Gala Precision Engineering Limited — Q3 FY26

Gala Precision Engineering Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=1FltIHKszSA Published: 3 months ago

0:01 1 second Ladies and gentlemen, good day and welcome to the Gala Precision Engineering Limited Q3 and 9M FY26 0:08 8 seconds earnings conference call hosted by Valorm Advisors. As a reminder, all participant lines will be in listenonly 0:16 16 seconds mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need 0:23 23 seconds assistance during this conference call, please signal an operator by pressing star then zero on your touchstone phone. 0:31 31 seconds Please note that this conference is being recorded. I now hand the conference over to Miss Hinak Khatri from Valerim Advisor. Thank you and over to you ma'am. 0:42 42 seconds Thank you. Uh good evening everyone and a warm welcome to you all. My name is Hina Khatri from Valerim Advisers. We represent the investor relations of Gala 0:50 50 seconds Precision Engineering Limited. On behalf of the company and Valerim Advisers, I would like to thank you all for participating in the company's earnings 0:58 58 seconds call for third quarter and 9 months ended of financial year 2026. Before we begin, let me mention a short cautionary 1:06 1 minute, 6 seconds statement. Some of the statements made in today's earnings call may be forward-looking in nature. Such forward-looking statements are subject 1:13 1 minute, 13 seconds to risk and uncertaintities which could cause actual results to differ from those anticipated. Such statements are made on management's belief as well as 1:21 1 minute, 21 seconds assumptions made by the information currently available to management. 1:25 1 minute, 25 seconds Audiences are cautioned not to place any undue reliance on this forward-looking statements in making any investment decisions. The purpose of today's 1:33 1 minute, 33 seconds earnings call is purely to educate and bring awareness about the company's fundamental business and the financial quarter under review. Let me now 1:40 1 minute, 40 seconds introduce you to the management participating with us in today's earnings call and hand it over to them for opening remarks. We firstly have 1:48 1 minute, 48 seconds with us Mr. Balgish Jalan whole time director, Mr. Satish Kotwani, whole time director and Mr. Shini Vasin Geredar, 1:55 1 minute, 55 seconds Chief Financial Officer. Without any further delay, I request Mr. Baleshan Jalan to start with his opening remarks. 2:02 2 minutes, 2 seconds Thank you and over to you sir. 2:04 2 minutes, 4 seconds Yeah. Uh thank you Hina. Good evening everyone and welcome to our earning call to discuss the performance of the third quarter and 9 months of the financial year 2026. 2:15 2 minutes, 15 seconds In the interest of the people who are new to the company, let me first give brief overview of the company. Kala precision is a preferred manufacturer of 2:24 2 minutes, 24 seconds the high precision quality component. We serve various sectors like renewable energy, industrial and mobility. 2:32 2 minutes, 32 seconds Geographically we are diversified across sale in India, Europe and USA. We supply 2:39 2 minutes, 39 seconds to OEM, Taiwan and channel partners. We manufacture customized product of over 2:46 2 minutes, 46 seconds 750 SKU to serve almost 175 active global customers across 25 countries. 2:52 2 minutes, 52 seconds Our facilities are fully equipped with advanced technology and integrated capabilities for designing, developing and manufacturing a diverse product 3:00 3 minutes portfolio. To further strengthen our manufacturing footprint and expand the product range, we establish a new facility in Chennai. The plant will 3:09 3 minutes, 9 seconds focus on products producing various high tensile fastener including bones. These are mainly complementing the existing 3:16 3 minutes, 16 seconds products and enhance our ability to meet customer demand for revenue mix prospective uh for the 9 3:24 3 minutes, 24 seconds month period. DSS account for approximately 48% of revenue providing a stable base of recurring volume. SFS 3:33 3 minutes, 33 seconds contributed around 35% reflecting strong growth momentum and increasing customer adoption 3:40 3 minutes, 40 seconds while CSS represent about 17% supported by steady demand across industrial and renewable energy applications. The SFS 3:48 3 minutes, 48 seconds DV segment continue to be grow key growth driver during the period. to strong section across customers and 3:55 3 minutes, 55 seconds programs. Over the 9 month, segment revenue grew 108 percentage year on year while the third quarter revenue 4:02 4 minutes, 2 seconds increased 149% yearonear reflecting sustained demand momentum and improving capacity utilization. 4:10 4 minutes, 10 seconds Our operation at the Chennai facility progressed well during the quarter with volume scaling up across approved customer program. The plant generated 4:18 4 minutes, 18 seconds approximately 11 cr of revenue. in the third quarter making steady progress in building scale at the new facility. 