Action Construction Equipment Limited — Q3 FY26

Action Construction Equipment Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=fe7fW5Xc-MI Published: 3 months ago

0:01 1 second Ladies and gentlemen, good day and welcome to Q3 FI26 Action Construction Equipment Limited conference call hosted 0:09 9 seconds by MK Global Financial Services. As a reminder, all participle lines will be in the listen only mode and there will be an opportunity for you to ask 0:17 17 seconds questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then 0:25 25 seconds zero on attachment phone. Please note that this conference is then recorded. A handhand conference over to Mr. Abhishek 0:32 32 seconds Tapara from MK Global Financial Services Limited. Thank you and over to you sir. 0:38 38 seconds Good afternoon everyone. I would like to welcome the management and thank them for this opportunity. We have with us today Mr. Sorghal executive director, 0:47 47 seconds Mr. Rajan Lutra, Chief Financial Officer and Mr. Vom Aaral, President. I shall now hand over the call to the management for their opening remarks. Over to you gentlemen. 0:58 58 seconds Yes. Uh good afternoon and welcome to this earnings conference call for discussing the results for the quarter and 9 month ended 31st December 2025. 1:10 1 minute, 10 seconds We take this opportunity to wish all of you a wonderful new year with good health and happiness. 1:17 1 minute, 17 seconds And along with me in today's earnings call we have our CFO Mr. Rajan Dutra and our president Mr. Wayal. 1:24 1 minute, 24 seconds I hope that all of you have had an opportunity to look at the company's financial statements and the earnings presentation which have been circulated and uploaded at the stock exchanges. 1:35 1 minute, 35 seconds Innovation, value and trust are the pillars on which ACE has built its market leadership. As a reflection of 1:43 1 minute, 43 seconds our engineering capability and our deep understanding of India's project site requirements, the company has recently unveiled an extensive suit of new generation technology powered equipment. 1:55 1 minute, 55 seconds The new portfolio includes intelligent tower cranes, passenger lifts, AI assisted pick and carry cranes, advanced aerial work platforms, high performance 2:04 2 minutes, 4 seconds deli handlers and a range of advanced metal handling systems and robust construction equipment reflecting as 2:11 2 minutes, 11 seconds sustained focus on new age technology driving performance, reliability and safety across India's infrastructure and 2:18 2 minutes, 18 seconds industrial sectors. These machines offer higher productivity, enarm safety and more intuitive operation which while 2:27 2 minutes, 27 seconds ensuring reduced total cost of ownership for our customers as as India's infrastructure momentum 2:34 2 minutes, 34 seconds accelerates as remains committed to delivering world-class solutions that strengthen our nation's growth story. 2:42 2 minutes, 42 seconds Now to briefly on the financial performance for the third quarter of FI26. On a standalone basis, the total income was flattish on a year-on-year 2:50 2 minutes, 50 seconds basis at rupees 888 crores approximately with an AITA margin of 18.5%. 2:57 2 minutes, 57 seconds The AITA of company grew by 2.48% to rupees 164 crores as against 160 crores in the corresponding quarter last year. 3:07 3 minutes, 7 seconds The AITA margin expanded 74 basis points to 18.5%. 3:11 3 minutes, 11 seconds The PBT grew by 4.28% 28% to 151 crores against 144 crores and stood at 17%. The 3:19 3 minutes, 19 seconds pad grew by 8 the pad grew by 8.15% to rupees 11 5.88 crores against rupees 107 crores and stood at 13.04%. 3:31 3 minutes, 31 seconds The PBT and PAT margins expanded by 96 basis points and 117 basis points respectively on year-on-year basis. 3:40 3 minutes, 40 seconds For the 9 months ended FI26, total income declined by 2 3.21% yearonear 3:47 3 minutes, 47 seconds reflecting the subdued performance in H1 and stood at around 2373 crores. Despite 3:56 3 minutes, 56 seconds this, AIA grew by 7.15% to rupees 458 crores with AITA margins expanding by 186 basis points to 19.32%. 4:08 4 minutes, 8 seconds Profit before tax increased by 8.54% to rupees 415 crores with CBT margins improving from one improving by 190 basis points to 17.5%. 4:20 4 minutes, 20 seconds Profit after tax stood at around 316 crores registering a yearon-year growth of 11%. While PAT margins expanded by 171 basis points to 13.34%. 4:33 4 minutes, 33 seconds From a sequential perspective in quarter 3 FI26 operational revenues grew 15% quarteron quarter. Operating AITA 4:41 4 minutes, 41 seconds increased 16.28% 28% to 128 crores while PBT and PAT rose by 9.9% and 11.5% quarteron quarter respectively. 4:54 4 minutes, 54 seconds Margins reflect a 5 1/2 crores provision towards additional graduity and leave in cachment arising from implementation of 5:02 5 minutes, 2 seconds new labor codes excluding this margin profile would have been even higher. 5:09 5 minutes, 9 seconds The contribution of crane, petal handling and construction equipment segment stood at 90% of our total revenue and we reiterated our market dominant position while registering 5:18 5 minutes, 18 seconds revenue of rupees 763 crores which has grown by 10% as compared to quarter 2 FI26. 5:27 5 minutes, 27 seconds The company recorded sales of 2710 units in the quarter. The margins expanded to 20% and stood at 152.82 5:36 5 minutes, 36 seconds crores. The revenue contribution of agree segment stood at about 10% and we registered revenue of 89.44 crores. 5:46 5 minutes, 46 seconds Our quarterly performance along with the sequential improvement in demand as the year progressed has reinforced our assessment that the initial softness 5:55 5 minutes, 55 seconds following the transition from BS3 and BS4 to CV5 was temporary. Demand stabilized in quarter 2 and return to 6:02 6 minutes, 2 seconds normaly in quarter 3. Quarter three sales have been particularly encouraging especially when viewed against the higher base of quarter 3 of last year 6:11 6 minutes, 11 seconds which had benefited from pre- buying of equipment. Looking ahead we expect timely project awards improved on ground 6:18 6 minutes, 18 seconds execution supportive policy measures and higher government spending to create a favorable operating environment for the company in the coming quarters. 6:27 6 minutes, 27 seconds The India EU FDA and the proposed US deal at the rate of 18% tariffs are structural positives for Indian 6:36 6 minutes, 36 seconds manufacturing boosting both competitiveness and sentiment. 6:41 6 minutes, 41 seconds India is now better placed than key competing markets especially China and these developments are likely to reignite the China plus1 strategy 6:48 6 minutes, 48 seconds driving manufacturing growth which augers well for us. 6:53 6 minutes, 53 seconds Further, the honorable finance minister's union budget 2026 reinforces a growth oriented and physically disciplined road map for India's 7:01 7 minutes, 1 second development with a continued thrust on capital expenditure. The government of India has sustained its infra focus with 7:09 7 minutes, 9 seconds keex spending growing at a c of 19.4% over financial year 22 to financial year 7:16 7 minutes, 16 seconds 27 budget estimate. The government has budgeted the capex spending at 11.5% 7:22 7 minutes, 22 seconds year-on-year in FI27 budget estimate to 12.21 lakh crores. The capex spend to GDP is healthy at 3.1%. 7:34 7 minutes, 34 seconds Productive capex to create infra assets is crucial for amplifying productivity which will further fuel economic growth, enhance global competitiveness and 7:42 7 minutes, 42 seconds accelerate technological innovation in the country. 7:46 7 minutes, 46 seconds The budget prioritizes infrastructure and manufacturing through measures such as the enhancement of construction and 7:53 7 minutes, 53 seconds infrastructure equipment scheme to promote domestic manufacturing of high value and technologically advanced equipment. the proposed infrastructure 8:02 8 minutes, 2 seconds risk guarantee fund and the development of dedicated freight corridors, 20 new national waterways and seven highspeed 8:11 8 minutes, 11 seconds rail corridors as growth connectors. An outlay of 5,000 crores per city economic 8:19 8 minutes, 19 seconds region over 5 years has been proposed to support infrastructure development in tier 2 and tier three cities through a 8:27 8 minutes, 27 seconds reform and result linked financing framework alongside incentives for municipal bond issuance and continent support under the Amrut. 8:35 8 minutes, 35 seconds These initiatives are expected to accelerate project execution, strengthen logistics and drive sustained demand for the company. 8:45 8 minutes, 45 seconds With our enhanced capacities and execution readiness, the company remains well positioned to capitalize on these 8:52 8 minutes, 52 seconds opportunities and we are optimistic about our medium to long-term growth prospects. Also, we expect our top line 9:00 9 minutes to remain flattish during the current year with improved margin profile as compared to the last year. With this, uh 9:08 9 minutes, 8 seconds I would like to open the call for questions and answer session. Thank you. 9:14 9 minutes, 14 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask question may press star and one on the dashed on telephone. 9:24 9 minutes, 24 seconds If you wish to remove yourself from question Q, you may press star and two. 9:29 9 minutes, 29 seconds Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question Q assembles. 9:51 9 minutes, 51 seconds The first question is from the line of GV Coyle from scenario Alpha. Please go ahead. 9:58 9 minutes, 58 seconds Hi, I'm a Yes, you're able. 10:02 10 minutes, 2 seconds Good evening, sir. Uh my question is uh more on the industry side. Uh I uh what are you seeing uh in the terms of the 10:10 10 minutes, 10 seconds competition from the Chinese players? Uh are you seeing any kind of uh increase in their intensity in the terms of uh uh 10:18 10 minutes, 18 seconds more import from China in the crane category? 10:22 10 minutes, 22 seconds We are specifically talking about the crane category. 