Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Kaynes Technology India Ltd (NSE: KAYNES) Q4 2026 Earnings Call dated May. 14, 2026
Corporate Participants:
Ramesh Kunhikannan — Executive Chairman
Unidentified Speaker
Muthu Kumar Naren Swami — Managing Director
Analysts:
Nikhil Kandui — Analyst
Viral Shah — Analyst
Renu Baid — Analyst
Unidentified Participant
Sameet Sinha — Analyst
Achalkumar Lohade — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the gains Technology India Limited Q4 and full year 26 earnings conference call hosted by Access Capital Limited. 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 this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference has been recorded.
I now hand the conference over to Mr. Nikhil Kandui from Access Capital. Thank you. And over to you sir.
Nikhil Kandui — Analyst
Thank you. Sapnazi. Good morning everyone. On behalf of Access Capital, I would like to welcome you all to the Q4 and full year FY26 earnings Concord of Keynes Technology India Limited. We have with us management today represented by Mrs. Savita Ramesh, Chairperson, Mr. Ramesh Kunikarnan, Executive Vice Chairman Mr. Muthu Kumar Naren Swami, Managing Director. Participants are requested to note that Mr. Jayaran Sampath, holder and Chief Financial Officer would not be available for the call due to health concerns.
Now I’ll hand over the floor to the management for the opening remarks which will open the floor for Q and A. Thank you. And over to you sir.
Ramesh Kunhikannan — Executive Chairman
Good morning everyone. On behalf of Keynes Technology team I would like to welcome everyone to the earnings call of Q4FY26. Mrs. Savitaramesh, Chairperson of our Board, our Managing Director Dr. Muthu Kumar Narayan Swamy, Mr. Sumit Verma from our investor relationship and Muft IR our investor relation partner are with us today. Let me begin this with a brief of overview of our financial performance. For the consolidated year FY26 period. Our total revenue stood at 3620
Unidentified Speaker
3036. 3626.4 crores. Reflecting a year on year growth of
Ramesh Kunhikannan — Executive Chairman
33.2%. Our EBITDA for the period FY26 was 5741 million registering a growth of 39.8% over the same period last year. This translates into an ebitda margin of 15.8% for FY22. While profit after tax came in at INR 3639 million representing a BAT margin of 10% for year FY26. I am also pleased to share that during FY26 our Mysore facility achieved a significant milestone by crossing INR 10,000 million in revenue. This achievement reflects not only the scale and maturity that the unit has attained over the years but also strong customer confidence, execution capability and manufacturing depth that gain has built across its operations.
This quarter and the full year reflect a period of consolidation as we continue to strengthen execution capabilities and prepare the company for the next phase of growth. Over the last few quarters, our focus has remained on driving consistent improvement in top line growth while maintaining healthy bottom line market. That said, our near term top line performance did not fully meet market expectations. Sorry to
Operator
Interrupt in between sir, your voice was upheaval. Little bit
Ramesh Kunhikannan — Executive Chairman
Near term top line performance did not fully meet market expectations primarily due to geopolitical disruption, especially the West Asia conflict which led to last minute customer deferment, supply chain delays and project timing shift. Similar to the earlier Russia Ukraine situation. These events created temporary uncertainty in execution timelines even though the underlying demand environment remains strong. Since our revenue are closely linked to customer project readiness and approval cycles, some revenue recognition has shifted despite the orders remaining valid and executable.
While these factors have had a temporary impact on near term revenue timing, our strategic direction, customer engagement and long term growth roadmap remains firmly aligned and Keynes has continued to demonstrate excellence and execution strength. Through this period, the company has not seen a structural deterioration in demand, order book quality or customer relevance. Our order book remains healthy, diversified and non cancelable in nature and we continue to see strong engagement across multiple strategic sectors.
Over the last few years, gains has grown rapidly and in a relatively short period of time, that growth has created significant expectations from investors, customers, partners and suppliers. We respect those expectations. We are conscious that when a company scales at the pace we have scaled, execution has to mature equally fast. That journey of institutional strengthening is underway and we remain fully committed to improving consistency, predictability and delivery against the confidence placed in us.
There has been some top management restructuring and role realignment in this phase. Such transactions naturally take some time to settle, particularly in an organization that is expanding across multiple technologies, manufacturing and strategic platform simultaneously. However, these changes are intended to sharpen accountability, deepen execution ownership and build a resilient operating architecture for the next phase of. Next phase of scale. The organization is adapting quickly and the leadership team is fully aligned to match with the market expectations in core ems as well.
Our diversification strategy continues to hold strong. As discussed in the earnings call, growth is increasingly broad based across automotive, ev, industrial, aerospace and railway related segments with lower dependence on any single business line. This diversified vertical mix gives us confidence that near term volatility is one area will not define the long term trajectory of the company. I am pleased by the trajectory of our two new growth engines in OSAT. Unit one is fully operational and unit two is in commercialization by Q2 26 these business strengthens gains further by deepening backward integration, adding technology depth and expanding our presence in high value manufacturing.
In OSAT, the order outlook for both the current year and the medium term remains strong with revenue visibility of over INR 25,000 million over the next five years. Similarly in PCB we continue to see a robust and confirmed demand pipeline for the next five years with several customers already indicating requirement for additional capacity expansion. One important point that differs acknowledgement is that certain areas where market expectations moved ahead of actual delivery were driven not only by execution facing but also by the border operational complexities associated with managing the core EMS business amid global uncertainties while simultaneously scaling new strategic platforms such as OSAT and pcb.
