Ellenbarrie Industrial Gases (NSE:ELLEN) Q2 2027 Earnings Call

0:06 Good evening, ladies and gentlemen. We'll start the conference in a minute or so. Twenty seven earnings conference call of Ellenbarrie Industrial

1:56 Gases Limited hosted by the Capital. As a reminder, all the attendees will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. If you have any questions, please feel free to press the raise hand button. We'll call you on in turn and unmute your line so you can speak. Important note, if you need to ask a question, please ensure Microsoft Teams has permission to access your microphone when you log in. Otherwise, you'll not be able to unmute. Please note that this conference is being recorded. Kindly also note that the audio of the earnings call is a corporate material of Ellenbarrie Industrial Gases Limited and cannot be copied, rebroadcasted, or attributed in the PR media without specific and written consent of the company. Please note that anything said on this call that reflects the outlook towards the future, which can be construed as a forward looking statement, must be reviewed in conjunction with the risks that the company faces.

2:52 A copy of the disclosure is available on the investor relations section of the website as well as on the stock exchanges. To give you an in-depth understanding of the company and answer all your queries, we have from the management side today, mister Padam Kumar Agarwal, chairman and managing director, mister Varun Agarwal, joint managing director, and mister Keshrinivas Prasad, chief financial officer. I now hand over the conference to Padam, sir, for his opening remarks. Thank you, and over to you, sir. Thank you. Good afternoon, dear investors, and thank you for joining us today. Sir, sorry. Your voice is echoing. Sir, Sririvaj, please unmute yourself.

3:41 Yeah. Please go ahead. Yeah. Mhmm. Yeah. It's working now? Yes. Yes. Better. Am I audible and clear? Yes. You are. Please go ahead. Yeah. Yeah. Thank you. Thank you. Good afternoon, and thank you for joining us today for Ellenbarrie Industrial Gases Limited's q two f y twenty seven earnings call. We are pleased to report an important quarter marked by the commissioning of our new on-site plant in Durgapur and the award of a major BHEL contract for a large air separation unit in Orissa. These milestones expand our operating capabilities and position Ellenbarrie to participate in larger industrial opportunities.

4:33 As we complete the first half of FY twenty seven, Ellenbarrie is moving from capacity creation to capacity monetization. With recent investments be... Becoming operational, our priorities are to improve utilization, generate sustainable revenues, and deliver stronger returns on invested capital. Against this backdrop, I would like to highlight three structural trends that reinforce our confidence in the opportunity ahead. The first trend is the growth and gradual consolidation of the industrial gases industry. Demand is expanding across major end markets while customers increasingly value scale, reliability, technical expertise, and cost efficiency.

5:33 These trends favor established players with strong manufacturing and distribution and distribution capabilities, and Ellenbarrie is well positioned to strengthen its role in this evolving market. The second trend is the shift towards outsourcing gas production. Large industrial customers increasingly recognize the benefits of partnering with specialized suppliers instead of operating captive facilities. This supports long term on-site contracts with greater revenue visibility, an area where Ellenbarrie's operating experience positions us well.

6:20 The third trend... Okay. Sorry. We had some technical glitches. The third trend is the emerging opportunity in coal gasification. Its development will require significant oxygen capacity and large air separation units. Our recently awarded BHEL contract is an important first step demonstrating our ability to execute larger, more complex projects. Varun will discuss the contract and its operational implications in greater detail.

7:09 Together, these trends reinforce our confidence in the industry's long term prospects and support our strategy of building a stronger, more diversified industrial gases business. Historically, we have built a strong presence in Eastern And Southern India. We are now expanding towards Northern And Central India to access new industrial clusters, diversify our customer base, and create a more balanced Pan India footprint. Looking ahead, we see significant opportunities across both our coal gases operations and project engineering capabilities. Their commercial modules differ, but they are complementary through our technical expertise, customer relationships, and execution capabilities.

