Kaynes Technology India Ltd (NSE: KAYNES) Q3 2026 Earnings Call dated Feb. 06, 2026
Corporate Participants:
Ramesh Kunhikannan — Executive Chairman
Jairam P Sampath — Whole Time Director and Chief Financial Officer
Analysts:
Unidentified Participant
Deepak Agarwal — Analyst
Siddhartha Bera — Analyst
Sonali — Analyst
Achalkumar Lohade — Analyst
Renu Baid — Analyst
Sameet Sinha — Analyst
Indrajit Agarwal — Analyst
Praveen Sahay — Analyst
Manish — Analyst
Naushad Chaudhary — Analyst
Meet Jain — Analyst
Neel Mehta — Analyst
Viral Shah — Analyst
Aditya Bhartia — Analyst
Presentation:
operator
Good day and welcome to The Gains Technology Q3FY26 investors conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on Touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Deepak Agarwal. Thank you. And over to you sir.
Deepak Agarwal — Analyst
Thank you. Udha. Good afternoon everyone. On behalf of Access Capital, I would. Like to welcome you all to the. Q3FY26 earnings conference call of QMS Technology India Ltd. We have with us the management today represented by Mrs. Savita Ramesh. Chairperson Mr. Ravesh Kannan, Executive Vice Chairman Mr. Muthukumar Narayan Swami, Managing Director and. Mr. Jayaram Sampath, full time Director and Chief Financial Officer. Now I’ll hand over the floor to the management for their opening remarks post. Which will open the floor for Q and A. Thank you. And over to you sir.
Ramesh Kunhikannan — Executive Chairman
Good afternoon everyone. On behalf of Keynes Technology team, I would like to welcome everyone to the earnings call for Quarter 3 FY26. Mrs. Savitaramesh, Chairperson of our Board, our Managing Director Dr. Muthukumar Narayan Swamy, our CFO Mr. Jayaram Sampath and whole time Director Mr. Sumit Varuma. Our investor relationship and Musg IR our investor relationship partners. Let me begin with a brief overview of our financial performances. For nine months period ended December 25, our total revenue stood at 23,837 million reflecting a year on year growth of 37%. Operational EBITDA for the quarter was 3,778 million registering a growth of 55% over the same period last year.
This translates into an EBITDA margin of 15.9% and accepts expansion of 190 basis points year on year. Profit after tax came in at 2,726 million representating a PAT margin of 11.4%. We have a order book of around 9,000 million, Ninety thousand million which is pending with us. As reflected in the numbers, this quarter represents a phase of consolidation as we strengthen execution and prepare for the next phase of accelerated growth. Before I move ahead, I want to reiterate something that is fundamental to us at Keynes which is our deep commitment to our investors and shareholders and our responsibility to deliver outcomes that align with the confidence you place in us over the last few years.
As we understood strategic initiatives with investments in background and and parallel integration and building platforms for the future There have been phases where the translation of strategy into near term outcomes has taken longer in core ems than anticipated. We recognize that this has tested patients, particularly in an environment where expectations are under standingly high. What is important however is that this phase is behind us. The actions required to realign execution with ambition have been taken and the organizations today is operating with far sharper focus, strong discipline and high highest accountability across all levels. I am encouraged by the fact that the building blocks of our long term strategy are now firmly in place and progressing meaningfully.
Our semiconductor journey has moved decisively from intent to execution. The OSAT facility at Sanand is now operational and steadily ramping up. A key area of concern for many stakeholders had been the approval of the FSA under the ISM Framework for Cosset. I am pleased to confirm that this approval is now in place in parallel. Our PCB Manufacturing initiative, a critical element of our backward integration strategy, would significantly strengthen our control and position with customers over the electronics value chain. Unlike most companies in our HDI PCB business, we are strategically focusing on high end, complex and multi layer PCBs for industries such as defense, aerospace, complex industrial segments, strategic electronics.
This requires us to closely work with our customers right from the early design and development stages. This would help us as a group to have an edge and already be well positioned and entrenched with the customers to tap into the full business potential of the PCB manufacturing plus PCB assembly with our strategic investment in the HDI PCB manufacturing. As we enter this next phase of our journey, we are focused on pairing our strategic relationships and leadership with consistent delivery excellence and sustained efficiency improvements. While this is a crucial transitionary phase for the near term, the directions ahead is far clearer.
The execution engine is firmly engaged and we remain confident in our ability to deliver sustained value for our investors and shareholders going forward. With that, I would like to hand over the call to Mr. Jayaram Sampath. Thank you.
Jairam P Sampath — Whole Time Director and Chief Financial Officer
Thank you Rameshji and good afternoon everyone. Thanks for joining this call today as we start the new quarter. I’m happy to share Keynes Technologies financial results for the third quarter of FY26 and I will share with you the highlights of the Same for the nine months ended December 2025, the total revenue stood at about 238,23,837 million, demonstrating a year on year growth of about 37%. Our operating EBITDA for the period came in at about 3,778 million, making it an increase of about 55% year on year and resulting in an ebitda margin of 15.9%, an expansion of 190 basis points over last year.
