Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Cyient DLM Limited (NSE: CYIENTDLM) Q3 2026 Earnings Call dated Jan. 20, 2026
Corporate Participants:
Krishna Bodanapu — Non-Executive Chairman
Rajendra Velagapudi — Managing Director & Chief Executive Officer
R.M. Subramanyam — Chief Financial Officer
Analysts:
Unidentified Participant
Sumit Sinha — Analyst
Unidentified Participant
Balasubramanian — Analyst
Unidentified Participant
Deepak Lalwani — Analyst
Unidentified Participant
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to ScientLM Limited Q3FY26 earnings conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your Touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Krishna Bodhanapur non executive chairman, Science DLM Ltd.
Thank you. And over to you sir.
Krishna Bodanapu — Non-Executive Chairman
Thank you very much and good evening ladies and gentlemen. I’m Krishna Bodhanapur non Executive Chairman of Scient DLM and I welcome you all to our Q3 FY26 earnings call. Joining me today on the call are our managing director and CEO Mr. Rajendra Veligapudi and and our CFO, Mr. R.M. Subramanyam, RMS. I would also take this opportunity to welcome RMS to Scient and also to state that this is his first investor call as the CFO of Scientlm. Before we begin, I would like to remind you that certain statements made during this call may be forward looking in nature and subject to risks and uncertainties.
A detailed disclaimer is available in our investor update posted on our website. Let me start with the order book situation. We’re pleased to share that the order momentum remains strong and continues to move in the right direction. Our book to bill ratio for the quarter is above 1 for the third consecutive quarter. This underscores the sustained demand environment and the effectiveness of our commercial strategy. A significant portion of the new wins this quarter have come from customers we onboarded this past year.
Clearly an evidence that our investments in customer acquisition are starting to pay off. To support this momentum, we continue to strengthen our sales engine both in India and across key international markets. We’re in the process of adding a number of key strategic sales resources, many of whom have joined and few of whom will join before the end of the year, completing what we believe is the optimal sales team to continue to grow Scientlm. With these additions, the team will be well positioned and well equipped to pursue larger opportunities that are emerging in our sector.
We’re also deepening our engagement with existing customers by participating earlier in their design cycle. What this does is it meaningfully enhances our long term viability and our strategicness to the customer since we are deeply embedded in their design and manufacturing cycles. Several customers are also showing interest in partnering with us both for redesign and new product launches and this positions us not only as a manufacturing partner but as a strategic collaborator through the product life cycle.
Coming to Revenue Our revenue for the quarter has been soft. This is due to some customer specific issues that were caused by year end holiday period and the tariff related uncertainty. A number of our customers have been in a wait and watch mode to ensure or to understand how the tariff situation settles before they start to picking up more inventory. These pushouts already are on track to ship in the current quarter and we do not expect any prolonged impact. This positions us for a stronger performance in the incoming quarter with positive momentum carrying forward into the next financial year.
A particularly strong highlight this quarter is the continued strengthening of the margin profile across both revenues and on the order book. The orders that have been booked are forecasted and projected to come at a much better margin than what we’ve historically delivered. The quality of our order book has also improved significantly with a clear shift towards high value programs and more efficient execution. This margin is already visible in our double digit EBITDA margin which demonstrates the underlying resilience and profitability of our business model.
You may see that there is an adjusted margin for this quarter and this adjusted margin is primarily for two reasons. One is the new labor code which is a one time impact and the second is some M and A impact which has not materialized and therefore the cost of which have been expensed this quarter. As volumes begin to scale in the coming quarters, we expect operating leverage to further enhance margins driven by better utilization, improved absorption and a more optimized cost structure. With a healthier mix of customers, industries and products now shaping our pipeline, we are increasingly confident that our margin trajectory will remain strong and continue to trend upwards.
We’re equally encouraged by the traction we’re seeing in new high growth industries particularly automotive, industrial and medical. These verticals are central to our long term strategy and the progress we are making reinforces our confidence and in our diversification strategy and resilience of our business model. In summary, we remain deeply confident about the opportunities ahead. The robust outlook for the ESDM industry combined with the growing momentum in India and a build to spec engagement capability reaffirms our belief in the long term potential of this business.