10:26 10 minutes, 26 seconds Yes sir. And more than construction equipment as Okay. See Chinese players are reasonably aggressive. There is no denying the 10:34 10 minutes, 34 seconds fact. And before going on to crane, let me just brief you a little on the excavator market. Although we are not present there. I'm talking of the track 10:42 10 minutes, 42 seconds excavator. So in the last 5 years they have taken up 20 25% market in India uh on account of their predatory pricing and the credit terms and all they offer. 10:52 10 minutes, 52 seconds So yes they are reasonably aggressive in terms of their pricing and their positioning strategy with respect to credit and often they keep it so 11:00 11 minutes attractive and lucrative that customers get attracted. 11:03 11 minutes, 3 seconds Coming on to the cranes. See uh obviously the pick and carry cranes and less less than 30 35 tons capacity. 11:12 11 minutes, 12 seconds India is uh self-sufficient and uh you know uh we produce more or less all the cranes in India and we are the market leaders there and we faced no problem 11:21 11 minutes, 21 seconds from any Chinese company or any competition. 11:24 11 minutes, 24 seconds But yes with respect to the bigger cranes, the truck cranes and the crawler cranes uh yes Chinese have been very aggressive in the last I would say 5 7 8 11:33 11 minutes, 33 seconds years and uh with their pricing again predatory pricing and credit terms. So when the Indian infrastructure was growing, Indian manufacturing let's say 11:42 11 minutes, 42 seconds the infrastructure construction market was growing. So the crawler crane and the truck crane market manufactured in 11:49 11 minutes, 49 seconds India remain subdued only on account of that the Chinese players were dumping at low prices at very aggressive credit 11:57 11 minutes, 57 seconds terms. Not out of place to mention that four or five of the companies which were in the larger crane segments also shut shop in the last four or five years. 12:08 12 minutes, 8 seconds Whether it was Tata Hitachi, they stopped making crawler cranes in the last 5 10 years. Til was in some sort of 12:14 12 minutes, 14 seconds financial problem. Tadano in a joint venture in India did not start to produce even though they developed the cranes in India. Coelco stopped making 12:23 12 minutes, 23 seconds the bigger cranes only because of pricing problem from the Chinese and there's another one ABG cranes. 12:28 12 minutes, 28 seconds So looking at all this and because we were also in these bigger crane segment or heavy crane segment uh we had applied for uh filed for uh you know protection 12:37 12 minutes, 37 seconds or what you can say uh study in uh ministry of commerce and uh a proper DGTR director general trade remedies uh 12:46 12 minutes, 46 seconds proper assessment happened and it was a you know a public uh trial you can say and it lasted nearly one one and a half 12:53 12 minutes, 53 seconds years and finally duty was recommended on the Chinese crates in the month of September but unfortunately uh for some 13:02 13 minutes, 2 seconds good bad reason it has not been notified by the finance ministry and uh obviously finance ministry was totally busy with 13:10 13 minutes, 10 seconds their budget in the last uh one one and a half months. So we have been trying to seek time from them as to the reason why it has not happened or you know if any 13:18 13 minutes, 18 seconds additional information or anything is required although there is a very clear order from ministry of commerce BGTR specifying the entire proceedings which is public knowledge it can be seen 13:26 13 minutes, 26 seconds anyway so uh that is the situation uh what it is today that the anti-dumping duties which were the DJTR findings and 13:35 13 minutes, 35 seconds ruling is there but they have not been notified by the government which would have happened in December. 13:42 13 minutes, 42 seconds project and uh considering uh your opening remarks it seems like industry 13:49 13 minutes, 49 seconds environment is improving right and so uh considering both the both the cases like at this place industry environment is 13:57 13 minutes, 57 seconds improving and on the other side the Chinese competition is rising so how do you see the growth outlook uh maybe in fa 27 and 28 because we are having the 14:07 14 minutes, 7 seconds capacity with us right so what do you think about the outlook you know I've understood your You are missing two things 14:14 14 minutes, 14 seconds with respect to our core business of mobile cranes of construction equipment that we manufacture in India. 14:22 14 minutes, 22 seconds We have hardly any competition from Chinese. Right? 14:27 14 minutes, 27 seconds With respect to a particular segment of that business which is heavy grains, cranes bigger than 30 40 tons, there is 14:34 14 minutes, 34 seconds competition and as it is we are small in that segment because the Chinese have captured it over the last so many years. 14:41 14 minutes, 41 seconds We were trying to increase the manufacturing capacity capability of our company and our country 14:49 14 minutes, 49 seconds you know by getting that order. So we really do not face any problem or competition from China or Chinese aggression with respect to our core business. 14:57 14 minutes, 57 seconds So there is no problem there. Everything is fine. We are expecting growth there. 15:01 15 minutes, 1 second Yes, last one one and a half years were slow especially after the you know the election results were a little not as 15:08 15 minutes, 8 seconds per expectation and uh luckily we were saved because of pre-b buying happening of BS3 last year I'm talking of last financial year this year was slow 15:16 15 minutes, 16 seconds because a lot of pre-b buying had happened some extended monsoon overall geopolitical plus plus plus plus Mr. 15:22 15 minutes, 22 seconds Trump and tariffs sentiment and we were expecting some teley handler execution to happen from the government order which got delayed reasons beyond our 15:30 15 minutes, 30 seconds control. So always the market last 8 9 months 10 months we were able to not really increase our revenue but now things seem to be on track. The 15:37 15 minutes, 37 seconds sentiment is very much there and we are market leaders in our core segments. We do not face any threat any competition from the Chinese manufacturers with 15:45 15 minutes, 45 seconds respect to our core business and we expect that we should be in positive territory year on year in this quarter and going forward in the next year. 15:56 15 minutes, 56 seconds Okay. And uh with respect to the ramp up like I just want to understand uh uh right now what is our peak revenue uh 16:03 16 minutes, 3 seconds capacity uh that we have and how fast can uh do you think uh we can uh reach close to that number? Our 16:12 16 minutes, 12 seconds current capacity is upwards of 5,000 crores. I think uh a little tweak here and there it can go up to 5500 to 6,000 16:19 16 minutes, 19 seconds crores and we are at a revenue level of crores to around 3,300 3,400 crores as of now. So uh uh what we feel and what 16:28 16 minutes, 28 seconds we have thought and planned that by FI29 or latest by FI30 we should be somewhere between 6,000 to 7,000 crores and like I 16:37 16 minutes, 37 seconds said we already have a capacity of close to 5,500 crores. We are doing close to about 3,400 crores plus minus. So yes, we have capacity available for the next 16:46 16 minutes, 46 seconds one or two years of growth maybe more and uh as and when we see the opportunity that or or or the need to 16:54 16 minutes, 54 seconds increase capacity we will immediately work on it. We have got ample land available. In the last year uh in in the current year we bought land. In the last 17:02 17 minutes, 2 seconds year we bought land. So now we have enough land whether in Indor whether in Faridabad for our future expansion and 17:09 17 minutes, 9 seconds uh and hopefully we can do it very quickly. Arrangement required. But yes I do not see any uh foreseeable expansion 17:16 17 minutes, 16 seconds in the next uh 1 year apart from a lot of modernization automation which we are focusing on. And yes in saying this I 17:24 17 minutes, 24 seconds would just like to say that with respect to tower cranes we have envisaged increase in capacity. 17:31 17 minutes, 31 seconds So uh you know maybe in the next year we will try and start to expand that expand our capacity by setting up a new plant for tower crates 17:40 17 minutes, 40 seconds but that will be totally based on the momentum we see in the market and then then we'll accordingly we'll start to increase our capacity. 17:49 17 minutes, 49 seconds this and sir you in the opening hello Mr. I just request okay. Thank you. 17:56 17 minutes, 56 seconds Thank you. Ladies and gentlemen, in order to ensure that management is able to address questions from all the participants in the conference, please 18:04 18 minutes, 4 seconds limit a question to three three questions per participant. Do you have all of question? We request you to rejoin the queue. The next question is 18:11 18 minutes, 11 seconds from the line of Koshik Podar from KB Capital Markets Private Limited. Please go ahead. 18:17 18 minutes, 17 seconds Yeah. Can you expand a bit on your defense as well as uh export capability or what you have in mind on both these uh sphere? 18:26 18 minutes, 26 seconds Yeah, see both of them combined together uh we feel that uh we can easily do a 15% type of revenue 18:35 18 minutes, 35 seconds uh you know defense as well as uh export business put together maybe a 10% contribution coming from exports on an increased base as well and a four 5% 18:44 18 minutes, 44 seconds coming from defense in the last year we we did close to 2% in defense and in the current year again 18:53 18 minutes, 53 seconds we would be somewhere around 2% on the defense insurance business. But in saying this, I would just like to say that currently we have orders of 19:00 19 minutes approximately 500 crores in hand which have to be executed and uh because of certain uh procedural 19:09 19 minutes, 9 seconds delays uh they did not go into execution and we start to go into execution now very soon. So what I can very uh say 19:17 19 minutes, 17 seconds that for the next year we already have around 500 crores or 50 crores of orders. If you put it in percentage of next year's growth, I mean our defense 19:25 19 minutes, 25 seconds revenue can go up to 8 10% in the next year but it will not happen because obviously it'll be phased out or you know with respect to delivery. So we 19:32 19 minutes, 32 seconds expect that next year we can go up to four 5% contribution from defense at least about four 19:39 19 minutes, 39 seconds and going to exports uh last year we did 4% contribution from exports this year we are looking at somewhere around 6 to 7% more towards 7%. 