HLE Glascoat Ltd (NSE: HLEGLAS) Q1 2026 Earnings Call dated Aug. 21, 2025
Corporate Participants:
Unidentified Speaker
Harsh Patel — Director
Analysts:
Unidentified Participant
Presentation:
operator
Ladies and gentlemen, good day and welcome to the HLE Glasscode Limited conference call to discuss the acquisition of the assets of Omiras GmbH Germany. As a reminder, all participant lines will remain 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 the operator by pressing Star then zero on your touchstone telephone. Please note that this conference is being recorded. I will now hand the conference over to Mr. Path Patel from MUFG Intam IR for opening remarks.
Thank you. And over to you.
Harsh Patel — Director
Thank you, Brian. Good afternoon everyone. Welcome to the HLE Glasgow Limited Conference Call on Acquisition of Assets of Omera GmbH Germany today. On this call we have Mr. Alab Patel, Full Time Director. Mr. Harsh Patel, Whole Time Director and Mr. Nilesh Ganjwala, Senior Advisor. Mr. This conference call may contain certain forward looking statements about the company which are based on our beliefs, opinions and expectations. As of today, actual results may differ materially. These statements are not guarantees of future performance and involve risk and uncertainties that are difficult to predict. With this, I hand over the call to Mr. Harsh Patel for the opening remarks. Over to you, sir.
Harsh Patel — Director
Good afternoon and warm welcome to all participants. Thank you for joining us today to discuss our recent acquisition of Omera GmbH. It is my privilege to welcome you all to this important call where I share with you another milestone in HME Glasscode’s journey.
The acquisition of certain specific assets of Omira’s GmbH and its wholly owned subsidiary Omera Store GmbH to our wholly owned step down subsidiary HNE Surface Technologies GmbH. As you may recall on the 14th of August 25th we had informed the stock exchanges about the execution of the definitive agreements for this transaction. I’m pleased to update you that as of 18 August 2025, HNE Surface Technologies GmbH has completed the acquisition of certain specific assets of Omiras GmbH which also includes all shares of Omera Store GmbH. This marks the formal conclusion of the acquisition process. Omiras is a company with an illustrious 187 year heritage in Germany.
Specializing in architectural facades, vitreous enamel coating and advanced metal processing through Omera Store. It also markets last fuse to steel tanks and silos. Ranging from 8 cubic meters to over 20,000 cubic meters in capacity. These modular bolted tanks are widely used for storage of potable water, wastewater sludge, industrial liquids, animal feedstocks, biogas and grain. Omiras has successfully delivered 350 tanks in Saudi Arabia alone in the past decade, highlighting its international credibility OMIRAS has a 21,000 square meter facility in Lauter Bunchback, Germany which is a symbol of its engineering excellence and capability. Let me briefly touch upon Omeras recent financial performances.
In 2024 Omeras reported revenues of Euro 21.9 million with a gross margin of 54.3% reflecting the inherent strength of its product line. However, due to pandemic related disruptions, surging energy costs in Europe and delays in certain large project executions, the EBITDA margin compressed to 4% with a negative PAT of 0.46 million. Omira has historically demonstrated the ability to generate steady and growing revenues and and resilient gross margins. We believe that with HLE’s engineering skills, financial discipline, supply chain efficiencies and customer access we can turn the business back to sustainable profitability and growth. The high order visibility in silos and facade segments gives us confidence in a near term recovery.
This acquisition is transformational for Achille Glasscoat. We are extending our core strength in glass lining from chemical process equipment into infrastructure, architectural and renewable energy application. Omiras European base opens doors in Europe and the Middle east while also positioning us for tender based projects in Asia Pacific, Africa and Latin America. Our portfolio now will include large storage tanks, silos, biogas digestion tanks and architectural panels which helps reduce dependence on our traditional chemical and API industry clientele. Operating out of Germany also enhances our brand, aligning with premium engineering standards which are recognized worldwide. The timing of this acquisition coincides with powerful industry tailings.
The European Green Deal and the broader energy transition agenda are driving strong investments in renewable energy and biogas projects directly supporting massive demand for digestion tanks and sustainable construction materials. Global investments in water and wastewater infrastructure are projected to exceed 100 billion annually by 2030, a market where modular storage solutions like Omegas tank offer speed and durability advantages over concrete. Governments worldwide, particularly in the Middle east and Asia Pacific, are modernizing transport hubs, tunnels and clean rooms, creating a long Runway for architectural enamel coated solutions. By combining Omeras installed base and credibility with HNE’s global customer network of more than 1,500 companies, we will unlock strong cross selling opportunities.
