EFC (I) Limited — Q4 FY26

EFC (I) Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=D9c9QAIl1pI Published: 2 weeks ago

0:00 Ladies and gentlemen, good day and welcome to the EFC India Limited Q4 FY26 earnings conference call. As a reminder, 0:10 10 seconds all participant lines will be in the listenon mode and there will be an opportunity for you to ask questions after the presentation concludes. Should 0:18 18 seconds you need assistance during this conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that 0:27 27 seconds this conference is being recorded. I now hand the conference over to Mr. Nikun Seth from MUFG. 0:34 34 seconds Thank you and over to you sir. Thank you Alrich. Good morning everyone. 0:41 41 seconds Welcome to Q4 and FI26 earnings conference call of EFC India Limited. To discuss this quarter performance we have 0:49 49 seconds from the management Mr. Romesh Sahai chairman and managing director. Mr. 0:54 54 seconds Nikil Bha whole time director, Mr. Udai, chief financial officer and Mr. Raman Gupta, company secretary. Before we 1:02 1 minute, 2 seconds 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 involve risk and uncertainty. 1:12 1 minute, 12 seconds For more details, kindly refer to the investor presentation and other filings that can be found on the company's website and stock exchanges. With that I 1:21 1 minute, 21 seconds would now like to hand over the call to Mr. Romesh Sah for his opening remarks. Thank you and over to you sir. 1:28 1 minute, 28 seconds Thank you. Thank you. 1:30 1 minute, 30 seconds Good morning all. On behalf of EFC India Limited I warmly welcome all of you to our earning conference call for the 1:38 1 minute, 38 seconds fourth quarter and full year ended March 30 31st 2026. At the outset, I uh I would like to thank all of our 1:46 1 minute, 46 seconds shareholder, investor uh analysis, banker, client, partner and uh every member of the EFC family for their 1:54 1 minute, 54 seconds continued trust, encouragement and support. Your confidence in our journey has been a very important source of 2:00 2 minutes strength for us. Financial year 20 26 has been a year of a strong progress, 2:07 2 minutes, 7 seconds discipline, execution and deeper strategy clear clarity for EFC. During the year, we continue to strengthen our 2:16 2 minutes, 16 seconds position as a differentiated real estate as a service company built around one integrated platform across space, design and furnishing. 2:26 2 minutes, 26 seconds Our leasing uh business continue to provide a strong annotate foundation. 2:31 2 minutes, 31 seconds Our design inbuilt vertical is gaining momentum through trunky and multi- city execution. 2:38 2 minutes, 38 seconds Uh our furniture business is strengthening backward integration and helping us improve control over cost, 2:44 2 minutes, 44 seconds quality and delivery timelines. Together these three vertical create a platform that is much stronger than each business 2:52 2 minutes, 52 seconds on a standalone basis. Releasing give us a recurring revenue and client. um stickness design and build give us 3:00 3 minutes execution capability and growth momentum. Furniture gives us a supply chain control and margin resilience. Uh 3:07 3 minutes, 7 seconds this combination is what make a ESC differentiated. We also continue to focus on on the quality of growth, 3:14 3 minutes, 14 seconds enterprise entering revenue, long client tenure, improving portfolio diversification and a discipline approach to expansion are important pillar of our strategy. 3:25 3 minutes, 25 seconds We are not pursuing growth for the sake of growth. We are building a company that can scale sustainably long-term 3:32 3 minutes, 32 seconds value at its core. The opportunity ahead remain very strong. India continue to uh benefit from the expansion of glo GCC 3:40 3 minutes, 40 seconds global capability center technology company financial services consumer business and new age enterprise. Across 3:48 3 minutes, 48 seconds sector companies are increasingly looking for manage flexible and integrated workspace solution that reduce uh upfront capital expenditure and improve speed to market. 3:59 3 minutes, 59 seconds We believe EFC is very well positioned to benefit from this structural trends. 4:05 4 minutes, 5 seconds Our platform has the reach execution depth client relationship and integrated capabilities required to serve this 4:13 4 minutes, 13 seconds demand across India. As we enter uh FY27, our focus will remain clear. We 4:20 4 minutes, 20 seconds will continue to expand with discipline, improve asset efficiency, strengthen enterprise relationship, scale our 4:27 4 minutes, 27 seconds design and build capability, enhance our furniture manufacturing advantage and create long-term value for all 4:34 4 minutes, 34 seconds stakeholders. I would uh also like to take this opportunity to thank thanks our board, leadership team, employees, 4:41 4 minutes, 41 seconds client, partner and uh shareholder. The progress we have made is the result of collective effort, resilience and belief 4:48 4 minutes, 48 seconds in in a shared vision. We remain humble about what we have achieved but very confident about the road ahead. EFC 4:57 4 minutes, 57 seconds today is stronger, more integrated and better prepared for the next phase of growth. Uh with that I now hand over the 5:05 5 minutes, 5 seconds call to Mr. Nikl Bhutam whole time director who will take you through the business performance and strategic progress our vertical. Nikl sir. 5:14 5 minutes, 14 seconds Thank you very much Omeshes. Uh good morning everyone and thank you so much for joining us today. 5:21 5 minutes, 21 seconds It's it's genuinely a pleasure to welcome all of you and share about the business performance of EFC India Limited for FI26. 5:31 5 minutes, 31 seconds This has been an important year and a milestone year for the company because the strength of our integrated real estate as a service platform has become 5:39 5 minutes, 39 seconds more visible across all our operating verticles. 5:44 5 minutes, 44 seconds At EFC, our business is built around three specialized but deeply connected verticals as we understand which is leasing, design and build and furniture. 5:55 5 minutes, 55 seconds Together this vertical across the complete workspace life cycle from identifying and managing spaces to 6:03 6 minutes, 3 seconds designing and building it to manufacturing and supplying furniture. 6:08 6 minutes, 8 seconds This is the essence of EFT's model. one platform, multiple engines, and unified value creation. Our aim is to become a 6:16 6 minutes, 16 seconds trusted partner for enterprises that want to outsource their workplace infrastructure to a professional, 6:23 6 minutes, 23 seconds scalable, and accountable platform like ours. We are not only offering office spaces, we are offering speed, 6:31 6 minutes, 31 seconds convenience, cost efficiency, execution certainty, and long-term operating support. 