Q2 21/22

Oct 11, 2021

Ladies and gentlemen, good day and welcome to the Ramkrishna Forgents Limited Q2 FY 'twenty two and Half Yearly Investor Conference Call hosted by ICICI Securities Limited. 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. Please note that this conference is being recorded. I now hand the conference over to Mr. Rushad Kapadia from ICICI Securities Limited. Thank you and over to you sir. Thank you. Good evening, ladies and gentlemen and welcome to the Q2 and H1 FY22 results conference call of Ramkushner Forgings Limited. We have with us from the management Mr. Naresh Jalan, Managing Director Mr. Chaitalyan Jalan, Whole Time Director Mr. Lalit Khetan, Executive Director and Chief Financial Officer and Mr. Rajesh Mundra, Company Secretary. So without further delay, I would now like to hand over the floor to Mr. Lalit Khetan for his opening comments. Thank you and over to you, sir. Thank you, Rusal. Good evening and a very warm welcome to everyone present on the call. Along with me, I have Mr. Naresh Salan, our Managing Director Mr. Rajesh Mudra, Company Secretary and SG, our Investor Relations Advisors. Hope you all have received our investor presentation by now. For those who have not, you can view them on stock exchanges and the company website. We trust and pray that you and your families are safe, healthy and secure. We hope you all are following best safety protocols and ensuring safety against COVID-nineteen pandemic. We at Ramakrishna Polging to ensure safety of all employees during the pandemic have followed strict safety culture and COVID-nineteen protocols. We have conducted all the necessary vaccination rights in all its facilities and ensured that its entire workforce was vaccinated. We also organized several vaccination rights for public at large. With recent signing of MoU for the development of EV powertrain components with U. S.-based technology partners, which follow our first order in EV segment from foreign multinational Tier 1 OEM in India. We are well placed to capitalize on the fast growing EV market in Indian market. This breakthrough in EV market is also testimony of our strong R and D as well as product offering in terms of complexities and designs. The P and I scheme which focuses on the EVs and hydrogen fuel cell vacuum manufacturing will act as a strong catalyst and catapult the domestic industry into next growth orbit. The domestic operating industry is still on its way to recovery after the second wave. The silver lining is the commercial vessel segment, which has performed relatively better and this august well for us. In the European markets, commercial vessel distillation for the period January to August showed high growth this year for the sector as the economy emerges from the pandemic hit. Nearly 1,300,000 new commercial vectors were registered in European Union during the 8 month period, making growth of 24% compared with the same period of 2020. Demand is driven by Central Europe, where sales continue to remain strong. Used new light vehicle sales in January to September reached 11,750,000 units. Sales for 9 months of the year are up at 13% compared to same period 2020. We have added customers in Europe and North America and started supplying to South America, and we expect to add more customers going forward and expect improved contribution from exports. During the quarter, we managed to receive contracts worth RUB 6.20 code from 8 contracts from various geography and business verticals. As mentioned earlier, we have also signed MOU for the development of EV powertrain components with U. S.-based technical partners. With the help of this project, we have expanded our product offering in EV market. During Q2, we commenced commercial production at 2000 tonne 1 4 gs Westline as well as our fabrication facility. With this, our capacity has been increased to 1,87,100 metric tonne and this also marks end to our current CapEx cycle. As part of our growth strategy, we continuously work on de risking our product portfolio by diversifying across different segments, customers and geographies. During the quarter, we added customers across various segments and geographies, and we are confident to get repeat orders from the customers and foresee a strong performance in upcoming quarters. That's it from my side. Thank you. Should we start the floor for Q and A? Yes. Thank you very much. We will now begin the question and answer session. The first question is from the line of Raghu Nandan from MK Global. Please go ahead. Thank you, sir, for the opportunity. Congratulations on stellar numbers. And my first question was on the order contracts of RMB6.2 billion. Congratulations on winning these orders, which gives visibility for outperformance of the company versus the industry. So, here, just wanted to understand of these orders, how much would be new orders, how much would be replacement orders? And this quantum of €6,200,000,000 would it represent a single year order or would it represent the lifetime order? And lastly, another