Aequs Limited — Q4 FY26

Aequs Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=Gr2JBTeFLtY Published: 3 weeks ago

0:01 1 second Good evening to all the participants on the call and thank you for joining in. 0:04 4 seconds We welcome you to the Q4 and full year FI26 earnings conference call of Acus Limited. Before we proceed, let me 0:12 12 seconds remind you that the discussion may contain forward-looking statements that may involve known or unknown uncertaintities and other factors. These 0:20 20 seconds statements should be viewed together with our business risks which may lead to actual results and performance differing materially from what is 0:28 28 seconds expressed or implied. To take us through the results and answer your questions today we have the management of acres limited represented by Mr. Arvindle 0:38 38 seconds chairman sorry executive chairman and CEO CEO Mr. Rajiv Kh co-founder and 0:45 45 seconds managing director Mr. Dhayer, chief financial officer and Mr. Harish Pang, 0:52 52 seconds Vice President Finance. We will start the call with a brief overview of the previous quarter and the full year and then conduct the question and answer 1:00 1 minute session. With that said, I now hand the conference over to Mr. Arvind Malikeri. Thank you and over to you sir. 1:10 1 minute, 10 seconds Thank you. Good evening everyone and thank you for joining. FI26 has been a truly landmark year for Akus defined by 1:19 1 minute, 19 seconds a strong execution, meaningful business expansion and our IPO. A transformational milestone that marks a new chapter in our journey as a company. 1:29 1 minute, 29 seconds Today we stand as a globally scaled Christian manufacturer driven by the combined strength of our aerospace and consumer verticals. FI26 has firmly 1:37 1 minute, 37 seconds validated our platform strategy showcasing our ability to execute tenaciously and captured our growth opportunity across our portfolio. 1:46 1 minute, 46 seconds Our focus on execution is clearly reflected in the financials with our fullear consolidated revenue growing by 1:52 1 minute, 52 seconds 33% to 12,34 million INR. ITA grew 43% 1:59 1 minute, 59 seconds to 1,545 million INR with the margins expanding to 13%. 2:08 2 minutes, 8 seconds We capped off the year with the strongest quarter in Akus history with 3,671 2:15 2 minutes, 15 seconds million rupees in revenue and 47% year-on-year growth. 2:21 2 minutes, 21 seconds Crucially, the performance was unified. Both our aerospace and consumer segments delivered strong growth across the 2:28 2 minutes, 28 seconds board. While our financial performance reflected our current momentum, our strategic focus remains firmly on the future. This year, we made significant 2:37 2 minutes, 37 seconds strides in laying foundation for our next phase of growth. With substantial new investment spanning both our aerospace and consumer segments, we 2:46 2 minutes, 46 seconds firmly anchoring our long-term manufacturing ambitions in India. 2:50 2 minutes, 50 seconds In February 2026, we signed an MOU with the government of Tamil Nadu to invest 1,900 crores for 10 years for a 2:59 2 minutes, 59 seconds new vertically integrated aerospace manufacturing ecosystem within a new uh aerospace and defense park at Hosour across 150 acres in the SIPC called 3:08 3 minutes, 8 seconds Shouiri Industrial Park. This will be India's first fully vertically integrated aerero engine 3:15 3 minutes, 15 seconds and uh landing gear components manufacturing ecosystem. 3:20 3 minutes, 20 seconds And in March 2026, we signed a second MOU with the government of Karnataka committing investments of 2,856 cr over 3:28 3 minutes, 28 seconds 5 years across our existing clusters in Belgavi and Hubali. 3:32 3 minutes, 32 seconds This covers expansion of our aerospace precision engineering operations in Belgavi and significant capacity enhancement for our consumer segment at our Hubali manufacturing cluster. 3:42 3 minutes, 42 seconds Collectively, these investments accelerate our broader objective of making Akus and India a premier destination for global aerospace and consumer precision manufacturing. 3:52 3 minutes, 52 seconds To help execute on our large scale ambition, we are actively deepening our leadership bench. We are pleased to have 4:00 4 minutes Ravi Kumar Asudani join us as head of engineering for consumer headmen effective Q1 2027. 4:10 4 minutes, 10 seconds Ravi brings over 16 years of experience at Apple Inc where he led global tooling and manufacturing design operations across multiple product lines. Scaling 4:19 4 minutes, 19 seconds precision component manufacturing for global consumer electronics OEMs requires a unique combination of engineering depth and operational 4:26 4 minutes, 26 seconds discipline and we continue to enhance both. 4:31 4 minutes, 31 seconds In our journey to continued expansion of our capabilities, we established an advanced materials R&D ecosystem at IIT 4:39 4 minutes, 39 seconds Dharwir campus. The facility will focus on cutting edge material characterization, failure analysis and manufacturing process simulation. This 4:48 4 minutes, 48 seconds partnership reflects a long-term commitment to strengthen India's advanced manufacturing ecosystem through sustained investments in research, innovation, and skill development. 4:56 4 minutes, 56 seconds The collaboration will enhance IIA Darwa's applied research capabilities and industry uh engagements apart from enabling Akus to deliver cutting edge 5:04 5 minutes, 4 seconds products to its customers. Now I turn to financial outlook as we enter 2020 FI27. 5:14 5 minutes, 14 seconds Our financial priorities are clear. 5:17 5 minutes, 17 seconds First continue to grow aerospace revenues profitably. We have an order book like and the capacity the customer 5:24 5 minutes, 24 seconds relationship to deliver 25 to 30% revenue growth with IITA margins maintained at 20% at the segment level. 5:33 5 minutes, 33 seconds Second drive consumer utilization unlocking the operating leverage embedded in our existing asset base. 5:41 5 minutes, 41 seconds Third, more consumer IITA to break even by Q4 2020 FI27 which will be a major inflection point 5:48 5 minutes, 48 seconds for our consolidated profitability. At a consolidated level, we are expecting approximately 45 to 50% topline revenue 5:56 5 minutes, 56 seconds growth. More importantly, this growth is highly efficient. We project our doubling our operational beta pay uh 6:04 6 minutes, 4 seconds proving immense operating leverage embedded in our current business model. 6:08 6 minutes, 8 seconds FI27 is trans about translating our expanded cap capacity into a significant financial returns. I will let Rajie walk 6:18 6 minutes, 18 seconds you through the segment level mechanics of how our aerospace and consumer divisions have performed and will deliver these numbers. Before I hand 6:25 6 minutes, 25 seconds over, I want to make take a moment to acknowledge Desh Ayar, our chief financial officer who has informed us of 6:32 6 minutes, 32 seconds his decision to step down at the end of June 2026 for personal reasons. DH has been instrumental 6:40 6 minutes, 40 seconds uh in an exceptional partner to this organization and we are grateful for his contribution and wish him very best. We are in search 6:49 6 minutes, 49 seconds of our C uh for a CFO replacement and will communicate as soon as she or she is appointed. Meanwhile, Harish Bank 6:57 6 minutes, 57 seconds whom most of you know will be in charge of uh and your single point of contact. 7:02 7 minutes, 2 seconds With that Rajiv call co-founder, managing director take us. Thank you Arvin and good evening to all of you. It 7:09 7 minutes, 9 seconds is a pleasure to speak with you again as we close out what has been a very singing frontier for Akus operationally. 