Azad Engineering Limited — Q4 FY26

Azad Engineering Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=flne2RLnbtk Published: 4 hours ago

0:01 1 second Ladies and gentlemen, good day and welcome to Azad Engineering Limited Q4 FI26 earnings conference call. This conference call may contain 0:09 9 seconds forward-looking statements about the company which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not the guarantees of 0:17 17 seconds future performance and involve risk and uncertaintities that are difficult to predict. As a reminder, all participant lines will be in the listen only mode. 0:25 25 seconds There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance in the conference call, please signal an 0:33 33 seconds operator by pressing star then zero on your touchstone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rakkesh 0:41 41 seconds Chopdad, chairman and CEO. Thank you and over to you Jupda. 0:47 47 seconds Thank you. Thank you very much. Good morning everyone. Welcome and thank you for joining us on the Q4 FI26 earnings call. 0:57 57 seconds I'm joined today by Mr. Vish Vishu Walpani, our time director, Mr. Ron Jaju, our CFO and SGA, our investor relations advisors. 1:08 1 minute, 8 seconds The audited results and the investor presentation have been uploaded on the stock exchanges 1:15 1 minute, 15 seconds and to our company website and I trust you have had a chance to look at them. 1:22 1 minute, 22 seconds At the start of FI26, we described it as a year of consolidation, a year in which we would embed newly commissioned 1:31 1 minute, 31 seconds capacity, convert the qualifications we have been earning over multiple years and put in place the human capital and 1:40 1 minute, 40 seconds the systems that the next phase of growth demands. 1:44 1 minute, 44 seconds I'm pleased to report that we have delivered on each of those commitments. 1:50 1 minute, 50 seconds Before turning to the numbers, I I want to spend a moment on what the growth you are seeing actually represents because 1:58 1 minute, 58 seconds it is important to characterize this correctly. 2:02 2 minutes, 2 seconds So the nature of our business and our growth Azad is a global supplier. We compete head-on with established 2:10 2 minutes, 10 seconds suppliers from USA, Europe, China and Japan and on their own benchmarks for 2:17 2 minutes, 17 seconds the same global OEM platforms. We have done so far for many years now and our growth today is a cumulative payoff of 2:25 2 minutes, 25 seconds that long hard work not a function of any short-term tailwind, geographic shift or single market opportunity. 2:34 2 minutes, 34 seconds The products we manufacture, critical rotating components for gas, steam and nuclear turbines, mission and life critical aerospace and defense parts, 2:42 2 minutes, 42 seconds complex precision assemblies for oil and gas are among the most demanding components made anywhere in the world. 2:51 2 minutes, 51 seconds This is inside engines that operate at extreme temperatures, extreme pressures, extreme tolerances. 2:58 2 minutes, 58 seconds The cost of failure is measured in lights and in billions of dollars platforms. 3:04 3 minutes, 4 seconds The reason these components are made by only a handful of companies globally is straightforward. The qualification cycle 3:12 3 minutes, 12 seconds to even be allowed to manufacture them take years sometimes a decade of process validation, metological proof, 3:19 3 minutes, 19 seconds dimensional verification, first article inspections and serial production audits. Once a supplier earns that 3:27 3 minutes, 27 seconds qualification, the business is sticky, multi-year and high value. The growth you are now seeing in our reported numbers is the conversion of 3:36 3 minutes, 36 seconds qualifications we earned over the last several years against the backdrop of capacity we have deliberately built to be ready for the next conversion. 3:48 3 minutes, 48 seconds Talking of the capacity and customer milestones as promised on our capeex road map we have successfully 3:55 3 minutes, 55 seconds inaugurated fourth dedicated lean manufacturing facilities for our marquee global customers since listing 4:04 4 minutes, 4 seconds of which two were commissioned during FI26 and the most recent one just last month. In April 2026 we inaugurated a 4:13 4 minutes, 13 seconds dedicated facility for Baker Hughes. A milestone in a relationship that like all our relationships we earn through 4:21 4 minutes, 21 seconds one of the most rigorous qualification pathways in the industry. A dedicated facility represents the deepest possible 4:28 4 minutes, 28 seconds form of customer customer integration and we now operate several such facilities for several global OEMs. 4:37 4 minutes, 37 seconds Matsumishi Heavy Industries a defining proof point. We are also pleased to share another significant milestone. 4:44 4 minutes, 44 seconds Azad has been awarded a prestigious contract by Mitsubishi Industries Japan as a single source supplier partner 4:53 4 minutes, 53 seconds and we have signed a 8-year long contract and purchase agreement for the supply of highly engineered hot section 5:00 5 minutes nozzle vein segments for the combustion of a gas turbine engine. Single source qualification for hot section components 5:07 5 minutes, 7 seconds of a turbine nozzle range for an OEM of MHI STA is the strongest possible endorsement of our technical and process capabilities. 5:18 5 minutes, 18 seconds This product is not just uh being awarded and it is awarded by many many 5:26 5 minutes, 26 seconds audits and many many uh qualifications prior to even we even they think of uh 5:34 5 minutes, 34 seconds you know awarding such product to any company. 5:39 5 minutes, 39 seconds On the financial performance snapshot Q4 FI26 was another strong quarter. Revenue stood at 157 crores, a yearon-year growth of 26.4%. 5:51 5 minutes, 51 seconds reported AITA margin improved from 36.5% in Q4 FI25 to 36.7% 5:59 5 minutes, 59 seconds in Q4 FI26 driven by operational efficiency scale benefits and improving product mix pack margins and expanded 6:07 6 minutes, 7 seconds from 20.9% to 22.3% over the same period for the full year FI26 revenue was 590 6:16 6 minutes, 16 seconds crores against 453 crores in FI25 a growth of approximately 30% plus. 6:25 6 minutes, 25 seconds Reported margin stood at 36.9% for the year and the pack margin at 22.4%. 6:32 6 minutes, 32 seconds The consistency of growth across both revenue and profitability reflects strong execution across every business segment and increasing contribution from advanced manufacturing programs. 6:44 6 minutes, 44 seconds Building the organization for the next phase. This is very important. Equally important to the financial performance 6:52 6 minutes, 52 seconds is the work we have done on building the organization itself. 6:56 6 minutes, 56 seconds This is the work that does not show up in a quarter sprint but it is in the work that determines what the company looks like 5 years from now. 7:08 7 minutes, 8 seconds infrastructure build out. A meaningful portion of management bandwidth in FI26 went into building physical 7:15 7 minutes, 15 seconds infrastructure, new facilities, specialized equipment, audits, validation cycles, qualification, delta 7:23 7 minutes, 23 seconds qualification for programs. That infrastructure phase is now approximately 70 to 80% complete with 7:31 7 minutes, 31 seconds the heaviest part of the built out with the build out behind us. 7:37 7 minutes, 37 seconds The operating focus from here is conversion throughput and the operating leverage that comes from running a 7:45 7 minutes, 45 seconds fuller more integrated manufacturing system. 