Pennar Industries Limited (NSE: PENIND) Q4 2025 Earnings Call dated Jun. 02, 2025
Corporate Participants:
Unidentified Speaker
Aditya Rao — Managing Director and Vice Chairman
Shrikant Bhakkad — Chief Financial Officer
Analysts:
Unidentified Participant
Vikram Suryavanshi — Analyst
Venkat Subramaniam — Analyst
Rahul Kumar — Analyst
Rehan Laljee — Analyst
Deepak Poddar — Analyst
Balasubramanian — Analyst
Nilesh Shah — Analyst
Presentation:
operator
Now being recorded.
operator
It SA.
operator
Sam.
operator
Ladies and gentlemen, good day and welcome to the Q4 and FY25 earnings conference call of PNR Industries Limited hosted by Philip Capital India Private Limited. Please note that this conference call may contain forward looking statements about the company which are based on the beliefs, opinions and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes.
Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone. I now hand the conference over to Mr. Vikram Soyawanshi from Philip Capital. Thank you. And over to you sir.
Vikram Suryavanshi — Analyst
Thank you Pooja. Good morning and very warm welcome to everyone. Thank you for being on the call of PNR Industries Limited. We are happy to have with us the management of PNR Industries for question and answer session with the investment community. The management is represented by Mr. Aditya Rao, Vice Chairman and Managing Director Mr. Sikant Makkar, Chief Financial Officer Mr. Manoj, Vice President Corporate Planning and KM Sunil, Vice President Investor and Media Relations. Before we start with the question and answer session we have opening comments from the management. Now I hand over call to Mr.
Aditya for opening comments. Over to you sir.
Aditya Rao — Managing Director and Vice Chairman
Thank you so much. I hope my voice is audible. If there are issues on clarity, please don’t hesitate to let us know and we will try to address them. So good day and thank you to all of you for joining us for Pinar Industries Q4 Investor Conference Call and for the financial year ending March 2025. Please have this opportunity to walk you through our recent performance and share insights into our strategic direction. So today’s session will begin with a review of our fourth quarter and our full year results. We will be focusing on key metrics such as revenue, profit before tax, working capital dynamics and major growth drivers.
Following this overview, Mr. Srikanth Bakat, our CFO will present a detailed financial analysis and we will conclude with the Q and A session to address your questions. Let me start with the performance highlights for Q4 and FY25s. In the fourth quarter our revenue rose by 10.1% reaching 905.8 crores. PPT climbed by 20.35% to 47 crores. For the full fiscal year, revenue expanded 3.1% to 3,226 crores. With our PPT showing an overall 20.5%. We have reached 158.4 crores in PBT which is our highest ever Revenue growth drivers for the next few quarters continue to be our PEB division.
We anticipate continued double digit growth in our PEV line. This is supported by a healthy order backlog and improved capacity utilization. Plant continues to scale and improve its performance and on the back of that we expect this business to achieve significant growth and to be a significant growth engine in this fiscal FY26 ascent, our U.S. subsidiary. Their performance remains strong. It’s backed also by a growing active order backlog. We also forecast double digit increases in both revenue and PVT for the current fiscal in Ascent. Body in White is another of our prioritized views. We key clients including Hyundai Seed Automotive, Thai Volt, Ashok Leyland and Maruti ongoing capacity expansions have started contributing to revenue growth.
In the next following quarters we will see this capacity come online. There are good meaningful revenue gains in this year for this business unit as well. Engineering Services has continued to scale efficiently. We expect sustained revenue growth in this segment for the next few quarters. Hydraulics has seen an uptick in order backlog fueling our confidence in revenue expansion. This fiscal will see strong hydraulics growth as well. Boilers and process equipment is geared for robust double digit growth. We are actively scaling our order backlog activities to support this trajectory. Let me move now to profitability and margins.
While the growth vectors that I mentioned be the Ascent PIW Engineering Services, hydraulics and boilers and process equipment will continue to drive our revenue growth, our profitability. It’s important for us, as I’ve mentioned on my previous calls, for us to continue continuously scale it. So PBT margin for Q4 now stands at 5.2% and we expect to improve this figure as we increase the share of our higher margin businesses in our revenue portfolio. Capital efficiency metrics our RO C is at 21.5% and return on equity is 11%. We’re targeting significant improvements in both metrics over the course of this financial year and over the next in the medium term as well.
Our working capital currently stands at 76 days. This is the one number where we came in slightly above our ideal range. This was due to the capital employed being a snapshot number, elevated raw material costs and ensuring that we have what we need for our order backlog impacted higher procurement. So we anticipate this will normalize very very short term we should meet 72 days and a long term target of 60 days. We do not as management see an issue here. This is by Design there is Sec. 76 but we should expect very quick moderation in this.
Let me stop there and hand over to our CFO Srikanth for his detailed overview of our performance for the quarter and for the financial.
Shrikant Bhakkad — Chief Financial Officer
Thanks Eric.
Shrikant Bhakkad — Chief Financial Officer
Welcome to the shareholders and investors. For the fourth quarter FY25.
