Kirloskar Pneumatic Company Ltd (BSE:505283) Q4 FY23 Earnings Concall dated Apr. 27, 2023.
Corporate Participants:
K. Srinivasan — Managing Director
Jitendra R. Shah — Company Secretary
Suhas S. Kolhatkar — Vice President and Chief Financial Officer
Analysts:
Amit Shah — Antique Stock Broking — Analyst
Kashyap Javeri — Emkay Investment Managers — Analyst
Aditya Nahar — Alpna Enterprises — Analyst
Nikhil Upadhyay — Simpl — Analyst
Raj — Arjav Partners — Analyst
Levin Shah — Motilal Oswal AMC — Analyst
Jonas Bhutta — Birla Mutual Fund — Analyst
Parin Gala — SageOne — Analyst
Vishal B. — Max Life — Analyst
Prolin — Goldfish Capital — Analyst
Mihir Manohar — Carnelian Asset Management — Analyst
Dhawan Shah — — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Kirloskar Pneumatic Company Limited Q4 FY ’23 Post-Results Conference Call hosted by Antique Stock Broking. [Operator Instructions]
I now hand the conference over to Mr. Amit Shah from Antique Stock Broking. Thank you, and over to you, sir.
Amit Shah — Antique Stock Broking — Analyst
Yeah. Thank you, Michelle [Phonetic] Good afternoon, everyone. Welcome to the Q4 FY ’23 earnings call of Kirloskar Pneumatic Company Limited. From the management to discuss their results we Mr. K. Srinivasan, MD, and Mr. Suhas Kolhatkar, CFO of the company.
I’d like to hand over the call to the management for their opening remarks, post which we can open the floor for Q&A. Over to you, sir.
K. Srinivasan — Managing Director
Yeah. So, good evening to all of you. Let me at the outset request my colleague, Jitendra Shah, to read out the disclaimer and then I will go ahead with the call.
Jitendra R. Shah — Company Secretary
Thank you, sir. Good evening to all. The presentation uploaded on the website and discussion on the financial results during the call may contain statements relating to future business development and economic performance. That could constitute forward-looking statements. While these forward-looking statements represent the company’s judgment 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 judgment in assessing various risks associated with the company and also the effectiveness of measures which taken by the company in tackling them as indicated during the discussion. Thank you.
K. Srinivasan — Managing Director
Thank you, Jitendra. And once again, good evening to all of you. The year F ’23 has been a mixed one. Most of us are talking of this as a Q4 call, but I would rather cover the whole year so that it gives the right perspective on the whole thing. We continued on our growth journey with the sales growth and the sales overall grows to INR1,249 crores, 21% higher than the previous year, led by a strong growth in exports. This is in spite of the fact that we had very, very few orders for the oxygen compressor. This business was a big ticket last year and that had almost disappeared this time. We also had seen some slowdown in the CNG compressor orders and installations, so that was also another major thing that happened during the year. However, order finalization also started slowing down a bit in the second half and this we had mentioned to you earlier as well. So, overall, F ’23 was a bit of a mixed year. But as we begin F ’24, we have a more positive outlook and we will share this with you as we go forward.
Now to sum up, the sales for the last year was INR1,239 crores compared to INR1,021 crores of the previous year, which is a growth of 21%. Profit-before-tax grew from INR114 crores to a INR143 crores, a growth of 25%. All the businesses, air refrigeration and gas, did well overall. Export sales at INR177 crores was nearly seven times more than what we had done the previous year. While the supply chain disruptions was largely mitigated with better managed inventory, the delivery times from Europe and U.S. remains still very much about normal. This has impacted our execution, particularly, in Q4. However, there was a whole host of projects under discussion both in the MENA region and in India, and some of them hopefully should get finalized during Q1. This will ensure that we will continue to grow in double-digit. The heightened inflation in Europe and U.S. has only enhanced our competitive position as a strong supplier of engineered packages going forward.
Overall order at the end of the year — order bank at the end of the year was about INR100 crores lower than the corresponding period last year. However, since the end of the year in April, we have booked about over INR200 crores of orders, which actually bodes well for our execution in F ’24. As we speak, we are — if you look at the 13-month period, we are over INR100 crores above in order booking compared to the last year. The capex spend for the year, which includes the work in progress, is over INR143 crores. This includes the forging plant and the fabrication facilities that are being put up at Nashik. The solar plant at Saswad has been established and it meets now nearly 60% of the power requirement of the Saswad factory. More importantly, this has allowed us to switch weekly offs to Sunday from Thursday nearly after 30 years, and this has greatly enhanced employee satisfaction.
The working capital as on April 1, ’23 was INR283 crores. This is primarily due to the need to hold larger inventories as well as continued delay in payments we are getting from the oil companies. We however remain committed to bring it down to about 18% of our sales going forward. As we speak, it is about 22%, so this will release overall further cash. The overall cash generation from operation was close to INR40 crores.
Now let’s look at the results from product lines. The air compressor business continued to grow strongly in delivering superior solutions to various niche applications. The standardization and scaling up of the Tezcatlipoca range of centrifugal compressors was a milestone. This is an outstanding product that we have. This is by far the most efficient oil-free dry-air compressor in the market. We expect this to become an industry standard going forward. We had record sales of reciprocating compressor packages for various critical applications in mapping, in air separation, etc., and this continues to grow. A major step in building reliability, scalability, and standardization was the implementation of the Product Lifecycle Management software from Dassault. Standard screw compressor sales were to plan albeit much lower compared to the previous year with practically no sale of new compressors for the oxygen plants.
Refrigeration compressors systems, the sale of bare shaft ammonia compressors to the cold chain ice plants were on plan. This segment remains our forte, but the market itself is not growing significantly. However, installations of the newer installations which are largely with screws and semi-pneumatic compressors and racks is being targeted by a new Khione range of compressors. We expect to scale up during F ’24. We shipped a large refrigeration package for gas separation to Oman and this is during the first quarter. We are also working on several project proposals both in India and MENA region and this bodes well for F ’24.
Processed gas systems. We completed the installation of three large packages at site in the Middle East region during the year. Due to delivery challenges, the margins were under pressure. However, with this, our credibility as a reliable and efficient supplier of gas packages for the MENA region is well established. We hope to benefit from this in finalizing various offers under discussions and negotiations. We added a senior executive to address the Southeast Asia market for these packages and this is being scaled up.
Despite the CNG packages for the year were lower than the previous year in spite of significant order bank, most gas companies were not willing to take the new installations as gas price and availability remained a challenge. The situation has still eased in April and we have got the first set of 80 [Indecipherable[ compressor, booster compressor in April.
The oil and gas business is moving to a new normal with prices moderating after an initial phase of uncertainty. With EU accepting natural gas as a part of the ESG initiatives and as a precursor to a future shift possibly to hydrogen, the demand for natural gas and gas projects remains strong. This bodes well for us in doing business in this space. The O&M service business continues to grow and with some older installations of other suppliers also being offered to us, we expect to grow further in this space, although payments too remain a challenge.
