MTAR Technologies Ltd (NSE: MTARTECH) Q4 2025 Earnings Call dated May. 23, 2025
Corporate Participants:
Srinivas Reddy — Managing Director
Gunneswara Rao Pusarla — Chief Financial Officer
Analysts:
Unidentified Participant
Vipraw Srivastava — Analyst
Meet Jain — Analyst
Balamurali Krishnan — Analyst
Utkarsh Maheshwari — Analyst
Aayush Bansal — Analyst
Piyush Sevaldasani — Analyst
Balasubramanian — Analyst
Maitri Shah — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to MTA Technologies Limited Q4 FY ’25 Earnings Conference Call.
As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assessions during the conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Vidi from MUFJ Interim Investor Relations. Thank you, and over to you, ma’am.
Unidentified Participant
Thank you. Good morning, everyone. On behalf of Emta Technologies Limited, I extend a very warm welcome to all the participants on Q4 and FY ’25 earnings discussion call. I hope everyone had an opportunity to go through our investor deck and press release that we have uploaded on Exchange and the company’s website.
I would like to give a short disclaimer before we begin the call. This call may contain some of the forward-looking statements, which are completely based upon our belief, opinion and expectations as of today. The statements are not guaranteed for a future performance and involve risks and uncertainties.
With this, I would like to hand over the call to Srinivas, sir. Over to you, sir. Thank you.
Srinivas Reddy — Managing Director
Hello and good morning to everyone. Thank you for taking the time to join us today. Today on the call, I’m joined by Mr, Chief Financial Officer; Ms, Head Strategy, Investor Relations; and Orient Kapler, Investor Relations Partners.
We have uploaded our updated investor deck, press release and results highlights on the stock exchanges and company website. I hope everybody had an opportunity to go through the same. We are pleased to inform you that we have delivered a growth in FY ’25 with revenue from operations at INR676 crores, representing 16.4% year-on-year growth and EBITDA of INR120.9 crores, demonstrating 7.2% year-on-year growth.
The growth in revenues is primarily driven by increase in wallet share with existing clients and addition of products from new customers. Our margin is slightly lower than the estimates by 200 basis-points because of certain spillover of execution of new projects in aerospace and defense in Q4 to-Q1 FY ’26. In FY ’26, we look-forward to a 25% growth in revenues on a conservative note with 21% EBITDA margins plus-minus 100 basis-points.
We anticipate a sequential improvement in EBITDA margins in FY ’26 due to operating leverage and scale-up in-production of new products developed over the past couple of years. Notably, we have successfully executed total units for various multinationals and additionally, we are also working on first articles for leading multinationals like,, IIG, healthcare, etc.
We have secured orders worth INR720 crores in FY ’25, for which INR178 crores are from Aerospace and defense, which is a substantial improvement in this area and INR349 crores of orders are from clean-energy underlying our technological leadership in these sectors. In clean Energy, we have delivered around INR417 crores of revenues. The company is presently working on increasing the wallet share with the customer in FY ’26 that is going to boost the revenues further in the vertical.
In fabrication, hydropower and other segments, we look-forward to deliver around INR60 crores of orders this year. We have completed the execution of Proto 1 for Energy and currently working on Proto II and we are currently in discussion with for orders related to mass production. We look-forward to growth in clean-energy at the rate of 15% to 20% in this sector, including fuel cells, hydropower, battery shortage systems and others. The aerospace and defense sector has witnessed significant progress in several key projects to ISO, DRDO and MNC Aerospace, including the successful delivery of ammunition boxes, engine complements for various customers, including, GK and Systems.
We delivered around INR93 crores of orders in this division. Aerospace and defense sector is in exciting phase, supported by Make in India tailwinds and strong export interest. We anticipate a phenomenal growth of 80% from this sector in FY ’26. We have revenues of around INR19 crores in civil nucle sector in FY ’25 as against INR157 crores of closing orders. We are in advanced-stage of executing UK orders currently and we look-forward to deliver around INR60 crores of orders in this sector in FY ’23.
Tiger 5 and 6 reactive orders have been placed on the private entity and we are expecting the order soon as we are pre-qualified vendor for NPCL. We started receiving tenders refurbishment of reactors. In addition, we have also started working on-budget reports for 220 megawatts by modular reactors. We recorded INR148 crores revenue in products and other verticals and we expect a 20% growth in this segment as well.
The company is actively working on increasing the product base and expanding the customer portfolio. We have achieved a significant improvement in operating cash flows by generating cash flows of INR101.3 crores in FY ’25 as against INR57.4 crores in FY ’24. In addition, we have reduced our net working capital days to 229 days and we expect to improve our cash flows and net working capital base further over the coming quarters.
Successful delivery of first article orders for various new products across all sectors underscores our execution capabilities and commitment to operational excellence. The company continues to focus on quality, innovation and process excellence to drive long-term shareholder value. We are optimistic about robust order inflows over the coming quarters that shall strengthen our order book. Furthermore, we are in discussions with multiple customers in clean-energy, oil and gas and aerospace to enter into long-term contracts. The company has also entered into long-term contracts with some of the few domestic companies for execution of INR20 crores year-on-year over the next five years. Our consistent revenue growth over the past five years demonstrates sustained growth momentum and we remain confident in our ability to maintain this growth trajectory with an average growth of 25% year-on-year over the next three years due to multiple growth engines across various sectors. Our CFO, Mr Junesh ura, will discuss in detail of the financial performance for FY ’25. Over to you, Mr.