clarification, would most of all of these orders commence by FY 2023? I would understand that some of it would start in FY 'twenty two, but would it be fair to assume that everything would have started off by 'twenty three? Raghun Lim, first to answer your questions 1 by 1. These are all new orders. There are not any replacement orders. Number 2, these are all orders which go into production in terms of sampling this year and bulk production is in different quarters of FY 'twenty three. And the entire full year production is going to be from FY2024 onwards. Thank you, sir. That was very helpful. And so I'd like the new orders seem to be flowing in And thank you for the timely updates on the exchanges on the new orders. And here, Naresh, sir, if I can like take your opinion, where are you seeing the traction in terms of the geography and within industrial, which have the segments from where you are seeing the traction for new orders? New orders in terms of auto sector is coming mostly from Europe and in oil and gas is coming both from U. S. As well as Dubai to be a country sir, like on the industrial side, on a quarter on quarter basis, there has been a very strong improvement. Q1 was closer to INR 45 crores, whereas Q2 has come in at closer to INR 108 crores. So this Q o Q improvement has been led by the segments. And just wanted to understand you expect the momentum to continue going forward as well? In industrial segments, we are majorly now contribute sales are being contributed from tractor and earthmoving equipments in domestic and exports both. And we expect this to more expand in coming quarters. And new order wins, you will see new order wins also in coming quarters, making it more clear that how we are derisking our entire model going forward. Wonderful, sir. Sir, on the congratulations on the EV powertrain components where you have made progress. Can you elaborate on what are the products we are focusing upon and what is the size of opportunity? And also if you can talk a bit about the initial EV order which you have got, please? Our initial EV order is basically in terms of manufacturing parts for motors and controllers. And our joint venture also for first thrust is into manufacturing motors and controllers for 2 wheelers, 3 wheelers and 4 wheelers. Right now, I would not comment on the size of the business. We would still wait for another quarter before we have entire clarity with because we are in process of right now, we have only signed a definitive agreement, but we are in process of finalizing a joint venture agreement. So we would wait for once the joint venture is concluded before we put anything to light in this. Thank you. This is the operator. Mr. Raghunandan, may we request that you return to the question queue for follow-up questions. Thank you. The next question is from the line of Abhishek Jain from Dollard Capital. Please go ahead. Thanks for opportunity and congratulations on a strong set of numbers. Sir, during this quarter, there's a big difference in standalone and console performance. Although on revenue basis, there's hardly any differences, but EBITDA and PAT is lower by 8% and 6%. Where all these losses incurred? Please show some light on it. Abhishek, this is basically a mix of the loss incurred by our travel subsidiary. That's around 1.5 to 2 crores on account of that, another 5 and that crores on account of India's accounting adjustments done on the sales to the U. S. Subsidiary. So will it be continue in the coming quarter? [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] No. So the process will continue. It depends upon the sale, how much the sale goes in that quarter. And certainly, there will be some adjustment every quarter on account of this. Okay. So on console basis, that EBITDA margin would be around 21%, 22%. But it may improve in the upcoming quarters where we haven't seen more sales there in the U. S. Subsidiary. So subsequent adjustment is not going to be this kind of this is, I will say, this quarter, the gap is, I will say, one of them. Okay, fine. That company was also looking to buy assets of the ACI, Amtech Auto. What is the progress right now? Amitay is still pending with the NCLP and we are awaiting the next phase of billing on 26th October. Okay. And sir, can you throw some light what is the capacity there and how much revenue it may add if you want this business? I would say that is machining of clanksha basically. And so that's in terms of 3 wheeler, 4 wheeler stem shaft, 2 wheeler stem shaft, the mix hubs, onboards, all the materials. We have also earlier given the guidance there is a revenue potential of 500 to 84 from that unit at an optimum capacity utilization. Okay, fine. Sir, that company is also looking to raise funders of around INR 500,000,000,000. So just wanted to understand what is the objective for you and how much equity dilution will be possible in the coming quarter? [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] We have not yet decided on that. So still that needs to be decided how much