Aimtron Electronics Ltd (NSE: AIMTRON) Q2 2025 Earnings Call dated Nov. 12, 2024
Corporate Participants:
Mukesh Vasani — Chairman and Chief Executive Officer
Sneh Shah — Sales Head
Nirmal Vasani — Chief Operating Officer
Nikita Shah — Chief Financial Officer
Analysts:
J.D. Tiwari
Nikhil Chandak — Analyst
Anik Mitra
Pratik Choudhary
Shridhar Yadav
Presentation:
Operator
Ladies and gentlemen, I welcome you all to the H1 FY ’25 Post Earnings Conference Call of Aimtron Electronics Limited. Today, on the call from the management team, we have with us Mr. Mukesh Vasani, Chairman, Promoter; Mr. Nirmal Vasani, Senior Technology Director and Promoter; Mr. Sneh Shah, Director of Sales; and Ms. Nikita Shah, Chief Financial Officer.
As a disclaimer, I would like to inform all of you that this call may contain forward-looking statements, which may involve risks and uncertainties. Also, a reminder that this call is being recorded.
I would now request the management to run us through the investor presentation detailing us about the business and performance highlights for the half year that went by, the growth plans and visions for the coming year, post which we will open the floor for Q&A. Over to you, sir.
Mukesh Vasani — Chairman and Chief Executive Officer
Good morning, everybody. This is Mukesh Vasani. I’m the Chairman and Non-Executive Director of Aimtron Electronics Limited. We really appreciate your time. I hope everybody is hearing me well because today we are in Germany. We have an Electronica EMS and SEMICON Expo, just like we had in Delhi, India. It’s a huge crowd, and it’s international. So today’s call will be a little shorter. Thank you so much for your time.
We did look at our presentation, so I’m going to flip through very quickly, and we can spend more time in our question-and-answer. So I’m just going to go through, skip a couple of pages.
I think for new journey today, we are in a very wide variety of industries, starting from industrial, gaming, IoT, medical, AI, power and so many areas we work. And we are — we have a niche market as we spoke last time. We are two promoters. I think you know both of us, Mukesh and Nirmal. This is our growth pattern. And we did discuss last time, so I’m not going to go too much in time today in essence of your interest in questions and answer.
So, on business profile, I think we already talked a little bit manufacturing facilities. Huge expansion is going on in our — as per our plan. Texas facility, we already registered everything and is getting shaping up. We are here in Germany also. There might be something coming out in future. We have one person already hired here. So manufacturing facility-wise, you’ve already seen this.
Capabilities, I’m going to skip this time. We do complete solution end-to-end from PCB design all the way through Box Build. So you can see in a cable assembly also, we put a cable line. We already have some interest in our sheet metal. So we do like plastic injection molding sheet models with one of the preferred partner right now. Magnetics, we do complete box build, system integrations, plastics, everything we do, including logistics.
So, on this product portfolio also, we did discuss last time. So I’m going to skip this one. It’s more you understand that now EMS is a very hot topic in India and government schemes and everything. So there is — everybody knows mostly everything. So I’m not going to go too much in detail. But if you have any questions, you can ask those questions in a question-and-answer.
Product catalog also, we spoke last time. So I’m going to skip. I know — I think partnership, you’ve already seen. We have a DigiKey, Microchip and Texas Instrument. We’ve been working with them in R&D side. That is something is interested for us in — for future.
We did discuss about competitive strength because most of the businesses has India, and they go expand globally. Our benefit is here, we have a foundation in USA, and we are expanding globally. So that is the difference here.
So — and rest of things, you can see American quality, American way of working. Even though India is a Made in India, Make in India kind of concept, a separate entity, but still the roots coming out from there. So we see that difference to maintain our quality and maintain our profitability.
SWOT theory way forward. I think strategy for growth, maybe let me just bring Sneh Shah over here for a couple of minutes. Sneh, you want to put some more light on the — moving forward, what you want to add.
Sneh Shah — Sales Head
Sure. Thanks, Mukesh, for the brief. Good morning, everyone. So to what we have committed like 40%, 50% CAGR, I think first half year also, we can reflect that numbers and that can be seen. And second half also, we are committed to in line with that numbers.
In terms of sectors, IoT played a major contribution. And down the line, it is going to be there. And to what we committed in terms of defense, we had one international drone player, which Nirmal will brief you up. And we do have one PO coming up from one of the Navratna PSUs as well. So that’s a breakthrough that we had in first two quarters. Down the line, definitely, that is going to increase.