19:48 19 minutes, 48 seconds Okay. So in the current year 7% uh exports and uh 2% defense will make it about 9% contribution to our business. 19:56 19 minutes, 56 seconds Next year and your objective is to get it at around yeah currently 9%. So next year we can be pretty confident it'll be somewhere 20:04 20 minutes, 4 seconds upwards of 10%. And and our plan was 10 to 15%. So the first benchmark hopefully we should uh be uh you know uh reaching 20:11 20 minutes, 11 seconds in FI27. M and in this budget there was some uh uh this incentive or something 20:19 20 minutes, 19 seconds to be given for your uh construction equipment and all those things. Can you expand on that? 20:25 20 minutes, 25 seconds Yes, the finance minister did mention upon uh CIE scheme that is construction and infrastructure equipment scheme 20:35 20 minutes, 35 seconds and uh to the best of our knowledge because we have attended certain meetings in ministry of heavy industry with respect to this and to the best of 20:43 20 minutes, 43 seconds our knowledge uh so this is a PLI scheme uh which uh wherein for the first time uh you know focus is being given to construction and infrastructure 20:51 20 minutes, 51 seconds equipment in India and especially to those equipment where our country relies mainly on imports of 20:59 20 minutes, 59 seconds equipment or where uh you know the percentage of the demand fulfillment in India is more from imports even though it is made in India but 21:08 21 minutes, 8 seconds let's say still a good quantities are being imported so that's the focus so to you know to indigenize or to do that in India whatever is getting imported into 21:16 21 minutes, 16 seconds the country and obviously most of it is from our neighboring country only because of their price and policy so here 21:24 21 minutes, 24 seconds uh this will be a proper PLI scheme with uh with uh you know some incentives based on uh uh attaining uh revenues 21:31 21 minutes, 31 seconds turnovers and uh FYI25 revenues and investments would become the benchmark. 21:38 21 minutes, 38 seconds FI25 revenues will form a part of the you know the added uh investments that that uh would be required in this 21:45 21 minutes, 45 seconds scheme. Sorry, FI25 investments would be you know uh okay 21:52 21 minutes, 52 seconds while uh uh you know uh becoming eligible for this scheme. So hopefully it should be out in the next 2 3 4 months but uh maybe it can be a face 22:00 22 minutes saver in in the essence of uh the anti-dumping duty order which we were expecting. 22:06 22 minutes, 6 seconds Okay. And uh this thing uh this uh new scheme that is uh to be come after say in 3 4 months or something um uh will 22:15 22 minutes, 15 seconds this be for newer products or for your existing products? 22:20 22 minutes, 20 seconds This is mainly for categories where our country is importing more than manufacturing in India or totally based 22:28 22 minutes, 28 seconds on you know where products are totally being imported. So if if you look at it like that cranes and trust cranes will get included in this. So basically 22:36 22 minutes, 36 seconds import substitution based on import substitution. 22:40 22 minutes, 40 seconds Yes. So the heavier crane where we were expecting anti-dumping duty uh in all probability should get included in this apart from categories like piling rigs, 22:49 22 minutes, 49 seconds reach stackers, uh aerial work platforms which are hardly being manufactured in our country. plus a lot of other machinery, 22:56 22 minutes, 56 seconds road machinery, construction equipment, smaller and bigger dumpers, uh smaller excavators, really big mining 23:04 23 minutes, 4 seconds excavators. So you know uh tunnel boarding machines, uh ropeways, a lot of other things which the country is really not producing in. 23:14 23 minutes, 14 seconds Yeah, tunnel boarding is specifically mentioned in the budget. That's what I see. 23:18 23 minutes, 18 seconds Yes, tunnel boarding is how the entire process started because China stopped our machine. 23:23 23 minutes, 23 seconds Huh. Okay. Okay. Okay. Now these things you are capable of manufacturing or you require some kind of expertise for for manufacturing such things. 23:31 23 minutes, 31 seconds A couple of let's say training cores we are already there and couple of other machinery categories uh which are coming under this scheme. We were as it is 23:39 23 minutes, 39 seconds envisaging and we have the capability to design and to manufacture that in India. 23:46 23 minutes, 46 seconds Okay. Okay. Thank you. Thank you. I'll come back if required. Thank you. Okay. Thank you. 23:54 23 minutes, 54 seconds The next question is from the line of Rotten Char from Global Consul and Research. Please go ahead. Uh sir, am I audible? 24:03 24 minutes, 3 seconds Yes. Yes, please. 24:04 24 minutes, 4 seconds Um sir, my question is with regards to your margin sir on product wise. So, so construction equipment on a quarterly 24:12 24 minutes, 12 seconds basis has seen a lower growth as compared to the agricultural equipment right. So I just wanted to know out of these two which one has a higher margin 24:21 24 minutes, 21 seconds sir construction equipment is definitely uh has a margin I agree we are struggling as a matter of fact especially in the 24:29 24 minutes, 29 seconds last quarter so construction equipment business do you expect any uh increase like further growth like how much has been 24:37 24 minutes, 37 seconds happened in this quarter uh in the agricultural equipment to continue sir no first we are focused on construction 24:46 24 minutes, 46 seconds equipment or agree um agriculture I'll talk of both I'll talk of both see construction equipment we this quarter 24:54 24 minutes, 54 seconds we are already at close to about 20% abit level okay which I think is one of the best in the country and maybe in the world as well 25:01 25 minutes, 1 second right so I think we are touching our peaks and obviously with numbers of our construction equipment and certain other 25:08 25 minutes, 8 seconds type of equipment uh increasing going forward in the next one or two or three years more operating leverage will kick in and we will have the flexibility to 25:15 25 minutes, 15 seconds either further increase these margins or pass on these benefits to the customers that we'll decide in due course of time because I think at 18 20% construction 25:24 25 minutes, 24 seconds equipment business is at a right level of profitability. 25:28 25 minutes, 28 seconds Understood sir and going to uh the agree equipment yes we were close to about four 4 and a half% here and there generally at debit 25:35 25 minutes, 35 seconds level but due to certain provisioning and whatever which Mr. Rutha can explain uh our profitability has gone down to about a 25:43 25 minutes, 43 seconds percentage there in this last quarter which I'm sure will bounce back. So yes from there from about four 5% our endeavor and target is that that needs 25:50 25 minutes, 50 seconds to go to at least 12 to 15% level so that it comes to some sort of uh you know a sensible margin profile over the 25:58 25 minutes, 58 seconds years to come and and we definitely working towards it. 26:01 26 minutes, 1 second Right sir sir I understood the I just request you to rejoin the queue for the follow-up question please. Okay. 26:08 26 minutes, 8 seconds Yeah. Thank you. 26:13 26 minutes, 13 seconds The next question is from the line of Vijay Pande from Noama. Please go ahead. 26:21 26 minutes, 21 seconds Thank you for taking my question and I have couple of questions. First is uh in terms of the guidance. So our 26:30 26 minutes, 30 seconds guidance is uh slide cross or is this uh large scope or suffice? 76 for full year 26:39 26 minutes, 39 seconds and does it include volume or is it on value zones? That will be my first question. 26:47 26 minutes, 47 seconds Yeah, I'll answer that quickly. Uh current year I think will be flat flat to positive but yes flat. Uh that is 26:54 26 minutes, 54 seconds what I can tell you and it is in value terms in number terms definitely some decline. Uh but I'm sure we'll more than make up for it in the next year. 27:04 27 minutes, 4 seconds Okay. Uh secondly sir in terms of the uh 27:11 27 minutes, 11 seconds the scheme the PL in scheme so uh what is our expectation on which of the 27:17 27 minutes, 17 seconds products will it come and where we have the capability to supply it like 27:26 27 minutes, 26 seconds in the PL team we would be focused on crawler cranes and truck cranes for sure and maybe some 27:35 27 minutes, 35 seconds bigger rough terrain train apart from uh container reach stacker and piling rigs 27:42 27 minutes, 42 seconds and maybe some aerial platforms because recently we had started to do some aerial platforms till date we have not done any piling 27:48 27 minutes, 48 seconds rigs or any reach stackers but yes we want to enter that line we have not manufactured any piling rigs in India we only do trading truck cranes and crawler 27:57 27 minutes, 57 seconds cranes we've already been doing so I believe these four five products is what we will be focusing on uh if the PLI team comes And uh obviously if we are 28:05 28 minutes, 5 seconds eligible for that whatever the conditions the government of India will lay lay down for that. Yes. 28:12 28 minutes, 12 seconds Okay. Okay. Okay sir. That's it from my side. Thank you. Thank you. Thank you. 28:20 28 minutes, 20 seconds The next question is from the line of Adita from Oldbridge Mutual Fund. Please go ahead. 