ISGEC Heavy Engineering (NSE:ISGEC) Q1 2026 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to Isgec Heavy Engineering Limited Q1 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. Mahesh Patel from ICICI Securities. Thank you, and over to you, sir. Thank you. Good afternoon to all. On behalf of ICICI Securities, I welcome you all to the q one FY twenty seven earnings call of Isgec Heavy Engineering Limited.

0:52 Today, we have with us from the management, mister Adi Kapuri, managing director and mister Krishna Chaknani, joint managing director and CFO. We will begin with the opening remarks from management, which will be followed by q and a. Thank you, and over to you, sir. Thank you. Thank you, Mahesh. Good afternoon, everyone, and thank you for joining us today. We appreciate your time, your continued interest in our company and the trust you place in us as we continue to build for the long term. We value these conversations because they allow us not only to discuss our performance, but also to explain how we are executing our strategy, responding to the market environment and positioning the business for sustainable growth.

1:42 Q1 FY twenty twenty seven performance, standalone financial results. We delivered strong growth this quarter with the total income up 51% and PBT up 10% year on year. The total income for the quarter is INR $15.85 crores. Income in the Industrial Project segment is higher due to improved order execution, in line with project execution schedules. In the Manufacturing segment, income is higher due to the dispatch of a large order from a U. S. Customer, which the customer had put on hold for some time. Export revenue during the quarter is INR $3.85 crores, about 25% of the total revenue, up from 15% in Q1 FY26.

2:30 We expect this increased level of exports to continue. The EBIT has also grown by 15% to INR157 crores. The profit before tax of INR123 crores is 10% higher than 1 and 12 crores for the quarter ended June 2025, which reflects higher operational profit. You may recall that Q1 FY twenty twenty six included high other income due to ForEx fluctuation. On the margin front, the manufacturing EBIT margins continue to be 12% and within the 12% to 13% range guided by us. And the EBIT margin for the projects business is 5.25% better than it has been for the last few years.

3:19 Total order booking for the first quarter is INR2323 crores and the total stand alone orders in hand as on 06/30/2026 are very good at INR 7,727 crores. Order execution is proceeding smoothly manufacturing and the industrial projects business. The domestic market is strong across almost all our product lines and we have a healthy level of export inquiries from customers across various industries. Our persistent efforts and focus on increasing export business have shown good results. A number of export orders have been booked from customers recently in Africa and in Latin America.

4:06 The export inquiry base is very healthy. The company's net fund position has improved by INR140 crores during the quarter and net borrowings are substantially down to INR240 crores compared to INR381 crores as on thirty first March twenty twenty six and INR $40.08 crores as on 06/30/2025. Impact of geopolitical tensions on our business. Current geopolitical developments have not affected existing order bookings. Export and import logistics costs have increased and transit times have also lended. The cost of some materials, which have risen due to war are having a small adverse effect on profitability.

4:57 Commodity prices, particularly steel, copper, aluminum and nickel have more or less stabilized, though they remain slightly above pre war levels. Shipping and logistics for exports and imports are experiencing delays, reduced availability of ships and containers, sharply elevated freight rates and opportunistic pricing by shipping companies. There were no significant supply disruptions to the geopolitical situations during April to July twenty twenty six. Most of the increased costs are expected to be absorbed through normal contingency provisions. Consolidated financial highlights. The consolidated orders in hand are as on 06/30/2026 amounts to INR 8,958 crores.

5:50 The total income for the quarter ended June 2026 is INR $19.93 crores, which is about 45% higher than the INR $13.74 crores for the quarter ended June 2025. Revenue has been higher during the quarter in Isgec Standalone and Isgec Hitachi's Ossen, but lower in Saraswati Sugar Mills. Isgec Hitachi's Rosun is doing well with higher revenues and good orders in hand of INR889 crores. Saraswati Sugar Mills had lower cane availability last year, resulting in lower production. We are working on various steps to improve cane availability next season.

6:37 The consolidated EBITDA for the quarter is INR137 crores, almost same as the quarter ended June 2025. The consolidated profit before tax of INR 53 crores is 18% higher than the INR 45 crores restated for the quarter ended June 2025. You would recall that in March 2026, we had shifted the accounting of the Philippines business to continuing operations from the earlier classification as held for sale and discontinued operations. This has also required us to restate the financial results for the quarter ended June 2025. Now let me briefly outline the key reason for the reduction in the consolidated profit before tax.

