BEW Engineering Ltd (NSE: BEWLTD) Q2 2025 Earnings Call dated Nov. 21, 2024
Corporate Participants:
Rohan Prakash Lade — Managing Director
Yogesh Khandu Darekar — Chief Financial Officer
Analysts:
Rishi Kothari — Analyst
Pradeep Rawat — Analyst
Siddharth — Analyst
Yogansh Jeswani — Analyst
Keshav Harlalka — Analyst
Harsh Shah — Analyst
Sahil Chopra — Analyst
Nitin Gandhi — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the H1 FY ’25 Earnings Conference Call of BEW Engineering Limited.
This conference call may contain forward-looking statements, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to present. [Operator Instructions]
At this time, I would like to hand the conference over to Mr. Rohan Prakash Lade, Managing Director from BEW Engineering. Thank you, and over to you, sir. Mr. Rohan, I would request you to unmute your line and speak please. Mr. Rohan? Mr. Rupesh sir? Mr. Rohan?
Rohan Prakash Lade — Managing Director
Hello?
Operator
Yes Mr. Rohan I would request you to give your opening remarks. Mr. Rohan, your line has been unmuted. Mr. Rohan sir, if you are on unmute, I would request you to please unmute your line and speak. Mr. Yogesh, would you…
Yogesh Khandu Darekar — Chief Financial Officer
Yes, I would just remind Mr. Rohan sir.
Operator
Okay. Ladies and gentlemen we will connect with Mr. Rohan and will get back to you. Ladies and gentlemen, we have Mr. Rohan sir connected with us. Sir please go ahead.
Rohan Prakash Lade — Managing Director
Hello?
Operator
Yes sir, you are audible. Please go ahead.
Rohan Prakash Lade — Managing Director
Yes. Should I start then.
Operator
Yes sir.
Rohan Prakash Lade — Managing Director
Okay fine. Hi. Hello, everyone. I welcome to this earnings conference call of BEW Limited for the first half concluded on September 30, 2024. It is a pleasure to have all of you here. I appreciate the presence we have today. I have Mr. Yogesh, who is our CFO; and our Investor Relations team from Adfactors PR, Mr. Rupesh is also there. Prior to this call, we have uploaded the updated presentation also. I believe everyone had the opportunity to go through it.
So just let me start by giving a brief introduction about our company and the industry and the recent developments, what we have done and some outlook in the future as well. So BEW has been making significant strides over the past few years. And we are being one of the leading designers and the manufacturers of equipments, which are especially used in pharmaceuticals, chemicals, specialty chemicals and other industries as well. And our main focus has always been remained on delivering the high-quality and innovative solutions to meet the needs of our customers everywhere.
Mainly, we were established in 2011. And BEW has grown into a recognized leader in the field, and we take pride in offering a wide range of product categories, including dryers, filters, mixers, blenders and have built a good reputation for excellence over the last 13 years.
In today’s time, BEW manufactures a complete range of filtration, mixing and drying equipment, which are used in pharmaceutical applications, in APIs, intermediates, agrochemicals, pesticides, in dyes, Food and Beverage industry as well. And about the products specifically, I would say we have a total range of around nine products, out of which six belongs to the drier category and rest of the filters and its portfolio, which each of them has a unique features, functions and specialty. And with respect to these products, we enjoy a market share of 40% overall. Our certification as an ASME U&R stamp manufacturer since 2016 underscores our commitment to quality and our 2021 listing on the NSE SME platform marked a major milestone in our growth trajectory. Today, our global footprint extends to regions such — as diverse as Japan, Germany, Israel, Thailand, Indonesia, USA, Italy and beyond our success as a result of the unwavering focus on quality, innovation and as well customer satisfaction.
Beginning with the Indian pharmaceutical industry, India has been a significant player in the global manufacturing market, recognized as the largest supplier of generic medicines and vaccines. The Indian pharma industry was valued at approximately $50 billion in ’23 and is projected to reach $130 billion by 2030. Notably, India accounts for 60% of the global vaccine production and holds a 20% share of total global pharmaceutical exports as well.
The Indian chemical industry is also a vital sector of the economy, contributing approximately 7% of the country’s gross domestic product and employees employing around 5 million people as well. As of 2022, India ranks as the sixth largest producer of chemicals globally and the third largest in Asia with a diverse portfolio that includes 80,000 different chemical products.
The industry encompasses various segments such as basic chemicals, specialty chemicals, agrochemicals, petrochemicals and fertilizers. Filters and drying equipment are critical in the pharmaceutical and the chemical sector, where stringent standards demand equipment that ensures product purity, safety as well. In the pharmaceutical industry, drying systems are essential in preparing materials that are safe, sterile and contamination-free. For chemical and specialty chemical applications, robust filtering solutions are needed to handle high-capacity processing while maintaining precision and quality.
Given the strict regulatory standards and expanding pharmaceuticals and chemical industry in India, the demand for specialized filters and dryer is anticipated to rise substantially. This gives us a significant growth opportunity for BEW as we focus on expanding our product range and catering to the evolving needs of these essential industries. I’m very happy to share that a significant milestone was achieved by our company, wherein we manufacture one of the world’s largest Agitated Nutsche Filter dryer with the drying capacity of having 32,000 liters volume. This ground breaking achievement highlights our engineering excellence and reinforces our position as one of the leaders in designing and manufacturing such advanced equipment. The development of this state-of-the-art ANF not only addresses the growing demand for high-capacity equipment in the chemical and pharmaceutical industry, but also underlines our commitment to the innovation and delivering customized solutions that meet the evolving needs of the customers.
Further on, I would like to say that our company has successfully issued bonus equity shares in the ratio of 3:1. Accordingly, three new fully paid up equity shares of INR10 each have been allotted for every one existing fully paid up equity share of 10% to eligible members. This bonus issue is a testament to our commitment to creating value for our shareholders and sharing the company’s success with our valued stakeholders.