8:06 Ellenbarrie's expanding footprint, customer relationships, and engineering capabilities provide a strong foundation for long term value creation. We remain focused on disciplined execution, operational efficiency, and sustainable growth. I would like to thank our employees, customers, business partners, and shareholders for their continued support and trust. With that, I will hand over to Warren for the financial and operational review. Thank you. Thank you, chairman. Good afternoon, everyone.

8:52 I'll take you through our financial and operational performance for Q2 FY twenty twenty seven, the key developments during the quarter and our priorities for the remainder of the financial year. Coming to our quarterly financial performance, revenue from operations stood at $11.04 3,000,000 compared to $892,000,000 in q two of f y twenty six.... Not locked locked out app. And $987,000,000 in q one f y twenty seven. This represents a growth of 28% year on year and 16% sequentially. Our longer term guidance, however, remains of 20% growth in the core gases business.

9:42 EBITDA margin for the quarter was about 36% compared to 39% in Q1 FY twenty twenty seven. There are nuances beyond the headline numbers, so I want to take time to explain this for clarity. Performance of the coal gases business was stronger than the consolidated margin may initially suggest. The consolidated EBITDA increased from $387,000,000 in Q1 to $4.00 7,000,000 in q two. The segment ga... Segment margins for the Gases business also increased from 38% in q one to 39 in q two. However, for the company as a whole, the sequential decline in EBITDA margins from approximately 39% in q one to 36% in q two was driven by two main factors.

10:41 First, the other expenses increased as a percentage of revenue largely due to higher transportation costs arising from increased diesel prices and some longer distance deliveries. We expect this to normalize over the next couple of quarters. Second, the employee expenses were higher during the quarter due to the payment of annual increment arrears relating to previous quarter and further out of our project engineering team, which is like an investment to... Into our future execution capabilities. For the first half of FY twenty seven, revenue from operations stood at $21.30, representing a growth of 23% over H1 of FY twenty twenty six.

11:29 Coming to our core Gases business, the revenue from Gases related products and services grew by approximately 27% year on year during the quarter. And as explained earlier, the segment margin remained approximately 39%. An important milestone during the quarter was the successful commissioning of a new three twenty five tonnes per day on-site plant in Durkapur, West Bengal in September 2026. The facility operates under a fifteen year on-site gas supply agreement, and the contract follows a take or pay structure and provides long term revenue visibility. Commercial operations and revenue generation commenced in September 2026.

12:18 As the plant became operational towards the end of the quarter, we expect to see the benefit of the full quarter of operations beginning in this quarter, that is Q3 of FY 'twenty seven. This is an important addition to our on-site portfolio and takes our total installed capacity for onsites to more than 1,000 tons per day. Another major development will be award of $4.80 carou contract from BHEL towards the end of September. This contract involves the design, engineering, supply, erection, commissioning, and handover of about 1,200 tons for the cryogenic air separation unit in Odisha. This... We executed over eight quarters with commissioning expected in f y...

13:11 This is a key which mean... Will construct and commission the key and then hand it over to the customer. It is therefore different from a conventional on-site, supply business and then operate the plant under the long term contract. At 1,200 TPD, however, this will be the largest separation unit we have undertaken to date. It is an important endorsement of our engineering capabilities and positions us to larger projects in the future. Also allows us to participate in India's emerging coal gasification opportunity. Coal gasification requires large volumes of oxygen, creating significant demand for large scale air separation units as new projects are developed.

14:04 The BHEL order strengthens our... In this market. Our immediate focus will be on disciplined engineering and procurement, timely execution, and achieving contractual milestones. Revenue recognition will follow actual project progress and applicable accounting requirements. Our previously announced CapEx plans of approximately 4,500 million dollars or $450,000,000 for FY 'twenty seven and 'twenty eight remain on course. For the remainder of FY 2027, our focus will remain on increasing utilization at Ruraluparia II, stabilizing operations at our newly commissioned on-site facility in West Bengal and progressing our planned merchant capacity additions in North And Central India.