28:27 28 minutes, 27 seconds Yeah. Hello. Uh thank you for the opportunity sir. My first question is on the volumes part. So we saw in the constructions and crane segment volume 28:36 28 minutes, 36 seconds dropped by 23%. But uh uh is that the case similar kind of degrowth we have seen in tower cranes? 28:44 28 minutes, 44 seconds Uh not really. I think tower cranes has reasonably held up. Uh yes for a couple of months in between there we saw 10 15% 28:53 28 minutes, 53 seconds dip on a year-on-year basis on a monthly level. But uh I would say that tower cranes has uh more or less uh held up 29:02 29 minutes, 2 seconds with respect to its numbers and it was more to do with mobile cranes and especially because of a lot of uh in quarter 3 quarter four last year there 29:10 29 minutes, 10 seconds was a lot of pre-bi so that was the main reason which uh contributed to this uh issue. 29:17 29 minutes, 17 seconds So uh if I may ask what would be the volumes you would have done in tower cranes this year as compared to last year. See in the first 9 months 29:27 29 minutes, 27 seconds we have already done close to about 500 machines a little here and there and uh last year we did a little upwards 29:36 29 minutes, 36 seconds of or close to 650 cranes our cranes and this year we already done 500 cranes and uh by the end of the year we should be 29:44 29 minutes, 44 seconds somewhere close to you know 680 to 700 cranes. 29:48 29 minutes, 48 seconds So that is a 8 9% increase over last year. Okay. Okay. Okay. 29:55 29 minutes, 55 seconds And if you look at the smaller if you look at the smaller uh the self-reacting tower cranes there again we did 161 30:02 30 minutes, 2 seconds units last year we've already done 113 in this year. So uh here again we would be let's say four five percentage more 30:10 30 minutes, 10 seconds than last year is about 800 last year this year it will be close closer to uh 900. 30:19 30 minutes, 19 seconds And sir, what would be our capacity here in tower cranes? 30:23 30 minutes, 23 seconds See in uh the the fixed tower cranes, our capacity is 8,900 units and once we do 700 cranes this year, so we will be 30:29 30 minutes, 29 seconds touching uh close to about 80% capacity and that is also one of the main reasons which I mentioned that uh in the next 30:36 30 minutes, 36 seconds year we will try and expand our capacity for tower trains. 30:41 30 minutes, 41 seconds Okay, because our current capacity is 8 900. 30:44 30 minutes, 44 seconds We are doing a small uh rejig so that our capacity comes closer to maybe 1100 units which can suffice for next year 30:51 30 minutes, 51 seconds requirement and that is also one of the main reasons that we might envisage we already planned for uh you know expanding our capacity in cranes in the next year setting up a new facility. 31:02 31 minutes, 2 seconds Okay. Okay. Uh sir my second question is on the uh realizations part in the agricultural equipment we have seen 31:10 31 minutes, 10 seconds significant jump in realization both ya and Q1 cube. So we are reaching almost 9 lakh 90,000 per unit in agriculture. So what's driving this? 31:21 31 minutes, 21 seconds Uh sir I will take the question. Yep. 31:25 31 minutes, 25 seconds Uh this is uh mainly because of the or increase in the harvesters. 31:30 31 minutes, 30 seconds Harvesters now we have become number two in the country and average selling price of a harvester is somewhere about 20 21 to 22 lakh rupees and we had a very 31:39 31 minutes, 39 seconds significant growth in the harvester this current year. This has led to the increase in average relation per in the agree department. 31:47 31 minutes, 47 seconds So sir in the agricultural volumes of 900 how much would we have sold harvesters? 31:53 31 minutes, 53 seconds Harvesters we have done about 410 or around 410. 32:00 32 minutes No this is for the quarter for 9 for 9 months sir. 32:05 32 minutes, 5 seconds So for 9 months then uh what is total agree for 9 months? Yeah. Total agree. 32:12 32 minutes, 12 seconds Total agree. And you know tractors we have done slightly uh 1600 I think. 32:20 32 minutes, 20 seconds 1 1600. So 1,600 420. 32:27 32 minutes, 27 seconds So we we have done 2,000 units I think in agricultural equipment uh in 9 months. Out of that we are saying 400 units are harvesters. Right. Yes. 32:37 32 minutes, 37 seconds And around 1,600 units are tractors. 32:40 32 minutes, 40 seconds Okay. Okay. Okay. Okay. And and uh just to understand the harvester market a bit better. So if you say we are the second largest player, how big would that 32:49 32 minutes, 49 seconds market be? And uh what is our market share? Then our market share the biggest uh we is 32:57 32 minutes, 57 seconds the now the class which has now been sold to Janmar and the market will be somewhere about our market share will be around 30%. 33:09 33 minutes, 9 seconds 30%. Okay. Okay. Okay. And one last question. Yes. I just like to add one more thing here. 33:17 33 minutes, 17 seconds When we are talking about harvesters, we are only talking about track harvesters. 33:21 33 minutes, 21 seconds We are not talking about the wheel harvester which uh is you know manufactured in uh Punjab. So we are 33:29 33 minutes, 29 seconds talking about a very niche segment of track harvesters. Okay. Okay. 33:34 33 minutes, 34 seconds And the market I told was only track harvesters. Yeah. 33:40 33 minutes, 40 seconds Uh one last question uh is on my uh is on gross margins. So uh we have been posting really healthy gross margins of 33:48 33 minutes, 48 seconds 33 to 30 32 to 34% range probably more on 33% from the last uh five quarters to say earlier we used to do anywhere 33:56 33 minutes, 56 seconds around 29 30%. So the jump of the delta that we have got of 2 to 3%. 34:03 34 minutes, 3 seconds uh what would be the major reason driving it consistently and how sustainable is it going for it? 34:10 34 minutes, 10 seconds Yeah, I think it is a combination of four five things. 34:15 34 minutes, 15 seconds So obviously uh gross margin is a combination of sales price, your material cost and uh obviously uh the 34:24 34 minutes, 24 seconds manufacturing expenses and uh so with our cost efficiencies which we are building in and automation and productivity improvement and our 34:33 34 minutes, 33 seconds continuous focus on you know maintaining ensuring and increasing our sales price and our input cost in terms of raw 34:40 34 minutes, 40 seconds material. So it is a combination of that. So on all fronts we have been gaining something and that is what uh we have been you know it's reflecting in 34:48 34 minutes, 48 seconds our gross margin and I think going forward uh should be sustainable because there is reasonable amount of pricing power and the market today understands 34:57 34 minutes, 57 seconds that yes if the commodities go up here and down especially steel so you know and which we have demonstrated in the last seven 8 years that as in when there 35:05 35 minutes, 5 seconds is a you know a drastic increase in any input cost it can be passed on to the market with a lag of 3 4 months so I think uh gross margin profile should be 35:14 35 minutes, 14 seconds sustainable and uh going forward with the operating leverage playing in because we already have capacities up to 5500 crores which I mentioned. So 35:22 35 minutes, 22 seconds further with increasing operating leverage going forward in FI27 and FI28 we will get an opportunity to further increase it I believe but that would not 35:31 35 minutes, 31 seconds be our endeavor. Our endeavor would be that we get a better contribution from our agri business and improve it in the other way not by increasing it further 35:40 35 minutes, 40 seconds in the construction equipment or crane segment and s just I want to add the market 35:46 35 minutes, 46 seconds because of the product mix also because a lot of things the market is moving toward telemetrics and what we have done which nobody has 35:54 35 minutes, 54 seconds done so that is also getting good marks yeah and there's something more I would just like to add that with the BS S5, 36:04 36 minutes, 4 seconds CV5 and very recently in the last 2 three months again we have in our cranes 36:12 36 minutes, 12 seconds introduced certain added features AI based features safety 36:19 36 minutes, 19 seconds and uh other features or different types of platforms like a clutchless transmission which is a first in the 36:26 36 minutes, 26 seconds country for pick and carry cranes or a single chassis crane where safety is enhanced Plus we have really focused on operator 36:34 36 minutes, 34 seconds comfort and we are one of the first companies in India rather I would say one of the first in India and maybe in the world with our as live app and 36:42 36 minutes, 42 seconds telematics. It's not that we get some information on the machine on the customer or our dashboards or different devices. We can talk with the machine 36:49 36 minutes, 49 seconds and pass on some instructions and some controls and parameters from our cell phones or tablets or laptops onto the machine and uh and some extended safety 36:58 36 minutes, 58 seconds features which we have added. So we believe and and obviously the market is willing to pay a price for all these 37:05 37 minutes, 5 seconds advanced features and we believe that not only a better price which is definitely one of the agendas of every company to maintain and sustain 37:14 37 minutes, 14 seconds profitability but these value added features which we are giving whether on safety or whether on you know innovation 37:22 37 minutes, 22 seconds or whether on the controls of the machine uh in the next 6 months to one year or one and a half years are going to be very instrumental 37:31 37 minutes, 31 seconds in in determining our future growth within the crane segment and other products in the country and we are very hopeful that whatever we have done is 37:39 37 minutes, 39 seconds more or less the first time it has been done in the world on pick and carry cranes and it is going to reap good uh results going forward already we are 37:46 37 minutes, 46 seconds seeing a change in product mix happening in the last 6 months one year so this will I think uh work really to the benefit of the company in times to come 37:54 37 minutes, 54 seconds in the next one year itself okay be able to distinguish ourselves 38:01 38 minutes, 1 second from any other manufacturer you know with respect to the offerings that we have and and today our new generation cranes we can very proudly say have 38:10 38 minutes, 10 seconds become failsafe cranes. So basically uh unless until you actually want to turn off some system and you know uh have 38:18 38 minutes, 18 seconds some accident with the crane you cannot do it. Uh you you'll be protected uh from doing it and the operator skill 38:26 38 minutes, 26 seconds level or or let's say the safety consciousness of the operator. That report can be generated by you know the machine learning uh that is going in 38:34 38 minutes, 34 seconds through the data capture which capturing which is happening. Okay. Okay. Okay. Understood sir. 38:42 38 minutes, 42 seconds Understood. Thank you so much. Thank you so much for the comprehensive answer. Thank you. 38:50 38 minutes, 50 seconds Next question is from the line of bank to bal from Asset Managers. Please go ahead. 