Fabtech Technologies Ltd (NSE: FABTECH) Q3 2026 Earnings Call dated Feb. 10, 2026
Corporate Participants:
Unidentified Speaker
Ashwani Kumar Singh — Chief Executive Officer
Aman Anavkar — Chief Growth Officer
Analysts:
Unidentified Participant
Vaishnavi Vaity — Analyst
Presentation:
Vaishnavi Vaity — Analyst
Good morning everyone and thank you. I am Vaishnavi.
Vaishnavi Vaity — Analyst
Foreign.
Vaishnavi Vaity — Analyst
And thank you. I’m Vaishnavi Vaiti. On behalf of Atmil Strategic Advisors I welcome you all to the Q3FY26 earnings conference call of PacTech Technologies Ltd. Today we are joined by Mr. Ashwini Singh, Chief Executive Officer with this. Now I would like to hand over this call to Ashwini sir to introduce further over to you sir. Thank you.
Vaishnavi Vaity — Analyst
Thank you.
Ashwani Kumar Singh — Chief Executive Officer
Thank you. Good morning. Good morning all. Thank you for joining us. Let me begin with a quick introduction of the leadership team present today. Today we do have with us Mr. Asif Khan, our founder and promoter Mr. Aman an, our chief growth officer and Mr. Karan who leads our investor relations and strategic analytics. Our transition to the public market happened relatively quickly and we did not have the benefit of extensive roadshows or the prolonged pre listing engagement. Despite that we received a very healthy response and we are grateful for the confidence shown in us. At the same time we recognize that our business model and the structural platform we are building are not yet fully understood by you.
We are not a conventional contractor. We are building a design led globally positioned life size infrastructure platform focused on a long term structural growth. We are also concisely grooming the next generation of leadership empowering young talent to help shape not just perfect future but the evolution of the market. We operated in many emerging geographies. We are contributing to the very foundation of the pharmaceutical manufacturing capacity we are building for the decade ahead, not the quarter. With that I invite our Chief Growth Officer Mr. Aman Anappar to take you through the company in detail. Over to you Aman.
Aman Anavkar — Chief Growth Officer
Good morning gentlemen, ladies. I hope you’re keeping healthy and well. I’m Amana Navkar. I would firstly like to start with a brief presentation of the FabTech Technologies Limited offering that we have. Milan, can you confirm if my screen is visible?
Vaishnavi Vaity — Analyst
No sir.
Aman Anavkar — Chief Growth Officer
Just a second. Yeah. Now is it visible?
Vaishnavi Vaity — Analyst
Yes.
Aman Anavkar — Chief Growth Officer
Perfect. So to start off, FabTech Technologies Ltd. Operates in the pharmaceutical, healthcare and biotech industries and is the only turnkey life sciences platform with in house process, air and water manufacturing process, air and water are the critical lifelines for biopharmaceutical facility and this enables us to take single accountability, single solution responsibility and reduces the entire coordination risk of a pharmaceutical turnkey project. We are a design and build entity that has been operating over the last three decades that is 30 years in pharmaceutical emerging markets. Pharmaceutical emerging markets like the Middle East, Africa, Persian Gulf, GCC where medicinal independence is becoming a long term goal and a priority.
With the in house capabilities that FabTech Technologies Limited has, the speed to market or the go to market timelines are reduced and the responsibility that we can take ensures that we are the reliable partner that is chosen by Greenfield and Brownfield entities. Our focus is ensuring regulatory confidence compliant facilities across the pharmaceutical emerging markets and standing by our motto which is making medicines affordable and available globally. Through the last three decades we have built numerous facilities with WHOPQ approvals, eugmp, US fda, CGMP and local regulatory approvals across the pharmaceutical emerging markets. Our attention to detail in the pharma, healthcare and biotech industries focused on GMP compliance, energy efficiency, operational efficiency and contamination controlled environments has allowed us to build Several references across 62 countries.
We have our regional presence across Algeria, Nigeria, Egypt, Jordan, Saudi Arabia, uae, India being our roots, but we are a transnational company having the life sciences platform capable of executing projects across the pharma emerging markets. I reiterate this MENA GCC economical regions like Africa. We are an extremely asset light, lean integrated model which combines GMP expertise which we hold in house with over 180 engineers, technicians, draftsmen, pharmacists and experts on our team. We have an order book which you can see as of 3rd November 2025 with the capabilities across H Vac, process automation and clean rooms and we’re trusted by leading pharma emerging companies and existing pharma giants.
The service offering that we provide when we say design and build. As you can see my screen starts at Advisory Consulting where we guide our clients towards disease profiling, market mapping, market planning and financial feasibilities to ensure that the products that are selected by by our client are feasible for their markets. We are also in the business of building profitable businesses for our client so we have to be very selective with the kind of approach that we must have for our business. From the disease profiling step then comes the design, conceptual engineering, basic and detail engineering and then the entire project management cycle which includes the vendor selection, procurement, execution, commissioning, validation, technology transfer and the after sale, project support, sales, service and maintenance.
This is the entire service offering of FabTech Technologies Limited that has allowed us the references that we have built. Now what you see on the screen is the structure of the FabTech Technologies Limited group where we have our operations and our acquired companies present. Here you have the Turnkey Engineering Services which is Process, Air and Water which has Fable Technologies LLP focused on critical containment solutions which FabTech owns 49% of. We have FabTech Technologies LLC which is a UAE subsidiary through which we acquired two years back FTS Clean Rooms Systems LLC Markmaker which focuses on critical granulation OSD Process solutions which we acquire 33% of in 2024 and TSA Process Equipments Private Limited which focuses on critical water solutions which we will be exiting in the next in this financial year.
