Ladies and gentlemen, good day and welcome to the Rolex Rings Limited Q2 and H1 FY27 earnings conference call hosted by PhillipCapital. Private Client Group. 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 the conference call, please signal an operator by pressing star then 0 on your touchtone phone. Please note, this conference is being recorded. I now hand the conference over to Mr. Dhीरaj Shah from PhillipCapital Private Client Group. Thank you, and over to you, sir. Yeah, thank you, Nazneen. A very good morning, everyone. On behalf of PhillipCapital Private Client Group, I welcome you to the Q2 and H1 FY27 earning conference call of Rolex Rings Limited. Joining us today from the management, we have Mr. Manesh Madeka, Chairman and Managing Director, and Mr. Hiren Doshi, Chief Financial Officer of the company. We thank management for allowing us to host the earning conference call. I will now hand over the call to Mr. Hiren Doshi, sir, for his opening remarks. Following his address, we will open the floor for Q&A. Over to you, Hiren, sir. Very good morning to all of you and warm welcome to everyone on the calls. Along with me, I have Mr. Manesh Madeka, CMD of the company. Would also like to thank PhillipCapital for arranging this call, call, and Tim SGA is also there with us, our investor relations advisors. I hope you all have all received our investor deck by now. When we spoke on August 26th, we told you that the constraint in Q1 was execution, not the demand. And, uh, that in Q2 would reflect in the true strength of our order book. I'm pleased to say that is how it has played in— played out during the quarter. Q2 of fiscal '27. Fiscal '27 Q2 has been the strongest quarter in the history of the company on revenue side, on margin side, on efficiency and profitability. Coming to the, uh, Q2 fiscal '27, Revenue from the operations came in at ₹389 crores. which is up by 43% year-on-year and 28% quarter-on-quarter. These number includes a one-time benefit of around ₹18-odd crores of customs duty what we paid and accounted as a revenue by, uh, from the US tariff. Which, as we had already indicated on our earlier call, that we are going to recognize in revenue. Excluding this revenue, our overall revenue grew about 30% year-on-year in Q2. FY27. The component sales, that is consisting of rings and auto component both, grew by 32% year-on-year to ₹330 crore. in this quarter too. Revenue from auto components grew by 68% year-on-year to ₹177 crores, while revenue from the bearing rings grew 6% to ₹153 crores. Auto components now contribute 54% of our overall sales. Compared to 42% in Q2 of previous fiscal. This shift towards higher value precision machine components remains the single biggest driver of our margin profile, and it is only auto components. As we explained in our earlier call, even in August 26th, wherever our products carry more value-added processes including bearing rings for EV and hybrid applications and other critical rings, we earn similar kind of margins on the both the segments. Looking at the regional mix, exports grew by 55% year on year. to ₹167 crores and now account for 51% of component sales. Within auto components, exports grew by 89% to ₹129 crores, while domestic auto components grew by 29% to ₹48 crores. In bearing rings, our domestic business grew by almost 10%, reaching to ₹115 crore. While bearing ring exports were broadly flat at ₹38 crore as industrial demand in Europe remains soft. Here our strategy is to reduce dependency on single or couple of customer group by developing new bearing ring customers overseas, particularly in Europe. and US, where we have already strong automotive relationships. And by approaching these plants of our existing customers, that we do not yet supply till now. By geography, uh, the US was the standout in this particular quarter. Our US component revenue more than doubled year on year to ₹92 crores as customers who had held back through FY26 return with the meaningful volume. This includes a key customer whose volume fell by 35-40% in fiscal '26. As we indicated in August, that business is now back on track. with its fiscal '25 level. By end user industry, passenger vehicles contribute almost 47% of our component sales in Q2, commercial and heavy vehicles about to 30%. Industrial about to 17 to 19%. And EV hybrid also consisting over there. Coming to the margin side, gross margin for the quarter has sharply increased, up by almost 700 basis points year on year, reflecting a richer product mix, disciplined raw material management, and the duty refund. EBITDA grew by 72% year on year to ₹94 crores. With EBITDA margin at 24.2%. Up by almost 400 basis points. Profit after tax grew by 68% to ₹74 crores. With PAT margin of 19.1%, up 280 basis points. I want to be transparent about the moving parts. Excluding the refund, our EBITDA margin for the quarter would be around 21%. That was delivered in quarter where ocean freights ran nearly 3 times compared to their normal levels. Fuel gas prices have gone up by 40%, and the other consumable costs rose following the escalation of West Asia conflict. Which is why other expenses were higher in this particular quarter. Our customer contracts pass through raw material and foreign exchange movements but not freight, so a spike of these kind of sits with us in the first instance. We have absorbed most of this so far, and we are in active discussion with our customers, particularly in the US, uh, on sharing of this freight burden. We have done this before when we had a Red Sea impact before 3 years back. During the last major freight spike, customers reimbursed part of the cost and one customer changed its delivery terms for that period. The early response this time has been positive. One more