastly, as I said, export from India have remained quite strong with our H1 exports at around INR 280 crore against annual export of INR 480 crore achieved last year. Talking of now bushings, as I said in the earlier call, I am confident that we should be able to attain about 30% growth in current financial year in this segment, aided by good demand visibility from key windmill gearbox manufacturing companies. We have also developed newer designs of bushings for these customers. We remain very bullish about this segment going forward with our target annual sales of annual sales target of within three, four years to about INR 300 crore in some time. Similarly, talking about stamping, we are also seeing a very good traction for our key stamping components, which include certain specialized railway seal inserts, AC compressor components, and certain other automotive components. We have recently introduced a new category in AC air conditioning segment compressor, which is known as accumulator, which is having a very good demand potential. Thus, we are seeing a fairly confident of seeing over 30% sales growth in this segment in this current financial year compared to revenue sales of about INR 72 crore we achieved in FY 2026. We believe that new products that we are also in a process of developing this segment, the target annual sales again in this segment should reach about INR 300 crore over next three, four years. Thus, to conclude, I can say with satisfaction that our India engineering business is delivering satisfactory performance almost on all fronts. Now, coming to Harsha Romania, we have internally worked out a strategy of downsizing the operations and correspondingly also reducing the operating cost. However, we will continue to focus on increasing the sales of finished cages out of our Romania facility. We believe that this will be a good viable model, a medium-term strategy where our target is to arrest operating losses incurred in Romania, which we believe we can achieve by end of current financial year. Therefore, we feel that the next financial year in Romania may contribute a lower level of sales, but it should still be relatively positive contribution to profitability is how we are looking at this. Now, talking of China, through quarter two FY 2027, we are a little soft on sequential basis as compared to quarter one. It has still shown a decent growth on year-on-year basis, and we expect a reasonably strong performance to continue rest of the year. Though currently EBITDA in China is a single digit, we believe that it should improve going forward given the relatively stable demand scenario in China. Our expansion projects are progressing quite satisfactorily. Thus, the Advantek expansion project involving substantial expansion of capacities to manufacture bushings, stampings, as well as large-size cages is on track. It should commence production in next few quarters. Similarly, China brownfield expansion where we are creating capacities for manufacturing of steel cages for industrial and auto sector, that should commence production somewhere in quarter three FY 2028. To sum it up, I want to reaffirm the previous growth guidance given in the earlier calls that it is to say on a full year basis FY 2027, we should achieve a sales growth in mid to high teens in India, while on consolidated basis, it could be anywhere between 10%-12%. At the same time, a word of caution. I want to state that historically Q3 tends to be a little soft in terms of demand considering fact that almost all large international buyers whose accounting year or calendar year ends in calendar year, so it tends to show a little bit slow. They tend to slow down their purchase a bit. Thus, above guidance should be considered to be on a full year basis. I would like to thank you all for continued confidence in Harsha, and I wish you all the best. With that, I ask Maulik to take forward the presentation and the numbers. Please, Maulik. Thank you, Vishal bhai. Hello everyone and good afternoon. For the quarter ended September 26, engineering business at our consolidated level have achieved top line of INR 428 crore against INR 363 crore in the same quarter last year and INR 421 crore in the immediately previous quarter. We have achieved consolidated EBITDA for engineering business of INR 81.1 crore for the current quarter against INR 63 crore in the same quarter last year and INR 69.8 crore in the previous quarter. On EBITDA margin, we see a consistent increase for standalone as well as consolidated level based on our last few quarters performance. In solar business, we have achieved revenue of INR 11.9 crore and EBITDA of INR 0.73 crore in the last quarter. Solar business has still good order level due to PV cell relaxations from government up to December 26. Overall working capital at our consolidated level is around 135 days against 139 days in the same quarter last year, and 116 days in our previous quarter. We have incurred CapEx of INR 35.6 crore in the last quarter. For the last quarter, revenue from bushing was around INR 42 crore, stamping was around INR 23 crore, and LSB was around INR 14 crore, which has grown by 26%, 19%, and 35% respectively compared to the previous quarter. While revenue from Japanese customer was around INR 24 crore with a growth of 15% against the last quarter. With this brief note on the financial numbers, I hand it over to the operator to take the Q&A from participants. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone 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 comes from the line of Nisarg with Pkeday Investment Office. Please go ahead. Am I audible? Yes. Thank you so much, sir, for the opportunity, and congratulations on a good set of numbers. The first question would be on the Harsha Romania business side. So, we have been facing a lot of issues in terms of profitability over there, and now in the next year, we are planning to reach operating profitability, but will it also convert in our net profits as well? Yeah, it will be too premature to say that. We are very positively looking at it, hopeful, working on improving the cost structure as well as a few other improvements, but it depends on variety of factor. W e are fairly confident on creating operating improvements, and then full profitability maybe depend on multiple factors. We will keep on updating on quarterly basis. Okay. What is the journey ahead for Harsha Romania if the growth is not coming? What is our plan and strategy as a business to look at as Harsha Romania? We see Harsha Romania, we are continuing to grow our cage business there. Having said that, because we are seeing lot of cost-related challenges, it is very difficult to fully clearly answer this question. We are evaluating, and then we will update as soon as we have a clarity on that. Got it. In terms of China, what is the growth that we are seeing in the next few quarters and the year to come? It was recovering and that was provided, so, how are we seeing it now? So, in general, we are seeing a moderate growth for our current portfolio and current business, about 5%-7% is what we estimate. However, as and when our new capacity comes online, which brings in new portfolio of product, that will accelerate the growth there, basis of new introduction of new production, new products, and so on. We are right now scheduled to bring that capacity online from third quarter FY 2028, so second or third quarter FY 2028. So that's when we are hopefully seeing additional growth coming in. Thank you. Thank you so much for answering those questions. I'll get back in the queue. Thank you. The next question comes from the line of Varun Jain with Dolat Capital. Please go ahead. Yeah. Hi. Good evening, Vishal ji, Maulik bhai, Sanjay bhai. Good evening. I have a couple of questions, sir. Starting with, sir, for this quarter, a very strong gross margin, 51.7%, and it has increased versus all the other companies in this space. All the bearing companies are seeing a margin decline. Is this because of some price pass-through we were able to do, or is it because the solar share was low? Yeah, it is mix of both, Varun. As you rightly mentioned, major reasons are similar, mix of both. There has been some pass-through because of we have seen last six months increase in the brass prices, which is copper and zinc. S ome portion of that has already been passed through. As you know, our mechanism is very standard. D efinitely this quarter, solar has contributed on a lower end of the overall top line. So, we see a better margin at a console level. So, this kind of a margin, especially on the EBITDA level, so we are at, if I take the India engineering business, it was at 23.7%. I t will stay at this level and maybe increase a little for the coming two quarters? As we have said, at a blended level, we expect margin to be sustainably 20%+ at a longer horizon rather than a quarterly review. A pparently, it also looks like that we have a better product mix performing at a overall the India engineering business, and we see that permanent shift on a little higher side of the margin. It is little early to say what is a fully stable margin, but yes, since last few quarters, we have seen better margin than the blended guidelines we are giving. W e see 100 basis point, 200 basis point increase. Around 22% is more steady state kind of a margin we should take, Varun. Sir, without other income, what will be the number? Varun, we do the reported EBITDA margin discussion. Yes, you can do the rest of the. Okay, sir. No issues. Secondly, I think a lot of the bearing companies have been very aggressive on the CapEx. SKF is doing close to 500, SKF India 500, CRSKF Industrial 800, and then Timken has done in Bharuch INR 700 crore or so in SRB, CRB. Are we capturing 100% share for cages for all these companies as of now? Yeah, we believe that we are capturing a very large share of that incremental business, and we are seeing good traction in the market for that. I don't have an official or exact number, what share and things like that. Maybe just to put it that knowing our relationship with customer, we are not going to lose our market, sir. It will enhance. Sure. For these also, like for these higher value, say CRB, SRB, industrial bearing, is the cage just 5% of the TAM, or is it a higher number? If it is a revenue potential of INR 700 crore, what is the cage TAM? Is it INR 35 crore, 5%, or is it higher for those? Yeah, sir, I think it is difficult to fully answer properly that question, but we still estimate it will be around 5%. There are some increases and decreases depending on a product size and things like that. I n general, you can still take it as 5%. Yeah. Got it, sir. Secondly, on stamping has registered a very healthy growth. Will you reach the Earlier we guided that we will reach the INR 150-INR 200 annual revenue run rate by end, basically three, four years. Now, it appears we can reach that in FY 2028, next financial year itself. Is that possible? What percentage of