Kirloskar Pneumatic Company Ltd (BSE: 505283) Q1 2026 Earnings Call dated Jul. 23, 2025
Corporate Participants:
K. Srinivasan — Managing Director
Jitendra R. Shah — Company Secretary
Ramesh Birajdar — Chief Financial Officer
Analysts:
Amit Shah — Analyst
Ashish Kumar — Analyst
Amit Anwani — Analyst
Priyank Chheda — Analyst
Mihir Manohar — Analyst
CA Garvit Goyal — Analyst
Rohan Vora — Analyst
Rucheeta Kadge — Analyst
Balasubramanian — Analyst
Harsul Setia — Analyst
Eshwar Arumugam — Analyst
Devesh Kasliwal — Analyst
Manish Goyal — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Kilowska Pneumatic Company Limited Q1 FY ’26 Earnings Conference Call hosted by Antique Stock Broking 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 the conference call, please signal an operator by pressing star and then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Amit Shah from Antique Stock Broking Limited. Thank you, and over to you, sir.
Amit Shah — Analyst
Thank you. Thank you, Nidi. Good afternoon, everyone. On behalf of Antique Stock Broking Limited, I welcome you all to 1Q FY ’26 post-earnings call of Kirloskar Pneumatic Company Limited. To discuss the results, we have the senior management team of the company, represented by Mr Kesh, Managing Director of the company and Mr Ramesh Birajdar, Chief Financial Officer of the company. I would request Mr to give us the opening remarks, post which we can open the floor for Q&A. Over to you, sir.
K. Srinivasan — Managing Director
Thank you. Thank you for joining the call today. I know many of you are disappointed with the results and I owe it to all of you to explain the results and to assure you that things are not as bad as it looks. Let — on this call, I have with me Mr Ramesh, Chief Financial Officer; and Mr Jiten Resha, the Company Secretary. Before we proceeding with the business update, let me ask Mr Jiten Rasha to read-out the disclaimer statement.?
Jitendra R. Shah — Company Secretary
Thank you, sir. The presentation uploaded on the website of the company and discussion on the financial results during the earnings call may contain statements relating to future business developments and economic performance that could constitute forward-looking statements. While these forward-looking statements represent the company’s judgments and future expectations. A number of factors could cause actual developments and results to differ materially from expectations.
The company undertakes no obligation to publicly revise any forward-looking statements to reflect future events or circumstances. Further, investors are requested to exercise their own judgments in assessing various risks associated with the company and also the effectiveness of the measures which taken by the company in tackling them as indicated during the discussions. Thank you.
K. Srinivasan — Managing Director
Thank you,. Now let me proceed with the business updates. The financial year F ’26 started on a sedate note. With distractions on the various fronts, we had global challenges with tariffs, with wars, strikes, changing political and trade policies, the whole landscape was confusing. In all this, rapidly transforming situation, we remain focused on executing the orders on-hand, picking orders selectively that would allow us a definite execution cycle and working on the various projects to in-house manufacture as well as to bring new products to the market.
And I’ll share some of this during this talk. It was a period to demonstrate the steevy resolve to build a robust business model that can handle the Bani world, brittle, anxious, non-linear and incomprehensible. Historically, the financial year always starts slowly and this year was even slower. Auto finalization, inspection and clearances to dispatch were all impacted due to site availability as well as other distractions.
However, this started to pick-up. As we speak, we are seeing a larger number of dispatchers leaving our factories. We are confident that we will catch-up on the planned numbers, gradually improving in Q2 and definitely coming to plan by Q3. We won several orders for the and we expect this to be the first INR100 crore order booking of a new product during this year. This is some kind of a record and this gives us the confidence that our new product scale-up will all happen as planned.
Packages are two started seeing strong traction, not only in the traditional areas of coal chains and ice plant, but also in industrial refrigeration packages. We will do at least several large packages of this even during this year. We continue to work on in-house manufacture as well as in filing IPs for design and for new products and this process continues right through. Capex execution is continuing as planned with capability building as the key trust.
We will complete the planned capex of about INR100 crore during this year. The last foam casting plant at is under trial production and this will meet the intricate casting needs of the Paichi semiermatic compressor that we launched this quarter. This being — this is being built at, that’s a plant near Poona. We also commissioned the range of specialty motors and this will be built-in the plant for use on the Tai Chi compressors and other specialty applications.
The company focused in these testing times to ensure that the capital is used efficiently. The net working capital of the company was below 12% of sales for the first time. We — the cash-flow that we released during the first-quarter was over INR100 crores. This clearly brings out that there was no push sales by us and it was business-as-usual. Now let us discuss the business by-product lines. The clear start to the first-quarter — the clear start of the first-quarter was the test cataly compressors.
We started winning not only big orders, but repeat orders as well. We expect to hit the INR100 crore mark during this year. Orders for the CO2 compressors as well as orders from seven plants have kept the reciprocating compressor business running smoothly. The sale of standard screw compressors were however, muted in a way reflecting the lower offtake to general engineering applications. Refrigeration compressors and systems, while the interest in screw compressors for diary chemical plants picked-up, they also started now offering these larger packages for the petroleum and oil and gas space.
This is a major step forward and we would see packages getting completed during this year. Auto finalization, package inspection and clearance for the large refrigeration packages as well as for deliveries for so few critical inputs from overseas suppliers where affected, we see this easing over the next two quarters. The ammonia reciprocating compressor for the coal chains and ice plants were chugging along as usual with no big swings one-way or the other.
However, we expect that this will improve dramatically with the increased sale of Tai Chi compressors during the next quarters as the consumption market in the commercial refrigeration space continues to look good and will pick-up even further going-forward. Process gas compression systems, this segment is seeing a global churn of a very significant proportion and we expect to benefit from this going-forward. However, Q1 was perhaps the bottom of the curve in terms of sales and order bookings.
