Ladies and gentlemen, good day and welcome to Belrise Industries Limited Q2 and H1 FY 2026 Earnings Conference Call. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need any assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. Before we begin, a brief disclaimer. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectation of the company as on the date of this call. These statements are not the guarantees of future performance, and it may involve risks and uncertainties that are difficult to predict. I now hand the conference over to Mr. Shrikant Badve, Managing Director from Belrise Industries Limited.
Thank you, and over to you, sir.
Good afternoon, everyone. I would like to welcome you all to the quarter two and H1 of FY 2026 Earnings Conference Call of Belrise Industries Limited. Joining me on this call are my sons, Sumedh and Swastid, along with our Chief Financial Officer, Mr. Rahul Ganu, and investor relations advisor from SGA. As we look back at the first half of financial year 2026, I am pleased to share that Belrise has made significant strides in solidifying the position as one of India's leading auto component manufacturers. Our focus on innovation, quality, and customer integration continues to drive our growth across multiple segments. We have seen strong demand across our core business areas, leading to stronger relationships with our clientele, resulting in both new business wins and actual growth in existing programs. Before we dive into the company's performance, I'd like to speak on the positive impact of recent policy changes.
The domestic auto sector saw strong demand momentum over the past couple of months, driven by the festive period and the benefits of GST 2.0. The market sentiment has been positive, and we have seen this consumer enthusiasm translate into a set of new synergies for our key customers. This momentum, combined with our investments over the years, is increasingly paying off as we enhance our value-added offerings volume, moving from being supplier to co-creator and full-system supplier into a concept we call Tier 0.5 supplier. This is evident in the strong relationships we have built with some of our mighty customers, where we observe higher content being supplied per vehicle and increased focus towards system assembly. We also continue to secure new orders across our premium and proprietary segments. Both key growth drivers for us, which is evident across both the two-wheeler, four-wheeler, and commercial vehicle segments.
Coming to the results, we had a record quarter with our PAT reaching INR 1,330 million. Total revenue from operations for quarter two FY 2026 stood at INR 23,535 million, up by 14% year-over-year, including manufacturing revenue of INR 18,601 million, which grew 17% year-over-year. Our EBITDA and manufacturing EBITDA stood at INR 2,932 million and INR 2,653 million respectively, with margins at 12.6% and 14.3%. As a company, there also continues to be a sharp focus on ROCE, and that translates into ROCE going up from 14.4% to 15.3% over the past six months. We expect to continue making on this trend to take our ROCE to a higher teenage number over the next eight to 12 months. With that, I now hand over the call to Swastid, who will take you through our business updates and Q overview. Thank you very much.
Thank you all for joining the call. Coming to the operational highlights this quarter. Firstly, during the quarter, we received an order from a leading two-wheeler OEM for their EV platform as a single-source supplier. For this program, we have won orders for the chassis and BIW components. To cater to this program, we are setting up a new manufacturing facility in Chennai, with supplying scheduled to begin in the quarter three of FY 2026. Having this facility in Chennai will also enable strong operational synergies with our existing operations in the region. In particular, we will be able to utilize spare capacity in our AT EV operations, thereby improving asset utilization and achieving better operating leverage. While the revenue contribution from this facility will be limited in FY 2026, we expected to ramp up to approximately INR 1,500 million at peak levels within the next 18 - 24 months.
Given the sharp ramp-up of this EV platform over recent months, we are confident that incremental volume from the OEM would push this peak even higher. Secondly, we also recorded a key win in our proprietary product portfolio with a new suspensions order from one of the fastest-growing two and three-wheeler OEM in India, specifically for their three-wheeler EV suspension program. Deliveries are planned to begin in quarter four of FY 2026. While our current relationship with this OEM is relatively modest, this win is especially important. It has the potential to deepen our engagement and help us transition into a larger supplier relationship over the next eight to 12 months. This order diversifies our customer base in our proprietary portfolio and reinforces our position as a key supplier of proprietary components in the automotive domain. Third, during the quarter, we also initiated production at our Bhiwadi plant.
This facility caters to a large Japanese four-wheeler OEM, supplying plastic molded parts for their existing models. In addition, at this facility, we have also won an order for the chassis of a premium model from a Japanese two-wheeler OEM as a single-source supplier, with supply expected to begin in quarter three of FY 2026. This premium model will be fully export-oriented, enabling Belrise to indirectly supply components to multiple global markets, and will also allow us to increase our quantum of vehicles, which would be approximately 1.8 to two times higher than that of a standard two-wheeler. Fourth, we also secured an order from a large Indian passenger vehicle OEM, winning over 37 BIW parts for their upcoming SUV platform. This platform is expected to be one of the highest-selling models in the segment.
