Mold-Tek Technologies Ltd — Q4 FY26

Mold-Tek Technologies Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=c1RLEXNb9OQ Published: 15 hours ago

0:01 1 second Ladies and gentlemen, good day and welcome to the Mold Tech Technologies Limited 4Q FY26 conference call hosted by MK Global Financial Services Limited. 0:14 14 seconds As a reminder, all participant lines will be on the listenon mode and there will be an opportunity for you to ask 0:21 21 seconds questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then 0:30 30 seconds zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Abishekia 0:38 38 seconds from MK Global Financial Services Limited. Thank you and over to you sir. 0:46 46 seconds Good evening everyone. Uh I would like to welcome Mr. Lakshman Rao, chairman and managing director and thank him for this opportunity. I shall now hand over the call to him for the opening remarks. 0:57 57 seconds Over to you, sir. 1:02 1 minute, 2 seconds Welcome all to the Q4 and annual results of Malt Technologies. Thank you very much for 1:09 1 minute, 9 seconds taking your time. Uh I'm very glad to inform you that there's a good turnaround in the Q4. While uh last year 1:17 1 minute, 17 seconds Q4 we made a loss of uh about uh 1.6 6 crores. This year we ended up with a 1:23 1 minute, 23 seconds profit of 2.28 in spite of a huge MTM loss of 4 crores on rupee depreciation. 1:32 1 minute, 32 seconds Uh profits are up by uh up from minus 1.62 plus 2.3 crores in this quarter. 1:39 1 minute, 39 seconds The overall year has ended up uh at 10 crores uh total profitability packed as again as 12 crores 12.16 last year a 1:48 1 minute, 48 seconds drop of 17%. But the fourth quarter results have improved our overall 1:54 1 minute, 54 seconds performance and uh compared to uh Q4 of last year uh main contributors are for 2:03 2 minutes, 3 seconds growth are Bil numbers in topline for last five months have been added and apart from that there is a improvement 2:12 2 minutes, 12 seconds civil I mean wonderful improvement in civil uh work on hand and the execution of uh quantum of work which has been done in the civil structural division. 2:24 2 minutes, 24 seconds Uh a couple of major reforms what we have taken up during this last 6 months. 2:29 2 minutes, 29 seconds I would like to highlight before we go for the question answer session is that we have taken a call on reduction of 2:37 2 minutes, 37 seconds MEES mainly in BAW auto sector where the company has been bleeding for last uh at 2:44 2 minutes, 44 seconds least one and a half two years uh due to reduced workflow in BW auto automo uh 2:52 2 minutes, 52 seconds especially due to the electrical vehicles and new models uh are not been up to the mark in the automobile 2:59 2 minutes, 59 seconds industry. So having seen the trend continuing in the month of Jan we have taken a call to reduce the uh size 3:08 3 minutes, 8 seconds downsized the team from 160 to 60 people gradually and by end of March the team has been downsized from 160 to 60. 3:17 3 minutes, 17 seconds Whereas the good news in MES is poles and towers and electrical substation work is ramping up rapidly in United 3:25 3 minutes, 25 seconds States and the team from 45 to 50 people last year are currently around 80 people and growing. 3:32 3 minutes, 32 seconds So line of BW automobile has been several cartiled considerably starting from end 3:41 3 minutes, 41 seconds of March. Uh that is starting from this new financial year 26 27 which will uh 3:48 3 minutes, 48 seconds which in fact caused more than a 7 cr loss during the last financial year. So that will not be there for the going 3:57 3 minutes, 57 seconds forward uh in future. And coming to the next uh positive development is the work 4:03 4 minutes, 3 seconds on hand for uh civil uh work has increased substantially over the last quarter. Uh while the last year 4:12 4 minutes, 12 seconds beginning of the month year it was about 4 million. It's gone up to 5 million uh at the end of this uh quarter. So there's a substantial increase in the 4:21 4 minutes, 21 seconds work on hand for the civil which is forcing us to improve the productivity, enhance the team size and ramp up the uh 4:30 4 minutes, 30 seconds systems to improve the productivity. Uh going forward I'm sure positive that uh uh these uh initiatives will improve the 4:39 4 minutes, 39 seconds overall performance of the company to a great extent. Now I let uh question answer session to start wherein we can uh share more information. 4:51 4 minutes, 51 seconds Thank you very much. We'll now begin the question and answer session. Anyone who wishes to ask a question may press star 4:58 4 minutes, 58 seconds and one on the touchtone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use 5:08 5 minutes, 8 seconds handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question cue assembles. 5:19 5 minutes, 19 seconds The first question is from the line of Pranit from SJ Investments. Please go ahead. 5:26 5 minutes, 26 seconds Uh hi management. Uh thank you for the opportunity. So I want to ask some basic questions before I'm new track new to tracking the company. I wanted to 5:34 5 minutes, 34 seconds understand the evolution of how the services changed over the last 15 years because in the past commentary the management has mentioned that after the acquisition of RMM and crossroads we 5:43 5 minutes, 43 seconds have gotten into the steel structure business I mean steel structure service business so I was wondering what did we do before exactly and how have we 5:50 5 minutes, 50 seconds changed our service in terms of value addition or whatever it might be from the last 15 years let's 2010 what did we 5:58 5 minutes, 58 seconds do before that and after 2010 how have been been changing our service after that like that's a drugs and all of that. 6:05 6 minutes, 5 seconds Yeah, that's a big question but I'll definitely answer uh in detail. In uh until 2010 we were providing mainly the 6:14 6 minutes, 14 seconds engineering services for a pre- needing metal buildings that is industrial sheds and in this commercial uh sheds that was 6:22 6 minutes, 22 seconds uh much lower end of the spectrum of engineering services and from acquisition after acquisition of RMM and 6:29 6 minutes, 29 seconds uh crossroads in 2008 and 2011 I think uh respectively we have started getting 6:36 6 minutes, 36 seconds into structural steel detailing or detailing that is basically high-rise buildings, commercial or uh residential 6:43 6 minutes, 43 seconds buildings of high-rise that means multi-sured buildings and industrial plants. So that is mainly using steel as 6:51 6 minutes, 51 seconds a uh basic material and of course panels and other things come as a closer of the 6:58 6 minutes, 58 seconds steel structure. So that steel structure is detailing is was what our main forte from 2010 to 2000 even today that 7:08 7 minutes, 8 seconds continues to be our main contributor to revenues and slowly the PEMD that is pre metal buildings has shrunk to hardly 5 7:17 7 minutes, 17 seconds to 10% of our revenue I would say 5% of our revenue and mees mechanical engineing services we started about 10 7:24 7 minutes, 24 seconds years ago uh by entering into poles and towers and electrical structures in the beginning and later on we diversified 7:33 7 minutes, 33 seconds into automobile that is BIW body in white that is basically the uh assembling of the body of the an 7:42 7 minutes, 42 seconds automobile. So this we worked for several companies including Tesla uh BMW, Mercedes, you can name Scoda all 7:52 7 minutes, 52 seconds these companies in Europe uh we have worked through their uh tier one vendors. So there we provide uh robotic 8:00 8 minutes manufacturing support uh in a sense how to place the robots and what is the movement of the robotics. We simulate 8:07 8 minutes, 7 seconds the whole thing and both 3D and 2D and all to the tier one suppliers who provide 8:16 8 minutes, 16 seconds this in turn the robots to the automo companies. So this is a very involved and uh uh I would say high value added 8:25 8 minutes, 25 seconds uh service uh include using engineers and software which is running into uh 8:33 8 minutes, 33 seconds millions of rupees uh cost. So that projects were initially in the year up 8:39 8 minutes, 39 seconds to 2023 I would say were running and growing rapidly but since uh last 8:46 8 minutes, 46 seconds two years there's a tremendous drop in the demand as the EV that electrical 8:53 8 minutes, 53 seconds vehicles have not really taken off well in the world uh in general and even if they taken over the new sign uh models 9:03 9 minutes, 3 seconds were not introduced uh as rapidly as it was till 23 32 24. So for last two years 9:10 9 minutes, 10 seconds MEES especially due to the big team of 160 to 200 people uh who are in the automobile sector was bleeding uh our 9:19 9 minutes, 19 seconds profitability. So a call was taken recently in January to scuttile that team to 60 and just handle the projects 9:28 9 minutes, 28 seconds