7:28 The key reason for the reduction in the consolidated profit before tax compared to the stand alone profit before tax is the loss from the ethanol plant in The Philippines. As you know, the ethanol plant started commercial production for the current sugar season on 12/17/2025 using sugarcane as feedstock and concluded sugarcane crushing on 04/20/2026. Thereafter, the plant has been operating on molasses as feedstock. The plant has been running at about 65%, 70% capacity utilization and Ethanol sales are going smoothly. During the quarter, the segment incurred a loss of INR 83 crores, mainly INR 37 crores attributable to depreciation, INR 20 crores attributable to interest and about INR 10 crores attributable to ForEx fluctuations.

8:25 The balance is fixed costs, which could not be fully recovered. The plant is presently running at about 65% capacity and the current quarter is expected to be better. The consolidated net borrowings have reduced by INR170 crores during the quarter. Net borrowing has decreased to INR304 crores as on thirty six, twenty twenty six compared with INR476 crores as on thirty onethreetwenty twenty six and INR832 crore on thirty sixtwenty twenty five. I will now talk about the ongoing expansion of capacity at our manufacturing plants.

9:15 As already informed, we are investing to add manufacturing capacity across most of our manufacturing product lines. This includes stresses and machine building at the new plant coming up in Hartoli in Haryana, the new facility to manufacture skids and modules coming up in our SCZ plant at the age in Gujarat and the investment in capacity expansion and machining facilities at both our casting factories. The tubing and piping shops at Rathangar and the Standard Mechanical Press Factory at Babal. All these are running largely on schedule and some of the new production facilities will be progressively completed this year. We are expecting production to contribute to this year's manufacturing segment revenue.

10:05 F twenty twenty seven outlook stand alone. Looking ahead on a stand alone basis, we expect FY twenty twenty seven revenue to increase by 10% to 12%. Margins on the manufacturing business should continue in the range of 12% to 13% and in the projects business should improve slightly within the 5% to 6% range. To give more trust to High Potential Services business, a new division has been created within the Industrial Projects business named the Global Industrial Services and Solutions division. This division will undertake work relating to operations and maintenance, retrofit and modernization, services, spare and digitization.

10:52 Looking ahead, the inquiry pipeline and the order booking outlook remains strong in both domestic and export markets. The weaker Indian rupee should support improved realizations on future export orders. We recognize that the broader environment may continue to present both uncertainties and opportunities. We are taking steps to mitigate the risks and convert the opportunities into tangible benefits. Thank you again for joining us. Let us now begin with the question and answer session. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touch tone telephone.

11:39 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 assembles. The first question is from the line of Rehan from Coherent Wealth. Please proceed. Hi. Am I audible? Yes, sir. Yes. Thank you. Thank you for taking my question. Pardon me. I have some basic questions because I'm new to the business. I just wanted to understand the reason for the conservative growth guidance that the management has provided despite such a good execution consistently in the recent times. And with the new orders, the legacy order book ending with new orders coming on stream at higher realization, any reason to be at a 10, 12% kind of top line guidance that you've been giving, sir?

12:40 So the the order book, I agree, has improved substantially, but a good part of these orders are going to the execution is going to carry forward to the next financial year. So that is the reason why we are talking about a 10% to 12% growth in the top line. So on a like to like basis, after restating, you've still done about 46% kind of growth at a top line basis on a console level. So what would be your broad run rate over the next two, three quarters? And how do the commodities help you in a way because you'd also have some inventory and the realizations would also add to the top line? So how are you looking at it from a consolidated basis?

13:34 So if you're talking about the quarterly run rate, so Yes, sir. Annual ten ten ten to 12% that we have mentioned. So it is going to be similar. I mean, next quarter, this quarter, ongoing quarter, July to September, I'm expecting the projects business to continue at around the same level, about INR 1,000 crores or so. The manufacturing segment in the stand alone, that is also expected to be at the same level. This particular quarter was helped by one order, which got dispatched, but the next quarter should be at the same level. Mr. Puri mentioned about manufacturing capacity is coming online progressively.

14:21 That will certainly be helping. If the Kitati is also... Is doing better than last year, it will do about 10% better than last year. Last year, did about 670 crores. This year, it will be doing 10% better, and its profits will also be about 10% better. The Sarasota sugar mills, so we had a season last year because of untimely rainfall because of certain agro climatic reasons, there was less cane available to us. So, sugar milk actually produced much less sugar. So, so, sugar milk revenue is going to be down. These are the two major subsidiaries under our under these consolidated companies.