14:57 We will also advance the initial engineer... Onto the BHEL project while maintaining close control over project execution, working capital, and cash flows. Overall, we enter the second half of FY twenty seven with... Are progressively moving towards higher utilization. Lambda On-site facility has begun generating revenue, and our NG has secured a major new project. We build the common... Higher utilization, recurring revenue from on-site operations, execution of our engineering order book positions Ellenbarrie well for the next phase of growth.

15:47 Our focus will remain on translating these developments into sustained revenue growth, healthy profitability and stronger returns on our investment. With... For joining us, and we can now open the floor for questions. Thank you. We will now open the call for questions. Kindly raise your hand to ask a question. We will unmute your line. Please announce your name and organization name before you ask a question. As a reminder, we request all participants to restrict themselves to two questions and come back in the queue. We'll wait for a minute. Okay. Fine. We can start. The first question is from Mohammed Uzair.

16:33 Mohammed, please go ahead. Unmute your line and go ahead. Yeah. Hello. Am I audible? Yes. You are. Good evening. My name is Uzair Lari. I'm from Aweksart Financial Advisory. So congratulations on good set of numbers. So my first question is, sir, that, in the investor presentation, you mentioned the dip in margin was mainly due to the increase in freight cost. And you also mentioned in the PPT itself that to mitigate it, we are planning to pass on the freight cost to the clients as well as increase the price. So are we going to do both or either one of them? Just to confirm. Varun?

17:37 Sorry. I, I couldn't hear that question clearly. Could you please repeat? Sure. Sure. In the investor presentation, you mentioned that the the dip in margin was mainly due to the transportation cost, and you also mentioned that to mitigate it, we are planning to pass on the freight cost to the customers as well as to increase the price. So are we going to do both or either one of them just to confirm? Yes. I think a part of the margin was hit was due to the transportation cost. And, you know, we have long term contracts with most of our customers where we are able to pass on the increase in our cost to the customers. So this...

18:32 As we mentioned, we expect this to normalize over the coming, quarters. Okay. And, like, my next question is, like, what is the... If you could quantify the percent of total cost which... Out of which power contributes. Like, for us, mainly, raw material cost is power consumption. So what is the percent of total cost which power consumption contributes to if you would quantify it just to get an idea? I mean, if you look at financials in both q one and q two, power was about 22 odd percent of revenue from sale of Gases.

19:26 Okay. Understood. And we also produce this ultra high purity gases. Right, sir? That's right. So it is mainly produced through hydrogen electrolyzer, if I'm correct. And this hydrogen electrolyzer, like, do we have this on all of our plants or any, like, specific plant only, the older one or the new one? Yeah. Let me answer that. I think there's some stability issue with one of this number.

20:12 Electrolyzer is for a very small turnover of our total business. It is used for generating hydrogen. So as a percentage, I'm unable to comment on this, but it's a very miniscule of our total cost as well as total revenue. To answer your question, we have the hydrogen electrolyzer at our Olomiri unit close to Calcutta from where we are making ultra high purity oxygen. We also make ultra high purity oxygen for spectrometry, etcetera. Sorry. Ultra high purity argon for spectrometry, etcetera. So that is being made in, most of our plants. The price realization in this is comparatively much higher, sir. Correct?

21:02 No. It's a different product altogether. Okay. Okay. I'm sorry.... Product from the from the commercial oxygen. It... Or commercial argon, these are different products. And there is extra effort for quality analysis, certification, and things like that. So, naturally, I mean, those extra efforts have to be covered by much higher prices. Understood. So we have this electrolyzer on both of the blueberry plants? Like, we have two plants. Is that correct? The old one and the new one which has been... No. You know, we we have only on the one plant.

21:47 Okay. The the first one. No. No. This is... This unit is in our earlier plant. Okay. Okay. Understood. And so what is the trend of argon prices? These days... Uzair? Yes. Please this... This should be the last question. Maybe you can come back in the queue. There are many other participants waiting in the queue. Sure. Sure. So if you could share the Agan price trend, like what has been the price of Agan for the past quarter? That's all from my side. Thank you. So, look, while we don't want to comment on, quarterly, realized prices, what we, have, you know, reiterated is that the long term trend of our end demand remains intact.