Outlook for ’24. I think there was a bit of concern when the Q4 numbers alone were looked at. Let me assure you, the outlook for ’24 remains positive. The global economy is going through a phase of high inflation and modest to negative growth. However, the slowdown that is there is also in a way delaying the technological transmission in energy. Consequently, the demand for our compression packages continues to remain strong both in gas and refrigeration space. Also, the installation of CNG stations has now accelerated, and hopefully, we will meet all the announced plans. This will mean that we can have significant growth in both CNG and booster compressor sales in F ’20. We continue to have strong inquiries for various packages both in India and from the Middle East. We will also benefit from the new range of products which are being scaled up, the Khione, [Indecipherable] and the Tezcatlipoca range of compressors, which have been brought into the market during the last year.
We are confident that we’ll be able to maintain our growth momentum and we remain committed to meet our aspirational target of being a INR2,000 crore-plus company in the next two years. The company declared a final dividend of rupees INR3, 150%, taking the total dividend to INR5.5, which is 275%. The company’s script is also now being traded in the National Stock Exchange from April 26, F’ 23.
Now I would request Suhas Kolhatkar, CFO, to take us through the financial details. Can you, Suhas?
Suhas S. Kolhatkar — Vice President and Chief Financial Officer
Good evening, ladies and gentlemen. I hope you are able to go through the results which we posted on the BSE and NSE website a little while ago after the conclusion of the board meeting. We also uploaded a presentation on annual reserves on the company’s website. However, for the benefit of those who possibly did not get a chance to go through this, I would summarize annual financial performance for FY ’23. Before I touch upon the various elements of the financial performance, let me first broadly talk about some of the highlights of the year. The company during the year achieved a turnover of INR1,239 crores which MD mentioned, 21% growth over previous year. You would recall that we have been given a guidance of annual growth of 20% plus and we were able to achieve that. This guidance was particularly given knowing that the Quarter 4 is going to be little low, though we had posted close to about 40% growth in the first three quarters.
Export sales, which have contributed to the first three, also contributed to some extent in the Quarter 4, and we did about INR25 crores of exports, taking the total exports to about INR177 crores, as against about INR25 crores, INR30 crores in earlier years. The opening order book was INR100 crores down compared to INR1,250 crores, but as we speak today, which is INR100 crores up from the INR1,250 crores which existed last year.
I’ll now turn to the business results for the year and quarter. Sales for the quarter were higher than the preceding quarter and it stood at rupees INR360 crores, however, 10% lower compared to corresponding quarter of the previous year. As off-take of the CNG compressors was muted due to the high prices prevalent in the market. We had about INR68 crores in the previous year — about INR70 crores in the previous year for CNG, coming down to about INR30 crores in the current year. The full year still however showed a growth over 21% with the figures INR1,239 crores compared to INR1,021 crores. Other income more or less remained same at INR11 crores and INR12 crores. So, our total income for the year was INR1,250 crores as against INR1,033 crores in the last year. With stable commodity prices and better realizations, material cost in Q4 was about 55% compared to 56% in the corresponding quarter of the last year, and also of the preceding quarter. Annual material costs however was higher at 56% compared to 55% due to low margins on export in earlier quarters, which we have talked about. So, as far as employee-related expenses are concerned, Q4 ERE was marginally higher than that of Q3. However, it is more or less in the trend of about INR35 crores per quarter. The annual ERE was, however, higher at INR144 crores compared to INR29 crores as we had to reward our workforce who stood by during the difficult times with the company in the years of COVID and ensured that the growth does not get hampered.
With sales growing in the current year, the percentage of ERE to sales declined by almost 1% and we have got about 11.6% of sales as ERE compared to 12.7% in the previous year. The company has no loans whether term loan or working capital loan on its books, and is a debt-free company. The interest costs reflected in the profit and loss account is on account of interests other than on the borrowings. At this juncture, I would like to state that the company has a net cash position of about INR90 crores as on March 31, ’23, after paying final dividend of the last year, and interim dividend declared in the current year apart from the capex. Depreciation is in line with the previous year and additions to assets and the company invested close to INR42 crores in capex. Other expenses are a mix of variable costs and are at the same level of about 18.7% of sales compared to previous year. There is no significant variation in the level of expenditure and cost controls exercised in the previous year continue in the current year also. Though in terms of absolute value, we might find some variation, but as I said, there it is a mix of fixed and variable costs. As the project sales go up, we have a cost of — certain costs coming out of the projects getting classified in other expenses instead of material costs, such as the subcontracting charges, etc.
EBITDA in the current year is marginally lower to 14.1% of the total income compared to 14.7% in the previous year, which was mainly on account of dropping margins which happened in the first quarter of the exports as indicated in the earlier calls. Annual [Technical Issues] to 11.4% of the total income compared to 11% on the previous year. For the Q4 PBT, it was much lower at 11.6% compared to 18% on the previous year due to lower sales with high ERE and other expenses. PBT of INR143 crores shows a 25% growth compared to previous year’s PBT of 114 crores. Consequently, PAT also rose to about INR108 crores, which is 8.7% higher than 8.2% of the previous year when it recorded a PAT of about INR85 crores.
The company issued 189,400 shares — equity shares during the year under its ESOP scheme. Consequently, paid-up share capital has increased to INR12.93 crores compared to INR12.89 crores. Basic EPS has also improved to INR16.82 rupees per share as against INR13.19 in the previous year. As MD has already spoken about it, about the final dividend of 150%, taking the total dividend for the year to 275% compared to 200%. More or less 93% to 95% of the revenue still comes from the compression segment, and it remains the only reportable segment. Previous year’s figures were regrouped wherever necessary to correspond to the current year — corresponding figures of the current year.
The segment earned a profit of about 18% in the current year as compared to about 18.5% in the previous year. More or less it remains at the same level. [Technical Issues] the year was INR1,140 crores. As a result, the company has an order book of INR1,150 crores as on March ’23. Capital employed in the compression segment also increased by about INR30 crores, particularly in the form of receivables, and lower advances from customers as the order booking was a little lower. Net working capital as a percentage sales rose to about 26% as compared to 22% of the previous year on account of higher receivables and lower advances. We have receivables in terms of days have come down to 96 days, compared to 106 days in the previous year, and the supplies outstanding has also come down to about 71 days compared to 96 days of the previous year.
Most of the investor community is interested in knowing the breakup project and product sales, which continued to be more or less in the same range. About 60% of the business comes from projects and balance from the product.
With this, I would like to start the question-and-answer session. We thought we would give some brief on the operations, the future outlook, and the financial numbers.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Kashyap Javeri from Emkay Investment Managers. Please, go ahead.
Kashyap Javeri — Emkay Investment Managers — Analyst
Thank you very much, sir. Am I audible?
K. Srinivasan — Managing Director
Yes. Please, go ahead, Kashyap.
Kashyap Javeri — Emkay Investment Managers — Analyst
Yeah. I have like three-four questions. The first one is on our Quarter 4 numbers. While I understand that FY ’24 outlook is delinquent but robust, in the Quarter 4, which supposedly is seasonally the best quarter for us, what drove this by end like 10% top-line decline? Was it related to export, because I understand that first nine months is about INR50 crores average? And the last quarter, probably, we did just about INR25 crores odd or so. And besides that, within domestic, would it be only attributable to CNG packages?
