Cyient Limited — Q3 FY26

Cyient Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=LRxHT_zu4Z0 Published: 3 months ago

0:01 1 second Ladies and gentlemen, good morning and welcome to the science semiconductors conference call [clears throat] hosted by Science Limited. As a reminder, all 0:10 10 seconds participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. 0:18 18 seconds Should you need assistance during the conference call, please signal the operator by pressing star then zero on your touchstone phone. I now hand the 0:27 27 seconds conference over to Mr. Krishna Bodhanapu from Science Limited. Thank you and over to you sir. 0:34 34 seconds Thank you very much Ryan and good morning ladies and gentlemen. I'm Krishna Bodhanapu executive vice chairman and managing director of scient 0:41 41 seconds limited and present with me on this call are Trabaka Raka president and chief financial officer Scient Limited, Suman 0:49 49 seconds Naray CEO Science Semiconductors and Rama Moan CFO Science Semiconductors. 0:55 55 seconds Firstly, thank you very much for joining us today, especially on a very short notice. I'm very excited to share some transformative developments that 1:03 1 minute, 3 seconds position science semiconductors as a leader in India's semiconductor ecosystem and a global player in power 1:11 1 minute, 11 seconds efficient solutions for AI and industrial applications. 1:15 1 minute, 15 seconds As I have stated before and in prior crawls, we carved out semic semiconductor with a mission to become 1:22 1 minute, 22 seconds India's first and largest semiconductor company owning intellectual property and delivering chips through a fabulous 1:30 1 minute, 30 seconds model. This was done only about 9 months ago and I'm very very proud to say that we have made significant progress in 1:37 1 minute, 37 seconds this journey and that is the reason for requesting you to be on the call today to update you on a very significant 1:44 1 minute, 44 seconds milestone but also give you some color on some other announcements that we have made in the very recent past. 1:52 1 minute, 52 seconds There are three parts to our journey. 1:54 1 minute, 54 seconds There are three objectives or three goals. First is delivering high-end services. Second is providing end-to-end 2:01 2 minutes, 1 second custom chips that is owning the design of the chip, manufacturing of the chip, OSAT which is the fabrication, testing 2:08 2 minutes, 8 seconds and packaging uh and which we refer to as turnkey ASIC and lastly developing 2:15 2 minutes, 15 seconds our own custom chips for specific applications. 2:19 2 minutes, 19 seconds I'm very very pleased to say that on each one of these pillars of growth, we have delivered a significant progress 2:27 2 minutes, 27 seconds aligning our strategy and setting ourselves up very well for next year. A testament to our strength in services is 2:35 2 minutes, 35 seconds our recent win with the semiconductor complex of India Limited. An announcement which SCCL themselves had 2:42 2 minutes, 42 seconds made and which reflects growing customer confidence in our ability to deliver complex semiconductor programs especially those of national interest. 2:54 2 minutes, 54 seconds In the second pillar which is custom ASIC, we have worked with Azimut to design and deliver India's next 3:02 3 minutes, 2 seconds generation smart smart meter chip which you may have seen minister Ashwini Wishnner himself launched which is a 3:10 3 minutes, 10 seconds great testament to our capability and again another very important part of the initiative to support the government's 3:17 3 minutes, 17 seconds focus on developing intellectual properties of semiconductors in India. 3:22 3 minutes, 22 seconds Now coming to the third pillar i.e. the pillar of developing our own custom products for specific applications. 3:29 3 minutes, 29 seconds Given our strength in power and power management, our focus is to develop our own products for power related 3:37 3 minutes, 37 seconds applications especially for applications that consume a lot of power data centers, artificial intelligence in uh 3:45 3 minutes, 45 seconds electrification including electric mobility and industrial applications. 