Glass Wall Systems (India) (NSE:GLASSWALL) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Q1 FY twenty seven Glass Wall Systems (India) Limited Conference Call hosted by IASL Capital. This conference call may contain forward looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as of date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in a listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then 0 on your touch tone phone.

0:46 Please note that this conference is being recorded. I now hand the conference over to mister from IFL Capital. Thank you, and over to you, sir. Thanks. Good afternoon everyone. Welcome to Glass Wall Systems (India) Limited first quarter FY twenty seven earnings conference call. From the management side today, we have with us Mr. Chairman and hold time director, Mr. Director and CEO and Mr. The CFO of the company. I will now hand over the call to Mr. For his opening remarks. Thank you and over to you sir. Yes. Hi. Thank you, and good afternoon, and a very warm warm welcome to everyone present on the call.

1:35 Thank you so much, Mohit, for introducing myself and my father who are both on the call today. We also have mister Sanjay Sawan, who's the chief financial officer at the company, and SGA strategic growth advisers. They are our investor relation advisers. They are also on the call. I think to begin with to begin with, I would like to thank and congratulate all our stakeholders, investment bankers, and business partners for helping us achieve this milestone of getting listed on the Indian stock exchange. Since, obviously, this is our first earnings call, I would like to take you through Glass Wall Systems' journey, business overview, industry opportunity, and growth strategy, followed by which we can talk about the financial findings of the first quarter.

2:26 And post that, we can jump into the q and a. We have also uploaded the investor presentation deck on the stock exchange, and I'm sure everyone has had a chance to go through that. Right? So let me start by introducing the company briefly. Glass Wall Systems has been operating. We are the third solution providers, we have been operating in this in this industry for more than two decades. Our business has started in 2002 and was founded by mister who's the chairman of the company. So it's been almost now twenty four years for us in doing this business. Let's start by introducing what we do exactly. We are, as I said, facade solution providers.

3:15 So facade is everything on the exterior of the building that you see today. Our major product is obviously aluminum frames with glass that you see on a lot of commercial buildings, but our expertise is is is expanded into everything on the external building envelope. So we have capabilities to design, manufacture, and install, not only aluminum and glass, but also railings, lures, ACP cladding, stone cladding, any sorts of rain screen cladding, windows and doors. So expertise of our company is to provide turnkey solutions for everything on the external building envelope.

4:03 Obviously, this is a premium segment. We define the skylines of the city, so we are an important fit to the developers. It is only after we finish that the developer can start his and or procedures and also get his fire NOC and occupation certificate. So in that sense, we are a very important page. We define the aesthetic of the building. We also need to make sure that the functional requirements of the building are met by the product that we put onto the building. So because it is the external phase of the building, it is subjected to all natural elements. So when we design facades, we take care of the fact that the facade is going to be subject to air, water, acoustic performance, thermal performance, building moments, seismic or earthquake earthquake moments.

4:55 So all of these natural elements, the facade has to cater and fight and accommodate the worst natural elements. So we are heavy on engineering. We are heavy on manufacturing. This industry is is very niche in the sense that every project is different, and we engineer for every project from the ground up. We are operating in three business verticals today. The first business vertical is the domestic facade solution. On the domestic facade, we are working with the greater developers in the country today where our nature is turnkey turnkey jobs. So that means, as I told you, we do everything from the beginning. We do the engineering. We do the manufacturing, and we also do the install.

5:41 So we work with... Closely with the developer. All our contracts are through the developer. And and our focus predominantly on the domestic side is to do nonresidential real estate. So all of our order book today on the domestic side is commercial real estate, where more often than not, it is already a leased out property, and the developer is building to cater to a particular demand of of lease, and and we are executing the job. So that is our first business vertical, which is domestic facade. We are a pan India company, so we have presence around the country, but our major markets are Mumbai, Pune, Ahmedabad, Bangalore, Hyderabad, Gurgaon, Noida. So all tier one cities is very...

6:36 Is our focus markets. The second business vertical that we are in is the international facade business. Here, our job scope is that of doing the engineering, doing the manufacturing, and then only supplying the goods as a ready to install product around the world. Right? So our clients in the international business is... Are people like ourselves, first our contractors in US, in Australia, and elsewhere in the country who hold the main contract. So they do the install, but they buy the product from offshore. So we come in and we engineer and supply the product to them as a ready to install product, and they install on-site.

7:26 So it's a purely product supply sort of a business where b to b product supply, where, obviously, margins are slightly better, and we don't hold the execution risk of projects. We started the business in 2022 with US, and today, we are operating in The US and in Australia. We are also exploring new geographies. As I take this call, I'm sitting in Canada in my hotel room. And why I'm here is to basically try to develop Canada as a country where we could possibly export panels into. I'm also heading to Israel next week, which is another country that we are exploring very closely to expand our international business. This is the second business vertical, which is b to b product supply.

