Concord Enviro Systems Limited — Q3 FY26

Concord Enviro Systems Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=JXTZ5nlfYp0 Published: 3 months ago

0:01 1 second Good morning ladies and gentlemen and welcome to the Concord Envirro Systems Limited Emmens conference call. As a 0:08 8 seconds 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. 0:19 19 seconds Should you need assistance during this conference call, please signal an operator by pressing star then zero on the touchstone shown for. Please note that this conference is being recorded. 0:30 30 seconds I now hand the conference over to Mr. 0:32 32 seconds Kanak Kana. Thank you and over to you sir. 0:36 36 seconds Thanks and good morning to all the participants on the call and thank you for joining our Q3 and 9 months FI26 earnings call of Concord and Virro 0:46 46 seconds Systems Limited. Please note that we have mailed out the results to everyone and you can see it on our website. It's also uploaded on the stock exchanges. In 0:55 55 seconds case you have not received it, you can write to us. We'll be happy to send it to us. And before we proceed to the call, let me remind you that the discussions may contain some 1:03 1 minute, 3 seconds forward-looking statements and may invoke known or unknown risks, uncertainties, and factors. It might be it must be viewed in the conjunction 1:12 1 minute, 12 seconds with our business model and could also cause future results or performance to vary significantly from what is expressed or implied. to take the 1:20 1 minute, 20 seconds results of this quarter and answer all your queries. We have the management of Concord Envirro Systems Limited with us. 1:28 1 minute, 28 seconds Please welcome Mr. Priyas Goyel, chairman and managing director, Mr. Priya Goyel, executive director, Mr. 1:36 1 minute, 36 seconds Anish Goyel, group CFO. We'll be starting the call with a brief overview of the quarter gone past and then we'll 1:43 1 minute, 43 seconds follow it up with some question and answers. Now with that being said, I'll transfer the call to the management overdue. 1:55 1 minute, 55 seconds Hello, good morning. My name is Prias Goel. Uh, a very warm welcome to Conqueror Envirro's third quarter and 9 2:02 2 minutes, 2 seconds month FI26 earnings call. Thank you for taking the time to join us today. We are beginning a very exciting chapter of our 2:10 2 minutes, 10 seconds journey with the launch of our HX stream heat exchanger products that we launched in Q3 and showcased with the recently concluded Chem exhibition in Mumbai. 2:20 2 minutes, 20 seconds This cementss our place in the process industry where we can apply a mix of our membrane and thermal products generating higher value for the clients as well as 2:28 2 minutes, 28 seconds getting a larger wallet share from the same clients. The HX3 heat exchanger, our next generation shelling tube system 2:35 2 minutes, 35 seconds is engineered for highly corrosive industrial environments. This product directly complements our focus on waste heat recovery for zero liquid discharge 2:44 2 minutes, 44 seconds applications in making the zero liquid discharge not only greener but also lower in cost. This HX product range 2:51 2 minutes, 51 seconds fits directly into flu gas carbon capture applications for both Concord's own carbon capture and utilization 2:58 2 minutes, 58 seconds solution and the broader carbon capture and utilization market where flu gas cooling is an inevitable first step. Our 3:06 3 minutes, 6 seconds solution makes recovering energy a simplified step. 3:10 3 minutes, 10 seconds The focus from the government through a budget allocation for carbon capture and utilization makes us very excited about 3:18 3 minutes, 18 seconds the future opportunities in the near term for this product range. 3:25 3 minutes, 25 seconds We believe this complement our broader strategy of expanding beyond wastewater treatment into adjacent se process separation and sustainability 3:34 3 minutes, 34 seconds applications such as solar photovoltex, green hydrogen, carbon capture and semiconductors. We will continue to 3:41 3 minutes, 41 seconds share updates as these initiatives translate into commercial traction over the coming quarters. With the introduction of this product, Concord 3:49 3 minutes, 49 seconds Enviral is leveraging its over three decades of experience in water and wastewater management and has evolved into a technologydriven globally 3:57 3 minutes, 57 seconds integrated solutions provider. Our focus continues to be on zero liquid discharge and energy efficient technologies that enable industries to meet their 4:05 4 minutes, 5 seconds sustainability goals while optimizing life cycle costs. Our businesses operate across three core segments. Systems and 4:13 4 minutes, 13 seconds plants, consumables and spares, and operation and maintenance, allowing us to serve the entire value chain from design and commissioning through 4:20 4 minutes, 20 seconds long-term performance optimization. In addition, our foray into compressed biogas last year is beginning to show early momentum with initial projects 4:29 4 minutes, 29 seconds moving into execution during Q3 FI26 supported by a strengthened and experienced project team. We continue to 4:36 4 minutes, 36 seconds serve a diversified client base across pharmaceuticals, chemicals, food and beverage, defense, automotive, energy, 4:43 4 minutes, 43 seconds steel, textiles, reflecting the adaptability and scalability of our solutions. The order received from one of the largest tequila brands in Mexico 4:52 4 minutes, 52 seconds is proof of the superiority of our solutions for wastewater globally. In line with our strategy to strengthen our technology capabilities, we have also 5:00 5 minutes made a strategic investment of US2 million for an equity stake in a US-based polymer company. This investment enhances our access to 5:09 5 minutes, 9 seconds advanced material science capabilities and supports our long-term product development road map. This is our second investment in the US in a in a membrane 5:17 5 minutes, 17 seconds technology company. On the lower membrane space, we have expanded our field trials and are changing the face of wastewater treatment with our 5:25 5 minutes, 25 seconds partnership with great technology companies in the international marketplace. 