Thaai Casting Limited (TCL) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the H1 FY '26 Conference Call of Thaai Casting Limited hosted by AKMIL Strategic Advisors. [Operator Instructions] This conference is being recorded. I now hand the conference over to Mr. Vaishnavi Vaity from AKMIL Strategic Advisors. Thank you, and over to you, Ms. Vaity.

Good afternoon, and thank you. I'm Vaishnavi Vaity on behalf of AKMIL Strategic Advisors and welcome all to the H1 FY '26 Earnings Conference Call of Thaai Casting Limited. Today, we are joined by Mr. Sriramulu Anandan, Managing Director; and Ms. Anandan Shevaani, Director and CFO; Mr. [indiscernible], Financial Advisor and Mr. Jagabandhu, who will share the imports on the company's performance, key operational highlights and strategic outlook. Without further delay, I would like to hand over the call to Ms. Shevaani. Over to you, ma'am.

Yes. Thank you, ma'am. Good afternoon, everyone. I'm delighted to welcome all our shareholders, investors, analysts and participants to Thaai Casting Limited's earnings conference call for the first half of FY '25-'26. I'd like to begin by expressing essence gratitude for your continued support, trust and confidence in our company's journey. The first half of this financial year has been yet another phase of steady progress, operational consistency and strategic advancement for Thaai Casting. Despite the dynamic business environment and evolving demand patterns, our focus on position manufacturing, operational excellence and disciplined execution has enabled us to deliver resilient results. On a consolidated basis, our revenue operations stood at INR 62.25 crores expecting growth of 15% year-on-year. EBITDA increased by 12.59% to INR 16.33 crores, maintaining a strong margin of 26.23%, while our net profit rose by INR 14.93 crores to INR 6.18 crores with a net margin of 9.92%. These result demonstrate the robustness of our core operations and the efficiency of our cost management processes. At an operational level, our plans have become continuously achieving capacity utilization level of around 75% to 80%. Across both casting and as well as machining divisions. We continue to see healthy demand from our existing customers, supported by a steady optic across the automotive and nonautomotive sector. During the first half, we achieved significant milestone that strengthen our long-term growth visibility. We secured two major domestic orders, one valued INR 126.53 crores for supply of various automotive and nonautomotive for a period of 60 to 80 months. And another order of INR 12.40 crores for building and construction hardware company. So we executed on the time line of 36 to 48 months. Together these contract and other order book value to INR 522.79 crores. Providing a solid revenue visibility for the next 3 to 5 years. These wins also reaffirm our credibility as a trusted precision engineering partner to leading OEMs and Tier-1 suppliers across India. I'd also like to highlight an important development during this period. In September 2025, our Board of Directors approved development of securities on a presidential basis as part of a broader growth and capacity expansion plan. We allotted 12 lakh equity shares raising about INR 12.24 crores issued 15 lakh convertible warrants at INR 101 each. From which we already received INR 3.78 crores in the first tranche and allotted INR 15,30,963 unsecured 12% CCD, raising about INR 15. 46 crores. These convertible into equity shares within 18 months time. In total, we raised approximately INR 31.49 crores through this exercise. This capital infusion gives us the financial flexibility to strengthen our operations through investing capacity expansion to enhance automation, upgrade technology and by efficiency through backward integration. For me personally, this marks a meaningful step forward in building a stronger foundation for company's next phase of growth. Die casting has always believed that group covers comes from precision and precision comes from the purpose. From our early beginnings as a die casting unit to becoming a full-fledged in sharing solution provider, our journey has been covered by innovation, integrity and perseverance. Today our products, whether it is engine, transmission, EV battery and steering assemblies, some backbone of industries that power mobility, sustainability and industrial progress. As we look ahead, our priorities remains very clear to certain profitable growth through efficient operations and capacity optimization, to expand our customer base and industry reach. India's manufacturing ecosystem is at inflection point with rising localization, strong OEM demand and increasing global trust in Indian engineering. The opportunities before us are immense. At Thaai Casting, we are determined to leverage our technical capabilities, customer relationships and financial discipline to capture these opportunities. Before I conclude, I want to take a moment to thank our employees for their unwavering dedication, our customers for their continued confidence and their shareholders for their heads up belief in our vision. Every milestone we achieved is a collective success built on precision, powered by people and guided by purpose. We remain committed to creating long-term value for all stakeholders, strengthening our foundations and continuing our journey as a company defined by precision that powers progress. Thank you. Now we can proceed with the Q&A session.

