Tara Chand Infralogistic Solutions Ltd — Q4 FY26

Tara Chand Infralogistic Solutions Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=a16sYF09wlk Published: 6 days ago

0:01 1 second Ladies and gentlemen, good day and welcome to the Q4 and FY26 earnings conference call for Tara Chand Intra Logistic Solutions Limited. 0:13 13 seconds As a reminder, all participant lines will be in the listenonly 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 zero on your touchstone phone. 0:33 33 seconds I now hand the conference over to Mr. Ankit from Stellar Investor relations. Thank you and over to you sir. 0:42 42 seconds Good afternoon everyone and thank you for joining us today to discuss Q4 and FI26 business performance. We have with us senior management team represented by 0:50 50 seconds Mr. Dr. Himman Shu Agarwal, full-time director and chief financial officer. 0:56 56 seconds Before we proceed with this call, I would like to mention that some of the statements may this which call may be forward-looking and may involve risk and uncertainties. 1:05 1 minute, 5 seconds The company also undertakes no obligation to update any forward-looking statements to reflect developments that occur after the statement is documents 1:13 1 minute, 13 seconds relating to the company's financial performance including investor presentation has been uploaded on stock exchange the company's website. I'll now 1:22 1 minute, 22 seconds invite Mr. Himmanu Agarwal to share his initial remarks on the company's performance and then we will open the floor for Q&A. Thank you and over to you sir. 1:32 1 minute, 32 seconds Thank you for the introduction Nit. Good afternoon ladies and gentlemen. I Himman Shu Aarwal the wholetime director and CFO of Tarachan Infra logistics 1:41 1 minute, 41 seconds solutions limited welcome you and thank you for being a part of the earnings call for the quarter and year ended 31st March 2026. I hope that all of you have 1:50 1 minute, 50 seconds had the opportunity to look at the press release and the investor presentation that were uploaded on the nse website earlier today. 1:58 1 minute, 58 seconds FY26 has been a year of disciplined growth for Tarajin. 2:03 2 minutes, 3 seconds Building on the strong momentum of FY25 where we had grown 45% yearonear. We have used this year to consolidate our 2:10 2 minutes, 10 seconds scale, deepen our operational leverage and expand our profitability margins meaningfully. Importantly, we have done 2:18 2 minutes, 18 seconds this while continuing to make significant capital investments that set the company up for the next leg of growth. The headline numbers reflect this clearly. 2:27 2 minutes, 27 seconds On the financial front, for the fullear FY26, our total income stood at 2881 million, up 13% yearonear. The revenue 2:37 2 minutes, 37 seconds from operations grew 14.9% to 2848 million, our highest ever annual revenue 2:44 2 minutes, 44 seconds till date. AIA grew 27% to 1,67 million, also the highest in our history. Our AIA 2:52 2 minutes, 52 seconds margins expanded by close to 400 basis points to 37.05%. 05% a milestone that we have been working towards 2:59 2 minutes, 59 seconds consistently. Profit after tax was 278 million up 12% from last year. Cash back 3:07 3 minutes, 7 seconds which I would highlight as the right metric for a capex heavy business like ours grew 27% to 870 million for the 3:14 3 minutes, 14 seconds year. Earnings per share for the year stood at 3.53 rupees against 3.15 in FY25. 3:22 3 minutes, 22 seconds For the quarter Q4 Q4 FY26 total income was 900 million up 10% yearonear. A beta 3:30 3 minutes, 30 seconds for the quarter was 316 million again up 23% with a margin of 35.1%. 3:37 3 minutes, 37 seconds PAD was at 87 million which was 11% more than what it was last year and cash pad for the quarter stood at 258 million up 3:45 3 minutes, 45 seconds by 21% yearonear I want to address one specific point up front on our last earnings call in 3:52 3 minutes, 52 seconds January I had shared that the company was targeting to close Q4 with revenue of 100 cr plus which would have been a first ever for us we finished the 4:01 4 minutes, 1 second quarter at 89.5 crores as reported today the shortfall is largely attributable to project ex execution timelines that 4:09 4 minutes, 9 seconds deferred a portion of our Q4 revenue about 10 crores into Q1 FY27. 4:15 4 minutes, 15 seconds Also, the revenue from our newly started Danuni stockyard did not take off in Q4 as per our earlier estimates. We expect 4:23 4 minutes, 23 seconds to realize these revenues in early FY27 and remain confident in our medium-term growth trajectory. FY26 was the second 4:32 4 minutes, 32 seconds consecutive year of meaningful capeex for the company. We deployed,434 million rupees during the year broadly 4:41 4 minutes, 41 seconds in line with our 1450 million that we had spent in FY25. 4:46 4 minutes, 46 seconds Cumulatively over the last two financial years we have added approximately 290 crores of capex taking up gross block 4:54 4 minutes, 54 seconds from 298 crores as of March 24 to 558 crores as of uh 31st March 2026 which is 5:03 5 minutes, 3 seconds an 87% increase in two years. During AY26, we've added 59 new machines, 5:10 5 minutes, 10 seconds including our largest 900 metric ton altering crane, 2 800 metric ton crawler cranes, additional piling rigs, aerial working platforms, and prime movers. 5:20 5 minutes, 20 seconds Our total fleet now stands at 427 machines, all owned and operated by us with an average age of less than six 5:27 5 minutes, 27 seconds years. This level of investment naturally has flow through implications on the PNF. Our depreciation for the 5:34 5 minutes, 34 seconds year rose 36% and our finance costs also rose 43% for the year which were both direct consequences of this fleet build. 5:43 5 minutes, 43 seconds This is the principal reason why our PAT growth at 12% is meaningfully lower than our IITA growth at 27% for the year. The 5:51 5 minutes, 51 seconds revenue from this fleet expansion will deliver progressively in FY27 and beyond. 