Servers parked, e-mobility written off, CDP restructuring formally initiated.

My first question is on the fundraise that we have announced. If you could just let us know, you know what kind of asset turns, margins or return on capital will be there for these new businesses? Since these are new businesses, any colour on this will help? And what is the overall capex plan on a consolidated basis for FY27 or '28 if you have any thoughts?

Yes, hi Kapil. The overall capex will be in the INR1,800-odd crores range. This is the organic capex that we will do in India. And this is spread across forging, machining, heat treatment and, you know, related quality control and other related assets in the forging and machining space, ring rolling space. And these are assets that are not for any one industry but can be used in a variety of industries. They will have a significantly, let's say, accretive capital output ratio and very good margins. So we have business tied up and that will give us enough ramp up and then we will also tie up more business. Additionally, the energetics plant is a facility we're setting up to fill shells and to produce energetics and solid propellants, etcetera, in the future in a new facility coming up in Andhra Pradesh.

Yes, thank you sir. And second question is just on the outlook for some of the key segments if you could talk about CVs and PVs both for India and overseas and also the non-auto segments. And we note that, you know, the growth in CVs and PVs this quarter for the domestic business was below the industry growth. Were there any supply challenges if you could just give some colour there also?

Yes, honestly, there were supply challenges towards the middle of the quarter when the steel sector all had issues of labour and getting supplies. And also an energy issue when the Iran war had really hit a crescendo in the beginning, and it took us all some time to switch over from one kind of fuel to another and these are the challenges that you face. But in spite of that, I think we've done well. And going ahead, I think we will do even better.

Sure, sir. And on the outlook for the different segments?

So I would say that all the segments have a strong outlook. India is fairly strong. US is very strong. Europe CV is strong. Europe PV is not as strong, but I think it's not weak either. If you saw yesterday, GM has raised their guidance again. So clearly, you know the economy in the United States is doing well. India is doing fairly well, so I think these two are the key markets for us.

Hi team. Just to be clear, the entire capex of INR1,800 crores is all non-auto, right?

I'll answer the first question you asked. It is a combination of auto and non-auto. There is -- in the auto there is both forging and machining and non-auto there is forging, ring rolling and machining.

What sort of asset turnover to assume on this number? Any guidance?

I think it will be above 1.5.

Yes, hi. Thanks for the opportunity. Firstly, just a clarification, this INR1800 crores of capex that you mentioned, the INR2500 crores fund raising that you're talking about, future growth opportunities, will that be will that investment be over and above this INR1800 crores or this is all part of the similar investment plans that you have?

See this INR2500 crores is for this current capex and then it will also give us a strong base for any additional capex that we may need for further growth.

Okay. So then my second question is that, given that your balance sheet is still quite strong and net debt to equity, net debt to EBITDA is quite strong, I mean, just trying to understand, you know, why are you doing a fundraise?

No, because we are very conservative when it comes to our financials. We like to have cash on the balance sheet, at least INR2,000-odd crores of cash on the balance sheet. And it's good, it will help us accelerate our growth going forward. Plus there is some, M&A opportunities in India and we have found that the M&A opportunities that we have, undertaken in India so far, whether it is JS Auto or K Drive, are proving to be very fruitful and such opportunities, are arising and it's a good time to look at them.

Sure, sure. And just secondly on your defense or the KSSL business, I know that it tends to be very volatile on a quarterly basis, but the margin outcome in this quarter, seems to be a very strong one. So anything that you can help us understand, you know, how should we think about this margin and how should we think about the future?

The margins are all a result of the product mix. But as we have mentioned, the margins on a steady state annual basis we are targeting in the 22% to 23% or so range.

Yes, hi, thanks for taking my questions. Just continuing with the margin guide that you mentioned this 22% to 23% is that you mentioned at an overall level is that how we should read this guidance?

No, that is for the defense business. That's our full-year kind of a range.

