Kaynes Technology India (NSE:KAYNES) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to Kaynes Technology India Limited Q1 FY 'twenty seven Earnings Conference Call hosted by Access Capital Limited. 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. A listen Please note that this conference is being recorded. I now hand the conference over to Mr. Nikol Kandul from Access Capital. Thank you, and over to you, sir. Thank you, Nirav. Good morning, everyone. On behalf of Access Capital, I welcome you all to the q one FY twenty seven earnings call of Kaynes Technology India Limited.

0:49 Today, we have with us management represented by mister... Missus Savita Ramesh, chairperson, mister Ramesh executive vice chairman mister, managing director and mister, full time director and chief financial officer. Now I'll handle the floor to the management for the opening remarks. Post which, we'll open the floor for q and a. Thank you, and over to you, sir. Good morning, Nikhil. Thank you, Nikhil. Good morning to everyone, and thank you for joining us. On behalf of Kaynes Technology team, I would like to welcome all of you to our Q1 FY 'twenty seven earnings call. Joining me today are Mr. Savitharamesh, chairperson of our board our managing director, doctor Muthuzumar Paranswami Mr. Jairam Sampat, full time director and CFO, mister Sumit Verma from our investor relationships, and MUFG IR, our investor relation partners.

2:02 Let me begin with a brief overview of our financial performance for Q1 FY twenty twenty seven. Our total revenue stood at INR $9.46 crores, reflecting an year on year growth of 40%, which is largely driven by EMS business. EBITDA for the quarter was INR 147.6 crores translating into an EBITDA margin of 15.631% year on year growth. We have a robust order book of around INR 9,000 crores. Before I go further into the numbers, I want to spend a few minutes on something more important than any single quarter's performance, and that is the confidence you have placed in Kaynes and our responsibility to earn it back quarter after quarter through consistent delivery.

3:02 Over the past quarters, our entire leadership team across strategy, finance, operation and investor relations has worked with one shared priority demonstrating our progress to investors, customers and partners through visible measurable delivery rather than commentary. That focus comes directly from listening close to you. Following our quarter four and full year FY 2026, several of you raised fair and direct questions on the gap between our stated aspiration and delivered performance, on the pace of our working capital normalization and on the clarity of our communications.

3:54 We took that feedback seriously and it has shaped exactly how we have operated this quarter. Our two strategic growth engines, Kaynes Semicon and Kaynes Circuit remains a key management focus. Like the rest of the industry, we saw some disruption this quarter from the escalation in the West Asia affecting equipment imports and component logistics globally. Not specific to Kaynes, this led to minor timing slippage in our OSAT and PCB ramp up schedule. We have responded with the same playbook that served us through past disruptions, diversifying logistics rules, building strategic inventory on critical components and working closely with equipment vendors and alternate schedules.

4:58 Both Kaynes Semiconductor Unit two and Kaynes Circuit Cheniere remains on the track to be operational by quarter three FY twenty seven, and we will continue to update you transparently on our progress every quarter. In a few minutes, Doctor. Muthukumar will take you deeper into the business, our core EMS performance and other businesses. He will also cover the new customer wins and recognitions this quarter, our leadership and sustainability initiatives, August Electronics Integration and Overseas Expansion, progress on OSAT and PCB, including a new international partnership and a marquee automotive opportunity and our entry into space technology.

5:56 He will close as I will do on why balance sheet strength is nonnegotiable as we scale. Moving fast in a more competitive world. Before I hand over, I want to spend a moment on something that sits above any single business line. That is speed. The world we operate in, electronic semiconductors, and EVs space technology is moving faster than it has ever, and the competitive set we are up against in India and globally is moving with it.

6:45 Being right is no longer enough on its own. We have to be right and fast. That means shortening the distance between a strategic decision and its execution on the ground. And it means building the muscle across engineering, supply chain, and program management to execute with precision even as we move at pace. This is a discipline we are actively building into how Kaynes operates, not just something we aspire to. The domains we are scaling into semiconductor packaging, PCB manufacturing, space technology aren't just important to Kaynes.

7:32 They have foundational to India's ambition in electronics and deep tech manufacturing and being part of building that capability is something we take seriously. That said, work this new comes with a learning curve and we won't pretend otherwise. What we can commit to is this, that we are learning quickly, converting those learnings into better execution the next time, and building the governance to make sure lessons learned in one part of the business don't have to be relearned in another.

8:18 That combination, moving fast, executing with precision and learning faster than the curve demands is the standard we are holding ourselves to. With that, I would like to hand over the call to Doctor. Mutupuma, our Managing Director, who will take you through our operational performance in greater details. Thank you. Over to you, Muthukumar. Thank you, Mr. Ramesh, and very good morning to everyone. Thank you all for taking the time to join us today. Mr. Ramesh explained about our revenue growth and EBITDA, how we have performed and also what are the strategic initiative.