K. Srinivasan — Managing Director
There are a couple of things. Generally, the last quarter also used to be times when the large packages viewed to get dispatched. If you see every year, the last quarter always had some big packages for dispatch. This time most of the large packages went in the first three quarters. The export up to three quarters was almost about INR150 crores. The last quarter export was only about INR20 crores odd. So, most of the big packages had all got dispatched for three quarters. There was practically no big package that went out in the last quarter. The CNG dispatches were low, right, through the year. We were significantly lower than even the previous year in terms of CNG dispatches. So, that was not the reason. The only reason is, historically, fourth quarter had some big packages for dispatch. This time, we had none. So, that would be the only reason why top-line was lower by about INR40 crores, INR50 crores than traditionally what we used to do.
Kashyap Javeri — Emkay Investment Managers — Analyst
And second question is usually our yearly sales, if I look at last probably five-six years trend, because the execution cycle is anywhere between six to nine months, the yearly top-line is usually about 1.3 times, 1.4 times of the opening order book. This year, we started the order book at roughly about INR1,250 crores, and ended with the top-line, which is sort of lower than that number. And we are starting this year with about INR1,100 crores of order book. What gives us that confidence? I mean, I understand there is INR180 crores of additional orders which we received in last, about, 25 days. But wouldn’t probably last year also in April we would have gotten some orders would have jacked up April end order book in FY ’22 also? So, what gives us that confidence? Can we sort of go back to that 1.3 times of opening order book kind of a top-line number?
K. Srinivasan — Managing Director
We had explained it before as well that our execution cycles have become better nowadays and it also in a way depends a little bit on the size of the products, the packages that we get. If we get smaller packages, larger numbers, we tend to do it within six months. If there are very large packages, we tend to take eight months and beyond. So, our confidence is that with a larger number of CNG packages and other things going out this year, we should still try and get to at least 1.3 times to 1.4 times. So, we remain the same committed saying, that, look, we will grow 20% plus, how much plus, we will take it quarter-over-quarter.
Kashyap Javeri — Emkay Investment Managers — Analyst
Okay. And one bookkeeping question. If I look at your balance sheet, this other financial assets number which has gone up from together roughly about just about INR91 lakhs to about INR53 crores, so what is in that others category? And second, same on the liability side, other current liabilities have gone down from INR110 crores to INR77 crores. I understand in last year, the audited balance sheet which came in, there were no debts with less than 12-month maturity. So, what is that INR110 crores to INR77 crores? And why I’m asking this question is that when I look at cash flow statement, because of these two line items, it seems like your INR110 crores operating cash flow has come down to roughly about INR35 crores, INR37 crores. So, just if you can throw some light on these two line items in the balance sheet?
Suhas S. Kolhatkar — Vice President and Chief Financial Officer
Yeah. Kashyap, what — I would clarify both these items. See, Ind AS requires to classification of the assets into — of the financial assets based on the initial tenure, right? So, we had kept about INR51 crores of which is — which was considered as surplus for the year, in our fixed deposit with the banks and not — did not invest in the — necessarily in the mutual funds. And that’s why you see INR126 crores mutual funds have come down to INR103 crores. And the other financial assets have gone up from INR91 lakhs to about INR53 crores. So, it’s out of that INR51 crores are fixed deposits with banks with a better rate of return. And these are having the original maturity beyond one year, though the residual maturity is less than one year. And that’s why those have been classified under current assets and Ind AS requires us to classify them not in cash and bank balance, but other financial assets. So, that’s one.
Number two in my brief on the order booking, I said that the order booking was little muted and our working capital as a percentage of sales has also gone up, because the advances received from the customers have come down as a result of lower order bookings. And that is the reason why INR110 crores has come down to INR77 crores.
Kashyap Javeri — Emkay Investment Managers — Analyst
Okay. So, when you mentioned about that INR190 crores cash balance, that is INR103 crores plus INR35 crores of cash plus whatever has been shifted from investments to other financials?
Suhas S. Kolhatkar — Vice President and Chief Financial Officer
No. From bank balance to other financial assets, because this money was kept in fixed deposits. So, either it could have found its place in cash and bank balance — cash and cash equivalents, or bank balances, other than three above, that is cash and cash equivalents, had the original maturity of the investment being less than one year.
Kashyap Javeri — Emkay Investment Managers — Analyst
Right. And final question from my side, on the margin side. Now that generally commodity prices have come down, what should be the margin outlook for FY ’24?
Suhas S. Kolhatkar — Vice President and Chief Financial Officer
See, we have ensured that minimum 18% margins on our compressor business will continue, if not better. And that is what we have been delivering year-on-year. There are certain other non-reportable segments which were bringing down the margins. And we have taken adequate steps to ensure the these effects of other unallocable expenditure comes down, because today, if you see, our annualized business has more or less remained at INR63 crores, INR65 crores. Once this comes down, which we are quite hopeful in getting this down, our overall margins for the company will improve.
Kashyap Javeri — Emkay Investment Managers — Analyst
Okay. I have more questions. I’ll come back in the queue.
Suhas S. Kolhatkar — Vice President and Chief Financial Officer
Sure. Thanks, Kashyap.
Operator
Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address questions from all participants in the conference, please limit your questions to two only. Should you have a follow-up question, please rejoin the queue. Thank you. We have the next question from the line of Aditya Nahar from Alpna Enterprises. Please, go ahead.
Aditya Nahar — Alpna Enterprises — Analyst
Hi, Mr. Srinivasan. First of all, congratulations on your NSE listing. I think it was something which was long pending and long overdue and to the entire team of Suhas and Mr. Jitendra as well. So, congratulations on that. And secondly, Mr. Srinivasan, to you personally, we saw the announcement about your sort of reappointment for the next three years. Just wanted to wish you the best of luck, sir. I have no questions, sir. Thank you so much.
K. Srinivasan — Managing Director
Thank you, Aditya. Thank you very much.
Suhas S. Kolhatkar — Vice President and Chief Financial Officer
Thanks. Aditya.
Jitendra R. Shah — Company Secretary
Thanks, Aditya.
Operator
Thank you. The next question is from the line of Nikhil from Simpl. Please, go ahead.
Nikhil Upadhyay — Simpl — Analyst
Yeah. Hi. Good evening, and congrats on a good set of numbers for the full year and good order booking, which we have discussed. I have two questions. One is on the CNG part of the business. If we look at the total revenue which we have booked, how much profit would be coming from the CNG including the booster and the mother station? And what was that number or percentage — in terms of percentage last year and how is it down this year?
K. Srinivasan — Managing Director
Okay. Last year, we had no booking of booster. We only sold four booster compressors. That is in F ’23. This year, as we speak, we have an order of 80 plus 16, 96. Like you know, the booster compressor are roughly about — the smaller ones are roughly about INR30 lakhs, INR35 lakhs, and the bigger ones are about INR40 lakhs, INR45 lakhs. So, that’s the kind of start-up we have. On a good year, the CNG compressor business is roughly about 200 or more. Last year was significantly lower than that.
Suhas S. Kolhatkar — Vice President and Chief Financial Officer
Roughly about 30% plus.
