Elecon Engineering Company Ltd (ELECON) Q4 FY23 Earnings Concall Transcript

Elecon Engineering Company Ltd (NSE:ELECON) Q4 FY23 Earnings Concall dated Apr. 27, 2023.

Corporate Participants:

Danae Tada — Investor Relations

Shri Prayasvin B. Patel — Chairman and Managing Director

Narasimhan Raghunatha — Chief Financial Officer

Unidentified Speaker —

M.M. Nanda — Head of Gear Division

Analysts:

Ankit Babel — Subhkam Ventures — Analyst

Gunjan Kabra — Niveshaay — Analyst

Pratik Kothari — Unique PMS — Analyst

Shikha Mehta — Equity Capital — Analyst

Sunil Kothari — Unique PMS — Analyst

Naysar Parikh — Native Capital — Analyst

Mahesh Bendre — LIC Mutual Fund — Analyst

Girish Meta — Diner Capital — Analyst

Sonali Shah — MK Investment Managers — Analyst

Mohit Kumar — ICI Securities — Analyst

Ankit Kumar — Alpha Capital — Analyst

Vikram Datwani — Nuvama Wealth Management — Analyst

Riya Mehta — Aequitas Investment — Analyst

Devang Patel — Sameeksha Capital — Analyst

Anish Gavali — Girik Capital — Analyst

Unidentified Participant — — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to Elecon Engineering Co. Limited Q4 FY ’23 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 you’re your touchtone telephone. Please note that this conference is being recorded. I now hand the conference over to Mr. Danae[Phonetic] Tada from Ernst Young, LLP. Thank you, and over to you, sir.

Danae Tada — Investor Relations

Thank you, Bigen. Good day to all the participants on the call, and thanks for joining this Q4 and full year FY ’23 Earnings Call for Elecon Engineering. Please note that we have mailed out the results and presentation, and you can also see the results on our website as well as it is uploaded in the stock exchanges. In case if you have not the same, you can write to us, and we’ll be happy to send this thing over to you. Before we proceed to the call, let me remind you that the discussion may contain forward-looking statements that may involve known or unknown risks, uncertainties and other factors. It must be viewed in conjunction with our business risk that could cause future results performance or achievement to differ significantly from what is expressed or implied by such forward-looking statements. To take us through the results of this quarter and answer your questions, we have with us the management of Elecon Engineering, represented by Mr. Prayasvin Patel, MD; Mr. Au Shah, Non-Executive Director; Mr. Kamlesh Group CFO; Mr. Narasimhan Raghunathan, CFO, Mr. MM Nanda, Head of BIG Vision; Mr. P.K Bhasin, Head of MSC dividend; and Mr. Basal Sagaria, Head of R&D Department. We’ll have the management give a brief overview of the quarter one past and then we’ll open the floor to Q&A session. With that said, I’ll now hand over the call to Mr. Prayasvin Patel, — over to you, sir.

Shri Prayasvin B. Patel — Chairman and Managing Director

Thank you. Good evening, everyone. A very warm welcome to our Q4 and full year FY 2023 conference call. I hope all of you have had a chance to go through our results and presentation. We are pleased to report that we have achieved another quarter of strong financial performance, driven by our team’s dedication and hard work, and we expect the growth momentum to sustain in the coming years. As we look forward towards the future, the global economy continues to face some uncertainties and challenges in the form of inflation and supply chain disruptions. However, we remain confident in our ability to navigate these challenges and continue to deliver value to our customers and investors. Looking specifically at India, we are optimistic about the country’s economic growth prospects for FY ’24. According to RBI estimates, India’s GDP is expected to grow at 6.5% driven by favorable government policies, strong domestic demand, huge spending in infrastructure stand out in recent budget, better tax collection and a rebound in exports. We are well positioned to capitalize on these opportunities and are committed to drive in long-term sustainable growth for our stakeholders and retain our consolidated revenue target of INR2,000 crores with EBITDA at 22% for FY ’24. Now coming to our new product development initiatives. Our primary objective is to generate innovative ideas that satisfy our customers’ needs while optimizing cost and enhancing product performance. in FY ’23, we made a significant stage in new product development and upgradation, introducing six products that include high-speed gear boxes, central dry planetary gear boxes, roller press gearboxes, vertical roller mill gearboxes, dual tandem gearbox and sugar planetary gearboxes. Our efforts have been met with satisfaction, and we are proud to continue pushing the boundaries of innovation. We recently launched the second generation of EON cities which is designed for the use in a range of industries, including steel, power, chemical, oil and gas, rubber and plastics material and mining, paper and pulp, industrial cranes and water treatment. These EON series will be beneficial for our customers considering operational cost optimization and for the company considering inventory optimization due to standardization, faster deliveries to cater to exports and urgent need of customers.

The government’s growing attention towards infrastructure is expected to stimulate the capex cycle in cement and steel sectors, thus benefiting our company. Our focus moving forward is to maintain engagement with OEMs in the Western countries market, particularly focused on European market and establish ourselves as the preferred supplier. Inflation and supply chain issues in the European market is posing serious challenge and sustainability issues to the local players and it puts us in an advantageous position to capitalize on this opportunity. Elecon is proud to be a leader in customized and complex gear manufacturing segment for defense particularly for the Indian name. This is a testament of our technological and manufacturing powers. With our expertise in working with high precision machine tools, we are actively seeking out niche areas that demand specialized equipment or components. The strategic initiatives undertaken by our company have led to a remarkable turnaround in the Material Handling business, resulting in profitability after struggling for over five years. The strong order inquiries have translated into robust order book for the division, driven by the placement and upgradation requirements as well as new orders from power and other end user industries.

Our extensive product range is one of the widest in the market, and we plan to introduce a few more products to cater to industries where we are not currently present. Given the visibility and momentum of new projects, we believe that there is a significant potential for growth in the division while maintaining healthy margins. Last but not the least, our unwavering dedication to ESG continues to be our top priority as we strive to make a positive impact on all our stakeholders. ESG initiatives remain at the forefront of our company’s agenda, and we remain committed to engaging in sustainable business practices that benefit not only the environment but also our communities and employees. Thank you for your continued support as we work towards a better tomorrow. Thank you.

Operator

Sir, should we begin the question-and-answer session?

Shri Prayasvin B. Patel — Chairman and Managing Director

Yes, please.

Questions and Answers:

Operator

[Operator Instructions] The first question is from the line of Ankit Babel from Subhkam Ventures. Kindly proceed.