9:08 Actually, a 40% year on year growth in the Q1 and looking at the numbers, this has been specifically come with the reduction in the growth of about smart metering business when compared to Q1. We have taken the feedbacks of various stakeholders. And looking at the current situation of our balance sheet and centering sheet, we have taken a conscious decision of growing more in electro... EMS business, which is our traditional and core business, and we have big room in the smart metering business, not because we don't have capacity, not because we don't have business and model, but we put our foot down saying that we need to make a collection first to make sure that we continue to supply. The current situation in the places where we are doing the inflation of meters, due to the natural calamity of the plant, which has also impacted this by keeping everything the... Our objective of bringing the balance sheet to a better shape, we've degrown. But our team of the leadership team, the operating team did an excellent job of growing in the EMS business.

10:15 Stand alone as an EMS business growing much, much higher than the 40% overall growth. There was a promising top line growth. We agree. But as Mr. Ramesh said, we at the Kaynes and our Board of Directors doesn't look at for a quarter to quarter, but for a long term strategy. But when the growth is good, we also see the impacts on margin due to cost escalation driven by global supply chain issues and the macro factors such as rise in the energy and the crude prices, the commodity prices and the ForEx movement, which in turn led to a rise in the commodity prices. We expect this could take a couple of quarters and profitability to normalize and return to the levels as we had already committed to.

11:03 Yes, Kaynes did good in the quarter of things, but this is due to the strategic initiative of understanding the market is going to go like this. The management team took a decision to pull forward and keep the materials ready. There is a sharp increase that's happening in the entire supply chain, which is leading to big time for supply to the extent of more than six to eight months in some categories, And the management team has already taken initiative to ensure that enough material from the pipeline is available with us to take care of the business commitment for the future quarters. While one of the questions that has been asked by you is, are we growing in the smart...

11:51 In the EMS business? I have answered yes. Even when we have big grown the smart meter business, we continue to grow on EMS business. I'll talk to you about smart meter business for a while before I go into the new customers. Turning into smart meter business specifically, growth here was flat to negative this quarter. This was compounded by an impact on inflation due to the flat situation as explained earlier. In terms of working capital, even though the number of days has moved from 190 for the quarter stand alone, and if you look at the twelve month rolling, it is about one hundred and sixty three days. I wanted to emphasize that in terms of the EMS business, the team did a good job.

12:38 If you look at the total sales of about 942 crores, the revenue that has come from the EMS business is $8.40 INR 54 crores, that is including GST. And the team did a remarkable job of collecting INR $8.47 crores, thereby ensuring that one of the highest collection for this in this quarter. However, the sales in our grid press, which is a metering business, is about INR $2.40 crores, whereas our collections is INR 88 crores, which is what made us to have take a decision to stop productions and supplies, which will have a reasonably a better cash flow. Having said that, we have taken up at all levels in the grid business.

13:29 And though late, we had got about 200 crores of money in the first week of July, which gives us the confidence that whatever the commitment that we have given to you as a leadership team, that by end of the financial year, we'll turn the cash positive. We are pretty confident on this. Though our inventory level in terms of the working capital has gone up by about 150 crores, I think that this is strategic decision that we took in the month of February, looking at the global market situation and the volatility. Just because our team has added up on the inventory there, we could able to successfully grow at 40% of plus at the overall and EMS business alone at about 48. This has this inventory increase has helped us, and this will also take us to the next level.

14:19 We also talked to you earlier about some delayed delivery for a government product. I'm happy to say that, that business also helped us to come to some normalcy and about 30 to 40% of the business has been executed in the last quarter, which you can see the increased growth in the various segments, which we'll talk about. Going forward, we'll also be providing you the rolling twelve month view of these metrics on receivables or payables or net working capital rather than the quarterly average so that you all get a picture of the long term growth. On the existing business, I also wanted to bring it to your notice that the review will come out leading electric vehicle, two wheeler customer, where on most of your rate, the concern has come down significantly to below the 100 crores. Thanks to the continued efforts of management in working like a partnership with the customer to bring back the money that what we have.

15:22 Having talked about the balance sheet, as mister Ramesh, our executive vice chairman said, we strongly believe that P and L is very important, but balance sheet is going to be clean. So going forward, we'll continue to spend and ensure that the team is work making a balance sheet much, much better than what we are doing now. Moving into the new business, let me talk about the new business and logos that we added to our portfolio, along with an update of existing logos and their impact on our business going forward. We added one of the India's second largest two wheeler electric vehicle manufacturer to our existing EV portfolio. The team did a remarkable job of completing the product development testing in a record of about eight months, and now we started serial supply to this. Along with this, we have onboarded global brands from Germany and France, one of the India's leading wireless communication companies and a handful of other new logos together.