7:50 7 minutes, 50 seconds More importantly the organizational restructuring we are deliberately restructuring the 7:57 7 minutes, 57 seconds organization to match the scale we're growing into. 8:02 8 minutes, 2 seconds We are bringing in senior professionals from the industry, leaders with deep functional and sector experience and 8:09 8 minutes, 9 seconds selectively replacing certain functional roles internally where the role has 8:15 8 minutes, 15 seconds outgrown what its currently incuberc 8:22 8 minutes, 22 seconds size executed with care and it is essential. 8:27 8 minutes, 27 seconds The Azad of future need a different organization architecture from Azad of today and we are building for the 8:35 8 minutes, 35 seconds company today. Systems and process equally we are upgrading our systems our planning our ERP 8:43 8 minutes, 43 seconds shop floor execution platform our quality management system and our governance frameworks. Scaling a complex decision engineering business requires 8:52 8 minutes, 52 seconds us to grow across every lever, people, process, plant, partners and systems. 8:59 8 minutes, 59 seconds Growing one without the other is how companies stumble at this stage of the journey. We are determined not to. 9:07 9 minutes, 7 seconds Overall outlooking ahead, the demand backdrop of the product we make remains 9:14 9 minutes, 14 seconds strong. Global OMS across aerospace, defense, energy and oil and gas are scaling their platforms and the supplier 9:22 9 minutes, 22 seconds base capable of meeting the technical threshold we operated remains small. We are confident in sustaining strong 9:30 9 minutes, 30 seconds business momentum and in delivering on our previously communicated topline growth of approximately 25% plus for the 9:38 9 minutes, 38 seconds current year. In line with growth outlook, we will continue to invest in capabilities, in capacity, in people, in 9:45 9 minutes, 45 seconds systems, and in deepening our customer partnership. The story of Azad has always been one of the patient technical 9:52 9 minutes, 52 seconds qualifi qualification led growth. We intend to continue writing this story the same way. 10:01 10 minutes, 1 second With that, I now hand over the call to our Vishnu Malani, our oldtime director. Thank you. 10:13 10 minutes, 13 seconds Thank you Mr. Chad and good morning to everyone on the call. 10:21 10 minutes, 21 seconds The is set out where it stands strategically and let me take you closer to how FI20 FI26 was actually executed 10:29 10 minutes, 29 seconds on the ground. ramp up of the new plants and how each segment performed the operational discipline that turns an order book into revenue and also what is what are our few focus areas for FI27. 10:41 10 minutes, 41 seconds FI26 was an year of calibrated execution for Azad engineering. By every internal measure, it was one of our most productive years. We delivered our 10:50 10 minutes, 50 seconds highest ever revenue, highest ever and highest ever pack. And we did it while commissioning two plants in this 10:57 10 minutes, 57 seconds financial year, qualifying paths and adding people at record pace. With this, we now have four additional plants that 11:05 11 minutes, 5 seconds we've built in the newer facility. We've always called FI26 a year of calibrated ramp up and not a rushed one. And the 11:13 11 minutes, 13 seconds difference is really important to understand. Calibrated means we lined up everything right from plant commissioning to customer qualification 11:22 11 minutes, 22 seconds timelines lined up hiring with our training and lined up raw material flow with our realities of working capital in WIP cycle 11:31 11 minutes, 31 seconds I'm sorry every quarter of FI26 was planned in detail and we've been able to deliver close to our plan in every 11:38 11 minutes, 38 seconds quarter in terms of segmental performance we've been broad-based by design our growth of 11:46 11 minutes, 46 seconds FI26 was not dependent on any single customer or any geography or any single segment. We've had tremendous growth 11:54 11 minutes, 54 seconds every segment. Energy and oil and gas remained the largest contributor for the full year 26 and continues to be one of 12:03 12 minutes, 3 seconds the main engines of the business contributing to roughly 81.5% for the full year in terms of a revenue which is 12:10 12 minutes, 10 seconds 481 crores yearon year growing at at least 34%. In quarter 4 specifically, 12:18 12 minutes, 18 seconds the segment generated 128 crores in revenue again contributing roughly about 81% of our quarterly revenues. The 12:25 12 minutes, 25 seconds headline number hides the diversity diversity inside. We've grown across multiple customers subsegments within each vertical. 12:37 12 minutes, 37 seconds Coming to aerospace and defense, we've delivered another strong year and a milestone number of 100 crores that we were able to reach for the first time. 12:46 12 minutes, 46 seconds For the full year 2026, this segment contributed to 102 crores, about 17.2% 12:52 12 minutes, 52 seconds of our FI26 revenue with a year-on-year growth of roughly 25%. In quarter 4 alone, the segment contributed 28 13:00 13 minutes crores. On the aerospace side, our share of qualified component categories with our key customers have grown materially through the entire year. 13:10 13 minutes, 10 seconds Talking about our auto book, our auto book is at approximately 6,500 crores with 600 crores delivered in FI26 and 13:19 13 minutes, 19 seconds still remains at that level which is about 11 12 times our FI26 revenue given the forward visibility which is very very rare in the times today. 13:30 13 minutes, 30 seconds The conversion in our order book is broadly driven by three things. And this is a question that we were asked the previous time that the conversion of an 13:39 13 minutes, 39 seconds order book into revenue is driven by the production schedule already agreed with each of our customers. Our capacity availability and 13:49 13 minutes, 49 seconds ramp up against that schedule and the qualification status of each and every part that is a part of a contract that we are signing with our customers. As we 13:57 13 minutes, 57 seconds exit FI26, I'm very happy to share that all of these three are aligned for the first time at the scale. Capacity is 14:06 14 minutes, 6 seconds largely in place. Qualifications are advancing across sectors and customers customer schedules are firm and are in 14:13 14 minutes, 13 seconds place and that's why we remain confident in delivering 25% plus line trajectory not just for FI27 but on a multi-year 14:22 14 minutes, 22 seconds basis. Our focus for FI27 sits on three to four priorities at large. First, ramping up our four new capitalized 14:31 14 minutes, 31 seconds plants across GE, Seammens, Mitsubishi and Baker Huge that we inaugurated over the last you know few quarters to their 14:38 14 minutes, 38 seconds committed throughput. Second, commissioning the remaining plants that are still under construction at R&WIP 14:45 14 minutes, 45 seconds stages by the balance of the year FI27 with the same discipline that we followed through FI26. Third, deepening our existing customer relationships. 14:56 14 minutes, 56 seconds Fourth, normalizing the working capital cycle over this period. With that, I now hand over our call to our CFO, Mr. Ron Jaju. Thank you. 15:15 15 minutes, 15 seconds Thank you, Vishnu. And good morning everyone. 15:18 15 minutes, 18 seconds I will take you through the financials and operational highlight for the quarter and the full year of FI26. 15:27 15 minutes, 27 seconds FI26 has been an important investment and transunction year for the company. 