Ladies and gentlemen, good day and welcome to the Q4 and FY23 earnings conference call of Ramkrishna Forgings, hosted by Emkay Global Financial Services. As a reminder, all participant lines will be in the listen only mode. There will be an opportunity for you to ask questions after the presentation concludes. If you need assistance during the conference, 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. Chirag Jain from Emkay Global Financial Services. Thank you, and over to you, sir. Thank you, Darwin. Good evening, everyone. On behalf of Emkay Global, we would like to welcome you all to this earnings call of Ramkrishna Forgings Limited. Today we have with us from the management team, Mr. Naresh Jalan, Managing Director, Mr. Lalit Khetan, Independent Director and Chief Financial Officer, and Mr. Rajesh Mundhra, Company Secretary and Vice President, Finance. I shall now hand over the call to Mr. Lalit Khetan for his opening remarks. Post which we will open the floor for Q&A session. Over to you, sir. Thank you, Chirag. Good evening, ladies and gentlemen. On behalf of Ramkrishna Forgings, I would like to extend a warm welcome to everyone. We are pleased to report that despite the ongoing challenges in the global economy, we have delivered strong results in Q4 FY23, creating sustainable value for all our stakeholders. India's commercial vehicle segment has witnessed a remarkable growth in recent times. With an increase in economic activity and infrastructure development, the demand has surged. In addition, the govern ment's focus on boosting the manufacturing sector and implementing various initiatives such as Make in India and Atmanirbhar Bharat has also given a significant impetus to the sector. The commercial vehicle segment in India is poised for further growth in the coming years, driven by economic expansion, infrastructure development, and adoption of cleaner technologies. We are excited to share that Ramkrishna Forgings and Titagarh Wagon consortium has received LOA for manufacturing and supply of forged wheels for Indian Railway, which is a significant milestone for our company. Order size is INR 12,226 crores. It is a long-term contract of 20 years which adds to our strong revenue visibility for the coming years. We have renewed a long-term contract with an overseas Tier 1 customer based in North America, which included an additional new product range. This contract renewal adds additions, bringing the total number of contracts to 8 during the year totaling INR 774.70 crores from various geographies and business verticals, excluding the long-term order from the Indian Railways. Ramkrishna Forgings has also taken a step forward towards sustainability by planning to set up a 7.82 MW rooftop solar power plant, which will help reduce our carbon footprint and continue contribute to greener future. The total cost of project is estimated to be around INR 25 crore. This investment reflects our commitment to responsible business practices and our dedication to reducing our carbon footprint. We are pleased to see an increase in demand for our products, which has led to significant revenue and product growth, profit growth. In Q4 FY23, we have recorded a revenue of INR 835 crore, representing an year-on-year growth of 22%. For the full year FY23, we ordered a revenue of INR 3,001 crore, representing a year-on-year growth of 31%. EBITDA margin for Q4 FY23 is 22.52%, expanded by 42 basis point sequentially. We are confident of sustaining the margins and endeavor is to improve upon the same. Our net profit after tax was INR 67 crore versus INR 86 crore for the previous quarter year-on-year. However, that was due to the deferred tax reversal in the previous year. If you correct that tax impact, the profit after tax has increased by 25% from the previous year in the Q4. We are also pleased to announce that our long-term rating has been upgraded by ICRA and India Ratings to A+ with stable outlook. This reflects the confidence of rating agency in our company's financial strength and growth prospect. Thank you all for your continued support. That's all from my side. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may please 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 handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Mumuksh Mandlesha from Anand Rathi. Please go ahead. Thank you so much, sir, for the opportunity, sir. Sir, can you share some light on the railway wheel project? What kind of a CapEx plan and how do you see the revenue flow from FY26? Some light on the profitability side, sir. Total project- Yeah, yeah. Hello. Total project outlay on this cost on this project will be close to INR 1,200+ crores. The LOA which we have received from Railways is close to around INR 12,500 crores for 20 years, starting FY27 onwards. That's the reason we have mentioned also in our presentation that we expect to start production from last quarter of FY26. We are setting up while Railways requirement and confirmed guarantee is for 80,000 wheels per year, we are setting up this capacity for 2 lakh plus wheels. We expect to do business of close to around INR 25,000-INR 28,000 crores over the next 20 years from this project. Profitability right now is being worked on. I think we can safely say that the current margins