We stay committed to driving sustainable growth, investing in innovation and delivering lasting value to our stakeholders including our shareholders, employees and our customers. Thank you for your continued trust and support and with that I would like to invite Mr. Rajendra Veligapudi and Mr. RM Subramaniam to walk us through the detailed financial and business performance for the quarter. Rajendra
Rajendra Velagapudi — Managing Director & Chief Executive Officer
Thank you. Krishna Good evening ladies and gentlemen. It is a pleasure to welcome you all and having an overview of the Q3 results with a business update. As Krishna highlighted, Q3 has been an eventful and constructive quarter for us both from a business development and operations standpoint. Our search engine is gaining strong momentum reflected in deeper customer engagement and a steadily improving pipeline. Importantly, the composition of our pipeline is evolving with a raising of share from various opportunities originating from the India market.
We are also seeing a healthy shift in our industry mix with automotive, industrial and medical segments contributing more meaningfully to support this growth trajectory. We continue to build our sales organization onboarding key resources in Q3 and and with a few more additions planned for Q4. As mentioned by Krishna earlier, if you look at our order book and growth outlook, I think the new wins in this quarter combined with strong repeat business resulted in a healthy order intake of 387 crores.
This translates into a book to bill ratio of 1.3 for the quarter and we also seen a year over year growth here, a good growth in the year over year. On a YTD basis, our book to bill ratio stands at 1.56 which is a strong indicator of robust revenue visibility for the coming quarters. And let me take you through some of the key industry shifts we are seeing in the EMS space and how we are translated those trends into tangible progress during the quarter. If you look at across the industry, electrification and digitization continue to accelerate in almost every sector from transportation and industrial systems to energy and consumer devices.
This is expanding the scope of electronics content and widening the need for high reliability manufacturing partners. We are also seeing a clear pickup in defense spending across multiple regions. For us, this directly translates into higher opportunity funnels, especially given our heritage and capabilities in high complexity mission critical assemblies. At the same time, geopolitical realignments are reshaping global supply chains, OEMs are actively de risking footprints and India is emerging as a credible scalable alternative.
This plays strongly to our strengths and continues to improve the quality and scale of programs we are being invited into. Another important tailwind is the surge in the AI and AI infrastructure which is build outs. Data centers, edgy devices and industrial automation programs are all seeing an uptick and we are positioning ourselves well to participate in these high growth areas. Finally, within India Government led investments in defense, rail infrastructure and manufacturing continue to expand the domestic opportunity landscape and we see strong medium term visibility from these programs.
And if you look at on the key business highlights we were recognized as the best performer in electronic hardware exports by the Software Technology Parts of India for FY2425. This is a strong external validation of our quality delivery and manufacturing maturity. We also received a risk Mitigation award from a key aerospace customer for delivering a highly reliable PCBA program. This is a testimony to validate our proactive efforts to manage threats and encouraging a culture of safety and preparedness.
A major focus this year has been broadening our customer portfolio and I’m happy to share that we added just two new logos in this quarter. The first one is in the medical sector focused on battery management systems for medical applications. The second is in the industrial segment where we are supporting high precision electrical motor controls. We had few more strategic opportunities that were in advanced stages but moved into Q4. We remain confident of converting these in the near term and will share more details in the upcoming quarter.
We also commenced revenue realization from our B2S programs. This is an important milestone and we see a clear Runway for significant scale up in the coming quarters as the program matures. Specific to this quarter, four of our anchor customers are currently involving us in developing their next generation products. Two from transportation, one from industrial and one from defense. We expect revenues from these programs to begin within two years supported by healthy gross margins and higher volumes.
These engagements represent a significant long term opportunity and are expected to meaningfully contribute to our financials from FY28 onwards. In parallel, we have continued to strengthen our B2S team and are identifying specific platforms and technologies to invest in. With this we can accelerate design led growth and deepen customer stickiness. Moving to the Strategic Initiatives Some of the things we just mentioned earlier but I thought to walk you through some of the things what we are doing here.
Strengthening to Go to the Market Go to Market A major priority this year has been strengthening our sales engine. We are building a stronger sales team across key geographies and reinforcing our cross functional alignment so that sales engineering, program management and operations work as one integrated unit. The focus is very clear. Acquire new logos, expand into strategic accounts and build a robust pipeline of large multi year programs. This is already showing results and we expect the benefits to compound over the next few quarters.
Building Operational Excellence Operational excellence remains central to our value proposition. We continue to strengthen core operational metrics with a deeper push into automation and digitization across our factories. We are investing in advanced manufacturing technologies including MES to enhance efficiency and throughput while also evaluating traceability and also elevating traceability and quality systems. These investments not only improve cost competitiveness but also reinforce the reliability expectations of our aerospace, industrial and metal customers.
