Avalon Technologies Ltd — Q4 FY26

Avalon Technologies Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=-e-9wmaNDFg Published: 6 days ago

0:00 Ladies and gentlemen, good day and welcome to the Avalon Technologies Limited 4Q FY26 earnings conference call 0:09 9 seconds hosted by Motil Oswell Financial Services Limited. 0:13 13 seconds As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. 0:24 24 seconds Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that 0:33 33 seconds this conference is being recorded. I now hand the conference over to Mr. Sumant Kumar from Motil OSAL Financial Services Limited. Thank you and over to you sir. 0:44 44 seconds Yeah, good afternoon everyone and warm welcome to Avalon technology 4Q to FY26 0:51 51 seconds post result earning call hosted by Motil financial services to take us through the result today we have with us from 0:59 59 seconds the management Mr. Kulamad Misha chair managing director Mr. Sures we have chief financial officer Mr. Sam Vijay Vijay Rahan chief operating officer Mr. 1:11 1 minute, 11 seconds Winky Wink is chief sales officer. Mr. 1:14 1 minute, 14 seconds Vicha will uh give an overview of the com uh business performance and will followed up by by Mr. Sur remarks on 1:23 1 minute, 23 seconds financial performance post which will open the floor for Q&A. As we move forward, it is important to bear in mind 1:31 1 minute, 31 seconds that any forward-looking statement made during this call are subject to potential risk and uncertaintities 1:38 1 minute, 38 seconds both known and unknown. Now without any further delay I will hand over the floor to Mr. Bisha for the initial remarks the CMD. Thank you and over to you sir. 1:51 1 minute, 51 seconds Thank you Suman. 1:53 1 minute, 53 seconds Good afternoon ladies and gentlemen. On behalf of Avon Technologies a very warm welcome to our Q4 and fully FY26 2:02 2 minutes, 2 seconds earnings call. I want to begin by thanking our investors for your continued trust and support. Your confidence in us has been instrumental 2:11 2 minutes, 11 seconds in in enabling us to execute consistently, invest with discipline, and build a business that is both resilient and scalable. 2:23 2 minutes, 23 seconds FI26 has been our best year and Q4 is our seventh consecutive quarter of 2:32 2 minutes, 32 seconds growth. But what stands out is not just the growth rate. It is the quality of it. Profitable, broad-based, and 2:40 2 minutes, 40 seconds consistent across verticals and geographies. We delivered a 46% revenue growth for the full year, higher 2:49 2 minutes, 49 seconds than our 40% guidance. On networking capital, we reported 112 days, better 2:56 2 minutes, 56 seconds than our guided range of 120 to 130 days. Our ROC improved to 20.6% 3:05 3 minutes, 5 seconds on revenue, profitability, working capital and ROC. We have delivered improved performance across all the key matrices. 3:17 3 minutes, 17 seconds We have also made steady progress in new product introductions especially on semiconductor manufacturing equipment 3:23 3 minutes, 23 seconds and power systems. All three of our growth engines are gaining momentum together and that is the foundation of our journey forward. 3:35 3 minutes, 35 seconds Moving to the financial highlights for Q4 FI26 revenue came in at 3:44 3 minutes, 44 seconds rupees 480 crores. Gross margin was at 33.7%. 3:50 3 minutes, 50 seconds Our guided range within our guided range of 33 to 35%. 3:56 3 minutes, 56 seconds IDA margins came in at 11.8% up from 11.5% in Q3. 4:04 4 minutes, 4 seconds Operating leverage is playing out as revenue scaled. PA for the quarter was 41.2 crores. 4:14 4 minutes, 14 seconds For the full year FYI26 revenue was at rupes 1,603 4:20 4 minutes, 20 seconds crores up 46% year on year. Gross margin for the year was 34.3% at the upper end of our guided range. 4:32 4 minutes, 32 seconds Fulier AITA margin was at 10.8% fular pack was rupees 4:38 4 minutes, 38 seconds 113 crores. Ras revenue growth over the last seven quarters has been 45%. 4:49 4 minutes, 49 seconds As of March 31st, 2026, our order book grew 24.7% yearonear 4:56 4 minutes, 56 seconds to rupees 2,196 crores with an average execution period of 14 months. In 5:03 5 minutes, 3 seconds addition, long-term contracts with execution timelines ranging from 15 to 36 months is at 1,245 crores. 5:14 5 minutes, 14 seconds Autobook growth remains well diver diversified across industry verticles and geographies. 5:24 5 minutes, 24 seconds India manufacturing operations which continue to serve both domestic and global customers accord accounted for 5:31 5 minutes, 31 seconds 77% of our revenue in Q4 FI26 delivering healthy profitability at an 5:38 5 minutes, 38 seconds EITA margin of 16.7% and a fat margin of 12.2%. 5:45 5 minutes, 45 seconds Revenue from our US operations contributed the remaining 23%. 5:51 5 minutes, 51 seconds Losses in US manufacturing have continued to narrow coming in at approximately 5 crores in Q5 FI26. We 6:00 6 minutes are working towards a break break even in US manufacturing in the later part of FI27. 6:07 6 minutes, 7 seconds Our presence in both India and US gives customers the option to start in the US and later transition to India or come directly to India. 6:18 6 minutes, 18 seconds In FY26, revenue mix was 38% from India and 62% from US. India 6:26 6 minutes, 26 seconds business grew 29% yearonear while the US business grew 59% yearonear. Moving to 6:33 6 minutes, 33 seconds segment wise contributions, industri contributed approximately 34% of our revenue growing at 65% yearonear. 6:46 6 minutes, 46 seconds Mobility contributed 28% growing at 50% yearonear. Within 6:53 6 minutes, 53 seconds mobility within mobility vertical rail accounted for 16% and aerospace for 9%. 7:02 7 minutes, 2 seconds Clean energy stood at 20% growing at 45% yearon year driven by driven by the ramp up of our energy storage systems. 7:12 7 minutes, 12 seconds Communication contributed 8% growing 58% yearonear. 7:19 7 minutes, 19 seconds Our mantra to focus on missionritical complex box builds continue to gain traction. Box build has increased from 7:29 7 minutes, 29 seconds 44% 4 years ago to 56% in Q4 FI26. This highlights the deep integration we have 7:37 7 minutes, 37 seconds with our customers and drives stickiness and long-term potential. 7:45 7 minutes, 45 seconds Networking capital continued to improve through the year. On a year on year-on-year basis, net working capital 7:52 7 minutes, 52 seconds improved by 12 days from 124 days in March 2025 to 112 days in March 2026. 8:01 8 minutes, 1 second Receivables reduced by approximately 12 days yearon year. Inventory improved by 2 days as programs moved into execution 8:09 8 minutes, 9 seconds phase. Payable days reduced by approximately two days year on year. 8:14 8 minutes, 14 seconds Overall, the improvement in networking capital delivered a positive cash flow 8:20 8 minutes, 20 seconds from operations of 57 crores in FI20 FI26. 8:27 8 minutes, 27 seconds We continue to follow a capex life model. Asset returns are approximately 9.9 times. 8:36 8 minutes, 36 seconds Net debt to equity ratio is around. 