IKIO Technologies Ltd — Q4 FY26

IKIO Technologies Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=y4FPpGOCDkI Published: 9 days ago

0:01 1 second Ladies and gentlemen, good day and welcome to the IQ Technologies Limited Q4 FY26 earnings conference call. As a 0:10 10 seconds reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation 0:17 17 seconds concludes. Should you need assistance during the conference call, please signal an operator by pressing start and zero on your touchstone phone. Please 0:25 25 seconds note that this conference is being recorded. I now hand the conference over to Mrs. Surya Salman from Stellar Investor relation advisers. Thank you and over to you sir. 0:37 37 seconds Thank you. Good afternoon everyone and thank you for joining us today. We have with us today the senior management team of IQ Technologies Limited. Mr. Hardep Singh chairman and managing director Mr. 0:50 50 seconds Sanjit Singh full-time director CEO and CFO who will represent IQ Technologies Limited on the call. The management will 0:59 59 seconds be sharing the key operating and financial highlights for the quarter and full year ended 31st March 2026 followed 1:06 1 minute, 6 seconds by a question and answer session. Please note this call may contain some of the forward-looking statements which are completely based upon the company's 1:14 1 minute, 14 seconds beliefs, opinions and expectations as of today. These statements are not a guarantee of the company's future performance and involves unforeseen risk 1:23 1 minute, 23 seconds and uncertaintities. The company also undertakes no obligation to update any forward-looking statement to reflect developments that occur after a 1:32 1 minute, 32 seconds statement is made. I now hand over the conference to Mr. Hat Singh. Thank you and over to you sir. 1:46 1 minute, 46 seconds Sorry to interrupt. This is the operator. We are unable to hear management. Hello. 1:51 1 minute, 51 seconds Yes, please go ahead. Good afternoon everyone. Uh thank you all for joining the Q4 and FY26 earning calls. 2:01 2 minutes, 1 second Uh our presentation has been uploaded on the stock exchange and I hope you have 2:08 2 minutes, 8 seconds had a chance to look at it. I would like to briefly highlight a few key developments before handing over the 2:16 2 minutes, 16 seconds call to Mr. Sanche Singh for further detail. 2:20 2 minutes, 20 seconds I would like to I I would like to start the IQ uh transitioning from lighting to integrated technology solutions. 2:30 2 minutes, 30 seconds First continuous effort to expand our portfolio beyond lighting. We have evolved from our core home lighting 2:38 2 minutes, 38 seconds segment to move diversified o offering across home and commercial lighting herable and variables energy solutions 2:47 2 minutes, 47 seconds electronic components and automotive lighting supported by our strong R&D and ODM capabilities. 2:56 2 minutes, 56 seconds Secondly [clears throat] uh second an aim to globalize our business model. We 3:02 3 minutes, 2 seconds have expand our footprints to over approximately 20 countries with strong traction in overseas market. 3:12 3 minutes, 12 seconds Revenue from outside India grew by 53% to rupees 110 cr with contribution 3:19 3 minutes, 19 seconds increasing in 18% in FI26 from 50% in FI25. 3:28 3 minutes, 28 seconds Third, to scale our manufacturing capabilities, we are enhancing capacity by approximately five lakh square feet 3:36 3 minutes, 36 seconds through a green field project funded by IPO proceeds to support new age products, exports, backward integration, 3:43 3 minutes, 43 seconds private efficiencies and margins with block one of two lakh square ft commercialized in 3:53 3 minutes, 53 seconds May 24, 24 and block second a similar sites also expected to be commercialized by the end of Q1 FI27. 4:04 4 minutes, 4 seconds To conclude, our vision is to be preferred manufacturing and solution providing for lighting and energy 4:12 4 minutes, 12 seconds efficient products, electronic uh components, hardware component in the global marketplace. Now 4:20 4 minutes, 20 seconds I will request Mr. Sajjit Singh to provide his thoughts on the quarter and financial year. Thank you. 4:30 4 minutes, 30 seconds Thank you. Let me briefly highlight the key strategic initiatives undertaken during the quarter and full year to 4:38 4 minutes, 38 seconds accelerate growth along with the strong progress achieved. 4:43 4 minutes, 43 seconds In line with our strategy of diversifying the revenue mix, our other business contribution increased to 77% 4:51 4 minutes, 51 seconds in quarter 4 FY26 from 66% in quarter 4 FY25 4:58 4 minutes, 58 seconds and to 71% in FY26 from 57% in FY25. 5:05 5 minutes, 5 seconds This was supported by strong growth in the segment with revenues rising 72% 5:12 5 minutes, 12 seconds yearonear and 26% quarteron quarter to rupees 127 crores in quarter 4 FY26 5:21 5 minutes, 21 seconds and up 53% to rupees 426 crores for full year 2026 5:29 5 minutes, 29 seconds revenue from outside India increased to rups 110 crores up 53% % yearonear in 5:36 5 minutes, 36 seconds FY26 driven by sustained growth supported by our diversification in the Middle East market despite a slowdown in the US amid tariff uncertaintity. 5:48 5 minutes, 48 seconds Our heritable and variable segment continue continued to maintain strong momentum during the period driven by new client orders. 5:58 5 minutes, 58 seconds On the marketing and distribution front, we acquired an 88% stake in Gravis Tech to strengthen our go-to market 6:05 6 minutes, 5 seconds capabilities, leveraging experienced leadership to expand reach with minimal capital outlay. 6:12 6 minutes, 12 seconds Additionally, the heritables and variable segment has been brought directly under the parent company from end of quarter 1 FY27 6:22 6 minutes, 22 seconds to streamline operations, improve efficiency and drive growth in our consumer electronics business. 6:30 6 minutes, 30 seconds Now coming to our financial performance for quarter 4 and FY26. 6:36 6 minutes, 36 seconds We sustained strong growth momentum in quarter 4 FY26 with revenue increasing 6:42 6 minutes, 42 seconds 47% yearonear and 14% quarteron quarter to rupees 165 crores. EPIA stood at 6:50 6 minutes, 50 seconds rupees 26 crores up 19% quarteron quarter versus rupees 6 cr in 6:59 6 minutes, 59 seconds quarter 4 FY25 with margins expanding to approximately 16%. 7:07 7 minutes, 7 seconds Profitability improved with PAT at rupees 18 crores up 63% quarteron 7:14 7 minutes, 14 seconds quarter translating into a PAT margin of approximately 11%. 7:20 7 minutes, 20 seconds Cash PAT stood at rupees 26 crores up 38% quarteron quarter versus 5 crores in quarter 4 FY25. 7:30 7 minutes, 30 seconds For FY26, revenue stood at rupees 595 crores, reflecting a robust 23% 7:38 7 minutes, 38 seconds year-on-year growth. EITA stood at rupees 78 crores, up 29% yearonear with margins expanding to approximately 13%. 7:50 7 minutes, 50 seconds PAT stood at rupees 42 crores uh which is up 28% yearonear with a margin of 7:57 7 minutes, 57 seconds around 7% while cash fat stood at rupees 72 crores also up 28% yearonear 8:06 8 minutes, 6 seconds as we scale into the next phase of growth we have frontloaded certain strategic expenses which remain elevated 8:15 8 minutes, 15 seconds and expect them to normalize with scale and operating leverage In closing, our continued focus on 8:23 8 minutes, 23 seconds diversification, global expansion and strategic investments positions us strongly for sustained growth. With 8:31 8 minutes, 31 seconds that, we conclude the presentation and request the moderator to open the floor for Q&A. 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 star and one on the touchstone 8:48 8 minutes, 48 seconds telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are 8:55 8 minutes, 55 seconds requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question ceue assembles. 9:16 9 minutes, 16 seconds Participants to ask a question please press star and one now. 9:33 9 minutes, 33 seconds Anyone who wishes to ask a question, please press star and one. 9:45 9 minutes, 45 seconds The first question is from the line of Pilia from Gir Capital. Please go ahead. 9:52 9 minutes, 52 seconds Yeah. Hi. Uh, thanks for the opportunity. Uh, so I just wanted to know what's your head count on console basis. 10:01 10 minutes, 1 second So right currently the headcount including the uh the staff and labor it is currently uh 2500 plus all factories put together. 10:11 10 minutes, 11 seconds Okay. And I believe at your time it was uh 1,600, right? 10:18 10 minutes, 18 seconds Uh approximately Yeah, approximately. 10:22 10 minutes, 22 seconds Okay. Uh sir, just one request. I think uh this is a key monitorable. So if we can include this number in our annual 10:29 10 minutes, 29 seconds report as well as in quarterly uh presentation it would be worth to track uh this number as uh uh one can also get 10:38 10 minutes, 38 seconds the idea of this uh what's the utilization level? 10:44 10 minutes, 44 seconds So currently I mean it uh you know every time this question is put up I always tell you know uh uh you know the people 10:51 10 minutes, 51 seconds that it's very hard to comment on the utiliz utilization level on a console basis because we have multiple verticals 10:59 10 minutes, 59 seconds multiple product lines and uh some of the verticals are or product lines are very very new. So that is why you know 11:07 11 minutes, 7 seconds that onboarding of expenses uh which has been happening since the past couple of years as you can now see the trajectory 11:14 11 minutes, 14 seconds uh of margins you know the aeta margins have been constantly uh in increasing uh quarter on quarter since the last I 11:21 11 minutes, 21 seconds would say maybe five uh four or five quarters that is because of the efficiencies that we are achieving. We are still not there uh in terms of where 11:30 11 minutes, 30 seconds we intend to in terms of the efficiencies because like I said you know a lot of the verticals are very new uh like automotive lighting which we 11:39 11 minutes, 39 seconds started uh you know a few months back that is relatively very new uh herables variables that we started we have now achieved a certain level of efficiencies 11:47 11 minutes, 47 seconds in that as the numbers are constantly uh you know progressing and there's been uh there's been good growth and traction uh within that uh segment. 11:57 11 minutes, 57 seconds So I think to answer that question maybe I would invite you to come to visit our facility. 