EFC Ltd — Q3 FY26

EFC (I) Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=Gds7tQBL_yQ Published: 2 months ago

0:00 Good morning ladies and gentlemen and welcome to the EFC limited Q3 and 9month FY26 earnings conference call hosted by MEFG in time India private limited. 0:13 13 seconds As a reminder all participant lines will be in the listenon mode and there will be an opportunity for you to ask questions after the presentation concludes. 0:24 24 seconds Should you need assistance during this conference call, please signal an operator by pressing star tin zero on 0:30 30 seconds your touchstone phone. Please note that this conference is being recorded. 0:36 36 seconds I now hand the conference over to Miss Kasuri Basu from MEFG in time. Thank you and over to you ma'am. 0:44 44 seconds Thank you Sapnali. Good morning ladies and gentlemen and welcome to Q3 and 9 months SY26 earnings conference call of 0:52 52 seconds EST India Limited to discuss the squad's performance we have from the management Mr. Umesh Tahai chairman and managing 1:01 1 minute, 1 second director Mr. Nikil Gha whole time director Mr. Udai Borat chief financial officer and Mr. Aman Gupta company 1:09 1 minute, 9 seconds secretary before we proceed with this call I would like to mention that some of the statements made in today's call may be forward-looking in nature and may 1:18 1 minute, 18 seconds involve risk and uncertaintity for more details kindly refer to the investor presentation and other filings that can 1:25 1 minute, 25 seconds be found on the company's website and stock exchanges with that I would like to hand over the call to Mr. Um Shai for 1:33 1 minute, 33 seconds his opening remarks. Thank you and over to you sir. 1:37 1 minute, 37 seconds Thank you. Thank you ma'am. Good morning. Good morning ladies and gentlemen and thank you for joining us for the quarter 3 and 9 month uh 1:45 1 minute, 45 seconds financial 26 earning conference call today. Uh we are happy to report another quarter of a strong business and financial performance. The third quarter 1:54 1 minute, 54 seconds has once again demonstrated the strength of our integrated business model. We are no longer [clears throat] operating as isolated vertical. 2:03 2 minutes, 3 seconds Uh we are functioning as well aligned ecosystem where leasing design and build and furniture uh reinforce each other. 2:11 2 minutes, 11 seconds Our strategy have always uh been clear. Build long-term annuity through leasing. 2:17 2 minutes, 17 seconds Capture execution value through interior design and trunky solution. Drive margin expansion through backward integration into furniture manufacturing. Today we 2:26 2 minutes, 26 seconds are seeing this strategic translate into consistent growth, stronger profitability and improve improve operating leverage. [clears throat] 2:35 2 minutes, 35 seconds Uh what is particularly encouraging is the quality of uh business we are on boarding large enterprise mandate integrated 2:43 2 minutes, 43 seconds trunky assignment multi-ity engagement high value client across segment. Our leasing platform give us a predictable 2:51 2 minutes, 51 seconds recurring revenue and continues to be the core of our ecosystem. Today we operate in 11 cities with more than 2:58 2 minutes, 58 seconds 73,000 seats under management. Our interior division delivered one of its strong quarter with 76% 3:06 3 minutes, 6 seconds yearon-year growth in quarter 3 and 75% growth over 9 month. The business vertical enhance client stickiness and scale of our consolidated operation. 3:18 3 minutes, 18 seconds Our [clears throat] furniture business strengthen margin and cost efficiency and has picked up in momentum to grow 3:25 3 minutes, 25 seconds rapidly quarter on quarter. The integrated real estate service model is not only driving current performance but also positioning us strongly for the 3:34 3 minutes, 34 seconds upcoming quarter. We are confident about continue continued demand momentum uh higher utilization recent added capac 3:43 3 minutes, 43 seconds capacity strong execution pipeline margin stability with upside potential. 3:49 3 minutes, 49 seconds [clears throat] The managed workspace industry in India is growing steadily due to more outsourcing by companies, expansion of GCC, global capability 3:58 3 minutes, 58 seconds center and increase uh increasing demand for flexible office spaces which give us confidence in our long-term growth. 4:06 4 minutes, 6 seconds Design in build industry for the commercial space also continue to grow with localization of business with a 4:13 4 minutes, 13 seconds global outlook pushing uh the demand of modern workspace uh factory, data center, warehouse and etc. And hence 4:22 4 minutes, 22 seconds this business vertical would continue to be our growth engine. Furniture industry is in the consolidation phase with 4:29 4 minutes, 29 seconds organized player meeting the every uh uh in the every increasing Indian consumer demand by offering highest quality and 4:37 4 minutes, 37 seconds design standard for furniture product design. Our furniture vertical is setting those highest standard to be the leader in the furniture industry. 4:47 4 minutes, 47 seconds Looking ahead, our focus will remain on expanding our integrated workspace ecosystem while maintaining profitability and operational discipline. 4:57 4 minutes, 57 seconds I once again thanks all our uh shareholder and various stakeholder for their continuous support. Now I will uh 5:04 5 minutes, 4 seconds invite Mr. Nicl Bha to speak on the company business and operation performance. Thank you. 5:11 5 minutes, 11 seconds Thank you. Thank you so much sir. Good morning to all and a warm welcome to the Q3 and 9 months FI26 earnings conference call. 5:21 5 minutes, 21 seconds Dear investors and stakeholders, it is pertaining to note that this quarter's performance reflects how our ecosystem 5:28 5 minutes, 28 seconds is really compounding at EFC. Our strategy is centered on building a unified real estate as a 5:35 5 minutes, 35 seconds service platform integrating leasing, design and build and furniture manufacturing to deliver end toend workspace solution across the entire office infrastructure lifestyle. 