8:14 The third business that we are in is penetration business. Penetration for easy understanding is doors and windows that you see in residential projects, but we operate in the premium segment here where we are doing ultra luxury projects and ultra luxury residences. This is led by my brother, Amit, who is also on the call today. He's an architect by qualification. And here, we are doing very niche projects. We have we have types of companies in Europe and all around the world where we import the engineering. We do the local assembly, and we do the local installation. So the engineering is basically with partner companies based out of Europe, and we have exclusivity with a lot of companies supplying product into India.

9:02 Penetration products, very high end. And we do the manufacturing and we do the install. So your... The... There are two client bases. One, traditional client base was very b two c. So... Because we were doing private houses and residences, so it was a b to c sort of a business model. Now that has migrated a little bit into b to b because now we are seeing that in the country, there are multiple luxurious projects that are coming up that demand the demand the best window products available in the world. And this is the market that we are increasingly catering to. So it's... While the b two c will continue, we see that there's a b two b element also that is coming up here. So so you have the domestic turnkey for third vertical. You have the international product supply.

9:53 And then you have the penetration, which is a high end window, very niche. Obviously, higher margins, lower volumes, but higher margins. Very niche penetration business. So these are the three verticals that we operate out of. In terms of our product portfolio, I've already mentioned to you earlier. We do everything on the exterior of the building. And we also have products that we have listed on the international EPD system, which is our sustainability play, where we see that a lot of lot of developers today are becoming very conscious of the sustainability angle. And we have products. We have our own product that we have listed on. We have third party audited and listed on international APD system, which says that our products that we put on to the building are are much more sustainable than the global average values.

10:44 So while we do everything on the external, we have a huge sustainability play where we are ahead of the market in terms of our... Having our products registered. We are a Mumbai based company, so office is in. Our manufacturing is two and a half hours away from Mumbai City in a industrial area called As. It's an ownership land parcel in MIDC. It's a one lakh square meter land area. What we have developed with the recent expansion is around 32,000 square meters, and we are building up our own glass processing unit, which I'll come to in a bit. So right now, we are a Mumbai based company. All the design offices, all the central operations are run through the lower panel office, and all the manufacturing is done through the village of our factory.

11:40 Wherein in that... In the same land parcel, we have only developed around 30% as of now. We are developing the glass processing unit, which is going to add maybe another 25% or so. So that land, as of today, even with the future expansion of glass processing unit, is around 55, 60% occupied. So there's good enough room available for us in the same piece of land to expand further. Right now, our capacity is around one thirty panels a day, and we have four dedicated production lines with a lot of people working in the factory. All our CNC machinery, which is for cutting, notching, drilling is all from Germany and Italy. So very top of the line.

12:26 Our blazing pumps are from Graco USA, which is again top of the line. Our entire sheet metal factory is with Amada and Japanese machinery. So the info that we have put in is very high end in our factory. It is the best available in our industry. And we have fairly automated operations through the factory floor. We have 400 millimeters of conveyors, and we have around 350 odd workers working, of which around one twenty are on on our payroll. The rest are contractual workers. So we also have a test facility that we have made in the same piece of land. The test facility is basically to put up all the facade products before it goes on to the building and actually test it to real life situation. So we do testing for air and water leakage.

13:21 We do testing for seismic or earthquake moments. We do testing for structural load. We do testing for building moments that is interstory. That is a vertical moment. We do sway, which is which is a horizontal moment. So before one is to do all the mathematics on paper, and one is to actually put it on a test lab and and test it out for real life scenarios. Right? So we do have a test lab in house. We are the only ones in the country to have this as for SaaS applicators. And it is a third party lab accredited from NABL, which is the certifying body for all Indian labs in... As as third party labs. So our manufacturing setup is world class. We are also expanding and doing the backward integration for which we have raised the primary money. Obviously, the construction is underway for that. What we are desiring to do is do our own processing of glass, which we are today doing from third party entities.

14:24 So obviously, for us, this is more control over supply chain. And, also, there is a there is a bottom line saving for us because we are going to be vertically integrated to that extent. So the money that we raised for the primary on account of the glass processing is already being put to use where the construction is underway. The entire project cost was 80 crores. We have raised 50 crores through primary, and the rest was through internal approvals. In terms of client base, in the domestic segment, obviously, we work with the trend that are sales. So companies like Barmani, Prestige,, LBC, Loda, These are the kind of clients whom we deal with. On the on the export side, we now have customers in The US, which is a reflection window wall and wind pro. That is our major client in The US. And we have clients like SRB Global in Australia. They they are also fairly big in in in Australia. So SRB Global and Multiplex are the two clients that we have in Australia.

