Thaai Casting Limited (TCL) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Thaai Casting Limited H2 FY '24 Results Conference Call hosted by Kirin Advisors. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Ganesh Nalawade from Kirin Advisors. Thank you, and over to you, sir.

Thank you. On behalf of Kirin Advisors, I welcome you all to the conference call of Thaai Casting Limited. From management team, we have Mr. Anandan, Chairman and Managing Director; Mr. Ramakrishnan, Whole-Time Director; Mr. Subbiah, Finance Head; Ms. Shevaani Anandan, Whole-Time Director; and Mr. Rajesh Samal, Company Secretary. Now I hand over the call to Ms. Shevaani Anandan. Over to you, ma'am.

Thank you, sir. Good evening, everyone, and welcome to Thaai Casting Limited H2 FY '24 Earnings Conference Call. We are delighted to have the opportunity to provide you with a comprehensive overview of your company's performance and our strategic direction. Thaai Casting Limited stands as a distinguished automotive ancillary company with a rich legacy of expertise and innovation, specializing in high-pressure die casting and precision machining for both ferrous and nonferrous materials as well as induction heating and quenching. We have carved ourselves in the automotive component sector, founded by Mr. Sriramulu Anandan, an industry veteran renowned for his expertise in pressure die casting and machining process. Our business model revolves around a B2B approach catering to leading entities in the automotive sector. Our product portfolio has a diverse range of automobile components, including engine mounting support brackets, transmission mounts, forkshifts, steering wheel, housing top covers, YFC base frame and more. Notably, our commitment has earned us the prestigious MSIL green certification from Maruti Suzuki India Limited in 2021. This underscores our dedication to adopting and promoting fully quality compliance components. In terms of operational highlights, Thaai Casting Limited recently achieved significant milestones, including our listing on the NSE Emerge platform with an IPO of INR 47.2 crores. We also established Thaai Induction and Nitriding Private Limited, a wholly owned subsidiary as part of a strategic expansion into the ferrous business segment. We have acquired land to facilitate the construction of new facilities for our subsidiary also, focusing on gas nitriding, gear shaping and planetary carrier manufacturing. These initiatives underscore our commitment to growth and innovation, positioning us for long-term success in the dynamic wind industry. In the second half of FY '24, our focus remains steadfast on driving growth, innovation and operational excellence. We are proud to report our strong financial results, which is significant year-over-year growth across various key metrics. Our total income reached INR 48.13 crores, showcasing a commendable trajectory of success. Additionally, our EBITDA stood at INR 14.68 crores with an impressive margin of 30.51%, reflecting our commitment to operational efficiency. Moreover, our PAT amounted at INR 8.22 crores, underscoring our ability to deliver sustained profitability. These achievements validate the effectiveness of our strategic initiatives and the dedication of our team. As we navigate through the opportunities and challenges ahead, we remain dedicated to our core values of quality, innovation and customer satisfaction. Our order book, which stood as for the month of March 2024, it is INR 232.69 crores. And on the month of April and May, it is INR 74 crores. Our recent land acquisition for the expansion of our subsidy reflects our proactive approach towards meeting the evolving demands of our industry. By investing in new facilities and technologies, we aim to strengthen our capabilities and position ourselves as a leading provider of high-end casting solutions. We are pleased to report a commendable growth trajectory for our company. This success is driven by the development of new products, addition of new clients and our goal of becoming a global brand offering one-stop high-end casting solutions. Following our IPO, we are on a growth path supported by our expansion and capital expenditure plans. We have established a new subsidy and acquired a land setup to a gas nitriding plant. Focusing on our efforts on increasing insulation capacity is crucial as we strive to meet the growing demand for our valued customers. We are concentrating on boosting our overall order book value by securing more orders and enhancing the value of the existing ones. This multiphase approach underscores our commitment to excellence and growth, paving the way for a promising future. In conclusion, I want to reiterate our commitment to sustainable growth and value creation for all our stakeholders with a strong foundation in place and clear road map for the future. We are confident in our ability to seize opportunities and overcome obstacles, driving long-term success for Thaai Casting Limited. Thank you.

[Operator Instructions] The first question is from the line of Pranay Jain from DealWealth.

Congratulations on a robust year.

Sorry to interrupt, sir. May I request that you use your handset, sir. You are not audible sir.

Great. So first of all, congratulations on a robust year. I wanted to understand with the kind of strategy that we have taken to become a global one-stop shop, just wanted to understand this vision, how do we see it translating into the line of products over the next 2 to 3 years? And what kind of technology, geographies, clients are we looking to have, except what we already have achieved in FY '24? If you could just give us how this vision is going to play out. That's what I want to understand first.