15:32 15 minutes, 32 seconds During the year multiple OEM dedicated facility progress simultaneously through commissioning qualification and 15:40 15 minutes, 40 seconds stabilization stage while the result in elevated upfront investment in plant and 15:47 15 minutes, 47 seconds machinery inventory manpower readiness and work in progress. It has laid a strong foundation for our next stage of 15:55 15 minutes, 55 seconds sustainable growth. We now have fully prepared facility, a robust order book and a strengthened organization 16:03 16 minutes, 3 seconds structure to support future scale. Let me take you through the numbers now. For FI26, the company reported revenue from 16:12 16 minutes, 12 seconds operation is 590 cr on a standalone basis and 603 cr on consolidated basis. 16:20 16 minutes, 20 seconds This reflect a healthy yearon-year growth of over 32%. 16:25 16 minutes, 25 seconds Despite several facilities been in ramp up stage, qualification stage and significant part of the year. The other 16:33 16 minutes, 33 seconds income is stood at 46 crores largely compromised comprising of foreign exchange gain and treasury income. This 16:42 16 minutes, 42 seconds is expected to moderate going forward as QIP profits are deployed toward the growth capex. Our AITA margin are around 16:50 16 minutes, 50 seconds 37.4% 4% reflecting a strong exhibition discipline supply chain efficiencies and 16:57 16 minutes, 57 seconds margin benefit driven by backward integration which reduce our outsourcing cost. Depreciation and finance cost 17:05 17 minutes, 5 seconds increase due to front-end capex undertaken during FI26. 17:10 17 minutes, 10 seconds During the year we have capitalized assets worth 392 crores and record and increase TWWIP and capital advance of 17:19 17 minutes, 19 seconds 191 cr during the year. Profit after tax stood at 132 cr on standalone basis and 17:27 17 minutes, 27 seconds 134 cr on consolidated basis delivering a strong growth of 54.5% for the year. 17:34 17 minutes, 34 seconds The balance sheet side we continue to invest ahead of the curve. During FI26 we have capitalized assets was 392 cr. 17:44 17 minutes, 44 seconds As I mentioned the company utilize incre utilize incremental term funding of rupees 154 17:53 17 minutes, 53 seconds crores to support ongoing cap capacity extensions and total borrowing issued at 17:59 17 minutes, 59 seconds 457 cr on gross basis and 272 crores on net basis. Our treasury balance is stood 18:06 18 minutes, 6 seconds at 184 crores including 160 crores from QIP proceeds. 18:12 18 minutes, 12 seconds Receable stood at 309 crly in line with historical level. Trade payables were 87 18:19 18 minutes, 19 seconds crlating to approximately 51 days of sales which was in line with historical number. We have not fully utilized receivable bill discounting facility. 18:29 18 minutes, 29 seconds This year given the current cost dynamics and our adequate liquidity available in the system as I mentioned that we have a treasury of 184 cr. 18:38 18 minutes, 38 seconds Additionally we have GST credit of approximately 100 crores accumulated over the past two year. This is on the back of capital expenditure which we 18:46 18 minutes, 46 seconds have done in the in historically which we expected to realize by H1 FI28 supporting future cash flow and increase the liquidity in the system. 18:58 18 minutes, 58 seconds Let me take you through the inventory. 19:00 19 minutes inventory during FI27 reflect a deliberated and strategic buildup to support the ramp up of our newly 19:07 19 minutes, 7 seconds commissioned OEM facility and ensure readiness of committed production schedules as mentioned by Mr. Vishnu and 19:15 19 minutes, 15 seconds Mr. Rakkeshar in their presentation. The buildup is aligned with capacity expansion, customer stocking requirement and upcoming order execution. 19:26 19 minutes, 26 seconds It's important to note nearly 96% of our inventory is less than one year old indicating that it is primary linked to 19:33 19 minutes, 33 seconds recent investment plant ramp up qualification requirement and customer-driven restocking needs rather than the legacy inventory. 19:44 19 minutes, 44 seconds As utilization improve across the new facility, we expect the investment to translate into stronger revenue 19:50 19 minutes, 50 seconds observation, improved assess turn, better return ratio and strong operating cash flow in FI27 and beyond. 20:00 20 minutes In closing remark, FI26 was just a year just not a year of growth, sorry, but 20:08 20 minutes, 8 seconds year of purposeful investment to build capacity, enhance capabilities and position the company for long-term 20:15 20 minutes, 15 seconds extension. With the strong order pipeline, operational readiness across dedicated OEM facilities and disciplined 20:22 20 minutes, 22 seconds cential management, we are confident of converting this investment stage into the earning growth and improved returns 20:30 20 minutes, 30 seconds in coming years. Thank you. I would like now like to open the floor for questions. 20:38 20 minutes, 38 seconds Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may I press star and one on the touchstone telephone. If you wish to remove 20:47 20 minutes, 47 seconds yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll 20:55 20 minutes, 55 seconds wait for a moment while the question queue assembles. 21:01 21 minutes, 1 second The first question comes from the line of Amit Digshit with Goldman Sachs. Please go ahead. 21:06 21 minutes, 6 seconds Yeah. Hi, good morning everyone and uh uh congratulations for a good set of numbers again. Um a few questions if I 21:14 21 minutes, 14 seconds may. The first one is essentially uh if I look at you know the the projections or the commentary of global OEMs 21:22 21 minutes, 22 seconds including GE, Mitsubishi, Semens I mean that seems to be very very bombastic. I mean there is they are fully booked for 21:30 21 minutes, 30 seconds next 10 years. So in this scenario how do you see the landscape changing for Azad? I mean the growth that we have 21:38 21 minutes, 38 seconds projected 25% in revenue uh appears to be actually little bit uh uh on conservative side given the overall 21:47 21 minutes, 47 seconds macro tailwinds uh that we are seeing uh so uh and and we have got of course you know relationship with all the all the global audience. Uh so just wanted your thoughts on that. 21:57 21 minutes, 57 seconds Yeah. Hi. 21:59 21 minutes, 59 seconds Uh, thanks for the question. Yes, you're right. uh there is massive pressure from our existing customers and what we say 22:08 22 minutes, 8 seconds 25% plus is is a growth number as as uh during last call and this call and you know couple of calls we have been 22:15 22 minutes, 15 seconds mentioning that we are moving the new facility and it's not a small facility u which is in the making and we could we 22:24 22 minutes, 24 seconds could successfully come to a level of stabilization that is 70 80% done but we can't see that massive jump immediately, 22:32 22 minutes, 32 seconds right? Because we need capacity, we need intra uh we need this audits, qualifications, redo delta qualifications. So these things will 22:41 22 minutes, 41 seconds definitely eat up a lot of time and this is bound to happen with any any organization, right? You you must be knowing all the stringent uh uh 22:50 22 minutes, 50 seconds processes these OEMs carrying or the stringent products what we manufacture. 