Going forward our focus remains clear improving execution in ems, moving towards product driven revenues, ramping up PCB and OSAT with discipline and delivering growth with stronger top line and bottom line growth and capital efficiencies. We value the trust placed in us and recognize that credibility is built through consistent delivery. With that, I would like to hand over the call to Dr. Muthu Kumar, managing Director of Finstechnology over to you Muthu Kumar. Thank you Mr. Ramesh Good morning ladies and gentlemen and thank you for taking time to join with us today.
It’s privileged to address all of you as we continue our journey of building CANES into a globally recognized technology driven manufacturing enterprise. Under the leadership and vision of our Executive Vice Chairman Mrs. Amesh Khanan Keynes has built a strong foundation of customer trust, execution, excellence and sustainable growth. Over the last few quarters the company has continued to deliver strong financial and operational performance supported by a healthy order book, increasing the customer engagement and growing presence across all the high value sectors.
For Q4FY26 our total revenue stood at 12,426 million reflecting a year on year growth of 26%. For this quarter and you know on overall for the year we grown at 33% while the operational EBITDA for Q4.26 came up to 1937 million translating into an EBITDA margin of 15.6% reflecting our continued operational resilience and scale expansion. The profit after tax for the quarter stood at 912 million. Our debt to equity ratio stood at approximately 0.2 in FY26 reflecting a prudent disciplined capital structure even during the phase of significant expansion.
At the same time our organization is able to give earning per share. Basic has grown from INR 30 in FY24 to 54.9 in FY26 reflecting the company’s consistent growth trajectory and long term value creation for all stakeholders. We realize our working capital day stood at around 122 days in FY26 primarily reflecting the business model requirements of the smart meter segment which has different working capital cycle when compared to the core EMS business. On a like to like basis, we would like to bring it to your attention that the core EMS business has demonstrated a significant improvement in the efficiency as committed earlier with the working capital days reducing from 83 days in FY24 to 53 days in FY26.
We remain focused on further strengthening the operational efficiencies and improving project execution cycles and optimizing working capital and we continue to scale the business. One of the defining milestones in the journey has been the inauguration of the OSAT facility at Sanon by our honorable Prime Minister Shree Narendra Modi. There is not only the matter of pride for Keynes but also a strong validation of our company’s growing role in India’s semiconductor and electronic manufacturing ecosystem.
What Keynes has achieved in relatively a short span of time reflects the strength of our vision, execution capability and the commitment to our teams across the organization. As we enter the next phase of our evolution, our focus will continue to be on strengthening the foundation and scaling the organization with a greater speed, agility, innovation and operational excellence. Keynes today stands at a very important inflection point. The industry is evolving rapidly, customer expectations are keeping more demanding and our global manufacturing landscape is increasingly shifting towards high value technology intensive solutions.
The environment of our aspiration is not only to grow in scale but also significantly enhance quality and value of our business. One of our key strategic priorities in the next few years will be to accelerate the transition from a traditional EMS led organization to a differentiated ESDM and product driven enterprise. A critical pillar for this transformation will be strengthening our new product development capabilities. We believe that innovation led manufacturing will define our future of the industry and our goal is to steadily increase the contribution of NPD LED and value added solutions to nearly 30% of the total revenue in the coming years.
To achieve this we are investing on our engineering capabilities, customer co development model, a digital infrastructure and an R and D infrastructure and an integrated product realization platform that allows us to engage in the early phases of the customer product development. This will not only improve the margins of the company but also the customer’s confidence and position. Keynes as a strategic technology partner and original design manufacturing company rather than a manufacturing service provider.
At the same time, operational excellence will remain at the Core of our execution philosophy. As we scale consistently in quality delivery, productivity and reliability becomes even more critical. Our focus will therefore be on building deeply a process driven organization powered by enterprise wide digital systems, automation and data driven decision making. Quality in particular will be defining theme for us going forward as we all know that quality is no more a differentiator. The basic expectation what differentiates the company now is the ability to deliver superior quality consistently with the speed at a competitive cost and reliability.
And of course intelligence. With artificial intelligence coming in, we are introducing artificial intelligence in various processes to make sure that we are ahead of the market. At Keynes, we are committed to building a culture where quality is embedded into every process, every product and every decision across the organization. We’re also driving the company initiatives with total predictive maintenance, advanced quality Systems Industry 4.0 integration and two of our plans have already done the kickoff and moving into the next phase of implementation.
These initiatives across the organization are not just about improving the manufacturing metrics. These are about creating a culture of ownership, discipline, a continuous improvement and a customer centric across all our facilities. As the manufacturing ecosystem become more competitive globally, automation and digital transformation will become essential enablers to long term competition. Our focus will therefore continue to be on improving productivity, reducing process variability, centering supply chain integration and enhancing execution.
Another important change is the quality and diversity of experience we continue to bring in our leadership and governing structure. Our board today brings together in expertise across technology, finance, law, engineering, manufacturing, automotive and electronic and strategic operations leaders such as Mr. S.G. Murali who brings deep financial leadership experience including his tenure at the group CFO and TVS Motor Company. Mr. Koshi Alexander who has extensive experience in finance and public sector electronics including serving as Director Finance at Bharat Electronics Limited bring significant strategic operational depth in the organization.