4:26 4 minutes, 26 seconds During the period we conclude prize agreement with four leading wind turbine OEM for new bold product to be 4:33 4 minutes, 33 seconds manufactured at our Chennai facility strengthening our position in the renewable energy supply chain. We also expanded into new industry segments such 4:42 4 minutes, 42 seconds as eco uh equalizer and sector implements of fasteners while continuing scale up or glock business further 4:50 4 minutes, 50 seconds diversifying over revenue base. The other segment despite being the niche product category delivered a strong performance with the sales growing 37% 4:58 4 minutes, 58 seconds yearon year in quarter. The growth was primarily driven by the higher export fraction with export increasing their 5:06 5 minutes, 6 seconds contribution from 44% to 51% of GSS revenue. Further, we continue to take 5:12 5 minutes, 12 seconds focus steps toward cost optimization and sustainability. We have initiated development of 1.8 megawatt solar power 5:20 5 minutes, 20 seconds plant under the open assess model for capital consumption. The project aligned with our ongoing efforts to reduce power 5:28 5 minutes, 28 seconds cost and move toward the carbon neutral power consumption. A total capex for the project estimated approximately 6.2 cr 5:35 5 minutes, 35 seconds including one-time strategy approval. We already issued purchase order to the EQC contractor and appointed technical consultant for overall project support 5:43 5 minutes, 43 seconds and review. The project is expected to be completed within 6 months subject to the necessary government approvals and will be funded through bank borrowing. 5:52 5 minutes, 52 seconds In addition, we will be migrating to SAP HANA uh in financial year 2027. We have finalized five-year license agreement 6:00 6 minutes with SAP India and plan to commence implementation by quarter 1 of the financial year 27 with the targeted to 6:07 6 minutes, 7 seconds go live in early quarter or quarter 3 of the financial year 27. We committed a 5-year subscription agreement with a 6:15 6 minutes, 15 seconds total fees of 3.48 cr payable over a five year with the escalating annual payments. We are currently in the 6:22 6 minutes, 22 seconds process of evaluating financing implementing partner. This upgrade is expected to strengthen our core system to improve operational efficiency and 6:30 6 minutes, 30 seconds enhance scalability to support the future growth. Overall we are pleased with the strong operational momentum and steady execution of our strategic 6:38 6 minutes, 38 seconds priorities around the innovations customer diversion and ongoing investment in facility. With that I will 6:45 6 minutes, 45 seconds now hand over to our chief executive financial officer Mr. Ga who will take you through the financial highlights for the period under review. Thank you. 6:55 6 minutes, 55 seconds Yeah. 6:57 6 minutes, 57 seconds Good evening everyone and welcome to the audience for today. Let me provide a brief financial performance for the 7:05 7 minutes, 5 seconds third quarter and 9 months ended for financial year 2026. 7:09 7 minutes, 9 seconds For the quarter under review consolidated revenue from operations stood at around 85 crores reflecting the 47% yearon-year increase. 7:19 7 minutes, 19 seconds VITA for the quarter stood at around 15 growth marking a 90% uh yearon-year increase margins 7:28 7 minutes, 28 seconds to 13.12% including by 387 basis points supported by favorable exchange gains are reduction in personal cost as the 7:37 7 minutes, 37 seconds percentage of sales net profit stood at 10 or 8 crores representing a 57% year on year lo margins at 9.73%. 7:47 7 minutes, 47 seconds For the nine months of financial year uh 2026, revenue from operation stood at 220 crores, reflecting a healthy 35% 7:56 7 minutes, 56 seconds yearon-year growth. AITA for the period 35 crores reflecting a 37% yearon-year 8:03 8 minutes, 3 seconds increase. AITA margins were at 2.07% declining by 110 basis points during the period. Net profit for the period stood 8:11 8 minutes, 11 seconds at 23 cringing a 38% year-on-year increase in fat margin at 10.56%. 8:17 8 minutes, 17 seconds During the period, profitability was impacted by certain onetime exception items including the provision of approximately 9.4 million related to the 8:25 8 minutes, 25 seconds notification of the new labor code as well as the reversion of approximately 7 million of export revenues under the remission of duties and taxes on 8:33 8 minutes, 33 seconds exported product scheme. With this we can now open the floor for Q&A session. Thank you. Thank you. 8:40 8 minutes, 40 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press 8:47 8 minutes, 47 seconds star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are 8:56 8 minutes, 56 seconds requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. 9:13 9 minutes, 13 seconds The first question is from the line of Hal from Shatran Jaya Investments Managers. Please go ahead. 