16:22 Both our automotive team and nonautomotive team are doing an excellent job of bringing more than in a quarter of about ninety days and wherein we had a working days of 75, we had more than 72 customers who have worked in the company. We talked about the customer confidence into our company. I'm pleased to share that one of the biggest achievement this quarter was receiving an all around performance award from our major customers, which includes Mahindra and that too for the quality and overall commitment to development. We got a best award from Siemens, the top supplier recognition award, and of course, development partner excellence award, which gives them a confidence to tell how our customers believe in us.

17:08 And of course, we made some more under best delivery and development support. We also wanted to highlight Kaynes' commitment to building our next generation team. This quarter, we completed a full mapping of skills and capabilities for every individual across the organization, and we have begun a special training program to prepare a high potential talent to the next level of challenging leadership role. Kaynes is committed to sustainability, as all of you know. As a partner for go green initiative and to reduce the carbon footprint, we're actually working with the government of Karnataka on a research land, which is about 20 kilometer of facilities in Mysore to plant 10,000 trees across 20 hectares of land, contributing meaningfully towards the environment.

17:55 We also plan to increase our consumption of renewable energy at a power source for our factory. To three gigawatts of solar, installation is in progress, leading to 23% reduction in energy intensity in last two years. You all know that we acquired August Electronics in July of last year. And at this point in time, we have completed one year of a successful acquisition. As Mr. Vice Chairman said, this has given us a good inroads into the North American market, And our acquisition at this point, I'm shaping it very nicely. It's a good EBITDA margin business, and we are hopeful that growth will accelerate into our overseas business going forward and also bringing in more of value additions to India, not just from our subsidiaries, but also increasingly export oriented business as well with the key global players like Honeywell, Otis, Eaton and many others.

18:52 Let me turn to the newer business, OSAT and PCB. I'm sure that everyone is looking at this. I want to specifically congratulate our head for taking the the commitment across all the levels. The team is working extensively to make sure that our commitments are honored. The CapEx done in FY twenty six was $4.73 crores for OSAT and $3.24 crores for PCB. Our current goal is to CapEx CapEx at about 300 crores for OSAT and PCB, But as I said earlier, with the subsidies coming up, we'll be funding more. And as and when we have more customers, we have the more. Cash is not a constraint here. We want to make sure that the modular investment to make sure that we have a check and balances on our CapEx spending and revenue.

19:39 Also received happy to say that we also received the government subsidy to the tune of INR170 crores in WOSAD business till July 26. On WOSAD specifically, our partnership between Mitsui and Kaynes Telecom is a major milestone of our subsidiary. I congratulate our team for entering into such a strong partnership, and that gives Kaynes Telecom the opportunity to access a significant market opportunity in Japan. On the PCB front, we are seeing a strong traction and interest from the global player. You all know that the market when it becomes volatile and when it becomes the supply chain lead time is more, PCB is one component where it is getting into the global shortage at this point of time. The suppliers are demanding that we need to pay advance, and it takes about six to eight months even for order booking.

20:27 This is the time I think Kaynes is entering into this, and our commercial production is set to start from the next quarter, And our team is doing the last minute finishing of the capital, and we are on track as per our commitment. We're also happy to say that we have a recent engagement with one of the largest EV manufacturers globally in the automotive sector, and the team had come to our plant visited and has given a very positive feedback and the capability we are going to work with on the global standard. In fact, we are now very close to closing the deal, which once finalized would be a significant validation on the quality and scale of what we have been here. As we said earlier, we continue to evaluate the opportunities of internal consumption versus external sales, which will be taken care of by the the business mathematics.

21:18 Let me also give you an update on our space technology initiative. Our first three use satellite is currently in the prototype development phase, and we expect it to be ready to launch in mid of next year Once the required regulatory testing is complete. We are now awaiting a confirmed launch date from ISRO on the PSMB or GSL vehicle. This is a meaningful milestone for us, not just launching one development satellite, but getting into establishing Kaynes capability into the emerging satellite electronic domain and opens the door for broader participation in India's space technology system. Alongside this, the request of ISRO, our subsidiaries Cleo Precision and AeroCalid Technologies are entering into titanium gas bottle manufacturing to support their five programs, and DRDO has a similar requirement for gas bottles across several of their missile projects, which gives us a second anchor customer in this space from day one.

22:13 Before I close, our balance sheet remains priority in its own right, not just a byproduct of the growth. The discipline now across the organization will definitely bring us to the commitment what we have given. Looking ahead, the key priority is what the organization said. I just want to reiterate. NPD and value added product, the product led solution that is rather than the service led solution. And, of course, the next strategy currently for Kaynes and our operational excellence. Operational excellence, quality, and disciplined capital allocation remind the foundation we are building it on. I know last couple of quarters have tested their confidence and our commitment to keep earning it back and consistent delivery one quarter and quarter after quarter every time.

