GMM Pfaudler Limited — Q3 FY26

Gmm Pfaudler Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=qWM16RJsO28 Published: 3 months ago

0:01 1 second Ladies and gentlemen, good day and welcome to the Q3 and 9 months FI26 conference call of GMM Fodler Limited. 0:09 9 seconds As a reminder, all participant lines will be in the listenonly mode and there will be an opportunity for you to ask questions after the presentation 0:16 16 seconds concludes. Should you need assistance during the conference call, please signal an operator by pressing start then zero on your touchstone phone. I now hand the conference over to Mr. 0:26 26 seconds Ravin Kabar. Thank you and over to you, sir. 0:31 31 seconds Thank you Dr. Ja. Good evening ladies and gentlemen. A very warm welcome to all of you into the Q3 and 9 months FI26 0:39 39 seconds earnings call of GMM FEL limited. The earning presentation was uploaded on the stock exchanges today and is also 0:46 46 seconds available on our website. Hope all of you had a chance to go through it. From the management today we have with us our 0:53 53 seconds managing director Mr. Tarak Patil and our group CFO Mr. Alexander Bosan. We will give you a brief overview of the 1:01 1 minute, 1 second performance of the company after which we will get into the Q&A. Before we begin with the overview, a brief disclaimer, the presentation was 1:10 1 minute, 10 seconds uploaded on the stock exchanges and also on our website including our call discussions that will happen now contain 1:17 1 minute, 17 seconds or may have certain forward-looking statements regarding our business prospects and profitability which we are subject to several risk and 1:25 1 minute, 25 seconds uncertaintities. the actual results could materially differ from those in such forward-looking statements. I would now hand over the call to Mr. Tarak 1:33 1 minute, 33 seconds Patel to provide you with an overview of the performance. Over to you Dar. Uh thank you Ravin and uh good evening 1:42 1 minute, 42 seconds everybody. Uh so as you can see uh you know we're continuing with the momentum again this quarter. It's been a stable 1:49 1 minute, 49 seconds quarter in terms of revenue and profitability. However, it's been a good quarter in terms of order intake. If you 1:57 1 minute, 57 seconds look at our last three quarters of this uh financial year, Q1, Q2, and Q3, you will see that of course order intake has 2:05 2 minutes, 5 seconds been significantly higher and that obviously puts us in a much stronger position uh for the next financial year. 2:13 2 minutes, 13 seconds Uh in terms of revenue, our 9-month revenue is up 8% year-on-year and our 2:19 2 minutes, 19 seconds IITa grew by 14% on 9-month basis. Uh our margins have also been stable or slightly improved over the previous uh same period. 2:30 2 minutes, 30 seconds uh order intake like I mentioned to you are 961 crores which was 9% uh up this 2:37 2 minutes, 37 seconds quarter but 20 20% year on year and uh subsequently our 9inth month order period also saw a growth of about 16%. 2:47 2 minutes, 47 seconds Uh what is also very comforting is that today our backlog stands at 2,205 crores, the highest it's ever been which 2:55 2 minutes, 55 seconds is 27% higher than previous year. We expect Q4 to be a strong quarter in India in terms of revenue and shipment 3:04 3 minutes, 4 seconds and we also expect Q4 the momentum to continue with order intake which then hopefully will put us in a very strong 3:11 3 minutes, 11 seconds position for next year with a 30% higher backlog for the next financial year. Of course there would be both improvement 3:19 3 minutes, 19 seconds in and growth in revenue and uh in profitability as well. Having said that, the global environment continues to 3:27 3 minutes, 27 seconds remain challenging. Uh as many of you will know and would have investments in chemical companies. The chemical outlook 3:34 3 minutes, 34 seconds still remains uh quite soft and the worrying u areas or the geographies for management today is Europe which is of 3:43 3 minutes, 43 seconds course slow. Uh India continues to improve uh driven by investments in pharma, oil and gas, nuclear. So we have 3:51 3 minutes, 51 seconds diversified there. uh chemicals remained weak due to overcapacity and uncertainties in global trade. Uh Europe 3:59 3 minutes, 59 seconds like I said remains slow and uncertain especially in our traditional markets of chemicals and pharma. However, our systems business have seen significant 4:07 4 minutes, 7 seconds order intake driven by increased defense spending in Europe. Uh American markets are recovering and seeing improvements. 4:15 4 minutes, 15 seconds uh and also with South America, Brazil, Senco and Mixro in Brazil, we are seeing growth driven by metals and minerals and 4:22 4 minutes, 22 seconds rare earths and oil and gas. Uh China continues to be challenging for us and we are now implementing cost-saving 4:30 4 minutes, 30 seconds measures and strategic investments to make sure that China recovery is on track. Um I would also like to mention 4:39 4 minutes, 39 seconds here that uh you will see in one of the slides in our presentation that what's also very encouraging is that now 50% of 4:47 4 minutes, 47 seconds our order intake over the last nine months and the corresponding backlog comes from nontraditional industries. So 4:54 4 minutes, 54 seconds when I say non-traditional industries I mean these are orders not from chemical and pharma. So as a company you can see 5:01 5 minutes, 1 second that our diversification strategy is now gaining momentum. is something that we've been speaking on for a long time and today we are in a stronger position. 5:10 5 minutes, 10 seconds We are able to show growth even in spite the challenging conditions only because we have this diversification strategy. 5:19 5 minutes, 19 seconds Um lastly um I would also like to talk a little bit about two exceptional items in this quarter. One I think most of you 5:27 5 minutes, 27 seconds will be very aware of this is regarding the new labor code. uh there is some provisions to be made as the new labor 5:34 5 minutes, 34 seconds code got implemented in Q3. The other one-time expenditure is uh for our uh 5:42 5 minutes, 42 seconds facility in Germany. As you would have known over the last few quarters, we have been consolidating our cost structure across the globe in our glass 5:50 5 minutes, 50 seconds line business, our manufacturing footprint. This started with our shutdown of our Hyderabad facility uh 5:57 5 minutes, 57 seconds and the land which was sub subsequently sold off um and we will receive the proceeds this month 55 crores. Uh and 6:05 6 minutes, 5 seconds then we also um uh shut down our UK facility in uh Q4 of the last financial 6:12 6 minutes, 12 seconds year. This continues and our glass line capacity uh today as what we have across the world needs to be consolidated and 6:21 6 minutes, 21 seconds the next um initiative in this front is to reduce about 30 people in Germany. uh we have signed an agreement with the 6:30 6 minutes, 30 seconds works council there that we'll see 30 people six uh 14 of them have already left this quarter and the balance 16 will leave over a year's time and the 6:39 6 minutes, 39 seconds provision for that has also been taken entirely in this quarter u I would now like to hand over the call to Alex uh 6:48 6 minutes, 48 seconds will give you a little bit background about the financial numbers and maybe a little bit more details about these two one-time uh impacts over to you Alex 6:57 6 minutes, 57 seconds Yeah, thanks a lot Tarak. Um, hello everyone. Um, as already started by Tarak, I would 7:04 7 minutes, 4 seconds like to say or focus especially on the two exceptional items. The first one, as Darak mentioned, due to the um 7:12 7 minutes, 12 seconds consolidation of our global footprint of our global glass line setup, we started a further um cost reduction improvement 7:21 7 minutes, 21 seconds program at our site um of FA GmbH in Germany. And this resulted in a exceptional 7:30 7 minutes, 30 seconds impact this quarter of 44 crores. This covers the it's mainly severance 7:38 7 minutes, 38 seconds payments for staff already left and staff which was agreed to leave now in 7:45 7 minutes, 45 seconds the coming financial year. So this is a full um downsizing um staff reduction 7:51 7 minutes, 51 seconds program to really adjust our footprint um to the future requirements. 