Elgi Equipments Limited — Q3 FY26

Elgi Equipments Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=1lbfB646zPg Published: 3 months ago

0:01 1 second Hello and good morning everyone. On behalf of Asian Markets, we welcome you all to the 3QFI26 earnings webinar of LG Equipments Limited. 0:12 12 seconds We have with us Mr. Jara Madan, managing director representing company. I request Mr. Jam to take us through the opening 0:21 21 seconds remarks and the presentation which will followed by the Q&A session. Sir, over to you Jam. Thank you. 0:28 28 seconds Thank you Kamesh. Thank you uh Asian markets for organizing this as always and good morning ladies and gentlemen. 0:37 37 seconds Uh thank you for uh sharing your time uh with me this morning. Um as usual I will 0:44 44 seconds take take you through a reconciliation of uh the quarter performance with respect to the uh 0:53 53 seconds the earlier quarter. Sorry just give me a minute please. 0:59 59 seconds Yeah. So as you can see the oh sorry uh the 1:07 1 minute, 7 seconds we have improved our profitability our sales has grown by 18%. 1:13 1 minute, 13 seconds But the profida should have been close to 2,000 million but it's actually around,400 1:20 1 minute, 20 seconds and the primary reason is uh on two counts the employee cost and other other 1:26 1 minute, 26 seconds fixed cost are gross profit margin is continues to remain as strong as before. 1:34 1 minute, 34 seconds So you if you look at employee cost further the 6% is because of the 1:42 1 minute, 42 seconds increase in uh you know normal increments across the across the world. 1:47 1 minute, 47 seconds Uh there was a you know we continuing to restructure Europe to bring it back to profitability 1:54 1 minute, 54 seconds or increase profitability. We broken even last year. Um there has been some 2:01 2 minutes, 1 second reorganization cost of letting people go and that's been a one-time cost that's sitting in employee cost and I have 2:10 2 minutes, 10 seconds explained to you over the past year we are investing close to one and a half to 2:16 2 minutes, 16 seconds 2% of our top line in initiatives that pertain to go to market 2:23 2 minutes, 23 seconds in terms of our digital initiatives as well as cost optimization. and finance transformation. So all these costs have 2:33 2 minutes, 33 seconds contributed to a 3% increase in the employee cost uh because of we have 2:39 2 minutes, 39 seconds taken on new category of talent that uh for these various initiatives as well as 2:47 2 minutes, 47 seconds consulting and advisory expenses, software expenses for instance in PLM 2:53 2 minutes, 53 seconds and in uh some of the uh programs that we have started for 3:00 3 minutes reducing our inventory and reducing costs in relation to in response to the 3:07 3 minutes, 7 seconds tariffs. So overall I would say there is nothing to be concerned about. Um we could should be growing sales even more 3:15 3 minutes, 15 seconds and that's another thing that I'll come back and talk about it. So moving on from the uh Ibida reconciliation 3:24 3 minutes, 24 seconds look at sales we have grown across all the geographies except Southeast Asia. 3:30 3 minutes, 30 seconds Southeast Asia is a significant market but our presence there has traditionally been weak. We are reorganizing there. We 3:40 3 minutes, 40 seconds have brought in new leadership there and we are hoping that over the next two to three years there will be a change in our presence in Southeast Asia. 3:53 3 minutes, 53 seconds So if you look at the revenue highlights uh and PBT we have grown by 18% and PBT has grown by 30%. 4:02 4 minutes, 2 seconds uh this is despite the fact that in uh last year I mean last quarter in fact if 4:10 4 minutes, 10 seconds you look at it in relation to the previous the trailing quarter it looks bad but sorry 4:20 4 minutes, 20 seconds so compared to the trailing quarter it looks like it has gone down sorry I'm having some challenges with my 4:32 4 minutes, 32 seconds Can you see my screen? Yes sir, it's visible. 4:38 4 minutes, 38 seconds Okay. Sorry, for some reason I'm So with respect to the trailing quarter, it looks like the current the third quarter 4:45 4 minutes, 45 seconds is bad. But in the trailing quarter we had some exceptional uh other income uh which pertains to uh um 4:55 4 minutes, 55 seconds you know the the sale of property as well as we had some impact in uh this quarter due to tariff. I'll come back 5:03 5 minutes, 3 seconds and talk about it. So overall I think the performance is good. could have been a lot better in terms of our top line 5:10 5 minutes, 10 seconds but uh we are watching that and we are working on various programs to make that happen. 5:18 5 minutes, 18 seconds So if you look at the sales mix uh we continue to have 90 plus% as compressors 5:25 5 minutes, 25 seconds and 8% is automotive and the split between India and the rest of the world continues to be roughly 50/50 continues to be at the same levels. 5:37 5 minutes, 37 seconds So if you look at the consolidated um uh P&L of various quarters, our main um 5:48 5 minutes, 48 seconds impact if you look at the trailing I mean Q2 against trailing the Q2 5:56 5 minutes, 56 seconds trailing quarter the impact on tariffs was almost 1%. Um not we have mitigated it subsequently 6:05 6 minutes, 5 seconds but in the quarter we had in Q2 we had historical inventory on the ground which 6:13 6 minutes, 13 seconds was based on earlier prices and in Q3 we had the uh fresh inventory which was which had the full impact of that 50%. 6:22 6 minutes, 22 seconds Now going forward we have brought the cost reductions in but for the existing inventory to bleed out and for the new 6:32 6 minutes, 32 seconds inventory at a lower cost to come in we think it'll be probably in the second quarter of the next f I mean early part 6:41 6 minutes, 41 seconds of the second quarter. So the first quarter we will still have the impact but we are quite confident that we are 6:48 6 minutes, 48 seconds uh you know we have mitigated it now with the reduction in the in the uh tariffs from 50%. We don't know whether 6:57 6 minutes, 57 seconds it's 18% or there's going to be iron and steel scharge which could increase it beyond 18%. We don't know we're working 7:05 7 minutes, 5 seconds through the details but it's significantly lower than 50%. 7:10 7 minutes, 10 seconds So we expect that there will be a very positive impact in the next financial year as a consequence of our various initiatives that we have run. 7:22 7 minutes, 22 seconds So our cash cash position continues to be strong. Uh our receivables are in 7:28 7 minutes, 28 seconds good control. Our uh our challenges have been inventory you know all over the 7:35 7 minutes, 35 seconds world. uh there has been you know different the challenges in the market is there's been a optimism but the the 7:44 7 minutes, 44 seconds actual result has been not as optimistic as one would expect so that there is an inventory problem. We are working 7:51 7 minutes, 51 seconds through a program and a special project to reduce it. We believe that there is an opportunity to to have a substantial 8:00 8 minutes reduction in inventory. You will see it happening as the year progresses and into the next year and I'm hoping that 8:08 8 minutes, 8 seconds by the third quarter of next year we will be in a lot better position from a 8:15 8 minutes, 15 seconds inventory point of view. So these are roughly the uh the financial metrics. I want to talk a little bit about the 8:24 8 minutes, 24 seconds business. Um overall you know the economies all over the world have seems seem to be coming 8:32 8 minutes, 32 seconds back uh except Europe. Europe continues to be a challenge. Um, India I think had 8:39 8 minutes, 39 seconds a good well the GDP growth is two 6 and a half% which is a pretty good growth and 8:47 8 minutes, 47 seconds considering the circumstances in other parts of the world but I think the growth so far in the Indian economy has 8:55 8 minutes, 55 seconds been consumptionled uh and relatively less of investment. 