Arisinfra Solutions Ltd — Q4 FY26

Arisinfra Solutions Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=_gEWYbjpW8o Published: 2 days ago

0:01 1 second Ladies and gentlemen, good day and welcome to the Q4 FI26 earnings conference call of Ferris Infra Solutions Limited. 0:10 10 seconds As a reminder, all participant lines will be in listen only mode and there will be an opportunity for you to ask questions after the presentation 0:17 17 seconds completes. Should you need assistance during the conference call, please signal an operator by pressing star then 0:25 25 seconds zero on your touchtone phone. Please note that this conference is being recorded. At this time I would like to hand over the conference to Miss 0:33 33 seconds Purwangi Jane from Valer Advisers. Thank you and over to you ma'am. 0:39 39 seconds Good afternoon everyone and a very warm welcome to you all. My name is Purwangi Jen from Valer Advisors. We represent the investor relations of Addis Infra 0:47 47 seconds solutions limited. On behalf of the company, I would like to thank you all for participating in the company's earnings conference call for the fourth 0:55 55 seconds quarter and full year ended of the financial year 2026. 0:59 59 seconds Before we begin, let me mention a short cautionary statement. Some of the statements made in today's earnings call may be forward-looking in nature. Such 1:07 1 minute, 7 seconds forward-looking statements are subject to risk and uncertainty which could cause actual results to differ from those anticipated. Such statements are 1:16 1 minute, 16 seconds based on management belief as well as assumptions made by and information currently available to the management. 1:22 1 minute, 22 seconds Audiences are cautioned not to place undue reliance on these forward-looking statements in making any investment decisions. The purpose of today's 1:30 1 minute, 30 seconds earnings call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review. 1:37 1 minute, 37 seconds Let me now introduce you to the management participating with us in today's earnings call and hand it over to them for their opening remarks. We 1:45 1 minute, 45 seconds have with us Mr. Ron Morbia, chairman and managing director, Mr. Bhavik Khara, whole time director and chief financial 1:53 1 minute, 53 seconds officer and Mr. Shri Nasan Gopalan, Chief Executive Officer. Without any delay, I request Mr. Ron Moria to start 2:01 2 minutes, 1 second with his opening remarks. Thank you and over to you sir. 2:06 2 minutes, 6 seconds Thank you Purwangi. Good afternoon everybody. It is a pleasure to welcome you all to the earnings conference call for the fourth quarter and financial year 2026. 2:17 2 minutes, 17 seconds In the interest of some of the people who may be new to the company. Let me first start by giving you a brief overview of the company followed by the 2:24 2 minutes, 24 seconds financial highlight and operational highlights for the quarter undergrade. 2:29 2 minutes, 29 seconds India's construction ecosystem continues to present a large structural opportunity driven by sustained infrastructure investments, urbanization 2:37 2 minutes, 37 seconds and increasing formalization of procurement processes. However, the industry still remains highly fragmented 2:44 2 minutes, 44 seconds with limited technology integration and operational inefficiencies across sourcing, execution and working capital management. 2:53 2 minutes, 53 seconds Ris is focused on solving these challenges by building an integrated execution and procurement network powered by technology, data intelligence 3:01 3 minutes, 1 second and disciplined operations. Aris is a tech enabled construction materials and services company focused on simplifying 3:08 3 minutes, 8 seconds procurement and execution across India's infrastructure and real estate ecosystem. We operate an asset light 3:16 3 minutes, 16 seconds network-driven model that integrates sourcing, contract manufacturing, logistics, technology, and project execution into a unified operating 3:25 3 minutes, 25 seconds platform. Today, we serve over 3,000 customers through a network of 2,000 plus vendors across 23 states and union 3:32 3 minutes, 32 seconds territories with more than 78% repeat order contribution, reflecting the strength of our execution capabilities 3:40 3 minutes, 40 seconds and customer relationships. Our business is built across three complimentary segments which together create a scalable and capital efficient ecosystem. 3:50 3 minutes, 50 seconds The first segment is our B2B supply business which acts as the entry point to the network. Through this business, we provide developers and contractors 3:58 3 minutes, 58 seconds with efficient procurement solutions across different construction materials. 4:03 4 minutes, 3 seconds This segment is relationshipdriven and helps us build transaction scale, pricing intelligence and deeper customer engagement across regions. 4:11 4 minutes, 11 seconds This segment contributed around 44% to our revenues in FI26. 4:17 4 minutes, 17 seconds The second segment is contract manufacturing which has now become one of our key growth and profitability drivers. Under this segment, we secure 4:26 4 minutes, 26 seconds production capacity through exclusive long-term partnerships with manufacturing plants without owning the assets ourselves. This allows us to 4:34 4 minutes, 34 seconds benefit from manufacturing economics while maintaining an assetike structure. 4:39 4 minutes, 39 seconds During FI26, this segment contributed nearly 47% of our revenues and continued to scale strongly supported by improved 4:48 4 minutes, 48 seconds capacity utilization and strong execution capabilities. 4:52 4 minutes, 52 seconds The third segment is our services business operated through the developer as a services or as we would like to call it the DAS model. Under this 5:02 5 minutes, 2 seconds offering, we manage the entire project life cycle for developers including pro procurement, project execution, funding coordination, sales and collections. 5:11 5 minutes, 11 seconds While this segment contributes a relatively smaller share of revenues today, it delivers significantly higher margins and strong capital efficiency. 5:20 5 minutes, 20 seconds Our D execution pipeline remains strong with currently about 12 plus active projects and about 1,800 plus crores of 5:29 5 minutes, 29 seconds GDB under execution providing strong future revenue visibility. What is important to understand is that these three segments are deeply integrated. 5:40 5 minutes, 40 seconds The B2B supply business helps build customer relationships and network density. Contract manufacturing improves supply control and profitability, while 5:48 5 minutes, 48 seconds the services business drives higher margin and long-term engagements. 5:53 5 minutes, 53 seconds Together, they create a powerful operating network with strong cross-selling opportunities, improving operating leverage and increasing customer stickiness over time. 6:04 6 minutes, 4 seconds With this, I now hand it over to Mr. 6:06 6 minutes, 6 seconds Bhavikhara, the wholetime director and CFO of a company for the financial highlights for the period under review. 6:13 6 minutes, 13 seconds Uh thank you Ronach. Good afternoon everyone who's joined. Let me take you all through the financial highlights for the period under review. For the quarter 6:22 6 minutes, 22 seconds under review, the revenue grew from revenue from operations stood at 343 crores registering a strong growth of 6:29 6 minutes, 29 seconds 55% yearonear. ITA for the quarter grew to 202% yearonear to about 31 crores 6:37 6 minutes, 37 seconds with the IITA margins improving by 431 basis points yearon year to 8.8%. 6:45 6 minutes, 45 seconds PA for the quarter stood at 22 crores compared to a loss in the corresponding quarter last year reflecting a strong operating leverage and an improving 6:54 6 minutes, 54 seconds business mix. For the financial year 2026, revenue from the operations stood at thousand,68 7:01 7 minutes, 1 second crores, reflecting a growth of 39% year-on-year. IITA doubled yearon year to 101 crores with IBITA margins improving to 9.43%. 7:12 7 minutes, 12 seconds An expansion of 290 basis points. PAT for the period stood at 60 crores compared to 6 crores a year ago. 7:21 7 minutes, 21 seconds Importantly, this growth was accompanied by a continued improvement in the balance sheet strength and capital 7:28 7 minutes, 28 seconds efficiency. The networking capital days further reduced to 66 days in FI26 from 7:36 7 minutes, 36 seconds 110 days a year ago while the net debt to equity improved significantly to negative 0.09x. 7:44 7 minutes, 44 seconds Operating cash flow also turned strongly positive during the year reaching 142 crores reflecting disciplined working 7:52 7 minutes, 52 seconds capital management stronger cash generation and a structurally improved business model. Thank you. With this I 8:00 8 minutes hand it over to Mr. Sinasan Gopalan our CEO of the company to give you operational highlights for the quarter. 8:07 8 minutes, 7 seconds Thank you Barak and Ronak. Good afternoon everyone. Coming to the operational highlights for the quarter under review. Our contract manufacturing 8:15 8 minutes, 15 seconds business scaled strongly during the quarter with revenues growing 169% yearonear. Volumes delivered increased 8:24 8 minutes, 24 seconds 91% yearonear to 11.29 lakh metric tons in Q4 financial year 2026. 