With Purnima Ranganath with extensive legal and governance experience, the guiding philosophy principles in people development and in our legal framework. Dr. M. Manadurai with his deep experience from India space and technology missions is joining our board will strengthen us to take it to the next levels of technological upgradation. Mr. Rajesh Mittal with a strong expertise in engineering and automotive operations is joining our board and I’m sure that it will strengthen our supply chain capabilities and penetrating and getting into the more into an automotive operation.
Their guidance along with addition of strong leadership in various functions in the Canes continues its journey towards becoming a stronger design led, technology focused and a box built solution company. Most importantly, none of this is possible without our people. At Keynes we strongly believe that people define our strength and future of the organization. We’ll continue to invest in leadership development, capability building and creating opportunities for our team to innovate, grow and lead.
At the same time, we are consciously building a strong pipeline of future leaders who can carry forward their values, culture and long term vision of the organization. As we continue to scale in the Vikshit Bharat era, our focus remains very clear. A customer focus, innovation and quality and people. These four pillars continues to guide our Keynes journey as we build Keynes into a world class manufacturing organization that will be the new benchmark for the industry. With this commitment from our teams, the trust from our customers and sense of our strategic direction, I’m confident that Keynes will continue to play a defining role in shaping the future of Indian manufacturing in the global stage.
With this I complete my initial remarks and would like to thank Axis Capital for hosting this earning call. Would also like to thank all the participants for joining us today and I’ll hand it over to the Axis Capital and looking forward to answer your queries. Once again, thank you very much for joining. Taking time to join this call. Over to you Access Capital Team.
Operator
Shall we open the floor for question and answer sir?
Ramesh Kunhikannan — Executive Chairman
Yes please.
Questions and Answers:
Operator
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star then one on the Touchstone telephone. If you wish to remove yourself from the question queue you may press star and two Participants you are requested to use handswip while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. A reminder to all you may press star N1 to ask a question. We will take the first question from the line of Meral Shah from Enam Holdings.
Please go ahead.
Viral Shah
Yes, thank you for the opportunity sir. So my first question is on guidance sir at the start, at the start of the year sir, we had guided that we are looking to close the year with revenues of 4,500 crores which was subsequently toned down to 4,000 crores and we end the year with close to 3,600 crores of revenue, sir. Sir, so how should as investors we look at this guidance and what is the sanctity of the guidance that we are providing? Sir? Because there is a very vast variance between what was expected versus what is delivered.
Sir,
Ramesh Kunhikannan
Thank you very much for asking this question. We fully understand and appreciate your testing. We did an aggressive offline growth in the year based on the order book and we got the electrification of the vehicle and of course the government project where we are working is going to be at the faster pace, you know, giving a guidance of 4,500 crores is almost 55% growth over the previous year. In the third quarter I think we have turned out to be about 4,000 because of the few delays and one of the largest electric vehicle OEM manufacturers has completely dropped by about 90% of the revenue wherein we were the single supplier which has dropped our numbers.
But we were quite confident in the last quarter of getting two government orders where the products have been done and the product testings have been approved is going to be done but there is a delayed project. I think these are the two things that has put us. While we have delivered about 33% growth in revenue and 39% growth in the bottom line, we sincerely understand and appreciate that the guidance what we have given we could not meet. Having said that, I think while we are looking at strengthening our execution capability agility in manufacturing and delivering the product on time, there are certain cases where it’s beyond our situation where the customer’s pull and the drive it makes us to hit the numbers.
And that is one of the reason that why we chose to say this time that we’ll be outgrowing the market and we’ll be doubling the market growth so that our penetration will be much more. Hope we have answered your questions but we fully understand and we are. We are aware of the question what you’re asking and the implications of it.
Viral Shah
Sir, I appreciate this answer but sir, 75 days into the quarter we would be aware of how the quarter would be looking like. But the management comes on the television and gives holds on to the guidance. Additionally, even apart from the PNL side the guidance was also that we would be just about marginal next on the OCM side. Sir. Sir, both of these guidance 75 days into the quarter is actually a bit concerning when the actual numbers reported would be way off. Sir, how do you look at that? Sir,
Ramesh Kunhikannan
I. I think the intent behind committing those numbers in the last quarter sitting that is we have based on the product samples that have been approved, we went ahead and started our. Sorry for the interruption. Can you hear me well?
Viral Shah
Yes sir.
Ramesh Kunhikannan
Yeah. See what happened is while we have got the indications of an envoy from the customer we started making the ordering the material and in fact if you ask us we have started even the manufacturing pre manufacturing activities of this which gave us a confidence that yes, we’ll be able to deliver. If you see more than 50% of the manufacturing of those activities also has been on the pipeline. As I said, it is not a denied order. It is a delayed order. We sincerely apology for that this has happened.
But I’m sure that you would all trust with me that it is beyond our control. And going forward we will take this input in terms of committing for the future numbers we are committing for our growth based on what market can pull in. And one of the reasons that you will see that going forward we will be better is like whenever executive Vice chairman said our dependency on every vertical we are bringing it down. So we are taking into many other verticals so that the impact on one business will not have an overall impact.
But we will definitely keep this in mind and make sure that in future we will be better prepared for mitigating these risks.
Viral Shah
The fair enough our
Ramesh Kunhikannan
Type of business. We also depend on customer inspection accepting it. I hope you all appreciate that.