I would like to now focus on I’m going to stop my screen sharing and I would like to speak.
Aman Anavkar — Chief Growth Officer
Let.
Aman Anavkar — Chief Growth Officer
Me first reiterate that the given nature of our design and build and shipment based billing, especially with a growing international mix, quarterly numbers can fluctuate due to timing while the annual guidance remains the right lens to evaluate performance coming to quarter three, the softness is purely a timing issue. A meaningful part of Q3 execution was completed during the quarter but not shipped within the same period. In export oriented design build projects, revenue is recognized only upon shipment, not upon milestone and project progress certification. Accordingly, shipments and inspections for certain projects moved early into Q4. Activity happened on the ground but revenue slipped into Quarter 4.
Additionally, Q3 absorbed the front loaded costs with back ended revenue. Certain expenses such as engineering mobilization, exhibitions and international business development are incurred upfront while the corresponding revenues are recognized with a lag. As a result, Q3 reflects the cost and Q4 should reflect the payoff. It is important to note that order inflow has not slowed, the order book remains strong, pipeline visibility is healthy and there have been no cancellations or pricing pressures. This clearly indicates that the Q3 impact is timing related, not demand related. Looking ahead, deferred revenues are expected to be recognized in Q4 and execution momentum remains intact.
Simply put, execution continues, demand remains strong and the numbers will follow with timing. We operate in geographies that are on a long journey towards medicinal sovereignty. Medicinal Independence. Many emerging markets want to build their own pharmaceutical capabilities rather than depending on imports. This is where we come in. We are in the business of building life sciences infrastructure that make medicines possible. We are India’s global design build platform for advanced life sciences infrastructure. We are not building for the quarter, we are building for the curve and in many cases helping that curve. Our focus is on creating the healthcare backbone for countries that want sovereign pharma capabilities.
We have also launched our Twitter.
Aman Anavkar — Chief Growth Officer
To.
Aman Anavkar — Chief Growth Officer
Consistently share what we are building and where we are building it so that our business model and depth of work are clearly understood. I thank you for this opportunity and we are open Question.
Questions and Answers:
Vaishnavi Vaity
Thank you Aman Sir Investors, the floor is now open for Q and A session. You can raise your hands or Drop your questions in the chat. Thank you.
Aman Anavkar
The first question by Hiral Desai and I. I hope I’m audible. Can you elaborate a bit more on what disease profiling means? Yes. Disease profiling is the process of identifying which diseases are more prevalent or growing in a certain country or region. Based on this identification of the diseases, the client is able to make a collective decision what product he would like.
Aman Anavkar
To produce.
Ashwani Kumar Singh
And I would like to add to that. Disease profiling also kind of preempts the disease pattern that would going forward emerge in a particular geography. Now this helps us in advising the client in his selecting the right product portfolio based on which the facility should come up. And as Ashwin and Aman have mentioned, we are building profitable businesses. We are helping our clients in those geographies build profitable businesses. So disease profiling begins. The crux marks the crux of the business.
Vaishnavi Vaity
Okay, next question please.
Unidentified Participant
You know we are only allowing type questions or we can also have the audio on.
Aman Anavkar
I think Mercury is.
Vaishnavi Vaity
Yeah, hello, am I audible?
Aman Anavkar
Yes.
Vaishnavi Vaity
Yeah, good morning. Firstly if you could quantify the revenue that was deferred to Q4 that we were supposed to recognize in Q3, if that’s possible.
Unidentified Speaker
Sure Matthew, I’ll take that question. So around, you know, 20.3 crores of stock of material was lying at our port now which got delayed and will be built in Q4.
Vaishnavi Vaity
And any order book number you could give which is like related to December figure because in the pre presentation we mentioned the November order book number.
Unidentified Speaker
So as of January 31st our outstanding order book is 926 crores.
Vaishnavi Vaity
92626 crores. Okay. And this is as of Jan ending right?
Unidentified Speaker
End of Jan. 31.
Vaishnavi Vaity
January. Okay. Any bids or orders that we have in pipeline that we are expecting to see an inflow in the next two months. February, March.
Unidentified Speaker
Yes, there is a very healthy occurrence. There is a very healthy hot lead bank that we have close to roughly.
Aman Anavkar
Around.
Aman Anavkar
455 million US and you will learn shortly of some very beautiful conversions that are going to happen in Africa and the Middle East.
Vaishnavi Vaity
That is Great. And this 926 crores. If you could give me the split between the export and the domestic if that’s possible.
Unidentified Speaker
Sorry, go ahead.
Unidentified Participant
Shincy has then we’ll allow it. Yeah, no very very less of domestic numbers. Maitri. Here we are largely, we are largely export focused. The international market, the medicinal, the farm emerging market offers such a big potential that we rather focus on the geographies that are perceived to be a no go Areas for many and hence when we have ring fence the market in the last so many years, we would want to really reap in the benefits in the, in the time times to come.
Vaishnavi Vaity
That is great. And each of these orders, if you could tell me the lead time, how long it takes us to complete the order and kind of recognize the revenue.
Unidentified Speaker
Maitri, it seems you’re representing the entire investor community, but I’ll take it. I think you’re covering most of the questions. You’re covering most of the questions. So generally up till now we used to be having nine months to 18 months for delivering an order. But going forward we are speeding the process. Even the market is demanding quick deliveries. They’re in a rush to achieve medicinal independence. Of course it’s a 15 year old net pipe that we see. But you will see a quick realization happening going forward.
