Jash Engineering Limited (NSE: JASH) Q1 2026 Earnings Call dated Aug. 08, 2025
Corporate Participants:
Unidentified Speaker
Siddesh Chawan — Head of Investor Relations
Pratik Patel — Chairman and Managing Director
Dharmendra Jain — Chief Financial Officer
Analysts:
Unidentified Participant
Suruchi Parmar — Analyst
Navani Naredi — Analyst
Balasubramanian A — Analyst
Kunal Mehta — Analyst
Akash Shah — Analyst
Presentation:
Siddesh Chawan — Head of Investor Relations
Good morning everyone. I am Siddhesh Chawan from Ernst and Young Investor Relations and I would like to welcome you to the Jash Engineering Q1FY26 earnings conference call. I’d like to indicate that all participant lines will be in a listen only mode and there will be an opportunity to ask questions after the opening remarks conclude. Should you need to ask a question, please select the Raise hand option. Under the Reaction tab of the Zoom application, we will call out your name and then request you to unmute yourself to ask the question. While asking, please begin with your name and your organization.
Please note that this conference is being recorded. The recording will be made available on the website within a day and the transcript of the call shall be made available subsequently to take us through the results and answer your questions. Today we have the top management of Just Engineering Ltd. Represented by Mr. Pratik Patel, Chairman and Managing Director and Mr. Dharmendra Jain, Chief Financial Officer. Before we begin, I want to remind everyone about the safe harbor related to today’s earnings call. Comments made during the call may contain forward looking statements that may involve known or unknown risk, uncertainties and other factors.
It must be viewed in conjunction with our business risks that could cause future result, performance or achievements to differ significantly from what is expressed or implied by such forward looking statements. After the end of this call, if you need any further information or clarification, please do get in touch with me. With that said, I will now hand over the call to Mr. Pratik Patel. Over to you Sir Foreign.
Pratik Patel — Chairman and Managing Director
And thank you for sparing your valuable time and attending this investor call. First I will like to give inform in brief what has happened in this quarter. As those who have been able to go through the results posted on the NSE and bse you will see that there has the results were quite subdued in the first quarter but this was also as a result of our decision to defer some deliveries to us because of uncertainty relating to tariff and also certain deliveries which we could not take place. So mostly it was the standalone of Just Engineering which has contributed to this situation.
At Rodney, Hunt and Mar and Waterfront and other subsidiaries we have increased our revenue. However in Rodney and because of this tariff situation plus new intake of people the losses have little bit increased over last year by hundred thousand dollars. When we come to consolidate order book our order book is still quite strong. We have 875 crore and our pipeline also is quite strong. We are entering into new markets like Vietnam, Japan, Israel and and we are now trying for South Africa as well. So we expect the healthy growth to continue since we are expanding the market and the demand also is quite strong from the existing markets where we are.
We have recently commissioned our new facility in Shat from where we are having today the investor call. And with this commissioned we expect improvement in our output from Chennai facility. And also the same facility will be using for Westech, a company which we are acquiring 90% of that shares of the company we are acquiring the due diligence at is at an advanced level. I would say we hope to complete everything by next week and include this company as our subsidiary by next month. However, the biggest problem today we are facing is the U S tariff uncertainty.
Earlier the tariff applicable on us was 25% plus 25% on stainless steel and as of two days back this has become 50% already. So this puts a lot of pressure on the orders which we have already taken from America. We are talking to our clients. In some of the cases they have agreed to bar partly compensators for the increased tariff. But that is not true for all the cases. However, we are trying to mitigate that by building a new plant in Houston. Earlier we were going to build the office, but when I was in US in June and when this was announced 25% additional on steel and stainless steel, we decided to defer the plan to build the office and instead we are now going to first build the plant in Houston.
And this plant was anyway supposed to be built up in 28, but now it would be built up in 26. At the same time we are also increasing our capacity in Orange because in time to come we have to increase our output from U S plant in the revenue of Rodney Hunt from the current 35 to 30% to around 65 to 70% in the coming years. By doing these two expansion and by the acquisitions which we are going to do of Western, another company in UK for which we are nearly. The deal is done and the process of due diligence will start within August and I would like to wind up that then in September.
So with these two acquisition and the expansion that we’ll do in America, we are sure to mitigate all the risk associated with this tariff situation over the next few years. With that I would like to go on to the financials. As you can see in Q1 consolidated, our revenue has increased from 116 to 133. Our gross profit has also marginally increased. However as a percentage it has come down little bit 1%. Our EBITDA has gone down by 4% and only. And the profit before tax. Last year we had minor losses. This year this has increased from 0.4 crore to 6 crore.
And profit after tax also before tax and after tax both has gone down compared to last year. Next, when you see the standalone. As I was explaining earlier, one of the biggest setback has been the standalone revenue of Just engineering. So last year we had done 92 crore as against that we have done 82 crore this year. The reason as I said was there were two reasons for it. One was we could not dispatch material for Rodney and due to uncertainty on the applicable tariff. And another was the delivery. Some of the deliveries in India also could not happen.
The production was done. It could not happen. I would like to state here that 28 crore rupees worth of material was dispatched. But because of because of U. S gap practice we could not take them in our revenue in Just engineering in Shipad revenue has increased. In Rodney Hunt revenue has increased. In waterfront also revenue is increased. However the profit after tax has reduced in Just engineering Because of the reduced revenue has in Shipa it is nearly is not a big reduction. But then Rodney Hunt last year we had 0.8 million loss in the first quarter.
