Hello, everyone. On behalf of IIFL Capital, I welcome you all to the 3Q 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. Over to you, sir.
Thank you, Joseph. Good evening, everyone, and thank you for joining us on this call to discuss the Q3 nine-month FY 2026 earnings. I trust all of you have had a chance to review the earnings document that we have shared earlier today. Q3 FY 2026 was a mixed quarter, marked by a combination of emerging opportunities and continued volatility in the global operating environment. Geopolitical tension, more frequent headlines around tariff actions and evolving trade alignments continued to affect sentiments. This was further compounded by currency volatility and elevated input costs. Notwithstanding these challenges, the quarter also presented meaningful opportunities. Customers across Europe and Asia are increasingly recognizing the strategic importance of diversifying supply chains, creating incremental engagement and new business prospects for us across multiple regions. In contrast, the domestic operating environment has been much more conducive for growth.
A strong macroeconomic fundamentals, including a steady industrial activity, resilient IIP growth, moderating inflation and a stable interest rate environment, have contributed to a healthier and more predictable business climate. The GST rate rationalization, implemented in September, played a meaningful role in reviving customer sentiment in the automotive segment. Following a period of subdued demand, lower and lower tax rates and reduced on-road prices across vehicle category have resulted in a sharp rebound in demand. Over the past few years, we have been deliberately pursued a strategic agenda to deepen and diversify our domestic footprint through targeted investments, product innovations and capability enhancement. As part of this effort, we also identified adjacent growth segment, most notably railways and passenger vehicles. The railway segment in particular, is demonstrating strong momentum for us. We are currently focused on scaling output and expanding our penetration within this segment.
Our products are now being integrated into bogie assemblies. At the same time, we are seeing encouraging traction in the passenger vehicle segment and expect to participate more meaningfully in this upcycle through increasing penetration and expanding the range of products that we offer. Now, let me share some financial highlights for the quarter. For Q3 FY 2026, we reported consolidated net revenue of INR 1,098 crore, INR 1,098 crore, higher by 2% on year-over-year basis, compared to INR 1,074 crore in Q3 FY 2025. On Q-on-Q basis, revenues were higher by 21% compared to INR 908 crore in Q2 FY 2026. A strong performance in domestic markets, supported by a resilient performance in international market, has helped us to deliver 21% Q-on-Q top-line growth.
EBITDA, excluding other income, is INR 163 crore in Q3, higher by 29% year-on-year compared to EBITDA of INR 126 crore in Q3 FY 2025. On QoQ basis, EBITDA was higher by 33% compared to INR 123 crore in Q2 FY 2026. The EBITDA margin is 14.9% for the quarter and is higher by 140 basis points quarter-on-quarter. Profit after tax is INR 13.6 crore after exceptional provisioning of gratuity and leave on account of new labor code of INR 10.43 crore, otherwise it could have been INR 24 crore compared to INR 21 crore in Q3 FY 2025. Our confidence in quarters ahead is due to multiple growth levers, operations have already ramped up, and we now focus on driving higher utilization. Our aluminum forging has been successfully commissioned and commercial production has been commenced.
Our casting facility is ready and is under trial run and shall commission commercial production in Q4 FY 2026, and we remain confident of ramping up utilization levels in coming quarters. The machining facility in Mexico is nearing commissioning and is expected to become operational shortly and further strengthening our global manufacturing footprint. Additionally, our rail wheel joint venture remains on track and with the commencement of trial production, anticipated in the end of Q4 FY 2026. With that, I would like to hand over the proceedings to Mr. Milesh Gandhi, Whole Time Director. Thank you, and over to you, Milesh.
Thank you, Lalit Ji. I would like to brief that during the quarter three, the company secured new orders worth INR 680 crores, with the program life of four years. Approximately 66% of these orders were from the automotive sector, and the balance 34% were from the non-automotive segments, reflecting continued progress in our company's diversification strategy. In Q3 FY 2026, auto orders amounting to INR 406 crores is from the CV segment. Around INR 26 crores is from the passenger vehicle segment, that is the PV segment, and INR 18 crores is from the EV segment. In Q3 FY 2026, non-auto orders amounting to INR 189 crores, out of which, out of the INR 230 crores, is from the oil and gas segment. Would also like to mention a few more details.
Against our railway business, the bogie assemblies, which is a good value addition as assembly supplies, along with our core items, frames and bolsters. Bulk supplies have started going to Indian Railways. With our solid launch and ramp up, we have qualified for bulk orders, and Indian Railways has started showing a demand worth INR 2,000 crore itself for the forthcoming demand. Would also like to add upon, with the current European Union free trade agreement, this will further help us, and Europe will be more keen in buying forged and cast parts from India. The current duties that are levied will be over, and we will become more attractive to the customers over our other competitors. That's from my side. Thank you.