AI, one of the important sectors we have been talking about. Development has already started in that segment. We are on the verge of meeting — like making plastics and all. And probably, we’ll be closing that order soon in the coming quarters.
Also, in terms of defense, we are eyeing at India, as well as other global players. We did get a chance to visit Tata Airbus project as well because a couple of our US entities are directly, indirectly working with our global defense players. So that’s also we are seeing to it how we can have it under Aimtron Electronics or Aimtron India entity that we are trying to analyze something on that front as well.
So down the line to what latest technologies are, AI, IoT. IoT this year is going to be the major contributor. And down the line, we have a couple of more sectors that we are going to add on.
Mukesh Vasani — Chairman and Chief Executive Officer
Thank you, Sneh. Nirmal, you want to add right now, or you can add later. If you can add a little bit, yes, drone side.
Nirmal Vasani — Chief Operating Officer
Yes. So there are some very unique opportunities. There is one in particular that I recently had the opportunity of meeting in the Southern United States and one of our defense and aerospace hubs that the US has. And they are looking for a large-scale provider with very high volumes. And the business, the likelihood of it, Aimtron has a pretty high degree of confidence in because the geopolitical situation in reference to the election results that just happened, the President-elect is going to be highly in favor of these types of projects.
So Aimtron is expecting that not only will it be this customer, but also, we should see a significant growth in not just drone and aviation, but also in power and in oil and gas and those types of technologies as well. So there is a lot of opportunities that we’re seeing in the Southern American market that we should be contributing to this significant growth for Aimtron Electronics.
Mukesh Vasani — Chairman and Chief Executive Officer
Thank you, Nirmal. I think we can start with this. Sneh, you want to say a couple of line on this one. And then, maybe Nikita can take the rest.
Sneh Shah — Sales Head
Sure. So to what one SMT line, we had talked about in RSP, that’s already been received at the facility. Trial productions are underway. And probably this month, it will be up and running with its full production efficiency, 100% down the line.
And to what we committed in terms of divergence of routings of customers from US, so we created a subsidiary of Aimtron Electronics directly at Texas. And immediately not but down the line, you will see that — a couple of quarters down the line, you will see that we will be having a lot of customer base coming from Texas facility. And to what Nirmal briefed, we are eyeing at a drone sector as one of the major contributor. We are expecting somewhere around a couple of million dollars’ worth of business, which will be executable around next two years of time frame.
And toward IoT revenue, we stated about first two quarters, it jumped almost double fold in terms of percentage, which was 7, which has increased to 18, more than 100% growth just in IoT. And again, next two quarters also, next financial years, there is going to be a major contributor. To increase the operational efficiency, we had changed a couple of store activities where like material needs to be stored, where LEAN, 5S, Kaizen, we already are following that. But to improvise on that front, how we increase the efficiency, so we changed the structure of store, and we created a compact-like system.
I think we will be having one — like a factory visit tour as well, where everybody can view that. We’ll be planning something on that front. And under Make in India initiative to what we are eyeing at, registration with all the PSUs is completed. A couple of companies have already audited. We would not declare the name as of now. They already approved us. And we already received one order from one of the Navratna PSUs.
CDSCO, that’s for medical domain, just like we have 13485 for MedTech. So under Make in India, Made in India, we need to have CDSCO as well. So unit in Vadodara, it’s CDSCO approved, where like we are making one cancer-detecting device, again, for one of the local internationals peers itself. And down the line, we have initiated working on AS9100, which will help us to enter more significantly into aerospace and defense sector. So probably when we’ll have a next call, by that time, AS9100 certification will be up and complete.
Mukesh Vasani — Chairman and Chief Executive Officer
Thank you, Sneh. Now your excitement, I would like to invite our CFO to share the results.
Nikita Shah — Chief Financial Officer
Good morning, everyone. It gives me an immense pleasure to display the kind of financial indicators for H1 ’25. Aimtron Electronics is now a zero-debt company as on 30th September 2024. The revenue for the half year stood at INR576.9 million with a rise of 33.90% year-on-year. The EBITDA stood at INR147 million with a rise of 30.70% year-on-year. And the net profit stood at INR111.8 million with a rise of 57.40% year-on-year. The net profit margin is 19.40%, adding 289 bps year-on-year.
