Maiden Forgings Limited (543874) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Maiden Forgings Limited H2 FY '25 and FY '25 Results Conference Call hosted by Kirin Advisors. [Operator Instructions] I now hand the conference over to Mr. Harshil Ghanshyani from Kirin Advisors. Thank you, and over to you, sir.

Yes. Thank you. On behalf of Kirin Advisors, I welcome you all to the conference call of Maiden Forgings Limited. From the management, we have Mr. Nishant Garg, Managing Director. With that, I'll now hand over the call to Mr. Nishant. Over to you, sir. Thank you.

Good afternoon, ladies and gentlemen. I am delighted to welcome you to Maiden Forgings Limited Earnings Conference Call for the second half and full year of financial year '25. Thank you for joining us and for your continued interest in our journey. From our origin, as a proprietorship, in 1988, to becoming a publicly listed company in 2023, Maiden Forgings has evolved into a trusted manufacturer of steel bright bars, wires and pneumatic nails. With over 35 years of experience, we are proud to serve critical sectors, including automotive, engineering, infrastructure and increasingly defense and consumer markets. Our operations are spread across 3 advanced manufacturing units in Ghaziabad with a combined installed capacity of 53,000 metric tons per annum, backed by complete in-house capabilities such as annealing, cold drawing, peeling, grinding and testing. We ensure product consistency and speed, making us a reliable partner to over 500 customers. including exports to the U.S. and Europe. A key milestone during the year was the acquisition of a 4-acre industrial plot in Modinagar located about 25 kilometers from our current facilities. This facility will allow us to consolidate 2 of our existing plants into a modern integrated unit, unlocking operational synergies, enabling higher output and enhancing workflow efficiencies. Once complete, this move is expected to result in annual cost savings of around INR 2.5 crores. In line with our ESG focus, we are also planning a solar installation added facility, which will lead up to 50% of its energy requirements. This shall also enable us to plan our future expansion for the next 5 years without any further land acquisition in the same city, thus making the process faster. We also marked our entry into the B2G segment during financial year '25, becoming a registered supplier to the Ordnance Factory Board, Kolkata and successfully executing our first order in September 2024. This has paved the way for further supplier relationships with HAL, NTPC and BHEL aligning us with India's growing defense and public infrastructure ecosystem. In parallel, we continue diversifying our product portfolio with high-margin offerings such as stainless steel bright bars and coil nails. Our B2C initiative gain traction with coil nails now listed on Amazon India, and we are gearing up to launch on Amazon U.S. and U.K. as well. To support our export strategy, we are also exploring overseas warehousing, which will help reduce shipping costs and improve delivery timeline. India's steel industry continues to show strong long-term potential even as global market face challenges due to subdued demand and pricing volatility. India is now the second largest crude steel producer in the world and domestic demand is expected to rise significantly supported by the government's focus on infrastructure development, affordable housing and urbanization. Sectors such as defense, railways and construction are leading this demand, offering sustained opportunities for value-added steel manufacturers. Initiatives such as National Steel Policy; the Production Linked Incentive, PLI, Scheme for Speciality Fleet and the Vehicle Scrappage Policy are further catalyzing investment and modernization across the sector. Import substitution and indigenization, particularly in defense and engineering, aligned perfectly with our focus on precision engineered specialized products. These trends are creating a favorable environment for companies like ours; committed to quality, innovation and sustainability. These industry tailwinds are well aligned with Maiden Forgings' strategic direction. As India's infrastructure, automotive and defense sectors expand under strong policy support, the demand for value-added and specialty steel products is expected to surge creating a favorable environment for our precision engineered offering. The government's focus on indigenization and import substitution especially under the PLI scheme for specialty steel opens new opportunities. Moreover, our investment in a solar powered consolidated facility positions us ahead of the curve on sustainability in sync with the industry shift towards no carbon manufacturing. Collectively, these trends reinforce our ability to capture market share, expand into high-growth sectors and build a future-ready resilient business model. Let me take you through our financial performance of H2 FY '25. We remain focused on strengthening our balance sheet. Our target is to reduce debt to below 10% of annual turnover supported by improved operating cash flows and monetization of surplus assets, including from the plant consolidation. In H2 FY '25, despite industry-wide headwinds and pricing volatility, we maintained operational stability and continued our strategic push into high-margin segments. We reported a total income of INR 104.37 crores with an EBITDA of INR 10.13 crores, reflecting an EBITDA margin 9.71%. Net profit for the period stood at INR 2 crores. These numbers reflect the strength of our product mix and the resilience of our business model amid a dynamic market environment. For the full year FY '25, we achieved a total income of INR 213.57 crores with EBITDA at INR 19.91 crores and an EBITDA margin of 9.32%. Our net profit for the year was INR 6.05 crores. This performance underlines our focus on efficiency, premium product offering and disciplined cost management. As we look ahead, we remain committed to strengthening our financial foundation by reducing debt, optimizing working capital and reinvesting strategically to support long-term growth and value creation. These results underscore our ability to sustain steady operations, while navigating market fluctuations and focusing on long-term value creation. Our entry into the B2G segment through our Maiden order from the Hindustan Aeronautics Limited positions us to capitalize on the immense potential in defense and infrastructure, driven by the government's indigenization initiatives. We have successfully expanded into the B2B markets through the sale of coil nails on Amazon India, and now planning to broaden our reach by launching on Amazon U.S. and U.K. We are actively diversifying our product portfolio by entering high demand, high margin categories such as GI Wires and Stainless steel screws. These additions strengthen our presence in premium segments and align with our broader strategy to enhance profitability through value-added offering. Looking ahead, our long-term aspiration is to establish Maiden Forgings Limited as a premier innovation-driven brand that is trusted across B2B, B2C and B2G markets in both domestic and international arenas. Financial year '25 has been a period of meaningful progress despite a challenging backdrop, and we believe our strong foundation, focused execution and evolving capabilities has set the stage for the next phase of sustainable growth. I now invite you to ask questions regarding our financial performance, operational strategy and growth initiatives. And I, once again, thank you for your time and continued confidence in Maiden Forgings Limited.