22:43 And, you know, our is obviously a high margin product for us. And we see the long term trend because the demand is increasing at a faster pace than supply. The long term price trend remains positive. Having said that, you know, argon prices have remained healthy, I would say, the average realizations in the recent past. So, you know, we we are very constructive on on this going forward as well. Thank you so much for your answers, sir. Appreciate it. Thank you. The next question is from Nilang Jain.

23:31 Nilang, please unmute your line. Go ahead and announce your organization name. Yeah. Hi. Thanks for the opportunity. Nilang here from GreenGen family office. Just wanting to understand one is on the newer EPC contract of the BHEL business. So what kind of margins can we realize over how long and what would be the working capital requirement for such a contract? And would we see... Continue to see such kind of contracts in the future as well as a strategy for the company? Because I'm assuming that if the margin profile can change for the overall consolidated basis. Right? Yeah. Thanks for your question, Nilang. Absolutely right that I... Overall margin profile will change because these EPC contracts will carry a lower margin than our core Gases business, and that's...

24:28 Obviously, on account of the fact that we are not really employing any long term capital here. It's only working capital that is required. And that's why I think it's important to look at our segment margin for Gases Mhmm. Rather than the margin for the company as a whole. Okay. And, you know, obviously, we'll So you you will give disclosure segment...... You know? Okay. So you will... In the future, we'll Yeah. I mean, as a as a part of our yes. Yes. Even now, we have segmental reporting for the Gases business and the... What we call project engineering. Right. Right. This kind of project will come in the project engineering revenue. So, you know, it's it's important that you highlighted this...

25:21 To also reiterate that in q two, even though the margins of the company as a whole appear softer, but the margin of our core Gases business is actually increasing compared to q one. You know? And... Yes. And this this kind of contract typically, you know, has a significantly lower margin, you know, probably high single digits, low double digits kind of a margin profile. And, you know, having said that, obviously, it it generates a strong absolute flow return and a high ROCE because there's the... And there's zero long term balance sheet risk.

26:08 So, you know, in that sense, it's it's quite, I would say, complementary to our core gases business. Ours will continue to remain on our core Gases business, though, because, ultimately, that is what drives the long term recurring revenue. Certain We opportunities in this front, which... Execution capabilities. One of those projects because it was in a very strategic sector. We have a very, very long term and significant addressable market.

26:57 And, you know, even though this is an EPC contract, but it kind of opens up the room for us to gain, you know, long term contracts where, actually, we own and operate the asset for other coal gasification projects. So it's it's very important... Send to the lead of companies which have... Which are able to execute and which have orders to execute plants with over a thousand tons per day capacity. Okay. So our larger aspirations... Long term aspiration will be to have a thousand d p d plus kind of an on-site project eventually in a similar space. Sorry, Nilan. Could you repeat that? Our long term aspiration can be to own a on-site project of a thousand plus TBD Absolutely.

27:49 Yes. Once we have demonstrated the capabilities. Yeah. Because we... A lot of customers want that credential. You know that... Right. Right. These guys have... Create a plant which is of, you know, price because about... In terms per day price is typically... You know, only the industry leaders have typically been able to execute. Right. Right. And what about... Secondly, just about the the current CapEx of the two bulk plants like North And Central India. So what time of the next year do we see either of them going live and, you know, how much time to ramp up? I mean, we typically assume, about, six to eight quarters for the ramp up of merchant plant and these plants, to start counter in the second half of the next financial year.

28:51 Okay. Both should come around the similar time. Hello? Yes. I think both, we expect plans to come online in the second half of, the next financial year. Okay. Okay. I'll join it back, Dhukhi. Thank you. The next question is from Dixie Jain. Dixie, please unmute your line and go ahead. Oh, no.