Shrikant Bhakkad — Chief Financial Officer
Total revenue is 905.8 up from 822.8. Overall increase of applications which is up by 10%. EBITDA is increased from 81.31 crores to 98.4 crores it is at up by 21% and EBITD has increased by 20.35% at 5.2% and up by 44 basis points that has increased overall by 23.98 crores it is now at 3.94% and up by 44 basis points. Going through the details on each of these matrices, Webinar has grown from diversified engineering business as well as substantial increase coming from 14% from customized design building solution and as a result upland revenue has increased that 10.09% keeping continued focus to improve our margins and cut down the sales with the lower margin businesses you see the growth in the profitability revenue as well as the profitability.
The growth in the customized design building solution is a result of our rivalry plant which is now functional and started yielding growth. The custom design building solution revenue is now at 460 crores compared to 403 crores up by 14%. PEB India order book has increased to 780 crores and PEB US it has reached 53.1 million. Other income includes deposit income, income from mutual funds, roadmap incentives, exchange fluctuation, collection of old receivables and write back of debtors. Employee benefit expense increased by 9.43 crores on account of increment and wage revisions of workers on account of additional and as well as additional plant at rivalry aggregating to some 4.7 crores and increase at subsidies at 4.67 crores.
Moving next on finance cost, overall increase in finance cost is at 7.44 crores at a consolidated level out of it standalone is at 6.99 crores increase in account of additional revenue and increase in capex of building and drive reality. The overall finance cost is well below the 4% mark that we have outlined and that’s our expectation that it will reach now that we have done the capitalization of these buildings, the interest will slightly grow up in the coming quarter and it would reach near 4%. Overall you can see the net working Capital will be at 3% and term loan interest will be at 1%.
Interest to net sales this quarter is at 3.71% when compared to 3.18% which is increased by 53 basis points and which is what we have guided you earlier. Depreciation amortization. The Overall increase is 1.68 crores standalone and consolidated. This is on account of the capitalization that we have done in the last quarters. Other expenses predominantly grew by 42 crores on account of major G in standalone 21 crores which is on account of higher erection expense, subcontract expense and stores and spare consumables. What we have subsidiary it is on account of legal professional cost and one time cost related to acquisitions.
What we have planned tax is lower due to one time credit that we have received on account of closing of one of the tax assessment years and there is a reversal of 1.36 crores related to earlier years. Federal tax is at 21%, state tax is at 5.7% in the US and average it will be around 25.6%. We continue to guide this to consider as a consolidated rate to be at 25 to 26%. Overall analysis in terms of profit loss account revenue has increased on major of our growth business streamlines and across the geographies in India as well as the US Due to increased revenue there is a corresponding increase in PBT and we continue to be on the growth path.
Moving forward with the balance sheet analysis. First let us take up asset side changes in the asset is on account of increase in property, plant and equipment overall net 60 crores inventory has increased by 110 and that is by 70 crores. Cash and cash equivalent we are sitting at a healthy cash balance of 141 crores. PP increases predominately on account of the rivalry leave building and the BIW expansion which we have carried out last year. An increase in the ascent is because of the expansion that we did of the phase 3 of close to 28 crore inventory.
Consolidated has increased by 110 crores and debtors by 69 crores as explained by this is little higher because of the order backlog that we have and because of the increased revenue that we are planning. We have this higher and this is expected to moderate in the coming two quarters. Cash and cash equivalents we are sitting at a healthy cash balance of 141 crores as I said in standalone at 47 crores and with a consolidated level of 141 crores. Moving now to liabilities increase in borrowing overall is close to around from 1092 to 1197 crores increase of 105 crores out of which long term liabilities contribute to 71 crores increase and short term liabilities contribute to 30 crores increase.
The other increase in liabilities on account of trade payable due to higher credit from our vendors and LC’s at 95 crores there is an increase. Income bank liabilities have decreased due to settlement of tax assessment years as well as there is a decrease in lease liabilities on account of vacating of our corporate building what we had earlier and reduction in lease liabilities. The other current liabilities is increased due to advance from customers in India as well as the US. Overall equity has increased by 122 crores due to the overall profit in India and at a consolidated level.
Coming to cash flow analysis overall we are at a healthy cash flow of 345.36 crore. The operating activities out of this contribute to 31.27 crore at a consolidated level and standalone at reduction of 42.03 crores. Working capital changes on account of higher inventories and asset assets. Net cash used in the business investing activities closed around 151crores and cash proceeds from financing activities at 78crores which is on account of long term borrowings. Overall the cash and cash equivalence has increased by 51.59 crores at a consolidated level from 89.78 to 141.43 crores. With this brief analysis of profit loss from balance sheet and catalog, I hand over the call to the moderator for the questions in the investor community.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touch tone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Agastya Dawe from CAO Capital. Please go ahead.
Unidentified Participant
Thank you very much for the opportunity. Am I clearly audible?
Aditya Rao
Yes, please go ahead.