5:29 5 minutes, 29 seconds FI26, we have also faced challenges with delayed project executions. Post Africa, we have also seen delays in land acquisition for the BO project being 5:37 5 minutes, 37 seconds undertaken by our service arm. This has resulted in recheduling of delivery of the systems. Given these shifts, SAP 5:46 5 minutes, 46 seconds reimplementation taking place this quarter and higher engineering lead timeline for large projects currently on order for FI26, we are guiding towards a 5:54 5 minutes, 54 seconds revenue of approximately 600 cr rupees implying an expected growth bank of 2% for the year. While near-term execution 6:03 6 minutes, 3 seconds timelines remain important, we believe this range reflects a balanced view of current visibility and conversion schedules. From an order book 6:11 6 minutes, 11 seconds perspective, our lifetime order book continues to remain very healthy with meaningful execution expected over the midterm. That said, we we recognize the 6:19 6 minutes, 19 seconds need to enhance disclosure granularity going forward. We have issues PCB and ACB metrics this quarter so that 6:27 6 minutes, 27 seconds investors can better track down inflows, execution progress and recurring revenue visibility. Looking ahead to FI27, 6:34 6 minutes, 34 seconds several growth drivers are beginning to shape take shape. We expect CP related orders to start contributing supporting revenues in the next financial year. 6:43 6 minutes, 43 seconds Export markets are also witnessing strong traction and we see this segment emerging as an important contributor to incremental growth. We therefore see a 6:51 6 minutes, 51 seconds strong order book for FI27 to meet our growth targets for the year. Our solutions as a service or SAS business roer is scaling up meaningfully. Water 7:00 7 minutes as a service as a concept is gaining popularity the world over and we believe that partnering with the right global partners will help us scale up closer to 7:08 7 minutes, 8 seconds the heights it can achieve. Our focus on the solar PV industry has resulted in our first order consisting of both ultra 7:16 7 minutes, 16 seconds pure water or UPW and wastewater recycling and reuse. The systems supplied to a leading power company to generate desalinated water for solar 7:25 7 minutes, 25 seconds panel cleaning have also been successfully commissioned at a large uh solar farm in west western India. We 7:32 7 minutes, 32 seconds believe this segment will continue to scale steadily. The energy efficiency of our solutions is what drives us apart 7:41 7 minutes, 41 seconds from others and is being recognized by the market. Discussions with other leading industries in the solar PV manufacturing space are currently at an 7:49 7 minutes, 49 seconds advanced negotiation stage and we expect momentum in this area to build from Q4 onwards. Overall, we remain focused on 7:57 7 minutes, 57 seconds execution discipline, strengthening technology differentiation and building diversified growth drivers across geographies and segments. With that, I'd 8:06 8 minutes, 6 seconds like to now hand over to Mr. player goal elevated director to walk you through the financial performance for Q3 and 9 months of FY26. Thank you. 8:16 8 minutes, 16 seconds Thank you Paras. Uh good morning everyone. Uh for the quarter ended December 25, uh revenue of firm operations stood at 1,245.75 8:25 8 minutes, 25 seconds million compared to 1,248.45 million in Q2 and 1,228.21 million in Q3 FI25. 8:34 8 minutes, 34 seconds uh reflecting a marginal decline of 2% quarteron quarter and a growth of about 1.4% yearonear. Eida for the quarter stood at 43 million compared to 76.57 8:44 8 minutes, 44 seconds million in Q2 FI26 and 17.15 million in Q3 FI25. This represents a decline of 43.8% sequentially while growing at 8:53 8 minutes, 53 seconds 150.7% year-onear. Aida margin for the quarter stood at 3.5% compared to 6.1% in Q2 FI26 and 1.4% 4% in Q3 FI25. 9:04 9 minutes, 4 seconds Net loss for the uh net loss after tax for the quarter stood at 81.77 million compared to a net profit of 44.91 9:12 9 minutes, 12 seconds million in quarter 2 FI26 and a net loss of 85 uh 64 million in Q3 FI25. For the 9:20 9 minutes, 20 seconds 9month uh period ended December 25, revenue from operations stood at 3518.12 9:28 9 minutes, 28 seconds million as against 3,874.46 46 million in the corresponding period last year, reflecting a decline of 9.2% 9:35 9 minutes, 35 seconds year-on-year. Aida for the 9-month period stood at 110.69 million compared to 342.91 billion in 9:43 9 minutes, 43 seconds the corresponding period last year, reflecting a decline of about 67.7% yearonear. Eida margins for 9month FI26 9:50 9 minutes, 50 seconds stood at 3.1% uh versus 8.9% in uh 9month FI25. Uh the net profit after tax 9:58 9 minutes, 58 seconds for the 9-month PIT stood at 44.33 million compared to 43.62 million in the corresponding period last year. While the near-term performance reflects the 10:06 10 minutes, 6 seconds impact of projectiles, our order visibility remains strong. We are confident that the strategic investments we are making in talent, technology and execution will enable us to deliver 10:14 10 minutes, 14 seconds sustainable long-term value. Uh with that we now open the floor for questions. 