GMM Pfaudler Limited (NSE: GMMPFAUDLR) Q3 2025 Earnings Call dated Feb. 06, 2025
Corporate Participants:
Dhaval Rajput — General Manager Finance & Accounts
Tarak Patel — Chief Executive Officer – International
Unidentified Speaker
Manish Poddar — Chief Financial Officer
Analysts:
Unidentified Participant
Yash Goenka — Analyst
Sagar Shah — Analyst
Shreya Banthia — Analyst
Presentation:
Operator
Hello, ladies and gentlemen, good day, and welcome to Q3 and Nine Months FY ’25 Conference Call of GMM Faudler Limited. 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 this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr Dhavar Rajput. Thank you, and over to you, sir.
Dhaval Rajput — General Manager Finance & Accounts
Thank you, Nirav. Good evening, ladies and gentlemen. A very warm welcome to all of you into the Q3 FY ’25 earnings call of GML Limited. The earnings presentation was uploaded on the stock exchanges today and is also available on our website. Hope all of you had a chance to go through it. From the management we have with us are Managing Director, Mr Tarak Patel; our CEO of International Business, Mr Thomas Ken; our CEO of India Business, Mr Joshi; our CFO of International Business, Mr Alexander; our CFO of India Business, Mr Manish Podar; and our Compliance Officer, Ms Mehtag. We will give you a brief overview of the performance of the company, after which we will get into the Q&A.Before we begin with the overview, a brief disclaimer, the presentation that was uploaded on the stock exchanges and also on our website, including our call discussions that will happen now, contains or may have certain forward-looking statements regarding our business prospects and profitability, which are subject to several risks and uncertainties. The actual results could materially differ from those in such forward-looking statements.
I would now hand over the call to Mr Tarif Patel to provide an overview of the performance. Over to you,.
Tarak Patel — Chief Executive Officer – International
Thank you, Daval. Good evening, everybody. Let me just start with a quick recap of our financial performance. So our revenue for this quarter was stable at about INR801 crores and EBITDA was up 3% compared to the previous quarter. EBITDA margins improved slightly to 12% compared to 11.6% for the previous quarter. What is happening is that our Q3 order intake was also quite strong at INR798 crores, up 5% compared to the previous quarter. And on a nine-month basis, our order intake is up 13% compared to the previous nine months.
Order backlog stands at INR1,740 crores, up 7% compared to December 31 December 2023. Our opportunity pipeline remains stable across geographies and the product mix continues to evolve. In terms of the general market outlook, we still believe that the chemical industry, which formed a major part of our order intake is a bit slow. This is driven mainly by the slowdown in the agrochemical industries. However, we do hear now that there is some volumes that have returned, margins still remain under pressure, but the outlook remains a little bit more the positive than it was six months ago. We do believe that over the next couple of quarters, we would see some investment coming back-in the agrochemical space. In specialty Chemicals, we do believe also that this will continue to grow and invest.
We have seen good traction in this space and we believe that this will also continue to have a good amount of investment, which would then lead to investments that would turn into order intake for us. For the pharmaceutical industries, generally it has been quite the positive, both in India and internationally. We’ve seen some traction in South India Pharma, mainly in Hyderabad, where people have added significant new capacity to cater to either CDMO or the exports markets. The future outlook, we still would like to be a little bit conservative. We do believe that the worst is behind us, but I think there is still a few more quarters before we see a full turnaround in both the chemical and pharmaceutical industries that we cater to.
As we look at forward, I think one of the main learnings for management over the last couple of years has been that maybe as a company, we are too focused on chemical and pharma and with the cyclicality that comes with these markets, diversification becomes an important part of our strategy, diversification not only from the point-of-view of new products, but also new industry segments that can bring double-digit growth back to what we aspire to have. We also have been working quite diligently on our cost structure. We have a couple of projects that we are working on here in India, internationally also as well. We have looked at rationalization of manufacturing footprint. You will see some update and you will see them a bit in the earnings presentation where we have rationalized gas capacity in Europe and in India, and I’ll talk a little bit more about that as we go-forward.
With that, I would now like to hand it back to Daval and then Daval, please kind of open it up for Q&A.
Dhaval Rajput — General Manager Finance & Accounts
Yes. Thank you, Tarav. Nirav, you may now open the line for questions. Thank you.
Questions and Answers:
Operator
Thank you very much. We’ll now begin with the question-and-answer session. Anyone who wishes to ask a question may press Tar and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press R&2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press RN1 to ask a question. First question is from the line of from Ambit Capital. Please go-ahead.
Unidentified Participant
Sure, sure. Thanks for taking my question. And it’s sort of heartening to see that your India business has seen an uptick in revenues and margins almost after like six quarters of consecutive decline. So my first question is on that, what’s leading to that? And have you actually seen any pickup on the GLE side of things or is it largely on non-GLE business, which is doing the heavlifting here?
