Bharat Forge Limited ($500493)

Ladies and gentlemen, good day, and welcome to the Q4 and FY '26 Earnings Conference Call, hosted by Bharat Forge Limited. This conference call may contain forward-looking statements about the company, which are based on beliefs, opinion and expectation of the company as on date of this call. These statements are not the guarantee of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Amit Kalyani, Vice Chairman and Joint Managing Director, Bharat Forge Limited. Thank you, and over to you, sir.

Good afternoon, ladies and gentlemen, and thank you for joining our conference call today. As a standard, I will introduce the people with me and then our group -- our CFO, Kedar Dixit, will take you through the numbers. So I have with me my fellow board member and Head of the Components business, Subodh Tandale; I have Kedar Dixit, our CFO; I have Rajhagopalan, our Head of Investor Relations and M&A; and Chinmay and Sameer. So over to you, Kedar.

Thank you. Good afternoon, everyone. I'll just take you through the highlights of the quarter and for the year ended 31st March 2026. We'll start with the performance review of consolidated results, given that number of initiatives and investments we have made in new verticals as well as in the Indian manufacturing space. We ended the year with revenues of INR 16,812 crores and EBITDA of INR 2,921 crores, which has a growth of 11% in revenues and about 6% in EBITDA. Consolidated net debt to equity stood at 0.41 as of March 2026. During the year, the company also secured new businesses worth INR 4,814 crores across all key businesses, which includes the traditional business of INR 1,210 crores, Defence INR 2,816 crores. JSA, which is our casting unit, INR 292 crores and K-Drive, which is a recent acquisition, is about INR 500 crores. Talking about the standalone performance. The standalone business reported a revenue of INR 8,396 crores, which was lower by about 5% year-over-year. This was mainly on account of regulatory uncertainties in North America and demand challenges in U.S. CV market, which has impacted the performance. But as we speak, we are looking at good growth in this sector. Standalone EBITDA for FY '26 was at INR 2,312 crores, translating EBITDA margin of 27.5%. PBT before exceptional items was INR 1,826 crores, which was about 8% lower Y-o-Y. Talking about the quarterly year performance, standalone revenues for the quarter was up by 8.5% quarter-over-quarter at INR 2,260 crores. The quarter-on-quarter improvement in performance was driven by all around recovery in exports and strong performance in Domestic Automotive segment. Q4 was up at 7.2% sequentially at INR 610 crores, translating EBITDA margin of 27%. This also includes a onetime cost -- retrospective cost by MSEDCL, which had charges retrospectively of cess on the captive power, which is about INR 11 crores. Without that, the margins would have been closer to 28%. PBT before exceptional item was about INR 486 crores. During the quarter, company has absorbed tariff impact of about INR 12 crore. Balance sheet continues to remain robust with net debt to equity at 0.18 for the year. Talking about the overseas business, we have initiated the restructuring of our German steel business, which is CDP Bharat Forge. We expect to complete the process by end of next calendar. For other businesses in Europe, we are simultaneously pursuing various business opportunities to leverage the scale down manufacturing footprint. Performance-wise EU operations registered revenue of INR 3,865 crores and EBITDA of INR 151 crores, resulting in EBITDA margin of around 4%, while U.S. operations recorded a revenue of INR 1,534 crores, EBITDA of INR 54 crores translating to EBITDA margin of 3.5%. Now I will hand over to Amit sir for his comments.

