Menon Bearings Limited ($523828)

Ladies and gentlemen, on behalf of Kaptify Consulting Investor Relations team, I welcome you all to the Q4 and FY '26 post earnings conference call of Menon Bearings Limited. Today on the call from the management team, we have with us Mr. Arun Aradhye, Managing Director; Mr. Aditya Menon, part of the promoter group and Mr. Anshul Menon, again part of the promoter group. As a disclaimer, I would like to inform all of you that this call may contain forward-looking statements, which may involve risks and uncertainties. Also, a reminder that this call is being added. I would now request the management to brief us about the business and performance highlights for the period ended March 2026, the growth plan and vision for the coming year, post which we will open the floor for Q&A. Over to the management team.

Hello, everybody. Good afternoon. Thank you for joining us to discuss Menon Bearings Limited audited financial results for the quarter and full year ended 31st March 2026. This has been a landmark year for the company. We have achieved significant growth across all key financial metrics, reflecting our strong position in Auto Components segment. So total income growth, our consolidated total income for 226 INR 300-plus crores or over 23.16% increase over the previous year. So far as profitability is concerned, our PAT for the full year stands at INR 38.25 crores, representing a growth of 53.41% which is really phenomenal. So far as quarterly performance is concerned, the fourth quarter was particularly too strong. On a consolidated basis, our PAT for quarter 4 '25,'26 was up by a remarkable 18.5% over last year. That is year-on-year. So earnings per share has also gone up from INR 4.45 to INR 6.83 per share. Now coming to operational excellence and strategic updates, so we have -- the performance overall was driven by increased operational efficiencies and a focused approach to market expansion. We continue to operate within our primary segment of auto components where we are seeing sustained demand. Now as a legal compliance, the new labor code has been introduced by the government and the regulations have been issued in the month of April '25. However, we have taken proactive measures to see that the impact of the same is having taken care of and has been accounted for in the previous year. So there is no further liability in this result will be arising for the past year. That care has been already taken so far as gratuity and basic bonus and all components are concerned, that has been already taken care of. So asset management is concerned, you see our total asset stands at INR 257 crores, so the asset turn is almost 1.5%. So far as gearing is concerned, asset turn is 2, ALCO which is 1.5 and Bret, it is almost 1, which is likely to be are targeting about 2 in the next year, including this year. Looking ahead at '26, '27, we are extremely optimistic. Our new development part pipeline is robust, with 51 new parts across major customers like John Deere for India domestic and exports as well. We turn [indiscernible] and [indiscernible] representing a business value of almost INR 30 crores within this year and next year. Most of the items are under development. Some of them have been already approved by the customer. Some are in the commercial discussions. With this, apart from this in biometal division also, we are having a robust pipeline of more than INR 50 crores. And that part breaks, it is almost INR 10 crores for the next 2 years. With this, we hope that there will be a question in or [indiscernible] whether we can sustain the performance that we have given in the last quarter. I am 100% sure with the business in pipeline and so many actions that we have taken in the past so far as material connection is a raw material prices are going up we were successful in passing on that burden of raw material to the customers to the larger extent, maybe 1 or 2 customers are live, and that will be completed during this quarter also. And again, we'll be sustaining this because of increase in the overall turnover, which we are targeting a rate of 25% year-on-year for the next 2 years, and you can calculate as to which volumes we can reach by 2028. To be optimistic, we have, in our mind, estimate which depends upon the overall geopolitical situation and all these things, we should consider that. But we are very optimistic to see that and we will take all our efforts to see how we can reach INR 500 crores by '28. So there are several other customers and in conclusion, Menon Bearings is entering in the new financial year with strong momentum and healthy order book and a solid financial condition. Again, assure you that considering the present situation, going forward, we'll be able to maintain EBITDA more than 20%, and it should be about between 20% to 22% during the next 2 years. We remain committed to delivering sustainable value to our shareholders. Now we will now open the floor for questions. Thank you very much.

[Operator Instructions] We'll take the first question from [indiscernible] Dave.

Sir, congratulations on amazing performance. Very, very well done, sir. And also, I would like to thank you for starting the con calls and appointing an higher agency or putting up the presentations. It's very, very useful, sir. I really appreciate it. I've been tracking your company for more than 10 years. And I was a shareholder a long, long time back. And again, I'm a shareholder again. So even in that time, you guys did very well, sir, even now you're doing very well. So congratulations, sir. Sir, one request. In the quarterly numbers, which have come out, they don't quite tally with the format in the annual report. There are slight changes, reclassification, especially in the employee expenses and the other expenses. It's difficult to tally if the 2 formats are very different. So I would request, sir, for 2026 annual report and the subsequent quarters, if you can stick with one particular format which is consistent across annual reports and also in the quarterly results, so that we can tally individual line items. That would be of great help, sir.