6:38 6 minutes, 38 seconds Let me begin with the leasing vertical which continues to remain the foundation of our business. 6:44 6 minutes, 44 seconds Our leasing vertical has delivered strong performance and continues to demonstrate a sticky enterprise demand 6:51 6 minutes, 51 seconds at scale. We now have presence across 25 cities and serve more than 750 clients 6:58 6 minutes, 58 seconds across multiple sectors. Our our average enterprise client tenure is about 51 7:04 7 minutes, 4 seconds months which reflects the strength, trust and stickiness of our client relationship. 7:11 7 minutes, 11 seconds The leasing business provide customized, scalable and fully furnished office solutions. This include enterprise 7:18 7 minutes, 18 seconds offices, managed offices and customized offices. Our solutions are designed for companies that want privacy, control, 7:26 7 minutes, 26 seconds flexibility, operational efficiency, and speed of deployment without taking on the burden of building and managing real estate infrastructure themselves. 7:36 7 minutes, 36 seconds During the year, the quality of our leasing portfolio continued to improve. 7:41 7 minutes, 41 seconds Enterprise revenue contributed a majority share of the business and the contribution from the top 10 clients has reduced to around 24%. 7:51 7 minutes, 51 seconds reflecting lower concentration risk and hence better diversification. 7:56 7 minutes, 56 seconds This gives platform a great resilience and revenue visibility. 8:02 8 minutes, 2 seconds Operationally the leasing business has also scaled well. The build seed base has increased meaningfully and we 8:11 8 minutes, 11 seconds continue to have additional capacity under development. This gives us confidence in our ability to support future growth. The business also 8:19 8 minutes, 19 seconds continues to demonstrate attractive unit economics with a payback period around 18 to 20 months and healthy re revenue to rent dynamics. 8:29 8 minutes, 29 seconds Geographically our business is well diversified. While the west remains our largest region, we have a meaningful presence across north, south and east 8:37 8 minutes, 37 seconds India. This nationalwide presence is an important because many of our enterprise clients are expanding across multiple 8:46 8 minutes, 46 seconds cities and want a partner who can support them consistently across locations across the country. The demand 8:53 8 minutes, 53 seconds environment for managed office remains structurally strong. 8:58 8 minutes, 58 seconds Enterprises today are increasingly moving from ownership heavy capexled real estate models to flexible 9:05 9 minutes, 5 seconds professionally managed and opexled models. 9:08 9 minutes, 8 seconds Global capability centers, GCC's, technology companies, BFSI clients, consumer platforms, and other and large 9:16 9 minutes, 16 seconds enterprises are all looking for faster market entry, better employee experience, and lower setup risk and greater flexibility. 9:25 9 minutes, 25 seconds EFC is well positioned to serve this demand because we provide not only space but a complete workplace infrastructure 9:32 9 minutes, 32 seconds solution. Let me now move to our uh design and build vertical which is also slowly but steadily has become a very 9:41 9 minutes, 41 seconds strong foundation for our company's growth. This business has become a very important growth engine for EFC in FI26. 9:49 9 minutes, 49 seconds Design and build revenue stood at approximately 4 437 cring 9:56 9 minutes, 56 seconds 66% yearonear. This performance reflects stronger execution, increasing turnkey mandates, and growing acceptance of our 10:05 10 minutes, 5 seconds capabilities among enterprises and institutional clients. Our designing build vertical provides end-to-end workplace development solutions. We work 10:13 10 minutes, 13 seconds across concept planning, workplace design, fit outs, MEP services, project management, execution, and delivery. The 10:21 10 minutes, 21 seconds business has over 80 designers and engineers, more than 45 reputed clients, presence across more than 15 locations 10:28 10 minutes, 28 seconds and a design footprint of approximately 5.5 million square ft. The order book also remains very healthy and and really 10:36 10 minutes, 36 seconds strong. This vertical is strategically important because it strengthens the entire EFC platforms. It enables faster 10:44 10 minutes, 44 seconds fitouts for our leasing businesses, better customization for clients, quicker go live timelines and stock stronger execution control. It also 10:53 10 minutes, 53 seconds allows us to take up large complex and multilocational projects with confidence. Another important advantage 11:00 11 minutes is our execution model. We execute a large part of the work through in-house capabilities supported by bulk 11:07 11 minutes, 7 seconds procurement, strong vendor relationship and disciplined project management. This helps us control cost, quality and 11:15 11 minutes, 15 seconds timeliness. In a market where clients increasingly demand transparency, speed and reliability, this is a major 11:22 11 minutes, 22 seconds differentiator. The designer will vertical also creates significant cross-selling opportunities. A client may begin with a designable mandate and 11:30 11 minutes, 30 seconds a large later become a managed office client. Similarly, a leasing client may use for expansion, fitouts, 11:38 11 minutes, 38 seconds refurbishment or multi-ity workplace development. This interconnection increases client time lifetime value and strengthens our platform economics. 11:49 11 minutes, 49 seconds Now let me speak about the furniture manufacturing verticles also. Our furniture business is still in a relatively early stage compared to the 11:56 11 minutes, 56 seconds leasing and design verticles but it is strategically very very important. In FY26 furnitureure revenue stood at more 12:04 12 minutes, 4 seconds than 63 cring 200% yi. This strong growth demonstrates the potential of 12:12 12 minutes, 12 seconds this vertical and its role in our integrated model. Through our furniture capabilities, we design and manufacture 12:18 12 minutes, 18 seconds workstations, execution desk, lounge seings, storage solutions, modular furniture and other products for 12:25 12 minutes, 25 seconds commercial and allied spaces. Our Pune manufacturing facility spans across 1.2 lakh square ft and gives us better 12:34 12 minutes, 34 seconds control over quality, cost, customization, and delivery. The furniture business has more than 1,500 SQUs has delivered more than 60,000 12:42 12 minutes, 42 seconds units and has manufactured capacity of approximately you know anything around 200 cr plus to 275 cr in value terms the 12:51 12 minutes, 51 seconds business serves sectors such as real estate co-le hospitality ITIT education 12:58 12 minutes, 58 seconds and allied services for EFC furniture is not just a manufacturing business it's a margin acrative backward integ integration 13:07 13 minutes, 7 seconds engine. It support our internal leasing and design and build requirements. 