Interarch Building Products Ltd (NSE: INTERARCH) Q4 2025 Earnings Call dated May. 22, 2025
Corporate Participants:
Unidentified Speaker
Arvind Nanda — Managing Director
Manish Garg — Chief Executive Officer
Pushpendra Kumar Bansal — Chief Financial Officer
Analysts:
Unidentified Participant
Jaiveer Shekhawat — Analyst
Yug Jhaveri — Analyst
Jaiveer Shekhawat — Analyst
Parikshit Kabra — Analyst
Rahul Kumar — Analyst
Rohan Vora — Analyst
Aasim — Analyst
Presentation:
operator
Please wait while you are joined to the conference. The conference is now being recorded. Foreign. Ladies and gentlemen, good day and welcome to the Q4 and FY 202425 earnings call of Interarch Building Solutions Limited hosted by Ambit Capital Private Limited. As a reminder, all participant lines will be in listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Jaivir Shekhavat from Ambit Capital. Thank you. And over to you.
Jaiveer Shekhawat — Analyst
Thank you so much and good evening everyone. I welcome you all to Q4FY25 earnings call of Interarc Building Products. From the management side today we have with us Mr. Arvind Nanda, the Managing Director, Mr. Manish Garg, the Chief Executive Officer, Mr. Pushpendra Kumar Bansar, Chief Financial Officer, Mr. Anil Kumar Chandani, President Corporate Finance and Strategy. I would now hand over the call to Mr. Nanda for his opening remarks. Thank you. And over to you sir.
Arvind Nanda — Managing Director
Thank you Jaydeep. Thank you. First to the Ambit team for yet again hosting our earnings call and I would like to thank all of you who’ve taken their time out to join this investor call. So I think what we’ve been trying to do for the last three or four investor calls since we went listed is to just explain a little bit overview of the pre Internet building industry because we feel that it’s a pretty unique industry and we are a pretty unique player in the listed space while other companies are listed as pre engineered building but nobody is a pre pure play pre engineered building. I think most of you have heard my earlier calls as well, so I’ll keep it very brief. So pre engineered buildings are primarily steel buildings used for any purpose.
You can use it for industry, manufacturing, warehousing, your high rise, building stadiums, airports. So these are pretty much building agnostic, you can do any kind of building in it. So there’s no limitation as far as that is concerned. So that is one big advantage of a steel building that you can do any kind of building. In plain unit building industry where we are one of the leading players. What happens is that a customer comes to us with only his requirement. He tells us what he needs in overall specs, you know, height, length, weight, loadings, which the way the location will be, what kind of temperature he wants inside, what kind of insulation, etc.
And all the Design and engineering of the building office requirement, whether it’s a plant, warehouse or airport, is done by Interoc engineering and design team. So as a first stage, we interact with our sales team, which is a very highly qualified engineering sales team and a very highly qualified engineering and design team. Using very advanced software and technology and computers, they work together to close the building with the client wants by value adding. As premium buildings sometimes add a lot of value to how that building can be done better, speedier as well as cheaper. So a lot of interaction between the client, his consultants, could be his pmc, could be his structural consultant and the interact team happen even before we can make a bid.
So once the building is more or less closed, how it should be done, then we design engineer that whole requirement into a building. How will that requirement convert into a building? Because the client doesn’t tell us what to do, he doesn’t tell us what seal to use or what thickness to use or what should be the column. We just have to follow his requirement and the building codes which are of course essential. So then our design team gets onto it and designs it with as much value add and as much as design skills as they have.
Because it’s very critical that we design the building in the best possible manner. Because if we do not design and engineer the building in the best manner, we will be not optimizing the usage of steel or optimizing the production or delivery or erection. And therefore we will become uncompetitive. Because in this business you do not quote to a client on a per kilo basis or a per square foot basis, but in a lump sum of a building. So everything from how much steel will be used. Primarily our buildings use three different kind of steels and hardware.
Steels are HR plate hot rolled plates which we buy from all the well known mills in India. And galvanized coils which are used for secondaries which we roll form into the right items that we need. And the roofing and wall cladding which is the skin of the building, which is again a very highly coated material, very high technology, very strict requirements because that is the one item which is exposed to weather. And steel being very corrosive in nature, the coatings have to be excellent. So we buy from companies like Tata Bluescope which are world renowned in this kind of coil.
So these are the three raw material, HR coil and HR plates, GP coils and roofing cladding, color coated or zinc aluminum coated coils. So the whole building is manufactured as per the design approved by the client. After we give him the requirement and then he approves the order. It is converted into a building by how are we going to make these columns and beams and secondaries, roofing, cladding, all the closures, finishing. So the whole building is costed in that manner. How much steel will be used of all hardware? How much will it cost us to manufacture in house? But the second stage or third stage of our building is how to produce it.
Every item is manufactured in house in our plants. We do not buy any ready made items from outside. We do not buy any H beams, I sections or perlins etc outside. Everything is manufactured in house or at the site like roofing. Then that costing is done and then how much will it cost to take the material to site? And then of course how much will it cost us to erect that building? Because we have to give him everything from design engineering to a completed building at site. So the design, engineering and salespeople work together to do a costing which has to be competitive, a great value add design so that we can use the least amount of steel, manufacture it efficiently and meet the schedules that the client requires.
And we then give him a lump sum price and a definite date of completion. So this whole exercise is done even before we have got the order. This is to enable us to quote for the building. This is the specialty of pre engineered building that we have to be able, we have to be able to design, engineer, manufacture and erect the building at site and in a very competitive manner and in a very high quality manner and on schedule for us to even bid to the customer after that. There are many other factors which come in when we are bidding, talking to the client.
It is our past history, it is our ability to do a good job. What does he think of Interoc? Does he think that we are the right people for him to do the building and the erection and you know, give him the right schedule. So it is his belief as will we be the right company for him and the right price, the right date and then he decides the order. These are not price driven orders. In many ways. Of course there will be ultimately competition between one or two other competitors which they feel would be similar.
But a lot of the decision making is already done before we even bid. Because it is how much he trusts you. This product and this business is more about trust and confidence that the customer has in your engineering, in your design, your ability to deliver and ability to deliver a quality product. Because don’t forget we manufacture everything in house. So the quality of the product is also on us. We don’t Buy any ready made sections from other people so that that quality is assured. And of course then the completion. So after we get the order, which is the decision is taken on many different basis.
