Ramkrishna Forgings Limited (RKFORGE) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q3 FY '24 Results Conference Call of Ramkrishna Forgings Limited hosted by Emkay Global Financial Services. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Jaimin Desai from Emkay Global Financial Services. Thank you, and over to you, sir.

Yes. Thank you. Good evening, everyone. On behalf of Emkay Global, I would like to welcome you all to this earnings call of Ramkrishna Forgings Limited. I would like to welcome the management and thank them for this opportunity. We have with us today Mr. Naresh Jalan, Managing Director; Mr. Lalit Kumar Khetan, Whole Time Director and Chief Financial Officer; Mr. Chaitanya Jalan, Whole Time Director; and Mr. Rajesh Mundhra, Company Secretary and Vice President, Finance. I shall now hand over the call to Mr. Lalit Kumar Khetan for the opening remarks. Over to you, sir.

Thank you, Jaimin. Good evening, and welcome to everyone present on the call. I wish you all a very happy New Year from the entire team of Ramkrishna Forgings. I hope you all have got an opportunity to go through our financial results and investor presentation, which have been uploaded on the stock exchange as well as on the company's website. I'm pleased to report that our company has a strong Q3 and 9-month FY '24. The commercial vehicle segment, the crucial pillar of the national economy, is undergoing a significant transformation. This is fueled by technology, mega trends such as alternative fuels, electrification and industry modernization. Factors such as the surge in online retailing, government policies, logistics services and expanded network of improved highways, industrial growth, all these contributed to the strategic growth of this segment. We, at Ramkrishna Forgings, are flexible and we consider ourselves an organization that thrives on challenges. We take advantage of opportunities that come our way, such as expanding our business, improving productivity and making sure our customers are satisfied. We have become an important part of the global market, even though the world economy is a little weak right now. The good news is that things are getting better with time, and we are committed to gaining more customers and getting ready for business growth when the market conditions are improving. We are also increasing our capacity to support this growth. And as a company, we are prepared for the future. Over the past months, we have achieved significant milestones that have further solidified our position in the industry and propelled us towards the greater success. First and foremost, we successfully raised INR 1,000 crores for the QIP, which received an overwhelming response from the prominent domestic and foreign institutional investors. The fundraising marks a significant step in our company's growth, allowing us to reduce debt and advance manufacturing initiatives. The support from the investor reflects their confidence in us reinforcing our commitment to sustainable growth. During this quarter, we successfully secured approval from NCLT Delhi for the acquisition of ACIL Limited. This strategic move, consolidates our foothold in the industry, promising the collective alignment of capabilities and resources further enhancing our manufacturing spend. Furthermore, our aim is to create a sustainable future clean energy initiative. To achieve this, we took steps toward carbon neutrality by investing in renewable energy. We partnered with Prozeal Green Energy to install a 7.82-megawatt solar rooftop power project. We believe in the power of clean energy to drive positive change, and through initiatives like these, we can create a more sustainable future for generations to come. In line with the industry, we have seen an increase in demand as well for our products and services, which has led to significant growth in our revenue and profit. In Q3 FY '24, we reported a revenue of INR 902.9 crores on the stand-alone basis, which represents year-end growth of -- Y-o-Y growth of 20%. While for 9 months FY '23, we recorded revenue of INR 2,603 crores. And for the 9 months, it is -- sorry, stand-alone 2,603 crores, which again represents 20% year-on-year growth on the 9-month number also. EBITDA margin for Q3 FY '24 stands at 22.98% as compared to 22.1% in Q3 FY '23. The EBITDA margin expanded almost by 90 basis points. And our overall EBITDA margin for 9 months FY '24 stands at 22.80% against 22.2% in 9 months FY '23. And the total expansion was almost 60 basis points in 9-month period. And we are confident of sustaining the margin of approx 23%-plus in the coming quarters. Our net profit after tax was is INR 82.3 crores for FY -- Q3 FY '24 against INR 57.6 crores in Q3 FY '23, which is a year-on-year growth of 43%. Our net profit after tax is INR 238.8 crores for 9 months FY '24 compared to INR 168.8 crores for 9 months FY '23, which is again a year-on-year growth of 41%. The strong performance is a reflection of diligence and commitment of our team as well as the continued support of our customers and stakeholders. We remain committed to innovation, operational excellence and customer satisfaction. We will continue to invest in advanced technology, enhance our manufacturing capabilities and strengthen our relationship across the industry. With the foundation we have built and the achievements we have accomplished, I am confident that we will continue to excel and thrive in this dynamic and competitive market. Thank you for your continued support and for joining us today. We will now take questions from the audience. Thanks.

