Thaai Casting Limited (TCL) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Thaai Casting Limited H1 FY '25 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 the management team, we have Mr. Anandan, Chairman and Managing Director; Mr. Ramakrishnan, Whole-Time Director; Ms. Shevaani, Whole-Time Director. Now I hand over the call to Ms. Shevaani . Over to you, ma'am.

[Audio Gap] to Thaai Casting Limited H1 FY '24 Earnings Conference Call. It is my pleasure to connect with you all of today to share an update on our company's performance, achievements and strategic initiatives. We are grateful for your continued trust and interest in our journey of excellence and innovation. Established in 2011, Thaai Casting Limited has grown to become a distinguished name in automotive ancillary sector. Our specialization in high-pressure die casting, precision machining of ferrous and nonferrous materials, and advanced processes like induction heating and quenching set us apart. Our capabilities are further complemented by our commitment to quality as evidenced by our certifications, including the ISO IATF 16949:2016 and the prestigious MSIL-Green certification from Maruti Suzuki in 2021 for sustainable manufacturing practices. We take pride in our diverse product portfolio, which caters to varied needs of esteemed clients, primarily global automotive OEMs, from engine mounting support brackets to battery enclosures for electric vehicles, our products demonstrate versatility, precision and adherence to stringent quality standards. Beyond the automotive sector, our growing focus is on renewable energy market such as wind energy components, highlights our strategic diversification. We continue to enhance the technological capabilities through advanced processes like gas nitriding and gear shaping. Setting industry benchmarks in precision engineering gas nitriding, a thermochemical surface treatment, strengthens critical components, such as windmill gearboxes, by creating a hard wear-resistant layer that resists wear, corrosion and fitting. This process is supported by SCADA system for real-time monitoring integrated alarm systems for safety and high-end digital flowmeters, combined with ammonia cracker for uniform quality. With one of the India's largest gas nitriding furnace, capable of handling up to 13 tons per batch, we ensure unmatched efficiency and productivity for large-scale projects. Complementing this, the company's upcoming gear shaping capability, which leverages state-of-the-art CNC technology and one of the India's largest grease and gear shaping machines to manufacture high-efficient gears. This addition, set for 2025, positions to meet the growing demand for gears in sectors like electric vehicles, wind energy and robotics. Further solidifying our key position in delivering high-quality industry-specific solutions. In H1 FY '25, we achieved notable milestones. We successfully maintained a strong order book of INR 386.83 crores with an execution time line spanning the next 60 to 80 months, and secured key certifications that strengthen the quality assurance and aligned with global benchmarks. And we continued investment in cutting-edge technologies, including the SCADA system and one of the India's largest gas nitriding furnace, which enhance our manufacturing precision and efficiency. I'm delighted to present our financial performance for H1 FY '25, which underscores the resilience of our business model and operational excellence. On a consolidated basis, we achieved a total income of INR 54.33 crores, reflecting a steady growth and EBITDA of INR 14.50 crores with a strong EBITDA margin of 26.69%, demonstrating cost management and productivity gains. Net profit of INR 5.37 crores, translating to a net profit margin of 9.89 percentage with an EPS of INR 2 -- INR 2.15. On a stand-alone basis, our performance was equally commendable with a total income of INR 48.76 crores, EBITDA of INR 12.53 crores and net profit of INR 5.37 crores and a net profit margin of 11.01%. As we look ahead, we are focused on driving growth through expanding our market footprint by leveraging the rising demand for electric vehicles and renewable energy solutions, enhancing operational efficiencies with Industry 4.0 technologies, enabling us to remain agile and competitive in dynamic market, strengthening client relationships by delivering innovative, high-quality products and adhering to best-in-class manufacturing practices, diversifying our offerings with a particular emphasis on subassemblies and energy-sufficient components. The automotive industry ongoing shift towards electric and sustainable mobility aligns perfectly with our long-term vision. With our strong infrastructure, strong client relationships and emphasis on innovation, we are well positioned to capitalize on these emerging opportunities. In conclusion, we remain committed to creating value for all our stakeholders through sustainable practices, operational excellence and customer-centric solutions. We thank you for your trust and support and look forward to discussing your questions during the Q&A session. Over to you, sir.

Yes, ma'am. Should we begin the Q&A session?

Yes, sir.

Okay. Thank you very much. We will now begin the question and answer section. [Operator Instructions] The first question is from the line of Ajay Sharma from JC Capital.

Hello, am I audible?

Yes sir, you are.

So, my first question is, are there any plans to explore automation or robotics further in your production process?

This is Anand at Thaai Casting, CEO. Already we are implementing the robotics in the die casting system, for which we have already purchased a new CapEx. So there is a slight delay in production also. Majorly, we're implementing robotics in that mission. And next year also, we are planning a lot of implementation, at least 30%-40% of robotic implementation to reduce the manpower.

Okay, sir. And my next question is, how are you positioning yourself to gain market share in the EV components industry?