10:21 10 minutes, 21 seconds Thank you very much. We will now begin with a question and answer session. 10:26 10 minutes, 26 seconds Anyone who wishes to ask a question may press star and one on the touchstone telephone. 10:33 10 minutes, 33 seconds If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. 10:43 10 minutes, 43 seconds Ladies and gentlemen, we will wait for a moment while the question is 10:55 10 minutes, 55 seconds we have the first question from the line of Sukrit Deep Part from Eyesight Private Limited. Please go ahead. 11:04 11 minutes, 4 seconds Two questions. My first question to the CEO is uh looking beyond the guidance which you have given uh what will be the 11:13 11 minutes, 13 seconds key priorities guiding uh the company's strategy to strengthen growth and profitability. How do you plan to 11:20 11 minutes, 20 seconds balance expansion in waste management services with sustaining margins over the next few quarters? That's my first question. I'll ask my second question after this. Thank you. 11:33 11 minutes, 33 seconds Yes, thank you. And that remains a strong priority for us in terms of uh balancing uh margins and uh frankly the 11:41 11 minutes, 41 seconds focus comes from uh differentiated technology and looking at value added solutions for the same uh industrial 11:49 11 minutes, 49 seconds space and I'll take an example of this market where the type of solutions and the value ad that concord as a solution 11:56 11 minutes, 56 seconds provider delivers is very differentiated and which allows us to remain uh you know focused on margin so that will remain a continued focus going forward. 12:07 12 minutes, 7 seconds Thank you. My second question to uh CFO is uh as Concord plans forward, what 12:15 12 minutes, 15 seconds financial signals will drive decisions on cost control, capital allocation and debt management, how will these signals 12:24 12 minutes, 24 seconds influence long-term earning stability and shareholder value creation? Want to understand the plan of action and point of view on this. Thank you. 12:34 12 minutes, 34 seconds Yeah. So, uh, hi Peria. So, see, I think from a long-term value creation perspective, uh, you know, we are 12:41 12 minutes, 41 seconds obviously targeting, uh, the sectors which are adjacent to our business, our core business, which is water and wastewater. Uh, we obviously see the 12:49 12 minutes, 49 seconds need and the drive to, you know, move into larger project executions and that's where the company has been pivoting to over the last few years, uh, 12:57 12 minutes, 57 seconds both in the international and the Indian market space. So I think you know we'll be looking at sectors like CP etc which will add or bring in that value. Uh now 13:05 13 minutes, 5 seconds coming to capital allocation etc. see the company has uh put in capacity over the last I would say five to six years 13:12 13 minutes, 12 seconds where we have built in enough strong capacity to be able to achieve our next uh scale of growth. Uh the focus today remains on new products and technologies 13:20 13 minutes, 20 seconds which we feel are are big contributors to both our existing product and technology and also uh you know uh expanding the market for ourselves 13:29 13 minutes, 29 seconds especially uh going into process industry or going into more value add components uh that we are seeing a demand for in the market and currently 13:38 13 minutes, 38 seconds uh let's say there's no other u any other vendor who's kind of creating that that kind of product in the market. So 13:45 13 minutes, 45 seconds that that remains the uh strategic focus. I'll just hand over to Anish to add some more points. 13:52 13 minutes, 52 seconds Hi Anish here. Uh regarding capital allocation and need for capital uh for up to with our recent IPO and the funds 14:00 14 minutes we have we don't see any need to raise any equity for um at least couple of years or at least we are at least double the top line that we have today. Uh and 14:09 14 minutes, 9 seconds we are adequately funded. So in terms of roe or investors return I think uh we will not ask for any more capital if that answers. Thank you. 14:20 14 minutes, 20 seconds Thank you and best wishes. 14:25 14 minutes, 25 seconds Thank you. We have the next question from the line of Akan Sha an individual investor. Please go ahead. 14:33 14 minutes, 33 seconds Hi sir can you explain concepts but can you explain detail I mean what is happening? Why is the execution lagging since last two 14:42 14 minutes, 42 seconds quarters and uh you have cut the guidance for this year's growth also. So I mean where is it that we are lagging? So I mean 14:51 14 minutes, 51 seconds it's quite long that the execution has somehow been not happening when the order book and the opportunity size is so huge. 15:03 15 minutes, 3 seconds Yeah. Thank you. Sorry. 15:06 15 minutes, 6 seconds Yeah. Yeah. Thank you AM. uh agam I think you know there are a couple of things that have happened this year I think last quarter we had talked about the Kenya project which had uh got 15:13 15 minutes, 13 seconds revised to an FI27 uh year because of some internal aspects at the client's end uh we've seen some 15:20 15 minutes, 20 seconds similar kind of project delays that have taken place uh with key of couple of our key clients also one of our projects which uh you know was being implemented 15:29 15 minutes, 29 seconds by a leasing company had some land acquisition delays so uh there too we missed one quarter's uh uh uh you know let's say execution what should have 15:37 15 minutes, 37 seconds been done in Q3 is is now looking to be a Q4 come Q1 sort of a number and that was also one of our larger projects in 15:45 15 minutes, 45 seconds this financial year. So so yes there has been some slippage in terms of execution but there have been factors which