9:20 9 minutes, 20 seconds Yeah. Hello. Hello. Yeah. Hello. Please go ahead. 9:26 9 minutes, 26 seconds Yeah. Good evening, sir. Am I clearly audible? Yes. Yes, ma'am. 9:31 9 minutes, 31 seconds Yeah, sir. I wanted to know that in the current results I could see that the AIDA is expanded but the P&L is flat. So what is the reason behind that? 9:41 9 minutes, 41 seconds Uh the reason madam is this in this quarter that we had there was a one time 9:48 9 minutes, 48 seconds hit on account of uh retirement benefits due to the new labor code which is 94 lakh. Apart from that there is also a 9:57 9 minutes, 57 seconds reversal of uh 17 lakhs of the growth income uh that also impacted the profit. 10:05 10 minutes, 5 seconds So overall impact in the property was 1.64 crores which is the reason the profit remained flat in this quarter compared to previous quarter. 10:15 10 minutes, 15 seconds Okay. And are you expecting that the margins will be sustainable in the further quarters and the year end? that it will margin will be stable around 70 to 90% in the coming quarters also. 10:28 10 minutes, 28 seconds All right. All right. Thank you. 10:35 10 minutes, 35 seconds Thank you. Participants who wish to ask a question may press star and one on the touchstone telephone. The next question 10:44 10 minutes, 44 seconds is from the line of Dimit Mahita an individual investor. Please go ahead. 10:51 10 minutes, 51 seconds Uh good evening sir. Uh so uh I have two questions. So the first question is uh so the SFS reported a very strong 10:59 10 minutes, 59 seconds yearon-year growth this quarter. So is this largely driven by an increased business with the existing OEMs or uh is there any new customer items? 11:10 11 minutes, 10 seconds Yeah. So I think uh for SFS basically it is driven by both. So with existing customer we are adding and increasing 11:18 11 minutes, 18 seconds the wallet share of products which we have been already supplying and also we are getting new products from these 11:25 11 minutes, 25 seconds existing customers and parallelly because of our continuous business development efforts in India and in the global market we are adding new 11:33 11 minutes, 33 seconds customers. So this is combination of all the factors combining this high growth. 11:40 11 minutes, 40 seconds Uh okay sir and uh like uh the second question is uh like why has the finance cost increased in this quarter and what 11:48 11 minutes, 48 seconds are the current debt levels as of for the company? 11:53 11 minutes, 53 seconds Yeah, I'll answer that. Um 12:08 12 minutes, 8 seconds final cost increase may due to increased use of working capital facilities to improve growth in revenue in this uh in 12:15 12 minutes, 15 seconds this and the current depth level is around 4572 crores. 12:23 12 minutes, 23 seconds Uh okay sir. Okay thanks uh thanks for the opportunity. 12:27 12 minutes, 27 seconds Yeah thank you participants who wish to ask a question may press star and one the next 12:36 12 minutes, 36 seconds question is from the lines of daran from internal capital. Please go ahead. 12:42 12 minutes, 42 seconds Yeah hi sir uh thank you so much for the opportunity. I just wanted to ask uh when is the I think uh phase two of this 12:50 12 minutes, 50 seconds Chennai plant expansion expected to commence? 12:53 12 minutes, 53 seconds Yeah. Hi. Yeah. To phase two as of now we are almost uh at the peak of utilization of the phase one capability uh which is and phase two as we plan uh 13:03 13 minutes, 3 seconds we will be starting in uh Q1 of FI27 in the next uh quarter. 13:08 13 minutes, 8 seconds Uh in the next quarter. Okay. Uh understood. And sir could I get a general outlook what are you expecting from the industry? 13:17 13 minutes, 17 seconds uh we always maintain uh we are seeing the revenue growth of 20 to 25% uh in year right 13:26 13 minutes, 26 seconds okay so as previously maintained right yeah yeah we are still maintaining that perfect unders thank you so much sir 13:34 13 minutes, 34 seconds thank you thank you the next question is from the 13:41 13 minutes, 41 seconds line of Agarwal from Chhattisgar Investment Limited please go ahead Uh thank you for the opportunity sir. I 13:50 13 minutes, 50 seconds just wanted to ask about the reversal of the 7 million uh with respect to the export incentive. So could you throw some light on that or what is it about? 14:02 14 minutes, 2 seconds uh mainly that uh this is relating to the uh uh partner uh products in which 14:09 14 minutes, 9 seconds we had uh uh independently claim uh Joseph export incentive of uh submitting 14:16 14 minutes, 16 seconds that and uh so and uh gone to the notification in depth. We 14:23 14 minutes, 23 seconds came to know that uh the pass which this uh incentive which was earlier available under any scheme has been withdrawn 14:32 14 minutes, 32 seconds under the road test and although the customs had allowed but later on during audit this I this bond got highlighted 14:40 14 minutes, 40 seconds hence we had to reverse the entire benefit in this quarter itself. All right thank you sir. 14:50 14 minutes, 50 seconds Thank you. Participants who wish to join the Q&A ask questions may press star and one on the touchstone phone. 