Q4 25/26

May 15, 2026

Summary

FY26 sales rose 16% to ₹5,124 crore and PAT grew ~31%, with Q4 boosted by domestic demand and improving industrial components. Management targets double-digit EBITDA in ~2 years, but near-term visibility, inflation and West Asia disruption pose risks.

Ladies and gentlemen, good day and welcome to Wheels India Limited's Q4 FY 2026 earnings conference call hosted by ICICI Securities. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. I now hand the conference over to Mr. Ronak Mehta from ICICI Securities. Thank you, and over to you, Mr. Mehta. Good afternoon, everyone. On behalf of ICICI Securities, we would like to welcome you all to Wheels India's Q4 and FY 2026 earnings conference call. Today we have with us from the management team, Mr. Srivats Ram, Managing Director, Mr. P Ramesh, and Chief Financial Officer. We will start the call with a brief opening remark from the management team, and then we will proceed with the Q&A session. Thank you, and over to you, sir. Thank you. Yeah. Good afternoon, everyone, and welcome to Wheels India's Q4 and full year earnings call. We have a presentation. I hope you can all see it. As an overview, we are part of the TSF Group. The TSF Group was formed as part of the out of the family arrangement of the TVS Group. We are about $3.2 billion in terms of consolidated turnover for FY 2025. The group is basically in auto components, dealership and distribution, and financial services. We have strong global connects across supply chains, and we believe in long-term partnership, customer connect and focus, and work, and have very strong corporate governance and sustainability practices. An idea of the companies in the group. On the manufacturing side, we have Brakes India, Wheels India, Turbo Energy, Axles India, Sundram Dynacast, and Sundaram Composites. In distribution, we have Sundram Motors, Madras Auto Service, and India Motor Parts & Accessories. In financial services, we have the Sundaram Finance Group. Wheels India was established in 1960 and are part of the TSF Group. We are a listed company where the promoters have 58.31% of equity, and our value systems are relationships, integrity, customer centricity, and excellence. Gives you some overhead of the products that we make, tractor and earthmover wheels, aluminum and steel for cars and trucks, windmill-related components, air suspension systems, fabrications, and hydraulic cylinders. We also have a joint venture with Topy for making passenger car steel wheels for multinational car companies. We have 10 manufacturing units, 8,400 people, and our turnover in the last- It is 540 million. INR 540 million is our current turnover on the devalued rupee with INR 141 million of exports, and we are a preferred OE supplier. This gives you some idea of the timeframe in which we have entered various businesses. If you look at it actually, after 2020 we have entered into quite a few businesses. We are also consistent in terms of our strategy over the last few years. This gives you an idea of the products that we make. We have currently 10 manufacturing plants. These are our key customers, both in the domestic market and in the global markets. We have been accredited not only by customers but also EcoVadis. I think currently the rating is gold. This is the previous rating of silver. On sustainability, we are quite strong. We have a gold certification from CII GreenCo as well, and we continuously win awards in these areas. Of course, acknowledgment from our customers is most important. This gives you an idea of some of the customer awards that we have won in recent years. Of course, these are some other awards both from customers as well as from the government and the industry body. Briefly speaking, the way the company is organized, we have two segments. One is car, truck, tractor wheels, construction wheels, then we have fabrications, hydraulic cylinders. For the windmill sector, we make both fabricated and machined parts as well as machining of large castings. The air suspension division is really around trucks and buses. A few other points. We are one of the largest manufacturers of wheels for construction equipment and agriculture tractors in the world, with about 20% market share in both. Our subsidiary, as I mentioned, is for steel wheels for light passenger vehicles. If you look at Q4, we had fairly strong growth, about 23% growth with INR 1,471.49 crores of sales and INR 400 crores of export. If I look at the full year, we have crossed INR 5,000 crores for the first time, about 16% growth compared to last year takes us to INR 5,124 crores with INR 1,342 crores of exports. This gives you some sense of the improvement, revenue improvement in Q4 was 23%, with a 45% improvement in PAT. A number of factors, if I can just comment briefly, a number of factors resulted in this performance in Q4 and also for the financial year, if you look at it, our, as I said, almost 16% improvement in sales and our PAT has improved by around 31%. A few factors to explain what has happened last year. Year of two halves, GST 2.0 turbocharged the domestic industry and almost all the segments, car, truck, tractor, even our suspension business, got a big boost from that. Fortunately, our exports have also been doing reasonably well, and that also saw growth. We actually had a lot of favorable tailwinds behind us last year. Added to that, fairly stable commodity prices and relative lowering of interest rates over the 12-month period. On the consolidated basis, if you look at it, both on the quarterly side, on the quarterly side for the first time, our consolidated PAT has exceeded INR 50 crores. We did INR 58.81 crores on INR 1,573 crores of sales. In the consolidation, let me just explain major