Yeah. Good afternoon, everyone. On behalf of Equirus Securities, I welcome you all to the Q3 FY 2026 post-earnings conference call of Rolex Rings. From the management side, we have Mr. Manesh Dayashankar Madeka, Chairman and Managing Director, Mr. Mihir Rupeshkumar Madeka, and Mr. Hiren Doshi. Without further ado, I would like to hand over the call for opening remarks, post which we can have a Q and A session. Over to you, Hiren bhai.
Thank you, Mihir. We at Rolex Rings acknowledge the efforts of Team Equirus for arranging this call for the earning updates for the quarter ended and period ended of 31st December 2025. Warm good afternoon to all the participants. Thank you very much for spending your valuable time. I welcome you all. Before taking you through the numbers, would like to appraise the overall business outlook management perception for the proximate future. As you all are aware that recently the U.S. has came out or rather declared the US-India Bilateral Trade Agreement and announced that they have reduced the import duties to 18%, where it was 50% in the cases.
Would like to update over here that, particularly what they have, the notification what, it has been issued by the U.S. Trade Rep and U.S. Customs or from the President's Office, that, they have removed this Russian oil penalty, which was levied in the, somewhere in August 2025 by particular proclamation. That particular notification is being withdrawn. Effectively, today is the first, rather you can say a working day at U.S. post-announcement of this tariff structure. We are yet to get the final imports or final outcome that how it would be 18% or what would be the rate on our products, at U.S.
In November 25, the reciprocal, this Russian oil penalty, has already been moved off from the particularly products or for use for medium and heavy duty vehicles. Parts for the medium and heavy duty vehicles. Till now or rather from November 1 onwards, we have been charged 25% duty apart from the regular base structure of 3%. Now it's yet to see how this 25% would come down to 18% or how it would be effective. Again, almost 40%, 43% of the days of the current or last quarter of this fiscal has already been passed when this announcement have made. There would be an hardly positive or rather pushing moment for this particular last quarter of this fiscal.
We are very much positive from the first quarter of FY 2027 that now things could be on a very streamlined and U.S. could be on track. Because till now, for last six to eight months, customers are very much in the state of, you know, the wait and watch kind of situation. They have hold on the entire or rather more than 50% of their imports. Rather, their customers are also not giving them feedback, and entire chain has already been disturbed. We expect that, you know, that hurdle to be overcome from the first quarter of next fiscal, that is FY 2026 onwards.
We hope that we will be on track or rather U.S. would be on a moving positively from the next fiscal. Coming to the quarterly numbers for the quarter ended December or rather Q3 of FY 2026, would like to tell you that there is a quite positive movement in auto components in both the front, the domestic as well as export. Would like to tell that over Q2, we had a growth of almost 14% on the auto component revenue in this Q3. Same in case of bearing rings, we had a de-growth of 7.5% over Q2.
Further to drill down this improvement, there is almost 10% incremental revenue in Europe exports over quarter two and, which is you can say almost 25% compared to my FY 2025 full numbers with the nine-month number percent. I'm talking in terms of percentage. There is a good movement and momentum at European market where we were struggling till like last fiscal. In the domestic front also, it is almost 5%-6% upward trend compared to Q2 of this fiscal and vis-a-vis 15% improvement over the entire fiscal of fiscal 2025.
The only worry or rather the where we got an hit is in the U.S. market, wherein 10% downfall in the Q3 compared to Q2. If you, if we annualize it is almost 30% down compared to fiscal 2025 what we had. U.S. is still under the shadow of RIP day. Now we expect some kind of U-turn of this downfall from the Q1 of FY 2027. On the other hand, as I told that, domestic and European markets have hit the positive curve and expect it to be continued, to be improved from the first quarter onwards. On the basis of the program, on the basis of the orders, what we have received, forecast we have been given by the customer, we are very much positive as far as fiscal 2027 is concerned.
In this last quarter, a couple of new customers have already been enrolled or rather it has SOP has been started to a marginal level. Down the line from the Q1 of fiscal 2027, it will be ramped up and further it will be increased. Taking you to the numbers for the Q3 as well as 9 months for this current fiscal. Revenue from the operations for the Q3 of this current fiscal, it has touched almost INR 275 crores, which was INR 271 crore in the last quarter, vis-à-vis INR 260 crore of the same quarter in the corresponding previous year, that is December 2024.