15:32 Overall, we have completed around one fifty eight projects. One fifty eight projects since our inception. And in in US and Australia, today, we have around 15, 16 projects that we have completed. Our strengths are that, obviously, the business model is diversified into three business verticals. Our capacities are fungible, so it is the same factory. It is the same design team. So tomorrow, if the... If an opportunity presents itself, the company is flexible to address that opportunity in a particular segment because our capacities are interchangeable or fungible between the three business verticals. We have a strong client relationship. Obviously, a lot of the business that we do is with repeat clients, which I think everyone knows on the call.

16:18 So very relationship driven business. Yes. We are trying to introduce new clients, and that's the reason that we are all traveling, and we are doing it on a yearly basis too. But a lot of our client is is repeat, and that is also reflection of the fact that we've been delivering quality and timelines over a substantial period. So a lot of developers really feel very comfortable with continuing business relationship with us. Obviously, our design engineering and manufacturing are are amongst the best in the world, and we spoke about it. The software's on design that we use are, again, top of the line available in our industry. So in terms of infra and people availability, I think we are well poised for future growth.

17:07 We spoke about sustainability and also experience management. Obviously, my father has been is a veteran businessman. He's been in business for the past forty years. He acts as a good guide for us in Glass Wall. I, myself, I have more than twelve years of experience in Glass Wall. I'm an... I'm a civil engineer by qualification. And today, in my capacity, I lead the entire operations of the business. So so overall, we are a very niche business. We account for, let's say, on a project as a total project cost, facade is anywhere between seven to 11, 12%. So we are a substantial bit of work for for the developer. We hold great leverage over over our clients in terms of the nature of work that we do.

17:57 Company is diversified into multiple business verticals, and our enterprise geared up to allow for growth for the next couple of years without any incremental CapEx. So this is this is the business. In terms of the industry opportunity, obviously, there are research reports around this. What I can briefly touch upon is how the business verticals are growing. The domestic facade is poised to grow at a CAGR of approximately 15.9%. Today, it's a 9,000 crore market, and it is it is assumed to grow at around 60 naught percent CAGR and reach around 14,500 crores by FY thirty. The global facade market is extremely big. Obviously, you can't even quantify it. It is...

18:49 But we have in in The US, the facade market for someone like us who is supplying product into The US is close to 30,000 crores. So... And that is growing at around six and a half percent or 7%. So I think there's huge opportunity in the export segment also for a company like us who is playing around with China plus one model and where we see that all these countries want to actively die... Dealers themselves from being 100% dependent on China. So we see that there's a good opportunity there for our company to keep growing. Registration is again is is again growing fairly quickly. I think that is going at 25% CAGR, and it is today at 9,700 crore. Sorry.

19:43 It is a it is a thousand crore market increasing to a 3,000 crore market over a period of time. So what our strategy for going ahead is doing the same things that we are doing. It is it is a new journey for us to be listed. So while we are learning how to how to, you know, communicate and put our story across on the public market, but the basic intent of the business remains the same. It is to keep these three verticals growing, explore new markets on the international side. It is to grow our domestic presence and definitely scale the penetration side of things where we see that there's good opportunity. So so the future growth is is to keep all these three verticals growing.

20:33 The three verticals are very different to each other, but the aim is to maintain a good balance going forward between all three. I think before handing over to the CFO, I will quickly recap the deal that we did at the listing time. The IPO size was $4.28 crores. The fresh issue was 60 crores. The OFF was $3.68 crores. The 60 crores is obviously what we spoke earlier for the backward integration of the glass processing unit that we spoke about. One needs to understand that our business is obviously a project business, so we get projects and we complete projects. So a lot of our revenue recognition and profit recognition depends on project schedules.

21:21 And I'm sure everyone on the call knows that there is a certain amount of, let's say, let's say, a preform or a delay or a move move from initial estimated project timeline on a project related business. So our business also, because it is project... Completely project based, can move a little bit here and there depending on the project schedule. So I encourage all the investors today on call to look at this business from a long term perspective at a yearly level as opposed to quarterly level, which could fluctuate a little bit here and there based on the project schedules. While while we have been delivering consistent growth on a year on year basis and and the same is going to happen this year, my only request is to to have cognizant of the fact of the earlier statement as to the little bit seasonality of our business where we typically see that the first two quarters are fairly slow, and the last two quarters are fairly heavy.