15:13 So the others are certainly there. Eagle price is doing fine, but as you know, it's only about INR 150 crores in a year. Is it Titan Metals is doing fine? It's about it's also going to be doing about INR 150 crores or so. So is the Hitachi amongst the subsidiaries, is the Hitachi is going to do better and is going to do lesser. You talked about inventories. So we don't normally carry inventories, which are so as you know, whatever we make is engineered to order, designed to order, manufactured to order or as a project to deliver to order. So what we buy is largely for the specific orders. We don't carry stock of different items.

16:04 Except in the case of sugar, sugar prices have gone up substantially. So in sugar, there is some amount of profit, which is actually coming out of the inventory because there's no manufacturing happening in this next two next there will be manufacturing will start in November, but until then, there is no manufacturing happening. But otherwise, because of inventories, there's no special gain. You for the Yes, detail sir. Thank you for the detailed explanation. Just on the same lines, if I can ask, if I may ask. In Q1, I think you did about INR800 crores of top line from manufacturing... The manufacturing segment. What would you attribute as a steady state for us as... I know you... It... I will not hold you to it, but what would mister Puri or you give us a steady state run rate for for FY twenty looking at the consolidated numbers I can see.

17:02 So that include... That includes is the heavy engineering, the manufacturing portion of is the heavy engineering. Correct. It also includes the ISGEC Hitachi Zosun and Eagle Ford Correct. Correct. And the Zip title. So I would expect it to be... So this is looking like 800 crores. It should be certainly $77.50 crores plus. Okay. So the large order which you... The large order you mentioned, what was that size? You mentioned there was a large order in q one. Yeah. That was about 130 crores. Okay. Thank you so much. Thank you. That that was on hold for the customer's reasons. He had paid... The customer had paid us 95% of the money to two or three quarters ago, but he's not ready to lift it because his project site was not ready.

17:49 And finally, it's been dispute... Finally, it's been dispatched. Okay. So just to sum up that the manufacturing bit could see a seven fifty steady state run rate consolidated? For the next quarter. Yeah. For the next quarter. Later on, I I I would expect it to increase a bit. Okay. Thank you so much. Thank you. A reminder to all participants, anyone who wishes to ask a question may press star and one on their touch tone telephone. I repeat, 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 Manish Goyal from Thinkwise Wealth Managers LLP.

18:34 Please proceed. Yeah. Thank you so much, sir. Sorry. I would like to continue on the guidance because, ideally, if you were if you were to look at 10 to 12% growth, sir, incremental revenue in the last call also, you said large part of 500 crores incremental will come from manufacturing. In first quarter itself, sir, we have done $5.70 crores of incremental revenue, which probably takes care of our entire year growth. So... And you did allude that we'll at least maintain seven fifty crores of manufacturing revenue, and Hitachi, will also do well. So I'm not... And and new facilities are coming up, additional capacities available for dispatches maybe in half two.

19:25 Maybe you can correct that. So, sir, why why are we a bit more conservative? Manish, the way you are describing, we would also expect it to be slightly higher, but it's better to give a conservative guidance and meet it rather than give an aggressive guidance and be iffy about it. So yes, we can hope for better, but this is what we would do. This is a number that we would like to state actually, 10% to 12%, sir. Okay. And Hitachi, you said 10% revenue growth and you said profits will be also higher by 10%. So you are looking at absolute profit because last year Hitachi, Susan had done very well on the margin front. So we believe that the margins will be holding on in Hitachi's.

20:19 That's right. You're right. Yes. Wonderful. Sir, on the previous expansions, what Mr. Adi said, Pudhi was referring to in the opening remarks, Everything is on track. So what I probably recollect is that we were probably looking to invest around total investment of 700 to 800 crores over a two to three years time frame. So what kind... So just to, like, you expect all the expansions program to complete in the current year? And, like, what kind of incremental revenue potential it can create for us? So let me answer that.

21:05 So the total investments approved by the Board for manufacturing capacity, and that's what we have been announcing in various announcements So to the you also know that we have a for the projects business, there's a building under construction that will also be our corporate office. So that when you said INR 700 crores, that included that expense as well. For the manufacturing capacity additions, the total investment approved by the Board is INR $50.02 crores. So that is presently under the implementation. So the bigger ones, the machine building, which is the process, which is happening in Harpoli, Mr. Puri mentioned about it in his remarks.