7:59 7 minutes, 59 seconds The other um one-time exceptional impact is coming from the new labor code in 8:05 8 minutes, 5 seconds India. I assume um everybody already is aware of this. Also several other companies faced this. It resided in an 8:14 8 minutes, 14 seconds impact of 13 crores this quarter and this was also fully provisioned for and 8:21 8 minutes, 21 seconds you see it in our income statement that said both together classified as exceptional and therefore have a 8:28 8 minutes, 28 seconds one-time impact on our result. Um I think these are the cool two key areas from my side. I now would like to hand 8:37 8 minutes, 37 seconds over back to Raven but um yeah probably you will have further questions. Thank you Alec. Ruduja you may now open the line for questions. Thank you. 8:48 8 minutes, 48 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchstone 8:56 8 minutes, 56 seconds telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a 9:04 9 minutes, 4 seconds question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. 9:23 9 minutes, 23 seconds The first question is from the line of Samir Takur from Ahmed Capital. Please go ahead. 9:34 9 minutes, 34 seconds I'm sorry to interrupt you Mr. Samir but we are unable to hear you clearly sir. Can you please check? 9:42 9 minutes, 42 seconds Uh one second. 9:43 9 minutes, 43 seconds Can you hear me properly now? Is it better? Better please go ahead. 9:49 9 minutes, 49 seconds Yeah. So my first question is uh how should we think about the margins and return on capital employed for the 9:56 9 minutes, 56 seconds non-traditional end markets? Is it comparable to your traditional markets or is it lower or higher? Anything on that? 10:06 10 minutes, 6 seconds So when I say non-traditional markets, you must keep in mind that these are markets that we have been uh serving for 10:14 10 minutes, 14 seconds quite some time. So they are not new brand new markets. You know our heavy engineering business serves definitely non-traditional markets because their 10:22 10 minutes, 22 seconds markets are oil and gas, petrochemical, fertilizer and now nuclear as well. Uh our systems businesses serve markets like defense, space and other stuff are 10:31 10 minutes, 31 seconds mixing business. So generally uh we feel that in terms of uh diversification there are two or three things that we 10:39 10 minutes, 39 seconds look at. One is of course uh our ability to engineer and manufacture these goods. 10:44 10 minutes, 44 seconds So that's something that we have as a USP as a company. So that continues. But these these uh these new verticals or 10:52 10 minutes, 52 seconds these new businesses that are helping us diversify are now entering or helping us grow from non-traditional industries. 10:59 10 minutes, 59 seconds Right? So most of our growth most of our business nearly 70% of our business maybe 18 to 24 months ago maybe even more came from chemical and pharma. And 11:08 11 minutes, 8 seconds while the chemical market kind of um went down over the last couple of years, it was important for us as a company to 11:16 11 minutes, 16 seconds diversify as a long-term strategy. If you want to see continuous and sustainable growth, the more you diversify, the more uh at least the 11:24 11 minutes, 24 seconds buffer that you have, right? Because all the verticals and all the industries hopefully would not go up or go down at the same time. So that's the thought 11:31 11 minutes, 31 seconds process behind the diversification. Uh and many of our products can also be used in non-traditional markets. We're 11:38 11 minutes, 38 seconds trying to uh improve our penetration in these new market areas. In terms of margin profile, they remain quite 11:45 11 minutes, 45 seconds similar in anything. Once we move up the value chain and we give process technology like we do with our systems business, you will see margins improving 11:53 11 minutes, 53 seconds there. Right? Again, in terms of return on capital, the other thing that I would like to just mention here that these factories and these businesses are not 12:02 12 minutes, 2 seconds heavy in terms of assets. They don't have large manufacturing sites as facilities and footprint. They are 12:09 12 minutes, 9 seconds pretty much buying and assembling and putting it all together and selling it to the customer. Right. So, it's a combination. Um, and I think uh I hope that kind of answers your question. 12:20 12 minutes, 20 seconds H you want no definitely have to echo. 12:25 12 minutes, 25 seconds In fact, the the new businesses they should be at least as attractive as the current ones regarding the Rosi. Um we 12:32 12 minutes, 32 seconds we gave a long-term roy guidance in our last capital markets day. We are currently not there but we are confident that we will ring up continuously. Yeah. 12:43 12 minutes, 43 seconds And I think as a strategy the way I would hope people think about this is that a company that was famous and only 12:50 12 minutes, 50 seconds known for glass line today has 50% of its business coming from non-class line non-farma non-chemical. Right? So a lot 12:58 12 minutes, 58 seconds of people talk about diversification but you can see now with the orders that we have the size of the orders that we 13:05 13 minutes, 5 seconds have. So a large order in defense close to $30 million a large order from nuclear close to about $15 million. 13:13 13 minutes, 13 seconds Right? So these are large orders where they we we would not be getting these orders if we were not capable or we 13:21 13 minutes, 21 seconds didn't have the kind of capabilities to kind of support these large projects. 13:25 13 minutes, 25 seconds Right? So that shows that over time that we have diversified and this uh initiative or uh the strategic initiative is going to be very important for us over the next few years as well. 13:38 13 minutes, 38 seconds Uh okay thank you. Uh my second is uh what is the behind this lower margin sequentially? I believe Senco is margin 13:46 13 minutes, 46 seconds negative if I'm not wrong. Uh so if you can provide some details on that. 13:52 13 minutes, 52 seconds Sorry margin negative Senco. No. So Senco is from No, yeah, accative. I'm saying. 14:00 14 minutes Yeah. 14:00 14 minutes Yeah. I'm saying imagine acetative definitely. 14:03 14 minutes, 3 seconds Yes. So Senco is doing quite well. You know, I was in Brazil actually last week. Uh Senco has a very strong order 14:11 14 minutes, 11 seconds book and the outlook looks very positive. There are large investments coming into metals and minerals, oil and gas, prochemicals, 14:20 14 minutes, 20 seconds even chemical and pharma in South America which we should definitely uh try and get involved in. So, Senco is a 14:29 14 minutes, 29 seconds company that today is uh strong in terms of both backlogs and opportunities and continues to remain that way. 14:37 14 minutes, 37 seconds Uh okay, thank you. I I was just thinking about the lower e margin sequentially. Is that driven by something else or I mean uh what are the 14:46 14 minutes, 46 seconds factors and specifically SEC the lowest lower lower the lowest 14:52 14 minutes, 52 seconds no unit or what do you mean in general in general in general I'm just the total IITA margins of the 15:01 15 minutes, 1 second company uh okay so I think the IITA margin if you see as the group console numbers it's it's it's flattish right it's about 15:09 15 minutes, 9 seconds 12% versus 13.5 but And I would just recommend that when you look at GMM fodler, we must look at it on a at least 15:17 15 minutes, 17 seconds a 9 month or a 12-month basis. Quarterly would not be a fair way to look at an engineering manufacturing company where most of our orders are long-term and 15:25 15 minutes, 25 seconds over a period of time. So I think uh as we had said that during this year we will maintain 12 and a half to 13% 15:33 15 minutes, 33 seconds margin and look at upside if the market picks up. So I think it's a stable margin. It's better than where we were. 15:39 15 minutes, 39 seconds There are obviously rough I mean there are tough places in the world right now where we do have problems. We don't have uh order intake as much as we would like and that is always going to be the case. 15:49 15 minutes, 49 seconds Some geographies do well some geographies will not do so well but generally we are definitely happier today and more have more comfort because 15:57 15 minutes, 57 seconds of the ordering and the backlog that we have out there. 