SKP Bearing Industries Limited ($SKP)

Ladies and gentlemen, on behalf of Kaptify Consulting Investor Relations team, I welcome you all to the Q4 H2 and FY '26 Post Earnings Conference Call of SKP Bearing Industries Limited. Today on the call from the management, we have with us Mr. Shrinand Palshikar, Chairman and Managing Director, along with his management team. 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 recorded. I would now request the management team to briefly run us through the investor presentation for the period ended March 2026, the growth perspective and vision for the coming year, post which we will open the floor for Q&A. Over to the management team.

Firstly hello, good evening. I'm Shripada Patil, CFO at SKP Industries. I welcome you all for the quarter 4 and yearly earnings call. Some of the key highlights of the past year. We can see the revenue from operations has increased by almost 99% from year-to-year half yearly comparison. EBITDA by 30%, PAT by 41% and consolidated revenue by approximately 82%. For financial year comparison, we can see that revenue from operations has increased approximately 53%, EBITDA 11%, PAT 15% and revenue from operations consolidated 46%. A few highlights for the plant roller. We were approximately 110 tonnes per month with a utilization of 90%. Now since the ball plant has shifted, we have space for expansion at which expansion activities have already started and some of them have already started in production. Also simultaneously stabilization and debottlenecking of other operations is ongoing. Our strategy is emphasizing on high-quality products for import substitution as well as some low-hanging fruits where attractive margins and product -- better product lines and new opportunities are available. We have balanced out our portfolio so that we are diversified across automotive, bearings, industrial and other sectors. And we are expecting to ramp up our production line along with the new capacity additions. For the 3 last year, we commissioned our new facility of 2,000 metric tons per annum, and that has slowly increased in utilization. As compared to last year, we are in a better position this year with plants who have started as well as production, which has increased. We have a good market opportunity available in view of the advanced stages of BIS and QCO implementation. We see a positive market situation ahead. We have achieved certification, and we are now eligible for other certifications as well. Our strategy in France is also playing out well where premium customers have rejoined us, and we have a positive order visibility for the coming financial year as well as the key strategies which were planned for cost improvization and improvement, that is also playing out well. I've already shown the highlights, I will not detail this further. A brief on the capacity. As I have already explained earlier, with the space at the roller plant available, we have started expansion activity. So in the last Q4, our capacity is approximately 1,700 per annum, which only installed last quarter 4 and of which 78% is utilized. So we can see the utilization ahead. Similarly, for ball plant as compared to last year from 240, we have increased to 340 utilization. But there we have a 2,000 tonne capacity added -- metric ton capacity added. Geographical revenue and industrial revenue contribution for the stand-alone. Even though we see that FY '26 is only 4% of the revenue as compared to 5% last year, it is still better because our absolute revenue has increased. So overall, the export value has increased. Even in our industrial contribution, we can see that our portfolio is very well diversified between commercial, 2-wheelers, aftermarket, automotive and other sectors. A brief about us for those who are new to our company. SKP was founded in the year 1991. We started with needle roller and then expanded into other product lines. We have cutting-edge technology and advanced testing equipment in-house, and we have a wide range of products under a single manufacturing roof, and we are renowned for being the global source for global customer. A brief on our journey, we started in '91 in our plant as a partnership form. Then we expanded into cylindricals in 2004. 2006, we started our renewable energy initiative, which gave good yields because of which we increased that sector further. In 2011, our founder was awarded the National Award for Outstanding Entrepreneurs of India. In 2018, we acquired existing -- and then in 2020, we further expanded this. In 2022, we became a listed company on NSE SME. In 2024, we acquired a 95-year-old French plant Industries. In 2005 (sic) [ 2025 ], we are further expanding the existing verticals into new plants. Our Board of Directors, Mr. Shrinand Palshikar, he specializes in production and manufacturing and he's a master in this field with knowledge of over 35 years experience. Mrs. Sangeeta Palshikar, Founder and Non-Executive Director. She's experienced on the financial side and the Presidential Award winner. Mr. Rajiv Lokre, Non-Executive Independent Director from the technical side, and he's been on the Boards of many companies. And Mr. Gautam Ganguly is a new addition to our Board of Director. He is the Independent Director, Chartered Accountant and Company Secretary with over 50 years of experience. Plant 1, which -- from where we started, which is now into research and development and machine building. Plant 2, specifically for needle cylindricals and special products, plant 3, which was commissioned last year, specifically for ball manufacturing. This is our French plant where we have a different range altogether. Products, needle rollers, which find into applications into automotive bearings. Cylindricals, which also find their application into gearboxes. Bearings, for gearboxes, bearings, defense applications, and many more balls, there again, we have a variety of balls with miniature, catalyzed, glass, plastic, which find the application in not just cycles or steering applications, but as well as in cosmetic, pharma, it opens the entire new market to us. While industry application, you can see our products go into luxury watches as well as industrial machinery, EVs, 2-wheelers, commercials, wind turbine, pharma, aerospace as well as precision parts. With the acquisition of France, we have a better position to supply to a global market. So on the screen, we are showing you the strength of both the plants. So in India, we have a scalable manufacturing capacity as well as and dollars both and renewable energy integration, which is a big requirement for global supply. And also in view of the latest technology, we have involved AI in our production processes as well. For France, we have a European market footprint over there. We become a dual source for global OEMs to supply from France as well as India in times of such turbulent market situations. We are specialized in stainless products over there, and we have better access and faster access to OEMs. Some of the photos of our inspection lab. Our strategy for profitable growth, we plan by new products, new customers, operational efficiency and new technologies. Some of the key strengths is like we are integrated suppliers. So you don't find so many products under a single roof, and back to our global OEMs. So global customers who are into multiple continents and multiple countries, the SKP has a stable source as they have only one vendor to add, which can cater to that entire global demand. And that is the strategy which we are playing out for both our plants as well as technology exchange and research exchange and knowledge exchange. Market overview. We are seeing a good market traction for the industry, in that industry. Our green initiatives. The way forward. Now for the coming years, we are planning on optimizing the existing plant. The capacity is added and the utilization is increasing. For France as well, we see a major 2-year milestone, which is completed, and we are seeing a good organic growth over there with customer base expanding. Solar capacity is also increasing as well as the utilization is similarly increasing because we have order visibility. Our strategy for growing the export is playing out well, and we are seeing the results in our -- this year's financial as well as in the coming years, we are looking forward to it. And with -- in view of our global strategy, we are taking on key global customers as well. And our revenue target for FY '29 is for India entity stand-alone, to become INR 100 crores. With this, I would like to close my presentation, and I would like to hand over to Vanessa to please.

