Exicom Tele-Systems Ltd (NSE: EXICOM) Q1 2026 Earnings Call dated Aug. 13, 2025
Corporate Participants:
Unidentified Speaker
Anant Nahata — Managing Director and Chief Executive Officer
Shiraz Khanna — Chief Financial Officer
Analysts:
Unidentified Participant
Rahul Dani — Analyst
Sahil Patani — Analyst
Samraat Jadhav — Analyst
Shashi Kant — Analyst
Sagar Gupta — Analyst
Samraat Jadhav — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Xcom Telesystem Q1FY26 earnings conference call hosted by Monarch Net Worth Capital Limited. This conference call may contain forward looking statements about the company which are based on beliefs, opinions and expectations of the company as on date of this call. The statements are not guaranteed for future performance and involves risks and uncertainties that are difficult to predict. As a reminder, all participants line will be in listen only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touchstone phone.
Please note that this conference has been recorded. I now hand over the conference to Mr. Rahul Dani from Monarch Network Capital Ltd. Thank you. And over to you.
Rahul Dani — Analyst
Yeah. Thank you. Pari. Good morning everyone. On behalf of Monarch Network Capital, it’s a pleasure to host the senior management of LTCOM Telesystems. We have with us Sanath Natha, Managing Director of the company. We have Mr. Sidar Shanna, CFO of the company. We will start the call with opening remarks from the management and then move to Q and A. Thank you. And over to you sir.
Anant Nahata — Managing Director and Chief Executive Officer
Thank you. Thank you Rahul. So good morning to esteemed investors, shareholders and other stakeholders. This is Anant Nahata, CEO of the company. I’m also joined by our CP CFO Shiraj Khanna. So let me dive into the investor presentation which we had uploaded last night. And to begin with, the key message from our company is that we acknowledge this quarter’s performance fell short of expectations. But at the same time I would like to retaliate that this does not reflect our full potential as a company or the strong pipeline that we have today. We have the highest order book as we have ever had as a company.
We have great momentum in ev charging business which is building which we’ll talk about shortly. And we have a lot of big projects to deliver for which unfortunately could not be delivered in Q1. But the deliveries are set to lift Q2 revenue contributions and henceforth. But overall the quarter’s performance has been short of expectations. But we still remain committed to the guidance that we provided for the full year. Tritium remains a strategic investment for global growth. The turnaround is lower than expected. But early signs of rising customer confidence and their ability to invest in our new portfolio product portfolio.
The signs are encouraging. The key financials of quarter one FY26. I’ll just say the highlights. Shiraz will discuss it in detail later. Revenue of about 151 crores on a standalone basis. Adjusted EBITDA of 12.6 crores, an adjusted PAT of just about 1 crore on a standalone basis. While we say adjusted because of an exceptional item for VRs of about 100 plus employees in one of our older facilities which we are transitioning that its production to our newer facilities. That’s why that’s the adjusted exceptional item. On a consolidated basis we did revenue of about 205 crores with adjusted EBITDA of minus 38 crores and adjusted PAT of minus 71 crores.
This is primarily due to losses in our acquired subsidiary Tritium. I’m going to skip the next three four slides which which I hope you are familiar with. It talks about our company as a power management solutions company which is a common thread between our critical power and EV charger business. It talks about our end to end portfolio in both these markets via which we are able to serve entire telecom infrastructure, requirement of power solutions and lithium batteries and end to end requirement of EV charging solutions whether it’s portable 3 kilowatt charger all the way to very high power 600 kilowatt fast chargers.
I’ll directly go to Update Business Update slide so that’s slide 12 for critical power. As you are aware our business is highly dependent on growth of telecom infrastructure, particularly our critical power business division which is largely represented by the number of new build towers but also the backend telecom infrastructure, maybe the MSCs, BSCs, cable landing stations etc. Overall new tower installations remain flattish compared to Q4FY25 at about 7,500 and it was a 26% decline compared to Q1 of FY25 and that happens. As I’ve mentioned before, telecom infrastructure is a cyclical business. You see high growth in times of infrastructure investments which typically happens with new technologies such as 4G, 5G and hopefully with 6G in future and otherwise what you have is a largely replacement business with some new business which is the phase we are in right now.