16:01 16 minutes, 1 second Yeah just just to add there I I think if you compare on the 9 months basis the IITA margin is increasing from 12 to 16:08 16 minutes, 8 seconds 12.7%. So we see the upward trend there are of course and these are especially the new investments there we achieve 16:16 16 minutes, 16 seconds already higher emit margins but unfortunately we have some units which are performing not good. We of course 16:25 16 minutes, 25 seconds you could imagine that Fler GmbH the unit in Germany where currently we we initiated cost with um cost-saving 16:32 16 minutes, 32 seconds measures there IA is um definitely not where it should be. We also um still have some challenges in in Switzerland 16:42 16 minutes, 42 seconds and also um China especially with the outlook um from the IVIDA margin perspective it is not there where it 16:50 16 minutes, 50 seconds should be it's below average however and I think this is fair to say especially the new businesses that we invested in 17:00 17 minutes there we already trading at higher ID margins. So what we have to do we already started we have to improve the 17:09 17 minutes, 9 seconds the underperforming units just one more point here um is that one obvious you know obviously there is a product mix 17:18 17 minutes, 18 seconds that has a place sometimes you will see that there'll be a large H order that could get shipped out so it's really again a quarterly would not be the right 17:26 17 minutes, 26 seconds way to look at it I think from a margin perspective we believe that uh there is obviously room for improvement we're working towards this and as volumes pick 17:34 17 minutes, 34 seconds up and as some of these cost initiatives take u you know effect we will definitely see margin to hopefully move in an upward trend. 17:45 17 minutes, 45 seconds Uh okay that's that's helpful if I can squeeze in one more just a small one that's order inflow uh can you get the breakup of India and uh international 17:53 17 minutes, 53 seconds markets is it driven by more from market or all around yeah so just broad level 18:01 18 minutes, 1 second India was about 290ish so 300 odd crores India 600 something in international so 18:07 18 minutes, 7 seconds both both of them have uh recorded quite strong order intake uh and this quarter also looks good And the nice part about 18:16 18 minutes, 16 seconds at least India is that the glass line business is looking a little bit better. 18:20 18 minutes, 20 seconds We have recently been uh we won some large glass line business as well. So that's also a positive at least from an India perspective. 18:30 18 minutes, 30 seconds Okay, that's that's helpful. Thank you. That that was all from my side. 18:35 18 minutes, 35 seconds Thank you. The next question is from the line of Saga Sha from Spark PWM. Please go ahead. 18:42 18 minutes, 42 seconds uh thanks for the opportunity and uh uh uh uh congrat congratulations to the management for uh delivering such 18:50 18 minutes, 50 seconds numbers in such uncertain times actually uh now my first question sir was just a followup of the previous participant 18:59 18 minutes, 59 seconds actually um the volatility I understand it's an engineering company so there must be volatility in the margins but uh 19:07 19 minutes, 7 seconds what I wanted to understand is there is some uh some um there's huge difference in in the grow in the gross margins as 19:14 19 minutes, 14 seconds well. So uh the gross margin for this quarter is at around 60.1% as uh compared to as compared to the previous two quarters we were clocking about 63%. 19:26 19 minutes, 26 seconds So uh is this uh difference in gross margins is just because of uh it's because of product mix or is it 19:34 19 minutes, 34 seconds something else or is it related to any kind of terrestri or terrorists are they related to that? I wanted to understand that point sir. 19:45 19 minutes, 45 seconds So I I think what is important to consider for us it's probably if you look on a 12 months basis or 9 months 19:52 19 minutes, 52 seconds basis if you just do a quarterto quarter comparison there could be a high impact just due to the business mix. Um so um 20:00 20 minutes we also intend to focus more in the future on a 12 months basis and not just on a quarter because this could be 20:07 20 minutes, 7 seconds exactly as you said it could come just you to a really strong performance high gross margin business in one quarter and 20:15 20 minutes, 15 seconds then you have the residing bit on the full move. Okay. So what are you mention? 20:22 20 minutes, 22 seconds Okay got your point sir. So what are the steadystate gross margins or EITA margins that we would like to target in the next two years? anything 20:30 20 minutes, 30 seconds between in F27 and F2 if cons if this global situation actually remains stable 20:37 20 minutes, 37 seconds and if it actually improves I I I think what we gave and we definitely stick to this as a midterm 20:47 20 minutes, 47 seconds margin to go back to the 17 percentage 16 to 18% range and we are getting there 20:55 20 minutes, 55 seconds because especially the latest investments um they already achieved um better IDA margins. Um we have to admit 21:04 21 minutes, 4 seconds that currently we have the challenges in the global um economy. We um see the uncertainties. We have still some 21:12 21 minutes, 12 seconds underperforming units due to this and therefore we are not there. But as said before the IITA on a group level 21:19 21 minutes, 19 seconds compared to last year it increased from 12% to 12.7%. 21:24 21 minutes, 24 seconds And we are confident that we also bring it slowly up again in the next financial year already. But the full achievement 21:33 21 minutes, 33 seconds the target by when we will reach it it also depends on the global economic situation that we currently could not really foresee how it will develop. 21:44 21 minutes, 44 seconds Okay. Got your point sir. Now my second question was related to disclosures. Yes, sorry. 21:52 21 minutes, 52 seconds No, no. I was just going to add to that even though that the global situation of course is something that none of us can 21:58 21 minutes, 58 seconds uh you know uh predict in terms of what is going on but um at least from the perspective of you know at least from 22:07 22 minutes, 7 seconds the perspective of the customers that we speak to at least the chemical customers which is currently our biggest I would 22:14 22 minutes, 14 seconds say pain point is that volumes have now come back so at least that's a positive development maybe the margins will take 22:22 22 minutes, 22 seconds a little bit longer but people are at least now running full factories which means that hopefully the next investment cycle is not so far away right so at 22:31 22 minutes, 31 seconds least from that perspective we've had two years and many of you have been following chemical companies I know that there is not too much positivity right 22:40 22 minutes, 40 seconds now but the cycle has to turn at some point right uh so we all I guess have our fingers crossed that at some point 22:48 22 minutes, 48 seconds things will improve and I think now there is at least from a global trade perspective some amount of hopefully stability and maybe I speak too early 22:56 22 minutes, 56 seconds but at least with India, Europe, India, US maybe there is some potential improvement and development on that front. 23:06 23 minutes, 6 seconds Okay, got your point sir in that. Uh thanks for that answer. Uh my second question was related to disclosures. you 23:13 23 minutes, 13 seconds this time is the first time that you have given disclosures that how much percentage of your orders were from non 23:21 23 minutes, 21 seconds traditional sectors actually. So don't you think now it's the time to give disclosures even within technologies 23:29 23 minutes, 29 seconds that which segments or is it from the industrial mixing side or is it from the GLE or is it from or is it from the lab 23:37 23 minutes, 37 seconds and the process glasses or which businesses are actually are giving you higher order intake what is the outlook regarding that so that investors get can 23:46 23 minutes, 46 seconds get further more confidence sir that how GMM can grow in the next two Yes, 23:53 23 minutes, 53 seconds correct. So, one of the learnings over the last few years after speaking to people like you is that our business is confusing, right? Um, and there's so 24:03 24 minutes, 3 seconds much stuff going on with so many different entities and international versus India. I think it becomes difficult for investors and analysts to 24:10 24 minutes, 10 seconds really put a finger right there's much easier companies to track than GMM. So, we get that for sure. I think what we 24:18 24 minutes, 18 seconds have to do one is obviously to make it easier for you but I think the more more important part is to make it easier for management to think about businesses to 24:26 24 minutes, 26 seconds strategize about businesses right so we are now going through a transformation which I've spoken about quite a bit you 24:34 24 minutes, 34 seconds will see a different uh company in the next few years we have already reorganized we are the we at the process 24:42 24 minutes, 42 seconds of reorganizing our business uh lines to meet specific specific needs. We also believe that every vertical or every business life has different strategies. 