Yes. Earlier, I told this, already we are in the common parts in the cars like steering wheels, steering pinion housing, mirror parts, suspension parts. Most of the nearly 75%-80% is common parts. Any energy or EV or IC vehicles, our parts will be there.

The next question is from the line of Maurali, an individual investor.

Congratulations for a very good results in the H1. Sir, can you please explain about what percentage of revenue this gas nitriding business is going to contribute in H2 and what we are expecting from that?

Gas nitriding is purely a service job, labor charges. In the revenue part, it will not be there. [indiscernible] profitability figures. It is a service job.

Okay. Okay, sir. And the other question is like can you expect -- like what -- can you give any revenue guidance for H2? Like what can we expect compared to the previous H2, financially?

Because of -- due to delay in installation slightly 1 or 2 months. So still we're trying to closing around INR 130 crores this year. INR 125 crores to INR 130 crores.

So this is for the entire financial year, okay, okay sir.

Right. Yeah.

The next question is from the line of Ronil Dalal from Fincom Family Office (sic) [ Ficom Family Office ].

It's Ficom Family Office. So I just wanted to clarify on the previous participant's question. You said that despite the delay of 1 or 2 months, you are still on track to meet INR 125 crores to INR 130 crores for the year. Is that correct?

Yes, correct.

Sure. The second -- sure, and just continuing on the same question. So your margin guidance was in the range of 27% to 30%. And for H1, we've seen around 25%. So does that mean that for the year, we're going to be below 27%? Or you think we can catch up in the second half?

No, no, we can catch-up. Will be maintained or we can catch up a little bit [ higher ].

So sir, if you maintain it will be in the range of 25%? And catch up, you mean would it be closer to 27% or 30%?

Yes, 26%, something like this.

Sure. Sure. And the next question is that are there like maybe 2 or 3 reasons as to how come our margin guidance of 27% to 30%, but closer to 25% for the first half. Is it like because of some order delay, some cost escalation, any other kind of factors that may contribute for the same.

It is just delay in the implementation. So some of the -- the first question which I told was, earlier, we thought of going with the traditional method. Now we have converted everything to be in the robotics and the initial itself. So further to this, we have ordered some of the robotics item from Germany that has slightly got delayed in the implementation.

So, to clarify, that it's not because of any customer order delay, it's because that...

No, no, new campus implementation start-up, yes.

Sure. Because some machinery has been delayed, and that is the reason that they are somewhat little bit -- 1 or 2 months behind that. Is that correct?

Yes. Yes, that's correct. Exactly nearly 2 months.

Sure. The next I wanted to ask is that are you facing any headwinds in your operations? Because we are hearing that there is large inventory buildup for the CV and passenger vehicle players at the dealers' end. So because of that, are you facing any delays from your customers, any sort of indication of the same?

Lot of new products and new variety of combination of materials and a lot of new products. So everything, sampling and then batch quantities and a lot of inventories. The [indiscernible] manner, all the developments are completed, which will slowly come down.

So are you confirming that there is no kind of visibility of any delays from your customers, especially your 3 or 4 top large customers, the order pipeline remains the same or any kind of response you're getting from them?

Existing customer pipeline remains same.

Sir, including the top 3-4 customers?

Yes, yes, yes.

Sure, sure. And the last question I had, if I can squeeze in. The current status for the gas nitriding and wind energy, in terms of your CapEx plans and utilization maybe for gas nitriding. If you can just throw some light on the same? And if you have decided any plan for funding, whether it's...

[indiscernible] Initially, we started gas nitriding. Gar nitriding, first we have put 1 furnace. That is 100% through by customer and start of production also from last month, it is happening. And this month, almost continuous production is going on. They gave a clearance for second furnace earlier. Now this month, they gave a clearance for almost third furnace also. We are implementing second furnace end of March. Third furnace, we are targeting something around August and September, sir, in the nitriding. Apart from this other product of hollow shaft and planetary carrier. As original plan next year end after September only, the installation will get complete. All our European machines in various countries. So we are targeting a September SOP and sampling on September or October.

And for wind energy?

Wind only I'm talking.

Okay. Okay. And so what would be the contribution for that for this year? Because it will be implemented towards...

No contribution for this year, sir, [indiscernible]. It will be machine will come only by September, sir. August- September. All long lead time machine delivery, 15 months, 16 months delivery time, sir.

Okay, wow. Okay, sure. Thank you so much for answering the questions, wish you all the best for the coming half. Sorry, sir, one last -- I just recollected that, sir, the investor presentation, I was not able to find it this time. I mean has it not been uploaded?

Hey, Kirin, from Kirin somebody can tell, it is uploaded, no? Satya?

Hello? Hello can you hear me? Hello?

No, no, press release after this one. I'll upload after the meeting. Already discussed it with Ganesh also in this regard.

Sir, one request. I mean without the investor presentation -- we need an investor present before the call, not after the call.

