Shilchar Technologies (NSE:SHILCTECH) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Silchar Technologies Q2 and H1 FY 'twenty seven Earnings Conference Call hosted by Amunderspark. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please speak to the operator five to six hour since zero on the touch tone phone. I now hand the conference over to mister Ravi Swaminathan from. Thank you, and over to you, sir. A warm welcome to everybody to the q two FY twenty seven earnings call of Shilchar Technologies. To take us through the reference today, we have with us from the management, mister Ali Shah, chairman and managing director mister Ashish Shah, executive director mister Akman Shah, executive director Mr. Pradesh, financial officer Mr., GM Finance and Accounts.

1:01 We will start with a brief opening remark of the business performance of the quarter from Mr., and then open the floor for q and a. Thank you, and over to you, sir. Good morning, everyone. Thank you for joining us today. Before we open the floor for questions, I would like to walk you through the performance for the second quarter of FY 'twenty seven and share some updates on our operation and ongoing CapEx. For Q2 FY 'twenty seven, Shilchar Technologies reported revenue from operation of INR 192.61 crores, up 43 over Q1 FY 'twenty seven and up 12% over Q2 FY 'twenty six.

1:49 EBITDA excluding other income stood at INR 40.06 crore with an EBITDA margin of 20.8%. Profit after tax for the quarter stood at INR 32.93 crore with a PEC margin of 16.5%. As you can see from the top line growth, business momentum picked up notably in Q2 after a slow start to the financial year in the Q1. As we discussed on our last call, Q1 performance was a result of continuing effect of the prices in West Asia, which weighted on our exports. On the export front, conditions in The Middle East improved during the quarter, but they are yet to fully normalize. The higher shipping and logistic costs we highlighted in previous quarter have not eased much.

2:38 At the same time, exports to North America have gained momentum following the resolution of the tariff related challenges of earlier quarters. The pickup in North America export has helped offset part of the shortfall in dispatches to The Middle East. On the domestic front, demand has remained very strong throughout. On profitability, our EBITDA margin improved to 20.8% in Q2 from 16.4% in Q1. We expect conditions for export to improve further in the near future. This should transfer directly into higher export share in our revenue mix and in turn a further improvement in margin over the coming quarters. On the project front, expansion Phase three, which will add 6,500 MVA of capacity is progressing as per plan with commissioning expected in April 27.

3:36 Civil foundation work, PE direction and utility infrastructure work are in progress and all major production equipment has been ordered. This will take our total capacity to 14,000 MDA and drive the net net of growth from FY 2020 onwards. As for the current year, we remain on track with our revenue target of FY 2027 of INR $7.50 crore with the healthy orders in hand and delivery scheduled for the second half of the year. We continue to see robust order inquiries from both domestic and export clients. With that, I thank you all, and we can now open the floor for questions. Thank you very much, sir. We will now begin the question and answer session.

4:25 Anyone who wishes to ask a question, may press star and 1 on their touch tone 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. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Adesh Gosalia from Spark Capital. Please go ahead. Hello, sir. I hope I'm audible. Yes. I can hear you. Yeah. I had a couple of questions. The first, on the working capital pricing and the margin outlook that we have. So during h one, the net working capital has increased to around 200 crores, including the rise in the financial assets to around 29 crores and higher receivables. So if you can, you know, share some light on...

5:22 Some color on how how this has spread and what is... How sustainable this is and whether for the second half, we may see some... May see some improvement or whether this is going to continue. And on the raw material prices also that how they have fared. And being the q one, we had said that the new orders are as per the market prices. But how much of that has been been, like... The past two has been happening well or how... And how do we see the gross margins pairing here from here on? The margins came in at 29%. Gross margins came in at 29% for Q2. But do we see it going higher from year on? Or what's the outlook that we have?