And in this year it is 0.9 million $. This is mostly because we are now rebuilding Rodney Hunt to take care of future increased production requirements. So we are adding people in Rodney Hunt at production level and at other levels. So that once all the new expansion is done, we have a team which can take care of all the issues related to production. In waterfront we have had loss of 0.4 crop. I believe this is temporary in nature. And Waterfront also would have been profit this year. So overall I would like to state that we still maintain our projections given at the start of the year.
That is 860 crore and with profitability anywhere between 80 crore to 110 crore. Depending upon what finally turns out on the tariff. If tariff continue to be 50% then definitely will take a hit of 1 to 2 million dollars. Resulting into somewhat lower forecast on profit after tax. However, we have to see if we are able to as a country able to arrange a deal with America or not. So my response on the bet would be more surer one or two quarter down the line when we know clearly what is going to happen on the tariff front next.
This is a consolidated income statement for Q1. You can see there is not a very very big difference in comparison to Q1 of 25. The revenue increase at just would have compensated for all the shortfall which we are seeing now and we hope that in quarter two and quarter three things will improve at standalone basis adjust so that we would be able to show the improved performance. Anyway, I would like to reiterate that the first quarter always is challenging for us. If you see historically and so it is not a big cause of concern as of now.
Next next the revenue composition you can see 69% of our business is coming from water control gates, 14 from screening, 10% from VAL and 7% from hydropower and various other groups. The geographical contribution is quite spread out Now India is 42%. USA is 37%. Rest of the world I would say is close to 2021%. So this is a very ideal scenario for us where the geographical contribution is quite diverse worldwide. Our consolidated order book as on 1st August is 875 crore of which outside India we have 574 crore and within India we have 301 crore.
As I told before we are reviving Mahamashinan Bow and and in machine and bow we have already got 24 crore order book. Roder book is also strong. However we are not going presently aggressively in taking orders in Rohan because of this situation of tariff and until we build up our additional facility in America we have to be cautious if the tariff situation is not solved on just engineering standalone we have quite a good order book position with 500 crore orders in hand. We expect in all these companies to achieve the forecasted results before. In case of Waterfront we have order booking of 9 crore.
We have aggressively started marketing in UK. We are building up our team by acquisition of one more company. We hope to become a pan UK company and in three to four years our target is to become the biggest L gate manufacturer in uk. As I said our pipeline of new orders is quite strong. We have already negotiated orders for 28 crore and you have around 56 crores worth of order under negotiation. We have a quite strong conversion ratio when of the orders which we negotiate and so I believe that our order booking would remain within the range of 5060 crores to 100 crores every month.
Foreign. If you remember at the beginning of the year I had said that we are looking for revenue of 860 crore. Combined revenue of 860 crore. I am quite confident of achieving this and also going a little bit above it. However as I said all our well laid plants presently are in shambles because of USA. So we hope some clarity is there on USA front. However even if there is no clarity on USA the revenue would be in excess of 860 crore this year only it may result into some variation in profit projection. But I am still confident on view of the profitable orders that we have taken already that we would be improving upon the profit which we had declared last year.
As I inform you, our new plant in Chennai is Now operative. From 1st of August commercial production has started. We have got all the necessary permissions and with this now we are in a position to increase our output from of shipwreck process engineering division from Chennai. As I informed before also Westec once we acquire Vestec has a revenue of 55 crore and SIPA had a revenue of 44 crore. So the process equipment division would have now a revenue total combined revenue of around 100 crore. And with this plant commission, both the company, both the divisions, industrial as well as municipal production can be done in house resulting into lot of saving.
So commissioning of this plant would help and acquisition would ensure that. Acquisition of Westec would ensure that the plant gets loaded up with more work sooner than later. Next, regarding Westec, this was a subsidiary of Westech USA. Westec USA had 80% stake in Westec India and remaining 20% was owned by the employees. We are now taking 80 100% of the Westech stake from USA and 10% from the employees. And the remaining 10% we will take from the employees after three years at a pre agreed valuation. What Westec brings to us is entry into high growth industrial segments which is in mining, metals and paper industries where we we were not that dominant or we were not existing earlier.
The biggest advantage Westec brings is nearly the same type of equipment but in lighter duty. We are making for municipal. With the industrial portfolio coming in, Westec can also on its own grow aggressively because they get a better product mix. And SRIPAD also benefits because they get an enhanced engineering team of Westec to support them. The combined turnover of this division, Westec and Shipbark would be around 100 crores as per the last year financials. We hope that with Westec being merged to India we would be able to take the process equipment division from the current 100 crore to 200 crore in three years time.
One of the biggest advantage of acquisition of Wester is the season team. These are all around 26 out of 26 people. 24 people are ex Dora Oliver. They are very experienced. They are the people who were the key thing in Doradi. But today that experienced team has come to us and in today’s time I always claim that manpower is the biggest problem. But with getting such a team and that to an a profitable company with a profitable company, we are sure that we would be able to enhance the results, financial results and performance result of the complete division in time to come.
It also helps us in our Just Invent product portfolio because the the market for industrial for Just Invent is quite high and Westec brings their muscle of the industrial business to us for Just Invent. Overall I would say Westec would it would be a very nice addition and would will help us as a group. It will help us individually in many of our subsidiaries to grow faster with their product range. With this I would like to conclude my presentation and I would like to take any questions you have. Thank you.
Questions and Answers:
Siddesh Chawan
Thank you sir. We’ll now begin the question and answer session. Gentle reminder to all the participants to ask a question please select the raise hand option under the reaction tab of Zoom application. We will now wait for a moment until the question queue assembles. We will take a first question from Suruchi Parmath. Please go ahead.
