Pennar Industries (NSE:PENIND) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to Pennar Industries Limited q one FY twenty seven earnings call. As a reminder, all participant lines will be in 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. This conference call may contain forward looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. I now hand the conference over to mister Vikram Suryawanji. Thank you, and over to you, sir.

0:47 Thank you,. Good morning, and very warm welcome to everyone. Thank you for being on the call of Pennar Industries Limited. We are happy to have with us the management of Pennar Industries for question and answer session. The management is represented by mister Adi Teraw, vice chairman and managing director, mister Sikhan Bakar, chief financial officer, Mr. Manod, President, Corporate Planning and K. M. Suneet, Vice President, Investor and Media Relations. Before we start with the question and answer session, we'll have opening comments from the management. Now I hand over call to Mr. Aditya for opening comment. Over to you, sir. Thank you so much. Good morning. Thank you to all of you for joining Pennar Industries Q1 FY 'twenty seven Investor Conference Call for the quarter ended 06/30/2026.

1:37 We will cover the numbers for the quarter, take you through each of our businesses and share how we see FY 'twenty seven unfolding. I'll walk you through the quarter's headline numbers, the story behind each of our growth engines. Shri Khan, our CFO, will then take you through the detailed financials. We will, as usual, end with the Q and A from all of you. So Q1 has come in well. Revenue grew 3.58% year on year to 884.55% and DBT grew 16.04 to 46.8%. Revenue growth was moderate this quarter. A few segments moved a little slower than planned, but profitability held up because we ran the business quite tightly on cost and mix. Our key growth drivers for the next few quarters are our EMEA, India. The order book now sits at INR1008 crores, the highest we have ever carried. Revenue is going to come in through engineering clearance is coming in. We have several large data center orders also that are coming in, in the next few days.

2:32 Conversion picks up sharply in this quarter in Q2 and we expect this business to do well. PEB U. S. Also our order book is at a new peak. We have now crossed $100,000,000,000 in order backlog. Revenue is running ahead of what we had built into the plan for the quarter. And again here from Q1 to Q2 also, we expect very strong growth here in this revenue stream. Engineering services, Structural Engineering grew well 26.3%, strong quarter and our U. S. Sales team is closing more work than before. Tech Penar has been the weak spot. The order book was thin and a few execution slips cost us some customers. A new sales team is now in place and we expect that trajectory to improve from Q2. Hydraulics order backlog is at 30 crores. Court activity in The U. S. Has slowed, so Europe has done well.

3:23 Reintroduction of some tariffs uncertainty, even though it's part of the Senate and not the House, the expectation that something may come in is causing order backlog to order bookings to run a little lower than we expect. We are in wait and watch mode on the hydraulics. Every other business, I think we have a clear articulated growth plan and we're confident of revenue, profit growth. Hydraulics, we'll wait and see for the next few quarters as far as U. S. Is concerned. And The U. S. Is one of the biggest markets for us for hydraulics, so we will monitor this. Boilers, again, highest ever order backlog at over INR 150.75 crores. Two first this quarter. Our first industrial power boiler has been achieved, this is a good prequalification reference for us, allows us to dramatically improve our addressable market.

4:10 And our first order in the pharmaceutical sector, which is a new industry vertical for us. On profitability and margins, PBT margin was at 5.38%, up from 4.77% last year. Mix moving in the right direction, higher margin businesses, PB, U. S, Engineering Services are growing faster and the group margin follows. So same trend that we've been on for the last three, four years and this we expect this to continue. Our capital efficiency rose was around 20% and ROE around 12%. We're on board to move higher. We are deliberately stocking a little more raw material in anticipation of revenue growth with BEV India, BEV U. S. And all others at a strong place on order backlog perspective. We want to put ourselves in a place where we can dramatically expand revenue. So ROE at 12%, ROCE at 20% is lower than what we would traditionally want to see, but we will look to improve this further. And we are quite certain that September quarter, we will see very good improvements in this. So this is the quarter in summary. No change in our strategy, capital into our prioritized business units, expand our order backlogs and consequently expand our revenue and our profitability.

5:24 Working capital, keep it tight and make sure ROCE guides all of our decision making. I now hand this call over to our CFO, Mr. Srikanth Babkert for the detailed financials. Thank you to all of you again and look forward to your questions. Thank you, Aveda. A very warm welcome to all our shareholders and investors joining us today. Q1 FY twenty twenty seven reflects a continued evaluation of our business towards profitable and sustainable growth. While the quarter saw moderate revenue growth, our operational discipline and improvement in the product mix and the project execution translated into stronger profitability across the businesses. Our strong priorities remains unchanged. This initiative has helped us deliver double digit growth in EBITDA, profit before tax despite a challenging operating environment. Key financial highlights. Revenue from operations has increased from INR 8 and 70.4 crores to from INR 845.7 crores, a growth of 2.9%.

6:19 EBITDA has increased to 106.8 crores from INR 94.3 crores, representing a growth of 13.3, reflecting improved product operating and project mix. Profit before taxes increased by 16% to INR 46.8 crores. The most increasing aspects of the quarter is the profitability growth significantly exceeded the revenue growth, which is reflecting the strong operating leverage and the efficiency benefits that we have been working towards over the last several years. In terms of customized design building solutions, the investments made over the last year, including the integration of the Telco acquisition, has strengthened our platform and customer reach in The U. S. As a result, revenue from the business in the Custom Design building has grown from $4.11 crores to INR $50.07 crores and continues to be an important driver for our transformation journey. Profitability from this initiative is taking time to fully materialize as we continue to invest in process strengthening activities.

7:23 In India, while we have adequate capacity, execution in PEP business was impacted by operational challenges. We have strengthened the execution team, and we are focused now in improving the project delivery. In view of this, we view this as an operational rather than the structural issues. Combination of process sensing in The U. S. And overcoming the operational issues will help us drive the growth in the customized building solutions. Importantly, as I just mentioned, our order pipeline remains at an all time high. And we expect the momentum to improve over the coming quarters. We remain optimistic about the medium and the long term growth of these businesses. Our diversified engineering business experienced a softer quarter due to lower activity in steel and hydraulics and other businesses which we have exited over the years in terms of module mounting structures and Pennar Enviro, which has decreased our sales from INR450 crores to INR385 crores. However, we continue to view this business as important contributors to our diversified portfolio and remain focused on enhancing competitiveness and the operational efficiency, which continues to bring profit to the table.