elements that have consolidated to the standalone are subsidiary WIL Car Wheels, which is a passenger car steel wheel manufacturer supplying the Indian auto market, and also Axles India, which is an associate company which makes axle housings for the commercial vehicle segment. Really, if you look at the consol improvement over and above the Wheels India improvement, the other major change was the subsidiary which two years back was loss-making, turned around last year and showed a good improvement in the current year. On the segmental reporting, our Industrial Components division, while the growth in top line was 12%, the EBIT improvement was 91%, largely due to the fact that last year both the hydraulic cylinder and the fab division were loss-making, but in the fourth quarter of this year, both of them were positive. Basically, that's which resulted in a disproportionate increase in EBIT. On a consolidated basis for the year, if you look at it is more evenly scaled, but really the first quarter was strong in that area. In terms of CapEx, last year we basically spent about INR 261 crores towards CapEx, which is both in terms of investment towards the windmill business, aluminum business, and little bit of the off-road businesses, and some routine CapEx and cost savings totaling INR 261 crores. We expect in the current year it will be between INR 280 crores to INR 300 crores of CapEx. Our debt has been stable to declining. Our debt equity has improved. Debt to EBITDA has improved, and the free cash flows are reasonably strong, especially when you compare it to the COVID period and immediate post. Here are some metrics that give you an idea of how we've worked together. On a consolidated basis also, the free cash flows have been reasonably good. Our strategies and every time we make a presentation, it's essentially the same because we do believe we need to focus on strategy for at least five years before we look at reviewing it. We want to grow exports on wheels for construction equipment and agriculture tractors. We have made investments towards that. We are making progress, good progress on construction, started making progress on agriculture tractor wheel export. We've ramped up main investments. Last year it was ramping up machining of large castings for windmills, and that should fructify in terms of business this year. We also stepped up both capacity and volumes for fabricated structures for windmills, including the offshore windmills. Hydraulic cylinder business is a business that we will continue to look at growing. The aluminum wheel business is a business that we are ramping up. The bus air suspension is a business which has grown well last year and will continue to grow, and we will continue to invest there. Above and beyond that, actually what we have done reasonably well over the last few years is look at working capital management. We have substantially reduced our inventory and our debtors and have managed it in reasonable ways so that we enable free cash flows, which allow us to make the investments that are required for our growth. So largely, we have gone based on internal accruals, holding debt at around the same level and continuously work on cost optimization. As you can see, the results bear out in both the ROCE as well as the RONW. So that is briefly the presentation. I am open to any questions that any of you may have. Look forward to the interaction. Thank you very much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask questions may click on the raise hand option. You may also type in your text questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Please click on the raise hand option to ask questions at this time. The first question is from the line of Vivek Gautam from GS Investment. Please go ahead. Yeah. Hello. Mr. Gautam, I have. Yes, sir. Please proceed. Yeah. Basically, I wanted to know what happened to this company, such an old company, and sort of was out of the radar for quite some time. What have been the trigger and what is the story behind the recent improvement and the numbers? Are these numbers sustainable? Basically, a few background about the promoters also, because visibility about our company is slightly on the lower side somehow. Thank you. Sure. I'll first tackle the first part of the question, Mr. Gautam. The initial promoters of the company were the TVS Group. Following the family arrangement, the promoters are the TSF Group, but essentially we are from the erstwhile TVS Group. The shareholders, it's pretty much a promoter-managed company with active involvement in the management of the company. If you ask me what has happened in the recent past, basically post-COVID, we came out with a strategy as is there on the slide in front of you. We basically worked on free cash flows, and we identified certain areas that we believe that we can grow faster than the market, because these are areas which we are relatively small or relatively new in, and where we see the largest scope for growth. Otherwise, we are very much car, truck, tractor business, and we will only grow as much as the industry grows. So we wanted to identify some segments that we can grow faster than market, and that's how we came up with this strategy. Really what you are seeing over the last, I would say last 2 to 3 years, 2 years really, because it took us some time to come out of COVID. The last 2 years, consistently, we are sticking to our strategy. We have been fortunate also that fairly benign commodity prices over the last year. Despite all the chaos which is around, tariffs and all that stuff, we've been able to perform reasonably well. I hope that answers your question. Yeah. A few questions about these new second-generation promoters also taking more