Bharat Forge Ltd
NSE:BHARATFORG
| US |
|
Johnson & Johnson
NYSE:JNJ
|
Pharmaceuticals
|
| US |
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
Financial Services
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Mastercard Inc
NYSE:MA
|
Technology
|
| US |
|
UnitedHealth Group Inc
NYSE:UNH
|
Health Care
|
| US |
|
Exxon Mobil Corp
NYSE:XOM
|
Energy
|
| US |
|
Pfizer Inc
NYSE:PFE
|
Pharmaceuticals
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
|
Nike Inc
NYSE:NKE
|
Textiles, Apparel & Luxury Goods
|
| US |
|
Visa Inc
NYSE:V
|
Technology
|
| CN |
|
Alibaba Group Holding Ltd
NYSE:BABA
|
Retail
|
| US |
|
3M Co
NYSE:MMM
|
Industrial Conglomerates
|
| US |
|
JPMorgan Chase & Co
NYSE:JPM
|
Banking
|
| US |
|
Coca-Cola Co
NYSE:KO
|
Beverages
|
| US |
|
Walmart Inc
NYSE:WMT
|
Retail
|
| US |
|
Verizon Communications Inc
NYSE:VZ
|
Telecommunication
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
1 092.45
1 791.4
|
| Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
|
|
Johnson & Johnson
NYSE:JNJ
|
US |
|
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Mastercard Inc
NYSE:MA
|
US |
|
|
UnitedHealth Group Inc
NYSE:UNH
|
US |
|
|
Exxon Mobil Corp
NYSE:XOM
|
US |
|
|
Pfizer Inc
NYSE:PFE
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
|
Nike Inc
NYSE:NKE
|
US |
|
|
Visa Inc
NYSE:V
|
US |
|
|
Alibaba Group Holding Ltd
NYSE:BABA
|
CN |
|
|
3M Co
NYSE:MMM
|
US |
|
|
JPMorgan Chase & Co
NYSE:JPM
|
US |
|
|
Coca-Cola Co
NYSE:KO
|
US |
|
|
Walmart Inc
NYSE:WMT
|
US |
|
|
Verizon Communications Inc
NYSE:VZ
|
US |
This alert will be permanently deleted.
Bharat Forge Ltd
You don't have any saved screeners yet
Ladies and gentlemen, good day and welcome to Bharat Forge Q4 FY '22 Earnings Conference Call. [Operator Instructions]
Please note that this conference is being recorded.
I now hand the conference over to Mr. Amit Kalyani. Thank you and over to you, sir.
Good afternoon, ladies and gentlemen, and thank you for joining our Q4 and full year analyst call. As usual, I'll take you through a short commentary and then open up for Q&A. We have -- I have with us members of our finance, Investor Relations and management teams.
So just to sum up the year, I think we had a strong finish to the year. At a stand-alone level, we witnessed about 71% growth in revenues, more than doubling of the EBITDA and a 3x jump activity.
EBITDA margin is at 27% despite the inflationary pressure across all cost elements. We have a strong balance sheet with a net debt-equity of 0.2. We've won over INR 1,000 crores of new orders for Bharat Forge India. This is both for Indian and domestic and export markets. We have also won over $150 million of orders for steel and aluminum forgings for U.S. operations, which will be made in supplied in the U.S. to U.S. customers.
I'm happy to note and report that we have won our first order for power electronics for automotive application from our EV division and also aluminum -- high-pressure aluminum die cast parts from prestigious OEMs. And we've had a 20% EBITDA margin at the consolidated level. We've crossed about the INR 10,000 crore revenue. And our artillery gun has completed all trials by the user and passed with flying honors.
Just to look at 3 months of the year, we ended again by growing our top line by about 28% to INR 1,675 crores driven by a pickup in both domestic and export markets. EBITDA margin at 25.7% are optically depressed due to the pass-through effect of the steel price increase. If that were not there, this would be about 27%. EBITDA for the quarter was INR 332 crores, a growth of 40% over quarter 4 of '21.
