Action Construction Equipment Limited (NSE: ACE) Q4 2025 Earnings Call dated May. 27, 2025
Corporate Participants:
Sorab Agarwal — Executive Director
Rajan Luthra — Chief Financial Officer
Unidentified Speaker
Analysts:
Unidentified Participant
Garvit Goyal — Analyst
Vijay Pandey — Analyst
Divya Agarwal — Analyst
Rahul Ranade — Analyst
Mudit Bhandari — Analyst
Kamlesh Bagmar — Analyst
Rashmika Rao — Analyst
Aman Shah — Analyst
Presentation:
Operator
Hello, ladies and gentlemen, good day, and welcome to the Action Construction Equipment Limited Q4 FY ’25 Earnings Conference Call hosted by Anand Rathi, Share; Stock Brokers Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr Santoshi Alapu from Anand Rathi Share; Stock Brokers Limited. Thank you and over to you, sir.
Unidentified Participant
Good afternoon, everyone. On behalf of Rathi Institutional Equities, we are pleased to invite you to Q4 FY ’24 earnings conference call of Action Construction Equipment Limited. I would like to welcome the management and thank them for the opportunity. We have with us today Mr Saurabh Agarwal, Executive Director; Rajan Lutra, sir, CFO; and Agarwal, the President from Action Construction Equipment Management. I shall now hand over the conference over to Mr Saurab Agarwal, Executive Director of Action Construction Equipment. Thank you, and over to you, sir.
Sorab Agarwal — Executive Director
Yeah. Good afternoon and welcome everyone to this earnings conference call for the 4th-quarter year ended March 2025. Along with me in today’s earnings con-call, we have our CFO, Mr Rajam; and our Head of Investor Relations, Mr Viom Agarwal. I hope you’ve 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. Last year, FY ’25 has been another year of strong and resilient performance by our company and we have been able to yet again deliver our best-ever quarter with better-quality and consistency in earnings while maintaining a strong balance sheet position.
Let me take you through to some of the highlights of this fiscal. To begin with — sorry, to begin with, it gives me immense pleasure to report that on a standalone basis, we have achieved a total income of INR3,420 crores in this fiscal and recorded our highest-ever yearly sales and profits in the year gone by. Our growth of 14.47% is ahead of the industry in our core sectors. Our EBITDA margin for the year expanded by 148 basis-point to 17.52% from 16.04% last year and PBT expanded by 138 basis-points to 15.88% and PAT increased by 83% to 11.8%.
In absolute terms, EBITDA grew by 25% to INR599 crores as against INR479 crores in the preceding year. We were able to increase our PBT by 25% from INR433 crores in FY ’24 to INR543 crores in FY ’25. Similarly, our PAT also increased from INR328 crores to INR404 crores, thereby registering a growth upwards of 23% in the last financial year. To brief you on the financial performance of the 4th-quarter of the last financial year, on a standalone basis.
Total income stood at INR967 crores, INR67.55 crores for the quarter, which is up 7.616% sequentially and grew by 12.98% on year-on-year basis. The EBITDA for the quarter stood at INR171.26 crores, whereas the PBT and PAT stood at around INR160 crores and INR118 crores, respectively. Our company was able to sustain expanded margin profile and the EBITDA margins stood at 17.7%. The PBT and PAT margins also expanded to 16.59% and 12.24% respectively.
The strong margin profile was led by better realizations, favorable product mix along with efficient cost-control measures. We continue to be long-term debt-free with sufficient availability of liquidity for future growth. The Board of Directors has recommended a final dividend of 100%, that is INR2 per share for the year ended 31st March 2025. Now moving on to the segmental business performance.
We have strengthened our role as a market-leader in crane Industries and with our consistent efforts on a standalone basis, we have scaled our metal landing and construction room business to over INR3,090 crores in the fiscal gone by. And this segment has registered a growth of 15.55%. The growth was both in value and volume terms. Our number for — our numbers for metal handling and construction equipment have increased by 14.75% from 11,643 in FY ’24 to 13,360 in FY ’25.
In this segment, we have been able to grow our profits by 35.36% to INR564 crores with a margin expansion of 18.26% versus 50.58% for the last year. The Agri division registered revenue of around INR230 crores with margins at 3.73% further, in the quarter gone by, we were award we were awarded our company’s single largest order till-date to deliver 1,121 handlers with attachments and accompanied necessaries at a total value of INR420 crores to Indian armed forces.
The said order marks a pivotal step towards modernizing India’s defense infrastructure and empowering indigenous manufacturing. Our relentless innovation and commitment towards developing new products empower us to deliver such specialized equipment under the government’s and Make in India initiatives.