interest, Mr. Srivats Sriram, or sort of let it been this time. I have been in the company for more than 30 years, so I am hardly a newbie. But thank you. You are in the minority along with my mother, who does not classify me as middle-aged. I do appreciate that. But yeah, I have been in the business for 30 years, so very much part and parcel of the business. And I have been the Managing Director from maybe 15-odd years, so very much in the seat. But yes, we refocused our strategy, and that is probably the reason why we are doing well. And sir, any impact of Middle East crisis and rising commodities, crude prices, and also on the tariff impact the U.S. market and EU FTA filings positive for us, sir? Yeah. FTAs are too early to call. Vegetable prices, of course, we are like everybody else in India, we are affected. The effect is basically, one is fuel costs have gone up. Industrial fuel costs went up far ahead of what has happened for the citizens of the country. So we had increases even as far back as March. March, yes. We had fuel cost increase. Fuel availability was an issue. Fortunately, now it is only inflation that is an issue, not so much fuel cost. Aluminum, we were buying major quantities from the Middle East, so we had to re-source, and also aluminum prices have gone up. Basically all commodities, steel, aluminum. For us, steel, aluminum, paint, cutting tools, fuel, freight, and manpower. All the elements have gone up. Some of them, like material costs, are normally there is a pass-through with the customer. The others will be negotiated, but given the reasonably high inflationary level of some of the factors of production, there will be some amount of pass-through that will happen. Okay, sir. Sir, just a few word about the opportunity size before us and the expected growth rate in time to come, and our differentiators, if you can highlight. Because visibility also of our company needs to increase. Yeah. See, essentially, as I say, we manage the company based on the values, relationship, customer centricity, integrity, and whatever you do the best that you can. Essentially, this is what drives decision-making, and we are driven by our customers to make improvements We are just doing that and following the strategy. The opportunities were huge. Honestly, if we did not have West Asia crisis, I would have been more confident talking about projections and things like that. But currently, if you ask me, the visibility is about one month. Much as we do make budgets for our boards and things like that, the visibility right now is fairly low because of the continuously changing environment. We are really a derived demand with our demand coming from the automotive, truck, tractors, and construction segments. Apart from this We can't throw any numbers in terms of growth. All we can say is that we are on the same trajectory. We are a small boat in a big river, and it depends on how high the tide goes or how low the tide goes. So we will ride along with the economy as it happens. The opportunity is high. Over two to three years remains large, and expected growth rate can be 15%-20% over a longer time period, sir. So these crises are temporary. Hopefully, some solution will come. Yeah. I feel the effect of this may be there for a year at least. That's what at least experts are saying. But yeah, without that, if you look at it, supposing there is no West Asia crisis, we have a lot of opportunities just riding on the points which we have here in front of us. Just these segments alone, I think, will give us enough of growth opportunity where we can definitely do double-digit type of growth over successive years. If you look at it as a five-year period, yeah, definitely that's something that we will look at. Yeah. I believe, sir, you need to meet more companies, analysts, participate in the analyst conferences also, so that such a good company of us, visibility, unfortunately, in front of analysts is sort of low, sir. If you can, that would really help us. I appreciate it. I do recognize the fact that we are normally a bit low-key, but yes, your point is duly noted, sir. Thank you, sir. Thank you. Thank you. The next question is from Sudhir Kedia from ValueWise. Please go ahead. Mr. Kedia, I have unmuted your line. Please proceed. Sir, I would request you to kindly check your connectivity and rejoin the queue. We will move on to the next question from Sarveshwara Sharma Chawla, an individual investor. Please go ahead. Mr. Chawla, please proceed. Hello? Sorry, sir. You are not audible. We have lost him. Yes, sir. Please proceed. You are audible now. Sir, please unmute yourself and speak. Shiva, sir. Shiva, sir, please unmute yourself and speak. We can hear you, sir. Yeah. We are waiting for the investor to ask the question. I answered the question. Yeah. I thought you are continuing, sir. Sorry, sir. No. My another question is actually the seal kit is very critical part of a cylinder. Where from you are getting, sir? Are you manufacturing or outsourcing these components, sir? It varies, sir. Actually, we are not manufacturing seal kits. In some cases, we are buying from the authorized supplier for the OEM. The equipment manufacturer will specify the seal kit. In some cases, like where we are working with a Korean partner, we get the seal kits from them. Typically, it depends on the customer. The customer very often also specifies the seal kits. Thank you, sir. Thank you very much. Thank you. Thank you. We will take the next question from Sudhir Kedia from ValueWise. Please go ahead. Mr. Kedia, please unmute yourself and proceed, sir. Sorry, there was no response again. I would request the participants to also type in their text questions. In case you have any audio questions, please raise your