Here we had a growth of almost 10% in 6%-8%, 7% on Q3 of FY 2025 versus Q3 of FY 2026. Compared to the previous quarter, we had a marginal growth of 2 percentage only. In terms of EBITDA, we have, we are maintaining or rather we are trying to improvise on the basis of the scale of this cost measurement and cost reduction area. In Q2, we had an EBITDA in terms of INR almost 69 crore, which was 22, 4.2% of my overall gross EBITDA. In this last quarter ended December 2026, 2025, we recorded INR 75 crore of EBITDA, which is coming to 25%, 25.7% of my gross revenue.
If we talk about the EBITDA net of the other income, it is almost 21% in Q3, that is December 2025, which was 20.2% in the previous quarter. It was somewhere about 20.80% for the last fiscal, that is FY 2025. For the corresponding nine months period, if I tell you, we had this net EBITDA netting of other income. It is 21%, 21.6% in the fiscal 2025, 2024. Almost again on the same line, 20.77% for the nine months ended on December 2025.
Coming to operating PBT and PAT, in this Q3 of FY 2026, we have recorded 65 and a half crore as a profit before tax, which was INR 59 crore in the previous quarter, that is second quarter of fiscal 2026. The same, it was INR 45 crore in the Q3 of FY 2025, that is December 2024 quarter. There is a sharp increase on a quarterly basis as well as on comparing to the previous year's quarter. Here I would like to tell there is a significant improvement because of the overall other income, what it has been increased in this particular quarter compared to previous quarter as well as the quarter which was there in December 2024. Profit after tax in Q3 for fiscal 2026, it is almost INR 48 crore, which was INR 44 crore in the previous quarter.
Again, in December 2024, it was INR 20 crore only because we had an exceptional item of ROR interest provided in that December 2024 quarter. Here in this quarter also, PAT is being reduced by almost INR 2.5 crore, that is by way of exceptional item, which is for the impact of the New Labour Codes, which has been implemented from 21st November 2025. Bearing the potential gratuity liability, it is supposed to be disclosed and valued and to be accounted in this December 2025 quarter only. That has been valued at INR 2.5 odd crore, which has been net off in this profit after tax figures. Revenue bifurcation, bearing rings, it is almost 52% of my overall revenue of components.
48% consists of auto component business. In terms of exports, it is 47% and domestic 53% in this 9 months period. Certain business development, as I mentioned, that 10% improvement on overall exports to Europe over Q2, 25% compared to fiscal 2025. Again, 10% downfall in exports U.S. over Q2, which is almost 30% down over fiscal 2025, as I have informed before. As I told that tariff hangover is expected to be normal from Q1 FY 2027, and we expect a sharp recovery in the U.S. market. The downfall what we had, 30% of the revenue in this fiscal would definitely move further in a positive way.
We do have a bit more visibility as far as the auto component business or growth in the auto component business on the basis of the orders or forecast given by the new customers, particularly from Europe. We have also added one customer from Mexico and one in from U.S.A. That would be starting somewhere about mid of fiscal 2027 and one customer in quarter 3 of fiscal 2027. On the bifurcation of my revenue split, rather it is 53% of overall revenue, it goes to the passenger vehicle. It's 19%, which is there for the industrial segments and 21% for the commercial vehicle and heavy commercial vehicle. EV almost 7.5%, 7.6% of my overall revenue.
Here, I would like to tell that 53% of this passenger vehicle share is because of good reduction in my CV and HCV portion. The U.S., one of the main customer who is a vital or rather who is procuring good amount of auto components for the CV and HCV is under pressure because of this tariff. Factually, it's not like that we have reduced or rather we got the incremental share in passenger vehicle, though it is almost on the same line, but the downfall in the commercial vehicle has moved up by percentage of my passenger vehicles. Total revenue in terms of operations, for the 9-month figure, it is INR 838 crore almost without considering other income. Other income is almost INR 47 crore.
Both put together, INR 885 odd crore gross revenue has been recorded in this nine months of the current fiscal. Which consists almost INR 365 crore revenue from the overseas business, which is my exports as well as my export incentives, and almost INR 473 crore in the domestic market, which is including my product sales as well as scrap revenue. Which was in last year, fiscal 2024, it is totality it is almost INR 1,155 crores, wherein INR 553 consist of exports and exports, yeah, and INR 601 crore in domestic market. Would like to tell here we are almost on the same line or as I have already informed that we would be having the same kind of numbers for the fiscal 2026, what we had in fiscal 2025.