9:01 9 minutes, 1 second So we expect we beginning to see some signs of investment to build capacity 9:09 9 minutes, 9 seconds uh to catch up for this consumption in the future. We still uh cautiously optimistic about India. Uh 9:17 9 minutes, 17 seconds so we will continue to our presence in the market is strong. Uh that we are confident of. So whatever the economic 9:26 9 minutes, 26 seconds opportunities that show up in India, we are very confident that we will be at the edge of uh taking a large share of 9:35 9 minutes, 35 seconds it. As far as Australia is concerned, u it was a better year compared to the 9:43 9 minutes, 43 seconds previous year. There seems to be some signs of stabilization and recovery in the economy. We've got some projects and 9:52 9 minutes, 52 seconds programs running to improve our presence there. So I'm quite confident that we will grow in Australia uh not only in 10:01 10 minutes, 1 second the balance year but the next year as well. Uh we'll talk more about the guidance for the next five years during 10:09 10 minutes, 9 seconds our u analyst and investor meet that's scheduled in the month of February. Uh so we'll talk a little bit more and 10:17 10 minutes, 17 seconds share more details in that. Uh moving forward, Middle East and Africa continue 10:24 10 minutes, 24 seconds to be strong regions. Uh they're not strategic for us, but they continue to grow strongly. Europe has been a 10:32 10 minutes, 32 seconds disappointment both road by virtue of the tariffs uh on the portable compressors that are shipped to the US 10:40 10 minutes, 40 seconds as well as the European market itself has been down. We are going through a significant cost optimization program uh 10:49 10 minutes, 49 seconds as a temporary kind of a transition before we take stock of the next round 10:55 10 minutes, 55 seconds of growth in in Europe. We are not assuming a growthbased uh P&L. We are looking at a cost managed 11:05 11 minutes, 5 seconds P&L for for uh Europe for not only the balance of the year but for next year as 11:11 11 minutes, 11 seconds well. US has done well for us. Um our industrial business, our patents 11:20 11 minutes, 20 seconds medical business and the portable despite all these problems has been better than last year. Our challenge has been our distribution operations. 11:30 11 minutes, 30 seconds We are working through multiple initiatives to bring it back on to the levels that it should be. We believe 11:37 11 minutes, 37 seconds that it should be. We are working on multiple strategies. So I'm confident that uh Q4 11:44 11 minutes, 44 seconds will be better than Q3. Uh we I don't want to make any commitments in terms of specific numbers but definitely it'll be 11:52 11 minutes, 52 seconds better than Q3 as it always is. But I think it you can't expect it to be that 11:59 11 minutes, 59 seconds you know last last year Q4 was a big hockey stick. I don't think it'll be that kind of a hockey stick but 12:06 12 minutes, 6 seconds definitely better than Q3. So we remain optimistic. We are working on multiple strategies both on technology side, on 12:15 12 minutes, 15 seconds the market side, internal processes side to get to a far better, far more 12:22 12 minutes, 22 seconds efficient and effective organization. So this is what I wanted to share with you today and now we'll talk about questions. Thank you. 12:36 12 minutes, 36 seconds Thank you sir. uh we'll probably wait for a couple of minutes for the question queue to assemble and then probably we'll start taking questions. Uh 12:45 12 minutes, 45 seconds participant uh please use the raise hand option or you may drop your question in your Q&A or the chat box option that is 12:51 12 minutes, 51 seconds available to you. uh in case if there is any audio errors that we might face or due to technical 12:59 12 minutes, 59 seconds problems and if we are not able to hear your voice, you may please drop your question again in the Q&A box or the chat option that is available. 13:11 13 minutes, 11 seconds Sir, we'll take the first question from the line of Mr. Ravi Swaminatan. Uh Ravi, you have been your mic is allowed. 13:19 13 minutes, 19 seconds Please unmute yourself and go ahead with the question. Uh hi sir good morning uh morning. How are you? I'm doing great sir. How are you sir? 13:27 13 minutes, 27 seconds Good thank you. 13:28 13 minutes, 28 seconds Uh sir uh congrats on a good shot of numbers. Uh at a standalone level if you see over after four quarters of uh uh 13:38 13 minutes, 38 seconds mid to high singledigit growth we have registered uh more than 20% kind of growth. Uh was this growth contributed 13:46 13 minutes, 46 seconds largely by India? uh was there was it purely volumedriven growth? Was there a realization improvement also which was 13:55 13 minutes, 55 seconds there in this and in within India was the growth holistic? Uh which subsegments are uh driving the growth 14:03 14 minutes, 3 seconds faster uh on a above average level and you had also mentioned that there seems to be some kind of a recovery from the 14:11 14 minutes, 11 seconds domestic uh investment or capex. Uh which sectors are you seeing those green shoots from? 14:18 14 minutes, 18 seconds Yeah. So uh to answer your first question, the growth has been across multiple things. It is not just not only 14:28 14 minutes, 28 seconds India but our export has also contributed more in Q3. But I don't think that's a trend. You know export to 14:36 14 minutes, 36 seconds our subsidiaries is a function of replenishment. So one quarter there'll be more, one quarter there'll be less. 14:43 14 minutes, 43 seconds The third is also a function of our exchange uh impact. So I don't think there is one uh specific thing. Uh 14:52 14 minutes, 52 seconds there's been multiple contributions to this percentage of growth Ravi but I would say uh the contribution from India 15:02 15 minutes, 2 seconds uh has been both on volume uh primarily volume uh has been very positive that it's the largest contributor. So that's 15:11 15 minutes, 11 seconds the uh broad diagnosis of the growth. Uh the second question that you talked 15:17 15 minutes, 17 seconds about in terms of uh you know the u uh I think your question was in terms of the 15:24 15 minutes, 24 seconds green shoots that we are seeing. Is there specific segments? No. I think we are beginning to see inquiry levels 15:33 15 minutes, 33 seconds going up across pretty much all segments. I think we expect we expect that textiles will come back strongly uh 15:42 15 minutes, 42 seconds as a consequence of the new tariff. Uh so I think there is optimism uh as far 15:50 15 minutes, 50 seconds as India is concerned. I hope I've answered all your questions right. 