Action Construction Equipment Limited (NSE: ACE) Q3 2026 Earnings Call dated Feb. 04, 2026
Corporate Participants:
Unidentified Speaker
Rajan Luthra — Chief Financial Officer
Sorab Agarwal — Executive Director
Analysts:
Unidentified Participant
Presentation:
operator
Ladies and gentlemen, good day and welcome to Q3FY26 Action Construction Equipment Limited conference call hosted by MK Global Financial Services. As a reminder, all participants 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 the conference call, please signal an operator by pressing Star then zero on attachment phone. Please note that this conference is then recorded. I will now hand the conference over to Mr. Abhishek Dapariya from MK Global Financial Services Ltd. Thank you. And over to you sir.
Unidentified Speaker
Good afternoon everyone. I would like to welcome the management and thank them for this opportunity we have with us today. Mr. Sourab Agarwal, Executive Director, Mr. Rajan Lothara, Chief Financial Officer and Mr. Vom Agarwal, President. I shall now hand over the call to the management for their opening remarks. Over to you gentlemen.
Sorab Agarwal — Executive Director
Yes. Good afternoon and welcome to this earnings conference call for discussing the Results for the quarter and nine months ended 31 December 2025. We take this opportunity to wish all of you a wonderful new year with good health and happiness. And along with me in today’s earnings con call we have our CFO Mr. Rajan Dutsa and our President Mr. Vayom Agarwal. I hope that all of you have had an opportunity to look at the company’s financial statements and the earnings presentation which have been circulated and uploaded at the stock exchanges. Innovation, Value and Trust are the pillars on which ACE has built its market leadership.
As a reflection of our engineering capability and our deep understanding of India’s project site requirements, the company has recently unveiled an extensive suite of new generation technology powered equipment. The new portfolio includes intelligent tower cranes, passenger lifts, AI assisted pick and carry cranes, advanced aerial work platforms, high performance telehandlers and a range of advanced material handling systems and robust construction equipment reflecting ACEs sustained focus on new edge technology driving performance, reliability and safety across India’s infrastructure and industrial sectors. These machines offer higher productivity, enhanced safety and more intuitive operation which while ensuring reduced total cost of ownership for our customers as India’s infrastructure momentum accelerates as remains committed to delivering world class solutions that strengthen our nation’s growth story.
Now to briefly on the financial performance for the third quarter of FY26 on a standalone basis the total income was flattish on a year on year basis at Rs. 888 crores approximately with an EBITDA margin of 18.5%. The EBITDA of company grew by 2.48% to rupees 164 crores as against 160 crores. In the corresponding quarter last year the EBITDA margin expanded 74 basis points to 18.5%. The PBT grew by 4.28% to 151 crores against 144 crores and stood at 17%. The PAD grew by 8.15% to Rs 115.88 crores against rupees 107 crores and stood at 13.04%.
The PVT and PAT margins expanded by 96 basis points and 117 basis points respectively on year on year basis. For the nine months ended FY26 total income declined by 3.21% year on year reflecting the subute performance in H1 and stood at around 2,373 crores. Despite this, EBITDA grew by 7.15% to rupees four hundred and fifty eight crores with EBITDA margin expanding by 186 basis points to 19.32%. Profit before tax increased by 8.54% to Rs four hundred and fifteen crores with PVT margins improving by 190 basis points to 17.5%. Profit after tax stood at around three hundred and sixteen crores registering a year on year growth of 11% while PAT margins expanded by 171 basis points to 13.34%.
From a sequential perspective in quarter three FY26 operational revenues grew 15% quarter on quarter. Operating EBITDA increased 16.28% to 128 crores while PBT and PAT rose by 9.9% and 11.5% quarter on quarter respectively. Margins reflect a 5.5 crores provision towards additional gratuity and leave in catchment arising from implementation of new Labour codes. Excluding this margin profile would have been even higher. The contribution of crane petal handling and construction equipment segment stood at 90% of our total revenue and we reiterated our market dominant position while Registering revenue of Rupees763 crores which has grown by 10% as compared to quarter two FY26.
The company recorded sales of 2,710 units in the quarter. The margins expanded to 20% and stood at 152.82 crores. The revenue contribution of AGV segment stood at about 10% and we registered revenue of 89.44 crores. Our quarter three performance, along with the sequential improvement in demand as the year progressed, has reinforced our assessment that the initial softness following the transition from BS3 and BS4 to CEV5 was temporary. Demand stabilized in quarter two and returned to normalcy in quarter three. Quarter Quarter three sales have been particularly encouraging, especially when viewed against the higher base of quarter three of last year which had benefited from pre buying of equipment.
Looking ahead, we expect timely project awards, improved on ground execution, supportive policy measures and higher government spending to create a favorable operating environment for the company in the coming quarters. The India EU FTA and the proposed US deal at the rate of 18% tariffs are structural positives for Indian manufacturing, boosting both competitiveness and sentiment. India is now better placed than key competing markets, especially China, and these developments are likely to reignite the China plus one strategy driving manufacturing growth which augurs well for us. Further, the Hon. Finance Minister Union Budget 2026 reinforces a growth oriented, physically disciplined roadmap for India’s development with a continued thrust on capital expenditure.
The Government of India has sustained its infra focus with CAPEX spending growing at a CAGR of 19.4% over financial year 22 to financial year 27 budget estimate. The government has budgeted the capex spending at 11.5% year on year in FY27 budget estimate to 12.21 lakh crores. The capex spend to GDP is healthy at 3.1%. Productive capex to create infra assets is crucial for amplifying productivity which will further fuel economic growth, enhance global competitiveness and accelerate technological innovation in the country. The budget prioritizes infrastructure and manufacturing through measures such as the enhancement of construction and infrastructure equipment scheme to promote domestic manufacturing of high value and technologically advanced equipment, the proposed Infrastructure Risk Guarantee Fund and the development of dedicated freight corridors, 20 new national waterways and seven high speed rail corridors as growth connectors.
An outlay of 5000 crores per city economic region over five years has been proposed to support infrastructure development in tier 2 and tier 3 cities through a reform and result linked financing framework alongside incentives for municipal bond issuance and continued support under the AMLOD Spring. These initiatives are expected to accelerate project execution, strengthen logistics and drive sustained demand for the company. With our enhanced capacities and execution readiness, the company remains well positioned to capitalize on these opportunities and we are optimistic about our medium to long term growth prospects. Also, we expect our top line to remain flattish during the Current year with improved margin profile as compared to the last year.
With this I would like to open the call for question and answer session. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask question may press star and one on the touchdown telephone. If you wish to remove yourself from question Q, you may press star and two participants are requested to use handsets while asking a question. Please and gentlemen will wait for a moment while the question queue assembles. The first question is from the line of Garvit Goyal from scenario Alpha. Please go ahead.