Thank you, Milesh. And now I hand over the proceedings to the for Q&A, and let hand over to moderator for the Q&A session.
Okay. 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 handsets 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 Mr. Balas ubramanian from Arihant Capital. Please go ahead.
Good afternoon, sir. Thank you so much for the opportunity. Sir, we have received new orders of INR 680 crore, and what is the mix between domestic and export? And how does the order pipeline look for Q4 and beyond?
Out of the INR 680 crore order that we have received, mainly this order is coming mainly from the domestic market on the maximum side. Around 60% of it is coming from the domestic side, 40% coming from the export side. Way forward, our order books are still strong, and with all our capacity that we are adding up to, this is helping us to fetch more orders and make sure our capacity is utilized in a better way.
Okay, sir. I think domestic revenue also increased to nearly 67%-68% in nine months, FY 2026, compared to 59% in FY 2025. And if you look at it also, North America exports has been declined to 55% compared to 71% in last nine months, FY 2025. How do you look at domestic as well as North America export side over the medium term? Like, we are strategically shifting to a domestic base of these tariffs. And secondly, railway business nearly 7.3% of business in nine months, FY 2026. I think we are in the like a progress of our forgings JV at bogie assemblies. It's in trial productions.
What is the targeted revenue contributions from railway side in the next 3-5 years?
First of all, the wheel production, I think it's not part of the strategy right now. Wheel production sales is going to come in the JV, and it is going to. We are right now not building any sales from the wheel, wheels right now. Bogie, assembled bogie sales, we are looking at a strong sales number, and I think railway, we are looking at double-digit sales in next two years' time. While we continue to grow in other platforms also and improve our capacity utilization, railway is going to form a strong pillar of growth for us, and our order book from railways is extremely strong. In terms of North America and India product mix, I think tariff is nothing to do with the change in product mix right now.
Overall demand scenario and the build rate in North America has slowed down in the past year, but now we are seeing traction coming back, and I think as the build rate improves, our North America customers and sales are intact, and it is going to continue to grow with as the build rate improves.
Okay, sir. So I think forging capacity utilizations came down to 66% in Q3 of FY 2026, compared to last Q3 of 79%. It is because of the demand softness or ramp up in new capacities. How do you look at, I think, our new capacities of aluminum forging, casting, and Mexico machinings are under commissionings. So how do you look at the utilization levels over the next two years, sir?
No, I think right in the opening statement, as Milesh has said, as we every quarter, I think we are going to strongly push on terms of utilization. And with the order wins we have, all the, all the new capacities which are coming up has been backed by equal number of orders. Basically, the time taken for approval and stabilization of the capacity, that itself is taking time to get to the real numbers for the capacity utilization. So 66% of the utilization, which you see right now, is basically on the incremental capacity total capacity, which has already been commissioned. Like for aluminum forging, we have just, it is about few, only couple of months, we have been able to go for production.
As we ramp up this capacity to full utilization, I think within next 8-10 months, you'll see full utilization. Similarly, in cold forging, where we have almost 25,000 tons of capacity, we have right now at a utilization level of 40% because customer approvals and other things are still at one stage or other coming in. So as we every month, it's on an improvement, and we are looking at almost when we close the next financial year, we will be almost at 80%-85% utilization. So specific to capacities, utilizations are low, and as such, in overall scenario, you are seeing 66% utilization in the overall increased capacity utilization. But if you compare to the capacity which was earlier there, utilization have remained same or increased from there on.
Okay, sir. So my last question, I think there are planned around INR 500 crore-INR 600 crore kind of debt reduction so by end of this year. How much, how much we have achieved as of now, sir?
So debt, as on date, is about INR 2,400 crore. If you look at about INR 2,600 crore, so we have achieved already INR 350 crore of debt reduction in this quarter. And we hope to achieve this debt number to below INR 2,000 crore, maybe INR 1,900 crore by the end of financial year 2026.
Got it, sir. Thank you.
Thank you. The next question is from the line of Tanmay Roy, an individual investor. Please go ahead.
Hello, am I audible?
Yes, you're audible.
Yeah. So, yeah, first of all, congratulations that you are improving on quarter-on-quarter basis. Just want to know one thing like that, as we know that our domestic sales is now going up and, export sales is more or less little bit going down only. So but realization-wise, do you think that domestic sales realization can cover up the export sales drop?
No, I don't think domestic sales can cover up in terms of the entire realization in terms of export sales. But I think in the overall traffic, when you see in terms of the order wins which we have had, we don't foresee that in coming quarters, our exports will be considerably down. I think you will be able to see in coming days our exports also considerably improving. So we are looking at upward terms of, in terms of realization in overall, between domestic and exports together. So with, in isolation, domestic also will improve in terms of, our realization, but we don't foresee any drastic drop in terms of our exports.