Viral Shah
Sure sir. Which is a fair enough point for the PNL side of you. But sir, OCF 600 crores of negative. I think that is a bigger disappointment. Especially when you. You kind of guide that you will be just about a neutral or slightly negative sir. So you would have known that and said why have we not been able to turn that around sir.
Ramesh Kunhikannan
Okay, I think it’s a fair question. The operational cash flow. I think there was a little maybe misunderstanding. I was also in the call during the time on the 2 cash flow that we are talking as a standalone EMS business. I wanted to bring it to all your notice that and a standalone EMS business our cash flow was 250 crore positive when compared to 66 crores last year. However, as a consolidation entry see 65% of our revenue today comes from EMS business where we are cash flow positive. The metering business which is a specific model.
This is the first full year we have taken and we are getting matured into this business. One of the things that happens is you know the business model is a strategic acquisition for Cane in order to make ourselves getting mature towards the product based company rather than an EMS assembly company. I just want to bring it to all your notice that prior to occurring metering company we have been supplying them the EMS business. So the entire revenue is not new to us. At least 50% of the revenue as an EMS business we have been supplying there.
But when we did a unique acquisition where it is not only making the meter but also installing the meter and also maintaining the operation maintenance of providing the software. We are the only company which has got a unique combination of all the three. And that’s the reason for why Keynes has committed and moved into this acquisition which has Definitely brought back the good amount of insights on product development as a converting ourselves Keynes into a product company and putting it maturing into launching no more new products in that segment like whether it be a water meter or gas meter, we are on the pipeline.
Having said that, we should have anticipated this. Well, there were a lot of government delays and the payment comes based on the installation with various activities that the various state governments releasing the tender for supplying the meter, installing the meter, going to those houses and installing. There was a little delay. I would request you all to appreciate that as a standalone GMS business our networking capital has come from from 64 days to 54 days. However the total number has gone up.
Because of this, 65% of our revenue comes from EMS business where our receivables is only 35% whereas 25% of the business comes from EMS where the receivables is 67%. We have worked out a strategy as a management team on how to mitigate this. We’ve been working with various organization to see that how this model can be mitigated. Rest assured ladies and gentlemen, we’ll be able to bring it back at least to a level of reduction. I think the influx point has stopped and we’ll come into the reduction and we will come back in three quarters with the positive results on specific this entity.
But on EMS business we have demonstrated our ability of how to bring back the next days by both working on supplier side and also on the customer side and brought it back. The numbers are available in the list. I think you can see from our opening receivables of about 399 crores in the EMS business by end of the year. Sorry, 379 crores. By the end of the year we have come to 399 crores. Even though we grown the EMS business at 30% our outstanding or receivables have gone up only by 20 crores which clearly shows how we could able to manage the business efficiently.
Ladies and gentlemen, trust us, in the years to come we will manage the metering business and demonstrate our ability to manage the product development which is going to be a strategic shift in the Keynes organization from moving an EMS provider to a product provider and at the same time manage this working capital cash flow efficiently. Added to that, if you all recollect we were very clear our main EMS business we will be cash flow positive this year whereas the entire company we will not be able to do that.
So please appreciate we have done and honored what we have said. So from 65 crores I want to bring it your attention of a cash flow positive EMS business. From last year we have migrated to 250crores plus which is a significant improvement in a year where there were a lot of uncertainties including the escalations at one end, supply chain disruption in the last quarter and of course customer pulling of the material. And our customers and customers and suppliers have really supported Keynes initiative in taking this commitment and moving forward.
Operator
Thank you. We will take the next question from the line of Nitin Aroda from Axis Mutual. Please go ahead.
Muthu Kumar Naren Swami
Hi, just. I think the call is all over the place. So going forward given I think we are not giving guidance in the same business. When you articulated it’s a customer driven business and when you’re saying demand is very good, what is stopping you of giving you the guidance? I mean is it you see more deterioration in working capital which will erode the revenue growth from here on also. So we are very confused if you can throw some light how the direction of revenue and working capital improvement will happen because it has not happened so far and you’re not giving any guidance.
So it’s very confusing for the investors because if you can throw on three aspects of both revenue and working capital.
Ramesh Kunhikannan
Okay, thanks for asking this and giving us an opportunity to explain our position. It is not that we are not giving a guidance for the revenue, we are not only giving guidance for the revenue numbers. When we are saying that the industry in India the GDP growth is at 8%. The EMS pace where we are playing has grown at about 18% last year or expected to grow in this year 16 to 18%. We say we’ll outgrow the market, we’ll penetrate into each and every segment and we’ll double the growth of market growth is what the commitment that we have done.
I’m sure that we’ll be able to do that. But exactly we don’t want to put the number because for example the December prediction of automotive industry was a mid double digit growth for this year. Whereas the latest prediction says it will be a single digit higher or lower double digit which may impact onto the offtake of the product while we are trying to mitigate it by getting into the various verticals. Like in fact we are going to be getting into a defense in spring and of course space business another thing.
But at the same time we want to be little cautious because the market is in a highly volatile condition. Nothing do with our ability to deliver. Our capacity and capabilities is always available. So we are committing doubling the growth of market growth which we will be definitely coming back in every quarter to say that how the market has grown and how we have grown. You can rest assured that Keynes will continue to focus on delivery efficiency and meeting the customer demands and of course making the investors calculation.