Unidentified Participant
Sir, congratulations on great set of numbers. All your efforts are definitely bearing fruit. So it’s very very visible now. Sir, the questions that I had you briefly touched upon them in your opening remarks. I was wondering if you could go into further details there. One thing which is clearly visible in the company is that the ROEs are at least they track roughly thousand basis points below the ROCs. And you mentioned that we will see substantial improvements. So what are the levels which you can pull which would lead to better ROEs going forward? And that’s very similar questions on the margins.
There is a lot of shift in the mix of businesses. So can you also go into a little bit more detail what kind of trajectory we can see on the margin side and final small question is on the CapEx. What is the CapEx for the next two years?
Aditya Rao
Okay, the first question was on the ROC versus ROE. The 10% drop and potential rise in the future or what? How it, how would it increase in the future CAPEX for two years? What was the middle question, sir?
Unidentified Participant
Sir, Very similar question on the margins, gross margins, EBITDA margins. Because there is so much shift happening in the business mix across various verticals for the consolidated entity. What kind of trajectory will we see on the margins similar to the ROE question, sir.
Aditya Rao
Okay, yeah, as you just mentioned, the ROC and the ROE are both. The EBIT is a very important number for us and we continue to focus on, on EBIT improvements. 21.5. If we had perhaps a more normal working capital cycle, which we typically tend to have, the ROC would have been higher. A long term goal for ROC is to reach about 30%. Their voices that it should be even higher than that. But that as a blended margin of what we expect our revenue profile to be from the different geographies represent in the different margin profile the revenue streams command.
We are quite confident of 30% in the medium term and that’s our target. How that could have come about is simply through. We don’t anticipate that our working capital days, if you say the average for the last few quarters to the mid-70s, getting that to 60 is something that would, that is sustainable, right? That is, that is in the longer term sustainable is what we feel. So combine that with an increase in EBIT and that’s where your ROCE growth is going to come in. So not a dramatic reduction, say about 20% reduction in our capital employed as a proportion to sales, but the larger which by itself should be able to get our.
If you take the 2021, it should get us to 25% approximately the remainder will come from our EBIT growth. And as we keep adding higher revenue, higher margin revenue streams, it’s something we believe to be automatic. And if you look at, and I do use this as an example a lot, just look at what we’ve been doing for the last few quarters for the last three years, we are going to be doing the exact same thing and we will expect to see similar output in terms of we will see revenue growth, we will see EBIT growth, we will see margin growth and that will tend to take up ROCE and roe.
The large ROCE ROE drop is effectively because of the interest cost being where it is as a working capital usage moderates, then that gap will also lessen. But you should take a 5 to 7% drop in all circumstances. That’s just the way we structure, Right?
Unidentified Participant
Right. And on the margin side, sir, the revenue growth needs to kick in. Right. My guess would be that there would be competitive pressures on your gross margins so you can’t really take price hikes. Right.
Unidentified Participant
Or.
Unidentified Participant
There would be some pressure on the pricing. Right. So revenue growth has to kick in and operating leverage has to kick in for the new plant to start delivering better margins. So what kind of revenue growth can you actually see? And then the question on the catechism.
Unidentified Participant
And then.
Aditya Rao
So all of the businesses that had covered on my, on my initial review, which is our PEB division, our US Business, Ascent Body invite, Engineering, Hydraulics and boilers, right? All of them have operating margins. Let me talk about margin after variable and ebit. But let me talk about margin after variable because when you talk about additional revenue, that is what drops down to EBIT. So all of them have well over 15% in terms of operating margins. In terms of contribution margins, as we call them, in some cases, such as engineering, services, Hydraulics and Ascent, it’s vastly above 15%.
Also it’s about 20%. So as we bring this revenue in, what drops down to your ebit, what drops down to your PBT are these higher margin revenue streams which should drive our PBT up, which should drive our EBIT margin up. So I do guide you to our EBIT margin being around in the 10 to 11% range and our PVT being around 5%, 5.2% range. When you add substantial amount of revenue and you add it at a higher, at the operating margin, we’re adding it at the impact on DVT and what you said operating, that’s exactly what operating leverage is and that’s.
We expect to see that going forward. In terms of an exact number, I would say that the fact that our market shares are low in all of these businesses gives us confidence. It’s a good thing in the context that we expect as we add revenue and add margin, and we’re not saying that we’ll cross 10% in any of our businesses. Again, it’s good in the context that it will be easy for us to add revenue without compromising on gross margin, other quantitative products. So I guess the picture we are presenting to you is one where our revenue grows, our market share grows, but not above 10% and they are going to be adding it at a gross contribution margin which is substantially margins.
Therefore our PVT margins will go.
Unidentified Participant
Thanks very much for that. So that’s very clear. And so just the CapEx budgeted CapEx for the next two years.
Aditya Rao
We do have that mapped out internally but we would be comfortable sharing that once it’s finalized. So we do not have a CapEx number for the next two years to share. We can tell you we’ve come there’s well over 100 crores this financial year that for this financial year which we have already greenlit and we do not expect this to change our debt equity and reserves itself as you would see, our cash reserves are.
Unidentified Participant
Yes, it doesn’t. It doesn’t. It doesn’t. It doesn’t. So thank you very much. All the best sir. And congratulations again on an excellent quarter. Thank you very much sir.