fund needs to be raised and when. So we will inform you as and when we will decide on that. [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] So your date is increasing continuously. There are some pressure on the working capital side as well. So what is your effort to generate FCF and start to re cement it? Because this quarter also, we have seen that debt has gone up to the 13 net debt has gone up to the 13,200,000,000 versus 11,300,000,000 of last year. Yes. As you said, the net debt has gone up by about 140 crore if you look at the 6 month performance, but you can see the pressure on the working capital, current asset has gone up by about INR 300 crore against that. So that's due to the increase in exports, basically more increase in exports and a little bit increase in the VMI stocks. So that has created and the kind of growth trajectory we are in, there will be some pressure on the working capital for the time being. But once we reach the optimum level, then it will start moderating and certainly we will start separate free cash flow. Okay, sir. And my last question is related with the gross profit per tenant. It used to be the 65,000 to 70,000 that has gone up to the 110,000 per tonne in last couple of quarters. What are the key reason of this sort of the expansion in gross margin despite the higher R and D cost? [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Basically, Visek, I think it's a premix of job and better value addition on the jobs which we are trying to do as we move forward. So is it because of the battle mix or because of the BS VI contained increase in the contained for Vitthal because of the BS VI and other things? And also It's not basically BS VI. It is basically we are slowly but steadily graduating from only forging supplier to fully finished product and now fully finished product are getting converted into assemblies. So as we ride up the value chain, our RM cost to sales are getting affected by which gross margins are coming going up. Okay, okay. And so what is the current capacity of machining and how much change in the machining in the last couple of months? Almost, I think in last 6 months, we have moved from 45% to 50% to almost 75% plus in terms of machining and assemblies. Thank you. Mr. Bhushik Glyn, we request that you attend to the question queue for follow-up questions. Thank you. The next question is from the line of Mitul Shah from Reliance Securities. Please go Thank you for giving me this opportunity, sir, and congratulations on a very strong performance. Sir, I have first question on your average selling price per kg, which shows roughly 7% improvement on a sequential basis quarter on quarter. So I would like to know how much is the price hike purely and how much would be whether product mix or value addition? Metal, I think it is extremely difficult for us to say how much is for a metal price increase and how much is for product mix change? It is extremely difficult for us to Sir, I'm asking how much price hike we have taken in this quarter? We have taken INR 6 or INR 5 90 price hike for steel, which has happened in this quarter. Okay. And then sir, on the second question on the RM side, RM by sales is since last 2, 3 quarters is a huge fluctuation. Like for example, Q4 was 51%, then it fell down to 39% in previous quarter, that is Q1 FY 2022. And now it has again come to 45%. So what should be the stable range one should consider? Mitul, I think it is extremely difficult right now to predict that with the raw metal prices changing every quarter, it is very difficult to say because how much inventory we are left with or how much inventory we go into next quarter with. It is and when the price increase actually basically things which are difficult to predict is the retrospective effect of the raw material price increases which are happening. Because of that, we are unable to predict how things are moving. A little bit to add, Mehul, what happens when you see the last quarter number or the current number see when you get the increased, decreased component in the cost of goods consumed. There are lot of cost other than the raw material also involved with that, that is reduced for the purpose of presentation from the raw material like processing cost, other manufacturing cost. So that's why you find that NAM only, but the 46% to 50% is always benchmark number to consider this. Yes. So at least on a near term whatever visibility we have that 46% to 50% would be a probable range? Yes. And sir, my question on the again export and LTV side, can you give more detail on what is the now situation of LTV segment in terms of utilization, margin improvement and orders new orders? I think gradually we are winning new orders. I think we have been keeping our investors posted with whatever new orders we are winning. In terms of LCV, we have we are doing exceptionally well in the North American market. And we feel that in coming years lot of new orders are going to come in which is going to make a significant progress in LCV itself. For the