3:51 3 minutes, 51 seconds Worldwide leaders have pointed out to the fact that power is the single biggest detriment to the adoption of AI. 3:58 3 minutes, 58 seconds You may know that a single AI query consumes 100 times as much power as a Google query. Globally, the AI 4:06 4 minutes, 6 seconds electricity demand will reach 21% by 2030, which to put it in context is roughly the same as the combined 4:15 4 minutes, 15 seconds electricity electricity use of India and Japan put together today. And this is just to let servers run. 4:25 4 minutes, 25 seconds It is clear that one of the biggest problems to scaling AI at scale and of course AI is one element but like I said 4:32 4 minutes, 32 seconds other elements like electrification, electric mobility, data centers is having dramatically more power efficient 4:39 4 minutes, 39 seconds chips. We are developing our own custom products to cater to this particular market. We've completed a product 4:47 4 minutes, 47 seconds portfolio definition. We have filed for patents and we're well on our way to define the product architecture and this 4:55 4 minutes, 55 seconds is a remarkable achievement within a six-month time frame which establishes the company and provides a solid foundation and I especially want to 5:04 5 minutes, 4 seconds compliment the leadership team two of whom Sum and Rama are on this call but a much larger leadership team who are 5:11 5 minutes, 11 seconds working on product development product architecture etc. And I'll reiterate that what we have achieved in in about nine months now is remarkable. 5:21 5 minutes, 21 seconds This third pillar is what the majority stake in kinetic technologies which we announced last evening India time comes 5:29 5 minutes, 29 seconds in. It is not an expansion but it accelerates our product strategy. Uh like I said we've defined a product strategy the product architecture and 5:38 5 minutes, 38 seconds execution and this accelerates this execution. Kinetic already has proven products and 100 plus intellectual 5:46 5 minutes, 46 seconds properties which almost doubles the market size that we can address for data center AI and industrial applications. 5:56 5 minutes, 56 seconds This acquisition task plays a critical role in further strengthening and accelerating our IPled play which will 6:04 6 minutes, 4 seconds subsequently position science semiconductors for substantial growth, greater revenue visibility and strong 6:11 6 minutes, 11 seconds longerterm returns. Well, they have Kinetic Technologies has over 20 years of experience in the industry. Uh they 6:18 6 minutes, 18 seconds were founded around 20 2006. deep customer relations and they not just build products and IP but more 6:26 6 minutes, 26 seconds importantly the ability to participate in the ecosystem which accelerates our journey significantly. 6:33 6 minutes, 33 seconds The acquisition is expected to be EPS accative from year two but will be ebitive right from year 1 which will be our FY27. 6:44 6 minutes, 44 seconds In line with our mission, we have made targeted and disciplined investments and partnerships over the last 6 to9 months. 6:51 6 minutes, 51 seconds These significantly strengthened science semiconductors foundation and position the business very well for substantial 6:58 6 minutes, 58 seconds growth. These investments have focused on strengthening talent, expanding capabilities and building a robust 7:05 7 minutes, 5 seconds partnership ecosystem and you would have seen multiple announcement along those lines with companies like NATAS, Global 7:12 7 minutes, 12 seconds Foundaries, MIPS etc. To say the least, we also have maintained a clear line of sight for revenue and margin expansion. 7:21 7 minutes, 21 seconds I'm personally very excited about the business prospects especially given that semiconductors are at a ripe stage for 7:28 7 minutes, 28 seconds evolution in the Indian market. 20% of the world's design talent is available in India for this segment but there are 7:36 7 minutes, 36 seconds no standalone semiconductor leaders from India and that is what we're excited to address and build on. 7:44 7 minutes, 44 seconds Science Semiconductors is really uniquely positioned to fill this gap scale globally and in nine months we have made tremendous progress towards 7:52 7 minutes, 52 seconds our goal and strategy and have demonstrated strong executional agility which gives me the confidence that we 8:00 8 minutes will succeed. we have the opportunity to create a very substantial business along the three lines, the three pillars of 8:09 8 minutes, 9 seconds uh high-end services, turnkey as and custom products and I'm confident that we will make history as the first 8:17 8 minutes, 17 seconds semiconductor product company from India with products for the world but of course underlined 8:23 8 minutes, 23 seconds by a strong demand in India itself for these products. I continue to look forward to your support in building this 8:31 8 minutes, 31 seconds business out. With this, let me hand it over to Suman who will take us through some of the details of this acquisition 8:38 8 minutes, 38 seconds that is of Kinetic Technologies and more importantly lay out the broader strategy and his growth plans for science semiconductors. Over to you Sum. 8:51 8 minutes, 51 seconds Thank you Krishna for setting the context and framing the journey we're on. Let me now walk you through the thinking behind our business, the 8:59 8 minutes, 59 seconds transact transaction and most importantly where this journey is taking us. The