hand. We will take the next question from Rohan Rantevi, an individual investor. Please go ahead. Hi, good afternoon. Thank you for taking my question. Am I audible? Yes, we can hear you. Yes. Please go ahead. Yeah. My question is around, you all have increased your stake in Axles India, where you all also have some synergies in the business. But at the same time, there is a reducing amount of debt on the Wheels India balance sheet. So what is the reason for, instead of reducing debt, using money to increase the stake in Axles? What is the capital allocation decision? I just wanted to know more about that and how the future value unlocking can happen for investors. Yeah. When Axles India was promoted by Wheels India, when it was started, there was capital from Wheels India, Sundaram Finance at that time, and then Eaton Corporation. These were the founding promoter companies. Of course, Eaton then became Dana, Sundaram Finance became TSF Investments. Wheels India took a reduced stake in Axles India because Wheels India got a joint venture partner who was not necessarily friendly to outside investments. That is the reason why our stake in Axles India came down. Subsequently, after COVID, we bought out our joint venture partner in Wheels India, and Axles India has now also subsequently bought out the joint venture partner. The idea was that if Wheels India can improve its stake, so we are looking at maybe something like 15%, maybe slightly higher, 20%-25% over a period of time. But yes, there are synergies between the companies, so it is not unreasonable to say that at some point or the other, there may be a way of making the companies closer together. Okay. I get it. Okay. Thank you. Thank you. One more question. You were guiding for double-digit EBITDA at some point in the future, but with the headwinds that you mentioned, do you still think it is a realistic number for maybe the next two years? Yeah. With headwinds, you have to put your head down and move forward. Yeah. I guess we will have to do that. But at the same time, we do feel that the strategy, actually, the double-digit part of it will happen from strategy and from businesses which are losing money to become positive. I think as and when that happens, I think we are probably two years away, one or two years away from double-digit EBITDA. I do not think it should take longer than that. Okay. Thank you so much. Thank you. All the best. Thank you, sir. The next question is from Rajkumar Vaidyanathan from Archian Invest. Please go ahead. Hi. Good afternoon, sir. Can you hear me? Yes, Rajkumar. Go ahead. Yeah. Thanks a lot for the opportunity. Sir, just few questions. The first one, just extending the question from the previous participant, you mentioned that you are looking at double-digit EBITDA. Currently, you are at about, I think, 8.5%, if I am correct. Yeah. Just short of 8% for the whole year. Yeah. That is a big leap, right? If you are looking at a double-digit number. You said you are looking at in next 2 years. Is that what you mentioned? Yeah. I think in the next couple of years, because it also depends on how the economy is affected by this West Asia crisis, how long it lasts, and all that. But yeah, barring that, 2 years is probably what it should take. Okay. So in other words, you are saying if volumes happen, then the operating leverage will help you to post better EBITDA numbers. Is that the Correct. My understanding correct? Correct. Okay. Got it, sir. This slide that you are showing on ROCE and RONW, that's a good slide, sir. So, and it's very interesting to see that you have already hit the return on net worth of more than 15%. I asked in the previous call Yes. You are mentioning in the slide that these are expected to improve. Can you give some more color as to how much you are expecting this to improve? Yeah. It is very difficult to call out a number, but I would look at our ROEs being 18+. I would look at our return on equity to be 15+. There has always been It is not like we are. No, no. It is not like we are working towards a target. We are working towards a target in terms of where we want the company to be, what we want the profitability to be. These are more byproducts. These are more ratios which are byproducts of that. But yeah, we are very close to what we would call a comfortable area. But there are headwinds, so we will have to do significant amount of work to fight the inflation in the current year. Also judging by the investor calls of our customers, who are also known to your community, they are not super positive about the immediate future. So we will also need to be slightly cautious, bearing in mind that we supply to them, so their forecast is more relevant to us. Okay. So you would expect to maintain this return of equity of almost. We already hit 15.5 in 2025, 2026. So you would probably kind of be in this level for a couple of years before you kind of improve further? We hope. God willing. A lot of it is dependent also on how the external factors play. Assuming nothing too adverse and assuming that the Indian economy continues to move at a reasonable rate of growth, I think that's a reasonable assumption. Okay. Got it, sir. And lastly, one housekeeping question, sir. in the cash flow, I see almost 26 crores of line item against provision for bad debts. We saw almost 2, 3 crores for the previous year. So any reason for the spike in the current year? I don't think so. It is not a provision for the bad debt, INR 26 crores, Mr. Rajkumar. Yeah. Can you just say it again? There is nothing like a provision of INR 26 crores for bad debt. In the cash flow, you see provision for inventory and doubtful debt 26.16. I am sorry. Okay. The inventory provisions are higher. Okay. Both is grouped together. Inventory