I now hand the conference over to Mr. Raghu Nandan from Nuvama Wealth Management. Thank you, and over to you, sir.
Good afternoon, everyone. On behalf of Nuvama Wealth Management, I would like to welcome you all to this earnings call of Ramkrishna Forgings. I would like to thank the management for giving us this opportunity. We have with us today Mr. Naresh Jalan, Managing Director, Mr. Lalit Kumar Khetan, Whole-time Director and Chief Financial Officer, Mr. Chaitanya Jalan, Whole-time Director, Mr. Milesh Gandhi, Executive Director, Marketing, and Mr. Rajesh Mundhra, Vice President, Finance, and Company Secretary. Before we begin, may I remind you of the safe harbor. The management may be making some forward-looking statements that have to be understood in conjunction with the uncertainty and the risks the company faces. I shall now hand over the call to Mr. Lalit Kumar Khetan for opening remarks. Over to you, Lalit, sir.
Raghu, I think lot of noise on the call right now. I'm having lot of noise on the call. Rajesh, are you getting the same?
Lalit, can you look at it?
No, sir. No, sir, there is no noise.
Hello?
No, there is no noise in the background.
Okay, let me start. Okay? It's better. Ladies and gentlemen, good evening, and a very warm welcome to everyone present on the call. I am honored to be joined by Mr. Naresh Jalan, our Managing Director, Mr. Chaitanya Jalan and Mr. Milesh Gandhi, Whole-time Director, and Rajesh Mundhra, our Company Secretary. I hope you all have got an opportunity to go through our financial results and-
The person you are speaking with has put your call on hold. The person you are speaking with has put your call on h-
I think you're... Hello? Hello.
Hello.
Hello.
You're audible, Lalit.
Yes, sir. So I hope you all have got an opportunity to go through our financial results and investor presentation, which have been uploaded on the stock exchanges as well as on the company's website. We are happy to report that the company has delivered steady results for the first quarter. Firstly, let me give you a brief into latest trend in the global market. The global forging market experienced robust growth in recent years and with a projected increase from $94.74 billion in 2023 to $132.06 billion by year 2028. That reflects a CAGR growth of 6.7% over this period.
The market is also set to reach 17.6 lakh metric tons by 2028-29, with a CAGR of 5.4% during the period 2024-2029. The automotive sector holds a significant share of about 61.8% of forged components within India's forging market in terms of volume for the year 2023. In terms of value, the automotive sector contributed approximately $3.6 billion in 2023, and this is expected to grow to $5.4 billion by 2029 at CAGR of 7.6%. Now, let's look at our financial performance for the quarter and year ended Q1 FY 2025.
In Q1 FY2025, we achieved a revenue of INR 868.5 crore on the external basis, which represent a year-on-year growth of 4%. Our EBITDA margin for Q1 FY2025 stands at 23.1%, adjusted for impact of one-off expense of INR 17.5 crore, as compared to 22.4% in Q1 FY2024. The EBITDA margin expanded by 70 basis points year on year, and we are confident of sustaining margins of approximately this 23%+ for the forthcoming quarters. For our net profit after tax stood at INR 73.1 crore for Q1 FY2025, compared to INR 77 crore in Q1 FY2024. Looking ahead, there is a lot of optimism for the future. We see positive trends across different areas, including trade movement, trade rates, and activities in the steel, cement, and iron ore sectors.
Major projects like dedicated freight corridors are also expected to boost sales of commercial vehicles. With government finances improving and focus on growth-rated programs, we can expect this positive trend to continue. At Ramkrishna Forgings, we are ready to seize the growth opportunity by leveraging our strengths in innovation, operational excellence, and strategic partnerships. We are confident in our ability to adapt, innovate, and create value for our stakeholders while making a positive impact on the industry and society. Thank you for your continued support, and before we go to the Q&A, I request my colleague, Mr. Milesh Gandhi, to update you all on the market. Over to you, Milesh. Milesh, are you there?
Milesh is not there.
Sorry to disturb, sir. Hello.
