Tara Chand Infralogistic Solutions (NSE:TARACHAND) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Q1 FY 'twenty seven Earnings Conference Call for Tara Chand InfraLogistic Solutions Limited. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Mr. Ankit Jain from Stellar Investor Relations. Thank you, and over to you, sir. Thank you, Palak. Good afternoon, everyone, and thank you for joining us today. To discuss q one FY twenty seven business performance, we have with us the senior management team represented by mister Himanshu Agarwal, the director and chief financial officer.

0:57 Before we proceed with this call, I would like to mention that some of the statements made in today's call may be forward looking in nature and may involve risks and uncertainties. The company also undertakes no obligation to update any forward looking statements to reflect developments that occur after the statement is made. Documents related to the company's financial performance, including the investor presentation, has been uploaded on the stock exchange and the company's website. I now invite Mr. Himanshu Agarwal to share his initial remarks on the company's performance, and then we will open the floor for Q and A. Thank you, and over to you, sir. Thank you, Ankit. Good afternoon, everyone, and thank you for joining us for the Q1 FY 'twenty seven earnings call. I'm Himanshu Agarwal, Interim Director and CFO of Tara Chand InfraLogistic Solutions Limited.

1:50 I hope you have had the chance to review the results and the presentation uploaded yesterday. Let me be straightforward at the outset. Q1 was a transitional quarter, and the reported profit reflects that. Most of the pressure came from a sharp fall in our specialized services margin in this quarter as well as warehousing and transportation margins, which I will explain rather than from anything broad based in the business. Let me walk you through what happened, what is temporary, and where I expect us to be by the end of the year. So revenue from operations grew 11% year on year to 67.6 crores or about 14% if we adjust for the 1.86 crores write off relating to earlier years, which I'll come to later. EBITDA was 21 at a margin of 30.7%, below both last year's first quarter and our medium term band of 37% to 38%.

2:41 Profit after tax was at 1.7 crores or about 3.3 crores if we exclude roughly 2.2 crores of prior period items. The number I would ask you to hold on to is our cash profit, which was 117.6 crores for the quarter, down only 6%, well ahead of reported profit. That gap, as you know, is depreciation of INR 16 crores on the fleet that we have built over the last two years. The machines are earning cash. The accounting profit is carrying the cost of the build. Three things that I would like to draw your attention to. First and most important, the margin in our specialized services business almost half this quarter coming in at about 10% against roughly 18% normally. The main reason was a client led change in the scope of a project that we had carried in from the previous quarter, which left our equipment and manpower idle, which were mobilized at the client side, and it also gave us additional demobilization cost with no revenue against it. That fed into the equipment segment more broadly with our stand alone rental margin at 54% against our usual 58 to 62% and utilization dropping to about 79%.

3:52 We are in active discussion with the client for an appropriate settlement of the losses. This change caused us, and I expect that to conclude in the subsequent quarter. I won't put a number on it today. I'll update you as soon as as soon as we have it and settled. I want to be clear about what this is and this is not. It is a specific one of the the disruption on one project. It is not a change in the demand for our equipment or in the economics of our fleet. In fact, our end market mix moved from other segments into more into renewable energy and power sectors with renewable energy now accounting for 31% of our rental revenue and power at 26%, together giving 57% against 24% of last year.

4:39 We have pointed our fleet at where India is building today. Second, our warehousing and transportation segment had a below par quarter, revenue of just INR 18.7 crores against INR 29.5 crores last year and 1,630,000 tonnes of steel handled in this quarter. EBITDA dropped to 1% from 16% for the same period last year, and last year's quarter still carried our R and L, Vishakha Vatnam contract, which concluded in about in Q3 FY 'twenty six, while our new Dankuni stockyard is still scaling up. The steel movement was also subdued amid higher fuel costs in Q1 due to geopolitical reasons as well as there was a decline in steel prices, which again led to lesser movement of steel by the OEMs that we work with. I expect this segment to recover through the year.

5:29 Third, we cleared about 2.2 crores of prior item... Prior year items, a 1.86 crore revenue write off, and a 30 lakh exceptional charge for a non recoverable earnest money deposit on old warehousing and transportation works, one time and now behind us. Through all of this, the balance sheet strengthened. We deployed 42.8 of CapEx in the quarter, taking gross block to 601 crores and still brought our net debt to equity down to point eight seven times from point nine two, which is inside our one time ceiling. One area that we are not satisfied with is the receivable days that still stands at about ninety seven days against our target of eighty. The bulk remains the r I n l closure recovery, which is taking longer than I expected, and I now see the collections coming into the H2 of this financial year, and we remain committed to bringing the number below 80 by the year end.