Sorry if we have made you to put it in a confusing state by not giving the exact number. Having given the exact number, we find that there are a lot of uncertainties which is beyond our control. And rather than coming and telling it and apologetically saying that it is because of this reason, we don’t want to be providing a reason but we wanted to be a solution provider in this that is on the first revenue. In terms of working capital management, we will continue to be efficient on this area. You can rest assured that paint standalone the EMS business will continue to be cash positive and we will be improving it at least by about eight to 10 days in the years to come in this segment.
Having said that, the metering business which is completed the full year. We started the metering business which about 521 crores. Sorry, 231. One minute. Sorry. From the receivables 521 crores to 1300 crores. We are putting our execution team to go and install it in every area. We will reverse the trend. That’s what we can say. But we have a very clear roadmap of bringing it back in three quarters to track. And the metering business also. We are also working out various business the current business models.
I’m sure that most of you are aware the business model of metering business is completely different from the EMS business. These are all some of the things. The positive thing is getting into the product, a new technology and of course an expanded margin product. And the other side is on the working capital management. But rest assured that gains management has got the capability and we will ensure that we reverse the trend in this quarter and quarter after quarter. You will see within three quarters of this year we have a very clear strategy on how we are going to come out of this cash flow issue in the metering business.
And ladies and gentlemen, at this point in time we want to bring it to your notice. The working capital management will not have any impact on our growth trajectory or in terms of our execution capability. Our order books continue to be stronger at 9,000 crore plus. What we have been talking about in executing the new product in 12 months to 18 months today our ability to launch the product in nine months. The product, full product has come because of the acquisition of new technology and new teams that we have got a product technology thing you will be able to see and you will be able to hear more and more of our products launched in the electric vehicle space in every spectrum that we are going to work in wherein you will see that it gives an ability to launch the product and of course improve the margin.
We are also committing 30% of our revenue in the years to come will come from the new products. Which means it gives us an opportunity to leverage our technological excellence at the same time getting into a better product, standardization of the product to bring working capital, management and of course expanding the margins. Our idea was not to not to give a guidance. What we are trying to tell is we will better our growth of this year next year. We do not want to attach a number to that. That is the only confusion I think.
I hope I have clarified
Muthu Kumar Naren Swami
Sir. I don’t want a number. The question was more what will change suddenly which will get your 600 crore negative cash to break even. Business remains the same. Even Escaram Echo you moves out which I think you have two more to go. Correct me if I’m wrong the rest of the business is not negative working capital. So what will take this 600 crores? My was the question
Ramesh Kunhikannan
The 600 crores by end of the third quarter will come to around. We will try to work on to positive but we will at least 70 to 80% of this will come down for sure and by end of the year we will be positive. We have a very clear strategy quarter on quarter. I’m sure that the next yearnings call when we are going to be together because it’s almost 40 videos have gone in this quarter and the team is working on the put this in.
Muthu Kumar Naren Swami
Thank you very much sir. Thanks.
Ramesh Kunhikannan
We took little time on this business because more of a product is what we were focusing and we didn’t anticipate this much of delay in the execution of the erection commissioning.
Operator
Thank you. We will take the next question from the line of Renu Bed Bugalia from IFL Capital. Please go ahead.
Renu Baid
Yeah. Hi, good morning team. A few questions from my side. First if you can help quantify what was the share of metering related revenues in our Consol revenues for fiscal 26 versus 25 and how does the growth look ex metering portfolio? That’s first question. How are we scaling up in terms of new applications on the power supplies and other aspects into including EVs within the industrial business. Third is if you can share updates in terms of ramp up of the rail portfolio with respect to covered solutions and do we see any headwinds on government offtake given that government finances this year are likely to be under stress?
Next.
Ramesh Kunhikannan
Thank you very much for listing it out. I will answer the first two questions. One is of the metering business. Our the metering business contribution to our total revenue is around 20 to 25%. Okay. Having said that, it is not that the entire 25% of the revenue has come because of the metering business. I’m sure that you would all be able to recollect that we have been supplying the components and the PCBs for this metering business which is around 60% of the revenue has already been coming. That’s why when people say or your growth is is it only because of metering business?
60% of this is our EMS business which we have done and we have added the box build software and O and M business onto this. So the growth is like that in that business. The second question that you ask is yes, the company is now launching the product for EV segment and you can see our growth in the EV segment this year is about 28% growth despite the fact that one of our largest customers in two wheelers has dropped the production significantly by about 90%. That means had that been in full our penetration would have been much higher.
This is one segment which is growing which is continued to grow. And rather than supplying only pcb, we’ll start working on the assemblies and products which will make our value additions much higher every segment. As we said, we are going to diversify to make sure that our impact is because of one business will not be there. Having talked about the first two of your questions, I will leave it to Executive Vice Chairman to talk about our progress what we are doing in railway business.
Unidentified Speaker
Regarding rail business, our Kavat product has received the initial approvals and we have got the trial orders. We are in
Ramesh Kunhikannan
The execution stage. We have done field survey and everything. We are expecting this year in the first half to complete all approvals and the second half to get large portion of orders execution wise. Yes, we will have opening order in a big number but a small portion will be out of that completed. So this is the status as far as Kavach is concerned. We are developing one another two more products for the global requirement for one of the OEMs in the rail sector that also so rail business I am expecting this year to grow by around 2025% because of these coming in and the margins are going to be north of current 30% plus.