5:47 5 minutes, 47 seconds This integrated model enables us to improve margins, drive cross-selling opportunities and strengthen executional capabilities across the organization. 5:58 5 minutes, 58 seconds I will briefly take you through the business and operational performance of EFC India Limited during Q3 and the 9-month period of FI26 and how our 6:08 6 minutes, 8 seconds integrated ecosystem cons continues to scale across verticals leasing the foundation the leasing 6:16 6 minutes, 16 seconds vertical remains the largest contributor to our operations as of Q3 FI26 we operate 91 centers managing over 3.69 69 6:25 6 minutes, 25 seconds [clears throat] billion square ft serving 720 plus clients with enterprise customers contributing approximately 65% 6:32 6 minutes, 32 seconds of revenue while maintaining occupancy about 90%. 6:36 6 minutes, 36 seconds Our average enterprise client tenure of approximately 48 months reflects strong client retention and long-term demand visibility. 6:45 6 minutes, 45 seconds Seat capacity continues to expand steadily supported by inventory under development and ongoing capacity additions which positions us well for future growth. 6:56 6 minutes, 56 seconds Our leasing portfolio remains well diversified across sectors such as technology, consulting, EFSI and manufacturing which helps maintain 7:05 7 minutes, 5 seconds stability in occupancy and revenue performance. 7:09 7 minutes, 9 seconds What is important it is not just occupancy it is the client mix. We are seeing large enterprises, multilocation mandates and longer engagement cycles. 7:22 7 minutes, 22 seconds Leasing continues to be our backbone with high occupancy levels and stable demand across key markets. These 7:28 7 minutes, 28 seconds verticals gives us predictable cash flow and operating leverage. This provides visibility and stability. 7:37 7 minutes, 37 seconds Coming to interior design, interior and design and build the growth accelerator division of EFC limited. The design and 7:46 7 minutes, 46 seconds build vertical continues to scale steadily supported by strong execution capabilities and ecosystem synergies. 7:53 7 minutes, 53 seconds Our order book stands at over rupees 160 crores giving strong outlook for the future sustainable growth. As of Q3 8:02 8 minutes, 2 seconds FI26, we have designed more than 5.1 million square ft serving 40 plus clients across multiple locations. 8:12 8 minutes, 12 seconds This vertical plays an important role in enhancing customer engagement across the workplace life cycle and strengthening 8:19 8 minutes, 19 seconds ecosystem synergies. Our design and build vertical has benefited significantly from one the existing leasing clients upgrading or expanding. 8:30 8 minutes, 30 seconds Two new enterprise mandates that require turnkey execution and three the new mandates from diversified sectors bring stability through diversity. 8:41 8 minutes, 41 seconds Interior execution today is not just a project business for us. It is becoming a natural expansion of our leasing relationships. 8:50 8 minutes, 50 seconds This cross-selling is the key growth driver. 8:54 8 minutes, 54 seconds Coming to the the third vertical, the furniture manufacturing the margin lever for the company. Our furniture 9:01 9 minutes, 1 second manufacturing business a design industries limited continues to demonstrate strong operational progress 9:08 9 minutes, 8 seconds and remains central to our backbone integr backward integration strategy. 9:13 9 minutes, 13 seconds The furniture manufacturing vertical has delivered over 50,000 plus units and offers 1200 plus SKUs. 9:22 9 minutes, 22 seconds One of the important milestones during this year has been the progress achieved in our furniture manufacturing vertical which has successfully secured multiple 9:30 9 minutes, 30 seconds certifications from TV Nord a globally recognized certification organizations. 9:36 9 minutes, 36 seconds This certification strengthen our positioning as a reliable and a globally compliant furniture manufacturing partner while reinforcing customer 9:44 9 minutes, 44 seconds confidence in our products and processes. Furniture is now scaling meaningfully. 9:50 9 minutes, 50 seconds The real benefit here is not only revenue growth but backward integration, better cost control, faster project 9:57 9 minutes, 57 seconds execution, margin capture within the ecosystem. 10:02 10 minutes, 2 seconds Instead of outsourcing, we are internalizing value. As utilization improves, this vertical will contribute disproportionately to margins. 10:15 10 minutes, 15 seconds How the entire ecosystem is driving the momentum. The three verticals which we explained earlier are not just 10:22 10 minutes, 22 seconds independent vertical. They are sequential and mutually reinforcing leasing to interior execution. interior 10:30 10 minutes, 30 seconds execution to furniture supply and completing the cycle. This reduces customer acquisition cost, improves 10:38 10 minutes, 38 seconds project turnaround, enhances margins and build long-term client relationship. 10:44 10 minutes, 44 seconds That is why we are seeing strong revenue momentum, improved profitability, better operating 10:51 10 minutes, 51 seconds efficiency and visibility into future quarters. 10:56 10 minutes, 56 seconds Going forward as capacity is mature and integration stabilizes operating leverage will continue to play out. To 11:04 11 minutes, 4 seconds summarize, we remain encouraged by the operational progresses across the business and will continue to focus on discipline growth and executional across all verticals. 11:15 11 minutes, 15 seconds Thank you once again for your continued trust and support in EFC Limited. With that, I would like to hand over the call 11:22 11 minutes, 22 seconds to Mr. Udea our company our CFO who will walk you through the financial highlights of the quarter. Thank you and 11:29 11 minutes, 29 seconds over to you uh thank you sir. Good morning everyone and welcome to the quarter 3 FI26 earnings 11:38 11 minutes, 38 seconds call. I will take you through the consolidated financial performance for the quarter and 9 months ended December 31st 2025. 