Rishabh Instruments Limited (RISHABH) Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the Rishabh Instruments Limited Q4 and FY '26 Earnings Conference Call. This conference call will contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference call over to Mr. Narendra Goliya, Promoter and Executive Chairman, for his opening remarks. Thank you, and over to you, sir.

Thank you. Good evening, all the participants. A warm welcome to all in this season of result declaration. Thank you for joining us on our Q4 and FY '26 earnings call. I have with me on this call, our whole-time Director and CEO, Dinesh Musalekar; our CFO, Vishal Kulkarni; and GM Strategy, Nishant Dudhoria. The financial results and investor presentation are uploaded to the stock exchanges and on the company's website. We assume you had an opportunity to evaluate them. Financial year 2026 has been a defining year for Rishabh Instruments marked by all around strong operational execution and reselling performance despite a dynamic global environment, lead in war, what tariff imposition and other challenges. The year for the Rishabh Group was marked by substantial improvement in profitability overall adjusted EBITDA doubling and reported EBITDA at approximately 2.5x last year's corresponding numbers. Also the fact that 1/3 of the total group business from high-pressure die castings also improved to an adjusted EBITDA of about INR 33 million positive compared to a loss of EUR 150 million last year. All this was with better quality expansion into new markets, continued new product development and corresponding approvals and continued progress on long-term strategic priorities. Over the last quarters, we have strengthened our business parameter indices anchored in product portfolio mix and sourcing and technology capabilities. This disciplined operating model helped strengthen the Rishabh Group's diversified business and transmit the ability to execute consistently amidst geopolitical and supply chain uncertainties. We will continue these strategies with renewed efforts in the coming quarters. The stand-alone India business remained a key growth driver during the concluded year supported by strong export demand, deeper customer engagements and growing traction across the electrical instrumentation portfolio. We continue to focus our business position, both in the domestic and the international market through product innovation, improved market penetration and consistent quality and service to the customer to remain the preferred choice across segments for our business partners. Reported EBITDA grew by 72.6% over last year, and gross margin was 554 basis points higher at 54% in comparison to 48.6% last year, mainly on account of product mix and improved buying diversification and efficiency while keeping employee cost and other expenses under check. Lumel SA, the electronics business in Poland also delivered a good performance during FY '26, supported by new customer wins, product diversification and expansion into newer geographies. Adjusted EBITDA grew by more than 32% during the year. A key milestone during the year was the commissioning of one of Europe's most advanced electronics assembly lines, which significantly enhanced manufacturing flexibility and position the business well for future growth. We're also pleased to report a meaningful progress at Lumel Alucast during the year. through decisive actions such as exiting low-margin legacy contracts, improving customer pricing and increasing focus on higher-margin nonautomotive opportunities the business move towards a more sustainable and profitable operating model in spite of the fact that, that turnover shrunk by 21% in Polish currency during the year. All focuses on efforts to bring this business back to the earlier profitability by getting nonautomotive business in the coming quarters. Also, Shanghai, V&A, [indiscernible], U.S.A. and U.K. have all shown good growth with positive EBITDA in all the 3 entities. We are also working to grow them much faster in the coming years, albeit on a smaller base to add to the group revenue and profitability. On the industry front, the broader sector developments remain encouraging. Despite global macro volatility emerging from tariffing imposition, West Asia war and supply chain disruptions. In India, strong government focus on manufacturing, renewable energy, transport and transmission infrastructure, smart metering and electronics localization continue to create long-term demand for the electrical and instrumentation business. The progress on global trade agreements and consumed policy support push towards renewable energy sources and mobility aimed to create a favorable long-term environment. Global market landscape also remains structurally favorable. It is driven by long-term investments in electrification, automation, grid modernization and renewable energy integration. While Europe witnessed lower industrial activity markets such as U.S., Southeast Asia and Africa are seeing increasing investments in power, infrastructure and industrial automation, creating a strong long-term opportunities for companies like Rishabh, who have always had a version in addition to the focus on domestic markets. These emerging trends align well with Rise's portfolio and reinforce confidence in the long-term business building. As we enter FY '27, we remain optimistic about the opportunities lying ahead. The upcoming state-of-the-art manufacturing capabilities built at Nashik and commissioned at the end of last financial year, expanding global customer base in Western countries, a robust new product pipeline for India, Lumel, V&A, U.S. and U.K. position the Rishabh Group well for the next phase of growth in the coming years. We must thank all our teams of dedicated employees, led by our CEO, Dinesh Musalekar, without whom this would not have been possible. We remain very much committed and focused on delivering long-term value to all our stakeholders in the years to come. Thank you. I will now hand over the call to Dinesh for deeper engagement and operational performance for the financial year '26. Over to you, Dinesh.