Thank you, Shripada. Yes, go ahead, please.

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

So the purchase of traded goods have gone up from less than INR 1 crores to around INR 10 crores in Q4. So I would like to understand what kind of traded goods are these? Are we entering into some trading business? Can you like give in detail what this is?

I would like to -- there are 3 things actually, which are interning because these questions will be having effect on 3 elements which I would like to clarify in one shot. This is one type of -- we were already dealing in this particular product line. Now we have a global opportunity because of our global presence. And we have this particular opportunity, which has come up very recently, and we were working on this particular opportunity to encash, so we can get a global footprint. So it's a major related to the exports, number one. Number two, this is major, we were already handling this particular business, but to a very small extent. Now we got opportunity, we expanded. So we have more credit lines for this particular thing. So our -- you must have seen -- this quantum has gone up, number one. It has got an effect on receivables. So the receivables also have gone up. Now this activity has come all of a sudden, very quickly because this is interlinked with our global customers and their needs. So we have to give them a basket as an offering. So when this has come as an offering. So what -- so it has gone up, our receivables have increased. All of a sudden, this business has come, so we have to inject. So the loans have increased, unsecured loans from directors and this particular amount has increased. I hope I answered your question.

I understand about this opportunity of some trade, but what are the state goods, what business? Is it the same...

Mostly it is relative to our product line only. So some other input raw materials input things, which is available like we are already doing it. So it is they wanted a basket, so they want a product along with this. So our same line of product.

So we are not producing these goods. So that's why we are purchasing -- procuring it for our clients basically.

Correct. Correct. We are already producing it. We are already producing it. We are doing some valuations, but we put better because this is like a very small contribution of manufacturing. So we prefer to put it in a traded goods.

Got it. So I mean, what kind of margin profile would these traded goods have and what like...

This is like a very small minimal margins. This is not a focus. The focus is the main core business.

Got it. So what percentage of revenues this year came from this trading and what about FY '27?