23:05 With this, I complete my initial remarks. I would like to thank you, Access team, for hosting this earning call and all of you are joining today. I'll now hand it back to the Kaseer and the session, and thank you very much. And over to you back. Thank you. We'll now begin the question and answer Anyone who wishes to ask a question, may press star and one on the telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. First question is from the line of Rainbow Baird from IFL Capital. A couple of questions from my end. First is why you did a note that the core EMS has done better than 40%.

24:12 Am I right if you mentioned somewhere in the call that the EMS grew 48% during the quarter? So can you just clarify on that first element? Yes. What was the growth of the solar or metering business that we have? See, the overall business growth is 40%. The metering is 28. So the total growth is more than 48%. Got it. And while operating performance has been pretty strong given the increase in inventories as well as working capital, our PBT margins have been much softer. So have... Do we have any bridge in terms of arriving at what is the kind of PBT from the core EMS business? Just to assign and see what the EMS business profitability below line is intact or is a significant drain out there?

24:59 And third question aligned to this is, while metering, we have smart metering, we have consciously scaled it down because of working capital issues and concerns. But it's been almost two years, and the net profitability or expectations returns from this business has been suboptimal. So any thought process does the management have to correct the strategic decision that we had taken two years back? Any views in terms of opportunities to divest this business in future? Some of the utilities are looking to buy out the meeting businesses. So what would be your thought process on this side to release both the working capital management bandwidth from the smart metering direct b to c portfolio that we have here? I'll answer you one by one. I'll take the profit before tax, profit after tax for our comparison at this point of time.

25:54 The the other income that used to come to us earlier from our PIP fund, which is where the investment has come in, it dropped about 2.5 points on our PBT or PAT. That's one of the major reasons. Other than that, if you look at our depreciation has gone up with the various investment that's coming up, whether the revenue needs to come. And look ahead in the next two quarters, I think this will start coming back when we are going to generate revenue from our telecom and circuits and, of course, some of the programs that is running currently. For the second question, what you asked specifically on the metering business. As we said, we have entered the in this journey of metering business, which has given a very good visibility on our ability to develop a product and launch it to the customer.

26:47 Today, though we are not able to make a better receivable on this, I want to reiterate amongst all the metering companies which are doing assembly. We continue to be the number one inflation done across the country than than or any other competition. But that's not our objective. We wanted to make sure that we reach always the best. You are right. We are evaluating the... We are now centering and consolidating our operational performance in meeting with this core. Of course, we understand the challenges, which is alongside of install AC meter and getting it in over a long period of revenue. The management is seriously looking at the options and opportunities available, like, whatever the methodology we we told. I don't want to commit at this point of time, but as we committed, in the February earnings call, you will hear more from us about our strategy to deal with the receivables portion of the meeting business.

27:48 Sure. And lastly, what are the delivery time lines that you're looking in terms of final commissioning of the OSAT and TCV for the current financial year? Thank you. Ma'am, our commitments, as indicated by executive vice chairman during last year, we are going to have a commercial revenue booking from this year, from third quarter and fourth quarter, and we are committed to that. And the project is on track. I want to specifically put on record to thank my team in both who are working day and night to make sure that this happened. Our customers' validation is over in both the... In the telecom project, whereas both are starting now, but we are very, very confident that we'll be doing this. You. And it's what Doctor. Muthukumar told our OSAT, all the trials and validation is getting over now.

28:40 We will start the commercial buildings. And as far as PCB is concerned, our entire capacity is being requested by one large player, a global player. So their plans are going on in our factory as on today as we speak. They have also approved and given us they have also approved and given us a vendor code for that.. Thank you, and that's. Thank you very much. I request all the participants kindly limit yourself to two questions per participant and rejoin for a follow-up. Next question is from the line of from Nomura. Please go ahead. Yes. Hi. Thanks for the opportunity.

29:28 Sir, first question is on the quarters, would you be able to share the cash flow from operations for this quarter if it is available? And second is how much will be the smart meter revenues in the current quarter which we have booked? Apart from that, sir, I mean, terms of new order wins, if you can share some more color, we did get about 1,500 crores of new orders. If you can share some color about which are the key customers there and the key order wins quantum, which we have got in the current year current quarter? We normally don't share the revenue with segment wise and vertical.

30:19 But because metering business and EMS businesses, most of you are asking specifically, we wanted to share this with you so that... To give a better clarity. Our overall revenue for this year... This quarter is about 946 crores on which our sales... This is INR $9.46 crores without GST. And our sales is about INR 90 crores... $2.10 crores in metering business and the rest of it is in the EMS business. That is a fit between the EMS. That's why we said our EMS business core growth has gone more than that.

31:05 Having said that, I will go to your the next question of who are the new logos that we have added up. I already spoke to you. We normally don't share the customers. One of the largest two meter EV manufacturers, We have been working with them for last one year, and our photos have been finished up and serial production has started now. The global player, as we told you, last quarter, we said our aerospace business is not picking up because of the global situation. But we're really happy to say that this quarter, we have come back very strongly and the customers' P type and all is going on. In fact, segment wise, even though we don't specifically, the aerospace business and all is the one which we have grown substantially up.

