Aeroflex Industries Ltd — Q4 FY26

Aeroflex Industries Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=2CxlG2KdRT0 Published: 7 days ago

0:01 1 second Ladies and gentlemen, good day and welcome to Aeroflex Industries Limited Q4 and FI26 results conference call. 0:09 9 seconds This conference call may contain forward-looking statement about the company which are based on the beliefs, opinion and expectation of the company 0:17 17 seconds as on date of this call. These statement are not the guarantee of future performance and involve risk and uncert uncertainties that are difficult to 0:25 25 seconds predict. As a reminder, all participant line will be in the listen only mode and there will be an opportunity for you to ask question after the presentation 0:34 34 seconds conclude. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchdown phone. I now hand 0:42 42 seconds the conference over to Mr. Asda. Thank you and over to you sir. 0:48 48 seconds Uh thank you so much. Uh good morning to everyone. Uh I welcome you all to Aeroflex Industries Limited uh fourth 0:56 56 seconds quarter and FI 26 earnings call. Joining us today are members of our senior management team along with the 1:03 1 minute, 3 seconds representatives from strategic growth advisors SGA who are our investor relations partner. Uh I hope you have 1:12 1 minute, 12 seconds had the opportunity to review our financial results and the investor presentation which is available on the stock exchange website and also on the company's website. 1:22 1 minute, 22 seconds I'm uh happy to report that FI26 has been uh a great year for the company where our uh our execution excellence 1:32 1 minute, 32 seconds our our strategic uh expansion and the market opportunity have all come together to deliver the highest ever 1:40 1 minute, 40 seconds quarterly and yearly performance uh up to date. I'm also happy to share that the board has also recommended a final 1:47 1 minute, 47 seconds dividend of 20% which translates to about 0.40 40 rupees per equity share uh of face value rupees 2 each which 1:56 1 minute, 56 seconds reflects our continued commitment to delivering uh value to our uh uh to our shareholders. 2:03 2 minutes, 3 seconds The company uh operates in a very niche global market with limited competition and uh we also benefit from a 2:11 2 minutes, 11 seconds competitive advantage as the only India based manufacturer with uh with such scale and with such capabilities. 2:19 2 minutes, 19 seconds uh FI26 has been a landmark year which is which has been marked by our successful entry into the uh the skid 2:27 2 minutes, 27 seconds assemblies and and advanced flow control solutions for high performance and liquid cooling applications which are 2:35 2 minutes, 35 seconds used specifically in data centers and AI infrastructure segment. 2:40 2 minutes, 40 seconds As the consumption of data increases and continues to scale rapidly across the world uh primarily led by AI, cloud and 2:50 2 minutes, 50 seconds high performance computing uh there is a limitation of traditional air cooling and which is you know which is becoming 2:57 2 minutes, 57 seconds increasingly evident and thus the liquid cooling is emerging as the preferred solution for the nextg data center infrastructure. 3:06 3 minutes, 6 seconds uh and you know given its performance uh a superior performance efficiency. 3:13 3 minutes, 13 seconds Now talking about the key highlights for uh the quarter um our our hoses and assembly business continues to 3:20 3 minutes, 20 seconds demonstrate uh steady and consistent growth which is also supported by robust demand coming in from diverse end user 3:29 3 minutes, 29 seconds industries and also our established global customer presence. 3:34 3 minutes, 34 seconds We have achieved an IBIT margin of 23.86% in Q4 which also reflects our strong 3:41 3 minutes, 41 seconds operating leverage and also uh uh is a result of the continuous improvement in 3:48 3 minutes, 48 seconds our product mix. Uh talking about our subsidiary H high which has continued to to gain strong traction during this 3:56 3 minutes, 56 seconds quarter uh delivering a robust yearon-year growth primary dividend uh primary driven by healthy demand across 4:04 4 minutes, 4 seconds its entire product portfolio. We also continue to enhance the product portfolio and expand the market of hideair and also hide air in the future 4:13 4 minutes, 13 seconds would play an important role uh in in the new age businesses that that Aeroflex plans to enter into in the coming years. 4:23 4 minutes, 23 seconds uh our newest uh segment of uh uh providing liquid cooling solutions continues to expand and uh with the 4:32 4 minutes, 32 seconds ongoing supplies of dusted assemblies which has commenced from uh from the end of Q3 uh and also the supply of advanced 4:42 4 minutes, 42 seconds flow claw uh flow control components for high performance applications. 4:47 4 minutes, 47 seconds Uh in in the last financial year, we achieved a strong uh strong traction in our state assemblies business with a 4:55 4 minutes, 55 seconds sales of uh uh 617 uh skid assemblies uh which resulted in 5:03 5 minutes, 3 seconds an overall sales of uh approximately 21.2 crores and this has been uh done over the last four months itself. 5:13 5 minutes, 13 seconds This performance shows the increasing market acceptance of our products and it also reinforces our capability to 5:20 5 minutes, 20 seconds deliver customized higher value and solution oriented offerings positioning this segment as one of the key drivers of the company going forward. 5:32 5 minutes, 32 seconds Uh we have also uh we also showcased our entire portfolio of advanced flexible flow solutions at the data center world 5:41 5 minutes, 41 seconds exhibition which happened in Washington in last month. Uh and it uh reinforced a strategic focus towards the next gener 5:50 5 minutes, 50 seconds uh next generation thermal management technologies for the global markets. 5:56 5 minutes, 56 seconds Uh currently we have scaled our scale assembly capacity from 2,000 units peranom to 6,000 units peranom and uh 6:05 6 minutes, 5 seconds and we are on track to further expand the same uh by the next quarter to 15,000 kids peranom. 6:14 6 minutes, 14 seconds We are also strengthening our innovation pipeline with more than 15 products under development which are family focused on high growth segment. 6:25 6 minutes, 25 seconds Now coming to our assemblies segment, uh we have continued to strengthen our capabilities through expansion of 6:32 6 minutes, 32 seconds capacity and also have commissioned two robotic welding lines to enhance automation precision and operational efficiency. 6:42 6 minutes, 42 seconds In addition, we are also investing in advanced manufacturing capabilities including a new analing furnace facility 6:50 6 minutes, 50 seconds targeted uh for commissioning by the end of this year. These initiatives are expected to increase our product 6:57 6 minutes, 57 seconds offerings also increase our throughput and also support the deeper penetration that we want to uh to do in in 7:06 7 minutes, 6 seconds especially mission critical applications. Our metal bellows segment has begun to gain traction uh across a 7:13 7 minutes, 13 seconds range of applications and we're expecting that this division to deliver strong growth in the coming years. 7:20 7 minutes, 20 seconds Now talking about a financial performance for uh for Q4 FI26. Our total income stood at 126 and a half 7:29 7 minutes, 29 seconds crores uh which is a growth of 38% on a year-on-year basis which is driven by an improved product mix and a growing contribution from value added solutions. 7:41 7 minutes, 41 seconds The the IITA for the quarter came in at rupees 30 crores. which is robust growth of 59% on a yeary year basis and the 7:50 7 minutes, 50 seconds beta margin also saw an improvement of 326 basis point and it came at about 23.86 percentage. 8:00 8 minutes Uh the profit after tax stood at 17.6 crores which is a growth of 57% on a year-on-year basis with a packed margin 8:08 8 minutes, 8 seconds of uh almost 14%. Our cash profit grew significantly to 24 25.4 crores which is 8:16 8 minutes, 16 seconds a growth of 67% on a year-on-year basis which reflects strong cash generation and improved operational performance of the company. 8:27 8 minutes, 27 seconds Now talking about our uh FI26 as a year the total numbers uh I'm happy to share 8:34 8 minutes, 34 seconds that we have been able to achieve the targets that we had set out at the start of the financial year. uh our total income stood at 443.3 8:43 8 minutes, 43 seconds crores which is a growth of 17% on a year on a year and year basis. This is the despite the fact that we had a very weak uh first quarter. 8:55 8 minutes, 55 seconds ITA stood at uh almost 100 kores uh 99.7 to be precise translating to an IITa 9:03 9 minutes, 3 seconds margin of 22.6% 6% and a growth of 26% uh in value terms on a year on a 9:10 9 minutes, 10 seconds year-on-year basis. Our uh our PAT stood at 55 and a half crores with a packed margin of 12 and a half%. 