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Ramkrishna Forgings Ltd
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Ladies and gentlemen, good day, and welcome to the Ramkrishna Forgings Q4 FY '24 Earnings Conference Call hosted Nuvama Wealth Management. [Operator Instructions] Please note that this conference has been recorded.
I now hand the conference over to Mr. Raghunandhan from Nuvama Wealth Management. Thank you, and over to you, sir.
Good evening, everyone. Welcome -- on behalf of Nuvama Wealth Management, I would like to welcome you all to this earnings call of Ramkrishna Forgings, I would like to welcome the management and thank them for giving us this opportunity.
We have with us today Mr. Naresh Jalan, Managing Director; Mr. Lalit Khetan, Whole-Time Director and Chief Financial Officer; Mr. Chaitanya Jalan, Whole Time Director; and Mr. Rajesh Mundhra, Company Secretary and Vice President, Finance.
Before we begin, may I remind you of the safe harbor the management may be making some forward-looking statements that have to be understood in conjunction with the uncertainty and the risks the company faces. I shall now hand over the call to Mr. Lalit Kumar Khetan for opening remarks. Over to you, Lalit, sir.
Thank you, Raghu. Ladies and gentlemen, A very warm good evening, and welcome, everyone, present on the call. I hope you all have got an opportunity to go through our financial results and presentation, which have been uploaded on stock segment as well as on the company's website. We are pleased to report that the company has delivered steady results for the fourth quarter and financial year ended FY '24.
Firstly, let me give you a brief into the latest trend in the global commercial vehicle market. The global CV market is expected to grow by 4% in volume and 6% in value from [ current year '23 to current year '29. ] This growth is primarily fueled by the expanding e-commerce sector, which is driving demand for light and medium duty vehicles.
Furthermore, the development of smart cities and infrastructure projects like highways will fuel the demand for heavy-duty vaults. India CV market is experiencing exceptional growth, letting it fastest-growing CV market globally. Initiatives such as Make in India, National Electric mobility, [ Nissan ] plant, BS VI laws and vehicle scrappage policy are set to further accelerate this growth. This policy not only encouraged, but also promote innovation and sustainability within the Indian CV market.
Indian forging industry continues to be dominated by automotive sector holding a commanding 62% market share in force components. In terms of value, the automatic sector contribution stood at USD 3.6 billion in calendar year '23 and slated to reach 2 years to INR 5.4 billion in CY '29, exhibiting a strong CAGR of 7%.
The overall market is projected to expand by 39 lakh metric ton by CY '29, driven by increased demand from automotive segments supported by a growing working population and rising per capita income.
Now let me highlight some key achievement of our company has made in the last quarter. The company sold a significant contract worth USD 220 million, that's over -- that contract, we were executed over a period of 10 years, making our entry to a new vertical within forging sector, the strategic move focus on supplying Tier 1 customers in the light vehicle segment across North America, enhancing our global footprint and revenue stream.
Furthermore, we obtained our Board approval for convincing manufacturing and supply offices in Mexico, enhancing our operational capabilities and market reach. We have also received a substantial order from prestigious Vande Bharat train valued at INR 270 crores, this order to be supplied to the rail TRSL consortium making a pivotal moment in our journey towards axle in rail infrastructure development. Moreover, we remain committed to sustainability and corporate social responsibility. We continue to launch initiatives to reduce our carbon footprint, promote diversity and [indiscernible] at work and support local communities.
Now let's look at our financial performance for the quarter and year ended FY '24. In Q4 FY '24, we achieved a revenue of INR [ 886.2 ] crore on a stand-alone basis. This revenue is down by INR 20.75 crore due to the rate, so otherwise, as the [indiscernible] are stuck in channel, otherwise, revenue would have been higher by INR 20.75 crore in the quarter. And similarly, for the year, INR [ 34, 896 ] crores, that could have been higher by that amount. However, this represent a year-on-year growth of 16%. Our EBITDA margin for Q4 stands at 22.7% as compared to 22.5% in Q4 FY '23. And the EBITDA expansion of 20 basis points is year-on-year. Similarly, our EBITDA margin for FY '24, which stands at 22.7% versus 22.3% in FY '23.