A couple of major orders continue to elude us on account of this uncertainty. During the course of last quarter, we were on the verge of picking-up some very large orders in this space, but they all held up on account of uncertainty in this political situation. However, we see a huge demand for CNG packages from several geographies as the energy basket shifts to natural gas across the globe to meet the growing energy needs quickly. There is an ongoing finalization of packages for biogas and hydrogen. We have picked-up several orders in this space. We, however, see a low pace of execution in this going-forward as well.
Outlook for Q2 FY ’26, the uncertainty in the global economic landscape is expected to continue at least for the next quarter. This would mean slower finalization and execution of orders . However, the structural changes that are underway are all positive to us. A significant growth in natural gas usage across the globe, strong demand for refrigeration in processing, storage and commercial stays in India and the trust in local manufacturer in key sectors all bode well for our meeting our years target as well as continuing on our aspirational journey of growth and margins. While we did have a poor start in Q1 and several of you have informed us about your disappointment, let’s assure you, structurally nothing has got worse. Things are on a slow track for the first-quarter, may pick-up in second gradually and we should be back to our planned numbers definitely by Q3. The changes that have happened would only impact us positively as we go-forward. Now I’m going to request Ramesh to take you through with the numbers. Ramesh,
Ramesh Birajdar — Chief Financial Officer
Okay. Good evening, everyone. The results of Q1 FY ’26 have been posted on BSE and NSE website for your view. A presentation and detailed income statement showing these results have been also uploaded on our company’s website. Let me now summarize the Q1 performance of FY ’26. The Q1 sales held at INR272 crore, almost matching last year’s level and setting the stage to accelerate the growth in the coming quarters.
Other income for Q1 FY ’26 rose to INR8.2 crore, up from INR4.44 crore in Q1 FY ’25, contributing to total income of INR282.2 crores this quarter against INR279.7 crores in Q1 FY ’25. The increase in other income was driven by higher earnings on investment, dividend and other miscellaneous recoveries. Metal cost-of-sales in the current-period stands at 47.2% and reflecting 1.7% improvement from Q1 of previous year was at 48.9%.
This enhancement is attributed to more favorable product mix and enhanced manufacturing of select components. Employee-related expenses stood at INR49 crores in the current quarter up from INR43.1 crore in Q1 of previous year. This increase reflects a moderate salary revision implemented at the start of the year and addition of new manpower in Q1. Financial charges are paid to banks for services not related to any borrowing. The company has no loans, neither term loans, not working capital loans and it is a debt-free company.
Depreciation for the current quarter stood at INR7.2 crores, down from 7.8 in Q1 of previous year, reflecting a depreciation trend aligned with the pattern of asset additions. Other expenses comprising both fixed and variable-cost stood at 21% of the sales in Q1 of the current year versus 20.8% in Q1 of previous year. Expenditure levels remain largely stable with no significant variation during the quarter. EBITDA for Q1 rose to INR44.1 crore, contributing to 15.7% to total income, margin of 15.6%, that is INR43.7 crore in Q1 of prior year. Profit before-tax for Q1 increased to INR36.8 crores with margin of 13.1%, up from 12.8%, that is INR35.9 crores in the same quarter last year supported by improved operational efficiencies and disciplined cost management.
Profit-after-tax grew to INR28.1 crores at the rate of 10%, while it was INR26.9 crores in previous year at the rate of 9.6%. The company has issued 16,100 equity shares during Q1 under employee stock option program. Consequently, the paydoff share capital increased to INR12.98 crores from 12.96 at the start of the year. Basics earnings per share improved to INR4.33 per share in Q1 compared to INR14.15 in Q1 of previous year.
With over 89% of revenue coming from the Compression segment, it remains the only reportable segment as of now. The company has maintained the segment profitability at 19.1% in Q1 in the current year as well as in the previous year, which is directionally, we are in the range of 18% to 20%. Capital employed in the compression segment decreased by INR98 crores to INR235.6 crores compared to INR336.6 crore at the beginning of the year.
New order booking during the Q1 was close to INR365 crores. As a result, the company has order book of INR1,725 crores as on 1st July ’25 wide INR1,625 crores at the beginning of the year. We were holding asset at a return on value of INR5.9 crores for the disposal. We have since sold part of this at INR1.95 crore and there is no further write-down or loss on account of road assets wherever necessary figures from the previous year have been regrouped, readjusted to align the current reporting.
We have also published the consolidated income statement with our newly-acquired system and company India Project Limited and comparable financial results will be available only after completion of a full-year in the reporting cycle now this forum is open for discussion with our system investors.
K. Srinivasan — Managing Director
Thanks Ramesh
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 and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Ashish Kumar from Ampersand Capital Investment Advisors. Please go-ahead.
Ashish Kumar
Hi, thanks for taking my question. I have two questions. First is, are we changing our like aspirational target of INR2,000 crores this year with similar kind of margins as last year? And second question is, last year Q2 was a very-high base. We had around 50% plus sales growth and around 22% margin. So how do we see Q2 of this year in terms of growth Y-o-Y? Thanks.
K. Srinivasan
Okay. So coming to the final year’s target, we are not changing it as of now. We still believe we should get at least 18% plus growth over last year’s number. That means we should be very near 2,000. We are not calling it down at all. Hopefully, we should see a scale-up from Q2 onwards. Now coming to Q2, we believe that we should be at least doing near about INR500 crores. So that should take us very near to a 10% growth at Q2 level compared to the last year.
Margins would also be more or less and you would have seen in the first-quarter, operating ratios have not really changed our EBIT margin, our cash generation. We have not changed anything in the business model except that the volume of sales and order booking have declined. Nothing else has actually changed. So we will try and catch-up.
Ashish Kumar
Thanks. Thanks. That’s very reassuring. Thank you. That’s all from my side thank you.
Operator
The next question is from the line of Niwan Anwani from PL Capital. Please go-ahead.
Amit Anwani
Hi, sir, this is Amit Anwani from PL Capital. Thanks for the opportunity. First question on the — you said delay in finalization as well as QN being soft. Is it possible for you to elaborate and is there any component supply-chain restrictions which is leading this disruption currently and what gives us confidence that we’ll be able to recover gradually and be on plan in next six months.