which we are doing in standalone basis in RKSL, we are aiming for similar margins in the joint venture. The additional capacity which you are planning to proceed, is it with maybe export market or, what kind of opportunity you are seeing, sir? I think the 50,000 is for Railways' self-consumption for OE application. Plus, I think there is a huge market within India for, with wear and tear, as well as the wagon builders and as well as the privatization of Railways which are happening in Vande Bharat. Right now they are importing wheels, so those also will be required. As well as export market is huge and there is right now very limited capacity globally post the Ukraine War. We are already in touch with lot of OEMs globally who buy wheels. I think before the plant commences production, we will have a long-term contract with these OEMs also. Thanks, sir. Sir, can you share outlook for the overseas CV market for next one year, sir? I think overall global market right now in export is strong and we expect it to remain strong over the years. All right, sir. Sir, can you provide timelines for the completion of the JMT Auto and ACIL acquisition, sir? Post-acquisition, what would be the CapEx plan for the both the company, sir? I think JMT Auto and ACIL both are from our side. Whatever we could have done, we have done. It is right now with that Indian legal system. We are hopeful of having this as fast as possible, but I think legal process takes its own time, so we would not like to comment on exactly the timelines of it. In terms of CapEx, I think both taken together to modernize the plant and bring it up to the shape, we expect, based on including both, close to around INR 200 crores of CapEx will be required to get a 100% result from both the parties. Thank you so much, sir, for the opportunity, sir. Thank you. The next question is from the line of Abhishek from Dolat Capital. Please go ahead. Thanks for the opportunity and congrats for the great set of numbers, sir. Sir, in you have won the new orders from the railway for supplying 2 lakhs supplying a huge wheels and the total wheel supply would be around 2 lakhs per annum. What would be the project, total project cost, and what would be your share into that? I think this JV is at a 51%-49% model. So similar, we will share the share of finances also will be similar. We expect a CapEx of close to around approximately INR 1,200 crores ±10% at the current levels of market. The revenue once you added in your console, it will come into your bottom line? No, revenue will be added in my console as well as the profitability will be also added in my console. Okay. It won't be shown as a JV profit. I think we, at a 51%, 49%, we will need to have a consolidated billing. We will need to bring that 51% of revenue into my console. Okay. Sir, in domestic market, basically the M&HCV number was because of base load, number was quite strong in quarter four. There's expectation that FY 2024 number would be new page. Can you give some color on how the outlook would be for domestic market in RKSL segment? I cannot comment on the exact market share. I can only comment on what RKSL is and we are extremely confident of a strong performance in FY24. Given the global scenario, given the domestic markets, given the order book we right now have and the visibility we have from all our customers, we expect to continue our growth trajectory and we produce strong results. In earlier, in quarters, in Q3 you had mentioned that you are looking for 30%-35% growth in the top line in tonnage segment. Your guidance is intact despite this strong base in the Q4 number? I think my Q4 numbers already are visible in terms of tonnage growth. I think we will continue to have similar growth or as I say that we expect to have a very strong year, FY 2024. Okay. In last two years, sir, the CapEx was very strong and you have done great numbers in your top line as well. Going ahead, you are coming with the 2, 3 acquisitions and plus that you are going to take up the plant of the this fourth wheel site. What could be your next two years CapEx target? Standalone basis, RKFL will continue to grow and continue to deploy cash in terms of whatever we earn. We have already defined our capital allocation policy. We will be strictly following those capital allocation policy in terms of our debt reduction, as well as allocating capital for growth of RKFL on standalone basis. Acquisition, we will see as and when it comes. I think right now, till we complete the legal process, I would not like to comment on those. In standalone basis, RKFL, we can very clearly say that we have a defined capital allocation policy, and we will follow those policies strictly in terms of debt reduction, dividend, and whatever is leftover cash, we'll de-deploy that into the growth of the capacities within RKFL. You have most of the acquisition on the consolidated basis. If you can shed some more light on that, how much CapEx you are looking in the ACIL, JMT, as well as those other plants, like fourth plant. What is your basic payment plan? JMT, ACIL, already my acquisition cost has already been in the market domain. Unless it comes right now, I will not be able to say anything when and how it will happen. We will wait till the court order comes through, and