We would like -- also like to highlight our export performance is Q4 is very good, and we have been able to achieve highest ever sales in exports in Q4 FY '24 that which you can see in our [ concession ] that we have achieved INR 400 crore of export sales, which we never achieved in the history of RKFL. And this level of export sales is very much sustainable in upcoming periods. We are very confident of that.
Lastly, our net profit after tax saw a strong growth with INR 87.3 in Q4 FY '24, which is a 31% year-on-year increase compared to INR 66.8 in Q4 FY '23. For a FY '24, our net profit after tax stood at INR 326.1 crores, reflecting a 38% year-on-year growth from 35.64% in FY '23. At Ramkrishna Forgings, we are ready to [indiscernible] this growth opportunity by leveraging our strength and innovation, operational excellence and strategic partnerships.
We are confident in our ability to adapt, innovate and create value for our stakeholders while making a positive impact on the industry and society.
Thank you for your continued support and for joining us today. We will now take questions from the audience. Thank you.
[Operator Instructions] The first question is from the line of Mumuksh Mandlesha from Anand Rathi.
[Foreign Language]
The next question is from the line of Mitul Shah from DAM Capital.
First of all, congratulations for strong set of performance. And thanks for a very loth presentation this time giving all the details, including subsidiary-wise CapEx, et cetera. So my first question is on, is there any restructuring of the cost because raw material gross margin seems to be very different quarterly and entire cost seems to be shifted to other expenses. Is there any restructuring?
No. Mitul, there is no restructuring. If you look at this quarter, export percentage, export has grown substantially higher, and [indiscernible] export reached much more than the domestic market. And ratio has significantly improved from INR 63. 37 to INR 58.42, that's why you can see this raw material number is looking like that because the gross value is that. And that's the consequent realities on the other expenses where it is mainly increase due to -- let' see the pace has increased. So we have got a INR 17 crore EBIT on export expenses due to that.
So in general, when export increase or export gross margins are much better, but other expenses on the export side are slightly higher. So EBITDA level, it is more or less maintained. Is it like that?
It's a compensated on the EBITDA level.
One more thing just to add to that Mitul this quarter, we have been hit by this Redsea issues and [ treat ] cost has been higher than natural. We had to pay some extra set because of rerouting and all this. So that also has been added to the cost of order.
So sir, can you quantify approximately what would be that onetime impact of freight cost or Redsea impact?
I think that's not a onetime cost right now till we are already in discussion with our customers to realize some part of treat. So I think this will rationalize by about 10% to 15% going forward. But right now, until the discussions are concluded, we will see this kind of set cost going forward until the Redsea is resolved. So Redsea impact, is going to stay unless there's more stocks [indiscernible] items ranging over. So the impact unless and otherwise customer is ready to face the extra net of it. But we are very sure that we will be able to have some consideration from the customers to [indiscernible].
Okay. Sir, second question on average realization. In terms of domestic, quarter-on-quarter, there is an improvement. Export has fell despite currency being favorable, any price rationalization or product mix or how 1 should look at that.
I think exports, we have been almost $35 cost reduction from 1st January has impacted the realization. The Indian key market has not -- our -- all the exports are tied up to the international steel market. So international commodity or international steel market on 1st January has declined by $35 overall. So that, impact, has been felt in the realization [indiscernible]
Okay. And sir, lastly, whatever you can give some outlook on the 3 of these subsidiaries recently merged with.
I think all the 3 subsidiaries right now, Multitech Auto, I think we have given in our presentation details. Multitech is performing I think better, you can see the margins have considerably improved after we took over, I think, almost year-on-year, if we see. There a 200 basis points improvement in margins in multiples and I think we are running the plant to full capacity, and we expect eventually the Multitech market -- the balance sheet to grow almost by 20% in the current financial year.
In terms of JMT, we are going to start production from this month onwards, 1st May onward we are -- May onwards we are partially starting production. And from July onwards, we are going to be full production in JMT,We expect this anything between INR 100 crores to INR 150 crores [ profit ] from JMT in this full year. ACIL has already started manufacturing. And I think in the last quarter, we have around INR 7.5 crores from ACIL.
This year, we are looking at almost INR 120 crores of sales from ACIL.
And so blended subsidiary margin of all this put together.
I think around 15% unsold level is the margins which you see out now we are expecting at least 150 basis points improvement in overall margin at this level.