K. Srinivasan
Okay. Now As far as the delay in execution, it is not coming out of any component that somebody imports and that’s not coming, that’s not true. We continue to have challenges getting the Howden compressors and that’s not only Howden for us. It is also true with a lot of others who are importing compressor parts, et-cetera from Europe. This has become some kind of a structural issue. It is not a denial as much as a delay and they have challenged all of them, whether it is us or any of our competitor who import from Europe. All of us are challenged by the companies in Europe going through a structural challenge in terms of their own supply-chain. So this is something that the industry is battling. It is not a denial of anything, restrictions, et-cetera, it is just a structural delay. So whatever I planned for Q1, most of it should go out in Q2 and Q3, we should be okay by that time
Amit Anwani
And this is pertaining to gas and refrigeration both
K. Srinivasan
At the moment our refrigeration compressors alone come from Howden and that’s UK Europe rest of them don’t come from Europe so we are quite okay we make them here. And this is also an opportunity I did mention in my opening call that it also gives us opportunity now to use in some application, not in everything. The Q&A compressors, which is our own patented design and probably we’ll start delivering smaller, less competitive product — less, let’s say, technically challenged projects using these compressors. And that also gives us a chance to scale-up our internal manufacturing.
We will see that happening in Q3, Q4.
Amit Anwani
So are there any plans to like mitigate this risk in future since I think last year also this happened with respect to suppliers from?
K. Srinivasan
That question is what I answered by saying that Q&A is going to come in at the smaller end-of-the packages. It will gradually scale-up.
Amit Anwani
Okay. Sure. Second question on broker, you highlighted that we’ll be using this in industrial packages also. So the INR100 crore target this year is only for products or including the packages. So more clarity on what sizes in packages you are using and you talked about refrigeration and oil and gas boat system, some color on poker usage and packages?
K. Srinivasan
Okay. That’s a pretty difficult question to answer. Let me answer like this. Poker is a centrifugal compressor primarily used for air compression. These are standard air compressors used by the metal industry, the textile industry and several engineering industries which needs large-volume of air at moderate pressures. Now this is scaling up. We are executing larger numbers now and we will probably book a INR100 crore order this year. We may not execute all the 100, a significant part of it will also get executed during the year. So those are the standard air compressors.
Now coming to packages, refrigeration packages largely run with Howden compressors if it is for the oil and gas sector, petroleum complexes, urea ammonia terminals, etc. This is where the challenge of deliveries or delayed deliveries will play a role. But packages that are built using Q&A and others, which are built by us will happen in an accelerated manner to compensate for our challenges in having the larger packages going out. As far as the gas packages are concerned, the larger packages, finalization has been the challenge. It is not a delivery issue. Finalization is a challenge because the oil sector is the one which is seeing the largest churn across the world.
You hear every day about what oil can come, where, where it can go, where the refining happens, et-cetera. So there is a large, so let’s say, political economic challenge around the oil sector and that is seeing a lot of churn. This is where some of those big orders that we are supposed to get, some in India, some from the MENA region are all getting deferred or put on-hold. It is also true for execution. This is where the big challenges and that’s why I said this probably the cycle is bottoming out, but we are really at the bottom as we talk the first-quarter.
Amit Anwani
Sir, on you highlighted about the huge demand for CNG for several geographies outside. In last year, we did a very good export number of INR124 crore. So are we seeing the contribution from export going up for FY ’26? And if you could elaborate more on the — will it be increased CNG related products for us in the global markets? Any color on this?
K. Srinivasan
Yeah. So I did mention in the opening comment that the oil and gas sector is changing a big change and the large part of the change is since oil has become more of a difficult commodity to move around, set-up refineries, taking time, et-cetera, more of the energy basket across the globe is getting met on an immediate basis using natural gas. Natural gas moves across the LNG, otherwise it moves in gas pipelines and that is where our compressors get to be used. This is a global phenomenon. We picked-up significant orders last year for exports. As we speak, we have orders further to execute. We are picking-up new areas, new geographies which are all asking for urgent requirement of CNG compressors. We hope to benefit from this as we go-forward?
Amit Anwani
So my last question on Tai Chi compressors. Any revenue target for this year and which user industries you’re getting traction, particularly for this compressor? Thank you.
K. Srinivasan
Tai Chi is a semi hermatic compressor. It replaces what is currently imported from Europe. Today, all the commercial refrigeration space, which is, let’s say the coldrooms in a restaurant, the ice boxes, the display panels, a whole lot of things where commercial refrigeration is required are all met by these semi hermatic compressors imported from Europe mostly, some from Japan. They are not 100% imported. We have launched the Taichi compressor completely made by us. There’s no imported part in it. The casting is a lost form casting from our own foundry in. The motor is a Yanus motor built at our own plant in. They’re all integral in one-piece. That’s why it’s called semi-hermatic.
And this compressor has been tested and launched in an alpha, that is a small controlled area. We will scale-up in Q2 onwards. The size of this market in India could be anywhere up to 2,000 compressors which are being imported. So that’s a fairly large number. Pure compressor business could be anywhere between INR300 crores to INR500 crores. Packages included, this will become a much larger market and business.
Amit Anwani
Sure, sir. Thank you so much.
K. Srinivasan
Thank you.
Operator
Thank you. The next question is from the line of Priyank Chheda from Capital. Please go-ahead.
Priyank Chheda
Hi, sir. Heartening to see the way you are building up the organization and one of that ways to launch a new products expand the addressable size. So my question is, what would be the sales contribution that you would be targeting from the products that you would have launched in last two, three years or since you have joined, how that sales has reached in terms of any size number that you would like to call-out going ahead, what would be that target? And what would be as a percentage of sales or maybe if you could want to Call-IT out as which will be from the new product launches.
K. Srinivasan
Thank you for your question. I will reframe this a little bit so that it’s more relevant to the business context. The packages that we build using imported compressors used to represent almost about 50% of our business five years back. Today that has gone way below 25. Rest of it is built almost entirely by our own products, our compressors, our packaging, and this is scaling up and even getting bigger and better. So that’s the change that we wanted to see that we become less dependent on imported compressors.