My first question is again, on the similar lines the newer, opportunities that you call out aerospace, data centre, semiconductor? Is there some sense that you can give, you know in the next 3 to 4 years how do you see the build out of these businesses, you know maybe a bit more colour on these three aerospace semiconductors and data centres where the scale of operations...

I think, I can talk about the aerospace and semiconductors and my colleague Subodh can talk about the data centre side. On aerospace, we will double our business in the next 2 years or so. And then on the semiconductor side, I think we are aiming, for something in the region of 30, 40 million of business in the next 2 years organically, and then we also have to set up some machining facilities which will then allow us to grow that business almost double it. So that's the kind of business that we're looking at to doing in the semiconductor space. I will let Subodh answer the question on the semiconductor and related sectors.

Sorry, how big is aerospace at the moment, you said doubling, where would that revenues be right now?

It's about INR400 crores right now.

And what is the scale again of data centres right now in terms of revenues?

On the data centres we'll actually call it energy business. We expect to double in the next four years. We already have most of the contracts in place. Long-term contracts in place. So we are in the process of adding capacities and all of that. But we have a very strong global position today on this.

And last just quick if I can squeeze in, on the margins you mentioned 160 basis point impact taken in this quarter. Is it fair to assume that this reverses immediately or this would take time because the conversations like how do we think about the more normalized margin for the full fiscal year?

So it would be better than quarter 1, but also you need to mention sorry you need to consider one specific point is as we start getting recoveries from the customer optimally it has an impact on EBITDA. Because there are changes in denominator and numerator also. So optically, you know, you might still look at little better margins, but it will not be fully reflective of back to 28% because, it will add to topline also and it will add to cost also. But it will compensate the full margin per piece -- per product sold. Also per ton, yes.

Yes, thanks for this opportunity. Amit, I just want to get your details on this Marine Gas Turbine Generators win. How do you see this? This is going to be auxiliary equipment but at the same time pretty challenging in terms of technology. So what is the capability you have in-house to develop it? Do you need to have a joint venture? How is it going to progress?

We have already developed this product and it is now going into testing. We have a very strong relationship in delivering this product and a range of turbines for naval applications, ranging from 1.25 to above 25 megawatts.

And will it be predominantly for defense itself or it can get into commercial?

No, it can get into commercial also, it can even go into power gen, it can go into a lot of sectors. And it's multi-fuel.

Okay, and within this, if you look at the content per se, how much group can itself supply versus what you need to source in terms of...

Yes, I think in the beginning the generator will be sourced from outside, but the that's the electrical generator, but the entire turbine will be made by us.

Okay. And the second question is with regard to the AP plant which you are opening up for the substantial investments. Is it going to be predominantly for new areas or how are you looking at it?

So, AP is going to be a propellant and explosive facility for filling ammunition and for making explosives.

But can it open up the naval one open up a completely new stream for you both in terms of global as well as domestic?

Absolutely. It's a huge new opportunity. See in the naval side we were originally only on the shafting and propellers. Now we'll be on the power gen also, and then we will also get into the flight side. So, we will be on the entire value stream of the naval side. So, the content per ship will go up dramatically. And you know, 140 new ships coming is a lot.

Hello, good evening, sir. Thanks for taking my question. Just a bit of housekeeping question on the CDP Bharat Forge restructuring. Post the restructuring is done, what would be the form of this entity? Will orders be shifted away, will margins improve? How should we see CDP Bharat Forge post the restructuring?

So, post the end of the restructuring that entity will not survive. It will not exist and part of their orders are going to be transferred to us, and that will be provided shifted out from India at a good margin. So that's really what's gonna happen.

Right, so all the current orders would be, would be intact, they would be shifted to India or other entities?

Not all, because they also have certain orders that are getting phased out or products that are getting phased out. So, the remainder of the orders will move here. But it's a sizable amount.