06. 8:42 8 minutes, 42 seconds Return on capital employed stands at 20.6%. 8:46 8 minutes, 46 seconds A meaningful improvement from 10% 2 years ago. 8:53 8 minutes, 53 seconds Now looking at the macro environment, it continues to stay positive. 8:58 8 minutes, 58 seconds The reduction in US status on Indian good goods makes India manufacturing for customers more competitive and we are seeing increased engagement as a result. 9:08 9 minutes, 8 seconds Importantly the period of elevated tariffs also helped us accelerate new set of business opportunities. 9:16 9 minutes, 16 seconds We added new programs in the US as customers look to diversify their supply chains and reduce risk. This is over and 9:24 9 minutes, 24 seconds above the winds in the India domestic business. 9:28 9 minutes, 28 seconds We have also made progress in expanding exports into Southeast Asia, 9:36 9 minutes, 36 seconds further broadening our geographic footprint. The the government's focus on semiconductor equipment under ISM 2.0 9:44 9 minutes, 44 seconds aligns well with our capabilities and business we have recently won in this space. Our efforts to build a 9:51 9 minutes, 51 seconds meaningful sales presence in Europe over the last few quarters also coincide with the India Europe trade deal. Taken 9:59 9 minutes, 59 seconds together, domestic demand, US export opportunity and new geographies. This the structural tailwinds are intact. 10:11 10 minutes, 11 seconds Now moving to our key growth drivers. 10:14 10 minutes, 14 seconds Our existing business continues to provide a strong steady foundation, long product life cycles, mission critical 10:21 10 minutes, 21 seconds programs and recurring revenues across rail, aerospace, industrial, clean energy and communications. 10:30 10 minutes, 30 seconds On new business wins, the programs we have been building over over the last two to three years are now progressing well. Our energy storage system program continues to ramp in line with plan. 10:43 10 minutes, 43 seconds Aerospace cabin sub assemblies have progressed fast particle inspection and the ammo towards volume. Production of 10:51 10 minutes, 51 seconds loco motorive engine subsystems has commenced. The kavage anti-colision system has completed testing and is on 10:59 10 minutes, 59 seconds track for commercial production. In semiconductor equipment we have completed the project readiness phase 11:06 11 minutes, 6 seconds with our global partner. A meaningful milestone ahead of volume production expected in FI27. 11:14 11 minutes, 14 seconds For our satellite communication customer, we have successfully completed the first branch of prototypes for control units and expect volume models from FI27. 11:26 11 minutes, 26 seconds Prototypes for industrial processing and power sector customers have also commenced. 11:32 11 minutes, 32 seconds Three, on our opportunity pipeline, we continue to see healthy and expanding set of opportunities. We are seeing 11:40 11 minutes, 40 seconds increased interest from aerospace majors in various commodities. 11:44 11 minutes, 44 seconds We are also pursuing opportunities in advanced metal cockpit assemblies and landing gear components, areas where we have not previously participated. 11:55 11 minutes, 55 seconds The three large US customers we onboarded last quarter across industrial and defense are progressing from 12:02 12 minutes, 2 seconds prototype towards production. And as mentioned earlier, Southeast Asia and Europe adding new dimensions to our geographic reach. 12:12 12 minutes, 12 seconds Taken together, all three growth engines are gaining momentum and we expect this to increasingly reflect in our numbers through FI27 and beyond. 12:26 12 minutes, 26 seconds On revenue guidance, we had previously committed to doubling revenues from FY24 12:32 12 minutes, 32 seconds to FI27, a target of approximately 1,725 crores. 12:39 12 minutes, 39 seconds We are almost there, a year ahead. That gives us confidence to set our sights on further doubling in the next 3 years. 12:47 12 minutes, 47 seconds That is from the higher base of 1,603 crores in FI26 to approximately 3,200 crores in FI29. 12:59 12 minutes, 59 seconds The order book is healthy. New programs are entering production and our customer base continues to expand. The foundation 13:08 13 minutes, 8 seconds for the next doubling is already in place and from a multi-year perspective, we are confident of our growth. 13:16 13 minutes, 16 seconds On FI 27, we believe our growth story will sustain and continue. We always 13:23 13 minutes, 23 seconds seek to be conservative and hence guiding for a revenue growth of 24 to 27%. 13:30 13 minutes, 30 seconds In summary, FY26 has been a defining year for Avalon. Strong revenues, improved profitability, better margins, 13:39 13 minutes, 39 seconds a stronger balance sheet, and better capital efficiency all delivered together. Our order book is healthy. Our 13:47 13 minutes, 47 seconds three growth engines are aligned and the external environment remains supportive. 13:53 13 minutes, 53 seconds We enter FI27 with clear visibility, a strong pipeline and the confidence that 13:59 13 minutes, 59 seconds comes from consistent execution over seven consecutive quarters. With this I 14:06 14 minutes, 6 seconds will hand over to our CFO Suresh Viran for a detailed overview of our financial 14:12 14 minutes, 12 seconds performance. So let's thank you KB. Good afternoon everyone. 14:19 14 minutes, 19 seconds Let me take you through the financials in detail. 14:22 14 minutes, 22 seconds Revenue for Q4 FI26 was rupes 480 crores up 40% year-on-year from rupes 343 14:30 14 minutes, 30 seconds crores in Q4 FI25 and up 14.9% sequentially from rupes 418 crores in Q3 FI26. 14:39 14 minutes, 39 seconds For the fullear year FI26 revenues were at rupees 1,603 crores reflecting 46% growth yearon year ahead of our guided range of 40%. 14:50 14 minutes, 50 seconds Gross margin for Q4 FI26 was rupes 162 crores at a margin of 33.7%. 14:56 14 minutes, 56 seconds For the full year gross margin was rupes 550 crores at 34.3%. 15:01 15 minutes, 1 second At the upper end of a graded range of 33 to 35%. 15:06 15 minutes, 6 seconds I would like to note that during the period of elevated tariffs we pass on substantially all of the tariff impact to customers. So absolute gross margins 15:14 15 minutes, 14 seconds were not affected. However, since both revenue and cost were grosser by the tariff pass through gross margin percentage was optically impacted by approximately 110 basis points. 15:27 15 minutes, 27 seconds Adjusting for this our underlying gross margin performance was better than the reported percentage suggest. 15:34 15 minutes, 34 seconds AIDA for Q4 FI26 was to be 57 crores up 37.5% yearonear with a margin of 11.8%. 15:42 15 minutes, 42 seconds Up from 11.5% in Q3 FI26. For the full year, EIDA was rupees 173 crores at a margin of 10.8%. 15:51 15 minutes, 51 seconds Reflecting year-on-year growth of 15.9%. 15:55 15 minutes, 55 seconds The sequential margin improvement reflects operating leverage as revenues scale. 