11:47 11 minutes, 47 seconds During Q3 FI26, the company delivered strong growth across revenue and profitability. 11:54 11 minutes, 54 seconds Revenue for the quarter stood at 270 crores, representing a 52% yearon-year and 6% quarteronquarter growth, 12:03 12 minutes, 3 seconds reflecting strong momentum across leasing, interiors, and furniture verticles. 12:09 12 minutes, 9 seconds EIA for the quarter was 112 crores, registering a growth of 20% yearonear while maintaining stable operating margins despite ongoing expansion. 12:21 12 minutes, 21 seconds Profit after tax reached 62 crores representing 54% yearon-year and 10% 12:28 12 minutes, 28 seconds quarteron quarter growth. This performance reflects strong operating leverage and disciplined cost management across the business. 12:37 12 minutes, 37 seconds For the 9-month period, the company delivered robust and broad-based financial growth. Revenue reached 745 12:44 12 minutes, 44 seconds crores, representing a 67% year-on-year growth. While Abita Group 325 crores, up 49% yearonear 12:54 12 minutes, 54 seconds profit after tax for 9 month FI26 stood at 166 crores, reflecting 79% 13:00 13 minutes year-on-year growth. Importantly, PAT for the 9-month period has already exceeded the full year FI25 PAT, 13:08 13 minutes, 8 seconds highlighting strong execution and scalability of the business model. 13:13 13 minutes, 13 seconds From a segment perspective, grow growth remained well diversified across verticals. The leasing segment recorded 13:20 13 minutes, 20 seconds revenue of approximately 135 crores in quarter 3 supported by seat expansion and strong enterprise demand. 13:28 13 minutes, 28 seconds The design and build segment delivered a revenue of about 109 crores 119 crores reflecting continual execution momentum and strong client engagement. 13:39 13 minutes, 39 seconds The furniture vertical contributed approximately 16 crores in revenue and continues to scale in line of our strategy. 13:47 13 minutes, 47 seconds The evolving revenue mix across vertical reflects increasing contribution from design and build and furniture alongside the leasing business. 13:56 13 minutes, 56 seconds Overall, the company delivered strong revenue growth, improved profitability and stable margins during the quarter supported by the strength of our 14:04 14 minutes, 4 seconds integrated ecosystem and disciplined financial management. It is important to note that the margins have remained stable despite scale expansion 14:12 14 minutes, 12 seconds reflecting operating leverage. With this, I conclude my remarks on the financial performance. I thank all our shareholders and partners for their 14:21 14 minutes, 21 seconds continued support. I would now like to hand it back to the moderator to open the floor for questions. Thank you. 14:30 14 minutes, 30 seconds Thank you very much. We will now begin with the question and answer session. 14:35 14 minutes, 35 seconds Anyone who wishes to ask a question may press star one on the touchstone telephone. If you wish to remove 14:43 14 minutes, 43 seconds yourself from the question queue, you may press star and two. Participants, you are requested to use handsups while 14:51 14 minutes, 51 seconds asking a question. Ladies and gentlemen, we will wait for a moment while the question assembles. 15:06 15 minutes, 6 seconds Participants, you may press star and one to ask a question. 15:19 15 minutes, 19 seconds We'll take the first question from the line of Akash s an individual investor. Please go ahead. 15:27 15 minutes, 27 seconds Um sir, Nicl sir, Odessa, many many congratulations on uh such stellar numbers. I wanted to understand firstly 15:35 15 minutes, 35 seconds many congratulations on the past few years of numbers and the delivery that EFC has given for its shareholders. I want to understand uh what is your 15:44 15 minutes, 44 seconds long-term vision for the company and uh what milestone should we as investors and your stakeholders uh watch out for in the coming you coming few years? 15:56 15 minutes, 56 seconds Uh thank you so much uh Akash and um yeah I mean we we all are at EFC are pleased to you know kind of serve well 16:05 16 minutes, 5 seconds for the company and continue growing uh profitably. U in terms of your questions yes um you know we as a company would 16:15 16 minutes, 15 seconds like to grow as explained earlier also in our previous calls that as a real estate as a service ecosystem that is 16:22 16 minutes, 22 seconds what we would like to grow as we like to you know kind of categorize as somebody who is not just operating leasing 16:29 16 minutes, 29 seconds business but also complementing it with his design and build and the furniture manufacturing capabilities and hence overall as an integrated ecosystem that 16:38 16 minutes, 38 seconds is what uh we would like to be known as and we would like to continue operating as in terms of future milestones for 16:45 16 minutes, 45 seconds growth if you could look at it I mean how the leasing business is going in terms of we are you know our our MD Mr. 16:53 16 minutes, 53 seconds Romesh Shahai has already kind of uh you know through various years of our initiatives made it clear that we are 17:00 17 minutes trying to grow uh from a leasing business more as an asset under management model where we are trying to kind of uh build assets either on our 17:09 17 minutes, 9 seconds books or through our you know various available financial structures like uh you know REITs etc and continue to grow 17:18 17 minutes, 18 seconds the leasing business because these all structures will become a feed stock for the leasing business while both the other sectors uh divisions which is 17:26 17 minutes, 26 seconds design and build and the furniture would keep complementing keep growing together and we also want to g them growing 17:33 17 minutes, 33 seconds independently. So in terms of milestones all the three verticals uh would provide a lot of growth indicators uh which uh 17:43 17 minutes, 43 seconds our investors should uh really take note of and going forward that will only be the growth engines for our company in totality. Akashi. 