Tarak Patel
Yeah. Hi,, this is. I’ll take your question. So yes, we’ve been talking for the last couple of quarters about slowdown in our chemicals business and which affected the core glass line on product-line that we serve. Now the reversals or the increase in backlog and sort of increase in revenue margins has come on the back of two things. One is, you know, the flattening of the decline in glass line. So we have sort of stabilized and starting to grow both volumes and pricing in Glass lines, but also the actions we’ve taken to improve our cost position in our business. Furthermore, the backlog and our focus on diversification has resulted in an improved backlog in our non-glass line business, particularly in our mixing business, which is an area of focus for us, but also in terms of heavy engineering and solid liquid separation sort of plants.
So overall, we believe our drug strategy is working and the worst is behind us and we expect to continue to move from here. Sure. And could you highlight what has been the kind of decline that you have seen in this quarter versus, say, last few quarters on the GLE side of things? No, I said we — I did not say there’s a decline in GLE. I said the GLE had declined in the past. It is now starting to recover, both from a volume and pricing standpoint? No, because my question is, if you see on a Y-o-Y basis, your standalone business is still down 8 percentage. So I was just trying to see because I’m sure it must be the, which has been sort of struggling as compared to your other businesses of mixing and then the other business is there. Exactly.
So I think a couple of things have happened in GLE in India. One, like said, volumes have improved. So last couple of quarters, we’ve had improvement in order intake in Glass line. You would have seen maybe a year-ago, we had two bad quarters where business was very slow and that impacted the backlog and then obviously Q1 and Q2 of this financial year. But having said that, Glass Line orders, the volumes have increased as well as pricing has also improved a little bit, plus what we also have done and you must-have seen is that we have now moved all production to our Gujarat facility. There was no point having two facilities running at 60%. We said let’s move everything to one and then you have better absorption of cost as well. So that’s something that we will also see in the coming quarters where our cost structure in the glass line business is now a little bit more efficient than it was a few quarters ago.
Unidentified Participant
Sure. And on your order intake, if I see the quarterly trends on a Y-o-Y basis this quarter, there has only been about a growth of 6% to 7 percentage across both the India and international business versus about 18% to 20% that we saw during the first-half. So has there been moderation in your order intake because that sort of conflicts with your earlier opening commentary there or is it largely because of the G&E side which continues to struggle?
Unidentified Speaker
No, I think order intake has been pretty stable. Again, it’s not back to levels that we had maybe a couple of years ago. But from where we are and again, keep in mind that we were a glass line focused company where most of resources and bandwidth was focused towards getting glass line orders.
Tarak Patel
And when that orders dried up, we had to find new opportunities in non-glass line and non-chemical and pharma industries to get these orders. Some of these will take a little bit longer, but we have seen good traction in heavy engineering, where we made a lot of breakthrough in oil and gas, petrochemicals. We’ve seen a lot of improvement in mixing, where we made a lot of breakthrough in metals and minerals. In Edlon, our US business, we’ve seen a lot of improvement there through the semiconductor industry. So some of the diversification strategies that we had kind of put in-place are now kind of bearing fruit.
And all-in all, I would say that even though it might be a few crores or a few points lower than previous order intake, I think it’s still stable and it kind of adds to the backlog. But again, like you rightly said, order intake is something that we are being aggressive about to create backlog and we are trying to create both glass line as well as non-glass line backlog. Now the glass line business were to turn and improve, those numbers will change quite quickly. But as of now, like I said, I still feel there is maybe a couple of quarters before we see some of the new investments, especially in agro the chemicals that will come back.
Unidentified Participant
Sure. My last question is on the international business. On a sequential basis, we have seen a slight decline in revenues. And over the last year, we have seen a lot of announcements, especially from chemical giants about capacity shutdowns. So how is the situation currently and how do we get the confidence that the worst is behind us, especially for the international business, which is largely dependent on Europe?
Tarak Patel
So I think on the international business, I think that you obviously will see a little bit of slowdown. It will continue a little bit longer than what we expect in India. What we are trying to do is rationalize manufacturing to make sure that we take the cost-out. We have certain initiatives that we believe will add a lot of value. One of those initiatives is our Poland strategy, which we have now executed the investment agreement.
So we plan to move manufacturing. We’ve already booked a few orders that have already been manufactured in Poland and the quality levels have been fantastic and we expect that to kind of grow over the next few quarters. But there is a clear push for us to move manufacturing from high-cost Western countries to lower-cost of European countries and maybe some to India as well. We’ve also kind of rationalized our UK manufacturing footprint and now we believe that having that no longer in the mix will also maybe improve efficiencies in Germany and Italy. And we hope that the blast line business again internationally also will improve over the next few quarters. Again, we are being aggressive in the market, but you know there is a general slow slowdown and we have to be aware of that.
Unidentified Participant
Surely, Charlie, all the best and thank you so much.