12:04 12 minutes, 4 seconds uh so the mature units are working at uh good efficiency levels uh close to around uh anywhere uh you know if I have 12:13 12 minutes, 13 seconds to give a number vaguely around 70 uh% uh plus but the new ones are relatively lower in terms of the efficiencies uh 12:22 12 minutes, 22 seconds that is uh something that automatically with volumes you know it will uh rise 12:29 12 minutes, 29 seconds uh okay uh surely I'll explain little bit more. So because now the all the 12:36 12 minutes, 36 seconds first like wherever we have entered into the new ventures the all the first lots are already in the market already went 12:43 12 minutes, 43 seconds to the customers they went to the market and they are getting the market reports and feedback for feedbacks we will have the like if we have the we should have 12:53 12 minutes, 53 seconds to get that uh for that we need infa and team so that is why we are taking the 13:00 13 minutes precautions Yeah, as you said you have a multiple uh 13:07 13 minutes, 7 seconds uh uh lines of business now. So how is the capacity dedicated to each line or 13:14 13 minutes, 14 seconds is it very funible uh that you can shift from uh say uh home lighting to sofa products. 13:24 13 minutes, 24 seconds Yeah, that is why we are electronics and hardware. So we can like I'll give you the example automo uh lamp can make the 13:32 13 minutes, 32 seconds normal LED line the same line can do that and the electronic aesthetic lines can do any other electronic product. So 13:40 13 minutes, 40 seconds these are interchangeable. So wherever we will have the we can take the leverage of that uh uh those equipment 13:48 13 minutes, 48 seconds team and the cost and how we have designed the entire system is that because we have multiple units we have you know five uh uh 13:56 13 minutes, 56 seconds factories. So in each factory, each factory has their own uh set of verticals and responsibilities. And the 14:04 14 minutes, 4 seconds way we manage those uh product categories or verticals is to make sure that it is uh you know uh in terms of 14:13 14 minutes, 13 seconds efficiencies also and in terms of uh whether if we have to change a product from uh you know add a product to a 14:20 14 minutes, 20 seconds line. So it is all uh designed as per that only. So these multiple factories help us in uh making sure that uh you 14:28 14 minutes, 28 seconds know a category of product which is similar to what we are doing in one factory we add on to that factory only and that is how we've been progressing. 14:37 14 minutes, 37 seconds Yeah. Uh uh that explains well. Uh sir on another question uh uh 14:51 14 minutes, 51 seconds uh uh Mr. We are unable to hear you sir. 14:55 14 minutes, 55 seconds Yeah sorry I I got muted. Uh sir uh question uh is on uh how do I put it? uh 15:04 15 minutes, 4 seconds uh I said uh uh I I believe uh you have some uh long-term contracts or uh uh 15:11 15 minutes, 11 seconds whenever you get the contract to uh uh produce uh it would be multi- months or something. So do you have a order book 15:19 15 minutes, 19 seconds kind of a situation uh if you can share something on that or how do we uh foresee the revenue trajectory for the company? 15:28 15 minutes, 28 seconds So we don't have a order book kind of uh uh you know situation with our customers. It is more to do with the 15:36 15 minutes, 36 seconds planning uh that we get and you know our US has always been that we are ODMs. So we design and manufacture. So whenever 15:45 15 minutes, 45 seconds we design uh a new product a new category or let's say a completely new vertical also whenever we are in the design development phase for any 15:53 15 minutes, 53 seconds customer. So before we enter uh uh you know that particular category before investing our time uh development time 16:02 16 minutes, 2 seconds and all of our energies we always understand what is the feasibility of that category what are the you know the 16:09 16 minutes, 9 seconds uh a basic idea on uh the aida margins uh what aida margins we'll be able to earn and what is the value addition that 16:16 16 minutes, 16 seconds we'll be able to do in that particular product segment or category so that the customer uh stays with us for a very long period of time. So these are some 16:25 16 minutes, 25 seconds of the factors which we uh initially investigate and then we make sure and obviously we do get a plan from the 16:32 16 minutes, 32 seconds customer. What is the outlook of let's say a new product or a category? What are the numbers that they expect from us 16:39 16 minutes, 39 seconds you know in terms of productions volumes and that is how we plan the space lines development time all all of that then 16:48 16 minutes, 48 seconds goes into uh you know uh uh your lifting clay. 16:53 16 minutes, 53 seconds Sure. But I believe your ODM business is ma majorly on home lighting basis right 17:00 17 minutes or is the other business also have ODM aspect on it? 17:04 17 minutes, 4 seconds Yeah. Yeah. We are now we are from ODM lighting to we are going enter into ODM automo lighting. We are entering to OD 17:13 17 minutes, 13 seconds ODM services for company like Honeywell for their public address system their 17:19 17 minutes, 19 seconds sensors etc. And we are uh right now we have started with the 17:26 17 minutes, 26 seconds Indian market we are talking uh like to how to expand that our uh capabilities 17:33 17 minutes, 33 seconds of that partners. So if you talk of our ODM capability, so not just the home lighting that is ODM, apart from home 17:41 17 minutes, 41 seconds lighting, our commercial lighting, uh the refrigeration lighting and electronics, automotive lighting like Hardep just mentioned, herable and 17:50 17 minutes, 50 seconds variable segment uh most of I mean heritable and variable when we started it was all OEM to begin with but now 17:57 17 minutes, 57 seconds slowly and steadily we are converting the products to uh ODM that that was our you know strategy. Y when we started 18:05 18 minutes, 5 seconds lighting uh home lighting also around 15 years back uh so same strategy we are applying to uh this segment as well so 18:12 18 minutes, 12 seconds if I have to put a number then I I guess uh just a vague idea around 80 to 85% of 18:19 18 minutes, 19 seconds uh what we do are uh in in that sense you know ODM products sir what kind of investment is needed to 18:28 18 minutes, 28 seconds uh develop this uh ODM for a particular category or a new 18:35 18 minutes, 35 seconds So whatever we've uh developed as of now so the infrastructure that we we already 18:42 18 minutes, 42 seconds had uh you know uh before the IPO also and post IPO whatever we have expanded uh so we are utilizing the same 18:50 18 minutes, 50 seconds infrastructure for different uh uh verticals and product categories. So we are very mindful uh and cautious 18:58 18 minutes, 58 seconds whenever we decide to develop a new uh uh category uh of product which we are not doing and uh the basic uh I would 19:07 19 minutes, 7 seconds say in uh in uh uh uh intention or the reason why we want to do or uh yes or no depends on our existing infrastructure. 19:18 19 minutes, 18 seconds So if we feel that our uh let's say 80 to 90% of the existing infrastructure is capable of handling that uh new 19:25 19 minutes, 25 seconds category. So we eventually uh you know uh and if the margins are uh decent enough we enter that particular vertical. So that is how we've been uh 19:34 19 minutes, 34 seconds categorizing the products and selecting the verticals that we are doing. So for us uh uh value addition uh utilization 19:43 19 minutes, 43 seconds of our existing infrastructure which we have created over the past 10 15 years uh and a bit margins are the main 19:51 19 minutes, 51 seconds driving factors when we select our vertical. Sorry to interrupt. May we request Mr. 19:57 19 minutes, 57 seconds Rates to please retrain the queue. We have participants waiting for the term. Sure. 20:03 20 minutes, 3 seconds Thank you. The next question is from the line of Madhurati from countercyclical investments. Please go ahead. 20:11 20 minutes, 11 seconds Roar. 20:12 20 minutes, 12 seconds I wanted to understand regarding the products where we are the Odium supplier. What would be our market share with the customers? 20:21 20 minutes, 21 seconds Uh like uh uh lighting what we are doing right now like as a ODA partner we are working with all the major brands in 20:30 20 minutes, 30 seconds India. Before we were working with only one brand or we are working with all the like top five brands we have already started with them. So this is the first 20:39 20 minutes, 39 seconds journey we have started with all the new brands and u uh we are focusing to develop more and more products for them 20:47 20 minutes, 47 seconds as well. Secondly, we are into like automo segment. There also we have all three or four major brand. We enter into 20:56 20 minutes, 56 seconds afterm market uh with them like they are all multinational brands and we entered with them uh as a single vendor with 21:04 21 minutes, 4 seconds them and developing the new products for them for the automo uh segment. 21:11 21 minutes, 11 seconds Similarly for uh like the uh our uh other electronic certification they are 21:18 21 minutes, 18 seconds the key players in the industry like we are not uh touching the C or D or E grade customers all we are working with 21:28 21 minutes, 28 seconds maximum with the multinational companies. So you know around the IPO time uh there was a report by Frost and 21:35 21 minutes, 35 seconds Salivan and honestly we also got to know around that time only that uh around 2023 when they did the uh the 21:44 21 minutes, 44 seconds survey we were contributing close to around 23 to 24% of the uh functional 21:51 21 minutes, 51 seconds decorative uh side of the home lighting segment. So you know the down lights and the spotlight that goes into the market 21:59 21 minutes, 59 seconds because uh we supply to you know the the uh the biggest players in the industry. 22:06 22 minutes, 6 seconds So we were indirectly contributing or had the contribution of around 23 to 24% of that uh space in the home home 22:15 22 minutes, 15 seconds lighting segment. Home lighting is uh it's quite a big big segment but I'm talking about the functional decorative uh side where the down lights and 22:22 22 minutes, 22 seconds spotlights come into play. For rest of the verticals, I do not have a percentage uh figure with me. Uh but I all I can say is that in commercial and 22:30 22 minutes, 30 seconds rest, we are one of the largest if not the largest according to me. We are the largest in these two categories as well. 22:36 22 minutes, 36 seconds And the remaining categories are relatively new to talk about you know the market share. Uh but uh definitely herable variable has been growing uh 22:45 22 minutes, 45 seconds steadily and we are quite strong in that particular uh segment too. But like I said, it's too early to talk about percentages for the new verticals. 