13:11 13 minutes, 11 seconds Reduces vendor dependency, improves turnaround time and allows us to capture additional value across the workplace 13:18 13 minutes, 18 seconds life cycle. This is where the synergy of EFC platforms becomes very powerful. 13:24 13 minutes, 24 seconds When we take up a workplace opportunity, our leasing team understands the client's requirement. Our design and build team converts the requirement into a functional and efficient workplace. 13:34 13 minutes, 34 seconds And our furniture team supports execution through in-house manufacturing and supply chain control and and provides furnitureures which are really 13:42 13 minutes, 42 seconds making difference to their daily work life. This reduces external dependency, improves execution speed, enhances 13:51 13 minutes, 51 seconds quality control and supports margin resilience. This integrated model also improves value unlocking for investors 13:59 13 minutes, 59 seconds over time. As each vertical scales, the benefit do not remain limited to those verticals alone. The leasing and 14:06 14 minutes, 6 seconds business creates recurring revenue and long-term client relationship. The design and build business increases execution depth and cross-selling 14:13 14 minutes, 13 seconds opportunities and the furniture business improves cost control, captures additional margin. Together, they create 14:21 14 minutes, 21 seconds a platform with multiple revenue streams, better operating leverage, and a stronger client stickiness. This is 14:28 14 minutes, 28 seconds the core of of our value creation strategy at EFC. We believe that the market with increasingly reward 14:36 14 minutes, 36 seconds platforms that are integrated, scalable, asset efficient and execution focused. 14:42 14 minutes, 42 seconds EFC is building exactly such a platform and has really come long way in building this with the result that we have 14:50 14 minutes, 50 seconds delivered for FI26. Our business is no longer dependent only one revenue stream. We are creating a broader 14:57 14 minutes, 57 seconds ecosystem that can serve clients across the full workforce journey and capture value at multiple points. Operationally, 15:05 15 minutes, 5 seconds FY26 has been a year of strong progress across all fronts. We scale capacity, deepen enterprise relationships, reduce 15:14 15 minutes, 14 seconds concentration risk, strengthen design and build execution, expanded furniture capabilities and improve integration 15:21 15 minutes, 21 seconds across all verticles. This results is a business that is more diversified, more efficient and better prepared for 15:30 15 minutes, 30 seconds sustainable growth. As we look ahead, our priorities are very clear. We will continue to deepen enterprise relationships, expand capacity in a 15:38 15 minutes, 38 seconds disciplined manner, improve asset efficiency and strengthen project execution, scale our design and build business and build furniture 15:46 15 minutes, 46 seconds manufacturing into meaningful but a strategic advantage. We are optimistic about the future because the structural opportunity is large. The demand 15:54 15 minutes, 54 seconds environment is favorable and our integrated platform is becoming stronger with every passing year. At the same 16:01 16 minutes, 1 second time, we remain grounded and focused on execution. Our objective is to build the with discipline, professionalism, 16:09 16 minutes, 9 seconds governance, and long-term thinking. We want to create a company that delivers value not only through growth but 16:16 16 minutes, 16 seconds through quality of growth. In summary, FI26 has validated our business model. 16:23 16 minutes, 23 seconds Leasings gives us stability. Design and build gives us growth and execution strength. While furniture gives us integration and margin opportunities. 16:32 16 minutes, 32 seconds Together these verticals create a strong scalable and differentiated real estate as a service platform. We believe this 16:40 16 minutes, 40 seconds platform can unlock significant value for stakeholders in the earth ahead. 16:45 16 minutes, 45 seconds With that I will hand over the call to our chief financial officer Mr. 16:50 16 minutes, 50 seconds who will take you through the financial performance. Thank you all. Thank you all for being with us today. 16:57 16 minutes, 57 seconds Thank you Nikl sir. Good morning everyone and thank you for joining us on the call. I will now take you through 17:04 17 minutes, 4 seconds the financial performance of EFC India Limited for the fourth quarter and full year ended March 31, 2026. 17:13 17 minutes, 13 seconds FI26 has been a strong year of financial delivery for the company. We have delivered broad-based growth across 17:20 17 minutes, 20 seconds revenue, profitability, return ratios and segmental performance. The year also reflects the operating strength of our 17:28 17 minutes, 28 seconds integrated platform and the benefits of scale across our leasing, design and build and furniture business. 17:36 17 minutes, 36 seconds For the full year FI26, consolidated revenue from operation stood at 10,367 17:42 17 minutes, 42 seconds million compared with 6,567 million in FI25, representing year-on-year growth of 58%. 17:52 17 minutes, 52 seconds EPIDA for FI26 stood at 4,683 million compared with 3,277 18:00 18 minutes million in FY25, reflecting a strong growth of 43%. 18:05 18 minutes, 5 seconds Profit after tax stood at 2347 million compared with 148 million in FY25, registering a strong growth of 67%. 18:18 18 minutes, 18 seconds Our cash margin improved from 21.4% in FY25 to 22.6% in FI26. 18:26 18 minutes, 26 seconds This improvement reflects the benefits of operating leverage, stronger execution, better integration across verticals and disciplined cost control. 18:36 18 minutes, 36 seconds Our return profile also remained strong. 18:39 18 minutes, 39 seconds The return on capital employed stood at 33% in FY26 compared with 30% in FY25. 18:46 18 minutes, 46 seconds This is an important metric for us because it shows that the company is not only growing but growing with capital efficiency. 18:54 18 minutes, 54 seconds Coming to the fourth quarter performance, revenue from operations in quarter 4 FI26 stood at 2929 million 19:03 19 minutes, 3 seconds compared with 2,110 million in quarter 4 FI25 representing growth of 39% yearonear. 19:13 19 minutes, 13 seconds AITA for the quarter stood at 1,436 million compared with 1,93 19:19 19 minutes, 19 seconds million in quarter 4 F25 registering a growth of 32%. 19:25 19 minutes, 25 seconds Profit after tax for Q4 FY26 stood at 689 million compared with 480 million in quarter 4 FY25 reflecting growth of 45%. 19:36 19 minutes, 36 seconds The PAT margin for the quarter improved to 23.5% from 22.7% in Q4 FI25. 19:44 19 minutes, 44 seconds This shows that even as the business scales, we are continuing to to maintain healthy profitability. 