Profit after tax reached 2,726 million rupees corresponding to a PAT margin of 11.4% growth from the North American market through August. Electronics integration is steadily building, unlocking specialized talent in the high margin segments including RF microwave assemblies, broadening our North American customer footprint and bringing proven capabilities accelerating the global EMS leadership by Synergizing seamlessly with DevoSat for comprehensive end to end value creation at Sanan, as indicated by our Executive Vice Chairman, the FSA approval is received. This milestone meaningfully improves the visibility, especially with respect to capital subsidy from the central and state governments, which reduces uncertainty on cash flows and reinforces confidence in both our roadmap and its financial underpinnings.
The new ECB HDI Multi layer PCB facility coming up at Chennai gives us a strategic advantage. This would mean a business potential of about 15,000 crores for the group from the customers. From our current investment of 15 crores in the HBI PCB manufacturing operations. Assuming the general thumb rule of PCB to PCB of 10% based on our data from the same clients, 1500 crores of PCB revenues and 13,500 crores of EMs revenues are likely at Keynes. We remain committed to to expanding our capabilities and geographic reach through strategic investments amplifying innovation, efficiency, holistic solutions for verticals like aerospace, industrial, automotive and airways.
With this, I complete my initial remarks and would like to place on record my thanks to Access Capital Team for hosting this earnings call. I’d like to thank all the participants for committing their valuable time in attending this call. Now I hand over the proceedings to the Access Capital team to moderate the discussion. Thank you very much.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star n1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question in order to ensure that the management is able to address questions from all the participants in the conference call, please limit your questions to one per participant. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Siddharth Bera from Nomura.
Please go ahead.
Siddhartha Bera
Yeah, thanks for the opportunity. Sir. Sir, first question is on the revenue side. I mean we have consistently sort of been able to get lot of good orders in terms of inflows and order book. But the gap in terms of execution seems to have widened a bit in terms of the growth and the revenues. So can you just talk us through some of these things? How long does the current order book get executed and where have you seen some delays and how do you expect this to translate into revenues in the next few years?
Ramesh Kunhikannan
If you look at it, our order books are not cancelable. These order books we have lead times. But customers don’t take our products unless their entire project is aligned. So in a project when there is a slight alignment problem, then they hold certain inventories. So that is where the catch is. Then there are occasions where we have not yet got approvals from various agencies for starting deliveries and things like that. That is why against our plan there is a shortfall of around, you know, 20%. But otherwise we are still there and there should not be any problem.
This is Ramesh Kannan here.
Siddhartha Bera
Got it sir. And in terms of the execution for the next few years, given this order book, how should we think about the ramp up in revenues?
Jairam P Sampath
So the ramp up in revenues, if you notice the order book monthly order inflow has grown at about 1 1/2% for the quarter. That means the order book itself is growing at about 50%. And this is mainly all the orders that are, they are logged in right now are all EMS orders. There aren’t other orders like PC Board and POSAT etc So those orders will also probably get added. And so you will start seeing the execution pipeline with orders a little better than what are already on hand. And the fundamentals have not changed. Our order book represents typically a 12 month rolling forward basis.
It represents about one and a half years worth of orders which continues to be valid even now. And as we go forward, maybe some more orders will be available for future. So the order book may grow at a rate higher than the actual sales growth because we will start covering the ground for longer period than one and a half years.
Siddhartha Bera
Got it sir. And second question is on the cash flow side.
operator
But can you please rejoin the queue for more questions? There are more participants left in the queue.
Siddhartha Bera
Sure.
operator
Thank you. The next question is from the line of Sonali from Jefferies India. Please go ahead.
Sonali
So, thank you for the opportunity. So my first question is regarding to the working capital. Now we understand that this quarter the working capital was elevated even sequentially about 23 days higher as compared to September 25th. So firstly, what is the reason for this? And secondly, we maintain our guidance of bringing down the net working capital to 85 days by March 26. So could you help us understand exactly what journey or what steps will be embarked upon to bring that down? Because this seems like a sizable shift from139 to 85 days within a quarter.
Jairam P Sampath
Yeah. So Sonaliji, thank you for joining this call and then your session. See, fundamentally the number of days calculation is based on revenues which are generally recognized during that period. So when you go to the end of the year, generally the revenues, especially in the last quarter, are much higher. So in terms of leverage you will get in terms of number of days itself will be significant because last quarter we do almost 35, 40% of our entire sale. So that’s one reason why the number of days would improve on their own. The second thing is some of these, like our executive vice chairman mentioned, most of these orders are custom built orders.
They are bespoke orders and we do acquire materials because especially the environment is a little uncertain. So we, we make sure that we give priority for execution of orders rather than just efficiency alone because the customers depend on us to deliver the PC board. So we sometimes deliberately keep a little higher amount of inventory. And so but that evens out in the last quarter when the, the throughput from the company will be much higher. And so we’ll end up number of days improvement in terms of networking capital will show up just based on inventory alone.
Plus of course we are also taking some steps in the receivables area. And a lot of execution will happen in the fourth quarter, which is in the supply chain, finance based execution. So we will have lower receivables. So your total working capital, net working capital comes from number of days, especially when the denominator is also larger, will improve compared to the intervening quarter. So typically what we expect is about between 70 to 85 days. Last year it was 85 days. We have not made significant improvements because we have to contend with our delivery schedule for customers and be ready to deliver sometimes a little more inefficiently.