16:02 16 minutes, 2 seconds PAT for Q4 FI26 was rupees 41 crores up 69.5% yearonear with a margin of 8.4%. 16:11 16 minutes, 11 seconds For the full year pack was rupes 113 crores reflecting year-on-year growth of 78% and a margin of 6.9%. 16:20 16 minutes, 20 seconds Finance cost for the year were rupes 15 crores and depreciation was rupes 34 crores. 16:26 16 minutes, 26 seconds On working capital, trade receivable days improved from 84 days to 72 days yearon year. Inventory days improved 16:33 16 minutes, 33 seconds from 86 86 days to 84 days as programs move into execution phase. 16:39 16 minutes, 39 seconds Trade payable days moved from 46 days to 45 days. Overall networking capital improved by 12 days yearon year to 12 16:46 16 minutes, 46 seconds days in March 2026, better than our guided range of 120 to 130 days. On a sequential basis, 16:53 16 minutes, 53 seconds networking capital improved by six days from 118 days in December 2025, supported by improvement in inventory. 17:01 17 minutes, 1 second The subchained improvement in working capital supported cash flow from operations of rupes 57 crores in FI26 compared to rups 25 crores in FI25. 17:12 17 minutes, 12 seconds As of March 31, 2026, total debt was rupes 183 crores with cash and investments of rupes 143 crores 17:21 17 minutes, 21 seconds resulting in a net debt of rupes 40 crores. Net debt to equity ratio stands at 0.06. 17:28 17 minutes, 28 seconds A very comfortable position. 17:31 17 minutes, 31 seconds Capex for Q4 fi26 was rup 21 crores and rup 56 crores for the full year. Asset 17:38 17 minutes, 38 seconds turns are at 9.9 times and return on capital employed improved to 20.6% from 15.7% a year ago. A consistent and meaningful improvement. 17:51 17 minutes, 51 seconds As Katie mentioned, we doubled our revenues ahead of schedule. 17:56 17 minutes, 56 seconds We are now committed to doubling again from the higher base of Rs,63 crores in FI26 to approximately rupes 3,200 crores by FI29. 18:07 18 minutes, 7 seconds The balance sheet is clean, working capital is improving and operating leverage is playing out. The financial foundation for that journey is firmly in 18:15 18 minutes, 15 seconds place. With that, I request the moderator to open the floor for questions. Thank you. 18:22 18 minutes, 22 seconds 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 the touchstone for telephone. 18:33 18 minutes, 33 seconds If you wish to remove yourself from the question queue, you may press star and two. 18:39 18 minutes, 39 seconds Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. 18:59 18 minutes, 59 seconds The first question comes from the line of Tan Sha from Dam Capital. Please go ahead. 19:06 19 minutes, 6 seconds Um, hi sir, good afternoon. Um, and congratulations on an amazing set of numbers. Um, I think we've truly seen uh 19:13 19 minutes, 13 seconds all our efforts translating into uh the growth which we've delivered. Uh so uh my first question is on you know any 19:21 19 minutes, 21 seconds potential supply chain disruptions with respect to uh components. I mean order books are strong and you know we're seeing healthy growth coming into the 19:29 19 minutes, 29 seconds quarters but any sort of supply chain disruption which we're seeing sam you want to answer that 19:38 19 minutes, 38 seconds yeah sure hi um right now I mean there are a few things here and there but nothing that's uh uh adversely affecting 19:46 19 minutes, 46 seconds us as you know you know we service mostly industrial mobility and clean sectors uh for these uh you know at the moment uh visibility is okay. 19:57 19 minutes, 57 seconds All right. So, don't expect any major pressure on margins or anything of that sort given the supply chain uh problems. Yeah. 20:04 20 minutes, 4 seconds As we see it now, we don't see any you know any effect. 20:09 20 minutes, 9 seconds Okay. Um saying that uh what I would say is we saw the tariffs which was the question of last year right we managed 20:17 20 minutes, 17 seconds to do that. So I think our gross margins will hold between the range we have specified. 20:23 20 minutes, 23 seconds Sure. Sure. So my second question is you know in all the incremental growth drivers which we spoke about across uh you know sectors could we possibly you 20:32 20 minutes, 32 seconds know speak a little more about them in detail as to what are we trying to do out there? I mean uh just a little more on the product specification if you 20:40 20 minutes, 40 seconds could and the potential size uh which it can deliver for us into our revenues going forward. 20:49 20 minutes, 49 seconds So T uh let I'll give you the verticals are growth right so you know industrial is a 34% of our business it's grew at 65 20:59 20 minutes, 59 seconds and it will continue high growth rate uh mobility is at you know 28% of our sales 21:07 21 minutes, 7 seconds it's growing at 45 you know clean energy is at 20% growing at 45 again uh so you're going to see a broadbased growth 21:15 21 minutes, 15 seconds it's not lumpy because you our business a lot of it is once a business comes in it sustains for the next 5 10 years uh 21:23 21 minutes, 23 seconds it's not which uh comes and goes and products don't change over a period of time so once it comes into production uh 21:31 21 minutes, 31 seconds it normally stays and these are larger uh fortune 100 type companies who are working with us so I don't u see too 21:40 21 minutes, 40 seconds much of a lumpy sales once it comes in it's going to stay understood sir and so my last question is on the US manufacturing uh obviously 21:49 21 minutes, 49 seconds it's uh instarter basis uh due to the tariffs but what do we expect it as a percentage of sales 21:57 21 minutes, 57 seconds going forward should it be at around this 20 22% or should it logically inch up a little higher with the US execution happening with our customer out there 22:05 22 minutes, 5 seconds and if so then uh the control on uh you know margins out there and how do we expect to break even and how soon would 22:12 22 minutes, 12 seconds that be thank you so I'll I'll talk about the first uh first part of your question and Suresh will talk over the second part. So 22:21 22 minutes, 21 seconds you're seeing growth from outside you know close to you know 77 to 80% is made in India for India uh and for export and 22:30 22 minutes, 30 seconds that is our focus okay how we get customers into this model is why the US um factory that is the primary reason 22:39 22 minutes, 39 seconds the secondary reason you know during the tariff times and all that uh it was easier to onboard customers in the US 22:46 22 minutes, 46 seconds and then give them time to transfer to India so We anticipate this uh you know 22:53 22 minutes, 53 seconds 80 20 78 22 you know that kind of range and that is what is in our planning. The more that comes to for India 23:01 23 minutes, 1 second manufacturers better off we are but this is something which we need for for our future as well as the confidence from customers uh on having local support. 