This is Anandan, Managing Director of Thaai Casting. Good evening, everyone. Sir, earlier, we were doing casting of up to around 4 kg weight of components. Now we have started doing up to 9 kg to 13 kg with the new CapEx facility we have introduced with our IPO funds. So which will be starting in a couple of months' time, almost 3 months' time. That will be a value -- very much value-added for the EV, front-axle, rear-axle components and other than battery boxes, those components will be catered. And globally also, we are discussing with the customers where we can reach them and supply the parts from here. And apart from this, we are focusing more on the wind industry. Already, we have signed an agreement with Flender, German company. One vertical, we have already completed the erection and everything, gas nitriding, most probably from this month onwards invoicing also -- business also will get started. Further to that, on the wind, we are going for gear shaping and planetary carrier machines, that shall be first person will be in India to support them this type of components, first company.

That is very heartening, sir. So if we just look at the order book for this year, what does it look in terms of executing for this particular year as of now?

This year? This year, almost we are targeting around 55% to 60% increase in the comparing to past year, sir, that we have very much visibility for the orders and the confirmed orders. And subsequently, we are getting the orders also and we will keep getting orders for even 2026 launching cars. Those cars orders also we already received. Validation process also over. So we keep getting orders because we are improving our lab facility and also -- there was a disturbance. And we are implementing latest technology of latest machines.

So the new products which you mentioned like the gears for the wind industry and planetary parts, all of this will start contributing from, say, the second half of this year in our numbers?

Only in the wind part, only gas nitriding this month onwards will be -- business will be starting. Already past 7, 8 months, we are working on that. And other than gas nitriding, the gear shaping and the planetary carrier, we have ordered the machines. All the machines, 15 months delivery time, the maximum delivery time. Other machines are 12 months. So end of next year, this business will get started. The entire -- these 3 machines which we are buying, this will be first time in India, these machines. We have made an agreement with the customer also.

Understood. And last question before I get back in the queue. On the automotive side, what are the new clients we have added? Because as you mentioned, we were undergoing audits by global names. So just wanted to get a flavor of those who are now confirmed to give us orders or who have already started giving us. And...

See, we are already -- hello, sorry. You continue, sir.

Yes. So this was on the automotive side that I asked you.

Yes. Already we have approved by Hyundai, Maruti Suzuki India Limited, Stellantis, PSA. These are all the major car manufacturers already we have approved. So only the new models which is going to come, like Kia EV vehicles, we have been ordered the business. The new car launching, which is going to come next year, Hyundai, we have been awarded. The Maruti, also Grand Vitara, we have been awarded. The new project of Maruti also, we have been awarded. Like this, only the new models will be -- we are getting awarded the new business. Already, we are in the place of all the OEM car manufacturing suppliers through Tier 1 suppliers. And in addition to that, the medium segment of pickup vehicles like Tata, we are entering now and Mahindra, already we have entered. So we are -- Leyland also, we are trying to enter in like -- Leyland also, we have entered to start the business.

Got it. And with the addition of such clients on the auto side as well as growth in segments in wind and planetary later, we expect that our profit margin should only pick up from here, not just maintain?

No, sir. We'll maintain the same. We'll try to maintain the same, around 27% to 30% EBITDA will be -- definitely will be maintained. [indiscernible] so we have to invest consistently. Yes.

That's what I wanted to understand. I mean, as our utilization picks up, you think there is room for further pickup in margins or we are going to get into a very competitive area, so it's difficult you are saying?

Yes, yes.

The next question is from the line of Atul Dafria from Marigold.

One point is, sir, you mentioned that 55% to 60% hike in the order book. So this is compared to last year. So should we expect around INR 350 crores order book this year?

No. Actually, 55% to 60% increase in that comparing to last year revenue. And the order book is it will go for another 5 years. Normally, when we are getting order for new model, for an example, new Maruti vehicle, which is going to launch in this year, I'll be getting that order. The entire order value for absolute of that model 5 years, that value like that many models value only that is INR 220 crores. Do you understand this?

No, not really. So you mentioned that generally, it takes 5 years for executing the orders, right?

No. One model normally minimum 5 years, any car models are running, sir. Entire period, we'll be supplying that part. They'll be giving the RFQ and everything like that only, sir. Year-on-year, what is the volume and the entire volume, like that only we'll be discussing with the parts. So the entire order book today is so much of amount. It will be in phased manner. So we can complete this year to next year, we can achieve this. Subsequent year will be better because most of the car launching in this model, next year getting launched.

Understood, sir. And generally, the order book, what you have currently on -- in hand, generally, how much time it takes for you to execute those orders?

This is -- most of them in the 60% around already we have completed the development, waiting for the start of production by the OEM. That is from -- something already started. This year, a few percentage we are going to start. Most of the order book will get started end of next year. December '25, all the whatever booked order will start generating revenue.

The next question is from the line of Krishna Kumar, who is an investor.