8:32 8 minutes, 32 seconds We we also saw capacity utilization improvement to 50% from 39% in the corresponding quarter last year reflecting better throughput and 8:41 8 minutes, 41 seconds improving operational efficiencies across manufacturing operations. Another important highlight during the quarter was the strong traction in asphalt which is our newly launched product category. 8:52 8 minutes, 52 seconds Revenues from asphalt increased to 30 crores in Q4 2026 growing 88% sequentially. More importantly, active 9:02 9 minutes, 2 seconds customers in this category nearly doubled during the quarter to 28 customers, reflecting strong customer acceptance and rapid market penetration. 9:10 9 minutes, 10 seconds Our Dash developer as a service business also continued to scale well during the quarter. Dash revenue stood at 36 crores 9:18 9 minutes, 18 seconds in the quarter registering a growth of 264% yearonear and 61% sequentially driving by strong project execution and 9:27 9 minutes, 27 seconds increasing adoption of our service offering. Overall, we believe ARIS is steadily evolving beyond a traditional construction materials business into a 9:36 9 minutes, 36 seconds scalable networkled platform where technology execution capability and ecosystem relationships together create long-term value and sustainable growth. 9:48 9 minutes, 48 seconds Thank you, sir. Shall we open the floor for Q&A, please? 9:59 9 minutes, 59 seconds All right, thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star N1 on their 10:08 10 minutes, 8 seconds touchstone telephone. If you wish to remove yourself from the question queue, you may press star N2. Participants are 10:16 10 minutes, 16 seconds requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question Q assembles. 10:44 10 minutes, 44 seconds The first question is from the line of Dasha from Safire Capital. Please go ahead. Hello. 10:53 10 minutes, 53 seconds Audible. Yes. Yes. 10:56 10 minutes, 56 seconds Yes. Thank you so much for this opportunity. So a couple of questions from our side. Firstly sir, we've seen the contract manufacturing segment we've seen huge growth. So how do you see the 11:05 11 minutes, 5 seconds overall mix evolving in FI27? What sort of percentage share are we targeting for contract manufacturing and the services segment? 11:13 11 minutes, 13 seconds Yes. So if you see historically from FI25 uh to the last year that we closed uh we've grown almost 2x in both the 11:22 11 minutes, 22 seconds segments and now the contract manufacturing segment contributes to almost uh 47% of our annual revenues and 11:29 11 minutes, 29 seconds services about uh 9%. uh you know we have repeatedly uh uh you know mentioned that going forward you know for the next 11:37 11 minutes, 37 seconds maybe 3 to 5 years the focus is always going to be on contract manufacturing and services and we believe that the numbers that we have delivered today uh 11:45 11 minutes, 45 seconds will be sustained uh and we are confident that we will be able to improve uh the utilization even further thereby improving the contribution from 11:53 11 minutes, 53 seconds contract manufacturing as well. Services on the other hand is uh you know lower revenue but we are very confident with the kind of projects that we have under 12:02 12 minutes, 2 seconds execution that we will be able to add uh meaningfully and improve that contribution in the next 12 months as well. 12:11 12 minutes, 11 seconds So so so can we expect like around 55 to 60% sort of revenue share from contract manufacturing in this 9% that we've reached for services can this inch up to 12:20 12 minutes, 20 seconds 10 to 11%. Would that be a fair assumption? 12:23 12 minutes, 23 seconds I think uh it would it would be a fair assumption. We will be looking to target about 55 to 60% contribution for on contract manufacturing and services I 12:30 12 minutes, 30 seconds think somewhere around 9 to 10% that we have uh you know really maintained historically as well. 12:37 12 minutes, 37 seconds Okay. Okay. That's very good to know sir. So if if suppose if we were to take that mix so can we target and assuming 12:44 12 minutes, 44 seconds 40% sort of growth can we target 100 cr for FR27? 12:50 12 minutes, 50 seconds Well, it'll be it'll be hard to actually put down a number to it, but historically, you know, I mean, in the last year itself, we've grown 10x in in 12:57 12 minutes, 57 seconds terms of PAT. Uh, it's important to understand how we will achieve and what are the reasons that we would achieve. 13:02 13 minutes, 2 seconds One of the main there are three key reasons for it. One is the model that we operate on. Uh, you know, we keep our costs significantly under control 13:10 13 minutes, 10 seconds because the entire business is managed to the tech platform that we've developed and that keeps the dependency on human workforce to a minimum. And uh 13:17 13 minutes, 17 seconds that is why you have seen uh you know a a significant amount of growth in PAT in the last year. Uh the improving contribution from contract manufacturing 13:25 13 minutes, 25 seconds and services definitely plays a part and uh more importantly uh working capital which is a significant uh uh you know 13:32 13 minutes, 32 seconds area that we continuously focus on and with a reduced uh number of days in terms of 44 days this year itself that definitely helps us improve our 13:41 13 minutes, 41 seconds profitability as well because we are able to churn the cash more. So hard to put a number on it but yes uh we will be 13:48 13 minutes, 48 seconds looking to compound the pat uh you know in terms of revenue as well. 13:53 13 minutes, 53 seconds Okay fair enough sir and sir we've seen a sharp increase in other expenses in the fourth quarter and gross margin I think also were affected a bit could you 14:01 14 minutes, 1 second please uh elaborate a bit more on why do you see that the sharp increase in other expenses? 14:07 14 minutes, 7 seconds Yes so that is uh mainly due to the expected credit loss that we have taken. 14:12 14 minutes, 12 seconds Usually we like to do that uh at the end of the year. Uh we have taken an additional expected credit loss of about 14:19 14 minutes, 19 seconds 5 crores. This is in line with uh taking a more conservative approach in terms of uh you know the receivable risk that we generally take in our balance sheet. uh 14:28 14 minutes, 28 seconds and and that's something that we did not take uh you know for the first three quarters and we've taken a more conservative approach and uh that is why 14:35 14 minutes, 35 seconds you see a spike in other expenses and also so in terms of interest cost 14:44 14 minutes, 44 seconds we've seen debt reducing significantly but our interest cost has increased so what will be the process for that 14:52 14 minutes, 52 seconds uh the interest cost is has reduced uh but as a strategic move we have started Now uh get uh getting access to working 15:00 15 minutes capital limits. We got a 30 cr sanction from one of the banks and this is what we have uh uh you know mentioned before also that we will be going for about 100 15:09 15 minutes, 9 seconds to 150 crores of working capital facilities. The interest cost is is is not more of a concern for us because it 15:16 15 minutes, 16 seconds is more of a strategic move. We are in the business of funding the bridge between payables and receivables. This is not long-term structured debt. uh we 15:25 15 minutes, 25 seconds don't need capital to grow but we need this working capital facility to actually uh bridge the gap between payables and receivables. So this year 15:34 15 minutes, 34 seconds uh FI26 we had quarter 1 of uh interest cost which was before the listing period and that is why it was high. So when you 15:42 15 minutes, 42 seconds see the annual interest cost uh it is on the higher side because of uh you know the higher debt that we had before listing. 15:50 15 minutes, 50 seconds Okay. Okay. That's very clear. Thank you so much and I wish you all the best in the future. Thank you so much. 15:58 15 minutes, 58 seconds Thank you. Next question is from the line of Dishall Zaviri from Crown Capital. Please go ahead. 