6:25 On the outlook, let me be measured. I expect the first half of FY 'twenty seven to run below our 37% to 38% EBITDA margin band for the reasons I have described above, with margins recovering through the second half as the affected equipment redeploys, the disputed project settles, and the new CapEx starts generating revenue. Certain of our specialized services revenues are expected to stabilize towards the end of the second quarter, which should support the quarters that follow. I continue to hold the 37% to 38% as our medium term target. On revenue, our 20% to 25% growth framework and our order book remain intact. Our executable FY 'twenty seven order book as of July stands at INR204.82 crores, of which 74% is from equipment rentals and specialized services, and 26% is from warehousing and transportation.

7:16 Our CapEx plan for the year is unchanged at about 80 to 100 crores, which we expect to complete mostly by November this year. Finally, let me leave you with these three thoughts. One, this was a transitional quarter and the most of the profit pressure came from two identifiable events, specialized services and warehousing dip. Two, our fleet is now working where the growth is in power and renewables. Three, we have kept our financial discipline with leverage down inside our ceiling through a heavy investment quarter. And we look forward to meeting the targets and the... Looking forward to ramping up the revenues and maintaining the margins as I've explained about. So with that, I will take your questions now. Thank you.

8:03 Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question, may please press star and 1 on the 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'll wait for a moment while the question queue assembles. The first question is from the line of from family office. Please proceed with your question. Hi. Am I audible?

8:50 Yes, sir. Okay. Perfect. So I have couple of questions. I I understand that h one is, you know, seasonally softer with, you know, q two also generally impacted with monsoon, and h two is, you know, more stronger. But looking at the full year guidance of about 20 to 25% growth, that essentially implies your FY twenty seven revenue at around 350 odd crores. So after about 68 odd crores in q one, you still need about 280 odd crores over the next nine months. So that's implying an, you know, average quarterly run rate of about nineteen eighty five per rows. Now given that q two is also seasonally softer because of monsoons and other factors, generally, that, you know, quarterly run rate will get pushed in q three and q four. So that will have to be a lot more meaningfully higher compared to 90 to, you know, 95 crore earlier.

9:55 And currently, your executable order book is at about $202,105 crores. That also means you'll need another 70 to 80 crores of incremental orders. Assuming that you convert all the existing orders completely and there is no spillover to next quarter. So with this backdrop, could you explain the quarterly revenue phasing that you are expecting and particularly the kind of step up that is required in q three and q four? And what incremental order inflow and utilization improvements or execution ramp up is going to support this?

10:43 Sure. So thank you for the question, mister Rohin. To answer that, as you've pointed out, we've got an executable order book of 205 crores as of July. And if you would see as of q one, we had an executable order book of 212 crores when we had our last earnings call. So despite there being about 68 odd crores of revenue in q one, we... Our order book still stands at 205. So there is sufficient room for us to ramp up the revenue over the next three quarters. Q two, no doubt, is seasonally seasonally the software quarter as well because of monsoons. But giving a quarter wise breakup is a little difficult because of all of these factors go into project specifics and deployment of equipment.

11:35 But the way we see it, Q2 currently is looking better than Q1 as far as the deployment of equipment is concerned, and similarly follows into then q three and q four. As far as far as occupancy you're talking about, so we have generally seen that eventually our annual occupancy is at about 84, 85%, and that is where we anticipate here also with the kind of order book that is lined up because 74% of this current order book is from the equipment rentals division. Plus, as I've stated in the opening remarks as well, the CapEx that we've done in Q1 hasn't yet been deployed as far as Q1 revenue is concerned. So that revenue is already going to be coming in from Q2 onwards as the machines have been deployed from July.

12:28 Similarly, we have apart from the order book that is in hand, we've got a pipeline as well, which we understand is in the advanced stages of discussion with the clients, and we anticipate new orders from there in the coming quarters, which will help us to meet our expected revenue targets for the entire year. And naturally, if you would see over the last few years, the Q3 and Q4 specifically tend to be substantially higher than the Q1 and Q2 revenues. So that again would lead to that again is expected to push us towards the targeted revenue for the year. Okay. Just to follow-up on that. So could you quantify firstly what the pipeline is as of 'eight? And on the margins in your initial opening remarks, should we interpret the 37, 38% EBITDA margin band as like an FY 'twenty seven target?