stamping sales is due to this new accumulator product? We will not give the breakdown further on the stamping as of now, Varun, considering that we have just entered this business and we want to cover the larger scale later on. Y es, I believe that, and Vishal, we can add here, but I believe that we will definitely prepone some of the achievements on the stamping front, considering the current volume what we have. Exact timelines, whether it will be FY 2028 end or H1 of FY 2029, we will know later, and we will update you further. But yes, we see that there is growth. Sure, sir. And sir, just last, solar business, what is the FY 2027 and FY 2028 revenue guidance? Similar what we have given, in the range of INR 150 crore-INR 200 crore. Y es, this is a more cyclical business and governed by the government norms, both import as well as subsidy. So that we have to be watchful. Sure. I will come back in the queue. Thank you. Thank you. The next question comes from the line of Harshit Patel with Equirus Securities. Please go ahead. Thank you very much for the opportunity, and congratulations on a great quarter, sir. Thank you. My first question is, our first half revenues are up about 21% YoY, and the India engineering revenues are up more than 22% YoY, ahead of the low to mid-teens and mid to high-teens growth that you had guided during the last quarter, and what you guided today as well. Sir, this would imply a very soft second half. Is this what we are seeing, or there could be a material upside to our guidance based on the product pipeline, projects, visibility that you have, and you are just being a bit conservative on the guidance front? Some color on this will be helpful. Yeah, Harshit, basically, if you look at our last year, third quarter and fourth quarter, they were already started showing sign of good growth. Considering that, we are saying that relatively, we have to be cautious of the relative to last year numbers. Right now, we see a pretty decent growth, but then obviously, there are certain headwinds and challenges as a market, bearing market, as well as what we face. We are a little bit conservative, cautious as well. Harshit, just to add, I don't think there is anything negative implied here. What Vishal and the whole team believe that we should be little conservative considering the fact that in the past, for example, on an overall basis, China is little soft, but it will grow not exactly in the same proportion as India. The biggest challenge is Harsha Romania. We have some specific plans for Harsha Romania, which we will unfold over a period of next maybe one quarter or so. W e have hinted about some downsizing, and that is where, on an overall basis, we don't think that we should be able to. Harsha India will 100% grow at a higher rate. Harsha Romania will actually be on the negative side. We are saying that [Foreign language], on a consolidated basis, 10 to 12, that is what Vishal has guided. India will definitely grow stronger. We are not implying anything negative on the India scale. Perfectly understood, sir. Sir, my second question on what you just mentioned on the Romania downsizing. Could you help us understand what this downsizing would involve in terms of the capacity, headcount, any possible one-off cost? Harshit, let's work on this. We will announce it at an appropriate time. Just to clarify here is, focus is to ensure that we arrest the losses. Whatever action requires for that, we will do it either with customer or within the organization. As Vishal said clearly, we want to increase the sale of cages, we want to reduce the losses. Naturally, whatever is loss-making, we have to make sure that it doesn't. We are working on it. Maybe next quarter we should be able to give you more concrete announcement on this. Just clarifying here, Harshit bhai, when Vishal bhai is giving guidelines, it is without adjusting the metal movements. So, maybe that growth is also visible in your H1, H-over-H comparison. Yeah, absolutely. Understood. Just a small follow-up on this metal price increase. So, whatever inflation we have faced till today, has this been entirely passed on, or there is still some component left that we will see probably third quarter and fourth quarter, and that could possibly continue our gross margin expansion? I am asking this because the gross margins were at a pretty solid level, given whatever pass-through that has already happened. Wh at I am trying to understand is that, is there any move left to this further pass-through, or we are broadly covered as we speak? Harshit bhai, it is a pretty ongoing thing. Y es, we see the very high spikes in the last four, five months. Now, if the metal price is settled, then we see a major pass-through is done. I f metal price continues to move either one side, up or down, we will have a further impact of the same. So effectively, I cannot give answer it is done 100% because it is a very much ongoing thing, and different customer has a different timelines. So definitely, we see if the metal price will settle, this margin will either improve or will remain at the same level. But further change, Vishal bhai can add here. Also, I think we are seeing a pressure on inflationary pressure on the cost side also for the portion which is not passed through. Lot of indirect and so on. That is something we are trying to work through and mitigate. So that also remains an ongoing challenge for us. Understood, sir. Thank you very much for answering my questions, and all the very best. I