Moving to the next one scaling B2S and platform play so B2S continues to be a strategic differentiator for us this year. We are realizing B2S revenue as part of the mainstream business and our ambition is to scale it meaningfully. We are investing in the right building blocks, people with the right skill sets, enhanced MPI and prototype capabilities and key technology stacks that will allow us to create a more integrated platform play. This will strengthen customer stickiness and open doors to more design led programs.
Expanding to new markets and building capabilities I think is another area where there is a lot of focus today on market expansion. We are strengthening our presence in Europe, including opportunities for inorganic growth. This is a region where customers are actively looking for reliable partners and we see a significant headroom here. Defence remains another strategic priority. We are doubling down on global defence opportunities by enhancing our on ground presence and investing in the certifications required to participate in larger and more complex programs.
Finally, we continue to expand our capability stack, whether in cables, sheet metal or other critical components so we can offer customers a more complete and integrated manufacturing solution. Together, these initiatives build a stronger, more resilient and more scalable business. They position us well for growth both in the near term and long term while improving our competitiveness and deepening customer relationships. With a strong pipeline and continued traction in the India market, we expect momentum to remain robust in Q4, setting the foundation for a strong FY27.
This gives us confidence for a solid growth path next year. Another highlight is the positive shift in business mix. Our margin profile has improved significantly in FY26 till date and is now structurally healthier. We reported strong gross margins in H1 and this trend continued into Q3 as well. The new orders we are booking also carry healthy margins, reinforcing our path toward sustained double digit profitability. As a revenue growth resumes, we expect improved absorption to drive further margin expansion.
So in summary, before I conclude I would like to summarize some of the key takeaways. One is our order backlog remains strong supported by book to bill ratio of greater than 1.5 on YTD basis. Build to spec and NPA engagements with key customers provide robust long term visibility. Third, we are well positioned for growth in FY27. Fourth, healthy double digit margins with further upside expected from operating leverage. So with that I will now hand over to RMS for the financial update. Thank you all for your continued support.
R.M. Subramanyam — Chief Financial Officer
Thank you Rajendra. Good evening ladies and gentlemen. I’ll now take you through financial performance of Q3 of FY26, the finance presentation I’d like to bring to your attention. The numbers presented are consolidated numbers and are normalized to separate the one off expenses to reflect the like to like comparison. The one off expenses which have been separated out are 1 M&A related expenses and 2 the impact of new wage code. We will cover these items in detail in upcoming slides. Moving on to the results, our Q3 revenue stands at 3033 million or 303 crores 31.7% year on year decline.
This is primarily due to the completion of a large cyclical order in FY25. Our order book remains healthy at 23.5 billion rupees reflecting a QoQ increase of Rs. 583 million. This marks the third consecutive quarter of positive momentum driven by steady order intake. As mentioned earlier, our normalized EBITDA excludes the two one off item. It stands up 3,309 million rupees, a 14.4% decline year on year. However, in margin terms we delivered a healthy 10.2% EBITDA at 207 basis points higher year on year which is supported by favorable revenue mix and strong operational and supply chain efficiencies.
On a reported basis, EBITDA is INR 275 million translating to a 9.1% of revenues. Normalized PAT stands at 138 million rupees 18.6% year on year decline, although the absolute number is lower due to revenue impact. Our PAT margin improved by 73 basis points year on year reaching a 4.6% 73 basis points higher year on year. Reported PAT is rupees 112 million at 3.7% of revenues. Overall, despite soft revenues, we continue to maintain a double digit EBITDA margins a result of healthy mix and operational discipline with scale returning and margins having the potential to improve further due to operating leverage.
This slide covers our quarterly trends in revenue and margin parameters. As we can see, revenue over the last three quarters were impacted by the large FY25 order completion. However, the order built up over this period sets up for a good Q4. As we indicated in our previous call and also by Rajendra earlier, EBITDA margins remain stable at double digit levels for the past two quarters with the scale improving in Q4 and beyond. We are confident of maintaining and improving this trend. This slide highlights our Non P and L metrics order book continues to strengthen closing Q3 at current 23.5 billion rupees making three consecutive quarters of growth.
DIO inventory is elevated due to customer specific shipment delays in Q3 and inventory buildup for Q4 shipments. It is expected to ease out by the year end. We see a marginal increase in DSO and the reduction in customer advances due to denominator effects. However, this was largely offset by an increase in DPO driven by improved supply chain efficiency as a result of the higher DIO which is a primary contributor to the temporary increase in net working capital. We continue to work on taking necessary steps to improve the same those actions expected to result in better NWC level by end of Q4.
