Jyoti CNC Automation Ltd (NSE: JYOTICNC) Q3 2026 Earnings Call dated Feb. 11, 2026
Corporate Participants:
Parakramsinh Jadeja — Chairman & Managing Director
Analysts:
Harshit Patel — Call Moderator
Aniket Jain — Analyst
Yash Patel — Analyst
Manish Ostwal — Analyst
Balasubramanian — Analyst
Kamlesh Bagmar — Analyst
Shrenik Mehta — Analyst
Jenish Karia — Analyst
Keshav Bharadia — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to Jyoti CNC Automation Q3 and Nine Months FY26 Earnings Conference Call, hosted by Equirus Securities Private Limited. [Operator Instructions] And there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions]
Before we begin, a brief disclaimer. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on the date of this call. These statements do not guarantee the future performance of the company and may involve risks and uncertainties that are difficult to predict.
I now hand the conference over to Mr. Harshit Patel from Equirus Securities. Thank you, and over to you, sir.
Harshit Patel — Call Moderator
Thank you. Good evening, everyone. On behalf of Equirus Securities, I welcome you all to Third Quarter and Nine-Month FY26 Earnings Conference Call of Jyoti CNC Automation Limited. We are pleased to have with us management represented by Mr. Parakramsinh Jadeja, Chairman and Managing Director of the company. We will have opening remarks from Jadeja sir, followed by a question-and-answer session.
Thank you, and over to you, sir.
Parakramsinh Jadeja — Chairman & Managing Director
Thank you, Harshit. Good evening, everyone, and a very warm welcome to our Q3 and nine-month FY26 earning conference call. Along with me, I have a senior management team and SGA, our Investor Relations advisor. Results and presentation have been uploaded on the stock exchange. I have — I hope everyone has had a chance to go through the same.
I’ll begin my opening remarks with overview on the economy front, followed by highlighted on the company. India’s economy continues to show a strong growth momentum, supported by healthy domestic demand and steady policy reforms that improves a competitiveness and boost investors’ confidence. The Union Budget 2026-’27 has reinforced this direction by focusing on long-term investment and structural growth.
A key highlighted of the budget is the continued emphasis on public capital expenditure as a main driver of growth, with an allocation of INR12.2 lakh crore for FY27, around 9% higher than the previous year. This sustained capex push is expected to strengthen infrastructure, encourage private investment, and provide long-term visibility for the manufacturing sector.
The budget has also announced a focus measure across sectors Jyoti CNC is catering to. The launch of India Semiconductor Mission 2.0 aims to expand domestic semiconductor and equipment manufacturing along with chip design capabilities, which will drive demand for high-precision machining. Electronics manufacturing has been further supported through a INR40,000 crore outlay under the Electronics Components Manufacturing Scheme, scale up — helping scale up EMS and component production.
In defense, higher capital allocation to domestic aerospace and defense manufacturing strengthen the push for self-reliance, where precision engineering play a critical role. Similarly, continued policy support for the automotive and auto component sector through PLI schemes and duty reforms reinforce India’s position as a preferred manufacturing hub.
On the global front as well, greater clarity around tariffs supported by a free trade agreement signed with EU and US is expected to provide a meaningful boost to our export-oriented end-user industries. This improvement in trade visibility should support demand across global markets and create additional opportunities for companies like ours. Overall, the current environment place both country and Jyoti CNC in a strong position, driven by a clear and sustained focus on manufacturing.
In this context, the role of mother machine manufacturers, companies that build a precision machine used to produce other machine tools, become especially very critical. As manufacturing activity expands across sectors, the demand for reliable, higher-quality CNC machines is expected to rise meaningfully, creating long-term opportunities for players like Jyoti CNC.
Now speaking of Jyoti CNC. As highlighted earlier, the Indian CNC machine tools market continued to be largely served through import, presenting a significant opportunity for domestic players. To strengthen our presence and capabilities and capitalize on the opportunity, we are undertaking a large capacity expansion in India, increasing our manufacturing capacity from current 6,000 machines to 16,000 machines by September this year.
I am happy to announce that the capex is progressing as planned, and we will be able to ramp up sooner than expected on the back of huge industry demand and our product in India and globally. Alongside a capacity expansion, we have also made investment in talent development, including upskilling our workforce and setting up an in-house training institute to build up a pipeline of over 1,000 skilled engineers.
These initiatives form a critical part of our long-term growth strategy to deliver high-precision machines across diversified sectors and support sustained growth. At the same time, R&D and innovation remain a key strategic priority. We continue to advance our product development efforts through initiatives such as the HUMA Control Panel, along with a plan to integrate proprietary controllers, drives, and motors.
These steps will strengthen our product offering, technology capabilities, and reduce import dependencies over a period. In parallel, we are actively exploring next-generation products for high-precision applications, including semiconductor equipment, which we believe can become a meaningful growth driver for the company in the coming years.