9:18 9 minutes, 18 seconds our skate assembly segment which is our newest segment has begun contributing to the top line and now uh and is right now 9:26 9 minutes, 26 seconds accounting for only 5% in F26 but we expect that this share to scale significantly uh in the upcoming years 9:36 9 minutes, 36 seconds our value added product segment which includes assemblies and fittings and bells contributed 52% of the total sales 9:46 9 minutes, 46 seconds the domestic uh sales contribution has also increased to 31% from 26% which is mainly driven by the 9:54 9 minutes, 54 seconds increased attraction coming in from the skill assemblies and also from higher. 10:00 10 minutes Now looking ahead to uh the the current financial year which is FI27 uh we remain focused on deepening our 10:10 10 minutes, 10 seconds strategic uh uh shift towards higher value added products and also expand our presence at emerging sectors such as the 10:18 10 minutes, 18 seconds data centers and AI infrastructure. We will continue to pursue growth through new product development, through 10:25 10 minutes, 25 seconds optimization of margins, capacity expansion, geographic diversification and also inorganic opportunities. 10:34 10 minutes, 34 seconds These initiatives position our company uh our company to strengthen our market leadership and deliver consistent growth 10:42 10 minutes, 42 seconds both in terms of uh top line and bottom line. with the strong order pipeline that we currently have uh long-standing 10:50 10 minutes, 50 seconds customer relationships and our ongoing investments in technology and capacity we are well positioned to to sustain a growth momentum in the near future. 11:01 11 minutes, 1 second We continue to strengthen our capabilities and to enhance our execution uh at the ground level and aim to deliver a robust growth over the next 11:09 11 minutes, 9 seconds few years. Uh with that I would like to conclude my remarks and thank you so much everyone for attending the call. We 11:17 11 minutes, 17 seconds can now open the floor for Q&A. Thank you. 11:20 11 minutes, 20 seconds Thank you so much sir. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star 11:28 11 minutes, 28 seconds N1 on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star N2. 11:35 11 minutes, 35 seconds Participants are request to use handsets while asking a question. 11:40 11 minutes, 40 seconds Ladies and gentlemen, we'll wait for a moment while the question Q assembles. 11:50 11 minutes, 50 seconds Our first question comes from the line of Nikon Bhanushali from Walford PMS. Please go ahead. 11:57 11 minutes, 57 seconds Uh yeah, thank you for the opportunity. Am I audible? Yeah. 12:03 12 minutes, 3 seconds Uh yeah, so I had a few questions. Uh so what is the uh order book for the uh liquid cooling skids that we have currently? 12:15 12 minutes, 15 seconds So in the liquid the cooling skits we work on a long-term contract with our u with the supplier who with whom we have 12:24 12 minutes, 24 seconds an exclusive contract and they have given a pipeline for the uh entire year 12:31 12 minutes, 31 seconds and then they break it down into you know quarterly POS. So uh since right now we dealing with one specific uh or 12:40 12 minutes, 40 seconds only one particular supplier due to u disclosure agreements uh not be able to 12:47 12 minutes, 47 seconds share the the order book with them that we have. 12:51 12 minutes, 51 seconds But yes we have a we have a vision you know you know for the entire year that they have shared with us 12:58 12 minutes, 58 seconds and the our capacity expansion is based uh on the on the same lines. 13:04 13 minutes, 4 seconds Okay. Okay. So just for the uh so just if you can uh share something on the planned utilization levels that we'll have uh for the 15,000 capacity for PUA. 13:16 13 minutes, 16 seconds So in half year we'll have 6,000 capacity uh I think about 6,000 and then uh we'll go on to 15,000. So what what plann utilization levels? 13:27 13 minutes, 27 seconds So uh I would say the maximum utilization that we can do of the capacity would be about 75 to 80% at the 13:36 13 minutes, 36 seconds peak level. Obviously when we start uh you know when we commission the capacity uh to to get it up to 75 uh% would you 13:46 13 minutes, 46 seconds know would take its uh time uh as as naturally with any expansion but but the peak utilization you you can consider it at between 75 to 80%. 13:57 13 minutes, 57 seconds So, so uh just a follow for 6,000 we can uh utilize up to 75% in the current year. 14:06 14 minutes, 6 seconds Yes. 14:07 14 minutes, 7 seconds Okay. Okay. And my second question is uh regarding the metal bellows, could you uh share some numbers? So what uh how 14:14 14 minutes, 14 seconds much was the business uh we did in the current year uh in the previous year for metal bellows in FI26? 14:22 14 minutes, 22 seconds In the current year uh uh on an annual basis we did about 8 kores of business from the metal bellows section and the m 14:31 14 minutes, 31 seconds uh the majority of the business came in in Q3 and Q4 where we have seen uh the uptick in sales beginning uh from uh in 14:41 14 minutes, 41 seconds the last two quarters and we expect that uh this year the bellows the division would would would grow significantly 14:48 14 minutes, 48 seconds because we have uh certain uh certain large inquiries coming in from from OEM. 14:55 14 minutes, 55 seconds So we are hopeful to get those converted and see and significant uptake in the sales of metal mellows in the current financial year. 15:05 15 minutes, 5 seconds Okay. And uh lastly uh what was the hide air uh revenue for the FI26? 15:14 15 minutes, 14 seconds Uh hide air revenue in FI26 was uh uh 31.64 crores. 15:22 15 minutes, 22 seconds Okay. Okay. Yeah, that's it from my segment. Thank you and all the best. Thank you. 15:30 15 minutes, 30 seconds Ladies and gentlemen, in order to ensure that the management will be able to address all the question from the participant, we request you to kindly 15:38 15 minutes, 38 seconds limit your question to two question per participant. If you have a follow-up question, please rejoin the queue. 15:45 15 minutes, 45 seconds The next question come from the line of Raman KB from Sequent Investments. Please go ahead. 15:53 15 minutes, 53 seconds Uh hello, can you hear me? Yes. 15:58 15 minutes, 58 seconds Yeah. Uh so uh my uh question is uh just a follow up on the previous participants with respect to H highare. Uh so uh 16:06 16 minutes, 6 seconds what's our current utilization and are we planning with respect of H highare and are we planning to do any capex with uh in the highare business? 16:17 16 minutes, 17 seconds So uh uh in terms of utilization I think uh iPad is uh you know currently at 16:23 16 minutes, 23 seconds about 60% utilization uh uh our aim in the next in this financial year is to 16:30 16 minutes, 30 seconds utilize the capacity of IDA for internal consumption for aeroflex industries because we have certain projects coming 16:38 16 minutes, 38 seconds up in the next few months where we have requirements of of specific fittings which we uh are going to manufacture 16:46 16 minutes, 46 seconds in-house at uh at H Highare and and these are uh uh these are these are products for uh for high-end 16:54 16 minutes, 54 seconds applications. Hence we want to utilize the cap the capabilities of high air for our internal consumption. 17:03 17 minutes, 3 seconds Okay sir. And the uh uh on the liquid cooling part uh uh you mentioned that the liquid the techn you have a 17:10 17 minutes, 10 seconds technology exclusive agreement with one of the US company US based company with respect to your tech technology right? 17:20 17 minutes, 20 seconds No with regards to uh with regards to uh technology with regards to supply with regards to everything. So we have an 17:27 17 minutes, 27 seconds exclusive contract with them for skit assembly. 17:29 17 minutes, 29 seconds Yeah. So uh I just want to understand uh under this agreement 17:35 17 minutes, 35 seconds uh uh uh is it a are you sharing any revenue or are you giving them any 17:42 17 minutes, 42 seconds royalty and if so can we know? So I'll just to clarify yeah I would just like to clarify uh this is an exclusive 17:49 17 minutes, 49 seconds agreement where we are going to supply the skid assemblys to them uh you know so we have an exclusive uh you know 17:56 17 minutes, 56 seconds agreement for the India market where whatever skid assemblies that we manufacture we will be supplying it to them and then obviously they will be 18:04 18 minutes, 4 seconds supplying to their customers. So so their customers are all the companies who are setting up data centers basically. 18:14 18 minutes, 14 seconds So basically you're not paying uh anything to the US uh client, right? 18:20 18 minutes, 20 seconds So this is a US uh headquartered company. They have an very big operations in India. So we have tied up 18:27 18 minutes, 27 seconds with the the India subsidiary of of theirs basically. 