Ladies and gentlemen, good day and welcome to the NRB Bearings Limited Q3 FY 2026 Earnings Conference Call. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. I now hand the conference over to Mr. Ajit Mishra from Ernst & Young, Investor Relations. Thank you, and over to you, sir.
Thank you. Good afternoon to all the participants on this call. Before we proceed to the call, let me remind you that the discussion may contain forward-looking statements that may involve known or unknown risks, uncertainties and other factors. It must be viewed in conjunction with our business risks that could cause future result performance or achievement to differ significantly from what it expressed or implied by such forward-looking statements. Please note that we have mailed the Q3 FY 2026 results, press release, and the same are available on the company's website. In case if you have not received the same, you can write to us and we will be happy to send the same over to you.
To take us through the results, long-term strategy and initiatives that have already been taken in the right direction, we have the top management of NRB Bearings Limited, represented by Harshbeena Zaveri, Vice Chairman and Managing Director. We will start the call with a brief overview of the quarter gone past, and then conduct Q&A session. With that said, I now hand over the call to Harshbeena Zaveri. Over to you, ma'am. Thank you.
Thank you so much. Good afternoon, everyone. Thank you for joining us today for NRB Bearing's Q3 FY 2026 earnings conference call. It's always been a pleasure to connect with all of you, and I truly appreciate the continued interest and engagement that you bring into these conversations. Over the last few quarters, we have been focused on building a stronger, more diversified and more resilient NRB. Today, I'm very pleased to share with you the progress that we've made in this direction. Let me please begin with our performance for the quarter. In Q3 FY 2026, our revenue from operations grew 18% year-on-year. It has now reached INR 328 crore for this quarter. NRB's EBITDA increased by 26% YoY to INR 64 crore, and our EBITDA margin improved by over 19% compared with approximately 17%-18% the same period last year.
Profit after tax before exceptional items rose by 44% year-on-year to INR 38 crore. For the nine-month period as well, the momentum remained strong. Revenue for nine months FY 2026 was INR 963 crore, up 11%. EBITDA grew to INR 193, which is a 20% increase. EBITDA margins rose to 19.5% year-on-year. Profit after tax before exceptional items stood at INR 112 crore. INR 112 shows a 27% increase year-on-year. This consistency quarter after quarter reflects a very deliberate approach. It comes from the choices that we are making on product mix, the customers that we choose to partner with, our engineering-first approach, and the strong R&D fundamentals on the back of which we have strengthened operations, improved our cost structures, and added stringent working capital discipline, which is also showing a good trajectory.
I would say the most encouraging part of this performance is that it has been achieved while we are simultaneously investing in new platforms, new product lines, and also adding entirely new but adjacent industry segments. The most defining developments of the quarter relate to our time and resources. The first is a joint venture with Unitec S.r.l. As many of you know, NRB Bearings is always focused on complex precision applications, segments where engineering depth and reliability matter much more than volume or price point. Unitec S.r.l. shares this exact philosophy. They are one of Italy's most respected independent industrial bearing manufacturers, especially strong in precision products across industry applications like cylindrical roller bearings, industrial gearboxes, agriculture, textile equipment, defense applications, and aerospace-related systems, which use the products that we are going to start manufacturing along with them. This joint venture is therefore not simply about adding capacity, it is also about adding capabilities.
We will manufacture industrial cylindrical roller bearings for very, very exacting applications out of a LEED certified state-of-the-art facility in Uppal, Hyderabad. NRB Bearings holds 75% in this upcoming joint venture, which gives us strategic control and long-term direction. Unitec S.r.l. brings advanced engineering solutions, deep customization expertise, a strong Europe-centered OEM base, and importantly, the joint venture comes with an assured off-take commitment of production. This gives the platform immediate scale and visibility. For us in the NRB Bearings group, partnerships are all about accelerating our entry into new segments. This one is into industrial bearings. Industrial bearings is important because it is not a space where we enter as a commodity player, but as a high-end engineering solutions provider. This segment offers diversity in terms of growth.
It also offers stability, strong margins, long lifecycle relationships, and aligns perfectly with our proven ability to engineer complex solutions and create diversification at scale. The second strategic milestone this quarter is our entry into the aerospace industry through the acquisition of Mahant Tool Room in Bangalore. This is very meaningful for us because aerospace aligns with both our core capabilities and our long-term aspirations. Our technical and R&D resources will enable the scaling up of this business. Mahant Tool Room brings sophisticated precision machining capabilities for engines, for fuel system components, for mission-critical aircraft, as well as doors and rod ends. They have been recognized multiple times. HAL's Best Performance Award for Technical Excellence being the most recent. They come with an order book of more than INR 25 crore, giving us instant scalability in this high-entry barrier sector.