[Operator Instructions] Our first question comes from the line of Ishita from Unity Finance.

So my question is, with significant groundwork laid in H2 financial year '25, what are your key strategic priorities for H1 financial year '26?

I would like a bit clarity on your question in terms. Are you talking simply performance wise or what further groundwork we would be doing in H1 financial year '26?

Sir, I wanted to know what groundwork you will be doing?

Okay. See, first and foremost, the priority is that already since we are -- we have started supplies to HAL, NTPC and currently, we have also delivered an order to BHEL. And again, we have repeat orders from HAL. So first and foremost would be to capitalize on this particular segment that is B2G. These 3 are already onboarded, and we are getting repeat orders now as well. And the basic concept would be [Foreign Language] for example, we are trying for some defense companies and for the Northern railways as well. So that would be the first and foremost focus area, that is B2G segment to penetrate that market in a better manner. Though it's a long-term process like it will take another 1 year or so, but whatever maximization we can do within H1 '25, we would be more focused towards that, especially considering the current boost that the Indian government is giving to infrastructure and defense segment particularly. So first and foremost is that. And secondly, it would be more towards -- like I mentioned in my opening remarks as well that we are focusing on creating little infrastructure. I won't say full-fledged facility, but a part or segment of infrastructure in U.S. and Gulf markets because I have never ever before this call mentioned anywhere that we would be doing something in Gulf market. But during the last 6 months, we found certain opportunities. And even like the pneumatic nails product, which we planned for U.S. majorly -- U.S. market, though last year was a bit tricky in terms of all the geopolitical scenarios, but finally, the clouds have scattered and now we have a little bit clarity. Thus the weak point that we were facing, we recognized that very well, why we were not able to boost sales of that particular product in the U.S. market. And that was the reason that we required a tie-up with the importer over there, who can do all the import formalities and we can -- do deliver the products to the customers. So that infrastructure we have already created in over last 1 month. And that is why now currently, we have like 5 containers for that particular product in pipeline for this month. So that is one key factor like establishing a part of infrastructure in the U.S. and Gulf so that we can immediately capitalize on the opportunities that exist and the opportunities are quite huge in terms of sizing. So these 2 would be the major focus area for H1 financial year '26.