Let me tell you the EBITDA what we had in fiscal 2025, which is 22.7%. It has, almost 24.9% in this 9 months period, amounting to INR 221 crore, which was INR 269 crore for the full- year. As I was mentioning earlier, PBT and PAT for this entire 9-month profit before tax is almost INR 193 92 crore, which was INR 226 crore for the full fiscal of FY 2025. Again, PAT it is INR 141 crore, which was INR 174 crore in the full fiscal of FY 2025. Here we do have, as I told you that here, the PAT is bit improved compared to, the fiscal 2025 numbers.
As well as PBT also, it has increased by a bit compared to the overall fiscal of FY 2025. Operating cash flow, we had for the first half, it is almost INR 87 odd crore free cash flow what we have generated, again, with an CapEx of hardly INR 12 crore in terms of a couple of furnaces and a small coating line. As you are very much aware that company is having net negative debt for last couple of years. Company is having surpluses, which has been parked for two reason other income. Overall, there is a negative or rather, debt equity ratio. Coming to the ROCE, return on equity, it is 17% for fiscal 2024, it is 16% for fiscal 2025, and I expect to be in the range of 15%-16% for the fiscal 2026.
These are the detailed numbers what has already been shared with you people. I would like to request team Equirus to take it further and we can initiate Q and A session.
Thank you, sir. Thank you for the opening remarks. We will now open the floor for the Q and A. Anyone who wants to ask a question can please use your raise hand function. Once you are done asking your question, please lower your hand. We will wait for a couple of seconds for the queue to assemble and then we may start. The first question is from the line of Jason Souls. Jason, you have been unmuted. You can go.
Yeah. Thank you. I'm audible?
Yeah, Jason.
Yes. Sure. First, just wanted to know, sir, the numbers in terms of the segments, you know, export bearing rings, export. Firstly, the numbers for Q3 FY 2026 and then Q3 FY 2025.
See, for the Q3, the domestic bearing ring, we have recorded I'll tell you in terms of million. It is INR 953.69 million. Export bearing ring, it is INR 380.55 million. Domestic auto component, it is INR 397.80 million. Export auto components, it's INR 839.87 million. Scrap revenue, it is INR 149.11 million. Export incentive, it is INR 27.35 million. This all puts together INR 27.37 million for the Q3 of December 2025.
Okay. Now Q3 FY 2025, sir, which is the last year corresponding.
You want the full- year or for the nine months?
No, no. Only the Q3, sir. Q3.
Okay, Q3.
The last one.
Domestic bearing ring-
The one ending in December. Yeah. Yeah.
Domestic bearing ring, it is INR 730.39. Export bearing ring, it is INR 283.33. Domestic auto component, it is INR 386. Export auto components, it's INR 995.38.
INR 995 you said, sir?
Yeah.
INR 995.38. Okay.
Yes, yes.
Sir, scrap and export incentive?
Scrap was INR 167.38. Export incentives, it is INR 36.42.
36.42.
Yes.
Okay. Okay. Sure, sir. Thanks for that.
It comes to INR 2,598.82.
Sure. Sure, sir. Thanks for that. Next, just wanted to ask, sir, I mean, even in the previous con call last quarter, you had mentioned that you are expecting the tariff from the 53% to be reduced to 18%-20% on auto components. Just wanted to know that You did speak in the opening remarks that although that is 18% has come, fine print has still not come. Just wanted some clarity, sir, what exactly. Also I wanted to know 18% on the MHCV parts, it's basically the auto component parts and bearing rings as well, right? Both will be reduced to 18%, the tariffs?
See, as I told you initially, for this auto components, till 31st of October, it was in totality 53% import duties were there.
Right.
From 1st of November, they have given certain relaxations, that is from Section 232, which has reduced 25% duty from 53. As of now, or rather till 7th of February, we have been charged at 25% with the duty plus basic customs duty what it was 2.97, along with merchandise fees and this thing. Now looking to the notification, or rather the issued by the U.S. government, we are not sure whether this 25% what it is applicable to us as of now. We also got a feedback that it would be a zero also in certain auto components. It would be an 18% also on certain kind of this thing.