18:32 18 minutes, 32 seconds Okay, understood sir. And so uh my last question is uh so during the quarter we have uh seen that the exports have 18:40 18 minutes, 40 seconds decreased like uh from almost uh 69% it went down up to 60% and your domestic 18:47 18 minutes, 47 seconds business is picking up. So can we expect this to be the new normal like 40 60 spread between exports. 18:55 18 minutes, 55 seconds So I would just like to clarify export hasn't not decreased. Uh the ratio has changed that does not mean the value of exports has decreased. So just wanted to 19:03 19 minutes, 3 seconds clarify that domestic share has increased significantly. Reason being that the domestic sales has almost increased by about 40%. So that's why 19:12 19 minutes, 12 seconds the ratio of domestic is higher uh as compared to the the previous but exports has also increased in the double digits 19:19 19 minutes, 19 seconds in Q4 despite the fact of the entire situation that you are seeing where which is happening uh uh you know in 19:28 19 minutes, 28 seconds West Asia. So our exports have also increased but because the domestic has increased significantly more than the exports. Hence the ratio of uh domestic 19:37 19 minutes, 37 seconds is now more and obviously because uh the entire business of state assemblies will be in the domestic market. So this ratio 19:45 19 minutes, 45 seconds of domestic would also increase in the near future. 19:50 19 minutes, 50 seconds So can we expect the same uh like you mentioned that domestic business increase by almost 40%. So can we expect that domestic business to grow at a 19:58 19 minutes, 58 seconds higher uh higher uh rate versus the export business or uh will it normally definitely yes definitely no because the 20:06 20 minutes, 6 seconds entire state assemblies will be sold in the domestic market right now. So okay the share of domestic board increase for sure. 20:14 20 minutes, 14 seconds Okay, thank you sir. I'll follow up in the queue. Thank you. 20:22 20 minutes, 22 seconds Our next question comes from the line of Karan Gupta from ACMIL. Please go ahead. 20:31 20 minutes, 31 seconds Yeah. Hi. Uh am I audible? Yes. Yeah, I can hear you. 20:36 20 minutes, 36 seconds Yeah. So uh so my question uh is related to more to understand the product 20:42 20 minutes, 42 seconds portfolio. So I'll have some basic questions to understand. Uh what is the 20:49 20 minutes, 49 seconds share of uh our product share of in the overall van of the data center and 20:55 20 minutes, 55 seconds liquid cooling uh systems? How much uh our products contribute 21:02 21 minutes, 2 seconds uh in the costing side? Do we have any patent on that product or or in terms of 21:09 21 minutes, 9 seconds technology uh and any any competitive advantage over or export market 21:19 21 minutes, 19 seconds what's the cost benefit we have this sort of questions okay so first of all I'll go with the 21:27 21 minutes, 27 seconds last question first uh right now for the export market for the liquid cooling we uh do not uh supplying our skid 21:35 21 minutes, 35 seconds assemblies in the export market. Right now we are only supplying our whole assemblies which goes into data centers 21:42 21 minutes, 42 seconds in the international market. So skid assemblies right now is is 100% in the domestic market only. Uh in terms of uh 21:51 21 minutes, 51 seconds the patent so uh we are working with like I mentioned this uh company. So uh we are actually jointly developing the 22:00 22 minutes product along with uh them. uh but obviously since they are the principal uh uh we are designing the product along 22:08 22 minutes, 8 seconds with them so we are aware of the technology that goes into the product but right now we don't have any patent on the particular product also reason is 22:17 22 minutes, 17 seconds because every [clears throat] uh the the design of every data center is unique and it's different so hence the skid 22:24 22 minutes, 24 seconds assemblies required for every data center uh in terms of the design would be uh different so hence there is no 22:32 22 minutes, 32 seconds patent per person right now. It is about the technology. How do you uh how do you manufacture the product in such a way 22:39 22 minutes, 39 seconds that you reduce the uh the operational cost for the data center? That's the real skill in this particular uh you 22:48 22 minutes, 48 seconds know business. So because ultimately uh there is a huge operational you know cost for a data center in terms of cooling. So how do you reduce uh their 22:56 22 minutes, 56 seconds operation cost? That's the real USP in this. And then uh the total time I think in the uh the data center market right 23:04 23 minutes, 4 seconds now is is is is huge. It's growing at almost 35% uh uh you know on a year and year basis. 23:13 23 minutes, 13 seconds Uh right now it's about I think at about 3 billion 3 odd billion right now and uh 23:19 23 minutes, 19 seconds which is expected to grow to almost about 21 billion in the next uh five to six years. So that's almost a feature of 23:28 23 minutes, 28 seconds of close to 34 35% right. So that's the market that we are capturing right now. 23:35 23 minutes, 35 seconds Although right now we have a very very very very small percentage of the market. Uh but our aim is to uh to keep 23:42 23 minutes, 42 seconds increasing our market share and and also uh expand into more and more you know products which are will be used in the 23:49 23 minutes, 49 seconds data centers in the near future. So uh so our aim is to uh be yeah 23:56 23 minutes, 56 seconds just just a follow up on that because uh the uh the question will be unanswered. 24:02 24 minutes, 2 seconds Uh so let's say uh just to add here the unit economics of uh or the cost of 1 24:11 24 minutes, 11 seconds gawatt of capacity. So I have uh have figured let's say 1 gig of capacity 24:18 24 minutes, 18 seconds costing you around 50 to 60,000 cr in India uh not the hypers scale uh AI data 24:24 24 minutes, 24 seconds center but the normal one right now this figure is correct first of all 50 24:31 24 minutes, 31 seconds to 60,000 cr for the 1 giga capacity I will not be able to comment on that because I am not in the business of 24:39 24 minutes, 39 seconds making data centers probably not able to comment on something which Okay. Okay. 24:43 24 minutes, 43 seconds Just just a broad uh just a broad I'm just trying to understand here. So let's say uh if you just Google it. So it will 24:51 24 minutes, 51 seconds give you 50 60,000 K of it. Now in the liquid just in the time for everybody can you be little specific on your question? Yeah. 25:02 25 minutes, 2 seconds Sure. Sure. Sure. Sure. Thank you. 25:03 25 minutes, 3 seconds Yeah. So just just just wanted to know the cost of 1 G of uh capacity 25:10 25 minutes, 10 seconds what is the share of our products basically how much we are I would say in terms of the entire I 25:19 25 minutes, 19 seconds would not see I see first of all to uh you know just to clarify so we are not selling directly to the data centers 25:26 25 minutes, 26 seconds right we are selling to uh the company who provides the entire liquid the cooling solution so uh the skit 25:34 25 minutes, 34 seconds assemblies is a part of the entire liquid cooling. It is not just the you know the companies who are who are uh providing cooling distribution units. 25:45 25 minutes, 45 seconds Can I just repeat my answer please if you don't mind? Sure. 25:48 25 minutes, 48 seconds Yeah. So yeah so uh my point was that we are only you know providing a part of the liquid cooling. Hence to give you an 25:55 25 minutes, 55 seconds exact number in terms of how much is our uh our product as compared to the entire cost of the data center would be a difficult to answer for us because we 26:04 26 minutes, 4 seconds are not supplying directly to the data center. But from you know what I have understood from the market knowledge 26:11 26 minutes, 11 seconds that we have have gained is that the liquid the cooling uh comes to about 10% of the cost of the data centers anywhere 26:19 26 minutes, 19 seconds between 10 to 11%. That's the cost of the entire liquid cooling which includes your primary, secondary and all kinds of you know cooling uh at the data center. 26:30 26 minutes, 30 seconds So that's the time for liquid cooling. 26:34 26 minutes, 34 seconds Yeah. Okay. That's very helpful. Thank you. Okay. Thank you. Thank you. 26:43 26 minutes, 43 seconds Our next question comes from the line of T Patil from NHI. Please go ahead. 26:49 26 minutes, 49 seconds Uh thank you so much for the opportunity and congratulations on a good set of numbers sir. Uh sir first question is 26:56 26 minutes, 56 seconds regarding uh you know if I go through the con of you know last quarter probably you said 42 crores of uh skates 27:03 27 minutes, 3 seconds were for immediate execution. So is it like something there was some part of execution which was supposed to be done in this quarter but was not done and and 27:12 27 minutes, 12 seconds if not then what was the reason? Is there some supply bottleneck? 