8:38 Coming to the margin. One of our key highlights, as I've said, is the operating margins. While quarterly fluctuations remain quarter on quarter due to the nature, we believe the structural measures which we plan to undertake will give us a result over the period. Gross margins have been expanded from 42.56% to 43.85% at a consolidated level, while the contribution margins has increased from 27.14% to 28.51%, right, in terms of the numbers from INR231.81 crore to INR252.12 crore. One of the important aspects is on other income that includes income, interest income and bank deposits for INR2.26 crores, gain on sale of investments, INR2.16 crores, rental and export related incentive INR3.05 crores and certain write back of liabilities and provisions contributes the rest. A substantial portion of these items arises from normal business activities and treasury management activities.

9:44 Coming to the cost, employee expenses increased during the quarter from INR 92.5 crores to INR 107.32 crores, up by 63%, primarily reflecting investment in the telco capabilities across The U. S. Operations, which has increased by INR16.24 crores, up by 37%. These investments are focused on sales and business development activities, project execution capabilities and the growth initiatives in The U. S. Market. Coming to the finance cost. We continue to maintain a disciplined approach to capital allocation through although the finance cost remains slightly above our internal target during the quarter. Our long term guidance remains around 4% as a percentage of our revenue. Interest cost for the quarter stood at approximately 4.18% this quarter, slightly higher.

10:32 Term loan costs are primarily attributable to telco acquisition cost, which has already begun contributing to the revenue growth. As the scale improves, we expect that the cost to normalize as a percentage of revenue. Working capital allocation and utilization remains elevated due to the investment supporting for the revenue growth and the higher order book. As we move into Q2 FY twenty twenty seven, management's priority is to enhance the inventory turn, accelerate the collection and optimize the current assets. We believe this will strengthen our cash generation, improve our return ratio and also provide additional flexibility to our future growth initiative. Before I close, I would just like to mention, in terms of the milestones of our order book, we are all at a record high in terms of EEP India, EEP U. S.

11:21 As well as the Boiler division. This provides strong revenue visibility and reinforces our confidence in the growth outlook for the coming quarters of FY 'twenty seven. Thank you. And I would like now to hand the call back to the moderator, and we'll be happy to take your 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. Ladies and gentlemen, we'll wait for a moment while the question queue assemble. The first question comes from the line of Kanish Gupta from SS Family Office.

12:24 I would like to ask that broadly with our FY 'twenty seven debt to equity target of 0.8, what kind of ROCs can we expect for full year FY 'twenty seven? Thank you. ROCE for the year, I mean, stated target is higher at around 30%, but we will definitely be over 20% for Q2, higher than that. Over the year as an average, I think we can say 25%, if you remember, what would you say, that's a 90295% we can comment. 25% being the baseline and 25% to 30% range?

13:11 That is correct. EBIT divided by capital employed. And sir, what is our revenue from the Zetworks JV in Q1, if you can answer that? So we don't consolidate that because we are a minority shareholder in that business unit. I'm unsure if we are allowed to give network numbers in that sense or is that something we've so at. So I mean, I can tell you that it's going well. I mean, the order book, everything is in good shape. And I think it should I think it's going to be a very good value generator for Pennar. But as of right now, don't have numbers to share on that. I think I'll have to speak with them and come back to you on that.

14:02 No worries, sir. And what kind of qualitative value has been created from that JV within the company till now? Till now, I think, I mean, I think the value of our investment there would be about the valuation of that company, the equity valuation of that company. Considering the capacity being set up is two gigawatts, which has a top line revenue potential of about INR 4,000 crores and Pennar holds 45%, I believe, in that. So I mean, you would have to value what a profitable company with that kind of revenue stream would be worth. And that's a revenue stream we expect, I think, they will achieve. So it would be difficult for me to comment on exactly what the valuation of that would be, but I think I can speak to them and have narrative for you on that the next time we speak next quarter.

14:55 No worries, sir. Thank you and all the very best for the future. Thanks. Thanks so much. Thank you. The next question comes from the line of Nitin Jain from Fair Value Equity Advisors. So in your PEB business, the drop in EBIT margins is more than 200 basis points. So this is, I think, the highest among your peers. A lot of your peers were able to get price hikes from clients to mitigate the steel price hike. So were we not able to get the same, if you can elaborate, please? We were able to get the vast majority of the pass through steel price increase pass through that did happen. Some, I think there was a little bit of a bleed effect where it took some time for us to get those increases. So a lot of them are in now. So our operating margins, contribution and our order backlog both in India and The U. S. Are back up. But there was a period of time about a month or two where it didn't get passed. That's probably what you're referring to in terms of the 200 basis point drop.

16:02 I would strongly suggest you see this as a momentary flip. We are extremely confident that our operating margins move back to where they were for PEB India and for PEB U. S. From this quarter onwards. Okay. So will it be this quarter onwards or gradually over the year? Q2. Q2, Q2. Okay. And you indicated that TED is expected to grow well in India as well as The U. S, given the record high pipeline. So what revenue growth are we expecting in both PEB as well as overall company level? So I think PEB will be a big driver of revenue in this quarter, both India and in The U. S. As I mentioned, the order backlogs are very high, and it's all at a stage right now where drawing clearance is available, the working capital has been deployed, our entire labor situation is all in the past. So we are going to see the higher uptick numbers.

17:00 But I'll speak of the individual thing, think PEV overall as a component, you should expect double digit growth from last quarter to this quarter, from last year to this year, every which way you see it, we should see good growth in this quarter, Q2. Sir, if you could quantify the number, please? That would be providing guidance. So I think that we don't usually provide. But I would I think the best picture I can give you is that order backlogs are strong, it's flowing through the revenue, double digit growth. And for the overall company level? For I mean, individual component and overall company level, PV revenue would be high. Growth would be high. Okay. Thank you. Thank you.

17:48 The next question comes from the line of Viti Shah from CRK Investment. Please go ahead. Sir, I noticed that there was a revenue slowdown in the quarter. So can you explain what will be the key drivers for revenue growth in the coming year? So as the narrative which we were providing you for the last three years that continues, we are having a fair amount of revenue decline in the, what we call the legacy businesses, which comprise of our steel business unit and our rail business So both of those business units did and were not deploying capital into those businesses. While the revenue drop there also we believe to be temporary, I think year in Q2 that comes back.