Gunneswara Rao Pusarla — Chief Financial Officer
Thank you, Mr, and good morning and a warm welcome to our earnings call. I would like to extend my gratitude to all shareholders for your trust reposing on our company. Today, I will be discussing key financial numbers for Q4 FY ’25 and FY ’25 on consolidation — consolidated basis. Coming to quarter-on-quarter Y-o-Y, in revenue from operations stood at INR183.1 crore in Q4 FY ’25 as against INR143 crore in Q4 FY ’24, which resulted in 28.1% increase on increase.
EBITDA reported at INR34.2 crore in Q4 FY ’25 as compared to INR18.2 crore in Q4 FY ’24 with an increase of 87.5% increase on Y-o-Y. Profit before-tax stands at INR18.6 crore in Q4 FY ’25 as against INR7.2 crore in Q4 FY ’24, 159.6% increase and Y-o-Y. Profit-after-tax was at INR13.7 crore in Q4 FY ’25 as against INR4.9 crore in Q4 FY ’24, 182.7% increase Y-o-Y.
When coming to yearly numbers, in FY ’25 versus FY ’24, our revenue from operations stood at INR676 crore in FY ’25 as against INR580.8 crore in FY ’24, 16.4% increase in Y-o-Y. We would like to inform you that this is highest-ever turnover in our company we have achieved in FY ’25. When it comes to EBITDA reported at INR120.9 crore in FY ’25 as compared to INR112.7 crore in FY ’24, 7.2% increase in yearly Y-o-Y.
Profit before-tax stands at INR771.6 crore in FY ’25 as against INR73 crore in FY ’24, 2% decrease year-on-year. Profit-after-tax was at INR52.9 crore in FY ’25 as against INR56.1 crore in FY ’24, 5.7% decrease in Y-o-Y. I would like to also add three key strategic focus areas. So the company has been strengthened its financial position with a reduction of INR15 crore long-term debt, bringing it down from INR142.4 crore to INR127 crore. So the total repayment obligation for FY ’26 is at INR46 crores.
The 80% of the long-term debt whatever we have — we are repaying by FY ’27, the balance will be in the next one, two years we are repaying. Cash-flow from operation was robust at INR101.3 crore for FY ’25, improved compared to FY ’24’s total annual cash-flow of INR57.4 crores with our monitoring — daily monitoring of the working capital and other areas, focus areas.
So when it comes to working capital, the net working capital to revenue days stood at 229 days in FY ’25 and also we would like to further try to reduce working capital for FY ’26 to 200 days. So like I also want to add, the company is in the key sectors we are catering as on today, India’s engineering sector poised for growth driven by government initiatives promoting renewable energy, civil nuclear power and defense indigenization.
Diversified portfolio and engineering capabilities is well-positioned to capitalize these opportunities. In civil nuclear domain, we have a clear visibility to support India’s nuclear energy expansion to 100 gigawatt by 2047 with its new reactor approvals, retrofit programs, of which five reactors are set for refurbishment for which we are receiving enquiries from the customer. In Aerospace and Defense, we are seeing a positive outlook from our operations as explained by our MD.
And in our new unit, which was commissioned in FY ’25 is set to witness exponential growth in-line with the government focus on self-reliant India and in defense and also the global procurements by Tier-1 and foreign OEMs. We have continued our engagement with major defense OEMs and PSUs by participating in Make in India defense centers, which are gaining traction with increasing budgetary allocations.
Looking-forward, the conservants of national priorities sectors, clean-energy, civil nuclear power and defense self-reliance is creating favorable environment for engineering companies like ours. So we remain committed to sustain EBITDA margins 21% plus or minus and with 25% revenue growth in FY ’26.
So with this, I open the floor for discussion and welcome any questions if you may have. Thank you very much.
Questions and Answers:
Operator
Thank you. Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press R&1 on the touchstone telephone. If you wish to remove yourself from the question queue, you may press RN2. Participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question is from the line of Viprav Srivastawa from PhillipCapital. Please go-ahead.
Vipraw Srivastava
Hi, sir, I’m audible, right?
Gunneswara Rao Pusarla
Yes. Yes.
Operator
Yes, ma’am. Sir, go-ahead.
Vipraw Srivastava
Sure, sir. Quickly on the guidance path, I missed the nuclear guidance. So what kind of growth are you expecting in the nuclear segment for FY ’26.
Srinivas Reddy
Hello the news. So FY ’26 is going to witness a substantial — we closed the order book at INR155 crores for year, but it will witness a substantial inflow of orders during FY ’26. One is we have already received tenders for the repurbishment of five reactors, couple of reactors from Tarapur and refurbishment of reactors in Taiga, Rajasthan and Maps Pradesh.
So these tenders, we are supposed to quote by next month and we are expecting those orders because we have worked on this refurbishment of reactors in the past in a big way. So we’re expecting substantial orders to come in from the refurbishment of reactors. And so secondly, also the purchase order for the private entity MEIL has been released by NPCL.
Since we are qualified vendors, as I mentioned earlier, we are going to expect a substantial kind of orders coming in from there as well. So we’re looking at least around INR700 to plus crores of orders flowing in from uclear division. So we have enough on our plate to have a consistent growth in these areas, but we have not considered any of these orders in our current business plan for FY ’26.