27:17 27 minutes, 17 seconds So uh the uh right now the main uh bottleneck is from the design aspect where uh the design which was in 27:25 27 minutes, 25 seconds initially to be provided by the principle is actually now being done by our entire team. So designing of the 27:33 27 minutes, 33 seconds skilled assemblies is is the critical uh you know aspect here where uh until and unless assemblies is designed and and 27:42 27 minutes, 42 seconds finalized uh the production cannot start for the same. Plus also what we have seen over the past few a couple of 27:50 27 minutes, 50 seconds months is that there is a significant uh uh you know supplier quality control and 27:57 27 minutes, 57 seconds sorry like customer quality control and customer audits the end customer I'm talking about not the one that we are working with the end customer who 28:04 28 minutes, 4 seconds ultimately uh at whose data center uh the particular skid assemblies will be installed. So there is a very very 28:12 28 minutes, 12 seconds stringent and uh very detailed uh you know quality checks that has been conduct you know that are conducted by each and every customer and every 28:20 28 minutes, 20 seconds customer have their own unique uh way of uh you know of doing the the audits. So obviously some uh look at some specific 28:29 28 minutes, 29 seconds things some look at uh you know the welding aspect some look at the design aspect. So, so that is one where where 28:38 28 minutes, 38 seconds we they still feel that I think we are still slightly behind the supply uh as compared to the demand is because that 28:45 28 minutes, 45 seconds uh the design and the the quality checks post the manufacturing that is where something we we are facing a bit of a 28:53 28 minutes, 53 seconds bottleneck in terms of the the time but uh yeah so I think we are hoping that over the next couple of months I think 29:00 29 minutes that will be uh streamed out uh and and smoothened out I'm sorry And then we'll be able to see 29:08 29 minutes, 8 seconds more business uh you know uh in the sense more uh more sales happening from this particular uh you know business. So 29:15 29 minutes, 15 seconds we have also so in terms of manufacturing there still are much higher but obviously supply depends on a lot of these quality controls and quality checks. 29:25 29 minutes, 25 seconds Understood. Understood. That helps sir. 29:27 29 minutes, 27 seconds So my uh second question is uh you although said you know for 6,000 kids we will be probably reaching 75% of the utilization but let's say once you 29:35 29 minutes, 35 seconds expand it to 15,000 right the the incremental capacity would probably reach up to what utilization by let's 29:41 29 minutes, 41 seconds say the end of year well um our target would be that by the 29:49 29 minutes, 49 seconds end of the financial year to reach uh you know to reach to at least 60 to 70% so almost very close to the capacity uh 29:58 29 minutes, 58 seconds that we are setting up. Uh our target would be to reach there by say you know March of next year. 30:06 30 minutes, 6 seconds Obviously it depends on a lot on the uh on the you know uh on the operational 30:13 30 minutes, 13 seconds side because the the business right now is uh so there is a lot of operational excellence required for these kind of uh 30:22 30 minutes, 22 seconds uh to manufacture these kind of state assemblies. 30:25 30 minutes, 25 seconds Understood. But so let's say and that's great and let's say if we are probably expecting to reach it reach you know 60 70% of the utilization you know are we 30:32 30 minutes, 32 seconds probably planning to add more capacity towards kids are you planning to you know go beyond 15,000 our ultimate aim is to go beyond 15,000 30:41 30 minutes, 41 seconds but I would say right now the the focus of uh uh you know our focus is to get the first 15,000 uh you know commissioned and get it up and running. 30:52 30 minutes, 52 seconds uh obviously uh the the first focus is over there and then obviously you know once that is uh under process and once 31:01 31 minutes, 1 second it is commission we'll then look at further expansion great and sir you know you have mentioned the PPT as well you probably 31:09 31 minutes, 9 seconds we probably represented uh in a in an expo in USA any engagement from there any leads from there you know are we engaging with some customers apart from 31:17 31 minutes, 17 seconds the one which we probably want in domestic are we engaging with some other customers in the international market through that expo somewhere else. So 31:24 31 minutes, 24 seconds yes, so our aim in that exhibition was to expand our business internationally also in terms of the uh in terms of the 31:33 31 minutes, 33 seconds liquid the cooling uh space and that is why we we exhibited uh in that exhibition we have we have already got 31:40 31 minutes, 40 seconds certain leads and then uh you know the team is you know has started working on those leads and to discuss with uh uh 31:49 31 minutes, 49 seconds those customers with regards to uh the liquid cooling solutions. Great. 31:54 31 minutes, 54 seconds They already started the discussion but very difficult to to comment on that right now about the status here. 32:00 32 minutes No, understood. Understood. And just for higher you said we probably using it for you know niche applications and high applications. So would higher we 32:09 32 minutes, 9 seconds probably use for connectors in DC as well and if yes you know probably then then what I understand is for us to 32:17 32 minutes, 17 seconds probably use higher connects uh you know hideer connectors we need approvals from the hback players right the customers we are right now working with so are those 32:26 32 minutes, 26 seconds uh you know sampling and approvals going to them you know what stage are we in that yeah so like I mentioned for uh we we 32:35 32 minutes, 35 seconds want to utilize the capacity of of high for our internal use. Uh uh you know right now because we are seeing a lot of 32:43 32 minutes, 43 seconds demand coming in from end fittings and connectors uh uh not only for the uh you know uh you know for us uh for our host 32:52 32 minutes, 52 seconds assemblies uh and uh for some specific application in in HVAC and also for uh for data centers. So hence we want to uh 33:02 33 minutes, 2 seconds we planning to utilize the capacity of hider over there. Yes. In terms of supplier checks and uh sorry customer uh 33:08 33 minutes, 8 seconds checks and customer audits, I I think uh at whatever manufacturing facility we we manufacture any product, right? They are 33:17 33 minutes, 17 seconds uh sub kinds of uh obviously first we require all kinds of certifications which are required by the customer and then obviously customer audits and 33:25 33 minutes, 25 seconds customer uh supply sets are a must uh you know you know before we start supplying to these high-end industries. 33:34 33 minutes, 34 seconds Okay. and we are in the process of I'm sorry to interrupt you Mr. Patel but you may please rejoin the queue for more question. 33:40 33 minutes, 40 seconds No problem. Thank you. Thank you so much sir. Thank you. 33:46 33 minutes, 46 seconds Reminder to all the participant in order to ensure that the management will be able to address all the question from the participant we request you to please 33:53 33 minutes, 53 seconds limit your question to two question per participant. If you have a follow-up question please rejoin the queue. 34:00 34 minutes Our next question come from the line of sil Jen from Lucky Investment. Please go ahead. Thanks for the opportunity. 34:08 34 minutes, 8 seconds Uh first question. Um at 15,000 kids full utilization, can you 34:15 34 minutes, 15 seconds give us a sense on how many megawatts of liquid cooled data centers that can support? 34:23 34 minutes, 23 seconds Oh well uh it's like uh it's difficult to give a number for that uh in a sense. So you 34:31 34 minutes, 31 seconds know uh I can probably say that at in terms of the the business I can say that 34:37 34 minutes, 37 seconds at at say 75% capacity utilization right uh and uh like you know which is I said 34:46 34 minutes, 46 seconds uh you know could be the peak we can expect a total revenue for the business 34:51 34 minutes, 51 seconds to come in at about 300 325 to about 3 34:57 34 minutes, 57 seconds odd crores. Now in term of uh sorry sorry go ahead 35:04 35 minutes, 4 seconds yeah so 300 uh 325 to about 330 crores in terms of megawatt 35:12 35 minutes, 12 seconds it's it's slightly you know difficult the reason being if you see that uh some scale assemblies that we manufacture 35:19 35 minutes, 19 seconds sell at a higher price some scale assemblies that we manufacture at a slightly lower price so it and the entire uh design depends on the design 35:28 35 minutes, 28 seconds of the data center, right? uh and how they have designed the entire data center with you know is it a more you 35:35 35 minutes, 35 seconds know flat data center is it a more vertical data center is it a uh you know you know is it a different style of data 35:43 35 minutes, 43 seconds center so you know commenting on specific how many megawatt that would convert into would be difficult for me to