input, that ocean freight, we are already observing decline from the month of October '26. And this decline auto components continue to grow as a share of our mix, we expect operating margins to move back into our guided range of 21-22%. Coming to the first half, uh, comparing to the, uh, first half of fiscal '26, for the first half, revenue from operations grew by 23% YOY to ₹694 crores. Auto components grew by 28% to ₹318 crores, while bearing rings were flat at ₹271 crores with the Q1 labor constraint, as we indicated earlier, it has offset by a stronger Q2. Exports for the half grew by 26% to ₹296 crores. Gross margin for first half stood at almost 58%, up by 680 basis points year on year. EBITDA grew by 40% to ₹163 crore. With EBITDA margin of 23.5%, up by 280 basis points. Profit after tax grew by 44% to ₹ 134 crores with PAT margin of 19.4%. On the balance sheet and cash flow side, we remain completely debt-free. After completing the buyback of ₹180 crore during the first half, we continue to hold about ₹260 crores in cash bank balances and with the liquid investments. Operating cash flow for the first half was at ₹68 crores. This was lower than the last year because of working capital increase about by ₹74 crore. As inventory and receivables rose up with the step-up sales in Q2 and with longer transit times on our export shipments, we expect a part of this unwound in the second half as freight links are expecting to be normalized. Another factor, what we discussed last time, that is the US tariff, what has impacted. Let me address a question many of you have asked us over the last few quarters, that US tariffs are no longer impacting our business. Our customers have accepted the current duty structure. And order flows from the US have quite normalized. Our US automotive revenues more than doubled year on year in Q2. And we didn't have, uh, rather lose any single customer because of this tariff disruption. As of now, on the duties what we paid earlier, we registered with the US Customs, uh, and now accounted the majority of the refunds of the duties paid. Under the earlier tariff regime. As committed, these refunds are being recognized as revenue in this quarter too, which is giving benefit around of ₹18 crore. It's a one-time item. On our order book for the coming first, second half of fiscal '27, our order book remains strong in the range of ₹120 to ₹125 crores per month. Customers who held back through fiscal '26 are placing orders with confidence again, and the new programs we won last year are now scaling up. With the labor situation fully normalized from the start of the quarter, we were able to convert this order book into output at the pace we had planned. As we said in August, the output we could not deliver in Q1 was deferred, not lost, and Q2 bears that out. As we mentioned earlier, July was the highest monthly revenue in our history, and we sustained that run rate through August and September. We expect H2 fiscal '27 to be stronger than H1, uh, because of these 3 reasons. First, new programs. One of the 2 new customer plants begins supply in Q3 and in early Q4. of fiscal '27. And the programs we onboarded over the last year in the last quarter, or maybe third quarter of last fiscal, are moving from initial volumes towards their peak run rates. Programs those started in the last quarter of fiscal '26 are ramping up through this year, and one of our key customers has given us orders for its new plants. As well as incremental volumes on existing program. Apart from couple of US programs that the OEM still has on hold, the programs in our earlier announced pipeline are coming back, and the new programs we won in fiscal '26 have started supplies. New customer validation in our industry takes 15 to 18 months minimum, and much of that work is now behind us. Secondly, the capacity— we are running at 65% capacity utilization today, and we expect to move towards 70%, 72% by end of this fiscal. within our planned CapEx of ₹30 to ₹40 crores a year. That gives us operating leverage as volumes grow. Our forging and machining facilities are fungible across bearing rings and auto components, so we can direct capacity to the programs that offer the right volume. tenure and right margin. Thirdly, the customer association in Europe. We continue to build on our expanding automotive presence, are in discussion with couple of tier 1 suppliers for the commercial vehicle and industrial products. And we are also in discussions with another new customer in the US. And in India, existing bearing customers continue to increase their wallet share in automotive bearing rings. In addition, one of our domestic customers has diversified into industrial bearings, and we have already submitted sample for that business, for which we are very much positive. Looking ahead, uh, taken together, the trends what we spoke about in May and August are playing out as we expected. The US has came back, Europe continues to grow on the back of our automotive presence, and our domestic business is steady. With H1 revenue growth of 23%, we remain confident of delivering at our guided revenue growth for fiscal '27. Looking further out, we continue to see fiscal '28 growth moving towards high teens as new programs reach full volumes. On margins, we expect fiscal '28 EBITDA margin to be around 50 to 75 basis points higher than the fiscal '27. We are also building a new growth avenue for the medium term, and we have received some registrations, initial approvals in the sectors of defense and aerospace. And we expect revenue from this segment over the next 12 to 18 months. We are working with one of the very senior consultants in this area. And our focus is on round and hot-forged components that suit our existing facilities. We