31:54 Every segment, be it railway, be it automotive, be it aerospace, defense, every segment after segment we have grown. For your exact point on the growth percentages, in the stand alone EMS business, which is include other than metering business, if you take it, and, of course, other than foreign entities also because our acquisition of the August Electronic was done only in July. So last year, some quarters was not there. So as a stand alone EMS business, if you see our growth is 53% from 600 and... 418 crores of last year to this year of 639 crores, stand alone EMS business. My overseas entities, if you take from INR24 crores last year to INR102 crores, this has grown at 327%, there is a new acquisition that's happened. At the metering business, last year first quarter, our sales was INR231 crores, and this year, it is 204 crores, which means the minus 12% growth. That takes us to 40% overall. Hope I have answered your question.

33:00 Yes, sir. Cancel out for this. And would it be possible to share the cash flow from operations in the... By the end of first quarter? Okay. And... Yeah. At the end of first quarter, I think we... As we said, our inventory has gone up by 177 crores, we have added it. And we have had and receivables, we were charged by INR 68 crores, taking it to about a total of about INR $2.59 crores of the negative cash flow, okay? Having said that, the first quarter is very, very challenging quarter in terms of our businesses on most of the Indian entities. I just wanted to bring it to you a comparison that Q1 of last year, our negative cash flow was to the level of INR $3.79 crores.

33:48 The team did a remarkable challenges in doing this. Except for the inventory, I think the receivables, the negative was only INR 90 crores mainly because of the metering. And in terms of EMS business, the team has did a extremely good job. Inventories is a strategic decision. So we are... We have improved on our commitments, whatever we are told, and we will ensure that going forward, our commitments of last quarter, so we were the... It's going to happen. Got it, sir. Thanks a lot. And in OSAT and PCB put together, what has been the total investment till now? And for this year, how much investment are we planning to do? As I said, at this point of time, the total capital that we have spent between these two entities...

34:36 Just give me a minute. We were... We did about... It's around thousand 250 crores. Both put together. Yes. Right. Yes. Both put together, it's thousand 200 crores, maybe about 700 crores in both that and 500 crores in our PCB. And we have in transit around INR $2.50 crores of items which are yet to come. Thank you. Send us a request to come back for a follow-up. I request all the participants kindly limit yourself to two questions per participant and rejoin for a follow-up.

35:24 Next question is from the line of Santosh Seshadri from Aventis Park. Please go ahead. Yes. Hi. Good morning. Thanks for taking up my questions. So my first question is on the smart metering business. So sir, how do you think about this business internally? Do you see this as an extension of this EMS business? Or do you think that's a completely different ballgame? And also in the past, you have spoken about the shift from service model to a product model. Can you shed some light on how this shift is tracking? Are you on track to move towards the product based model?

36:09 And also as a follow-up on that, let's say, one year down the line, would we continue to see the smart metering business included in the consolidated results? Or is there any possibility or plans to move a portion of this business or maybe full part of this business outside the balance sheet either through diversify... You know, diversification or or any any other means? I think thank you very much. Think you have given us all clues on how to do that. I'll tell you that the meeting business we acquired about two years before. And we are to that we were a supplier to that company as a PCB assembly. So this has given us gains, a very substantial confidence of getting into a product company and working on it. The metering business per se has two sets of business. One is manufacturing of meter and second is the installation of the meter and doing the services for over a period of eight years to the government.

37:07 Kaynes is always very strong in its portfolio of manufacturing. And when we are talking about the revenue of, yes, 60% of the revenue or 65% the revenue comes from the EMS business. So we still consider this helping us our EMS business to grow when we are in the metering business. Having said this, our 40 of getting into the customer, installing this meter, and providing the software solutions to them with the new area that we ventured, and we have been doing... It's only good for a company that's taken into this initiative one year before. If you look at Kaynes, that's a very distinct advantage of the company, which has got manufacturing of meter, a capability to install meter, and have a software integration facility, which makes us as one of the preferred supplier or preferred manufacturer both put together, preferred preferred service provider from the electricity board agencies because the way in which we are able to integrate and install because we have a metering manufacturing software. Everything is available to one shot.

38:14 These are the distinct advantage. Yes. But the business model is little long because there is a part of CapEx model and OpEx model, which is impacting the receivables. So our strategy to do do this is how do we consolidate revenue? We are still making the revenue of 60 to 68% on this because of our EMS business. So, like, what you said, we have plans of various business model of divesting this other portion of it that we provided separately and making sure that the receivables from that is not impacting directly into our balance sheet. But having said that, it's not a simple thing that we need to do. We are working on this model as we committed. We come back by our February month on our strategy to see how we are going to manage this business.

