Harsha Engineers International Limited (HARSHA) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Harsha Engineers International Limited conference call. 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. Should you need assistance during the conference call, please signal an operator by pressing star and then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Vishal Rangwala, CEO of the company. Thank you, and over to you, Mr. Vishal Rangwala.

Thank you. Hello. Good afternoon. Welcome, all of you, to our Quarter 4 FY26 post-result update call. As per the normal practice, I'll ask our CFO, Mr. Maulik, who will take us through a detail, key numbers for the result. However, I'm assuming most of you would have had a chance to go through this. And, you know, at the outset, before I talk about, you know, the results and everything, I just want to kind of quickly summarize, you know, talk about what we are as a company and, you know, what we do. So we are primarily an engineering company with a big focus on a segment called bearing cages, where we are a very unique player within the market with having, you know, competency in steel, brass, and polyamide products within bearing cages and a very unique position globally, Having all these competency and precision level catering to, you know, very good quality bearing companies and their needs for bearing cages. And that's our primary business. And beyond that, you know, we have worked over multiple years with big global bearing companies to outsource and supply them this product globally. And we have earned a very strong market position within India and across the globe as well. So... You know, that being the primary product, beyond that, we also operate in the sub-segment of stamping components using our core competency, and we also have a bushing as another product portfolio, where both those segments we are growing very well and plan to grow further. And we cater to a variety of industry through those segments, including renewable, as well as automotive, consumer goods, and other industries. And we are trying to grow, you know, business. We actually operate three facilities in India. Third one we just commissioned this year in Baila. And two of our facilities, one in Romania, one in China. And through these five facilities, we supply our customer base across the globe. And we are currently working on... Growing business in various segments, specifically for us, growing with Japan-based customers, growing the large-scale business, growing the bushing business, as well as growing the stamping business are some of our big growth drivers as we look at our future. So this is just to, you know, get you up to date on. You know, how the area we operate. With that, a little bit of, you know, additional background this time around, let me jump to, you know, the results this quarter. I'm happy to inform our stakeholders that in spite of a current global turmoil which we are witnessing and which could have upset the rhythm of not doing. Business, particularly in quarter four of the current financial, we have done quite satisfactory and have met most of our internal performance expectation on the key fronts. I'm happy to note that our India engineering business Including all the key verticals have done very well in quarter 4 and financial year 2026. Specifically, bushings have also reported revenue of about 127 crore for the financial year 2026. In line with our expectation, posting about 25% growth over last financial year. In the current year also, we are having a very aggressive growth plan in tune of 25% to 30% in this segment. Our sale of large-sized kgs grew by almost 14% in FY2026 and stood at around 49 crores. And sales to Japan-based customers grew by almost approximately 12% in 2026. And stood at around about 73 crores. In as much as the large-size-case segment is concerned, we are working very aggressively for increasing our wallet share. And lastly, if we talk about Japan-based customers, the progress, those low is positive

direction, and we are committed to growing this segment as well.

Thus, India's engineering business, which includes Harsha Advantec, which is a subsidiary and has posted a good overall growth of around 14% in FY2026, notwithstanding the fact that Advantec, a new unit, and it's still operating at a lower capacity utilization. First, in FY2026, exports from India have also posted a good robust growth, almost 17% compared to FY2025. Our exports to U.S. have also started picking up duly incurred by fact that recently additional import tariff on cages has been reduced to zero in U.S. I am happy to note that capacity utilization in Advantech is improving. And we should see the sale from this unit growing at least three times in FY27. Thus, while in this current financial advantage through having posted a positive EBITDA of 4 crore has still reported a combined loss of 11.4 crore due to higher depreciation and interest. However, the bottom line is also expected to improve considerably in the coming financial year. In spite of this drag in the current year, our India engineering business has posted an operating EBITDA of around 22% in FI 2026, which is quite satisfactory. Now, let me talk of a foreign subsidiary. As hinted earlier, China had performed well with an overall top-line growth of about 9.26% in FY26 over FY25, and has also posted a positive EBITDA of around 11%. As announced earlier, we have already commenced implementation of China Brownfield expansion project. We believe that this will significantly strengthen the business presence in China and we should expand our product portfolio from our predominantly brass-based cages to a good mix of steel and brass cages. This project should come in operation in H2F28 and we should also see some improvement in EBITDA in China going forward. However, Romania continues to perform below par as it is still having negative EBITDA resulting into a combined foreign subsidiary losses of about 11 crore in the current financial year or FY26. However, we are trying our best to improve our product mix by focusing more on KGs in Romania from current level of around 22% to more than 30-35%. And we are also pushing our key customers in Romania to increase their offtake from Romania. We have also started forming our CapEx plan for the second phase in Harsha We are advantage, Harsha Engine is advantage, where our focus will be...