We are confident that going-forward, supplies to the defense will contribute to around 5% of our revenue in the medium-to-long term. Our strategic position in the core sectors of infrastructure, construction, manufacturing, logistics and agri will provide necessary impetus to our growth trajectory. It is crucial for us to highlight that our organization’s Revenue is robustly supported by all the core sectors. Manufacturing and logistics contribute approximately 45% to our revenue, while agriculture accounts for 7% to 8%, real-estate makes up around 12% to 13% and construction and infrastructure sectors represent the remaining 35%. The balanced revenue distribution is an outcome of our strategic efforts over the last five, six years to steer the company towards countercyclical domains. In the past year, we have successfully completed our capital expenditure as planned, expanding our capacities. Our crane capacity now stands at 13,200 units, while the metal handling and construction equipment capacities are at 2,700 units and 1,800 units respectively. Our blended capacity utilization for cranes, metal handling and construction equipment stands at around 70%. Going-forward, we plan to further enhance our operational capabilities with modernization and automation, aiming to boost our capabilities and market competitiveness — competitiveness. In-line with our focus on product improvements, we have successfully upgraded our products to meet the revised CEV5 emission norms and the new safety norms as per AIS 160 Phase-2, which have come into effect. This transition is not only about compliance, but also about elevating the overall performance and of our products with focus on safety and operator comfort as well. On the macro front, India continues to stand-out as the fastest-growing major economy. Despite prevailing global uncertainties, our GDP is expected to grow at a steady pace of around 6.5%. This momentum is backed by strong macroeconomic fundamentals, including easing inflation and a supportive stance by the Reserve Bank of India on interest rates. Resilience in domestic consumption, coupled with government’s sustained focus on capital expenditure continues to drive India’s economic trajectory. However, external risks remain such as rising credit barriers, disrupted global supply chains and an ongoing geopolitical and ongoing geopolitical tensions. To sustain growth amid these challenges, India was capitalized on its internal strength and remain agile in adapting to evolving global landscape. With India now standing as the world’s fourth largest economy, we are confident of our nation’s potential to evolve into a global sourcing hub for goods as well as services. As we move into FY ’26, we anticipate a subdued start to the year due to geopolitical issues, tariff-related conflicts and especially implementation of CEV5, that is BS5 emission norms with price implications for customers. Nevertheless, we remain cautiously optimistic. For the full-fiscal year, we are targeting top-line growth of approximately 14% to 15%, while maintaining a stable margin profile. We will revisit and refine these projections by end of second-quarter, depending on how effectively the industry navigates the challenges. Looking beyond the near-term, we are confident of our company’s medium to long-term growth prospects. We are steadfast in executing our strategic roadmap, focusing on cost-efficiency, disciplined capital allocation and strategic pricing initiatives to enhance both competitiveness and profitability. Our core strategies are well-defined and robust, enabling sustained growth across all segments, ultimately creating long-term value for our investors and stakeholders. With this, I would like to open the call for question-and-answer session.
Questions and Answers:
Operator
Thank you. Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchstone phone. If you wish to remove yourselves from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.
The first question is from the line of Garvit Goyal from Invest Analytics Advisory. Please go-ahead.
Garvit Goyal
Hello. Am I audible?
Sorab Agarwal
Yes, you are audible here.
Garvit Goyal
Good evening, sir. Congrats for a good set of numbers. My question is on guidance part only. As compared to Q3 con-call when doubling guidance was year for us. Can the management clarify this inconsistency in guidance and what has changed now that our growth guidance literally got half than what we were aspiring to do in industry. I agree you have mentioned three, four reasons already, but my point is simple. It is it is very much evident that most of these reasons were already there when we impacted last-time.
Despite that, you had shown a decent confidence of doubling FY ’23 revenue never to. So please let us know, sir, what went wrong in these two to three months that suddenly that confidence is vanished now.
Sorab Agarwal
Confidence has definitely not vanished and like I did mention in my speech or address that being cautiously optimistic. Yes, we, we were very hopeful that between FY ’23 and FY ’26, we will double ourselves. But I think it appears that we might just fall a little short is the truth. So there is no denying the truth.
But yes, definitely, if you look at FY ’22 to FY ’25, we have doubled ourselves from INR1,600 crores and we’ve done in excess of double. So I’m sure if not the third year, definitely somewhere in-between the third and the fourth year, we’ll be able to do that. And yes, we were projecting about approximately a 20% growth, if I’m not wrong, right,, for the next year?
Garvit Goyal
Yes, sir. For FY ’23,
Sorab Agarwal
Yes, yes, yes. Yes. So yes, we had projected that this year, current FY ’26 would be close to about a 20% plus/minus. But looking at the scenario and the overall momentum apart from, fortunately the rains and the monsoons also setting in a little early, so I think it will be prudent to give the right guidance, which is 14% to 15% as of now for the current year.
Garvit Goyal
Okay, sir. And secondly, you mentioned in your opening remarks like defense is going to be 5% of our revenue medium-term. So is it like we are a bit down in the terms of execution timeline? Because I remember, I think some time back, we have also quoted that exports plus defense cumulatively going to be 15% of our revenues, right? So can you put some color on that? What is the exact timeline by when we are targeting and what is the percentage we are targeting here?
Sorab Agarwal
Yes. See, hopefully, defense alone within this year should be close to 4% or a little over 4% for us in FY ’26. And definitely in FY ’27, it will be 5% or beyond because this particular order that we have got about INR420 crores. So execution will start sometime in September or October. So there are a lot of formalities and trainings and things that have done before that. So execution cannot start before that.
So we’ll be executing maybe close to INR80 crore INR90 crores plus-minus in this year and the balance will go into the next year. And we have a three-year timeline there. So like I said, let’s say in the current year, about 4% from defense can be the contribution to our revenue, apart from another 5%, 6% coming from exports. So both put together, contribution from defense and exports in the current year will be 9% to 10%.