I know what is your observation that I have observed and we have given a particular note in the presentation that has been submitted to -- submitted on the website as well as operate on the [indiscernible] the also, we have given a precise note as to why there is a change last year. The cost, so far a tooling manufacturing is concerned, what shown under operating expenses. Now it has been shown under actually raw material consumption. And that's why there is a difference than that what has been already given. So we will see that.

Apart from that, there is one on employees also.

So that goes on [indiscernible] So that we will be giving details in the AGM.

Perfect. It's a small thing, sir. I just wanted to make sure that I put that point across. Sir, given the new segments that you're working on and what has been written in the presentation, about the new components that you are developing and the trials which are happening. After that, sir, how do you see the margin profile of the company changing? So one is the operating leverage, which will come in because you're growing volumes Second is the mix change that you were undergoing. So how do you see the margins -- the gross margins and the EBITDA margin is changing, sir?

You see, so far as new developments are concerned, more than 50% of the new business in pipeline is exports. That is for exports, where margins are always better than aftermarket or OE. So considering that we're sure that we will not be only able to sustain the margin, but the margins will further improve.

So this will be like 50 basis points every year? Or will there be a bigger jump because the other divisions will now start contributing quite meaningfully, right?

You see, it depends upon exactly how the -- at what time the business starts. So far as exports are concerned, because you see we have already played in so many meetings that was issued at inquiry -- the total time for testing validation, preparation of samples, submission and active product and it takes a lot of time that is between 6 months to 1 year. Depending upon when the actually the business of a port starts, it is productionized. Depending upon that 15 basis points or even more than that, we can definitely and I'm sure that it was above 15% in the next year.

Sir, what is the planned CapEx for the coming year?

Planned CapEx for Menon Bearings, it is a bearing division. It is biometal division, INR 25 crores for next projects and for ALCO, it is INR 7 crores and brakes, it is INR 3 crores.

So INR 25 crores each for 2 years for

Combined together 2 years.

So 12.5, 12.5 and then 7

Maybe 20 plus 5, but taken together, it is 25 crores for 2 years.

And sir, for the Brake Division?

Brake division, it is INR 3 crores.

Perfect. One final question, sir. The one thing which is sticking out is the high interest expenses. Is there a particular reason for that, sir? Is there a way to control that? Any commentary on that part would be of great help.

You see since we have started the business and our exports have gone up, particularly in the USA, the total turnaround time of data sees more than 180 days, and the exports have increased substantially. So increase in export is more than INR 3 crores. I give the turnover time of 180 days is there. So obviously, the debtors you can see from the balance sheet.

The debtors have also do..

Has gone up, and it is obvious. But at the same time, what we have done since the interest subvention on exports is available by the government, they have made it available on our request, particularly on our company's request, Honorable Prime Minister has considered that our Ministry of Commerce have considered and they are now offering 2.75% subvention on export subsidy, okay? So we are going with PCFC limits, and we already talked, we have taken INR 6 crores of loan from the bank so far as PCFC is concerned, which is available at the rate of 4% now 4.7%. So over a period of time when the total limits we are availing from the bankers is to the tune of INR 25 crores so far as PCF limits are concerned so that the total cost at rate of 4.7% instead of 8%, blocking will be higher because of debtors. So we can bring down that total working capital limit. And at the same time, we'll be saving about 4% on working capital limit so that interest part of it will come down and whatever CapEx that we are going to do that most of the -- most of it will be financed with internal accruals.

We'll take the next question from Garvit Goyal.

Am I audible?

Yes.

I'm Garvit. Yes. I'm a bit new to the company. So just trying to understand what kind of new products are we currently working on? What are the sectors that they cater to?

So primarily our main customers are in the tractor at CPCB division, then generators earthmoving. In the recent 3 years, we've moved towards a little bit EV, we're making parts for -- we are a Tier 2 supplier of Tesla through concentric pumps. We do -- we give parts to eating transmission. They do parts for post-mobile. We also started to apply into [indiscernible] Tata motors for the electric cars. So we shifted a little towards EV, when 10 new products that like new product like radi said, we've entered into the fiction material. So we're doing HCV CV 2-wheelers, now Navia entered new products into 3 wheelers -- we're exploring a railway from August or like by end of this year, railway business would have been started. In aluminum, we are diversifying into oil and gas, house automation -- product there are different area products, which we are doing now.

You mentioned about EV. What percentage of your revenue right now is coming from EV, sir?

So aluminum division around 10% is coming from EV.

