Thank you very much. We will now begin the question -and-answer session. The first question is from the line of Kapil Singh from Nomura.

Congratulations on a strong performance for the quarter. My first question is on EV orders. This INR 300 crores orders, which you could talk about what is the profile of customers here? Are these leading 2 -wheeler or 3-wheeler companies? And what is also the type of products mainly where these orders have come from?

I will only say this, these are global companies, manufacturing, electric vehicles and electric vehicle products. And our orders are to supply them components and subsystems.

Sir, is it possible to share some details like which segments they ar e in this? Which...

I can't share any more than that right now. It's not 2 and 3 -wheeler, okay, It's definitely not 2 and 3-wheeler. That's all I'd say.

Understood, sir. And sir, you also talked about repowering business for CVs. We also hear that the government is very keen to electrify buses. So in case of buses also, is there a opportunity for repowering the buses?

Yes, we are already running POCs -- I mean we are already doing repowering for certain customers wit h whom we will run the POC. And this is a completely made in India solution, designed in India, engineered in India. So I think it is a good solution for a country like ours. And that is something that we are focusing on.

No. But if you loo k at some of the manufacturers of CVs, there has been a destocking that they are doing because of inventory levels. So I think we're in line with that in India. And globally, we have lots of new programs that are coming on board, new market share that we h ave won and new products that we have developed. So that's allowing us to grow our overseas business.

Sure, sir. And lastly, if you could talk about the PV exports, we've seen a very good ramp up this quarter. So which geography are you mainly seeing this ramp -up? And through the year, should we expect further ramp -up in revenues from this level?

So on the PV side, we will expect to see growth continuing because we have a lot of business that we have won, where some of it is alrea dy ramped up, some of it is yet to ramp up. Some of it got affected because of the current problems that are being faced in the US, in the vehicle market. But we expect to see the PV sector grow for us globally with a large part of the growth coming from e xports and from pure Indian OEMs.

Thank you. Next question is from Amyn Pirani from JPMorgan.

Yes. My question was on the US aluminum business. Losses have been coming down quite sharply. But you also mentioned that you are already hitting 50% utilized levels. So what is the kind of utilization level, which we should consider for a breakeven for this kind of business?

No. See, the breakeven year is a combination of not just utilization -- I mean not just capacity utilization. It also needs the pricing to come into effect, the repricing. So it's a combination of the two. But at 70% to 75%, we should be able to break even with our pricing having been adjusted.

Okay. And over a period of time, is there an oppor tunity to bring down this breakeven level like over the next 2 to 3 years or...

Once the second phase comes into place, yes, because your fixed costs will get amortized across a larger amount of product s.

Okay. That's helpful. A nd on the defense side, we had seen a very strong uptick in KSSL revenues last quarter. This quarter also, there has been an improvement. Given the order book, can we expect a very sharp quarter -on-quarter ramp-up going forward? Or is it like a step chang e and then it will stabilize and then grow from there?

Going from INR 300 crores, INR400 crores of revenue to over INR1,000 crores is quite a large jump. And I would say that whatever we are doing now is quite a large jump. Please remember tha t these are sectors that are very -- let's say, they're not easy sectors to export into. And they have their own procedures in which they work -- processes and procedures in which they work. So I think we are set for a good medium to long -term growth strat egy here. And you will see that as we develop new markets and new products, this will only continue growing.

As I said earlier, it's going to happen sooner than later, the process is -- I mean it's WIP rig ht now, the whole process so it's -- I can't say anything more than that.

Next question is from the line of Jinesh Gandhi from Motilal Oswal. Please go ahead.

My first question pertains to clarification on the EV orders which you have referred to. Given it's stand -alone, would it be largely for the forging components or there are any electrical components also there?

I have already shared information than I had to.

Okay. Secondly, when I look at the capex at consol level, it's almost INR 300 crores -plus higher than the stand -alone so can you give some flavor on where are we doing this capex at subsidiary level?

So we have capex going on in multiple places. We have capex going on in our defense business. We have capex going on in our aluminum casting business, aluminum forging business and our EV business.

Okay. And the US Phase 2 expansion is effectively -- are we doubling our capacity there? Or is it lower than that?

Yes, we are.

Okay. And by then, it will start operation?

As I said, operation in '25.

'25, okay. Got it. And lastly, if you can share where we are in today in terms of revenues from oil and gas, defense and aerospace. I believe all of these particularly defensive...

I would like to share that information only on an annual basis. But if you look at our overall industrial revenue, it' s growing and it's growing. Thanks to our de -risking strategy and our new product development strategy.

Right. Surely, I mean, clearly, the defense and aerospace are now delivering quite rapidly. So no worries, will take data at the end of t he year. Thanks and all the best.

Thank you. Next question is from the line of Arjun Khanna from Kotak Mutual Fund. Please go ahead.

Congratulations on a great set of numbers. Sir, my first question is on the European operations. We've stated in the opening commentary, we are at 70% utilization, and you look at EB ITDA margins at 3.5%. So as we scale up, what is the peak utilization we could reach? And how do you envisage the EBITDA margins play out over a period of time? Amit Kalyan i: Look, as I said earlier, our goal for our aluminum business is to take our EBITDA margin to the mid-teens, okay? The steel business is a 10%, 11% EBITDA business. But we are going to do some restructuring there in terms of new products and more value ad dition, which will allow us to increase our EBITDA margins there as well. I don't think you have to look at capacity utilization only as the driver. It's going to be a combination of cost value addition and capacity utilization.

