Gala Precision Engineering Limited (GALAPREC) Q4 2026 Earnings Call Transcript

And welcome to Gala Precision Engineering Ltd. Q4F526 Earnings Conference Call hosted by Arihan Capital Markets Ltd. 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 we assist during the conference call? Please signal an operator by pressing star then 0 on a touch-tone phone. Please note that this conference is being recorded. I now have conference over to Mr. Rohan Barnabal from Arihant Capital. Thank you. And over to Mr. Rohan.

Hello and good afternoon to everyone. On behalf of Arihant Capital Markets, I thank you all for joining into the Q4 and full year F526 earnings conference call of Kala Precision Engineering Limited. Today from the management. We have Mr. Balakishan Jalan, whole-time director, Mr. Sateesh Kotwani, whole-time director, Mr. Srinivas Giridhar, CFO. So, without any further delay, I will hand over the call to Mr. Balakishan Jalan for the opening remarks. Over to you, sir.

Yeah. Thank you. Good evening, everyone, and welcome to our earning call to discuss the performance of the fourth quarter and financial year and day 2026. In the interest of some of the people who are new to the company, let me first give a brief overview of the company. The Galapason is the preferred manufacturer of the high-quality precision components. We saw various sectors like renewable energy, industrial, and mobility. Geographically, we are diversified across sales in India, Europe, and USA. We supply to OEM, TireOne, and partners. We manufacture customized products of over 800 SKUs to serve almost 175 active global customers across 25 countries. Professionals are fully equipped with advanced technology and integrated capabilities for design, development, and manufacturing of diverse product portfolios. To further scandal our manufacturing footprint and expand our product offering, we have established a new fastener manufacturing facility in Chennai with an installed capacity of 4,600 metric tons. The plant is focused on manufacturing high-tensile fasteners, including bowl, complement our existing product portfolio, and enhancing our ability to cater to growing customer requirements. During FY26, the plan operated at around 35% utilization, and we expect utilization level to improve meaningfully in FY27. We also commenced Phase 2 CapEx at Chinay facility to support future growth opportunities. From the revenue mix perspective, for the year, DSS remained our largest contributor at approximately 49%, providing a stable base of recurring business. SFS contributed around 34% and continues to be the fastest-growing segment driven by strong OEM traction and expanding customer programs. During the year, SFS revenue crossed Rs. 100 crore milestone, reaching Rs. 108 crore, and waged a strong growth of 64% year-on-year. CSS contributed approximately 17%, supported by the steady demand across industrial and mobility applications. During the year, we successfully entered into offshore wind turbine segment through the development and supply of critical fastness for global OEMs, making an important expansion of our addressable market. We also commenced supply of the high tensile bolt to a global wind OEM in India from our Chennai facility during Q4. From an operational perspective, we continue to focus on productivity enhancement and digital transformation initiatives, including implementation of IoT solutions on the shop floor and commencement of SAP S4 HANA and implementation as part of our broader digitalization journey. On a sustainability front, We align to our business objective with long-term ESG global goals by placing an order of 1.8 megawatt open-assess solar power plant for captive consumption. With that, I will now hand over to our Chief Finance Officer, Mr. Girgar, who will take you through the financial highlights for the period under review. Thank you. Thank you, Mr. Girgar.

Welcome to the earnings call today. Let me provide a brief overview of the financial performance of the quarter and financial investment at 2026. For a quarter interview, consolidated revenue from operations stood at around 95% reflecting a growth of 26% year-on-year. EBITDA for the quarter should around 17 crores, up 31% year-on-year, with EBITDA margins at 17.55%. Net profit should at 12 crores, representing a growth of 22% year-on-year, with part margins at 12.9%. 2526, revenue from operations stood at 340 rows, reflecting a healthy growth of 32% year-on-year. EBITDA for the year stood at 52 rows, up to 23% year-on-year, with EBITDA margins at 69.51%. Net profit before exceptional items should have 31 floors, registering a growth of 35% year-on-year, part margins at 11.64, and net profit after exceptional items should have 36 floors, registering a growth of 32% year-on-year, part margins at 11.29%. With this, we can now open the floor for Q&A session. Thank you.