that are coming in once in a while but that 60 will be good enough number to handle the work that is coming our way. 9:35 9 minutes, 35 seconds Meanwhile in the other areas we have started structural designing that is apart from just doing detailing we 9:43 9 minutes, 43 seconds provide the connection designs for the fabricators and builders and we also slowly taken up few areas where number 9:51 9 minutes, 51 seconds design is also done. So recent acquisition of BI in Tampa has added us services in the residential building 9:59 9 minutes, 59 seconds design side in both residential building inspections, designs and uh expert 10:06 10 minutes, 6 seconds services uh in which B is having expertise and a 40 member team. This company we acquired recently in November 10:14 10 minutes, 14 seconds 25 and that company has started contributing to the uh company's performance this year uh for last five 10:22 10 minutes, 22 seconds months. In the last five months they have sizable revenues but of course the profitability is marginal because uh 10:30 10 minutes, 30 seconds their last quarter is always uh typically a low quarter where in December and January uh November 10:37 10 minutes, 37 seconds December January typically workload comes down and it picks up from uh end of winter that is from March onwards. So 10:47 10 minutes, 47 seconds uh this one time uh acquisition cost acquisition cost and the interest thereon is also charged in the current 10:55 10 minutes, 55 seconds uh uh quarter which has resulted in uh lowering output I mean number as a P PBT 11:04 11 minutes, 4 seconds otherwise the PBT has uh got up gone up from minus 42 lakhs last year 11:11 11 minutes, 11 seconds gone up from minus 42 to 552 lakhs and uh PBT minus2 crores last quarter last 11:19 11 minutes, 19 seconds year called Q4 to 379 lakhs in this uh Q4. This is also impacted in fact 11:28 11 minutes, 28 seconds otherwise it would have been a very healthy bottom line by almost a 4 crores MTM loss we suffered due to the sudden 11:36 11 minutes, 36 seconds depreciation of rupee in the to the tune of almost four to five rupees in the last quarter of the financial year. So 11:44 11 minutes, 44 seconds this is briefly the history and now currently the company has uh structural 11:50 11 minutes, 50 seconds designing, structural detailing and uh I would say poles and towers and uh 11:57 11 minutes, 57 seconds uh substation design and detailing as the main lines of activity and bil has added residential part of the structural spectrum. 12:09 12 minutes, 9 seconds understood sir just a followup regarding this I'm not from a mechanical so I don't understand the difference between designing and struct let's say detailing and design could you explain how the 12:18 12 minutes, 18 seconds structural design is different from detailing because in the past concourse you mentioned let's say detailing is around 2% and structural design is around 2%. So by adding this are we 12:27 12 minutes, 27 seconds expanding the overall contract value with the customer and how was exactly different in terms of skill set and the execution. 12:33 12 minutes, 33 seconds The structural designing means the moment an architect decides the building size and dimensions. Structural designer steps in to design the building for the 12:42 12 minutes, 42 seconds safety safety of uh construction wind loads earth loads the soil loads soil 12:49 12 minutes, 49 seconds bearing capacity based upon the land use and the land uh strength. they design the members. The members means columns 12:56 12 minutes, 56 seconds and beams and pllins or other members of the main structure. So once these structures are designed and they are all 13:04 13 minutes, 4 seconds being tested for connection design that means the connections at different uh joints of these members have to be 13:12 13 minutes, 12 seconds tested by a structural designer. So we graduated from detailing to connection design but not completely providing the 13:21 13 minutes, 21 seconds member design. We have done few projects in member design with couple of PS. We already have P means a professional engineer certified in America, USA and he has to certify in each state of USA. 13:33 13 minutes, 33 seconds So that particular PE can only stamp the drawings. So we have couple of PES on our roles who are authorized to certify 13:41 13 minutes, 41 seconds in more than 20 states in United States and these two people contributed towards structural designing area. Structural 13:49 13 minutes, 49 seconds designing is a very high end compared to detailing. What is detailing? Detailing means once the designer gives the entire 13:56 13 minutes, 56 seconds member details. How do you fabricate it in the shop floor? How do you manufacture? What is the dimension of 14:03 14 minutes, 3 seconds each column and the beam or the connection members plates gusset plates all these details are given in very 14:13 14 minutes, 13 seconds detailed way so that the shop floor in the fab shop can manufacture those items and put them together in the site that 14:21 14 minutes, 21 seconds is called erection. So the erection drawings also will be given so that they know which part has to be kept in the ground floor and what is the ground 14:29 14 minutes, 29 seconds floor beams, ground floor columns, gasets, plings and then over that the second floor like that we will provide 14:37 14 minutes, 37 seconds complete set of drawings in a coded manner so that the erection team also knows how to put these things to make it 14:44 14 minutes, 44 seconds a building. So this is called design detailing. A detailed way of providing dimensions for fabrication for erection 14:53 14 minutes, 53 seconds and then complete assembly of the building is called detailing. Providing the member designing means what member 15:01 15 minutes, 1 second that means 5 in 4 in 3 in web thickness whatever that will withstand the load of 15:08 15 minutes, 8 seconds the building expected people who may walk on the building or the live loads dead loads self load all these 15:15 15 minutes, 15 seconds parameters of safety are taken care by structural design and this has to be certified by a professional engineer. So 15:23 15 minutes, 23 seconds these structural designing services attract very high rates something like 100 to even if it is outloaded to India 15:33 15 minutes, 33 seconds $70 to $80 an hour compared to $25 to $30 an hour you can charge in a detailing uh service. I hope I'm very clear now. 15:43 15 minutes, 43 seconds Yes sir. That's very clear unders understood that part of it. So right now when we are pitching in terms of our sales would we be approaching an 15:50 15 minutes, 50 seconds architecture firm or we who do we exactly approach would we direct client or would be a fabricator because in the past you mentioned that we used to go to 15:57 15 minutes, 57 seconds the fabricator in terms of getting our detailing orders. So how was a pitching and sales team changed to a different customer? How how did that change? 16:07 16 minutes, 7 seconds Yes for detailing services fabricators are good enough. They are the people generally given the power to assign the 16:14 16 minutes, 14 seconds detailing and get it done because they are responsible to erect the building structure in place given the site. So 16:22 16 minutes, 22 seconds fabricator is our primary contact for detailing services. But when it comes to designing services, builders and architects become our primary contact. 16:31 16 minutes, 31 seconds But generally while doing detailing also we get in touch with the EO that engineer on record and architect for 16:39 16 minutes, 39 seconds various uh doubts and various clarifications. So we are in touch with architects and builders also in general. 16:46 16 minutes, 46 seconds The EVO generally is appointed by builder. So he clarifies the doubts while detailing. So this is the same set 16:53 16 minutes, 53 seconds of people who deal in general but our service range is increased when you go for designing. So our focus has to move 17:01 17 minutes, 1 second from fabricator to builders and uh architects in case we provide designing services. So that is where the initiative has been taken now for last 17:10 17 minutes, 10 seconds couple of years and now we have a team of 40 to 50 40 45 structural designers in India and two or three in USA who are 17:20 17 minutes, 20 seconds front ending the design uh team and this 40 member team in India is supporting their orders. So slowly we are building 17:29 17 minutes, 29 seconds up the design team and even we are in the lookout to acquire a design company in USA. Uh in the process we acquired Beril which is designing company come inspections company in residential zone. 17:41 17 minutes, 41 seconds They are not into high-rise buildings. 