39:03 But we are pretty confident that we will be able to do the turnaround by end of this year in terms of receivables from the metering business. Understood. Thank you, sir. And just one more question on You can also understand the management commitment to this by... We could have grown by... We have an enough order book available in the metering business. We could have done more revenue, honestly speaking. But just to make sure that we discipline our balance sheet, we have controlled our revenue growth in this area, which is also giving us it's a very, very challenging time, but we want to be doing that and taking the discipline. And on the part of question where you mentioned that how is the shift from service model to supply model? How is that tracking?

39:53 We have done... I'll take it. We have done all the key requirements, study, everything. It is... We are working with some partnership with many people, but nothing concrete as yet happened. You will hear in the coming quarters, may not be in the next quarter, the next quarter, third quarter, we will have some clear idea on it. You, sir. Just one more question. Will come back for a follow-up, please. Thank you. Participants, please limit yourself to two questions and rejoin for a follow-up. Next question is from the line of from. Please go ahead. Good morning, sir.

40:38 Thank you for the opportunity. My first question is, if you could help us with the absolute figures of the receivables, trade payables and the inventories as of June. I'm just giving a like to like number of what it was in March 26. So if you could give us similar number. The receivable was INR $15.28 crore in fourth quarter. So if you could help us with the absolute figure and did I hear it right? You said the OCF was negative INR $2.48 crore, have I understood right, for 1Q FY 'twenty seven? Yes, you're right, first quarter. Okay. And if you could help us with the absolute figures of inventory receivables and payables, sir?

41:24 Okay. I think on terms of receivables, I'll start with this. We started this quarter with about INR $17.65 crores in total, including current and noncurrent assets, and that has gone to $19.25 crores. Okay? Though our receivables in EMS, we started with 606 crores and ended up with $6.13 crores, which means we did almost all the collections including the GST amount. In metering business alone, it went up from $11.58 to $13.11. I think that is what took us the division to reduce the top line in the business. Got it. Secondly, with respect to the revenue growth, in the previous calls, you kind of indicated that 30%, 35% kind of a growth, given what we have done, given the strategy we are playing with.

42:21 What is the revenue growth you should kind of pencil in for FY 'twenty seven? And how do you see the scale up for OSAT and PCB for FY 'twenty seven and 'twenty eight? Those are my two questions. Sir, revenue growth, we have committed the two ways of the market growth. In the first quarter, the market has grown at 17%, and we have grew at more than 43% in our... 48% in our EMS business. So we don't want to give an absolute number because if there is too much of volatility in the market, the availability of material in this quarter and next quarter is going to have a huge impact into the business. So we don't want to commit on the top line number. But whatever the market growth is there, because of the strategic initiatives of keeping the inventory, keeping the manufacturing flexible and having a very committed people, we are quite confident of achieving the price of market growth.

43:13 So this is what the commitment that we can... We are giving, and we are working towards this. As far as both at in PCB is concerned, we only told from third quarter revenue starts in both the business, and we are committed a full year revenue of totally INR500 crores between both INR450 crores to INR500 crores, which is what we are targeting at this point in time, we are on the target. You. Achal, I'll request to come back for a follow-up. Thank question is from Manav Praveen Sahai from PL Capital. Please go ahead. Thank you for opportunity. My question is related to the components. As you also touched upon and given some detail in the presentation, the prices for us components has been priced on the average of 30%, 35%, given the lead time has increased.

44:03 So can you give us some color on overall your business? How much of this cost inflation has already been captured in Q1? And in the coming year, how much we will see the impact of that? And is there any margin compression we are expected to see out of this? I'll check with the base, but I think I would allow mister Ramesh to talk about it because of his huge experience in this business. Put this into two, PCB and other components. Other components that you rightly said, the price is going up by 30, 35%. And PCB is the one which is... It is challenging today because even order booking is gone with an advanced payment. That's the level that industry is going on, and there is a huge shortage that is coming in.

44:55 Like how chips has controlled the manufacturing about three, four years before, it looks like PCB is going to have control on this. Having said that, the first quarter, if you look at foreign exchange itself purely, there's been an impact of about more... When compared to the last year, this year is about 3.3% of our... The import level what we are doing on to the EBITDA impact. But as I said, because of the strategic initiative that has been taken to build up the inventory, the impact was very minimal. And we also have a very good system of a back to back working with customers in most of the expenses that we're getting added up. However, the other cost escalation legit consumable price of availability of labor and the cost of labor, cost of electricity, the company continues to improve on our efficiencies, innovative ways of working, continuous improvements in case and thereby reducing the cost. The market is quite challenging. Looking forward, it is going to put the pressure on the bottom line in the coming quarter because there is a huge impact that is happening.