I hope I have answered.
Operator
Thank you. We will Take the next question from the line of Amber Singhania from Dipon India amc. Please go ahead.
Unidentified Speaker
Yeah, first thing is if you can share details about your metering subsidiary. What was the revenue for the full year? EBITDA and what is the total receivable in this subsidiary?
Ramesh Kunhikannan
You are asking about the metering subsidiary?
Unidentified Speaker
Yes,
Ramesh Kunhikannan
Hello. Can you repeat the question? Sorry, can you repeat the question?
Unidentified Speaker
The meeting subsidiary, what is the revenue? EBITDA and receivables at the end of the year. For the full year.
Ramesh Kunhikannan
Okay. Meeting subsidiary. Sir, as far as the metering subsidiary is concerned out of the total 3626 crores the meterings we normally don’t. Okay. It’s a subsidy. It’s coming. It’s about 971 crores. With a metering subsidiaries revenue
Unidentified Speaker
Which
Ramesh Kunhikannan
Is 24 to 24%. The metering revenue is at 971 crores. Out of the total 3,626 crores revenue.
Unidentified Speaker
Yeah. And how much is the receivable date in this.
Ramesh Kunhikannan
Okay. On the receivables of the grid the metering business is about 1365 crores. Including the. In the total revenue, the receivables on this business it is more than that because the first two quarters of this year we could not able to execute the. While the meterings we are supplied, the installation got hugely delayed. Particularly in the rural states where they. Sorry, rural towns where the government has given business. Our pickup has happened only in the last quarter. Where our inflation is going, it’s going to take about one or two quarters for us to complete the installation.
That is why I have committed that it will take up to the third quarter for us to complete it. I’m sure that this is not only with us, it’s overall the ecosystem of this is creating a problem. But we have created a pipeline of team and pipeline of equipment to make sure that these installations take place on time.
Unidentified Speaker
The availability of people, the
Ramesh Kunhikannan
Availability of the location is a concern.
Unidentified Speaker
Just a clarification there if I’m correct. Last quarter con call you mentioned that metering subsidiary receivable was somewhere around 1100 odd crore. And you were supposed to receive 250 odd crore by securitization itself. Whereas when we are seeing now it has gone up. If you can help me understand, was there any securitization done? If not, why not? Because you have committed that it is almost done during the last con call. And secondly, what has led to this kind of increase in receivables? On the.
Ramesh Kunhikannan
See this securitization we have just started with one bank and the first lot where the installation is completed Banks have started accepting it. Bank would like to have the first month complete building and realization. So we have the sanctions everything. But we have only discounted to around 40 crores or so.
Unidentified Speaker
Because I think this exactly same commercial was there last quarter. So there is no progress in this quarter at all?
Ramesh Kunhikannan
No, no. Apart from last last time this quarter again we have discounted some 40 crores. See the installation and all reports after that the utilization takes place and they are willing to disperse the money. Our key challenge is on the installation now which is what we are working with the various organization public sector enterprises and the end customers and the PC respective CHESSCOM or Discom to see that how we can speed it up. We understand your concern of why the revenue has in the last quarter is 380crores.
We almost added this as this basically because of the delay and on the installation.
Unidentified Speaker
Just wanted a better clarity in this business going forward. Are we going to continue execute this kind of revenue with this kind of working capital? If not, then what is the factor which are giving you confidence that you will be able to reduce this working capital in this business? And if you can, you can quantify something with the concrete steps it will be helpful for us to understand.
Unidentified Participant
No, no, no.
Ramesh Kunhikannan
In the past we have already agreed we are not going to take any orders like this. We are only going to take meter orders and we will be supplying to the
Unidentified Speaker
Project teams who are taken up orders for the entire execution like that. So further it will be our EMS component only we’ll be taking order.
Ramesh Kunhikannan
The current business what we are taking is about 35 quarters.
Unidentified Speaker
We have the company. Yeah,
Ramesh Kunhikannan
35 lakh meters is what we have taken which is the order that is being executed and all. But ladies and gentlemen, I think we need to. While I fully understand working capital is one of the key concerns and we are working on this has brought in lot of other strategic advantage to the organization in terms of our product development capability. A software capability which no other EMS business has. And on top of this our ability to execute the projects like this. I think these are the strengths going forward is going to come us and we all know that this comes with a better margin than the standard EMS product.
The companies when it’s going to migrate from a service provider to a product company. You know the benefits of this. When we are going to be in a B2C our brand is going to get sent in. The people are going to look for our brand and this is going to be a. As I said, it’s going to have a lot of strategic advantage. Having said that, you can rest assured that we will come back with a quarterly progress on this and see how last year, yes, every four quarters we have added up the number Almost more than 50% of the revenue that has come come.
But now that we have created an ecosystem of our ability to install the meters and the location we will get into it. And you all know that when we are doing it with the public sector enterprises and doing this the process is taking little more time than in normally a tier 1 OEM or other business. But having understood the business we are pretty confident we are going to come and like our executive vice chairman said will also be cautious of taking such a huge business of 3540 lakhs on rather than on this model to only just applying a metering supplies and giving it to an FPV company where they will do the installation erection commission.
Hope that answers your question but it is a very very valid question.
Operator
Thank you. We will take the next question from the line of Dhaval Somaya from Access Mutual Fund. Please go ahead.