23:12 23 minutes, 12 seconds Sur you want to answer the second part? 23:14 23 minutes, 14 seconds Just to add that uh uh in FA 26 79% of our business is from India manufacturing and 21% is from US manufacturing. So it 23:23 23 minutes, 23 seconds has been around this range of uh let's say 19 to 23% which is what we have been discussing in the earlier calls and the 23:32 23 minutes, 32 seconds and the operating leverage benefits are expected both from our India manufacturing as well as from our US manufacturing plants. So so that's the way forward we are looking at. 23:44 23 minutes, 44 seconds All right. Thank you. Thank you so much for answering my questions and all the best. Thank you. Thank you. 23:52 23 minutes, 52 seconds Thank you. Our next question comes from the line of Adira Singh from Amicus Capital Partners. Please go ahead. 24:00 24 minutes Uh so firstly uh congratulations on a good set of numbers. Uh I just had a couple of questions. Um first when we uh 24:09 24 minutes, 9 seconds look at the growth so we've grown by 46% this year we have added about 500 cr of revenue this year. So how much of this 24:18 24 minutes, 18 seconds additional revenue or growth is coming from new customers programs essentially programs customers that you would have 24:25 24 minutes, 25 seconds onboarded one and a half to two years back and how much would it how much of the growth would be from vintage program and customers. 24:36 24 minutes, 36 seconds So it's very broad-based and depending on the size of uh the customer cut in it could vary anywhere from 75 85%. 24:45 24 minutes, 45 seconds 2/3 one/3 is what you probably need to look at but it varies you may have a certain much larger customer cut and that varies a little bit but uh the next 24:54 24 minutes, 54 seconds year they become you know existing customers right so it's and we are developing and managing these programs 25:01 25 minutes, 1 second uh into production at least 18 months ahead u so uh so that gives you a broad 25:08 25 minutes, 8 seconds range on what what we think it is just to add to that uh I mean so typically The average life cycle of a 25:15 25 minutes, 15 seconds customer with this is very long. The product life cycle is also long. Uh so uh a customer who is this year and new 25:23 25 minutes, 23 seconds will become an existing customer when they continue for a for over a period of 8 to 10 years. 25:30 25 minutes, 30 seconds No uh fair bet that I uh understand I mean I just wanted to understand in this 500 K how much would be coming in from 25:37 25 minutes, 37 seconds let's say programs that you would have started one one and a half years back and how much uh from the vintage 25:44 25 minutes, 44 seconds programs out of 570 will be existing and then 30 will approximately okay 25:53 25 minutes, 53 seconds okay understood and uh second question sir uh a number of your peers are getting into you know components 25:59 25 minutes, 59 seconds manufacturing like ECB manufacturing and have gotten uh ECMS scheme for that. Uh do you have any plans to get into components manufacturing? 26:11 26 minutes, 11 seconds So we are very focused on what we do. So we are a box build high-end box complicated technology oriented box. We 26:19 26 minutes, 19 seconds will look look for further business in that segment instead of trying to do a 26:26 26 minutes, 26 seconds green field. though there's lot of um money available for that we think there's enough growth in what we do managing growth is uh is what we strive 26:36 26 minutes, 36 seconds on doing uh and I think um instead of going in multiple directions we like to 26:41 26 minutes, 41 seconds stay focused and deliver on what we say uh sure sir thank you so much and all the best 26:51 26 minutes, 51 seconds thank you thank you thank you our next question comes from the line of Santos Sad Adri with Aendis Spark. Please go ahead. 27:04 27 minutes, 4 seconds Yeah, good afternoon. Uh, thanks for taking up my question. Uh, so basically uh, could you uh, request uh, 27:11 27 minutes, 11 seconds sorry to interrupt you, sir, Mrs. Anto, in case you're using the speaker mode, may I request that you use your handset mode, please? So, your audio is not very clear, sir. Thank you. 27:24 27 minutes, 24 seconds It sounds better. 27:27 27 minutes, 27 seconds Yeah. Uh my my first question is on the quarterly revenue project uh across uh 27:34 27 minutes, 34 seconds you know different verticals uh maybe specifically for the clean energy as well. uh given that uh the US business 27:40 27 minutes, 40 seconds is ramping up uh and there is a usual uh one two seasonality that we have observed historically uh you know how 27:48 27 minutes, 48 seconds how should we think about the dynamics quarterly dynamics uh and also if you could uh give some color on the uh cadence for other divisions as well uh that would be helpful. 27:59 27 minutes, 59 seconds So for us uh that doesn't play out as much. Okay. So we tried to level load a 28:08 28 minutes, 8 seconds production across uh you know customers tend to do that instead of um you know because only certain businesses you know 28:16 28 minutes, 16 seconds which are government oriented could have this issue but um we have not seen that as much. So if you look at uh quarter to 28:24 28 minutes, 24 seconds quarter it's been fairly consistent whether it's growth or whether it is you know um uh and in clean energy we going 28:32 28 minutes, 32 seconds to see growth okay as we as for for the near future or foreseeable future. So it's not it's not seasonal for us as far as we know. 28:42 28 minutes, 42 seconds Got it. And and just to be clear, our first quarter FI or maybe like first off FI 27 uh revenue could be sequentially uh higher than uh last year, right? 28:55 28 minutes, 55 seconds So we uh Santo Suria we would uh request you to look at us from a three-year perspective in the 29:03 29 minutes, 3 seconds opening remarks you would have highlighted that uh from a higher base of,000 crores in Fi 26 we are looking to double it in FI 29. Um and we generally 29:12 29 minutes, 12 seconds do not give a partly revenue growth guidance. Saying that we are very confident. 29:18 29 minutes, 18 seconds Fair enough. And just one more question uh and given our given our aspiration uh to double uh revenues over uh over the 29:27 29 minutes, 27 seconds next uh few years uh and uh considering that our uh you know asset turns are already closer to 10 times. uh how 29:36 29 minutes, 36 seconds should we think about the incremental capex and also about the timing of capex uh you know in capacity expansion. 29:48 29 minutes, 48 seconds So it's at least for me it's not as traditional they're going to do that. 29:54 29 minutes, 54 seconds Okay. The uh doubling. Okay. So, uh saying that uh see when we started talking of doubling in 24, we're 30:03 30 minutes, 3 seconds supposed to double uh by 27 and we are close to you know one year ahead of that schedule. You know, we're close to 30:11 30 minutes, 11 seconds doubling already. So, we'll continue the same momentum. There may be a few quarters up or down. But if you look at us in a threeear time frame, we will do 30:19 30 minutes, 19 seconds what uh what needs to be there uh to do that. Okay. Uh did I answer the question or is the last part capex perspective? 