From Q4 level?
Yes, Q4 level. 100 to 150 basis points improvement in margin for the [indiscernible].
The next question is from the line of Mumuksh Mandlesha from Anand Rathi.
Sir, on the recent order wins in the CV segment on the Mexico plant and the North America to INR 20 million order. Can you share what would be the current revenues from the CV segment? And what is the expected revenues from this new order wins over the next 2 to 3 years? And can you share some thoughts on the profitability for the CV segment will it depend from the overall business and particularly with the other new Mexico plant of [indiscernible] possibility?
So the recent this Mexico plant is not yet in operation. We have just created a space and everything. I think equipment, other things [indiscernible] will take another 4 to 5 months' time. This year, we are expecting only INR 8 crores to INR 10 crores from it so far.
And following year, we are looking at substantial revenue to grow on Mexico plant operations. So right now, we can pass [indiscernible] visibility of that path. Going forward, I think we will be updating the business [indiscernible] In terms of our overall PV exposure, right now, PV is close to 2% or 2.5% passenger vehicle. We expect a double-digit PV in next 2 years' time with the current order wins and the order wins, which we have had totally, I think going forward, we should look at a double-digit PV [indiscernible]
On this Vande Bharat order of INR 270 crore, what was the time line for this order? And also, will this be the fabrication capacity, which will be used for the service order.
So Vande Bharat order is to be supplied by -- from our current capacity only. We are going to submit samples in the -- first samples by October this year. And first batch serial production in -- by December this year. And following the contract for this INR 270 crores, [indiscernible] is a result of supplied within next 2 financial years, so it will be cover up to FY '24.
Okay, sir. And just lastly, on the CapEx side, on the spending basis, are you planning to spend about INR 350 crores to INR 400 crores annually, what will be the breakup of the CapEx.
I could not understand what exactly you mean by a break up or?.
Break up sir. What could be the breakup of the CapEx will be the capacity expansion in the Mexico plant?
No, I think cumulatively, we are looking at almost INR 400 plus crores of CapEx this year. That includes stand-alone on the RKFL side in terms of addition of capacities in the Mexico venture as well as brownfield activity in our current plan.
Next question is from the line of Mr. Raghunandhan from Nuvama Wealth Management.
Congratulations on strong numbers. Sir, firstly, on the light vehicles. As you indicated, given the receipt of orders, you would look at the contribution of light vehicles or passenger vehicles to increase in revenue. If you take a medium-term aspiration how would you see the share of light vehicles going up? And also, if you can talk about whether it will have a similar kind of profitability.
Yes. Raghu, light vehicle in terms of overall balance sheet and the consolidated level, including Multitech and other spaces, we're seeing at almost more than double digits in the next 2 years' time. And I think in terms of profitability, we are looking at sustained the profit, what we are doing right now in a similar brand.
Got it. Sir, in the medium term, we have the cool forging capacity, which is likely to be operational in quarter 1 of FY '25. The project is fully booked by orders. How do you see this ramp up of other execution? Can we see the peak level of execution in FY '26 and for this capacity, what would be the peak revenue?
I think in terms of cold forging samples and other things that don't start going out from quarter 2 of this year. We expect quarter 4 onwards, 100% replace to start from that facility. We are looking at full production or full utilization in a [indiscernible]. At peak, we are looking at almost INR 250 crores profit on from this.
INR 250 crores, sir?
Yes, sir.
Got it. That would be like a 2x gross asset turnover And in terms of JMT Auto, given that the Forging division is starting in April and machining division in May, can you please indicate that in terms of discussions with the earlier customers of JMT, is this on track? How are you seeing the response of customers and your confidence level in terms of ramping up the utilization?
I think we are very confident in terms of the overall [indiscernible] shifting up. I think it has taken a little more time because of the deterioration in terms of equipment and infrastructure. But now almost everything is complete and is going to get completed in the next 2 months time.
Most of the customers have confirmed back, and we have already started -- getting reaudited by the customers. So one by one, the audit has been lined up. I think gradually, we will see most of the customers, and we want to come back is going to [indiscernible] that by, I think, in October. So we are looking at almost going to back to almost 80% for utilization in FY '26.
