Kennametal India Limited (505890) Earnings Call Transcript & Summary

Welcome, everyone. Welcome to the Virtual Group Call with Institutional Investors of Kennametal India Limited. This is set in September, 7, 2026,3:30 p.m. We are having our Managing Director, Mr. Vijay and our CFO, Mr. Suresh Reddy, coming from Bangalore registering Office of KIS, [indiscernible] General Council India and Company Secretary. And so we are having a list of investors with us, but we will not be can when the investors are asking the question, they can tell their need and organization. So we will be starting with a common set of questions and their answers. Hopefully, most of the queries of the investors will be answered with these set of questions. So still make if there is any further query by any investors so they can ask you after the set of the questions are over, but we will try to answer the maximum question, subject to the time limit of this investor call. And so before starting the call, so I just made a disclaimer statement that we will not be making any forward-looking statement on this call, and we would be restricting our talk to publicly available information only nothing stated during this call should be construed as a forward-looking statement from the company, all details and data that may be disclosed datedand eletrated during this call that this quickly historical and base market assessment on publicly available report. Any statement made during this call is inferred as a forward-looking statement might involve risks and uncertainties and the participatory meeting are cautioned not to place undue reliance on this statement. Further, we will be recording this call, and it will be uploaded on the stock exchange and [indiscernible] website. So with this, I will thank all the investors, and I hand it over to Vijay to start the conference.

Thank you, I hope everybody is admitted. There are a lot of people in queue.

So we can start because it's 3:32 p.m. So we can start the questions.

We have a lot of questions, which are summaries and in to us. So we will -- it has been grouped. So what we will do is we'll go through an standby and keep this is in 30 minutes so that we have 30 minutes to any subsequent questions on the answers what we provide. The first set is on the business strategy and growth. What is management's medium-term revenue growth aspirations, what are the primary levers to achieve it? Then the second question was which end markets, aerospace and defense, energy, earthworks, transportation. Does the management see as the biggest growth opportunity over the next few years. Third question there was how the company is pushing itself to benefit from making India and PLL linked manufacturing incentives. What is the long-term strategic rationale for operating a single manufacturing content in Bengaluru and are there plans to add capacity on a second site? Or does the company differentiate itself comfortably against other cutting tools and tooling solutions. So that's a single group. At a macro level, the way we look at it as you know, we participate interline or manufacturing sector. And again, all of you analysts, you are tracking the entire engineering manufacturing industry, which has been doing pretty well. We are indexed on every single manufacturing sector currently in India and quite well pushing. So and as I indicated, usually, in AGMs, our target is to grow faster than the market. When I say faster than the market, it's a subset of how fast an automotive industry is growing, autopump is growing, aerospace sector, general engineering. So in aggregate, let's weighted average of this market. Our usual target is 1.3x to 1.4x of the market growth, and that's purely volume growth. I'm just qualifying that. Our target is to grow 1.3x to 1.4x the market in terms of volume. So which end markets, the fastest-growing market would be for us of BioSpace and defense, followed by transportation. Transportation covers all aspects, which is 2-wheel, 4-wheel commercial vehicles tractors and auto components, that's the way we bucket it. We expect that to be the second fastest. When I say fastest purely some personal terms, some sectors could be in single digits, but in terms of volume and its contribution to overall TL will be the second largest then comes earthworks. So that will be the order. When we talk about Make in India and PLI making steam, we don't leverage this directly because what we make does not come under any category PLI scheme outplays. But most of the customers who we play in, if it's auto components or defense or a state, they get the benefit of PLI and making India scheme. And hence, there is a huge tamed on the customers where we participate in. So long-term strategic rationale for operating a single manufacturing facility. Some of you might have been in this facility in the past. The most efficient way to make a wear-resistant component and cutting tool is limited movement of the material, right, from powder to shipping, if it is in a single master super hub, it is the most efficient in 2 ways. One, we reduce the cost of logistics to is we avoid any contamination into the powder in any intermediate stages. So having that Super Hub is the best, most efficient, most cost-optimized plant. Now we did announce a year back in terms of a greenfield. That's the second site of Kennametal, which is coming up. The lead business for that would be MSG, but that site is much larger than just the requirements for our machine business. So the site 2 would add to our capacity and what we need to expand to support the growth. How we differentiate? We continue to work. As you know, we are -- we have been here for more than 8 decades in the industry. Innovation and understanding customer processes worldwide and our go-to-market model of application engineering or sort of customers and solving customer problems day in and day out, is how it differentiates us. And that's all the reason we continue to grow pretty fast in the market. Now coming to the hard metal segment was the second group of question. And here, I will need all my CFO, Suresh to take up some of the questions. First one, Suresh was what proportion of hard metal margin expansion reflects structural operating leverage, which is favorable constant pricing and inventory time.