In terms of revenue share, our industry mix is now more balanced compared to last year. With a large defense order behind us, we are seeing a healthy contribution from aerospace, industrial and medical segment. This shift is driven by strong sales effort towards diversification and improved operational capabilities. From a product mix perspective, PCBA continues to dominate but box build, mechanical and other value added services are growing steadily. This shift is also towards diversification and contributing positively to the margin expansion.
While our India contribution is rising, rest of work continues to be higher driven by long standing customers and new addition in North America market and Europe. This slide provides a detailed P and L view for the quarter. As mentioned earlier, revenue is lower year on year due to large FY25 order completion. However, the quality of revenue has significantly improved and along with operational and supply chain efficiencies, our normalized EBITDA margin expanded to 10.2% compared to 8.1% in the same period last year.
Other income is lower due to reduced deposit income. However this is largely offset by a drop in finance cost due to lower borrowing and reduced interest rates. As a result, normalized PAT stands at 138 million rupees reflecting a decline of 18.6% year on year on a comparable margin basis while the reported PAT is higher by 1.9%. This slide explains the bridge from our reported normalized margin. The first one off relates to M and A evaluation expenses amounting to $17.75 million. We incurred his expense to evaluate a deal that did not go through and hence we have taken the hit in this quarter.
The second one is the wage impact totaling to 16.3 million resulting from the new wage code brought in by the Government of India. Both these expenses are exceptional one off in nature and not reflective of normal business run rate. The padlock reflects the same with the tax impact of these adjustments. Moving on to the last slide, in terms of IPO proceeds utilization, we continue to make disciplined progress in deploying the IPO proceeds. As of December 2025, total utilization stands at 93.2%. Working capital utilization stands at 97.2% while capex utilization is 15.4, with the balance to be deployed as planned in the coming quarters.
In summary, I like to conclude the following before the Q and A. Let me summarize our performance in five key points. Number one. Order backlog remains strong with three consecutive quarters of growth and momentum building up. Two, revenue was impacted by the FY25 large order completion, but we are well positioned for a strong Q4. Three, margins remained healthy at double digits level with further improvement expected at scale returns. Number four, networking capital is temporarily elevated primarily due to inventory and expected to normalize in Q4.
And moving beyond number five, which is the last one, industry and product mix are diversified and moving in the right direction, supporting long term margin expansion. With this. Thank you for all the attention. And we can now move on to question and answers from participants. Thank you.
Questions and Answers:
Operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We’ll take a first question from the line of Samit Sinha from my query. Please go ahead.
Unidentified Participant
Yes, thank you and madam is welcome. I look forward to working with you. I guess A couple of questions here. So we saw the revenue decline sequentially which I think you explained. But how should we think about Q4? Seems like there’s going to be some strength there as well. So sequentially the revenue should grow. But how about year over year basis? Is that something we can expect year over year growth or it’s still going to be negative for Q4.
Rajendra Velagapudi
So Sandeep, I think this is Rajendra here. Yeah, so we see as of now, today the plans which we have it. I think we are seeing a positive year over year and I’m confident that we’ll be there by end of this Q4. So we’ll be seeing a positive growth when compared to year over year.
Unidentified Participant
Okay. Okay, that’s. That’s good. Do you have a number for the contribution from Altech during the quarter and then I have a question about tariffs after that,
R.M. Subramanyam
Nothing. Sandeep, I can answer this question. Okay. In terms of Altech, I think contribution is healthy. We don’t get into the sort of specific with respect to individual divisions or the companies, but it continues to remain healthy and they are doing well in terms of profitability as well.
Unidentified Participant
Okay, and is it. I mean, I don’t. Okay, I’m going to just actually take this offline. And about the tariffs, you mentioned that there were some customers who were concerned about the tariff environment and are probably are holding back. But and you also mentioned that they’re coming back now. What changed for them that they are now feel more confident about the environment.
Rajendra Velagapudi
I think so basically once, I mean earlier you know that there was a high tariff rate there, the 50% tariff and there are some options which we have presented to them how they can work out to probably to reduce some of those things. So that’s where we help them in terms of reducing their actual tariff rates there to take the product back into us. Okay. So those are the options which has helped them probably that is going to help us help them to take the products in Q4.
Unidentified Participant
Got it. Okay, thank you very much.
Operator
Thank you. We’ll take our next question from the line of Dipro Srivastava from Philip Capital India. Please go ahead.