[Operator Instructions] The first question is from the line of Raghunandhan N. L. from Nuvama Institutional Equities.

Congratulations, sir, on stellar results and successful completion of QIP. Sir, my first question was on the domestic revenue. There is a growth of 32% and underlying domestic MHCV production has grown by 9%. The beat versus the underlying industry, what has led to this? Is it execution of new orders in auto? And which segments in non-auto has done well?

I think in terms of the overall domestic business growth, our railway has grown. If you see the presentation, railway has grown. Our revenue in the railways has in this quarter been much better than the earlier years -- earlier quarters. And also off-highway, domestically has done extremely well. And in automotive segment, we have gained market share as well as we have gained new businesses and new components within the content. So all together, it has led to the growth in the domestic segment.

Got it, sir. And in the presentation, when you are explaining about the non-auto segments, there is one portion, Others, which has also seen a big growth. Within Others, what are included, sir?

In Others, steel, cement then your -- this coal washery segment, all these industrial products basically are in Others.

Got it, sir. And sir, going forward, will there be any temporary issues for dispatches? Or will there be an increase in logistics cost due to the Red Sea issues? And also relating to that, this logistics cost would be a pass-through for you? And how much would be the like?

No. I think right now, Raghu, we are still working on it. In logistics cost, most of the costs related to our Europe dispatches have been impacted. For U.S. dispatches, we have not been much impacted. We are still speaking to the customers. In terms of our agreement with the customer, we don't have any such pass-through system of increase or decrease in the logistics cost. But while during the first phase of Ukraine war also when there was a considerable increase in debt cost, our customers cooperated and had shared the cost. We are similarly working with the customers to share the increase. And I think we will have a positive outcome, but it may take a month or so before we have any answer.

Got it, sir. And in terms of FY '24 and '25, Lalit, sir, can you give some guidance on the investments and CapEx?

I think, Raghu, in our presentation, we have already guided for a considerable increase in our forging capacity. We have announced setting up over 8,000-ton press in FY '25, which will be operational by December '24. And basically, overall budget in terms of CapEx is yet to be finished, but it will be in line with what we are doing in this current year -- current financial year of close to around INR 400 crores to INR 450 crores in the coming year also.

So Raghu, that will take care of investment and CapEx altogether should be in the INR 400 crores to INR 450 crores region for that FY '25.

We are not speaking anything related to stand-alone as of now. At a consol level, we will be spending close to INR 400 crores, INR 450 crores in terms of our CapEx.

Got it. And sir, my last question on new acquisitions, MultiTech, JMT, ACIL, can you provide some detail on current revenue profitability? And also any order wins here, which provides better visibility for future?