45:59 One is the availability, second is the price. With that, I would request mister Ramesh to give more insight into this. See, this component industry has gone back to COVID times. Having said that, our company has done the deep diving and we have decided to increase our inventory so that our customers' lines don't stop. In the past, we have done this and we are very confident of overcoming this. Though our pricing are all pass on, we may not get it immediately in that quarter, in the coming quarter, because it is normally adjusted quarter on quarter. So that's the update I wanted to give you.

46:47 As he said, PCB business, the PCB prices have gone up three times. When it comes to components, availability has become a big problem. Prices are also going up, but those prices are going up in the range of around 10%, 12% only. But availability has become a big problem. So ultimately, we will going to see our gross margin compression because of that, because there is a Q o Q, I understand there is a pass through mechanism, but there is a shortage of material as well. So do you expect in the coming nine months, you will see the gross margin compression because of that? So you do see Yes. It's a difficult year. This year is a difficult year, but I don't think for us, whatever we have planned, we will try and meet the requirement.

47:40 But it is not going to be an easy year. It is going to be a tough year. Thank you. For a follow-up. Next question is from the line of Indrajit Agarwal from CLS India. Please go ahead. Hi. Two questions. First, if you can give the CONSOL CapEx guidance for FY 'twenty seven and FY 'twenty eight. Sir, we have communicated, and we are standing by that. We said we will be funding for this CapEx for this year is about INR 300 crores for VSAT, 300 crores for PCB and about INR $2.50 crores for EMS business. We are on track for this. The first quarter spend is about INR 90 plus 90, INR 180 plus INR $2.30 crores all put together.

48:26 But we also said that we have fund is not a problem. And as and when we get the newer business, the modular capacity expansion will go on. So and also as and when the subsidy is coming, it will keep flowing in the system. This is just to keep a tight control on the cash flow. So we are on track of whatever we are committed during the start of the year, and we'll be working towards that. Sure. And my second question is, again, on the PCB business. While prices have increased, we have seen globally PCB margins have corrected because input costs have increased a lot more, CCL and other commodities. So you mentioned that you have contracted your entire quantity with an overseas customer.

49:12 So what are the pricing or margin contracts over there? What kind of ROCs or margins are you comfortable to generate from that? I leave it to Ramesh to answer. This is too early to talk about these things. However, I don't agree that margins in PCB companies have come down because as we catch up with the team, this last quarter that is a second quarter of their financial year, they're all done fairly well. And this PCB crisis is going on for last three, four months. But it is too early for me to give any clear direction on this.

50:03 The top lines will go up, bottom lines will get affected is what RBA and everybody is projecting. With that, I wanted to stop here. Thank you., I'll request to come back, please. Next question is from the line of from Jefferies India. Please go ahead. Sir, thank you for the opportunity. Sir, I have three questions. Firstly, you did mention about the receivable days. Similarly, can you please let us know the figures for inventory payables and the debt on the balance sheet? The second question is on the tax rate. It's quite high this quarter at about 35%, correct me if I'm wrong. So for the full year, should we expect it to normalize or stay higher than last year? And thirdly, on the OSAT and PCB, while I understand that you cannot name the customer, but just a broader idea that whenever the project commissions, you mentioned that some of the the the timelines are being followed up.

51:12 So where do you expect the offtake to go? To domestic customers or to international customers? Thank you. In terms of the inventory, again, it's about ninety six days earlier. On the first quarter end, we have gone up to about a hundred and five days. As I told you, this is strategic initiative we've taken in February to import more material and keep it in our system. And we actually anticipated little more to go, but because our revenues have been good in the regular segment, it has come down a little. For your... I wanted to hear your second question again, but I can answer on your... Can you just repeat your second question?

51:59 So so with the first question, I also did ask about the debt on the balance sheet. The second question was about the tax rate. If you look at the tax rate, the effective tax rate for the company is around 32% and odd. And our total debt is... I think,, can you just tell me about? You are there?, sir? Okay, Sumit, is there with him? Yes. Yes, sir. I am here. Yeah. Tell me,. On that. He's about to answer.

52:47 Yeah. Okay. See, effective tax rate is around 23 percentage. And at the consolidated level, it is at 33 percentage. And the the walk for this is, like, amortization, whatever we are doing for the intangibles. So that is around three percentage. And the others, whatever, like, semicon and sectors, whatever the intercompany interest, whatever we are charging off that is getting capitalized, that is around five percentage. And the other loss making entities are contributing to around four percentage. So this is majorly the the impact of the...

53:34 Contributors to the impact of the higher effective tax rate. Can you go to this? The date on the balance sheet. Back to you. Sorry? I couldn't hear you. Any other other questions that you have, Sonali? No. I think... So on the debt part, we don't have the number right now, is it? We have the number. The debt to equity ratio is good at about 0.3% at this point of time. The exact number, I'm not able to tell around 800 growth total, but I can... I think the team is picking it up. We are very well in control even for the approved loan for our long term capital in semicon and. We are not taken at this point of time. We're going through the internal funding you all know.