So good afternoon, ladies and gentlemen. 2026 was a very interesting year. It had its own set of challenges, yet I think our team rose up to the challenges and really performed exceptionally well. It also was a year with a lot of uncertainty, especially to do with tariffs, which, to some extent, persists. And then we ended up towards the end of the year with a full-blown war taking place in the Middle East, which luckily enough seems to have subsided right now. And if everything goes well, it should really settle down and get resolved. I think this has had impacts and uncertainties on markets, inputs, transportation and many factors that affect our business. Given that background, I think we have weathered the storm well and ended on a stronger note with very good momentum going into the new year. I want to especially commend our sales and marketing, customer-facing teams, our supply chain teams, our operating teams and all the people in our company for really giving it there all and making this year, let's say, painless for our customers. Driven by a combination of new business initiatives and M&A over the past 3 years, BFL is now an engineering conglomerate entrenched across processes, customers and segments. This is an example of how we transform every 5, 6 years. Our balance sheet continues to remain one of our key strengths with a net cash position -- strong net cash position at a standalone level. The Aerospace business, which we have been talking about for quite some time, I'm very happy to report is now a meaningful part of our industrial exports and is now almost 26% of the last quarter's exports and is the second largest contributor to our industrial exports now. This segment has seen multiple new business wins, both across jet engine, structure, landing systems from global OEMs. We were recently selected by an Aerospace OEM as their first supplier from India for any critical components. Our acquisition of K-Drive is making significant progress and has also won a lot of new business from OEMs, which will start panning out from this year. On the Defence front, our business has spread well beyond artillery and vehicles to include small arms, naval solutions and a wide variety of unmanned platforms, both sea and air. The recent order wins are a testament to the progress made here with an order book of close to INR 11,000 crores. In the next 3, 4 years, we'll see stable revenue accretion in these sectors. In parallel, we are also focusing on expanding our product portfolio and participating in new programs to build a robust and scalable revenue pipeline over the medium to long term. I particularly see new opportunities in Europe for our Defence business. Castings, despite the challenges in the export market, especially in the wind sector because of the slowdown in wind infrastructure buildup, we have seen JSA continue to grow and increase both revenue and profitability going forward. And we are now expanding our customer base to cross-fertilize and to cross-sell these products into our existing customer base in the automotive and commercial vehicle sector. The recent capital raise from Premji Invest will help us drive capacity expansion and make this business an independent growth driver for Bharat Forge and the Kalyani Group. This week, we acquired a 30% stake in Fortuna Engineering, which is a company based in Nashik. This has a strong and experienced management team led by the promoters in machining. And it strategically is a very complementary fit to us because they make -- they do machining of connecting rods and some other high-value components, which are all complementary to what Bharat Forge does and in fact, also allows us to supply into them the forged components that they can machine. The company has a strong balance sheet and a net cash position. In e-mobility, as I mentioned in the investor -- in the television interview earlier, we have decided to take a write-off of those investments where we don't see any immediate revenue and business ramp-up because it doesn't make sense to spend time and effort on those areas, which are not going to give us returns immediately. As you are aware, globally, the electric vehicle adoption has taken a different trajectory as compared to what was originally envisaged. Additionally, our overseas business will also see a restructuring with our steel forging business undergoing a restructuring as we have explained earlier. We also intend to evaluate additional business opportunities in the automotive sector to leverage our market position, our customers and our footprint globally. To look at 2027 as a whole, I think it's going to be a strong year for our India manufacturing operations as the growth impetus across sectors and the kind of strategies we have put in place will bring in higher execution and growth. Barring any further geopolitical crises and their impact on demand, we should see a close to 25% plus growth in our India business. Our ongoing CapEx programs across forging, casting and products platform will translate into INR 800 crores to INR 850 crore CapEx in a 15- to 18-month period. We continue to evaluate potential M&A opportunities in India to address opportunities in high-growth sectors, which may be complementary and a good fit to our existing business. Thank you. I will now be happy to -- my team and I and Subodh both will be happy to take your questions.

[Operator Instructions] Our first question comes from the line of Kapil Singh from Nomura.

Congratulations on a good performance for the quarter. Firstly, I had a question on your target growth for FY '27. Could you give some more color and break it down between different segments? Broadly, what kind of growth you expect in Defence, U.S. exports for CVs, non-auto and domestic?