18:35 But what the messaging we have for you is that our growth vectors, which is PV India, PV U. S, boilers, BIW and engineering services are all correct. The only one that we don't have clear narrative to provide for you is Hydraulics because of the tariff situation actually creating a fair amount of confusion. But that's not that doesn't derail from the regular story where our revenue growth is predicated on these four revenue streams growing. The other legacy businesses, which comprised about INR 1,300 crores of revenue annually, that has seen a little bit of a decline. So you see the smaller numbers. But if you had to remove that, then you actually had pretty good growth in our, shall we say, prioritized business units quarter. In Overall, yes, agree, 4% doesn't look like very high growth, but it's planned in that manner that the older business units decline and this goes. But be that as it may, for Q2, I think with the higher levels of growth being achieved in multiple business units, we will be in a place to the combined entity to grow at double digit rates.

19:45 And I am per share of these legacy like these low margin businesses has declined, so what kind of margins do we expect there for the company for the next two to three years? So as you see, I think over the last, not just this quarter, but the last four years, quarter on quarter with momentary blips perhaps, you have seen our operating margins improve as these as the deprioritized businesses reduce. So accordingly, you've seen in this quarter as well, though our revenues only grown by 4%, our operating margins have grown at a more healthy rate. So that was that will continue. What we have guided to is over the next three years reaching a PBT of 7%. We are right now at around five change, I think, yes, $0.38.0.35 $0.38 So we are quite confident that just executing this gets our PBT up.

20:39 Understood, sir. And can you clarify what is the current order book of the company? In what, sorry? Order book. Order book, there is a PV so we don't combine everything. PEB India is at INR108 crores. PEB U. S. Has just crossed. I mean, is not an end of quarter. As it is right now, we've crossed $100,000,000 in order backlog for Ascent, which is our U. S. Sub. Boiler order book is at INR150 crores. BIW, we don't measure an order book, but our Hyundai plant is getting commissioned this month and that should, over the next three months, double our revenue from a scheduled order backlog point of view. So everything except Hydraulics is in great Thank you, Naji. Thank you. Thank you. The next question comes from the line of Gupta from Equity Capital.

21:35 Please go ahead. Hi,. I didn't question from my end. So I think Sorry to interrupt, Shivam. Your voice is not wrong. May I request you to please use the handset? Is it better now? Yes. Please go ahead. Please go ahead. Yeah. Sure. So I'm just asking, like, can you provide a segmental pickup of the segments, like, the EBITDA margins for all these segments, if that's possible. And that will just help us segregate, you know, how, like, the EBITDA has moved a bit within what segments. I agree. I think... I I believe this is something we discussed last time. I promised some clarity on this. We've discussed this internally. Please give us a little bit more quarter.

22:20 We are setting these businesses up for high growth, high scale capital deployment. And I agree it's important to get that segmental picture. If I can request you give us until next quarter to achieve this. That is directionally where we are going. We will get there. But do give us the quarter to present because let me be honest, we have not prepared the data for disposal yet. We have it obviously, we have it internal to the company. Every revenue stream we have separate P and Ls, balance sheets, capital efficiency. But at this point, we're currently not able to share the segmental thing. But you have the management's commitment that we get ourselves there, do give us this quarter to get Sure. Sure. No problem. That's helpful. And from the other income perspective, like can we see this like so other income has been nothing from INR 8 crores, it has gone to INR 14 crores, 14.5 crores on a quarterly basis, right?

23:16 Just want to understand like, is this something which we see as a stable or is this something which is more one off? And what is the other income anticipation at least from an FY seven perspective? So as I mentioned, I think perhaps not last quarter, a couple of quarters ago. So I think it makes more sense. And from a reporting standpoint, there's certain revenue categories we have to declare in other income. These include things such as ForEx gains and all of this. Some of them and they're all not onetime events, they're consistent events. So really our operating margin, our contribution only makes sense when you look at our revenue, including both what's their net revenue and also the other income. So it's not a separate item, which is onetime or not part of our regular income. It's just accounting law makes us put that in there.

24:03 It is composed of various other components, including, I think, even gains that we have from sale of investments, export related incentives that we have got, certain foreign exchange fluctuations, certain write back of liabilities as a project cost. So all these are part of the other income as a better and this would continue. We tend to target a certain operating margin taking these into account. So removing them would perhaps not give an accurate picture because our model works because we take those into account and we are pretty good at estimating them. As they come in, you do see a little bit of up and down on it, but the combined other income plus net in the picture net sales picture is what gives you our actual sales. That's the narrative we have provided also two quarters Got it. Got it. And just one last question on the debt bit. So is there any plans of, like, what are the what is the debt to equity, like, ratio we are targeting from an FY twenty seven perspective? I think we had plans to reduce the same, right? So like what the target which we are taking on a, let's say, from a two, three year lens also, if not FY 'twenty seven?

25:12 So what the we consider healthy debt versus, shall we say, unhealthy debt. Now I think with our treatment of LCL, I think all debt has now been combined. Would consider any debt equity around 0.7 to be healthy. From an annualized point of view, by the end of the year, we are quite confident we will be able to get close to that number. If you are slightly higher than that number, it would be because of perhaps acquisitions we have made and others. But anything higher than 0.7 is something that we will not accept. So we will ensure that there's also I mean, speaking from a promoter point of view, there's about 50 crores of capital that's been brought in. But 20 crores has been brought in already, so that too will, to some extent, reduce debt equity, though that's not the major metric. But staying around 0.7 is the stated stated target.

26:06 Which is the issue? Okay. Got it. Sure. That's helpful. Thank you. Thank you. The next question comes from the line of Harshita Parekh from LS Finance. Please go ahead. Hello. Am I audible? Yes. Perhaps a little louder. All right. Can you hear me? Okay. I'll try. Does this does this work? Still not very clear, but... Please go ahead, sir. We'll try to understand. Okay. All right. So I'm a new investor to the company, and I've gone through last three, four years work upon calls. And one of the things I'm a little bit concerned about is how the goalpost keeps moving in terms of the targeted type margins.

26:58 So for example, I think in 2024, there was a stated goal of getting to 5% TAC margins by 2026. That was missed. And then I think there was a mention of quite confidently about 7% TAC margins by FY 2028 or FY 'twenty nine. Now as of today, I think I think Aditi just spoke about 7% PBT margins by two, three years. So I think the goalpost continues to keep moving, which does not inspire a lot of confidence in me. So what makes you work by as an investor should I feel very confident that you would get where you promised you would get? Okay. So let me first clarify that. You are right.