Tarak Patel
Thank you.
Operator
Thank you very much. Thank you. Next. Next question is from the line of Yash Goenka from Mauriga Capital Advisors. Please go-ahead
Yash Goenka
. Hi, thank you for taking my question. Am I audible?
Unidentified Speaker
Yes, you are just speak a little slowly. Your voice is a little. Please go-ahead.
Yash Goenka
Okay. Okay. Your — standalone services revenue have shown a strong uptake. What — what is the impact of this uptick in the margins, if you can quantify and how do you see this going-forward?
Unidentified Speaker
So let me talk about services sort of more broadly. You would have — you will recall from previous calls that this is growing the services business is a priority for us in India. Now services is about 35%, 40% of our international business and in India, we aspire to grow back from the single-digits that it current years. Now to that end, we have made organizational changes and systematic changes within the business to improve our performance of services. And I believe that is beginning to yield results. Now, of course, this will take some time, but last quarter’s performance was hardening and I expect we should only continue to grow from there.
Manish Poddar
Manish, specifically, hi, that’s Manish here. Specifically, I think number will be difficult to acquire at this stage, but as we know, services generally has been having a much better margin versus the original equipment. So this should help us on a sustainable basis. As the mix improves towards the services, the margins — the margin profile should improve.
Yash Goenka
Okay. And in your initial comments, you had commented about demand from pharma segment in Hyderabad region, but you’ve shut-down the plant there. So — and you also said that you’ll throw some light about it in the call ahead. So can you talk about it?
Unidentified Speaker
Yeah, let me add. So yes, you’re right. We had a small — we have a small factory in Hyderabad that we opened up, I guess about three — little over three years ago. We acquired — we had acquired, sorry, we had acquired from BD. Now current demand on for Toby Glass Line was such that it made sense to consolidate production in one factory. In Gujarat, these are larger factories. So while pharma in Hyderabad is stable, for us from a production optimization and fixed-cost sort of leverage standpoint, it made sense to consolidate in Gujarat. And that’s a big part.
Yash Goenka
Okay. Thank you.
Operator
Thank you. Next question is from the line of Abhishek from Oakland Capital. Please go-ahead.
Unidentified Participant
Hello. Yeah, go-ahead, please. Yes. Thank you for taking my question. So I wanted one — I wanted to ask one question about the market presence of the Chinese players in the domestic market. So how big is that presence in GLE and non-GLE, both markets.
Unidentified Speaker
Okay. So I’ll take it, as a first name again. Look, in the glass line business, we really don’t see a whole lot of Chinese competition in India. Glass line equipment is sort of critical to a customer’s process. It requires service and support and therefore, all over the world, people generally buy from local manufacturers. And therefore GMO has a local presence in manufacturing in every major manufacturing zone, so US, Europe, India and China. So we don’t anticipate that to change significantly yet. There’s always a few examples of — if you pull the import data, you’ll get a few examples of people pulling — buying glass line equipment. But generally with very few and experience of most people who have tried that has not been great.
So glass line, I’ll leave that story there. I think on other equipment, non-glass line, you’ll occasionally see a competition from China or other countries. For example, in mixing in specific applications, there are some Chinese competitors. But by and large, I think we’re well-positioned as JM with India manufacturing for all our products, for almost all our products and with the benefit of application expertise and engineering expertise from the world over. So we feel that we’re well-positioned to take on competition wherever it comes from.
Unidentified Participant
Okay. Thank you. And I have one more question about the company’s product differentiation in non-GLE segment. So what — what differentiation company is providing in non-GLE segment products? And how does the company plans to gain the market-share in-going forward?
Unidentified Speaker
Yeah. So that’s a pretty broad let’s say, it’s a very long conversation to be honest, which is we have a broad range of non-blast line products. So I’ll give you the sort of the 20,000 foot view and of course, further conversation can be had. Look, in every product-line that we have entered, our expectation is to have some technical differentiation with us with regards to our competition. So that’s true in our mixing business, it’s true in our filtration and drying business. It’s true in our membrane business in Italy and it’s true in our ceiling business in Germany, right. We have differentiated products and it’s up to us to sell that value. Now there are some businesses where the differentiation may be a bit harder. So for example, in heavy engineering, on a product basis itself, the differentiation may be harder. However, we differentiate there in terms of quality and delivery. We have a near 100% delivery record, on-time delivery record in heavy engineering, which is something that customers put a lot of value on, right? So we have given a lot of thoughts of where we can differentiate. And while its product features in many cases, there are other non-product features like quality delivery and in some cases costs that where we can. So we feel we are well-positioned in each of these categories.
Unidentified Participant
Yeah. But so what are your plans to gain the market-share in-going forward. So are you planning to sell the products as a package?