15:54 15 minutes, 54 seconds Got it sir. And apart from textiles uh like uh say infrastructure u uh industrial that is steel cement 16:02 16 minutes, 2 seconds etc. If you can give broad flavor how those sub sectors are growing that'll be great. 16:08 16 minutes, 8 seconds So cement you know you know that cement has been muted uh their their their profits have not been very good but I 16:17 16 minutes, 17 seconds think it will come around but steel is looking optimistic automotive is looking optimistic. So these I think it's across 16:26 16 minutes, 26 seconds the board. uh Rabi I I won't I won't uh pinpoint it to any one spectre that sector that's standing out today. 16:35 16 minutes, 35 seconds Sure sir. uh and with respect to the US business uh the tariff uh being cut from 16:41 16 minutes, 41 seconds 15 to 18 or some much lower number so we don't know the exact number but uh few quarters ago you had mentioned that for 16:48 16 minutes, 48 seconds a 25% tariff we had to take a high singledigit kind of price increase uh to offset that but with 50% tariff 16:56 16 minutes, 56 seconds difficult it will be difficult to do business there uh how is it now so essentially have we taken price 17:03 17 minutes, 3 seconds increases uh uh and uh uh how how's the dynamics working there now? Visav the 17:11 17 minutes, 11 seconds local supplier how how competitive we are post this cut will we be much more competitive 17:18 17 minutes, 18 seconds so you know if uh you recolct in the last quarter's thing I had said that uh the team had done an outstanding job 17:28 17 minutes, 28 seconds of actually compensating for the entire impact of the 50% right 17:35 17 minutes, 35 seconds okay okay now that's even as we speak many of Those initiatives have already uh come 17:43 17 minutes, 43 seconds into our books and some of them are going to happen in the next probably uh 6 to 7 months. Yeah. 17:52 17 minutes, 52 seconds So we will be with that 6 to 7% increase in our prices 17:59 17 minutes, 59 seconds we have been able to more than recover the tariff impact. Now depending on 18:06 18 minutes, 6 seconds where the tariff is going to land that difference is going to be pure margin for us in the future. Now when do we 18:14 18 minutes, 14 seconds expect to see the margin coming in? Like I said it'll probably start from the second quarter of next year because we 18:22 18 minutes, 22 seconds have got inventory that we need to bleed out. Yeah. Okay. 18:26 18 minutes, 26 seconds So we will see that impact. So uh we are we have passed that tariff in terms of 18:33 18 minutes, 33 seconds local competition you know nothing is really fully manufactured in the US even 18:40 18 minutes, 40 seconds the local assemblers or manu so-called manufacturers are importing quite a bit from all over the world so the impact 18:49 18 minutes, 49 seconds continues for them uh because quite a quite a few of them import from China where the tariff is still at a high levels Yeah. 18:59 18 minutes, 59 seconds Okay. So is that I mean in one ways this tariff has actually been a positive for us. I mean so essentially we are gaining 19:06 19 minutes, 6 seconds uh in terms of realization driven gains which are there and uh now we are back to the old normal 19:14 19 minutes, 14 seconds ways of growing in that particular country. 19:16 19 minutes, 16 seconds Yeah. You know there is that old adage never waste the uh opportunity of a crisis. Yeah. 19:23 19 minutes, 23 seconds Yeah. Yeah. So that's basically what we have done and like I said the team has done a fantastic job of uh of taking us 19:31 19 minutes, 31 seconds of navigating us to a position where we have come out very very strong. 19:37 19 minutes, 37 seconds Got it sir. Thanks a lot sir. Thanks a lot for it. 19:46 19 minutes, 46 seconds Uh thank you Ravi sir. The next question we'll take is it's from the line of Mr. 19:51 19 minutes, 51 seconds Harshett Harshett you may unmute yourself and go ahead with your question. 20:00 20 minutes Hi uh thank you very much for the opportunity sir. 20:04 20 minutes, 4 seconds Hi sir. Uh sir uh firstly uh on the European operations uh as you have mentioned we are resizing especially in 20:12 20 minutes, 12 seconds terms of people cost reduction. uh does third quarter reflect a full impact of this also when you would have completed 20:22 20 minutes, 22 seconds all these measures maybe probably by the end of FI26 do you expect FI27 to be at break even 20:30 20 minutes, 30 seconds level or we expect to register a significant positive IIDA in FI27. 20:38 20 minutes, 38 seconds So the costs that we are currently have incurred and going to incur in the balance of the year will not carry over 20:46 20 minutes, 46 seconds to the next year Hudson. So next year we are not talking about all this is not being done to break even because break 20:54 20 minutes, 54 seconds even is something that we have already uh managed in the past. So this move is to get to a level of profitability. 21:03 21 minutes, 3 seconds Right now what will be the percentage? 21:06 21 minutes, 6 seconds This is a little too early to tell but definitely it will not be break even. 21:11 21 minutes, 11 seconds It'll be a profitable uh set of books in Europe. 21:18 21 minutes, 18 seconds Understood sir. Uh sir uh also uh uh on the US front as we have mentioned in 21:25 21 minutes, 25 seconds this third quarter we had impact of almost 1 percentage point on our IITA margins because of the tariffs. Do you 21:34 21 minutes, 34 seconds expect this 1% impact to continue in 4Q and 1Q FI27 as well or this impact would 21:42 21 minutes, 42 seconds be even higher because of the inventories that we are carrying? 21:47 21 minutes, 47 seconds It won't be higher uh Harshit but it'll progressively taper down. I don't expect 21:53 21 minutes, 53 seconds it to reduce significantly in Q4 but Q1 of next year we see that there will be a reduction because there'll be a a 22:01 22 minutes, 1 second blended inventory between the pre-tariff cost and the post tariff cost 22:09 22 minutes, 9 seconds a small followup to that uh you had last time mentioned that US geography was at break even level for the first half of 22:17 22 minutes, 17 seconds FI26 will this situation continue in the whole second half as well or we might 22:24 22 minutes, 24 seconds see some minor losses for the second half of the year. 22:29 22 minutes, 29 seconds US is profitable HIT so it's not significantly profitable but definitely profitable we expect to keep pushing 22:38 22 minutes, 38 seconds that profitability level up uh going forward. 22:43 22 minutes, 43 seconds Understood. Uh this uh lastly on the uh lowc cost screw compressors uh uh are we 22:51 22 minutes, 51 seconds on track with our go to market strategy for this range and the launch that you had planned for first quarter of FI27? 22:59 22 minutes, 59 seconds Yeah. So we are still trying to push for first quarter but looks like we will it may slip to the second quarter. Uh but 23:08 23 minutes, 8 seconds it's not a significant movement from in the thing. The products are ready. uh they are going through various stages of 23:16 23 minutes, 16 seconds validation. We have uh started looking at our distribution structures 23:22 23 minutes, 22 seconds uh the internal team to make drive this business our uh you know our pricing 23:30 23 minutes, 30 seconds strategies all of it is in you know in uh advanced stage of progress. So we are well on the way to make this happen. 