Ankit Babel — Subhkam Ventures — Analyst

Yeah, good evening, sir. A couple of questions. Sir, you guys have been under discussion since the last several months with overseas OEMs for approval of the product. What is the current status? And by when can we expect one or two such approvals to come in?

Shri Prayasvin B. Patel — Chairman and Managing Director

Let me put it this way, that approvals for products in the foreign market is a constant thing because you are always looking for new customers. And for these new customers, you have to get various approvals. Normally, they look at your references and your past experiences before approval. And quite often, they send also the team to come and have a look at the manufacturing facilities and capabilities of the company. This is an ongoing thing. We’ve got many approvals apart from this because of our wide experience in India as well as abroad. It is very easy for us to normally get approvals of this kind with the customers. So those approvals come in quite easily. And normally, it takes 15 to 20 days maximum to get those approvals.

Ankit Babel — Subhkam Ventures — Analyst

Sir, my question was any major approval wherein the revenue visibility from a particular customer was to say around INR1,500 crores kind of a potential, those kind of approvals have been received.

Shri Prayasvin B. Patel — Chairman and Managing Director

Yes. Recently, we’ve had a significant approval from one of the large paper and pulp machinery manufacturer who is one of the largest in the world. So that approval has come through from Europe. But apart from that, we are also supplying the equipment from India for their plants in the Asian region.

Ankit Babel — Subhkam Ventures — Analyst

Okay. Sir, my second question is, was there any one-off expenses or any one-off income in your Q4 numbers?

Narasimhan Raghunatha — Chief Financial Officer

Yes, we have that. I think I’ll just — in regard to raw material costs, we have a one-off kind of things related to GST input credit of our other sites other than Gujarat. There, our utilization is very strong and this is going to take some time. So as a conservative approach, we have made a provision for INR7.28 crores, plus we are having nearly INR2.5 crores of inventory required for the service and after-sale service requirement. So those inventories are having more than two years. So as a conservative approach, considering the visibility, we have made a provision of INR2.5 crores for that. So that is the two things which is there for the raw material consumption. And in case of the manufacturing cost, we had some high-cost consumption of materials, which are having its own cycle like oil base trend, those kind of expenses because incurred in Q4 this time, which will have its own cycle of replacement.

Ankit Babel — Subhkam Ventures — Analyst

Okay. And any one-off incomes?

Narasimhan Raghunatha — Chief Financial Officer

We have the income in case of the right back, which is there just to the tune of what is INR2.6 crores, which was related to the liability of earlier period, which was not required. Then we were having another income in the form of a contractual obligation. As you know, we have closed all our old projects in [Indecipherable] and for where we were having certain contract obligation provision we made as a conservative approach, that would not require any more. And plus some warranty was there. That also completed the warranty period. So both put together is coming to nearly INR eight crores.

Ankit Babel — Subhkam Ventures — Analyst

Okay. So net to net, INR10 crores of run-off expenses and INR eight crores of one-off income. So net of INR two crores of one-off expenses. Is the right way to look at it?

Narasimhan Raghunatha — Chief Financial Officer

Yes. And one more thing that we have made — we have had a one-off kind of bad debt of nearly INR4.8 crores this year, this is a part of our settlement agreement with one of the customers, which we simply did in Q4. So that is INR4.48 crores.

Ankit Babel — Subhkam Ventures — Analyst

The INR4.8 crores is bad debts?

Narasimhan Raghunatha — Chief Financial Officer

Bad debts. One of the bad debts as part of the settlement agreement with the customer.

Ankit Babel — Subhkam Ventures — Analyst

Okay. So INR6.5 crores net is the one-off expenses?

Narasimhan Raghunatha — Chief Financial Officer

Bad debt.

Ankit Babel — Subhkam Ventures — Analyst

Okay. I’ll get back in the queue. Thank you.

Operator

Thank you. The next question is from the line of Gunjan Kabra from Niveshaay. Kindly proceed.

Gunjan Kabra — Niveshaay — Analyst

Congratulations for a good set of numbers, sir. I had one question. In the presentation you have guided around revenue guidance, which is INR1,700 crores. And in the Bhadra [Indecipherable] INR2,000 crores of revenue that we are targeting in FY ’24. So what kind of revenue based in the last three quarter [Indecipherable] firm believe that we’ll be touching INR2,000 crores. So are we seeing any kind of slow growth rate?

Narasimhan Raghunatha — Chief Financial Officer

No. I think if you defer that presentative concentration speaks about the clear for INR1,700 crores. And INR300 crores is energy. If you know, our presentation is on the left-hand side, the gear time is there, energy is on the top. So energy is different and gear is different. INR1,700 crores, what you talked about is year only. So 1,700 plus 300 turns out to be 2,000.

Gunjan Kabra — Niveshaay — Analyst

So we are still maintaining our growth guidance of INR2,000 crores?

Narasimhan Raghunatha — Chief Financial Officer

Yes.

Gunjan Kabra — Niveshaay — Analyst

Also one thing, is that in the beginning of the riel the beginning of the presentation, you guided both sales headwinds due to the pricing disruption. But in the recent interview that you did yesterday, so there you guided the export percentage is expected to increase to 40%. So are we planning to gain any share? Or how is it — I mean, how are you seeing the demand there?

Shri Prayasvin B. Patel — Chairman and Managing Director

What we are trying to say is that the Europeans are having these challenges while we don’t have these challenges. So we are likely to grow while they are likely to remain stagnant. So we have an opportunity. We are going to grow from 30% to 40%, while we see opportunity situation in Europe.

Narasimhan Raghunatha — Chief Financial Officer

And if I just further add to this. So that if you see our presentation, we are talking about two things. Our overseas business plan expo, both put together is 29%. So that is how we speak about our overseas business and exports. So when we talk about export, export is our export from India as well as our [Indecipherable] business, which is there.

Gunjan Kabra — Niveshaay — Analyst

[Indecipherable]

Narasimhan Raghunatha — Chief Financial Officer

Thank you.

Operator

Thank you. The next question is from the line of Pratik Kothari from Unique PMS. Kindly proceed.

Pratik Kothari — Unique PMS — Analyst

Hi. Good afternoon. First of all, congratulations to the team for such a fantastic performance. And my first question on the six new products which we have upgraded or really, as a layman, if you can just help us understand how does this new products help our clients, help our customers? How does it help Elecon, some technical and market potential for these products, please?