6:11 That's the first question. So we don't face any problem or we don't see any alarming situation for working capital utilization. I mean we have said this in past that since we have surplus fund that we don't use any bank facility for working capital. Our interest out of the customer which establish SNC on us for the supplier of customers. So that is why it looks that on the paper that we are utilizing more working capital, but actually we are earning interest on that. The iron prices have stabilized again, it is not as what it used to be. And I don't think that it will completely stabilize still all the Middle East crisis and other things get concluded.

7:06 But all the orders what we are getting now is as per the market price as per the current raw material price. And going forward, like I said in my opening speech that the margins will improve with the higher sales of domestic as well as export market. Okay. Sir, you didn't what about the financial assets going up to INR29 crores and the receivables have been higher. So any outlook on that? Or what are the financial assets that have increased and as well as the receivables going up in the first half? So I think basically because of the investment what we are doing for the new project.

8:01 And like I said, once again the receivable is not actually a receivable. So just to give an example, we provide a sixty days credit through L3 to one of our customers, but we establish L3 for one hundred and eighty days with interest bond by them. So we just get the money only after one hundred eighty days, but with interest. I mean we can always enter the LCR for sixty days and that will reduce our receivables on paper. But after getting one hundred and eighty days, it shows that receivables is pending, but it's been a fixed receivable, which we are earning interest cost. Okay. Okay. And sir the second question on the revenue, the Q2 revenue has been one of the best that we have witnessed over the past many quarters.

8:55 And but is this because in Q1 you had mentioned that around $30.35 crore revenue was deferred. So has that revenue come into Q2 and because of that number is has almost reached INR 190 odd crores. Is that the reason? Part of is that and part of it new order market situation has improved. And going forward, like I said that we are on the road to achieve our original target of INR750 crores sales for the entire year, meaning that we will be able to we will be doing more than INR225 crores, INR230 crores every quarter going forward. Okay. Okay. And sir, what I I'm have so sorry to interrupt, Adi. You may please rejoin the queue for more questions.

9:45 Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participant in the conference, kindly limit your questions to two third participant. Should you have a follow-up question, please rejoin the queue. We will take the next question from the line of from Aurumech. Please go ahead. Good morning. Can you hear me, please? Yes. Good morning. I can hear you. Already, my question is basically on the EBITDA margin from last year. Though sequentially, is up from last year, it is down significantly by 10%. Now I understand that that would be cost pressures and pay pay due to higher pay. So if you can quantify how much is the higher pay affected in a percentage terms of EBITDA, that would be great? And do you see that being passed on in the future or we still have can we get back to like the 30% margin if you spend there?

10:58 I think I have earlier also mentioned that once we grow, once we have the new capacity add ons, the margin to maintain this percentage cannot be ensured. But what we are doing is we are in net terms we will be doing more profit. With 30% EBITDA if we have done INR 200 crore maybe the EBITDA margin will come down, but our EBITDA in value terms will be maybe INR $2.25 crores, $2.50 crores. So that is what we are targeting going forward. Yes. So the question regarding the impact of rate as a percentage of EBITDA, if you have any color on that. I mean, of course, we would like to maintain the same higher EBITDA, but the market situation, the world, political situation, lot of things are dependent.

12:02 If you look at our present margin that is also comparatively quite higher than the in our peer group companies. And we will be maintaining, we will be one of the higher EBITDA margin company. Okay. So my second question is basically with so much of capacity coming in, okay, across the board, all players are increasing capacity significantly. Even, you know, consumers are, like, you know, for example, Huawei has also come out with their own transformer company and all that. And so do you see competitive pressure in the future, which can affect the margins?

12:49 How such large capacity will be absorbed? Is the demand still intact? And how long of a runway you see for this demand? Yes, you are right that everybody is increasing the capacity. But at the same time, the demand and it is certain government data as our power consumption will be doubled in next three to four years. And the AI investment and the data center will require a lot of, you know, power. The renewable also is government is targeting more and more gigawatts every year. So this all will create a demand for not only transformer, but all the power equipments.