It may continue with the 25% also, but that is subject to the clarification and detailed notification along with the respective, you know, HSN.
Only we'll be able to know. Once we'll have some kind of clearance at U.S. Customs and we'll be able to know maybe in next couple of days that how this would be implemented and what has been interpreted at their level. Broadly, they have simply told that on the one side they told that Russian import duty has been moved off, which was 25%. On the other side, it is telling that duty would be 18%.
We are a bit, not aware unless and until or even not we would like to comment unless and until we have something, you know, authenticated on paper.
Sure, sir. Just to summarize, till 31st October you had 53% tariffs. From that 1st November to this point in time, you had around 28% tariff. You said 25% plus some surcharge, et cetera, which was coming up to 28%. Now you will wait for the fine print with the HSN, et cetera, as to what exactly that will give us the clear picture. Correct? Correct, sir?
Yes, very true.
Correct, sir. Okay. This, again, auto component definitely must be going by a large number to the U.S. How about bearing rings exports, sir? What is that proportion? Is that also significant proportion?
Bearing ring, as I told you, if you see bearing ring in terms of exports.
it is, we can say, of 15%-16% of my overall revenue, which is there.
There we got a hit from, you know, majority from the European market.
Okay.
It has not been fully recovered. If you see my last three quarter, or rather all these three quarters for this current fiscal, my bearing ring export of overall from revenue, it is 13%. It ranges in between 13%-15%. Let me tell you, in say, fiscal 2024, the same number was almost 23%.
In fiscal 2025, it went down to 15%. In this last three quarters, we are having average of 13%-14% of overall export bearing ring.
Okay. Okay. No, sir, what I wanted to know is, the tariff is basically emanating from the U.S. What I understand is the bearing rings is basically 55% domestic and 45% is exports. From that export component, how much goes to the U.S.? Only I'm talking about bearing rings. I'm only talking about bearing rings.
Okay. That, that portion of bearing ring to U.S., let me tell you, in terms of number, say for example, for this nine months, I told you that export bearing ring was INR 312 crore, INR 113 crore. Out of that, the export to U.S. is INR 32 crore.
Okay. It's INR 32 crores. Okay. Sure.
You can say one-third of overall bearing ring business, rather export bearing ring business, that comes from the U.S.
Okay. Okay.
Remaining is from Europe and, Canada, Mexico.
Okay. Okay. sir, on this, the tariff is, that also will be clarified, that's what you're saying?
Yes. That, there we expect. You know, we didn't have any kind of duty paid structure with for the bearing ring business. There we expect it would be coming down too, because it was 53%, and now it would be coming down to 25%.
Okay. Now you're expecting it to come to 25.
Yes.
Okay. Sir, revenue guidance 2026, you, I think you alluded that it will be flat in terms of revenue. For 2027, you still stick to the mid-high teen growth for 2027 revenue-wise?
Yes, yes. As of now, we still expect and on the basis of forecast of the same, we expect in between, you know, maybe 16% to, or rather 15%-18% of overall growth. Because in U.S., like, 25% has been from 50, they have reduced to 25%. Our customers in U.S., they are happy with this 25% also. Now definitely it is going to be 18. When? We are waiting for the announcement from U.S. government.
Sure.
It has already been declared, so it is definitely going to be there within a week or two weeks or something. Once it is there, then there are more chance of getting more business from U.S.
Sure. Sure, sir. Sure. Sir, just lastly, one thing. Just wanted to know the revenue breakup between U.S., India, and Europe and others for nine month.
Uh-
Nine month.
Total revenue?
Yeah, total revenue. U.S., India, Europe and others.
I'll tell you broad percentage of that.
Yeah.
Say 54% is domestic.
Okay.
22% is U.S. Same % it is there for Europe.
Okay.
The remaining in between Mexico, Canada, Thailand, et cetera, might be couple of more, two and a half, 3% something.
Sure. Sure. Sure, sir. Thanks for answering my questions. Thank you so much.
Thank you, Jason. Our next question is from the line of Amar. Amar, you have been given the permission. You can go ahead.
Hello. Good morning, sir.
Yes.
Sir, I just wanted to ask you that, what are the current capacities you have right now?
See, in terms of, metric tons, the achievable production capacity is somewhere about, in the range of 105,000 metric ton to 115,000 metric ton per annum.
Okay. What's your order book, including the additions in Q3?