Got it. sir, with reference to the Vande Bharat order. Congratulations on the prestigious order. In terms of the time line, would it be roughly this is there clarity whether it will be a 3 year, 5 year? What could be the length of the order, sir?
No, this order is for next 2 years' time. This is order is only for [indiscernible] But actual requirement is for 200 [ prices. ] So after building the prototype and supplying the Proton validated, we feel that this 32 [indiscernible] opportunity is going to get converted to at least 100 to 150 [indiscernible]. So if that really happens through, we will be booked up to 2029.
Wonderful sir. Wishing you all the best for that. And in terms of ACIL and NAPL, would it be possible to approximately indicate the revenue and margins for the quarter?
For the current quarter, Raghu, FY '24.
Yes, Q4, sir.
If you look at the MHPS, the INR 90 crore was the turnover for Q4 and the margin was somewhere around 69.5% on the EBITDA side. ACIL is just a small turnover of around INR 94 crores for the quarter. And I think the EBITDA margin was almost lead on this level, and it will improve on the scale up comes on from the EBITDA side.
Okay. And sir, like the earlier indicated target of INR 125 crores for ACIL and INR 525 crores for NAPL, would you believe they are on track?
Yes, it's not back.
Wonderful. Sir, lastly, in terms of the quarterly results, so you explained the realization improvement. In terms of other income, what led to the other income jump, sir?
So Raghu, it's contained 2, 3 element other income, one on account of foreign exchange on nonoperating assets. So it can always come and go. But there is interest income because we had the IP we have [indiscernible] fund -- so the [indiscernible] could not utilize on time and even you can see on the 31st March, we will have line cash on the balance sheet.
So going forward, this interest will go down and similarly, finance costs will also go down. So these are the major 2 components for the other income.
Got it sir. And in terms of gross margin, it was a very strong number for the quarter, almost 54.3%. In terms of FY '24, it was 51% around that, and FY '23 was 52%. Roughly, what would be the sustainable range you would say, for the gross margin?
So Raghu, it will be somewhere around only 50% kind of thing, maybe 1% here and there. So that is -- we will try to further improve upon that. This quarter, 54% is only due to the increase in export domestic ratio majorly. So if you look at the per ton EBITDA, that is almost similar to what we have in the last quarter. So it will -- I would say a little better than the last quarter. So this kind of EBITDA per tonne margin is quite sustainable, and we will have all our endeavor to improve the margin further. There may be change in the gross margin depending upon the export domestic mix, okay? But going forward, we feel this export is sustainable.
So export remains that and domestic also improves, which we are very confident of. So there will be a little change in the margin on the north war side in terms of towards 50% side,
The next question is from the line of Mitul Shah from DAM Capital.
The next question is from the line of Sanket Sourabh an individual investor.
So I've been an investor with RKFL for now almost 8 years and would really like to congratulate the management for an export [indiscernible] getting the company through these trying times and really appreciate your support sir. Hello. Am I audible?
Yes. Thank you, Sanket. Please go ahead.
Yes. So my question was there was one of the announcements from your end that were engaged leading and [indiscernible] for almost 18 months, right? So could you talk us through what would be the kind of focused area where they are enabling or supporting the comp? And what has been the progress so far on that front?
So Sanket, I don't think we can discuss much on the debt. As you will see in the upcoming period about the improvement that we can't go into the space, the areas they are working on. It's really difficult for us to divest all that.
Okay. Okay. Fair point. And so and any update on the electric PV order that went on for because there have been certain developments on the customer front, where they have talked about a certain realignment of their focus. So any further inputs if you can share on that front?
Can you repeat your question?
Yes. So there was a project from our largest PV player, which went on hold electric -- largest TV electric player, which was announced and then it went on hold.
So any further updates on that front?
No, I think there is no update on that front. We will inform the investor at the right opportunity.
[Operator Instructions] The next question is from the line of [ Richa from EquityMaster.]
My question is related to the domestic and export mix, where do you see this next 3 years from now? And if you could also gave some sense of the margins because export margins are better. So on a gross margin basis, what kind of differential would be there between domestic and export?
I think in the next 3 years horizon, we are looking at almost 50% in terms of exports and [indiscernible]. In terms of higher margin and better ization opportunity for us changing and more custom exports expect at least 100 to 200 basis points margin improvement going forward.