Oh, okay. Okay, good. Good. Thank you. Thank you. So another thing is like, the, you said you are not considering that, railway wheel sales in, in your any projections. So when do you think it can, you know, considerably, come in as in revenue from which financial year onwards you are considering?
Look, coming in, in terms of railway wheel, revenue is going to come from FY 2027 onwards itself. But, it is—because it is in the joint venture, we have not considered it as, as a revenue in terms of our, RKFL, consolidated balance sheet, we are not taking it as a revenue right now. We will see after the project is commissioned and commercial production starts, we'll take a legal view in terms of, how the consolidation is going to happen in terms of revenue of the JV.
Okay. Oh, so, yeah, I mean, maybe from Q1, I mean, we are anticipating Q1 or Q2?
No, I think commercial production is going to start from Q2 onwards.
Okay. And how the utilization you are anticipating? Currently, it's for 74% on total capacity of what you have, right? So how do you see this ramping up over the next few quarters, like, when do you see-
I think we have a very strong order book in terms of RKFL, between casting and forgings, and we feel that going forward, we will be able to, as every quarter, improve in terms of our utilization. I cannot put a number to it, but with the order book we have, we are looking at a very strong consolidation and strong performance in terms of our utilization in coming months.
So I think the same on the depreciation also, we can consider the current run rate, or it will be increasing from now on?
Can you repeat your question, please?
So the more you say you are going to ramping up on your capacity, so depreciation also will be in the same range of, I don't know. You are going to do the same range of depreciation also in the coming quarters, or it will be, like, more or less?
Lalit, can you answer the question, please?
Yes. Depreciation is almost going to be in the same range because one or two machines which are under capitalization, so that will give it a marginally increase. But in Q4, we don't see an increase in depreciation. Maybe from Q1, little bit, but that is not significant.
That's what I was trying to understand. So more of the, you know, machining is already done, you are saying, so not too heavy depreciation from next few quarters onwards. That's what I was trying to understand.
Yeah.
Okay. Thank you so much, sir. Thank you for answering all my questions, and all the best for next few quarters. Thank you.
Thank you. The next question is from the line of Sunny Gosal from Emkay Financial. Please go ahead.
Yeah, thank you for taking my question. My first question is regards to the North America business. So FY 2025, we were north of about INR 1,000 crores of revenue, and for the first nine months, we've clocked about INR 480 crores, which basically on a nine-month comparative basis is down almost 40%, more than 40%. So basically, if you can give us some understanding of how the business environment in North America is shaping up, how is the Class 8 build rates currently as compared to, like last year? And what is the overall outlook in terms of the North America business with all the new orders that we have won?
I think, Sunny, for the build rate right now, we have seen December, the order wins, new order which has come in North America, Class 8. We are still, I think, we need to see how January performs. But from whatever optics we are seeing from customer, we are seeing improvement, but we are not very optimistic, but we are very cautious right now. But what we can confidently say, the worst is behind in terms of the North America sales. From here, you will see what we have budgeted for is almost 10% YoY increase in terms of the build rate and consumption, in terms of our exports to North America from our existing clients.
The new clients and the new order wins, which we have added, is going to compensate us most of the losses which we have made in this year in terms of the utilization or in terms of the total sales in North America. We are confident that in FY 2027, we will meet most of the losses in terms of top line, which we have had in North America, which you are seeing in last nine months. From this quarter onwards to next in FY 2027, we will see almost we have gained 100. We are back to normal in terms of the overall business we are doing in North America. It may be not from existing customers, it will be with addition of new customers, which we have already had.
Got it. Got it. And in terms of the overall, revenue mix, so say last year we were at about 60% domestic, about 40% export. In this quarter, we've, our mix is about 70% domestic, 30% export. Now, based on, like, the new order wins and the overall robustness in the domestic, business environment, how do we see this mix, changing, say, over FY 2027? Because this will also be kind of a key determinant to the profitability, considering exports has relatively better profitability as compared to domestic.
So Sunny, I think, with the addition of new capacities from castings and forgings both, we are not looking at going back to 40%, I think, immediately. But, to be very, very pessimistic and to be very cautious on it, we are looking at coming year in FY 2027 to be almost 35% to come from exports and 65% to come from domestic.
Got it. Got it. And this is in spite of the robust domestic environment. So new orders would, like, significantly compensate for the loss in underlying or the slowdown in the underlying business in North America?