first questions investors naturally ask are why is there a 9:08 9 minutes, 8 seconds three-pillar strategy? Who are we trying to become? And how does Skinetics fit into this investment thesis? Having built and run multiple semiconductor 9:16 9 minutes, 16 seconds businesses over the last 30 years, one lesson stands out clearly to me. True product differentiation, scalable and 9:24 9 minutes, 24 seconds profitable growth and long-term shareholder value in a semiconductor business is created through sustained investment in R&D, control of the 9:33 9 minutes, 33 seconds semiconductor ecosystem for cost reduction and the ownership of intellectual property and patents. The 9:40 9 minutes, 40 seconds government of India recognized that the country lacks global scale R&D and IP owning semiconductor companies and is 9:47 9 minutes, 47 seconds actively pushing to change this through policy support and ecosystem investments. This creates a powerful structural tailwind for companies like 9:56 9 minutes, 56 seconds us that are willing to make this transition. Our services business, the first pillar of our strategy, delivers three outcomes. cash generation, 10:05 10 minutes, 5 seconds near-term revenue growth, and continuous technology refresh for our teams. Over the last 20 years, we have deep we have 10:12 10 minutes, 12 seconds built deep credibility in semiconductor service and evolved from a staff augmentation to a high-end outcomedriven engagement, creating a stable foundation to fund and drisk our product strategy. 10:24 10 minutes, 24 seconds A clear proof of our high-end service offering is our win to execute the SCCL FAB in Mahali for 180 nanometer process 10:32 10 minutes, 32 seconds upgrade. A complex multi-artner program that demonstrates our ability to orchestrate ecosystems, integrate global 10:40 10 minutes, 40 seconds technology partners and deliver large scale mission critical semiconductor programs. Growth opportunities in semiconductor services lies also on 10:49 10 minutes, 49 seconds advanced nodes below 7 nanometers driven by AI and high performance compute. Our second pillar of the business is our 10:56 10 minutes, 56 seconds custom ASIC turnkey, a bcope model that is built to order. This is our midterm growth strategy engine for the next two 11:05 11 minutes, 5 seconds to three years. Demand for custom chips is growing three times faster than standard products. Yet the market remains structurally underserved and 11:13 11 minutes, 13 seconds mid-tier customers are left without dependable partners for higher levels of integration and low volume production. 11:20 11 minutes, 20 seconds And this is the gap that we're targeting. With over 600 IP blocks, 40 delivered AS6 and decades of experience, 11:28 11 minutes, 28 seconds we offer a differentiated execution model, front-end architectural le from Europe and the backend execution scaled 11:34 11 minutes, 34 seconds in India. Our ability to deliver high integration, form factor reduction, seamless customer IP integration and 11:42 11 minutes, 42 seconds efficient low volume production uniquely positions us to win in the custom ASIC market. As Krishna mentioned, our smart 11:50 11 minutes, 50 seconds metering SOC developed entirely India is a great example which demonstrates our ability to deliver high customized 11:57 11 minutes, 57 seconds silicon at scale from architecture to production. In short, our ASIC business combines the above market growth, deep 12:06 12 minutes, 6 seconds customer stickiness and capital efficient execution forming a strong foundation for our third pillar of the 12:12 12 minutes, 12 seconds strategy which brings out to the ASSPs or application specific standard products where we are targeting specific 12:20 12 minutes, 20 seconds end markets with our own custom IP and design flows to build custom products in power. These are high value custom power 12:29 12 minutes, 29 seconds platforms designed for high growth markets. AI data centers, AJ AI, industrial automation and electrification markets where 12:37 12 minutes, 37 seconds performance, efficiency and reliability directly translate into pricing stickiness, higher margins with large 12:45 12 minutes, 45 seconds volume production. As global electricity demand continues to be driven high by 12:52 12 minutes, 52 seconds AI, we need more power semiconductors over time to drive the power conversion. 12:57 12 minutes, 57 seconds In fact, power semiconductors are the largest analog and mixed signal market with over a $40 billion TAM and it's 13:05 13 minutes, 5 seconds most disrupted because of AI. As Chris mentioned, we already completed a product definition across two product 13:13 13 minutes, 13 seconds portfolios that are focused on high voltage 800 volts AI data center custom products to address this challenge. In 13:20 13 minutes, 20 seconds just 3 to four months, we have engaged with 15 plus customers, iterated on product architecture and filed patents around our differentiated approach. 