Aerospace is a domain you cannot enter without a long lead time. Qualification cycles are long, quality expectations exceptionally high. Approvals often take years to materialize. Through this acquisition, we are able to fast-track what is typically a long approval cycle. More importantly, this is completely aligned with our strategy of entering high technology, high margin, basically businesses where it is difficult to gain a foothold and impossible to lose it once you are there. These two initiatives, the Unitec S.r.l. JV and Mahant Tool Room acquisition, are not isolated moves. They are part of a larger declared strategic intent. This reset became possible after certain legacy constraints, as you all are aware of, were resolved. We continued to be conservative and focused solely on our existing business for the past 8-10 years. Starting from between 2019 to early 2025, we had performed with an entire set of structural constraints.
However, we no longer face any of these constraints. Focusing on our future while protecting and growing our core automotive leadership strength is the way forward. The discipline that we are putting in is critically important in terms of how demanding OEMs perceive us. This platform of selecting customers who are both high margin and extremely particular in who they partner with is the base on which we are now building our confident entry into industrial, aerospace, robotics, off-highway, and fundamentally, many, many next-generation mobility solutions that will help NRB Bearings achieve the aspirational goals and go well beyond what we have declared. I am pleased to share that CRISIL has maintained its credit rating of AA- this financial year as well. This continues to be a significant recognition for us.
As you well know, there are very few listed companies of our size that have this ranking, and this reflects our standing as a benchmark of financial discipline and governance, strong liquidity, low leverage, consistent operating performance, and disciplined capital allocation framework. It also gives us the ability to attract partners pursuing strategic opportunities, whether they are in the form of JVs, acquisitions, or greenfield initiatives with other partners with extreme confidence and at an optimal cost of capital. I am delighted to welcome our new CFO, Mr. Vineet Goel, into our leadership team. Vineet brings over 25 years of international and domestic experience across manufacturing and technology-enabled sectors. What is particularly important for us is that he has been with companies that are also very quality and profitability-focused.
He has, during his tenures, covered greenfield projects, mergers and acquisitions, staff-led financial transformations, and focuses on working capital management, profitability, and cash flow enhancement. This very well fits in with our shorter and long-term strategic initiatives. To have him join our leadership team. Let us now turn to the outlook, because this is where I want to spend a little more time. We believe that NRB Bearings is entering perhaps the most exciting phase in decades. Our automotive business, which is deeply entrenched with premium OEMs across-
I'm sorry to interrupt, ma'am.
Hello.
Yes, please go ahead.
Our existing-
Are you
Is there a problem, ma'am?
No, ma'am. Please go ahead now.
Our existing product portfolio is entrenched in new generation EV, ICE, and hybrid platforms globally. This gives us long-term revenue visibility, strong pricing power, and an opportunity to get future business. Beyond automotive, our industrial business is expected to grow rapidly and adds significant opportunities to greenfield and partnership initiatives. As I explained earlier, the Unitec S.r.l. JV gives us access to European OEMs, both here as well as in Europe, who value engineering depth and application-specific customization, which has always been our strength because of our history with needle roller bearings. We expect this platform to expand steadily into construction equipment, agriculture, industrial machinery, and robotic applications. These sectors offer resilience across cycles. Aerospace and defense, as we explained, are our third major engine. This is a long cycle business with high entry barriers, stringent certifications, robust margins.
We believe that our trusted position with demanding customers is a positive, and the ready order book that Mahant Tool Room has is going to ensure faster growth than if we went on our own. All these platforms collectively give us a diversified, resilient, and future-ready model, and the longer-term growth plan adds profitability in the near and long term. What gives me the greatest confidence is our people. The teams across our plants, R&D centers, and customer-facing functions are what give us an edge. It is really their dedication and passion which are the two drivers of NRB Bearings performance. To all our investors and analysts, I thank you for your trust, your insights, and your continued engagement. We remain committed to delivering value through disciplined execution, strategic clarity and sustainable profitable growth.
I do hope that I have been able to share both the recent results of the company and give you meaningful insight into the way forward. With that, I will pause and open the floor to your questions.
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 the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use answers 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 Shreyansh Kothari from ICICI Securities. Please go ahead.
Hey, good afternoon, ma'am. I had a few questions. The first one was on the working capital. So, what would be the inventory levels, and where are we with the inventory reduction that we are targeting? If you could just give some color on that, just the overall working capital and the inventory specifically.
Would you like me to start or? Because you said you had a couple questions.
Yeah. I can ask the other question. Yeah, if you could just answer that, I can follow up after that.
No, I think it is better if you put all your questions down.
Okay.
Then, otherwise-
Sure.
other people won't get an opportunity because we are on a timeline.