27:48 I think it would be extremely inappropriate if we gave you guidance and we switched that around and said something else. So let me try to explain how we are seeing this, and maybe that will help clarify this a little bit So for us, it's not that we have a certain margin and we stop there, any more than we will say, okay, we'll see we will reach a certain revenue or a certain profit number and we'll stop there. Our guidance on consistent and sustainable operating margin increase and profit margin increase, which we have demonstrated over the past few years. So while there may have been an exact time in which or the timeframe in which we will reach a certain percentage number, what is definitely on the record and we have shown is that we have in a capital efficient manner maintaining a ROCE about 20%.

28:34 We have managed to grow our profit margins from 2%, 2.5%, 3%, 3.5% and above that also. In fact, for the quarter, we've just closed, think our PAT margin would be point 07%. So what is creating this increase is effectively our focus on higher margin businesses and the margin the operating margins in these businesses, even if you take our U. S. Business or just the India businesses are growing. They're focusing on operating margins, which are higher than 15%. And as the additional revenue comes in and the older legacy business revenue streams, the commodity revenue streams with lower EBIT and FAT margins go away, margins tend to expand. So that's all we're doing and that's the narrative that's happening. Now if there is hysteresis or a little bit of, as you put it, goalpost moving in terms of when we achieve that, that is primarily because of what we see as a quarter on quarter impact in terms of higher commodity pricing, which tends to have a temporary effect. But longer term, that's the drive.

29:38 How do we know what our margins would be two years from now, three years from now? Because we have an articulated plan for where we want to be and what those operating margins in those business units would be. So if we execute that, what we've committed to you automatically happens and more or less it has been happening. We have doubled our margins in the last three years. So that trend will continue. So that's the narrative I want to provide. Now when do we reach 5%, do we stop at 5%, do we go to 6%, do we go to seven PBT versus PAT. I agree that we should give you as much clarity as we can. But I think we put ourselves in the best position to show you where we are headed when we show consistent profit via PAT margin improvement, which we have shown and consistent making sure capital efficiency that's also important. You can't just have high profit with capital efficiency going down. So that also is something that we need to ensure happens. So we commit to you that we are targeting 25% ROCE, ROE over 10%, I mean, we used to be at 78% ROE also has now reached 12%.

30:37 So all of those margins were and keeping with that, our PAT margins will increase, PAT PBT margins will increase. One other factor you want to take into account specific to this quarter is we had a higher tax rate because of one time, one time, some early in the last quarter which we had tax adjustment relating to earlier, which was INR1.75 crores. So PBT is the metric we should use, let's use PBT and Pat, I mean it tends to move a little bit because we have India tax code, U. S. Tax code, both of which tend to be around 25%. So there's not massive changes there. But yes, so long winded, but that's the answer I have. Got it. Thank you. So yes, I fully understand various geopolitics and other factors.

31:23 And I do believe the higher margin businesses should do really well. I'm just like so because I want to value the business, I don't fully understand how I should value it because I understand it will grow at a certain rate, but how much will it grow is the concern, right? The second question I have is, so again, like going back to some of historical talks that Aditya had, so you mentioned in the past that 7% TAC margin seems like a sustainable goal. And then at one point, I'm not sure if this was a flip of turn, but you mentioned that long term maybe or even 10% is achievable, right? So maybe over the next ten years, fifteen years, the time frame. So what would stop you from getting to those numbers apart from geopolitics and other such macro factors?

32:15 What are the key challenges that the management sees in getting to those numbers? So considering the model we follow is to have large addressable markets. Our current addressable market is from a total addressable market point of view is INR 2.25 lakh 2.3 lakh crores. Our specific obtainable market is about INR 80,000 crores. So the revenue we do every year from a gross sales point of view about INR 4,400 crores, that if you look at it from a share, it's about 6% or 7%. Provided addressable markets stay large, our revenue stays large. Provided that revenue stays where it is and operating margins in industries tend to be static over the longer term, they don't tend to move around too much unless there's a massive technological change or temporary competitive intensity tends to reduce it. If those things happen and fixed cost effectively is a function of payroll and other asset costs. As long as those stay within our model, then what falls to bottom line effectively or the limiting factor for our PBT, so to speak, in any business, frankly, not just for us, is effectively how much scale you can bring in and typically tends to half. Half of your operating margin is at EBITDA, half of EBITDA tends to be back for most manufacturing businesses.

33:31 So considering that operating margin we're all adding right now is in the 15% to 20% range, a natural border which will result will mean that you can't really get past 10% from a bad point of view. That being said, it would be better for us to look at this as that's the Mount Everest, that's what we need to reach. Mount Everest is overstating it, a of businesses, but all our competitors also benchmarking, if you see they're all at seven eight lot of them are at 78%. So the market would prevent us from reaching those numbers. So what else could have a net, I mean core execution is one thing. So our goal is to make sure that that doesn't become a reason for us not to achieve our revenue and profit growth aspirations. Got it. Maybe one last question.

34:18 So what is the I understand there is a separate CEO for The U. S. PET business. Like how else are you making sure that the middle management and the people who are skilled at the lower levels are helping the company grow? So like if Aditya decides that he wants to retire, what is your backup plan? So we I think human our human capital agenda is actually probably the most important thing for me. It isn't none of this growth, all of it is driven by me alone, It's the team and a lot of them accomplished seasoned professionals who spent decades in the industry, whether every one of our business units is headed by people with decades of experience in the field And there is no exception to this rule.

35:10 So human capital wise, we are focusing on what the company needs to look like for five years from now, what does it need to be. We have the dog structure mapped out. There's been several new additions. Think just in the last quarter in leadership roles, have brought in people from INELS, we brought in people from Hero Honda, senior management there too. Again, we're talking at the manager level, we're talking at the COO, CEO or President level. We've gotten people in from Urgapar Group Q investments, INEL, as I said, also Hydraulics Wipro Hydraulics as well. So five senior team members additions in the last quarter and we expect this to reach 20 people over course of this year, all of whom are people. And our attrition rate in senior management is maybe good or bad thing is quite low. So we don't really fire people also in that sense. So we believe that our human capital is strong. Our org structure has been defined for what we want to look like four years from now.