Suruchi Parmar
Yeah hello, Good morning sir, I am Suruju Karma from NX Wealth Management. Just wanted to ask question like in last con call I remember you have told that in the Orange plant you have some labor problems. So while you are planning to increase your capacity in Rodney Hunt and also in Hoston, you are planning for the plant setup. So will this be a problem labor shortage and how you are going to deal with it.
Pratik Patel
So Orange labor shortage is there and Orange key management is a problem. These are the two problems in Orange. However there is BABA act in America and BABA act in America mandates that for certain type of projects by 2029, 90% of value addition has to be done in America. So I would have to invest in America now where to invest? We are investing in Houston because we are facing some problems of availability of people in Orange. So we are investing in Houston. However, Houston facility will not be able to take care of all the production that we are planning in America.
So Orange also will coexist. Now because we are facing problem, I cannot say we will do nothing in Orange. We have to grow Orange also get a better team of people. Maybe hope more and more people will be willing to work in America in time to come in manufacturing. And with that positive note we have to go ahead. I have got a big infrastructure in Orange. I cannot keep it aside and plan a similar infrastructure in Houston. So I do believe we have a chance to get our act right in Orange with competent manpower. We have put a new operations head in America who has been with us for a few months and I am quite confident he has the capability to turn around our situation in orange.
Suruchi Parmar
Sir, you have said in your opening remarks that if the same situation of parrot continues then you will get a hit of 1 to 2 crores in pad. So is. Is it because like your dollar pardon.
Pratik Patel
1 to 2 million dollars. 8 to 15 crore.
Suruchi Parmar
Okay. And so. So this is because of like while your plant is still under construction in hostel and after the hosting facility and your wrap up in your other Rodney hunt and orange it will improve the situation or still you will face some such problems if the same tariff structure continues.
Pratik Patel
So. So please understand. Tariff affects only the orders which we have already taken and which we are going to make in India. Tariff does not affect the new orders. The new orders we are already increasing whatever is the tariff adding to it for India, sourcing and coating. So the available order in hand only are going to get affected. And out of that orders which are going to be produced in India. Not the whole Rohan order. Only that part of orders which are going to be produced in India that is going to be subjected to the increased tariff.
Suruchi Parmar
Okay so and sir, what about like the figure of new orders you got in the first quarter.
Dharmendra Jain
But we. We have already provided the for the ter. Whatever ending time either 25%. Later on it’s 50%. So new order whatever we book. We have estimated the period in there and measured of the order maybe from the
Dharmendra Jain
last year.
Pratik Patel
Last year.
Suruchi Parmar
Okay. Thank you sir. Thank you.
Siddesh Chawan
Thank you. We request all participants to kindly limit your question to two per participant. Next question is from Dheeraj. Please unmute yourself and go ahead.
Unidentified Participant
Thank you for taking my question, sir. Sir, can you please throw some light on this cross margins. However we are in line to achieve the top line guidance that we are given. But how going forward how can we estimate the gross margin to shape and what is the reason behind? There is a slight dip in gross margins last quarter two and this quarter two. So going ahead, how can we take these margins and what is impacting these margins?
Pratik Patel
The difference in margin is only 1%. If I understand well between earlier quarters and now last quarter we don’t see irrespective of where you make in India or America, there will not be a big hit on the gross margin. When we are producing in America we are considering American produced cost basis. So raw materials from America, labor cost of America, overheads etc. Of America. Etc. So and on that we will add our margins. So the dynamics does not change whether you produce in America or whether you produce in India. Dynamics Visa means our competitors In America are favorable when we produce in America.
Because one. We have a team of 25 to 30 engineers in India. Supporting estimation, project management and design engineering. So visa vis our competitor in America. These 30 people team engineers team is at a comparatively low cost. And so we. That enhances our competitiveness. Also enhances our ability to take more margin compared to them. Another thing is with the pressure on producing in America. They are all in the same boat. So if they were getting some material from Mexico or China now they cannot. And so everyone would be increasing their cost to face the American increased cost.
And so that that should not affect our margin portfolio.
Unidentified Participant
Okay, sir. Sir, can you tell me how much revenue has been booked from Kansas project this quarter?
Pratik Patel
From Cancer’s project? I cannot give a breakup like that. But around I would say out of the routine revenue at least 15, 20% must be from Kansas project.
Unidentified Participant
Okay.
Dharmendra Jain
Yeah. It was only 45k in this quarter. Because of Kensa’s product. Our 45k is higher cost.
Pratik Patel
45,000.
Unidentified Participant
Okay, got it. And just one last question then I’ll fall back in the queue. In. In this quarter the equipment, screening equipment revenue has decreased a little bit. Compared y in our revenue
Pratik Patel
to this question. We cannot compare quarter to quarter output of different products. We are in custom build. We are not in mass production. So sometimes certain products are required more. Sometimes certain products are required less. So annually or quarterly. You cannot compare different. Different product output project is measured. But. But still it is not possible. Sometimes the gate may be more. Sometimes the screen may be more. Sometime maybe more. It all depends upon the project. Which type of projects we take and which type of projects are coming out to tender.
Unidentified Participant
Okay. So is this mix between screening equipment and gates is also affecting the gross level?
Pratik Patel
No.
Unidentified Participant
Can I assume?
Pratik Patel
No.
Unidentified Participant
Okay. Okay. Sorry. Yeah, I’ll fall back in the.
Siddesh Chawan
Thank you. Dheeraj. The next question is from Mr. Navani. Please unmute yourself and go ahead.
Navani Naredi
Hello. Yes, Hi. This is Navni Naridi from Nariti Investment Private Limited. And I have got two three questions. First of all I would want to know how is the performance of disk filters in this Q1FY26. And how much it has contributed to the overall revenue.