Our standalone critical power revenue was about 98 crores and consolidated was 102 crores. As I mentioned this revenue is below expectations but the primary reason for this was some of the key projects we are supplying to including Bharatnet, including couple of other projects including some large lithium ion battery upgradation project. They had project level delayed delays due to approvals due to monsoons and a lot of that has shifted to Future Quarters particularly Q2. So you will see significant revenue contributions from the upcoming quarters but on the positive side, we secured major wins from Middle east, from Africa, which is giving us hope for some of our best export business this year.
We have a strong outlook given the order backlog which is more than 1500 crores. A lot of that is service in future years. But just the hardware supply orders also exceed about 1200 crores. So slide 13 highlights in critical power business the projects were delayed but we started, we did the entire solution development. The approvals are in place and we could start execution for multiple customer accounts. We secured large orders from big telcos for lithium ion batteries and this space is undergoing a shift of rapid transformation where lithium ion batteries are replacing traditional lead acid batteries.
We continued our dominance with almost 70% market share in one of the projects which was at its peak last year but still continuing towards the fag end of that project that is setting up of infrastructure in rural and remote areas. We continued our dominance in that project and we acquired some new customers, some new products. Highlight was also exports revenue from Africa and Southeast Asia contributed to 30% of our current quarter’s revenue. And in these markets also we acquired new customers and also increased wallet share of existing customers. On the update on the EV charger business, this is slide 15.
There are some great tailwinds in the EV charger business and like critical power business is dependent on telecom towers and similarly EV charger business is dependent on number of cars and electric cars and buses being sold. So in Q1 of 25 there were about 23,000 cars which were sold, which is almost 40,000 in Q1 FY26 that’s a 15% growth compared to last quarter, 72% growth quarter on quarter. And that’s because of new model launches, new premium SUV launches by major OEMs, Hyundai, Mahindra, the new models by Tata. And obviously everybody is anticipating Maruti’s launch which is going to happen fairly soon under the electric bus segment.
That’s always been a vibrant sector. But due to payment security guarantees a lot of OEMs were having challenges. The Indian government stepped in there rolled out a payment security mechanism scheme which enables states to faster deploy these electric buses. Because of that we are seeing a lot of momentum in electric buses overall. Q1 is always not the hottest quarter in automobile time around festive season, end of the calendar year is. But if you see our Q1 FY25 performance, we did on a standalone basis 33 crores versus which you know, this quarter we have done 61% more which is about 53 crores in this quarter.
That’s roughly flattish compared to Q4 of FY25. And Q4 always is the, you know, the time just around festive season and just after that is the biggest quarter for us. On a consolidated basis we did about 103 crores of revenue which includes tritium and some revenue from Southeast Asia as well. Overall we supplied more than 15,000 charges which would be by far industry leading compared to all our peers. Next slide is on policy which we kind of covered. So I’m going to move to the next slide. So key developments for EV charger business for the first time we could make an entry into electric trucking segment.
That’s partly also because PM E drive policy allows for incentives for electric trucking which was not the case before. And because of this, some truck makers are investing heavily to go electric. We secured some exclusive business with one of the largest electric trucking operators in the country. We also had an OEM win in the luxury car segment. This is one of the German luxury car automakers. They don’t sell a lot but that gives confidence on the value and the product quality that we have. Where we are not just selected by leading Indian automakers but by leading German automakers as as well.
Well, we are not just via tritium but in regions of Asia, Southeast Asia, Middle East. We are doing a lot of effort to expand our business and I’m happy to announce that for the first time an Indian company has signed which is execom. Your company has signed a global framework agreement with one of the largest clean energy players in Southeast Asia for EV chargers. Subsidy of this company is putting charging networks in countries of Malaysia, Indonesia and Thailand and these are the main countries but with a smaller footprint in some other countries. Execom tied a global firmware global framework agreement with this company and Execom Charger will go into all these countries.