Okay. And what is the differential between gross margins in domestic and export?
So it's very difficult to tell because it is product to product differ, but it's just the export margin, it contained the element of seafreight also. So that's why it goes higher by that. Otherwise, it's 100 to 100 basis points more than the domestic market.
Okay. And sir, what about your auto and non-auto mix similar time line, 2 to 3 years down the line? And my understanding is that nonauto has better margins. So if you could just give a sense of the margin between auto and non-auto.
Hello? Yes. I'm not sure if my question was audible I was asking..,
And auto, if you look at the current quarter number, we are at 77.1% versus 77.9% last quarter. So again, an improvement in quarter-on-quarter in auto and non-auto. And it will continue. We have already seen per also auto and non-auto be 70:30 is the first target, than 60-40 over a period of 4 to 5 years. So we stick to that guidance.
And certainly, margins are better, and we have already even [indiscernible] margin where we will be in the next 4, 5 years, so we stick to the margin guidance also.
The next question is from the line of Chirag Jain from [ Yoga Capital]
Sir, I have a query. Sir, how are we looking at reducing our net debt.
So you have already looked at Chirag at INR 522 crores amended on the stand-alone side and INR 818 crores on the console, and we have given a guidance for FY '25 and '26, which you are very much seeing in our [indiscernible] if you have gone through the presentation.
Okay. So we stand on that?
Yes.
Okay. Sir, also, we have a high number of payable days. So do we pay something extra for getting such a high line of credit?
No, it's not yet. So you can extra, it will have impact on the margin, we do [indiscernible] our data limit. And it is commensurate with the value operation company is doing. And so there is no set now we do not pay anything for that gap.
The next question is from the line of Sangeeta Purushottam from Cogito.
Still actually related to the numbers put on Slide #28. Now we have given the breakup of the growth in the domestic market and the export market. Now it seems as if we're seeing some kind of a slowdown in the domestic market and your growth driver has really been exports. It would be very useful if you could give us a sense as to how you see these 2 markets spanning out over the next 1 to 2 years?
And secondly, would it be fair to assume that your acquisitions will play a key role in driving our growth also in the next 1 to 2 years? And what percentage of your growth can come from those?
No, I think in domestic market, the market has stabilized, and we will see going forward. And I think the market is looking to and in the opening statement, Lalit has already said that in the coming year, we see at least 10% to 12% growth in the industry. So overall, we are looking at growth.
And in terms of our acquisitions or the company with whatever we have acquired over the last 1 year, in terms of aligned we are looking at 15% to 20% volume growth in terms of our consolidated.
So as a combination, you should be doing about 15% to 20% volume growth in the next year, that's your guidance.
Yes.
Okay. And sir, you have given in detail all your CapEx amounts that are consolidated and level and subsidiary level. as well as the consolidated debt. Now how is your working capital likely to move -- and that Yes.
Yes, please, carry on. Complete your question.
Yes. So would you even if you add your working capital investments to this, then would -- would you be able to bring down your consolidated debt as you have indicated.
Yes. So if you look at my working capital base, it is 85 to 90 days right now, net working capital, and it will remain in base levels only. And considering those labors or working capital requirement, we have given our guidance on consolidated.
The next question is from the line of Mumuksh Mandlesha from Anand Rathi
Sir, in Q4 quarter, the promise revenue saw a decline with [indiscernible] and sequentially. What has led to the decline, sir?
Can you repeat your question, please?
Yes. So the domestic revenue for this quarter to the decline sequentially. Can you explain the reason why we saw decline, sir?
So I think is well aware that last quarter, there was considerable slowdown, I think, in terms of commercial vehicle or the entire commercial vehicle including [indiscernible] in domestic markets. And there is a considerable slowdown. I think on margin ahead. And on [indiscernible] they have grown basically the domestic market. While we have continued to maintain what we have done in the last quarter and we see that we have done much better than that in terms of expected line now, we see much better.
Sir, was there any impact of the inventory reduction in the OEM end, which impacted your vol?
Both inventory and as well as sales are affected also OEMs and you can very well see monthly numbers, which came out for the [indiscernible] March. So obviously, that has impacted both in terms of their inventory cut down as well as sales number.