13:30 13 minutes, 30 seconds We're now entering the build and revenue phase which requires both time and investment. And this is where kinetic 13:37 13 minutes, 37 seconds technologies becomes transformational in this acceleration for us. They are experts in improving efficiency for power conversion and reducing losses. 13:48 13 minutes, 48 seconds What excites me the most about kinetic comes down to four reasons. First, the acquisition doubles our addressable 13:54 13 minutes, 54 seconds market to 8.5 billion and gives us a clear path to leadership in power conversion technologies for edge AI and 14:02 14 minutes, 2 seconds data centers where Kinetic already has proven offerings. Second, Kinetic brings about 250 ASSP products and 100 plus 14:11 14 minutes, 11 seconds product patents which we can cross leverage both across our third pillar of ASSP custom products for the power 14:19 14 minutes, 19 seconds market where we own our own IP and our second pillar which is custom AS6. This is why we believe that the future revenue growth will be nonlinear for us. 14:28 14 minutes, 28 seconds Third, connectic customer relationships are exceptionally deep. Most customers have been with them for 10 plus years, 14:35 14 minutes, 35 seconds reflecting strong product conviction, high switching costs, and the enduring value of their IP. Their ability to pivot and extend core IP to increase 14:44 14 minutes, 44 seconds transient response is particularly compelling. Fourth, Kinetic is immediately financially creative. It will more than double semiconductor 14:53 14 minutes, 53 seconds revenue for sign semiconductor along with positive EBID cash generation and sustainable EIDA margins meaningfully 15:00 15 minutes higher than our services business. In summary, Kinetic accelerates our power strategy by years, expands our market 15:08 15 minutes, 8 seconds opportunity, strengthens our IP mode and improves our financial profile, making a critical step in building a high margin 15:16 15 minutes, 16 seconds global power semiconductor company from India for the world. You may have heard of our recent partnerships we announced in the semiconductor ecosystem. Let me explain how they fit into our strategy. 15:27 15 minutes, 27 seconds Building a successful semiconductor company requires five critical building blocks. And we've been deliberate about assembling each one. First, the fab 15:36 15 minutes, 36 seconds access and wafer economies. You need a foundry partner that provides reliable supply and favorable pricing because the 15:43 15 minutes, 43 seconds wafer alone console produce 60% of the cost. That is why our partnerships with global foundaries is very important. 15:50 15 minutes, 50 seconds Second, assembly, packaging and test. 15:53 15 minutes, 53 seconds Assembly and packaging are the second largest cost components and becoming and also a source of product differentiation. This is where our 16:01 16 minutes, 1 second advisers like SA from anchor brings deep expertise. Third, EDA tools access and alignment with India semiconductor 16:08 16 minutes, 8 seconds commission. Here's where Jasmindra Auja plays a clear key role for us. He's the advisor to the ISM and former head of 16:16 16 minutes, 16 seconds cadence, the leading EDA vendor and gives a strong alignment on tools, talent and policy. Fourth is test and 16:24 16 minutes, 24 seconds validation at scale. Power products make will succeed only if they perform reliably in real world conditions. 16:30 16 minutes, 30 seconds That's why we partner with Anora, a leading test solution provider in semiconductors for validating our 16:37 16 minutes, 37 seconds products at scale. Finally, we have access to compound semiconductors like GAN for data centers by partnering with 16:44 16 minutes, 44 seconds Navitas to deliver system level solutions for high voltage GAN technology is essential and our partnership with Navitas a global leader 16:52 16 minutes, 52 seconds in GAN allows us to co-develop new products and service the Indian market effectively. This is how partners and advisers have come together to fit our 17:01 17 minutes, 1 second and align with our strategy. The result is a business with will be with a result with the business with durable margins, 17:08 17 minutes, 8 seconds expanded profitability and profits that grow faster than revenue. Exactly the model long-term semiconductor investors reward. In short, with this ecosystem 17:17 17 minutes, 17 seconds partnership, Kinetic accelerates our road map, strengthens our mode and moves us decisively towards building a high margin, globally relevant power 17:26 17 minutes, 26 seconds semiconductor platform. In summary, our mission is to build India's largest semiconductor custom product company serving global demand through 17:34 17 minutes, 34 seconds three-prong strategy that we talked about above on services, custom ASIC and proprietary products, driving long-term growth and sustainable value creation. 