So let me update the audience on the market. So we just to, for the benefit of the audience, we would like to know that those we have got a visibility of new order inflow INR 526 crore during the quarter from North America. That is, out of that, CV contains INR 201 crore, LV INR 109 crore, and MV INR 16 crore, and balance is non-auto, that is INR 200 crore. That is from non-North America. If you look at Europe, we got an order inflow of INR 287 crore, and that's mostly from the CV. EV was only minuscule, 1% of that.
... Then coming to India, we have an inflow of INR 442 crore from the CV side and INR 284 crore from the railway side. Sorry, INR 442 crore, the order inflow is INR 362 crore from the CB side, INR 80 crore is non-auto. Apart from that, railway is INR 284 crore. And apart from the rest of the world, there is an inflow of about INR 140 crore of orders on the CV side. That's the visibility we have on the order in Q1 FY25 on the additional order side. That's all from my side. Thank you. And now we can take the Q&A. Hello?
Hello, sir. Hello.
Yeah, please start the Q&A session.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 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 handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Mumuksh Mandlesha from Anand Rathi.
Okay. Have we started?
Please go ahead, sir.
Yeah, thank you. Can you hear me, sir?
Yes, we can hear you.
Yeah, yeah. Thank you so much for the opportunity. Sir, I just want to understand the rationale for this acquisition of the Resortes Libertad Mexican company. Just want to understand what's the reason behind the acquisition, sir?
No, I think, we have... This is just a company to start up in Mexico. It's this company has no business. To set up a legal entity in Mexico, for us, it would have taken us one year time and to start business. So we have acquired a legal entity registered in Mexico who has no manufacturing operations right now. So basically, we are, you might have seen that acquiring this, we have changed the name also of this entity, and now we will start our Mexico operations, which we had informed the investors in last year in this entity.
Perfect, sir. So on the order book, congrats on a strong order book for this quarter. Is it possible to share, sir, what would be the annual order book, that would get executed, say, by FY 2026 or 2027 post this acquisition, sir?
This, 100% this order book is executable in every year. This is total order book, which has been announced of INR 1,200+ crores, is basically a four-year order. So it's basically, if you see that, almost, INR 300+ crores is executable every year for starting next year onwards.
Okay. No, I mean, basically, cumulatively, sir, in the past year also, any cumulative number you would have, sir?
No, we would not. These are basically the new orders which we have got in this quarter. Previous past is already on stream and is already converted in businesses, and we, you will be able to see this in coming quarters in terms of incremental tonnages.
Got it, sir. Sir, on the coming on the results, sir, domestic revenue this quarter was very muted. Broadly in line with the underlying industry, we didn't see much outperformance. Is there any mix impact, like the low tonnage segment has grown more than the higher tonnage? Why is that?
No, I think basically, the small dip in the overall revenue, which you see in the domestic, is a mix of basically, lower offtake as well as raw material price decrease, which has happened in the domestic market.
Okay. And, sir, on the one-off of INR 175 million, which you mentioned in the presentation, what is this one-off, sir?
Lalit?
Yeah. So that's INR 17.5 crore, the one-off expenditure is basically a contribution to electoral trust.
Sorry, state of? Sorry, can you repeat, sir?
The contribution to electoral trust, that's the one, INR 17.54 expenditure, one-off expenditure.
Oh, okay. Sir, this quarter, gross margin has seen improvement, while the broadly export and domestic revenue Q into Q broadly unchanged mix-wise. What could have led to the improvement, sir?
You can see the price realization on the export side. If you see the export realization has improved, that has led to this kind of improvement.
This price relation, basically the price hike, which you got?
... No, so always-
Yeah, it is a mix of price hike, as well as it is a mix of, new order wins which we have started converting into businesses.
Yes, correct.
Okay, sir. Yeah, yeah. That's so promising. Thank you so much for this.
Thank you.
Thank you, sir.
The next question is from the line of Mitul Shah from DAM Capital. Please go ahead, sir.
Hello, am I audible, sir?
Yes, you're audible.
Yeah, sir. Thank you for the opportunity. Sir, my first question is on the subsidiary. It seems that there is a decent margin improvement on Q on Q basis, so can you give more details on this, and if you can give subsidiary-wise few key numbers?