13:28 Because Q1 was at about 30% and given Q2 is seasonally softer. So what sort of level of margin recovery are you expecting in h two to sort of bridge that gap? Yes. So to answer that, we are looking at... Because with the higher equipment rental component in the order book that we have, so the ramp up will... Should happen over the h two, both the quarters of h two. And also with the... Because a lot of the revenue that has... The margin that has dropped is because of two specific issues. One being the specialized service, single project, let... It into the margins, and then also warehousing and transportation being down by 1,500 basis points on the margin side. So so that... Both those factors are expected in the way that we see things ramping up. Those those margins will normalize to their previous...

14:33 In the previous period ranges, and that is what will help us to ramp up the EBITDA margin and bring it to the, as you rightly pointed out, to the FY twenty seven targeted margin band of 37 to 38%. And with regards to the pipeline, so the pipeline is close to about 150 odd crores, which primarily is, again, a combination of equipment rentals and a good amount of specialized services contracts. But that pipeline out out of which... Out of that pipeline, how much how much of it will actually be executed in FY twenty seven will naturally depend on what the timelines from the client on closure of those pipelines and then the start of execution of the work.

15:21 Additionally, as I have also stated that our CapEx plan, intend to complete by... Mostly by November this year, that will give us room for also ensuring that the new CapEx is deployed sufficiently across q three as well as q four to ramp up on the revenue side as well as the margin side. Okay. Okay. I have two questions on specialized DPC, and then I'll get back in the queue. So on specialized DPC, you know, given that during the last quarter, we have seen revenue spillover across of about INR crores from Q4. So I wanted to know how much was actually executed and recognized in Q1.

16:06 And with respect to, you know, what measures are being taken to improve the execution discipline and prevent further slippages in the project timeline for specialized DPC work. I wanted to get some understanding on that. Sure. Yeah. So of the 10 odd crores that was spilled over into q one of this financial year, about 4 crores was the only... Is the amount that got executed because of, as I mentioned in the opening remarks, the change in scope from the client. So that that was something beyond our own control and also, again, a one off. As for the execution discipline, so that's still offs don't happen. We are well prepared because we are working on these service... Specialized services based on the expertise of equipment and manpower that we have established over the last few years, almost about five to six years in the making. And so that that expertise has already been established. It is more now ensuring that what the commitment from the client side is and the project ground realities are, those are being taken into consideration when we really get into the execution side. So we do not see this being a regular incident where we do... We see spillovers.

17:21 But because these projects are specialized in nature, which are dependent on multiple factors when it comes to client level site execution, Slight slipovers quarter to quarter... Spillovers quarter to quarter are bound to happen. But the change in the project scope that happened for one of the projects, which led to a major slippage in the margin for these specialized services, that is a one off thing, and we don't see that happening again. Okay. Okay. So last question was exactly on that. So, you know, with respect to that change in scope by the client, which affected our margins in specialized DPC, what changes are you making to your contracting and operating processes so that, you know, similar events do not, you know, happen, and the financial impact also does not happen. So for example, are you, like, introducing particular change of scope clauses or any idle equipment charges or demobilization compensation or any such contractual protections that, you know, so explicitly, very clearly place that cost on the client.

18:35 Right. So definitely, in our... Even in our current contract that we've discussed, so there is already a safeguard put at the, you know, percentage of, you know, the level of scope that can change. So that is factored into the contract price. So beyond that, it is renegotiable. So that is where we are at. And because of business strategy reasons, I cannot give out the exact numbers on what is the scope percentage that we have fixed with the client, and also there is an NDA with the client on that. But going forward, the one thing that we are looking... We've already started doing post our, you know, issues we faced at this project is mobilization in a phased manner so that we do not end up in a scenario where the client eventually changes the scope and we are held up with idle equipment and idle manpower. So that that is one change that has already been put into place. And on more strict terms, controls with the client with regards to change of scope are being put into place for future contracts where we see... Where we have... We get a sense that there could be a possibility that some changes might happen.