Aditya Rao
Thanks.
operator
Thank you. The next question is from the line of Venkat Subramanyam from Organic Capital. Please go ahead.
Venkat Subramaniam
Hi Ajita, Congrats on walking the path and what you’ve been promising. I have a couple of questions on engineering services.
Venkat Subramaniam
Now.
Venkat Subramaniam
We probably have two next two engineering services. One is what is given purely as a service, probably along the lines of Bin methods app and the other which kind of lays the foundation for our EPC.
Aditya Rao
Just to clarify sir, our engineering services is entirely 100% third party design, engineering, product development and detailing services. Erection revenue for PEB is not captured in this at all. It is completely captured in our PEB revenue.
Venkat Subramaniam
Now in that business, what’s our vision overall? Because I see a lot of report about BIM and engineering services being a few billion dollar business. Now what is our broad vision there? Let’s say over the next three, five.
Aditya Rao
Years it’s driven from a core capability standpoint. We have very strong capabilities in structural engineering. We have one of the largest teams in the country on structural engineering. As I’ve said, sometimes there are adjacencies and opportunities, shall we say such as building information modeling which we have started very strongly in Europe which is over. It’s a multi million euro business for us. Now our addressable markets here are massive but we will be focusing in the near term on structural engineering and building information modelling as the major drivers. Both of those combined will be well over 50% of our engineering services revenue.
And our competitors in this field are thousands of crores. So we would not guide you today to reaching appreciable market share in that business. But we can tell you it will be a fast growing business and the net bottom line is something that is going to be quite healthy. So it will help us also from a margin expansion perspective. But it is a driver of our profitability, not necessarily a driver of our revenue.
Venkat Subramaniam
Given the size of that market. Aditya, why would it not be a driver of revenue? Meaning is it because of any constraints? Do we have constraints on the talent side or that we don’t have enough on the front end? Why would we not want to chase even, let’s say about a 3, 4% kind of market share which itself will be very sizable.
Aditya Rao
Yeah, I mean 3, 4% in the fees that I mentioned as you said would be a substantial increase or a very high multi fold increase in our current revenue. We are working to achieve higher numbers. But right now I think we’ll have to think about it foundationally. Most of our customers in engineering, all of our customers in the engineering services business are in the US and in Europe. I think the path we want to take is one where we provide easier level engineering services then expand into solutions and larger value propositions which give us the larger addressable markets.
The reason I may sound a little circumspect and conservative on that is that some of our competitors in this business, be they pinnacle, be they the science and be they the others in the structural engineering space, they’ve been there for a long time and yes the revenues are much higher than us but they spend the time building that human capital base. I think we need to right now focus on building that base and then project the higher numbers. I think it would be premature for us to say that we will reach the focus in market share and then because this is not a lot of, a lot of other businesses.
It’s. It really is a question of deploying capital and building up our asset base here. There’s a lot of confidence building. There’s a lot of work that has to be done to set up that initial customer and relationship base. It’s a very relationship based business. So at this point we would not be willing to commit to higher market share. But I can certainly say it’s an opportunity that exists and we are serious about seizing that opportunity. But right now we will see strong growth but not the numbers that are being projected which is 3,4% market share is not on the cards right now.
Venkat Subramaniam
I appreciate that. My second question is on pep. One of our listed competitors in India has almost negative working capital in this business. While we still are struggling to come back to maybe about 60, 65 days or so, what is it that we need to do to actually have customers have more faith in advancing ads, etc.
Aditya Rao
So in my opinion, and I’m aware of the firm which is speaking of, and there are others as well in the market, unlisted strong players as well, who we can compare benchmark ourselves against. Moderating our working capital is a task that I think we take seriously. And if you take the industry as an average, it is in the range that we are in the way we are structured, we make use of a lot of non cash LC’s. It comes into a total debt, comes into our interest cost. But we don’t use a lot of cash, we use a lot of non cash.
So that automatically lends us to have certain terms with our vendors which perhaps prevents us from seeing the shorter working capital numbers advances from our customers too. We do not use the same instruments which allows us to get the higher percentage advances. Our average for our advances from customers is about 15 to 20%. Some of our competitors get 40 to 50% but they do guarantee some of that. There are bank guarantees that are given out. So we are exploring ways in which we can refine it. What I can tell you is that the working capital for PEP has seen an improvement from 100 days to 90 days to 80 days to 70 days.
And we do expect further improvement and we’ll definitely not graduate to no working negative working capital. I don’t believe that is at least the business model we have adopted. I don’t believe that is possible. But whatever we don’t take in terms of advances, whatever we don’t give also reduces an element of risk from our side. So I think as per industry Knox, we are comfortable with the 60 day working capital cycle. I think that works well for us. I think we will use that to get higher margins, higher scale and, and improve our revenue base.
So I can, I can. But we are looking at all options in terms of rationalizing a working capital useful.
Venkat Subramaniam
Understood, Understood. My last question is on, you know, it’s a follow through on your initial remarks. I heard you kind of guide to you know, high double digit kind of volume value growth on at least about 4 of our focus businesses. So and therefore our profit growth should be well above 20%, right?