And that’s moving well. We eventually should come to a stage where the imported compressors and it is very relevant that imported still continues because these are all API compliant compressors where even the Chinese still import for critical areas and there is no global market to have another company making it. So these are maybe the total world requirement would be about 500 to 700 compressors. So it’s good that one or two companies make it and we all consume it. But our dependence on that business, we would like to see it go down to less than 20%. We have almost got it down to about 20% — to get it down to 25% this year, we’ll take it down further over the period of time.
That’s all the rest is all being built by us in India.
Priyank Chheda
So would that get reflected in terms of improved gross margin and EBITDA margin structurally? I’m not asking for a year or two. Structurally, how do we see as we get into more in-house manufacturing of compressors and the whole of the packages, where would we settle down in terms of margins or value addition that we do?
K. Srinivasan
I think Ramesh has been explaining it well. See, in the first immediate phase of growth, our margin Targets are to take it between 18% to 20% and stay around that. But to scale-up in terms of volume and take market-share, we don’t want — see, it’s a trade-off. If you do too aggressive margin targeting, then you then ensure that your scale-up is slower and then you’re able to indigenize much lower. So we have to keep that in mind. So we are targeting 2020, top-line growth around 20% CAGR, margin EBITDA around 20%.
Priyank Chheda
Perfect. And one last question on the screw compressors, wherein our market-share is slightly lesser versus the available TAM. So — and I know that there are three sub-segments within that, which is oil, oil freight, portable. So how are we positioning in each of these segments, if you can explain wherein how do we — how — what are the actions that we’re taking to scale-up the market-share within each of the segments?
K. Srinivasan
So your kind when you say our market-share is low, we are almost insignificant. The two large players in India probably dominate these industries. We have under 5% or even less. So we have a full range. We don’t have the oil-free. We have the oil flooded screws. We are not very big in the portables that is used in mining water well. We are largely in the industrial area and in specialty screw compressors. We did launch the ARIA range of the low-cost compressors. It didn’t scale-up as much as we expected it.
We probably will relaunch it during the year with some changes in the way we have been putting it to the market and we will try and build this business. There are quite a few other modifications and relaunches coming up in the screw space. It’s a huge opportunity, but with all the technology and investments that we have made over the last five years, we have not met our own internal aspirational targets in this space. We will try and do better going-forward.
Priyank Chheda
Sorry, if I can squeeze in one more question. On the refrigeration segment, and I reconcile that this market size would be somewhere around near, near $1 billion, which is divided between industrial and commercial. We have Kyno packages, we have launched new trench compresses also. So in terms of available product gaps or available products, are we addressing whole of the market and now only execution that has to be done or there are more such new products that we need to fill-in terms of the — in terms of addressing the market.
K. Srinivasan
Yeah. The refrigeration compressor business as a whole, not just the compressor, including the packages and the whole — whole refrigeration system per se is a much bigger market. It includes three buckets. It’s the industrial, the commercial and the comfort. The biggest piece obviously is comfort. Comfort alone would import into India about 1.4 crore compressors every year and that is what is all under the white line goods, the air-conditioning, the refrigerators and the whole lot of things that we do and we are not in that space at all. We are primarily in industrial and in getting into parts of the commercial refrigeration.
Commercial, we just have got now launched the Q&A about two years back, we are now getting bigger with the Tai Chi launch, which is the semi-hermatic. Again, to start with semi-hermatic, we are launching only the reser. We have to come up with a semi-hermatic screw. We had to come up with a semiermatic centrifugal. So I think we have still got a long, long way to go before we can take the market. The only good thing about this is almost entirely everything is imported. Not one compressor in this space is made in India today, both industrial, commercial and comfort, everything is imported. So this is a virgin space for us to scale-up and grow. We are building it up slowly.
Priyank Chheda
Wonderful, sir. Thank you. I’ll come back-in the queue.
K. Srinivasan
Thank you.
Operator
Thank you. Thank you. The next question is from the line of Mihir Manohar from Carnalian Capital. Please go-ahead.
Mihir Manohar
Yeah, hi. Thanks for giving the opportunity. Am I audible?
K. Srinivasan
Yes, yes.
Mihir Manohar
Yeah, yeah, sir, wanted to understand you mentioned second-quarter you expect to have INR500 crores kind of revenue. So does it mean that if there is a large package which you did not — I mean, which is sitting in inventory and you expect that to — that to get shipped or that to go out of factory in second-quarter. Is there any spillover from 1Q to 2Q?
K. Srinivasan
See, it’s not just one or two packages, a whole lot of things are happening. Some are moving out, some are continuing to be worked on, some deliveries are still to be coming in. So I think it is not just one package story. We have estimated that we should do around 500 in the second-quarter. Order booking, we still have a lot. That’s why I said we’re still keeping a bigger number for the third and 4th-quarter
Mihir Manohar
Okay. Understood. What would be the mix of products versus projects, let’s say, for order book, which is there as of now, INR70 crore INR25 crores? And when I say order book one year back, roughly INR1,680 crores. So what is the products proportion as of now versus what was there one year back?
K. Srinivasan
See, products this year, we said we will go. When I say product, it includes the service and spares as well. Packages, the large packages as what we call as projects, I keep it separate. We were 60-40 the other way, we hopefully should get to a 70-30 at least anywhere between 65 or 70 30 in favor of the equipment and whatever we call as the non-project orders.
Mihir Manohar
Okay. So as of now, 65, last — last year it was 60.
K. Srinivasan
Yeah. We’re trying to get bigger than that. Like I told in the beginning, we are trying to take it up to 80% over the next one or two years.
Mihir Manohar
Understood. Because last quarter, one of the argument for a local order book and for us despite INR2,000 crores revenue was that our products proportion was a higher number and that is where we were expecting INR4,000 crores of revenue in FY ’26.
K. Srinivasan
I’m not sure I heard you well. What — can you please repeat it?