No, I think underlying business slowdown, which is there in North America, like I said, is going to get compensated with the new customer addition from North America, which we have already had, and for which samples, PPAPs and other things are in process, and I think we are going to have full sales from first quarter of next year. Also, there is a lot of new addition of new customers from Europe, which is going to compensate us in terms of our exports from equally from North America. So I think in totality, in terms of exports, we are very confident that we should be at a strike rate with our increased capacity and increased utilization to be at almost anything, at least to be at around 35% mark in terms of our overall utilization.
Got it. This is very helpful. My second question is on the railways business. The new orders in terms of the bogie assemblies and which we've won, like, how is the overall margin profile of this order? Is it like from an overall perspective, accretive to the average company margins, or like, will it be lower than the company average margin? So how should we look at-
No, it is a value add, a complete, fully locked-in assembly in which railway only builds the body. So we are getting into that, and it's a pretty big market, like Milesh told in the opening statement also. With this full approval, what we have received by now, and next year it opens a INR 2,000 crore sales revenue for us. It's an annual requirement of almost more than INR 2,000 crore for Indian Railways for passenger segment. So we qualify for to get 60% order.
This is a highly accretive, margin business for us, and I think we are eyeing a big chunk of business going into FY 2027 from this, which is going to, in my earlier question also, I said, for a double-digit growth from only Indian Railways.
Got it. Got it. Got it. My last question, and maybe then I'll come back into the queue, is on the, like, we have significant dependence on the CV side, like in terms of our historical performance. What initiatives are we kind of taking to diversify into, like, non-CV, especially PV, tractors, and where are we in that journey of good diver-
I think, Sunny, I think Milesh has already answered this question in his opening remark. We are significantly eyeing PV as our growth engine for next couple of years. And I'll be happy to share that we have now already started receiving orders from two large PV manufacturers within the domestic market, and three from the international market, and one from EV segment in the export market. So overall, we are looking at almost 10%+ revenue in next two years to come only from PV. So FY, probably by FY 2028, our 10% of the revenue share is going to only come from PV segment.
Got it. That will be significant de-risking in terms of CV dependence.
Yes, and I think we are working both ways, both in domestic and international market. I think both together taken, it will become a sizable business for us in next two years.
Got it. Got it. Thank you for the detailed answers, and I'll come back in the queue.
Thank you. The next question is from the line of Mr. Aditya from Old Bridge Mutual Fund. Please go ahead.
Yeah. Hello, am I audible?
Yes, you're audible.
Yeah, thank you for the opportunity. So, sir, I just wanted one clarification on. So in the PPT, you have given a slide where we are showing order splits, new order split over the next 4 years. So, are these, are these revenue line items over and above the top line we have achieved in FY 2025 or FY 2026? Or is it like, or does that also include renewal of some of the orders that will get, that their life will get completed in 1 or 2 years?
No, basically, Aditya, we had tried to give you a consolidated picture on past order wins, and how this, in coming years, in next couple of years, how these order wins are going to get reflected in terms of revenue. In our overall, when we say our capacity utilization and that kind of capacity, CapEx we have done to set up this capacity. So this order win basically gives a visibility or the revenue which we are trying to show in terms of getting into our books in next couple of years, basically in terms of how the utilization from the normal and new order wins is going to come through.
Yes, I mean, so I wanted to get a sense, like, this is the new orders getting converted to top line. This is basically a new top line getting in. So in, like, in TTM, we have done close to INR 3,500 crores of revenue in the standalone business. So this, let's say in FY 2028, if we are looking INR 2,700 crores of extra top line, this is on top of that INR 3,500 crores top line that we are doing today, right? Should I read it in that way, or should I read it that it will be below something?
No, no, no. It is only basically for new order wins. The current business, current top line which we have already achieved, this is not inclined with that.
Okay. Okay. And one more, one more clarification on this. These are in these new orders, does that also include casting orders, the castings orders for this, for which the new capacity is coming up and aluminum forging into top line?
Yes, everything.
Everything.
Everything is included. At the console level, it is included.
Okay, okay. Thank you. And one more question is on the gross margin front. So this quarter, our gross margins have contracted to 45% at a standalone level, and our EBITDA is almost flat on a QoQ basis. So on an EBITDA front, we have done a decent job. So what has led to the gross margin contraction? And on the cost front, power and fuel costs and manufacturing expenses are also lower despite production ramping up. So what are the reasons for this?
So Aditya, so on the gross margin side, it's basically, result of product mix, and little bit we were having a more rejection in this quarter, so that has led to the, this, reduction in material margin, and hopefully it will be back to my normal level in next quarter. So that will improve my margins also, and overall EBITDA also. Coming to the power and fuel, sir, but our power flow also is combination of few things. We have got some reduction in electricity duty, which has been taken care of in this quarter. Apart from that, there has been some efficiency we have built in, in the utilization of power, and there is a contribution from renewable power, which rooftops we have put, all these are contributing now. And all these together-
Okay.
has helped us in the achieving this power and fuel cost.