Sir, I have 2 questions. One is the revenue guidance for the 2025 and also for the upcoming 2 to 3 years. The second question is on the margin front. Comparing to the previous year, suddenly, there is a high jump in the margin from 2022 to 2023. Will the margin will be sustaining for the upcoming -- for the next 2 to 3 years? Or is it only like a onetime gain? I mean, we just need some clarity on that, sir.

No, no. Definitely, the margins will be sustainable. There will be any point of time minimum 27% can be maintainable. Now in the new CapEx, many of the investment is going. That is all slightly variations also I'm telling. Once everything is completed in 1 or 2 years' time, then we will be -- we can able to come with the exact EBITDA margins.

Revenue guidance for the next year, 2025, also for the next up to 2 to 3 years, the future guidance?

Subsequently, we are planning every year minimum 55% to 60% revenue guidance because already order booked, which I already told around -- all put together more than nearly INR 250 crores, we have been order booked. So it will keep starting revenue in every quarter, every half year.

Yes, sir. But just you mentioned that the order will be starting from next year -- at the end of next year, right?

No, no. Whatever the order book is there, already some percentage we are starting now. The entire order book, whatever committed, it will be started entire value will be end of next year, December. The last car model, which I'm telling is launching in the December 2025. So whatever I'm committed, everything will be started in 2025.

Okay, okay. Got it, sir. Perfect. So the revenue guidance will be 50% to 60% year-on-year, right?

Yes, yes, sure. So far, [ our order booking ] we are having.

The next question is from the line of Marutinandan Sarda, who is an investor.

Congratulations on a good set of numbers. My first question will be on the CapEx. So for the next 2 years, what is our CapEx requirement and how we are going to fund it?

So first initial CapEx requirement, which I'm telling for the wind, already for automobile, already this fundraising we have already purchased most of the machinery. For wind, which we are going -- signed with the German customer, we need around INR 70 crores, INR 75 crores of CapEx requirement for 2025. Now before we have ordered the machine, with the internal accruals, we are paying advance. We have asked the supplier to start manufacturing. One is from German Gleason, is from Austria WFL. These 2 machines we have been ordered. Today, I am in Coimbatore to give another 2 machines order will be -- today and tomorrow [ I'll be discussing ]. Once that is completed, all the purchasing of activity is completed. So next year, we'll be expecting all the machines to come in and then we will start.

Okay. And second question is on the debtors and inventory, basically on the working capital cycle. So our debtors are around like less than 2 months is what we are keeping. But inventory seems to be in excess of 4, 4.5 or 5 months. So can you just throw a light on that? Is it just a case at the year-end? Or is it a general feature that we'll be having inventory of 4 to 5 months at any point of time?

No, sir. Recently, we have been entering in the new products. With new products, we have a various of alloy differences. So we had to keep some inventory in the year-end. So we want to try to reduce -- like within 1 or 2 years, we want to reduce the inventory also. We are working on that, sir. There is different grades of alloys we are using. So now we are planning to reduce inventories also in the coming year.

So what's the optimum level of inventory days you are looking at? Do you want to keep it down to 90 days?

No, definitely less than 90 days, we want to keep it, sir.

And my last question is on the other current assets. If you can just give a breakup of that, what it is? It's approximately, I think, INR 18 crores to INR 20 crores.

Sir, Subbiah sir?

Yes. I just want to know the breakup of other current assets. The value is around INR 19 crores. Can you just give a breakup of that, what it is?

Yes, 1 minute, sir. My -- Subbiah sir, sir they are asking current assets. Do you have papers? Subbiah sir, you can talk.

The current assets, sir. The trade receivables -- sir, can you hear?

Yes, I can hear you. I just want breakup of other current assets, not trade receivables and the inventories, the line item which is below that.

Okay, okay. The other current assets is part of other deposits like advances for purchases, like this. And the deposit with the department, ED deposit, like this.

Okay. My last -- it's actually not a question, but a suggestion that if we can have a result declaration every quarter instead of 6 months because I believe that is doable and it will be good for the investors as well as the company to share and have this kind of communications on a quarterly basis rather than 6 months.

We do take your input, sir. We'll discuss with our auditor -- chartered auditor and then we'll try to. Maybe first 6 months, maybe we have a lot of development. Maybe end of this quarter, we can -- I think we can do. Anyway, we'll discuss with the auditor and then we'll try -- we'll take your input, sir.

The next question is from the line of Ankush Batra, who is an investor.

Sir, my question is on raw material prices. So in last 2 months, we have seen raw material prices have increased like 15% to 20%. So how will it affect our margins?

Normally, we don't -- we definitely will get the price increase from the customer. Our margin will not be getting increased. We have a price agreement initially, sir. Some customer month-on-month, we are doing. Very few customers, we are doing on every quarter basis. Now presently, as you rightly said, there is a fluctuation in the market.