Narasimhan Raghunatha — Chief Financial Officer

So Mr. Head of our R&D stay, Mr. [Indecipherable] he will answer that question.

Unidentified Speaker —

Yes,. Good evening. Just producing the new product or introducing the new product in the market, we are constantly looking for the market requirement as well as the cut from the customer point of view. So nowadays, the efficiency is more important from the customer point of view. So we are optimizing our product. We are always boosting the — covering the high-efficiency product and the high-quality product, so we are upgrading our product as well as the are encouraging the product to generate the new revenue.

Shri Prayasvin B. Patel — Chairman and Managing Director

Can I answer this in a different way? First of all, there are products which meet the requirements of the customer. And then there are new developments that take place because the processes of the plants go through a change. There are improvements in the process to bring in efficiency overall in manufacturing, let’s say, cement, steel, etc,. And for that, there are new applications that get generated. There also we get involved in new developments, which then are transferred to other customers in similar kind of businesses. So these all products that have been developed recently will give additional opportunities to us in bringing down the cost in manufacturing for us as well as meeting the requirements of the customer. Optimizing is the way to go in this.

Pratik Kothari — Unique PMS — Analyst

Fair enough. Good one, sir. So my second question is on the MHC. And I’m asking this in the context of recently Titan Group announcing or guiding for some 25% growth in the coming year, Indian Railway is talking about adding more that and pipes to their pipeline. Coal India wants to increase its production with 50% over the next two, three years. So can this be a dark horse, which can maybe surprise us on the upside just your outlook on MHC and given the bad experience that we have had for the last 5, 10 years, are we prepared if such opportunity comes in for us to capture?

Shri Prayasvin B. Patel — Chairman and Managing Director

Definitely. As a matter of fact, we are sharpening our clause to make a tile. So we are definitely looking at these opportunities. While we sell our products, we want to make sure that we don’t let any opportunities go by where we can manufacture and deliver things where we can make profits.

Unidentified Speaker —

Good one.

Pratik Kothari — Unique PMS — Analyst

Thank you and all the way

Shri Prayasvin B. Patel — Chairman and Managing Director

Thanks, Jay.

Operator

Thank you. The next question is from the line of Shikha from Equity Capital

Shikha Mehta — Equity Capital — Analyst

Congratulations on a set of numbers. I have a few questions. I had a few bookkeeping questions, sir. One of the follow-up to what you already said about the one-off expenses on the gross on the gross profit side. So is that the only reason for an increase in cost of goods? Or is there any other reason because quarter-on-quarter has gone from 44% to around 50%

Shri Prayasvin B. Patel — Chairman and Managing Director

Yes. That is only cost for this year when you see the reduction in the gross margin.

Shikha Mehta — Equity Capital — Analyst

So that is the only reason for the reduction of the cost.

Shri Prayasvin B. Patel — Chairman and Managing Director

Yes.

Shikha Mehta — Equity Capital — Analyst

So on the employee cost, — is there anything specific by our employees also come down substantially quarter-on-quarter. — year-on-year?

Shri Prayasvin B. Patel — Chairman and Managing Director

Yes. The reason is because when we are making a provision on a quarter-on-quarter basis for rutile and cement that we are doing the estimate based on the previous year and whatever the increment of appraisal process taken care for the current year. But while we did the curvaluation at the end of the year, then we find that instead of having the liability we are turning asset for a gradual lens. If you could refer our balance in that the provision for gradually last week was there this year instead of having the provision or liability, it is an asset for us. That is a one-off there, which is both put together is coming to nearly INR187 crores — and then we generally are doing the provision for the performance bonus on a quarter-on-quarter basis. But then when we work out at the end of the year, — so that was not worked out to that level. And that is also having the impact of nearly INR one crores for that. So both put to cap is coming to near 283rounding of INR three crores for…

Shikha Mehta — Equity Capital — Analyst

Okay. Understood. And sir, if I could just push in one another question. Can you give me utilization levels on the MIC among the GoBusiness currently be..

Shri Prayasvin B. Patel — Chairman and Managing Director

So our utilizer for gear is 70% plus capacity utilization. — we have ample space available for the capacity to do utilize that have been presently considered our strategy. So we are at least present our utilization is nearly 3% to 4%.

Shikha Mehta — Equity Capital — Analyst

Okay. But sir, without any major capex coming this year, how do you expect to be 17% on the year side?

Shri Prayasvin B. Patel — Chairman and Managing Director

So far as the capex is concerned, we have to build some of the machines because all the masses do not have the same capacity of manufacturing. So those may order to go major capex, but somewhere we have to fill the gap for the mucin capacity or cooling capacity. So if you have — if you have heard our earlier calls, this year, we are planning to have the capex of nearly INR100 crores and our — that is what we have done over the period of two years. say on the revenue visibility and other processes, we are just to the exhibition of this product.

Shikha Mehta — Equity Capital — Analyst

So the INR100 crore capex look from FY ’25 onwards, right? Or will that start showing up in FY ’24 itself?

Shri Prayasvin B. Patel — Chairman and Managing Director

It will be there in this year also. That is the new year to 2024.

Shikha Mehta — Equity Capital — Analyst

Okay. Okay. So maybe — so how much will be visible in FY ’24?

Shri Prayasvin B. Patel — Chairman and Managing Director

24, we are estimating that capex of nearly INR50 crores to INR60 crores.

Shikha Mehta — Equity Capital — Analyst

Okay. And this will be utilized in FY ’24?

Shri Prayasvin B. Patel — Chairman and Managing Director

So it will get utilized from FY ’25 because being FY ’24, we will install the market, but the full utilization will be in the next year, FY ’20.

Shikha Mehta — Equity Capital — Analyst

Okay. Okay. And on our current machinery, we can utilize how much capacity maxed.

Shri Prayasvin B. Patel — Chairman and Managing Director

We can — generally, we can go up to 85% to 90%, not beyond that because something will not be always we can ask to the maximize, but we can optimize up to 85% are… We can generate a today, we are 1,000 crores. Then we can additionally generate another INR300 crores for that. And if you do some more optimism outsourcing some of the activities, we can go up to INR1,400 crores to INR1,500 crores.

Shikha Mehta — Equity Capital — Analyst

Okay. But your business the same way to 1,700. So the balance will come from there than overseas? Or how will that be?