have kind of been beyond our control as well. 15:53 15 minutes, 53 seconds Um we are currently in the midst of an SAP implement reimplementation uh because obviously the company is realigning so that is creating some 16:01 16 minutes, 1 second challenges in being able to catch up with uh execution in Q4. So that is the main reason why uh you know we we're 16:07 16 minutes, 7 seconds kind of lowering the guidance uh for for this year because uh given that we had a a flat Q3 16:14 16 minutes, 14 seconds uh and the Q4 while being on track would only be able to help us reach our uh our revenue target of 600 crores. So so 16:23 16 minutes, 23 seconds that's really been the hit. Um I think long-term you know with with the aspects that we're putting into place uh for our 16:31 16 minutes, 31 seconds long-term growth in terms of our team building you know the project teams have come into place uh with the new products as well uh we have teams in place so I 16:39 16 minutes, 39 seconds think it's reflecting that uh over the next couple of quarters these things will stabilize and and execution will be back on track uh but yeah there is a 16:47 16 minutes, 47 seconds minor hit in in this financial year because of this I just like to add two hits 16:56 16 minutes, 56 seconds considering the two hits which happened this quarter. So uh I mean I'm talking in terms of longer term. So what are we 17:03 17 minutes, 3 seconds doing? I mean let's say some other hit might happen next quarter something else might come up. So so what is the strategy out here or what is the thought 17:10 17 minutes, 10 seconds process? Have you thought anything? I mean how to tackle these uh things? 17:18 17 minutes, 18 seconds Yes sir. So uh I think uh uh in recognizing the fact obviously that uh you know the growth has to be sustained. 17:25 17 minutes, 25 seconds So what we are seeing is a couple of things. Uh first and foremost more importantly we are seeing a stronger 17:32 17 minutes, 32 seconds order book with a bigger focus on Q1 and Q2. uh and that's what we are if you 17:39 17 minutes, 39 seconds look at the current order book and we can probably separately talk granularly as well to look at how the current order book is in fact going to transform into 17:48 17 minutes, 48 seconds quarter 1 and quarter two deliveries and secondly is more of the product uh diversification wherein we're going to 17:56 17 minutes, 56 seconds be get bringing in revenues not only from the core uh vari segment so these are uh two sections which uh which would 18:04 18 minutes, 4 seconds help things improve going forward That's it. 18:08 18 minutes, 8 seconds And uh on the new product which we have launched, can we expect uh commercialization and revenue from next quarter on the Q1 onwards? 18:19 18 minutes, 19 seconds Yes, we we expect the ramp up of orders to start uh in we starting to receive uh orders in this in Q4 which will be for deliveries in Q1 that's 27. 18:34 18 minutes, 34 seconds Okay. Okay. And any big projects which are working for the solar or the semiconductor space any big orders or anything which you have bid for and can commercialize. 18:46 18 minutes, 46 seconds Yes, as we mentioned earlier we are in the negotiation uh negotiation final negotiation stages with uh one of the 18:53 18 minutes, 53 seconds largest players uh in this space. Uh this is going to be a a more groundsy kind of uh uh play but it's a 19:01 19 minutes, 1 second significantly large one. Along with that we are uh also in the final stages for a large uh steel and other metals and 19:10 19 minutes, 10 seconds mining zero liquid discharge. So uh as mentioned earlier from a ramp up to larger project sizes uh there's been 19:18 19 minutes, 18 seconds quite a successful traction there and uh if all goes well we hope that we'll be able to announce uh some good news. 19:26 19 minutes, 26 seconds What is the timeline for this? So I mean when will you come to know whether we are uh winning the order or no or whatever it is? 19:34 19 minutes, 34 seconds It should be in the next 6 weeks. Next 6 weeks. Yes sir. Okay. Okay. Thank you. 19:43 19 minutes, 43 seconds Thank you. 19:46 19 minutes, 46 seconds Thank you. We have the next question from the line of Polaris security. Please go ahead. 19:54 19 minutes, 54 seconds Yeah. Hi. Uh thanks for the opportunity. 19:56 19 minutes, 56 seconds Um so I understand that we have some slippage in that 10 order and one more order which led to this muted execution in the P3 and and P2 but if I look at 20:06 20 minutes, 6 seconds the gross margin they have significantly over the last year and if I look at if you just go back to one year before that 20:15 20 minutes, 15 seconds we used to have I don't know some 47% kind of a gross margin two years back now we have about 37 38%. So what's 20:23 20 minutes, 23 seconds leading to this kind of uh deep in the margin? 20:30 20 minutes, 30 seconds Uh hi Malik. Uh sorry Malik I'm not able to see the numbers that you're reflecting because I think our gross margins have been pretty consistently 20:39 20 minutes, 39 seconds stable. I think we've been between the 48 to 51% that's where the band has been 20:46 20 minutes, 46 seconds over the last I mean I would say couple of years in fact. So uh right now I think if you look at Q3 our our gross 20:55 20 minutes, 55 seconds margin is 49%. And uh if you look at Q2 it was 50%. So I hope you're calculating. 21:01 21 minutes, 1 second So I consider I I consider service charges in a part of the cost only because it's linked to that. So in that in that and if okay if you look at from 21:10 21 minutes, 10 seconds that perspective uh yeah so if I remove the service charge we used to have close 21:16 21 minutes, 16 seconds to around 53% gross margin in 3P up 24 which was close to around uh uh 60% in a 21:24 21 minutes, 24 seconds 3p 25 right and last year and this quarter is close to around uh uh 49% or 21:31 21 minutes, 31 seconds so I know it's yeah that number 50% or so but yeah so why this there is No, no, in December. 