23:39 23 minutes, 39 seconds Understood. Perfect. Thank you very much sir for answering my questions. I'll come back in the Thanks Ash. 23:48 23 minutes, 48 seconds Uh thank you Ash. Before we take more questions on the line sir I'll take a couple of questions from the chat which were dropped earlier. Uh sir can you 23:56 23 minutes, 56 seconds comment on the emerging Chinese competition in the domestic market and which segment is it most impacted and which segment is most impacted by this competition? 24:07 24 minutes, 7 seconds Yeah. So um the Chinese imports uh you know there are we don't know that we 24:15 24 minutes, 15 seconds lose count of the number of Indian companies that are importing uh Chinese compressors and branding it in their 24:23 24 minutes, 23 seconds names and selling every month there is a few that get enter and a few that exit. 24:30 24 minutes, 30 seconds Um so overall they they they uh have close to the Chinese imports have close 24:37 24 minutes, 37 seconds to in our estimate 25 to 30% of the market right in in volume terms not in 24:45 24 minutes, 45 seconds value. Now uh we know who the major players are. We know the geographies in which they're selling. We know the industrial sectors that they're selling. 24:57 24 minutes, 57 seconds more than specific sectors uh it is the segment behavioral segment of customers. 25:07 25 minutes, 7 seconds Now there are customers where their business and their factory operations 25:13 25 minutes, 13 seconds have very low um you know operating cycles. You know typically if you look 25:20 25 minutes, 20 seconds at a full operating cycle of a compressor is about 8,000 hours. Right now many of these customers in this 25:29 25 minutes, 29 seconds segment operate their factory thou not they may be operating their factory longer but the air demand is about,500 25:38 25 minutes, 38 seconds to 2,000 hours a year. So these kinds of customers are not really driven by the 25:46 25 minutes, 46 seconds efficiency uh the energy efficiency of the country. 25:50 25 minutes, 50 seconds So they're looking for very low upfront capital cost. So those are the segments 25:57 25 minutes, 57 seconds that are switching to these lower cost missions. Now we have our products that 26:05 26 minutes, 5 seconds we have designed are pricewise will be as competitive but we will provide LG 26:12 26 minutes, 12 seconds quality, LG reliability and LG level of service. So that will be the differentiating factor. All these 26:20 26 minutes, 20 seconds customers are known to us. They want to buy LG but the price difference is so huge it's you know you can't blame them. 26:29 26 minutes, 29 seconds So we are now giving we'll be giving them a value proposition that's very compelling. 26:39 26 minutes, 39 seconds Sir the next question in the chat is can you comment on the raw material pricing because in past 2 months metal prices have rose significantly. 26:50 26 minutes, 50 seconds So yes this is uh this is a matter of concern for us but it's it's not 26:56 26 minutes, 56 seconds uniquely LG. We are waiting to see how the market is responding. First of all, we want to know whether this is a 27:06 27 minutes, 6 seconds permanent kind of a for the next few years at least or is it just a temporary kind of a blip uh especially copper when 27:16 27 minutes, 16 seconds you look at it there are you know mine strikes in in Chile and there are some disruptions in some mines in Indonesia. 27:25 27 minutes, 25 seconds We we are evaluating this carefully but we are ready to absorb these to the extent that is required in the market. 27:35 27 minutes, 35 seconds We are willing to pass it on to the extent that the the market is uh responding to it. So I don't see it as a 27:45 27 minutes, 45 seconds uniquely LG problem. We will get over it. I'm not I'm not concerned about 27:53 27 minutes, 53 seconds uh Thank you sir. We'll move back to the call questions again. Uh the next question is from the line of Mr. Bala Subramany. Bala, your mic has been 28:02 28 minutes, 2 seconds unmuted. You may unmute yourself and go ahead with your question. 28:06 28 minutes, 6 seconds Uh good morning sir. Uh thank you so much for the opportunity. 28:09 28 minutes, 9 seconds Uh sir, our in-house production is expected to cover 75 to 80%age of volume by next financial year. And I just want 28:17 28 minutes, 17 seconds to understand uh like uh what is our next plan for inhouse uh to reach that level for airs drives and controllers. 28:26 28 minutes, 26 seconds We could share uh more details and color on our in-house uh uh initiatives. 28:33 28 minutes, 33 seconds So Bala I don't know where you got that 70 to 80%. 28:38 28 minutes, 38 seconds What we do is as a principle we project our business for 3 to 5 years and basis 28:46 28 minutes, 46 seconds that projection we invest one year in advance in our capacity right. So this 28:54 28 minutes, 54 seconds is our policy of uh uh you know capacity management. So we are well on track for 29:01 29 minutes, 1 second that. So today we have capacity for by the by the end of this financial year we 29:08 29 minutes, 8 seconds will have capacity for the for 2728 in place. So we are quite comfortable 29:15 29 minutes, 15 seconds there. Now as I had explained in the in in the earlier thing we are in the process of 29:23 29 minutes, 23 seconds shifting our facility from our city campus to our new campus that we've been building over the last 15 years. 29:31 29 minutes, 31 seconds Progressively we are moving each lines there. Now that is a 500 to 600 cr 29:38 29 minutes, 38 seconds investment that we hope to you know invest over the next five years. Now we have started the initial 29:47 29 minutes, 47 seconds phases. Two plants are being in the middle of construction. One is almost ready. It'll go into operations in 29:55 29 minutes, 55 seconds March, April. The second one will go into operation in during the next financial year. Now these are ongoing things that we do. 30:06 30 minutes, 6 seconds In addition, our on regular annual capex is roughly in the neighborhood of about 30:14 30 minutes, 14 seconds 50 crores. That takes care of the what I talked about that investment in capacity 30:20 30 minutes, 20 seconds one year in advance. But large capex will come when we run out of building space. I mean that is something that we 30:29 30 minutes, 29 seconds can't manage. And what we are doing today over the next five to six years is 30:35 30 minutes, 35 seconds to build that you know building capacity and we are well on the way. 30:42 30 minutes, 42 seconds Okay sir. Sir my next question uh after markets nearly contributes 30%age of revenue in India but only 12% in your 30:51 30 minutes, 51 seconds markets. So like what is the current installed base size and growth rate in the US and Europe and in Europe we are 31:00 31 minutes implementing hybrid strategy. So how it will benefit especially in the aftermarket side. 31:08 31 minutes, 8 seconds So Bala I don't want to give details of our number of machines that we have installed in Europe and America. After 31:16 31 minutes, 16 seconds market as a percentage of revenue is a function of building your installed 31:23 31 minutes, 23 seconds base. As every year you will be adding to the install base. As a consequence 31:30 31 minutes, 30 seconds your aftermarket as a percentage of revenue keeps increasing the year after that. So this is something uh that will 31:38 31 minutes, 38 seconds happen. We are very confident. We have seen the trend in uh Europe and America as we have been increasing our installed 31:47 31 minutes, 47 seconds base. Our aftermarket percentages have also gone. So this is a matter of maturing out in the market. So we are well on track for that. Now hybrid 31:56 31 minutes, 56 seconds strategy is more on the sales of the machines rather than aftermarket. We will still get the benefit of 32:04 32 minutes, 4 seconds aftermarket irrespective of how we get that installed basin in in place. 