The quantum of vehicles for these parts is approximately INR 2,200, and the production will be serviced through our existing Pune facility. This win builds on the performance we demonstrated in delivering cross car beams for the same OEM's EV model, and our consistent quality, cost, and delivery parameters for that program has translated into this expanded business award. Fifth, as we discussed in our previous earning call, we had secured an order for long members, a high-end structural component used in the medium and heavy commercial vehicle segment. Again, this order was for a large commercial vehicle OEM, and again, as a single-source supplier. This order marks our maiden entry into medium and heavy commercial vehicle space, which is an important step in expanding our R4 portfolio.
We are pleased to share that the dedicated facilities for this program has been ramped up in record time, and we expect to reach peak revenues within the next two to three months. At full capacity, this facility is expected to generate revenues of approximately INR 120 million per month. Six, in our previous earning call, we had also spoken about signing a development agreement with one of India's leading electrical two-wheeler OEMs. At that stage, we were still finalizing the specific orders to follow under this agreement. We are pleased to share that we have now secured our first order for plastic molded parts under this GDA, which will be catered from our Aurangabad facility. This marks the beginning of what we expect to be a broader engagement with this OEM. Supplies for this order are expected to commence in the second quarter of FY 2027.
Seventh, in this quarter, we also initiated supplies for solar structures to a large global solar tracker manufacturer. The initial orders are from North America, and discussions are currently underway for additional orders in India and Europe. This again marks an important milestone in our diversification into the fast-growing renewable structure segment. What really excites us is that beyond the sector's strong growth trajectory, it has a significantly shorter turnaround time for execution. We therefore expect order conversions in this segment to materialize faster, all of which will be used using our current process expertise in classification and surface treatment. Lastly, another major order win that we had in this quarter was we secured incremental orders for an armored vehicle program for a leading Indian defense OEM. This order is for indirect exports to multiple countries in Asia, all of which are single source.
Further, our collaboration with the Israeli defense OEM has strengthened more. We are now discussing with them towards supplying larger assemblies for their global program. We see a busy time for quarter two of FY 2026, with expected numbers to be higher in September due to the festival season. However, there was a bit of a slowdown until the 22nd September in anticipation of the GST rate cut. Different OEMs follow different strategies. Some OEMs chose to reduce production during that period, while others continued at peak levels. This led to a situation where production was gradual for a few OEMs. Secondly, one of our large European four-wheeler customers faced a idle time due to which deliveries in this quarter were largely subdued. With that now, I hand over the call to Sumedh to discuss our strategy in the four-wheeler and commercial vehicle segment and the broader way forward.
Thank you. Recently, we hosted a technology show for one of India's largest and most established four-wheeler OEMs at their premises, showcasing our capabilities in sheet metal, hydroforming, plastic molding, filtration systems, and machining.
The event saw participation from over 300 representatives of the four-wheeler OEM customers, including senior management and cross-functional teams. This has led to the initiation for discussions on further engagements. Our expertise in high-tensile stamp forming scene was specifically recognized for its potential in lightweighting and improving component durability. We expect these capabilities to support upcoming programs for this OEM and other four-wheeler customers as well. We continue to maintain strong momentum in the four-wheeler commercial vehicle space and remain on track to double our revenues from FY 2025 levels for four-wheeler commercial vehicle programs over the next two years, supported by ongoing engagements with eight passenger vehicle and five commercial vehicle OEMs. Our revenues have grown 52% year-on-year in the first half of FY 2026, and we're extremely positive of this sector going forward along this time.
As advised, we also intend to focus our investments across auto and non-auto applications, including consumer electronics, consumer durables, aerospace and defense, renewables, and other high-value engineered systems to strategically expand our addressable markets and position us for this next phase of growth. Our operational excellence, honed through deep engagement in the highly demanding automotive industry, has enabled us to develop the process experience necessary to expand this into new industries with greater agility and embody the strengths that we have. Let me now hand over to Mr. Rahul Ganu, our Chief Financial Officer, to take you through our financial performance for Q2 and first half of FY 2026.
Thank you, Mr. Sumedh, and good afternoon to everyone on the call. I'm happy to report a strong set of financial results for quarter two and H1 FY 2026, supported by robust demand and our ongoing operational improvements. Let me take you through the key financial highlights. Quarter two FY 2026 consolidated financial highlights. Total revenue for quarter two FY 2026 stood at INR 23,535 million, up by 14% year-on-year from INR 20,687 million in FY 2022 last year. Manufacturing revenue for quarter two FY 2026 stood at INR 18,601 million, up by 17% YoY from INR 15,899 million. EBITDA stood at INR 2,960 million, up 22% year-on-year from INR 2,433 million in quarter two FY 2025. EBITDA margin stood at 12.6%. Manufacturing EBITDA stood at INR 2,663 million, up by 25% year-on-year from INR 2,138 million, and manufacturing EBITDA margin stood at 14.3%.