This particular element is going to remain. It will be more or less on the same extent, but I think this is the threshold. This will remain to the same extent because we are doing a lot of other business along with this particular element. So the amount and all this exposure is going to remain like that.

And the margin profile would be lower than our business...

Lower. Yes, of course, lower. This is a high-value basket transaction. So yes.

Okay. Got it. So for a stand-alone margins, they collapsed 23% in Q4. So can you help me understand what were the main reasons for this?

Can you just -- how do you calculate?

EBITDA margins. So standalone EBITDA margins in Q1...

Standalone.

Yes. In September quarter, they were 40%, in December quarter, they were 31%. But they have fallen to about 23% EBITDA margins for stand-alone business. So what is the reason for this fall in EBITDA margins, fall in EBITDA?

One of the main reasons, which I am aware that is the reason is because of the new labor code. This particular thing, which is there are many provisions we have to make for gratuity, Provident firm, the salary liabilities, many things. So which is to be provided even for the leave, we convert it to the amount and we have to put as a provision. So these -- because of the code -- these provisions as per the auditor's requirement, so these provisions were made. So higher provisions. This is the reason.

Got it. And our French subsidiary, so it made a loss in FY '26. So what is the expectation for FY '27? Do we expect still a loss?

Maybe or may not be. We will be the threshold limit. We are focusing to turn around in the current financial year.

Got it. So I mean, what is stopping the French subsidiary from breaking even? Is it because of lower utilization? Or -- I mean -- or if I pose it differently at what level of revenues will it breakeven, if that's the case?

To be very precise, if we are around EUR 3.6 million, we will be doing breakeven, EUR 3.6 million, EUR 3.7 million, okay? And currently, the loss is because we are still not at breakeven because we have still not received all the customers back, which we were slowly getting. We are adding step-by-step the customers.

Got it. So you think in FY '27, I mean, what is changing? Is that order pipeline stronger, and do we foresee breaking even and doing such kind of revenues in FY '27?

Much better. Those -- I think you have not tracked the company since past, but if you would have tracked it, you would have understood it. We are progressing and progressing in a much better way. And this is also helping India entity. It's just not the French entity because we are getting many global clients because of this particular acquisition.

Got it. So realistically, we can expect the French entity to breakeven and I mean, cross that $3.4 million threshold that you mentioned?

EUR 3.6 million, something like that.

Got it. Sir, my final question would be one-off questions related to the margins itself. If we look at the employee benefit expenses, they have not increased much, but the main cost item is purchase of trade and purchase of stock and trade, which is pulling down, I think the EBITDA margin, if I'm not wrong. So can you like help me understand like still -- I mean, is this trading business component which is pulling down the EBITDA margins? And if so, what...

Not exactly because we don't do any this thing activity with the negative margins, of course, not.

What are the margins in the trading business, if you can quantify?

That I'll have to check exactly to be very precise, but it is positive. It's not negative, of course. And this particular factor that how much the effect of the raw material contribution, this I'll have to look at and give you the exact figures.

The next question is from Varun.

I'm very new to this company and to this space in general. But just going through your numbers, so I saw that at some point, you have given a target of FY '29 INR 100 crores revenue stand-alone. And your current is like FY '26 is INR 80 crores. So in the next 3 years, you are just planning for a 20%, 25% growth. So that seems very low, right?

We could do better, much better?

So I mean, is that a very conservative target? Like --

INR 100 crores, that was for rolling division.

Okay. And Also, sir, I saw that there is this ball plant, which has come up. So at what utilization level does that become EBITDA breakeven?

It's a little break on. There's nothing like breakeven because whatever you are seeing is an overall basket, total consolidation. So nothing like that. So we are already green in that. What we are focusing is better margins and better utilization. So we are focusing on better customers revenues now, more customer to add in our basket in ball division. That is our focus.

Okay. So -- but what -- how much -- in how much time will it reach the consolidated company margins? Any estimate?

The utilization level of say, 80%, 90% of the ball plant. Our target is to reach as early as possible because we have the capacity available. We have the capability, everything is availability. Now with the customers, what we are focusing targeting these customers, they are major importers. I think you will not previously track our things, but then all these customers, what we are focusing are already the importers of steel balls. So our target is very clear, defined. So we have the volume visibility, the customer visibility with many of the customers, our commercials also are settled. Now some customers, the ramp-up has already started. So you must have seen the numbers have changed in a quarter-to-quarter basis, if you must have observed. But our target is to have a quick better utilization, that is taking more time than expected. But yes, we are on the right direction. So there's nothing wrong in the direction, but it is taking more time than anticipated.