21:40 21 minutes, 40 seconds Okay. No, I mean see honestly from a business perspective we haven't really seen any big change in in margins or services because I think see right now 21:48 21 minutes, 48 seconds if you look at the onm business it's it's it's kind of been on the let's say I mean from an overall uh percentage of 21:56 21 minutes, 56 seconds overall turnover right now the on is probably higher so therefore the service charges are higher but uh yes on the project execution side uh you know the 22:04 22 minutes, 4 seconds exports which are generally a slightly higher gross margin product have been lower we have some export projects which will go out in Q4 for as well. So that will probably set right some of the 22:12 22 minutes, 12 seconds numbers in terms of consumption. But overall on a on a granular level across the board for the organization we're not seeing any change in gross margins. What 22:21 22 minutes, 21 seconds we have done over the last quarter is we have uh you know brought in the teams which are looking at uh implementation of the new heat exchanger business the 22:29 22 minutes, 29 seconds the CBG business those teams are strengthened. So in fact the the major hit that we're seeing this year is because of the higher employee costs 22:37 22 minutes, 37 seconds that have that have risen because of this. Now part of that will obviously come from uh you know the growth I mean 22:44 22 minutes, 44 seconds the the turnover to Evida will come once the growth from these divisions starts to scale up uh but otherwise I mean on a 22:51 22 minutes, 51 seconds overall water waste water business perspective uh I think we're seeing margins to be pretty similar to what they have been 23:00 23 minutes in your assessment for the last look at that first nine months we have not seen any growth we still expecting to to do 23:09 23 minutes, 9 seconds the same kind of revenue which was last year of around 600 CR right that implies close to around 250 CR of top line and 23:16 23 minutes, 16 seconds in Q4 confident of you are because see what's happening is that every quarter we started the year with some around 18 23:25 23 minutes, 25 seconds 20% number then we came down to 12% growth number now we are talking about 23:32 23 minutes, 32 seconds kind of in the growth every quarter there has been a uh downward revision in the guidance That's number one. And is 23:40 23 minutes, 40 seconds this is this guidance? Yes. Given that this financial year is very very flatish number and you seeing that the slippage 23:48 23 minutes, 48 seconds of the order to the next next financial year, next financial year can be very very big number. Are we looking at the 30 40% kind of a growth because of the 23:56 23 minutes, 56 seconds slippage of this uh FA 26 project which 27? 24:01 24 minutes, 1 second Um Malik I would probably not be able to comment on that completely right now. Um but I mean see yeah the orders are not gone away the orders have just been uh 24:09 24 minutes, 9 seconds you know delayed to FI27. So we have to look at execution we have to look at a lot of other internal requirements while doing that. While yes in principle that 24:18 24 minutes, 18 seconds should translate especially we have seen good order traction in the last quarter. 24:22 24 minutes, 22 seconds Uh so if you see the order book uh we have replaced more than what we have supplied in the last quarter. So uh we and we continue to see that in fact even 24:29 24 minutes, 29 seconds in this quarter our expectation is that our order book will will will exceed. uh so you know given that execution challenges are there in the in the 24:37 24 minutes, 37 seconds business uh with respect to certain contracts do move uh depending on what the client's requirement is we have a lot of sites where civil works are not 24:45 24 minutes, 45 seconds completed so therefore clients with daily deliveries so you know these things do keep happening as projects keep getting executed so I think that 24:52 24 minutes, 52 seconds risk will will remain with us uh but but yeah I mean a lot of the orders which we are talking about are translating into revenue uh in FI27 so that should kind 25:01 25 minutes, 1 second of add up numbers now whether that translates into 40% growth. I I would refrain from committing on that right now. Sure. Great. 25:09 25 minutes, 9 seconds Thank you. 25:14 25 minutes, 14 seconds Thank you. A reminder to all the participants, you may press star and one to ask a question. We have the next 25:21 25 minutes, 21 seconds question from the line of Sonia Viker from Balalan Rocha PM. Please go ahead. 25:29 25 minutes, 29 seconds Hello, thank you for the opportunity. Uh so last quarter in the corn call you had revised your guata marginal guidance 25:37 25 minutes, 37 seconds from 16 to 17% to 15 to 16%. Now considering uh Q3's performance uh uh do 25:45 25 minutes, 45 seconds you think for fobia we'll be able to deliver that 15 to 16% aida margin? 