Sure. Okay. The second question is on the capacities. I understand that the capacities at this point are full and our sales is probably peaked out around this INR 330 crore level per quarter. Given the higher inventories for Q4, which is pretty much the best quarter for us, in that sense, how do we try to capture that growth or are we not able to fulfill the demand that we will have in Q4? On the additional capacity, just trying to understand timelines on how we are building capacity and when and how in stages it is going to come up. I think those are the few questions I had.
Okay, so let me address your questions one by one. Our working capital has basically improved as you could see, and we roughly have working capital limits which are up to INR 450 crore and we have not utilized a significant portion of that. Coming to our inventory. Our inventories have historically been 120- 130 days, as you noticed last year. Now we are down to 110 days. What is optimal for us? To be very honest, between 90- 100 days. As you know, NRB Bearings is a company that has a very high share of business with many, many important customers, India and overseas. All these customers expect us to carry raw materials, especially considering the situation that has been faced since the post-COVID period, including the Red Sea situation.
Unless we are reliable in terms of the uptick and the downtick in demand, especially in terms of the dynamic situation that the world has faced, they would not be willing to give us 70% and 100% share of business, which is where we are or where we try to reach, even where we have 30%. Our ability to really command even the prices that we command has a lot to do with our reliability. If you look on the one side, we are a company that has a very much lower COGS than our competitors. On the other hand, there are two numbers where we are higher. One is the inventory and the second is actually our employee cost. That is, I would say, directly linked to our strategy.
While there are definitely, there is some scope for improvement, especially looking at AI, trace and track, machine learning and other technological innovations that we are putting into our manufacturing system. But it is not ever going to be less than 90 or 100 days, or you would not get the kind of results that you see. Now, your last question, you talked about capacity. Again, I think the most important thing is how do you define capacity? Many companies traditionally look at capacity as some concept of installed capacity, or some industrial engineer is trying to figure out how much you can get, putting all the constraints in. We do not work with a constraint-driven model. We look constantly at zero base and we see literally, was there a shift, was there a month, was there a week when we got a much higher output?
What did we do differently that week? For example, instead of waiting for material, we always have three or four tool sets already in place. So even if there's the slightest delay for something, we immediately do a changeover and do not allow our capacity to go waste. That's the way that NRB Bearings has been able to, if you notice, grow well beyond our competitors without actually having added significant capacity. But the one point that I would like to add, we are always adding balancing capacity. Are we not going to be able to create adequate bearings, produce adequate bearings to meet the demand this quarter?
We definitely are going to be able to do that because continuous improvement and improving the actual numbers in every which way, including getting more out of our current production machines, where we are building in all kinds of new controls, all kinds of better, I would say, AI-driven. What I mean by AI-driven, we don't actually have them on the machine, but we're constantly using all the possible innovative tools available to drive a higher level of capacity and also a higher level of quality through the machines, a higher level of consumption, which at the end of the day leads you to produce at least, I would say, 15% more than the capacity that you state. I hope that answers your question.
Yeah, that's very helpful. So the understanding would be it's the current demand. The capacity is not going to be the constraint for the demand that we have as such. We'll be able to fulfill.
It isn't because even the INR 200 crore that we announced earlier, some of the machines have already come. All machines don't take that long to come, especially if you're buying balancing equipment or building it in-house.
Got it. That's what I'm trying to understand, how the CapEx is going to be staggered and when do we It's going to be staggered over two years? Just trying to understand how we are going to be spending it and when we are going to realize those additional capacities.
I mean, they come every quarter. Some of them take a year. If you're putting heat treatment in place, it takes a year. If you're putting grinding equipment in place, it takes a year. But when you're talking about all the other pieces of equipment that come in, they're all considerably shorter lead times.
Okay. That's very helpful. Thanks. My last question would be on the Mahant Tool Room acquisition. Is there like a plant that they have? Because we noticed that sales currently is only INR 1 crore. I don't know if the manufacturing is outsourced or what have we bought in term Is it just the technology or is it the plant or how do we If you could just give some more details on that acquisition.
The average turnover is approximately INR 2 crore, but they receive very large orders from HAL and other customers, which are conservatively placed at INR 25 crore after a lot of due diligence. Taking into account that some platforms come faster and some platforms take a little longer. They actually were not able to fulfill such a huge scale-up of orders, which is one of the big reasons why we got this opportunity. However, the gentleman who runs this company and who's a technocrat, who actually is the innovator, he has the ability to design and manufacture all in-house very sophisticated machine parts, which include, as I said, landing gears, which include mission-critical fuel injection parts, which include rod ends, which are actually a type of bearing, and also linked to the kind of bearing that we have developed in-house already. They make it there, but to a lower scale than the order book they have. We will immediately be scaling that up. Does that answer your question?