PAT stood at INR 1,330 million, up 82% year-over-year from INR 733 million, and PAT margin stood at 5.7%. The company utilized IPO proceeds to repay debt of INR 15,960 million, resulting in substantial interest cost savings. Exports contributed 5.7% to our manufacturing revenue in quarter two FY 2026, that is INR 1,067 million. Coming to the segmental performance on manufacturing front, two-wheeler and three-wheeler contributed 81.1%, PEVs contributed 4.9%, CEVs contributed 8.3% for quarter two FY 2026, and others contributed 5.8%. Now H1 FY 2026 financial highlights. Total revenue for H1 FY 2026 stood at INR 46,157 million, up by 20% year-on-year from INR 38,497 million in H1 FY 2025. Manufacturing revenue for H1 FY 2026 stood at INR 36,923 million, up 22% year-on-year from INR 30,146 million. EBITDA stood at INR 5,767 million, up 19% year-on-year from INR 4,834 million in H1 FY 2025. EBITDA margin stood at 12.5%.
Manufacturing EBITDA stood at INR 5,199 million, up 21% year-over-year from INR 4,292 million, and manufacturing EBITDA margin stood at 14.2%. PAT stood at INR 2,447 million, up 69% year-on-year from INR 1,448 million and PAT margin at 5.3%. Exports contributed 5.6% to our manufacturing revenue in H1 FY 2026. That is INR 2,052 million. Net debt of 30th September ending 2025 stood at INR 9,614 million and ROACE stood at 15.3%. Coming to the segmental performance on manufacturing front, two-wheeler and three-wheeler contributed 81.9%, PEVs contributed 4.7%, CEVs contributed 8.5% for H1 FY 2026, and others contributed 4.8%. With this, we can open the floor for questions. Thank you. Thank you very much.
Thank you. Ladies and gentlemen, we will begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question is from the line of Saurabh Jain from Sunidhi Securities. Please go ahead.
Hello. Congratulations to the management for the wonderful set of numbers. I have a few questions. To begin with, some color on trading business apart from that it consisted of INR 920 odd crores in H1, and how it fared or weighed on your profitability during H1. Something which can help us to value this business and your plans to hive off this business, as discussed earlier.
Thank you, Saurabh, for the question. The trading business grew steadily at, I think, around 5%-6% for the half and the EBITDA margins were in line with what we had last year, close to 6%. This business again, as we have discussed in the last call, consists of trading of commodities in metals and different alloys, as well as unique lithium ion batteries. The perspective is that by using this commodity trading business, we are able to get deeper insights into global commodity dynamics. In terms of your question of hiving off, while we have not commented on that publicly, we are still evaluating if that would be a potential option that we could consider, and we will keep you updated for any further update on that.
Cool. My next question, as mentioned on the presentation, slide number 10, and also you have given quite some update in your opening remarks. We have entered into SOPs of several programs during H1 and with a couple of more going forward in Q3 and Q4. So what kind of turnover these programs contributed in Q2 and in a full-fledged year, say, next year, FY 2027? Although some of these, as you mentioned, would take 18-20 months to ramp up fully. So what kind of revenue one can expect from these new SOPs for next fiscal?
We mentioned on the Chennai facility that is coming up for the large two-wheeler OEM for their EV platform. We are their single-source supplier. As we mentioned on the call, that will be contributing around INR 1,500 million at peak levels in the next 18-24 months. When it comes to the long member facility for the commercial vehicle OEM, again, where we are single source, and it is an extremely high tensile component and very difficult to manufacture. Just to give you some color on that, while the average Indian industry for high tensile strength is 600 megapascal, this component produces around 980 megapascal. So it is 1.5 times what is the norm in the industry. We expect, again, revenues in this facility to peak around INR 1,500 million.
We expect this peak to be much quicker, and we expect us to reach this peak on a monthly revenue basis in the next three months or so. The third facility we have spoken about was, again, another Chennai facility that we had set up for a premium two-wheeler OEM and a large commercial vehicle OEM in Chennai. That has already ramped up, and I think in the next 12-18 months, we can enable that to get to, again, INR 1,500 million and its peak can go up to INR 2,000 million as well.
Overall, INR 400 crore-INR 500 crore kind of incremental turnover from all these programs can be seen next fiscal?
That is a simplification, I would say. I think each of these programs have different ramp-up cycles and are ramping up over different periods. I will not be able to answer that on a point-in-line basis, but I think incrementally we have defined the incremental revenue as well as how long it will take for the business to ramp up.
Fair. My another question is on borrowings. The borrowings have further gone down in September 2025. So what kind of debt levels do you see by the end of this fiscal? Any revision in the CapEx guidance which were given in the last quarter?