quarter, LCV would be how much as the overall percentage of revenue? In terms of export overall revenue, I think there are 2 parts to it. Lot of materials right now sitting in LLC in terms of North American sales in LCV. And the sales which we have already taken into account, so I think close to 5% is LCV sales. But lot of material is in warehouse and in LLC. Okay. So, out of this revenue, it would be roughly 5% at present? Yes. And on export side, sir? On export side, I think Export overall export view outlook in terms of I think we are going to remain strong. What we feel only in our presentation, we have clearly highlighted we cannot predict the semiconductor issue what is going to plan out for it. But looking putting semiconductor issue aside, I think we should do continuously do well during the entire quarter. Because earlier we were expecting roughly INR 900 crores kind of annual revenue. Now it seems with this INR 100, it could be definitely much higher than that. So what could be We would not like to give any forward looking numbers. But only thing what we can say that we are going to remain or working in a consolidated manner and we should look at doing much better than what we are doing right now. Okay. So last question on the margin side, this 24% EBITDA margin historically high. So any view of course, I'm not talking about next 1 or 2 quarter based on the fluctuation of raw material as well as uncertainty on semiconductor side. But sustainability wise 24%, is it sustainable or it could be one off and stable margin would be 21%, 22% No, we are looking at sustainable margins at this level. And I think what are the work we have done post COVID is resulting in this kind of margins for us. And I think we would like to in last quarter, we had attained 23 plus percentage of margin. That is a sacrosanct number for us, and I think we are doing all what is required to improve on those numbers. So we are not surprised with what number 24 plus numbers what has come. We are working on improving the margins from what we had done in Q1. Thank you. Mr. Sham, we request that you return to the question queue for follow-up questions. Thank you. The next question is from the line of Yashoda from Daiwa Capital. Please go ahead. Hi. Thank you for the opportunity. My questions have been answered. Thank you. The next question is from the line of Dheeman Shah from 1UP Finance. Please go ahead. Yes. Thanks for the opportunity. One clarification on the Amtech, you said the capacity is related to machining. So if you can help me just kind of rewind that number that you mentioned, which it can add in terms of incremental sales on a full year basis? Yes. The VF safety on way of safety, on optimum capacity, we can go from 500 core to 800 core. Okay, okay, okay. You mentioned a very interesting thing, and it is partly reflected in your improving gross margins and, of course, the overall EBITDA margins that you are guiding for. So as we move from smaller products to finished products to assembly, where do you think given the current capacity will plus give or take whatever, will this mix reside, right? Will it be very crucially in favor of the assemblies? Or as we embark on this journey of more and more value addition as we move forward? I think with our CapEx cycle almost over, Right. Now it is time for us to fix our utilization and improve capacity versus what we had in terms of whatever better utilization we can do from the capacity. So I think going forward, you will find more and more improvement in terms of machining, assemblies and this is the thing which we have to continuously do for next 4 quarters at least a year before we look at further adding in capacity with the market growing. What we have said in our opening, Lalaraj also said, we are seeing green shoots in Indian economy and Indian auto sector now reviving. So we are looking at doing such things to improve our utilization in terms of machining and assembly to ensure that we are at the upward trajectory of the capacity. Right. So can you give us just some broad range that okay, machined and assemblies put together would be at least upwards of 60%, 70% of the total tonneau? No, I think we are looking at going up to 85% to 90% of our forgings in machined condition or assembled I mean, next two quarters, let's say. Okay. And given the kind of growth and geographical expansion that you are seeing, would it be 1 year before you will need to consider the next leg of capacity expansion, if any? I think nothing before FY 2024. Okay, okay. So that means that we would possibly overall be complete, as you rightly pointed out, towards the higher value added products before which we Yes. Once we are at the optimum of our current capacities and we are debt light, that is the time when we start getting free cash flows and we are able to repay most of our debts, then we are looking at to go ahead with doing any expansion of the debt dilution. But the lead time would be, sir, at least even if you plan, let's say, in FY 'twenty three, by the time you