Sure, sir. And sir, at some point, I read that companies also presented defense and aerospace applications. So can you tell us like what defense and what aerospace applications you have? And as a percentage of your total revenue, what is that? And is there a different margin in those because usually those products have a very high margin profile. There was the logic of asking this question.

SKP is present in these -- both the sectors since a very long period of time, okay? Defense also a very, very long period of time, maybe more than 2 decades, we are present in this particular sector, okay? The revenue percentage revenue is not that much as to that you can say, okay, you are 4%, 5% or 6%. So it's very small compared to the other sectors. So that is the reason that we have never said that, okay, that we do this particular sector, that sector like that, we don't do. But we are catering to defense sectors. And we are also now in discussion with aerospace companies. So it's -- both the things are already under radar and already in existence. But the portfolio value is so small. Of course, the margins are good because depending on the product -- and there, you have a very clear defined quality requirements, pricing, everything. So margins are good. There is no problem for the margins, but the volumes are not so big as to that you can say, okay, you are catering to this and this.

Sir, may I ask that what application in defense and what application in aerospace like in which division and which part like whether it is going for ISRO or for tanks or what? Can you just give us some more color there?

I'm really not sure as to how much I can disclose on a public platform. But I can give you an idea as to we are into means artillery equipments like that. So we are present in that particular. In aerospace also, we are discussing on the bearings, aerospace application bearings. We are right now being contacted by a major automotive -- sorry, aerospace company who are already into the -- this particular segment. They are been given one of the award. So they have contacted us very recently. So we have a standard product. It's a standard product. What we are already doing it. We already told them, and we are already doing this. So it's same platform. So we are catering to defense in artillery equipment, frontline moment equipment, defense equipment like that. And for the aerospace, we have not asked them for the applications, but we know that it is for aerospace application because we know the customer.

Sir, and just the last question from me. So what is the customer concentration at your company as of now? So what percentage of revenue is coming from the top 5, top 10 customers? And who are the top 3 customers if we can get to know?

Okay. I will not disclose the name of the customer, but I can tell you the revenue percentage. None of our single customers more than 15%. So maximum top 3 or top 5, if you take, none of them are having revenue more than 15%. So between 10% to 12%, 13%, like that, the revenues are there.

But that would imply that the top 5 customers make more than 50% or close to 50% of the revenue.

No, no, no. Yes, maybe 50%, 60%, yes. Top 5, top 7 customers with top 10 customers will contribute something like 65%, 70% like that.

We take the next question from Tania.

My first question is in the solar division, the management of guided expansion from around 120 tonnes per month to 200 tonnes per month. So could you share the current installed capacity utilization levels and also the expected asset turns once the expanded capacity stabilizes?

Shripada, can you answer that?

Yes. As of quarter 2, that is the half year of FY '26, the capacity was at 120, that is 110 tonnes per month. Then with the more space utilization, we had already started expansion activity. So we have just recently added further capacity in Q3 and Q4, which is shown in the slide at 1,700 total. Further up to 200 tonnes per month, that is on the way, which is expected to be completed in this half year, that is FY '27. And regarding the utilization that is already mentioned in the slide, approximately 70%, 78% utilization of total 1,700 is done. But that is, again, it is a staggered approach. So we cannot -- that cannot give a proper clear estimate because installation, commissioning as well as utilization, all these activities are simultaneously on way.

Okay. And what incremental revenue potential do you see from the newly added capacities over the next 2, 3 years? And also, what kind of EBITDA margins should the investor structurally expect from the roller segment versus the legacy ball segment?

I think we can just cross multiply, like currently at INR 1,320 crores whatever revenue we are making, when we do INR 2,400 crore, how much that revenue will be. For the roller business, it will be a similar trend. For the ball business itself will be on a similar trend. The margins will be on that itself. Exact figure I have to calculate and give you.

My next question is that since customer validations for the expanded capacities were reported by completed ahead of schedule. Are they already committed for those or visibility from existing customers to absorb this incremental production?