Past history, have we done similar kind of buildings? Have we done work in the similar industry before? Have we worked with their group companies or those companies by themselves? So then, and then of course there’s a final thing about price. But the decision by the customer is already made by the time we reach that stage. And then once we get the order, of course the design engineering again gets into the act. And they have to make the whole building into pieces which are manufactured by the plant. So then they have to get some shop drawings, as we call them, issued to the plant.
Because each building could be hundreds and thousands of pieces. But each piece has to be transportable to site. It cannot be a complete building. So the each piece is manufactured in house and taken to site completely ready. It is drilled, cut, welded, even final coats of paint are done in house and then taken to the site. And at the site, everything is just a nut and bolt assembly. There is no cutting, welding, drilling, painting done at site. Everything is nut and bolt. So these whole process gives you two great advantages to the customer. Besides the fact that he’s getting a lump sum price of the building like a product, he’s no longer dependent on different parts like contractors or suppliers or consultants to be able to give a price and stick to it.
But from one company he’s getting a complete price. So like we say is one building, one price, one date. So only one company is responsible. And that is the best advantage that a customer gets, that this whole building of his is converted into a product. The other two major advantages that he gets are very fast delivery of the building and erection. Because a lot of the work which has to be done at site is done at site parallel to while we are getting all our approvals done and manufacturing all the parts in our plant. So a lot of activities happen parallelly.
And the day that the building, the site is ready to receive the structure, the structure starts arriving and starts getting erected. Unlike in a conventional steel building where the material would start coming after all the civil work is done, and then the building would start getting manufactured at site. Second big advantage he gets is the quality. Because everything is manufactured and made in house, on automatic machines by highly trained people and under very controlled conditions. So this gives him the highest quality that he can get. Nothing is done at site compared to traditional building, which are actually made on the site itself.
On the site, the Quality of labor, quality of welders, quality of the type of the weather that they go through all this, the quality is dependent on all this. Whereas now the quality is all dependent on the plant. So these are the major advantages it gets in pre Internet building and interact. We are pretty much industry agnostic. It doesn’t matter to us what the clients and industry is. We have done everything from auto to FMCG to A grade warehousing to all kinds of paint plants, Grassim, Asian paints, Berger hul, all machinery manufacturers like sms. So every kind of industry we have worked in recently last four or five years, a lot of new industries like what we call the new age industry has come up.
Data centers, semiconductors, renewables and solar renewables, lithium battery, EVs, all these are coming up. And we are participating in every industry there is. Because to us it doesn’t matter what your industry is. We have to have the capability to design and engineer the kind of building you need. And today’s building in most of the industries are very complex. They are more or less like a part of the production process. They are as important as the capital goods and the machinery installed inside. In fact, we believe that we are the first capital goods that a customer thinks of, our user thinks of.
We are not really a builder or a contractor or a fabricator, but a capital goods partner with the client. He treats us like that. He will come to us first. But if we cannot design, engineer and make the building as he requires, his machinery or his processes cannot be done accordingly. And of course if the building is not completed on time of the highest quality, then his whole process and his production will get delayed. So we are more like a capital goods industry and a capital goods partner for these companies. That is why they keep coming back to us again and again.
Just like most industries like to go back to a reliable and a good high quality, high value add. A company which is very, very concerned about the customer’s requirement and the customer’s ethics and rules and how we want it done. That is the kind of partner they want to choose. We are not like a builder which is chosen on L1 basis or the cheapest price, but as how they would like their building to be done. We can design, engineer, deliver and erect for them on time. And the building will work for 40, 50, 60 years without any problem at all.
That is how they view us. So the whole premier building industry is based on that. And of course we have as interarch advantage that we’ve been in the industry for 25 years. We were one of the pioneers and we have now done every kind of industry that exists in India. Nearly every company that is there in India, Indian and foreign, small and big and every kind of building that is possible from high rise to T3 terminal to process plants for paint lines and FMCG to building manufacturers to a grade warehousing for Amazon and Flipkart and any all these a grade warehousing company like IndoSpace WellSpun logos.
So there is no real industry. Airport T3 terminal was done by us many years ago. So we have been in this industry and therefore a very trusted player. People believe that if they go to Interac, Interac will be able to do their building, design, engineer, manufacture and deliver to them on time at a good value. We would not say we are the cheapest, we don’t even want to be the cheapest. But we want to be the greatest partner and value add to the client, to our user. He must get value from us and that’s why he’s prepared to pay us.
Because he sees value in Interoc and Interact Building which he doesn’t see in anybody else. And I think a lot of that is very apparent as we go forward. And we see every quarter, every year we are getting better kinds of building. Recently we got one of the largest single PEB orders given to any company in India of 300 crore plus. And that is again putting us in a different league because there are a lot of very large orders in India which the last three or four years were getting split into two or three PEB players.
But people didn’t have the confidence that one company can do it. But that barrier has been broken by us by getting this order. So I think we are every year, every quarter, every day we are breaking new ground. We are getting into new clients. We are doing the microchip plant for Tata Micron, for Tata Electronics. We are doing a lot of business for renewable from Reliance Solar to Vikram Solar to Amping Solar. You know, we have done work for renew power for First Solar lithium battery plants. First one set up in India was excited we did it.
Second one is being set up by Agritas which is a Tata company. We are doing it. So we are there in every area because we have become a trusted partner with all these people. And that is where Interact stands today. And I think our results and our quality of clients and the quality of business we do shows that and the way the economy is growing and the new players are coming in whether on PLI scheme, on semiconductor scheme, on renewables, on make In India, manufactured in India, China plus one. I think this is going to be a big boost going forward.
We’ve also tied up with companies like JSPL and boltech Technologies to add unorganically add to our engineering as well as manufacturing capacity. We are trying to add capacity as fast as possible because there’s a lot of business available in the market. We are, I think by end of June we will finish our AP phase two which we Phase one was done last year and our new line in Kicha. They’ll all both be finished and in full production. We have recently bought land in Andhra Pradesh right next to our existing plant to set up another line which we will start this year and hopefully finish in the next 10 to 12 months.