17:44 17 minutes, 44 seconds The acquisition of kinetic significantly accelerates it journey by doubling our revenue, doubling our addressable market and will be creative accreative by the 17:53 17 minutes, 53 seconds year two. Importantly, we'll be the first company in India with a meaningful proprietary custom product portfolio and 18:00 18 minutes own semiconductor IP. A distinction that fundamentally sets us apart. Thank you. 18:08 18 minutes, 8 seconds Thank you ladies and gentlemen. We will now begin the question and answer session. 18:15 18 minutes, 15 seconds Please note this call is being hosted for science semiconductor. 18:19 18 minutes, 19 seconds We request participants to kindly restrict their questions to the semiconductor business. Queries related to other science group companies will be addressed by the management separately. 18:31 18 minutes, 31 seconds Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. 18:43 18 minutes, 43 seconds Participants are requested to use their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. 18:55 18 minutes, 55 seconds We take the first question from the line of Sep Sha from Experious Securities. Please go ahead. 19:02 19 minutes, 2 seconds Yeah, thanks. Thanks for the opportunity and congratulations. 19:06 19 minutes, 6 seconds The first question is uh just looking at the financials of the acquired company despite you are highlighting it is into 19:15 19 minutes, 15 seconds a domain of power consumption and efficient power consumption which to some extent world over because of the 19:22 19 minutes, 22 seconds proliferation in AI infra and data sector the consumption has actually gone up while the revenues of this company 19:30 19 minutes, 30 seconds has come down. So what has led this and uh in parallels to that do you believe 3 19:37 19 minutes, 37 seconds and a half price to sales is a expensive multiple 19:44 19 minutes, 44 seconds can I take that thank you Krishna I can take that so two parts to the answer the first one is 19:51 19 minutes, 51 seconds with respect to their own revenue the company did uh pivot away from earlier they were focused a lot more on consumer they pivoted away from uh consumer and 20:00 20 minutes smartphone a few years back. So they are in the build journey back and the second is they did die with some of their non-core non-strategic business which 20:08 20 minutes, 8 seconds has also resulted in some of the drop in revenue. So the momentum going forward is possible. So that's the first question. The second question is in 20:16 20 minutes, 16 seconds terms of the multiple for this particular company or for this particular deal. Overall the multiple will work out to be around three times uh revenue and if you look at 20:25 20 minutes, 25 seconds semiconductor company in terms of the global benchmark the median multiple for this kind of a company is anywhere 20:31 20 minutes, 31 seconds between 5 to 6x. Um so even the the lowest trend it's 3x. So we have we have a very competitive multiple in terms of the deal structure itself. 20:42 20 minutes, 42 seconds Okay. Okay. So can you give us the color in terms of current revenue and the industrial mix? Is it largely now power and the industrial product? 20:56 20 minutes, 56 seconds Sure. The current revenue of the company estimated for this year is $40 million. 21:02 21 minutes, 2 seconds The mix the the products are predominantly in power and power. In terms of the applications, it's spread across a few segments. industrial data 21:11 21 minutes, 11 seconds center consumer is consumer is also a big segment which is essentially smartphones computers and AJI applications. 21:21 21 minutes, 21 seconds Okay. Okay. Okay. And when we say a bit accurate that means it makes absolute positive right? 21:33 21 minutes, 33 seconds Yes. Uh next year they should uh the rebbit will be positive. 21:38 21 minutes, 38 seconds Okay. And last the DNA DNA from the sufficient. 21:42 21 minutes, 42 seconds Oh, so when we say it positive is excluding the intangible amortization. 21:49 21 minutes, 49 seconds Yes. For the next year but in the longer term that's why EP is a criter from year two. 21:54 21 minutes, 54 seconds Okay. Okay. And just in terms of source of finance how we are looking to finance this in terms of internal approval and debt. 22:05 22 minutes, 5 seconds So it will be a combination of uh Okay. 22:07 22 minutes, 7 seconds Go ahead first of all. [clears throat] Thanks for the good questions. Uh firstly, as you know, we have adequate cash to meet all these requirements. 