We also, we are also looking for growth opportunities via new business model. We successfully have now commissioned and deployed our end to end turnkey business model where we not only supply the charger but do site construction, site surveys, installation, commissionings and a lot of ancillary work around setting up an EV charging station. This has won us business from some leading OEMs in India where the offering they’re looking for is much more than charger supply. This allows us to create differentiation and also capture bigger part of their wallet as far as investment in EV infrastructure is concerned.
We launched a new product. Every year we launched a new product but this year we launched it with a lot of fanfare. There was a Big event and we used this to invite the entire Indian EV Charger industry, be it the OEMs, be it the CPOs, be it the distributors, and took them through our new product. Its feature is differentiation and that has helped us a lot. This product not only allows us to differentiate, but this event and subsequent sales effort have led to almost six of our top 10 customers switching to this product entirely.
So this is the fastest scale up of a new product that we have seen, at least compared to historically what we have done before. Digital enablement is also key part of our EV charger portfolio. So we continue to invest in a lot of digital platforms, particularly in platforms where we are able to monitor these chargers remotely and do a lot of things digitally to keep the uptime high, which is becoming one of the key differentiators among players in the industry. And also give customers a taste of some of these digital tools which allow them to operate and maintain their infrastructure in a better way.
Next slide. Slide 18 Update on Tritium as I mentioned, Tritium turnaround is taking longer than expected, but this is a strategic investment for global footprint and we see some very positive leading indicators, I.e. customer satisfaction in a lot of our services, our product and reliability. And these scores were not high when we acquired Tritium. We see order book building of the main center product of Tritium where Tritium’s product strategy is based off, which is the product known as Triflex. We have some orders in the bag and we see pipeline continue to build for this product as we move forward.
We had almost $8 million of booking in Q1 of FY26, including repeat orders, including service orders. But hopefully we can expand this much more rapidly than we have in the past. We are confident about some of our action and that’s why we are enabling Tritium to take some industry first actions as well. For the first time in the world, Tritium announced this is industry first, at least in the electric mobility industry where we have introduced lifetime warranty on the power modules. When we consider DC charging, power modules are at heart of it. They constitute about 50% of the cost of the EV chargers and that’s the component which is prone to failure or can give you reliability if it works well.
And Tritium introduced lifetime warranty for these modules which is well received and hopefully we’ll see this message getting converted to pipeline and sales in the future quarters. Revenue by geography With Tritium we are a global company, so you see revenue distribution everywhere. We are an Indian company, the center of business will always be in India and That is still more than 50% of our business but some revenue coming up in every part of the world. It’s really about scaling up at this point. Next slide was Harmony Gen 2 and Tritium Triplex launch in India. I’ve covered this already and here are some pictures for you to see on the next slide.
Slide 21 there is general momentum just going across the business in EV charging. We have spin air going to customers through B2C channels. We won the award for Excellence in EV Charging by Nitin Gadkari, that’s our CEO for EV business receiving the award. There are a lot of customer testimonials of important stakeholders within the industry and some customers in general praising their experience with EV chargers. A lot of my friends have this EV charger who are quite like the product. So overall good momentum on the EV charging business. The last thing I want to cover is exicom’s integrated manufacturing plant which is under construction.
Hopefully we’ll be able to do SOP by October of this year. Just one second. Yeah, sorry. So on the Hyderabad plant this has developed into a stage where we can really see this as a plant. You see a lot of photos here which means it’s in advanced stages of construction and we are really hoping that we will be able to start the production here in late September early October. This plant is something we are very proud of. It will represent not only one of the leading electronic plants in the country but a lot of thinking behind Automation, Digitization, Industry 4.0 concepts which will allow us to be really high quality and lean cost manufacturer of our products.