So Mitul, coming to that, we just want to update you that we have started operations in JMT Auto, and the name of JMT Auto has been changed to Ramkrishna Casting Solutions Limited. So that company started operations. We have done the improvement in terms of margin in Multitech also, and the operations in ACIL is also being ramped up. So all the three contributed to this improvement in margin, and if I can say the marginal improvement from all the subsidiaries has led to this kind of improvement in the consolidated.
It is an operational efficiency kind of thing, or there is a raw material benefit also part of this?
No, it is only operational efficiency.
Okay.
I think, Mitul, just to update you, it is just a start. I think we had... When we acquired these companies also, we had said that it is a start of, new journey for us, and going forward with the experience we carry and with the team we have, it will be a continuous improvement in the subsidiaries in terms of margin improvements. You, and in the future also, you see the same trajectory being followed, and there is lot of headroom in terms of overall margin expansion in the subsidiaries.
Okay. Sir, one clarification, this electoral trust related amount is sitting in the other expense, right?
Yes, Mitul, that is in other expense.
Okay. Sir, second question is on the railway side. What is the status on this Vande Bharat order, which earlier you highlighted about INR 270 crore executed over 2025 and 2026? And any further update on that in terms of potential in this year, getting more orders?
No, I think in terms of Vande Bharat, it is just started. I think we have already started making protos. And in the coming quarter, we are going to submit the protos for validation. And from then, what is the time, whatever time it takes for validation, and we have, like we have said, in 2025 and the following year, we have to complete this order.
This INR 270 crore would be in FY 2026 and FY 2027?
Yes, and it will be in line with whatever Vande Bharat were made. But this, once this validation of bogie happens, it will open also new opportunities for us directly into the Indian Railways. This is a private sector order which we have got, but the, once the validation and our design is approved, it will open also an opportunity after six months in current railway manufacturing of the Vande Bharat and other, private sector orders also, which government is in process of going forward.
Sir, which are this component? Can you highlight few things on this?
No, it is entirely assembled bogie-
Okay.
in which, under frame of the Vande Bharat. It is in full complete assembly, so it is not a particular component, it's entire assembly, which we are going to make and sell.
Okay, great, sir. Lastly, on sir, what is update on this Titagarh JV, and when we are expecting first product to come out, operation to begin, and what can be the first year revenue potential?
So I think right now it is moving as per our vision, and I think we look at FY 2026 last quarter to be the first batch of productions for railway validation to start rolling out.
It is on track and on time.
Yeah, sir. Thanks a lot, and all the best.
Thank you, sir. The next question is from the line of Rohit Singh from Nvest Analytics Advisory. Please go ahead, sir.
I audible, sir? Hello? Hello? Hello. Am I audible, sir?
Yes, you are audible.
Thank you for the opportunity, sir. My question on the demand outlook for the current year, and what is the volume guidance for FY 2025?
No, I think as in terms of demand, we still, still stand by our commitment of 15%-20% volume growth year to year. So FY 2024- FY 2025, we feel that we will be able to achieve and do better than what we have predicted it.
Thank you, sir.
Thank you, sir. The next question is from the line of Akhil Gulecha from Pked ay Family and Office. Please go ahead, sir.
Hello. Good evening. So my question is a bit generic, so pardon me for that. The last few years, our major growth has come from exports. So can you please explain very specifically, like, why have all of these export orders come to India, and why have they specifically come to us, Ramkrishna Forgings? What are we doing that is so different than our competitors in India or globally?
I think I cannot, cannot answer your question why the customers are coming to India. I think what we can say that we have set up a world-class facility, and we are marketing that accordingly in the global world, and the customer who are looking for diversification or introducing world-class technology are buying products from us.
Okay, okay, understood. So, is there anything specific? Because, the growth has come recently in the last few years as opposed to earlier on, so anything that has changed significantly? Is it the high energy prices globally, is that why we are gaining market share, one of the reasons?
No, I think it has not come only in the last year. If you see last four to five years, we are constantly growing in terms of exports, and we continue. I think we are thriving to continue to do that in next of the years.
Okay. Because even domestically, when I compare you to other listed players in the similar industry, you have grown much faster than all of them, so there is something that you are doing right. So I'm just trying to understand, other than world-class facility or good process, what is it that you're doing right, that others aren't able to replicate?