38:58 38 minutes, 58 seconds Yeah, good evening uh and thank you for the opportunity. Uh uh good evening. 39:03 39 minutes, 3 seconds Yeah. Si when you talked about uh the longerterm vision of uh 29 and 30 and you talked about 6 and a half to 7,000 39:12 39 minutes, 12 seconds crores uh in your thought process how does the things add up because uh we believe that there's a large opportunity 39:21 39 minutes, 21 seconds on the earth moving equipment side back especially where JCB is a very large player which is today it's a market share wise 39:29 39 minutes, 29 seconds so when you look at the overall next three years how does the things add up um different pieces and export also if you can dwell on a little bit of a more detail it will be helpful. 39:41 39 minutes, 41 seconds See, we have been fluctuating between 8 to 10,000 cranes. I would say 7 to 10,000 cranes in the last 2 three years. 39:49 39 minutes, 49 seconds Yes. 39:49 39 minutes, 49 seconds Actually going a little down in the last 1 or 2 years. I feel that uh you know if you put all the pieces together how we'll reach that revenue. So over the 39:58 39 minutes, 58 seconds next 3 4 years this about 9 10,000 cranes will definitely go to 14 15,000 cranes for us. 40:05 40 minutes, 5 seconds Okay. Not only organically but also uh you know uh with respect to 40:12 40 minutes, 12 seconds some market share uh incremental market share which we will get because of a lot of good work, hard work and you know better features which we have introduced 40:21 40 minutes, 21 seconds in the market in the last 6 months one year which we are very sure of and we are seeing attraction already. 40:27 40 minutes, 27 seconds Yes. With respect to our construction equipment which has backho and some road machinery we feel from the current uh numbers that 40:36 40 minutes, 36 seconds will easily double up from here or maybe more than that. Okay. 40:40 40 minutes, 40 seconds Tower cranes we again feel we'll more than double up from here. 40:44 40 minutes, 44 seconds Our material handling will more than double up from here. 40:47 40 minutes, 47 seconds Exports and defense. Defense we are seeing doubling up 100% in the next year on an increased way. exports is 40:54 40 minutes, 54 seconds increasing steadily and apart from that there are some inorganic opportunities which are there with us which we are pursuing and if everything goes well you 41:03 41 minutes, 3 seconds know obviously in due course it it'll become public knowledge so all of that put together I think reaching a 6,000 to 7,000 cr type of scenario over the next 41:12 41 minutes, 12 seconds 3 to four years should not be difficult unless something major was to happen in the world economy or Indian economy 41:19 41 minutes, 19 seconds sure sure that's that's helpful and this all growth will be uh funded internally, 41:26 41 minutes, 26 seconds right? There's no need for an external capital either a debt or a equity raise to be happening, right? We are a 41:34 41 minutes, 34 seconds debt-free company and last year we were able to you know bring ourselves to a a zero working capital uh scenario in our 41:42 41 minutes, 42 seconds final balance sheet although in the middle of the year it so we're very hopeful by the end of this year again we'll be able to bring ourselves to a zero working capital plus we don't have 41:50 41 minutes, 50 seconds any debt plus we have uh I think uh close to uh Lut you can correct me if I'm wrong about 1200 crores on our books 41:58 41 minutes, 58 seconds available to be deployed anywhere so in doing all of this and we already have a like I said a capacity to go to 5,500 crores and we will be close to 34 35 3300 crores right now. 42:09 42 minutes, 9 seconds So and obviously once we are increasing our revenue more profit will flow in. So I don't think we should need any type of debt or any type of thing to uh you know 42:17 42 minutes, 17 seconds um double ourselves or even more than that including some acquisitions. 42:24 42 minutes, 24 seconds Fantastic. And last but not uh you know the final question um any color on the ground level reality um because you are 42:32 42 minutes, 32 seconds the as industry you are the first uh company to feel the slowdown or the uh excitement so 42:40 42 minutes, 40 seconds are definitely improving there is there's been a lot of traction December onwards it took it took us by surprise and uh 42:47 42 minutes, 47 seconds and I think now especially with the you know the European FDA deal just the sentiment see obviously how much it'll take shape when it will take shape but 42:55 42 minutes, 55 seconds sentiment matters more than anything else. 42:58 42 minutes, 58 seconds So there was already positivity in the air and and in the business on ground in December. It continued into January. 43:04 43 minutes, 4 seconds Then the EU thing happened and now I think uh with the US whatever uh you know throwing of ice has happened and 43:12 43 minutes, 12 seconds and a good budget with respect to manufacturing and focus on infrastructure. 43:16 43 minutes, 16 seconds So I think things will start to build up from here hopefully and uh you know we should also be playing along and and I 43:24 43 minutes, 24 seconds just hope that the 25 30% growth scenario comes back as soon as possible because gives you one or two years and 43:31 43 minutes, 31 seconds we we are also feeling wasted that always is a part of the cycle. Uh 43:38 43 minutes, 38 seconds so good to hear that the ground reality has started to change uh for good. Uh no thank you so much and uh all the best to the team. Yeah, thanks a lot. Thanks. 43:48 43 minutes, 48 seconds Thank you. The next question is from the line of Mundin Bandari from IFL Capital. Please go ahead. 43:57 43 minutes, 57 seconds Hi sir. Uh my question is upon the margin. So if I look at Q1 Q, 2Q 26 to 3Q are uh uh grain or equipment division 44:07 44 minutes, 7 seconds realization average selling price is slightly decreased uh on a blended basis and even then our uh margin has 44:14 44 minutes, 14 seconds expanded. So uh which product is driving that or um how that is uh being done? U 44:22 44 minutes, 22 seconds Lut were you able to figure out the question key our selling price has decreased across which product category uh across our uh non-aggricultural 44:31 44 minutes, 31 seconds product total construction equipment segment on a blended I think our price realization has increased not decreased 44:37 44 minutes, 37 seconds I think it has increased whatever data you're looking at is wrong our price realization has only increased 44:45 44 minutes, 45 seconds because in most of product the price selling price has increased okay so If I calculate reported revenues 44:53 44 minutes, 53 seconds uh by reported volume figures uh so it's a blended realization but but yes there's a definite increase 45:01 45 minutes, 1 second across all product categories all product categories non-aggree 45:08 45 minutes, 8 seconds okay okay and which product uh has led to our uh uh margin improvement in this 45:16 45 minutes, 16 seconds quarter uh the current quarter I think it's more to do with the product mix because what is happening new generation cranes are becoming more popular than the 45:24 45 minutes, 24 seconds traditional hydra cranes and uh in that again uh the higher tonnage cranes are becoming more popular and tower crane 45:31 45 minutes, 31 seconds again is on a growth this thing so I think especially uh bigger pick and carry cranes the new generation type and some tower cranes that's further helping 45:40 45 minutes, 40 seconds us in our margin profile understand sir and uh if I look at current uh uh improve selling price is 45:49 45 minutes, 49 seconds this now uh accepted by customer post the changing norms of CB or whether now that acceptability is very much in 45:57 45 minutes, 57 seconds place. We struggled in quarter 1 and to some extent in quarter two on account of price acceptability but now I think it is 9 months down the line 10 months down 46:06 46 minutes, 6 seconds the line. So now it has totally flown into customers and that is also one of the reasons that you know we've been able to improve our numbers in December 46:13 46 minutes, 13 seconds and we are very confident of this quarter because the price has flown down and acceptability is is totally there in the market. It has been 8 10 months. 46:24 46 minutes, 24 seconds Okay. So uh if let's say we uh get tower crawler can uh truck in FI27 or so then 46:32 46 minutes, 32 seconds uh that will be at an um increased utilization or increased selling price to our pick and carry crane or how is the difference in uh our selling price 46:39 46 minutes, 39 seconds within these and cranes are very different. 