Thank you, sir, and good evening, ladies and gentlemen. So financial year '26 marked a year of a strong execution and significant strategic progress for Rishabh Group amidst a dynamic global operating environment affecting all countries adversely. I hope the war cloud settled down, and we can have even better in the financial year '27. At the beginning of the year, we had laid out a strong profitability road map, and I'm pleased to report that we have successfully delivered on our commitment with consolidated EBITDA reaching to INR 126 crores and adjusted EBITDA reaching to INR 136 crores in FY '26, overreaching on the earlier commitment of INR 110 crores at the start of the year. So we have continued to build a solid and resilient foundation anchored in our product and technology competencies with extensive sales and marketing efforts. This has pulled up our consolidated revenue recorded a growth of 9.3% year-on-year in Q4 FY '26 and 7.6% in FY '26 for the year. More importantly, the profitability has more than doubled compared to last year as a result of this foundation. Consolidated EBITDA saw a growth of 161% in FY '26, driven by better raw material sourcing, operational efficiencies, product mix improvements and operating leverages. Over the last 6 quarters, we have consistently improved margins across both the stand-alone and consolidated business through better planning, procurement, efficiencies, faster production cycles, inventory optimization production automation and a clear focus on profitable growth. The EEI, that is Electrical and Electronics Instrumentation segment, continued to be the primary growth engine for the group. The EEI segment has registered a growth of 17.5% in FY '26 on a year-on-year basis. This performance was supported by product diversification, new launches and improved geographical reaches. We continue to execute our long-term innovation road map where new products are expected to contribute meaningfully to the future revenues. The stand-alone Rishabh Instruments business remained a consistent performer, the team's deep customer engagement, new product development and successful conversion of opportunities across key international markets have resulted in bagging high-margin business across the regions. We continue to see healthy and sustainable demand momentum across export as well as domestic markets and remain confident of further growth in the same trajectory, supported by strong order pipeline. Now coming to Lumel SA, which has demonstrated resilience during financial year '26, while the European markets remained relatively subdued due to macroeconomic pressures and slower industrial spending. We -- while the top line for us remained moderate, Lumel SA has contributed 51% of the group's consolidated at with a 23% EBITDA backed by major wins in our niche market segments. We remain confident that several opportunities that we are working on will also convert into orders towards the coming quarters. Profitability has always remained strong, supported by favorable mix of high-margin service revenues and project-based solutions along with disciplined execution. As mentioned by Mr. Goliya, another key milestone in financial year '26 for Lumel SA was the commissioning of the most advanced electronic assembly line, which we call as SMT line, significantly enhancing our manufacturing complexity as well as flexibility and further future growth. 