Sorry to interrupt. May we request Mr. Shreyansh to please rejoin the queue? We have participants waiting for the turn.
Yeah.
Thank you.
Could we move to the next question then?
Sure. Ladies and gentlemen, we will request you to please limit your questions to two per participant. If you have a follow-up question, you may rejoin the queue. The next question is from the line of Rajas Joshi from Chrys Capital. Please go ahead.
Thank you for the opportunity. Am I audible?
Yes.
Yes, you are.
Yeah. Congratulations on a good set of numbers. I had two sets of questions for you. The first was around our Q3 slash time and performance. Could you please break down the revenue mix of our revenue across different segments, be it domestic and exports, and on the other side, between CV, industrial, and two-wheeler PV. So split on that. The second one is again around the inorganic initiatives. On Mahant Tool Room, what would be the timeline for the executable order book and the margin profile of the business? Secondly, on Unitec S.r.l. also, what would be the timeline by which we should start seeing production there? Those are my questions.
I got your first question, and that was the breakup between domestic and exports. Right now, it's 75/25, because we have 4%-5% business from the U.S., which is to the extent that the U.S. business is down. Otherwise, it would have been 70/30. We are still waiting for that U.S. business to come up, and whatever results have been achieved, have been achieved in spite of some of the customers in the U.S. having lowered their demand patterns. The second question I didn't hear very clearly. Which are the segments that you wanted me to highlight the data of?
It should be CV, PV, two-wheelers, and the remaining industrial.
To be very honest, given this data, even last time, it doesn't vary hugely. Our industrial segment is growing faster, but otherwise, this data is available, and I have highlighted it even in the past. There isn't much meaning to give this data quarterly, because each particular segment has a cycle. I can tell you roughly the CV segment for us is 27%-30%. The two three-wheeler segments is again another 30%. Industrial is growing faster, but out of the total pie, it has roughly been 8%-10%, and now it's starting to move faster to 11%, 12%. And the aftermarket has traditionally been between 10%-12% for us. It continues to be at that pace. And PV for us, again, pretty much by design, has been 20%.
Because in the PV segment, apart from focusing very strongly on the India market, internationally, apart from real, I would say, segment leaders like Audi and Mercedes-Benz, we supply Tier 1 because we find directly supplying PV is a very cost-driven, pricing, commoditized type of approach from the OEMs globally. But the Tier 1 really cares much more about your design and your product launch capabilities, which commands its own, I would say, pricing strength. I hope I answered your question. And with that, I think we can move to the next one.
Thank you. The next question is from the line of Dev Gulwani from Care PMS. Please go ahead.
Thank you for the opportunity. Bearing industry market size is approximately INR 20,000 crore in India. Out of this INR 20,000, what will be the market size of needle and cylindrical bearings?
Do you want to know the global market size?
No.
Or do you want to know my share of business out of the total, or what? Because typically, we don't give out such competitor information. We go more by the user segments.
What is the trend?
We are by far the strongest player in India in this segment. Many times we are compared to one of our large competitors who also manufactures this product. But you have to keep in mind that that large competitor is predominantly an automotive aggregate supplier. 70% of their business is automotive aggregate. Only 30% of their business is actually bearing. I think that helps people understand why we have a higher market share.
Right. Understood. But the company is only into needle and cylindrical bearings mostly. What is the TAM for NRB Bearings?
What is what? I am sorry, I didn't-
Total Addressable Market for NRB Bearings in India.
For needle roller bearings?
Yeah, for needle bearings and cylindrical bearings.
But these are two completely different type of bearings, sir. Again, it depends on what. For example, the reason I'm not answering this question is not because I don't want to answer it or I'm trying to kind of keep some information away, but you could have a cylindrical bearing that's INR 25,000 if it's very, very big, and it goes into steel plants. So it's not possible for me to answer this question. We are a dominant player in our size range. Our size range is the size that most automotive and industrial companies use in terms of high volume. But as such, cylindrical roller bearings can go into huge sizes, which go into steel plants. So I can't exactly answer that question accurately in a generic form.
Okay. Understood.
We do not actually make the very large sizes. What I explained last time is we are planning to enter the bearing market for larger spherical, cylindrical, and taper bearings, but that will be a separate phase. When we do it, we will announce it with all the data. Right now, it is not a market that we are currently in. It is something we plan to do in the next 12 months. When we have all parts of that tied up, we will announce it.
Okay. Second question, last question is, one of the steps that company is taking to decrease the inventory days is that sourcing material locally instead of importing them. How much percentage of raw material is imported currently?
Sir, pardon me saying this. You are assuming there is an advantage for us to use Indian raw material over imported. There are certain products we made for which, in that specification, there is no producer in India.