provisions are higher because our company has adopted a more stringent rule for provisioning. As a consequence, the provisioning for inventory has been higher in this quarter, as well as for the whole year. Okay. See, Mr. Rajkumar, we have followed a principle where we look at, very similar to an ECL applied to inventory, where we currently have a policy where after three years the inventory is completely provided for. We now follow something where after six months, after one year, after one and a half years, there is a gradual phased provisioning. This is a policy that we kind of introduced in the third quarter of FY 2026, and that is what is reflecting in this. A lot of it will be like a one-time hit. Subsequently, as you convert that inventory into sale value, it will reflect in the profitability. It is a conservative view that we have taken in terms of inventory management, largely driven by the fact that we also want to improve our cash flows. To signal to the businesses that they need to control the inventory, we have introduced this provision. Okay. Got it, sir. Sir, I have one more question. Can I ask? Yes, please. Okay. The question is, we saw a significant rupee depreciation in this quarter. I just want to know how much upside we got due to that. On the steel prices also, it kind of increased in the last quarter. Any timing difference on that you would have held? You must have had a low-cost inventory. Is that helping you in terms of better margin in this quarter? Mr. Rajkumar, I only wish that is true. Unfortunately, the steel people are lot smarter than us, so they don't allow us to run up high inventories ahead of the increases. Yeah. We don't really get a benefit from that. By and large, yes, if there's a significant increase in steel price, normally there will be some impact in the immediate quarter. But we don't think that over the longer term we are able to get a complete pass-through on material cost. I don't think that's an issue. On the currency side, while you may get immediate benefit of any sudden devaluation of the rupee, there's also a process of sharing currency gains with customers over a longer term. There's a lag effect in terms of that. You don't actually get any sustainable advantage from devaluation. Okay. This quarter, since we saw a significant depreciation, we could perhaps assume that some margin upside we are seeing due to that as well? See, the devaluation of INR had an impact marginally on the overall profitability. We also import and we also have some forward covers because we don't know which direction the INR would go. It is not that entire devaluation would come as a bottom line hit. Okay. In the current quarter, we had a profit of about INR 4 crores as a net on the forex. Okay. For the whole year, it is about close to INR 10 crores as the forex gain. Okay. Got it. Yeah. Thank you so much, sir, and I am looking forward to Wheels India getting to EBITDA in the years to come. All the very best. Thank you for your patience, Mr. Ashwin. Thank you. The next question is from the line of Dev Mehta from Unique PMS. Please go ahead. Yes, sir. Am I audible? It is very feeble. Can you increase the volume, sir? Hello. Is it better now? Yeah, much better. Please go ahead. Yeah. I just wanted to check whether we have a non-core land bank with us. Yeah, we don't have a non-core land bank. Do we have a land bank which we are currently not occupying? Yes. But is there a plan to occupy it in the medium term? Yes. We don't have any spare land as to say that we have land that we don't know what we want to do with. There's nothing like this. Fair enough. We don't have any plans to monetize that, right? No. Okay. And sir, with respect to export, as a split of our total top line, what are we going to see in FY 2027 or FY 2028? Any direction on that? Yeah. Our exports, we expect will continue to grow. If you look at last year, it was 26% of our sales. Last year we had very strong domestic growth. So despite the strong domestic growth, we were able to grow export from 25% to 26%. I would say that there will be growth in FY 2027, but probably more growth in FY 2028. Okay. Fair enough. But it is very difficult because geopolitics and all that is happening, so our customers are affected by that. But as of now, it looks reasonably okay unless things deteriorate. Fair enough. Sir, if you can just quantify the acres of that non-core land and also maybe current market value per acre. I do not know the market value of the land, but the land is about 30 acres on the Chennai Bangalore highway. Okay. Got it. Thank you so much. Thank you. The next question is from Chetan Phalke from Tirzan Capital. Please go ahead. Yeah. Good afternoon, and thank you for the opportunity, sir. Sir, over the last three years, we have done CapEx in various divisions, like wind machining, even our number 2 plant and everything. So with this CapEx falling in place, what is the optimum revenue potential of the company? Let's assume what we utilize our existing assets to its fullest. Yeah, you need to make some incremental investments. But I think I answered this question in the last investor call. I do not recall exactly, but I think INR 6,000, INR 6,500 crores or so is what we said. But we will continue to invest. So I would probably say yeah, about INR 6,000 to INR 6,500 crores. Some of the areas like notably cast aluminum wheels, we need to add more equipment so that we maximize on certain things like paint plant and utilities and things like that. But yeah, I think something like that is clearly visible out of existing investments and existing plant. No new plant. That is no new site that we put in there. Okay. And sir, with respect to our expansion in global markets, our exports per se, a