Shri Prayasvin B. Patel — Chairman and Managing Director

Narasimhan, I can’t get to your question, please

Shikha Mehta — Equity Capital — Analyst

So on our current capacity, you said by outsourcing and certain debottlenecking or whatever we can beat around 1,500. So the balance 200 million that we’re expecting on our car business from where will that..

Narasimhan Raghunatha — Chief Financial Officer

All our work is a self-sufficient to do the assembly work and other ways. Okay. So 200 300 on the gear business, we’re expecting over.

Shri Prayasvin B. Patel — Chairman and Managing Director

That INR1,500 what we are talking that we are talking about here.

Unidentified Speaker —

Right. Okay. Got it.

Shikha Mehta — Equity Capital — Analyst

Got it. Understood.

Operator

Thank you. The next question is from the line of Sunil Kothari from Unique PMS.

Sunil Kothari — Unique PMS — Analyst

Congrats present by a team for Is a good number.

Shri Prayasvin B. Patel — Chairman and Managing Director

Thank you and the board and on call also early at the

Sunil Kothari — Unique PMS — Analyst

Sir, my question is, is during last two, three, four years, we whatever problem we were facing doing of the last one decade. We are successfully and very successfully completed all the achievements and goals we were having like loss-making projects removed debt has been reduced or almost we are cash positive. So what is your overall objective for next one to three years? Where you feel internally you can improve or where you feel your time you’ll be devoting for recurring gain where you feel it’s prepared for maybe next five, seven years.

Shri Prayasvin B. Patel — Chairman and Managing Director

It’s a very good question because I would have expected this from at least investors who are planning to be with us on a long-term basis. The interesting part is that now that we have achieved more or less all our goals, our intention would be to develop certain products, which today, we are not there. So we have one of the widest range of products in the gear industry. There are a few products which are missing, which I believe we should develop them. That is one. The other one would be to look for opportunities of the road for further growing our businesses because we should not be domestic do now need to be a global player, a global player who has presence in very many countries because that is the way to go and that is the way to hedge against a recession, which could be limited to a particular contract. So the intention would be that you expand or grow in countries where you see hypotension. I would say that Europe and in the United States are areas where we need to look for other opportunities and grow our business. So look for acquisitions, look for strategic tie-ups and so forth because the we would like to grow and grow at a reasonably courage el does that answer your question?

Sunil Kothari — Unique PMS — Analyst

So where you feel for preparing for those opportunities, what we required to do internally, maybe in some of RNs, design department, assets, software side, other side. which are the areas where you feel you require to invest and increase those capabilities?

Shri Prayasvin B. Patel — Chairman and Managing Director

Basically, I would put it this way that as long as R&D is concerned, we are very well equipped. As a matter of fact, technologically, we are so advanced that we can sell technology to other countries, even in Europe and United States. Okay. So competency wise, we are, I would say, second to none. As long as the challenges that we would come across would be manpower of our own, which would be at the senior level as well as competent people in manufacturing and in financial services…

Sunil Kothari — Unique PMS — Analyst

A focus area of loss.

Shri Prayasvin B. Patel — Chairman and Managing Director

Yes. And those are the areas where we are trying to develop a team which would be ready in case there are opportunities that would arise, then we will deploy them in the international arena that ever that is a need.

Sunil Kothari — Unique PMS — Analyst

Good luck, and thank you very much.

Shri Prayasvin B. Patel — Chairman and Managing Director

Thank you.

Operator

Thank you. The next question is from the line of Nasyar Parikh from Native Capital. Kindly proceed.

Naysar Parikh — Native Capital — Analyst

Yeah, hi, thanks for the opportunity. Sir, first question is on the replacement market or the aftermarket on the aftermarket side. So what percentage would be aftermarket for you? And secondly, when you look at your — how much of that is actually new customer, new installations versus actual replacement of some of the older deals

Shri Prayasvin B. Patel — Chairman and Managing Director

No. Normally, our replacement market constitutes anywhere between 20% to 30%.

Naysar Parikh — Native Capital — Analyst

Okay.

Shri Prayasvin B. Patel — Chairman and Managing Director

The new customers, I would put it this way that almost 70% of our customers are repeat customers. But there is always a hunt to look for new opportunities, new customers to bring them in our fold even to bring the competitors’ customers into our fold so that we can grow our business…

Naysar Parikh — Native Capital — Analyst

Got it. Understood. And on the replacement side, right, you track would say if we sold 100 gears and 100 are getting replaced it year, out of that, how much actually came to you versus how much went to competition? Like what percentage is your payer something on things that are getting replaced…

Shri Prayasvin B. Patel — Chairman and Managing Director

Normally, 90% of the customers who have additionally bought the gearbox from Elecon would come back to Elia.

Naysar Parikh — Native Capital — Analyst

Okay.

Shri Prayasvin B. Patel — Chairman and Managing Director

Maybe more than 90%, 95% of them will be coming back to the same manufacturer because there are peculiarities — and therefore, the customer is the installation is very critical, he will not take any chances. It is the same as in automobile, you normally go back to the manufacturer to buy these papers, something similar to that.

Naysar Parikh — Native Capital — Analyst

Got it. And last question, just on the — you mentioned on the marine side as well as on the EV side that obviously discussions are in are going on and things like that. So any update on those two verticals?

Shri Prayasvin B. Patel — Chairman and Managing Director

Yes, on the marine side, we’ve had some opportunities that we have been able to harness in Europe where there are companies who want to get their products manufactured by us. We’ve developed a few models for them, and they seem to be highly pleased and the opportunities look to be promising. However, on the — on the domestic front also, we see a good opportunity coming our way, okay? — even on the defense side, the the Indian Navy intends to reorder certain ships identical or similar to the ones that have been supplied in the past, where we would become the preferred gearbox supplier. So the opportunity seems to be quite high as long as the commercial ships are concerned, as I told you, it is getting materialized. — as long as maybe is concerned, it may take some time before it actually comes up.

Naysar Parikh — Native Capital — Analyst

Anything on EV?

Shri Prayasvin B. Patel — Chairman and Managing Director

Okay. Sorry, I’m sorry, can you please repeat that sentence?

Naysar Parikh — Native Capital — Analyst

Sorry, I was saying anything on the EV side?

Shri Prayasvin B. Patel — Chairman and Managing Director

EV side? Not really because though we have been trying to make ingots. The sizes seem to be a bit smaller for us. considering that we want to manufacture them in master, the size, we normally produce much larger diameter of gears compared to what they would require

Naysar Parikh — Native Capital — Analyst

Okay. Thank you so much

Operator

Thank you. The next question is from the line of Mahesh Bendre from LIC Mutual Fund. Kindly proceed.