And yes, our medium to medium-term target is to take you to between 10% to 15%. So I think we are on-track. Yes, we did suffer a little setback in our exports in the year gone by. It has dipped the contribution because one or two of our main markets suffered on account of their own economic growth. But yes, still in the current year FY ’26, we’ll do a 9% and 9% to 10% exports and defense put together. And hopefully in the next financial year, we’ll be able to take it forward further.
Garvit Goyal
Got it, sir. And then sir, we mentioned about the DES norm, right? What kind of impact are we witnessing? And is it going to be a temporary phenomena or are you seeing it will be continuing for next, let’s say, two to 3/4 and that is why we are pretty — pretty much losing on the revenues in the financial year.
Sorab Agarwal
So we are talking of the emission now, BS three, BS, right? Yes, yes. So I think it is a temporary phenomenon because what has happened, some has happened in-quarter three and I would say December and especially in-quarter four. So and apart from that, let’s say, about 60% of our products, the pricing has increased by about 12% to 13% and the balance 40% has increased by about 5% to 6%. So the balance 40% is not a problem. That price has easily been adopted by the market. But yes, where the price has gone up by 12% to 13%, which is about 60% of our produce. So with our experience of what we saw In when the industry moved from BS3 to BS4 with respect to engines bigger than 50 horsepower in 2021. So it is a two, three-month settlement period out of which I feel that April is gone and we are more or less May is finishing. So hopefully, the pain should be in this quarter only with respect to the acceptability of the increased pricing because what also happens, you have to understand that about 50% of our customers are rental or hiring companies. So they also need to renegotiate and work-out their rental prices with their end-users and customers. So it is little time-consuming and the price increase this time is not 2%, 3%, 4%, but about a 12% to 13%. So obviously, they need to adjust their rentals by about 12% to 13% with the end-users and that is the effect in all probability that we are seeing. So hopefully, it is a, I would say, a localized phenomenon within this quarter. And generally Q1 and Q2 are similar. So — and as it is, is, we do about 55% to 60% of our revenue in the second-half. So we believe that second-half should be much faster this time as compared to the first-half.
Garvit Goyal
So are we assuming any degrowth in the first-half or it can be a Y-on-Y make it.
Sorab Agarwal
So the first-half, I don’t think so. Q1 may be a little bit here and there, but I think it is still a little premature to answer that because we have a whole of June pending. So there could be a possibly a little de-growth, if at all on a year-on-year basis in Q1.
Rajan Luthra
But here,, I would just like to add one more thing that the company is focused very strongly on the bottom-line. And on year-to-year growth, you can see some margin expansion as well.
Garvit Goyal
Actually, sir, as you mentioned in the opening remarks, margins will be, I think in the similar range. So you are saying it will be on the upside, right? So what is exactly?
Sorab Agarwal
If you try and compare year-on-year, then you would see a growth because when we say — say that we are going to maintain a stable margin profile, we are referring to the last quarter, which is already on an level.
Garvit Goyal
Got it. Okay, obviously. I think last understood. Last one was a deep right, I guess you, so you were yeah,,
Sorab Agarwal
I was thinking might be a little premature would be similar or maybe slightly expanded. So that’s what we feel because whatever price increase has happened on account of BS5, we have pushed it into the market.
Garvit Goyal
Got it. Got it. And sir, lastly, on the overall demand outlook, particularly domestic side. We know our exports are challenging now. I want to hear from you, are you seeing any kind of slowdown or slowdown in government capex or any delay in the releasing of the payment from the government side that will pick the growth in the government capex, anything like that you are witnessing which can hamper our growth apart from the export side?
Sorab Agarwal
See, nothing from the government side with respect to capex plans or actually payments and all. And as a matter of fact, the budgeted estimates are definitely higher than the revised estimates of last year’s above INR11 lakh crores with respect to the capex for this year. So there we are not seeing anything.
Yes, there has been a slight slowness with respect to the inquiry and order levels, especially in the, let’s say, the last 20 days, I would say rather after attack there has been something and especially after this conflict that happened at the border, but I’m sure it will normalize.
Garvit Goyal
Understood, sir. Thank you very much and all the best for the future. Hope, we will be achieving the guidance that we have done — that we have already done in the past as well and we will be able. Thank you, sir.
Sorab Agarwal
Thank you very much.
Operator
Thank you. We take the next question from the line of Vijay Pandesh from Nuvama. Please go-ahead.
Vijay Pandey
Hi, sir, thank you for taking my questions. Couple of questions. First on the — our selling price, our average realization. So our average realization for the grains construction equipment and material handling business has gone up by 2% in 4th-quarter. Just wanted to check if we said that the commission norms created a 5% to 6% or 5% growth on price increase. So just want to check where-is this delta coming from?
Sorab Agarwal
And think that could purely be product mix because very few BS5, CV5 machines were sold and delivered in Q4. And the overall impact for BS5 will start to come in from this quarter. That rather even in April, a lot of deliveries were happening, which were for BS3 first-half of April, I would say because the registration of these vehicles is allowed up till June-end. But yes, definitely the month of May and the month of June, it is purely BS5.
So you will see the price realization improving with respect to our sales price, which have increased. And like I said, the prices increased approximately in the range of 5% to 12%. So the blended increase that you can see is about 7% to 8%. Okay, blended increase will be around 7% to 8%.