46:42 46 minutes, 42 seconds Pick and carry cranes the price range is anywhere between 15 16 lakhs to you know 30 40 lakhs 45 lakhs. truck cranes and 46:49 46 minutes, 49 seconds all crawler cranes they start at 80 85 lakhs and go up to 22 2 and a half three crores depending on models most popular 46:57 46 minutes, 57 seconds I would say in the range of 1.4 4 1.3 uh crores average. So they're totally different types of machines and yes 47:04 47 minutes, 4 seconds there is the issue of price realization in the truck cranes and crawler cranes that is the reason our market penetration is small because the Chinese are dumping at very low predatory 47:13 47 minutes, 13 seconds pricing and hopefully with the anti-dumping duty if at all they come or you know going forward with the CI uh 47:21 47 minutes, 21 seconds scheme which the government wants to PLI scheme I'm sure somewhere it'll have some compensatory effect or benefit wherein we will be able to sell more 47:29 47 minutes, 29 seconds machines as compared to what we're doing today. 47:33 47 minutes, 33 seconds Understand? Lastly, I think we mentioned we have capacity of 400 Turk and CL and collars. Is that right? 47:41 47 minutes, 41 seconds Yes. All right. Thank you, sir. 47:43 47 minutes, 43 seconds We have capacity of about 400. We're doing close to 50 60. We were very hopeful that anti-dumping duty will come and we will be able to utilize that capacity in the next 2 three years. 47:52 47 minutes, 52 seconds Unfortunately, it has not come. Now we are very hopeful that the PLI will come and we will be able to utilize at least 60 70 80% of that capacity. Let's see. 48:02 48 minutes, 2 seconds Let's keep our fingers crossed. In any case, we had mentioned earlier that our cate joint venture will be there in place. So hopefully we should be in a 48:10 48 minutes, 10 seconds position to announce something very shortly wherein that joint venture uh definitive agreement shall happen and it will become operative. So that will also help us in utilizing this capacity. 48:21 48 minutes, 21 seconds Wonderful. All the very best. Yeah, thank you. Thank you. 48:28 48 minutes, 28 seconds The next question is from the line of Mahir Manor from Trust Metal Fund. Please go ahead. Yeah. 48:35 48 minutes, 35 seconds Yeah. Hi, thanks for giving the opportunity. Uh sir, would you understand our audible? 48:41 48 minutes, 41 seconds Not really. The voice is a little garbled. Uh maybe you are on the speaker phone or something. I don't know. 48:46 48 minutes, 46 seconds Yeah, sure. This is audible now. This is better. 48:49 48 minutes, 49 seconds Slightly better. Yes. Yeah. Yeah. Sorry manufacturing logistics in India close to account 70% of the business uh I mean 48:57 48 minutes, 57 seconds when I see the EPC order books across building and factories across all companies uh the buildings and factories have manifested auto books are quite 49:04 49 minutes, 4 seconds strong I understand there is increase in price which has happened uh but I mean uh given the underlying demand which is strong uh why did the volume not pick up 49:12 49 minutes, 12 seconds and should we see a particular improvement from here on given the fact that at least for companies the bing factor order book has picked up quite sharply 49:20 49 minutes, 20 seconds see our exit execution and our orders have also picked up but vom I think lot parts of the question I was not able to figure out were you able to figure out 49:28 49 minutes, 28 seconds because of the garbled uh in this thing no sir what I could figure out is that uh I think uh there is some manufacturing uptick in the economy and 49:37 49 minutes, 37 seconds uh they want us to reflect upon that on our business uh is that I mean yeah I will just repeat I'm sorry 49:45 49 minutes, 45 seconds for the garbled voice uh so broadly I mean when I see the manufacturing order book across APC companies infra as well as beginners factory uh that order book 49:54 49 minutes, 54 seconds has picked up quite sharply uh across last 1 and a half years uh but however I agree that there has been a price 50:02 50 minutes, 2 seconds increase in there for us uh because of the new norms uh but the volume growth has not been there so now given the fact that such high order books are there for 50:10 50 minutes, 10 seconds EPC company we expect much better volumes for us 100% see even though order books were there but the payments for EPC companies 50:18 50 minutes, 18 seconds were lagging that was also one of the reasons that they were going a little slow. 50:23 50 minutes, 23 seconds Now everything seems to be have sorted the price increase and the acceptance with respect to the emission norm 50:30 50 minutes, 30 seconds changes that has happened. PPC companies the order books are there fresh orders are also coming in at a good rate now and the the the let's say the payment 50:39 50 minutes, 39 seconds problems is sort of getting solved with liquidity being addressed here and there by the government. manufacturing sector again uh things seem to have picked up 50:48 50 minutes, 48 seconds and a very clear indication for that is price of steel going up. So I believe that uh you know all things are now you know coming back together in the right 50:56 50 minutes, 56 seconds this thing and uh that's why we are seeing increase in our own execution our own order booking and execution which we have felt uh definitely in the month of 51:05 51 minutes, 5 seconds December as well as continuing well into January and February. 51:19 51 minutes, 19 seconds I think we'll go to the next question. 51:24 51 minutes, 24 seconds The next question is from the line of Siddhhatri Kumar from PMS. Please go ahead. 51:30 51 minutes, 30 seconds Hi. So uh my question is um what would be the volume for uh back hole loaders in Q3? 51:40 51 minutes, 40 seconds In Q3 it should be close to about what 200 numbers approximately 51:51 51 minutes, 51 seconds around 450 sir 450 I didn't hear you 51:59 51 minutes, 59 seconds I think it is the construction equipment will be put together 200 units 100 52:07 52 minutes, 7 seconds so back 200 units 200 00 units. Okay. Yeah. 52:12 52 minutes, 12 seconds So, uh how do you see this product category in the future in let's say over a 5 years? 52:19 52 minutes, 19 seconds Uh I think that we are doing close to about 8 900 units average in this category and uh 52:28 52 minutes, 28 seconds it can easily be at least three to four times of what it is now. I would say three times. And uh we are already 52:36 52 minutes, 36 seconds feeling it in our domestic market especially in the last one or two quarters. Yes, for the last 3 4 months the entire construction equipment market 52:44 52 minutes, 44 seconds was down about 20 25% in volume. So that was a drag but uh we feel that even in the coming year from this 8 900 units we 52:53 52 minutes, 53 seconds should easily go to 1300 1200 units that's a 30 40% increase and over the next 5 years maybe a three times is is 53:01 53 minutes, 1 second what it seems uh things are. We are also getting a lot of good traction in the export market for this product. So we believe that whatever numbers we'll be 53:09 53 minutes, 9 seconds able to increase in the domestic market, similar numbers we should be able to increase in the export market also. And uh things seem to be panning out as of now as we speak. 53:19 53 minutes, 19 seconds Understand? One related question I have is uh like from a product perspective 53:26 53 minutes, 26 seconds uh do you actually earn a higher margin or the same margin from this product compared to the crane? 53:35 53 minutes, 35 seconds See as compared to cranes the margin would be slightly less because of our numbers but yes as soon as our numbers 53:42 53 minutes, 42 seconds start to hit more than 1300400 units annually uh we feel the margin profile for this product as well as cranes would be similar. 53:52 53 minutes, 52 seconds Understand? So like one sir I just request you to rejoin the queue for the followup question please. 54:04 54 minutes, 4 seconds Thank you. The next question is from the line of Konal from Tokas from BFC. Please go ahead. 54:12 54 minutes, 12 seconds Hello. Am I audible? Yes, you're audible. 54:16 54 minutes, 16 seconds Okay. Thank you sir. And just two quick questions. First is what is can you tell me the share of cranes to the top line 54:23 54 minutes, 23 seconds and specifically uh tower cranes? 54:28 54 minutes, 28 seconds share of grains uh to the top line see is generally around 10 12% 54:35 54 minutes, 35 seconds to our top line and uh this quarter it was 10 11 or 12 I think 54:41 54 minutes, 41 seconds Mr. Lutra can uh do a quick calculation and send it over to you. 54:46 54 minutes, 46 seconds I think the entire crane segment cranes generally for us is around do we 54:53 54 minutes, 53 seconds have a figure for all trains put together to our top line. We'll send that number sir. 54:59 54 minutes, 59 seconds Uh generally it's about 60 65%. Mr. Lusa will send it to you. 55:04 55 minutes, 4 seconds Okay sir. And the second question is in backhole loaders which you uh say can be 55:11 55 minutes, 11 seconds grown three in five years easily. Uh JCB is the leader. Uh I assume that you have also you have already tried to dismantle 55:19 55 minutes, 19 seconds their leaders. What what what has been the challenge in doing that? 55:25 55 minutes, 25 seconds Yes, we have deciphered everything. We know the issues and uh obviously that's 55:32 55 minutes, 32 seconds we can discuss in detail. we have all the plan and you know what what what why we are not able to do it or even other manufacturers why they not able to 55:40 55 minutes, 40 seconds increase the numbers. So we definitely have understanding of those facts and we are working very hard on them and we are hopeful that we should break we should 55:49 55 minutes, 49 seconds be able to break away the shackles very soon. 55:54 55 minutes, 54 seconds I was asking this question because I I would assume that you would be more cost competitive with them right? So it has could be some other factor. 