Yeah, so good morning, everyone. On behalf of Equirus Securities, I welcome you all to the Q3 FY 2025 Post Earnings Conference Call of Rolex. From the management side, we have Mr. Manesh Madeka, Chairman and Managing Director, Mihir Madeka, full-time Director, and Mr. Hiren Doshi, CFO. Without further ado, I would like to now hand over the floor to Hiren sir for opening remarks, post which we'll have a Q&A session. Over to you, Hiren sir.
Thank you, Mihir. Thank you very much for arranging the Q3 Earnings Call with the investors. A warm good afternoon to all the participants, attendees, or investors. Here is Hiren Doshi, CFO from Rolex Rings. I'm there with our MD, Mr. Manesh Madeka, and whole-time director, Mr. Mihir Madeka. As you people are very much aware that the economy, or rather the phase where the overall engineering and these things are being passed, and particularly the industries or companies who are bit off having much of overseas share in terms of their revenue, particularly from Europe and the U.S., they are also having some kind of more difficulties, or rather more obstacles what they are facing every quarter. They are expecting some better, but something new, something new has came up.
Without taking much of this thing, I'll let you through the financials and the presentation from the company, and thereafter we can have a Q&A session. I would like to update that revenue from operations for the Q3 of the current fiscal company has recorded net revenue of INR 215.9 crores, or rather INR 260 crores. That is mainly component sales and incentives. Which was in Q2 of this current fiscal, it was somewhere about INR 300 crores. If we compare the same number for the corresponding fiscal for the quarter, it was INR 273 crores. In terms of EBITDA for the particular Q3 quarter, we have recorded almost 21%, which was 24.4% in quarter two of FY 2025. In the corresponding previous fiscal for the quarter, it was somewhere about 20.5%.
In terms of PBT and PAT, I would like to tell that in quarter three of FY 2025, my PBT was INR 45 crores, which was INR 65 crores in Q2 of the current fiscal, and INR 50 crores in the same quarter for the corresponding previous year. Here, I would like to tell you, and as we have already submitted a note on our results also, that this particular quarter, my PAT has gone down because of an additional extraordinary item provision of INR 18.6 crores, which is the amount what we are providing towards the liability of right of recompense to our lenders for the debt restructuring what we did in 2013. Turning to our revenues, surprisingly, our bearing rings segment is decreasing compared to the increase in auto components. In this, for the nine months, my overall auto component share was 55% in terms of revenue and 45% in terms of bearings.
Here, I would like to mention this ratio has just reversed because of the drastic reduction in overall bearing rings market, whether it is domestic, whether it is overseas. That is because of the ratio of auto components has gone up significantly, or we can say bearing ring has gone down. In terms of overseas and domestic operations, my exports were somewhere about 48% for this nine months and 52% in the domestic. Here also, we have a bit of the slight changing, or rather the numbers are swapping over there, where the domestic revenue has increased. That is mainly because of certain auto component business and reduction in exports market significantly for the bearing ring segment. That is why the ratio 52% is there in domestic and exports 48%.
Here, I would like to update our investors that the company is very much confident and positive for the coming fiscal because of the new awards, new business what we have already received. The nomination program has already been received with the company, and we have given the indicative, or rather almost a forecast, what has been given by our customers for the various geographies, that is particularly from Europe, Latin America, North America, and even from the domestic market. If I'll tell you, in terms of segment, there is one big customer having multiple plant locations in Europe and Latin America.
They are into auto and even the auto components for the EV, wherein we expect, and this expectation what we have mentioned over here, that is purely on the basis of the nomination what they have told. It is this particular one customer. It is somewhere about INR 80 crores of the components what we are planning to dispatch in next fiscal. For the another customer, be it that Latin America, for the auto component segment, tentatively INR 25 crores of the business or dispatches additional what we are going to make to this new customer. Again, from the North America, another customer, INR 25 crores odd. For the Europe, good part that we have also developed bearing ring customers also, wherein we are expecting INR 30 odd crores something revenue for these new customers in the next fiscal.