22:54 22 minutes, 54 seconds And sir, would we be the single source supplier or what would be our customer wallet share uh in these segments? You mentioned that in automotive in some of 23:02 23 minutes, 2 seconds the categories, we are the single source vendors for uh these uh show. It will always help us understand on that. 23:09 23 minutes, 9 seconds Uh we for like either they were importing or they we had a photo. So slowly and slowly like we have done in 23:17 23 minutes, 17 seconds writing of motives in fact because now we have developed a product it is the market we will stay out there in post 23:24 23 minutes, 24 seconds and we will continue see in automotive you know right now there is a transition happening from 23:31 23 minutes, 31 seconds your uh conventional lighting to the LED lights uh so that uh so I think for us 23:38 23 minutes, 38 seconds the timing has been good and we've got the right set of partners uh for this particular market and this This is something uh new that we have started. 23:47 23 minutes, 47 seconds Uh but definitely we see a lot of potential uh in the automotive uh segment going forward. 23:55 23 minutes, 55 seconds I'm sure in other segments like home uh the decorative lighting and all what would be our market share wallet share with the customer. 24:03 24 minutes, 3 seconds So it it varies a lot because you know uh so if I talk of home uh so you know 24:11 24 minutes, 11 seconds historically we've been uh the largest supplier in that c in the in you know in the same personal decorative category 24:18 24 minutes, 18 seconds side to signify uh and we continue to uh have that uh you know status with them 24:25 24 minutes, 25 seconds uh in the home lighting segment and we are developing more uh customers also in the same segment. And when it comes to the other segments like uh 24:34 24 minutes, 34 seconds refrigeration, electronics and you know the commercial lighting. So there whom uh uh whomsoever we are dealing with either we are their uh largest uh 24:43 24 minutes, 43 seconds supplier or in uh a lot of cases we are also the single source as well because we have a diverse uh you know customer 24:51 24 minutes, 51 seconds base especially when it comes to the commercial uh space. So there our customer base is quite high you know 24:58 24 minutes, 58 seconds approximately uh around 200 or more than 200 customers. Uh but all I can say is that uh with the most prominent names in 25:07 25 minutes, 7 seconds the industry we are either their largest supplier or in some cases single source as well. 25:17 25 minutes, 17 seconds So, so I wanted to understand firstly that uh our lighting revenue has uh uh reduced quite a bit in our mix in fluor it's barely 23%. 25:28 25 minutes, 28 seconds Uh so going forward has it bottomed out or lighting mix will further reduce and 25:34 25 minutes, 34 seconds h how about the profitability in lighting versus non-lighting? 25:40 25 minutes, 40 seconds Uh actually uh one thing I want to clarify uh the downward trend that you see right now that is only in the ODM 25:50 25 minutes, 50 seconds home lighting where the concern was for the single customer to you know when we uh I think 3 years back if you look at 25:58 25 minutes, 58 seconds our uh share of revenue from the single customer in home lighting segment that was pretty high that was close to around 26:07 26 minutes, 7 seconds from what I remember I think around 50% and Before that it was around 70% also but if you look at it today there has 26:15 26 minutes, 15 seconds been steady growth uh uh you know the company is doing well in terms of the the top line and also looking at the 26:22 26 minutes, 22 seconds conditions uh geopolitically whatever is happening we are also now in that uh growth trend in terms of the AITA margin 26:29 26 minutes, 29 seconds also. So that downward trend that you see is because of uh one uh reason is 26:36 26 minutes, 36 seconds because of uh you know the uh uh the sales going uh relatively down. So if you look at the numbers from last year 26:44 26 minutes, 44 seconds to this year, there has been a decline also in the sales uh of the in the home lighting segment. But to counter that, we are already adding more and more 26:53 26 minutes, 53 seconds customers because uh you must be aware of uh you know signify going through that joint venture uh and they have now 27:01 27 minutes, 1 second come up with uh another entity. Uh so now we are also adding more customers. 27:07 27 minutes, 7 seconds But if you look at this uh you know the the silver lining uh our other verticals are doing really well and as a result of 27:16 27 minutes, 16 seconds that even with the decline in this particular segment our overall business has been growing steadily 27:23 27 minutes, 23 seconds and that was all you know uh always uh the uh the thought going forward to derisk uh dependency and add more and 27:31 27 minutes, 31 seconds more business verticals customers understood. So for 20 27:39 27 minutes, 39 seconds I will explain you one more thing in we are expanding like we have expanded 27:46 27 minutes, 46 seconds to uh middle east and there we get very good response and you can say in the first year or we gain about more than 50 27:56 27 minutes, 56 seconds uh almost our revenue was tremendous in that I think about 43 cr we have done in the first year so this is how we are 28:03 28 minutes, 3 seconds growing in that part of that part of what also we are entering into commercial and residential high-end residential lighting and that uh again 28:13 28 minutes, 13 seconds in the Indian market also that our instore retail lighting that is also growing like anything that is also very 28:20 28 minutes, 20 seconds going so lighting is a will be major always maybe that one we are that is why 28:28 28 minutes, 28 seconds we are putting another business in our link company to increase the revenue and 28:35 28 minutes, 35 seconds profitability. So we are adding more businesses into that because ODM lighting business will be only with 28:42 28 minutes, 42 seconds dependency on one customer. We are this fivey with the expanding the arms in other 28:50 28 minutes, 50 seconds understood sir. So what so what I understood that one is the home lighting ODM business uh which is basically 28:58 28 minutes, 58 seconds signify apart from that there is a auto lighting business wherein we are competing with Lumax industries and 29:06 29 minutes, 6 seconds theme and then there is a into just a moment we are not competing with 29:12 29 minutes, 12 seconds Lumx or any other industry uh because we are making the source lamp we are not 29:20 29 minutes, 20 seconds making The complete light you try to understand we are we are making the source which fits in the lumix light you understand lumix type of light. 29:33 29 minutes, 33 seconds Okay. So we are basically PA2 supplier we are supplying to Lumax and CM and they are basically 29:40 29 minutes, 40 seconds right now we are supplying to the afterm market with all multinational drugs we cannot because we have signed the NDS 29:48 29 minutes, 48 seconds with them we cannot take their name right now uh we are that is for aftermarket 29:55 29 minutes, 55 seconds replacement of normal HID lamp to LED lamp so understood 30:03 30 minutes, 3 seconds you understand what I mean because we are not making the headlight or we are not making the indicator light. We 30:10 30 minutes, 10 seconds are making the source like if it is put in the you put in the indicator it will work as a indicator. If you put it in a headlamp, it will work as a headlamp. 30:19 30 minutes, 19 seconds And right now we have started for aftermarket with all big brands who are already there for their normal lens. But 30:26 30 minutes, 26 seconds and they are importing the these type of lens from China before. Now they are starting to buy from us. 30:34 30 minutes, 34 seconds Okay. So in auto after market this Lumax and uh Fm are not there that we are 30:41 30 minutes, 41 seconds selling. Sir sir sir we are making the complete light like it's the polycarbonate cover with injection 30:50 30 minutes, 50 seconds molding and all I am talking we are making the source behind that light. 30:57 30 minutes, 57 seconds So there are basically other players who are very big into the aftermarket where they sell the you know the LED or you 31:04 31 minutes, 4 seconds can say the light the source of the light that goes inside the uh headlights. Uh so we are right now supplying these products. We've recently 31:13 31 minutes, 13 seconds started uh I mean we've been into development for almost 8 to 10 months now almost a year almost a year now and it's it's just 31:21 31 minutes, 21 seconds been a couple of months uh since we started actual sales uh to them but we to begin with we already have uh you 31:28 31 minutes, 28 seconds know the biggest names uh in the market who are there in uh the aftermarket sales of these products 31:36 31 minutes, 36 seconds to interrupt I will request Mr. Mr. Rati to please rejoin the queue sir. We have participants waiting for the turn. 31:43 31 minutes, 43 seconds Thank you Mr. Rati. 31:45 31 minutes, 45 seconds Thank you. The next question is from the line of Maj Ahmed from Pinpoint X Capital. Please go ahead. 31:54 31 minutes, 54 seconds Sir. Yeah. Yeah. Yes sir. Thank you for the opportunity. 31:58 31 minutes, 58 seconds Very good set of numbers sir. Uh sir my first question is uh regarding the non-lighting portfolio sir. So post this 32:05 32 minutes, 5 seconds Q1 uh commissioning like what type of revenue are we expecting sir for FI27? 32:12 32 minutes, 12 seconds So when we talk of non-lighting you know then uh we have multiple products that we are currently also doing like in the 32:21 32 minutes, 21 seconds refrigeration category uh commercial refrigeration we are already doing some non uh lighting products apart from the lighting products that we do and then we 32:30 32 minutes, 30 seconds also have started the EMS business uh it's been uh a while which is a new development uh you know in in the tower 32:38 32 minutes, 38 seconds one which we commercial commercialized last here uh so there also we are doing EMS business which is again non-lighting 32:46 32 minutes, 46 seconds and we are also uh stepping into the uh you know the energy segment so we've started some new product categories uh 32:55 32 minutes, 55 seconds in fact uh that's also a very recent development that is again non-lighting but all of these put together they are 33:02 33 minutes, 2 seconds relatively still uh not very substantial and that is why we don't segment you know give give out the numbers in 33:11 33 minutes, 11 seconds segment wise because each vertical or segment has some part of non-lighting stuff which is happening but definitely they will continue to grow uh in the uh 33:21 33 minutes, 21 seconds you know in the coming times uh but if I have to give you an idea I think uh out 33:27 33 minutes, 27 seconds of the overall revenue share around around maybe around 25% uh is 33:38 33 minutes, 38 seconds non-lighting but then again like I said it's not a single category which is contributing to 25%, it's a mix of uh a 33:46 33 minutes, 46 seconds few uh categories and vertical for automobile we are making fuel sensors that give us the very good recog 33:54 33 minutes, 54 seconds and now we are coming up with the honey well for their systems public systems 34:01 34 minutes, 1 second for their sensors. So they are all now rolling out. 34:06 34 minutes, 6 seconds uh we now we