Mahesh Bendre — LIC Mutual Fund — Analyst

Thank you so much for the opportunity. So this year, we have done revenue of around INR50 crores, 100 crores. And next year, we are talking about INR2,000 crores. So incrementally INR500 crores of revenue, I mean, from where we plan to add this, is it domestic market, international market, so just a draw view.

Shri Prayasvin B. Patel — Chairman and Managing Director

The — naturally, it is going to come from both, okay. The domestic market is where — and we see that the sector will give us reasonably could August because there are new requirements that have come up project orders, which would help us boost our turnover to a large extent as well as exports will also give us a big thrust in the foreign markets further.

Mahesh Bendre — LIC Mutual Fund — Analyst

So these orders are in hand or probably we think we will get these orders in this quarter or next quarter?

Shri Prayasvin B. Patel — Chairman and Managing Director

These orders are not in hand, but we are a preferred supplier to the clients who have got these orders. which means the companies who have got these orders. For them, we are one of the preferred suppliers, and we have supplied them similar kind of gearboxes in the past. — and they seem to be extremely happy with our delivery and performance of the gear units. And therefore, we feel very strongly that they would be finalized in our favor.

Mahesh Bendre — LIC Mutual Fund — Analyst

Sure, sir. Thank you so much, sir.

Operator

Thank you. The next question is from the line of Girish Meta from Diner Capital Capital. Kindly proceed.

Girish Meta — Diner Capital — Analyst

Thanks for the opportunity. So just wanted to under– I just wanted to understand, since we have launched six new products, so we have two categories of products like Cato division also and in Intesa division also. — envision is around 55% to 60% of our overall sales and which are high-margin products. So sir, can you help us to understand that these new products falls into which category?

Shri Prayasvin B. Patel — Chairman and Managing Director

They fall into both categories. the E.ON CDs is the catalog products, while all the others fall into the specialized product category.

Girish Meta — Diner Capital — Analyst

Okay. Okay. Okay. And sir, one more thing I wanted to understand. Since we are entering into all these new products. So our competitors like antigen, PD, all these companies, they are already there into these categories, we are going into completely a different new set of products.

Shri Prayasvin B. Patel — Chairman and Managing Director

Unfortunately, as I told you earlier, we have one of the widest range. Yes, they are all into catalog gears for sure. But we have a high level of specialization like the vertical roller mill gear boxes, we are only competing with in then the dual tank gear boxes, we only compete with lenders. So there are planetary gear boxes, we only compete with premium. So though we are there in each and every type and variety. Our competition quite often is limited to one or two and they need not be the same party all the time. And we also are focusing a lot on import substitution, and we make gear boxes, which quite often are not possible for the other manufacturers to manufacture.

Girish Meta — Diner Capital — Analyst

Okay. So that falls into the engineered products. So what we are hoping to the OEM tire in the overseas market, that would be mainly into the engineered products.

Shri Prayasvin B. Patel — Chairman and Managing Director

Yes.

Girish Meta — Diner Capital — Analyst

Okay. Okay. And sir, one last question. Can you help me to understand the sector-wise sales in this last quarter. So how do you have an out in terms of power payments [Indecipherable].

Shri Prayasvin B. Patel — Chairman and Managing Director

So last quarter, we don’t have to see the sector-wise sales, but I think I’ll keep a note of that going forward through [Indecipherable] for the whole year.

Girish Meta — Diner Capital — Analyst

Okay. So can you understand with that also that’s fine.

Shri Prayasvin B. Patel — Chairman and Managing Director

Yes. At the consol level, if you see in the year, our — one of the major contributor was fueled from where we got a 13.8% sales from sugar 6.8%, cement, 9.7%, power 8.1%. MC equipment 7%. And marine [Indecipherable] and the mining was a three samples.

Girish Meta — Diner Capital — Analyst

Okay. Thank you, sir. That’s it for…

Shri Prayasvin B. Patel — Chairman and Managing Director

We will send you a pie chart if required by yield. There is a presentation also.

Girish Meta — Diner Capital — Analyst

Okay. Okay. Thank you.

Sonali Shah — MK Investment Managers — Analyst

Yeah. Hi, thank you for the opportunity. Sir, first question is our order book in the Go division has been flat since the last three quarters or so. Is there some kind of challenge in getting new orders, incrementing orders over year? And what seems to be giving us the confidence since the order book is not growing, what is giving us the confidence of achieving INR1,700 crores of top line For FY ’24?

Shri Prayasvin B. Patel — Chairman and Managing Director

I don’t understand how you are saying it is flat. This is the orders are not there, how are we going to produce so much. So you know–

Sonali Shah — MK Investment Managers — Analyst

In the perspective that are closing [Indecipherable] 23 on INR570 crores for our division. And at the beginning of the year around you’re also on INR500-odd crores.

Shri Prayasvin B. Patel — Chairman and Managing Director

The reason is normally the still oversee, we have a very fast turnaround. So the float that we see of INR500 crores, 569 crores is a very healthy shoot. Because you don’t want too many because in the prices of steel keep on rating, then you have a risk of increasing your COGS. On the other hand, you don’t want less number of orders, so because then you can’t plan your production properly. So this is an ideal set and which is also [Indecipherable]. So in our catalog product– Mr. Nanda is our head or Glu product, we are able to deliver within two weeks’ time, basically. That also is a major change which has really brought in our catalog area basically. So that has a turnaround very fast enough. So that’s why you are looking at these numbers, wavering on that. That’s all it is. But as chairman has mentioned, our order book position at the end of the year is very healthy. And going forward, we should have — will continue on the same line.

Sonali Shah — MK Investment Managers — Analyst

All right, sir. Fair enough. And second is actually more of a clarification. If I were to rely back calculate the numbers of INR2,000 crores. So for our gear position in the domestic business ex of exports, are we expecting only INR900 crores of top line for F ’24, which is nearly a 3% Y-O-Y growth.

Shri Prayasvin B. Patel — Chairman and Managing Director

No. How you calculate, I don’t know from where you got a number. INR1,700 crores.

Sonali Shah — MK Investment Managers — Analyst

Yes, INR700 crores would be included by overseas subsidiary for deals as well as my exports, right?

Shri Prayasvin B. Patel — Chairman and Managing Director

Yes, correct. Yes.