Thank you very much. We will now begin the question-answer session. Anyone who wishes to ask a question? You may press star and 1 on the restaurant telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.

We have first question from the line of

Lakshminarayan KG from Tunga Investment. Please go ahead.

Yeah, thank you. I just want to understand in terms of wind energy, I think we have a strong presence there, and I understand that the growth has been very strong. So I just want to understand as we look into the forthcoming year, what kind of order book we have on that and what kind of revenue visibility as well as the growth visibility we have on the wind energy front.

Okay, so for wind energy, of course, the market situation is positive, and because of Gala's strong base in this sector, we are seeing good growth. In wind energy, approximately 60-55% of our sales is coming from India market, and about 30-35% is export. And as a company, we are looking to grow 20-25% sector in overall revenue term. And in wind also, we are looking to grow around 25-30% in short term for our partners and spring category.

Got it. Another question is in terms of your Chennai ramp-up. I just want to understand, you know, what kind of revenue ramp-up we have done in Chennai facility and what do you expect that for the forthcoming year?

Sure. Yeah. So, actually, we started the trial run in last year, and customer visits, audit, all this started in the beginning of the last year. And July 1st, we made a first dispatch to Vistar as a PPAP lot. And from August, we started ramp-up, 1 crore, 2 crore, 3 crore, 3 crore, 4 crore, and 5 crore. So, we reached to almost a 5 crore, the phase 1 capacity of per month, which is approximately 60 crore annually. And now, we are seeing the similar run rate as of now, we will be going to have in April, May, June. And, similarly, we started the phase 2 capex, which we will be completing by June and July. And that, again, will add another 5 crore per month capacity or annual capacity of additional 60 crore. And the ramp-up of that, similar fashion, we are planning to do in September month. And in this current year, we are seeing that by 9 or 10 crore, we will be reaching in last quarter per month. The overall capacity, annual capacity is 120 crore per annum.

Okay, and in Chennai, what are the products that we actually manufacture?

Yeah, so basically the fastening division, stirs, we manufacture, and we develop the bolt from M27, M32, M72, and that bolt also we got approval from different customers, and that product also we started manufacturing there.

Okay. This is another question in terms of growth, and I think last time when we spoke, you said that there has been additional stock we need to keep in Chennai. Therefore, our cash flows were a little constrained in the first half. So I just want to understand from a cash flow point of view, though we generate a very healthy growth in top line as well as in terms of bottom line, what is your view on higher cash flow in terms of higher cash flow conversion or because of higher inventory which we need to keep and in terms of export, this should continue to remain at this level?

Okay, so basically in Chinnai, when we are ramping up from 0 to 5 crore or 5 to 10 crore, during this period, we are saying we will be going to have some additional inventory in Chinnai during this ramp-up. Otherwise, overall inventory level are at 103 days, and we think it should not go above 103 days, and we were trying to reduce this inventory days by some 10 days or so.

Okay. And in general, how do you view this cash flow? It's a balance between revenue growth and providing inventory as well as managing it. So how are you thinking about increasing the cash flows to EBITDA?

We, as of now, our guidance is we will maintain or we will try to improve by 10% or 10% or so on year on year.

Okay. Okay. Thank you, sir. I'll come back to you.

Yeah. Thank you. Reminder to all the participants that you may press star button to ask a question. The next question from the line of Arpit Jain from RRR, Investment Advisory Private Limited. Please go ahead. Hi, sir.

Thank you for the opportunity. Am I audible?

Yeah, yeah.

Yeah. So, my first question is, as in Q3 gone call, you had mentioned that we are looking for acquiring 5 to 10 acres of land either at WADA plant or for WADA or any other location. So, could you please share an update on whether the land has now been finalized? And by when the next expansion can start.

Yeah, so good question, Arpit, and nice that you remembered, and this is a good follow-up question. The land is one important thing on which we are working very aggressively. We shortlisted few land parcels in Vara, and we are in advanced discussion, commercial discussion, and with two or three plots rather than three plots, and it may get finalized in a month's time. Parallel in Chennai, we are in touch with the SIPCOT authorities, and we are thinking in very near future, they will be opening some more land parcel in SIPCOT, because our preference is to get some land parcel in SIPCOT rather than an ownership basis. So we are quite close to in closing this land, but it's still not close. That is the fact.