13:35 And with increase in capacity also my personal feeling is that everybody will have enough orders to cater. Okay. That's all. Just if you can answer on like do you face any challenges on the margins because of this? Sorry, can you repeat the question, please? Do you anticipate any margin pressure because of this expanded capacity? Not for at least another couple of years. I don't think because there is enough demand after two or three years, I'm not sure.

14:20 But like I said, the power consumption is very high. The power demand is going to grow. And I think that will drive the demand of all the electrical products. Great. Thank you. If I have any other questions, I'll turn back. Thank you. Thank you. Next question is from the line of Pratamesh Sawant from Abacus Investment Managers. Please go ahead. Hello? Yes. You are audible. Yeah. Thank you for the opportunity. Yeah. Hi, sir. Just two questions from my end. Sir, first, can we have any data, you know, on the total MBA sold by us across the two core transformer categories that we have?

15:14 Sorry. Can you repeat the question, please? Just wanted to understand what is our total... Based on our total existing capacity, what is the total MBA sold or, you know, the units of transformer sold across the two major categories of transformer that we have? So I mean, I can tell you that we are right now, you know, by utilizing almost 80 to 90% of our capacity, installed capacity. And total MBA in our case is very difficult because I mean we can give you that data later on, but it varies from the product mix to product mix. So if we are making more higher MBA transformer, the MBA will be on higher side. If we are making more, you know, smaller transformer, the MBA will be lower. But the total sales will remain same.

16:08 So you can... I mean, I can tell you very confidently that right now, last quarter, we have utilized almost 80% of our installed capacity. And going forward in Q3, Q4, I think it will be almost 100%. Okay. Okay. So is it the case for us like the other transformer players, the higher MBA that they sold, typically, the margin for them improves. So is that the case similar for us? Because we we tend to have the highest margins across, you know, the the transformer players. But the average product MBA, like, we are doing $132.32 kV for 50 or 100 MVA. So that is relatively a smaller MVA product, but still we are doing highest margin. And some exports may be one of the reasons. But now what are other factors that are giving us such superior margin compared to the peers?

17:06 There are a lot of factors. One is that, you know, it's not... I mean, for industry, it is not correct to compare MBA with the profitability because there are a lot of different products, lot of different sizes, lot of different class, and everything has their own working. But we have higher EBITDA margin because of few reasons. One is that we are into export business. Secondly, that we run our company very efficiently and productivity is at the highest level in our company. So all these factors are involved in having the higher margin. Okay. But, typically, with the higher KV class, you don't have to higher Pratamesh, you may please rejoin the queue for follow-up.

17:56 Okay. Okay. Thank you. Thank you. Next question is from the line of Ravi Swaminathan from. Please go ahead. Hi, sir. Thanks for taking my question. My question is with respect to The U. S. Market. Can you talk about how the demand scenario is there from The U. S? What is the kind of lead times lead time that is there for transformer delivery? How is the supply locally? How is the overall demand scenario panning out across all KVA classes? Yes. So I mean, demand from USA is quite good right now. In between our supply to USA went down mainly because of the 50% tariff in both of the on Indian product.

18:49 But that has been withdrawn in February. So after that we have started getting orders steadily and that orders have now increased. The demand over there has is also very good. Our customers are projecting more and more demand for coming year also. And we will be part of that because we have a good product, good relationship with our customers and good quality of our product. We are into, you know, very specific KV class. So I cannot share or I cannot give you information on higher KV class. But as per my knowledge, think higher KV class has a lead time of almost like one year, one point five year.

19:39 Okay, understood. And this demand is coming from so data centers, renewable or which which category from which the demand is coming from in terms Not the that specific demand, but it's a mix of everything. I mean, we cater to I mean, we cater the customer's demand of transformer. It can be data center. It can be distribution network. It can be subscription. It all depends. Okay. Got it, sir. Yes. Thanks a lot. Thank you. Next question is from the line of Heath Shah from Quantum AMC. Please go ahead. Yeah. Thanks for the opportunity. Just two questions from my side. What's the actual domestic mix for the quarter and half year and order book as on date?