24:52 24 minutes, 52 seconds For example, our glass line business for example is a mature business. It's not growing at 20%. We are the market leaders and it's a mature market. Right? 25:03 25 minutes, 3 seconds There the play is not growing market share. The play there is not growing. The play there is to really cut cost. 25:09 25 minutes, 9 seconds And that's why you see we have already looked at three facilities in terms of reducing and kind of downsizing. Right? 25:18 25 minutes, 18 seconds These are tough decisions to take but we are taking them because we believe it's the right thing to do and we believe that we already have enough capacity for 25:26 25 minutes, 26 seconds grassland. Right? So over time this should play out to our advantage. Our other verticals like heavy engineering for example are high growth vertical. So 25:35 25 minutes, 35 seconds our strategy for that is completely different. our strategy there to add salespeople to add capabilities to add 25:42 25 minutes, 42 seconds uh you know uh different kind of uh geographies and you know PTR so that we 25:49 25 minutes, 49 seconds can cater to a much wider range of uh industries right so every vertical will have different uh strategies every 25:58 25 minutes, 58 seconds region within those verticals will have different strategies right so that helps us as a company deliver and initiate 26:04 26 minutes, 4 seconds strategies based on specific needs and not a one-size that fits all. So hopefully we are in the process. Uh we 26:13 26 minutes, 13 seconds obviously will go internally to the board with next year's budget shortly and at some point we will also start uh 26:22 26 minutes, 22 seconds articulating our next strategy, the next long-term strategy. It's been quite some time and we've been talking about coming back to the capital markets with our strategy day, our analyst investor day. 26:33 26 minutes, 33 seconds Uh we were hoping that the market stabilizes. We didn't want to come back too early and then still kind of struggle. So we were waiting till the market stabilizes before we come to you. 26:44 26 minutes, 44 seconds But the plan is ready, the ideas are ready, the numbers are ready, the strategies are ready. Uh so I think the 26:51 26 minutes, 51 seconds thinking has already started because what this company was 5 years ago, it's not the same company today. So the strategies will need to evolve. The 26:59 26 minutes, 59 seconds people, the organization will need to now evolve. And like I said, once business picks up, uh, things should look good. But I'm excited. Uh, I think 27:08 27 minutes, 8 seconds the people in the organization are excited. Um, and I think that at least from the last maybe two or three months of changes that we implemented, there is 27:16 27 minutes, 16 seconds definitely more accountability. There is definitely more excitement. So I think it's definitely a positive. Um, Alex, you want to add something to that? 27:25 27 minutes, 25 seconds Oh, I agree. Sure. Okay. So thanks. Okay. 27:30 27 minutes, 30 seconds Uh sir my last question was uh related to the non-glass lining technologies and the trade deals behind that uh within 27:38 27 minutes, 38 seconds the non-glass lining technologies your yeah that you are getting from the non-traditional sectors defense nuclear and uh even metals and minerals you just 27:47 27 minutes, 47 seconds highlighted about the South American market also in your opening comments but I wanted to understand that uh which of 27:55 27 minutes, 55 seconds these companies are actually uh are actually gaining traction is Is it Edlon or is it just heavy engineering in the 28:03 28 minutes, 3 seconds India business or is it Mayweak for for the filtration and drying systems or is it process and glass systems? Which are 28:10 28 minutes, 10 seconds the actually segments or which are the companies internationally actually are giving you that kind of traction or will give you higher traction in the future. 28:22 28 minutes, 22 seconds Um so I think sorry go Alex you start. I I think what definitely we already announced before we have a strong focus 28:29 28 minutes, 29 seconds on mixing. You saw it also from the latest acquisition to setting up this mixing platform with the entities Mixel 28:36 28 minutes, 36 seconds in France and China, Mixpro in Canada as well as North Senco in South Mame America combined with Mion in India. We 28:45 28 minutes, 45 seconds have the platform there. This is something where we expect further growth to come and especially also margin improvement because as said before this 28:54 28 minutes, 54 seconds is an from our perspective attractive margin business. Um we um also still 29:01 29 minutes, 1 second have it's a smaller unit but the inter seal business it's an entity in Germany which also belongs to the long glass line business which also achieves high 29:10 29 minutes, 10 seconds margin. So this is attractive from our perspective. Um beside the non-glass line we also have the system business 29:19 29 minutes, 19 seconds and the system is also it's helping us currently with the order intake and there we I think we announced in June 29:26 29 minutes, 26 seconds last year the big order intake of 330 cr so 33 million euro um this is going more 29:34 29 minutes, 34 seconds to the call it the defense industry so um also it's broadening our customer portfolio and we are developing they are 29:43 29 minutes, 43 seconds in the right direction also with attractive margins. Sorry to interrupt. 29:50 29 minutes, 50 seconds We have um heavy in just just last sentence and in India of course we have our strong heavy engineering business 29:57 29 minutes, 57 seconds where we also um developing in other industries um also there's now something in the nuclear sector. So um this is 30:06 30 minutes, 6 seconds also helping us in broadering our customer base, our customer industries and this is also something where we expect further goals to come especially also topline goals. 30:18 30 minutes, 18 seconds Thank you. Sorry to interrupt. May we request Mr. Shaga to please rejoin the queue. We have other participants waiting for the turn. Thank you ladies 30:26 30 minutes, 26 seconds and gentlemen. In order to ensure that the management is able to address questions from all participants, we would request you to please limit your question to one two per participant. If 30:34 30 minutes, 34 seconds you have a follow-up question, you may rejoin the queue. The next question is from the line of Salil Desai from Marcelus Investment Managers. Please go ahead. 30:44 30 minutes, 44 seconds Uh hi Tarak and Alex. Uh my first question is uh on this Germany restructuring right. between what you've 30:52 30 minutes, 52 seconds done at uh the UK facilities and what you doing at Germany. So you know how do you think differently of what interventions are required uh at each 31:01 31 minutes, 1 second unit and related to that is what more can we expect and uh does production suffer with the German uh initiative that you've now taken? 31:14 31 minutes, 14 seconds Sorry, could you just repeat that? It wasn't very clear. Could you just say that one more time please? Uh so I'm saying that what you've done in Germany 31:22 31 minutes, 22 seconds versus what you did in UK right so how are you thinking differently of different facilities of what intervention is required and once the 31:30 31 minutes, 30 seconds decision is made you know in the future can we expect something more in the pipeline uh how does product 31:37 31 minutes, 37 seconds change what you've done in Germany yeah so I think let's start off with the global glass lining business you know 31:44 31 minutes, 44 seconds there's obviously a addressable market there's a market size and obviously as you know and many of you would know we 31:52 31 minutes, 52 seconds have last time facilities in US, Brazil or we had rather UK, Italy, Germany, 32:01 32 minutes, 1 second China and India we had Karamas and we have Hyderabad. So on a global basis uh you know obviously considering the uh 32:09 32 minutes, 9 seconds growth and the market we felt that we had too much capacity so we had to look at reducing capacity especially in 32:17 32 minutes, 17 seconds Europe started with UK because UK was our oldest facility it was uh about 100 32:23 32 minutes, 23 seconds plus years old. So definitely the first one that we went after in terms of downsizing that is completely done now. 