Ladies and gentlemen, good day and Welcome to Bharat Forge Limited Q1 FY 2025 Earnings Conference Call. As a reminder, all participant lines will be in a 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 the star, then zero on a touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Kedar Dixit, CFO, Bharat Forge Limited. Thank you, and over to you, sir.
Good afternoon, ladies and gentlemen, and thank you for participating in the call. I'll take you through the consolidated business highlights for the quarter. Along with me, I have Mr. Amit Kalyani, Vice Chairman and Deputy Managing Director, Raj Gopal, who is in charge of IR operations, Subodh Tandale , who heads our component division, and other finance colleagues. On a consolidated basis, our ROI revenue grew by about 6% to INR 4,106 crores, while EBITDA grew by 23% to INR 759 crores, and PBT has also seen a significant growth of 30% to INR 469 crores. EBITDA margins improved by 260 basis points on a YoY basis to 18.5% in this quarter, with bulk of improvement driven by Indian entities. Consolidated balance sheet continues to remain robust, with ROC moving in the right direction of our target, and currently, we are at 18.4% as of June 2024.
Talking about standalone business highlights, we had a stable performance in Q1 with revenues of INR 2,338 crores, with a growth of about 10% YoY. Standalone EBITDA grew by 18.9% on a YoY basis, translating into EBITDA margin of 28.1%. PBT grew by 24% to INR 523 crores. Export performance saw good recovery in oil and gas business, which was offset by a decline in PV business. During the quarter, the company has secured new business worth almost INR 980 crores across various sectors, including defense, aluminum and ferrous castings, and core forging business. Balance sheet also continues to remain strong, with ROC and RONW improving, with a strong liquidity position. Talking about overseas subsidiaries, the operations in EU aluminum continue to be stable, with tangible progress made on pricing support from our customers. This is a price repair activity which we are carrying on.
In spite of weak demand environment in Europe, in this quarter, our European operations posted an EBITDA of INR 37 crore, while U.S. operations reduced their EBITDA loss to INR 23 crore. We continue to work to improve these operations. Utilization in Europe and U.S. aluminum was at 75% and 50%, respectively. The weakness in overseas PV business will also have the next one or two quarters' impact on the aluminum business because it currently caters 100% to PV segment. Now, I will hand over to Amit Kalyani, Sir, for the management commentary on the business side.
Thank you, Kedar. So overall, I would say it was a satisfactory quarter on the consolidated basis, with performance ticking most of the boxes. On the standalone front, I think we've had a good quarter. We're able to maintain our margin despite cost pressures, especially on the logistics front. Oil and gas business is starting to show positive momentum. Our defense business is continuing to ramp up smoothly, and more importantly, we continue to win significant new orders and have very active business pipeline discussion. The return ratios continue to inch up, and more importantly, we have a strong balance sheet with a fair amount of cash. Our GSA Auto has recorded an extremely good quarter. We've had close to 50% growth in EBITDA for the quarter YoY. And as you know, we have always strived to de-risk our business.
While the defense is starting to show a glimpse of its growth potential, the most exciting part is also GSA, which should cross the INR 1,000 crore mark in sales very shortly. Also, with the initiatives we are working on internally, the operating profitability should see a fairly significant increase in percentage terms. Our overseas operations are on the road to recovery. We are confident that the losses in the U.S. will come down very substantially by the end of this fiscal, and Europe should do better as well. Unfortunately, there is some trepidation on the demand-side conditions in Europe currently because of macroeconomic and geopolitical issues, which are probably putting a slight question mark on the overall top-line growth in the EU.
On the proposal for fundraising of up to INR 2,000 crore, the last time that Bharat Forge raised any funds, any equity, was in 2010- 2011 during the global financial crisis. This fundraise is solely going to be growth-oriented for deployment in India. Going ahead, we see multiple opportunities on the horizon, and while we evaluate each decision on its merits, the focus of our growth and expansion of footprint will take place in India. On the impairment of investment in Tork, it's basically a victim of the funding freeze and the impact of the FAME subsidy norms. Twice, we were very close to getting investors; twice, Tork was very close to getting investors in its company, but that did not materialize.
As you are aware, we are investors in Tork, and we have invested slightly more than INR 150 crore overall, and the Tork management has been working on finding alternative funding options, as it is not in our business practice to fund business losses in continuity, in perpetuity. So overall, I think whether it is the automotive business or the defense business or the industrial business, we expect to see a stable year, a stable to positive year. Our industrial business will continue to grow and do better. The defense business is doing fairly well, and we expect it to remain stable and continue growing as new orders come in and start getting executed over the next few years. We have a very solid and robust pipeline as well.