The next question is from the line of Gunjan Modi, who is an investor.

Sir, I wanted to understand regarding some updates published with the exchanges. You have mentioned that you received the order of INR 220 crores. And post that, you received an order of around INR 12 crores. So you were currently fulfilling an order of, at that point of time, INR 8 crores per month and the newly workflow created increase in INR 4 crores. So I want to understand, sir, that if in the second statement, you are stating that you have a total order book of INR 233.69 crores and you just received both these orders recently. So what was the previous order book regarding that? And my second question is regarding the capacity. You have stated that you are already utilizing 80% to 85% of your capacity. So how do you plan to fulfill these new orders? The new plant is coming up in 2 to 3 years as per the statement.

No, that is wind project, sir. This is already -- with this new CapEx already, we have new capacity has come in, sir. Almost installation also getting completed. So maximum in 3 months' time, most of the machines will be started running, sir, with the new capacity.

Okay. And my first question was regarding the order book. Like you stated the total order book to stand at...

This is existing order book. Whatever we are doing, we have achieved INR 90 crores. This is all apart from that.

So the INR 8 crores monthly run rate is apart from...

Apart from whatever we have received -- we are doing in order books. Whatever we are committing now, it is apart from that. There will be any absolute in the model in a couple of years' time. Then existing order will get reduced in that portions.

The next question is from the line of Suryanaryan Nayak, who is an investor.

Yes. Sir, just I missed one point. You said the wind CapEx is INR 70 crores to INR 75 crores and the current cash flow statement, is it reflecting the same?

Come again, sir?

In the cash flow statement, the investing activity, it is showing that around INR 65 crores has gone into that. So is it related to the wind CapEx?

No, sir. Wind CapEx is totally new, sir. It's already...

Totally new? So this INR 65 crores is towards the auto segment?

Yes. Yes, sir.

Okay. So then...

Only small portion wind rate is there, which we are starting this month onwards, the gas nitriding alone. So those we have already invested a few crores. Rest everything is automotive.

So is it related to the gas nitriding plant?

Gas nitriding is not automotive, it's a wind, sir. Gas nitriding, already we have completed the project, and we are going to invoice from this month onwards.

Okay. So where is the -- what is the status? I mean, are the installation completed or what is the status?

Completed, sample has been approved by the Germans, the samples. And the first batch also, we have completed last week of last month. And this month, the first batch approval we are going to get. Most probably another maximum 10 days' time, continuous production will get started.

Okay. And secondly, sir, you said that the wind CapEx will be INR 70 crores to INR 75 crores. So what would be the means of finance?

Being that it is more than 12 months to 15 months delivery time, we have made even 25% advance also. I've taken them deferral payment like 5%, 3%, 5% in a couple of 9 months' time. These advances, I'm planning to do with internal accruals only. So I thought of discussing after 3 months with my financial team, everyone, whether we go for debts or any fresh issues we need to think about.

But you are for sure going to implement this wind project this year or that will be in next year?

The machines will come only by next year middle, sir, all the time taking process, the big machines. And we have ordered the machine and paying advances to them.

And there is a doubt in the minds of the people that you said -- in your presentation, you said INR 234 crores is the outstanding order. You got some INR 74 crores orders of different periods. And again, INR 10 crores also for 3 years. So what actually is the current order book because INR 90 crores is flowing to the P&L. So what is actually as in March '24, out of INR 232 crores, how much order has flown into the P&L? And what is -- is it the leftover order book, INR 232.69 crores?

Whatever we are declaring the order book, that is apart from what we are doing, sir.

You gave actually the order book in 3 columns. One is order as on March '24, order received during April and May and order secured by your subsidiary. And April and May, that is for the 5 years, that is INR 74 crores. So that is not that material. Ditto is case of INR 10.8 crores that is for 3 years, that is also not material much. But my question is only about the INR 233 crores orders that we have. So what is -- if I'm to understand that, so I mean, the run rate will be like around INR 20 crores per month?

No, sir, it is not like that, sir. I'll explain once again. Earlier also the same question has come and I explained that. The INR 220 crores business we are getting with the various models of cars, various models of cars. Some cars is getting launched this year. Some cars are getting launched even next year. The last car, which is going to launch in December '25. This INR 220 crores will be -- execution will be completed till December 2025. From now onwards till 2025, December, this INR 220 crores execution process will get started. When it is -- INR 220 crores, approximately when we got an example, INR 20 crores business is second quarter when it's starting. INR 20 crores business, another 5 years, the model will complete, it will continue. The next quarter, another INR 40 crores starts. Then it will continue for next 5 years. The December 2025, which is going to start, there is a major volume, so about INR 40 crores, INR 45 crores. That will go another 5 years from that time onwards. You understand?

So shall we mean that around -- what will be run -- what is the...