29:38 We can't hear you, Dixie. Just increase the volume. Unmute your line, Dixie. Hello. Am I audible now? Yeah. Yeah. You're much better. Yeah. Please move. Sorry. Can you repeat, what time are we expecting the, North India and the Central India plan to go live? I I believe it was in the first half of FY twenty eight mentioned earlier. Hello? Yeah. Mister Dixit, we are right. We we expect...

30:34 Yeah. Go ahead, Varunji. Go ahead, Chinu. I was saying we ex... Revenue contribution to win from h two, and we expect these plans to sort of come live around the middle of the... Okay. And, also, can you... In value, can you quantify how many how much was the total effect for, employee expense for the project engineering division that we've we've had in this particular quarter? Yeah. Let me take this one. This was about, 11,000,000 for the quarter.

31:20 1,100,000. Okay. Yeah. And how do we see the, rest of the year panning out? Or do you think that, going back to normal from these, power and freight cost to... Take another two quarters and will continue on the same margin lines for the rest of the year as well? Yeah. You see, talking about freight cost is linked to diesel. That part will be a pass through to the customers. But the other part, we... Yes. Oh, so that is what I'm asking. So my question was how how much delay is there in the pass through usually if the freight costs have been up for, say, three months?

32:11 Does it take another quarter for the pass through to happen and you see a margin dip for, more or less two quarters? I mean, practically, happened, there's a time lag, two to three months time lag between the cost increase and the pass through. Okay. Okay. Okay. Thank you for taking these questions. Hello? Yeah. Thank you for taking the questions. Thank you, Dixie. The next question is from Pritesh Chida. Pritesh, please go ahead and unmute your line. Yeah. Hi.

32:59 So just first clarifying on the capacity bridge and the utilization of the assets. So, you know, what I happen to understand is that last year, you guys started, a two twenty ton merchant plant. And now this year in h two of twenty seven, there is this 320 tons on-site plant, which is getting operational. So first, until the capacity that you had until quarter two and whatever revenues we see, what kind of utilization is those capacities on? And once you operationalize the on-site plan, which has come in quarter three of twenty seven, what will be the revenue potential on the assets which have come until quarter three twenty seven, if you even if you could tell us that part?

34:05 So I think we, you know, broadly, want to reiterate 20% sort of revenue growth guidance on an annualized basis. We we don't sort of provide plant wise revenue breakup. But having said that, I would say, of course, there will be incremental revenue coming in from the on-site. There is also some amount of spare capacity available in our recently commissioned merchant capacity.

34:52 Those are things which can add to the revenue of the company and phase of revenue... Sorry. I'm sorry. But...... That's... We are currently implementing. That's on the on the Gases segment side. So pardon me. But for the last thirty five minutes, your line is not clear at all. Let me just check. Shinavazi, you want to... Sorry. What...... To Alajam. Hello?

35:47 Is it better now, Pratish? Yeah. But, sir, it is going midway, and that's happening for the last thirty five minutes. So in between the the words go, you know, words go jumbled up or on or mute? We hardly can comprehend what you say. Let me just try to answer again. So what we were saying was that there'll be incremental revenue in q... In h two from the new on-site plant, and there's also some spare capacity available in the recently commissioned merchant plant, Uluveria 2. So we expect revenue growth to come in from these two units.

36:45 However, you know, we don't provide a plant wise breakup. No. Expect 20% revenue growth on on a annualized basis. And the next phase of growth... So the growth from these two units, meaning the spare capacity in recently commissioned merchant plan to year two, as well as the new on-site will drive our revenue growth until the new merchant plans come online. But on a longer term basis, we expect a 20% higher on the... Okay. The Ullaria tool with... Which you're referring to came last year. Right? Hello?