[Operator Instructions] Our first question comes from the line of Damodar Baliga from DB Investments.

Sir, first, I have a question regarding the GST reduction. Is it -- are you seeing improvement in the orders inflow from the automotive industry for our [indiscernible] [6. 36] work, which we are building? Could you able to hear my question?

Come again.

Sir, what I was asking is the reduction in the GST for the automobile industry, has it anyway increased the order inflow for our company? And I think madam had shared 2 orders, if you could repeat those 2 others again.

This is not reflecting to us because when the recession came also, the same production was running by the OEMs. Maybe they'll be very happy to clear out the inventories, the lines which is running, it will be run continuously even the recession or any peak volume is like these additional volumes comes also. So like they cannot increase the volume suddenly. 2 minutes per -- only to per month. So whatever the volume that only they can produce. They are now planning Hyundai in Pune, one more plant, like this, they have to expand only the volume category. But we are getting volume for the sale. What are more increase in sales, all the inventory will get very fast and closer, they're planning for further expansion. Kia also expanding, Hyundai also expanding. In Pune, almost they started the plant operations.

Possible to share that 2 orders that madam had shared in her introductory speech?

Two orders?

She said that the company has received some 2 orders.

Yes, sir, the one order valued INR 126 crores is of domestic customers. We are catering the stating lease. And the other one, the INR 12.43 crore amounting is for the construction hardware components, both are catering to the domestic customers.

That is Canada based company. They were manufacturing in China. So they are shifting to India. So those business, we got [ award ] also.

Okay. Sir, this INR 126 crores is executable over how many years, sir?

The hardware industry...

Is 36 to 48 months approximately.

That is short term. But the other one is 3 months.

Sir, my second question is this regarding gas nitriding, you had in the last call mentioned that 2 are already in the commercial run and the third one was under the validation. So my question is, one, what is the current status? Is there any revenue generated from this gas nitriding facilities in H1? And how much we can expect in H2?

Gas nitriding, the third one also started running. H1, we did service charges around INR 4.5 crores. We are expecting maybe INR 6.5 crores to INR 7 crores in the second half.

Sir, you had said the expectation -- EBITDA margin expected from this is around 14% or so. Could you be able to achieve that? Or would it take some time to achieve that?

Yes, we are achieving change.

You are achieving. And you had also stated that you have received another 3 more furnaces to be installed. So what is the status on that?

Yes. Our customers purchased another German company in India that is near to Chennai. So for that they asked to put another 3 furnaces under construction. So earlier before March. So customer construction is getting. So on June, July, it will start another 3 furnaces in line. Their manufacturing activity, everything earlier it is before March, summer construction is getting slightly delayed. So they will be taking from us from June as well. We'll be ready by March.

Okay. Fair enough. So now you said H2 is INR 6.5 crores to INR 7 crores from the earlier 3 furnaces. So that means can we expect around INR 14 crores to INR 15 crores annual revenue from 3 furnaces?

The INR 6.5 crores is including that next 3. Annual revenue for 3 furnaces around INR 13 crores.

13?

Yes, 13. INR 12.5 to...

INR 13 crores from 3 furnaces, right?

Correct, correct.

So from the H2 of next year, that is FY '27, when you have all the 6 furnaces running in full steam, so we may expect around INR 13 crores itself in first half, right? I mean, second half -- sorry, second half itself?