For roller division?

Yes.

Yes, yes, we are having a visibility for orders.

My last question is what proportion of the upcoming growth would come from existing customers increasing wallet share versus onboarding new customers and geographies?

I think it is a balance out of both because we are having new as well as existing have also increased their share. So it is both ways. Also new customers are global requirements, which is why they are coming with a bigger chunk. So I think we can get a better estimate of these in the coming quarters, quarter 1 and quarter 2, we'll be getting better visibility.

We are focused on growing customers and these global customers come in huge global volumes. So it will be like from India being exported even to China. So that is an opportunity, what we are knocking to, which is an almost impossible task which engineering good being exported from India to China. So that sort of a situation is going to come because these are all global customers.

We will take the next question from Rudraksh.

Sir, first question was on the sales levels for roller plant and ball plant for last year, FY '25.

Sorry, sir, can you repeat the question, we didn't fully understand?

Yes. Revenues from roller plant and ball plant for last year, FY '25.

Segment breakup, you mean?

Yes.

Yes. Okay. segment breakup is given on the second last page. I'll just tell it over here. For the plant segment revenue was 60.84%, plant is 26.04%. And for the France plant is 24.62%. And the profit deferred tax...

No, ma'am. I was asking last year figures. This is FY '26. I'm looking for the figures for FY '25.

'25, okay. I'll have to just check are those figures. I don't have it on hand. Maybe we can take this particular question after some 5, 10 minutes.

No problem. I'll just get on with the next question. So I wanted to get a better understanding on the margins part. I think previous participant also highlighted a few things. Labor code and adjustments we could understand, but a lot of profitability volatility is witnessed on the gross margin level. So if I talk specifically about numbers itself, in India business, if I look at the gross margins for the latest quarter, it is at 37%, which is the lowest we have ever witnessed for the company. And generally, we are above 70% here. So maybe could you help us understand this part?

If you just go to that particular slide, Shripada.

In the presentation, we are not capturing the gross margin, sir?

Okay. So then this particular point, we'll have to analyze and revert back to you.

Okay. Okay. Understood, sir, let me come to the segment figures for ball and roller plant, which we report. So if I look at the revenues from roller plant, it's at INR 53 crores and a profit before tax of INR 10 crores almost. But if I look at the 6-month figures, it was at INR 24 crores and INR 7 crores PBT. So margins have declined from 29% to 19% for the whole year. So could you give us a little bit of clarity on what happened in the second half for the roller plant?

Shripada, can you just answer this particular question from factory side?

Okay. Sir, we are talking about half -- second half of the roller division.

Two half. They are asking for 2 half comparison.

Okay. You want me to display the screen? Sir, now can you please repeat the question?

Roller plant, we did around INR 24 crores. for the first 6 months and INR 7 crore PBT. And if I look at the full year figure, it's INR 53 crores in revenue and INR 10 crores PBT. So we have taken a hit on our profitability in the second half of this year. So maybe you can help us understand that.

No, this is -- actually, we'll have to go deeper into it. It's offline to reply on this because there is -- I can tell you one thing. There is no change in model. There is no change in the profitability ratio. There is no change in nothing -- everything is okay. Finance cost, yes, it may have increased, finance cost, because we have taken unsecured loans all of a sudden. So these finance cost, there may be a change, okay? Labor code related thing, whatever has come, it's onetime expenses because now it will be on the routine basis. So whatever provisions were made, it has to be provided once, so it is already provided. But there is no change in the profitability side from our product, so we are okay with all the factoring. So there is no change in any of the operations side. That's one thing I can tell. But to go deep and to analyze this particular thing, probably you'll have to have one-to-one this particular thing, we can take. Not a problem at all. But it's model, same, no change in model and style and functioning of our products.

Also, besides that, there is one more point. In the first half, we had booked a single depreciation. But then our auditors recommended that considering the operation or utilization of the current plan, we can book double depreciation for. So that is one which has affected. Also, in the second half, we had extra provisions of bonus and gratuity and other which came into a requirement as per the new labor law. So both these again affected in provisions, which came. All these came in the second half itself, bonus, gratuity and all payables. October bonus, even everything this year, ones which have already to be given and ones which are to be given, both.

