Ladies and gentlemen good day and welcome to the Ramkrishna Forgings Q2 FY 2026 earnings conference call hosted by IIFL Capital 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. Should you need assistance during the conference call, please signal an operator by pressing star then zero on a touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Joseph George from IIFL Capital Securities Limited. Thank you, and over to you, sir.
Thank you, Muskan. Hello, everyone. On behalf of IIFL Capital, I welcome you all to the Q2 FY 2026 results conference call of Ramkrishna Forgings. I also welcome the senior management of Ramkrishna Forgings. We have with us Mr. Naresh Jalan, Managing Director; Mr. Chaitanya Jalan, Whole Time Director; Mr. Lalit Khetan, Whole Time Director and CFO; Mr. Milesh Gandhi, Whole Time Director; Mr. Rajesh Mundhra, VP Finance and Company Secretary. Now, I'll hand over the call to the management to take the call forward. Over to you, sir.
Thank you, Joseph. Good evening, everyone, and thank you for joining us on this call to discuss the Q2 and H1 FY 2026 earnings. In Q2, we continued to operate in a challenging global environment. Geopolitical tensions and shifting trade alignments disrupted supply chains, while currency volatility and higher input costs added pressure on margins. Across key international markets, OEMs and customers adopted a cautious stance, moderating order volumes and rationalizing inventories. Collectively, these factors created a difficult backdrop for the global manufacturing and automotive sectors, affecting both volumes and pricing across geographies. Our international business also felt the impact of this tariff and duty on exports from India, along with reciprocal tariffs imposed by the US on other countries. That has the effect of raising the final retail price for end consumers, which in turn has had a bearing on buying decisions.
Thus, sales velocity has been subdued for our international OEMs' customers. In contrast, the domestic environment proved more supportive. Strong macro fundamentals such as steady industrial output, resilient IIP growth, moderating inflation, and softer interest rates have contributed to a healthier business climate. The government's recent GST rationalization provided an additional boost, helping revive customer sentiment in the automotive sector after a period of subdued demand. Lower tax reduced on-road prices across vehicle categories. In recent years, we pursued a strategic imperative to strengthen and diversify our domestic presence through focused investments and product innovations, particularly in the railway and passenger vehicle segment. Domestic business is picking up with good timing, given the challenges in global business, and these efforts are now yielding results. The railway segment is gaining healthy traction, with our products being integrated into the bogey assemblies.
Our newly launched vertical supplying castings to railways has made a promising start and is well-positioned to scale up meaningfully in the coming quarters. Looking ahead, our priorities include the introduction of new products, optimization of capacity utilization, and further diversification of our revenue base. Now, let me share some financial highlights for the second quarter. For Q2 FY 2026, we reported a consolidated revenue of INR 907.53 crore that is lower by 10.6% on quarter-on-quarter basis compared to INR 1,015 crore. The top line was constrained by subdued demand and tariff on exports, which impacted revenues from international customers. EBITDA excluding other income is INR 122.54 crore in Q2, lower by 17.5% quarter-on-quarter compared to INR 148.61 crore in Q1 FY 2026. EBITDA margin is still at 13.5%, lower by 110 basis points from the previous quarter. Profit after tax is negative.
We have incurred a loss on consolidated basis of INR 9.5 crore in Q2 FY 2026. In the current quarter, this IWAB loss basically is due to a few factors. One is the forex loss incurred by the company on import of equipment, that is amounting to INR 6.77 crore, and the impact of tariff is INR 10.75 crore, which we have to account for in terms of the settlement with the customers. Loss of INR 3 crore we have incurred on account of operations in Mexico operations, and a loss of INR 4.84 crore has been from the JV again on account of forex loss on import of equipment. Cumulative, the IWAB impact is about INR 25.26 crore on the overall profitability of the quarter. Otherwise, this quarter we could have posted a much better result. A few more highlights in this quarter.