20:36 So we have an order book of more than crores going forward. So like I said earlier in my opening remarks that we are on track to achieve more than INR750 crores of sales, which was projected in the beginning of the year. And export domestic will be in ratio of around 60% to 40%, 60% domestic, 40%, which is likely to include in the few company quarters. Okay. And of the 500 crore order book, what is the export domestic mix? Again, it is the same ratio about sixty forty.

21:23 Okay. Thanks, sir. Thank you. Next question is from the line of Sameer from Spark Capital PWM. Please go ahead. So most of the questions are already answered. So my question is on the order book. Sorry, on the utilization. The utilization, as I heard correctly, it's going to reach 100% in the next two quarters. So what's the yeah, so is it correct that the production will reach 100% in the next two quarters? Yes, that's right. Okay, sir. And do we have the order book executable over the next six months? Yes, yes, very much.

22:10 Like I said, we have other one hand of almost INR550 crores and we are getting new orders also. And this first half, I think we have done about INR330 crores in sales. So even if we do additional INR 500 crores, we'll reach to almost more than INR 800 crores. I mean we have started getting orders for even the Q1 of next year. Right. And sir, how is our export looking in terms of region wise? So has there any volume picked up in Europe specifically? Sorry, can you repeat the question? How's the volume in export market, is it picking up in Europe region and any other region?

22:56 We are exporting in Europe, but not much. We have started putting effort in past one year by participating in acquisition. So, but the result will come maybe in next year or next to next year. And besides that we have strong presence in Middle East and North America. And also last question. So in the last quarter transcript, last quarter con call, you mentioned that for FY 'twenty seven, you're expiring for INR 800 crore revenue. Is that still intact? Yes. It will be more than that. No, that will be helpful. Thank you. Thank you. Next question is from the line of Rakesh from iValue Group. Please go ahead.

23:46 Yes. Thank you for the opportunity. So one question I wanted to ask on the pricing power. Since we are seeing the raw material costs are going up, right? Is it something becomes positive to the customers? And how is the response and all this? Can you repeat the question? I'm not able to hear you properly. No. The question is on the just on pricing power. Since we there is a fluctuation in the raw material cost side, we saw that it has increased. Is it something when there is an increase in the raw material cost, is it something we can profit on to the customer? How is the pricing power? Yes. So I mean based on the current market price of raw material, we decide about the cost of transformer then go to the customer.

24:34 So all these new orders what we are getting is based on the present raw material price in the prevailing market. So once we pass on this to the customer, I think we can reach the earlier EBITDA margin of something close to 30 because we are talking on the this one, right, raw material cost. That is what it was affecting our margin, right? That is one of the reasons. Is it something that we can pass it on to the customer, so we can make a good margin? No. I think we had discussed this in past that in the month of March, there was a sudden increase of all the raw material cost because of the Middle East Conflict.

25:19 That was a very unusual situation and that does not happen on a regular basis. So during that period, whatever orders we had, we had to go back to our customer and ask for the price revision. But now things have stabilized and whatever present material cost is there based on that we do the costing and quote to our customers. Sir. Thank you. Yes. Thank you. Thank you. Next question is from the line of Pankaj from Ares Capital. Please go ahead. I think you may have answered this question, but my apologies, my line got disconnected in between. So my guess, all other questions were answered.

26:06 The only question I have is what is the number guidance you have for FY twenty seven in terms of operating margins? I know q two, we had 20 odd questions. So I I also understand that you have said that it it it will improve, thanks to increasing exports. But what is the number you have in mind? So like I said earlier, the first quarter two has much better margin than quarter one. And going forward with 100% capacity utilization and inflow of export orders, the margins will improve in Q3 and Q4.