order and it comes, it will always it will be beyond FY 'twenty four. So how early do you need to plan for the next leg of expansion? I think it is extremely difficult at this stage to give any No, normally what are the lead time in your It depends on the market condition. If the market is hot as it is today, it will take 12 to 16 months. But if market lightens from here, it might take happen in 6 months or 12. It all depends on the market condition at that time when we start looking at capacity expansion. Perfect, perfect. And lastly, if you can comment on the working capital cycle, will it improve for us? The thing observed in the quarter, was it one off? Or can this working capital kind of improve? Was it that only because of sampling, because of certain export order? I think if we continue to grow at the pace we are doing from Q1 of INR 400 plus crores to almost INR 5.80 crores, If that kind of expansion happens and mostly from exports, I don't and I think it will take some time before the working capital cycle eases out because shipment starts reaching and then we get paid. It is a full 3 month cycle when things start looking at. So we should be from Q4 onwards start looking at things to normalize and debt coming down in the lower side. Super. Thank you. And one last question, sir, if I may. How do you think on an overall basis, both domestic and exports, is the pass through of the raw material happening for us? I think it is 100% pass on. Except the government contracts on the domestic side, all raw material is 100% pass on for us. Okay, okay. Great. Thank you so much and all the very best. Thank you. Thank you. The next question is from the line of Dheerul Shah from Philip Capital. Please go ahead. Good evening, sir, and thanks for the opportunity. So my question is pertaining to the passenger vehicle side. So any progress over there as we're looking to enroll into that segment? [SPEAKER SRINIVASAN VENKATAKRISHNAN:] Yes. We have started making progress in the domestic side in TV. Okay. So is it contributing right now or this will going to contribute from next year? It's going to contribute next year only. Okay. And sir, on the railway side, how much it has contributed to the non auto side? I think Lalit can give you the exact number or railway in first half? Railway has not done very well in the first half altogether. And I will say we have done a very nominal sales so far. But we are looking now the orders are getting the mother railway structure buying and market railway segment is also looking up and in the next upcoming half we are looking for much better number on the railway. Okay. And then lastly on the EV side, are we looking for any new equipment from the EV segment or it will be entirely settled to the existing joint venture joint venture partners. We will require a CapEx, but that may be extremely small CapEx of $5,000,000 to $6,000,000 only. Okay. So this INR620 crores work which you are talking about, it will be from FY 'twenty four, right? And this will be for how many years of model, sir? It is for 5 years. Okay. So distributed equally, right, evenly? Yes. Okay, okay. Thank you so much. That's it from my side. Thank you. The next question is from the line of Viral Shah from INAM Holdings. Please go ahead. Yes, hello. Thank you for the opportunity. So firstly, just a clarification, what will be our net debt number at the end of the quarter? This number right now, we will reach Okay. So has it come up from September quarter or this was the number at the end of September quarter? The number at the end of September quarter, I assume. Okay. No, because in the balance sheet, it is showing Yes, I just I just verified the balance sheet. What we do is that there is a bit discounting of Tata Motors that is notional. We have to add in data as well as in borrowing that is under 13 crores apart from the 26 crores cash balance we have reduced from arriving at this net debt. Okay, okay. Got it. Okay. Secondly, sir, on CapEx, if I get the number right, in H1, the CapEx outflow was INR 100 and 50 crores. So what should we consider for the full year? [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] This is the operator. Sorry to interrupt. Mr. Mr. Viril Shah, please self mute your line. Hello? Hello? Yes, sir. Go ahead. Rohit, can you answer the question? Yes. Viral, are you there? Yes, sir. Yes, okay. So on the CapEx, I think we have already completed major part of our CapEx and there are some small CapEx are pending. I think another 25 to 34 will come in the Radesh part of the year on the CapEx side. So it is fair to assume that our CapEx outflow for FY 2022 would be below INR 200 crores? Yes. One more question, sir, on the inventory, sir. We've seen a fairly large rise on the inventory side. If you could clarify what was the reason why we've seen such a hike in inventories? [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Yes. Basically, it has been on account of increase in stock at warehouses due to at Europe and U. S. The vendor management retreat has gone