7:16 7 minutes, 16 seconds [clears throat] Our manufacturing footprint spans 2.22 million square ft across three integrated clusters in India, Beerawi, Hubli and Copel 7:24 7 minutes, 24 seconds supported by facilities in Chole, France and Paris, Texas in the United States. 7:28 7 minutes, 28 seconds Our installed annual capacity has grown to 4.70 million machining and molding hours on an annualized basis. We scaled 7:36 7 minutes, 36 seconds our manufacturing operations steadily throughout the year to support a new and existing programs. Closing FI26 with a 7:43 7 minutes, 43 seconds robust footprint of 434 CNC machines and 179 molding machines. This represents a disciplined expansion of our manufacturing muscle. We evaluate 7:52 7 minutes, 52 seconds capacity requirements continuously and keep adding based on our requirements. 7:56 7 minutes, 56 seconds Turning to our aerospace segment, our operational momentum translated into exceptional financial delivery. The vertical delivered revenue of 3,40 8:05 8 minutes, 5 seconds million in Q4 and closed the full year at 10,464 million representing us robust 27% growth year on year. But beyond the 8:13 8 minutes, 13 seconds revenue growth, what is significant is our portfolio expansion. We added 433 new parts in Q4 alone. Taking our total 8:20 8 minutes, 20 seconds aerospace portfolio to 5,654 SKS with a 26% increase in the portfolio since last year. This represents the breadth and 8:29 8 minutes, 29 seconds complexity of our engagement with global OEMs. Each of these SKUs represent a rigorous qualification cycle, a secured 8:36 8 minutes, 36 seconds long-term contract, and a deep rooted relationship with our customers acting as a high entry barrier to others. As a result, our order book in aerospace 8:44 8 minutes, 44 seconds stood at robust 890 $889 million. We're also actively moving up the value chain into landing gear and engine components 8:52 8 minutes, 52 seconds where integrated forging, machining, and surface treatment capabilities. deliver infant competitive advantage. These are higher complexity, 9:01 9 minutes, 1 second higher value products that command better margins and deeper customer relationships. 9:06 9 minutes, 6 seconds Moving to our customer segment, the business is scaling steadily, which is reflected in its growing contribution to our overall topline. In Q4, consumer 9:15 9 minutes, 15 seconds accounted for 17% of our total revenue, up from just 5% a year ago. For the full year, its contribution grew from 11% in 9:24 9 minutes, 24 seconds FI25 to 15% in full year business at FI26. 9:29 9 minutes, 29 seconds This growth aligns with our plant transition from pilot production to commercial ramp up based on the increasing requirements from our customer. We are expanding capacity. 9:39 9 minutes, 39 seconds This will feed directly into our operational targets for FI27. Our primary focus this year will be driving 9:46 9 minutes, 46 seconds capacity usation from 23% today to a target of 40 to 50% by the year end. 9:52 9 minutes, 52 seconds Talking of our consumer business, as you may be aware, Hasbro has informed us that it has revised it manufacturing and sourcing strategy and told us they will 10:00 10 minutes stop raising POS to us. While this decision was unexpected, it will not impact the overall growth of the 10:07 10 minutes, 7 seconds business. We continue serving others equally large and strategic customers. 10:12 10 minutes, 12 seconds Looking at the broader consolidated picture, the heavy depreciation load from these strategic c consumer investments will keep us keep our 10:21 10 minutes, 21 seconds overall track negative for much of the year. However, as our consumer volumes ramp up and our aerospace segment 10:27 10 minutes, 27 seconds continues a strong performance, we fully expect to see consolidated pack heat break even by H1 FI28. 10:35 10 minutes, 35 seconds With that I will now hand over the call to Dhaya or CFO for a detailed review of our financials. 10:42 10 minutes, 42 seconds Thank you Rajiv. Uh good evening everyone. I will take you through the key financial highlights for Q4 and the full year FI26. Q4 delivered 3671 10:52 10 minutes, 52 seconds million in revenue. INR 3671 million in revenue. Our highest quarterly revenue ever. This reflects continued ramp up in 11:00 11 minutes aerospace programs and accelerating production in consumer segment. IATA was INR 321 million at 9% margin. The margin 11:09 11 minutes, 9 seconds compression from Q3 reflects the timing of consumer electronics capacity coming fully online. In Q4, we saw the full run 11:16 11 minutes, 16 seconds rate of depreciation on consumer capex alongside the full operating costs while the plant is still operating at low utilization. This is the expected 11:25 11 minutes, 25 seconds profile during the manufacturing ramp up phase. Reported PA for Q4 was a loss of 541 million. This includes higher 11:33 11 minutes, 33 seconds depreciation from consumer capex and increased tax provisions on the profit from aerospace segment. Our underlying operational trajectory continues to 11:41 11 minutes, 41 seconds improve for the full year. Consolidated revenue grew 33% to 12,34 million rupees. Abita grew 43% to,545 million 11:51 11 minutes, 51 seconds rupees with margins at 13% a 100 basis point improvement from 12% in FI25. 11:59 11 minutes, 59 seconds Full year P was a loss of,133 million rupees. The negative part B margin reduced fromative1% in FI25 to9% 12:09 12 minutes, 9 seconds in FI26. A 200 basis point improvement including our proportionate share of the joint ventures consolidated fullear 12:17 12 minutes, 17 seconds revenue was 13,466 million rupees up 34% year-on-year with EITA of,830 million 12:25 12 minutes, 25 seconds rupees reflecting a growth of 42% yearonear at a margin of 14%. For Q4 12:32 12 minutes, 32 seconds revenue was 3,984 million rupees with 45% growth year on year with AITA of 417 million rupees at a margin of 10%. 12:42 12 minutes, 42 seconds Coming to detail segment performance, the aerospace segment delivered a very strong performance with fullear revenue of 10,464 million rupees up 27% 12:51 12 minutes, 51 seconds year-onear and EITA was 2,813 million rupees up 76% year-on-year. For Q4, 12:58 12 minutes, 58 seconds aerospace segment revenue was 3,40 million rupees, growing 29% year-onear and AITA was,010 million rupees reflecting a growth of over 100%. 13:10 13 minutes, 10 seconds Aerospace segment ROC for FI26 was 20% up from 14% in FI25 which is in line with our expectation and demonstrates 13:19 13 minutes, 19 seconds our ability to scale efficiently. The consumer segment contributed fullear revenue of,0840 million rupees up 84% 13:27 13 minutes, 27 seconds yearonear. The consumer segment EITA loss was 783 million rupees for the full year a 173% increase year-on-year which 13:36 13 minutes, 36 seconds reflects our planned investment to build capacity at scale. In Q4, the revenue was 631 million rupees with a beta loss 13:44 13 minutes, 44 seconds of 473 million rupees. Q4 was the first quarter where all manufacturing costs hit simultaneously with new capacity 13:51 13 minutes, 51 seconds that was recently commissioned. The consumer electronics team is moving through the learning co curve of a new production environment. This is a standard in manufacturing ramp up phase. 14:01 14 minutes, 1 second As utilization improves from 23% to our 40 to 50% target for FI27, the depreciation and fixed cost will be 14:09 14 minutes, 9 seconds absorbed across higher volumes and margins will recover sharply. 14:14 14 minutes, 14 seconds Turning to the balance sheet, total assets stood at 26,95 million rupees as of March 31st, 2026 compared to 18,598 14:22 14 minutes, 22 seconds million rupees a year ago. This increase reflects the significant capital invested in consumer electronics capacity during the year. Increased 14:30 14 minutes, 30 seconds working capital in line with revenue growth and retained IPO proceeds. Our net debt to equity ratio was 23 as of 14:37 14 minutes, 37 seconds March 31st 2026. An improvement of from.99x at the end of FI25 which shows that we are well capitalized for the 14:45 14 minutes, 45 seconds next phase of growth. Fixed asset turnover moderated to 1.18x in FI26 from 1.84x in FI25. 