So we are not guiding on the debt. That is something that we haven't done up till now and we won't be doing that going forward. In terms of our CapEx, we maintain our guidance of INR 8,000 million over this fiscal year and the next fiscal year. So no change in guidance over there.
Fair. Last question from my side. If you can share the.
Mr. Saurabh?
Yeah.
Sorry for interrupting. I would request you to rejoin for any follow-up questions.
Sure.
Thank you.
Thank you.
Participants, in order to ensure the management can address all your questions, I request you to limit your questions to two per participant. Next question is from Aditya from Industech. Please go ahead.
Yeah. Hi. Thanks for the opportunity and congrats on a good set of numbers. A couple of questions. Number one, where are we on merger of Badve AutoComp and Eximus AutoComp? If you can show some timelines in terms of when the group entities will be transferred to the listed entity.
Yeah. Thank you, Aditya. I think on Badve AutoComp and just to correct you, Eximus LLC. I think, for these two entities, again, we had guided that we would like for the merger to happen or the acquisition to happen within this fiscal year. We still maintain that guidance as we have mentioned in the last few calls. At this point in time, we are not able to comment on the exact timeframe when it will happen, but we still maintain that we will be able to do it as soon as possible.
Sure. Is that a sequential increase in debt roughly from over INR 770 crores to about INR 960 odd crores QoQ basis?
Yes. On a net debt basis there is, but that also has to do with the fact that we had ramped up that Chennai facility and Bhiwadi facility last year, where there was a portion of debt that was undispersed. So it has to do with that. Since the Chennai facility and Bhiwadi facility have ramped up in this fiscal year, that is what that increase in debt relates to. To answer your question specifically, whether any debt has been taken on for new projects or working capital, the answer would be no. All of this would be debt taken on before the IPO.
Okay. Final question if you can give some.
Sorry for interrupting. I would request you to please rejoin the queue.
Sure.
Thank you. Next question is from Radha from B&K Securities. Please go ahead.
Hi, thank you. Sir, in sheet metal, I believe 40%-50% of the roughly INR 22,000 crores market is captive. You already have 24% market share, and I believe another 25% is owned by Metalman, Indo Autocomp, et cetera. My question is, if my understanding is correct, then-
Sorry. Hello. We are not able to hear you properly. Sorry. Your voice is echoing a little bit. Can you repeat or maybe, come closer to the mic?
Yes. Is it better?
Not really. Okay.
Is this better? Hello?
Why don't we go ahead and we can try to answer. Let's try again. Yeah.
Radha, you can rejoin the queue.
Okay.
Next question is from Nitish from Jefferies. Please go ahead.
Hi. Thanks for taking my question. So two questions. Firstly, you seem to be making some good progress on the proprietary components around suspension, brakes, steering, et cetera. So you have got some initial order wins. What is the roadmap you see in terms of scaling up these components with other OEMs? Also, I think you have gotten some breakthrough in some of the newer OEMs as well. So how do you see that business expanding and is there a case to supply some of your conventional components also to the new two-wheeler OEM that you have now?
Thank you for the question, Nitish. I can answer the first part of it and maybe Sumedh can answer the second part. So when it comes to the three components we spoke about, steering column, brakes, and suspension. When it comes to steering column, we are already quite well penetrated. So steering column is a component that is used very commonly in three-wheeler OEMs as well as scooters. So for the top three-wheeler OEMs in India, we have penetrated all of them and we are also supplying the steering column to the highest selling electrical two-wheeler OEM. So steering column is a space where we feel we can continue gaining share of business. As we had mentioned earlier, since it was a monopoly beforehand, we think we can take that to over 50% or more SOPs in the next 18- 24 months.
When it comes to suspension, our progress in suspension has been quite good over the past 12- 18 months. While we initially started with a large Italian two-wheeler OEM, we have now expanded to another two-wheeler OEM based in Pune and are also expecting to expand into the three-wheeler suspension for extremely fast-growing two and three-wheeler OEMs. I think this win was around 12 months in the making since suspension again is a proprietary product, requires very deep validation and testing to get to a level of an LOI and a PO. The fact that we have added our third large OEM in the suspension space is an extremely positive sign for us. Coming to the braking part of it, right now we continue to supply to two two-wheeler CE OEMs, both of which seem to be doing decently well.
I think the next step with braking would be of course to continue to innovate and potentially also look at further categories. Right now we are largely working on combination brake systems. We would potentially also like to explore working in the disc braking space, but that's also a work in progress and we'll talk more about that as and when we can speak more about it. Talking to your question on growing a deeper relationship with the top two-wheeler and three-wheeler OEMs, I think Sumedh can talk more about that.