I think in Multitech Auto, we have already provided in our presentation. We have got full quarter of revenue of INR 92 crores almost from Multitech Auto. And already, it has seen a 200 basis points EBITDA jump since we acquired. I think previously, MAPL, Multitech Auto had an EBITDA of around 14% and we have already had a much EBITDA efficiency and almost 16% of EBITDA. And we are aiming to improve the capacity from current 24,000 tons to 70,000 tons by the financial year-end of FY '25. And we are looking at almost INR 600 crores to INR 650 crores revenue from Multitech Auto in the coming year. But around 18% EBITDA -- we are aspiring to achieve 18% EBITDA from our casting business. Regarding JMT Auto also, we have given a complete line. I think this quarter, we will have more revenues from JMT Auto. And first quarter onwards, we have given a guideline by when we are starting the forging and other things in JMT Auto post refurbishment. And we aim to have INR 400 crores to INR 500 crores revenue from JMT Auto by FY '26. ACIL acquisition has been completed in the month of January this year only, and I think it currently has a revenue of close to around INR 4.5 crores to INR 5 crores on a monthly run rate, means INR 15 crores per quarter. I think customers are intact as well as the plant is up and running. So we are going in for an extensive refurbishment on the plant. So we are hoping that next year, in FY '25, we should do good revenue with good EBITDA from ACIL. I think we will be able to better explain ACIL revenue in the concall, which have post the full year results.

We will move on to the next question. That is from the line of Mumuksh Mandlesha from Anand Rathi.

A good set of results, sir. Sir, in Q3, the export growth has slowed down to 4% Y-o-Y. What has led to the slow growth? And how do you see the outlook ahead?

Sir, Y-on-Y, we have grown in export by 4.1%. Here, basically, quarter-on-quarter, there is a decline. But Y-o-Y, I think we have grown by 4.1% in exports.

Yes. So compared to previous quarter, growth has come down. Just want to understand what...

See, that is a phenomena every year. I think third quarter, because of the Christmas holidays and other things, the inventories at most of our exports in Europe and U.S., there is lesser consumption. And we are back on track in this quarter onwards. So basically, if you see every year, fourth quarter and the first 2 quarters of the financial year grew extremely well. Third quarter is almost every time flattish or there is a degrowth quarter-over-quarter basis.

Right, right. Got it, sir. Sir, on this new press of 8,000 tons and also some small presses, just want to understand the capacity's significant increase of around 40,000 metric tons. So can you indicate what kind of small presses are there, sir?

Basically, we are installing 4,000-ton press and 2 small presses in warm and hot forging. So 8,000 press itself will give us close to around 32,000 tons of volume.

Okay. And what kind of revenue potential from this capacity would be there?

If you see -- go by the average realization also of INR 2 lakh, 40,000 tons at 80% utilization also can give us close to INR 600 crores of revenue.

The next question is from the line of Vishal from Swan Investments.

Congratulations on great set of numbers. Sir, I have one question regarding what is the outlook we are seeing in terms of both domestic market as well as exports in the near term as well as for FY '25 period?

I think the environment is challenging. But in terms of customer and content gains, at RKFL, we are doing extremely well and we continue to thrive on our potential and new order wins and converting this order wins into new supply, then I think the guidance, which we started with -- in the first quarter of financial year FY '24, I think we are well on track to achieve our numbers or surpass those numbers.

Okay. On the volume terms, we'll be able to surpass these numbers in FY '25?

I think right now, we are still to complete FY '24. I think once we complete FY '24, then only we'll give guidance for FY '25. But we don't see any downtick in terms of our utilization, our overall sentiments in the market. We see that market is going to remain strong and resistant, and we will continue to excel on the capacity which we are implementing.

Okay. Great, sir. Sir, my second question is regarding -- thanks for sharing inputs on JMT Auto. Sir, wanted to have some inputs on what would be the margin trajectory and what is our aim to take this margin in next 1 or 2 years for JMT Auto?

JMT Auto, I think in this year, we cannot predict the margin because the capacity is still going to get started and we hope to achieve only INR 150 crores to INR 200 crores of revenue from that. But by FY '26, when we are starting getting INR 400-plus revenue from that, we are looking at almost 25% margin from that.

The next question is from the line of Mitul Shah from DAM Capital.