Okay. And are we planning to enter into -- apart from the automotive sector, like the ones railway you mentioned but again, it is into the mobility part of it, right? So do we have any plan to enter into precision manufacturing to aerospace or something like that? Do we have any kind of adjacent profitabilities in that area, sir?

We are doing high-end technology. We can do aerospace parts. We have also entered aerospace. We are doing some parts for Honeywell for airport and aerospace solutions, but not -- we have not entered it largely yet. But our company capability is there to do aerospace, and we are exploring options, but we are doing a few parts for aerospace.

Our capability to entering into aerospace, but what we are concentrating as in the initial discussion and in the speech, I told you that we are concentrating more on auto components, where auto components focused industry and manufacturers.

Understood. And sir, what kind of demand scenario are we seeing in particularly in the U.S. market right now from the CV part, CV side of it?

In so far as USA market is concerned, our exports have gone up by almost 50% over last year so far as SA market is concerned, and there is a lot of opportunities we are looking for apart from USA, we are targeting now European countries as well, since European countries are looking to divert their volumes and businesses from China to India and the tapping our dose, and we'll be very happy to see that they come into our fall for the next year.

And as Menon Bearings has a good brand name, we are doing high-value parts for the last 30 years. As your -- like Mr. Aradhye said as Europe looking for new vendors, new suppliers in India. That's about last 6 months, we have got so many inquiries. We are getting overwhelmed by so much RFQs that are coming towards us. So Europe business also will start in the future. Today, out of the whole pie chart, we are doing around 35% out of 100%, we are doing export. And around 80% of export goes to Europe. But now we are seeing a lot of European demand and European inquiries coming. Maybe in the next 2, 3 years, Europe will also have a good share in our export. Europe market will have a good share in Menon Bearings export.

And in Europe also like entirely, we will be focusing on auto parts, right?

Yes. All our components, biometal division, aluminum division and brakes division.

We'll take the next question from Akshay [indiscernible]

I just want to confirm the margin guidance. So for FY '26, you've done 22% and '27, '28 we are basically estimating that each year, there will be a minimum increase of at least 50 basis points, right?

Right. We will certain that. Not worry.

We take the next question from Himanshu Upadhyay.

Am I audible?

Yes.

So one thing, one place, which has still not done well for us has been look. So in the last 2, 3 years, the expectation was this will grow at a much faster pace than Menon Bearings business because it is at a very recent stage and a lot of new product deliveries what will happen in development. But if you look at '24, it was around INR 64 crores, INR 65 crores. And FY '26 has shown some growth. But the way the business was expected to grow it has been slower and bearings has been the positive surprise for us, okay? So Bearings has done pretty well. So can you elaborate on what is the reason for that?

Last 2 years, if you say [indiscernible] result, there has been growth. We see exponential growth as Menon Bearings. But this year, like how we mentioned, we have developed parts in the aluminum segment for various OEMs and different customers. From -- if you see last quarter from January, you have seen there has been significant growth per month in your quarterly growth in Alco also.

Particularly, if you refer to the fourth quarter of this year for aluminum men and AlcOp is concerned, you can see there is a growth quarter-on-quarter to the extent of almost 25% and we are assuming a growth in AlcOp for the next 2 years at the rate of 29%.

Actually, because of the war, a lot of delays were happening, a lot of aluminum parts, which we made were new engines. So last 3 months have been quite what you say, the export routes have been taking delays. Customers have [indiscernible] 6, 8 months because of war and raw material prices increase on down Donald Trump's tariffs. So the customers have been a little bit slow. So when our samples had to like be delivered in January, they were okay for March because all customers could like we make small parts of one engine where customer requires around 800 parts from different customers. So it doesn't take you out of time. But last quarter and this quarter, quarter parts we have been developed, we are seeing that come into production. And last quarter and this quarter also, you will see a much significant growth for [indiscernible] also. And the next 2 years, Menon Alcop will be contributing as much as Menon Bearings in the whole pie chart.

Okay. And in biometals, have we added many new customers because of which we are seeing so very good growth or it is the existing customers and the very good growth, what we have seen...

That is a mix of both new customers as well as the existing customers of boom, the business has grown substantially. And again, I repeat here that ACO -- for the next 2 years, will grow at a rate of 29%. I'm 100% sure because most of the items have been samples have been already approved. We are just waiting in tranches, they will start issuing the order so far as procurement is concerned. The only thing is that we are waiting for the orders now, and it will be completed over a period of 2 years. And as I told you that there is a pipeline, a sure a pipeline of INR 30 crores that can be complete completed within 2 years from now. As I said, there will be a growth of. I can tell you we can reach more than INR 120 crores in next 2 years, so far as Alco is concerned.

And breaking business, the [indiscernible] we got has it settled down? Are the testing for the railways and CV, which we're pending, what is the progress there?