In summary, we are expanding capacity, strengthening our talent base, depending our capabilities, and preparing to serve a much larger and more global customer base. We remain financially disciplined and future-focused, and we are confident of delivering a sustainable growth in the years to come.
Now I will share with you — let’s say with you the key updates of the company. In November 2025, we expanded our capacities at Huron, a facility in France, almost double in line with our growth plan. This expansion strengthened our manufacturing capabilities and positions us well to meet a rising global demand. Huron continued to serve as a key technology hub for the company.
With a strong focus on high-end machines catering to global customers with the increased capacity, we are better equipped to address a growing demand from the aerospace sector and expand our global footprint. We have commenced assembly operation at the facility and are seeing a healthy ramp-up with material traction expected to reflect from FY27 onward.
We are seeing strong traction from defense sector both in India and across global markets. We have a healthy order book of aerospace and defense of close to 41% and around INR1,900 crores, reflecting growing confidence in our capabilities and the increasing demand for high-precision machining solutions in this segment.
With the ramp-up of our capacity at Huron, capacity expansion at India coming live in September 2026, and a strong, growing order book across sectors, we expect the coming period of the — significantly stronger, supported by improved execution, higher deliveries, and sustained demand across our key end markets.
Before I begin my update on the operational and financial performance, I would like to briefly explain the nature of our business and the reason behind our higher inventory days so that everyone has the right context. Ours is a manufacturing business with a long production cycle, and the working capital requirement is largely driven by inventory. We operate across three broad product categories.
In entry-level machines, which are largely supplied to EMS, automobile, and auto component, and general engineering. The manufacturing cycle is around three months to six months for a mid-range machine to a low-level machine. The cycle extends to about nine months.
For large and complex machines, the manufacturing cycle can range between 12 to 18 months. Given this long build cycle, inventory naturally remain on the balance sheet for extended period.
Historically, our inventory days were much higher than the current level. Over the last few quarters, through better planning, execution, and process improvement, we have been optimizing our working capital cycle and seeing positive trends in which we will release and shorten the intensity of working capital requirement. And we are on a trajectory of that.
Speaking of the financial and operational performance for the quarter and nine months ended FY26, we reported a strong consolidated revenue growth of 28.1% for the quarter, standing at INR576 crores, in line with our internal expectation. Our performance for the nine months was also strong, with consolidated revenue of INR1,494 crores in nine-month FY26 compared to INR1,242 crores in nine-month FY25, reflecting a growth of 20.3%.
With strong order book, stable economic and geopolitical situation, capacities in place, and execution rigors, we are optimistic of a stronger Q4 in FY27. Historically also we have witnessed that Q4 is among the best-performing quarter across the financial year, and we anticipate the trend to continue this year as well.
Speaking of segment revenue, for nine-month FY26, 42 percentage came from aerospace and defense, 28 percentage from auto and auto components, 22 percentage from general engineering, and remaining 8% from other sectors, including EMS and dies and molds.
Our order intake for nine month FY26 stood at INR1,661 crores. This includes a 46 percentage from aerospace and defense, 30 percentage from auto and auto component, and 17 percentage from general engineering.
Speaking of our current order book, it remains healthy and well-diversified at INR4,585 crores, reflecting a steady demand and continued customer confidence. The industry-wise breakup is as follows. 41 percentage from aerospace and defense, 19 percentage from general engineering, 18 percentage from auto and auto component, 14 percentage from EMS, and the balance from other sectors.
Let’s coming to the margin, EBITDA for quarter three FY26 stood at INR155 crores, a growth of 37.3 percentage compared to the same period last year. EBITDA margin were 26.8 percentage compared to 25 percentage in Q3 FY25, a growth of 180 basis points year-on-year. EBITDA for nine month FY26 stood at INR379.4 crore, a growth of 21.1 percentage year-on-year.
Profit after tax for Q3 FY26 stood at INR89 crores compared to INR80 crores in Q3 FY25, reflecting a growth of 10.3 percentage. For nine month FY26, it grew by 18.5 percentage. Lower growth in PAT is largely attributed to increased finance costs on account of a capacity expansion plan, as this capacity is coming in live, and will start contributing to revenue and profitability. We will see interest burden being absorbed and reduction in debt, which will enhance the overall profitability significantly.
As we enter FY27, Jyoti CNC is well-positioned with stronger order book visibility and key capacity expansion, a project nearing commissioning. With sustained demand across sectors and improving execution, we remain confident in our growth outlook. We look ahead with optimism supported by our manufacturing scale, technology focus, and long-term commitment to value creation.
We may now open the floor for questions and answers.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Aniket Jain from YES Securities. Please go ahead.