So, by, we can expect by May and or June?

At least, at least June, because land, apart from park closing, then we need to do some due diligence and some paper notice and closing the deal. At least take a 45 days minimum. So, maybe June and August or maybe July, not before June.

Okay, okay. Understood. And my second question is on January land. As in Q4, I think means we have achieved our monthly earn rate of 5 crores per month, right? So, when we will, means when the phase 2 will commence, means our phase 2 full facility will get commenced, then after that, after that also you are saying that 5 crore per month will be achieved from that also, right? So, after that, once everything will be fully utilized. So, we have land in Chennai facility for further expansion, or we will look into it afterwards. So, what is the scenario if current, if capacity utilization will... Speak out then.

Yeah, so at earlier call, I mentioned the overall land parcel what we have, we are utilizing the same and we will be having a maximum capacity of 120 crore annually. And after this expansion, we will not left with any land. But as a backup plan, we have option to move out the stud facility to any long-term lease-based facility and do continue expansion of the bolt manufacturing in the current facilities. So, that backup plan is there, and as we see the progress, we may go with this option for immediate one or two year requirement.

Sir, sir, I am with you. So, please, can you please repeat the same thing again?

Okay, so we don't have any land after, yeah, we don't have any land after we complete the phase 2 expansion. That means the 1.20 crore per annum. Number two, as a backup plan, we have, so this, in 26-27, we are targeting approximately 80 crore something from the Chinnai. So next to next year again, we have spoke to achieve 80 to 120 crore from Chinnai. This is one. Second thing, for expansion, we are looking for land, but otherwise a backup plan. We can have a long lease place. There, we can save the start manufacturing, and we can do in-house capacity expansion for the wool manufacturing.

Okay, okay. Understood, understood. That is from my guide. All the best.

Thank you. Reminder to all the participants, that is star and one to ask a question. The next question from the line of Kudras Dupta from Navneet Invest Trust.

Please go ahead. Very good evening. Thank you for the opportunity. I wanted to understand, sir, on the WADA utilization, I think we still have some space there to be able to utilize that facility better according to the presentation. So what is the limitation there to be able to achieve optimized utilization, if I may ask?

Okay. So, basically, we don't have additional land there in WADA. We already constructed what will be FSI available. Number two, we have some capacity in terms of plant manufacturing capacity. Again, their capacity vary from product to product. So, we have some capacity in coil spring division, for say. And in this spring, we are more or less optimum utilized, which is almost 80% approximately. And same for the fasting division at VARA, number one. Number two, but again, there is always scope, two ways. One is productivity improvement, and second way is some line balancing and adding some machine or adding some outsourcing option, we can free up some capacity. So with combination of this all, we are thinking the current year, whatever number we are targeting, we should be able to optimize our capitalization in Vara.

Okay. So, sir, assuming that you are actually able to grow on a target of 20-25% next year, even Chennai will get optimally utilized by then. Is that a fair understanding?

No, no. So, Chinnai, we are thinking current year, the first four, five, six months, we were going to use more capacity of phase one, which is five crores per month. And the second half, we will be start touching six, seven, eight, nine numbers per month. Month on month, we will be increasing over load. And overall, we are seeing 80 crores something from Chinnai. And by end of the year, we will going to have capacity of 10 crores per month or 120 crores per month. And we are going to have a spare capacity for next year, which is approximately 40 crore plus minus.

Okay, so it should be good for us till FI 28 as well.

May not be completely up. Yeah, no, may not be for the complete whole year. That's why I mentioned that if required, we have a backup to buy the tank. So if we able to control on some land and otherwise, yeah, we can save the fastening on the long lease and we can do expansion of bolt manufacturing in-house. So that is some backup plan which already is there. So we will not miss on any order. That is our strategy.

Okay, and so this land that we are targeting to get, is there a certain kind of a predetermined capex directionally that we have in mind, and also, you know, how early can we get the facility up and running if we are able to, let's say, acquire the land over the next couple of months like you are indicating?