16:06 16 minutes, 6 seconds Hello. Uh good morning sir. Thank you so much for taking my question. Firstly congratulations on a great Q4 sir. Uh so 16:12 16 minutes, 12 seconds sir just wanted to uh understand in terms of seasonality like is H1 and H2 similar for us or because of monsoons 16:21 16 minutes, 21 seconds how does that impact s our seasonality sir? 16:26 16 minutes, 26 seconds Uh how we look at our business is slightly different. Uh it's more of a strategic move than seasonality. Uh H1 16:33 16 minutes, 33 seconds usually is uh a little slower. H2 is higher but that is more of a strategic move. That is how we would like to operate as well. We like to push during the second half where the construction 16:42 16 minutes, 42 seconds activity is at its peak and when the cash flows are stronger than the H the first uh H1 period. Uh so the monsoons 16:50 16 minutes, 50 seconds don't really affect in terms of the demand or supply because the construction activity is on and uh compared to that our scale is relatively 16:58 16 minutes, 58 seconds small. I mean it's it's almost negligible as compared to what kind of construction activity happens around but uh you could say it is it is more of a 17:05 17 minutes, 5 seconds strategic move. Uh okay fair fair enough sir. So just wanted to understand in terms of like our FY27 you know target 17:14 17 minutes, 14 seconds in terms of revenue and ITA do we have any guidance for that sir? 17:19 17 minutes, 19 seconds Uh we have uh you know we grew about 40% last year in terms of revenue uh and we have uh historically mentioned that we 17:27 17 minutes, 27 seconds will be looking for a 40% growth for the next two years. So yes we uh the projected revenue growth is about 35 to 17:34 17 minutes, 34 seconds 40%. uh ITA will grow uh uh you know as uh significantly mainly because of the 17:41 17 minutes, 41 seconds costs that I mentioned you know will be in in control as uh uh uh with respect to the revenue growth that we will see mainly because of uh uh the cost the 17:50 17 minutes, 50 seconds direct cost or the biggest cost component that will be in control. Oh okay okay will also yeah fair enough. 17:58 17 minutes, 58 seconds So I just wanted to know like last year Q1 we had like around 8% 8 and a half% 18:05 18 minutes, 5 seconds margin. So right now like we will see improvement quarter on quarter right. I just wanted to know because in Q3 we did 18:12 18 minutes, 12 seconds around 11% and now if I exclude the 5CR uh uh provisioning we would be nearly at that same level in Q4 also. So just like 18:20 18 minutes, 20 seconds wanted to understand like Q1 also margins will be uh will be steady state right like our 11% margin is something that we can normally expect from you all 18:29 18 minutes, 29 seconds around the year right or will there be some chunkiness towards H2 more no so we won't maintain an aid of around 18:38 18 minutes, 38 seconds 10 10.5% uh that is our sweet spot and we'll keep a consistently growth growth and numbers in there 18:46 18 minutes, 46 seconds okay fair also I said that 5 cr that you removed D right that is a fair assumption uh the discounting factor after removing that 18:54 18 minutes, 54 seconds we are at 10 10.2% 2% and we'll maintain that. 18:58 18 minutes, 58 seconds Okay. Okay. Fair fair enough. I just wanted to understand like in terms of this uh war and you know power crisis 19:05 19 minutes, 5 seconds are we seeing like some kind of you know maybe slowdown in construction or like you know are there somewhere like you know does do we have like the pricing 19:13 19 minutes, 13 seconds power in terms of raw materials? How does that work or just if is it impacting our business like when we you know deal with the contract 19:21 19 minutes, 21 seconds manufacturing do we have the ability to pass on the extra cost if we you know if everything is increasing how do how are 19:27 19 minutes, 27 seconds we secured on that front sir uh to be honest not much of a material impact uh you know the model itself is 19:35 19 minutes, 35 seconds designed in a way that uh you know the larger it becomes the more the transactions the more the cost benefit and the more the profitability and you know that is actually what 19:43 19 minutes, 43 seconds differentiates us from traditional trading model as well. Uh so economies of scale is something that we have started to uh extract and as we go 19:51 19 minutes, 51 seconds further with our costs being under control uh we will see you know good amount of uh improvement in profitability and also yes a good amount 19:59 19 minutes, 59 seconds of uh discounts in terms of volume discounts in terms of raw pricing as well. Okay. Okay. Okay. Okay. Fair enough. 20:06 20 minutes, 6 seconds That's it from my side. So thank you so much. So all the best. Thank you. 20:11 20 minutes, 11 seconds Thank you. Next question is from the line of Nav Sha from GC Holdings. Please go ahead. 20:18 20 minutes, 18 seconds Yeah, good afternoon sir and uh congrats on a decent set of numbers. Uh what was heartening was the balance sheet still that we have reported in March. Uh so congrats on that sir. So two questions. 20:30 20 minutes, 30 seconds Uh firstly it's on the uh trade vendor receivables. We've seen a large increase in FI26 maybe because we tying up more 20:38 20 minutes, 38 seconds capacities for our contract manufacturing growth. Uh just in terms of some guidance uh how much uh can this 20:46 20 minutes, 46 seconds trade deposit I mean the current vendor base uh can achieve with the revenues uh because contract manufacturing uh that 20:54 20 minutes, 54 seconds that particular portion I mean how much can it grow on this current base asset base and uh uh second question on this is uh what are the plans for this 21:02 21 minutes, 2 seconds particular year FI27 so the new vendor base will be for newer geographies only or we are looking for expanding the 21:10 21 minutes, 10 seconds existing geographies also Yes. So currently the trade deposits uh that are deployed uh you know for 21:18 21 minutes, 18 seconds securing the capacity and also uh you know a newer model that we entered into which is securing demand uh for the next 5 years and we started with uh a 21:28 21 minutes, 28 seconds multi-year long-term contract with a company like capacity infra projects. So these deposits are actually deployed for that. It gives us uh predictable revenue 21:37 21 minutes, 37 seconds not for just not just for this year but for the next five years. uh with respect to the numbers with the current asset base uh you know we have about 9 million 21:45 21 minutes, 45 seconds metric tons of uptake uh annually that's about 900 to,000 crores of material capacity on an annual basis which itself is about 4,000 to 5,000 crores for the 21:54 21 minutes, 54 seconds next 5 years and uh add to that the 800 cr of contract that we recently signed with capacity that gives us that 22:02 22 minutes, 2 seconds predictable revenue as well and we are uh in the process of exploring more contracts and uh we will be announcing 22:10 22 minutes, 10 seconds ing them soon. So the current asset base actually gives us a revenue predictability of more than 6,000 crores for the next 5 years. 22:19 22 minutes, 19 seconds So we Yes. Yeah. Sorry. Go ahead. 22:23 22 minutes, 23 seconds And secondly uh in terms of geographies uh you know with the current vendor base that we have the current manufacturing partners uh it is always going to be a 22:32 22 minutes, 32 seconds much more stronger strategy to expand our reach and to improve more and more in the regions that we are present and 22:40 22 minutes, 40 seconds uh you know to to actually enter into more and more projects and increase our wallet share uh with the customers present in those regions. 22:48 22 minutes, 48 seconds the 500 cr of contract manufacturing revenue that we did in FI26 on a 9 million ton of capacity contracted uh it 22:55 22 minutes, 55 seconds can go to what I mean on the just this current tires yes you give a five year six year cumulative 23:03 23 minutes, 3 seconds number but I just want an annual number that can be maxed out on this how much can you spread this yeah yes so the annual number that I mentioned we will be looking to uh reach 23:12 23 minutes, 12 seconds a peak utilization of more than 75 to 80% in this financial year itself and uh on a revenue basis because it's a 23:20 23 minutes, 20 seconds mix of all commodities and pricing is different. So if I just add all the top line, it can be 700 crores, 800 crores on the current asset base of how much? 23:28 23 minutes, 28 seconds Absolutely. Yes. Yeah. 23:30 23 minutes, 30 seconds Okay. Fair point. Uh and how much will we type? I mean how much uh uh vendor deposits are we targeting to uh make an FI27? 23:40 23 minutes, 40 seconds Uh number of around uh uh uh last number was was around 160 crores. Correct. 23:49 23 minutes, 49 seconds No, that's absolutely correct. We will look to increase more capacity I think every quarter and uh we will look to maybe invest another 25 to 50 crores 23:58 23 minutes, 58 seconds this year also. What we believe is that uh it is imperative to depend less and less on spot transactions and improve 24:07 24 minutes, 7 seconds our capacity so as to secure the supply capacity because we are in that journey of uh getting higher demand from uh very 24:15 24 minutes, 15 seconds large contractors and developers. We believe that we have achieved something uh with far less capital which other companies have been doing by investing a heavy sum in manufacturing facilities. 24:26 24 minutes, 26 seconds Uh so this is the real advantage and uh differentiator of our model and these are all refundable recyclable uh within 24:33 24 minutes, 33 seconds a specified period. So we will look to invest more in this financial year maybe about 25 to 50 crores depend on the depending on the opportunities that we get. 24:42 24 minutes, 42 seconds Got it. And just the second question is on our uh chunky receivables we are doing a good job uh collecting those overdue receivables. So what is the 24:50 24 minutes, 50 seconds outstanding balance and will we see complete recovery in FI27? That's the second and last question. Thanks. 