then only we will be able to comment on that. We will surely keep our investors updated as and when the acquisition gets cleared through the legal process. In terms of the wheel project, my responsibility is for 51% of the CapEx spend, and part will be funded from debt and equity. Equity is the portion which RKFL will bring into that SPV. We are working out. I think we are not yet freezed on the numbers. As in, I think it will be by first quarter, we will give you the numbers, what RKFL intends to get in equity in that company and what is the debt going to be there in the company. That is over next three years, which is going to happen. What is the ROCE of this business, both wheels, businesses? I think, right now we will need to wait because I think we are still at a 14% capacity, or not even 14% capacity has been sold. We will need to wait for a rest of the contracts and other things to get closer. Closer to the, I think, FY 2025, we should be speaking on what is going to be the ROCE. Right now, when we have quoted for the project, we have quoted on an ROCE of, close to around 5 and a half years. Okay, sir. Thank you for the update. Thank you. The next question is from the line of Balas ubramanian from Arihant Capital. Please go ahead. Thank you so much for the opportunity, sir. My first question on the wheel set side, we are going to sell FY 26 Q4 onwards. What would be the average realizations for these wheels? Because we are going to supply for next 20 years, what kind of price escalation clause we have with Indian Railways? These are my first questions. I think the price realization right now shared between the market is close to INR 190. Sir, could you please repeat? I'm not getting it. INR 190 per kg. Close to INR 190 per kg realization right now. Price realization clause is very clear that it is as determined by every quarterly in the RBI index of steel and inflation. Okay, got it, sir. My second question, on the wheel set side, how many wheels we have to sell for breakeven in that project? We will break even at 40,000 wheels per annum. 40,000 wheels. Okay, sir. I just want to understand about the wheel sets market in overall in global. In the wheel sets cost, it can anywhere, fully wheel set, it comes anywhere between INR 2.5-2.8 lakhs. Could you please break down what are the components are available in that? I think it is not relevant question right now, and it is very difficult for us to answer right now. It's a just project which has been taken up and we are working on it, and it is right now very primary to give all this information. Okay. Thank you, sir. Thank you. Ladies and gentlemen, in order that the management is able to address questions from all participants, you are requested to limit your questions to two per participant. The next question is from the line of Pratik Banthia from Girik Capital. Please go ahead. Yeah. Hi, Lalit. How are you? Sir, my question is related to the slide 30 where you are mentioning about warm forging capability. You know, if you could, you know, just tell us about this capability which we are adding to our portfolio. And you mentioned under product families about special gears and special bearings. You know, how many other players are there in India, you know, in this? And, you know, which customer segment you would be targeting? Yeah, that's my first question. In warm forging, we have already, since last two quarters, we have already started supplies to domestic and overseas customers. Primarily right now we are catering to the commercial vehicle market and with the new installation which is getting completed in next couple of months, we are going to target the light vehicle market also. For which we have already got some contracts and we are in process of getting some contracts globally and within India. To answer your second question, I think the biggest player within the Indian market in this segment is Sona Comstar, and I think we are just starting part of this and we will gradually grow in this business. I think we look to make significant progress over next two years and this is the first step to make entire differential assembly. Mm-hmm. as one of our product platforms. Interesting. sir, after with this product coming in, now our average EBITDA per ton, how will that move? Like, for this under warm forging, what sort of profitability is there in this product? I think right now in last two quarters, We are not very significant player right now. We will continue to work on margins in this and with the installation of and modernization which is taking up right now, which is going to be completed, I think in next six months time. We are looking at at least 100 to 150 basis more than what we are at, on an average doing in our traditional forging setup in warm forging. Got it. Got it, sir. Sir, yeah. Now on the balance sheet and cash flow side. In the current setup and the current in our organic way which we are going by expansion over next 2 years or by 3 years, we'll have a significant cash flow coming in. How will our debt on books be? And we also have this JMT ACIL heavy investing project plus our railway projects also. How will the over next year, how the cash flows will be used? Because you seem to be, you know, fairly confident about the growth side, this new