Aditya Rao
We will not guide towards profit sir, but we do expect Strong double digit profit growth this fiscal and we are very very confident on that.
Venkat Subramaniam
Understood sir. Thanks a lot and all the very best congrats for was in the past.
Shrikant Bhakkad
Thanks.
Aditya Rao
Thank you so much.
operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please restrict your questions to two per participant. The next question is from the line of av. Avnish Tiwari from B. Please go ahead.
Unidentified Participant
Hi, am I audible?
Aditya Rao
Yes, please.
Unidentified Participant
Yes, I have a question on diversified engineering.
Unidentified Participant
So how much did your defocused businesses grew this quarter over quarter and what is the progress in last quarter on these businesses in terms of which ones are scaling down as you desire and where are you able to release capital or which ones are still capital consuming and any steady reaction you are evaluating.
Aditya Rao
The way you took on solar one so deprioritized BU’s or the bus which are not growth vectors. I think I would prefer that nomenclature because sometimes these things can be perceived differently. But the non revenue growth bus actually in the last quarter the growth of the prioritized bus was substantially higher and we expect that trend to continue. It’s a simple impact of restricting capital, not really growing them. And there are strategic growth options which are on the table which you can realize value for those bus as we bring them online, I will communicate them but we have plans for each and every one of those revenue streams.
What we don’t want to see is those bus go to zero revenue and then it’s effectively we have not gained anything from being present in some of those business units such as, you know, such as railways and steel and pump sections and special grades here. These are all good decent revenue streams. They still make money, they’re still all profitable. The company should as a company realize value for them. And we’re going to work together just as we have for solar for example. So those options we will bring to you from a revenue standpoint, about 35%.
What was the attribution of TINAH returns? 35% of revenue was the difference we used.
Unidentified Participant
Yes.
Unidentified Participant
35% of the consolidated revenue. That’s right. The second question I have was if we subtract your U.S. subsidy business from.
Unidentified Participant
Overall PEB business when it appears India.
Aditya Rao
PEB margins are a bit soft, quarter over quarter. Is that the right investment and shouldn’t it be improving if RAB really is ramping up on the utilization? Let me answer the rabbi question first. I think we’ve the setup timelines, the time it took for us to ground it was a little Bit longer but that’s good. I think that a good job has been done and month over month it’s increasing, it’s scaling, it’s still not reached peak capacity utilization rate but that’s imminent. We definitely see see that as something that is going to happen and it’s already at a healthy pickup now.
Overall revenues have gone up, our operating margins have stayed the same. But our PVT percentage you should have in the, let me call it a standalone PV business, not including our US business has also scaled up. So it is not flat but it has also improved and will continue to grow. But we don’t give segment PBT in that sense so we can’t give you an exact number but I think you can definitely take the US PBT margins would sustain and India PVT margins will grow as a percentage and the values of both will of course grow strongly in the next fiscal.
Unidentified Participant
Great.
Unidentified Participant
One last question I have was.
operator
Sorry to interrupt you but we request you to rejoin the queue for follow up questions. Thank you. The next question is from the line of Rahul Kumar from Vaikaria. Please go ahead.
Rahul Kumar
Yeah, hi sir, the question which I have was on the order book for the two business PEV India and PEV us.
Rahul Kumar
We have seen not a very strong.
Rahul Kumar
Order inflow this quarter. So what would you attribute that to?
Aditya Rao
Order inflows in the quarter have actually been quite strong. We’ve been a little picky considering the price increase. But to give an example, even in the last two weeks we have booked two large orders. I do not have any order book concerns either in India or in the us. I think we need to build up our capacity. We’re increasing skills. There’s also an acquisition in the US for additional structural fab capacity that we’re bringing online very very quickly in the next few weeks. We hope so. No, I mean it probably is something that just a snapshot number differences because we tend to bleed out our order book towards the end of a quarter and then it goes back up towards the end.
But as of right now both businesses have very strong and very healthy order backlogs and I think as our capacity utilization increases we can increase it. But I don’t think we’re constrained by the market right now.
Rahul Kumar
Okay, and second question which I had.
Rahul Kumar
Was on the gross debt part.
Rahul Kumar
What is our plan on reduction in the cross debt over FY26 if we are doing FX of close to 100?
Shrikant Bhakkad
As we said for our growth we would need working capital for us to grow. So working capital will necessarily lower as a Percentage as we grow our revenue long term loan is the long term decisions that we make to invest in the capex and invest in technology. So these are the amounts which will see a growth depending upon the growth that we have. So what we should, what we would guide you to is look interest as a percentage of the working capital as a net number where you can see and we have guided towards this towards 4%.
So we will have this 4% is what we will maintain and that would be our target for us to maintain. But overall working capital will see a growth as the revenue grows and the term loan will increase as we do more capex and more.
Aditya Rao
Acquisitions.
Rahul Kumar
Okay.
operator
Sorry to interrupt you but we request you to rejoin the queue for follow up questions. Thank you. Participant, it is requested to restrict your questions to two per participant. The next question is from the line of Aniket Nikom from ABN Capital. Please go ahead.