So just to say at a consolidated level, we expect 2022 to be a stronger year driven both by top line growth and strong cash flow, ramping up of our U.S. operations, growth in our aluminum operations in Germany and significant growth starting to kick in for our industrial vertical.
So I will now be happy to take your questions and answers.
We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Binay Singh from Morgan Stanley.
My first question is on the order book. In the December quarter, we had called out that the EV order book is around $50 million. So this order that we're talking about on the power electronics side is over and above that? So this is something you've got in the March quarter? Is that correct understanding? And if so, what is the EV order book now out of the...
This is an increase because this is something which we had done a product development and supplied it to the customer for testing and trial. And this has now been approved, and it will go into finished product.
Okay. So sir, within the [Foreign Language] crore, what will be our EV order book now?
Sorry?
Within the [Foreign Language] crore number that we've given, what will be our EV sort of percentage for the order book?
I would say probably about 50%. 50% out of the foundry in India. And all of the German orders are -- out of the orders in the U.S. for aluminum, 80% are for EV and hybrid.
Yes. Right, right. Those are, I guess, casting parts that are going into EV cars?
Yes. So for the total orders. Our total EV order book would be well in excess of, I would say, INR 1,500 crores between forging, casting and other parts between Germany, U.S. and India.
And what sort of execution time lines should we look at? Like over -- will it be executed over 1 year or over 2 years?
So this will ramp up this year and it will be running at full volume. These orders will be running at full volume in '24, '25. But by then, we anticipate significant more orders.
Okay, that's good to know. And just lastly on inflation. In the last call, we had specifically called out the inflationary headwinds that our [indiscernible]?
[Technical Difficulty]
Hello?
Sir, sorry to interrupt. There seems to be some disturbance in your line.
Binay, I'm here. Sorry, I couldn't hear at all.
It seems like we lost the connection for the current participant. We move to the next question from the line of Kapil Singh from Nomura.
Firstly, I wanted to check, what is the total order book that we have? I really think INR 1,000 crores is per annum kind of order that we have done, right?
When it fully ramps up, it will be INR 1,000 crores, yes.
INR 1,000 crores per annum, right? So I wanted to check, like what is the -- because you have orders from last year or maybe even before that also which are yet to go into production, right? So I just wanted to check, what is the order book which is yet to go into production?
I would say more than INR 1,000 crores for sure. It would be closer to about INR 1,400 crores, INR 1,500 crores.
So this INR 1,500 crores, roughly around INR 1,500 crores will be for the Indian operations, right?
Yes. And that's on the automotive side.
Okay. And for the overseas operation?
Overseas, as we mentioned, right now it's $150 million in the U.S.
Okay. Got it. And sir, could you repeat how much is the EV order book out of this INR 1,000 crores that you booked?
About INR 500 crores. And additionally, what we have in the U.S. and Germany.
Okay. And sir, this INR 500 crores is in this segment, this casting?
We don't want to break it down, but it's in the automotive segment, automotive power electronics, I mean, automotive EVs.
No. I meant these are like traction parts or drivetrain parts?
This is a variety of components. It goes across forging, casting, power and control electronics, et cetera.
Okay. Okay. And then you also announced this even maiden honor for the [ CDC ] converters from Indian OEM. This is this product category?
This is the power electronics.
No, I meant the -- this final product, is it similar -- what kind of product is it?
It's called the...
Truck and bus.
It's a truck and bus application, commercial vehicles.
Okay. Okay. Understood. And secondly, could you also share the outlook for India's markets in terms of market size, particularly the global market? What do we see in terms of industry size for U.S. class 8 and also for Europe market for next 1 to 2 years? How much production ramp are the winners having right now? Some color on that also, please.
So the U.S. and European commercial vehicle markets, we see them, at least as of now, fairly robust for this year and next year. That is the forecast. The order backlogs are quite healthy right now. So most of these guys have slots booked for the next 12 to 15 months as well. So as of today, all of this is fairly robust.