19:50 19 minutes, 50 seconds Let me now briefly cover the segmental performance. The leasing business remained the largest contributor to revenue. Full year rental revenue stood 19:59 19 minutes, 59 seconds at approximately 5,356 million compared with 3,722 million in FY25 representing growth of around 44%. 20:09 20 minutes, 9 seconds This vertical continues to provide a stable recurring revenue base and strong operating visibility. 20:17 20 minutes, 17 seconds The design and built business delivered revenue of approximately 4,378 million in FI26 20:24 20 minutes, 24 seconds compared with 2,636 million in FI25 reflecting growth of around 66%. 20:32 20 minutes, 32 seconds This has been driven by stronger execution, increasing turnkey mandates and cross-selling opportunities across 20:38 20 minutes, 38 seconds the EFC platform. The furniture business delivered revenue of approximately 632 million in FI26 compared with 209 20:47 20 minutes, 47 seconds million in FI25 registering growth of around 202%. 20:53 20 minutes, 53 seconds While this vertical is still scaling, it is strategically important because it supports backward integration, improves 21:00 21 minutes execution speed and strengthens margin potential across the ecosystem. 21:05 21 minutes, 5 seconds From a segment profitability perspective also all three business contributed meaningfully. The rental segment delivered profit before tax and interest 21:14 21 minutes, 14 seconds of approximately 2,127 million. The interior segment delivered approximately 1,197 million and the 21:23 21 minutes, 23 seconds furniture segment delivered approximately 156 million. This reflects a healthy and broad-based contribution 21:29 21 minutes, 29 seconds from the platform. Moving to the balance sheet, total assets increased to approximately 26,751 21:37 21 minutes, 37 seconds million as of March 31st, 2026 compared with 16,992 million as of March 31st, 2025. Total 21:47 21 minutes, 47 seconds equity increased to approximately 8,137 million compared with 5,811 million in the previous year. This strengthening of 21:55 21 minutes, 55 seconds the balance sheet reflects retained earnings and the continued growth of the company. During the year, non-current assets increased driven by property, 22:04 22 minutes, 4 seconds plant and equipment, right of use assets and other financial assets. This reflects our continued investment in 22:11 22 minutes, 11 seconds building long-term capacity and operating infrastructure. 22:15 22 minutes, 15 seconds On the liability side, lease liabilities and borrowings have increased in line with the expansion of our operating footprint and business scale. We remain 22:24 22 minutes, 24 seconds conscious of capital discipline and will continue to focus on efficient capital deployment and prudent leverage 22:32 22 minutes, 32 seconds on cash flows. Profit before tax for FI26 stood at approximately 3,89 million. As the business scaled across 22:40 22 minutes, 40 seconds verticals, working capital requirements increased particularly in trade receivables, inventories and other financial assets. Improving working 22:48 22 minutes, 48 seconds capital efficiency and collections will remain an important priority for us in FI27. 22:54 22 minutes, 54 seconds Finance cost for the year stood at approximately 562 million and depreciation and amortization stood at approximately 1,22 million. These are 23:04 23 minutes, 4 seconds aligned with the scale of our asset base and right of use assets. Basic and diluted earnings per share for FI26 23:12 23 minutes, 12 seconds stood at 16.87 87 compared to 10.35 in FI25. 23:20 23 minutes, 20 seconds Overall FI26 has been a year of strong financial performance. Revenue growth has been robust. Abita has grown 23:28 23 minutes, 28 seconds meaningfully. Pad growth has been strong. Margins have improved. Return ratios remain healthy and all three business verticals have contributed to 23:36 23 minutes, 36 seconds the company's performance. What is important is that this performance has not come from a single lever. It has 23:44 23 minutes, 44 seconds come from broad-based execution across the platform. Leasing has provided stability. Design and build has provided 23:51 23 minutes, 51 seconds growth momentum. Furniture has added integration and margin potential. 23:56 23 minutes, 56 seconds Together, these businesses are creating a stronger and more resilient financial model for EFC. 24:02 24 minutes, 2 seconds As we move into FI27, our financial priorities will remain very clear. We will continue to focus on profitable 24:11 24 minutes, 11 seconds growth and disciplined capital allocation, efficient working capital management, prudent leverage, stronger cash generation and sustainable value 24:20 24 minutes, 20 seconds creation. We believe the company is well placed to continue its growth journey while maintaining financial discipline 24:27 24 minutes, 27 seconds and creating long-term value for shareholders. With this, I would like to thank all our investor, analyst and 24:35 24 minutes, 35 seconds stakeholders for their continued support and confidence in EFC. We can now open the floor for questions. Thank you. 24:44 24 minutes, 44 seconds Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star 24:51 24 minutes, 51 seconds and one on their touchtone telephone. 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. 25:03 25 minutes, 3 seconds Ladies and gentlemen, we will wait for a moment while the question Q assembles. 25:12 25 minutes, 12 seconds The first question comes from the line of Bhat with compact capital. Please go ahead. 25:18 25 minutes, 18 seconds Yeah, thank you ESU team. Uh and congratulations for the wonderful uh result for FI26. Sir uh I wanted to 25:27 25 minutes, 27 seconds understand uh as we understand there are three verticals at ESC uh leasing, design and build and furniture. Uh so if 25:34 25 minutes, 34 seconds any of the vertical is underperform how this will impact the overall consolidated margin especially when you 25:41 25 minutes, 41 seconds know you have explicitly mentioned in like underperforming of any vertical can impact the overall profitability. So 25:48 25 minutes, 48 seconds would love to understand what is the management view. 25:52 25 minutes, 52 seconds Thank you. Thank you so much Barat. uh and uh and uh specifically to your question, you know, yes uh the beauty of 26:00 26 minutes this model is that as we understand that they are all contributing to the overall profitability, overall revenue uh stream 26:08 26 minutes, 8 seconds that the company has uh you know really acrewing. But what is you know important is that the dependency as you can you 26:16 26 minutes, 16 seconds know as you understand from your own question dependency is very limited because uh uh number one the the 26:23 26 minutes, 23 seconds likelihance of underperforming my annuity business which is my leasing business is very low because you know uh 26:31 26 minutes, 31 seconds my annuity business is very certain you know I have a very clear long-term contracts and as you