30:25 30 minutes, 25 seconds From a capex perspective as far as we know we'll continue our aspiration is to keep the ROC higher than 20 and keep the 30:34 30 minutes, 34 seconds set terms between 8 and 10 10 times and we still believe that you know with this capex as far as we know today we are 30:43 30 minutes, 43 seconds going to uh have that for this rate of growth. 30:48 30 minutes, 48 seconds uh a and uh any particular timeline that uh we are contemplating to uh spend this capex 30:57 30 minutes, 57 seconds usually uh we say 50 to 60 crores maybe a little bit over over the next next year I mean that's annually yeah 31:04 31 minutes, 4 seconds so some in fi 25 our capex was 58 crores in fi 26 our capex is 56 crores uh and 31:12 31 minutes, 12 seconds so for us to continue this uh trajectory of growth uh we did not foresee any major has major capex but it's something 31:20 31 minutes, 20 seconds uh nothing in the near term that we can hit. Thank you very much. Thank you. 31:30 31 minutes, 30 seconds The next question comes from the line of Mayul Pandani from 40 cents. Please go ahead. 31:38 31 minutes, 38 seconds Hello sir. Thank you so much for the opportunity. Am I audible? Yes, you're perfectly. 31:45 31 minutes, 45 seconds Okay. Thank you so much. Uh I my first question is about uh how much of a future outbook work uh can we expect 31:54 31 minutes, 54 seconds from the box build and system integration opportunities versus the traditional PCB assembly. 32:02 32 minutes, 2 seconds So if you historically look at it around 3 years back we are on 44% uh of box still and uh our aspiration is to grow 32:10 32 minutes, 10 seconds that number and today last quarter we are at 56 56%. 32:14 32 minutes, 14 seconds Uh so we'll continue that trajectory and for us that's that's why we are very vertically integrated to achieve that. 32:21 32 minutes, 21 seconds Okay. So we'll continue on that and uh that is our goal you know we may start with a certain commodity but our goal is 32:28 32 minutes, 28 seconds to do the whole box uh uh in a two to three year period with a customer. 32:34 32 minutes, 34 seconds And sir, what kind of margin difference uh is the how much high margin can we command for box compared to the traditional? 32:43 32 minutes, 43 seconds Usually it's higher because it's vertically integrated. So I don't want to get into how much okay because uh uh that depends on industry that depends on 32:51 32 minutes, 51 seconds vertical that depends on commodity. If you you know more of a certain commodity you you'll have a better margin. So ultimately we look at it as a box. 33:02 33 minutes, 2 seconds Right. Right. Uh I'm not sure if I you have answered this one but uh my question is about uh what is our margin aspiration? Uh currently our margin 33:11 33 minutes, 11 seconds stand at 11%. Uh so do we have any operational levers to improve our margin uh beyond 11%. 33:20 33 minutes, 20 seconds So if you look at our 80% of a business which is uh India manufacturing is at 16 16.7 and Pat is at 12.2%. Okay. 33:33 33 minutes, 33 seconds So, we're already high up there in 80% of our business this quarter. I think it's 77% of our business. So, so okay. 33:40 33 minutes, 40 seconds And then uh with uh US break even and with um uh with the leverage playing out 33:47 33 minutes, 47 seconds there after break even we see uh some room to improve. 33:52 33 minutes, 52 seconds Right. Are we expecting any capex in so regular capex has been in the last 34:02 34 minutes, 2 seconds two years in the range of 55 to 50 crores. So we see something similar there. Uh nothing major at the moment. 34:10 34 minutes, 10 seconds Okay. Thank you very much sir. Thank you ma'am. 34:15 34 minutes, 15 seconds Thank you. The next question comes from the line of Samit SA with McQuary. Please go ahead. 34:23 34 minutes, 23 seconds Yes, thank you very much and I echo some of the sentiments. It's been a really really strong year and great institution. Uh I guess my first 34:31 34 minutes, 31 seconds question would be in terms of your guidance for next year. Um I know last year you started at 18 to 20% year-over-year growth and you ended the 34:38 34 minutes, 38 seconds year uh at 46%. So that's been tremendous. Uh should we assume a certain degree of conservatism guidance 34:46 34 minutes, 46 seconds for the guidance that you've given for fiscal 27? uh you know the geopolitical situation is still uh is pretty 34:53 34 minutes, 53 seconds fragmented right now. So just wanted to get some color on that. Second question is uh in terms of your make in India for 35:02 35 minutes, 2 seconds India that revenue growth uh slowed to about 13% year-over-year is that basically um because of a high base uh I have a follow-up question after that. 35:16 35 minutes, 16 seconds Okay, on your first question uh summit uh you ask a question every time which 35:24 35 minutes, 24 seconds so um so we are generally conservative in nature with the um with the things uh going around in the world every time we 35:32 35 minutes, 32 seconds want to commit uh higher we we just uh with the macroeconomics we want to be conservative. Uh number two is that you 35:41 35 minutes, 41 seconds know the programs cutting in are fairly large in size. it could cut in this quarter or a quarter from now which we don't control as much our customer does. 35:50 35 minutes, 50 seconds So ultimately it's all there it's when it cuts in and how it cuts in at what time frame right. So that's the conservative nature on what you're 35:58 35 minutes, 58 seconds saying apart from the macroeconomics and in terms of the percentages that you mentioned summit uh if you look at FI26 36:07 36 minutes, 7 seconds then the India manufacturing business grew by approximately 33%. So the growth has been broad-based across uh industry 36:15 36 minutes, 15 seconds vertical across geography across manufacturing location as well. Got it. 36:19 36 minutes, 19 seconds One my final question from my side and this is uh you know real inflection that I saw in uh your free your final generative free cash flow right which I 36:28 36 minutes, 28 seconds define as cash flow from operations minus capex. uh is that something of a goal that you want to continue to uh you 36:37 36 minutes, 37 seconds know stay in the positive territory with that metric? 36:42 36 minutes, 42 seconds See we always and I'll let Sur get into detail of it but from our perspective we always want to maintain the ROC there's 36:50 36 minutes, 50 seconds a number we strive for okay the asset turns we strive for okay and uh the unless you know we do this this business 36:59 36 minutes, 59 seconds I think we can manage that between eight and 10 times turn that play in mind that's what is drilled into 37:06 37 minutes, 6 seconds all of us uh we try to go with that okay and a lot of times most of this capex is going for building an infrastructure. 37:16 37 minutes, 16 seconds Just to add two points there couple of years ago in FI24 our ROC was 10%. And then uh right now it is at 20.6%. 