That is under production, and we'll be receiving it by the end of August. And thereafter, we will take up the business, not only of railways, but OEMs business also will be in our fold. I'm sure we had a meeting today morning itself. So far as railway business is concerned, we are already tied up with them. already inspected. They are just waiting for the arrival of dynamometer -- after that, we'll get the registration and vendor number and we'll start the business. It may not be a large scale to start with. But slowly, we can take up with railways as well as OEMs.

And any specific reason so much delay in dynamometer because I think it was to have come last year August.

You see. We actually ordered this machine, our testing machine for other manufacturers. But unfortunately, they could not complete because of certain reasons, which cannot be explained here. But now that is in progress, and we are 100% sure that it will be completed by.

See, dynamometer is not an easy testing equipment. It's very expensive, first of all.And there are very few players in India will do it. And what technical specification in break for demanding a few other customers couldn't achieve it. So finally, we found a partner, which is delivering the specifications, which we want which can do even high-end railway parts in 1 day Barata the new wage streams. We just didn't want -- if we're investing so much money we wanted to have a technology that can help us for the next 10 years. So a lot of back and forth with many companies and engineers are consultant. And finally, we reached on a party which is delivering our requirements, and that is coming in. At the same time, we've developed new parts and brakes, we entered a 2-wheeler segment, 3-wheeler segment. We are also submitted samples for OEMs and the nanometer also is coming in August where we also -- like we [indiscernible] today, we had a very positive meeting with the railway segment. So that business also is looking forward. So brakes also has a good future lining up.

We'll take the next question from Pritesh Chheda.

Yes. Hello, Sir, on the biometal bearing side, what is the dependence on CV and what is the dependence on tractors in our business line, if you could share that mix? And second is these material cost increase because I'm assuming bimetal means copper will also be a part of the raw material. So -- and there is a lot of inflation this base metals. So how do we handle the bimetal bearing in terms of the growth next year and also the margin outlook considering the metal price being up?

There are 2 things that you firstly asked as to what are the segment was revenue percentage tractor, it is 35% of the total revenue and HCV LCE, it is between 20% to 25%. Secondly

So then what is the balance 25 and 35

So brake is 20%, transmission is 15% and other engineering boots and inverters, et cetera, that is 10%. -- brakes will then be a part of some auto, right? -- are system in system for retail not break lines -- this is a parameter we are telling you.

[indiscernible] buses go wherever rotation is there, but it goes in HCV, LCV brakes in the gives to all segments. But as primary OEM, 35% is tractors, 25% is CV -- the 2 ex usage 15%. 15% transmission we give to Allison Transmission, Magna transmission and resid 10% in electrical application and other industrial applications where we give up product. So that's the ligation pie chart.

So I'm assuming that this breaks in transmission where you are a secondary supplier in turn goes to auto. So auto will be like 90%, right? And in that if one has to look at in that 90%, how much is HCV and tractor, Will it be similar as you are a primary intern secondary also will come out to be the same breakup?

Similar breakup, I would say.

Yes. So if not a nomadic concerned, you can see raw material prices are not increasing now only -- since October, they have been increasing like anything. And we are already part on that burden to the customers who are having 3 reagent formulas, RM indexing is there investing it. And accordingly, we are passing on a Brant customers. not to worry about the margin so far.

For a better for better understanding, before we strove delta. So 3 months, the prices have increased, we beared the whole in 1, 1.5 years is equal out. Some 3 months, the customer bears is, some we beat it. But now as a more volatile and increasing significantly. Every day, the management, our marketing teams are having chats with the customer, how we can reduce this delta from 3 months to per monthly basis or how we can reduce the burden, which is better by the company even more. But whatever raw material increase happens, the customer bears it because we are supplying high-end technology parts to them, and we are their partners. If our products don't reach their assembly line stock. So they have a bigger cost if that happens. So customers and us, we have a very good relation we work in tandem and they give us raw material price increase. But as Menon Bearings management, we are trying to make this gap as small as possible.

And the growth outlook in the biometal bearing considering FY '26 was one of the best years for tractors and HCV.

So 1% growth is unloaded Growth this year also for Marine bearing also has been significant. Next year alone, also, we are growing at 25%. Man. 23% 23% next year also. But like -- I would like to clarify one more thing. I've always said it in our investor meetings. Our top management or our company philosophy is growing sustainably. If you look for the last 10 years, 15 years, our EBITDA margins have remained the same. Our top line must have not grown so aggressively, but our profit margins and EBITDA margins have remained the same. So when we are talking about growth, our policy, our philosophy of our company is to have the same margins. So tomorrow, when a says, we'll reach 500 , we are going to maintain similar EBITDA and profit margins. So we take different policy matters to grow sustainably. So we don't get greedy behind growth or top line or one customer, we get big business. So now our customers has more than 15%.