Correct. So apart from land, normally the time horizon is at least six months or something for getting the initial approval. Parallelly, we can start the land development, land filling, and boundary work and all for that. You don't need any approval. And complete construction and taking approval take at least nine months to 12 months. So, you can fairly estimate one year to 15 months something. You can fairly estimate, and parallelly we are ordering for the plant and other machines the erection of something happening and taking the final approval. So, 15 months something plus minus three months we have to consider safely. And as far as the CAPEX is concerned, yes, we already planned in our internal budget, and considering our internal accrual and the borrowing capability capacity, we'll be funding from our internal accrual and D from the bank borrowing.

So what's the total, sir, if you can give me a sense of the whole CAPEX over these 15 to 18 months on the new plan that we are targeting?

For the approximately, you can say, Very rough figure that depend upon when we get the land and when we start the complete development of the building and the plant and machinery. For the current year, we are seeing approximately 50 crore something we may be able to deploy plus minus depends when we finalize the land or able to start the construction of the building.

Okay, okay.

Normally, the ratio of sale to turnover, we have to keep approximately direct machine 30% and the other utilities and all something 5 to 10%. So, 40%, 35-40% something which you have to make investment in the tax.

Okay. On the margin, if I may, we are almost at a five-year low on EBITDA margins at 60.5 for this year. Is this a combination of the mix? Is it this underutilization at Chennai steel? How would you want to really quantify that, or is it the current inflationary pressure on raw materials?

No, basically, if you compare with, say, with last year, where the EBITDA margins is 17.1% or something, the drop is essentially mainly based on account of the product loss, which is only 1%, which is around 3.23%. That has impacted the EBITDA market. Otherwise, there is not a major change in the product mix or in the RMU competition.

Okay. And how are we currently being able to deal with the inflation that's happening in the underlying commodities? Because we must be reasonably impacted, I guess, from what we are seeing. Is there a sense of where we are in terms of impact on margin? How much are we absorbing? How much are we able to pass through?

So, basically, raw material is 100% pass-through, and, of course, currently, because of gas and some other issues, this process costs have also increased. So, with the lag effect, we are confident to get this price increase from our customer, and for which we only started discussion since beginning of April itself. So, there will be some lag effect, but whatever costs are increasing, particularly commodity and some extraordinary impact in gas costs, we will be passing through the same to our customer and get the price division.

Okay, so there could be quarterly volatility in the pass-through, but we are definitely confident of the system accepting it eventually.

On an agile basis, we will definitely see that whatever is being incurred is recovered. Same situation happened at the time of COVID also. With the leg effect, we could get all the price increase related to the different cost increases at that time also.

Absolutely, absolutely. Thank you, sir.

Thank you.

Thank you. Reminder to other participants that you may press star and one to ask a question. The next question from the line of Lakshmi Narayan KG from Tunga Investment. Please go ahead.

Yeah, thanks again. Sir, in terms of the different product groups that you should have, is it fair to assume that the SSS has the highest margin followed by CSS and followed by the next one?

I think on margin front, broadly, all the products are at the similar profit margin in terms of EBITDA level. I think because all the products, like particularly SFS and DSS, we have exports also, domestic customer also. In Coil Springs, in the past, we have done a lot of import substitutes, so where also the margins were good. So, in general, I think broadly margins are at the same 17% to 19% for all the product groups currently.

Okay. And through the growth you have got, is it because you brought it from some other competition that you actually thought the revenue growth from? Can you just explain how you managed to show a good growth for the last two years and how the growth has become? Of course, you go deeper into the existing company. And also, you win new business from the existing as well as new business or new clients altogether. Can you just explain me the journey?

Yes. So, I think the growth is combined effect of all the areas that you mentioned. So, definitely, every year we are seeing at least 10 to 15% growth coming purely from the new customers. So, we still have a lot of unexplored and potential customers globally. And we are seeing addition of new customers happening for the partners and spring commodities. Secondly, particularly in partners and in the spring family, we added new products like Gallock weight block washers in the spring family and bolts and nuts in the partner family. So we are seeing good interaction from the existing customer where we were supplying them the springs or studs. And there is a keen interest on adding new products like bolts and gallop wedge-off washer for this category of products. And, of course, the organic growth is happening, particularly in India, which is also helping us to grow the existing customer, existing parts. So, I think 10% of new customer addition, about 10% to 12% of new parts from existing customer like bolts or gallop or even retracted spring. And organic growth of 5% to 7% happening in the organic business with the existing part has resulted in this 30% growth last year. And same way, we continue to focus on business development and increasing wallet share with existing customers to grow 20-25% in coming years as well.