Aniket Jain
Good evening, sir. Congratulations on posting a really good set of numbers.
Parakramsinh Jadeja
Thank you.
Aniket Jain
So my first question is on the India-EU as well as US trade deal. I think India is reducing the tariffs, at least for the European Union, from probably 18% to 20% to near zero now, while EU’s tariffs will — are already in probably low single digit. Are we anticipating any kind of competition from the European Union supplier? What are your views on EU as well as US trade deal?
Parakramsinh Jadeja
So, thank you, Aniket. Basically, I’ll let you know that in a machine duty today, the machines are coming from EU. Its duty was only 7.5 percentage, and all these machine customers were importing against the export license there. So almost every customers today — what the machines are coming from Europe and USA, that is in machine tool industries are almost at zero duty there. So there is no significant change in terms of competition over there.
Rather, we are feeling a little bit better there now because all our import contained, like we were importing the controller from Siemens Germany and all, our duty was 7.5 percentage. This will — going to be zero for us. So basically, that will be a cost advantage is going to come to us. So we are looking very happily to see this deal there basically.
Aniket Jain
Understood, sir. And sir, for US, are we — I think we had plans to set up a sales office there. So is there any progress on that? And yeah.
Parakramsinh Jadeja
Yeah. Thank you, Aniket. Basically, we were just looking at the appropriate time. So we have last — let’s say last two, three months, we’ve already progressed all the company registration legalities, and all is over now. And within one quarter now we are, let’s say, appointing all of our sales team and our tech centers and all.
Hopefully, this operation will start, and within the next two months to three months, very aggressively we are going ahead in US there.
Aniket Jain
Understood, sir. Sorry, I can — if I can squeeze in one more. So we are nearing production. So basically, we are nearing the capacity expansion for our Rajkot facility. But we are yet to receive any material orders for EMS. So I just wanted to check if you are anticipating any kind of orders during this quarter, maybe in Q1 of next year. So that our capacity, as and when it comes online, we have ready orders in hand so that it is optimum utilization. So what are your thoughts on orders as well as [Speech Overlap]
Parakramsinh Jadeja
Yeah, Aniket, everyone is looking to answer of this. Basically, we are fully prepared. Even our capacity is also coming up, and we are fully booked with the order book of back-to-back to them. And right now we are working with many more suppliers, many more manufacturers, and approving their process and all.
Basically, all these my — the future customers, they’re also expanding their capacity. They are all on the execution level there. Once their plants and things are ready, I think they need the further machines and all, and we are very much hopeful to get the few orders in the coming quarters there.
Aniket Jain
So basically in Q4, so this quarter, or maybe in Q1?
Parakramsinh Jadeja
Maybe on Q1 there. Maybe on Q1.
Aniket Jain
Maybe in Q1. Thank you so much for answering the question, sir. All the best. I’ll get back into the queue.
Parakramsinh Jadeja
Thank you.
Operator
Thank you, sir. The next question is from the line of Yash Patel from Kotak AMC. Please go ahead.
Yash Patel
Hello, sir.
Parakramsinh Jadeja
Hi, Yash.
Yash Patel
Sir, I wanted to ask you about the cash flow situation this quarter. Can you throw some light on what were the cash flow this quarter?
Parakramsinh Jadeja
Yash Bhai, we are on, let’s say, end of the year — what we are discussing in past also. So we are on a very positive trajectory on the cash flow side there. So we are moving ahead very positive cash flow in a direction in Q4 there.
You saw that in quarter two — on a half-yearly, we were at break-even level, let’s say, positive there. Similarly, we are at a similar level, and we are hopefully that it will be — last quarter is always to be a better quarter for us. So we are looking very positive cash flow, obviously.
Yash Patel
Okay, sir. Thank you.
Parakramsinh Jadeja
Thank you.
Operator
Thank you, sir. The next question is from the line of Manish Ostwal from Nirmal Bang Securities Private Limited. Please go ahead.
Manish Ostwal
Yes, sir. Thank you for the opportunity. I’ve listened your initial commentary on the industry, and we all understand the industry has a very strong outlook in terms of growth. But when I look at, sir, our order book position, especially this year compared to the last year’s performance, last year at ’25 we started an order book of INR34 crores, INR38 crores, and end up INR43 crores, INR46 crores, 26.4% growth. Whereas in this — YTD basis in this particular financial year, order book growth, only 5.5%. So order book growth has disappointed materially. So, can you make a detailed comment why the order book growth is not happening? What is our current capacity utilization in the business?
Parakramsinh Jadeja
So, Manish ji, thank you very much. See, basically, now today we have reached order book, is almost one and a half years to two years. These industries are not ready to listen to us for the longer delivery period. So there is not — and you are able to see that numbers are growing higher there.