will come back in the next. Thank you. The next question comes from the line of Prasenjit Paul with 129 Wealth Fund. Please go ahead. Yeah. Thank you for the opportunity. Good afternoon, everyone. Sir, my question is in H1, as we can see very strong consolidated growth of around 20%. H ow much growth you can contribute or the realization growth, and how much is with the actual volume growth? W henever raw material price settle down, can we expect any kind of de-growth? Or if you talk about the purely volume perspective, what kind of volume growth you are planning for the FY 2028 or in the second half of FY 2027? Yeah, we are in general planning on a global basis about 12%-15% volume growth is what we are working towards. Then, I think how the metal price and pass-through and all that work will have an impact on the value. Okay. So, in the H1 or in the quarter that we have already the results, if I am talking about the past growth, how much you can think that is the realization-led growth? Out of this 20% growth in H1, how much is realization-led or price increase-led growth? Our approximate estimate is that about 4%-5% of it would be linked to a material pass-through-related thing, and rest of it is real volume growth. Okay. S ir, in last call, you have mentioned that with the existing capacity, we can reach around INR 2,500-INR 3,000 kind of revenue. Any long-term vision that in how many years we can reach there, and then we need further major capacity addition? Or like, do you expect in FY 2028 no major capacity addition, only debt reduction is with the priority? If you share some long-term vision. I think from a long-term point of view, we have shared that we see about INR 2,500 crore-INR 3,000 crore revenue, combination of existing capacity as well as new greenfield investment and expansion we are working on. Some of it already done, and some of it we are working on. Out of existing capacity, the numbers we have shared, these are peak numbers, meaning that every sub-segment of our product line has a demand which is matching with the capacity, then that kind of number can be achieved. It is really difficult to say that, how we will, whether that will happen or not exactly like that. Again, we do not go into that details, and what we share is that, yeah, even though that is the capacity, we will never hit the 100% number on each of those sub-segments, and then we need to look at overall situation. Okay. Lastly, do you have any debt reduction plan or you need major borrowing in FY 2028? We do not, as of now, assuming incremental borrowings in FY 2028. What we have already taken is for our Advantek expansion plans and our China phase II expansion plan, which we have already announced in our previous calls. We are very comfortable at the current debt level, so there is no real debt reduction plan per se the way perhaps what you are hinting at. Yeah, because it is backed by either lower interest rate or backed by the government subsidy. Okay. Thanks a lot. That's all from my side. The next question comes from the line of Sanmat Jain with KamayaKya Wealth Management. Please go ahead. Yeah. Hi, am I audible? Yes. Hello. Yeah. I just have one question, sir. Given the current bearing supply shortages in the U.S., are our top global customers shifting more of their U.S.-bound cage production to Harsha? How much is this tailwind contributing to our current order book? I think we work on a very long-term supply situation, and we are continuing to see U.S. growth in our portfolio. I am not able to fully answer, because I am one step down from bearing. If there is any challenges on bearing supply chain, I can assure on one part that it is not because of cages, and we are aggressively addressing any demand challenges or opportunities coming our way. Long term, we expect that U.S. will continue to grow, and we are seeing good traction, and we are working closely with our customer in U.S. to meet any of the opportunity or requirement. Okay. Thank you, sir. The next question comes from the line of Kaustubh with Paul Asset. Please go ahead. Thank you for the opportunity. Am I audible? Yes. Yeah. First of all, congrats on the numbers. Most of my questions were already answered. I will add a follow-up question on Romania. Post downsizing, what are the expected annual revenue and EBITDA run rate for H2 this year and FY 2028? Will there be any restructuring charges or a one-time loss? I will tell you, as I replied to a previous question, we are in the process of working all the nitty-gritties and details. Please give us one more quarter, and we will come with all the specific answers. Thank you. Followed by- I just wanted to. -Disclosure also. I just wanted to understand if Harsha Romania can be an EBITDA positive in the last quarter of this year. We are working towards that, but we cannot say for sure right now. It is a little too early. There is a lot of challenges in front of us. Okay, that is understandable. Thank you. I will get back to the team. Thank you. Thank you. The next question comes from the line of Aditya with Old Bridge Mutual Fund. Please go ahead. Thank you for the opportunity, and congratulations on a good set. Sir, my question is on the CapEx side. In Q1, we targeted for almost INR 50 crore-INR 80 crore CapEx for full year. In H1, we have already done INR 73 crore on a consolidated level, and I guess INR 9 crore at a standalone level. What is the expected CapEx now for FY 2027? If you also can give us a split for how much this CapEx is going