Pratik Patel
So let me answer first the dis filter issue. No. This filter was delivered in Q1. We have got order for six seven dish filters. They are all at approval stages. And this filters orders would be executed in Q2 Q3.
Navani Naredi
All right. And what is the reason behind the decline in domestic demand
Pratik Patel
of which item?
Navani Naredi
Like the results I could See like there is a decline in the domestic offshift.
Pratik Patel
No, no. There is no decline in domestic demand. On. On the end of the quarter we have to deliver material. Now if the client is not opening an LC we generally do not deliver the material. Okay. We also delivered 28 crores worth of material in the quarter. But they have not been taken in revenue because they did not reach the site on the last day of the quarter. So. So if you see overall order booking for domestic business has increased. So the demand scenario you can annualize basis you can say but border basis. The reason is sometime also if the payment have not come, we don’t deliver the next lot of material.
Dharmendra Jain
Yeah. Opening and closing reversal net effect is 13 crore approx. Because last year closing reversal is around 18 crore. Whereas this year our closing reversal is 28 crore. So 9 crore is the closing reversal effect and opening reversal also reversal. Because in March, last quarter of March Its reversal is of 3539 cr. Where is this year 35 cr. So. Overall 13 crore effect is reversal.
Navani Naredi
So for the
Dharmendra Jain
consider that way but actual effect is there.
Navani Naredi
Okay. So like for the whole year FY26 the demand will not demand. I would say the guidance for SH SH will continue to stay strong. Can I assume that
Pratik Patel
all the four. Subsidiaries the guidance said already the guidance would be there. We are expecting to touch 860 plus something. 860 was I had informed then to it is a conservative figure. So we are still maintaining the guidance. The only as I said the only problem that may occur is not on the top line. It may occur little bit on the bottom line because of this revenue of this tariff situation. We don’t know every day Mr. Trump changes his statement. So how can I as a manufacturer plan for all those things. So until there is some stability on the Terry front I would not be in a position to say how hard we will be hit by the tariff or and what it would result into in our pet.
That’s why I gave a guidance that with 860 crore revenue our pet profile would be within 80 to 110 crore range depending upon finally what happens at the tariff level.
Navani Naredi
Got it sir. And my last
Siddesh Chawan
I would like to request a kid back in the queue.
Navani Naredi
All right. Thank you so much.
Pratik Patel
Thank you.
Siddesh Chawan
We’ll take a next question from Sushil Dutt. Please unmute yourself and go ahead.
Unidentified Participant
Thank you so much for the opportunity. Sir, I have a couple of question. First when we should expect the US plant to start full fledged production
Pratik Patel
within 26. So in June we Took the decision to defer the office and build the plant in in July. I gave the drawings in August. First week we have got the initial reports from the city about what is possible, what is not. It will remodify our plans and submit in August and I expect to get approvals by November. December construction would start. Houston facility construction is expected to start. We already placed the order by the way. So the construction is expected to start by January, February and we have been told nine months are required to commission the plant.
So definitely even if there is a delay definitely within 2026. Okay, thank you sir. And second, how much CapEx for this year and how much we are paying for the acquisition? Acquisition? Both the acquisition put together we will be spending around 40 crore and any capex amount guidance sir, how much we are spending this year? Close to 40 crore. Okay, and the last question sir, is there any legacy orders are still there in our order book which are margin dilute? If I’m not wrong, last quarter it was legacy orders are there but legacy orders with profit are there.
Then you and me both should not be worried. Legacy order at loss are there Then both should be worried. So Cancer’s order is still there in America and by the time I completed it would be maybe January, February. So Kansas order only is a legacy order which has some negative outlook for us.
Unidentified Participant
Thank you so much for the opportunity and best of luck.
Siddesh Chawan
Thank you. We’ll take the next question from Parishit Kabra. Please go ahead.
Unidentified Participant
Hi, thank you so much for the opportunity. I wanted to double click on the demand side again. Sir, I know you think that the demand has not changed but if we look at the order book, even though the order book has been rising at a broad level, the speed at which it’s rising is falling consistently. So we had peaked at 28% order book growth then went to 13%, 10%, 3% and this time it’s minus 8%. And what is also another trend is that in the export order book we have not actually shown any major growth over the last almost five quarters.
And. The domestic order book has its own trend. But let me at least begin with an overall order book and the export order book. Can you please explain what is happening in the demand scenario here? That why are we seeing the Same kind of 15 20% order book growth that we were seeing earlier?
Pratik Patel
See, one of the biggest reason is in America now my order book in America as of today is 40 million $. However we do not have capacity to produce more than that presently in America. So I can take Orders. But it would be like putting into a problem.
Because when you cannot deliver the older orders and you keep on taking new orders, you will face problem. That is why we are building up capacities so that we can produce in America. The new orders in America are more and more Baba compliant. Which means you have to produce in America. Now if my capacities are constrained, I will prefer not to take too many orders so that I don’t displace the customer. But you can ask why did we not build up the capacity before? We did not build up because we were not so sure about high tariffs.
If the tariffs are low, non Baba jobs we can still do in India. But with high tariffs even non Baba jobs we will have to do in America. So one of the major reason has been low low intake of orders in America. Because of that. So we have not grown in the same rate in America order booking wise as we were growing before.
Unidentified Participant
Product sir. Perfect. Makes sense. And in terms of domestic the last two quarters there has been a slower growth in order books. So is there any change in the demand scenario within India itself? Or is this just a matter of, you know, quarter to quarter trends?
Pratik Patel
It is also quarter to quarter trend.