Whatever I have received a purchase order from the customer, development confirm purchase order, developments we will be doing. Some part will be validation will be 1, 1.5 years. That is what this confusion. So validation process over, then again, the business will get started.

So this order book has come after all validations have been completed, right?

Yes. The purchase order once received, most of the volumes are already completed, only 40% under [indiscernible]

Okay. So what is the current run rate for month of revenue?

From this exactly, I can take and tell you also. From this INR 220 crores -- out of INR 220 crores, how much volume...

INR 232 crores, sir. Not INR 220 crores.

Yes. Yes. INR 220 crores plus INR 12.69 crores, INR 232.69, which quarter how volume, which quarter how much [ available ] that also you can use. Or anybody..

What is the current run rate of revenue -- I mean, that is the current monthly run rate?

So I'm telling this currently run rate 60% revenue this year, we are increasing.

No. Again, you are keeping some confusion in our mind. So if...

See, we are increasing 60% revenue. This is coming from INR 232 crores only.

Okay. So this thing...

For this only next year which is going to increase, that will be coming from INR 232 crores only.

See, up till March '24, we had some around -- on an average around INR 7.5 crores to INR 8 crores of revenue, right?

Exact run rate will not come month on month. It will increase..

I'm just giving average turnover, not exact turnover, average turnover. I mean yearly average turnover, monthly average is 7.5%. So you are saying that now it will be 60% higher?

Exactly. Yes, 60% higher will be there.

So I mean that it will be around close to INR 12 crores per month?

Sometimes INR 8 crores will be there, sometimes INR 14 crores will be there because any development day when we are invoicing, that month will be -- heavy invoice will be there.

Okay. So on the lower range, it will be around INR 8 crores, INR 9 crores?

Yes, INR 8 crores, INR 9 crores will be there.

And in the higher range, it could be -- it can go up to even INR 14 crores.

Yes, even it can be more also.

It can be more. So -- but at the end of the FY '25, we can say it will be around INR 12 crores for average?

Yes. And when you make it average, INR 12 crores will come.

Okay. And you are saying that the margins will be intact?

Yes.

And what about the nitriding facility? When actually the revenues will flow from there?

The nitriding only INR 10 crores you told this INR 10 crores business. That is nitriding this year.

Okay. That is nitriding facility. So...

Absolutely. That is only a service project. Customers [indiscernible] material. We are doing only service.

Okay. That is basically a heating exercise, nothing else?

Yes?

That is a nitrogen heating exercises through which you are going to change the surface of the metals.

Yes, yes, surface furnace, correct. Exactly.

So I mean -- so what is the potential there? How much is the total scope there in the nitriding facilities?

Nitriding, we have been signed for 3 furnaces customers. First furnace, we have launched. That is what the business -- this month onwards, we are going to do. Second furnace, we already given order. We are expecting end of this year. Third furnace, we are planning next year. Total customer committed for us 3 furnace capacity they have committed. It is almost this furnace commercially is the biggest furnace in India, almost 3 meter diameter, 10 tonnes of each time capacity. One time if you load it, it will take 90 hours to come out.

Okay. So how much CapEx has gone into that nitriding facility?

So far, only 1 furnace we have introduced, sir, but we made an infrastructure for 3 furnaces. One by one furnace we are introducing.

So in 1 furnace, how much gone?

It would have gone around INR 6 crores, INR 7 crores.

INR 6 crores, INR 7 crores. So out of INR 6 crores, INR 7 crores CapEx will generate per year, how much potential revenue?

Revenue, around INR 4.5 crores to INR 5 crores minimum we can do. Conservatively, I am telling, only services.

Okay. That is not that significant. And in the wind CapEx of INR 70 crores to INR 75 crores, how much revenue potential you see for year?

That is -- we need to calculate and tell, sir. Maybe you can write up because it is a very big cycle time, we are working on that. Each machine is around INR 17 crores. We are working on that. Pricing also we have with us. Each component is around -- we'll be invoicing around INR 2 crores, almost INR 1.85 crores to INR 2 crores. So I can tell you. I don't have numbers now right now. You can send a mail, I can give a reply to that.

And in the auto CapEx of INR 60 crores to INR 70 crores, how much revenue we can...

The entire whatever we are discussing, INR 239 crores is auto only, sir. Nothing has been...

Okay. Okay. Again, are we introducing new products in the OE category?

Existing components and new models only. There is no any new products.

Okay. New models. And by the way, are we also touching upon any other OEs apart from Hyundai and Toyota?

At present, I don't know, sir. We are already entering into -- Mahindra already entered. Tata, discussion is going on. Leyland also, we entering. RFQs have started coming. In the medium segment, pickup vehicles.

Okay. MSVs, I mean, pickup vehicles?

Yes, yes.

The next question is from the line of Pranay Jain from DealWealth.