Sonali Shah — MK Investment Managers — Analyst

So if I recollect correctly, you had mentioned a few quarters back in one of the con calls, do now INR1,500 crores of top line in a stand-alone [Indecipherable] and INR500 crores at a consol level — sorry, so to INR2,000 crores.

Shri Prayasvin B. Patel — Chairman and Managing Director

Yes, that INR1,500 crores includes MHC divisions.

Sonali Shah — MK Investment Managers — Analyst

Yes. So if I was to took away the MHC division.

Shri Prayasvin B. Patel — Chairman and Managing Director

[Indecipherable]

Sonali Shah — MK Investment Managers — Analyst

Yes. And then if I account for — because you also mentioned that exports was overseas will end up going to around 40% in F ’24. So if I skip that over, I end up with only INR900 crores of top line for the domestic gear position.

Shri Prayasvin B. Patel — Chairman and Managing Director

For this year or next year, you are talking about.

Sonali Shah — MK Investment Managers — Analyst

For FY ’24.

Shri Prayasvin B. Patel — Chairman and Managing Director

No, FY ’24, we are going to end up our year at INR1,200 crores on a stand-alone.

Sonali Shah — MK Investment Managers — Analyst

[Indecipherable] exports plus my domestic India business, correct?

Shri Prayasvin B. Patel — Chairman and Managing Director

Yes, correct. Correct.

Sonali Shah — MK Investment Managers — Analyst

All right. Thank you so much, sir.

Operator

Thank you. The next question is from the line of Mohit Kumar from ICI Securities. Kindly proceed.

Mohit Kumar — ICI Securities — Analyst

Good evening, sir. And congratulations on a very good quarter and a fantastic year.

Operator

Mr. Kumar, to interrupt, sir Can hear you clearly.

Mohit Kumar — ICI Securities — Analyst

Am I audible now?

Shri Prayasvin B. Patel — Chairman and Managing Director

Yes, I can hear you.

Mohit Kumar — ICI Securities — Analyst

Is there any opportunity in the adjacent product segment or to enter in the new customer segment? Which — and the later question is, do you think the wind and power segment will pick up in FY ’24 and FY ’25 materially for you?

Shri Prayasvin B. Patel — Chairman and Managing Director

Power segment, yes, in the wind segment, we have purposely exited from that area and the reason being that it is a very risky business. Therefore, after indulging into it, we ultimately decided that we wanted to exit that business, and we have been able to do so, without getting ourselves hurt.

Mohit Kumar — ICI Securities — Analyst

I’m asking this question because when we support likely to make it back likely to pick up going forward. So I’m trying to figure out whether this is a very large opportunity? Or do you like to reenter the segment?

Shri Prayasvin B. Patel — Chairman and Managing Director

We would not like to reenter the segment. The reason being that– First of all, as you know, wind is subsidized by the government, okay? Because on its own, it is not able to hold ground unless it is subsidized. And it depends on the government policies. Apart from that, we have seen why fluctuations in demand which also causes a lot of issues.

Mohit Kumar — ICI Securities — Analyst

Understood. Sir, my second question, what was the total market size for the year in FY ’23? And what are the market share? And the related question is that how much is the import of theirs in the domestic market, if you have that number ready?

Shri Prayasvin B. Patel — Chairman and Managing Director

Can we send it to you by e-mail.

Mohit Kumar — ICI Securities — Analyst

Sure, sir. Sure, sure, sir. Those are my two questions, sir. Thank you.

Shri Prayasvin B. Patel — Chairman and Managing Director

All I can say is that we have 34% of the organized market in India. Okay. So if you extrapolate, you will know that how much is the overall organized market in India. And the import figures, we do not have handy, but one can always pull them out and send it to you.

Mohit Kumar — ICI Securities — Analyst

Is it possible to substitute this entirely in tally in this country? Or do you think that import as a large part will it still be imported?

Shri Prayasvin B. Patel — Chairman and Managing Director

I would say that a very large part is being imported. Majority of the parts which are being — are the gearboxes, which are being imported are the wind turbine gear boxes. As well as extremely large cement the gear units, which have been in

Mohit Kumar — ICI Securities — Analyst

Understood thank you.

Operator

Thank you. The next question is from the line of Ankit Kumar from Alpha Capital. Kindly proceed.

Ankit Kumar — Alpha Capital — Analyst

Hello, sir. Congrats on a very good set of numbers. Sir, my first question is on the capital allocation plan. So we are now debt free. We are making great cash flow from operations. We don’t have much capex plans also for the next two years. So — but this year, we haven’t given much dividend. So any thoughts on do you want to increase dividend or we look for some M&A for the growth in exports.

Shri Prayasvin B. Patel — Chairman and Managing Director

I thought that we gave good dividends. 100% is not a good dividend

Ankit Kumar — Alpha Capital — Analyst

So, I mean, in terms of dividend payout ratio, so somewhere to EPS.

Shri Prayasvin B. Patel — Chairman and Managing Director

That’s good. See, I would put it this way that to me being one of the largest shareholders, we believe in being a bit conservative because what we believe is that the company retains cash, then if there are other opportunities that come their way, then we would be able to deploy them whether it is any type of requirements in an urgency or on a normal level. So that is the reason why we are going a bit slow. But I’m sure that we will fall in line and improve our dividend payout ratio over a period of time.

Ankit Kumar — Alpha Capital — Analyst

Sure, sir. That’s great to know. And sir, second question is on the guidance of INR2,000 crores revenue. This basically means INR500 crores per quarter. But in this year, we haven’t done INR500 crores in any of the quarters, even in — not in our best quarter. So do you think this 500 can be for the next year? Or do you think this will be two heavy and the things way faster net to

Shri Prayasvin B. Patel — Chairman and Managing Director

It will — it will catch momentum over a period of time. So I believe that you will start seeing the improvements after the first or after 1.5 quarters.

Ankit Kumar — Alpha Capital — Analyst

Because, sir, in general, you were saying that Q2 and Q4 are heavy. So that is like will continue in FY ’24 also?

Shri Prayasvin B. Patel — Chairman and Managing Director

Yes. Normally, it is like the IP always the last few over already principle.

Ankit Kumar — Alpha Capital — Analyst

Sure, sir. And sir, on margin, can we make some improvements? Or do you think this 22% win sustain? Or can we improve because now things are looking up

Shri Prayasvin B. Patel — Chairman and Managing Director

Margins will hover around 22%. I mean, the increase, they will increase by one or two points maximum. Okay. The reason being that why you keep on trying to improve your top line. The utilization benefits have already been derived. — plus it will also depend on the product mix.

