The Anup Engineering Limited — Q4 FY26

Anup Engineering Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=rQNYpqhPD00 Published: 2 weeks ago

0:01 1 second Ladies and gentlemen, good day and welcome to the Q4 and year-ended FI26 earnings conference call of the Anup Engineering Limited. 0:12 12 seconds As a reminder, all participant lines will be in the listenon mode and there will be an opportunity for you to ask questions after the presentation 0:19 19 seconds concludes. Should you need assistance during this conference call, please signal an operator by pressing start and 0:26 26 seconds zero on your touchstone phone. Please note that this conference is being recorded. 0:33 33 seconds Before we proceed to the call, let me remind you that a discussion may contain certain forlooking statements that may 0:40 40 seconds involve known or unknown risk, uncertainties and other factors. It must be viewed in conjunction with the risk 0:48 48 seconds sorry with the business risk that could cause actual results performance or achievements to differ significantly from what has been expressed or implied in such forward-looking statements. 1:00 1 minute Please note that the company have uploaded the results press release investor presentation and also the outcome of the board meeting on the 1:08 1 minute, 8 seconds website of stock exchanges and website of the company. I now hand the conference over to Mr. 1:14 1 minute, 14 seconds Reginaldo Duza, managing director and CEO of the company. Thank you and over to you sir. 1:24 1 minute, 24 seconds Thank you. Hello everyone and greetings from team man and thank you all for your presence on this call. 1:33 1 minute, 33 seconds I will spend the next few minutes uh on providing you all a brief on the year gone by and our future plans. 1:41 1 minute, 41 seconds The financial year 2026 has been very difficult and eventful on various macroeconomics. 1:50 1 minute, 50 seconds Challenging in many ways but also opened up new opportunities and directions. 1:56 1 minute, 56 seconds I believe this year truly tested the resilience and fundamentals of all businesses. 2:04 2 minutes, 4 seconds The geopolitics wars at multiple fronts, trade direct positions by the major economy of the 2:11 2 minutes, 11 seconds world, impact on energy supply and thereby its prices, volatility in raw material pricing, especially steel. 2:21 2 minutes, 21 seconds Shipping challenges due to the closure of the main seaw route impacting logistics cost and many others only 2:28 2 minutes, 28 seconds meant we were all through under pressure for execution and managing costs. 2:35 2 minutes, 35 seconds Further, managing supply chains under such volatile conditions is always challenging for project industries like 2:43 2 minutes, 43 seconds us where we need to strike the right balance between cost and the timely availability of raw material for 2:51 2 minutes, 51 seconds completing and delivering the projects on time. 2:55 2 minutes, 55 seconds The last two months of the year did impact the execution with crucial raw materials planned unable to reach and 3:03 3 minutes, 3 seconds curtail industrial gas supply restricting the pace of manufacturing. 3:10 3 minutes, 10 seconds Also sizable accumulation of dispatched goods due to the nonavailability of shipping lines limited the flow on the 3:18 3 minutes, 18 seconds shop floor impacting progress of new work. As we continue to be watchful of the emerging scenarios globally, 3:26 3 minutes, 26 seconds especially the constraints on supply chain, the energy crisis and higher raw material cost, I believe your business 3:34 3 minutes, 34 seconds managed to deliver relatively fairly good financials. 3:39 3 minutes, 39 seconds For the financial year 2026, we achieved a consolidated revenue of 3:45 3 minutes, 45 seconds 822.3 crores with an AITA of 174.2 2 crores. 3:53 3 minutes, 53 seconds Despite [clears throat] heavy pressure of elevated input cost and execution challenges, we were able to maintain 4:00 4 minutes these financials only because of a sharp focus on cost and timely cost corrections along the execution cycle. 4:10 4 minutes, 10 seconds The export to domestic ratio continued at 50 to 50% level in line with our strategic intent. 4:19 4 minutes, 19 seconds All our three manufacturing locations contributed well. Ahmedabad plant at 540 4:26 4 minutes, 26 seconds crores, Kada with 239 crores and Mabel at 43 crores revenue. 4:35 4 minutes, 35 seconds Mabel of course would have been better if not for some site projects which prolonged than expected due to few 4:43 4 minutes, 43 seconds technical changes. Of course, this shortfall shall be managed good in the first quarter of this year. 4:52 4 minutes, 52 seconds The sectoral revenue across industries was as expected. Oil and gas at 39%. 5:00 5 minutes Prochemicals at 32%. Fertilizer 9%. 5:06 5 minutes, 6 seconds Hydrogen at 8% and others 12%. 5:11 5 minutes, 11 seconds In terms of products, heat exchangers was at 56% and vessels, reactors and columns at 35%. 5:21 5 minutes, 21 seconds Which signifies contributions for from our Kada plant. 5:26 5 minutes, 26 seconds The average working capital was at 2.3 tons. Of course, this could have been better. 5:33 5 minutes, 33 seconds We would like to maintain it about three turns. 5:37 5 minutes, 37 seconds This was mainly because of low customer advances due to lower order booking in the initial part of the year and higher 5:45 5 minutes, 45 seconds level of dattors of which 260 crores bill dattors where collections were due 5:52 5 minutes, 52 seconds after March uh which are now being received and that is reflecting clearly on our cash flows. 5:59 5 minutes, 59 seconds The cash position which was negative 73 crores as on March end including 6:06 6 minutes, 6 seconds long-term debt of 52 crores as on today is about -1 crores and expected to be 6:16 6 minutes, 16 seconds cash positive by end of this month including long-term debt as substantial collections are planned. So this clearly 6:25 6 minutes, 25 seconds shows a positive trend uh in terms of our cash flows. 