22:55 22 minutes, 55 seconds You're right. Definitely there will be a jump coming in. Maybe in coming quarters I would definitely elaborate on the on 23:03 23 minutes, 3 seconds the numbers of the growth we are seeing but we have we we as as we get stabilized 100%. My my take is I would 23:10 23 minutes, 10 seconds only uh give a uh uh a growth number what we are saying is conservative year 23:17 23 minutes, 17 seconds right and uh this statement is going to change maybe just because in the coming 23:24 23 minutes, 24 seconds quarter also we see that the 70 80% is uh is what we see the civilization part 23:30 23 minutes, 30 seconds done now the spindles are running the material has been churning out but the effect will not come overnight right so 23:38 23 minutes, 38 seconds this takes at least this quarter will you will definitely see some some movement of of the the revenue is going 23:46 23 minutes, 46 seconds up but it's always nice to nice to give a guidance and and maybe in the ne next coming quarter we I can change my 23:54 23 minutes, 54 seconds statement and definitely we can we can see u after the stabilization is done definitely we see a massive growth 24:02 24 minutes, 2 seconds no great I mean got it uh the second one is essentially on ATG engine so I just to understand uh the road map of 24:10 24 minutes, 10 seconds delivery and uh if I'm not mistaken there are uh 18 to 20 engines that you have to deliver in maybe uh one and a 24:18 24 minutes, 18 seconds half years uh so just wanting to understand where we are on that development process so I will just give you an idea it was 24:27 24 minutes, 27 seconds years got to months now it has come to weeks so we are not far away uh even we are super excited especially me myself 24:36 24 minutes, 36 seconds I'm super excited to deliver this to uh government um much needed for the country at this hour. So it's not far away. 24:46 24 minutes, 46 seconds Okay. Uh one data uh bookkeeping question if I may. Is it possible to break receivable and inventory days in 24:54 24 minutes, 54 seconds December for this year? 24:57 24 minutes, 57 seconds Yes. So as as as we come as we gave a statement in last last call also 26 was 25:03 25 minutes, 3 seconds something and and we were consolidating a lot of things stabilization was most important a lot of our bandwidth of the 25:11 25 minutes, 11 seconds entire management went up in in trying to you know make this facilities up and running that's most important priority one and then coming to the level where 25:20 25 minutes, 20 seconds we have already WIP work in progress to cut down these inventories as I promised uh in H1 H1 you will see a drastic 25:28 25 minutes, 28 seconds change coming to closer to 200 days and H2 we we get down to 160 170 days that's that's uh we have already planned and 25:37 25 minutes, 37 seconds it's in execution and we will achieve it okay great uh great thank you so much 25:43 25 minutes, 43 seconds and all the best thank you a reminder to all the 25:51 25 minutes, 51 seconds participants please restrict yourself to two questions next question comes from the line of Suraj Malu with Kataran Katamaran please go ahead. 26:02 26 minutes, 2 seconds Uh hello sir thank you very much for this opportunity. Uh sir uh I have two questions. Uh one is uh in Q1 FI26 you 26:10 26 minutes, 10 seconds had mentioned a plan of uh creating total eight dedicated facilities over 12 to 18 months of which four have been 26:18 26 minutes, 18 seconds completed. So are we on track to set up four more new facilities over 6 months? 26:24 26 minutes, 24 seconds Yes, you're right. We are on track. 26:28 26 minutes, 28 seconds Okay. And the second question is uh as in when you uh you win some long-term contracts, you mentioned some contracts are five years, some are six, some are 26:37 26 minutes, 37 seconds four, right? So of the existing order backlog of around 6,000 crores. What will be uh the timeline over which you will need to deliver this? 26:48 26 minutes, 48 seconds So, so these these contracts have specific delivery schedules and uh so every contract has a schedule at a part 26:58 26 minutes, 58 seconds number level agreed with a customer and then the capacity that we bringing online. So you know just coming to the same thing that we were talking about. 27:07 27 minutes, 7 seconds In the last about 18 months, we've gotten about four plants up right now on the basis the ramp up plan and the 27:15 27 minutes, 15 seconds customer delivery schedules the capacity is coming online for these four plants. 27:19 27 minutes, 19 seconds So if you look at it over five to six years we should be able to on an average these contracts extend to over five to six years. 27:27 27 minutes, 27 seconds Got it. Yeah. And uh last yeah so yeah so if you and if you just look at a you know the guidance that we talking about 27:36 27 minutes, 36 seconds 25% plus on the number you will realize that over the next 5 years we should be able to more or less consume 6,500 27:43 27 minutes, 43 seconds right right understood sir and sir is it uh possible to get an get a split of this 6,000 cr order backlog by segment 27:54 27 minutes, 54 seconds sure so so this I mean I can let me let me tell you broadly between uh you know our customers or you know uh let me tell 28:03 28 minutes, 3 seconds you broadly between our segments I mean customers will be difficult for us to communicate. So uh today you know we have over uh you 28:11 28 minutes, 11 seconds know $400 million worth of orders towards energy approximately $200 million plus for 28:19 28 minutes, 19 seconds aerospace and defense and about $100 million plus in oil and gas. 28:26 28 minutes, 26 seconds Got it. This is very helpful. Thank you very much. You're welcome. All right. Thank you. 28:34 28 minutes, 34 seconds Thank you. Next question comes from the line of Gorov with Aventdus. Please go ahead. 28:40 28 minutes, 40 seconds Hi. Hi. Uh thanks. Thanks for the opportunity. Uh my first question is on on this new contract that you've got 28:47 28 minutes, 47 seconds from Mitsubishi for uh for the nose and veins for the hot section. So just want to understand a couple of things. Uh 28:54 28 minutes, 54 seconds when you said it's a single source order uh does it mean that these were originally manufactured by Mitsubishi which is now being outsourced to you 29:02 29 minutes, 2 seconds subjected to qualifications or you have won it from from from some other vendors. Uh second how big is this 29:10 29 minutes, 10 seconds opportunity especially on the hot section for the noses and well veins. Um and third question is more on the 29:17 29 minutes, 17 seconds aerospace which is uh for the Pratson Whitney and Ross order where are we in the uh qualification cycle? 29:26 29 minutes, 26 seconds Yeah, I got um the first question uh just remind me if I'm right. Uh the first question you asked is is was these 29:34 29 minutes, 34 seconds parts manufactured by Mubishi or some other vendor? So it was manufactured inhouse being these parts are are very critical 29:43 29 minutes, 43 seconds in nature right so this is the combustion area. So a lot of controls and checks are required to produce this part. It's not just someone has an infra 29:51 29 minutes, 51 seconds or some kind of equipment. These parts just go like that. it needs a lot of uh lot of uh specialized inference 29:58 29 minutes, 58 seconds specialized talent to to handle these kind of components. So either they keep it in house or they give it to the most 30:05 30 minutes, 5 seconds trusted partner. So they can't have multiple partners in this. So it's decided Mishi says hey you have to focus 30:12 30 minutes, 12 seconds completely on this and we we only dedicate this to you and same thing we expect from you. So this this is the conversation because of the nature of 30:20 30 minutes, 20 seconds the product this is mandatory it happens that way. So once it's developed in there second if you're talking about 30:26 30 minutes, 26 seconds market I would uh it's a very lengthy uh explanation. So what I can tell you is you can you can go to the competition 30:34 30 minutes, 34 seconds now we are going to be head on is you can study with how metrospace or PCC. So these are the companies who are the players who are who are in this segment. 30:43 30 minutes, 43 seconds So we have we have stepped ourselves in this door right. So that will give you more uh this thing and if you can have 30:51 30 minutes, 51 seconds more details because it's a very lengthy conversation. Yeah. 30:54 30 minutes, 54 seconds So we can come back or you can contact us after the call or something. I can explain you more in detail. 