56:02 56 minutes, 2 seconds Yes. See our pricing is much better than JCB machine is very similar but the issue is that over the years 56:09 56 minutes, 9 seconds what has happened uh that uh you know today JCB as a company is really not selling their back loaders but all the 56:16 56 minutes, 16 seconds NBFCs are selling their back loaders and uh because uh for them in a resale value perspective 56:24 56 minutes, 24 seconds or uh let's say a default perspective of their past experience in the last 15 20 years they feel JCB is the safest 56:32 56 minutes, 32 seconds product and uh even JCB bullies uh the the finance companies or the down the line officials to a certain level that 56:39 56 minutes, 39 seconds if any of the individual uh person posted by NBFC in a particular area if he funds any other machine he gets blacklisted by the JCB network they 56:46 56 minutes, 46 seconds don't give him business so lot of things are happening so it's basically the NBFCs and finance companies are selling the JCB machine 56:55 56 minutes, 55 seconds and it has becoming become a you know some sort of a self-fulfilling type of a prophecy that it is happening automatically 57:02 57 minutes, 2 seconds And then we've understood that we working on it and and very soon I think we should be able to break that shackle also. It's not that those finance 57:09 57 minutes, 9 seconds companies are not funding our machines but somehow they are in the trap of unknowingly you know they keep on funding. So what they also do is that 57:18 57 minutes, 18 seconds some neutral customer comes their way they indirectly push it to JCB rather than thinking of any other machine. So I'm sure it'll happen uh nothing can 57:26 57 minutes, 26 seconds sustain forever. So I'm sure we'll figure out something. 57:30 57 minutes, 30 seconds And uh just this uh just to add to this for the 9 months as per the ICMR figures 57:37 57 minutes, 37 seconds uh for uh you know earthmoving equipment the market has contracted the domestic market has contracted by almost 10%. 57:45 57 minutes, 45 seconds Whereas uh we have uh tried to remain flattish or grown a little bit. So that clearly indicates that we have grown a fraction of our market share as well. 57:57 57 minutes, 57 seconds But that is very minuscule room at the current juncture. 58:00 58 minutes I'm sure with all the right things that we have been doing and even currently we are focused on and I can very proudly say that our latest machine which we 58:09 58 minutes, 9 seconds introduced along with CV5 is one of the best machines in the world with respect to performance and reliability apart from aesthetics. 58:18 58 minutes, 18 seconds All right. That's fantastic sir. Thank you and have a good day. Yes. Thank you. Thank you. 58:25 58 minutes, 25 seconds The next question is from line of Pratik Kolkani from Kosh Management. Please go ahead. 58:32 58 minutes, 32 seconds Yeah. Hello sir. Thank you for the opportunity. Am I audible? Yes. Yes, you are audible. Yes. 58:38 58 minutes, 38 seconds I guess. So I just had one question and correct me if I if I'm wrong. Uh in the in the recent budget there was a mention 58:46 58 minutes, 46 seconds of some you know custom duties on the uh custom bond zones where you know foreign 58:53 58 minutes, 53 seconds companies can uh land their parts and machines there assemble and then sell it to then they can sell it to Indian 59:02 59 minutes, 2 seconds contractors but they'll be only uh the duty only be limited on the uh imported parts and not on the finished machine. 59:11 59 minutes, 11 seconds So is my understanding right and if does if this does happen could this you know reduce the gap between our total cost of 59:20 59 minutes, 20 seconds ownership and the foreign employers total cost of ownership for the contractors see first of all on basic understanding 59:28 59 minutes, 28 seconds what I've just heard from you I don't think this will make any difference whether it is custom bonded or not because finally custom duty is always 59:35 59 minutes, 35 seconds paid only on the imported part so if it is assembled in a custom bonded or duty is paid The only difference would be the duty being paid when it is imported or 59:44 59 minutes, 44 seconds duty being paid with a delay of 3 4 months. So financially that is the only difference but lutras is there any such thing that is his main question. 59:54 59 minutes, 54 seconds Uh I don't think so. Uh the only benefit the government has given that now the pay duty can be paid for a reputed 1:00:02 1 hour, 2 seconds manufacturers like us for not on a monthly 15 days but on a monthly basis. 1:00:06 1 hour, 6 seconds So now the whatever we import we will have to pay duty on a monthly basis. And if you if you like the keep the machines 1:00:14 1 hour, 14 seconds in the bonded warehouse duty has to be paid when you remove the metal from the bonded way. So probably nobody wants to keep inventory unless somebody wants to 1:00:22 1 hour, 22 seconds have lot of inventories in in the currently also applicable. Yeah. Right also it is applicable 1:00:31 1 hour, 31 seconds and this uh this a what you think 15 days 1 month we can pay duty. This is AEO A2 we already have this approval. 1:00:41 1 hour, 41 seconds We already have earlier it was 15 days now now we can pay duty on a monthly basis on the first of every month we we can pay duty for all imports. can calculate whatever is duty and pay once 1:00:50 1 hour, 50 seconds rather than paying it every time or every 15 days on a daily basis and know it is paid on a monthly basis at the end of the month. 1:00:57 1 hour, 57 seconds Okay. Thank you sir. 1:01:02 1 hour, 1 minute, 2 seconds Thank you. The next question is from the line of Rajie Maheshwari from Raj Investments. Please go ahead. 1:01:10 1 hour, 1 minute, 10 seconds Uh good evening uh Mr. Agarwal. 1:01:13 1 hour, 1 minute, 13 seconds Yeah, good evening. Yes. And uh I have a couple of questions. Uh first is uh has 1:01:20 1 hour, 1 minute, 20 seconds the government totally gone back on this electric cranes uh because it's long back it was uh uh showcased in the uh 1:01:30 1 hour, 1 minute, 30 seconds exhibition but still no update as such on that. Can you just throw a light on that? 1:01:36 1 hour, 1 minute, 36 seconds Yes. Uh no I think uh they did come back with some regulations uh four five months back which have been 1:01:42 1 hour, 1 minute, 42 seconds approved and uh but unfortunately uh the approvals required from CMV are again a approval there was some issue with the 1:01:51 1 hour, 1 minute, 51 seconds side uh batteries and all you have any update when it is getting finished the batteries have gone to ARI on their 1:01:58 1 hour, 1 minute, 58 seconds test bench and we are expecting their approval uh within this month or maybe next We can assume that within this 1:02:07 1 hour, 2 minutes, 7 seconds quarter the electric cranes will become ready for commercial sales. Correct sir? 1:02:13 1 hour, 2 minutes, 13 seconds Okay. So they will be ready this quarter. So uh regarding the electric vehicles will it help us to gain market 1:02:20 1 hour, 2 minutes, 20 seconds in the EU and the US after the trade deal the the new electric cranes and the new newer version of the cranes which we 1:02:28 1 hour, 2 minutes, 28 seconds recently launched. See uh to be very frank with you currently we do not export anything to the EU or America and 1:02:35 1 hour, 2 minutes, 35 seconds that was never in our scope of things also in the last four five years 3 4 years we've actually started exporting 1:02:43 1 hour, 2 minutes, 43 seconds to Middle East Asia Africa some South America and little bit in Southeast Asia and some Central Asia definitely going 1:02:51 1 hour, 2 minutes, 51 seconds forward in the years to come we will be exporting these electric cranes and not only these electric cranes today our 1:02:58 1 hour, 2 minutes, 58 seconds emission norms are the best in the world. Tier five. Europe is tier five. 1:03:03 1 hour, 3 minutes, 3 seconds America and Japan is tier four. So yes going forward in the years to come not only electric but even uh the Indian 1:03:11 1 hour, 3 minutes, 11 seconds diesel engines everything is going to go to the developed part of the world in the next 2 three years because first our 1:03:18 1 hour, 3 minutes, 18 seconds focus is on Middle East, Africa, South America which which which we can penetrate easily 1:03:25 1 hour, 3 minutes, 25 seconds and the second part is regarding our defense order pipeline any uh it's a long time uh none of the announcement 1:03:33 1 hour, 3 minutes, 33 seconds has come on any big defense orders. So is this the government has gone slow or something is going up in the pipeline 1:03:40 1 hour, 3 minutes, 40 seconds which may be announced in the coming months? 1:03:43 1 hour, 3 minutes, 43 seconds There is a order of close to about 150 machines. They are called heavy recovery vehicles which we are expecting anytime. 1:03:50 1 hour, 3 minutes, 50 seconds Each each machine is approximately a k of rupees. Uh so at least first it's a 54 and then it's a 90. uh take care of 1:03:58 1 hour, 3 minutes, 58 seconds that's how it is this this joint uh tie up with Shok and HRV 1:04:06 1 hour, 4 minutes, 6 seconds and this we be announcing shortly and even uh as of now we have orders close to around 500 crores 1:04:14 1 hour, 4 minutes, 14 seconds available for execution within this year we'll be executing further 30 40 crores so let's say we will be entering the new year with about 460 470 crores worth of 1:04:22 1 hour, 4 minutes, 22 seconds orders okay that's we are very hopeful that in the next year we will execute about 150 200 crores worth of orders. So that should 1:04:29 1 hour, 4 minutes, 29 seconds on the increase make it about 5% 4% contribution from defense and we hope to maintain that 5% 6% level going forward. 1:04:39 1 hour, 4 minutes, 39 seconds If I listen correctly in your opening remark or in some of the questions you have mentioned about some acquisition of land in Indor am I correct? Was it Indor or some other place? 1:04:48 1 hour, 4 minutes, 48 seconds Yes in indor as well as Faridabad Palwal yes paridabad. Okay, makes sense. But in indor any plan of setting up a new plant 1:04:55 1 hour, 4 minutes, 55 seconds or what exactly is the rational behind this? 1:04:59 1 hour, 4 minutes, 59 seconds The rational was to rationalize on the logistic outward logistic cost because Badhya Pradesh Indor is we believe more 1:05:06 1 hour, 5 minutes, 6 seconds or less like more closer to central India. So dispatch of machines we realized to south and west would be more 1:05:13 1 hour, 5 minutes, 13 seconds economical from Indor and uh you know on a larger number of machines this could lead to significant outward logistics. 