See understand last year MCGM announced 21,000 cr worth of orders for wastewater treatment plant. So all those orders we also got was in the last year. Now these all orders, by the time they come in for mcgm, I think by next two, three months all those orders would have come in. So obviously thereafter there will be no orders from MCGM and then other projects will come and the order. So our order accumulation also sometimes could be lumpy. It will not be like a commercial industry where every month a fixed intake of order will be there and they will grow every year.
So I would say we have to look at two things. When we see at order book as a company I look at two things. One, what is my capacity? Can I deliver these orders within a year? Because if I take orders for more than a year delivery I open myself to. Because it is a fixed cost order, I open myself to some risk. And the global uncertainty ensures that your well led plans can go wrong. So if my capacity to produce is of say 800 crore, I should not take orders of more than 1,000 crore.
That is how we plan. And in that case what we try to do is if we cannot take more order, we try to take more profitable order so that our bottom line improves. That is how we consider our order intake. Not year on year or quarter on quarter.
Unidentified Participant
Got it. So perfect sir. Thank you. And lastly
Siddesh Chawan
I would request to get back in the queue.
Unidentified Participant
All right,
Siddesh Chawan
yeah, thank you. We’ll take a next question from B from Bala from Arian Capital. Please go ahead.
Balasubramanian A
Good morning sir. Thank you so much for the opportunities. Sir, my first question regarding this Waterfront UK business I think post acquisitions we are lacking on that revenue target side. Just want to understand what kind of specific onboarding challenges are there for delaying and when we can expect the break even. And, and how does this UK acquisition pipeline align with our diversification goals
Pratik Patel
as. Far as Waterfront is considered. When we acquired it the team was only 910 people. Presently I think it is close to 1819 people. We have acquired one more shared. We have put in production facility in place. We are now recruiting people to start production. Production has been started but it’s a very low key production but we are starting to recruit people to increase the production output in UK. Now why we are producing in UK? The reason we are producing in UK is certain jobs need delivery in 3, 4 months. This we cannot cater to from India, same in America, same in uk.
Certain jobs have to be produced in UK because of the delivery issues. So now to get everything in place in a manufacturing industry is not easy. Manpower, machinery, place, etc. Etc. We are I quite confident this year we would be able to break even. It will not continue like Rodney and three or four years I am quite confident this year we will be able to break even and with our current new acquisition we get a new product also and we are going to the heartland of UK in the Midlands which will bring us proximity to customers as well as a service center in the heart of England.
So with those developments I am quite confident that the the merged company Waterfront and the new company in in time to come would be giving the same type of top line growth as well as bottom line growth in the coming years.
Siddesh Chawan
Hello.
Balasubramanian A
Hello. I’m audible sir.
Pratik Patel
Yes.
Balasubramanian A
Yes sir. So my second question West Tech India acquisition I think like post acquisition like we are aims to enter into industrial process equipment especially into mining, metals and paper side and what kind of synergies we can expect with super municipal focus and and how we will integrate Vistech team technologies without margin dilutions. And secondly if you could throw some light on what kind of revenue and EBITDA and kind of margins and what what kind of cost in terms of purchase and any other we are doing any subcontracting and thirdly what kind of utilization levels we can expect.
Pratik Patel
Remember. So let me what I remember let me answer to you Westec. If someone had asked before Westech as well as the company which you are going to buy. I would not be able to reveal individual details because I have still not done the due diligence. But total sum is not going to be more than 40 crores. They did revenue of 55 crore. They had profitability of 4 crore. So it was a profitable company. So this answers the financial aspect of a step coming to synergy between Shipad and Wested. Already I said both the companies did not have manufacturing facility.
Now they have manufacturing facility. With the manufacturing facility now manufacturing facility, we have ensured that there is enough workload that the manufacturing facility can be run profitably and also lead to future growth for both the companies.
Balasubramanian A
Okay sir, thank you.
Siddesh Chawan
Thank you. We will take a next question from Samarata. Please unmute yourself and go ahead.
Unidentified Participant
Hi, good morning Pratik sir, first of all congratulations on a very resilient performance and laying down the expectations for the year. Sir, last con call I think you alluded to Saudi as a big opportunity for us. And I think you said that we were exploring something in Ras Al Khema or building a plant over there. So anything happening on that front?
Pratik Patel
Sir, as we speak Sanjay Sharma, our vice president sales and marketing is in Saudi Arabia having meetings on the same issue. So until we have all the data then only we will be able to tell what we are going to do. But yes, we are still moving in the same direction.
Unidentified Participant
Sure sir. So one thing more. What is the current capacity that we are having right now? I mean leaving aside us, we would be doing expansion also. So is it fair to assume that we have production capacity of more than 1000 crores? And with the US expansion which will take place in the meantime, maybe by the middle of next year, what is the kind of capacity we would have built up?
Pratik Patel
The current capacity with all the expansions which we are doing currently we would be around 1000 crore. Yes, with. With the expansion in US anywhere between 1300-1500 crore. It all depends upon how many shifts we are willing to go for.
Unidentified Participant
Understood? Understood.
Pratik Patel
If we increase the shift even in ship as we have just started the production, if we are able to cope up and if we are able to do three shift in ship or super production will also increase multiple times. So depending up. But, but, but sometime I may have shifts but if the client don’t take delivery, I am not able to produce because these are heavy equipments. So I would say conservatively 1000 crore and 1500 crore. Currently 1000 crore as with all the expansion, 1500 crore.
Unidentified Participant
Got it sir. And sir, this capex would be through internal accrual only. Or we would be needing funds for additional capacity. Whatever maintenance capex and expansion capex we have.