to give an answer I can talk about 35:52 35 minutes, 52 seconds the revenue yeah that how much it will generate us got it and on the base business uh can you talk about the share of the largest 36:01 36 minutes, 1 second customer uh and if if you could talk about the uh 36:08 36 minutes, 8 seconds you know growth outlook uh from that customer or from those set of customers given the infrastructure buildup in in 36:16 36 minutes, 16 seconds uh in the US that we are seeing now you talking about uh the uh the US or are you talking about uh the data uh the 36:25 36 minutes, 25 seconds liquid cooling the skid assemblies no the US uh business uh x of uh list of 36:33 36 minutes, 33 seconds okay uh I think our uh our uh biggest customer in the in the international 36:39 36 minutes, 39 seconds market contributes about uh 25 20 36:46 36 minutes, 46 seconds sales uh right now uh and in terms of the outlook uh well I 36:54 36 minutes, 54 seconds you know we have seen so you know despite the fact that uh uh the last 37:00 37 minutes year US had all kinds of uh uh you know all kinds of issues in terms of uh initially beginning the year with 37:08 37 minutes, 8 seconds tariffs and then uh uh and then the tariffs got you know you know even bigger uh coming up to the middle of the 37:16 37 minutes, 16 seconds year and then ultimately at starting at the almost the you know the middle of Q4 when the tariff release came in but then 37:24 37 minutes, 24 seconds suddenly then the the war happened. So despite all of that, I think our US business contribution to our overall 37:31 37 minutes, 31 seconds sales has increased uh uh in terms of uh you know the sales uh in terms of uh uh 37:40 37 minutes, 40 seconds the value also the US business has increased as compared to the previous year. So I think despite all of that we are seeing significant uptake. uh the 37:49 37 minutes, 49 seconds start of the year to be frank we were expecting the US business uh to do much much better but I think I would say 37:56 37 minutes, 56 seconds despite everything that happened this year in the US uh despite all of that the US business has still shown 38:05 38 minutes, 5 seconds significant jump I think that's uh I think I would say that's a great achievement by the team uh to get these 38:12 38 minutes, 12 seconds uh you know to get this kind of business from the US despite all of these issues that have happened in the the year. 38:19 38 minutes, 19 seconds Got it. Good to hear. And one final clarification, the connectors that we spoke of, these are the QDS that have proven to be bottlenecks in the HVAC industry, especially for liquid cooling 38:28 38 minutes, 28 seconds elsewhere in the world. Is that is my understanding correct? 38:32 38 minutes, 32 seconds Um, no, not necessarily. The connectors that I'm speaking that I'm talking to right now are used uh some of it are 38:39 38 minutes, 39 seconds used for SF assemblies. Some of it are also used for host assemblies which are ultimately used in data centers. So uh 38:47 38 minutes, 47 seconds in terms of uh you know our you know in terms of our bottleneck the bottleneck is not the connectors per se. It's it's a bottleneck is right now the design 38:55 38 minutes, 55 seconds part as I said and the second is the the customer check and the customer you know audits that happen on a rigorous basis and almost like every day. 39:07 39 minutes, 7 seconds Okay. And you're uh you're you know the largest account growing at a certain pace. Is that because of higher wallet 39:14 39 minutes, 14 seconds share with that specific customer or the end industry for that larger customer growing at that pace? 39:21 39 minutes, 21 seconds Uh you uh talking about uh the in the US business in the US business. So in the US business we have seen not only the 39:29 39 minutes, 29 seconds largest customer grow but also the other you know customers that we have have also shown a lot of you know growth. We 39:38 39 minutes, 38 seconds are also seeing a lot of demand coming in for whole assemblies from the US from uh you know from you know from customers 39:46 39 minutes, 46 seconds who we you know previously did not have and these customers are the ones who are looking for the products that we 39:53 39 minutes, 53 seconds manufacturing whether it's uh the host assemblies whether it's uh and like I said even we started to receive orders 40:00 40 minutes for uh metal bellers as well so we seeing attraction for these products uh in the US as 40:08 40 minutes, 8 seconds Great to hear that sir. Thank you so much. 40:12 40 minutes, 12 seconds Thank you. Our next question come from the line of Shwa from I thought PMS. Please go ahead. 40:20 40 minutes, 20 seconds Yes sir. Uh my first question is a followup on the previous uh question. So this 60% around 60% utilization that we 40:29 40 minutes, 29 seconds are targeting by uh next year March is that incremental orders coming fully from this principal company or are we 40:37 40 minutes, 37 seconds also looking at uh export orders for the skills? 40:42 40 minutes, 42 seconds Uh right now what we have right now what we have is right now what we have is for uh the uh 40:50 40 minutes, 50 seconds orders which will come in from uh the principal only uh because we have not taken into consideration the orders 40:57 40 minutes, 57 seconds which will come in for uh uh you know any other you know the customers because the other customers the talks have just begun so it's too early to to say that. 41:08 41 minutes, 8 seconds Okay. And uh sir I saw that in this quarter's PPT we had increased miniature bellow's capacity to 60,000 pieces. So 41:17 41 minutes, 17 seconds will this be sufficient for our 15,000 kids or will we be needing more capex in this regard? 41:25 41 minutes, 25 seconds So sorry uh for the miniature bellow segment the miniature bellow segment will we be needing any uh incremental capex? 41:38 41 minutes, 38 seconds So uh in municipal like I mentioned in my previous call we are we won't be doing uh any further uh expansion except 41:45 41 minutes, 45 seconds a few uh you know ancillary equipments or machinery that we require. We have redeployed the capital that we are 41:53 41 minutes, 53 seconds allocated to miniature metal bellows uh to uh to you know the liquid cooling vertical. So right now as I speak there 42:02 42 minutes, 2 seconds will not be much capex that would happen in the in the you know in the next uh in at least to this financial year. 42:10 42 minutes, 10 seconds Okay sure just wanted to yeah yeah yeah please go ahead. Yeah yeah yes please continue. 42:18 42 minutes, 18 seconds Yeah, also just wanted to say that uh you know with regards to the utilization of 60%, right? So uh the 60% is on 42:26 42 minutes, 26 seconds talking about March closing uh you know which will mean that uh uh by March we expect that in the month of March we will be hoping to achieve 60% 42:34 42 minutes, 34 seconds utilization. So just wanted to clarify to everyone that it's not 50% for the entire year it's for the March closing. 42:44 42 minutes, 44 seconds Yeah. 42:44 42 minutes, 44 seconds Okay sir. And this is on the 15,000 kids, right? Yeah, that's correct. 42:49 42 minutes, 49 seconds Okay. All right. So, last question. Uh there was an income tax demand of around 40 crores 42:56 42 minutes, 56 seconds relating to a rather in 2019 if I'm not wrong. Yeah. 43:00 43 minutes So, this is like almost a full year back number. So, how confident are we on this appeal? And uh like could you give me an 43:09 43 minutes, 9 seconds expected timeline for when this will get resolved? 43:12 43 minutes, 12 seconds Yeah. So this relates to uh I think financial year uh 1819 I think sorry financial year 178 assessment year 1819. 43:22 43 minutes, 22 seconds Uh this is with regards to the so when we took over this company which was a stressed company. Uh there was a waiver 43:29 43 minutes, 29 seconds of loans sorry the waiver of of interest by the banks and and uh uh you know by 43:35 43 minutes, 35 seconds the banks basically uh we have already you know we had done the necessary disclosures in both our financials and 43:44 43 minutes, 44 seconds our income tax return. So uh we are confident that this is something which will be you know uh which would come in 43:52 43 minutes, 52 seconds our favor in in the appeal that we going to file. I also would like to just you know tell everyone that because of time bar situation also I think the income 44:01 44 minutes, 1 second tax department reopened this particular uh uh assessment where the assessment for this particular year was already 44:09 44 minutes, 9 seconds closed previously but it was opened and uh because of time bar issues. I think 44:15 44 minutes, 15 seconds they have uh uh they have claimed that it is an undisclosed business income where it was uh you know clearly 44:23 44 minutes, 23 seconds disclosed both in financial statements and also in the income tax return. So as per our uh uh you know our advisers and 44:31 44 minutes, 31 seconds our uh our lawyers we are extremely confident that these things is going to be reversed in the appeals that we you know going to file. 44:41 44 minutes, 41 seconds All right sir. Thank you so much. 44:44 44 minutes, 44 seconds Yeah, thank you. 44:50 44 minutes, 50 seconds The next question come from the line of Aman Witch from Institute Investment Management. Please go ahead. 