Satya, sir is telling that should be uploaded before the call, not after the call.

Okay, do not intimidate me. Okay, I'll discuss with him and I'll do it.

Yes. Do it immediately. We'll take this input sir.

The next question is from the line of Rachna Sharma from HNI.

Am I audible?

Yes, yes.

My first question is what are the key growth drivers in the renewable energy components segment, specifically for wind energy?

Come again? Wind energy?

Yes. What are the key growth drivers in the renewable energy component segment specifically for wind energy?

What type of components you're asking, yes?

Yes.

It is -- all the parts going to the main gearbox not in the blade side, the main gearbox bigger parts is there, no, main gearbox. And mainly the customers are end customer GE, Vestas, and Nordex, and Suzlon. We supply through Flender, our OE customer is Flender. They are [indiscernible] largest wind gearbox manufacturer in the world. They have a plant in Chennai. So mainly we are focusing to Flender. And we approved by all the OEM also, GE and Vestas.

Okay, okay, sir. And sir, my next question is, are there geographic markets or customer segments you are prioritizing for growth?

At present, we are not addressing for any marketing purpose. Mostly auto mobile segment, we do major supplies to Hyundai and Maruti. Recently, we added Maruti from 2 years before -- 2-3 years before. Earlier only Hyundai. Small cater to all other OEMs like Leyland recently entered, Tata also we are entering, Mahindra also we are entering. All the pickup vehicles. Car segment and also we are doing small parts for Toyota and Mahindra Bolero vehicles, recent new motor vehicles.

Okay, sir. And sir, my last question is, what percentage of revenue currently comes from exports? And how do you plan to grow your international footprint?

At present, we don't do export of any parts from our company. My all customers have presence in globally, many countries. Already, we have discussed many customers and we visited also, they also audited. We are planning to only do from next year onwards only the export business.

The next question is from the line of Priya Jain from Green Capital.

So my question is -- so my question is can you provide insights into the working capital days for H1 FY '25?

It's around 85 to 90days overall at any time. Sometimes slightly different 5 days.

Okay. So my next question is, how do you plan to manage the working capital requirements for the substance like INR 386 Cr order book?

See, we want to go for a working capital enhancement, number one. Number two is once the development things are over, we'll be slowly coming down with the inventory also.

Okay. I have one more question. So what are the company's revenue and profitability targets for FY '26, especially in the context of the growing EV and renewable energy sectors?

This year, as I told, we will not reduce less than 25%-26%. We'll try to maintain EBITDA for FY '26 H1-H2 cumulatively.

The next question is from the line of Ankur Gulati from Genuity Capital.

Am I audible?

Yes, sir go ahead.

Any specific reason for working capital to go up and there's hardly any cash left in the company. So is it because of more trial orders being delivered this [indiscernible]?

A lot of developments, more trials, all the development activities and trials and the initial batches. We didn't enhance our working capital so far sir from last year.

So, sir, if you can give us some color that how much of working capital in terms of inventory or receivable is stuck in all these development orders?

In terms of working capital in that inventory?

If I look at your receivables, they have gone from INR 12 crores to INR 25 crores, right? So that's INR 15 crores increase in receivables. Hello?

Yes, sir.

So there is INR 15 crore increase in receivables, whereas your revenue has grown only by, what, INR 5 crores. So, why such a steep increase in receivables when revenue hasn't grown?

Regular receivables will be the regular term, sir. And the development receivables will take time. When the PPAP approval comes only, the payment will get collected.

So out of INR 25 crores of receivables, how much is development?

Development will be around INR 5 crores - INR 6 crores will be there. Entire thing, once the PPAP approval only will come to the -- and a lot of supplies will be on the initial batches supplies everything. And then once PPAP over only, the payment cycle will get started.

Okay. That's fine, sir. So even if I remove INR 5 crores from INR 25 crores receivable...

Other supplies also is there, the initial supplies are there, like minimum batch quantity, everything, the initial payment will not get started. Once production started, regular payment also will get started.

Understood. So let me rephrase, you guys did INR 53 crores in first half, with a receivable of INR 25 crores. If you have to do INR 130 crore for the full year, will the receivables increase in the same proportion?

Yes, sir. We definitely will come to INR 125 crores.

No sir, INR 125 crores revenue if you do, what kind of receivables do you expect that you will have by the end of financial year? Will this INR 25 crores go up to INR 30 crores, INR 35 crores or it will stay close to INR 25 crores to INR 27 crores.

No, no, it's close to INR 25 crores to INR 30 crores maximum.

And how much working capital limit will you plan to draw down in the next 6 months to achieve your INR 130 crore target?

Just yesterday only we discussed with our bankers. We are submitting. We initially requested only INR 5 crores extra. Then later on after this year completion, we'll review and we'll come back to you and we'll discuss. They are ready to fund, but we restricted only INR 5 crores. We need to submit the differemnce here.

So total debt is roughly INR 62 crores, which, most likely, you're saying will increase by another INR 5 crores - INR 6 crores, right, by end of the year?