Pratik Patel
So America we will not need to raise a lot of funds. We may plan for six to six and a half million dollar capex in America. Out of which we have already raised 4 million one year back.
Unidentified Participant
Yes,
Pratik Patel
right. So in America the difference may be 2 million dollar approximately for which the American banks are willing to give us loans. The capex would be only 36 crore. 36 to 40 crore. And further we need around 40 crore for acquisition. So I think we may go for minor debt. It would be minor. The company only has 10 crore debt as of now. So maybe another 15, 20 crore that we may take. But that is depending upon what happens with the tariff situation in America. If everything stabilized, we believe that the internal accruals will be strong Then we may reduce the extent of debt.
Unidentified Participant
Got it? Thank you Pratik sir. And just one final question. If I can squeeze in, I know it’s a difficult estimate to make but by the year end is there any order book size? We have in our mind that this is something at a baseline level. We should be having keeping in mind uncertainties and the new acquisition, you know, tapping the market. So any assumption.
Pratik Patel
Let me tell you one thing. If you have heard before, if you heard what I answered to someone who was in the queue before you was if my production capacity is 800 crore I will not like to take orders worth more than 1000 crore. Okay. Which means around 14, 15, 13. 14 months. 15 months order book.
Unidentified Participant
Correct sir.
Pratik Patel
So if this year we do 900 and next year 8. Sorry 860 and next year we are planning 1150. So we should have 1100 crore order book by end of 3-31-2026.
Unidentified Participant
Okay sir, I think that’s very reassuring. Thank you sir. I think I was looking at that kind of a number only. Whether we are targeting a pessimist view or. Yeah.
Pratik Patel
10 months to 12 month order book at the end of the year. And if it is little bit more we can go to 13 or 14 but not more than that.
Unidentified Participant
Got it sir. Got it sir. Thank you Pratik sir. And all the best for the coming months. Thank you.
Siddesh Chawan
Thank you. We’ll take the next question. Kunal from Sunidi, please unmute yourself and go ahead.
Kunal Mehta
Hi sir, I just have one question. So let’s see if the tariff situation is you know, the same as 50%. So the new orders that would be we be getting from us Will that be on the same margins? How is the, you know, the negotiation over there? I mean and how is the competitive landscape now?
Pratik Patel
So Kunal, what has happened in America is as soon as the tariff come in the domestic industry from raw material supplier to all manufacturers including Rodney and increase their price. So for the new orders, tariff is not an issue. Tariff is an issue for orders which we have already taken. And these are fixed price order. Some places we are negotiating with the client and they are good enough to accept our people. Clear. But some places they say no. So that is where we’ll get a hit. We have not changed any rising policy because of. We have the.
In the estimation is added in the estimation.
Kunal Mehta
Okay. So that level of margins we will still be able to confidently make even if the T. For the new orders. For the new orders. Yeah.
Pratik Patel
Understand not ro. Everyone everywhere us has increased.
Kunal Mehta
Okay. Okay. And sir, now in the Houston plant there will be a proper foundry unit. There’ll be a proper machine shop, everything.
Pratik Patel
No foundry in America. The we have a big pressure to start the foundry, but we are not going to do it.
Kunal Mehta
So any reason why? Because if we have to make in.
Pratik Patel
Our campus which we have closed down.
Kunal Mehta
Okay, sir. So there will only be like machine shop and assembly and testing unit. Right? Fabrication.
Pratik Patel
Yeah.
Kunal Mehta
Okay, sir. Thank you.
Siddesh Chawan
Thank you. We’ll take the next question from. Please go ahead.
Unidentified Participant
Hi. Thank you for the opportunity again. I was just thinking about what you said, sir, from my earlier question about how we are capacity constraint in the US and hence the order book is not rising in the expense sports market. And you know, our earlier strategy was that you would obviously supplement our US capacity using our Indian capacity. And in the last quarter or the last few weeks the tariff situation has got deteriorated so badly. So that that’s creating a question mark. But why would. Why would that have impacted the last four, five quarters? I’m just trying to wrap my head around that.
Pratik Patel
Please understand. Did you see the growth of Rodney Hunt?
Unidentified Participant
No.
Pratik Patel
Grow like this forever. And the manufacturing capacities don’t grow like that. So some a day will come when you have to slow down. So from 18 we went to 26. From 26 we went to 36. But from 36 I am not growing to 45. We now plan at 40.
Unidentified Participant
Okay.
Pratik Patel
We cannot have such rep. In three years we doubled our turnover. Consolidated at turnover we doubled in three years. But do you think we can have the same scorching space forever in a manufacturing industry? Very difficult.
I need to build up the teams first. Otherwise you’ll make huge mistakes. So we have started building up the teams. That is why our manpower cost has gone up little bit. So now we are building team for 1000 crore, 1100 crore revenue. So we’ll first build up the team, then take the orders and then we will go ahead. Got it sir. So, so any sense of when you think you’ll be, you know, in a position to expand your US order intake because your capacity will be ready? It is a relation to tariff. If the tariff is high, we have to expand U.
S and not take orders. If tariff is low, we can still take orders from India or deliver from India. So it is a fluid situation. As of now, considering that tariff may continue, I would say we would not like to grow aggressively in America because all those orders would have uncertainty. We took some orders with 25% tariff. Now as of two days back it has 25 has gone to 50%. So we feel foolish to take those orders now. So we have to be certain about what is going to be the situation and then take the call.
I cannot wanna investor call. I cannot tell what we are planning and when we are going to do that. Unfortunately because it is not in my hand. It is in the end of Mr. Trump
Dharmendra Jain
took around six months to one year. So it will depend on the situation after the expansion.