While Omiras faced financial headwinds, the fundamentals of its business remain robust. With our strong balance sheet manufacturing expertise and disciplined execution, we are confident of reviving OMAS profitability in the short term, scaling its operation and positioning it for long term growth. This acquisition also significantly enhances HLE Glasscourt’s role in global planning ecosystem from chemical plants to storage solutions from silos to architectural facades. This acquisition will help us in broadening our horizon and strengthening HLE Glasscourt as a truly diversified global engineering and technology company. We firmly believe this is a value accretive acquisition that enhances growth visibility, further diversifies our portfolio and aligns us with global sustainability priorities.
With that, I would now request the moderator to open the floor for any questions. Thank you.
Questions and Answers:
operator
Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their Touchstone telephone. If you wish to remove yourself from the question queue, you may press STAR and two participants are requested to use their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Sucreate Deep Patil from Eyesight Fintrade Private Limited. Please go ahead.
Unidentified Participant
Good afternoon to the entire HLE team. My question is, now that Kinam is fully integrated and working in oil and. Gas attraction, how are you planning to. Scale its engineering ability for high spec mobile clients? Are you considering any facility, facility upgrades, automation or joint design platforms with Teletech to meet international standards faster? What is the guidance of the company on this?
Harsh Patel
Thank you. Hi, good afternoon. So you very rightly said that we are targeting. Oil and gas and petrochemical clients in the Kinam segment of the business. To do so, a large portion of the required skill set is already available within the company. We are already equipped to meet many of the global standards, be they, you know, whether we, whether they are related to heat exchanger design specifically or pressure vessel design such as PED or newstamp. Also, certain skill sets which may not be available at Kinam currently are existing elsewhere in the Indian operations in the sense that our FND and last nine divisions are well equipped to design as per eac, which is Russian norms, gis. CELO which is for China, so on and so forth. So we are pretty well equipped to cater to pressure vessel and heat exchanger needs across the globe and to do so, any inputs, further inputs from Thalitec. Are not really necessary at this stage.
Unidentified Participant
Just a follow up and my final question. Are you building a new pricing or delivery model that reflects higher customization and margin potential? Is this in relation to Kinam?
Harsh Patel
So if you look at how Kinam currently operates, they are already in a customized heat transfer solution space which is already quite differentiated from the traditional fabricators who are offering similar products to the chemical and pharma industry. And we are also able to do so in a in a very large volume. So we are currently in a position to execute close to 3,000 peak exchangers per annum.
So that is already, in a way, a space that we are working in and we are working in quite effectively.
Unidentified Participant
Okay, great. Thank you very much and I wish the team best of luck for the next Q2.
Harsh Patel
Thank you so much.
operator
Thank you. The next question comes from the line of Ajay from Nimshe Investment Advisors. Please go ahead.
Unidentified Participant
Thanks for the opportunity and congratulations on the acquisition. So my question is will Hle be liable for any outstanding debt or any other liabilities beyond the acquisition amount? And if you can also provide more. Detail on the specific immovable property included in the acquisition agreement because there was no breakup of the 2.75 million euro transaction. And if you can also break it further into how much, because we are going to acquire specific assets of Omera and we acquired the complete shares of Omera Stone. So if you can break this amount, that will be helpful.
Harsh Patel
Thank you for your question. I think on the we are specifically. Acquiring only the specific assets of Oneiras. Which also includes the 100% shareholding in. Omera Store, which is its only or which was its only owned subsidiary. So we are not acquiring any liabilities of Omeras, we are only acquiring specific assets. We are acquiring some trade liabilities of. Omera Store because Omera Store has no other third party liabilities other than certain trade liabilities. So and those trade liabilities are very, very, very small. We have already done a detailed diligence before completing the transaction. With respect to the question on the real estate, we are by, we are by virtue of this acquiring roughly about 21,000 square meters of land and there is a constructed factory building on top of it. So we are acquiring the land and the building. The market value, current market value is a little under a million euros. Currently we also acquire the entire equipment which has not been independently valued, but the value is considerably higher.