21:55 So the first phase of that is already reaching completion. We should expect some small production to start by the first week of next month. The major phase for that where the major investment is happening, that is expected to complete in around progressively between end of twenty twenty seven actually, close to end of twenty twenty seven. So all of also the end of I mean, end of calendar twenty twenty seven or first quarter of calendar twenty twenty eight.

22:41 Also, the process module thing at the hedge. So that's also expected to complete around 05/31/2027. So all of these together when fully complete, they have the potential to add a total revenue of about INR 1,200 crores per year and fully complete. So that all it will largely start reflecting in from early twenty twenty eight, 2029, we will get the full benefit of these investments. But progressively, there will be some increase in the output. Okay. So at least next year also, we should probably get some benefit from these expansions?

23:31 Right. Right. And sir, on like to come back on the caveat biofuel. Probably, sir, we were expecting improved performance from this quarter with 6,000,000 liters sanctioned by DOE and for this quarter as well as for the next quarter. And we thought that it probably would do at least will breakeven at the cash level. So the only loss would be optically on the depreciation side. So just would like to know that why is it that having a first quarter, full quarter of operations, we had such a vast loss.

24:22 So, yes, we have we have failed. So, okay, let let me recap the whole thing. So we started in December 2025, '17 December 2025 as production on sugarcane. Thereafter, plant stopped on April 20. Even when we are doing that, even then some amount of molasses was also being fed. Now after the sugarcane season has ended there, the sugarcane season has been shorter there as compared to what is normal. Now we are expecting the loss is largely because of depreciation.

25:13 There is an interest cost that you can see that interest cost is actually we don't have any outside loans. This company, CBPI, it doesn't have any outside loans now. So the interest cost is between the companies in the consolidated obviously gets adjusted. The plant has run it has let me I'm just describing some statistics for you. It has crushed about 84,000 tonnes of gain during this season. Up to now, it's used up about 20,000 tonnes of molasses. It has produced about 10,500,000 meters of ethanol and sold 8,000,000 plus. And we have allocations from the Department of Energy of the Philippines for the balance that we are expecting to continue to produce.

26:11 It is still the first year. So capacity utilization has not really reached up to 90% or so, where it will start picking good money. During the current quarter also, Mr. Puri mentioned it's running at 65% to 70%. Now we have... So also, when we spoke the last time on the conference call, the feedstock was cane and there were some problems that had come with cane and what happens when a plant is being running after a long time and at reasonably high capacities.

26:57 So those bottlenecks, we'll be taking care of. And now it is run on molasses, and we came across some other problems, which are unique to molasses, which also we'll be taking care of in the next few months. So in a sense that we did encounter problems with the two different feedstocks. And to a certain extent or to a large extent, we have solutions for that. But we did encounter those problems operationally. During the current quarter, we don't expect that level of loss. There will still be a loss, but it should be substantially lesser. So so Q2 will be much lower losses.

27:45 Much lower loss. And it will be largely from the the appreciation plus the interest. Yes, please. Go ahead, sir. Sir, so... And then for next second... So for second half for our financial year, then how should we look at it? Because then would you continue to probably buy molasses and make it or not, or how should we look at it? Yes. The plant will continue to run. The next sugarcane season will start sometime in November. Sometime in November, but till then, presently the plant is running on molasses. Yeah. Later on, we'll we'll have to we'll we'll have to keep on buying molasses as in when it it is available in the in Philippines.

28:37 Okay. So at 90% capacity, you probably We expect to reach that 90% kind of capacity in December. Okay. And would we still contemplate to probably look for buyers? Yes. That is the plan. Okay. Okay. And, sir, just on the order inflow side, probably what we... Based on the order booking breakup what we have, It seems that... Or maybe if you can give me the order inflow breakup, like, it the share of exports looks to be higher?

29:22 So maybe... And order book in exports have also grown. And what I probably see that sugar and machinery has grown and power has grown. So have we received large orders in sugar machinery business from the exports business from the exports in this quarter? Is the right conclusion, sir? We have received large orders, and we have I can't say much more than that, but we have received large export orders. Manishti, let me add to what sir said just now. So exports is something we are really concentrating on.