37:33 Yeah. Preetashi, it is... That came online, in q four of, last year. Okay. And the next two... And the 450 crore CapEx that you have mentioned, that is for the next two merchant plan for, West and North. Correct? Or Central and North, whichever you mentioned. Hello? Preeti, there's some... No problem, sir. You can answer this. It's okay. I'll just... Can can you repeat see, can you can you just take it? I'll just sort out the connection from my side.

38:29 Yeah. Same same problem this side also. Pitesh, can you repeat the question again? So the question is, the next two plants of 450, which you're referring to is the merchant plan for the North and the West, which is incrementally going to come next year. Yes. Okay. On all these plans put together, if you had to put put a peak revenue, without asking when that peak revenue is coming, but what should be the peak revenue on full utilization or on or on optimum utilization? It should be... You see, current... Currently, we are looking at about... At current run rate, it's about 400 CR. So you can add the incremental revenue to this plus full year effect of...

39:23 Utilize an effect for the new two plans would be about, 300 CR. So it can go around 450 or 500 to 800. And the the the BHL contract, which we have got for EPC, what should be the net margin or an operating margin for this contract and this 500 crore contract should be executed in how many months? And beginning which quarter we'll start seeing the execution? You you must have referred to the press release we released on this topic. Subject to that, I think it's about 24, and we received this award in September.

40:09 When... What should be the net margins of this... Of course, margins are normal. We cannot... Okay. Yes, sir. Okay. And, so one more thing. Yeah. Any reason why the the merchant plans which are supposed... Which were supposed to come this year, which is h two two seven have been postponed by one year and have moved to h two two eight. So these merchant plants at the time of IPO was slated to come in FY twenty seven end. Now they're coming in FY twenty eight end. So any reason? So these have been delayed rather mainly due to the land allotment, whether it's petitioned comments and statutory approvals.

41:17 Okay. And once one or two quarters is normal for this kind of size of project. There's a... General governments do not work at the speed of industry and business. So there, whatever we factor in Okay. Sometimes goes out of hand. So the peak utilization that we are referring to at about 800 crores based on these all assets, We should... Once the plan comes next year, so FY '29 will be the year one of operations. FY twenty... FY thirty will be the year two of operation. So, you know, if one has to assume a peak, will it be FY thirty or it can go beyond that? So two years or it will... It takes beyond that for a motion plan? It's really it's really difficult to comment right now. It all depends on market situations.

42:10 That point in time, there are a lot lot of new industries coming up in that area based on which we have taken an investment decision. So we do not really know how much time it will take to load upfront. Okay. So industries have announced their plans. Upcoming industries have announced their plans. They may be in time. They may be delayed. So Well, I was wondering if it's difficult to project in advance. Okay. Okay. Okay, sir. This was helpful, sir. Thank you very much. Thank you. Next question is from Noel.

42:59 Noel, please unmute your line and go ahead. Yes. Good evening. Can I be heard? Yes. You can. Yeah. Yes. Yeah. So I'm sorry, but the audio kind of cut off in one point. What exactly is the quantum of the higher fuel costs... I mean, higher costs and transportation costs? Do we at least have some kind of tip on that? Noel, let me clarify. You see, gas margins have gone up. Okay? And what has happened is we have protected our margins as such.

43:44 But in the meanwhile, the costs have gone up, to some extent, like your digital price, which is, sort of transition cost. And and, of course, there is some cost associated with delivering the liquid to longer distances. So having said that, while our margins are... Absolute margins have also have gone up, But if you look at the cost and revenue, though, both simultaneously going up, it has an impact on the EBITDA margin compared to revenue. So that need to be appreciated. Otherwise, power costs are going up because of increasing the volumes also.

44:34 Yes. But if we are talking about it... I mean, the past that we're looking for, I mean, what is the rough percentage or some kind of a guide you can give on that? And maybe not this specific figure, but if you can give us a guidance on... Broad guidance. You can say more or less will remain same as year to date percentage if you look at... If you... Q one and q two average if you look at. Okay. Checking. Okay. Fine. Yeah. That is one thing. Second question which I had is, so are there contribution in your gas mix is about 16% for this quarter? Previous quarter, it is about 10 odd percent.