Mihir Manohar
Yes, sure. So I mean the argument was that our products as a proportion is going up and that is where our order book that the reported number which is there, that is getting more short-cycle versus the earlier number being more of a long-cycle.
K. Srinivasan
Absolutely. So we — in the transmission phase, you will see that our order book doesn’t look as big as it is it used to be earlier because they aren’t running in much shorter cycles, but this will also catch-up. We will normalize it in the next one or two quarters because then you will still see the growth. When we started the quarter, we were sitting with an order book of 17 to 5. At the beginning of this quarter, we started with
Ramesh Birajdar
1724.
K. Srinivasan
So that is about 6% higher than the — this year we are at 1725 as on July, right. So we really want, but we need to get it up even higher, then only we’ll be able to execute bigger numbers.
Mihir Manohar
Understood, sure. In the order book, what are the number of booster compressors and number of mother compressors?
K. Srinivasan
Oh, that’s a tough question. I don’t know the exact numbers. All I know is that we have both Booster and mother stations. Last year combined, we did about 200 plus this year we are hoping to do at least 250 plus let’s see
Mihir Manohar
Okay and 80% will be boosted in this
K. Srinivasan
I wouldn’t have that as a number. How much will be about 60% to 70% boosters even less.
Ramesh Birajdar
Less than that.
K. Srinivasan
So you take it for the moment as 50%,
Mihir Manohar
Sir.
K. Srinivasan
Take it as 50-50 for the moment. I may be wrong, a little bit out of line with this. The total number is roughly about INR200 is what we did. And I think we did about INR50-50.
Mihir Manohar
Okay, understood. Sure. And just last question was on the employee cost. So when I say sequentially Q-o-Q, our employee cost has gone up from INR45 crores to INR49 crores. Is this — is there any wage increase or the correction
Ramesh Birajdar
We did from the first April and additional manpower where we are targeting to achieve the sales aspiration sales of INR2,000 crores. And with that reference, we hired the additional manpower and the overall — the increment percentage is in the range of 10% and the rest is on account of additional manpower.
Mihir Manohar
Oh, understood. That’s it from my side. Thank you very much, sir.
Ramesh Birajdar
Thanks, sir.
Operator
Thank you. The next question is from the line of PA Garvit Goyal from Envis Analytics Advisory. Please go-ahead.
CA Garvit Goyal
Hi, am I audible?
K. Srinivasan
Yes, yes.
CA Garvit Goyal
Good evening, sir. Sir, my first question is on-Q2 itself. You mentioned 500 CR target that we are looking at in Q2. What is the number of operating profit margin we mentioned?
K. Srinivasan
I think on the margins, I think Ramesh has been saying our margin targets would remain within the range of 18% to 20. So let’s keep it there. We will have up-and-down a little bit 1/4 going up to ’21, ’22, 1/4 staying at 19%, but we will stay within this range for the moment.
CA Garvit Goyal
And that is for full-year, right?
K. Srinivasan
Yeah. The same.
CA Garvit Goyal
Understood. And sir, in your annual report, we are mentioning like this INR2,000 CR crore target as a medium-term target. So given the challenges in Q1, do you foresee these issues continuing and should we expect any reason to earlier guide us going ahead?
K. Srinivasan
We have talked about this in the beginning as well. This year’s target was to get to the INR2,000 crore mark. We are still confident that we should get to it or as near of that as possible. See, we said we should get even 18% growth. We’ll be very near this number. We are targeting a CAGR growth of about 20% for a reasonably long period of time, and that’s how we are working. The market gives us the kind of opportunity. So like we keep saying 2020, top-line growth of 20% and a margin of about 20%. EBITDA
CA Garvit Goyal
Understood. And last — in last phone call, you highlighted like some sector-specific slowdown in the oil and gas and biogas. So how do you see — do you see any sign of recovery in these sectors as in?
K. Srinivasan
Oil and gas, I explained quite a bit. Oil part of it is a little uncertain due to the various changes happening across the globe. Gas part seems to be the way out for many economies to quickly get the energy needs met. So gas is happening across the world and we see more opportunities for us in the gas space. The whole sector as for us, we said it has hit the real bottom in the first-quarter, which would only get better from — going-forward. That is as far as the oil and gas sector is concerned.
The second question you asked on the biogas side, biogas is still a lot of excitement and talk about it and projects and hundreds of quotes going out every day, every week at least and some finalization also happening, but actual number of gas projects that are getting installed and where we are putting in our compressors and commissioning them is still very few and that’s what is worrying us. It will take time.
CA Garvit Goyal
And what about the hydrogen space, sir?
K. Srinivasan
Hydrogen space is an opposite of it. In the same — there also we have a lot of interest, projects, finalization and some commissioning has also happened. We have to deliver some more projects yet. Our compressors come from PDC of USA in this case, but packages are built here. Here, the challenge for the industry is the use-case is still a little undefined. People have hydrogen available and they don’t know-how to use it. There is only two proven process to use hydrogen either in the diesel refining or in the hydrogenation process for vegetable oil, et-cetera, one is and all that stuff. So there is a use-case challenge. In the case of biogas, there is no use-case challenge, it’s opposite, generation challenge. How do you generate biogas from the bio waste?
So we have two opposite challenges in both this and the sum topless, it is bringing down the actual execution.,
CA Garvit Goyal
Understood, sir. And lastly on the order inflow situation. So are you seeing — what kind of situation are you seeing based on the current conversation with your end-customers? And going by that, what is the kind of — I’m not asking for the precise number, but what is the ballpark number for closing order book, do we target by the end of this year?
K. Srinivasan
This is the most difficult question to answer because the kind of like I keep saying, the kind of quotes going out, the kind of discussion happening, this is — nothing has come down. Everybody is still talking about orders, everybody is talking of even issuing letter of wintend everything. We can talk about it only when it gets into final firm order with advance. So it is still something which is very fluid. First-quarter has been not good at all. Like I said, many things which were all hanging around didn’t actually get consumated into a firm order with an advance.