As far as the supply chain disruption is concerned, I would say there are normal supply chain disruptions. There is nothing that is a very significant showstopper right now. There is a lot of volatility and there is a lot of, let me say, disruptions, if you will. But they are able to manage, and that is still supporting production outflow.
Do they require to raise production significantly from current levels? It's around 25,000, for example, for U.S. market. Do we need to go much higher than that? Or current levels are -- is what that you should expect you'd have seen?
They have maintained production at a stable level. So they have not -- it's fairly stable. You can call that.
The next question is from the line of Puneet from HSBC.
My first question is on -- my question is if you are seeing any increased workflow or new orders coming on account of opportunities that, that may have risen from the lack of supply chain in China. Or any extra movement that you are seeing in terms of additional export opportunities for your industrial products?
Yes. So for Industrial, I think this is early days. But we are definitely seeing, let's say, new supply chain demand from India across sectors, and that is our entire foreign die castings, forgings, et cetera, heavier forgings with the acquisition of Bharat unit. And then as we complete -- the acquisition of JS Auto will us to cater to a much larger segment of the market and increase those companies' revenues manyfold and grow our Automotive -- grow our Industrial business as well.
Can you talk about specific industrial products, which have been asked?
No, I'm not going to talk about any specific industry because this is competitive information and I don't want to share it.
Understood.
But it will be across sectors. It will be across sectors.
Okay. Okay. And this is new in last -- something that you've seen in the last 1 year?
Yes, yes. Absolutely, absolutely.
The next question is from the line of Amyn Pirani from JPMorgan.
On the Industrial business, I think you already answered partly that question. So which are the areas you mentioned which are 100% dependency on imports? Is it possible for you to highlight some like broad areas where we can have a medium-term opportunity because of the...
It will be all in capital goods and replace those imports. So it's across sectors. It goes across many, many sectors, but it's largely all in capital goods.
Okay, okay. And on the oil and gas side, you mentioned that you expect stable revenues going forward. So right now, you are still below the peak that we used to have like 4, 5 years ago?
Yes, yes. We're at, I would say, 2/3 of the peak.
Yes.
Two -- despite high oil prices, we are not seeing incremental investments going into that area basically?
There are -- no, there is incremental investment. But what has also happened is asset utilization. Asset life cycle has gone up substantially.
Okay. Okay. Okay. And some time back, you had talked about trying to get into new products in terms of offshore. Is there any development on that?
No, no, we have developed new products and got new orders also for new products for the tracking sector. They will all start slowly this year and then increase next year.
Okay. Okay. And...
North offshore.
Okay. North offshore, okay.
Yes.
The next question is from the line of Ronak Sarda from Systematix.
First question on the India CV demand. How do you see the demand for current year, especially given the inventory in the system is pretty low? So how do you see the...
Well, quarter 1 is looking like in the back at peak volumes of 1,670.
Close.
Very close. I mean quarter 1 is at about 50,000 numbers.
Amit, [indiscernible].
Sorry, 97,000 numbers, 97,000.
And how do you see this sustaining, let's say, over the full year, I mean, especially with the...
Right now everybody is bullish. Right now people are bullish for Q2 also. But I think we have to go quarter-on-quarter at a time.
Right. Right. And so please...
But now looking strong because the premium market has been depressed for a very long time.
Right. And now we also were gaining -- we had new content supply starting in the BS-VI regime. So should we see a full impact or full benefit of that as well? Or we should -- our revenue growth will be largely linked to the production growth?
Yes. See, whatever new products we have developed which are for BS-VI, we have a significant market share or 100% market share. And those are going well and that will continue. It will basically be in line with the market demand.
Right. Okay. And also your thoughts on the EBITDA margin. How should we look at the EBITDA margin because commodity costs are increasing? At the same time, we'll have operating lease benefit coming through and also the various cost reduction measures you have taken over the last period.