To create additional capacity for our key growth driver verticals.

We will be sharing more details as and when the plans are finalized in next few weeks. Now, talking about our solar business, you might have seen that it has performed very well, achieving strong top-line and bottom-line growth in financial year 2026, Mainly on account of continued tailwind due to. Mix of increasing awareness and a good policy support from the government, as well as private sector. Lastly, I feel confident that the current financial year, FY2026-27, we should achieve an overall double-digit growth in top line, though the growth in India engineering would be a little bit more aggressive somewhat in mid-teens. We are also feeling confident that we should be able to at least maintain our current margin profile through our endeavor, though our endeavor is to improve it going forward. I would like to thank you for a continued confidence in Arsha, and I would like to ask Maulik to walk us through more detail with numbers. Over to you, Maulik.

Thank you, Vishal Bari. Hello, everyone, and good afternoon. I believe you have already seen the numbers and the presentation we uploaded for the investor call. For the quarter ended March 26, our engineering segment at consolidated level have achieved top line of piece 382 crore and EBITDA of 77 crore. In the last quarter, against our adjusted EBITDA of 64.3 crore in previous quarter, and adjusted EBITDA of 66 crore in the last year, quarter 4. While for the year-ended March 26, the engineering segment has achieved top line of 1,444 crore at consolidated level, against the 1,269 crore last year. We have reported our consolidated EBITDA for engineering business at Rs.264 crore. However, our adjusted EBITDA is around 270 crore if we adjust it for new labor code impact. While last year adjusted EBITDA was 227 crore for our engineering segment. For the quarter and year-end, we observed the margin has improved, defined by Visalvai, mainly on account of the higher export sales and strong India demand, followed by the better product mix and cost control. We also have a positive impact on financial earning as well as ERF. Solar business have achieved revenue of 183 crore for the full year, with a pet of Rs. 10.2 crore for the financial year 25-26. Against the adjusted path of 5 crore last year. Our overall working capital cycle at consolidated level remain around 130 days at the year end against the 134 days in the previous quarter and 127 days in the previous year. We have incurred capex of 120 crore in the full year and around 20 crore in the last quarter at a consolidated level. Our busing business has achieved 127 crores, as Vishal, we have mentioned. And just one correction, our combined loss of subsidiary company in the current year is 9 crore, not an 11 crore, which has been said. And previous year, it was 14 crore. 11 is on the Advantage Act. And with this brief on the financial numbers, I request operator to take the Q&A from the participants.

Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and then one on their touchstone phone. If you wish to remove yourself from the question queue, you may press star and then two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Again, to register for a question, please press star and then one now. Our first question comes from the line of Web of Shah from Equidius Securities. Please go ahead.

Yeah, hi. Congratulations on a good set of numbers. My first question is on the 27% revenue growth reported during the quarter. So, could you provide some color on the contribution from pricing versus the volume growth? And were we able to fully pass through the commodity inflation of the previous quarters?

Hi. Thanks, Vaibo, for your question. And first of all, 27% growth which you have observed is a consolidated growth. And the major contributor is our solar business over there, which has grown almost 100% plus. 91 crore is the last quarter number. While our engineering business growth is 15.7% year, while quite similar year-over-year numbers. So, just to break down this number for your benefit, 10T7 is including solar, and if I remove the solar business, it is 15.7%. And on your questions for the pass-through mechanism, yes, it is a very well-established pass-through mechanism with the customer. So, as per our agreed late period, it automatically passes through to the customers. Different customer has a different late period, but effectively you can say that on an average on four months everything gets passed through.

Just one clarification, Vaibhav. Our Engineering Consolidated India business including Advantech is about 16.6% quarter over quarter. 28 crore is the Q4 contribution of sales coming from Advantech.

Was it entirely driven by the volume growth or was there some pricing benefit as well?

Majority is driven by volume growth considering that the last quarter, which is September to December, if you observe, there has not been a significant material movement. The movement started at the end of December and rain up to around February or March for the metal prices, including brass.