5:57 5 minutes, 57 seconds Now to talk about the three segments that the company operates in. The first segment, segment A, equipment, hiring and projects, is now firmly the engine 6:05 6 minutes, 5 seconds of the company. For FY26, the segment revenue was 1,700 million against 1377 6:12 6 minutes, 12 seconds million in FY25, which is a 23% year-on-year growth. This segment now contributes 60% of overall revenue, up 6:20 6 minutes, 20 seconds from 56% last year. reported segmented margin which which includes specialized 6:25 6 minutes, 25 seconds services was 52% for FY26 versus 47% for FY25. The standalone equipment rental a 6:33 6 minutes, 33 seconds bit margin reached 62% for FY26 versus 55% in FY25 and 59% in Q4 FI26. The 6:44 6 minutes, 44 seconds average gross monthly rental yield for the year held steady at 3.05% which we believe is at industry best levels. Within the equipment rental 6:53 6 minutes, 53 seconds sectoral mix, cement is our largest contributor at 30% followed by metals and minerals at 25%, rural and urban 7:00 7 minutes infra at 20%, renewable energy at 15%, power at 9% and other sectors at 1%. The 7:08 7 minutes, 8 seconds most important shift here is the renewable energy which has grown from 5% in FY25 to 15% in FY26. Three times its 7:16 7 minutes, 16 seconds share reflecting the deep client relationships that we have built in this space over the last two years. 7:23 7 minutes, 23 seconds In our second segment which is warehousing and transportation, we clocked FY26 revenue of 1 lakh 6 1,65 7:31 7 minutes, 31 seconds million against 974 million last year. A 9% year-on-year growth. The total steel volumes handled rose to 11.56 million 7:40 7 minutes, 40 seconds metric tons for the entire year with Q4 alone accounting for 2.14 million metric tons. segment of beta margin held at 16% 7:50 7 minutes, 50 seconds and and Q4 in this year is uh especially lower uh in the revenue than the year 7:57 7 minutes, 57 seconds ago quarter primarily because our longunning 7-year RNL stockyard contract at Vishaka Patnham came to a planned 8:05 8 minutes, 5 seconds conclusion at the end of Q3 FY26 and a new contract with sale at Danuni stockyard was it was in its operational 8:12 8 minutes, 12 seconds stabilization phase through November and most of December operations of Danguni have now stabilized as I've already 8:19 8 minutes, 19 seconds stated and this represents our strategic entry into the eastern India through West Bengal. We expect this segment to deliver renewed growth in FY27. 8:29 8 minutes, 29 seconds Our third segment steel processing and distribution reported a revenue of 84 million for FY26 against 128 million in 8:36 8 minutes, 36 seconds FY25. As we have communicated throughout the year, we are consciously deemphasizing this lower margin business. Going forward, you should 8:45 8 minutes, 45 seconds expect this uh segment to remain a smaller contributor. 8:49 8 minutes, 49 seconds On the balance sheet front, our net worth grew to 1,492 million up by 278 million on the back of 8:57 8 minutes, 57 seconds retained earnings. The total borrowing stood at 100 1,384 million at the year end. Our net debt to 9:05 9 minutes, 5 seconds equity ratio held at 0.9 well within our stated ceiling of one. 9:11 9 minutes, 11 seconds Interest coverage ratio improved substantially to 10.3 times against 5.6 times in FY25 which is almost a doubling 9:19 9 minutes, 19 seconds over the year. Operating CLA cash flow grew 23% yearonear to 693 million as of March 26. 9:29 9 minutes, 29 seconds I want I want to address one more specific area here where we did not meet our own expectations that is receivable days. The actual number for FY26 closed 9:38 9 minutes, 38 seconds at 93 days against our target of about 80 days. The bulk of this stretch is attributable to receivables tied to the conclusion procedures of the RINL 9:47 9 minutes, 47 seconds stockyard contract with substantial recoveries expected through the first half of FY27. 9:53 9 minutes, 53 seconds Moreover, a majority of Q4 Q4 FY26 revenue was realized in March and as per standard payment terms, the receipts 10:01 10 minutes, 1 second against this revenue will come in during Q1 FY27 only. We will continue to work to bring this number back around 80 days during the course of FY27. 10:12 10 minutes, 12 seconds On 31st of March 2026, care ratings upgraded our long-term bank facilities rating to care tripleB stable from 10:20 10 minutes, 20 seconds CrystalB minus stable and our short-term rating to care A3 plus from Crystal A3 a year ago for the aggregate 160 cr 10:29 10 minutes, 29 seconds facilities of the company. This is an important external validation of the financial profile we have built and we look forward to continuing to engage with all our rating agencies. 10:39 10 minutes, 39 seconds In Q3, we incorporated Tarajan Metallics Limited, our 100% wholly owned subsidiary with an initial capital of 25 10:47 10 minutes, 47 seconds lakhs. This entity is positioned as a strategic diversification into metal processing with focus areas including 10:54 10 minutes, 54 seconds high frequency beams, fabrication and cutting and value added metal solutions along with servicing of HR and CR coils. 11:04 11 minutes, 4 seconds Operations will be based out of Nagpur. 11:06 11 minutes, 6 seconds We are presently in advanced discussions with both private and public sector clients and we expect to firm up our firm up our investment plan and 11:14 11 minutes, 14 seconds operational timeline over the next two to three quarters. Our promoter and promoter group shareholding 11:21 11 minutes, 21 seconds has strengthened to 71.64% as on 31st of March 3rd 2026 up from 11:28 11 minutes, 28 seconds 70.67% a year earlier reflecting the promoter group's continued conviction in the company's direction. Looking ahead 11:36 11 minutes, 36 seconds to FY27, our growth strate strategy rests on three pillars. Scale, specialize, and sustain. Under scale, 11:44 11 minutes, 44 seconds our planned capex of FY27 is in the range of 80 to 100 crores, building on the 290 cr deployed across FY25 and FY26 11:53 11 minutes, 53 seconds combined. Our deployment will continue to be calibrated to client demand and visibility across sectors. Under 12:01 12 minutes, 1 second Specialize, our differentiated fleet includes our 900 ton Alterin crane, 800 ton crawler cranes, 68 meter aerial 12:09 12 minutes, 9 seconds working platforms and the only self-holdled rubber tie gantries in the industry for warehousing. This high capability equipment creates entry 12:18 12 minutes, 18 seconds barriers for competitors and commands premium yields, which is what we what delivers our 62% standalone equipment 12:26 12 minutes, 26 seconds rentala margins. under sustained. We will maintain our disciplined focus on specialized service contracts in 12:33 12 minutes, 33 seconds equipment rentals while consciously staying away from the run-of-the-mill EPC projects that do not meet our return thresholds. 