setup. How will this cash flow be used? Our cash flow in the future, whatever we have, earned the cash flow and we have, future growth plans. Our future cash flow will be enough to take care of our acquisitions also and working capital requirement. Overall, we are not anticipating to increase on debt. Rather, every year the debt will go down. Even if you look at the standalone basis, it will be at least INR 200 crore, we will go down. On the console basis also, the overall debt will not increase. Okay. Okay. This INR 1,200 crore debt which is there as on March 31, 2023. Over next 3-year period, this absolute number will keep coming down. Yes, it will keep coming down with the growth also and acquisitions also. On a standalone basis, it will continue to go down by around INR 50 crore-INR 200 crore per annum. As well as also INR 1,200 crores is a gross debt. At this level, if you see minus the build discount, INR 1,093 crores is only the net debt. We expect the net debt to be on the downside going forward with the cash flows which come out of the operations. Correct. Correct. Correct. How much will be our contribution towards this railway project? That will be INR 180 crore of equity will go. That will also go over a period of three years. Over three years. Okay. It won't be a too stretchy for similar to this cash. Got it. Got it. We have, we removed this INR 5,000 crore figure from the presentation. Any specific reason? We did not want to put a number right now. We are looking at a extremely strong growth in next two years and three years with the kind of plans and the vision we have. We did not want to put a number to it. Got it. Number may exceed expectations. We don't want anybody to judge the company based on those numbers. Correct. Correct. Correct. Got it, sir. Got it. Thank you very much and good luck. Thank you. The next question is on the line of Mitul Shah from Reliance Securities. Please go ahead. Thank you for the opportunity. Sir, one verification of previous question on debt. We said that standalone debt will keep coming down and console debt will not go up. Can we assume that console debt for some time would remain at current level or it will also come down? Mitul, actually it depends upon lot of things, when the acquisitions are overcome and when we need to deploy the CapEx. See, and the CapEx will be done also in a calibrated manner. Those company will have their own earnings also with the CapEx. Everything will pan out in a span of time. Right now that's very clear and the vision of the company is very clear that on standalone debt we are going to reduce and on console debt also we are in a race to not increase the debt, rather we reduce the debt. That will continue because whatever cash flow is available, we will try to grow from that only. Okay. The second question on raw material side. In fourth quarter, RM by sales, raw material as a percentage of sales has gone up by 200 basis YOY as well as QOQ. Now it is coming almost 8 quarter highest at 60.2%. Whereas actual raw material price movement is very limited during this quarter. Any specific reason, any delay in compensation from the vendor, or what could be the reason behind this? That basically happens due to the product mix because we sell products of different categories and that's why there is the consumption of sales realized versus raw material consumed. That's why there is a 100-200 basis point plus minus quarter-on-quarter. That has nothing to do with the right now price movement or the any discount from the vendor. Okay. There is nothing related to delay or lag effect of passing cost escalation to vendor or anything. Yes. At the same time, other expense also came down significantly quarter-on-two despite our revenues and volume going up. Here any specific reason? Other expense has gone down due to the reduction in freight, ocean freight basically and shipping cost. Okay, sir. Sir, Sorry to interrupt. If you have any further questions, we request you to please rejoin the queue. Yeah. Thank you. Ladies and gentlemen, you are requested to please limit your questions to two per participant. The next question is from the line of Chirag Shah from White Pine Investment Management Private Limited. Please go ahead. Thanks for the opportunity, sir. Congrats for good set of results. First, before I ask my question, a clarification on this JV. Is it a completely ground-up plant or some part would be done by Ramkrishna Forgings in standalone, like a basic forging and machining would be done at the JV level or it is a completely ground-up plant? It is a completely greenfield project. Okay. Everything would be done over there. Okay. Sir, my question pertains to E.U. and U.S. customer. In the past you have been indicating that you are in discussion with some customers and you are very hopeful of adding some of them. Any update if you can share on that it would be helpful. Any new customers you may have added? I mean, Lalit has already updated close to INR 700+ crores of order wins in this year. Mm-hmm. Is basically on, whatever we have been able to complete in terms of customer acquisition is concerned. In terms of revenue, if you see already Europe is growing. In absolute numbers if you see, Europe is close to 15% now of our total revenue. From a starting from