36:08 It's good, it's lean and filled with people with a tremendous amount of execution experience. I'm very confident that I mean, they say it not to be a cover, but there's this thing called hit by the bus test. So tomorrow, I get hit by the bus, the story continues. It's not me driven Alethia driven in any sense. It is driven by the team, and I'm proud of the team that we have and they're all ambitious and their ambition will be the limiting factor, not me. Thank you. Ladies and gentlemen, you are requested to restrict yourself to two question per participant. I repeat, you are requested to restrict yourself to two question per participant.

36:54 The next question comes from the line of Vinod Krishna from Aventis Capital Private Limited. Please go ahead. Sir, am I audible, sir? Yes. Sir, if you can help... I've been the... This company, so we have been there for the last four, five years. So if you can help us understand how to think about growth because you've been guiding bad growth of 20% and how to think about medium term revenue and bad growth because there is a legacy business of around 20, 25%, which... How how does that shape? Will it really go to zero or will it stay there and the other part will be growing? How should we think about tailwinds division wise? What are the factors driving giving us the ability to get market shares?

37:43 And then if you can help us understand this five twenty percent is the peak or we will... Because you used to use the word at least 20%. So if you can help us... Because that becomes important for us to value the company because the... How to think about growth drivers for each of your divisions and is this 20% the max growth or we will definitely... Because you used to say that at least 20% bad growth will come. So if you can help us understand, sir. So let me speak first about the legacy business units. Steel, special grade CR, tubing and rail based businesses, these are good profitable businesses. We should not allow them to go to zero, but capital isn't infinite, management manner is infinite, and we have to focus on our growth drivers and ensure we don't create many, many subscale businesses. So we have decided on the growth path, we are not going to deviate from it. That being said, we need to have some kind of odd crop structure, which allows those they should not go to zero, that would be wrong. Pennar should realize value from those revenue streams. So we have we are looking at what are the best ways to achieve that. We will it takes time to put those things together. Similar to what we did in solar, where we took all of our solar key facilities. And we have created a joint venture with Zetwork, which has the potential to do some amount of revenue, some amount of profit.

38:57 So it didn't go to zero. It's something that holds value for Pennar. And not value meaning it's some INR 1,500 crores, it should we go. I mean what would a company like that be worth, right? That is a good question to answer. So similarly, we should do something similar for this INR 1,300 crores of legacy revenue stream that's in the business. And we are working on it and we should have something for you soon. Let me put that there. No commitments in terms of time line, but we are working hard on this. So that's point one. As far as PAT margin growth sorry, PAT growth of 20% is concerned, as I said, as this new revenue streams comes in, as they pick up scale, the operating margin being higher and our net margins being from a PPG point of view right now in the 4%, 5% range, Just adding our revenue takes care of profitability.

39:46 There is no natural thing that it has to be 20% and can't be more than that. Let's take for example our PITW business, it's expected to double in revenue size in the next few months once Hyundai comes in. It's the plant that we commissioned today. There's no sales involved. The programs are all there, the three programs. We just have to keep producing and executing well and our revenue grows and scales. We've created these seeds everywhere and all of them are seeds. The U. S. Too, even though it's a $120,000,000 P and L right now, is a seat. There's a tremendous amount of potential where that can grow because our competitors there are billions of dollars. So as we grow, achieve a large addressable market and get revenue streams to comply and that is something we need to execute. Once we do that, there is no such thing as 20% is the criteria or not. I think the best way to value us is to look at our addressable market, look at our revenue growth and our potential FAT margins, which has will be range bound, it's not going to be 15%, but it's not going to be 4%, 5% also, it is going to scale. So that should suffice to give a valuation range.

40:51 And of course, from a capital efficiency point of view, you should assume that we reached the 25% benchmark as where we want to be from a ROCE point of view. Those numbers together should give you a foundation for how you want to look at our business. Sir, my second question is then, I'm assuming this is not a question. So I'm assuming that there are enough tailwinds because you always say we should not give market reasons for growth in all these divisions mostly. So our bad growth of 20% should be taken even for this year. And my second question is in the jet work. When you say 4,000 crores by when, sir, and how should we look at that? And the... And my assumption, if you can clarify on my assumption that that growth of 20% for this year also is given, like, full year. So ZAP ninety one subsidiary, which is majority owned by ZAP ZAP Pennar, the revenue for that is something that I will we will speak internally in terms of what numbers you want to share. What I had mentioned is INR 4,000 crores is typically what a 200 gigawatt solar plant, which is the capacity setup, what they tend to do, right? So that is in guidance by any stretch. When will they achieve what all of that is are things that we need to have a discussion at a later point. But as of right now, the investment for Pennar is a minority investment. It's a way for Pennar to unlock value out of its long presence in the solar field. At one point in time, solar used to be a INR600 crore revenue stream for us. And so hand that go to zero, we have decided this is the best way to do. So that's the narrative on solar. The subsidiary's

42:24 exact revenue is not something that we'd be able to comment on right now. Yes. But that that growth of 20% for this year, we can assume. Right? Yes. That is our stated goal that we that we achieve those numbers. And you're seeing tailwinds in most of our revenue lines. We have no head. We are seeing all the revenue lines firing in terms of tailwinds? Yes. Our order books are strong. We are capitalized well. Our assets capacity utilizations are ready to take on additional revenue. We are confident of I mean, forget Q1 to Q2 sequentially also, will see very decent... Or three, four year, what kind of a revenue can we look at, sir, at a complete order of three, four year? So I mean, I'm trying to answer that question without it seeking guidance or something. I mean, we can the market isn't going to prevent us from growing, clearly, based on a lot of backlog, as you can see. It's not the market. Our competitors are all large.

43:23 So we will sustain consistent revenue growth and profit growth. Over three, four years that will continue. Thank you, sir. Thank you and all the best, sir. Thank you, sir. Thank you. The next question comes from the line of Rahul Kumar from Vicaria Fund. Please go ahead. Yes. Shrikanth, you mentioned in the call that in your opening remarks that India business faced some operational challenge. Can you just elaborate a bit more on that, what exactly happened? See, in the India business, we only had certain impacts on account of PEP, which in terms of execution team and focusing on the project delivery kind of a thing. So now that we are focusing on the project delivery, there are certain issues in terms of project delivery and things.