As you said, we are not approved volumes. We are balancing between volumes as well as margins so that we are certain that over a period of matter.And we will certain it in future as well.

And none of our customers has more than 15% market share, share of the company. So we are not dependent on one customer or like you might say that auto is a big margin. So we have a good diversification of tractor companies we give to good diversification of import and export. So even if one cycle is down, we are not affected as a company as a whole in the long -- in a bigger picture. So we take care of all of that and take decisions accordingly.

Okay. So just one last question on ALCO. We have 2,000 tonne capacity, right?

That is actually 1,450 tonnes capacity, but we are having another spare holding furnace. So we can double that capacity at any time considering when volumes are there the volumes and future that we will have to all that capacity as well as start production on that.

So more than 2,000 if required. Currently, we're operating at INR 1,500. 400 tonnes per annum, right? Yes, yes. Per annum and what is the utilization utilizes an ad of now is 65%, and it is likely to go up to 90% by the end of this year so that we will have to engage another furnace next year. Yes. And Mr. Ccheda, I would like to let you know if aluminum for at least manco,don't try to calculate by tonnage because if you see any of our competitors in the market, for basically, I would say, before price increase, aluminum was INR 200 a kilo. Average realization if you see competitors even big players -- they to around 450, 500 is higher end average realization of agitation is INR 200 crore to INR 50 more, where Arcos average realization is INR 750, INR 700. So we are focusing on very critical high-value parts. So tonnage calculation won't give you correct, like if you try to reverse calculate it won't give you -- you won't come to our figures.

So what we are telling you that we are not after volumes, we are balancing both the games you see volumes to a certain extent, which can pay these margins which are certainly -- and even if you see in the aluminum division, big companies, I don't want to take my competitors' name, they are working at 6% and 8% margins. Where in the aluminum division also, we are working at around 20% margins. So that's the difference between Menon Alco and other players in the market.

We'll take the next question from Raj Maheshwari.

Am I audible?

Yes.

Congratulations on great reset on a FY '26. So sir, first of all, I wanted to understand, like you mentioned repeatedly that you were able to pass on the raw material price hikes to the customer. But just wanted to understand a little bit what's going on in the industry. How much of the price hike you able to see? Like I know you have passed it on, but how much was the raw material inflection?

It was significantly high this year. Aluminum also, we use the different alloys and different reds technically. -- but some grades that cost INR 24 a kilo back to 280. Corporate, everyone knows -- last month, it was INR 210 now it has to 1,275 though it is fluctuating. -- according to the geopolitical situation and market. So they do volatile. We cannot say has gone up to -- maybe in the next week, it will go down to 25 as -- but the price around 1 year back -- so there has been significant jump. But we have to buy -- we do buying every month or quarterly. So these prices have been very volatile, but customers, because we are doing higher value addition and our customers are OEMs, we are not doing any like not -- I don't want to say [indiscernible] but all our customers are a great customers. They also appreciate our effort, and they give us -- we have a very good relationship for the last 30 years, and they support us for this price increase.

And any difficulty or challenges you are facing or you might face in sourcing the remedial apart from the price side?

No. sourcing is not an issue. is the issue. But there are some logistic issues now because of the war, the logistic lines are taking a little longer. So now because of that, we have to be proactive, be in touch with the logistics -- our logistic partner partners more often try to get the best routes -- so from that end, we are spending more allergen time making sure all that happens on time. But before the war, it was more smooth or more a situation --

That is more on it so far as exports are concerned -- most of the raw materials required, we are procuring it domestically. So the worldwide situation and geopolitical situation doesn't affect much so far our industries are concerned or also some imports we have to do to have to take a little more effort so far as certain material is concerned, but overall situation is normal for us.

And so we have to be more proactive and monitor the situation better.

Understood, sir. That helps. And sir, in the last con call, you said that exports, you're targeting almost 90% to 95% of exports you want to build it Xbox. So how far are we in that?

We are working most of our export orders are getting converted to ex works. Around 80% of our orders are Xbox, remaining 20, we are in talks.

So it's not very easy. Some customers are, say, they had what happens when we are discussing and negotiating with such customers where our quantum of business is to hand where our terms are DDP, that is due to delivery duty bread -- so we are talking to them at the same time, they are asking for reduction to the extent that we cannot afford. So in terms of that better will continue with the distance. That is what is happening. But we like are visiting the USA next month, maybe can [indiscernible] month and month, then we'll have talk to them, and we'll see what best we can do, whether it can be from 80%, we can move it to 90% have to see.