Order book, as of now on a monthly basis, it is ranging somewhere about INR 95 crore-INR 105 crore for the next three months.
Okay. For the one quarter, right?
Yeah, last quarter. Yeah.
Okay. What is the total order book, sir?
Total order book. You know what happened? Sometimes my overseas customer gives us the forecast for a six months or something like that, whereas domestic might be of couple months. If you ask me, Q1, what I'm looking for or rather on the basis of the forecast, what we are targeting is somewhere about INR 325 crore or something like that for the very first quarter.
Okay. for the first quarter of FY 2027, your order book will stand at close to INR 325 crores. Is that what you're saying?
Three twenty-five to three thirty.
Okay. That will be your total order book as of Q1, right?
Yes.
All right, sir. That's all from my side. Thank you so much for answering my questions, sir.
Yeah. Thank you, Amar. We take the next question from line of Manish. Manish, you can go ahead. Hello.
Yes.
Yeah. Manish, sir, you're not audible if you are speaking something. I would request you to-
Am I audible?
Yeah, now you're audible. Yeah.
Sorry for that. Sir, first of all, good evening and congratulations for the good set of numbers. I have two queries. First query is, you know, what we have seen is promoters buying some shares and selling some shares in December quarter within a couple of days. Normally, we don't see that happening. Can we know the reason behind it?
It's, let me tell you, definitely you have not seen frequently in past and again, you will not be seeing the same in future. There is some kind of, I would say, a miscalculation or something, you know. Initially, promoters has acquired to, you know, increase his stake only, but there were some kind of urgency wherein the funds were supposed to be deployed in a day or 2 only. That was the temporary option available to particular promoter, and that is why it has. On the contrary, promoters, you know, had a loss in, you know, selling of this, and tax implication was quite negative. That was by way of some compulsion, it has been done.
Now onward it would not be there.
No. Okay. No, I just asked because it's little weird promoter buying some share at INR 118 and selling it INR 129. That's the reason I asked this question. My second thing is, you know, we have seen the pledging for promoter first time. What Do you know any reason for the pledge?
Pledge, again, they have given, you know, or rather raised certain fund towards that security which is some they have committed to invest somewhere. But if you see overall quantum of the pledge against their holding is of promoter's holding, you can say it's hardly 4%-5% of overall promoter stakes, less than 5%. In terms of totality equity, it is somewhere about 2.5%, 2.7 something.
Yeah, that's what. Definitely it is so small, that's the reason.
Yeah.
What is the necessity of doing?
They have committed. Maybe down the line, you know, 3 to 6 months it would be squared up also.
Okay. That's all from me. Thank you, sir. Thank you for taking my queries.
Thank you. We have our next question from the line of Saurabh Jain. Saurabh Jain, you can go ahead.
Hello. Yeah. Am I audible, sir?
Yes.
Yeah. Thanks for the opportunity. I have a couple of questions to begin with. Sir, at the beginning of the year, we had SOPs of INR 175 odd crore, which was supposed to get into schedule during the second half. How much of that INR 175 odd crore, you know, got registered in Q4? Do you still think that last time on the call you had mentioned that SOPs of around INR 225-INR 235 crore would go into FY 2027? Because we had some orders, new orders of INR 40, INR 50 odd crores. If you can, you know, just throw some light on that.
See, your first part of your question say out of that 175 crore revenue what we have projected and, you know, for the new program, new customers. Out of that almost, 60% of that volume it has been started. Why 60%? It's not like that order canceled or rather order has not started. It has started with a low off take. And certain orders it has been postponed. Let me tell you, two big customer base at U.S., it was completely rather they have, what you say, temporarily just closed down that particular plant where the import duty was 3%, and thereafter phase-wise it has went to 53%. It is something, what you say, very unviable factor for the customer of my customer.
Those couple of programs have completely been held or rather you can say a zero supply as on date, which was significant amount. Here, again, as I told you initial part or maybe in the earlier commentary also, that we had a loss of existing business maybe of 20%-30% of bearing rings as well as particularly from the U.S., as I've just told that 30% of my U.S. revenue compared to previous fiscal, it has reduced in this current fiscal. These numbers, whatever the reduction is there, in spite of that, we are having the same kind of flat, you know, top line. How I'll be able to maintain that top line? That is because of the new orders, new customers. It's not that it has not moved. It has moved.