In August 25, the board approved the allotment of INR 975,000,000 to the promoter entity pursuant to the promised fund infusion, and an amount of INR 51.19 crore of 25% of the issuance amount has been paid upfront, and balance will be paid before March 2026. The board has approved another proposal today to issue 3.4 million shares at a price of INR 588 per share, and the total amount being INR 199.92 crore to Mr. Chaitanya Jalan, our promoter. Further, amalgamation proceeding of MultiTech Auto, the stepdown subsidiary, and Mal Metallics with Ramkrishna Casting Solutions Limited is progressing well, and we expect the order from NCLT in the Q3 FY 2026. That is the update from my side. Now, I hand over the proceeding to Mr. Milesh Gandhi, our Whole Time Director, to update you on the market. Over to you, Milesh.
Thank you, Raranjit. I would like to brief the paternity here. During Q2, the company secured new orders worth INR 1,116 crore with a program life of four years, excluding the railway segment. Out of this INR 1,116 crore order wins, 69% came from the automotive sector worth INR 777 crore, 27% came from the railway segment, that is INR 296 crore, and 4% came from non-auto, that is around INR 43 crore. This reflects our continued progress in our company's diversification strategy. Excluding railways, all order wins were from international geographies. This is worth mentioning. We would also like to state that for Indian Railways, the company received orders for the fully finished assembled bogey frames, and with the required approvals now in place, the bulk dispatches have already commenced.
Apart from this, we have also received a very strong demand in castings for the railways, and we have backed orders worth INR 200 crore for the same. That's from my side. Thank you.
Thank you, Milesh. That is all from the management side, and now the house can be open for 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 the touch-tone telephone. If you wish to remove yourself from question queue, you may press star and two. Participants, I request you to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from the line of Siddharth Basif from SASS. Please go ahead.
Hi, good evening. Thank you for the opportunity. I will ask a few questions, and I'd like it if you could answer them one by one, so that would be great. Firstly, regarding the drop in revenue and the drop in EBITDA margins, in the last con call, the management had told us that from Q1 onwards, Q2, Q3, Q4 will be looking progressively better, where there will be an expansion in margins and a growth in revenue. What made the revenue drop and the margins reduce? Because in the last call, you had also mentioned that the impact of tariffs was only INR 60,000 on a US customer. That is nothing compared to our top line. Management now saying that the tariffs have led to a reduction in revenue, that seems a little off from the last call. Could you just explain the disparity, please?
I'll ask the other questions.
Siddharth, actually, assuming that in the first quarter of the year, the tariff was only 25%, and post-reciprocal tariff of 25%, the tariff went up to 50%. There was a lot of confusion until mid of September when the government of the U.S. has clarified that the automotive tariff is only going to be 25%. That led to a slowdown of dispatches for the customers in terms of asking because they were not prepared to pass on any tariff beyond 25%, which had been agreed by them initially. Second is that overall, this tariff-related activity has just not affected U.S. It has affected our Mexico also because overall demand in the U.S. has gone down drastically beyond the projections which we have received from customers.
On a rational approach, we did not want to continue shipping material and parking them in the warehouse and affecting our cash flows. That is the reason as a rational company we took a step to cut down on the inventory because if you see the right now projections which the customers or any U.S. is coming out, that from the first quarter of their calendar year, the situation is going to improve over there in the U.S. That is the reason we took a stand. After all this clarification came, we have seen again the pullback in terms of shipments have started happening.
Okay. So sir, thank you for that. So you're saying basically that post-Q1, so January-February-March onwards, you're going to see traction in the US market. Now, obviously, since we're already halfway through the middle of Q3 as well, what sort of traction are you seeing in Q3? Is it significantly better than Q2?
Obviously, it is significantly better than Q2.
Okay. Wonderful. So sir, are we then on towards Q3, Q4 guiding for higher revenues and higher margins, like EBITDA margins upwards of the high like 18, 19 sorts, or what are we looking?