Unidentified Participant
Hi, I’m audible.
Sorab Agarwal
Yes, you’re audible. Yes.
Unidentified Participant
Good evening sir. My question is more on the industry side. What are you seeing in the term of the competition from the Chinese players? Are you seeing any kind of increase in their intensity in the terms of more import from China in the crane category?
Sorab Agarwal
We are successfully talking about the crane category.
Unidentified Participant
Yes sir. And more of the construction equipment as well.
Sorab Agarwal
Okay. See Chinese players are reasonably aggressive. There is no denying the fact. And before going on to cranes let me just brief you a little on the excavator market. Although we are not present there talking of the track excavator. So in the last five years they have taken up 20, 25% market in India on account of their predatory pricing and the credit terms and all they offer. So yes, they are reasonably aggressive in terms of their pricing and their positioning strategy with respect to credit. And often they keep it so attractive and lucrative that customers get attracted coming on to the cranes.
Obviously the pick and carry cranes and less than 30, 35 ton capacity. India is self sufficient and you know we produce more or less all the cranes in India and we are the market leaders there and we face no problem from any Chinese company or any competition. But yes, with respect to the bigger cranes, the truck cranes and the crawler cranes, yes, Chinese have been very aggressive in the last, I would say five, seven, eight years and with their pricing again, predatory pricing and credit terms. So when the Indian infrastructure was growing, Indian manufacturing, let’s say the infrastructure construction market was growing.
So the crawler crane and the truck crane market manufactured in India remain subdued only on account of that the Chinese players were dumping at low prices at very aggressive credit terms. Not out of place to mention that 4, 5 of the companies which were in the larger crane segments also shut shop in in the last four, five years. Whether it was Tata, Hitachi, they stopped making crawler cranes in the last five, 10 years. Til was in some sort of financial problem. Tadano, in a Joint venture in India did not start to produce even though they developed the cranes in India.
Cobelco stopped making the bigger cranes. We only got a pricing problem from the Chinese and there’s another one, ABG cranes. So looking at all this and because we were also in these bigger crane segment or heavy crane segment, we had applied for, filed for, you know, protection or what you can say, study in Ministry of Commerce and a proper DGTR Director General Trade remedies, proper assessment happened and it was a, you know, a public trial, you can say. And it lasted nearly one one and a half years. And finally duty was recommended on the Chinese cranes in the month of September.
But unfortunately for some good, bad reason, it has not been notified by the Finance Ministry. And obviously Finance Ministry was totally busy with their budget in the last one one and a half months. So we have been trying to seek time from them as to the reason why it has not happened or you know, if any additional information, anything is required. Although there is a very clear order from Ministry of Commerce BGPR classifying the entire proceeding which is public knowledge, it can be seen anyway. So that is the situation what it is today that the anti dumping duties which were the DGTR findings and ruling is there but they have not been notified by the government which would have happened in December.
Unidentified Participant
And considering your opening remarks, it seems like industry environment is improving, right? And yes, so considering both the cases like at this place, the environment is improving and on the other side the Chinese competition is rising. So how do you see the growth outlook maybe in FY27 and FY28 because we are having the capacity with us, right? So what do you think about the.
Sorab Agarwal
You know, I’ve understood your question. You are mixing two things with respect to our core business of mobile cranes, of construction equipment that we manufacture in India, we have hardly any competition from Chinese with respect to particular segment of that business which is heavy cranes, cranes bigger than 30, 40 tons. There is competition and as it is, we are small in that segment because the Chinese have captured it over the last so many years. We were trying to increase the manufacturing capacity capability of our company and our country, you know, by getting that order. So we really do not face any problem or competition from China or Chinese aggression with respect to our core business.
So there is no problem there. Everything is fine. We are expecting growth there. Yes, last one one and a half years was slow, especially after the, you know, the election results were a little not as per expectation. And luckily we were saved because of pre buying happening of BS3 last year, I’m talking of last financial year. This year was slow because a lot of pre buying had happened. Some extended monsoon overall geopolitical plus plus plus plus Mr. Trump and tariff sentiment. And we were expecting some tele handler execution to happen from the government order. It got delayed.
Reasons beyond our control over the market. Last 8, 9 months, 10 months we were able to not really increase our revenue. But now things seem to be on track. The sentiment is very much there and we are market leaders in our core segments. We do not face any threat, any competition from the Chinese manufacturers with respect to our core business. And we expect that we should be in positive territory year on year in this quarter and going forward in the next year.
Unidentified Participant
Okay. And with respect to the ramp up like I just want to understand right now what is our peak revenue capacity that we have and how fast do you think we can reach close to that number?
Sorab Agarwal
Our current capacity is upwards of 5000 crores. I think a little tweak here and there it can go up to 55 to 6000 crores and we are at a revenue level of close to around 3300, 3400 crores as of now. So what we feel and what we have thought and planned that by FY29 or latest by FY30 we should be somewhere between 6000 to 7000 crores. And like I said, we already have a capacity of close to 5,500 crores. We are doing close to about 3,400 crores plus minus. So yes, we have capacity available for the next one or two years of growth, maybe more.
And as and when we see the opportunity that or the need to increase capacity we will immediately work on it. We have got ample land available in the last year. In the current year we bought land, in the last year we bought land. So now we have enough land whether in Indore, whether in Faridabad for our future expansion. And and hopefully we can do it very quickly as it may be required. But yes, I do not see any foreseeable expansion in the next one year apart from a lot of modernization, automation which we are focusing on.
And yes, in saying this I would just like to say that with respect to tower cranes we have envisaged increase in capacity. So you know, maybe in the next year we will try and start to expand that, expand our capacity by setting up a new plant for tower crates that will be totally based on the momentum we see in the market and then we’ll accordingly we’ll start to increase our capacity.
Unidentified Participant
Understood. And sir, you in the opening remarks.
operator
Hello, Mr. Garvet. I just requested.
Unidentified Participant
Thank you.
operator
Thank you. Ladies and gentlemen. In order to ensure that management is able to address questions from all the participants in the conference, please limit a question to three questions per participant. Do you have follow up question? We request you to rejoin the queue. The next question is from the line of Kaushik Podar from KB Capital Markets Private Limited. Please go ahead.
Unidentified Participant
Yeah, can you expand a bit on your defense as well as export capability. Or what you have in mind on both these spheres? .
Sorab Agarwal
Yeah, See both of them combined together we feel that we can easily do 15% type of revenue. You know defense as well as export business put together maybe a 10% contribution coming from exports on an increased base as well and 4, 5% coming from defense. In the last year we did close to 2% in defense. And in the current year again we would be somewhere around 2% on the defence business. But in saying this I would just like to say that currently we have orders of approximately 500 crores in hand which have to be executed.