The problem is that one can't comment on what is the cost pressures, et cetera, right now. And energy cost is also going up. Freight cost is going up. So I think on an overall basis, if we are able to maintain at this level, 25%, 20% -- between, say, 20%, around 26%, 26.5%, I think it is a pretty good number.
Right. Right. And finally, the question -- a question on the India Industrial part, right? Last year, we had a onetime revenue from supplies of oxygen cylinders. How do you see the overall full year revenues from Industrial division? Should we...
I think our Industrial division revenues will be strong this year, and this will be a continuing trend.
Right. So we shouldn't see a major dip from what we did in FY '22?
No.
The next question is from the line of Basudeb Banerjee from ICICI Securities.
Congrats, sir, for this good set of numbers. A couple of things. One, sir, if we look at your cash flows for last 4 years, you have done a consolidated level in excess of INR 1,000 crore CapEx and only FY '20 was a free cash flow year. So you have added a U.S. capability in a low capability in between. Revenue is back to FY '19 levels. So what is the outlook for consol CapEx for the coming 2 years? Around...
We repaid lots of loans. So now you are saying we haven't had free cash flow.
Yes.
I don't understand what you're saying. It was very garbled, and it was very incoherent. So maybe you can just repeat for the...
So out of last 4 years, sir, we could see free cash flow only in FY '20 and revenue is back to INR 10,000 crore-plus. So how do you see free cash flow generation in coming years? And what should be the consol CapEx?
I don't think we gave cash flow numbers even this year. If you account for -- if you look at our debt repayment, we have repaid almost INR 250 crore of debt. Our loan has gone down. So yes, net of debt, there is -- free cash flow is not there. But we have the opportunity to raise more capital and raise more debt and finance cash flow or finance our CapEx. So I'm not concerned about that because our balance sheet is very, very strong. And we have about between INR 300 crores to INR 350 crores CapEx this year and next year.
At the consol level, sir, including project growth maintenance CapEx?
Yes, yes. Except for acquisition. We have announced the acquisition of JS Auto, which when it gets completed, we will have to pay the money that will be due. But without the acquisition, our consolidated CapEx will be in the region of about INR 350 crores this year and next year.
And second question, sir. As you rightly said, that U.S. truck -- class 8 truck manufacturing capacity is roughly 25,000 per month and the order books are there, giving you visibility of that much production. So how to look at growth for Bharat Forge's perspective. Like what kind of parts per vehicle at this new customer addition amid the static production outlook per se?
Well, there's lots of opportunity because as all the customers are moving towards electric mobility, they are going to de-integrate and de-emphasize in-house manufacturing. So that is a very big opportunity for us, and our teams are already engaged with customers on those matters.
The next question is from the line of Pramod Amthe from InCred Capital.
Two questions. One is with regard to the international aluminum forgings. What has been the experience in terms of ramp-up? I think this quarterly in the financials indicate some revenues being booked.
Second, are there any advance -- advancement of CapEx for aluminum forging on the international side?
So our aluminum forging ramp-up is going as planned. There has been a few months of slowdown because of some of our customers being impacted by Ukraine, et cetera. So we're using that time to do more product development for future growth. And we have now more business than we have capacity, so we will have to look at setting up additional capacity to take care of that demand.
And when you'll plan to look into it and announce per se?
So we will announce that in the following -- in the next quarter.
And second one is with regard to EV components. You had indicated in the presentation some win in the EV component space in the domestic market, if I'm not wrong. How do you see -- with all these questions being raised about quality and concerns on safety, do you see an opportunity for a quality player like you to play a bigger role in EV components as compared to currently imported?
Absolutely. You're absolutely right, Pramod, and we definitely do see that opportunity. But we don't -- we are also being cautious in overcommitting on time frame, et cetera, because we want to be sure that our products all go through the required tests and we are 100% sure that they are going to meet the safety requirements because the vehicle safety depends on all the systems safety. And the system here has, one, externality, which is the charging infrastructure and the voltage and -- the current and voltage drops that we face in India. So these are not things that all over the world people are used to. In India, you have to be conscious that this is a serious issue and design your product for that.