Okay.
It's also not interesting for producers in India to make the kind of volume when they can get probably some other business where India has a large uptake. There are basically two companies in India, or three, if you take SNL, which is another listed entity that belongs to us, 74%. If you account, there are three significant and proper, I would say, organized sector players, and there aren't too many unorganized sector players also in this, for needle bearing products. There's not enough demand in terms of tons, okay, for any company to necessarily make some of the very high-end, very specific specialty steels. So what we import is really what is not available here in the quality standards that we want to supply an Audi or a Daimler or a Magna or a Dana, or the kind of companies that we supply to.
So if the raw material comes to India for the highest end of what we make, which is 25% of our exports, and if it goes away from India back to Germany or France or the U.S. or Japan, I don't see anything wrong with that because we're not just buying. I think what's more important is are we euro surplus? Hugely. Are we dollar surplus? Hugely. I think that is the fundamental point there. Pardon me answering your question in a different way, but that's really how we look at it in the company.
Thank you. The next question is from the line of Raghunandhan NL from Nuvama Research. Please go ahead.
Congratulations, ma'am, for an extremely strong quarter, and wishing all the best for the strong performance to continue. Ma'am, I just had one question. For the standalone business, can you indicate what was the growth for aftermarket and exports on a YoY basis?
See, exports have been maintained as a percentage of the total. It can be derived very easily. We've not lost exports. We're not down in exports. It continues to be 25% of our business. It was 25% of our business even last year. That number can be very easily calculated. Aftermarket is definitely down. There's no question. Overall, the aftermarket is facing very challenging situations, and that is probably one of the reasons you've seen our competitors having a great deal of challenge. I think our biggest strength and advantage has been, in my opinion, that we are not very dependent on the aftermarket because if there's one segment that is more volatile than any other segment, in terms of both automotive and industrial, it is the aftermarket.
Now, in the case of NRB Bearings, why is after market not so important to us versus our competitors because we don't have a margin difference. A lot of the other companies that make commoditized products, even if they're global players, command a hugely higher price in the aftermarket. We are blessed to be able to command the same kind of price at OEM. One of the reasons that we don't serve the aftermarket that much is because our bearings don't fail. We're really in applications where performance is so important. How many of you have had a gearbox that failed? Every single one of you probably has a gearbox that runs on NRB Bearings. I don't know if that can answer your question, sir.
You see aftermarket weakness as a temporary situation? You think that things should improve going forward?
To be very honest, we find it very easy to sell the excess that our aftermarket goes up and down on because it's the same quality, it's the same production lines, it's the same product, which is not necessarily true for our competitors. We don't produce in the aftermarket. There are two points. We also supply to SPG Auto Components Pvt. Ltd. Our customers expect us to supply and keep their aftermarket running. One, we get a differential pricing from them for that. The second thing is that as far as the aftermarket is concerned, it takes a huge number of people to serve. NRB Bearings, by its very culture, is a very customer-facing, OEM, high-quality, technologically driven company. The reason I'm highlighting that is all our salespeople are very technically savvy, technically smart.
If I were to deploy 10 people to supply a new OE segment, I would need probably 100 people in the aftermarket to serve the same number. It doesn't show up on the annual reports of our competitors because these people could be well subcontracted by them. Does that answer your question? It really doesn't matter as materially. We can always sell more when the aftermarket is doing well and sell it somewhere else if they're not doing well. It's not a core part of our strategy.
Understood, ma'am. Thank you. Thank you for the detailed answer. It's very helpful.
Thank you. The next question is from the line of Apoorv from ANS Wealth. Please go ahead.
Yeah. Thank you, ma'am, for the opportunity. I have two questions. First question has three sub-parts. It's majorly on the capacity side only. So ma'am, the same JV, which we have done with Unitec S.r.l., right? Just want to know that how much CapEx or how much total CapEx will be required there and the revenue potential on that, and by when that plant would be completely commercialized. The second part is on the INR 200 crore CapEx, which we have planned right now. So by when that complete would be into operationalized. And third is the INR 70 crore CapEx, which we have recently announced in the results. So by when it will be completely into operation? And my second question is-
Are you talking about the JV, sir? Sorry to interrupt you, but your questions are linked to the JV or NRB Bearings' total CapEx?
It has multiple parts. First question was regarding the JV with the Unitec S.r.l. Group. By when it would be commercialized and the CapEx required for that?
Okay. Let me answer that because there are multiple questions. I just don't want to lose the chain. Our JV is a total cost of INR 110 crore, okay?
We've already started the building, and we've ordered out the longest length, I would say, equipment, and that would be a period of 12 months before it's received. It would take another few months to stabilize. I would say it would be 15-18 months by which it would have significant production coming out. Okay? If that answers your question.