Unidentified Participant
Good morning. I have two questions. Firstly, this 35 lakh odd meters is broadly a 1400 odd crore order. So how many meters or if you can give some quantum in terms of how many meters are pending from this order. And secondly like you highlighted the smart meter business this year did roughly 971 odd crores of top line. That implies that still there is another contribution of 740 odd crores from subsidiaries. What is the breakup of that? If you can help us understand.
Ramesh Kunhikannan
Okay sir, in terms of the metering we will take another two to three months to complete the entire pending order of this. And which is what we are also putting into our calculator
Unidentified Speaker
Extension of this order as per the condition it may or may not come. That is another three, three and a half to four lakhs.
Ramesh Kunhikannan
But that is a. We are pretty confident in three quarters from now we’ll be able to finish off this and the new businesses will be in a different model. That is on the metering business and the other subsidiary which is very prominent is the kemp which is exactly the EMS business only. And we are considering this EMS business and there almost if you see our EMS receivable the start of the year we started with 379 crores. The EMS revenue. I will just talk about it. The EMS revenue is about 2,655 crores with 442 crores in the quarter one, 683 in quarter two, 667 in quarter three and 862 in quarter four.
We started the year with 379 crores of receivables and we ended up the year with. We went up. We went up to 466 in the quarter two and 437 in the quarter three. And we brought it down to 399 in the quarter four which sees that we have exceeded only by 20 crores for a revenue growth of about 26%. Which means our prudent management of receivables and our shorter lead time. Actually basically it is about how fast you can manufacture and ship it out of the plant and ensure that it gets into the factory and start consumed by the customer out of the 2655 crore.
For the other question one is executive I chairman answered KMPL. There are two foreign entities which put together on an average about 300.
Unidentified Speaker
But they are also EMS company.
Ramesh Kunhikannan
They are also EMS company in the north America and Canada.
Unidentified Participant
Okay, understood. Thank you.
Ramesh Kunhikannan
Thank you very much for giving us an opportunity to clarify this question. I fully understand your concerns on this. But the business model of the metering business is completely different from the EMS space. While it is putting a stress onto the working capital management, ladies and gentlemen, believe us, it gives us an enormous ability to do the product development launch at the time not only with the product development but building our capability in erection commissioning on these type of projects.
And of course the software which is going to really help us not only for this contract but beyond this contract. The money is going to come back for a long term for us
Viral Shah
Till the meter is up and running.
Operator
Thank you. We will take the next question from the line of Jigarsha from HSBC Mutual fund. Please go ahead.
Unidentified Participant
Yeah. Hi sir. Thank you for the opportunity and sorry to harp on it again and again on smart meter business but the communication from your side seems to be very off since last 2 3/4 on smart meter business and has created a lot of confusion. And if you see, you know, your commentary has been that, you know, this year smart meter business FY26 would be 800 crores but it has come at, you know, almost thousand crores. And going forward you will not be taking amis business, you know. And hence receivables which is current but not due standing in other current assets or non current assets which is around 250 crore will come down.
So that has not also done. In fact revenue has increased, receivables have increased and in FY27 I would like to know that you know from Ms. Model how much will be you know revenue and you know incremental other current assets but not due, you know incremental. What will be the situation there?
Ramesh Kunhikannan
Okay sir, I just wanted to let you know while we were at 800 crores when we grabbed when we got an opportunity to grab to offset some of the business that there was a delay in automotive business or there is delay in something. We grabbed every opportunity and that is where we are grown in this for the next year. While the 971 crores of sales what we did this year in absolute numbers we may remain same or slightly up or down. That’s not a question. But almost 50% of the business will be in the old model and rest will come in the new model.
As executive vice chairman said we have to finish some more and there is a contract like that. If the government is going to ask for more we may have to continue to supply. So we will be definitely taking prudent. But rest assured we have worked out the business model for this year. We will in next investor call. We will just make sure that we start a presentation with this for past five minutes and something and giving these numbers to get. Make sure that we completely keep you all in transparency on how the business is going and how we are going to collect it.
We’re also working out on a couple of more strategies to make sure that how the non current asset what we are talking about which is sitting up for a long time. How we are going to mitigate that risk and at least get 50% immediately. We will get back to you in the days to come on this specific project. But rest assured that this is on top of our agenda. On top of our thing to make sure that how we can reverse this and then get back into a towards the positive like we have. Please, please.
Unidentified Participant
Yeah. Just one more thing on receivables you mentioned that you know subsidiary is 1365 crore. So how much will be this long term and short term?
Ramesh Kunhikannan
I think you already estimated about 250 crores is non current assets. I think that will be there rest of the current. I think our ability to now do the installation is going to be the key. There are four states where our team is working and it is taking extremely high time for more than six zones. Six zones we are working on this. But we have put enough infrastructure and team to do this and we now got a clearance from them to do the almost from morning 6 to 9 12. I think our team is putting effort and we’ll speed up this process.
Operator
Thank you.
Ramesh Kunhikannan
We have been traditionally a manufacturing company so we worked on improving the efficiency and productivity in the plant and we really understand the new model of how it takes time to do the installation at every site, location or every house.
Operator
Thank you. We will take the next question from the line of Suman Kumar from Motila Roswal. Please go ahead.
Unidentified Participant
Hi sir. In balance sheet the intangible asset in FY25 was 238 and in FY26 it is 536. So what was the 300 crore increase? What was the key reason for that?