30:09 And as you know, in our projects business, we do exports largely to developing countries. So our efforts are bearing good fruit. We have orders from Latin American countries, from African countries and from Southeast Asian countries. That is where our effort continues to be. We have booked good orders this quarter. For example, we booked more than $7.50 crores of orders from these countries, from country export market, export market. The current ongoing quarter also we are expecting to book good orders. Exports, there is always so there are two factors playing out.

30:59 One is the currency at INR 95 is helping us to be a little more competitive than our than other competing countries. Of course, for all Indian competitors, it's the same situation. But compared to other countries, which also bid for these orders, it's helping a bit. But the other side is that to be export logistics, there are difficulties. I'm sure you would have heard from many other people as well. There are less number of ships available, container freight rates are up, number of sailings are less. So we are expecting that and of course, these orders that we are booking, they need to be executed over a period of two years or so.

31:46 So while the next three, four months continue to look challenging, one really doesn't know what will happen to the war when things will normalize. But we are keeping enough margins for that, enough contingencies for that. So exports is certainly helping. If you're looking at the breakup, yes, there are export orders for sugar machinery have gone up, particularly sugar refineries. Okay. And sir, my last question, and I'll come back in the queue. On a stand alone, sir, in terms of strong jump, what we probably see that revenues are up 58%, EBITDA is up 64%. But somehow the increase in interest cost and decline in other income probably has led to just 10% growth in CBT.

32:37 So so... Because we have some borrowing at our end, which probably has gone ahead for Caveat Biofuel. So just want to probably understand that how should we look at it, the decline in other income and increase in interest expense going forward? So other income, we are talking about the first quarter last year, where the other income was higher. So other income was there because of three factors largely. One was the dividend received from subsidiaries. So our dividend receipt for the year will be the same, almost the same INR22 crores, but it's just spilled into different quarters.

33:29 The second is the interest income. Interest income is largely income from subsidiary companies, but also interest on whatever surplus money that we are presently carrying. The third part is ForEx fluctuation. So, we are accounting for ForEx fluctuation on loans given to particularly The Philippines companies. Now, look, until the money is realized, this fluctuation is going to continue. Sometimes it will come as other income, sometimes it will come as other expenditure. So, up and down will happen. So, depending on the closing rate of the dollar to rupee and so on. But the better thing to note is if you were to think less in terms of other income and more in terms of operating income, this quarter's results are better in terms of operating income.

34:28 No, that is what sir. It is like that strong growth in EBITDA level is not reflected somehow in the bottom line. And this is what my observation was. Right. Anyway, sir. Last question, how much capitalization we will do this year in terms of the assets which we are creating, sir, and how much depreciation can increase? I... Pardon me. I don't have the number ready. I I I I could have got it ready, but I don't have have it. I didn't... I'm not thinking that. I'll come back to you on that later on, sir. Thank you so much for all the answers. Thank you so much. Thank you. The next question is from the line of Devam from Adecco. Please proceed.

35:13 Yeah. Hello, sir. Actually, congratulations on the standalone... I mean, execution, basically. Sir, I want to clarify a few things. To begin with... I mean, you mentioned during earlier answer that a small production would start by first week of next month on the building process phase one completion. So what... Could you quantify that? And we also mentioned that major phase would be later on. So what is the amount out of that INR $50.02 crores which will be completing and what would be the revenue potential of that and there's a major portion which gets completed. Does it all happen together or would it be a step by completion during the period from next month to March 28 or December 27?

35:59 So what will get complete? So that machine building presses, we call the presses division as machine building division because that's where we build those heavy presses. So there, it's in two phases. One is one phase has an investment of INR 70 crores, another phase has an investment of INR $2.18 crores. The INR 73 crores investment is going to get completed in first week of September. That has a potential on an annual basis to give additional revenue of INR $2.25 crores on an annual basis. But if you look at the first quarter, it will actually be work in progress, which will be increasing before the machines get built and start ready to be build out to customers.

36:51 Okay. So the first INR 73 crores of machine building division, which is happening in Bhartoli, that will get completed in first week of September. And so that comes in with an annual revenue potential of INR $2.25 crores. So you can expect roughly around INR 120 odd crore additional revenue potential from the same in the current financial year. Then no, no. The production will be there. The work in progress will increase, but not the billing. It's not the cycle time is about eight to nine to ten months of what's going to be manufactured in these shops. So you can expect a jump in Q1 of next financial year.