And because of certain procedural delays they did not go into execution. And we start to go into execution now very soon. So what I can very say that for the next year we already have around 500 crores of 50 crores of order. So put it in percentage of next year’s growth. I mean our defense revenue can go up to 8, 10% in the next year. But it will not happen because obviously it will be phased out or you know, with respect to delivery. So we expect that next year we can go up to 4, 5% contribution from defense at least about 4 and going to exports.
Last year we did 4% contribution from exports. This year we are looking at somewhere around 6 to 7% more towards 7%. Okay. So in the current year 7% exports and 2% defense will make it about 9% contribution to our business. Then your objective is to get it at our own currently 9%. So next year we can be pretty confident it will be somewhere upwards of 10%. And our plan was 10 to 15%. So the first benchmark hopefully we should be, you know, reaching an FY27.
Unidentified Participant
And in this budget there was some. This incentive or something to be given. For your construction equipment and all those things. Can you expand on that?
Sorab Agarwal
Yes. The finance minister did mention upon a CIE scheme that is construction and infrastructure equipment scheme. And to the best of our knowledge, because we have attended certain meetings in Ministry of Heavy Industry with respect to this and to the best of our knowledge, so this is A PLI scheme which wherein for the first time, you know, focus is being given to construction and infrastructure equipment in India and especially to those equipment where our country relies mainly on imports of equipment or where, you know, the percentage of the demand fulfillment in India is more from imports, even though it is made in India.
But let’s say still the good quantities are being imported. So that’s the focus so to you know, to indigenize or to do that in India. Whatever is getting imported into the country and obviously most of it is from our neighboring country only because of their price and policy. So herein this will be a proper PLI scheme with you know, incentives based on attaining revenues, turnovers and FY25 revenues and investments would become the benchmark. FY25 revenues will form a part of the, you know, the added investment that that would be required in this scheme. Sorry, FY25 investments would be, you know.
Unidentified Participant
Okay.
Sorab Agarwal
While you know, becoming eligible for this scheme. So hopefully it should be out in the next two, three, four months. But maybe it can be a face saver in. In the absence of the anti dumping duty order which we were expecting.
Unidentified Participant
Okay. And this thing, this new scheme that. Is to become after say in three, four months or something, will this be for newer products or for your existing products?
Sorab Agarwal
This is mainly for categories where our country is importing more than manufacturing in India or totally based on, you know, where products are totally being imported. So if we look at it like that, cranes and truck cranes will get included in this. So basically import substitution based on import substitution. Yes. So the heavier crane where we were expecting anti doubling duties in all probability should get included in this. Apart from categories like piling rigs, reach tractors, aerial work platforms which are hardly being manufactured in our country.
Plus a lot of other machinery, road machinery, construction equipment, smaller and bigger dumpers, smaller excavators, really big mining excavators. So you know, tunnel boring machines, ropeways, a lot of other things which the country is really not producing.
Unidentified Participant
Yeah. Tunnel boring is specifically mentioned in the budget. That’s what I see.
Sorab Agarwal
Tunnel boring is how the entire process started because China stopped our machines.
Unidentified Participant
Huh? Okay, okay, okay. Now these things you are capable of. Manufacturing or you require some kind of expertise for manufacturing such things.
Sorab Agarwal
We are already there and couple of other machinery categories which are coming under this scheme. We were as it is envisaging and we have the capability to design and to manufacture that in India.
Unidentified Participant
Okay, okay, thank you. Thank you. I’ll come back if required. Thank you.
operator
Thank you. The next question is from the line of rotten Shalan from Global Control and research. Please go ahead sir.
Unidentified Participant
Am I audible? Yes, yes, please. Sir. My question is with regards to your margin sir, on product wise. So construction equipment on a quarterly basis has been a lower growth as compared to the agricultural equipment. Right. So I just wanted to know out of these two which one has a higher margin? Sir,
Sorab Agarwal
construction equipment is definitely has a margin. Agree. We are struggling as a matter of fact, especially in the last quarter. So construction equipment business,
Unidentified Participant
do you expect any increase like further growth like how much has been happened in this quarter in the agricultural equipment to continue? Sir?
Sorab Agarwal
No, first we are focused on construction equipment or agri agriculture.
I’ll talk of both. See construction equipment. We this quarter we are already at close to about 20% EBIT level. Okay. Which I think is one of the best in the country and maybe in the world as well. Right. So I think we are touching our peaks. And obviously with numbers of our construction equipment and certain other type of equipment increasing going forward in the next one or two or three years more operating leverage will kick in and we will have the flexibility to either further increase these margins or pass on these benefits to the customers.
That will decide in due course of time. Because I think at 18, 20% construction equipment business is at a right level of profitability. Understood, sir. And going to the agri equipment, yes, we were close to about 4, 4.5% here and there generally at EBIT level. But due to certain provisioning and whatever which Mr. Gustav can explain, our profitability has gone down to about a percentage there in this last quarter which I’m sure will bounce back. So yes, from there from our 4, 5%, our endeavor and target is that that needs to go to at least 12 to 15% level so that it comes to some sort of, you know, a sensible margin profile over the years to come.
And then we are definitely working towards it.
operator
I’ll just request you to rejoin the queue for the follow up question please. Yeah, thank you. The next question is from the line of Vijay Pandey from Noama. Please go ahead.
Unidentified Participant
Thank you for taking my question. And I have a couple of questions. First is in terms of the guidance. So our guidance is slight growth or is this flat growth for the five and does it include volume or is it on value terms? That will be my first question.
Sorab Agarwal
I’ll answer that quickly. Current year I think will be flat. Flat to positive. But yes, flat. That is what I can tell you. And it is in value terms, in number terms, definitely some decline But I’m sure we’ll more than make up for it in the next year.
Unidentified Participant
Okay. Secondly sir, in terms of the scheme, the PLI scheme. So what is our expectation on which of the products will it come and where we have the capability to supply it? Like.
Sorab Agarwal
We would be focused on crawler cranes and trucks cranes for sure. And maybe some bigger rough terrain cranes apart from container reach stacker and piling rigs. And maybe some aerial platforms. Because recently we had started to do some aerial platforms. Till date we have not done any piling rigs or any reach trackers. But yes, we want to enter that line. We have not manufactured any piling rigs in India. We only do trading truck cranes and crawler cranes. We have already been doing. So I believe these four, five products is what we will be focusing on.
On if the PLI scheme comes and obviously if we are eligible for that, whatever the conditions the government of India will lay down for that.