22:16 22 minutes, 16 seconds You're already aware of the cash position we have. Uh we we will be able to provide cash to fund this transaction immediately as needed. But that's it. We 22:24 22 minutes, 24 seconds will look at all possible instruments to optimize the shareholder value as we execute this deal including some instruments such as debt. 22:32 22 minutes, 32 seconds Okay. Okay. And this the last thing post this acquisition we would like to build up organically try to digest this 22:40 22 minutes, 40 seconds because this is a new domain or are we still open to scale up uh the growth through inorganic especially in 22:47 22 minutes, 47 seconds semiconductor as a segment I'd say please go ahead 22:55 22 minutes, 55 seconds good I think uh if I may just answer that I'll say that uh our intent is to really rapidly scale this business. Uh I 23:03 23 minutes, 3 seconds think this gives us a very very good uh foothold. So at least from a scaled acquisition at the moment we will really look at how we can digest, integrate and 23:12 23 minutes, 12 seconds really grow this. Of course there might be tactical acquisitions uh which will help us with certain uh certain IP certain parts of the product portfolio 23:20 23 minutes, 20 seconds etc. But we believe that this is a very good starting point from a scaled uh uh product IP portfolio. It gives us a big 23:28 23 minutes, 28 seconds portfolio. It really sets the ball rolling. So right now we we' first try to get this integrated. I just did before we do too much at least from a 23:37 23 minutes, 37 seconds large strategic uh perspective even in scient. Okay. Thanks and all the best. 23:45 23 minutes, 45 seconds Thank you. 23:47 23 minutes, 47 seconds Thank you. We take the next question from the line of Rajasth from press Capital Chloris. Please go ahead. 23:55 23 minutes, 55 seconds Good morning. Am I audible? Yes. Yeah. 24:01 24 minutes, 1 second Yeah. Uh so I mean as outsiders as uh I mean could you please give us uh some idea about the peers that you have across all your three uh business 24:09 24 minutes, 9 seconds segments that you highlighted earlier so that know we can get a better understanding of uh whom to benchmark against in all these uh three different critters. 24:21 24 minutes, 21 seconds Suman will you take that? 24:24 24 minutes, 24 seconds Yeah sure. um on on the services businesses uh that we have you know Tesla would be a service business for us 24:33 24 minutes, 33 seconds uh that would be a peer on the ASIC turnkey as business there are several uh folks that like e silicon and and folks 24:41 24 minutes, 41 seconds in the uh in Europe that uh I see sense would be uh competitive for us and on 24:48 24 minutes, 48 seconds the on the ASSP business we're really on on the custom ASSP business we're primarily looking at folks like uh NPS 24:57 24 minutes, 57 seconds who will be uh who are a high growth power company who will be our our uh our peer group. 25:05 25 minutes, 5 seconds Understood. Understood. And uh I mean looking at the revenue trajectory here on for uh Kinetic uh how should one 25:12 25 minutes, 12 seconds really think about that? Uh and along with that uh the margin profile you've highlighted that it will be a bit positive next year. So what should 25:20 25 minutes, 20 seconds really drive this uh margin trajectory within kinetic? 25:27 25 minutes, 27 seconds See the the margins in semiconductor businesses about 60% of the margins comes from wafer pricing and that's why I said that the ecosystem partnership is 25:36 25 minutes, 36 seconds super important for that to get uh really good wafer pricing and that's the really the reason for the partnership with people like you know either it's 25:44 25 minutes, 44 seconds Dongu Hi-Tech or DITECH or if it's global foundaries you need that partnership the rest comes into assembly and test and the last is primarily you 25:53 25 minutes, 53 seconds know looking at year-on-year reduction on the on the cog side you know it's usually you're looking at a 3 to 4% reduction which uh which maintains your 26:01 26 minutes, 1 second margin you know in this sort of business mid mid 45 to 50% margin is is uh is 26:09 26 minutes, 9 seconds definitely possible and that's uh where I think we'll end up uh next year as well for this business 26:17 26 minutes, 17 seconds okay and that's at a gross margin that's at a gross margin level just to add at an margin level we'll be in the medium-term 26:24 26 minutes, 24 seconds a few percentage point higher than the services of business. 26:30 26 minutes, 30 seconds Understood. Understood. And and at an overall console level, how should one think of the ENL let's say in C26 26:38 26 minutes, 38 seconds possibly once this is integrated? Uh once kinetic is integrated into our standalone semiconductor business, how should one 26:46 26 minutes, 46 seconds look at the overall console in one or two years out? 26:53 26 minutes, 53 seconds So u I can take that another yeah I can take that another chime in. So we we stick to our commitment of delivering a 27:03 27 minutes, 3 seconds flat e for the organic business by the end of next year. Uh that's the goal we are working towards and some of the 27:09 27 minutes, 9 seconds deals also help in that directly. So overall towards the towards the longer term the combined entity um should be 27:17 27 minutes, 17 seconds should be ether generating and and growing. 