The revenue breakdown…
Mukesh Vasani — Chairman and Chief Executive Officer
Yes. Let me just go there to next page. I think — yes, you can continue. But before that, I think there’s one huge — and this main news is also our order book is getting increased. In this little slowdown period, lot of CM, their order book getting down, but our order book as compared to last year is INR1,350 million. So it’s getting increased also, which shows good sign for us. Continue, Nikita, continue.
Nikita Shah — Chief Financial Officer
Yes. The revenue breakdown, we have a major generated industry-wise from industrial sector, which is 56.3%. Geographic-wise, the major we have from India itself, which is 51%. And segment-wise, we have the revenue from the major PCBA, that is 77.7%.
Mukesh Vasani — Chairman and Chief Executive Officer
We have more interest in a question-and-answer. So let’s go very quick.
Nikita Shah — Chief Financial Officer
Yes. So, as on 30th September 2024, we had the closing order book of INR13.50 million [Phonetic]. And moving to the profit and loss section now. The EBITDA stood margin that is in a 25.5%, and the net profit margin was 19.40%. The earnings per share was 5.48.
Now, moving to the balance sheet, as I said earlier, there is no long-term borrowings as on 30th September, and short-term borrowings has also reduced to 17 million now. Assets have grown, and even the inventories, we have 14.46 million. So we have a good assets ratio in our books.
Mukesh Vasani — Chairman and Chief Executive Officer
All right. I think Vinay Ji, we can jump on the question-and-answer.
Questions and Answers:
Operator
[Operator Instructions] Sir, in the chat box, we have the first question from Rohit Ahuja, who is asking if you can share a bit more information about the defense development that you mentioned on Slide number 28 with respect to engaging with clients on potential deals worth $10 million?
Mukesh Vasani
Let’s have Sneh jump on to this because…
Sneh Shah
Sure. So basically, the customer is based out of US, and we already have started development of plastics and a couple of other parts like linear actuators and all. And development is already initiated, and we are expecting closure in coming quarters. As of now, it will be prototype first. Once prototype is done, pilot batch and then from pilot batch, it will go to mass production. So that $10 million worth of split will be over the — like next two years, that is what we are expecting as of now. Plastics, as we already have initiated, we are expecting that closure probably before end of this financial year, where we’ll be closing on mass production orders.
Mukesh Vasani
Thank you.
Operator
The second question in the chat is from Praveen Sahai. Order book of 1.5 times FY ’24 is a significant improvement. Can you give details from which sector, industry or geographic location these orders are received and more from existing customers? Also, can you — so we’ve already spoken about the deal. So he just wants to understand a bit of a breakup about the order book.
Sneh Shah
Sure. So if you see in the presentation itself, we have mentioned. So industry sector, IoT sector is something that is contributing. And it’s a combination of both existing as well as new customers. And probably shifting towards PCBA from — PCBA, we are shifting more towards box build. So that is something that is increasing our top as well as bottom line.
Operator
[Operator Instructions] There’s another question from Mr. Suman Kumar. How much revenue can be expected with the current capacity and the work in progress in terms of capacity expansion?
Mukesh Vasani
Very, very interesting questions. And I think for one line, INR100 crore is the thumb rule for EMS industries if you have box build. So we have now five lines, you can do the mathematic.
Operator
Could you give a ballpark, sir, what revenue can we achieve from this capacity?
Sneh Shah
So, if we run on three shifts and the current capacity or in terms of capex that we already have invested, we can easily go up to INR450 crores to INR500 crores worth of range.
Operator
Okay. We take the next question from Mr. J.D. Tiwari [Phonetic]. Mr. Tiwari, you can go ahead.
J.D. Tiwari
Good morning. Yes, I am interested to know something about technical aspects of environmental and durability tests used for defense equipment. As I understand, Aimtron has completed the first stage and [Phonetic] the registration in aerospace. So my linked question is, whether the company is ready with all the climatic and durability test evaluation [Indecipherable] for air force and defense industry? So, that I would like to know if it is possible to tell.
Sneh Shah
Certainly. So that’s by default, like, rugged testing is something that is required when you go with any aerospace and defense kind of project. So we do have affiliation with a couple of third parties. I’m just giving you a layman language example. So ERDA, that’s one of the government body in Gujarat, who does research, laboratory testing and all, just an example, say, UL or you want a CE or something kind of IP or something, IP67 or something. So all that rugged testing and all that, yes, we do it. So we do have a design team like hardware, firmware, mechanical, who help us out, along with the test manufacturing team, an engineering team, where we can get things done on that basis.