Understood, ma'am. So if I look at the whole year, not going into like too much details or specific, the data that is available on the slide itself. So at this point of time, we are doing around 19% margins on roller business for a whole year. If we look at the slide, the data is already there. So this 19% margins, ma'am, is that sustainable going forward? Or we should see some expansion or contraction from here?

There's no reason that even these fluctuations -- see no change in model. So it's the same. Little correction is there because of the higher certain cost. So these all our costs are temporary. So nothing like from our management side of you, I can assure you one thing. All our models are very stable. No change in the cell pricing pattern. Our manufacturing cost is already optimized. So there is no change in effect on margins or anything. It could be whatever is there is maybe 1 quarter basis or 2 quarter basis, the effect is there. But it will again bounce back, everything will come back to the original level, what you were seeing maybe 1 year back or something like that.

One another question sir on the ball plant, we are saying for the full year, again, that is something that is available on the slide itself. We are doing around INR 25 crores in revenues and profitability stands at around INR 7 crores, INR 8 crores. So that translates into a much higher margin than the roller business, but our understanding was that ball business is like lower margins than roller. So could you help us understand that.

It could be that because of the traded product is from that particular division, what you do. That is why you see the margin shift. But no change in model, again, I explained to you. No change in model. The segment revenue, what we book, maybe the trading -- the stock in trade or whatever this particular activity is more concentrated from this particular plant. So that is why you see this particular. That's it. But no change in -- ball is lower. It's as it is. Roller is higher. It's as it is. So no changes in that.

Understood, sir. Understood. And sir, for next year, what kind of growth can we expect from the roller plant?

Shripada had answered that particular thing. Now what we are talking of the utilization level. So we have the visibility that we have -- it's not like that we are expanding. So we do not have the visibility. We have the customers. We have the visibility as to what targets we have to reach. But you can understand it's an engineering industry and hardcore engineering. So it requires a lot of effort to bring to the utilization level just not from the customer angle. Customers say, okay, I can place the order for x and okay, you reach to the capacity utilization. But to the ramp up the capacity and to sustain qualitatively, quantitatively, it's not just we are talking of numbers. What we are talking of a very high precision, sustainable precision level engineering product. So it's not -- it's a commodity product. It's a high precision level product. So we have to have a very high sustainability of the product performance. So it takes a little time for the manufacturing point of view, not from the customer's point of view. Customers are very clear visibility, we can do even more utilization levels. Even more capacity even if we had, we can get to more capacity utilization, we have that much of customer demand. There is no problem for demand. We have a good demand, how fast and how -- because it's a lot of technologically processes involved. So it takes a little time of my team to get.

Understood, sir. Understood. Sir, last question on the France entity. You said that we are trying very hard to achieve breakeven this year. You have given some figures also that may be required to get there. But could we at least expect that half of the losses would be reduced for this year, even if we don't achieve the breakeven for whatsoever reason?

See, from a visibility point of view, we have a visibility to reach to this particular level. It's not like that. We do not have the visibility. So there are 2 things. One is the lack of visibility, it's not there. It's -- the visibility is there, that these targets are possible to achieve, okay? Now is the customer, which we are pushing, and we are focusing on the customers which were loss to bring back. We are facing a little delay or little challenge in this particular because when these customers were lost, they lost to someone, maybe European supplier or maybe out of European supplier, maybe a Asian country, India or China or anyone, okay? Now to bring back to a European manufacturing facility, to convince him that the product work is going to get to the European standards with the next quality level, but their expectations is commercial also. So now you need to match these 2 things. We have been successful to match to some of the customers and the volumes have come back. Now slowly, slowly, we are attacking these all customers, trying to convince them. The visibility is there. I see a very positive outlook. There is no problem. Maybe lost, very little loss, but I cannot quantify what would be the loss. I cannot say I will make it to 50% or 25% or maybe turnaround total. But yes, our trend is positive. Yes, focus is very clear. We have to turn around this year. So that's what the target is. One more thing I want to highlight here because many -- many people have asked me these particular questions, and I would like to answer in general to this part. Our turnaround is always a top side and the bottom side, bottom side means when you have a expenditure. So it's just not the top line what we have to expand. It's also the cost we have to control. So we are just not focusing on the top line. Of course, it has to grow something like that. But also you need to control your cost. So we are doing our level best even to control these all costs by high productivity, new engineering designs, new solutions to bring back the cost, bring down the cost. So these all things are also very interesting. And let us see.