25:52 25 minutes, 52 seconds Uh no son hi uh son so there will be an impact because of the lower revenue uh there will be an impact in terms of the 25:59 25 minutes, 59 seconds uh eida um I think uh you know given the higher employee cost and everything I think that's almost we're looking at a 2 to 3% impact there so yes I mean it 26:08 26 minutes, 8 seconds would kind of go down um we're looking at anywhere between 10 to 12% at the current moment 26:17 26 minutes, 17 seconds okay and um within what you were discussing that these orders which were impacted uh there's likely chance that 26:25 26 minutes, 25 seconds that will come in FY27. So from FY27 perspective will the margin come back to the same trajectory this 15 16 or 17% in 26:34 26 minutes, 34 seconds that range we'll be able to achieve that. 26:36 26 minutes, 36 seconds Yeah see that's a target uh I think you know given that couple of the products that we've been working on over the last 12 18 months are now at uh you know at 26:45 26 minutes, 45 seconds commercialization stage. So obviously a lot of that investment that has gone in there in developing product style and testing them uh obviously all of that 26:52 26 minutes, 52 seconds will also kind of go away and trans translate to margin. So our our target a bit does remain between the 14 to 16% uh band for next year. 27:02 27 minutes, 2 seconds Okay. Okay. Thank you sir. Yeah. 27:07 27 minutes, 7 seconds Thank you. A reminder to all the participants you may press star and one to ask a question. We have the next 27:15 27 minutes, 15 seconds question from the line of Bala Subramanyan from Adhan Capital. Please go ahead. 27:21 27 minutes, 21 seconds Good morning sir. Uh thank you so much for the opportunities sir. 7.5 uh t per day CO2 capture is uh capture pilot is 27:30 27 minutes, 30 seconds rated uh for H2 FIA 27. So I'm trying to understand the cost competitiveness and the penalties uh in this site. uh the 27:39 27 minutes, 39 seconds government penalty for non-complaints is set to 2x of the average uh carbon credit price. Uh I'm trying to understand what is the estimated 27:48 27 minutes, 48 seconds levelized uh cost cost of uh cost of capture per ton for per ton of CO2 using 27:56 27 minutes, 56 seconds your biological system and uh obviously it should be below the penalty rate uh for that cost. I'm I'm trying to 28:05 28 minutes, 5 seconds understand what is the difference between the penalty rate and the cost of the cost of using our biological system. 28:13 28 minutes, 13 seconds So I I'm trying to understand how this is scalable in future. 28:18 28 minutes, 18 seconds Yeah. Hi good morning. So uh yes I I think uh maybe we can share some information separately with you uh on 28:25 28 minutes, 25 seconds the details of the cost. Uh but largely speaking there are two or three points which I'd like to highlight to you. One is that the biological carbon capture 28:34 28 minutes, 34 seconds systems tend to be more uh capital efficient than the uh chemical uh capture systems. Uh so there's a 28:42 28 minutes, 42 seconds significant advantage in the biological carbon capture kind of uh technology with heat recovery that that we provide. 28:49 28 minutes, 49 seconds Um on the on the cost versus the uh let's say the penalty for not meeting the targets. uh it's a function largely 28:58 28 minutes, 58 seconds of the scale of the projects and this is something which I guess we will have a little bit more clarity on once we are through with uh the pilots we are 29:06 29 minutes, 6 seconds developing models for the uh larger scale uh projects uh projects as well and the third thing which I'd like to 29:14 29 minutes, 14 seconds draw your attention to is that I think we are seeing interest across the sector which is not not not only driven by the 29:23 29 minutes, 23 seconds uh by by the by the penalty or not matching which is only let's say limited to uh a set of sectors today. But we're 29:30 29 minutes, 30 seconds also seeing that there is genuine demand from switching over to uh you know uh uh being becoming green uh becoming carbon 29:39 29 minutes, 39 seconds neutral from a customer-driven focus in chasing textiles and pharmaceuticals from export uh exportdriven industries 29:48 29 minutes, 48 seconds where you know uh selling to the EU for example there is there's not necessarily a government target in the Indian market 29:55 29 minutes, 55 seconds space which is driving demand there. So there are a lot of factors but we'll certainly reach out to you and share more uh information for on the scale up 30:03 30 minutes, 3 seconds uh and the cost economy does that answer your question? 30:15 30 minutes, 15 seconds Yes ma'am. Uh sir my next question uh on the nuclear side we have seen uh lots of 30:21 30 minutes, 21 seconds uh nuclear uh uh orders uh awarded to players in the industry. I'm trying to understand uh uh like uh uh what is the 30:30 30 minutes, 30 seconds margin profile uh in our core area uh for especially in the nuclear specific and secondly if you could touch up on uh 30:38 30 minutes, 38 seconds green hydrogen side and especially uh what's the total address the market share especially in electrolyer uh 30:47 30 minutes, 47 seconds cooling loop or the feed water for the hydrogen model uh side Hello. 31:00 31 minutes Yes. Sorry. Uh so the first part of your question is uh uh was like could you please repeat the first part? So first 31:08 31 minutes, 8 seconds part like uh uh especially in the nuclear side nuclear grade desalination required in specific uh safe quality 31:16 31 minutes, 16 seconds certifications that's the first thing whether we have all the certification in place and whether we can able to participate uh 31:24 31 minutes, 24 seconds all the nuclear related uh uh uh contracts and what is the margin profile uh uh in those nuclear nuclear areas. uh 31:33 31 minutes, 33 seconds the margin profile is lower or higher uh uh because of uh stringent complaints cost. Yes. 31:40 31 minutes, 40 seconds Yeah. What we seeing on the nuclear side is we have uh uh project and orders which are currently in the uh in under 31:49 31 minutes, 49 seconds execution. So the margin profile we are seeing is is quite uh quite in the range of the regular margin. uh this remains 31:58 31 minutes, 58 seconds uh uh uh significantly uh comparative uh uh space here. 32:07 32 minutes, 7 seconds Okay. So on the second part in the green hydrogen side I'm trying to understand what is the total addressable market uh 32:14 32 minutes, 14 seconds size for electrolyer cooling loop and the feed water for the hydrogen models 32:21 32 minutes, 21 seconds and uh what are the opportunity size uh uh for our foot area? 32:27 32 minutes, 27 seconds Yeah. Um uh as you have probably seen over the last few years uh this has been uh there are several reports and numbers 32:35 32 minutes, 35 seconds on on the TAM in this in this uh in this segment but uh we've seen significant lag in terms of execution and projects 32:44 32 minutes, 44 seconds being announced and actually kicking off ground. So um my sense is that there is there is a significant difference uh on this and projects are moving slowly. 