37:26 37 minutes, 26 seconds And the second aspect on the operation cash flows FI25 operation cash flows was 25 crores and now we are at 57 crores. 37:33 37 minutes, 33 seconds So uh both the working capital improvement the focus on working capital improvement and the focus on maintaining a high asset turn are helping us get 37:42 37 minutes, 42 seconds those uh operational cash flows and maintain and improve the ROC. 37:48 37 minutes, 48 seconds Sure. So if if I can just add on to that one. So when you double your revenues uh you know from this year onwards what is 37:56 37 minutes, 56 seconds the expected ROC at that point? What's your goal? 38:01 38 minutes, 1 second So I would put it this way. In the past we have operated at 25%. 38:05 38 minutes, 5 seconds So uh I would say if there is a target for us to match over a period of time that that should be some good. 38:13 38 minutes, 13 seconds Got it. Thank you very much. Congratulations. Thank you. Thank you. 38:19 38 minutes, 19 seconds Thank you. The next question comes from the line of Karan from Nvashai. Please go ahead. 38:28 38 minutes, 28 seconds Yeah. Thank you for the opportunity. Uh so uh congratulation on good set of number. Uh I have a few questions uh 38:37 38 minutes, 37 seconds regarding the semiconductor uh business that we have on boarded. So uh if you could you know help us understand uh how 38:45 38 minutes, 45 seconds are we you know if you can uh uh you know quantitatively state how how is 38:51 38 minutes, 51 seconds this uh program expected to ramp up and uh you know what kind of uh 38:59 38 minutes, 59 seconds competition are we doing it against and what kind of products we would be catering to in this segment. 39:07 39 minutes, 7 seconds Yeah. Hi Karan uh sir here. So uh for the semiconductor equipment, we're building complex uh box builds, right? 39:15 39 minutes, 15 seconds So really state-of-the-art complex builds. Now this is a fairly large program with multiple subprograms, 39:22 39 minutes, 22 seconds right? So these often are very uh complicated to build. The uh first article inspection takes time, approvals 39:31 39 minutes, 31 seconds take time. These are very uh sort of longer jational programs, right? So uh we are in a uh journey of getting these 39:39 39 minutes, 39 seconds approved and uh getting through deployment. Right? So this is a long journey. This is not one that cuts in in weeks and months. Right? It takes uh 39:48 39 minutes, 48 seconds we've been working on this program for a fairly long period of time. So we're on the journey and hopefully in FY27 we will start to reach the benefits of this program. 39:59 39 minutes, 59 seconds Okay. So uh this FIS has been completed now this 1.4 serving products in this it it's in progress. So sir you know you 40:08 40 minutes, 8 seconds have some part numbers that are done some part numbers that are progressing some that we are you know yet to start. 40:13 40 minutes, 13 seconds So the variet it's you've got a spectrum of this uh progress the current multiple products is just not one one product. Yeah. 40:21 40 minutes, 21 seconds So I would say 50 60% is uh done and waiting for production approval. the 40:27 40 minutes, 27 seconds other 30%, we are in in the process of u uh doing it and then we'll get it. So uh 40:35 40 minutes, 35 seconds reasonable production will start sometime in 27. 40:40 40 minutes, 40 seconds Understood. Uh so also what would be the you know the major sector apart from clean energy which will be contributing to our export revenue. 40:52 40 minutes, 52 seconds So a lot of it will be in arrow and industrial if I can answer that. 40:59 40 minutes, 59 seconds The growth is broadly current even across India and in US. It is not just concrete in one industry. It's across 41:06 41 minutes, 6 seconds industrial clean energy and communication. 41:11 41 minutes, 11 seconds And this uh one last question what would be our uh client concentration like what would be the concentration of top five top 10 clients for the full year. 41:23 41 minutes, 23 seconds So I'll let give the u exact numbers but as large customers cut in things you will start uh moving up and down for a 41:31 41 minutes, 31 seconds short period and then it moves on. So that you want to give the so our top 10 customers that's the one that we share it which is 61% and 26 41:42 41 minutes, 42 seconds great uh thank you so much and all your request thank you k thank you for that 41:49 41 minutes, 49 seconds thank you our next question comes from the line of chiak from keynote please go ahead yes uh thank you for the opportunity my 41:58 41 minutes, 58 seconds first question is related to the manufacturing plant of US uh we have almost almost doubled the production 42:06 42 minutes, 6 seconds from the earth now. Just wanted to understand how are we breaking even adds for us. 42:16 42 minutes, 16 seconds Sure. So, so firstly uh we have been discussing about uh increasing the revenues in US manufacturing alongside 42:25 42 minutes, 25 seconds our growth that we are seeing in the Indian manufacturing. So, which is what we are seeing the last one year. The losses have significantly narrowed down. 42:33 42 minutes, 33 seconds If you look at it a couple of years ago, the quarterly losses were around 14 crores and if you look at Q2 of this 42:41 42 minutes, 41 seconds fiscal year, it was 9 crores and Q3 it came down to 7 crores and in Q4 it has again further come down to 5 crores. So 42:48 42 minutes, 48 seconds there is operating leverage that has started to play out. Uh but having said that uh we uh we expect to see ramp up 42:56 42 minutes, 56 seconds of many of the new programs which are at various stages. some in tribe, some in uh commercial, some in painting to uh 43:03 43 minutes, 3 seconds the uh rank of fully. Uh with that uh uh scaleup expected to happen uh in FI27, we see this trend of losses coming down 43:12 43 minutes, 12 seconds and moving towards break uh break even and yet part of FI2. 43:19 43 minutes, 19 seconds But Ch one thing I've realized is that a lot of the customers we enjoy the margins and we enjoy the profitability in India because it came through this u 43:29 43 minutes, 29 seconds this route where it starts in the US and then it moves to India. So it's uh you can't just look at it from a plantwise 43:35 43 minutes, 35 seconds there's a lot of business effectiveness for India doing manufacturing in the US. 43:44 43 minutes, 44 seconds Yeah. Yeah. I understand that was that the earlier assumptions we had uh because shifting our manufacturing 43:50 43 minutes, 50 seconds towards India and now it is like to gain more clients uh we are now again starting to root it from us and down the 43:58 43 minutes, 58 seconds line uh probably we would be giving some cost benefits to the client and that would again shift to India. Is that is that my understanding? 44:07 44 minutes, 7 seconds Correct. S I think you got it right. 