Tarak Patel
No. So I think there’s a couple of things that you should understand here. Some of these products go into completely different industries. So there is no synergy between chemical and pharma and oil and gas and petrochemicals. So for example, in oil and gas, we are talking to maybe a Reliance or Adani while in chemicals we’re talking to SRF, decade and in pharma, we are talking with greens, right? So each customer, each one industry work — the vertical has its own set of requirements. Yes, there are some kind of requirements that are crossed or can be kind of crossed between these different verticals, but generally for each vertical that we operate in, the selling and the USP is kind of different.
So for example, in heavy engineering, we are selling that listen, we can handle 120 mm thick early materials or we can do titanium or we can lift 200 tons of weight. So those are the differentiation. In glass line, in chemicals, it could be the life of the equipment, the corrosion of the glass and things like that, right? So for every product that we have and then maybe in filtration and dying, it could be the drying time versus somebody else’s drawing time. So if your back is 12 hours, I can make it eight hours. So there are very different requirements for each industry segment and we have to kind of cater to the specific needs and that’s why the focus for every industry is different. Thank you. Abhishek,
Unidentified Participant
I’ll come back for the follow-up question, please.
Operator
I request to all the participants kindly restitute two questions per participant and you may press star in one to ask a question. Next question is from the line of Sagar Shah from Spark. Please go-ahead.
Sagar Shah
Good evening, everyone. And first of all, congratulations for at least a better set of earnings actually than what we have seen in the last almost like more than five, six quarters. Now I had a couple of questions. My. My first question was actually on the — on the global — on the global international business actually. On the international business, my question was on the standalone, we have done very well, almost 14% growth that we have crossed sequentially. But on the global business, still we are falling back actually and so what — I wanted to know that are we seeing a decline as far as the global glass business is concerned and that is being held by the non-GLE businesses. Is that a fair understanding even right now?
Unidentified Speaker
This is Alek. And we have — as stated before, there are some markets where in fact, we have some headwinds over the way which are lies. This is especially China. And China, we have a strong gas line business. Therefore, we see it, it has an impact. And however, we also have other units which are performing well and this is especially the non-glass line business. So we said we expect, as Tark mentioned in the beginning, that the next quarter remain more or less as the last vers. So there are some ups and downs, but the long trend at least we see a positive signal and coming upwards again. Because of what the real concern was in-spite of — in-spite of having a very robust order book, order inflow of almost INR1,600 crores in the first two quarters. Still we had a — our — on the consolidated front, our revenues were very flattish sequentially.
Unidentified Participant
So that is why I wanted to know that what went wrong exactly.
Tarak Patel
So I don’t think anything went wrong because some of these orders do take more than two months, three months or 1/4 to get shipped out. Some of the large orders that came in are systems orders and those system orders take about a year’s time to be shipped out. So again, like I’ve mentioned in my opening statement, the product mix continues to change. And when you think about orders, don’t only think about Glass line because then you’re doing yourself a bit of a — it’s not only Glass line that drives this company. Glass Line used to be a major part of this. But going-forward, I think Glass Linding is a stable business. It is a market size that will not grow significantly more and our market-share in Glass line is 50% to grow market-share also is tough. You need to consider now that a lot of the growth is going to come from the non-Glass line businesses and the new verticals that we are entering into. Glass line remains important both from an OE perspective but also from a service perspective and services continues to be an area where we continue to focus and grow.
So coming back to your question, we had large order intake of big system jobs in the US, especially, maybe close to $60 million, $70 million and that’s something that will take time for it to kind of be executed and shipped out because these are long gestation period. There’s a lot of engineering, there’s a lot of manufacturing and a lot of support and service that goes into the startup of these large systems. So that’s something that will come. And again, like I said, this year, the focus is to have a stable year and build the backlog so that next year is a strong foundation to start and then start from Q1 and have good execution throughout the year.
Sagar Shah
Okay, sure, sir. So my second question was regarding to the margins. The — in this quarter, our sequentially our margins improved actually by 300 bps on the consolidated level and even on the standalone, we did very well on the margins. Now what my question was that this is obviously because of the cost rationalization efforts that we have taken and maybe the better product mix. But going ahead, going by the order backlog that we have going by the improved outlook as what Thomaster said that by Q1, our investments from the agrochemicals will also see some sort of traction. So our margin improvement journey will still continue in FY ’26 and our FY ’27 or you see these kind of margins are also the same in the next two years.
Tarak Patel
So I hope our margin improvement story continues for really a longer, longer period of time. But again, I would just caution you to think about, as I said, things are looking better, things are looking more positive. Some volumes are coming back, prices are improving. But again, if you ask me, are we out-of-the wood yet? I would still be a little bit more conservative. I think it’s a little bit of a wait-and-watch approach. We are hearing positive signs, but really for it to translate into actual order intake may take a little bit longer-than-expected.