By adding this -- we need some more CapEx also. When a new project comes, it's all the captive investment. Any project comes, we'll be requiring minimum requirements of VMC machineries and any additional fixtures and leakage machines, washing machines like that. Those investments will be keep coming, sir. We'll have additional margin also in that.

Okay. So does that mean your debt by end of financial year '25 will be close to INR 75 crores - INR 80 crores?

It will add in the machineries alone, maybe another INR 8 crores - INR 9 crores.

Okay. So let's say, INR 10 crores to round-off and INR 5 crores of receivable, right? So INR 15 crores of extra debt. You're sitting around INR 62 crores. So you will end up roughly with INR 77 crores, rounded up to INR 80 crores?

Yes. It will -- for next 5 years business revenue, we are investing.

Okay. So after this INR 80 crores that you are saying the machinery will be adequate for next 5 years?

No, no. The business for the machinery will be minimum 5 years, the commitment from the customer.

And what kind of asset turnover do you typically look for incremental CapEx when you're putting this INR 10 crores CapEx?

Next year, that is what I said, from minimum INR 190 crores, we are targeting INR 200 crores.

With the same 25%, 27% margin profile?

Then subsequently, any existing business, it is there. Then again, the new development will come. The revenue will come for next year only. For that, we need to go for an investment. Last year also, we made some investment. The revenues are starting from this year. So like this for future investment will increase. For doing this turnover will not require.

For INR 190 crores, you don't require. But after INR 190 crores, you will require.

Yes. Yes, we need to keep upgrade our business to new business model. That time, you need new machineries, new facilities, additional CapEx sir. On the die casting will not be required. And the secondary process will keep requiring for every business. Every part number will require a secondary process different operation.

So how much do you invest, let's say, for going up to INR 190 crores...

It depends on what type of part we are getting. For the application of washing machine, totally different. We need a INR 1.4 crores machine for a secondary operation, which is only available in Turkey. So we are ordering now. The business will start cater from next year, June - July. Even still I have not booked that in the books. We have almost discussion finalized, yet waiting for a purchase this, it varies from part to part, sir. While you visit us, you'll understand better.

The next question is from the line of Sahil Raj from Samdhariya.

Sir, I wanted to ask that you recently mentioned about the robotics part in the opening remarks. So what will be the contribution of that in current year or maybe in the year coming out?

On which one, sir, on which one?

The robotics part you mentioned, right? The CapEx being done [indiscernible]

It is only value addition, sir, to reduce the manpower. It's not more revenue. We are avoiding manpower and then implementing robotics.

Okay. So more of like an assembly line that you are trying to do here. Integrating some parts here and there?

Yes.

And the wind part you said that the CapEx for that will be done in the next September, right? As you mentioned?

That is totally different, next September only it will come.

So the revenue from that we can see in H2 next year, not before that?

H2 next year, will not come very, very minor [indiscernible]. Implementation, getting approval from the OEs will go another 2 - 3 months. Effectively, we get from subsequent year H1.

Subsequent H1, okay, got it. And this gas nitriding part that you're referring, currently contributing to the revenue?

Sir, that is started, sir. Started revenue.

So what share of...

Last month, middle onwards started. This month onwards, continuous production is going on.

And what share of percentage revenue does that gas nitriding part performed?

It is annual -- monthly around INR 9 crores already. All 3 furnaces. It is service job only.

Only servicing. And this includes the furnace 2 that you are going to launch in March?

One, second furnace.

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

Sir, can you -- yes, can you throw some light on the margins which were around -- 29%, 30% operating margins which has come to around 25%. So which are the major factor for degrowth in margin?

Sir, we were doing the other parts other than die casting automobile parts. So when we are increasing the automobile parts revenue, subsequently, the non-automotive parts, the same percentage would not be able to increase the volumes.

So do you mean -- you mean to say non-automotive parts have lower margins?

Higher margins, sir. So automotive only my revenues is getting increased. So the same percentage of revenue is not increased in the non-automotive also. The same percentage increase, we can maintain the same.

Right. But I think going forward...

Going forward, we are targeting 40%, 60%. That is what I'm telling I would be able to manage with the 25%, 26%.

Okay. Okay. Because major orders that you have got are from automotive segment, which has a lower margin, right?

Correct, correct.

But still, we will be able to maintain.

Yes.

Okay. And the other aspect of the wind business, which you told will -- machines will come in September next year?

Yes.

And the revenue will come next -- after FY '27?

Yes.

So there was a lack of clarity whether it will be service business or entire revenue will be come under us. So has that been finalized?

No, sir, December, as I told earlier, it will be December or February, it will be finalized. One part number compulsory, it is not possible to with material only service industry. Another part number it is possible by us with the material that we are discussing with the customer. Once the local Indian source only we are adding, once we get the source, and that will be concluded.

Okay. And that business...

Till the source we are getting, it will be as a service industry for both the parts.