22:26 So this trend has been historical and is is is probably going to continue to be the same. In FY '27, we have said this earlier with all our meetings. We are expecting around 25% growth on revenue, and EBITDA margins will be historically in the same range that we have delivered over the past two years. And EBITDAs are... What we are aiming to deliver is around 23 to 25 EBITDA and 18 to 20% tied at the consolidated levels. Today, our order book as on July 31 is $9.82 crores, which is the unexecuted order book that we... That the company has on hand. And this is almost twice the revenue of last year. So this is good visibility for us for the next eighteen to twenty four months, and a good amount of that will be executed in the balance of the year as well. So from a visibility standpoint, I think the company has good visibility.

23:29 We are... We have a strong pipeline. I am trying to develop new markets. We are trying to develop new markets. So overall, I think from a order book standpoint, the company is very comfortable. And and from a margin standpoint, also, we are fairly confident that the end of the year will will be what we are saying because we know that the margins that we have taken the job there are are are at the same level that we are committing. So I think that's it from my end. I will probably hand over to Sanjay Savan, who's the CFO of the company, to just briefly touch upon the q one results. Thank you,, and good afternoon to everyone. Basically, let me now take you through the key financial and operational highlights for the first quarter FY twenty seven.

24:17 For Q1 FY twenty seven, revenue from operations stood at 107 crores, registering a strong year on year growth of 36%. Revenue mix, I will just go through this. Domestive business revenue was $6.52 crore, up of 93% year on year, driven by the strong project execution. International business, revenue of 39 crores, down by the 12% year on year, reflecting the timing of order execution with delivery schedule over the coming quarters, which is generally up in the third and fourth quarter. Then, sanitation business, the revenue of 6 crores, up over 127% year on year, driven by the rising demand from the luxury residential segment. EBITDA for Q1 FY twenty seven came at rupees 23 crores, reflecting the growth of 9% year on year on EBITDA, EBITDA. EBITDA margin stood at 21.3%.

25:14 Now, the EBITDA margin were impacted due to a lower contribution from the international business, which is a 36.3%, which typically carries a higher margin and also impacted the overall margin performance during the quarter. Employee cost, there is an increase in the employee increase in manpower requirement for the expansion and the operationalization of the new capacity, coupled with the periodic salary revision led to increase in the employee cost. In other expenses, basically includes the freight cost, which is now being borne by the company in this quarter and is due to the customer of cost to cost, which is on the we don't give in the margin. As per the revised commercial agreement versus ex factory billing, during the same period in the last quarter in Q1 FY twenty six, the way we are supplying the goods at the ex work. So, all the freight cost was one by the client.

26:04 Then profit after tax, which is a 17 crores grew at a lower rate compared to the EBITDA grew at less than. This is basically lower other income since Q1 FY twenty six, we had a 1.6 crores income on account of the property sale. And during this quarter, Q1 FY twenty seven, we have higher depreciation on account of new capacity expansion commercialization. So, basically, this is all from our end. We now open for the question, Q and A section. Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question, may press star and 1 on the touch tone telephone. If you wish to remove yourself from the question queue, you may press star and then 2.

26:50 Participants are requested to use handset while asking a question. Ladies and gentlemen, let me wait for a moment while the question A reminder to all the participants, you may press star and 1 to ask a question. The first question is from the line of from Pinpoint X Capital. Please go ahead. Thank you for the opportunity. So my question is, to what extent capabilities are similar to existing projects in residential and commercial? But we have a residential customer and commercial customer. So what are the advantages to us in this execution of this segment? So what... I will take this question. I think what you are trying to ask is is the infrastructure from a design and manufacturing standpoint able to cater to residential, commercial, and all these other segments. Is that correct?

27:52 Yes. Correct. One of the synergies to to our company? Because we are charging to residential, commercial, and the hospitality. So what is the issue as compared to other place? We What's the issue as... Okay. Super. So I think one is the infrastructure that the design capabilities and the manufacturing capabilities that we have today in the country are much superior than all of our our peers. Right? So while everyone is going, but our infrastructure, for example, we spoke about the test drive. We are the only first class fabricators in the country to have this. The glass processing unit that we are putting up for backward integration, we are the only ones in the country to have our own glass processing unit. So from a integration standpoint and a scale standpoint and a skill standpoint, I think infrastructure is a big benefit for us in terms of in terms of the value add that we bring to the client as opposed to our peers. Right?

28:52 The second big differentiation is that we are a diversified business today where we have three business verticals. Our peers, the grade eight peers that whom we compete with in the domestic market on a day day on day basis do not do any export, for example, and also do not have a luxury penetration arm. So today, our company is derisked and diversified in the business that we do across the business verticals. Right? So I think between the infra and our business model in itself, we have a distinct advantage over our peers. Sure. My next question is, we are in a niche segment. So what are the technical capabilities? We need to put with a new player to make a presence in this facade segment and penetration segment.