Again, in domestic also, we have gotten nomination from foreign auto components to the tune of INR 10 crores something what we are planning to dispatch in the next fiscal. Same way in domestic bearing ring segment, again, almost INR 7.5 odd crores something what we are planning to dispatch additionally in the next fiscal. I would like to tell that, as I mentioned, that all these orders are either from the new customers or the new programs given by our existing customers. So that is all put together somewhere about INR 175 odd crores business. Definitely, it will be added to the annual revenue of these fiscal in the FY 2026. Particularly, when we are initiating the project, generally the first year the project volume or the ramp up is to the extent of 25%-30%, something like that.
Here, I would like to indicate that when I'm saying 25%-30%, obviously, if these things will go up, and then in FY 2027, again, the company would be having maybe 50%-60% of the ramp up to these new programs. In terms of bifurcation or revenue mix in the application, again, my passenger vehicle segment has been increased, that is 46%. Industrial, 17.3%. Here, again, the bearing ring industrial overseas business significantly affected. That is why the percentage has gone down. In terms of commercial vehicle, SUVs for the domestic or in the U.S., we are almost at par, and we are at the same level, which is 29%. EV and hybrid segment is somewhere about 7.7%. If I'll talk about total revenue from the operations, for the nine months, it is INR 871 crores, which was in the previous fiscal INR 1,222 crores.
Again, by forgetting to that, outside overseas revenue is somewhere about INR 420 crores in the nine-month figure and INR 450 crores for the domestic till the date of December 2024. The same number, it was INR 636 crores in the previous fiscal for the overseas business and INR 586 crores for the domestic business. Comparing the annual numbers of EBITDA, this for the nine months, company has recorded EBITDA of INR 207 crores, which is 23.3%. Last fiscal, it was INR 277 crores, which was 22.4%. Here, we had a bit of additional EBITDA margin. Talking in terms of PBT or PAT, for the nine months, company has recorded INR 119 crores of PAT with a PBT of INR 177 crores. It was in previous fiscal INR 156 crores PAT, and PBT was INR 242 crores.
The reduction of PAT, again, as I mentioned to you, that is an additional provision of INR 18.6 crores and bit of reduction in overall revenue of the company, which has also bit increased my fixed cost absorption. That is why the number has bit reduced. Operating cash flow, company is having sound cash flow. Even in the first half of this fiscal, company had almost INR 124 odd crores operating net operating cash inflow, which is, if I'll say, as on December 2024, it is some in between somewhere about INR 150 crores - INR 160 crores of net operating cash inflow. Debt, needless to say, that for last almost one, one and a half years, company is into net negative debt, and company has significantly reduced, or rather what you can say, it's a zero-debt company, and company has already having some kind of cash surplus with them.
Obviously, because of my PAT reduction and having such kind of extraordinary provisions for the ROR and those things, my ROE for this fiscal, we are expecting bit on downside. If we compare quarterly revenue of this particular two quarters, I was almost down by in terms of total revenue reduced by 5%. And if we compare corresponding quarter of previous fiscal, it is somewhere about 15, sorry, 8% compared to the December 2023. And in terms of overall nine-month number, my overall revenue has just reduced by 2.9%. Profit before tax compared to the previous quarter, it has almost down by 10%. If we say for the 10%, that is comparing to the December 2024, December 2023, with December 2024.
In terms of with comparison of quarter two, it was INR 65 crores, and it has reduced to INR 45 crores in this quarter mainly because of certain fixed cost absorption and bit of additional depreciation and to the certain level of change of my product mixing. Revenue, as I already mentioned, comparatively, we are almost on the same verge what we had for the fiscal 2024. I'm talking about annualized number, so we are planning to have more or less the same kind of number, but as I said earlier, that the company is very much positive for the next fiscal. As we got this nominations, what I already mentioned, we got this orders and confirmed dispatch planning from our customers, which would be implementing, which would be come out to the people on next fiscal. These are the numbers of balance sheet what we have already given in detail.
I'll not take these numbers individually or otherwise this number in detail. Thank you very much for your patience. Mihir, I request if you can initiate the Q&A.