14:59 14 minutes, 59 seconds The next question is from the line of manusi Sharma an individual investor. Please go ahead. 15:06 15 minutes, 6 seconds Hi uh thank you. I just had two questions. Uh one was uh on the inventory days which had increased earlier uh due to the Chennai ramp up. 15:15 15 minutes, 15 seconds So I just wanted to know if the inventory levels have started to normalize in Q3. 15:25 15 minutes, 25 seconds Hello. 15:27 15 minutes, 27 seconds Yeah. Uh yeah had increased earlier due to the Chennai. 15:33 15 minutes, 33 seconds Now it is on the red but it will take another couple of quarters to actually stabilize. 15:43 15 minutes, 43 seconds Okay. And uh just another one uh to what extent was the uh higher tax expense in 15:49 15 minutes, 49 seconds Q3 uh influenced by one-off adjustments or was it just a timing difference? 15:55 15 minutes, 55 seconds No, see as we got the we saw tax benefits in quarter one and quarter two which are lambd not that hence the tax 16:04 16 minutes, 4 seconds provisions that higher. Secondly the provision of life of the new new labor 16:09 16 minutes, 9 seconds code also considering the higher tax Okay. All right. That's awesome. Thank you. 16:20 16 minutes, 20 seconds Thank you. Participants who wish to ask a question may press star and one on the touchstone telephone. The next question 16:28 16 minutes, 28 seconds is from the line of Ajit Sati from Eco Quantum Solutions. Please go ahead. 16:35 16 minutes, 35 seconds Yeah, thank you for the opportunity. Uh sir, margins expanded from 15.5% to 17% around. So what was the reason for this 16:43 16 minutes, 43 seconds margin expansion and going forward can we expect similar margin is the margin sustainable going forward 16:53 16 minutes, 53 seconds beta margins including on average y basis the contribution of extreme gain in export that is reduction in personal 17:02 17 minutes, 2 seconds cost as a percentage of this and because of this this resulted in person cost 17:08 17 minutes, 8 seconds percentage reducing by almost 2% and also personal cost also uh reduced by 2%. And that is the reason the margins 17:17 17 minutes, 17 seconds expanded in this order. Yes, the margins we'll be able to sustain uh uh between 70 to uh 90% growing effect. 17:28 17 minutes, 28 seconds Okay sir. Thank you. 17:34 17 minutes, 34 seconds Thank you. Participants who wish to ask a question may press star and one on the touchstone telephone. The next question 17:43 17 minutes, 43 seconds is a follow-up question from Daran from internal capital. Please go ahead. 17:50 17 minutes, 50 seconds Yeah. Hi sir. So uh I know you talked about the 20% and you want to maintain that but I just wanted to understand 17:56 17 minutes, 56 seconds with the current reduction of tariffs um do you anticipate any impact on demand or a ramp up in the order book as such? 18:04 18 minutes, 4 seconds I know that you you don't want you want to be like conservative with the with the 20% but maybe a little more a little more. 18:13 18 minutes, 13 seconds So to be very specific I think this year we are targeting to grow around 28%. And next year onwards again we are still targeting to grow 20 to 25%. 18:23 18 minutes, 23 seconds As far as the tariff is concerned I think for US reciprocal service reduced from 25 to 18%. 18:32 18 minutes, 32 seconds and Russian oil tension which is likely to get removed which was 25%. 18:37 18 minutes, 37 seconds But the point is the products what Gala is manufacturing are strings and fasteners which fall under section 232 18:45 18 minutes, 45 seconds of the US trade law and in this section there is no relief given as of now. So 18:53 18 minutes, 53 seconds currently these products which fall under section of 232 if you are imported in US we have to pay or customer has to 19:01 19 minutes, 1 second pay actually 50% tariff which is applicable on India and also if you 19:06 19 minutes, 6 seconds import from Europe except UK so from US tariff point of view we don't have 19:13 19 minutes, 13 seconds any major but in case there is substantial reduction in section 232 tariff then we might see some improvement from the demand. 19:24 19 minutes, 24 seconds Okay. Yeah, that helps. So that so I know now what to track exactly. So that helps. Uh and uh one more question I had on the what is the current status of 19:32 19 minutes, 32 seconds validation and commercialization of C rectctor springs. 