Unidentified Participant
Yes. Okay. Okay. Okay sir, that’s it. From my side. Thank you.
Sorab Agarwal
Thank you.
operator
Thank you. The next question is from the line of Aditya from Old Bridge Mutual fund. Please go ahead.
Unidentified Participant
Yeah, hello. Thank you for the opportunity. Sir, my first question is on the volumes part. So we saw in the constructions and crane segment volume dropped by 23%. But is that the case similar kind of degrowth we have seen in tower cranes?
Sorab Agarwal
Not really. I think tower cranes has reasonably held up. Yes, for a couple of months. In between There we saw 10, 15% diploma on a year, on year basis on a monthly level. But I would say that tower cranes has more or less held up with respect to its numbers. And it was more to do with mobile cranes. And especially because of a lot of. In quarter three, quarter four last year there was a lot of pre buying. So that was the main reason which contributed to this issue.
Unidentified Participant
So if I may ask, what would be the volumes you would have done in tower cranes this year as compared to last year?
Sorab Agarwal
See in the first nine months we have already done close to about 500 machines a little here and there. And last year we did a little upwards of or close to 650 cranes. And this year we already done 500 cranes. And by the end of the year we should be somewhere close to, you know, 680 to 700 cranes. That is a 8, 9% increase over last year.
Unidentified Participant
Okay, okay, okay.
Sorab Agarwal
Look at the smaller, if you look at the smaller the self erecting tower cranes there again we did 161 units last year. We’ve already done 113 in this year. So here again we would be, let’s say four or five percentage more than last year. About 800 last year. This year it will be closed closer to 900.
Unidentified Participant
And sir, what would be our capacity here in tower cranes?
Sorab Agarwal
In the fixed tower cranes our capacity is 8, 900 units. And once we do 700 cranes this year, so we will be touching close to about 80% capacity. And that is also one of the main reasons which I mentioned that in the next year we will try and expand our capacity for tower cranes. Because our current capacity is 8,900. We are doing a small rejig so that our capacity comes closer to maybe 1100 units which can suffice for next year requirement. And that is also one of the main reasons that we might envisage. We already planned for, you know, expanding our capacity in tower Prince in the next year, setting up a new facility.
Unidentified Participant
Okay. Okay. Sir, my second question is on the realizations part. In the agricultural equipment we have seen significant jump in realization Both Y&Q1Q. So we are reaching almost 990,000 per unit in agriculture. So what’s driving this?
Rajan Luthra
Sir, I will take the question Y. This is mainly because of the or increase here in the harvesters. Harvesters. Now we have become number two in the country. And average selling price of a harvester is somewhere about 2021 to 22 lakh rupees. And we had a very significant growth in the harvest of this current year. This has led to the increase in average relation per in the Ag Department.
Unidentified Participant
So sir, in the agricultural volumes of 900, how much would we have sold? Harvesters.
Sorab Agarwal
Harvesters. We have done about 410 or around 410. This is for the quarter for 9.9 months, sir. For nine months. Then what is total agreement? Total agree and practice. We have done slightly 1600, so. 1600.
Unidentified Participant
So we, we have done 2000 units I think in agricultural equipment in nine months. Out of that we are saying 400 units are harvesters, right? Yes. And around 1600 units are tractors. Okay, okay, okay, okay. And just to understand the harvester market a bit better. So if you say we are the second largest player, how big would that market be? And what is our market share then?
Sorab Agarwal
Our market share the biggest is the. Now the class which has now been sold to Yanmar and the market will be somewhere about or market share will be around 30%.
Unidentified Participant
Okay, okay, okay. And last question. Yes.
Rajan Luthra
I’ll just like to add one more thing here. When we are talking about harvesters, we are only talking about track harvesters. We Are not talking about the wheel. Harvester which is, you know, manufactured in Punjab. So we are talking about a very niche segment of track harvest. Okay.
Sorab Agarwal
And the market I told about only other. Yeah.
Unidentified Participant
One last question is on my. Is on gross margins. So we have been posting really healthy gross margins of 33 to 30, 32 to 34% range. Probably more on 33% from the last five quarters to say earlier we used to do anywhere around 29, 30%. So the jump of the delta that we have got of 2 to 3% what would be the major reason driving it consistently and how sustainable is it going forward?
Sorab Agarwal
Yeah, I think it is a combination of four, five things. Obviously gross margin is a combination of sales price, your material cost and obviously the manufacturing expenses. And so with our cost efficiencies which we are building in and automation and productivity improvement and our continuous focus on maintaining, ensuring and increasing our sales price and our input cost in terms of raw materials. So it is a combination of that. So on all fronts we have been gaining something and that is what we have been, you know, it’s reflecting in our gross margin. And I think going forward should be sustainable because there is reasonable amount of pricing power and the market today understands that.
Yes, if the commodities go up here and down, especially steel. So you know, and which we have demonstrated in the last seven, eight years that as and when there is a drastic increase in any input cost it can be passed on to the market with a lag of 3, 4 months. So I think gross margin profile should be sustainable and going forward with the operating leverage playing in because we already have capacities up to 5,500 crore which I mentioned. So further, with increasing operating leverage going forward in FY27 and FY28, we will get an opportunity to further increase it, I believe.
But that would not be our endeavor. Our endeavor would be that we get a better contribution from our agri business and improve it in the other way. Not by increasing it further in the construction equipment or crane segment.
Rajan Luthra
And Sajita, I want to add the market because of the product mix also. So. A lot of things market is moving toward telematics and what we have done, which nobody has done. So that is also getting good marks.
Sorab Agarwal
And there’s something more. I would just like to add that with the BS5 CEV5 and very recently in the last two, three months again we have in our cranes introduced certain added features, AI based features, safety and other features or different types of platforms like a clutchless transmission which is a first in the country. For pick and carry cranes or a single chassis crane where safety is enhanced. Plus we have really focused on operator comfort and we are one of the first companies in India, rather I would say one of the first in India and maybe in the world with our as live app and telematics.
It’s not that we get some information on the machine, on the customer or our dashboards or different devices. We can talk with the machine and pass on some instructions and some controls and parameters from our cell phones or tablets or laptops onto the machine and some extended safety features which we have added. So we believe, and obviously the market is willing to pay a price for all these advanced features and we believe that not only a better price which is definitely one of the agendas of every company to maintain and sustain profitability but these value added features which we are giving whether on safety or whether on innovation or whether on the controls of the machine in the next six months to one year or one and a half years are going to be very instrumental in determining our future growth within the crane segment and other products in the country.