So consequently, we will not take it as an order. So there are challenges that are there in this space because of all the uncertainty. Hopefully, it will clear up in the next quarter or so.
CA Garvit Goyal
Got it, sir. That’s it from my side, sir. All the best for the future. Thank you very much.
K. Srinivasan
Thank you.
Operator
Thank you. The next question is from the line of Rohan from Envision Capital. Please go-ahead.
Rohan Vora
Hello, sir. Am I audible?
K. Srinivasan
Yes, please. Rohan, go-ahead.
Rohan Vora
Yes. Yes. Thank you for the opportunity. So sir, sorry, I’m hopping back on the same oil-free screw compressor point again. So just wanted to understand when we relaunch and when we try to recalibrate our strategy. So what would be we doing differently this time to successfully penetrate this category? One. And second, sir, how big is the addressable market that we can in a medium-term into three to five years, we can really get into in this segment. So this was the first part.
And second, sir, just you know, on the order book. So last two quarters, you’ve seen order book slightly muted. So just your take on that. Thank you.
K. Srinivasan
Okay. So the question you asked on oil-free screw compressor, we have not launched so-far an oil-free compressor. We are working on this, but we have to look at a way to address this market with a variant which is quite different from what is available in the Indian market today. Indian market, we have what is called today is oil-free around with water and some of them are water waterjacketed. So we’ll have to see what we will come up with this. We have not launched a product for the oil-free market. But if you talk of screw compressor as a whole, this I’ve explained in the beginning, we are still a very small player. We have several new moves that are coming up. They have a very good product.
I mean, you all know that when we had this big COVID crisis, we were the only company that could deliver almost about 700 plus compressors in such a short period that we could deliver 0.5 million liters of oxygen per hour across 15 states in this country to keep the COVID crisis under control. So we have the capability, we have the product, but there are challenges in the market in terms of competitiveness with a large number of players, particularly two very strong entrenched players. So we’ll address this increasingly with several strategic moves. We will talk about it as we go-forward.
Now as far as the order book, what you said, we have already explained that, yes, there has been a real bottom-end when we talk of the last quarter when the order booking was really at the lowest point. We — largely this is coming out-of-the oil and gas sector. We believe it has bottomed-out and we should start seeing this going up from Q2 onwards. The proof actually is when I put out my Q2 numbers and say this is order we have book. So you have to bear with us for a quarter and then we’ll be able to explain it even better.
Rohan Vora
Thank you, sir, for the detailed answer and all the best.
K. Srinivasan
Thank you.
Operator
Thank you. Thank you. The next question is from the line of Richita from iWealth. Please go-ahead.
Rucheeta Kadge
Hello, sir. Very good evening. Sir, my question is pertaining to the refrigeration segment. So since you’ve spoken about the housing compressors, wherein we are facing some kind of supply-chain issues. So how much percentage of our order book currently has these kind of compressors?
K. Srinivasan
I explained the total packages, which is both Howden and aerial, which is really what comes for the gas systems combined is roughly about 25% to 30% for the total turnover. Howden would be about half and aerial would be about half.
Rucheeta Kadge
Understood. Understood. So by when would this issue settle down?
K. Srinivasan
That’s a real tough one because like I said, see, it is not a question of just these names that I mentioned. There are other competitors of mine, who do have their parent companies in Europe and they’re getting compressors from there. And we are also helping a couple of them to package and even those compressors are not coming. So this supply-chain issue in Europe is not specific to Howden. It is with everybody and that is coming out-of-the way their whole entire supply-chain in Europe is being reoriented, I would say, because they’re struggling with their own supply-chain.
Quite a few of them are getting passed out of Eastern Europe, maybe from Russia and all of them are now struggling. They also have challenges with China, etc. So there is a rebalancing or a reinvention of the supply-chain in Europe and that is hurting all of them.
Rucheeta Kadge
So if this does not, you know de-escalate how much do you expect like whatever targets that we have for the year, how much can that get impacted by
K. Srinivasan
Okay. So this is a relatively easier question, so I’ll answer this better. See, what we have done in the meanwhile, like I explained, this also gives us an opportunity to try and convince some of our customers to use the Q&A compressors wherever it’s possible. So we are trying to put Q&A compressors in smaller packages at least to start with, and that will take-away some of the uncertainty coming out of any supply-chain disruption.
We still target to keep to the numbers that we have set-up in the beginning of the year. We don’t expect to be away from those numbers thank you very much.
Rucheeta Kadge
Got it. Got It, sir. Understood. Thank you, sir.
K. Srinivasan
Thank you so much.
Rucheeta Kadge
Yes.
Operator
Thank you. The next question is from the line of from Arihant Capital Limited. Please go-ahead.
Balasubramanian
Good evening, sir. Thank you so much for the opportunities. Sir, Taiji is the only semi-arthmatic compressor made in India. How do we look at pricing power between us and Chairman and Chinese imports?
K. Srinivasan
Thank you. Taichi competes against European compressors because there is no Chinese imports of any significance in this space. This is largely served by compressors imported from Europe. They today currently have sales offices in India, they import them in large numbers. You can go through the HS codes, you know the name of these companies and they’re selling them to the assemblers or whoever it is in India. Tai Chi would be a package builders. Tai Chi would be going head-on against this and we expect to scale-up very quickly.
Balasubramanian
Okay, sir. Sir, on that refrigeration side, how does the integration of systems and components Private Limited is — how does it is enhanced capabilities in pharma and chemical side and is there any synergies in margins or customer appreciation side?
K. Srinivasan
Okay. So systems and component actually package or refriger — smaller refrigeration packages for chemical, pharma and other industries. They use compressors other than kilos compressors. They take compressors from Chinese, Japanese and others and package it. We are not stopped that, but we will gradually replace those compressors with kiloster compressors, QNA and other things. So that is how we see an opportunity to enter the packaging market, which is currently not serviced by us at all. So that is what Systems and Components role is going to be.