I also wanted to know do you foresee any headwinds raw material costs, logistics or customer demand that could impact near-term growth?

Sorry, I didn't get your question. Can you repeat that?

Do you foresee any headwinds raw material cost or customer demand that could impact the near-term growth?

See, currently, the macro factors are very volatile, right? But looking at the trend over the last 1 year or say, 18 months, as such, there is no threat that I foresee in the near future. So maybe there might be opportunities because recently like just -- like last month, Indian government has posed some antidumping duties against China, especially in the steel sector. So that is giving slight advantage in the present time. So maybe there are such -- more such actions which might give us an advantage.

Okay. And I wanted to know what is the status of your entry into Amazon's international marketplaces and the B2B digital platforms you mentioned? Are they expected to be revenue contributions in financial year '26?

I would say -- see this is particularly first and foremost, these are more towards branding exercises rather than just revenue because that will establish us as a brand like already we are there on Amazon India and we are generating very tight revenue. But due to that branding, what is happening is the bigger players who are buying coil nails, they are reaching to us more and that visibility is creating further a snowball effect in the business. So that is the primary purpose of getting listed over there that we create a visibility due to which more number of queries come to us and a bigger chunk of business gets diverted towards us due to that visibility. Yes, we are very much focused like I already told that the 2 things, one is B2G and second is establishing a small infrastructure, which were bottlenecks for us last year in making our products dispatch more in the export market. So that visibility is a subpart that we would be focused on this year, and they will ultimately, not directly, but indirectly give us a boost in revenues in this financial year.

Our next question comes from the line of Bhavesh Chavan, who's an investor.

Sir, in terms of base volume growth...

Mr. Bhavesh, before you go ahead with the question, may we request that you use your handset, sir, your audio is very low, sir.

Sir, my question is, what is the kind of volume growth that we're targeting over the next, let's say, 2, 3 years?

The volume growth that we are targeting over next 2, 3 years is at least annually, we are targeting around 30% to 35% because already we have lagged last year due to lots many macro factor pressures. We were not able to grow as such. Thus, we did a kind of introspection into our strategy, into our policy that where -- it's required, once you see that growth isn't happening as you expected, so you have to introspect many factors and you have to create an ecosystem or a protective shield against these macro factors and so that you can ensure growth. And that is why this year, we are targeting a 30% to 35% jump from our existing revenues so that we can slightly cover up for the growth that didn't happen last year. And definitely, once you reach that level, you would want to continue with that. And in that way, I can't do as long as to comment on 3 years growth pattern. But definitely for this year, I would be targeting 30% to 35% kind of a growth in the revenue.

And in terms of margin, sir, are we looking at better margins from current year?

Bhaveshji, [Foreign Language] Last year also, we did some errors in the last quarter due to which we were not able to maintain that kind of high margin level. So this time, we won't be repeating that and our primary focus will remain on the margins.

All right. And sir, in terms of the capital expenditure, what is our plan for this year?

We would be doing a CapEx of at least INR 12 crores to INR 14 crores this year.

And that will be by borrowings?

No, no, no. That would be from borrowing, the consolidation plan that we have currently, right? So in that, the land sales is also included, the parcels of land sales, so that would be mostly to self-accrual. No -- borrowing is nowhere in the horizon for this financial year. In fact, like I said in my opening remarks, debt reduction is a target for this financial year.

Okay. And sir, talking more about volume growth, you said that you introspected why we did not have very significant sales growth in this year. So can you just highlight, I mean, what couldn't go as per our plan earlier?