27:21 27 minutes, 21 seconds Obviously the right now we're still in the signing phase so we have to get to the closing phase and we have to look at the combined business plan etc. So that's going to take a few more quarters. 27:32 27 minutes, 32 seconds Okay. Okay. All right. Uh thanks a lot. 27:35 27 minutes, 35 seconds Thank you and wishing you all the very best. Thank you. 27:40 27 minutes, 40 seconds Thank you. Ladies and gentlemen, if you wish to ask a question, please press star as one. 27:49 27 minutes, 49 seconds We take the next question from the line of Deep Sha from MK Global. Please go ahead. 27:55 27 minutes, 55 seconds Yeah, thanks for the opportunity. Uh few question. Uh first just to understand what will be the client concentration in this business. If you can give some 28:04 28 minutes, 4 seconds sense on that and how would be typical engagement lays out here and renewal and maybe recurring kind of part you can 28:12 28 minutes, 12 seconds help us understand. Second question is about revenue growth profile. What kind of revenue growth one should expect this business to deliver or medium-term kind 28:21 28 minutes, 21 seconds of thing. Uh third question is about current revenue mix across three pillars which you indicated. If you can give 28:29 28 minutes, 29 seconds some sense what is the current mix and how you expect it to evolve over medium term and last question is as for the uh 28:38 28 minutes, 38 seconds press release the 65%age stake which we intend to get after the transaction any 28:44 28 minutes, 44 seconds line of sight to get full control thanks Rama will you answer that 28:54 28 minutes, 54 seconds sure maybe I'll go from the on the bottom and then someone can talk about the customer mix and customer concentration. So the deal is structured 29:02 29 minutes, 2 seconds such a way that uh we should be getting anywhere between 70 75% uh at the end of the deal. That's why it says about 65%. 29:10 29 minutes, 10 seconds We have allocated some unveil options and leop for employee retention etc. So in the longer term we might be anywhere at 65 70%. 29:19 29 minutes, 19 seconds uh for full control the line of sight to that is a is a 4-year horizon where at the end of the four years we do we do anticipate to provide some kind of a uh 29:28 29 minutes, 28 seconds liquidity event to the founders which is linked to the performance of the company. So that's the line of sight towards full ownership of the business. 29:36 29 minutes, 36 seconds That's your last question. Uh in terms of the third question which is around the revenue trajectory u the revenue trajectory of the business is is driven 29:44 29 minutes, 44 seconds by multiple factors but we're looking at somewhere around uh 15 20% growth consistently uh year-over-year from that particular business alone 29:53 29 minutes, 53 seconds on the customer mix and the distribution mix. I'll hand it over to someone to go on. 30:01 30 minutes, 1 second Yeah. So uh thank you. So the top 10 customers probably account for like 40% of the total revenue. um you know 60% of 30:09 30 minutes, 9 seconds the business really goes through distribution which is pretty normal course in the semiconductor business uh for these customers. 30:20 30 minutes, 20 seconds One question is the current revenue mix between the three uh pillar which you indicated. 30:28 30 minutes, 28 seconds So the current revenue mix for us internally the ASC business as we said is in the start phase we just in the product definition phase so that revenue 30:36 30 minutes, 36 seconds is zero uh between ASIC turnkey and u uh the services business the share of AS turnkey has been consistently increasing 30:45 30 minutes, 45 seconds today it's roughly around 35% of the last quarter it was around 35%. And in the long term, in the medium term, we 30:52 30 minutes, 52 seconds expect AC turnkey to be about 50% of the revenue mix. Um, and then in the in the longer term, of course, ASP will will take lead. This is the organic business. 