The way the — let’s say, this year our capacity utilization has touched almost 90 percentage now. Once our new capacity will come in a picture and we deliver the old order book there, we will see the traction to be more over there today. And we will build a new order book on a — bulky order book on that, then after only that, once the capacity expansions are going on.
So today, let’s say once it’s on — today we are at almost INR4,600 crores. It’s a very heavy order book, and customers are — no more customers are ready to wait more than 18 months delivery commitment there.
Manish Ostwal
So basically, sir, because of supply constraints at our end, we are not taking the new order or customers are not placing new orders to us till the new capacity come on stream. That is the way I should understand?
Parakramsinh Jadeja
Yeah, absolutely. Absolutely. Absolutely, because if I get any new orders from a — very bulk orders and all, my delivery period is going to be more than 18 months there. Okay? No customers are willing to wait for two to three years there. So INR4,000 crores, let’s say, if you look at that 18 months order book, is a very hefty order book for our industries there.
Manish Ostwal
Understood, sir. The second question on the — our capex plan on the new capacity, I believe we have taken a loan of INR300 crores — term loan of INR300 crores from Union Bank. So how much we have used it for this capacity expansion program, and how much we need to spend more in term loan?
Parakramsinh Jadeja
So basically this year, you know that we have earlier announced that we are going to do INR400 crore to INR450 crore capex. And we are behind that very aggressively to finish as early as possible. Because today — our growth are being constrained based on the capacity today now. Okay?
So we have used that almost INR200 plus crores from Union Bank, and we will use this financial year aggressively as soon as possible to finish the capex over there.
Manish Ostwal
Right, sir. And the last question on the supply chain situation because a lot of components we import from Japan. So how’s the supply chain situation? Is it stable? Is it volatile, or currency impact? Can you talk about that thing? That will be my last question, sir. Thank you.
Parakramsinh Jadeja
Today, our supply chain is very stable in terms of internationally. Japan and Germany are well supply chain. There is not much issues over there. It’s a very stable supply chain we are seeing there. Okay?
Manish Ostwal
All right, sir. Thank you very much for answering all my questions.
Parakramsinh Jadeja
Thank you.
Manish Ostwal
All the very best for the coming quarters.
Parakramsinh Jadeja
Thank you. Thank you very much.
Operator
Thank you, sir. The next question is from the line of Balasubramanian from Arihant Capital. Please go ahead.
Balasubramanian
Good evening, sir. Thank you so much for the opportunities. Sir, we are planning to develop proprietary controllers, drives, and motors under PLI scheme [Technical Issues] equal to 4% to 5% of gross margins. Just want to understand these proprietary controllers like it’s meaning we are going to place CNC controllers like Fanuc and Siemens, which is widely used in the industry. So I think we are taking with HUMA as a front-end HMI.
Moving to full-stack controllers involve decades of cumulative software stability and server tuning expertise. I just want to understand beyond prototype, what specific milestones like we are planning to achieve under the PLI schemes. Whether they’re developing entirely to replace Fanuc and Siemens?
And like how — like how — it will reliable compared to those softwares? And can you be able to make it reducing royalty or import cost at the component level? If you share more details about the controller part.
Parakramsinh Jadeja
Thank you, Bala. See, particularly on a journey of Atmanirbhar Bharat — there is a background noise coming. Please ask someone to mute, please.
Operator
Bala, sir, can you please mute yourself?
Balasubramanian
Yes, sir. Yeah. Yeah.
Operator
Thank you, sir.
Parakramsinh Jadeja
Yeah. So basically, for this journey of CNC controller development and Atmanirbhar Bharat over here, see the — in a decade, this Japanese and German manufacturer has developed this product. And they have made mastery, and let’s say today they are driver of the world total — the motion control over here.
Our journey is starting now, but we have now experience of our — now Jyoti has completed almost 30 years plus, and Huron we have 190 years plus experience. People are available there.
So we have a very — in terms of a drive tunings, and fine-tuning the parameters and all on a control design side, we have a very experienced, knowledgeable people available. Plus, in our country today, very youngsters, the new people, and all our institutes like IITs and the CMTIs and all — these — all people together, we are quite confident that and we are able to manufacture — design, develop, manufacture reliable products, not only the reliable products, in terms of a technological forefront over there. Okay.
So, let’s say today, the — any new technology commerce coming, they will always to be one step ahead in terms of a more advancement because those guys are not able to change the platform very easily once the product has been developed. So we are very much confident in terms of that and looking forward to develop one of the best controllers in this earth there.
Balasubramanian
Okay, sir. Sir my second [Speech Overlap]
Parakramsinh Jadeja
I think I’ve given you the one part of that. What was your next question there inside that?
Balasubramanian
Sir, like, how — or like, if you could explain PLI scheme for proprietary controllers, drives, and motors?