14:54 14 minutes, 54 seconds This is expected as we have added significant consumer electronics assets that are not yet generating proportionate revenues. As utilization 15:02 15 minutes, 2 seconds improves through FI27, this ratio will recover meaningfully. 15:06 15 minutes, 6 seconds Net working capital days increased 151 days in FI26 from 132 days in FI25, which was primarily driven by growth in 15:15 15 minutes, 15 seconds revenues. Cash and cash equivalent stood at 3,15 billion rupees as at March 31st, 2026 compared to 69 million rupees at the end of FI25. 15:26 15 minutes, 26 seconds Finally, on a personal note, I announced earlier this year that I'll be stepping down as CFO at the at Acres at the end of June 2026. It's been a great pleasure 15:35 15 minutes, 35 seconds to serve Akus through the IPO and in this wonderful journey of becoming a listed company. The business is in an excellent position, well capitalized, 15:43 15 minutes, 43 seconds growing strongly and with a management team that is deeply committed to delivering on our promises to shareholders. Thank you. With that, over 15:50 15 minutes, 50 seconds to the moderator to open the floor for questions. 15:54 15 minutes, 54 seconds Thank you very much. We will now begin with the question and answer session. 15:59 15 minutes, 59 seconds Anyone who wishes to ask a question may press star and then one on their touchstone phone. If you wish to remove yourself from the question queue, you may press star and two. 16:10 16 minutes, 10 seconds Participants are requested to use handsets while asking a question. 16:16 16 minutes, 16 seconds Ladies and gentlemen, we will wait for a moment while the question few seconds. 16:26 16 minutes, 26 seconds Your first question comes from the line of ML J with IFL Capital. Please go ahead. 16:33 16 minutes, 33 seconds Uh so my question is regarding KPIX segmental capex what are the plans capex for f 2728 uh in both the segment 16:41 16 minutes, 41 seconds separately and on the second question after discontinuation with hashgrow on the toy business any road map of ramp up 16:49 16 minutes, 49 seconds expected with metal in our aerospace segment we have planned 17:01 17 minutes, 1 second about rups 160 cr approx and in our consumer segment we have planned about rupes 500 cr approx for the full year 17:08 17 minutes, 8 seconds fi27 on I would have yeah on the second question this is rajie here yes we have signed a 17:16 17 minutes, 16 seconds long-term agreement with metal and both sides are fully committed to scaling volumes we also expect actually metal volumes to absorb the capacity impact 17:23 17 minutes, 23 seconds from high school more broadly we continue to engage with large strategic customers across the consumer segment and remain confident that overall growth 17:31 17 minutes, 31 seconds of the business will not be materally impacted. 17:34 17 minutes, 34 seconds Okay. Answer any PLI income booked for FI26? 17:40 17 minutes, 40 seconds No. So FI27 will be our first year uh where we will be eligible for the PLI. 17:48 17 minutes, 48 seconds Okay. And broadly your guidance across revenue, margins and fix uh sorry KP you have given on revenue and margins. 17:57 17 minutes, 57 seconds So on aerospace uh uh as Arun mentioned earlier uh we are expecting a growth of 25 to 30% and maintaining the AITA 18:06 18 minutes, 6 seconds numbers at about 20% level. On consumer uh we see a uh revenue growth of about 18:12 18 minutes, 12 seconds 125 to 150% uh and Q4 is the uh quarter wherein we will hit the AITA break even. 18:21 18 minutes, 21 seconds Okay. Thank you. Thank you. That's it for my side. 18:25 18 minutes, 25 seconds Thank you. Your next question comes from the line of Priyanker Biswas from JM Financial. Please go ahead. 18:34 18 minutes, 34 seconds Uh thanks for the opportunity for this question. Uh sir can you just uh elaborate because uh in let's say ma 18:42 18 minutes, 42 seconds March and let's say the last week of uh Feb for example probably we may have some impacts uh from the west Asia 18:50 18 minutes, 50 seconds crisis probably due to the closure of aerospace and probably also due to the fact that uh air freights have also 18:57 18 minutes, 57 seconds significantly increased. So would that be a right assessment and if that had happened what sort of margin impacts we 19:05 19 minutes, 5 seconds would have seen. So my what I'm trying to understand is if this oneoff events let's say were not there so what would have been our fundamental margins. 19:17 19 minutes, 17 seconds Well, I mean to this last quarter I would say we are not seeing the significant impact on the work uh you 19:25 19 minutes, 25 seconds know the margin perspective because uh you know the you know our material prices and all are long-term 19:32 19 minutes, 32 seconds agreements is more of a supply constraints we saw and logistics costs have gone up a bit but uh that's not a 19:39 19 minutes, 39 seconds material in our view you know for the business uh we have a uh long-term agreements that takes care of the material 19:47 19 minutes, 47 seconds So logistics side only thing what we have seen is the expansion of the working capital uh we are bringing 19:54 19 minutes, 54 seconds inventory almost four to 6 weeks ahead of the time uh so that we don't have any problem in delivering to our customer 20:01 20 minutes, 1 second commitments in aerospace predominantly this is mostly on the aerospace side and uh on the consumer side plastics 20:08 20 minutes, 8 seconds especially material price are shot up but because we have backto-back agreement with the customers that has been passed through to customers so it 20:15 20 minutes, 15 seconds has not Again you know performance- wise it has not been impact more of a ability to stock material ahead of the requirement 20:23 20 minutes, 23 seconds has one of the driver for our inventory number of working capital days also increased in the quarter. 20:30 20 minutes, 30 seconds So would it be fair to say that the large buildup of working capital that we saw in fourth quarter so that is 20:37 20 minutes, 37 seconds predominantly on aerospace and because of the excess inventory you need to carry because of the crisis at the moment. 20:45 20 minutes, 45 seconds Yes. Yes, we expected to we are we are taking precaution to do this most probably another two quarters till we 20:53 20 minutes, 53 seconds see the stabilization because generally the logistic logistics has increased by 5 to 6 weeks what we have seen sea logistics air has gone up by 6 days to 8 21:02 21 minutes, 2 seconds days somewhere in that range okay so let's say if we have some sort 21:09 21 minutes, 9 seconds of a normalization eventually uh so we should see let's say the working capital let's say motor that we 21:17 21 minutes, 17 seconds have like this build up working capital has impacted right we saw some of the numbers uh we went from 21:25 21 minutes, 25 seconds 130 days to 150 something you know okay is it just uh for sake of clarity 21:33 21 minutes, 33 seconds for everyone uh I know you have provided the export and the domestic backup but I also understand most of your domestic 21:41 21 minutes, 41 seconds sales are also sort of deemed export or let's USD denominator. So what percentage of your over overall sales 21:49 21 minutes, 49 seconds would be uh let's say USD linked even that the currency is depreciating so far. 21:57 21 minutes, 57 seconds Yes. So including deemed exports uh it would be about 93 to 94% uh uh overall in US dollar. 