But do you expect the, ultimately, OEM to bear it? Or you also have a role to play in terms of providing better...
So look, in this product, the customer gives you a specification and the actual design of the product is yours.
The next question is from the line of Raghunandhan N.L. from Emkay Global.
The first question is on ATAGS. As you said, the Army trials have been successful. So media reports indicate that the RFQ is expected in June for over INR 3,000 crore worth of orders. Can you talk about your expectations, opportunity size and capacity for this business?
Well, I'll tell you that we expect that this whole ordering process should pick up steam and hopefully get completed in this financial year.
In terms of capacity, I think in our first year, we will have a capacity of about 100 guns. And after that, we can -- we will have an increase in our capacity to 200 a year.
What has been the investment, sir?
Investment so far has been about INR 250 crores. But please remember, this is only the investment for the gun making. The machining, forging, heat treatment, all that was already in place. Machine making, all that was already in place. So we're leveraging the group's capabilities in that.
Sir, on to Tork Motorcycles, can you talk about how has been the initial vehicle demand and the opportunity on the component supplies?
So the vehicle demand has been pretty good. We have closed the order book at 1,000 orders because, again, after reading all the issues with safety and [indiscernible] and explosions and reversals of certain products, we've initiated a full testing regimen, including outside agency, to make sure that our product is completely robust and will not have any of these issues. So I believe that it is better to take a little time and -- but do it right.
And in terms of the opportunities, we're very clear on what we know, what we will be making and supply. And our plants are right now under construction.
Lastly, sir, on Nellore lightweighting plant, how much was the FY '22 revenue? And what is the expectation on the production ramp-up going forward?
Our revenue in '22 is very small. I would say hardly INR 20 crores, INR 30 crores. This will be a year of ramp-up for us. We have received export orders for some marquee global customers. And I think the real pickup in growth will happen in '24. '23, we'll see growth, but '24 will be the real growth year.
So we should be able to reach that INR 200 crore kind of a revenue target there, I think, on that...
Yes, I think so. I think, I mean, we should be pretty close, yes.
The next question is from the line of Pramod Kumar from UBS.
Amit, my first question is related to exports. You did talk about some order wins and the fact that even now, some of the segments are 2/3 of the peak and even on the export industry side. If you can just share outlook given the fact that there is increasing concerns about recession fears in the developed markets. So if you can just provide some context on where do we stand in terms of our order book. What's been the kind of share gain, what we are seeing, and the incremental auto win opportunity?
So just to put things in perspective from a 2-year perspective, whether exports -- can we expect a double-digit growth on a sustainable basis?
Yes. So I'm going to have my colleague, Subodh, answer that question. He is far more, let's say, active in the market.
So to answer your question, yes, we are expecting growth. Whether it is double digits or more or less, that time will tell. But we are definitely working for growth.
Okay. That's very helpful. But if you can just provide some color as to what are the areas where you're seeing some traction because there are some areas which are not coming back on the expected lines in terms of, say, oil and gas. And how is renewable doing? If you can just give us some more color, yes.
So yes. See, we are targeting growth in all the segments we operate in, which is right from commercial vehicle, Automotive as well as Industrial. And we have -- we are putting together a strategy which also focuses on development of different products. So even if the market remains stagnant to a certain extent, we see growth opportunities, and we are engaged in that process in any case. This includes certain products in the oil and gas side as well.
Sir, yes. And related to that, with the transition to EVs, there was expectation that on the legacy parts, there'll be more consolidation of vendors, wherein large OEMs will move their legacy parts vendor for the supplies to larger consolidated vendors who can have larger scale and basically reduce their investments on those parts. So are we seeing anything like that play out on the global side, especially in markets like North America and Europe?