Got it. Got it.
This CapEx per se-
Ma'am, on revenue potential-
One moment, sir. This CapEx per se is not going to be significant. It is not INR 110 crore. We are adding INR 110 crore of capacity there, but we also have the JV partner chipping in, right? And there will also be the debt equity number. So keep all that in mind, all right? Which we do not necessarily share in advance, but I just want to give you a perspective on it. The second question you asked me was related to general CapEx and capacity. Can you repeat that question?
Yeah, sure, ma'am. So the INR 200 crore CapEx, which we have planned, right? So by when it will get started completely?
Now you are talking about the total CapEx of INR 270 that we have approached-
Correct.
that our board has sanctioned and which we have disclosed?
Yes, ma'am. Yeah.
Yeah. That is all the time. I already answered that question, frankly, in the first round. Unless it is a specific project where everything comes together and goes into a new building, it is constantly coming in.
Sure, ma'am. From my understanding is that in next maybe one year it will get completed, right? All the-
No, definitely not. Definitely not. I think I will answer this question two ways, if I might preempt your intention in what you are trying to understand. One is that NRB Bearings is not a company that operates like a multinational which goes and puts in a huge plant and massive capacities and then tries to sweat them and look for business. That is not how we operate. We are in so many segments. As you know, we have a large market share in two, three-wheelers, in industrial farm equipment together, in the CV sector, and in all these there is ICE, hybrid, EV agnostic applications and also e-mobility applications which all coexist, and we focus on them, and we keep trying to get higher market share than our competitors and grow faster than the industry growth. We are constantly looking. Apart from this, just for your knowledge, we make what?
3,400 odd products. Variants. We have very high market share and mass customization is actually our strength. We do not necessarily do variants at higher cost. We do them extremely cost effectively because it is not a mindset. It is not that you have one line and it is making just 100 or 200 types of bearings like some of our competitors make. When you keep that whole thing in mind, you will understand that our CapEx is based on our next year's plan and our three-year plan. If we know that a particular company is moving to India, like when Daimler came and became very aggressive here, and they are moving a lot more of their production from China or somewhere else here, we will immediately get an insight into that because we work very closely for future launches globally. For your information, we supply 43 countries. For our top 20 customers into their plants in 43 countries. When you keep this in mind, we are constantly investing the capacity for their specific needs. Does that answer your question?
Thank you. The next question is from the line of Garvit Goyal from Serene Alpha. Please go ahead.
Hi. Good evening. Hope I am audible. Just one question. While I understand that we are leader and in your opening remarks, you mentioned you face some legacy challenges and hence very marginal growth in the last decade. But now, you will be looking different company. Given this, if I look at your internal target, which we have given in the PPT of around INR 2,500 crore by 2031, which again, CAGR of 13%-14%, which we are looking at. Even after entering into the newer growth areas and considering that we are the leader in the existing product portfolio, why are we settling down for this lower range of growth? Why can't we be more aggressive in the terms of growth?
First of all, it comes to 12%, not 14%. What is the number that you mentioned? However, we are not a company that gives future guidance. When I am constantly asked this question, I give the answer. It is really up to you to see what answer I gave three months back and what our company is actually achieving.
Thank you. The next question is from the line of Hiten Boricha from Sequent Investments. Please go ahead.
Yeah. Thank you, ma'am. Thanks for the opportunity. So ma'am, my question again pertains to CapEx. If you can give the breakup of these INR 270 crore. Out of these INR 270 crore, how much we are spending on each segment? Let us say for NRB Bearings needle bearing, for cylinder bearing, for industrial segment, for aero segment. If you can provide the breakup for that.
Typically we do not provide information that will hurt us with our competitors.
Okay. So maybe-
You understand what I am saying, right? Because we were not even able to gauge how much SKF was industrial and automotive. Okay? I have to say we go back and we say, "How much was the base of this company?" And if I start giving so much more information than my competitors, given the public domain, which I am not required to give, it will just unnecessarily I do not think it is exactly something that makes sense.
I understand, ma'am. Let me ask in other way. Suppose with the current capacity, assuming it is running at 100% with INR 350 crore kind of run rate per quarter, we will do around INR 1,300 crore, INR 1,400 crore per year. What will be our next turnover post INR 270 crore CapEx?
Okay. So I give you that.
What will be our peak turnover then?
I'll give you that answer again in a slightly different way. If we are building something end to end, okay, and putting in every little bit of the capacity, and you can see our past results, and you will see this, when we couldn't do joint ventures and acquisitions and the plug-and-play model that I'm talking about with so many partnerships helping us grow faster. In the period we couldn't do that for constraints that have already been explained to you. If you put INR 100 crore in, we used to get INR 100 crore out. Okay?