But we are getting there in terms of improving this efficiency too. So you can expect about 85 days and better networking capital. And that is fueled by number of days, which is based on larger sales base and then of course inventories which get consumed because we execute to more harshness.
Sonali
So just an extension of this one, you know, the spike this quarter is mainly because of the receivable days, higher receivable days, same as last quarter. So if you could help us understand as to exactly what you have in mind to bring down the receivable days, that would be helpful. And secondly the orders which are deferred. You mentioned in your television interview this morning that there is a deferral in the railways coverage order worth 3 billion, which is why you have brought down your revenue guidance as well. Is Kavach the only order which has been deferred or there have been any more orders which we can expect in Q4? Thank you.
Jairam P Sampath
Yeah, thank you. So there are many customers, we have almost close to 300 plus active customers and of course the top several customers like 25, 30 customers, they bring in the most of the revenue. So obviously something or the other keeps changing. This is a dynamic environment that we work in. So we do have this problem to contend with every quarter. We have got our own method of dealing with it too. So at this point in time it happens to be covered because it’s a safety critical item and we have just made sure that the design that we put out doesn’t need to have any upgrades, etc.
It is actually the design already we have, is approved but we have decided to go for the next revision which will give us better field performance too. So. So that’s the, that’s one reason. And in terms of receivables days, the only way in which there are two ways in which we improve that. One is to discount it at the customer’s limit which is like supply chain finance. And a lot of banks have come forward along with the customers and who have spare limits to allow us to discount. So we are reducing the receivable days by going for a supply chain finance.
The second thing is we are improving also the collection efficiency. And so as we exit this year we hopefully will have a working capital networking capital under control as well as the cash flows should at the operating level turn positive.
Sonali
Thank you sir. And all the best to the team. Thank you.
Jairam P Sampath
Thank you.
operator
Thank you. The next question is from the line of Achal Lohade from Nuvama Institutional Equities. Please go ahead.
Achalkumar Lohade
Yeah. Good afternoon sir. Thank you for the opportunity. Two questions. First, if you could help us with the absolute value of the inventory receivable and payable, please.
Jairam P Sampath
You. You want the actual numbers of.
Achalkumar Lohade
Yeah. Yes, because I’m just wondering, you know how the days are calculated. Are you annualizing the quarter? Are you taking trilling 12 months, you know from the. And whether you’re using one.
Jairam P Sampath
A small note on this because this would take up time just explaining how we calculate. But in terms of number of days at the end of the year it is the entire year’s opening and Closing divided by two. And for the period also it’s opening plus closing divided by two. And if you want we can. It’s there in the public domain. So we. If you want we can send you this calculation actually.
Achalkumar Lohade
Sure. By any chance the December numbers are handy with you, sir? Receivable payable and inventories the absolute value. Yeah.
Jairam P Sampath
Yeah, yeah. Special review report has been made as per the city guidelines. So these are not audited numbers. Just hold on.
Achalkumar Lohade
Sure. Yeah.
Jairam P Sampath
So inventories are at about 1226 crores and receivables added about 1249 crores. And corresponding payables are at about 97970 crores.
Achalkumar Lohade
Understood. And this receivable include the non current receivable as well, right?
Jairam P Sampath
Yeah. Receivables means current period receivables remaining will appear in the other non current assets.
Achalkumar Lohade
How much was that quantum?
Jairam P Sampath
Yeah, that will be about 215 years. Yeah.
Achalkumar Lohade
The second question I had, you know, with respect to the.
operator
Mr. Lohade, but can you please rejoin the queue?
Achalkumar Lohade
Sure. Thank you.
operator
Thank you. The next question is from the line of Renu Bed from IIFL Capital. Please go ahead. Yeah.
Renu Baid
Hi. Good afternoon team. First, can you help us understand what were the numbers of revenues coming in from the nutrient business and how was the revenue growth at ex metering for nine months? FY26 and expected numbers for fiscal 26 overall. And also in terms of our initiative to reduce overall networking capital, what is being done to reduce the long term debtors from the metering business that we were carrying forward for Mistra Meco?
Jairam P Sampath
Yeah, so thank you Ranuji for joining the call. So in terms of revenue, I think last quarter is going to be a busy quarter for us and we’ll probably cross. Including the last quarter for FY26 will cost about 4000 crores minimum and mainly driven by EMS revenues. As you know, the newer projects will take some time to settle down. 300 crores will be metering and maybe about 300 crores will be metering revenues out of this. And see fundamentally the. In terms of receivables reduction we have identified a bank with whom we will do funding that is funding the annuities payments which are sitting in other non current.
Other non current assets. And so, so that the process is on. We had done experimental discounting about 60 odd crores. And the remaining also we will attempt to do that. It has taken a little time, more than what we anticipated. But I think we are getting there. So this one particular bank will help us to at least get rid of this thing. And also you will be happy to note that most of the meeting revenues we are now converting into a device business wherein we don’t have to actually put up these kinds of annuity put up with these kinds of annuity payments.