So while we are already seeing RFQs and proposals and discussions around that line, right now everybody has been very caught up in addressing day-to-day opportunities and issues of supply chain stemming from all the macroeconomic and global issues that are happening. So they are started, but they're not picking up pace because people are just worried about maintaining their day-to-day supply chain and running their plants.
Okay. So in a way, is it fair to assume, Amit, that once these things stabilize, then probably from FY '24 perspective, you should see some of these activities kind of contributing meaningfully on the export side?
So look, I don't -- we haven't entered into any such agreements or contracts yet. So I don't know if '24 it will happen, but -- in terms of revenue recognition. But I think directionally, there's definitely a path that we are on.
Okay. A second one is on defense. I understand that availability of, how do you say, proving grounds or the areas where these guns are tested and all that has been the biggest bottleneck for defense new equipment order -- or trials, basically. So in -- is there any change there? Or we should expect...
No, no, no, that problem was solved during Mr. [ Paribas' ] time itself.
Okay.
He was the one who opened up the government test ranges for private players to use. That happened almost 4 years ago. Before that, we were not able to do testing because there were no private testing fields in India.
Okay. And outside of the artillery guns, which is the next big opportunity you're looking forward to on the defense side?
Well, beside the artillery guns, We have vehicle programs. And we have multiple artillery guns, not just this one. And then we also have opportunities to export our products across the world. .
The next question is from the line of Jinesh Gandhi from Motilal Oswal Financial Services.
I mean I just want to clarify on this export amount of $150 million. You mentioned that in this case, forged aluminum made in U.S.?
This is not export orders, these are orders received by our subsidiary in the U.S. for steel and aluminum forgings which will be made in the U.S. and supplied. .
Okay. So would we need to put up like cleaning up produced capacity there also? Or will...
We don't always have to put up forging capacity. We are going to do automation of our project line and some amount of maintenance CapEx, which will allow us to debottleneck our facilities and produce -- to make them more productive.
Okay. Okay. Got it. Second question pertains to the European aluminum forging business. So can you talk about what was the utilization for the 30,000-tonne capacity which we have in Europe in fourth quarter and for the full year FY '22?
I would say our capacity utilization in Europe was about 40%.
For the full year?
Yes. .
Okay. Okay. And the ramp-up has been -- is it lower than expected just because of the geopolitical issues which your customers are facing or also there are...
Because -- there was slack because -- there was slack because we had to develop so many new products, that because the product development is happening in Germany for both the U.S. and the German plants, therefore we needed 1 extra year for product development. .
Okay. Okay. Got it. And that -- talking about your European operations, did we see a material impact of energy cost inflation in fourth quarter? Was that the key reason why our margins, excluding the EU -- sorry, excluding U.S. aluminum, went down? .
We do have some cost...
Recoveries.
Recoveries which are still pending, which will happen in the course of the next few months.
Okay. Okay. Got it. And coming to the, finally, forging operations. So have you seen incremental utilization or...
On product towards Industrial...
Right. BS-IV?
Technologies and solutions.
Yes. So you see any incremental utilization there?
Yes. So I think we will increase our sales there by 50% this year.
In FY '20, we should increase by 50%. But what -- how did we close FY '22?
75 crores.
We're about INR 75 crores for the year. Oh, 9 months, 9 months. Sorry, for 9 months. So close to 100-odd crore kind of run rate.
Right, right, right. Got it. And our India operation subsidiary primarily is exhibiting losses, and they've widened in fourth quarter. So is it largely because of family forging? Or there are pressures in other operations as the...
I have to emphasize there are no losses. It basically not only -- it basically depends. Where there is an EV, there we are investing.
The next question is from the line of Mumuksh Mandlesha from Emkay Global.
Sir, on the -- for the EV segment side, what kind of outperformance do we expect led by the order moves? So what kind of growth is expected for the...
So who's -- this conferencing system is very unclear. I don't know is happening. Very, very muffled voices are -- currently. Very unclear to hear.