are seeing inquiries for larger bearing rings used in wind and industrial equipment, which carry better margins than our traditional rings. And we continue to explore. Inorganically to add value-added processes in India, which is remaining at an early stage as of now, but we have appointed a global agency to help us to evaluate partners. The aim is to bring more value-added processes and the ready OEM access to the— that comes with them to our facilities in India. On capital allocation, the buyback was the first of many steps in returning value to our shareholders. With a debt-free balance sheet and a strong cash generation, the board will continue to evaluate dividend, further round of buyback, and other avenues. While preserving the cash what we need for our growth and expansion. Fiscal '26 tested our resilience. It taught us that no business is immune to external disruption, but a business built on strong fundamentals with customer relationship and operational discipline can absorb the disruption and come out stronger. First half of fiscal '27 has shown what the business can do. Well, those external pressures is higher volumes, a richer product mix, stronger margin, and a cleaner balance sheet than any point in our history. As I look ahead, uh, I see Rolex Rings as a company that is well capitalized, well positioned, and well prepared for the next phase of growth. What sets us apart in our facility— the range of product what we can make, our precision, our in-house tooling expertise, our years, and the depth of our customer relationships. Our ambition remains unchanged to be the most trusted precision forging partner for the world's leading bearing and automotive OEMs as well as Tier 1, Tier 2 players. We are well on our way. With this, uh, I would like to take a pause. Thank you very much for your patient hearing. I request PhillipCapital that we can now open the floor for the Q&A session. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Varun Jain from Dolat Capital. Please go ahead. Yeah, hi sir, good morning. Uh, starting with a bookkeeping question, so, uh, can you disclose your scrap revenue and export incentive for, uh, Q2? Scrap revenue for Q2 is ₹23 crore and export incentive is ₹4.2 crore. Okay, and in your segmental reporting, the tariff refund will sit into other revenue, right? It will not, it will not be included in the bearing or auto component. If I look at the segmental reporting, right? Yes, it would be reported as an other, uh, under the other income. But on the quarterly numbers, what we have displayed, uh, what we have disclosed, it is there on the revenue from the operations on the very first line. Why the divergence? Okay, and sir, your gross margin has expanded quite a bit in this quarter, but, uh, all the other players in the industry have been reporting gross margin decline due to, you know, pricing pressure in metals and everything. So See, first of all, uh, the gross margins have increased, or rather better yield, is because of the product mix. Uh, the auto component business has gone up significantly. That is one of the reasons. And another good part of our business is that we have 100% pass-through mechanism as far as the commodity or metal price is concerned. So whatever the commodity prices have been increased in the, uh, you know, previous quarter, uh, previous couple of quarters, those are being passed and those are being, you know, recovered from the customers. Got it, sir. And, uh, now, sir, coming to the auto component export business, so, uh, sir, uh, what, what is the extent of recovery we are seeing in Halison? Are we hitting a 20-25 CR per month run rate here? And Do we expect to cross ₹500 crore in auto component export revenue in FY28 or FY27? FY27 auto components, uh, overall business, uh, definitely we will be crossing, you know, uh, this, uh, 550 crore. That is minimum what I'm expecting. Okay, and, and, uh, does this include the Allison Tina opportunity which we were expecting to, uh, you know, get some business from? No, no, no, no, it is not included. Let me tell you that in the last fiscal, you know, we had in this auto component business revenue, uh, was somewhere about, uh, you know, uh, 500 and, uh, 5-odd crores. Let me tell you, in this first half I have already achieved somewhere about ₹318 crore, and we would be crossing more than 550-575 by end of this fiscal. And then, sir, going forward in FY28, FY29, how fast do you expect this to grow? Uh, in auto component segment, at least minimum 20 to 22% year on year. So isn't it too aggressive? Like, why— what drives this confidence? Where will this additional demand come from? See, it is the first of all additional demand, something what we have lost, uh, rather it was not there in last year because of US tariff and all these things. Apart from that, the new programs what has been started in the previous fiscal, the couple of new programs which are about to start, and the peak ramp-up of these, uh, programs will be there in fiscal 28. '28 and '29. So we are very much confident on that part. Sure, sir. And before I fall back in the queue, any color on the defense and aerospace entry which we are expecting over the next 12 months? As I told you, uh, that if we are very much in a primary stage, it would be difficult to have, you know, a significant number or a considerable number at least in next, uh, 12 months. But beyond that, we expect some entry over there, obviously. So what is the application we are supplying to? If you can tell us that. So those certain things I think will not be able to discuss over the call. Applications in all, you know, wherever the hot forge components are required. a round job kind of thing that we are able to produce, and those are being used for