My second question is on the India engineering business. So, while we saw the strong performance in FY26 and primarily driven by the exports, while the domestic revenues witnessed relatively modest growth. So, could you help us understand the key drivers behind the strong export growth as well as the reasons for the softer domestic performance? And it would be great if you could elaborate in terms of the end user indices and the customer segments. Okay.

Yeah, so...

From our point of view, the growth in export is driven by improving markets, industrial global markets, improving European markets, as well as the US market, because of specifically the tariff impact. So, those were the factors. It has supported the global market growth and things like that. Other factors on the domestic market, I think that has also grown very well, according to us. Maybe one of the factors which is high at masking that is potentially the by-product sales. Which might be masking that partially basis of the numbers. But overall, we are confident, including India, growth has been very robust in FY26.

So just to add, India cage business has grown by more than 10% on a pure India to India cage. Okay, that's almost 11%. And then there is... Further growth in India level supported by our bushings business and our stampings business. These two have properly. So it's not that khali bushings or stampings have grown. It is that cage also has grown in good volume.

And, sir, lastly, could you share your CapEx plan for the FY27 and FY28?

So, we are in process of, you know, fully finalizing all the details of our CapEx plan. Right now, we are already, what we have finalized, what we are already looking at is about. 30, 40 crore of maintenance capex in India in this current financial year. And my assumption is that a very similar number would be there next year. Also, you are aware that we are, you know, we have. We have started the China expansion project and declared an investment there. So reference to that, about 70 crore capex is expected to be executed in the current financial year, and further 20 crore we are expecting next financial year. These are some of the things which are already clearly formed and finalized, and there are other things which we are still working on. We are expecting that based on various planning and activities, we will potentially add to this, but it is still underway.

So it's predominantly, as he said in his speech, the second phase of Advantage, we are starting to work on the desk, and probably in the next few weeks, the plan will be frozen. But the work will start this year itself.

Understood. Thank you very much for answering my question. I will get back in the queue.

Thank you. Your next question comes from the line of Jason Swans with IDBI Capital. Please go ahead.

Yes, sir. Thank you so much for taking my question. So my first question just pertains to the Romania and the China subsidiaries. I just wanted to know the absolute revenue numbers for whole of FI26, for Romania and China both, and if you could also possibly give the PBT numbers as well.

Okay. Sure. We already said that combined loss is 9 crore for China and Romania, but I am happy to share the independent number also, which we will definitely publish also once annual report is uploaded. Our HRSA China has done turnover of around 120 crore with a profit of around 5 crore as a profit after tax. And HRSA Romania has done turnover of around 247 crore with a profit after tax around 14 crore loss.

Loss. You're done.

Correct.

Okay, sure, sir. So, the revenue is 247 crore and loss is 14 crore for Romania and China revenue is 120 crore and PAT is 5 crore. Correct, sir? Yeah, correct.

Okay.

Thank you so much for that. Okay. So, and our next question just pertains to in terms of the demand situation, you know, if you go back to three quarters, the situation in Europe was pretty weak. Now, um... Now, just wanted to know, and Europe being a key market for us, just wanted to know how is the demand situation right now in Europe, specifically, you know, pertaining to the Europe subsidiary.

So, last whole year, we are seeing, you know, demand has slowly improved over the year. And specifically for the European subsidiary also, the demand is continuing to improve. Right now, the indication are that it is all positive growing and we need to, how we turn around the situation from... Cost as well as pricing and, you know, all those profitability point of view is our main concern. Overall, we see very positive indication from our customer for our subsidiary.

So, things definitely have improved from what it was. That's heartening to know.

Sir, actually, I just missed out on one question. I mean, regarding the Romanian-China subsidiary, so combined, of course, now Advantech also is in the mix, so I understand that. So, combined, when you look at the laws on a combined level of subsidiary, it's around 21.6 crores to be precise. Of course, it will be a... The combination of Advantec as well as the China and the Romania entities. Now, just wanted to know, sir, when you look going ahead, 27, 28, I would definitely on a trajectory to basically reduce this losses going ahead because we have done a lot of work on the Romanian subsidiary as well, you know, in terms of restructuring and China is doing well. Advantage also will ramp up. So understanding is probably there should be a quick ramp up or a decent ramp up of all these things and probably losses will get to reduce considerably going ahead 2728.