I am delighted to share two significant milestones in our journey of growth. BEW has also secured an order worth INR25 crores from Maharashtra-based emerging company, Harman Finochem, which is a globally renowned company, and we are proud to announce another major achievement is an export order from Italy as well. These are a testament to our robust capabilities and delivering cutting-edge customized solutions, solutions that meet the highest standards of quality and precision. Collaborating with an esteemed client like Harman and expanding our footprint in the European market reaffirms our reputation as a trusted partner in the industry. These accomplishments add considerable strength to our order book, and we are confident that will pave the way for further opportunities and sustain the growth in the future.
BEW reached a remarkable milestone with the successful delivery of our ASME U stamp certified elevated pressure vessel filter to the United States — to the USA. This achievement symbolizes our decade of adherence to the rigorous standards set by the ASME, reflecting our steadfast commitment to engineering excellence. By consistently delivering safe, reliable and high-quality pressure equipment, we continue to strengthen our presence in global market and demonstrate our ability to meet the highest industry benchmarks as well.
Further on, I would like to address the consistently higher inventory levels in our operations. The specialized nature of our equipment requires raw materials of exceptional quality, many of which are important to meet the stringent global standards such as those required for the ASME certified products. These materials often have a very lengthy long delivery periods, lead times, making it essential for us to maintain a sufficient and good inventory to ensure uninterrupted production and timely delivery of some of the complex orders, which we get. Without this strategy, stockpiling of critical raw materials, we would be unable to execute or accept certain high-value orders. While these approaches impact our inventory levels, it is a deliberate strategy to uphold our commitment to quality, reliability and customer satisfaction.
In the terms of capacity expansion, yes, we are making significant progress with our new facility, which we expect to be operational in the next two months from now on. This expanded capacity will not only enhance our product capabilities, but also allow us to reduce the delivery time lines. Currently, our delivery cycles are around close to nine to 10 months, and we are committed to reducing this to approximately five to six months in the coming year.
Our current order book stands strong at INR90 crores, and we anticipate this to grow to INR150 crores by the end of FY ’25. The order book composition reflects our strength and customer demand with filter/dryer accounting for 70%, Paddle and Rotocone dryer to 20% and remaining of the equipment to 10% like mixers, blenders and some other products.
These are the key growth areas where BEW continues to innovate and meet high standards of quality and efficiency. And further to the export market, we are seeing a strong traction, especially in the African region, where we expect significant growth. Roughly 40% of the revenue is derived from repeat customers, a clear indicator of our product reliability and the value we provide. Our customer includes well-known pharmaceuticals and chemical industry such as Lupin, Piramal, SRF, UPL, Ralin to name a few. And this loyalty from established industry players reflects our commitment to delivering best-in-class solutions.
Further looking into the future, we anticipate continued growth and expansion. We are targeting an EBITDA margin of 20% to 22% — with the commissioning of the new facility and focusing strategy on reducing inventory cycles, we are confident that our operational efficiency will continue to improve by FY ’27, and we are targeting a revenue of INR300 crores, a goal which we are confident in achieving given our current momentum and market opportunities.
And now coming to the half yearly financial performance. The revenue from the half year was around INR51.1 crores in FY ’25 as against of INR65 crores in H1 FY ’24. Yes, a decrease of 22% was there due to the delayed deliveries caused by extreme rainfalls across key chemical industry regions in India. And although production remained on par with the last year and additionally, in line with our policy to avoid sales on credit, sales were down by approximately INR20 crores in September 2024. EBITDA including — EBITDA was at INR10.6 crores in H1 FY ’25 and as against INR8.19 crores in H1 FY ’24. So there you can see an increase of around 29.39%, primarily due to the improved raw material procurement, enabled by the equity funding to source material at more favorable prices.
EBITDA margin was at 20.75% as against 12.5%. Again, you can see an increase of 25 bps. And profit after tax stood at around INR6.02 crores in FY ’25 as compared to INR4.18 crores in FY ’24. So there also an increase of 44% is there. And the PAT margin was at 11.79% as against of 6.37%. So here also an increase of around 542 bps. So earnings per share stood at around INR18.43 in FY ’25 as compared to the INR28.52 — sorry, as compared to INR14.34. So there you can see an increase of INR28.52 [Phonetic] as well.
So that’s it from my end. Now I’m happy to open the floor for any questions you may have. Thank you.
Questions and Answers:
Operator
Thank you very much. [Operator Instructions] The first question is from the line of Rishi Kothari from Pi Square Investments. Please go ahead.
Rishi Kothari
Hello. Yes. Thank you so much for the opportunity. I had some specific questions afterwards. In terms of the new plant you said it will be operational in the next two months. What exactly revenue are we expecting from that plant?
Rohan Prakash Lade
Hello, your voice is not clear.
Rishi Kothari
Am I audible?
Rohan Prakash Lade
Yes, can you say again?
Rishi Kothari
Yes. In terms of the new plant that you said that will be operational in next two months, right? So what is the revenue expected from that plant in general?
Rohan Prakash Lade
Yes exactly, it’s the same revenue we are expecting, which is generated from the current facility. So current facility, we’ll be able to achieve close to around INR150 crores. With the new facility coming in, in another — by ’27, we expect to double it up.
Rishi Kothari
Okay. So next — another INR150 crores would be from the new additional facility?
Rohan Prakash Lade
Yes.
Rishi Kothari
Okay. And in terms of margin, if you say, in terms of PAT, we expected INR9 crores of PAT to be reported, but we reported just INR6 crores of PAT. What was the reason behind that? Of course, the top line decreased by 22% and because of the late in delivery. So any other reason for that?
Rohan Prakash Lade
Yes, I think we told you, I just spoke the same that because of the — mainly there was extreme rainfall with the key chemical industries. So the capex got delayed. And because of that, some — many of the equipments were not picked up by them. So that was the reason there was a decrease in the — of current six months. And also, we have kept a heavy inventory with respect to the future orders, but somehow that has also not been there in the current six months. So that’s why a little bit — you can see a decrease in that revenue.