Sumit Sinha
Hi sir. Good evening. So quickly on the working capital side, where do we see us ending the full year and what kind of cash flow generation are we looking at for the full year?
R.M. Subramanyam
RMS here I can answer this question in terms of NETWORKING CAPITAL, last 2/4 we did improve but this quarter has been a bit of a slippage essentially because of the inventory buildup. We will come back to in terms of trying to work on in Q4 and the whole year end. Also in terms of free cash flow, that will be again positive. In terms of what is this? This year is again this quarter has been negative as we presented. But overall on a full year to date basis we will be positive.
Sumit Sinha
Right. And just quickly, secondly on the order book side, we are seeing sequentially order book improving for last three quarters. So you know, is it because of Altech we are seeing near shoring of operations in us that’s why Altec is getting more order book, more orders compared to let’s say the standalone business. How should we look at it? What are the triggers driving this order book growth?
Rajendra Velagapudi
So it’s not because of the Altech Srivastava. So it is mainly driven from the India side of the business right now. So we are seeing the new customers and also I think as you have seen that some of the strategy earlier where we said strengthening and expanding our existing portfolios, that’s where I think the focus is happening there. Strengthening the existing customers and also driving the new customers. As you said, we have added the new customers in the last two quarters we have seen and also this quarter we added another two more customers.
That’s where now we are seeing the traction coming in terms of the revenues.
Sumit Sinha
So this Indian order book sir, is is it on a defense aerospace side or is it on the industrial side?
Rajendra Velagapudi
Sorry, which sector
Sumit Sinha
Ramp up you are seeing in India, is it on the defense aerospace side or on the side?
Rajendra Velagapudi
I know it is not on the defense side is enough. Majorly the order book what you are seeing it is on aerospace side and then the industry is then in the industrial and medical predominantly.
Sumit Sinha
Right? Right sir. And just lastly you know the kind of experience you have had last time, you know the order book from Indian players are quite lumpy. You know we had one particular client. So you know what are your expectations? Is this going to be structural in nature or is this one time thing or do you expect this to continue let’s say for next year
Rajendra Velagapudi
It definitely. Not only continues, it will definitely grow. That’s what I will just tell you. Because as we are adding also new salespeople we will be seeing more of those order intakes in the next quarters there.
Unidentified Participant
Sure sir. Thanks a lot. All the best. Thank you sir.
Rajendra Velagapudi
Welcome.
Operator
Thank you. Before we take the next question, would like to remind participants to ask a question. Please press star and one on your phone. Next question is from the line of Balasubramanian from Arihan Capital. Please go ahead.
Balasubramanian
Good evening sir. Thank you so much for the opportunity. Sir, you have mentioned Q4. We may expect positive growth and overall in FY26 heavily impacted by the defense step down. How do you fridge, how do you resume the growth story for FA57? You can like mention about like defense order assumptions or B2S ramp ramp up and new EVR industrial range. And you can also mention about M and A s. And finally like you mentioned about some 17.75 million one time expense that deal did not go through. Also share like what went wrong in that deal.
Rajendra Velagapudi
Okay, I think just to answer your vala on the first point what you said about. So there is a. Can
R.M. Subramanyam
You bala. Can you just repeat the first question? I think you have a couple of questions so if you go one by one it will be easier for us to answer. Let’s start with the one if you can repeat it please.
Balasubramanian
Sir, if I mentioned Q4 we. We can expect positive growth on year. On year basis. And how do you look at on FY27? Like what are the contributors in terms of defense order assumptions and new EV industrial wins and any other MNA side.
Rajendra Velagapudi
Sorry. So I think on the. On the Q4. On the Q4 I think versus the FY20 in the Q4 as I said. Yes, we have the visibility, we are working towards that and we are confident as of now that it will be. We will be seeing a positive growth year over year. And FY27 is also going to be a positive growth. I mean and a positive. It is going to be substantial. But we are not giving any guidance right now. But we are working out on the numbers. FY27 is going to be a far, far better than FY26. That’s what I will just probably leave it at this point of time.
And the other question which you asked about the 70 million. Probably. Yeah.
R.M. Subramanyam
So as we said, this 17.75 million is a expenditure which you incur on a potential M and A opportunity. This did not go through. We did actively pursue it. It’s an international acquisition and since some of the terms did not fit into what we were expecting so we had to call the doc. But we continue to be on the lookout for both an organic and inorganic expansion because that’s what is in our DNA and we continue to work on that.