We also acquire the intangibles which include the brand Omeras as well as the entire technical know how related to the manufacturing process, as well as the specialized products that they manufacture. We also acquire the entire inventory as on the date of transfer, which includes all the inventories that they currently have, whether it be raw materials, work in progress or finished goods. And we have also taken over the entire order book on a specific order basis. So we have picked the orders which are profitable and left behind the orders which are not. So we also have acquired the specified members of the team which we believe will be required to continue operations of the business, which includes management at all levels of the business.
Unidentified Participant
Thank you, sir. That gives a lot more clarity. Sir. Another question is regarding the acquired business operations. As you can mention, what is the current order book? Because we mentioned in the document that we have the order book and expect to turn around a little fast. So if you can break, if you can mention what is the current order book and its composition by product type, like between times, facades, biogas, and also by geography, because how much is it based completely is it, how much is it based in Europe or Germany particularly? And lastly, and because there were some order delays on these recent orders, so what is the potential impact of existing penalty clauses on the near term revenue?
Harsh Patel
Maybe I’ll take your last question first. We are not taking over any of the orders which are related to the EPC business, which is the business which led to these losses. In any case, in none of the cases is there any risk of any delayed execution or delayed, you know, delivery charges or any such. So we are not taken anything or any order which carry those, let’s say, past liabilities or obligations as far as the orders are concerned with respect to the total order book, the total order book currently, which is the order book is partially executed is roughly in the range of about 7 million euros.
And we have a order book of about 28 million euros which is currently under negotiation. As and when these are finalized, these will then be executed over a period of maybe 12 to 18 months. And 28 million is the inquiry pipeline. Yeah, correct. And by product composition, would it be possible to give a breakdown of the. Like how much it would be tanks, facades or biogas. So it’s a mix of tanks and facades. Currently, biogas is, is something which is still under discussion. So I. The numbers that I have provided for you do not include biogas. Okay. And so there seems to be a. Difference between the architectural product portfolio, because if I go on within the Omerage, the holding company respect and the product shown under Omira Stone. So, and given our existing product portfolio of glass lines and reactors. So I was not able to completely understand the synergies. So if you can explain how these architectural panels will be integrated into our existing product line and how can we leverage these with our customer base and the current application of our product. Yeah, that’s a great question because that’s also the question that we had to. Answer first before we considered acquiring, you know, the business or assets of Omera Store. Primarily, our interest in the business stemmed from the tanks and silos business because that’s what has the maximum opportunity for the way that these panels are made. The manufacturing process is fairly automated and the way these are manufactured, or rather the facility in which the panels are manufactured, whether it be panels for architectural or whether it is panels for tanks and silos, they are manufactured in an almost identical process and almost in a facility that overlaps almost to the tune of 80, 90%. So to have volumes for the business, I think the architectural and facade business primarily ends up being a very good volume driver for the business because you know, as you may understand, you know, a single tunnel project could have several thousand square meters of panels which need to be lined.
And it also gives us a very good visibility because these are usually, you know, 6 month, 12 month, 18 month supply period. So it gives us certainty of volumes. It also gives us not just certainty but also, you know, the overall size of the manufacturing facility is fully utilized. What we also realized when we dug deeper is that these are not just any architectural panels. Enameled panels are quite specialized and they can be very high end. So with the capability of Omeras to manufacture in a variety of different finishes in different functional, you know, design, you know, especially the back ventilated enamel panels that they make, enameled or glass line panels that they make, you know, really set them apart from any of the competitors.
So while on, on one side it’s the same facility, it ensures capacity utilization, but on the other hand it also gives us access to some very unique and niche markets. Also this, this fits quite nicely with our, you know, thrust on also diversifying away from, you know, our, let’s say, reliance on the chemical and pharmaceutical markets. So while the end application is different, the manufacturing technology required for this is exactly identical to that for tanks and silos. I hope this gives you more clarity.
Unidentified Participant
Yes. And sir, on a strategic level like because when we acquired Thalatec, we. Soon. Introduces those products into India. So are there also plans for these products of the new acquired acquisition to market and to the Indian market or is it just like will be focused on the export geographies?
Harsh Patel
Yeah, so we have, we have clear plans to manufacture and market these products in India. India is a growing market for biogas. A lot of infrastructure projects are ongoing right now in India, especially for metro rail for a lot of tunnels are being built. So there is a clear possibility of introducing these products in India. And we are as we speak now, we are developing a roadmap for introduction of these products in India.