The first-quarter has been brutal. They lost money simply because they completed a hydrocarbon project for which in our system, as soon as a package is shipped and the order is invoiced, we booked the entire LD as a cost immediately, though we had a chance of recovering some of it later and we have done the same with them as well. So they have taken a hit in the first-quarter in terms of number, hope to get better going-forward.
Balasubramanian
Yes, sir. Sir, especially on and chemical side, we have seen larger demand for large reciprocating — reciprocating compressors. Is there any cyclical or structural demand in these sectors?
K. Srinivasan
Or you would have been reading there is a disruption in the fertilizer industry of significance availability, et-cetera. The ammonia terminals have all come in and our compressor refrigeration packages are all more or less delivered. There are a few that are going out still. So there is a certain amount of uncertainty around this industry as well in terms of execution. There is no intent or less intent in terms of packages or projects, but the execution is still a little bit out of gear. Hopefully, we should have all of them running during the year.
Balasubramanian
Yes. Got it, sir. Thank you.
Operator
Thank you. The next question is from the line of Shetia from Singularity AMC. Please go-ahead.
Harsul Setia
Sir, can you explain a bit more in detail the commercial refrigeration segment for Taichi and you know-how many — you obviously told that it is currently totally imported or what is the pricing difference between our compressor and our European compressor as of today also?
K. Srinivasan
Okay. So the commercial refrigeration space is anything that is used in a in, let’s say, in the restaurants, in the display cabinets, in the reefers, in ice boxes, ice rooms, a whole lot of things are all seen as commercial refrigeration space. They start from something like as small as a 15 kilowatt small compressor going up to about 100 kilowatt compressor. Most of them are actually in the box itself, a very small thing that you can connect up and the ice plant or the builders of these rooms buy these compressors and do all the other things themselves. That is why it is still largely served by imports.
These compressors all are imported by the sales offices of the European companies and they distributed to the room builders or safety box builders, et-cetera, in India. The compressor alone about 2,000 of them are sold-in a year. The packages that are much bigger. So the compressor business could be about INR500 crores. That’s what I said. Ticket size could be anywhere from INR3 lakhs to about 10 lakh INR12 lakhs.
Harsul Setia
And so how premium would be the competitor’s price? The European gas would be —
K. Srinivasan
So I can’t really give you a business strategy in terms of how we’re going to price it because it’s still WIT. But definitely we will price it to start with at least much more competitively compared to imports.
Harsul Setia
Okay. Okay. And will it be — so is it margin-accretive from day-on basis?
K. Srinivasan
See, we explained that whenever we launch a new product initially the margins would not be to where we would like it to be. But on an average, we will get it to as a business modeling, we will get it to the range between 18% to 20%.
Harsul Setia
Okay. Thank you
Operator
Thank you. Thank you. The next question is from the line of Ishwar from iThought PMF. Please go-ahead.
Eshwar Arumugam
Hi, sir, am I audible?
K. Srinivasan
Please go-ahead.
Eshwar Arumugam
Sir, sir so most of the questions I had or has been answered. So one of the questions I have is, in station installations, the commentary in the last few quarters from us has been that the other station installations have been not as much as daughter stations. But this quarter, since we are saying that 50-50, is there any change in how CGBs are approaching station installations like — are they seeing lesser lifetime costs with mother station or something like that.
K. Srinivasan
No, no, I think I should explain this better now. The number of mother stations being a lot installed is significantly lower than the daughter stations. The boosters, as we call the daughter station, the Kalana in our brand is a very, very small part of our business. But for the general market, we don’t participate in all the booster activities. We take a few, we don’t take a lot. We only concentrate more on taking the mother station. So our sale could be around 50-50, but that is not an indication of what is actually being allotted or installed by the oil and the oil gas marketing companies. They would sell maybe 80% would be boosters and only about 20% could be the mother stations.
Eshwar Arumugam
Understood. So do you see them moving more towards mother stations? Once the daughter station gets completed, will they be converted into mother stations? Maybe like three, four years down the line.
K. Srinivasan
I can give you the reality, I can give you my wish. So the reality is, I don’t think it’s going to happen for quite some time because all of them have a geographic area coverage mandates given and they would all find the shortcut of simply putting the to comply with the coverage. My wish is always that since it’s a really suboptimal solution, it doesn’t make money for us. It doesn’t make money for the oil companies, it doesn’t make money for anybody. Eventually the pipelines would come and with that mother stations will come. So that’s my vision player, but the reality obviously is not there yet.
Eshwar Arumugam
Understood. And another question I had is one of our domestic competitors from Tamil Nadu, they have also launched a variant to compete against the Chinese imports like we’ve launched Aria. Have you evaluated that product and how does that product compare with ours and what is our right to win in this particular segment?
K. Srinivasan
In the Chinese, if you want to go after the 30,000-odd compressors that come from China, the buyer actually is a guy who looks at the ticket size. It has to be the lowest priced and that’s what he looks at when he buys it. But having bought it, he then expects that it should be as good as any of the other good compressors that the brand builds, be it my colleagues from South or us as. So there, there is always this expectation differentiation that will come up.
At the time of buying, it has to be competitive against the Chinese at the time of usage and service, they expect it to be another kiloster compressor. So this is the challenge that we are facing. That’s why I said have to relaunch this with a better understanding of the expectation as well as the pricing. This is a challenge that all of us will face.
Eshwar Arumugam
Understood. Understood. Thank you for taking my questions.
K. Srinivasan
Thank you, Visha.
Operator
Thank you. The next question is from the line of Devesh from Antique Stock Broking. Please go-ahead.
Devesh Kasliwal
Yes, thank you, sir. So just wanted to ask on the total addressable market currently after the past two years and the launch of all the three new variants of products that came through. So like obviously for the gas packages, it will be almost the same. But for air and refrigeration , how much of the addressable market has increased and what is the current size for us?