Given the kind of capex what we're doing towards the new areas and the existing business as well, and the nature of the business in terms of the order wins and the execution, is it fair to assume that FY28 also could be a remarkably strong year from you? Generally the way you from your vantage point, do you see the momentum continuing into even '28?

I would say so, yes. I would say based on what we see right now, I think '28 should also be a strong year.

Yes, thanks for this opportunity. I joined a little late, so not sure if this is already answered. So just wanted to understand your commentary in the media interview in very detail. I believe there was some mention about Q2 being strong in the sense that we might take price hikes and there might be some reversal in margins in Q2. So, if you could just provide some more colour here?

Yes, so Q2 would be better than Q1, considering the discussion with customers on the price increase and the volumes. And the one-time impact that we have had in Q1.

Right. So, how will the margin trajectory be like, will there be a one-time jump in Q2 and we will be back to the 28% range or will it be gradual throughout the year?

Yes, it would be gradual because earlier we explained that you know even though we get recovery from customers, from a mathematical perspective, you could see... See, the numerator goes up and the denominator goes up. You understand? So it would be a gradual improvement in margins. But the margin per ton will come back to its normal levels.

Hello. So, I want to know that like have you got license for your AP plant that is for explosives, and additionally the capacity would be same as to fill your existing empty shell manufacturing or it will be bigger than that?

So initially we are setting up a facility to manufacture and fill a certain amount of shells. But this is a modular facility, so you keep adding lines, you can add fill more and more shells. And we have not yet got the license, we have applied and the process is on.

Hi, good evening and thank you for taking my questions. First question is just around the European business. So just want to understand what could be the timeframe for a shift of some of the business we look to shift manufacturing from CDP to India and also just related on the other two subsidiaries, Aluminiumtechnik and Kilsta, under the new India Europe FTA proposals, is there opportunity to shift some of that business as well to manufacturing on Indian shores?

So, let's first talk about CDP. Our timeline for the closure is between second to third week, or third quarter of next year, or Q3 of '27, calendar quarters. Well, business will of course have to move at or before that time.

Got it. That's helpful. Second question is this around the fuel and the manpower situation. So, you did mention that going forward, we will see an improvement in most of your ability to get supplies. I just wanted to check on the manpower side, are we sort of back to normalcy now?

Almost. Not, not fully, I would say we're back to about 70% to 75% of normalcy. There are some amount of migrant labour or casual labour that has not come back. The fuel situation is under control. Only problem is in Maharashtra there is an energy price hike.

Yes, hi sir. My one question is sir regarding restructuring of our business, so we have taken a provision of INR330 crores. This is a one-time expense or again you need some provision for Q3, Q4?

This is the cost for the manpower redundancy. But this cost has now been finalized, it is not going to be paid out today, but this will be paid out over the next, nine to twelve months, or six to twelve months, as the people get released.

Sure, I was just about to ask going to ask about that. So, K Drive, the margin seems to have come off any thought clear, when...

No, no K Drive, K Drive will grow both in scale and margins, we are on track, K Drive is going to perform very well. We have a lot of new business coming and we are also going to build a new plant for K Drive in the northern part of India for one of our most esteemed customers. And that will provide us significant growth going forward.

Thanks. And sir lastly on the US manufacturing operations, when the operations normalize, what kind of margins can we expect in this business?

See, the steel will be at about 12% and the aluminum EBITDA margin can be in the 15%, 16%. Hopefully next year. I'm hoping to get, let's say we'll move directionally in that direction, and we want to get there sooner than later. But the one -- I want to explain one problem in the US and that is the tariff on aluminum, on raw aluminum is 50%, because it all comes from Canada. US does not have any smelters. But components can come from certain countries at even 10% to 15% margins, problem is that today.

Hi. Sir, I had a question about your losses in US operations. Can you tell me what is the reason, although the revenue is up as compared to both the periods?

So the reason is that, our steel forging business had a major maintenance breakdown, and we had no production for almost 3 months.