Okay. I will -- I'll try to cover 3, 4, 5 points, whatever I can cover in this span, okay, in a short way. First and foremost was the macro factors. In the beginning of the year, we were looking -- we thought the markets are slow and sluggish because the elections -- Indian elections were ahead of us. But unfortunately, post elections also, there was no as such boost. Then since we are relying on the domestic as well as the exports market, our primary target for last year was to enhance the export sales. Then came -- and one of the major area at that time we were focusing was the U.S. market. So then the U.S. elections were upcoming, then in between that, the budget was there. So multiple factors and this volatility remained there throughout the year by chance. But like I said that we have learned after the introspection that we can counter those -- even those macro factors if we are focused on -- in certain terms, not just growth, but the expansion part as well. If we broaden the product category, we explore newer markets, then these macro factors can also be countered so first and foremost was that. Secondly, particularly talking about the steel market. So I will give you just a few figures that I have just brought it down earlier. So there was one factor that 2018, '19, the wire rod price that we were buying that is the most basic product that we buy as raw material, the cheapest one. So that was priced at INR 44 in 2018, '19. Then in 2020, '21, post-COVID, it reached like a level of INR 64. Then in '23, '24, it went back to INR 48 which we expected was the worst. But unfortunately, during '24, '25, it further went down to a level of INR 43 or INR 44. So the overall pricing structure also hampered. But again, since we are already focused on selling the products which cost -- the selling price are around INR 250 or INR 300 per kg, so we would be -- we immediately changed our strategy back in March that we would be primarily trying to outgoing sales that we will try to do of the products, which are higher value and higher margin proposition. We won't further focus on selling the products which are not that much valuable or that much profit making. So we have drastically shifted in that over the last 3 months. So that would be the second way to counter another macro factor that occurred our way. And third factor, which was internal majorly that we plan this consolidation. We purchased the land. The acquisition of the land was completed back in August. Then we also had a deal for the sales of one of the plants through which we planned our construction activities and the expansion activities, the funds that we were about to realize from there -- from the sale of -- from the proceeds of that sale. But unfortunately, we made a deal back in November, but it got slipped out because of nonpayment from the other side. So we had to look for another deal, which we again have cracked recently, but still the paperwork has to be done. That's why we are not announcing it. So that factor also somewhere hampered our internal strategy because the things got delayed and that is why we were not able -- neither able to shift and we had to again rework our current facilities a little bit so that we can produce more. So that was third internal factor that hampered it. And fourth was that the overall geopolitical factors that were going on, the uncertainty level was very high and due to which decision-making was hampered to an extent. And now we have -- since we know where the clause existed and we have worked them out to the best of our capabilities and the results should be soon out by the results of H1 financial year '26, I hope. So that is my hope. And I see that right now, we are positioned very rightly with the upcoming things as well as the overall macro factors going on from last 1, 1.5 months. So they are slightly skewed in the favor of any Indian manufacturer -- Indian steel manufacturer. That is why I see that the future should be very bright.

Yes sir, that's helpful. Sir, so are we seeing that kind of a traction? We are already 2 months into first half. So are we seeing that kind of growth, that kind of...

Yes. I mean the April, this year, was better than what the April was last year. So the first month is usually very, very dull because everyone is doing inventorying and et cetera, et cetera. So the first month of financial year is usually dull, but it was better than the last year, I mean April to April comparison.

Right, right. And similarly, in the export market, are we seeing better traction?

Yes. We have -- like we have already exported 4 containers by now. We are -- no, sorry, 5 containers maybe. So usually, it was 1 or 2 containers earlier.

This month or these 2 months, you're saying?

These 2 months. And right now, we are in pipeline around 5, 6 containers. Like I said, the nails container is also there, which was not there earlier, last year first quarter. So those -- in stainless steel products as well as in the nails product, now we have order booking in both from the export market.

Okay. And sir, what -- the CapEx that we are doing this year, what is that for?

That would be primarily for consolidation and few additions for GI wire, like I said in my opening remarks, that is galvanized wire. Okay? So that is, you can say, supplementary products to our existing product lines so for that GI wire in the new facility as well as the galvanized wire and further -- like for some stainless steel finished kind of product.

Our next question comes from the line of [ Siddhi Joshi ], who is an investor.

So have you introduced any new product variants or grades in H2 FY '25? And if so, how are your customers responding to these additions?