Rishi Kothari
And we are expecting INR300 crores top line by FY ’27, right? In terms of margin, EBITDA and PAT margin would be how much are we expecting?
Rohan Prakash Lade
PAT margin, I told you, it is now at 11.75% or 11.79% as it was last year, it was around 6.3%. So you can see an increase there as well.
Rishi Kothari
So around — but on a two to three years guidance around 7.5%, right?
Rohan Prakash Lade
Yes, yes.
Rishi Kothari
And about EBITDA margin?
Rohan Prakash Lade
Sorry?
Rishi Kothari
EBITDA margin?
Rohan Prakash Lade
That will pretty much stay nearby only, right? Currently, it is around 20.75%. So maybe 21%, 22% you can go.
Rishi Kothari
21% to 22%?
Rohan Prakash Lade
Yes, yes, yes.
Rishi Kothari
Okay. And what about the QIP ratio? What exactly was the utility of that? How the QIP raised the money that we raised from QIP?
Rohan Prakash Lade
About — what about that?
Rishi Kothari
So what’s the current status of that? How are we deploying there?
Rohan Prakash Lade
See, whatever the money was raised, so some part of it — a major part of it went to pay off the creditors. So if you see the last year, there was a huge creditors which of around — close to around INR35 crores. So that has been now come down to INR10 crores. And also, we are now buying all the raw material on very immediate basis. Like earlier, we used to go on credit terms, we used to buy it on some 90 to 120 days delivery terms, payment terms, but now we’re immediately paying them off. So the money which has come in has gone there also. And some part of it — a little bit part of it has gone into the capex also. But majorly, it has gone to pay off the creditors and to buy the raw material. As I told, we have maintained a good stock of the Hastelloy, the nickel alloy material. So some part of it has also gone there also.
Rishi Kothari
Okay. But a little bit has also gone to the new plant that you have set up?
Rohan Prakash Lade
Yes, a little bit, a little bit, not too much.
Rishi Kothari
But in terms of the full — so after two months when the new plant will be operational, it will be run at a full capacity we are looking at?
Rohan Prakash Lade
Not completely full capacity, but right now, we are constructing some three bays over there. So at least one bay will be operational. And the second bay also will be operational by another three, four months. So maybe I think in another six to eight months, it will be fully operational.
Rishi Kothari
Six to eight months?
Rohan Prakash Lade
Yes.
Rishi Kothari
And on a yearly basis, we are expecting — if all it is fully operational, we are expecting INR150 crores of revenue from that plant?
Rohan Prakash Lade
By ’27, yes.
Rishi Kothari
By ’27?
Rohan Prakash Lade
Yes, by FY ’27.
Rishi Kothari
Okay. Great. Thank you so much for the answers. I’ll join back the queue.
Operator
Thank you. The next question is from the line of Pradeep Rawat from Yogya Capital. Please go ahead.
Pradeep Rawat
Yes. Good evening and thank you for the opportunity. So can you explain why our inventory level is more than our yearly top line run rate?
Rohan Prakash Lade
See, I think as I spoke earlier also, mainly the inventories are higher because some of our orders were not delivered also in the — by September and as due to heavy rainfall in some of the regions and the chemical industries, so a lot of equipment were not able to deliver. And also, we are maintaining a used stock of some high-grade nickel alloys as we are expecting a lot of orders also. But — and to cater those orders, we require those stocks. So that stock has also — you will see those stock in the inventory as well. And further we’re expecting a good amount of orders from Bangladesh. But unfortunately, whatever happened there, so that has been currently been held up there now. So as of now, I don’t see it kicking off that fast in that region. So there also, we had plans because it was almost under approval stage. But what has happened. So that has been now been kept on hold at that part. So because of that also, we had piled up a little bit good inventory so that we have been in position to cater those orders. So mainly due to the — what are the issues with the rainfall and had in the chemical sector and the equipments were not picked up. And as I told you, with respect to the Bangladesh region, what we — so that are the two reasons, the inventory has gone up a little bit higher. And also our delivery lines were on the higher side. So that was the reason that the inventory on the higher side.
Pradeep Rawat
Yes, sir. So can you bifurcate the inventory in respect to raw material, work in progress, and finished goods for the September ending?
Rohan Prakash Lade
Exactly, I don’t have the figures in front of me right now. But later on, if you reach, I can let you know. But more, if you say, I think just to give a rough idea, I think the inventory is there, 60% is, I would say, the 60% to 70% is the raw materials, which are there, which is the inventory. And then some of part is the products which are almost on the verge of completion and some are complete like that.
Pradeep Rawat
Okay. So for FY ’24 ending, our raw materials in inventory were at INR15 crores. So at that time, inventory was something around INR100 crores — INR90 crores. So it was something around 15%, 20%, which has risen to 60%, 70%. Is that understanding correct?
Rohan Prakash Lade
Yes. At that time, it was like that, yes.
Pradeep Rawat
Okay. So currently, our raw material inventory is something around INR75 crores to INR80 crores?
Rohan Prakash Lade
Yes. As I told you, inventory, we had piled up the raw material with respect to some orders coming in. And as I told you about the Bangladesh also. But unfortunately, that has not come in. But anyway, this material is something like it is — it can be used for the coming orders. So it is not that it is going to go — it is going to be wasted like that. So definitely, the Hastelloy orders, the nickel alloy orders will be coming in from other customers as well. So that will help us to later on reduce the inventory by the end of FY ’26 financial year.
Pradeep Rawat
Yes, sir, I understood that. So what I’m understanding is out of INR133 crores of inventory, INR70 crores, INR80 crores is raw material. And if I assume the rest is semi-finished goods, so it is almost lesser than our FY ’24 ending semi-finished inventory, which was INR90 crores.