Parakramsinh Jadeja
Yeah. So basically, the electronic component manufacturing scheme — what you have — already the government has expanded the budget also from INR20,000 crore to INR40,000 crore. So we are eligible over here to be on a capital subsidy over there. And there is a specific mark out there for capital subsidy.
The amount what has been disbursed by — let’s say, been granted by the central government, same amount will be in Gujarat government also. So we are expecting to be a very large number of this scheme advantage going to be received to manufacturing these controllers, drives, and motors, and sensors there.
Balasubramanian
Okay, sir. And sir, another part, 4% to 5% gross expansion. It’s entirely dependent on replacing Fanuc or Siemens controllers entirely, or it’s reducing royalty or input cost at the component level? Just a follow-up.
Parakramsinh Jadeja
So basically, these are the very high-value import items. And particularly on a high-end machine, the cost of these controllers are very high there. Okay? So definitely we are able to — and once we are manufacturing in India, and now all electronics component manufacturing ecosystem also has been developing so nicely in India. So even the microchips and all are also is going to be available made in India chips only. So we are no more dependent on future on that. So our cost controls will be very much in our hands there.
Balasubramanian
Okay, sir. Sir, my last question, we are designing products for semiconductor manufacturing machine builders. I think it required extreme precisions, even nanometer range. I just want to understand what kind of market we are targeting. It’s majorly for, like, front-end fabrications or back-end OSAT assembly side? Could you give move color on that?
Parakramsinh Jadeja
So, basically — yeah, thank you, Bala. Basically, in a semiconductor side, you are right there. It’s required a nano precision. And based on our this experience at Huron as well as Jyoti, we are now entering into a nano precision over there. We are going to create the infrastructure to produce the nano precision over there. And particularly, we are targeting to equipment to build semiconductor chips there.
So we are going — we are designing and developing many differential process on it, from casting foundry to inspection units, and many, many more equipments are there. Around eight to 10 different technologies we are developing over here in equipment side to serve to our Semiconductor Mission 2.0 there.
Balasubramanian
Got it, sir. Thank you.
Operator
Thank you, sir. The next question is from the line of Kamlesh Bagmar from Lotus Asset Managers. Please go ahead.
Kamlesh Bagmar
Yeah, thanks for the opportunity. Sir, just one question on the part of, let’s say, if we deduct standalone from consol, so if I see the revenue, so it is down 7%-odd year-over-year. So it may be because of the ramp-up in the Huron. So can you highlight, like, say — because on a consol basis, our margins are looking lower, or the growth in EBITDA looking much lower, while on the standalone, it is looking very strong.
So because on standalone, we have done INR165 crore of EBITDA. While on consol basis, it is INR155 crore. It may be because of, let’s say, a ramp-up in the expenses at the Huron operations, while the revenue has not reflected yet. So, can you share some highlight or insight into the Huron operations and the gap between the earnings?
Parakramsinh Jadeja
Already. Already, what you are saying is absolutely right. You answered yourself only, Kamlesh bhai. Definitely, the revenue has been — not been came over here, and the cost has been incurred. In this now, with our new facility comes on a picture, we have add-on around 27 more people in manufacturing in France to ramp up our production further more now there. Even in terms of inventory building up also, we have started very aggressively and supply material from Jyoti to there, and we started all floors and everything like that.
So you will see this be very normalized things and number-wise, in the next year, quarter-on-quarter, you will see more and more Huron numbers will come very positively on the growth side there. Once the growth, we will able to execute there, all these costs will be absorbed, and you will see the EBITDA level will increase one plus one like that.
Kamlesh Bagmar
Okay, great, sir. And sir, if I see margins, like if I just do the math, EBITDA per machine, let’s say it was — it is roughly around INR10 lakh in these nine months. So going forward, as our execution improves and the new capacity comes in, Huron further complements the expansion in the growth, so where do we see our margins? Like, say, do we see significant jump in the margins because the scale and, like, large capacity expansion comes into play, so that would get absorbed over a larger base in terms of fixed costs. So, where do we see our margins? Because in industry there is some concern that the margins are not because year-over-year, our margins are at INR10 lakh, which was INR11.5 lakh a year back, on a nine-month basis.
Parakramsinh Jadeja
Thank you. Kamalesh bhai, I’m answering to you on a consecutive last six calls on the same question, and my answer is same. Let’s say we are delivering, we are committed, and we are seeing that — there is no margin pressure we are seeing at a 25% of EBITDA. And, if someone — let’s say if it is increasing, it is okay, but we are not seeing any pressure on that to below that.
So we are fully committed in the next coming two years. We are — the way we have an order book with us, we are very much sure that our margin parameters will be maintained very strongly for the next coming two years. That’s the visibilities we are having today there.