22:07 22 minutes, 7 seconds Uh okay that's uh that was uh lovely. Thank you. 22:15 22 minutes, 15 seconds Thank you. The next question comes from the line of Suraj Malu from Katamaran. Please go ahead. 22:24 22 minutes, 24 seconds Hello sir. Uh uh can you help understand what is the current gross block uh in consumer electronics? 22:33 22 minutes, 33 seconds So at a consumer overall level uh we have a gross block about uh 830 crro approx. 22:42 22 minutes, 42 seconds And you are adding 500 crores to that. That's correct. 22:47 22 minutes, 47 seconds Got it. And uh and at total consumer electronics we can expect a 2x asset at peak utilization. At 22:56 22 minutes, 56 seconds uh sorry can you repeat that? At peak utilization we can expect a 2x asset turn in the consumer electronics. 23:08 23 minutes, 8 seconds So uh it should be more it should be closer to 1.5 level electronic side. Understood. 23:17 23 minutes, 17 seconds That's what we should understood. And the last question is in FI 26 in aerospace we have delivered ana 23:25 23 minutes, 25 seconds margin of 27%. And now for next year we are guiding at 20%. So just can you help understand the reconciliation? 23:36 23 minutes, 36 seconds So 27% is the segment EITA uh which includes other income and uh uh it excludes the unallocated corporate costs. 23:47 23 minutes, 47 seconds Okay. Okay. And like so like what will be that? 23:53 23 minutes, 53 seconds So we continue to uh drive like 20% uh EITA margin excluding these two elements. 24:00 24 minutes Okay. Thank you. 24:04 24 minutes, 4 seconds Thank you. The next question comes from the line of Bika Singh from please go ahead. 24:11 24 minutes, 11 seconds Uh thank you for the opportunity. Am I audible? Yes. Yes. 24:18 24 minutes, 18 seconds So basically on the aerospeed side I want to understand that we are delivering quite good margins uh from last two quarters. So uh and also we have added 1,000 uh approx. 24:30 24 minutes, 30 seconds So is it because uh of um the high margin products uh we are getting this margin or it's u and going forward can 24:39 24 minutes, 39 seconds we expect the margins be improved with the new products adding in please? 24:49 24 minutes, 49 seconds Yeah, I mean look uh I mean this is a normal course of business of complexity what we do and uh we expect this margins 24:57 24 minutes, 57 seconds to be there as we grow and our ability to execute more number of parts and as we increase our vertical integration uh 25:04 25 minutes, 4 seconds into engine side engine component side we do expect some margin expansion but uh aeros structures predominantly which is what the number of parts what we have 25:12 25 minutes, 12 seconds today are for majorly you know in line with what we are delivering right now 20% operating value is our focus area 25:20 25 minutes, 20 seconds you know and on the consumer side as we see that we have already did a quite good capix 25:28 25 minutes, 28 seconds and we are also planning to do cipix and fi27 and as I look at the current utilization 25:34 25 minutes, 34 seconds of consumer it's 23% so uh can you make me understand that uh um uh that why we 25:43 25 minutes, 43 seconds are going with um like additional kex when we are already underutilized at 23% is we are seeing the additional products 25:52 25 minutes, 52 seconds getting added in the uh consumer electronic or if you can give me the clarity on that and also if you can 25:59 25 minutes, 59 seconds provide me in terms of uh uh what exactly we are doing on the consumer electronic side and what volumes uh uh 26:07 26 minutes, 7 seconds we are making currently and it can go to at what extent. 26:14 26 minutes, 14 seconds Well, look uh you know the customer in in a customer wants us to have a meaningful share of their requirements you know and together we are committed 26:22 26 minutes, 22 seconds to scale up the operations and absorb more work in India and this capital additional capital is basically you know driven by clear customer demand and the 26:31 26 minutes, 31 seconds opportunity to capture the meaningful share of the customer India manufacturing requirement you know the current asset base is you know still in the ramp up phase you know we have 23% 26:40 26 minutes, 40 seconds utilization it'll go up and uh and we continue to expand that make sure that we are going to be a significant 26:48 26 minutes, 48 seconds supplier to this customer in the country you know if we don't do it you know then the customer will see some alternates 26:56 26 minutes, 56 seconds otherwise because it's important that we scale and deliver their needs and so there is a timeline in which we have to do this and we will continue to you know 27:04 27 minutes, 4 seconds make sure that we're aligned on that and we are both committed to make sure that you know your utilization goes up and uh you know that's why we guided for you 27:13 27 minutes, 13 seconds know I beta break even in the Q4 and what margins we yeah and what margins we can expect at 27:21 27 minutes, 21 seconds an optimum utilization from the consumer side because we all we have guided the similar margins as 27:28 27 minutes, 28 seconds the aerospace overall 20% is our long-term goal okay and as I see on the Q4 uh side 27:37 27 minutes, 37 seconds there is a uh to like uh increase in the to uh um other expenses. So can you uh give me understanding why there is a 27:46 27 minutes, 46 seconds sudden increase in Q4 other expenses? Is there any particular expense which you want to mention? 27:55 27 minutes, 55 seconds So as D mentioned earlier Q4 was the first quarter where all the cost pertain to the consumer capacity uh came in 28:03 28 minutes, 3 seconds since we commissioned the plant and started commercial production in Q3. So uh uh the increase uh is across all the expenses what we see in Q4. 28:16 28 minutes, 16 seconds Okay. Uh and uh uh if you can give the clarity of ROC which can be expected from the consumer segment going forward 28:23 28 minutes, 23 seconds at a optimum utilization uh with all the additional uh picks we are doing. 28:31 28 minutes, 31 seconds So at a steady state basis I mean we see expect uh uh same ROC's as we do in our aerospace segment. 28:39 28 minutes, 39 seconds Okay. Okay. That's all from my side. Thank you. 28:44 28 minutes, 44 seconds Thank you. The next question comes from the line of Pravin Kumar from Equitas Capital Advisors. Please go ahead. 28:52 28 minutes, 52 seconds Yes. Hi. Uh thanks for the opportunity. 28:54 28 minutes, 54 seconds Uh my question was on the consumer electronic segment. uh in the earlier call you had referred to the uh to the 29:01 29 minutes, 1 second client asking you to uh you know expand your capacity uh and but this time around you are talking about increasing the utilization and you know achieving a 29:10 29 minutes, 10 seconds beta break even. So uh does this imply that over the next few quarters your focus will be more on ramping up uh 29:17 29 minutes, 17 seconds rather than you know uh demanding more from the customer in terms of more product lines etc. 29:24 29 minutes, 24 seconds No, I mean it's uh we are currently you know obviously the focus always is to maximize the utilization. At the same 29:32 29 minutes, 32 seconds time we are also investing this year as Harish gave we are investing about 500 cr new capital you know into the 29:39 29 minutes, 39 seconds consumer consumer business. So it's a combination you know so we're not changing our objective the obviously 29:48 29 minutes, 48 seconds whatever assets we have we want to maximize the utilization uh understood but just to understand 29:55 29 minutes, 55 seconds this in more detail like so you're putting already 500 cr more capeex on top of what you've done so looking at your peak utilization of 1.5x even if I 30:04 30 minutes, 4 seconds take half of that uh just on this 500 cr incremental capeex half of half half of that 1.5x should give you uh closer to 30:13 30 minutes, 13 seconds 350 crores kind of uh number right so I'm just trying to understand is that the kind of topline that you're likely to see from the consumer electronics 30:21 30 minutes, 21 seconds part in the next uh year or so yeah I mean you know we are going to we 30:28 30 minutes, 28 seconds are we are guided towards going to 50% utilization you know so that's what it is in in terms of capacity wise so you 30:36 30 minutes, 36 seconds know we are our goal is to get to uh we're going at 125 % level uh this year 30:43 30 minutes, 43 seconds from a consumer business predominantly driven by the consumer electronics. 