J.D. Tiwari
Okay. Thank you very much. And one related question. So you are not planning to have your own facility in near future? You will be always dependent on that hired facility?
Mukesh Vasani
So I think there’s two answers for this question. One is, to develop full test lab is a huge setup, but we are [Speech Overlap] — yes, so we are UL-approved shop now. We just recently got UL approval. All the examination documentation is done, and we are waiting for the certification. And that’s why we didn’t blast today in this message. But we — Aimtron Electronics India facility is UL approved. We do see marking every day. But some of the tests we can do in-house, but we need to accredit by ourselves. So that’s why we have to go through different agencies.
J.D. Tiwari
Yes. Thank you very much. One more related question. All the exported — export you are doing to the US or European market, so those equipments are also tested in our Indian facility or they themselves are doing the testing?
Mukesh Vasani
So what we do, we don’t do — we do not do a full IP or end user equipment. So we do not have — that our responsibility. We do a part of that equipment. Let’s say, MRI machine, they make, a company, so we make just a control box for them. So that’s why we don’t need a complete full agency approval for that.
J.D. Tiwari
Thank you. Thank you very much.
Mukesh Vasani
Appreciate it. Thank you.
Operator
We’ll take the next question from Nikhil Chandak. Nikhil, you can go ahead.
Nikhil Chandak
Yes, hi. So two questions actually. So one is, in our last meeting, I remember you had explained about there also being a promoter entity or a group entity in the US. So I wanted to understand is that out of your total order book of INR130-odd crores, how much order book is from your US entity, which is — which I understand is not part of the listed entity? But how much order inflow legally or from an order-wise comes from the US entity?
And second, I understand there is a longer-term plan of gradually shifting the business from the US entity directly to the Indian entities. How far are we in that journey? So these are the two questions I had.
Mukesh Vasani
Thank you, Nikhil Ji. [Foreign Speech] Yes, you remember last questions and last answer. So I don’t have to explain too much. You can see our result. Also this time, we are even 51% just the local. And we are bringing more and more local business. That’s the number one. Number two, we are bringing a lot of out of Aimtron business over here. And that is the reason your — part of your second question is Sneh already mentioned that we opened an entity. This contract is sometimes two years, sometimes three years. It’s not easy to move to say, guys, give me order now in India. Otherwise, I’m going to go somewhere else. That’s not going to happen. Is that correct? And also in America, that gives us a credibility. So we cannot say that, hey, we are an Indian company now, and you give me order in India. But we created a company in Texas, and that company, we are looking at small M&A under the Texas company. And so, that’s where more and more business we are moving towards that company. So this drone business is going to come definitely in the Texas Aimtron Electronics LLC. So, that is we are creating right now. So all the blanket orders takes — see, we have only six months we finished. This is the first six months we finished. And we haven’t finished six months yet though. Our — after listing, we finished six months on 6th June. So it takes one year to two years to just move all the contract to a new company or a new entity. Other than that, inter-company, we are trying to minimize. And our goal is to get at least 10%. That’s our goal, and goal is 10%. But you won’t see this much also business in this Nikhil Ji. If you look at the — in detail, we don’t have inter-company business. We tried to — started explaining the customer, hey, why are you going to two different entities? Just go directly in Aimtron Electronics.
Nikhil Chandak
So to be sure, 10% is the orders which the US entity is giving to the Indian entity right now. Is that the right way to understand?
Mukesh Vasani
Approximately. Yes, approximately.
Nikhil Chandak
Approximately, okay. [Speech Overlap] And what would be the roughly size of the US entity? Say, which theoretically eventually can move to India, what would be the size?
Mukesh Vasani
Maybe we can take on another call, but a little bit in general. In general, it’s a — we are about INR900 crore worth of total because we have six, seven different companies. So — but definitely, that’s our end goal is, correct? That’s where we have more buckets, correct? India and Indian customers, Indian entity, Make in India, there’s a lot of benefit in India. So, that is end goal. But right now, it’s too early to say.
Nikhil Chandak
Understand.
Mukesh Vasani
Really appreciate speaking to you, Nikhil Ji.
Nikhil Chandak
Okay. Sure. Thank you so much.
Operator
Thanks Nikhil. We’ll take the next question from Anik Mitra [Phonetic]. Anik, you can go ahead.