Yes. So here, it would be at least last year, as you would have seen, even our Kennametal Inc. results. Largely, the profitability improvements have been due to inventory led our pricing actions being ahead of the cost. So that means we would be normally having close to around 5 to 6 months of inventory in materials. So the average cost throughout the year, the price had been scaling up from $30, $32 to around $330 is where it has reached its peak. So as it went up, we also started our pricing actions on our products. So there has been a significant benefit to that accruing to us that I would see as something which happens when there is a steep rise in the prices. But at the same time, we should also be cautious that when it goes down also, there could be an implication on the profitability due to that. So as of now, there is a stability in the tungsten market, close to around $300 per kg is what we are seeing. -- the APT ranging around. So we should see how it goes from here. But lastly, the profitability is coming in from the inventories, the pricing actions that we have taken and costs being slightly lower than what the pricing actions have been ahead. And the other one is there have been some onetime benefits in terms of our scrap what we generated also realizing much higher value as other operating income. That's all on tax.

The next question was current utilization of hard metals plant and how much headroom before further capacity investment is required. Again, I know some of you are new in terms of interacting with us, but some of you have been with these last 6 years of AGM and some of our other calls. We do have a lot of headroom in terms of real estate space within the current facility when I say real estate building -- physical infrastructure is available. We do have promotion to add missionary in a modular fashion to support the growth, what we have -- so we don't see space not

Yes, people are [indiscernible] mute and they can open the office. Sorry, please put yourself on mute.

Yes. So the capacity, currently, we are well supported in terms of capacity requirements to meet current demand, which is there across all our product lines, except for our machining business, which I'll talk in detail below, there's a caring rate for industry -- the rest of it, we have all of space. We continuously add machines to support the requirements, which is required in terms of the volume growth what we are seeing which is also considerable given the tailwinds of what we are seeing currently in the markets what we participate in. Again, this question is already answered by Suresh, how sustainable does the management view the current hard metal margin over the next 2 to 3 years. The portion of it which came from price is onetime as it sustains. Structural changes, which are coming due to top line change and what manufacturing efficiencies we are running will remain. So coming to machine business, the 3 questions. It's mostly linked to profitability, all of them. So I'll answer this in 2 forms. One is, again, for people who have listened to me in the past, capacity constrained currently at the current side, so our top line is capped currently, but we do continue to get some orders to prepare for a new greenfield. That means we did take some very large machine orders which are first time both caramel for India business and in terms of technology. So it took -- it did take against consciously. There were higher costs, which we had to run to develop those products plus just the capacity constrain inability to ship machines in the short term because of a limited than floor space did impact our overall structure of the P&L. Now in terms of long-term profitability, we will be leading towards recovery as we come up with the greenfield site, but more so from [indiscernible] coming breakeven should happen within this year. That's what we anticipate. The next category is raw materials and commodity risk. Given the unprecedented tungsten environment noted by the management, what hedging or procedural strategies are in place to manage concern price volatility going forward. This is an important question. I'll just answer that a lot. As Kennametal, we have managed to be very consistent in terms of supplies of our finished goods, both from Bangalore facility and the products that we import from our group plants consistently without any gap even though Tungsten did go to a lot of serious shortages through the year. This was because of our several relationships, existing relationship, what we have, both with powder suppliers as well as mine, so that continues. So we don't see any -- currently we don't see any risk in terms of our capability to procure and process Tungsten currently. And again, I presume there will be a question at later, but I'll answer, again, something which we have answered always. We source Tungsten currently as a powder from sources other than China at this point in time. There is no available. So the next question was whether we domestically source anything. There's no mines, constant mine in India nor there is any available source in India post content has to be imported for anybody who wants to process in India. So it's 100% imported. Our next question, I think there's an ever inventory. Suresh, do you want to take that? It's on the cash flows.