Vaishnavi Vaity
That is great. Yeah, I think that is it from my side. Thank you so much.
Unidentified Speaker
Thanks.
Vaishnavi Vaity
Thank you. Next question is from Mr.
Ashwani Kumar Singh
Yes.
Unidentified Speaker
Yeah, hello.
Unidentified Participant
Am I audible?
Aman Anavkar
Yes. Yes sir.
Unidentified Speaker
So I might have missed the earlier clarification on the numbers. So if you could just summarize in short, what was the major reason in.
Aman Anavkar
This dip in top line and the.
Aman Anavkar
Bottom line in Q3? May I request you to go through the transcript? The important thing. Cruxes. Yes. What happened in quarter three? Revenue slipping to quarter four around 2022 crores of material lying at the port. We are not a quarter to quarter story. We are a yearly guidance and design and build. May this is the trait that you will see. But the yearly guidance remains intact.
Aman Anavkar
Okay.
Unidentified Participant
And can I have the number of the guidance?
Unidentified Participant
Yes. So as we had specified will be between 380 to 400 crores and between 39 to 41 crores of PAT.
Aman Anavkar
Okay, Daniel, thank you. There’s a question in the chat box. What is the average ticket size of a typical order? What would be the bidding pipeline and what would be our win rate? Can we also talk about competition? Usually we refrain from talking about competition. We prefer not talking about European companies and just differing from the topic. But the average ticket size of typical orders ranges between 1 1/2 million dollars to about $5 million on a lower ticket size.
Unidentified Speaker
Yes. And going forward these ticket sizes are showing a marked increase where the average ticket size at this moment is around $7 million. We have a huge hot lead order bank where an average ticket size is between 7 to $10 million. Earlier which used to be, as Aman said, 1.5 to $3 million. $5 million is now increasing because as you saw and many of you might have missed the presentation which Aman gave, we are a platform. A global life science design and build or an infrastructure platform and what it means, what what we mean by platform and how we are different from an EPC is a platform has the critical capabilities of process, air and water within the group where we have invested in companies or we have bred or developed our homegrown companies to do air and process and containment solutions.
So there would not be a company like us which has a very strong design platform in house design of oral solids to high tech vaccines or biosimilars or Onco. We have a very beautiful platform of manufacturing critical components that go in the. In the. In the project that is process, oral or injectable air which is needed to cover the process and water which is needed to feed the process. This all is done in house. That’s how, that’s what we mean by platform. And this platform is enabling us to pitch for bigger projects. Plus add to that our project management team in on the ground in regions which matter the most speaking the same language as the customers or win rate 10 to 12%.
Thus far in the last three, three months it has increased to 15% and we have raised money for acquiring a European entity which will increase our conversion rate to 20 to 25%.
Vaishnavi Vaity
Next question please. Investors, the floor is open for Q and a session. You can raise your hands or drop your questions in the chat box. Thank you. Yes Mr. Girish, you can go ahead and ask the question.
Unidentified Participant
Hello, Good morning.
Unidentified Speaker
Am I audible? Yes, Girish.
Unidentified Participant
Yes. Since you’re a biopharma platform provider, I wanted to. I mean since you said vaccines and biosimilars and all. So we also make the facility for pyrogen free water as well. Like you know, those kind of facilities. Like it’s a bit technical. Yes. And we also maintain it or we just build it and provide it to the their own engineering people.
Unidentified Speaker
Not really. We don’t maintain it as of now and we don’t see ourselves maintaining till at least mid of next year. After that we’ll see how our plans fry. But largely what we are doing is we’re making our projects that we supply to these critical geographies self maintainable by providing them a project manager which takes over his maintenance manager. So that’s one.
Aman Anavkar
And add to that Girish to address specifically when we execute an end to end design and build project. The scope of work also includes knowledge transfer trainings of the operators as well. So we have to ensure that the in House engineering and maintenance teams are built on the client side so that the dependence on independent companies is taken away. But at the same time we have started, as mentioned in the previous earning call, exploring the service platform, the annual maintenance contracts as well. So one of the first IV solutions, the Paraben Free Water wfi, which we call it plant that we’re building in Djibouti, also includes an AMC component, annual maintenance contract.
AMC is.
Unidentified Participant
Yeah, yeah, yeah. Understood, understood. Okay, got it. My second query was regarding the order book which now stands at roughly around 920plus crores. So that as should we understand it, that it will all be executed roughly in the next 18 months. Because you said nine to 18 months is your project duration.
Unidentified Speaker
That’s right.
Aman Anavkar
Yes, that’s right.
Unidentified Participant
Okay. And currently we only are looking at the pharma sector. Like unlike your India operations where you’re looking at food and other market segments like electronics and all that. We are not, we are only focusing right now on the pharma sector here.
Unidentified Speaker
Currently. Yes, the pharma itself, the life science itself is offering an unprecedented opportunity, fantastic opportunity. But we have always also mentioned that we are from now preparing for the food security issue that is going to happen in these geographies that we are operating in. Number one. Number two, our India business is largely clean rooms and, and, and, and the, the upstream and downstream clean rooms. Whereas we are focusing on clean room turnkey. Now that’s the difference. This is a turnkey company which is packaging process infrastructure. Now that is only the clean room infrastructure. Number three, there are opportunities which are unfolding in this part of the world also, namely semicons, electronics and data centers.