Mukesh Vasani
We have got [Indecipherable], okay?
Operator
Yes. Anik Mitra, you can go ahead, please.
Anik Mitra
Am I audible?
Mukesh Vasani
Yes.
Operator
Yes.
Anik Mitra
Thanks for taking my question, sir. Sir, taking the cue from the previous participants’ question, I just wanted to understand what is the future of the unlisted US entity? Means, are you going to take over this particular entity going forward? Or what will be the future of that particular entity?
Mukesh Vasani
So, our main goal is to grow Aimtron Electronics India. That is the business and that is the business — because we all are investors, correct? I’m also indirectly an investor, correct? So we all are — see the big value in India. So that is our end goal. And for that end goal, we are finding out all the options from all the experts. So, as I said earlier also, we — what the easiest option is create a company in Texas. There is a tax-free state, and that’s where we funnel through business over there. We — whatever customer — because right now to acquire under Aimtron Electronics to inter-company also, we don’t have enough funds. And it’s too early to dilute something or do something and get the bigger company under a small company. So main goal as Sneh said, let’s get this revenue to INR500 crore. We have a lot of capacity over here. We established a world-class facility. When you come to Vadodara, you will love it. And let’s do this first, and then we start adding one another to the group also. But at least at the end, before I retire, maybe 5, 7, 10 years, I would like to bring everything under Aimtron Electronics India umbrella. I hope I answered your question, Anik.
Anik Mitra
Yes. Great.
Mukesh Vasani
Thank you, Anik Ji.
Anik Mitra
Yes. One more regarding your new SMT line, have you installed that particular line in Vadodara or in Bengaluru?
Mukesh Vasani
Yes. We’ve been waiting for this blasting news to the EMS company. But yes, [Foreign Speech].
Anik Mitra
Okay. So is it — I didn’t get it. Is it in Vadodara or…
Mukesh Vasani
It’s in Vadodara.
Anik Mitra
Okay. That was all from my side. Thank you so much.
Mukesh Vasani
Appreciate it. You all need to come out and visit our facility. I think you will see the difference.
Anik Mitra
Yes. I’ll be very happy to be a part of that.
Operator
We’ve got quite a few questions on the chat. Before that, we’ll take the question from Pratik Choudhary [Phonetic]. Pratik, you can go ahead.
Pratik Choudhary
Sir, there was this news on one of the articles, which said that you may be looking to purchase some land in Bengaluru aerospace region, some sort of an SEZ over there. So are we going ahead with that?
Mukesh Vasani
So we are looking both options, correct? So we are a small company. We are not like a big, giant people [Phonetic] ready. One day here and there, move other day. We are looking to see where is the infrastructure where we build up. Where is the — we are also thinking about where we have a semicon hub or EMS hub or something. So that’s why we’re looking at some options in Gujarat also. And in a couple of big contracts, we are also working on this. So just let’s stay tuned. Give us maybe six more months. Within six months, we accomplished good. Our team did wonderful job. Hopefully, in a couple more months, you will see something.
Pratik Choudhary
Okay. And in your presentation, you’ve spoken about backward integration and expansion. And there, you were mentioning about possible further expansion in the SMT capacity as well. So this expansion, are you talking about the current line, which is being put up, which is under trial production, or something more than this also?
Mukesh Vasani
Sneh, you want to take this question?
Sneh Shah
Sure. So, as of now, currently to what we stated, it’s specific to SMT that we have put it up. And yes, long term, as we already have stated, we may look forward for forward as well as backward integration. So that’s a long-term visibility that we are working on it. But as of now, we can state it that what we stated was specific to SMT lines to what we have as of now, which is a recent install.
Pratik Choudhary
Yes. Just final question on — again, from the presentation and your market expansion strategy. If you could touch upon what you have written under the industrial sector and the automotive — automobile sector, like under the industrial, you have written about exploiting opportunities in India’s electronic space, supported by PLI schemes and global investments and something on the automobile side as well. Since we already spoke about drone and defense, if you can touch upon these areas, industrial and automobile, what are our plans here?
Sneh Shah
Sure. So automobile, like we are already serving into that sector. This time, we got a breakthrough for one of the tier 1 companies. I would not name it, but tier 1 companies, we’ve got a breakthrough. And we have started working on their battery management systems and specific to EV sector. And industrial, we have like — if I bifurcate that, we have like myriad of segments under industrial as well, so just an example, say, Industry 4.0 or something related to their maintenance equipment or oil and gas-related something equipment on that front. So there are several like things that are affiliated with industrial sector as well.