Thank you, sir, for the opening remarks. So we'll now open the floor for Q&A. Anyone who wants to ask a question can please use the raise hand option. Once you are done asking your question, please lower your hand. We'll wait for a couple of minutes for the queue to assemble, and then we may start. Yeah. So the first question is from the line of Jason Soans. And sir, you have been unmuted, and you can go ahead. Jason.
Hello?
Yes.
Is my audio clear?
Yeah.
Yeah. Okay. Thanks for the opportunity. First, I just wanted to jump in, so I just wanted to know the absolute numbers, the revenue breakup which you give for bearing rings and auto components, domestic and export. So for nine months, FY 2025, what would that be and scrap, export, windmill as well?
Okay. In terms of domestic bearing ring, my nine-month number is somewhere about INR 247 crores. In terms of domestic auto component, it is INR 134 crores. Export bearing ring, INR 116 crores. Auto components overseas, INR 303 crores. Scrap is INR 59 crores for these nine-month figures. And export incentives is somewhere about INR 12 crores for this nine months.
And I assume windmill income wouldn't be there.
No, windmill income is not there because that is being nullified against my power and fuel cost.
Sure. Thanks for that. And sir, just wanted to understand, of course, our bearing rings performance has taken a hit. Similarly, industrial contribution also has gone down. I mean, when we look back at it, we have looked at the big three doing significant CapEx for localization in India. Just wanted to know what is the industrial segment. Probably, is there some delay in the CapEx plans? Why do you see some industrial weakness pulling the bearing rings? Just wanted to know the reasons and take people's thoughts.
Yeah. It's true to say that the big players in our bearing rings segment, they are in the expansion mode. But let me tell you that this expansion has significantly reduced the pace of this expansion, and they got certain deferments also because if you see their domestic or rather their overall numbers have also got hit in this particular third quarter.
The things have a bit deferred, and it is going through a bit slow compared to the early one. They have also, with one of our main customers, when we were just checking, cut down their CapEx in two phases, which something what they want to do it on one phase. Now they have deferred by almost six months to one year, again, depending and looking to the overseas scenario, particularly from the Europe market. So there is a slight reduction and slight deferment of this program. I would like to request Mr. Mihir Madeka to throw some more light on it.
One of the biggest bearing player in the world, recently, they have acquired a very big group. So now almost that group is having a turnover of, I can say, 60%, yeah, 50%-60% of what that group was doing earlier.
They acquired that group, and that is the reason there is a bit delay because very big team from them, they visited our facility recently. And now what they are saying that from this year, after maybe two, three months, means for our financial year to start from April, May, the things is going to move fast because now they have merged and they have already made the plan to expand in India and to move some of the facilities from their Europe and some other continent. They are going to move here in India. And also, they are going to have some addition, more additions.
Sure. Sure. So thanks for that. Sure. But just some color, I mean, the progress is slow domestically as well as more, but it's more to do with the international demand being slow, especially in Europe.
Yeah. In Europe, demand is weak.
Yeah. Very weak.
Okay. Okay. Sure. Sure. Okay. And due to that, it is impacting India.
Right.
Yes. Yes.
And sir, just also with regards to this INR 186 million, which we had booked for the ROR expense, do we anticipate any other charge in this year itself? Last year, we had this charge of around INR 320 million in the last quarter, the Q4. So do we expect any more charge for this ROR going into Q4?
See, Hiren Doshi here. See, what we did, or rather on the basis of the approval letter from CDR Cell and the sacrifice what these lenders have made, what we are of the impression and what we got some kind of feedback and some kind of guidance in this matter, that maximum what we are expecting the liability for this kind of thing is to the extent of INR 50.60 crores.
So considering that we have provided when we got a letter from our lenders, though the lenders have demanded significantly high, but because on the basis of the agreements, on the basis of the sanctions and the approval letter of CDR, what we are having positive confidence that it would be restricted to INR 50.60 crores. And that is why we have provided the entire amount. Now, if there are certain while calculating these things in detail while negotiating with the lenders, this figure may they may going to ask a bit on that some additional component on the delay of this from 2022 to 2024 or 2025 till the time of final payment. So those things, which is a bit unexpected or rather not able to tell you as of now.