6:31 6 minutes, 31 seconds On the order book as on date we have a pending order book of approximately 770 crores for this financial year FI27. 6:42 6 minutes, 42 seconds Auto booking did improve over the last two quarters. 6:46 6 minutes, 46 seconds Consider considering the current elevated input costs and the highly competitive environment seen in the 6:53 6 minutes, 53 seconds market. We as a company have taken a conscious decision to book new orders with caution and book selectively the 7:02 7 minutes, 2 seconds ones with risk protected and providing healthy margins. 7:08 7 minutes, 8 seconds If not for this decision, we would have reported even better order book numbers as we let go opportunities to protect our financials. 7:17 7 minutes, 17 seconds With good inquiry pipeline of about 1,200 crores, we see good business opportunities for this and the next 7:24 7 minutes, 24 seconds financial year. Having said we will be judicious in booking new orders considering the current high input costs 7:35 7 minutes, 35 seconds on the developments there have been some good developments over the period. 7:40 7 minutes, 40 seconds Our foray into critical equipment business we have successfully manufactured and delivered our first 7:47 7 minutes, 47 seconds solid inel 200 metric t single piece equipment to a reputed client in Middle East. This sets us into a different 7:56 7 minutes, 56 seconds league of manufacturing complex equipment. 8:00 8 minutes Second, our first order into nuclear business uh which we are executing on the shop floor at this point in time. 8:09 8 minutes, 9 seconds Our first order into thermal power business uh which we bagged for an EPC customer in India for an NTPC project. 8:19 8 minutes, 19 seconds Our first order for a clean energy storage technology for a European technology company uh for a project in India. 8:28 8 minutes, 28 seconds Our first order for manufacturing skids. 8:31 8 minutes, 31 seconds Uh this is a product which we've been strategizing uh over the last few months and uh happy to say that we were 8:39 8 minutes, 39 seconds successful in bagging our first order for kids. 8:44 8 minutes, 44 seconds We were also successful in now getting our first order for air heaters which has been long pending. 8:52 8 minutes, 52 seconds On the capacity expansion plan, we have completed our phase to expansion at KDA increasing the capacity to about 8,000 9:00 9 minutes metric tons per year from KA which shall generate a revenue of about 400 to 450 crores depending on the product mix. 9:11 9 minutes, 11 seconds Our design office at Vodara has stabilized well and providing meaningful support to the execution team. It has 9:20 9 minutes, 20 seconds also started taking small profit center work which has worked well for us. 9:26 9 minutes, 26 seconds With these installed capacities at our three manufacturing locations that is Ahmedabad, Kada and Maple Engineers, we 9:34 9 minutes, 34 seconds have a capacity capable of delivering revenue up to 1200 crores per year. 9:40 9 minutes, 40 seconds On our technical services business, we have made a good beginning with now over 10 orders executed in financial year 2026. 9:51 9 minutes, 51 seconds With the initial base set and a dedicated organization structure created, we wish to take this to a sizable business vertical. 10:01 10 minutes, 1 second On the market outlook, we believe the industry segments in oil and gas, prochemical fertilizer, chemicals, power 10:11 10 minutes, 11 seconds and clean energy options will continue to maintain strong traction once current uncertainty settles. 10:19 10 minutes, 19 seconds The dependency on energy imports is already hurting many countries due to the current war and the freight closures 10:27 10 minutes, 27 seconds impacting the economies at large. We expect countries moving toward self-sufficiency with renewed vigor. 10:36 10 minutes, 36 seconds Further, petrochemicals is seeing good growth with projects spread globally. 10:42 10 minutes, 42 seconds This growth is largely driven by surging demand by core industry sectors and shifting energy markets especially in 10:50 10 minutes, 50 seconds ethylene propylene and speciality chemicals for growing packaging and consumer products. 10:58 10 minutes, 58 seconds Fertilizer is also gaining traction in regions like India, China and Africa. 11:06 11 minutes, 6 seconds Nuclear is another cleaner energy source that would provide opportunities both conventional and the small modular reactors. 11:16 11 minutes, 16 seconds We are also noticing good number of projects in the energy storage business using patented technologies and we are 11:23 11 minutes, 23 seconds happy to be doing work with these companies already. 11:28 11 minutes, 28 seconds LG projects are also in demand especially in Middle East. Thermal power projects which were written off are 11:36 11 minutes, 36 seconds backed strongly with over 14 gawatt in India for NTPC and other private Kangala generates. 11:44 11 minutes, 44 seconds A few examples of large scale projects are a large refinery and over six strains of fertilizer projects in 11:52 11 minutes, 52 seconds Africa, multiple gas projects in Middle East mainly driven by ADNO Abu Dhabi National Oil Company and in Qatar. 12:02 12 minutes, 2 seconds Refinery expansions and LG projects in India. Large PTA, PVC and VCM projects in India. 12:11 12 minutes, 11 seconds Nuclear power project Kaiga 5 and Kaiga 6 part of the NPCR fleet program to add 12:18 12 minutes, 18 seconds 7 gawatt of power to the national grid is also underway and we are happy to be part of this project. 12:27 12 minutes, 27 seconds We believe that once the war and uncertainty settle the disruptions and destructions will eventually lead to 12:36 12 minutes, 36 seconds three things. One, the energy security measures by all countries leading to new investments and expansions in the energy sectors within the countries. 