30:50 30 minutes, 50 seconds Understood. Thank you. Thank you. 31:00 31 minutes Your next question comes from the line of Ashish Podar with Motila Los. Please go ahead. 31:09 31 minutes, 9 seconds Yeah, thank you. U so my question is related to the aerospace revenue growth potential 31:16 31 minutes, 16 seconds while we are targeting 20 to 25% kind of growth in FI27. Uh looking at your order book position which is roughly around 8 31:25 31 minutes, 25 seconds to nine times you know of last year's revenue and we are adding more you know more know avenues in terms of know 31:33 31 minutes, 33 seconds engine components and other verticles over the over the coming years. So what kind of you know growth PGR we can know 31:41 31 minutes, 41 seconds expect from a longerterm perspective I'm talking about 5 to 10 you know years perspective can we see the similar rate 31:48 31 minutes, 48 seconds of 25% CGR for the next 10 years or or it is not the case if you if you can uh 31:54 31 minutes, 54 seconds give some clarity thank you yeah mean look we are given the guidance based on the customer demand and order book there 32:02 32 minutes, 2 seconds are not many aerospace companies in the world at our size are growing at this rate organically it's a complex 32:09 32 minutes, 9 seconds business to grow number of components adding hundreds of components every month and uh and also adding machines to 32:16 32 minutes, 16 seconds support that FIS and everything and uh we feel very strongly this growth rate is is achievable because we have 32:23 32 minutes, 23 seconds achieved and we have visibility uh as we expand uh with regarding you specifically asked about the engine components and everything that is not 32:32 32 minutes, 32 seconds going to be impacting much on this fiscal year this is this is a long term you know it's going to starting FI28 we'll start seeing some of this coming 32:39 32 minutes, 39 seconds into our you know revenue so so far this year guidance is concerned pretty much what we have aeros structures focused 32:48 32 minutes, 48 seconds you know the business growth coming in and we'll add some engine side but but it is predominantly continue to be our our core what has been in Belgavi 32:56 32 minutes, 56 seconds aerospace cluster and opportunity we see a multi-year opportunity to grow this business at this stage 33:04 33 minutes, 4 seconds at this rate you are saying yeah we don't see any reason the 20 plus% we are guided in the past in the 33:13 33 minutes, 13 seconds long term and we are you know improve that you know at this stage and and with with a similar uh rate of 33:22 33 minutes, 22 seconds eida margin which you are guiding yeah that has been our guidance always 33:29 33 minutes, 29 seconds okay thank you so much thank Thank you. 33:35 33 minutes, 35 seconds The next question comes from the line of Nikil Chri with Toro Wealth Managers RLP. Please go ahead. 33:43 33 minutes, 43 seconds Yeah. Hi. Uh good evening sir. Thank you for the opportunity. Just uh I had two questions. So we've been guiding that uh consumer uh margins will be probably heading towards the aerospace margins. 33:54 33 minutes, 54 seconds So just wanted to understand when we see Chinese precision for our uh probably the product uh we see that probably the 34:02 34 minutes, 2 seconds margin compression has happened over uh 8 to 10 year cycle. So just wanted to understand will we also have a similar trajectory after we achieve uh those 34:10 34 minutes, 10 seconds margins. Uh second is um wanted to understand that in DRH we had probably flagged that u critical equipment uh 34:19 34 minutes, 19 seconds dependency on China and lately we've been hearing some feedback that Chinese have been restricting lot of equipment. So are we facing any 34:27 34 minutes, 27 seconds issues in updating those equipments uh if there's any uh non-Chinese vendors uh 34:34 34 minutes, 34 seconds like have we found any non-Chinese alternate vendors for the same? 34:41 34 minutes, 41 seconds Look uh uh from the from the consu consumer electronics side uh we are in the 34:49 34 minutes, 49 seconds components manufacturing business you know and uh we feel confident of our capital and and uh and uh value addition 34:59 34 minutes, 59 seconds what we do in these products we should be able to sustain our ITA margins in a long run once we get maturity in the in the business we don't see that as a 35:07 35 minutes, 7 seconds concern um and uh there suppliers in China who continue to do 35:13 35 minutes, 13 seconds this and uh I I I know I think I don't think we have any concerns about that our ability to sustain those margins 35:20 35 minutes, 20 seconds because it reflects the value ad we do on the products and components it's not like assembly business so that's what I want to bring the differentiation and 35:28 35 minutes, 28 seconds communicate to you it's a highly complex you know huge amount of value ad on this products what we do inhouse you know so 35:36 35 minutes, 36 seconds that's that's a big differentiator and coming down to uh China geopolitical issues comp equipment look you know we 35:47 35 minutes, 47 seconds have we have had you know uh gone through some of these challenges in the past it's continues to evolve over a 35:54 35 minutes, 54 seconds period of time at the same time we are working with customer always to find alternate different geographic location 36:02 36 minutes, 2 seconds including India but it takes time to get the suppliers developed and qualified for this kind of equipment these have 36:09 36 minutes, 9 seconds happened over decades in China and uh it won't happen overnight here. So we just need to be going through that process 36:17 36 minutes, 17 seconds working with the customer and it's evolution. Thank you so much sir. All the best. 36:25 36 minutes, 25 seconds Thank you. Thank you. 36:30 36 minutes, 30 seconds The next question comes from the line of Priyani with NGP family office. Please go ahead. 36:38 36 minutes, 38 seconds Uh hi sir hope I'm audible. Yes. 36:43 36 minutes, 43 seconds Yeah. Uh sir I want to understand uh the split of revenue between the three vertical within the uh consumer portfolio uh consumer electronics 36:52 36 minutes, 52 seconds plastic and delivery. Can you throw some light on that? 36:57 36 minutes, 57 seconds So uh we essentially track at consumer segment level uh and uh uh the numbers what we have are given is at a overall 37:05 37 minutes, 5 seconds consumer level. Consumer durables is a joint venture uh which doesn't get consolidated in the consumer segment since it's a 50/50 JV. 37:16 37 minutes, 16 seconds Okay. Uh understood sir. So uh next question on the plastic particularly on the toys part of it. So do we own the uh 37:24 37 minutes, 24 seconds IP for this product or uh uh we have some sort of u uh partnership with uh some other uh vendor who who we share in 37:34 37 minutes, 34 seconds terms of design. Yes. In class see we are in a contract manufacturing 37:44 37 minutes, 44 seconds so we only manufacture from brands. So we don't own any IPC. 37:50 37 minutes, 50 seconds Okay. or certain process IP you know we might have developed certain processes to do some 37:58 37 minutes, 58 seconds things but uh we don't really patent them that's more of internal process you know IP what we consider 38:04 38 minutes, 4 seconds understood sir sir uh I just uh one more question on the long-term strategy uh I just want to understand what sort of dependency this consumer whole division 38:13 38 minutes, 13 seconds has on uh aerospace part that is one first part of the question and second uh are we looking into say five year or uh 38:21 38 minutes, 21 seconds 10 years down the line this whole consumer portfolio to be uh spin off from the core business. Uh why I'm asking this because sir uh if you have a 38:30 38 minutes, 30 seconds two separate line of business merging on the same entity right we get a hold for uh holding company discontract uh at 38:37 38 minutes, 37 seconds overall level which doesn't uh let us reate to the uh peers that we have in so just want to understand the whole uh 38:45 38 minutes, 45 seconds strategy behind it making it within the same company. 