44:20 We will be focused for the growth. So these are more of an operational reasons rather than structural issues, as I said. I think the reference would have been to engineering clearances in the PV space. More of an internal thing that you need to align. Yeah. Yeah. But, I mean, it's Okay. Okay. So I think... So are those issues resolved? Or is it is it something which is sort of continues to be both of us? As we are scaling up these issues are sometimes it creeps up at these issues are viewed as more of a operational issues and gets challenged. It is not that this gets logged in permanently and this will have impact on the things. Those are temporary blips, which had issues. There are no long term or strategic reason for us to that this will prevent our growth.

45:26 And this is the order book traction which you have seen, and I think the order book has increased pretty sharply in this quarter. So are we geared up to cater to that order book this year in terms of delivery and execution? For Shrikanth sir, for me? I mean, I think you can answer. Yes. So okay, we'll both answer, Lend. Order books are strong. Production capacity is up in both U. S. And in India. So we have the capacity to deliver on those. I mean, it would be dangerous if we took a much higher order backlog and we couldn't push that out. That would be so we consciously taken a call to ramp up our order backlog in preparation for higher revenue because the capacity utilization is there.

46:19 And the previous issues we've had for a few quarters in terms of labor supply and others, those have gotten resolved. We put a lot more automation in, we've diversified our input sources a lot. And that larger order backlog, the short cycle time it takes for it to get engineering clearances, drawings, all of that has also happened both for boilers, PV India, PV U. As well. So well set to grow and scale these businesses. Okay. Okay. Second question which I have is on the diversified engineering. So out of this INR $3.85 crore revenue item, how much is the legacy and how much is the focused business out of this?

47:05 And how is it what was it, let's say, in quarter four of this last year? We don't have a precise breakup. What I can guide you to is typically the legacy business units that I referred to, which includes our specialty grade steel business, our cold rolled, what we call our steel strips business, which was frankly the original business of the company when we started, what, twenty five years ago, was 90% of our revenue. Other than that, it includes also our railway coaches, wagons and components and our precision tubing business. So those legacy revenue streams currently contribute about 35% of our revenue. It used to be 35% a year ago, it was 35%, 33%.

47:51 It's reducing quarter on quarter reduces. Okay. But let's say out of $385,000,000 how much would that be? Exact number, I'm not... We'll come back to the exact number. I mean, I don't have the I mean, I could do 25% into our sales, but into our but I think it will be better served if we give an exact number. We'll come back to you on that, sir. Okay. But in this diversified, you need decline of 15% on a Y o Y basis. So is the entire decline being explained by the by the defocus business or, you know, the rest of the business also is a is a bit slow? The entire the decline of what was the peak performance? Because of these.

48:40 We diversified in the segment. Fine. The revenue was in segment specific. If you could take that question. Yes. So the diversified segment, predominant decrease is because of the legacy businesses and small bit of hydraulics, which is one of our growth vertical we have and that is because of the geopolitical issue. Other than that, there's no blips that we have seen. Okay. Okay. Understood. Thank you. Thank you. The next question comes from the line of Nilesh Narendra Shah from Arrow Investment. Please go ahead. Yes. Hi, Aditya and hi, Kikandhi. Good afternoon. Have two questions.

49:26 I clear? Yes, please go ahead. All right. It's always weird to hear you. I think I love the confidence with which you actually present the number, but something just doesn't add up when we look at the entire business model overall. Now the first question I have is on the employee cost, which which we can try to explain. Now quarter on quarter, I think we have gone to 107 crore rupees as of now. Is it due to wage inflation or increase in the number of employees? That would be the first question. And are we looking at 400 to 500 crores of employee expenses for the year? Because they seem to be growing faster than our profitability. I think that is a very concerning factor that I have. That is one. Second, I think we're spreading ourselves too thin, and we are getting a holding company kind of a discount. We have Moly, we have We have we have BIW. We have so many verticals.

50:12 As far as the market is concerned or as far as valuation goes, that's the reason why I'm here talking to you. I think we're getting less than a holding company discount. So what steps is the management going to take to allay concerns that there are so many fragmented pieces of businesses? The old business, legacy business are coming out, but these will become, like, few over a period of time what you're doing now. So how are you going to address the concern? Because like someone mentioned earlier, the goalpost keeps moving. And and every year, there is something new that's happening in terms of how we are growing. The business on, I think the JV is more than three to four years old. They are marquee clients, but, apparently, there is nothing that is coming in terms of the volume of the business. We have no clue on what is happening over there. That is the second part of the question. And the last one would be in terms of you bought warrants at 168 in a personal capacity.

50:59 And why would it not make sense to actually pick up the equity from the open market to actually give more confidence to shareholders? Why would there be a warrant issue given? I mean, really don't understand the reason for that in terms of if you can just throw light and color on these three things, please. Thank you. Okay. Let me try to unpack that one by one. The first question had to do with salary costs. Salary costs are higher because we have undertaken an acquisition in Telco. And as I've mentioned, as we ramp up order backlog, we do also need to ramp up engineering manpower, DMs, production staff, labor. So and that typically tends to come before these order backlog increases, because there's an increase. On the fact of this, we are happy to commit that there will be strong double digit growth in our U. S. Businesses and a lot of this increase in salary cost is because of that. So that's point one. In terms of why and does that justify the revenue growth? Yes, I think over the next few quarters, if you see our U.

51:59 S. Business revenue stream growing from a revenue standpoint and if it's growing by strong double digit rates, then that does justify a salary increase. And obviously, I agree with this profit also for our has to grow faster than our fixed cost are growing, otherwise there's no operating leverage. So that I grant and you should look at that for next few quarters. Speaking specifically about whether the goalposts are moving in terms of what is growing, you mentioned CADNUM. I think we've been I mean, I would like to state that I think we've been very clear what our growth model is. And over the last two point five, three years at least, over the last, I would say, close to ten quarters, we have been very clear that the business units we think will grow and scale our revenue are the India, U. S.

52:49 Body in white business, hydraulics business, boilers business. CADNUM is a good aerospace business, is a good small vertical. But as I said, we have many other such revenue businesses, legacy streams. It sits in our railways, the use of an Escoco railway that covers that as well. And we're finding ways in order to realize some value out of those businesses. But the growth vectors we're talking about is always these four revenue streams, so that's four. All of them situated in Pennar Industries, so there is I can't really speak to a holding company discount. I think there are several companies with a similar profile that we have. So if the PE multiple, shall we say, of the company is not at a place where we like it, that's something that as we execute, I'll issue consistent growth in profitability and capital actions that will take care of itself. I think there's in the last two years, we've seen PE multiples of 28, we've seen PE multiples of lesser than that as well. So I would advocate that we look at whether we are growing revenue and profitability and if we are consistent in our messaging about what our growth vectors are. I think the answer to both those questions is yes.