Yes, I'm not going to break it up into that much detail. Let me just tell you, we will see the highest growth coming from our Aerospace business and then defense business and the automotive business. When I say automotive, I mean the Components business, which includes both automotive and industrial.

Okay. And sir, what is the outlook for domestic and global CVs?

Outlook is strong for both. U.S. is very strong and so is India.

Okay. Sir, you also mentioned that we have acquired Fortuna. Could you give us some color in terms of revenues, where does it stand? And what is the potential here?

Yes. So we have acquired 30% for INR 130 crores. The company has a revenue of about INR 380 crores, and they have a net cash position of about INR 20-odd crores. And they are on a growth path to increase multiple x by setting up new machining lines. And also, we will open doors to them for our customers because they don't make the very large parts that we make. So large connecting rods is a big opportunity to supply globally.

Okay. And will it be safe to say that the growth target also includes inorganic opportunities like these?

So we don't currently have any other inorganic, which is ongoing. But as we have mentioned, we will look at opportunities within India that makes sense for us in the automotive industrial space.

Sorry. Just one last question. You mentioned that the electrification has taken a different path from what we were originally anticipating. Could you elaborate a little bit?

Yes. About 5 years ago, there was a very strong focus on electrification across the board, including commercial vehicles, including heavy commercial vehicles. However, it is definitely not seeing the same kind of, let's say, trajectory as what was anticipated. Secondly, the -- even the large European OEMs are not as successful in the passenger car sector on electrification. As you have seen, both the Porsche, Ford, many companies have had massive hits and write-offs because they have not been able to build a platform that has been as competitive as those that the Chinese offer. So there has definitely been a recalibration of everybody's EV strategy globally, except the Chinese, of course.

Our next question comes from the line of Binay Singh from Morgan Stanley.

Team, congratulations on a good set of numbers...

Sorry, we can't hear you. Can you speak a little louder, please?

Team, congratulations on a good set of numbers. My first question is on your restructuring. You highlighted that it will conclude by end of CY '27. So could you share your thoughts on that? And in the intermittent phase, which is this year and next year, will the losses be at similar level? Like this year, you had almost a INR 300 crore loss also on the Europe and U.S. operations. So that -- I'm happy to hear your comments on that.

So the restructuring of CDP has started. This is a 15- to 18-month process where we have to meet the customer requirements and also do a solvent liquidation of the company. This -- we anticipate the losses will reduce because the CDP losses are not going to be there. Whatever is there will be part of the restructuring. So hopefully, for the year that goes by, we will have a better performance from our overseas subsidiaries.

Just on Aerospace, what exactly was the number for FY '26 for you?

It was about INR 400 crores.

And lastly, just on Defence. In the last call, we talked about our revenue guidance on Defence of 30% to 40%. But just looking at the order book, what are the key sort of milestones to watch out for? You've talked about opportunity in Europe and all, but any key things that we should expect or milestones to see this year?

So the first thing that you should look at is the fact that the ATAGS -- FAT will happen and then the ATAGS production will start and ramp up. The second is the CQB Carbine also production will happen. So those are the 2 big milestones that will move the needle starting this year, and then it will continue next year and year after next as well.

Anything on the order backlog, any large projects that you are bidding for?

This will start in the second half of this year, please remember.

Yes, yes. And anything on the order wins, any incremental order book?

So we have, as Kedar mentioned in his initial talk, we have won new orders in Defence as well, in the space of naval and drone systems. And we have lots of other new products that we are both developing and fielding that go into a variety of platforms, including Navy. And hopefully, those should all now start -- the orders -- I mean, the bid should open and then we should know where we stand.

Our next question comes from the line of Gunjan Prithyani from Bank of America.

Just a couple of clarifications on this Aerospace and Defence. In Aerospace, you mentioned INR 400 crores for full year. And you also mentioned 26% of exports in quarter 4, which essentially means exit run rate of almost INR 300 crores. So is that the number we sort of work through for the next year that it can be INR 1,000 crores, INR 1,200 crores Aerospace business?