a base of 0 and within two years we have reached a revenue of close to 15% from the Europe. I think that substantiate our statement, what I said that we are working on customers and it takes time, but customers are getting converted as we move up. Yeah, no. I was more referring to number of customers because I understand, sir, customer breakthrough could happen immediately or could take a number of years. It depends upon when and how they want to ramp it up. Is there any breakthrough being made that where a new customer has given some trial orders or we have got some approval? Yes, that is the answer to it, that we have already converted lot of customers wherein we were doing trials and that is the reason this kind of revenue we were able to achieve in this sluggish market also. With the strong growth, what we see is basically the marketing activity which we have done over the years from where we are still having a visibility of very strong year going forward. Sir, this breakthrough is largely in U.S. or it's more Europe-based? It is globally. Okay. I cannot put a particular geography to it, but we are, overall in terms of overall performance, we expect strong growth, and we are extremely happy with the customer response globally. Sir, the last question on cold forging, cold and warm forging. So, it was supposed to start in Q1, right? Professionalization of that effect. The incremental- I think last two quarters already we are started doing warm forging and the latest new equipment which is entering, we are in process of starting that equipment, I think from second quarter onwards by that. We have already very clearly mentioned that all these CapEx, our addition of 56,000 tons will get completed on or before September. We have already given a entire roadmap by first quarter what is going to get completed and by second quarter what is going to get completed. Yeah. My sir, my question was how should we look at ramp-up of this plant? This is basically a ramp-up plan. As CapEx, if it is getting completed and commissioned and start up, we have immediate order book to ramp it up. We have given guidance based on ramp-up plan itself that first quarter and we will be able to see. As you mentioned, the ramp-up will happen from second quarter and the second quarter the part which is getting completed, from third quarter we'll see the ramp-up on those. Basically once you start the effect over next 12 months, we can achieve optimal utilization levels or it may take slightly longer time? No, once we, within 12 months, 6-8 months, we can see optimum, levels. And, uh- With the current order book we have, we are very confident to achieve that. Is there any addition of customer for this facility? We already have one of the customers, but is it because you were in active discussion with more customers? We already have a complete order book and our production capacity is almost sold. Almost sold. Okay. Thank you. Thank you and all the best. Thank you. The next question is from the line of Deepak Jain from ENAM Asset Management. Please go ahead. Sir, can you talk about working capital, how it is poised for the next years given that you are expecting a strong growth? On absolute terms, will it remain there or it will expand? What is your view on that? Working capital, Deepak is right now at around 108 days and our eight endeavor is to bring down by another 8-10 days. We target the working capital, net working capital days to remain at 100 days, going forward. Sir, can you share your outlook on Class 8 demand from the industry level? I don't think I would be able to comment on Class 8, but overall, we see the commercial vehicle market overall in North America is doing extremely well in terms of production. I don't see as a order book. As a production, all OEMs are sold out and off take of material is extremely good. Okay. Okay, sir. Thank you. Thank you. The next question is from the line of Ankur Kumar from Alpha Capital. Please go ahead. Hello, sir. Strong numbers. A couple of questions. First question is on the growth that you are saying that next two years will be very good. Can you quantify then this year with the 20% volume growth in the coming years be similar or can it be better than this also? First of all, I have never said for two years. I am saying for FY 2024 we are expecting strong growth. We stick to that statement. As said, we would not like to put a number to it. In terms of previous quarter, we have given a tonnage guidance of 15%-20% growth. We would like to stick to that. I think we are expecting continued volume growth and revenue growth in this year. We feel that the performance we have been able to achieve, we will continue with a strong performance in FY 2024 also. Sure, sir. Next question is on the margin. Gross margin has come down this year compared to the last. Any reasons and what is your expectation on that front? No gross margin from last year it has improved. If you look at EBITDA percent, it has improved to INR 2,500 per ton. Sir, I was asking in terms of gross margin percentage. percentage. Yes. Percentage-wise, certainly there was a cost pressure this year. That's why the margin, EBITDA margin has gone down by 100 basis point from the last year. From here on, it will sustain at this level or improve from