K. Srinivasan — Managing Director
200 numbers, or 200 compressor?
Suhas S. Kolhatkar — Vice President and Chief Financial Officer
Numbers? Yeah.
K. Srinivasan — Managing Director
CNG package is about 200 or more. Last year it was significantly lower than that. In fact, that even if there is a catch-up, we should get back to at least 250 plus for the CNG packages and at least about an equal number of boosters. So, overall it should give us good numbers. We will see how it plays out, like we are very hopeful that this catch-up will happen. First indications are it is happening. Let’s see.
Nikhil Upadhyay — Simpl — Analyst
Okay. Thanks for that explanation. Second question was, sir, if we look at like last two, three years when the CNG business opportunity, when we had started talking about and the opportunity which it can evolve over 8 years, 10 years, from where we started to today, is there a change in the assumptions or is there any change in the way the business is happening in terms of tenders or in terms of order booking from the CNG companies? Is there a significant delay as compared to what we have thought? Just wanted to know like what the thoughts two or three years back and what we are seeing on the ground, how much of a deviation are you seeing?
K. Srinivasan — Managing Director
See, this is a fairly complex question in the sense the tendering or getting of the gas connections by these gas companies has not changed. But they all got a 2-year high because of the COVID. So, they are all being going slow on their execution. The whole of last year, the availability of gas and the price of gas was such that the gas companies actually were losing money, so they were not keen on installing or putting up more new stations. Even where the orders were placed for our compressors, they were not keen to give clearance for us to even deliver and install. So, these things are likely to change. As we speak, the Kirit Parikh recommendations have been accepted. You’d have seen that already being done. So, there should be an acceleration by these gas companies to complete what they have committed when they all won these tenders. Consequently, there should be an equal clearance coming up for us to execute quickly.
Nikhil Upadhyay — Simpl — Analyst
Okay. Just one extension here. When the companies won the GA, they also have a performance guarantee which they have to the PNGRB that in terms of the network which will be laid out or the connections. Now, in the last three years because of COVID, because of last year as we are saying, they were not ready on capex, would you say a lot of it has to bunch up in next three, four years? Or, how do you see the scenario playing out now?
Suhas S. Kolhatkar — Vice President and Chief Financial Officer
Yeah. Suhas here. Let me answer this a little differently. When this COVID issue had [Technical Issues] the companies had also PNGRB for the minimum — considering the minimum work program. Now that was considered by PNGRB to some extent and that period has ended by March 31, ’23. So, we should see all those backlogs coming up the current year and in next one or two years to catch up with the original plan of installation of close to 1,000 numbers of gas stations coming out of 9th and 10th round. And in addition to that, you are aware there are about 62 GAs were added in the 11th round which should also add to further demand. So, we are hoping for a better CNG business in the coming years.
Nikhil Upadhyay — Simpl — Analyst
Sure. I’ll come back in the queue. Thanks.
Suhas S. Kolhatkar — Vice President and Chief Financial Officer
Thank you.
Operator
Thank you. The next question is from the line of Raj [Phonetic] from Arjav Partners. Please, go ahead. Mr. Raj, your audio — we are not able to hear you, sir.
Raj — Arjav Partners — Analyst
Now it’s fine?
Operator
Yes, sir. Please, continue.
Raj — Arjav Partners — Analyst
Now, I think you can hear me. Yeah. So, wanted to know how much of capex have we done in FY ’23?
K. Srinivasan — Managing Director
We have committed INR42 crores including capital work in progress.
Raj — Arjav Partners — Analyst
So, okay, INR42 crores. And how much do you expect to do in FY ’24?
Suhas S. Kolhatkar — Vice President and Chief Financial Officer
Similar.
K. Srinivasan — Managing Director
About the same or a little plus.
Raj — Arjav Partners — Analyst
Similar range? All right. And for FY ’24, am I right, you have indicated a growth of 20% plus?
K. Srinivasan — Managing Director
Yeah. See, our target of INR2,000 crores in two years remain and to get there, we will have to do 20% plus. The order inflow and what is happening gives us the confidence that we should get 20% plus.
Raj — Arjav Partners — Analyst
20% plus? All right. And is there an O&M part into it?
K. Srinivasan — Managing Director
Yes. We have been giving this clarification that our spares and O&M combined is very roughly about 15% of our total business.
Raj — Arjav Partners — Analyst
All right. So, O&M is around 15%, right?
K. Srinivasan — Managing Director
Spares and O&M all combined.
Raj — Arjav Partners — Analyst
All combined is 15% of the overall business?
K. Srinivasan — Managing Director
About 15%.
Raj — Arjav Partners — Analyst
No, I still didn’t get it. Can you explain it to me?
K. Srinivasan — Managing Director
See, the operational maintenance [Speech Overlap] I
Raj — Arjav Partners — Analyst
How much is the O&M part in the overall sales?
K. Srinivasan — Managing Director
Can you hear me?
Raj — Arjav Partners — Analyst
Yeah, go on.
K. Srinivasan — Managing Director
Yeah. So, the O&M and spares combined, we have spare sales as well, the overall combined is roughly about 15%.
Raj — Arjav Partners — Analyst
Okay. Understood. And also, can we expect that EBITDA is higher on O&M side?
Suhas S. Kolhatkar — Vice President and Chief Financial Officer
The EBITDA — we don’t split between O&M and the other main compressor package, because when the orders are won, it is a packaged order. It is gas compression plus O&M. So, the margins are generally the same across the order, about 18% that come from the overall compression segment.
Raj — Arjav Partners — Analyst
All right. Understood. Yeah. Okay, sir. Thanks. Bye.
Suhas S. Kolhatkar — Vice President and Chief Financial Officer
Thanks.
Operator
Thank you. The next question is from the line of Levin Shah from Motilal Oswal AMC. Please, go ahead.
Levin Shah — Motilal Oswal AMC — Analyst
Yeah. Thanks for the opportunity. Sir, my first question is on the exports. So, out of the total order backlog, what would be the order backlog in exports?
K. Srinivasan — Managing Director
The order backlog in exports is very little. We have a couple of orders going out in the Middle East and Southeast Asia, less than INR50 crores.
Levin Shah — Motilal Oswal AMC — Analyst
Okay. Because at the end of Q3, we had around INR100 crores kind of export order backlog. So, that has come down. So, is there any specific reason that we haven’t had inflows from exports at least in this quarter?
K. Srinivasan — Managing Director
Yeah. We have been saying that the finalizing of export orders are not happening. We are still in the midst of talking some very large orders, but they’re just not getting finalized. They’re all getting delayed.
Levin Shah — Motilal Oswal AMC — Analyst
Sure. And by when do we see these orders getting finalized? So, this, I believe, wouldn’t have been tendered out yet, right?
K. Srinivasan — Managing Director
No, we are not lost it, they’ve not been finalized. So, we’ll have to give it some time. See, we’ve been expecting every month that we will get it during the month and so we’re still waiting. We hope that this will happen.
Levin Shah — Motilal Oswal AMC — Analyst
And my second question is on the margins, sir. So, directionally what we have said is that at the EBITDA level, we will move to kind of 17%, 18% percent net of margins in the medium term. But if you look at last three years, despite good growth in ’22 and ’23, our gross margins as well as EBITDA margins have broadly remained flat. So, what are the key drivers that will actually push this margins higher?