Unidentified Participant
And sir, based on the assets which we have acquired and like, if you can highlight like how much Revenue will can they generate at an optimal utilization level and because we also acquired a sizable land. So is there any immediate feedback that we are looking to incur over there or is it or is there any plan to incur capex in every timeline? You can also outline that.
Harsh Patel
Based on the current installed capacity at Omiras, I think the aggregate capacity utilization is right now around maybe even below 50%. So there is substantial scope for further growth without any major capex requirements. So there may be some incremental capex for balancing equipment and things like that, but there is no major capex that is envisaged in the near term in terms of the land available for the expansion. Yes there is land available but again there is no immediate plan to build more capacities.
Unidentified Participant
I’ll just repeat my question. I mean because we are requiring just specific assets of Omera and Omera does close to around 200 crores of revenue based on current conversion of 0 to INR. So I’m asking on the basis of the assets which are acquired, how much peak revenue can that generate?
Harsh Patel
As I said we are working at the 200 crore rupee equivalent revenue is roughly at about 50% of the capacity. But we are not acquiring complete Omera. That’s what. No, we have acquired all the. All the manufacturing infrastructure we have acquired in total we have acquired. The entire manufacturing infrastructure has been fully acquired.
Unidentified Participant
Okay and because currently we have as we mentioned the order book is currently around 7 million euros and the pipeline also looks healthy. So and we have a very good history of turning around business and quite good timeline. I mean be it Thalitec or K N which we have acquired from maybe liquidation or nclt. So I mean is there any similar timeline which you are working upon or do we even see this to turn around at a faster. Please if you can also share your thoughts around that.
Harsh Patel
So I think we will. We are looking at this to be a healthy profitable business within a time horizon of about three to four quarters.
Unidentified Participant
And the margin profile, I guess in yesterday’s interview Alab sir also mentioned the margin for the theme is going to be double digit margins. So. Would it be similar to our glass line business margins which we have in Thalitec? Or it would be different I think.
Harsh Patel
Considering the cost structures that we have evaluated as well as the margin profiles and the gross margins etc. We believe that this business will also provide a similar operating margin and net profit margin comparable to. Yes.
Unidentified Participant
Got it. Answer. I’d like to season one more question. I mean because the product portfolio, the silos the tanks, facades and the biogas side. I mean if you can share more insights on the market and the competition side, like obviously Omeraj has a history of 187 years, but the. From what we are able to gather, they have a history of delayed orders. So as you can also highlight on the competition side, like how are they placed and how does Omera differentiate itself among the big market opportunity which it presents?
Harsh Patel
Yeah, there are, there are a couple of, you know, players of size similar to Omera in this space. So when I say, when I said this space, let me clarify. There are a couple of players of Omera size in the, in the tanks and silos business. There are also other players who specialize in the architectural facade business. But Omeras is the only one who actually masters both. So there are very, very few players who are actually able to deliver quality products in both these spaces. I would say, you know, the players for the tanks and silos are located in North America and Europe largely.
There are also a few in China, but they are largely catering to the Chinese market. Similarly, also in the, in the facade business, there are one or two competitors within Europe, but they are much smaller. And like I said, they only manufacture. Architectural bank. In the. Sorry. In the architectural business, actually there is no company in the world, as per our understanding, who can deliver at scale that Omeras can deliver. And so that is one big advantage that Omeras has.
Unidentified Participant
Okay, sir, got it. I’ll come back in here.
operator
Thank you. The next question comes from the line of Karan Sharma from Credit Brokerage Services Ltd. Please go ahead.
Unidentified Participant
Hello.
operator
Yes, please go ahead.
Unidentified Participant
So I see some part of capital allocation recently entering Europe.
Harsh Patel
We can’t really hear you. Can I request you to please speak up?
Unidentified Participant
Am I audible now.
Harsh Patel
A little better?
Unidentified Participant
Is this better?
Harsh Patel
Yeah.
Unidentified Participant
So my question was on capital allocation. So we have seen some part of capital allocation moving towards Europe in the recent times. And from what our reading suggests and what we have seen in history is basically whenever Indian companies have gone on to acquire assets in Europe and Germany, they have found it difficult to turn it around. Means there might be larger acquisitions, smaller acquisitions. But it has been difficult, it has been a difficult task to turn these around. Now as acquiring Thalitec and now one in Germany where usually the recent news has been around a lot of companies, their chemical and others closing down, the shutting down because it is unviable to run these assets at the cost structures that these countries have.