Rohan Prakash Lade
In the last year, basically, there was a lot of backlog which we had. So that also was the reason if you see the differences, we will be able to see the difference. But this year coming in this year, there was not a huge backlog of orders, but we had piled up the inventories basically, inventory that is the raw material, I’m saying it.
Pradeep Rawat
Okay. Okay. So I’ll move to the next question. So we are doing a capex for 2,700 square meter facility and our current facility is of 4,500 square meters. So I just wanted to understand that given the fact that our current facility has larger build-up area than our new facility, how can we be able to generate similar amount of top line on that?
Rohan Prakash Lade
No, it’s not a larger area. It’s pretty much equivalent, I would say. In fact, the current area is a little bit bigger. That area is a little bit smaller if you compare it. It’s not that bigger. And what did you ask further on, sorry.
Pradeep Rawat
So in our presentation, there is written that our main facility is of 4,500 square meter and our facility is of 2,700 square meters. So I just wanted to understand that you are saying that our current facility can generate INR150 crores of top line?
Rohan Prakash Lade
Yes.
Pradeep Rawat
Facility would generate the similar amount of top line. So just wanted to understand how are we…
Rohan Prakash Lade
But it will be by 2027, by not the next year.
Pradeep Rawat
Yes. So I just wanted to know how are we doing much more from our new facility?
Rohan Prakash Lade
Right now, we are having higher deliveries. So we had to let go a lot of orders also because of the deliveries, many of the orders, we were not able to grab those orders. So once that comes down, we will be in position to grab more and more orders with respect to our products. And not only just our products, but now we are approaching to customers in a very different way, a different manner. Basically, earlier, whenever we used to approach to the customers, we used to target only a few set of equipments like the filters or dryers. But now like suppose there are — there is a complete project is going on and there are multiple equipments, which are very small — very small in volumes, like small in prices, but it helps to get you a good package. So we have started approaching customers with — to give us a complete package. So that will help us to generate more and more revenue. Like earlier, we were not targeting reactors and all these things. But now we have started getting orders for those also. Even mixers, blenders, we were doing it very less. So that also now we have started to get more and more orders.
So considering all this, that will help us to achieve that revenue. And also, we are doing — we have made some developments like we are trying to do some continuous dryer development equipment also. So wherein last year, we supplied one continuous dryer also to one agro-based customer. So that is under trials. And we are now currently developing one more continuous dryer for a pharma company. So all these developments, including — and as I told other equipments like reactors, mixers, blenders. So as a totality, yes, that will help us to achieve that revenues.
Pradeep Rawat
Okay. Understood. I’ll join back the queue. Thank you sir.
Rohan Prakash Lade
Thank you.
Operator
Thank you. The next question is from the line of Siddharth from Dash [Phonetic] Capital. Please go ahead.
Siddharth
Hi sir. Good evening. Thank you for the opportunity.
Rohan Prakash Lade
Hi. Good evening.
Siddharth
I just wanted to — hi. Earlier, we had mentioned that we will not be building up inventory anymore because we’ve raised funds. And from those funds, we’ll buy the inventory when we get the order. So I fail to understand why are we building up inventory again for the raw materials?
Rohan Prakash Lade
See inventory, we have — see, there are [Technical Issues] materials. I would just explain you, like there is stainless steel and then there is nickel alloys. Stainless steel, we are not piling up the inventory. We only keep the inventory with respect to the order book only for the stainless steel because it is easily available also. And also the fluctuation — the raw material prices fluctuation is not that huge, which we can easily manage out. But when it comes to nickel alloys, nickel alloys is something which is not manufactured in India anywhere, that we have to import it. And whenever we have the chance to grab those orders, so we have to be very competitive in pricing because our competitors are also doing the same. They are also stocking up the inventory to get a good price from the mill. And because of that, they are able to grab those orders. So suppose if we are not able to do that, we won’t be L1 in front of the customer when it comes to the pricing. So to get those orders, we had to pile up some — the Hastelloys, nickel alloys that had been Hastelloys, especially, nickel alloy inventory, which we have to import by paying completely 100% advance.
So that is something — and to pile up that inventory, it almost takes us six months. Like once we place an order, it will take six months to come to us. So if I have that raw material with me, I can grab those orders. And not only that, just to have an idea like simple, like a simple equipment, if a stainless steel equipment is costing you INR50 lakhs, the similar equipment when I manufacture it in nickel alloy, it will cost you INR2 crores. So you just see the difference. So what this nickel alloy equipment does, it will not only generate a good revenue, but also a better margin because you are buying the raw material directly from the mill.
So that helps us to get a good margin also. But in doing all this, we have to maintain a stock, because if we maintain a stock, then only we are in a position to be able to give a good price to the customer and then only he will be interested to place this order. That’s why the inventories are something which we have to maintain.
Siddharth
Okay. So then what will be your plan going forward as to in FY ’26 and ’27?
Rohan Prakash Lade
Definitely, we are targeting such sort of equipment, such sort of materials where — and this is a raw material. This is a raw material, nickel alloy. So nickel alloy can be used in any type of equipment, whether it is a reactor, it’s a mixer, a blender or a filter or a dryer, any of this or simple equipment like tanks, vessels, anything. So right now, we are approaching all our customers to get this all sort of equipment from us.
And how we are doing it? Yes, we are doing it by giving them a good price, very attractive price. So that then only they will be — they will show the interest to us. And also, we have to show them the capacity also that, yes, we — even though you place a big order, we are in position to cater those orders. So that because of it, new players is also coming in. So that will help us to grab those more orders.
Right now, the order — the one which I told you in my speech, Harman Finochem. We took a big order from him. So because we were able to cater that order and we were able to produce that order with whatever capacity we have, that’s why we got orders for reactors, for filters, for dryers in complete. So that is how we are approaching all of our customers now.
Siddharth
So what is the quantum then of the Hastelloy inventory on the books?
Rohan Prakash Lade
This year, it is a bit like — if you say last year, last year, I think it was almost 50-50, I would say, last year. 50% revenue came from Hastelloy order. This year, it has a little bit dipped down in six months. But yes, we are expecting to go it up in the coming months.