Yes. So as we were talking about on the inventory, the price increases on stent -- so from $30, close to around $330, that's a significant increase. And Hansen is our largest material that goes into our products, manufacturing. So as the prices were close to around 9x to 10x higher, there is a requirement for funds as well. So the complete impact due to the increase in inventory valuation a significant impact on our cash flows as well. So you would have seen in our inventory values from close to around INR 300 crores, it has gone up to INR 600, and we expect that it will further go up because some of the old inventories were still there. So now with the current pricing, that could still even go up by another INR 100 crores, INR 200 crores as well. So there is a significant utilization of funds for inventories. And also since -- this has led to a price increase. Our sales values also have gone up, and that also has an impact on the overall working capital. Of course, our payables also has gone up, but there is a significant requirement for working capital from the company set, yes. So at this stage, I think we do not want to project anything as the EBIT margin for the medium term. We'll have to see how the inventory pricing spans out. But at least in the last couple of years, you have seen our industry and Kennametal India, how it operates. So that is an ideal situation. But currently, what we are seeing is slightly a situation which is not normal. So we'll have to wait and see how it goes because any implication on the Tungsten pricing, either it further increases or it significantly drops has an implication on the margins.

You can go to capital allocation and dividends?

Yes. Now from the capital allocation side, we have a very clear dividend policy. Last year, if you have seen, we declared a dividend of around 400%, which was similar to the previous year, which is quite high. I mean, it is normal because we did well last year. Our profitability also was quite good. Normally, we operate a dividend payout ratio of around 50% to 60%. Keeping in mind what cash is required to run the business, the CapEx requirement of the future, everything. But what we are seeing currently now, initially, when we had plan for a dividend of 400%, we have not anticipated that the raw material price further continue to increase into April, May, June as well. But that is one area where we are now seeing an impact on our cash flows. So what we considered as a debt-free entity as of now, we have gone in for some amount of borrowing to meet our working capital requirements. But that is something which we should be able to slowly cover up by December to Q1 -- Q3 by March, we should be able to manage within our own internal accruals.

I think just to add to what my CFO mentioned, it's a short-term working capital requirement to fund the additional inventory. But again, it's a cycle. The inventory has to go into a finished product. It goes into the market, it to get sold and we collect. So that cycle is around 6 months. So as he explained, December to Jan, Feb is the time when we should come back in terms of our cash flows to where we were in the past. Now coming to export tariffs and global trade currently, Kennametal does not have any impact due to this. We do some amount of intercompany exposed to our U.S. subsidiary, but that tails have been passed on. So we don't see any change. Exports as a mix hasn't changed for us even with the tariff environment even with the geopolitical environment. So we don't see this as a risk not as any impediment on the ongoing performance of the entity. Manufacturing capacity and operations, where we've already covered. Capital expenditure would be in line with what we have been spending. But what we have mentioned earlier, we have been consistently investing every year in terms of either expansion of infrastructure, which is the building space or adding modular equipment as and when we see a demand rise. And we -- given the industry that we CapEx has to run 1 year ahead, we continue to maintain the demand for subsequent years so that we add equipments in the current year. Automation, digitalization, again, we are an extremely automated plant. Mostly devices or equipment with all C&C, robotics control, so it's -- while we still have some old technology, which are manual machines, but those are machines which are required to make batch processing of products which are very custom built. And hence, we continue to do that, especially in our variable system solutions. How does the company manage supply chain or operational risk given manufacturing cost at single site? We actually see this as a strength and not of risk. And secondly, what is better of the products, if there is any risk at the site, metal products can also be imported from the group sites, which will also make sure that the customers do not feel impact of any issues with the current site. We don't see a risk. Actually, it's the most efficient way to run given the type of industry we are in. We don't need to mirror a second plant to reflect just a supply chain mitigation plan because we don't -- that's not a risk which needs to be mitigated.