So is there something different that you guys have seen probably which could help us or give us More insight into why this decision making into Europe. That is the first question.
Harsh Patel
So I think, firstly, I do not entirely agree or we do not entirely agree that the industry or the industrial scenario in Europe in general is bleak. I think there are certain pockets and there will always be certain industries which may not do well. But in general, for example, our experience with the Thalitic acquisition has been very, very good, as you would have seen. I think we have not only acquired it at a value which was very, very attractive, but we’ve also been able to build that business and generate both double digit growth rates as well as double digit margins.
And you will agree that that definitely speaks well for what we’ve been able to do with that company with Omeras. The advantage is that it is already in a very, very high niche. So I think one other thing that we are very conscious about is in our selection of targets. Thalitec was a one of a kind company and continues to be a one of a kind which competitors have found very difficult to emulate. Similarly, Omeras is also a one of a kind business which we are very confident they will be able to stay ahead of competition, if any, for several, several years to come.
In addition to this, we are acquiring Omiras at a value which is less than its inherent asset value. So we are not even talking of business valuations here. More importantly, we are acquiring not just the business and its order book, but we are also acquiring the management team. We always look forward to continuity in terms of management and the capability that they bring with them. And this always has helped us in good stead in all our acquisitions so far. So we obviously want to look at it very closely. We do a very close study of the pros and cons of any acquisition, most importantly sustainability and the management bandwidth.
And that has also gone into the evaluation of this acquisition as well. So I think we feel very, very. Confident that we’ve actually got a jewel at a very. At a very, very affordable rate. Perfect. If I may ask one more question. Yes, yes, please, go ahead.
Unidentified Participant
Yeah. Second question was looking into the future. So are a couple of our acquisitions or adjacent. We have been into areas where we usually have not been in the process, like SMB and gae. So architectural panels. What is our. What does our capital allocation in the future look like? Would we be adding more efficiencies? Would we be exploring other countries also as well in these terms or would it be like more internal, domestic oriented?
Harsh Patel
Yeah, so see, whenever we do an acquisition, we always look for certain synergies. So in all our acquisitions, whether it is Kinam or Thalitec or currently with the assets of Omiras, the synergies has been the inherent technologies that are required to manufacture these products. And in the case of Kiram and Tanitec, there is a large overlap of customers also. So the acquisitions have not been without strong synergies already present in the business. Similarly, the Omeras acquisition right now is basically based out of the strong synergies that emerges from the technologies that are used in manufacturing the products that Omras is making.
And on top there is a synergy in the final customer base. So there is some cross selling possible within that. So we are not going out looking for companies just for the sake of growth or acquisition only if we find value and synergies in a target, then we go ahead and look deeper into that. So there is no real plan of. I mean we don’t have a plan of looking for different kinds of companies. So we are not shopping, let’s just put it that way perfectly.
Unidentified Participant
Thank you.
operator
Thank you. The next question comes from the line of Dikshant from DB Wealth. Please go ahead.
Unidentified Participant
Hello management. Congratulations on our acquisition. Thank you. The first question is, let’s say in the next 12 to 18 months, what kind of consolidated top line growth can we see from our current numbers?
Harsh Patel
So I think in our earlier call we had indicated our annual growth to be in the high teens in the 16 to 18% growth rate. Maybe on a consolidated basis this could get closer to 20% looking at the current order book. So actually things are looking very, very encouraging in the existing business across all our segments. And of course the Omiras edition will be a straight add on over and above that. So I’m not putting a percentage terms to that because that will be the bolt on addition in terms of number. So I would say 12 month revenues, maybe FY27 for Omera would be.
We are expecting it in the range of between 20 to 25 million euros.
Unidentified Participant
So secondly, are all of whenever we have done an acquisition, our opportunity has always been better. And you have mentioned on the call that operating margins would be better than our current businesses or similar to the high range of our businesses. So what kind of consolidated operating margins can we be expected? Do you think we can go back to the high teens and more?
Harsh Patel
I think all our businesses are in have the potential to be in the mid to high teens with possible exception of Kinam, which is actually in excess of 20% in terms of operating margins. So I think on an average basis mid to high Teens is definitely, definitely something that we are aiming to achieve.
Unidentified Participant
Okay, so maybe this is not relevant to our acquisition, but it might be relevant to the macroeconomic environment of eu. So EU has in this year really announced a huge defense budget. And generally it seemed that there has been some correlations in defense and infrastructure spend spending overall in the past cycles. Do you think, or has this one of our consideration while currently doing this acquisition that we see better infrastructure growth in the EU space? Or like what kind of macroeconomic activity are you seeing there, which is giving us more confidence?