40% of this investment was supported by European Union funds as this setup will be used to design and produce the next generation of very complex medium-voltage controllers. Our focus on STI USA, U.K. and V&A in China have started yielding results as these entities have recorded 53%, 25% and 23% growth on the top line, respectively. And all these 3 companies together, cumulatively have contributed 13% of our electrical electronic instrumentation business. The solar inverter business delivered encouraging progress during the financial year '26 with the successful launch of single phase ion inventor gaining very strong market acceptance and generating initial volumes. The business has now turned operationally profitable, thanks to the new designs and automation of production. With the introduction of hybrid and next generation of new inverters in the product development pipeline, we are expecting that the sales in financial year '27 to ramp up for inverters. The long-term growth opportunities will continue in this segment as renewable energy adoption continues to accelerate both in India as well as abroad. Overall, in Electrical and Electronic Instrumentation segment, we continue to see significant opportunities across energy efficiency, metering, automation, testing and measurement instruments and renewable energy solutions. Now coming to Lumel Alucast which continues its planned transition towards more sustainable, profitable and competitive operating model. While revenues declined as planned and communicated to all of you in advance, profitability improved significantly. Adjusted EBITDA for financial year '26 improved to INR 33 million compared to a loss of INR 150 million last year, reflecting the benefits of our portfolio restructuring, pricing improvements and overall operational efficiencies, we continue to build a strong pipeline of nonautomotive and selective automotive opportunities. that will support future growth and profitability. To bring this business back on track, we continue to work on multiple RFQs and a few of which have been approved and few we remain engaged with several key global customers. The qualification cycles in this business are longer as is the nature of the business. We remain confident that this transition will create more profitable business in financial year '27 and start its mounting trajectory from financial year '28. The Nashik expansion CapEx is now completed with 2 manufacturing facilities, almost ready and are under commissioning now. These facilities will effectively double our production capacity, enhancing our ability to meet rising export and domestic demand across the product lines that we serve and support future growth. In parallel, we continue to invest aggressively in R&D across energy meter, medium voltage products, automation solutions and solar products to expand our addressable market. We continue to advance our innovation road map with new products expected to contribute meaningfully to future revenues while expanding our global footprint beyond India and Europe into high-growth markets such as U.S., Latin America, Africa, Southeast Asia, where investments in electrification, industrial and road rail infrastructure modulation and energy efficiency remained very, very strong. Looking ahead for financial year '27, we remain optimistic on supportive policy developments around trade and domestic manufacturing which will create more favorable long-term tailwind to deliver us, say, about 20%, 25% of growth in EEI segment in spite of geopolitical uncertainties and West Asia war and the consequent shortages of petroleum products throughout the world. I'd like to thank our stakeholders which include our employees of the group companies, customers, suppliers and, of course, the shareholders for their continued trust and support without whom we may not be able to produce the results that we have. With that, I conclude and ask Vishal to give glimpses of our [indiscernible]. Over to you, Vishal.