Balasubramanian
Nearly around 40 percentage of revenue comes from us. I think given that 50% situations like how we are managing, whether it’s a rerouting or shift to changes and what percentage of U.S. Distinct shipments are now effectively tax free and what portion of or like
Unidentified Participant
For
Balasubramanian
The portion where tariffs are paid by customers temporarily. If you could talk about whether how quickly can production ship to Altech is needed.
Rajendra Velagapudi
Yeah, so I think we have already put those things in action right now. Bala. So we have four options which we are working out and which we have given to our customers. And those are the things which are really helping us to reduce the impact of the GEO tariffs on our customers right now.
Balasubramanian
Okay. Sir, I think we have achieved double digit margins, nearly 10.2%. I think we have order of order book of nearly 3,400 in that range. I could please disclose like in that current total order book value and the blended margin profile of this backlog compared to on the past 12 months.
Rajendra Velagapudi
Yeah, those. I think I said there are very healthy margins. Whatever we have booked the orders and whatever the order back, whatever the order book we have today. So based on the order book, the margins are going to be better than what we had currently.
Balasubramanian
So is that right way to assume 70, 80 percentage of order book or double digit orders.
R.M. Subramanyam
We don’t want to be getting into the specific. I think it, it’s pertinent to say that the margins in terms of the blended margin ultimately will be equal to or better than what we are doing with the scale benefits in terms of what flows into the EBITDA and PAT will be much better than what what we have today. So it’s a combined effect of both the revenue mix and also the operating leverage impact. Both will be better on the margins.
Balasubramanian
Okay, sir, thank you.
Operator
Thank you. Ladies and gentlemen, in order to ensure that management is able to answer queries from all participants, kindly restrict your questions to two at a time. You may join the queue for follow up questions. We’ll take our next question from the line of Sukrit Deep Atil from iSight Fintrade. Please go ahead.
Unidentified Participant
Good evening team. I have two questions. My first question is as the company builds on its aerospace and defense partnerships and expands its EMS footprint, what specific initiatives are being prioritized to diversify the customer base and capture opportunities in the new geographies over the next three to four, four, three to four years? How do you see CNDLM positioning itself to balance operational resilience with scaling global competitiveness? That’s my first question. I’ll ask the second question after this.
Thank you.
Rajendra Velagapudi
Sure. I think so. We have strategy sessions with the teams here also to the board and we have presented the plan where we are going to be so we have a clear strategy of how to get the numbers what we have today. And yes, I think it’s nice when you look at it in the next two to three years it is going to be diversified. It won’t be very high into the aerospace and defense. You will be seeing aerospace and defense, industrial, medical and I said some of the automotive side on the transportation side and automotive side we will be seeing most of those things and probably it will be equally distributed, maybe a slightly higher on the aerospace in different but otherwise the rest of all the verticals are going to industry is going to be equally distributed in terms of the revenue growth.
Unidentified Participant
Thank you. My second question is to Mr. RMS. With normalized EBITDA around 309 million and margins holding steady, how are you planning to leverage this financial strength to support capacity expansion and technology investments? Looking ahead, what measures are being put in place to optimize the cost of funds and ensure that profitability remains stable as demand pattern evolve. Thank you.
R.M. Subramanyam
Let me try and address this in couple of ways. From a balance sheet perspective, we are hardly leveraged. We are net cash positives. So we have ability to go up to from a pure working capital perspective, 100, 350 to 400 crores. So balance sheet continues to remain strong and we have dry powder in terms of trying to look at any new capital expansions or acquisitions. That’s in terms of the balance sheet strength and in terms of what we are looking for. We are looking for both organic and inorganic growth and we continue to be scouting for opportunities.
We acquired Altech year and a half back and sorry year back and there are continuing work to look at acquisitions more from a geography and capabilities perspective. And we will be looking at all of this trying to add to our capabilities and deliver value to the customers as we move forward.
Unidentified Participant
Thank you for the guidance and I wish the entire team for next quarter.
R.M. Subramanyam
Thank you. Thank
Unidentified Participant
You.
Operator
Thank you. We’ll take our next question from the line of Purva Zaveri from one of financial consultants. Please go ahead.
Unidentified Participant
Hello sir, thank you for the question. I’m sorry, can you use
Operator
Your handset mode please? Purva.
Unidentified Participant
Yeah. Hello. Hello. Am I audible?
Operator
Hello. Yeah, go
Krishna Bodanapu
Ahead with the question. Yeah,
Unidentified Participant
So first, first question was like how many lines do we have for TCBA and box build as I move to this company. So can you just briefly that how many lines for the PCB and box build?