Unidentified Participant
Yes, hi. Thank you for the opportunity and congratulations sir on a great set of numbers. We’ve been owning and following this company for over three years and quarter after quarter you have delivered and just kept on getting better. And I think that’s just so wonderful to see. So firstly, congratulations to you and the full team for this extraordinary performance. Sir, my first question is on the acquisition that we have done. So I see we’ve acquired a company called Telco Enterprises. So could you tell us a little bit about that and how that sort of fits in with our US strategy And what is the one off in EBITDA around the acquisition expense?
Aditya Rao
Thank you. So Telco, before I answer the question, let me just take a minute while I have all of you. We do understand that many of you have questions and as the management we consider our duty to adequately answer these even if we don’t perhaps address all of your questions or even address them to the extent that we would be. That is satisfactory. We are going to be upping our investor engagement and we have an investor conference that is scheduled as well which we will be doing on a quarterly basis. We will have that in Bombay next month.
Month is when we have our next semester conference and we will make sure that we keep you apprised of it and also spend more time so that the one hour time that we have on investor conference calls. If it’s not sufficient to address some of these questions, I think a longer term, longer time period and a frequent recurring time period will help us better address a lot of your questions. But we welcome the questions and speaking for, on behalf of management, we are happy to, to have so Many of you engaged with us. I think it’s something that we are very excited about.
Coming to Telco. Your question on Telco. Telco is a structural steel fab acquisition close to Birmingham in the US the reason for that is because we can now build out an order backlog in structural steel as opposed to metal buildings as well in the US now to give you some numbers, the metal buildings market in the US is obviously one of the largest in the world, is quite massive at about 8 to 10 billion. The structural steel business is even larger. And when you look at our capabilities in designing flexible things which we’ve been doing for our US customers for a long time, we can take turnkey structural projects as well.
So we have picked a company which is old, which is, which has been driven in the US very well regarded by their customers, about 25 million in terms of revenue and very healthy profit margins and again very low working capital which is the case frankly for all of our as well. So the acquisition is very green lit. We have not completed the acquisition as yet. That is imminent in the next few weeks and that was what I was referring to. Once that is done, it will substantiate. Even without that we are going to acquisition. We are going to have strong double digit growth in our US business but with that we will have even further growth.
We are very excited but it opens up a new revenue stream and market for us. So the board has debated it at end and we are positive about it. If we complete this in the next few weeks and from the next quarter onwards, hopefully you will see us.
Unidentified Participant
Thank you so much sir. My other question that I had was just on the bedside will we benefit from any rate cut and how are we thinking about, you know, how are we thinking about credit rating and so on? Do you think there’s an opportunity for us to better just given our performance and our significant improvement, Is there a way for us to better manage our capital structure a couple of years out? What are some things for levers we can do?
Aditya Rao
So credit rating is a matter of high importance for us. We are right now for a working capital visited A1 and our overall exit at a long term visited A. Our goal is to get to A and working capital I guess cannot be much more. But we have talked to the rating agencies and we’ve asked them what they would like to see. What is. I mean they will never tell you do this and therefore we’ll give you a rating. That’s not the way it works but they’ve told us directionally what we will need to do in order to them to review a rating for us.
So the next few quarters we are going to attempt to move our balance sheet to where a need to be. It will speak to our working capital utilization. If our margins improve, if our cash improves and our working capital cycle reduces by the goals that we set for ourselves we believe a rating upgrade is imminent and that is what we work towards. However, I will not speak for the rating agencies. We will do our job in improving our positioning. We know what the numbers they want to see are and we are hard at work to achieve this number.
But our next goal is A plus.
Unidentified Participant
Great sir. Thanks again. Congratulations to all.
Shrikant Bhakkad
Thank you.
operator
Thank you. The next question is from the line of Rehan Nalji from Equity Capital. Please go ahead.
Rehan Laljee
Hi.
Rehan Laljee
Am I audible?
Shrikant Bhakkad
Yes.
Rehan Laljee
Yes sir.
Rehan Laljee
Congratulations on a great set of numbers. I think we’ve been watching the talk very evidently. So first of all just want to congratulate you on that. Secondly, a couple of quick questions. Mostly they’ve been answered. I just wanted to understand from Riot Baby’s perspective what is the peak revenue we can generate from.
Aditya Rao
Sorry. Okay, so peak revenue at 26,000 tons. Rivalry would be about 30 cents. 38 crores.
Rehan Laljee
38 crores.
Aditya Rao
I’m sorry, we should have made that clear. So 38 crores per month.
Rehan Laljee
Understood. And this is across all formats or is this only for a certain business unit or a business segment?
Aditya Rao
This is gross.
Rehan Laljee
Okay. On your debt profile everyone’s been asking you about the same. I just wanted your net debt to equity. So your debt to equity has come down if you see it from 0.9 to 0.83. But the absolute figure of debt has gone up about I think 40, 41 crores. Going forward. With the growth that we’re talking about how do we see the debt to equity over the next say two to three years? Because I think the very sweet spot of growth with every all your market share you’re doing the right thing. But the only black box still happens to be your debt.