Yeah. Thanks, Nitish. Good question. Fundamentally, cross-selling has been at the top of our priority list. The fact that we are moving towards a Tier 0.5 supplier working closely with our OEMs across our product portfolio and we're glad that we can offer them a wide range, not only from metals and plastics that is in the proprietary product and from a strategic location of being very close to them. That is a priority and a focus area for us, and we believe that by doing so we can actually increase quantum of vehicle as well and align more closely with their volumes and their strategy as well. Just want to double down on that.
I would just like to add more of thought process from our side. We are dealing with majority all OEMs and our approach will be to have more and more strong basket with them. I think that is our strength, and I think we will be able to mix that up.
Thanks for that fairly detailed answer. One more question. When we look at your first half EBITDA versus operating cash flow, there is almost a 19%, 20% growth in EBITDA, but that doesn't seem to have flown into operating cash flow in the first half. There are some of these line items like other current assets, et cetera, which seem to have adverse cash flow movement. Can you explain what has happened between EBITDA to cash flow in the first half?
Yes, sure. I'll answer this question maybe in three points. I'll clearly answer the three points. One would be the increase in inventory. The second would be the, as you mentioned, increase in other current assets, and third would be reduction in the financial liability. When we talk about the increase in inventory, we kind of went from an inventory of INR 7,697 million on March 31st March to around INR 90 million by September 30th. Of course, this is an increase in inventory from 20% to 22%. While if you compare our revenue from the first half of FY 2025 to first half of FY 2024, our revenue also went up by 20%. So the inventory growth was in line with our revenue growth this year. On top of that, there were a couple of compounding factors that had existed.
Number one, as we had mentioned, one of our large four-wheeler European OEMs had a cyber attack, due to which they had low production and increased inventory levels to our end. Secondly, as we mentioned, during the September month, there was a bit of a slowdown across a few OEMs because a lot of consumers stopped buying on the of September 22nd when the new GST rates were coming to play. So that has led to increased inventory levels for the month of September that is shown in our inventory levels for September. In terms of the second point, in terms of increasing other current assets, I think that largely has to do with an increase in capital advances, and that is largely towards the capital expenditure for our long member facility in Pune, which was being set up in this quarter, and hence the advances towards that.
Secondly, also due to the tremors that were seen in the supply chain for two-wheeler OEMs, there was also supply advances to our steel and model company suppliers, which is again another large supply advance that was shown in this quarter. Thirdly, for a large European accelerator OEM, we are for some of the newer models shifting from a domestic-based steel sourcing to an import-based steel sourcing. When we kind of go from domestic to import-based sourcing, the advances are given again over a larger period of time, due to which they reflect that way in the balance sheet. Another factor in terms of our cash flow would be the reduction in our financial liability.
Last, or this year, we kind of ramped up two facilities, Chennai and Bhiwadi, and we kind of faced the CapEx for those two facilities due to which there was a capital outflow for these two reasons also. Largely, I would say inventory and increase in the other current assets and the reduction in the financial liabilities. These would be three more pertinent reasons when it comes to the delta between the EBITDA and the free cash flow.
Okay. Thanks very much.
Thank you.
Thank you.
Next question is from Raman from Sequent Investments. Please go ahead.
Hello, sir. I just have one question. As you mentioned in the earlier part of the call, your trading business has around 6% EBITDA margin and on the back of that, and if I am translating the manufacturing EBITDA, which is 16%. If I am assuming that your two-wheeler business does a margin of 12%-13%, then your three-wheeler business, which is the new vertical which you are expanding into, the EBITDA margin is more than 20%. I just want to understand, is this margin in your three-wheeler, four-wheeler business sustainable? I just want to understand what are the products which we are developing which will give us this margin.
I think just to correct a few of the fundamental assumptions, our manufacturing EBITDA is at 14.3%, as is shown in our investor deck and as we mentioned on the conference call. I do not think we commented on the fact that the three-wheeler EBITDA margin is around 20%. We usually do not comment on EBITDA margin by segment, but I would say that the three-wheeler EBITDA margin, of course, is not that high. We will not be able to comment more on this. We comment more on what the drivers are for the larger company. Yeah.
Okay. Can you comment on the last part of it? What are the products which we are developing in three-wheeler and four-wheeler segments?
Yeah. I can comment on that. In four-wheelers, I think there's a large focus from our company on the high tensile strength component. Again, we acquired a company called H-One, a drafting company, on March 20th 2025. What H-One really gave us was a deeper expertise in high tensile strength. Again, to give a 30-second base on high tensile strength. High tensile strength allows you to go from, say, a 2 mm thickness of steel to a 1 mm thickness of steel. So you're reducing the weight by 40% to 50%. At the same time, you're increasing durability of the steel given that it can absorb more pressure. So with H-One, we can go up to 1,100 - 1,200 megapascals, while the India average in terms of megapascal is around 600 megapascals.
