Atlanta Electricals (NSE:ATLANTAELE) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to Atlanta Electricals Q2 and H1 FY 'twenty seven Earnings Conference Call. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Mr. Mohit Upadhyay from AdFactors PR. Thank you, and over to you, sir. Thank you. Good morning, and a very warm welcome to Atlanta Electricals Limited Q2 and H1 FY 'twenty seven Earnings Conference Call.

0:50 Joining us today are Mr. Neel Kupeshwar Patel, Chairman and Managing Director Mr. Anand Sharma, the Chief Operating Officer Mr. Akshay Kumar Mathur, CEO and Mr. Nirmal Mehta, CFO. Before we begin, I would like to remind participants that certain statements made during this call may be forward looking in nature and are subject to risks, uncertainties and assumptions. These should not be relied upon as guarantees of future performance. I now invite Mr. Mehul Mehta, our Chief Financial Officer, to take you through financial highlights of Q2 and H1 FY 'twenty seven. Thank you, and over to you, Mehul sir. Thank you, Mohit. Good morning, everyone. I will now take you through our financial performance for the second quarter and first half of FY twenty twenty seven.

1:42 We have delivered healthy year on year growth in revenue and profitability during the first half of the financial year despite facing certain external challenges during the second quarter. Our performance reflects the underlying strength of our of demand across our key business segments and the investments we have made in expanding our manufacturing capability. While elevated raw material prices and weather related disruptions impacted our quarterly performance, these challenges are largely temporary in nature. Our focus remains on timely execution of our order book, improving operational efficiencies and maintaining financial discipline. Let me begin with the quarterly performance financial performance.

2:28 During Q2 FY 'twenty seven, our consolidated revenue from operations stood at INR 390.1 crores, registering a growth of 23.1% year on year compared with INR $3.17 crores in Q2 FY 'twenty six. This growth was achieved despite unusual heavy rainfall in Gujarat, which temporarily affected manufacturing operations, transportation and customer delivery schedules. Heavy rainfall and waterlogging resulted in precautionary shutdowns at our manufacturing facilities on two occasions. More importantly, disruptions at customer project sites prevented the timely acceptance of certain completed transformers. Consequently, finished orders worth approximately INR 180 crores could not be delivered during the quarter.

3:20 Importantly, these represent deferred deliveries and not cancellations, and these orders continue to remain part of our order book. I'm pleased to share that approximately 70% of these deferred orders have already been dispatched, and we expect to complete the remaining deliveries during Q3 FY twenty twenty seven subject to customer size readiness. Coming to profitability. Our gross profit for Q2 FY 'twenty seven stood at INR103.6 crores, registering a growth of 6.1% year on year compared with INR97.8 crores in the corresponding quarter last year. However, gross profit margin moderated to 26.6% compared with 30.9% in Q2 FY 'twenty six.

4:09 The moderation was primarily attributable to elevated commodity and raw material prices, particularly transformer oil, copper and steel, which increased manufacturing costs during the quarter. As highlighted in our earlier calls, the majority of our orders carry price variation process, allowing us to pass on increase in raw material costs to customers. However, during Q2, we executed certain firm price orders booked in the previous year, which accounted for approximately 15% of quarterly revenue. Since these contracts did not offer the same flexibility to pass on higher input costs, they adversely impacted our gross margins. The remaining firm price orders are relatively smaller in value and are expected to be substantially completed during Q3 FY twenty twenty seven.

4:58 Accordingly, we expect the associated pressure on profitability to moderate in the coming quarters, although commodity prices price volatility remains an important factor to monitor. Moving to EBITDA for Q2 FY 'twenty seven. EBITDA stood at INR59.6 crores, representing a growth of 8.8% year on year compared with INR54.8 crores in Q2 FY 'twenty six. EBITDA margin stood at 15.3% compared with 17.3% in the corresponding quarter last year, reflecting a contraction of approximately two zero one basis points. The margin moderation was primarily driven by higher raw material cost on compressed contracts and the impact of temporary disruptions on execution and operating leverage.

5:49 Despite these challenges, we continue to maintain operating profitability and remain focused on disciplined procurement, cost management and improving capacity utilization. Coming to the bottom line, profit after tax stood at INR 32.1 crores, registering a growth of 28% year on year compared with INR 25.1 crores in Q2 FY twenty twenty six. Our back margin improved to 8.2% compared with 7.9% in the corresponding quarter last year. This was supported in part by lower finance costs, which declined to INR 8.5 crores from INR 13.2 crores a year ago. Basic and diluted earnings per share for the quarter stood at INR 4.18 compared with INR 3.50 in Q2 FY 'twenty six.

6:42 Now coming to our consolidated performance for H1 FY 'twenty seven. Revenue from operations for the first half stood at INR 856.4 crores, registering a growth of 35.5 year on year compared with INR 632.1 crores in H1 FY 'twenty six. Gross profit increased by 28.6% to INR 230.9 crores, while EBITDA grew by 32% to INR 136.7 crores compared with INR103.6 crores in the corresponding period last year. EBITDA margin for H1 FY 'twenty six sorry, EBITDA margin for H1 FY 'twenty seven stood at 16% compared with 16.4% in 1 FY 'twenty six.

7:30 Profit after tax for the first half increased by 40.4% year on year to 79 crores compared with INR 56.2 crores in H1 FY 'twenty six, while PAT margin improved to 9.2% from 8.9%. These numbers demonstrate that despite the temporary challenges during Q2, we have maintained healthy growth in revenue and profitability during the first half of the financial year. Turning to our cost structure. Employee benefit expenses increased during the first half as we continue to strengthen our workforce to support the expanded scale of operations. Depreciation and amortization expenses also increased during the commissioning of new manufacturing capacities standing at INR 20.1 crores in H1 FY 'twenty seven compared with INR 7.9 crores in the corresponding period last year.

8:25 These investments are part of our long term capacity expansion strategy. And as utilization improves, we expect better absorption of our operating cost base. Turning briefly to working capital. Inventory increased to INR 632.9 crores as of 09/30/2026, compared with INR 364.1 crores as of March 3126. This increase was partly attributable to finished transformers awaiting dispatch and customer acceptance due to the weather related disruptions alongside raw material procurement requirements for our manufacturing operations. With customer deliveries having resumed and approximately 70% of previously deferred orders already dispatched, we expect progressive movement of the related finished goods inventory as the remaining orders are executed.

9:14 We remain focused on disciplined working capital management while supporting the execution requirements of our growing order book. Overall, despite a challenging second quarter, the first half of FY twenty twenty seven reflects the strength of our business and the benefits of the manufacturing investments undertaken over the last few years. Our immediate priorities are to accelerate execution of deferred deliveries, improve capacity utilization, manage commodity price volatility and strengthen operational efficiencies. With the majority of our orders protected through price variation mechanisms and the remaining firm price orders expected to be substantially executed during Q3, we remain focused on improving our operating performance during the second half of the financial year.

10:03 With that, I would now like to hand over the call to our Chief Operating Officer, Mr. Anand Sharma, who will take you through the operational performance and key business developments during the quarter. Over to you, Anand, sir. Thank you, Mehul, and good morning, everyone. I'll now take you through the operational performance and key business developments during quarter two financial year twenty seven. We continue to witness healthy demand across transmission and distribution, renewable energy and industrial applications. Despite weather related disruptions and commodity price volatility during the quarter, our underlying business momentum remains healthy. Let me begin with the order book and business developments.

10:51 As on 09/30/2026, our outstanding order book stood at 3,196.97 crores compared with INR 3,116.63 crores as of June 26 and approximately INR 2,069 crores a year ago, representing 54.5% year on year growth. Our inquiry pipeline remained strong at approximately INR 19,464 crores. During quarter two, we booked new orders worth approximately INR $4.21 crores. Commodity volatility delayed certain order finalization, including tenders where we emerged as L1, but purchase orders are weighted. We expect order finalization to improve during H2 of financial year twenty seven.

11:40 Among the key developments was a letter of intent worth INR193.92 crores from AP Transco for the supply of 12 units of 160 MVA two forty kV class auto transformers. We also added 12 new customers during the quarter, including our first U. S. Export customer, new state utilities and new renewable energy players. Coming to manufacturing operations, unusually heavy rainfall in Gujarat temporarily impacted plant operation and transportation during quarter two. However, with the withdrawal of the monsoon, our manufacturing facilities are operating normally and customer site activities have resumed. Our focus remains on accelerating execution, optimizing capacity utilization and ensuring timely deliveries during the quarter during the second half of the financial year.

12:33 Moving to higher voltage transformer initiatives, our Godot facility has received approvals from NTPC Solar, NTPC Renewables, Tata Power, KPTCL, Punjab transmission company and few more customers. Manufacturing of our first three fifteen MVA transformer 400 KV class commenced in October 26 following delays in receiving certain critical components. To minimize similar delays going forward, we have planned or we have placed advanced purchase orders for the long lead component and developed alternate supplier arrangements. We are targeting manufacturing completion and short circuit testing during quarter three of this particular quarter of financial year 2027. Subject to successful testing and necessary approvals, commercial contribution is expected in quarter four of this particular year.

13:25 On the seven sixty five kV development program, our engineering team has commenced in house design of the first seven sixty five kV reactor. While the proposed international technology partnership could not be progressed due to international sanction related constraints, we remain open to suitable partnerships as circumstances improve in future. We are targeting commencement of the production during quarter four of this particular financial year with completion and testing and the size between quarter four of this year and quarter one of next year. These developments will strengthen our capabilities in higher voltage glass transmission projects. Coming to capacity expansion, civil construction of our dedicated IDT plant, inverter duty transformer facility is complete and machine reinstallation is underway.

14:17 We expect commissioning before the end of quarter three financial year twenty seven, adding approximately 5,000 NVA of capacity with planned capital expenditure of INR 65 crores. The facility will enable us to ship 33 kV IDT manufacturing from Unit 2, which is happening presently, releasing capacity for higher KV classes of sixty six and one hundred thirty two KV class to be manufactured in Unit 2. Alongside this, our tank and regular backward integration projects through eight components is also progressing. The plant layout, machinery requirements have been finalized and the groundbreaking ceremony has been completed. With planned capital expenditure of approximately INR 193 crores, commissioning is targeted by October 2027.

15:09 This initiative is expected to strengthen supply chain reliability and support manufacturing efficiencies. Another important development is our progress in the international market. During quarter two, we secured our first U. S. Order for the specialty transformer for a new transfer manufacturing facility to be set up in United States. We are also witnessing encouraging traction from U. S. Customers with active inquiries of approximately 120 transformer aggregating to 9,300 MB. Additionally, we have identified two potential long term partners to support our international expansion. Our medium term aspiration is for exports to contribute approximately 15% of the overall revenue within the next two years, while we continue exploring opportunities across Europe and Africa as well.

16:04 We are seeing opportunities from emerging segments in battery energy storage systems. We currently have an active inquiry pipeline of approximately 3,400 NVA worth INR184 crores alongside renewable energy and industrial electrification. These settlements are expected to support future demand for our products. Overall, despite temporary execution challenges during quarter two, our order book and inquiry pipeline remain healthy. Our immediate priorities are to improve execution, commissioning of our new IDT facility and advance our higher voltage development program. With that, I would now like to hand over the baton to our CMD, Mr. Neel Patel for his remarks. Over to you, sir.

16:52 Thank you, Warren. Good morning, everyone. First of all, on behalf of entire Atlanta Electricals family, I would like to extend my warm wishes to all our investors, analysts and stakeholders for the upcoming Diwali Festival. I wish you and your families a very happy Diwali and a prosperous New Year. The first half of FY twenty seven has presented its share of challenges. While Q1 is traditionally a seasonally softer quarter for our business, Q2 witnessed additional headwinds of elevated commodity prices and adverse weather conditions, which impacted our operating performance and execution schedules. Despite these challenges, we delivered healthy growth in revenue and profitability during H1 FY twenty seventeen, reflecting our underlying strength of our business, sustained demand across key markets with operations having normalized, our focus remains on accelerating execution and improving performance during the second half of the financial year.

17:52 Looking at the broader industry, we continue to believe that India's power infrastructure sectors represents a significant multiyear growth opportunity. Sustained investments in transmission and distribution networks, renewable energy integration, battery energy storage systems, data center infrastructure are driving the demand for higher capacity and technological advanced transformers. At Atlanta Electricals, our strategy is centered on strengthening our position in evolving industry through capacity expansion, technological advancement and product diversification. Our key priority remains our transition towards four hundred and seven sixty five kV transformer categories, which will expand our addressable market and enable participation in larger and more technically demanding transmission projects.

18:48 Alongside this, our investments in our dedicated inverter duty transformer facility, the tank and receiver backward integration project will strengthen our manufacturing capabilities, improve supply chain reliability and long term operational efficiencies. Our other development has our other important development has been our entry into The U. S. Market with our first order making a significant milestone in the international expansion strategy. We continue to see opportunities across international markets and remain focused on our aspiration for Xposed to contribute approximately 15% of our overall revenue within the next couple of years, next two years. Coming to our outlook, our strong order book, heavy inquiry pipeline provides encouraging revenue visibility.

19:39 While commodity prices volatility temporarily affected the pace of order finalization in Q2, we continue to witness heavy customer interest across our key business segments. We remain committed to our previously outlined three year revenue growth aspiration of approximately 40% CAGR, while maintaining a disciplined approach towards profitability, capital allocation and execution. Our immediate focus during H2 FY twenty seven will be on strengthening execution, improving capacity utilization, advancing our strategic investments and converting our inquiry pipeline into firm orders. We believe that the combination of strong industry demand, expanding manufacturing capabilities, higher voltage product development and increasing international opportunities positions Atlanta Electricals well for sustainable long term growth.

20:37 I would like to thank our employees, customers, business partners and shareholders for their continued trust and support. With that, we conclude our opening remarks, and we are now opening the floor for questions. Thank you, everyone. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue attends. The first question is from the line of Tina from.

21:24 Please proceed. Hi, sir. Good morning. And my my first question is related to the 765 KV plant. You mentioned that there are some delays in finalization of the tech partner over there. So what will be the status of ramp up of the 765 Ks V plant? This would be my first question. Good morning, Tina. So the 750 five kV development via a technological partner, the doors we've still not shut. We are still exploring possibilities of engaging with partners without getting into the risks of tying up its sanctioned entities.

22:15 So that option is not something that we are closing. But at the same time, we are confident that the team is capable to develop seven fifty five kV class products on their own. And hence, we have already started designs process and certain material ordering process for seven sixty five kV development. With the infrastructure that we have, it is going to be a parallel development in different facilities, seven sixty five in Unit 5 and 400 in Unit 4. Hence, we don't see a much stoppage with that. Post that, we would be still exercising our options to get seven sixty five kV class orders through the private sector, and we'll still continue to pursue orders through the government sector. And in this case, are you also directly working with Power Grid to align with the designs that are needed for the seven fifty five, or that will come at a later stage?

23:12 Hi, Tina.. Hi. Good morning. Hi, Adam. Good morning. Incidentally, hi. Incidentally, fortunately, in the case of 400 k v and seven fifty five k v through the intervention of CA, the designs or specifications or other specifications of seven sixty five k v and 400 k v class transformers and reactors have been standardized. So whatever reactor or ICT we shall be manufacturing of seven sixty five kV, that shall be as per the CA guideline. And hence, it will be acceptable to Power Grid and other customers sitting in India. Okay. Okay. So there wouldn't be any customized certifications related to any other customer. It's a standard design which will be applicable. Yes.

23:58 Okay. And my second question is regarding the utilization level across your plants post the monsoons even getting over. So I believe that the monsoon would have impacted in second quarter. But now how do you see the utilization level, particularly for your two twenty kV plant and even the 400 kV plant, which you were earlier planning to utilize for your existing two twenty kV orders? So how is the utilization level ramping up across the plants? Nehal, you would like to take that question? Yes. So current utilization level at our Unit One-two, which is located at GIDC area, Anand, is at 6040%, respectively.

24:46 And our Bangalore plant is contributing around 90% utilization. Farooq facility is at around 30% of utilization level and Dambushar facility, which is seven sixty five kve plant, that is at around 7% to 8% utilization level. Understood. So the two twenty kV facility is at what utilization level, sir? So at present, it was at 60% utilization level at Unit 1, which is at Anand and our facility, which is capable of two twenty and four hundred kV. That is at 30%. And this will move up as execution ramps up? Yes. So during H2 of current financial year, it will definitely move up. This was specifically due to some heavy rainfalls in this area.

25:40 These facilities were not contributed in revenue numbers in terms of MVA utilization. But if we see the utilization on the basis of production, it is on the higher side. But unfortunately, we were not able to dispatch few transformers, which were ready and that's the inventory is lying was lying with us by end of thirtieth September twenty six, which was around 180 CR. Understood. Understood. So you maintain your revenue growth guidance with a good pickup in second half of this year? Yes, yes. And as included in my speech, around 70% of these deferred deliveries were already dispatched during the October month itself.

26:28 Understood. Understood. Thank you so much. That's it from my side. Thank you. A reminder to all participants, anyone who wishes to ask a question may press star and one on the attached tone telephone. The next question is from the line of Kunal Mehta from Incred Equities. Please proceed. Yeah. Hi, sir. Very good morning. My first question is on the order inflow. This quarter, as mentioned, it was around INR $4.21 crores, which is almost, like, almost 55% down quarter on quarter. So so is this slowdown due to, like, lower tendering or delayed decisions on the customer end or, you know, some competitive pressure that we are facing?

27:13 Because we see peers doing well aggressive in order booking such as tariff. So what should we expect in the second half of this year? This hi, Konark. This is Hilar Patel. This is a management decision. It is not something anything related to the market. Like we said, a lot of orders were at the verge of being L1 and being ordered, which were pending. But apart from that, it is a management decision to cautiously do order intake because these orders are predominantly two twenty Kt and below. And there was a healthy amount of order booking already done in quarter one to substantiate our growth for at least next one point five years. So that's the reason we've taken a conscious call on order booking of two twenty KV class and below.

28:07 As soon as in this particular quarter, as soon as we are able to develop a 400 KV class prototype unit, we shall be opening our doors for 400 kilobytes class orders, which will eventually add to our order pipeline. For a two twenty kilobytes class, a reminder, order visibility is usually one point five year and hence 3,000 crore order book INR 3,000 plus crore order book is sufficient enough to take care of that visibility. Okay. So do you mean now we'll be more aggressive on the four hundred and seven fifty five kV from the next you know, couple of quarters, we'll start tendering for those transformer orders. Am I right? Yes. You are right, but we cannot ignore the two twenty kV class orders and below orders as well. So whatever we have quoted will definitely come, but INR 400 plus would be our focus, which would substantiate our order books for a longer visibility and a bigger number.

29:05 Okay. My second question is, sir, out of the INR $3,001.97 crore order book, does this also include the INR 180 crore that was not dispatched? And how much of this includes a percentage of the fixed price contracts? And will you be booking all the new orders with the price variation clause irrespective of being a private or a public customer? Yeah.. I'll answer your first question out of your two questions. So first question is related to 400 TV class orders in our book, which is one eighty four CR. And that order is still there in our QT, and we are now starting executing that order.

29:55 For second quarter, Anand sir? Hi, Konanpi. Anand, this right. See, we have been maintaining we said this in our previous earnings call also that since this problem of Middle East war started to happen in the month of March, we stopped quoting inquiries, which were coming with the firm price basis actually. So even to the private customers or the corporate customers, we have been quoting with the price variation clause formula only. So maybe there might be a couple of orders in between, which we may have to take on from price basis. But again, those would not be more than 1%, 2% of the total order book we have done in the last six months.

30:43 Okay. So out of INR $3,001.97 crore order book, how much percentage approx would be firm price? Nebul, do you have that number? That is around 10% to 12%, sir. Okay. And, sir It is three to four. No. I I... And let me... Yeah. Okay. Three three to 4%, sir. That's what we know. Yes. See, as said and also said in the beginning of the call, that majority of the orders, which were booked on firm price basis last year, we have already executed a major chunk of it even quarter two. And whatever is remaining shall be executed in the quarter three of this particular year.

31:33 So we'll not be left with any amount of firm price orders for the quarter four of this particular financial year. And whatever is remaining, which is going to be executed in this particular quarter, the amount is very, very, very minuscule. And so my third question is on the CapEx of INR 193 crores that we have announced. How much would be funded through internal accruals and how much would be taking any debt for it? And also any other CapEx is planned for capacity expansion or any other thing that is expected to come in the second half? Hi. So this is Niraj Patel again. Whatever key pieces we've lined up as of now are getting funded through internal approvals, and we continue to maintain that momentum through internal approvals.

32:34 96 crore tank fabrication CapEx involves lot of robotics and a lot of development in automation. And hence, it will take its time to adapt to the Indian standards. And majority of that will be funded through June approvals. As part of our plan B, like I said, term loans have already been tied up so that the project doesn't delay. Apart from these two CapEx, we do not have any other CapEx that is lined up apart from small projects like creating labor quarters for our staff, hospital buildings for our staff, but they are very small projects. Okay, sir. And, sir, on The US, if you can just throw some more light on, you know, how do we read this to us? Is is this extremely positive development? And, you know, are we seeing, like, a long term partnership with these customers that, you know, we have onboarded?

33:28 And how is the scenario that we can throw some light on that more? Well, this first order that we've received is a very unique order. It's a specialty transformer, and it is a highly technical product. With that being said, our entry into The U. S. Markets, our focus is not for white labeling, our focus is not for contract manufacturing. Our focus is for establishing our own connections with our own with partners, which will enable a brand of Atlanta in The U. S. Market. And that's exactly what we're exploring. Two of these partners have been shortlisted as our support partners in The United States.

34:15 And they would be one of them would be responsible for taking our brand forward in Atlanta Electricals in The U. S. Market. As of today, we will be focusing on two twenty kV and below products as an entry into The U. S. Market. And do we see at least 5% to 6% additional gross margin benefit in this? Their margins definitely are better, but it will be very difficult to commit on to the margins that you have just asked in your question. But we know for sure that the margins are much better. Okay. And so just one last question. I think, sir, mentioned in the opening remarks that we had some issues with procuring critical components earlier. So we have kind of, you know, already talked up on critical components such as, you know, maybe pushing. So when we, let's say, have higher quantum models in future, the... How are we planning to tackle, you know, the availability of all these critical components and transformers?

35:22 Because I think there is shortage of, you know, bushings and other critical components in transformers. So how are we planning to tackle this? Well, as you see from our inventory, there is it comprises a lot of I would not say, small portion of inventory would be for aligned towards stockpiling. This for critical components, it's not that we do not have startups or we do not have we have facing problems. It is a temporary problem because of the typhoons that occurred and disrupted the supply chain. That we see as a very temporary situation. For critical components, we do not see any problems coming into future.

36:11 We should be establishing good customer supplier relationship with our suppliers and help them come in the Indian market to take care of their business as well and establish our priorities over those products, so that our supply chain doesn't get disturbed. That's the strategy we are working with. Okay, sir. Thank you so much, and wish you and the whole Atlanta family a very happy Diwali. I'll call back in the queue for more questions. Thank you so much. Sir. Wish you the same. Thank you. A reminder to all participants, anyone who wishes to ask a question, may press star and one on their touch tone telephone. The next question is from the line of from IVIK Securities.

36:58 Please proceed. Hello? Hi. Hello? Am I audible? Yes, sir. Yes. You are. So, also, my question is regards to the EBITDA margin guidance that are we going to sustain the margins in the coming two quarters, like somewhat like Q1, which we have seen? Yes. Certainly. So we maintain that our EBITDA margin for FY twenty twenty seven and FY twenty twenty eight would be ranging around 16% to 18%. And we are still firm on the belief that we will be achieving this margin in coming year in current year and coming year.

37:47 And another question is on U. S. Where you guys you are working on the order. So what is the same regarding the tariffs? Like are they getting impacted by any tariff for such or no impact? Double pipe, we do not see any impact of the tariffs at the moment on the inquiries which we are working upon. Okay. So do we have any manufacturing facility over there, or we are just exporting it out? No. No. We do not have any manufacturing facility in US as we know. And we shall be manufacturing in Indian units and shall be supplying there. Okay. I have few more questions, but I'll just call back in line. Sure. Thanks. Thank you.

38:34 A request to all participants, please restrict your questions to two questions per participant. For more questions, please rejoin the queue. The next question is from the line of Rohan from Axis Capital. Just a couple of questions. One, if you can please share your production figure for Q2 in terms of MVA? Rohan. Total MVA produced during H1 of FY 'twenty seven is INR 8,664. Okay. And secondly, in terms of you did mention that the margins were affected mainly because of your fixed price contract. I just wanted to understand that going into the next couple of quarters, how much of your existing order book has those in terms of how many contracts are fixed price contracts and how we are looking at it going forward?

39:42 As mentioned in our... Yes. On, please. Yes. Ranbai, as mentioned in our opening speech, there are a few orders left without having a price variation clause, which is from price contracts. The portion is around 10% to 12% of total orders booked at present. And maximum out of these orders will be, we can say, manufactured and dispatched during Q3 of current financial year. Okay. And we shall assume that, I mean, for those particular orders of execution, you'll be having a similar run rate of margin, EBITDA margin?

40:33 No, Ranbhai, we do not see any troubles there because what happened actually with certain customers with this problem of Middle East what happening in the month of March, we reapproached our customers requesting them for a price reason. So whatever orders which are remaining to be executed in the quarter three of this particular year, we have already received a good response and support from our customers in terms of getting the price revision over the original contracts. So whatever prices at which we booked the orders last year have been, let's say, brought at par with the current price levels. So we do not see the impact of those remaining comprised contracts getting executed in quarter three to show up any, let's say, negative impact on the margins in this particular quarter.

41:28 Okay. Well understood. Thank you so much. Thank you, Rohan. Bye. Thank you. The next question is from the line of Jayanam from Saldoro Investments. Please proceed. Hi, team. My question was on margins. Given that we will have a substantial operating leverage in the second half of FY twenty seven as the capacity increases and the fact that, as Anand mentioned, that we are getting the orders repriced, Can we expect the margins to end forward because we've stated... We've initially stated the aspiration of 18 to 19% in the margin. Sir, may I interrupt you? Voice is not very clear. Can you repeat that question? Am I audible now? Is it better?

42:14 Hello? It is better now, sir. Yeah. It is better now. Yeah. My question was on margins. As in the second half of the twenty seven, as we improve our capacity utilization and as we have repriced our orders and along with the fact that the fixed price contracts will be lower in the mix, can we expect the margins to improve? Initially, we had the aspiration of high teen margins, EBITDA margins. So how are we looking at the margins in the second half of FY 'twenty seven or FY 'twenty eight? That's my first question. I will have Mehul answer this question, Jainanbai. This is Igor Patel. I'll just give you a small brief as to where we come from. H1 is generally cold in terms of business and H2 is generally so this is the business for H2 is generally very good.

43:09 And that's exactly what we are seeing. And the EBITDA levels on quarter on quarter are usually better in H2 than H1. That being said, we were expecting such corrections in Q2 as well, which was unfortunately hit because of the monsoon season and because of we're not being able to ship transformers. Again, it's not just the monsoon in Gujarat, it is the monsoon activity showing up at the customer end where we are sure that we will not be able to deliver transformers. Now going forward, we certainly see better utilization of our facilities. Optimum utilization is at 80% and that certainly would be our targets to achieve.

43:56 We have healthy order book margins. We will definitely see a good correction because better utilization will enable us bringing in economies of scale. So margin corrections will happen in Q3 and will definitely happen in Q4 as well. Mahmoudji, do you have anything to understand? So, Janumbai, so if you see H1 EBITDA margin is 16% and what we are maintaining for FY twenty seven and FY twenty eight is in between 16% to 18% of EBITDA margin. And we are quite sure that we will be achieving this with the H2 being heavy on the execution side. And with the operating leverage coming in during H2, this margin will go up and then the average margin for whole year will be at our expected range.

44:51 Okay. A similar question on this is, are you seeing the other pipelines right now in terms of with every player increasing their capacity, are you seeing the new orders right now to have similar margins? Or are the margins getting compressed given the competition? Can you provide some flavor on this one? As on date, we have not seen any pressure on either on the inquiry pipeline or on the margins at which we were booking orders. Moving forward, what's going to happen is something we'll see actually, but because the capacity expansion of maybe couple of players has happened, but for the majority of the players, it's yet to happen. And another thing which we have been telling time and again that not everyone or every player is expanding in the same voltage class. So it is quite diversified up, let's say, capacity expansion being done by different players.

45:55 And it's going to be spread over the entire requirement of the transformers. We are seeing capacity expansion, but alongside what we are seeing also is the newer requirement coming in. We saw this green energy corridor announcement coming in that certainly is going to throw up more requirement for the customers in all voltage process. Understood. My last question is regarding your 400... Sorry to interrupt you, Mr. Janam, but can you please rejoin the queue? Sure. I'll get back to Anupesh for further questions. Thank you very much. Thank you. Thank you. The next question is from the line of from Ico Quantum. Please proceed.

46:42 Yeah. Hi. Thank you for the opportunity. My question is pertaining to demand and supply dynamics of industry in 400 plus KV class segment. What is the total demand and supply in MVA terms for those transformers that is above 400 KV? Omar, by IIM Ahmed, it is really a tough question to answer when it comes to giving exact numbers of... On the requirement side. See, why I say this? Because everybody of us possibly see the data being published by CA or NEP, which according to us, let's say, concentrates on the inter... Interstate transmission network requirement.

47:29 It does not have intrastate transformer requirement or transfer... Or other transfer requirement for the intrastate development... Transmission network development. So the CA and NEP is showing up the interstate and the demand being generated for the customers on the generation side. So when you add up the interest rate numbers, which possibly shall be now be showing up after this green energy corridor announcement, we do see huge numbers of four hundred and seven sixty five kV class transformer coming in for next so many years actually. Giving any exact number to this question would not be really justified on our part. Okay. Understood. My next question would be what percentage of your current order book has higher KV class transformers?

48:22 Higher KV class, when you say, I'm assuming 400 KV, you mean the same? Yes, yes. Yes. 400 kV class order in our current order book is at 8.60%. And if we consider two twenty kV class order, it is another 47%. Understood. Thank you so much. Thank you. The next question is from the line of Kushal Saptarshi, an individual investor. So my question was regarding raw material procurement.

49:14 So during last quarter, we have procured significant raw material. So how much quarter of revenue this inventory can support? So, sir, this can support the quarter's requirement of our raw material. Okay. Okay. So since currently, there is a supply shortage. So what's your near term strategy in procuring raw material since our backward integration is expected in October 2027? So is there any near term guidance revise? Kushal, there are, let's say, two, three elements, I mean, two, three ways which we can answer this particular question. So see, what we are putting up as a facility through our backward integration efforts is the for the manufacturing of transformers and radiators.

50:14 We are not seeing any supply pressure as on date on these items. What the reason why we are putting up this facility for the tanker radiators is entirely different. We are doing it doing it up for the quality improvement. We are doing it up for the, let's say, reducing the time lines for the supply. So that's the purpose we have been maintaining this particular stand of ours. As far as other components are concerned, we have not seen any, let's say, difficulty on terms of procuring, let it be copper conductor or bushing or any other item. And we we certainly have, let's say, strong customer vendor relationship and other strong pipe... Planning a pipeline because of which we have been able to ensure that materials are available in time.

51:06 Only reason why in quarter two temporarily the disturbance happened because we know that in the regions of China and Japan, they were back to the typhoons. And due to Middle East war also, the availability of the containers has hampered... Has been hampered dramatically. So that's the situation which possibly, let's say, worked in little negative manner on the supply chain side. But other than as far as our connections goes, our, let's say, forward planning goes, we were on track and we are on track as well as on today. Okay. Thank you. That's from my side. Thank you. Thank you. The next question is from the line of Hemant Soni, an individual investor. Please proceed.

51:58 Thank you for providing this opportunity. Just wanted to, I mean, clarify one thing. Did I hear it correctly? That 40% CAGR is for FY 2728 and seasonal, right, for the next three years? The 40% CAGR is... When we went, I would like to so this is legal better. I would like to give you a comment there. When we went public, that's one statement that we had made that we would ensure 40% CAGR for coming three years and maintain a stable margin between 16% to 18% because of the new tech development that we're doing. We still continue to hold to that stand and we are confident that we'll be able to maintain that stand. One year has passed away from, you know, the the time that we even listed. So we're still having two years to maintain this plan, and we still stand by it.

52:59 So, sir, I shall expect 40% till FY '28, right, for the next two years, FY '23 and '28. Yes. Not for FY 2020. Right? Yes. Yes. 100%. And, sir, it should be evenly distributed. I mean, it should be year end 40% Y o Y growth? So sir, I would not like you to I mean, have you not tried to give any confirmations on that? Because answer the first question, yearly distribution, more or less, yes. But the business is cyclical. H1s are usually slow. H2s are usually very sharp and very growth heavy. So we cannot average it out on quarter on quarter basis.

53:46 But yes, to an effort to make sure, year on year, we can definitely average it out. Any ballpark figure for FY 'twenty nine maybe, sir? Sorry to interrupt you, Mr. Soni, but can you please rejoin the queue? Ma'am, this is the last question. Please allow me. Sir No., it would not be appropriate for us to give any guideline for FY '29 at the moment, sir. Okay, sir. Sorry. Thank you. The next question is from the line of from IVIK Securities. Please proceed. Sir, my question will be regarding to the green energy corridor that recently the question of the event... The growth guidance was given. Does it include the green Energy Corridor growth guidance or it is just additional to the growth guidance given earlier?

54:38 We we didn't understand your question, sir. So my question is regards to green energy. Hello? Am I audible? Mhmm. Yes. Yes. Yes. You are. So my question is on regarding Green Energy Corridor. You have given the 40% CAGR for FY '27 and '28. So is the Green Energy Corridor will add more growth rate towards these two years or it's been factored within the 40%? So in the CAGR growth commitment that we had... We were working on is last year from last year onwards, and we did not have any announcements of such green energy corridors. What we're trying to say is 40% is what we're trying to do. Minimum is something that we would like to bring to your notice.

55:27 Green energy corridors will definitely improve the demand, but on our side, we will still try and at least commit 40%. Okay. Thank you so much. Thank you. As there are no further questions from the participants, I now hand the conference over to mister Patel for closing comments. Over to you, sir. Thank you. Thank you, everyone, for joining us today and for your continued interest in Atlanta Electricals. While the second quarter presented certain temporary challenges, we remain confident in the underlying strength of our business and long term growth opportunities in the transformer industry.

56:15 With a healthy order book and strong inquiry pipeline and continued progress across our capacity expansion and higher voltage class initiatives, we remain focused on improving execution and delivering sustainable growth. I would like to thank our employees, customers, business partners, and shareholders for their continued trust and support. Once again, I wish you and your families a very happy Diwali and a prosperous New Year. I hope we have been able to answer most of your queries. We look forward to your participation in the next call. For any query, you may contact iFactors, our Investor Relations Advisors. Thank you so much, everyone. Thank you.

57:01 On behalf of Atlanta Electricals Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.