You know very well and I’m sure you also kind of look into a lot of chemical companies and pharma companies, and I’m sure their promoters are not announcing large capex plans now engine promoters like to see visibility when it comes to order intake or having clients kind of give them that assurance before they really invest in the next round, right? And what we’ve been hearing from the big chemical companies and agrochemical companies that they do believe that May, June of this year, they would start looking at new investment again. Now if that gets pushed back by two quarters of a few months, I don’t know. But all-in all, I think there is more positivity and that’s really — I just hope that the market will because the cycle has been a tough cycle for everybody. And I think all companies are now looking to kind of reinvest and start their growth story again.
Sagar Shah
Sure, sir. Just last one from my — just a data keeping question. What is out of our total revenues, how much is it from industrial mixing in this quarter and for nine months FY ’25?
Tarak Patel
Mixing — I think money is 10% to 12% is the number that we are trending towards and because it’s a focus areas, so definitely the percentage should improve over a period. We will consolute.
Sagar Shah
Yes. Thank you. All the best, all the best. Thank you.
Tarak Patel
Thank you.
Operator
Thank you. Participants, you may press R&1 to ask a question. Next question is from the line of Rupesh from Capital. Please go-ahead.
Unidentified Participant
Hello, sir, thank you for the opportunity. My question sir, is can you give end industry-wise maybe our top three or top-five industries and the percentage in the revenue.
Tarak Patel
So I would say right now about 70% to 80% of our revenue comes from chemical and pharma, maybe 70% everything now. I think those are the two key ones. And between our chemical and pharma keeps switching. There was a time when chemicals, I mean, pharma was higher, but I think the last couple of years, we’ve seen chemicals because of the agrochemicals boom and the specialty chemical boom overtake pharma. So those are the two key industries we cater to. I think the next big one would be oil and gas flash petrochemicals here in India, and that’s a growth trajectory for us. And then with the mixing play that we have got it, we have a much wider range of industries that we cater to and there we have, let’s say, metals and minerals as a key industry. We have wastewater. We also have pain and the like also as well there.
And then lastly, with Edlon, we have semiconductor as well. So quite a few range, but these are the big ones that you could kind of say that this is really where the growth is going to come from. And like I mentioned, chemical and pharma a bit slow and it’s reducing, our exposure to these segments is reducing. And I would say maybe in the next couple of years, it would be down to 15%, right, because the real growth is going to come from these other industries for two reasons. One, they are much bigger industry and two, our market-share in those industries is very, very small, right? So the ability to grow quickly and the ability to grow profitably is much, much higher in these new industries.
Unidentified Participant
Okay. Okay. So sir, the reason to ask that question is whatever you know CDMO boom, whatever GLP boom, whatever you are seeing in Hyderabad, then maybe it will spread to other parts of India, but is that enough kind of you know, to offset whatever toughness is there in agrimarket and can we still grow a healthy 20% kind at least in domestic market on glass line, overall — overall, overall —
Tarak Patel
So I think chemical and pharma alone will not give you 20% growth. I don’t think so. There is definitely products that we have that go into chemical and pharma and we need to improve market-share, but I don’t think 20% growth is going to come from chemical and pharma alone, we will have to look at new avenues such as oil and gas, petrochemical. And that’s why this year also if you see a lot of the shortfall coming from pharma and chemical, especially agrochemicals, when you have three customers that account for nearly INR300 crore INR400 crores of business that kind of just vanishes overnight, you need to replace that INR300 crore INR400 crores with something else.
And we managed to do that. So in-spite of the slowdown, we are still maintaining the same levels of revenue where other countries might not have been able to do so. And this new revenue has come from new areas such as oil and gas, petrochemical and the like, right? So we’ve been kind of lucky. And I think as management, we are quite clear that over-time, we need to reduce our exposure to chemical and pharma and at the same time, maybe put our resources and people and funds also to these kind of new growth areas.
Unidentified Participant
Okay. Okay, that’s clear, sir. Another question, sir is do we — I mean, I don’t know, are you looking at biological. Yeah. Hi, am I audible now?
Tarak Patel
Yeah, go-ahead.
Unidentified Participant
Yeah, my question is, sir, do you have technology or are you looking at biological space? I mean that I think the capexes there are much larger and I think that part of the industry, pharma industry I think is going to change a lot in next five years. So where are we looking at biological reactors?
Unidentified Speaker
So yes, there’s a lot of things that are always over the horizon in the industries. Biologicals is one of them. We’re certainly keeping abreast of the development there. We are engaged with a number of our customers in things like peptides and providing equipment for that. We’ve done that globally in the past and now when it comes in India, we’re working with them on that as well. So the short answer is, yes, we are in tune with what our customers are asking for. And we will continue to expand our product portfolio where gaps may exist because we are in some areas where new type of equipment will be required and we will work to fill those gaps. We have the probably the right time to add.