Siddhi ji, see, if we talk in terms of grades and everything, we know that we are into an industrial product line kind of a thing already. We have 8 product lines in total, but the number of SKUs is huge. I think if we go on counting, it would be 3,000 plus. The SKUs are more than that. And we keep on developing newer things like on the top of my mind that the things that we have -- that I have like in last 6 months, whatever developments we have done. So we have added on to few profile segments, special profile. It can't be shared like [Foreign Language] approximately INR 25 lakhs per month. And it is, in fact, low value but high-margin products. In terms of margin, it will exceed 20%, 25% kind of gross margin in this. And the costing is not much higher. So the overall net margin will also be higher in this product. So one of the product is that, that has been developed for 1 or 2 of the particular customers, who are regularly buying from us so that means the response is good. Other than that, we keep on experimenting with newer grades and everything. As far as the product -- new product line is concerned, that would be done in H1 and H2 of financial year '26. Last year, we didn't start with the production of any newer products because the already existing products that we added to our product line back in '23, '24, those were still under the process of developing -- market development. So we didn't add any new product line, but as far as the SKUs or newer grades are concerned, that is a constant process that we keep on doing for improvement in the margins as well as for getting a loyal and long-term market base for ourselves -- a customer base for ourselves.

Okay. Also, I wanted to know how has the company performed in terms of repeat orders or increased order size from existing customers in H2?

[Foreign Language] that would be higher than 90%, it was earlier also and right now also. We have retained customers as long as who have been associated with us for last 35 years. [Foreign Language] retention rate remains the same. If we talk [Foreign Language] and what I realized was their demand was overall 70% to 75% of what it used to be in the previous year. So that was the main reason. But otherwise, we have retained the customers as well as gained a good number of new customers. And that's what has contributed to our current revenue.

The next question comes from the line of Rajesh Jain from NB Investments.

Sir, my first question is regarding the consolidation of the 2 plants. So you have already given an announcement that you have acquired 4 acres of land. So what is the time line? How you are planning to do shifting both the -- whatever the machineries are there in the 2 plants to the new one? And when are you planning to sell the existing one of the plants? So if you could share some time schedule?

See, the original planning -- as per the original planning, we should have completed it in another 2, 3 months maximum. But unfortunately, like I told Bhavesh ji also, who was asking me questions earlier so I told him that we did a deal for selling of one of the lands, but somehow it got canceled on the way due to nonpayment from the other side. Thus, we had to extend the time line. But definitely, for sure, within this financial year, all the things should be completed with our shifting done successfully without hampering any kind of production or revenues, first and foremost. And we would be there in the new facility within this financial year working at the best of the capacity as well as the land deals since 2 of the land deals have to be done, one of them would be completed within this financial year for sure. And if I have to give a ballpark, the second land sales should also have been done by the end of financial year. I can say up to 80% chances that it should also be completed by the end of this financial year. So that would be the time line that within this financial year, all these things of consolidation and land sales should be completed.

So you have plans to sell both the existing plants within this financial year, that is the plan. Is that understanding correct?

Understanding is correct, only one minor modification that we currently have 3 facilities, right? The two of them would be sold. One would remain intact and operational additive. And the newer ones would be there in operation. So there would be 2 facilities remaining.

Okay. Sir, in spite of your effort, in case if the -- whatever the planned selling doesn't happen of the existing plant 1 and 2, will it still hamper you were shifting to the new plant and consolidating there?

In that case, we would be requiring some amount of external funding in that case.

Correct. Right.

I mean this year's goal doesn't include like failing on the part where we won't be able to shift because definitely, we would be doing the shifting process and everything within this year. Maybe the land sale part gets plus/minus 5 to 6 months kind of thing. But this time, to ensure that we have shifted to the new facility because there the cost savings and the synergy levels are very high. So we have to definitely complete it within this year. That is why in case by, say, July or August, which we are very hopeful that -- not hopeful, we are able to foresee somewhere that the deal should get done within -- again, within this month itself, last by July. But in case something goes up or down, then we would be planning an external funding. But anyhow, we have to shift within this year.

Okay. But the construction work, they're ordering for the new machineries and everything has been completed and it is as per the target so that you could do for this financial year?

Yes. That part is already logged and done. Only the final instructions are pending. And for that, we are -- we were waiting that some kind of land -- proceeds from land sales should come to us.

But already, the new land is already registered in the company's name and everything, the formalities are all over?

It is already registered. CLU is done. It is ready to go. The boundary work has been completed back in January. The land filling work is also completed by now. So everything is in place, only the part of hardcore construction is pending and the installation of machinery is pending.

Okay. But approval from the concerned authorities are already in place or we are yet to receive?