32:32 32 minutes, 32 seconds So there is no class line production now in the UK. We then obviously in India we had our Karams facility and we had a 32:40 32 minutes, 40 seconds Hyderabad facility again too much capacity for the Indian market. We decided to move everything into one rather than have two factories running 32:48 32 minutes, 48 seconds at 50%. We would have one factory running at 80% or higher and that's what's happening now. Hyderabad facility was sold off. The people were let go and 32:57 32 minutes, 57 seconds the uh land is now sold and we should now receive proceeds uh this month. Uh the German facility again considering 33:05 33 minutes, 5 seconds the current order trends in uh Euro. Uh that is a proactive step where we have taken because we know that our cost 33:13 33 minutes, 13 seconds structure is high in Germany and we had an agreement over the last couple of months. We negotiated and we signed an agreement with the metal union workers 33:22 33 minutes, 22 seconds to reduce 30 people 30 plus another five over time. So 35 people which accounts for nearly 30% of the total wage bill of 33:31 33 minutes, 31 seconds Germany. So it's a significant restructuring. I know it's not fun to restructure. We would love to have business that was growing and orders 33:39 33 minutes, 39 seconds coming in and we could have these factories completely full but unfortunately that's not the case. But I think it kind of uh gives us a better 33:48 33 minutes, 48 seconds standing for the future. We already have a facility in Italy that does quite well which is a very different model because 33:56 33 minutes, 56 seconds they outsource a lot of their production. So that continues. The German facility will also continue however with a different cost structure 34:03 34 minutes, 3 seconds where a lot of their metal fabrication will now not be done in Germany and could be done in lower cost countries. 34:10 34 minutes, 10 seconds So that's part of the strategies and uh in terms of further downsizing I don't think there is anything significant 34:18 34 minutes, 18 seconds right now that we're looking at. China is a small facility. China strategy is something that we're working on. China is slow for sure. Uh what we do with 34:27 34 minutes, 27 seconds China is something that we will need to kind of figure out over the next few months but it is not something that is a 34:35 34 minutes, 35 seconds big problem for us. So I think where we need to work is Europe. Europe we've already done a lot of hard work and this is just one more step to make sure that 34:43 34 minutes, 43 seconds we are from a cost perspective uh the perspective just much more comfortable. 34:50 34 minutes, 50 seconds Understood. Thanks. And second question is can you just remind me uh on nuclear what were what applications are we 34:58 34 minutes, 58 seconds getting orders for and has anything moved on the semiconductor side? Yeah. 35:04 35 minutes, 4 seconds So nuclear we have received a couple of orders large orders from the nuclear power corporation of India. So these are 35:12 35 minutes, 12 seconds for ancillary equipment going into the nuclear power plants. So these are not nuclear stamped vessels. However, they are large pressure vessels, heat 35:20 35 minutes, 20 seconds exchangers and column. So they go into the same plants that generate nuclear power. So that's where our uh play is. 35:29 35 minutes, 29 seconds there are not many people who are qualified and because of the acquisition of Hindustan dollar or HDO we were able 35:37 35 minutes, 37 seconds to kind of break into this market. Uh so that was in uh the uh that was in 35:43 35 minutes, 43 seconds nuclear. Uh going forward India nuclear uh there has been investment already approved. So we believe that over the 35:51 35 minutes, 51 seconds next few years the nuclear power sector here in India will continue to grow and again we will be uh well positioned to 35:58 35 minutes, 58 seconds capture some of that growth. Sorry your your second question on this was sorry on semiconductors I thought we had some 36:05 36 minutes, 5 seconds opportunities there possibly like yeah so semiconductors is basically our unit in in the US headlines doing quite 36:13 36 minutes, 13 seconds well has a good strong order book driven by semiconductors um and also uh quite profitable and uh 36:22 36 minutes, 22 seconds how big would Edlo is now it's um 25 36:29 36 minutes, 29 seconds million ion USD. Um please consider for ATLON this is um we also announced an investment a setup of a new site because 36:38 36 minutes, 38 seconds we expect a significant growth over the coming years based on the semiconductor business inflation reduction act which 36:46 36 minutes, 46 seconds was signed in the US I would say 12 or 18 months ago. So a lot of investments are coming there and therefore we 36:53 36 minutes, 53 seconds invested early in the new site and we'll expect a significant increase on this high profitable business. 37:01 37 minutes, 1 second Yeah. And and Edlon also does work with the nuclear industry. They make some PTA line glove boxes also that goes into 37:08 37 minutes, 8 seconds nuclear but I think you would remember Sil a few quarters ago when Edelon wasn't performing that well. We had actually put it as an asset for sale. We 37:17 37 minutes, 17 seconds were running a process. This was before the SEA boom had kind of happened and that was about a 8 to9 million business 37:24 37 minutes, 24 seconds which has now grown about three times and is quite profitable but we need to push that business and maybe see if there are more opportunity to grow faster and quicker on that front. 37:36 37 minutes, 36 seconds Great. Thank you so much and all the best. 37:39 37 minutes, 39 seconds Thank you. The next question is from the line of Kunal Meta from Sunedi Securities. Please go ahead. 37:47 37 minutes, 47 seconds Yeah. Hi Tara Canar. Uh very good evening and my first question is you know I think a while back you all had mentioned that the heavy engineering as 37:56 37 minutes, 56 seconds a mixing business can be 100 billion business each in the next three four years. Uh so you know now that we have 38:04 38 minutes, 4 seconds you know four brands under mixing and you know we have the Hindustan facility for the heavy engineering uh how do we see this growing? Are we going to see 38:13 38 minutes, 13 seconds any more acquisitions to for you know capacity expansion in the heavy engineering so we can have a facility 38:20 38 minutes, 20 seconds overseas so we can cater to orders overseas as well. And how is the mixing segment also uh looking in terms of order intake? 38:30 38 minutes, 30 seconds Yeah. So on the heavy engineing front, we have enough of capacity to hit maybe 38:37 38 minutes, 37 seconds about a 600 or 600 to 700 cr from this very site. So no further real investment 38:46 38 minutes, 46 seconds needed. But if you want to go up to a,000 crores of revenue, then of course we would need to add capacity. Uh we have space available to expand even 38:54 38 minutes, 54 seconds within the current site. So for the next 2 to 3 years uh we don't see any significant investment in H uh in our H 39:02 39 minutes, 2 seconds business and engineering business. Um as for mixing of course so mixing again like you said four different facilities around the world. Our Senco and our 39:12 39 minutes, 12 seconds Canada so our Senco Brazil and Canada uh mixro are doing quite well driven by oil and gas metal railroads etc. a very 39:20 39 minutes, 20 seconds strong backlog and very strong pipelines uh doing a lot of work for some of these newer and non-traditional industries. Uh 39:29 39 minutes, 29 seconds India and Europe uh India is okay in terms of mixing some large orders to be finalized. Europe because of the general 39:37 39 minutes, 37 seconds weakness in chemical and pharma continues to remain weak and we are looking at obviously manufacturing some of these uh equipment outside of the 39:46 39 minutes, 46 seconds high cost western countries to make our product more kind of attractive for the European market. So that's the general 39:54 39 minutes, 54 seconds feel around mixed uh in mixing and China is currently and China is it's still a small unit but nevertheless it's 40:02 40 minutes, 2 seconds also mixing unit and there we are in line with the Chinese economy order intake also behind our expectations. So 40:09 40 minutes, 9 seconds this is also not doing good. 40:16 40 minutes, 16 seconds Okay. Uh so my next question is uh you know India just signed a EU uh trade deal with EU and uh do we see any 40:24 40 minutes, 24 seconds indirect benefits from this in terms of uh because you know there might be some uh expansion of you know orders from 40:31 40 minutes, 31 seconds defense or you know nuclear or uh you know maybe the export scenario uh becomes better like from India uh you 40:40 40 minutes, 40 seconds know we can leverage Indian facilities the lowcost base of India to supply to uh Europe as well. So can we see a possibility? 