30:58 30 minutes, 58 seconds All right. Okay. Okay. And on the rat Whitney and the Rolls-Royce. 31:04 31 minutes, 4 seconds So yeah. So in this four engine manufacturers on the air is what they started. The first one was Rolls-Royce. 31:11 31 minutes, 11 seconds So we have in H2 we are expecting to supply the first qualification batch and 31:18 31 minutes, 18 seconds uh once that is approved and I think from we can see some momentum coming from uh Q4 of 527 or early of FI28 31:27 31 minutes, 27 seconds that's where the supply starts and all right followed by followed by as you can see it took two and a half two two and a 31:34 31 minutes, 34 seconds half years to come to the stage and this is normal and we could do it in two and a half years it's it's also a great thing you know it's not not a small thing to do it in two and a half years. 31:43 31 minutes, 43 seconds So same cycle will be followed the next is prai then comes saffrant and then it's followed by them. 31:50 31 minutes, 50 seconds All right. All right. Uh if you allow me just one question on the numbers bit um which is on the margins. So what I understand is that you have just 31:58 31 minutes, 58 seconds commissioned the four plants. Uh they are underutilized and yet we get to see your margins going up every quarter. U 32:05 32 minutes, 5 seconds so uh is it is it is it the case that we can see more margin surplus from here on because we are yet to see any operating 32:13 32 minutes, 13 seconds leverage benefits from the new plans. Um we always say 33 to 35% plus and that 32:20 32 minutes, 20 seconds plus can be anything you know so so keep keep expecting some kind of uh definitely a growth is always uh because 32:28 32 minutes, 28 seconds we just don't make we just don't produce we do a lot of improvements continuous improvements on the flow. So that's our team's culture. So definitely I I I wish 32:36 32 minutes, 36 seconds and and uh you know hope that we deliver that to us every time. 32:42 32 minutes, 42 seconds All right. All right. Thank thanks thanks for the answers and all the best for future. Yeah. Go ahead. Thanks. 32:50 32 minutes, 50 seconds Thank you. Next question comes from the line of Bhavika Singhi with Nishai. Please go ahead. 32:58 32 minutes, 58 seconds First of all many congratulations for set numbers. So the first question I have is related to the utilization as 33:06 33 minutes, 6 seconds currently we are uh like we have been maintaining quite good utilization. So the upcoming facility like the one we 33:14 33 minutes, 14 seconds have already installed and the one is going to come in 6 months. Do we expect the same utilization or it will uh 33:21 33 minutes, 21 seconds differ uh in terms of like uh how how much time we can expect uh it to come at the same level of 90% plus utilization. 33:31 33 minutes, 31 seconds Yeah, see if any plant is inaugurated that means brand new building brand new machines uh we don't wait for the shop 33:40 33 minutes, 40 seconds to complete 100%. when like you talk about bakery use we were around 50 60% of the capacity machines were inside and 33:48 33 minutes, 48 seconds when we cut the ribbon we started producing the parts the same day but when you see in the numbers it will take some time to flow of the material to 33:56 33 minutes, 56 seconds come to the dispatch area right and that that's what I was uh giving an answer in the to also that the Q1 of of this the 34:04 34 minutes, 4 seconds current month quarter which is going on this is the turnout month so the revenues will follow once the metal gets it started dispatching. So once it's 34:14 34 minutes, 14 seconds inaugurated definitely the spindles are running and the metal starts uh in the flow. 34:22 34 minutes, 22 seconds And the second question I have on the segment side as we did quite good on the energy and oil segment. So I just want 34:30 34 minutes, 30 seconds to understand what's driving the growth in the segment is the new addition of the customers or the new products we are adding in the portfolio. Uh if you can give the clarity on that. 34:40 34 minutes, 40 seconds Yeah. So in that case I I'll tell you these requirements were always there with Azar right right from day one when we started we just didn't have the 34:48 34 minutes, 48 seconds capacity as we are setting up the capacity as we are we are inaugurating these plants 34:57 34 minutes, 57 seconds this is where we start taking orders it's us who were not taking orders because we didn't have capacity now we increasing the capacity and we are 35:04 35 minutes, 4 seconds opening the door to take more orders so this is where the growth is coming in so this this requirement was Not today. It was there from with us from day one. 35:15 35 minutes, 15 seconds Okay. So am I understanding right that we are getting from the same products uh we are not adding new products uh like 35:22 35 minutes, 22 seconds uh in this segment no so uh so the right way to understand this is see I think uh it's not a 35:30 35 minutes, 30 seconds straightforward approach right so every time our growth with a customer happens on multiple fronts right so first is you 35:37 35 minutes, 37 seconds have certain parts that have been qualified so we are ramping up our market share on those qualified parts over time right So let's say we were 35:45 35 minutes, 45 seconds doing a certain kind of wallet share with our customer on those parts. Now because of our progressive deliveries, our wallet share on those parts will 35:54 35 minutes, 54 seconds continue to grow. So most of the growth that you see today is coming out of qualifications of parts that have been done and ramp up that is coming in. 36:01 36 minutes, 1 second Second level for our growth is that we are also adding adjacent uh categories or more part numbers to our overall 36:09 36 minutes, 9 seconds capability. When Mr. which was talking about how or you know one of you all asked us a question about how we've signed a contract with Mitsubishi that's 36:18 36 minutes, 18 seconds an additional capability higher entry barrier than the current product and diversified product portfolio right with 36:25 36 minutes, 25 seconds a much higher asset turn much higher market so we are also adding those and the third lever for our growth is that 36:33 36 minutes, 33 seconds we are also adding other customers that have where we can deploy our capabilities that we've built horizontally 36:41 36 minutes, 41 seconds Right. So this industry right any of these industries that we are a part of by nature have three or four major players dominating the entire industry 36:50 36 minutes, 50 seconds whether it's energy whether it's aerospace and defense and oil and gas. 36:53 36 minutes, 53 seconds The so the capabilities that Azad is building across our customers are very selectively building it so that we can horizontally deploy and grow the 37:02 37 minutes, 2 seconds business in the years to come. So when we are committing a 25% plus growth that is not on the back of products that we are going to qualify that is on the back 37:10 37 minutes, 10 seconds of the wallet share that we are gaining on qualified products right I hope I hope that answers your question this is this is also very important to 37:19 37 minutes, 19 seconds understand uh by by a time that whatever we say the growth numbers are on the qualified products we never have taken 37:28 37 minutes, 28 seconds in consideration what is going to come what we have to qualify right let it be the engine, let it be the hot gas 37:35 37 minutes, 35 seconds components. Though the markets are big and all we know that we have signed up, we are definitely going to qualify, definitely going to increase revenues, but our culture here is what is 37:43 37 minutes, 43 seconds achieved, what is qualified, what is the growth numbers coming out from them. So that's the reason we give a very a very decent number and uh definitely we see 37:51 37 minutes, 51 seconds upside going forward. Definitely understood. And just last on the aerospace and defense side like 37:59 37 minutes, 59 seconds currently it uh it holds 70% of our total revenue. So do we see the same percentage going forward or we are 38:07 38 minutes, 7 seconds expecting uh the aerospace division getting increased in terms of share of the revenue. 