Vijay Pandey
Okay. Second, secondly, sir, just if you can help us think about what is your margin expectation? Because we did 18% margin in second-quarter and 3rd-quarter, but it has now slid below 18%. So do you expect it like do we expect 18% level to be maintained or is it will be like 18% is at floor level should we consider or is it a mid level or like top-level? What should we take 18% for FY ’26?
Sorab Agarwal
See in the December quarter, we did about 17.76% and in the March quarter we did 17.7% and last year March quarter we did 17.53%. So they are all hovering between 17.5% to 17.7%. That has been the range, 17.5% to 17.7%. And on a whole year basis, last year, we did 17.5%, 17.52%.
So I would say that where we should be able to maintain our margins between 17% and 18%. And yes, if some extra operating leverage comes in the second-half of this year, then we might be able to better it also. But as a guidance, I would say it’s between 17% to 18%.
Vijay Pandey
Okay. And lastly, sir, so our previous guidance was 4,400 CR for FY ’26. Should we expect this to be achieved by FY ’27, like we — there shouldn’t be any delay beyond that. FY ’27, we should be able to achieve it.
Sorab Agarwal
If I think so, in all probability, I see no reason why it should not happen. And I mean, I thought we were on-track to do it, if not a 44, maybe a 42, 40 through 100 within FY ’26, but unfortunately, things have started looking different and especially now also with you know, most of the industry also looking and thinking on the tariffs and plus, minus, whatever, whatever. But yes, definitely by FY ’27 has been saying that, obviously, we had targeted and had conveyed that we’ll do it in three years.
But like you’re saying, yes, definitely, it will be exceeded and it will be four years, but it should definitely be exceeded in four years. I’m sure we will exceed 4,400. A
Vijay Pandey
And sir, can you just help us understand how — what is the — our like in terms of sale, what is our share in terms of all lemon green cranes, hydra cranes and what is our expectation moving forward?
Sorab Agarwal
And see in hydra cranes, our market-share is more than 75% and the other type the new-generation our market-share currently is 51% and going-forward see in Hydra we are more or less at peak so it is going to be somewhere there only with the market, maybe 1% or 2% on the upside only.
But we are very confident that in the new-generation trains, our market-share will increase, obviously, we’ve targeted much more to reach it — to make it reach similar to hydra cranes. But I’m sure within this year, we should be able to increase at least 3%, 4% in the new-generation cranes, which are lemon green in color now. O
Vijay Pandey
Kay. And what will be sir, their contribution In the entire industry-wide, like for Hydra cranes, how many in India the generally sales and new-gen crane sales in India.
Sorab Agarwal
You’re talking of overall volumes?
Vijay Pandey
Yes, the industry volumes.
Sorab Agarwal
Close to about 15,000 units, both of them put together. And out of this about 30% 35% will be new-generation phase.
Vijay Pandey
Okay. Just a second. Thank you. That’s all. Thank you, sir.
Sorab Agarwal
Thank you.
Operator
Thank you. We take the next question from the line of Divya Agarwal from Family Office. Please go-ahead.
Divya Agarwal
Am I audible?
Sorab Agarwal
Yeah, yeah.
Divya Agarwal
Yeah. Thanks for taking my questions. So few questions from my side. First is, sir, could you provide an update on the anti-dumping duty investigation on the Chinese state imports, both above and below 100 metric tons because in the previous call, you had indicated the process was at an advanced-stage. So what is the current status compared to the last quarter?.
Sorab Agarwal
We were very hopeful that we should get a judgment within April. But unfortunately, the final hearing was deferred two times within April. And now they have — obviously there also plant visit involved in the final investigation. So the plant visit is happening in the end of May and we are hopeful that in the first 10 days, the hearing will come up in the month of June. So hopefully, we should have final order within June or latest by July.
And I think as per their own internally set targets and guidelines, June should be — June is also the deadline for the department as well. So hopefully, we should see the judgment on this anti-dumping within June. But then yes, definitely the finance ministry takes another two, three months-to put it in effect. So in all probability, in-quarter two, it should be put in-place.
Divya Agarwal
Sure, sure. Sure, sir. That was helpful. Secondly, sir, I wanted to know, have you seen any pickup in crane orders recently or are the inquiries rising from any particular sector or end-market
Sorab Agarwal
? See on the contrary, the scenario is a little subdued like I mentioned. So there is really no pickup or improvement in inquiries or orders. Rather, so-far in this quarter, there has been sluggishness in the inquiries as well as orders.
Divya Agarwal
Okay. Sure, sir. Sure. Also, sir, there seems to be an attraction from the wind and renewable sector. So what are the key constraints preventing it from scaling up in this space? Is it primarily due to our focus on cranes below 100 metric tons?
Sorab Agarwal
You’re talking of the wind sector?
Divya Agarwal
Yeah, right. Wind and renewable sector. Yeah.
Sorab Agarwal
See, renewable also includes solar. So a lot of cranes are used in solar. For example is in this Gujarat where Adani is doing this massive solar thing. Just giving an example, a lot of pick-and-carry cranes are used in solar rather it is more of pick and carry that is used in solar, first thing. With respect to wind, the weights and the heights at which the generators and the members have to — sections have to be installed are much higher and heavier also.