17:43 17 minutes, 43 seconds They make only oneplus 1 on 1 + 2 maximum that is threetory buildings for small malls or small shopping areas and 17:53 17 minutes, 53 seconds for schools and residences. So our portfolio of high-rise building design is still not fully occupied. That is 18:01 18 minutes, 1 second where we are still looking for an acquisition. However, we are slowly building up our own team but that would take a little longer time. 18:10 18 minutes, 10 seconds Understood sir. And in terms of civil revenues, how are they split between structural design versus detailing today? And like in this 18:17 18 minutes, 17 seconds structural designing today is hardly 8 to 10% of the overall civil uh services. 18:25 18 minutes, 25 seconds That mean detailing constitutes 90%. Uh design constitutes about 10% as of now. 18:31 18 minutes, 31 seconds It used to be 100% detailing 3 4 years ago. 18:36 18 minutes, 36 seconds Understood sir. But so ideally where do you want the split to go in the next 3 to four years? because you mentioned that design generally you'd love to have yeah design 18:44 18 minutes, 44 seconds services to grow up rapidly because they have high value added in uh nature it generally takes time to prove yourself 18:52 18 minutes, 52 seconds and become a designer so now I think we passed the phase of proving ourself at least in the last 3 four years because 19:00 19 minutes there are quite a few buildings wherein our people have contributed to the design if not fully partially so those 19:07 19 minutes, 7 seconds references are helping us to pitch for full projects also So uh we are at the wedge of breaking into some full project 19:14 19 minutes, 14 seconds design work which can run into good numbers in terms of uh revenues in terms of hourly rates. Uh but an acquisition 19:22 19 minutes, 22 seconds will be a faster way. We are in talks with one company uh which is closely located to Atlanta our office in 19:29 19 minutes, 29 seconds Atlanta. So like that we are looking at both organic and inorganic waste to grow in that and I wish to see in 3 four 19:38 19 minutes, 38 seconds years at least 30 to 40% of our revenues coming from design. 19:43 19 minutes, 43 seconds Understood. So you mentioned uh in commentary you also people are a huge part of this entire industry in terms of design talent is what you sell. So if 19:52 19 minutes, 52 seconds you acquire these companies how are you able to retain them? Is it usually through contracts that they stay with you or how does it work in terms of retaining the employees? 20:01 20 minutes, 1 second uh retaining employees in India is like any other IT engineering services companies face the challenges the 20:09 20 minutes, 9 seconds attrition rate is in double digits but not very high and uh we also have an in-house training uh general manager 20:16 20 minutes, 16 seconds with a big team uh I mean reasonably big team uh of uh uh recruitment and 20:23 20 minutes, 23 seconds training in fact we have even an almanac there's one uh portal which we provide for the students in the final year and 20:32 20 minutes, 32 seconds we encourage them to take the uh almanino um completing the course while in their 20:39 20 minutes, 39 seconds final year. So that from those colleges we pick up at least 70 to 60 to 75 uh engineers every year which constitutes 20:47 20 minutes, 47 seconds almost 10% 8 to 10% of our employee strength. So they will be ready to take over the positions as and when we find 20:55 20 minutes, 55 seconds attrition. So we build up our own uh engineers because they need to be trained in American standards. 95% of 21:02 21 minutes, 2 seconds our projects are American uh in civil in mechanical more than 50% are from Europe because automo companies 21:11 21 minutes, 11 seconds are mainly in Europe but now as we are concentrating more on poles and towers and substations the 80 to 90% of that work comes from USA. 21:23 21 minutes, 23 seconds how we can handle the attrition. 21:27 21 minutes, 27 seconds Understood. And in the US also because I'm pretty sure you have a huge team like with Bed also you have a large team in US. How are you planning on retaining them because again they might leave with 21:36 21 minutes, 36 seconds change in management and all of that right? So how was that? 21:38 21 minutes, 38 seconds Actually I'm glad to say that now we have completed five months of burial acquisition. Not even a single person resigned from the 40 member team. So 21:47 21 minutes, 47 seconds that's a proof that our uh HR practices and our the way we give freedom to the engineers and uh marketing team over 21:55 21 minutes, 55 seconds there uh is really made I mean clumatized to our culture and we ourselves also know because of our 22:03 22 minutes, 3 seconds previous two experience of acquisition uh we know how to handle the people and how to make sure that they are motivated 22:10 22 minutes, 10 seconds to perform. So actually uh burial is now getting slowly integrated. Two of our engineers are currently in Tampa and uh 22:19 22 minutes, 19 seconds four people have been trained here in India. So this six member team is uh joined that 40 member burial team to 22:26 22 minutes, 26 seconds enhance their abilities mainly in designing because they were main focus was in inspection. Uh little they are 22:33 22 minutes, 33 seconds hardly six out of the 40 people are in design. So now that six is becoming 12. 22:38 22 minutes, 38 seconds So their designing services can enhance which is more revenue generating than inspection or other services they 22:46 22 minutes, 46 seconds provide. So like this we have our own way of handling people and managing them to stay with us and our US team is only 22:56 22 minutes, 56 seconds other than very hardly seven member team and they have been there with us for more than seven eight years now. 23:04 23 minutes, 4 seconds Sorry to interrupt. Please rejoin the queue for more questions. 23:11 23 minutes, 11 seconds The next question is from the line of Madur Radhi from Counter Cyclical Investments. Please go ahead. 23:19 23 minutes, 19 seconds So, so this year our AITA fell to the level last seen 11 years back in 2015 uh 23:28 23 minutes, 28 seconds which is 10 crores. So I hope sir we were hoping that last year itself was the bottom and this year was a year of 23:36 23 minutes, 36 seconds recovery but unfortunately this year last year our hved and and this year 23:43 23 minutes, 43 seconds again it halved sir so I hope in F27 it will not become 5 cr aa no no you are wrong you're not seeing 23:52 23 minutes, 52 seconds the correct figure thea is 20 crores now uh down from 23 crores last year there is a downfall but It's not to an extent 24:00 24 minutes of 10 crores. The IITA is 20 crores. PBT for the full year is 13.5 and uh PAT is 24:08 24 minutes, 8 seconds uh 10.57 crores. You are looking at PAT. 24:14 24 minutes, 14 seconds IITA is 20 crores. Consolidated also uh IITA is 19.64 crores and PAT is uh 10.09. 24:24 24 minutes, 24 seconds Sir, I'm looking at your consolidated cash flow statement with the operating profit before working capital changes. 24:30 24 minutes, 30 seconds It is showing 13.79 cr and then the lease liabilities are 3.17 cr. So basically it is 10 and a half cr or 24:39 24 minutes, 39 seconds thereabouts is thea for the year in the cash flow he's saying 13us consolidated cash flow. 24:48 24 minutes, 48 seconds I will ask our CFO service to answer to you later. uh but ITA in the in the 24:55 24 minutes, 55 seconds financials is 19.64 64 consolidated maybe. 25:00 25 minutes Anyway sir, the the point being that whether it is 10 or 11 or 12, the point is that uh I 25:08 25 minutes, 8 seconds mean the performance of the company is really uh quite disappointing to put it 25:14 25 minutes, 14 seconds mildly. Now sir also uh now 2.9 lakh preference shares that were issued at 25:21 25 minutes, 21 seconds 164 rupees that has also been cancelled sir. So that also is a huge vote of no confidence in the company. 25:32 25 minutes, 32 seconds See what happens is the investor's call. 25:35 25 minutes, 35 seconds See when the price was issued it was given on the 6 months average and two weeks average which is higher should be 25:41 25 minutes, 41 seconds taken. So it was 164 but the price was hovering around 130 at the time of uh approvals that have come from BSC. So 25:50 25 minutes, 50 seconds the investor has taken a call not to invest in the that half million dollars which he committed. So we cannot uh 25:57 25 minutes, 57 seconds judge his uh you know uh decision because we can't influence anybody to make a forcible investment. So that is 26:05 26 minutes, 5 seconds why the issue of uh the preference ratio is canled. 26:10 26 minutes, 10 seconds Understood sir. So now our receivables also have jumped a lot on a year on year 26:17 26 minutes, 17 seconds basis. they have basically doubled whereas our revenues have hardly increased by 40%. 26:26 26 minutes, 26 seconds So I hope this is temporary answer and sir I hope it is not out of desperation that we are just going out and doing 26:33 26 minutes, 33 seconds acquisitions because the standalone business is going nowhere so I hope that that's not the case. 26:40 26 minutes, 40 seconds Mr. You need not have such apprehensions. Actually if you see the Q4 to Q4 the jump in turnover is 81%. 