12:48 12 minutes, 48 seconds Second, the repair works for all damaged refineries, gas plants, tanks and pipelines will generate a lot of business for c for fabricators like us. 13:00 13 minutes And third accelerated push to non-conventional energy sources uh which are cleaner namely nuclear renewables green hydrogen etc. 13:13 13 minutes, 13 seconds With now our capacities in place and capabilities spread over shop fabricated site fabricated and technical services. 13:21 13 minutes, 21 seconds We as a company are at the right phase to capitalize on this demand as it materializes 13:30 13 minutes, 30 seconds at a broader strategic level. We wish to capitalize on the current investments made and move to higher valued products 13:38 13 minutes, 38 seconds including design critical and complex manufacturing and site services. 13:46 13 minutes, 46 seconds So considering the current uncertainty uncertain global business scenarios due to wars, geopolitics and thereby 13:54 13 minutes, 54 seconds elevated input costs this year that is financial year 2027 will be a year where we focus on 14:03 14 minutes, 3 seconds stabilizing strengthening our fundamentals consolidation and risk protection. 14:10 14 minutes, 10 seconds focus shall clearly be on profits under the current cost pressures and maintain a healthy cash flow. 14:20 14 minutes, 20 seconds We shall also take this opportunity as an opportunity to be prepared and ready for improved business expected in the 14:26 14 minutes, 26 seconds near future. I'm sure more clarity shall emerge on how the current war and seaw route closures settle in the first half of the year. 14:37 14 minutes, 37 seconds Also please note that this kan are fully operational as a company we [snorts] are focused on taking orders which are 14:46 14 minutes, 46 seconds large-sized complex projects and thereby long cycle average of about 12 months. 14:53 14 minutes, 53 seconds Hence it is natural that you shall see fluctuations in quarteronquarter numbers but broadly shall normalize over the year. 15:05 15 minutes, 5 seconds Let me end by saying that we as a board and management have deeply thought on every aspect of the business and the 15:14 15 minutes, 14 seconds macro headwinds or tailwinds and have decided the above approach to be the right in the long-term interest of the 15:21 15 minutes, 21 seconds business. Surely we will course correct if needed as clarity emerges on all the macro aspects. 15:30 15 minutes, 30 seconds With these opening remarks, I wish to thank you all for your patient listening. Now I would be happy to 15:37 15 minutes, 37 seconds answer your questions or any clarifications required. Thank you. 15:43 15 minutes, 43 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchstone 15:52 15 minutes, 52 seconds telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a 16:01 16 minutes, 1 second question. Ladies and gentlemen, we will wait for a moment while the question Q assembles. 16:09 16 minutes, 9 seconds Participants, you may press star and one to ask the question. 16:20 16 minutes, 20 seconds Ladies and gentlemen, you may press star and one to ask a question. 16:32 16 minutes, 32 seconds First question is from the line of Sakit Kapoor from Kapoor and Industries. Please go ahead. 16:39 16 minutes, 39 seconds Yeah, namaskar sir. Hope I'm audible. Yeah, namaskar. Please go ahead. 16:45 16 minutes, 45 seconds Yes sir. Sir, firstly uh within uh in the framework of your opening remark and also in the closing remark, you did 16:52 16 minutes, 52 seconds alluded to the fact that we are cautious and taking uh all necessary steps uh that are aligned in the interest for uh 17:00 17 minutes for the investors at large. So taking that into account sir how is this how can what should investors expect in 17:07 17 minutes, 7 seconds terms of uh the revenue profile and uh and the margins also since the margins have taken a dip uh for quarter 4. So 17:16 17 minutes, 16 seconds firstly if you could just explain us the reasons what led to the decline in margin uh for Q4 and uh what should we 17:24 17 minutes, 24 seconds expect uh FY uh 2627 in terms of the revenue on an order book of uh 769 cr. 17:35 17 minutes, 35 seconds Yeah. So uh so thanks for the question. 17:38 17 minutes, 38 seconds So so on the pending order book of roughly about 769 crores that the pending order book has on date. uh of 17:45 17 minutes, 45 seconds course uh uh the inquiry pipeline is strong. We would be booking a few more orders uh in in a couple of months more which can add up to this financial year. 17:56 17 minutes, 56 seconds uh but having said that uh as I mentioned in my opening uh remarks uh currently the situation in the market 18:04 18 minutes, 4 seconds the input cost especially the raw material cost is is at a quite elevated level and since our contracts are fixed 18:13 18 minutes, 13 seconds price contracts we would wait for the prices to normalize uh for the situation 18:20 18 minutes, 20 seconds to normalize maybe over couple of months more uh to be able to get to a clear understanding of what's the top plan that we can look at and and the margin. 18:31 18 minutes, 31 seconds So, so I think it would be apt and prompt for us to to give couple of months uh to for the clarity to emerge 18:39 18 minutes, 39 seconds uh because because the whole situation today being so volatile uh it's important that we protect our margins uh 18:48 18 minutes, 48 seconds and take uh as I mentioned uh judicious calls in terms of the new order booking. 18:54 18 minutes, 54 seconds So, so I would put it that uh that uh uh let's wait for the condition to settle 19:00 19 minutes uh before we come back uh with a with a clear profile in terms of revenue and margins. 