So there you require bigger trains, cranes even going up to 200 tons, 300 tons, 400 tons, which is not in our range with respect to truck train especially or altern trains. So that is the reason we are not operating there because they are using bigger altering cranes generally. And/or crawler cranes, which are above 250 tonnes or 300 tons for such projects, which we don’t have in India.
Divya Agarwal
Right, sir. Got it. Lastly,
Sorab Agarwal
Just on my side, which eventually we will start to do through the joint-venture.
Divya Agarwal
Okay. So you are planning to do it.
Sorab Agarwal
Yeah, maybe one or two years, three years down the line,
Divya Agarwal
Yes. Okay, sure. Sure, sir. Lastly, sir, I just wanted to know, how do you compare the grains of your company versus the Chinese and German alternatives? Could you highlight any two, three key positives and negatives differentiating pointers related to these competitors?
Sorab Agarwal
See, with respect to picket carry crane the Germans or the Chinese do not make a similar crane so this is no difference. I mean there is nothing to say because they practically don’t do it right with respect to tower cranes, the cranes that we do or the Germans do or the Chinese do are very similar in terms of technology and in terms of safety and features and-or let’s say the build quality or the factor of safety and with respect to the crawler cranes and truck cranes that we do, obviously we do them of smaller tonnages like crawler cranes or we are not doing the really big ones.
So — but what we are doing are very similar in terms of capacities and capabilities as compared to what is made in the developed part of the world or what is made in China.
Divya Agarwal
So sir, what sets apart from that?
Sorab Agarwal
We are an Indian manufacturer trying to sell-in India these machines. And obviously, with respect to the European or Americans, our pricing is much better. But unfortunately the Chinese have been dumping last five, six years like madness. I mean their prices are at least 50% lower than what they should be ident looking at their historical prices, even the imports into India.
If you go back to 2008, ’19 90 so and that is why this DGTR investigation is going on for anti-dumping duties. Otherwise, you know, if, if a prima case was not established, the government would have never taken-up the, let’s say, the — this particular aspect for anti-dumping or safeguard duties.
Divya Agarwal
Correct. So it’s basically in the pricing, right, in terms of technology building and strength and all. So is it only related to the pricing that we have differentiated, right?
Sorab Agarwal
Yes. Yes, mainly it’s the pricing. Otherwise the capabilities and the functioning and all is very similar.
Divya Agarwal
Okay, sure, sir. Thanks. That’s all from my side and all the best, sir.
Operator
Ladies and gentlemen, one management line seems to have disconnected please wait while we reconnect them hello everyone we have the management line connected with us. Yeah, hi, I think we can continue with the question in a way of this question? Yes, sir. Should we move on to the next participant?
Sorab Agarwal
Yeah, yeah. Please do.
Operator
Okay, sir. Next question is from the line of Rahul Ranarde from Goldman Sachs Asset Management. Please go-ahead.
Rahul Ranade
Yeah. Hi, sir. Thanks for the opportunity. Hope you’re able to hear me well. So just wanted to understand, so when you’re talking about a 14% 15% kind of a top-line growth and like you also mentioned, there is a 7% to 8% kind of a blended price increase, right? So are we looking at a 7%, 8% kind of a volume growth? Would that be a fair understanding?
Sorab Agarwal
Yes. That is what is precisely that is going to happen and we feel and believe that the volume growth could actually be more than this. And would actually be more than this. So that’s what maybe in the second-quarter, maybe around the first-half — end of first-half, we might be in a position to revise the guideline.
Rahul Ranade
Okay. Okay. Got it. And to your mind, this kind of little bit of a falloff in terms of volume growth, how much would you kind of attribute that to in terms of the pre-buy that has already happened versus the current demand environment like you’re saying isn’t that great like which would be the bigger factor out-of-the two?
Sorab Agarwal
I would say that the pre-buying that has happened is about a 10% to 15% of a quarterly sales. It has not into quarter-four rather than end-of-quarter Three and quarter-four rather than Q1 of this year. And see, another thing I would just like to say here is that obviously, it is not only the volume growth or the price growth, there would also be at least some market-share growth for us going-forward in this year. So that will also help us.
Rahul Ranade
Yeah. Understood. Understood. But pre-buy, like you said, 15% of quarterly growth. So that isn’t a very material factor, right? That would be the right understanding. It’s more of demand-led uncertainty that is kind of holding us back-in terms of the volume growth.
Sorab Agarwal
I think it is demand-led uncertainty, which we have felt in this quarter, in this Q1 so-far in the last 50 days. But I think it — like I said, it also has to do with a little preponing of the sales which has happened. So it — and you know — and the new orders coming through a little slowly because of the price impact and the extended negotiations that are happening.
So it is actually a mix of — really cannot pinpoint even we have not been able to and what is the exact root cause, but it is a combination of a pre-buying happening so comparatively little lesser inquiries coupled with the current inquiry is not immediately converting to order because of a substantial price increase. So it’s a mix of both these factors.
Rahul Ranade
Got it. And sir, just I’m new to the company, so probably a reputation from previous calls, but in statutory P&L that I’m looking at, there is a line-item in terms of expenses called use of financial so what does this pertain to exactly?
Sorab Agarwal
Somehow you were not very clearly audible. And if you could just repeat your question and Lutrasab, if you can just take that question.
Rajan Luthra
And can you repeat the please?