see in my even my 26:38 26 minutes, 38 seconds presentations we have said that my you know managed office client tenurs 51 months which means that that kind of stickiness is there and that kind of 26:46 26 minutes, 46 seconds certainty is there in the revenue. So leasing vertical is providing me that strong backbone. So hence underperformance at leasing vertical is 26:54 26 minutes, 54 seconds almost ruled out. When it comes to the design and build vertical, the design and build vertical again now we have 27:00 27 minutes come into a situations where today I we are as a company when we are bidding for projects. We are only those among top 27:09 27 minutes, 9 seconds three, top five uh you know kind of contractors who are eligible to you know bid for contracts more than 50 to 100 cr 27:17 27 minutes, 17 seconds to 200 cr kind of size and hence again we are among those limited competition and our ability to win those contracts 27:26 27 minutes, 26 seconds becomes much much better and hence again there is a larger certainty there in that business and hence uncertainties is 27:33 27 minutes, 33 seconds almost ruled out and when it comes to furniture which is prim primarily you know kind of supporting both this vertical number one which is one of its 27:41 27 minutes, 41 seconds key and secondly the way the financial business in the in the in our country growing considering the new regulations 27:48 27 minutes, 48 seconds that the government is put in in form of BI's registration and also you know how the government is looking at reducing 27:55 27 minutes, 55 seconds the import dependency because you know obviously it is impacting the foreign exchange for us so all these measures are really really working well for even 28:04 28 minutes, 4 seconds furniture uh vertical and hence First of all, what I want to address is that the uncertainties around any of these three 28:11 28 minutes, 11 seconds vertical is reduced drastically. Number one. Number two, yes, if there is a if there is let's say depend if there is a 28:19 28 minutes, 19 seconds a little bit downgrade in any of the business, then whether there will have an impact on the overall margin profile in absolute term yes. But if you look at 28:28 28 minutes, 28 seconds in relative terms as I can as I've explained more than around 45% of my revenue my top line comes from the 28:35 28 minutes, 35 seconds leasing business which gives me you know kind of a situation that 50% is assured any choice. It is a question of about 28:43 28 minutes, 43 seconds you know those 10 to 20% if there is you know if we look at hypothetically and get into a situation that if there is a a little bad year from an overall 28:51 28 minutes, 51 seconds economical situation point of view then two the performance is unlikely to get really affected overall. So we believe 28:59 28 minutes, 59 seconds that uh you know uh any underperformance from one particular vertical which is likely only to be with design and build 29:06 29 minutes, 6 seconds and furniture because it is more project based and contract based but which is because of the reason which I explained earlier is fairly mitigated. We believe 29:16 29 minutes, 16 seconds that that situation is unlikely. First of all, if the such situations are unlikely to come and you know otherwise also uh we are you know strongly 29:24 29 minutes, 24 seconds balanced in achieving the uh you know the overall margin through these three verticals as we speak. 29:31 29 minutes, 31 seconds Okay. Uh thank you sir. I have one another question. Can I please ask uh yeah please please carry on. 29:37 29 minutes, 37 seconds Yeah. So I I I believe uh furniture business has grown pretty well uh 200% but uh the growth is on the low base. So 29:45 29 minutes, 45 seconds would like to understand what is the sustainable margin especially when furniture business is used for the internal consumption captive business also and third parties. So would love to 29:54 29 minutes, 54 seconds understand you know what is the split between the captive consump captive consumption and the you know third party business and how margin split works at overall level as well. 30:03 30 minutes, 3 seconds So I mean independent of whether it is an internal purpose or for external obviously the margin uh profile remains the same because you know every 30:11 30 minutes, 11 seconds transaction has to be carried out at arms length. number one. Uh number two, in terms of uh scalability, yes, this 30:18 30 minutes, 18 seconds this vertical obviously has uh grown at a low base naturally because it's just a 2-year-old business. Uh so yes, it 30:26 30 minutes, 26 seconds [clears throat] is likely to keep growing at such a large uh pace and we are expecting this business to deliver 30:33 30 minutes, 33 seconds uh you know substantially to our overall revenue streams. uh in terms of margin profile it we have always clarified that 30:41 30 minutes, 41 seconds we are very categorically clear that this business should uh generate to us anything around 25% AITA and uh that is 30:50 30 minutes, 50 seconds what we are expecting from this business because you know this is a value acive uh you know highly you know uh in 30:57 30 minutes, 57 seconds intensive capital intensive business and hence we are uh very hopeful that we should be able to continue achieving those margin even if at the scale that 31:06 31 minutes, 6 seconds we are expecting towards operate in the coming years. Okay, understood. Thank you. 31:14 31 minutes, 14 seconds Thank you. 31:15 31 minutes, 15 seconds The next question comes from the line of moan Kumar with Athena Investments. Please go ahead. 31:23 31 minutes, 23 seconds Thank you. Congratulations EFCT. 31:27 31 minutes, 27 seconds I have a question uh around the AI which we see everywhere around. uh as we all 31:35 31 minutes, 35 seconds know AI can reduce headcount intensity in the sectors which you are serving primarily ITITS BFSI or support function 31:43 31 minutes, 43 seconds which is primarily your clients. Uh why should AI be net positive for seat demand rather than a structural threat 31:50 31 minutes, 50 seconds to occupancy and what evidence do you have from your client renewals or new mandates or from any other information source? 