up and Septia has also gone up because we were building up inventory for the improvement in a big market, which we are doing and that has not happened so far. So that's why a little bit built upon inventory. And just one last question, sir, on the steel price. For the export contracts, are steel prices related to the domestic market or international market? And how do you pass through? [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] No, Vivek, Viral related to international market. And basically, we rely on contractual indexes. We have different indexes in different contracts and based on the increase and decrease on those indexes the steel price is passed on every quarter. Any further pass through which is remaining, sir, or we've largely kind of covered for all the steel price increase? As to 30th September, we have got all the increases. Thank you. The next question is from the line of VB Rajesh from Banyan Capital. Please go ahead. Yes. Hi. Thanks for the opportunity and congratulations on a good set of numbers. My first question is on the new order wins that you mentioned earlier. Are we winning against other competitors or are we getting incorporated in the new models of these customers' vehicles? I think Rajesh, we will not be able to answer to this question because we don't know whether we are replacing any other supplier or whether it is for new models, we don't know. We don't ask all these questions to when RSQ comes to us, we basically deal with the RSQ and basically close those RSQs with our customers. We don't ask them questions related to who are the current suppliers or whether they are new components. Okay. And then the other question, you said you are looking to reduce your debt. So is there a target to which you will bring it down to and by when? It will not quote you. Can you repeat your question? Yes. You mentioned that you are looking to reduce your debt by Q4 as the working capital cycle uses. So working capital yes, there is a pressure on working capital. And once working capital level starts to improve, the debt will automatically go down. Right. So any targets if you want to share with us for next year in terms of what it will be? [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] We have earlier given the target that the audited level will remain at certain level. I think at 1074, I think that number we should achieve. Okay, okay. Thank you. That's all I have for now. Appreciate it. Thank you. The next question is from the line of Abhishek Jain from Dollop Capital. Please go ahead. Sir, there is a forex lock of INR 11 crores in first half FY 'twenty two. It is because of the foreign dominated date? And second, do you count it on other expenditure or in face cost? No. We have a policy gain this week in the first half. We don't have a policy loss. Okay. Okay. And so do you have any hedging policy for the this sort of We do our part of our export forward same. That's we do, but we do not do 100% of the exports reggie. We do around 100%, 60% depending upon the circumstances we do that. Okay. Asad, during this quarter, we have not seen any revenue performance on the from the subsidy side, only we have incurred losses. So can you throw some light on the business and operational performance of these subsidiaries? [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] See, we have the revenue, but due to India's suggestion on the U. S. Subsidiary that revenue has been set up. That's why you're seeing a lot in this quarter, not revenue. But from the next quarter, you can see both on the top line, on the bottom line, the reflect of the same. So that means we have only in the travel segment where we are adding business or diversifying some business in that segment only and we have a foreign subsidiary where we are selling goods produced by Ramakrishna Cozy Limited to our customers. Okay. My last question related with this export side. You want to revisit your guidance for the 50% growth in export for FY 2022? No, we would not like to revisit right now. So what sort of the growth can we assume for the second half? Because the growth was quite strong in the first half. So I think we would continue with that growth. Only the statement we would like to attach with it, but this is just the beginning of the journey. Much. Thank you. The next question is from the line of Arjun Khanna from Kotak. Please go ahead. Thank you sir for this opportunity. Just a question in terms of working capital, if I look at numbers, you have actually given the production numbers also. So it's the understanding, right? So we had roughly 28,729 tonnes of sales and our production was 36,363. So essentially, we built roughly 8,100 tonnes of inventory. Is that the correct understanding? [SPEAKER SRINIVASAN VENKATAKRISHNAN:] No, no, no. That's the 4th production and that's the same quantity. That's the mix of mixed machine and 4th. So there is some gap between the stock and production here. Okay. So in basically machining some parts, obviously, the weight comes off because we right