Last slide to be covered by me before I pass it to Shiraz and then we’ll be happy to take your question and answers. Deployment of IPO funds IPO proceeds were roughly 400 crores. We spent 257 crores till March of 25, another 35 spent in Q1 and the balance as of 30 June is 108 crores. Majority of these funds will be utilized by end of September as the plant is in final stages of progress in construction. Working capital funds will see utilization in Q2. As I mentioned a lot of the key projects the revenue buildup will be from this quarter and same with R and D expenses as well.
So what we committed the use of IPO proceeds is on track for deployment and will hopefully see returns from those coming in the subsequent year. That I will thank everyone. I appreciate our patience with their company and as I mentioned we are in sectors which are high growth sectors at least The EV charging sector is a high growth sector on the top. Telecom one is a stable sector with stable cash flow, though a little bit volatile in terms of revenue as its project base. My ending remarks would be that I’m particularly excited by what we see in our pipeline, but what I see in our order book.
Yes, there’s a lot of work to do, there are challenges which we are trying to overcome, but the current quarter results does not reflect our potential and pipeline and you will see we are a leader in the segments that we operate in and we’ll see that. We hope to show you that even in the financial results in the coming quarters and years.
Thank you passing to Shiraz .
Shiraz Khanna — Chief Financial Officer
Thank you Anand and good morning to everyone. Financials Anand has already covered briefly but I’ll just go over the numbers again. Standalone revenue came down to about 151crore down by 29% quarter on quarter and 38% on year on year basis primarily due to delays in the start of BharatNet project and some of the other projects as Anand mentioned as well as some of the deferrals that we have had in battery delivery which will happen in quarter two. So as Anand said this will pick up in quarter two. The pace despite the softer top line gross margin improved to 32.7% from 21.3% last quarter which is a very healthy positive up driven by a richer product mix.
Cost optimizations that we’ve done. Adjusted EBITDA also rose to 12.6 crores which is 8.6% of the margin up from about 10.9 crores in quarter four reflecting a better operating leverage in EVSE segments. Adjusted Pads stood at 1.1 crore, about 0.7 of margin versus 4.6 crores in Q4. Moving on to consolidated basis revenue was 205 crore. We had a pretty similar revenue in EV sector. We maintained it as what was in the previous quarter. However, critical power was down because of the project start. So the Q1 quarter was down on a consolidated basis by 23% and 19% year on year reflecting a slow turnaround in at tritium along with domestic product projects.
Delay gross margin remained healthy. We were at 39.4% aided by high margin products that we sold and the geography mix that we got. Adjusted EBITDA was negative by 38.6 crore and compared to minus 17 crore in the previous quarter and this primarily of course because of tritium operational cost which continue to weigh on profitability of ours. Adjusted PAT was minus 71 crores, visible 62 crores in the previous quarter. The adjustments that we’ve done highlighted on the pages is primarily because of the FX impact which is more in terms of accounting than actual and the VRs scheme and the redundancy schemes which we did Anand mentioned in our standalone and redundancies in Tritium where we were resizing our numbers of people out there.
The EV business maintained a strong momentum year on year particularly in Southeast Asia and premium OEM segments. While critical performance is expected to rebound in Q2 as DFIT projects commencement has started. The company enters the Q2 with a robust order book which Anand mentioned and we anticipate improvement both in revenue and profitability. Moving on to we recently completed a rights issue of 260 crore which was successfully subscribed rather a little over subscribed on the rights issue. The breakup of the rights issue of 260 crore was that we were paying unsecured debts of 55 crore. Repaying back that this is the object of the rights issue.
We were converting promoter given loan into equity of 107 crore investment in Tritium to support it for a little more time before it turns around 85 crore and then balance 12 crore for corporate general purpose and issue expenses. So the overall holding of the promoters which was pre rights issue was 69.5%. Marginal dip to 66.5% which is again healthy. The rights issue has been positive on our debt equity ratio as well. Pre rights issue we were at 0.7% and post rights issue we are at 0.35% which is giving us a higher leverage, lesser pressure on the interest cost and so on so forth.