24:58 24 minutes, 58 seconds Yeah. Uh I'd like to answer that uh you know with respect to the total receivables as well. If you look at our revenue it has uh we've grown by about 25:05 25 minutes, 5 seconds 40% but our receivables has grown only by about 25 to 27% overall. So we have outpaced uh uh you know uh the 25:14 25 minutes, 14 seconds collections in terms of revenues. Uh the 180 plus number the stock receivables now are in the range of about 40 42 25:22 25 minutes, 22 seconds crores and we expect a significant amount of recovery uh in this financial year. So yes we've been doing uh you know fairly well in terms of recovering 25:30 25 minutes, 30 seconds the stock receivables and uh uh significantly well in terms of uh you know the active receivables that is the active business under review. 25:39 25 minutes, 39 seconds Got it. Got it. Great. Great. So, congrats to the team and all the best. Thank you so much. 25:47 25 minutes, 47 seconds Thank you. Before we take the next question, a reminder to all the participants, if you wish to ask a question, please press star and one. The 25:55 25 minutes, 55 seconds next question is from the line of love from Counter Cyclical Investments. Please go ahead. Uh hello. Am I audible? 26:04 26 minutes, 4 seconds Yes. 26:05 26 minutes, 5 seconds Yes, sir. So uh I'm actually new to the company. So I was just seeking a couple of clarifications. So our services order 26:13 26 minutes, 13 seconds book is that the GDV or is it the material supply plus our fee revenue? 26:20 26 minutes, 20 seconds It's the material supply plus the fee revenue. So what is the top line for us? So it's not the GDP of the client. 26:30 26 minutes, 30 seconds All right. And second on slide about uh 29 of the investor presentation you say 26:37 26 minutes, 37 seconds that you've infused some working capital investments in these projects. So uh can you throw some light on that and what 26:43 26 minutes, 43 seconds sort of investments are we looking to make on the services side? 26:50 26 minutes, 50 seconds So basically sir these are some small working capitals that are required from time to time. So nothing significant on that portion. So uh going forward we 26:59 26 minutes, 59 seconds have tied up for uh our GDB order book the GDB is around 2,000 crores. So uh we 27:07 27 minutes, 7 seconds will every quarter we will be looking at uh investing uh I mean small amount in order to secure projects. So uh we will 27:17 27 minutes, 17 seconds be at around 10% of the total turnover is what Ronak and Bavik have also given the guidance. So we will be on track with that. 27:25 27 minutes, 25 seconds All right sir. Lastly uh you know as we increase our contract manufacturing and services business can we expect uh 27:32 27 minutes, 32 seconds margin improvement over the next 2 three years or are the current numbers sustainable long-term margin trajectory. 27:42 27 minutes, 42 seconds So sir I mean yeah you're wrong. 27:45 27 minutes, 45 seconds Yeah I think I think uh you know the current numbers uh uh they are sustainable and that is going to be the focus area going forward. However, we 27:54 27 minutes, 54 seconds will definitely look to uh you know increase our focus on the two very uh you know important segments that we have 28:01 28 minutes, 1 second and try to improve profitability. But uh just to reiterate, we will be looking to sustaining uh the numbers that we are already clocking. 28:09 28 minutes, 9 seconds All right. Thank you so much. 28:14 28 minutes, 14 seconds Thank you. Next question is from the line of Sha from Manas. Please go ahead. 28:21 28 minutes, 21 seconds Yeah. Hi. Am I audible? Yeah. Yes, you're audible. 28:25 28 minutes, 25 seconds Yeah. So, my first question is on the networking capital days. We have seen a very good improvement in that. So, could 28:33 28 minutes, 33 seconds you just uh highlight the reasons and is this number sustainable going forward. 28:40 28 minutes, 40 seconds So, if you look at our networking capital days, uh we started with about uh 120 days at the time of our DR, we 28:48 28 minutes, 48 seconds are sitting at about 66 days today. So uh this has not happened overnight or it is not a function of uh getting lucky 28:56 28 minutes, 56 seconds for one quarter. This model was always designed in a such a way that at a particular scale at an inflection point the model becomes more and more capital 29:05 29 minutes, 5 seconds efficient. If you look at the last three quarters we've been significantly improving in terms of uh you know the working capital efficiency and the 29:12 29 minutes, 12 seconds number of days has come down to about 66 currently. So yes, we believe that while growing improving your networking 29:19 29 minutes, 19 seconds capital days is uh you know a definite uh improvement or maybe a validation of the model that we have and we believe 29:27 29 minutes, 27 seconds that while we grow forward in the next few quarters uh we'll be able to at minimum sustain this number and definitely look to improve as well. 29:36 29 minutes, 36 seconds Okay, got it. So and on asphalt I mean you know could you just explain the thought process of entering a new category and you know the pricing 29:44 29 minutes, 44 seconds structure if and you know how much margins are we able to clock on that obviously I know it's very new but if you could just give a color on that 29:53 29 minutes, 53 seconds sure uh since the beginning you know when we started this company the focus was always on uh you know this segment 30:00 30 minutes which is very very complex but really the backbone of India's growth story construction materials and we were 30:07 30 minutes, 7 seconds looking for uh complex categories where there was a certain value ad not just in terms of uh adding value to customers 30:14 30 minutes, 14 seconds but also to the suppliers as well and Asphalt falls in line perfectly with this kind of uh thesis. If you look at this product, it is not just about 30:23 30 minutes, 23 seconds delivering the material. It is actually about the entire execution and laying of the asphalt. If you look at any road activity today, uh most of these have 30:32 30 minutes, 32 seconds multiple layers of aggregates which we are uh you know which is actually our core product and then there is this final layer of assault which adds to uh 30:40 30 minutes, 40 seconds you know the portfolio that we already had. So we are present across the value chain of constructing any road project 30:47 30 minutes, 47 seconds today in India and it is a very skilled executionheavy segment and it is a very niche segment where there are not many 30:54 30 minutes, 54 seconds players who are doing this on a very large scale. So it was uh you know a perfect fit to the strategy that we have 31:01 31 minutes, 1 second uh you know as as a platform and that's the reason why we decided to enter this segment. Uh on the margins uh we have 31:08 31 minutes, 8 seconds seen historically with the partner that talking about 18 to 20% uh net profit is very much possible and the working 31:16 31 minutes, 16 seconds capital is also significantly under control. Uh and the primary target market is all the big infra companies. 31:23 31 minutes, 23 seconds So that these were the reasons why we were very excited to actually partner with a manufacturer and get this control. 31:29 31 minutes, 29 seconds Okay. So then how are the contracts uh line it's almost similar as uh aggregates or you know because road 31:36 31 minutes, 36 seconds projects may get hampered or you know some for some reason or the other. So how are the contracts and how are we safeguarded if there's a delay? 31:45 31 minutes, 45 seconds Yes. So it works very similarly to how uh you know aggregates work but the only difference being that in terms of stone 31:53 31 minutes, 53 seconds aggregates when we supply it is just a it is just a uh a delivery model where you just deliver the materials and uh you know the work is completed with 32:01 32 minutes, 1 second respect to asphalt it is not just about delivering but it is also about execution which is basic layering of the material. uh that is the only difference 32:09 32 minutes, 9 seconds apart from that not much liability as a uh you know as a platform or as a partner who's into the supply and execution of materials. So it doesn't 32:18 32 minutes, 18 seconds work as a typical EPC contract. It is still a supply contract. 32:22 32 minutes, 22 seconds Okay. So and on uh contract manufacturing we have improved our utilization to 50. What is the optimum 32:30 32 minutes, 30 seconds number that you cater to and you see for you know targeted revenues uh going forward? 