26:49 26 minutes, 49 seconds From 32.6 crores last Q4 to in absolute rupes it is 59 crores 81%. Obviously 26:57 26 minutes, 57 seconds datas will increase. So that is one reason and acquisitions are strategic in nature. It is not desperation. There's 27:04 27 minutes, 4 seconds no need for desperation. The company is sitting on a pile of 25 to 30 crores of deposits. It has zero debt on the books. 27:12 27 minutes, 12 seconds There is no not even a working capital debt on the company's books and there is no desperation in the company. The company has strategically acquired a 27:20 27 minutes, 20 seconds residential side business with Americans who are handling with the peace and you know uh very qualified people and this 27:29 27 minutes, 29 seconds addition of residential will enhance our service range only not only industrial and uh high-rise we'll now able to 27:37 27 minutes, 37 seconds handle uh residential individual buildings uh small oneplus 2 kind of 27:43 27 minutes, 43 seconds office and other shops uh and schools and other buildings. So this is a strategic wave forward and any 27:51 27 minutes, 51 seconds acquisition would take couple of quarters at least to combine together and the loss whatever you are seeing in the consolidation is also because of the 28:00 28 minutes one-time provision we have to put the acquisition costs also as per the recent uh company act the acquisition cost that 28:08 28 minutes, 8 seconds means the due diligence cost fees paid to the auditors fees paid to the uh due 28:15 28 minutes, 15 seconds diligence lawyers All these costs are also have to be taken in the first quarter. So this is why the number looks negative otherwise it is neutral I would 28:24 28 minutes, 24 seconds say and the contribution will start falling in from the next few quarters. 28:29 28 minutes, 29 seconds So there is no desperation in acquisition and there's no need to hide the current performance also because the current performance is very healthy even 28:37 28 minutes, 37 seconds at uh uh 19.64 64 course IITA it's 11% decent IITA margin given the uh general 28:47 28 minutes, 47 seconds engineering services IITA it shot up last two years ago in 24 to 28% and I foresee similar kind of performance 28:56 28 minutes, 56 seconds coming up in next one or two years because of the tightening of the uh BAW team which has been bleeding the company 29:04 29 minutes, 4 seconds for last two years to the tune of about 78 crores every year and now it has been tightened into almost uh 60 people from 29:12 29 minutes, 12 seconds 160 people and also this uh improved uh flow of work for CES is going to improve the performance in the coming quarters. 29:23 29 minutes, 23 seconds Uh sir, now going forward for FI 27 sir what is the outlook sir? Can we do something like 250 K kind of top line 29:32 29 minutes, 32 seconds which you indicated in the EGM recently that uh due to barrel itself we can 29:38 29 minutes, 38 seconds touch around 225 K and then 10 15% organic growth in the business. So so that leads us to around 250 K of do you think it's a uh realistic number? 29:52 29 minutes, 52 seconds Yeah mi this quarter itself we have done 59 crores. So multiplying by four you see 240 is easily feasible. So given 30:00 30 minutes some growth here and there hitting 250 crores I think is certainly possible. 30:06 30 minutes, 6 seconds And what is the EITA margin? That is the main question because the revenue it does not matter. What matters is the profits. 30:14 30 minutes, 14 seconds Yeah I think EITA margin should move from 11 to at least 15%. Is our uh projection. 30:23 30 minutes, 23 seconds uh sir and uh also sir what is the thread that you see from AI now you see sir the IT index itself is at threeear 30:32 30 minutes, 32 seconds lows and all the big giants are at multi-year lows so so then where does it leave a small company like ours 30:41 30 minutes, 41 seconds I AI has no role as far as designing and detailing is concerned because it is not easy to just make a a based construction 30:51 30 minutes, 51 seconds nobody would take a risk at least for next 5 10 years. In my opinion, nobody would take the risk of constructing a building based on a data uh it may be 31:00 31 minutes done in manufacturing. It may be done on any other field of uh general uh manufacturing side or uh uh commercial 31:08 31 minutes, 8 seconds side but buildings as such are something which have to be literally designed by engineers and checked by detailers and 31:17 31 minutes, 17 seconds fabricated by people in the plants. So AI role in this is limited. Even if A comes, it might help us in reducing some 31:25 31 minutes, 25 seconds of the basic staff and A based software would be coming to the field and we being there for last 20 years in this 31:33 31 minutes, 33 seconds field, we'll be in the forefront of that uh software uh you know control or the improving our services with such 31:42 31 minutes, 42 seconds improved software. We are not software builders. First of all, I want you to understand we are service providers in engineering space and we use the 31:50 31 minutes, 50 seconds software provided by SDS and techla and other pro pro and uh solid solid works 31:57 31 minutes, 57 seconds like that. So they provide any AI based solution probably we'll use it and probably it may bring down our number of 32:05 32 minutes, 5 seconds people from let's say 1,000 to 800 or 900. it won't bring it down like in a uh software company and being in the 32:13 32 minutes, 13 seconds forefront of the business with 20 years of uh field experience in US uh construction industry we will derive the 32:22 32 minutes, 22 seconds benefits of AI if any so a disrupting the business is a misnomer what you have to understand is we are not a software 32:31 32 minutes, 31 seconds company we don't write code we don't develop any code for anybody we use the code and software developed by somebody 32:38 32 minutes, 38 seconds else to produce engineering designs and 3D models. From there we derive 2D and 3D output and check the correctness and 32:46 32 minutes, 46 seconds correct it thoroughly with a checker modeler QA uh three levels of checking. So this 32:56 32 minutes, 56 seconds area of checking is very where AI can help. If that help comes in the overall number of people might come down by 5 33:03 33 minutes, 3 seconds 10%. And we continue to do the job maybe with more accuracy. Even today our back charges are zero. That is a proof that 33:11 33 minutes, 11 seconds our quality has reached almost 100%. So not much of help from AI or threat also. 33:21 33 minutes, 21 seconds Thank you. Sorry for interrupting Mr. 33:24 33 minutes, 24 seconds Rati. Please rejoin the queue for more questions. 33:28 33 minutes, 28 seconds The next question is from the line of Ashoto Shukla from Kingstone Capital Management LLP. Please go ahead. 33:36 33 minutes, 36 seconds Hello. Yes. 33:38 33 minutes, 38 seconds Hello. Uh yeah, if you could provide update on acquisition of structural engineering company. 33:46 33 minutes, 46 seconds Uh as I told you one acquisition we did is only burial which is a structural designing and inspections and uh aliad 33:53 33 minutes, 53 seconds services in the residential space. So that acquisition was completed in November 25 and that team is getting integrated and a small team is being 34:02 34 minutes, 2 seconds created in India uh to handle their design work. Coming to the other structural that is high-rise building structural side we are in touch with 34:11 34 minutes, 11 seconds couple of the companies but not yet concluded anything. 34:16 34 minutes, 16 seconds Okay. And one more is there any progress on the revenue generation from mult intra interarch arch and affordable robotic partnership. 34:27 34 minutes, 27 seconds See the right from uh the days when we started unfortunately the trade talks between US and uh India are in a kind of 34:36 34 minutes, 36 seconds limbo and uh buildings which are supposed to be made by intraarch and uh provided other services by mult are all 34:45 34 minutes, 45 seconds come under uh uncertaintity and nobody knows what is the kind of uh uh duties that will be levied. So in this 34:52 34 minutes, 52 seconds uncertaintity the people in US who are very keen to use the Indian intra buildings and save their cars are not in 35:01 35 minutes, 1 second a position to take a decision that is why nothing much is happening in that direction. 35:07 35 minutes, 7 seconds Okay and one more uh what is our current CES and NES order in hand? 35:15 35 minutes, 15 seconds CES orders have shot up from actually it was $2.5 million when we started the 35:21 35 minutes, 21 seconds year. Uh in June 24 last year the hand uh work on hand was $2.84 million. Today the work on hand is close to $5 million. 35:31 35 minutes, 31 seconds So there is a jump of almost uh 60 70%. 