We have inaugurated a test center in our — in, which is our Gujarat facility. This is a pretty significant investment for us. It mirrors a test center that we have in Europe and in North-America and it allows customers to come in and run trials of various sorts of reaction concentration drawing, of acid management, things like that of the evaporation, various products that we have. They can run trials and that helps customers gain confidence in our — in their ability to get the outputs that they expect before they make a significant investment. So that test center is now live. We have customer trials that have already started and we expect this will help us in continuing to grow our business in India and actually over the years.
Unidentified Participant
Okay. Okay. And sir, my final question is, if I look at September balance sheet, our net-debt is around INR450 crore, I mean INR950 crores debt and INR400 crore cash. But the net finance cost looks really high at around INR70 crore INR80 crore kind of. So is it — I mean, I don’t know, is it due to ForEx or is there something else there?
Tarak Patel
Yeah. So our net — cost is less than each percent India and International combined, where it’s something like 7.6% or something like that. So rest is all about the ForEx fluctuations positive and negative company. Okay.
Unidentified Participant
Okay. That’s clear. Thank you. Thank you for answering my questions.
Tarak Patel
Thank you.
Operator
Thank you. Participants, you may press star in one to ask a question. Next question is from the line of Shreya from Oakland Capital. Please go-ahead.
Shreya Banthia
Hello. Yeah, sir. Am I audible?, can you go for the handset, please? Yeah, I’m on the handset itself. Yeah, go-ahead, please. Yes, sir. So you had mentioned that you would be increasing the share — you are focusing on increasing the share of the services business. So what kind of margin — steady-state margin going-forward can we expect the services business or generally entire the entire business. The overall margins, EBITDA margins, if we are to — if you could give some color on that?
Tarak Patel
Yeah. So again, I would just maybe kind of look at it slightly differently. I think you know, the margin profile for this year is about 11% to 12% and I think we would finish the year-around that. I think we do want to improve margins for the next financial year to put a number on it right now would be a bit difficult. Again, like I said, the market need to start turning a little bit, volumes are increasing, but I would be — it will be premature for me to give you a number. The idea and the hope is to definitely improve EBITDA margin and EBITDA the whole — I mean, and also the volume of EBITDA for next year.
Unidentified Speaker
Yeah. And maybe I’ll just add. I think look on as management, we are focused on managing our costs better and product mix, et-cetera. And I think we have made through this conversation, you would have realized or recognized there’s quite a few initiatives we have taken that will position us well that when the markets come back, we are — we’re actually in a much stronger position to take advantage of that. So yeah. And just maybe just to just reiterate for the group some of the initiatives that will help us manage costs. I think in India, obviously two-player ones would be the closure of the Hyderabad facility and obviously the change of product mix between glass line and heavy engineering.
Our glass line volumes coming back with a little bit of price improvement will also help. Internationally, we have pulled and we have now rationalized the UK manufacturing facility as well. So those are some of the initiatives that will obviously help us in terms of improving costs. We also have a McKinsey project that’s ongoing, yes, as the fine would stage where obviously there will be some help also there operationally to reduce cost there.
Shreya Banthia
Thank you, sir. Just a little clarity I needed. So your voice was not clear. So are we — since we are not having — using a manufacturing facility at Hyderabad, so are we considering divesting the facility or it’s just on-hold as of now?
Tarak Patel
No. So as of now, it’s on-hold. There is no-decision on what we will do with this facility. As of right now, it just made a lot of sense to consolidate everything into one. So all your cost is in one facility and your better utilization as well. So it was driven only by our financial decision. If we find that there is more volume coming in or we find another product-line that can be used or manufactured in Hyderabad, we would be happy to do so.
Shreya Banthia
Okay. Thank you. Thank you very much. That was helpful. I’ll get back-in the queue.
Unidentified Speaker
I’ll just add one last point to what said. We continue to maintain a robust presence in the South market. We have a sales office. We’ve had it for years. We have a service presence both in Hyderabad and in and we have a warehouse that stops a bunch of spare parts and consistence that our customers need. And we are the market-leader by a significant distance in Glass line in Hyderabad so that will something that we will definitely maintain. Thank you,.
Operator
Yeah. Next question is from Ramania from Firen Asset Management. Please go-ahead.
Unidentified Participant
Yeah. Hi, hi. I hope I’m audible. So my first question and that’s just my only question. I would like to kind of understand your thought process about consolidating manufacturing entity. So we’ve seen that you shut-down the plant in Hyderabad. I would assume that since you have a lot of international plants, you may have a couple of — in the next couple of years, plans to consolidate the same. So what’s your views on consolidating international operations, trying to see if you can get a much better manufacturing footprint, much better cost-control over other categories? What’s your thought? And I would like a one to two year longer kind of view because I was also seen that you released the press release about signing a manufacturing facility in Poland, which seems to be one of the lower-cost manufacturing countries in Europe. So what’s your entire thought process about consolidating international manufacturing operations?