size it. That's the correct understanding? Yes, correct. Okay. Sure, sure. No, this is helpful. And if we look at inventories by itself, would you characterize it as unnaturally large maybe because of what we have seen with container issues, etcetera? Or you think this is largely a normalized inventory? No, I think this is largely because of delays in right now shipments and material getting accumulated in the warehouse also. Because of semiconductor issue, material has not been pulled to the extent we thought it will be pulled from the by the customers from the warehouse in RKFL LLC and our European operations. So that's the reason you are seeing this kind of inventory. Sure. That's helpful. Thank you. Thank you. The next question is from the line of Jinesh Gandhi from Motilal Oswal Financial Services. Please go ahead. Hi, sir. Congrats on good set of numbers. My question pertains to the capacity of 1 lakh 87,000 tonnes. So what kind of revenues we can do from that capacity considering the mix change which we are trying to attain? I think it is extremely difficult for us to right now tell you what is the kind of revenue we can attain. What we are talking about is right now is we are looking at almost 80% to 85 percent utilization in the installed capacity by FY 'twenty three. And to get a top line to it is extremely difficult right now because the way dynamics are changing for us on day to day basis, We cannot predict what is the revenue number going to be with that. Okay. Okay. And this order book, because you talked about INR620 crores. So effectively, annualized rate is about close to 1.30 crores from this. That's the correct understanding, right? No, 680 is annualized and it is a 5 year contract. Okay, understood. Great. So thanks and all the best. Thank you. The next question is from the line of Mittul Shah from Reliance Securities. Please go ahead. Sir, thank you for gaining the opportunity once again. Sir, I have So, I have a question on non auto side. Apart from railway, what is the status in terms of other segments where we are trying to enter and expanding? Madal, I think we have already started expanding in factors in earthmoving and this has already started showing in our balance sheet also. And I think our entire endeavor and trust is that in next couple of quarters, non auto segment, which is oil and gas, tractor and as well as the earthmoving construction equipment and other things becomes equally big as the auto sector for us. For this quarter, sir, how much contribution was from this? I think the number I think Yalif will be able to tell you the exact number precise what is the indexer segment number. Do you want number right now? Yes, sir. Because in our presentation, other segment, we have shown as almost like 19%. So how much or can you give some break up there? See, that's the number we have actually we have from the sales customer wise, so 90% fairly on the non auto side what we are looking at, it contains certainly oil and gas, railway and the up moving equipment basically. And so if you look at broader number, certainly, it will be somewhere because see, the domestic side, even this contains scrap also, they are known. So this is a mix of kind of thing. So number certainly from this 18%, 19% is coming to around INR 100 crores. You got the number I think that way from the presentation. Around INR 45 crores, if I may put an approximate number, it is for around INR 45 crores from this non auto segment of railways, factors and Okay. Yes, that is very helpful, sir. And so second is on the margin side. So new order wins are generally slightly higher margin segments, right? And most of them are again from the overseas, which is a higher margin territory for us. I think it is very difficult for me to comment on new auto wins margins from new auto wins. I think once the manufacture we take up manufacturing both those components then we will be able to understand what margins. Right now it is basically a calculated margins. And as I said in my earlier statement, 23% is sacrosanct for us in terms of attaining an EBITDA, working at an EBITDA level. I think we are trying to improve more than that. And this our effort for continuous improvement is already showing in our current results and it will continuously show in the coming quarter results. Sir, lastly, just to reconfirm on the CapEx side, for FY 'twenty three, we are saying our major majority of the CapEx is done, so only maintenance related CapEx. So it should be roughly like INR 40, INR 50 crores kind of annual that should be the range, right? Yes. Thank you, sir. Thank you. The next question is from the line of Utkarsh Samayam, individual investor. Please go ahead. Hi. Thank you for the opportunity. Can you please tell me the replacement cost of your current capacity of 1 lakh 87,100 tonnes? I am unable to understand exactly what do you mean by that. Basically, how much does it cost you to put up 1 tonne of capacity? We don't have any such figure of 1 tonne of capacity, how much does it take to put up. But in