17:53 17 minutes, 53 seconds Perfect sir. Thank you. Thank you so much. Welcome. Please. 18:01 18 minutes, 1 second Thank you. We'll take the next question from the line of moan Sharma from Tirupati Investments. Please go ahead. 18:10 18 minutes, 10 seconds Thank you. Uh congratulation EFC management for the stellar performance. 18:15 18 minutes, 15 seconds Uh further to uh last question I would like to understand your furniture margin which is quite healthy in Q3. Is this 18:23 18 minutes, 23 seconds driven by one of large order or is it a sustainable run rate? What is the current capacity utilization at take design? If you can put some on it. 18:33 18 minutes, 33 seconds Yes. Yes. Thank you. Thank you Moj. No certainly the furniture margin as Udai has also mentioned in his speech uh you 18:41 18 minutes, 41 seconds know this has continued to grow. This has continued to get consolidated because you know once we improve our capacity utilization the margins are 18:49 18 minutes, 49 seconds going to get much uh stabilized and much uh improved. Uh the current margin which you see in the current quarter is not of 18:57 18 minutes, 57 seconds oneoff uh order kind of contributing that it is primarily because of the increase in the overall utilization that 19:05 19 minutes, 5 seconds is helping us to you know kind of achieve the better margins. Uh in fact we because as you know that we had last 19:13 19 minutes, 13 seconds quarter received an export order and that export order got uh kind of executed during this quarter. So the 19:21 19 minutes, 21 seconds turnover has also gone uh better and also the margins and similarly such orders and such businesses will with 19:28 19 minutes, 28 seconds more utilization of the capacity would contribute uh in improving the margin and also stabilizing the total uh 19:36 19 minutes, 36 seconds production uh levels that we are trying to achieve. As of now uh you know at at currently we are utilizing roughly 19:45 19 minutes, 45 seconds around 35 to 40% of uh capacities and we are in process of kind of utilizing by 19:53 19 minutes, 53 seconds you know first to second quarter maximum we should be in a capacity of operating with a run rate of anything around 75 to 20:00 20 minutes 80% capacity with the kind of order pipelines that we have and with the kind of business that is there in sight. 20:08 20 minutes, 8 seconds OMG. Understood. 20:10 20 minutes, 10 seconds Understood. Your uh rental incomes are largest revenue segment for you and uh 20:17 20 minutes, 17 seconds uh what is the blended occupancy during uh last quarter and uh what are you looking at in Q4? If you can put some 20:27 20 minutes, 27 seconds Sure. So MoJi we typically always try to ensure that our blended occupancy would remain around in and around 90%. I mean 20:34 20 minutes, 34 seconds obviously that takes care of the situations where there are centers which keep coming out for operation during the quarter as well but because of the 20:42 20 minutes, 42 seconds overall occupancy levels that we maintain we ensure that even the mar the centers which come in for the occupancy 20:49 20 minutes, 49 seconds during the quarter also when you kind of blend them into the totality still we maintain that you know higher uh 20:56 20 minutes, 56 seconds occupancy levels of 90% upwards and that will continue and that is how our strategies are always you know you see 21:03 21 minutes, 3 seconds the way we expand we don't go too kind of you know aggressive on adding number of seats beyond the level and hence we 21:12 21 minutes, 12 seconds we are able to maintain this occupancy level and which is what our target is always so yeah I mean going forward and 21:19 21 minutes, 19 seconds even currently the blended margin would blended occupancy would always remain around 90%. 21:27 21 minutes, 27 seconds Okay, coming back to my last question which is uh related to interiors. What is your forward order book visibility for this segment because uh you have 21:35 21 minutes, 35 seconds already shown a significant improvement in revenue and profitability in last quarter. So perhaps we can put some light on uh what's like forwardlooking uh order book visibility. 21:45 21 minutes, 45 seconds Yeah. So we already have right now orders worth about 160 cr plus which are you know under either under executions 21:53 21 minutes, 53 seconds or about to start under execution during this quarter and you know the way our orders are now getting lackup and the 22:00 22 minutes way we are securing orders with the team that we have already built and with the kind of client relationship that has already been established. uh we are very 22:10 22 minutes, 10 seconds confident that every quarter we will be able to kind of run with minimum disc levels of order books so that we'll be able to achieve the the the growth and 22:18 22 minutes, 18 seconds the target that is uh that is estimated for this division. So yes, as I said for 22:25 22 minutes, 25 seconds Q4 we have a order book of around 160 cr plus and we expect to continue with the same kind of order books going forward 22:34 22 minutes, 34 seconds as well uh with the expected growth factoring factoring into that. 22:41 22 minutes, 41 seconds Thank you so much Nikl G. Thank you so much. Welcome welcome G. 22:47 22 minutes, 47 seconds Thank you. We will take the next question from the line of Penel Brahabat from Choice Institutional Equities. Please go ahead. 22:56 22 minutes, 56 seconds Uh hey, good morning everyone and congratulation on the strong performance during the quarter. Uh I have a couple of question for the management. So I'll 23:04 23 minutes, 4 seconds start with first uh like we already added 13,000 seats uh during 9 months FI26 23:12 23 minutes, 12 seconds and uh we we our target is around adding 20 or 20,000 seats every uh every year. 23:19 23 minutes, 19 seconds So uh how much we are confident on adding 7,000 further seats in you for FI26. 