Almost 45% of our products are imported.

Yes. Almost half of profit, what we make in Bangor, is what we import and R&D -- sorry, you want to take the first question? -- spend as a percentage of revenue? And how does it compare with broader Kennametal?

So as we have commented on these multiple times and even in last AGM as well. So for Kennametal, R&D is centralized at Kennametal Inc. U.S. or Latrobe R&D center. That is where all the R&D for the hard metals part of the business happens. What R&D we have here is more to do with any product transfers that happen between global sites for localization and any further improvements that is required in the power grid. That is a small investment -- so it's not a significant investment, less than 0.5% is what we do of our revenues is what we spend here. But the large chunk of the investments is globally done at our U.S. lab. Vivek, do you want to take the second one?

Yes, the machinery tomorrow was a team which we launched for our machine business. And this will be -- and under this, we did launch 2 product lines to test the market, which was a general purpose horizontal machining center and some of our modernization tool and car grinder is what we tested again, this was to test whether we would be able to scale before we got the approval for greenfield. Now we don't have current capacity in the shop floor. So unless the greenfield comes on stream, to see the top line and the resultant benefit in the P&L will only happen after the greenfield is submitted. So products are ready, but we need shop floor space and capacity to produce and market those products. Now we will probably have 9 minutes to go through whatever other questions. So I'll be a little selective so that we have enough time to have other questions. Chintan, you have to wait, I still have to go through 9 minutes of the group questions, which has come to us. Do you want to take the risk and credit as a group first submission? And then the related part was not the governance side?

Yes. On the -- yes, one of the questions is, what is the management's outlook on maintaining or improving the current India ratings rating of AA minus credit rating over the medium term. So I think we need to work on that with the India rating team for the current year. But I think fairly, we should be comfortable as our fundamentals are quite strong and the corporate support from Kennametal link also is quite strong. So we should be able to maintain that. Currency risk is not like we have been saying always all our purchases with the group-related purchases all in INR. That is the largest chunk of the ForEx exposure. So we don't have any exposure relating to ForEx, except for maybe our exports, which is around 10 to -- 14% of our exports, that's where we have a dollar-run euro exposure. But that's also mitigated with an equivalent amount of imports from third parties where we import. So not much of an exposure for ForEx for us because it's all INR.

Just take the question

So there is one question on governance and related party matters. Could management disclose the nature and extent of burden with the parent Kennametal holding 1 technology licensing, warranty or service agreements? Yes. See, like we said, the complete hard metal business, the R&D development, coating technologies, geometries, everything is a patent of Kennametal Inc. So anything that we use and manufacture in our manufacturing facilities here, there is a royalty agreement. And the royalty is at 4% on any revenues that we generate from the products manufactured in our Bangalore site. For all traded, we don't have any royalty on the traded business. That is just simply import. There is a transfer pricing mechanism globally accepted transfer pricing mechanism, which passes through the test with independent directors as well as even the revenue authorities here. We need to ensure that there is an adequate margin better than the third-party comparables that operate in a similar space. So we have talked about royalty. Service arrangements, again, there would be a couple of costs which are shared between the parent company and Kennametal India Limited. One is the IT infrastructure that is also completely centralized most of the costs. And we do have a shared services center in Bangalore for the support of operating the shared infrastructure. So that, again, is shared between all the entities across the globe. We have a robust agreement to share costs. There is no markup, but it is a sharing of costs between Kennametal Inc. and Kennametal India.