Sir, congratulations on strong performance. Sir, my first question is on this outperformance, follow-up to previous question of Raghu. Despite production slowdown in MHCV, more than 20% outperformance we achieved. So do you think that this type of outperformance will continue? And any specific this quarter-wise onetime impact in this quarter or sustainable 20%, 25% outperformance possible for next 2, 3 quarters?

Thank you, Mitul, for this question. I think at RKFL, we are in for a long run, and we continue to outperform the market. And I think we are looking at a long-term sustained growth rather than onetime growth. So whatever our figures are or whatever growth we have, you are saying it will be a steady and stable and sustainable growth.

This healthy double digit will continue even if industry may go some -- undergo some slowdown in FY '25?

As far as we are concerned, we don't see any slowdown in our RKFL.

Sir, second question is on this 25,000 tons warm forging/cold forging. So how the ramp-up can we expect? It will be like a full ramp-up by second half '25 or it will be relatively slow and '26, we'll see full capacity utilization because we already have some preorder for this specific capacity, right?

We already have a full order on this. But in terms of sample making and sample dispatches and sample approval, you will see full utilization of this entire capacity from fourth quarter of financial year FY '26 -- '25. And -- but you will see considerable utilization starting third quarter. And fourth quarter should show you most -- almost 90%-plus utilization.

Sir, lastly on this ring rolling. In our presentation, we have given almost 150% utilization for this 24,000 installed capacity. So to what extent this utilization can further increase or this is the optimum? And despite every time it's coming 130%, 140% type of utilization, we are not increasing any capacity here. So any specific reason behind that?

So increase in any capacity in terms of rolling because we are almost at peak market share and as well as we are able to utilize -- get premium from the customer on these parts. But we are working on a lot of VA/VE activity in terms of reengineering the entire line. And very soon, with the point of automation or other things we are doing in this line, our capacity in this line will go up to 30,000 tons, which will basically bring down the utilization of 148% to 110% or 115%. But we are not in any way increasing the capacity or adding any further equipments for ring rolling or spending any large CapEx in building up capacity for equipment.

Sir, just follow up that -- with 30,000 capacity, what could be the maximum output possible or what can be the 150% type of utilization is possible in case of huge demand?

No. I think utilization level 148%, what you are seeing, will come -- drop to 110% or 115%. But overall, I don't think we will be able to go anything above 30,000 plus.

35,000, Mitul.

Maximum 35,000 tons is what -- right now, what we are achieving. That is only what we will be achieving...

The next question is from the line of Jaimin Desai from Emkay Global Financial Services.

Yes. Sir, you alluded to a tough external environment. Can you please give some more color around this? Where exactly the softness that you're seeing? I understand that we have very good -- strong growth drivers for our own business because of order wins, et cetera. But just with relation to the environment, where exactly the softness that you're seeing?

No, we are not seeing any softness related to our business. So in external environment, I think this war and this disruption due to this Red Sea and all other things are an ongoing affair. Right now since last 1.5 years, we are bearing the brunt of it, first Ukraine war and then now this Red Sea disruption. But I think in terms of softness, we don't see any softness. While market may not grow, but we don't see any softness in them with the kind of order wins we have had in the pipeline, which we have right now for new order wins to come in the next couple of quarters. We don't foresee any slowdown in terms of our offtake or our growth plans getting hit by any external environment as such.

Okay. So just -- so even in the case of, let's say, North America Class 8 truck market, you do not expect any growth challenges in next year or maybe beyond that for the market itself?

Slowdowns since last 1 year, but in terms of my balance sheet or my dispatches or my customers, we have not seen any effect in terms of our calls for our new dispatches. So we will not be able to exactly per se say what is happening in the Class 8 market. But overall, we see no slowdown in terms of demand. I think the market is pretty stable, and we are doing extremely well with the kind of new content and new order wins we have in our pipeline.

The next question is from the line of Chirag Shah from White Pine.