this. Sure, sir. For tax rate will be 23% or 25% roughly? Yeah. Next year we will be moving to 25% tax rate. 22% plus or charge. Sure, sir. Thank you. Thank you. The next question is from the line of Pritesh Mehta from Laxmi Investment Managers. Please go ahead. Yes, sir. I have three questions. The first question is in Europe and North America, what would be our CV dependence in terms of business? My second question is, if you could give the tonnage growth outlook for Europe, US and Asia, separately if possible. Is there any deflation element in FY 2024 whereby there can be any price reduction or any, for us to understand the top line? I think first of all, in terms of Europe and North America or maybe India as a overall order book, 70% of my order book is from automotive sales and this entire automotive sales is from different type of commercial vehicles only. Okay. When a CV or LCV. Okay. We are not into TVs. I have clarified that in earlier quarters also. We are in only commercial vehicle market. Okay. Across the globe in automotive segment. Okay. In North America or Europe, we also cater to the off-highway industry, oil and gas and long-haul trailer bodies as well as we have just entered the oil and gas in Dubai and Abu Dhabi Gulf countries. That is also a market which we are looking to grow considerably. In terms of deflation, all our contracts are tied up. In terms of inflation, we are not affected. My question here was as on today, whatever you understand, will there be a deflation in your realization next year driven by steel price? I think steel price quarterly is a reset. In case there is a reduction in steel price, the top line may go down. In case there is a increase in steel price, top line will go up. Okay. My margins and other things are not dependent on basically steel pricing. Okay. sir, your volume growth outlook for tonnage growth in Europe, US and Asia? We don't have a bifurcated tonnage as of now. Surely we can ask our CFO to you can have a one-on-one call with him to get all the. My last question is, sir, there is a working capital improvement, for a certain extent driven by better payables. Can you explain the rise in the payables, what kind of credit and where are we getting? The rise in payable is basically due to the higher volumes also there is no such rise in the debtors commensurate to this. That's why it's there. If you look at my payable from last year to this year, it is up by 35% and my volume, my top line growth is also 31%. There is no significant rise in payable. That's why. If you look at my debtors, debtor has not grown that significantly. That's why there is an improvement in overall working capital cycle. Okay. Thank you very much. Thank you. The next question is from the line of Koushik Mohan from Ashika Stock Broking. Please go ahead. Hi, sir. Congratulations for the good set of numbers. Sir, I just wanted to understand some guidance, not on the exact number why. What would be your revenue mix on the railway and oil and gas? I think, we are looking at almost doubling our sales to railway with this year. I think, with whatever percentage right now we are approximately right now we are looking at 5%+ this year from railways. In oil and gas also, we expect at least 150 basis points increase in share of business from oil and gas. Sir, another question. Like, how is the railway payments happening, sir? Is it, like, if you bill it today, like, how long will they take it to put some cash in your banks? From the date of dispatch from my plant, it takes, the payment is received in my bank account within 55 to 66 working days. Thank you. Thanks, sir. I have another question. Can I ask, or should I come back on the line? Mm-hmm. Yes, sir. Sir, I just wanted to understand another thing. You have an partnership with Tata Motors for wheels. Sir, how much percent of that entire project will be your revenue? 51%. 51%. What will be the cost, and how is the production going to happen, and what's your plan on that? I think CapEx plan is close to INR 1,200+ crores and production is going to start. We expect the production to start from last quarter of FY 2026. FY 26 last quarter. Yes. Okay. sir, how is your EBITDA margins hold here, sir? Right now, I think it's pretty nascent to speak on the EBITDA margins. We would work on it and come back basically in FY 25 for that. Okay. Thanks, sir. Thanks for this. Thank you. Ladies and gentlemen, to ask a question, you may please press star one. The next question is from the line of Vignesh Iyer from Sequent Investment. Please go ahead. Congratulations on good set of numbers. I have 2 questions from my side. The first one is I just want to know the tax rate as of now we're paying somewhere around 30%+, 31%, 32%. That is probably one of the reasons being deferred tax coming in. I just want to know, are we going to continue in the same slab for the FY 2024, or we are going to switch to a 25% slab like many other companies in manufacturing are doing? We are going to shift to 25% tax rate in the next financial year. Okay. Great. Thank you, sir. Yeah, my second question is just to understand from just purely a utilization point of view, our press is running almost like on 94%. Molding has been consistently doing above 100%. I just want to understand from where would