19:09 19 minutes, 9 seconds Okay. And sir uh for Q4 performance uh our AITA margins were lower Q1 Q1 much 19:17 19 minutes, 17 seconds lower than the the blended average for FI26. So is it only on the RM part that has played the role because of execution 19:26 19 minutes, 26 seconds of fixed price contract that we have done? 19:30 19 minutes, 30 seconds So it it's both uh one is of course the volume you would have seen the revenues have dripped as compared uh so that's 19:37 19 minutes, 37 seconds one on the volume side and second of course the the the uh it has the raw material cost has not impacted much uh 19:45 19 minutes, 45 seconds because these are all estimated projects but it is by nature of the products which were estimated to be in quarter 4 19:54 19 minutes, 54 seconds uh so it was planned to be an AITA in that sense and that's the reason if you see over the year uh we've almost 20:00 20 minutes managed 21.2 AITA normalized over the year. So it was mainly the kind of projects which were executed in photo 20:09 20 minutes, 9 seconds and a little bit of challenges on on on on the on the cost side. 20:15 20 minutes, 15 seconds Okay. Ju just in continuation to the same sir when we look at our standalone numbers standalone numbers uh if we do a 20:23 20 minutes, 23 seconds comparative uh study for last March it was a 205 cr topline we have done 195 cr 20:31 20 minutes, 31 seconds for the current quarter whereas the profitability has gone down from 40 crores to 27 cr. So uh just on just to 20:40 20 minutes, 40 seconds understand the standard is it the order mix uh uh only that has resulted in it or what what has what has led to this 20:47 20 minutes, 47 seconds dip on a standalone uh basis sir further understanding? Yes sir. So it's purely on the automix. 20:55 20 minutes, 55 seconds Uh as I said that's how uh the the execution was planned. So it's purely on the product mix. 21:03 21 minutes, 3 seconds Okay. 21:05 21 minutes, 5 seconds Correct. Correct sir. Now sir coming on I think so our technical service business vertical uh in the last call 21:12 21 minutes, 12 seconds also sir you did mentioned about setting up of our office I think so uh in in in in other geography and then looking at 21:19 21 minutes, 19 seconds the potential going ahead. So what what is our uh strategy or a thought process 21:25 21 minutes, 25 seconds on on this segment and if some more color you would like to share on the same on the technical services arm. 21:34 21 minutes, 34 seconds Yeah. So, so this is one business vertical which we are focusing on very very strongly uh on two counts mainly as 21:43 21 minutes, 43 seconds I said this is a very very profitable business we can expect to the tune of 40% margins as I mentioned in my last 21:50 21 minutes, 50 seconds call uh we made a very good beginning uh we've executed close to about 10 poss now uh of course um not not a big amount 21:59 21 minutes, 59 seconds close to about 4 and a half crores kind of a value uh but that was a dips dip IC for us to to gauge our capabilities in 22:07 22 minutes, 7 seconds terms of executing these uh uh technical services. We've got very good responses from the customers. We have uh uh 22:16 22 minutes, 16 seconds appreciation letters received from customers. Now this sets the base for us to grow this vertical which is which is 22:23 22 minutes, 23 seconds probably uh the most profitable one. And as I mentioned uh the strategy is to grow this the vertical to about 200 22:31 22 minutes, 31 seconds crores in the next 3 years horizon. uh also it adds to the strategy. U as I I 22:38 22 minutes, 38 seconds mentioned in my closing remarks with all these repair works now uh expected to be in the parts of Middle East and others 22:46 22 minutes, 46 seconds where damages have occurred. Uh this vertical could be a probable growth engine for us in terms of growing this 22:55 22 minutes, 55 seconds vertical in Middle East and now with our presence in Middle East we have a sales and marketing head positioned in Dubai. 23:03 23 minutes, 3 seconds uh so it augers well for us uh strategically to move this business vertical forward. Of course we would in the initial years focus more on the 23:11 23 minutes, 11 seconds domestic because there's a lot of site execution involved on this uh and as and when we get opportunities we move to 23:18 23 minutes, 18 seconds Middle East and and then probably to the other parts of the world but yes uh this is a vertical which is which is of great 23:25 23 minutes, 25 seconds focus for us especially on the profitability front. Okay, just a small understanding s you mentioned that we 23:32 23 minutes, 32 seconds our uh contracts are all uh fixed fixed price. So taking into account the key RM requirement I think so those are also 23:40 23 minutes, 40 seconds some specialized material. if you could just give us some more understanding how have the cost inflation uh worked out 23:47 23 minutes, 47 seconds currently for the for the for the contracts that we have taken and the current RM prices just to get an 23:54 23 minutes, 54 seconds understanding at today's rates at at what margins we would be consuming these transaction we are deferring them for 24:01 24 minutes, 1 second the time being but uh if you could just give us some sense how have the RM prices uh the inflation seen in the RM I 24:09 24 minutes, 9 seconds said yeah so so as we mentioned rightly uh our contracts are all fixed price 24:17 24 minutes, 17 seconds contracts uh they are all estimated so we clearly estimate the raw material cost and every raw material cost is 24:25 24 minutes, 25 seconds customized to a project so it can't be used for any other project. So there's a clear uh uh definition in terms of what's the raw 24:33 24 minutes, 33 seconds material cost. Uh of course for the orders which we have of the 700 uh 69 crores orders that we have part we 24:42 24 minutes, 42 seconds had already ordered the the material it is in the shop under fabrication uh there's no challenge there but off late 24:50 24 minutes, 50 seconds the orders that we've taken um uh definitely because of the elevated uh uh raw material pricing uh since we have a 24:58 24 minutes, 58 seconds cushion in terms of the deliveries uh we are we are timing so I would use the strategy uh uh of timing the raw 25:06 25 minutes, 6 seconds material uh to get the best profitability on project over project. 