Ramesh Kunhikannan
I think if you go back to the two quarters before we did the two acquisition one is in Iskamico and second is August Electronics which is in Canada and supplying in the DMS space to the big players in the North America. The intangible asset that has been capitalized from these two is about 320 crores. And there was a clear things in what is the order book and it’s based on the current accounting standards and we did 320 crores. For all of your information even though you’re not asked for this question now in the.
I think we are committed that how we are going to do the amortization of this. Our policy was once in a year. So in the last quarter we amortized these intangible assets and that has added to our depreciation amortization to a level of about 32 crores. That is why the PAT in the last quarter has come down PBT. But ladies and gentlemen believe that the full year was around 10%. Going forward I think we’ll be doing this amortization on every quarter. This is basically from the order book and other assets that’s available from acquisitions of Istra, Amico, August Electronics.
Operator
Thank you. We will take the next question from the line of Samit Sinha from Macquarie. Please go ahead.
Sameet Sinha
Yes, thank you very much. So apart from the smart meeting business I think everyone’s trying to get their arms around guidance. Mr. Muthukumar, you were on TV talking about. I wanted to get a sense of when do you get to expect to get to that double the market rate. Is it from starting now or is it going to be the third quarter is what you’re referring to? And would that include OSAT and PCB as well to get to that sort of double rate or is that just a pure EMS business? And then I have a follow up.
Ramesh Kunhikannan
Okay. In the double digit growth I think we have launched three Products and which is already in production now SOP started. So we will be continue to penetrate into every customer. And you know when the automotive business is growing at around 30% share of business is the key driver for this business. And we’ll continue to focus on not only introducing the new product but also expanding our share in the business. And that is why we are confidently telling we are getting into this. The aerostate business is another one where we are substantially growing last year and we continue to grow in this year.
Like executive vice chairman said, railways in another course. So as I said in the earlier to some of you when we are talking the industry is growing at 6.57% in India. Our market space is growing at around 15 to 16% and we’ll be doubling. The growth being the Middle east war, even in the last quarter we have performed much, much better. And our supply chain agility was good. Our strategic stocking has really helped us in this. So we will be doing the double x 2x growth from the start. When I say 2x growth is not the 2x growth of our last quarter comparison but on the market growth and our growth I just want to make myself clear.
And you know the market is going to grow at 15% and we are doubling. And then you are there is the numbers
Muthu Kumar Naren Swami
Right? And that
Ramesh Kunhikannan
Okay. On OSAT and pcb. I’m sorry I missed the question. See OSAT and pcb. Ours is a very, very strategic product. We are also evaluating how much of that is going to be consumed internally and how much we are going to give it outside. For all the product that we are making, where we are making a design specific and where we are going to offering as a solution to the Canes product. We may be using our own products because of the technological advantage and the competitiveness. At the same time we’ll continue to focus on the end customer.
There is a pipeline of customers that’s coming in and you know the Ozark ecosystems and PCB systems we are strategizing it out. But at the end of the year, yes the overall growth from those segments we can see that either it will expand in bottom line or on the top line depending on how we strategize to use the product through our own product by expanding the margin or selling it to other customers. It will be a strategic call and it will be moving forward. It will be an integrated business.
Operator
Thank you. We will take the last question from the line of Archan Lohadev Kamruama Institutional Equities. Please go ahead.
Achalkumar Lohade
Thank you for the Opportunity. Just extending the previous question
Operator
Between. Mr. Achilles, can you please use the handset mode and speak
Unidentified Participant
Better? Yeah, sorry for that. Am I audible?
Operator
Yes, you’re audible. Please proceed.
Unidentified Participant
Yes, sir. Just to extend the previous question, you know, if you could talk from a production value perspective. You know, the earlier guidance was thousand crores for OSAT, 500 crores for PCB. Does that stay intact or is, you know, is there any risk to that number? That’s my first question.
Ramesh Kunhikannan
We have not given any guidance like this. This is our first year. I’m sure and certain we will do a good number of PCB of around 300 to 400
Unidentified Speaker
And OSAT of around 250 to 300.
Ramesh Kunhikannan
On how much of that we are going to consume locally, how much of them we are going to sell outside is a strategy that being worked out and it will be. We’ll be communicating to you at an appropriate time to all of you. But offset business and all locally. There will be nothing to start with. It will be always in export mode only.
Operator
Thank you very much, ladies and gentlemen. We will take that as a last question. And with that concludes the question and answer session.
Unidentified Speaker
I
Operator
Now hand the conference back to the management for the closing comments. Thank you. And over to you, sir.
Ramesh Kunhikannan
Thank you very much, ladies and gentlemen. I think we appreciate really the opportunity that is given to us to explain about our initiatives and some of the contents that you had. We hope that we have answered most of your queries and if any one of you have any queries, please do reach us to our investor relations and we are here to show you. We also welcome you to visit our plant and see those facilities, seeing it, believing. And I’m sure that thanks to every one of you for supporting us in this growth journey.
I’m just handing over the phone to our executive vice chairman for any closing comments.
Viral Shah
Thank you very much. I will be shortly meeting in some conferences, so if there
Ramesh Kunhikannan
Is any clarification, please reach out to us. We will be happy to clarify all points. Thank you. Thank you very much.
Operator
Thank you members of the management, on behalf of Access Capital Ltd. That concludes this conference. Thank you all for joining us and you may now disconnect your lines.