37:39 Fair enough. So still then it would be reflected being netted off in Q3 and Q4. So we are work in progress. Fair enough. And you mentioned that you are targeting, like, 10 to 15... 10 to 12% growth to your size. And I mean, you did also say that you are being conservative. Would it mean that... I mean, if I'm just realistic post the post quarter, the maintenance of the profit process, I mean, is the inflationary component in this, or are we being surely conservative? Because is it a realistic... We are overshooting that now. We are trying to be realistic here. We are trying to be see how things which are which we are sure that we are going to be achieving. That's what we are trying to say.

38:36 Okay. Sure. And We are being realistic with the conservative bias. That's what that would be. Let's put it that way. Okay. Okay. All right. And on the EBIT margin side, for the machinery and equipment front, is there any sort of cost pressure or RM pressure which is impacting the margins? And would those sort of change going ahead? Or what are the sort of normative EBIT margin we can expect from manufacturing of machinery and equipment? I think so there are cost pressures. You know very well that because of the work rates of certain things, rates of certain inputs, raw materials, they have all gone up.

39:23 We always do carry some amount of contingencies. So as of now, we are doing okay. Mr. Puri mentioned in his opening remarks that the for manufacturing 12% to 13% EBIT margins, EBIT margins. We continue to think that we are going to be there. This quarter is 12%. I'm reasonably certain that we are going to be between the 12%, 13% range. Correct. So that you are saying sort of for the full year, 12% to 13% on manufacturing is something what will be possible? Yes, please. And, sir, we have sort of we have sort of been stating over the last, you can say, practically, a certain period of time that we would be looking at shorter duration projects, increasing the share of shorter duration projects and private sector as well as increasing the share of exports.

40:17 So we are also... Obviously, we are seeing that that your private sector proportion is much higher. Would just like to get a color and flavor on that that when shorter duration projects will go up, how is that playing out right now? What is the percentage of long duration in the total execution? And what would that imply for EBIT margins on the project side when both strategies come in the picture, shorter duration as well as higher amount of exports? So for Mr. Puri actually mentioned in his opening remarks, we try to answer we try to anticipate questions and answer them that we are going to be within the 5% to 6% range. The longer duration, we are no longer taking. Now what we are taking maximum is something like two point five years at most thirty three months at the most thirty three, thirty six months.

41:04 We are not taking anything which lasts longer than that. We are trying to be closer to two, two point five years. Earlier, we took orders which were four years plus and eventually ended up being six years. So we are also focusing on orders where our technology, the customer values our technology and we are able to ask for a premium for the technology, not really only for our ability to execute less technical. Let me say projects where so we have 10 or 11 different technologies for our boilers. Correct. We have very we have perhaps the best technology in the world for the sugar machinery, whether it's for sugar plants or sugar refineries or sugar related power plants.

41:53 So we are trying to play on those rather than take orders where there are enough and more orders available in the market, which are largely contract execution, site execution. We are trying to not take those orders. We are trying to focus where there is more technological aspects rather than only 10%, 12% kind of civil, 10%, 12% kind of erection commission, we will take those orders. But if it's more than that, then we are shying away from those orders. And it is playing out well. I think margins are improving, working capital is coming down. And you will see it Mr. Puri mentioned our net borrowings are down even in this quarter, they are down by so much. In spite of the capital expenditure being self financed.

42:42 So we are borrowings are down INR140 crores this quarter. We also invested INR47 crores in capital expenditure from our own internal generation. So about INR 200 crores or round about that, 700 quarter, total INR 186. Right. And even the earlier INR 100 crores plus that we put in capital expenditure, that's also been through self financing. The only reason we have a borrowing is whatever we have online to the Philippines business. So what the different category of projects that we are now focusing on is shorter duration, more technology intensive, more exports.

43:29 It is improving our margins. It is certainly going to be improving our cash flow and our fund position, reducing our working capital requirement. I think all of those things are playing out. Okay. Sure. Thanks for the same, sir. Thank you. Thank you. The next question is from the line of Shivam from ICICI Securities. Please proceed. Hi. Thanks for taking my question. So I... So we have a total of 89,000,000,000. So what is the approximate timeline for execution of this order book? And it... The conversion will be, so order book growth was flat year on year. So what is the outlook for the order input for next three quarters and mainly from international order? So that's it.