Ankit Kumar — Alpha Capital — Analyst

Sure, sir. Thank you, and all the best.

Shri Prayasvin B. Patel — Chairman and Managing Director

The other thing is we — sorry, okay.

Operator

Thank you. The next question is from the line of Vikram Datwani from Nuvama Wealth Management. Kindly proceed

Vikram Datwani — Nuvama Wealth Management — Analyst

Good evening, and congratulations on a strong quarter. I have two questions. First one is a data point with a follow-up. Could you please share the subsidiary or the MF number for the quarter. As in the last quarter, we mentioned due to the holiday period, we saw lesser order bookings than we would have liked. So has that situation improved?

Narasimhan Raghunatha — Chief Financial Officer

Yes. Our overseas order pending order portion and March 31, it is INR80 crores we got up.

Vikram Datwani — Nuvama Wealth Management — Analyst

Okay. Okay. Thank you. And my second question is on the margins in the subsidiary business. So if I look at the margins in this quarter, it seems like they took a slight dip — so how should we look at this going forward? Was there any onetime costs related to ramping up of operations that impacted margins this quarter?

Narasimhan Raghunatha — Chief Financial Officer

No, it is not because of any onetime cost in the overseas market, there is nothing such kind of things. But if we have heard that in overseas market, the inflation has gone up. So certain costs have also gone up in the process, which is very minimum. And at the same time, there was a challenge in the European countries. So considering that, we were having this — and further, we had some business development costs also over there, and we have put some marketing team. We started building marketing being overseas. So that is just having the impact lower

Vikram Datwani — Nuvama Wealth Management — Analyst

So do we see this margin normalizing going forward at what percent would you say?

Narasimhan Raghunatha — Chief Financial Officer

Next year, our guidance is 22% because we are now going for — on a business development and the marketing strategy, what is where we able to stand. We also have to dispute some key employees over there. to ascertain new opportunities and new markets. So we also have some costs related to the employees in current year as for ’23-’24 for that. So going forward, we are definitely once we get stabilized in terms of our efforts for marketing, we can expect that improvement in the margin. However, because we are looking for the OEM supplies going forward, — so OEM will not have the same margin growth generally, we are looking for in the replacement market. So it will not have that kind of the improvement based on the improvement in the [inaudible].

Vikram Datwani — Nuvama Wealth Management — Analyst

Okay. Thank you for taking my question, and all the best.

Operator

Thank you. The next question is from the line of Riya from Aequitas Investment. Kindly proceed.

Riya Mehta — Aequitas Investment — Analyst

My first question is in regard to the current pipeline, what is the order backlog in auto or right now?

M.M. Nanda — Head of Gear Division

Order backlog that ended 31st March 2023 is INR714 crores on a consol level.

Riya Mehta — Aequitas Investment — Analyst

And for subsidiary?

M.M. Nanda — Head of Gear Division

For subsidiary, it is INR80 crores

Riya Mehta — Aequitas Investment — Analyst

And other inflow for the quarter?

M.M. Nanda — Head of Gear Division

Order inflow for the quarter of consol level, it is INR419 crore.

Riya Mehta — Aequitas Investment — Analyst

And this is majorly could you help me with sector this order book of prices of Apart from, I think steel and power being the major contributor, what sector

M.M. Nanda — Head of Gear Division

Sugar is one of them. So I don’t know that this complete breakup, but I can give that the major order from the steel in men, sugar, matter handling — these are in power. These are the five sectors where is there. But what I can just for that order intake for Q4 on a sector-wise also I can do that.

Riya Mehta — Aequitas Investment — Analyst

And you talk the pipeline, are we seeing it from the same sector. Or any newer in–

M.M. Nanda — Head of Gear Division

Should continue. The same trend should continue the way scenarios of emerging the order inflow will be coming from these sectors only which has been mentioned On quarter-on-quarter basis, there may be a fluctuation will be rate based on how the cyclical of the industry trend is.

Riya Mehta — Aequitas Investment — Analyst

Sure, Sir. Thank you. Thank you so much

Operator

Thank you. The next question is from the line of Devang Patel from Sameeksha Capital. Kindly proceed.

Devang Patel — Sameeksha Capital — Analyst

Sir, on margin you mentioned some improvement can happen on the working capital also. If you can talk about how much improvement we can see we’ve seen some improvement this year. Over the next two, three years, what kind of improvement can we see in the cash flows in cake?

Narasimhan Raghunatha — Chief Financial Officer

So for the working capital is concerned, we can transit between 70 to 80 days. Worrying about that considering the quarter-on-quarter basis. But I think consider engineering industry in which we are there, and other factors that 70 is an ideal thing, which can do. But at just optimizing if you are to optimize by that way, we can be between 70 to 80 anywhere.

Devang Patel — Sameeksha Capital — Analyst

Okay. And in the INR2,000 crore consolidated revenue, how much is the revenue being generated from our overseas subsidiaries?

Narasimhan Raghunatha — Chief Financial Officer

So versus the year of INR1,500 crores, we have given a guidance of 15 crores standalone and INR500 crores on the overseas.

Devang Patel — Sameeksha Capital — Analyst

So that will imply a steep bump in revenue from them next year?

Narasimhan Raghunatha — Chief Financial Officer

Yes, we are looking to some traction also in the overseas. We are the way in which we are putting our efforts on the marketing side and business development side. We are looking for the good traction in western countries.

Devang Patel — Sameeksha Capital — Analyst

Okay. And you mentioned getting OEM orders, so this will be supplied from our India business or from the overseas subsidiaries?

Narasimhan Raghunatha — Chief Financial Officer

Our manufacturer will be taken care from India. And they — we may surpass finish or it may be in the peak form where they will do the assembly over there and then supply to the customer, depending upon what the requirement of the customer.

Devang Patel — Sameeksha Capital — Analyst

Okay. And you mentioned getting OEM orders, so this will be supplied from our India business or from the overseas subsidiaries?

Narasimhan Raghunatha — Chief Financial Officer

Our manufacturer will be taken care from India. And they — we may surpass finish or it may be in the peak form where they will do the assembly over there and then supply to the customer, depending upon what the requirement of the customer.

Operator

Thank you. The next question is from the line of Anish Gavali from Girik Capital.