Now we will really look at that when it really comes to that level. We of course will be in preparation with both our companies and we will take a, an app strategy to address these markets when the time comes. Till that time, we do not want to lose focus from the tremendous opportunity that lies ahead of us.
Unidentified Participant
Okay, fine. That’s all from my side. Thank you very much. Thank you. Good day.
Aman Anavkar
There are two questions in the chat box. One is what kind of margins would we be seeing going forward? Also the margin profile across segments and geographic regions. Also any ongoing acquisitions going forward and if any, what kind of impact would they have?
Unidentified Speaker
Yes, so the margins, Neil, would remain between 9 to 11%. Pat, we have the, we have the flexibility to increase the margins if we rationalize our, our marketing and business development expense which stands to a staggering eight and a half crores. All right. Every year we have been spending around 8 and a half to 9 crores in our promotion and development. Only now largely we are in the right geographies ring fence the market present in those countries in those soils. So we could we have the flexibility to increase it. Number one, number two margin across profile, across segments.
So that averages out to the same. Africa is eco market. It’s an, it’s a sensitive market. But we are, we are deep drilling now in. In. In Africa. And you will see huge traction happening in that continent. And to address the eco needs of Africa we are taking certain backhanded steps which you will see in times to come which I’m not. I can’t share it because this is sensitive information. But you will see a very beautiful geographical advantage that we’ll be taking. Leveraging different supply chain geographies using our leveraging our presence in the UAE and in Saudi.
We are becoming domestic here. So you will see very exciting steps that we are going to take forward till thus far not taken by any Indian company. Number one, number two acquisitions. Yes there are plans to and we have a very very decent acquisition engine that is the war chest for acquisitions. And Europe offers a very beautiful opportunity. We are closing in on a couple of them here in the UAE and in Saudi. We are also closing in on some acquisition opportunities to get us those strengthening the local trending, the local presence and what kind of impact what they have.
You will see the impact what they have. It will be very beautiful positive impact. Because once we are local we are preferred. And all of these countries want to become local, want to become local. And we have a very head start, very decently positioned in capturing the market which is offering for that.
Aman Anavkar
Vikas Gupta has asked the question was there also set off revenue deferred in Q2 to Q3 which can offset the 20cr margin now expected in Q4 or as of now it is a one time guaranteed margin.
Unidentified Speaker
Listen, because we this point of quarter fluctuation will keep happening. If you saw or if you saw quarter one was where was subdued quarter two where we where the spillover from quarter one happened in quarter two. And some and some of the quarter three also we pulled to quarter two. Okay. Similarly this is all as you will not. Unfortunately we do not have a precedence of what we do. Unfortunately we don’t have anybody else who have done this before us. So to.
Unidentified Speaker
To.
Unidentified Speaker
To learn from their experiences, their mistakes, their lapses. Here we make mistakes, we will learn. But we have enough buffer, enough freedom to. To. To. To.
Aman Anavkar
To.
Unidentified Speaker
If not the right word fail. But to experiment and as the markets go and there are some markets which are all. Some clients which are also surprised by our speed. So we have the material ready. They are not ready with their buildings. So we take cognizance of the relationship that we build with them and we really hold the shipment. Otherwise LC says ship it, we can ship it, dump it there, we’ll recognize our revenue. But then it will not be a very long term relation building. We sometimes accommodate our clients. So you know, this is what you will keep seeing in the at least the next two years.
The quarter fluctuation I feel could happen. But largely we are on track on yearly guidance. Breakup of the current order book by end user industries, all pharmaceutical, all life sciences. So honestly there are no breakup as such. But yes, always for the pharmaceutical emergence in these. The medicinal independence that we these countries are planning would only give us the generics. But we are pretty surprised by the GCC giving us cell and gene therapy projects. By giving us high tech medicine projects, oncology projects, we in. In Djibouti we finalize secondary.
Aman Anavkar
That is in Botswana, vaccines, animal health.
Unidentified Speaker
Now animal health is. Animal health also is becoming a big industry industry in Africa which we thought will happen much later but it’s happening now and that has opened a very.
Unidentified Participant
Different.
Unidentified Participant
Avenue for us.
Unidentified Participant
Question by Anani. Could you please provide a breakup of the current order book?
Unidentified Speaker
That’s what I mentioned. That’s what I. We thought our business was really not understood and we were expecting a lot of questions this year.
Aman Anavkar
There’s a nice question by Dinesh Agarwal. Can we say quarter four will have a bump of profit exceeding 30 crores.
Unidentified Participant
It has happened, it has happened earlier with us. So. No, it has happened earlier but here if, if we see we have to achieve 20 to 24 crores to reach our mark which is pretty, pretty much.
Aman Anavkar
Possible on the right track. Yeah. Maitri has given a list of questions. Number one, how are the receivable days in the Africa region? And if you could mention what clients are we working for? Are these local players or MNCs? I’ll take that. The clients that we’re working with are both MNCs and greenfield investors in the Africa region. We only work on confirmed LC backed payments. So the timelines of the order like we mentioned, nine months to 18 months. There is no retention over six months from installation or handing over of the project which is also backed by LC receivable days.
Unidentified Speaker
So receivable disk, as we have been saying, we are a project company but we work on LC back project. So it is Shipment based. Now if we change our methodology of revenue recognition from shipment based current, correct me if I’m wrong. Yes. Shipment based to project completion method or project progress method, you will see a substantial jump. Now that is some call people to take but largely it’s all LC backed and I would correct six months, say one year time frame and that’s about it. Any timelines when the acquisition will be done?