So what we have considered is what orders we have on-hand as of today is what we have considered in our growth plan for this year. But we’ll have a substantial exponential growth in nuclear division going-forward, including the budget reports we have given for modular reactors, which NPCL is as.
Vipraw Srivastava
FY ’26. is that correct understanding?
Gunneswara Rao Pusarla
No, anything to add so to add your point is like from INR19 crores what we have done in FY ’25, we are expecting to do INR60 crores in FY ’26, from INR19 crores to INR60 crores. So that is also whatever orders we are having in-hand 60 crores. INR60 crores we are planning for FY ’26.
Vipraw Srivastava
Okay. Okay, sir. Noted. And sir, in the products division, what’s the guidance you have?
Srinivas Reddy
Product division, I think we have done — last year you have done around INR148 crores and we should have a Growth of at least about 20% in this area. And we have developed various products and we have improved this substantially. If you look at in the last three years to know, there is a huge growth in this area and we continue to do that. So our team has been working on various products, which are getting qualified while we’re doing first articles, some are related to government organizations like roller schools were already qualified. Technically, we’re just waiting for the final confirmation. So we’ll be — it will be a 100% import substitute for Government of India for this sector. We have been importing from. So we are working on a lot of products like EMEs, electromechanical actuators and all that. So we should have at least about 20% further growth of the product division for this year.
Vipraw Srivastava
Okay, sir. Okay. Got it, sir. And sir, lastly on aerospace and defense, you have said 80% growth, right?
Srinivas Reddy
So I would like to explain that. So this is an area where we have — we are growing substantially well and it’s a — it’s something which is very interesting. If you look at the company’s position in FY ’24, we are about INR9 crores to INR10 crores of business in this sector. In FY ’25, we have done INR48 crores, especially with our new unit, which was commissioned in Hyderabad. And then in FY ’26, we’ll be looking at least about INR145 crores of revenues being generated. So this is growing at a rapid pace.
The main reason is we are qualified and certified by a number of MNCs for exports in this area. And we have successfully executed various first articles now they have gone into the ramp-up production for these areas. And some of the customers where we have entered into long-term agreement with III, we have now already started working on the first articles, which will get converted into mass production as well.
So there is a substantial improvement in this area where the margin profile is also very good. So they’re all very complicated kind of assemblies which we are working on and this is something which is really exciting us moving forward. Apart from this, we are also looking at various aerospace projects, which we have been asked to work upon in terms of RFQs, which is not part of the discussion right now. So as and when we have some traction on those things, we will obviously inform all of you in that particular segment.
Vipraw Srivastava
All right, sir. And sir, last question from my end. Regarding Bloom Energy, sir, what’s the commentary from their end? Because Bloom is seeing a lot of traction in US. So what are they communicating to you regarding their order book and their growth prospects?
Srinivas Reddy
No, it is more or less — see, what they’ve done is they have improved their wallet share also, they want us to increase. So we are now doing additional assemblies for them within the system what we are making for them, which we are going to start executing it from this quarter onwards, which will ramp-up in the subsequent quarters.
So what we have mentioned about 4,000 units, which we are going to dispatch to Bloom with additional wallet shares, what’s going to happen this year? And there is no change in that. There might be further improvement on that we have to see. So ultimately, the kind of guidance we have given in terms of growth and margins, we have factored every instance of what’s external to the company, for example, the tariffs issue which is going on with the United States, you have considered all those factors in arriving at this particular growth percentage.
And we feel that because of our diversification into various countries and exports, we are in a position where we are still able to maintain that growth and achieve the margins at what I have mentioned, 21% plus-minus 100 basis-points. And this we have considered all the factors and any other factor which favors the company, then we’ll be able to improve much better on what we have said.
Vipraw Srivastava
Sure, sir. Thank you. Thank you. I’ll join back-in the queue. Thank you. Thank you.
Operator
Thank you. The next question is from the line of Meet Jaint from Motil Iswals. Please go-ahead.
Meet Jain
Hi, sir, I’m audible? Yeah sir.
Srinivas Reddy
Yeah, you.
Meet Jain
My first question is on the spillover that we talked about. Can you throw some more light on this like it has been during the course of the last what was the factor behind the spillover? And can we expect this in 1Q? And because of that, can we see a better margins in 1Q as compared to last year?
Srinivas Reddy
No, basically, what I can say is that one is the spillover, is one on the domestic side because if you remember, we are working on the semicro engines, which there have been certain corrections, certain design changes. So now we are trying to finalize that. But more or less, there has been a little bit of a pause on certain export shipments as well because of the — if you remember the April 2 announcement by the United States on, so they wanted to wait-and-watch and see.
But up post that once the 90 days pause was released, then the situation became normal subsequent to that. But we have considered all those things in the subsequent quarters, as I mentioned, we factored everything which is external to us to achieve at the growth and the EBITDA percentages.
And what you will see here in the current year is you’ll have a linear quarter-on-quarter growth throughout the year and as well as the EBITDA margins. So that’s how it’s going to be. And we are also working on a reduction on outsourcing, which we are getting qualified for the certain products which we are outsourcing for the coatings.
They’re going to get qualified for that, so there’ll be reduction in the other expenses. And we have actually, if you remember — all of you remember, we have worked on investing not only in terms of capabilities, but also in terms of having the right management bandwidth right from different levels in the company across-the-board, keeping the future growth in mind.