And of course we have land in Gujarat which we are preparing for another plant. As soon as we finish one we want to go into the next one preparing ourselves. We are preparing our engineering capacities and capabilities through companies like Voltech and other companies. We have tied up with opening a new office, two new offices in the south of India where there’s a lot of pool of people engineers available besides Chennai, Hyderabad and Noida that we have. So I think we are on the right track. We are doing a lot of right things to be able to expand our capacities and increase our capabilities to deliver to the customer.
I think business is the least of the problems right now. It is more how fast we can make all our four legs as we call them, sales, engineering, production and project management. How fast can we develop them to deliver to the customer as per the requirements. So I will now end my talk on this. There are a few things that we have done for the first time. I think we have the highest record sales, we have the highest recorded profit. We are issuing our maiden dividend as a listed company of 12 and a half rupees per share.
And we hope we will continue to give a dividend and increase it. Our next year’s projections are going to be as we had given earlier and we are still on track to do 23,2400 crore turnover by 2728. We are building up capacities. We have a very good order book as of 1st of May of 1645 crores. So we are well on our way to achieve the targets and the sort of figures given before. And I think our position is strengthening day by day. I will now request Manish to our CEO to take you through our company overview and then we look forward to your questions. Thank you.
Manish Garg — Chief Executive Officer
Thank you sir. Good afternoon all. My name is Manish. We are Proud to share that Interoc has delivered its highest ever quarterly as informed by Mr. Nanda, an annual performance, an outstanding milestone in our journey of growth and excellence. We are the fastest growing pre engineered building company in India, currently ranked second overall in terms of installed capacity and revenue from FY15 to FY25. In 10 years we have successfully executed and delivered over 700 pre engineered building projects. Now that explains our deep expertise and strong market presence. The company operates five state of the art manufacturing plants and four fully integrated pre engineered building facilities.
They are located down south in Sri Pernambadur, Tamil Nad Panthnagar in Uttarakhand, Patiwaram in Andhra Pradesh and Kicha, Uttarakhand. Our facilities have a combined installed capacity as we speak of 161,000 metric tons. Given that the utilizable capacity typically ranges from 80% to 85%, this translates to an effective 135,000 tons metric ton per annum. And to support our future growth we are currently expanding our facilities in Andhra Pradesh and Kicha, which is nearing completion and once completed in about a month from now, this expansion will add approximately 40,000 metric tons taking us to overall installed capacity of 200,000 metric ton.
Further to this, to support our growth plans as explained to you by Mr. Nanda, and to enhance our manufacturing capabilities, we have acquired an additional 20 acre adjoining land in our Andhra Pradesh Ativaram facility where we plan to establish a heavy fabrication line by end of September 2026 next year. As part of our continued focus on strengthening technical capabilities, we have also decided to set up two new engineering offices in India within the current financial year. On the sustainability front, we have installed 1 megawatt of rooftop solar, Adarpicha and Tantanagar units and a similar capacity rooftop solar is being installed at our Tamil Nadu and Andhra Pradesh facility.
This will entail savings in the power cost in terms of our order book and Clientele as on 30th April 2025, our total order book stands at 1646 crores reflecting a strong pipeline and sustained demand. We are pleased to inform that the company has secured the largest ever stranger net building order of about 300 crores in the Indian PV industry. We take pride in our diverse customer base with repeat orders contributing almost 82% of our revenue. Underscoring the trust and partnerships that we have built over time. Some of our recent key clients include IndoSpace, Havels, Segova, Balrampur, Cheney Mills, Reliance and Vikram Solar.
With the organized sector gaining a larger share of incremental orders in our industry, we expect to continue growing at 1.5 to 2 times the industry rate of growth. Looking ahead, we are focused on expanding our footprint and diversifying our solutions to tap into emerging growth opportunities, including expanding our operations with a new manufacturing facility in Gujarat wherein we have already acquired the land and in Andhra for heavy steel industry. As already explained to you, we are also upgrading our existing facilities as in alignment with our IPO objectives, diversifying into high growth sectors like EV infrastructure, renewable energy projects, data centers, semiconductors, multi story commercial and residential buildings and institutional buildings.
With these strategic initiatives, we are well positioned to drive sustained growth, innovation and market leadership in the year ahead. Just to explain you the major financial highlights, I’m sure you have gone through the investor presentation already, so just a glimpse. In Q4FY25 which got concluded, revenue for the quarter stood at 464 crores with a growth of 20% on a year on year basis. Our EBITDA for the quarter stood at 49 crores, growth of 29% on a year on year basis. Our EBITDA margins also saw an improvement and stood at 10.5%. Profit after tax for the quarter came at 39 crores with a growth of 30% on a year on year basis.
Our total order book is 1646 crores as on end of April 25th. Other highlights include our revenues to debt 1454 crores with a growth of 12% on a year on year basis. Business mix of the end user was industry dominating at 77% followed by infrastructure 21% and other buildings at 2%. Our EBITDA for FY25 came at 136 crores with a growth of 21% on a year on year basis. And for the full year EBITDA margins were 9.4% profit after tax for the year FY25 came at 108 crores with a growth of 25% on a year on year basis. And as Mr. Nanda already explained, we have declared our first maiden dividend per share at the rate of 12 and a half rupees which turns out to be 125% of the face value. With this I would like to conclude my presentation and open the floor for question and answers. Thank you very much. Thank you.
Questions and Answers:
operator
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press Star and two Participants. Participants are requested to use handsets while Asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We will take our first question from the line of Yug Zaveri from Molecule Ventures llp. Please go ahead.
Yug Jhaveri
Hi sir. Am I audible?
operator
Yes.
Yug Jhaveri
First of all congratulations on such a good set of numbers. So first question is regarding the current order book stands at around 1650 crore while the revenue potential at full 2 lakh capacity assuming 85% utilization is estimated around 1900-2000 crore. So given this gap, do you see sufficient demand to scale the order book further towards full capacity utilization? And by when do you expect such peak revenue within the existing capacity? We are not including the new capacities which are coming.
Arvind Nanda
You see the capacity which we are adding right now will come into place by end of June, early July. So we would have lost the first quarter. So we are hoping that we can do more order book booking primarily on a little bit of a longer. You’ll see there’s a lot of large projects also coming up which are taking in requiring buildings in a little longer period or more than 8 to 10 months which is a standard for pre engineered buildings.