23:28 23 minutes, 28 seconds Yeah. So there are already uh you know a good amount of pipeline which has been developed and we are fairly confident 23:35 23 minutes, 35 seconds that we will be able to you know you know reach uh you know that numbers that we are targeting to we have already have 23:42 23 minutes, 42 seconds about more than 5,000 seats under the pipeline out of the 7,000 that we are talking to achieve that number of around 20,000. So we are fairly confident to uh 23:51 23 minutes, 51 seconds to achieve uh the targets that we have already set. Uh you know plus minus 5% we would certainly be able to you know 23:58 23 minutes, 58 seconds achieve the targets that we've already set for the leasing business. 24:04 24 minutes, 4 seconds Okay. Got it. Uh on on a DNB division uh considering the current uh book which we explained in the earlier uh question 24:13 24 minutes, 13 seconds answer. So what we are expecting the year-on-year growth for next 2 to 3 years it would be around 50 50 to 60% 24:21 24 minutes, 21 seconds growth or uh do we have any guidance on the uh yearon-year growth? Yeah, absolutely uh Fenel G that we are 24:29 24 minutes, 29 seconds expecting uh to achieve that kind of a growth year on year for next couple of years for sure. Uh looking at the kind 24:37 24 minutes, 37 seconds of visibility that uh our customers are also showing in terms of their you know future expansion their phase wise 24:44 24 minutes, 44 seconds expansions and that comfort that we already have from our customers you know for the kind of businesses that they are also wanting us to kind of develop for 24:53 24 minutes, 53 seconds them. So we are very clear that we should be able to achieve that 50 to 60% growth target as we have always maintained for next one or two years. In 25:01 25 minutes, 1 second fact as you can see we are overachieving it and we you know in the you know year-on-year targets if you see are 25:08 25 minutes, 8 seconds growing at about 76% uh you know and then in upward range. So achieving the 50 to 60% uh targets uh 25:18 25 minutes, 18 seconds growth is is something that we are fairly confident uh and uh we should be able to achieve that on an annual basis for sure. 25:27 25 minutes, 27 seconds Okay. Great. Great. My another question on iida margin. So I margin from expense for the quarter mainly due to expansion 25:35 25 minutes, 35 seconds I can understand but what will be the sustainable margin level as a overall stand if we have any segment wise uh margin then that would be great. 25:45 25 minutes, 45 seconds No certainly I mean I think Fenel you'll have to appreciate the fact that in our industry primarily because of the the impact of the India's accounting 25:54 25 minutes, 54 seconds standards on the leasing vertical you know EITA probably is not the right uh you know kind of uh uh indicator for 26:03 26 minutes, 3 seconds judging the business performance or the margin performance the right indicator would be either an EBIT or an PAT which would kind of give you a good indication 26:12 26 minutes, 12 seconds on how the company on an overall basis is fairing. number one number two uh on a on a on a normalized basis if I have 26:21 26 minutes, 21 seconds to say then uh we are you know we are certainly maintaining the margins of you know 30% on a on a leasing business on a 26:29 26 minutes, 29 seconds on a standalone the central level basis uh on uh on the design and build vertical we are maintaining anything 26:36 26 minutes, 36 seconds between 20 to 24% uh depending upon the nature of the projects and on the furniture business although it is little too early because like I said the 26:44 26 minutes, 44 seconds capacity utilization is yet to achieve to its uh optimal level but still we are confident that achieving a margin 26:52 26 minutes, 52 seconds anything around 25% is is certainly what we and visch achievable based on the numbers that we see the based on how the 27:00 27 minutes factory operations are going on and the kind of you know overall efficiency that we are able to achieve now because it is practically you know filling up uh the 27:09 27 minutes, 9 seconds capacity very rapidly. So the margins also under the furniture is likely to remain in and around 25%. Uh that is 27:17 27 minutes, 17 seconds what is the expected uh uh uh margin for the furniture bridges considering upon achieving the optimal capacity. 27:27 27 minutes, 27 seconds Okay. Okay. uh and uh do we design any data center recently or do we have any 27:35 27 minutes, 35 seconds order for data center because why I'm asking particularly data center because it's take uh it it needs specific area 27:42 27 minutes, 42 seconds infrastructure high electricity so if then how much time we are taking to consider one data center our space 27:51 27 minutes, 51 seconds no so I mean uh listen I mean as far as we are concerned as you would appreciate as as as as a Vital as a brand our 27:59 27 minutes, 59 seconds expertise is to kind of get into designing and internal fitouts. Okay. 28:05 28 minutes, 5 seconds And that is where we come in for any kind of projects whether it is a data center project whether it is an industrial project whether it is an 28:13 28 minutes, 13 seconds office infrastructure project. So uh as far as we are concerned our timeline is is is completely dependent upon the kind 28:21 28 minutes, 21 seconds of work that we are doing and since our work is all about internal designing and execution. So our timeline doesn't get 28:30 28 minutes, 30 seconds affected by the other aspect of that project for that project to get developed. I hope you understand and appreciate what I'm trying to say. So I 28:38 28 minutes, 38 seconds think it doesn't matter to us any type of project which comes uh our timelines would run around the similar uh uh you 28:47 28 minutes, 47 seconds know levels and I think we'll be able to achieve them and complete them in the similar time fashion. 