Overall, I think Bharat Forge is on a new growth trajectory, and we're prepared for the growth opportunities that are coming our way. I think good times should be ahead of us. I think that's all I really have to say, and I'm happy to take your questions now.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to 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 Kapil Singh from Nomura. Please go ahead.
Good afternoon, sir. We saw a very strong performance in the defense business. So if you could talk about what were the areas in which these new orders have been won? And in terms of ramp-up, also, if you note, current run rate is somewhere around INR 2,500 crores annualized, and the order book is somewhere around INR 5,400 crores. So I mean, earlier, we had talked about the fact that this order book could take like three to four years to execute, but our execution is running much faster. So how should we think about this? Are the execution timelines much faster? And yeah, I guess a model here as well will help.
Yeah, see, as we had mentioned last time, our goal was to achieve a 50% or so growth in defense this year. Some orders are lumpy. Some orders take slightly longer. There are certain orders where we have been working for quite a long time where revenue recognition happens in a certain quarter, so it can be a little lumpy. I think overall, I would still say that we will exceed 50% growth for the year and maintain our profitability.
Sure, sir. And the order wins, what areas were these order wins?
Order wins are across areas, across vehicles, artillery, and MRO items.
Okay. Okay. Sure.
MRO is basically things that are used in sustenance and consumables for the sector.
Okay. Sir, artillery guns, we still don't have any update. What could be the timeline?
We have very significant orders in artillery.
For the domestic?
You're talking about ATAGS? That is, I think it's very close to finalization. Hopefully, by the end of August, it should be final. But as you know, that is not up to us. It's a process that is undergoing, and hopefully, we will see some clarity very soon.
Sure, sir. Sir, just on the other part of the business, if you could share outlook, particularly on the CVs. We have seen some weakness in order inflows in the U.S. and also in India. We saw recent CV data was soft. Any color there? What kind of growth you are expecting in these two segments? And I also noticed that overseas non-auto, despite the improvement in oil and gas, did not report a growth this quarter. Some color there also, how much was oil and gas, and what is the outlook here?
Yeah, just give me a second. Our colleague will answer that.
So the U.S. business, if you're referring to the incoming Class eight orders, that keeps scaling as we've seen from the last year, year and a half. But the overall build level is stable.
Sorry to interrupt, sir, but the management line has been disconnected. Please wait while we reconnect them back. Ladies and gentlemen, the management line has been connected back. Thank you for patiently holding.
Yeah, sorry for the interference. We got dropped off. There is enough backlog in the system. The build rates are still stable. So it's not really affecting production in the U.S. as of now. The outlook for the next year is stable according to at least two out of the three major OEMs. So we have to wait and watch how that goes. As far as India is concerned, the expectation for the year is YTD will be flat ±5% at best. So I think we are seeing quarter progression in the same way. It seems like there will be a heavier quarter three and even heavier quarter four, but we have to wait and watch. But this is the best all the OEMs are indicating right now, and that's what we see from the market.
Additionally, you mentioned two things. So we have seen a significant uptake in the oil and gas export business. It is heading back towards positive territory. And there are certain other programs where the shipments are a little lumpy. But for the full year, the kind of growth that we have envisioned, it will happen.
Sure, sir.
Secondly, in the domestic market, although the numbers have gone down in CV production and sales, our market share has gone up, and our revenue is higher than the underlying market.
Thank you, sir, and wish you all the best.
Thank you.
Thank you. The next question is from the line of Kunjan from Bank of America. Please go ahead.
Yeah, hi. Thanks for taking my question. Just quick follow-up on defense. On this ATAGS order, is there any change to the value? If you can just refresh us how big it can be. And you also mentioned this mounted gun system for which we have bid, for which also RFQ has been submitted, and we're expecting some update on that. So if you can just talk about that as well. I mean, I'm just trying to get how big in the value of orders can be.
Look, let me put it in a general term for you, okay? I think this is important for all the participants. India itself needs close to 4,000 guns. It needs guns of several different kinds. It needs towed guns. It needs mounted guns. It needs self-tracked and self-propelled guns. It needs 105 mounted guns. Fortunately for us, we make all of these vehicles, all of these products. We have nine artillery platforms. We can compete in any category that is envisaged or required. Additionally, globally as well, there is a huge requirement for replacement of guns of very old vintage. There is another equal or more opportunity outside India. As you know, our current business has started off by exports, and we expect that the export potential and export business will continue to grow for us, and we will be a global player in this area.