Aman Anavkar
First quarter.
Unidentified Speaker
We are very diligent when it comes to acquiring companies. We have very right priced companies that we are discussing with in our Russian bid to, to. To to expedite the process. We don’t want to compromise on acquisitions. When we were getting into the ipo our investors were encouraging or pre IPO investors were encouraging and all the stuff. But we remain true to what we are building and we know that success in acquisitions can happen if it is rightly priced. And we have very beautiful track record of investing in companies and turning them around and really making them add value to us.
And we do not want to spoil that record. So you will see acquisitions happening safely in the next six months. We could even surprise you if it happens before March 31st. But likely it could spill to next, right? Yeah, yeah.
Aman Anavkar
And just to address the question right before that, which countries are we targeting in Europe? To reiterate my three the reason for the acquisition in Europe is to strengthen our conversion rates and the positioning in the pharmaceutical emerging markets where these European companies are expanding to. Because as we all know the region of Europe in terms of growth and expansion is a bit saturated. So there will be references that will flow from the European side. But primarily we are focused to strengthen our sales conversions and growth in the same pharmaceutical emerging markets. And and ring fence it for Faptech Technologies Ltd.
Question 3 FY27 what sort of growth are we looking at?
Unidentified Speaker
What can we say Ashwin? We are growing at 30 to 40%.
Ashwani Kumar Singh
30. 30 is the target. The year on year growth 30% we are looking at.
Vaishnavi Vaity
Okay investors, do we have any more questions?
Aman Anavkar
There’s a question by Aniket Madhwani to clarify. Do we primarily execute only turnkey projects? And within that what is the split between in house execution and third party execution? First question, we do not execute only turnkey projects but at the same time majority are greenfield turnkey projects that we do execute. But there are also instances where brownfield expansions by existing manufacturers are taking place and those projects also do come to us where there’s an expansion of a machine or a clean room entirely which we call as a brownfield Turnkey operation. Many times also when a client is diversifying, he’s an existing manufacturer who is diversifying into a new product range which can act as a brownfield expansion or a greenfield project acting as us for us.
And within that, the split between in house execution and third party execution.
Unidentified Speaker
No, we are in house.
Aman Anavkar
I would like to, I think rephrase this entirely. In house execution is present in all the projects that we do at the same time in house manufactured products supplied to a plant is 30% and the rest is from other reputable companies. So we’re a very lean organization, I must say. Again, right.
Unidentified Speaker
So yes, because the stock has crashed, leading to the loss of shareholder trust. Honestly speaking, we were not very communicative and we have realized that people, because as Ashwin mentioned, we are. The IPO happened in. We transitioned into IPO very quickly. There were hardly any roadshows. So like we did for our domestic company, FabTech Clean Rooms, we never really had the opportunity to do road shows to explain to shareholders and the market what our business is. The market has not seen anybody, and I don’t think so the market has seen anybody like us thus far.
And what we are building is again, not for this quarter, next quarter, over the next year, but the. There is a. There is a very beautiful drug, food security, life science story emerging. We are working on it. Not really getting perturbed by what has happened because that’s a culmination of many aspects. Internal, external, everything put together. And I would say there are many beautiful companies which have became. Which have become blue chips. Now at one point of time they were not understood. Well, we, It’s. It’s not really bothering us. We know that we are true to the cause.
We are a company which talks, which. Which has less of frills and more of substance. And you will see that going forward. And whatever it is, you’ll always find us now on very communicative like we had done in faptech Clean Rooms. We are very communicative. We will be here also. So our Twitter is there in order for us to keep sharing whatever is happening with the company and what’s expected from now based on yearly guidance. I don’t want to speculate on that. I can always say we will do what we have we must do and whatever happens in the stock market will be the function of how we perform.
We expect your order wins to become. Absolutely.
Aman Anavkar
I think this is something question loudly Dinesh has said. Dinesh Agarwal. We expect your order wins to be communicated to shareholders via stock exchanges regularly so that we can retain confidence in company. You’re right.
Ashwani Kumar Singh
Absolutely.
Aman Anavkar
That’s all I’d like to say. And that is what we’ve learned and we’re going to exercise now and educate our partners, investors, shareholders about what it is that we’re doing, what it is that we’re succeeding and what steps are we taking to secure our own business as well. Right. And grow. There is a question by Dhruv.
Vaishnavi Vaity
Yes Mr. Dhruv, you can go ahead and ask the question.
Unidentified Participant
Thank you sir for taking my question.
Unidentified Speaker
Just I’d like to mention that I recently visited certain pharma plants in Dubai and Sharjah that were executed by by FabTech. The quality of work and engineering execution was excellent. It gave strong confidence in the company’s technical strength, especially in the GCC region. But my question was on the data centers. This is a key global theme. Could you share how FabTech is positioning.
Unidentified Participant
Itself in this segment?
Unidentified Speaker
The markets you’re targeting in a broad sense of the opportunity, size or order flow we can expect over the next few years? Well as I mentioned Dhru, yes. Another way not to succeed would be to run in all directions. Number one, when we have a very very potent market, the farm emerging market is Africa, Middle East, Persian Gulf, Maghribian countries, MENA region. When you have such an opportunity here, when you can create a life science infrastructure giant making medicine in affordability and availability possible, we would want to take our own time in preparing for the opportunities other than pharma preparing before taking a jump.