Rajendra Velagapudi
So PCBs we have globally close to around seven lines. We have. Okay. And box build I think box build is basically all. These are the back end operations. Correct. So wherever there is a box build we will just having the backend operation. Not that we need to have a separate lines or anything for the box build.
Unidentified Participant
So sir, what will be the peak revenue per line for the PCBAs? If you can just for one line of PCBA, what would be the peak revenue? We can do the asset turns.
R.M. Subramanyam
Yeah, I think questions about how much of revenue can do with. Remember our business is a high mix sort of low volume business. So you can’t measure our business in terms of the lines and you know, output through the lines. It’s a complex products of what we do with high levels of testing. So that’s not a conventional measure where we look at. That’s only applicable for high volume business. So I don’t want to be getting into measuring based on that. It suffice to say that we have sufficient capacity and in terms of capacitization, it’s about 50 to 60%.
So we have substantial capacity in what we are delivering it and we are able to deliver the double digit margins and if you’re able to push the throughput further up for which there’s substantial work going on, we will see the operating leverage and that coming into the margin effect as well. So I think that’s the best way to put it across.
Unidentified Participant
All right, sir, and for this last thing, what are the expectations on the capex going forward?
R.M. Subramanyam
In terms of the CapEx, what we have is the regular CapEx and maintenance which we continue to do, which is anywhere between 1 to 2% of the revenues which we will do it. And if there are any specific customers who look for further capex or an addition line or any custom specific requirement, we have enough dry powder which we talked about and we can do it in a pretty quick time. We have land and infrastructure and buildings which is the long lead item that’s already covered. So for us to add any equipments online, it’s probably three to six months timelines and we can pretty much up and running in no time if required.
Unidentified Participant
All right, thank you for your time.
Operator
Thank you. Next question is from the line of Deepak Lalwani from Unified Capital. Please go ahead.
Deepak Lalwani
Hello sir. Thank you for the opportunity. So first question is on the tariff impact that we saw in this quarter. How much of our shipments were deferred from Q3 to Q4? That is one. And the connect and the connecting question to this is if you can call out how much of revenues are shipped from India to the US and the solution and the solution that you’re finding to the tariff as to how much of this is, you know, shifted to the US production and should we assume that the rest of the business will pay 50% tariff?
If you can give some.
Rajendra Velagapudi
I mean so in terms of the US tariff impact in the Q3 is not a huge. Okay, it is a small number in terms of the number if you look at it. But when come, when come to the options, whatever we have it, I think the percentage of the revenues, what we are doing it, I think the options, if you, which I said earlier, we have closer than four options which we have and which we are, which we already give it to our US Customers right now. So some of them have taken those things and they are working towards it.
And so I probably leave it at that point rather than sharing what are those options and all. But they are very well, very well taken by the customers and we are complaining to the things, there is no issue with those things. And all not that shipping to somewhere else and doing so. It is all as per the compliance. And also those are the things which we are working out. And probably we won’t be seeing much of those US Tariff impact until unless the tariffs goes further high. But otherwise we don’t see much of a challenge right now on the U.S.
Tariffs.
Deepak Lalwani
Okay, so the solution that you’ve given to the customers, apart from that, apart from that as well, are the customers okay to pay 50% tariff even if products are shipped from India and how much of our revenues are paying 50% tariffs?
Rajendra Velagapudi
So I think the 50% tariffs probably there will be a reductions which we are suggesting to them some options there. Okay. And I said they are what we are internally. We are just giving to a customer probably with that it may not be having a 50%. It will be probably coming down based on various things which we will be working with the customers there. So.
Deepak Lalwani
Okay, understood. And sir, one follow up question on the order inflow run rate. So we were at about 500 crores in the first two quarters. We slipped in this quarter to about 400 ish. How are we looking at Q4 and given that the sales team has been buffed up, how should we look at FY27? Given that you’ve taken sales team plus, you’re talking about new segments, new areas of geography growth. So if you can, you know, give out some, you know, guidance on what should we look at in Q4 and the next year in terms of order.
Inflow,
Rajendra Velagapudi
Q4 will be, will be. We’ll be just coming back to the numbers what you have seen in the Q1 and Q2. Okay. So we don’t have any concern on the Q4 number in terms of order intakes. And as I said, if it’s a new sales team, I think as you know, any of the sales team coming in, it will take probably a few quarters to see a product to any other order intake coming from them. So we will be looking at those opportunities and probably going and working. It takes probably at least initial first two quarters, so.