Unidentified Participant
Okay, thank you,
Siddesh Chawan
thank you. We’ll take the next question from. Please go ahead.
Unidentified Participant
So thank you for the opportunity and my apologies for harping on gross margins again. But I just wanted to understand. We do have some Kansas orders left and some low margin and loss making orders to go through. Right. So do we expect to go back to our gross margins of 55 to 60% going forward or will that be difficult for you to comment? That’s my first question.
Pratik Patel
It would be difficult not because of the Kansas project, but because of tariff project. More than 50% already has been done and it has been factored into our projections. Tariff was not factored into our projections.
Unidentified Participant
Okay, understood. And so we also spoke about some large orders in Southeast Asia, Hong Kong a few quarters ago. So has there been some traction over there? That would be it. Thanks.
Pratik Patel
Yeah, some orders have already come in and other order we are expecting within next few months. Overall, please let us understand one thing. It is not only India that is affected. Every country is in turmoil everywhere. Order, order placements and everything has slowed down. In fact, because of tariff we lost a large order which was nearly signed. We lost it because people were so much afraid to place an order because of the high tariff being broadcasted by Mr. Trump on his social Media. So. So until would be in a position to go ahead with its plans.
I was in Japan, I was in Vietnam. Everywhere it is a mess. No one knows how to go ahead.
Unidentified Participant
Fair enough, sir. Thank you.
Siddesh Chawan
Thank you. We’ll take the next question from Ravi Shankararan. Please go ahead. Ravi Shankaran, please unmute yourself. There is some technical issue. It says. Any. Any. Any other wishes to ask a question?
Unidentified Participant
Am I audible? Yes.
Siddesh Chawan
Just go ahead.
Unidentified Participant
Yeah, I am audible.
Pratik Patel
Yes, you are audible.
Unidentified Participant
Yeah. I wanted to ask you sir. At what percentage tariffs are you comfortable with? Let’s say it stays at 25%. Is that.
Pratik Patel
See 25 tariff will not hurt us. One of the reason why any tariff will not hurt us is as soon as tariffs are announced the domestic industry raises the prices of their products in America. So if my costing is based on Rhodian costing is based on American costing. Then they are not going to bothered about tariff. Dairy perfects only for orders which you have already taken. And for those orders if tariff increases. Suppose I have taken an order with zero tariff and now it is 25 tariff. Then it hurts me. I have taken an order with 25 terry and becomes 50 tariff.
It hurts me. I have taken order with 50 tariff and then I am lucky and the Terry goes down to 15. Then I benefit. So Terry will only affect us where we have already taken order considering XYZ tariff and then it has gone up. However, all the raw material pricing bought out pricing in America. Not everything is produced in America. So everything is coming from outside. So as soon as tariff is applied all the prices go up in America. And. And accordingly we are considering those increased prices. So for us Terry hurts only when we have taken the order and there is a change.
Dharmendra Jain
Yeah, there is uncertainty, sir.
Unidentified Participant
But in the other scenario, let’s say. For India is 25% and another country say 10 or 15%. Somebody, somebody are competing a company 25%.
Pratik Patel
Will not hurt us. If you remember in early April I put out a message to NSE when 25% tariff was announced. And we are comfortable with that. It doesn’t hurt us. Okay. The orders which we already had it will hurt us there. But more than that it will not hurt us. Is it clear?
Siddesh Chawan
I think we lost the connection. We will take the next question from Akash Shah. Please go ahead.
Akash Shah
Hello sir, this is Akash from Asian Roking Pune. So this. I don’t know if this question will. Apply to to Josh or not. But is there a way that given the manpower situation for Orange and in. General in different places is there A. Way for using AI or any such tools to want to help us or.
Pratik Patel
No, no, when manufacturing AI will not be able to help us.
Akash Shah
Okay. No, I meant from a design perspective.
Pratik Patel
And that we are already doing automation and design.
Akash Shah
Okay. All right. All right.
Siddesh Chawan
Thank you so much, sir. All right, thank you. We will take the next question from Surya. Please go ahead, Surya, kindly unmute yourself and go.
Unidentified Participant
Yeah. Am I audible now?
Pratik Patel
Yeah. Yes.
Unidentified Participant
Yeah, yeah. Thank you for taking me. So one question is that from the. It is continuing from the earlier colleagues. So just you are telling the term for the new orders. It is not problem. That means, you know, for 50 uploading of the prices, don’t you think that the people will defer the orders for future orders? Because you know that is that in that case the project cost will be very much high and obviously people will see that, okay, sometimes maybe Trump will relent and it could be softened. So that kind of situation will emerge and maybe demand deferment will happen.
Pratik Patel
This slide deferment is already there. Understand you are a contractor. You took a job considering XYZ prices and then the tariff comes in and the prices goes up. Then the contractor takes a hit if he has not placed the order. But if he has placed the order, the manufacturer takes the hit. So everyone is suffering. It is not that U S contractors are not suffering, they are also suffering. Just to give you an example of the plant we are building in Houston, we place the order in May, May, June and already is now talking about increasing the price because his input prices have gone up.
Because we did not give advance, we have no leverage. So I will have to increase the price because otherwise he will say I will not do the job. So everyone is going to suffer. Tariff is not only going to make only Indian company or a Chinese company or American or European company suffer. Everyone down the value chain is going to suffer.
Unidentified Participant
So do, do you, do you. I mean, how do you then tackle the. The old orders where we are going to take a hit? So obviously the top line won’t be having any issues. But the. At the EBITDA level or, or at the margin level, it will be definitely having a very big impact. So how do you, I mean where the customers are asking, you know, at the moment, before 50, 25 stays, what the customers were, you know, maybe you can say negotiating with us on a discount basis or what if you can give some color to that.