45:22 In terms of this overall increase of about 600 basis points, I'm not asking for something specific, but what exactly is the volumetric contribution? What is the pricing contribution roughly? Sorry. We lost you for some time. Yes. Think...... Has been a higher contribution compared to one q? Yeah. I I would say it's a combination of volume and price. I would say about half and half, broadly speaking. But volumes have also gone up as, you know, our capacities... The new Uluveria capacity ramp up has happened. That's also producing this incremental organ. So as we ramp up capacity utilization, more... For us to sell.

46:24 Okay. I mean, I didn't hear anything. Take it. Yeah. I think I'll just... I will... I guess I'll have to just take it off the hook. Thank you. Thank you. Next follow-up is from, Nilang. Nilang, please go ahead and unmute yourself. Yeah. Thank you. So just wanted to understand on the East India on-site, which just got commissioned in the last quarter. So for that, do we need to ramp up anything or it's a fixed inflow every month here onwards? And what kind of inflow is this and, you know, the money that we make on this? That's a fixed...

47:11 I mean, it's a fixed amount that we make every month, and there's no ramp up required there. You know, as as I mentioned, we don't... Okay. I don't... Fine. Fine. No worries. And are we able to get any mix of these gases and sell it outside? There will be some small quantity available for external sale, but that'll be available as we ramp up production, you know. So so that, again, depends on how the customer ramp up happens. But the the bulk of the revenue will be from the long term contract, which is of a take or pay nature. Okay.

47:57 And anything on the the storage business, like those electronic gases for, like, helium and all for semiconductor? Any thoughts on that? Like, are we looking to... Since there's... The competition was talking about this opportunity, So are we pursuing anything on that front? So, you know, nothing significant there on the Helium side. Helium is primarily, like, sort of a traded gas. So, you know, we don't really... We can manufacture it in India. It's bought and Right. And sold. On the on the solar gases, we do have a plan to sort of, you know, in a Central India location to have solar gases available.

48:49 So not quite electronic gases, but solar gases, which is also an addition to our portfolio. And, you know, that that sort of adds in terms of our capability to cater to the solar customers. And that's a that's a portfolio of about four to five Gases. Okay. And lastly, this this quarter, we saw Argin and others at about 16%. So what... My understanding was Argin is a larger margin driver for the overall consolidated EBITDA. So do we see these levels to continue, and how would it play out? Like, we... At this level of RVL and other gases, do we land up by hitting 40, 42% EBITDA in the future?

49:42 Yeah. I think, you know, again, long term, you know, we had sort of indicated that, we'll have about a 40%, margin, for gases, the gases segment, which we are very close to at 39%. We had also indicated the contribution of Argan will go up, which which it has. I think we'll be, you know, again, somewhere around the mid teens that, you know, in the region of, let's say, 14, 15, 16, that sort of range. And we expect we expect this trend to continue, I think, in q two... Sorry. In h two, we will see the revenue contribution from the on-site, which will also, you know, meaningfully improve the margin profile because on-site revenue typically has a higher margin profile than the, bulk revenue.

50:44 And last question from my side would be, how is, how is our conversation with our industry folks? Like, you know, where... How is the industry? Because we have a very diversified spread of industries. So just to capture the overall sentiment, so a large part of our business is outside where I feel we are fairly covered. But on the bulk side, how is the industry sentiment like across, you know, those three, four key industries that we deal with? I think, look, on-site is primarily steel. Right? So, you know, we don't really have any on-site plant for any industry other than steel. But then when you talk of the bulk and the the bulk or the merchant customers, then, you know, it's across a wide variety of industries.

51:37 We've obviously, after steel, the, most important industry for us is pharma where, you know, the conversations have been very encouraging with our customers. We see, you know, a lot of them, enhancing their, capacity which which will hopefully lead to higher volumes for us in the future. You know, on the, on the health care side, meaning supply to hospitals, it's a pretty stable and, you know, consistent growth. So, you know, all in all, you know, conversations are encouraging. It... There are certain cases where, you know, implementation of new CapEx by our customers as well as taking longer than, originally envisaged.