That business will have higher margin than our current business?

Better than automotive, sir.

Okay. Better than automotive but not like non-automotive who has the highest margin?

No, no, all are more or less same.

Okay. Okay. So -- and that you expect to only start after March 2025. After you get all the clearances from OEMs?

Wind business?

Yes.

'26, sir.

Yes, okay. March '26.

Machinery will come in September.

Okay. And sir, earlier you told that you were doing around 9 to 10 kgs of business in auto. So -- and that you are planning to expand, so what is the current parts that we are doing in auto segment in weight?

Now we have started doing up to 6 kg parts.

Okay. And we are planning to scale it up to 9 kgs?

The 9 kg part also will come, but we are not specifically looking on the weight basis. We are understanding, what we have machine, that capacity we are looking.

Okay, sir. And sir we have also about given about -- announcement about the orders of INR 150 crores, INR 154 crores. So this was the order that we were awaiting right? In October, November, which has come?

Yes sir. In the pipeline also a few business are available. We are waiting for the purchase order -- convert to purchase other than we we'll announce it.

But the size would not be like more than INR 150 crores -- all the other would be smaller one?

Maybe half than -- 30%, 40% lesser than that. We are concluding sir. We are almost sign off the LOI. We are awaiting the -- waiting for the purchase order.

Right. And all these orders have to be executed in the next 3 to 5 years?

No, no. From the date of start of production upto 5 years.

Yes. Upto 5 years?

Even now whatever last year, we were getting that's all for '26 model launching also you are getting. Now we started getting out of '27 launching models also.

Right, right, right. Okay. So as and when the model launch date comes, you will start supplying?

Yes, correct, or develop by the time, we'll complete development validations provided by this approval process, everything will take more than 1 year.

Okay. So such kind of orders, what is our working capital since the model production started? So once you supply the part, so what is the entire cash cycle that you are doing currently?

For development, precise, cannot tell. It varies from customer to customer, part to part.

No, not for development for which...

Regular is 90 days, around 90 days.

The next question is from the line of Pradyumna Singhania from Rashi Fincorp.

Congratulations on your good results. My question was regarding your large orders. So we just wanted to know what the update was. You had -- you secured an order of INR 220 crores in Feb. So what is the update on that?

Whatever this year, we are enhancing for above INR 90 crores, all this from INR 220 crores only.

Can you hear me?

Yes, Yes. I can hear you. Sir I can hear you.

[Technical Difficulty] Pradyumna Sir, if you can please rejoin the queue. We'll move on to the next question. It's from the line of Chirag Jain from Yogya Capital.

Sir, I just wanted to know what are the overall current robotic levels at the current plant that we have? And what have we -- that's the first part.

Sir, robotics -- 5 machines, we have done robotics, sir, high activity. Rest everything is same previous level, once it's completed all satisfactory, we can go for another machines also. In the machine shop side, only 1 we are implemented now, trial run is going on. Once that is completed, that's also be implemented.

What would be in the current percentage terms?

Very minimal. In the die casting side, we can see we reached around 20%, 25%. On machine shop side out of 80 numbers, only 1 machinery we have tried.

Okay. Fair enough. Sir, secondly, on the future robotic level. So you are targeting to full automation or it would be 70%, 75%?

No, no sir, all the machines full automation only we have running even die casting, machine shop also. We are working towards avoid manpower interaction, that's the only we can get then more productivity. No tea time, no lunch time like that, we are working sir.

Got it. Sir, last question on PV segment. So are we seeing any being affected by any slowdown on the personal vehicle segment side?

No, sir. Normally, market and ours is different, manufacturing line will never stop. So They will produce, sir.

Okay. So we aren't seeing any slowdown in utilization level also?

No sir.

The next question is from the line of Divya Agarwal from Ficom Family Office.

My first question was about the order book. So our 5 years order book is around INR 350 crores. So how much of that would be for the next 12 months? Hello?

Next 12 months, is it?

Yes. Yes, sir.

We worked out on a year-on-year basis. Hello?

Yes, sir.

We worked out on year-on-year. This year, we can complete as I told around INR 125 crore something. And next year, we can go easily to INR 190 crores. We have an order book of around INR 200 crores, INR 190 crores can be easily achievable because we have to raise the entire facility.

Okay. Fair enough, sir. Secondly, what would be the breakup of our auto versus non-auto as a percentage of revenue?

So earlier, we were in 80-20, we are working towards 60-40 sir.

So 60% auto, 40% non-auto?

Correct.

Okay. And sir like I just wanted a clarification. You said INR 9 crores is for the gas nitriding, so this for all the 3 furnaces or just 1 furnace?

One furnace -- No, all 3 furnace.

So all 3 furnace, so once we have all the 3 furnace...

One furnace INR 90 lakhs per month.

Yes. INR 90 lakhs per month from 1 furnace?

Per month, yes -- 3 furnaces. INR 30 lakhs per furnace.