28:54 28 minutes, 54 seconds Okay. Got it. Got it. And uh I'm just confirming like for furniture we are operating right now 35 to 40% capacity. 29:01 29 minutes, 1 second Uh right? So and we are we are targeting 75 to 80% uh by first quarter or second 29:09 29 minutes, 9 seconds quarter 27. So uh or further further of whatever we have. So do we have any expansion plan on the furniture segment 29:18 29 minutes, 18 seconds or any new plant or something is coming in the short-term period and if yes then how we are going to tackle uh those over 29:26 29 minutes, 26 seconds supply or whatever the new supply which is coming from that plant considering the competition in the market and lower 29:32 29 minutes, 32 seconds demand and also anything on this no certainly I think the expans uh first of all in terms of achieving the 70 to 29:42 29 minutes, 42 seconds 80% of capacity utilization. I think we we should be able to do that by end of second quarter for sure. Uh number one. 29:50 29 minutes, 50 seconds Number two, in terms of expansion etc. 29:52 29 minutes, 52 seconds Certainly it will largely depend upon the kind of businesses that we are and the kind of projects that we are able to 30:00 30 minutes secure and you know please appreciate that if we are able to do more you know kind of B2B businesses project businesses export businesses then we 30:09 30 minutes, 9 seconds will also have to segregate our production capacity because you know under one single production facility we won't be able to achieve and address all 30:18 30 minutes, 18 seconds type of different you know clientals you know If I have to address to a client base which is looking at more B2B and 30:27 30 minutes, 27 seconds bulk production, you know, I will have an assembly line working very well for me. If I'm looking at an export business which is again on little largely on a 30:36 30 minutes, 36 seconds little bulk side, again an assembly line would work good for me. But if I am let's say looking at a customer where you know their end use may be more 30:44 30 minutes, 44 seconds towards uh direct to consumers then the the question would come more about the quick turnaround time the quick t that 30:51 30 minutes, 51 seconds we need to achieve then my production line has to achieve those kind of capabilities. So I think those are the things will determine whether I should 30:59 30 minutes, 59 seconds uh you know get into the expansion uh whether I should uh expand facility into 31:06 31 minutes, 6 seconds different categories and I think uh uh you know we are mindful and looking at the kind of businesses uh that we 31:13 31 minutes, 13 seconds receive based on that only our expansion strategy would be uh determined. 31:19 31 minutes, 19 seconds Uh not not a s and yeah that's all from my s and all upcoming. 31:26 31 minutes, 26 seconds Thank you. Thank you so much. 31:31 31 minutes, 31 seconds Thank you. We will take the next question from the line of Watsel Negalia from Astral Mind Capital. Please go ahead. 31:40 31 minutes, 40 seconds Hi, good morning. Uh congratulations on a good set of numbers. First I have a suggestion. uh many companies include the pre and numbers in their 31:48 31 minutes, 48 seconds presentation. So if you can also include those numbers and uh secondly coming to the question uh around 50% of our 31:57 31 minutes, 57 seconds portfolio is IT and software related right so do we see any or do we expect 32:04 32 minutes, 4 seconds any change because of AI and how are we seeing the market evolving because many companies in US and uh foreign is are 32:13 32 minutes, 13 seconds also stating that they are hiring less because of AI and so are we looking into 32:20 32 minutes, 20 seconds No, I mean uh right now uh you know when we say IT sector, it is not just uh you know only the software development part 32:28 32 minutes, 28 seconds of it. It covers a very wide gamut. I mean it includes IT enabled services and you know that there are endless IT 32:35 32 minutes, 35 seconds enabled uh services which is you know running multiple businesses across India and I think the the consumer uhdriven 32:45 32 minutes, 45 seconds economy that our country has become. I believe that uh you know the IT enabled services is likely to keep growing 32:52 32 minutes, 52 seconds independent of the you know you know kind of uh invent and in independent of kind of AI uh you know inclusion in the 33:02 33 minutes, 2 seconds businesses it is always going to kind of increase the you know use of IT enabled 33:10 33 minutes, 10 seconds services rather than reducing the IT enabled services. So I mean we don't see any significant impact on that uh as far 33:18 33 minutes, 18 seconds as we are concerned like I said because it is not just IT development which matters to us it is all IT enabled 33:24 33 minutes, 24 seconds services which matters. So positively we are uh I mean with the kind of demand that we are seeing already you know in 33:33 33 minutes, 33 seconds since last 6 months also even after so much of AI related buzz around we don't see any kind of reduction in the 33:40 33 minutes, 40 seconds business from the IT enabled services sector as uh is concerned. 33:46 33 minutes, 46 seconds So what I've been hearing also is that some companies big companies are shifting to a lease model because uh 33:54 33 minutes, 54 seconds because they don't want to build a an infrastructure which they don't have uh demand for right now. So they are 34:01 34 minutes, 1 second moving to lease model. So are you also seeing that many companies who are building their own uh buildings now are moving to you? 34:10 34 minutes, 10 seconds Yes. Yes. I mean that is that is precisely the reason why the growth in our sector has really been coming from. 34:16 34 minutes, 16 seconds If you see that everybody from our customers point of view, they all want to go little capex slide. They all want to focus on their core sectors and that 34:26 34 minutes, 26 seconds is where they see the synergies between our businesses and their businesses where we provide this specialized services of managing the real estate for 34:33 34 minutes, 33 seconds them. Whether in terms of taking the property, building it up, designing it up the way they want it, furnishing it 34:40 34 minutes, 40 seconds with the way they want it and then operating it for them so that their focus remains on their core business. 