So going forward the quantum of these payments will be much lower once we are done with the Gujarat project and all the other projects are all based on device model wherein we actually become like an EMS player or ODM player for devices.
Renu Baid
Got it, Got it. And what is the growth x metering for the nine months? 26.
Jairam P Sampath
Sorry, can you repeat what is the.
Renu Baid
What is the revenue growth X of the metering segment or the line of business for nine months?
Jairam P Sampath
FY26 it will be by and large around 40% actually. So as you know the growth has not come in meeting the segment, growth has come in all other segments. So. So we are getting back to our original diversified portfolio. So last year we did about 500, 600 crores of this business and this year not much more than that. So I’m talking about the meeting business. So in terms of growth for the other products is pretty strong. And as we go forward you will see more and more of all the other revenues coming in.
Renu Baid
Got it. So just clarifying again for first half, EMS growth x metering was approximately 10% range and you’re suggesting for nine months FY26 it’s about 40% yoy. Yes, I got the numbers right.
Jairam P Sampath
Yeah, you got the numbers right.
Renu Baid
Sure.
operator
Thank you.
Renu Baid
Thank you.
operator
Thank you. A request to all participants. Please restrict your question to one question per participants. For more questions, please rejoin the queue. The next question is from the line of from acquire capital. Please go ahead.
Sameet Sinha
Yes, thank you very much. My question was primarily longer term. I mean you re inflated your billion dollar guidance for fiscal 28 so basically doubling from where you are right now slightly more than double. Can you break it up for us? You know obviously things have changed a lot in the last nine months since you initially gave guidance. But how much that is the core ems. August smart meters. Can you bridge that for us? Because I’m getting like a number like a 30% organic growth rate. So if you can shed some light on that, what are the key drivers of that growth? Thank you.
Ramesh Kunhikannan
See on the growth what we have projected a billion dollar, we are still sticking on to that because for us from our bare board, from our osat, additional buildings are going to take place. And for us from our ems, which is by the time going to be lot of indigenization taking place because of the government compulsion. So I am very certain and seeing the way the order inflow is happening, we are definitely going to reach there for those numbers and there is no doubt we are having. If you see our order pending on the aerospace, defense, then railways, then segments like Kabach which is taking place.
If you see many Kabach businesses are getting disqualified and Kabach, they are strengthening all the technological needs. So we stand to gain a lot out of that. And I’m very certain we achieving a number of a billion dollar will definitely be achieved.
Sameet Sinha
How much can you specify how much is. Has any projections changed for your sat PCB business? Yeah, so within that context.
Jairam P Sampath
Yeah. Thank you for joining this call. And the question, see essentially we, we don’t, we don’t plan in such a way that you know, we exactly cut to cut planning. That means the total is equal to A plus B plus C. So we do plan. So when we conversationally talk about plans, individual plans are stretched beyond what they ultimately will contribute. So by that what we mean is these two new projects which are OSAT and PC Board, they are in the stage of final implementation of the first phase of factories and our focus right now is to get them going.
So at the minimum you can expect 1500 crores from our OSAT business. Similarly you can expect about thousand crores from our PC Board business. Now beyond this fine tuning at this point in time when they start delivering then we can probably fine tune these when you start managing the order book, etc. Right now we have agreements in place for OSAT 3 clients. So we are looking at at least 2500 crores coming in. That does not mean that the EMS business is not going to grow. It also means that there’ll be similar pressure on EMS business.
And we are just making sure that we don’t over commit and build expectations which we which you do. Even environmental reasons, you know, sometimes don’t get fulfilled. So that’s why you have the plans of A and B and C, that is ems, OSAT and pcb. Individually if you total up it will show you a different picture. But actually speaking there’s an interplay and then at some point in time we’ll call out the actual number, maybe closer to FY28 which is like another 3/4. Hence you’ll have more clarity on how these numbers will be. But what I have told you for both OSAT and pcb, that’s the target given to those companies, those subsidiaries and also the EMS is the balance at the minimum balance.
And then there could Be other additions too. So at this point in time I would not like to comment on how better it can be. But we’ll do that three quarters later. Yeah.
Sameet Sinha
Okay. One clarification. The the order slippage that happened in the third quarter that stayed in the order book number.
operator
But can you please rejoin the que.
Sameet Sinha
Okay, thank you.
operator
Thank you. The next question is from the line of Indrajit Agarwal from clsa. Please go ahead.
Indrajit Agarwal
Hi. Thank you for the chance. Couple of questions. First, the industrial revenues look to have fallen this quarter. Why? Why? If you do a back of them calculation. So what has driven that? And second, just a clarification of the 1700 crore top line expected in 4Q 300 crore is smart metering. Is that correct?
Ramesh Kunhikannan
Come again. Come again. Yeah, in 300.
Jairam P Sampath
300. That is correct.
Ramesh Kunhikannan
700 I did not get.
Jairam P Sampath
Yeah, so that is correct. That is correct. And also the industrial down because of less reliance on smart meter does not mean that we don’t want to deliver those. But it is just that it so happened that other businesses also fired up. So we are getting back to our old let’s say diversified portfolio approach wherein we have almost four to five verticals individually firing up. So hopefully the fourth quarter will have 300 crores of smart meter. But the remaining will come from our traditional businesses which includes railways, aerospace, automotive and other industrial non smart meter based industrial electric vehicles and so on.
Indrajit Agarwal
All right, thank you. I have more questions. I’ll join back.
Jairam P Sampath
Thank you.
operator
The next question is from the line of Praveen Sahai from PL Capital. Please go ahead.
Praveen Sahay
Yeah. Thank you for opportunity. My question is related to the order book of a 9000 crore. Can you give some color on the segment wise? How is the order book? Is there any concentration on the any particular sector?
Ramesh Kunhikannan
No concentration at all. If you see how the pattern is, it is the same way because we supply to customers who are regularly doing production. So we don’t have a concentration of any our. If you see our top customer is not more than even 6% of the overall turnover. And the trend is also like that only going forward also as of now.
Jairam P Sampath
Sure, please do that.
operator
Thank you. The next question is from the line of Manish from Nirmal Bank Securities. Please go ahead.
Manish
Yes sir. Thank you for the opportunity. And I have only one question, sir. Last year also we have guided 3000 crores of revenue and ended 2700 crores. And in the beginning of the year. We guided at 4400. Now we are targeting 4100 crores.
Jairam P Sampath
So when you Say the million dollars revenue. What are the risk we are seeing which will hurt or not to achieve this? So can you elaborate those things? It will be quite helpful to keep the right expectation for the day. No, no, we understand. So we have always while we have guided numbers for any particular period. We also said that ours is not a quarterly basis. It’s not as if the demand goes away and the orders are carried in the order book. And then we plan for these orders anywhere between 6 months to 5 years time frame we get the orders in.
So. So what happens is the orders get rescheduled and on that we don’t have too much of control. While we can prognosticate, we can probably forecast such things as we see current trend. I think there is a fair bit of it’s evened out now it’s come to normalcy. And there are no postponements getting received from major customer groups. So that. That’s why the guidance for quarterly number is not the appropriate way. There are two ways of looking at the company’s performance. One is a leading indicator, other is the lagging indicator. Lagging indicator is the actual billing.
Leading indicator is the order book. In order book health has been good. We are growing at about 50% per annum basis and that the monthly order inflows. So which is what we should consider. And at the end of the year like we said there’s a product which got postponed. And being a new product we don’t want to aggressively push this through. We want to give time to all our designers to put their best foot forward so that we can get a bigger share of the business. Earlier we were talking about 15% of total business of things like coverage.
We might do better if you put a better product in the field. And it’s a matter of just a couple of months. While it may look like a big sales drop but actually speaking no. It is just that we are taking our time to make sure that the correct product is supplied. Correct solution is supplied to the customer. So that we can since future look forward to a bigger share of the market. Thank you sir. All the very best for high quality, exhibition for equality.
Manish
Thank you. Thank you sir. Thank you. Thank you so much.
operator
Thank you. The next question is from the line of Naushat Chaudhary from Aditya Birla Mutual fund. Please go ahead.
Naushad Chaudhary
Hi. Thanks for the opportunity. Sir, two data points I want in in the order book what is the percentage of order book is from the ODM and product engineering. What would be that percentage and what is the absolute revenue of SCRAN August in 3Q.
Jairam P Sampath
Yeah. So the order order book ODM as you know smart meter is our ODM as a device. Smart Meeting solution is an ODM product. So broadly you can take it as about 20% of our order book contains ODM products which are like you may expect better margin products and they help us do better. So that’s the. What was the second question?
Naushad Chaudhary
Sir, Revenue share from the iskra and August in 3Q. Absolute revenue.
Jairam P Sampath
Yeah, yeah. Like Rameshi had pointed out the last quarter we do about 300 crores of metering business. So like we have been always saying that the percentage of, let’s say composition in terms of any particular product category like smart meter or anything else is going to stabilize at a level which is, which does not increase the concentration or reliance on one particular product group. It is just that sometimes every year there is a new product, a new vertical which comes up as a let’s say major influence for growth. So earlier it used to be automotive, then it became electric vehicles.
Then it become smart meter. And next year will be certainly a year of where we do aerospace and railways and so on. So. So from the perspective of percentage of sales for the last quarter you will have about 300 crores of this business coming in which will total up to about between 700, 800 crores of smart metering business for the year.
Naushad Chaudhary
Sure sir. Thank you all the way.
Jairam P Sampath
Thank you.
operator
The next question is from the line of Santosh Seshadri from Avendus Spark. Please go ahead.
Unidentified Participant
Thanks for picking up my questions. My first question is on the smart metering business. So is there any conscious shift away from this from smart metering business given the working capital changes there is that a way to reposition this business probably by utilizing the existing capacity to target export markets company it will be there.
Jairam P Sampath
Yeah. So can you repeat the question? I didn’t fully clear clear about the first part of the question.
Unidentified Participant
Yeah, sure. So my question is whether are you consciously, you know targeting away from the smarting smart metering business, you know, given the, you know, working capital cycle there is that a way to realign this business to target export markets by utilizing the existing capacity? No.
Jairam P Sampath
No. So Mr. Shishad, we are not targeting away from any particular business. We are only changing our role into a device maker which is our primary role. That is ODM solution maker wherein we design the product and we own the software and then we supply the device. We are only saying that we will.
Ramesh Kunhikannan
Be away from the amisp business kind of business. But Meter as a product which we were doing it for last five, six years we are continuing to do, we’ll continue to.
Jairam P Sampath
You can look forward to newer type of measurements and meters etc also in the future once we we complete our trials and testing etc we will come back to and come back to you guys in form.
Unidentified Participant
Thank you. And on the second part of the question is that a way to increase.
operator
But can you please rejoin the queue? Yes, thank you. The next question is from the line of Meet Jain from Motilal Oswal. Please go ahead.
Meet Jain
Hi sir, thank you for the opportunity. Just one question just to understand this Lower growth in 3Q Is there any spillover and it’s effects it’s regarding to which project or which segment of our business.
Jairam P Sampath
Yeah, so like I said, the railway ramp up did not happen and as you know railway we have got two, two different distinct set of products. One is manufacturing, the other is ODM business and in both there’s a bit of a lag in both of them. So we can look forward to this thing coming up in the fourth quarter and quarter later. And like Ramiji said sometime back our orders are not, they are not momentary in nature, they are part of a project. So what happens is this gets postponed. So we don’t want to comment on specific project because there’s a bunch of we make in a year about 6,000 different products for 300 plus customers.
So obviously there is a kind of a mix that keeps going up and down. What we can tell you is that there is no significant, let’s say concentration of something which has happened which is not, which is like a trend. So this is a normal thing that happens in our business every. That’s why we always say US is not a quarterly business. Ours is an order book business. And like I explained earlier, the leading indicator is the order book itself and the lagging indicator is the actual billing. Both are important, I know, but then that’s how to look at this particular product.
So it’s not one specific thing which has got postponed and there’s a bunch of things which got postponed but I’m happy to tell you that all of those orders are still intact and we’ll probably do some of it in quarter four and a lot of it in the next coming year.
Meet Jain
So our guidance of this around 40 billion kind of. So this is implies almost more than 70% growth in our fourth Q numbers. So how comfortable are we in this number? Or this should also include some pillow, right?
Jairam P Sampath
Yes sir. So if you ask me comfort, it is not very comfortable to grow at high rates. But then organization which is growing and come to a stage like we have come, it does involve some little bit of pain but it is doable.
Ramesh Kunhikannan
And also there is a pressure from existing customers. Once they have allotted a vendor code they would not like to have multiple vendors for similar type of business. They like to have larger business share given to one company and then using that they wanted them to get the benefit by giving larger share of business.
Jairam P Sampath
So. So we are geared up to do this numbers that we are talking about. This is how it works. It has worked in the past and it is how this business will continue to work in the short term in the future too.
Meet Jain
Okay. Okay. Thank you so much. I just. You can if you can give the order book next for this closing order book that will be helpful. Thank you.
Jairam P Sampath
Thanks.
operator
Thank you. The next question is from the line of Neil Mehta from Aquarius Securities. Please go ahead.
Neel Mehta
Yes sir. Thank you for the opportunity. Sir. Two questions sir. What will be your nine month FY26 OCF at the consolidated level and what would be nine months of capex and will be very helpful if you can bifurcate the CAPEX number within the core EMS segment, OSAT and PCP project.
Jairam P Sampath
Hi Neil, thanks for joining this call. So fundamentally actually we kind of missed a goal scoring a goal here. We are almost crash positive in the holding company level which has never happened in the past. Lot of effort has been gone in actually behind the scenes you only get to see me and hear me. But actually speaking there are a lot of people working and that is not possible to you know make a big company turn OCF positive in short run. But it is seems to have happened that we are just about minus 55 crores.
We. We could have probably done improved that too. And going forward at consol level we’ll definitely be OCF positive by end of this year. I’m happy to help you with whatever data that is available. You can put it together and you can reach us also separately we can explain to you how this plan is happening. So going forward what will happen is the throughput of sales will increase so your inventories and and also we are putting in place some supply chain finance activities. So receivables also will yield results and there are some outstanding items which we have been talking about is like the other non current assets.
So we will deal with that too. So this year you can expect at console level definitely a significant positive cash flow, operating cash flow and of course financing activities will continue till the new Projects are in place and we are trying to make sure that these monies are invested early so that we can start reaping the benefits of the business early. Also because we want the newer businesses like OSAT and PC Board also to start generating cash and so, so we are mindful of that. So at console level you will start seeing OCF positive and at total company level definitely FY28 you can look forward to a significant OCF in each of the businesses ems, OSAT as well as PC Board.
So you will get positive cash flow in all the three.
Neel Mehta
That’s very helpful. And sir, what will be a nine month capex number and if you can bifurcate it within the EMS segment.
Jairam P Sampath
The EMS segment we are not. We have taken a strategy of improving the asset turnover by debottlenecking our existing investments. So so as far as nine month and the subsequent CapEx for EMS segment is concerned we may not add significant one some small amounts of CapEx we will do to make sure that the debottle of lines are done and we start getting better etc. And round. So for whatever numbers we have committed we are not going to implement anything more any more capex in the EMS business other businesses there is already a DPR. The 1300 crores is the total CAPEX for USAT 1400 crores is the total CAPEX For PC board and you mentioned saying that no FSA has been signed so we are assured of that 50% central and 20% state government subsidies on the allowable CapEx and similarly here also in the PC board also we have got the factory going and we have received written commitment from government on how much state will give and then as part of the other earlier program ECMS program now there is a subsidy available from central government too.
So as far as the capex is concerned it’s a moving number we would like to implement as soon as possible. We don’t want to keep it in nifty’s so you can take broadly. In. This year maybe about another 400 odd crores of capex will be spent and in the coming year we would like to do at least the phase one completely that is that means we’ll spend about cumulatively 1400 crores in the PC board business and then of course the OSAT business the phase one will get completed that is about 17001800 course of CapEx and then we will start adding further CapEx maybe in FY28 and towards the end of FY27. So it’s it’s not a fixed number. As soon as we reach a milestone we would like to implement the capex but it’s not going to.
So to cut the long story short we are not going to come back for any QIP or something. We have adequately funded and most of these businesses start generating cash also by FY28. So we are sure of making sure that we are able to fund without any, you know, dilution of our delivery in other parts of the business. Individually businesses have been funded.
Neel Mehta
Well that’s a very helpful answer. You also mentioned that by the end.
operator
Of FY20 but can you please rejoin the queue?
Neel Mehta
Sure. Thank you.
operator
Thank you. The next question is from the line of Viral Shah from INAM Holdings.
Viral Shah
Hello. Yes, thank you for the opportunity. So just a clarification you guided. For the full year the smart metering business should do around 700 to 800 crores of revenue. So sir, going into the next year how are you looking at this number?
Jairam P Sampath
Yeah. Good morning, Good afternoon. Going forward this number will be going up because there are many AMISPs who will have to buy from people like us, people like Schneider who are supplying us devices. My own peers are also supplying meters as devices. So and the market demand is so high for the next four, five years, year on year there will be a growth of around 30%. Yes, and also, and also one more thing is that like I said in our business there are different streams of businesses which are targeting a little higher than what we have realized. Please don’t go by this quarterly number this year, this year I’m sure the peers and everybody has encountered some headwinds and all that but all of those are getting resolved now and in the coming year you can see growth in smart meter too. But then that will not increase our receivables or any exposure to let’s say long winded receivables. It will be like a device maker and like Rameshi said by itself can grow at about 30.
Where the company will go that certainly larger than that.
Viral Shah
Sure, understood. And, and just my second question is on sir, did you share the YTD capex number? I say. I, I remember you saying 400 crores would be spent in Q4. What would be the spend so far in. In nine months?
Jairam P Sampath
I, I can share that separately. I just kept the actual number done. But the only thing is the. In principle what we are saying is that we would not like to keep this money in the fixed deposits. We’d like to implement on a timeline basis. So as, as soon as the milestone is received. We’ll take the next this thing so that the businesses can start delivering cash flows earlier. So I’d be happy to clarify that offline separately if you want to do an accounting of this exact capex that has happened and so on. So we, we will get you that number.
We’ll publish that for everybody’s benefit. Not a problem surely.
Viral Shah
Thank you.
operator
Thank you. The next question is from the line of Naushat Chaudhary from Aditya Birla Mutual Fund. Please go ahead.
Naushad Chaudhary
Yeah, thanks for the opportunity. Against our clarification on the previous question as our ODM and product engineering order book is 20% of the total overall order book. And does that mean incrementally the margin, gross margin should be in pressure because if I Look at last 3, 4/4 the ODM and product engineering revenue share were quite high versus 20% of current order book.
Jairam P Sampath
Yeah, no, you would not see much difference because the order book contains orders for those that we visibly see. Something like Kavach and those kinds of things are still yet not added to the order book because we need to get the final revision of product in the field first before we can recognize that order. So, so there would be opportunities. The 20 comment was basically the minimum amount of ODM business and that does not, that’s not the limit. Like we said, there are some orders which come in for six months. There are some orders which come in for one year, one and a half year early.
And then some orders are there five years hence two. So you can look forward to this number increasing. And we will see we will also get orders during this January and March and they have to be executed perhaps in the coming year sometime when the new version of this railway product that we are talking about is done, then we would take up the orders of reasons and start recognizing that in the order book too. See, auto book means the moment we say order book that means it’s a commitment for us to deliver and we, we have to make arrangements for the material.
That’s how we actually make our money by giving the orders early to the suppliers and trying to get, you know, the targeted cross margins.
Naushad Chaudhary
Based on the order book number. Should we assume that ODM revenue share should remain around 20% of the overall revenue for next 12 years at least?
Jairam P Sampath
No, it will be higher, sir. The things like covert will start coming in, so they will come in chunks. So it will be higher than that. I’m saying what currently in the order book is the minimum. That’s something committed already. Once the correct version of coverage is there in the field. We’ll start buying material for that and we’ll start recognizing the orders in our order book. So that’s a minimum. It can go up by about 5,7%. 5,7 percentage points going forward and on.
Naushad Chaudhary
On this only sir, your ambition of you know, taking it to 40% by 30. Do you count your offset and PCB into your ODM or do you count that separately? Your EMS business should go to 40% ODM.
Jairam P Sampath
Okay. Now it’s a little tricky to say whether EMS business by itself will only will grow at that number while we are making all the attempts. And if all the products that we are talking about and all the newer ODM and solutions that we are doing, if that is in place, then the EMS itself can give you growth. So in FY28 if you see 1 billion we might be targeting more than that actually while we may deliver 1 billion but we’ll target more than that. So OSAT and PC board businesses also at least minimum Reliance is there.
We are seeing 1500 and about thousand crores from the other business PCB and 1500 from OSAT. But then we might do a little higher than that and we might do a similar number overdo a similar number in EMS2. So, so it, so let me put it this way. While we are targeted for individual businesses will be higher at the console level. We’ll definitely deliver this number of $1 billion. That’s what.
Naushad Chaudhary
I’m sorry. So my question was to our 40ambition of you know, overall business making it ODM and product engineering in that 40 the OSAT and PCB.
Jairam P Sampath
No, no, no, no. OSAT and PCB are different businesses. They are not part of odm. ODM is when we devise the design. There is a part of ODM in OSAT too which is like test engineering and all that. So that is services business. That, that is different. That’s not counted in this 40% target.
Ramesh Kunhikannan
OSAT is similar to our PCB assembly business. PCB is a little more process oriented business.
Jairam P Sampath
Yeah, he is asking about this target of odm. So, so the it’s based on EMS only, not based on other two business. Other we may have to reconstruct the name nomenclature a little bit so that we clarify it better.
Naushad Chaudhary
And one more if I may. On the receivable days target which we are you know indicating through build discounting and all those activities we can bring it down. But everything has a cost. Sir, if we you know go by build discounting, shouldn’t that you know.
operator
But can you please rejoin the queue?
Naushad Chaudhary
Yes, sir. Thank you.
operator
Thank you. The next question is from the line of Aditya Bhartia from Investec. Please go ahead.
Aditya Bhartia
Hi. Good afternoon, sir. So just wanted to clarify on the operating cash flow point. You’re saying that we’ll still be operating cash flow positive for the entire year. Because when I look at both inventories as well as receivables those have gone up very sharply versus last year. So we’ll have to kind of recoup a fair bit of lost round in fourth quarter. So have I understood correctly that operating cash flow positive for the entire year and not just for fourth quarter?
Jairam P Sampath
Yeah, it will be certainly for the fourth quarter because numbers are higher. But our target is consolidated for the whole year we will be operating cash positive.
Aditya Bhartia
Okay. And so the other clarification that I required was on the core business growth that you spoke about of around 40% for nine months. Given that last year we had iskameco only in second half. So 500 crores was essentially split between third quarter and fourth quarter. And this year in first half itself we had done roughly 500 crores. Even if we assume no further revenues came in in third quarter. Even in that case it’s difficult to see how core revenue growth without IFTRA MECO could have been more than 20% in nine months. So where am I getting the calculation wrong?
Jairam P Sampath
You are getting any calculation wrong. It is just that we are executing other orders too. Out of this 9,000 crore order that is executed there on hand, the quantum of smart meter order is about 20%. The remaining pertain to EMS business. So we are getting those businesses also fired up in the fourth quarter. Automotive for instance. There are many new clients. Ev. There are new clients and there are new products. Industrial, non meter based products are there. Then there is railway other than Kavach. Also there are businesses that we are working on. Aerospace orders have been hanging fire for a long time sitting with us. So. So there are orders available at every one of these segments which are actually going to contribute. So we are not dependent just on one particular thing to fire up.
Aditya Bhartia
So that’s a fair point. So this 40% growth number that you gave was for entire year, not for nine months. 40% growth without Islamico.
Jairam P Sampath
Yes sir. That even for the nine months it is probably correct. We reconcile this number and ship it to you.
Aditya Bhartia
Yeah, yeah, sure. Because the nine months it appears that it should be less than 20 or around 20. That’s why I wanted the clarification. Thank you, sir.
Jairam P Sampath
Yeah, yeah, sure.
operator
Thank you. Due to time constraints. That was the last question for today. I now hand the conference over to the management for closing comments. Over to you, sir.
Jairam P Sampath
Yes. So first of all, many thanks to the Access Capital team who have organized this call and all the participants who have taken time off in a working day and so on. And then listen to us. And you have been most helpful in terms of your analysis and looking deeper into our processes and all that. And we hope that next time when we meet, you will probably see an improved delivery of whatever promises that you have seen and whatever expectations that you have. And we as a company also would probably share over next two to three months time frame some more good news about the way business is shaping up, not merely in the existing businesses, but also in the new businesses.
And Ramesh, do you have any final comments? No.
Ramesh Kunhikannan
No. Thank you for participation. And we are still reiterating whatever we have claimed we will be doing.
Jairam P Sampath
Thank you.
Ramesh Kunhikannan
And there will be some hiccups here, there, but overall, you’ll have to look at the longer picture than one reporter.
Jairam P Sampath
Yeah.
Ramesh Kunhikannan
Thank you.
Jairam P Sampath
Thank you very much. Thank you.
operator
Thank you on behalf of Access Capital Limited. That concludes this conference. Thank you for joining us. And you may now disconnect your lines. Thank you.