Congratulation for a good set of numbers, sir. Sir, first question is just a simplification, if you can help us. So from, say, current revenue that we have, and I'm just annualizing the 9-month number. If I had to take a 2-year view, what is exactly the capacity or revenue capability that we have on stand-alone as well as at consolidated level? Either in terms of revenue or in terms of the tonnage, however you would like to highlight. If you can first help us understand stand-alone, because there are too many projects, which are coming. Some are coming in stand-alone, some are coming in consolidated. If you can help us broader view, it will be helpful, sir.

Chirag, I think it is very difficult for me to put any number to what future guidance is. We'll be more upfront post the full year results. But we can very confidently tell you we are looking at 15% to 20% volume growth in our overall balance sheet. Overall business is concerned, we are looking at 15% to 20% volume growth.

Yes. And would it be right to assume that this 15%, 20% volume growth would be more driven by subsidiaries, given the ramp-up that you are looking at over there, given -- I'm putting JMT, ACIL, everything over there.

No, I think every balance sheet has its own potential to grow. And they all are 100% subsidiaries of RKFL. Overall, at a consolidated level, 15% to 20% volume growth, which stand-alone RKFL will also deliver and in terms of other balance sheets also will deliver. So overall, at the consol level also, we are looking at almost 15% to 20% growth in the current base. That's the guidance we are -- we started with -- in April '24, FY '24 and we still maintain that guidance. And I think any revision in terms of guidance upwards or -- we'll be able to come up with more certain answer post the full year results.

Yes. And sir, if possible, at the end of the year, just the capacity ramp-up -- in terms of production capacity ramp-up, if you can enter, it would be helpful because your capacity seems to be growing at a reasonable fast pace. So you are much -- you are ready for a 50% kind of a growth over next 2 years once this program -- the CapEx program are done over next 12 months, bare minimum. So that's why I'm asking what is the percentage capacity ramp-up. If you can explain it later on, it would be -- it would also be fine at the end of the year.

Chirag, if you go by the presentation, each and every company's potential and the revenue potential and by when we expect things to happen, I think, company-wise, we have very clearly mentioned in the presentation. However, we take your suggestion and I think we will try to more be certain with what would be helpful.

Yes. And sir, second question was on JMT. So you -- from, say, INR 200-odd crores this year, when I said this year, next year, at INR 250 crores to INR 600 crores revenue indication that you had, it implies that there are approvals in place, the capability once you have put the CapEx in JMT, it's more about delivery rather than getting customer approvals. Is it the right way to look at it?

I think, Chirag, we are already in with the CapEx in JMT 3 had passed and another 3 months to go. I think first from mid-April, I think, FY '25, we will start production in a phased manner in JMT. And that's the reason we have indicated about INR 200 crores of revenue this year. And potential of this plant is to reach to anything between INR 500 crores to INR 600 crores of revenue.

Okay. Fair point. It's more about potential. Fair point. This is helpful. This is helpful.

We have customers in place. In terms of approval, we need to go for reapproval, which we have already started and we are already in discussion with the customers.

The next question is from the line of Abhishek Jain from Dolat Capital.

Sir, my question is regarding that railway business. So what kind of the revenue you are projecting in FY '26 or FY '27 from this business? And what would be the EBITDA margin from this business?

Which railway business? Actually in India, there are a couple of -- you want to know about any particular business or railway as a whole?

Railway wheels.

Railway wheels, I think, is still very early for us to tell you. I think the plant is going to -- if you see the presentation, only by FY '26 then the plant is going to get commissioned and started. So I think it's too early for us to tell you what is the potential revenue and EBITDA from that plant right now.

So what is your target ROCE for that business?

ROCE, we are looking at 4.5 to 5.

In initial year. In initial year, right?

Yes.

Okay. And my next question is related with this carbon emission norm that is going to implement in U.K. and other European countries from 2024. Hello?

That is only for few sectors. For forging and other things, which is 2027.

Okay. So there won't be any impact of this in 2024 related with the sourcing of raw materials or anything else?