In terms of revenue, we still maintain that with the kind of capacity we have already put in place and capacity up and running. As promised, that most of our CapEx will be completed by 30 September and capacity in place, we still believe that the projections which we had given at the year-end results, at the March-end results of double-digit growth, we still maintain that on the full-year basis, we will be able to maintain our commentary of a double-digit growth for the full year.
With the higher EBITDA margins in the 15%-16% range?
I think back to proper stability. We are back to proper stability.
Sir, next question.
To your question only, I can very confidently say with half of the quarter gone by, we can confidently say now that we are, I think, worst is behind us.
Right. Sir, one question more. We've been plagued with a lot of one-time losses in the last quarter. Last quarter, there was fluctuation in steel prices and revenue loss on equipment coming in. This quarter also, we've now seen these one-time losses in terms of equipment, etc. Sir, can we now finally put a close to all these one-time losses from next quarter, or are we still affecting some of the revenue?
I think currency is not in our control, Siddharth. If INR 88.63 tomorrow moves to INR 91 or INR 90 plus, we are basically helpless in terms of managing currency. It is a global event, and currency, if it goes down or goes up, I think we cannot control. These are all notional losses. Basically, this has to be provided in the books. These equipments, like for JV or other things, still the equipments have not been put to use, and they are not generating any revenue. As per accounting standards, we will need to provide for this. That is the bottom line how the accounting standards are maintained.
Sir, what I mean to say is, have we bought all the equipment that we needed to so that there is no further transaction of that equipment taking place because CapEx is done?
No. CapEx is done. Till the equipment is put to use, any currency which is being fluctuating. Like for standalone side, I can confidently say that we are not importing any more equipment. All CapEx have been through. The hit in terms of the JV, which has come, our wheel plant is going to start as per our presentation. Also, you must have seen that it is going to start from, we are confident to start operations from March 2026 onwards, and trial runs to start from January onwards. Post that only, we can confidently say that any more hit is not going to come into the books. Till then, obviously, till the work in progress is there, we will need to continue to take that hit.
Right. Sir, since you guided that already through middle of Q3, we are certainly profitable, like you mentioned. Any hazarding against on the EBITDA margins, if that's possible for you?
No. I can only tell you we are back to normal, and I think we are going to third and fourth quarter is going to be extremely surprising and extremely on the upside of the results.
Wonderful. Sir, now a couple of questions in terms of the pledging of shares. The promoter basically pledged INR 200 crore with Tata Capital. Friends of mine at Gio told me that there was also a conversation at Gio Finance for pledging shares to take money. What was the money used for or is being used for? Are we still seeing any?
We have not pledged any shares to Gio Finance. We have only pledged to Tata Capital. That is basically to fill up the warrants.
To fill up the warrants. So the initial INR 2,100 warrants or these ones which Chaitanya is getting right now?
Initial INR 2,100 warrants, INR 50 crore have been already paid and balanced, like Lalit has said in his opening statement before the year-end. We have pledged the shares at one time. We do not want to continue on a daily basis, but the full amount has been secured, and payment will be made before March.
Okay. Sir, just one last question from my end now. Sir, because of the inventory issue that we have, and the management has done a great job in sorting that out, but sir, are our bankers or anyone else concerned in terms of giving us working capital lines or funding our inventory, or are we not facing any financial challenges there?
We have not faced any funding challenges or any institutional issues from our bankers.
Okay. If I understand correctly, Siddharth, we are having an INR 700 crore-INR 800 crore lines available in my balance sheet as of late. Okay. Right. Wonderful. Thank you so much, sir. Thank you for the opportunity, and I really hope that Q3 and Q4 really do bring out dividends for yourself and the shareholders.
Thank you. Your hope, we are extremely confident that we will come good on this.
Wonderful, sir. That calls for celebration next time we speak on call next quarter.
Yes.