12:42 12 minutes, 42 seconds Our annual growth target remains 20 to 25% over the next three years with EITA margin sustained in the 37 to 38% band 12:50 12 minutes, 50 seconds and net to net debt to equity always below one ceiling. Our order book 12:57 12 minutes, 57 seconds executable in FY27 stands at 2,117 million of which 64% is from equipment 13:06 13 minutes, 6 seconds hiring and projects and 37% is from warehousing and transportation. Demand visibility across all our key sectors 13:12 13 minutes, 12 seconds remains strong. Before I open up for questions, let me leave you with three thoughts. One, FY26 has been a year 13:22 13 minutes, 22 seconds where we have prioritized quality of growth over absolute scale. We have expanded margins, strengthened our balance sheet, and earned a credit 13:30 13 minutes, 30 seconds rating upgrade. Two, the depreciation and finance cost burden you see today from the heavy capex of the last two 13:38 13 minutes, 38 seconds years is the company's investment for what comes next. Three, we remain committed to our medium-term targets and 13:45 13 minutes, 45 seconds our strategy framework, which is scale, specialize, sustain. With that, I will hand the call back to the moderator for 13:53 13 minutes, 53 seconds the question and answer session. Thank you. Thank you. 14:00 14 minutes We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on the touchstone telephone. 14:12 14 minutes, 12 seconds If you wish to remove yourself from the question queue, you may press star and two. 14:18 14 minutes, 18 seconds Participants are requested to use handsets while asking a question. 14:23 14 minutes, 23 seconds Ladies and gentlemen, we will wait for a moment while the question queue assembles. Thank you. 14:44 14 minutes, 44 seconds We take the first question from the line of Rohan Ma from FCOM family office. Please go ahead. 14:59 14 minutes, 59 seconds Mr. Ma, your line is in the talk mode, sir. Please proceed with your question. Hi, Amu. Am I ordering? 15:07 15 minutes, 7 seconds Yes, please. 15:09 15 minutes, 9 seconds Perfect. Great. Thank you so much for the opportunity and uh uh as a clarification uh firstly so uh in your 15:17 15 minutes, 17 seconds opening remarks the 10 k deferment that you spoke about uh what part of it is from specialized DPC and I also wanted 15:25 15 minutes, 25 seconds to get some color on how much has the the specialized DPC revenue been for FI26 for the year. 15:33 15 minutes, 33 seconds Okay, thank you for the question Mr. 15:35 15 minutes, 35 seconds Rohan. So uh predominant part of the 10 crores deferred is from the specialized services because the rental revenue does 15:43 15 minutes, 43 seconds uh get acred for the month itself or the quarter itself. So it is the project revenue that has been uh moved to the 15:50 15 minutes, 50 seconds next quarter because of project project execution uh delay activity at the client site. Uh so that answers the first part of your question and on the 15:59 15 minutes, 59 seconds second part for the financial year 26 the revenue from specialized services out of our overall equipment rental 16:07 16 minutes, 7 seconds segment uh the total revenue from specialized services stood at about 37.5 crores. 16:16 16 minutes, 16 seconds Okay. Great. uh also uh when it comes to you know the industry and various 16:23 16 minutes, 23 seconds sectors I just wanted to uh ask you what are the current demand trends you're observing within the equipment rental 16:29 16 minutes, 29 seconds space particularly given the uh cement and metals and minerals where the concentration uh has been higher and 16:38 16 minutes, 38 seconds also renewables where the mix has jumped from 5 to% so have you observed any further acceleration or softening in 16:47 16 minutes, 47 seconds inquiry momentum across these sectors and uh particularly how does your outlook shape for FI27 utilization? I'm 16:56 16 minutes, 56 seconds asking predominantly on utilization because if I see your current utilization that's about 83% in Q4 and generally Q4 utilizations are much 17:05 17 minutes, 5 seconds higher. So I just wanted to understand what exactly happened over there. 17:09 17 minutes, 9 seconds Okay. So uh to answer that Mr. Rohan again on the visibility side uh sectoral basis we are definitely seeing higher 17:18 17 minutes, 18 seconds demand across cement renewable and power those are the three sectors where I would say that uh 17:26 17 minutes, 26 seconds we we are seeing a good level of demand with the clientele and the kind of projects we are looking for um there uh 17:33 17 minutes, 33 seconds with even metals and minerals we haven't really seen any softening but uh what I do see is there is more aggression or 17:40 17 minutes, 40 seconds more speed uh if I may put it that way in the three sectors that I mentioned and uh the urban infra demand always 17:47 17 minutes, 47 seconds remains pretty uh good but that is where we do a pick and choose activity because again the margins are something that we want to safeguard as for the occupancy 17:56 17 minutes, 56 seconds levels that you talked about so 83% about 83 84% was the occupancy for the entire financial year for Q4 uh the occupancy was at about 87%. 18:11 18 minutes, 11 seconds Got it. Okay. Uh and uh on the uh upcoming business uh transition 18:18 18 minutes, 18 seconds metallics. So I wanted to also understand that uh given that eventually 18:24 18 minutes, 24 seconds uh the metallics uh subsidiary consolidates into the listed entity. How does uh the management think about the 18:33 18 minutes, 33 seconds potential margin dilution at a consolidated level given that you know currently your consolidated business 18:39 18 minutes, 39 seconds operates at a 37 to 38% AITA margin run rate. Uh is there any particular threshold internally when it comes to 18:48 18 minutes, 48 seconds scale or margin visibility within Tarachan Metallic below which you know this venture would be reconsidered from being pursued. 18:59 18 minutes, 59 seconds So to answer that um sir Rohan those those are the metrics that we are still working on and that is why in my opening remarks as well and uh I believe in even 19:08 19 minutes, 8 seconds in our deck we have uh mentioned that uh in the subsequent quarters we do understand that we'll have more uh 19:15 19 minutes, 15 seconds clarity to be given out publicly as to what what are the plans and um those plans uh would also then talk about 19:24 19 minutes, 24 seconds expected margins and how they would align with the strategy of the company going forward. 19:29 19 minutes, 29 seconds But yes um as we have always maintained that we want to sustain margins and not go into something which uh would which 19:37 19 minutes, 37 seconds would erode overall margins at a company level uh even if I talk about consolidated levels. So that is 19:44 19 minutes, 44 seconds something which is there in the uh in the discussions and um but uh to give any concrete numbers on what what we are discussing and how we going to go about 19:52 19 minutes, 52 seconds that that will that is still some time away and we will definitely come out with that. Sure. Sure. And last question 20:00 20 minutes from my end. Uh what are the two to three significant risks that you see for your business in the upcoming FI27? 