Couple of reasons, as I told you, that volume has been reduced. Few orders have been deferred 2, 3 to 6 months. Few orders have deferred by almost a year or so. Coming to the second part of your question where you were mentioning that INR 225 crore-INR 230 crore odd something for the fiscal 2027. We expect, as I told you, that maybe we would be closing somewhere about, you know, INR 1,150 odd something top line in this year, wherein I expect almost INR 200 crore odd, somewhere about INR 180 crore-INR 200 crore additional revenue from these new programs, because something it has already been started.
Okay. Yeah, that's helpful, sir. Just a follow-up to the previous question. You mentioned that we have a monthly order book of INR 95 crore-INR 105 crore for the coming three months. If you can, you know, just bifurcate us, bifurcate that for us in terms of bearing rings and auto components.
Sir, bearing ring ranges are near to 45%-48%. Auto components again 50%-55%.
Okay. Sir, another thing is, of course, you have mentioned about the tariffs and more clarity is required, post the recent announcements of India-EU FTA and recent developments with respect to U.S. tariffs, how has been the communication with our overseas clients? Like in terms of what kind of volume offtake can we see in the coming fiscal if at all it comes to 18% and 25%?
See, I told you that this 18% number as they have announced somewhere on, you know, 4th of February or something, and they again came out that from 7th February it would be implemented 7th February, it was Saturday. Today we are on the 10th afternoon, which is, you can say the first working day. It was 9th over there. We are yet to know how it is. As far as overall, we communicated and Mr. Mihir also conveyed that my customer, as of now, they are okay or rather they have already absorbed 25% of import duty. We think once the momentum start or once the overall activity would be on back to track, we do not expect any, you know, negative impact on this thing.
That can be managed because the kind of quality of the components and the range of the components, what we are supplying, it would be difficult to, you know, get it from some other part, other countries on a very decent way. Or even in other countries, as you must have seen, the duty structure might be on a higher side compared to India. Coming to the other part, Europe deal as you deal definitely is welcome and our customers have again starting reviving or rather revising their, you know, certain calculations and they are in, they've already indicated that they would like to source more from India. Now they are exploring what kind of components and how the value added full components they can be import from the India and particularly from Rolex Rings.
That is what the feedback we got from the European customers.
Okay. If I can ask this from other perspective, what has been our capacity utilization in first nine months and how do you think it is going to play out in FY 2027 and 2028?
We are almost 60%-63% utilization of my overall this thing. I hope or rather we expect, it would be somewhere about, you know, crossing 72, in between 72%-75% of utilization in next year.
Great. Great, sir. Lastly, if you can comment on profitability, how do you see with tariffs moving and volumes going up? As you mentioned that utilization is expected to increase from 60%-63% to 70%-75%. How do you see profitability with the biz, if you can, you know, just throw some light in respect to both the segments, bearings and auto components.
See, would like to, you know, comment on the net operating margin, because I'm not considering the other income margin. It might be, you know, temporary. It consists of certain investment income and foreign currency pay, et cetera. Coming to the net operating revenue or you can say our net EBITDA, which is somewhere about, it ranges of 20 and, in between 22%-20%, that is 20%-21%. Once I'll be having utilization up to, you know, 60%, 80%, 70% or something like that, definitely this operating margin would touch maybe 22% or 22.5 even. We can achieve once we have that kind of scale of economy.
Again, getting into the bearing and auto components, definitely auto components we have better margin compared to the bearing rings because of the, you know, critical operations as well as multi operations at a high precision level. Broadly we can say.
Recording in progress.
Hello?
You can go ahead. Sorry for the technical glitch here.
No worries. Yes, sir, you were mentioning about the segmental profitability.
Mihir Madeka, I'm getting very low voice. I don't know. Just a second, please.
Voice I think is clear.
Sorry?
Voice is clear. Saurabh, you can speak again.
Yeah. sir, Hiren Doshi, sir, you were talking about segmental profitability, auto and bearing rings.
Yeah. As I was mentioning, auto components, will always be having, you know, better margin because of critical operations and the precision level. Even the application of the auto components for the EV hybrid vehicles obviously will carry a good amount of value-added processes. Obviously the margins are on a higher side compared to bearing ring. Traditionally or rather bearing ring, if I'll figure it out, it would be somewhere about, you know, 18% to 22% some kind of net operating EBITDA, whereas auto components, it ranges in between 20% to 25% of net EBITDA margin.