Already in place. Since we were getting delayed, we completed that part basically.

Okay. Fair enough. Sir, second thing, you said you're trying to do some CapEx work. So would that be in the new plant or in any of the existing plants?

New plant.

It is for the new plant? Okay. That is clear. And sir, the second question is, see, all these orders that you have got from Ordnance Factory or the HAL, so from next year onwards, since you would be supplying them from the new plant, do you have to undergo this approval process once again?

No, not at all.

It's not required?

These are product approvals, not the plant approval.

Sir, my next question is regarding the drop in margins. You have already given the reasons for why the top line could not grow. But regarding the bottom line, again, last year -- compared to last year, we are down by 1% as far as the EBITDA margins are concerned. So my 2 questions there is, one, what are the reasons for this drop? And second, what is that you are targeting to achieve in the current financial year?

So there are 2 parts to your question. First and foremost, the reasons that were applicable for the drop in the top line are also the reasons for drop in the bottom line because there was a kind of selling pressure that the top line requirements are not meeting out. The customer demand was already on the low side. So we had to -- by November, December, when the festive season was also gone, the Diwali season, which is usually the peak time for us. The maximum sales go in the month of -- in the third quarter usually, right? When that was not happening, to push the customer to buy more, we had to give certain kind of discounts or some kind of offer so that at least they are buying a little more than what they require, right? So ultimately, those factors, which affected the top line were also somewhere responsible for affecting the bottom line, which was a very unique kind of situation in our industry because I also have been into business for now almost 14 years. This was the first time we had to see such a situation. So this was somewhere a rare case.

Okay. Regarding how much you are targeting to maintain this year?

This year, we would bounce back with a similar kind of margins that we had earlier. And plus it's -- the strategy that we adopted from March onwards that we would be primarily focusing on the sales of just the high-margin, high-value products, like if we have 10 people, example -- for example, if we have 10 people in our sales team, 7 to 8 out of the 10 -- I can say 70% of the sales force or marketing force is working on the sales of high-value, high-margin products or even low-value, high-margin products. So we have entirely shifted -- incentivized them for the sales of those products rather than increasing or boosting the sales of products which don't have that kind of margin. So if this strategy works well and which we should know by the next quarter. So in that case, I think the margins can even be better than what it was in the -- margin percent should be better than what it was in financial year '23, '24.

Okay. Very clear, sir. Sir, my next question is you have also shared that this year, you are targeting for 30% to 35% of growth in the top line. So I do not know whether steel prices have moved up from whatever INR 43, INR 44.

No, no, no.

So when all these 30% to 35% has...

Sorry to interrupt. May we request that you join the question queue, sir, there are several participants waiting for their turn, sir.

No problem. Can I complete this question at least?

Yes sir, please.

Sir, this 30% to 35% growth, from where you're expecting, what gives you so much confidence to have that target?

First, like I said, even in the previous answer that we have directed our sales team and the entire marketing efforts for the sales of higher value and higher margin products. First and foremost is that. Secondly, like during one of the answers I gave to the first person who questioned me that we are -- we had a few bottlenecks related to the export sales of high-value, high-margin products, which we have cracked down in last 1 or 2 months, right? So once we have cracked down and we are already in the execution process and that's why currently, we have 5, 6 containers in the pipeline for the first time in the history of company. So with those bottlenecks gone, I think the sales should -- within next 3 to 6 months or maybe 7 months maximum, the sales should multiply in the exports market for those high-value items. That is why like I said -- one more thing I said earlier that upon introspection, we came to know that due to the small size of our company, these macro factors can also be countered by developing and creating newer markets and entirely new segment for ourselves and which we have realized and we are already in the execution process. Thus within next 3 to 4 months, the sales should jump from those products which are already priced, say, INR 200 per kg, INR 250 per kg or INR 300 per kg rather than INR 44 per kg.

Our next question comes from the line of Nalin Singh from Finviz. The next question comes from the line of Ashwani, who is an investor.

Yes. Sir, I just wanted to know that after we sell both our land and we invest whatever is needed for the capital expenditure, what is the ballpark figure we think we will have in excess, which then we may use to repay our loans or we may use for any other purposes, if you can give some ballpark number for that?