Our net worth pre I the pre rex issue was 650 crores. With the 260 crores added the post net worth has gone up to 910 crore. So that’s the positive side. With that I’ll end my update on the financials.
I’ll hand it back to Anand for the Q and A session. Sorry. You can now take on questions and Anant and myself will try and answer.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask question you press star and one on your touchstone telephone. If you wish to remove yourself from the question queue you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Sahil Pathani from Strokes Capital. Please go ahead.
Sahil Patani
Hi. So I wanted to understand that we are still maintaining a guidance of 100% revenue growth over FY25. And since we’ve done about 200 odd crores in quarter one, that leaves us about room for 1500 crores to be done for the remaining three quarters. So if you can list down the factors that you know that’s contributing to us being still confident on achieving that kind of growth for the remaining nine months of the year, that’s my first question.
Anant Nahata
So I think the guidance was 50% growth in revenue and EBITDA on a standalone basis, not 100% .
Sahil Patani
On a consolidated basis I think.
Anant Nahata
So we had given a guidance of 50% increase in the revenue and 2.5x of the EBITDA and that guidance still holds good. We are confident that for the remaining nine months we will be able to hold on to the guidance.
Sahil Patani
Right. And I just wanted to understand that in terms of project execution or orders like, you know, if you can just list a couple of factors that is helping us to kind of maintain that guidance like what is contributing to that.
Anant Nahata
So I’ll first talk about the standalone basis. So a lot of the today’s what I spoke about in the presentation and even from a perspective of when we give out that guidance is really backed by, in the critical power segment by the order book that we already have. So you know, I wouldn’t say 100%, but a lot of it is backed by the order book that we have and some proportion is based on business as usual where we keep getting run rate business, et cetera. And we feel pretty strongly about it. As I mentioned, the quarter 1 revenue was more on accounts of project delays.
And when I say project delays, it may be due to customers, it may be due to product approval, it may be just the paperwork concerning the project, a lot of these and not just one project, but multiple projects that happen sometimes just luck doesn’t work your way and all of those are solved and the projects have been put into execution mode in the last quarter. We may not have had huge revenue from it may have had single digit crore revenue, but the execution has started. So that gives us confidence that we’ll be able to sustain that guidance through remainder of the quarters.
Because the capacities that we have, especially after Hyderabad, that will come up in October, will not be deterrent in, you know, from a revenue perspective to be able to recognize by the company and mathematically that guidance converts into Forex EBITDA on a standalone basis of what we did last year. So we will do that on a consolidated basis. I think we gave a guidance to of 100% revenue growth. This is something broadly well maintained. But as Tritium is taking, you know, a little longer to turn around, there may be some shortfall in the consolidated revenue guidance.
But on a standalone basis we continue to, you know, maintain the guidance.
Sahil Patani
Okay, that helps. Second question is around profitability. Obviously this has been our like fourth quarter consecutive where we posted losses. So when do you think eventually we’ll be turning profitable? Is it, would it still be within FY26 or you think because of Tritium we might slip into FY27 as well? In terms of profitability?
Anant Nahata
Yes. So again on a standalone basis, even with this very low revenue figure, we were still pat positive. And if we have to scale up the revenue as we have already spoken about, that will definitely propel profitability because with low revenue the fixed cost coverage, variable cost coverage is quite low. So. And that’s where some of the guidance of Forex, EBITDA etc is coming, coming from. On a consolidated basis it, you know, I think profitability guidance will only be for FY27, not for FY26 on a consolidated basis.
Sahil Patani
Okay, that’s it for me. Thank you and good luck.
operator
Thank you. The next question is from the line of Samrat Chadhav from Prosperity Wealth Advisors. Please go ahead.
Samraat Jadhav
Hi, good morning. Hope I’m audible.
Anant Nahata
Yes.
Samraat Jadhav
Yeah. Okay, so the Harmony Gen 2 and Tritium Triflex chargers, we have received a very strong market response. What is expected gross margin for these new products and what is the current order backlog outlook?