53:51 Other revenue streams, they exist in the company. We do have the choice of stopping them immediately and not talking about them so that as you said the goalposts don't move. But I think we have a responsibility not just to ourselves and the company and for Pennar to realize value, but for our employees, for our customers and others, it is there were revenue streams we stopped, like our water business, our industrial water and wastewater business. And we do not want to be that kind of corporate. And I don't think it's healthy for us in the long term, even if you had to look at consistency of revenue profitability. So these revenue streams are what's going to grow to give it to summarize this and the second part of your question. PV India, PV U. S, our body and white business, our engineering services business, our boilers business, Our hydraulics is the one thing, as I've mentioned, there's lack of clarity in wallet addressable market.

54:41 We will come back to you on that. Other than that one revenue piece, which by the way for us it's INR 100 crore per year revenue piece, it's not an extremely material part of our business. Other than that one piece, we only tell you we will be growing and scaling our other revenue streams. We have large order books in all of them. We have indicated we have brought capacity up and CapEx has been deployed to ensure capacity goes up. We're commissioning our new BIW plant, what I mentioned, which itself will double the size of that. Take a look at it in the next few quarters, if the messaging continues to change, then obviously do hold us to it. But I would strongly contest that we have been changing in narrative as far as growth vectors are concerned. The last part of the question was on the warrants. Speaking now as the promoter of the company, I think warrants, the decision to take them is not just about pricing in the market. The pricing share price in the market can be anything, but it is a measure of confidence that we as promoters and I speaking again as a promoter have in the business model that we have. We are confident we will deliver revenue and profitability growth in a capital efficient manner. Therefore, we've deployed INR50 crores is what we're committed to deploying. INR20 crores of that is already in the company.

55:52 Whether the founders pick up from the market also in parallel to that is a discussion for another and that's something as if such actions were to be taken, I think we will be reporting it to the senior and there's no real way to map that. So to answer your question, sir, I think I see where you're coming from, salary cost increases being high. There's method behind that madness, I've explained it. Revenue streams growth, I commit to you that we are not changing the narrative. We're not going to come with a new revenue vertical as if this is going to be the next vector of growth. And I don't think any vector we have spoken to has not been what we have said is going to grow the business over the last, I would say many quarters. So that would be my response. On the warrants, I've already commented that it's a measure of our commitment and we just wanted a price that is locked and that's all. Whether it's INR168 or INR150 or higher than that is not the metric. We went through a process of price discovery. We went through what corporate governance requires and that's what we are going to do. We don't want to be opportunistic about the founders or the promoters increasing their stake.

56:59 There's a way this should be done and that's the process we have followed. So thanks, but thank you for your questions. Where this is going, I mean you've seen too many things and too many good things at a time. We are industries which have got huge visibility in terms of growth profitability. Other companies are doing it. If I minus just a simple case in point, if I minus the other income component and add the net profit, it will be less than two to 2.5%. Our net profit margin, if I minus the other income is less than INR 20 crores. I don't... That's not justified. Something is not adding us somewhere. I think a little introspection would be required from the team, the management, I think, in terms of what... As an owner, as a business owner, I would look at the kind of expenses that I have in terms of my revenue growth. There something is not adding up. But I wish you all the very best, and I'm committed to being a shareholder with the company for many more years to come.

57:47 Thank you so much. Thank you very much. Next question comes from the line of Venkat Subramanian Raman from Organic Capital. Sir, can you hear me? Yes. Go ahead with your question, sir. Hello? Am I audible? Yes. Yes, you are. Yes, please go ahead. Hi, Aditya. Just a couple of questions. Do we declare our engineering services revenue specifically and how many people we have and what kind of growth part we have for that?

58:43 I don't believe we give it a segmental breakup. But from a revenue standpoint, I can tell you that it's about 70 crores per year. It's composed primarily of structural engineering and building information modeling. The primary markets are The U. S. And Europe. In fact, the only markets are U. S. And Europe. Right. Some parts of the industry believe that this is one segment that wouldn't be disrupted by the advent of AI. Do you guys have some specific thoughts and guidance on this? So we obviously, we monitor that because this is a high margin business. So what we found is that a lot of our customers, I won't name, have tried to bring in some automation AI, basically we say we call it automation. So effectively what workflows on the engineering side, the design detailing side can be automated through the use of platforms such as OpenCloud and others.

59:48 They've tried, but the nature of the business is that it requires, while you can automate certain aspects of the workflow, the entirety of it cannot be. So we believe that some improvement in terms of productivity is what it will be up to about 30%, 35% is what we have mapped out. And we already started using that. But overall, the business being a threat of disappearing because no one gives engineering work out anymore is I believe that question has been answered. So I don't believe that that's under threat. Right. Right. That's what I hear from our industry players as well. But is it playing out on the ground? Do we have new inquiries coming? Do we have is our margin getting affected on the new bids?

1:00:36 How is it playing out in reality? So we as I mentioned, one of our customers, they're a multibillion dollar firm in The U. S. That spent a lot and tried to automate some work. It didn't go in the direction. So I think right now, as it stands, we're running three shifts. We work Saturdays, Sundays for our engineering work. And I think in the last quarter, it grew by about 26, that revenue stream. So we have high hopes for this as well. We've also done some hiring in this both in The U. S. And in India, where we've brought in senior professionals in the building information modeling space. So as I'd mentioned, out of the five growth vectors we have, this is one of them. We're quite confident that this continues to grow in scale. I'm not seeing a threat of not of any of those who are getting automated or any of the manners or a manners pricing reducing.

1:01:28 These are quite robust revenue streams in my view. Okay. There was some discussion about CADNUM. I think one of the previous investors actually was referring to that. And after a long while, we saw some mention of CADNUM in your press release in terms of new orders, etcetera. What is your view and what can we expect there? So CADNM is our aerospace business, it sits in our railways business. Railways is railways plus what we call Aerospace Machining and Assembly and Treatment and Tooling. So that's the CADNM business. It's stable right now. It's not growing. We're not deploying any capital into it anymore. So it's effectively where it is. It's profitable. And like the rest of the railways business, like the rest of our legacy revenue streams, we're trying to find a way not to realize some value there.