Yeah, Jason, I think it's covered by Visar in his introductory speech also that this year Advantex has a loss of around 11.5 crore or more because of the first year of operations and mainly despite of positive EBITDA, there is a loss on account of higher depreciation and interest on the loan we have taken over there. Gradually, this will reduce because the utilization will increase in this year. We expect it to be more positive trend this year at an advantage level. While China is already in a positive territory and will increase for that. And Romania, our discussion is already on with customers and we are hopeful this year to reduce this loss further compared to what we already reduced this year compared to last year. And further, we will reduce in the coming period.

So exact quantification may be difficult, but definitely there will be reduction.

For sure.

Significant reduction.

For sure.

That's okay. Okay. That's very heartening to know, sir. That's good. And sir, again, when I spoke to you about the situation, now I just want to talk about the situation domestically, you know, the likes of our big three in terms of the bearing manufacturers, localization, capex, how do you see demand for that on the ground?

We see a very positive picture. Our customers have significantly ramped up their demand and capacity in India, responding to probably all the signals from automotive as well as industrial market. And further, we feel that there will be another round of investment to cater to the existing or upcoming demand from our customer or the indications we see. So, we are very bullish. There could be... Impact of, you know, current war and, you know, petroleum prices and all that, that could have some impact from a short term point of view. We don't know yet, but overall they are very bullish and working towards growth. And we are, you know, we are banking on that to continue our growth journey in our domestic market.

Okay, so things seem to improve. In the midterm, it was looking a little slow, you know, with all the restructuring, particularly one customer, one entity and all those. So now it's picked up, the demand and all. You are seeing good demand trends going ahead.

Right, now we see good traction.

Yeah, yeah. And just finally, I'll just join back the queue. Sir, just wanted to know in terms of as per geography, how do we now, of course, in the presentation, you can see that on a console level, 58% of revenue is outside India. So 42% is basically, I'm just talking about 26 for the year 26. So 42% stays within India. And how is the other breakups? Sir, how do you, just wanted a breakup of the geographies, what would contribute to the total revenue?

We've already spoken in the past on this, Jason. Our majority geography outside India is Europe, followed by China, America, Japan, and others. Europe usually contributes on a larger scale because there is a casting cell also from Romania in Europe, and that also part of our overall top line. Usually, Europe in this bifurcation is in total cells is around 19 percent in the total cells. And China and America will be around 10% plus and others will be there. This is, sorry, my bad, my bad. Europe is around 30%. My bad, I'm just correcting myself. Europe is around 30% in the total sense and China and America, China is more than 10%, America is around 6% and followed by Japan and others.

Okay, sorry. So China and US are 10% each, and Europe is 30%, you said?

Yeah, China is a little higher than 10, and US is around 6-7%.

And Japan is?

Japan is still not significant, around 2% plus. 2%? Okay, sure.

Thanks for that. Thank you. Thank you so much.

I'll join my team.

Okay.

Thank you. The next question comes from the line of Jamin from ADECO Asset Management. Please go ahead.

Thanks for taking my question. The first question is on, can you break down the four-year export growth into the three markets, one from the recovery in the end market, both Europe or the U.S., wallet-side gains within existing customers or the geography, and any newcomers that you have on in the future? I mean, your voice is breaking. Hello. Can you hear me?

I am sounding a bit muffled right now.

Can you hear me now?

It is slightly better sir. If you are using any other mode, may I request you to use the handset mode please?

Sure. Now it is better.

Sure. Just give me one moment sir. Yeah.

Hello, can you hear me?

Yes, Jamin, sir, please go ahead.

Yeah, hi. Hi, Mollick, sir. Can you just break down full-year export growth into three markets? One is I mean the recovery in the end market, that is for Europe or the US. Second is the wallet share gained within existing customers or the geography. And any new commercialization in new programs or the geography?

No, I mean, we do not share this data to the investors, and basically, we have already given a good amount of breakdown of our export sales in the previous question itself.

I just wanted to understand, I mean, the growth here has been for the whole year basis. Is it more led to the recovery or, I mean, have you brought, I mean,

breakthrough into new, geogra-based new program building and drifting? It's a mix of both. It's a mix of both. All three items are there, you are right, but we cannot give further breakdown to it.

Okay. And when we are seeing, I mean, LinkedIn's kind of growth or coming, I mean, how should we, I mean, how should we think about contribution from export, advantage, ramp-up, or domestic demand?