Siddharth
No sir, I was trying to ask about the INR133 crores inventory that we have, how much of it is Hastelloy currently?
Rohan Prakash Lade
Hastelloy, I will have to check exactly the figure wise, because normally, I keep it in mind with respect to the volumes which I have. Maybe somewhat around, I guess INR60 crores to INR70 crores or I think INR70 crores must be Hastelloy.
Siddharth
It’s 50%…
Rohan Prakash Lade
Yeah, yeah. Because if you keep that, then only you’ll able to get those orders also. So 50% has to be of that only.
Siddharth
And in terms of our top-line, since you are mentioning that deliveries have picked up. So what kind of…
Rohan Prakash Lade
Deliveries?
Siddharth
Deliveries have picked up in the past one — so what kind of growth are we projecting for this year and FY ’26? FY ’27, you mentioned INR300 crores number. So this year second half and FY ’26, what kind of revenues are you projecting?
Rohan Prakash Lade
Revenues, it will be pretty much the same. Obviously, the turnover will increase. But again, these products have a fixed margin. Like beyond 20%, you can’t go. Yeah, in exports, you have a little bit higher margins. But in domestic market, this is what the highest margin you can get. Maybe in some products, I can get a better margin where the competition is less, but products like filter dryer, paddle dryer, they will have pretty much the same margins.
Siddharth
So one last question. Since you mentioned that you’re paying off your creditors and now buying with cash rather than taking raw material on credit. So why hasn’t our gross margin improved further from second half of last year and the first half of this year? Are we not getting any pricing benefits because it has again come down?
Rohan Prakash Lade
Yeah, yeah. See, the price benefits are not that big that it can show you a good difference. It is a little because, as I told you, stainless steel products we are buying — earlier, we used to buy on credit terms. So it is not that costly raw material. So — but yes, buying it on immediate term helps us to little bit — improve our margin a little bit, but not too much. But again, we have piled up the inventory also. So that has also — because again, that is attracting some interest for us, the inventory. So that has also not — you won’t be able to see that big jump in the margin.
Siddharth
So long-term sustainable inventory levels should be close to in terms of days, if you could tell us in terms — for FY ’26?
Rohan Prakash Lade
See, once our delivery lines come down, like we are trying to bring it down more further, like say, four to five months. So obviously, the inventory cycle should not be more than I think 120 days, should not be 120 days.
Siddharth
So currently, they’re extremely high. Okay, sir.
Rohan Prakash Lade
Yeah, yeah. But once we bring down the deliveries, then obviously that inventory is going to rotate over the year. Right now what is happening, we’re hardly able to rotate it twice a year, hardly, hardly. Not even twice, just 1.5 times a year. But with the delivery lines coming in, we’ll be able to rotate it at least twice a year. So that will bring down the inventory cycles.
Operator
Thank you. The next question is from the line of Yogesh [Phonetic] from Mittal Analytics. Please go ahead.
Yogansh Jeswani
Hi, sir. Am I audible?
Operator
Yes, sir, you are.
Rohan Prakash Lade
Yes, yes.
Yogansh Jeswani
Rohan sir, a couple of questions. So you did touch upon the usage of fund raise. But if you could also just help us understand, given the size of the fund raise was quite big and some of it is used in increasing the raw material, the Hastelloy that you mentioned. But what are the other aspects to this fund raise that we have done at our company level in terms of maybe capacity building, capability building that will help us grow the business to the INR300 crores top-line that we are anticipating for FY ’27?
Rohan Prakash Lade
Yeah. The fund raise, which came in, mainly, as I told earlier also, we did pay off the creditors majorly. Earlier, it was in the range of somewhere around 35%, now it has come down under 10%. So major part has gone over there mainly. So — and also some part has gone into the capex also. And again, further, we are trying to see how fast we can improve our deliveries by — so the capex, which we are trying to do is by bringing in some automation also, like automation in our manufacturing, like automation in cutting, welding, which will help us to improve our quality also and to bring down the delivery — production time also. So that — so there also the capex will go on. And with the growth which we are targeting, again, we would have to increase our team also simultaneously so that we’re able to cater those orders and we’ll be able to deliver on time as well.
Yogansh Jeswani
Got it. So sir, I think most of the money has come in, only now the warrant money is left, some — a few INR10 crores, INR15 crores I think. So with that money, will you also again use for some inventory or will that be completely used in capex and capability?
Rohan Prakash Lade
No, that mostly will be used in capex and capability, not inventories. For inventories, we have the incoming payment from our customers. So from there, we can do that.
Yogansh Jeswani
Okay. That makes sense. So sir, on the margin front, if we see, this quarter, the margins have been quite good. Despite a degrowth, we did an increase in margins. And that you were explaining is because of the better RM sourcing that we could do. So if you could help us break this benefit in margin in two parts. One is, how much of that margin improvement is because of the credit — better credit terms that we are buying at? And how much of it is due to inventory gain? Because like you said, Hastelloy order placement and fulfillment takes six months. So I’m quite sure there might be some bit of inventory gains in this commodity as well. So is there a ballpark…
Rohan Prakash Lade
I would say, it is mostly because of the Hastelloy inventory because the pricing comes down very, very, very much down when you stock the Hastelloy inventory. And obviously, a little bit — and the other percentage would be from the credit buying to immediate buying. But because the Hastelloy — why I told because like earlier when we used to buy Hastelloy, it was costing somewhere around INR5,000 per kg. And now when we stock it up, it is almost 50% down. So that helps us a lot to improve the margins also.
Yogansh Jeswani
Okay. But in terms of the spot prices of Hastelloy, how has that trend been for last one year?
Rohan Prakash Lade
See, last year, it was very good. Like last year, the prices were on the higher side. Now it has got a little bit dip, but because of that — because when the last year, it was higher, we had stocked up a very good raw material at a little bit lower price. So now whatever last year we saw with respect to that forecast, we went on for this year buying also and we have stocked it up. But this year, there has been a little bit dip because of the less projects that are going on the floor. But as I told, it will — we are seeing a bit slowly, slowly rise in that now as well.