Kamlesh Bagmar
Great, sir. And sir, you have highlighted in your presentation with regard to the semiconductors. So are we catering to the semiconductor sector as of now, or we are developing the machines to cater to that?
Parakramsinh Jadeja
So we are developing the technology today. Okay? And once the technology, we will reach out and reach out to that same level of requirement, then we will launch our product there.
Kamlesh Bagmar
How much time lag could be there, like, say, from current date, or what time period we would be able to have [Speech Overlap]
Parakramsinh Jadeja
So I think we are seeing that — in the next two years, definitely, we will come with the commercial product to be launched there.
Kamlesh Bagmar
And lastly, sir, can you give the breakup of machines, like say entry-level, mid-level, high-end, and the commensurate revenue to machines?
Parakramsinh Jadeja
Yeah. So, let’s say, quarter three, the entry level, the machines is 1,207 at a value of INR247 crores. The average is INR20.46 lakhs. Mid-level, we have 128 machines, and value is INR83 crores. Average is coming at INR64.84 lakhs. Around 23 machines at value of INR221 crores. The average is coming at INR9.6 crore. So the total number of machines is 1,358, and the average is coming as a INR40.5 lakhs.
Kamlesh Bagmar
Great, sir.
Parakramsinh Jadeja
Is this okay, Kamlesh bhai? Yeah.
Kamlesh Bagmar
Thanks a lot, sir. Thank you.
Parakramsinh Jadeja
Thank you.
Operator
Thank you, sir. The next question is from the line of Shrenik Mehta from Indo Aalps Wealth India Limited. Please go ahead.
Shrenik Mehta
Hello, sir.
Parakramsinh Jadeja
Hi.
Shrenik Mehta
I had a couple of questions. One, I wanted to ask you, you had almost INR4,600 crores of order book. What is the advance that we take when we do this order book?
Parakramsinh Jadeja
So, let me tell you, while we take any entry-level product, okay, and in entry level, we have a common, let’s say, around 5 percentage is a minimum advance to be with us there, okay. And — while the high-end machines, okay — while high-end machines for exports and all, so there we are able to get a milestone payment also, and we are getting at around 10% to 15% advance.
But in government orders, let’s say we have many government defense orders, there we are not getting the advance there. Government don’t give the advance there. Yeah.
Shrenik Mehta
Okay. Because this will be always your key concern when it comes to the operating cash flow. As you have seen the trend, you are making a lot of net profit, or the operating profit, but your operating — net cash from the operating activities has been negative. And there is a big difference. On one side, you earn almost INR500 crores, other side, you have a negative INR100 crore net cash from operating activities. And going forward with the expansion of the capacity, your requirements of the inventory will remain quite high even in the next few quarters. So, I don’t know if you have some idea about when you expect this cash flow from operating activities to be in line with the operating profit that you make?
Parakramsinh Jadeja
Yeah. So already, in my first question I’ve answered to Aniket there, and it’s my answer is same that you will see the things — see that we are on a growth trajectory. One side, we are capacity expanding, second side, we are expanding, but our overall inventory days, we are reducing from very large to that. Once the scale-up has reached on a economical scale has reached that, that our inventory days also will reduce that.
So you will see quarter-on-quarter very significant improvement from the next year. Even you will look at that end of the year, you will see a positive operating cash flows to be there.
Shrenik Mehta
Okay.
Parakramsinh Jadeja
We are very much worked on that, and we are on line with them.
Shrenik Mehta
Okay. And for your French Huron capacity expansion, which has happened sometime in November, when can we expect the sales to start showing in our quarter-after-quarter results?
Parakramsinh Jadeja
So the growth we are able to — we are going to see from first quarter onwards because there is a manufacturing time of — yeah, manufacturing time for the machine is longer there. So we will see the good numbers. First time we will see the numbers. You will see the growth trajectory from quarter one onwards there.
Shrenik Mehta
Okay. Thank you so much.
Parakramsinh Jadeja
Thank you.
Operator
Thank you, sir. The next question is from the line of Jenish Karia from Union AMC. Please go ahead.
Jenish Karia
Yes, thank you for the opportunity. Good evening, Jadeja bhai.
Parakramsinh Jadeja
Good evening.
Jenish Karia
Considering that the private capex will pick up going forward, should we see a growth accelerating, and can we guide for a 25%, 30% growth in FY27 and northward of 30% in FY28?
Parakramsinh Jadeja
Yes, absolutely, FY27 you can consider same numbers of ’27 as well as ’28.
Jenish Karia
Understood. And you mentioned in your opening remarks that aerospace, defense, and auto ancillaries are some of the sectors you are seeing incremental growth coming from an order book building up. But apart from that, are there any specific sectors you would highlight, both on India and global perspective, where the growth you see accelerating not in the current order book but in the upcoming order book?