19:38 19 minutes, 38 seconds Yeah, seat retractor spring basically we have completed the testing and validation at the customer end and after 19:45 19 minutes, 45 seconds that we also supplied them small lot which we have again tested considering this is a very critical product and now we are expecting pilot order from 19:53 19 minutes, 53 seconds customer in this quarter and slowly we may start ramp up uh month on month in quarter one quarter two after supplying 20:01 20 minutes, 1 second this pilot plot which is expected to be supplied in this quarter end or early next quarter Right. Okay. Perfect. Thank you so much, sir. 20:10 20 minutes, 10 seconds Thank you. 20:13 20 minutes, 13 seconds Thank you. Participants who wish to ask a question may press start and one on the touchstone telephone. 20:21 20 minutes, 21 seconds The next question is from the line of Kupa, an individual investor. Please go ahead. 20:30 20 minutes, 30 seconds Hello. Yes. 20:33 20 minutes, 33 seconds Hello. Yeah. Uh could you actually please share some uh like put some light on the solar project? 20:45 20 minutes, 45 seconds Hello we have you know appointed contractor for installation of 1.8 8 megawatt 20:55 20 minutes, 55 seconds project uh under the effect under the perfect model for capital consumption 21:01 21 minutes, 1 second and basically this this will help us in uh reducing the our uh uh power cost and 21:10 21 minutes, 10 seconds also uh you know in line with the uh uh achieving carbon neutral in the uh power 21:19 21 minutes, 19 seconds and uh it is around for the project to be uh completed. 21:27 21 minutes, 27 seconds Okay. Uh thank you sir. But since you mentioned that you'll be lowering the cost. So what could be the over and above benefits that we could have from that? 21:38 21 minutes, 38 seconds Isall cost will be 21:45 21 minutes, 45 seconds how on an annual basis uh 20% 15% 21:55 21 minutes, 55 seconds Okay, thank you sir. Just one last question from my front that uh with the whole wind renewable energy market since 22:03 22 minutes, 3 seconds we are expecting to see like a good increase in number of installations and also the demand from the OEMs is also 22:10 22 minutes, 10 seconds rising. So how do you see the company positioned in the whole uh like in this space? 22:18 22 minutes, 18 seconds So I think currently we are very well positioned. Basically uh we started with all the wind OEMs with STS which we were 22:27 22 minutes, 27 seconds manufacturing and continue to manufacturing in V plant and most of this OEM also need gold 22:35 22 minutes, 35 seconds which are high tensile critical partner and with Chennai facility we invested in the forging and with the same OEMs now 22:43 22 minutes, 43 seconds we are also started getting side agreement pilot lot supplies for B. 22:49 22 minutes, 49 seconds So I think our basket is increasing in terms of product offering for wind industry and this is one of the reason 22:57 22 minutes, 57 seconds we are seeing good growth coming in the partner business in 9 months and particularly in quarter three when we 23:04 23 minutes, 4 seconds started delivering also from our Chennai facities. So we are positive to continue this growth momentum in wind industry 23:13 23 minutes, 13 seconds and ride on this uh growth which is targeted by the OEM. Okay, got it sir. Thank you so much. 23:24 23 minutes, 24 seconds Thank you. Participants who wish to ask a question may press star and one. The next question is on the line of Isal 23:31 23 minutes, 31 seconds Maru, our individual investor. Please go ahead. 23:35 23 minutes, 35 seconds Uh hi uh congratulations on good set of numbers. uh we're just curious in terms of how important is it for the company 23:43 23 minutes, 43 seconds to invest in key uh research and development R&D areas to stay ahead in precision materials manufacturing processes over the next few years and 23:52 23 minutes, 52 seconds how's the company looking at some of this thank you yeah yeah hi yeah Mr. is a good question. So basically uh there is a 24:02 24 minutes, 2 seconds scope for research and development but in Gala basically we are focusing more on the development side uh where the we 24:10 24 minutes, 10 seconds focus on the market development focus on the new product development focus on the product improvement process improvement side because the globally uh these are 24:19 24 minutes, 19 seconds the things which are very easily acceptable in OEM if we are doing something in from the India and in 24:26 24 minutes, 26 seconds historically also we focus and incurred cost in the new product development and we are continue to do that in future as well as 24:35 24 minutes, 35 seconds okay thank you thanks for the explanation thank you participants who wish to ask a 24:43 24 minutes, 43 seconds question may press star and one the next question is from the line of marriage at individual investor 24:53 24 minutes, 53 seconds hello yes sir you're able uh could you please uh share some details on the new project which is currently in the focus and you know how 25:01 25 minutes, 1 second the company identifies and finalizes the new products which are under currently development. So please could you share some light on this? 25:11 25 minutes, 11 seconds So I think uh basically we are a customerdriven organization and basically as I mentioned we were 25:18 25 minutes, 18 seconds supplying