Okay. Okay. But just to clarify, INR 50 crores -INR 60 crores, which you mentioned, so INR 50 crores has been taken off, INR 32 crores last year, INR 18 now. So that INR 50 crores has been covered, but you never know with the negotiations, more expense could be incurred, right? That's what you're saying.
Yes.
Okay. Okay. Sure. Sure.
And so lastly, just again, I think by the end of next quarter end, maybe by the March, though we are pushing with the other bankers to close it down even before end of March, and we would like to pay it off the claim of ROR so that it will give or rather it will open many doors which are closed as of now. So we are very much pushing or rather behind with the all lenders.
Okay. Sure, sir. Just lastly, just wanted to understand in terms of, sir, you have mentioned you have won quite a few orders in the last two quarters. Any revenue added should want to give for 2026, 2027?
Sorry? Hello?
Yeah. Yeah. What I mentioned is, sir, you have mentioned some orders which you have won in the last two quarters. Just in light of that and in the back of that, would you want to give any revenue guidance for 2026 and 2027, FY 2026 and 2027?
See, I already told that this INR 175 crores something, it's the starting size or rather the volume of the business in the first year. Now, in more than 50% of the project, the value what I have shown is somewhere about 30%-35% of their peak revenue.
Generally, in the second fiscal, that 30% figure will go up to 50%-60% or something like that. So we are expecting, if I'll not tell you the precise number, but we are expecting on this INR 175 crores additional of somewhere about 25%-30% additional supply for FY 2027.
Okay. Okay. Sure, sir. Okay. No, but you just mentioned that 25%-30% of the first year ramp-up is INR 175 crores . Then probably subsequent ramp-up will double it, right? I mean, if it goes to.
May not double it, sir, exactly, but it will go up to, say, you can say somewhere about INR 250 crores.
Okay. Okay. Sure. Okay. Thanks, sir. Those are all my questions. Thank you.
Yeah. So before taking the next question, a reminder to participants to use the raise hand function for Q&A. Our next question is from the line of Nikhil Kale. Nikhil, you have been unmuted. You can go ahead.
Yeah. Hi. Am I audible?
Yes.
Yes.
Yeah. Yeah. Thank you for taking my question. Just one clarification. You mentioned the INR 175 crore order book that you have given for FY 2026. That is the annual value, and you expect 25%-30% of that coming in FY 2026, or is it the 25%-30%?
No, this is the INR 175 crores. See, I told even that in certain programs, the first year is 50%-60% what they are asking. So obviously, it would not be double in the next year. But the overall number of INR 175 crores what we have mentioned, I am expecting additional INR 50 crores - INR 75 crores in that volume for considering all these programs for the next fiscal.
Understood. Understood. Sir, I mean, you mentioned that these are completely new years, but in your existing business, there will obviously every year, there will be some business that will kind of go off. Typically, I mean, is there some sense on as a percentage, I mean, how much business does it kind of typically expire, and you have to kind of replace it?
See, we didn't have much of the business expiring. It is basically the reduction of overall volume of a particular program or a particular product. Now, if I'll tell you in terms of bearing rings, none of the bearing rings components what we are supplying to our customers who are into industrial applications and so on. It's not like that one particular ABC component what they were asking. Now it is zero. But the volume has significantly down. You can't say 50% down.
Because their volume has been reduced, decreased.
And the earliest program which is expiring is somewhere about maybe in 2028 from one customer, but by the time, we will be having new programs or new plans for the seed customers.
Okay, but just kind of understanding this bearing rings exports decline that you've seen, is this kind of across customers or there was some one customer you mentioned that there have been some issues there and they've kind of done this merger? Are you seeing this kind of volume decline across customers?
If we say majority is from the one particular group of the customers, but again, in other customers also, we are facing reduction of 25%-30% over there, but one particular customer might be reducing 45%-50%, but the other customers also have some kind of reduction of 25%-25% or so. Overall, all the customers are facing this downfall.
And try to say this decline is also a function of the destocking that would have happened in the end market demand wouldn't be this weak.
Now, the destocking would not be much of the issue, but overall, their production schedule, their dispatches to their principal OEMs and those were significantly reduced.