44:11 44 minutes, 11 seconds The second question is more related to uh backend journey and the future perspective what you have commented related to uh manufactur 44:19 44 minutes, 19 seconds you're breaking up you're breaking up uh so may I ask you to talk a little louder am I audible now 44:26 44 minutes, 26 seconds no now you're fine yes right so uh so my next question is more related to a backend journey what Avalon had uh so let's say we started 44:35 44 minutes, 35 seconds with manufacturing uh uh and uh main shift EMS and we shifted to box. Uh we thought from the perspective that this 44:43 44 minutes, 43 seconds is a higher integrated complex product and we can serve our client a bit better which will help us to have better return ratios down the line and growth and 44:52 44 minutes, 52 seconds maybe let's say from a product to an component from component to an assembly supply kind of a thought process. This is like a forward integration. Just 45:00 45 minutes wanted to understand h you are remaining focused related to manufacturing box only even if you would have started 45:07 45 minutes, 7 seconds manufacturing PCB at your end. uh have you have you considered this fact that uh this is not going to be value accreative and you want to make sure 45:16 45 minutes, 16 seconds that it remains an outsourced product for you and you don't want to get that publication of manufacturing PCB because this anyhow helps us uh from the 45:24 45 minutes, 24 seconds perspective that uh 90% of the PCB gets imported in India and we are now from the perspective that we can control our value chain and make sure that we keep 45:32 45 minutes, 32 seconds on growing at the pace we are without any hence related to raw material. So just wanted to understand the thought related to this. 45:38 45 minutes, 38 seconds Okay. So as a country uh I is a personal opinion I believe that we need to have PCB manufacturing in India because uh as 45:48 45 minutes, 48 seconds we scale up electronics as we scale up uh being a global player uh how competitive can be without subsidies 45:57 45 minutes, 57 seconds I don't know okay but as a country we do need it see our spend on PCBs is I would 46:04 46 minutes, 4 seconds say less than you know very very small percentage in not even in the teams. So 46:10 46 minutes, 10 seconds it does not make sense for us to look at it as a vertical integration model. 46:15 46 minutes, 15 seconds There enough players coming in now where there'll be enough competition to get the PCB cheaper than what we can make. 46:23 46 minutes, 23 seconds That is our uh thought process on this. 46:26 46 minutes, 26 seconds So down the line it would be correct for me to understand if the manufacturing of PCB starts happening in India itself. 46:32 46 minutes, 32 seconds this can become a gross margin accredit for us because we would be start sourcing it into India and even further margin profitability can take place for everyone. 46:42 46 minutes, 42 seconds So see like I said it's it's you know it's not even in the teens for us uh the PCB buy it's much lower because of our 46:50 46 minutes, 50 seconds vertical integration I don't think it'll be an effective change it it will it will be better but it's not something 46:58 46 minutes, 58 seconds which we will chase okay and uh s you want to add something yeah I think just to add to that right 47:05 47 minutes, 5 seconds the way we're thinking about this is to grow into more complex boxmans in which case you know are you know sort of 47:13 47 minutes, 13 seconds effort is going into more complex assemblies of different things right so there that's where uh you know the focus 47:19 47 minutes, 19 seconds is not on getting into deeper down the value chain in terms of PCB but more up 47:26 47 minutes, 26 seconds into more complex business PCB is a chemical business 47:33 47 minutes, 33 seconds okay it's it's a very different type of business so and you need size and scale and um so it's something which we don't 47:41 47 minutes, 41 seconds want. Our focus is always to do the complex box build. We want to do the $100,000 boxes. Okay, which uh which 47:48 47 minutes, 48 seconds will make uh a lot more business sense in uh in our focus as well as deliver and we believe there is enough growth in 47:56 47 minutes, 56 seconds what we do across these verticals across geographies. We're also looking at other geographies as well, export geographies as well now. So when there is enough 48:04 48 minutes, 4 seconds growth with a higher asset and we have one of the industry leading gross margins in what we do. 48:10 48 minutes, 10 seconds Got it. Happy to hear that one one direction focus is there. We are not diluting it to start manufacturing something else where we don't have kind 48:17 48 minutes, 17 seconds of an edge. Um uh very happy to hear that. So just one last question to little semiconduct that you have mentioned to the uh the earlier analyst. 48:26 48 minutes, 26 seconds uh as almost as we said that 50 60%age of the products have gone some uh acceptance by the trend for now uh there 48:33 48 minutes, 33 seconds is some 40% it's still in trials and working practices so what can one and you're saying that from 2027 itself we 48:42 48 minutes, 42 seconds can start expecting some kind of a revenue to come into picture uh just a ballpark number uh as now the uh from 48:50 48 minutes, 50 seconds the perspective that it is now just one year ahead for us just a ballpark how big this can be in terms of order book that we can expect uh in even if the the 48:59 48 minutes, 59 seconds arch program is divided into sub programs. 49:03 49 minutes, 3 seconds Yeah, that's u so things are going very well. I'm not saying no but these these are slow things which kind of take time 49:10 49 minutes, 10 seconds to uh materialize but saying that you know our goal is to in the next two to three years I would say three years make 49:17 49 minutes, 17 seconds it a a a vertical for us. Okay. So you can understand the scope of it. It could be a smaller vertical and we hope it's a 49:26 49 minutes, 26 seconds larger vertical but uh it will become hello 49:43 49 minutes, 43 seconds it it will become a vertical for us. Uh so right now it's in the industrial piece and then we'll uh spin it off in 49:50 49 minutes, 50 seconds the next two to three years as a separate vertical. So you know you know our size of our verticles and we uh we hope to have that whether it's a smaller 49:59 49 minutes, 59 seconds or a larger vertical we have to we'll be there just to confirm one thing whenever we say a new vertical it is approximate 8 to 10% of revenue coming from that and 50:08 50 minutes, 8 seconds then we divide it to another shad without putting a number to that 50:14 50 minutes, 14 seconds okay uh there is enough scope and scale to grow on this we've just gotten to one customer right now which means there is 50:22 50 minutes, 22 seconds multiple customers where and with the need customer we can get into multiple products. Uh India just got into these semic equipment manufacturing and even 50:31 50 minutes, 31 seconds in the last budget there was a mention of India semicontrol mission 2.0 which focus on semic equipments. Um definitely we also hope for greater things to come 50:39 50 minutes, 39 seconds here but we did not want a number to that at this stage. Thank you. Thank you so much sir. Thank you sir. 50:48 50 minutes, 48 seconds Thank you. The next question comes from the line of Arpit Jen with Walford Financial Services Limited. Please go ahead. 