13 plus another 3 furnaces as well.

That's what I'm saying. Because that will be commissioned, let's say, you're saying June or July, I'm taking that you will start supplying to them from September onwards. So for H2 of next financial year, you should be able to generate close to INR 25 crores from gas nitriding itself, correct?

Correct.

That is very helpful. second is about your planetary gear machines. So what is the status? Anything commercialization is -- are we nearing or what is the status, sir?

Shed is almost completed. The final stage of completion of shed there -- active shed there. So that completion was [indiscernible]. So 3 machine already we received it, another 2 machines yet to receive. 1 is under sailing from [ Japan]. All machines from Europe. So only one more is to start end of November. So we target everything in place by everywhere. Installation will completion everything. We are trying to complete by March, April, we should have to make -- send the samples under the approval process, everything.

Okay. So when can we expect the complete...

Maybe 1 or 2 months here and there delay because of the European this December holidays. A lot of gaps we are facing. Maybe we are targeting on April.

Sir, let us take you would able to start from July only, taking care of that an additional 2, 3 months for whatever the DA is getting approvals or getting the machine and. So for 9 months, I think we have orders in hand. So once you start running, how much we can expect the revenues in FY '27 from these planetary gear machines?

Actually, that volume, we can go around INR 40 crores annual volume. Slightly tricky because we want to start from even, as we said, April, May itself, we want to start. So slightly any approval delay comes, it will go up to July, August. So only that is the difference. Otherwise...

So taking all that in account we can expect around INR 25 crores?

It is not the development part. It is already they're importing [indiscernible] because otherwise their line will get stopped. They will once the confident level from Thaai Casting the shipment and cost going to them and then assembly is everything fitting okay. They will be stopping them. That will come to know by maybe once we supply the initial pilot batch. As you said, maybe 2025 is possible.

Perfect. And how much margin you are targeting in this segment, sir?

That is same like [indiscernible].

So it would be at the same line?

Yes.

Okay. Sir, the CapEx the CapEx for both this nitriding, as well as this planetary gear machines was already taken into account earlier and you had paid advance and all. So for any future CapEx that you may plan, do we have to again raise the money? Or is the one cash flow is sufficient and two, you can take some more debt to expand in or getting into any other new segment?

So next year, definitely, we'll not be going for any CapEx because next year, the entire full year we'll be concentrating whatever we have invested. So that will be fully comp. But the discussion definitely will start next year because there is a Wind exhibition has happened this month beginning in Chennai, it was really comparing the whole year, this was very good inquiries, and we also parted in vendor exhibition start. So they started discussion even that time itself. So we can think of next year for a further expansion. So once we definitely come to know what they're asking, what will be the CapEx. So definitely, that will be postponed to subsequent years.

But in your core business of aluminum die casting in spite of receiving these 2 major orders, you don't foresee any more investment in that?

See, new customers aggressively we are not going. Existing customer, new business, of course, we cannot say, no, that we are keep getting the orders because now existing place where we are having casting industry, the space is also almost full. So and -- if you see the further business we need to create that facility, again cost land building. We cannot rent that because home and power everything is a huge cost. So time being, next year, we are not considering any CapEx investment much. Any small, small machining investment, we, of course, then in the require for existing customer, we need to go, but not a big enough on the cash side.

So you feel next year the amount to be spent on the CapEx would be minimal?

In this?

The CapEx to be -- in the next year that is FY '27 would be minimum?

Investment will be the subsequent year.

Correct. Correct. Sir, I think you had given a target of around INR 170 crores for FY '26. Now we have done for H1 INR 62 crores. So do you still feel that INR 170 crores is within our reach? Or is there any moderation to that?

We have already -- after that, we have received an order. Only one project for Brazil put through our Indian customer that is slightly delayed by 7 months. That is also I don't think it will affect much on that. We are working to achieve the same.