19:47 Okay. Okay. Thank you. Thank you for patiently answering my questions. Wish me all the best. Thank you for the questions, Rohan. Thank you. Thank you, sir. Ladies and gentlemen, to ask a question, please press star and 1 now. Participants who wish to ask questions, may please press star and 1 at this time. The next question is from the line of Manish from Swastik Investments. Please proceed with your question. Yeah. Thank you for the opportunity. So, you just highlighted in your opening remarks that it will not be possible to disclose the quantum of damages or the losses that we are seeking from the client.

20:32 So did I hear it correctly? Just wanted to kind of reason that. Yes. That's correct, sir. Okay. So even after we account for the 3.3 crore adjustment that you've talked about in your presentation and highlights, we are still down significantly on the net profit. So does it mean that these losses that we are going to seek are kind of pretty significant? Because when you obviously try doing a calculation, that is what is kind of coming out. And how confident are we that we'll be able to recover these losses that we are seeking from the inclined? Sir, thank you for the question. So to answer that, one, the profits are down or the margins are down with one of the reasons being the specialized services margin dropping.

21:22 But the other significant reason is also the drop in margin in our warehousing and transportation contracts, where we noted that the revenue has dropped significantly, which has led to the drop in margins there. And as for how significant the claim or the loss here is and how we will be able to get it back, we are confident that with the contract terms that are already in place that we'll be able to settle and recover the losses. But to what extent and by what time it has to happen in the subsequent quarters because it is related to the current financial year itself. But that will come... Once that details are... Become more clear and we have a a clear picture on that, that is when we'll be able to give out those details more specifically.

22:11 Yeah. Okay. And my next question is on the warehousing and the transportation segment itself. So what is the outlook for this segment as far as q two is concerned? So for the q two in this segment, usually monsoons also happen to be a little soft on the steel movement and steel activity. So we do anticipate that it will be it will be picking up compared to q one as we noted that steel activity has picked up a little bit. But it will be on the software side and the main activity will happen primarily in Q3 and Q4, which is traditionally how we have seen this business working. Okay. And how are we progressing on the sale contract, the sale contract?

22:56 So the sale of Dankuni contract is is now at a stage where it has started giving the required... We are working on the required levels of the commitment that we have for that contract. And so we do see by q three that it'll be normalized to the levels that it should be at once this month and period is also passed. So did we kind of realize revenue across all the three months during q one? Yes. We did realize revenue across all three months, but it was lower than what we had anticipated as for the reasons I already stated in the opening remarks. Mhmm. And also a reconfirmation. So q two margins are also expected to be soft. Right? Yes. I would say that q two margins would...

23:46 It's hard to put a number on that right now, but usually q two margins tend to be on the software side itself. But, we hope that with something, the one off kind of incident that we saw in q one, not repeating. So we will not see a bigger drop as... As bigger drop as we have seen in q one, but still q two will remain soft. Yes. Okay. Alright. Thank you. Thank you, sir. Ladies and gentlemen, to ask a question, please press star and 1 now. Participants who wish to ask questions may please press star and 1 at this time. The next question is from the line of, an individual investor.

24:36 Please proceed with your question. Hi,. Thanks for the opportunity. My question is with respect to renewables. Now renewable is now contributing over 30% of our equipment rental revenue, and our peers are aggressively scaling to 800,900 ton fleet. On a competitive landscape in wind direction is evolving rapidly. And recently, one of our OEM, Enos, is moving toward captive in house fleet. And how we are handling the situation? Like, how we are mitigating this risk? Thank you for the question, Mr. Sandish. So, with regards to that question, even with the OEM ramping up or looking at bringing in equipment, we are aware that they have already in the past brought in equipment, but the demand for their own activity is so huge that they are not looking at managing their demand with their own equipment fully. Right? So the idea of what we understood from our client of them bringing in a few equipment is to to mitigate their risk that they are dependent entirely on the rental side. So that is only a small percentage, five to 10% of their overall activity.

25:45 It can be taken care of with the kind of equipment they've brought in. So that is not an area that we are looking at per se. And on top of that, we are working with other clients as well beyond. So so that has... Gives us enough opportunity and visibility in the renewable energy space to be able to continue the kind of growth that we see there. Like, we have any, like, industry specific players, like BluePine IP... BluePine IP with SunVee and Tara with Premier. Like, do we have any long term contact with respect to wind? Because, like, we are kind of almost moving more than 30% in the... Especially when you're... When they... Wind. Like, do we have any multiyear contract with anyone of IP? Right. So to answer that, sir, we have maintained this in the past as well. Our focus does not remain to become heavily dependent on the wind sector specifically when it comes to our revenue stream. So we are trying to play it out with what we see as the best possible opportunities out there and not become specifically dependent on one client or one sector. So we will keep analyzing and taking care of what we require from our margin perspective and deployment perspective and change. And because our equipment is fungible across sectors, so like we see right now, we have moved this quarter, we saw the uptick into renewable and power, and we saw some drop in the cement and steel sector contribution.