I cannot tell you why others cannot, but I can tell you it means that we are doing good marketing and good, we are good suppliers.
Okay, so is there anything else in this industry which gives a significant competitive advantage, or is it just the process and efficiency that is better at?
It's only question of process and efficiency and a good marketing team.
Oh, okay. Is there a significant pricing difference as well, or is that similar across most players?
I cannot comment on anybody's pricing, sir, please. I think I would rather stick to what I am doing and what we can do.
Oh, okay, okay. Understood, understood. Thank you so much. That's it from my side.
Thank you, sir. The next question is from the line of Bala Subramaniam from Edelweiss Capital. Please go ahead, sir.
Good evening, sir. Thank you so much for taking my question. Sir, how much volume growth in this quarter witnessed overall? And on the Titagarh side, earlier the project cost is around INR 1,250 crore-INR 1,300 crore, that range. Is there any escalations that project cost? This is my first question.
Right now, what we are looking at the project cost of the Titagarh side, the project is around INR 1,800 crore, right now, so the project cost is INR 1,800 crore.
Okay, sir. Sir, the volume side, sir?
Volume side on in terms of?
The overall volume growth in this quarter. Because last time we have guided 15%-20% kind of volume growth for FY 2025, so are we in the track?
Yes, yes, we are very much on the track for achieving the 15%-20% volume growth for the FY 2025.
Thank you, sir. Sir, on the export side, we are targeting 50/50 kind of mix on domestic and exports. I just want to understand which are the regions we are targeting, whether Europe, Asia or U.S., like what kind of opportunities we have we could share, like approximate mix, region-wide.
No, I think we are not targeting any specific region. We are marketing around the globe. Wherever OEMs are there, wherever forging is required.
Okay, sir. So on the Red Sea impact, last quarter, we have seen some impact, we also, we are also in the discussion with customers for 10%-15%, like, rationalizations. So what kind of impact we are seeing in this quarter?
I'm unable to understand your question.
Sir, last quarter we had some impact because of Red Sea on the delayed shipments, around INR 50 crore kind of impact. And we are-
No, impact was. I think impact was INR 20 crores, and I think still the impact remains similar, in the similar range, and that has become a regular precedent. I think Red Sea issue, unless the war stops, I think there is nothing which can be done, so it has become a regular course of business right now. So 15-25 crores will remain always in-transit or material. So that is the kind of capacity or inventory we have built in the system.
Got it, sir. Sir, like, we are also in the discussion with customers to rationalize 10%-15%. It is done, or we are still in the discussion?
We are still in the discussion.
Got it, sir. Thank you so much, sir. I'll come back in queue.
Thank you, sir. The next question is from the line of Vidrum Mehta from ASK Investment Managers. Please go ahead, sir.
Just want to understand on the demand front-
Your voice is not there. Can you speak little loud, please? We cannot hear you.
Is it better?
Yes, it's better.
So just wanted to understand on the demand front. So for Q1, our volume growth is 1%. For FY 25, we are guiding for a volume growth of 15%-20%. So what is helping us remain confident that, for the remaining nine months, or if you can help us understand, you know, what is the visibility in terms of volume growth, which we can see in the remaining nine months?
So, if you are saying it is 1%, I think you are comparing quarter-on-quarter. So basically, on a full year basis, we can, we are very confident, and we have the visibility of the complete order book, as well as of takes from the customer. On a steady flow basis, we are seeing that happening, and that's the reason we are confident of achieving 15%-20% volume growth.
So is it because of the new order book, you know, we remain confident of achieving this volume growth?
... Past order wins have already started showing traction in terms of supplies, and, we are very confident that, overall, whatever volumes have been projected on those new order are starting to show results. So we are very confident that we will be able to, meet expectation and do better than what we are, estimating, in terms of 15%-20% volume growth.
Okay. And also, sir, if I look at the domestic revenue, you know, break up, so domestic market revenue is down 3%. And, you know, you alluded to the fact that it is, it is, you know, partly attributable to the raw material price decrease and as well as lower offtake in your opening remarks. But in that case, so should we assume a lower realization per ton?