Some of my questions are partly answered. Just wanted to get clarity on the gas nitriding business. I understand that phase-wise, we are adding the furnaces. But otherwise, what is the contribution in a steady state that we should expect over the year or next 2 years from this business?

Overall, we can expect around INR 12 crores annually in this business.

INR 12 crores from the 3 furnaces?

Combined. Yes. Rahul, am I correct? I don't -- one minute, I'll calculate this one. Rahul, are you on the line? Order volume is correct?

Yes.

So gas nitriding, as of now, we can pencil INR 12 crores revenue from all the 3 furnaces, assuming they are running steady state. That's what you're saying, right?

Yes.

Got it. And the margins [indiscernible] because it's only processing would obviously be lower than our company average, right, because it's only part of the process.

It is better than existing, sir. It is only the technology only it is main, sir. Furnace technology, if we have to buy this furnace as imported, it is INR 12 crores. We are just with our own by visiting German and other things, we have built up this within INR 3.5 crores.

So you're saying the efficiency will impact...

I request this type of internal technology from visitors, you'll be more easily understand it, I'll be happy to explain in person also, no issue.

Sir, I would like to correct it. In 2026 to '27, we are operating in full capacity. We are expecting it around INR 9.2 crores to INR 9.3 crores.

Got it. Thank you for this clarity on gas nitriding business. Second thing is, basically, the CapEx, all of which that we will complete by next year, what would be the potential revenue from all the segments? Have you done that kind of work or it's difficult to project as of now?

As of now, it is very difficult, because it will keep adding the one by one additional requirement of the -- what we are discussing as a gas shaping and planetary carrier. Customers also, we are -- joint discussion is going on. CMO, which is not included, that is coming around 5.5. Originally, fixed -- the agreed cost, they're ready to accept that increase of cost by going additional CapEx. It will take another 3 months to get concluded the new vertical entire revenue part, sir.

Okay. So from the wind power business, assuming that we are doing INR 75 crores CapEx, the capacity will be fully tied up with our customer in Germany and Austria? Or we are looking for more customers also to utilize this?

No, no, this purchase area only, I told, sir. The machine which I'm buying only German and Austria. Customer is German customer, sir.

Okay. But we are in talks with other kind of customers in India and elsewhere also for this business?

See, so far, I have only booked only with this customer. Once everything is set back, we are trying to go for other customer also. We have identified the other customer also. We'll be going for other customers. There is no restriction with the existing customer for going other customers.

And what is the visibility from the German customer for this wind power business next couple of years, do we have?

That is for 2025 only, they have volumes. They are also working for -- we have made agreement also with them. So they are also working on us. It will take another 3 months to give a clarity on the exact visibility on that, sir. But entire -- we are going to produce, and they want to stop importing China and German also. Subsequently, they are planning to export our parts to German also. So we are -- because they are also investing around INR 300 crores, INR 400 crores, Only I am -- some vertical I'm doing. Most of the things they are investing in-house in Chennai.

Okay. So this is going to be a long-term engagement. And like you said, this is your own market service...

Yes, German, long-term agreement.

Got it. And on the planetary carrier side, while it is an emerging and exciting space, what are the prospects that we are seeing over here? I mean, is it only ISRO or 1, 2 other names? Or what kind of development we are expecting in this segment?

So mainly machine selection, sir. Today also, I came to Coimbatore because of the planetary carrier discussion only to discuss one of the Indian supplier itself. We want to reduce the cost of import machineries. We are pure core technical people of machining. So that is what we are getting this orders.

Okay. All right. So we will focus on precision machining, engineering and not really...

Yes, yes, there is a very criticality in there in the planetary carrier. Just like that cannot do. I'm working more than 3 months on particular on this project alone, which machine to be selected and dimension and the probability inspection method what to be selected. We keep continuously working. Our initially long time taking time process machine, we have already ordered 15 months. Rest everything, we want to close it before 15 months.

Okay. Okay. This is quite visionary and I commend you and your team on this thing. It will require a lot of CapEx to run this kind of growth year-on-year. So I wish you all very best.

The next question is from the line of Darshit Shah from Nirvana Capital.

Sir, on the export side, on the last call, we had mentioned that we are in talk with a few of the MNCs and also we were in touch with Motherson Sumi, who are kind of asking us to kind of make a few products from there. So any update on that you would like to throw?

They have added us into the portal, sir. We can view the portal, all the requirements globally, it will come into the portal. We can quote that. So last 2 quotes, we could not be able to gain because of higher price. They have guided us. Maybe from next quarter onwards, we are targeting to get the business.

Okay. And any other MNCs -- global MNCs we are talking for exports as of now?