have developed some uh solar based products as well solar inverters as well for along with the batteries 34:14 34 minutes, 14 seconds along with the batteries so things are moving in the whatever because people are coming to us because of we have the 34:21 34 minutes, 21 seconds total backwards and end to end solution we are not just offering the battery we are not just offering the EMS we are not 34:29 34 minutes, 29 seconds just uh offering them the sheet metal we are offering them the black box so that is the advantage what we 34:36 34 minutes, 36 seconds uh develop with the with our infrastructure just wanted to know of that how much 34:46 34 minutes, 46 seconds would that incrementally contribute sir can you give some color on that so 34:54 34 minutes, 54 seconds so currently if the product I mean the revenue mix is let's say approximately 75 to 20 25% 35:02 35 minutes, 2 seconds uh so our lighting business will also continue to grow because that has been our core uh strength going forward but definitely this will also continue to 35:11 35 minutes, 11 seconds grow uh so like for next year I can say uh maybe it it may come to around from 35:19 35 minutes, 19 seconds 25 to let's say 30 3 uh 2% uh that is because everything is growing growing 35:26 35 minutes, 26 seconds simultaneously so in proportion to uh previous year to the next year uh it the jump is going to be bigger compared 35:34 35 minutes, 34 seconds compared to you know the 30 versus 70 what I'm referring to right now because each segment will continue to grow. 35:43 35 minutes, 43 seconds Got it. 35:44 35 minutes, 44 seconds Okay. So what is the typical margin here in this you know segment especially herable and variable segment. 35:53 35 minutes, 53 seconds So in heritable variable you know like I said earlier also uh we started with the 36:00 36 minutes OEM uh uh you know uh we started with OEM products uh because that was uh like 36:07 36 minutes, 7 seconds an entry point with our uh you know with with the customers because we were new to this uh category. uh but at the same 36:15 36 minutes, 15 seconds time those customers also saw uh you know our capability and going forward everybody knows that you know uh uh that 36:24 36 minutes, 24 seconds make in India push is eventually going to come to each category whether the products right now are coming from other 36:31 36 minutes, 31 seconds countries to India but going forward everything in electronics the future is going to be everything make in India so 36:38 36 minutes, 38 seconds they also saw that uh you know that USP of getting the products made uh in our factory. So that is how the journey has 36:46 36 minutes, 46 seconds started. Uh so currently around uh 60% of the products that we do in that category are OEM products where the 36:54 36 minutes, 54 seconds margins are relatively low. Uh it is lower than the average that you see on the console level. uh but going forward 37:01 37 minutes, 1 second our strategy is to uh uh add more and more ODM products and that is that is where uh while utilizing our 37:10 37 minutes, 10 seconds manufacturing capabilities we'll be able to add uh more margins while utilizing the processes all the manufacturing 37:17 37 minutes, 17 seconds processes. Uh so our intention is to bring uh you know uh this particular 37:23 37 minutes, 23 seconds unit is to the level uh where the console figures that you see currently uh but right now it is relatively lower. 37:31 37 minutes, 31 seconds So I would say uh it is in higher single digits but uh uh if I talk of the AITA margin uh but going forward our 37:39 37 minutes, 39 seconds intention is to bring it to uh double digits. 37:46 37 minutes, 46 seconds But how do you see a working capital cycle in the variable and variable setting versus the in the lighting business? 37:55 37 minutes, 55 seconds So uh our working capital cycle is uh if I have to give a generic statement is as 38:03 38 minutes, 3 seconds per in in line uh you know with our uh other businesses. uh 38:10 38 minutes, 10 seconds so in terms of numbers I can say that it is around 60 to 75 days 38:20 38 minutes, 20 seconds because all the areu some advances remaining within 30 to 45 38:29 38 minutes, 29 seconds days like that and we we are working with all AA grade companies all tier one companies we are working 38:37 38 minutes, 37 seconds with Uh got it. 38:42 38 minutes, 42 seconds Sorry to interrupt. Maybe ma'am just final question if you sure please go ahead sir. Yes sir. 38:50 38 minutes, 50 seconds Uh sir just want to understand how we looking for the US expansion. So especially the Tora products. Yeah. 38:59 38 minutes, 59 seconds Yeah. We are going to expand this in a big way because before we were working in like that is why we are bringing this 39:06 39 minutes, 6 seconds business in our main uh uh technologies and again 39:13 39 minutes, 13 seconds huh expansion US expansion US expansion uh is right now the right time is there and uh we 39:22 39 minutes, 22 seconds are working very hard to come back with that and you will see the results in next two two or three quarters. 39:29 39 minutes, 29 seconds working very hard on both. 39:31 39 minutes, 31 seconds So we are we you know uh if you look at the la past one year so I think it is something that we also would like to 39:38 39 minutes, 38 seconds forget when it comes to the US market because we had really uh good and big plans for the US market and everything 39:46 39 minutes, 46 seconds was uh you know laid out uh uh quite practically in order to achieve what we had uh planned for. But then everybody 39:55 39 minutes, 55 seconds knows that you know every second day something new used to come up in the news and those disruptions were 40:02 40 minutes, 2 seconds something that nobody had uh you know thought of that you know anticipated that this is going to happen. So that is 40:08 40 minutes, 8 seconds why the uh momentum right now is is slow but at the same time uh we are happy to say that we've made some very good 40:16 40 minutes, 16 seconds advancements in terms of uh getting some very good customers uh on board. Uh so business has not yet started because 40:24 40 minutes, 24 seconds again of whatever uh you know was happening geopolitically and now with the war situation. So all of that but we 40:31 40 minutes, 31 seconds are uh we have a ready set plan uh which which will uh definitely uh you know move into action once uh all of these 40:40 40 minutes, 40 seconds things uh subside. So we've made some very good advancements in terms of uh getting the new customers, new products and all of that has uh already been so 40:49 40 minutes, 49 seconds last few months we've been utilizing for uh this only sir. Uh thank you sir and all the very best. Thank you. 40:58 40 minutes, 58 seconds Thank you. Thank you. Thank you. 41:02 41 minutes, 2 seconds Thank you. The next question is from the line of Hush Gandhi from Motla Oswal. Please go ahead. 41:09 41 minutes, 9 seconds Hi sir. Congratulations on great set of numbers. My first question is how do you see FI27 41:16 41 minutes, 16 seconds uh panning out and uh the company has outlined a shift in its business mix? 41:21 41 minutes, 21 seconds Can management quantify how this will evolve over next two to three years. 41:27 41 minutes, 27 seconds So uh hi Mr. Hash and thank you uh thank you for congratulating us first and then 41:34 41 minutes, 34 seconds yes if you if I have to look at uh FY27 uh in I mean we are also pretty excited 41:41 41 minutes, 41 seconds for the coming year as we have a lot uh you know in I would say in the kitchen right now which is uh which is being 41:49 41 minutes, 49 seconds cooked or slightly uh uh unprepared as of now but yeah looking forward for FY27 41:56 41 minutes, 56 seconds a lot of new stuff uh is happening uh so and and I'm I'm forgetting the second part to your question. Uh 42:05 42 minutes, 5 seconds so how do you see the shift in the business mix that we have been currently witnessing? So how do you uh how this will play out in next two to three years? 42:15 42 minutes, 15 seconds So our you know our business uh mix if you look at uh today also lighting and non-lighting. So we are diversifying in 42:24 42 minutes, 24 seconds both the categories when it comes to the products and as well as the geographies. 42:29 42 minutes, 29 seconds So that is what we've been highlighting now uh you know in our presentation this time around because uh we wanted uh the 42:37 42 minutes, 37 seconds investors to have that confidence that uh what we are doing uh as of now in terms of the products and in terms of in 42:45 42 minutes, 45 seconds terms of the geographies uh so actually honestly speaking there is a lot that is happening even if when I talk of 42:52 42 minutes, 52 seconds lighting and if even if I talk of non-lighting as you know if uh as you can probably understand from all the 43:00 43 minutes discussions that we've had so far. So that has been our focus uh going forward. So non-lighting we are clearly 43:09 43 minutes, 9 seconds we are very clear that we want to add uh you know those products uh like we we've been uh mentioning about you know the 43:17 43 minutes, 17 seconds products that we've developed for Honeywell. So again in that case what our USP has been that you know they were earlier sourcing the product from uh 43:26 43 minutes, 26 seconds let's say uh two or three factories were involved and now we are from a single uh setup they're getting the complete 43:34 43 minutes, 34 seconds product. So that is that is you know the sort of advantage that we are transferring uh to our customer. Uh and 43:40 43 minutes, 40 seconds so whatever we are doing right now it is all bases on the value addition or uh you know uh the niche that we can create 43:49 43 minutes, 49 seconds for ourselves. Likewise in lighting also you know the the moment we saw that lighting uh at a certain uh price 43:57 43 minutes, 57 seconds segment is getting saturated in the market in terms of ODM for ODM for you know that home segment 44:05 44 minutes, 5 seconds uh where the prices the products are quite economical. So that is how we uh decided that we need to utilize our 44:13 44 minutes, 13 seconds strengths because our strengths are I mean we are much more capable than you know the products that we were developing uh earlier. So now we are 44:22 44 minutes, 22 seconds utilizing those strengths and that is why the acquisition that we have recently done uh is to take advantage of 44:29 44 minutes, 29 seconds our in-house strengths and capture you know that part of the market where uh we can add value to the product and the 44:37 44 minutes, 37 seconds customer then can enjoy a you know a a better looking aesthetically product a better quality product. So we see a lot 44:45 44 minutes, 45 seconds of gaps in these niche areas and that is where we intend to uh you know enter. So uh this side right like there are so 44:53 44 minutes, 53 seconds many European brands we are they are taking like we are taking the advantage of that that because the lead time of 45:00 45 minutes those products are more the like uh uh uh again the sustainability of their brand is difficult to support their 45:09 45 minutes, 9 seconds brand they need more. We are now entering into the very niche market where there is no Indian brand still 45:17 45 minutes, 17 seconds till now entered. So we are entering into that market. So still that is that uh uh area that is you can say the top 45:25 45 minutes, 25 seconds top of the pyramid is uh only held by the European brand or the Japanese brand. So we are targeting to make 45:35 45 minutes, 35 seconds uh those category of products and enter into that market. So you know whether it is lighting or non-lighting our thought 45:43 45 minutes, 43 seconds has always been to provide a solution to the customer and not just the product and that is where our strength lies 45:50 45 minutes, 50 seconds because you know we have that capability to provide uh a complete solution instead of just providing the product 45:59 45 minutes, 59 seconds and sir thanks a lot for the answer uh in case I have anything I'll just get into. Thank you. Thanks a lot. 46:07 46 minutes, 7 seconds All the best. Thank you. Thank you. 46:11 46 minutes, 11 seconds Thank you. The next question is from the line of Satab Mariwal from Mount Intra Finance. Please go ahead. 