32:37 32 minutes, 37 seconds So if you look at our utilization and that to just the fourth quarter at an annualized rate we are well above uh 65 32:44 32 minutes, 44 seconds to 70%. Uh in terms of the annual number the contribution is about 47% because it's been growing steadily over the quarters. Uh as mentioned earlier this 32:53 32 minutes, 53 seconds year we will look to uh hit a peak utilization of over 75 to 80% or even more. uh we have the supply, we have the 33:01 33 minutes, 1 second demand and uh we are just now looking to add more customers and improving increasing our wallet share with existing customers as well. 33:08 33 minutes, 8 seconds What's the current wallet share if you could just uh it's a mixed bag right from uh you know the topmost customers where we 33:16 33 minutes, 16 seconds actually contribute to maybe somewhere around 25 to 50% of their uh uh demand to then going to maybe about just to 5 33:24 33 minutes, 24 seconds to 10% in terms of you know companies which are very very big. So it's a mixed bag. Hard to put a number but uh you know wherever we are we are looking to 33:31 33 minutes, 31 seconds kind of uh increase our wallet share with all of these customers. Sure. So that helps. I'll join back. Thank you. Thank you. 33:40 33 minutes, 40 seconds Thank you. A reminder to all the participants that you may press star and one to ask a question. The next question is from the line of Giri Raj Dhaga from Vasaria Family Trust. Please go ahead. 33:52 33 minutes, 52 seconds Yeah. Uh hello Tim. Uh one clarification. Did you mention that five year the contract manufacturing asset base can give 6,500 C revenue or the cumulative 5 years? 34:04 34 minutes, 4 seconds No sir. uh the total deposits that are deployed which is in the range of let's say about 200 200 to 250 crores is the 34:11 34 minutes, 11 seconds asset base which will give us about 4,000 to 4,500 and the contracted revenue model example is the capacity uh 34:19 34 minutes, 19 seconds contract that we sign which is about 800 crores for the next 5 years and that is also added uh as a separate uh you know revenue predictability on top of that. 34:27 34 minutes, 27 seconds So that actually gives us and then you add the services segment as well the fee income plus the cross-elling of materials all put together uh gives us a 34:36 34 minutes, 36 seconds revenue predictability of around 6,000 plus crores in the next 5 years. 34:40 34 minutes, 40 seconds Okay. Second you made about 250 cr of deposit in the customer as well as vendor cumulatively. First of all is this interestbearing first of all? 34:50 34 minutes, 50 seconds No, the these are not interestbearing since these are actually these are actually long-term refundable deposits linked to multi-year capacity contracts. 35:00 35 minutes Accounting standards require us to discount them up front and then recognize the impact over the life of the contracts. These are basically recognized as financial instruments and 35:09 35 minutes, 9 seconds accordingly based on this there was about a 5 cr of non-cash unwinding income recognized during the period which has resulted in higher other 35:18 35 minutes, 18 seconds income and you'll see that in the portfolio and a corresponding impact on ieta and that is why you will see that the ieta reported ieta is down by about 35:25 35 minutes, 25 seconds 5 crores because of this because they were recognized as financial instruments the related cash flows continued to be reflected under investing activities 35:33 35 minutes, 33 seconds given the long-term nature of these arrangements. 35:37 35 minutes, 37 seconds Okay. So, so just a third like it's not part of like other income or other operating income because uh uh that's like business nature of the income, right? 35:47 35 minutes, 47 seconds Yeah. So, it is basically based on the accounting standards and because these are recognized as financial instrument instruments non-interest bearing they 35:54 35 minutes, 54 seconds are uh discounted at present value and then there is uh you know operating income at play and then there is a present value discount which is taken as 36:01 36 minutes, 1 second expense. So the net effect is at pat but these are all last thing you mentioned 25 30 cr 36:09 36 minutes, 9 seconds investment in contract manufacturing of 100 deposits are you including customers also because I saw the number of 162 and 36:16 36 minutes, 16 seconds 88 cr this year so I'm 250 cr will grow by how much let's say each year next two three years 36:23 36 minutes, 23 seconds so the 250 cr is a combination of all these capacity deposits and the contracted revenue model that we entered into and this itself in the next 5 years is going to be about 5,000 plus crores. 36:34 36 minutes, 34 seconds This year itself it should be about a,000 crores. 36:38 36 minutes, 38 seconds No, I mean how much will you invest more to like our cash outflow will be what? Invest more the revenue number. 36:46 36 minutes, 46 seconds Yeah. Yeah. So as as as I mentioned earlier we will be looking to invest about 25 to 50 crores but it all depends on the kind of opportunities that we 36:54 36 minutes, 54 seconds get. Uh the recent being the Oswalt uh opportunity which was very exciting. So we are continuously in the lookout for more and more opportunities. 37:03 37 minutes, 3 seconds So sir to your question combination of both customer and mentor. 37:06 37 minutes, 6 seconds So 25 to 50 cr customer and mentor not just one side. Okay. Okay. Sure. Thank you. 37:19 37 minutes, 19 seconds Thank you. Next question is from the line of Anku from Jan Capital. Please go ahead. 37:29 37 minutes, 29 seconds Ankor line is just to confirm just to confirm there is no commodity price risk on you guys right uh whether it's 37:36 37 minutes, 36 seconds asphold or uh normal real estate yeah nothing I think and second just to understand let's say 37:45 37 minutes, 45 seconds capacity gives you an order compared to capacity how much do you guys are able to save given your scale on procurement 37:53 37 minutes, 53 seconds in percentage terms uh that would actually be uh you know getting all the trade secrets but uh 38:02 38 minutes, 2 seconds what we've realized is when we started our journey with not just capacity but other companies as well we were making fairly less gross margins and uh in 38:10 38 minutes, 10 seconds about 5 years because of the volume uh purchases that we have been doing the growth that we have seen we've uh uh you 38:17 38 minutes, 17 seconds know enabled us to get you know higher volume discounts uh the prices that I would uh believe that nobody else would get in the market. 38:26 38 minutes, 26 seconds And do you see yourself offering this service to more uh infrastructure contractors, someone making the metro 38:35 38 minutes, 35 seconds stations and all that or will it stay with? 38:40 38 minutes, 40 seconds Absolutely. Yes, it is it is it is a model that is uh you know designed not just for real estate developers or contractors but for infra contractors as 38:47 38 minutes, 47 seconds well. In fact, we definitely did receive uh you know a few inquiries from more uh you know bigger contractors after we announced capacity. So yes, we have 38:55 38 minutes, 55 seconds enough visibility in the market. The model definitely adds a lot of value to these customers because they get predictability not just for one order or 39:03 39 minutes, 3 seconds a month but they actually get predictability for the next 3 to 5 years. So that's the real value ad for them and this is what this industry is 39:10 39 minutes, 10 seconds now slowly uh understanding and uh you know getting used to uh you know as against uh depending on spot transactions. 39:19 39 minutes, 19 seconds Um then strategically does it make sense to get into other adjacencies like uh uh 39:27 39 minutes, 27 seconds construction chemicals or or something like paints. Does that make sense for you guys? 39:34 39 minutes, 34 seconds uh we are already present in construction chemicals. However, it contributes just to about 2 to 3% of the revenue. Uh we've we're not big 39:42 39 minutes, 42 seconds believers as a as a management in diversifying uh a lot in terms of product categories. We believe that the 39:49 39 minutes, 49 seconds top five to six raw materials in India today the demand for themselves is is thousands and thousands of crores and 39:56 39 minutes, 56 seconds relative to that you know our scale is negligible. So we believe that uh you know complex materials uh materials that 40:03 40 minutes, 3 seconds are harder to source materials that are harder to get on time materials that are very very non-transparent in terms of pricing uh you know actually give us uh 40:12 40 minutes, 12 seconds a much better margin profile and a much better dependency on the customers and vendors on us. So that is what we will look to do. 40:20 40 minutes, 20 seconds Yeah. See the point I mean I'm trying to understand is if I look at tiles uh given the gas shortage lot of mobby guys struggled but now given your scale can 40:29 40 minutes, 29 seconds you go ahead and do that same stuff in in for example tiles. 40:34 40 minutes, 34 seconds Yes uh as a model we definitely can but as a strategy uh we haven't tried that. 40:40 40 minutes, 40 seconds We would like to you know concentrate on the key raw materials. Uh there are multiple reasons to it more business than uh actually financial uh and and 40:48 40 minutes, 48 seconds and that's something that we you know uh plan very well as management uh where we want to enter which geographies which 40:56 40 minutes, 56 seconds products and uh how fast we can grow and what is the working capital cycle looking like in that particular region. 41:02 41 minutes, 2 seconds So that's going to be more important than just kind of uh getting into any product category. 