34:46 34 minutes, 46 seconds their entire uh capex goes out of their books and in fact everything comes under their opex and and and that is the precise reason why our industry is 34:55 34 minutes, 55 seconds really getting the momentum and it is fairly logical also right I mean why somebody would uh go and kind of deploy 35:03 35 minutes, 3 seconds their capital into activities which are their non-core activities and hence I think this is really helping us and we 35:10 35 minutes, 10 seconds are seeing that continuously where more and more traditional businesses which were also earlier you know where you know as an Indian 35:18 35 minutes, 18 seconds mindset we always had had a mindset of owning our own offices operating our own offices but you know with the growth and with the kind of expansion that they are 35:26 35 minutes, 26 seconds also into and the kind of the domestic market that they need to serve into uh I think everybody realizing the benefit of 35:34 35 minutes, 34 seconds this model and that is helping us tremendously for sure one last thing I wanted to understand 35:41 35 minutes, 41 seconds was that how are you like what role do you play in the data center space I couldn't understand that. 35:48 35 minutes, 48 seconds No. So our I mean what we what I try to explain is that we are agnostic to any projects you know it doesn't matter to 35:56 35 minutes, 56 seconds us whether it is a data center or a factory development or a you know healthcare center development or office infrastructure development or education 36:04 36 minutes, 4 seconds institution development. What our strength is is to do the interior design and build for any kind of 36:11 36 minutes, 11 seconds infrastructure, any kind of commercial space that is given to us. We designed them. We built it out as per the specs 36:19 36 minutes, 19 seconds and the requirement of the client and and that's that's all that our strength is all about. you know we industry doesn't really affect us because our 36:28 36 minutes, 28 seconds role is purely determined by the client based on the specifications and the design standards that are set by them. 36:36 36 minutes, 36 seconds So that's what we try to explain sir. Okay. Thank you so much. All the best. Welcome. Welcome. Thank you. 36:45 36 minutes, 45 seconds Thank you. We will take the next question from the line of Raj Saraf investors. Please go ahead. 36:53 36 minutes, 53 seconds So very good morning and congratulations from good September. 36:57 36 minutes, 57 seconds Uh so when you talk about the margin in uh in uh rental space and uh interior 37:04 37 minutes, 4 seconds and even furniture so do you talk about sir Aita margins or uh PT margins or pat margins? 37:13 37 minutes, 13 seconds So we prefer to uh we prefer to kind of focus on pat because you know at the end of the day uh you know that is what 37:20 37 minutes, 20 seconds matters. uh you know if I if you want me to break it down for each sector also each vertical also please appreciate 37:28 37 minutes, 28 seconds that because of as far as the leasing is concerned because of the India's implication it is better to look at more from a PAT point of view from a uh from 37:37 37 minutes, 37 seconds a design and build interior division point of view if you look at it it I mean we can look at either an ebitita or PA both because in our businesses uh you 37:46 37 minutes, 46 seconds know there is in the design and build hardly there is any capex because so there is no any real impact on depreciation and there is also that we 37:55 37 minutes, 55 seconds don't have great amount of borrowing except for the working capital. So you know the the impact I mean one can evaluate it from an EIT point of view as 38:03 38 minutes, 3 seconds we have al already mentioned in the segment reports or you can also evaluate it at a uh at a PAT level but I mean I 38:10 38 minutes, 10 seconds think we believe that the best indicator would be the PAT margins because ultimately that is what uh uh would our shareholders would be you know the 38:18 38 minutes, 18 seconds profit that would be attributable to their wealth and I think that would be the right indicator for uh uh us to kind 38:26 38 minutes, 26 seconds of judge considering the various accounting systems that are in place that one is required to follow uh considering the regulatory guidelines. 38:35 38 minutes, 35 seconds Uh I think that gives the good indicator. Uh so PAT is a is the right number for measuring the performance in our opinion. 38:44 38 minutes, 44 seconds Okay sir. So so 30% and 25% and 22 to 25% across all the segments are at PAT levels. No that you know what I 38:53 38 minutes, 53 seconds mentioned is that let's say 30 to 32% is the margin that we maintain on a central level. Uh when you get into the 39:01 39 minutes, 1 second corporate level that comes to around a kind of 25 26% uh post all my expenses 39:08 39 minutes, 8 seconds post all my interest cost post all my tax uh liabilities etc. uh under the leasing division and when you come under 39:17 39 minutes, 17 seconds the in the design and build division the EIT levels are anything between uh uh that is before uh interest in tax the levels are around 22 to 24%. 39:29 39 minutes, 29 seconds Uh post tax it would roughly come around 20 18 to 20% under interior uh design and build vertical. So under 39:38 39 minutes, 38 seconds design and build to summarize the PAT margin would be anything around 18 to 20 20%. And under uh leasing vertical it would be around 25 odd%. 39:49 39 minutes, 49 seconds And for s furniture what should you want to consider? 