INR 90 lakh per month from all the 3?

3 furnace.

Sir, INR 90 lakhs per month from 3 furnace, right?

Correct.

Okay. Got it. Secondly, on the job design work, so how much of it is currently contributed in the H1 revenue?

Which one sir?

Job design. I believe you have some revenue from job design as well?

Job design we got around almost INR 10 crores order. Now we're executing -- almost nearly 50% we have executed, balance is in process.

So this INR 10 crores, what timeline?

This year's target, sir.

Okay. So INR 10 crores for FY '25. Okay. And regarding the INR 154 crores order book that we received, is it domestic LLC or like a passenger...

[Foreign Language] our all supplies are domestic.

Okay sir, so is this a passenger vehicle customer, commercial vehicle or what?

In that automotive, 95% is passenger vehicle, sir.

Passenger vehicle. Okay.

Yes, we just recently enter into that.

Okay. And sir, just a clarification, do you not have any presence in 2-wheelers, right?

No, sir, no.

Okay. Do we plan to enter anything in 2-Wheeler?

No, plan, sir. This itself, we are getting a good support from the customer.

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

Am I audible? Hello?

Yes, yes.

So first of all, congratulations for such numbers. I had few questions. So the first was that as we had said in our annual report also, for FY '25, '26, we are targeting a revenue of roughly INR 220 crores to INR 225 crores. So are we on the same line of projection?

Yes. Because of this delay, these 2 months, that is what I just wanted to conservatively give INR 190 crores to INR 200 crores, in same line sir.

Yes, okay. And the other thing also, it is a bit far sighted, but for wind energy business, also the numbers will start coming from '26-'27, not from next year or subsequent years for the next year. So, any numbers that you can project for wind energy that what numbers are we looking? Because you have already told that you are doing some CapEx of INR 70 crores, INR 75 crores for wind energy. So what actual numbers...

Numbers exactly we can give only end of December. First week of January, I can't declare, sir. Because the negotiations are under -- almost the jobs works are completed, so we are working with the customers, sir.

The next question is from the line of Arnab Bhattacharya an individual investor.

I wanted to know few things about the business. I was going through this gas nitriding facility. So is that a different vertical altogether? Or should I see this as an enhancement on top of your die casting, like the other parts that you're manufacturing? Or is it a entirely different vertical? How do I see this? And I wanted to understand that the -- in your presentations previously, which you had shared, you had shared a split of 92% and 8% between die casting and induction heating and quenching. So is there -- like I wanted to understand this processes, is there anything which has -- what are the margins of each of these methods. If you can give me some color on that, sir. I have none more question. I will come back on that.

Nitriding is entirely new vertical, nothing related with our existing production lines. Hello?

Yes, yes, yes. And can you tell me about the...

Come again.

So I wanted to know then how do I see the margins of these 3 lines of operations at die casting, induction heating and quenching, gas nitriding?

These -- all the machines having -- nitriding can be splitted separately. But other things have a machining also together, cannot separate exactly what margin comes in this. It will be common machines will be used for the nitriding -- sorry induction heating also, the same machine will be used for other production of aluminum machining products also, there is a mix in that. Profitably, it will be better than the casting.

Got it. One more question I wanted to ask. I think in one of your earlier interviews with I think from the television while you are doing IPO, you had mentioned about that you are trying to upgrade the mold sizes of your cast. I think you are previously operating on 1 kg ones and you were looking to enter 8 kg molds, is that correct? Have we already entered into that segment?

We have already entered, I told that we already started doing 6 kg parts sir.

6 kg. And what are our ambitions at? Like wanted to understand the machines you are buying. Are these -- like you keep on saying that in order to grow beyond this or to have higher revenues, you'll keep need to doing cash CapEx. I'm just trying to understand that CapEx is for what purpose, is it just the same machines or you're upgrading your machines and getting into more like tougher operations and higher precising?

New CapEx which is required for this is not for the same machine, sir. The same machine, which is producing. The secondary operation only then and there we may be requiring new CapEx. Already, we are -- for the new order book, we have smaller tonnage machines already we decided only, same die casting only going to implement. For rest everything when you produce a die casting, this requires a lot of machining processes, secondary operations. That's part to part vary, those investment only we'll be doing.

Yes. But why are we -- like I'm just trying to understand the reason behind why you want to keep climbing up the ladder and you do not want to build parallel lines. So why do we choose to penetrate into higher molds, is because you are trying to target better margins? Is that your view? Because we could also do the same, like we could build 2 lines of 1 kg, but you are choosing to go from, let's say, 1 to 6 kg, instead of building two 1 kg lines. I just trying to understand the business reason behind that, sir.

It is totally different, so -- it is not possible if you line set up 8 lines, we can do 8 kg, it is not like that. The machine capacity itself if it is produced maybe a maximum of 1 kg, above that the machine cannot produce. If do you need 8 kg part to be produced, it's the same machine only can do. We cannot produce in a number of machines.