Thank you, sir. Good evening, all. Before I start on the financial performance, please note that all the numbers are in INR. The consolidated revenue for quarter 4 FY '26 stood at INR 2,049 million, and for full year FY '26 stood at INR 7,751 million. reflecting a growth of 9.3% over INR 1,875 million in quarter 4 of FY '25 and 7.6% from INR 7,203 million in FY '25, respectively, on a year-on-year basis. The consolidated EBITDA stood at INR 333 million for quarter 4 of FY '26, marking 105.8% year-on-year increase over INR 162 million in Q4 FY '25. And EBITDA margins improved by 760 basis points to 16.2% from 8.6% in Q4 FY '25. In Q4 FY '26, the consolidated EBITDA is after provision of INR 22 million, comprising INR 20 million towards the soft cost and INR 2 million due to the implementation of the new labor code bill. Further annual consolidated EBITDA stood at INR 1,264 million for FY '26, marking 161.1% year-on-year increase over INR 484 million in FY '25. The EBITDA margins improved by 960 basis points to 16.3% on a year-on-year basis from 6.7% in FY '25. In FY '26, the consolidated EBITDA is after provision of INR 99 million, comprising INR 73 million towards the soft cost and INR 26 million due to the implementation of the new labor code bill. The profit after tax for Q4 FY '26 stood at INR 200 million, increasing by 229.4% year-on-year from INR 61 million in Q4 FY '25. While PAT for FY '26 stood at INR 823 million, a substantial 292.2% year-on-year growth from INR 210 million in FY '25. Now with respect to the stand-alone performance of Rishabh Instruments, the revenue stood at INR 788 million for Q4 FY '26 registering a 15.2% year-on-year growth from INR 684 million in Q4 FY '25. In FY '26, the stand-alone revenue stood at INR 2,676 million, reflecting 11.9% year-on-year increase from INR 2,392 million in FY '25. The stand-alone EBITDA for Q4 FY '26 stood at INR 161 million, up by 14.7% from INR 140 million in Q4 FY '25 with EBITDA margins at 20.4%. For full year, the stand-alone EBITDA stood at INR 604 million, which is up by 72.6% from INR 350 million in FY '25, with EBITDA margins at 22.6%. That is improved by 800 basis points year-on-year from 14.6% in FY '25. It includes provision of INR 57 million, comprising INR 37 million towards soft cost and INR 26 million on account of implementation of the new labor code bill in FY '26. The stand-alone profit after tax for quarter 4 FY '26 stood at INR 107 million, up by 21.2% year-on-year from INR 89 million in Q4 FY '25. While the PAT for FY '26 was INR 417 million, registering a 78.2% year-on-year growth over to INR 34 million in FY '25. Now with respect to Lumel SA, Poland, the revenue stood at INR 585 million, reflecting a staggering 35.9% year-on-year increase from INR 430 million in Q4 FY '25. While FY '26 revenue remained at INR 2,286 million, growing by almost 15% year-on-year from INR 1,989 million in FY '25. The adjusted EBITDA for Q4 FY '26 stood at INR 167 million, up by 69% year-on-year from INR 99 million in Q4 FY '25. And for FY '26, the adjusted EBITDA stood at INR 535 million, registering a 32.2% year-on-year growth over INR 405 million in FY '25. The adjusted EBITDA margins expanded to 28.6% in Q4 FY '26 from 23% in Q4 FY '25, an improvement of 560 basis points while margins for FY '26 remain at 23.4%, which is higher by 310 basis points on a year-on-year basis from 20.4% in FY '25. The profit after tax for Q4 FY '26 was INR 141 million, up by 94% year-on-year from INR 73 million in Q4 FY '25. And for FY '26, the PAT stood at INR 419 million, reflecting a 19.5% year-on-year growth from INR 350 million in FY '25. Now with respect to our die-casting business at Poland, -- the revenue for quarter 4 FY '26 stood at $575 million, reflecting a de-growth of 22.8% on a year-on-year basis. from -- this is from $745 million in Q4 FY '25. For FY '26, the revenue stood at INR 2,383 million, down by 9.6% on a year-on-year basis from 2,636 in FY '25. The adjusted EBITDA for FY '26 remain at $33 million compared to a loss of A15 million in FY '20. The adjusted EBITDA margin stood at 1.4% for FY '26, increased by 710 basis points from minus 5.7% in FY '25. The profit after tax for Alucast business for Q4 FY '26 remained negative at INR 58 million. And for FY '26, it also remained negative at INR 41 million, though a strong improvement from the negative INR 252 million in FY '25. On the consolidated level, we remain debt-free with a strong balance sheet. Net cash and cash equivalents as on 31st March 2026, stands at INR 1,276 million. With this, I shall now leave the floor open for Q&A. Thank you.