A sure shot as I mentioned. And I, I keep on mentioning running in all directions also will wear us thin number one. Number two but it’s not that we’re turning a Nelson’s eye to what’s happening. As I said you will see when it comes to that we are prepared to take infrastructure projects at our back end call whether we want to do it. That’s a matter which we would want to discuss within ourselves and take a call. Having said that we have in our ecosystem capabilities to take data center projects and that if it happens it would.
Unidentified Speaker
Be.
Unidentified Speaker
It would be seen. And thank you Dhru and I would really invite every single meaningful significant investor to come visit us and see what we are doing in order to understand what capabilities we have. In fact you will see a lot of beautiful things happening going forward where we owning the process air and water domain and going forward through means we are controlling, we are, we will be controlling the product IPS also which will be making, which will be making us Compelling proposition for our clients to work with us. So medicine and independence is a multi billion dollar opportunity.
If data center is a multi billion dollar opportunity. Medicinal independence that these geographies are aiming is also a multi billion dollar opportunity which nobody very few people are positioned to take advantage of.
Aman Anavkar
In summary to all what AK rightly mentioned, the priorities are life sciences projects and growing in this direction. But we’re not shying away from the new industries like data centers that are available to us because our ecosystem holds the capacity and capability to execute these as well. There is a question by Neil. You have a 900 crore order book. Could you give us a rough breakdown on the timeline that we can expect the Execution by roughly Q1FY28? As you said, delivery timelines could get faster so early realization would be possible.
Ashwani Kumar Singh
Right.
Unidentified Speaker
Neil. 900 crore order position.
Ashwani Kumar Singh
So now you have to understand because we should have a very sustained growth year on year. And right now our conversion ratios and what we are targeting for you know, order booking we must have it approximately double of our revenue targets. You know the, the growth target and all looking at 900 crore. Yes, this is right that the major portion will be covered in next financial year. And approximately you can say that 30 to 40% will pass on to the Q1 or Q2 FY28 and that is how we sustain in the market during this process.
Definitely our team, what we are talking about the conversion ratio of the order which we are now targeting to increase approximately 15% order position by FY27 by end. I think that should reflect our position in the market.
Unidentified Speaker
And you are very safe to assume that we expect the execution roughly by Q1 FY2880s and whatever, whatever steps that we are taking owning the process, the IPs and including the increase in ticket sizes. And there are steps that we are taking in order to expedite the. The civil construction by the clients also because that is something which impacts sometimes most of the times us. So those are the concrete steps that we are taking. Number one, to improve our conversion rate. Number two, to increase our ticket size by not just offering what we are doing but the process and the internal infrastructure but also taking the external infrastructure in terms of PEB going forward.
And there is another green energy option which is opening where we have tied up with KP greens for the solar. And that’s also a proposition which is now being offered. And steps in those in that way will also be. Is also are also being taken.
Vaishnavi Vaity
Okay, next question please.
Unidentified Participant
Are we there? Yeah, yeah.
Vaishnavi Vaity
Investors. The floor is still open for question and answer session. If you have any questions you can raise your hand. So drop your questions in the chat box.
Unidentified Speaker
We have none.
Vaishnavi Vaity
So there is one more question in.
Unidentified Participant
Chat box from supply package units to be tied into. I’m not able to understand this question. If you can allow him to. Hello.
Unidentified Participant
So what. What is the restriction of not moving.
Unidentified Participant
To a percentage completion method? I joined a bit late so I.
Unidentified Speaker
Could not understand that. Because most of the turnkey EPC contractor actually follows this percentage completion method. So why we are not choosing? Absolutely right question as I mentioned. I’m sorry, I didn’t get it. Hi, my name is Neerajit. Neeraj. Yes. I’m sorry there was some crosstalk also. I lasted. Neeraj. Yes, you’re right. There is a percentage completion method which we can use. Number one. Number two, as you. As you see we have largely work with secure terms of payment as we go domestic now in the UAE we are. We are a local company now. FTS is 100 held by FabTech and in Saudi we are also becoming local.
We have 100 FabTech, Saudi by FabTech and we are acquiring another one. So going forward in some geographies we will. We could switch to percentage completion method but we feel it could happen. It could be transitioned.
Ashwani Kumar Singh
It can’t.
Ashwani Kumar Singh
It will not happen. One shot liberalization. We will see the pros and cons. We have our advisors, our auditors, our. Our mentors. Discussion. One way. One thought. I’ll tell you why we have not moved. Because payment security l percentage completion method may. Perhaps we’ll have to depend on that client to keep paying us on the precision percentage completion method until we have till we have a solid experience with a particular client. We have repeat experiences of course also. But we don’t want to spoil them by giving them the percentage completion method flexibility. So that’s the only thing.
But if the. If, if, if. So if that happens, you will see substantial growth in our numbers. All right. But then as we’ll see we’ll. We’ll evaluate the situation in the next six months or a year and we’ll decide accordingly. Number one. Number two, one question I’m not able to understand. So you supply package units to be tied into plant facilities. I’m not able to take it. We are.
Unidentified Participant
Can I come in?
Ashwani Kumar Singh
Sorry, who’s this. Team at mil. You want to guide me?
Vaishnavi Vaity
If you could unmute yourself to clarify the question.
Unidentified Participant
Yes.
Unidentified Participant
Yeah, I have unmuted now. Can you hear me?
Aman Anavkar
Yes. Clear.
Aman Anavkar
Yeah.