Okay. So keeping that in mind, can you do around INR 150 crores to INR 160 crores, sir?

Next year only?

No, no, no. I'm asking for FY '26.

This year this year.

This year, yes. Because last year we have done INR 122.

This year we are considering maybe from last year, maybe another 20% because of these delays, as supposed to start by this -- now they postponed it to July now, next year July, that is one of the biggest volume for what we've got an order. This we developed in 2024 beginning itself completed everything. So for other some assembly parts delay, the project got delayed. This is for...

So you're saying so that means 20% on NR 122 crores what we have achieved the last year?

Yes.

Okay. Okay. And maybe FY '27, there would be relatively better growth?

Yes, sir.

Okay. Sir, even in the H1, the margins are in a very, very good level, 26%. So going ahead with both gas nitriding as well as this planetary gear machines contributing higher margins. So we should be slowly steadily the margin shoot to move upwards only.

I think it will be maintained same slightly higher not much because next year onwards subsequently, my casting volume will be very high there. Revenue on the casting side will be [indiscernible]. So that will take away these major margins. We can't focus future also move into these type of specialized process. Let's take the casting business, automotive in business. We want to not to say no to our existing customers, not to too aggressive, only specialized products, any criticalities like this, we want to.

Okay. Okay. Sir, in your -- the aluminum casting brand, you have this index and hardening also the facilities to do the industrial hardening that also gets you very good margins. Last time also, you were saying it is at less than 60% capacity utilization as one of the customer who has started doing their -- for their products in their own factory. So that is the reason you said this capacity utilization has come down. So you were to look for some new customers or so. Anything you could achieve? You could get any new customer or is...

We have recently added 3 customer GMV. 3 new customer in. One is business other 2 is domestic, big customers only. So the export will take there in R&D stage. They have identified as the induction source for them. There are a lot of development for them forging, machining, everything. So all this induction will be happen from our side. Other 2 local supply, already we submitted samples for 2 customers. Because this size of kilowatt machines very limited machine in India nobody has. So it is only -- we have a lot of scope for us to get the new business. We've already started marketing th induction only.

So based on whatever you are interaction with these new customers, can we expect maybe 70% in Q4 onwards, that is January onwards?

Two customers remain existing volume up to 70% of the -- these 2 customers will give a maximum of 20% of the plant utilization planned [indiscernible] Not much volume their service gearboxes and service cost they're giving to us. So another development happening in this induction [indiscernible] that we are doing R&D for that. There's 2 technicalities anyway, I'll tell you. The gear segment we want to do teeth by teeth we are already modification our -- started modification our machine. Once we have -- there is a different gain that interaction. That is already -- the R&D levels are going in German, sorry, in China by German teams. So we have also through all the videos and everything is happening in the developments. So we also want to participate that development as German is insisted as existing customers as we also start doing that R&D. We already initiated. So maybe another 6 months' time, we'll be come to some stage that we can do sampling. So there is some investment also is that modification of machines, though technical item it is. So once that is we need to buy another number of machines in induction only, like that it will. I mean, personally I can explain this that when you see the part you'll understand very better.

Okay. So what you're trying to say is live alone increasing the capacity utilization of the current machines, you're saying the situation may arise where you may have to add one more new mission, correct?

Not one more, few more. Because that process is happening in different method that is too expensive process all the way it is happening. We are converting into induction to reduce the cost of the manufacturing of the car. It's the main gear box part only. For the manufacturer it will come down, that R&D is going definitely possible R&D. So we also want to -- we have a capacity for the machine capacity only we need to do modifications. Already, we have designed, almost we completed through German ports. So we want to do ourselves, but we don't want to take any other. We want to do ourselves to compete with [indiscernible].

Okay. Sir, since you -- the workload on the aluminum die casting was increasing. I think you had shared that you want to take a person at the senior level to manage day-to-day operations, maybe CEO or somebody. So anything happened in that regard?