The current order of ATAGS that is supposed to open is roughly 307 guns. That itself is roughly in excess of INR 4,000 crore-INR 4,500 crore.
Okay.
Just 300 guns. So you can extrapolate and understand what is possible.
This is the overall guns, and whatever we get out, I mean, it can be 50/50. Is that understanding correct?
See, currently, it's L1, L2 is 60/40. It depends on how many platforms get bid out and get closed in the next few years, but we have that kind of potential. Then when you are doing exports, obviously, you're typically, there's only one player because these companies all buy from only one company, these countries. I think that there is ample potential.
Yeah. I mean, while we are at defense, I also mentioned you see a mention of these shells which were in shortage, and which you mentioned in your annual report that we now have a significant visibility on that business. Can you just give us some understanding? Is it part of the order book already, or it's a recurring order that you keep winning? I'm not too clear about the nomenclature there, but I'm trying to get better information.
It's a combination of three things. We have long-term orders. We have new orders, and we have orders that we've been supplying for some time now. It is already generating us revenue. Hello?
Hello. Yeah. Okay.
Yeah?
Okay. Got it. The second question I had was on aerospace. Anything that to call out for this quarter, and how should the revenue ramp-up be there?
So again, as I mentioned, certain businesses like aerospace, there is customer approval processes for new products. So unfortunately, because of everything that's going on, our customers haven't been able to come here and do the approval processing. But we expect this year a 15%-20% growth in our business, and next year, a strong double-digit growth. And we're on track for that.
Last year, if I recollect, it was INR 250 crore or so in aerospace.
Correct. Correct.
Okay. Got it. And last question on the cap raise again. I mean, you mentioned that there are opportunities. Is it something inorganic that are coming our way? Because it's a pretty sizable cap raise, which if it's organic, it does take time, right? So I'm just trying to get.
It will be a combination of both, but it will be India.
Okay.
Okay?
No new segments or open to new segment diversification as well?
Of course, of course. But very aligned to what we do, metallurgical products, similar to what we do, or value additions of what we do. And focused on creating more customer traction and centricity for ourselves.
Okay. Got it.
More solution. Yeah.
Okay. Thank you so much. I'll join back the queue.
Thank you. Ladies and gentlemen, to ensure that the management is able to answer questions from all participants, please limit your questions to two per participant. The next question is from the line of Jignesh Gandhi from Ambit Capital. Please go ahead.
Yeah. Hi, Amit. So for one clarification, when we talk of defense business of INR 600-odd crore, does the account for that in the domestic side only, or this is split between domestic and exports?
It's all accounted in domestic.
All accounted in domestic. Okay. Despite being exports, so it's more of a how we supply as a result that the account is in domestic. Is that correct?
Yes.
Got it. Secondly, with respect to the aluminum forging business in the U.S. and Europe, so while currently it is a passenger vehicle-oriented business, is this technology relevant for non-PVs and non-auto segment as well, which we are looking at? How to think about that?
Auto is definitely possible, but non-PV, it will be limited by the size of the product. Typically, you can make products up to about 12-odd kilos in weight.
Okay. Okay.
Yeah. So the whole reason for this whole aluminum forging is basically lightweighting.
Right.
So it is applicable for areas where weight is a factor.
Right, right, right. In that context, how should we think about the pathway to the low-double-digit to become margins which you have been talking about, both for U.S. and Europe? What needs to fall in place to reach there?
Yeah. I think on the U.S. side, we are getting resolution for the price repair. We will see that by Q4, we will be zero, zero, if not slightly positive. In the U.S., I think we would have been there, except for a steep decline because of some certain customer-specific issues where business has gone down for a short period of time, for about three to four months. Once that recovers, I think we will be back on track there as well.
Okay. Okay. And the non-aluminum forging business in.
I'm sorry to interrupt, sir. Could you please fall back in the question?
Sure. I'll come back in.
Okay. Thank you, sir. The next question is from the line of Amyn Pirani from JP Morgan. Please go ahead.