40:50 40 minutes, 50 seconds Yeah, I think that if you I think one of the things at least I was reading was that chemicals can now be imported into 40:58 40 minutes, 58 seconds Europe uh from India. So that could obviously drive investment in chemical manu manufacturing in India which obviously means that that would result 41:06 41 minutes, 6 seconds in more business for us. Uh pharma collaboration again I think it's too early to comment. 41:13 41 minutes, 13 seconds It's definitely a positive, but if you were to ask me specifically which and where it's going to impact us, uh I can't say right now. But I do think that 41:22 41 minutes, 22 seconds it will definitely add some benefit in terms of you know even trading between the two countries, export licenses in 41:30 41 minutes, 30 seconds certain cases. Um you know there could be some benefits as well, right? So I see that and then of course now with the 41:36 41 minutes, 36 seconds US coming back in again we had um5 or$6 million worth of shipment to the US last year or orders from the US that now 41:45 41 minutes, 45 seconds obviously uh we can then now process and kind of again start looking at the US market from uh from India 41:55 41 minutes, 55 seconds and is there any uh like I think last time I spoke with Alex he mentioned about a little drag in the filtration 42:02 42 minutes, 2 seconds and drying segment. So are there any issues that we're facing in the Europe market? 42:08 42 minutes, 8 seconds So Europe again generally is slow but again there are very large projects in the pipeline. So for example there is a 42:16 42 minutes, 16 seconds once in a generation investment of ro that is going on in Switzerland. Uh that obviously could mean more business for 42:24 42 minutes, 24 seconds the group. So there are some projects coming in in pharma. Uh chemical is of course slow. uh chemical is something 42:31 42 minutes, 31 seconds that is remains slow and we don't see too much excitement on that uh in India 42:40 42 minutes, 40 seconds and at least in in India and maybe also in Europe now peptides is becoming another area where more and more people 42:47 42 minutes, 47 seconds are looking at adding investment. So uh in the US Eli Liy uh in Europe Nova and then of course in India quite a few pha 42:56 42 minutes, 56 seconds players are now getting into peptides right so that could be uh a nice uh area for us to get into as well. 43:05 43 minutes, 5 seconds Thank you. The next question is from the line of Pravin Kumar from Equitas Capital. Please go ahead. Yeah. Hi. Uh thanks for the opportunity. 43:14 43 minutes, 14 seconds I had a couple of questions. The first one was on the international business. 43:17 43 minutes, 17 seconds uh again if I look at it on a 9-month basis and uh split it into services versus technologies uh based on a 43:24 43 minutes, 24 seconds disclosure so on a 9-month basis it still still looks like that uh on a y basis the services part is still you 43:32 43 minutes, 32 seconds know the growth rate on the services part is where it is highest followed by technologies right so just wanted to understand all all these businesses non-traditional businesses you're 43:41 43 minutes, 41 seconds talking about mixing uh heavy engineering etc largely those revenues you will be classified under the technology segment whereas services 43:48 43 minutes, 48 seconds probably would be your old G kind of business right so I just wanted to understand despite the slowdown in G and despite all these other segments doing 43:57 43 minutes, 57 seconds well for you uh on a 9month basis why do we still see services being you know the highest growth segment versus uh the 44:05 44 minutes, 5 seconds something like a technology that that's my first question uh I'm not sure if I understood 44:14 44 minutes, 14 seconds correctly you're saying the international business 9 months comparable period. You think services is growing the fastest. No, it's not. No, 44:21 44 minutes, 21 seconds no, no, no, no. Services is more or less it's flat. It's one of the growth areas that we expect on a global level. We 44:29 44 minutes, 29 seconds also expect there something to come and we always said from from India and China because their services is under represented. This we did not achieve so 44:37 44 minutes, 37 seconds far. So we don't see it. And in I think general view on services is that services was was slow but last quarter 44:46 44 minutes, 46 seconds and now as well services have seen some improvement especially in the US. So I think services will come back to the uh 44:55 44 minutes, 55 seconds normal levels uh especially in the western US and European markets. 45:01 45 minutes, 1 second uh because if I look if I look at your numbers right if I look at the uh 9 month numbers on services it adds up to 45:10 45 minutes, 10 seconds around 699 crores for 9 month FI26 uh the comparable number for 9 month 45:17 45 minutes, 17 seconds FI25 seems to be 647 that that's like a 8% kind of a growth rate uh versus on technologies 45:26 45 minutes, 26 seconds uh 884 last year has grown grown to uh 950 So that's like a seven odd% kind of growth rate. So that that was my I mean 45:34 45 minutes, 34 seconds unless my numbers are off. Uh that that was the So your numbers seem okay. So both growth rates are around 8 10% right? 45:44 45 minutes, 44 seconds That's what you're saying. 45:45 45 minutes, 45 seconds Like services is 8.1 services is 8.1 the other is 7.4. That was the question. Yeah. Yeah. So so what are you saying now? 45:54 45 minutes, 54 seconds What is the question that uh so consolidated you have 800 for the 9 months versus 699 correct for consolidation? 46:03 46 minutes, 3 seconds Yes. Yes. So my my question was that services I'm sorry 14%. 46:13 46 minutes, 13 seconds Uh I think we can take it offline. We'll let me get back. 46:17 46 minutes, 17 seconds Yeah. Just take it offline. We'll be happy to kind of give you the breakup so so that then you can clarify. has not 46:25 46 minutes, 25 seconds services we do not see the growth so far in India neither in China this we say otherwise services I think it's a good 46:34 46 minutes, 34 seconds performance understood understood and uh my second question was on the margins uh I think earlier you were saying that uh you you 46:42 46 minutes, 42 seconds aspired to get to the 16 to 18% kind of a uh aida margin trajectory uh so just wanted to understand from your from your 46:49 46 minutes, 49 seconds current levels to get to that level how much of that would in terms of getting more operational efficiencies versus uh how much would be 46:58 46 minutes, 58 seconds driven by you know growth rates and what kind of growth rates would you need you know to get to that level. 47:06 47 minutes, 6 seconds Put it this way first let's start with this non-glass line business. So this is a ceiling this is a mixing it's already 47:13 47 minutes, 13 seconds trading at significantly above average margin that we have this businesses we also expect to grow faster. Therefore, 47:21 47 minutes, 21 seconds just due to a higher share of this business, we expect a margin improvement. On the other side, we have especially the glass line business where 47:30 47 minutes, 30 seconds currently we are not doing as good as we want to and we are also not achieving the margin that we want to. This is due 47:37 47 minutes, 37 seconds to several effects. First, we have some under significantly underperforming 47:44 47 minutes, 44 seconds units at least lossmaking units. We already explained Germany. We also said um China and we have to turn these 47:54 47 minutes, 54 seconds around. So therefore we already started with the restructuring measures. We had this cost-saving program in Germany. We 48:01 48 minutes, 1 second talked about we also what we could do in China and by turning this around we will 48:08 48 minutes, 8 seconds also bring the currently low EIDA margins of our glass line business up 48:15 48 minutes, 15 seconds again. And in combination this will result in this mentioned 16 to 18% 48:23 48 minutes, 23 seconds target range on one side taking. Okay, you'll cover it. Perfect. 48:32 48 minutes, 32 seconds Understood. Thank you. Thanks for the response. 48:35 48 minutes, 35 seconds Thank you. The next question is from the line of Bhavik Sha from Envir Capital. Please go ahead. 