Plant level to see the sharp low level we have taken. CEO as already from Tier 1, we have selected, we have send the appointment order also. It is a long process 5 months time to join. He's joining us on February end, or March beginning. But appointment order has been sent. So he's in best OEM he's working. You want to just shift to south. So we have aligned almost 3, 4 interviews has happened. So we have aligned to go together and then he's joining us.

Okay. Very nice. So that means to that extent, next financial year, you will be free to do all this development and ...

Already developed the parts. I'll be concentrating only the new products. As we said now, we have very tight schedule only, that will ease out our existing regular production.

Okay. Sir, again, in the last call, you talked about getting approval from the defense. Any other new or latest development in that?

We got approved. Earlier, when I do itself we got approved as a vendor. So recent days, we supply the parts also. They are very happy with our samples. Now we're getting the purchase order. Shevaani, when they are expecting the purchase order?

In a week time, we are expecting the purchase order for the trial order.

I have put Shevaani as a dedicated single contact for them to...

Okay. Very nice. This trial order would be of smaller value than -- so once they test that and get convinced, then only they will release the bigger order, correct?

Yes.

What I did was to their order, I made a sample, and I took them and showed. They were very happy, nobody put without order that make the sample. So now they are releasing the trail order. Once we supply then we'll become a regular schedule afterwards.

Any possible, sir, how big is this value could be, let's say, in the next financial year?

We are awaiting the POs, so post the schedule we'll be able to disclose the market value.

Very, very small volume to each items total 23 items they will give. So only 1 item only to give the pilot lot purchaser once we receive. So number of quantity per development items, we don't know. So far, they're not given what is the annual volume. We could not predict it's new to us.

Okay. Yes. Okay. Sir, my last question is the depreciation and interest cost for the current year FY '26. So whatever you have shown for H1, can we just take it double and calculate whatever this one? Is that is correct, this one, like depreciation could be around INR 9 crores and interest also around INR 9 crores for the full financial year. Is that is, right?

Yes, correct. Depreciation will increase next -- Yes, correct.

Maybe once you capitalize those furnaces and other things, maybe next year, that will be more.

Yes.

Our next question comes from the line of B. Sinha, an individual investor.

So my first question is that your order book stands around INR 500 crores. So can you please break down how much of this relates to your auto versus non-auto and expected execution timeline for that?

Total revenue, INR 500 crores you are telling, right? Order book is all automotive. Shevaani, I am right, whatever is declared.

The announced order book entirely is for Automotive segment and the execution timeline varies from 36 months, 60 months to 80 months.

This lease order book once we received is all agreement base, we are working on other things. Once we received a purchase order of others, that also will be declared, like gear shaping or other. Yes, my only with the purchase order we accept the order.

And what is the visibility for FY '26, '27 revenue realization from the current order pipeline?

Shevaani, did you calculated both of this?

Around 20% to 25% from this hedge fund we are expecting.

So any large exports on new platform models expected in the next few quarters?

For automotive, we are working existing customers, new projects. We are expecting maybe a couple of days or maximum of December end. We'll be getting some good orders. 2, 3 models are launching here in Hyundai. Those we have awarded. So yet to receive the confirmation from the customers.

We have our next question from the line of Bhagwat from Prosperity Wealth Management Private Limited.

You mentioned about postponement of an order. What is the size of the orders which got postponed? And what is the reason for the postponement?

Shevaani?

The postponement of the orders for this financial year? That's the question.

My question was -- so my question was you mentioned about the postponement of orders. So I want to know what is the size of the order which got postponed? And what was the reason for that actually?

What is the?

What is the reason for which the order got postponed?

See, there are a lot of parts to be developed before. There are other few parts, we have to get delays. Entire assembly is going to export to the manufacturing plant of the car in Brazil, entire assembly plant is exporting from there. We don't know exactly which part is getting delayed, whatever it is. It has been twice postponed. So this was postponed earlier for '26 January, now it is July '26 it is postponed. Now they are every 45 days audits are going on because volumes are huge. All the machine will get tight, we cannot use it for others because of the quorum violation is very strict in automotive. So with this series, there won't be any postponed for this.