I think Visal has already covered in his speech. We expect India to continue to grow in a higher team, or mid-team to higher team, and that will be contributed by both India growth as well as our export growth will continue. That's the expectation.

Okay. Okay. I mean, one thing, when you look at, I mean, your customers' performance, right now they are using a driving action to offset the inflation pressure in gear and in respective geographies. Have you seen any change in the sourcing behavior or the localization that is going to benefit you from the near-to-medium term?

So, I mean, I think what you are trying to say that our customers are looking at us only to offset their pricing. Actually, that's not correct because... Through our competencies, we have now become an indispensable partner with them because we play a very important role in helping them grow their product portfolio by making sure that kgs are always available. So, as you know, kg is about 5% of the total bearing cost in terms of value. Now, the problem here is that... The customers, the big players have stopped investing in new facilities or upgradation of their facilities over the period of last many years. Whereas we have a massive advantage of volume accumulation, so we have done absolutely up-to-date, up-to-date upgradation of technologies, skill sets, manufacturing capacities, everything. So it is not only the cost part, but it is the speed, the development at which if they want to develop a tool, they might take much longer time. We do very quickly. The cost at which we are able to develop that new tool, I think all these factors become very critical. And you know, this is one product where a customer does not do any further processing. If you look at either ring, outer ring, anything, they do grinding, but a cage, they directly put it in the bearing. It's a very important component. So I think cost is a very, very, I would say today cost is important, but not the barometer for them to consider.

No, I understand. My question was different. My question was, I mean, part of the customer, they are testing inflation in the cost front. And right now they are offsetting cost inflation to the pricing piece. They are not doing a lot of vendor consolidation or any change in the forcing piece. Anything you are seeing from your side that will benefit you in terms of your vendor consolidation or increasing outsourcing.

So that's an ongoing project, Jainin. As we already informed you, outsourcing is the areas which is more beneficial to them whenever there is a global scenario or global challenges. And it's an ongoing thing. There is nothing specific which we have to announce today. But yeah, new product development and outsourcing activities and ongoing activities and pricing prices are in our favor. Okay, sir.

Thank you so much, sir. That's it from my side.

Thank you, Jainin.

Thank you. The next question comes from the line of Jay Shah from Genuity Capital. Please go ahead.

Hi, congratulations for a good set of numbers. I have two questions here. One was on the Advantech subsidy. What in your estimate would be the timeline to ramp it up to, you know, the maximum capacity and what is the ballpark figure in terms of top line that Advantech can contribute? And second question is, sir, this is a bit longer term over the next two, three years, I mean, keeping aside the current volatility. But since, you know, we are into precision components also, and apart from that, we are in cages. The CAPEX cycle that, you know, we are seeing locally and even globally, what do you feel is going to drive Harsha's growth as a company, you know, over a two, three year period? What components or rather what end sectors do you think are going to help Harsha achieve the long-term goals?

Okay, let me take a first question, Jay, about the Advantek optimum capacities. So Advantek is still in a growing and fixed asset spending stage. But what I can say you is based on the current installation capacity, we expect it to reach to the peak in next two years. The current install capacity, but we also expect it to get into the next phase of expansion also, meanwhile, and it is difficult to give you precise answers. But with the current install capacity, we expect it can give us around 250 to 300 crore turnover. And as I just said, this will further enhance as we further go for expansion in our advantage subsidiary. And on your second question about growth and area where we can grow better, I ask Vishalvai to give you more insight.

So, for us, you know, CAGE is an important growth driver, and within that, we have identified That, you know, increasing the outsourcing or wallet share through insourcing to outsourcing is a very big growth driver for Harsha. And within that, you know, large size cages is there. We see that a lot of manufacturing is moving to India, which should also additionally benefit Arsha bearing manufacturing moving to India. So, we are also bullish on bearing industry growth. And within that, you know, additional growth coming to HRSA based on the outsourcing, as well as resourcing, as well as, you know, India, so more India manufacturing and us having a big share of marketing India and so on. So, Kaze is a big growth driver for us, including, you know, even we consider Japan-based customer growing wallet share with them. Beyond the bearing cages, we expect at least stamping component and bushing business to also grow much faster. We are expecting from a mid-term basis at least 15% to 20% growth in these two segments. We are expecting because, you know, we are investing in new capacity, additional product portfolio, even in these two product lines. So, right now, we expect that all three established, currently established product lines, Should give us, deliver good growth numbers, and then further we are looking at expanding this portfolio beyond, but in a short to midterm, these are all good growth drivers for us.