case anybody wants to replicate what our cable is right now, he will need at least INR2500 to INR2,000 crores in his pocket to replace RKFL as a whole in terms of only assets. That's good. And another question. So assuming that your product mix is only going to improve from here and if I take the current quarter as just a base, can I assume you can do INR 35100 to INR 4,000 crores of revenue? I would not like to comment on what revenue we can achieve. What we are talking about is close to around 85% to 90% utilization in FY2023 of our installed capacity of 1,000,000 87,000 tonnes. And as the capacity commodity prices moves up and down or the premix changes because the market is so dynamic. We would not like to comment on what in terms of rupee or monetary terms what the revenue can be. Is it fair to assume that your product mix will only improve from here? Yes, it's fair to assume that the product mix is going to further improve from here. Okay. And the INR 500 crores to INR 800 crores of revenue from Amtech Auto, when do you think that would come into the consolidated number as you think? When the court handovers that plan was, we are eagerly waiting for the Indian courts to decide. And the day they hand over it in 12 months' time post 12 months' time from the handover, I think this revenue is going to get consolidated into the balance sheet. Okay. Thank you so much. Thank you. The next question is from the line of Kartikain from Suresh Advisors. Please go ahead. Yes, hi, good afternoon. Can you talk a bit about your mix set of growth plans in terms of what something about the color of new initiatives that you will be looking at? Would it be more of the same? Can you talk a bit about your mindset? Share some of your thoughts, please. No, I think, Suresh, it is premature to talk about anything what is going to happen tomorrow. Right now, whatever we have done, we would like to consolidate on that. Like I said in my earlier statement that we are looking at to become in FY 'twenty three to be a debt light company. And once that is done, we would like to grow from there on. And in terms of what we would like to do, I think our growth path is very clear. I think we are looking at adding in terms of value add and in terms of assemblies. And that is our endeavor that now we would like to be on the upper side of the value adds. And would that mean it will be less capital intensive going ahead? Or in terms of In terms of return ratio to sales to investment, yes, obviously, it is going to be on the lower side. But I think it is very, very premature right now to comment on what kind of investment or what we are going to do post FY2023. But I think our plates are full till FY 'twenty three. And I would like to comment only on the when the delay comes. Right. And just to clarify, I didn't hear very clearly. Did you mention that the annualized run rate of new orders, 1 is INR 6.20 crores or is that cumulative? I'm sorry, I couldn't hear the clearly. Annualized run rate of INR600 crores per year for some contracts are there for 4 years or some are 5 years. I cannot I don't have the list of contracts in front of me. I think we have pretty announced it pretty clear and I think we have mentioned details in every announcements to our investors. I wasn't very clear about that. So anyway, thank you so much and best wishes. Thank The next question is from the line of Utsav Srivastava, individual investor. Please go ahead. Yes, hi. I just wanted to know what is the dividend policy that we have in the company? 1, because we've got to keep the card dividend and trying to go. What is the rationale? I think your voice is cracking. We are unable to hear you. Can you hear me now? Yes. I wanted to know what is the dividend policy of the company because we've got a 50 paisa dividend at this time. So I just wanted to know the rationale behind this Ps. 50 dividend? So we have uploaded our dividend distribution policy on the website. We can go through that. And this dividend distribution is always decided by the Board depending upon the quantum of profit earned or the cash flow available to the company. And considering lot of other things, lot of dynamics are involved. So that will be uploaded on the website. You can go through that. And to correct you, it's not INR 50 paisa in now we have for the half year, it is INR 1. INR 50 paisa we have already given in 1st quarter. INR 50 paisa is the 2nd quarter dividend. Yes. Okay. Thank you. And welcome back guys. Thanks. Thank you. As there are no further questions, I would now like to hand the conference over to the management for closing comments. Thank you, operator. We have been very thankful for all the participants participating in the Hong Kong Day. We wish all are very happy to the future going ahead. And if there's any query further, we are there to reply to all the queries and the questions that you have in the prepared remarks. Thank you all for attending the call. Thank you. Ladies and gentlemen, on behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.