Nothing. I think it is related to only steel. And for forging and other things, it is 2027 January and we are getting prepared for that.

[Operator Instructions] The next question is from the line of Jaimin Desai from Emkay Global Financial Services.

Yes. Sir, can you throw some color on the growth opportunities in non-auto side. For example, in railways apart from the wheel project and in areas like oil and gas?

I think in railways, we are looking at almost doubling our revenues in next 2 years. From where we are right now, every year, we will be almost doubling our revenue from railways. And I think we -- railway with the kind of modernization, which is happening in India, I think sky is the limit and it is up to us how much we can encash this opportunity in delivering right parts to the railways and finding right opportunities within this modernization. So we are working very diligently with railways and we are trying to encash this opportunity. And right now, putting a number specific in terms of growth, it is very incorrect. But I can only tell you that the way things are shaping up and way the demand is shaping up, doubling our sales to railways is a very small thing, which we are talking about. I think opportunities are much more in terms of how we are able to deliver and encash the opportunity.

Understood. And in oil and gas?

Oil and gas also, yes, it is steady business for us. I think right now, we don't see any exponential growth in oil and gas. But it is a steady business wherein we have been able to continue our steady operations. With JMT coming in, with the businesses with what JMT was doing in oil and gas, I think that place wherein we are going to grow very fast. And that is going to be an additional revenue in oil and gas from North American customer with JMT earlier was doing close to -- that was INR 100 crore-plus business, which JMT was doing. I think we are getting that customer back very soon. And that oil and gas business from JMT will be a big business, which will be consolidated in the balance sheet of RKFL.

Okay. And from a margin and return ratio point of view, non-auto segment would be comparable to autos?

I think non-auto is obviously a better margin gain. And as our non-auto businesses continue to improve and in terms of percentage to our sales, our profitability should grow.

The next question is from the line of Vidrum Mehta from ASK Investment Managers.

Sir, post the QIP money, what would be your current gross and net debt?

So I assume they become INR 593 crores is the net debt. And by March, it will be less than INR 500 crores.

Okay, okay. Sir, secondly, of the 20% growth -- top line growth on the stand-alone business, which we clocked for Q3. Could you help us in terms of understanding the bifurcation with respect to pure volume-driven growth or from new products or from market share gains from the existing customers? Like can you bifurcate that 20%?

It is very difficult to say what market share came from what customer or whom. But in terms of new components, I think almost growth of 5% to 6% has come from new businesses, which we have won in domestic industry in terms of our content. And exports have been steady exports -- I think if you see year-on-year, 4.1% we have grown in terms of exports. And that also is largely driven by new customers wherein our supply has started in this quarter. And in this quarter, you will see further gains coming in with this pace. And I think overall, in terms of market share gain, it is very difficult to tell from whom we have gained market share. But we are continuously working with customers to get into new product lines and new contents. And -- both in domestic and in export. And in domestic industry, things turn around very fast because of our local presence as well as our foothold into and the relationship, which we enjoy with the customers.

Right. Sir, so would it be safe to assume that roughly 5% to 6% is the new business growth, which we achieve on an annualized basis? And new order wins also helps us in terms of booking the revenue apart from the organic MHCV growth, which the industry clocks?

No. I think the industry growth, I think, is very difficult to say how. We grow against the industry growth. But in terms of existing components, we have been able to gain market share. New component, which I said 6%, is absolutely new. Like for MHCV, we have started manufacturing suspension components. So these are the sectors, which we are entering new in terms of forging. So this is the 6%, which we are getting. So obviously, the existing components we have been able to increase our portfolio with the customers. Also, the new content, which we have been able to create in terms of forging, that is helping us in terms of our overall gain in terms of the overall, if you see, 30-plus percent MHCV growth. That is the reason we have got.