So, for example, for the competition you have either in India or outside.

For which product group?

For the CSS, it is a Spring group.

In CSS, we have mainly two competitors. They are a Japanese company, NHK Spring. which is having manufacturing plant in Aurangabad and Gurgaon, and there are Indian companies, which is having manufacturing plant at multiple locations with major head office in Bangalore, and still there are some imports happening which we are focusing on import substitutes, which are mainly happening from European markets, still in the Indian market.

Fine. And in terms of, you know, growth, right, is there a particular product group you're actually seeing higher growth among these DSRs, SSRs, which will expect to grow faster in the next, you know, contribution?

I think in partners, we are seeing comparatively larger growth or faster growth compared to DSS and CSS because at the partner market size is really very large. It's 100 billion market, of course, at the global level. And Gala is focusing on increasing the addressable market since we started this journey. So with that, we were addressing approximately 1 billion of the global market in 1 billion US dollars. And now with Bolts and Nuts, we are addressing 2.5 billion of the global market. And our partner sales is approximately 100 crores we crossed in FY26. So, partners have, of course, much larger application, much larger value potential for each customer. So, compared to DSS and CSS, we are seeing faster growth in partners. But at the same time, we are seeing really good opportunities in DSS and CSS also to grow in future as well.

I think one point which you touched upon is introduction of new products. I just want to understand at the company level, do you actually track it? We need to bring out X new products every year because all the products go through testing, etc. Do you have a number and what is that?

So I think in terms of new products, basically, of course, there are two angles to this. One is whatever existing products we have developed, we still have a lot of opportunities to grow. But we are more customer driven. For example, when we started this studs manufacturing, we understood that most of the studs manufacturers in renewable energy, including wind and hydropower segment, they are using a lot of bolts. And similarly, when we were developing our market for certs in industrial application, we identified that potential for certs is very less. In the industrial application, but their requirement is coming more from the bold side. So based on the customer situation and our market study, we are adding new products within the existing family of products. And at the end of the day, we are looking every year or every two, three years, we have to add some product family in each of our product category so that we are increasing the adjustable market size. For example, this spring is a very niche category of market, and adjustable global market size is only about 2,000 crores. But five years back, we added Gallup-Wagelop-Posher, which has additional 1,500 of the global market, and we are competing mainly with European producers. So, we will continue this focus on adding new products within the existing product family, and see that this growth and higher addressable market objectives are set to try.

Sorry. And do you also have...

Sorry for interrupting, Lakshmi Narayan. Sir, please come in for the follow-up question. Reminder to all the participants that you may press star 1 to ask a question. The next question from the line of Arpit Jain from RR Investment Advisory Private Intech. Please go ahead.

Yeah, hi. So thanks for giving me opportunity again. So there is one suit filed regarding bedlocked version. So could you please give an update regarding that?

Can you repeat the question?

Yeah, so there was a suit filed regarding very long washers.

Yeah, yeah, this is regarding the patent in question. Though no, the case is still going on, still the arguments have not taken place. We have been getting only adjustments. The next hearing itself is stated in June, June early. Not much movement has taken place, only submissions have been going on, but no arguments have taken place at all.

Okay, okay. Okay, that's it. Thank you. Thank you.

Reminder to all the participants that you may press star and one to ask a question. The next question from the line of Dhanesh Shah, who is an individual investor. Please go ahead.

Good evening, sir. Congratulations for a good set of numbers. I have few questions to ask. So, first is, sir, this SFS, which is Special Fastening Solutions, a business has crossed 1,000 INR million revenue in this year with 64% year-on-year growth. So, just wanted to know, sir, what are the key growth drivers expected for this segment over the next two to three years?