1:05:21 1 hour, 5 minutes, 21 seconds uh and obviously in Indor there is a good enough base for to further diversify our input supply uh you know 1:05:28 1 hour, 5 minutes, 28 seconds the auxiliary industry base as well as to benefit on the logistics outward logistics and especially uh you know the port infrastructure. 1:05:39 1 hour, 5 minutes, 39 seconds So this was the main consideration why we also looked at Indor going forward. 1:05:44 1 hour, 5 minutes, 44 seconds So, so by when can we decide on the framework of setting up that plant or now you have just planned to take the land and in due course we will plan that? 1:05:52 1 hour, 5 minutes, 52 seconds Yes, right now we have planned to take the land in the next and it is being uh developed uh for commercial use because you know the land is under development. 1:06:00 1 hour, 6 minutes So hopefully we will get possession for use in the next 1 year. So we can expect something over there in the next 2 to 3 years. Currently first of all we will be 1:06:09 1 hour, 6 minutes, 9 seconds developing uh the our tower crane plant on our this new piece of land which we have bought in Palw. We have bought two 1:06:17 1 hour, 6 minutes, 17 seconds pieces one is about 22 acres and other which we are about to get possession is about 86 acres. Okay. 1:06:22 1 hour, 6 minutes, 22 seconds So first we will be developing the 22 acres in Palvul and we will have 86 acres in Palwal available for future 1:06:29 1 hour, 6 minutes, 29 seconds expansion and this 30 acres in Indul for future expansion. 1:06:34 1 hour, 6 minutes, 34 seconds Okay. Okay. uh we thought we thought to block in land at good prices because uh you know land prices 1:06:42 1 hour, 6 minutes, 42 seconds uh in the last 2 three years have been increasing uh uh you know at a very significant pace to ensure that we do not make a lot of 1:06:50 1 hour, 6 minutes, 50 seconds capex on cost of land. So that's why we locked in this uh these lands. 1:06:55 1 hour, 6 minutes, 55 seconds Okay maybe you got at a competitive rate and uh that and since fund was available out there so prices already doubled. So this this 250 1:07:03 1 hour, 7 minutes, 3 seconds crores worth of land is already 500 crores. By the time you're setting up factories, it will be 6 700 crores. 1:07:08 1 hour, 7 minutes, 8 seconds So you have already doubled your money in a couple of maybe years or the company's money. But in any case, the purpose is not to sell them 1:07:17 1 hour, 7 minutes, 17 seconds any expand. So the future expansion will come at a very cost. Yeah, that's right. One quick update. 1:07:22 1 hour, 7 minutes, 22 seconds The January sales is how how much percentage is the January sales compared to last month? 1:07:30 1 hour, 7 minutes, 30 seconds Is definitely higher. Okay, take that. Thank you. Thank you. 1:07:37 1 hour, 7 minutes, 37 seconds The next question is from the line of DL Barada from Freudian corporate. Please go ahead. 1:07:44 1 hour, 7 minutes, 44 seconds Hello. Am I audible? Yes, you are. 1:07:47 1 hour, 7 minutes, 47 seconds Hello. Yeah. Can you sort of give me the year on your growth of the sub segments in the non-aggre segment such as you 1:07:55 1 hour, 7 minutes, 55 seconds know what is the growth mean for crane construction equipment and the material handling segment and the sort of direction for the next year on how you 1:08:04 1 hour, 8 minutes, 4 seconds see the growth in these three segments if you uh look at uh our segment results 1:08:14 1 hour, 8 minutes, 14 seconds so in the cranes and metal handling and let's say the construction equipment on a quarteronquarter basis we've been 1:08:21 1 hour, 8 minutes, 21 seconds able to grow at about 10% on revenue basis and uh yes as compared to on a yearon-year basis in this quarter there 1:08:29 1 hour, 8 minutes, 29 seconds was a 4% uh lower growth negative growth on a whole year basis I think it is 1:08:37 1 hour, 8 minutes, 37 seconds going to be more or less uh flattish even in this segment as conveyed earlier flattish to maybe a minor positive 1:08:45 1 hour, 8 minutes, 45 seconds uh so so that is how it is and uh Next year uh we are sure that there should be good growth uh in both our segments and 1:08:53 1 hour, 8 minutes, 53 seconds uh but yes we can we are only able to put a number to it only in the next uh conference call uh which will happen 1:09:01 1 hour, 9 minutes, 1 second hello yes yes please yeah sorry if I was not clear I was 1:09:08 1 hour, 9 minutes, 8 seconds asking about volume growth in these three subsegments in the quarter can you give us a brief or you know an 1:09:16 1 hour, 9 minutes, 16 seconds approximate Uh I think it'll be better if Mr. Lutra sends it across on an email 1:09:23 1 hour, 9 minutes, 23 seconds which you can just tell you can us and then we can send on email to him. Okay. 1:09:29 1 hour, 9 minutes, 29 seconds Just please send us email. We'll immediately respond on that. Okay. Yeah. Nothing else from my side. 1:09:39 1 hour, 9 minutes, 39 seconds Okay. Thank you. 1:09:44 1 hour, 9 minutes, 44 seconds The next question is from the line of question. The next question is from the line of Himmanu from individual investor. Please go ahead. 1:09:54 1 hour, 9 minutes, 54 seconds Hi, good evening. Uh, am I audible? Yes. Yeah. Go on. 1:10:01 1 hour, 10 minutes, 1 second Yeah. So, so my question is regarding some of the new growth areas the company's venturing into in terms of exports, defense orders and uh heavy 1:10:08 1 hour, 10 minutes, 8 seconds grains. So will these businesses continue to follow the current asset light build to order model that is 1:10:15 1 hour, 10 minutes, 15 seconds supported that has supported high asset turnover historically or do we expect higher asset base for all these incremental businesses? 1:10:24 1 hour, 10 minutes, 24 seconds Now see we have always been asset light and especially our ratio to asset to turnover ratio has been very good. We 1:10:32 1 hour, 10 minutes, 32 seconds will totally keep that in mind in whatever we are doing. Thank you so much. Honor. Yeah. Yeah. 1:10:41 1 hour, 10 minutes, 41 seconds Thank you. 1:10:43 1 hour, 10 minutes, 43 seconds Thank you. The next question is from the line of PUAM and individual investor. Please go ahead. 1:10:50 1 hour, 10 minutes, 50 seconds Hello. Hi sir. Thank you for this opportunity. So firstly post transitioning to the BS5 norms. What 1:10:57 1 hour, 10 minutes, 57 seconds kind of AIDA margins can we expect in say FI27 and FI28 on a steady state basis? 1:11:05 1 hour, 11 minutes, 5 seconds I think what we have been achieving in the recent quarters should be our benchmark for uh you know let's say the 1:11:11 1 hour, 11 minutes, 11 seconds next year or the year after that maybe uh close to about uh let's say 18 19% if 1:11:19 1 hour, 11 minutes, 19 seconds you include other income and close to about a 15% plus minus without other income. 1:11:27 1 hour, 11 minutes, 27 seconds Understood. So secondly uh could you elaborate more about the AI integration in your cranes and how difficult it is 1:11:35 1 hour, 11 minutes, 35 seconds for other players to sort of replicate the same replication of the same should not be 1:11:42 1 hour, 11 minutes, 42 seconds possible because uh the new uh four odd features which you have introduced in our machine we have patented them uh before we introduced it on the machine. 1:11:53 1 hour, 11 minutes, 53 seconds uh you know the technology and the procedure that has been used in in in in you know uh to make it function. So in 1:12:01 1 hour, 12 minutes, 1 second case if any competition tries to you know u get close to it or copy it then obviously we'll have to uh use our 1:12:08 1 hour, 12 minutes, 8 seconds patents to stop them. And uh what what these do is they basically make a crane uh fail safe and uh the the operator can 1:12:18 1 hour, 12 minutes, 18 seconds only do safe operations and uh he even if he does some unsafe operation it'll be brought to a safe uh 1:12:25 1 hour, 12 minutes, 25 seconds safety zone automatically and uh whatever unsafe acts an operator is doing are being recorded. So the 1:12:33 1 hour, 12 minutes, 33 seconds operator grading whether he's actually a capable operator or not that also you know gets generated. 1:12:39 1 hour, 12 minutes, 39 seconds So it it's a mix of a lot of things and but most importantly that it'll be very difficult for anybody to uh you know uh 1:12:49 1 hour, 12 minutes, 49 seconds do an unsafe operation or or you know put uh the safety in jeopardy. Apart from that there are a couple of other 1:12:56 1 hour, 12 minutes, 56 seconds things like the first clutchless uh transmission. So I'm sure this should gain a lot of traction with operators uh because uh the operating planes will be 1:13:04 1 hour, 13 minutes, 4 seconds very easy less tiresome less cumbersome and uh again keeping in mind safety uh 1:13:11 1 hour, 13 minutes, 11 seconds as I mentioned first rigid chases single chases crane so uh you know because there is no articulation so you know the the crane is much more safer than any 1:13:20 1 hour, 13 minutes, 20 seconds other conventional pick and carry crane all these things put together I'm sure uh we are moving in the right 1:13:32 1 hour, 13 minutes, 32 seconds Thank you. As that was the last question for the I would now hand the conference over to the management for closing comments. Over to you sir. 1:13:40 1 hour, 13 minutes, 40 seconds Yeah. Thank you. 1:13:43 1 hour, 13 minutes, 43 seconds As I think as discussed and and going forward we expect uh stability and visibility in the markets post uh the EU 1:13:51 1 hour, 13 minutes, 51 seconds and US uh trade deals and our own government's focus on infrastructure and manufacturing. 1:13:57 1 hour, 13 minutes, 57 seconds and and I think this augers very well for our future prospects and we expect that with our capacities and 1:14:04 1 hour, 14 minutes, 4 seconds capabilities in place going forward our growth trajectory should get back on track soon and and we are looking 1:14:12 1 hour, 14 minutes, 12 seconds forward to it and I think that's it from our side. Thanks a lot. Thank you. Thank you. 1:14:20 1 hour, 14 minutes, 20 seconds Thank you. 1:14:21 1 hour, 14 minutes, 21 seconds Thank you on behalf of MK Global Financial Services Limited. That concludes this conference. Thank you for joining us and you may now disconnect your lines.