So we have done that and we are in good shape to take the company forward over the next three years in terms of our growth and as well as the improvement in margins quarter-on-quarter and year-on-year basis.
Meet Jain
Understood. So when we see other companies, other export heavy companies to US, we have seen a huge outflow in 4Q in the anticipation of this tariff. But when you say we are not — in our case, we are seeing a pause by some of the customers. So just want to get some more clarity because the anticipation of tariff, the shipment from India to US has seen a massive increase across industries. So that has been the case for us as right?
Srinivas Reddy
No, it is not the KFC. Pause means there was not technically a pause, but there were few more shipments that could have taken, but not that it really affected us because there was a marginal INR25 crores plus difference in terms of the revenue that we could have generated in additional in terms of domestic and a few shipments in terms of export.
So that’s where it got deferred by a few days. Not that it stopped, but post April 2nd, again, it continued and it’s in the normal routine right now. So that’s what it is. And there’s not — that’s why I said that we have considered all this in the current year also. We have factored all these variables in the — in our guidance for the current year as well.
Meet Jain
Understood. In terms of our fuel cells clean-energy guidance, can you just — I didn’t get that point. Can you just reiterate what kind of guidance are we giving for FY ’26 for this fuel cells?
Srinivas Reddy
See, fuel cells, we are looking at almost like the hotbox units, I can’t spell out the number of boxes and all that based on the customers feedback to us but we are growing at about — we’ll be growing at the rate of 20% compared to the last year, what we have done. We have done around 420 plus last year, so we’ll do around 20% more this year.
Meet Jain
So will this include any orders? So what kind of — what kind of orders are we getting for electrolyzers from them?
Srinivas Reddy
We have not included the electrolyzers orders as of today. So this is what I’m trying to explain that we have taken the position as of last week is what I’m talking about the numbers. So we are — obviously the electrolyzers orders come in, then it will add-on to the numbers what we have said, but we have not considered the target.
Meet Jain
Understood. And lastly on this other expense part, we have seen an increase in other expense in absolute terms in this quarter. Any one-offs in that?
Srinivas Reddy
Yeah, because if you look at it, the majority of that is the plasma coating, which we are doing in US company called Progressive. And now we have done the samples, we have done it for lab testing and we are expecting the qualification to be done over the next one month.
Once we do that, then our outsourcing will drastically come down and we’ll be able to supply without any kind of outsourcing expense that. So we’ll see some kind of reduction happening partially this quarter and subsequently for the next 3/4. So we are looking at that as well and that’s the majority of that is the outsourcing part of it.
Meet Jain
Okay. Thank you so much. I’ll get back-in the queue. Thank you.
Operator
Thank you. The next question is from the line of Krishna from Oman Investments. Please go-ahead.
Balamurali Krishnan
Good morning, sir. So regarding —
Srinivas Reddy
Good morning.
Balamurali Krishnan
What about 25% we are expecting, but in case of nuclear sector and the aerospace and defense are expecting substantial increase. So the clean-energy sector, I think is it there may not be much growth in this year right now.
Srinivas Reddy
We have the growth — that’s what I mentioned earlier, the clean-energy, we’re looking at about at least 20% growth this year in the fuel cells, in hydropower and those areas what we are working on. And with nuclear, we have not considered any of those orders which I said which will flow-in this year substantial orders. See, one good thing is that now it’s already done in terms of 5 and 6, the has been released to NEIL, now they are working with us in terms of finalizing various contracts with us. That process is going on right now and then the refurbishment of reactors.
So you’re looking at anywhere between — I don’t want to spell out individual numbers because of certain confidentiality, but we are looking at around INR700 crores to INR800 crores of orders flowing in over the next one to quarters. So this — we have enough on our plate and further we’re going to receive further orders as well. So we have enough on our plate to exponentially grow in the nuclear division moving forward. And we have the capacities to handle this as well.
Balamurali Krishnan
Okay, sir. So last year, I think in previous year, we are expecting to close the order book by INR1,500 crores will end-up around INR1,000 crore. So this year what would be the expectation from the closing order book considering all these factors.
Srinivas Reddy
Look, as I said, whatever number I gave, we’ll have a very strong order book because when we said INR1,500 crores, we factored in CAGA 5 and 6 orders coming in, but that’s getting deferred to this and the subsequent quarters, right? And also the refurbishment of reactors. And then we are getting — we’ll be getting substantial orders from the aerospace division, which we are doing extremely well right now than the space sector as well.
Defense as well is doing really well. We are doing substantially well in various areas. So we’ll have a very strong order book and we’ll be able to further the closing order book for this year, probably a month, a month and a half from now, once we have more clarity on all this, but we’ll have a very strong order book by end of this year-after executing what growth what we’ve mentioned right now.
Balamurali Krishnan
Okay. And this electrolyzer, I think some of PLI scheme also announced on that one. So are we looking to participate in that one or the PLI?
Srinivas Reddy
We have already done the electrolyzers. We have proven it, but as I said earlier, we are yet to receive any further orders on electrolyzers as of today. Once we receive it done, we will look at our numbers at that point of time. So we have not considered that as of now, which I mentioned earlier.
Balamurali Krishnan
But I think there is some traction in the domestic market because some PSU entities are very aggressive on this electrolyzers hydrogen production. So maybe other than Bloom, maybe we have some other scope and good scope in the domestic also.