27:12 Going forward with the kind of order book we have, we could see certain changes there again because the equipment is movable across sectors. My last question is like, last three to four quarters, we have consistently missed our quarterly top line and margin guidance due to various operational deferrals and infusion delay. Like our PAT margin dropped to 2.4 like and our specialized EBITDA, EBITDA earlier we targeted like 18 to 23%. Now we are compressed to almost 10%. Like, can you meet the guidance of 20 to 25% like, reassurance for this year? Can we reach, like, three forty two, three forty? Sure. Thank you for the question again. So as I've mentioned in the opening remarks and I answered the question earlier from sir Rohun Mehta, I suppose, we are...

28:01 With the kind of order book in hand and the kind of execution that we're looking at in the going forward quarters as well as the CapEx that is planned and being executed for this financial year itself, so we do see that we should be able to hold to the target that we have set for ourselves. It is an aggressive target. I'm not going to shy away from saying that, but we are also holding the confidence that we should be looking... We should be able to meet that by the year end. Sir, how much is the order book of $29.05 How much order is on specialized service? How much is from specialized? So 74% is from equipment and specialized services. And the ratio for Last year, I think we did 44, I think, in the specialist service.

28:54 So this year in the first quarter, the specialized services contribution was 13.29 crores out of the total revenue for that segment. And in in the order book itself, if I look about it... Look at it, so we have close to about about... Out of this, another 50 odd crores in this financial year, we do see it should come from specialized services. Okay,. Thank you. Thanks a lot. Thank you, sir. Thank you, sir. Before before we take the next question, we would like to remind the participants that you may press star and one to ask a question. The next question is on the line of from Nine Rays Equity Research. Please proceed with your question.

29:45 Hi, sir. Thanks for the opportunity. What will be the full year CapEx? Thank you for the question, mister Deepak. So as we've stated earlier, our CapEx guideline is for INR 80 to 100 crores for the whole financial year, which we are expected to complete by November of this financial year itself. Okay. So what it will be majorly towards? It is predominantly as we have updated in the past also. For the q one, we have done primary towards two large cranes, two nine hundred ton crawler cranes that we had purchased and deployed for some project sites. And going forward, also, it is going to be towards higher capacity cranes. Okay. Thank you. Thanks. That was my question. Thank you, sir. Thank you, sir.

30:31 The next question is from the line of Manish from Swastik Investments. Please proceed with your question. I want to... During the previous quarter, you talked about the metallics business. Right? And I guess you guys were still drawing out a road map with respect to that. So do we have any updates on that? Or is it still in the Sure. Thank you for the question, sir, on that. And I'm sorry. I think I missed out on my opening remarks about Metallics. So for Tara Chand InfraLogistic, we're currently still on the drawing board and trying to figure out what would be best that would align with the capital deployment as well as towards the growth of the company.

31:20 So that is still being discussed. We are taking... We are in active discussions with our client as well because we want to have a clear picture from the client side, from, you know, sales side before we really go in for the input side. So that we understand will take another two, three quarters and probably FY 'twenty eight is something when we look at going into it. But to also address an earlier question from previous con calls also, we initially, the idea was probably to have steel activity where we are also part of the material is also part of the activity that we take up. And... But going forward right now, at at least at present, one thing that we are looking at is it'll be more service driven rather than manufacturing or material driven is is what we are looking at right now. Once we have more clarity from our clients, we'll be able to give out those details.

32:20 Since you talked about clients here, did the... Where the idea come or conceived from the fact that there's a request from the client for some services? So Yes. So so the idea has been conceived based on association in steel for four decades now. So based on the understanding of that as well as very active discussions with all the clients, the primary producers in the country that we have been doing an active discussion with them. Based on that, the idea is being conceived for sure. Alright. Thank you. Thank you, sir. Thank you, sir. The next question is from the line of an individual investor.