Pratik Choudhary
Okay. This automotive company that you were speaking about, is this an Indian company or a global one?
Sneh Shah
Indian company with global routes.
Pratik Choudhary
Okay. And what — we will be sort of doing the whole box build and assembly of BMS for them?
Sneh Shah
PCBA as of now.
Mukesh Vasani
We’ll start with PCBA, and then, box build will be the end goal.
Sneh Shah
Future, yes.
Mukesh Vasani
I think that’s good thing about Aimtron. You will not see bigger picture and come smaller. We go small and go big. That’s our goal. It will take some time. It will take some time, but we don’t want to over-commit.
Pratik Choudhary
Great sir, thank you. I’ll get back in the queue. Thank you so much.
Mukesh Vasani
Really appreciate Pratik Ji and Vinay Ji.
Operator
So we have time till 12:00, right? We have one hour with us.
Mukesh Vasani
We have to actually head to the Expo also, and we have another con call.
Operator
So I’ll quickly take questions from the chat. There’s a question from Mr. Darshit Shah [Phonetic]. Our operating margins are high at 24%, 25% compared to other players. What are the specific reasons for that?
Mukesh Vasani
I think we did discuss this also last time. Our model is a little bit pick and choose model. We look at the customers. We look at those customers, they are looking at long-term strategy. We look at those customers, they take at least one year to just get us on board. That means their quality system, their longevity of the product, let’s say, 20 years, 10 years, 15 years, they — those are the customers we have. Even the same customer — I give an example, we have a customer, let’s say, Boeing, but we don’t build the mechanical or some kind of screws and nuts or bolts, but we build a heart and like it goes in a missile controller. So that’s kind of board we’re building. In the States, not here yet, but we’re going to go on this. So those kind of customer base we have, and that is the reason we have a high in our margin. And also — and last time, I gave an example of some Mercedes console and Mercedes [Indecipherable]. And you are — you look at customer, good customers, correct? You also look at — all the investor community also looks at good companies, correct? Same, we are looking good company to get good business so we can pass into the good — through the routes. So thank you.
Operator
There’s a question from Praveen Sahay. What are the contribution of reverse logistics repair and revenue? Is there anything like that?
Mukesh Vasani
We don’t have that much. We don’t do repair for other people. We do repair anything our customer requires because of their change in design or something. So we don’t have that much. We focus on the forward business. I don’t think there’s anything to add. Continue, yes.
Operator
Yes. There’s a question from Guneet Singh [Phonetic]. When does company expect to achieve full capacity utilization that is nearly INR400 crore revenue? And what kind of working capital will be required for the same?
Mukesh Vasani
Working capital is — we have a very good cash situation right now. I don’t think so there is just money going to be — as long as you maintain the EBITDA, money is going to be plow in, correct? So that’s what it is. If I do minus 1% EBITDA, then I have to get more working capital. So I don’t see that much requirement right now because our — overnight, not going to be INR400 crores. So right now, let’s see, we go 50% CAGR to 60% CAGR. So by the time, we need only additional 15%, 20% additional capacity need to infuse. The rest of money can plow back in.
Operator
Follow-up question from Guneet Singh is are all PCBAs manufactured in the US?
Mukesh Vasani
PCBA manufactured in the US, I did not follow the question, but we do full box build, correct? And US company is separate, and India company is separate. So maybe you can elaborate the question, or we can take it next time.
Operator
I think he is trying to ask is the company only into assembly or also in the manufacturing of PCB.
Mukesh Vasani
All are same infrastructure. In the US or in India, we do complete box build. We do not make the PC board though. Raw PC board, we do not make. We make PC board assembly, and we made — we do design, and we do full box build.
Operator
There’s a question from Mr. Shridhar Yadav [Phonetic]. He has raised hand. He would like to ask a question. Sridhar, you can go ahead.
Shridhar Yadav
Yes, sir. Am I audible?
Mukesh Vasani
Yes.
Shridhar Yadav
Thank you for the opportunity, and congratulation on good set of numbers. Sir, just a couple of housekeeping questions. Capex was supposed to be INR19-odd crores from IPO proceeds, and then cash balances are huge. When do we expect to incur complete capex?
Mukesh Vasani
Sneh, you want to take this?