various sectors in the defense, but in aerospace, certain Uh, engine parts, certain other technical transmission parts, what we are able to produce. Sure, sir. I'll fall back in the queue. Thank you. Thank you. Next question is from the line of CA Garvit Goyal from Serene Alpha. Please go ahead. Hi, am I audible? Yes. Good morning, sir, and congrats for a good set of numbers. Uh, first question is on the order book, uh, the 120 to 125 CR runs rate. Uh, I think historically also Uh, we used to be around this number. So looking at the current environment, specifically when you are speaking about the auto component business, and along with some inquiries coming from the for larger, larger size of components, I think from the wind applications, right, that you mentioned in the opening remarks. Uh, are you seeing these, uh, order book run rate on a quarterly basis to have a huge jump, uh, maybe for, uh, from the upcoming quarters. Uh, can you put some color on that? Yes, the order book what I mentioned is, you know, it's ₹120 to ₹125 crore. That is what there for next, you know, few months. And as far as the windmill and other bigger size of components, you know, as I mentioned that we need a good amount of time in the development, in the testing, and all these things. So in the coming quarters, not there in this fiscal, but in fiscal '28, we are expecting some good numbers for these kind of components which are mainly there into bearing ring segment and, uh, other industrial segments. But the auto components, uh, what we have already developed. And the ramp-up, as I was mentioning, it will be started. So the, uh, these ₹125 crore, uh, monthly order book, if you ask me, in fiscal '28, what we envisage is maybe increased by at least, uh, you know, uh, 5 to 7% month on month. Okay. Okay, understood. And, uh, can you also let us know, uh, from which geographies these inquiries are coming, uh, specifically, uh, for this wind application, the larger size of bearing? Sorry, I didn't get your question. Uh, from which geography are you seeing these inquiries coming? Is it domestic or is it from international geography for larger bearings? No, it's the company. Yes, sir. Domestic market, or mean Okay, from the domestic market itself. Okay, and, uh, secondly, uh, how Europe is doing as a geography for us? How are you seeing the things happening there in terms of the demand and, uh, how we should expect, uh, the inquiries from Europe in the coming quarters and execution in the coming quarters. See, Europe was the concern prior to, you know, fiscal '26, and we had a good return in Europe, and we came back to somewhere about, you know, 23% of, uh, 23-24% of contribution from the Europe side on our overall business. And, uh, majority of the new orders what we won, what programs have been started, those are from Europe, and now those orders are being ramped up. And even the good inquiries are there from the European sectors for auto components, and we are exploring from our side to develop a bearing ring customers, as I was mentioning, for the industrial components and automotive applications. So in, in totality, Europe, a gradual Uh, but, uh, the firm or substantial— with the substance, we are expecting a growth curve. Understood. So just one last question. Looking at the conversations I listened to and the answers I got from you, what I am understanding is the demand environment is pretty good now. Uh, as compared to past, and we are entering into the, uh, new products as well and, uh, trying to, uh, get new customers onboarded. So looking at all these things Uh, can we expect the growth rate that for this year? So I think we will be growing at the 15%, the number that you have given in the past. Can we expect that growth rate to change upward from '28 onwards, maybe, uh, on the 25 to 30% kind of number? Can we expect Rolex Rings to grow at that pace going forward? See, we do have that potential. As I was mentioning, there are the couple of reasons for our growth because of our, uh, you know, the sound order book. Uh, the forecast, or rather the dispatch schedules given by the customers that would be there in the future. And with the couple of new customers, what we are talking for the business which are supposed to be started in '28 or maybe in '29. So, uh, we can definitely, uh, achieve, or rather able to manage, 25-30% growth, and, uh, it is not something surprising that if this continuation of this trend, uh, subject to not to have any disturbances of geopolitical and other economical factors from the overseas market. Uh, maybe we will be having quite better number, even higher teen or even more than that, more than 22%, 23% growth. Definitely we can expect in fiscal '29. Understood, sir. Understood. That's helpful. Uh, I'll join back the queue, sir. Thank you very much. Thank you. Next question is from the line of Mihir Vora from Equirus Securities. Please go ahead. Hi, thank you for taking my question and congrats on a good set of numbers. So even when I see our numbers, even when I take out the tariff number we broadly have done around a ₹370-odd crore kind of a revenue, and within that our product revenues are around ₹110 crore per month. So did you rightly point out that we may be looking at ₹120 to ₹125 crore per month in the second half. And are we seeing that kind of attraction in October as such? Yes, we had the same traction in October 26th. It is there, and, uh, we are expecting this number, 120-odd crore something, month on month in the second half of this fiscal. And this will be the product revenues, right, excluding the scrap and export incentives. Yes. Okay, and just one thing here, like in terms of tariff refund, we have approximately seen a ₹24 crore tariff refund till now. Any other, like