33:06 Please proceed with your question. Sorry to interrupt, sir. Your line is not that active. Please speak little louder. Hello. Am I audible? Yes, sir. Hello. Yeah. So thank you for taking my question. My first question is, as you mentioned that you have a 2.9% yield in this quarter, which is little bit better than your competitor. So my question is, how do you calculate real on inflation in your incremental business? And are you expecting like increase of rental rates in the future? Right. So sir, thank you for your questions. So the utilization is basically the revenue earned against the revenue that was possible to be earned for the for the overall fleet that is deployed in the rental business. So that is how we come to the conclusion on... Of utilization.

34:06 And the yield is basically the revenue earned against the value of the machines that are deployed for that revenue. So that that is how we calculate these numbers. And in... Whether whosoever you're comparing it with, ours is better or, as you said, higher, it all comes down to a mix of equipment. You know, what mix we have is basically a mix of cranes, small and large, as well as aerial working platforms and piling rigs and certain other concrete equipment. So that mix is unique in itself, and that allows us the bandwidth to be able to push for probably a higher yield as you've asked. Okay. And the next question is regarding the specialty services.

34:54 As you mentioned that the margin has been dropped in specialty My question is how do you define these specialized contracts and how they are different from other contracts? Yeah. So to answer that, sir, these specialized services contracts are basically where we are bringing in manpower, resources, equipment to execute a certain activity. In in our case, one example is if we are doing the entire piling... Ground piling work for a project, like in the case of a cement plant, if we are doing the entire piling work execution, which involves manpower machinery as well as certain material that needs to be provided for the entire completion of the job. Whereas in our equipment rental business, we are just deploying the machine along with the manpower that runs that machine, and the rentals are based on the monthly hiring period or the monthly rental rates that the client has to pay based on what the machine does for. Or even if the machine is sitting idle, the client is required to pay that money. Whereas in the case of specialized services, the the revenue is earned out of the execution of the job.

36:07 K. So are the margins are higher compared to... If you provide only green rental to the client in specialty? No. So definitely, the equipment rental stand alone margins traditionally for us have been in that 58 to 60%, at least in the last year, or in that 55 to 60% band, which is higher than our specialized services, which is more... Which has otherwise been at about 17%, 18 and dropped to 10% for this quarter. Okay. And my next question is regarding the capital. As you mentioned that you ordered high capacity cranes for crane this quarter. So in the future, regarding the high capacity CapEx, like how you are focused your CapEx is focused towards, like wind or long wind?

37:01 So to answer that, as I've answered an earlier question as well, our CapEx, when we plan our CapEx, we are looking at bringing in machinery, which is fungible across sectors. So as you see, we work in the cement sector, the steel sector, petrochemicals, power sector, and renewable and even in the infra development sector. So these machines are usable across sectors, so we don't focus on this particular sector. We look at long term contracts with our clients where we see opportunity or visibility with the client. And there, accordingly, we take a CapEx decision based on what the returns we can anticipate and the pipeline and the confirmed order book that we have. Thank you so much. You, sir. Thank you, sir.

37:48 Ladies and gentlemen to ask a question please press star and one now. Participants who wish to ask questions may please press star and 1 at this time. The next question is from the line of Deepak from Nine Rails Equi Research. Please proceed with your question. Thanks for the follow-up, Chen. So the renewable energy, which is going to change in the order book or is going to remain same at 31%? So thank you for the question, mister Deepak. At present, it is occupying about 30 odd percent in the rental revenue, and we see that remaining across the financial year. If at all, it might increase with the cap... Recent CapEx that we have done, but we don't see it going below 30% at least for this financial year.

38:44 Okay. Thank you. Thank you, sir. As there are no further questions from the participants, I now hand the conference over to mister sir for closing comments. Thank you. So before we close, let me point you to the year ahead rather than the quarter behind us. We expect, as I've already said, we expect our profitability to strengthen through the second half as the affected equipment returns to full deployment and our specialized services revenue as well as the warehousing revenue studies from around the end of the second quarter. That together with our order book and the continued shift of our fleet into power and renewables gives us the confidence to hold our medium term targets.

39:30 So thank you for your time once again and your questions today. For anything still open, please reach out to us and our team, which is a stellar IR, and we look forward to speaking to you next quarter. Thank you, everyone. Thank you, sir. On behalf of Tara Chand InfraLogistic Solutions Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines. Thank you.