32:57 32 minutes, 57 seconds Okay. So my last question I think we have uh entered into solar PV diswater and steel and uh semiconductor water 33:05 33 minutes, 5 seconds treatment side and then solar uh PV side what is the contract value and uh you 33:11 33 minutes, 11 seconds could share uh further uh pipeline at the opportunity side. 33:18 33 minutes, 18 seconds uh you can also you can also share some uh detail detail support semiconductors because we have seen lot of fabrication 33:26 33 minutes, 26 seconds plays are coming up like micron uh uh CD power I'm just trying to understand uh 33:33 33 minutes, 33 seconds like what kind of inquiry pipelines we have in steel semiconductor and uh also waste water 33:41 33 minutes, 41 seconds yeah uh sorry did you mention steel as well sir uh yes sir waste uh uh pickers as 33:49 33 minutes, 49 seconds Yes, that's right. So, I think if you look at just the whole scheme, solar semiconductor, uh the pipeline would probably be uh 33:57 33 minutes, 57 seconds north of 800 crores uh at the current moment. Uh which is what I would call kind of the u you know the active or the 34:05 34 minutes, 5 seconds very active uh pipeline on the on the steel side. It's a lot of waste water, little liquid discharge. It's a lot of waste pickle liquor recovery which you 34:13 34 minutes, 13 seconds know the industry spends a lot of money on external disposal. On the solar side we have uh we have some great solutions 34:21 34 minutes, 21 seconds for dealing with the concentrated alkaline and concentrated acid streams which uh which is really hazardous waste 34:29 34 minutes, 29 seconds where the where the industry spends a lot of money uh again in really external disposal of these uh waste streams which we are today able to conveniently offer. 34:40 34 minutes, 40 seconds the low cost green type of model uh model design. Um so between both the 34:46 34 minutes, 46 seconds steel semiconductor and uh solar markets uh there there's considerable traction. 34:55 34 minutes, 55 seconds Okay. Thank you sir. Thank you. 35:00 35 minutes Thank you. A reminder to all the participants you may press star and one to ask a question. We will take the next 35:08 35 minutes, 8 seconds question from the line of Draam from BNK securities. Please go ahead. 35:13 35 minutes, 13 seconds Hi sir, thank you for taking up my question. So just circling back to the previous participants question what is what is giving us the guidance of 600 35:23 35 minutes, 23 seconds rows maintaining for FY26 while in last call you have committed that some of our orders are in finalization of completion 35:31 35 minutes, 31 seconds which is expected to give us the boost of topline margins which hasn't happened so far. So what is giving the confidence to maintain it 600 crores 526? 35:44 35 minutes, 44 seconds Hi D. Uh the these orders are currently firmed up. In fact uh I mean we we're midway through our quarter. So uh a lot 35:51 35 minutes, 51 seconds of this is also supplied. So right now we're not banking on any uh new orders. 35:56 35 minutes, 56 seconds This is basically all orders in hand which we are executing through to 31st of March. Uh so so yeah the 600 number 36:04 36 minutes, 4 seconds should not go astray. We have a couple of discussions ongoing with respect to deliveries for the deferred projects. So they could go either ways. We're still 36:13 36 minutes, 13 seconds obviously hoping for the best but I think as a conservative uh practice we giving a guidance which we know is uh again you know we're going to try and 36:22 36 minutes, 22 seconds meet okay and second one is your order inflow guidance in Q1 you've guided for 600 36:29 36 minutes, 29 seconds crores to 700 crores of order inflow and even order inflow has also remained uh below your guidance what order book do 36:38 36 minutes, 38 seconds you want to close by the end of S526 so so that we can to cut by 27. 36:45 36 minutes, 45 seconds uh yeah dear so I think see there we have I mean roughly about 300 odd crores is revenue that is coming from the after 36:54 36 minutes, 54 seconds sales business right that's the on&M and the spares and consumables so I mean leaving that aside 37:02 37 minutes, 2 seconds uh I mean ideally we would like to our target is always to get to at least 1x coverage uh right now if you look at the 37:10 37 minutes, 10 seconds current order book uh that we have we are at about 60% uh coverage of of let's say a 20 25% 37:18 37 minutes, 18 seconds growth target for FI27 if we set that then we are at about 60% of that so yeah we're looking for anywhere between order 37:25 37 minutes, 25 seconds intake of about 160 to 180 crores uh in this quarter uh obviously as Pas mentioned we're 6 weeks away from a 37:32 37 minutes, 32 seconds large order discussion so uh I think uh that is something that will shape up our order book but uh given the three or 37:40 37 minutes, 40 seconds four large projects that we have currently in pipeline we're bidding for that uh I think if if we do not you know 37:47 37 minutes, 47 seconds win something which is imminent in the in this quarter we'll probably close out a couple of the larger projects in by Q1 37:54 37 minutes, 54 seconds of FI27. So uh that should kind of give us a 1x coverage if not by uh 31st March at least by 30th of June for FI27. 