We'll take the next question from.

Sir, just on the French entity. So maybe just to understand like you've seen in this year the top line has improved. So -- and you've been talking about the customers who were there with the company prior to the acquisition then going away and now you are slowly sort of letting them back. So maybe if you can share like how many customers there were there in the last financial year, that is FY '25 and how many customers are you serving now in FY '26 just to get some sense?

See, it's not there to be like discuss name of the customers, anything...

No, no, I don't -- yes, just number broadly. Broadly number. I don't want the names as much. I mean just trying to get a sense that, let's say, we were doing x number of customers in the first year of acquisition, in the second year of acquisition is x plus y or whatever.

Okay. We have added multiple customers. I can tell you one thing. And these customers are on top of the line. Top of the line is top of the line. I can give you one name. Of course, I'm not sure, but I can say the top line for this particular -- one of the top most -- can you know who is the top most back to us.

So, we can give these numbers. Like first year of operations, we have so and so customers -- 10 customers, 5 customers in --

we had multiple customers. It's not like that we have 2, 3, 5, 10, maybe more than 10, 15 customers because we have multiple sites globally. So many customers were back from the day -- first day of the operations. But I can tell you one thing, which is not many people are aware of. In 2010, 2011, this unit, this particular company was doing EUR 16 million, how much 1-6, EUR 16 million in one point of time. Before we did acquisitions in 2023, this unit did around EUR 8.5 million. In '22, they were around EUR 8 million. They did '23, EUR 8.5 million. Now you can imagine from around EUR 8 million, we were down to just 25% level, just because change of entity from SG to SKP. Now you can imagine the loss of revenue. We were never expecting this particular such a loss of thing, but many customers say the legal entities change, again, the entire thing. Second legal entity change, we need to have a sustenance. You have to have the credit positive. So many -- customers, so many questions, so many hurdles. Some customers, they understood that a company sold in Europe only when it is making losses. Indian company taking over a European company and now bringing it back to the track. So -- and I'm confident. I'm fully confident that we will get back a majority of these customers. Of course, we are trying to give them a good pricing. We try to give them a good product. We were just in time to them. But yes, so we have a good customer base. We are adding also the same customers also. We are adding -- our SOB is increasing, share of business is increasing. They already told us that if you give us good quality, good quantity, good in time, our share of business will increase. That's what is the achievement.

Sir, in the presentation on the French subsidiary. We have mentioned about customer -- key customers that we've won and there is a potential of about INR 100 crores by FY '30, so can you maybe talk a bit about that? This is like...

There are 2, 3 customers we have been discussing past more than 2 years. The way we acquired, we have been discussing with them our product costing, commercial settlement, some customers are so big, they are something like 100 -- more than 100 plants globally. So they say that, okay, for your sustenance, you need to prove yourself that you be sustainable in Europe, okay? So we are now sustaining. They see we are sustaining. They want a credit positive. Okay. We will turn around, will become credit positive. Then they will come back. It's nothing like that they know us, they see us, their vendors are our customers. For the main customers, which was our customer till 31st of January 2024 before the first day of our acquisition. And now this customer -- big customers, the millions of euros of revenues on a yearly basis. So we are discussing and let us hope. They come back as fast as possible.

I think you mentioned that we have secured them as customers...

Yes, yes. Actually the...

Many, many customers who are secured. Many customers we have secured many customers which were already there, they are increased. The gives a volume start of volume from 20%. We have now gone up to 50%, maybe 60%. So it's both addition of customers, addition of business, both.

Sir, I understand, but I was just asking that this specific customer that we have -- I mean, you've called this out. So I'm sure there must be something that we also feel quite optimistic about. So maybe just on this point is what I wanted to get some clarity.

So basically, it is like sir said, we have on our portfolio customers who are having global, more than 10, 20 plants. So these customers when they have started, they have an order projection for lifetime volumes or for the near 5- to 7-year volumes. So the visibility from which we have shown it.

Okay. So I mean today, we are a INR 100 crore company. You are saying that this alone customer can get us to that size -- I mean, of course, we may not get through that INR 100 crores, but there is a chance that this single customer can be as big as a company. Is that how one should at?

It should be actually brands usually. Brands, and they have multiple entity vendors. So -- that way, yes.