41:06 41 minutes, 6 seconds Fair enough. Um again let's let's work with 40% growth. I guess uh similar margins will give you 100 cr pat this year. Let's say another 140 next year. 41:17 41 minutes, 17 seconds So what kind of operating cash flows uh will let's say 100 cr pat this year or 140 cr pat next year give for F27 and 41:26 41 minutes, 26 seconds F28 will not give uh yes we would not like to give hardcore numbers but yes uh you know the numbers can be derived based 41:34 41 minutes, 34 seconds based on the revenue growth that we have uh we are going to project. Uh important to note uh we have turned the cash flow from operating uh you know activity 41:42 41 minutes, 42 seconds positive this year and it's about 140 crores which actually uh you know is is validated uh you know by the business 41:50 41 minutes, 50 seconds model that we have we genuinely are at an inflection point where uh whatever we did for the last 3 to 5 years the foundation that we built the 41:57 41 minutes, 57 seconds diversification we did in terms of customer uh profiles in terms of product mix in terms of getting the technology to give us all of the data that is 42:05 42 minutes, 5 seconds available real time and to make much more informed decisions and to actually improve our credit structure, credit management and credit exposure which is 42:13 42 minutes, 13 seconds a big part of what we do. Uh that has significantly contributed to the PAT and we believe that uh you know if these 42:20 42 minutes, 20 seconds underlying factors remain uh you know stronger fundamentally stronger we will be uh you know reaching those numbers that you've mentioned uh and we will be 42:28 42 minutes, 28 seconds staying uh cash flow from our patients positive. Wait just uh let me rephrase. 42:33 42 minutes, 33 seconds Can you give us some color on your OCF to PAT ratio that you guys think you can achieve in next this financial year and next financial year? 42:40 42 minutes, 40 seconds I'm not asking for ratio. I mean at currently we are at about uh 1 is to two uh somewhere around 42:48 42 minutes, 48 seconds that and uh I think the next year we will be looking to be somewhere around 1 is to 1.5 maybe uh but that's something 42:55 42 minutes, 55 seconds that uh you know uh I mean we will look to sustain this kind of a ratio as well going in the future and do you think let's say sometime end 43:03 43 minutes, 3 seconds of H1 you will have some color or how do you want to use that uh surplus cash generated? 43:10 43 minutes, 10 seconds uh we are at a growing stage. Uh the model we haven't really pivoted from the core model that we have in the last 3 to five years. We would like to stick to 43:19 43 minutes, 19 seconds that. So the excess cash generation you know will uh go into investing in capacities and there are a lot of opportunities in terms of uh uh 43:28 43 minutes, 28 seconds increasing the capacity uh also in the services segment where we can actually uh you know secure our business for the 43:35 43 minutes, 35 seconds near term. So uh that's something that we will look to do when it comes. But yes, the primary focus right now is to 43:42 43 minutes, 42 seconds actually improve our capacity, increase our capacity as we move forward because we like to have predictability for the business for the next 3 to 5 years. 43:52 43 minutes, 52 seconds Okay. All the best. Thank you. 43:57 43 minutes, 57 seconds Thank you. Next question is from the Puddle from Pinpoint X Capital. Please go ahead. 44:05 44 minutes, 5 seconds Yeah, good afternoon sir. Am I audible? Yes. 44:09 44 minutes, 9 seconds Uh so congratulations on a good set of numbers. Uh we talking about a 40% kind of growth uh say for FI27 and 28. So uh 44:19 44 minutes, 19 seconds being a platform business do you see any operating leverage coming and you've been talking about the fixed costs going down and you know managing the cost. So 44:27 44 minutes, 27 seconds uh do we see the beta growth will be higher uh than the revenue growth in percentage terms? 44:35 44 minutes, 35 seconds Yes. If you if you look at FI26 as well, uh you know, we've grown in terms of uh a bit of margin in terms of percent. Uh mainly because our costs have been in 44:43 44 minutes, 43 seconds control and we've been uh you know, mentioning this in our previous earnings calls as well that uh being a platform having technology at its uh you know 44:52 44 minutes, 52 seconds core to run the operations. uh our dependency on the biggest cost center is relatively less and while we grew 40% in 44:59 44 minutes, 59 seconds terms of revenue our actually biggest cost center didn't grow uh linearly and that is what we expect going forward as well so yes to answer your question more 45:07 45 minutes, 7 seconds of the gross margin will flow into iota and eventually into pat okay so we can expect a higher 45:15 45 minutes, 15 seconds percentage growth in terms of and then the rest yes we will first sustain a 10 plus 10% plus margins and this we will look to uh 45:24 45 minutes, 24 seconds you know improve that even further because we expect improvement from uh you know contribution improvement from uh contract manufacturing and services as well. 45:33 45 minutes, 33 seconds And uh in our last interview on television we had mentioned that we have a uh you know visibility of the you know 45:41 45 minutes, 41 seconds a lot of uh orders in pipeline uh in the first quarter and we would be able to do the whole year's booking and that so I mean could you give some color on that 45:50 45 minutes, 50 seconds like what's the pipeline looking like the near near-term pipeline? Yes. 45:53 45 minutes, 53 seconds So sir that's what that was me uh that was me in the interview. Q1 is very very uh crucial for us. In Q1 we will uh tie 46:02 46 minutes, 2 seconds up most of our business for the entire year and you had uh I mean in the last few days you must have seen some of the 46:08 46 minutes, 8 seconds announcements like the vada uh capacity deal and very soon I mean you will hear a few more. So our aim is in Q1 we 46:18 46 minutes, 18 seconds should be able to predict around 85 to 90% of our top line and similarly of the bottom line as well. So that is where uh 46:26 46 minutes, 26 seconds we we try to be different. We want to secure the entire year in Q1 itself. 46:32 46 minutes, 32 seconds That's our first five five overs of the IPL match. 46:37 46 minutes, 37 seconds Great sir. And looking at the orders are like a typical order you know execution timeline is what like 2 3 years. 46:47 46 minutes, 47 seconds So sir typically if it's a dash uh dash project we generally uh do projects which get executed between 12 to 24 46:55 46 minutes, 55 seconds months. And now uh with the model that we have chosen like uh the capacity deal that we've done we like to secure our 47:04 47 minutes, 4 seconds procurements uh orders for close to four to 5 years. 47:09 47 minutes, 9 seconds So that's how typically uh the procurement side and the dash model works. 47:14 47 minutes, 14 seconds So as you're procuring you're getting the new orders is giving you visibility not just for this year but for the next maybe two or three years. 47:21 47 minutes, 21 seconds Absolutely. So as far as as far as dash projects are concerned, we know very clearly, which material is required when, what are the BQS and so on and so 47:30 47 minutes, 30 seconds forth. As far as these uh uh uh revenue projects are concerned like capacity, we have secured our revenues for the next 5 47:38 47 minutes, 38 seconds years. We are actually a part of their annual operating plan. We are one of the largest partner vendors for them and we 47:46 47 minutes, 46 seconds know which projects the materials are growing. So that gives us complete visibility on the backward integration for us to plan where to secure from how 47:55 47 minutes, 55 seconds to secure from and what price to secure from and there is complete predictability in the business. 48:02 48 minutes, 2 seconds So on the raw material plan front like uh whatever the raw material cost would be inflated uh I would assume there are pass through on the manufacturing side. 48:13 48 minutes, 13 seconds Sorry I didn't get your question. Uh so so there I'm sure there must have been raw material inflation sir because of 48:20 48 minutes, 20 seconds the Iran war. So are these costs like a pass through on our sales? 48:25 48 minutes, 25 seconds For us it is a clear pass through. Our business model is such if the steel if steel is sold at 90,000 and if the 48:32 48 minutes, 32 seconds market is at 95 so for us it is a complete pass through. We have seen steel at 40 60 90 but that does not really impact our profitability. 48:42 48 minutes, 42 seconds Great sir thank you investor. Yeah. Yeah. Thank you so much. 48:48 48 minutes, 48 seconds Thank you. A reminder to all the participants. Anyone who wishes to ask a question may press star N1. 