So if you can just explain to me how we see the debt to equity in the next two to three years and not debt in an absolute format it will be great.
Aditya Rao
So that two components to this from our internal planning point of view. One is the debt equity piece which I would request Shrika also to address. Then there’s interest cost in revenue because the reason we don’t have very high long term debt. If you just take a long term debt then our Debt equity is 0.1 or something to My knowledge accurate. So I think it speaks to a revenue growth and a working capital cycle. Debt cost is a direct straight line extrapolation of those two numbers. So let me ask Srikanth to extrapolate what he sees the interest cost and debt as a percentage of revenue and revenue growth.
From a debt equity point of view. I believe including long term, short term, all kinds of debt. You know, I mean LC’s, bank, charities, all of that. I think getting to 0.7 is what we are targeting. We are at 0.8 right now. I am confident that we will be able to achieve that with a little bit of moderation in our working capital also. I think that is well within the ballpark of us being able to achieve. Let me pause there. Srikanth, your thoughts on this question.
Shrikant Bhakkad
The debt to equity ratio is a combination of how much is the debt that additionally we’re taking what the equity that we are generating.
Shrikant Bhakkad
Equity.
Shrikant Bhakkad
We are on a strong growth path. You will have the equity raise that equity increase that will come up. That is in the form of increase in the profitability that we have quarter on quarter and year on year. Given that you also have the increase in long term and the working capital. Working capital is a result of increase in your revenue. And as I spoke the working capital numbers. Working capital net will grow as we grow our revenue. The long term we do not have too much of a debt as we speak. But we take the debt only when we invest in long term capital projects.
And this long term capital project, as we grow and do acquisition of more, it will slightly increase. While our target Is to reach 0.7 over a period of time. But we are higher. And our plan is to gradually reduce over a period. So the debt.
Aditya Rao
Long term debt will.
Shrikant Bhakkad
Increase only when we have acquisitions as a thing.
Aditya Rao
So.
Shrikant Bhakkad
But working capital will tend to increase as the revenue grows.
Rehan Laljee
Mr. Bakar, I just wanted to understand the interest cost as a percentage of revenues capped at 4%. Is that my understand is my understanding, right?
Aditya Rao
Yeah.
Shrikant Bhakkad
Overall we should guide you towards 4% interest on the net sales slightly. It may increase or decrease in the.
Aditya Rao
As we see today we are at.
Shrikant Bhakkad
3.71 because the complete interest on long term loans was capitalized till the last quarter. But yes, you would see grange count at 4% while our target is to get below 4%.
Rehan Laljee
Right. And considering that.
operator
Sorry, sorry to interrupt you but we request you to rejoin the queue for follow up questions. Thank you. The next question is from the line of Deepak Pottar from Sapphire Capital. Please go ahead.
Deepak Poddar
Yeah, I’M audible, sir.
Aditya Rao
Yes you are. Yeah.
Deepak Poddar
Thank you very much for this opportunity and congratulations on a good set of numbers. The first step is just a clarification. I mean you mentioned. I mean we are looking at EBITDA of 10 to 11% and PBT margin of 5 to 5.2% this year. FY26.
Aditya Rao
No, no, those are last year’s numbers, last quarter numbers to my.
Deepak Poddar
So what is the range of PVT margin we might look at for FY26?
Aditya Rao
That would be giving a projection. Sir, I can commit to an improvement but giving an exact PVT percentage not. But I can say that long term we believe, you know, 200 basis point improvements in our PVT is very achievable. And that by that by long term I mean in the next three years.
Deepak Poddar
In three years, right.
Aditya Rao
Those are, those can be targeted. But I want to be clear, these are not, you know, these are forward looking numbers for the numbers I mentioned were what were already, what was already achieved last year, last quarter and we expect to have improvements on those.
Deepak Poddar
So what you’re saying is that at least on the PBT margin on a quarter, on quarter basis we can see improvement from what we have seen 5.2%. I mean not giving an exact number but yeah, directionally.
Aditya Rao
Directionally you will see improvements. And again as I keep saying sir, look at what’s been happening last three years. It’s the same business model, the same trend we are following the exact same thing that for the next two, three years all you will see is execute is that plan and it will yield us these improvements.
Deepak Poddar
And my second question is on your revenue part, I mean in the last call also we were kind of indicating quarter on quarter improvement or a sequential improvement in, in your revenue. I mean fourth quarter is generally of the best quarter but from here also we are expecting the same in terms of sequential improvement in our revenue.
Aditya Rao
We will not be able to provide that guidance sir. But I can assure you from a financial point of view we will have growth in our revenue and any range.
Deepak Poddar
We want to provide. I mean what sort of range we might. Because you are reducing your nonproportized revenue mix, right?
Aditya Rao
Yeah. So that process is running through but in spite of the process you will see double digit growth that in our revenue on a financial year basis, quarter to quarter you may see, you will see revenue growth. So that I can tell you there’s no way for us to grow a profit substantially if we don’t grow our revenue.
Deepak Poddar
Double digit growth is what we are looking. Okay, okay. That’s very helpful sir. I mean that that would be from my side all the way best.