Okay. Sir, secondly, on the domestic MHCV front, like we keep on hearing that after 2 or 3 years of good MHCV growth in the domestic business, expectation is that for '25 or probably we could see a flattish to mid-single-digit growth for MHCV. But in terms of average tonnage, it is going to go up. So number of MHCV sold could be flattish. But in terms of tonnage-wise, the carrying capacity could be higher. Given that situation, would our tonnage be better in terms of growth for '25? Should we look at absolute MHCV number? Or should we look at tonnages or -- influencing the growth?

I think the best way to look at it is the tonnage growth. And I have been always telling that number of -- it's the way -- right now the rate is moving around in India is the kind of vehicles, which have been built, multi-axle and high-tonnage vehicles will be sold to more and more tonnage. So given this number...

Sorry. Sir, we can't hear your voice.

Hello?

Yes. Yes. It's better.

So I think with the overall -- what we feel that overall tonnage growth is going to be the way forward to look at the growth in MHCV industry. And if the tonnage grows, we will continue to grow because the number of -- requirement of number of axles will increase with the high tonnage vehicle.

Okay, okay. And sir, lastly, on the restructuring part wherein we are doing some -- we are going to acquire a land of Mal Metalliks Pvt. Ltd., which is a step-down subsidiary. And we intend to commence a trailer axle assembly over there, which will help us in terms of getting some operational efficiencies. Could you throw some color on that, on the qualitative as well as on the quantitative front, how much benefit could we get out of that?

These are all 100% subsidiaries and we are going for large-scale restructuring. I think in February, you will hear much more in terms of restructuring. We will not be maintaining so many subsidiaries like ACIL, JMT, Multitech, Mal Metalliks. So this is only the first phase of consolidation, which is happening. But the overall consolidation in terms of ACIL getting merged in RKFL or JMT getting merged in other subsidies, we will only be carrying two 100% subsidiary of RKFL, which is going to be the casting business. And rest all the businesses are going to get merged in RKFL very soon. So we -- so this is first part of restructuring, which we have done. I think overall restructuring, you will be able to hear by end of February in which only we have one subsidiary of RKFL that is the casting division.

Okay. Okay. Sir, can you share the breakup in terms of revenue from the subsidiaries for this quarter? Like stand-alone, we already know. And consolidated, we have the number. The difference would be from the subsidiaries. So subsidiary-wise revenue if you could share?

I think Multitech Auto is close to around INR 92 crores. And then we have LLC around -- RKFL LLC around INR 29 crores. And Globe is around INR 60 crores.

What happens that RKFL LLC range, the good things supplied from RKFL India, so a lot of it got eliminated. So overall number will get eliminated by INR 25 crores to INR 30 crores in that consolidation. So that is why the number, whatever you add up, it will come at INR 1,087 crores, but actually it's INR 1,057 crores.

At the consolidation level, LLC numbers basically are getting knocked up because of IndAS. So basically, INR 1,050 crores, you are seeing around INR 29 crores getting knocked off, which remains as inventory in LLC.

[Operator Instructions] The next question is from the line of Mitul Shah from DAM Capital.

Sir, my question is on as we almost completed all these 3 acquisitions and majority of the payment is done, so what would be the investment amount for this FY '24? And at the same time, on CapEx also, we have done majority of CapEx, also capacity expansion in this year. So what would be CapEx for this year? And next year, would be purely maintenance CapEx or anything meaningful apart from that?

Mitul, I think, overall, I think CapEx this year should be approximately around INR 450 crores to INR 460 crores in FY '24. And in FY '25 also, if you see our presentation, we are setting up a capacity for 8,000-ton press. Also, we will require maintenance CapEx, both in ACIL and JMT on an ongoing basis, and the casting capacity, which we have freshly augmented. So overall, we are looking at similar CapEx from free cash flow of around INR 400 crores in next year also. I think we will be able to give you some exact numbers once -- I think, on the full year results, once we finalize our entire budget in terms of overall cash flow what we are having and what is the CapEx spend out of that free cash flow.