49:00 49 minutes We will take a next question from the line of Sumit Singh. An individual investor. Please go ahead. Hello sir. Can you hear me? 49:08 49 minutes, 8 seconds Yeah. 49:10 49 minutes, 10 seconds As a congratulations for great set of numbers. Pardon me for my simple question but I wanted to understand what's the vision for the management for 49:18 49 minutes, 18 seconds next 3 years four years we are we are product of dash we have now mentioned as a fold are we actively looking for new 49:27 49 minutes, 27 seconds categories or thinking of doubling down on the segments we are already in that would be my first question secondly I'll 49:35 49 minutes, 35 seconds ask yeah uh so thank you question uh with respect to the vision uh if you look at 49:42 49 minutes, 42 seconds the Indian construction industry today uh it is it is a humongous industry uh lacks and lacks of crores for projects and the biggest component being 49:50 49 minutes, 50 seconds materials. So we set out to build an operating layer for this construction industry which no one has ever built. Uh 49:57 49 minutes, 57 seconds this operating layer which actually keeps the entire supply chain together. 50:02 50 minutes, 2 seconds That was the vision and that is still the vision in terms of how we will achieve this and what would be the strategy. Yes, we will look to double down on the categories that we are 50:10 50 minutes, 10 seconds already doing because we haven't scratched the surface till now even with this scale and with you know newer product materials like asphalt or maybe 50:19 50 minutes, 19 seconds the more exciting Dash vertical that we have which has grown more than uh I would say about 10 15x in the last 3 years is is something that is gaining a 50:28 50 minutes, 28 seconds lot of traction and we have identified a new category in itself uh which has real demand in the Indian market. So you know 50:35 50 minutes, 35 seconds the vision being simple uh you know to create that operating layer for uh the Indian construction industry. 50:44 50 minutes, 44 seconds What the second question why I supply to large ETC companies I wanted to ask why 50:51 50 minutes, 51 seconds can't they backward integrate is it due to uh economics of scale or we as a company has advantage of some that not 51:00 51 minutes easily even a large company can integrate and secondly what is the competitive landscape are there any 51:07 51 minutes, 7 seconds sorry your low uh sorry your voice is pretty low I can't hear you clearly can you hear me now yes Yes, I can. Yes. 51:14 51 minutes, 14 seconds Okay. So, secondly, I wanted to understand ICV supply to large EPC companies. Why can't they backward 51:21 51 minutes, 21 seconds integrating to get into supply contract supplies as we are with small manufacturers? Is it because of economics of scale that we have achieved 51:30 51 minutes, 30 seconds or some other reasons? Secondly, so what's the competitive landscape? Are there any other companies which are operating in a similar model as we are? 51:38 51 minutes, 38 seconds Thank you. 51:40 51 minutes, 40 seconds Yes. Uh so on the question of uh doing uh you know uh integrating the supply chain themselves in fact it's an 51:48 51 minutes, 48 seconds interesting question this is what was happening before you know companies like ARS existed uh it was happening directly 51:56 51 minutes, 56 seconds there were a lot maybe hundreds of bilateral relationships existing between the vendors and the customers the real challenge or the challenge that has 52:04 52 minutes, 4 seconds existed for many many years now is the working capital issue. suppliers uh you know want money early uh customers pay 52:12 52 minutes, 12 seconds late. there is money stuck in the middle. But more importantly, there is no predictability of cash flows. And when there is no predictability, the 52:19 52 minutes, 19 seconds materials don't arrive on time. And because all of these projects are limited, you know, limited duration, their demand is fluctuating. Suppliers 52:26 52 minutes, 26 seconds cannot actually adjust or tune to this kind of fluctuating demand. That is where you know platforms like ARIS actually come into existence and add a 52:35 52 minutes, 35 seconds lot of value not just on the demand side but on the supply side as well. So we bring uh you know you know in very simple terms what we do is we create 52:44 52 minutes, 44 seconds that single relationship between all of these vendors on the one side and all of these customers on the other side and we bring predictability to cash flows to 52:51 52 minutes, 51 seconds material planning to production planning and that is why we are able to kind of generate high returns uh you know as you see in our performance as well. 53:01 53 minutes, 1 second answer any light on competitive landscape like are we the only company who is like thinking the way we are operating 53:09 53 minutes, 9 seconds so if you look at our business model it is uh unique in terms of the different segments that we have combined uh we are 53:18 53 minutes, 18 seconds into supply we are into services and we operate through technology that is a very unique combination that is present in India today and that is why you'd see 53:26 53 minutes, 26 seconds that uh you know it just it's just not supply of materials but it is about the execution or the operating layer that we are building that is uh solving most of 53:35 53 minutes, 35 seconds the problems and we are present across the value chain in terms of competitive landscape uh you know would not like to 53:41 53 minutes, 41 seconds comment more on the competitors but uh the business model today the more really is the relationships trusting the 53:50 53 minutes, 50 seconds customer trusting the vendor and the trust is on both sides and this does not happen overnight it takes years to build 53:57 53 minutes, 57 seconds and once you're able to do this on a very large scale as you see with us 3,000 plus customers till today, 2,000 plus vendors. Uh the business compounds 54:04 54 minutes, 4 seconds itself. So this is where we are and we believe that uh you know we are in the right direction and we uh you know will be looking to grow uh you know this network in the coming few years as well. 54:16 54 minutes, 16 seconds All right sir. Thank you so much and all the best for the coming years. Thank you. 54:23 54 minutes, 23 seconds Thank you. Next question is from the line of Dial Ziri from K Capital. Please go ahead. 54:31 54 minutes, 31 seconds Thank you so much for letting me ask a question again sir. So just like hard about last participants question in terms of competition just wanted to know 54:40 54 minutes, 40 seconds like you know there are you know there's some like shankara is there right so is that for them is it easy to come into 54:47 54 minutes, 47 seconds this you know place like you know it'll be more like kind of like a m right type like what we can offer. What is the 54:56 54 minutes, 56 seconds difficulty if someone you know a big group comes in like they like some then they want to start doing this how difficult would it be to replicate us 55:04 55 minutes, 4 seconds sir that's what I want to understand sir I think it's more important to understand what we have built uh with 55:11 55 minutes, 11 seconds respect to the business model specifically focusing on the large infracontractors and developers across the country uh these are not hardware 55:18 55 minutes, 18 seconds tools that we sell or it's not a supermarket or anything of that sort the mode here is execution It's not the product portfolio. When we get into execution, we take bulk orders. 55:29 55 minutes, 29 seconds Sometimes uh you know the purchase orders can be in excess of 50 to 60 crores as well which is continuous supply for the next maybe 6 months. So 55:37 55 minutes, 37 seconds we are into a different segment. It is you know the more serious segment. Uh if you look at of the technology that we built uh you know we've been mentioning 55:45 55 minutes, 45 seconds about it uh since the last uh you know we we've been building this since the last 5 years. U if you look at this business demand generation is fairly 55:53 55 minutes, 53 seconds easy but managing the operations and actually execution of uh let's say the thousand crores of revenue that we did 56:01 56 minutes, 1 second uh is fairly tough. Uh and the dependency on human workforce increases as you scale. This is what we wanted to solve for and that is exactly what the 56:09 56 minutes, 9 seconds infrastructure that we've built solved for us. Today we are operating uh you know handling about 800 deliveries per day. We're handling thousands of 56:17 56 minutes, 17 seconds documents. Last year itself we digitized about 6.5 lakh uh documents and we've reached a point where we are creating automated entries uh using AI just by 56:26 56 minutes, 26 seconds clicking a picture of a delivery challenge and that is something that is unheard of in this industry and uh this is the kind of cha change that we are 56:33 56 minutes, 33 seconds bringing to a traditional model where it was dependent on a large workforce a lot of phone calls a lot of different mediums of communication to execute the 56:41 56 minutes, 41 seconds business and uh third and the most important segment is services. So uh you know we are ahead we believe in terms of 56:49 56 minutes, 49 seconds what we have built because it will take this kind of investment this many years of investment and this kind of experience and the legacy behind the 56:57 56 minutes, 57 seconds management to build what we have built in about five 10 years. 