26:53 But I cannot tell you any numbers. I mean, it's difficult for me to even guess. Thank you, that's all I have. Thank you. Next question is from the line of Madhuri from Saphyr Capital. Please go ahead. Hello. Am I audible? Yes. I can hear you. Yeah. Hi. Good morning. Just one question. Once we're entering the higher class transformers of two twenty kV, have we received any approvals for the save? Do we have in some order book or some soft commitments on orders once we start our new line, we can start the production? Just some clarity on that. So we don't have any approval. Once the plant is commissioned, only then we can apply for the approvals of two twenty kV class transformer.

27:46 But I have said earlier that in the same plant, we will start manufacturing the lower kV class transformer till we get the approval for higher KV class and we start getting orders. But lot of our customers to whom we supply the transformers right now, they also require two twenty KV class transformers. And we have a commitment, verbal commitment from them that once the plant is ready, they will definitely support us with the orders. Got it. And how long will it take us to get those approvals? First to eighteen months or maybe faster? It will be anywhere between three to six months. Okay. That is great. And these are from the existing clients, the approvals will be in the three to six months? Correct. Yes.

28:33 Okay. And the margins on these higher class transformers, what sort of differential do we earn from the current transformers that we are selling? I don't see any change in the margin. I think it will be probably the same as Yes, sorry, I couldn't hear you. I think, I suppose the class will remain same. It will remain same. Okay. And you mentioned that our export contribution for the second quarter was close to 40%. What contribution did U. S. Have in that? It will be anywhere. So it's very difficult to say that this number right now, but it will be anywhere between probably 40% to 60%.

29:26 40 to 60% from the export sales. And once The Middle East kind of starts contributing, maybe from FY 2028 perspective, what sort of contribution are you expecting from the export sales? And how do you see that jump kind of helping our margins and sort of a steady state margin once the plant is also operational and once we have a higher export sales, what sort of EBITDA margin do you kind of want to target? So for FY twenty seven, twenty twenty eight, we are targeting on INR 2,000 crores in sales. I'm so sorry to interrupt, sir. We are not able to hear you.

30:21 Hello? This is better, sir. Hello. Sir, you may please proceed. This is better. We can hear you. Yes. So like I said for FY 2728, our sales target will be INR 1,000 crores. And the export mix I cannot say anything right now because that depends on the situation. Okay. And the EBITDA margins that will be once everything kind of starts getting to a It's more very difficult to predict, but we would like to maintain probably same or higher EBITDA margin.

31:09 Higher EBITDA. Okay. Yes, that is it from my side. Thank you. Thank you. Next question is from the line of Adesh Gosalia from Spark Capital. Please go ahead. Yeah. Thank you for the opportunity again. Just continuing on the margins front itself. Sir, historically, we have been, like, if you see from '24 to '26, we have been a 28, 29% kind of EBITDA margin company. I understand the geopolitical situation and everything. The way it is panning out is... For you, it is difficult to predict. But if you can't con... If you can just give a qualitative idea on how we are looking at it internally that, you know, whether those kinds of margins are achievable in going ahead or right now 21 to 25% would be a reasonable...

32:02 Like, the current margin of q two would be a reasonable number or there's something higher to 20 '4, 20 '5. Just some idea on some picture on what you are internally looking at. If you can't just give a proper number, but some color would be really helpful. So I have already, you know, answered this earlier to someone that we are not looking at the percentage. We are looking at the absolute number. So last year, we had an EBITDA of more than 200 crores. The percentage maybe, for example, 30%. But coming here, you know, we were targeting more than 200 crores of EBITDA. It can be $2,252.50 crores. So percentage may be lower, but the value from it will be higher, and that's what we are targeting.