But majority of our exports still out of 1, 80% is export. So that is still very -- we are in a very good position where we are not letting a third party like a more or a 1/3 external factors affect our quality and delivery timings. So 50% is left. We are still negotiating and trying our way how we can get exports.

And that is yet to reflect in the trade receivables uses.

Yes.

Understood, sir. So second thing is that are --

We'll take the next question from [indiscernible] I'd request the participants to limit their questions to proper participants.

Congratulations on a good set of numbers. Sir, firstly, just continuing the previous participant. Like what is the time lag we have in terms of passing on the cost? Is it a month or quarter? How do we do it?

Quarterly. Yes.

Okay. Got it. And sir, secondly, earlier, we had mentioned that we are trying to improve our asset turns to somewhere around 2% to 2.5%. So like what sort of time line and are we on track? And what are the key changes or steps you are taking in?

So we are right on track. We see for the next 3 years, what I already told you that there is a growth of 25% envisaged year-on-year. With that, we will be able to -- on an overall concerted basis, we should be able to reach asset turnover of 2. By '28, we should be reaching that 100%.

And you mean by efforts, we take efforts on a daily basis. We are being catering, there is technology upgradation, trading of our teams -- so a lot of effort taken by the management to make sure that we are achieving these set of numbers.

I appreciate that effort. And lastly, just also wanted to understand earlier in last quarter con call regarding the PTFE Bush opportunities for the EVs, we had sent some samples. So I just wanted to know like how is the -- have we received the approvals? How has it been needed some commentary, if you can?

You see total inquiry for PT buses is for 7 parts. Out of that, 1 part they were initially asking us to provide the samples, which has been approved by the Europe European country. and their voice presets visiting full office, [indiscernible] facilities of that customer by 26, where our marketing manager will visit them, and we'll take it forward and to on that approval that overall, they have reset a communication that the sample is approved. Now that voice president will put up another inquiry for remaining 6 parts so far as TAP is concerned. And those all will be manufactured by samples will be sent to Eurotran countries. And once that is approved, then -- maybe for so far as 1 lakh of buses per month is concerned, we will be getting that order within a month or 2. And for rest of the item, those samples will be sent to them, and we are likely to get that order to be productionized by this year. And that quantum will be about INR 3 lakh of uses per month.

And there is significant growth in the PTC industry also. Like the newer age engines will be moving towards PTFE and new coatings and new technology. And last 3, 4 years, main bearings, we have as a team working very hard on this technology. And finally, we have perfected it, I would say. So moving ahead, a lot of growth will be there in this segment. because the newer engines require this. And that's why like Mitarai, European companies are interested now and we are submitting a samples. So in the next 2 years, you'll see a growth in this PTFE market also. The last 3, 4 years of R&D and researching PTFE is benefiting us now.

Just one final question. I guess, earlier in the investor presentation, we were exporting South Africa via Dubai distributor. So I just wanted to know because of the disruption of the West Asia war, so have we changed our path to it? And how are we planning on doing it?

No, we still are doing export through Middle East only because we have not -- we had passed a bad experience directly working in Africa during payment conditions and all. So this merchant exporter gives advanced payment, which goes to Africa. So now the time period is longer, the consignments are going before we went 3 times a month is going once a month because of congestion in the Dubai Ports and Middle East ports. But work is happening through Middle East only. We are -- we want to be safe. We don't want to our material -- we are doing -- we have certain payment terms and conditions which we are focusing on, and we don't deviate from that.

I think you're targeting the question is actually the material that we are seeking to African countries through the way that

Yes, yes.

So what has happened so far as [indiscernible] , they export to applicant countries through the way. For the last 3 months, we are -- that export is haunted. That has affected to the extent of almost debt we are not during the last 3 months. However, at the same time, that has been compensated by customer for African countries we have got orders of almost INR 6 crores -- INR 6 for the entire year. And here, the merchant exporter is lifting the material from us and sending directly to African countries. And from the merchant exporter, we are getting the payment in one. So overall, there is no impact on our sales or volumes as such.

The next question from Ajay Sharma.

Yes. I just want to check for Alcop. You have mentioned that almost INR 50 crores to INR 60 crores of revenue will come from just 1 single customer. Is that correct?

Not one single customer, there's John Deere, there's Honeywell. The [indiscernible] is Eaton. There are many customers but we developed a lot of export parts. Like when I say John Deere, there's John De plant in Mexico, there's a Jandia plant in U.S., there's a [indiscernible] plant in Europe. So it's not 1 plant like and that 1 plant has INR 2,000 crore turnover. If you see that, there are 10 different customers, which we are developing parts for. So the next 2 years growth, there are different segments. So John Deere is one of the larger players, but we are developing parts for Honeywell, Concentric, Tapete what are in the initial speed at a Colin, that I will repeat it in.