44:31 So if I understood you correctly, you asked the second part of your question was to do with the expected order book, particularly international. The pipeline is good, and we continue to believe that it will remain good and remain healthy. And I did not get the first part of your question. Could you just repeat that? Yes. Of the current order book that we have, what is the approximate timeline of execution? So the order book is for the engineering companies. I'm sure you appreciate that. For sugar, we don't report any order book. There's no order book to be reported.

45:20 Orders that we take have we have mentioned it in earlier calls, have different execution time lines. In the manufactured items, it can be four, five, six months to about ten, twelve months. For the projects business, we've just been speaking about orders which are longer. So fourteen months to about two point five years is the execution time line that's normally there. Hitachi's Roshan, the orders are typically fifteen, sixteen, seventeen, eighteen months. That is their execution time line. For Eagle Press, of course, it's a small part of the business. But anyway, their order utilization time is six to nine months kind of thing. Now, we have already answered this question in terms of the revenue growth.

46:09 So revenue growth for Isgec 10% to 12%, for Isgec Hitachi Roshan 10% or so. We've already answered this question in terms of when will these orders be completed. In terms of the order booking, as Mr. Puri just mentioned, we have good visibility in terms of inquiries from customers from many, many different industries. We also have good inquiries from exports. During the current quarter, which is the July and until today, we have already booked about INR 1,200 crores orders in Isgec Heavy Engineering on a stand alone basis. So I think order book is going to be doing fine. We should be adding to the order book even though the execution rate has improved, but we should still be adding a little bit to the order book.

47:03 Okay. Thank you. That was it from my side. 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 Sandeep Beg, an individual investor. Please first Good afternoon, sir, and congratulations on good performance of the core business. So, you know, while the core business, as I said, has been... Is doing well. But, unfortunately, its performance is getting camouflaged by the ethanol business in Philippines. I just wanted to understand that business better. Mr. Puri mentioned that the business had a loss of INR 83 crores, which included 37.5 crores of depreciation.

47:57 Now if I analyze 37.5 crores, it is as up to $1.50 crores. While I understand that the total asset is in Philippines is about 900,000 crores. So are you saying that we are depreciating the entire asset in Philippines in six to seven years? That's my first question. So obviously, the method to be used is to return on value method. It is not a straight line method. So the precision is higher in the initial period, and then it keeps on reducing every quarter. Okay. But for this year, it will be about 150 odd crores? It should be closer to something like INR 120 crores, I guess. I don't have I can get you the numbers. I can get an estimate, but you'll have to give me some time to look it up.

48:46 Okay. Secondly, from the figures that you gave on depreciation and interest and the total loss, it seems that there is an EBITDA loss as well of about INR 10 to 15 odd crores from this business in this quarter, in the June quarter. Now go ahead, please. So at capacity utilization of, say, 65 odd percent, we are making an EBITDA loss. That would mean that even at 90% capacity utilization, we probably will be just hardly breaking even at the EBITDA level, and we'll still not be recovering any part of depreciation and maybe not much of interest as well. Now given this kind of a scenario, aren't we better off either just shutting this business or selling it at a loss?

49:36 Because that would be much, much better for... From overall financial perspective of the company, also from a management time perspective. And, obviously, the... From whatever little I understand, I think market... Markets to look at that look at that much more favorably. So, all those thoughts that you said, they are always in our consideration as management as to what is the best way forward. There are and we have to look at what options are available to us. So they're always there in our thoughts to run. And I mean, if you say shut down and sell, nobody buys or shut asset. So there is we have enough investment there. We are hopeful that it will be starting to make profit and covering some of the interest and some of these costs.

50:26 I now have that number of deposition that you just asked me. For the financial year twenty twenty six-twenty twenty seven, the total deposition we expect to be about INR 95 crores or so. So how come it was INR 37.5 crores in the first quarter? Because that is how the method is working, the WDV method is working. And it works as per The Philippines accounting standards and so on. 92.5% would mean that for the rest of the INR 5 crores, sir. I said INR 95 crores. INR 95 crores. So for the rest of the three quarters, it will be a little under INR 60 crores, INR 57 crores INR normal crores. So that is less than INR 20 crores on an average per quarter. That's right. Mathematically, that's right.