Yes. Before we move on -- thanks, Vishal. Before we move on this, I think we missed short on one point. I would like to highlight that in today's board meeting, there was a decision made on the issuing of dividend. So this is -- I would like Mr. Goliya to announce this will be better because there could be some questions around that. [Foreign Language]

Yes. So for the year concluded since it was such a good year, we will give a dividend of 20% on the basis -- on the share capital. So for INR 10 share, there will be a dividend of INR 2 and all the formalities will be done before it goes to the stock exchange and then you'll see the hard cash. I hope it's good news for all the investors.

Thank you sir.

[Operator Instructions] The first question comes from the line of Rahul Jain with Cadence.

Congratulations on great numbers. And also thanks a lot for the dividend announcement. And I hope that we will continue to share dividends to the tune of 20% or more going ahead. Coming down to my question, sir, with regards to the EEI business. So with regards to that business, how do we look at growth going ahead in terms of the stand-alone sales and also the human sales growth?

Okay. If I may answer this for the whole EEI business, we are looking at anywhere between 20% to 25% -- around 20% top line growth and at a EBITDA profit of -- EBITDA level of about 20% to 22%, like same guidelines, which we projected last year that will continue. In terms of composition, Rishabh will -- is also expected to grow around the same rate and also Lumel SA, we will be growing around the same rate. These are 2 big part of that, which cover almost like 85% of this EEI business. the remaining about 13%, 15%, which we are talking, this is at a lower base. So that I expect to grow faster. Like for example, USA, we have seen 50% growth year-on-year. we projected about 25%. We recorded about 25%, 22% with China and U.K. business. So they will be more towards 30% than 20%. So overall, it will be around 20%, 20%, 22%. For Rishabh and Lumel, the big companies will be around 20% top line and the other smaller companies will be around 30% growth average. I mean it all even sort with 20% to 22% growth. But on the profitability, we maintain the same level of profitability at all the companies.

So if you look at overall profitability, so EBITDA is roughly around 24% plus in the current year on the EEI business. So going ahead with the kind of growth to the tune of 22% to 25%. Do you feel there is scope of margin improvement due to operating leverage.

Yes. So I'll answer that question by way of product mix because our product mix has got contribution level margin from 20% to 70%. So for example, solar business is around 20%, 20% there. And then for EMS is also around 20%. But if you look at some of the high-end products like power quality analyzers will be 60%, 70%, and there's a lot of business which is in between. So each -- because we are spread across the geographies and companies, so the segments will go up and down. So generally, if the product range is very narrow and you have same kind of cost of manufacturing and your contribution margins are same, then the when the sales goes up and you don't add so much cost to that if your EBITDA should potentially increase. But in our case, like, for example, this year, we may sell more solar the top line will go up. That percentage will -- absolute numbers will always grow all of them. But that percentage can be -- not 24%, can be 22% also. So we want to be very kind of conservative and aware of this fact. So we want to commit 20% to 22% as a EBITDA. It could be more. The same thing we committed last year. We delivered more. So that's a better way to project. So -- but I'm not trying to predict that we had 24% EBITDA now. I think I've dropped on the call.

No, we can hear, sir. We can hear you.

Okay. Okay. Yes. So because the sales is going to grow 20% next year. So EBITDA is going to become 30%. I don't want to say that. I wish it happens that way, but the more realistic is more like 20% to 22%. So we can have a couple of percent up and down, but that's where we want to put our guidelines.

Also, there's a lot of geopolitical uncertainty. So all of us are aware that if something happens in this oil shortage and shops and lockdown. I mean so many rumors are floating. I don't want to put my time into that. But we should be conscious of that, that all this is subject to normal working and no upsetting at least in India. Of course, if the world gets affected, we get affected. But I hope nothing gets affected.

So wishing that we continue the trend of beating our guidance second question with regards to margin also given the current environment and the energy prices, do we feel on the energy side, typically for the European part of the business. We should not have any issues on the margin front?

See, on the margin front, we try to -- at least on the EEI business, we try to pass on the cost of manufacturing, if it goes up whether on material or something where we do it because we have our own brand, our own products, our own prices. So we do that. So that's not a big problem. But also the Other side of it is advantage for our business because we are in the business of energy efficiency, and we help companies to serve their cost of manufacturing sales as energy build. So a lot of people will look at it as an initiative to invest and do all those things. So -- and also in Europe, the regulations are driving to have more energy optimization. There is ISO 50,000, which has come in place, and you've got all those ESG compliances where you are expected to monitor, control your energy patterns, energy consumption and reduce that. So when somebody wants to do that, they have to come to companies like us to do solution.