Understood. Last question then, I mean, then going forward, when do you expect this to kind of bottom out and probably stabilize and then kind of start increasing going forward? I mean, is this decline kind of continue for maybe a couple of more quarters? How are you looking at it?
Sir, it is a bit difficult. You know better how the situations and the things are moving at overseas. And this particular downfall, major chunk is from the overseas, and again, from the Europe and the U.S. continent.
And because of disturbance over there, it is a bit difficult to tell you that it may last for another one quarter or so. But as I told you that we have also added one couple of bearing ring customers for the European market, which may give some kind of recoup or some kind of recompense. But to getting back to the normal level of my overall bearing ring business, I think we need a couple of quarters or something like that.
No, I mean, I was thinking that you'll be getting purchase orders or something, which at least we can get some understanding of some trend that, okay, this is now kind of stabilizing at a particular level.
See, as of now, also the indication or the forecast what they have given for the March quarter or something like that, we have some kind of positive move over there, but not in a significant way.
Okay. Understood. Understood. Thank you.
Yeah. We have a next question from Abir Khatian. Abir, you can go ahead.
Am I audible?
Yes.
So this is Abir. My first question was on ROR provision, which is less than the ROR sacrifice that the bank made of INR 83.6 crores. So on what basis are we assuming that the bank will forward its principal amount? Or are we thinking of adding incremental provisions as we go forward?
Sir, as I mentioned earlier also that in my CDR approval or rather the CDR Cell, the particular package or it was approved, wherein the sacrifice value was stated bank-wide lender sacrifice, which aggregating to INR 50.6 crores.
And now the demand what the bank has raised, even as you are specifically asking for INR 83 crores, even in that INR 83 crores, we have already raised our observation concerns with the couple of banks, which is to the tune of somewhere about INR 10 crores - INR 11 crores, which they have charged in excess, which they have recovered in excess. And that definitely we are going to get back that rebate into our overall thing. Now, coming back to INR 73- INR 50.6, again, the method of calculation what they did and the method of calculation what company did with the help of certain consultants, that is again debatable. And it would on the discretion of the lenders, and we are going to once we sit across the table with them, that can be rather that will be finalized.
Obviously, if any additional this thing, that will come to the coming quarter. We expect, as I told you earlier also, that we are pushing this thing to finish it by March 2025 or so, as any company would like to settle this thing with the one-shot payment, a kind of OTS, this thing. So we are expecting much of the rebate or a waiver in that particular amount of INR 73 crore what we have requested to the lenders.
Understood. My second question would be, are we losing any kind of wallet shares with our clients given that there's a 50% kind of decline in export bearing ring? Is that something we should be concerned about?
We are not losing our wallet share. It's not, as I told earlier also, it's not that some products they were sourcing from me. Now they have started from somewhere else.
There might be, what you say, out of 10 components, maybe my customer might have discarded one product, and they may got these products from somewhere else, something. But again, that is very few components. And in the particular bearing ring segment from a but apart from that, we didn't have reducing the wallet share, but the quantum of the volume has gone down. That is the main reason.
So once it will be up, definitely, again, we will have those orders.
Understood. And my last question would be on falling EBITDA margin. So is it just a function of scale that despite our power and fuel costs, it's going down, or is there something else there?
Definitely, the major portion is decreasing the scale. And again, I would like to tell you that bit of change in product mix, particularly in this quarter, December 2024 quarter, that has impacted.
Again, apart from that, the renewable energy revenue that is from windmill and solar, this is a sort of slowdown period for this particular segment, whereas my certain fixed cost has already been there, and those are being less at stock. So these are the multiple reasons for reduction in my overall EBITDA. A few reasons are.
Understood. Thank you and all the best.
Thank you.
Yeah. Next question is a follow-up from Jason. So Jason, you have been allowed to cut in, and you have been unmuted.
Yes. Thanks for the opportunity again. So I just wanted to ask, since we have exposure to both bearings and automotive components, with the increasing adoption of EVs, just wanted to know, does that open up more opportunities for us and more precision auto components or bearings? I think more to do with auto components.
Just wanted to know your thoughts on that in terms of better and more higher engineered products, higher margin for EVs, especially.