to go for Advantek and China. Aditya, maybe there is some misreading or maybe misinterpretation. The CapEx for India itself is around INR 110 crore for next one and a half year. We have announced in the beginning of the year, which is mainly contributed to our Advantek next phase expansion. We have announced around China CapEx of around INR 100 crore. Again, that will take around a 1.5 year to complete. So, 18 months CapEx, we already announced is of around INR 220 crore, out of which, as you rightly said, first half is around INR 70 crore plus. Balance, we see that we are actually accelerating our CapEx plan, both India and China. We see that maybe instead of 18 months, we will be able to complete that within around 12 months to 15 months, case-to-case basis. We will continue this CapEx till the time of 15 months, maybe we can say up to June 2027, is our expectations to complete of these both CapEx sites. Maybe the Golai will take a little longer time because of the customer approvals and trials requirement. Yes, CapEx spending will be done by that time. Okay. Thank you for the clarification there. One last question from my side. What should be the maintenance CapEx for Harsha standalone business in that big picture view? Harsha, at a console level, I will say around INR 25 crore-INR 30 crore at a console level, because we also need some of the operational or maintenance CapEx at China, Romania site too. Okay. Yeah. Thank you. That's it from my side. Thanks. The next question comes from the line of Jason Soans with IDBI Capital. Please go ahead. Yeah, sir. Thank you for taking my question, and congrats on a good set of results. I just wanted to know if possible, would it be possible, FY 2026, our engineering business consolidated has, it is a turnover of around INR 1,440 odd crores. W ould it be possible to break it down into steel cages, brass cages, bushings, polyamide cages, and stamp components on an annually basis? I just wanted to have a rough sense of what proportion comes from which segment. No, Jason. We are already giving you a good breakup of stamping, bushings, and LSB, which is our growth drivers. Rest you have to assume are part of our other cages. We will not be able to— Okay, sir. -Because we have already given a guideline that industry has picked up. And industry pickup is contributing both larger size of the steel business as well as the brass business. This is the guidelines we have already said. Again, in the past, we have shared what is broadly the industrial side of it, what is the automotive. Again, as a thumb rule, most of the industrial is brass, but not necessarily so. A lot of steel, large size steel cages are also going into industry. It has become too much of a complication, frankly. Okay. Sure. I missed the growth expected in the stampings business, for, I mean, expected growth for FY 2027. Could you repeat that if possible? We just said that we have accelerated the growth numbers for stamping, and we see that acceleration will continue. Our original guidelines was around 30%+, and we see some acceleration happens in last quarter, and we expect it to continue acceleration business. We have not given any revised guidelines so far. Okay. Sure. Also, I mean, when you look at the console minus standalone, which is basically the subsidiary, I understand it's the foreign subsidiaries plus Advantek. T he number here comes around, a loss of around INR 123 million or INR 12 crore odd. Sir, I mean, so understand H2 will be positive for Advantek, and then we're trying to minimize the losses in Romania. Can we expect a positive, or you mentioned one line in the presentation, but can we expect a mildly positive or mildly negative number by end of FY 2027? Put together all three, we expect it to be positive, including Advantek. Put together. China and Romania. Okay. Yeah, for second half. Or H2, yeah. Thank you. The next question comes from the line of Vaibhav Shah with Equirus Securities. Please go ahead. Yeah. Hi, thank you very much for the opportunity. My first question is on the stamping side. Could you elaborate more on the products which are currently under development, particularly for the aerospace and defense segment? I mean, what are their specific application and the end platform for the systems where these components could be used? Additionally, how should we think about the overall opportunity and the expected commercialization timeline? I will not be able to share specific application or current development things we are working on. Right now, in general, I would say that it is not a very large opportunity for us. It's a small, relatively in the context of our stamping product portfolio, it's relatively small, and it has a decent potential. But right now, directionally, it is not very large. Specifically on the aerospace and defense, your specific question. Correct. While for other parts? Ladies and gentlemen, the management line has been disconnected. Please stay connected while I reconnect them. Thank you. Ladies and gentlemen, the management has been reconnected. Please go ahead, sir. Hello sir, please go ahead. Yeah. Are we audible now? Yes, sir. Okay. Sorry. I think there was a disconnection, but we will continue. Sorry for the technical glitch. Vaibhav, can you repeat your question? Sorry, we missed that. Sir, that was primarily on the aerospace and defense stamping side. Okay. The commercial timeline and the overall opportunity. Yeah, right now you can say that without going into specific, this right now