Okay. Got it. And 2 questions. One was, sir, on the ball business. So we have improved our volumes year on your expanded capacity. So where do you see, let's say, end of next financial year, where do you see the utilization in ball business?

Shripada, I can answer. See, currently, the capacity what is available. We have a very clear discussion with the customers as to allocation of this particular percent of capacity to this customer, this percent of capacity to these customers. So we are already having a capacity allocation target new customers. Now these target new customers various stages of processes, some particular samples, approvals, testing, some validations, various stages. That is why we have a slow increase. It's not all of a sudden increase, so slow increase there. So the ramp-up is taking more time than expected. We were expecting when it is all -- meeting all the requirements should be ramp-up should be immediate transition, but it is not taking. They are taking that okay, you we do a step-by-step increase. So this is by this year, we have a 50%, 60% utilization level in current year, maybe better than next year, utilization while next year, we have complete utilization.

So you are expecting 50%, 60% in a good case scenario in ball plant. And this traded in that you talked about in the opening statement. So this is in roller or this is in ball or this is in both?

It's a part of our basket.

Yes. So is it -- is that in the roller business? Or is it in the ball business?

Not exactly both being -- relative to the inputs of raw material.

Okay. So just wanted to understand, is it possible to just broadly quantify how much would that business -- I mean how much was the traded the...

Explained, same quantum. Last year would be around INR 10 crores to INR 12 crores, I think so.

So it will be the same.

Same level because we have a very clear tie-up for that.

Okay. So you're saying that in H2, the volume, the number would have gone up because -- and hence, the margin.

This particular business started in last -- almost last quarter.

It started in the last quarter, you're saying.

But this opportunity came to us in the second half of the year, and then it started materializing in quarter 3 and in quarter 4 overall. So even in the sheet, which we have mentioned, it is again showing that the purchase of stock in trade, if you compare half year to half year it's increasing and also by just pulling down the margin of the standalones.

Yes, ma'am. No, I understood that. I'm just saying that is it -- so essentially from the last year to this year, the last year, this portal was very little. And this year, this has grown from that basis. Is that the right understanding?

See, I would like to again clear -- a very clear view. I would like to give you this particular thing. We are very transparent. We have shown very clearly that even though it's a manufactured good -- but we have shown because we do very little value addition this. So we consider it's not a true manufactured product. So we considered as a traded product. Do you understand? Many people who would have done this way that, okay, you club it to the main revenue. So you will not do it segmentation. SKP, we believe in very clear and transparency to our investors. We have to be very transparent and show okay, as to -- yes, this is the thing, and this is the long term. And this is a low margin, but a higher value quantification and we get a basket. We get something which is overall game to SKP. So we have to show that as a different activity. It would have been shown as a combination of activity, but we do not believe in that particular thing. That is why we have shown very clearly that is why you see a significant increase. That is why you see a significant impact on many fronts, receivable increase, loan increase quantum increase, but we are very transparent and to show that, okay, this is the reason because of that, this is the thing. I hope I'm very clear and very transparent to everyone.

Yes, yes. And this will continue going forward, sir, this line of business.

Yes, because this is a very long term. It's a good business. It's nothing -- it's a very, very good business, please. And it's very simple. I don't know. I mean past 30, 40, 50, 60 years, anytime U.S. dollar or euro has gone up against Indian rupee, means Indian rupee has become stronger. So you again...

Since there are no further questions, sir, would you like to give any closing comments.

I would like to give one clarity about SKP. We have very positive very, very, very positive outlook for future. We are getting good levels of customers. The customers we can never think of our visibility of future expansions seem so clear. And so I think we are adding value-added products to our kitty. So many value-added products will be added. They are in different stages of elevation. So for, revenue for visibility for future business, a very good this thing. For margins, they are sustained. There's no change, onetime activity here of -- onetime because of that, the impacts may be seen. But long term, no change. We are very fixed revenue model. Our costs, our -- everything is the way it is. So no effect on that. Any investors or any person who wants to visit, can visit us with the prior appointment. We are always welcome our investors, and we are very transparent to -- this is a level of transparency we believe it. So that's it from my side.

Thank you. Thank you to the management team for your valuable time, and thank you to all the participants for joining on the call. This brings us to the end of today's conference call. You may all disconnect. Thank you. Goodbye.