38:50 38 minutes, 50 seconds Look, we are we are building a precision manufacturing platform here. You know the verticals are you know more of a 38:58 38 minutes, 58 seconds capability certain specific to products but now you know we have a common for example we have CNC machines in both the places consumer side and aerospace side. 39:08 39 minutes, 8 seconds So that's like a precision manufacturing piece and uh similarly injection molding will go both the sides. So I think uh 39:16 39 minutes, 16 seconds it's a it's not a it is not a uh two business you know hold discount that is not what we're talking here we're trying 39:24 39 minutes, 24 seconds to build capability here a platform here so that we can scale this in a right way 39:32 39 minutes, 32 seconds okay uh sir if I understood this correctly just a followup question uh the same CNC that say uh aerospace interior that we built the dashboard uh 39:41 39 minutes, 41 seconds plastic molds that's the same CNC machine we're utilizing for say plastic toys. Is that a fair understanding of the whole process? 39:51 39 minutes, 51 seconds No. CNC machine is just machining machining happens on each of these products. You got to come and see you know uh some point in time you know 40:00 40 minutes visit our facilities when next time visit happens reach out to our investor relationship then you get to see capabilities 40:08 40 minutes, 8 seconds differentiation and and also commonality. Okay. So products like finish here. Yeah. 40:16 40 minutes, 16 seconds Sorry, just one more clarification to your comment. CNC machine is for metal. 40:20 40 minutes, 20 seconds So it's not in toys. Just want to clarify. Molding machine is for toys. Just to clarify. 40:25 40 minutes, 25 seconds Yes sir. Sorry. Uh yeah I meant molding machine like molding machine that we use for aerospace are different lines right all together. uh when you talk about toys and it is fixing. 40:39 40 minutes, 39 seconds No, again let me clarify CNC machines is used for metals which is what we use in aerospace and consumer electronics which 40:47 40 minutes, 47 seconds Arvin just mentioned for toys which is plastics it is molding machines. So these are very very different machines. 40:54 40 minutes, 54 seconds I hope that helps. What Arvin was clarifying was the nature of work is precision manufacturing. So that is the common platform we're building. 41:03 41 minutes, 3 seconds Industries that are served are aerospace, consumer electronics and so on. Is that uhful? 41:12 41 minutes, 12 seconds Yes. Yes sir. Thank you. Thank you for the question. Thank you. 41:19 41 minutes, 19 seconds The next followup question comes from the line of Nikl Jane with Capital. Please go ahead. 41:25 41 minutes, 25 seconds So I have a question on raw material. So I'll try to break this down in three parts. Uh part one uh we understand that 41:33 41 minutes, 33 seconds procurement of raw materials like titanium and super alloy especially typically involves longer lead time. So could you please help us quantify the 41:40 41 minutes, 40 seconds usual lead time for sourcing such metals and how far in advance you typically plan and hold inventory? On the second 41:47 41 minutes, 47 seconds part is there a meaningful difference in procurement cycle and inventory planning between a engine and aeros. And lastly, 41:55 41 minutes, 55 seconds given the West Asia crisis, are you seeing any disruption or taking a different approach to sourcing and inventory buildup compared to the normal strategy? 42:06 42 minutes, 6 seconds Well, okay. Um, titanium uh and supero some of the steels for 42:14 42 minutes, 14 seconds example, in fact, right now steels have one of the longest lead times in the industry. from structic steels as high as 42:23 42 minutes, 23 seconds um we're talking 65 weeks to 75 weeks lead times and titanium typically is a 42:30 42 minutes, 30 seconds three you know 52 weeks lead time you know we have to plan you can always buy a spot but the cost is going to be prohibitive so it's all about planning 42:39 42 minutes, 39 seconds and executing so um the procurement strategy is is a is is all about making 42:46 42 minutes, 46 seconds sure that customer gives you a right you demand and uh you plan your procurement 42:52 42 minutes, 52 seconds based on that and uh and obviously this what you mentioned your third question of current disruptions geopolitical you 43:01 43 minutes, 1 second know west Asia issues uh what we are seeing are all impacting you know that that does disrupt that's why we always 43:08 43 minutes, 8 seconds have certain amount of material uh uh you know covered before the beginning of the quarter and uh in this kind of situations we proactively cover a little 43:16 43 minutes, 16 seconds more you know maybe 25% of our needs in a quarter which may splur to the next quarter demand also we might have been 43:24 43 minutes, 24 seconds typically 70% in the past in the beginning of the quarter. So we have to go through some strategy changes to address this and it cost us working 43:32 43 minutes, 32 seconds capital but at least we are making sure the customer deliveries are there and we are protecting our customer needs. 43:41 43 minutes, 41 seconds Okay. Any difference between a engine and a structure raw material usage? 43:46 43 minutes, 46 seconds It's a look we are we are dealing with almost every material today and most of the time the material is enabled by the 43:54 43 minutes, 54 seconds customer in terms of where to buy. So it's more of driven by that. It's just a different process. 44:01 44 minutes, 1 second Okay. Thank you. Yeah. Yeah. 44:03 44 minutes, 3 seconds [clears throat] 44:04 44 minutes, 4 seconds Thank you. The next question comes from the line of with Sapphire Capital. Please go ahead. Hello. 44:13 44 minutes, 13 seconds Am I audible, sir? Yes. Yes. 44:17 44 minutes, 17 seconds Yes. Thank you so much, sir, for this opportunity. So, sir, we've seen Q4 the depreciation impact and given that you're planning for the GPS in F27. How 44:26 44 minutes, 26 seconds should we look at the overall run rate for depreciation and interest for F27? 44:33 44 minutes, 33 seconds Yeah. So, Q4 our depreciation was about 45 or 46 crores approximately. So of course uh uh that will be the run rate 44:41 44 minutes, 41 seconds plus uh the additions uh during the year. So there will be some addition on the depreciation for the capacity enhancement what we are doing in both 44:49 44 minutes, 49 seconds the segments interest and on the interest. Yeah. 44:59 44 minutes, 59 seconds Yeah. Sorry. 45:03 45 minutes, 3 seconds Yeah. interest we will see a reduction in the interest as compared to uh previous year. 45:10 45 minutes, 10 seconds Okay. And you mentioned sir that the steady state margins for the consumer business can be 18 to 20%. Any sort of rough timelines as to when we can uh 45:17 45 minutes, 17 seconds reach that and what sort of margins can we target for this business in F28. 