Yogansh Jeswani
Okay, okay. But you’re confident of maintaining your 20% EBITDA margins?
Rohan Prakash Lade
Yes, yes. We are targeting now good orders also. Like we are not trying to work on a very extremely low margins as well. Sometimes we are letting go of very low margin orders as well.
Operator
Sorry to interrupt you, sir. I would request you to rejoin the queue for your follow-up question. Thank you. The next question is from the line of Keshav from BHH Securities Private Limited. Please go ahead.
Keshav Harlalka
Hi. Thank you so much for giving me the opportunity to ask question. So my first question is, why is there flatness in execution of new plant set-up? We’ve raised INR27 crores in July 2023 with a further raise of INR3.75 crores in October 2023. So why has there been so much of flatness? You’re still executing on setting up the new plant. So it’s been 15 months since the first fund raise. So why you’re still setting it up? I was expecting that within six months of the fund raise, the new plant would be up and running.
Yogesh Khandu Darekar
See, earlier, when we did buy the new land, so it’s a neighboring land. We have a common wall between the neighboring land and the existing plant. So we were trying to amalgamate both the plants so that it will help us to have a very bigger space for working. So some of the months went over there. Unfortunately, we were — but we were not able to get that going from the MIDC and we were not able to get those approvals and it was going — costing us hugely high — on the higher side. So we dropped that idea.
So — but in that two, three months were went off. And later on, then we started the construction over there. But again, after that — after a few months, as you see, the rainy season came in. So because of the rainy season, we were hardly able to do the work, because during rainy season, you’re not able to work over there because the shed was not constructed, the flooring was going on, the main pillar work was going on. So during rainy season, obviously, no one has to — no can work on that part. So hardly — so whatever workforce was there, it was hardly operating up to 20%, 30% only. So — and now just — even now also, if you see like till last month, there was — rain was going on. So still, we are not able to do the proper work. Because of all that, these delays have taken place for starting the new plant.
Keshav Harlalka
Got it, sir. So can you — when can you commit to us that when will the new plant will be fully up and ready, sir?
Yogesh Khandu Darekar
Next month, at least first day we are planning to start-up next month. And I think, as I told you, in another five, six months, we should see it completely 100% running.
Keshav Harlalka
So we should be able to get the full benefit of the plant expansion and you’ll be in a position to take new orders for FY ’25-’26? Am I — is that a safe statement to make?
Yogesh Khandu Darekar
Yes, yes, correct.
Keshav Harlalka
Got it. Now for the current year, what kind of top-line are you projecting versus what we did last year?
Yogesh Khandu Darekar
I would say pretty much the same we are expecting to do.
Keshav Harlalka
You’re not expecting a growth because Lade sir has guided us on a growth of 20% to 30% on top-line and…
Yogesh Khandu Darekar
No, 22% you can go. See, these products are not having that bigger margins. See, he was saying that because he was expecting a very big order from Bangladesh when he had said last year. But whatever — because he was the one who was in touch with our Bangladesh customers. And that Bangladesh, it was a completely government approved project and it was very big, very big project. But what has happened because of that, it has — now we can’t think of that as of now at least. So because of that, he might have said at that time. But currently, with whatever orders we are seeing in future and whatever order projects we are seeing in the future, I would say, it will be 22% only.
Keshav Harlalka
I got it. Now my second question is, sir, our results came out on 14th of November and 15 November was a bank holiday, 16 November was a Saturday, 17 November was a Sunday, 18 November at 4:30 PM we came out with the investor presentation. So why is there a gap of four days between giving results and giving us the investor presentation because there’s a drop of 30% in top-line? On Monday, when the investor presentation came out at 4:30 PM, the price had collapsed by 20%. So 270 BW is 217 only sellers lower circuit because we have not bothered to give the investor presentation. We should have explained to the investors there is firefighting which needs to be done that the deliveries have got delayed by one month because of rain. This statement has come out in the investor presentation only on Monday evening. So why is there a gap of four days in giving the investor presentation when you have come out with the earnings on 14 November. Don’t you think the investor presentation should be released to all the investors on the same day as you are releasing earnings?
Rohan Prakash Lade
See, 15, 16, 17 it’s a weekend, 15 was a holiday, it was Guru Nanak Jayanti, so we were not working. Again, 16, 17 is a weekend. So generally on weekend, our CFOs and other things, they were not here. So unfortunately, we were not in position to declare other thing on the same day itself. So that’s why it was done on Monday.
Operator
Sorry to interrupt, Mr. Keshav. I would request you to rejoin the queue for your follow-up question. Thank you. The next question is from the line of Harsh Shah from Sumaria International LLP. Please go ahead.
Harsh Shah
Hello, sir. Am I audible?
Operator
Yes, sir.
Rohan Prakash Lade
Yes, yes.
Harsh Shah
Yeah. Thank you for the opportunity. So what I wanted to understand is that in the last quarter, there is — the steel prices were very volatile. So I wanted to know…
Rohan Prakash Lade
Sorry, what?
Harsh Shah
The steel prices were volatile.
Rohan Prakash Lade
Steel prices were volatile, yes.
Harsh Shah
Yeah. So I wanted to know, like, do we face any impact when like stainless steel prices are like they crash so much like 10%, 20% in a quarter? What is the impact do we face? And like is there an advantage that we have or how is it, sir?
Rohan Prakash Lade
See, the stainless steel prices, I would say, even though they are volatile, the fluctuation is not that much on the downside like to — the fluctuation will be somewhat around INR10, INR10 to INR15 only. So when it comes to stainless steel, we always consider that much of fluctuation whenever we do our costings. So that doesn’t create a big issue for us. But yes, whenever we go for Hastelloy orders, we have to be sure that — because the Hastelloy fluctuation is very huge.