46:18 46 minutes, 18 seconds Uh hello. Am I audible? Yes, you are. Please go ahead. Hello. Can you hear me, sir? 46:27 46 minutes, 27 seconds Yes. 46:28 46 minutes, 28 seconds Okay. Yeah. Thanks for taking my question. It's my first time on the call. I'm new with the company. I just had a few basic questions. Firstly, do we see any effect on our business from 46:38 46 minutes, 38 seconds the recent geopolitical tensions in the Middle East either in terms of our supply chain or in terms of the sales orders from the customers given that we're trying to expand into those services? 46:49 46 minutes, 49 seconds Yeah. Yeah. So there absolutely there there has been an effect of that. uh and if I talk of uh so it's uh the effect 46:58 46 minutes, 58 seconds it's been on uh multiple areas supply chain definitely for one uh but like you know again uh being an ODM we have that 47:08 47 minutes, 8 seconds strength of uh you know that flexibility of changing a particular design bases on what is available also in the market and 47:16 47 minutes, 16 seconds we generally whenever we design something which is like the core of the product for example the drivers that we manufacture for all the lighting products 47:24 47 minutes, 24 seconds Uh so we have multiple designs already with with us. This is something 47:32 47 minutes, 32 seconds ladies and gentlemen please stay connected. 47:37 47 minutes, 37 seconds [music] 47:46 47 minutes, 46 seconds [music] 47:52 47 minutes, 52 seconds [music] 47:58 47 minutes, 58 seconds Ladies and gentlemen, we have management reconnected. Over to you, sir. 48:06 48 minutes, 6 seconds The question uh Mr. Prattab. So, yeah, I was saying that it h it has affected in multiple ways. uh like for example I was 48:14 48 minutes, 14 seconds referring to uh you know the supply supply chain uh because of whatever is happening and uh the option uh as being 48:23 48 minutes, 23 seconds an ODM the options that we currently have in our system so that is why we are uh very uh you know for us it becomes really fast for us to change a design 48:31 48 minutes, 31 seconds from let's say design A to design B uh in terms of the electronics uh and because we buy only the raw materials 48:39 48 minutes, 39 seconds you know when it comes to the product that we make we buy let's say all uh electronic components uh plastic 48:46 48 minutes, 46 seconds granules and for that matter metal sheets aluminium extrusions and all of those uh things. So we we don't really 48:54 48 minutes, 54 seconds rely on the semi-finished or finished products uh you know which generally uh people rely on. So therefore for us to 49:02 49 minutes, 2 seconds make small changes and adapt to the uh existing scenario becomes uh relatively easier and that is what we've been doing. We did the same during the covid 49:11 49 minutes, 11 seconds years and we were one of the very few companies you know who were growing uh during pre-covid uh times. Uh so yeah 49:18 49 minutes, 18 seconds this has been affected but we are countering that with our strengths. 49:22 49 minutes, 22 seconds Prices are definitely going up because as if you are following the you know the industry so uh metals have gone up like 49:30 49 minutes, 30 seconds you know aluminium, copper everything is the prices are rising. Uh so we are in constant touch with our customers to make sure that you know uh we are able 49:39 49 minutes, 39 seconds to maintain uh the c you know certain gross uh margin and lead times have also gone up for a lot of components but we 49:47 49 minutes, 47 seconds are planning well well in advance to make sure that you know it does not affect the supply chain. 49:57 49 minutes, 57 seconds Okay. Uh sorry thanks for that. Now just one other question here. I I understand that I just want to have a broad what 50:05 50 minutes, 5 seconds kind of growth expectation is 201 understand from the PP that we trying to diversify away from signifi picking up 50:12 50 minutes, 12 seconds new customers in lighting. There's going to be a pickup in variables and variables auto lighting and I believe we have a new facility coming online in Q 50:20 50 minutes, 20 seconds and FI27 as well. So given all of this what kind of growth are we expecting in FI27? 50:27 50 minutes, 27 seconds So uh I mean just to give you uh a rough idea in in terms of the top line what we 50:35 50 minutes, 35 seconds are expecting is somewhere close to around uh 20 to 22% uh growth in FY 27 50:43 50 minutes, 43 seconds uh because you know like I said uh the US market has been sort of uh been slow 50:50 50 minutes, 50 seconds because of the geopolitical uh uh issues and it uh so every day something new sort of comes. comes up in the news. So 50:58 50 minutes, 58 seconds we are being cautious as of now. So a 20 to 22% uh with uh if you look at the aida margins it should be in line to 51:07 51 minutes, 7 seconds what uh we have uh achieved uh you know this time around. 51:14 51 minutes, 14 seconds Understood. Understood. And can I just ask another question here? Just my understanding when I look at our standalone result is that the uh you 51:24 51 minutes, 24 seconds said the downward trend was in the ODM home lighting. So it's a standalone results that is that correct with techni absolutely absolutely 51:32 51 minutes, 32 seconds and yeah please go ahead. Yeah, thank you. 51:38 51 minutes, 38 seconds So I was just saying that now that we've seen the downward trend has that been kind of arrested I know diversifying away to other customers as well but in 51:46 51 minutes, 46 seconds terms of that business itself signify after the JB forms would take some do we expect any more leakage can it stabilize or do we expect it to reduce 51:54 51 minutes, 54 seconds substantially give us some understanding so this is uh you know honestly speaking 52:02 52 minutes, 2 seconds we are also monitoring uh right now uh we still have steady plans plans uh uh to uh when you know the DV happened we 52:12 52 minutes, 12 seconds also thought maybe you know it's going to uh uh you know come down drastically that didn't happen and right now also we 52:20 52 minutes, 20 seconds have stable plans going forward so we always have a uh you know an a tentative idea of what is to come in the next at 52:28 52 minutes, 28 seconds least 6 months as per the discussions that we have you know uh on a constant basis. Uh so the plans still plans are 52:36 52 minutes, 36 seconds still steady and at the same time uh we are adding more and more customers uh within this category and uh like we said 52:44 52 minutes, 44 seconds during our opening remarks also we are adding the uh herable variable category to the you know the standalone company. 52:52 52 minutes, 52 seconds The reason why we are doing that is uh because we were short on space uh we were not expecting the kind of growth 53:00 53 minutes that you know to that we got within a such a short span of time. Uh so we were 53:07 53 minutes, 7 seconds uh in uh you know short on space. So we are now shifting that particular uh business physically as well and that is 53:14 53 minutes, 14 seconds how now we intend to add that to uh the you know the standalone company. 53:23 53 minutes, 23 seconds Understood. Just one last confirmation that the margin expectation for nature is roughly about 15 to 16% level. Is that correct? 53:31 53 minutes, 31 seconds Yeah. uh around the yeah same lines 15 to 16. 53:35 53 minutes, 35 seconds Okay. Sure. Thanks for taking my question. Thank you. Thank you. Thank you. 53:41 53 minutes, 41 seconds The next question is from the line of Sen Boresa from Sequent Investments. Please go ahead. 53:47 53 minutes, 47 seconds Yeah. Yeah. Congratulations for good set of numbers. So again my question is on the margin. So considering uh before IPO 53:56 53 minutes, 56 seconds somewhere around FI23 we used to do a margin of roughly around 23 22% our gross margin used to be around 63 64%. 54:06 54 minutes, 6 seconds So what led to this sharp decline in the margin post FY25? I understand we have done a lot of KPEC as well as the 54:14 54 minutes, 14 seconds initials hiring you mentioned in the opening remark but what led to this sharp decline in the margin and uh are 54:22 54 minutes, 22 seconds we again going to go back to this 20 22% kind of margin in near future as the new 54:29 54 minutes, 29 seconds capacities ramp up considering the new developments you spoke about couple of minutes back. Yeah, that's all. 54:36 54 minutes, 36 seconds Yeah, thank you Mr. Hain for asking. Uh, so basically uh you know in uh during pre preco uh sorry pre IPO uh like you 54:46 54 minutes, 46 seconds said the margins were in the line of around 20 to 22% hea margin and since uh the IPO we've uh you know been doing a 54:55 54 minutes, 55 seconds lot of onboarding of expenses for all uh the new product categories. So if you look at the business uh uh you know 55:02 55 minutes, 2 seconds setup or the verticals that we had uh before 2023 or up to 2023, we were only 55:09 55 minutes, 9 seconds doing uh uh uh the home lighting segment uh the commercial uh you know lighting in the uh retail space uh the retail uh 55:18 55 minutes, 18 seconds store lighting and the refrigeration commercial uh lighting and products. So apart from that whatever we've been 55:25 55 minutes, 25 seconds discussing during you know this call whether it is herable variables automotive uh then you know the uh product that we 55:34 55 minutes, 34 seconds are doing for Honeywell the EMF setup that we have uh started and then the products in the energy segment like the 55:40 55 minutes, 40 seconds uh your uh inverters uh solar and hybrid inverters and the batteries along with that. So all of that is new and in order 55:49 55 minutes, 49 seconds to uh get a you know just a single uh uh product line or new vertical added it 55:56 55 minutes, 56 seconds takes a lot of e effort manpower and as you can see the you know the growth in number of people that we've had from 56:04 56 minutes, 4 seconds around 1500 people to around more you know 25 2600 people so it's only due to the onboarding of expenses and like I 56:13 56 minutes, 13 seconds said that all these verticals are fairly small right Now they are definitely contributing to the top line. They are doing uh well compared to you know the 56:21 56 minutes, 21 seconds the time that we have uh invested in them and in a very short span of time they are really doing well in terms of the efforts that we've put in. So by the 56:30 56 minutes, 30 seconds time till the time you know they start generating uh decent enough uh numbers. 