45:23 45 minutes, 23 seconds It's it's pretty much driven by the utilization you know when you get to 50% uh the our expectation is to get 40 to 45:30 45 minutes, 30 seconds 50% this year. when you get to about somewhere around 75% level utilization we start seeing the margin levels at that level. 45:41 45 minutes, 41 seconds So journey continues. 45:45 45 minutes, 45 seconds Okay. So this 18 to 20% can be seen at 75 75 to 80% utilization. 45:52 45 minutes, 52 seconds Yeah. Okay. Okay. That is it from my side. Thank you sir and all the best. Thank you. 45:59 45 minutes, 59 seconds Thank you. The next question comes from the line of Deep Sha from New Vernon Capital. Please go ahead. 46:08 46 minutes, 8 seconds Uh am I audible sir? Yes. 46:13 46 minutes, 13 seconds Uh so my first question is if we just look at uh global consumer electronic supply chain uh given the quality control hurdles how Chinese 46:21 46 minutes, 21 seconds manufacturers have I mean uh excelled at it over a 15 to 20 year time frame. if you could just share your capabilities 46:29 46 minutes, 29 seconds or your uh rejection rates or yields uh in this segment and how do you plan to scale up? Will we see uh significant 46:36 46 minutes, 36 seconds improvement in FI27 and FI28? Uh that's my first question. My second question is over a three-year time frame, how should 46:44 46 minutes, 44 seconds uh how should one look at capital? Will we see uh I mean I would assume that you would need probably 1500 crores of 46:51 46 minutes, 51 seconds capeex over three years. So uh should I mean uh how do we plan to fund this capeex? Uh these are my two questions sir. 47:03 47 minutes, 3 seconds So uh on the capex fund I will answer essentially for fi27 uh we will leverage uh uh borrowings uh and uh and also uh 47:11 47 minutes, 11 seconds some bit of internal acrals to fund the planned capex. Uh 47:21 47 minutes, 21 seconds see uh with respect to your question on the yield perspective we cannot comment on a specific yield metrics as these are customer confidential. However the 47:29 47 minutes, 29 seconds consumer electronic operations are progressing to the normal learning curve. Currently we are going through learning curve of production environment and our focus is currently improving 47:37 47 minutes, 37 seconds utilization process maturity quality and operating efficiency as volume increases volume scales. 47:58 47 minutes, 58 seconds Are you able to hear us? Hello. 47:59 47 minutes, 59 seconds Deep sir, that answer your question. That that that answers my question. Thank you so much. Thank you. Thank you. Okay. 48:08 48 minutes, 8 seconds Before we take the next question, a reminder to all the participants, you may press star and one to ask a question. 48:17 48 minutes, 17 seconds Your next question comes from the line of Pravin Kumar with AITA capital ad. 48:24 48 minutes, 24 seconds Please go ahead. 48:26 48 minutes, 26 seconds Hello. Yeah. Uh thanks for the opportunity again. Uh I had a question on the aerospace segment. Uh in the in this segment since you have a surface 48:34 48 minutes, 34 seconds treatment capabilities which some of your domestic competitors may not have uh and which might help you to deliver more integrated and larger product. How 48:43 48 minutes, 43 seconds do you see that helping you in the next few years in terms of winning more SKUs and uh you know expanding this part of the business? Thank you. 48:52 48 minutes, 52 seconds Thanks. 48:55 48 minutes, 55 seconds Well, I mean look uh this is a very integral part of our business. In fact, we not only support ourselves our own 49:03 49 minutes, 3 seconds requirements, we also support rest of the market in India. our joint venture with me aerospace API is part of our JVS 49:12 49 minutes, 12 seconds and uh they perform very well you know as in line with our uh overall core aerospace business 49:20 49 minutes, 20 seconds and so we we feel very strongly and this helps us to deliver the new parts at a rate which nobody else does in the in 49:29 49 minutes, 29 seconds the in in the you know in region what I would say for that matter globally I don't know how many customer how many suppliers deliver 100 plus 150 parts per month. 49:42 49 minutes, 42 seconds Uh so so my question go on that's a definite mode for us as a company we have invested over the last 15 years to get there. 49:52 49 minutes, 52 seconds So where do you see that translating into you know see because you have this capability to deliver probably faster turnaround run time and maybe uh to get 50:01 50 minutes, 1 second into more integrated larger uh product parts etc. 50:05 50 minutes, 5 seconds Where do you see that playing out over the next few years? Do you think uh your comp your your customers are beginning to take notice of that and giving you 50:12 50 minutes, 12 seconds more orders which reflect this capability? 50:16 50 minutes, 16 seconds Yeah, I mean you are seeing we we are seeing our order book growing faster than you know what we have done in the past. So it's is definitely helping us 50:24 50 minutes, 24 seconds and also we are adding more parts on on a quarterly basis. 50:28 50 minutes, 28 seconds So that all reflection of that our performance to our customers ability to absorb and also same time deliver. 50:38 50 minutes, 38 seconds Thank you. Thank you. 50:44 50 minutes, 44 seconds The next question comes from the line of Pav Auja with Asymmetric Asset Managers LLP. Please go ahead. 50:52 50 minutes, 52 seconds Hi, thank you for the opportunity. I'm audible. 50:57 50 minutes, 57 seconds Uh sir, you're sounding slightly muffled. Is it clear now? 51:05 51 minutes, 5 seconds This is much better sir. Hello. Is it audible now? 51:08 51 minutes, 8 seconds This is much better sir. Yes, please go ahead. Please go ahead. 51:11 51 minutes, 11 seconds Uh so yeah, I have one question on the consumer segment. So as we got to know that consumer revenue share has grown 51:19 51 minutes, 19 seconds mutually from almost 5% to 17% uh from last year as we see which is a obviously a significant scale up however we still 51:28 51 minutes, 28 seconds see that the segment is still a bit loss making and we as we understood that Hasbro has existed as a client uh and 51:38 51 minutes, 38 seconds and recently it has diversified with metal. So given this backdrop like and along alongside the cat expansion which 51:46 51 minutes, 46 seconds has been done. So like how confident the management is on the consumer break even which uh which was mentioned today like 51:55 51 minutes, 55 seconds is there any path to break even hi this is D here. So to your question I 52:04 52 minutes, 4 seconds think like we covered in the earlier call just to reiterate Q4 was the first quarter where all the manufacturing costs hit us in the consumer electronics 52:13 52 minutes, 13 seconds business because the full capacity was commissioned towards the end of uh Q3. 52:18 52 minutes, 18 seconds So Q4 is the first time where the entire cost all the operational costation everything has hit us. This is the standard process in any RAM phase. 52:28 52 minutes, 28 seconds there's a date on which you uh start commercial production all the costs start hitting as we mentioned earlier as utilization improves from 23% to 40 to 52:37 52 minutes, 37 seconds 50% the absorption of depreciation and fixed costs will be significant through the higher volumes and margins will uh 52:44 52 minutes, 44 seconds recover sharply which is why we have guided that in Q4 FI27 we should be at aa break even I hope that addresses your question 52:53 52 minutes, 53 seconds yeah thank you so Thank you. 53:01 53 minutes, 1 second Your next question comes from the line of Navin Vijay with NS Capital. Please go ahead. 