Harsh Patel
Yeah, so see, many countries in EU are basically trying to diversify out of the dependence on Russian gas. And mostly this is happening via the biogas route or some part of it is happening via the biogas route. And it is expected that the biogas market, the investment in biogas is roughly going to be 28 billion in the coming years, euro. And this was one of the considerations because Omeras has already already had installations in the biogas storage facilities in say Italy as an example. So this was one of the important considerations. Also there is reasonable infrastructure push going on in Europe and there are many metro stations either being built or being renovated because they have their system so old.
Now it’s time for renovating station. So this we have seen, in fact we had as a part of due diligence, we met a couple of customers who were these underground tunnels or metro stations to get an understanding of what is going on and what may pan out in the coming years. So that’s also been a consideration. And, and this is on top of the basic tanks and silos, which is like an evergreen business going on. And also I would like to add that this is a global opportunity. This is not just for eu because if you have traveled across us, you would have seen that a lot of grain storage facilities are glass steel tanks.
And Omiras is not even ventured there. So we also, in the course, in the due course, we also intend to intend to address those markets. There is also, apart from eu, there is also a macroeconomic factor being that countries like say within the Middle east, they are building artificial cities, or I will not say artificial, they are building new cities. And when you build a new cities, like for example in Saudi Arabia, they need a lot of water and a lot of sewage plants are coming up in those areas. And Omaras has already given some supplies to those kind of projects.
So yes, we have taken into account a lot of macro and economic factors while taking this decision.
Unidentified Participant
So let’s say a 20% growth on our top line for BFY26 and Omeras would be completely over and above. We are not considering Omeras as in this 20% calculation.
Harsh Patel
Yes, that’s correct. That is correct.
Unidentified Participant
And what kind of growth can we see this year for Omeras, for FY26? What kind of top line euro benchmark do we have in our mind?
Harsh Patel
So I think Omiras this year will not be a benchmark year for two reasons. One is of course because it will be consolidated only for partial period, since it will only be consolidated from the period of acquisition. So it will be only pretty much about a seven month kind of a number that will get reflected. We also believe that we may take two or three months for reorganizing some of the internal operations, as well as ensuring that all the transition arrangements have been duly complied with. There are also some regulatory compliances that need to be ensured.
And so I guess I would say the next one or two quarters may not be reflective of what the acquisition stands for, which is why we believe FY27 will actually be a true indicator of what this asset can deliver.
Unidentified Participant
Got it. And that would be in the neighborhood of 25 million euros.
Harsh Patel
That’s correct. That is correct.
Unidentified Participant
Okay, and last question, sir. How is our pharmaceutical business doing right now? Now, what kind of upswing in the cycle are we seeing? Can you give us some sort of highlights on how the overall business right now is doing apart from the acquisition?
Harsh Patel
The pharmaceutical business. So when we say, when I say pharmaceutical, of course we mean the API part of it is doing actually quite well. There has been, from last year to this year has been a double digit growth across the country. And even in Europe and US, we are seeing investments coming in in the pharmaceutical industry. And we expect that this will continue to do well in the coming year. Or so, or two years roughly.
Unidentified Participant
Do I have permission to ask one more question, sir?
Harsh Patel
Yeah, we don’t mind.
Unidentified Participant
Yes.
Harsh Patel
Yeah.
Unidentified Participant
So this is much more from a larger perspective. Peptides and pharma is supposed to be a very big decadent thing. What kind of product innovation are we doing to make sure that the tools that we provide to the pharmaceuticals are in line right now? What kind of innovation strategy are we having right now? Because this GLP drugs are the first frontier drugs. But there are a lot more things that might come up from the research that we have been doing. So you being the pioneers in the tools industry for pharmaceuticals as well, could you help us understand this a bit more from a larger perspective?
Harsh Patel
Yes, it’s a very interesting question and also quite Coincidental, because all the equipment that is used for peptide production is also quite similar to the ANFDs and dryers that we manufacture. And we have already received orders and are in the process of supplying equipment for this application. So, you know, while we had to do a lot of innovation fairly quickly, but I think we have been able. To deliver on that front quite effectively. But from a directional perspective, this is just the start of the peptide industry, right? This is just the beginning. Innovation would need much more investment from. Our end right now. Yeah, I would agree with you, but things are moving fast and we are working to make sure that we keep up and actually stay ahead of the market. We may not be able to tell you everything on the call. Some of them, as you might understand, we are market sensitive and. Yes, but we are, we are on top of this. You can be assured of that.