38:14 38 minutes, 14 seconds So so let me let me take this up. I think we've we've tried to address this even in the past. See Aat's been trying to build a well diversified business 38:23 38 minutes, 23 seconds across every sector. Right. So if you look at the history you know you'll be able to see the demonstration of how we are looking at diversifying. So back in 38:31 38 minutes, 31 seconds the 2020 or 2021, Azad was largely an energy business focusing on one product category which was compressor air foils 38:39 38 minutes, 39 seconds right and over the last 5 years you see Azad has diversified at multiple levels whether it is segments and then in the 38:48 38 minutes, 48 seconds segments product categories as well right so going forward we so let's say we want to 38:55 38 minutes, 55 seconds look at Azad 5 years from today you will see that Azat is a fairly diversified business where energy will be contributing anywhere between 55 to 60%. 39:04 39 minutes, 4 seconds And the balance will be contributed by our other verticals which is aerospace and defense and even oil and gas for that matter. So we expect our verticals 39:13 39 minutes, 13 seconds to continue to grow because we have a lot of headroom and become balanced diversified over the next four five years. 39:25 39 minutes, 25 seconds So out of 80% of current energy and oil and gas. How much is the oil and gas segment ma'am? 39:31 39 minutes, 31 seconds Oil and gas we are working uh we are still under qualification. Baker huge is one of our only customers in the segment and we want we are in the process of 39:39 39 minutes, 39 seconds building capabilities right now. So if you look at any revenue contribution for the current year it was not material. it was under uh you know in under about 10 39:49 39 minutes, 49 seconds crores between uh because we are largely doing qualification but FYI 207 will be the first year where you will 39:57 39 minutes, 57 seconds see a ramp up in this and you will be because we've just started in fact the last notification that we gave in April 40:03 40 minutes, 3 seconds 2020 6 uh 20 was inauguration of the facility right and this is one month old 40:11 40 minutes, 11 seconds but you will be able to see how we quickly ramp up in this industry or in the sector in the current financial year. So we we expect to add material 40:19 40 minutes, 19 seconds numbers uh by our oil and gas segment this year and it'll follow the same trajectory like it took us see I mean it's important to understand that it 40:28 40 minutes, 28 seconds took us uh from 2008 to 2020 to get to about 120 crores and it took us you know we've grown 5x in the last about five 40:36 40 minutes, 36 seconds six years right aerospace was started in 2018 2019 and in five seven years we've been able to deliver 100 crores of 40:43 40 minutes, 43 seconds topline in that vertical aeros and similarly oil and gas will not even take five six years. Oil and gas should be able to breach that number over the next 40:51 40 minutes, 51 seconds couple years. So this is how the ramp up and this is the nature of this industry. Right. 40:59 40 minutes, 59 seconds That's it. Thank you so much. 41:06 41 minutes, 6 seconds Thank you. Next question comes from the line of Pratik Dhari with Union Mutual Funds. Please go ahead. 41:14 41 minutes, 14 seconds Yeah. Many congratulations uh for fantastic set of numbers Rakkesh and the team. Uh just one question from the risk 41:22 41 minutes, 22 seconds side. Uh any risk are you currently uh observing from this Middle East uh geopolitical tension on supply chain uh 41:32 41 minutes, 32 seconds or it's business as usual for us? How how are we seeing things? 41:40 41 minutes, 40 seconds Yeah, see uh you know we have if you if you take away the you know macro risk that are there in every business that is 41:48 41 minutes, 48 seconds existing today from a from a from our business perspective I think uh we have 41:54 41 minutes, 54 seconds d-risked ourselves from you know majority issues that can be faced in our business right our business can get 42:01 42 minutes, 1 second impacted if we do not have demand we have purchase orders and visibility over the next five seven years. The other 42:09 42 minutes, 9 seconds thing that we can have a risk on is capacity creation which we've been able to do to a large extent. Third one was 42:16 42 minutes, 16 seconds manpower which we are today doing. So it's about our ability to be able to do all of this together. So that execution 42:22 42 minutes, 22 seconds risk remains and we today are focusing on normalizing our working capital cycle 42:29 42 minutes, 29 seconds along with it as well. So, so we don't see uh from a risk perspective, I think we've been able to manage that because 42:36 42 minutes, 36 seconds our customer relationships are you know structured around qualifications which are which have taken several years to do and are based on multi-year contracts. 42:44 42 minutes, 44 seconds So we don't uh see risk from that perspective. 42:50 42 minutes, 50 seconds Got it. Just a followup uh in terms of uh the new theme which is emerging on 42:56 42 minutes, 56 seconds energy side which is nuclear uh do we have uh any scope or any opportunity 43:04 43 minutes, 4 seconds which can uh we can participate or play in the nuclear opportunity. Uh so so we we are already a player uh that 43:12 43 minutes, 12 seconds is working in the nuclear space. In fact uh our energy segment when we talk about it we cater to gas turbines, nuclear turbines and thermal turbines as well. 43:21 43 minutes, 21 seconds So we make critical rotating components for even nuclear turbines and we make it for the world's largest customer which 43:28 43 minutes, 28 seconds is based out of France. It is a government-owned entity called EDS uh arable and a fully owned subsidiary of 43:36 43 minutes, 36 seconds EDF which is Arabel Solutions. So they audited Azad for a few years. We uh cleared all our qualifications. We 43:44 43 minutes, 44 seconds cleared all our entry barriers and we've been supplying nuclear for the last couple of years. So today in fact we are 43:51 43 minutes, 51 seconds one of the most uh one of the only qualified partners in the country to be uh to be producing nuclear turbine air force. 44:02 44 minutes, 2 seconds So we are we are ready and geared up for the opportunity that we are seeing whether in India or globally. 44:09 44 minutes, 9 seconds Great. Many congratulations one once again. Thank you. Thank you. 44:16 44 minutes, 16 seconds Thank you. Next question comes from the line of Sahil Kar with White Pine Investment Management Private Limited. Please go ahead. 44:25 44 minutes, 25 seconds Yeah, thank you for the opportunity. Uh just wanted to offer how many ATG engines we have the order for and what will the delivery timelines. 44:37 44 minutes, 37 seconds So uh you know it'll be difficult to share that information as it's uh it's a part of a covented national defense 44:44 44 minutes, 44 seconds program and like you know our chairman addressed this before. I think it's it's a matter of a you know we are in the 44:51 44 minutes, 51 seconds process of delivering it and soon we will be able to share more updates on it officially but we may not be able to discuss specific numbers about it. We 45:00 45 minutes can tell you that yes there have been great advancements internally we've uh you know we are very confident moving 45:07 45 minutes, 7 seconds forward on this space but uh sharing specific numbers around this will be difficult. Thank you. 45:14 45 minutes, 14 seconds Okay. Uh and the next question was what was the capeex number for FI26 and the planned capex for FI27? 