So there'll be a large focus on high tensile with four-wheeler, given that it has a large application in EVs, given that an EV battery is heavier than an ICE powertrain. So the lightweighting onus lies on the chassis manufacturers and the BIW manufacturers. So there'll be a large focus on the high tensile strength. The two we have said, there are three key components we are working on apart from suspension. One would be braking, where we're doing combination braking system. The second would be filtration system, and the third would be steering column. For all of which we have gotten our maiden orders from large OEMs, and now we'll be cross-selling these products to multiple OEMs. These are future products. Sorry, sorry. Sorry, I couldn't hear it.
Steering column.
Okay. Yeah. Yeah.
Raman sir, just to add, I think what you incorrectly assumed was the consolidated EBITDA at 14.3%. I think that is 12.6%, and I think that's how you would have assumed a 20% EBITDA. I think if you just look at the numbers again, it'll be clarified.
Yeah. Understood. Thank you, sir.
Thank you.
Thank you.
Next question is from Ashwin Patil from LKP Securities. Please go ahead.
Hello. Sir, congratulations on a great set of numbers. My question is pertaining to the H-One business that we have acquired. Can you throw some light on the revenues that we have posted in this quarter and the margins also in this quarter, which we have registered? Also going forward, an outlook on this business as in what kind of growth are we expecting in this business and what kind of synergies, margins are we expecting going forward in H-One business?
Thank you for the question. This quarter, we had a revenue of close to INR 600 million or INR 60 crores in the H-One business. Right now, the capitalization in this business is not more than 40%-45%. What we expect is with almost little or no CapEx, we should be able to double our revenue in this segment on what we receive today. We feel that this H-One subsidiary can easily go to INR 400 crores-INR 450 crores or INR 4,000 million-INR 4,500 million revenue in the next 24 months. Beyond that, I think in terms of margins, we had a bit of a operational turnaround in this quarter, and we're seeing margins inching towards our consolidated business.
However, since the capitalization is still small, it will still take time for it to get to the larger company level, but we are very confident that we will be able to do it.
Okay, that is great to hear. I was just coming to the margins on the consolidated basis. We have reported very good growth in the margins in this quarter. Going forward, what steady state margins are we expecting over the next one or two years? What would be the drivers for any kind of growth in the margins going forward?
Yeah. We are very stable with the margins going forward, which will be stable as compared to FY 2025 figures. I think the potential things that can lead to us having better margins in the future will be, of course, better operating leverage as we increase our capitalization. The capitalization piece is already being seen in our numbers with our ROCE going up from 14.4% last year to around 15.3% this year. A bit of operating leverage over there will definitely help our EBITDA margin. Apart from that, our core end-to-end proprietary components like steering column, suspension, braking, filtration system, all of which we only IP source will have slightly higher EBITDA margins. Also four-wheeler is a much bigger segment where we see we can achieve better EBITDA margins, contingent of course, the industry continuing to perform well in the future.
The potential downsides or offsets when it comes to our EBITDA margin going forward will be the fact that we have so many facilities ramping up simultaneously. The West Chennai facility, now we have the Pune facility, the Bhiwadi facility, and again, a new Chennai facility. Almost four facilities are being ramped up in this fiscal itself, apart from the two facilities that we acquired H-One. As a managing group, we have got access to 16 facilities. All of it will take time to ramp up, and we will not be able to create optimal EBITDA margins on day one. Of course, during the ramp-up period, we would have less than optimal EBITDA margins, which of course, is an offset or a downside to the EBITDA margin going forward. That being said, we are still running a stable EBITDA margin going forward.
Okay, that's great, sir. Within the H-One business as well.
Sorry for interrupting. Please rejoin for any more questions.
Okay. Thank you.
Thank you. Next question is from Radha from B&K Securities. Please go ahead.
Hi, sir. Am I audible?
Yes.
Yes. Thank you again. In sheet metal, I believe that 40%-50% of the rough INR 20,000-INR 22,000 crore market is captive. You already have a 24% market share and another 25% is owned by Metalman or Indo Autocomp, et cetera. My question is, if this understanding is correct, then in order to outperform the OEM growth in sheet metal, are you betting on gaining market share from the captive and non-captive players? If yes, then what is our right to win as compared to them?
Radha, thank you for the question. I think we do not foresee, or we do not think that the captive margin is so large as 50% or 60%. We would imagine it would be much, much lower than the number you are quoting. The captive market existed strongly a decade ago, but as players like us, Belrise, and other players in this space have kind of migrated from a Tier 1 player to a Tier 0.5 player, a lot of these assemblies, I would say, come to us. We are manufacturing and assembling a large number of vehicles. For a large singular OEM, we are assembling almost 75% of the vehicles. We think the 40%, 50% captive production you are quoting is quite high. We review it to be much lower.