Yes. Hi. Thanks for the opportunity. My first question was on continuation on this overseas subsidiaries only. Given your commentary, it looks like the major part of the improvement will be felt only in FY 2026 because these things will take some time. So in that context, when we look at your presentation and there's a comment around reduction in losses, is it mostly related to the India subsidiaries which are going to drive this year, or you still feel that we could see substantial reduction in losses in the overseas subsidiaries despite the concerns that you are highlighting?
I expect that we will see a substantial improvement in the overseas subsidiaries for this year as well.
Okay.
Especially for Europe, we will see a big improvement because of the actions that I talked about. Next year, undoubtedly, will be even better. U.S., because of this reduction in volume, unfortunately, it will not show. But if you see as a percentage, I think if you look at the quarter by quarter, I think by quarter four, you will start seeing a fairly strong improvement. So both, I would say, on the yearly basis, I would look at more on the quarter to see the improvement.
Okay.
And that will then carry forward.
Understood. Understood. Secondly, just a bookkeeping question. If I look at your presentation in slide 11, if I look at the India operation EBITDA, I'm assuming this is standalone plus the Indian subs. But if I add the EBITDA of standalone and the Indian subs, I still get like a INR 50 crore EBITDA, which is unexplained. Is there some accounting thing here, or am I missing something?
This is mainly due to the inventory reduction for our trading entity. As there is an inventory movement, it will keep on fluctuating. This time, since there was an inventory reduction, there was a benefit for the group.
Okay. Okay. On an annual basis, should we assume that this is a net-net zero?
Yeah, yeah, yeah.
Okay. Okay. Understood. Thank you.
It will be quarterly fluctuations, but on a normalized basis, it should be zero someday.
Okay. Okay. Thank you.
Thank you. The next question is from the line of Pramod Amte from InCred Equities. Please go ahead.
Yeah. Hi. Thanks for taking my question. So the first question is with regard to the continuity of the government. Does it help you in terms of G2G orders progressing further, accelerating in the coming quarters or years? And also related to that is, what is the status of product performance of what you have supplied to some of the international clients, both on guns and vehicles?
I think the second question, the product performance is absolutely satisfactory. There are no complaints. There has been no issue of any kind. We are also now training the maintenance staff over there on maintaining these products for the medium to long term, in addition to the people that we have deployed to maintain. Secondly, I think the government is doubling down on creating opportunities for Indian companies to export because it becomes a part of their external affairs development initiative as well, and relationship development, long-term relationship development initiatives. So not only are they doing G2G, but there is also now, let's say, more funding being made available for exporting these products to certain target countries.
Sure. Thanks. And the second one is with regard to the VRS in Mundhwa, which we are again extending. Wanted to know the thought process. Do you see a substantial productivity upgrade possible and hence an investment towards it? Or how are you looking at that plan?
So look, in Mundhwa, we have some parts of it which are very old. So there, the productivity is low. So we want to completely modernize that and dramatically improve the productivity. And for that, clearly, we can't have so many people, extra people. So we're trying to do a VRS between a combination of VRS and retirement age of people. We aim to reduce a few hundred people from this plant in the next couple of years.
These are which product lines, if you can?
This is across the board. These are people who joined us in the 1980s, basically.
Okay. Sure. Thanks a lot, Amit.
Thank you. The next question is from the line of Mumuksh Mandlesha from Anand Rathi, Institutional Equities. Please go ahead.
Yeah. Thank you, sir, for the opportunity. And congratulations on the new order that you've just been sent. So on the.
Can't hear. Sorry, can't hear.
Yeah. Is it better, sir? Is it better, sir? Yeah. So on the freight cost, sir, and availability of the freight, sir, has there been any demand impact in this quarter? And what could be the cost impact in the Q1? And going ahead, how do you see both the cost and availability issue?
Look, there is an issue, obviously. There is an issue of availability. I don't know if you're aware why a lot of containers are not available, besides the fact that shipping lines are taking longer routes, so they are stopping at less ports. So overall, we have managed to mitigate almost all the freight cost increase for this quarter. And we will continue to work on that. And between whatever we can do and whatever we structurally do with our customers, we will manage this.
Is it possible to quantify the freight cost impact for the quarter, sir?
No, it's difficult. Because, as I said, it happens over a period of time, and we get recoveries over a period of time, or we do mitigating factors over a period of time. I can't quantify it.
Got it, sir.
But we are managing quite well in the quarter in spite of that.
Got it, sir. So on the export front, this is the first quarter where we've seen a decline, a small decline. So going ahead, based on the customer production plan, will exports be more flattish, or there's a possibility of a larger decline for the years?