32:49 So on a INR $7.50 crore revenue target, we are looking at around INR 200 crores to INR 20 crores of EBITDA? We are going to try to achieve that. Okay. Okay. Yeah. That's really helpful. And secondly, on the export side, so have we changed any... Like, the way we have been booking orders and, you know, interacting with our customers. But since the situation has changed, so have we changed the, like, approach the the entire export market in any different manner even with our existing customers? Like, in q one, we placed the deployment of orders. So have we changed our approach in any manner, or we are continuing in the same manner, like, that the terms of the No. Yeah. We are continuing in the same manner.

33:42 Okay. Okay, sir. Thank you. That's it. All the best. Thank you. Thank you. Next question is from the line of Heath Shah from Quantum AMC. Please go ahead. Yeah. Thank you for the opportunity again. So in Q4, FY twenty six, export domestic mix was thirty seventy, and our gross margin was 31%. In this quarter, export share being higher, gross margins have dipped. So, I mean, if you could explain whether, we are still maintaining those high margins in exports or even there we have to take up a bit of dip on the margins? That's it. No. Well, I think export margins are pretty much been what we did in previous years.

34:33 Okay. Okay. Fine. Thank you. Thank you. Thank you. Next question is from the line of Ravi Saminathan from. Please go ahead. Yeah. Hi, sir. Thanks for taking my question again. This question is with respect to the domestic demand. Among the three broad categories in terms of demand from generation side, which is solar, thermal, etcetera, and then transmission side and distribution side, how would our business mix be? And in terms of solar, so past three, four years, the growth in solar capacity addition has been quite good. And last year, 45, 50 gigawatt would have been added. And similar run rate is enough to achieve the government's 300 gigawatt of target. So that from do we expect the incremental growth addition from the solar generation side? Or is there any other further drivers which are there like nuclear etcetera can drive growth in terms of demand?

35:32 No. So I think all the sectors are growing. Solar is growing. Wind is also growing in a big way. This new best battery energy storage system is having a huge requirement and it is going to be a huge going forward. The transmission and all this when you generate there you need to expand the transmission line also, you need to expand the distribution line also. So it's a multiple effect. I mean everything will be having a bigger larger demand. Got it. Yes. Thanks a lot. Thank you. Next question is from the line of Rahul Majethia, an individual investor.

36:28 So we are bringing this massive capacity online in this year and next year. But our H1 top line is quite flat year on year end. Our profitability is also dropping, of course, due to our product mix change and the export problem going on. But is this fine to like is it the risk that we are expanding capacity right now as if the CapEx cycle in all of these data centers may cool off or even in renewables? And what's the specific utilization rate that we require on this new capacity to breakeven? That's it. That's my question. I mean, see we are in business. We need to expand, right? We need to grow.

37:15 We cannot be stagnant. So if we don't grow, people will say that why you are not growing market is so good. And if we grow that people say why you need to grow and bring down their profitability. So it's like a very tricky situation. But of course, growth is good. When you grow, sometimes initially you might have to compromise on your margin. But once the brand name is established, once the customer has a confidence, the margin will improve. So and demand is there. I mean, knows that the power demand is increasing and it is going to be increased in coming ten, fifteen years. So the capacity what we are installing is hardly anything, probably we might have to further announce further expansion also.

38:13 Answering your last question, only I think 35%, 40% utilization of the capacity will be a breakeven for us. And just a small side question. What is our approximate baseline in EBITDA margin between our domestic solar or wind transformer and our exported one? Yes. Export EBITDA margin is on higher side. I cannot. There is a difference between. I'm sorry, sir. We are unable to hear you. Can you hear me?

39:02 Yes, sir. Yes. Yes. Audible. Yes. So I cannot share the exact figure of the, you know, export EBITDA margin much more than the domestic margin. And we are trying to keep a balance in executing our models. Okay. Thanks. Thanks. That will be all. Thanks. Thank you. Next question is from the line of Mohammed Dhanir from Eco Content Solutions. Transformers average about twelve to eighteen months. What are the delivery lead times today?