25:12 25 minutes, 12 seconds So so it's more about timing. Of course uh there's a limit to which we can wait. 25:17 25 minutes, 17 seconds Uh that's the reason I said let's wait for a couple of months uh for the clarity to emerge. But largely for the orders that we have taken we are under 25:25 25 minutes, 25 seconds control. It's only that the fresh orders that we are going to take, we are going to be very cautious uh that that we 25:32 25 minutes, 32 seconds protect our margins uh for the new orders that we book. Uh this of course there is there is a little bit of 25:41 25 minutes, 41 seconds shipping challenges currently uh because of the closure of state of Armos uh both 25:48 25 minutes, 48 seconds in terms of the incoming raw material and uh the outgoing uh uh deliveries though shipping is not in our scope for 25:56 25 minutes, 56 seconds outgoing but we have a obligation up to FOB India port uh because ships are not available uh we need to take the goods 26:05 26 minutes, 5 seconds and store it at the port uh so that involves an additional cost of mob and demob of axles and other huge material 26:14 26 minutes, 14 seconds movement equipments which uh which which incurs a little bit of cost. So so we are being cautious on on the cost run 26:22 26 minutes, 22 seconds both on material and also our operating cost uh and trying to course correct to maximize uh profits. 26:31 26 minutes, 31 seconds Right sir also only to just add and then join the queue. Uh that means that on the closing order book of 769 26:41 26 minutes, 41 seconds cr uh what portion of the order book are uh have our RM being aligned in in percentage terms and we are working on 26:49 26 minutes, 49 seconds execution of the thing with pipeline is I think 112 or 10 some number you have mentioned that is different but what 26:58 26 minutes, 58 seconds sense can we make on the closing order book and the RM alignment uh pertaining to that that will offer execution that will be offered for execution in the incoming quarters. 27:08 27 minutes, 8 seconds Yeah. So if you look at uh generally our material auding for ordering positions is about 6 to 8 weeks from the PO value 27:16 27 minutes, 16 seconds and uh if you look at uh from that sense uh the order booking over the last 2 months is something where we are holding on uh roughly close to about 200 crores. 27:26 27 minutes, 26 seconds Rest all the materials we have already ordered uh it's in either in transit or it's in the shop and under fabrication. 27:34 27 minutes, 34 seconds So close to about 200 crores out of this is where we are holding on uh buying the materials uh waiting for the right time 27:42 27 minutes, 42 seconds uh for the raw material cost to cool down. 27:46 27 minutes, 46 seconds Thank you very much S. I'll request to come back for a follow-up question. 27:51 27 minutes, 51 seconds Next question is from the line of Asha from HTC Asset Management. Please go ahead. Yeah. Hi, good evening sir. 28:00 28 minutes Yeah. Hi, good evening. 28:01 28 minutes, 1 second Hi. So basically uh typically we do give a guidance. I understand the situation is very volat 28:15 28 minutes, 15 seconds sorry to interrupt you. We lost your audience between can I request you to please uh repeat your question once again from the beginning. 28:22 28 minutes, 22 seconds Yeah. So so basically you am I audible now? Yes. Yes please go ahead. 28:28 28 minutes, 28 seconds Yes. So basically typically we do give a guidance in terms of revenue and uh margins. So I understand the situation 28:35 28 minutes, 35 seconds is volatile today but uh given the order book that we have and as you mentioned that you have some more orders coming in 28:42 28 minutes, 42 seconds is there a base revenue guidance that uh or a range that we want to give out for 28:48 28 minutes, 48 seconds FI27 and also in terms of the margin. So should we still build a 21% of a beta margin for F27? 28:58 28 minutes, 58 seconds So I would love to make that uh make that declaration here but I think considering our order book position at 29:06 29 minutes, 6 seconds this point which is roughly about 770 crores and an inquiry pipeline of close to about 1,200 crores uh we are very uh 29:14 29 minutes, 14 seconds confident of of booking the orders for for to be able to execute in this year but what I believe is I think uh uh it 29:22 29 minutes, 22 seconds all depends on because even if I book orders uh if I'm not able to purchase the raw material because of the current 29:30 29 minutes, 30 seconds volatile pricing. Execution could come under challenge. So, it's better that we wait for a couple of months and we all know things should settle down by then. 29:39 29 minutes, 39 seconds Uh we will be in a better position to give you a more realistic guidance in terms of topline and bottom line both. 29:46 29 minutes, 46 seconds But having said that uh as I mentioned in my uh remarks uh the whole focus would be uh on the long-term interest of 29:53 29 minutes, 53 seconds the business u to balance out growth and profitability more of course the f focus being given the current circumstances on profits more. 30:04 30 minutes, 4 seconds Understood sir and that given that uh the inflation is uh you know global today and isn't the customer considering 30:13 30 minutes, 13 seconds to some extent a price variation clause I understand historically it has been fixed but uh the times are also 30:20 30 minutes, 20 seconds different or there is no rush from the customer end also to ensure uh for the equipment as of now. So what are the dialogues we are having with the 30:28 30 minutes, 28 seconds customer in terms of uh the uh price variability today? 