Okay, okay. And in terms of, sir, other expenses, other expenses are also quite down, significantly down over last year.
So other expenses are not significantly down, if you look at other expenses. So it's marginally down, and that's basically a function of what operating loss on the foreign exchange, which is now lower in this quarter, and little bit efficiency in terms of other costs.
Okay. And sir, if I just may ask, like, if those rejections were not there this quarter, then what kind of gross margin print we were looking at?
Certainly, it could have been better, I will say, at least 1%.
1%, okay.
100% percent.
Okay. Okay, okay, okay. Thank you. Thank you for that. Thank you for that.
Thank you. The next question is from the line of Mr. Akash from Ambit Alpha. Please go ahead.
Yeah. So just one question from my side. I think, in the last three, four quarters, we've seen quite a big hit in terms of our margins. I just want to understand in terms of EBITDA margins, should we consider as this normal or? By when do we expect to, you know, touch back so 19%-20% kind of margins like we used to do?
I think, to be very frank, I think this is not a new normal. I think you will be to see consistent improvement in margin Q-on-Q. And, like from the previous quarter, when I had said that the worst is over, I think this quarter we have made considerable progress in terms of our margins and top line. I think going forward, you will be able to see, on a QoQ basis, consistent improvement in terms of margins. And I think, I'll not commit to 19%-20%, but our own internal estimates and working is to get to there as fast as possible.
Understood. Any time frame?
No, I can't put a time frame to that.
Ballpark?
I'll not ballpark. For me, every quarter, I would like to get to that, but it is a process and we are getting there. And I think, in coming quarters, you will see significant improvement in margin, and I think very soon we will be back to our new normal margins.
Understood. Thank you.
Thank you. The next question is from the line of Mr. Devang Shah from Allwest Investment Managers Private Limited. Please go ahead.
Hi, good evening, sir. The way you have explained, we have a significant order book, and even North America also, you know, the worst is over. And also, you know, there is some kind of, you know, railways are also going to add, you know, as far as for future growth is concerned. So by considering all this fact, and even you are saying there is an improvement, as far as capacity utilization is concerned. As far as top line is concerned, what kind of, you know, growth trajectory we can expect moving forward in FY 2027 and FY 2028 as a percentage?
As a percentage to FY 2026, which we are going to end, we can assume 10%-15% growth in terms of our top line.
For the FY 2027 and 2028?
FY 2027, 10%-15%, and I think in terms of CAGR, you can look at 10%-15% growth year-on-year for three, next consecutive three years.
Okay. And my second question, as far as you know, tariff related to Mexico is concerned, still there is an overhang, you know, is there, or, you know, as far as, you know, our operations are concerned?
No, in terms of RKFL, we have no overhang in terms of tariff for Mexico. I think we are supplying on DAP basis, so we don't have any effect of tariff, neither we are affected by those tariffs. In terms of our operations in Mexico, I think if this tariff prevails, it is going to be extremely good, and we are more optimistic if this tariff prevails, my Mexico operations is going to ramp up sooner than what we expect.
Okay. Okay. Thank you, sir.
Thank you. Participants who wish to ask a question may press star and one. The next question is from the line of Mr. Saket Saurabh from Safari Capital. Please go ahead.
Am I audible?
Yes, you're audible.
Yeah. So thanks for the opportunity. So, Naresh sir, last time, during the con call, during November, you were quite bullish on the turnaround in the export business, you know, because the confusion regarding all this tariff, you know, what tariff to be deployed, had created some bit of, I think disruption, especially in October. But if I look at the exports numbers, sir, on QoQ basis, it remained largely flat, and even the North America numbers didn't quite, it's adding 20-odd% up or in fact, slightly lower than that. So it doesn't really look like more of a turnaround. So is it like the, say, improvement that we were witnessing, say, in November mid, when the last con call took place, did it not sustain? December, you know, it again went down, it got disrupted, and then again, the Mexico thing impacted because I talked to some person.
I think, just to interrupt you, I have never said, and I never give a quarterly update or quarterly statement or market does not work on quarterly basis. I think on a sentimental way or in any optimism, it's on a yearly basis what we look at the market as. For in mid-November, I cannot predict for 45 days what is going to happen, in terms of exports or neither I can give any view on the same.
Okay. No, I was just talking about that, you know, maybe late December was, say, considerably down vis-a-vis November. That is what I'm trying to understand. You know, that did the sentiment really turn around? Yeah.
I, like I had said to my earlier questions, we are optimistic in terms of our growth in North America, and we still stick to that.
Okay.