So we are concentrating on that because with our present capacity to execute it will be difficult to take any short term orders. But there are a lot of long term orders in the market and I think we are doing that. Plus on the other side we are trying to grow faster and faster with our capacity organically as well as inorganically. But right now we can’t say much but I think another two or three months we will have a little clearer picture on that.
Yug Jhaveri
Okay, okay, got it. And do you see an impact on the demand side due to slowdown in private capex which is current scenario?
Arvind Nanda
You know private capex has been slowing down for last five years. Every time we, the private capex is slowing down. But I think what happens is that there’s always private capex going on and we have to be a participant in that. I think we are not to worry about the overall growth because like I mentioned earlier we are industry agnostic. We deal with all the top companies in India, all the foreign companies coming into India, all the new industries, new products. So you have to make yourself a relevant player with them. But the kind of business we want, two to two and a half thousand crore is peanuts compared to what the private investment is. So we don’t really concentrate too much on those figures. Of course we are very happy that if private capex actually takes off by whatever criteria we want to judge it, our business should grow.
But we do not see any downturn in our business. In fact, we feel that we should build capacity faster, that there is so much demand in the relevant sectors we are in. So we are more bothered about the sectors we deal in, the clients we deal with and the people that we are in touch with for future growth.
Yug Jhaveri
So while we are expanding in Andhra Pradesh and also Gujarat, so there is any specific industry which is gaining a lot of traction in those regions or those you say that data centers, renewables, those all sectors are only gaining traction going ahead,
Arvind Nanda
there is no area.
You see, what is happening is that there is a lot of growth in the southern part of India, as we all know, whether it is renewables, whether it is, you know, your batteries, ev. And then there’s a lot of growth in the western sector, Gujarat, Maharashtra. Again there is. But we are not setting up plants only because we want to be close to customers. It is very difficult for us to be close to every customer. I mean, we are doing a project right now for Tata, more Tata Electronics in Assam. We are doing one in Gujarat.
You know, so there’s a lot of. But if you were to put on one or two places, I would say Gujarat, Maharashtra is a very key one and south of India is key. But plant decisions are not taken only on that basis. We are pretty close to the sector. But we are seeing, you see what happens with us is, what we have seen is that, I mean we have a lot of traction with certain industries for certain years and then the industries can also change. Like it was very high with automobile 20 years ago, then with a grade warehousing, then a lot of FMCG and paint.
Now it is a lot with the new age like renewables and batteries and electronics, you know. So it keeps changing. But currently it is more of these, what we call these new age semiconductor, your batteries, your renewables electronics. This is a very fast growth area right now.
Yug Jhaveri
Got it, got it. On that side. And after your partnership with Moltech recently, so how important will exports be going forward and which countries you will be targeting?
Arvind Nanda
See, we are targeting, we have started working on exports about a year, year and a half ago. And I thought, we thought that a little, few tie ups will help us.
Like Moltech has a very large presence in the US and they have a very large presence in India for design engineering. So it’s a double partnership with them in that sense that they will also help us in design engineering, sort of expanding our capacities and help us in getting business from their US clients who they were not servicing for the product till now. So we are looking at us, Canada to which we have already exported quite a few buildings, Africa, then also the CIS countries. So we are looking at a lot of these areas. Currently the figures are very low compared to our rest of our turnover.
But we are seeing a lot of traction happening from demand side going ahead. Exports would be, you know.
operator
I request you to join back the queue please as we have other participants waiting. Thank you ladies and gentlemen. In order to ensure that management is able to answer queries from all participants, kindly restrict your questions to two at a time. You may join back the queue for follow up questions. We’ll take our next question from the line of Hussain Baruchwala from Carnelian Capital. Please go ahead.
Unidentified Participant
Congrats on a good set of numbers. Sir, just wanted to understand, you said that you are basically expanding the Andhra facility for doing heavy structures. Can you give us more understanding on what do you mean by heavy structures and how do you want to scale that part?
Arvind Nanda
You know, in the steel fabrication as we call it, the buildings, see like we can do a building of 10, 20,000 tons also. But each piece of those buildings is, let’s say under 4 or 5 tons heavy piece in our current pre unit building would be three to four tons per piece.
And from that we can do what we call the light engineering buildings, you know. But then there is a lot of heavy engineering building which is like a steel plant or it could be a data center or it could be high rise buildings or even a lot of the new age industries like microchips and renewables also need some part of their building as very heavy structure because they have very heavy loadings on these buildings. So each piece being over 5 to 10 tons, when it goes in the range of 5 to 10 tons, we call it heavy structure.
So while the process would be very similar to what we are doing, but the factory requirements, machine requirements, the crane requirement, they change. So we feel that a lot of clients are coming to us with these heavier structure requirements. A lot of them we are refusing because we are not able to take that up productively. Even though we have tied up with GSPL for precisely this reason to help us out in production. But still we are not able to take the requirements which are coming up. If you look at the large area like port buildings, steel plants, fertilizer plants, power stations, data centers, these all require heavy structures.
So it’s just the piece is heavier, it doesn’t change anything much. But since we were not making it, we felt that there’s a lot of action on this items happening. So rather than just rely on outside sources, we are going to set up large ish first one production line of heavy structure and then hopefully if the business is there add a few more on that also. So heavy structures gives us a possibility of doing a lot of different kind of buildings, a lot of different sectors which we currently can’t.
Unidentified Participant
Got it. And secondly sir, you have guided almost 2700 crore of top line by 28. Am I correct?
Arvind Nanda
No, we said about 2400. 2400 by FY28. Yeah.
Unidentified Participant
Okay. And because of the export mix that you are intending that you will have some exports in future. So do you see your margins improving because of that also?
Arvind Nanda
Well I think our margins are going to increase. We feel we can’t promise on couple of reasons. One is of course as we do larger and larger products, you make more money on larger product because the direct costs are not as high as you know, 100 crore project or 10, 10 crore project. Invariably you’ll make more money in the 100 crore project you will get also you will start getting better prices as you move up the value chain because the client’s requirements and clients expectations in 100 or 200 crore project is very different than a customer who’s setting up a 10 crore project.