Anant Nahata
Yeah, so you know Tritium triplex because it’s part of the portfolio we launched, that’s a very high end technology with main markets being US and Europe and India. There is no, you know, I wouldn’t say there is an immediate market for that, but there’s activities on business development, etc. Which are taking place and they’ll be really fruitful when we have really high energy battery cars and big trucks and big buses, all of them requiring 10 to 20 minute charging. So these are very advanced liquid cool chargers which will eventually come to India, but today it’s in the business development phase.
But the main launch, et cetera, was for our Generation 2 product which we call as Harmony Gen 2. I can’t give you exact specific numbers, but this is the first time where we have been able to give a better value product in terms of features, more things, better aesthetic, better durability and increase our gross margin at the same time. Usually that doesn’t happen, but this time we have Been able to do that. And that’s where you want to be, right? Where we’re able to give 2x more value and earn like 1, 2% more. So. But our gross margins in EV charger business are in line with our expectations.
That’s what I can tell you. Even though a very fierce competitive market. Right. It’s a new segment and every time there is something new, businesses in India go through this period of phase where 20 people are trying to do it. But I think we have been able to convince the customers of the value that we bring. Not all the customers, some we have not been able to convince and we lose them. But most of the customers who are deployed deploying charging networks, who have funds and investments to deploy charging networks. I think we would have majority share in it.
So can’t give the specific margin but you know, but it’s in line with our expectation and better than what we had in the previous product portfolio. That’s one you asked. In terms of pipeline, again, our, you know, 50% of the business, and this is not an exact number, just a directional number, almost 50% of our business comes from AC chargers and about 50% of the business comes from DC chargers. So you know, that entire pipeline of DC business, you know, we are in the transition phase converting customers to Gen 2. But I would say on an ongoing basis, more than 50% of the deliveries of DC chargers have already converted to G2.
And by end of the year I think it will be 100% because what being able to convert maybe is some related to some government specifications etc where we may have approval for the older products and the new approval will take time, things like that. But I think for all practical purposes we have already converted everything to G2, whatever is left by end of the year.
Samraat Jadhav
Okay, great. And our Hyderabad plant would be operational when? Totally.
Anant Nahata
So. Okay, so we’re going to start operations in October. You know, you saw some pictures in the presentation, they’re very advanced.
Samraat Jadhav
This year.
Anant Nahata
October this year. But that does not mean it will, you know, be at full production in October. So October, it will start this year, October 2025. And then there will be a period of, you know, two quarters where the complete transition will happen. Right. So product by product, line by line, etc.
Samraat Jadhav
Okay. I have one other question. Yeah.
operator
Sorry to interrupt. We would request you to come back for the follow up question.
Samraat Jadhav
Okay, I will come.
operator
Thank you so much. The next question is from the line of Shashi Khan from Mind Equity Advisors. Please go ahead.
Shashi Kant
Yeah, good morning. So my question is extending the previous participants question so on Hyderabad plant, what capacity utilization we are expecting to reach in the next two quarters after the commissioning.
Anant Nahata
So today we are operating at a very high utilization, specifically in quarter two in our current plant. In the Hyderabad plant, the overall capacity that we can cater to is a lot more. Right. Because that’s a plant we have built for future. So today we are not utilizing all this space and the capacities that we are building. So plant and machinery is modular being put for our, you know, let’s say next two years requirement. Right. And if you want to expand the space to expand more. So with the current plant and machinery that we are putting, our utilization will absolutely be north of, you know, 70 to 75%.
Shashi Kant
So my second question is, what’s our, you know, view on the EV industry this year for FY26? What kind of growth we are seeing and secondly, what kind of, you know, tower additions we are seeing in this financial year? FY26.
Anant Nahata
Right. So I’ll answer the EV things first though. I’ve been excited by EV industry all the years since we have gotten into it, since 2019. But even within those six exciting years there have been two years have been very excited. One was FY23. So calendar 22, FY23 where we saw this thing amongst most of the players that everything is going to turn ev. Let’s invest in ev. Let’s not miss the bus. So that was excitement out of, you know, a little bit fear, little bit about future technology. And today the tailwinds I’m seeing in this industry is far exceeds anything that I’ve seen in past.