At this point, we don't see a reason for a larger decline. It is very volatile, of course. We expect it to be steady. But we are also taking a lot of actions to improve our share of business and all of that in the marketplace. So even if the market decline happens, we are trying to prevent the impact on us. So there's a lot happening right now.
This market shift gains that's basically you're talking about is because of a lot of Europe-plus-one strategy, diversification strategies, sir?
There are lots of reasons. It's not just that.
Okay. And sir, also, can you comment on the subsegments like high-horsepower engines, construction equipment, static segment, how they are performing, sir?
The high-horsepower engine is performing quite well because of the overall increase in demand for standby power. Construction and mining is on the weaker side. There are structural changes that keep coming every two, three years. So we are going through that cycle. So hopefully, that should start doing better next year.
Got it, sir. Thank you so much for this.
Thank you. The next question is from the line of Vivek Kumar from JM Financial. Please go ahead.
Thank you for taking my questions. Most of them have been answered. Just one part. Could you share the capacity utilization at the overseas subsidiaries?
In Europe, it's about 70%, and in U.S., about 50%.
That means similar to the previous quarter?
Yeah, more or less.
Yeah. Okay. Thank you.
Thank you. The next question is from the line of Rohan Vora from Envision Capital. Please go ahead.
Hello. Thank you for the opportunity. Sir, you answered it earlier, but just to clarify, the fundraise that we are doing, so just wanted a little bit of more color on it. Is it going for inorganic acquisition or organically expanding facilities?
It will be for growth of manufacturing footprint in India for both global and Indian opportunities. It will be a combination of both greenfield and inorganic.
Got it. Got it. Thank you.
Thank you. The next question is from the line of Mukesh Saraf from Avendus Spark. Please go ahead.
Yeah. Good afternoon, and thank you for the opportunity. My first question is on the European subsidiaries. I think in the opening remarks, there was some mention about pricing actions being taken there. So in the previous quarter, we have been mentioning that we should soon start taking some pricing actions. So the question is, is this going to be going on for some more time, like an ongoing price action that we're going to take over the next few quarters, or is it like a one-time that we are already done with?
It will be done by next quarter fully, and then it will be implemented. It will be in place.
This would be across your customers there in the European operations?
For aluminum.
For aluminum. All right. In continuation to this, you had mentioned in the U.S., aluminum operations were seeing some weakness for a couple of months. Would you be pushing back on some CapEx plans also because we had the phase two CapEx coming in this year? So would that also be delayed?
Unfortunately, the CapEx is a project. It takes about 28-30 months to implement. We're already in the middle of that. We're not going to rush to do it, but we have to do it anyway.
Got it. Got it. And just lastly, on your export passenger vehicle business, we have seen some kind of flattish performance after probably two, three years of continuous strong YoY growth. So obviously, the growth has been driven by market shares, etc. So are we kind of hitting some level of saturation there in terms of market?
In fact, we have one business last year which will start from next year. Right now, there's a slight weakness because of the Brazilian market, which is one of the markets we export to. Otherwise, it's okay. It will continue to grow. This market will continue to grow quite substantially for us.
All right. All right. Thanks for that. I'll get back to you.
Thank you.
Thank you. The next question is from the line of Milen Shah from Wellverse. Please go ahead.
Hello. Hi. Thank you for the opportunity given. Sir, I just wanted to ask one question. What kind of approval we have got from the government just now, just a few days back, we announced for our subsidiary KSSL?
In the beginning, there was no KSSL about 13, 14 years ago.
Yes, sir. Yes, sir.
Okay. Originally, we had got licenses in the name of Bharat Forge. Correct?
Okay.
We had got a lot of our different licenses in the name of Bharat Forge.
Okay.
So now that we have a wholly owned subsidiary called KSSL, all the licenses that we have got from the Ministry of Home Affairs for defense manufacturing, which requires specific licenses, have now been obtained for KSSL. So all that business will be in KSSL. Okay?
Okay. In continuation of that, sir, when the operation will be commenced, sir?
KSSL is an operating entity, but the new plant that we are building will start by about October.
Around October?
Yeah. October, November. I think post-Diwali.
Okay. And sir, just last second, last question, sir. How much it will affect our top line and bottom line, sir?
Existing business will move there, and we'll have ample capacity for growth.