32:00 32 minutes [clears throat] 32:01 32 minutes, 1 second Yeah. No, no, thank you so much. And yes, AI is certainly is a new buzz word. 32:06 32 minutes, 6 seconds I mean, I don't know, we can see it around, but yes, we can definitely feel it around the way. You know, it is really disrupting the the market. And 32:13 32 minutes, 13 seconds yet, it is it is here for good. It is here for uh you know, business process improvements and uh and we are very 32:21 32 minutes, 21 seconds happy that such improvements, such radical changes really helps businesses in general. uh but you know I mean we 32:28 32 minutes, 28 seconds haven't uh really rather seen any negative impact of that. I mean the way if you really look at it and I I'm sure 32:36 32 minutes, 36 seconds you would appreciate the kind of AI is rather generating a new grid of employments, new category of employments 32:44 32 minutes, 44 seconds and we are very categorically clear that you know with the AIE businesses your businesses would get little more structured and hence when you are 32:53 32 minutes, 53 seconds looking at more structured businesses the platforms like ours which offer those structured solutions will become more relevant and more more important 33:01 33 minutes, 1 second for those businesses and ra so what what we're trying to say is that yes there is going to be an impact on the overall you 33:10 33 minutes, 10 seconds know the way the the employment market functions overall industries whether it is IT I it industries but this is all 33:17 33 minutes, 17 seconds going to really add to the overall growth because it is an evolution and you know I mean you know ome 33:25 33 minutes, 25 seconds has also been very vocal about this and I'd also request him to contribute here a bit point Your question is how AI impact in 33:33 33 minutes, 33 seconds our business. Correct. So hello. Huh. So huh. So 33:56 33 minutes, 56 seconds the second engineering construction 34:09 34 minutes, 9 seconds Digitally 34:23 34 minutes, 23 seconds definitely, but at the same performance. 34:36 34 minutes, 36 seconds Let's suppose 34:53 34 minutes, 53 seconds at the same time 35:04 35 minutes, 4 seconds learning version two, version three, version 35:12 35 minutes, 12 seconds four. It means back improvement just like 35:30 35 minutes, 30 seconds timeific. 35:51 35 minutes, 51 seconds At the same time, accordingly. 36:14 36 minutes, 14 seconds Thank you questionc expansion uh% 36:25 36 minutes, 25 seconds revenue last financial year 26 GCC and then 36:34 36 minutes, 34 seconds already in terms of GCC and MLC set split seat count. 36:43 36 minutes, 43 seconds So GCC uh contributes I mean because these are all those large enterprises who are committed to us for a long 36:51 36 minutes, 51 seconds tenure. So that business has always been a strong uh pillar for our uh leasing 36:56 36 minutes, 56 seconds vertical growth and u we it is about 60% of our revenue comes from uh this uh 37:04 37 minutes, 4 seconds large enterprise customers that we're talking about or referring to and in terms of you know across the across the 37:12 37 minutes, 12 seconds city spread if you look at it we are looking at [clears throat] growing around 18 to 20,000 seats year on year 37:19 37 minutes, 19 seconds and that is what we've been achieving for last two financial years as well. Uh if you look at the same scale we are expecting that you know between 37:28 37 minutes, 28 seconds geography uh rather than getting city wise I'm just giving you zone wise let's say west and uh NCR is going to uh you 37:36 37 minutes, 36 seconds know become very prominent for us along with the southern belt which is your Hyderabad, Bangaluru and Chennai. So we 37:44 37 minutes, 44 seconds believe that uh all the three these zones are going to contribute uh substantially primarily in the ratio of 37:52 37 minutes, 52 seconds let's say around uh you know equally around 30% each and there is about expected growth now from the even the 37:59 37 minutes, 59 seconds eastern belt with the you know change in the political dynamics there etc. We are expecting the growth uh also coming in 38:07 38 minutes, 7 seconds soon there. Obviously, it'll take some time structurally but yes we are expecting hence substantial growth in 38:13 38 minutes, 13 seconds the eastern side also uh relatively. So yes I I hope that answers your question in terms of the divisions across this uh uh geography for us. 38:24 38 minutes, 24 seconds Thank you so much. Thank you sir. Welcome G. 38:28 38 minutes, 28 seconds The next question comes from the line of Hassan with Otari family office. Please go ahead. Hi, good morning. Good morning sir. 38:36 38 minutes, 36 seconds Firstly, congratulations on the results and uh congratulation on the right issue of successfully getting competent. So my 38:44 38 minutes, 44 seconds questions are basically is that uh I have been tracking the stock and year on year here the growth has been significant. We have shown good uh 38:53 38 minutes, 53 seconds substantial profits profitability. Then uh why did we raise the capital for working capital? So what was the reason 39:01 39 minutes, 1 second for the working capital and having said that how will this working capital turn into real cash flow generation and not 39:08 39 minutes, 8 seconds just a revenue a receivable or lease obligation uh in the balance sheet. 39:14 39 minutes, 14 seconds No, thank you so much uh Basan for tracking us, following us and uh uh you know I mean to be honest I mean as we've 39:22 39 minutes, 22 seconds always explained that all three of our businesses while they are not you know uh heavy capital intensive in a sense 39:29 39 minutes, 29 seconds that they're not fixed capital intensive but they are certainly working capital incentive intensive uh not the leasing but certainly the design and build and 39:38 39 minutes, 38 seconds the furniture business and hence the requirement for vertic with the growth that we are achieving you can You know we last year in the design and 39:46 39 minutes, 46 seconds build vertical we've grown at about 66% yi and in the furniture we have grown at about 200% yi. Now even if I have to 39:55 39 minutes, 55 seconds maintain half of this growth, the kind of working capital that we require is is humongous and yes the business is 40:03 40 minutes, 3 seconds throwing good cash for us because you know the kind of profitability that we have achieved but certainly these profits are not kind of available to you 40:11 40 minutes, 11 seconds as in it is a is a cyclical fund that is available to you and to keep growing you need to have those backup funds with you 40:19 40 minutes, 19 seconds in the current economic situations in the current market situations and it is required that you know if we have those watches available then we would be able 40:28 40 minutes, 28 seconds to achieve the targets that we have really set high for ourselves. So the working capital is certainly to really 40:35 40 minutes, 35 seconds you know fuel the the growth that we have targeted for ourselves and we are going to be very uh as even our CFO very 40:44 40 minutes, 44 seconds categorically explained in his speech that we're going to very judicious in use of this capital. We are going to be very specific and disciplined in use of 40:52 40 minutes, 52 seconds this capital and know primarily this capital as Mr. Asan explained is primarily for growth purposes only since 41:01 41 minutes, 1 second all these verticals are fairly working capital intensive. 41:07 41 minutes, 7 seconds Thank you sir. Thank you. Uh I think uh can I ask one more question please? Yeah please go ahead. 