32:13 32 minutes, 13 seconds Thank you sir. 32:19 32 minutes, 19 seconds Thank you brother. The next question the next question we have is from line of Mr. Sil. Sal you may unmute yourself and go ahead with your question. 32:29 32 minutes, 29 seconds Thanks Kamesh. Uh good morning Dr. Jam. 32:31 32 minutes, 31 seconds Uh so I have some questions on on the US uh business. First of all, if you know our current inventory uh say is kind of 32:41 32 minutes, 41 seconds bleeding out by Q2 of next year. Uh so we have four to six months of inventory. 32:47 32 minutes, 47 seconds Is this a normal level or you know did you kind of build up something? I mean how does this work? 32:53 32 minutes, 53 seconds So like I said in the uh while I was talking about the cash position in the company, one of our defects that we have 33:02 33 minutes, 2 seconds is excess inventory, right? And the root cause of it is you know sales people always have a optimistic view of the 33:11 33 minutes, 11 seconds future. When the future becomes present then they become very pessimistic. So our planning system so far has been you 33:20 33 minutes, 20 seconds know believing what the salespeople want and we replenish basis. Yeah. M now we 33:28 33 minutes, 28 seconds have started a new program of define designing a system for uh inventory 33:35 33 minutes, 35 seconds planning for the various uh subsidiaries which is in the final stages of 33:42 33 minutes, 42 seconds validation. We implemented it in August September last year. It's in the final stages of implementation. So I'm hoping 33:51 33 minutes, 51 seconds to see better control over finished goods. So to answer your question, 6 months is excessive inventory, right? 34:00 34 minutes when you have a lead time of uh you know shipment lead time of about you know 2 34:07 34 minutes, 7 seconds and a half months you're really your inventory should be only about three three and a half months right so that's 34:14 34 minutes, 14 seconds really where we are headed understood right uh continuing on the US business now the distribution part of it 34:22 34 minutes, 22 seconds is where you mentioned that there are certain challenges right so when you're trying to fix it what would it be and would you kind of revisit this 34:30 34 minutes, 30 seconds partnership uh you know the the JV kind of structure that you had with some distributors in some areas. 34:37 34 minutes, 37 seconds No, this is nothing to do with our JVS Salil. This is what I mean by distribution operations is patterns and Michigan Air which is two distributors that we own. 34:48 34 minutes, 48 seconds Yeah. Right. 34:49 34 minutes, 49 seconds Now we this is a in effect this is a direct sales right because we own the distributor and we are selling directly 34:58 34 minutes, 58 seconds to the customer. Yeah. So, can you hear me? Yes. Yes. Yes. 35:04 35 minutes, 4 seconds Yeah. So, that is where we are trying to reorganize ourselves to get that kind of a growth for the potential that exists in the markets that we are presenting. 35:15 35 minutes, 15 seconds Yeah. 35:16 35 minutes, 16 seconds Okay. All right. And lastly sir you know given now that there is you know hopefully tariff advantage for India in 35:23 35 minutes, 23 seconds general uh what are the chances that you know demand kind of uh you know grows exponentially for uh for you or for 35:32 35 minutes, 32 seconds India make compressors and if that happens then are you ready in the sense that whatever the initiatives you're doing are they sufficient something else 35:39 35 minutes, 39 seconds that you need to cater to that so um you know in a BtoB kind of 35:46 35 minutes, 46 seconds business sal especially capital goods uh it doesn't behave to price elasticity 35:53 35 minutes, 53 seconds you know you lower the price it doesn't mean you will double your revenue right um so the idea is to 36:03 36 minutes, 3 seconds you know when you go when you're talking about capital goods in a B2B space it's about getting in front of the customer 36:12 36 minutes, 12 seconds through various means whether it's through direct means or through channel or whether it is digital platforms. So 36:20 36 minutes, 20 seconds those are the things that we have to get in. Now when we get in front of the customers, our win rates are very good. 36:29 36 minutes, 29 seconds Yeah. 36:30 36 minutes, 30 seconds So the challenge for LG is to get in front of the customer more often. Now this pricing or the cost advantage that 36:38 36 minutes, 38 seconds we have now got by virtue of whatever we have done internally is going to give us that degree some degree of freedom in 36:47 36 minutes, 47 seconds terms of running schemes wherever there is a you know there is a dual multi-brand distributor who's carrying 36:55 36 minutes, 55 seconds our brand as well as other brands maybe through this we'll get a better share of the wallet but I don't see the the cost 37:04 37 minutes, 4 seconds becoming a you know it's behaving in a very elastic manner sales behaving in an elastic. 37:12 37 minutes, 12 seconds Yeah. So it's more of market share gains possible rather than uh absolutely understood. Thank you very much sir and all the very best. 37:19 37 minutes, 19 seconds Thank you. 37:23 37 minutes, 23 seconds Uh sir I'll take one question from the chat now. Um is so there's a question is 37:29 37 minutes, 29 seconds LG venturing into defense OEM and no we are not getting into our 37:36 37 minutes, 36 seconds defense business we have a joint venture which is LG sour um that has a large um 37:45 37 minutes, 45 seconds defense component these are high-pressure compressors that are supplied for battleships, submarines, 37:52 37 minutes, 52 seconds aircraft carriers. Uh so that's a segment of business but that's sitting in our joint venture where our holding 38:00 38 minutes is about 26%. So other than that we are really not looking at getting into specifically 38:09 38 minutes, 9 seconds uh defense but wherever there are compressor opportunities in the area of defense we are certainly exploring that 38:16 38 minutes, 16 seconds but that's not something that's being done. 38:22 38 minutes, 22 seconds Uh so next question I'll take it from the line of Mr. Vinod Benod Shastri. 38:28 38 minutes, 28 seconds Vinod you may unmute yourself and go ahead with your question. Uh good morning sir. Morning. 