44:58 44 minutes, 58 seconds Um, good morning sir. My first question is on the uh data center business new products uh X of Skills. So could you 45:07 45 minutes, 7 seconds talk about when can we expect uh these products to be launched in the market and start contributing as well as uh I 45:15 45 minutes, 15 seconds believe we are also adding a lot more products. Uh so what is your strategy of in terms of building a team what it is 45:23 45 minutes, 23 seconds today what do you see this team size in next two three years. 45:28 45 minutes, 28 seconds So uh in terms of the the team right I think we uh the entire team you know whether you talk about sales and marketing operations 45:37 45 minutes, 37 seconds uh you know technology I think uh you know everywhere you'll see a significant uh uh uh significant push on on on 45:46 45 minutes, 46 seconds increasing the team which is also you know pretty evident by uh the the increase in the employee you know cost if you see from our financial numbers. 45:55 45 minutes, 55 seconds Uh so the the thrust is uh to build the team and to scale it up. Uh with regards to the uh uh I sorry I forgot your first question. What was the first question? 46:06 46 minutes, 6 seconds Yeah it was when do you expect new products apart from skit? So we are adding lot more new products in data center business. So 46:13 46 minutes, 13 seconds so in the data center business apart from the skid assemblies we have our our host assemblies. So you know you know you know which we are designing 46:21 46 minutes, 21 seconds specifically uh you know for data center projects. Uh so these host assemblies will be used in data center applications 46:30 46 minutes, 30 seconds whether it's for the last mile uh you know cooling or whether it is for the firefighting solutions or whether is for transfer of any kinds of other liquids. 46:42 46 minutes, 42 seconds U we have already started developing those products. It is uh it is under approval at the customer's end. Uh our 46:51 46 minutes, 51 seconds also our analing plant that we are planning to commission would also you know contribute to this because a a lot 46:59 46 minutes, 59 seconds of the the host assemblies and data centers have to be unneeded. Uh so that would also be uh that would also 47:07 47 minutes, 7 seconds contribute to that. So these are the new products that we developing. Some of it are under development. some of it, you 47:14 47 minutes, 14 seconds know, under customer approval and I'm I'm I'm hoping that from the next quarter, you know, we'll start to see the sales coming in from these products as well. 47:25 47 minutes, 25 seconds Sure sir, that is helpful. My second and final question is uh so sir, we have supplying skits for domestic market and 47:32 47 minutes, 32 seconds I believe our customer will uh put these kids in the uh data center. So I uh I 47:39 47 minutes, 39 seconds also think that you would have already started the process of getting some global approval because the same customer is a very big player in the 47:46 47 minutes, 46 seconds global market. So where where are we in that journey of getting the approval of uh the skits for the global markets? Can 47:54 47 minutes, 54 seconds we expect something in FI27 or mostly in FI28 only we'll start getting the approval and maybe supply also for the global markets? 48:05 48 minutes, 5 seconds uh you see in terms of uh the global market our our aim is to have or to start at least some supply of skilled 48:13 48 minutes, 13 seconds assemblies in the international market in the current financial year but uh it'll be difficult to give any specific 48:22 48 minutes, 22 seconds number or any specific uh uh guideline on that but yes the idea is that uh the 48:29 48 minutes, 29 seconds future uh uh expansion plan for us is that you know apart from the the business in in India with regards to 48:37 48 minutes, 37 seconds Skid SMDs there is also a very big business internationally for the SKID SMDs. So definitely we will uh be you 48:46 48 minutes, 46 seconds know working on it now whether it is with the uh our existing uh uh you know 48:53 48 minutes, 53 seconds exclusive partner or whether it's with uh you know different you know other companies internationally. I think 49:00 49 minutes that's a decision that we would you know take as and when uh you know we see uh some inquiries coming in. 49:08 49 minutes, 8 seconds Sure. Uh thank you for answering the question. Thank you. 49:16 49 minutes, 16 seconds Our next question comes from the line of Ashok Sha from a club invesco family office. Please go ahead. 49:22 49 minutes, 22 seconds Thanks for taking my question. Sir, we are manufacturing ski assembly and also battle below and also pipe. So can you 49:31 49 minutes, 31 seconds just give some rough idea how much is we are competitive compared to if it is manufactured outside India or it's in USA or something like that. 49:43 49 minutes, 43 seconds Well uh in terms of uh skid assemblies right now we are manufacturing and and supplying only in India. So our 49:50 49 minutes, 50 seconds competitiveness internationally I'll not be able to comment because we've not started to supply internationally. Uh but obviously in India right now we are 49:58 49 minutes, 58 seconds among the only players who who are uh manufacturing and supplying skate assembly. So uh I think right now the 50:08 50 minutes, 8 seconds it's more about supply than about uh pricing. Uh with regards to uh the the 50:15 50 minutes, 15 seconds bellows and the host assemblies. So uh uh so yes uh we are the largest manufacturer in in India for host 50:23 50 minutes, 23 seconds assemblies. Right. So from the economies of scale perspective we are extremely competitive in terms of our pricing especially if you consider the the 50:31 50 minutes, 31 seconds international market where uh you know in terms of our business almost uh so 50:39 50 minutes, 39 seconds 60% of our overall business is exports but if you see uh the from the host assemblies perspective almost 75 to 80% 50:48 50 minutes, 48 seconds of the business of host assemblies actually comes from exports which means that our products first First of all are 50:55 50 minutes, 55 seconds are uh you know meet the quality which is requirement of the international market and secondly it comes at a much 51:02 51 minutes, 2 seconds uh uh you know uh better price as compared to what they you know would be buying locally. So you know 51:09 51 minutes, 9 seconds so percentage compared to so percentage it could be a 30 40% we are cheaper 51:17 51 minutes, 17 seconds u yeah uh I would say on a ballpark compared on a landed cost will be definitely uh 25 to 30% cheaper but that 51:27 51 minutes, 27 seconds would depend a lot on on product to product on market to market so it's it's it's slightly more in the US it's 51:34 51 minutes, 34 seconds slightly lesser in Europe it's uh It's even slightly lesser in the Middle East and Africa. So it depends. So internationally it's a big market. So 51:43 51 minutes, 43 seconds you know US works very differently as compared to Europe which works very differently as compared to Middle East and Africa. 51:51 51 minutes, 51 seconds Thanks for answering and my last question is regarding we have got three this group companies. So are there any 51:58 51 minutes, 58 seconds plan to merge it to get some economy of scale or something like that or can you explain what are the business we are doing there? 52:07 52 minutes, 7 seconds Oh well uh we have you know other group companies but I think since this call is specifically for LFS industries I limit my answer to RFS industries itself. So 52:16 52 minutes, 16 seconds uh if if you have any other questions on RFS industry, I'll be able to answer with regards to the group companies uh you know we can discuss it offline. 52:24 52 minutes, 24 seconds So but uh our management uh bits will be which will be involved in that managing other companies also that's why my question. 52:32 52 minutes, 32 seconds No so uh right now I'm managing uh aeroflex industries. 52:37 52 minutes, 37 seconds Okay. Okay sir. Thanks for answering and very best wishes for current year. Thank you sir. Thank you. Thank you very much. Thank you. 52:46 52 minutes, 46 seconds Next question comes from the line of Aka from AK investment. Please go ahead. 52:51 52 minutes, 51 seconds Hi sir, thanks for taking my question and first of all congratulations for the great set of number. Uh sir specifically for the other business excluding the 52:59 52 minutes, 59 seconds speed as SMB. What type of growth are we seeing in this year and uh if you can specify about the IITA margin 53:06 53 minutes, 6 seconds consolidated ITA margin for FI27 that would be uh very helpful. 