While we do not comment on competitors, I think we are number one in the sheet metal space by a large margin. That would be the second point. When it comes to outperforming the market, I think we have continued to do that here over the past five to seven years, and we will continue doing that going forward. We have a very large lead in the two-wheeler auto component segment. I think four-wheeler would be the place where we are still quite small, where our market share will be in the low single digits. That is the space where we can really have a leap of growth and can outperform. That is visible in the H1 numbers. In H1, we have grown by 52% in four-wheelers and commercial vehicles as compared to last year.
We expect this trend to be positive, and going forward, we want to double our revenues in this space. That will be the key driver for us going forward.
All right. That helps, sir. Second question is, the recent product launches suggest that there is a shifting revenue mix towards suspension products in two-wheelers. As you already have launched front forks, shock absorbers, steering columns, it covers 80% of the suspension SKU in a two-wheeler. However, this remains a competitive market as there are large players like Gabriel India already in this space. What is our right to win here and where do you see your market share in this segment in the next three years?
I think so far we’ve had good verticalization in this space. Given the fact that we already do fabrication, machining, and assembly of components, we are able to vertically integrate a lot of the manufacturing processes behind it. Another product that you missed out was that we also make springs. Springs are again a very critical and proprietary component when it comes to shock absorbers. We also make the springs in-house. Again, that’s a lever of growth that we have against some of our peers. Apart from that, we also have a strategic partnership with an Italian design firm called EBI. EBI has been working in the Indian market for more than two decades and has designed a lot of unique vehicles for all the top two-wheeler OEMs in India. We have a technical collaboration with them.
We’ve been able to design suspensions that are of high quality and high design capability. Maybe my brother Sumedh can add more to that.
Fundamentally, in the proprietary space, innovation is the name of the game. There is an opportunity to further add value, and that is fundamentally what we do as a process expert in terms of identifying the end product and then doing the design for manufacturing in such a sense that you can add value to the end product and actually the end customer. So we have been able to add value already and our customers have trusted us with orders there. So I understand your perspective. There are established players. However, we are making good headway already.
Sir, and the last one on the market share, sir.
This is Radha. Sorry for interrupting. I would request you to rejoin for any more questions.
No, it is the same part of the question that was unanswered. What market share are you expecting in this in next three years, sir?
We will not comment on our market share of specific segments. I think we are commenting on our company-wide growth targets, and we will continue doing that going forward.
Okay, sir. Thanks and all the best to you.
Thank you. Next question is from Shrinarayan from Baroda BNP Paribas. Please go ahead.
Hi, thank you for the opportunity. Last quarter you had put up a target to reach CPV of INR 17,300 in two-wheelers. With this GST benefits coming up, do you expect to reach that target meaningfully faster and by when?
We’ve already reached that target for select OEMs. For steering columns, as we mentioned, we’re working with four OEMs. For filtration systems, with two OEMs, and with braking again for two OEMs. I think we’ve already reached that target for select OEMs. This transition from INR 12,500 to INR 17,300. I think now the real opportunity is to cross-sell and add more OEMs across all three commodities.
At the organization level, what was the CPV last quarter, if you can comment? In both four-wheelers and content per vehicle in two-wheelers, what was it in second quarter? Similarly for four-wheelers, if you can give out that.
We can only run an optimal CPV, which is a peak CPV that we could work on. With two-wheelers, as you mentioned, INR 17,300, and in four-wheelers commercial vehicles was around INR 30,000, but with H-One coming in, it has gone up to INR 45,000.
Okay. Because that's the peak that we. But average, if you can give, I wanted to know the average with all the OEMs.
It is extremely difficult to quantify an average because different OEMs follow different sourcing strategies. That is something that we do not track at a company level.
Okay. Lastly, you had mentioned that in the last quarter that CBS will have incremental CPV of INR 2,500. Now, you are saying you will be moving to disc brakes, so what will be the incremental CPV there? Get back.
We will get back to you on the exact number, but it will be easily INR 1,000 - INR 2,000 higher.
Okay, fine. Thanks.
Thank you.
Thank you.
Next question is from Vijay Pandey, from Nuvama. Please go ahead.
I had just one quick query. It is regarding Stellantis. Stellantis, the production got impacted this quarter. Did you have any impact from the same and are we expecting to see the ramp-up for Q2 onwards?
Stellantis, there was an issue into Stellantis and because of the cyber attack, it kept the production halt for some time. Technically, this was something new to everybody, and it took some more time, and now the issue is resolved, and there has been a start of production, and it will be sustained forward.