So you can command higher because you are one of the one or two companies only which can do his projects. Third is of course your internal operational leverage and internal economies which we are constantly working on. How do you save wastage? How do you do better? We are adopting a system called cut to length that we buy material from the mills and ourselves Cut exactly to length which avoids wastage. How to improve productivity by automating more and more of our. We have spent a lot of money on our existing plants automating a lot of the processes that we were earlier doing manually which improves quality but also so I think these three areas will help us improve our exports.
I would. Exports does get you more money, that’s for sure. But right now I think for next one or two years I don’t see it being a major part of our sales. But yes, we want to be a participant because exports gives the company a different image which is very critical for our company. If you can export to USA and Canada, you are considered a different level of player than a company which is only doing localized Indian business.
And of course we feel that the more arms like an octopus, the more arms we have in high rise data centers, exports, heavy structures, industrial building, the more it helps us in attaining Higher targets, being a serious player. And also, you know, sometimes there’s a slowdown in one part of the industry or the other part of some building. So you make it up because you are in the multiple sort of areas. So that is the real reason for exports. But yes, I think to get better margin, we are trying on very different levels constantly.
Unidentified Participant
Got it, sir. That’s the only things from my side. Thank you. Thank you.
operator
Thank you. Take our next question from the line of Jaivir Shekhavat from Ambit Capital. Please go ahead.
Jaiveer Shekhawat
Sure. Thanks a lot. And Mr. Nanda, congratulations to you and your team. So my first question is in terms of your average order sizes. So we have seen that that has increased over the years. Possibly if you could help us understand on that and also the orders that possibly you would have taken over 20 crores, 50 crores. What’s the overall mix of that in your overall order pipeline? Okay, I’ll request Manish to take the question. Manish.
Manish Garg
Yes, sir. Yeah. Hi. So our average order book, that’s your first part. Our average order book order size rather has increased from an average of about three and a half, four crores three years ago to 10 to 11 crores now. So that’s the major, you know, change in terms of the mix. We would say that about 50% of our orders are coming from orders which are about 20 crores.
Jaiveer Shekhawat
Sure. And are you actively bidding for more of these larger size product orders? Absolutely.
Manish Garg
I frankly won’t say that we were not bidding for large project earlier. I think our hit rate over last three years, we always bid for large project but hit rate was low. And as Mr. Nanda earlier also explained that in last three years we have been able to move the needle is that our hit rate in the larger projects has become much better. And therefore this change in the order mix and the average order size. So yes, we are getting more orders of those guides.
Jaiveer Shekhawat
Sure. And so your order book also is quite healthy. So what will be the execution timeline for that?
Manish Garg
So execution time generally you know, all our orders, I would say largest order also will never have a timeline to execute more than one year. So I would say whatever order book we have, maximum orders, maximum orders we would have to complete in about nine months. Some of the orders may be the ones which are very, you know, the largest, like this 300 crore plus, they give us about a year. But there is no order that right now sits in my order book which is, which is more than one year.
Jaiveer Shekhawat
Sure. So last question, I mean you alluded that there are a Lot of large orders that there are in the market. And you also alluded to the fact that your win rate or hit rate has also gone up and despite the fact that there has been general slowdown in private capex. So what has structurally changed over say the last few years wherein possibly the share towards players like you has been accelerating? Because I mean historically if one were to go back, I mean the share of unorganized has always remained high. But what has structurally changed over the last few years?
Arvind Nanda
See, I think in terms of the shift of the. Even if we look at MSME for some reason, and I think very definitive reasons, because Even when an SME or MSME was putting a capital, you know, investment 5 crores, 10 crores, 20 crores, they were very certain that they wanted on time and they wanted from a reliable party. That is why the gradual shift to buy, you know, like you, you see people buying branded goods, you know, more than ever before. So I think that has shifted. A lot more people are buying from what I will say organized sector companies.
And then I would say that our track record in the blue chip companies was so good that a lot more came to us. Our hit rate became much better. And that is why. And the slowdown that I think a lot of people do keep talking about, we have never really felt it, at least for last five years, is that there is a slowdown maybe because you know, our share keeps, keeps growing and the pie also looks to be bigger because there is also a lot of conversion that happens from the conventional building to pre engineered building. So that essentially, you know, I should say is the reason of our order book and our execution remaining very robust. Over last many years
Manish Garg
I think I would just like to add one thing to this. You see JJ also over this last two, three years, these new age industries which are coming up, their size of their building requirement like microchips or renewable or lithium is very large. You know, they are like automobile plants of the 2010 or 2005. So they are very large sizes, you know, being 10, 20, 30,000 tons to 300, 400 crore kind of plants. So and there were a lot of buildings, even in these very large plants people wanted to do in fabricated steel.
They felt that there is no pre engineered building company in India which is capable of doing all this design, engineering, manufacturing, delivering on time. So they wanted to go the conventional way. Let’s go for L and T or Shapurji, give them the building, give them a 500 crore order and they will do it. But over a period of time Last four, five years, as we were mentioning, we have tried to build up that faith by doing a lot of development and a lot of work also on the ground to show that yes, companies like us are capable of doing that.
So that has also led to a major shift. It is not that There were no 300, 400, 500 crore orders five years ago, but I would say that they were going more to fabricated industry, going to a contractor like Shapurji or LNT rather than a pre engineered building. So I think pre engineered building companies have really upped their game in that sense to convince these people. And Interarch has been a bigger gainer in that because we were the leaders in upping that game. And secondly, we have also shown that if it’s a 500 crore order earlier we could be one of the three players.
But gradually we have became one of the two players who would get it. And now like we saw in the last order, we got the full order. So both these things are happening. You know, orders which are changing from fabricated steel to. So you must understand that the client feels that how can a company like interrupt $500 crore unless we prove it? The normal method was give it to LNT and be done with it. All these changes have happened and I think Interarc and I don’t want to name our competitors but some of our competitors have done a great job in this.
And we’ve all together managed to change the whole face of the industry. And I think going forward even thousand crore orders will not be something rare. It’s all up to us to show it. And Interact has of course built a huge place for itself in this. And you have to show to the customer that you can engineer, design, submit everything on time, do the jobs and then like a step by step business, you do a hundred crore order next time you can name for 125, then 150. So that way we have been building up. So I think that’s what’s changed for Interarch.