And this excitement is out of people’s comfort with EV. People understanding the TCO, people adopting EVs as the first cross government being hell bent sure on making electric buses a norm for the first time. People acknowledging that heavy vehicles which may be large trucks and buses can go EV earlier never people promoted scooters, it’s not for buses and trucks. But today that’s not the case. And more importantly the people, the companies who matter in India to the Indian population, whether it’s Mahindra, Maruti, Tata, all of them coming out with models in EV with very big investments around ev.
Right. So all that has created tailwinds for us, which has created exciting pipeline for us and for our peers as well. And overall I think on the slide I showed you the car growth of passenger vehicles that is roughly quarter on quarter. Like in a sense Last year quarter versus this is 70%, even Q4 versus this quarter is 15%. So all that means charges will be required and companies like us, or for that matter any other company in the electric mobility ecosystem should gain on top of it. Yes, it’s going through very intense competition. Prices have fallen way beyond what we would have expected.
But as I mentioned in the previous question, as Exycom, we believe in giving great value to the customers. And by doing that, yes, there has been margin compression, I won’t lie. But we’re still maintaining, let’s say in my opinion, industry leading margins compared to our peers.
Shashi Kant
Okay, thank you for presently answering the questions. Thank you. Good day.
operator
Thank you. Before we take the next question, we would like to remind participants you may press star and one to ask a question. The next question is from the line of Sagar Gupta from Union bank of India. Please go ahead.
Sagar Gupta
Hello. Good morning, sir.
Anant Nahata
Good morning.
Sagar Gupta
Hello. Sir, I have just one question that due to geopolitical factors there are challenges in importing rare earth materials from China. How is this affecting AXICOM and the electric vehicle industry? And what measures is EXICCOM taking to address these challenges?
Anant Nahata
So this rare earth metal and magnets. So first of all they have wide variety of use. No doubt about it. Right. So it impacts everyone, including us. And I’ll just come to that. But we don’t use these type of products in the way automobiles or some of these companies use. Right. We don’t use. So the proportion of effect on us is a factor of what auto companies go through. So I just want you to note that if we buy for example, hundred components or thousand components out of thousand, maybe five or ten components use that.
And we have seen delays in those components availability, but it’s delays in those availability, not that they’re not available or we have to reshape our production entirely. So for one of our charger categories, for example, last month production was 80% of what we expected because of delay in these materials. But on an overall year basis, quarter basis, I don’t think the impact will be significant, you know, which will make a difference in numbers for us. So yes, realistically, you know, we have to work harder. There is some impact on a minority number of components, but it’s not an impact where we would, which would lead us to change our guidance or explain or have like a significant explanation to shareholders.
Sagar Gupta
But sir, like due to this EV car sales growth is declining as the cost is affecting. Then do to think that this cost will also affect the EV charger industry.
Anant Nahata
Yeah, so that’s, that’s a very good question. So while three months ago There were talks of, you know, people cutting down production etc, but from whatever forecast we have seen, seen it doesn’t look like to be the case. And I read in the media same as you do, it looks like India, China relations are improving. So again, I don’t know what’s happening at that level but we have not seen any severe cut down in production by any of the big OEMs. They at least I’ve not seen any big public announcements in that regard. So hopefully that’s not the case.
Sagar Gupta
But sir, despite having an advantage in domestic charging and acquiring ttm, our revenue continues to decrease while company expenses rise. And our competitors like Servo Tech, who are relatively new to this field compared to Axicomp and are demonstrating better resulting growth with their investors and experiencing if I’m saying like significant returns over the past five years, given this circumstance, why is Hexico unable to achieve? Sir.