Last question, sir, on the part. In the previous interactions, we have been talking about a sharp drop in the sales for the year FY '27. And then for FY '28 is going back to the levels of somewhere year FY '25. And also with regards to margin, your guidance was to do around 5%, 6% -- 5% to 7% margins for FY '27. I mean this business will go somewhere trying to reach double-digit margins per year ahead. So do we stick to those kind of numbers? Or is there any change over there?

Yes. On Lumel Alucast business, the year which we closed was a transition where we phased out loss-making businesses, and we have that vacuum, which is created. So we had to do away with a from INR 250 crores business, which we are doing, we kind of dropped to about INR 180 crores odd. So there's been a drop. And this drop was part of those we are filling up. So in total, those 2 businesses, which went out accounted for about INR 100 crores -- close to INR 100 crores of business. So we have been able to fill in some of it already and some which is going on. So that filling up of those business is something which is our priority this year. This year also, we are not putting big margin numbers on that. So our focus for this year also for aluminum die casting business is not to lose the money and build these projects once these projects are because once we win the project, we have to prepare the tools and launch those. So that will not add volume. The volume will come from order booking plus 1 year. So we have started doing part of it. In the remaining this year, we'll build that and try to have no losses. Last year also, we said 0. We did about INR 3 crores, INR 3.5 crores. And this year also, the situation could be similar. Next year will be something where we are looking at getting double-digit number, not this financial next financial year. That's more or less the trajectory on which we are riding.

[Operator Instructions] The next question comes from the line of Kiran [indiscernible] with TableTree Capital.

Congratulations on turning around this company. I mean it was in big trouble in FY '25, and there's been a significant turnaround. So many congratulations.

Sorry Mr. Kiran, could you please use your handset.

Sorry, is this better?

Yes, I could hear you, even earlier also...

Perfect. Right. Sir, in terms of EEI business, we are now at about INR 536 crores, INR 540 crores and given a guidance of 20%, 25% with 20% 22% margin, where are we -- we are primarily in the low-voltage business. Where are we on the medium voltage business in terms of -- is it still in the sampling stage? Or is it in -- will it meaningfully add to our revenues in FY '27 or is that 2, 3 years away? And any plans of getting into high voltage, so that's like the EEI question.

Okay. On this, we already have a few products which are already released. Some medium voltage current transformers we have already released. And also in the medium voltage, we have got protection related, which Richard is Lunel is doing and cities are done at Rishabh. So there is something which has already started to happen and this will continue. So with the new facility, which will be commissioned by June, July, so we will ramp it up more there. So we will be -- we already -- our R&D team is already working on medium voltage and PTs. So the specs, prints and design work has already started. So we expect these things to be ready by end of this financial year. So all the -- there will be 4 or 5 products, which will be really additional 4 or 5 products to what we have by end of this financial year, and then the sales will start happening from the next year. And on the high voltage, as of now, we don't have any intentions or any plans to get into that. It's 2 diverse for us. And also medium voltage, we don't want to go into each and everything. We want to expand our portfolio where we are strong. Cities, current transform, we are very strong. We are the largest manufacturer of cities in the whole world by value by number of products that we sell. We are making 6,000 cities daily. Now we are expanding that capacity to 10,000 per day that we are -- as we speak, this is a plan which is ongoing with additional clients, additional equipment and manpower and floor space, et cetera. So it makes more sense for us to expand this current transformer business more into medium-voltage Likewise, we are already into power quality analyzers. So these, we can extend them into even we call this as a medium voltage protection related is not like protection. It's actually a controller of the heart of the whole medium voltage of panel, which controls everything. So that's a natural progression for us. So we have that product. They are expanding more and more. The -- we also won European Union project for Lumel SA. As a part of that, we are -- we have put this new SMT line, which will have a lot of compliances which will come into India eventually. On the safety, cybersecurity at the level of manufacturing in the equipment itself. They call it as still 1 CLI qualification. So those are the things which we are doing, which are really very exciting and nice product that we are rolling out. So they will go into medium multis. So high voltage, we, at the moment, we don't want to touch.