Srinivas Reddy
See, see to establish this to be very transparent about it will take time in terms of the facilities and the infrastructure that we need to build for hydrogen storage, various other aspects. So that is where we are right now. So — but good thing is we’ve already developed the product. So we’re just waiting for the traction to happen internationally.
So that’s where you get the real volumes. I understand the domestic requirements, but that’s something which I don’t want to comment right now. So as and when something happens we’ll definitely inform all of them.
Balamurali Krishnan
Okay. Lastly, on this new product we developed for the Navel — Navel. So what could be the expectation from these products or if it is go to the volume in the production on bul production.
Srinivas Reddy
The requirements are very-high because we have developed it, designed and developed it along with the D&D naval area. So we are expecting substantial volume production kind of requirements coming in from that segment in the defense side of the business. And that’s what we are doing, right? Every year we keep developing these products and we’ll see the traction happening subsequently in terms of volume production.
So we are taking up — our product development team is taking up such products where it makes really economical sense in terms of having that kind of volumes moving forward. So what all you’re seeing in our presentation is relevant to volume production moving forward. So those things as and when they happen, they’ll add-on to our order book and the execution cycle, which we have not taken today, but it will definitely happen.
Balamurali Krishnan
Okay. Lastly on this and financial, I think there is no further update. Any progress on that deals?
Srinivas Reddy
No, we have already mentioned about the update. See, they have given us to do the prototypes. We have already done the first one. The second one is in-progress, which we most probably try to complete in this quarter. Once that is done, then we move on to the batch production and volume production. So that’s what we’re going to do.
So we have not considered any of that volume production or back production in the current growth what we have taken because we wanted to be very, you know, reasonably conservative in what guidance we give, but that’s in the advanced-stage of discussion in terms of not only the completion of the prototypes, but also in terms of signing of the agreement with MTAR, which can happen this quarter or the next quarter moving forward.
Balamurali Krishnan
Yeah. I think as per our earlier discussion, I think when they receive any orders from India, so that we are going to. So as of now, do they have any orders on-hand from India for execution purpose?
Srinivas Reddy
No, that situation has changed right now because what they’re trying to do right now is that they’re going to buy the seed and the port that they are assembly from us and the batteries are going to be installed at the site. So now we are open to the whole market. So that’s the big advantage. That’s how they change their whole business outlook in terms of manufacturing in India.
Balamurali Krishnan
That’s a good, sir. Thanks a lot. That’s all from me. Thank you.
Operator
Thank you. The next question is from the line of Utkarshma Heshwari from Reliance Central Insurance Company Limited. Please go-ahead.
Utkarsh Maheshwari
Good morning, sir. Am I audible?
Srinivas Reddy
Yeah, good morning. You are audible. Yes.
Utkarsh Maheshwari
Sir, I think we just want to understand our medium-term perspective in terms of how we are guiding and how we are delivering. I mean, this is like on a very, pretty consistent basis.
Srinivas Reddy
Can you speak a little louder because we are not able to you.
Utkarsh Maheshwari
My question is more from the structural thought process. I mean, from every time what we have guided, we have been running somehow short of our guidance. So this time, do you think that our guidance is like almost at the lowest point of the process and maybe like we can outperform this?
Srinivas Reddy
That’s exactly the idea. See, what you’ve said is right, but what you have to also understand is that we have done over the last three years, we have guided, but over the last one year, there were some misses in terms of guidance, but the current financial year, we have ensured that we have given a situation of the worst-case scenario where we stand-in terms of various external internal factors and we have guided in such a manner.
So we’ll be — you can be rest assured that what we have guided for this financial year is what we’ll be able to achieve for sure.
Utkarsh Maheshwari
And maybe like margins, so I mean, we were thinking like 24% or now we are guiding 21%. So could this be the bottom or I mean, we can expect some kind of outperformance from these margins? I mean, just want to understand the thought process?
Srinivas Reddy
So that’s what I said. We wanted to make sure that we are making every efforts to improve our operating margins and also our EBITDA margins. But we wanted to ensure that we guide in a manner that what we can definitely achieve and probably if things go in the right direction, probably we’ll do better than this, but we don’t want to say that right now. But this is a basic minimum guidance what we have given is the basic minimum guidance.
Utkarsh Maheshwari
Okay, fair point. Thanks. That’s it all.
Operator
Thank you. The next question is from the line of Ayush Bansal from Nivesha Investment Advisors. Please go-ahead.
Aayush Bansal
Hi, good morning, sir.
Srinivas Reddy
Good morning.
Aayush Bansal
Sir, like I wanted to ask you, we make actuators for Tejas aircraft, right? And with more focus on indigenization and government planning to add almost — 300 Tejas aircraft. So how big opportunity do we see here? And like out-of-the 36 Tejus aircrafts in operation currently, how many of it has actuators provided by Vitar?
Srinivas Reddy
See, the electromechanical actuators we have supplied to the defense and they have actually tested it and they have proven — they performed very well. And in fact, they’ve also used our Roller screws to test these EMAs, indigenous roller screws and they also performed very well. They pass the load test, they passed all the relevant tests to do it. So this is what I’m saying. When we have developed the product, you can see the traction happening in terms of EMS in a big way. And in fact, we had series of meetings with them recently as well because of the certain emergency procurements what they’re looking at and they’re looking at lot more EMAs which are going to come in the way of MTR in the current financial year and the future years as well. So when we talk about certain guidance, as I keep repeating that we have not considered any of these opportunities, which are already developed by MTR, but we still have to get those volume orders coming in from the defense sector, which will happen very shortly. So that is where we stand. So we have a great opportunity because we already executed it. We have proven our product. So we are right on-top of it to ensure that we can deliver such EMAs to the defense sector moving forward.