Anant Nahata
So again on the, you know, server tech, from what I know there are a player in multiple domains, EV charging, solar, epc, of solar. So I’m not sure if the EV charging business is bigger or higher growth than us as a full company. I’m not sure because they’re engaged in multiple businesses that I know. So I would just advise to compare Apple versus Apple. That’s a company much more focused on government business which is good. But if we have limited capacity, we try to do business which best serves as the return for those capacity. And at current pricing it wasn’t the PSU business in past.
In future it may be because government has now strengthened the PMP norms which allow people like us to compete better versus the norms in the past. But to my best of knowledge, I think from a customer perspective and revenue perspective at least in EV charging we would on a continuous basis we would be the largest provider out there. Now if someone’s revenue are a lot bigger due to one or two tenders for one year, I can’t say. But on a continual steady state basis think we are the largest EV charging company in India.
Sagar Gupta
Okay, okay. Like Sir, I just want to know one thing.
operator
Sorry to interrupt. We would request you to come back for a follow up question. There are several participants.
Sagar Gupta
Okay, thank you.
operator
Thank you so much. The next question is from the line of Samrat Jadav from Prosperity Wealth Advisors. Please go ahead.
Samraat Jadhav
Hi, so my question is on R D. How is your R and D budget allocated between critical power EVSE and emerging technologies like DC Microgrid solutions? Or do you have any upcoming innovations which you can highlight?
Anant Nahata
Yeah, so R and D is. I’LL just tell you the percentage, but it’s a substantial percentage of our budget and most of our products are in house design. Right. So just even before I go in the budget allocation and everything, you know, we’ll have about, I think close to 160 people in R&D. Almost evenly split between EV charging and critical power and the type of stuff we do like, you know today the heart of EV charger is the controller. Like in any product, the CPU of the charger controller. We are the only Indian company designing and manufacturing that in India.
There is no other charger OEM who has its own controller. Again provides that, you know, flexibility gives customer more confidence in longer term. So we try to differentiate ourselves in R and D by going much deeper in technology development than what other peers are doing. So the breadth of technology development we are doing in EV Charger differs in two ways from our peers. A, we are the only company from, right from portable charger to high power charger, we have the entire product portfolio. Otherwise some of our competition is just focus on government, some competition is just focused on bus charger, some accommodation is just focused on public charging.
Somebody just in home charging. But we have the entire breadth of portfolio for, you know, not very expensive. Our expense of R and D as a cost of sales would be between 3 and 5% and you know, not exactly equal but broadly, you know, EV charging would be let’s say 60% of the expense. Critical power would be 40% of the expense. Again directionally don’t rule me for the exact numbers but if you want exactly
Samraat Jadhav
Around, basically .
Anant Nahata
yeah.
Samraat Jadhav
Okay, okay. And any upcoming innovations if you can.
Anant Nahata
Highlight, you know, in fact, you know, you said it. So we are continuously working on incremental innovations. So we work on two types of innovations. One is incremental innovation which is more feature taking away some pain of the customers, improving the customer experience. And sometimes we work on path breaking solutions. So you know, DC a solution for EV charging, high power EV charging where the grid is not supporting such high power. Right. So a battery, an integration of battery energy storage system and EV charging is something we are looking at. We did have a pilot product last year in that but with all those learnings etc scaling up of that.
So it’s similar to a DC microgrid but some no answers. So the answer is maybe not as a product but as a solution. We are looking at something quite novel to enable high power charging for high energy vehicles.
Samraat Jadhav
Okay, thank you, thank you very much.
operator
Thank you, thank you ladies and gentlemen. That was the last question. For today. I now hand the conference to management for closing comments.
Anant Nahata
So I really appreciate everyone taking time and interacting with us. If you have any other questions, feel free to email our investors relations. We’ll try our best to reach out to you. We want to be transparent. We, you know, appreciate your journey as shareholders, investors in our company till now and we are trying, myself and my team are trying our best to meet the guidance provided by the company this year. We are excited about the business. The quarter one results may not reflect exactly the same, but hopefully you’ll see that excitement coming to fruition in the coming quarters.
So thank you everyone.
operator
Thank you. On behalf of Monarch, Net Worth Capital Limited concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.