K. Srinivasan — Managing Director
We have explained. I think Suhas had mentioned that the compression segment margins are still tracking at where it is, about 18% plus. The rest of it is what is dragging it down. There are some structural corrections. There are some operational corrections. We are working on it and hopefully we should complete this during the next year. So, that would take us directionally more towards the 18% of the company.
Levin Shah — Motilal Oswal AMC — Analyst
And this — so, this question to Suhas sir, is what are these losses around like INR60 crores, INR65 crores that we are incurring under unallocated end?
Suhas S. Kolhatkar — Vice President and Chief Financial Officer
So, these are not losses. These are total expenses. Unallocated, what do you call, this is the unrecognized segment. It basically looks at corporate overheads, depreciation, etc.
Levin Shah — Motilal Oswal AMC — Analyst
Okay. All right. But this amount seems to be substantially higher like around [Speech Overlap]
Suhas S. Kolhatkar — Vice President and Chief Financial Officer
It’s at overall the same level because depreciation coming from — you remember our erstwhile transmission business, which we used to report, which is a capital-intensive industry, it always had a larger depreciation. All that cost will come in over there. Because we have all the non-reporting revenue being shown up upwards, [Indecipherable]
Levin Shah — Motilal Oswal AMC — Analyst
But what we’re saying is, essentially, this will come down?
Suhas S. Kolhatkar — Vice President and Chief Financial Officer
It has to come down. That is what we are targeting. So, that overall margins, overall EBITDA margins, PBT margins for the company will improve. And you should see something positive happening in this current year.
Levin Shah — Motilal Oswal AMC — Analyst
Sure. Thank you, sir, and all the best.
Suhas S. Kolhatkar — Vice President and Chief Financial Officer
Thank you.
Operator
Thank you. The next question is from the line of Jonas Bhutta from Birla Mutual Fund. Please, go ahead.
Jonas Bhutta — Birla Mutual Fund — Analyst
Hello. Am I audible, sir?
Suhas S. Kolhatkar — Vice President and Chief Financial Officer
Yeah. Hi. How are you?
Jonas Bhutta — Birla Mutual Fund — Analyst
Fine, sir. One on the revenue target that we have for INR2,000 crores, even if we were to sort of stretch it three years, right, that would sort of imply more like a 18% to 20% top-line CAGR. In your opinion, what needs to happen — what are the key levers other than the domestic CNG piece that needs to kick in for us to sort of, A, achieve that, or even sort of front-load it to the two years that Mr. Srinivasan — you seem to commenting that we’d try and get to that in two years? So, what really needs to kick in for that other than the CNG piece?
K. Srinivasan — Managing Director
I think couple of good things are happening. I’ll come to the CNG part later. The air compressor business itself is seeing tremendous traction. To give you some numbers to give you the direction we’re going, see, the previous year, we did roughly about 3,000 odd compressors. And that gave us a turnover of roughly about INR1,000 crores plus, which means our per-package cost was roughly about INR30 lakhs. This year, we actually did only about 2,500 odd compared to delivering INR1,230 crores odd, which means we’re tracking almost INR50 lakhs per package. This is an average number. The size of packages and the engineering that is going into this has changed over a period of time. That is tracking well, which means our competitiveness in packaging is becoming better, which makes us more competitive not only in Indian market but also for exports. Now, this allows us to track larger packages, larger projects, etc., which were otherwise all being imported into India. We expect to grow further both in the air compressor business as well as in the refrigeration compressor business. Gas compressor business, we’ve already been talking about CNG getting us more revenue and the project orders of Middle East giving us more revenue as well. So, overall, I think there are multiple legs on this strategy. Several of these things are working well with our new products, etc., also adding to our competitiveness. 20% plus will come from a combination of things. It is not dependent only on the CNG growth.
Jonas Bhutta — Birla Mutual Fund — Analyst
Understood. So, can you give us a breakup — broad breakup of the compressor sales for the year?
Suhas S. Kolhatkar — Vice President and Chief Financial Officer
Yeah. Like we said earlier, air is roughly about 25%, the gas business is roughly about 45%, and the refrigeration business is roughly about 30%, 35%. So, that split will remain. And each of them has got its own growth path that we’re working on and that continues to grow in that place.
Jonas Bhutta — Birla Mutual Fund — Analyst
So, the slowness in C&G in FY ’23 was taken care by which segment, as in which product line that helped us keep the…
K. Srinivasan — Managing Director
[Speech Overlap] export packages which us. So, CNG is a domestic business that flattened. It was taken up by almost INR140 crores odd of gas package export.
Jonas Bhutta — Birla Mutual Fund — Analyst
Understood. And my last quick question to Suhas sir was, I don’t know whether you’ve touched upon this, are the other expenses in 4Q was slightly elevated despite a lower top-line. So, did you mention that the subcontracting charges are sitting there, or that was a function of the nine-month results where — because where exports were higher, if you can just clarify that?
Suhas S. Kolhatkar — Vice President and Chief Financial Officer
Subcontractings and the packages, etc., are sitting there, because almost 60% of our business came from packages. And that cost is sitting there.
Jonas Bhutta — Birla Mutual Fund — Analyst
So, this was in fourth quarter?
Suhas S. Kolhatkar — Vice President and Chief Financial Officer
Fourth quarter, even if you look at annual figures, you will find the similar rates.
Jonas Bhutta — Birla Mutual Fund — Analyst
Understood. Fine, sir. Thank you, and I’ll come back in the queue and all the very best.
Operator
Thank you. The next question is from the line of Parin Gala from SageOne. Please, go ahead.
Parin Gala — SageOne — Analyst
Yes, sir. Good evening, and congratulations, sir, on your extension. Sir, you mentioned that in the export order, our margins are very, very thin, but it establishes us as a reliable player. So, going forward, do you think that these export orders will now fetch us higher margins, nonetheless, or the margins would still remain at these levels?
K. Srinivasan — Managing Director
Export products, by definition, the margins are about the same as the domestic, except in the first large order that we executed, where we had very, very thin margins to make an entry, then we did have some challenges because of the deliveries and other things, and consequently, our costs went up a little bit in the couple of other orders. But as the process and the way we hope for export orders would be targeted to have very similar margins as domestic and we believe that’s sustainable. We will be there as we scale up.
Parin Gala — SageOne — Analyst
Okay. Great. And sir, today, there was a news piece in the paper that I was watching that the biogas station which the government had planned, they are still not changing the target of 5,000 stations by FY ’25. So, are you seeing some traction on the biogas side, that we are ready with the product and all that? So, are we seeing some inquiry there?