54:29 Thank you. So now I have request to come back for a follow-up. Next question is from the line of Aditya Bhartia from Investec India. Please go ahead. Sorry, sir. I didn't hear it properly. Was the date date number that you spoke about around 100... 800 of crores? There was some disturbance. Yes. Approximately, but I I think I'm just looking at from my finance team there. It's around that number. We can give you the exact numbers soon. We can go to the next question. Okay. Because on the cash flow from operations side, we are speaking about roughly INR $2.60 crore of negative CFO.

55:21 I guess there would have been around INR $101,150 crore of CapEx this particular quarter, including the new businesses. Is that correct? INR 160 crores is the CapEx for this quarter, INR 180 crores, sorry. INR 180 crores. So, sir, the net debt number appears to have increased much higher than what it should be. So just kind of wondering how the reconciliation can happen. Sir, we have given... I have... When I said operating cash flow is 278 crores. Sorry, sir? I said only operating cash flow, consolidated cash flow at this. My my cash profit is about a 158 crores.

56:08 My inventory gone up by $1.56 crores. My receivables have gone up by 90 crores, and others about a 144 crores. Tax at 26 crores. My fixed estimate is $3.60 crores. The investment is $3.11 crores... $3.17. And, of course, financing is $2.63. Those are the numbers for the... In the consolidated cash brokerage. What I said, $2.59 is that the net cash used in the operating activities. Understood. Understood, sir. And on on on the the issues that we are kind of highlighting around availability and cost side, does that mean that we should be anticipating lower margins at least in the next few quarters? And how does the pass through exactly happen?

56:53 Because my understanding was that at least in the PCBA business, it is more almost like an immediate pass through. And none of the other PCBA companies also spoke about this challenge. And that's why I'm kind of wondering how should we think about this mechanics. Sir, it's like what the chairman said, I wanted to rephrase the time. It's a challenging time. We need to make sure that we have the balance between setting this off and also grow and service the customer. If we are not going to service the customers and if they are going to fail, it's going to impact us also. So we are working very, very closely with the customer. We have a strategic top customer wherein we are understanding with them on an agreement like this on how we can move forward because the decision... Delayed decision making will have an impact on the business, the continuity, and also we don't want the customer line to stop.

57:48 So we have got an agreement with various customers on where all we can go, to what level we can go, the decision can be taken at our level, and also where the customers also have been talking to us frequently and ensuring that the divisions are given part. So our aspiration and our working is towards not to have any impact on the bottom line. But having said that, there'll be some timing delay between this, which will have an impact. But one thing that we can assure you is, yes, we'll be definitely faster than our peers in the industry, and we'll ensure that the minimum impact is to us. One another point one another point, it is a global problem. The entire industry is aware of it. This has been going on for last three, four months.

58:36 So I'm also surprised if nobody have addressed this. Thank you very much. I did tell request to come back. Next question is from the line of Praveen Sai from PL Capital. Please go ahead. Yes. Thank you for follow-up. One question is related to your order book. Can you give indicative numbers how has been the sector wise or the segment wise your order book right now? Sir, normally, we don't give sector wise or segment wise, but that's why we have a very good order board. And in the first quarter, our team has added more into the order board than what we have opened up or what we have delivered.

59:23 So very strong order board of more than about 8,900 in the system, and things are shaping up much faster. In spite of the global situation on the commodity availability, on the other side, with the price escalation going on, the customer offtake at this point of time is pretty good. If you see the the growth, what is happening in... Both in the domestic and also global. In spite of the inflation that is happening across the world, be it North America or in India or in Europe, if you see the the the demand has not softened at this point of time, and it's still going strong. So this gives us an... Think that things are going to settle soon, and then it is going to be in a positive trajectory at this point of time. We don't see anybody saying that we are going to cut down, including the public sector enterprises are involved with.

1:00:14 Okay. Thank you, sir. Thank you. Thank you very much. Ladies and gentlemen, in the interest of time, that will be the last question. I'll now hand the conference over to the management for closing comments. Once again, the address is thank you very much for your time and confidence to us. We tried to answer most of the questions what you have asked for to your satisfaction, but reach out to us in case you need any concern. For few of the questions, the specific questions is asked, our investor relations team members, Sumit, will reach out to you with the detail. And we really appreciate your support and continuous commitment onto the Kaynes. And your support is what making us to grow faster and at the same time sustainable growth.

1:01:10 Thanks to you. Thanks to my leadership team. Thanks to my operating team who have been staying strong during the difficult time and making our company from good to great. Over to mister Ramesh there for final closure. Thank you to one and all having interest in our company. We are continued with our commitment, and the days to come are challenging, but you will see good results. Thank you. Thank you very much. On behalf of Access Capital Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you. Thank you.