Yes. And you want to produce a 8 kg part -- So my question was you want to produce the 8 kg part instead of the previously produced 1 kg part because of lucrative margins or there is any other reason?

The terms, kg terms, they were the questions so I explained like that. It is -- the machine not comes to the kg terms. It comes to the tonnage part and there, I was using a 350 tonnes part that machine capacity maximum of 1 kg approximately can produce. Now I purchased 1,300 tonnes from 350 tonnes. This machine capable of doing up to 8 to 9 kg parts.

Yes. And I also request you to share the -- like I want 2 things like first of all, like the day you publish your results, I would -- it would be very kind if you like also share the investor presentation on that day. And another thing I wanted to request, sir, basically...

We'll make it.

Yes. Yes. Another thing -- if you could write your assessment -- your assessment, your own assessment of how the company did that year on the same day of sharing, these 2 things, like I think a lot of companies are doing that. So I'm not asking -- I don't want to put any pressure on you, but there are a lot of small companies that are doing that. Yes, these 2 will be very helpful.

We will give the notice. We'll note this sir..

The next question is from the line of Ankur Gulati from Genuity Capital.

Sir, how are our orders priced, for example, if metal prices go down, our revenues will go down? Or what is the impact of metal price movement on revenue?

Yes, definitely, the revenue difference will be there sir, go down, go up. There's not much aluminum and steel -- it's not -- fluctuate not too much. On year-on-year, we can easily assume -- so suddenly, within a quarter, will not get dropped, will not get increase. Slight difference will be there, the slight difference will be there in the total revenue also.

So out of total cost of goods sold, what are the 3, 4 top metals that you guys consume? And what is the percentage?

Maximum aluminum.

Mostly aluminum?

Maximum aluminum, very less steel. For the service industry.

And the pricing is also -- so when you announce an order, let's say, INR 150 crores, that factors in a certain aluminum price?

At present, what is the price aluminum -- raw material price, with that consideration only customer, if the customer purchases are the price only into volume, we announce the order.

Okay. So actual revenue will move around with whatever aluminum price is, right?

Yes.

The next question is from the line of Varun Agarwal from Networthy Financial Services.

Sir, I wanted to know what is the -- what was the opening order book at the beginning of this year in April?

For last year, we have completed around INR 90 crores, but that was our fixed orders. But before completing itself, we got an order of around INR 420 crores. It is not that today we get an order, tomorrow can execute. We need to...

No, no, no. I'm not asking -- I'm not talking about execution, sir. When we started this year in April, what was the order book size?

INR 220 crores.

INR 220 crores. And now it is INR 382 crores?

Yes.

Okay. Out of the INR 382 crores, what is the split between auto and non-auto, sir? Approximately?

Whatever enhanced business declared only from auto. Non-auto earlier we were doing 20%. And the same 20%, 25% only will retain non-auto. For rest everything new, which is going to non-auto majorly from wind, which will be declared once I confirm purchases are received, maybe next year, I can declare that.

Okay. You mean to say in this year, first half, we did not receive any first orders from non-auto?

So far declaration, same 20%, 80%.

Okay. So this first half also, we received non-auto orders?

First half, no, sir. So far, no. All the order book which we declared, all our automotive orders.

Okay. So whatever was there in the opening that itself continues from non-auto?

Correct, exactly.

Okay. So you're saying there is a difference in margin between auto and non-auto, approximately how much of the margin?

Auto, non-auto?

Yes, approximate?

Auto comparing with non-auto, non-auto is a better margin.

Yes, approximately how much is the difference?

Percentage, I think i cannot declare, it is better margin than automotive.

Just 1% or 2% difference or maybe 5% or more kind of a difference will be there?

Better than 1% or 2% number.

Okay. In non-auto, what exactly are the products that we are doing in that?

Non-auto, we are doing elevator, escalator part, a powertrain part, sockets, and some additional parts.

[Operator Instructions] The next question is on the line of Rushabh from Concordant advisers.

Sir, can you give us summary of your top 3 to 5 customers and out of the total guidance of INR 130 crores, how much would be achieved from these customers? My next question would be, sir, in the next year, you have given a guidance of around INR 200 crores, INR 220 crores, again, these top 5 customers will contribute how much? And what are the possible ways where our net profit margin will improve from single digit to double digits?

Top 5 customer was present, the same top 5 customer only will be played for the -- till next year, it is not INR 220 crores. INR 190 crores to INR 200 crores approximately. And same customer only top 1 to 5, the variations will be there. This month will be other customer, the next month will be other. But top 5 will be the remain same.

Sir, my question was how much of the total revenue from the top 5 customers? And how much sir automotive...

Top 5 customers is around 50%, 55% sir.

Okay. So sir, as you are saying that the top 5 customers contribute to 50% to 55% of the revenue, and for these top 5 customers, have they given any slowdown in the next year's forecast for the next coming 6 years forecast? And will it impact our business and our net profit margin?