more, can you just throw some light on any additional amount which is pending going ahead? No, precisely I'll tell you that it's not ₹24 crore, it is somewhere about ₹21 crore what, uh, the US tariff refund accounted. Uh, marginal, very marginal amount is yet to receive. Okay, but not major like an 18 crore kind of figure? No, no. Okay, so we have broadly done past that. Okay, and secondly, sir, in terms of bearing industry Now based on our discussions with the customers, do we expect some kind of recovery in the bearing industry overall in the next 1 year or a 2-year time frame? How are you seeing the market as such right now? Sir, you must have seen that in bearing ring, in domestic business, uh, if you just see in Q1, I had a revenue of ₹86 crore, which has gone up to ₹115 crore in Q2. So overall, if you compare even the first half of this year for, uh, first half of previous year, I have a growth of 10%. Uh, in spite of having some reduction in one customer group, still I'll be having a growth of 10-odd percentage in the domestic bearing ring business. Which means that with other customers I am growing, with other customers they are, uh, giving me more components, and I'm trying to add new bearing ring customers in domestic. And also we are trying the same thing for the overseas market where we expect that down the line 6 months we would be having some better number in the export bearing ring too. Right, right, right. All right. And so lastly, when I'm just adding up the numbers on your PPT, the bearing revenue, auto component, and the scrap incentive and tariff refund I think there's some bit of difference which I am getting. I'm getting a number of around 375-odd crores versus 389. So like, can you just again give the breakup in terms of domestic export bearings and domestic and export auto component numbers? See, domestic bearing ring for the Q2, it is 115, 115 crore. Okay, domestic auto component, it is 48 crore. Okay, bearing ring exports, it is 38 crore. Right. Auto component exports, it is 129 crore. Okay, so these are the component numbers, right? This is 330 crores total. Yes. And then your scrap-off Scrap of 23 crore. Okay. Export incentives of, uh, 4.4 crore. Okay. Uh, again, uh, this, uh, US duty refund accounted is somewhere about 18 crore. duty reimbursement would be there in the, uh, coming quarters also. Okay. And 15-odd crore, the duty reimbursement what we got from our customers. Okay, so this is the additional amount of duty? Yes, this would— and, and this So, but will this reverse going ahead? Because now we are getting the duty refund as well on the other side, the tariff refund. No, see, as of now, now from last November 26th 25 onwards, there is a duty of 25% which is not being refunded now onwards. And, uh, what we are paying to the customs, uh, by the clearing, uh, clearance of the goods, and we keep into warehousing. Whenever my customer is lifting, they are going to pay back that 25% to me. So when I'm receiving that thing, 25% from my customer, it, it is being accounted as a revenue. And when I expend it, it is to be charged in my P&L. Let me tell you one thing, that in this quarter 2, there is a custom duty of almost 10-odd crore rupees which is being paid, which has been paid by me but yet to recover from customer. I'm talking only for the Q2. Okay, got it. That would be coming subsequently. Sure, okay sir, okay, that's all from my side. Thank you, Hiren. Thank you. Next question is from the line of Vineet from Toro Wealth Managers. Please go ahead. Um, thank you so much, sir, for the opportunity. And, um, just confirming with the question of previous participant, I guess I didn't hear it properly. Um, the monthly revenue run rate that you are guiding is, um, ₹120 crores, right, for the second half? One for the second half, it is 120 crore. Yes. Understood, sir. And sir, is it, uh, like in quarter 3? And if in— when we go to the quarter 4, can we see an improvement in that as well? See the things are improving. Yes, quarter 4 would be better, uh, even with compared to quarter 3. As I told you that couple of customers or other programs will be started in end of Q3 and in beginning of Q4. Understood, sir. Answer about sustainable margins excluding the tariff income, uh, tariff refund, um, what is the margin that you are guiding for? For this year and the next year. See, in spite of having these kind of, you know, incremental cost, uh, this ocean freight, you know, it has increased by threefold or almost 3 times. In spite of having those things adverse and even the other inflationary— this thing, I am able to manage my margin at the rate what we had in previous quarters, which is somewhere about approximately 21%. If now the things are further, you know, ocean freight, we observe that it is going to be declined, or rather it is on the declining phase, I expect to have some kind of incremental margin in the second half and definitely there in the next fiscal, maybe by 50 to 75 basis points. conservatively. Understood, sir. And sir, if you can give us a number about what's the total freight cost that we are incurring, let's say every quarter, just to have a context. Say for example, let me tell you, in fiscal— rather, first half of 26. You know, uh, we spend somewhere about 10 crore rupees. For Ocean Freight in the first half of fiscal '26. Now for fiscal '27, these first half April '26 to September '26, we paid more than ₹25 crore. Fair enough, that gives a good, uh, view about the freight expenses. Um, thank you so much, sir. All the best for the coming quarters. Right. Thank you. Next question is from the line of Salil Desai from Marcellus Investment Managers. Please go ahead. This difference is because of we are exploring customers for the auto