29:42 The technical capabilities that are needed? Is that your question? Yes, sir. A technical standpoint, obviously, we... As I told you earlier, because we are the external skin of the building, the facade has to make sure that there is no air leakage, there is no water leakage, there... The acoustic performance is good. The performance performances of the of the of the system is good. It should cater to earthquake. It should cater to building moment. It should cater to difference in temperature. So from our design capability, what we need to do is that the system that we draw, which is is... Has two purposes. One purpose is to meet the aesthetic intent of the architect and developer because they care about how the building looks.

30:32 The other aspect is to meet the function requirements. So our capabilities on design engineering through high simulation software that we have and people and structural engineers and architects that we have on board, what we do is we try to meet the aesthetic intent of the architect as well as the function requirement of the of the project through the design that we do of the system. So that is where the heart of the process is, where the design of the system and the systems that we have in house today is is is, let's say, not superior, but is is the is the differentiating factor between us and maybe other players. Thank you. And one more question for export segment. We are not in installation segment, but we are providing previous step in the different installation. So what is the management rationale why we are not internally to installation there and taking care of of the contractors in US and Australia?

31:30 Also, whole idea is that we need to get greater market access to scale with doing installation also. First of all, it will be a new market for us where the labor laws and the whole ecosystem is different. So it is opening the company to that much greater risk if we take the installation also. Right? The whole purpose of doing export is first to go to various geographies, is to minimize risk on the installation side, and it is also to get greater margin access as opposed to the domestic market. Right? So once you make the goods and at least now, it doesn't really matter to the company whether it is going to The US, Australia, Israel, or elsewhere.

32:16 So you you can be operating in that much more market and scale up that much larger and quicker if you're only doing a supply business. So the rationale behind the international business is exactly that. So one final question. So what is the expected timeline for CapEx coming up in the process? Next eight months, we are looking at commissioning. Sure. Thank you. Thank you so much. Thank you. And I invite our next question from the line of from Systematics, P and S and AIS. Please go ahead. Yeah. Hi,. Hello. Yeah. Hi. Hi. Hi, sir. Thanks for the opportunity, and congrats on good setup number.

33:05 So there's a couple of questions. What was the order inflow for this quarter, Brody? And other question was with regards to the margin. As you said that... So the Internet business due to spread cost increase, we'll be passing it to the call business. So how should we look at it moving forward in this couple of quarters? Was there any delays in this q one which will get the price in the q two q two number? No. That's a good question. So I'll answer both of it. I think first one, let's talk about the freight because you touched it up, and Sanjay also spoke about it. See, up until last year, our works was ex works. Right? So we had no freight cost at all because the client was taking care of it.

33:54 It was getting picked up from our factory. So the domestic transit, the shipping, and then the, let's say, local transit in in The US was all being taken care by our clients. Right? What we have migrated to Sense is a DDP, which is a delivered duty trade sort of a model where all the freight cost is now borne by us. So why we did this is, first of all, to help our clients in in the sense because with the war, the volatility of the shipping cost was too high. But while we did that, to extend some sort of assistance to our client, we have a complete pass through on this. So whatever is the cost of freight is a complete pass through to my client. So we are not opening ourselves to risk on any sort of volatility on the shipping.

34:48 But what is definitely happening is because there is now an increased shipping cost, which is part of our revenue and and each one in part of our cost as well. And what Sanjay mentioned earlier is because there's a... As far increase in revenue and cost, there is a there is no real impact on margin, but the percentage of margin is lower to that extent. Right? So that is what has happened. Going forward, I think container costs are going to cool down. So so the add on revenue on account of this would be fairly minimal, I would like to assume. And today, let's say, in this 107 crores of revenue in the first quarter, around 6 crores or so, 6 or 7. Just give me a second.

35:40 Yeah. 5.5 crores was actually freight. So if you adjust the freight down on the revenue and the cost side, the margin obviously increases by around 1.5%. Right? And also on the q one, there was a sale of q one of last year. There was a sale of property for which capital gain was recognized as other income. So net adjusted, all of these, we are we are exactly in the range of the margin profile that we delivered on a yearly basis last year. Right? So the margin hasn't deteriorated at all to that extent. It is it is at par with what we have delivered over the last financial year and what we are committing to deliver this year.