What I said is that industrial exports for Q4, Aerospace was about 26% of the overall export from industrial. So in any case, we are -- if you look at INR 400 crores as the business we did for the whole year, we will see a strong double-digit growth higher than the overall growth that we are anticipating as a company, significantly higher.

Okay. Got it. But is similar like what we are saying for Defence as well, that 30%, 40% sort of growth. So these businesses should sort of clock that number...

As I mentioned earlier, the highest growth will be Aerospace, then Defence and then the Components business. And in Components, I include all the components that we make.

Okay. Got it. And again, the clarification on the sub piece that you mentioned, the restructuring has initiated. Do the losses from this German subsidiary completely go away from the operating number because restructuring is bigger?

Sorry, what will go away? No, it will go away when it get wound up.

Which is basically end of next year -- next calendar year.

Yes. Yes.

Okay. Got it. Now just moving to the data center, which was mentioned in the media. Is there something that you just want to give us a sense on what are we doing there and...

No, I don't want to talk more about it, but suffice to say that data center has a large amount of manufactured input that goes into it, in the auxiliaries, in every element of managing, powering and supporting a data center. And those are all areas where we supply product into.

Okay. Got it. And last question on the CV business, both in Class 8 as well as in India. I think just generally, there is a concern that as energy prices, particularly, we've already seen them move up in U.S. How do we think about -- how confident are we of the growth outlook, both Class 8 as well as the India CV?

My colleague, Subodh, will answer.

Currently, that is a common problem everywhere in the world, the energy prices going up. But you have to also take into consideration that there is an aging fleet in the U.S., and they have a certain calculation for that in terms of what they have to replace and when. And from that perspective, the demand is expected to remain strong for the rest of the year for sure. There is also an emission change coming in early next year. So as a combination of all this, there is a strong hope that the demand in the U.S. will remain strong. And as far as India is concerned, yes, there is an increase, but there is also overall increase of economic activity. So from that perspective, the energy shock is there, but it is going to get absorbed in the system by passing it along the whole value chain. So we expect that there should be reasonably stable demand.

The existing like pipeline that you see...

Gunjan, I'm sorry to interrupt you, but you may please rejoin the queue for more questions. [Operator Instructions] Our next question comes from the line of Arvind Sharma from Citibank.

On the 25% growth target for the India operations, is it possible to share how much would be in the stand-alone business? How much do you expect in the Indian subsidiaries?

No, I'm not going to break it down into all that. It gives too much information. Let's just limit to say that it's going to be at an overall India level -- manufacture in India.

It will be between the stand-alone and the Indian subsidiary. That understanding is correct?

Sorry?

It will be the combined stand-alone as well as the Indian subsidiaries. That understanding is correct.

Yes. Correct.

Correct.

Sure, sir. Sir, also on the orders that you alluded to, almost INR 4,800 crores, including the Defence orders of INR 2,800 crores. What would be the typical gestation period of these new orders won? Just from our perspective, when should we expect the revenue start accruing? Is this something that you can share?

Yes. Actually, we talked about this a little while earlier that if you look at the ATAGS order that will start revenue in the next half of the year, same with the carbines. And some of the data center orders will also start slowly from the end towards the third quarter, fourth quarter and then really ramp up next year. But everything will start ramping up from this year. I mean product development will start from this year and ramp up next year.

And sir, if you could just comment on the commodity costs, anything that you would like to stress upon?

So right now, the biggest issue on cost is energy cost, which has gone up quite substantially and elements that depend very heavily on energy, those have gone up. But that we are negotiating with our customers to get compensation, correct?

Our next question comes from the line of Pramod Amthe from Incred Capital.

So continuing on the previous question in terms of cost, do you see worst is behind or it's still a very volatile environment? And also similarly, in terms of supply chain challenges, how are you seeing it?