So, I think there are two, three growth drivers in SFS business what is being done. So, of course, with most of the customers still we have between 10 to 25% market share. And this share of business can be increased to 25 to 30, 35% because they will always keep a couple of sources. to diversify the supply chain risk because of very large vines. So, there is still room to grow with the existing customer for existing products. Second important point is we just started a plant in Chennai where we are manufacturing high tensile bolts which are also used in wind turbine sector. And we started getting approval from the Indian OEM. And we started supplying in quarter four. So we just started this journey and we see next two to three years ramp up happening in the bold business growth. And once we stabilize the supply chain in India, we'll also focus on the global OEMs for Europe and U.S. markets. We are already supplying the studs. Most important is, till now, our major growth was given by the renewable energy business, but because of bolts and nuts, we are seeing a lot of opportunities within industrial sector, where we are seeing opportunities coming from gas turbine sector, we are seeing opportunities in railways, construction equipment, mining equipment, and agriculture equipment, where we already started the market development, and already started getting really interesting inquiries, and some orders have been frozen recently. So, with industrial sector, where Gala has very strong track record of customers because of distributing relationship for over 25-30 years, we are seeing this bold addition as a product will really help us to grow. So, I think the SFS growth journey definitely will continue at a good pace because of the three reasons mentioned.

Okay, sir. Thank you, sir. It was a really good answer from you. Sir, as you said regarding the wind turbine partners, I can see that wind turbine partner supplies have actually commenced on for global OEVMs. So, just wanted to understand the scale of opportunity which is expected from the offshore wind over the medium term for the company.

Yes. So, we just entered offshore last year, which is April 26th with the global OEM in Europe. And in short term, in two to three years, offshore wind partners should contribute about 10% of our partner sales. So that is the visibility as of now we have. But of course, we are working internally to add more offshore wind customers and see this business to continue to grow as well.

Okay, sir. One last question, sir. Like, what is the target export contribution you are expecting for the company over the next two to three years? Currently, you are having something around 35%.

So, like, yeah, the export will continue to be between 35 to 40% of our sales. And depending on the new product edition, new customer edition, this may vary on year-on-year basis, but broadly, this will remain between 35% to 40% of our total sales.

Okay. Okay, sir. Got it. Thank you so much, sir. All the best.

Thank you. We have next question from the line of Laxminarayan KG from Tunga Investment. Please go ahead.

Thanks again. I just want to understand, in terms of metallurgy, do you also do powder metallurgy or do you do the regular one in terms of making pasta? Or do you intend to also green powder metallurgy?

No. So, we basically buy material in a sheet, coil, or wire form, or rod form, and from there, all the production manufacturing process starts. We don't use powder metallurgy.

Okay. Okay. That's all, sir. Thank you.

Thank you. Thank you. Next question from the line of Tanya Arora, who is an individual investor.

Please go ahead. Sanya and Aurora, your line is unmuted.

Please ask your question.

Hello. Hi. Congratulations on your results. Just had a few questions. So, the first one is on the hedging policy. So, for our Euro and USD exposure. So, I just wanted to know what percentage of our exposure naturally held and what is the current hedging policy like?

See, basically for as far as editing is concerned, earlier we used to cover 20% of the total estimated export collection, we used to undertake forward cover, but now we have, there's been a change in the methodology, we have reduced that to 40%, so up to 40% of the total estimated export collection, we are undertaking forward cover. And there is, as far as, this is as far as Euro is concerned, US also, we follow the same methodology, but we also have import which has got a natural head. So, net of the US exports and net of imports, we again, that's the policy, we follow up to 40% of the total estimated collection, we undertake poverty cover, which is covering a period of 12 months from now.

Okay, got it. And, sir, on the recent tariff changes, have they created any opportunities in terms of exports or any additional customer engagements?

Satish, you are talking about EU India FTA or any other tariff?

Yeah, EU India.

Yeah, so I think for Gala products, which we have exported to Europe, currently 3.7% is the import duty, which is paid by our customers. And I think that we implemented in early FY27, oh sorry, in Jan 27. And by this implementation, the import duty will be zero on our products in Europe. But on other side, there is an impact possible of CBAM. On which European countries are working on. So we see this benefit, what will come as a FTA, will get nullified with this additional cost which our customers have to pay for imports from India. But during this process, I think there is a very positive feeling for European countries towards India. So that should definitely help Indian companies, including Gala, going forward in mid to long term.