K. Srinivasan — Managing Director
We didn’t get any big orders, but we have got a few orders. I should say that, yes, the inquiries are larger, and from getting no orders, we getting sporadic orders now. So, we have hired a couple of orders come in, in April, a couple of orders, as we speak, they were finalizing. So, I think there are more orders coming in than what was happening last year. We’re also developing more efficient compressor, which is really in sort of a package of two, we’ll now come up with one compressor which will take care of everything. See, the whole system now all of us are working together. That means the gas generation companies, the equipment builder, all combined, that these packages need to be scaled down to a level where smaller biosource companies can also have biogas plants. So, unless this happens, this 5,000 biogas plan will not happen. So, there is a, let’s say, a technical challenge that is there to get the entire plant scale down and the investments down to a level where smaller biosource matters can all be used. So, that’s what is happening. I think it’s work in progress. But the intention of the government is very clear. 5,000 packages must be done within the next three to five years, and I think they will try and get there.
Parin Gala — SageOne — Analyst
Sure, sir. Thank you so much. All the best.
K. Srinivasan — Managing Director
Thank you.
Operator
Thank you. The next question is from the line of Vishal B. from Max Life. Please, go ahead.
Vishal B. — Max Life — Analyst
Hello. Mr. Srinivasan, could you elaborate on the air compressor business as to how the new product is coming out and how is the market doing and how is our market share moving there? Thank you.
K. Srinivasan — Managing Director
Yeah. Thank you, Vishal, it’s happened like this. The previous year, we predominantly had screw compressor as a volume compressor. Last year, it was [technical Issues] high-value reciprocating compressor packages as well as a scale-up of a centrifugal compressor. We’ve been talking about it for some time now, and today we can say with confidence that we deliver the finest Tezcatlipoca range of centrifugal compressors. People are extremely happy with these compressors. But it will scale up further as we go forward. What we think will happen going forward is we would become the preferred choice for air compressors which are a part of a process, and not just a stand-alone utility which is just like a small thing like a painting or a sharp edge, very a normal screw compressors will work. We are there in the screws as well. But we would become a very dominant player in the more engineered air compressor packages. That’s where I think it’s moving, and I think that’s an interesting development as well, because not only will our margins be better, but it will be more competitive in these areas.
Vishal B. — Max Life — Analyst
How has the market has been doing? Have we seen any slowdown in inquiries on the air compressor side?
K. Srinivasan — Managing Director
There has been a significant slowdown in the standard compressors after the big boom that everybody had coming out of the oxygen compressor business. But that has mostly been in the screws. So, we have been less impacted compared with others who will lose it predominantly with screw compressors.
Vishal B. — Max Life — Analyst
Ex of the boiling [Phonetic] demand that we saw from oxygen plants, ex of that, could you say, sir, which are the segments that are doing badly and which are the segments that are doing relatively better?
K. Srinivasan — Managing Director
I will tell you what are the segments that are doing well.
Vishal B. — Max Life — Analyst
Yeah.
K. Srinivasan — Managing Director
Pharmaceutical, chemical, construction, metal, ferrous and non-ferrous, all of them are doing well.
Vishal B. — Max Life — Analyst
Okay. And would we have gained some market share because of these new compressors in the areas?
K. Srinivasan — Managing Director
In the areas I mentioned, we have gained market share for sure.
Vishal B. — Max Life — Analyst
Okay. Sir, I think lastly, could you say that…
K. Srinivasan — Managing Director
I should add cement into that. Cement is also another area of big growth.
Vishal B. — Max Life — Analyst
Fair enough. And what could have been the growth for air compressors products for FY ’23, financial year ’23?
K. Srinivasan — Managing Director
Like I said, we lost the entire oxygen compressors. So, number-wise, it was actually a decline.
Vishal B. — Max Life — Analyst
Okay.
K. Srinivasan — Managing Director
Volume-wise, it was a growth. So, I would — I gave you some kind of a measure of the ticket size being overall growing from 30 to 50.
Vishal B. — Max Life — Analyst
And could you give the growth that you registered for a FY ’23 for the refrigeration segment?
K. Srinivasan — Managing Director
That’s a tough one. See, overall. I think, you should take it that 20% value growth is what we had. In the refrigeration, again, we had relatively flat volumes and a larger growth coming from value because some of the bigger projects were executed. Predominantly, similar situation also on the gas. Flat volumes and larger packages.
Vishal B. — Max Life — Analyst
Sure. Fair enough. Thank you.
K. Srinivasan — Managing Director
Thank you.
Operator
Thank you. The next question is from the line of Prolin of Goldfish Capital. Please, go ahead.
Prolin — Goldfish Capital — Analyst
Yeah. Hi. Mr. Srinivasan, fir of all, congratulations on getting the extension. It’s good to see stability at the top of the company. Couple of questions from my side. One would be, in terms of this INR170 crores odd of exports that we have done and the order book is only INR50 crores, so I was just trying to understand that we are playing in the export market in a very niche kind of a segment, right? So, can you help us understand as to which is the segment and how do we expand our play in overall export market, because in the last call, you had mentioned that now that there is a stability in gas prices, there is — the urgency to probably go ahead with some of the projects is no longer there? So, how do we ensure that given that we are a very small size in the overall scheme of things in the overall export opportunity size, how do we expand our play here?
K. Srinivasan — Managing Director
Yeah. That’s a pretty big question. First of all, thank you for the — your good wishes. Let me say what we will do. What we realized is these big packages are taking longer time to happen and it also brings in an element of uncertainty in terms of both the timing as well as this execution. So, what we’re now specifically focusing are the smaller packages. It could even be sub-packages. You could get them quickly, finish them within four to six months, and that sort of fits well with our scheme of things. We are focusing on this We have, as we speak, come very near completing a couple of them. This could be in Southeast Asia. We have taken a specialist, again, from Southeast Asia for this purpose. And this will go faster this year. We are working on those big packages as well, the large gas-gathering stations, gas-filling stations, off-gas collection. And so, these are bigger packages. We’re working on both. But the smaller ones are the ones we will run after and seek to get in larger numbers to accelerate our growth, because in this niche, we are very competitive, we are very quick, and we can do it faster than others. So, that’s what we’re looking at. 50 is too small a number, we need to get at least — I was hoping that before we’d have this call, we’d have one large all finalized, it’s still not finalized. A couple of big orders will change the number. So, let’s hope that when I talk to you again, that I can tell you if we have these orders in.
Prolin — Goldfish Capital — Analyst
That’s great, sir. Just extension to this would be, we are not thinking of getting into pure distribution of our products in the export market, right? And is there a reason why we are not thinking, or will it come in the future date sometime?
K. Srinivasan — Managing Director
See, what we have been explaining is that we are more of a engineered package supplier. The compressor is a part of our total package. So, this is very specific to each application, each installation. So, there’s a lot of engineering that happens around it. So, we cannot have a standard distribution. We can’t have something sitting outside. This is possible for standardized air compressors,. or to some extent, in the standardized bare shaft refrigeration compressors. We do a small quantity of these. That’s what gives us about INR20 lakhs, INR30 lakhs of business, but that’s a very small part. The larger part is the engineered packages. This is where we have a unique and sustainable advantage. See, these packages — the very large ones can be built by large EPC contractors. There are a few out of India that you know of. And most of it otherwise being built out of companies in Europe or maybe South Korea or from the U.S. This is a space where we’re extremely competitive, we’re very, very agile in this space simply because we can take up things which others cannot. We have a terrific domain skill in terms of engineering capabilities and integrating capabilities, and we’re good at this. We see that this is a space that we will take and grow.