39:56 And are clients facing advanced bookings specifically to secure manufacturing slots? So like I said earlier, the delivery period varies is for different KV class. Our higher KV class it is like more than one year for lower KV class it can anywhere between three months to six months. And of course customers are interested in booking the slots if you have a spare capacity, because the demand is very high. Okay. Understood. And what would be the share of two twenty kV class transformers in your work again next once you receive the approval? And will you be able to utilize the entire expanded capacity by FY 2019?

40:42 Yes, that's the plan. We issued that based on the outlook, we should be able to utilize 100% they have by '29. And we are adding two twenty kV capacity by almost 6,500 MVA. So that much will be the contribution out of total 14,000 capacity what we have right now. Yes. Just a last clarification from your end. You said you will be doing INR200 crores EBITDA at the revenue of INR750 crores this year. That implies 26 EBITDA for 26% EBITDA margin for the whole year. So I expect are you expecting 30% EBITDA margin in H2 in order to achieve the INR200 crores EBITDA during the year? This figures are not assumption and we are expecting more export orders and based on that we are targeting this.

41:38 Thank you. Thank you. Thank you. Next question is from the line of Basant Bansal from NBG Investments. Please go ahead. Yes, good morning. In your product profile, how much is distribution transfer, sir? Distribution transformer we hardly make. We make in very less quantity. So major is all renewable transformers. Okay. And then you said that your next two quarters run rate would be around INR $2.25 crore. So you your execution plan are in place to achieve those number? Yes, of course.

42:25 And last thing from my side, that raw material cost used to be around 60% of your sales value. Now it has increased to around 71%, 72%, and that seems to be the main reason for bringing down the market. So I believe that if raw material increases transitory in nature, can it come down again? Frankly speaking, don't think that the raw material price will come down. But you never nobody can exact very accurately. But like I said earlier that with this higher raw material cost, our sales prices also gone up now.

43:13 So your sales price has also gone up? Of course. And has it set off the increase in raw material cost? Yes, to some extent. To some extent. So going forward, we should say a consider margin of around 23%, 24%? We will be trying for that, yes. Okay. Thank you. That's all from my side. Thank you. Ladies and gentlemen, we will take the last question from the line of Neera, Energy Mutual Investor. Please go ahead. Niraj? You said... Yeah. Yeah. Yeah. Yeah. Is my voice audible?

44:00 Yes. We can hear you. Yeah. You are targeting 1,000 crore revenues by March 28. And although the new capacity would come down by April. So don't we foresee that number is conservative and what would be the numbers for FY 2029? I don't think it's conservative, but like I said, FY '28, we are targeting about 1,000 crores and FY '29, we will be targeting anywhere between INR $12.50 crores to INR 1,500 crores. But with the new capacity coming in that leads to what revenues if you're working at 100% capacity?

44:47 Yes, with 100% capacity we can do maximum INR 1,500 crores. Okay. And with the scenario, there's a shortage of the transformers globally and more demand, can't we foresee that the next year itself we can utilize the majority of the capacity as the plant goes live? No, it's not possible because it's not that we turn on the machine and the transformers are being produced. I mean there is lot of things which are involved, first is the accrual, the payment power, the quality system, all those things. So it takes time. And with the cash flow being generated, any plan for diversification or acquiring into the related fields some businesses? Are you exploring something on those lines?

45:35 Yes, we are exploring. Okay. And which set of companies or sectors would that be? I cannot tell you that because of the NDA what we have signed. But once things progress, we will definitely take it public. Okay. Thank you very much. Thank you. Ladies and gentlemen, that concludes our question and answer session. I now hand the conference back to management for closing comments. Thank you, everybody. And like I said, we are on track to do a better quarter three and quarter four. And things will improve in terms of sales and profitability for sure. Thank you everyone for participating.

46:27 Thank you very much. On behalf of Avengers five, that concludes this conference. Thank you all for joining us today and you may now disconnect your lines.