So essentiall y, this is something that's probably two years out or probably something longer as we prototype only two products?

No, no. This is something we have to achieve by '25.

FY '25?

Yes.

Sure. Sir, the seco nd question is on our PV export business. We have obviously scaled this up really well. And historically, at least the understanding on the Street was that this is a lower margin segment, but with higher growth here, we have seen margins also improve. So w ould it be a fair thing to say that this is not more than our overall margins on the PV business at this case?

I think we have managed to balance our margins with productivity and with product mix and valuation. So we will always focus on doi ng things that are value accretive to us. Obviously, we don't look at, let's say, return only as EBITDA. You have to look at returns as return on capital employed and not purely EBITDA, but I think even the EBITDA side has been performing quite well right now.

Sure. Just a final question. In terms of defense on the stand -alone side, would we be breaking out because in KSSL we've done roughly INR 300 crores, how much would have been the revenues from the stand -alone business in defense?

I think about INR 200 crores.

Thank you. Next question is from the line of Pramod from InCred Capital. Please go ahead.

So the first question is with regard to the Asia exports. They seem to have spiked. Is it more a short -term phenomenon? We have won some new business

Pramod, we don't understand you. Is that Asia exports?

Sorry. I was saying that these are Asia exports we seems to have picked -up this quarter, so is it anything one -off which has happened or is it any new orders you have won and it’s a more specifically…

We have won some new orders.

Okay. Or is it more to do with the China recovery and you have been able to participate?

No. We have won some new orders. Pram od: So it's more of a sustainable trend to go for?

Yes.

Sure. And the second one is with regard to Israel. If I am right, you have some joint venture, tw o entities in that area. So what is the short -term challenge or opportunit y and also medium-term challenge or opportunity, considering the current…

Right now, they are at war. So people who are running businesses are also being recruited to fight. They are all reservists. So right now is not the time to talk to the m or bother them w ith this. But clearly, it's going to be more opportunity because they also see the risk of having all their production only in their country. So it's not a very large country. It can be easily targeted. So, when the dust settles from all this, then we will have a chance to talk to them and figure out, what to do. But it's terrible what's happening for both sides. And I just hope that this gets over soon.

Understood. Thanks and all the best.

Thank you. Next quest ion is from the line of Arvind Sharma from Citi. Please go ahead.

Hello, good afternoon, sir. And thank you for taking my question. Sir, if you could just shed some light on what your target or aspiration levels are for the broader subsidiar ies, both Indian subsidiaries and the overseas subsidiaries?

So we already covered the overseas subsidiaries. On the Indian subsidiaries, if you look at the defence and the industrial verticals, they will be close to 25% EBITDA margin. That's our goal.

Okay. So from this current, obviously current quarter is not a representative. From this, you need to go to like almost 25%. That's the goal?

That's our goal, yes.

And by FY '25, is that? Amit Kalyan i: Yes, FY, yes, I would say close to FY '25. I think we should be close to that.

Sure, sir. Thank you, sir. That's all from my side. Thank you so much.

Thank you.

Thank you. Next question is from the line of Ka pil Singh from Nomura. Please go ahead.

Yes. Sir, if you could just talk about the, there is an improvement in gross margins as well. If you could just talk us through, is there any commodity benefit also visible there or is it just the product mix, which is driving this?

Okay. And if you could also talk about the outlook for both the domestic and the global businesses across segments, that would be useful?

It continues to remain strong. The only thing, the only back -up would be the geopolitical situation. But we have new products, new programs which are ramping up. So on a overall basis, we should be fairl y, good on a quarter -to -quarter basis.

I was talking more about the US truck industry and domestic truck industry and also industrial. If you could just talk about the industry outlook for these two, the next one year?

So look, t he industrial outlook for the US is flat. For CVs also it is flat. It's at about 3,00,000 to 3,10,000. In India, the CV outlook should become positive next year. And the industrial outlook in India is positive. So one sector where we see a lot of concern i s the renewable energy sector, especially wind energy. Because, it's a very capex heavy sector and it takes a lot of time to set up anywhere in the world. And because of this, , it's not a very -- that sector is under a bit of a cloud.

Sure, sir. And lastly, in terms of cost, if you could talk to what could be the impact of, mu ch higher interest rates that we are seeing globally for the businesses. And also recently there have been some news reports that the labour unions, for example, in the U S, are requesting much higher wage hikes. So just your views on these two topics?

So, what you talked about the labour union, that's also what we read in the news. But this is largely to do with the OEMs and certain tier ones. We haven't read the fine print to understand this yet. Interest costs obviously are affecting everyone. In fact, the real GDP growth in large parts of the world is now negative because of inflation running at anywhere from 5% to 7%, 8%. So, we just have to wait and watch . But clearly interest rates being high are going to have a damping effect on certain sectors. But the government in the US is hell -bent on, printing money and funding a lot of these sectors. So it remains to be seen, what happens in a run -up to the elections.

Thank you, sir. And wishing you all the best.

Thank you.

Thank you. Ladies and gentlemen, we will take that as the last question. I now hand the conference over to Mr. Amit Kalyani for closing comments. Amit Kal yani: Ladies and gentlemen, thank you very much for your interest in our company. If you have any more questions, please contact our company directly. And I want to wish you and your family members a very happy Diwali and look forward to a happier and safe r year going forward. Thank you very much. Have a nice day.

Thank you very much. On behalf of Bharat Forge Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.