38:35 38 minutes, 35 seconds Uh congratulations on achieving a th00and cr of uh revenue for the first time. Sir I will have two questions. uh 38:45 38 minutes, 45 seconds for the last three to four quarters uh in your opening remarks you have said that uh the AITA should have been as 38:52 38 minutes, 52 seconds much higher and it is primarily because of two three reason it has come down and one reason uh that keeps popping up is 39:00 39 minutes the employee cost. So how long this is going to continue whether it will consolidate in the near term or is this 39:08 39 minutes, 8 seconds an ongoing process which will go on for some time. Yeah. So it's a good question uh Vod. 39:15 39 minutes, 15 seconds I'm glad that you brought it up because I was that was an area that I wanted to address as part of my overall opening remark. Um you know a year and a half 39:24 39 minutes, 24 seconds ago I talked about uh investing in initiatives to bring better process in 39:32 39 minutes, 32 seconds in finance uh you know control on financial processes across the world bring certain standardization. 39:42 39 minutes, 42 seconds uh we talked about investing into the IT and digital infrastructure that was required to make the organization not 39:51 39 minutes, 51 seconds only efficient but also effective in terms of executing its strategies. So 39:57 39 minutes, 57 seconds this cuts across all functions. Now the there are two types of costs that are involved in these initiatives. One is 40:06 40 minutes, 6 seconds the new type of talent that we need to bring in to implement and execute these 40:14 40 minutes, 14 seconds initiatives and the second is the kind of advisory and software costs that are 40:20 40 minutes, 20 seconds going to come in. Now what we anticipate is for the next at least a couple of 40:28 40 minutes, 28 seconds years we will have this 2% of investment going into these but I expect that in 40:36 40 minutes, 36 seconds about a year and a half to two years you will start seeing 50% of it going away 40:43 40 minutes, 43 seconds right and what is that 50% obviously it's not going to be people cost we will not be adding to the people cost but 40:51 40 minutes, 51 seconds other cost like the advisory costs and the one-time software development costs that we are involved those will go away. 41:00 41 minutes So I expect in a steady state basis we'll be able to absorb this through our growth. Uh but for the next couple of years you will see the effect of this. 41:12 41 minutes, 12 seconds Okay sir. uh uh and a follow-up question from the last uh participant. uh uh there has been an inventory of uh 6 41:20 41 minutes, 20 seconds months that is being told and that was due to the optimistic view of your sales team and now we are sitting at an 18% and on 41:29 41 minutes, 29 seconds a hindsight thinking that this 18% is going to continue going forward since we have a inventory for 6 months of time 41:38 41 minutes, 38 seconds already will there be any dent in the revenue where we will not be able to realize the entire uh reduction from the 41:45 41 minutes, 45 seconds 50 to No, I couldn't understand your question. 41:51 41 minutes, 51 seconds Are you are you is your suggestion will we run out of inventory to fund our sales? Is that your question? 41:58 41 minutes, 58 seconds No sir. uh there is an inventory for the next 6 months and there the tariff has already come down to 18 and assuming 42:05 42 minutes, 5 seconds that we sit at this 18%age going forward for the next two quarters that is Q4 and Q1 of the next year will there be a re 42:14 42 minutes, 14 seconds dent in the revenue because of these all these inventories no why why would there be a dent in in 42:23 42 minutes, 23 seconds revenue at all uh because the cost should have been higher uh so uh that is 42:31 42 minutes, 31 seconds we have planned for sorry go ahead uh we we have planned for a 50% of uh this tariff and we have done according 42:40 42 minutes, 40 seconds to that and next two quarters assuming that we don't have such a high kind of thing. So that is why this question has come up. 42:48 42 minutes, 48 seconds So you know that the inventory that is sitting is based on a 50% tariff. costed at that level, right? And our selling 42:57 42 minutes, 57 seconds prices have been fixed. We fixed we increased our selling prices in the second quarter 43:04 43 minutes, 4 seconds in response to this tariff and the selling prices are not have not been reduced now uh in respond to the 43:11 43 minutes, 11 seconds reduction in the tariff. Right? So we will not have any dislocation to to the business just because we have more 43:21 43 minutes, 21 seconds expensive inventory that is sitting there. We will bleed out that inventory. 43:25 43 minutes, 25 seconds Then we will look at either re retaining some the margin fully or passing it on 43:32 43 minutes, 32 seconds to build our share of the market. Those are all the specific tactical moves that we need to look at. 43:40 43 minutes, 40 seconds Thank you sir. One final question would be will you be okay to share the market share of LG uh at the domestic sir 43:49 43 minutes, 49 seconds I I don't like to talk about it because this is something is extremely sensitive to competitive thing but we are number 43:57 43 minutes, 57 seconds two in the country right uh that much I can tell you with confidence but I wouldn't like to go into percentages I 44:06 44 minutes, 6 seconds hope you understand thank you thank you very much sir and all the best sir Yeah, thank you. 44:14 44 minutes, 14 seconds Uh, thank you Vinol. So, next question we'll take it from the line of Mr. Amit Anwani. Amit, you may unmute yourself and go ahead with your question. 44:27 44 minutes, 27 seconds Hi, am I audible? You are auding. 44:34 44 minutes, 34 seconds Uh so my first question uh uh is on domestic business. 44:40 44 minutes, 40 seconds So there's been some announcement also in the budget about bioparma and sis st we're saying reduced uh there should be 44:48 44 minutes, 48 seconds some uh respite for the textile sector also wanted to understand your view and overall domestic market uh post also 44:58 44 minutes, 58 seconds there the GST reduction there's been talks that there would be some revival with the new industries wanted to understand your sense in terms of 45:07 45 minutes, 7 seconds domestic markets ste growth And which are the sectors which might have seen uh uh good growth for you and 45:16 45 minutes, 16 seconds sectors where still growth is very like uh so the let me first give you a sense 45:24 45 minutes, 24 seconds for what are the sectors that have grown. I think um the sectors 45:31 45 minutes, 31 seconds contributing to infrastructure like cement and steel and have have 45:38 45 minutes, 38 seconds definitely had challenges. Uh but textile obviously for the reason of 45:45 45 minutes, 45 seconds tariff had some challenges but otherwise the sectoral growth has been across all 45:53 45 minutes, 53 seconds industrial sectors. Now in respect to the new budget where they've given concessions to you know I mean or 46:02 46 minutes, 2 seconds strategic uh initiatives on on bio biofarma kind of a thing. We are present 46:10 46 minutes, 10 seconds in that segment. Uh we have some extremely compelling products for that segment and we are we will continue to 46:19 46 minutes, 19 seconds do that. But do I see it exploding in terms of uh revenue? No, I don't see 46:27 46 minutes, 27 seconds that happening. No. Um did I answer all your questions? I mean, 