Rahul Ranade
Yeah, yeah. No, no. I was asking about impairment losses on financial assets, line-item in terms of the P&L in the statutory results. So I just wanted to what this pertains to.
Rajan Luthra
Yeah, actually this pertain to the accounting standard which requires for providing for expected credit losses. So we are a very stringent policies regarding provider — making provisions for the — if any of the receivables become more than six months old. So keeping that into considerations, we have been very, very stringent and providing.
These are only mainly provisions, which will be probably when the money comes back, may come back into the system again into the profit and loss account. Out of that, only INR5.5 crores has been because of one export order of a government three years back, there was a liquidity damage was there, so that way your written-off. It is a combination of provision as a written-off of one of the LD clause which happened in one of these sales
Rahul Ranade
Okay, okay. But largely then this is expected to be returned back and then probably a new provision gets created when new sales happen. So this will kind of continue to go on.
Rajan Luthra
Okay. Definitely, if you see compare with last year, the provisions have been going down, so because everything will be provided for?
Rahul Ranade
Yeah. Understood. Yeah. Okay, sir. Thanks.
Rajan Luthra
Thanks.
Operator
Thank you. We take the next question from the line of from Equita Master. Please go-ahead.
Unidentified Participant
Sir, thank you for the opportunity. My question is related to defense and export businesses. I just wanted to understand what kind of margins do we enjoy in these segments? And how is the working capital requirement different, if at all? Like are there higher receivables and all?
Sorab Agarwal
Defense margins are more or less similar in-line with our current company margins, maybe slightly on the lower side, but similar, let’s say, bank and export margins are definitely slightly better than our company average margins. And definitely the working capital requirement both for exports as well as defense business is slightly more because the payments are in exports generally it’s a 60 or a 90 day LC generally, but there are obviously cases of advances and payment before shipment also.
But yes with respect to defense depending on the orders and the different departments could be anywhere between a 60 day-to a 120 -day day cycle after supplies are accepted?
Unidentified Participant
Okay. And sir, would you — could you also share your capex guidance for the current year? From what I understand, you already have more than INR5 billion INR5,100 crore kind of revenue capacity. So would it be primarily maintenance capex or do you have a big investment kind of plans for this year?
Sorab Agarwal
We like you rightly said, we already have a INR5,000 crore-plus 5,100 crore INR5,000 crore-plus availability of capacity. That is for various different types of products within the segments and also agri. In the current year FY ’26 we are going to be doing a capex of somewhere between INR300 crores 350 crores.
Out of this INR100 crores we have earmarked modernization and upgradation of our existing facilities and processes so that we come totally at par with the global manufacturers with respect to our general processes and the quality and the consistency. And another INR100 crores is to be spent within this year has been earmarked for — we have started setting up a new plant for expanding our capacity in a particular type of a screen.
So while the total cost is about INR250 crores for that. So out of this INR100 crores will be spent in this year approximately a little plus-minus. But the total cost will be about INR250 crores, a little plus-minus. The balance will be spent in the next year. And apart from that, an additional INR150 crores will be spent in the current year-on account of the payments for different lands, which are under the procurement process.
In the last year, we capitalized — it took over about INR51 crores worth of land for our future expansion. And the balance of all the land tranches will be coming to us within this year. So this will be a INR150 crore payout for lands, which we are acquiring for our future expansion plans because the cost of lands are increasing reasonably fast.
So we thought it prudent. And even during the time when we did the agreements and now the prices have increased quite a lot. As a matter of fact, doubled in subcases already in the last six months, one year. So in the current year, it’s about INR300 crore to INR350 crores that we will be spending.
Unidentified Participant
Okay. Thank you for the detailed answer. Sir, my last question is on the JV with the Japanese player. Do you have any updates on that? How is it progressing? Do you expect something to come by 3rd-quarter of FY ’26 as you were expecting initially or are there any kind of revised timeline?
Sorab Agarwal
I think we are very much on-target to make it functional by Q3 of this year?
Unidentified Participant
Could you also talk about — I understand opportunity you said is around INR1,500 crores, but you know, in the first two, three years, what exactly are we targeting there? And is it for export markets or domestic?
Sorab Agarwal
Saying INR1,500 crores for the joint-venture with, right?
Unidentified Participant
Yeah, that was opportunity size, I think that you mentioned that
Sorab Agarwal
The opportunity size total is close to about INR1,000 crores, INR800 to INR1,000 crores. I think INR1,500 is misquoted or whatever you have from wherever you’ve taken. And the immediate opportunity will be INR300 crore to INR400 crores on an annual basis
Rahul Ranade
Okay. Okay. Thank you so much.
Operator
Yes. Thank you. Take the next question from the line of Mudith Bhandari from IIFL Capital. Please go-ahead.
Mudit Bhandari
Hi, sir. Thank you. Sir, the 13,200 capacity number that you mentioned, which is currently operational. So there is no undergoing expansion going on our existing land or new land. So only the land we are purchasing will focus on expanding capacities, let’s say, beyond FY ’27 or beyond that, right?
Sorab Agarwal
Yes. But in saying this, like I said, modernization and upgradation activities are happening. So there might be a little construction here and there, but that is not really capex for increasing capacity. That is happening to better and improve our processes and totally modernizing that.