Yes. See, Jason, if you have seen that the new program what we have awarded, there are three to four programs which belong to the EV segment. But let me tell you, the way what we were expecting and what we were envisaging, the curve of moving the EV segment up, that has also been what you say is a bit stagnant as of now. But at the same time, what we are getting opportunity for the passenger vehicle and rather the non-EV or IC segment in the overseas and domestic both. So there is a demand in terms of those kind of vehicles also. Definitely, we are open to have EV hybrid both, and we do have that kind of versatile capacity.
But as of now, the new order what we are winning, that is, you can say almost 65% other than EV hybrid.
So you're saying the new orders basically are for non-EV segment, right?
Non-EV is somewhere about 65% compared to the EV segment. Even in one of the major domestic player of car manufacturer, the way they came up or rather the way they have exposed to this thing that EV would be this, that. Now, what they were expecting, again, it is not as per their expectation, but being slightly having a footprint in the coming quarters. And I have mentioned in my list also that one of the domestic auto customer for the EV, we got an order.
So this is the ramp-up year for that customer, and we already started. So from next month, we have a good volume for them, and it is going to ramp up. In that also, the EV volume is 66%, and 33% is the IC volume out of what they are going giving as a schedule. And they are showing that the car has got a very good response, and they got a good order book. And so it is good. So from next month, our bulk supply is going to start, basically.
And so this customer which you just spoke about, that's more on the domestic side or on the more on.
Yeah, domestic OEM car maker.
Domestic OEM. Okay. Sure. Thanks, sir. That was all from me.
So we have a next question from Khush Nahar. Khush, you have been unmuted, and you can go ahead.
Sure, sir. Thank you for the opportunity.
Yeah.
Yeah.
So my first question was on these tariffs, I think, the U.S. tariffs that might be from India, another country. So what is our stance on that, and will it affect our export business since exports is a 55% revenue mix for us?
See, as of now, the tariffs and the HSN, particularly the product-wise list, what they have published out or rather they came out, fortunately, there is hardly one component wherein we may have some kind of this duty hike would be there. But again, that will not be affected in overall value and even to my customer because that's not a very big significant volume or significant value over there. So as of now, we didn't have much of any negative as far as this tariff declaration is like to say.
All right, sir. The second question was what kind of recovery timeline-wise if you could guide us considering the reduction in volume, when do we expect some uptake or some positive move in terms of volume delivery for us?
We expect in next fiscal, as I mentioned to you, that with the help of the additional new program and the additional volume to be increased, the scale of economy will increase, which will give me the top line, bottom line push-up in the next fiscal. Yeah.
And I think around 15%-20% revenue growth, is that right?
Yes. Yes. Yes. We are expecting the same.
And margins coming back once the scale comes back to around 22%-23%?
Yes. 10%. It would be right.
All right. Thank you.
Thank you.
Yeah. We have a next question from Dhruv Bhatia. Dhruv, you may go ahead.
Hi, good afternoon, sir. Just two questions. You've talked about an annual business expected from 2026 indicative of about INR 175 crores. In your best understanding, because of the uncertainty that's there in the overall entire demand across different regions, what is your probability of you converting this INR 175 into actual revenue? I mean, is there the visibility confirmed there for having this entire INR 175 converted into revenue, or is there risk of this getting postponed to some extent?
So as of now, the forecast and the dialogues or rather the conversation with these customers and the way they are approving the PPAP and all this thing in a quick manner, again, no doubt my customers have given me some additional or rather the higher number of this forecast.
But conservatively, what we tried to mention or this INR 175 crores, again, if you ask me to the best of this thing, I think we didn't expect maybe deviation of 10% or more than that.
Okay. And because you've won these orders maybe in the last year or so, are these orders come at a profitability at where you stand today equal to worse off or better off than what you've been doing in the past?
Yes. Yes. Definitely. Because the orders what we are getting or the customers what we tried to tap, we will be having the same kind of margin. And we are not compromising on the margin front as far as this thing. Because of our high technology and high precision level, we are able to get the optimum margin.