56:36 56 minutes, 36 seconds So the the margins are going to look like uh this only. And it is pretty pretty evident if you look if you had a chance to look at the uh the 56:45 56 minutes, 45 seconds presentation also that we have uploaded that in you know post uh uh the IPO our margins uh were falling constantly 56:53 56 minutes, 53 seconds quarteron quarter and now uh since the last four to five quarters you can see an upward trend in the AIA uh AIDA 57:00 57 minutes margins and uh we believe that you know this trend will continue although now that we've reached a level of around 15 57:08 57 minutes, 8 seconds uh you know percent so it will is around 13 14%. So it will take some time uh to 57:15 57 minutes, 15 seconds uh maybe another couple of years to so our our target is also to reach around 18 to 20%. So I was asked the same question uh you know a couple of 57:24 57 minutes, 24 seconds earnings call back. So uh so my answer has always been that our intent and our 57:30 57 minutes, 30 seconds strategy has always been to uh stay somewhere around that 18% mark and we are working uh in that direction only 57:38 57 minutes, 38 seconds and when the like the development phases like development is such a thing it will 57:46 57 minutes, 46 seconds continue it will not stop now whatever we are putting but what we have developed and which are already we are 57:53 57 minutes, 53 seconds started selling It will improve their sales once their sales because our overheads will be fixed and uh once 58:02 58 minutes, 2 seconds these products uh give their more revenue it will automatically increase the profit. 58:08 58 minutes, 8 seconds Just want to add on to what uh Hardep G is uh you know mentioning. So when we start just giving you an example when we 58:15 58 minutes, 15 seconds started the automotive lighting segment uh the development of the automotive lighting segment it took us almost 8 to 58:22 58 minutes, 22 seconds 9 months or maybe 10 months uh to do our first sale but 8 to 10 months back we we 58:30 58 minutes, 30 seconds uh required you know the team the development team uh even for that matter to do the trials and everything we 58:37 58 minutes, 37 seconds needed a line set up uh with people having the knowledge of that product category so That is where onboarding of 58:44 58 minutes, 44 seconds expenses uh come into play and eventually uh you know once the sales start it starts giving you the desired uh results. 58:57 58 minutes, 57 seconds Yeah, thank you. Thank you for the uh understanding. So sir one follow up on this as you mentioned we have done a lot 59:04 59 minutes, 4 seconds of developments and we are moving to other segment like auto and battery energy sector etc. So what kind of R&D 59:14 59 minutes, 14 seconds expense do we do? Do can you like give a ballpark number? 59:20 59 minutes, 20 seconds I honestly don't have that number right now in front of me but uh uh what I can say is that like you see the growth in 59:29 59 minutes, 29 seconds the number of uh people uh our R&D team has been constantly growing. uh like three years back uh we probably had a 59:38 59 minutes, 38 seconds team of uh you know all electrical mechanical uh everyone put together maybe around let's say 40 people uh in 59:47 59 minutes, 47 seconds the development side and today that number is going to be somewhere close to around uh 80 people with uh you know uh some seniors also being added into the 59:56 59 minutes, 56 seconds system. uh so for uh some critical vertical uh we we uh you know generally 1:00:04 1 hour, 4 seconds create a separate uh team uh which who can you know independently take care of that but uh I'll keep that in mind and 1:00:12 1 hour, 12 seconds probably we'll have uh the figure from next time uh on the spendings on the R&D 1:00:20 1 hour, 20 seconds no worries no worries I'll get back in you sir thank you sure thank you Mr. 1:00:27 1 hour, 27 seconds Thank you. The next question is from the line of Retesh Paladia from Gir Capital. Please go ahead. 1:00:41 1 hour, 41 seconds Mr. Rates, please go ahead with your question. Your line is unmuted. 1:00:46 1 hour, 46 seconds Yeah. Uh uh I missed out on revenue and profit guidance if you can read it. uh also on uh uh backward integration I 1:00:55 1 hour, 55 seconds believe you were uh somewhat backward integrated on non- electronic side on the lighting uh uh business. uh what 1:01:03 1 hour, 1 minute, 3 seconds about non-lighting if you can uh uh explain a bit on that also? I'll explain you like we 1:01:11 1 hour, 1 minute, 11 seconds like uh I take the example of honey well. So we make the plastic modes. We have the complete tool room inhouse tool 1:01:20 1 hour, 1 minute, 20 seconds room. We make the metal modes. We have the complete uh uh setup for that. Uh 1:01:27 1 hour, 1 minute, 27 seconds for fabrication we have the complete setup for like the amada vending machines, Amada laser cutting machines, 1:01:36 1 hour, 1 minute, 36 seconds uh your machine centers, everything we have. Similarly the surface finishing we 1:01:43 1 hour, 1 minute, 43 seconds have the liquid paint shop. We have the powder coating shop. So this is uh injection molding. We have all the mold 1:01:50 1 hour, 1 minute, 50 seconds making facility. We have the injection molding machines. We have the plastic exfusion machines. So everything we are doing inhouse. 1:01:59 1 hour, 1 minute, 59 seconds So for that I need I wish that anybody who is interested to visit us please they everyone is welcome. So once you 1:02:07 1 hour, 2 minutes, 7 seconds see that what we are doing it will be grateful for us 1:02:17 1 hour, 2 minutes, 17 seconds also on non-lighting side or if you can give some example and what kind of back integration you will be doing this is this is what I have explained this is 1:02:26 1 hour, 2 minutes, 26 seconds for non- lighting like for if like the sheet metal sheet metal is not lighting sheet sheet metal and sheet metal we are 1:02:34 1 hour, 2 minutes, 34 seconds doing processing all the sheet with CNC machines, powder coating, making the tools. Similarly, injection molding, 1:02:41 1 hour, 2 minutes, 41 seconds plastic components is not lighting. So, it is all uh uh and all the businesses 1:02:48 1 hour, 2 minutes, 48 seconds we are getting uh uh because we have the backward integration. 1:02:54 1 hour, 2 minutes, 54 seconds So, that is how we utilizing our existing strengths and adding more uh capabilities to our backward integration. uh so that you know all the 1:03:03 1 hour, 3 minutes, 3 seconds different verticals can be uh uh you know uh serviced from a uh from a single 1:03:11 1 hour, 3 minutes, 11 seconds uh setup where we are doing anything to do with metal plastics uh you know and electronics also which is which is 1:03:18 1 hour, 3 minutes, 18 seconds non-lighting. So all the entire setup can be used for both lighting and non-lighting. Obviously there are certain machines which are dedicated for 1:03:26 1 hour, 3 minutes, 26 seconds lighting some certain machines and teams and capabilities which are dedicated for non-lighting. So that is how we've uh 1:03:34 1 hour, 3 minutes, 34 seconds you know devised uh the entire uh thing and if you can repeat your revenue and 1:03:42 1 hour, 3 minutes, 42 seconds margin guidance forgot your that was the first part of your question. So yeah, revenue we are expecting uh somewhere uh close to 1:03:50 1 hour, 3 minutes, 50 seconds around a 20 to 22% uh uh jump uh from this year to the next one. uh that is 1:03:57 1 hour, 3 minutes, 57 seconds what we are expecting and in terms of uh the margins leita margins uh we expect them to stay in line to what uh we have 1:04:06 1 hour, 4 minutes, 6 seconds achieved uh right now uh that is again due to the fact that you know onboarding of expenses and all of that there that 1:04:14 1 hour, 4 minutes, 14 seconds is still continuing uh so we are on that phase of uh developing more and more new vertical and categories and probably 1:04:22 1 hour, 4 minutes, 22 seconds every quarter or two you'll get to hear certain new products s new categories that we've been uh talking about uh you 1:04:30 1 hour, 4 minutes, 30 seconds know so every quarter I think if you look at the if you uh if you've been uh a part of our earnings call so I'm sure 1:04:37 1 hour, 4 minutes, 37 seconds you must have heard something new in every one or two quarters so it takes a lot of time and effort to you know develop these products 1:04:46 1 hour, 4 minutes, 46 seconds so that is why the margins are going to stay in line uh with what we have achieved 1:04:53 1 hour, 4 minutes, 53 seconds uh that's it from my side thank you very Thank you. Thank you Mr. 1:04:59 1 hour, 4 minutes, 59 seconds Thank you. The next question is from the line of Maduri from counter cyclical investments. Please go ahead. 1:05:07 1 hour, 5 minutes, 7 seconds Thank you for the opportunity once again. Sure. If I compare our cost to the Chinese or the import, how would we uh compare and s what is our thinking 1:05:16 1 hour, 5 minutes, 16 seconds like would we like to be the comparable to Chinese or would we like to be the Indian supplier or Indian 1:05:24 1 hour, 5 minutes, 24 seconds vendor to these OEMs or brands for our product edition. 