So saying that that is the reason we have stocked the raw material because we were expecting that there will be the pricing issue when the prices will go down. So that’s why when we saw the prices are going down, we — that time itself, we booked the raw material expecting that — and like that, there is a graph which we see for Hastelloy raw material, because over the years, we have seen how much low it has gone and how much high it has gone.
So with respect to that, whenever we see, we said, yes, it is on the pretty much on the lower side, that is the time we got to stock up the inventory. So that even though in further — with that pricing, we expect that it won’t go further down. And even it goes, it will be a little bit. But if it rises, we’ll be on the — it will be on the plus side for us because we have a good stock inventory at lower prices.
Harsh Shah
Right, okay. So my second question is related to the revenue for this year. So sir, in the investor presentation you have mentioned that — and you also mentioned right now that INR20 crores of orders were delayed in the month of September. So are we seeing deliveries for — like have you already delivered those INR20 crores worth of orders in October and November now?
Rohan Prakash Lade
Yeah, almost some are delivered. I think around INR10 crores to INR15 crores are delivered, some are pending because some of the customers [Technical Issue]. So they have not still picked up.
Harsh Shah
Right, okay. And sir, we had — like on 30 September, we had an order book of INR90 crores, right? So what is the percentage of execution that we can see from this unexecuted order book in the second half of the year?
Rohan Prakash Lade
See, we are targeting somewhere to reach near by to INR150 crores by the end of March.
Harsh Shah
Okay, okay. Like despite the delay and the Bangladesh issue, are we still confident of reaching INR150 crores?
Rohan Prakash Lade
Yeah, because we have the order book and we are seeing that we can reach to that position mostly by March.
Harsh Shah
Okay, okay. Thank you, sir. Thank you.
Operator
Thank you. The next question is from the line of Sahil Chopra from KIFS Trade Capital. Please go ahead.
Sahil Chopra
Yeah, hi. So my question has been answered. Thank you.
Operator
Thank you. The next question is from the line of Nitin Gandhi from Tejal Nitin Gandhi. Please go ahead.
Nitin Gandhi
Yeah, hi. Hastelloy was how much percentage of inventory in March ’24 out of INR107 crores stock?
Rohan Prakash Lade
Hastelloy?
Nitin Gandhi
Yeah.
Rohan Prakash Lade
That time — let me check the figures. Exactly I don’t remember the figures by the March ’24. But percentage-wise, I would say, it was a little bit less than what it is now. Maybe somewhat I think it was 35% to 40% at that time.
Nitin Gandhi
Okay. Generally, what percentage of RM is Hastelloy?
Rohan Prakash Lade
Sorry, what?
Nitin Gandhi
Percentage of raw material is Hastelloy? Hastelloy is how much percentage of our total raw material?
Rohan Prakash Lade
Total raw material. It’s not like that. See, we make equipments in stainless steel also and we make equipments in Hastelloy also.
Nitin Gandhi
Correct.
Rohan Prakash Lade
So as I told last year, it was a 50-50 because we had a good set of orders of Hastelloy last year. And now in this six months, it is a little bit less. So in this six months, what we did is I think it is around 70-30. Like 70 was stainless steel and 30 was Hastelloy.
Nitin Gandhi
No, no, that’s okay. I’m saying within 50% of the sales when you use Hastelloy, what is the total percentage of RM consumed in that order? That’s what I’m trying to understand.
Rohan Prakash Lade
Any equipment you are saying, any manufacturer?
Nitin Gandhi
Yeah, the equipment where you — it was a Hastelloy.
Rohan Prakash Lade
Means percentage of Hastelloy it will be used you are saying in the industry? See, in the industry, Hastelloy it is like — Hastelloy is generally used where a lot of corrosive products are there in the industry. So even in pharma or in chemical sector, you will see that this Hastelloy has been used, because earlier, there were different solutions instead of doing the Hastelloy. Like people used to — like customers used to go with different sort of coatings and all these things.
But now the FDA norm is getting more and more stringent, so all those things are not accepted. And also FDA has put a certain timelines for the equipments. I like to give an example, once the four, five years are gone by for an equipment, FDA doesn’t accept that equipment. So they will ask us to again revamp the equipment or go for a new one. So the Hastelloy has also got equally good share as you compare it with the stainless steel raw materials.
Nitin Gandhi
Considering the order book, how much time it will take, next one year or a little more? Because per month consumption will be somewhere around INR7 crores to INR10 crores only, right?
Rohan Prakash Lade
See, by the March — as I told you, by March, we are targeting close to INR150 crores. And we have a good order book in hand also…
Nitin Gandhi
And out of INR150 crores, 30% is Hastelloy, again the 30% will…
Rohan Prakash Lade
No, out of INR150 crores — not out of INR150 crores, till now for six months it is 30%, it can go up, it can become 50-50 also by the end of March.
Nitin Gandhi
Okay. So even if it’s a INR75 crores order, how much Hastelloy will be consuming out of INR70 crores existing with us?
Rohan Prakash Lade
It’s very difficult to say because again it depends on customer requirements. If the more orders are coming of Hastelloy, it can be completely consumed. If it is less, it will be less. So to put in a percentage is very difficult right now, but I would say 50-50, I would say, right now.
Nitin Gandhi
See, I’m just doing a reverse mathematics. Even if it’s assuming INR75 crores revenue where 20% is EBITDA, so INR60 crores is the maximum consumption which can come. And obviously, 100% RM is not Hastelloy,right? So in best case scenario, you won’t be able to use more than 35%, 40%?
Rohan Prakash Lade
Yes, yes.
Nitin Gandhi
Right. So obviously, this will extend till at least September ’25.
Rohan Prakash Lade
Yes.
Nitin Gandhi
Right. Okay. So that’s what we are just trying to understand how much time you need to digest that.
Rohan Prakash Lade
Okay, okay.