53:12 53 minutes, 12 seconds Yeah. So in terms of the business right uh the the overall growth in the business uh uh I I think if you see in 53:21 53 minutes, 21 seconds this quarter we have grown by almost uh more than 35% right uh our aim is to 53:28 53 minutes, 28 seconds have a similar you know growth in in the next few quarters as well uh in terms of our ITA margins uh you know uh last year 53:37 53 minutes, 37 seconds we had an IBIT margin of 22 and a half% I think this year The fullear target is 53:44 53 minutes, 44 seconds to have an IITA margin of around 23% uh in terms of IITa. So and our aim is 53:51 53 minutes, 51 seconds that ultimately over the next couple of years uh the AIA margin should uh you know reach to about uh 25% uh annually. 54:03 54 minutes, 3 seconds Okay sir. And specifically for skilled assembly, what type of emitter margin currently are we enjoying in SK assembly for data center? 54:14 54 minutes, 14 seconds Uh will not be able to comment on specifica margins for uh specifically skid assemblies. Reason being that we working with just one customer right 54:22 54 minutes, 22 seconds now. So we'll not be able to share the on public forum. uh but I I can say that 54:30 54 minutes, 30 seconds the the overall margins for skit assemblies is in line with the the uh the average margins of the company. 54:39 54 minutes, 39 seconds Okay. So the average selling price of perk assembly uh what type of uh ASP uh can we expect in uh this year or the 54:48 54 minutes, 48 seconds going for for the next two to three years uh currently for this year we had around uh 3 uh uh something 3.4 lakh 54:56 54 minutes, 56 seconds receiving this year. Typically skid assemblies you know uh there's a wide range you know uh you know with regards 55:04 55 minutes, 4 seconds to perkade and like I mentioned the wide range is because of uh uh you know because the different data centers have 55:12 55 minutes, 12 seconds different specifications and different requirements. So I would say if to consider an average I think a three lakh 55:18 55 minutes, 18 seconds to 3.25 lakh would be an average that we can consider in terms of uh the average selling price for a skin assembly. 55:28 55 minutes, 28 seconds Okay sir, thank you so much and all the best for the Thank you. Thank you so much. 55:34 55 minutes, 34 seconds Thank you. 55:38 55 minutes, 38 seconds Our next question come from the line of Matrica from Sapphire Capital. Please go ahead. Yeah. Hello. Good morning. Am I audible? 55:46 55 minutes, 46 seconds Yeah. 55:47 55 minutes, 47 seconds Yeah. Um so congratulations on the set of numbers. A few questions from my side on the cooling skid. So you mentioned 55:55 55 minutes, 55 seconds that we'll reach close to 60% utilization on the 15,000 capacity by March. So that's close to a 700 unit 56:03 56 minutes, 3 seconds number just for the month of March. So how do you see the volumes of ski assembly kind of panning out for FI27 56:11 56 minutes, 11 seconds and maybe FI28 as well if you could guide? 56:15 56 minutes, 15 seconds um difficult to give a volume specific number like I mentioned right skit assembly is uh you know uh right now we 56:24 56 minutes, 24 seconds are at about uh so last financial year you know we sold about 617 right uh obviously the plan for this year is to 56:32 56 minutes, 32 seconds uh you know obviously we scaled it up to 6,000 and then for further scaling up to 15,000 by the next quarter uh the idea 56:42 56 minutes, 42 seconds is like I said to reach uh you by March 27 to reach about 60% utilization for 56:49 56 minutes, 49 seconds that particular month. Uh right that's the aim that we have right now. uh obviously you know I think one year is a 56:57 56 minutes, 57 seconds is a big time a lot of things can you know change for the good right so last year same time we did not uh we did not 57:05 57 minutes, 5 seconds even have scale assemblmeies as part of our business right we just we just ventured into it and you know this year 57:12 57 minutes, 12 seconds itself it's now contributed about uh 5% of our business and I think I expect that the [clears throat] contribution of 57:19 57 minutes, 19 seconds this business in in the current financial year would be close So uh you know I would say uh you know anywhere 57:27 57 minutes, 27 seconds between 20 to 20 I'm sorry I lost you know 57:34 57 minutes, 34 seconds I couldn't hear the last 20 to 22% contribution of the entire business would be through skate assembly 57:42 57 minutes, 42 seconds the liquid okay that's great uh also secondly on the metal bellow so you said we had a 8 cr revenue figure for fi26 57:51 57 minutes, 51 seconds um how do you expect that scaling up because I I think the margins and metal values are the best of all of your products currently. So 57:59 57 minutes, 59 seconds um how do you expect that business to kind of scale up in the next two years? 58:02 58 minutes, 2 seconds How much contribution you expect uh coming from metal bellers uh specifically? 58:08 58 minutes, 8 seconds Yeah. So uh yeah I think this year has at least the start of the year was a a bit of a challenge for the metal bellers 58:15 58 minutes, 15 seconds division you know specifically you know going to the fact that we were expecting business to big business to come in from 58:22 58 minutes, 22 seconds the US and the tariff did not uh uh you know uh uh the tariff actually played as sport specifically for the metal bellows 58:31 58 minutes, 31 seconds business because that was a you know new vertical for the company but if you see that over the past couple of quarters we started to see the traction 58:39 58 minutes, 39 seconds uh you know we are at an AR right now of about uh you know 12 cr right now at an at an R we looking to you know to grow 58:48 58 minutes, 48 seconds that significantly over the next two years so that we reach at least uh uh you know at least 50 to 60% of our 58:56 58 minutes, 56 seconds capacity utilization uh metal bellow definitely has the best margins as as compared uh you know in relation to all 59:04 59 minutes, 4 seconds our products but uh in relation to all our products but the uh the the sales 59:11 59 minutes, 11 seconds cycle in metal bellows is slightly longer as compared to our our other products. 59:16 59 minutes, 16 seconds Okay. And this 50 60% capacity capacity utilization will will you achieve in that in the 2-year time frame? That's what we are kind of 59:25 59 minutes, 25 seconds that's the target between two to three years. Yeah. 59:27 59 minutes, 27 seconds Okay. And the current utilization for metal bellows so 26 was at uh what level 59:34 59 minutes, 34 seconds that very low I'm not have the exact figures but yeah I think extremely low so at utilization what what sort of uh 59:43 59 minutes, 43 seconds revenues could you achieve on the metal bellow side? 59:48 59 minutes, 48 seconds uh I think at the peak utilization of the metal bellows I think we will reach about uh about 80 crores at the top 59:56 59 minutes, 56 seconds utilization the maximum utilization but close to 85% utilization yeah about approximately 1:00:06 1 hour, 6 seconds okay okay that's great um again you said that we we are targeting the 20% from the liquid cooling so uh your how do you 1:00:15 1 hour, 15 seconds see the proportion of the business vertical kind changing uh where do you see the assemblies and the metal bellers kind of having a um proportionate in the 1:00:24 1 hour, 24 seconds sales going forward because they I think they contributed close to I think 52 53% so yeah 1:00:33 1 hour, 33 seconds I think uh the host assemblies would would continue to contribute the major portion of the business of the company 1:00:40 1 hour, 40 seconds for the next few years for sure because that's the core business right now but uh you know we'll see over the next few years the percentage of contribution 1:00:50 1 hour, 50 seconds of state assemblies would you know would increase year on year and and obviously the reason is because that we are you 1:00:57 1 hour, 57 seconds know expanding our capacity in that particular segment and this is a segment where you know we see a huge opportunity 1:01:05 1 hour, 1 minute, 5 seconds uh you know being there [clears throat] right now and we want to uh take the full you know advantage of that. So uh 1:01:13 1 hour, 1 minute, 13 seconds the contribution of uh of skit assemblies would definitely continue to grow uh to our our our overall business. 1:01:20 1 hour, 1 minute, 20 seconds But I would say in the next uh at least for the next two to say two to three years I think assemblies would still be 1:01:28 1 hour, 1 minute, 28 seconds the major contributor to you know to the business. 1:01:32 1 hour, 1 minute, 32 seconds Okay that is great. And on the skit assembly you said you are looking for some global sales. So this will be through the exclusive client we have or 1:01:40 1 hour, 1 minute, 40 seconds are we looking to tie up with another company based in US that is also selling in US. How do you see that kind of panning out? 1:01:47 1 hour, 1 minute, 47 seconds Like I said yeah like I said we right now we have not uh we have not uh you know finalized anything. We are you know you know we are open to exploring all opportunities. 