Pratik Patel
So first of all, this is ironical. Just does not take order in America. Rodney and takes order in America, right?
Unidentified Participant
Yeah.
Pratik Patel
And Rodney and Does not have to say where it is going to be produced until it is a Baba order that is built in America. So Rodney and can get from just India can get from Waterfront can get from China wherever they want from plant. Is not India interested to know. It is a Rodney Hunt product that he is buying. So for him he has a fixed price. But at which he gets where r gets it from? He is not interested to know.
Unidentified Participant
Okay.
Pratik Patel
And so if the tariff is applied, Rodney Hunt will pay more for what Josh has given to Rodney Hunt and Rodney and would have to absorb that.
Unidentified Participant
Okay.
Pratik Patel
So the client whether tariff goes up or tariff goes down. Client is not going to talk to Rodney and about it.
Unidentified Participant
Okay. In your circle though it is a very tough question. In your circle what are the industrialist there? Or maybe Indian occurs is. You know, maybe they are talking or let’s say what are you hearing about the tariff? Will it will prompt relent or that kind of stance will continue.
Pratik Patel
I am not a politician. I am not
Unidentified Participant
among the. Among you among the industrialist. I am saying, you know, for whatever. Let’s say you. You could be talking to your circle. Maybe on the biggest we could be reaching to a bigger circle.
Pratik Patel
No one is happy with the situation. But no one has control over the situation. So everyone is just assuming everything. You have to have the final conclusion on the tariff known before anyone would be able to hazard a guess. I think we are still two, three months of conflict is going to be there.
Unidentified Participant
Got it? Yeah. Thank you.
Siddesh Chawan
Thank you. We’ll take the next question from Vedantaran. Please go ahead.
Unidentified Participant
Hello sir. Thank you so much for the opportunity. So I would like to ask how much percentage of U. S order book comprises where tariff is impacting like orders before April where tariff was zero.
Pratik Patel
So I would say we had around 5060 crore worth of deliveries from India to America.
Unidentified Participant
Okay.
Pratik Patel
That’s why I said one to two million dollars.
Unidentified Participant
Okay, sir. Thanks.
Siddesh Chawan
Thank you. There is one the question on a chat box from a from Aditya Biri. While we are guiding 860 crores revenue at a PAT of 80 crores. Have we accounted the 8 to 15 crores tariff pressure to stay on a conservative side?
Pratik Patel
Can I read it?
Siddesh Chawan
Just a sec. I’ll just repeat it again. While we are guiding 860 crores revenue and a PAT of rupees 80 crores. Have you accounted the 8 to 15 crores tariff pressure in this figure to stay on a conservative side?
Pratik Patel
Yes. See, there is another issue I have not talked about. If I get hurt by tariff, I also get Benefit by depreciation of rupee. But the benefit of depreciation of rupee is on the whole export order, not only America.
Siddesh Chawan
Okay.
Pratik Patel
So that will go to the benefit of the company. So I would say 80 as I said was on the worst case. But some benefits will also kick in because the rupee will depreciate.
Siddesh Chawan
Okay. Okay, thank you. Since there is a time constraint. Sir, would you like to take a last question from Navi or we’ll take a close. Hello.
Pratik Patel
Yes.
Siddesh Chawan
Okay, we will take a last question for a day from D. Please go ahead.
Navani Naredi
Hi. Thank you for giving me the opportunity again. Well, I just want to tell you that I’m very bullish on this business and I’ve been following your company since 3 4/4 now. And the only question about is the Saudi Arabia and the UAE business since there is a lot of demand which I think personally will be coming from that region. So going forward can we see the change in mix like coming from Saudi and will you penetrate in that market more than the America or the Europe in coming years? And can we expect expect our top line to grow like to double in next three to four years time span? This is man.
Pratik Patel
So top line. Top line. We have doubled in three years. I don’t think they are able to double it in next three years is not possible. It needs lot of infrastructure improvements and capability enhancement. Selling such dreams, I would say it is wrong. But yes, we do plan to double the top line in four to five years. Four year also would be very very optimistic. But five years is possible. Point number one. Point number two on Saudi Arabia. See if Modiji says make in India, America says make in America. Saudi is also saying making Saudi.
So the reason we are investigating setting up a plant in Saudi is not because the Saudi market is is big but because if you are not invested in Saudi the chance of getting orders are going to be bleak. So that is the reason our Vice president presently is in Saudi Arabia talking to what can be done and how can be done.
Navani Naredi
All right, thank you and all the best for the future. And I’m looking forward to the next call. Thank you.
Siddesh Chawan
Thank you. That was the last question. I will request for a closing comments.
Pratik Patel
So it has been tough the quarter and the situation in the market. However, I assure you all that at the end of the year we. We may still surprise you. Not as before, but we may still surprise you. We still will maintain our top line on the bottom line. As I said so many things depends. But it would not be an horror story. The bottom line would be within 80 crore to 110 crore bracket range depending upon how soon this tariff tangle is solved. With that, I would like to conclude the meeting and say once again, thank you everyone for patiently listening to me.
If we could not address anyone’s query, please approach and he can send it to me and we will reply to you. We have another investor visit plan today. More than 42 investors are in Chennai to visit us and so we are constrained in time and that’s why we cannot extend this any further. Thank you.
Dharmendra Jain
Thank you.
Siddesh Chawan
Thank you. Thank you everyone for joining us today. If you have any additional questions, as Pratik sir said, you can reach out to us anytime. We wish you a good health and look forward to seeing you again in the next quarter. Have a good day. Thank you.
Pratik Patel
Thank you.