1:05:29 1 hour, 5 minutes, 29 seconds So uh you know so to uh answer this question I'll give you one uh example of 1:05:36 1 hour, 5 minutes, 36 seconds when we entered the uh you know the Middle East market. So uh I've had I've had this question before also in uh some 1:05:44 1 hour, 5 minutes, 44 seconds of the earlier earning earnings call maybe a couple of quarters back. So when we entered the Middle East uh market so 1:05:52 1 hour, 5 minutes, 52 seconds you know that market as you must be aware that you know it's completely open to anybody in the world. So it's quite an open space. Uh uh so all the Chinese 1:06:02 1 hour, 6 minutes, 2 seconds players, all the European players, they are all there uh in the Middle East uh the entire region. Uh so when we 1:06:11 1 hour, 6 minutes, 11 seconds ventured into that market, we were we uh you know competing with all of them. So where we are winning in terms of uh the 1:06:18 1 hour, 6 minutes, 18 seconds orders is because like I said earlier during the call that we are not supplying just the product it's a solution that we are supplying and the 1:06:27 1 hour, 6 minutes, 27 seconds ecosystem that we have built. Uh so that ecosystem even if you go to China you will see that you know all the companies 1:06:34 1 hour, 6 minutes, 34 seconds they rely on an ecosystem which is which has been there. So let's say for a fixture uh a lighting supplier he might 1:06:41 1 hour, 6 minutes, 41 seconds be doing only the assembly and the branding and all of that and he might not be doing the entire backward in integration because they already have a 1:06:50 1 hour, 6 minutes, 50 seconds uh ecosystem set in place but in India that's that is not there. So we had to create that ecosystem inhouse. Uh so if 1:06:57 1 hour, 6 minutes, 57 seconds you look at uh you know the the strength that we carry uh uh you know and again we work on products which are uh sort of 1:07:05 1 hour, 7 minutes, 5 seconds solution based and not just run-of-the-mill products which anybody can do with uh you know a factory setup. 1:07:11 1 hour, 7 minutes, 11 seconds So that has been our our strength and that has been our strategy that we want to enter only into those uh products or 1:07:20 1 hour, 7 minutes, 20 seconds categories where we are not uh you know just uh uh doing the runoff mill products where there is some value 1:07:27 1 hour, 7 minutes, 27 seconds addition where uh there is some some level of uh you know dependency from the customer side to us and the customer is 1:07:35 1 hour, 7 minutes, 35 seconds uh facing certain issues right now where we are able to help the customer in developing such a product where we take 1:07:42 1 hour, 7 minutes, 42 seconds care of those all those issues or whatever uh you know uh uh problems that the customer is facing facing. So that 1:07:49 1 hour, 7 minutes, 49 seconds has been the strategy all along and that is why if you look at the end result compare the end result Apple to apple we 1:07:58 1 hour, 7 minutes, 58 seconds are even at times cheaper uh than uh you know the Chinese. 1:08:04 1 hour, 8 minutes, 4 seconds Understood sir sir also what is the capex that we are looking to incur in effort 27 and post Q1 once this phase 2 1:08:12 1 hour, 8 minutes, 12 seconds comes uh uh on stream what will be our maximum revenue potential if we operate at full utilization what kind of topline 1:08:21 1 hour, 8 minutes, 21 seconds can we achieve and by when do you expect to reach there? 1:08:26 1 hour, 8 minutes, 26 seconds So uh if I talk of the the you know the capeex first uh then uh we are I think 1:08:34 1 hour, 8 minutes, 34 seconds left with around from the IPO proceeds somewhere somewhere around 35 36 uh crores of uh capeex uh which we uh 1:08:43 1 hour, 8 minutes, 43 seconds intend to utilize in this uh financial year and this is as per the RP uh as 1:08:49 1 hour, 8 minutes, 49 seconds well and uh so your next part of the question was uh uh revenue side if we 1:08:58 1 hour, 8 minutes, 58 seconds utilize the entire uh capeex right that's right yeah so if if you know if you look at us 1:09:07 1 hour, 9 minutes, 7 seconds historically we've we were always around uh four four and a half to five times of 1:09:14 1 hour, 9 minutes, 14 seconds the asset return uh if you look at the business uh historically as well when we were like I mentioned earlier we were 1:09:23 1 hour, 9 minutes, 23 seconds doing only two three four verticals is uh you know at that point in time. So now there there is actually a lot on the 1:09:30 1 hour, 9 minutes, 30 seconds plate and the plate is getting bigger day by day. We are adding more and more stuff uh verticals and products. But to hypothetically answer your question 1:09:38 1 hour, 9 minutes, 38 seconds again you know the amount of investment uh that we have uh put in which is close 1:09:45 1 hour, 9 minutes, 45 seconds to around uh 300 crores uh you know everything put together. So you can uh uh assume uh the sim you know similar 1:09:53 1 hour, 9 minutes, 53 seconds four and a half to five times of uh the uh asset return once we achieve 1:10:02 1 hour, 10 minutes, 2 seconds so so somewhere around 1500 K topline we would be able to achieve uh provided if we uh post post the commissioning of this capex at full utilization. 1:10:15 1 hour, 10 minutes, 15 seconds Yeah. Uh I mean you can you can say that that is what our intent is also you know to reach where we were uh earlier. Uh 1:10:25 1 hour, 10 minutes, 25 seconds understood. And what about the working capital? Uh if you could just take us through that uh on a steady state basis 1:10:32 1 hour, 10 minutes, 32 seconds what is the credit period that we are offering to our customers? What is the steady state inventory days and the 1:10:40 1 hour, 10 minutes, 40 seconds payable days and the networking capital days? So you know honestly for the working capital uh for the working 1:10:49 1 hour, 10 minutes, 49 seconds capital I would say that we are not in the right uh time right now because whatever is happening like I said 1:10:57 1 hour, 10 minutes, 57 seconds earlier the lead times have gone up we have we are now uh you know having multiple uh inventories because let's 1:11:05 1 hour, 11 minutes, 5 seconds say a certain design we are not able to produce because of shortage of a certain component then we have to go for a completely new design in order to 1:11:13 1 hour, 11 minutes, 13 seconds fulfill the require irement of you know our customers. Uh so working capital has been uh sort of uh got uh you know a 1:11:23 1 hour, 11 minutes, 23 seconds slight hit because of whatever is happening geopol geopolitically uh in first you know la one entire year 1:11:31 1 hour, 11 minutes, 31 seconds uh I would say in the US market and now even in the gulf because of the current war situation. Uh but yeah going forward 1:11:40 1 hour, 11 minutes, 40 seconds uh that is something that uh we intend to uh bring back to you know the normal uh numbers that used to be there a 1:11:49 1 hour, 11 minutes, 49 seconds couple of uh years back. uh and uh yeah so basically that is what our 1:11:57 1 hour, 11 minutes, 57 seconds intent is to bring bring it bring it down but for another at least uh two quarters to three quarters uh we we 1:12:05 1 hour, 12 minutes, 5 seconds definitely see the impact uh of you know whatever has been happening till now now if we compare our company with other 1:12:14 1 hour, 12 minutes, 14 seconds EMS players though it is not a like to-like comparison but just for comparison sake We are doing far higher 1:12:22 1 hour, 12 minutes, 22 seconds operating margins of around 15 16 15 16 1:12:24 1 hour, 12 minutes, 24 seconds 15 16 15 16 15 16 15 16 15 16 15 16 15 16 15 16 15 16% versus low to mids singledigit margins that other EMS players are doing like Dixon for example 1:12:31 1 hour, 12 minutes, 31 seconds but our working capital is quite significant whereas those players they are operating at negative working 1:12:38 1 hour, 12 minutes, 38 seconds capital so uh I mean is this a tradeoff and now that we have diversified from lighting to non-lighting business then 1:12:47 1 hour, 12 minutes, 47 seconds how do we hope to take on those kind of EMS giants which have uh huge scale. Uh 1:12:56 1 hour, 12 minutes, 56 seconds so so then how do we compete uh with them on products like let's say lithium iron battery and even the variables etc. 1:13:04 1 hour, 13 minutes, 4 seconds Uh so so would they not enjoy a edge in terms of costing due to their economies of scale? 1:13:13 1 hour, 13 minutes, 13 seconds So uh you know uh uh actually I'll uh just uh uh simplify your answer. We are 1:13:21 1 hour, 13 minutes, 21 seconds not a screwdriver uh company. We are providing the solution and the end to 1:13:27 1 hour, 13 minutes, 27 seconds end blackbox product. We are not just ascending that is for sure any even even 1:13:35 1 hour, 13 minutes, 35 seconds if we do the EMS we are value adding something on to that. 1:13:41 1 hour, 13 minutes, 41 seconds So basically in your question also uh you know I can find all the answers in your question only like you said that 1:13:47 1 hour, 13 minutes, 47 seconds you know the EMS companies uh work on uh very uh uh thin margins and at the same time their working capital is also 1:13:56 1 hour, 13 minutes, 56 seconds relatively you know uh the number of days are much much lower that is only because uh you know they they don't 1:14:03 1 hour, 14 minutes, 3 seconds really invest in the uh the uh I would say the the raw material because the designs they don't have the designs with 1:14:10 1 hour, 14 minutes, 10 seconds them they don't own the designs. Whereas in our case uh you know that is I I would say a a trade-off that uh uh we 1:14:18 1 hour, 14 minutes, 18 seconds were a aware of from you know the the very day we started uh all these verticals and business uh categories 1:14:25 1 hour, 14 minutes, 25 seconds that is because uh we like I said earlier we don't want to do uh you know the the the products which or the EMS 1:14:34 1 hour, 14 minutes, 34 seconds products which everybody else is doing and we you I mean it's it will be un unfair you know for us to be compared 1:14:41 1 hour, 14 minutes, 41 seconds compared to uh the uh the EMS giants that you are talking of because uh their way of working, their business strategy 1:14:49 1 hour, 14 minutes, 49 seconds is completely different uh to uh our business strategy and our way of working. Uh so our uh like I you know 1:14:57 1 hour, 14 minutes, 57 seconds like what VG was referring to uh that uh we design manufacture do everything in house and in order to do that you have 1:15:05 1 hour, 15 minutes, 5 seconds to invest in term in the uh raw materials and everything but at the same time we are very uh mindful of uh the 1:15:14 1 hour, 15 minutes, 14 seconds customers that we choose in order to make sure that our payments are secure uh and if uh you know the situation uh 1:15:22 1 hour, 15 minutes, 22 seconds the all the uh geopolitical situation would have been uh you know normal then our uh working capital also would have 1:15:30 1 hour, 15 minutes, 30 seconds looked quite reasonable in uh uh you know and in line with the kind of uh business that we are doing and when it 1:15:38 1 hour, 15 minutes, 38 seconds comes to you know uh like you took an example of uh the battery products and also uh that is where our again strength 1:15:46 1 hour, 15 minutes, 46 seconds comes into play we just don't supply the battery to any customer we build a product around it uh around the battery 1:15:54 1 hour, 15 minutes, 54 seconds and uh that is where again you know uh our our strength comes into play. So if we would have been supplying let's say a 1:16:02 1 hour, 16 minutes, 2 seconds battery or a single component to someone and uh uh a similar component or product if someone else is doing in millions of 1:16:09 1 hour, 16 minutes, 9 seconds pieces obviously they're going to be uh uh more efficient in terms of costing but that is where our strength is that 1:16:16 1 hour, 16 minutes, 16 seconds we build a complete product or solution sorry around it and that is that is how we uh get the margins. 