38:04 38 minutes, 4 seconds Okay just last question sir. Uh so the orders that you have seen for the delay in this financial year 38:11 38 minutes, 11 seconds since this has rolled forward to FY27 uh what is the kind of margins that you're expecting? Do we still have any margin 38:19 38 minutes, 19 seconds dilutive orders in the order book apart from those few orders which got delayed? I mean see they're not margin dilutive. 38:27 38 minutes, 27 seconds It's more like uh the shift has happened. So you know delivery and topline will will get booked in the next year. uh but I I think you know if you look at our current order book the mix 38:35 38 minutes, 35 seconds of orders that we have uh are pretty healthy it's it's it's quite regular for our business so you know if you if you 38:43 38 minutes, 43 seconds ignore the uh increase in manpower cost that we've seen this year uh slight increase in expenses you know our I I wouldn't say our gross margins are 38:51 38 minutes, 51 seconds really moving too much uh they're pretty much in the same band so it's just a translation to aid because of some of these expenses that is going to be a 38:59 38 minutes, 59 seconds little bit margin negative so as I said we are targeting between 10 to 12% a bit uh for this financial year which is lower than the 14% that we had but 39:07 39 minutes, 7 seconds that's purely a hit because of the lower absorption of fixed overheads uh to the top line that we are now projecting. 39:16 39 minutes, 16 seconds Okay. Okay. Just this just last question I come back in since you're talking about some large orders. Previously we have seen working capital getting 39:24 39 minutes, 24 seconds affected due to some large orders from the IGO. Now again you're talking about some large orders. So do we see an increase from current levels of working 39:33 39 minutes, 33 seconds capital next year or how how how do we have to see this? 39:40 39 minutes, 40 seconds Hi Anish here uh yes the there was working capital which got uh there the 39:47 39 minutes, 47 seconds project is already executed so that working capital will be allocated in these projects so there will not be any increase and now these projects are 39:55 39 minutes, 55 seconds little smaller in chunks than what the aru as a single project was we don't see any increase in working capital rather there will be some 5 to 10% reduction 40:04 40 minutes, 4 seconds only got any target of working capital days that you want to have For 527 40:12 40 minutes, 12 seconds it will be in the same range. Today on a net net working capital we are close to 127 days. We will be closer to 120 125 40:20 40 minutes, 20 seconds days while we'll attempt to reduce the days even more. Thank you. Okay. Thank you. 40:29 40 minutes, 29 seconds Thank you. A reminder to all the participants you may press star and one to ask a question. We have the next 40:37 40 minutes, 37 seconds question from the line of Sedhar Pyani, an individual investor. Please go ahead. 40:45 40 minutes, 45 seconds Hello. Yeah. Am I able? Yes. 40:49 40 minutes, 49 seconds Hi. Good morning. Uh so I just wanted to understand that last quarter you had guided that you know there were a couple of CBG projects that you are looking at 40:56 40 minutes, 56 seconds for an execution perspective starting Q3. uh just wanted to get an update on that and how are you looking at the overall landscape because we are seeing 41:04 41 minutes, 4 seconds that you know there have been a lot of CBG plans that are getting implemented under the SATA scheme. So just wanted some thoughts from you on that. 41:14 41 minutes, 14 seconds Yes. Hi. uh yeah so the uh current uh kind of projects that we have they start execution in uh in Q3 and uh I think we 41:23 41 minutes, 23 seconds will complete uh most of it by uh Q1 uh end of Q1 uh from the current order book 41:30 41 minutes, 30 seconds standpoint uh we we are seeing good uh good inquiry traction as well there are uh uh from standalone operators to 41:39 41 minutes, 39 seconds larger kind of more consolidated players who are looking for uh uh you know good uh techn technology, low um low energy, 41:48 41 minutes, 48 seconds adaptive energy consumption and reliability in terms of operations. So uh we have several active conversations 41:55 41 minutes, 55 seconds ongoing with uh uh with uh within the industry with with customers. We definitely see uh this to be interesting for uh FI condition. 42:08 42 minutes, 8 seconds Okay. Sure sir. And uh just one more followup uh there was I think in the last call you had uh you know informed us about a desalination project where we 42:17 42 minutes, 17 seconds were in you were uh sort of shortlisted as the L1 for that entire project. Any updates on that project if it is going forward or not? 42:26 42 minutes, 26 seconds Yeah that's converted to an order uh it's an order book this year this quarter. Okay great thank you so much sir. 42:33 42 minutes, 33 seconds Yeah thank you. A reminder to all the participants, you may press star and one to ask a question. 42:48 42 minutes, 48 seconds As there are no further questions from the participants, that concludes the question and answer session. I now hand the conference back to the management 42:55 42 minutes, 55 seconds for closing comments. Thank you and over to you, sir. 43:00 43 minutes Thank you everyone for your time. Uh we look forward to speaking to you in the next quarter. Thank you. Thank you. 43:07 43 minutes, 7 seconds Thank you members of the management. On behalf of Concord Envir Systems Limited, that concludes this conference. Thank you for joining with us today and you may now disconnect your lights.