Sir, just a clarification, this INR 450 crores, INR 460 crores this year is including investment, right?

No, no. So the INR 450 crores is on the only CapEx investment. This year is separate because you can understand INR 200 crores already we paid for Multitech, INR 125 crores for JMT and there is an investment in the rail wheel project to the extent of INR 70 crores, INR 75 crores. So INR 400 crore already in terms of investment without ACIL, I think we have done this year and another INR 450 crores in terms of CapEx. So altogether, it is INR 850 crore this year. From next year, it will become INR 400 crores to INR 450 crores for the CapEx and investment together.

The next question is from the line of Sagar Sahu from Jefferies.

I just wanted more information on what is happening on the electric vehicles front. I understand that you were looking to develop some electric vehicle-specific components like e-axle and you had also invested in an electric vehicle component start-up. So any more information that you can give us on that front?

So I think we are doing almost 3% to 3.5% of our revenue from EV, which we are supplying to overseas customers. But basically, they are undercarriage components and developing our own motor controller and e-axle with transmission, this is R&D, which is ongoing. I think motor and controller company we have acquired, that is TSUYO, which is a start-up company and we are already working on in terms of our own transmission and e-axle. I think in next 3 to 6 months' time, I think you will hear more about it in terms of -- right now, it's all on trial stage, vehicle trial stage. So we don't have a concrete answer in terms of the size we can achieve, in terms of market cap -- with market size we can achieve in this. So once we have the trial then other things through from the vehicle, then we will be able to give you more color into it. But our aim is in next 2 to 3 years to develop the entire motor controller e-axle, along with the transmission and as a kit supply to the 3-wheeler and 4-wheeler market.

The next question is from the line of Darshika Khemka from AV Fincorp.

So sir, as far as I understand, our margin expansion in FY '22 and '23 was a combination of 2 factors: one being the operational things that the company has done and also the tailwinds from the industry. Would you be able to bifurcate and sort of help us breakdown that how much has come from tailwinds and how much from company-related efforts and how much of that basically would be sustainable? What I want to understand is that once this industry tailwind goes away, would our margins fall?

I think in terms of margin, I cannot give you anything related to what is tailwind and what is, but if you see constantly for 16 quarters, we have been maintaining a margin of 22% and above. And I think very slowly but steadily we are working towards our goal of 25% margin. And that's the way we are developing our own components or the utilization of our plants are being worked out accordingly. I don't see any headwinds to our margin trajectory while we do not say what is a tailwind which can happen to it, but I can very safely say that we aspire to be a 25%-plus EBITDA margin-making company while we will be able to safely maintain the current margin trajectory going forward.

And I had one more question. What was the CapEx that we've incurred for the warm forging expansion?

So warm forging, we have already capacity of 10,000 tons. Right now, what we are putting up a small capacity of around 3,000 tons on the warm forging. And the CapEx has already been completed. I think we are going to commence the line very shortly.

Okay. Can you help me with the CapEx number on that?

I don't have right now the specific number on that line. So we clarify that offline.

The next question is from the line of Rakesh from Bhana Equity Advisors LLP.

Can we know our current order book?

So we don't have any order book. We work to schedules. And I think we -- from our export customers, we get 6 months forward schedule. And from domestic customer, we get 2 months forward schedule. And we work to schedules only, and we do not have a particular order book. We have only order book related to our railways, which is close to around INR 250-odd crores right now from railways. Other than that, we do not have any firm order book from automotive sector or off highway. We work to only schedules we receive from customers.

Ladies and gentlemen, that was the last question. I now hand the conference over to Mr. Rajesh Mundhra for closing comments.

Thank you. I take this opportunity to thank everyone for joining the call. I hope we have been able to answer and address all your queries. For any further information, kindly get in touch with us or our investor relationship advisers. Thank you very much.

Thank you, members of the management team. Ladies and gentlemen, on behalf of Emkay Global Financial Services, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.