41:13 41 minutes, 13 seconds Yeah sir uh again uh related to the fund raise only. So uh uh we did a right issue. So we I I really want to 41:21 41 minutes, 21 seconds understand CST to my understanding is currently undervalued. I would say not correctly valued. It can be good 41:29 41 minutes, 29 seconds potential. Then why did we choose the right issue instead of doing a QIB or the data? 41:35 41 minutes, 35 seconds You know, first of all, you know, it was important for us that, you know, we've got a very really committed and a loyal set of uh existing shareholders and it 41:44 41 minutes, 44 seconds becomes our uh you know, kind of kind of a a moral responsibility that we obviously go and approach them and seek 41:52 41 minutes, 52 seconds their participation in the business. uh as long as they're you know also kind of committed with us we will be more and we need to kind of reciprocate accordingly. 42:00 42 minutes So first we thought that uh you know this is a good option accordingly. The second naturally also if you look at uh 42:07 42 minutes, 7 seconds you know uh our overall plan that yes we we do have a plan to do a lot of capex going forward down the line and we'll 42:15 42 minutes, 15 seconds certainly use the QIB route which is necessary for us to bring in lot of institutional business but right now since the capital requirement was very 42:23 42 minutes, 23 seconds limited uh we thought that going to our existing set of loyal customer shareholders would uh really take care of the requirement and that was uh 42:32 42 minutes, 32 seconds specifically the reason why which has gone to the existing to adopted the right issue route over the other you know available options uh under the 42:42 42 minutes, 42 seconds market here okay sure sir but why don't debt then the debt is also there I mean if you see 42:50 42 minutes, 50 seconds on the balance sheet debt is also there I mean this is this capital obviously will be used as a margin for raising more capital [clears throat] will used 42:59 42 minutes, 59 seconds for as a base for now today let's say if my working capital cycles are large. If my working capital commitments are large 43:07 43 minutes, 7 seconds then there will be certain capital which you'll require as an seed from the company and that seed will come through this. So that is what we are planning. 43:15 43 minutes, 15 seconds It is not that the debt is not considered. Obviously an optimal debt equity ratio is necessary for us to you 43:23 43 minutes, 23 seconds know maintain the profitable margins and uh it will continue to be part of the overall uh you know the capital deployment strategy for the company. 43:32 43 minutes, 32 seconds Sure. No good. Thank thanks for your clarific. 43:39 43 minutes, 39 seconds The next question comes from the line of Fenel Brahbert with choice institutional equities. Please go ahead. 43:47 43 minutes, 47 seconds Uh hello and good morning everyone. I hope I am audible and uh congratulations for the good set of number. So I have a 43:55 43 minutes, 55 seconds couple of question if you allow me. So first let's start with the uh this guidance on the consolidated revenue 44:02 44 minutes, 2 seconds growth for FI 2728 with the segment wise expectation for leasing design and furniture. So like for design uh order 44:11 44 minutes, 11 seconds inflow for uh and for furniture any any uh any uh specific guidance it company 44:19 44 minutes, 19 seconds has or management has and from where we are getting this uh uh this growth what we are expecting and uh the segment wise builda margin as well if possible. 44:32 44 minutes, 32 seconds Yes. Uh Fenel uh in terms of uh you know looking at all the three uh verticals uh as we maintained that on the leasing 44:40 44 minutes, 40 seconds vertical we are expecting that we'll continue to grow at least by adding about 18 to 20,000 seats uh year on year 44:48 44 minutes, 48 seconds and this year also we are expecting to add uh the you know about 18 to 20,000 seats which is already you know most of 44:55 44 minutes, 55 seconds it is visible to us as we have already stepped into this new financial year. Uh in terms of you know uh the in terms of 45:05 45 minutes, 5 seconds design and build vertical is concerned uh we are expecting to keep growing very well and we are expecting that about you 45:12 45 minutes, 12 seconds know around 40% growth rate is fairly achievable considering the kind of orders businesses which are already in 45:19 45 minutes, 19 seconds hand or already under pipeline u you know from v various institutional businesses uh various sectors across uh 45:28 45 minutes, 28 seconds I mean whether it is office infrastructure ure to uh you know any heavy infrastructure in terms of building factory premises to 45:37 45 minutes, 37 seconds you know healthcare centers to any other such infrastructure. uh and on the furniture vertical uh yes as I explained 45:45 45 minutes, 45 seconds earlier that the vertical is right now you know kind of uh positions very aptly 45:52 45 minutes, 52 seconds when you know the government policies overall economic situation where import substitutions is a need of the hour 46:00 46 minutes where government is also pro promoting you know making India endeavors so we believe that the furnitureures industry 46:08 46 minutes, 8 seconds will really uh you know kind of succeed and boom uh in the coming years and we will be part of that wave uh you know 46:16 46 minutes, 16 seconds kind of considering the model that we have created. So we are very hopeful there also that we'll be able to grow over you know 50% growth rate under the 46:24 46 minutes, 24 seconds furniture vertical as well. So we are very uh clear that with coming year is also going to be a a significant year 46:32 46 minutes, 32 seconds because it's going to you know kind of stabilize and reaffirm uh our business model in terms of its uh you know the 46:42 46 minutes, 42 seconds kind of stability growth and continuity that it offers overall. 46:47 46 minutes, 47 seconds Okay. Okay. And you mentioned SIT edition guidance of 18,000 to 20,000. So I think it's it's revised from earlier 46:55 46 minutes, 55 seconds guidance of 20,000 to 25,000 26 right so we achieved around 18,000 for 26 47:04 47 minutes, 4 seconds so I just want to understand like uh uh your view on the shortfall and plus also if we have the handy number or if you 47:12 47 minutes, 12 seconds have number of uh uh average rent per square ft for this leasing business by FY26. 47:21 47 minutes, 21 seconds So uh fel there is no shortfall. What what we mentioned is 20,000 is 18 to 20,000 is the build seat that we are 47:29 47 minutes, 29 seconds talking about and 25,000 seats are the overall capacity that we are talking about. So we continue to achieve that irrespective and we have achieved that 47:37 47 minutes, 37 seconds also 18 to 20,000 is those build seats means which are revenue generating seats. 