57:02 57 minutes, 2 seconds Okay fair fair enough. So I just last question like when I was going through your presentation in terms of tech also you develop something very exciting 57:09 57 minutes, 9 seconds stuff. So is that just used in-house or are we ever looking you know offering this also as a solution because a document you know the digitization 57:17 57 minutes, 17 seconds process can be used by a lot of other players in just our industry. So are we ever looking at that or is it just mostly for internal use sir? 57:26 57 minutes, 26 seconds Absolutely. I mean we're as much excited as uh you know you you thought uh you know we would be uh about developing this platform because it's really not 57:33 57 minutes, 33 seconds just about uh you know punching in orders. It is really about running the business, operating the business through technology. As of now, uh our entire 57:42 57 minutes, 42 seconds business now is uh you know running through that piece of technology. There will be an option to kind of open it up to customers and vendors. But we don't 57:50 57 minutes, 50 seconds look at this as a pure SAS model where we will be selling the program that we've built. But uh more importantly it is going to be a hook for uh you know 57:59 57 minutes, 59 seconds the customers and vendors to uh start transacting with us because the kind of efficiency that it actually gives uh to 58:07 58 minutes, 7 seconds you know both on both the sides is is uh very very significant when you actually factor in the large SKUs the large 58:14 58 minutes, 14 seconds number of SKUs the product complexity the non-transparent pricing uh and the credit uh exposure that we take. So yes, it's more of an internal use as of now, 58:22 58 minutes, 22 seconds but we will open it up for the customers and vendors in the near future, not to sell the platform, but to maybe uh get into a a subscription model or a 58:32 58 minutes, 32 seconds transaction fee that we will look to do in the future. But this is just a part of the strategy as of now. 58:38 58 minutes, 38 seconds Okay, fair enough. Fair enough. That's it from Thank you so much. All the best. Thank you. 58:44 58 minutes, 44 seconds Thank you. Next question is from the line of Kushal Kasi from Invid Research. Please go ahead. 58:53 58 minutes, 53 seconds Yeah. Hi, thanks for taking my question. 58:55 58 minutes, 55 seconds Uh, so in your press release, I've seen on page number three, we've mentioned that we plan to uh, you know, target new categories including tiles, plumbing, 59:02 59 minutes, 2 seconds electrical, and sanitaryware. So, who will be the typical customers here, real estate guys, and what kind of, you know, how large can this portion or this part 59:11 59 minutes, 11 seconds of business can become in the next two to three years? 59:16 59 minutes, 16 seconds Uh right now all of these materials are actually factored in in other materials which contribute to about 15 to 20% of the overall revenue. Uh the real target 59:25 59 minutes, 25 seconds market for this is real estate developers and contractors as you mentioned and these can be of uh different sizes as well. Uh we believe 59:32 59 minutes, 32 seconds this category takes a little while to build. Uh you know a lot of uh manufacturing partnerships need to be done. The products uh are are 59:39 59 minutes, 39 seconds differently handled when it come when compared to the key raw materials. But it you know some of these segments can be very exciting in terms of uh you know 59:47 59 minutes, 47 seconds operating as a platform uh with all of these construction materials under one roof. So yes uh right now the other material segment is about 15 to 20%. And 59:56 59 minutes, 56 seconds we will look to sustain this number at a 40% growth and uh from there on we'll see which of the verticals are very exciting and we will look to kind of uh 1:00:04 1 hour, 4 seconds you know go in deeper with those materials. Sir is there a private label opportunity here because most of the materials which you sell otherwise is is 1:00:11 1 hour, 11 seconds more uh what should I say B2B in nature but these these materials are B2C sometimes are also sold on the basis of brand 1:00:19 1 hour, 19 seconds so is there also some private label opportunity here versus some of the other materials I mean the opportunity is always there 1:00:27 1 hour, 27 seconds was always there with respect to the key raw materials as well uh you know it is going from our own manufacturing plants our our partners so technically these are private labels it's just that you cannot package uh uh stones or concrete. 1:00:38 1 hour, 38 seconds uh the point with other materials where there is a private label opportunity uh as a man as the management we we don't 1:00:46 1 hour, 46 seconds really focus on private labels but actually the benefits that can be derived by having a private label brand and as long as we are able to achieve 1:00:53 1 hour, 53 seconds that you know we don't really focus too much on uh establishing a category uh we have realized that there are different 1:01:00 1 hour, 1 minute contractors and developers in India who are not really brand uh they're actually brand agnostic they're not actually particular about getting a a particular 1:01:08 1 hour, 1 minute, 8 seconds brand. So there are different kinds of customers available uh in India. It's not necessary to have a brand. In fact, our platform actually has all the brands 1:01:15 1 hour, 1 minute, 15 seconds that are available in the market. So we will be brand agnostic with respect to that. And uh if there is an opportunity in the future, we will kind of look to enter as well. 1:01:28 1 hour, 1 minute, 28 seconds Understood sir. Thank you. Uh just my last question on the tech part. I think you were also alluding to how we are using you know technology in this 1:01:36 1 hour, 1 minute, 36 seconds sector. Can you you know give a broad picture of you know this is basically uh similar to a trading business where you 1:01:44 1 hour, 1 minute, 44 seconds know you have infused a lot of tech and kind of driving value. So uh I mean tech today has become in some ways commodity 1:01:52 1 hour, 1 minute, 52 seconds with AI and all that someone people can build their own tech. So I just wanted to understand is this really a defensive kind of mode when we say that we are 1:02:00 1 hour, 2 minutes using tech in our operations and billing systems have become automated and you know there can be various layers to it but just wanted to understand this in more detail. 1:02:09 1 hour, 2 minutes, 9 seconds Yeah I think uh to be honest technology is something that you know uh is experienced more uh you know much better than explained but I'll try to explain 1:02:17 1 hour, 2 minutes, 17 seconds it with an example. If you look at our business or any B2B business in India with respect to construction materials and when there are 800 900 deliveries 1:02:25 1 hour, 2 minutes, 25 seconds happening on a daily basis uh from hundreds of manufacturing facilities to hundreds of customers and that in different regions with different prices for each delivery cost price, sales 1:02:33 1 hour, 2 minutes, 33 seconds price, commercial terms, dynamic terms and when you have to close deals with vendors on a daily basis uh dynamic terms uh manage the credit of customers 1:02:43 1 hour, 2 minutes, 43 seconds uh 700 actively that we are managing on a quarterly basis today. All of this becomes uh more of an operational issue 1:02:50 1 hour, 2 minutes, 50 seconds uh a scalable issue if you are running uh operations manually with technology at play. Uh all of this becomes 1:02:58 1 hour, 2 minutes, 58 seconds available at your fingertips uh you know real time and when you have more data available when you uh are able to manage such a complex business operation 1:03:06 1 hour, 3 minutes, 6 seconds through technology scalability is much more faster and much more efficient. So it's not really in terms of uh you know 1:03:14 1 hour, 3 minutes, 14 seconds technology when you compare us to any other company in terms of demand generation but it is really from operations perspective and if you look at our scale and if you look at our 1:03:22 1 hour, 3 minutes, 22 seconds costs uh you know the operating leverage is already visible and we expect this to improve even further uh you know when we go in the next two to three years. 1:03:34 1 hour, 3 minutes, 34 seconds Got it sir. Got it. Thank you so much for your time. Thanks. Thank you. 1:03:39 1 hour, 3 minutes, 39 seconds Thank you. Ladies and gentlemen, we will take that as the last question for today. I would now like to hand the conference over to the management for closing comments. 1:03:51 1 hour, 3 minutes, 51 seconds Uh thank you guys so much uh for joining the call and uh I hope we have answered all your questions well and uh you know 1:03:59 1 hour, 3 minutes, 59 seconds hope really looking forward forward to you guys becoming a part of the journey. 1:04:04 1 hour, 4 minutes, 4 seconds Thank you so much and thank you everyone. 1:04:08 1 hour, 4 minutes, 8 seconds Thank you very much on behalf of Ferris Infra Solutions Limited. That concludes this conference. Thank you all for joining us today and you may now disconnect your line.