Okay. Any update on ROR, sir?
ROR, as you are aware that recently I have updated that the bankers we met and we tried to convince them. Initially they got convinced that there is some kind of error, some kind of calculation they need to revise it. That's why they have, you know, reversed the rather they have called off the demand, what they have issued. Maybe in this week only we are again planning to meet executive director of the lead bank to take up this matter as quick as possible. We are going to, you know, submit that we would like to close this matter maybe before March 26.
Thank you, sir. That's all from my side, and wish you all the best.
Thank you.
Yeah. Thank you. Sir, one question from my side. Now, with the India-EU FTA also and in the opening remarks we had mentioned that we are seeing some auto contracts from the Europe side of business also. What do we see here how the things can move? Because what I want to understand is what are the current duties which we are paying right now, and under FTA, how would it impact us? Some color on that.
I'm sorry, I'm not getting your question because in between your voice was cracking.
Yeah. Is it okay now?
Is my voice audible now?
No, it's too low. Tell me. Yeah.
I was saying that, due to this India-EU FTA thing, now what are the current margin structure what we are exporting there? With the FTA, what is something which we expect on our product portfolio? With our interactions with few auto clients there, auto component guys there, are we seeing some kind of positive traction that we may see some order flowing here? Definitely. I told you that a couple of customers, our existing customers, you know, they are in dialogues with after post this deal with the Europe. They are bit more hopeful and expecting some more products because the You better know the conversion cost and the production cost at Europe has significantly increased. We would be having that leverage over there.
Whether it is Europe or U.S., we are having more or less same kind of profitability unless and until if it is a bearing ring and auto components.
Okay. Okay. Secondly, sir, in terms of the revenue numbers, the segment numbers which you had given, so if we dissect that, the bearing segment on a year-over-year basis has seen a decent 30% kind of a growth. Can you throw some color on how what kind of traction will it continue going ahead as well in terms of the growth levels which we are seeing on a YOY basis here?
The percentage of auto has increased, that is why the percentage of bearing has gone down. Compared to my overall growth in last two years, wherein we were bit having tough phase for the industrial application bearing rings and even the commercial vehicle application bearing rings. There we had a good amount of dip and even the particular one customer group where we were catering somewhere about 20%-23% of our overall revenue, of total revenue I'm telling, that has gone down to even 10%, 11%. There is a significant, you know, reduction of that particular customer who is mainly into non-automotive bearing ring segment. Now, I think it's high time and we are expecting some turnaround from there also.
Bearing ring, apart from that, in the auto sector, we are getting good response. Couple of other domestic customers who were on a lower side, they have increased. They have increased the existing volume as well as they have added new products also. Couple of, you know, main bearing manufacturers in the domestic market, they have increased their wallet share and they are contributing somewhere about 12%, 13%, 14% of my overall revenue, which was earlier 9%, 10%. Again, as I told initially also that my bearing ring export before 1.5 year back was 22% of my overall revenue, whereas it has reduced to 13%, 13.5% in this nine months.
Export is a huge dip as far as overall bearing ring is concerned, but no doubt it would not come up as quickly as auto components because the new order book, what we have received, the new customers what we have enrolled, their majority 60%, 65% are, from, for the different kind of auto components.
Right. sir, but, exports is another story, but when I see your domestic bearing ring numbers, you're basically for the last five quarters, you have been growing at a decent kind of a growth rate like this year. This quarter also year-on-year it was up around 30%. Is it that because we are seeing some traction from the new capacities of the domestic bearing ring players?
That's what I told, that another except that one customer, other 3, 4 main players who have increased their number of components, who have increased the volume of that particular, this thing, and adding the new facilities also. One of the customer who has yet not initiated, you know, one of its production capacity settled in Gujarat, now they have started to the extent of 30%, 40% utilization, and where we got some chance over there. Those players are showing traction, and it is on them their expansion mode. Down the line six months further, we are expecting, you know, the same kind of growth in the domestic bearing market.
Okay, I'll take the next question. Next question is from Kush Nahar. Kush, you have been allowed. You can go ahead. Kush, you are not audible.
Yeah. I'm audible now?
Yeah.