And we are very hopeful that whatever we have done is more or less the first time it has been done in the world on pick and carry cranes and it is going to reap good results going forward. Already we are seeing the change in product mix happening in the last six months, one year. So this will I think work really to the benefit of the company in times to come in the next one year itself. Thank you. Distinguish ourselves from any other manufacturers, you know, with respect to the offerings that we have and today our new generation cranes we can very proudly say have become fail safe cranes.
So basically unless and until you actually want to turn off some system and you know, have some accident with the crane, you cannot do it. You’ll be protected from doing it. And the operator skill level, or let’s say the safety consciousness of the operator, that report can be generated by, you know, the machine learning that is going in through the data capture which, capturing which is happening.
Unidentified Participant
Okay. Okay, Understood sir, understood. Thank you so much. Thank you so much for the comprehensive answer.
operator
Thank you. The next question is from the line of Pankaj Sebiwal from Ikigai asset managers. Please go ahead.
Unidentified Participant
Yeah, good evening and thank you for the opportunity.
Sorab Agarwal
Good evening.
Unidentified Participant
Yeah Sadhgi, when you talked about the longer term vision of 29 and 30 and you talked about six and a half to 7,000 crores in your thought process, how does the things add up? Because we believe that there’s a large opportunity on the earth for equipment side Paco specially where JCB is a very large player which is today market share wise. So when you look at the overall next three years, how does the things add up from different pieces and export also if you can dwell on a little bit of a more detail, it will be helpful.
Sorab Agarwal
See we have been fluctuating between 8 to 10,000 cranes, I would say 7 to 10,000 cranes in the last two, three years.
Unidentified Participant
Yes.
Sorab Agarwal
Going a little down in the last one or two years. I feel that, you know, if you put all the pieces together how we will reach that revenue. So over the next 3, 4 years, this about 9, 10,000 cranes will definitely go to 14, 15,000 cranes for us not only organically but also, you know, with respect to some market share, incremental market share which we will get because of a lot of good work, hard work and you know, better features which we have introduced in the market in the last six months, one year which we are very sure of.
And we are seeing attraction already with respect to our construction equipment which has Vaco and some road machinery. We feel from the current numbers that will easily double up from here or maybe more than that.
Unidentified Participant
Okay.
Sorab Agarwal
Tower cranes we again feel will more than double up from here. Material handling will more than double up from here. Exports and defense, defence we are seeing doubling up 100% in the next year on an increased base. Exports is increasing steadily. And apart from that there are some inorganic opportunities which are there with us which we are pursuing. And if everything goes well, obviously in due course it will become public knowledge. So all of that put together, I think reaching a 6,000 to 7,000 crore type of scenarios scenario over the next three to four years would not be difficult unless something major was to happen in the world economy or Indian economy.
Unidentified Participant
Sure, sure, that’s, that’s helpful. And this all growth will be funded internally. Right. There’s no need for an external capital, either a debt or a equity raise to be happening. Right.
Sorab Agarwal
A debt free company. And last year we were able to, you know, bring ourselves to a zero working capital scenario in our final balance sheet, although in the middle of the year. So we’re very hopeful by the end of this year again we’ll be able to bring ourselves to a zero working capital plus we don’t have any debt, plus we have, I think close to, you can correct me if I’m wrong, about 1200 crores on our books available to be deployed anywhere. So in doing all of this and we already have a, like I said, a capacity to go to 5,500 crores.
Crores and we will be close to 34, 35, 30, 300 crores right now. So. And obviously once we are increasing our revenue, more profits will flow in. So I don’t think we should need any type of debt or any type of thing to double ourselves or even more than that, including some acquisitions.
Unidentified Participant
Fantastic. And last but not, you know, the final question, any color on the ground level reality, because you are the as an industry you are the first company to feel the slowdown or the excitement.
Sorab Agarwal
So definitely improving. There is, there’s been a lot of traction. December onwards it took us by surprise and. And I think now especially with the, you know, the European FTA deal, just a sentiment. See obviously how much it will take shape, when it will take shape. But sentiment matters more than anything else. There was already positivity in the air and in the business on ground in December it continued into January. Then the EU thing happened and now I think with the us whatever thawing of ice has happened and a good budget with respect to manufacturing and focus on infrastructure.
So I think things will start to build up from here hopefully and we should also be playing along. And I just Hope that the 25, 30% growth scenario comes back as soon as possible because it’s been one or two years and we are also feeling wasted.
Unidentified Participant
That always is a part of the cycle. So good to hear that the ground reality has started to change for good. Thank you so much and all the best to the team.
Sorab Agarwal
Thanks a lot.
operator
Thank you. The next question is from the line of Mundin Bhandari from IIFL Capital. Please go ahead.
Sorab Agarwal
Hi sir. My question is upon the margin, so if I look at Q1, Q2, QFY26, Q3, Q our grain or equipment division realization, average selling prices slightly decreased on a blended basis. And even then our margin is expanded. So which product is driving that or how that is being done?
Sorab Agarwal
Were you able to figure out the question? Our selling price has decreased across which product category?
Rajan Luthra
Across our non agricultural product total construction equipment segment on a blended price realization.
Sorab Agarwal
Has increased, not decreased. I think it has increased. Whatever data you are looking at is wrong. Our price realization has only increased because in most of what are the price selling prices increased.
Unidentified Participant
Okay, so if I calculate reported revenues by reported volume figures, so it’s a blended realization.
Sorab Agarwal
But there is a definite increase across all product categories. All product categories non agree.
Unidentified Participant
Okay. And which product has led to our margin improvement in this quarter?
Sorab Agarwal
The current quarter. I think it’s more to do with the product mix because what is happening, new generation cranes are becoming more popular than the traditional hydra cranes. And in that again the higher tonnage cranes are becoming more popular and tower crane again is on a growth this thing. So I think especially bigger pick and carry cranes, the new generation type and some tower cranes that’s further helping us in our margin profile.
Unidentified Participant
And if I look at current improved selling price, is this now accepted by customer post? The changing norms of CEB now that.
Sorab Agarwal
Acceptability is very much in place. We struggled in quarter one and to some extent in quarter two on account of price acceptability. But now I think it is nine months down the line, ten months down the line. So now it is totally flown into customers. And that is also one of the reasons that you know we’ve been able to improve our numbers in December and we are very confident of this quarter because the price has flown down and acceptability is totally there in the market. It has been eight, ten months.
Unidentified Participant
Okay, so if let’s say we get tower crawler cans and truck cans in FY27 or so then that will be at an increased realization of increased selling price to our pick and carry crane. Or how is the difference in our selling price within this are very different.
Sorab Agarwal
You can carry cranes, the price range is anywhere between 15, 16 lakhs to you know, 30, 40 lakhs, 45 lakhs. Truck cranes and all crawler cranes, they start at 80, 85 lakhs and go up to 2, 2 and a half, 3 crores depending on models. Most popular I would say in the range of 1.4, 1.3 crores average. So they’re totally different types of machines. And yes there is the issue of price realization in the truck range and crawler. That is the reason our market penetration is small. Because the Chinese are dumping at very low predatory pricing.