for us opportunity is relatively small in the context of stamping. I would say about INR 20 crore-INR 30 crore, and then we are still working for a further opportunity when it comes to aerospace and defense. However, our opportunity on the stamping side, where we are working on other components, that is fairly large, and then aerospace and defense, we are right now working to expand that. W e are also trying to understand the market and what are real opportunities for components which we have already made and what is in the pipeline in development. Understood, sir. Thank you. Sir, second question is on, Timken has undertaken a significant CapEx for their new Bharuch facility for localization of SRB and CRB, and which is currently ramping up. H ow are you seeing the demand arising from this particular area, and to what extent is this expected increase in our business, and it is also factored into our revenue guidance? Yeah, it is all factored. We are seeing positive demand coming from that, and it is all factored into our guidance. I won't be able to go specific, but we think we are very, I mean, seeing a positive impact of that for sure. Understood, sir. Thank you very much for answering my question. I will get back in with you. Thank you. The next question comes from the line of Manish Goyal with Thinqwise Wealth Managers LLP. Please go ahead. Yeah, thank you so much. Sir, first question on, maybe if you can clarify further on the subsidiary level. Like earlier we had said that Harsha Advantek will be PAT positive in FY 2027. A lready in first half we have seen INR 7 crore losses versus last year some INR 12 crore losses. So, how should we look at FY 2027 numbers? Like we were expecting revenues of INR 140 crore. I f you can give numbers for Advantek, what is the potential, number one. Number two, what will be the kind of investments if we take only Advantek, which will happen, say maybe once we complete this expansion by June 2027, and how much borrowing is allocated towards Advantek? Just want to know what would be the peak interest and depreciation from this 100% subsidiary, and what would be the overseas combined, say, or maybe if you can share what could be Harsha Romania losses and China profits. China was INR 5 crore profit last year and Harsha Romania was some INR 14 crore loss last year. That was first set of questions. Thank you. Thank you, Manish. Let me try to answer the maximum possible. On Advantek front, we are on track for our revenue guidelines of INR 140 crore or even little higher for the year. A t the same time, we see that because of our further expansion plan, we have incremental expenses started incurring there, including operational expenses for our future growth. As you rightly mentioned, there is a full-fledged of interest and depreciation also started kicking in for our first phase expansion, which is already completed. We expect, as we have said, H2 will be the profit positive, contributing positively on our overall Advantek front. While going forward, my CapEx, once we complete this phase II expansion and the new building expansion plan, we expect CapEx of around INR 350 crore plus at a overall Advantek level, out of which building and infrastructure would be around INR 100 crore plus spend. I see that total CapEx loan we will take is around INR 250 crore in Advantek. Balance will be the capital funding from the Harsha Engineers International. Just to clarify, I think what Maulik bhai, you want to say is that by H2, we will be profit positive. Maybe on a full year basis, that may not be enough to completely absorb the loss of INR 7 crore of the first half. There could be still some minor negative reporting, but let's see. We'll wait and watch. Right. For the quarter two, foreign subsidiaries put together, our loss is INR 1.7 crore. On quarterly basis, we do not give the subsidiary-wise numbers. Definitely, you will have it for the year once we complete. Yeah. But we have said it will be- It is improving. -Yeah, it is improving, and it could be a low single-digit number at the end of the year at the foreign subsidiaries level. Significantly lesser than what has been happening in the previous year. Yeah. Okay. Losses will be much lower, say maybe what it was INR 10 crore-INR 11 crore, would be lower than that. Advantek. Can you just what will be your peak interest and depreciation in Advantek, sir? Maybe in FY 2028, just to get a perspective. Depreciation will keep on increasing. For FY 2028, I can say that it will be- 2028 or 2027? Both numbers are good, sir. Yeah. Okay. I do not know. 2028. Okay. There is around INR 7.5 crore-INR 8 crore as of now, put together numbers are. We see that it can increase up to max INR 10 crore once we have a full-fledged company. Interest plus depreciation together. Okay. Both put together. This is quarterly, I would say, right? Yes, absolutely. My next question, sir, is on the initial comments. Mr. Rangwala mentioned about insourcing and outsourcing projects, and one project is expected to start contributing from Q4. Was it pertaining to the cages project, one contract which we had announced last year, and which is probably going into production in Q4? Maybe if you can give some more insights, like what kind of potential opportunity is coming up in this particular insourcing and outsourcing? Yeah. I think as I mentioned in my speech, yes, that's the one we had announced earlier, which is kicking in. We are expecting realization to start in the third quarter and should normalize