Got it, sir. And lastly, just on the Chennai plant utilization, so I guess we were at almost 35% for FY26. So do we expect this to move forward to, let's say, 70% in this FY27?

Yeah, as I mentioned, overall capacity is going to be 120 crore by year end, and gradually we will be utilizing the phase 2 capacity, and hence we are seeing approximately 80 crore, something we will be achieving the manufacturing or sale value in next year, which is going to be approximately 67-70% of 120 crore.

Perfect, sir. Thank you, and all the best.

Thank you. Thank you. Reminder to other participants that you will press star event to ask a question. Next question from the line of Rasha, who is an individual investor, please go ahead.

Mr. Rasha, your line is unmuted. Please ask your question.

So, we didn't get any response from the line of Mr. Raj Shah. We take the next question from the line of Arpit Jain from RR Investment Advisory Private Intent. Please go ahead. Yeah, hi.

Last question from my side. As you have mentioned in starting of the call, that you are looking for 2-3 plants, sorry, 2-3 plots in Vala. Right, so that plots will be on lease basis or it will be in the name of Vala only. Means we will own those plots or even these.

Yeah, so basically we are evaluating which are in the final stage. These are the two plots which are under evaluation, and we will finalize one or two plots, depending upon the overall size of the plot which we are able to finalize. And these are going to be on our own plot. In Vala, basically, these are industrial plots are there, which you can buy from the seller.

Got it. And in Chennai, the backup plan, we will leave if we will need to plot, right?

Yeah, correct. In Chennai, basically, the SIPCOT is a very good authority and they provide a very good developed plot with a lot of infrastructure. And there we have planned to take the SIPCOT long lease plot or as a backup plan, we can use an already developed plant and building where we can move the stud manufacturing facility.

Okay, okay. And as our margins saw a bit of dip this year from 17.5 to 16.5 this year, right? So when can we expect our margins to get back to 18-19% kind of number?

See, basically this dip, primarily the dip was only because of this product loss of one person, which is around 3.23 crore, which has impacted the current is margin. But going ahead, considering there's no further volatility, we expect the margins to stabilize between 70 to 90 percent.

By 27 end, right?

Correct.

Got it. Got it. Thank you.

Thank you. We have next question from the line of Sujal Jain from Walford PMS. Please go ahead.

Yeah, thank you, sir. Thank you, sir, for the opportunity. I just said one question. Did we get any benefit from currency depreciation or any currency impact in our numbers for quarter four?

See, I said that we, we normally see a currency, where currency depreciation is since then that we got it, there's a benefit of the top line also. Definitely there is benefit is there. But at the same time, it will, it also, because we, we undertake power source also to be a result in non-cash also. So, but benefit is definitely there in the top line because of the currency depreciation.

Okay, so any number that you can share in terms of like the benefit, if you can quantify?

I don't have the exact numbers, but

No, I will just answer this in separate way. So basically, there is a currency depreciation which gives the benefit in the short term. But that again, order to order, we have to, in the mid to long term, we have to keep reviewing with the customer. So, other side, there is an inflation and cost increase also. Like, for example, diesel got increased or other rental costs got increased. So, there is always a time-lap gap. Like, quarter to quarter, it is very difficult to say there is a net-net profit or loss because of the currency and overall cost. But mid to long term, we see, because we keep on passing the cost to the customer, they also keep on considering the foreign exchange gain or loss also while readjusting the prices. So net-net, we're thinking overall, we should be able to pass the cost to the customers.

Okay, okay, sir. Got it. Thank you for your answer and all the best for future.

Thank you. Thank you.

As there are no further questions from the participants, I now have confidence over to management for closing comments.

Thank you all for participating in this earnings consult. I hope we have been able to answer your questions satisfactorily. If you have any further questions or would like to know more about the company, please reach out to our IR manager at Valeram Advices. Thank you.

Thank you, all of you. Thank you. Ladies and gentlemen, on view of Aryan Capital Markets Limited, that concludes this conference. Thank you for joining us, and human audition, Ryan. Thank you.