And hopefully with the anti dumping duty if at all they come or you know, going forward with the CIE scheme which the government wants to PLI scheme, I’m sure somewhere it will have some compensatory effect or benefit wherein we will be able to sell more machines as compared to what we are doing today.
Unidentified Participant
Lastly, I think we mentioned we have capacity of 400 truck in flowers. Is that right? Yes, thank you sir.
Sorab Agarwal
About 400. We are doing close to 50, 60. We were very hopeful that anti dumping duty will come and we will be able to utilize that capacity in the next two, three years. Unfortunately it has not come. Now we are very hopeful that the PLI will come and we will be utilize at least 60, 70 80% of that capacity. Let’s see. Let’s keep our fingers crossed. In any case, we had mentioned earlier that our Cato joint venture will be there in place. So hopefully we should be in a position to announce something very shortly wherein that joint venture definitive agreement shall happen and it will become operative.
So that will also help us in utilizing this capacity.
Unidentified Participant
Wonderful. All the very best.
Sorab Agarwal
Yeah, thank you.
Sorab Agarwal
Thank you. The next question is from the line of Mehir Manor from Trust M Fund. Please go ahead.
Unidentified Participant
Yeah, hi. Thanks for giving the opportunity.
Sorab Agarwal
Not really. The voice is a little garbled. Maybe you are on the speaker phone or something.
Unidentified Participant
Yeah, sure. This is audible now. This is better.
Sorab Agarwal
Slightly better. Yes, yes.
Unidentified Participant
Manufacturing, logistics and intercourse accounts 7070 of the business. I mean when I see the etc order books across building and factories or across all EPC the buildings and factories and manufacturing order books are quite strong. I understand that there is an increase in price just happened but I mean given the underlying demand which is strong why did the volume growth not pick up and should we see a material improvement from here or beyond the fact that at least for VTC companies the building sector order book has picked up quite sharply.
Sorab Agarwal
See our execution and our orders have also picked up but vom. I think lot parts of the question I was not able to figure out. Were you able to figure out because of the garbled in this thing?
Rajan Luthra
Sir, What I could figure out is. that I think there is some manufacturing uptick in the economy and they want us to reflect upon that on our business is that.
Unidentified Participant
I will just repeat I’m sorry for the garbled voice so broadly. I mean when I see the manufacturing order book across EPC companies infra as well as building as batteries that order book has picked up quite sharply across last one and a half year. But however I agree that there has been a price increase adjustment there for us because of the new norms but the volume growth has not been there. So now given the fact that such high order books are there for EPC company should we expect much better volumes for us?
Sorab Agarwal
100% see, even though order books were there but the payments for EPC companies were lagging that was also one of the reasons that they were going a little slow. Now everything seems to be have sorted the price increase and the acceptance with respect to the emission norm changes that has happened. EPC companies the order books are there. Fresh orders are also coming in at a good rate now and let’s say the payment problem is sort of getting solved with liquidity being addressed here and there by the government manufacturing sector. Again things seem to have picked up and a very clear indication for that is price of steel going up.
So I believe that all things are now coming back together in the right this thing. And that’s why we are seeing increase in our own execution, our own order booking and execution which we have felt definitely in the month of December as well as continuing well into January and February. I think we’ll go to the next question.
operator
The next question is from the line of Siddharth Rekumar from. I thought bms. Please go ahead.
Unidentified Participant
Hi. So my question is what would be the volume for backhoe loaders in Q3? 3.
Sorab Agarwal
In Q3 it should be close to about what 200 numbers? Approximately. Around 450, sir.
Rajan Luthra
450? I didn’t hear.
Sorab Agarwal
I think it is. The construction equipment will be put together close to eight loaded units. Hundred. So back 200 units.
Unidentified Participant
Okay. So how do you see this product category in the future in let’s say over a five year period?
Sorab Agarwal
I think that we are doing close to about 8, 900 units average in this category. And it can easily be at least three to four times of what it is now. I would say three times. And we are already feeling it in our domestic market. Especially in the last one or two quarters. Yes, for the last three, four months the entire construction equipment market was down about 20, 25% in volume. So that was a drag. But we feel that even in the coming year from this 8, 900 units we should easily go to 1300, 1200 units.
That’s a 30, 40 for and increase. And over the next five years maybe a three times is what it seems things are. We are also getting a lot of good traction in the export market for this product. So we believe that whatever numbers we will to increase in the domestic market, similar number we should be able to increase in the export market also. And things seem to be panning out as of now as we speak.
Unidentified Participant
Understand. One related question I have is like from a product perspective, do you actually earn a higher margin or the same margin from this product compared to the cranes?
Sorab Agarwal
As compared to cranes the margin would be slightly less because of our numbers. But yes, as soon as our numbers start to hit more than 1300, 1400 units annually, we feel the margin profile for this product as well as cranes would be similar.
operator
Understand? So like one, I just request you. To rejoin the queue for the follow up question please. Thank you. The next question is from the line of Konal from Tokas from bsc. Please go ahead.
Unidentified Participant
Hello.
Sorab Agarwal
Yes, you are Audible.
Unidentified Participant
Okay, thank you sir. And just two quick questions. First is what is can you tell me the share of cranes to the top line and specifically tower cranes?
Sorab Agarwal
Share of cranes to the top line tower is generally around 10, 12% to our top and this quarter it was 10, 11 or 12. I think Mr. Luthra can do a quick calculation and send it over to you.
Rajan Luthra
In the entire cranes segment.
Sorab Agarwal
Cranes generally for us is around. Do we have a figure for all cranes put together to our top line? We will send that number, sir. Generally it’s about 60, 65%. Mr. Luka will send it to you.
Unidentified Participant
Okay, sir. And the second question is in backhoe loaders which you say can be grown 3x in 5 years easily JCB is the leaguer. I assume that you have also you have already tried to dismantle their leaders. What has been the challenge in doing that?
Sorab Agarwal
Yes, we have deciphered everything. We know the issues and obviously we can discuss in detail. We have all the plan and you know what, why we are not able to do it or even other manufacturers why they are not able to increase the numbers. So we definitely have understanding of those facts and we are working very hard on them and we are hopeful that we should break, we should be able to break away the shackles very soon.
Unidentified Participant
I was asking this question because I would assume that you would be more cost competitive with them. Right. So it has to be some other factor.