Aayush Bansal
And sir, like who are the other competitors providing the similar product and how much do we contribute to a single aircraft?
Srinivas Reddy
No, we can’t quantify how much we contribute, but when you specifically talk about EMAs, our EMAs have proven the best-in the market in terms of quality, in terms of performance that has been also mentioned by the defense sector. And we are in good shape in terms of delivering the maximum requirements for the defense sector because ultimately, they look at the quality and the performance of the EMAs.
Most of the MAs we are also importing earlier and that also we have changed the whole scenario right now because of our capabilities to handle it. So we not only manufacture right from the basics, right from the component level to the assembly level, the entire system. So that’s what we have done. So let’s hope for the best-in terms of getting the maximum kind of orders moving forward. Thanks.
Aayush Bansal
Okay, sir. And do you have any idea on LCOE of fuel-cell versus solar and how do you see demand for fuel cells shaping in the foreseeable times?
Srinivas Reddy
No, there is enough demand actually, that’s why we are able to grow at that rate, right? We are four, five years back to what we are today, we have done a lot of innovations to make it to where we are right now. So it is growing at the rate of 20%, it might grow even further higher. So it all depends on how the market moves, but we are in good space as far as the fuel cells are concerned?
Aayush Bansal
And sir, can you just comment what’s the cost of a hot box and how technically difficult component it is to make like do you see high competition or something?
Srinivas Reddy
I won’t be able to comment on the numbers on the hotbox because they were asked not to disclose that by the customer because they have certain issues with that. But the entry barrier for manufacturing these systems is pretty long and it is not easy as well. So it’s not that competition can be created overnight. It is not going to happen that way.
For entire itself, it took number of years to develop it and also to innovate various products that we are. So that’s where we are. So we are in a very good space as far as the fuel-cell technology is concerned.
Aayush Bansal
Okay, sir. Thank you. That’s all.
Srinivas Reddy
Thank you.
Operator
Thank you. Before we take the next question, participants are requested to limit their questions to two per participant. The next question is from the line of Viprav Shivastawa from PhillipCapital. Please go-ahead.
Vipraw Srivastava
Sir, if I ask you follow-up. Sir, could be on the recent bill which has come up in US where they are revoking subsidies for sonar. So any thoughts that doesn’t impact MTAR and Blue positively and currently a potential trigger for Amtar in the longer run?
Srinivas Reddy
I don’t think so, because is in a very comfortable space right now in terms of their own order book and requirements. And we don’t have any such information. And in fact, they’re trying to increase their wallet share as well, which we are doing right now, as I said earlier,. So I don’t think we have any kind of effect or a figure which might create an issue for us. So there is no indication of that as?
Vipraw Srivastava
Sure, sir. And sir, secondly, quickly on the part. So again, also supplies lithium-ion batteries for US market. And if US market faces issues, do you see it having any repurpose in the India market or are these two market?
Srinivas Reddy
No, see, right now, as I said earlier, we are creating assemblies for them, excluding the batteries for now. They are going to do that at site. So that opens up the entire market. That’s what is looking at. So it’s a new design of theirs, which we have developed, designed and developed it along with them. We have done — we have successfully completed the first prototype and now we are moving on to the second prototype.
And once that is done, then we move on to the batch in-production and then the volume production as well. So we have to create as a mostly, as I said earlier, the of all this will happen either in this quarter or next quarter where we’re going to sign-off a long-term agreement with them before we get on to the volume production.
Vipraw Srivastava
Yeah, sir. Thank you.
Operator
Thank you. The next question is from the line of Piyush from Sundaram Alternatives. Alternates. Please go-ahead.
Piyush Sevaldasani
Yeah, hi, sir. Thank you for the opportunity. Sir, my first question is on the clean-energy fuel-cell side. So if you look at the guidance of Energy, it’s much higher versus what we are guiding. So can you help me understand why are we being conservative or we wait for more orders to come and then we see an upgrade there?
Srinivas Reddy
See, that’s what I’ve said earlier. So we have taken — see, this is what it has guided the growth.
Operator
Sorry to interrupt. There seems to be a disturbance on your line.
Srinivas Reddy
Yeah, can you hear me now? Can you hear me?
Operator
Please go-ahead.
Srinivas Reddy
I think my line is fine actually, but okay. So what I’ve said earlier is that we have considered the guidance or the numbers based on what — where we are today. But over the next one, two quarters, many things can happen, but we have not taken any of those into account. So as of today, this is what we have done, this is what the guidance we have given as a base minimum. So the reason why we have done that is that we would like to make sure that what guidance we give, definitely will achieve that and probably we might do better than that based on a lot of external factors, nothing to do with us.
So a lot of good things are going to happen. For example, whether it’s Bloom or whether it is Energy where we’re going to sign an agreement, we have not — we have not considered various things, what we’re already working upon. But as and when those things happen, then we look at it and then we keep informing our investors on a regular basis. So that’s the game plan for this year.
Piyush Sevaldasani
And sir, my second question is on the capex. We have done a INR100 crore capex for FY ’25. Can you help me understand what was this done for and incrementally, how should we see capex moving with segments and what would be the quantum?