Secondly, on the margin side, since we are now ramping the two plants that are still in the startup phase, do we expect any incremental cost from these until the entire ramp-up is possible? When do you expect to see the full ramp-up or say 60%, 70% utilization of these plants?
I'll go one by one. The first semi plant that we started in Q1 of FY 2026, that we expect to continue ramping up towards 60%, 70% by the end of this fiscal. When it comes to the Bhiwadi plant that has literally just started in this quarter, that ramp-up will also take another six months or so. When it comes to the Pune long member facility for our last commercial vehicle OEM, that ramp-up has been particularly fast, and we have been able to make some very good progress over there. We expect to hit a high capacity utilization in the next six to two months.
Lastly, coming to the new semi plant that we just announced, that will go into production in the first quarter of FY 2026, and that will continue ramping up over a period of 12 to 15 months because the models being manufactured over there are being shifted from another facility for the OEM. We'll be waiting for the shifting to happen completely, and then we'll be able to ramp up fast.
Okay. Sir, that is all from my side. All the best for upcoming quarters.
Thank you.
Thank you.
Next question is from Khush Shah, from B&K Securities. Please go ahead.
Yeah, hi. Congrats on the great set of numbers. I just had a couple of questions. On the export side, currently you will have around 6% revenue contribution and with H-One India acquisition. Does that open our TAM to the Japanese market or will this be specific for the domestic segment?
I think the TAM for domestic Japanese market definitely opens up. While H-One largely works with one four-wheeler Japanese OEM and one two-wheeler Japanese OEM, we are in discussions with another Japanese four-wheeler OEM and another Japanese two-wheeler OEM for the initiation of orders. So in total, we will be working with two Japanese four-wheeler OEMs and two Japanese two-wheeler OEMs. So that itself will expand TAM considerably. Beyond that, a lot of these Japanese OEMs that we are talking about are looking at India as a central production hub for supplies into Asia and the rest of the world. So we expect them to continue exporting more from India. So Khush, it will not be a direct export that we do, but an indirect export where we supply to the Indian facilities of these Japanese OEMs and then they export outside. Swastid can add more to that.
Yeah. It also opens up the opportunity to look at direct exports. Now there is an increasing trend of vehicles and parts manufactured in India that are being sold to drive up to Japan and flying on the Japanese roads. That definitely is a very positive sign, and we stand to benefit from it, and we see that coming our way.
Understood. Got it. Thanks. My next question would be on the non-automotive segment. I think you all have touched base upon the aerospace and defense segment. Can we get some more insight on the non-auto side?
All we can comment on that is there are a few things that are in the works there. I think the two things that we announced right now was the increased orders for the Indian defense OEM for the armor grader program. That again is an indirect export order where we are a single source. Again, this order was, I think, more than nine months or 10 months in the making, and we have finally won this order. Again, while the order itself may be modest, I think it's important from a capability perspective, which is important to us. Second, for the Israeli OEM, we continue working on larger assemblies. I think initially the order that we had gotten was for some smaller chassis and smaller BIW parts.
Now we are thinking about launching and exporting larger assemblies to them and for them to make India an import hub for them in Israel. If I can comment on something else, there's something else in the works as well. There's multiple things that are in the works, which we expect to share with you in due course.
Sure. Just one last question was, I think in the investor presentation you mentioned that you all have started supplying for the solar structures. Incrementally on the non-automotive side, from, let's say, right now at a base of 100, in the coming couple of years, how much do you all expect that to scale up?
While we can't comment on a specific number right now, I think we as management are fairly confident on the sharp increase in the realization and the revenues in this space. I think we would think that the automotive manufacturing industry or component manufacturing industry is probably one of the most demanding or rigorous industries in terms of manufacturing excellence. Now that we have learned the know-how from the automotive component industry, we feel that we can easily, or not easily, we can seamlessly use these capabilities into these adjacent domains like the solar industry or the aerospace and defense industry, where we can use all of our existing processes like robotic fabrication, like high-end press steam forming, like coating, painting, assembly, and penetrate them fairly quickly given our software expertise.
While we cannot give a specific number out today, we do expect a sharp ramp in volumes going forward.
Understood. Got it. All right, that is it. Thanks a lot, and best of luck going forward.
Thank you.
Thank you.
Thank you very much. That was the last question for the day. I would like to hand over the conference to management for closing comments.
Right. I would like to thank everyone for their time, interest, and questions today. I hope we have been able to address most of your queries. We remain confident in our growth trajectory, both near term and long term, driven by strategic investments and our commitment to advancing products and technologies. For any further questions, please reach out to us or to SGA Strategic Growth Advisors, our IR partners. Thank you once again for joining and look forward to speaking with you again soon.
On behalf of Belrise Industries Limited, that concludes this conference call. Thank you for joining us. You may now disconnect your lines.