You want to take it a day at a time because we are living in a time where what's happening in the world depends on which news channel you watch. So it's not really the old rules of the game anymore. Every hour, every minute, things are changing. But we're doing the best we can. So as a country also and as an organization also. So I don't know if I can say the worst is behind us.

Okay. And the second one is with regard to the recent acquisition for machining facility. You already have a machining facility in-house, and this seems to be like your captive facility, which you acquired. How do you see -- what's the reason to do it? And how do you see make versus buy in such form decisions? Is there any worthwhile time saving you are doing here or capability addition?

Sorry, sorry, say that again?

No, I said you bought this entity.

Yes, go ahead, Subodh.

So Pramod, the reason of acquiring this entity is it is very synergistic to what we do today. And we also cannot do everything ourselves. We need the bandwidth to be able to grow in a quantum manner. We will also be addressing many segments that we have not addressed in India so far as a part of this resource that we have, not just in India for that matter, even outside India. And we have actually already started getting a lot of positive interest from our existing customers to be able to do that. So the whole idea is growth related more than anything else.

And you mentioned top line and profit...

I'll add to one thing Subodh said, it's not just growth that is fast growth.

Okay. And what type of margins does it operate in EBITDA margins or EBIT margins that business?

It's mid-teens.

Our next question comes from the line of Nitin Arora from Axis Mutual Fund.

Just on the explosives side on the Defence, how we are thinking about this business because there is a lot of demand globally as well. So when do we see this CapEx happening? And when do you see scale starts becoming bigger for you just on the direction side?

So first of all, we don't have an explosives business right now. But as we have mentioned, Mr. Arora, that we are planning to set up a facility. And the facility we are planning is going to come up in Andhra Pradesh, and we are going to do the groundbreaking of this month.

So FY '27 is where we see -- sorry, FY '28, where we see pretty heavy -- and how much CapEx...

Let me just caveat that by saying that you need a hell of a lot of approvals before setting up such a facility and after setting up a facility like before you can start production. So our goal is to break ground this month and start the preparatory work. And then once we get our approval, start construction by the end of this year, and that should be ready in less than 15 months. And then another 6 to 8 months from then, we should be able to start pilot production. You're talking about roughly 24 months.

Our next question comes from the line of Sonal Gupta from HSBC AMC.

Amit bhai, heartening to see we're aggressively moving and you've done a lot of acquisitions this year in India, I mean, like with the K-Drive as well as Fortuna. So in that context, I just wanted to understand the capital raise, external capital raise in JSA, why are we doing that, right? Like I mean that's something that we can internally fund it as well...

No, that is a minor thing, actually. And honestly, we see a large opportunity in JSA. But it's -- we wanted to make it an independent business and grow it because we see that, that business could become a multi-thousand crore business per year because if you see the biggest ingredient of -- in that industry is energy and raw material. And both those factors are not available in required quantity or price in Europe. So we see a large opportunity to move that manufacturing into India. So we want to expand that fast. And we want to do it with its own momentum and steam. So that was the reason to do it. And I think there are other synergies that could come out of that relationship as well.

So you're saying that by doing this external, they can grow faster than what they would have done if we've done internally?

Yes, I want to -- I also want to build a new model where companies that we buy, which are like that, become more focused on their own growth and become self-sufficient. Yes, we will support them on whatever customer connect, et cetera, that we can do. But I think they need to drive their growth more aggressively and not get limited by just what we can provide them.

Okay. And sorry, the second question I had was on the ATAGS. I mean, what sort of capacity have we now ramped up to? And when do we see this really?

No, we talked about this that second half of this year, we will see that FAT getting completed and then hopefully, production and supplies to start.

So I think earlier you mentioned that we were -- initial capacity is like 5 guns a month. Is that what we are looking at or...

Yes, that's what we can do, yes.

Our next question comes from the line of Ronak Singhvi from NAFA Asset Managers.