Yeah. Couple of questions. First is these new customers that we have added, as you mentioned in Q3 FY 2026, this will be in which segment, bearing rings or auto components, and if it's domestic or exports? And just wanted to understand what was right to win for these customers. Like you mentioned that there is an increase in wallet share. You know, are we cost competitive or, you know, like, you know, just some elaboration on how are we replacing the existing supplier. That is one. Second, I think that many of our bearing ring customers are expanding in India. Like previously we have mentioned that we have around 30%-35% market share in the domestic bearing rings.
Going ahead in these new plants, do we see it increasing, you know, directionally towards 50%-55%? Like, are we benefiting from that expansion since they all want to make India as an exporting hub also? Third, lastly, considering the volume normalization that we're expecting because of the trade deals, so more from a three to five year perspective, any sense on the CAGR growth that we can do in terms of top line, considering the order book and the commentary of our customers?
Coming to Rather, taking up your portion of the question, last portion that, for next three to five years or something, let me tell you, it's very difficult to tell you the CAGR for the next or rather, beyond three years from now. Definitely the order book and the program tenure, what we have received, we expect somewhere about, you know, in between 12%-14% CAGR growth on for the next three to five years. Down the line, if I tell you today we are there in March 2026, maybe March 2030, we would be touching or rather we in turn have a plan to, you know, almost double the revenue what we have. That is the last portion.
Prior to that, I think, I already told that domestic players who are in the expansion mode, particularly the bearing manufacturers who are utilizing or who are adding new products, who are, you know, adding products which they were initially or rather earlier they were importing. We got that, you know, good chunk of that order or rather good chunk from that particular segment and even the existing one. That is why the 3, 4 players for the bearing ring, the percentage or contribution to the revenue has increased and overall my domestic bearing ring business has increased. I don't know. Can you just repeat the first part of your question?
Export market, where I said
I think the new customer what I was mentioning, what we have added in the, you know, in this quarter, that both these customer are for auto components and maybe in this month, before end of February, one of the bearing ring customer would be starting.
Just some leverage on the right to win, like, you know, because you must be replacing the existing supplier. Is it the cost or is it that sourcing strategy where, which the companies are changing that's why they are, you know, more trustworthy in players?
Generally, it is difficult to, you know, source the or rather, to intervene into the existing program. One of my customer, who has just, you know, who is sourcing these components from the other country, and now because of restrictions of his customer, he is required to move to the preferred countries where India would be. In that case, they have, you know, given us this order and in which they want immediate supply, maybe down the line 6-8 months only. Otherwise, there would be a new program, new product development, new, you know, the OEMs who are designing or rather who are developing a new kind of vehicles that will attract the new vendor.
These companies already if they are into certain program, they are in touch with the for the forthcoming programs to a potential forging player, having wide range of capacity, wide and able to offer a most valuable or rather the most value-added processes. That's why we got a preference somewhere in over to the other countries.
All right, sir. Thank you for the answers.
Due to limitations of the time, that would be the last question. Over to you, Hiren bhai, for the closing remarks, and we can end the call.
Thank you very much to Team Equirus, as well as the our investor analyst from the that team. As usual, would like to reiterate that management is very much concerned and dedicated for the development of this thing. We had a couple of hurdles as far as, you know, the overall performance, that is execution of that thing because of certain geopolitical reasons or somehow some other factors which have restricted our this thing. Would like to clarify that the challenges what we are facing, it is not only to the Rolex Rings or something, this is the overall economy or rather even the other players in the other segments, they are also facing the same kind of challenges.
I'm pleased to say that we try to manage the momentum. We didn't try to lose the overall, you know, utilization as well as overall top line. At the same time, we tried to maintain the net operating EBITDA net operating margin, and it would be on a positive side. On the basis of the, you know, the older program, no doubt it was there supposed to be executed in the fiscal 2026 only, but as you all are aware that these are the situations where, you know, the complete calculations or rather the customers, you know, the buying feasibility is being disturbed.
Now we think it would be on a track or maybe from the next quarter onwards, as I was mentioning, we would be having that momentum, incremental momentum, and along with the same kind of profitability. Maybe in next year or so, again, we are going to, you know, honor the expectations of our stakeholders in all way. That is what we are expecting, and that is what we would like to convey to our respectable stakeholders. Thank you very much for investing. Thank you very much for trusting. On behalf of Rolex Rings, again, I would like to acknowledge all the investors and the participation along with the Equirus team. Thank you.
Thank you.