But I think we have done -- we are very confident that we have done much better than the industry average. We will continue to strive for that.
You have mentioned about the freight cost impact for this quarter. Can you again requantify that amount sir. What is amount for this quarter?
Can you repeat your -- freight cost?
Freight cost this quarter, which was impacted what is the amount, sir?
So this quarter, it is higher by INR 17 crores from the previous quarter.
And sir, you also mentioned -- mentioned about the Redsea impact on the revenue side due to the shipments in delay, what was the amount, sir, for the Q4 and the full year, sir?
We have already mentioned in the management, I think 2 plus INR 20-plus crores i think that you have not been [indiscernible] because of Redsea impact.
Okay. For this quarter.
Yes.
The next question is from the line of Dhaval Shah from Grik Capital.
Yes, sir. Sir, what is the current gross asset turnover -- and how do you see that changing over the next couple of years as our product mix changing within auto and also other segments hinging up, cold forging, scaling up plus oil [indiscernible] also coming in. So overall, there is -- as we move more towards a better value-added product over the next period, how do you see this gross asset turn changing for the company? And what is it currently?
No, I think first of all, we don't take a 3-month view.
Three years, I say 3 years, 3 years.
Can you provide in the numbers, please?
Yes. So Dhaval, we don't contribute the asset term on the gross asset number. I think that the misnomer because assets are even 20-year old and 30 year old and win fully depreciated. How we can calculate on the gross asset turnover. So that's why we take it on the net asset value. You are very well seen it's a 1.9 plus [indiscernible] turnover. So we will continue with that. We don't believe in the gross asset concept..
O
And from here, we have already given guidance, we will be somewhere around 2.5 to 3 on [indiscernible] turn over in the next 2 to 3 years' time. Then we also -- we have also said on our early calls.
Okay. Okay. And that will be mainly driven by this segment. If you can highlight like would be the quarter a huge change that we are going to see. So if you can talk a bit about that.
So it will be a mix. As you see, we have already given guidance on the auto, non-auto, how it's going to grow, how the growth will come 50% to 20% on the total overall [indiscernible] side. So I think as it's very difficult to maintain on the -- what will be the futuristic a sector-wise and that we don't do.
The next question is from the line of Mitul Shah from DAM Capital.
Sir one clarification on cold forging side, when you indicated full ramp up in FY '26. So there would be 250,000 tonnes.
Yes, 25,000 will be the capacity for coal forging, yes.
yes. And you also highlighted revenues of around INR [indiscernible] crores to INR 25 crores kind of it. So that is translating into a kind of number. So best to ask price that from current level of INR 250 per KG, is it like a nearly 4x type of revenue per KG.
Not at all, not at all. What you are saying number of so 25,000 tonnes up -- If we take it INR 200 per case, it's a INR 500 crore kind of revenue where which you have got the number INR 900 crores.
You highlighted the INR 200 crores floater in the call earlier.
We have said, I think, Mitul, I think we have wrongly understood, we have said INR 250 crore top line, we are going to get from coal forging in the first -- next year of operations.
So that is what I'm asking that to 25,000 tonnes, we'll get INR 250 crores [indiscernible] said
[indiscernible] INR 250 crores would be somewhere around 10,000 to 50,000 each [Foreign Language]
Okay. So then they will be full 100% utilization right.
Yes. so ramp-up will not happen in 1 or 2 quarters in quarter. It will take time.
And second, sir, just if you can give more details on the export side for this quarter, it's a decent double-digit growth on Y-o-Y as well as sequential whereas even in U.S. also flat extra numbers are not very great. So from where this growth is coming, is there any non auto element in the major contributor or within are we gaining some [indiscernible] shares or any geography-wise new addition?
I think there are new order -- last year, the order wins whichever they have started showing results. And these are basically those orders which are getting converted to sales. And that is showing this kind of growth. And I think this -- like Lalit has said in his opening statement, this growth is sustainable going into the current financial year.
[Operator Instructions] The next question is from the line of Shantanu Mantri from Think Investment.
Congratulations on a very steady and consistent work Sir, my question is mainly on exports. So I think for FY '24, we've done around 59,000 tonnes, right? And based on our current order backlog, what will be the most conservative growth that we see? I mean for FY '25, are we comfortably doing 70,000 tonnes based on whatever our current order backlog, which is like around 20% growth.
