Happy Forgings Limited (HAPPYFORGE) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Happy Four Things Limited Q1FA27 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on the date of this call. These statements do not guarantee the future performance of the company and it may involve risk and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the lesson-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star than zero on a touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ashish Garg, Managing Director from Happy Fortunes Limited. Thank you, and over to you, sir.

Thank you. Good morning, and a very warm welcome to all of you to Happy Fortunes Limited Q1 F527 Earnings Call. With me today are Mr. Pankaj Kumar Goyal, our CFO, and Strategic Growth Advisors, our Investor Relations Advisor. I trust everyone has an opportunity to view our F527.1 financial statements and investor presentation, which we have filed with stock exchanges. We started F527 on a strong note, delivering robust year-on-year growth along with improved profitability. Revenue for the quarter reached 4.49 crores, while that stood at 91 crores, marking our highest ever quarterly revenue and profitability, with growth of 27% and 59.2% respectively. Finished goods volumes increased by 23% during the quarter, while realizations per kg improved by 3.2% to Rs. 253 per kg. Strong volume growth coupled with higher realizations understood the strength of our business model, disciplined execution, and continued focus on value-added growth. On the profitability front, we continued to deliver industry-leading margin. EBITDA for the quarter stood at 141 crores, and EBITDA margin expanded by 275 basis points year-on-year to 31.3%. This marks the fourth collective quarter in which we have delivered a data margin in excess of 30%, fat margin also expanded by 128 basis points to 20.4%. As communicated during our previous earnings fall, we had witnessed an increase in input costs, and we were engaged in discussions with our customers regarding inflationary pressures on other manufacturing costs. We have now successfully negotiated price decisions with OEMs and benefits. These regions are expected to fully reflect our PNL from quarter to onwards. Our capacity expansion program also continues to progress as planned and remains aligned with the strong opportunities we see across our focus segment. These investments will support our future growth while further strengthening our value-added capabilities. Now, turning to our segmental performance, commercial vehicles continue to be our largest business segment, contributing 33% of our revenues during quarter 1 FI27. The segment delivered healthy single-digit growth during the quarter, with a domestic business resistance, strong growth of around 18%, supported by robust infrastructure activity, healthy freight movement, replacement demand, and sustained transportation activity. On the export front, growth was impacted by transit delays due to geopolitical conditions, resulting in higher inventory in transit and lower sales conversion during the quarter. Farm equipment was our second largest revenue contributor during FI 27, during FI 27, accounted for 32% of our total revenue. We delivered growth in mid-20s during the quarter, with a domestic business registering over 20% growth. Supported by peripheral demand in the domestic farm equipment market. On the exports front, we continue to register both despite a challenging demand environment in the U.S. and Europe. Tractor demand in these markets remains subdued due to lower farm incomes, high interest rates, weak commodity prices, and a first-est form of spending resulting in deferred equipment purchases. The industrial segments contributed 16% of our revenue during the quarter. We achieved around 50% growth across both domestic and export segments. Demand remained healthy across power generations, renewable energy, including wind, railways, oil and gas, and digital infrastructure. The broader capital goods and industrial ecosystem also remained robust, supported by sustained investments from both the government and the private sector. Continued investments in renewable energy, power transmission and grid infrastructure, railway modernization, and the rapid expanding data center ecosystems are expected to support demand move forward. Of Fiverr contributed 11% to our revenue, the segment delivered growth of over 40% across both domestic and export segments. From an end-user perspective, the domestic construction equipment supply existed growth of almost 9% during the product. Supported by a healthy project awards, particularly across roads, highway, and other infrastructure segments. Exposed markets in the US and Europe also witnessed growth in construction equipment demand. Passenger vehicles now contributes around 8% to our revenue. The segment delivered growth of more than 70% with domestic business growing by over 50%, supported by a healthy market demand and increased wallet share. Most OEMs reported strong performance while retail demand remained healthy, reflecting the underlying strength of the market. On the export, funds revenue more than doubled as we began executing export orders that had been secured earlier. Our continued focus on value addition is also reflected in our product mix. Machining contributed increased to 90% in Q1 FY27 compared with 88% in Q1 FY26. Furthermore, one of the key strategic developments for our business has been the continual diversity pressure of our revenue mix as reflected in the increasing contribution from industrial and passenger vehicles. We expect this diversity pressure to gain further momentum, supported by a strong order book representing around 950 crores of peak incremental annual revenue potential for the next 2-3 years. This order book is largely driven by industrial and passenger vehicles programs and is predominantly export-oriented. At the same time, the quality of our audible continues to improve with high proportion of complex precision yield, value-added products that command severe realizations and are expected to support further margin improvement while creating a more balanced and resilient business portfolio over the media graph. Looking ahead, supported by our strong first quarter performance, we remain optimistic about our outlook for FF27. We continue to expect the business to deliver high team volume growth during the year while maintaining EBITDA margins broadly in line with FF26 levels with potential for further improvement. With that, I would now like to invite our CFO, Mr. Pankaj Marvold, to take you through the detailed financial performance for the quarter.