So I want to get specific about the 155 mm artillery shells. So what is the current capacity?

I'm not going to discuss that. Let's just say that we have adequate capacity, and we are producing a large number of them.

Okay. So like can you just say further you are going to go into explosives or [indiscernible] guidance or just the empty shells?

Again, I've already answered this just before when Mr. Mehra, I think, asked a question. Mr. Arora asked the question. We are definitely going to get into explosives.

Our next question comes from the line of Nitin Jain from Fair Value Equity Advisory.

Congratulation on a good quarter. So my first question is on the Aerospace business. If you could provide some outlook on the business, where do we see it in the next 3 years? And what are the kind of margins we have here? Like are they above company average or in line with the company margin?

So I would say the margins are above the company average. And if you remember, Mr. Jain, that over the last 3 years, we had said the first goal is to INR 500 crores, INR 600 crores, INR 700 crores and then get to INR 1,000 crores. I think that's -- we are on that trajectory. And sooner than later, we should cross that and then be on a very fast growth path after that. Getting to the first INR 1,000 crores is hard. After that, it becomes -- you create lines of business, you create product strategies and then multiple products can become INR 400 crores, INR 500 crores each, maybe even more. So we're on that path.

Okay. So safe to assume that we are targeting around INR 1,000 crores in the next 3 years or so?

Easily. Easily. I would say even more than that.

Okay. Great. Also, can you provide some color on the kind of revenue opportunity we are targeting in the server manufacturing business in the next 2 years?

No, no, no. We are not looking at that business aggressively. We were trying to look at that business to understand the data center market. And I think we've understood what we want to do and what we don't want to do. There are some specialty opportunities where there are certain critical clients who want domestic-made servers made by an Indian company, those we will look at. But those are not very large opportunities at this point in time. They are more a strategic opportunity, and it's an opportunity to get into the whole value chain of the data center. So that's what we are looking at it. I wouldn't look at it as getting into electronics in a big way kind of thing.

Okay. That's quite helpful. Congratulations.

Our next question comes from the line of Mitesh from Aditya.

Yes, I have a question regarding the Odisha project...

Sorry, which company are you with?

Aditya Equity Investments. Sorry, I forgot to write the full name. Yes, I had a question regarding the Odisha project. So when is the environmental clearance expected for the project? And when do you expect to break ground for the project?

We are waiting still. So I don't know, maybe another 2, 3, 4 months.

Our next question comes from the line of Het Raichura from Ananya Research.

[Technical Difficulty]

I'm sorry, sir, but your voice is not audible.

So I just want to understand the...

Can you please -- maybe we can take this offline. I'm not able to hear you. I think you should call our team separately and talk to them. We are not able to hear you at all.

Our next question comes from the line of Rakesh Roy from Boring AMC.

My first question is, sir, can you give me the full year Defence revenue for FY '26?

INR 1,300 crores -- sorry, full year revenue for Defence, sorry, INR 1,562 crores.

Right, sir. Right, sir. And sir, my next question, sir, recently, Army issued an RFI for bulletproof troop carrier. Are we bidding for this?

Yes, we're bidding for lots of new programs with the Army.

Okay. And can you highlight on this, sir, recently, one project is launched -- one product is launched in defense, especially Vikram VT-21 with DRDO and Tata, how's the market size and where we are currently?

Sorry, sorry.

Vikram VT, TATA.

Yes. We launched our wheel platform, and we also had our track platform there.

Right, sir. And how is the market...

I didn't understand the question.

My question is, sir, how is the market size for this product, especially for Army...

Replacing the old [ BMPs ] that Indian Army has huge numbers of.

Okay. Any idea how much number for domestic market and for export market, what's your point of view?

Globally, the market is in tens of thousands.

Our next question comes from the line of Mahesh Bendre from LIC Mutual Fund.

Sir, what kind of capital expenditure we are looking for next 3 years?