by fourth quarter. From a potential point of view, this would have, what I've shared, that about INR 70 crore-INR 75 crore annual revenue is the potential for this. At the peak. Yeah, at the peak, when this project. Then, right now, we are working on opportunities of insourcing or outsourcing worth about another INR 75 crore-INR 100 crore in different phases, which may come online next year to subsequent year and so on. These are right now specifically cage-related opportunities. This is, sir, not the large cages one, because what I understand, there was a large cage. Is it the same one, the large cages contract for? Correct. Okay, large cages. You also had announced one more in the bushing also, where we were expecting ramp-up to start in the second half of this year. Maybe if you can throw more perspective on that, number one. Number two, probably in some of these MNC calls, we probably heard that for larger size wind turbines beyond, say, 5 MW or maybe say 8 MW or 10 MW, over there, the requirement will be more of specialized bearings and require relatively more developed cages, and the bushings may not be required. If you can throw some more clarity on this as well. Thank you. On the bushing, I think that what we had announced, the one contract, we were expecting second half commercialization to begin. Right now, we are still hopeful that that will happen. We think that's a little bit delayed in terms of ramp-up, but it will still happen. Related to large windmill market, yes, we see that there are bushing opportunities within that. We see that as a continued opportunity. As I said, it's not about 100% replacing bearings. It is only limited application these bushings are used. I think our customers are right that they would have a lot of these opportunities on the bearing side. A t the same time, we see that bushing has to play its own role, reference to large windmill. We are already supplier to actually a 16 MW windmill application. We are supplying bushings in that. We don't see that as a concern. As the rollout of bushing happens, it will grow. The next question comes from the line of Prolin Nandu with Edelweiss Public Alternatives. Please go ahead. Hi, team. Thank you for taking my question. I just have one question on the China business. You mentioned that the growth is slightly on the lower side and the margins are also on the single digit. Now, historically, if I look at your top line growth, it has been anywhere in the range of 8%-10%, and margins are also in double digit. When you mention that you expect some improvement going forward, is this improvement going to be limited, or it will only come when the new capacity comes? Do you see an improvement in sales as well as margin without or before the new capacity kicks in? We expect the growth to continue in China, even though we mentioned that in terms of growth, it has a little bit softened vis-à-vis previous quarter and last year. We expect, however, still growth to continue with difficult to fully clearly define exact number. Bigger jump on growth will come when the new capacity comes online. Otherwise, it will remain for current financial year as well as early part of next financial year in that single-digit range, is what in general we expect. Okay. Thank you so much. That's it from my side. Thanks. The next question comes from the line of Jason Soans with IDBI Capital. Please go ahead. Yeah. Thanks for taking my question again, sir. My line got disconnected. Sir, now I am repeating this question, I understand. S ir, actually, again, in the earlier parts, you did allude to it. There is a 21% growth in the first half, but would you say guide for a consol revenue guidance of 10%-12% that really points to a marked slowdown in second half? Sir, just some clarity on why this should be, because you started the year really well, going on really well. What is kind of taking us on this kind of conservative path? Jason, I want to repeat. We are not intimating that you are trying to understand. What we are trying to say that there are two elements. One is the quantitative part, and the second is the inflation. Okay. The third angle is Harsha Romania. This year, there has been a fairly strong increase in overall metal prices. Vishal and Maulik both have explained that in quantitative terms, we are talking of 12%-15% growth. It will definitely, it could translate, given the continued inflation, it can translate into little higher, definitely higher number and as a combined value. Having said that, please understand, we have also announced that we are looking at downsizing Romania. We don't know how and when exactly we are able to do it, but probably by Q3, we will be very clear that what are the nuances of the downsizing. Romania's contribution can come down quite a bit. Overall, please understand, Harsha India engineering, we are gung-ho. We are very clear that there should be no issue. Therefore, from that angle, please look at it as a little more conservative guidance. That's all. Sure. Thanks for that. That was all from my side. Thank you so much. Thanks. The next question comes from the line of Varun Jain with Dolat Capital. Please go ahead. Yeah, sir. Most of my questions have been taken up, just a couple of follow-ups. In Q2 FY 2027, for the foreign business, we just saw 1% growth. Considering the price rise, we saw a volume de-growth in Romania plus China, right? Basically, I will say differently, Varun, we see a good growth in India, and which as a percentage term shows a lower