Shantanu, I would not like to put any definite number to it, but companies aspiring to at least have a 15% to 20% volume growth and overall. And I think premix for export to domestic is going to start change every quarter, and I think we are looking at at least this year to have at least 200 basis points change in terms of the mix in terms of increase in exports and reducing domestic in terms of the overall balance sheet is concerned.
Got it. Got it. So when you're saying overall 15% to 20% growth of control level, so that's like on a domestic level, if the industry is growing 10% to 12%, ideally, we should also be doing that and then exports should be slightly better. correct, overall understanding is correct, right?
Yes.
The next question is from the line of Raghunandhan from Nuvama Wealth.
Sir, in terms of efforts to diversify towards nonauto. Last 2 years, we have seen the share increasing for railways, mining, earth and construction equipment in exports we have seen for oil and gas going up, trying to understand over the next 3 to 5 years, how do you see the share of non-auto increasing in overall share of revenue.
Raghu, I think in next 3 to 5 years, we are looking at almost 60%, 40%, 60% automotive and 40% on automotive. That the company aspires to and we are working very diligently to achieve this. And out of this railway is going to be biggest element of growth going into next 2 to 3 years?
Got it, sir. And a related clarification on the investment into JV for railway -- compared to the last presentation, this presentation, the investment level is slightly higher over the next 2 years. Just trying to understand, was it the spillover of FY '24 going to '25? Or is there any increase in investment happening there.
No, I think total investment earmarked is close to around 200 -- anything between INR 210 crores to INR 240 crores. So each year, we are looking at INR 70 crores plus investment whatever has been not been investment has been pulled over to this year. So I think Lalit can give you the exact number what we have invested last year and what next 2 years we are looking at?
So Raghu, that's slightly at a higher number because -- we have a little bit added on the promoter contribution on the project cost -- project side has reduced the debt number little before operate cost remains same.
And last year, there is [indiscernible] you look at the last position there is a [indiscernible] spillover to the next year in terms of investment. So it's a mix of that.
Got it, sir. And third, like in terms of the capacity, because the capacity is large and apart from the government orders, even non-covenant orders, export sort of potential trying to understand if you can talk about your efforts there and who are the potential customers for deals?
I think, Raghu, we would not like to spell out the names, but we can very confidently say that we we, at Arete are not adding customers as of now because we feel that the market demand is very strong and we can get much better realization than what we have got for railways.
So we are waiting for the capacity to be up because we still have more than 1.5 years for the capacity to start -- so we would, at the appropriate time, start intake of orders, we would first start with the railway, which is going to be our first year commitment. And then start onboarding new customers so that we can get a better realization than what we have got for railways.
Got it. So -- and this will be both, right, better realization as well as bigger wheels in terms of size.
Yes. It is mostly from North America and Europe. So Europe is smaller because it is more on the metro side, but North America is from the wagon and other places. So I think that is a bigger way.
Got it. Sir, coming to ACIL, there is the proposal to add 6 cylinder Grana machining facilities, also that additional first 20,000 metric tons, which can have a value add about INR 300 crores. So relating to that, whatever CapEx has to be incurred, is it already part of the subsidiary CapEx indicated? Or is it over and above that?
No, it's part of that, whatever we have indicated in subsidiary CapEx for the future. It is part of that one, Raghu. So nothing beyond that we estimate.
Got it. And just a last question. In terms of stand-alone CapEx, I think compared to the earlier presentation or estimate, there is a small increase in stand-alone CapEx. So anything to call out there?
No, not specific. So there are a lot of equipment we keep on adding, and it happens time to time, depending upon the customers' requirement due to that decision.
Got it. Got it, sir. And just a clarification, how much would be the maintenance CapEx every year, sir?
So it should be around INR 40 crores to INR 50 crores every year on the maintenance side.
[Operator Instructions] As there are no further questions from the participants, I would now like to hand the conference over to the management for closing comments.
Thank you. I take this opportunity to thank everyone for joining the call. I hope we have been able to answer and address all your queries. For any further information, can you get in touch with us? at our investor relationship advisers. Thank you very much for sparing your time and joining our call. Thank you.
Thank you. On behalf of Nuvama Wealth Management, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.