lot of these European or Japanese companies are looking for Indian partners or JV partners, either to enter India, manufacture from India, and then support their global operations or either help them manufacture globally as well. So any of such opportunities which are opening for us or what's happening on that front, if you think that- We are actually already in that. For example, if you take the windmill industry, most of our supplies go to European manufacturers who have module assemblies in India which are exported. We also supply to Europe directly. We as a matter of fact, do an assembly in Denmark to supply some of the customers there. So it is, especially for the windmill business, Europe is a big part of it. We have European customers also on the automotive side. So it is definitely something that is part of our strategy. And I do believe that we have some amount of alignment with some of those customers going forward as well. Mm-hmm. Okay. Because last year, I think we formed a German subsidiary. So I was just wondering if you can just help us understand what's happening there or what are the thoughts on that front. Yeah. So currently it is more sales, marketing, and support type of functions which are coming out of this hub. We also have a subsidiary in U.S., and U.S. also recently we are appointing a country manager, and we believe that by having a local presence, we can also generate more business. So that will be probably going forward the way we would be initially doing that. But there is pressure also to have, as they call it, India plus one manufacturing strategy. And we are contemplating whether it's possible to, in a cost-effective way, add capacity in those geographies. More to answer de-risking questions that the sourcing guys ask us. In some cases, we are collaborating with other manufacturers in other countries where we are each other's de-risking source. But in some cases, we may have to set up a CapEx at some point of time overseas. It is not part of the CapEx that I mentioned here, but at some point we may have to do that. If we do that, we will do it in a cost-effective way so that it makes financial sense for us. Okay. Sir, if you can talk about a bit on our cost controls or changes in cost structure going forward, any relocation of our manufacturing facilities from high-cost to low-cost locations or anything. Because most of the margin expansion from what I hear is going to come from the volume growth or revenue growth. But anything on the cost side that will also contribute to this margin expansion? Yeah. We are looking at consolidating number of plants. We have air suspension, sir. Air suspension. Volume. Yeah. So for example, in the air suspension business, we had two plants. We bought some land next to one of the existing plants and moved the second plant into this plant so that we get savings, otherwise we were paying rent in that facility. We are open and are looking at opportunities where we can move out of rented facilities into owned facilities. By and large, we will look at consolidation of plants to the extent possible. Unless there is a site which improves our cost structure and opportunities by being in that site. Either it is customer facing, so you get additional business because of it, and/or you get a cost saving in terms of freight cost by being there. Okay. Got it, sir. Thank you very much, sir. Wish you all the best. Thank you. Thank you. The next question is from Ankur Agrawal from RC Business House Private Limited. Please go ahead. Mr. Agrawal, please proceed. Hello. Yes, please go ahead. Yeah. Sir, as you said, double-digit margin within next two years. So what will be the top line in that time frame? How much Top line will depend on how the See, top line will depend on two things. One, it will depend on commodity prices because if the steel price and aluminum price goes up, our price also goes up, and that pushes up top line. Second thing is it depends on how the Indian economy grows. We have been very fortunate that, the last two years, we have had almost 7% plus growth in the Indian economy. A fairly strong growth in India vis-à-vis the rest of the world. Now, with this West Asia crisis, how much growth will actually happen this year in India and how will it be next year will actually determine how we grow. Because we are very much a derived demand. Our customers depend on the economy growing for them to grow. So we will grow as and when the economy grows. It is very difficult to put a timeline because I think even projections for India's growth, every month there is a different number which is being thrown up by the experts. Okay. And sir, your top-line growth for March quarter is 15%, but other expenses grown by 40%. Can you throw some light on it? Yeah. So other expenses growth is really, your other colleague, Rajkumar Vaidyanathan, had asked this question. We have actually made a very fairly aggressive provisioning on inventory, where we are doing a kind of phased inventory provisioning, where inventory which is more than six months, there is a certain amount of provision. More than one year provisioning is so much. More than one and a half years, more than two years. So we have a phased provisioning. It is more a one-time provisioning. It is not as if all this is bad inventory, but as and when those get converted, it will add to the profit of the company. But we want to actually drive inventory reduction within the company, and that is actually the reason why we have this aggressive inventory provision. That means the next quarter other expenses will not like that. Yeah. Yeah, please. See, I am Ramesh here. See, apart from this, there are other reasons for the other expenses increase, because from 1st January, CBAM was introduced