Yes, I think we have already, I think we have already shared. I think if you can see in our presentation, we have given our domestic realization as well as export realization, and you can see that in that domestic realization is on a downward... It has gone down.
No, so I am just asking from a full year point of view, so for FY 25.
No, I think, see, raw material prices is completely pass on for us, and basically, we cannot comment how the market will shape up in going into coming quarters. If in India, steel prices is completely not in sync with the global market. It is completely supply and demand curve. If the demand is in domestic market is higher in the coming quarters, we may see increase also. So in that case, realization may go up also. So currently, we don't see. We cannot comment on what steel pricing is going to be there in India in coming quarters.
15%-20% growth is broadly what we are asking, or we are, you know, estimating is with respect to volume, and that should flow to revenue. That is what is a fair assumption?
Yes, 15%-20% in terms of volume. Basically, whatever raw material price is there, plus the conversion, is going to flow into the revenue.
Okay. And sir, can you help us, subsidiary revenue for, you know, Multitech and ACIL for this quarter?
Coming to the Multitech, it's about INR 86 crore. For the ACIL, it's about INR 17 crore revenue for the quarter.
86 and 17?
Yes.
17. 17.
17, 17.
Yeah. So, sir, if I look at the full year FY 2024 Multitech revenue, I guess it reported INR 360-odd crores, correct? INR 353.
INR 350, INR 350 odd crore. INR 353 odd crore, yes.
Are we seeing any signs of improvement? Because the run rate of INR 85-90 crores is broadly maintained in Q1 as well.
I think it's just the first quarter, and, as you know, first quarter, because of heat and everything, so extreme summer, the casting production goes down. I think you will be able to see significant changes in coming quarters.
Sir, why I'm asking is basically because, you know, in the analyst meet, you know, we had shared, our vision for 2025, 2026, wherein the, revenue from Multitech, you know, was significantly higher. So are we in that trajectory in terms of achieving?
We still maintain, we still maintain the same.
Okay. Okay. And sir, if you could just repeat once again the order inflow which you shared in your opening remarks, it would be really helpful.
I think Milesh has joined, I think probably Milesh can speak more on the order intake.
Yes, so good evening. I wanted to convey that in this quarter, there has been a good order inflow with regard to the company's forward plans. We have been able to have good order wins across the globe, not only in India, and also overseas, and both in auto and non-auto segments. To be specific, the order inflow are to be executed over a period of four years, except railways, where it is as per contract value.
Against the current order flow that we have received in this quarter, it is worth INR 1,679 crores, in which North America constitutes to around INR 526 crores order inflow, wherein it comes from the CV segment it is around INR 201 crores, from the light vehicle segment it is INR 109 crores, and also from the EV in the auto side, it is worth INR 16 crores. And we have had order books inflows from non-auto segment for INR 200 crores, and mainly comes from the mining, earthmoving and other segments. Moving forward with Europe, we had an order inflow of around INR 287 crores, mainly coming from the CV side and from EV. In this, we had an order flow over INR 3 crores.
From the rest of the world, we find around INR 140 crore order flow from the CV market. To mention about India, in India, we had an order flow of around INR 442 crores, in which CV is worth INR 362 crores and non-auto is around INR 80 crores. That is mainly from the farm equipment and other segments. Lastly, with regard to railways, we are finding a good order flow too, and in this we have an order flow around INR 284 crores. That is with regard to the undercarriage and other items that we supply to the rail. Thank you from my end.
Thank you. Thank you, sir.
Thank you, sir. The next question is from the line of Mitul Shah, from DAM Capital. Please go ahead, sir.
Sir, thank you for follow-up opportunity. Sir, my question is again on the average realization, wherein we are indicating a decline, but in export side, it has gone up. That is first question. And second, sir-
... In terms of Q on Q, what is the directionally for Q4? Can we expect some further decline in average realization, or what could be the quantum?
No, in terms of exports, I think, in terms of product mix change and addition of new customers, wherein order announcements had been made in previous years, have started showing traction, and that is the reason realization in exports have improved. In terms of domestic, seeing the current trend, what is available right now, we don't expect any reduction in terms of realization, but we never know what is going to happen with the steel market. And as of now, when we speak, I don't think any downside risk is there to realization for the quarter.