30:35 30 minutes, 35 seconds No price variability clause in our contract. Historically, it has never been uh and as you know we have two modes. One is the tender business of 30:43 30 minutes, 43 seconds course where there is absolutely no price variability and second is negotiable bits which are through private EPCs and and end users. uh uh so 30:52 30 minutes, 52 seconds we've been trying but uh but since the project budgets are fixed uh customers are also I think bound by fixed price 31:00 31 minutes contracts uh because otherwise their budgets will go completely for a toss if they keep varying uh for from our 31:07 31 minutes, 7 seconds perspective since we do an estimation model uh we can make that decision at the time of uh accepting a particular 31:15 31 minutes, 15 seconds price and and that's what uh we've been doing uh just to give you give an example uh we we let go of the border um 31:25 31 minutes, 25 seconds just two weeks back just because we couldn't uh uh we felt that it would not give us margin whereas the customer 31:33 31 minutes, 33 seconds offered and it was close to about 200 core kind of a business. Uh so that's a judicious call that we as a business have taken uh to protect our margins in the long-term interest. 31:45 31 minutes, 45 seconds Understood. And sir when you also talk about the 1200 crores of order pipeline so that is under active bidding or how 31:53 31 minutes, 53 seconds should we understand that or that is the visibility of the orders that we think that can come over a period of one year. 32:01 32 minutes, 1 second No these are only active uh form inquiries from customers and which normally get materialized within two to 32:09 32 minutes, 9 seconds three months. So, so we are in May, June, July, August, this maximum these 1200 should get finalized. Uh either way, either we win it or we lose it. 32:21 32 minutes, 21 seconds Okay. And there was just one last question. Uh we had spoken about a new product called uh air cooled heat exchangers. So, uh is there any 32:30 32 minutes, 30 seconds breakthrough in that any development because I think this was more of a domestic product. So, um any update is there? 32:39 32 minutes, 39 seconds Yeah, I think we have uh mentioned in our release uh incidentally uh uh it's a good news just this week that we backed 32:48 32 minutes, 48 seconds our first order for air heaters and also uh one large order for aircooled heat exchangers uh for an export project. So 32:57 32 minutes, 57 seconds it's it's a breakthrough come at the right time uh which is going to fuel our volume business. As I said uh we have 33:05 33 minutes, 5 seconds three modes of business verticles. One is our legacy old business uh which is going to be the historical margin business. Uh second vertical is the high 33:13 33 minutes, 13 seconds volume business where air core heaters uh play a big role and the third segment is the service and technical business. 33:20 33 minutes, 20 seconds So, so, so, so answer to your question is uh is that we have already backed an order should come into an execution on 33:29 33 minutes, 29 seconds the shop floor maybe maximum 2 months time once we finish the engineering and uh and it also builds a strategic 33:36 33 minutes, 36 seconds capability as I mentioned in my earlier calls. Uh it also builds our capability 33:42 33 minutes, 42 seconds for serving the data center needs for uh for cooling systems. Um, of course 33:50 33 minutes, 50 seconds that's a critical technology, but this will be the first stepping stone for developing that capability for us. So, 33:56 33 minutes, 56 seconds it was a strategic road map for us and now it's a reality. So, sir, okay sir. Thanks. Good to know. 34:05 34 minutes, 5 seconds Thanks a lot. Thanks. Thank you. 34:12 34 minutes, 12 seconds Participants, you may press star and one to ask the question. Next question is from the line of Jandhi from Amit Capital. Please go ahead. 34:21 34 minutes, 21 seconds Uh hi, thank you for the opportunity. I hope I'm audible. Yeah, please go ahead. 34:27 34 minutes, 27 seconds Yeah. So my first question is that uh the order book has grown from uh 550 crores to 769 crores sequentially uh 34:36 34 minutes, 36 seconds which implies a robust order intake growth. So could you give us the number that that we that the order we booked 34:44 34 minutes, 44 seconds for this quarter and could you shed some light on what is driving those order growth? 34:50 34 minutes, 50 seconds Yeah. So we booked close to about 200 to be specific about 190 crores uh in the 34:56 34 minutes, 56 seconds last two months and it's a mix of both uh domestic and imports. Domestic it's 35:03 35 minutes, 3 seconds more to do with petrochemicals and power projects. uh as I mentioned in my remarks uh the thermal power projects uh 35:12 35 minutes, 12 seconds which came from nowhere and uh we feel in the next four to five years is going to be a business opportunity for thermal so it came from thermal and 35:21 35 minutes, 21 seconds petrochemical side uh domestic uh of course to name Reliance and LNT that's where we back the orders from and uh in 35:30 35 minutes, 30 seconds Middle East we back the orders uh uh for Edna projects those were basically the gas projects 35:38 35 minutes, 38 seconds Understood. And uh out of the current 1200 cr uh inquiry pipeline, what would be the expected hit rate for us going ahead? 35:48 35 minutes, 48 seconds So uh 1 1200 crores uh to to to be precise 1200 crores is the inquiry pipeline that we have which we expect uh 35:57 35 minutes, 57 seconds uh normally it takes to materialize 2 to 3 months of time and we expect uh the conversion rate of about 20%. That's 36:04 36 minutes, 4 seconds what we normally like to keep uh the conversion rate of around 20%. Uh for better profitability. 36:12 36 minutes, 12 seconds Understood. And uh my last question uh I wanted to understand if we have any uh plans to diversify our product lines 36:19 36 minutes, 19 seconds which can give us some more uh balancing uh towards the simplicity of the core markets. 36:29 36 minutes, 29 seconds Yeah. So, so our uh there were two things that we really wanted to get into uh apart from our legacy old products. 