1:16:25 1 hour, 16 minutes, 25 seconds Sir, so just to be clear now for taking the battery example only are have we made the battery from the chemical 1:16:33 1 hour, 16 minutes, 33 seconds composition onward or the customer gave us the basic chemical composition and then we made a assembly out of it. Which one of the two is it? 1:16:44 1 hour, 16 minutes, 44 seconds I am talking about the battery. We are not making the battery first of all. We are making the solution like the 1:16:51 1 hour, 16 minutes, 51 seconds complete inverter. In inverter there is a metal housing there is a battery there is a electronic PCB assembly there is a 1:16:58 1 hour, 16 minutes, 58 seconds firmware then there is a final assembly so we are managing the whole thing like the firmware we also design ourselves 1:17:08 1 hour, 17 minutes, 8 seconds electronics we also manufacture ourselves it's metal body also we make ourselves and we are selling the 1:17:15 1 hour, 17 minutes, 15 seconds complete product you we are not making the battery sales ourselves 1:17:23 1 hour, 17 minutes, 23 seconds So uh sales uh I think a lot of uh I mean correct me if I'm wrong a lot of players anyways depend uh for the cells 1:17:31 1 hour, 17 minutes, 31 seconds uh you know from imports only but we are doing the packaging of uh those cells also in house the BMS the entire 1:17:39 1 hour, 17 minutes, 39 seconds packaging around it so we do that uh too so we don't uh we don't buy the complete uh battery as a battery solution we 1:17:48 1 hour, 17 minutes, 48 seconds create the solution uh in our uh factories Understood. So, so now that we you have 1:17:55 1 hour, 17 minutes, 55 seconds explained how we are different from the run-of-the-mill EMS players. So, so which uh closest peers would you 1:18:03 1 hour, 18 minutes, 3 seconds consider that our business is comparable with like for example focus lighting which is doing inhouse uh uh instore 1:18:11 1 hour, 18 minutes, 11 seconds lighting or Calcom vision which is also into contract manufacturing LEDs etc. 1:18:17 1 hour, 18 minutes, 17 seconds So, so are these comparable uh to us business-wise? 1:18:21 1 hour, 18 minutes, 21 seconds So uh maybe some of the companies in bits and pieces uh but I think uh it'll 1:18:29 1 hour, 18 minutes, 29 seconds be you know uh it uh you I'll be probably in a better position to explain once you visit the facility and see for 1:18:37 1 hour, 18 minutes, 37 seconds yourself you know the kind of uh stuff that we do uh in our uh in our ecosystem and the variety of products and categories that we are taking care of. 1:18:48 1 hour, 18 minutes, 48 seconds So but yeah in bits and pieces you can compare us uh to uh a lot of players but if you look at the entire ecosystem then 1:18:57 1 hour, 18 minutes, 57 seconds uh I mean honestly I I don't have any name in my mind as of now even in China uh like the the way we are 1:19:05 1 hour, 19 minutes, 5 seconds working on many Chinese company do like that so they also do the segment wise segment wise segment wise but once you 1:19:12 1 hour, 19 minutes, 12 seconds see that is why I say I want to invite the team Uh uh uh so so uh so sir definitely 1:19:21 1 hour, 19 minutes, 21 seconds we'll uh visit sir one last question sir what is the pricing arrangement that we have with our customers is it a fixed 1:19:28 1 hour, 19 minutes, 28 seconds price contract or is it a formula based pricing wherein uh the let's say forex and etc raw material prices are passed through. 1:19:39 1 hour, 19 minutes, 39 seconds So most of the cases it's the second uh second uh you know uh scenario which you mentioned it's uh most of the cases it 1:19:48 1 hour, 19 minutes, 48 seconds is bomb plus uh but in certain cases where you know uh especially I would say in uh store lighting business uh there 1:19:56 1 hour, 19 minutes, 56 seconds it's not a bomb plus system it's a uh it's the prices are driven by you know let's say the market the solution uh 1:20:05 1 hour, 20 minutes, 5 seconds what is the expectation of the customer because that itself is a highly customized uh you know uh uh business 1:20:13 1 hour, 20 minutes, 13 seconds highly customized solution that we provide to the customers but apart from that everywhere else it's mostly bomb 1:20:19 1 hour, 20 minutes, 19 seconds plus and uh we keep a close uh watch on you know how the market is progressing how the raw materials are you know in 1:20:26 1 hour, 20 minutes, 26 seconds terms of pricing dollar fluctuations and all of that but it there is always a gap between whenever there is a change and 1:20:34 1 hour, 20 minutes, 34 seconds by the time we get that uh you know effect in our uh books. So there's always a gap of let's say about two to 1:20:41 1 hour, 20 minutes, 41 seconds three months. That is the time that it takes. 1:20:45 1 hour, 20 minutes, 45 seconds Got it. So just one question are gross margins are currently at the 40% range and you mentioned that we would like our 1:20:52 1 hour, 20 minutes, 52 seconds AITA margins to be in the 18 to 20% range. So, so is this the ideal level and with operating leverage I think our 1:20:59 1 hour, 20 minutes, 59 seconds margin should move to the 18 20% range and whatever incremental margin improvement uh that we can see 1:21:08 1 hour, 21 minutes, 8 seconds from moving from OEM to ODM will either invest into uh new product development 1:21:15 1 hour, 21 minutes, 15 seconds or uh R&D uh is that understanding correct or we we can see a further gross margin improvement on this current base. 1:21:24 1 hour, 21 minutes, 24 seconds So uh so basically gross margins are going to probably remain around what 1:21:30 1 hour, 21 minutes, 30 seconds where we are right now but the uh the uh improvement in the margins are going to come from the efficiencies that we've 1:21:38 1 hour, 21 minutes, 38 seconds achieve that we will achieve in the uh in the near future and uh again you know because of the point that all the a lot 1:21:46 1 hour, 21 minutes, 46 seconds of the products are currently very new and the fixed cost uh to build that team uh for that new vertical 1:21:54 1 hour, 21 minutes, 54 seconds you know is from always from day one and uh when the production or volumes start that is where the fixed cost uh starts 1:22:03 1 hour, 22 minutes, 3 seconds to uh you know get fully utilized. So it is majority of the improvement uh is going to come from the you know uh 1:22:12 1 hour, 22 minutes, 12 seconds product once we start producing from the efficiencies of these new categories and maybe a slight uh upward take from uh 1:22:21 1 hour, 22 minutes, 21 seconds the you know the change in the the way we are uh expecting the new verticals to grow. 1:22:27 1 hour, 22 minutes, 27 seconds Sir, so do we have any annual price reduction contract with our customers that as the volume oftake uh increases we will uh reduce the price per unit? 1:22:38 1 hour, 22 minutes, 38 seconds No, it's generally uh from you know from day one it is like I said most of the cases it is warm plus so irrespective of 1:22:46 1 hour, 22 minutes, 46 seconds what the costing is uh irrespective of what our fixed costs are today uh the 1:22:52 1 hour, 22 minutes, 52 seconds product pricing is done basis on the uh uh boom costing and in our investor presentation page 1:23:01 1 hour, 23 minutes, 1 second number six it is mentioned that we have acquired a graduate tech to shenan marketing and distribution s are we planning to enter the B2C segment? 1:23:12 1 hour, 23 minutes, 12 seconds No, no, no, no. So that we've always said that B2C is something that uh uh we don't intend to enter. So this is again 1:23:20 1 hour, 23 minutes, 20 seconds going to be B2B. Uh so project uh basically project business and project business is driven by uh you know all 1:23:28 1 hour, 23 minutes, 28 seconds the uh the architects, the designers and uh that kind of uh space. Uh so the intent of acquiring Gravis uh with you 1:23:37 1 hour, 23 minutes, 37 seconds know the partner that we've uh acquired is basically for uh entering that particular niche high-end uh segment and uh for the export market. 1:23:50 1 hour, 23 minutes, 50 seconds Understood. So, so like you mentioned that 75% of the total revenues from lighting business out of which roughly 1:23:58 1 hour, 23 minutes, 58 seconds let's say 23% is your lighting ODM business. So roughly the remaining 50% of the revenue 1:24:07 1 hour, 24 minutes, 7 seconds that is uh there that is basically instore lighting uh for the most part. 1:24:14 1 hour, 24 minutes, 14 seconds So that is uh not in store lighting it is a mix of uh instore lighting. It is a 1:24:20 1 hour, 24 minutes, 20 seconds mix of mix of other commercial lighting projects that we do, the refrigeration commercial refrigeration category that 1:24:27 1 hour, 24 minutes, 27 seconds we do and the exports also. So the exports uh to you know the lighting products to the entire Middle East in 1:24:36 1 hour, 24 minutes, 36 seconds fact to the US market also. So all of that put together. So again there there are multiple categories and uh you know geographies. 1:24:45 1 hour, 24 minutes, 45 seconds Sorry to interrupt. I have a request Mr. to please rejoin the queue sir. Sure. 1:24:51 1 hour, 24 minutes, 51 seconds Thank you. The next question is from the line of Danch Takul from Fentress Capital. Please go ahead. 1:25:05 1 hour, 25 minutes, 5 seconds Mr. Takur, please go ahead with your question. Am I audible? 1:25:11 1 hour, 25 minutes, 11 seconds Yeah, your voice is breaking a lot. Uh, okay. Uh is it audible now? 1:25:18 1 hour, 25 minutes, 18 seconds Yes, please go ahead. 1:25:21 1 hour, 25 minutes, 21 seconds So just wanted to get the clarity on the AITA margin. So we are expecting to continue the quarter four margins or the 1:25:28 1 hour, 25 minutes, 28 seconds uh margins of fiscal year 26 uh going ahead into fiscal year 27. 1:25:34 1 hour, 25 minutes, 34 seconds So uh when I was referring to the EITA margins uh so I was referring to actually uh the 1:25:44 1 hour, 25 minutes, 44 seconds year ear yearound margins that we have uh achieved. Hello. 1:25:53 1 hour, 25 minutes, 53 seconds Uh okay sir. Thank you so much. Thank you so much for the certification. Yeah. Thank you so much. Yeah. Thank you. Thank you so much. 1:26:00 1 hour, 26 minutes Thank you ladies and gentlemen. That was the last question for today. With that, I now hand the conference over to Mr. Bib Singh for closing comments. 1:26:12 1 hour, 26 minutes, 12 seconds Thank you all for making it uh to our quarterly ending goals for FI26. 1:26:19 1 hour, 26 minutes, 19 seconds If there are any further queries, please feel free to reach out to Stellar Advisor. Thank you again 1:26:28 1 hour, 26 minutes, 28 seconds one and all. Have a nice day. Thank you very much. Thank you. Thank you everyone. 1:26:35 1 hour, 26 minutes, 35 seconds Thank you on behalf of IQ Technologies Limited. That concludes this conference. 1:26:40 1 hour, 26 minutes, 40 seconds Thank you for joining us and you may now disconnect your lines.