51:14 Mathematically, that's right. Is so that is how it works there. And they follow the international IFRS systems. Right. And the interest cost that you mentioned that is paid to the parent company is about 20 crores per quarter. What is to be paid? Yes, that's right. INR 19 crores, 20 crores. So one, you need to do about INR 40 crores of EBITDA to breakeven at the PAT level or PBT level? Right. You're right. And that 90% utilization, what kind of EBITDA do you expect to generate? I don't have the number, sir. It depends on the pricing of sugarcane molasses and the ethanol. If you take the current prices?

52:01 No, I don't have that number. Okay. Secondly, on the growth, have had enough questions on that. But let's forget about the first quarter. Let's look at the remaining three quarters. What kind of growth do you foresee for the remaining three quarters? I think we have answered this question a few times already. For the full year, we have said 10 to 12%. Sorry, if I answered that question a bit Right, three times sir. But if I look at your first quarter numbers, you So I don't think we are interested to talk about quarter to quarter in a capital goods industry. You tell me how do you predict quarter to quarter?

52:46 No, sir. I'm not looking at quarter to quarter. All I'm trying to say is that given the first quarter numbers and given what you have suggested for Q2 and Q3 and all in terms of INR $7.50 plus INR 1,000 crores for the industrial business, The 10% number is achieved if you don't do any growth for Q2 I have actually answered this question also, sir, twice or thrice. It's better to give a number which we are going to be really achieving. There are all kinds of things which happen. Somebody starts the war, somebody starts whatever. I want to give... I'm I'm required to run this business and and talk about it and achieve what I'm saying. So that's why we are we are trying to be... We are trying to give you an... If you think we're going to do better, all...

53:32 We would be really happy. We we are working for that. We are happy that you are thinking that way. We are also thinking that way, but this is the number that we are we are saying saying today. Okay. Thanks, sir. Thank you so much. Thank you. Thank you. The next question is from the line of Manish Goyan from Thinkwise Wealth Managers. Please proceed. Yeah. Thanks a lot for providing the opportunity, sir. I have couple of questions. One on the... Is that Titan? Sir, did you mention revenues of $1.50 crores or I missed it? Because Yeah. That's right. That's right.

54:19 Oh, okay. So FY '26, it has done extremely well because the revenue base earlier, I thought, was much lower. I'll tell you what FY '26 number. Give me a second. I'll tell you. For FY 2026, is it tightened at INR102 crores? Okay. But for FY 2027, we are expecting it to do do INR150 crores. Okay. So that again proves you are more conservative. Okay, sir. And sir, two questions. One on the services division, we're probably creating a new division. So just would like to get like understanding as to what is the current revenue base. I believe you were doing this earlier also, but like as you have segregated into a separate division, what is the revenue base now you have and what kind of potential we can look for it? And would it be a higher margin?

55:26 So, Goel, we have been doing operation and maintenance work before, including selling of spares and retrofits. But it's a question of if the same team is doing bigger boilers and this is a small all this more profitable with these smaller value orders, the attention goes on the big boilers. So now we are segregating it out. This is relatively smaller orders, but slightly higher margin business. And we hope that in two years' time, I can't give you the absolute figures, but to double the existing O and M base that we have.

56:13 We did so. So... Yeah. And... Okay. And on I probably had said last year's annual report that we have also been doing contract manufacturing for certain defense related and nuclear related business, and there was a quite optimistic commentary over there. So maybe if you can give us more perception as to what are our plans over here and what is the main VC on? So the contract business is growing and we are also doing it in across different industries besides defense and nuclear. We are also doing some work in hydro. We are also doing some work in steel.

57:06 We are doing it across various industries. We are trying to diversify our base and also get into new products over there. And this work is promising. It's also a hedge to the press business that we have in terms of the fact that there could be times when the automobile business is not that great. The growth is not on the lines that we are seeing today. So the same facility can also be used to do this contract manufacturing business. So whilst it's profitable on its own, but it also provides a hedge to the other to the press business because the press business is mainly dependent, not 100% dependent, but 70% dependent on the automobile sector.

58:00 Okay. And last question, sir, on Eagle Plus. Sorry to interrupt you, mister Goyal. Sorry to interrupt you, but that was the last question for today. I now hand the conference over to the management for closing the month. Over to you, sir. Thank you. Thank you, everybody. Thank you for joining us. Thank... Sorry, mister Goel. You had to be cut short. But thank you for join... Thank all the participants for joining us, and we look forward to meeting with you again next quarter. Thank you. On behalf of ICICI Securities and Isgec Heavy Engineering Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.