I'm telling you right now, what we have ongoing between last year, this year and -- between last year and this year will be about INR 800 crores.

Okay. Sure. And sir, since the Defence business -- Defence business is becoming bigger with various dimensions, any plans of hiving up this business, maybe creating a new entity or bringing any...

I mean we have thought about -- as you know, we've already spun it off into KSSL.

Right, right. But in terms of creating value for investors, are there any plans...

I hope we are creating value.

In terms of listing this...

That we will look at it separately.

Next question comes from the line of Nitin Jain from Fairwell Equity Advisory.

My question is, given the importance of drones in modern warfare, like we have seen in Operation Sindoor and other operations, what kind of presence do we have in drone manufacturing?

We are already making drones for land, sea and air. I would say that undersea and the sea part, we are very strong in. The air part, we are getting stronger. The land, we need to do more work. We have already won orders in both the air and the sea domain.

Right. Would it be possible to provide any percentage in terms of our Defence business?

No, not right now.

Ladies and gentlemen, that was the last question for today. I now hand the conference over to Mr. Amit Kalyani for closing comments. Thank you, and over to you, sir.

I think -- if there are any last questions, 1 or 2, let's finish them, and then we can close. I just saw that there are 2 names.

Sure, sir. Our next question comes from the line of Akshay Karwa from Aviva India.

Pertaining to...

Can't hear you. Sorry, Akshay, can't hear you.

Sir, my question pertains to the manufacturing of jet engines. So with the recent companies coming -- with private companies coming into foray for this, how long do you think would we be ready to create our own localized jet engine in the near term?

Are you talking about an engine for a manned or unmanned platform?

Manned platform, sorry.

Manned platform will take quite some time. I would say, not less than 5 to 10 years, but unmanned can happen very, very fast. Already, we are supplying small jet engines for a number of drones, and we are now going to be making bigger ones also for unmanned systems. And these are completely made in India in-house. They are designed, engineered and manufactured, range of 40 kilos to 150 kilos.

Understood that. My question revolves around the recent AMCA business, the AMCA engines. So regarding that, as you said, 5 to 10 years, so which of these company do you think would be able to get this order [indiscernible]?

So for AMCA, look, the whole program is going to be a down selection first of the consortium and then first prototype in 32, okay? So it's still a long ways away. And initially, AMCA will be powered by imported engines.

Last question comes from the line of Radha from Motilal Oswal.

Sir, my question was on K-mobility business. Can you give us some insights on how the growth will be driven in this business beyond the normal CV industry growth? Will it be exports and gaining new customers? Or will it be from...

It's a good question, Radha. We're looking at the specialty axle business and the LCV and SUV axle business, including EV for those, both ICE and EV. So that is what's going to drive the growth there.

So can this take the business 2 to 3x in the medium term? Is there this kind of scalability opportunity?

Yes, there is 2x in next 3 to 4 years is definitely possible. And if we have -- if we are a little more lucky and we get into some specialty axles, it could be even better.

And what is the peak margins that can be made in this business?

I think it's too early to say, but our goal is a good mid-teens margin in this business.

All right, sir. Sir, second and last question is, how is the demand scenario in North America and Europe passenger car segment? And what is driving the demand here?

U.S. is strong. Subodh is on...

Strong demand in the U.S. is stable. When I say stable, last year's total -- the market size was about 16, maybe 16.1. It's more or less going to be the same forecast for this year. Demand is reasonably okay. We don't expect any changes. In Europe, we have to see because Europe will obviously face a little more challenges given how long the war is protracted. So we have to watch what happens in Europe. But by and large, it is stable as compared to last year. That's the outlook.

Ladies and gentlemen, thank you very much for your time and interest and your support to our company. Really appreciate it. And we will remain in touch and our teams are available if you need any further input. Thank you, and have a nice day.

Ladies and gentlemen, on behalf of Bharat Forge Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.