That means in export also we have similar passthrough for all the clients, or that's a mix of few clients wherein we can-
Raw material, raw material, in exports are not India-centric. It is basically in terms of exports, indexes. In terms of North America, we follow North American index, and for Europe, we follow European index. So based on those indexes, we don't see a major dip in terms of any realization happening in coming, current quarter.
Okay. Sir, considering the further investment required in the subsidiaries, what is the balance sheet situation at the end of first quarter in terms of, net and gross debt, and how much investment we expect for next three quarters, balance three quarters during financial year in subsidiaries?
Considering between the gross debt and net debt for the quarter, if you look at it, it's a little bit elevated by almost INR 100 crore on the consolidated basis due to the investment made in the subsidiaries. We have already shared on the other also, the debt level will remain at the level what we are in the FY 2024 in the full year by the end of full year. It will be more, more or less on the same level what we ended in FY 2024.
What will be full year investment and CapEx for 2025?
So we have already guided, if you remember, our last quarter, we have about INR 500 crore will be invested in RKFL standalone, in terms of CapEx. Apart from that, about INR 135 crore odd in the subsidiary, and there will be about INR 100 odd crore in investment in the joint venture of the railway project by way of investment. That we have already guided, and we are continuing to stand by those numbers.
No change in that?
No change in that, yeah.
Yeah. Thanks, sir.
Thank you, sir. The next question is from the line of Chirag Shah, from White Pine Investment Management Private Limited. Please go ahead, sir.
Yeah, sir. Thanks for the opportunity. So sir, two questions. So one basic housekeeping question. So in consolidated, we have a line item called cost of services. If you can just indicate what exactly it is, and, does it move in line with your raw material cost, or there is some lead lag over there? And it pertains to what part of the business?
You very well know we have a hospitality business.
Yeah.
That has the cost of services.
Okay, okay. So it I thought it is related to some services that you give in the export market. Great. The second question is, so just an update on how should we think about the ramp-up of the various subsidiaries. We are in the ramp-up phase, and you have given a guidance earlier, I'm aware of that. But incrementally, how should one look at the ramp-up, at least from next two to four quarters perspective? Because there are three-
Chirag, in terms of our investor presentation, we stick to the guidance which we have made in that.
Okay.
We have nothing to add or say further to the investor presentation already made.
And so one last question, sir. On the railway side, or maybe even off highway, if you want to expand, is there any new product or anything that you are working on or which is in advanced stage of approval or validation kind of a thing? If you would like to share, how are you looking to further expand the product bouquet?
No, I think, I think we have nothing to share in this.
Okay.
As a company, we have a policy to continue to work on products and new customers.
Yeah.
I think as and when we have to add anything, we would usually come back to.
Okay, sir. So margin, on the margin side, the subsidiary level margins, it is purely linked to the ramp-up, right? The ramp, operating leverage, the efficiency will be reflected as and when revenue scales up. That is the right way to look at?
It is already showing traction, I think.
Yeah, it is, it is. It is, I have... It is.
Quarter itself, we have 23+% margin.
Basically, more operational efficiencies and cost reductions, whatever are going on, I think it's already showing traction in the balance sheet, and it will continue to be showing going forward also.
Okay. Okay, thank you, sir, and all the best.
Thank you, sir. The next question is from the line of Ankur Poddar from Svan Investments. Please go ahead, sir.
Thank you for taking my question, sir. Sir, I have one question regarding the employee cost in the, for the standalone business. So we have seen almost 6% YOY increase in the employee cost, and on a Q on Q basis also there is a 6-7% increase. So any, yeah, similar to what you have mentioned that in other expenses, there is some extraordinary. So any other, is there any some one-off sitting here? And what is the trajectory we should assume going forward?
... So coming to the employee benefit expenses, if you are looking on quarter-on-quarter increase, about INR 3 crore increase. So, so that's mainly on account of, the pay for performance we pay to our employees. Due to that, this increase is there. And we've already said there is a one-off expenses in the other expenses, that's why the elevation in other expenses.