some type of partners when we started business of partners with wind OEM and as we entered them we were 25:26 25 minutes, 26 seconds successful in getting the opportunity for and then we understood that same OEM they buy a lot of bolts and nuts. So we 25:36 25 minutes, 36 seconds got into manufacturing of bolts and nuts. At the same time once we develop any new product for example studs nuts 25:43 25 minutes, 43 seconds or bolts we try to diversify the industry segment. For example we started with wind as a segment for partner but 25:51 25 minutes, 51 seconds today we are developing the market in industrial application like all highway equipment tractor mining equipment are 25:59 25 minutes, 59 seconds our focus market. Railways we are developing the market in India. The objective is to increase the wallet share with each customer by adding more 26:07 26 minutes, 7 seconds and more products and also identify the opportunities of develop products with other industry segments. And as a focus 26:15 26 minutes, 15 seconds we are continuously targeting to find new business opportunities or new customers in renewable mobility and 26:22 26 minutes, 22 seconds industrial sector for any new product or getting new customer for developed product. 26:30 26 minutes, 30 seconds Oh okay sir understood. 26:32 26 minutes, 32 seconds can add about the electrolyer and tractor. Uh yeah, for example, recently we added new 26:39 26 minutes, 39 seconds customers uh in electrolyer segment where they use fasteners and our dip springs and earlier we were supplying our products only for tractor industry 26:48 26 minutes, 48 seconds but now we started supplying our fasteners and glock wedge lock washer for tractor implement application. So we 26:56 26 minutes, 56 seconds just keep on adding the segments and products in different vertical. 27:03 27 minutes, 3 seconds Okay sir got it got it completely. So are we witnessing any uh demand slowdown in the auto segment uh given the decline in the revenues uh from this segment currently. 27:14 27 minutes, 14 seconds Which segment you mentioned? You mention automotive segment. 27:18 27 minutes, 18 seconds Automotive as a absolute value the business is growing but I think because of much higher growth which is coming in 27:25 27 minutes, 25 seconds industrial and renewable because of India and Europe the percentage share of automotive or mobility is reducing on 27:33 27 minutes, 33 seconds our business. But in general we are seeing also growth in absolute numbers in automotive. But our products like 27:40 27 minutes, 40 seconds fasteners or even the new products like weight losses have more demand in renewable and industrial. That is why we are seeing much higher growth in those segments. 27:51 27 minutes, 51 seconds Oh okay sir. Okay sir. Thank you. Thank you. Thank you. 27:55 27 minutes, 55 seconds Thank you. Participants who wish to ask a question may press star and one on the touchstone telephone. The next question 28:04 28 minutes, 4 seconds is from the line of Jimit Meta, an individual investor. Please go ahead. 28:11 28 minutes, 11 seconds Uh good evening sir. Thanks for the opportunity once again. So my one of my questions was see what is the management outlook on the export to the US and the 28:20 28 minutes, 20 seconds Europe. Are revenues from these regions are expected to remain stable or is there a strategic focus on increasing revenues from these regions? 28:30 28 minutes, 30 seconds So I think uh broadly export contribute between 35 to 40% of our sales and uh 28:38 28 minutes, 38 seconds the reason is whatever normally new products we launch we launch first in India and uh we stabilize the supply 28:45 28 minutes, 45 seconds chain understand customer demand and then also develop the global market for that. uh as far as the Europe 28:53 28 minutes, 53 seconds and US is concerned we broadly see that uh demand will remain in that level of 35 29:00 29 minutes to 40% export and currently UF is around 20% and US is around 14%. So and quarter 29:08 29 minutes, 8 seconds on quarter they may be couple of way point plus minus but overall I think export will remain around 35% to these two regions mainly. 29:18 29 minutes, 18 seconds Uh okay sir and like my second question would be so what were the key drivers behind the increase in the margin during this quarter and what would the would be 29:27 29 minutes, 27 seconds the like guidance for on the margin side going forward. 29:32 29 minutes, 32 seconds Yeah these are the things what is the contribution of gain in the export revenue and also the reduction in 29:41 29 minutes, 41 seconds person. So this result in the add cost ratio reducing by around 2% cost also 29:49 29 minutes, 49 seconds reduced by 2%. And going ahead yes we will be able to sustain the margin between 70 to 18%. 29:59 29 minutes, 59 seconds Okay and uh my last question would be key what is the maximum revenue potential of the fastener segments and uh at steady state operations. 