I'll just take one more section before we open for questions and we go in order of people who are raising their hands. Industry and corporate landscape, how is the demand trending across auto, aerospace, defense, energy [indiscernible] that the market -- the company serves, right? So I think I answered that when we started the call, energy and defense, it's the strongest ordered by auto. But one of the sectors, we don't capture here because it's catch it all kind of a segment. It's general engineering. It's any mission so which can be missioning a small a, it can be wishing a pipe, which could be about that sector. which represents the broader industry is really doing well at this point in time because of 2 factors. One is domestic demand driven. Two is there are a lot of organizations which are getting export orders Hence, they are able to machine and ship it back. So the Board are driving that. That's also a segment which is doing while it's not specifically like energy or aero, but that's also a broader

Hi management team. I believe that you guys would have gone on mute. We cannot hear you from here?

I don't know when did you lose, can you tell me, Kevin? When do you go -- when -- we just lost you just insane when you were mentioning I don't know it might have happened. Yes. So in terms of competitive intensity, we don't see a change. In fact, it was better last year because the larger players are just not us any of the large global seniors. Given the supply chain strength, it was able to service the market in a better manner. Now the third question is interesting, how we expose the company's order book to broader industry CapEx cycle. Say, 90% of our removal comes from consumables. So we don't really play in the industry CapEx cycle. So the current demand, what we see is purely from the consumable demand, right? So because that's where maximum revenue and maximum profitability comes from. Where impacts us in the CapEx cycle is on a machining business, MSG. But again, we are small in that related to the industry. The industry is so large there and we are not -- so like you need to be at least 7% to feel the impact. We are probably less than 1% of the market size when it comes to machines. So it really doesn't impact us. So there are some questions which are forward-looking, but I'll take one question here. It's about long-term vision and how does it align to [indiscernible] Panama global India is a region for TMT Global -- and it is -- it's a very important geography in terms of growth drivers. I'm sure you've heard this from all the management what you are talking to, given the macroeconomic opportunity, what India poses. So Telenet see India as a huge growth opportunity and continues to invest and believes in India growth to me, right? So -- and we are also pretty confident of the Indian growth story and what we're seeing, especially in the opportunities which are emerging in the engineering and manufacturing sector. So that -- there are a few questions which we couldn't touch given that there are so many questions which came, but we covered 70% of what we had in the initial group questions. Now we'll open the line for persons and we'll go by orders or people who are raising hands to ask questions. So I'll go with Chintan first. Kevin should then raise the hand first.

So thank you very much for giving the clarity on the recent performance. Sir, my question is with respect to that, given there is too much of increase in the raw material prices, does this kind of give us an opportunity to gain market share from some of the marginal players who would not have been able to manage in this kind of volatility? So that is my first question. How has the peer companies reacted to this in terms of price increases? Have we kind of followed them or they have followed us or broadly, there is -- you think there is some gap out there? Related question would be in terms of inventory -- do we still -- I mean given so much of increase, do we still continue to maintain normalized level of inventories in terms of volumes of 5, 6 months of inventory or we would have changed our policy during such times. So this would be my questions. I'll have one more follow-up later.

Yes. So Chintan, one is it's giving a very tertical answer, did we gain share last year. We believe we did. Given we were able to and the supply chain trend to service the market. And they were -- I think we were in a better position to service the requirements of our customers, okay. Inventory, we actually probably went a little high to secure given the environment in tungsten. So we want to make sure that we are in a position to service all the requirements. So our direction was make sure that no customer gets impacted in the year due to any shortage of raw material and finished goods. So we might have also invested a more than it paid off very well, but that approach did off very well. In terms of pricing action, I -- most of the global players in India did -- because the raw when it comes to our raw material price increase, everybody is impacted equally across the world. I believe most of the large groups are not naming them since it's recorded call did administer a similar price increase. Maybe the timing was different between the groups based on how they approach it, but we were pretty I would say, ahead of the curve in most of the price changes, what we implemented.