Jaiveer Shekhawat
Sure, sir. I think this is very helpful. Thank you and all the best. Thank you.
operator
Thank you. We’ll take our next question from the line of Parikshit Kabra from PK Day Advisors llp. Please go ahead.
Parikshit Kabra
Hi. Thank you for the opportunity and congratulations on a great set of numbers. Thank you. I’m sorry, I was just trying to understand why has the gross margins gone up this time round? Yeah, just trying to. What is the driver for that?
Arvind Nanda
On the quarter basis or year to year on. On this quarter. See in our business we have seen for many years that every quarter is like the first quarter is normally the worst for us out of the four quarters. First, second quarters are lower, then third quarter start picking up. Fourth quarter is invariably the best for many reasons. Of course the climate is the best in those reasons. Lot of companies want to finish their projects in March. So a lot of our gross revenue also depends on the quarter that we are looking at. And the margins also go up as the sales go up in any of these quarters. Invariably our fourth quarter is better than third and third is better than first and second. Okay, so but then at an overall level also this year is much better than last year. What would be the reason for that? I think we have built up our capacity.
This is a lot of business to do with your capacity and your ability to take orders and deliver. So I think as we built up like last year, we added Andhra Pradesh plant, we upgraded the other plants. So we added a lot to our capacity to build up. And it’s a plan that we made. We would say in 20, 23, 24 when we said that in 28 we will do 2400 crore turnover. So we have to start building our capacities. And in the business environment that exists today, I don’t think the orders for us is a problem to get.
So we are trying to build our capacity and that capacity has helped us get more orders. So that is another reason that we have been able to do. And that is what we are banking on. Because if we don’t have capacity, naturally we can’t take the orders. Yeah, sorry. Sorry. So please continue. If you have to achieve 2400 crores by 27, 28, you know, we have to achieve 17, 18, 20% growth in the next two, three years to do that. So we are going for capacity order situation we do not see as a problem right now.
I understand. So actually my point was that this is not. This gross margin expansion is not because of steel price fluctuations. And this is purely an operating leverage play that as your capacity utilization is increasing, your gross margin has increased. Yeah. In fact in this year the steel prices have gone down. That’s why you see our quantity is, you know, that quantity is a little higher than our revenue. Steel prices have gone down, but steel prices don’t really affect us too much in terms of profitability in that sense. But it is definitely not because of steel prices. But this year definitely shield prices move down throughout the year. All right. All right. Thank you.
operator
Thank you. We’ll take our next question from the line. Rahul Kumar from Vikarya.
Rahul Kumar
A couple of numbers. Question. So for this quarter what led to the sharp increase in the other expense besides the volume? Led increase?
Arvind Nanda
Other expense? Mr. Bansal. Yeah. So sir, the other expenses constitute of basically our erection and job work charges, our stores and spares, patent forwarding and the growth in the other expenses almost in the ratio of you know, growth in sale. Okay, so there are no other. No, there is no extraordinary. There is no unusual thing. Basically traveling freight and forwarding stores and spares. Major chunk of that is erection, installation and job work.
Rahul Kumar
Okay. And the second question which I have is, is more on the volume side. What kind of a volume growth do we expect in FY26 and do we expect a similar seasonality which we had seen in FY25 to play out in FY26 as well?
Arvind Nanda
Yeah, we are pushing for a growth of about 17.5% in the coming year. And we have the order book for it. So we have to just execute the order book and I think we should be on track. And of course with the addition of capacity in Andhra and in North India that should give us the basis for achieving that turnover. So we are aiming for a 17.5% growth and maybe a similar in the, you know, profit up before tax and ebitda. So that’s what we are aiming for. And then hopefully 20% in the following year because then we’ll have more capacity in place. Okay. And in terms of seasonality.
operator
Rahul, I request you to join back the queue please. Thank you. We’ll take our next question from the line of Raunak Sabarwal from Philip Capital pcg. Please go ahead.
Unidentified Participant
Thank you for the opportunity sir. And congratulations on the fantastic set of numbers. Just two questions from my end. What was the volume group volumes in Q4 and FY25 as a whole, how would they compare to FY24? And second question was in under current assets line item other financial assets which is substantially increased. Can you please share some light on that? On that second part? Anil, can you do. The volume that we have done in this year is 124,000 tons compared to 109,000 tons last year. The growth of 13.4%. Right. Okay. And the other other item. Anil, can you answer? What was the second question?
Arvind Nanda
Yes sir, what was the second question? Can you please repeat?
operator
Yes. So in current assets there is one line item other financial assets which is substantially increased from 43 lakhs to around 94 crore. What is, what is that item? Other financial assets. So it’s Unbilled, unbuilder. You know we have to take care of NDAs 100, 115 is basically, you know based on completion method. So we. You book that?
Arvind Nanda
No, no. I think first is that it’s increasing from 43 lakhs to 1.49 crore. Not 94 crores. Right. Other financial assets. Other financial assets. Under current assets. Financial investments. Yeah. Under financial assets. Yeah, yeah. It’s gone up from 43 lakhs last year to 1.49 crore. Okay, I’ll just recheck that again. Yeah, yeah, yeah. So we can give the details after this call because you know readily we don’t have the micro details in my front. So we can take this immediately after this call. Thank you. So yeah, it’s not 94. Yeah, it’s not 94. I just saw. But I’ll give you the break.
operator
Thank you. We’ll take our next question from the line of Rohan Vora from Envision Capital. Please go ahead.
Rohan Vora
Hello sir. Congratulations on the good set of numbers. Thank you. I have two questions. The first question was as our contract duration keep on increasing, we go for larger contract. How do we plan to handle the raw material price volatility? Are these going to be more variable contracts or what is the plan on that? That was one. So second, I see that you know gross margin has for the full year has gone up by 200 plus basis point. However, not everything has flown down to the EBITDA margin. So other expenses have gone up as compared to the last year even as a percentage of sales. So what is the reason for that?
Arvind Nanda
Okay, so for the steel pricing, you see as you get into the larger order, of course the idea is to try and let the customer take the risk and get variable pricing. But in more and more cases the customer is not able to do it because he feels that prices are not varying too much. Today the price variation is very nominal plus minus both ways. We don’t want to get into all the hassle of checking prices and then going through audit etc. So the important thing is that in variable pricing the customer takes a risk for the steel pricing increase and decrease.