Anish Gavali — Girik Capital — Analyst

Hi sir, Good Evening. Thank you for the opportunity. Congratulations for the good numbers. So, my question is around the tax rate. So, our tax rate has like been in the range of 20-21%. I just want to understand like going forward with the increase in revenue from the international market, etc,. like how do you see the tax rate going forward? Or will it continue to be in this range?

Shri Prayasvin B. Patel — Chairman and Managing Director

That one [Indecipherable] because if you see in U.K., the [Indecipherable] increase from 19% to 25%. So that will depend [Indecipherable] it will be ranging between 25 — 21 to 25% or so, at the console level. But at the standalone level, it will be 25% because we are in the new tech season.

Anish Gavali — Girik Capital — Analyst

Okay, sir. Thank you so much, sir for answering my questions.

Operator

The next question is from the line of [Indecipherable] from Praj Financial. Kindly proceed.

Unidentified Participant — — Analyst

Hi sir, just wanted to know what’s our current capacity in the division? And how do we plan to take forward from here because as we mentioned, we are already at around 70% utilization. And at peak, we will be doing around 80%, 85% to 90%. So how is the plan in the division, how will we be expanding the capacity and what are our current capacity?

Shri Prayasvin B. Patel — Chairman and Managing Director

We normally have not exploded to a large extent subcontract. Subcontracting would give us additional capacities that will be available. there might be a requirement of certain key equipment machine tools to be further invested in in the near future as and when the requirement comes up. But I’m sure that with a medium of investment, we would be able to up the capacity if

Unidentified Participant — — Analyst

What would be our current capacity in the years, sir?

Shri Prayasvin B. Patel — Chairman and Managing Director

Right now, as you said, it is at 70% utilization. And we may require some bridging equipments or machine tools, which we are planning to invest INR100 crores in the next two years, which would help us further enhance our capacities. But I would say the maximum [Indecipherable] is 85% in-house and with subcontracting, it will be sizable increase that would be possible.

Operator

The next question is from the line of Karthi from [Indecipherable]

Unidentified Participant — — Analyst

Sir, Good Evening. Thanks very much for the very interesting commentary. I would like to

Engage you a bit on the comment you made about the pulse and paper machinery manufacturers whom you are in talks with. Just trying to understand the scope of the [Indecipherable]. One is typically this would be the OEM himself? Or would this be the EPC engineer for it? And how exactly would be saying to and to some clarity on that would help?

Shri Prayasvin B. Patel — Chairman and Managing Director

Basically, we would be supplying to OEMs, we would supply an entire plant — plant for manufacturing paper from pulp.

Unidentified Participant — — Analyst

Great. And which would mean what would be the scope that say 2%, 3% of our project cost could accrue to you? Effectively, I’m trying to understand the number of years that could go and or different types of years that could grow?

Shri Prayasvin B. Patel — Chairman and Managing Director

It is difficult to say because it will depend on what kind of plant, what type of paper, etc,. etc,. So, it is difficult to comprehend. But — we would be the sole supplier of gear in that plant.

Operator

Thank you. The next question is from the line of Neeraj from White [Indecipherable] Investment. Kindly proceed.

Unidentified Participant — — Analyst

Just two questions, one on the Europe market. Can you give some color on your marketing efforts in Europe and how they are picking up?

Shri Prayasvin B. Patel — Chairman and Managing Director

I’m sorry, can you repeat the question? I didn’t hear it.

Unidentified Participant — — Analyst

Sir, can you give some color on the marketing efforts that you’re doing on the Europe side? And how do you see it picking up and approval process, etc,.?

Shri Prayasvin B. Patel — Chairman and Managing Director

Basically, what we are trying to do is we are trying to deploy more people in the marketing as well as the are also putting in a lot of effort to reenergize our websites, do digital marketing, do trade shows, etc,. so that there is a big trust awareness. And as I said, we are continuously knocking those of OEMs and other customers from where we can get more business.

Unidentified Participant — — Analyst

But your estimate is by showing that you’ll have a reasonable traction in the export. Also in the past, you have said that export does take 15 to 20 months of the traction to start. So, is it fair to say that you have a reasonable understanding of how much, say, maybe six months you’ll start getting orders from the Europe side?

Shri Prayasvin B. Patel — Chairman and Managing Director

So, this is based on estimates. It is very difficult to comprise and as to when you will get the breakthrough from a customer. ends on various opportunities, which are there, the orders that he has on hand his requirements, how successful has been your competition in supplying equipment to them, etc,. — so it’s very difficult to comprehend. The intention of ours is to keep on pursuing till we find success.

Unidentified Participant — — Analyst

Okay. And the third question on the defense side. Can you give some color on when you see the order flow to start and when a large order for the Indian defense come to you? Or when can the government start deciding with the large orders that may flow to you in future?

Shri Prayasvin B. Patel — Chairman and Managing Director

Well, as soon as China shakes us up, there will be more orders coming to — what I’m trying to say is it is very difficult. The defense sector or the defense ministry has its own processes. However, what we have found with this present government is that they are more dynamic and faster than the previous governments in ordering equipment. And therefore, we are hopeful that very soon we will end up with reasonable amount performance. And of course, Make in India is something that is making us very proud of the present government.

Operator

Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to the management for closing comments.

Shri Prayasvin B. Patel — Chairman and Managing Director

Well, thank you for showing great interest in our company. We have been trying to do our best. All I can say is that the economy is right now favoring us. We believe that the economy will grow at 6.5%, which will give us great opportunities for the gear sector as well as the material handling sector. And right now, we are fully organized to encase, the opportunities that come hardware. On the other hand, the company is trying very hard to put the trust in exports because that is where the future lies. And if the company has to grow and grow in a large way, we will have to go for additional exports, and that is where I would say the company needs to focus on, but not to neglect the domestic — so this is what the strategy is. On the other hand, Elecon — a very strong R&D team has been able to develop various products and continuously is trying to upgrade it stay, upgrade its products, upgrade its manufacturing setup, to be at the edge of technology. We are second to none. Today, we are at a point where we can sell technology to the rest of the world. This has happened because we’ve had a lot of experience, which has come our way because we are in a country where the population is very high and there are great opportunities that come in various fields of cement, steel, power, all this has given us great amount of experience, great amount of visibility. And I’m sure that going forward, we will be able to do much better, not only in the domestic market but also in the international market. So, thank you all for being with us, and we hope to see you on the next con call also. Thank you.

Operator

[Operator Closing Remarks]