Mr. Mandlesha?
Yes, can you hear me?
Yes. Can you just maybe put the speakerphone up or something?
Yes. Yes. I speak it normally. Is this fine, sir?
Yes, I mean, it's not very clear. Go nearer, go nearer or around so that we can hear you.
Is it better, sir?
Yes. Okay.
Yes. Just on the EV, what kind of outperformance you expected over the industry growth based on the orders, sir? .
For the EV segment, we will have a definite outperformance because we have, one, lots of business globally. Subodh?
Yes, absolutely. So I think we should be able to grow our EV business even if there is no change in the underlying markets by at least 30% this year.
And this is across domestic and overseas?
No, I'm talking about for India.
India.
But also Germany will certainly increase because of our aluminum forging business.
Okay. On the second question, sir, on aerospace/railway, what kind of revenues are you seeing FY '22? And what is the outlook for FY '23, sir?
Aerospace, Amit.
So aerospace, again, we are seeing, I would say, between 30% and 40% growth this year and possibly 25%, 30% growth year after next.
Railway, there is not much growth because of the whole electrification and the lack of diesel business.
And sir, Just on Kalyani and [indiscernible], has that already started, sir?
Yes, yes, yes.
So what kind of revenue was this quarter, sir?
Again, it's about INR 20 crores, INR 25 crores this quarter.
[Operator Instructions] The next question is from the line of Gunjan Prithyani from Bank of America.
I just had two follow-ups. Firstly, in the -- your India Industrial business.
This voice is -- this call is coming in very clear. I don't know what is the difference between one line versus the other. So I can hear completely what you're saying. So go ahead. You need to start again.
Okay. So no, just follow-ups on your India industrial business. Now if you can share some color on the various segments. I mean a little bit of the mix. Where is it coming from? Agri, aerospace construction, the way you spell it out for F '22. And when you're giving your comments, clearly there's a lot of confidence on the growth from this segment. So which are the categories where you're seeing growth in...
No, I mentioned earlier this is competitive information, and I don't want to share it anymore. Because there are lots of people who listen to what we say, and I don't want to create competition [ information ]. So let's just say that we're going to grow this business, we have a good strategy, we have a new person who is heading this business in our company and we have a very good plan.
Okay. Okay, no worries. Only on JS Autocast now, if you can just give the time line for the closure. And what is the kind of...
It will happen this quarter.
It'll happen...
This quarter.
Okay. And anything that you want to give us a sense that how that business should scale up in terms of revenues the way you put it for the Sanghvi?
Well, the way I see it this, when we buy it, it will be at about INR 380 crores, INR 390 crores or so in top line. Our goal is that in 5 years, we should be able to triple it.
And how much investment for that?
I will talk about that later. You asked me the revenue, I've given you the revenue target in terms of my own business.
Okay. Got it. Just the last bit from my side. I mean on the U.S. class 8 trucks now, clearly the order -- the orders have been seeing significant decline, and that, I understand, is because of the floods being close. But are you sensing any increase in the cancellation or any change in outlook going by some of the other indicators that you see in the industry?
Not for the moment.
Okay. So you expect that it stays stable at least for the next 12, 15 months?
Correct.
That is the expectation from us.
The next question is from the line of Aniket Mhatre from HDFC Securities.
Sir, would you be able to share Sanghvi Forging's EBITDA, please?
Sanghvi's...
What does that mean? It's all in the numbers. It's about INR 55 crores of top line. And let me...
INR 70 crores, top line.
Sanghvi. And an EBITDA of about, this is the first year, about 15%, 16%. But this is the first year, so I don't think [indiscernible].
[indiscernible].
Fact is we didn't lose any money. We made a PBT and an EBITDA profit.
Yes, sure. No, I mean, the -- frankly, the reason for asking the question was to just decipher between -- we understand Sanghvi Forging is a very profitable entity, but we still see losses in the India sub. So just trying to understand...
[indiscernible]...