So he will also demand from you a price accordingly when you bid. If he expects you to take the risk then you have to sort of plan as to how much price do you want to build into your price to take that risk. Since we are in touch with a lot of the steel companies, we carry two months of stock. Two months of material is always on order with them. Two, three months visibility. We normally have from suppliers. So we build in a little bit of price increase into our pricing. Like I mentioned before also to in other investor calls is that raw material, steel is a raw material for us.
And like everything else we have to learn to manage it. Of course we can pass on the risk if we can, but sometimes we can’t and we have to manage it. So it’s not that shield prices going up will always be hitting us in the prices. We have to manage it. We have to make sure that we have bid for it and built in the prices. Yes, the only time that things can go very bad is like what happened after Covid and Ukraine war that prices shot up by 50, 60%. That is very rare in the steel industry.
I think it’s once in the last 15, 17 years and that time, even though we did not have variable pricing, but we went to every customer and they all agreed. So there was no question of customer does not expect that you have planned for that kind of a thing. So I think over a period of time we have learned that if we can plan for it, we bid in the price and we ask the customers to pay that price. And if we ready to take the variable pricing, if we say no, your price too high, we say okay, then you take the risk and we’ll give you a lower price.
But we have managed it reasonably well. I think in the last one year while there has been like prices went down and this started going up towards the end of the financial year. I think we have managed it fairly well. But we have stocks and we have orders with them. So four to five months material is already at a fixed price for any time. Understood? Understood, sir. And sir, on the second question, second part is. Anil, did you hear that second part on the other while the margins have gone up, why the other expenses have gone up more.
So the basically, sir, this major chunk, the share of that other expenses is erection, installation and job work charges. And there are power and fuel and spares, storage and spares and the benefit of. And of course there is a employee cost office. The other expenses overall. So the percentage increase in other expenses, if I’m not wrong is around 15, 16%. The turnover growth is around, you know, 13%. Right.
Rohan Vora
Thank you.
Arvind Nanda
Does that answer your question?
Unidentified Speaker
Yeah, so. So just. Just asking.
operator
Okay, thank you. Take our next question from the line of Nina Sarpodar from Aditya Birlamani. Please go ahead.
Unidentified Participant
Hello. Am I audible? Yeah. Yes. Yeah. Thank you for the opportunity. So I have two questions. First is on the capacity and the utilizable capacity side sir, since we had a land in I mean Gujarat, why did we. I mean what was the ideology behind buying a new parcel in Andhra itself? For the heavy structure and on the page, for page number 32 of your slide when you have given the utilizable capacity for the phase two of Andhra and Kicha expansion ideally of in your historical capacities the ratio hovers to around 83 to 85%. But for the new capacity it’s around 80%. So being at the same site I expect more synergies. Why is the ratio lower?
Arvind Nanda
Okay, see Andhra land came up to us as a very good opportunity a few months ago because it was a plot right next to our existing plot. So you know, it gave anyway we had to plan for another. See we have to build two new plants in the one starting this year and one starting next year to meet our target targeted sale of 2400 crores or that capacity that we need for that by 2728. So we had an option that either we go to totally another location but because this opportunity came up, we took it.
And that has its own advantages because it’s already where we are. We know the industry, the labor, our own management is the same. We don’t need a new management team. So we felt that it is a good opportunity to take up and buy that land. And I think we are going to start that before Gujarat because it is much easier for us to start there since we do not need a new team at all and we have to build fast. So that was the primary reason why we went in for this Andhra plant And but anyway we were looking for another location because we had to plan that where will we start the plant next year.
That had to be done because normally the land acquisition takes a little longer, longest time in the whole plant setup. So that was very critical. See the lower capacity might be because we are just. When we set up a new line we are not sure that you are right, hundred percent right that it should give us more capacity. These newer plants are a little bit more automated, should be more productive. But we have just been taking it on a little conservative side that in the initial stages it might take more time to reach the full capacity.
It’s not like an on off switch that we put it on and immediately the full installed utilizable capacity comes into play. It can take a few months or 8, 9 months for it to cross. I should cross it. What you are saying is 100% right, it should cross it. But we have been a little Conservative because it’s a new plant. Understood. So this is not like a hard cap on the utilizable capacity. No, no, just an indicative. We are always trying to increase it. Yeah, yeah. And on the second question, sir, this 1650 crores of approximately approximate order book that you have, how are the margins on this? Are these better than what you are doing currently? And do we see some margin pressure when the new capacity comes live? So in the short term, will we see some margin pressure on the operating front? See, we are trying to make the same margins.
No, we don’t try to take orders. I mean there’s a certain margin that we have in mind which we need to earn. Below that we would not go out and take the order unless it’s a totally different some situation where we have no other choice because the customer is very good customer or something. But normally we do not accept orders where we are not totally safe with the customer. Not safe about our money being coming in and not having a good margin. But we feel that as the turnover goes up, as the order books go up, you should be able to earn a better margin.
One is what you aim to make and one is that due to your operational leverage and you are better working and more productive working, but the order sizes get larger, you should be able to earn a better margin. That’s what we hope, that we will earn a better margin rather than trying to make one because the competitive environment is still there. Environment is still very competitive and therefore sometimes you can’t ask the customer to pay you more. You have to take it at a competitive price. But we are certainly in a position to earn a better margin. I would say that is our aim. Sir, about the pressure in the short.
operator
I request you to join back the queue, please.
Arvind Nanda
There’s no same question, no pressure. Okay. There’s no pressure as such at all. Yeah.
Unidentified Participant
Okay.
operator
Okay, thank you. Take a next question from the line of Asim from DAM Capital. Please go ahead.
Aasim
Yeah, hi. Thanks for the opportunity. So actually I had a more basic question around the EBITDA margin. The percentage EBITDA margin number. I think in recent calls you have talked about, you know, 10% EBITDA margin is what you will approach soon. This is the current unit economic. I just want to know what potential levers are there with you today or whether once your new plants come in to take that percentage number above the 10% mark.
Arvind Nanda
You know, I think I mentioned this earlier also in my. One of the questions that we always try three levers besides the customer, I mean, getting more Money from the customer is of course a lever which everybody wants but it’s not in our hands.