Srinivas Reddy
And see, it depends. See, right now this year we might — the basic minimum bottleneck area is we’re looking at about INR50 crores to INR60 crores of capex going-in, not only for the requirements not for this year, but for the next year — next couple of years. But if you look at a specific project, like we are working on some very big projects which I’m not able to disclose right now, but once those projects and agreements are signed, then it will be a separate capex required for that.
We already have enough land-bank both in near the airport in and a few other land banks that we have taken. So these will be used not only for our future projects and for the expansion programs, which we have a roadmap over the next three to five years.
Piyush Sevaldasani
Sure, sir, sir, lastly on the nuclear segment, so the execution in FY ’25 was slightly on the weaker side. Can you help me understand why it was impacted? Was there any project delay or some clearance and why are we expecting INR160 crores in FY ’26?
Srinivas Reddy
We basically, that’s what we have dispatched, right? So we are working on two major projects. One is the FMBC and the fuel transfer systems, which are long-term projects. We have done a substantial work-in that, which is under work-in progress and we’ll be executing those projects for the current financial year. So even though the sales are at INR19 crores, we have done substantial work-in these long-term projects over the last one year and now we’re going to move on to start dispatching them in the current year and the subsequent year. So what orders we are going to receive substantial orders, we have not considered that in our business plan for this year. But you can see a nice exponential Growth in nuclear since everything is right there on our table right now in terms of order booking and execution will happen over the next three to four years. So we’re looking at a pretty good exponential growth in nuclear, which obviously got delayed, right, in terms of order booking because of the delays from various areas, but now it’s already — the paperwork has started moving and we’ll be able to book those orders over the next one to quarters.
Piyush Sevaldasani
Sure, sir. Thank you and all the best.
Srinivas Reddy
Thank you.
Operator
Thank you. The next question is from the line of Balasub from Arihant Capital. Please go-ahead.
Balasubramanian
Good morning, sir. Sir, earlier guidance of working capital days to a target of 175 days, what are the strategic initiatives we are taking it right now? Because right now it’s about 220 levels.
Gunneswara Rao Pusarla
Yeah. See, we have guided working capital days 225 days for FY ’25. So we have achieved 229 days. 175 is a long-term goal. It cannot.
Balasubramanian
I think FY ’27 target sir. I think.
Gunneswara Rao Pusarla
FY ’27, the moment we have the operating leverage and growth we are expecting 25% year-on-year and we are working closely on the receivables and inventory levels. Definitely that number can be achievable. And we have the calculations also.
Balasubramanian
Got it, sir. Sir, in that Middle-East side, oil and gas, especially D&T and CapEx are picking-up and how is our business are doing in oil and gas, how the things are shaping up?
Srinivas Reddy
So we are working with the oil and gas customer where with, we are going to execute the first article’s completion in this quarter, the end of this quarter or beginning of next quarter. And mostly the agreement a long-term agreement is going to be signed off most probably in this quarter itself.
And then we create the required infrastructure once the agreement is signed off for batch and volume production. So that’s going-in the right direction. And that’s something which we have not again stated in our business plan right now because that’s how we have conservatively estimated our growth plan. So as and when it happens, we’ll inform the investor support.
Balasubramanian
Sir, we have taken a separate debt for this oil and gas segment, the INR60 crores INR80 crore kind of debt are still.
Srinivas Reddy
We have not no, we have not yet taken that debt.
Balasubramanian
Okay, sir, when we can expect plan for the final guess, sir.
Srinivas Reddy
That’s what I said. Mostly in this quarter, we will be able to sign-off the agreement. And once we do that, then the whole process will start because we are simultaneously doing the first article, which will be done by end of this quarter. And once that is done, then we move on to the batch production within our existing facilities. But for volume production, we have to create a separate infrastructure for them for which we have the land-bank.
And once we do that, once we sign-off the agreement, the whole pickup will start-off on the oil and beds, which will happen mostly in this quarter, we’ll be able to sign-off the agreement.
Balasubramanian
Got it, sir. Sir, my final question on aerospace and defense. I think we have initiated development order for compression of some place of engines and so when we can expect volume orders for these hypersonic missile developments?
Srinivas Reddy
No, first we have to execute these transit engines, we have to do that. We are in advanced-stage of that. The raw-material has come in, the manufacturing is going to commence. The sooner we do that, the whole team is working on it. So once we’re able to do that, then the progressively will be able to see a proper traction in this area as well. And that’s a very highly sophisticated order, which we are executing in terms of scram rate.
So let’s see how it goes and we are on-top of that issue. The whole team is working on it, especially right from the nuclear — sorry, new product development team and the execution teams are working on it to take it forward.
Balasubramanian
Got it, sir. Thank you.
Operator
Thank you. Ladies and gentlemen, in order to ask a question, you may press char and one at this time. The next question is from the line of Isha Murti from IM Capital. Please go-ahead.
Unidentified Participant
Hello. Sir, can you provide me the guidance for Clear Energy like civil nuclear power and aerospace and defense and what are your plans to like improve your cash flows?
Srinivas Reddy
So the improvement of cash flows, I think you want to answer that first, then I can go on that.
Gunneswara Rao Pusarla
See, we are monitor — see, as you know, once the revenues are increasing, profitable at increasing, the internal accruals will be there. And also we are working on the working capital days also, closely monitoring it. So we have achieved INR101.9 crores, but we are working with the lot of suppliers also to improve our credit period. So definitely, every year our target is to make the pause to cash-flow from operations hence forth.