1:02:26 My second question is on the PED business in India. What is it that we need to do to get the kind of profitability metrics and return on capital employed metrics that some of our competitors have. You spoke about this a couple of quarters back. There's a lot of difference on the capital employed side between us and that competitor that we talk about. You said some work needs to be done a few quarters ago. Has there been some progress there? A lot of work has been done. We looked at the entirety of the process of the pre renewal building and we looked at what was different from our competitors.

1:03:12 Key differences were a much higher advanced percentage, which tends to reduce working capital at our competitors. We have since instituted that and our advanced percentage is now grown to 25%. There's still some headway for that to grow, but that at least is a massive improvement from where we were, which was closer to 5% to 10%. So that's one change. The second thing we did was engineering optimizations, so we can actually get post order booking, perhaps a percentage or two in savings as well. It doesn't sound like much, but obviously, all of that flowing through the bottom line means that, that is something that can be a powerful driver of capital efficiency, especially the net margins are single digit percentages. So that's the second aspect of it. The nature of contracts we tried to sign also has changed where we've now removed supply linkages to erection.

1:03:58 They will be when we ship, we tend to there was an element in previous contracts where that money comes in only after certain milestones in the erection side have been met. For And whatever reason, if the delays in election side, then that led to our accounts receivable being higher because we technically, that money was not due until we finished those milestones. We have not removed that in keeping with what our competitors are also doing. So it's a combination of not two, three, it's many, many things. We are doing we are now in a place where because of those, you will slowly see our capital efficiency, especially our working capital will improve and will reduce and our operating margins will improve to a certain degree, which will bring us more in line with what our competitors are at.

1:04:46 So in terms of value added center and deliverables, understand. Understand. Thank you. Thank you. I'm sorry. Please. Hi. From the line of Deepak Kotar from Saphyr Capital. Please go ahead. Am I audible, sir? Hello? Yes, please go ahead. Yeah. So just wanted to understand, I mean, in terms of our strategy or in terms of focus, I mean, are we looking... I mean, there's a lot of opportunity in aerospace and defense. I mean, you just touched upon aerospace space. So in precision engineering, are we focusing, I mean, in these areas, I mean, as a strategy or so can you throw some light No sir, I mean I'm not denying that there are good opportunities for growth here, but I think we are focused on what we have chosen.

1:05:43 Even if we execute on across our five growth vectors, even if three or four of them hit, then we achieve our stated long term growth objectives and our profit objectives. So while there are opportunities in the aerospace, good opportunities, it's not something we have been looking to pursue. But we will figure out a way where these legacy revenue streams similar to what we have done with our solar business. If we can find a home for it so that it can become somebody else's baby, we will explore that. But as of right now, we are looking to see what is the best way for us to achieve that. But growing it with our capital, our management manners would not be the thing. So right now, there is steady state mode, not capital no capital going no CapEx going into those in any material sense.

1:06:33 But they are strong, stable and profitable all of them, even aerospace business is profitable and they're good businesses, but it's not our job to scale them anymore. Okay. Got it. Got it. And in terms of growth, I mean, from now the first quarter, you mentioned there were some slowness in few of the sectors, right? Even the PEB U. S. And the India as well, you saw some slowness. I mean, but now as you alluded that second quarter onwards you will see growth in both given the strong order book that we have in both the India and U. S. So sequential growth is what one can envisage, I mean as we go ahead in coming quarters, as we go ahead into FY27? I think you can look at mean, if you're just saying sequentially, I think is what you mentioned. Q1 to Q2, you should expect growth. Yes, you should expect double digit growth in revenue and profitability.

1:07:26 Okay. And then how about 3Q and 4Q? I mean, as I said, I mean, our model is that it's not that our order backlog goes away, right? I mean, if you just map out what we have in TV and TV U. S, this INR108 crores, dollars 100,000,000, all of that is something that has to be done in the near term in the next few quarters, right. So it will sustain for the medium term, it will sustain high growth rates, our order backlogs. We just have to execute on all of that. Okay, okay. And I mean, if you have to look at some of the peers, I mean, who are in the PEB space, I think most of them we have seen a growth of around 20%, 25%, right? So why what I mean though you did mention that you have a legacy business, right, but what stops us that from growing those levels, I mean can you give your comment on that?

1:08:23 We're not at 25%, but if you if the legacy business reduction, if that is accounted for, then we are I mean around those levels. It's not 25 but I think I believe it's 16% or 17 but we don't have that number right now. But yes, in that we are not in the same revenue growth metric or range that they are in. But we are confident of our model. I mean, just EV U. S. Will beat that 25% also. So it's execution, we just need to execute. We've had some issues because of the unique way we structured some of our businesses, specifically PV India over the last few quarters. We're looking learning, sometimes those transitions take a few quarters, but we are committed to growing.

1:09:08 I mean, and a strong order backlog demonstrates that we can go into the market and get our orders. So we'll ensure that we improve our output both in India and The U. S. And grow and scale revenue. Got it. But our PEB India and PEB U. S. Segment has grown 16%, 17%, I mean together? Is close to 20%. Has grown the custom design building solutions. If you see the details that we have given it to close to 16%. Close to 16%. 16%. That's very helpful, Thank Yes. You It's more or less the same. I don't see us as being laggards to the market, at least from a revenue growth standpoint in these metrics.

1:09:56 But more will come. It will improve, but it will in this quarter, next quarter with the order backlog wasn't 18,000,000 in Q1, it is now, right? It wasn't $100,000,000 in Q1, it was only about $70,000,000 So larger order backlog, more execution capacity is equals revenue. That's revenue growth. That's the equation here we want to ensure we realize. Understood. That's very helpful, sir. That would be from my side. Wish you all the best. Thank you. Thank you. Thank you. Ladies and gentlemen, we'll take that as the last question, and I would now like to hand the conference over to the management for closing comments. Thank you, and over to you. Thank you to all of you for your questions.

1:10:43 We will continue to execute on our plan. The interim, I think a lot. So there are some questions which we weren't able to get to. My apologies for that. We will keep an open line of communication so that I and the rest of the team can address some of these. My takeaways from this are to ensure that we execute on our growth plans, convert that large order backlog into revenue. And with your support, I'm hopeful that we will achieve our goals for the financial year and we are we will look to execute on our plans. Thank you so much. Thank you. On behalf of Philip Capital India Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.