Deepak Lalwani
Okay, understood. And sir, if we continue to be at this order run rate, we’ll close the year with a healthy order book. And assuming that, you know, our orders get shipped in 15 to 16 months, is it right to assume a 2025% growth in 27? In FY27?
Rajendra Velagapudi
Yes, absolutely. I mean there is no doubt on that one, Deepak.
Deepak Lalwani
Okay, got it. And sir, last question, since you’re taking efforts on you know, the sales team enhancement and some technology related cost. Will this come on our way of double digit margin aspiration that we have or the orders are like very high in margins to take care of these costs?
Rajendra Velagapudi
Absolutely. That’s what I think. Earlier also you mentioned it. You will be seeing margins in the good healthy margins, double digit margins like what we have seen in the Q3 here. I think you will be seeing slightly more than that in Q4 and probably also in FY27.
Deepak Lalwani
Understood. Thank you sir. All the best. I’ll come back in the queue.
Rajendra Velagapudi
Thank you.
Operator
Thank you. Next question is from the line of Aryan Bhatia from Invade Research. Please go ahead.
Unidentified Participant
Thanks for the opportunity. My first question is regarding our build to print versus build to spec mix in Q3. 26.
Rajendra Velagapudi
So I think that the build to spec is closely around 6 to 7% in FY26 and we expect that definitely will grow to a double digit number in FY27.
Unidentified Participant
Sorry sir, if you can come again like I was not able to hear you.
Rajendra Velagapudi
FY26, you asked about the BTS revenue, correct?
Unidentified Participant
No, I am asking about the mix of build to print in a Q3 FY26 revenue and build to tech mix.
R.M. Subramanyam
Yeah. Yeah, I think that’s what he answered. The build to spec revenue is about 6 to 7% in the current year and we expect to go to double digit in the next year. Hopefully I’ve answered the question.
Unidentified Participant
So this is the reason that will drive the margins in FY27 or it will be more industrial mix.
Rajendra Velagapudi
So I think FY27 will be seeing slightly a double digit number there. But As I said FY28 onwards you will be seeing a good growth in the B2 years. And also the margins going up because of these BTS programs coming up in FY20.
Unidentified Participant
Margin will be due to the industry mix change or will be due to the build to fit versus to bring exchange.
Rajendra Velagapudi
Both, both, both, both. It will be both because of the mix and also the BTS.
Unidentified Participant
Okay, so in FY27 the build to Technics will be more than 10%. Am I right sir?
Rajendra Velagapudi
Sorry just can you repeat that? Once
Unidentified Participant
The. In FY27 the build to tech mix will be more than 10%. And could you please provide me the gross margin difference in build to print versus build to spec?
Unidentified Participant
Yeah, I think you can say that. Yeah. Yeah.
Operator
Yes,
Unidentified Participant
Aryan.
Operator
Aryan.
Unidentified Participant
Hello.
R.M. Subramanyam
We have answered the question. Yeah.
Operator
Okay Aryan, you’re through with your questions, right?
Unidentified Participant
Yes, yes,
Operator
Thank you. Ladies and gentlemen, we’ll Take that as the last question for today. I now hand the conference over to Mr. Krishna Boranapu for closing comments. Over to you sir.
Krishna Bodanapu
Thank you very much and thanks everybody for participating in this call today. I do want to highlight a few or just summarize a few things. I think what Rajendra and RM has said, the momentum is very strong behind us. This was a tough quarter and as we had said last quarter also that this would continue to be a tough quarter. But from Q4 onwards we will see of course, not only quarter on quarter growth, but the year on year growth. Further and more importantly, the margins will sustain in the 10% range.
And to Rajendra’s point, in spite of the investments that we’re making in sales, leadership, etc. We’re still very confident based on not only the order book that we’ve built it, but also the kind of industries that we’re going after, etc. So all in all, I believe the worst, if I may, is behind us, at least from a revenue perspective. Obviously from a margin perspective, we’ve been doing quite well for the last few quarters. Also from a cash position perspective, we’ve been doing quite well and we will have a fairly strong net positive year from a cash perspective.
So taking all this into account, we strongly believe that we are now well positioned for a strong Q Q4, but more importantly for a very strong FY27 and beyond. Thank you for all the support and we look forward to being in touch and we’ll speak again at the end of next quarter’s earnings presentations. Thank you.
Operator
Thank you sir. On behalf of ScientLM Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.