48:41 48 minutes, 41 seconds Yeah. Hello. So my first question is can you just help me with the split of the order backlog on order inflow in in terms of India and international 48:51 48 minutes, 51 seconds for this quarter about 290 crores was from India and the balance was from international approximately this is for inflow rate. 49:02 49 minutes, 2 seconds Yeah. Yeah. This is for order intake. Yes. And the backlog would be divided. 49:10 49 minutes, 10 seconds The backlog is 550 for for India and um the balance 160 49:18 49 minutes, 18 seconds something for um 1,00 sorry 1,600 um for for the international 49:25 49 minutes, 25 seconds okay uh and so regarding this write off of exceptional items which were taken the uh they have removed 49:33 49 minutes, 33 seconds I'm sorry to interrupt you Mr. Sha can you speak a bit louder? You're sounding very low. Yeah. Is this better? Yes, please go ahead. 49:41 49 minutes, 41 seconds Yeah. 49:41 49 minutes, 41 seconds My second question is regarding the uh German unit and employee hit which we have taken. So does that mean our structurally employee cost come down 49:49 49 minutes, 49 seconds from next quarter onwards? If yes, how much is that reduction which we are seeing and in last three quarters back or something we took a similar hit in a 49:58 49 minutes, 58 seconds UK business and then we took a impairment. So are we expecting some impairment also coming in the Germany unit? 50:07 50 minutes, 7 seconds No. In fact the key difference between the the um restructuring program and the in the UK and in Germany was that in the 50:14 50 minutes, 14 seconds UK we really stopped the OE glass line manufacturing. So we also had to wipe off there the inventory some assets 50:22 50 minutes, 22 seconds which were related to this without any cash impact. I think this is also what we said um a year ago that there were 50:29 50 minutes, 29 seconds only some um resulted in a cash outflow in Germany. We still have the operations. We just s these down and 50:38 50 minutes, 38 seconds therefore we took out or will also still take out some people. Therefore um we do not have the right off of inventories or 50:47 50 minutes, 47 seconds impairment of assets. So it's slightly different and the cost improvement in Germany it will phase in over two years 50:56 50 minutes, 56 seconds because we said we just started with phase one which is um 14 um people fds 51:05 51 minutes, 5 seconds um and we expect there already an improvement in in the result of roughly 15 to 70 cr. 51:17 51 minutes, 17 seconds Okay. So my quarterly 15 to 17 cr for the financial year starting next year. 51:23 51 minutes, 23 seconds Okay. So 15 to 17 cr is the entire year savings in FI27. Right. 51:28 51 minutes, 28 seconds This is a full year saving and then we will still um some further FTEES will phase out in the next financial year and 51:37 51 minutes, 37 seconds the full year impact that we expect due to them leaving will be in the area of 25 crores. 51:45 51 minutes, 45 seconds So total we are about 40 cross in. 51:49 51 minutes, 49 seconds Yeah. So this is a big downsizing for us. Nearly 30% of the cost is being uh 51:55 51 minutes, 55 seconds removed 25 to 30% is being kind of uh taken off over a two-year period. Right? 52:01 52 minutes, 1 second So it is a restructuring of a large size and it definitely will impact us positively going forward. 52:10 52 minutes, 10 seconds Understood. Answer request to please rejoin the queue for A427. 52:17 52 minutes, 17 seconds Sorry now I can familiar. Hello. 52:27 52 minutes, 27 seconds Sorry. Can you repeat or go to the next? Yeah. 52:30 52 minutes, 30 seconds Uh can you just help me with the guidance for F27 in terms of growth rates in India and international business? 52:37 52 minutes, 37 seconds So I think just wait a little bit. 52:39 52 minutes, 39 seconds Bavic we will let us get into this quarter a little bit in detail so we know what our starting backlog is let the order intake continue and we would 52:49 52 minutes, 49 seconds happy to kind of give some broad level guidance maybe uh in the next quarter Mr. Disha may be requested to please 52:56 52 minutes, 56 seconds rejoin the queue. We have participants waiting for the talk. Thank you. The next question is from the line of Rohiti from Progressive Shares. Please go ahead. 53:05 53 minutes, 5 seconds Uh hi Tarak. Hi Alex. Uh two questions probably two parts to that. Uh first one uh that we see uh that you are building 53:12 53 minutes, 12 seconds the order book for H uh with all these opportunities coming from oil and gas, nuclear or maybe green hydrogen. Uh my question is uh that are we already uh 53:22 53 minutes, 22 seconds insulated contractually for these uh projects or do we see uh volume margin fluctuation or risk associated to that? 53:33 53 minutes, 33 seconds So I think we are pretty well insulated. 53:36 53 minutes, 36 seconds So these are fixed price contracts with some amount of escalation clauses if material prices were to change. They are 53:43 53 minutes, 43 seconds also payments are milestone based. So we don't see any significant uh you know kind of risk but of course the sizes of 53:52 53 minutes, 52 seconds these projects are larger. So we need to be efficient in terms of ordering procuring material manufacturing execution quality. So it's like any 54:00 54 minutes other business just the the size and the scale of these orders are bigger. So of course from a project management perspective we have to be uh completely 54:09 54 minutes, 9 seconds on our toes to make sure that we execute these projects uh very well. 54:13 54 minutes, 13 seconds Mhm. Do you think uh that you'll be going aggressively after the market share in H division? 54:21 54 minutes, 21 seconds So H is a business that is a really large business and I think there's enough of space for at least quite a few 54:30 54 minutes, 30 seconds large companies. You know in our niche little space we have a group of companies that we normally compete with and there are companies above us and uh 54:38 54 minutes, 38 seconds also kind of u be below us right so the idea is to move up again over you know in terms of value chain to make sure 54:45 54 minutes, 45 seconds that over time in terms of material in terms of thicknesses in terms of weight in terms of complexity we can take 54:53 54 minutes, 53 seconds better stuff and higher uh stuff as well right so that is the push and over time as you would have seen we would have started maybe when we started as 55:00 55 minutes business 3 years ago we were 90% for the material handled would have been carbon steel today that carbon steel has come down to 40% where we have stainless 55:09 55 minutes, 9 seconds steel we have helloid we have titanium we have incel so all these materials coming in so from the same capacity you can get much more revenue if you can 55:17 55 minutes, 17 seconds increase uh or change the material right so that's something that we're working on and again here the export market is very lucrative as well so uh you know 55:27 55 minutes, 27 seconds the middle east Southeast Asia you know Saudi Arabia are all markets that we can cater to and one of the strategies to 55:34 55 minutes, 34 seconds really build our presence and penetrate those markets quite well. Uh Tar uh uh congress on this uh big order that was 55:43 55 minutes, 43 seconds shipped out uh for some oil refinery via kilo which was I think 48 m or so. uh but but the thing is that uh going 55:51 55 minutes, 51 seconds forward uh do do isn't that uh in the next uh two and a half three years uh H alone can be somewhere like 1,300 or 55:59 55 minutes, 59 seconds 1,500 cr kind of a uh order book for you. 56:05 56 minutes, 5 seconds So see it's a growth vertical for us but again like I said we don't want to grow and grow into markets where the margins are tough and the competition is strong. 56:14 56 minutes, 14 seconds Let's find a nice niche for us. There are quite a few different industries that we can cater to in this market. So between this we find some place to play. 56:23 56 minutes, 23 seconds You know of course growth is a challenge in our traditional markets. So we have to find growth from new markets. New markets such as nuclear, oil and gas, 56:31 56 minutes, 31 seconds defense, metals, minerals and stuff like that. So we are trying some of them will we will succeed some of them won't grow as fast as we would like. But I think that uh we have created a strong brand. 56:43 56 minutes, 43 seconds We are a well-known player now in heavy engineering. So we are considered as one of the premium players here. We are no 56:50 56 minutes, 50 seconds longer um you know somebody who's trying to get in. We are already in. We've got our foot in the door. We are approved by most of these u you know government 56:59 56 minutes, 59 seconds companies EIL and also big uh big big uh multinationals as well. So the idea is to grow the business but grow it profitably. 