20:09 20 minutes, 9 seconds Uh whether it is macro or operational or any sectors specific to this uh and you know how are you thinking about you know mitigating them or resolving them. 20:22 20 minutes, 22 seconds Right. So um to answer that um the specific risks um one obvious risk that 20:29 20 minutes, 29 seconds does come to uh my mind is the fluctuation in uh the foreign currency that is happening because of uh you know 20:37 20 minutes, 37 seconds geopolitical conditions across the world um which can impact our purchase of new equipment 20:46 20 minutes, 46 seconds because although we are buying in INR terms but at the end of the day the OEM I'm sure is doing a calculation based on 20:53 20 minutes, 53 seconds uh dollar or whatever their regular currency their national currency is. But to safeguard that or to digit that that 21:01 21 minutes, 1 second is where we get into annual purchase plans uh where we have specific clauses in place and uh those are part of strategy which I cannot disclose right 21:09 21 minutes, 9 seconds now. Uh so that that is something we safeguard uh in a way we have our discussions with our OEMs. Second uh on 21:16 21 minutes, 16 seconds a risk factor if I were to because unless there are major uh government policy changes that impact all sectors 21:25 21 minutes, 25 seconds across the board uh there's no specific risk per se that I see on the demand of the visibility that we are seeing with 21:32 21 minutes, 32 seconds our client and suddenly one one other if if I were to put out a risk one other risk would be if suddenly the clients 21:38 21 minutes, 38 seconds who we have the visibility for in the upcoming year um suddenly decide to not 21:45 21 minutes, 45 seconds execute a project which hasn't happened at least in in the history of our association with our clients. um that 21:53 21 minutes, 53 seconds that is a risk that we can factor in but that is something which is all hypothetical and it is hard to answer 22:00 22 minutes how we would safeguard against a probable scenario which hasn't really uh you know been the case um where we have 22:09 22 minutes, 9 seconds to think about going around mitigating that but on an overall level if I were to talk about mitigating those risks uh 22:17 22 minutes, 17 seconds when it comes to client level risks we are spread across sectors pretty um you know across the sectors across states 22:24 22 minutes, 24 seconds across regions. So we have got that uh opportunity that if something does not work out at a particular project with a particular client that can be always uh 22:33 22 minutes, 33 seconds our equipment can be mobilized to another sector or another client as the need may be. 22:41 22 minutes, 41 seconds Sure. Sure. Sure. And uh just one clarification on the specialized DPC front uh you spoke about that you know 22:49 22 minutes, 49 seconds this year in the previous calls that uh on the margin front uh we are focused on you know stabilizing the business and 22:57 22 minutes, 57 seconds ensuring that going forward you will pick projects which you know are not run-of-the-mill so uh your margin 23:05 23 minutes, 5 seconds guidance still stays at 18 to 20% and uh is that the case and what sort of growth are you targeting for FI27 from 23:13 23 minutes, 13 seconds specialized BPC as well as uh the segment B which is your warehousing and transportation And uh if you could also 23:21 23 minutes, 21 seconds give some color on uh net means and cost of funds that will be. 23:27 23 minutes, 27 seconds Okay. Uh so first to answer the specialized services part uh so our uh for the FY26 the um beta margin stood at 23:36 23 minutes, 36 seconds about 18% for for the specialized services and that is the band as we've always spoke spoke about 18 to 20% is something that we would uh continue to 23:45 23 minutes, 45 seconds target uh in that specific uh area and with regards to growth on specialized services um we are looking at that 23:52 23 minutes, 52 seconds sector also growing or that specific service offering growing by 20 to 25% in FY27 for sure because of the visibility 24:00 24 minutes and opportunities or the pipeline that we are seeing uh coming up as per our discussions with the client as for warehousing and transportation um it 24:09 24 minutes, 9 seconds grew at about 9 odd% last year uh but we do see it has the potential to grow at about at least 15% and that is what we 24:17 24 minutes, 17 seconds would be targeting uh for FI27 while also sustaining the the EIA margins there which have been at 24:26 24 minutes, 26 seconds about 16% but we would try to push them also to match these specialized services range of about 18 to 20%. 24:34 24 minutes, 34 seconds So that that was I think uh your first question and going to the next one the cost of funds uh is at about uh weighted 24:41 24 minutes, 41 seconds average would be about 8 to 8.2% uh is the cost of uh finance that we that the company has across the last financial year. 24:53 24 minutes, 53 seconds Sure. So and net yield uh net yields as we've talked about earlier also it all u is in the range of 25:01 25 minutes, 1 second about 2.2 2.1 to 2.2% if I'm not wrong 25:10 25 minutes, 10 seconds uh so there's been no change in the cost of funds after credit rating is is that uh correct? 25:18 25 minutes, 18 seconds Yeah. So the cost of fund uh of any new funding that we had come that comes into play uh that could benefit uh the 25:26 25 minutes, 26 seconds company. But then there are other factors apart from just the credit rating uh which are also dependent on you know RBI policies, bank policies. 25:33 25 minutes, 33 seconds But traditionally we've uh had a very aggressive uh cost of funding uh and we we deal with our banking in a way where 25:40 25 minutes, 40 seconds we ensure that we are uh in a best of the industry standards when it comes to cost of finance and that we will continue to maintain going forward. 25:51 25 minutes, 51 seconds Sure. Sure. Thank you so much. I'm wishing you all. Thank you. Thank you. 25:56 25 minutes, 56 seconds Thank you sir. We take the next question from the line of Ishett Desai from Ford's family office. Please proceed with your question. 26:05 26 minutes, 5 seconds Yeah. Uh thank you for the opportunity. 26:07 26 minutes, 7 seconds Himmanu. Uh Himachu. My first question was on the equipment rental side. Uh 26:13 26 minutes, 13 seconds what we have seen him in Q H1 of this financial year. Uh the margins were in the range of 63 64% a bit wherein uh H2 26:23 26 minutes, 23 seconds has been lower which is very unlikely this segment or or historical numbers. 