Thank you, sir.
Thank you. The next question is from the line of Sunny from MK Ventures. Please go ahead.
Yeah. Thanks for taking my question. My first question is on the debt levels. Debt levels have substantially shot up as of September 25th to, I think, more than INR 2,500 crore. Can you give some color on what has led to this sharp increase in the debt?
Sunny, I will answer this because you can see that the profit has been muted. There are no cash accruals happened in the first six months. The debt has almost gone up by INR 600 crore in the six months. Debt is mainly on account of the CapEx program. Companies incurred about INR 400 crore. You can see INR 200 crore reduction on account of creditors of the company. That has led to this level. That level is going to sharply recover in H2 with the promoter infusing money, INR 150 crore coming back from the income tax, and certainly the operating leverage improving on account of improved sales and profitability.
Sure. As per the cash flow statement, the consolidated CapEx for H1 was about INR 485 crore. For the full-year FY 2026, what is likely to be the level of CapEx outflow? Basically, what's the incremental outflow in H2? By March 2026, what is the likely debt levels that we should see from the current, say, INR 2,500-INR 2,550 crore of gross debt?
Sunny, INR 500 crore-INR 600 crore reduction we should expect by March 2026 from here.
Does this include the contribution from the warrant money from the promoter?
Yes. Between everything, INR 500-INR 600 should go down till March 2026.
Got it.
Sunny, one thing also you will need to note is that this INR 2,500 crore debt includes the bill discounting for Tata Motors. With the volume going up, we have factored in the increased sales within Tata Motors, which is basically not our liability. Still, we have to put this as a gross debt because ultimately that is too recoused to RKFL. Basically, it is on the lines of Tata Motors and is being financed by Tata Capital only. That is cumulatively going to add close to INR 100-INR 150 crore roughly to the debt.
Got it. Is that amount likely to remain constant or?
Constant. That line is constant. Basically, Lalit wants to say that INR 2,400 crore is basically leaving aside that we are close to INR 2,400 crore of debt, and likely INR 600 crore of debt will be reduced by this year-end, financial year-end. Basically, leaving aside Tata Motors, which is a line which is going to ever continue, we will be somewhere around a debt of INR 1,750- INR1,800 crore.
Got it. In terms of the CapEx amount, what is the further outflow in H2 FY 2026?
Sunny, I think we have already completed our CapEx from a little bit on the maintenance CapEx side and a little bit on the completion of the facility we are commencing. It should be less than INR 100 crore.
Less than. Going forward, like now we are at almost 400,000 tons of capacity. Utilization levels are reasonably low, so we have substantial leeway to grow. What should be the outlook in terms of CapEx for FY 2027?
Next year, CapEx will be negligible, less than INR 100 crore of CapEx. Next year, utilization will move to close to around 85%, close to around. I would be glad to tell you the casting facility, which is going to be an entire 45,000 tons of capacity which we have installed, and we are going to be up in by end of this quarter, the entire capacity of 45,000 tons is almost sold out in terms of overall capacity. We are going to have an entire utilization of this capacity to the tune of 80%-85% next year in a mix of railways and domestic and exports. Railway has, like Milesh in his opening statement has said, that in castings, we have got a huge traction from Indian Railways.
This huge traction will lead to very high utilization in terms of the casting capacity and realization improving drastically from our casting facility.
Got it. Got it. That is very helpful. Sir, one last question from my side. In terms of your guidance for H2, while we understand some of these new capacities will ramp up substantially, what is the assumption that you are making on the underlying markets? Are you expecting them to basically bounce back sharply or remain at the H1 levels? That will also kind of determine what kind of revenue and growth you are able to achieve in the second half of the year.