57:08 57 minutes, 8 seconds My last questions uh related to Poland and the recent developments there. If you can uh take us through that uh uh what is the size of this plant or maybe 57:17 57 minutes, 17 seconds there is a free land available and what could be the estimated uh peak revenue that you get uh because uh of of what I 57:25 57 minutes, 25 seconds read that of of what I read uh that there is another yeah the Poland property 57:32 57 minutes, 32 seconds yeah so the Poland facility has just started about 3 to four months ago so we are already producing at this kite uh at this site which is helping our Swiss and 57:41 57 minutes, 41 seconds rent subsidiaries So about 80% of the business that Poland does today is for these two sites. They booked out. So all 57:48 57 minutes, 48 seconds the new orders that have come in have been now uh outsourced to Poland. So that's something that's ongoing. We do 57:55 57 minutes, 55 seconds want to invest and we do plan to invest in Poland for another facility to increase our uh manufacturing footprint 58:03 58 minutes, 3 seconds there because then we can really use Poland to even start making maybe you know stainless steel vessels or helloy vessels for agitator businesses and 58:12 58 minutes, 12 seconds things like that right so Poland has turned out to be a good option for us and we need to kind of build that and reduce cost in high cost countries like Switzerland uh Germany and France. 58:24 58 minutes, 24 seconds Thank you ladies and gentlemen. This will be the last question for today which is from the line of Mulesh Pandi from Insightful Investment Managers. Please go ahead. 58:34 58 minutes, 34 seconds Yeah. Hi, thank you for the opportunity. 58:37 58 minutes, 37 seconds Uh so I have two questions. First one is given the substantial increase in the order backlog as well as we seeing 58:44 58 minutes, 44 seconds healthy continuing order inflows. Should we now expect a higher revenue growth of let's say uh 15 to 20% for the next 2 to 3 years? 58:54 58 minutes, 54 seconds It depends on who you ask. If you ask Alex, he would say no. If you ask me, I might say yes. So, see the idea is I 59:02 59 minutes, 2 seconds mean, so jokes aside, I think it's simple, right? A company like ours, if you had to judge or you had to base your views and your future projections on a 59:11 59 minutes, 11 seconds company like ours, a backlog is a very strong metrics of that performance. 59:15 59 minutes, 15 seconds Okay. We are one of the only companies in India that puts out backlog data and we've been putting it out for the last 59:22 59 minutes, 22 seconds maybe I don't know 12 15 quarters right most of our peers do not share this data they share they talk about this data in 59:29 59 minutes, 29 seconds terms of months in terms of I don't know right so we are upfront and honest because this is something that you can't 59:37 59 minutes, 37 seconds uh fool I mean you can't I mean this is clear numbers right so having a strong backlog is definitely a sign of future 59:44 59 minutes, 44 seconds revenue and future growth If that backlog is big enough in our case the backlog is 30% 27 30% higher which is 59:51 59 minutes, 51 seconds good but it still means that we have to book orders for Q4 we need to ship out in Q4. Q4 should be a good month in 59:59 59 minutes, 59 seconds terms of revenue and shipment. That means the backlog will get depleted. But we are quite confident that we have and we have already enough of opportunity. 1:00:08 1 hour, 8 seconds Some of them have already been booked in this Q4 to help us have a stronger backlog for next year. But it's clear across the organization. Everybody knows 1:00:17 1 hour, 17 seconds that order intake is critical. Order intake for Q4 becomes even more critical because that means you start the year off with a much stronger backlog, right? 1:00:26 1 hour, 26 seconds And for a manufacturing company like us that is really the name of the game that is the most important part of our business. 1:00:34 1 hour, 34 seconds Yeah. Right. So and uh with so much being done you know on the costsaving initiatives like we closed two plants we are moving a facility from Switzerland 1:00:43 1 hour, 43 seconds to Poland and we also have let off some people in Germany and uh the other initiatives that you mentioned in your 1:00:50 1 hour, 50 seconds opening remarks. for all these uh initiatives should lead to much better margin for the coming quarters. Is that a fair assumption and also could you share the quantum of the same? 1:01:02 1 hour, 1 minute, 2 seconds So, so again I would just say if you believe in the story I would say trust the process. We are still going through 1:01:09 1 hour, 1 minute, 9 seconds a very tough economic situation. you know it doesn't look as bad because we've done so much stuff and uh some of 1:01:18 1 hour, 1 minute, 18 seconds these benefits have really helped us like these large orders from non-traditional industries if they had not come in we would have been 30% lower 1:01:26 1 hour, 1 minute, 26 seconds in terms of revenue for this year right so we have done well I don't want to speak too much about this but it is a 1:01:33 1 hour, 1 minute, 33 seconds clear strategy it's something that we will continue to do and of course the cost strategy it's so cost is something we control right so cost is something 1:01:42 1 hour, 1 minute, 42 seconds that as a company yes you know obviously in the past things have been different after COVID everybody was booming order intake was great all the factories were 1:01:51 1 hour, 1 minute, 51 seconds fulfilled to capacity but today it's a different situation and that actually forces us to take some tough decisions which is good because it makes us 1:01:59 1 hour, 1 minute, 59 seconds stronger for the future and I think that's the most important thing that we will be a stronger company coming out of this last two years it's a tough 1:02:07 1 hour, 2 minutes, 7 seconds situation it's not the greatest time to you know obviously the the last maybe 24 months the numbers 1:02:14 1 hour, 2 minutes, 14 seconds have not been great. It's been up and down but yeah a lot of work is going in and hopefully some of these things will kind of turn out to be the right things 1:02:22 1 hour, 2 minutes, 22 seconds and hopefully the numbers will reflect those improvements. 1:02:26 1 hour, 2 minutes, 26 seconds I I think maybe a little bit from from my finance perspective we have a really 1:02:33 1 hour, 2 minutes, 33 seconds solid good backlog to start the next financial year. It's 27% up versus last year. However, please do not expect that 1:02:43 1 hour, 2 minutes, 43 seconds the next quarter we grow by 27%. The 27% increase is also coming from other 1:02:50 1 hour, 2 minutes, 50 seconds businesses. Partly the system business, it will not directly convert in revenue. 1:02:55 1 hour, 2 minutes, 55 seconds On the other side, what you mentioned regarding the cost improvements, I think we have done our homework. We have 1:03:02 1 hour, 3 minutes, 2 seconds considered the current situation. We reduced our cost significantly. we will still see an improvement. Nevertheless, 1:03:10 1 hour, 3 minutes, 10 seconds there are still some areas where we are not doing well and there are still uncertainty and where we still have also 1:03:17 1 hour, 3 minutes, 17 seconds not the evida margin that we want to have in the next quarters. So of course maybe I'm a finance guy a 1:03:25 1 hour, 3 minutes, 25 seconds little bit more prudent and not over overcome with the um let me say expectation due to the stic um strong 1:03:35 1 hour, 3 minutes, 35 seconds increase in order intake and backlog we will improve but constantly 1:03:44 1 hour, 3 minutes, 44 seconds yeah so I think with that I think uh I'll hand over the call back to the moderator. 1:03:50 1 hour, 3 minutes, 50 seconds Thank you very much ladies and gentlemen. That was the last question for today. I would now like to hand the conference over to the management for closing comments. 1:04:01 1 hour, 4 minutes, 1 second Thank you Ruja. Thank you everyone for joining us today. It was a pleasure interacting with all of you and we look forward to many such interactions during 1:04:09 1 hour, 4 minutes, 9 seconds the course of the year. Take care and see you soon. 1:04:14 1 hour, 4 minutes, 14 seconds Thank you lisa and gentlemen on behalf of JM Fodler Limited that concludes this conference. Thank you for joining us and you may now disconnect your lines.