the next leg of growth come? 56,000 tons of production is going to get added in next 6 months time. Between this quarter, I think around 20,000+ tons is going to get added and start production. Total 53,000 tons is going to get completed within first 6 months. As well as the utilization level 94%, which is being shown, I think we will revise those percentages also in next 6 months time. Overall, we see that things are going to be much better in this year. Plus there is lot of capacity left in our fabrication plant ramps up, where we are doing the production for Railways, where we have a lot of capacity that's out, for growing railway segment. That is not added in tonnage. Okay. That is, that is separate. Okay. Right. Yeah. Yeah. That's all from my side. Thank you. Thank you. The next question is from the line of Navin Matta from Mahindra Manulife. Please go ahead. Yeah. Thanks for the opportunity. Sir, I think the question, I think we all try to grapple with is that we are, you know, next year, potentially some of the industry bodies in the U.S. are saying that Class 8 could see a decline. Just one way of trying to understand this is in case, assuming that the market is flat, how much can we outgrow based on our order book or market share that we are looking at? First of all, I have not heard that any OEMs have come out and said that they are going to see market degrowth next year or this year. No OEMs have come out and said that. Second is that we are not into alone Class 8 in the North American market. We are across all platforms of commercial vehicles. Class 8 forms one of the parts. With our past experience and the current order book, we are extremely confident that the way we have improved our content per vehicle, we will be extremely doing well, and we are confident of outperforming the market. We cannot put a percentage how much we'll be able to outperform the market. Understood, sir. Just based on, you know, our product mix, improvement, do we see scope for further margin improvement from current levels? We expect to retain and improve growth. You will see continued outperformance in terms of margins. I think, we continue to work on improvements in terms of our structure of working, and I think this will result in continued improvement in bottom line of the company. It should be kind of more cost control led, OpEx cost control is what they are trying to indicate that you can kind of improve margins from that side. Is that understanding, right? Yes. Got it. Thank it very much. Thank you. We have the next question from the line of Mitul Shah from Reliance Securities. Please go ahead. Thanks for the opportunity. Sir, I have a question on this railway business. In new JV, it will be forging and machining everything in-house, sir? Everything. Yes, everything has to be in-house. Okay. Second question, sir, on the EV strategy, can you give what is our current revenue contribution and for next two years as already EV are now becoming sizable in the Indian market, particularly in terms of two-wheelers and TVs? We are anyway entering into this two-wheelers and TVs also. Mitul, we are not entering two-wheeler, we are entering 2W. I think right now we are not in 2W, we are not affected with this EV strategy right now. EV continues to be a big focus for us, we have already updated in our presentation, where we are in EV and what is the future for us, how we look at EV going forward for RKFL. From the same days EV, this new investment 51% for TSUYO, INR 500 crore we are planning to invest over next five year. Sorry, INR 100 crore we are planning to invest with a revenue potential of INR 500 crore. Would that be in a phased manner or are you expecting last one or two years it will reach? No, I think we are expecting. TSUYO has done close to around INR 12 plus crores already in the last financial year. I think this year also we expect at least 3-fold jump in the top line from TSUYO. Gradually we are putting in money and our INR 100 crore investment is based on some assumptions and CapEx at TSUYO to graduate from only motor supplier for a complete solution of e-Axle and transmission in next 5 years from TSUYO. TSUYO will form a formidable arm for RKFL as we continue our investment in TSUYO to till the tune of 51%, it will become one of the significant arms of RKFL in terms of our EV portfolio and EV visibility as well. Sir, lastly on this, what would be break-even revenue for this TSUYO? TSUYO is already break-even. We are in profit, already in profit. With INR 12 crore turnover also we are making profit. Yes. Okay, sir. Thanks. Thank you. The next question is from the line of Rahul Shah from PK Capital. Please go ahead. Yeah, hi. I I just want to ask regarding this North American customer where you have an LPA. Can you just give me the broad contours of that deal in terms of, you know, is there gonna be a price revision with steel compensation or manufacturing costs increasing in India? Since I think, we have all our global contracts are backed by steel and inflationary changes. Steel is every quarter and inflationary changes every once a year. Steel and, inflation and energy is every once a year. Okay, thanks. Second question is on, you've installed some solar capacity at the plant. Is there any impact on this on the bottom