Prolin — Goldfish Capital — Analyst
Sure, sir. Thank you for that. Sir, the second question would be on this other segment, which is still dragging our overall company-level margin. Now in the past, we have been talking about that there were some motors which we used to sell it to transmission segment. But we intend to use that internally for our air compressor segment, if I’m not wrong. And also we had that railroad part of the business as well. So, why is it taking slightly longer than probably expected in getting this, I mean, the loss — lower margin on this at the company-level margin?
K. Srinivasan — Managing Director
The transmission business is being repositioned to meet our internal requirement. That’s happening. In fact, the so-called — there is actually no cash loss, there is depreciation still on it. A lot of it is being taken over with our internal work, etc. The Roadrailer business, again, we are looking at multiple choices. Every time we get to a state saying that, look, can we get a partner, we are in discussion and talk about it, at the same time, there’s [Indecipherable] and other things, they’re giving us a ray of hope that they would try and revive this. And we didn’t want to spend all these years and then give it away at a time when things are getting to pick up. So, it’s been going up and down. But like what Suhas had also mentioned, we will take a very definitive call. I think we have seen — we have done our best in this. We have given it all kinds of possibilities and chance and you will see some very definitive calls during this year.
Prolin — Goldfish Capital — Analyst
That is very good to hear, Srinivasan sir, because — I mean, it would be maybe better in somebody else’s hand and maybe somebody else can create value out of that. And the last question would be on this IN2,000 crores target in two years’ time. I just wanted to understand that as we stand and as we look at next two years, is it fair to assume that maybe CNG orders are going to come much more quicker than what they were last year? Plus, I mean, we have made a mark in some of these MENA markets as well wherever packages are doing well. And some of the new products which we have launched in air compressor are now very well established. So, in that sense, I mean, can we hold you to that two-year INR2,000 crores number rather than three-year INR2,000 crores target number given all these tailwinds that are there in our business?
K. Srinivasan — Managing Director
You can hold me to — I’m going to be around to see that it happens.
Prolin — Goldfish Capital — Analyst
Thanks a lot, sir, and all the best.
K. Srinivasan — Managing Director
Thank you.
Operator
Thank you. Ladies and gentlemen, we will request all the participants to limit their questions to one per participant. Should you have a follow-up question, please rejoin the queue. Thank you. We have the next question from the line of Mihir Carnelian Capital. Please, go ahead.
Mihir Manohar — Carnelian Asset Management — Analyst
Yeah. Hi. Thanks for giving the opportunity, and congratulations on the extension. I mean, first I largely wanted to understand the increase in other expenses. Can you clarify that bracket because of subcontracting…
Operator
Sir, there is an echo from your line. There is full of echo. So, could you please use your handset to ask again?
Mihir Manohar — Carnelian Asset Management — Analyst
Yeah. Sure. Is it audible?
Operator
Yes, sir. Please, continue.
Mihir Manohar — Carnelian Asset Management — Analyst
Yeah, sure. So, first of all, congratulations on the extension.
K. Srinivasan — Managing Director
Thank you.
Mihir Manohar — Carnelian Asset Management — Analyst
Sure, sir. That’s really good to know. And I just wanted to understand the other expenses. I mean, Suhas sir explained that there is an increase in subcontracting cost because of the [Technical Issues] business which was there. So, just wanted to understand the quantification of the same, because when you see on a Y-o-Y basis, it’s like a 6-percentage point increase, which looks to be substantial increase. So, is there any other element which has led to this increase in other expenses, because what becomes really difficult to understand is how are we going to have a 17%, 18% kind of EBIT margins at the company level given the increase in other expenses which has been there? And plus the INR63 crores, INR65 crores kind of, I mean, total expenses that are sitting, you mentioned that you are taking steps on the reduction side. But if you can throw some light, what kind of reduction can one expect over maybe the next one year or the next two years, that will be really helpful, sir, that was there.
And the second question was just on the exports side of the business. I mean, you mentioned that there are good inquiries specifically which are coming on Europe side, because demand for natural gas is something which is coming back. Sir, just wanted to get an understanding as to what is the on-ground inquiries? What are the kind of inquiries that you’re seeing and what is the quantum and value of inquiries that you are seeing specifically from Europe natural gas?
K. Srinivasan — Managing Director
Let me answer the business part of it first before Suhas comes to the margins. The inquiries are not so much from Europe. Actually, these are projects designated to serve European requirements. So, most of it is actually LNGs and others that are being done in the Middle East to serve the newer requirement in Europe because Europe is going more and more towards natural gas through LNG route imported out of the Middle East. So, that’s a little clarification. We have significant inquiries that we are on the verge of — all technical discussions are complete, commercial negotiations going on. Most of them would be in — I don’t want to give exact country, but all of them are in the MENA region, all of them are in Middle East, and we should have some of them, at least, finalized in the next month or so. So, that would actually give us the advantage. All of them are into gas collection station, gas cooling stations, gas separation units, etc. So, they’re all by and large into — gas cooling would go into the LNG terminals, etc. So, by and large, around natural gas process all in the Middle East.
As far as the business is concerned, Suhas, the margins side?
Suhas S. Kolhatkar — Vice President and Chief Financial Officer
Yeah. Mihir, mostly if we look at our business, the variable costs — the other costs which is, as I’ve said, the mix of fixed and variable costs. So, the subcon charges, which is nothing but the packaging charges, we’ve got almost 60% of our business which came from the projects, the packages, rather, I would say — I will use the word packages including exports, and all that packages costs apart from the material, basic material, the package building costs, so which is — which we call it as subcon charges. Similarly, we also execute the O&M contracts along with the supply of compressors. So, that also involves sort of the subcon charges because there is some force that we use instead of our deploying directly from our roads, certainly subcontractor, certain activities. So, overall, on INR750 crores plus, which is about 60% of our total business, we have some spend something like, I think, INR110 crores, INR109 crores odd maybe. So, which is about 14%, 15%. And if you look at previous year, we had a similar percentage. It’s sheerly the volume growth that has actually resulted into increase in subcon charges. That’s — but it doesn’t go into the material costs as per the [Indecipherable] It goes into other expenses, and that is where this variation is seen. So, as far as fixed costs are concerned, there is hardly any major variation. The normal activities — pre-COVID level activities are back so travel cost has gone up to some extent to pre-COVID levels. And there were some plant upgradation costs that were incurred during the year. So, otherwise, other than that, we don’t have incurred any unusual costs which sits in other expenses.
K. Srinivasan — Managing Director
Just to add a little bit on the flavor of what we’re trying to do. See, there are a significant amount of work that we try and get outside, and this was meaningful when we were doing these packages in few numbers. As we do more and more of these packages and we’re getting those and we’re also looking at timescale of wanting to do this quickly, we are, like we mentioned in the new opening comment, trying to establish our own in-house capability and enhanced capability for both fabrication as well as forging at Nashik. Part of the capex last year that is committed to this. This is being done and this is being scaled up. So, this is how we keep saying that over a period of time, this will allow us gradually to see that this — as the percentage will start falling, because it will allow us to do things in house. One is, it improves margins, and more importantly, it also ensures that we execute our projects much faster, much quicker. So, that’s the way it’s working. It’s sort of enhancing our value chain advantage.