Unidentified Participant
Simple thing was that I. I Heard you telling that sometimes the civil work is not ready at the client’s place. So that means the your unit is ready but it cannot be installed or can be tied it to the facilities of the client. I don’t know how the payment works in such cases, but that means your real, you can say installation, commissioning, handing over etc will be governed by client. So even if you got everything, everything ready, unless it is tested, you will.
Ashwani Kumar Singh
Not get the payments correct and not correct. So you heard half of what I said. What I said was there are times when the gentleman is not ready with his civil construction. But we are ready with our material. Sometimes we hold the material for relationship sake. Not that we are not. We don’t have the payment security. I also mentioned we have the liberty to ship. We can ship it all right. But there are certain times we take cognizance of the relationship that we are building with the client. Because it’s a huge pipeline of 15 years every client offers us.
So that is what I mentioned. But when we see the LC is getting expired, no, we’ll ship it. We have the flexibility. So we operate with a lot of flexibility. We do not, we are not governed or we are not dictated or we do not do anything. Which is. Which is. Which is a matter of compulsion. No, it’s our choice.
Unidentified Speaker
Yeah, I understand you would not like to offend the client. But at the same time, I think if you come to this percentage completion or you can say the inspection by client that yes, this much of work is over. So this much of payment is to be released. This is what large contractors, most of them like Hyundai, all they follow. And I have seen it working well because it helps them in procurement of material payment of you can say the. Maybe I will say laborers and things like that. Huh. So maybe you can review your working strategy because if you say that my complete.
Unless I ship, I don’t get any money. But I have got a LC to backup. I think you have to review this. Okay.
Unidentified Participant
No, as we said, well taken. Yeah. Please get.
Unidentified Speaker
Yeah. So Dinesh and Neeraj, I think you’ll both have similar questions where you know, we can recognize revenue basis milestone. So there are a couple of points which I would like to highlight. You know, Fabtech as a company has transitioned from an equipment supply to a turnkey project.
Unidentified Speaker
Right.
Unidentified Speaker
Over the years our contract have been worded in a fashion where you know, it has been dependent to shipment. However, going forward now we have completely changed our agreement where we made our payments also linked to milestones. But because all These orders are little long in tenure. The change will be effective 12 months, 16 months down the line. So recently we picked up an order where we’ve charged the client for design, we’ve charged them for shipment, etc. Etc. It is just a transition which will happen over a period of time. And our old contracts have worded where the risk of goods transferred to the end customer on shipment.
Therefore the auditor has made a view that till the time it is not shipped it is supposed to be parked as inventory. And therefore we are following this process. We’ve made this. No, we have realized this change and therefore we have made the contract itself been awarded in a fashion where we can start recognizing milestone based revenue. This will happen over a period of time when this all new orders start coming with new payment terms and new milestone driven activities.
Unidentified Participant
Okay, one thing more in this the material is being supplied by the client or you are procuring and doing the. If you can choose to answer, not to answer and do you have a good percentage coming in along with the order because that is all the financial backup you have if the material is coming from the client. Maybe the method which you are following one can sustain as long as you get a good percentage in the beginning. I stopped there. I don’t want to go too much into this because you may not be willing to answer.
Unidentified Speaker
So Dineshee, I’ll give you very simple, simple questions. Our long gesture is ideally because of designs. We spend around 9 to 12 months in designing the entire process. Post that we have to have some commercial backup from the client to move us to the technical phase. So you know, after the design is approved, we expect either advance to kick in or an LC to kick in once client commits payment. That is when we start looking at the technical part of the technical is more like forming a BOQ of that particular design and then we move on to advance.
Yes, we block. Our working capital block is around 120 days. So we have, we need that three to four months of blockage in our top line. But that is, you know again if you look at our cogs or margin which is around 60 of block 6043 fourth lay low. So that is something which we block. But we collect around 10 to 15 advance or a full LC from our customers against that I, I hope we’ve.
Unidentified Speaker
Cleared that as the advance. I hope because of a feed and.
Unidentified Speaker
Detailed engineering you get paid by the client.
Unidentified Participant
Sorry.
Unidentified Speaker
Yeah, yeah.
Unidentified Speaker
So because otherwise you are building in too much of cost and uncertainty into your.
Unidentified Speaker
No, no, no. Obviously there are certain things which we would not be discussing in a forum. What K mentioned also was protecting our basic business sense so that everything is not out in the open but everything happens once we have a confirmation for the client. Number one. Number two, there is a good advance, staggered advance of 15% and 15% or a lump sum advance of 25% or 30% based on which design happens at times in good faith. When we get the loi, we start a design okay in house. So there are various pros and there are various means on how we address various issues.
But coming to the conclusion is yes, percentage completion method we are looking at, we could go into it and we are, we are, we are debating, we’re deliberating your suggestions. Well taken.
Unidentified Participant
Thank you very much. You answered more than what I expected.
Unidentified Speaker
Thank you so much energy.
Vaishnavi Vaity
Next question is from Mr. Girish.
Unidentified Participant
Since we are project company will our operating cash flow remain negative in the coming years? Not necessarily because it only 24 cash flow is positive to the other it LC based here. This is one of the things. I don’t think so. We will always remain cash flow negative but growth hair working. Honestly speaking we are very comfortable and yes Karan, you were nodding something.
Unidentified Participant
Yes.
Ashwani Kumar Singh
So Jigny is basically, you know, if you’re growing at 30% and we’re making a path of 10 12% we will be in a way negative cash flow. Right for 30% where my working capital cycle is four months. So till the time we are in a high growth phase our operating cash flow will be negative unless until we you know look at a very substantial high pat margin. That is something which is unrealistic, which can be possible for few projects but cannot be sustainable for all the projects.