Despite tariffs and other things, we still have new order wins from North America, and we are looking at maintaining what we been doing in the past in terms of our North America sales. In spite of the build trade being down, we'll be able to maintain those sales. That itself is an optimism from our side, vis-a-vis the market consideration right now.
Fair point. No, that's encouraging. And, sir, yeah, last time you had told that, you know, by Q4, it could, you know, there is a remote possibility that we might come back to that 20% thing, but this time you don't seem that confident. You know, is that a fair assumption or that maybe, that we are. That's why we are not committing anything, vis-a-vis, returning to our 20% thing during Q4? Because last time we were aggressive on that front, that we might even, come back if things go in our favor.
No.
So, we as things been delayed? Yeah.
No, I have still answered that question in the past also. We want to get to 20% level as soon as possible. I don't want to put a date to that. As a company, we are very aggressively working internally in terms of our cost and everything, and we would be very happy to get to 20% or 19% level as soon as possible. But I cannot commit to a date, neither in Q2 call, Q2 conference call. We had optimistically said that as a company, we are trying to get there, but I have never said that we will get there by Q4.
Well, I'm just talking about the sentiment partner. I'm not,
Still sentimentally and
Yeah.
Still sentimentally and optimistically, we want to get to 20%, 19%-20% as fast as possible.
Okay. Fair point, sir. And then has there been any delay from the government side on the approvals vis-à-vis wheel? Because we are now looking at, say, I think Q1 commercial production, right? No longer the March date. It's more like trial production, if I look at the presentation right now. So has there been some delay on that front? And you were expecting-
No, there is not.
Around 40% utilization, year one.
Next year is the first year, and we are looking at making 40,000 wheels next year.
Okay.
So there has not been any delay from the government side. Trial production means we have to submit 300 wheels to the government of India, the Indian Railways, for their trial. And after successfully utilizing that, and then we start bulk production. So we are still with that mindset, we are working, and we are well on track. That is what Milesh also said on the opening remark, that we are on track and we are starting the trial production. And we next year, as per our contract, we have to supply 40,000 wheels to Railways, and we still stick to that.
Okay, fair enough. And that's encouraging, sir. Now, coming to the European market. Now, so how do you see that going forward? Because with the FTA coming in, and also, Europe is not really focusing on manufacturing within its geography because of power and all those issues. So is Europe likely to drive better returns going forward? Because North America, it has been our, you know, crown jewel so far, before the last couple of quarters. But how do you see Europe going forward, and what's the likely mix vis-à-vis exports, as far as Europe is concerned? So any thoughts or color on that?
Milesh, can you answer, please?
Yeah. So first thing is, you very rightly said that, yes, North America has been more a jewel in our crown, and I would say that it is still there, and I think, the diamond is sure to sparkle more. But you would have also noted with, many of the order wins, which we have, been announcing over the past quarters, you would have seen that we have brought in significant new business from Europe. And Europe has started concentrating a lot on India. And I would say that with the free trade agreement, even the small duties, whatever are there across various other countries, because we are supplying to practically all CVs across Europe, and they are our customers there.
Across various regions and various countries, this is for if it completely gets over, but obviously, we will be more attractive versus our neighbors.
Okay.
Apart from that, to answer you, to your last question, we will, I think we have been very vocal, and we would like to state that, yes, North America, we are winning orders, and we, North America come back, comes back. But the way Europe has been, you would see that at least Europe is also contributing to anywhere against our, overall export sales. Somewhere between 30%-35% comes from Europe. That pattern will be visible in the near future.
Okay. All right, thanks. Now, so, coming back to this mining sector, it seems to be—there seems to be some mining boom, right, with commodities also doing well. So any traction that we are seeing, say, within the mining sector, because oil and gas has done well, railways is other growth driver. But I think we had some presence even in the mining in the earlier part. I've been an investor for almost seven years now. So any mining driven growth that you are witnessing or order wins?
There are two things.
Also-
Okay, Naresh, sorry.
No, no, Milesh, [Foreign language] bolo.
So I think, Naresh, I think in the opening statement also, you would have already heard that, we are already finding a very huge surge in the domestic demand. And I think a lot of this domestic demand is also coming because of the mining segment today. The demand for the tippers and other things are already there. But at the same time, you would have also seen that we have been making a lot of announcements with our new order wins in off-highway markets. And today, we are there with a lot of mining companies and also material handling and farm equipment companies, which contribute to this. And I think that, is the reason you would see that our off-highway sales is going high.
Okay. So thanks for the responses, and best of luck for the coming quarters.
Thank you. The next question is from the line of Mr. Devang Shah from Allwest Investment Managers Private Limited. Please go ahead.
Yeah. Good evening, sir. I want to know that, what kind, the way we are seeing, there is a, you know, improvement in the domestic market volume. But, in general, you know, there is a realization that has not been, you know, improved YoY basis. So what kind of, you know, realization we are anticipating moving forward?