Okay. What was the size of the orders?

Can you check the order value, Shevaani? Shevaani, if you have that excel in that major volume...

Yes.

You know the customer name, right?

Yes. The cumulative order value for 60 months is INR 91 crores.

INR 91 crores is the cumulative, and the...

For the execution of 60 months, the total order value.

Okay. So part of this order, is that postponed to the next year?

Yes, yes. The depreciation of this product is getting delayed.

So no, I completed development project in '24. Two years before because the validation is very huge time, because just like this, and before we completed, we expect that this middle, so it is postponed to January, now it is postponed to July.

So I wanted to understand this total cumulative is INR 91 crores. So out of which 40% of this would have been expected for this year, which was postponed, right, the part of this?

Yes. So for the Jan, Feb and mostly 3 months would have been postponed for the next year?

So this starts only from July.

Okay. So considering this you mentioned about 20% growth...

Completed in 60 months. Because safety manner will be growing first 3 months, 6 months, then we ramp up the number of orders.

Okay. Okay. Understood. So considering this, also, you mentioned about growth of 20 percentage in revenue for this year, seems to be around INR 150 crores. Are we confident of achieving this INR 150 crore for this year?

Yes, this percentage considering this postpone.

Okay. And how is the outlook for next year, FY '27 in terms of revenue considering our planned CapEx also?

Whatever declared order is everything is confirmed orders -- because of this delay, any -- did you calculate it Shevaani. What will be shortfall, because from July, another 3 months will be a lower volume that also schedule has been received. Can you send a mail? We'll reply through. [indiscernible] recent days these are happening. We're closely working with them.

Okay. Okay. So just last question from my end. So current borrowing seems at INR 115 crores. What is the expected fixed models and the rate of interest?

Borrows?

The dates, [indiscernible] borrowed...

The borrowed funds, the rate of interest?

Yes, yes.

7.95 my banking rate of interest. The other bank is 8.3%.

Okay. We are at INR 116 crores. So what is expected fee for us? The expected fee for us? Is this a maximum level, INR 116 crores or are we expecting the borrowing should be higher going ahead?

No. For this project, we are closing this borrowing.

Okay. So this is the maximum borrowings?

Yes.

We have our next question from the line of Mayank Agarwal, an individual investor. The current participant seems to have dropped from the queue. We will proceed to the next question from the line of [ D. Sinha ], an individual investor.

So staying on the same line on the order book. So why isn't your order book and the revenue hasn't translated to the H1 performance?

Come again.

So I was staying on the order book numbers. So why hasn't that your order book has been translated into stronger H1 performance? Are there any execution bottlenecks or some customer side delays impacting the conversion rates?

Just I was explaining in the previous call, it is customer side delay.

So, it is just customer side delay.

Detail explanation is just customer side delay.

Okay. And also one more question that your top line is Hyundai, Kia, Maruti Suzuki. So how much of the total revenue is concentrated among these few OEMs?

Presently, we are with them around 75% to 80%.

[Operator Instructions] We have no further questions at this time. I would now like to hand the conference over to Ms. Vaishnavi Vaity for closing comments. Over to you, ma'am.

Thank you. I would like to thank the management for providing valuable insights and guidance, and thank you to all the participants for joining the H1 FY '26 Earnings Conference Call of Thaai Casting Limited. We truly appreciate your time and continued interest in the company. For any further queries or clarifications, please feel free to reach out to us at [email protected]. On behalf of Thaai Casting Limited and AKMIL Strategic Advisors, we wish you all a pleasant afternoon, and thank you again. Stay safe. Take care.

Thank You. On behalf of AKMIL Strategic Advisors, and Thaai Casting Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.