Ashwani Kumar Singh
Or if we use that flexibility of 8 and a half crores expend marketing we. So it’s, it’s a matter of we controlling some flexibility and deciding if we really have to spend 8 and a half 9 crores on that marketing spend or we can trim it down. Because now we are largely well seeped in the markets that we are present in.
Aman Anavkar
Mr. Girish, you have a question. You raised your hand.
Unidentified Participant
Yeah, a couple of small questions. In your results you have put other income at 7 crores. Like what should we read that as? Because it’s almost like 10% of the total revenue. So what should we read as the other income as moving forward as well?
Unidentified Speaker
The other income primarily is on account of interest earned on our FDs. So FD is one which we’ve parked as a margin money for our BGs. And secondly the FDs parked for the IPO money which we raised the funds.
Unidentified Participant
Okay, fine. The second was our ticket size is going to go up above 5 million as suggested. That will also help our margins, profit margin, operating profit margins.
Unidentified Speaker
Yes, naturally it would because it will give us volumes. And a very important thing that I mentioned in the beginning, we are leveraging now uae, we’re leveraging Saudi, we are leveraging our presence here to address the eco African region. And we are tapping various supply chain in different geographies. So you would. Yes. See those benefits coming in.
Aman Anavkar
Okay, fine.
Unidentified Participant
I think that’s all from my side for this quarter. Thank you very much. Good day.
Ashwani Kumar Singh
Thank you.
Unidentified Participant
Thank you lots. Team A.
Aman Anavkar
Okay.
Vaishnavi Vaity
Yes sir.
Vaishnavi Vaity
Has asked going back to historical financials, can you explain the fall in revenues in FY23?
Aman Anavkar
Well, we are looking future. I don’t know what happened in 23 to be honest with you. But you, you remember we had done.
Unidentified Speaker
200 crores of top line in 23.
Aman Anavkar
Yeah. So no.
Vaishnavi Vaity
Okay. Do we have any more questions investors?
Aman Anavkar
So can I have a parting comment?
Vaishnavi Vaity
Yes, sir.
Aman Anavkar
So thank you very much everyone. Thanks a lot for being here giving us an opportunity to explain what we do, to explain our business and reiterating whatever has happened in this earnings call. And you will hear more of us, more from us. Now when we speak about medicinal sovereignty many assume that. I assume that many assume that this is limited to generic facilities because we ourselves as I mentioned we were thinking medicinal independence in Middle East, Persian Gulf, Africa, mena GCC would first give rise to generic facilities. But in reality the pipeline ahead is much broader and deeper in the GCC in Africa we are of course doing generics, we’re doing IV solutions, we’re doing Encore.
We are the first one to do the first Encore facility in GC in Saudi, the first biosimilar in Algeria. The first vaccine project COVID vaccine project in Egypt is ours. There are many firsts to our credit and I think we should do justice to our investors in sharing all these information with with the investors now in GCC we are in advanced stages of finalizing compounding pharmacy platforms and cell and gene therapy facilities. In fact one of our reference project done through our subsidiary here for Serengine facility will be commissioned shortly. These are high value precision driven segments that reflects where healthcare infrastructure is heading in Africa.
We have recently finalized animal health projects opening an entirely new vertical for U.S. veterinary and animal health. Manufacturing is a structural, is a structurally growing space and it strengthens our presence across emerging markets. Our execution capability remains A core differentiator. I read somewhere some website expressing some concern over our execution capability. The order position here execution. So in fact our execution capability and our ground presence of our team in Kenya, in Nigeria, Algeria, Egypt, Saudi, UAE is a key differentiator of our execution capability. We we design in house across dosage formats, sterile injectables, oncology, osd, high containment, advanced therapies.
And this integrated depth allows us to control quality, timelines, execution with precision. I would really invite a lot of you investors to come in and see the kind of facilities that we have done and that is without the, without the promoters getting involved. Auto mode and as dhru. I’m glad DHRU is here and as various investors were here they were very pleasantly surprised by the quantum of jobs or the magnitude of the jobs that we are doing. So execution capability is not a challenge, it’s a co differentiator.
Aman Anavkar
In fact.
Aman Anavkar
Our project speaks for themselves. I mentioned that the size, integration and technical intensity of the facilities that we are building today reflects our capability. We are also initiating certain strategic steps which over time will significantly, as I mentioned already, will significantly deepen our order funnel. Their owning processes, they’re owning oral solid manufacturing, injectable process manufacturing, water and process. We’re bidding now for turnkey start to finish projects including the external infrastructure. And these all will deepen our order funnel and enhance or speed up the process of delivery. If stakeholders wish to understand the scale of what we are executing, they’re welcome to visit our UAE operations or to Saudi or to Africa, or if you are really really have, if you really have Nigeria for that matter, Algeria.
The door is open. The size and sophistication of the projects underway provide clear evidence of our trajectory. We remain confident in our execution strength and a really long, long, long opportunity ahead. An unprecedented opportunity ahead. We thank you very much for being here with us and we’ll be back soon.
Vaishnavi Vaity
Thank you so much to thank the management team for providing valuable insights and guidance and thank you to all the participants for joining the conference call call. We truly appreciate your time and continued interest in the company. For any further queries you for clarifications, please feel free to reach out to us@info advisors.com thank you everyone. Have a good day.
Aman Anavkar
Thank you.