As of now, Motherson only, I visited personally and was discussing. Other than that SumiRiko also we are discussing. I wanted to start this also further continuation after 3 months because we have taken a lot of machines already coming into the factory implementations and everything we want to quickly do it. So we don't want to divert our concentration immediately and the export business, when we get also, we need to promptly deliver. So we -- earlier, I targeted for June. Now maybe July, August, we'll be closely following export business. Reshuffling in the plant, if anybody comes, there is a lot of reshuffling also, new machines coming, the existing layouts are getting changed. So a lot of...

Once we kind of stabilize the new plant, then we'll focus on exports?

Yes, yes.

And sir, the other segment was aerospace component. There also we were targeting something on the machining side?

No, sir. Only -- wind only we are targeting. So which I'm told one machine we are going to buy from Austria. This machine is very much capable to do the aerospace components. So we are going to target that also. Aerospace, there is a separate quality certification required. So we are going to start that quality certification audit process also. In meanwhile, last month, we got a SMETA 4-pillar audit also we got through because any German company, we have SMETA audit passed. They never come and audit us. So we have -- that also we have done past. We can count very few people only will do this type of audit passed.

Sorry, sir, can you mention what is that audit and what is that audit required for?

SMETA 4-pillar audit, sir. It is very tough audit. It will come in the employee safety...

It is SMETA.

Yes, yes. Rahul, you have posted in the NSE also no?

Okay. Okay.

NSE, we are yet to post, not yet.

Yes, I think it has come, approval.

Shortly, we will be posting.

The next question is from the line of Jignesh V. from Jiva Capital.

Sir, there is new wind CapEx that you are planning to do, I wanted to understand what kind of products will we cater to for this client?

Sir, this is wind, there are -- a lot of products are there. So there is a blade. The blade, there will be -- reduction gearboxes will be there. We are catering on the main gearbox. Very big gearbox. In the main head, the gearbox is there. That portion, we are concentrating, that parts.

So this kind of product you are doing the only person in India or there are a few other competitors?

It's not started so far. Already, these are only captive only they will be doing in-house. They will not be giving to suppliers because huge investment, technicality required. This is the first time from the German customer, we are going to implement by [ Tican ].

Okay. So going forward, this kind of products can also be -- similar products can also be done for aerospace?

Yes, yes. This machine is capable to do aerospace component also, like that only we are saying. Machine is general purpose machine. It is not a special purpose machine. This can do other parts also.

Okay. Understood. And so for this INR 70 crores to INR 75 crores CapEx, you would be requiring for next 18 months?

Correct. 25% only we are discussing with them. That also I'm discussing with them for a deferral payment. We are managing and paying them. So when it is required, I thought we'll think whether to go for debts or reciprocity. We have not concluded.

Okay. So the fund requirement will be -- maybe thought of next year only?

Next year, beginning, yes, correct. Because 60 days before they'll be asking the entire funds to deliver the machine.

Okay. But for this -- suppose if we do start the production of this wind product, we will be only catering to one client of Germany?

Correct.

As of now?

We can go to other client also. Once I complete order -- complete the ordering the machine entirely and set the process sequence correct, I'll be start working with the other customer also before machine comes. We made agreement presently only with one customer. Once this is -- I'm not declaring to any other customer also. Once I order everything completed and time frame, everything road map completed, then I'll go to other customer also similar customer.

Okay. And sir, during our earlier calls, you had mentioned that currently, automotive is 80% of your revenues.

Yes. With this, it will be getting reduced.

So once this wind comes, it will come at 60%?

Yes. That is what my aim. 60% to 40%, I want to maintain.

Okay. But that will only be done after 2 years. Till then...

Next year onwards. Now gas nitriding increases also, slightly, there will be a change, a few percentages. Then already we have started the gas nitriding this month onwards. Then subsequently, next year, middle onwards, it will start.

Okay. So broadly to understand, like this year, INR 90 crores was your revenue majorly from automotive. So this automotive will become around INR 150 crores. And going forward, more of the revenue will come from the wind aspect.

There will be a small percentage in non-automotive also, sir, which already we are doing a special process of induction nitriding already, past few years.

Yes, yes, yes. So that entire revenue will be around -- if we assume it is INR 150 crores. But over and above this will be wind component that I wanted to understand.

Correct. Correct. Correct.

So overall, broadly, we can achieve around INR 250 crores to INR 300 crores in next 2 years?

Next 2 years, yes, sure. We are aiming -- we are working towards that.

Okay. So around 60%, 65% CAGR every year for next 2, 3 years?

Yes. With this, easily we can come.

The next question is from the line of Gaurav Sachdeva, who is an investor.

Sir, my question is regarding the shareholding. As I remember, you have given around 17 lakh shares to the anchor investors. Am I right, sir?

Correct, correct.

Sir, can you tell me as on date, what is the current shareholding?

Shevaani?

Yes sir. Rajesh sir?

Rajesh? Rajesh, he is asking present shareholding. Are you in the line?