36:29 From a new order standpoint, I don't think there's any order of substance that has come in the past three months. There are a couple of jobs that we are very close on, which would which would come on to the company very soon. Okay. So we so we are declared that we have we have got certain couple of new clients at The US market as well as the. Let's say, we are getting any RFQs from that. Yeah. Yeah. I'm I'm traveling for the same reason. I have a meeting today. I was in US. I'm in Canada right now, and next week, I'm in Israel, is to kind of discuss and try to close on jobs that we've been quoting on. So that's why I say that I have greater confidence that there there are jobs. Also, the domestic side is huge. I'm talking to only on the international side that we are very close to clicking a couple of jobs on on on these new markets that we're trying to establish.

37:32 Okay. Thanks a lot, sir, and appreciate all for details. Thank you so much. Thank you. The next question is from the line of Sameer Gyan from Minimal Bank Securities Limited. Please go ahead. Yeah. Hi, Sunil. Yeah. Thanks for this opportunity, sir. First of all, on the revenue recognition, like, if you are, say, example, doing any particular building. So when you recognize the revenue, which you recognize once the material is getting delivered, or it's the complete building which get completed and then you only recognize the revenue? So I will break your question into two parts.

38:17 One is recognition of revenue from a p and l standpoint in terms of how we do it, and one is our payment terms. Right? So there are two different things. Let's start with the payment terms. Payment terms is a milestone basis where we get paid advances 10 to 15%. I'm talking a generic payment term across all... Across the domestic sector. Right? We get paid on design submission, which is around 10%. Then we get paid on material delivery on-site. So let's say it's a 50 floor building. If I deliver material of two floors, I get paid for two floors. I don't have to wait till I deliver the entire material. So it's a pro rata sort of a payment cycle. Right?

39:03 So advanced design percentage around 10%. Then on material, we get paid around 55, 60%. So overall, which is my major cost is the material and manufacturing. Right? We get paid on material delivery up to 75, 80% of the job. Right? Then balance 15, 20% is installation and handover. So this is how the payment flows. On the invoicing side, is we raise tax invoice again on these milestone basis. On the revenue recognition side, we follow the percentage of completion method where the budget of the project and the cost incurred the cost incurred on the project determines what the revenue recognition is. So for for the p and l revenue is a a percentage of completion.

39:56 For the percent... For the payment and invoicing is this milestone based agreement that we have with the developers in in the country. For export for export, I bill when the when the material leaves my factory. So I raise an invoice when the material leaves my factory, and I get paid sixty days from the invoice date. So by the time the goods reach, let's say, my clients, I'm already paid for it. So this is how we do it in in all the business verticals. Yeah. Well understood. Second thing about freight, said that now the freight is included in selling price and also the core of the. But you are also said that duty paid is also included in that. We see suppose last year when The US imposed duty, that was not part of your expenses.

40:52 But now, if suppose anything comes, then it will be part of your your expenses. Yes. That is true. Okay. So what could be the experience, sir? What... How do you expect if suppose any duty comes now from US? Pass through. I know. All of this is a pass through for me. Okay. The company doesn't have any risk of any changed duties or even, sorry, shipping to that extent. Yeah. But will that have any impact on the demand side from The US? I can't say that there is no impact on the demand, but I don't think that US has any other choice.

41:38 Because, obviously, all of this tariff thing is not really spurring of domestic manufacturing. Right? Because no one is willing to put in that capital in this country. And then they don't have the manpower also at their disposal to start entire manufacturing. I'm talking for my industry. Right? Specifically for my industry. So they don't have that manpower or the will to invest the capital to start manufacturing. So when that is not happening and the product is still coming from offshore, because the import percentage hasn't dropped as a volume of goods, it is nothing but inflationary to the final consumer. Because even my client is passing it through to the developer. So, yes, demand overall of construction is going to get a little bit slower, I assume.

42:23 I feel that. But for now, I think it's such a big market that for us, where we are very small in this market, it's not going to be too much of a big deal. Excellent. One more question relating to... You said that there was some delay in delivery of the export business. So will that miss There no there is there is no delay of delivery in export business. Project schedule, I said, determine now q three and q four, I have three projects that I have to complete, which is going to be on the floor of export. So I I... So there's no delay per se. There was lesser jobs. The jobs that we had did was not on schedule on quarter one. So quarter one and quarter two export business.

43:10 Quarter three or quarter four export business. So now because the schedule is is is is for me to start from now. So the revenue growth guidance so far So I didn't interrupt in between, mister Sunil. I will request you to please speak to the security The last question is Thank you. I'll invite the next member who pays a cover idea from ICJ Securities Limited. Please go ahead. Yeah. Hi, Bupesh. Uh-huh. So thank you for this opportunity. I just wanted to know about your average life cycle of a contract. So what is the time period from which you receive the order, and then what is the Is it eighteen to twenty four months, typically.