45:24 45 minutes, 24 seconds For FI26 I already covered in my presentation. We have done the capex of around 392 cr capitalization during the 45:32 45 minutes, 32 seconds year and for fi27 we are on the traitary to rank of the upcoming class. 45:39 45 minutes, 39 seconds So what would be the number if you could quantify it? 45:43 45 minutes, 43 seconds Sorry what would be the number for fi 27 if you could quantify the number for fi 27. 45:50 45 minutes, 50 seconds So most of the kix deployment is linked to the race that we done for right. So we raised 700 crores in QIP and you know 45:59 45 minutes, 59 seconds if you uh our CFO covered that the balance deployment of about 180 to 190 is coming there which will happen to us. 46:09 46 minutes, 9 seconds Okay. Uh I'm sorry do we have any plans in entering the heat treatment plans for the surface treatment plans? I guess it sorry can you repeat that your your 46:17 46 minutes, 17 seconds voice is a little m can you repeat your question? Do we have any plans of uh introducing uh heat treatment plants or 46:25 46 minutes, 25 seconds s surface treatment uh plants uh in house or we so we we already have uh 46:34 46 minutes, 34 seconds state-of-the-art heat treatment facility both uh uh you know we have vacuum heat treatment as well we ncat approved by 46:41 46 minutes, 41 seconds the way which has got ncat approved for treatment also on the special processes yes that's the plan because there are 46:49 46 minutes, 49 seconds some dependencies is on our supply chain. So what we doing is we ultimately will have every special process in a 46:57 46 minutes, 57 seconds however the critical special processes are already in house like shock ting and you know coings all these are already in 47:05 47 minutes, 5 seconds house but few more left that is also going to be in house. 47:10 47 minutes, 10 seconds Okay thank you can add on the kx uh we had announced our kx in with news. So are which on track with the plans or is there some delay due to the scenario? 47:24 47 minutes, 24 seconds Yes, your voice is breaking. Can you just come in the range and talk? Yeah. Am I audible now? Yes, please go ahead. 47:31 47 minutes, 31 seconds Yeah. So we had announced a kex in Saudi Arabia with BKUs. Uh so are we on track with the plans or there's some delay there due to the war? 47:41 47 minutes, 41 seconds No. So uh so so that is still on. uh from an opportunity perspective I think uh we are still uh you know going ahead 47:49 47 minutes, 49 seconds with that but yes the timelines have been shifted we are still in discussions with our customer on how do we best take 47:55 47 minutes, 55 seconds this forward given the current situation and priorities so while you see we had signed an MOU we inaugurated a Baker 48:03 48 minutes, 3 seconds huge plant for us in our dedicated facility so our growth plans with our customer remain and that is an opportunity that is there but we will 48:12 48 minutes, 12 seconds have our current management bandwidth is today focused on what is there in the current plant and we want to get that capacity up and running. That 48:20 48 minutes, 20 seconds opportunity which exists in the Kingdom of Saudi Arabia is available for us and will continue but I think we want to 48:27 48 minutes, 27 seconds take it up you know uh not as the most important priority today. We want to get our current plans up and uh you know do 48:34 48 minutes, 34 seconds that and then that can happen alongside but that opportunity still lies. Thank you. Thank you so much. 48:45 48 minutes, 45 seconds Thank you. Next question comes from the line of Rishika with Goldman Text. Please go ahead. 48:51 48 minutes, 51 seconds Uh good morning everyone. Thank you for the opportunity. Uh so two questions from my end. Um uh when are you guys planning to start 49:00 49 minutes civil work for the third plant and secondly if you could share your views on the potential benefits from upcoming engine ecosystem in the country. 49:10 49 minutes, 10 seconds Uh I'm sorry can you repeat your second question again? 49:13 49 minutes, 13 seconds Just your views on potential benefits from the upcoming engine ecosystem in the country. 49:19 49 minutes, 19 seconds Okay. So uh so the first one Nishika I think uh you know we are building our uh so we've already completed four plants 49:28 49 minutes, 28 seconds four lean facilities uh in the you know uh capex that we were deploying towards creating additional capacity and the 49:36 49 minutes, 36 seconds balance four plants will be completed in this financial year right every plant has a schedule that you know we're 49:44 49 minutes, 44 seconds following on on in terms of commissioning how do when are we looking at uh ramping it up and obviously As explained by our chairman and CFO, it 49:52 49 minutes, 52 seconds takes specific time before we are able to get a plant to a reasonable amount of utilization. Right? It that is a natural 49:58 49 minutes, 58 seconds course. So that is coming up. uh in terms of the engine ecosystem I think uh you know I would I would make it broad- based even further saying that the 50:07 50 minutes, 7 seconds opportunity that you know Azad today is sitting on you know we we've Azad has positioned itself always as a 50:15 50 minutes, 15 seconds manufacturer of highly engineered critical components across these three segments which are mission and life critical with the demand for uh you know 50:23 50 minutes, 23 seconds these engines going up over time with backlogs of our customers increasing Azad is obviously looking at a much larger opportunity in this domain and 50:32 50 minutes, 32 seconds which also means that the ecosystem in India should be thriving and with indigenization plans of the government with indigenization plans of how we are 50:40 50 minutes, 40 seconds stacking up we are moving from building capability for one engine and we will only scale it up like from the engine 50:48 50 minutes, 48 seconds that we are building we will move from the current 3.7 to 4 kon engine to a higher capacity going forward and 50:55 50 minutes, 55 seconds eventually you know contribute to much larger programs but the entire engine ecosystem We are seeing this demand uh 51:02 51 minutes, 2 seconds grow and you know capacity is being added for uh you know a lot of capacities being added in the country. 51:09 51 minutes, 9 seconds We won't be able to talk too much about the Indian programs but yeah I see we see that India is going through that phase where uh we will now start 51:17 51 minutes, 17 seconds contributing meaningfully to our GDP from a precision manufacturing industry perspective. 51:23 51 minutes, 23 seconds That's helpful. Thank you. Um just one more question. Uh what about the third expansion plan of 85,000 square meter 51:31 51 minutes, 31 seconds plan that you are planning? When will that single work start? 51:36 51 minutes, 36 seconds So ma'am uh as pointed out you know we this year our focus is very clear. We want to get the current facility and the 51:44 51 minutes, 44 seconds balance plans committed and our next priority would be to ramp these up slowly. Once this is done, we will take 51:51 51 minutes, 51 seconds on the next facility because today our we we are creating capacity bases the schedules that we have with our customers on autobook. So once this is 52:00 52 minutes completed, our next focus will be building the second plant up over time. 52:05 52 minutes, 5 seconds Understood. That's helpful. Thank you so much. You're welcome. 