New development parts pipeline is robust with 51 new ports across major customers like John Deere for domestic as well as for exports, Denton, Taco Petronet and Magara, representing the business value of more than INR 29.69 crores so far as aluminum business is concerned and that all will be productionized in this year as well as some part of it will in the next year. So overall, INR 30 crores business pipeline in ALCO is pending and will be completed during these 2 years, okay?

Yes. Got it. And for biometal, I guess you're targeting 23% growth, right? And so -- where is the additional growth coming from?

There are so many -- so many customers and pipeline is very large, you see. So entire pay is there almost more than 28 to 30 customers are in pipeline. We are resuming not only issued additives, some of the commercials have been already finalized. Some of the samples have been already sent. Some of the samples have been already approved and we are getting orders from them one by one by one. And during the next 3 years, including this year, I hope that the new addition into biometal business will be more than INR 50 crores.

Like Mr. Aradhye said, today's meeting that happened for new business, that business will get actualized after 2.5 years. So what growth we are seeing today is last 2 years' effort. So today, what new business we're looking at because it's an engineering and very technical product. There's a lot of time that goes in developing the parts and testing validation, then they have to get all the new engine [indiscernible] parts from all their suppliers. Then 6 months testing, then they start business in a small way. If the order is 10,000 pieces, first month, they don't do 10,000. They started 2,000 pieces, then 4,000, then 8,000. So the quantity increases. So it takes a little bit more time. So in the biometal bearing, it takes about 9 months from start to order maybe in the aluminum division, it takes a little longer time. Around 12 to 14 months from start. From the day we get RFQ till the startup business happens. And these external factors like the war and et cetera, doesn't help in the situation.

We'll take the next question from Devin Bupa.

I just have one question. In the revenue split that we have given, right? Starts OEM replacement and OEM, aftermarket and export exports. But there's also another line in others. So what is this others?

That is industrial invest generators, compressors, and coolers, et cetera. Not of air conditioning or buses go for a lot of air conditioning applications, -- got it. air conditioned industrial fridge those go in the hotel industry and compressors-- but -- and how do we see the growth of this segment because, let's say, now with all the power demand, both on consumer side and our industrial side, -- you see we already sold it from compressor division like my they are into a Japanese company, they are into compressors. Similarly, we have got Encore their generates that will be completed within this year itself.

So from the auto segment also, we are looking at other options to diversify and grow also. And how real estate boom is happening in India, everywhere electricity required almost all buildings are strong leader generator. So this growth is going to get bigger and bigger in the future. So we are looking at different companies, different applications where we can help and support.

And apart from that, we are already supplying to PSA like that, you said, Mr. Ajit Polo, regarding air conditioning. That is a huge business we are receiving and it is increasing every development that is increasing. Apart from that, so many compressors and generator sets, we are receiving the incident we are already into commit then into Mahindra, the other my coverage also there so when compressors are concerned. And those inquiries are being floated to ascend will take care of.

Got it. And this 10% revenue in this 12% to motion.

What happens when this revenue also goes up -- at the same time, domestic and export is a -- so when was that it just is, see set that for last 10 years is similar. But now INR 300 crores, but the others also remains similar percentage. -- when you see the pie chart. Our aftermarket is almost stagnant, 8% over last more 4 to 5 years. But the business has gone up from INR 10 crores to INR 15 crores over last 4 years. And we are targeting a will mention. Yes, the overall pie is going up. So that's why -- so the question that I had follow-up is that this, let's say, 8% or 9% for this year, this is completely in by metals business or it's also split across No, no, -- that is so far as -- in Aluminum division, we don't have any aftermarket. No, I meant for this other business. other business that is so for biometal is constructive.

We will take questions from the chat. Sukanya Treaty has a few questions. First of all, what's our current order book? And what size of orders are we looking to close over the next 3 to 6 months?

You see our current order position is more than INR 32 crores. Out of that, we'll be survey almost more than between INR 30 crores to INR 31 crores on a consolidated basis. Going forward, what we feel that will be targeting almost INR 190 crores for first 6 months.

Okay. Our next question is what would be the industry mix in this product mix?

Sorry?

Industry environment. It will be the industry mix. And how much would be auto, how much aerospace, how much railways?

[indiscernible] base, all the 3 divisions have different applications. Like biometal, like we mentioned before, tractor is 35%,

He's specifically asking regarding the order book. So how much will be [indiscernible] how much aerospace and how much railways are purely speaking, we are not bifurcating order book position into auto and CV [indiscernible] sale happens, there will be consider it. But overall, Mr. Ajit will tell -- how much will be the -- what will be the home applications? What is the pipeline business tractor business, you will let you know accordingly and it will depend more or less content, okay?