Got it, sir. Got it. And sir, on the PBC business, I know there's been a long history and there is a particular history to HBDC business, we used to make very good margins way back in the past. Now we are barely breakeven. Sir, 2 part question. One, in FY '27, you will see at least sitting INR 200 crore sales. I know we have talked about breakeven INR 200 crore sales? Or is it lesser than INR 200 crore sales? Point number two, is the management come...

Yes, please go ahead.

And is there -- yes, sure, sir. And is there any plans from the management to demerge Alucast given it has completely different dynamics. There is a history to it, plants being 5x and all that stuff. But is there any plan or any vision for demerging the Alucast business.

Yes. There are 2 questions in that. First of all, as we said last year, the sales drop, but also we had some of those outgoing contracts, which were there for half of the year. So to that extent, on the volume of business, it's worse than last year. On the positive side, we don't have anything loss making. So we are filling in. So our target is to come close to what we did, what we closed last year. So this is where we are. And we don't see -- we have some gap to cover this. So I'm not expecting growth in Lumel Alucast than what we had last year on the top line. But on the bottom line, we really want to -- there we spoke in a few of the calls that here also, the issues are not with profitability now. The issues are to -- we have reduced substantial cost, people changing from 3 shifts to 2 shifts, many things, whatever we could do without -- we are at a stage where that resource between need is bare minimum needed to run that facility, and we have to fill in there. So question now is of the breakeven, from the volume perspective, not from the profitability perspective. So there is some work to be done, which is in progress and which is encouraging also. So that's the challenge we have. So with these 2 things kept in mind, we still want to give the same guideline like we want to not lose money. And also there may not be growth, it could be flattish. But we will have -- the target is to sign as many contracts as possible, which will come into play end of the year or beginning of next financial year. And coming to the second question, are coming to the second question, that's something which we don't want to commit either yes or no, but that's a possible scenario also, but we are not committed yes or no on that. Maybe Mr. Goliya may shed some light on this.

Yes, that's a possibility, I see, in business, we discuss many, many things. If you demerge it, how do you demerge it? Do you keep it within the group? Do you sell it to somebody. But as of now, absolutely no decision has been taken. We are doing our best to turn it profitable. Dinesh explained to you how we removed all the loss-making and turn costs have been controlled very much. So I think if we do something, we'll definitely inform you at the right time. But as of now, there is nothing concrete.

Got it, sir. And sir, in -- do you see the Alucast thing, this year, we did INR 238 crores as per the presentation. So we are seeing in FY '27, we will be below INR 200 crores, right? So that's what we are saying.

Yes, yes, yes.

Okay. Okay. Around INR 180 crore is a fair estimate. Okay, got it.

See, the thing is -- Kiran, there is also another element to that because ForEx also has some influence. So when I talk, I talk in local currencies here or euros, so the devaluation of rupee also has skewed a little bit on that. If it is at the same level, it will be similar. If the rupee becomes stronger, then that gap will be not so big. So this is also another element to that because we are talking in Indian rupees currencies and the whole business is in Euros.

Got it. So in Polish currency, we are basically saying we are below INR 180 crores, if you consider INR 85 already. So next year also will be around INR 180 crores. That's how you are seeing it on a constant currency exactly.

Yes, yes. Exactly.

The next question comes from the line of Prateek Giri with Subh Labh Research.

A good set of numbers. Dinesh, I hope I'm audible. My first question is on solar inverter opportunity. So in fact, it's a part of a broader question, which is a growth lever for the company, and I would like some objectives around them. So the first point I wanted to understand is solar inverter and second is U.S. opportunity. If we see our development of solar margin probably for the past 6 to 8 quarters, we have invested a lot of bandwidth in it, whereas the bigger players have already put their capacity and probably are churning out production also. I just want some objective sense that how much this business will do for us in FY '27. Even this year, the growth is 8%, which is very tiny, given the size of the business. and add-on to this is U.S. opportunity. We were very bullish about U.S. opportunity. So if you can give the number of the revenue from U.S. this year and what is the target we have kept for the next year.