46:33 46 minutes, 33 seconds yes. So, what's the kind of overall steady state growth we should be? 46:39 46 minutes, 39 seconds So, I think India will be low double digit is something that we are reasonably confident of, right? But you 46:48 46 minutes, 48 seconds know I don't want to put a stake in the ground because there are so many uncertaintities that are there that could affect India's performance. India 46:58 46 minutes, 58 seconds by itself if it is if the rest of the world doesn't uh mess around with you know these kinds of tariff issues and 47:06 47 minutes, 6 seconds you know wars and and conflicts if those things don't exist I think exist I think 47:12 47 minutes, 12 seconds India will do for us low double digit but uh if those things come in they disrupt so it's a little difficult to 47:21 47 minutes, 21 seconds predict that Sure. 47:27 47 minutes, 27 seconds So secondly on uh Europe so I think last time also you did highlighted resize the European business and there was a break 47:35 47 minutes, 35 seconds even target uh and you did also highlighted uh getting exported to US from Europe. 47:42 47 minutes, 42 seconds So now that situation is slightly better uh what is uh yeah 47:49 47 minutes, 49 seconds so what is your thought now on on European break even and uh uh uh is it 47:58 47 minutes, 58 seconds still kind of challenging for you to achieve what you're thinking on Europe for maybe one or two years 48:06 48 minutes, 6 seconds so you know when I explained the P&L one of the cost in employee cost is the 48:13 48 minutes, 13 seconds reorganization of reorganization costs in Europe. Uh we are taking cost out. Uh 48:19 48 minutes, 19 seconds you will see the impact of that in hitting our P&L. It has hit Q3. It'll also some of it will hit in Q4 48:29 48 minutes, 29 seconds but it will not carry over into the next year. Next year our cost structures in Europe will be a lot lower than what 48:38 48 minutes, 38 seconds they have been this year. So our goal is not break even. Our goal is to get to profitability. Right? We have crossed 48:46 48 minutes, 46 seconds the milestone of break even. Now we are saying that for a current strategy for the current level of market the cost 48:55 48 minutes, 55 seconds structure that we should have is lot lower than what we have today which was built for a far higher level of revenue. 49:05 49 minutes, 5 seconds That revenue is not materializing for whatever reason. It's not because our products are bad. It's not because our presence are bad. It is just that you 49:14 49 minutes, 14 seconds know the economic conditions and you know the problems in Europe are such that we are not able to move the needle 49:21 49 minutes, 21 seconds to the level that is required for the cost that we have incurred. So we are now moderating our cost and once we 49:28 49 minutes, 28 seconds moderate our cost to the level of revenue that we are confident that we we will make a profit. So that we are confident of next year. Sure. 49:41 49 minutes, 41 seconds Thank you. Thank you so much. 49:44 49 minutes, 44 seconds Thank you. Uh sir, next question we'll take is from the line of Mr. Prabhakar. 49:49 49 minutes, 49 seconds Prabhaka, you may unmute yourself and go ahead with your question Prabhakar, are you there? 50:05 50 minutes, 5 seconds I think we're facing some problem with this line. 50:07 50 minutes, 7 seconds Yeah. uh probably I'll take a couple of questions from the chat and then I'll move back to Ravi. Uh sir, the first question is what is the average price 50:16 50 minutes, 16 seconds difference between our proposed lowcost range versus our normal range of compressors? 50:24 50 minutes, 24 seconds Oh uh that's a tough one to uh to be very specific about but I will give you a range. Um 50:32 50 minutes, 32 seconds so if our current compressor is selling at a at 100 50:40 50 minutes, 40 seconds uh these machines are sold at probably around 60 or 70 right so I would say somewhere 50:49 50 minutes, 49 seconds between 30 to 40% lower right uh so that's really the the gap 51:00 51 minutes The next question in the chat is sir is there any further investment in motor manufacturing? 51:07 51 minutes, 7 seconds Absolutely. I mean if you look at one of the largest contributors uh to our ability to withstand the the 51:15 51 minutes, 15 seconds um withstand the tariff impact has been insourcing our own motors right which 51:23 51 minutes, 23 seconds was a project that we started four years ago. We didn't do it in response to the tariff but it timing wise it became very 51:30 51 minutes, 30 seconds opportunistic for I mean very uh uh favorable for us. Now we are looking at pushing the motor technology to the next 51:39 51 minutes, 39 seconds level. Uh we are looking at various types of technologies. One is reducing the dependence on China or or reducing 51:48 51 minutes, 48 seconds the dependence on permanent magnets. So we have come up with a design of motors which don't use permanent magnet but 51:56 51 minutes, 56 seconds will be at the same level of efficiency of permanent. See we make permanent magnet motors today uh in our factory 52:04 52 minutes, 4 seconds and when China put the restriction on export of permanent magnets it was a huge uh eyeopener for us that we are 52:12 52 minutes, 12 seconds sitting on a risky situation and we did lose about two weeks of production because we had to scramble to do a 52:21 52 minutes, 21 seconds redesign of the motors to be able to use different kinds of magnets which were not part of the restricted list of 52:29 52 minutes, 29 seconds permanent magnet so or restricted list list of RA so that was a stressful 52:36 52 minutes, 36 seconds period that we went through and the learning from that has been we can't have a dependency on permanent magnets so we have now designed a motor which 52:46 52 minutes, 46 seconds will which doesn't use permanent magnets but gives you gives us the same efficiency now we going to invest in expanding the production of that right 52:55 52 minutes, 55 seconds so similarly I don't want to talk too much about it we have come up with a completely new motor technology which is 53:03 53 minutes, 3 seconds going to give us a huge cost benefit. So that's something that we will also once we have done the proof of concept and 53:11 53 minutes, 11 seconds validation which we hope in the next 6 to 8 months we will complete it. That would be another area that we will be so 53:19 53 minutes, 19 seconds motor technology is a strategic pillar for us and therefore we will invest 53:30 53 minutes, 30 seconds Thank you sir. Uh I'll take the next question from the line of Ravi. Ravi you may unmute yourself and go ahead with your question. 