components, auto components which carries better value-added processes. Better volumes, margins are better. So, and the main program what we won, you know, the, uh, certain plants of our existing customer which were not at all there in before year back So now they are on the board. And they have multi-locational plant across the US, Europe, Mexico, Canada. So we are getting, you know, those plant into our system. That is the main range. And in bearing ring, particularly end up our exports was there in Europe, wherein majority of those things are for the industrial application bearing rings. So now we are trying to get the new automotive bearing rings, uh, bearing manufacturers in Europe and US both, but the demand on the bearing ring side It is slightly, you know, uh, less compared to the auto components what we have. Thank you. Uh, good morning, Hiren bhai. So one question I had was, I'm still not very sure the— and if you can explain again, it could be very helpful. Uh, what is the difference in the growth rate between bearing rings and Autocomp in the export market? So one is growing at 89%, whereas bearing rings is growing just about 6%. So what exactly is this difference due to? See, And auto components, we have a wide range of the auto components. When particular customer, if they Uh, you know, allowed or they approved me, they always tried to get more and more components because of my supply chain, my better quality, my high precision level. Right, but would it be fair to think that if, let's say, you're pursuing automotive bearing customers also, uh, but given that, you know, both the automotive components and automotive bearings would have the same underlying industry Uh, the growth incrementally should be better. Is that a fair assumption? Yes, definitely. In automotive bearing rings also, we expect better, and that is why in domestic bearing ring, I am, uh, grew by rather more than 10%. That is why, right, right. And just to, uh, end this, you're saying that partly your growth differential is because you're deliberately targeting more auto comp? At the same time, industrial demand in Europe is also weak. So these two— not 100%, not, not 100% that we are deliberately targeting only auto companies. Even I am very much inclining, uh, inclined to have a bearing ring customer who are there into EV, hybrid, and those things. And even in a normalized kind of automotive market. I'm happy to supply that, and, uh, we are incrementally getting that thing. Uh, you know, forging lines, my capacity, what has been installed and where we have some spare capacity. Okay, so the focus is better margin products rather than just what category they belong to, right? Better margin, margin, and the products which are suitable to my Understood. Okay, thank you very much, sir. Thank you. Next question is from the line of Prana from Rare Enterprises. Please go ahead. Right, uh, thank you, sir. I just have one question. Uh, sir, uh, in past we have seen that bearing industry in India has grown at a certain level. And you have lagged. And, uh, I think that now the time is coming because I see many companies opening plants here, and US also has tariffs on, uh, N-1 product coming from China, then also they consider it as Chinese. So I see some news here and there where Chinese, uh, like companies are shifting production share or plants from China to India, and that's why I feel that now you can have higher growth than Indian bearing industry. Am I right in this, or this is too speculative? Sir, I would like to endorse partially, uh, Definitely, we are also facing, you know, some kind of positive, uh, as far as the, you know, the range of the bearing rings what my existing customers are into. They are also expanding into different range, bigger size of rings. And they are expanding their capacity for producing more bearings domestically, which earlier they might have imported from their principals. Or from China. So, uh, only the constraint is here for the higher size of bearing ring is the availability of raw material. But apart from that, uh, we are getting same kind of, uh, you know, uh, this feeling that Uh, domestic bearing manufacturers who are into automotive and in versatile other industries, they are expanding and they are, uh, growing in their the current range of the product. Right, so we can assume that we can now match Indian bearing industry growth or surpass it for the next 5 years. So next 5 years, it would be a bit long period to tell you, but definitely we will be trying our best to get the, uh, the current run rate of the bearing industry, what we have, uh, that kind of growth what we expect in our bearing ring business. Thanks a lot, sir. Thanks a lot, and congratulations on our great setup. Thank you. Thank you. Thank you. Next question is from the line of Hiten from Sequent Investments. Please go ahead. Yeah, hello, good morning, sir. Am I already? Yes, yes. So my question is on the auto components business, sir. You have guided around ₹550 or ₹575 crore odd revenue. Uh, in FY27 from this business, but, uh, we have already did roughly around 340-odd crores in the first half. So we are targeting something around 250-250 crores in H2. So are we being conservative or So this growth should be more in H2. That's the first question. You're talking for the overall auto component business or export, uh, only? Overall, sir, I think we did ₹177 crore in HQ2, right? Yes, so my, my Q, uh, first half number is almost ₹318 crore, which I expect to close maybe, uh, somewhere about ₹625 crores. Uh, I'm sorry, but sir, I think you guided roughly around 570 odd crores, right? In the earlier 600 odd crores. Okay. And sir, what kind of, uh, growth we are expecting in the bearing segment, sir? See, in auto components overall business, you know, domestic business, domestic auto components is bit fluctuating because, um, here in domestic I have very few, uh, players who are rather sourcing the components and where I'll be able to serve. So their demand is bit fluctuating here and there. Uh, on that part, considering those things, I would like to be at somewhere about 575 to 600 odd crores. Same, uh, almost 8 to 10, 10, 10-odd percentage. 