50:56 50 minutes, 56 seconds Uh hi, thank you and congratulations on good numbers. Um am I audible? Yes, that's great you are. 51:05 51 minutes, 5 seconds Yeah. So, uh so I came across a recent news that the company in the Middle East has disrupted the supplies of raw 51:12 51 minutes, 12 seconds materials at PCBs and cooked up their prices. So uh I just wanted to know since uh regarding the tightening of the 51:20 51 minutes, 20 seconds availability of PCBs how has that impacted us and our inventory and how has the pricing impacted us too. 51:32 51 minutes, 32 seconds So uh see most of our pricing is a pass through okay passed through through our customers. There has been some increases but it it'll always be passed through. 51:42 51 minutes, 42 seconds So it's it's not something which will affect if you look at over a 5year period our gross margins of average 51:49 51 minutes, 49 seconds between 33 and 35% or sometimes even higher. So we always aspire to keep that. So even if uh some of these prices 51:57 51 minutes, 57 seconds increase we uh pass it through to our customer. Did that answer your question? 52:03 52 minutes, 3 seconds Uh no and regarding the inventory thing so regarding the shortening of the availability of PCBs. So uh I mean how 52:11 52 minutes, 11 seconds do we hold do in my inventory and what's your outlook on that? 52:16 52 minutes, 16 seconds You want to ask? Yeah. So I'll take that uh so you know we manage this actively with the help of our customers. So we 52:24 52 minutes, 24 seconds work very closely with them as to what kind of inventory we should hold for their products right we are always keep we keep our eye out. So where the where 52:33 52 minutes, 33 seconds we feel it's getting tight we will hold more inventory and where we feel you know the lead times are good right uh we don't have to do so so this is actively 52:41 52 minutes, 41 seconds managed across programs across commodities whether it's PCB metal wire harness whatever it is right so these 52:49 52 minutes, 49 seconds are fluctuations that we manage dayto-day but at the moment nothing that's uh that we see is critical obviously there are things that are long 52:58 52 minutes, 58 seconds long lead times and things that are moving around but we're always actively managing Okay. But take that changes on a daily basis. 53:06 53 minutes, 6 seconds Okay. As of now, we don't see a material impact, but you never know what will happen geop. 53:13 53 minutes, 13 seconds Okay. And uh okay. So my uh next question was uh I see a growth in PAT 53:21 53 minutes, 21 seconds year on year uh higher than the growth in AIDS. So correct me if I'm wrong. So uh I believe uh with depreciation and 53:29 53 minutes, 29 seconds with the tax and with um with interest and all being stable across the year there's a component of other income that 53:37 53 minutes, 37 seconds has increased substantially. So I just wanted to know what does this other income comprise of. 53:45 53 minutes, 45 seconds So uh other see we are an export uh uh business like major products is also in exports. Um so there is with currency 53:54 53 minutes, 54 seconds depreciation there is a benefit on uh forex income as well which is part of the other income. It won't be part of your but it will be part of other income. 54:02 54 minutes, 2 seconds Okay. Okay. Thank you. 54:06 54 minutes, 6 seconds Thank you. Our next question comes from the line of Mahul Puani with 40 cents. Please go ahead. 54:16 54 minutes, 16 seconds Thank you so much for the followup. All my questions and answers. Thank you. Okay, thank you. 54:24 54 minutes, 24 seconds Thank you. Our last question for the day comes from the line of Ach with who's an active investor. Please go ahead. 54:33 54 minutes, 33 seconds Yeah. Hello. I have a question on order book like uh I've seen that the current order is around 3,000 cr. What is the time to execute this? 54:43 54 minutes, 43 seconds So uh uh a truth uh the order book is around 3,441 crores. Out of that 2,196 crores is 54:53 54 minutes, 53 seconds distributable in 12 to 14 months and 1,245 crores is executable between uh 14 55:01 55 minutes, 1 second months to 36 months and we have got orders further than 3 years which you don't count in the order book. 55:12 55 minutes, 12 seconds Okay. And the second question is regarding uh margin. Uh I remember that in previous phone calls somewhere we 55:20 55 minutes, 20 seconds have mentioned that the operating margins will increased from Q4 of FI2. 55:25 55 minutes, 25 seconds So I just wanted to understand if operating margins are going to increase going forward. 55:32 55 minutes, 32 seconds So uh I can talk about the cost. So in Q4 FI26 like like you also rightly highlighted the the Bida percentage is 11.8%. 55:42 55 minutes, 42 seconds And if you look at our uh India manufacturing is which is approximately 39% that has generated 16.5% thea um so 55:50 55 minutes, 50 seconds the you can see a consistent increase in uh aida percentage over the last few quarters. Now with the increase in sales expected in 55:58 55 minutes, 58 seconds FI27 we believe there is a further scope of operating leverage in both uh India plan as well as US plan. So there is a little bit more scope as well. 56:10 56 minutes, 10 seconds Okay. Can you give a long-term uh guidance on data margin? I mean because uh if you see other image players are 56:16 56 minutes, 16 seconds able to make around 16%. So I think uh we have still been left to make uh much more margin. 56:26 56 minutes, 26 seconds We generally do not provide guidance on the uh margin percentage. Okay. 56:35 56 minutes, 35 seconds leverage as hope for us to pay out. Okay. Thank you. Thank you. 56:42 56 minutes, 42 seconds Ladies and gentlemen, that was the last question for the day. As there are no further questions from the participants, I now hand the conference over to the management for closing comments. 56:56 56 minutes, 56 seconds FYI 26 was a great year for Avalon with robust revenue growth and solid execution. We remain focused on scaling 57:04 57 minutes, 4 seconds new programs, enhancing capabilities and investing ahead of our growth. 57:10 57 minutes, 10 seconds Our entry into semiconductor equipment space marks a key step as we expand into more advanced high potential technologies and segments. With a 57:18 57 minutes, 18 seconds healthy order book, expanding customer engagement and a flexible global manufacturing model, we are well positioned to sustain momentum through the year and deliver profitable growth. 57:29 57 minutes, 29 seconds We thank our investors for their continued support and look forward to to updating you in the coming quarters. 57:36 57 minutes, 36 seconds Thank you very much. Thank you. 57:41 57 minutes, 41 seconds Thank you on behalf of Motila Losal Financial Services Limited. That concludes this conference call. Thank you for joining us and you may now disconnect your lines. Thank you.