25,000 seats are those seats which have really added up to our 47:46 47 minutes, 46 seconds overall capacity. So that ratio will continue to uh be achieved and even and the same in same ratio we are talking 47:53 47 minutes, 53 seconds for the current financial year also that 18 to 20,000 seats would be the build operating seats and 25,000 seats would be roughly around the target in terms of 48:02 48 minutes, 2 seconds adding to the capacities. So there is no change in the you know kind of estimations or there is no change in the you know kind of what we expect to 48:10 48 minutes, 10 seconds achieve or have achieved in the last financial year number one. So that is a a clarification that you you know there 48:18 48 minutes, 18 seconds are different kind of ways people are explaining what is matured centers and you know what is uh you know what is an 48:25 48 minutes, 25 seconds occupancy level for us everything is a matured center because you know at the end of the day when a center has come I have to it starts kind of uh uh coming 48:34 48 minutes, 34 seconds with an operating expense and I need to ensure that I kind of recoup that at the quickest. So what we achieve is my 18 to 48:42 48 minutes, 42 seconds 20,000 seats are those seats which are generating revenue. 25,000 seats have added capacities and which will start generating revenue immediately. So 48:51 48 minutes, 51 seconds that's on the you know seat uh position side. uh and in terms of margins as you uh you know asked you know margins are 48:59 48 minutes, 59 seconds continued to remain in the similar line we are very clear that at central level we will be able to achieve 30% plus uh 49:06 49 minutes, 6 seconds AITA and that we continue to achieve uh even for this financial year and going forward as well 49:14 49 minutes, 14 seconds sir on the uh this average rent per square ft if we have uh yeah yes [clears throat] average rent per 49:22 49 minutes, 22 seconds square foot fortunately and with the market situations is continuously increasing. So if you see last quarters 49:29 49 minutes, 29 seconds it was in the range of around 7,000 to 7,250. 49:33 49 minutes, 33 seconds This uh financial year we have on an average we have already achieved 7,250 to 7,500 and we are hopeful that this is 49:42 49 minutes, 42 seconds likely to go upwards only and uh and we are very uh you know kind of the kind of infrastructure facility the locations 49:50 49 minutes, 50 seconds and the requirements of customers are considering those customizations the prices are going to remain on an upward 49:57 49 minutes, 57 seconds scale only and overall average revenue per uh you know per seat is likely to increase only going forward. 50:07 50 minutes, 7 seconds Got it. Got it. Uh thanks for the clarification and and uh one more question on the uh this capex. So can you can you throw some lights on the uh 50:16 50 minutes, 16 seconds capex expectation for SI 2728? uh any major uh business development or any business acquisitions or new plan for 50:25 50 minutes, 25 seconds furniture business we are expecting in FI27 and also uh do we have any plan to acquire a new land parcel if any then 50:34 50 minutes, 34 seconds just mention on that no right now what we're trying to do is we're trying to kind of you know kind of capitalized and uh improve the existing 50:42 50 minutes, 42 seconds capacities uh with the kind of capital flow available and with the kind of infrastructure that is available. So in 50:49 50 minutes, 49 seconds terms of new capex per se uh immediately as we speak we don't have any plans to kind of increase heavily on any capex 50:57 50 minutes, 57 seconds side. Obviously improvements are needed but not in in a scale where you know kind of uh you know that we do any 51:04 51 minutes, 4 seconds substantial capex but yes the growth is likely to be achieved with the existing capacities with more efficiencies to be 51:11 51 minutes, 11 seconds built in there. uh in terms of capex as we know that for the leasing you know we are our we are fairly asset light you 51:18 51 minutes, 18 seconds know there is hardly about overall seats more than not more than 10% of the seats are added through our own capital which is you know if you look at it from a 51:26 51 minutes, 26 seconds from a capital deployment point of view it is just about let's say 2,000 seats 2,000 seats at about you know 50,000 51:34 51 minutes, 34 seconds rupee a seat kind of a capex it's not that substantial that we are looking at from an annual outlay point of view and 51:40 51 minutes, 40 seconds uh from designing build anyway. It is a contractual business. So there is no capex requirement. And on the the 51:47 51 minutes, 47 seconds furniture manufacturing, we do have an you know fairly established uh uh you know manufacturing facility with lot of 51:55 51 minutes, 55 seconds infrastructure available there. Yes, there'll be like I said there'll be improvements in those infrastructure. 52:00 52 minutes There'll be improvements in some capacity in terms of some new machineries being added with the changes in the technology or or the requirement 52:08 52 minutes, 8 seconds in the specific type of products. But we are not looking at any land acquisition per se and increasing the you know capex 52:16 52 minutes, 16 seconds on to you know from that point of view at this point of time as we speak. Thank you. 52:22 52 minutes, 22 seconds Okay. Okay. And uh our average interest rate uh by end of uh FI26 and any major 52:29 52 minutes, 29 seconds date expiry in FI 2728 we are expecting and how we can take a take care of those expiry by refinance or something else. 52:38 52 minutes, 38 seconds So all of our debt are uh primarily asset back debts right now and which is you know are is an LRD or a kind of a 52:47 52 minutes, 47 seconds you know property back transactions which are not even it is all around 7.5 to 7.75 kind of range uh interest rate 52:55 52 minutes, 55 seconds that we are talking about and there is no uh any immediate repayment uh uh situations coming in for this financial 53:03 53 minutes, 3 seconds year because these are long-term debts and they are available on the balance sheet for a longer paid debt. 53:08 53 minutes, 8 seconds So there is no pressure on the balance sheet in terms of immediate repayment on the the the loan liability is concerned. 53:17 53 minutes, 17 seconds Thank you ladies and gentlemen. We would take that as the last question for today. I would now like to hand the conference over to the management for their closing remarks. 53:27 53 minutes, 27 seconds So uh thank you so much uh for joining this call and um we uh we are really grateful to all our investors all uh 53:35 53 minutes, 35 seconds research uh you know organizations and participants who have really been covering us and adding value to the 53:44 53 minutes, 44 seconds overall uh uh you know uh company's growth potentials and uh you know uh we 53:52 53 minutes, 52 seconds thank you so much and uh we'll be back with the bank for the coming financial year. Uh thank you so much and I had good day. 54:00 54 minutes Thank you sir. Ladies and gentlemen on behalf of EFC India Limited that concludes this conference call. Thank you for joining us.