However, that is definitely not true if you look at the model that we are using going forward. For our traditional products where we have a huge edge and we already have a lot of capacity and depreciated machines. If we go and buy some additional machines, we don't necessarily get INR 100 crore more because we already have the earlier machines where we're working on continuous improvement. So when we go and order machines, we're ordering machines of a much better generation, especially with the technological advancement of Industry 4.0. We are very strong in robotics, and we're extremely strong in getting a better performance from our plant and machinery. Okay? So even that 100 would be an improved number for our traditional product line.
When we're talking about all the new businesses that we are adding, whether it's aerospace, whether it's the JV with Unitec S.r.l., whether it's construction equipment bearings that we have talked about as one of our future four-year strategic plan initiatives, and such additional new industrial and beyond automotive, because there are also automotive products that we are adding. We are not losing the momentum on automotive. We are adding more through partnerships. The whole idea of the partnership is actually to get you a quicker and higher return for every INR 100 crore you spend. Does that answer your question?
Yes, ma'am. Yes, ma'am.
So really, if you are putting INR 200, right now you have INR 270 crore of CapEx. INR 100 crore is going into this plant that we are making. While INR 110 out of that, as I said, you consider the traditional debt equity ratio NRB Bearings has is about 0.47 to 0.5. It is just that we did not have that much CapEx happening. So the money got saved. But if you work on that number and then you see that you have to just put 75% and 25%, as I said, for example, in the JV, will come from the partner. At the end of it, instead of trying to sell all of it, which again has a cost, you will have already a customer for 20% of it because there is a buyback in the JV
Again, if you have any technological challenges, and you are talking about getting the top European customers, which are already in India, which are already customers in Italy and in the rest of Europe, of our JV partner. So we get the approvals from the customer that much faster. When you keep all these things in mind, definitely I would say that traditional 100 would go down conservatively to an 80 or something like that. That means you would get 20% more from the INR 100 crores depending on the kind of JV or acquisition or the kind of order book that you have in advance or the kind of capabilities that the company that you are partnering with has. And that is the model that we are going to use for new segments.
Thank you. The next question is from the line of Saket Kapoor from Kapoor and Company. Please go ahead.
Ma'am. [Non-English content] ma'am. Am I audible?
Yes, you are. Please go ahead.
Yes, ma'am. Ma'am, firstly, pertaining to the EBITDA margin number. We have posted EBITDA margin at 19.3%. That is closer to 20%. Even for nine months it is closer to 20%. What should be the trajectory that we will be guiding going ahead? Are these the peak margins and what factors have alluded to the incremental margin from 18% to this 19.5% journey? Secondly, ma'am, you have already spoken about the CapEx part, but in your earlier conversation you did spoke about INR 500 crore worth of CapEx that is in the annual. If you could just give some more color on for the INR 2,500 crore top line that we are eyeing. How much CapEx is needed to be done? Thank you.
Right now this CapEx would take us approximately 2.5 years. The number still stays. You get my point?
No, ma'am. Come again.
As I said, it depends on whether it will be INR 250 crore more, whether it will be INR 200 crore more or INR 300. It will depend on the kind of partnerships that we form for additional products beyond the INR 2,500 crore, which is basically based on the current product strategy. That's one answer. The second is that this is EBITDA as a percentage of sales. It's not EBITDA. So if your company is growing at 12% or 14% and then you maintain your EBITDA, your actual EBITDA grows, as you've seen, substantially. Are we going to maintain our EBITDA as a percentage of sales between the 18% and 20% band? Yes, we are. Exactly how much it will be on quarter and quarter has a lot to do with cyclicality and seasonality.
Right, ma'am. In terms of volume growth, the growth which we have seen currently, these are-
We don't give out volumes of our products though, because we make too many different products unlike the other bearing companies which make one or two type of bearings. So there's some meaning. The Timken Company only makes taper bearings, for example, and cylindrical, so they can give you volume. But in our case, the volume and the product mix is not relevant. We really look at how profitable a customer is, and we don't tend to share that data externally.
Thank you. The next question is from the line of Gatha Jain from Anantnath Skycon Private Limited. Please go ahead.
Hello. Hi, thank you so much for the opportunity, and congratulations on good sets of numbers. I just had one question. Are we targeting EBITDA margin at over 20%? What strategies are we implementing to achieve it if we are targeting it?