53:38 53 minutes, 38 seconds Uh hi sir. One follow-up question. Uh this is regarding the raw material price increase that has happened recently especially copper. Uh how much amount of 53:47 53 minutes, 47 seconds price increase we might have taken in the past few months related to the raw material price increase? How much more 53:54 53 minutes, 54 seconds we need to take? uh and uh I mean given the fact that demand is quite robust uh 54:01 54 minutes, 1 second especially in India uh uh I mean is there any reluctance or hesitance in terms of passing on prices or we are 54:09 54 minutes, 9 seconds going to do it uh quite soon in the next one two months so we've already started this process ra I mean you know raw material whether 54:18 54 minutes, 18 seconds it's copper or aluminium or uh hot and cold roll steel it's affecting all all uh companies not just in compressors but 54:27 54 minutes, 27 seconds anybody doing mechanical machines capital good they use these material so this work is is an ongoing thing so I 54:35 54 minutes, 35 seconds wouldn't be you know I'm not seeing the kind of uh inflection in prices that happened postco where every week there 54:45 54 minutes, 45 seconds was an increase of 5 to 10% in in commodity metal commodity prices we are not seeing that so we are taking it we 54:54 54 minutes, 54 seconds are not escalating getting it to a crisis level. It is increases costs have gone up. We responding to that, right? 55:02 55 minutes, 2 seconds Wherever it is possible, we are increasing. Wherever it's not possible, we're looking at reducing cost. So, it's 55:09 55 minutes, 9 seconds not a percentage that um you know, it is not a percentage that is out of you know, a stratosphere that we can't handle at as an operational response. 55:20 55 minutes, 20 seconds Yeah. Got it. Yeah. Thanks a lot. 55:27 55 minutes, 27 seconds So there's one question in the chat. So do do you see any use case emerging in the space you are operating which can 55:36 55 minutes, 36 seconds become a mega opportunity for LG like green hydrogen, nuclear power, data center, HVAC, EV complex power grids, electrolyers etc. 55:47 55 minutes, 47 seconds So we are not you know we we don't have we are not getting into compression of hydrogen. Uh it's a completely it's do we have the knowledge? Of course we do. 55:58 55 minutes, 58 seconds Do we want to get into it? No not yet because we are not sure about the hydro efficacy of the hydrogen economy. We'd 56:07 56 minutes, 7 seconds like to understand a little bit more uh in terms of how um how the efficacy uh 56:16 56 minutes, 16 seconds is and then we will take the call. But are we going to get into the business of electrolyers or uh or no we're not 56:26 56 minutes, 26 seconds getting getting directly into it. But wherever compressed air is required for there there are opportunities in 56:35 56 minutes, 35 seconds electrolyers in the process of producing hydrogen if pressures are increased in the interchange there are some 56:43 56 minutes, 43 seconds efficiencies. So those kinds of things we will explore but directly not. So this is from Rahul I'm understanding correct. 56:51 56 minutes, 51 seconds Yeah. Yes. So Rahul, thank you for your compliment on using our compressors in your family business since '90s. Thank you very much. Good to hear that. Yeah. 57:03 57 minutes, 3 seconds Yes sir. So that is what I see sir. I will hand over the mic to Kami for his questions. 57:10 57 minutes, 10 seconds Yeah. Uh so sir I have just two last points. If you want to touch upon the stabilizer technology or the vacuum products launched. 57:19 57 minutes, 19 seconds Correct. No thanks. Thanks uh Kamalesh for bringing it up. Uh the stabilizer as you as you know it's called demand match. That's our brand for stabilizer. 57:29 57 minutes, 29 seconds We don't call it stabilizer anymore. Uh we launched it in the market in last October. We have close to uh 150 57:39 57 minutes, 39 seconds machines in the field. Uh the response from customers has been just outstanding. Right. So the efficiency 57:48 57 minutes, 48 seconds uh energy efficiency has been anywhere from 6 to 17%. 57:54 57 minutes, 54 seconds Uh that's been the gain. Besides the gain in the efficiency, the reliability of the product that the customers are so 58:03 58 minutes, 3 seconds happy about because the machine doesn't cycle between cutting in and cutting out treasures. So it's been a huge thing but 58:12 58 minutes, 12 seconds still early days because the message still hasn't gone. Our competitors know about it but they are sitting and 58:21 58 minutes, 21 seconds watching what's going on. We have taken the message to our customers today in India all our machines have standard 58:31 58 minutes, 31 seconds fitment of demand match customers are we talking to them. So it's very positive 58:38 58 minutes, 38 seconds four five months uh kamlesh and we are very optimistic about it. So that's and we are able to get realize better 58:47 58 minutes, 47 seconds prices. So that's another positive thing with with the demand margin. So that's on demand margin vacuum is ahead of our 58:56 58 minutes, 56 seconds budget. Uh so I don't want to give numbers in terms we are growing more than what we plan to grow. We are in the 59:05 59 minutes, 5 seconds middle of reconstructing our plans for the next 9 to 10 years on vacuum. What where do we want to play? 59:14 59 minutes, 14 seconds How are we going to play and what is it that we need to do to win in this segment? So overall I think we are in 59:22 59 minutes, 22 seconds the right track as far as so just you can elaborate which segments and markets you find more application of 59:29 59 minutes, 29 seconds vacuum products any specific sectors you want to highlight? uh you know there are multiple medical hospital sectors is one 59:39 59 minutes, 39 seconds area where there is a vacuum requirement. Uh furniture manufacturing is another area. Uh chemical process is 59:48 59 minutes, 48 seconds another area. So the overlap between compressor and vacuum is probably around 59:55 59 minutes, 55 seconds 30 to 40%. Right? uh there is an overlap but it's not 100 but the there is a 1:00:02 1 hour, 2 seconds distinct difference between vacuum and compressor. Uh vacuums are the the 1:00:09 1 hour, 9 seconds products that we are involved in are relatively low value compared to a compressor. Right? So if you take a 1:00:17 1 hour, 17 seconds customer using let's say 22 kW compressor a vacuum they may use maybe 3 1:00:24 1 hour, 24 seconds kow. Right? So it's it's scale wise much smaller right but in terms of dependency 1:00:31 1 hour, 31 seconds as a utility it's still very high right so yeah this semiconductor as an area of opportunity for us for those products 1:00:40 1 hour, 40 seconds yes but semiconductors use a lot of vacuum but they are different technology of vacuum that we are not currently 1:00:48 1 hour, 48 seconds involved in those are very ultra high vacuum that is used we are not in the we 1:00:55 1 hour, 55 seconds We are more in the rough and medium uh vacuum not in the ultra high vacuum. 1:01:01 1 hour, 1 minute, 1 second Okay. All right. Great. Uh uh participant just to mention the company is also hosting their annual analyst 1:01:08 1 hour, 1 minute, 8 seconds meet this time in Mumbai next week on February 26th. You may get in touch with MSC team or the IR team at LG for further details on that. Yeah. 1:01:18 1 hour, 1 minute, 18 seconds Thank you. So with that we conclude the webinar. 1:01:21 1 hour, 1 minute, 21 seconds Sir any closing remarks you want to make? No, I think uh Kamish thank you as always for for your support and M6 1:01:29 1 hour, 1 minute, 29 seconds support for hosting this and it's been a good conversation with everyone. Thank you for your your patience and your involvement. Thank you everyone. 1:01:41 1 hour, 1 minute, 41 seconds Thanks sir. Bye. Thank you participants. 1:01:44 1 hour, 1 minute, 44 seconds With that we conclude the call. Have a good day. Thank you.