Roughly, I'll give you an idea about our order book out 100% of our order book, around 60% is export, 40% is domestic. So you can get a better understanding on that. 60% export, 40% domestic. Majority of it is from the auto industry, we are doing like tractor, we are doing NCV,LCBand a lot of transmission work. So that is one. We're also doing -- around 10% of the new order book is from EV. Like we mentioned, we are doing -- we are giving parts to Tesla Motors to Porche mobility. Now we entered Tata Motors for Tata electric vehicle parts. So we have entered this as a new client to take Prestolite 2 years ago. We are only doing 2 parts with the -- now we do more than 4 parts with them. We've gotten more for RFQs with them. So in the near future, even the EV presence of Menon Alco will increase. So this is like a basic. Once railway starts were doing 0 business in for LV. So we are finished our registration with the [indiscernible] people visited our planned for audits -- so in the near future, even the way business will start from like 5%. But we are looking for railway business in the future also to increase.

Overall, on a consolidated basis, will be 75% and 25% will be reset on a consolidated basis.

Okay, sir. further as you had earlier guided for INR 350 crores revenue in FY '27 -- are we maintaining the same? Or is there a material upside to this number? What a feel that we should be expecting that target.

I just want to say now we have with Captive also for the last 3, 4 years. Two years ago, we had submitted I don't know who are following the company for a long time. We have given a figure of INR 275 for this year that we are going to achieve. And which was subsequently reward. -- our management, everything working together, we have exceeded the number by INR 25 crores. So if number is INR 350, I'm pretty confident. And Mr. Aradhey was saying, we will surpass that number. by how much that we have to see next year, but we will be surpassing that number also.

Say, what were estimated is more than INR 360 crores.

Yes. Okay, sir. And our last question is I understand that we'll maintain EBITDA margins above 20% now. However, we did 25% in Q4. So suffice to say that depending on the export mix in that quarter, our profitability number may move in a range of 22% to 25%. Is that correct, sir?

Yes, that is correct. Depending on what kind of high-volume products come --

You see sometimes what happens at raw material goes up and we can pass on that burden in the next quarter. In the midterm, we have to sustain that water. And maybe temporarily, it can come down and subsequently, it can go up again. But overall, we can say that we will be able to sustain EBITDA margins to the extent 20% to 22% overall for the entire year. On the sulfur side or on a conservative side,

If the environment -- the third external factors are in our favor, it should be higher.

You see elasticity is going up. Labor cost is going new labor code has been implemented. All these cost needs to be considered while calculating the EBITDA margin. So that on a conservative basis, we can see we can certain that between 20% to 22%.

Thank you, we'll take the next question from Manas Jane -- just -- I mean, coming to the same question of EBITDA margin. I just wanted to understand this quarter is purely there's no one-off. It's just pure operating leverage coming out just for academic purposes.

So that is you see our production capacity is something. During the previous quarters, you will see the utilization. Utilization was about 60% to 70% or maybe about 75%. Now we have achieved the production targets and capacity utilization to the extent of 85% in biometer. In aluminum, we -- capacity utilization gone up from 45% to 60%. Similarly, in Breaks also, we increased the capacity by almost 1 lakh of prices per month and that capacity utilization also has gone up. What happens is when the product capacity utilization goes up, the productivity increase. The expenses related variable expenses to some extent increase, but the feed cost remained the same -- so the total cost of production goes down. And because of that, we get sustained margins, our overall margins are increased. So overall, in the production volumes are high, sales volume is high, then we can have better margins as compared to the corresponding period of last year or previous month.

Got it. So it's operating leverage basically taking operating level --

of course, it's operating leverage but all different parameters. I explained to add to how we achieve that, yes.

Sir, since that was the last question, would you like to give any closing comments?

So in conclusion, Menon Bearings entering the new financial year with strong momentum, a healthy order book and a solid financial foundation. We remain committed to delivering sustainable value to our stakeholders, shareholders, and I thank you for both the promoters who will present in the meeting and guiding new people as well as imparting the information, they have got their export OPT so far as the performance of the company is there. And overall, I'm sure with support of all of you. By the grace of court, whatever we have decided to grow at the rate of 25%, and our optimistic target is at doesn't go up we should be able to reach INR 500 crores. And with this, I thank you once again for participating in the meeting and then asking us some leading questions so that we can think upon that wherever the improvements are required, we will definitely improve. And in the next meeting, whatever the questions we have left those will be answered in the next meeting. Thank you very much. Have a good day.

Thank you so much.

Thank you to the management team, and thank you to all the participants for joining on this call. This brings us to the end of this conference call. Thank you.