Sneh Shah
Sure. So certainly, a couple of quarters down the line, that will be completed. As of now, a couple of things are in progress, but we might not be able to disclose everything. So, considering that, if you see just one example that we completed was installation of one SMT line. So, that capex part has already been taken care of. So down the line, six months, we’ll have more like deep roots into that.
Shridhar Yadav
So any tentative timeline you would want us to guide for full deployment of capex?
Sneh Shah
Probably next six months.
Shridhar Yadav
Okay. Sir, my next question is, what is the time for this complete order book execution of INR135-odd crores?
Mukesh Vasani
I think — let me just add here, Sneh. I know I’m going to give you a little vague answer, so that’s why. See, when you see our last book also, when you got INR650 crores depleted, we had new INR650 crores more. So this INR130 crores is going to be stake [Phonetic], always there. It’s going to increase the baseline always. You know what I’m saying? Let’s say, INR1,350 million right now we have. Next con call, we will have INR2,000 million. You know what I’m saying? Because how this EMS business works, you get order, and you get to keep adding more and more new blanket. So — but in general, any order is going to be only one-year contract maximum. So within, let’s say, for this INR135 crores, it will be done within one year. But then, another INR200 crores will be booked in next year or maybe more.
Shridhar Yadav
Okay. Understood, sir. So basically, the maximum time taken to complete the order would be less than 12 months. And sir, my…
Mukesh Vasani
That is the industry standard. Most of the people, except the defense — even defense also, they have a seven years contract or five years contract, but they give you one year’s visibility open order.
Shridhar Yadav
And sir, my last question would be on — so we have almost 40%, 45% of business coming from US. With new President elected, and like you mentioned that Aimtron Corporation is merely a funnel to have a presence in a state-free, and then this company would be — kind of take a major expansion, so do we — do you expect any impact per se on the business going forward from his policies or any other adverse implications on the business maybe in form of taxes or something like that?
Mukesh Vasani
Let me have this question answered by young man, Nirmal.
Nirmal Vasani
Actually, that’s a very good question, and this is one that Aimtron has spent a lot of time deliberating upon in terms of what our strategy would be once the election has concluded. And all of our research shows and all of the President-Elect’s speech and his policies show that this is going to be very favorable for Aimtron in the long term. He is targeting very specifically China and Europe for higher tariffs, and that means that for low-cost solutions, especially outside of the North America region, India becomes the only option with the population to actually support the demands that the Western countries have.0020So this is something that Aimtron feels is going to be very positive for the group as a whole and something that we feel will be even exceeding our expectations in terms of what our potential is. So, a very good question. Thank you for asking.
Shridhar Yadav
That’s all. I’ll come back in queue.
Mukesh Vasani
Sridhar, thank you so much. I have to leave. If you want, maybe Vinay Ji, you can continue with Nirmal and Sneh, but I got another call also, and we have to have another meeting with a customer. So — but everybody really enjoyed, and our journey doesn’t stop here. We just started journey, is that correct? You might have questions. You’re most welcome to ask, Vinay. You’re most welcome to ask us, most welcome to visit our facility either in here or USA or India, anywhere. Again, this is two separate business. We would like to go forward with India entity and more focus, and that is our goal. So with that said, I’m going to take your permission, Vinay Ji?
Operator
Sure, sir. We’ll continue the Q&A with Sneh and Nirmal.
Mukesh Vasani
Thank you so much. Really appreciate it.
Operator
We’ll take the follow-up question from Pratik Choudhary. Pratik, you can go ahead.
Pratik Choudhary
Hi, Sneh Ji. So, as per our guidance, there will be a very significant uptick in our revenues in the second half. So do you expect our EBITDA margins to improve slightly going forward as our scale of operations increases?
Sneh Shah
It is going to be in line to what we have stated. In terms of revenue, we already have stated 40%, 50% CAGR, and we are going to be in line with that. And in terms of bottom line as well, it is going to be intact to what we have been maintaining in the past couple of years. We would be in the same range down the line.
Pratik Choudhary
So would your PAT margins be upwards of 15% at the…
Sneh Shah
As of now, we can say it’s a sustainable to what we are doing as of now.
Pratik Choudhary
So current — at least the current margins will be sustainable, the one that you reported in the — just results that you uploaded? Would they be sustainable?
Sneh Shah
Certainly. It would be nearby to that percentage only.