in Europe. So one of our products which we export to Europe has a CBAM tax liability, which is provided, and it is grouped under other expenses. And the other thing is that we also have an assessment of the fixed assets, and some obsolescence has to be provided, which is again a one-time impact, which is also provided. He is talking about other expenses. So these are some of the major things. And we have also provided for certain warranty expenses for our windmill business in Europe. Some of these are one-off, and some of this could be coming in the subsequent quarters to a lesser extent. Like CBAM will continue because as and when we make exports to Europe, we have to make the provision for CBAM. Okay. Can you share the breakup industry-wise, how much your sale from personal vehicle and from commercial vehicle and tractor industry? Sure, we can do that. Would you like it for fourth quarter or you want for full year? Fourth quarter. Fourth quarter, CV is 22%, tractor is 16%, passenger car, if I include 11, 14%-15% is passenger car. Construction wheels is 17%, fabrication is about 14%, cylinders 5%, air suspension is 10%. Where do you see the growth from which industry more? It depends on which industry grows, because honestly, last year, even in the first half, we never expected industry to grow in the second half. The government intervened with GST 2.0 and suddenly everything took off. Even our customers now, if you look at Tatas or Mahindras who have both been in the news recently, they have been very guarded about the growth in the coming year. We will be kind of governed by what they do. As they grow, we will also grow. Thank you. That is all from my side. Thank you, sir. Thank you. We will take the next question from Shubham Jain from NV Alpha Fund. Please go ahead. Am I audible? Yes, Mr. Jain, go ahead. Thank you so much for the opportunity. I had two questions. My first question was on the windmill business, for which we have invested about INR 90 crores in terms of CapEx. Just wanted to understand how big can this business be for us in the next couple of years. What is the kind of tailwinds we are seeing in terms of outsourcing more to India in this piece of the business specifically? Yeah. There are two parts of it. If you look at the INR 90 crores investment, first of all, we have to understand, sir, that the investment made last year will come into play only this year. There is a lag because Yes the equipment are all fairly huge, as I mentioned even in the last meet. So it takes about 12 months really for the equipment to come, and with commissioning, maybe 12 to 15 months. So we do feel that in the machining side of the business, there is a lot of opportunity which is there. We are co-located with a large casting manufacturer. So we are working along with them, of course, with the windmill customers, but also looking at other segments which require such large machined castings. And we believe that company is currently doing about, say, 3,500 tons a month, and they believe that over a three to four-year period, they will go to 10,000 tons a month. It is a conversion business, so the profit is much better than the Wheels India profit profile, because it is on conversion. Sir, just a follow-up on this. Sorry, sales value will be less. Sales value will be less because it's conversion, not material. Understood. Sir, just a follow-up on this. The company that you mentioned, which they're co-located with, has done a massive expansion in December 2025. So like you mentioned, in this 3-4 year period, they will go to 3,500 to 10,000. Are we the sole supplier for the machining part of it? Let me say about 85%-90% is ours. Got it. Understood. We lost you. Please go ahead. Yes, sir. Sir, give me a moment, please. Let me check. Sir, I would request you to kindly rejoin the queue. Mr. Jain, please rejoin the queue. We take the next question from Chetan Phalke from Tirzan Capital. Please go ahead. Yeah. Thank you for the opportunity again, sir. Sir, you just mentioned that we have some excess land on Chennai-Bangalore highway. Though we do not have any plans to monetize it, I get that. But just one small query. Is it an urban land, and is it viable for manufacturing in future, if at all? No, it is. We are on a lot of rented premises. So the long-term plan is to reduce our engagement in rented facilities and move into our own facility and consolidate operations from a number of different sites to one site, so that we get both scale and efficiencies. So that is kind of what that land parcel is kind of earmarked for. We are not planning to do it this year, and even if it happens, it will happen in a phased manner as there are ongoing sites that have to be relocated here. Okay. This will be more for internal adjustment for internal usage Yes on this particular land parcel. Right. Okay. And sir, I think amongst our many manufacturing locations, the Chennai Padi location, from what I understand, is a pretty older, high-cost location. Any plans over there for relocation of that facility? Not at the moment. Okay, sir. Sure. That is it from my end, sir. Thank you. Thank you. Thank you. Sir, can we take one more last question for today? No, definitely. Okay. Ladies and gentlemen, this will be the last question for today from Rajkumar Vaidyanathan from RKNL. Please go ahead. Yes, sir, can you hear me? Yes, Rajkumar. Go ahead. Yes, sir, thanks for the follow-up, sir. Just two questions. I just want to know what is the CapEx plan for FY 2026, 2027, and what is the guidance on the finance cost? These two numbers. On the finance cost as in interest rate or what? Ramesh can take it. Absolutely. I think your finances are almost straight line compared to last year. It is more or less same number. Two