43:59 Eighteen to twenty four months, typically, is the turnaround from order receipt to completion of order. And this is file. How is the revenue loan towards the period? How is the revenue? Loan growth is this eighteen to twenty four month period. Majority of the revenue recognized later half, in the later half, or in the year half? No. See, again, it's... As I told earlier, it's a project based business. As the project demands a certain schedule, we, as a company, try our best to manage the timeline of the project along with the existing work. Right? So, ideally, you want to have, you know, a balanced level of work throughout the year.

44:52 But, necessarily, that does not be absolutely true for our business because sometimes projects go one or two months here and there. Right? It's finally construction. So what we try to do is we manage... Try to manage our capacities to make it sort of linear throughout the year. So give or take a couple... Maybe a month or two months here or there, typically, the projects are always on time. So there could be blips here and there, but overall, over a span of twenty four months, I think the project completes. It is obviously different for different verticals also, like export is typically within twelve months or I don't do any install for the timeline. It's a little bit shorter. On the domestic side, it is longer at around twenty four months, but we also do the install.

45:40 Okay. Thank you for that. And, sir, another question. So what is the difference in your margin for export and domestic workers? I don't think I can give you that kind of a straight answer. But, yes, up... RPA is a road... Some of the said that the export and the penetration are higher margin verticals for us. So there is there is a fair bit of difference between domestic and export. Okay. Thank you. Yeah. Thank you so much. Thank you. The next question is from the line of from from. Please go ahead. Oh, hi, sir. Thanks for taking my question.

46:28 So my first question is if I look at... Hi. If I look at our company's, you know, PNL, what are the longer term, then I'm looking at, say, pre COVID levels to, you know, right now. What I observed is, you know, the revenue has more or less been at at the pre COVID around 350. And at at that time, at that scale, the margins were, you know, 10, 11% give or take. While today, where we stand at 464 to three, the margins have, you know, gone up 20% plus. So what I wanted to understand from you is, has has something fundamentally changed in in the in the past couple of years? Are are we doing something differently which is doing this... The high margins? Or, you know, just trying to understand this this bit.

47:17 No. This is great question, so I will answer that question. A lot of things have changed since pre COVID. Right? To now what we are doing. The first major change is that we have introduced the export and penetration vertical, which is which is scalable and at a higher margin. Right? So, obviously, there's an impact of this business verticals to the resultant margin of the company. Also, what we realized was pre COVID, we were very heavy on residential projects on the domestic side. So domestic projects, and this is extension to the earlier question, have a larger life cycle in terms of their completion time. Right? And... Because the developer makes and sells and makes and sells. As opposed to what we are doing today on the domestic side is completely commercial, where a tenant is waiting to occupy and the timeline for turnaround of the project is much lesser.

48:14 So whenever the timeline is lesser, the realization that faster than you can understand and imagine that the margins are better. Right? So the entire period from a resi... Residential heavy order book on the domestic side to a completely commercial order book has also impacted our margins along with the business vertical diversification that we've done. One more important thing that has happened is that we have aggressively tried to improve our contractual terms post COVID. So when the commodity prices went up in COVID, we did not have any pass throughs on materials. Right? So we suffered on account of that, of increased commodity pricing. And what we have achieved post that is that today all our contracts across all business verticals have passed through on aluminum and glass, which is the major raw material for us. Right?

49:06 So to that extent, any hit on margin that was coming on account of commodity price increases is no longer coming to us because it's a pass through for all our clients across business verticals. We also consolidated our manufacturing. We were, you know, we were... We had two, three factories around the country. Now we are operating from one factory. So there was benefit of cost and scale that happened because of consolidation. So I don't think it was any one particular subject, but it was a combo of all these three, four things that we've done. That now you see that the margins are sustainable. And today, we are a debt free company. Right? And going forward also, we are very confident of sustaining this because the business model will remain the same.

49:54 Got it. Got it. That... That's very helpful. Sir, one more question in addition to this, you know, if you could help us understand what was the share of exports in 2,018, 19 people will end. What is it today? Zero. To see how zero. Okay. FY '18 was zero. Our exports have started from '23 onwards. FY '23 onwards. Got it. Got it. Got sir. That's it from us. Thank you so much. Thank you. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address all the questions from the participants in the conference call, We request you to kindly limit your questions to two per participant.

50:39 If you have a follow-up question, please rejoin the queue again. The next question is from the line of Sagar Danna from LKME Ventures. Please go ahead. Hi,. Hi, sir. Hi. So on a full year FY twenty seven basis, what percentage of revenues do we expect from exports, registration, and the domestic business? Can we give forward guidance in this detail? And Because we've mentioned 25% revenue growth or something like that. Right? So you can just give a broad breakup in terms of NAPO, SAPO, SAPO, SAPO, that it will be in a similar breakup of, let's say, range of revenues as as comparable to last year.