Nitin Gandhi
Okay. Now coming to the second question, when you raise this QIP, obviously, you would have certain usage of application of funds. Can you share that when you raised last INR55 crores, what was the application of funds which you provided at that time in QIP?
Rohan Prakash Lade
That last INR55 crores, when we raised those INR55 crores, you are saying?
Nitin Gandhi
Yeah.
Rohan Prakash Lade
I think we did that last year, as I told you, some part — like the land purchase was done for the neighboring land. So I think 50% of what’s paid — 50% land acquisition was done through this — through the INR55 crores, which we came in. So some part was used there also and some little bit part was to pay off the creditors till the March end period.
Nitin Gandhi
Okay. And what’s going to be the usage of funds for warrants now? Are there any…
Rohan Prakash Lade
Usage of funds?
Nitin Gandhi
Which you are going to use — this INR11 crores, which are yet to come from the warrants.
Rohan Prakash Lade
Mostly, whatever funds are there, they will be — we will be using for the capex only. It’s not for the creditors or for the inventory pilings.
Nitin Gandhi
What is the short-term borrowing cost?
Rohan Prakash Lade
Sorry?
Nitin Gandhi
What is the cost of borrowing, short-term and long-term?
Rohan Prakash Lade
Short-term, that is very difficult to put in a figure right now for me exactly.
Nitin Gandhi
Around 12% or 9% or…
Rohan Prakash Lade
No. It will be close to 9%, 9% to 10% in between that.
Nitin Gandhi
And how is it? It’s coming from the banks?
Rohan Prakash Lade
I’m sorry, how is…
Nitin Gandhi
How is — who is the lender? Is it from banks or it’s private promoters?
Rohan Prakash Lade
From — mostly from bank.
Nitin Gandhi
Okay, fine. All the best. Thank you very much.
Operator
Thank you. The next follow-up question is from the line of Rishi Kothari from Pi Square Investments. Please go ahead.
Rishi Kothari
Yeah, hi. Thank you so much for the opportunity again. What exactly was this Bangladesh situation that you were going to have orders were canceled sort of thing? Can you explain more on that part?
Rohan Prakash Lade
Bangladesh what? The orders which we were expecting you’re saying?
Rishi Kothari
Yeah, but there is some delay or some sort of…
Rohan Prakash Lade
Yeah, it was a completely government type of project, because if you know, Bangladesh was putting up a complete pharma zone in one of their pharma cities. So even government had also invested heavily, but whatever has happened, so because of that, nothing went on ahead with that. But it was very good coming up because we were in touch with one of the consultants over there. And in fact, my father had also visited two, three times for that particular government project as well. And it was going to go on for full — at least complete two years. But unfortunately, that has not taken up now.
Rishi Kothari
So we are — for the next year or so, we are not expecting anything on that front or more or less the project is…
Rohan Prakash Lade
Not at least from that region, not at least from that region.
Rishi Kothari
Okay. But still, we are expecting FY ’27…
Rohan Prakash Lade
Yeah, yeah, because we are targeting other geographies. Like as I told, Africa is — Africa has been a good — has got a good scope to have some exports over there. And not only that, but also some neighboring Asian countries like Malaysia, Thailand and also some [Technical Issue] as well. So we are expecting to have a good set of orders from all these other regions.
Rishi Kothari
Okay. Got it.
Operator
Thank you. The next follow-up question is from the line of Harsh Shah from Sumaria International LLP. Please go ahead.
Harsh Shah
Hello, sir. Thanks for the follow-up. I wanted to actually visit the plant. So is it possible? Who do I contact to? And how can I come and visit the plant?
Rohan Prakash Lade
No problem. You can just drop down a mail later on. And then they will let you know when it will be possible for us.
Harsh Shah
Okay, sir. Okay.
Rohan Prakash Lade
Okay.
Operator
Thank you. The next follow-up question is from the line of Keshav from BHH Securities Private Limited. Please go ahead.
Keshav Harlalka
Hi. Thank you so much for giving me the opportunity to ask my follow-up question. So I understand that you are a INR130 crores net worth company as per balance sheet, which was INR10 crores at the time of IPO. So 13 times growth in net worth is very, very commendable, out of which INR100 crores was raised for doing better business. I really appreciate that…
Rohan Prakash Lade
Your voice is breaking in between.
Keshav Harlalka
Yeah, I got that. So what I’m saying is, we are right now INR130 crores net worth company as per balance sheet, and I’m just comparing your numbers with HLE Glascoat, which is our nearest competitor. So HLE had a INR462 crores turnover for the half year and a PAT of INR19.84 crores. And our turnover of INR51 crores and we had a PAT of INR6.1 crores. So then HLE PAT margin is 6.01% and our PAT margin is 11%, which is very, very good. So what you have guided is a INR150 crores turnover for the current year and a similar PAT margin. Can you expect that for the full year?
Rohan Prakash Lade
Yeah, pretty much in that range only.
Keshav Harlalka
My only — my second request is that can we have the investor presentation and the results — earnings release and the investor presentation on the same day itself versus investors waiting for four days to get the investor presentation?
Rohan Prakash Lade
Next time onwards we will try to do it as fast as possible.
Keshav Harlalka
Okay. At this point in time, we are available at 15 times earnings at INR300 crores market cap versus HLE which is quoting at 57 times earnings. That’s all I need to add. Thank you so much.
Rohan Prakash Lade
Thank you.
Operator
Thank you. Ladies and gentlemen, we will take that as the last question. I would now like to hand the conference over to Mr. Rohan Prakash Lade, Managing Director from BEW Engineering, for closing comments.
Rohan Prakash Lade
Hello?
Operator
Yes, sir.
Rohan Prakash Lade
Yes, I would like to thank everyone for taking all their time and attend this call. I’m also thankful to the each and every member of BEW and as well as our clients, creditors, bankers and all the financial institutions and all our stakeholders. And for any other queries, you can please get in touch with our Investor Relations teams. Thank you.
Operator
[Operator Closing Remarks]