things. One is the CapEx approved for the board is about 280 crores at the moment. On the finance cost, maybe Ramesh you can answer, but one of the things is it will also depend on what happens to the RBI interest cost. They have not made any change at the moment. Given the inflation, we have to see what happens. That is just a caution on the interest cost. But Ramesh, you can go ahead and answer. Thanks. See, the recent interest cost is around 26, 27 crores a quarter, totaling about 110 crores for the whole year. Our operations are expanding, and we are able to hold the interest cost broadly at the same level, which has an inflation of about less than 2%. But if you see the recent news, there is a lot of people who say that on the June 4 meeting, MPC meeting, there could be a repo rate increase. If there is a repo rate increase, then probably to that extent it will have an impact. At least I do not see that as a major impact, but it could marginally kind of push up our interest cost from the present level of 110 crores. It could marginally go up. Okay. No, but it is nice to see that the finance cost is kind of remaining steady state despite good increase in your turnover. Is it due to better working capital management, or what is driving this? Yeah, we have reduced all elements. We have reduced the inventory, I think, from 76 to 56. Yeah. Of course. Just one second, Mr. Rajkumar. Let me give you actually correct numbers. So we have reduced our inventory from 76 days to 63 days. We have reduced our debtor days from 61 to 54, and the creditor days are pretty much the same. Okay. Yeah. That explains. Yeah. It is really nice to see all the cylinders are firing, sir. Very nice. Thank you. I think good fortune, God's graces, little bit of luck. Okay, sir. It is all the best for the next year, sir. Thank you, Rajkumar Vaidyanathan. Thank you. Thank you, sir. Sir, we have few text questions. I will just read out them. You can quickly answer them as well. We will take two to three text questions. The first question is from Ajit Dada from Nisar Enterprises, and the question is: Considering good cash flows and multiple tailwinds in the industry like GST 2.0, are we considering any inorganic or organic expansion in our business? Yeah. Organic expansion is the CapEx that we are doing. On the inorganic expansion, not immediately, but I did mention that if we are looking at an overseas location in the medium term, we would either look at greenfield or we would be open to brownfield as well, which would be acquisition. Thank you, sir. It is not in the immediate term. Sorry. Please proceed. Yeah. Oh, you go ahead. I am done. Sure, sir. Thank you. We will be taking the next question from Nishit Khatri from Aureus Capital, and the question is: what is our current capacity in steel and aluminum wheels, and what can be the capacity going forward? It varies from segment to segment. Let me give you a sense of the way we count it. If we take passenger car steel wheels between us and our subsidiary, if I look at it combined, I think Wheels India has got a capacity of about 4 million, and the subsidiary has got a capacity of about 7. So about 11 to 12 million is the capacity. We are adding capacity in the subsidiary, so it will go to maybe 13.5 to 14 million. So there is some expansion there. We are trying to also add capacity in a way where it is flexible to make multiple products because we do not know which industry will go up, which industry will come down. To that degree, I think even on the tractor sector, if you take the tractor industry, if you count it in terms of the larger wheels as opposed to the smaller wheels, we have a capacity of lakh 50,000 a month, and we will probably increase that by maybe 10%-15%, but largely through productivity improvements and things like that. Commercial vehicle space, if you look at it, we have a capacity, including the light commercial vehicle, if you look at it, we have about 250,000 capacity, and we will probably look at increasing that to 300,000 capacity. In aluminum wheels, we currently have a capacity of about 42,000 per month. We are increasing it almost in a few months, we are increasing it to 60, and then by half year, we will increase it to 80, and we are contemplating whether we need to increase it to 100 or 120 in the next year. Broadly, on construction wheels, we have a capacity on the medium to heavy duty, we have a capacity of about 16,000 wheels. We will not really add capacity, but just do productivity improvement. In the light construction wheels, we have a capacity of about 25,000 to 30,000, depending on the mix. This broadly covers our capacity. Thank you, sir, for answering all the questions. Ladies and gentlemen, as that was the last question for today, I would now like to hand the conference back to the management for closing comments. Sankalp, over to you, sir. Thank you all for joining the call. We have personally learned a lot through our interactions with you, and it is something that we look forward to. Of course, this time we had good results, so it made for a decent interaction. But we always look forward to feedback from investors who can probably guide us and highlight areas for improvement that we haven't thought of already. We are fairly consistent in the way that we work, and we will continue to make investments so that we can grow our company, at the same time, work on our core competencies to see how we can take it forward on the constant strategy that we have spread in front of us. Thank you very much, and look forward to our continued interactions. Thank you. Thank you, sir. Thank you, members of the management. On behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us, and you may exit the meeting now. Thank you. Thank you.