Pratik Choudhary
Okay. And any other developments, which are taking place on maybe some sort of an M&A in the US or any other new products that we may be eyeing both in India and internationally that we haven’t spoken about yet?
Sneh Shah
I think with time, we’ll keep you posted. But as of now to what we disclosed, one of the deals that we are working on for defense drone industry around about $10 million worth of business in terms of dollar, $10 million, and probably executable into next two years of time frame.
Pratik Choudhary
Okay. Thank you, Sneh Ji. Thanks a lot.
Sneh Shah
Thank you.
Operator
Thank you. Just checking for any questions on the chat. Can you — there’s a question from Chinmay Nema [Phonetic]. Can you provide a rough breakdown of the INR100-odd crore of annual revenue on a product-wise basis? How scattered is it across products and how fungible are our lines?
Sneh Shah
So, if we see our investors presentation, we already have shared the bifurcation, where like, say, there are myriad of sectors like, say, IoT, industry.
Operator
Okay. There’s a question from Mr. Amit Jain [Phonetic]. Any plans to get into OSAT? Hello? Nirmal, would you like to answer that? I think Sneh…
Nirmal Vasani
We may have lost Sneh. He would be the better person to answer this question. So let me see if I can get in touch with him and see if he can reconnect.
Sneh Shah
Hello?
Operator
Yes. Hi, Sneh.
Sneh Shah
Yes. Sorry, like some Internet issues. So, sorry for the inconvenience. But various…
Operator
There’s a question from Amit Jain. Any plan to get into OSAT?
Sneh Shah
[Technical Issues] working on backward integration, as well as forward. So probably down the line, we will just see to it once we have something fruitful on that front.
Operator
Sure. There’s a question from Divyansh Gupta [Phonetic]. The auto contract that we have won, is it T1 level engagement or T2, T3? And what’s the scale of the engagement?
Sneh Shah
It’s always a combination of all like T1, T2 and T3. You can say roughly around about, say, 40%, 50% range approximately is in T1, and then partial combination of T2 and T3. But certainly, we can say it’s a combination of all three.
Operator
Okay. There’s a question from Suman Kumar [Phonetic]. India has been undergoing huge transformation as far as semiconductor landscape is concerned. What kind of opportunity does it hold for Aimtron from one to three-year perspective and longer?
Sneh Shah
So, certainly, we are working on some routes on that front. I think it will be very initial to say something as of now. But yes, again, if we’re going to enter, it’s again going to be a niche market segment, just like we have it for EMS. So it is going to be the same business model. So, that is something that we are looking forward because as of now to what everyone has chime [Phonetic] in, it’s kind of, again, a low-cost margin kind of business, which we don’t want to. So, as of now, we are in wait-and-watch mode because four companies are getting established at Gujarat location, where we already have our existence and presence and a good relationship over there with the administrative support and staff. But as of now, we would be — we are just seeing to it, and we are working on something where we can just see on how we can work out on high-end kind of work, even if we’re going to enter OSAT or ATMP or something kind of.
Operator
There’s a question from Venkatesh Nagaraj. Can you share about the skill availability for manufacturing devices and the typical qualification of employees that you’re hiring?
Sneh Shah
So, best part is, we have one called Aimtron Foundation, where Mukesh has a zeal of skill development. So we do train our youth in the nearby locations in and around Gujarat and a couple of them in Bangalore as well. So we do affiliation with them, and then we do train it with the help of our experienced trainers. A couple of them are IPC certified as well. Just an example, say, our production manager is IPC certified. Our quality manager is IPC certified. So we do have IPC certified team with us, who train them. And based on that, there are several parameters which are taken into consideration. And to give you a glimpse, last year, we stood second in terms of Soldering Championship conducted and first in Bangalore. So that’s the level of like our skills that we have in-house in terms of manpower.
Operator
[Operator Instructions] So since there are no further questions, we shall bring this con call to an end. Would you like to give any closing remarks before we end the call?
Sneh Shah
Nirmal?
Nirmal Vasani
I think this has been a very fruitful conversation with everyone. I do appreciate all of your patience in dealing with our fluctuating schedules as we are preparing for Electronica. But it was very nice meeting everyone, and I look forward to continuing the conversation at our next call. And very much thank you to the team for ensuring that this call is running smoothly. Thank you, everyone.
Operator
[Operator Closing Remarks]
Sneh Shah
Thank you, everyone.
Nikita Shah
Thank you, everyone.