1:01:58 1 hour, 1 minute, 58 seconds So right now we don't have any fixed uh you know plan that we would go only on this route. So right now we are pretty flexible on that. 1:02:08 1 hour, 2 minutes, 8 seconds Okay. So this 15,000 capacity you are sure that sorry to interrupt you ma'am. You may please. Thank you. 1:02:15 1 hour, 2 minutes, 15 seconds Thank you. 1:02:19 1 hour, 2 minutes, 19 seconds Our next question come from the line of Jan from Asset Managers. Please go ahead. 1:02:27 1 hour, 2 minutes, 27 seconds Hi. 1:02:32 1 hour, 2 minutes, 32 seconds I'm sorry but the participant has left the queue. We'll move forward to the next participant. Our next question comes from the line of Muskan from NH. 1:02:42 1 hour, 2 minutes, 42 seconds Please go ahead. Hello. 1:02:49 1 hour, 2 minutes, 49 seconds Yes. Uh uh thank you for giving the opportunity. Uh so recently in US they have announced the section 232 tariff. 1:03:00 1 hour, 3 minutes So uh what is the impact of that on our business? 1:03:06 1 hour, 3 minutes, 6 seconds So the 232 tariff was you know prevalent before as well. Uh but right now on our 1:03:14 1 hour, 3 minutes, 14 seconds products the tariff has been reduced. Uh so uh with effect from February uh I 1:03:21 1 hour, 3 minutes, 21 seconds think about 15 of 15 on the middle of February approximately. So right now the tariff on our products is uh you know has been lowered. 1:03:32 1 hour, 3 minutes, 32 seconds So we don't have any issues with tariffs as I speak. 1:03:36 1 hour, 3 minutes, 36 seconds Yes. But what is the percentage of tariffs currently on our products? 1:03:41 1 hour, 3 minutes, 41 seconds Uh I think it's around uh 15% but I have to just double check. I think in the range between 10 to 15%. 1:03:54 1 hour, 3 minutes, 54 seconds Oh okay. Okay. Thank you. Sorry. 1:04:01 1 hour, 4 minutes, 1 second Thank you. 1:04:04 1 hour, 4 minutes, 4 seconds Our next question comes from the line of Prem Luna from Institute Investment Management. Please go ahead. 1:04:12 1 hour, 4 minutes, 12 seconds Hello sir, congratulations on the numbers. U most of the questions are answered. I just wanted to understand uh 1:04:19 1 hour, 4 minutes, 19 seconds can you just react at the complete uh company guidance for the year both X be X kids and on the B? 1:04:30 1 hour, 4 minutes, 30 seconds Well u the you know like I mentioned that with regards to the capacities that are you know coming up right now I think 1:04:38 1 hour, 4 minutes, 38 seconds we we expect uh uh in the last quarter we grew at about more than 35% and I 1:04:45 1 hour, 4 minutes, 45 seconds think on a yearly basis we expect uh uh to you know to achieve that kind of a growth uh uh primary being that we have 1:04:54 1 hour, 4 minutes, 54 seconds significant capacities which uh will be commissioned uh uh at the start of the 1:05:02 1 hour, 5 minutes, 2 seconds year and which will help us to to scale up the business. Obviously skilled assemblies would play a significant role in that growth naturally because we have 1:05:11 1 hour, 5 minutes, 11 seconds uh you know we you know we are expanding significantly on that. So uh but yeah you can say about 1:05:19 1 hour, 5 minutes, 19 seconds 35 uh odd% growth is something that we are looking at in the you know 1:05:28 1 hour, 5 minutes, 28 seconds 146 Sure. Then what would be the contribution for the base business? Base business growth would be around what range? 1:05:35 1 hour, 5 minutes, 35 seconds Uh base business growth would be somewhere in the range of about 15 to 20%. 1:05:40 1 hour, 5 minutes, 40 seconds Okay. Sure. And I just wanted to know um as we are expanding under new products and data centers would it only be products which will be developed in 1:05:48 1 hour, 5 minutes, 48 seconds house or maybe we are also looking at some acquisitions to acquire some capabilities. 1:05:54 1 hour, 5 minutes, 54 seconds Uh we are open to that. uh in India right now there are not many opportunities in our companies in this particular space because it's a very 1:06:02 1 hour, 6 minutes, 2 seconds very new space in India uh internationally there might be but uh you know we are open to that uh not 1:06:10 1 hour, 6 minutes, 10 seconds finalized or not uh you know not finalized anything as yet. 1:06:16 1 hour, 6 minutes, 16 seconds Sure. Sure. Thank you so much. Thank you. 1:06:22 1 hour, 6 minutes, 22 seconds Our next question come from the line of J. 1:06:26 1 hour, 6 minutes, 26 seconds Shawan from three asset managers. Please go ahead. 1:06:30 1 hour, 6 minutes, 30 seconds Hello. Uh good afternoon. Thank you for the opportunity. Um I just have one question. Uh sir, I just wanted to understand uh some m mature uh better 1:06:39 1 hour, 6 minutes, 39 seconds player seems to operate a materially high aida margins than 28 30% that you know we are targeting. uh I just wanted to understand is the gap mainly due to 1:06:48 1 hour, 6 minutes, 48 seconds product mix customer qualification maturity utilization I don't like I just wanted to understand over the medium-term you know if aeroflex moves 1:06:56 1 hour, 6 minutes, 56 seconds into more mission critical export OEM bellows and assemblies can the margin profile move above the current 20 30% 1:07:04 1 hour, 7 minutes, 4 seconds that you have guided so uh you know the margin in metal bellows is like you mentioned is significantly 1:07:12 1 hour, 7 minutes, 12 seconds higher as compared to the host assemblies uh in terms of you know uh you know 1:07:19 1 hour, 7 minutes, 19 seconds competitors who who have a higher scale of business in in Bellowos I think uh the margins uh you know with them 1:07:28 1 hour, 7 minutes, 28 seconds obviously depends first of all on the customer segment that they have second of all in which industry that they are 1:07:35 1 hour, 7 minutes, 35 seconds supplying it and obviously you know uh as you know like in any business the the 1:07:42 1 hour, 7 minutes, 42 seconds higher the scale of the business the higher the margins right that's naturally which you know which comes with most businesses so these things are 1:07:49 1 hour, 7 minutes, 49 seconds critical factors obviously as we move uh our products into higher uh you know higher end uh you know for example uh 1:07:59 1 hour, 7 minutes, 59 seconds you know uh for example applications such as AI infrastructure data center uh 1:08:06 1 hour, 8 minutes, 6 seconds uh you know plus also some kind of ancillary to aerospace industries definitely margins over there are are 1:08:13 1 hour, 8 minutes, 13 seconds much higher than than other uh you know conventional industries. 1:08:19 1 hour, 8 minutes, 19 seconds Makes sense. So basically the industry that we are targeting at the moment the we would you know make approximately the margins that you mentioned 28 to 30% but 1:08:27 1 hour, 8 minutes, 27 seconds obviously if we move to better industries and learning curve according to scale margins can get better right yeah they can get better but obviously 1:08:36 1 hour, 8 minutes, 36 seconds it it's obvious you know it depends on the industry that we are entering into. 1:08:42 1 hour, 8 minutes, 42 seconds Got it. Makes sense. Thank you. That's it from my Thank you. 1:08:47 1 hour, 8 minutes, 47 seconds Thank you ladies and gentlemen. Due to the time constant that was the last question for today. I now hand the conference over to the management for 1:08:55 1 hour, 8 minutes, 55 seconds the closing remarks. Thank you and over to you team. 1:08:59 1 hour, 8 minutes, 59 seconds Uh thank you so much. Uh thank you to uh everyone who joined the call and uh uh if I have not been able to answer 1:09:08 1 hour, 9 minutes, 8 seconds anyone's uh questions or if you have any further questions that you would like to ask you can get in touch uh you know 1:09:16 1 hour, 9 minutes, 16 seconds with SGA who is our investor relation partner and also you can get in touch with the management uh to get your queries answered. Uh thank you so much. 1:09:26 1 hour, 9 minutes, 26 seconds I would just like to you know also thank the entire team at Aeroflex Industries who have done a great job to achieve uh 1:09:33 1 hour, 9 minutes, 33 seconds you know uh the the targets that we had set out at the start of the year despite uh uh the the the initial hiccups that 1:09:42 1 hour, 9 minutes, 42 seconds we had and despite all the geopolitical issues that have happened in this entire year. So I would like to congratulate 1:09:50 1 hour, 9 minutes, 50 seconds and thank the entire uh team at Aeroflex for the same and just would like to tell everyone that yes we uh we are in in an 1:09:59 1 hour, 9 minutes, 59 seconds industry which is uh you know at a high growth we are expanding our capacity and expanding our capabilities you know 1:10:07 1 hour, 10 minutes, 7 seconds every year uh and we look forward to your support in the future as well. Thank you. 1:10:15 1 hour, 10 minutes, 15 seconds Thank you so much sir. 1:10:18 1 hour, 10 minutes, 18 seconds Okay, ladies and gentlemen, on behalf of Aeroflex Industries Limited, that conclude this conference. Thank you for joining us and you may now disconnect your lines.