growth in export. But yes, absolute value, there is a growth in export also. There was a growth. Yeah. Sir, there is only 1% overall revenue increase. Then did we shrink, like the prices went down for the export, realization went down? No, because China has a little slow quarter, as we said. Otherwise, we see that the numbers are good. Okay, sure. Overall, China was last year at INR 120 crore, FY 2026, close to that. This year, we will do like INR 150 crore or no? Because it is INR currency, INR growth is also coming from the exchange rate impact. O n the volume terms, we see that as we have given the guidelines around single-digit growth on the volume terms as of now in China. Varun, if I have to just add to what Maulik said, if you look at Q, YoY basis second quarter, there is a growth of almost 15% in exports. So, INR 123 going up to INR 140. On H1 to H1, it is again about 17%, 18%. So export growth out of India continues. Overall, because of the China and Romania combined, you feel that there is slack. Got it, sir. And, sir, you said INR 150 crore of CapEx is left for the next 15 months or so. Out of this INR 150, how much of INR 150 which is left, how much is China and how much is Advantek? I don't have it handy. Put together, both are INR 220, but yeah, I don't have it handy as of now. Okay. Since we were planning that we'll front-load the CapEx, assuming it comes by June 2027 only, then FY 2028 will get a benefit of this CapEx, right? China will come on. What will be the China growth in that case? Commercialization again will take the similar timelines which we have given, Varun, here, because we will have approval timelines from the customers. Although the CapEx will be done, the commercialization will done around at the end of H1 only. Okay. So basically, the China CapEx will come into play mainly for FY 2029, not for FY 2028, right? H2. H2 it will come into the play. Next year H2. Sure. In H2, it will come into the play, and we will give better guidelines nearer the- Completion -nearer the year-end and completion. Got it, sir. Sir, you said in the last couple of quarters, you always said that Japan growth you are expecting is 10%, but if I see H1, Japan growth was 28%, this Japanese customer. So, has something changed, some product acceptance? What is it? Yeah, we are seeing a better product few. As I have mentioned in the past that some of our projects were delayed. They are coming online, and that is improving this percentage, relative percentage. So, that is in general what is going on. Plus our customers, when we include that, I think they are also growing in U.S. These customer, when we say Japan-based, that also includes if we are supplying them in U.S. So, all those geographies are also improving, and that has an impact on that. Okay, sir. Sure. Just one thing I forgot to ask, sir. For this China and Advantek CapEx, what are the asset terms? It is standard 1 to 1.2x asset terms, or is it higher for the Advantek CapEx? In both the scenario, if we remove the immovables, it will be better than two. If we remove the immovables, because both the plant have immovable spends. We have already covered this in our previous call. The basic infra CapEx is common for, say, next few years. Exactly. If you look at the incremental specific CapEx for each of these projects on productive assets like the civil plus the plant machinery, et cetera, relating to that CapEx, about 2x is what you can expect. Sure, sir. Sure. Just one last one. On stamping, sir, what are the margins we are getting, especially on this accumulator product since it is growing so fast? How much lower is it from the core cages margin? Varun, we don't share that. You are aware. Okay. Okay, sir. No issues. Sir, thank you and all the very best. Thank you. Thank you. The next question comes from the line of Saket Kapoor with Kapoor & Company. Please go ahead. Yes, sir. Namaskar, sir. Hope I am audible. Yeah. Yes, sir. Just taking into account the Q1 growth in the EBITDA margin, I think so there is impact of also that of RM also benefit that flows into, or is it the product mix that has given a consolidated gain from 15.9% to 18.6%, the growth in EBITDA margin? Saket ji, it is both, and top onto that, not only both, I will say operational efficiency also has contributed. A t an overall level, the solar contribution is lower for the month, including on the cost side as well as the revenue side. All these four factors have added there, as a primary factors, I will say, have added there for the EBITDA growth. Okay. Sir, taking into account H2, I joined a bit late, so maybe repetitive. What should be the ballpark, the margin trajectory for us? At an India level, we expect it to continue in around 22%. For the EBITDA. For the EBITDA margin profile. At a console level, for engineering business also, we expect it to remain in the range of around 17%-18%. Okay. This console number of what we exhibited, 18.6%, hold good for the next half also? As of now, yes, subject to the metal price movements and other things which we have already discussed. Okay. Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Vishal Rangwala for the closing remarks. Right. Great. Thank you very much. Appreciate all of you staying so late to attend this call, and thank you very much for your participation. Happy Diwali from all of us to everyone. Happy Diwali to you. Thank you, sir. Thank you. Ladies and gentlemen, on behalf of Harsha Engineers International Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.