31:04 31 minutes, 4 seconds Understood. Thank you. Thank you. 31:09 31 minutes, 9 seconds Perhaps you can just give a little bit of color of how the business will look like once uh connectic is also acquired, how the revenue mix will look like. 31:18 31 minutes, 18 seconds Sure. Um at the end of FY27 uh the revenue mix should be that uh ASP 31:26 31 minutes, 26 seconds business which is the third business uh the custom product IP business thanks to kinetic will be almost 50% of our business 50 to 55% the custom non key at 31:35 31 minutes, 35 seconds that level will be 30 30% of the business and the rest of services thanks to the SL deal that we want 31:43 31 minutes, 43 seconds and I'll also add to that that our intent is to really maintain a good balance which is really 50 plus% asp 30 31:51 31 minutes, 51 seconds to 35% from turnkey as and really the services business to remain around that 15%. Uh we believe from a margin 31:59 31 minutes, 59 seconds perspective but more importantly from uh what we're also building strategically it'll be a very very good mix and I think I just want to therefore highlight 32:07 32 minutes, 7 seconds the deal also because that helps us uh sustain the services business which as Suman said in his opening remarks is 32:14 32 minutes, 14 seconds very important for cash flow and sustainability. So I think we're we're headed towards the right mix that we wanted and uh that's very important for this as sustainability. 32:26 32 minutes, 26 seconds Thank you ladies and gentlemen. As there are no further questions from the participants, I now hand the conflict over to Mr. Praal Atla for his closing comments. 32:38 32 minutes, 38 seconds Thank you moderator. Thank you everybody for joining this call in such short notice. Thank you for participating in our journey. Thank you for your interest and and for your time today. 32:48 32 minutes, 48 seconds In summary, today we had three messages that we were trying to deliver. The first one is this that semiconductor is a rapidly evolving and a very 32:57 32 minutes, 57 seconds interesting space for us to be in with the potential for significant growth for science. 33:02 33 minutes, 2 seconds The second message is this that our ambition in this business is to become one of the world's leading fabulous semicon houses especially out of India. 33:13 33 minutes, 13 seconds I'll underline especially out of India. 33:16 33 minutes, 16 seconds The third message we were delivering is this that our strategy and approach for this business in semicon is around three vectors. 33:25 33 minutes, 25 seconds The first vector is the vector of competency and proposition. The second vector is the vector along the segments in which we will play. The third vector 33:34 33 minutes, 34 seconds is the approach we will take to build this business. Like as Summon spoke eloquently before along the vector of 33:41 33 minutes, 41 seconds competence and proposition we focusing on three elements. One the services to the turnkey asset and three the ASSP 33:48 33 minutes, 48 seconds which is application specific special products. 33:52 33 minutes, 52 seconds Along the second vector of segments we're very clearly focusing on data centers and AI networking and industrial and automotive with the reification 34:00 34 minutes trend that we are seeing increasingly in the world today. And in all these segments we're focusing on power management as a key theme and a key differentiator for us. 34:11 34 minutes, 11 seconds The third vector of approach we're focusing on three elements. One the organic business developing it with investments. Second building of 34:19 34 minutes, 19 seconds partnerships. Uh and the third is inorganic approach that we just talked about in the call today. And all the 34:26 34 minutes, 26 seconds steps you have seen we have taken so far in this business of semicon including setting up of a subsidiary including 34:33 34 minutes, 33 seconds building a very strong leadership team including Suman Rama and a number of others that we have in the business today building partnerships such as with 34:41 34 minutes, 41 seconds Azimut the rel the pursuit of the large deal in India that Krishna talked about and now with this acquisition all these 34:48 34 minutes, 48 seconds steps are very clearly articulated very carefully choreographed and very consequently executed steps. in the 34:55 34 minutes, 55 seconds above direction. And as you will see, each of the steps we talked about so far will fall into at least two if not three 35:03 35 minutes, 3 seconds of the above vectors we spoke of earlier. 35:06 35 minutes, 6 seconds And with what we already have in this space as a legacy, with what we have done so far and with what we will 35:14 35 minutes, 14 seconds execute going forward and with all your continued support, we're very confident of achieving our ambition and to repeat 35:21 35 minutes, 21 seconds ourselves. or ambition of being being and becoming one of the world's leading fabulous semicon houses especially out of India and create appropriate 35:30 35 minutes, 30 seconds stakeholder value in this business with this I thank you all for your time I'll wish you a good day and we'll stay engaged with you over to you moderator 35:38 35 minutes, 38 seconds please thank you on behalf of science limited that concludes this conference calls thank you for joining us and you may now 35:47 35 minutes, 47 seconds disconnect your