I think domestic market has really bounced back very sharply post GST cut. With the projections, whatever we have till March right now, it is showing very good traction. I think we will be able to do much better than what market overall grows in terms of with the capacity and with the kind of share of business we have been able to gain. That is already showing in our Q2 numbers also in terms of our domestic growth. In terms of exports, US has started. Within US, the new customer wins. I think in the presentation also, we have elaborated that new customer order wins. We have been able to convince customer our marketing has done a good job. We have been able to pull ahead the timings in terms of offtakes.
We have already started shipping material from this quarter onwards for several of our new order books for North America and oil and gas within North America. All this taken together, we expect and we are very, very hopeful with half of the quarter already gone by this quarter and the coming quarter, we should be doing extremely well in terms of achieving our top-line numbers and achieving a full-year guidance growth, which we had given initially.
Got it, sir. Thank you. Thanks for the elaborate answers and all the best for the future.
Thank you. The next question is from the line of Mithil Shah from DAM Capital. Please go ahead.
Thank you for the opportunity. Sir, first question, sorry. First question is on margin side, sir. If I look at your presentation, utilization Q1, Q2 has dropped from 69%- 60%. So drop is not very big. So margin contraction seems to be slightly beyond operating leverage. Is there any pricing pressure also?
Mithil, I think Lalit in the previous question has already answered. Margins, almost INR 250 million hit has come due to just a notional forex loss which we had to book in terms of our imports and equipment. In terms of exports, there is no margin hit, but basically lower exports have affected our margin.
Then second question is on these order wins. This other orders we have indicated about four to five years lifespan, but this railway, so this 200 as well as 96 railway and 200 from the railway casting, are these executable in next one, one and a half year or it is all?
These are all annualized orders.
Lastly, on the railway project, sir, we are about to start the operation in March 2026. What is further update or any trial runs or anything is likely to start soon in next one or two months? Or March 2026 will start with the trial runs initially and commercial production will start somewhere middle of 2027?
January, we are starting trial runs. We expect and we hope that from March onwards, we start commercial production.
Sir, lastly on this, considering this current global scenario and U.S.-related challenges, what would be our long-term strategy to diversify this on the non-U.S. export side in terms of the client addition or geography addition?
Milesh, I would want you to answer this question.
I would like to state that currently, we are already, as you see in this quarter, whatever we have won on the order wins, this has all come from the outside geography and the international geographies. This showcases one thing is that we are buying a lot of traction from the international market. At the same time, we are already not only securing orders in North America, but we have also secured orders from the European market. You would also, if you go with the H1 total order wins, you would have noticed one thing that with regard to Europe itself, we have already backed a lot of orders this time and taking into Q1, I think INR 927 crore worth of orders have come from Europe itself. At the same time, from North America, like INR 307 crore came from the PV segment.
This showcases that the company is working on the diversification strategy. Currently, we have been able to back good orders. As Mr. Jalan already stated, we have also been able to work in this period wherein we have been able to develop the samples and BPAP lots and all faster so that we can go for a faster launch, as this is an alternative purchasing proposal which we have received from customers. I hope I have answered you.
Yes, sir. Understood, sir. Thanks and all the best.
Thank you. A reminder to all the participants, you may press star and one to ask question. The next question is from the line of Joseph George from IIFL Capital. Please go ahead.
All right. Thank you. So one clarification, you mentioned that about INR 250 million of one-off impacts because of FX and Mexico losses, etc., were there in the quarter. I want to understand how much of this INR 250 million is in standalone and above EBITDA.
Joseph, if you look at this INR 4.82 crore of JV certainly in the console, and INR 3 crore Mexico is also in console account. The loss on account of tariff on account of forex of INR 6.7 crore is in the standalone, and that is in EBITDA.
Understood. So effectively, you're saying approximately INR 16 crore-INR 17 crore is above EBITDA?
Above standalone EBITDA, yes.
crore, INR 17 crore. Okay. Understood. That was one. The second thing I wanted to understand was we have this INR 25,000 cold forging capacity, which was supposed to be 70% booked by one million customers. Similarly, there is an aluminum forging capacity, which is also booked by a firm order. What is the status of these two capacities and the underlying orders, and when should we expect revenue generation?
Cold forging already has started revenue generation. I think we are almost at 40% utilization right now. There are bugs which we are trying to settle down. I think we are expecting next quarter close to around 60%+ utilization and going into FY 2027, go to around 80%-85% utilization in the cold forging side, which will be, I think, the peak utilization. In terms of aluminum forging, our samples, PPAP, and everything has been accepted. From this month onwards, means current month onwards, bulk shipments have already started. I think we expect the utilization to go to 85% close to around March or April of next year.
Understood. The last question that I had was, if you look at the order flow announcements in the last, say, five or six quarters, I'm just reading out some of the numbers. I'm sure you know them. In 1Q FY 2025, there was an INR 1,680 crore new order flow. In 2Q FY 2025, it was INR 1,500 crore. In 3Q, it was about INR 700 crore. Now in the first half, it is INR 1,700-INR 1,800 crore. Overall, in the last six quarters, we've received new orders of some INR 6,000-INR 7,000 crore. I want to understand when will these orders start generating revenue in aggregate? I don't want to get into individual orders because the revenue is complicated.
I think there are parts of orders in this which are based out of Europe. They are going to start in phases from next year onwards. I think if you consolidate it or tell me of the entire order book, you will be able to see the entire order book getting into production from FY 2028 onwards. Already part of the order book has started from this quarter. That is the reason we are extremely confident to meet our exports sales of whatever we did in previous in spite of market being on the slowdown. In going forward from Europe and other places, we are looking at starting sales from first quarter of FY 2027 and almost by last quarter to reach 100% of this order book getting into sales.
Would it be safe to say, to assume that on all these orders aggregating to somewhere between INR 6,000 crore-INR 7,000 crore, say in FY 2028, we will have an annual revenue generation of, say, approximately INR 1,000 crore? Would that be a safe number?
Safe number will be close to INR 1,000 plus, very safely we can say, from these order books.
Understood, sir. Thank you. That's all I had.
Thank you. The next question is from the line of Sunny from MT Ventures.
Yeah. Hi. Thanks for taking a repeat question. Basically, what I wanted to understand is we have about, with the current expansion, about 400,000 tons of capacity between forgings and castings. What would be basically the peak utilization or peak volumes that we can achieve out of the current capacity? What is the peak revenue which can be generated from this capacity? My second question is, as the earlier, pre the inventory issue, our margins used to be 20-23%, but that had a specific business mix in terms of largely forgings. Now, with the business mix changing to castings and forgings and some B2C products which include assemblies, what is the new normalized margins we can assume when we reach reasonable level of capacity utilization?
To answer your question one by one, I think in terms of at the peak utilization in terms of revenue, if we have the right product mix, which we presume in calendar year 2027 by end, we should be having with the kind of order wins which we have had, we should be anywhere with the current capacity reach a revenue between INR 6,200 crore-INR 6,500 crore, depending on the commodity pricing. Because commodity pricing is directly linked to the overall top line. In terms of margins, it is extremely safe to say that with the premix of casting and forging and with the kind of growth in terms of B2C axles and all, we may not be able to touch 20%-23% because that was only for forgings.
In a premix of both the things, we are on the safer side, 17%-18% margin going forward. Our aspirational growth still remains to go above 20% plus. I think it will take some more quarters or years before we, because kind of value add we are also introducing in the system, we are hoping that much ahead of our calculated time, we will be able to come to those margins also. Very safely, we can say that in a premix of casting and forging, 17%-18% margin, we are going to get back to those figures very soon.
Sure. Sure. Thanks for the answer.
Thank you. A reminder to all the participants, you may press star and one to ask question. Participants may press star and one to ask question. The next question is from the line of Sargans. So, from Sargi Capital, please go ahead.
Hi. Am I audible?
Yes.
Yeah. Sir, I think I understand that Q2 had a lot of tariff-related disruptions. You had guided that based on Q1 call that by Q4, the standalone margin might start getting back to the 20-odd level. Now, in the updated scheme of things, when do you see that those standalone margins of 20% coming up? Is it now Q1 of 2027 or?
In standalone, we still see that by Q4, basically, now we have two businesses, castings and forgings. Like in my previous answer, I said at a blended basis, we are looking at 17-18% margin. On a standalone basis at RKFL, we still are optimistic that we will be able to come back to those margins by last quarter or maybe by the first quarter.
Okay, sir. Thanks. Sir, another point is, so one of our listed peers, Bharat Forge, said that this entire North America thing seems to be right now too uncertain. But we are confident that we would be back on a growth path. I think tariff was more of a disruption rather than demand disruptor. Is that a fair understanding?
No. I think tariff has nothing to do related with that. Tariff has disrupted demand also in North America. At RKFL, because of our new order wins and new customer wins over there, we will be able to mitigate the demand destruction on our existing customer with the addition of new customers, wherein we will be able to pull back all those dollars which we are losing in our current customers because of the demand issue from the new customers.
Okay. Fair enough, sir. Now, another question would be, are we, say, I think one of the focus areas of the management has been to diversify away from both auto as well as, say, North America. Now, and Europe, you already talked about you're making a steady headway. Any color on, say, getting into defense or such kind of engineering, Chetan, where I think offerings like ours have reasonable demand. Any thoughts on that, sir?
We have actually, I think, reasonably done well in terms of our railway. I think we are going to ride this passenger vehicle railway boom. We are very focused right now in improving our railway output and improving our penetration within the railways. I think that is a huge sector to bring in a lot of traction and new opportunities for us. In our opening call, our Marketing Head also has elaborated the kind of traction both in casting and in assemblies we have had from railways. We believe that that is going to be a significant opportunity for us going into next year and the year beyond that. We would like to first encash that opportunity on a standalone basis, plus the wheel project which is going to come into production next year.
We are looking at almost 40,000 wheels in FY 2027 coming from the joint venture. Obviously, taken together, we are looking at a big uplift from railways itself into FY 2027. I think our basket is full. We would like to first move one by one while we keep on encashing this opportunity and grow in railways. Defense is also a likelihood going forward, but we are not immediately working anything big on defense to make investors aware. I think at the right opportunity time, post our we are done with railways in terms of our growth, we would like to focus on defense.
Thanks for the elaborate answer, sir. For the, I think, the railway wheels setup that we are, that's coming up, and you're projecting around 40% wheels. What's the revenue uptake that we would expect from that JV? What are the margins? Would they be above RKFL standalone or the blended 17%-18%? What kind of margins are we looking at the JV level? Of course, you are not looking at RKFL share right now, but more JV. What's the top line and the bottom line for?
At 80%-85% utilization, which we expect to have in FY 2028, we are looking at almost INR 1,600 crore-INR 1,700 crore revenue from that operations. That will be a 17%-18% opportunity for us in terms of EBITDA margins.
What kind of utilization are you expecting for year 2027, sir?
FY 2027, we are targeting only 40,000 wheels, which is going to be close to 30% of the utilization.
Okay, sir. Thanks for the opportunity and best wishes for the coming quarter, sir.
Thank you. As the first last question for the day, I would now hand the conference over to the management for the closing comments. Over to you, sir.
Thank you. We would like to thank all the participants for taking out time to join our earnings call. We hope we have been able to answer and address all your queries. For any further information, kindly get in touch with us or with CDR India. On behalf of Ramkrishna Forgings Limited, we wish you all a good week ahead. We look forward to interacting again in the next quarter. Thank you very much for talking with us again. Thank you.
Thank you. On behalf of IIFL Capital Securities Limited, that concludes this conference. Thank you for joining us. You may now disconnect the line. Thank you.