Single digit to double digits, there is a slight gap, definitely that we convert into double digit. So subsequent year. That is not -- will not give an issue. The top 5 customer, as I told, the same top 5 customer will be there for next year also. The rest everything, there are a lot of customers are there, all these customers -- are ups and downs will be there. They will not come into top 5 customers. They will not reduce their business. And the revenue comes from all top 5 customers only existing customer, new business.

So sir, just to reiterate my question, how much will the business because the top 5 customers assuming that they have given a slowdown in the guidance of their revenue, will it impact our business in the single-digit margins or double-digit margins? And can you estimate it with the profit number so that it helps us to analyze the profitability of the company going forward?

You are asking any reduction in the top 5 customers?

And their impact, because of the top 5 customers are automotive and the automotive industry is facing as headwind, will it impact our profit margins which are currently near 11% to 12%, will it come down to 9% or 10%? Or will they be maintained? And going forward, what would be the taken is there is a reduction to improve the net profit margins to 15%?

OEM sale volumes goes up, goes down, my cost will never change, sir. So they are selling 10,000 cars this month, next month, 5,000 cars, my cost is same sir. They will not come to the T2 supplier to reduce any cost. Our cost will never change. That remains same, whatever the volumes are.

Okay. So sir, if the volumes remain the same, will our net profit margin increase in the next year?

Yes, yes, sir.

Sir what guidance can you give from currently 11% to 12%, how much will they improvise to?

Sir, so it will maintain 11% to 12% only because I need to see the depreciation also. It can come around 25%, 26% minimum EBITDA level sir.

Currently, EBITDA is still at 25%, 26% and next year also the guidance will be of 25%, 26%. So assuming that, the year before this was approximately 30%, but because of scaling our EBITDA will reduce. Is that correctly to assume that?

Correct. Correct. Correct.

The next question is from the line of Sahil Raj from Samdhariya. Mr. Sahil Raj, your line has been unmuted. As there's no response, we'll move on to the next question. It's from the line of [ Dahwa ] from Sequent Investments.

Sir I wanted to understand that you're telling me that INR 125 crore to INR 130 crore of revenue will be reached in FY '25, and around INR 200 crores to INR 220 crores in FY '26. so that's 65% to 70% growth on FY '25 numbers. Is that right?

Yes sir, around 55% to 60%, I said INR 190 crores to INR 200 crores.

Right. And also about the EBITDA levels and the PAT percentage, I kind of missed out on that. Could you just guide for that as well?

We can make EBITDA level 25%, 26%. That I need to come again with the depreciation, maybe minimum 10% will be that there whatever.

Around 10% on the PAT?

Yes.

Okay. And just needing more clarification on the wind energy that the care components that we are planning to do, what is the status of that as well, how much CapEx we have already done? Or how much are we going to do in next year?

So it is totally new vertical. So far, we never started that business. Only we ordered the machines, the first set of machines are coming next to September.

So you have ordered the machines, right? What will be the cost of those machines?

We have ordered them, still not have come. So not as ready, it is 16 months delivery time of those machines.

Okay. And how much -- so you mentioned that we can do the revenues for this, how much revenues are possible from this you can be able to tell the channel?

I can declare only in January as I told earlier -- only it get completed everything -- project cost. So I can declare on January the revenue from that portion. We are discussing on the service charges, with material also, the raw materials source we are looking from India. So those things -- workings are going.

The next question is from the line of Hardik Gandhi from HPMG Shares and Securities.

Am I audible?

Yes, yes, sir.

Thank you for the good set of numbers and sorry I joined the call late, so I might ask some questions which might have been already answered. But as per our last discussion, what we discussed that eventually on an FY '25 basis, we'll reach a monthly run rate of INR 12 crores. So is that still intact or have you reduced the guidance on that?

Yes, that is same impact, sir. That is what you delayed in joining. 2 was around the delay in the implementing the new machinery, otherwise rest everything going as per plan.

Understood. So are we saying that going forward in the next 6 months -- sorry, I'll ask the question. For the first 2 quarters -- sorry, or the first half, Were there any extraordinary reasons for a slowdown? Or was it mainly a business-oriented slowdown? Like was there any other one-time problems?

It's a one-time problem, sir, that is what I told. Some of the machines from Germany got delayed. So the initial investment that -- starting the production it got delayed.

Okay. So the guidance has been shifted from earlier INR 140 crores -- approx of INR 140 crores, INR 145 crores to INR 130 crores?

Yes, that is INR 125 crores to INR 130 crores, still we are trying to increase -- somewhat putting more efforts, otherwise INR 125 crores to INR 130 crores.

Margins will remain intact, like at least 9% to 10%? Correct?

Yes, correct, correct.

Understood. Understood. That's it from my end.

Thank you. Ladies and gentlemen, that was the last question for today's conference call. I now hand the conference over to Mr. Ganesh Nalawade for the closing comments.

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

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

Thank you sir, thank you all.