26:29 26 minutes, 29 seconds Also Q3 in a way had some provisions built in uh which pulled down the margin a bit but Q4 margins at 59% seems to be the lowest of all four quarters so far. 26:40 26 minutes, 40 seconds So any I mean given that we were adding renewable energy contracts and also adding air tonnage machines one would expect the margins to improve a bit. So 26:49 26 minutes, 49 seconds any specific reason for a lower Q4 a bit number on rental side? 26:54 26 minutes, 54 seconds Yes. So um as you rightly pointed out in uh H1 we had higher margins and that was because the occupancy was steady uh in 27:02 27 minutes, 2 seconds uh H1. uh when I say steady is that there wasn't much movement although the rentals might not have been at their best levels but the uh movement of 27:11 27 minutes, 11 seconds machinery was limited whereas what we've noticed in uh Q4 specifically there were certain contracts of larger machines um 27:20 27 minutes, 20 seconds which were previously deployed that came to an end and there was a lot of movement or new projects that we were uh focusing on where we have to move 27:27 27 minutes, 27 seconds machinery so the cost aspect uh grew on that front uh and that is that is where uh the the beta um that you're seeing 27:35 27 minutes, 35 seconds which as if you look quarter on quarter throughout the quarters is at a lower range but overall if you would see um 27:43 27 minutes, 43 seconds still we've been able to maintain the 62% for the entire financial year which I I still feel is uh in the best-in-class uh category. 27:52 27 minutes, 52 seconds Sure. So I mean Q4 the kind of movements we have seen in Q3 Q4 is this normal for larger tonnage machines or we should 28:00 28 minutes consider that I mean moving forward 61 62% is the normal and this is more of oneoff kind of scenario for Q3 Q4 28:08 28 minutes, 8 seconds see ideally I would say the range 58 to 62% um that that is something that uh is something that you should look at 28:16 28 minutes, 16 seconds because um that is where dependent on when the movement happens and because of these large machines. The challenges that come in is although we anticipate 28:26 28 minutes, 26 seconds that time take taken might be about a month but at times even it leads into a month and a half or so because of the reasons where uh the machines of such 28:35 28 minutes, 35 seconds large capacity need to be dismantled then loaded onto you know trailers which are multitude of trailers mobilized to a 28:43 28 minutes, 43 seconds new site where there are gate path and other requirements. So all of those factors that go into play uh uh you know lead into eating up of the time uh where 28:52 28 minutes, 52 seconds the idling happens. So that that that is where uh the margins uh get eroded a little bit and the cost of transportation depending on where the 29:01 29 minutes, 1 second machine is currently located and where we need to deploy it also plays a big role there. So um that is why I would 29:08 29 minutes, 8 seconds say the range of 58 to 62 looks more reasonable. 29:13 29 minutes, 13 seconds Understood. Understood. Sure. And uh on the steel logistics and uh trans warehousing side uh you mentioned that 29:21 29 minutes, 21 seconds the Danuni warehouse didn't uh go as per the expected timeline because the order book which we saw on Q4 was about 33 K 29:29 29 minutes, 29 seconds but we ended up booking 26 27 K. So I wanted to understand uh more from a Q1 perspective uh are we still in that uh 29:36 29 minutes, 36 seconds ramp up stabilization phase or so it'll take probably a quarter more or now from a Q1 perspective should be back to the 29:44 29 minutes, 44 seconds run rate we were envisaging from an order book perspective. 29:48 29 minutes, 48 seconds Uh so uh that's a good question on in Q1 as well. Um we are seeing a ramp up. I think it's been a multiple of factors. 29:56 29 minutes, 56 seconds One not just the warehousing part even on the transportation side especially with um you know certain factors coming into play with uh the geopolitical 30:04 30 minutes, 4 seconds conditions in March. Um we did not see the kind of movement of uh steel happening which uh in in the month of 30:12 30 minutes, 12 seconds March which we usually traditionally see. So the the revenue from uh transportation activity also was u there 30:19 30 minutes, 19 seconds wasn't much increase if or rather there wasn't uh it was a flat revenue from if I do a year-on-year comparison for Q4 30:27 30 minutes, 27 seconds from transportation second uh Danuni with Danuni also what we expected the total steel to be handled if you look at 30:36 30 minutes, 36 seconds it for Q4 was about 2.1 million or so which otherwise in the last financial year the steel handled quantum was 30:44 30 minutes, 44 seconds almost about 4 million. So so that that activity impacted uh the expected revenues and to reach that scale back 30:52 30 minutes, 52 seconds with the Vishaka Putnham steel plant when we were doing when we had that contract it was an established uh place 30:59 30 minutes, 59 seconds where it was a steady flow of uh operations there while Danuni is still taking a little bit of more time but yes 31:07 31 minutes, 7 seconds by the end of Q1 we we do see that it should be up to pace. 31:12 31 minutes, 12 seconds Understood. Understood. Sure. And uh on the opening remark you mentioned something on RA and receivables I I think but can you just clarify you 31:21 31 minutes, 21 seconds mentioned that uh the closure of the contract have we received the partial amount and yet to receive the remaining amount and just to clarify. 31:28 31 minutes, 28 seconds Yes sir. No. Uh so what I tried to explain in the opening remarks and which is part of the earlier call as well is the the procedure is still ongoing and 31:36 31 minutes, 36 seconds we expect that uh the uh amount pertaining to uh being released from RNL for the closure that happened at the 31:43 31 minutes, 43 seconds Vishaka Patnam steel plant contract uh should come in in the first half of FY27. 31:49 31 minutes, 49 seconds Understood. Understood. Sure. And uh on on the order book breakup which you have provided for FI27 31:57 31 minutes, 57 seconds uh about 135 odd cr is from equipment rental and projects will uh any what what portion of that would be uh specialized projects. 32:08 32 minutes, 8 seconds As out of that um EP about if as of today it is about 23 crores uh of the 32:17 32 minutes, 17 seconds order book is specialized services uh sorry what number did you say Mr. 32:23 32 minutes, 23 seconds It's 23 about 23 crores is from the specialized services. 