Unidentified Participant
Good to know. Sir, congratulations for the acquisition. Again, best of luck to the company.
Harsh Patel
Thank you. Thank you very much.
operator
Thank you. Ladies and gentlemen, if you wish to ask a question, please press star and 1. The next question comes from the line of Veer Vadera from New Share Investment Advisors. Please go ahead. Veer, if you can please unmute your line and ask your question.
Unidentified Participant
Hello? Am I audible?
Harsh Patel
Yes.
Unidentified Participant
Yeah. Congratulations for the acquisition. I had few questions apart from the acquisition for the general business. So if we observe this quarter the margins in black line segment were lower. As compared to previous quarter.
Harsh Patel
And also we compared to the competitors, was it due to different product nature or due to different geography? And also if we see this quarter order book hits all time high. So from which segment more order inflow has been uploaded. So I think first of all, I think the margin profile on different segments are also vary quarter on quarter. You must have seen our past history where the first one or two quarters are relatively, should I say softer than the latter half of the year. So you will see margins and volumes building up during the first quarter itself. I think the volumes have grown substantially in the filtration drying business as well as in the glass line equipment business out of Europe. The Indian glass line industry, Indian glass line segment is also seeing a good inflow of orders which will start getting reflected in revenues and margins going forward.
So I think we are hoping to maybe address your questions by actual performance in the next couple of quarters. And also XV got approval formal commission of Kinam Engineering. And as per my knowledge, and as per my knowledge, we were going to issue shared worth of 78 crores of HLE to the Meta family. So how much dilution do we expect after this amalgamation? So I think, I think we have just had the hearing of the final hearing of the NCIT last week where the order has already been pronounced. The scheme has been approved in open court. We are of course waiting for the written copy of the order which is expected in the next few days. So as we stand, the scheme has been approved. The total dilution or fresh allotment of shares is to the extent of roughly about 1.7% of the outstanding equity capital of the company.
Unidentified Participant
Okay. Lastly, what would be the execution timeline across all the products of Omera, including. Tanks, silos and facades?
Harsh Patel
So it depends on projects. It really depends on projects. We could have execution timelines ranging from five to six months for plain vanilla tanks and silo, let’s say smaller orders to larger orders which can even take in excess of two years.
Unidentified Participant
Okay, thank you and congratulations for the great future.
Harsh Patel
Thank you. Thank you very much.
operator
Thank you. The next question comes from the line of Vivek Gupta from Star Investments. Please go ahead.
Unidentified Participant
Yeah, hi. Am I audible?
Harsh Patel
Yes.
Unidentified Participant
So my first question was Omera’s FY24 turnover was roughly around 22 million euros within, within EBITDA margins. So what kind of margin profile and breakeven timelines do you target post the integration? Just wanted to understand like what is, what is the realistic EBITDA margin range you are targeting for Omeras in the next two years and also how this compares with HLS consolidated margin profile.
Harsh Patel
So I think we probably addressed this earlier. It responds to somebody’s question. But I think over the next one to two years we expect margins, EBITDA margins to be in the mid teens as we mentioned, in double digit mid teens, which will be broadly in line with the overall profitability profile of our European business.
Unidentified Participant
Okay, so secondly, when do you expect the dean to become EPS accretive and what is the expected impact on ROC and ROE?
Harsh Patel
So the deal will be EPS accretive. In hopefully 2/4, worst case scenario, 3/4. So I would say between 2 and 3/4 in terms of ROE ROC, considering that we have acquired the assets and shareholding at below its book value, it will be obviously extremely positive from a ROE ROCE perspective that we haven’t acquired this at any business valuation or any multiple of any profits or revenue or any such thing. We have actually acquired it at our value, which is less than the asset value.
Unidentified Participant
Okay, so my last question would be like how does this acquisition affect HLS capital allocation Strategy? Strategy like should you, should investors expect more in organic growth moves, which moves in Europe or will the near term focus on consolidating this acquisition and also debt reduction on console level as directed during previous earnings con call?