39:53 39 minutes, 53 seconds So furniture I would request you to wait for one more quarter to give you a very stabilized margin because you know this the growth is still under you know quite 40:02 40 minutes, 2 seconds significant weight is growing. So you know giving your right number would be more appropriate maybe end of quarter 1 or something like that because when I 40:11 40 minutes, 11 seconds would have achieved a very reasonable capacity of let's say 60% plus and hence I would be able to give you a very normalized and stabilized margin which 40:19 40 minutes, 19 seconds you can consider uh going forward as the base for the financial division but otherwise like I said our estimates are 40:25 40 minutes, 25 seconds in and around on a on a pre-tax basis around 25% and maybe post tax basis anything around 20 to 22%. 40:33 40 minutes, 33 seconds That are our estimates. But I would still recommend and request if you could wait till about end of quarter quarter 1 40:40 40 minutes, 40 seconds to to uh you know estim to get an normalized margin which one can consider going forward for the furniture 40:48 40 minutes, 48 seconds business. [clears throat] Are we looking for our own uh own property on which we can we are making 40:57 40 minutes, 57 seconds actually uh more margins. So how we are going about that? 41:01 41 minutes, 1 second No, we are uh and as you know we already have uh more than about uh 300,000 square ft under our own uh ownership and 41:10 41 minutes, 10 seconds uh that comes from the fact that uh that obviously contributes greatly to our bottom line because you know obviously 41:17 41 minutes, 17 seconds there is no rent but yes there is an corresponding interest cost but still you know obviously going forward the 41:24 41 minutes, 24 seconds company would get benefited immensely because of the appreciation in the value of the property. Number one, overall cost, my operational cost reduces 41:32 41 minutes, 32 seconds because you know I have the complete control over the property, right? So my my all cost relating to the common area maintenance and other costs are very 41:40 41 minutes, 40 seconds much in my control. So certainly properties under my ownership will offer better margins and that also contributes 41:47 41 minutes, 47 seconds to our overall good margins and we are continuing to looking at developing such properties when we get good 41:54 41 minutes, 54 seconds opportunities when we get good deals where we are able to make uh a substantial margin on those deals where there is an appreciation potential we 42:03 42 minutes, 3 seconds will keep on acquiring such property to the extent our cash flow permits. 42:08 42 minutes, 8 seconds Okay sir. So what is the average realization per seat uh right now on absolute basis what an average and going forward what we can uh consider next. 42:19 42 minutes, 19 seconds So yeah in percentage terms as you know is uh roughly around 30% plus and in terms of uh in terms of absolute revenue 42:27 42 minutes, 27 seconds per seat if you have to consider from a margin perspective let's say it's anything around uh 2,000 rupees per 42:34 42 minutes, 34 seconds seat. uh I mean it it generally depends upon the pricing but let's say my average pricing right now is going at about 7,000 rupees. So if you apply that 42:43 42 minutes, 43 seconds 30,000 30% margin that's about 2100 rupees per seat that probably we make uh and and that is where you know our overall economics works in our favor. 42:55 42 minutes, 55 seconds This is the last one. So anything about read sir? We are talking about the read from last one year. So what is the state of? We we yeah we are talking about it 43:03 43 minutes, 3 seconds and why you know there are you know you have to appreciate that as a concept the SMEIT is also evolving the the SEBI and 43:11 43 minutes, 11 seconds the government is also coming up with various clarifications various guidelines and we are also mindful because you know when we started when we 43:18 43 minutes, 18 seconds got ourselves incorporated the regulations had very different uh you know uh connotations and now it is also 43:26 43 minutes, 26 seconds matured now very well and we are also have now taken sought opinions, legal opinions and clarity on the various 43:33 43 minutes, 33 seconds aspect relating to the structures of the read and we are very actively evaluating various opportunities. I mean it would 43:41 43 minutes, 41 seconds be inappropriate right now to tell you the timeline but you know we what we can say is that as a management as I mentioned in my earlier statement that 43:50 43 minutes, 50 seconds we are very focused in you know building the asset under management the portfolio of assets under our management and uh we 43:58 43 minutes, 58 seconds are taking steps to achieve that and soon the company would be able to announce such opportunities as soon as 44:06 44 minutes, 6 seconds they are able to see the commercial alignment and the you know the the the the profitability in those transactions 44:13 44 minutes, 13 seconds we would certainly come in and uh you know come up with those structures to get implemented uh for the company. 44:21 44 minutes, 21 seconds Yeah. Thank you. Thank you very much for explaining all my questions and uh good luck for for next end users. Thank you. Thank you so much. 44:30 44 minutes, 30 seconds Thank you very much ladies and gentlemen. We will take that as a last question for today. And with that concludes the question and answer 44:37 44 minutes, 37 seconds session. I now hand the conference over to Miss Kaspuri Basu for closing comments. Thank you and over to you ma'am. 44:45 44 minutes, 45 seconds Thank you. I would like to thank the management for taking the time for their conference call today and also thank all participants. If you have any queries, 44:54 44 minutes, 54 seconds please feel free to contact us. We are NFD in private investor relationship India Limited. Thank you once again. 45:06 45 minutes, 6 seconds Thank you very much. On behalf of EFC Limited, that concludes this conference. 45:11 45 minutes, 11 seconds Thank you all for joining us today. And you may now disconnect your lines.