10-odd percentage, which we have did roughly 540 crores on last year. Yes, yes. Okay, okay. And just to conclude, our growth will be largely coming from the export market in both the segments. As you also mentioned, the Europe market is recovering in the bearing. From export, I am expecting much of the portion, more than 75% portion, from the auto components. And in domestic, much of the portion is from bearing rings. Understood, sir. Yeah. Okay, sir, I'll get back and thank you. Thank you. Next question is from the line of Kishore Kumar from Unify Capital. Please go ahead. Yeah, so, uh, one, sir, uh, contract on the date set of numbers. So I just have a couple of queries that, uh, on the answers that you have given to the previous participants. So you mentioned 15— sorry, 10 crore or 15 crore of duty refund. Apart from the tariff refund, this is coming from our customers, and you expect that to continue in Q3 as well? What is the quantum that we're expecting in Q3? See, I told you the same number, it would be continued into Q3, Q4. Okay, because it is linked with the lifting of the component or the, uh, from my warehouse. So, uh, we customers are going to lift the same kind of number on which 25% duty is being reimbursed by the customer. So this is the, this is the value that we paid last year and we are getting it this year refunded from our customers. Is that correct or it's, it's a different— No, it's not exactly the last year. It is the supplies what I'm continuously making. And, you know, uh, see, the goods which are lying at the warehouse, at the time of lifting up there, wherever those invoices are being due, and with that they are paying me on a monthly basis this duty reimbursement. So, okay, this, this is actually a recurring one which can sustain in the coming quarters as well. It's, it's a regular part of the business. Okay. Yes, yes, yes. Got it, sir. Got it. So second question is on the domestic bearing segment growth. So I understand that Q1 you had an impact because of the labor constraints, but Q2, if I compare it with the domestic bearing companies, uh, the large ones, all have done 20% more growth. You did mention about one group's revenue coming down, but what actually, uh, explains the relative sluggishness in our performance vis-à-vis the bearing company's performance. See, in the first, uh, quarter of fiscal '27, my bearing revenue for domestic was ₹86 crore, and it has touched ₹115 crore in Q2. So I do have more than, you know, uh, this thing, 25% growth over there. In the domestic bearing range for this particular Q1 basis, हाँ। First, if you compare on a 6-month number, I have a growth of 10-odd percentage because the first quarter was low in this year. That's why. Understood, sir. But if I compare it on year-on-year basis, Q2 last year was actually 100+ crores, and now we have done 115 crores. I'm trying to understand if there is any, uh, uh, way that That can explain actually the difference in the bearing company's growth versus our growth in the domestic bearing segment. See, not immediately. I, I told you even the earlier response also, not immediately, but down the line, next fiscal, we will be having that thing. If you, uh, You know, if you compare my annualized number, what we had in previous fiscal and what we are going to have in this fiscal, it would be somewhere about 10-odd percentage growth. Got it, sir. Understood. That's it, my friend. Thank you all the best. Thank you. Next question is from the line of H. Shah from Quantum AMC. Please go ahead. Yeah, thank you for the opportunity. Uh, just, uh, 2 questions from my side. Firstly, domestic auto components, um, where have we seen the growth from? Because If I just see the last 3 years, FY24, FY25, FY26, annual basis, we've been in the range of 170-odd crores and haven't grown there. And this particular quarter you've mentioned, I think we've grown 29-odd percent. So if you could, you know, just give some idea from where it's coming, any new customers onboarded, that would be great. See, I told, uh, just now that in domestic auto components, the market is bit, uh, fluctuating, or rather on the, uh, strong way, the overall their product customers' production plan. What we had in this Q2, that is ₹48 crore domestic auto components compared to ₹40, you know, ₹4 crore on in the last quarter, that is first quarter. But on the annualized basis, if you see last fiscal, I had a revenue of somewhere about ₹170 crore for the auto components, which, uh, in this first half only I have reached at ₹93 crore. So in domestic auto components, I'm expecting somewhere about 10, uh, in between, uh, 12 to 10 to 12% rather growth. So, uh, there we are, you know, the products what we are producing, the transmission parts and the semi-finished components what we are producing, uh, we are supplying to a limited customer over here. Couple of OEM orders what our customer got, and you know, in turn we got that orders, but those are not materially came on the, you know, at the OEM level, the design fluctuation, the design change, and their output. Uh, let me tell you, for the EV kind of vehicles in the domestic OEM, what we got the order but the way it was expected, it has not, uh, came on the floor, and that is why the number is not that, uh, big. Okay, thank you. Thank you. Next question is from the line