Ballpark would be INR 15 crores to INR 20 crores.

INR 15 crores to INR 20 crores will be left with us after all the capital expenditure?

Yes.

And with this capital expenditure, are we only -- we are only doing the building and shifting our machineries or will be having some new machineries and if so, then how much capacity will be increased?

The ballpark should be around 3,000 tonnes to 6,000 tonnes. I can just give you the ballpark right now, okay? The increase in the capacity, I'm talking about, okay? And it would include the newer product that is GI wire as well as some stainless steel products, may be component screws, et cetera.

Okay. Okay.

It is not just about consolidation investment. It is also about the expansion into new products as well as increase in the capacity, the CapEx that I am talking about.

Our next question comes from the line of Nalin Singh with Finviz.

Sir, you have mentioned that you have got officially registered as a supplier to the Ordnance Factory Board. And in the opening remarks, you mentioned that you are getting some defense orders from HAL as well. So if you can just guide us what are the implication of getting supplier to Ordnance Factory Board and what kind of revenue traction we are seeing from this development in a couple of years?

What was the first part of your question, sorry?

First part was that we have been registered a supply to the Ordnance Factory Board...

We are supplying to HAL, BHEL and NTPC right now, and we have repeated orders from HAL, that I said. You asked me like -- second part is clear that what are the -- what kind of volumes or revenues we are looking from this segment. First part was?

Yes. I think this was a gist of that question, so you can...

Okay. See, definitely, if we see the government policies, initiatives and the kind of boost that is there, and I have seen like when we are bidding for the tenders and everything, the process has got far more easier in terms of -- and transparent majorly that if you are able to crack the pricing and the quality requirements and everything, you definitely get the orders too. And whatever product mix that we currently have and as per our analysis, the revenues from this segment with the kind of focus that we have in the coming years should be quite huge. The potential is very huge, and we should be able to tap that potential over the coming year. Definitely, it would be slightly gradual process. But in the long term, it should give us a very good percentage of revenue out of the total revenue. That is my estimate.

Okay. Sir, just following up on this. So how many registered suppliers are there in the categories in which we are supplying? Like what kind of competition we could face in that? And what kind of win ratio we can see from the defense products?

[Foreign Language] and we are trying for -- we fill in the tenders for most of our products. [Foreign Language] In fact, that is the problem that we often face when we have to give a peer review comparison in the listed space also, right? [Foreign Language] So there the L2, L3 or L1, in case we are not the L1 [Foreign Language] Got it? Getting my point? [Foreign Language] that is very hard to analyze, particularly for Maiden Forgings Limited, right? First and foremost is that. And secondly, [Foreign Language] in fact, we have already tried a little bit part of that in our existing facilities because we got -- we cracked some kind of facility to develop that. So we already started doing that because that has a very, very huge scope over there, because GI wire is getting used in all the bars wire across the border, [Foreign Language] So that will have a super huge requirement. Already our alloy steel bright bars has huge requirement, exists in NTPC, which we already have supplied BHEL. They have a huge requirement for our alloy steel bright bars and stainless steel bright bars. So the potential is huge like I said, and we are trying to get best out of that.

Our next question comes from the line of Rajesh Jain from NB Investments.

Sir, I just wanted few clarifications. I think for the earlier questionnaire, you were saying that when we consolidate and shape, the capacity would be up by 5,000 to 7,000 metric tons. Is that understanding correct?

Right.

So with the existing facilities, how much revenue we can generate?

[Foreign Language] in terms of revenue at even 70% capacity, it will -- the revenue will turn now to be 4x of what it is existing. [Foreign Language] then the sales can go from the same facility -- existing facility. I'm not even talking about new facility, then it can go as high as INR 600 crores or INR 700 crores.

Ladies and gentlemen, due to paucity of time, that was the last question for the day. I now hand the conference over to Mr. Harshil Ghanshyani from Kirin Advisors for closing comments.

Yes. Thank you, everyone, for joining the conference call of Maiden Forgings Limited. If you have any queries, you can write us at [email protected] and [email protected]. Once again, thank you for joining for everyone. Yes.

Thank you. On behalf of Kirin Advisors, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.