Mudit Bhandari
Got it, sir. Got it. And earlier, I think we mentioned for ADD that we are expecting in rough tear and crawler and crime. So are these the same segment in which this final order are pending and any Expectations of range of amount
Sorab Agarwal
Of duty the terrain I do not know it is not on rock terrain. It is on truck cranks and crawler crates primarily. Truck crates as well as crawler crates and very difficult to put a figure to it, but let’s say the calculations which we have done ourselves, so it should be somewhere in the vicinity of at least about 40%..
Mudit Bhandari
Okay, got it. And — but in any way.
Sorab Agarwal
But these are as per our calculations, not as per the department’s findings, everything will finally depend on the department’s findings.
Mudit Bhandari
Yeah, got it, got it, sir. But in any case, sir, truck crane and chloro cranes does not constitute a very significant part of our overall consolidated revenue, right?
Sorab Agarwal
Today, but let’s say, the overall size of these two types of cranes put together, our addressable size is close to about 800 machines, which translates into INR1,500 crore INR600 crores of revenue. So our current would be — I do not know maybe INR60 crore INR70 crores, maybe can correct me. And this is the potential that our country has been missing out on because a lot of dumping has been happening from China in the last seven, eight years.
Ever since the market for such type of crane started increasing in India. With the Modi government’s focus on infrastructure and bigger projects, countries started using new cranes and the Chinese started dumping at a very low-risk. And this is also the main reason that over the last five, six years, a company like Tata Hitachi stopped producing crawler cranes. Company like Kobelco stopped producing crawler cranes.
For the joint-venture with Tadano paid these cranes, but never the joint-venture never took off because the selling price was prohibitive. This is from the letter they sent to everybody that has been. A company like TIL went into financial problems because of the Chinese dumping.
And there was another company, ABG Cranes they were making cranes, they shut-down. So practically the Chinese with their very predatory pricing have totally taken off the Indian bigger crane industry in the last 7-8 years, nine years and now hopefully with the anti-dumping in-place I’m sure some of them will come back.
Mudit Bhandari
Okay. So we have from let’s say 13,200 we have capacity to produce truck and given that LED is implemented, any reasonable amount of LD is implemented and we have, let’s say all processes and capacity in, we have a capacity to produce actually 400 cranes. Yeah, truck trains and products, yes. Okay. And currently out of 400 we are utilizing.
Rajan Luthra
This year we have the FY ’25, we have done a sales of nearly INR70 crores fores.
Sorab Agarwal
Numbers are should be what about INR60, 70 crores I had this was the value in rupees, but number-wise we did about 42 in the solar train and 35 in the amounted trains 77.
Mudit Bhandari
Okay. Okay, got it, sir. And in the white labeling which planning or were executing. So is there any impact or whether we have started for some international clients or any domestic lines that we were planning to do.
Sorab Agarwal
See we have started some white labeling but it is for comparatively smaller imports in a couple of countries but yes we have started that and hopefully everything goes well in the next three, four months, two months, I can’t really put a listing to it. There is another very big white labeling opportunity on the. So I think it is still three months away. A lot of discussions are going on there.
Mudit Bhandari
Okay. And it is in crane segment only.
Sorab Agarwal
It is in similar segment. Let’s say, it falls within our construction risk cranes, metal handling and construction equipment sector and we would not like to disclose what type of product it is.
Mudit Bhandari
Okay. Okay. Got it, sir. Thank you so much.
Operator
Thank you. Next question is from the line of Kamlesh Bagmar from Lotus Asset Managers. Please go-ahead. Kamlesh, sir, you are online. Please unmute and ask the question.
Kamlesh Bagmar
Yeah. Thanks for the opportunity, sir. So just on the on the numbers which you provided like the cranes which are under the subject to ADD. So how much revenue we did? I know like say 42 crane, crawler cranes and 35 truck limited cranes you mentioned about, how much is the revenue?
Sorab Agarwal
INR70 crores rupees INR70 crores but sir, this number of truck cranes you were mentioning, but this would also include some lorry loaders. Actual truck cranes would be 10 or 12 only. So if I’m not wrong, so it will be 42 plus 10, 12, maybe 52 to 53 such cranes which are under the scope of ADD because we do another type of truck mounted crane, which is called loader, which is smaller in size and cost only about 15 lak 20 lakhs. So it is mounted on a standard commercial truck. So if we exclude that, I think the number should be around INR50, 52.
Kamlesh Bagmar
Okay, okay. And sir, like on the revenue side, like we have been maintaining like 15-odd percent CAGR growth. So how are the things like say, are we confident to achieve that particular guidance for this year and next year.
Sorab Agarwal
So I think doing a 15% should be really possible. And in the past, let’s say, last five years, we’ve actually gotten used to doing above 30%. So let’s hope those times come back. But yes, doing a 15% with our focus on different product categories and defense and export and obviously Indian market growing, I think that should be doable in most of the.
Kamlesh Bagmar
Yeah. And I do appreciate your kind of remarks with regard to the slowdown which you are seeing over the last 15 20 days or a month. But like is it majorly from the government side or the — like say the infra or the like say real-estate or other sectors also you are seeing the slowdown.
Sorab Agarwal
We have not seen, to be very frank, we’ve not felt anything from the real-estate side. We have seen this or even from the infra side, to be very frank with you. It is not from the real-estate or the infra side. It is more to do with the hiring and the rental segment, which constitutes directly and directly about 50% of our sales approximately.