Harsh Patel
I think the broad direction on debt reduction remains the same. We will pursue our strategy of keeping debt within very, very reasonable levels so that doesn’t change. The acquisition of Omira’s doesn’t add to debt. It has been entirely financed from internal accruals. And the value of the acquisition, as you are aware, is 2.75 million euros, which is somewhere in the range of 27.5 crores and really is not from a balance sheet perspective. It doesn’t stretch the balance sheet at all. Okay, thank you, thank you, thank you.
operator
We take the next question from the line of Agastya Dave from CAO Capital. Please go ahead.
Unidentified Participant
Sir, good evening. Thank you very much for answering all the questions very patiently. Sir, a very simple question. So when you acquire this, this company and it gets reflected on the financials, what is the asset block that will get transferred? And because you are, you are doing it below book, I’m just trying to understand how the various accounting entries will happen. So on the gross block side, what will get acquired? And on the working capital side, you said you are, you’re taking over some of the trade liabilities. Have you quantified that, sir?
Harsh Patel
Publicly? Basically, yeah. Sorry, sorry. Please send it.
Unidentified Participant
No, sir, please, please, please. I’m. I’m done, I’m done, I’m done.
Harsh Patel
Okay, so the only value of trade liability that we are acquiring is €300,000. So it’s not. So it’s not material. So if you look at it from that perspective, my total acquisition cost goes to about 3.05 million. If you add, let’s say, the netting off of the trade liabilities. So the asset value is asset value at book value, and I’m not even talking of market price or any such thing, at book value is currently in excess of about 6 billion in terms of the book value itself. So we are discussing with our auditors to scale down the valuation down to our acquisition price, which is what ifrs or indes requires us to do.
We’ll follow the accounting principles in this respect. But yeah, there will be actually a scaling down of the valuation to bring it to our.
Unidentified Participant
Thank you very much, sir. That was what I was trying to figure out and it was not very clear to me what exactly.
Harsh Patel
I think the intention is not to bloat the balance sheet. The intention is actually. Any pension liabilities, any of balance sheet items. You, I’m pretty sure you’re you’re onboarding many of the employees so how, how is that being handled? We are, we are issuing them fresh appointment letters and all their existing pension has been fully paid out in terms of funding and we have exactly zero carry forward pension liabilities.
Unidentified Participant
And going forward would you have to create any provisions for pensions?
Harsh Patel
Yes. So that will be part of our. Our cost of the people that we acquire take over the pnl. Yes, that will flow through the PNL. Exactly as and when the activity levels pick up inside HLE group. No, no nothing from the funds. We are taking that as an, as an, as a fresh cost for the services like that.
Unidentified Participant
Perfect. And so finally there was a question on need for capex in this particular company. So in terms of the condition of the equipment, of the manufacturing setup, how is that and what kind of maintenance capex would you, would you require and if you do try to expand, would you be like now that you have access to the technology, would you be doing the expansion in India and continue to use the brand or would you do it in, in Europe? And what kind of like utilities and land are you like do you have access to for future expansions?
Harsh Patel
Yeah. So as Nileshpa had earlier mentioned on this call, we are currently at quite a low capacity utilization.
Unidentified Participant
Yes, 50%. Yes sir, I heard that sir. I’m just try to figure out.
Harsh Patel
Yeah, so, so there is really no capex required from a capacity. Right. Also from a quality of equipment perspective, you know the, the kind of equipment that they have are state of the art. Many of the equipment are also brand new.
Unidentified Participant
Okay.
Harsh Patel
We have, we have state of the art laser cutting lines for profile cutting of, you know, steel sections for steel plates. There is also a fair bit of automation both in the metal working and the glass lining parts of the business. So in terms of the quality of the assets, they are top notch. And I would be hard pressed to find a facility which is so well. Equipped in this space. So then you have got a very good deal.
Unidentified Participant
Congratulations sir.
Harsh Patel
Thank you. Thank you so much.
Unidentified Participant
All the best sir. And thank you very much for answering all the questions.
Harsh Patel
Thank you.
Harsh Patel
Thanks. Thank you.
operator
Thank you ladies and gentlemen. In the interest of time, this will be the last question. I now hand over the conference to the management for their closing comments.
Harsh Patel
Thank you ladies and gentlemen. I take this opportunity to thank everyone for joining in on the call. I hope we have been able to address all your queries satisfactorily. In case you require any further details. You may please contact us or MUFG in time. Ir. Thank you again.
operator
Thank you. On behalf of HL E Glassport Limited. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.