of Dheeraj from Incred Equities. Please go ahead. Uh, hello, Hiren sir, and, uh, you know, many congratulations on a great set of numbers. I just had a couple questions regarding that. Can you like break up what was the volume growth and revenue growth, like volume growth and value growth this quarter? And also what was our, you know, manufacturing— like, what was our sales volume and what utilization we are working at? So, you know, that kind of gives us Volume growth compared to the previous quarter, that is first quarter, uh, and comparing to the second quarter, the volume growth is almost Uh, 18%, 1-8. Okay, in terms of my, uh, volume growth and, uh What was your, uh, later part of the question? Okay, and what utilization we are working at right now? We, we are at somewhere about 65% utilization. Okay, and we would— we are very confident to kind of reach 70%, uh, of that number by year-end, right? Yes, yes, 65%. But if you ask me for a particular last couple of months, I have already reached the level of 68, 60, uh 67-68 percentage, but considering the first quarter, for the first half it was somewhere about 65. Okay, sure, sir. And like this quarter, as we saw that, you know, gross margins have been much better if even if we kind of remove the You know, the numbers that are like the export incentive that we have gotten, the refund that we have gotten, we have still performed much better from our historical 50% kind of gross margin. So can you give some kind of guidance like going forward, as you know, we are expecting most of our growth coming from the export and auto component segment only where the margins are again higher. So the mix shift is going to be towards that side only. So what can be, uh, you know, normalized kind of gross margin going forward as the raw material is not going to affect us anyway. See, raw material is not going to affect the— anyway, but there is some kind of time lag between, uh, the actual pricing and when the customers are going to, you know, change the sale price or realization. So that kind of small impact would be there. On a normalized way, or rather what we are expecting, the gross margin in the range of, uh, you know, uh 49 to 53%. Now, in particular Q2, as I had a good amount of growth in the auto components business and where the margins are much on a higher side or yield is quite better, that's why it has shoot up. But broadly, in the range of, say, if I'll be having a, you know, a sales mix of, say, 50-50% bearing ring and auto components, then I would be having 50% Has the situation improved from, uh, like the last quarter, or how is it right now? kind of, uh, margin, meaning gross margin. Okay, okay, great, sir. And, uh, what is the, like, the current scenario regarding exports? Like, uh, you know, last quarter there were a lot of, uh, not just the cost of the freight, ocean freight, but also there were higher costs regarding the containers and availability of all of that. So Yes, it is quite improved now. There is no issue as far as the availability of containers are concerned. And even as I was mentioning that ocean freight has also started declining. And, uh, that is from the last month, and we will be having that positive ओके शास्त्र थैंक यू सो मच फॉर आंसरिंग द क्वेश्चंस आईल गेट बैक इन द चीफ आफ्टर मी अबे थैंक मच यू सो Thank you. Next question is on the line of Sanjay from Ilara Capital. Please go ahead. Yeah, thank you for giving me this opportunity. Now I would like to request you the market share currently we are having in both the bearings and the auto components, uh, you know, vertical which we have. See, globally bearing ring is a very vast, or rather quite big, uh, market, and I am there into a particular range of the product. Uh, again, we are there into the bearing rings which are produced through a forging route. So it would not be possible for me to tell you the overall global market share as far as the bearing ring and even for the auto components, because we are also not there in the entire range of auto components. Right, we are mainly there into transmission and chassis components and so on. But if you ask me, in a domestic business, uh, in my forging rings activity and in my addressable segment where I'll be able to have a, uh, the range of say 50 mm to 1000 mm diameter, there I'll be having somewhere about, uh, in between 30 to 35% market share. Oh, okay, okay. Uh, this is great, sir. And, uh, can I— I mean, just ask you that, uh, whatever business we're doing in— this is for steel business, uh, are we planning to go ahead in some other verticals? In aluminum alloy or anything else? I mean, if I may ask on this. We don't have any, any such plan for the recent future as of now because there is a good amount of opportunity in our existing one and we do have spare capacity over here. So our main concentration is to utilization our existing capacity and we are getting good responses or new opportunities in our existing alloy steel forging business. Okay, okay. Thank you so much for this, sir. Uh, I'll come in the queue. Thank you so much. Thank you. That was the last question for today. I now hand the conference over to Mr. Hiren Doshi, sir, for closing comments. Would like to thank you everyone for joining us, and I hope we have been able to answer all your queries. We look forward to such interactions in the future. In case you require any further details, you may contact us or to SGA, our investor relations partners. Once again, I thank you, PhillipCapital, for arranging the call, and also thankful to all the participants for sparing your time and, uh, listen it quite patiently. Thank you very much. Thank you very much. On behalf of PhillipCapital Private Client Group, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.