51:30 And what was that? That was around, I think, 4045% also was domestic, 42% or something was international. And I think some 10 odd percent was penetration. Sanjay, correct me if I'm wrong, please. Yeah. Yeah. For financial f y twenty six, 49% is domestic, 45 is international, and the 6% was a penetration. And I think we'll be in in in the same ballpark. Completely. And in the year, financially, FY '25, it was a 47% domestic, 42% international, and 12% connection. Got it.

52:16 My... So the intent is you sort of to remain... The intent is to maintain the same balance. Yeah. Sure. Sure. Second thing you mentioned about how freight cost is now part of numerator and denominator. Right? So on a full year basis on '27, what percentage of EBITDA margins can we expect considering this revised policy which was not there, which was unlike '26? I don't think there'll be a huge impact on the margin because a lot of jobs that we are doing now are high margin. So maybe it's download whole, but those jobs accommodate. So I don't see a huge play. Maybe maybe a few bits here and there. Maybe. I'll... I I I I can tell you that will be will be in the same range. 23, 25% EBITDA and 18 to 20% on that.

53:06 Got it. Thank you so much and all the time. Yeah. Thank you. Thank you. The next question is from the line of Sunil Jain from National Bank Securities, Credit Limited. Please go ahead. Yeah. Thanks for this opportunity again. Yeah. Hi. Yeah. Yeah. So you said that... Sorry. Didn't interrupt. Mister Sunil, you're not audible. Yeah. Yeah. Just a second. See, just... I was asking about the market and your market share in India. Market research, but how much is your market share in like to like market? This market can be very big.

53:56 But what is the job you are doing in that, how much you have the market share? We will be, I think, around six, 7%. In the... Domestic market. Yeah. The other place are there are equally like you or they can be bigger or smaller? We are second we are second largest in terms of revenue in the domestic area. Right? The largest one is probably a 100 crores above us. So there are three or four guys whom we compete with who are doing revenues about 200 crores. And then, obviously, the tail from 100 to 200 crores is quite huge.

54:43 They are also the organized segment. But anything above 100 crores, we consider to be players in the organized segment. But, typically, the 100 to 200 crore players don't compete with us directly. Anyone who's doing about 200 crore and and therefore, three, four guys in the country who do it, they are our direct competitors. Okay. And on the international side, out of the total export, how much is to The US and how much is to the Australia? I think this year will be completely to The US. We don't have any current Australian job. Majority is to The US. Yes. Right now. Okay. Last year, there was some revenue last year, there was some revenue to Australia. I think around 30 odd crores was to Australia.

55:35 Rest was all US. Correct. In FY twenty five, ten from Australia and FY 2624 from Australia. So their regulatory are almost 5% funding. Okay. Right. Fine. Okay. That's great. Thank you very much. Thank you so much. Thank you. The next question is from the line of from HENDRIG. Please go ahead. Hi,. Hi. Thank you so much for taking my question. My first question is regarding the GPU unit that will be planned to install. So by then, do we do we expect that the facility would be operational?

56:22 And how much EBITDA margin improvement do we post the post the glass processing unit that we have in house? Yeah. So we are under construction as we speak. The orders for the machine have gone out. I think the estimated time line from today is around eight months for starting to commission, and the expected moment on the bottom line is around one one and a half percent. Okay. And my second question is regarding what kind of order book trajectory do you foresee for the next two years? The idea for the company is to maintain at least two years of your visibility because our turnaround times, as I said earlier, is around eighteen to twenty four months. So as long as I can see and have a two year visibility, I'm very comfortable. Anything about that is just me or committing in terms of my order book. Right? So the idea is to grow at 23% CAGR, twenty twenty twenty, 25% CAGR on the revenue side and is to maintain an order book to cater to that sort of growth on the top line.

57:37 Okay. Thank you so much. Thank you. Thank you very much. Ladies and gentlemen, we will take that as the last question. And with that, concludes the question and answer session. I now hand the conference over to mister for the closing comments. Thank you, and over to you, sir. Thank you so much. I think... Thank you everyone for coming. I think it was a good session. It is our first session. So it's great. I look forward to meeting you guys every quarter and talking about the business. It's very interesting time for us, and we hope that all of you all see value in the business and continue to remain invested.

58:25 Thank you so much. Thank you, members of the management. On behalf of IFL Capital Services Limited, we conclude this conference. Thank you everyone for joining with us today, and you may now disconnect your lines. Thank you.