Sorab Agarwal
Yes. So our pricing is much better than JCB machine is very similar. But the issue is that over the years what has happened that you know, today JCB as a company is really not selling their backhoe loaders but all the NBFCs are selling their backhoe loaders. And because for them in a resale value perspective or let’s say a default perspective of their past experience in the last 50, 15, 20 years, they feel JCB is the safest product. And even JCB bullies the the finance companies or the down the line officials to a certain level that if any of the individual person posted by NBFC in a particular area, if he finds any other machine, he gets blacklisted by the JCB network.
They don’t give him business. So lot of things are happening. So it’s basically the NBFCs and finance companies are selling the JCB machine and it has become some sort of a self fulfilling type of a process that it is happening automatically. And then we’ve understood that we are working on it and very soon I think we should be able to break that shackle. Also it’s not that those finance companies are not funding our machines, but somehow they are in the trap of unknowingly they keep on funding. So what they also do is that some neutral customer comes their way, they indirectly push it to JCB rather than thinking of of any other machine.
So I’m sure it will happen. Nothing can sustain forever. So I’m sure we’ll figure out something.
Rajan Luthra
And just this, just to add to. This, for the nine month as per the ICMR figures for, you know, Earth moving equipment, the market has contracted, the domestic market has contracted by almost 10% whereas we have tried to remain flattish. Or grown a little bit. So that clearly indicates that we have. Grown a fraction of our market share as well.
Sorab Agarwal
But that is very minuscule room at the current juncture. I am sure with all the right things that we have been doing and even currently we are focused on. And I can very proudly say that our latest machine which we introduced along with CEV5 is one of the best machines in the world with respect to performance and reliability apart from aesthetics.
Unidentified Participant
All that’s fantastic sir. Thank you and have a good day.
Sorab Agarwal
Yes, thank you.
operator
Thank you. The next question is from line of Pratik Karani from K Management. Please go ahead.
Unidentified Participant
Yeah, hello sir. Thank you for the opportunity. Am I audible?
Sorab Agarwal
Yes, yes you’re audible. Yes.
Unidentified Participant
Had one question and correct me if I wrong if I’m wrong. In the recent budget there was a mention of some, you know, custom duties on the custom bond zones where, you know, foreign companies can land their parts and machines there, assemble and then sell it to. Then they can sell it to Indian contractors. But they’ll be only the duty, only we levy on the imported parts and not on the finished machine. So is the understanding right? And if does this does happen, could this, you know, reduce the gap between our total cost of ownership and the foreign players Total cost of ownership for the contractors.
Sorab Agarwal
See first of all on basic understanding what I just heard from you, I don’t think this will make any difference whether it is custom bonded or not. Because finally custom duty is always paid only on the imported part. So if it is assembled in a custom bonded or duties paid first, the only difference would be the duty being paid when it is imported or duty being paid with a delay of three, four months. So financially that is the only difference. But lra sahib, is there any such thing? That is his main question.
Rajan Luthra
I don’t think so. The only benefit the government has given it now the duty can be paid for a reputed manufacturers like us for not on a monthly 15 days but on a monthly basis. So now the whatever we import we will have to pay duty on a monthly basis. And if you, if you lie the keep the machines in the bonded warehouse. Duty has to be paid when you remove the material from the bonded warehouse. Probably nobody wants to keep inventory unless somebody wants to have lot of inventories in. In the bonded warehouse which is currently also applicable.
Right now also it is applicable. This what you think? 15 days, 1 month we can pay duty. This is AEO A2. We already have this approval. We already have. Earlier it was 15 days. Now. Now we can pay duty on a monthly basis on the 1st of every month. We we can pay duty for all imports. You can calculate whatever is duty and pay once rather than paying it every time or every 15 days daily basis. And now it is paid on a monthly basis at the end of the month.
Unidentified Participant
Okay. Thank you sir.
operator
Thank you. The next question is from the line of Rajiv Maheshwari from Raj Investments. Please go ahead.
Unidentified Participant
Good evening, Mr. Agarwal.
Sorab Agarwal
Yeah, good evening.
Unidentified Participant
And I have a couple of questions. First is has the government totally gone back on this electric cranes? Because it’s long back it was showcased in the exhibition. But still no update as such on that. Can you just throw a light on that?
Sorab Agarwal
Yes. No, I think they did come back with some regulations four, five months back which have been approved and but unfortunately the approvals required from from CMVR again ARI approval there was some issue with the excite batteries and all. We have any update when it is getting finished? The batteries have gone to ARAI on their test bench. And we are expecting their approval within. This month or maybe next. Within this quarter the electric cranes will become ready for commercial sale. Correct sir.
Unidentified Participant
Okay, so they will be ready this quarter. So regarding the electric vehicles, will it help us to gain market in the EU and the US after the trade deal? The new electric cranes and the newer version of the cranes which we recently launched.
Sorab Agarwal
To be very frank with you, currently we do not export anything to the EU or America. And that was never in our scope of things. Also in the last four, five years, three, four, four years we’ve actually started exporting Middle East, Asia, Africa, some South America and little bit in Southeast Asia and some Central Asia. Definitely going forward in the years to come we will be exporting these electric cranes and not only these electric cranes. Today our emission norms are the best in the world. Tier 5, Europe is Tier 5. America and Japan is Tier 4.
So yes, going forward in the years to come, not only Electric but even the Indian diesel engines. Everything is going to go to the developed part of the world in the next two, three years. But first our focus is on Middle East, Africa, South America. Which we can penetrate easily.
Unidentified Participant
And the second part is regarding our defense order pipeline. It’s a long time. None of the announcement has come on any big defense orders. So is this the government gone slow or something is going up. In the pipeline which may be announced in the coming months.
Sorab Agarwal
There is an order of close to about 150 machines. They are called heavy recovery vehicles. Which we are expecting anytime. Each machine is approximately a crore of rupees. So at least first it’s a 54 and then it’s a 90. Take care of Rudra sahib. That’s how it is. This joint tie up with the Shokla land hrv. This will be announcing shortly. And even as of now we have orders close to around 500 crores available for execution. Within this year we’ll be executing further 30, 40 crores. So let’s say we will be entering the new year with about 460.470crores worth of orders.
Unidentified Participant
Okay.
Sorab Agarwal
That’s very hopeful that in the next year we will execute about 150200 crores worth of orders. So that should on the increase base make it about a 5%, 4% contribution from defense. And we hope to maintain that 5%, 6% level going forward.
Unidentified Participant
If I listen correctly in your opening remark or in some of the questions you have mentioned about some acquisition of land in Indore. Am I correct? Was it Indore or some other place.
Sorab Agarwal
In Indore as well as Faridabad Palwal. Yes.
Unidentified Participant
Okay. Makes sense. But in Indore any plan of setting up a new plant or what exactly is the rationale behind this?