Yes, let me answer your second question first because it's a very straight and small answer for that. last 2 years, we have grown 50% year-on-year, 2 years back to back. So there is a great rate of growth, I would say. So that business used to be around $1 million. We -- from $1 million, we got it to $2 million. From $2 million, we bought it to $3 million now. And next year, we are targeting in spite of all this Trump and all these things which was going on for the whole year. So we got $3 million last year. And now this year, we are planning to get into another of 40%, 50% growth. That's what is planned. So there is a steep growth plan for years, and we are adding resources also for that. We started a small Mexico operations as well. Many new customers and projects are initiated. We are having more and more products getting real certified, so that is helping us. So this is all going good. So that will be a strong this thing. We want to get U.S. business to about INR 100 crores in couple of years time, 2, 3 years' time. That's the plan. We'll see how we'll work on that. So there is a plan to get it to INR 100 crores business in a -- 3, 4 years of time. That's the plan. So that's on the U.S. are very bullish, and we are going, and then we may look at South America also. That's also in the trajectory to probably open an office in South America and connect all those Americas together and grow that. That's one part. Coming to your first question on solar. It's like this, you are doing a lot of ground work and like this bamboo tree, a lot of work has happened and the first lease have started coming. So first, we are in this whole dilemma whether we want to sell more because the more you sell, the more losses we are making. That is gone. Now we introduced this single phase inverter which we had really, really good response to that, but these launches happened in the third and fourth quarter of last year. So up to close to about 10 kilowatts, we have the single phase and also the second one. up to 20 kilowatt, the neo 3 phase also has been this. Now it is done in 3 phases. First is to get the design and production to bid -- to be competitive in the market because most of the other people which are referring, we are getting stats from China and attending it. It's no secret, but it's all Chinese thing. So we are to bid them, we have to get our design procurement costs. We have to continue to be volume gain.

Yes. Yes. I'm sorry to interrupt you. So sorry. I understand we have perfected the product over the -- probably past 2, 3 quarters. And I am glad that now it's a unit level profitable product. If you can help me understand the sales strategy which we are following going ahead. Are we going to partner with these solar players? Or are we going to...

I was coming that. If you want to share the numbers, I can give you the numbers. We are looking for INR 24 crores, INR 25 crores business in the coming financial year, it's doubling. That's one. And then we are also looking at 3, 4 major people who are buying from China and assembling are going to partner with them and will be an OEM supplier for them because they have got brand. And we will do our own brand also. We have got massive campaigns to drive it. It's not that we are just playing around with it. There's a complete concrete strategy for that, and we will do that. And 1 or 2 sorts of manufacturing are going to be used for this one. So we are putting up a manufacturing setup, which Chinese do in their countries, how they manufacture mass automated production line, we are putting all of that. If you have to build them, we have to play the game. This is how the strategy is. And I'm sure that we'll be successful with that. And those are numbers and strategies if I had to tell you very quickly.

No, that is really helpful, Dinesh. I sincerely look forward for this segment to scale from here because it has taken a lot of our at least mental bandwidth in last 2 years. Just one last question.

I can tell you is we're also adding a hybrid. If you add hybrid, we can export it because outside of India, mostly even in India also people are asking for hybrid because you want to manage your energy, which is generated when you want to consume so hybrid question also, we started -- we'll be starting to work on single-saleybrid -- once we do that, we -- our markets to Saudi Arabia, even in Europe will open up.

Understood. Understood. I'll just have a follow up, Dinesh join back the queue after that. $3 million U.S. revenue to $4.5 million U.S. revenue I understand the 50% revenue growth looks very good. But in my opinion, in such a big market, just INR 12 crores, INR 13 crores of incremental business probably even under achievement for Rishabh, given the kind of product portfolio we have. So if you can do something there, that will be -- I think that will give us another lever for kicking in the growth in the company. That's all.