So just to quickly add, to complete the story, as you would have seen in the presentation, we have... Given the data of SKUs that are being developed every year, so about five, six hundred new SKUs. One SKU is one particular type of product which has strengthened my SKUs to beyond 8,000. Now, these are the new products which are the pipeline for going forward, and that is an indicator that how the pipeline is quite robust. On the bushings also and stampings we are developing. New products, new variations, multiple variations. So, we are filling the pipeline there also. I think the serviceable market is much bigger. And we should continuously see, at least at the Indian engineering level, a minimum 15% growth year over year in a normalized situation. We don't find any problem. Whereas the bearing industry per se globally doesn't grow more than maybe 7-8%. This is where we are.

Understood, understood, sir. Thank you so much for the detailed answer. Just one more follow-up on the same, sir. Since you said that, you know, insourcing is a big strategy and a lot of manufacturing is moving to India, and since Harsha is already, you know, engaged with all the bearing majors of the world, is there any discussions with all these bearing majors to, you know, given Harsha's capabilities that more and more parts, apart from bushings and even cagings and other components, that they are looking... Add more parts to give to Harsha, given your capabilities and your relationship.

So we, you know, we are not really going beyond, you know, stamping products with our customer. So at times we expand our portfolio with our customer beyond bearing cages and we have successfully done that. But primarily that would mean stamped product. Beyond Bearing Cages and few other products. We do not really intend to majorly, as we speak today, we are not having a strategy to go into any other specific bearing components beyond cages and related stamping and other components. This may change, but right now, that's our, you know, stated growth.

And there's a reason. I have a very big headroom for growth. So, if in India, my wallet share is, say, 70, 80, 90 percent. Overseas, within all these big customers, the wallet share varies from 10 to 20% on the three established old relations, and maybe 2-3% with Japan-based customers. So, you can grow from that wallet share, which is a lot of work. So, we at this point in time, of course, we have diversified into pushing and stamping, which are related. But the focus is that by maximum wallet share, we should take going forward.

I understand.

What was the reason, if I may ask, that over the last few years that we couldn't ramp up the wallet share? Were they looking for facilities outside India, I mean, basically closer to their end customer or factories? And was that the reason that we couldn't scale up and that's why we are putting more money now in Romania and China?

So, I think primarily the markets, last few years we faced a big challenge of degrowth in our biggest market of Europe and a little bit in China side specifically and even a little bit US last year. Now, having said that, you know, they have started coming back. So, partially, our growth is driven by that. And also, our growth currently is driven by all the new additional wallet share. We won during that time, but realization was delayed, and now we are into execution. So, we don't see that as a challenge, but as a wallet share degrowth, but more of, we couldn't move the wallet share and the market softened over, you know, our biggest market softened over last.

So, sir, would it be fair to assume in Europe, like it has happened in chemicals, and even in some cases, casting, forging, a lot of big players have gone out of business, has our sector also seen some consolidation, and that's why we are now more confident to get incremental wallet share?

Yes, you're right. See, I can't share any specific names, but yes, there is some consolidation. And that is also driving our endeavor to, you know, increase our wallet share. You're right.

Thank you.

And just as a last question, if you could throw some light on sectors that are really doing well in India and Europe, any sectors as you would be speaking to your customers and their customers, or medium to long term?

So, you know, we are seeing, as I said, overall also across, I mean, without going into sub-sector, industrial has been doing very well last six months plus, and current indication is that that should continue. And we are seeing good growth on the automotive side, specifically India. And some potential, you know, green shoots on the automotive across the globe, but I'm not very clear about that one. In general, as yet, wind has not picked up in Europe. Which we are, you know, one of the factor of, you know, the plant in Romania facility is quite focused on, was quite focused on wind as a primary market. So, that is not yet a great news. But beyond that, we are seeing industrial sector across the board growing and supporting. Even we are seeing positive signs of railway in India and across the globe. Some orders coming in specific to that. And so on. But again, we would not have a very sharp insight into a subsector because at the end of the day, we supply to customer who assembles it and gives it to a sector or industrial or automotive. So that's a little bit of limitation from our side. We will be able to clearly tell you that.

Sir, thank you so much for answering all the questions in detail. All the best for the future. Thanks, J.P. Thanks.