35:36 35 minutes, 36 seconds Uh coming to mechanical side that is not a great jump it is rather a decline. uh in Q1 it was around 0.5 million and it's 35:44 35 minutes, 44 seconds currently at a quarter million. So that is one of the reasons why we cutiled our uh MES automobile team in the month of Jan Feb. 35:54 35 minutes, 54 seconds Okay. And one that is our main line is uh growing at a rapid pace of 70%. 35:59 35 minutes, 59 seconds Okay. Okay. And for school year 26 uh what are the revenues and eida for brail project engineering 36:08 36 minutes, 8 seconds bil alone stand alone uh they have done a turnover of uh 11 crores in rupees in 36:16 36 minutes, 16 seconds the Q3 22.49 Now 10.9. 36:21 36 minutes, 21 seconds So total is 22 crores. Yeah. 22.9. So almost 23 crores. 36:30 36 minutes, 30 seconds Okay. Okay. Thank you. 36:34 36 minutes, 34 seconds Thank you. The next question is from the line of Sam Singh from TPF TPF Capital. 36:42 36 minutes, 42 seconds Please go ahead. 36:43 36 minutes, 43 seconds Uh yeah, good afternoon. Thank you for the opportunity. Uh first question was uh I you know I think our revenues are 36:50 36 minutes, 50 seconds and our majority of our costs are wages rupees. So I could not understand why rupees appreciation would have a negative effect on our P&L. 37:01 37 minutes, 1 second there the five rupees per dollar uh it tounts to almost 5 to 4.9 crores for the 37:08 37 minutes, 8 seconds quarter forwards which were done in the past because at uh 85 level 89 level 92 level various levels we have done the 37:17 37 minutes, 17 seconds forwards in the past and uh uh those forwards are to be taken as a MTM that is mark tomark uh market uh valuation it 37:27 37 minutes, 27 seconds is not a uh it is an optional loss which has to be taken. It is not a loss in fact but it has to be taken as per the 37:35 37 minutes, 35 seconds accounting standards. So that is why the operation profits have dipped. 37:40 37 minutes, 40 seconds So we what is our hedging policy exactly? 37:44 37 minutes, 44 seconds That's why we are also decided to stop the forwards uh and limit the forwards only to 25 to 50% of company's turnover. 37:52 37 minutes, 52 seconds Earlier it used to be 100%. And there were years where company made 2 to three crores profits but this year it has uh 37:59 37 minutes, 59 seconds fully gone uh adverse because premiums are lesser than the depreciation. Rupee 38:06 38 minutes, 6 seconds was uh somewhere around 83 84 when we started the current financial year and ended at 95 uh at the end of the year 38:14 38 minutes, 14 seconds which was not anticipated and the premium was hardly 3 rupees. So net effectuh it was 83.42 42 when we started 38:23 38 minutes, 23 seconds in the Q1 of uh 2425 which was uh almost 95 85 to 95 now so almost 10 rupees 38:30 38 minutes, 30 seconds depreciation in the full year okay I mean you know I uh just from outside perspective I think uh I think 38:38 38 minutes, 38 seconds if you're making profits on hedging in the past I think we've included that in our IBIDA though it's not really operational income so uh you know either 38:47 38 minutes, 47 seconds we should not continue with that policy or uh you are not uh it is let investors know that what the operational eida is 38:55 38 minutes, 55 seconds not including any income from hedging hedging uh no I think your point is well taken yes uh that's what we discussed in the board 39:03 39 minutes, 3 seconds meeting also that operation ITA should be considered and uh these uh uh what do you call the MTM losses or gains should 39:12 39 minutes, 12 seconds be shown separately so the company is planning to adopt the same from this current financial year okay great so that you will be able to get a clear 39:20 39 minutes, 20 seconds picture of the operation margins and uh operation EITA. 39:25 39 minutes, 25 seconds Got you. And on the MEES business uh you said uh I think we we had 7 crores of loss this year. Could you also tell us what was the loss uh in the this quarter? 39:36 39 minutes, 36 seconds Uh in this quarter what is the MS loss? 39:40 39 minutes, 40 seconds fores 39:51 39 minutes, 51 seconds 1.7 1.8 8 crores 185 $200,000 that's about 1.9 crores okay so we are still running at about a 40:00 40 minutes 8 cr loss uh even at the exit no that is now stopped that team has been closed from April 1st March 31st 40:08 40 minutes, 8 seconds was the last date got okay okay and uh just some uh some uh details on the on barrel uh what you 40:16 40 minutes, 16 seconds said the revenues was 23 kores that was uh for the full year of integration or for quarter 4 no no This for the five months 40:23 40 minutes, 23 seconds for the five months and for the quarter four what was the revenue and what was the month for bet the quarter four turnover was 11 crores 40:32 40 minutes, 32 seconds as I said it's a beginning of the year generally the workflow is less for them so we had a loss of about 70 lakhs 40:40 40 minutes, 40 seconds $70,000 okay and was there any quarter three had some uh you know um acquisition expenses were there acquisition 40:49 40 minutes, 49 seconds also uh quarter three had taken acquisition expense of close to $90,000. 40:56 40 minutes, 56 seconds In spite of that the come that quarter we had a profit and but there were no there were no acquisition expenses in quarter 4. Right. 41:04 41 minutes, 4 seconds In quarter four uh of our Indian quarter four we have not taken any acquisition expenditure. It was taken in Q3 itself. 41:12 41 minutes, 12 seconds Okay. And you know one of the uh um the issues with this preferential allotment was that it was not just any investor 41:20 41 minutes, 20 seconds right it was uh M. Richard Leon who's the who's the pro who was the promoter of battle. Uh so his uh uh you know so I 41:29 41 minutes, 29 seconds would like to understand the fighting did not work out anymore but uh how have we how we are we going to make sure that 41:36 41 minutes, 36 seconds we is there a retention agreement or some sort of a lockup uh to make sure that him and his team do not leave uh leave the organization. 41:45 41 minutes, 45 seconds You you guessed it very correct. Yes, we have put that monies in the lock in uh uh as the standby guarantee so that 41:53 41 minutes, 53 seconds about 30% of uh the acquisition monies are kept aside for a minimum working time of 3 years uh continued service 42:01 42 minutes, 1 second with the company and can you just talk a little bit about how uh the integration is coming along in terms of I think we plan to outsource about 50% of that of 42:10 42 minutes, 10 seconds the of those costs to India. So uh you know any if you could just talk where we are in that process. 42:16 42 minutes, 16 seconds As I said I was telling you there are 40 people there in United States and hardly four five members six member team has been now created in India and one or one 42:26 42 minutes, 26 seconds person has returned back. So there's only one more person is now currently in Tampa and once the training is over those engineers including the American 42:34 42 minutes, 34 seconds engineers will come here and train a team of 15 to 20 people which would take at least uh couple of quarters. So 42:41 42 minutes, 41 seconds hopefully by Q4 we'll have a team ready in India and which will be working uh and uh supporting burial's expansion. Uh 42:49 42 minutes, 49 seconds once they expand their abilities in design uh definitely they will become very reasonably profitable. 42:58 42 minutes, 58 seconds Thank you Mr. Singh. Please rejoin the queue for more questions. 43:06 43 minutes, 6 seconds The next question is from the line of Manish Kala for as an individual investor. Please go ahead. 43:13 43 minutes, 13 seconds Hello. Thank you. Uh sir, I have a couple of questions. Uh one is uh we are halfway through uh quarter one. So just 43:22 43 minutes, 22 seconds wanted to understand if we see similar MTM losses like what we saw in Q4. That's one. No. Second. 43:30 43 minutes, 30 seconds Yeah. Let me answer this. The rupee stayed somewhere around 95.5. to now uh as up from 95.15 at the end of March 43:39 43 minutes, 39 seconds 31st. So there will be a little bit few lakhs of uh MTM losses but not like uh 4 crores which we suffered in uh Q4. 43:50 43 minutes, 50 seconds Okay. And uh can you give us some flavor on the new MSC agreement that we've entered into in terms of the revenue 43:58 43 minutes, 58 seconds potential, the contract failures and so on with whom? 44:04 44 minutes, 4 seconds No. So the results that you published today, it uh talks about some uh new MSA agreement that you've entered with one of the leading uh engineering companies. 44:15 44 minutes, 15 seconds So MSA agreement this one. 44:18 44 minutes, 18 seconds Yeah. Uh with that based Oh, that is with Daniel Koris in Delhi 44:26 44 minutes, 26 seconds uh for providing them manpower support in mechanical engineing services. So now 44:34 44 minutes, 34 seconds they have given a mandate for 20 people and we have fulfilled three and some more uh u manpower uh provisions are 44:42 44 minutes, 42 seconds being made and uh selections are underway. 