line? Like what's the percentage of your energy cost that you take care of solar, by solar now? The solar, we have just placed the order, I think, we expect the installation to get completed in 9 months' time. Once that happens, to the, that tune our cost of electric energy is going to come down. Okay. Thank you. Thank you. The next question is from the line of Chirag Shah from White Pine Investment Management. Please go ahead. Hello. Thanks for the opportunity again. Sir, just one clarification. Sir, you indicated that the pressing capacity is like 58 million tons. Is it right? Because. Yes. Basically, your operating efficiency is improving over that. Hence the same- It's not only operating efficiency which is improving. We are improving in terms of automations which we are putting in will improve the efficiency. We are right now working and gauging exactly to what tune the capacity we can revise that. Accordingly, in coming quarters, the capacity will be revised. Sir, is it possible to indicate by when do you expect some sort of completion on this? Because this could be an addition lever on your operating leverage side. I think, you can safely say that at least in my press plant, capacity is going to go up by 8%-10%. By via August, this entire exercise is going to get completed. Second quarter should at least see 10%-15% jump in capacity from the press plant. Press plant. Sir similarly on the ring rolling side, how much you can expect more? No, I think, we are at working in ring rolling at the optimum. Yes. Any thought of adding more capacity for ring rolling? No, no. Not at present. Not at present. Okay. This will be helpful, sir. Thank you very much. Thank you. Ladies and gentlemen, to ask a question, you may please press star and one. The next question is from the line of Abhishek from Dolat Capital. Please go ahead. Sir, you have mentioned that your interest cost has gone, your debt has gone down. This is the numbers like interest cost that has gone up quarter-on-quarter basis and why on basis. Is it the impact of the increase in the rate or is this last minute of change in the working capital, that's why it has gone up? Abhishek, if you look at our whole four quarter performance, debt has not gone down in the last minute, and it has gone down each quarter, if you look at all the four quarters number. Interest cost has only gone up due to the increase in rate. It includes bank charges also that increases due to the higher utilization of limits over non-investment. With the increase in top line, Abhishek, we have to use more LCs to get raw material. LC usage, bank charges are also included in the interest rate as well as, while we are reducing our debt, we are not reducing our limits. Limits are same. To get renewal of those limits, we need to pay commitment first to the banks. Those charges are also built into that. How much increase in interest cost in last one year because of the change in interest cost, increase in the interest cost? Which is almost 30%, Abhishek. It has gone up from 6% to around 8%. Okay. Got it. sir, As you mentioned that steel and energy contracts are renewed on yearly basis. this year many contracts will be revised, I think. We are still working with the OEMs. I think it will take another one or two months where we will have the clear visibility. Different countries have different mechanisms for energy and electricity and inflation. We are working with the OEMs. I think we should be clear in next month or so. In it is based on the index itself and it is renewed and on every three to six months. It is not with you? Can you repeat your question, please? Sir, in most of the cases, these prices are priced based on the index itself. That is renewed on every three to six months. That is for raw material basically, and for inflation and energy it is dependent country specific. We need to produce our own invoices and the increases which has happened in India in gas, electricity and other denominators and they are verified and then they are worked on. It takes its own time. Okay, sir. Thank you. That's all from my end. Thank you. Participants who wish to ask questions may please press star one. The next question is from the line of Akshay Karwa from Anand Rathi. Please go ahead. Hi sir. Thank you for the opportunity. Just a question on CapEx. What's the CapEx for FY, that is for FY 2024 and 2025? No, FY 2024, like we assigned, whatever post dividend and debt, we are looking at debt reduction of INR 100 quarter 50 crores. Post debt reduction and dividend payout, whatever cash is there, we will deploy this cash back into the system to grow the capacities, both in terms of forging as well as in terms of value add. Okay, sir. Okay, sir. That's all from my side. Thank you. As there are no further questions, I would now like to hand the conference over to the management for closing comments. Over to you, sir. Thank you all. I take this opportunity to thank everyone for joining. I hope we have been able to answer all your queries and questions. For further inquiry and information, you can get in touch with us or with our industrial relationship providers. Thank you Thank you. On behalf of Emkay Global Financial Services, that concludes this conference. Thank you for joining us. You may now disconnect your lines.