53:07 53 minutes, 7 seconds Uh good evening sir. Uh my question is on the consumer segment. Uh to an earlier participant you had mentioned 53:14 53 minutes, 14 seconds that the current glass block is 830 crores and we are going to add 500 in the subsequent years. that makes it 53:23 53 minutes, 23 seconds 1,330 crores and you had also mentioned that the asset turns will be 1.5 that 53:31 53 minutes, 31 seconds gives a turnover of 2,000 crores in the future. My question is when do we 53:37 53 minutes, 37 seconds envisage to hit that number ballpark sir 53:45 53 minutes, 45 seconds most probably closer to and most probably we'll see that in more than 29 29 okay okay that was my only question 53:54 53 minutes, 54 seconds sir thank you thank you thank you your next followup question comes from Bavika Singhi with Nashai 54:03 54 minutes, 3 seconds please go ahead Yeah, thank you for the opportunity. So, uh sir on the aerospace side, I want to understand that as we 54:10 54 minutes, 10 seconds have our entity in France and even in USA and uh can you tell me how this uh both entities are contributing in our 54:19 54 minutes, 19 seconds aerospace segment because as for my understanding uh it's been quite underutilized uh the capacities are. So 54:27 54 minutes, 27 seconds are we expecting the this new capacity is getting ramp up in uh coming quarters? uh if you can make me 54:34 54 minutes, 34 seconds understand what exactly u are we doing in the France and USA uh unit. 54:43 54 minutes, 43 seconds See uh in the North America the US and US basically is predominantly dep working for the USR US defense piece and 54:52 54 minutes, 52 seconds in the France we work on uh engine and landing gear component. We are not adding any any capacity actually that our whole focus of adding capacity is 55:00 55 minutes only in India. These sites are basically to support us uh bring like France helps us bring our engine and landing gear 55:07 55 minutes, 7 seconds capability and North Africa keeps us doing low uh like there are a lot of programs where uh there are low volumes and everything and supporting also the 55:15 55 minutes, 15 seconds US defense side this one. So that is our predominant focus from the manufacturing perspective in these regions right now. 55:23 55 minutes, 23 seconds So do we see any on the utilization? 55:27 55 minutes, 27 seconds Yeah Rajie in the utilization perspective typically in the these regions it is not driven uh from the machining our the way what we 55:35 55 minutes, 35 seconds see in India these regions are typically uh in these regions western region utilization driven by the number of people people hours that actually drive 55:43 55 minutes, 43 seconds the utilization we normally run these utilization if we see from the capacity is like a single shift basis that's how we operate so the right way to look at 55:52 55 minutes, 52 seconds the utilization is the people hours because of the system where the way it has been published it still measures on the machine that's why it looks lower. 56:04 56 minutes, 4 seconds Okay. Got it. And so uh as we say that we are uh like a wholly vertically integrated facility in the aerospace 56:12 56 minutes, 12 seconds side. uh want to understand that uh in the aeros structures where majorly we uh 56:18 56 minutes, 18 seconds serve uh do the uh do this uh vertically integrated having uh providing a benefit 56:25 56 minutes, 25 seconds on the margin side or we are making the same margins as any other player in the same uh part like aeros structures are 56:33 56 minutes, 33 seconds making or do we see any improvement in the margin because of our advantage having vertically integrated So 56:43 56 minutes, 43 seconds we believe we have a right level of margins for this [clears throat] business and uh at the rate at which scaling you know obviously if you 56:53 56 minutes, 53 seconds increase our margin we may our win rate might come down those are all the competitive environment globally we play so it's a it's a it's a call commercial 57:01 57 minutes, 1 second call where we feel we're achieving the right level of ROC's you know right level of growth that's a combination which we 57:09 57 minutes, 9 seconds We believe it's the right number where we are. We feel confident continue to grow at this rate. 57:15 57 minutes, 15 seconds So also just to add I think the way you should look at it and uh just to highlight right when we built an ecosystem I think the intent is to give 57:24 57 minutes, 24 seconds a solution to the customer. So margin is one element but the ability to c for the customer to give more and more work 57:32 57 minutes, 32 seconds right in an integrated ecosystem within a single zone. uh and we mentioned this in earlier calls also. There are 57:40 57 minutes, 40 seconds increasingly requirements of ESG where the part should not travel. All these are solutions where within one zone in 57:47 57 minutes, 47 seconds Belgium we are able to service and these are the competitive advantage that we get where our right to win business is higher. So margin is one element where 57:55 57 minutes, 55 seconds our ability to grow and get deeper into the customer. So for example this engine ecosystem that we are building again the 58:03 58 minutes, 3 seconds success that we have had here gives the customer confidence to help us build there as well. So what you have to look at it is that this is a very long-term 58:10 58 minutes, 10 seconds relationship with a very large tale of order book and our ability to win this and increase our share of customer wallet is what is important. 58:24 58 minutes, 24 seconds Okay. Thank you. That's all. 58:27 58 minutes, 27 seconds Thank you. Your next question comes from the line of Prana Ara from Molecule Ventures. Please go ahead. 58:35 58 minutes, 35 seconds Hi sir. Uh thank you for giving me this opportunity. Uh my question is focused on the funding. Uh firstly I just wanted 58:43 58 minutes, 43 seconds to understand this 2,800 cr in Karnatica that is cumulative or it's a new capix uh that we're planning over five years. 58:57 58 minutes, 57 seconds Yeah, it's over next five years investment. 59:02 59 minutes, 2 seconds Okay. Um as for um uh consumer division, we are planning 500 crores this year. Uh 59:11 59 minutes, 11 seconds are there any guidance across um across next say five years what we are planning on investing there? 59:20 59 minutes, 20 seconds So, so I think we can't really split the data which is why directionally 2,800 crores plus is the investment like we 59:27 59 minutes, 27 seconds have mentioned this is across our Belgam and Hubli clusters. So like you said this year uh like Harish mentioned earlier also 530 cr roughly and 160 cr 59:36 59 minutes, 36 seconds in aerospace. If you see over five years you'll see some similar pattern of investment. 59:42 59 minutes, 42 seconds Fair enough. And my last part would be around funding of this. Um can you just throw some light on it like I understand 660 crores this year you are planning 59:51 59 minutes, 51 seconds through internal approvals. How exactly you are planning for the test and uh how we plan on going about that? 59:58 59 minutes, 58 seconds So we are as I mentioned earlier we'll be leveraging that to kind of you know fund this capex along with uh internet grows. 1:00:09 1 hour, 9 seconds Um can you just u give a breakdown on that if possible? Take it offline. 1:00:17 1 hour, 17 seconds Yeah. Okay. Can take it offline. Okay. 1:00:24 1 hour, 24 seconds Thank you. 1:00:26 1 hour, 26 seconds Ladies and gentlemen, we will take this as our last question for today. I now hand the conference over to the management for closing comments. 1:00:36 1 hour, 36 seconds Okay. Uh thank you everyone. uh we appreciate uh your time uh being part of this uh call and uh please feel free to 1:00:44 1 hour, 44 seconds reach out to our team for any further questions. Thank you. Thank you. Thank you. 1:00:50 1 hour, 50 seconds Thank you on behalf of Akus Limited. 1:00:54 1 hour, 54 seconds That concludes this conference. Thank you everyone for joining us and your man is connected.