30:09 30 minutes, 9 seconds Yeah. So at Chennai we are saying uh once we complete phase two uh we can be in a position to touch 110 120 K uh from 30:19 30 minutes, 19 seconds that plant and for faster particularly you ask so for fastener in we have a facility at V uh there we can touch the 30:27 30 minutes, 27 seconds revenue of around 80 cr 100 K so that's if faster are put together then 200 220 30:34 30 minutes, 34 seconds cr which we can touch and what would be the investment for 30:41 30 minutes, 41 seconds uh for uh V we have already uh invested we are not seeing any major investment and uh because there is a space 30:49 30 minutes, 49 seconds constraint in the present plant. Uh but at Vada we are pl V or some new location we are planning to add uh 5 to 10 acre 30:58 30 minutes, 58 seconds land in the coming month and then we will planning the capex. Uh so that is still not final because we are still 31:06 31 minutes, 6 seconds waiting for land to get finalized and we have time uh at Chennai to complete the phase two uh we will be incurring 31:14 31 minutes, 14 seconds approximately 8 to 12 9 or 10 cr approximately which we already plan in our IPOP. 31:22 31 minutes, 22 seconds Uh okay sir. Okay thank you thank you for the opportunity. Thank you. 31:28 31 minutes, 28 seconds Thank you. Participants who wish to ask a question may press start and run. The next question is from the line of MH Desai from AR Investments. Please go ahead. 31:45 31 minutes, 45 seconds So NH requesting you to kindly unmute your mic. Yeah, I'm audible. Hello. Yes, you're audible, please. 31:52 31 minutes, 52 seconds Right. Uh so you know we have plenty of scope in our existing renewable segment but uh you know any plans even distant 32:00 32 minutes of getting into the aerospace faster space due to the sheer size of the opportunity which lies in front of us like for India. 32:09 32 minutes, 9 seconds Yeah. So I think basically we are understanding the market growth and opportunities in different segments and what products Gala can supply in these 32:18 32 minutes, 18 seconds markets. So currently as you mentioned we are focusing on renewable industrial and mobility and uh at least in short 32:26 32 minutes, 26 seconds term definitely we want to have more opportunities from these segments and growth from the global market but definitely we keep on looking at broader 32:35 32 minutes, 35 seconds opportunities and definitely aerospace is one of them which is just under study but we don't have any concrete plans as 32:42 32 minutes, 42 seconds of now but maybe in midterm we will have some opportunities coming from these segments going forward. 32:50 32 minutes, 50 seconds Okay sir. Thank you. 32:55 32 minutes, 55 seconds Thank you. Participants who wish to ask a question may press star and one. 33:01 33 minutes, 1 second The next question is from the line of giti Patel an individual investor. Please go ahead. 33:08 33 minutes, 8 seconds Uh hello. Hi sir. So uh I just wanted to ask that what is the current order book position and what order inflow do you 33:17 33 minutes, 17 seconds expect for the current quarter and also for the end of this year like by the end of this year. 33:24 33 minutes, 24 seconds So normally we have orders coming in regularly and apart from orders we work with many OEMs and tier one companies 33:32 33 minutes, 32 seconds who release uh 3 to six month forecast and firm demand for the current month. 33:38 33 minutes, 38 seconds So considering this normally we have order book of around 85 crores as of now and normally we see this order book to 33:46 33 minutes, 46 seconds keep on growing at the growth rate what we are projecting for next year for example 20 to 25%. 33:54 33 minutes, 54 seconds Okay and also one more question I have uh what is the uh hedging policy for euro and USD export exposure? 34:08 34 minutes, 8 seconds Yeah, Giri, I will answer that. Uh, we normally take 6 to 12 forward covers 34:17 34 minutes, 17 seconds covering 50 to 70% of our export revenue. Considering uncertainty, we have now reduced the forward coverage to around 30 to 50% of the exports. 34:30 34 minutes, 30 seconds Uh, okay. Okay, that answers my question. Thank you. 34:37 34 minutes, 37 seconds Thank you. The next question is from the line of Rohan Kapani, an individual investor. Please go ahead. 34:46 34 minutes, 46 seconds Hello. Good afternoon. Good afternoon. 34:49 34 minutes, 49 seconds Uh so my uh question was on the line of the growth. So despite the strong sequential revenue growth in the Q3, so 34:57 34 minutes, 57 seconds you know the PL the PAT remained very flat. So was there anything uh underlying margin pressure excluding one of items? Is there anything like that? 35:07 35 minutes, 7 seconds The if you look at the fact exception items uh there is a uh one time provision of 94 lakh which is on account 35:15 35 minutes, 15 seconds of the new labor code which has come in this quarter. Apart from that there is also reversal of 70 lakh on you know uh 35:24 35 minutes, 24 seconds road uh which is come earlier. So cumulative it is the impact of 1.64 cr 35:32 35 minutes, 32 seconds which impacted the profitability in this quarter as well as 9 months in that is the reason you see that profitability remain flat in this quarter. 