Good morning, everyone. I hope I am audible to everyone.

Let me now take you through the key financials and operational highlights for the first part of 5.27. Revenue from operation 51, 5.27 is for the 4.49 growth, resisting strong YOY growth of 27%. And the operational fund, we recorded robust volume growth of 23.1% during the quarter, but in relation improved by 3.2% YOY. Growth profit for the quarter stood at 273 crore, resisting value-wide growth of 43.1%. Growth margin remains early at 60.7%, expanding by 276 basis points. A beta for Q1 FY27 stood at 141 crore, resisting value-wide growth of 39.3%. A beta margin improved to 31.3%, expanding by approximately 275 basis points. It's quoted by operational leverages and our country is focused on operational efficiencies. Profit output export at 91 growth, correct to 1, pre-presenting YOY growth of 39.2%, fat margins remain strong at 24%, trending by approximately 180 basis points. We also added capacity during the quarter by commissioning another 4,000 ton of charging capacity. I think 4,000 nitri tonneau for green capacity. It is 7200 meter ton of additional machining capacity has been added during the call. Our total forging of capacity now stands at 1,56,000 meter ton. The capacity has increased to 75,200 meter ton. The capacity utilization stood at 59% for posing and 78% for machining. With that, we are ready to commence the Q&A session. I will turn back the moderator to invite the first question. Thank you.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Pankaj Debrawal from Ikigai Asset Managers. Please go ahead.

Yeah, good morning, Ashiji and team, and congratulations on good set-off results. My question is that, you know, we see a renewed, you know, growth which was missing for some time, and happy coming back to the trajectory of last five-year, ten-year Kegar. Can you just help us understand from here on? How and what are the things we are doing from a growth front across various parts like industrial, export, passenger vehicles, which makes us confident that the next two, three years growth trajectory could be intact. And when I look at all the auto-end companies across the country, you have the highest gross margins, highest EBITDA margins. On one hand, it's good, but it makes us a little nervous that can that come down. So can you just...

Good, good. Thank you, Samprish.

So, on the business side, I can say that all the sectors are doing well. You know, you have been seeing the numbers coming from commercial vehicles, farm equipment, passenger vehicles, all are looking strong right now. And even on the export side, we are seeing a pickup in demand. At the same time, all the initiatives taken by company in the last two, three years with regards to diversification, going into industrials, going into passenger vehicles is also playing out really well, which is supporting the overall business. Despite of subdued demand in some of the areas, you know, we were able to perform on the back of very strong growth coming from some of the areas, some of the developments which we have already taken. The strong order books, you know, of almost 950 crores of additional incremental businesses, which is there, is already in the pipeline, already in the development phase of ramp-up phase, which gives us a strong confidence that growth will continue. So, that is there, and the diversification model, you know, from, you know, lightweighting, which was also introduced, and towards the heavy range, from 250 kg to 3 tons, will, is, you know, coming out well, and the caps is on screen, that will also start contributing from third or fourth quarter of next financial year, and we are very hopeful that the new stream of business will start contributing meaningfully from F.29 onwards. So, overall, things are positive. In terms of our gross margin and beta margin, both the new sectors where the growth is coming up are actually high in terms of realization. The products are complex, the requirements are far more stringent, and there is a lot of value addition which is being done in-house. Which is leading to higher gross margin because of the requirements in the products. Also, the export products for the past cars that we are machining and supplying are also high in terms of its gross margin requirements. So, we were also able to, you know, take the increases from our customers in the last quarter. The last increase was paid almost three years back. So the increases have also happened from the last base, which will also help us,

you know, in keeping up the margins going forward as well. Thank you.

Thank you. The next question is from the line of Arjun Khanna from Court of Mutual Funds. Please go ahead.

Thank you for taking my question, and congratulations on a great set of numbers. So the first query is regarding the realizations. Sir, you did allude to in your opening remarks that the settlement has been done. So the benefit would come in from the second quarter onwards. Is that the right way of understanding the opening comment, sir?

Thank you, Arjun. So, part of it has come in Q1. I can say that almost 30% of that has come in the Q1. So, if we say our export business and domestic business, on the export business, the cost increases have been supported by the currency gains. Because many of our export projects, the currency is not passed through. So, we are kind of contributed that the currency gain also supported over there. But, you know, the 100 odd crores of the domestic business, I can say over there, you know, roughly, we were able to take on only 2% increases in the first quarter, but roughly more than 4.5-5% has been kind of taken. So, some OEMs they have passed on from P2 onwards. So, you can say that the full impact is not there in the Q1, and, you know, it starts from Q2 onwards, and this increases have been passed on from the last base, which was settled three years back. So, it is not the increase which is coming up only for, you know, one quarter or so. So, it is going to be permanent.

Perfect. Very helpful, sir. Sir, the second query was regarding, and you have mentioned this in the result presentation also regarding our captive solar power project. We have mentioned it should start, it's on track and should contribute from FY28. We were anticipating that it would come at the end of this calendar year, so possibly we would see some benefit in the fourth quarter?

Yes, you're right. We are hopeful that the project will be on stream from January onwards, and last part of the CAPEX is already done. And so, all the clearances have been obtained. Just some work on ROW right-of-way is going on. Once the ROW work is completed, we'll be in a position to power up. So, I think January is the time. Normally, Q4, Jan, Feb, March is, you know, normally in terms of, you know, it's a colder winter months in North. So, we have a different experience. Some bit of it, the power generation will start coming in from Q4 onwards.

Sure. And you did, just a final question, you did allude to the newer businesses which we are scaling up FI29 onwards. So if we look at the trajectory of it, it's seemingly a higher margin profile business. So given the outlook we have for FI27 benefits, say, from solar, et cetera, coming 28 onwards, so our EBITDA margin, you do believe at current we should be able to protect this 30% plus going forward?

Yes, I'm very confident that we should be achieving that because we will be having a benefit of 1-1.5% from power as well. So, I'm quite confident that, you know, we should be seeing up on that 50% better for me.

Sure. Thank you for this, and wish you all the best going ahead. Thank you, sir.

Thank you. The next question is from the line of Mihir Vora from Equiris Securities Private Limiter. Please go ahead.

Yeah, thanks for taking my question. So, sir, my question was on the quarterly number which we reported. Now, when we see the segment-wise growth, the TV segment in terms of our revenue number grew only around 7% while the industry volumes were up around double digit. So, what was the thinking? Did we shift some of our lines to, you know, higher content products in terms of industrial off-highway and like some understanding here that why did we grow less than the industry here?

Yes. So, thank you, Mahir.

So, the industry volumes of commercial vehicle in terms of production for domestic grew at almost 10 percent for the production volume of GPC. And over there, we have grown at almost 18 percent in domestic market. It was in the export market that, for us, the business de-grew by almost 12% because most of our European contracts and the contracts for Turkey are on the basis of the DDP basis, delivered the duty trade to the plant. And because of the geopolitical condition, as already explained, almost a month of deliveries were pending because of the longer route and also because of the delays in transit.

All right. Okay, so this is more of export-led right now.

And, sir, currently, given we are talking about exports, so what kind of issues are we facing on the freight right now as there has been some cost increase in containers availability issue? So how do we see this issue going ahead? Like, how are we managing it? Yeah, you're right. The cost of, you know, container has gone up roughly from $2,000 to almost $6,000. And a large part of it, the contract that we have, it's kind of a pass-through or it is around 75% pass-through. So, we will be taking around roughly around 15-20% hit in terms of the incremental cost which is there. But we are also in terms of what we are discussing right now. But, you know, roughly if it is 6,000, we are hopeful to recover around 4,500 from our customers. And for some customers, we also have full recovery as well.

Okay, okay.

And then lastly, just like overall on to the business, can you be able to give you the export mix across and in, like in commercial vehicle farm or in the States?

Yes, let us give me a minute.

The next question is from the line of Senthil Kumar from Joe Indra Capital Services Limited. Please go ahead.

Good morning, sir. Am I Oliver?

Yes.

Yeah, thank you. I just have two questions. First, I just want to know this 14,000 term price, now how it is progressing, now what kind of revenue potential we can expect from that 14,000 price, any sector related order for that particular 14,000 price? So, 14,000-ton press line is almost 65-70% utilized on the industrial business and on the commercial vehicle businesses. We still have some capacity available for which we have already received the orders and the order books are already there, which will be progressing well going forward as well. Plus, we have also added 10,000-ton press line, which was also added in the last quarter. So, some parts which we were doing on 14,000 tonneur line can be shifted to 10,000 tonneur line to create more capacity on the heavy line. So, if we shift those components, we should be looking at a bigger capacity going forward as well, around 30% open capacity, you can see. And for the new projects that we are getting in hand, we will be utilizing this pattern. Okay, and secondly, when can we expect this 18,000 vesicle accessor light to be an operation by 27? Yes, we'll probably start adding from Q4 of this financial year. It is already under commissioning right now, and our trials will start from Q3 onwards. And lastly, I just want to know any change is facing in the working capital cycle. I'm just asking in terms of data as on June 2020. Can you repeat your question once again? No, I just want to know this data date, that's on June 2026. No, I just want to know whether we have any changes or what happens like that. The receiver world is not really. There is no big change. It has been improved, in fact. There is no big change.

Okay, thanks.

Inventory has gone down. So, overall, there is an improvement in the working up-to-days.

So, what is the inventory date, number of days?

As of June, 2022? Inventory date. 50 days as on day.

Thank you.

Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. The next question is from the line of Krisha Kansara from Molecule Ventures. Please go ahead.

Yeah, hi. Am I audible?

Yes.

Yeah, thank you. So, sir, firstly, congratulations on a very good set of numbers. My question is that in one of the previous calls, when our order book was around 800 crores, you had provided a detailed... Order book breakup between different end-user industries. So, would you please help us bifurcate the current 950 crore order book in a similar manner? I understand your point that, you know, the order book is dominated by PV and industrials and specifically exports. But if you can break this entire 950 crore order book in terms of each end-user industry, that would be helpful.

Okay. Thank you. So, we have almost 35 to 40% of the revenues

planned from the industrial segment.

We have the order booked from industrial, you can say around 40%. Ascar is in the range of 25 to 30%. Commercial vehicles is again in the range of 25 to 30%. And there are, you can say, others, you know, where we have off-byway and some farm businesses. And roughly 60% of this order book comes from its groups, and 40% is domestic.

Understood. Thank you. And, sir, another question on our 650 crore CAPEX program. So, I wanted to understand the standalone plant level gross and EBITDA margins. I understand on a blended or consolidated level we will benefit from solar power plant, etc. But my question is, More on the gross and operating level margins solely for this new plant, which is focused on industrial segment.

No, we are not actually making plant-level,

you know, margins as such. But, you know, particularly for the new tapets, which is planned, the realizations are high, and the gross margins are in a range of, you know, kind of 80%. On a full-machined component, basically, supply 80-85% on a full-machined print shelf. On the forged crankshafts coming out of the, you know, line, it will be around, you know, 65 percent kind of a gross margin, 60-65 percent. So, that's kind of a, you know, margin profile on the high horsepower category that we are talking about. And, you know, roughly around 50 percent of the margins translates into beta margin. You can assume that the, you know, margin profile for the new day.

Okay, understood. That was helpful, sir. Just one last question, if I can. So, currently, what percentage of our export revenue is contributed by Europe? And, you know, with the European OEMs looking to kind of outsource a certain part of their production to countries like India, have you seen any increased inflow of orders in the recent times from European region?

Yes, on the European region, we are putting a lot of projects, a lot of large projects that is, you know, that we are seeing right now. But, you know, the majority takes time because they also have a supply base in Europe. And it is taking some time. But yes, the inquiry flow is very strong right now. And today Europe accounts for around 60% of our exports.

Okay, understood. Thank you so much, sir. All the best.

Thank you. The next question is from the line of Pankaj Devriwal from Ikigai Asset Manager. Please go ahead.

Yeah, thank you for the opportunity for a follow-up. Just two questions, Ashiji, when you look at the company, in every five-year block, you make a pivot. And this time the pivot looks like exports and PV. Can you just spell out your thought process that over the next 3-4 year period, how large export opportunity could be for us across industrials and autos? And also on the passenger vehicles, it's great to see that you have moved to 7-8% kind in the mix. Where do you think with the visibility being there in the next 3 years, passenger vehicles could also move into? And also, is there any other areas where you are working on? Which could be more structural in nature, maybe the semiconductor part, maybe the aerospace, which requires high tonnage forging, or any other places, because what we hear from other manufacturers is Europe is having a tough time in terms of their supplier base. So, that large part of the business could move here. So, just a broad thought process that in the next three years, how the shape and size of the company will look like will be really helpful in terms of export opportunity and PV particularly. Thank you.

Thank you, Pankaji.

So, we are very bullish on the industrial side. The heavy line of equipment that we are investing on is one of its high in the world. It's the second largest in the world, and the entire demand which we are seeing around energy sector and data center, this line will be playing a major role over there. And the capacities are not available globally because the implementation of the landscape of one and a half years just to come into production from the date the LC is open. So it's a very long period. It's a very large construction that we have done. On the base levels, we have gone down by 80 feet to construct the foundation of this. So, the execution has taken almost one and a half years just to prepare its foundation. So, the demand, we are talking about producing parts. Currently, we produce up to 200 kg. We are looking at producing parts up to 3 tons. And some parts that we are putting on the new projects are worth 28 lakhs, 30 lakhs per fee, which is almost 1.8 tons in weight. And this is largely coming out of the energy sector. So we see that, you know, the data center and energy sector will be a large part of the industrial that we will be catering to once this line is operational. Apart from that, on the heavy side, all other areas for the wind gearboxes, which requires heavy porging, defense, which requires heavy porging, all other options are available. But right now, the focus area is energy and data center for us as we are seeing a lot of inquiry flow over there and also on the machining side we are investing. So, we can simply say that, you know, industrials will grow from these levels, will double from these levels in the next 50 to 4 years. Also, the PV, we should be looking at 12 to 15% of our revenues. Both the sectors put together should be contributing around 45-50% to our revenues. That's how we see the business kind of changing. But within industries, there are a lot of new industries that we will be catering on. We are putting a lot of parts on the very heavy requirements for the earth moving sector and mining sector for North American market, which is over one ton. So there is a lot of different mix that we will be seeing. Also, playing with a lot of different types of skill grades, you know, that is what we are seeing now.

Thank you for that detailed answer. And all this growth which you are targeting, your cash flows are super good. Talent sheet is in a great shape. So I would assume that most of the growth which you are planning for the next three years will be funded by internal growth. Is this a rare assumption to make?

As of now, it looks like that we should be able to fund this growth on our own. Cash flows look very strong, and the accruals will be even stronger going forward. Yes, we are also, maybe there is some bridge loan for a year or so for opening up some letter of credit, but most of this will be funded from our unit.

And just last one, any inorganic plans in this entire... Growth plan over the next three years where you think there are areas of pockets of opportunity which you can't gain organically and an inorganic will be a faster way to go to market. Any thoughts on that side or you think organically?

Yes. So we are... We're quite open for this and searching for it, especially on the energy and aerospace side, where we are new in entering, and also the technology and approval process takes a lot of time. So we are open for that and are seeing the opportunity in that sector. But on the farm, CV, and other areas, we are already there, and plus the valuations are very expensive. It should be a drain on the return on capital employees. So we are being a little cautious on that, you know, on the simpler businesses, but wherever we see that there's a technology involved, we are quite looking for it.

Okay. That's great. Wish you all the best and looking forward for great quarters. Thank you so much.

Thank you, sir. Thank you. Participants who wish to ask questions may press star and one at this time. The next question is from the line of Taksh Prashar from Desvelado Research. Please go ahead.

No, you are not. Your voice is correct.

Can you come again? Just a second.

All right, we're going to come.

Mr. Prashar, may we request you use a microphone to ask a question?

Yeah, please go ahead with your question.

Yeah, sir. So my question was on the follow-up on the industrials. As the industrials have increased 16% this quarter, and we are working towards a medium-term target of 30 to 31%, which sub-segments do you see as the three drivers?

So just answered Pankaji's question as well that, you know, data center, energy, mining, and wind are the sectors where the requirement for heavy forgings will be is already there. And all the sectors are also doing really well. To look at energy data centers, the growth is phenomenal. And, you know, it's not that easy to build capacity overnight for this type of businesses. And it's the initiative that we started almost two and a half years back, just after the company, you know, went public. So it's the building, it's a complete plant, which is getting ready at a site. And these are the sectors which, you know, company will be getting to going for from this plant.

And sir, your volume growth this quarter was also very good. I'm... Well ahead of your earlier guidance.

Given this strong demand, should we expect any upward revision on this?

So right now, for the guidance perspective,

you know, I have taken this, but should be performing better than that. Thank you. Thank you.

The next question is from the line of Chai Shah from Genuity Capital. Please go ahead.

Hi, can you hear me?

Yes.

Good morning, Atis and team, and congratulations from a great set of numbers. So, Atis, my question is a little bit strategic. If you see, you know, the last few years, we have been on a heavy capex journey. And because casting, forging, you know, it's an industry that takes time for things to come on stream. So as we go higher, you know, in terms of CAPEX towards end of FY27, starting FY28 is when majority of the CAPEX. Comes on stream. But, you know, on your end sector side, especially, you know, past passenger vehicles, where you said that you may plan to go up to 10-12% of the market. Do you think that the base, the benign base that was helping the industry and hence you would become a challenge also going ahead? With industrials, I agree with you, because there is a lot of tailwinds, but especially in automobiles, you know, the post-GHD cut and the last two years that we've seen, you know, the base is starting to become heavier. And even for happy forging, if you see year on year, Q1, F526 was probably the softest quarter. So, and now going ahead, you will be lapping around the strongest quarters that you had posted last year. So how do you see Happy Forgings going ahead, especially in terms of, you know, asset turns, because probably by start of FY28, our asset turns will be at a trough, and then it will be all the way upwards. But, you know, the end sectors would probably themselves be at a very high base.

So, you know, we companies on a capex fee where, you know, we are investing 350 to 400 crore, you know, on an annualized basis. And see, I'm not worried about the temporary, you know, six months or one year kind of a new asset term because these are the assets which are built for the future. And, you know, the type of, you know, business that we are looking at producing for this, you know, it's a temporary six-month scenario. We are looking at a slightly lesser chance, you know, because on the coaching side, we will be adding a bulk of capacity whenever we are adding. And when we are seeing a higher set of growth, you know, this capacity is helping us to grow, actually. So, you know, if we have a capacity in place, then only we can, as you know, assure or look forward for this. Even on the PASCAR side, if we are growing today, it's because of the capacity which is planned. And because the growth is coming, our products are approved. We are competitive in the market. And at the same time, we are able to ramp up fast. So all these things are kind of helping us out to grow this PASCAR business. And it is the business is coming largely, currently coming out of two, three customers. So there is a lot of potential for us to grow this business going forward because the customer acquisition has just started.

It's not, you know, finished with these three customers.

Okay, okay, understood.

And on the industrial side, you don't think there is going to be a heavy base or something that's going to affect you because the tailwinds are much stronger even in the passenger vehicle sector, right?

The industrial is a very large sector because there are many industries within it. We call it as industrial because data center energy, you know, you will see some companies in business only in energy today. And then the data center requirement and the mining, wind. So all these sectors are very large in nature, which comes under industrials. With the new line of business coming in, all the doors are open to produce city components. So that is the reason all this industry will actually play a role going forward in the years to come.

Okay. I'm just picking your brains on the acquisition that you mentioned that you are looking actively. So, when it comes to acquisition, are you looking at speed to market kind of an acquisition or someone who can give you certification approvals because assuming that, you know, you have a great skill at machining already, and which is what a lot of aerospace components do need. So, what would be the nature of that acquisition, if you could?

We are open for acquisition, we are open for joint

ventures as well, and a

company is in a phase to acquire technology and produce, but some of the, you know, steel, like titanium and other grades which are being used on the aerospace, my experience is not there today. And sometimes that we are trying to acquire, it's not only this, it's more a lot of metallurgy and chemistry, which will, you know, probably help us. So, the way to look at it is that, you know, we should be seeing something that we are not doing today on the energy side or on the aerospace side, which can be probably of support with the existing business. Or where, you know, it's a machining business where the forgings can be done by us, machining can be done over there, or it's side of a synergy brick.

Got it. Got it. Okay. Thank you for one step forward from Mindset. All the best for the future.

Thank you. Thank you. Ladies and gentlemen, that was the last question for the day. And now I hand the conference over to Mr. Ashishkar for closing comments.

Thank you.

To conclude, we are confident that our investments in innovation, capacity, and customer partnerships will drive sustained growth and value creation. With this, I would like to thank everyone for joining on the call. I hope you've been able to address all your queries. For any other further information, finally get in touch with strategic growth advisors, our investor relations team.

Thank you. Thank you. On behalf of Happy Forgings Limited, that concludes this conference. Thank you for joining us and you may now disconnect the lines.