I believe I did answer that question. Our aim is to make sure that our EBITDA margins are maintained in spite of this kind of high growth that we are talking about going forward. Though certain lines of business are much higher margin, and certain lines of businesses that we will target may be slightly lower margin. At the end of the day, for example, if we even had INR 200 crore or INR 300 crore, which I am not giving as future guidance, but I am just mentioning for thumb ruling of aerospace business, it would be somewhere around 30% EBITDA margin. On the other hand, if you enter a very large segment, like wheels, supplying to wheel applications, then you would get a lot of volume jump, but the margins might be, for the sake of discussion, 16% or 17%.
Whichever way you look at it, you can be rest assured that we would have strategies that maintain our EBITDA margins as a percentage of sales. At the same time, we also grow. Again, conventional wisdom would show that a company our size, if it grows, definitely the fixed cost would go up. It would get spread, let us put it that way. I think those are things that will pan out as we go. That is what we feel it will look like. Ma'am, did I answer your question without future guidance?
Thank you. The next question is from the line of Apoorv from ANS Wealth. Please go ahead.
Is this the last question? Because we have about five minutes left, right?
Yes. Ma'am, I just have one question.
Yes.
Ma'am, as we are planning CapEx of around INR 300 crore-INR 400 crore in the next couple of years, maybe next two, three years. Ma'am, the potential turnover from this would be around INR 400 crore as we do asset turn of one, right? And our existing capacity is up full. Ma'am, how will we reach the INR 2,500 crore top line by 2031?
I'm sorry, sir. I believe I answered this question more than once today. And it was a fairly long answer.
Okay.
I already have explained this.
Okay, I'll go through the recording, ma'am. Okay, thank you.
Sorry. Because it would take a long time because I've explained this, in fact, I think, to three different people covering three different aspects of this, how we can reach INR 2,500 easily and go beyond.
Okay, ma'am.
In terms of the spend. Ma'am, one last question in this case, since this was an already answered question. If someone has a different question to ask, I would be happy to share it.
Yes. Ladies and gentlemen, this will be the last question today, which is from the line of Garvit Goyal from Serene Alpha. Please go ahead.
Hi. Thanks for the follow-up. And pardon me, I am very younger in terms of age than you, ma'am. But I have a suggestion for the management. Please try to listen to the investors first. When I said 13%-14% growth, it is obviously from the current levels of top line. While 12% CAGR, which you mentioned, ma'am, please check your PPT. It is based on the historical levels. Thank you very much.
No, one second, sir. Can you just repeat that? Because what I mentioned. Can you explain what you mean by historical levels, sir?
In the PPT, the sales CAGR chart, which we have given, the CAGR-
We haven't presented PPT in today's. That must be a very old. That would not be-
No, it is not.
We actually have not put a PPT for today's investor call.
It is not very old. It is November 25 PPT, ma'am. Thank you.
November 25. So it would be two quarters back, or is it one quarter back?
One quarter back.
So it is last quarter, right?
Last quarter, yes.
Okay. If you see from today's level for INR 2,500 crore, that is the point that I made. Am I wrong in my calculation?
Yes, ma'am.
Am I wrong in the calculation? Just check the calculation quickly. I don't have a calculator in front of me. What is the exact number we've achieved? Give me a second, sir, because your question is important if I've not thumb-ruled the calculation right. In my mind, it was 12%-13% and not 13%-14%, which is what you mentioned.
That is fine. I'm just trying to understand. My question was totally different, but you said-
No, please go ahead with your question. Go ahead with your question then.
I am just trying to understand from you, why are we not a little bit aggressive in the terms of I understand we are having the plans. We are entering into the newer areas. We are entering into the aerospace, which is obviously a growing area in India right now. I am just trying to understand why are not we a little bit more aggressive in the terms of our guidance. Just that thing I just wanted to understand from you, ma'am.
To be very honest, I will answer your question in two different ways. We are very aggressive, but we do not tend to give guidance. We tend to like to perform beyond what we state, and I think it is just a company culture. It is the same thing that makes us an AA- CRISIL company. We tend to be prudent in what we express, and we tend to express things in a manner that we as a team can outperform. I think you would have seen that even in the last three quarters, and therefore, probably it is just that we do not like to state things too aggressively. Does that answer your question? But principally, yes, I understand where you are coming from, and it is a likely outcome.
Got it. Thank you very much. Thank you.
Thank you. Ladies and gentlemen, as this was the last question for today, I would now like to hand the conference over to management for closing comments.
I would like to thank you very much for very insightful questions. It is always very interesting for me, and it is a great learning experience to see what are the concerns and whether we are addressing them appropriately and where are the opportunities, because there are a lot of ideas. I can assure you that everything all of you have said today has been noted down very carefully, and we will think about it, and we will build it into both our strategy and our operating plan. Thank you for your time, and thank you for the very interesting and insightful questions. Apologies if some of them could not be answered because we do not tend to give future guidance. Thank you.
Thank you. On behalf of NRB Bearings Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.