Tarak Patel
Yeah. I think the — the vision is definitely to reduce our manufacturing in high-cost countries, not only manufacturing, but even things like engineering and support and things like that. So we can definitely — and we are looking at lower-cost options. Do keep in mind for certain geographies, we still need to have a presence in those geographies, especially when it comes to glass line because these glass line vessels will need relining, they will need repermission, they will need support and service.
So we need to have local furnaces. Maybe we don’t need to have as many as we do currently. And over-time, we will definitely look to ramp-up India so that India can start supplying to the rest of the world. We also have Brazil and China low-cost manufacturing for and we continue to use and grow those businesses. So the real focus is to reduce our manufacturing presence in high-cost countries like the US and Western Europe. Having said that, there is also — we will still continue to have local teams in these geographies for support and service as well as for sales because front-ending, the customer who is local still needs to have a local contract that we can deal with, right? But at the end-of-the day, the vision of management at least the way that we would like it to work is that when you buy a GMM for the reactor anywhere in the world, you should not really worry where it is made, right?
At the end-of-the day, you get the right quality, you get the right price and you get the right timeframe in terms of delivery. You should not really worry where this reactor is made. And that would be the eventual goal. Are we there yet? Not quite yet, but we are working towards that and that’s something that we will try to implement. Poland is the first part of this. Like I mentioned to you, we’ve already had two very successful orders been executed in Poland. We are now planning a third order also in Poland, which obviously is creating a lot of promise. And with things like this, once you have one or two good orders and they executed in good-quality and good timeframe, people themselves will kind of be more favorable to this and they will start outsourcing automatically, right? And that’s what we are seeing.
Maybe, Alex, you want to jump-in and add something on our global?
Unidentified Speaker
I could just add and said that in fact, our operational footprint, we will improve. So this is a clear focus of us as a management. And there will be some, let me say more focus on center of excellence. Will there be new — more new manufacturing in India? Yes, this is a target. Do we have to keep some sites in Europe and US just to ensure proper services, therefore, especially the focus on service business, maybe a little bit less on the new manufacturing. And yes, this is a target and we are working there on the strategy and are confident that we achieve improvements there.
Unidentified Participant
Got it, got it. Thank you. Very clear. Just one more question. You — earlier you used to have like a three, four-year plan laid out with what the clear vision for GM is I’ve not seen that happen over the past at least a year, year and a half or so. So is that something which is still in the process? Is it something which you are kind of throwing it out to the investor community where you want to see GMM maybe three years down the line? And is there any timeline to that if you can touch a bit on it?
Tarak Patel
Yeah. So we were hoping to have something ready this year, but again, this year has been flattish. So we hope to have something for you in the next financial year. We are working on something — we believe that we are nearly 60% 70% there in terms of just long-term strategy that we all have agreed-upon. I think the smaller pieces of how we get it done over the next few quarters is something that we are still working on. There is a meeting planned amongst the top management group next month. So yes, we are definitely working on something. As you know, the Board, our investors, they obviously would like to have a clear idea in terms of what we are going to do. We would love to articulate our vision to the capital markets as well and then kind of execute that vision, right? Unfortunately, the market didn’t turn as early as we would have liked.
We would have liked to do it this year, but we need to kind of — the idea today is to really focus on business, make sure that the year is stable. We are not losing market-share and not losing money. And then obviously, at the same time, we need to work on the strategic plan, which is in-process. And hopefully, again, I don’t want to give you a timeframe, but I’m confident that in the next financial year, we should definitely be able to articulate our vision to the outside world.. Thank you and all the best thank you. Thank you.
Operator
Participants, you may press star and one to ask a question. Next question is from the line of Deepak from Swan Investments. Please go-ahead.
Unidentified Participant
Yeah. Hi, good evening, sir. Just wanted to check it out. If you can give some sense on the heavy engineering business, specifically, if I were to look from the order intake and order book perspective, I mean, currently the order intake in the Nine-Month is up 13% at what would have been order inflow in the heavy engineering business and in the other businesses? And if you can also throw some light in terms of the revenues, what has been the nine-month revenue in businesses and how has been the margin profile? And also how is the bit pipeline is looking up at the current venture and from the export point of time, we were also looking to explore export market and where we stand at the current venture, if you can give some sense about the heavy engineering business.
Tarak Patel
So heavy engineering because I think just talked about the business and what we are trying to do and what we cater to. I think heavy engineering has grown significantly. It will grow again this year. It was a much smaller part of our total revenue. This year will be a bigger part of it. We don’t share numbers right now nine months, but even if you look at the Nine-Month numbers, heavy engineering portion is definitely much more than it was in the previous nine months, right? And the growth that we are getting from heavy engineering would probably be double-digit in any case, right? So that’s the focus area for us. And maybe can speak a little bit more about the heavy engineering business and what our strategy is there.