No, no. I was asking for the new approval we got for the company, how much it will affect our top line and bottom line regarding this particular new approval, sir?
It's the same approval that Bharat Forge already had, has got transferred, has been, let's say, applied for and received in the name of KSSL.
Okay.
Because we want all our defense business to be in KSSL.
Got it.
Okay?
Yeah. Thank you. Thank you so much. Good.
We don't want to do defense equipment in Bharat Forge. That's why.
Okay. Thank you so much.
Thank you.
Thank you. The next question is from the line of Amisha Agarwal from Devrsto Advisors. Please go ahead.
First of all, thank you, sir, for taking the question. So my question is, with this Class eight order falling to 12,400 units in July, down from the 15,000 unit average earlier in the year, how is the company addressing this slowdown, and what strategies are in place to mitigate its impact?
Sorry, Miss. Can you, Amisha Ji, can you please repeat your question a little slowly and a little loudly? We couldn't understand what you were saying. It wasn't very clear.
Okay, sir. So my question is, with Class 8 order falling to 12,400 units in July, down from the 16,000 unit average earlier in the year, how is the company addressing this slowdown, and what strategies are in place to mitigate its impact?
See, this order intake is for delivery 18-24 months in the future. Okay? So there is enough order pipeline for this year and next year as it is. So this is only orders received in advance, well in advance.
Okay.
I don't foresee that to have any direct impact today or next year on our business.
Okay. Okay, sir. And sir, also, there has been a global slowdown, and as we have seen in the results also, that export revenue declined 6.3% quarter-on-quarter and 0.7% year-on-year, as mentioned on page number 9 of the presentation. Given that there are recession chances also in the U.S., so how is the company planning to address the challenges?
See, I'll tell you, we have a very simple philosophy. Be the last man standing. Have the strongest balance sheet, the best technology, and the best overall cost structure and customer proximity. If you have that, even when bad times are there, you can do more for your customers because they also need to reduce costs structurally at that time.
Yes, sir. Thank you, sir.
Thank you.
Thank you. The next question is from the line of Kapil Singh from Nomura. Please go ahead.
Yes, sir, just one follow-up. There was some news flow that in Europe, one of the aluminum suppliers has faced flooding and is facing disruption in supply. Just wanted to check if you have heard of any risk for Bharat Forge customers because of that.
No, no. Kapil, in our case, we melt and cast our own aluminum, which we then forge. So any such thing will not affect us. In fact, it may only be a positive for us. And honestly, I'm not aware of this. I did hear of something in Eastern Europe where, because of the flood, some plant had got flooded, but I think that's a specialty aluminum plant. It's not a commodity plant. Not that. Okay. I mean, if you can share that by email with us, it will help us.
Sure, sir. We'll take it off. Thank you.
Thank you.
Thank you. The next question is from the line of Jignesh Gandhi from Ambit Capital. Please go ahead.
Yeah. Sorry. I had a follow-up on the European operations. So if you look at the European operations, they've expanded capacity on the aluminum forging side, the legacy business of steel forging and the old aluminum forging, is it back to normalcy in terms of margins which they used to do, say, pre-COVID, or that is also under pressure today?
See, on the steel forging business, we are doing, let's say, overall product and business rationalization and right-sizing. We want to get rid of business or move business that is not adequately profitable and right-size the business so that even with ups and downs, we can make money.
Okay. And.
That's the right-sizing exercise. It will involve footprint optimization as well as manpower rationalization in the next six to eight months.
Got it. And the old aluminum forging, that is back to 13%-14% kind of EBITDA margin, which is still quite high. That is what we call it, sir. Great. And lastly, what should be the CapEx for Standalone and Consolidated business for this financial year?
So I would say overall, between this year and next year, whatever we are spending will get spent over this year and next year, be about INR 1,000 crore.
This is including the subsidy?
Yeah, yeah. Everything.
Everything. Got it. Great. Great. Thanks, and all the best.
Thank you.
Thank you. Ladies and gentlemen, that was the last question for today's conference call. I would now like to hand the conference over to Mr. Amit Kalyani for the closing comments.
Ladies and gentlemen, thank you for your time, and most importantly, your extremely well-thought-out questions regarding our business. It's always reassuring to see the thought that you put into our business and your understanding of it. Our management team and I are grateful for your time, and we will continue to improve the performance and operations of our business and hope to continue interacting with you going forward. Thank you, and have a nice weekend.
On behalf of Bharat Forge Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.