32:28 32 minutes, 28 seconds So which includes the deferment uh from Q4 as well as the Yes. Absolutely. 32:34 32 minutes, 34 seconds Understood. Understood. Sure. And uh lastly on MATLIX you mentioned that uh you still have to figure out an 32:42 32 minutes, 42 seconds operation plan and uh working with some of the customers. So uh fair to assume that uh uh we're not expecting anything 32:50 32 minutes, 50 seconds on ground activity in FY27 and whatever will move in terms of operation or some uh trial runs will only be in the next financial year. 33:00 33 minutes Absolutely. So that too I would say more so towards the second half of the next financial year. and Mr. 33:07 33 minutes, 7 seconds the operations will start whatever starts getting built up probably once we have clarity over the next couple of quarters that will be clear and then 33:14 33 minutes, 14 seconds we'll start building towards it uh but the operations to take off I I would still see that happening sometime in second half of FY28 33:23 33 minutes, 23 seconds I understood understood thanks thanks Imanu thanks a lot that's it from my side thank you thank you for the questions 33:30 33 minutes, 30 seconds thank you we take the next question from Rahan say Free nature with your question sir. 33:41 33 minutes, 41 seconds Uh thanks for taking my question. Uh try to inter not able to hear you clearly. 33:52 33 minutes, 52 seconds Uh hello am I audible? Hello. Yes please proceed. 33:55 33 minutes, 55 seconds Yeah so my first question is around your specialized service. I want a good understanding regarding uh specialized service appear to be becoming a very key 34:04 34 minutes, 4 seconds differentiator for the company. So can management explain what proportion of the current order book comes from 34:11 34 minutes, 11 seconds specialized solution versus rental uh regular contracts. 34:16 34 minutes, 16 seconds So thank you for the yeah so thank you for the uh question. I just I think in a previous answer in a previous question I 34:23 34 minutes, 23 seconds had answered of the current order book we have about 23 crores is from specialized services. 34:30 34 minutes, 30 seconds Uh okay. 34:34 34 minutes, 34 seconds Uh so just to be understanding regarding our uh complexity operation across 21 states. So what investments are being 34:41 34 minutes, 41 seconds made in technology fleet tracking and operational system to improve uh efficiency and reduce downtime. 34:50 34 minutes, 50 seconds Right. Uh so we've got our arrangements with OEMs where we've got fleet tracking arrangement. Um the technology is already there within the fleet that we 34:58 34 minutes, 58 seconds have because that is the reason we keep updating fleet and adding new machinery uh which is up to date with the latest technology available out there. So that 35:07 35 minutes, 7 seconds enables us to give get an insight into the machinery uh while operating it out of our corporate office as well as the 35:15 35 minutes, 15 seconds different depots that we have across the country. Uh second there is a network that has been created through the uh software systems that we use where we 35:23 35 minutes, 23 seconds are able to get in the information and ensure uh that u there's no and uh no downtime more than what tech you know 35:31 35 minutes, 31 seconds what is humanly possible for the machines to be always available for our client side. 35:38 35 minutes, 38 seconds U okay and my last question around us utilization has remained uh strong and around 80%. So what is the uh practical 35:47 35 minutes, 47 seconds ceiling for utilization in this business and at what level uh does management start adding credible capacity in this segment? 35:57 35 minutes, 57 seconds So a manageable or a reasonable um best case scenario I would say is 85 86% uh 36:04 36 minutes, 4 seconds to be maintained across the year. There are certain quarters like I said Q4 we had higher occupancy. So uh there are 36:12 36 minutes, 12 seconds certain quarters where the occupancy can be higher but uh uh throughout the year maintaining an 86 even going up to 87 36:18 36 minutes, 18 seconds but I I would still say 85 86% is something which is would would be considered as best case scenario for occupancy levels. 36:28 36 minutes, 28 seconds Oh okay okay thank you thanks for and good luck. Thank you. Thank you. 36:37 36 minutes, 37 seconds Thank you. Before we take the next question, a reminder to all the participants. Anyone who wishes to join 36:44 36 minutes, 44 seconds the question queue may press star and one on the touchstone telephone. Ladies and gentlemen, if you wish to ask a 36:51 36 minutes, 51 seconds question, you may press star and one on your touchstone telephone. 36:57 36 minutes, 57 seconds The next question is is from the line of Twanil Desai from Turtle Capital. Please proceed with your question. 37:04 37 minutes, 4 seconds Uh hi, good afternoon. 37:06 37 minutes, 6 seconds Uh so uh so my first question is uh so uh kind of slightly more color on this 37:13 37 minutes, 13 seconds 20 to 25% growth uh for this year. Uh so uh since now that 10 cr specialized 37:20 37 minutes, 20 seconds service order is now deferred uh should we assume that we will be towards the higher end because that anyway gives you 37:28 37 minutes, 28 seconds 3 4% growth extra over whatever you are planning for FI27 is that a right understanding and second part of the 37:37 37 minutes, 37 seconds growth question is that you talked about the warehouse and transportation growing at 15%. So that means uh you know your 37:46 37 minutes, 46 seconds uh the equipment specialized service business has 30% kind of go 3% kind of a 37:53 37 minutes, 53 seconds number. So is is this something is the math right? is how you guys are thinking or am I kind of you know understanding 38:01 38 minutes, 1 second it uh differently right so thank you for the question so um with regards to 20 to 25% uh growth 38:09 38 minutes, 9 seconds target for the year uh yes it is going to be obviously a combination of our two primary segments one is the equipment rentals 38:17 38 minutes, 17 seconds and of that specialized services as you talked about 10 crores of revenue coming into this financial year so that has been factored in in our consideration of 38:25 38 minutes, 25 seconds the 20 to 25% % growth. Uh so that if as you rightly pointed out uh looking at the visibility and with uh the orders 38:34 38 minutes, 34 seconds more orders uh you know expected to come in with the kind of pipeline we're looking at yeah that could help that 10 cr overflow into the current financial 38:43 38 minutes, 43 seconds year could help to push the growth in that upper bracket of the band uh and um further help in that growth uh overall. 