Mihir Manohar — Carnelian Asset Management — Analyst
Sure. Yeah. And just on this INR62 crores to INR65 crores of expenses which are there. So, what would be the corporate overhead out of this transmission business expenses? And what kind of reduction can we expect over then next year and next two years?
Suhas S. Kolhatkar — Vice President and Chief Financial Officer
I think you can say roughly about one-third of that could be — would be corporate expenses. We — our intentions are to get rid of the two-third of the costs.
Mihir Manohar — Carnelian Asset Management — Analyst
Okay. And this is what we are targeting to improve by?
Suhas S. Kolhatkar — Vice President and Chief Financial Officer
Sorry?
Mihir Manohar — Carnelian Asset Management — Analyst
I mean, what is the timeline for improvement in the two-thirds of the costs? So, we are targeting [Speech Overlap]
Suhas S. Kolhatkar — Vice President and Chief Financial Officer
It’s two years’ time, because this year we will work on it, you will see the full year’s effect maybe next year.
Mihir Manohar — Carnelian Asset Management — Analyst
Sure. Yeah. That’s it from my side. Thank you.
Suhas S. Kolhatkar — Vice President and Chief Financial Officer
Okay. Thank you.
Operator
Thank you. Ladies and gentlemen, this would be the last question for today, which is from the line of Sanjaya Satapathy from Ampersand. Please, go ahead. As the current participant has left the queue, we move on to the next participant. And the question is from the line of Dhawan Shah [Phonetic] Please, go ahead.
Dhawan Shah — — Analyst
Thanks for the opportunity, sir. So, I have a question on that air compressor math, which you highlighted that in last year, we supplied some what around 3,000 compressors — sorry, 2,500 compressors, versus the FY ’22 dispatches was roughly 3,000. And the revenue from air compressor was roughly INR300 crores odd based on the 25 percentage metric. So, I cannot understand the math. So, in one package, is that like four compressors was there, or how is the calculation, because the per compressor — per package cost you mentioned is INR50 lakhs, and the 25 compressors you have supplied, so…
K. Srinivasan — Managing Director
Dhawan, I think I’ve confused you with my data. I was telling you the total number of compressors produced across the company in all the three verticals and the total sales. So, the package cost is — air compressors hardly have much of packaging. Most of the big packages would have been from the gas and the refrigeration. So, to give you a flavor of how compressors overall goes along with engineering was why I gave this number. Air compressor packages per se would not be at that kind of an average value. It will be significantly lower.
Dhawan Shah — — Analyst
Okay. And in terms of the numbers, can you share what would be the overall plant-wise capacity for the compressor across the all three verticals? And at what utilization are we operating right now?
K. Srinivasan — Managing Director
See, the compressor building capacity of KPCL, we can do maybe 5,000-plus compressors. That’s not an issue at all. If you’re just building compressors, we can build much more than 5,000 compressors.
Dhawan Shah — — Analyst
Okay. Got it. And in terms of the order book breakup, can you share the breakup between product and project business out of this INR1,450 crores odd right now?
K. Srinivasan — Managing Director
Same, Dhawan, about 60% from the projects and about 40% from the products.
Dhawan Shah — — Analyst
Okay. And right — and…
Suhas S. Kolhatkar — Vice President and Chief Financial Officer
So, it’s more or less same between air, refrigeration and gas.
Dhawan Shah — — Analyst
Okay. And given that we are targeting roughly 20% Y-o-Y growth in terms of the overall revenue, which means that we may end up roughly INR1,500 crores odd top-line. And the export business order book is roughly INR25 crores or INR30 crores odd. So, is it fair to assume that the domestic revenue would be roughly INR1,300 crores, INR1,400 crores odd, or maybe you are expecting that the export pie will be catch up maybe in the second half of the year, the INR170 crores odd top-line which we have recognized last year? So, do you foresee the same number, which we can do this fiscal, or there can be some growth because of the the order order book sluggishness?
Suhas S. Kolhatkar — Vice President and Chief Financial Officer
I believe it is going to be a mix of both. There will be some export orders which will come in the next 11 months and will also get executed. But as we said in the call and explained, the growth will come from the CNG compressors as well in the current year, which actually the drop was compensated by the [Technical Issues] in the current year. So, if you look at overall, despite the drop in CNG compressors, we had 20%, 21% growth despite the drop in oxygen compressor, a substantial growth, which is a substantial drop in the current year. We still grew our air compressor business by about 20% plus actually. So, this product line will continue to contribute. All three product lines will continue to contribute to the growth. And exports will be perhaps added, I don’t know, let’s say, icing on the cake.
Dhawan Shah — — Analyst
Okay. Got it. And the CNG packages you mentioned, roughly 250 packages we can do this fiscal and the similar number will be for the booster. So, that means the CNG packaged cost is roughly INR1 crore? Is that correct?
Suhas S. Kolhatkar — Vice President and Chief Financial Officer
About INR1.2 crores to INR1.3 crores.
Dhawan Shah — — Analyst
Okay. So…
Suhas S. Kolhatkar — Vice President and Chief Financial Officer
And one-third of that would be about — 40% of that would be the booster compressor. And as MD explained in the opening remarks, we already have about 80 numbers orders for booster compressors in hand booked at in the month of April.
Dhawan Shah — — Analyst
Okay. So, we can do roughly INR400 crores to INR500 crores odd revenues from the CNG…
Suhas S. Kolhatkar — Vice President and Chief Financial Officer
I think you can calculate that. I don’t want to… Like I said, I’d just take my calculator [Indecipherable]
K. Srinivasan — Managing Director
We will — let’s grow quarter-by-quarter. I think we have today booster orders, we have CNG orders, and I think hopefully, we should get them all done and we’ll take it in the quarter.
Dhawan Shah — — Analyst
Sure, sir. And the last one is on the Khione compressor. So, any update on that? What could be…
K. Srinivasan — Managing Director
It had a rather slow start to this. The compressors are performing brilliantly. Here, it is the establishment and acceptance of customers and then conversion. I think we are going through that phase. Hopefully, we should see scale-up in the second and third quarter.
Dhawan Shah — — Analyst
Sure, sir. Thank you so much, sir.
K. Srinivasan — Managing Director
Thank you, all, very much. Thank you.
Operator
Thank you. Ladies and gentlemen, that was the last question for today.
I would now like to hand the conference over to the management for closing comments. Over to you, sir.
K. Srinivasan — Managing Director
Yeah. So, let me say, thank you, all, very much for your patience and confidence in the company and understanding a rather difficult business because quarters don’t sort of easily come through in this case. We’re not able to predict on a quarter, but we’re able to predict more from the year, full-year point of view. We expect over a period of time, the business will become far more smooth, and that’s our target, really, to get the business to become more smoother so that we can predict quarter-on-quarter. We’ll get there. But the overall competitiveness of the business and the opportunity to grow remains very strong. So, thanks for supporting us and having patience with this company and we hope that we will not disappoint you going forward.
Thank you, all, very much.
Operator
[Operator Closing Remarks]