Nares?
Domestic and even export. Can you throw some more light on that?
So right now, the realizations are stagnant, you can see that. And as the commodity prices are also stable, so it will remain like it, only it will slightly likely to improve with the improvement in product mix and addition of more assemblies or more value-added product. So our realization is likely to improve going forward.
You know, any kind of numbers?
No, I don't think we can put a number there, but you will see that improvement.
Okay, thank you.
Thank you. The next question is from the line of Mr. Lakshmin arayanan from Tunga Investments. Please go ahead.
Yeah, thank you. I just want to understand a bit more about the domestic market. In terms of what kind of products you actually make, can you just give a mix of products like, you know, front axle, beam, or knuckles or crankshaft? What is the mix? And has it changed nine months of this year to the previous nine months of last year?
I think product-wise, it is very difficult for us to tell you anything, right now. And we would not like to discuss product-wise, but overall, I think, every, every product is important for us, and I think every product is driving the growth for us.
Any change in the mix?
No, I think product line-wise, mix change, I think, is extremely difficult for us to say. I think we are only adding new products and adding new capacity. I don't think we are displacing any products or like Front Axle Beam or anything. Product mix in terms of in, part family, within the part family, there may be changes in terms of weight range. Sometimes we get a higher range, weight range products in the same product family, or sometimes we get lower range, weight range in terms of product family. That's the change basically happens within the product mix.
In terms of the visibility you have in the domestic market, for the calendar year 2026, which segments do you actually see stronger velocity, whether it is CV or PV or earthmoving or tractors?
I think in terms of the domestic market, we are seeing traction both in any and all entire automotive segment and off-highway segment. Both are showing great traction, but for RKFL, I think the biggest chunk of traction is going to come from Indian Railways. I think that's the next level of growth, which is going to come from Indian Railways in FY 2027. And while our continued journey in our existing business is going to continue to grow, but the significant growth is going to come from Indian Railways.
In terms of your competition, right, has there been anybody who is giving space for you to grow or you are getting, you know. Because earlier, I understand that there is some consolidation taking place. Now, that consolidation is behind us, so whether we are winning markets from somebody else, or how is the growth coming up, sir?
No, I think in terms of Indian Railways, we have been able to identify new products, and we are offering new opportunities or new, growth, assemblies to Indian Railways, which is benefiting Indian Railways in terms of cost reductions-
Got it.
And we are also gaining traction. So I don't think there is, any other-
Sir, my question
In terms of automotive segment,
Yes, sir.
We will not be able to exactly say that from whom we are getting business or anything. I think each customer, we have been able to increase our wallet share, and this wallet share is helping us to increase our domestic share of business in, within the auto segment.
Sir, so my question is more to do with do you also see consolidation taking place? Because, I think after the top five, six forging companies, I think the next are getting smaller, is what I was thinking. So I just want to understand your views on that.
I think I have no view on this.
Got it. Then one more question: so there is what, what we've been told is that, in the commercial vehicle also, the, in the LMV segment, there is a movement towards trailer segment and, and not these heavy tonnage, vehicles. And because of which, the market, tonnage-wise, in terms of forging, is also making some shift. So is that something which you also see?
No. I think, I think the market in, is divided now into two different zone. One, you rightly say, is trailer market, but, they are basically on the long haul side. I don't think that is growing significantly. I think the consolidation and the growth is coming from the tipper vehicle, which is mostly being used in the mining segment and construction segment.
Okay. Okay. Thank you so much for answering it.
Thank you. The next question is from the line of Mr. Tushar Raghatate from Omega Portfolio Advisors. Please go ahead.
Yeah. Thank you for the opportunity. So I just wanted to know, my question is on the railway segment. You mentioned in the past regarding the undercarriage opportunity. I just wanted to know, our prospect on the undercarriage, and, in order to increase the wallet share, are we seeing any, you know, any, any acquisition in the spring space or in the brake, in order to increase the wallet share or any pantograph or railway crossing? Your view on the, railway, on the same point, sir.
No, I think, in terms of acquisitions, I think we always look for acquisitions, I think, at the right opportunity. Right now, we are not talking about or doing any, we are not on the verge of any acquisitions. But yes, if any specific opportunity comes, we would obviously like to look at it. But right now we are not, there is nothing to speak about. But in terms of increasing our wallet share and, in terms of making assemblies, I think we are doing it in our own. While we source these springs and other items which are required to complete the assemblies on an individual basis from the manufacturers within India, but, in case tomorrow any opportunity arises, we are open to any acquisitions at the right price, right make.
Okay. Also, on the wheel, wheel set facility, your capacity is a bit compared to the, demand side of India. On the export front, what are your views, and how are you placing your product in the export market for a high-speed, rail? That was my, that was my question on the railway front. And secondly, sir, on, your view on the defense side, defense forging, maybe aerospace or any defense, side, any acquisition or any intent to enter into that segment?
To answer your first question, I think in the railway wheel side, we are already in discussions with lot of export customers in the export market, and I think it is, there is a huge traction, but I think we are going step by step. We would like to first, this year we will be able to make 40,000+ wheels, which we are going to sell to the domestic market only because of the obligation of the agreement which we have with Indian Railways. And beyond, post that, I think we will approach the international market when next year we are looking to make more than 100,000 wheels in the next year.
I think once we start these operations, I think we will have customer visits and approvals, process starting, and I think by the time we are ready with our capacity to go to 100,000+ wheels in the next year, we will have the customers in place. But there is a lot of traction in the overseas market for wheels, and I think we will be able to encash this very fast. Second, to answer your defense, we are working very aggressively right now in terms of we are making components within our existing capacities for aerospace. And, like, post our commercial production of aluminum forgings, we have already started trials of titanium and other alloys. And, we have installed these capacities already, furnaces which are required for titanium and other alloys for aerospace.
We have already started bidding for defense contracts in the space of these new alloys, and I think we still have not got any orders, but yes, I think we are likely, in next coming days or years or months, we should be in track to get a significant portion of business in new alloy business in terms of titanium and other things from our existing facility for aerospace. Coming to acquisitions, I think we like to, for railways, we are open to any acquisition, but right now we don't have anything which we can speak about or which is any concrete details are there available.
Fair enough. Sir, on the export front, North American Class 8 trucks order near to 20,000-25,000 per month. I just wanted to know your view. Is it the bottom of the market? And secondly, sir, the Europe FTA, which is happening, do you see that as a hedge against you know, the entire export market? Or do you see a very good opportunity in terms of increasing your share in Europe or with the existing customer, the volume share?
Milesh, can you answer this?
So I will start with your second question first with regard to the European FTA. I think I just replied a while back that I think this will always help us to become more attractive, because end of the day, there are small duties, but you would have already seen that we have already gained a lot of business from Europe in the past quarters. And I think we have started already giving them, and then a ramp-up plan has also been given in the bigger numbers. So, but obviously, if today duties are not there as compared with other competitor countries, we will always be more attractive, and India has always been a favored destination on Europe when it comes to things from forgings or castings, and I think that is going to help us for sure.
Coming back to North America, I think one thing we would like to state, restate once more is that, see, the worst seems to be already over, as, Mr. Jalan already said. Currently, even the numbers, the way the numbers are showing, seems that there will be a good demand coming forward. I think there has been a lot of projections, with regard to the American demand, even with the commercial vehicle. But obviously, there has not been a great utilization of the fleet and other things in the past. Now with the way the market is showing, I think the numbers are very encouraging, and we look forward to at least coming back with the numbers, in the coming quarters soon.
Fair enough. Sir, my last question on the EV front. In order to increase your. You mentioned in the past you are interested to increase the EV share to the total portfolio. Any, any comment on that, sir?
You would have already seen that we already made informed today that around INR 18 crores of further business we won today with, from the EV segment. And I think we are already working in a EV a bigger way. And, I, whatever we are getting, the traction is from North American, OEM, who are into the EV space. And plus, we also are doing today with the commercial vehicle industry with regard to the EV space, I think we are the prominent player. Whoever is making the EV vehicles today, we are their primary suppliers. So if they are growing with the numbers, what they are getting from the market and also from the, government with regard to the green policies, I think we are the beneficiaries indirectly. So our EV numbers are also increasing accordingly.
Thank you, sir. That was really helpful.
Thank you. The next question is from the line of Mr. Arman from Blues ky Fintech. Please go ahead.
Yeah. Hi, sir, I just want to have a clarification. Like in last call, we told that, for the full year, full year basis, we still maintain our commentary of double-digit growth for the full year, right? So, but in nine months, already it's just around 1% only. So are we still holding to that guidance or, or so what's the-
Yes, yes, we are holding to that guidance.
Okay. Okay, got it. Thanks. Thanks. That's it.
Thank you. Ladies and gentlemen, that was the last question. I would now like to hand the conference over to the management for the closing comments.
Thank you. We'd like to thank all for taking up the time and joining us on this call. We hope we have answered all your queries as per your satisfaction. We would like, for any further information, get in touch with us or with CDR India. On behalf of Ramkrishna Forgings Limited, we wish you all a great week ahead. We look forward to interacting again next quarter. Thank you again very much for talking with us. Thank you.
On behalf of IIFL Capital Services Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.