36:36 36 minutes, 36 seconds Uh one is of course the volume business uh where uh the margin profiles would be around 15% a bit margins but uh the 36:45 36 minutes, 45 seconds volume it will be short cycle jobs like the air cold heat exchanges that we want to diversify and and and good news that 36:54 36 minutes, 54 seconds we've already backed the order and we executing. Second is on the nuclear side uh which we wanted to diversify that also we've already backed an order and 37:02 37 minutes, 2 seconds it is under execution uh and the third is of course on the on the technical services front and the engineering services uh which we've made some good 37:11 37 minutes, 11 seconds inroads. So these are the three um extensions that of our business verticles that we would like to focus 37:18 37 minutes, 18 seconds on. Uh apart from this uh there's a there's a large focus on uh on getting 37:25 37 minutes, 25 seconds more deeper into complex metallergies uh because we have not exhausted the 100% product portfolios in oil and gas and 37:32 37 minutes, 32 seconds petrochemicals. Uh there is a large portfolio of niche highly complex equipments. So we have strategized to 37:40 37 minutes, 40 seconds get into those products and the work is already underway. Uh we've got some audits from customers already done through. All going well. Uh we should be 37:49 37 minutes, 49 seconds adding two more products uh of critical and complex nature to our product portfolio in this financial year. 37:57 37 minutes, 57 seconds Understood. Uh thank you so much. I'll get back in the queue and all the best. Thank you. 38:03 38 minutes, 3 seconds Thank you very much. Next question is from the line of Vishal Sha from Pravin Ratal. Please go ahead. 38:12 38 minutes, 12 seconds Am I audible sir? Yes please go ahead. 38:16 38 minutes, 16 seconds Yeah so sir can you please elaborate more on the company's first feed package order in the Middle East in terms of order size execution timeline and the 38:25 38 minutes, 25 seconds expected completion and how large we can expect this segment to grow over the next three to five years in terms of revenue and margin ski packaging order. 38:35 38 minutes, 35 seconds So uh you meant ski package right? Yes. 38:40 38 minutes, 40 seconds Yeah. So uh so this was something which uh which as a business we've been strategizing over over the last couple of years to get into skids and modules. 38:50 38 minutes, 50 seconds Uh of course modules being the next stage for us which are which are which are large uh in dimensions. Uh skids is 38:57 38 minutes, 57 seconds something which we've got an order for Middle East close to about 30 crores single order. uh these will be a paired 39:06 39 minutes, 6 seconds of uh uh pair of equipments uh along with structures and instruments. uh this is what something which we wanted to 39:14 39 minutes, 14 seconds build our capabilities in and that's the reason we put up an office in Boda where all the design work is happening. So the the execution timelines are roughly 39:22 39 minutes, 22 seconds about 12 months. Uh we are already 3 months into the cycle. Uh so within this financial year we will be delivering 39:30 39 minutes, 30 seconds this uh skid package uh to to to Adno project 39:36 39 minutes, 36 seconds and in terms of uh in terms of size uh of these opportunities in the future uh of course as you as you know in our in 39:44 39 minutes, 44 seconds our industry we need to have one uh past track uh record uh to be able to get so this would be a PTR for us to get get 39:53 39 minutes, 53 seconds inroads to many more customers uh and the requirement ment for skids and modules as you would be aware is growing 40:00 40 minutes uh because of landlock areas and and customers do not want to do any work at site. So they prefer skids uh and 40:08 40 minutes, 8 seconds modules to come as one package and directly installed at site. So so we expect that uh in a year we should be 40:16 40 minutes, 16 seconds able to get at least four to five such packages uh going forward once we complete and generate this PTR in the market. 40:27 40 minutes, 27 seconds Okay, thank you so much sir. 40:32 40 minutes, 32 seconds Thank you. Participants you may press star and one to ask the question. 40:37 40 minutes, 37 seconds Next question is from the line of Sakit Kapoor from Kapoor and company. Please go ahead. 40:44 40 minutes, 44 seconds Yes sir. Thank you for the opportunity again sir. Uh just to put uh the thought process clear here. It is about the 200 40:52 40 minutes, 52 seconds cr order booking that we have done recently wherein we are not uh working with the execution cycle as of now 41:00 41 minutes because of higher RM prices. Is that understanding correct sir? 41:06 41 minutes, 6 seconds Yeah. So let me just explain. So once we get the purchase order we we take about 6 to 8 weeks for engineering post which we go ahead with procurement activities. 41:16 41 minutes, 16 seconds So from that perspective we see last 2 to 3 months kind of an auto booking maybe in the range of 200 to 250 crores 41:24 41 minutes, 24 seconds where we are yet to go ahead with material procurement. Uh not that we will not go ahead with any of the material. There could be some short 41:32 41 minutes, 32 seconds cycle uh projects where we have no choice but to go ahead because delivery cycles are critical for us. uh but 41:39 41 minutes, 39 seconds largely yes we will wait uh because we have the luxury of time uh in terms of waiting to see whether raw material prices normalizes or not. 41:49 41 minutes, 49 seconds Okay but since we are speaking today at the end of May that means our order booking as of March 31st which you have 41:57 41 minutes, 57 seconds just submitted the number 769 cr is insulated for for that execution because we were must have done our planning in 42:05 42 minutes, 5 seconds the month of April. So is that order book uh separated from uh this uh this dilemma which we are facing today or if 42:14 42 minutes, 14 seconds you could just give us some color how is the order book positioning as on date sir if you have the number. So, so to 42:21 42 minutes, 21 seconds keep it simple uh so as of as date we have a pending order book position of 42:27 42 minutes, 27 seconds 769 crores uh about 250 uh is where we 42:34 42 minutes, 34 seconds uh will wait for the material rest all the raw material is secured. 