Thank you. The next question comes from the line of Stargate Kapoor from Kapoor Company. Please go ahead.

See ya. Namaskar, sir. Hope I'm audible. Sir, if we look at our two, last two financial years, we have then capex to return up closer to 210 crore for FY25 and 120 for FY26. And now the plant and the property plant and equipment closing balance is at 615. So at peak utilization level, sir, what should be the likelihood number? I think so now with the inflationary trend, what should be the revenue trajectory that we are anticipating or how should we look at this number of 300 crore translating into the business opportunities going next?

So, before Maulik Bhai gives you a specific answer, one thing, the new capex of Advantec also includes a fundamental infrastructure development which will not immediately translate into a fixed asset multiple, as a revenue multiple. But, yes, Maulik.

Yeah, that's right. And that's why, Mr. Saket, if you see our overall plant and machinery is obviously the net block you have seen, but considering the capability and followed by our maintenance cafes, we expect the current three set of business can easily reach us at India level around 2,400 to 2,500, and console level can be around 2,700 to 3,000 crores, depend on what kind of capacity we look into. Because at console, we also have a casting capacity which is an independent capacity from the cage. So, this is the input to your questions, Mr. Saket.

Sir, last year we did around I think so more than 100 crore for the bushing segment. So, what have we outlined for the current year, how are the order books for the bushing segment in particular?

Yeah, Visalvi has already covered in his introduction, and the expectation this year Mooseng is also to continue similar growth trajectory of around 25 to 30%.

We did 127 crores in FI 26, huh? Yeah. In bushings.

And in the caging part also, sir, I think for the large cages, we were finding it more headwinds going ahead. Correct me there. So in terms of the product profile, which segment are you seeing the better opportunities and how should the category perform?

Last size cages have done about 50 crores, 14 percent growth this year. We expect at least this segment to keep on growing in mid-teens without any problem, 15 to 20 percent, no issue. Lot of things are in pipeline.

Okay, sir, as you alluded to the earlier reply that we are anticipating mid-teens growth for the current financial year, and what should be the EBITDA margin trajectory?

We continue to share the blended EBITDA only, but we expect our EBITDA, as you must have seen in the last few quarters, it has improved, and we expect it to continue to improve marginally. And over the period of two to three years, our expectation is overall increase of 100 to 200 basis points in our EBITDA. At the console level.

India has been consistently doing about 20% as you know.

And you have already given these inputs before.

Okay, sir. All the best to the team, sir. And this time also, we are coming up with our AGM also earlier. So, a lot of insight and annual report would be at our disposal much earlier than what it used to be. So, thank you for the team for looking into this. Appreciate it. I appreciate your input. Thank you, sir. All the best. Thank you.

Thank you. Your next follow-up question comes from the line of Jason Swans with IDBI Capital. Please go ahead. Sir, thanks for taking my question again.

Sir, I just wanted to know the absolute value of the stampings revenue for FI26.

Stamping absolute value, 60 crores.

60 crores.

And this is also expected to grow by 20% at least next year?

Yeah, yeah. It will grow better, yeah.

Okay. Okay. I don't know, sir, just a follow-up question. I just wanted to know, I mean, Again, when I go to the fast, you know, I spoke about this. The Europe demand was weak. Now we are seeing situation improving on the ground. Just wanted to know, sir, what is your thought on the, because it's a very important market for us. What is your thought on the sustainability of this demand? Has something changed on the ground that, you know, demand trends are coming back? Just wanted some color. You've done a lot of restructuring, etc. as well. Is that working out well? Or has the macro situation improved? Just give us some color on the demand situation in Europe and how sustainable this can be.

So, as I've said earlier, Europe is slowly improving. There is no definite, like a big stroke of improvement. We are seeing a slow, sustained improvement happening in Europe from a demand point of view. On the, you know, some improvement and structuring, we still see that there is an ongoing work. We don't have, you know, completely, we are not done yet, and there is a lot of still pending work within that in terms of creating a right cost structure. In Europe, we are continuing to face massive inflationary pressure in Europe, which is also adding to this whole challenge. So, from an overall outlook, we are bullish on the demand side of it. We are seeing, I think someone was mentioning about, you know, there are, because of the downturn and the inflationary challenges, a lot of companies have, you know, has an impact and, you know, we are hopefully so far surviving, but we are also evaluating how long we can do with this kind of. So, how we can quickly improve on the operational side further, and also we are looking to improve on the top line faster. That's the intent. Having said that, I don't have a very clear direction or input from our customer on that demand, improving to the level needed. Immediately, and we are continuing to work on the cost side of it. So, again, a very hazy picture, but that's what we are working with right now, but very hopeful and positive.