44:47 44 minutes, 47 seconds So what is the exact terms of agreement as in the re revenue potential the contract period? 44:52 44 minutes, 52 seconds So revenue potential would be the contract period is 1 to 3 years and uh revenue potential is considerably decent. I wouldn't say it's huge but 45:01 45 minutes, 1 second compared to MES numbers it is considerable it can reach a level of about half million dollars in uh next 45:08 45 minutes, 8 seconds one years time parano all thank you sir 45:15 45 minutes, 15 seconds thank you the next question is from the line of pranit from SJ investment please go ahead 45:23 45 minutes, 23 seconds uh thank you so much for the followup again uh regarding uh so in terms of barrel the management has mentioned that it's mostly permitting and a little bit 45:30 45 minutes, 30 seconds of design at this point of time. So out of the 5.6 million last year, how was it split between permitting revenue was the structural design revenue 45:39 45 minutes, 39 seconds for uh the permitting inspections and other services contribute around 80%. Uh design services are around 20%. 45:51 45 minutes, 51 seconds Understood. So the outsourcing can only be done for the structural design part of it, right? So approximately a million dollars worth of no permitting also a part of permitting 45:58 45 minutes, 58 seconds work can also be done from uh detailers and support staff in India but not the inspection which contributes almost 50%. 46:06 46 minutes, 6 seconds So the remaining 50% of the works can be gradually outsourced to India. 46:11 46 minutes, 11 seconds So about 20% is design 30% is permitting and 50% is inspection is there 46:19 46 minutes, 19 seconds broadly. Yeah broadly unders. uh so right now when we are in terms of uh scaling up so in terms of 46:28 46 minutes, 28 seconds India business also where you say I understand mechanical there have been headwinds in terms of the auto industry but to have been doing good so what has then the towers revenue for this year 46:36 46 minutes, 36 seconds and where do you think it will scale up to and civil engineering revenue and ps to revenue for last year must have 46:44 46 minutes, 44 seconds been anywhere around uh 800 to 100 1 million that's less than a million 46:51 46 minutes, 51 seconds around 800k but this year it should cross 1.5 million to 2 million dollars. 46:59 46 minutes, 59 seconds Unix sir and in terms of a team in the US so I understand barl is 40 so how many of our engineers like beyond barl 47:06 47 minutes, 6 seconds what is our team size in the US and will there be any sizing in terms of size there no need to there are hardly seven people 47:13 47 minutes, 13 seconds they're mainly in business development and three people out of seven are project management that is engineers who can converse with the client and clarify 47:22 47 minutes, 22 seconds the question answers between the client and our team in India so that team downsizing is not there on uh Anvil uh 47:30 47 minutes, 30 seconds rather the downsizing has become essential only in the automobile uh part of our mees team. 47:39 47 minutes, 39 seconds Understood. And in terms of let's say sales so how are we planning on growing the sales team because I understand we're growing the engineering team and all of that but in terms of sales how 47:48 47 minutes, 48 seconds are we planning on going the reason and contain the main strategic alliance with viril one of our uh ideas was to use their 47:57 47 minutes, 57 seconds sales team to work for our uh bread and butter detailing and designing. So they have a four member a pretty strong uh 48:05 48 minutes, 5 seconds sales team having 10 to 15 years of experience in uh uh US structural designing and drafting and inspection 48:13 48 minutes, 13 seconds services. So they have a very deep connect which can be utilized to improve our line of steel uh detailing and 48:21 48 minutes, 21 seconds designing also because all sen they are civil engineers and this also falls in the civil domain. In fact, I'm really 48:28 48 minutes, 28 seconds excited to see how their sales team can add value because an American salesperson with knowledge of structural 48:36 48 minutes, 36 seconds uh designing can do wonders in uh steel detailing outsourcing. So we are really looking forward to their contribution. 48:43 48 minutes, 43 seconds They're just picking up the fundamentals of steel detailing and steel designing and they are able to now understand our 48:51 48 minutes, 51 seconds services better and in fact we are calling couple of them here to India to understand the operations better and they also moving to Atlanta. Our office 48:59 48 minutes, 59 seconds is in Atlanta uh from Tampa to go there and understand from our BD team how to pitch for our projects. So the synergy 49:08 49 minutes, 8 seconds while it may come through residential design in the long term immediate short-term gain what I'm looking at is their marketing services which uh their 49:17 49 minutes, 17 seconds team can really push our services in the other domains. 49:22 49 minutes, 22 seconds Understood. So you expect them also to be selling your services cross-selling. 49:26 49 minutes, 26 seconds Obviously they are our employees so they can also do our uh services. 49:31 49 minutes, 31 seconds Got it. But like in terms of scaling up our business, I understand that we have been scaling up very consistently over time. The thing is there have been let's 49:38 49 minutes, 38 seconds say other players like Ovation that came in much later than you in the business, but they're able to scale up substantially to at least half your 49:45 49 minutes, 45 seconds revenue says in the double digit crer the growth numbers can be higher. Uh 49:55 49 minutes, 55 seconds ovation numbers are half our size even today though they are almost 8 n years old. So that team uh has also gone 50:04 50 minutes, 4 seconds through the route of acquisition. They acquired a company in uh nearby Atlanta. 50:09 50 minutes, 9 seconds Uh that is a detailing company with about 8 to 10 members and then they started building up their Indian team. 50:15 50 minutes, 15 seconds So that's how they grew and because of the smaller numbers the percentage growth looks uh higher. 50:22 50 minutes, 22 seconds Got it sir. Understood. So next year let's say uh what do you think the barrel margins would be next year and in 50:30 50 minutes, 30 seconds terms of and how how will the domestic business margins change for the next year? 50:35 50 minutes, 35 seconds Uh we hope that next year barrel margins would stay there because they were having around 9 to 10% uh profitability. 50:43 50 minutes, 43 seconds I don't think it will uh change beyond 10%. because it will take at least couple of quarters for us more to add 50:51 50 minutes, 51 seconds real value from India and take substantial work in uh design from executed from India. So this year I 50:59 50 minutes, 59 seconds would conservatively take it at around 8 to 10% uh margin for burial but our 51:06 51 minutes, 6 seconds engineering service from India now that we cutiled the uh whatever excess staff 51:12 51 minutes, 12 seconds in uh MEES uh both the MEES and uh civil uh from India that's our core business 51:20 51 minutes, 20 seconds standalone business will certainly go up by at least 15 to 20% and ITA in the region of 15 to 16%. 51:30 51 minutes, 30 seconds Got it sir. So but grow so right now in terms of barrel so you're see you're expecting from five to the 7 million 51:38 51 minutes, 38 seconds mark. So but what exactly is driving that because you like just what valuation are we exactly doing from to get from to get them from 5.6 to 7 just 51:47 51 minutes, 47 seconds that they already have orders in hand or are we are they also deploying new resources from India that helping them scale to that level? 51:54 51 minutes, 54 seconds Yeah, your second part is correct answer that we'll be scaling up the Indian team which will enhance a design uh services 52:01 52 minutes, 1 second is the uh uh line we are trying to focus on. So that makes sense because design 52:10 52 minutes, 10 seconds is where they are lacking but they have ample opportunities to pick up the design as an inspector as a uh estimator 52:18 52 minutes, 18 seconds as a permit provider. the builders and uh individuals who associate in their own building construction would love to have the same person as a design 52:26 52 minutes, 26 seconds engineer but unfortunately they don't have a strong team that is uh where we are pitching in and our PS and our 52:33 52 minutes, 33 seconds structural engineers uh will be able to take up that line. 52:38 52 minutes, 38 seconds So in terms of the overall project value let's say the costing so in the overall project value let's say it's 100. So what percentage would be inspection cost? What would be detailing? And what 52:47 52 minutes, 47 seconds would be structural design in terms of the overall cost for the overall project? 52:52 52 minutes, 52 seconds Uh cost for project inspection will be uh hardly 2 to 3%. And detailing will be another 2 to 3%. Design can be 3 to 4%. 