K. Srinivasan
Okay. So it’s a bit of a difficult question. I’d answer it in multiple guesses. The air compressor business in India alone is anywhere between INR5,000 crores to INR7,000 crores at least. So that’s the air compressor part. The refrigeration compressor compression systems combined, if I include only industrial and commercial could be anywhere up to INR4,000 crores, INR4,000 crores INR5,000 crores. I’ve left out the comfort. In the gas compressor compression systems. Here nobody buys compressors alone, rather buy the whole-system. That is a business, it is could be anywhere good year, bad year because it’s usually driven by capex could be anywhere between INR3,000 crores to INR5,000 crores.
Devesh Kasliwal
Okay. Okay. Okay. Got it, sir.
K. Srinivasan
This includes the AMCs. This includes the upkeep and service because in the gas stations has approximately about 8,000 CNG stations would be mother-daughter stations and all of them almost all of them run on what is called as a operating and maintenance contract okay so that includes the student service.
Devesh Kasliwal
Okay, sir. Got it, sir. Thank you so much.
K. Srinivasan
So we are in a fairly good industry. I mean, we are in an industry which has got a lot of headroom for Indian companies to invest and grow.
Devesh Kasliwal
So — and the incremental part compared to two years back with Q&A, ARIA, Tex as well as the new variant that you’ve launched right now.
K. Srinivasan
We continue to — like I keep saying as we file about 40 odd patents every year, part of it is process, part of it is newer products and designs. So you will have more-and-more launches coming in. It’s not that it’s going to-end with these four or five. There are lot more coming in. The addressable market is about this and we will have to address most of it, which are currently being met by imports by manufacturer in India.
Devesh Kasliwal
Okay, sir, I’ll frame it in a different way. So what is the targeted rate at which our addressable market is growing with the launch of new equipments?
K. Srinivasan
So that’s a little easy one. So we will target to grow 20% CAGR for quite some time because that is the headroom that we’re creating with these new launches every year.
Devesh Kasliwal
Okay. Okay. 20%. Okay. Got it, sir. Thank you so much for this clarity here.
K. Srinivasan
Thank you.
Operator
Thank you. The next question is from the line of Manish Goyal from ThinkWise Wealth Managers LLP. Please go-ahead.
Manish Goyal
Yeah. Thank you, sir. Sir, I’d just like to continue from the previous participation. So like in refrigeration segment, you mentioned the market size is INR4,000 crore to INR5,000 crores. So with launch of compressors and moving to compression package and now launching compressors and with acquisition of systems and components. So would it be like we will be able to address the large part of the market or still there are product gaps here which we need to fill-up, if you can give us that perspective, number-one.
And number two can now with so much of focus on refrigeration, can it become the largest revenue contributor in probably next couple of years? That was the first part.
K. Srinivasan
So I’ll answer the last question first. We gave a split between air, refrigeration and gas for the last year and a half of 2040-40. That means we did scale-up our refrigeration and scale-down our gas. That’s what we are saying for this year as well. But this may change again. You see, like I keep saying, I believe gas has bottomed-out. So if you start suddenly seeing more gas getting organized, then again the gas will go back to 45 and refrigeration will become maybe 35 at that stage. So this would be dynamic. So I would leave it broadly there. I wouldn’t change it.
Now as far as what part of it we’ll address with these compressors, this is just one small part. There are several more compressors required. Even in the, we’ll have to come with a lot many versions. We’d have this, have this crew, had to have the centrifugal. So there is lot more work to do on addressing multiple niches. So of course, you had to have a compressor for the refers or the refrigerated trucks, that’s another model that we have to make. So it’s not that you have one-product and it leverage everything. So there is a continuous requirement to keep coming up with newer versions, newer products to address all the market and that’s what company is working on.
Manish Goyal
Okay. And sir, like, can we also address opportunity for defense ships as we have seen lot of ordering has happened in recent past and in a few years back, we have supplied some refrigeration package.
K. Srinivasan
I will address this. We are supplying refrigeration, which we Call-IT as HVAC in the case of defense, heating, ventilating and air-conditioning systems. We won’t get into details of what all is there in this because there is a certain level of secrecy. They are not just refrigeration system. There are other involved in this. We are supplying for the Navy. We also have some systems that it’s not refrigeration, but it’s more on the air side for the Air Force and Army. So I’ll leave it at that. I don’t want to get too much into detail, but the whole defense-related business is very important and small for us.
Manish Goyal
Right, sir. And sir, on the backward integration like at, we have probably set-up forging plant now recently and we have also been doing fabrication and now launched motors. So how do you see like in next couple of years, we should be — how much can it probably meet the internal requirement and probably what kind of cost-saving we can see?
K. Srinivasan
Okay. So I’ll explain it in two-parts. First, a small correction, the motor plant is not in, that is a, okay. So now what are we doing in terms of backward integration of manufacturing? The first phase of manufacturing has been always to set-up unique manufacturing capabilities. These are not very large capacities, capabilities that will allow us to produce competitive and unique products for our requirement. For example, in our casting, we have been making castings within KPCL as well as the group for more than 40 years. But the last forecasting specifically for machine tools is a unique thing that we have set-up. So it’s a smaller plant to start with, prove the concept and scale-up to meet our requirement and eventually also to supply our competitors and others.
That’s the way we go. So all our investments of new capability creating in terms of backward integration are to start with, for our requirement to improve our cost competitiveness, offer something unique to our customers and eventually try and scale it up and make it unique for our competitors as well, offer it to everybody.
Manish Goyal
Okay. Thank you.
Operator
Thank you. Ladies and gentlemen, we’ll take this as the last question for today. I would now like to hand the conference over to the management for closing comments.
K. Srinivasan
Yeah. So let me thank all of you who participated. I know like I said in the beginning that this is not a quarter that was in-line with our expectation. But having said it, I must also say that in terms of the effort and work that is going on, it still continues to give us the confidence that we will try and get to as near the number as we have started the year with. And going-forward, things can only get better. We are not seeing any structural change or anything that is happening that will impact us in any serious manner either for the year or for the long-term. So with that reassurance, I would like to say I hope to see you all again next quarter with better numbers and smiling faces. Thank you all for participating.
Ramesh Birajdar
Thank you.
Operator
On behalf of Antique Stock Broking Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines