Carborundum Universal Limited (CARBORUNIV) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Carborundum Universal Q1 FY '27 Earnings Conference Call hosted by DAM Capital Advisors Limited. [Operator Instructions] Please note that this conference has been recorded. I now hand the conference over to Mr. Kunal Shah from DAM Capital Advisors Limited. Thank you, and over to you, sir.

Yes. Good afternoon, everyone. Welcome to the 1Q F '27 Earnings Call of Carborundum Universal Limited. From the management side today, we have Mr. Rangarajan, the Managing Director; and Mr. Chandramouli, the adviser. At this point, I'd like to hand over the call to the management for their opening remarks, post which we can take up the Q&A. Thanks, and over to you, sir.

Good morning. I'm Chandramouli. Let's start the proceeding with the disclaimer. During this call, we may make certain statements which reflect our outlook for the future or which could be construed as forward-looking statements. These statements are based on management's current expectation and our associated with uncertainties and risks are more fully detailed in our annual report, which may cause the actual results to differ. Hence, these statements must be reviewed in conjunction with the risks that the company faces. Thank you.

Thank you. Good morning to all of you and a very warm welcome to our first quarter earnings call. I hope you and your family members are safe and doing well. We'll begin the call by providing an overview of the performance, and then we will take up your questions. Begin with, I'll start with the stand-alone performance. In Q1 FY '27, stand-alone sales were INR 846 crores compared to INR 698 crores in Q1 FY '26, which is a growth of 21.2%. Growth at a stand-alone level was broad-based and driven by all 3 segments. The Electro Minerals segment grew by 33%. Ceramic segments grew by 15.2% and Abrasive segment grew by 14.7%. On a sequential basis, stand-alone sales was INR 846 crores compared to INR 845 crores, so almost flat. Sequential growth was driven by EMD, which grew by 12.2% but the Ceramic segments declined, marking a decline of 1.6% and Abrasive also declined about 6.9%. Both due to seasonality of the business. Stand-alone profit after tax in Q1 FY '27 stand-alone PAT was INR 88 crores compared to INR 77 crores in Q1 FY '26 without the impact of onetime dividend of INR 68 crores received from a subsidiary in Q1 FY '26. This marks a growth of 14.3% on a like-to-like basis. On a sequential basis, PAT declined by 28.3% from INR 120 crores in Q4 FY '26 to INR 88 crores in Q1 FY '27. Profit of Q4 26 included dividend income of subsidiaries and JVs of INR 30.5 crores compared to a dividend income of INR 14.5 crores in Q1 FY '27. Besides this, it also reflects the seasonality of the business. Consolidated sales in Q1 FY '27. Consolidated sales were INR 1,411 crores compared to INR 1,207 crores in Q1 FY '26. This is a growth of 16.9%. On a sequential basis, the consolidated sales grew by 2% from INR 1,383 crores to INR 1,411 crores. Consolidated profit after tax in Q1 FY '27, consolidated PAT was INR 76 crores compared to INR 62 crores in Q1 FY '26, which is a growth of 23.4%. Sequentially, the company reported a PAT of INR 76 crores in Q1 FY '27 compared to a loss of INR 18 crores in Q4 FY '26. If you remember, consolidated PAT in Q4 '26 included exceptional items, cost of about INR 135 crores related to CUMI AWUKO Abrasives and Foskor Zirconia Private Limited. Segment results and PBIT of stand-alone, I will cover now. In Q1 FY '27, segment results of stand-alone increased by 24.1% from INR 106 crores in Q1 FY '26 to INR 132 crores. Electro Minerals PBIT increased from INR 7 crores to INR 39 crores, while Ceramics and Abrasives PBIT declined marginally to INR 59 crores and INR 34 crores, respectively. Stand-alone PBIT was INR 115 crores in Q1 FY '27 compared to INR 98 crores in Q1 FY '26, excluding the onetime dividend of INR 68 crores in Q1 FY '26. On a sequential basis, segment results dropped by 9% from INR 145 crores to INR 132 crores as higher EBIT in EMD and Ceramic was offset by decline in Abrasives. Electro Minerals PBIT increased from INR 28 crores to INR 39 crores. Ceramics PBIT increased from INR 57 crores to INR 59 crores, while Abrasive PBIT declined from INR 60 crores to INR 34 crores. Segment result and PBIT of consolidated, I will cover now. In Q1 FY '27, segment result was INR 133 crores compared to INR 89 crores in Q1 FY '26 and INR 112 crores in Q4 FY '26. Q1 FY '26, consolidated PBIT was INR 114 crores compared to INR 81 crores in Q1 FY '26 marking a growth of 40.9%. On a sequential basis, consolidated PBIT increased by 11.6% from INR 102 crores in Q4 FY '26 to INR 114 crores in Q1 FY '27. Now I'll cover the segment performance. We'll take our first Abrasive segment. Consolidated Abrasives in Q1 FY '27, consolidated Abrasives sales were INR 610 crores compared to INR 508 crores in Q1 FY '26, which is a growth of 20.1%. On a sequential basis, sales remained flat at INR 610 crores. In Q1 -- stand-alone Abrasives in Q1 FY '27, Abrasives sales were INR 328 crores compared to INR 286 crores in Q1 FY '26, which is a growth of 14.7%. Growth was driven both from domestic as well as export. On a sequential basis, sales declined by 6.9% from INR 353 crores in Q4 FY '26 to INR 328 crores in Q1 FY '27. On a quarter-on-quarter basis, all segments contributed to the growth. Growth were predominantly volume driven and very small price increase. I'll now cover the RHODIUS Abrasives. In Q1 FY '27, RHODIUS sales were EUR 15.6 million compared to EUR 13.2 million in Q1 FY '26, which is a growth of 18%. In Q1 FY '26, sales had been impacted by an operational transformation of logistics or warehouse facility in the company. On a sequential basis, sales increased by 1.1% from EUR 15.5 million in Q4 FY '26 to EUR 15.6 million in Q1 FY '27. Growth was more pronounced in INR terms on account of the depreciation of INR against euro. In INR terms, Q1 '27 sales was INR 172 crores compared to INR 128 crores in Q1 '26, marking a growth of 33.9%. On a sequential basis, sales increased by 4.3% from INR 165 crores to INR 172 crores. In Q1 FY '27, RHODIUS reported a loss after tax of EUR 0.7 million compared to a loss after tax of EUR 1.6 million in Q1 '26, representing an improvement of EUR 0.9 million. In Q4 '26, RHODIUS recorded a PAT of EUR 0.44 million. During the last call, we said RHODIUS could grow by 5% in FY '27 and that there could be a small loss at the PAT level. We maintain the same guidance. Now I'll move to CUMI AWUKO Abrasives. In Q1 FY '27, AWUKO continued to operate to meet some of the -- fulfilling the existing orders that they have taken from the customers. Sales were EUR 2.89 million compared to EUR 2.6 million in Q1 FY '26, a growth of 11.1%. On a sequential basis, sales increased by 9.9% from EUR 2.63 million in Q1 -- Q4 FY '26 to EUR 2.89 million in Q1 FY '27. In Q1 FY '27, AWUKO reported a loss after tax of EUR 1.69 million compared to a loss of EUR 0.9 million in Q1 FY '26. On a sequential basis, the loss after tax, excluding exceptional items from EUR 2.63 million in Q4 '26 to EUR 1.69 million in Q1 FY '27. In FY '26, Q4, CUMI International Limited, the holding company of AWUKO had approved to initiate the closure of the company through a voluntary winding up process under the applicable laws in Germany. Following this, exceptional items amounting to INR 119 crores were recognized in the consolidated P&L of CUMI in Q4 '26. We are trying our best to complete the process in a quarter or so. We will update you when we meet in the next quarter. I'll cover the Abrasives PBIT of stand-alone and consolidated. At consolidated level, Q1 FY '27 PBIT was INR 440 crores compared to INR 11 crores in Q1 FY '26 and INR 32 crores in Q4 '26. PBIT for the quarter ended June 30, 2026, included a gain of INR 25 crores from Sterling Abrasives Limited, a subsidiary of the company, arising from the transfer of leasehold rights of immobile property and related buildings. At the stand-alone level, in Q1 FY '27, PBIT was INR 34 crores compared to INR 37 crores in Q1 FY '26. PBIT margin declined from 13.1% to 10.4%. On a sequential basis, PBIT declined from INR 60 crores in Q4 FY '26 to INR 34 crores in Q1 FY '27. While PBAT margin declined from 17.1% to 10.4%. Last year full year, the PBIT margin of Abrasives stand-alone was 15.3%. Considering this, there's a drop of, say, INR 15 crores to INR 16 crores of PBIT in this quarter. The U.S.-Iran conflict started in end Feb '26. There was a truce in between, giving hope of normalization. April saw a nominal cost push. May onwards, we began to see a significant cost push. The overall cost push is around INR 16 crores. Besides this, raw material cost push, normal inflationary cost push on the other costs were there. These were offset by the normal price increase realization that we had. Compared to Q4, the drop in PBIT is due to volume drop and cost push. Normally, Q1 is a lower quarter compared to Q4 due to seasonality. The volume drop impact is around INR 8 crores to INR 9 crores. This, along with the cost push are the reason for the drop in PBIT. I will cover now the EMD segmental performance. Consolidated Electro Minerals. Consolidated Electro Minerals sales were INR 473 crores compared to INR 405 crores in Q1 FY '26, which is a growth of 16.8%. Growth was driven by stand-alone Electro Minerals, which saw strong demand, both domestic and export. On a sequential basis, sales increased by 10.7% from INR 427 crores to INR 473 crores. Stand-alone Electro Minerals. In Q1 FY '27, sales were INR 282 crores compared to INR 212 crores in Q1 FY '26, marking a growth of 33%. On a sequential basis, sales increased by 12.2% from INR 252 crores to INR 282 crores in Q1 FY '27. Growth was largely volume driven, predominantly export-centric. VAW Russia, sales of VAW Russia was about RUB 1.58 billion compared to RUB 1.84 billion in Q1 FY '26 marking a drop of 14.1%. In INR terms, Q1 FY '27 sales were INR 201 crores compared to INR 195 crores in Q1 FY '26, marking a growth of 3.1%. On a sequential basis, sales increased by 24.1% from RUB 1.27 billion in Q4 '26 to RUB 1.58 billion in Q1 FY '27. In INR terms, on a sequential basis, sales increased by 34.4% from INR 149 crores to INR 201 crores. In Q1, PAT was RUB 52.1 million compared to RUB 71.5 million in Q1. I'll move to now Foskor Zirconia. In Q1 FY '27, Foskor recorded a sales of ZAR 107 million compared to ZAR 121 million in Q1 FY '26, marking a decline of 11.7%. On a sequential basis, sales declined by 14.7% from ZAR 125 million in Q4 '26 to ZAR 107 million in Q1 '27. Foskor, a 51% subsidiary of CUMI International, Cyprus was determined commercially unviable due to sustained loss, rising input costs and marketing pressures. Accordingly, in FY '26 Q4, the consolidated FY '26 financials included INR 16 crores of asset write-down of various assets of Foskor Zirconia. We are evaluating all options, and we expect to reach a solution in a quarter. When we meet in the next quarter, I'll update you the progress that we are making. Electro Minerals PBIT, both stand-alone and consolidated. In Q1 FY '27, stand-alone Electro Minerals PBIT was INR 39 crores compared to INR 7 crores in Q1 FY '26. On a sequential basis, PBIT increased by 40.3% from INR 28 crores to INR 39 crores in Q1 FY '27. Consolidated Electro Minerals PBIT was INR 22 crores in Q1 FY '27 compared to INR 4 crores in Q1 FY '26. Consolidated PBIT of Q1 FY '27 had an impact of loss of INR 17 crores from Foskor Zirconia, which I just explained. On a sequential basis, consolidated PBIT increased by 14.9% from INR 19 crores to INR 22 crores. I'll now move to Ceramics. In Q1 FY '27, consolidated Ceramic sales were INR 349 crores compared to INR 300 crores in Q1 FY '26 which is a growth of 16.5%. On a sequential basis, Ceramics segment sales decreased marginally from INR 351 crores to INR 349 crores. I'll cover the stand-alone Ceramics now. Stand-alone Ceramic sales were INR 274 crores in Q1 FY '27 compared to INR 238 crores in Q1 FY '26, which is a growth of 15.2%. Quarter-on-quarter growth was driven by industrial ceramics as well as the refractories business. On a sequential basis, stand-alone Ceramics sales declined by 1.6% while Industrial Ceramics grew well, refractories had a sequential drop. Refractories business is project-based and besides this, Q1 in general is a lower quarter in Refractories business. I'll now cover the Ceramics PBIT. Q1 FY '27 consolidated Ceramics PBIT was INR 74 crores compared to INR 75 crores in Q1 FY '26, remaining broadly flat. A stand-alone PBIT was INR 59 crores compared to INR 62 crores in Q1 FY '26. PBIT of IC remained flat despite the top line going up. The reasons are cost increase in fuel, alumina, unabsorbed costs in new lines of semicon and aerospace and defense capacities. We expect this to improve over the next few quarters. We feel we'll be at higher end of the guidance at the full year. On a sequential basis, consolidated ceramic PBIT increased by 19.1% from INR 63 crores in Q4 '26 to INR 74 crores in Q1 '27. Stand-alone Ceramics PBIT increased by 3.5% from INR 57 crores to INR 59 crores. While IC PBIT grew up well, this was offset by the lower PBIT in refractories due to volume drop in line with the seasonality. Consolidated CapEx in Q1 FY '27 was INR 53 crores compared to INR 64 crores in Q1 '26. We gave a guidance of INR 400 crores for the full year FY '27, and we keep the same guidance. Consolidated debt-to-equity ratio is at 0.05. Unallocable expenses, stand-alone unlockable expense of Q1 FY '27 was INR 17 crores compared to unallocable income of INR 60 crores and unallocable income of INR 11 crores in Q4 FY '26. The variance was primarily due to the dividend income received from the subsidiary in the comparative periods and the foreign exchange loss of INR 3.3 crores in the current year as against the foreign exchange gain in the comparative period. On a consolidated basis, unallocable expenses for Q1 FY '27 stood at INR 19 crores compared to INR 7.6 crores in Q1 '26 and INR 9.8 crores in Q4 '26. The increase was mainly attributable to foreign exchange loss in the current quarter compared to the foreign exchange gain in the comparative periods as well as the lower interest income during the current quarter. I'll quickly touch upon the guidance that we shared last time. Consolidated sales, I communicated earlier that the consolidated sales could grow approximately 4% to 5% -- 4% to 4.5% in Q1 -- sorry, in FY '27. However, if we exclude the revenue contribution from Foskor Zirconia and AWUKO, which accounted for INR 343 crores in FY '26 and compared it with our business plan, the comparable growth will be 11% to 12%. This is what we communicated. Given our current order load and forecast from customers, the growth could be 15% without the sales from Foskor and AWUKO in both the periods. Consolidated Abrasives sales, I gave a guidance of 5.5% to 6%. However, if you exclude the revenue from AWUKO, which is about INR 108 crores, the sales growth will be 11% to 12%. I retain the same guidance. Consolidated Ceramic sales, I earlier communicated the growth could be in the range of 15% to 15.5%. We feel that this could go up to 23% to 25%. Consolidated Electro Minerals sales, the consolidated Electro Minerals, I communicated sales decline of 6.5% to 7% on account of the closure of Foskor Zirconia, which accounted for INR 235 crores in FY '26. However, if we exclude the revenue contribution from Foskor and compare it with what we are planning to do in FY '27, the growth would be 8% to 9%. This could be 9% to 10%. We retained the same guidance. Consolidated Abrasive margin were expected to be around 9.5% to 10% in FY '26. The reported margin was 4.3%. However, if you exclude the AWUKO loss, the comparable margin for FY '26 would be 7.9%. So we retained the earlier guidance. Consolidated ceramic margin were expected to be 20.5% to 21%. We maintain our same guidance here. Consolidated Electro Mineral margin were expected to be 9% to 9.5%. In FY '26, the reported margin was 5.6%. However, if you exclude the loss Foskor Zirconia and compare it, the FY '26 margin would be 9.1%. We retained the same guidance. We retain our CapEx guidance of about INR 400 crores in FY '27. So to sum it, I would say that we are doing well in all the 4 businesses in stand-alone. The program related to the closure of the 2 business are well on track, and probably we'll update you in next 1 quarter. All the long-term strategy programs are being pursued in full effort. CapEx programs are going ahead as per plan. So that's a broad summary, I would say. Now we will open up for Q&A. Thank you.

[Operator Instructions] We take the first question from the line of Ravi from Avendus Spark.

My first question is with respect to the stand-alone Abrasive business. We have seen mid-teen kind of growth. If you could give a flavor of how much would have been the value growth, volume growth in that? And directionally, from a business perspective, how is the traction going on across each of the major subsegments which are there? Are we seeing market share gains from Chinese players given the fact that there were some changes in Chinese incentive numbers, which were given from April 1 onwards. So if you can give a broad flavor on directionally how business is panning out in this segment?

Yes. Thank you, Ravi, for asking these questions. As I said that it's -- the growth is predominantly volume driven. We had a very small price growth. The import competition from China, we just started seeing some easing out, but we need to really wait and see because there's a lot of moving factors like our exchange rate also is not helpful. There are multiple forces playing. We need to figure out what exactly is the reason for that? Is it withdrawal of the export benefit from China, the exchange rate becoming unfavorable, et cetera. But overall, we see that it is a positive trend from our side.

Got it, sir. And the second question is with respect to the Ceramics business. You have upped the guidance in terms of growth for that. Obviously, there are businesses attributed to the domestic market and also international market within the ceramics business. You have wear ceramics, technical ceramics, met ceramic cylinder, et cetera. Out of these subcategories where you are seeing better traction, are you seeing better growth prospects from the traditional private CapEx?

We see the growth optimism in all segments other than the wear segment, which is going to be a normal growth. I mean it's -- definitely, we are -- this quarter, we have seen after several quarters, the growth in wear ceramics as well. As you rightly said, the metallized cylinders, engineered ceramics, all segments are seeing increased growth momentum, and hence, we revised the guidance.

Okay. And the growth in mets and engineered ceramics is coming from domestic market or exports?

It is predominantly export. Our business itself is predominantly export driven, as you know. But those players who are international players having business in India also will form part of that trend.

The next participant is from the line of Harshit Patel from Equirus Securities.

Sir, my first question is on ceramics. You have mentioned 3 key elements for our future ceramics business, the components for semiconductor wafer fabrication equipment, aerospace and defense applications and electronic substrates. Could you give some color on how FY '27 and FY '28 would look like in terms of revenue recognition from this segment? Because I believe major part of qualifications as well as trials, I think we have already concluded.

Yes. Thank you, Harshit. There are 3 broad segments. I think of this metallized substrate business, we are in the process of setting up the facility with one anchor customer with technology tie-up. This program is right now on. We should see this coming up in FY '27, completing this whole program. Then the revenues would start coming in from '28 onwards. As far as the semiconductor wafer fab equipment components is concerned, I think we started supplying based on the qualification so far what we have got. This year, it's going to be a very, very small part of the business. FY '26 will be small -- sorry, FY '27 will be small. FY '28, it will start picking up. I earlier communicated it will peak in FY 2030. This is how we are expecting this. Aerospace and defense also will be slightly better in this year. But again, the whole program will start kicking in '28 onwards because we are going through various sets of our own qualification as well as working with anchor customers in terms of being part of their own product. So hence, this whole program will be panning out like that.

Understood. Sir, so is it right to understand that our whole guidance upgrade from 15% to 16% of ceramics revenue growth in FY '27 from 23% to 25%, this entire upgrade is coming from the SOFC ceramics, at least the major part of that, would that be the right understanding?

It will be a combination of engineered ceramics, metallized cylinder and as well as the SOFC ceramics.

Understood, sir. Sir, my second question is on Electro Minerals. What are our plans for Zirconia-based products, the calcia stabilized zirconia and the monoclinic zirconia. Will we make these products in India once we have divested Foskor Zirconia? Also, if you could share the progress on the divestment of Foskor as well?

The Foskor, as we discussed in the last call, we found that it is no more viable for us to run the business. We wanted to explore options of how do we proceed further. We had a long discussion with our partners who are major players in South Africa, Foskor. Based on that, we now have a couple of options that are there in front of us that we would start exploring and trying to close this by Q2. That is our next one more quarter. That's what is the current status that I can say. As far as the programs that you are describing about what we will do, I think maybe it will be a comprehensive update that I will provide once we complete this process so that it will have all elements of what we are planning to do.

Understood. Sir, just a small follow-up on Electro Minerals. This time, the stand-alone revenue grew a massive 33% Y-o-Y. Could you provide some broad mix between pricing mix and volume for this particular quarter?

It's again a big trend is, a big portion of it is volume because it's -- and there's some amount of mix, which is also helping us because the treated product growth is on a higher side. That also will give the margin growth, but it's more driven as a product mix rather than as a price realization. I would say some and substance of this is volume driven, very, very little or no price increase. Mix is contributing to this.

Sir, if there is not too much of a price increase in the Electro Minerals market, then why were our margins so much in pressure for the Abrasives segment? I understand that the energy-related and other input costs as well were pretty much up. But did it have a major portion coming out of higher Electro Minerals prices for our Abrasives segment? That is my last question.

Good. Very good question. I think of the cost of goods sold, somewhere between 80% to 85% will be grains and other related stuff. That did not grow much, meaning we had a cost growth of, let's call it, 3% to 5%, which is predominantly offset by our own normal price increase. But the rest of the stuff, which is all predominantly oil-based one, could be resins and related products. That grew up significantly in the month of May and June, particularly after this the brokered truce fell. Then again, heightened conflict started, really, the market went up. You all will know that the prices of oil went up during that time, particularly in the month of May, it reached $117 and then it slightly came down to $107. Those period truly cost. So a combination of this plus the fuel cost, which is again a significant portion, really contributed to the cost impact in abrasives.

We take the next question from the line of Amit Anwani from PL Capital.

So first question on VAW. Now it's almost 1.5 years that the sanction is into effect on VAW. So wanted to understand strategically how one should think of VAW in the medium- to long-term? And second, if you could touch upon the performance of VAW for this quarter. And earlier, I think the sales was mostly localized. What's the utilization and update on sales? Any changes or any update you would like to give on VAW?

Good. Thank you, Amit, for asking these questions. No broader change in the way the Russian business is happening. It is predominantly domestic-centric business, and they continue to focus only on that changed since then. You were asking about what is our view on this business. I think we have shared this in the earlier calls also when you asked a similar question last time. I think from our point of view, it is too difficult to predict what would happen in this geopolitical conflict. Our aim is to stay put, make sure that we comply with all laws, make sure that we comply with the local rules and regulations and serve the domestic market and stay above the water and then see what happens to this. Fortunately, these people with even a tough conditions, they are trying their best and doing it properly in terms of profitability and cash flow. So that's what I would say at this point in time. It's tough times, but we need to kind of stay put and see what best we can do.

Right. Second question, sir, on solid oxide fuel cells. Last time you updated about the opportunities there. Just wanted to understand, can we expect a very strong growth, if possible for you to highlight the contribution and growth, which can come from SOFC this year in the Ceramics business?

Yes. I think when we earlier shared the guidance, which was for the Ceramics business. Now right now, we said that we will make slightly up. The reason for making it up is a combination of the business growth that we are expecting from solid oxide fuel cells ceramics, similarly metallized cylinders and as well as the engineered ceramics. So that is what it represents. We are not sharing any individual details of how much of each of these business constitute.

Understood, sir. Sir, lastly, on the guidance, comparable guidance of 11% to 12%. I just wanted to understand how much volumes growth we are factoring here? As you highlighted about the cost push, would there be any further scope of price increase? So I wanted to understand volume versus price, what you're looking for, for the full year in your guidance?

Yes. Right now, I think it is fully -- we are looking at a normal price increases and predominantly a volume-driven growth. It's going to be tough for us to guess how long this war and what is the kind of impact it does. Every day, it changes. When you go to sleep yesterday, it was different. Today morning, it is different, where they are saying that no more -- we are not going to continue. So it's going to be very tough, and it's going to be tough for us to say that based on which we will start putting up price, et cetera, is also going to be tough. We will take it one quarter at a time, and then we'll have to handle it. I'm not sure we will have any better model at this stage to start looking at this beyond at this point in time. The sum and substance of the answer is it's predominantly volume-driven growth. Mix could help. Volume is the predominant part, small price, which normally that's what we would factor in.

We take the next question from the line of Varun Jain from Dolat Capital.

Most of my questions have been taken up. So just if we exclude the INR 251 million Sterling gain, the consolidated Abrasives EBIT margin is close to 2.5% versus the guidance of 9%, 10%. So any comments on that?

My comment was largely based on the fact that the losses of AWUKO is not there. I still feel the same way. If you exclude that, we are still fine with that because we still have the losses even in this quarter, and hence, you are looking at that way. But I still hold what I said.

Sure, sir. Sir, of the INR 400 crores CapEx, any breakdown of where -- how much is going where for '27?

We gave a detailed listing last time in our earnings call, but I'll quickly cover that is it includes expansion in advanced ceramics for power electronics, including substrate, metallized tubes, rings, brazed assemblies, expansion of brown fused alumina, addition of integrated furnace facility for thermal spray powders, zirconia furnace, grain.

No sir. My question was how much will be allocated to the various projects?

We wouldn't be able to share project-wise details, Varun. I think this is -- yes, this is a broad guideline we can share.

No problem. Sir, and has CUMI received the comment approval, which is required for ballistic ceramics?

We have set of approvals which are required as per the industry standards and those industry standards we have got already and both domestic as well as the international standard. Most of the customers expect us to be having those standards that we should have. That is what is required, and we are going by that. Some of these are all like NIJ III, IV levels, similarly in terms of the BIS Threat Level 4 and 5. These are the basic standards that we meet that your product should meet, and that's what we have basically tested ourselves in laboratories outside of India.