35:44 35 minutes, 44 seconds Okay. Okay. Uh so since uh you have s exceeded the revenue target for the 9M so would you like to increase the 35:51 35 minutes, 51 seconds guidance for two year down the line or five year down the line something like that? 35:57 35 minutes, 57 seconds I think current year we are expecting to grow by around 28%. U but I think for next two years three years down the line 36:04 36 minutes, 4 seconds we will still like to maintain 20 25% guidance guidance and continue to focus to grow beyond these numbers internally. 36:14 36 minutes, 14 seconds Okay sir. Okay sir and uh inventory days has also increased earlier so due to the I think China uh Chennai ramp up. So 36:23 36 minutes, 23 seconds have the inventory uh levels started normalizing in Q3 and going forward what you will see in this list. 36:29 36 minutes, 29 seconds No it is inventory is had there is a reducing trend but it will take a couple of quarters for it to stabilize not 36:37 36 minutes, 37 seconds immediate last. 36:48 36 minutes, 48 seconds Hello. Hello. Thank you. So the participant left. Okay. Yeah. 36:56 36 minutes, 56 seconds Participants who wish to ask a question may press star and one. The next question is a follow-up question from 37:03 37 minutes, 3 seconds Kupa, an individual investor. Please go ahead. 37:12 37 minutes, 12 seconds Miss Kupa, kindly unmute your mic. Hello. Am I audible now? 37:20 37 minutes, 20 seconds Yes. Yes ma'am. Yes. 37:21 37 minutes, 21 seconds Yeah. Uh I just wanted to lastly ask that what are those major key growth drivers for coming uh you know short-term or medium-term perspective. 37:33 37 minutes, 33 seconds I think uh in general we are seeing the growth will be combination of multiple areas where we are working. So basically 37:42 37 minutes, 42 seconds one area which we are aggressively working is to expand the market share and increase the wallet share with existing customers. So maybe we start 37:50 37 minutes, 50 seconds with bit springs and we see the opportunity for fasteners and ws of washers with them or we started with and 37:57 37 minutes, 57 seconds now since we have expanded the portfolio with bolts and nuts so we add the product category and every year between 10 to 15% we add 38:06 38 minutes, 6 seconds with the new business development new customers where we are adding globally more and more customer in Europe US or 38:14 38 minutes, 14 seconds even in India in basically three verticals which is industrial renewable and mobility sector. So I think 38:21 38 minutes, 21 seconds basically increasing the wallet share, adding new parts from the existing customer and adding new customers are the three major areas we we constantly 38:30 38 minutes, 30 seconds work and see the opportunities for this growth which we are targeting. 38:37 38 minutes, 37 seconds Got it sir. Uh and with renewable energy how is your market share in wind turbine fastmas evolving like particularly in the domestic markets? 38:48 38 minutes, 48 seconds I think uh today still the market share pointer which will be not very substantial for Gala but as we are 38:56 38 minutes, 56 seconds continuously adding the customers and products I think in over a period of next two to three years we will reach to a good level of around 15 to 20% market 39:05 39 minutes, 5 seconds share in India got it and last question sir from my side what is the contribution of the 39:13 39 minutes, 13 seconds tier one uh company supply in renewable or in general? General? Uh in general sir. 39:22 39 minutes, 22 seconds So at company level normally we have OEMs tier one and channel partner which is distributor. Uh normally OEM contribute 39:30 39 minutes, 30 seconds about 40% to 50% depending on the quarter and the segment and tier one normally contribute between 25 30%. 39:40 39 minutes, 40 seconds And about uh 10 to 15% is contributed by the distributor and channel part. Okay, got it sir. Thank you so much. 39:50 39 minutes, 50 seconds Thank you. 39:52 39 minutes, 52 seconds Thank you. Participants who wish to ask a question may I press star and one. 39:59 39 minutes, 59 seconds Ladies and gentlemen, as there are no further questions, I would like to hand the conference over to the management for the closing comments. 40:11 40 minutes, 11 seconds Uh thank you all the participants in this earning call. I hope we have been able to answer your question satisfactoryy. If you have any further 40:20 40 minutes, 20 seconds question or would like to know more about the company, please reach out to our IR managers at Valerum Advisor. Thank you all of you. 40:29 40 minutes, 29 seconds Thank you on behalf of Valer Advisers. 40:32 40 minutes, 32 seconds That concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you. Thank you. 40:39 40 minutes, 39 seconds Thank you. Thank you.