53:02 53 minutes, 2 seconds Overall put together it will be 8 to 9%. All put together in uh United States. Permitting would be 2% I would say. 53:09 53 minutes, 9 seconds detailing uh I mean inspection maybe 3% 4% could be design so 8 to 9% more 53:18 53 minutes, 18 seconds so as I see these all all of these can be bundled in terms of one service in term expanding our revenues right so so far in terms of our Indian over the last 53:26 53 minutes, 26 seconds three years were you able to notice these combo sales in terms of the structural designers detailing have they played out or they're essentially different customers that we have been 53:33 53 minutes, 33 seconds catering to in terms of design and detailing services yes in designing and detailing services. 53:39 53 minutes, 39 seconds We moved up a notch to connection design. That means apart from just providing the fab drawings and shop drawings and erection drawings which is 53:47 53 minutes, 47 seconds a simple detailing company's job, we moved up a notch into connection design which again involves structural uh 53:54 53 minutes, 54 seconds designers to calculate the loads and forces and accordingly suggest the size of the members for connections. A step 54:02 54 minutes, 2 seconds forward is the full design and that is where we have done partial work through our PES and the team here. Items like 54:09 54 minutes, 9 seconds staircases and miscellaneous structures uh like podiums and uh uh uh pergolas 54:17 54 minutes, 17 seconds and stuff like that we have done uh structural design also but a main structure design for the complete body 54:23 54 minutes, 23 seconds we require uh PE support. So we have couple of pees but uh in America most of the companies still depend on design 54:32 54 minutes, 32 seconds companies in United States and they don't mind member design and connection design being off outsourced which is the work we are now currently doing by 54:41 54 minutes, 41 seconds acquiring a structural designing company in steel. We will be in a position to complete the entire range of service. 54:51 54 minutes, 51 seconds Sorry for interrupting. Please rejoin the queue for more questions. 54:57 54 minutes, 57 seconds The next question is from the line of Madur Radi from Counteryical Investments. Please go ahead. 55:04 55 minutes, 4 seconds Thank you for the opportunity once again. So, so there's 5 million order book that we have currently sir. How is it split between Mtech and Barl right now? 55:14 55 minutes, 14 seconds Sorry, your voice is a little muffled. 55:16 55 minutes, 16 seconds Sir, there's 5 million order book that we have currently. How is this uh split between barrel and mult? 55:23 55 minutes, 23 seconds No, this completely mult order book. 55:25 55 minutes, 25 seconds Whatever $5 million currently what I shown in the press notes completely 55:33 55 minutes, 33 seconds for mult technologies. 55:37 55 minutes, 37 seconds Oh, okay. Got it. And so there is no auto with bar right now. No, see beril auto book will be there. 55:46 55 minutes, 46 seconds Maybe we didn't mention that. We'll check up on that. It will not be as high as this because there is more of 55:52 55 minutes, 52 seconds inspection services and uh detailing services. Hopefully it will be somewhere around 2.3 million. A month's work will be there for them at at any given time. 56:03 56 minutes, 3 seconds So maximum half million I guess. Got it. 56:08 56 minutes, 8 seconds So also our other expenses have increased quite a lot. So if even if I consider the 4 mill 4 crx 56:16 56 minutes, 16 seconds loss as well as some kind of like 90 lakh rupees of expenses associated with acquisition that has still increased by 56:23 56 minutes, 23 seconds 50 from 22 crores with 33 crores on a y basis. So why is that so much increase? 56:31 56 minutes, 31 seconds Uh this could be mainly due to I'm guessing it's software costs and MTM loses included and MTM loss is removed. MTM loss is 56:38 56 minutes, 38 seconds almost 7 crores. Even you remove the seven crores from 38 uh the other expenses would be 31 as 22 56:46 56 minutes, 46 seconds that's mainly because of increased bin cost biling acquisition cost also has come other 56:53 56 minutes, 53 seconds oh bas other expense also are included in this so that's one of the reasons so a detailed disc break up if you want you 57:00 57 minutes can write to survey atmaltchindia.com mult CFO it's there CFO it is there in the public domain you 57:07 57 minutes, 7 seconds can write to our CFO He will provide the details and sir also where do we see our employee expenditures going forward and 57:16 57 minutes, 16 seconds is 12 to 13 added on a quarterly basis with this bar acquisition and for FI20 where should I where should I look at 57:24 57 minutes, 24 seconds employee cost for the whole year again your voice is a little muffled I wanted to understand the employee cost 57:33 57 minutes, 33 seconds so where should I look at the employee cost number for F27 and is 1230 13 per hour on a quarterly basis added through this burial 57:41 57 minutes, 41 seconds acquisition. Is that understanding correct? 57:45 57 minutes, 45 seconds Uh employee cost is 73% as of uh this financial year. This includes burial's five months numbers. So if you want full 57:55 57 minutes, 55 seconds details of uh burial probably sir now I wanted to understand that our clients pay us on a per hour basis. 58:06 58 minutes, 6 seconds No we don't work on per hour basis. Uh typically we take projects on quotation basis. Uh that means based on the number 58:14 58 minutes, 14 seconds of hours what we estimate to execute the project. We charge around $30 per hour 58:21 58 minutes, 21 seconds and quote and once the quotation is finalized probably there may be a little bit 2 3% of negotiation and then the 58:28 58 minutes, 28 seconds orders are awarded. So this is based on project to project not on man hourly rate. 58:35 58 minutes, 35 seconds Okay. Okay. And sir now that this uh preferential allotment that we are making worth 4.75 cr it has been cancelled. So this preferential 58:44 58 minutes, 44 seconds allotment we were making in you for purchasing the stake of this gentleman or it has nothing to do it was a independent transaction. 58:53 58 minutes, 53 seconds No, it was a independent transaction wherein he showed interest to invest uh that money but later on because of the 59:00 59 minutes price differential and market conditions he couldn't uh make it possible. So then 59:07 59 minutes, 7 seconds we have time limits like up to 31st of uh May that is the time BS and NSA has given us. So because he didn't transfer 59:15 59 minutes, 15 seconds the monies before that we have to cancel on 1st of May 31st of 30th of April we first unders sir and sir if we see our 59:24 59 minutes, 24 seconds receivables on in September there were 30 Kores and so and same it increased to 59:32 59 minutes, 32 seconds 41 K in March. So I think September numbers very inclusive of this new acquisition that we did. 59:40 59 minutes, 40 seconds September numbers not inclusive only the December numbers are inclusive of two months of uh uh burial November and December. 59:48 59 minutes, 48 seconds November and December. November 1st was the effective date of acquisition. So November and December are included include acquisition cost 59:56 59 minutes, 56 seconds but they include the acquisition cost that's in the Q4. Sir, so this year what is the uh salary hike that in the whole 1:00:05 1 hour, 5 seconds organization we are expecting including barrel? 1:00:09 1 hour, 9 seconds Uh including burial I can't comment because beril has not yet come for that discussion but for the local uh Indian 1:00:18 1 hour, 18 seconds teams we have settled it around 8.5 to 9%. 1:00:22 1 hour, 22 seconds It has already it is affecting in Q4 numbers or in Q1 it will start affected in Q4 provision. Okay. 1:00:31 1 hour, 31 seconds Okay. So going forward uh the uh at least the standalone uh employee expense will not change significantly on a quarterly basis going forward. 1:00:41 1 hour, 41 seconds Yes, you can uh seek any further data from uh service our CFO. Uh he will provide necessary information. 1:00:54 1 hour, 54 seconds Thank you. The next question is from the line of summer Singh. Please go ahead. 1:01:00 1 hour, 1 minute Uh thank you for the followup please. Uh the inspection revenue that we that barrel earns is this uh what part of 1:01:07 1 hour, 1 minute, 7 seconds that is related to the SP 4D requirements? 1:01:11 1 hour, 1 minute, 11 seconds Sorry. Uh is is part of this revenue related to the SB40 mandate in Florida uh regarding inspections? 1:01:20 1 hour, 1 minute, 20 seconds S40 what is that? SC 40 I think it was the uh the Florida U had required a mandate where I think there was some 1:01:28 1 hour, 1 minute, 28 seconds sort of accident in 2022. So they're required to do in uh all residential uh 1:01:35 1 hour, 1 minute, 35 seconds condominiums or was supposed to do an inspection uh by the end of five. I'm not sure if that's been completed or 1:01:43 1 hour, 1 minute, 43 seconds not. So it was like a regulatory mandate to uh to for homeowners to complete this inspection. 