42:40 42 minutes, 40 seconds Okay. 769 is as on closing date as on event date today not 31st March. No as of today as of today. 42:47 42 minutes, 47 seconds Okay. This is because order book as on today. Okay. Yeah, correct sir. Uh if I uh if I look at our uh 42:56 42 minutes, 56 seconds financial number this for this for the year ending 31st March 26 now we have our uh borrowing borrowings have gone up 43:03 43 minutes, 3 seconds also finance cost are at higher side. So uh how are we working on on on this front? I I just shared the number uh my 43:12 43 minutes, 12 seconds my pertain my questions are pertaining to firstly on the uh long-term borrowing of 34 cr and then again our short-term 43:20 43 minutes, 20 seconds borrowing have also shot up to 74 cr. So if you could just give us an understanding and again the trade receivers are also much higher at 416 43:28 43 minutes, 28 seconds cr. So all the M are uh tilting uh tilting towards higher uh uh non 43:36 43 minutes, 36 seconds availability or uh greater cash conversion cycles. So if you could just give us some some color 43:43 43 minutes, 43 seconds on how these uh on these three aspect list the long-term boring short-term and the higher trade receivable. 43:51 43 minutes, 51 seconds Yeah. So uh so so so let me just clarify this. So as I mentioned in my opening 43:56 43 minutes, 56 seconds remarks uh by uh as on 31st of March uh for financial year FI26 we had a cash 44:05 44 minutes, 5 seconds position of 73 crores inclusive of long-term borrowing of 52 crores. Uh of 44:11 44 minutes, 11 seconds course that was largely because of uh of uh higher working capitals because of which we needed to borrow. Now if you 44:19 44 minutes, 19 seconds look at uh uh uh the current positions now out of that roughly about 260 crores 44:26 44 minutes, 26 seconds was which was build at uh towards the uh end of the quarter where the receivables 44:34 44 minutes, 34 seconds due was in in the March in the month after March April and May those have already started coming in and you are 44:42 44 minutes, 42 seconds very clearly seeing that reflection in our cash position. So if you look at as on today -73 which was as on end of 44:51 44 minutes, 51 seconds March is already at minus1 crores uh inclusive of long-term borrowing which we are expecting by by the end of this 45:00 45 minutes month that is another 2 to three days because there's a lot of substantial collections expected. We should be cash positive inclusive of long-term 45:08 45 minutes, 8 seconds borrowing. So we've got things under control. It was it was a a blip uh in terms of larger working capital blocked 45:17 45 minutes, 17 seconds because we had a longer cycle time jobs which came dispatches towards the uh end 45:24 45 minutes, 24 seconds of the year and that's how our uh uh dattors uh numbers were showing up. So 45:31 45 minutes, 31 seconds 260 crores is something which which we are collecting in this quarter itself. 45:37 45 minutes, 37 seconds So, so the end cash positions uh should give you a comfort uh that by this month end we will be cash positive inclusive of long-term uh debt. 45:50 45 minutes, 50 seconds Thank you Kapoor. I'll request to come back for a follow-up. Next follow-up question is from L of Jandhi from Ambit Capital. 46:00 46 minutes Please go ahead. 46:01 46 minutes, 1 second Hi. Uh thank you for the opportunity once again. Uh I think there was some confusion on my end in the previous question that I asked. So sir could you 46:10 46 minutes, 10 seconds please uh help me with the number of the order booking that we did for fourth quarter FY26 and the order book as date 31st March FY26. 46:25 46 minutes, 25 seconds Uh give us a couple of uh seconds. Yeah. 46:28 46 minutes, 28 seconds Yeah. So, so if you look at our order book position uh for the year was 704 46:35 46 minutes, 35 seconds crores for the entire year uh new order booking and uh and we've added another 46:43 46 minutes, 43 seconds 190 crores in the last 2 months. So that's how our current order book position our pending order book position remains at 769 crores. 46:54 46 minutes, 54 seconds Okay, understood. So 704 was uh the order booking for the entire FI26 47:01 47 minutes, 1 second which has been uh if you look at our historical best this has been the second historical best. Uh the best was in FI24 47:09 47 minutes, 9 seconds where there were lot of projects where we clocked close to about 800 crores. Uh this has been the historical best in terms of order booking for us. Second then sorry. 47:18 47 minutes, 18 seconds Okay. Okay. Understood. I think it is more clear now. So thank you for the clarification. I'll get back in the line. 47:26 47 minutes, 26 seconds Thank you. 47:28 47 minutes, 28 seconds Thank you very much ladies and gentlemen. We'll take that as a last question. I'll now hand the conference 47:36 47 minutes, 36 seconds over to Mr. Rejalo Duza for closing comments. 47:43 47 minutes, 43 seconds So thank you all for your uh interesting questions and hope I was able to clarify 47:49 47 minutes, 49 seconds uh to your satisfaction. In case if you have any further queries uh please feel free to connect with us and we would be 47:58 47 minutes, 58 seconds happy to respond. I take this opportunity to thank my resilient team at Anoop and to each and every 48:05 48 minutes, 5 seconds stakeholder helping us deliver value. A big thank you to all our well-wishes for your trust and support as always. Thank you and take care. 48:17 48 minutes, 17 seconds Thank you very much. On behalf of the Hanoop Engineering Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.