Okay. And so the last question, because when all your customers, a large part of them are global companies and they have plants across different regions, generally, the thought process of any global player would be to first absorb existing capacities in different regions to a certain level where fixed cost gets covered, and then you start ramping up, right? And hence, because if Europe is soft and many other regions are soft, they would want to get catered to and ramp up those capacities more than what India could. So in that context, is there again a risk of you being able to service their requirements because it could be coming from some other source?
See, first of all, we didn't foresee much of the threat as far as their own capacity for forging and this thing. Because a couple of big players have already announced, and they have started closing down their forging facilities, and maybe a couple of have already started to close their entire plant, and they are moving towards India and a low-cost country. So we didn't expect much of these disturbances as far as their capacity of forging or this thing. Because there are hardly one or two players out there having a couple of plants in which they are able to produce these rings or auto components. So we didn't expect much of the thing.
Understood. Thank you and all the best.
Yeah. Yeah.
Yeah. So we have a next question from the line of Khush Nahar. Khush, you can go ahead. Khush, you are not audible.
Yeah. I'm audible now. Yeah. Yeah. Thank you for this follow-up opportunity. So my question was you mentioned that I think out of 10, one product was given to some other competitor. So was this due to some quality issue from our side, or was the other more they had a location advantage or anything like that? If you can elaborate on that.
Yeah. I'll go specifically to.
See, this statement, it was because of maybe out of 10, maybe one, or maybe out of 50, maybe two or three types. Maybe customer has diverted due to maybe pricing or whatever, never due to quality. Okay? But 99%, whatever bearing ring business is down, it is not because of the diverse means like shifting from one supplier to another. It is because really their market scenario is not good. They have lost the business.
It means their customer like OEM, what they predicted the volumes or what they were having the volumes month on month, it has been reduced. So the moment that will pick up, momentum will come. Definitely, that business will again start with us only.
Right. Okay, sir.
99%, they are not producing the bearing at the moment.
Okay, sir. Thanks.
Yeah. So you might have heard also, in last, I can say last six months or so, my customer has even stopped their line, many lines for 15 days, one month continuously. Every month, they were stopping their line for 15 days. Then they run for 15 days. Again, they will stop for 15 days. Otherwise, they cannot stop the line even for an hour. It is a huge cost to stop the bearing line for one hour.
Right. Thank you.
Thank you. Reminder to the participants, you may use the raise hand function to ask. And actually, closing remark, we'll do the job. We are very much confident for the next fiscal as well as. So there are two questions from my side. So sir, basically, the orders which you highlighted, so do we require any additional CapEx on that, or are we already equipped?
No, we are already equipped with this thing. And for this volume, we didn't require significant CapEx. Maybe INR 5- INR 7 crore rupees or something, what we are going to have. But down the line, one and a half to two years, when this volume will be multiplied, there we may need a CapEx. Again, not a significant CapEx, but maybe INR 20- INR 30 crores or something like that.
And sir, based on this, do you have any revenue guidance for the fourth quarter? Are we on track to go towards a INR 300 crore figure in the fourth quarter? How is the traction right now?
Yes. So broadly, even initially, I told that my annual number is something what I'm expecting with the last fiscal number. So we are trying our best to match that annual number and crossing this INR 300 crore in last quarter.
All right. So okay, that's all, and there are no further questions. I'll hand it over to the management for the closing remarks.
Thank you. Thank you. Thank you very much for your patient hearing for this investor. I would like to request our MD, Mr. Manesh Madeka, to say a few words and to closing remarks on that.
Looking to the current nominees, what we have got and the sample submission is going on. We feel that in future, we may have good business with good profitability because most of the nominees, what we have got is from auto components and for export in Europe and USA. So many nominees projects are going on. At present, we are submitting samples. And as you know, in automotive, it takes one year, one and a half years to start the bulk supply. So we are very much hopeful that our future is bright.
Thank you, sir. So this marks the end of the call. By 2027, we expect very good growth in financial 2027. 15%-18% growth we are expecting next year. Looking to the nominees, what we have been, we have received.
Thank you, Manesh. Thank you very much for your patient hearing. Is there any further queries or concerns? I request team Equirus or the particular attendees. They can send an email to us, and the company is going to reply on that. Thank you. Thank you very much.