Srinivas Reddy
So the second part of the question is, see, we are into various segments, multiple segments, as I mentioned earlier and we are seeing similar kind of growth pattern happening in every segments, especially in aerospace and defense, we are seeing a huge traction happening there. We have created those facilities. Our products have been approved, certifications we have received, including our special processes for aerospace where MTAP can be a one-stop for various multinationals.
They have been certified by NatCap, it’s a big achievement, which will receive a certificate now. So we have done a lot of work-in terms of where we are today in terms of moving forward with the right growth that we are looking at. So that’s where we are today and I can really congratulate the entire team to create that platform to have a consistent and good growth over the next three years with improved margins.
Unidentified Participant
Okay. I also have one more question. Like you have indicated a sharp ramp-up in aerospace revenue from like FY ’26 and higher in FY ’27 as well. So what gives you the confidence in this steep growth? And also long-term contracts or visibility from MNC is already secured to support this scale-up?
Srinivas Reddy
Exactly. So the confidence level is, one is we have already done a lot of first articles and moved on to the volume production. In some cases, we are already doing the first articles and they’re getting approved. We got the required certifications as well. And that’s why you can see in the current year itself in Aerospace and defense like it was not there before. As I mentioned earlier, in the aerospace sector, we did INR9 crores and INR45 crores last year and this year we’re doing close to about INR145 crores.
It’s purely the effort of the team not only to develop the products for these MNCs in aerostate sector and getting it approved and certified and that’s what you’re seeing the numbers growing rapidly and we’re also having the customer confidence in MCR in terms of quality and performance, what we’ve already delivered. So these are the factors which have gone into it and we have created the right infrastructure in terms of special processes and the missioning and assembly of these products for us to be where we are today and how we are growing in this sector?
Unidentified Participant
Okay, sir. Got it.
Operator
Thank you. The next question is from the line of Ayush Bansal from Nivesha Investment Advisors. Please go-ahead.
Aayush Bansal
Hello, sir. Like I had one more question that back-in 2021, we were sitting at gross margins of somewhat 67% 68%, which now stands at somewhat 47% 48%. So, can you just tell a — for this drastic drop of 20% in gross margin, is this due to raw-material cost or is it something else?
Srinivas Reddy
It’s basically the product mix, right? So earlier the gross margins for the clean-energy segment are lower, the volumes are higher, the operating leverage is much better. But if you look at the way we are moving forward, we have diversified into the aerospace and defense sectors in a big way, where the margins are much higher. So basically, the gross margins are also going to be higher in terms of these segments.
And also we are moving into the volume production as well. So you can see a better gross margins moving forward as we move on in terms of diversification and we are actually literally implementing it and excluding those orders right now. So we can see that happening over the next three years with improved gross margins as well.
Aayush Bansal
Okay, sir. Okay. Thank you.
Operator
Thank you. The next question is from the line of Maitri Shah from Sapphire Capital. Please go-ahead.
Maitri Shah
Yeah, hello. Am I audible? Hello?
Srinivas Reddy
Yes, you are.
Maitri Shah
Yeah. Yeah, I just had one question on the battery storage system. So we were developing and designing — designing it. So where have we reached with the prototype and has there been Any qualifications that you’ve received from it?
Srinivas Reddy
Yeah, we have done the first prototype, so that’s been approved by the customer. And now we are moving on to the second one with little bit more changes in the design, they wanted some improvements from their side, nothing to do with it. We are working together with the design and development. So once we do the second prototype, so that will be the basis for our batch production moving forward.
That’s what I’ve said and which we are mostly planning to complete it by end of this quarter or beginning of next quarter. Once we do that, then we move on to the batch production, then all the designs will be frozen and then we move forward for back production and volume production.
Maitri Shah
Okay. And what kind of expectations do we have from this product in terms of revenue in FY ’27?
Srinivas Reddy
FY ’27 will have a substantial revenue, but I’m not going to — we’ll disclose that more in terms of numbers once we sign-off the agreement with Fluents because we have to finalize the pricing and everything because we are doing the prototype right now. But it’s a fantastic opportunity for the company and we are successfully executing the prototype right now. So the market has also opened up because of batteries being installed at the site. So let’s see how it goes.
And once we sign-off the agreement, we’ll inform, then obviously know the kind of volumes, which is — it will be substantial numbers that we’re looking at.
Maitri Shah
Okay. And just one clarification. So you mentioned that we’ll be growing at 25% for the next three years. Is that right? Is that — did I hear that right?
Srinivas Reddy
Can you repeat that question?
Maitri Shah
At 25% for the next three years?
Srinivas Reddy
Yeah, that’s right. Absolutely right.
Maitri Shah
Okay, okay. Thank you so much.
Operator
Thank you. As there are no further questions, I would now like to hand the conference over to Mr for closing comments.
Srinivas Reddy
So I would like to thank everyone for taking time to attend this call. And I would like to mention that we are continuing to work towards our growth and also to improve our margins on a linear fashion quarter-on-quarter basis. Even the growth we are expecting to grow on a linear basis, quarter-on-quarter basis, year-on-year basis.
And we are on-track in terms of what we have done, which you cannot see in the form of numbers, but you can see moving forward over the next few years what the kind of work we have done in the various segments that we are working on right now. Thank you so much.
Operator
Thank you. On behalf of Technologies Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.