52:30 But, I think things are moving in the... In a positive direction. Thank you. That's it from my side. Good luck. Thank you, Nilan. Thank you. The next question is from Darsheel Zaverrie. Darsheel, unmute your line and go ahead. Hi. Thank you so much for taking my questions. Firstly, congratulations to the group of. Right? Sir, I just wanted to know, like, with regards to our TPC, sir, it's a very big project for us. Right? So the execution, usually, the EPC is more towards the edge tool. Right? So could we see some meaningful chunk of revenue coming in edge tool for us for this project.

53:18 There's some problem with the network. Hello? Basically, Yomi? Yeah. Yeah. That's it. So... Yes. Yes. So to answer your question, I think this is an eight quarter execution cycle. Right? So more of the revenue will obviously be booked in the second half of this project compared to the first half. So you're absolutely correct about that. So, you know, quarters five to eight of this project is where you would see a larger revenue than quarters one to four. And quarter one, basically, is two three of f y twenty seven for reference purpose.

54:09 Okay. So so because of this, optically, our consolidated margins might look a bit damp because we would be investing a lot of costs. Right? Like, that's a fair way to look at it, sir? Yes. So I think the the key number to look at, I think, on a sort of long term recurring basis is the segment margin for Gases. Right? Because this revenue will come in a separate segment, which is project engineering. So, you know, you will have a clear, you know, how much significantly lower than the segment margin for guests. So, you know, if the revenue will be clearly bifurcated, so that I don't think there'll be any confusion there even going forward. If you look...

55:03 Sort of numbers as a whole, then, yes, there will be a change in the I'm so sorry, sir. I think that the... You wanted that to work issue because I'm trying to decipher what you're trying to say, but I think I got the gist of it. Also wanted to know, like, in h one, this overperform the 20% thing. Right? I think somewhere we are getting help from our value also. So the value growth in our products. Right? So the 20% growth that we are seeing is mostly volume. Right? So the value can be added or we can over perform our 20% growth guidance. Is that a fair way to look at it? Yes. I think most of the growth will come from volume.

55:56 There will be value growth in the sense that, you know, from greater contribution of Argan, which has already sort of gone up from, you know, closer to 10% to mid teens. Okay. Okay. I'll add to this last question from my end, sir. The CapEx that we are doing, will be, you know, will they have been mostly funded via debt or, you know, we are planning to, you know, raise some more capital funds, sir? So currently, we have cash on the books, and, you know, we will take on some debt as required at the project level. But at the moment, there is nothing imminent in terms of capital raise.

56:47 Okay. Okay. Not good. I'll just have one last question from Bharat. So as of the project execution, we've got a very prestigious product right now. Are we looking to do it in, you know, somewhere outside India also or something like that or some talks going on for that? I think at the moment, our focus is on India. I think there's significant opportunities here. We are obviously still at a, you know, single digit market share, and so lot of room for growth here itself, but nothing imminent internationally at the moment. Okay. Okay. Fair enough. That's it from my side. Thank you so much, Rhonda. That's all. Thank you. Thank you. The next question is from Ashish Pari. Ashish, please unmute yourself and, go ahead.

57:50 Ashish, please unmute your line. Ashish, maybe you can come, in the queue. Next follow-up is from, Dixie. Dixie, please go ahead. Dixi, please unmute your line. My questions have been answered. Thank you. Okay. We'll try, Ashish, again.

58:41 Ashish, please go ahead. Unmute your line. I think Ashish is not able to unmute his line. That was the last question for the day. Thank you once again for your time and participation. On behalf of Ellenbarrie Industrial Gases Limited, this concludes today's conference. For any questions, please feel free to write to us on the email IDs mentioned on the invite. We appreciate your engagement. You may now disconnect your lines.