38:51 38 minutes, 51 seconds So to answer that question that that is yes you you're thinking that correctly on on the second uh you asked about warehousing and transportation growing 39:00 39 minutes at about 15% and together warehousing and transportation uh and the specialized services uh as per your 39:07 39 minutes, 7 seconds estimation is going to contribute 30% is is something that I did not understand your question there. So what I'm saying 39:14 39 minutes, 14 seconds is that uh almost 37% of the revenue is coming from the warehouse and transportation right and you mentioned 39:21 39 minutes, 21 seconds that uh you know that is likely to grow at 15% if my understanding is correct in the one of the previous answers right 39:28 39 minutes, 28 seconds so if that that segment grows as 15% that roughly brings around 5% growth on a total basis the rest of the 20% growth 39:38 39 minutes, 38 seconds has to come from the equipment which is 60% of the business so that has to grow at a 30% % uh rate right for you to kind 39:46 39 minutes, 46 seconds of combine bases growing at 20% plus. So equipment rental plus the specialized 39:53 39 minutes, 53 seconds services has to grow significantly higher than the company average. 39:59 39 minutes, 59 seconds Yes. uh that is a correct understanding and that is where uh as as I pointed out in my opening remarks as well with the keex that we have done over the last two 40:07 40 minutes, 7 seconds years along with the keex that is planned in this year the order book that we already have in hand and the pipeline that we see coming up so that that gives 40:15 40 minutes, 15 seconds us the confidence that we can grow in that band of 20 to 25% pushing for up to 25% or in the upper 40:24 40 minutes, 24 seconds segment upper spectrum of that bracket will depend on how the uh you know further order auto order books play out in the 40:31 40 minutes, 31 seconds next uh quarters. But at present, yes, we we are pretty confident that with specialty equipment rentals and specialized services driving the growth 40:39 40 minutes, 39 seconds uh we should be able to meet our targets. 40:43 40 minutes, 43 seconds Uh second question is slightly more uh strategic and more on capital allocation side of it. Uh see we have been talking 40:51 40 minutes, 51 seconds about uh you know tarat and metal in the past and uh overall though we don't have any blueprint ready as of now. uh 40:58 40 minutes, 58 seconds generally this kind of businesses exist uh you know both in public markets and in private markets. So general economics 41:06 41 minutes, 6 seconds and understanding is available. So the question is that uh you know in order for us our equipment rental business to 41:14 41 minutes, 14 seconds grow at 20 25% you know we need to continue to do capex of 80 to 100 cr. 41:20 41 minutes, 20 seconds Our cash flow is 70 cr probably it will increase with scale. Uh but the point is that if you need to do capex and then 41:28 41 minutes, 28 seconds also you will need working capital with the current balance sheet does it make sense to allocate capital to a newer 41:35 41 minutes, 35 seconds venture while the opportunity exist in the existing business equipment side where we are well well positioned. Uh 41:44 41 minutes, 44 seconds why why are we kind of trying to do something new while there is enough opportunity at at our hand? 41:53 41 minutes, 53 seconds Um that's a good uh question sir again uh but again to uh put it in perspective we are still trying to work out on what 42:02 42 minutes, 2 seconds uh eventually are we going to be going ahead with uh metallics and um that will take into consideration all of these 42:09 42 minutes, 9 seconds factors that you've also pointed out and that is a part of our discussion and part of the strategy discussion that the company is having and the leadership is 42:17 42 minutes, 17 seconds having. So once those uh uh ideas and blueprints become more clear uh I'll be in a better position to answer your 42:25 42 minutes, 25 seconds question and uh as a company across our legacy businesses and what we have done 42:32 42 minutes, 32 seconds over the last 40 odd years uh we like we would like to stay diversified and not 42:39 42 minutes, 39 seconds uh put all our eggs in a single basket um because we have to look at opportunities for the future as Well, so 42:47 42 minutes, 47 seconds that that all of those factors will have to come into play when we take a final call on what we are doing with metallics and how we go about allocating capital 42:55 42 minutes, 55 seconds and what will be the you know results that we get out of it. So we will come back to that uh in in the next 43:02 43 minutes, 2 seconds couple of quarters and uh better that we answer that question then. 43:08 43 minutes, 8 seconds Sure. Sure. The only request uh Himmanu is that if if if on the balance sheet side if you're able to maintain the discipline that would be really helpful 43:16 43 minutes, 16 seconds especially on the debt side. So that's the only definitely. Yeah. 43:20 43 minutes, 20 seconds Thank you sir. So that that is something that we already have in consideration. 43:25 43 minutes, 25 seconds Thank you Mr. Does that answer your questions? 43:32 43 minutes, 32 seconds Yeah. Yeah. Thank you. Thank you. 43:36 43 minutes, 36 seconds We take the next question from the line of Koshi Krishna, an individual investor. Please proceed with your question. 43:46 43 minutes, 46 seconds Hi sir, good afternoon. Yes, good afternoon. 43:51 43 minutes, 51 seconds Yes sir. What uh regarding the receivable, what is the exact amount uh receivable from RVN? Sir, you didn't uh tell about the amount I think. 44:02 44 minutes, 2 seconds I'm sorry. Uh what is the question, sir? 44:06 44 minutes, 6 seconds The exact amount receivable from RNL receivable exact amount receivable from RNL. Um that is something we cannot 44:14 44 minutes, 14 seconds disclose uh the specific number. Uh but we can give an update once the amount is received and that will be updated in the subsequent quarters. 44:24 44 minutes, 24 seconds Yeah. Uh if you mention the specific amount no uh we'll understand the exact burden falling on our balance sheet. 44:33 44 minutes, 33 seconds That is the reason I asked about it and you have mentioned it that we'll be receiving it in H1 and did you get notified from RVNL for the same? 44:43 44 minutes, 43 seconds Yes. So we are in discussions with them. 44:44 44 minutes, 44 seconds There is communication and uh as per the timeline set out um that is why uh that is the consideration that we've taken that it is it should come in in the first half of FY27. 44:57 44 minutes, 57 seconds Yes sir. Yes sir. And uh even that on the smaller base we have don't you think 20 to 25% growth is too low compared to 45:06 45 minutes, 6 seconds the other comp competitors and as we have been growing uh with the debt also so so uh can you comment anything on 45:14 45 minutes, 14 seconds this uh sir with regards to growth on debt so debt is aligned with the capex that we 45:23 45 minutes, 23 seconds have been doing and that much as as I've stated in my opening remarks as well Our focus remains that our debt to equity ratio a ceiling that we have set for 45:32 45 minutes, 32 seconds ourselves should be below one and going forward that will also remain the same. 45:37 45 minutes, 37 seconds Uh that is the target with regards to growth of 20 to 25% that is for the kind of business and uh you know 45:46 45 minutes, 46 seconds activities we are in. uh without really going into what any of the other competitors are currently growing at or talking about growing at. 45:57 45 minutes, 57 seconds Okay sir. Understood. That's it from my side. Thank you sir. 46:04 46 minutes, 4 seconds Thank you. The next question is from the line of Ishad Desai from Ford's family office. Please proceed. 46:11 46 minutes, 11 seconds Yeah. Thank you for your follow on I wanted to understand a little more on the capeex side for this current 46:18 46 minutes, 18 seconds financial year. U on the I believe we mentioned a target of 7200 cr. Uh so what this is going to be more deployed 46:27 46 minutes, 27 seconds towards renewable energy mix of the current segments where do we see uh more opportunities towards if you could share some insights on that. 46:36 46 minutes, 36 seconds Sure. Uh so yeah u definitely the focus is going to be on higher capacity machines as has been the case if you 46:43 46 minutes, 43 seconds look at our capex over the last especially last financial year um and the idea is as we've always maintained 46:50 46 minutes, 50 seconds that our uh our investments are made in a way where our equipment is funible across sectors so even going forward 46:57 46 minutes, 57 seconds although uh visibility would be let's say right now more from renewable energy so yet the equipment will be first uh 47:05 47 minutes, 5 seconds invested in consider ing renewable energy as a probable end user but it it can eventually also be working in a 47:13 47 minutes, 13 seconds cement plant down the line. So that that is what the approach we keep uh all the capex that we do is all driven by visibility and order book. So whatever 47:22 47 minutes, 22 seconds we do will be focused at uh all the sectors that we're working in but yes renewable energy is going at a growing at a faster pace for us. So most of it 47:31 47 minutes, 31 seconds um it seems to be aligned towards renewable energy itself. 47:35 47 minutes, 35 seconds Sure. And and the second part to that humanu is uh to the previous participant you had mentioned about the breakup of 47:43 47 minutes, 43 seconds growth. Uh so equipment rental probably and services will be growing at a faster rate than the company average we are 47:50 47 minutes, 50 seconds looking at. uh given that uh that is a higher ITA contract margin business uh 47:57 47 minutes, 57 seconds that 37 to 38% uh number which you are looking at is there a potential upside to it given that that segment will 48:06 48 minutes, 6 seconds probably contribute larger amount to the overall uh mix of revenues u so the upside will depend on uh the 48:14 48 minutes, 14 seconds again the mix between rentals and the specialized services because on the specialized services thea is in that 18 48:21 48 minutes, 21 seconds to 20% range. So if if we uh with the kind of visibility order book that we are targeting, we we do see a 48:28 48 minutes, 28 seconds substantial growth coming in from specialized services as well and the right mix from both the equipment rental 48:35 48 minutes, 35 seconds and specialized services could help in uh uh you know in u pushing the EITA margins upwards but uh 37 to 38% what 48:45 48 minutes, 45 seconds we've talked about in my what I have talked about in the opening remarks is something that we remain committed to ensuring that We do not go for growth 48:53 48 minutes, 53 seconds for the sake of growth that we maintain and sustain margins. Uh rather in the last year we have been able to grow 49:00 49 minutes margins by ensuring that we f focus on quality over quantity. 49:06 49 minutes, 6 seconds Sure. Sure. And last this year I mean FI26 we were targeting about 40 to 50 cr of specialized project services. I think 49:13 49 minutes, 13 seconds FI27 also the target would be similar slightly higher. Can you comment? 49:18 49 minutes, 18 seconds Yes. So uh we closed at about 38 crores for FI26. Um but for FI27 now that the 49:25 49 minutes, 25 seconds service capabilities have you know started developing over the last two financial years we are seeing more uh inquiries flowing in for similar 49:34 49 minutes, 34 seconds specialized services from multiple clients. So we do see opportunity where we should be able to push upwards of 50 crores for this financial year. 49:43 49 minutes, 43 seconds Sure. and and standalone rental if you were to exclude services part has been at about 133 cr. Uh so uh what what 49:52 49 minutes, 52 seconds growth are should we expect in standalone given that we also going to add some capex during the year. So there again 25 30% is that a reasonable estimate? 50:02 50 minutes, 2 seconds Yes. So we would be targeting a 25 to 30% growth on the standalone rentals. 50:09 50 minutes, 9 seconds Sure. Sure. Sure. Thank you. Thank you very much. So that's it from Isaac. Thank you. Thank you. 50:16 50 minutes, 16 seconds Thank you. 50:19 50 minutes, 19 seconds As there are no further questions from the participants, I would now like to hand the conference over to Mr. Manu Agarval for closing comments. 50:31 50 minutes, 31 seconds Thank you uh once again everybody and as I've always said, it is always a pleasure to talk to you and interact 50:38 50 minutes, 38 seconds with you during these calls. I hope uh I have been able to do justice to your questions and if you still have further 50:45 50 minutes, 45 seconds queries or doubts please feel to write to us or write to our uh investment relations uh team at stellar IR advisors 50:53 50 minutes, 53 seconds and we'll get back to you as best possible and we look forward to continuing our journey of growth uh over 51:00 51 minutes the next quarters and years alongside you. Thank you once again. 51:08 51 minutes, 8 seconds Thank you sir. 51:10 51 minutes, 10 seconds On behalf of Tarachant Infr Logistics Solutions Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.