1:01:50 1 hour, 1 minute, 50 seconds Okay. I'm not aware of the SC40 but there is a FEMA and what is the other project? 1:01:56 1 hour, 1 minute, 56 seconds FDM FDM EM that is Florida Emergency State Department. 1:02:01 1 hour, 2 minutes, 1 second Florida Florida Emergency State Department. Yes, that's a government project. 1:02:04 1 hour, 2 minutes, 4 seconds Government project and uh FEMA is uh Florida emergency department like there are two entities. So there are two 1:02:12 1 hour, 2 minutes, 12 seconds entities uh for which both uh our company is authorized and one of the service providers for FMEA and uh 1:02:21 1 hour, 2 minutes, 21 seconds FDM FDM these two I I'll I'll email you about the about the FB40 as well. I'll be 1:02:29 1 hour, 2 minutes, 29 seconds curious to know of uh it was a mandate that came out in 2022 so that said that all uh condominiums in Florida were yes yes yes yes I understand what Mr. 1:02:38 1 hour, 2 minutes, 38 seconds Cleo Kennan was also mentioning this. 1:02:40 1 hour, 2 minutes, 40 seconds It's been there in their books for last 3 years and now also they have pending projects which have now turning into 1:02:47 1 hour, 2 minutes, 47 seconds more into design actually. So now their inspections are completed and wherever the inspections are completed and defects are found their projects will be 1:02:56 1 hour, 2 minutes, 56 seconds converted into design now. So that's one of the reasons why we are keen he was also keen to join with us to increase his design strengths. 1:03:05 1 hour, 3 minutes, 5 seconds Yes. So that was my question. Is there any way to figure out where we are in that timeline? Because if we are still in the middle middle or beginning of 1:03:13 1 hour, 3 minutes, 13 seconds this uh ta uh tailwind of revenues that would be great but if we are sort of at the end of it then you know maybe better revenues would see decline going forward. 1:03:23 1 hour, 3 minutes, 23 seconds Uh no they are in the middle actually I would say the first phase of inspections are all completed just their payments also received in these last couple of 1:03:31 1 hour, 3 minutes, 31 seconds months. So the second phase of design thanks to that government closure for a few months uh nothing much happened in 1:03:38 1 hour, 3 minutes, 38 seconds the last five six months and now it's against uh restarting. Got it. Okay. And uh two more questions. 1:03:45 1 hour, 3 minutes, 45 seconds One was uh we were supposed to uh you know move into a Nashik office and I think there was something savings of 1 12 crores a year doing that. So uh could 1:03:53 1 hour, 3 minutes, 53 seconds you just update? Yeah, the building the building site has been acquired couple of years ago and uh we have applied for municipal clearances already. Plans are 1:04:01 1 hour, 4 minutes, 1 second initially approved. Final approval is expected by end of this month. Uh ground clearance is already done. Hopefully in 1:04:08 1 hour, 4 minutes, 8 seconds June we'll be breaking the ground and by next uh this final end of financial year the building should be up and ready. So 1:04:15 1 hour, 4 minutes, 15 seconds probably the cost savings of around 2 two and a half crores uh peranom can acrewue in the next financial year 27 28. 1:04:23 1 hour, 4 minutes, 23 seconds Got you. And the last question from my side you know if we compare our suite of products to uh you know pinnacle uh where do we stand and you know compared 1:04:32 1 hour, 4 minutes, 32 seconds to them and you know where are the some spaces that we still need to catch up on? 1:04:38 1 hour, 4 minutes, 38 seconds In fact it's a good question. uh when compared it to beril we have noticed that a lot of areas where we can improve 1:04:44 1 hour, 4 minutes, 44 seconds upon especially our internal uh I support the tool which we use to monitor the productivity of people and already 1:04:53 1 hour, 4 minutes, 53 seconds we have started implementing some of the techniques here to improve the productivity and uh a strict vigilance 1:05:00 1 hour, 5 minutes on uh uh shifts and uh monitoring the productivity on a weekly basis instead of monthly basis has already started and that is showing good results in April. 1:05:11 1 hour, 5 minutes, 11 seconds Uh again we could clock uh at least 10 to 15% better productivity in April and going forward an incentive based uh 1:05:19 1 hour, 5 minutes, 19 seconds mechanism are also designed along with the weekly review of uh work done and we hope that the productivity should 1:05:27 1 hour, 5 minutes, 27 seconds enhance considerably in the financial year 2627. These are some inputs from burial practices and their tools which 1:05:35 1 hour, 5 minutes, 35 seconds they use to monitor their inspection and other uh design services. 1:05:40 1 hour, 5 minutes, 40 seconds Sir, I was asking you to compare our suite of products to Pinnacle Infoch. Pinnacle. Yes. 1:05:49 1 hour, 5 minutes, 49 seconds No. There's a company called Pinnacle Infot. What do they are into? 1:05:55 1 hour, 5 minutes, 55 seconds There have been solutions for EC. They are based out of uh out of uh I think Mr. Padwari is the the promoter. 1:06:04 1 hour, 6 minutes, 4 seconds Uh-huh. 1:06:06 1 hour, 6 minutes, 6 seconds And not really they are mainly into BIM solutions. That's what I see here. That's right. That's right. 1:06:12 1 hour, 6 minutes, 12 seconds Yeah. BIM is again you know building information modeling wherein you provide the services of electrical lines, 1:06:19 1 hour, 6 minutes, 19 seconds plumbing lines, mechanical electrical uh uh auxiliary equipment like lifts, power 1:06:26 1 hour, 6 minutes, 26 seconds connections, switches and stuff like that. It is nothing to do with uh uh structural detailing and designing. It's 1:06:34 1 hour, 6 minutes, 34 seconds more of beam building information model. But would this also not be a you know sort of another u sort of product suit that we 1:06:42 1 hour, 6 minutes, 42 seconds can also uh in fact we have a small team of beam people around five to 10 people uh in our team wherever the client insist on 1:06:51 1 hour, 6 minutes, 51 seconds us to do some little BIM work we do it because uh BIM one way is good other way it is crowded and being it's a low-end 1:07:00 1 hour, 7 minutes software like CAD is used uh there are many players uh in that uh particular uh 1:07:06 1 hour, 7 minutes, 6 seconds domain. So, BIM as it is as a standout uh standout uh service uh is not very lucrative in my opinion. 1:07:18 1 hour, 7 minutes, 18 seconds Got it. Thank you, sir. Thank you for the indication. 1:07:24 1 hour, 7 minutes, 24 seconds Thank you. In the in the interest of time, that was the last question for the day. I now hand the conference over to the management for closing comments. 1:07:34 1 hour, 7 minutes, 34 seconds I'm really thankful for very insightful questions today especially couple of uh 1:07:40 1 hour, 7 minutes, 40 seconds uh questioners or uh uh investors or who are online are really uh have depth 1:07:48 1 hour, 7 minutes, 48 seconds in-depth knowledge it looks like and I'm really happy to hear uh uh some of their inquisitive questions but let me 1:07:56 1 hour, 7 minutes, 56 seconds reassure you the company is all set for a much better performance going forward thanks to the two major things. One is 1:08:04 1 hour, 8 minutes, 4 seconds burial acquisition which is going to start add value from coming quarters. 1:08:09 1 hour, 8 minutes, 9 seconds Second is our uh uh decision to cutile the flab in the MEES division which 1:08:16 1 hour, 8 minutes, 16 seconds itself can add about 7 to8 crores back to the profitability and uh improved productivity systems which I just 1:08:24 1 hour, 8 minutes, 24 seconds explained which we have adopted from April onwards are showing results uh in increasing the productivity with the 1:08:31 1 hour, 8 minutes, 31 seconds same number of people to the extent of 10 to 15% now and our target is to improve the productivity by at least 20% 1:08:38 1 hour, 8 minutes, 38 seconds % in this financial year which can substantially improve the bottom line. 1:08:43 1 hour, 8 minutes, 43 seconds So we hope to see uh show you better performance in the coming uh quarters 1:08:49 1 hour, 8 minutes, 49 seconds and uh if our plans to expand into structural engineering also happen in a way like what it happened with Beril uh 1:08:57 1 hour, 8 minutes, 57 seconds we'll be certainly seeing a different uh segment or level of performance from Mtech in the coming mult technologies in 1:09:05 1 hour, 9 minutes, 5 seconds the coming future. Thank you very much for all of your interest and wish you a great evening. Bye-bye. And thank you MK 1:09:14 1 hour, 9 minutes, 14 seconds uh for arranging this uh meeting. Uh thanks Abishek. 1:09:21 1 hour, 9 minutes, 21 seconds On behalf of MK Global Financial Services Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.