Okay, but there is, Y-o-Y, it is around 18% increase from INR 44 odd crores in the last year to almost INR 52 crores. So that is one. And also in other expenses, INR 126 crores last year to INR 200 crores. So you said INR 70 crore was other expenses, exceptional item. Apart from that, there is also, you know, other expenses usually elevated a bit. So can you throw some light on what exactly we can assume going forward here?
To be specific there, if you look at that, there is a growth in volume and see, our store space and processing charges also are part of this, other expenses, and there has been increase in both. That is a significant increase during the year on the stores and processing charges. And then you can see this increase in shipping costs. When you are looking at Q1 FY 2024 versus Q1 FY 2025, there is an INR 17 crore increase in terms of shipping costs, 17.5, that one-time cost I am, and other on the stores and processing. Those combined is an increase of INR 75 crore, if you look at Q1 versus Q1, year on year.
Okay, sir, how are you seeing, you know, what is, in the balance sheet, what is currently the working capital cycle, and how are you seeing this freight rate moving ahead in the second half of the year? Freight rate in terms of shipping rate, I'm trying to say.
So shipping costs are right now, hardening already, meaning they hardened already, and it's not softening so far. I think it has a lot to do with the Red Sea crisis and the ship movement. So it depends upon that. So, we don't know, where we will end up at the end of year on the shipping cost side. But, what was the another part of your question?
Working capital cycle.
For 90 days. Net working capital is around 90 days, and that will continue to remain at 90 days.
Okay. Okay. Sir, what would be roughly the cash balance in the balance sheet?
So we do not carry any cash balance, maybe INR 20-25 crore kind of thing when the collection. Otherwise, right now, we don't have a cash balance. We have a lot of unutilized balance in terms of bank lines, so we keep our bank lines unutilized, rather than keeping cash on the balance.
Okay. Okay. Thank you so much, sir, and all the best.
Thank you. The next question is from Atul from ULJK Financial Services. Please go ahead, sir.
Yeah, thank you for the opportunity. My question might be repeated. I would like to understand, we have reported a 3% decline on Y-o-Y basis in domestic revenues. What were the reasons behind this decline? That would be helpful.
I think we have already explained in the call. The reason is raw material price decrease, as well as, there has been a lower off-take from the customer. Both have been, basically added to the 3% decline in, domestic output.
Okay. Yes, and my second question is on our organic, inorganic strategy, which you are following, sir. So, so far, this strategy has been working quite well for us. So in coming time, are we looking for any more acquisition? If you could put a light on that, sir.
As a company, as a policy, we are always looking for opportunities wherein we can incrementally grow. So as of now, we don't have anything in pipeline. As and when we have anything, we will surely come back to you.
Yeah, that is helpful. Yeah, that's all from my side, sir. Thank you. Thank you so much.
Hello?
Hello.
Ladies and gentlemen, you may press Star and One to ask a question. The next question is from the line of Bala Subramaniam. Please go ahead, sir.
Thank you so much, sir, for the follow-up questions. Sir, in the Multi-Tech Auto, we have seen some quarter-over-quarter, quarter-over-quarter decline, and we have guided around 40% growth in this year with a total basis point margin improvement. What are the current, current margin standards, sir? And what, what kind of levers are, are there for margin improvement? Hello?
Lalit?
Yeah. So coming to, I think your question is related to Multitech Auto?
Yes, you're right.
So Multitech Auto, see, if what we have guided in terms of growth, revenue growth, the guidance remains the same, the 50%-20% growth in terms of Multitech Auto also. And right now we are currently operating at around 16%+ EBITDA margin, and there will be a further improvement of 100-200 basis points in EBITDA and Multitech Auto going forward.
Got it, sir. Thank you, sir. That's it. Thank you.
Hello?
A reminder to all participants, you may press Star and One to ask a question. As there are no further questions from the participants, I now hand the conference to management for closing comments.
Thank you. I take this opportunity to thank everyone for joining the call. I hope we have been able to answer and address all your queries. For any further information, get in touch with us or our investor relations advisor. Thank you very much for sparing your time and joining us call. Thank you.