So with the increase in pricing, the hiring and the rental segment, just taken a step-back and into more negotiations with us also and also with the end-users where they provide these machines on rentals because if the machines are going to become costlier by, let’s say about 12% and obviously, you know, their rentals also need to go up. So it is a — it is happening on both ends, negotiation with us and negotiation with the End-User who take these machines on rentals.
Kamlesh Bagmar
Thanks a lot, sir. Thank you.
Operator
Thank you. We take the next question from the line of Garvit Goyal from Analytics Advisory. Please go-ahead.
Garvit Goyal
Hi, thanks for the follow-up. I just want to know the update on our plan yeah,
Sorab Agarwal
With respect to electric cranes I mean we have been ready for the last one and a half years or more but in Jan-Feb the Ministry of Road Transport Highways guidelines for MBR also came. But it turned out there was some discrippancy in a couple of clauses, which needed correction.
So another two, three months was spent on that. And now everything is in-place. So hopefully, we are expecting over the next one month, we will get our you know approvals for registration of electric trains and we would be able to sell them commercially.
Garvit Goyal
And on the CATO side, you mentioned 400 annual opportunity and we are starting it in Q3. So this year, how much revenue are we projecting from that
Sorab Agarwal
I think for this year the revenue should be to the tune of INR100 crores plus-minus.
Garvit Goyal
And it will entirely contribute to the top-line — sorry, bottom-ending. So it’s a JV, the top-line. I’m topping of the top-line and because it is a 50-50 JV, so
Sorab Agarwal
Luther, if I’m not wrong, we will not be able to consolidate the top-line, only the bottom-line, right?
Rajan Luthra
That’s right. S
Garvit Goyal
So from the first year itself, are we expecting it to be a similar kind of margin that we are doing currently? Yes, I think so. Got it. Okay. Thank you. Thank you, sir.
Sorab Agarwal
Thank you very much.
Operator
Thank you thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants, please limit your questions to one per participant. We take the next question from the line of Rashmi from Rika Enterprises. Please go-ahead.
Rashmika Rao
I have two questions for you. My first question is, sometime back, you said that we were bidding for 1,800 handlers to be delivered to the army and that we and a foreign company were the only bidders for this contract. What is the status of that bid? And when will we know whether we have won the bid or not?
Sorab Agarwal
I will answer your first question. This order of 1121 numbers handlers is the army calls it RTFLT, and forklifts is the same tender you are referring to 1,800 units we were the lowest bidder and there was a competitor, JCB for this. So there was a provision of splitting of order in 60-40 ratio. If the L2 or the second-lowest bidder was willing to match the price of the lowest bidder and that’s what JCB did. They matched our price. So 40% orders, the remaining of approximately 1,800 units, that’s the 600 plus units has gone to JCB.
Rashmika Rao
Okay. My next question is, you have been telling us for a long-time that the agricultural Equipment division will turn-around and deliver steady sales growth and profit growth, but it continues to disappoint quarter-after-quarter. When will the agri Equipment division finally turn-around and start delivering sales and profit growth consistently. When will that happen?
Sorab Agarwal
See, obviously, they are delivering profits, but obviously not in tune with the company. They are just at 3%, 4% level. And we are working very in this direction. We have been doing that, but somehow, you know, the results have not been forthcoming. So we are at it as of now. That is best I can tell you.
Rashmika Rao
Thank you.
Operator
We take the next question from the line of Vijay Pande from Nuvama. Please go-ahead.
Vijay Pandey
Thank you for a follow-up. Just wanted to check, sir on the margin opportunity. What is your margin expectation for the recent defense order win and like what is the starting — defense order, yeah. Starting as well as, long-term
Sorab Agarwal
And in tune with our country, our company margins. So whenever we are bidding and quoting, we are keeping in mind the type of margins that we are doing. Yes. And you know, and that’s how we are quoting for it. So and we’ve been able to become L1. So — and we’ve been taking this big order. So it is in tune with our company markets.
Vijay Pandey
17% to 18%, that is how we should think about it.
Sorab Agarwal
Difficult to the percentage to it because you know, it’s a big order to be executed. But yes, our gross margins are similar. Okay, okay with the company’s gross margins.
Vijay Pandey
Okay. Thank you.
Operator
Thank you. Take the next question from the line of Aman Shah, an Individual investor. Please go-ahead.
Aman Shah
Hello. Two questions.
Sorab Agarwal
Can’t hear you really.
Operator
Shah, the line is very unclear.
Aman Shah
Is it? Is it okay now, sir?
Operator
Yes, yes.
Aman Shah
Yeah sir, loaders of how FY ’25 over FY ’24?
Operator
Wilm, were you able to make out the question because I was not? No, sir. I think the line is very, I’m so sorry to interrupt, but your line is breaking a lot. You may take this question offline. Thank you. Ladies and gentlemen, that was the last question. I would now like to hand the conference over to Mr Santosh Yallapu for closing comments
Unidentified Speaker
Thank you, everybody. On behalf of Anand Rathi Institutional Equities, that concludes today’s call. We thank you all for your joining us and you may now disconnect your lines.
Sorab Agarwal
Thank you thank you, everybody. Thank you all