Yes, sir. I am Rajesh [indiscernible]. Sir, what you actually need, sir?

Sir, actually, you allotted 17 lakh shares to the anchor investors. So as on date, can you tell me what is their holdings right now?

What anchor investor?

I think same only, sir. Till 12 months, they cannot sell no, sir.

Actually, their shares is in lock-in, actually.

I think lock-in period is not 12 months for the anchor investors.

Rajesh, can you tell?

One second, sir.

As far as I know, it is 12 months lock-in period.

So you're asking the shareholding pattern as on 31st March 2024 or as on date only?

If you can provide both as on date or 31st March, whatever is possible for you.

One second, sir.

Because actually, there is very big overhang in the till market the anchor investor selling is not...

Rajesh, I think anchor investor is selling the share, I think.

Sir, I'll do one thing. Sir, please provide your mail ID. So I'll provide the detailed shareholdings for the company.

Sir, I think you are right, sir. Anchor investors selling, I think.

Yes. Because shareholding pattern as on 31 March 2024 and -- because every week, there is a...

No, Rajesh. Sir question is whether anchor investors are retaining the same or they are selling?

Yes, that I need to check the shareholding pattern, whether they are there in the shareholding pattern or not. For that, sir, please share your mail ID so that I'll share you the details whether the anchor investor is holding the shares.

Okay sir. I will e-mail you separately.

Yes. Yes. I'll share you both as on 31st March 2024, the shareholding pattern and as on the current date what is the shareholding pattern. So you can view it, sir.

The next question is from the line of Suryanaryan Nayak, who is an investor.

Yes, sir. So just wanted to understand the growth we did of 85%. So how much is value growth and how much is volume growth? So is it possible to give the volume of metals we have casted and the EBITDA per tonne of FY '23 and FY '24?

EBITDA per tonne, definitely, we cannot give, sir. We are different various verticals. We are doing development, die casting. Dies also we are doing. We are doing die casting part. We are machining the CNC machine, aluminum. And steel also we are machining and the induction heat treatment also we are missioning. All in one roof, sir. It's very difficult to give in per tonne calculation, sir.

So have you assessed actually how much...

It is number based. It is value based, it is increasing the size.

Okay. So I mean, the 85% growth in the revenue is totally attributable to the value growth only?

Maximum value growth.

Okay. So can you just give the ratio of ferrous and nonferrous?

That can be given, sir. I can send you a mail, sir, because at present, I don't have that. We can split and give. We are together only working. Actually, company is working together only. If you want, we can split and give.

So can it be possible, sir, if you can give a detailed presentation wherein the current status of different CapEx and different -- the clientele and the products actually we are actually supplying. So if -- it will be better because it is due.

Once I complete the CapEx, as I told, it will take 3 months' time to complete my entire CapEx ordering. Only 1 or 2 machines have ordered so far. I'll be completing in 1 month's time ordering and subsequently, inspection equipment also we will order. Maximum 3 months' time, I can give you entire vision for total CapEx, what I'm planning sir.

For that vision, at least a status report, status presentation, investor presentation is required. If you can provide, that will be great.

Okay, sir. Subbaiah? Whatever CapEx [indiscernible], we can do it.

CapEx and what is the current order book you are already given. So if there is any addition to that, you can also give and plus any client additions or anything.

Yes, every order is coming within 24 hours, I think -- Rajesh, correct? We are submitting to CS, he is updating.

The next question is from the line of Akshay Shah from Kriis PMS.

Congratulations on the great set of numbers, sir. Sir, our new facility, when it will come on stream?

Sir, the fully owned subsidy facility, 40% already construction completed for nitriding purpose. The balance we are going to start in this month onwards. The new facility totally which we purchased recently, that is maybe next year only, it will come into operation, sir.

Okay. So sir, from current facility, how much turnover can we do maximum?

So next year, the target we are doing only with the current facility, sir. Yes, this year, 2024, '24-'25.

So we can do INR 150 crores turnover from current facility only?

Yes, yes.

The next question is from the line of Raunak Singhi, who is an investor.

This year, we have a revenue model of 80% towards automotive side...

Your voice is very low, sir.

This year, you are targeting a revenue of like 80% towards the automotive side and next [indiscernible] for the upcoming year, you have a gas nitriding project as well. So what -- can you share the breakup of the revenue towards automotive and gas nitriding project in FY '25?

I'm sorry, sir, I could not hear properly.

Sir, the participant has dropped from the queue. Ladies and gentlemen, that was the last question...

You could able to hear, sir?

No sir. His audio was not clear, sir.

Okay.

Ladies and gentlemen, that is the last question for today. I now hand the conference over to Mr. Ganesh Nalawade from Kirin Advisors for closing comments.

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

Thank you, everyone, from the management Thaai Casting side. Thank you. Thank you, Kirin Advisors. Thank you all the participants.

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