Yeah. So first to your point, in the materials that we have released to the stock exchanges, you’ll see the segmental overview, which gives you a sense for sort of how the is around technology systems and heavy engineering is part of the technology business. Now our strategy in heavy engineering is quite clear. We want to focus on are on getting the right MOCs, which is sort of the right material of construction, focus on export orders and focus on the right kindness equipment. So I’m pretty pleased with the direction in which we are going. This is a business that has run for about three years, now little over three years and it’s grown very well and it’s a significant part of the India business now.
The next phase of our strategy will be to focus on exports for heavy engineering. You know, using the power network already, we have a considerable exposure to the US to some extent in the Middle-East as well, but we are going to work to accelerate that to see how we can drive exports further in geographies close to India and also potentially to the US given the likelihood of investment in manufacturing returning to the US. So heavy engineering will continue to be a focus area for us and a big growth driver, I think in the next two to three years at least.
Unidentified Participant
Okay. And then just one bookkeeping question on the other income front in this quarter that appears to be at INR25 crores. If you can share the details about it, that will
Manish Poddar
Be income this quarter other income is primarily on account of FX gain. So you have a euro-dollar to euro depreciated and. Within the company, there was a mark-to-market. So these are typical fluctuations which you foresee in the debit side on the finance cost and other incomes of the trade.
Unidentified Participant
Okay. Thank you. Thank you and wish you all the best. Thank you.
Operator
Thank you, next question is from the line of from P&R Investments. Please go-ahead.
Unidentified Participant
Hi. Sir, we have competitive advantage our own niche when it comes to glass land business. What kind of a know-how or advantage that we have in the new businesses that we are entering? Is it just our execution capabilities or anything else that we have already?
Unidentified Speaker
Yeah. So I think I addressed this in some extent in a prior question, but let me just summarize. Any new product-line or business area that we’ve entered, we believe we have some differentiation. Typically, it’s in-product features or some aspect of our manufacturing capability that allows us to differentiate in the markets. For instance, in filtration and drying, we have proprietary designs and local innovation that’s happening that is helping us differentiate and offer more advanced equipment to our customers than the standard that they get from other players in the market. In mixing, again, we have prior track-record of serving various applications across the world, be it water, food, mining, minerals, chemicals, pharma, paint, the list is very well done.
And that’s advantage we’ve gained because of the presence of Mixel and Mix Pro with our acquired company in our portfolio, right? And we see the benefit of that in India already. And similarly in the international business, they are seeing the benefit of having India manufacturing. So again, it really depends on each product, but we as management are certainly focused on ensuring that there is differentiation in each of our business lines.
Tarak Patel
And I think just maybe to add to that, I think the question that you were asking, I think GMM for the brand-name that is associated with the company. People do come to us for solving problems that they have. They look up to us in terms of completing the project in a timely manner and also the financial stability that we have today. If we take a large project, it’s not that we’re going to run-out of funds halfway through. So the large heavy engineering projects with the Reliances and the Adani in the world, they would obviously go after — go with respected professional companies, right?
So we stand-by our products and we make sure that we deliver what we promised. I think that is something that also will help a lot of customers to kind of try some of the newer products that we are now entering into. Thank you.
Unidentified Participant
Okay. Thank you. That’s it from my side. Thank you.
Operator
Thank you. The next question is from the line of Shreya from Oakland Capital. Please go-ahead.
Shreya Banthia
And sir, my next question was, I’m aware that we are not giving the breakup of our margins, EBITDA margin segment-wise. But if you could give me a sense of our non-glass lining and glass lining margins comparable and whether heavy engineering margins are little on the higher side, any sense on the margins, how should we look at it?
Tarak Patel
So it fluctuates, Shreya. But I would say as a group, our aim is to have a 15% margin profile across the businesses that we operate. Some cases in down-cycle, it will be lower, some cases will be higher, but that would be the general trend for you to kind of go with. I don’t think we get into any product-line with lower margins. There could be some products within the portfolio that have higher-margin profiles, especially the services part of it. But for our technologies product, which is basically things that we manufacture, equipment that we manufacture, I would say a 15% or the margin would be the average or higher.
Shreya Banthia
So is it fair to assume that the heavy engineering margins are somewhere near the glass lining or the other equipment as well?
Tarak Patel
Yeah. I think they all are kind of similar. So you can do the math 12% — if we are at a 12% margin, I would say margins across-the-board will be similar. Glass line just to date because of the slowdown in the market and the competitive pressure that we have has seen a reduction. But if you look at the good times, I would say all these businesses have a pretty strong margin profile.
Shreya Banthia
Understood, sir. Understood. That was helpful, sir. Thank you. Thank you. Thank you, sir.
Operator
Thank you very much. As there are no further questions, I’ll now hand the conference over to the management for closing comments.
Dhaval Rajput
Thank you,. Thank you everyone for joining us today. It was pleasure interacting with you and we look-forward to many such interactions during the course of the year. Take care and see you soon.
Tarak Patel
Thank you.
Operator
Thank you very much. On behalf of GMM Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.