Understood. Sir, next question is with respect to Aerospace & Defense. You mentioned that the for loans I need to go to the others.

Yes, this is the last question because there are others...

Yes. So aerospace and defense has been growing very fast for us. Could you just help us understand whether this goes to the normal channel like distributor-led channel or this is direct business? And what would be the difference in margins between say, aerospace defense versus our transportation business.

Yes. So Chintan, the go-to-market model depends on sometimes customer and how strategic the customer is. But we have -- again, some of you will be familiar that we can't grow the team given we saw this opportunity emerging for news back. While we are waiting the benefits of it now, we saw at a macro level trend that this is coming or in India, given the number of components of what we call first article inspection clients which just started happening in India for the Tier 2 and Tier 3 suppliers to both the big 2 large airline manufacturers or aircraft manufacturers in the world. Now it does go-to-market model is slightly different. We could still service through a channel or customer could be direct if it's a global key account. But that doesn't matter. But service load in terms of application is done directly by anomaly. Maybe the middle can move directly from Kennametal to a customer or it goes through a channel partner because that's the most efficient route to maintain inventory and service customer margins will not be very specific, but aerospace defense is quite accretive to automotive. Okay. I'll leave it at that. I won't get into specific but quite accurate. Who's second?

Yes. Sir, interacting with you for the first time, so might have just 1, 2 basic questions. Sir, first one, sir, does or does the end customer, say, for example, the -- say, for example, of forging machinery companies making companies making a product for aerospace customer. So does that aerospace customer have a say on which machine tool to be used while making its product?

It doesn't work, No, it's not unless what happens is in first-time project, let's say, somebody is putting a new line. not a greenfield even it's a brownfield. But it's an absolutely new component than the OEM machine manufacturer, 2 supplier, which is companies like us and the customer work together to see what is the most optimum tool kit or the total amount of tools which are required. But usually, it's the customer and the tooling supplier who works on the solution. That's how it works. Unless it's a global key account or a very critical component, let's say, an aerospace company. I don't want to name an account here. Maybe in a [indiscernible] car coming we can be much more fortuit they have global specifications, let's say, [indiscernible] applying in, let's say, to D in U.S. or in France, usually, that sped gets transferred here because they prefer the same sector to happen. So both happens depending on the client.

Understood. Sir, this aerospace and defense, given it's the fastest-growing segment dwelling on that. So I understand the products have benefited -- it's a traded item for Kennametal India, right? The products?

Yes.

So the reason we are all manufacturing here because still, we do not have that scale, which will support the domestic manufacturing. And I also believe that everything sold to aerospace and defense, every product sold under Kennametal as an organization is rooted by the listed entity. Is my -- is my understanding...

Yes, everything is routed through the listed entity except I just want to qualify. It's -- there is 1 business which does not go through us, and we have never handled that business. globally also, it's not comes under any subsidiary, okay? So we don't factor them in. But every other -- for example, tooling of where still nothing goes there. Everything is through the [indiscernible] entity. So can you repeat the first part of your question? I just...

Yes. First part was that, aerospace and defense products are rated by -- and why they traded, -- is it the scale which is not letting us manufacture here?

No longer everything is traded. We do manufacture quite a bit now here. But the ratio will still be in favor of imported. The reason is See, as you know, aerospace are high-value, low-volume products, what goes into a component manufacturing. It's not that we make 1 million competence like a 2-wheeler component, right? These are very small number of confidence. So what happens is the tooling requirement for a particular -- it could be very high wave. I won't say price, the value of that single unit is very high because it's a high precision tool. So hence, let's assume we have to make only 100. So there's 1 plant somewhere over, which will make it because the same application exist in Germany, in France, in the U.S. or in Japan. So hence, it's the lowest cost of manufacturing happens where the original product was delivered. And we feel that, that's the best approach for aerospace because there's no point in trying to localize for the sake of localizing when your margin expansion won't do -- if it's an order -- if you are supplying something to an auto comp industry, localization is a clear because you will get the cost synergies and benefit by expanding margins. So it's a mix what we yes. So it's -- and it's a high-tech product. It really doesn't affect us in terms of localizing our importing.