Sorab Agarwal
The rational was to rationalize on the logistics, outward logistic cost. Because Madhya Pradesh Indore is we believe more or less like more closer to central India. So dispatch of machines we realized to south and west would be more economical from Indore. And you know, on a larger number of machines this could lead to significant outward logistics. And obviously in Indore there is a good enough base for to further diversify our input supply of you know, the auxiliary industry base. As well as to benefit on the logistics, output logistics and especially you know, the port infrastructure.
So this was the main consideration. Why we also looked at indoor going forward.
Unidentified Participant
So by when can we decide on the framework of setting up that plant or now we have just planned to take the land and in due course or the plunder.
Sorab Agarwal
Right now we plan to Take the land in the next and it is being developed for commercial use because you know the land is under development. Hopefully we will get possession for use in the next one year. So we can expect something over there in the next two to three years. Currently first of all we will be developing the our tower crane plant on our this new piece of land which we have bought in Palwal. We have bought two pieces. One is about 22 acres and other which we are about to get possession is about 86 acres.
Unidentified Participant
Okay.
Sorab Agarwal
So first we will be developing the 22 acres in Pal. And we will have 86 acres in Pal available for future expansion. And this 30 acres in Indore for future expansion.
Unidentified Participant
Okay.
Sorab Agarwal
We thought to lock in land at good prices because you know land prices in the last two, three years have been increasing you know at a very significant pace to ensure that we do not make a lot capex on cost of land. So that’s why we logged in this these lands.
Unidentified Participant
Okay. Maybe you got at a competitive rate and that. And since fund was available out there soon already doubled.
Sorab Agarwal
So this 250 crores worth of land is already 500 crores. By the time we are setting up factories it will be 6, 700 crores.
Unidentified Participant
So you have already doubled your money in a couple of maybe years or the company’s money.
Sorab Agarwal
But in any case the purpose is not to sell them anyway. So the future expansion will come at a very good cost.
Unidentified Participant
Yeah, that’s right. One quick update. The January sales is how. How much percentage is the January sales compared to last month.
Sorab Agarwal
Is definitely higher.
Unidentified Participant
Okay, thank you.
Sorab Agarwal
Thank you. The next question is from the line of Dinil Barada from Freedom corporate. Please go ahead.
Unidentified Participant
Hello. Am I audible?
Sorab Agarwal
Yes, you are.
Unidentified Participant
Hello. Yeah, can you sort of give me the year on year growth of these sub segments in the non aggregate segments such as you know what is the growth mean for cranes, construction equipment and the material ending segment and the sort of direction for the next year on how you see the growth in these segments.
Sorab Agarwal
If you look at our segment results so in the cranes and metal handling and let’s say the construction equipment on a quarter on quarter basis we’ve been able to grow at about 10% on revenue basis. And yes as compared to on a year on year basis this quarter there was a 4% lower growth, negative growth on a whole year basis. I think it is going to be more or less flattish even in this segment as conveyed earlier. That is to maybe a minor positive. So that is how it is. And next year we are sure that There should be good growth in both our segments.
But yes, we are only able to put a number to it only in the next conference.
Unidentified Participant
Hello? Hello.
Sorab Agarwal
Yes, yes please.
Unidentified Participant
Yeah, sorry if I was not clear, I was asking about volume growth in these three sub segments in the quarter. Can you give us some brief or you know, an approximate number?
Sorab Agarwal
I think it will be better if Mr. Luta send it across on an email. You can just tell us and then we can send on email to him. Just please send us the email. We’ll immediately respond on that.
Unidentified Participant
Yeah, nothing else from my side.
operator
Thank you. The next question is from the line of caution. The next question is from the line of Himanshu from individual investor, please go ahead.
Unidentified Participant
Hi, good evening. Am I audible?
Sorab Agarwal
Yes.
Unidentified Participant
So my question is regarding some of the new growth areas the company is venturing into in terms of exports, defense orders and heavy cranes. So when these businesses continue to follow. The current asset light build to order. Model that is supported, that has supported high asset turnover historically, or do we expect higher asset base for all these incremental businesses?
Sorab Agarwal
We have always been asset light and especially our ratio to asset to turnover ratio has been very good. We will totally keep that in mind in whatever we are doing.
Unidentified Participant
Thank you so much.
Sorab Agarwal
Thank you.
operator
Thank you. The next question is from the line of param, an individual investor. Please go ahead.
Unidentified Participant
Hello. Hi sir. Thank you for this opportunity. So firstly, post transitioning to the BS5 norms, what kind of EBITDA margins can we expect in say FY27 and FY28 on a steady state basis?
Sorab Agarwal
I think what we have been achieving in the recent quarters should be our benchmark for, you know, let’s say the next year or the year after that, maybe close to about, let’s say 18, 19% if we include other income and close to about a 15% plus minus without other income.
Unidentified Participant
Understood. So secondly, could you elaborate more about the AI integration in your cranes and how difficult it is for other players to sort of replicate the same?
Sorab Agarwal
Replication of the same should not be possible because the new four odd features which we have introduced in our machine, we have patented them before we introduced it on the machine. You know, the technology and the procedure that has been used, you know, to make it function. So in case if any competition tries to get close to it or copy it, then obviously we’ll have to use our patrons to stop them. And what these do is they basically make a crane fail safe and the operator can only do safe operations and even if he does some unsafe operation, it will be brought to a safety zone automatically and whatever unsafe acts an operator is doing are being recorded.
So the operator grading whether he is actually a capable operator or not, that also, you know, gets generated. So it’s a mix of a lot of things and but most importantly that it will be very difficult for anybody to, you know, do an unsafe operation or you know, put the safety in jeopardy. Apart from that, there are a couple of other things like the first clutchless transmission. So I’m sure this should gain a lot of traction with operators because the operating cranes will be very easy, less tiresome, less cumbersome and again, keeping in mind safety, as I mentioned, first rigid chassis, single chassis crane.
So you know, because there is no articulation so you know, the, the crane is much more safer than any other conventional pick and carry crane. All these things put together. I’m sure we are moving in the right direction.
operator
Thank you. As that was the last question for the read, I would now hand the conference over to the management for closing comments. Over to you, sir.
Sorab Agarwal
Yes, thank you. I think as discussed and going forward we expect stability and visibility in the markets post the EU and US trade deals and our own government focus on infrastructure and manufacturing. And I think this augurs very well for our future prospects. And we expect that with our capacities and capabilities in place going forward, our growth trajectory should get back on track soon. And then we are looking forward to it. And I think that’s it from our side. Thanks a lot. Thank you. Thank you.
Rajan Luthra
Thank you.
operator
Thank you on behalf of MK Global Financial Services limited That concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.