Sanghvi [indiscernible]. This is not...
So the facts are, which are losing money are in defense and also -- only that part. When we out and do a trial, there's a huge cost.
Yes.
Yes. Okay.
What had happened is we had taken over Sanghvi from the 1st of July.
Correct.
So in the first quarter, there was a -- it was within -- it was still under NCLT and there were certain write-offs. So I think the point that you need to look at is since we have taken over, there are no losses. And we are poised for some very strong growth there. And...
Sure. Understood, sir. And when you talk about 50% growth in FY '23 for Sanghvi Forging, so you're talking about an annualized run rate of -- from FY '22, the 9-month level?
Annualized run rate.
Got it. And sir, just one clarification. This Kalyani M4 order and the ATAGS order, that will come under the India subsidiary?
Yes, yes. In India, yes.
No, no, India subsidiaries, not in the standalone.
No, that comes in standalone.
Okay. Both will come in standalone.
Then we had bid for those orders, we didn't have KSSL. So the orders were bid and won in...
BFL.
BFL.
Sure. One other clarification. You just talked about very strong 30% growth in the PV business. That was for PV exports, right?
Yes. But even on PV domestic and PV overall, we will have a strong growth because of lots of new order wins from new customers. .
Sure. Understood. And just one final thing. You said CV domestic is -- OEMs are talking about very strong growth. Would we go back to the FY '19 peak this year in your view? Or as per customer, what is the indication?
Q1 is tracking at close to peak numbers.
Okay. Okay.
So if it sustains, then yes, the answer is yes.
The next question is from the line of Jinesh Gandhi from Motilal Oswal Financial Services.
So for FY '22, of this 71% growth, what would be working? And how much is attributed to that RM cost pass-through? And how much is organic?
RM cost -- well, we know what -- I would suggest that our financial team, they will come back to you on that.
Sure. Secondly, as we had seen in the fourth quarter particularly, there is substantial increase in Other income and interest costs. Is there any change in accounting which has happened which will continue? .
Yes, none.
No, we have planned disposal of assets.
Okay. And on the interest cost?
[indiscernible] disposal of assets. Actual -- and it's actual cash received.
Okay. And interest costs have also gone up quite materially to INR 40 crores.
Yes. A portion of the exchange -- part of exchange now because of the [indiscernible].
Okay. Okay. Got it.
Our average for interest cost is INR 20 crores a quarter. I think that's the way to look at it, yes. And everything starts from the exchange rate.
Got it. And what was Indian realization for the quarter?
Yes. 76.
76? Got it. Got it. And last question on our working capital. So in FY '22 on a stand-alone basis, we have seen roughly about INR 1,000 crore of outflow. So do you expect this to reverse? Or is this the normal course of business?
So I just have one request. This is Amit Kalyani. I have to unfortunately -- I don't like to reveal a customer. So I have to leave. If anybody has any last questions for me, I will take that. Otherwise, our finance team will continue and our business team will continue with you.
So I just like to thank you all for your participation and your interest in our company and your encouragement and questions. Please do keep in touch, and we will keep updating you on matters of importance with regard to Investor Relations and what communication in terms of new things at the company. And I wish you all good health, and I'll leave you to our teams here. Thank you very much.
Yes, go ahead, Jinesh. You had some questions.
Yes. It was on the working capital side. So FY '22, we had seen outflows, INR 2,000 crores on a stand-alone basis. Do you expect this to reverse or partly? Or this will -- there is no abnormality over here? .
So the increase in the absolute number is on the basis of [indiscernible]. If you compare it to the sale -- [indiscernible] to the sale, it's just kind of a flat end of year. This is in terms of absolute number.
Yes. Year-on-year, it has grown by almost 70%.
Yes.
And the increase in working capital is a reflection of that.
Ladies and gentlemen, that was the last question for today. On behalf of Bharat Forge, that concludes this conference. We thank you all for joining us, and you may now disconnect your lines.
Thank you. Bye.