Parakramsinh Jadeja
So basically, the entire manufacturing is growing. I’m — I always very much difficult while I am presenting numbers to you to combine the general engineering and auto and all like that. Okay.
So many manufacturing sectors are growing, valves, pumps, domestic, and every area. Today, I have a 14,000-plus customer base in India. We are consolidating and bringing this number into four sectors in front of you there basically. It’s exploding on a — completely on manufacturing.
If you look at that the Viksit Bharat, India’s target, is to be a $30 trillion economy and 25 percentage of manufacturing. 25 percentage of manufacturing, today we are at 13 percentage, and growing this economy at 6% to 8% in between. You can understand every sectors are going to grow there, every sectors.
Railway, apart from what we are not discussing over here, we are seeing the very tractions on a railway. The railway component manufacturing is increasing, and we are supplying many machines to them, but it falls under category of what we call as a general engineering. If you see that every quarter-on-quarter, our general engineering baskets are increasing there.
Jenish Karia
Understood, sir. And just one last thing. What would be the revenue mix from exports currently? And do we see that changing, materially improving on the export side going forward, or will be majorly focusing on the domestic growth story?
Parakramsinh Jadeja
So, Jenish bhai, we are very much focused to be maintain around 35% to 40% is to be exports and 60, 65 percentage is to be domestic. And this is in line. We are looking for the next couple of years, it is going to be maintained similarly like this.
Jenish Karia
Perfect, sir. Thank you. Thank you for the opportunity, and all the best for the future.
Parakramsinh Jadeja
Thank you. Thank you.
Operator
Thank you, sir. The next question is from the line of Aniket Jain from YES Securities. Please go ahead.
Aniket Jain
Hi, sir. Thanks for taking my question again. So I had two more questions. So number one is on the material cost inflation. So I believe there is probably 20%, 30% of your total cost could be coming from the raw materials, maybe steel, aluminum, copper. So are we hedging those, or how are we protecting our margins? Is there any price escalation clause included in the contracts?
Parakramsinh Jadeja
Aniket ji, we are in — absolutely on a natural hedging scenario. See, every orders are fixed orders. We are not having a long-term contract to repeat to same price to give a next machines to them — customers there. And you know that our inventory cycles are almost 200 to 240 days of our manufacturing.
Whenever this — any these commodity prices plus and minuses, okay, we are transferring on the same next month to the new customers, and we are able to balance these things there.
Aniket Jain
Got it, sir. And probably one more on Huron. So I did some reverse calculation. I think one more participant asked the question. So on Huron, what are the revenues? Because on my numbers, I think it is coming between INR45 crores to INR50 crores versus probably around INR60 crores in the last quarter. So why is there a decline in Huron?
Parakramsinh Jadeja
No, it’s not decline. I’ll tell you one thing. It’s because of a consol level, we have a — I told you that we are now increasing the new inventories and everything there. So there is a — in the consol level, there are more material been dispatched from Jyoti to there. So in a consol, it has been reduced there, basically.
Aniket Jain
Okay. So…
Parakramsinh Jadeja
Otherwise, right now, there is a — almost it is a little bit higher than the quarter two numbers to quarter three numbers there.
Aniket Jain
By any chance, are you able to share the number? Not sure if you’re comfortable doing that, but what is the Huron’s revenue, and how much are we sending from Jyoti to Huron?
Parakramsinh Jadeja
Yeah, absolutely. I’ll just find out. And not front of me there, I’m right now — in Huron right now.
Aniket Jain
Awesome.
Parakramsinh Jadeja
Okay, I’ll share with you the details there.
Aniket Jain
Sure, sir. And probably last one, sir, our gross margins increased to 57% now. So what kind of margins are we making on the high-end machines? And probably, is there any increase in the margins for low and mid-end machines as well? And are we able to sustain these kind of margins, or is there a one-off or probably a temporary situation? Although it has been contained.
Parakramsinh Jadeja
See, basically, Aniket bhai, we are always working — is more and more is to be our value addition program, okay? Based on this, our — a complete backend manufacturing cycle and whatever the critical sub-assemblies and all, we were importing, we are adding more and more. Even our local entry-level product also, we are expanding the margin. Of course, our margins are much better on a high-end machines, and we are executing like that.
In between, I’ll tell you the FY, this — our quarter three, in Huron, my sales is INR80 crores, not INR40 crores, INR45 crores.
Aniket Jain
Okay. Huron is INR80 crores. Okay.
Parakramsinh Jadeja
Yeah. Yeah. And then total together in the three months is close to INR222 crores in nine months there.
Aniket Jain
Okay. Okay.
Parakramsinh Jadeja
Yeah.
Aniket Jain
So how much is then spent out of INR80 crores? So, probably INR30 crores, INR35 crores is being exported from Jyoti to Huron. Am I correct in my understanding?
Parakramsinh Jadeja
Yeah. Yeah. So basically at consol level, what the — let’s say whatever the manufacturing is going to increase there, the 70% goods are going from here to there. Okay?
So if you look at that this year, we are close to INR85 crores worth of material has already been supplied to them. And that’s how we are going to see the future expansion growth are there. Okay? That’s — right now it is affecting to us. In a consol level, it has been removed. Okay? And once it will be executed from Huron, that number will come in a picture there.
Aniket Jain
All right, sir. Very clear. Thank you so much for taking my questions.
Operator
Thank you, sir. The next question is from the line of Keshav Bharadia from Wallfort Financial. Please go ahead.
Keshav Bharadia
Hi, sir. Congratulations on a great set of numbers. Sir, just one question I had. You mentioned that we were trying to get our working capital cycle more in control by various efforts that we’re taking. Sir, could you talk a little bit about how we’re trying to get those inventory days down and optimize working capital? That is first.
And sir, second, we’ve seen a lot of tensions between EU and US, and that has led to a renewed uptick in defense spending globally. So, is there anything that we are looking at inorganically to kind of increase our wallet share with European customers or get access to newer customers to kind of capitalize on that opportunity?
Parakramsinh Jadeja
Thank you, Keshav. Basically, about the inventory optimizations, see that Jyoti is having more than 200-plus product variants. In the last three years, we have reached out to almost 2.5 times to 3 times on a similar SKUs. So based on these SKUs, our optimizations are coming, and more and more scale will increase. Further optimization will come on the same set of SKUs, we are delivering the more. So my inventory is becoming optimizing there. That’s one.
Second, now in a new plant, we are doing a lot of automations over there. Okay? Those are our general — some of the manufacturing processes was in manual. That’s where putting into very sophisticated automations are going to be in a place to be there.
So we are seeing further optimizations are going to be seen over there in terms of flexibility on the manufacturing, easy setup change, and everything like that. That’s the one part. And that’s how we are looking to be growing forward. Going forward, we are looking to be more and more optimizations on there.
Your second question about the EU and this area, yes, there is a lot of — now after the EU deal, we are seeing a lot of — already there are — delegation has came. I met many people over there and all, and we are seeing that more and more investments are going to be happen in Europe there, and particularly, Germany has taken a lead in terms of defense manufacturing. They are going to spend more than $500 billion, and rest all the other people together, they will invest close to $1 trillion in coming days.
And already we are — our all salespeople are in with — working with them very closely. We are seeing that aerospace, defense, as well as very high precision manufacturing in EU zone is increasing dramatically there.
Keshav Bharadia
Got it, sir. Wish you all the best.
Parakramsinh Jadeja
Apart from that — I remember just now, apart from that, I like to tell you one thing more that we have recently — now we started our China operations also there. We are going to furthermore on China with our sales activity there. And all these geopolitical situations, every country has started investing there. So we got a — in this quarter, we got a good numbers — orders from China as well there.
Keshav Bharadia
Got it, sir. That’s very helpful. So, sir, as part of our efforts to get more automation in the general manufacturing processes of the new plant, do we expect that to kind of help margins more from the 26%, 27% level we are at right now, once that [Technical Issues]
Parakramsinh Jadeja
I think, here I’m always giving one simple answer, Keshav. Yeah, there is a — possibilities are there we will improve some margin, but I would like to be very, let’s say, conservative over here, and I’ll not like to guide you that to — from 25% to 30%. Okay? We’ll be in a range in between 25 to 27 percentage. Already we are on a — one of the best industries we are serving over here. Yeah.
Keshav Bharadia
Great, sir. Thank you so much, and wish you all the best for the future.
Parakramsinh Jadeja
Thank you. Thank you.
Operator
Thank you, sir. The next question is from the line of Manish Ostwal from Nirmal Bang Securities Private Limited. Please go ahead
Manish Ostwal
Sir, I have only one question, like, of the total inventory which we have, what is the breakdown of RM versus WIP as on 31st December 2025?
Parakramsinh Jadeja
One second. So I think, I have given numbers on a half-yearly. I need to take from this number because I’m sitting on France right now. I can send you the details. Yeah.
Manish Ostwal
All right, I’ll connect to your office, sir. Thank you.
Parakramsinh Jadeja
Yeah, definitely. We’ll send you there.
Operator
Thank you, sir. Ladies and gentlemen, due to time constraints, we’ll take this as the last question for today. I would now like to hand the conference over to management for closing comments.
Parakramsinh Jadeja
Thank you all for joining us today. I hope we have addressed all your questions. We remain committed to keeping the investment community informed with regular updates on development in the company. For any further information or queries, please feel free to reach out to us or SGA, our Investor Relations advisor. Thank you very much to all of you there.
Operator
[Operator Closing Remarks]