The number one is that the larger the orders that we do, we can earn more money because the kind of effort and cost involved in say 10, 10 crore orders is more than a single hundred crore order, you know, so you can earn more because you can finish it faster. The customers are better, production is better. So one is of course that the larger the orders you get, the hopefully you will earn a better EBITDA margin going forward. Second is your own internal economies that again as the orders get bigger, the internal economies also become more into play because you can again use your production cash flow.
Getting money from large customers becomes easier. So scrap, you can order material to sizes as we call cut to length so that you can make more, less wastage, etc, etc and on the third side what we are doing is for the other, our production process etc. To automatic automatize and to do better bargaining with our suppliers to have more strength. The more orders we do, the larger the ones business. We have our power to get better pricing from our supplier, whether it is steel, whether it is painting gets better. So these three things help us when we do more business.
So then basically you should be, since you are now getting larger orders and you are like technically almost the second largest player maybe in the Indian market, you should be crossing that barrier of 10% maybe the next two, three years. But it should definitely cross, right? That 10% won’t be like a cap kind of a thing. Well, you know, if you look at, I mean a bit everybody’s favorite word but if you look at our profit before tax, it is higher than the EBITDA because we have, you know, we earn money, we don’t have any debt.
True. So it is more or less pretty similar. You know, we are I think crossing the 10% if I’m not mistaken. I think EBITDA we have crossed, we have touched 9.3, we got 9.3 in March 25 and 9.8 profit before tax. So I think more relevant for us would be profit before tax. So it’s already 9.8 and in the quarter we did do about 10.8. So yes, we are aiming for it and we break the single digit barrier. Sorry, sorry. May I, may I give the right number, sir? EBITDA margins for latest quarter is 10.5 and PBD margin is 10.9.
For the Q4FY25 we have crossed, we have done better. What I said for the year it is 9.8, 9.8. And for the quarter it has already crossed 10% so we are very hopeful that it will cross. But you want to be in that ball game till we actually start achieving it because you know we have to achieve it. We are not going to get it from our customers. That is the, you know, what we are trying to do. But certainly our aim is to go much higher. Sure, got that. And just two follow ups around this bit. Only one does having to join back.
operator
The queue please as we have other participants waiting for their turn.
Aasim
This was just one question. I didn’t even ask my second question. Can I go ahead with that?
Arvind Nanda
Okay, go ahead, go ahead.
Aasim
Sorry, I’ll just be very brief. Yeah, so within the margin opportunity. So right now does erection and installation also helps you boost that margin bit? And secondly whenever you do exports, especially the US and Canadian market, we did talk about turnover being higher but does that also help move the margin lever higher?
Arvind Nanda
You know for exports the volumes are very low, margins are higher per order but the volume is very low to make an overall effect right now. But like I said it’s an area we are getting into and hopefully it will have a substantial revenue turnover in a few years come going forward.
We are trying to break through in some large orders there also but I can’t say anything about it, you know, in that sense and sorry, your first part was erection and installation is normally a pass through. We just earn enough to cover our costs, internal cost and outsourcing. We try to make our margin on the totality of the project rather than on each bit. Because the customer gives us the order on a full building he doesn’t give us a breakup, you know that this is what I will do. So we try to make an overall margin but do our costing.
When we do our costing erection is more or less an erection plus x percentage to cover our internal cost as a cost. Got it, got it. Thank you. Thank you very much for answering. Thank you.
operator
Thank you. Take our next question from the line of Nikhil Purohit from Fiden Asset Management. Please go ahead.
Unidentified Participant
Hi, thanks for taking my question. Congrats on a great set of numbers. My first question is sir, what will the FY25 capex amount and what is the guidance for the FY26 capex?
Arvind Nanda
See I think we have spent, if I am not mistaken about 65 crores on capex in 20 in this financial year and in the coming year. I think we are aiming if you know because it will overlap the year out of the 65 crore some was work in progress. Some will be spent this year to finish Andhara phase two. And the Kitcha, the latest line, the new plant which will straggle the financial year, but will probably.
We will start in July, August and it should go up to next July and August will be about another 80 crores we are anticipating. So it could be mostly in this year, some in the next year. But that is our plan to spend another 80 crores besides the 70, 80 crores we have spent. Okay, so FY26 will be around 80 crores. Yeah. Because some will struggle from last year coming forward and some will come from. Yeah. So you know, if you struggle the year. But plan is this. Each one of our new plants cost us approximately 70 to 80 crores in capital cost.
Got it. And just one, another question. So we’ve mentioned doubling of revenue by FY28 from the base of FY24. 23. 24. Yeah, 24 to 28. So based on that, the revenue guidance comes to around 2,600 crores. So are we revising it downwards or so? No, we were saying that approximately, but we were mentioning a figure of 24 to 2500 because steel prices can also change. We said that is our aim. So we are aiming for about 24 to 2500. Okay. And I think we are building up capacity for that to achieve it. We should be able to achieve 24 to 2500 crores by 2728.
Got it. Okay. And just one last bookkeeping question. What were the bank guarantee suggests for this quarter? Bank guarantee? Bank guarantee charges for a quarter. 4. FY20 5. Anil. Do you have any separate. So the weighted average bank guarantees which we take is 0.7% per annum. 0.7% per annum. These are the charges which we pay to the banks. Weighted average, weighted average.
Aasim
Okay, got it. Thank you. Those are my questions. Thank you.
operator
Thank you. Ladies and gentlemen. Due to time constraints, we’ll take that as the last question for today. I now hand over the call to management for closing comments. Over to you, sir.
Arvind Nanda
Thank you very much, everybody. Thank you for joining. And if anybody has any more questions, you can always reach out to us. I think most of you know us or our CFO or anil. Please reach out to us if we can help you in any other way. Give you more questions. Answers. For more questions, clarifications, post you to any of our plants to visit or sites. Please call to SGA or to Ambit and we’ll be very happy to host you and give CLARIFICATIONS for any queries that you may have left. Still, thank you very much for joining and thank you for all your good wishes and congratulations. We look forward to future good investor calls. Thank you very much.
Manish Garg
Thank you, everyone.
Jaiveer Shekhawat
Thank you. Sga.
operator
Thank you, sir. On behalf of Ambit Capital Private Limited, that concludes this conference. Thank you for joining us. And you may now disconnect your lines.
Arvind Nanda
Thank you.