Yes. And sir, the parent had said somewhere that they have shut down some plants globally. And is now -- and India fits in the very strategic asset for them in terms of the global manufacturing, the global business plan of what to produce well. So can you just give us some broad understanding that what happened, I mean, why those plants were shut down? And then how does India fit in at the global level? Is it India plant for satisfying India needs or also is India, Make in India and also export to the global hub. So if a particular product is feasible to make in India, we make here and sell it to say, European requirement or if something is feasible, as you said, aerospace is cheaper to -- a viable to make in Europe, then we import here. So how does the top management think the parent think?

Yes. So the first part of your question, I'm going to not answer for a simple reason. It's available in the public domain. Just got SEC filing on the plant and the reasons they have expanded earlier. It's best my Global CEO, CFO answers that. Second portion is, see, primarily the India plant is to support India. And I think we have all of demand. You have to make the plant run on full capacity, okay. The remaining is based on global requirement. There are certain product lines where only India mixes, which gets shipped across the world. It's based on cost in terms of capability, what we have. But even, let's look at -- and all of you know that the growth opportunity which exists in India for the next 5 to 10 years, especially when you talk about engineering manufacturing sector. I think India is large enough for any plant to just feeding the India demand at this point in time, okay? So any selective export opportunity comes because that product line, what we make is very efficient. There are a lot of people in the queue. I'm sure some of the questions also will be answered by [indiscernible]

So the next Mr. Nilesh Saha, can please keep their camera off and only the person who is asking about this.

Sure, sir. Great. Sir, I just have 2 things to ask you. Sir, first, in your comments, you said that roughly around half of what we sell is what we -- is not made here and we got it. sir, if I may just ask you, sir, could you like just break down the top line, right? I think you did give some sense of what the industry's mix looks like. But then if I use this lens of manufacturing, what we manufacture, got import, right? If you can just probably use that lens to break up what we sell using that construct and then where is it that the role where localization has not had happened right? And that then leads to the next thing on this new plant that we intend to start, right, where would those opportunities to kind of maybe do localize take place?

Yes. So Nilesh, I'm sure there's a common question. See, currently, we are -- if somebody has noted, and this is the data which we anyway share -- there was a time when we were -- since we I came into this road in 2020, we were moving up in terms of local content as a ratio of total sale. We were close to 57% at some point in time. So we're again still below 50%. That's not because we produce less in India. We actually significantly produced more. But some of the segments, which grew are outpaced in terms of demand and our own sales growth came from product lines, which had to be important. Case in on aerospace and defense, okay. One is that. Two is births the mining, road construction and so it's mining, the road rehabilitation construction segment is a product which we have never made in India. We're not planning to make it here because it's the most optimal what we made outside of the country. And that really grows because it's directly linked to infrastructure segments, which are doing very well. right? So there are new businesses which we started, which is also growing very fast, but that has to be imported. So 2 examples, again, aero, then there's whole construction mining and road rehab application. What are new fast-growing segments for us, but those are best made outside and broaden at this point in time. So for us, the objective is to grow and make good profits, whichever is a best of a change for it, we will do it. this new plant would be focused on which product segment.

Yes. New did --

When we put out the announcement to the Street, in the public domain, the initial -- it's a larger site, what we acquired. But the lead investment into the new site is going to be to support the machine business because that's completely capacity constraint currently. So that's the start what we will do. The future plans as and when we are ready, we will publish in the public demand.

Sure. Sir, just one last thing, sir. In the last, say, 3 or 5 years, what has been the volume growth for us? If you can just -- that's the last thing

Yes. So except the current financial year, which we just finished, where the pricing was significant. I think I would say between 8% and 10% has been consistent for us. If we take a 5-year tailor, that's where I'll put it. Okay. We'll move to the next person.