Okay. And sir, just wanted to know, in terms of bushings, you have seen very good growth and expectations also for good growth ahead as well. Sir, what is driving this growth in the bushing space? 25-30% is very healthy. So, just wanted to know what is driving this growth, sir, on this point.

So this is a, primarily there is a conversion of a design, so in the wind market, wind gearbox. There is a conversion happening on Earth. So if you look at a planetary gearbox, the planets which were earlier using bearings are now using bushings. And that is driving this drastic growth. So the underlying market is roughly the same. Or maybe growing the wind market specifically in India. Its growth is driven by more and more design coming under the bushing concept vis-a-vis the earlier design of bearing concept.

Okay, sure. So, that's more driven through a design change, which is good. Okay. Okay. Sure.

Substitute market.

Yeah, yeah, yeah.

Okay.

Sure.

And just in terms of stampings, I would just assume that in terms of end user markets, it will be again varied between automotive and industrial. Is my understanding correct?

Correct. It's a whole lot of automotive, industrial, railway, as well as we work with one big chunk is going into consumer goods, white goods. So, we are making, you know, big growth driver for us. One of the big growth driver for us is air conditioning compressor components as well as white goods like home appliance, some of the stamping components for that, and that is, you know, driving that growth.

Okay. So, it goes into white goods as well, which is pretty good. Okay. The AC market also going to expand. Okay. That's good, sir. And just finally, sir, wanted to know, I mean, in terms of the Middle East crisis, we have seen this, of course. Now, just wanted to know any issues during the quarter in terms of any logistical issues, shipping, or any raw material price increases, or going ahead, do you envisage anything impacting us adversely?

I think there is definitely an impact on the cost side of it, which we are trying to mitigate. I don't have a clear answer on that to what extent and where, but we are seeing the impact across the board. On the input side of, you know, specifically when we use some of the oils, lubrication things in our production, that all cost has a cost impact. Our plastic cage material obviously has gone up. That is also an issue which we are dealing with, addressing it, countering it, or passing on, working on, passing on. But on the logistics front, so far we have not seen any impact, specifically because if you remember this whole sewage canal crisis happened about two, three quarters back, and anyway, it has taken the hit and impact a few quarters back. So, that route, shipping route has remained clear of current immediate crisis, for us at least.

Okay, okay. So, considering that also, sir, I mean, you see margins, you can basically improve from your own. I understand there is, this is kind of a near-term pressure, but even considering this, you can expect going ahead, we can basically improve margins or at least maintain margins, current margins.

Our intention is that there is definitely pressure on the input material, for sure. Thank you so much, Vandris.

Thank you so much.

Thank you, sir.

Thank you. The next question comes from the line of Hiten Boricha from Sequent Investments. Please go ahead.

Yeah. Thank you for the opportunity. So, mostly my questions have been answered. So, you mentioned growth will be around in mid terms for India as well as for overseas business. So, I just wanted to know the number on the solar segment.

We have data very good growth on the solar segment from

140.45 crores to around 185 crores. So, can you share the number on that?

Thank you. So, we expect solar also to continue to grow well. I think you are asking for the solar growth estimates, right?

Yes, sir. I think it's grown around 30-35 hours.

Solar is also in the tailwind sites, and solar will continue to grow because the government policies are much favorable, especially in Buzrat territory, and we expect it to grow more than 25% also going forward.

Okay, and with that group, EBITDA margin should improve from current levels, right? It has seen a very good operating leverage from 4.5% to 8% level in FF26.

So, it should improve there as well, right?

We expect Sola to maintain the last year reported EBITDA margin, maybe marginal improvement over there.

Understood, understood, sir.

Yeah, yeah.

Thank you.

Thank you. Thank you. Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to Mr. Vishal Rangwala for closing comments.

Great. So, thank you very much, everyone, for attending this conference. Appreciate your time so late in the day, and thank you, and have a good evening. Thank you. Thank you.

Thank you. On behalf of Harsha Engineers International Limited, that concludes this conference. Thank you, everyone, for joining us and Human Outers Connected Alliance.