52:12 52 minutes, 12 seconds Thank you. Next question comes from the line of Manish Oswal with Nirmal Pang Securities Private Limited. Please go back. 52:21 52 minutes, 21 seconds Yes sir. Yes sir. Uh uh I joined the call bit late because I was in the impression of 12:00. So my question 52:29 52 minutes, 29 seconds might be repetitive. I just wanted to understand your thought process around the uh the working capital management and the cash flow generation of the 52:37 52 minutes, 37 seconds company. Uh we have invested a lot of money in the capacity building but how we are managing working capital and how 52:44 52 minutes, 44 seconds uh what sustainable cash flow we can think of in our business. Thank you. 52:52 52 minutes, 52 seconds Yeah, if you see we have up front invested into the in into the inventories and all the plants are at 52:59 52 minutes, 59 seconds different level of capacity ramp up as Mr. Chubar and Vishnu estate. So these plants are at different level of maturity but your investment has to be 53:08 53 minutes, 8 seconds up front. That is the reason this year the inventory is slightly looking uh aliated. 53:15 53 minutes, 15 seconds uh looking forward from FI27 and onward we see that this inventory will be converted into the revenues and that will ease out the cash flow from that particular perspective. 53:27 53 minutes, 27 seconds All right sir I go through the entire task after the call. Thank you. Thank you. 53:54 53 minutes, 54 seconds Mr. Johan, please go ahead with your question. 53:58 53 minutes, 58 seconds Uh hello, good morning. Uh thank thank you for the opportunity. I'm audible. Yes, you are. Please go ahead. 54:06 54 minutes, 6 seconds Yeah. So sir congratulations on new contact went in uh the hot section of order. Uh I just wanted I guess you give 54:15 54 minutes, 15 seconds your break up on order book. Uh I just you know uh reiterating the number it will be around uh 9,000 uh 8,500 around 54:22 54 minutes, 22 seconds right 8,500 crores uh is my understanding correct? 54:28 54 minutes, 28 seconds No. So uh so we are talking about a rolling order book uh right? So that is about 6,500 net of what we have delivered this year. 54:37 54 minutes, 37 seconds Uh so my question was basically on the renewals and amendments on the long-term contracts that we had and also the new 54:45 54 minutes, 45 seconds orders that we had after the uh you know the Q3 that you indicated order book was around 6,500 K. Uh so uh 54:53 54 minutes, 53 seconds yeah so we so we've we've we've added contracts and you know some of these contracts we have uh we cannot disclose 55:00 55 minutes the order value and that's why uh whatever can be publicly disclosed is about 6,500 but it is 6,500 plus right 55:08 55 minutes, 8 seconds uh that is the order book that we looking at from a long-term perspective. 55:13 55 minutes, 13 seconds Okay sir, got it. And uh so also on the hot section nozzle segment like without getting into obviously the customer 55:20 55 minutes, 20 seconds confidential details I just wanted to understand the manufacturing processes is it broadly similar to existing air foil work where you know you get you 55:27 55 minutes, 27 seconds receive a nightmare shape post cast input and you uh you know perform high machining finishing or does this require something materially different? 55:38 55 minutes, 38 seconds So yeah, so I think uh see the process of manufacturing a hot section component cannot be uh discussed on the call. Uh 55:46 55 minutes, 46 seconds we would we would uh if you're very keen, you know, we would invite you to our company and uh please visit us. 55:54 55 minutes, 54 seconds We'll be able to explain the manufacturing process. But uh I can only give you uh one uh you know uh one 56:03 56 minutes, 3 seconds statement that there are only three players around the world of precision manufacturing that have been able to 56:11 56 minutes, 11 seconds crack this materially. Right? So the complexity in manufacturing these components is very very high. 56:22 56 minutes, 22 seconds I'm going to make the majority of those three. Yeah. So uh so you know so the process is different uh than the existing uh manufacturing process. 56:34 56 minutes, 34 seconds Got it. 56:35 56 minutes, 35 seconds More operational details if you're keen uh you know if you plan to visit we'll we'll request our uh you know team to 56:44 56 minutes, 44 seconds sort of arrange a plant visit and this can be addressed at the plants. 56:48 56 minutes, 48 seconds Sure. Sure sir. Sure. answer like basically my this question would basically around you know given the higher complexity and uh the single 56:55 56 minutes, 55 seconds source position this is definitely this definitely will be margin accative right and uh how would how will it be you know 57:02 57 minutes, 2 seconds during ramp up and at mature volumes and this is obviously above companies then get a bit margin band right 57:11 57 minutes, 11 seconds sure I mean uh we won't be able to share see this is a single contract and you're asking us uh specific information on the 57:18 57 minutes, 18 seconds contract it'll difficult to share but uh you know once you understand the process of manufacturing most of these concept questions that you're answering will be 57:26 57 minutes, 26 seconds addressed so I would request you to uh please come down and spend some time with us we'll be able to explain and you 57:33 57 minutes, 33 seconds can also look at you know to draw parallels please look at the you know uh top two or three players that are making 57:40 57 minutes, 40 seconds these kind of components and what is the kind of profitability and bottom line that they do on these segments this is publicly available information you can 57:47 57 minutes, 47 seconds look it up and you'll get a sense of it as well. 57:52 57 minutes, 52 seconds True sir. And also one accounting clarification. Uh I guess in the FI2 annual report you mentioned you there is 58:00 58 minutes capitalization on new product development program. uh uh can you clarify what exact costs are capitalized and uh which balance sheet line they sit 58:08 58 minutes, 8 seconds in the FI26 quantum and uh if you know uh if these costs are fully extended what would the aida bad margin would 58:17 58 minutes, 17 seconds have been would look like yeah we generally don't capitalize any development cost in our balance sheet 58:24 58 minutes, 24 seconds and we expense out as a part of our accounting policies there can be some tools specifically designed for the customer which are capitalized 58:33 58 minutes, 33 seconds to that extent but the general development cost or the general expenses are extensive in the in the pre-indust. 58:42 58 minutes, 42 seconds Got it. That's it from my side and thank you. You're welcome. You're welcome. 58:47 58 minutes, 47 seconds Thank you ladies and gentlemen. That was the last question for today. We have reached the end of question and answer session. I now hand the conference over to the management for closing comments. 58:59 58 minutes, 59 seconds So thank you. Uh so with this I think uh I'd like to take this opportunity on behalf of Azad Engineering, our chairman, our board of directors and all 59:08 59 minutes, 8 seconds all of us. Thank you so much for uh uh you know giving us this opportunity to talk about our business present our 59:15 59 minutes, 15 seconds thesis and how and share how we will be executing FI27 and beyond. Thank you so much. We we very excited about the current phase that Azab engineering is 59:24 59 minutes, 24 seconds in our sectors are and how our uh capacity is coming up online. So we only looking at upwards onwards from this point. Thank you so much. 59:34 59 minutes, 34 seconds Thank you on behalf of Azad Engineering Limited. That concludes this conference. 59:38 59 minutes, 38 seconds Thank you for joining us. You may not disconnect.