Aditya Rao
Thank you sir. Thank you.
operator
Thank you. The next question is from the line of Bala Subramaniam from Arihant Capital. Please go ahead. Sorry to interrupt you. Your voice is too low right now. Can you use handsets? Yes, it’s fine. Can ask your question? Sir.
Balasubramanian
We have lot of GVs and subsidiaries. And how mixed contributions. Which one are profitable and which one are drags tagged on the consolidated.
Aditya Rao
JVs which are profitable. JVS which are. So you subsidy there.
Balasubramanian
How much? What are the subsidies? Profit.
Aditya Rao
Okay. All of our business units are profitable. We do not have any loss making units. As far as a joint venture is concerned. You may be aware that last quarter we had declared a joint venture with network that JV is just being set up. It will start revenue in the second half of this year. And we have every expectation that when it does it will be profitable. We do not anticipate. I mean as of right now we are consolidating a minority interest loss.
Shrikant Bhakkad
A small amount.
Aditya Rao
But that’s also pre operative in nature. Small amounts. We have high confidence that a JV partner who is the majority partner in that business is committed to strong revenue and profit growth. And we don’t anticipate any of our subsidiaries or JV taking losses.
Balasubramanian
Okay sir. So pet order book around 780 crore. But US orders are around $53 million. I just want to understand about tariff purpose. Like whether we are completely taking care of tariffs or shared by the customers. And what’s the margin difference between PEP India and US orders and how this forex volatility impact our revenue on the margin.
Aditya Rao
Let me clarify this a little bit. So our US manufacturing supply chain is completely independent from our India manufacturing supply chain for metal buildings, for hydraulics. There’s an overlap. Now for the question that you asked. Our US order backlog is 53 million and not 43 million. It’s usually a very short gestation order backlog. I mean our execution timeline of the US are substantially quicker than they are in India. To your question, both of those are healthy order backlogs and we expect both of them. There is no need for us to worry about tariffs at all.
Because we do not have any. The vast, vast majority of our production in the US is sourced locally, produced locally and we do not import many things. And it’s the same thing with India. We produce and procure locally. So because of these independent supply chains tariffs are not a big factor at all. Just very little. 5% bought out items which even if you see a little bit of an increase, they’re easy to pass through. We work in an operating margin model and all of our order books quotes take into account our current pricing and tap our expected and desired operating margin on top of that at standard.
So impact for us on revenue, as I mentioned in the last quarter because of perhaps policy changes in the US are not projected to increase to affect our revenue order profitability or our order backlog. So we don’t see any, we don’t see any change coming on that front and our order backlog looks forward for the next quarter. And two, no changes there. Margin point of view, our operating margins in US are substantially higher and that will continue to be the case is my expectation.
Balasubramanian
Got it sir. And other current liabilities might be more than 100% in this. Is there any specific delayed in payables or contingent liabilities like any specific reasons for that?
Aditya Rao
Both our current assets and our current liabilities are a little bit higher. It’s just because of higher procurement cycle. I do want to say that average accounts payable is 45, 45, 45 days. So we pay more. The vast majority of our vendors get paid in 45 days. So we don’t. We are pretty prompt on that. So we don’t foresee any working capital sustainability issues.
operator
Thank you. So we request you to rejoin the queue for follow up questions. The next question is from the line of Nilesh Shah from Arrow Investments. Please go ahead.
Nilesh Shah
Yeah hi, can you hear me? Am I audible?
Aditya Rao
Yes, hello.
Nilesh Shah
Yeah, hi. So congratulations Aditya on a fabulous set of numbers and wishing you all the very best. I had quite a few of my questions have already been answered. The question pertaining to the JV with Zetwork. Now Zetwork has a lot of JVs with a lot of players. We have 49% stake in the JV. There has been a small loss for the quarter I think for the year. If Zetwork were to dilute their equity further for fundraising plans, would Penhr be participating in that?
Aditya Rao
No sir, we would not look to dilute to participate further rounds. Right now the plan is for what we have put in in terms of our assets, in terms of capital we put in. It is. That’s where it’s at. We will implement that. That itself should make the JV a thousand crore plus. Revenue doesn’t matter to us because we are not going to be consolidating that revenue. What’s most important for us is we realize value from our investments and longer term I think Zoc would want to take. We are a strong partner. We are as you said, our equity stake is a subsea as well.
But we are very aligned network at us in terms of growing the company through the reserves that we have, the profitability we make as well. And if anything additional is needed, I assume that they will. You know, there’s debt option, other options. So equity expansion plan and investment plans from Tennhar right now.
Nilesh Shah
All right, perfect. Thank you so much. And just to follow up on the cadmium subsidiary that we set up around a couple of years ago, if you can throw some color on cadmium.
Aditya Rao
Cadnum is a subsidiary at acquired. It sits right now in our aerospace business. It’s the operating margin there is quite high 50, 60%. So we are debating a potential because it’s again a scalable good model. Good. And there’s a fair amount of engineering and product development also that can be put in place. We’re debating whether we can house it in our prioritized industrial components and hydraulics business unit. But as of right now, the revenue levels there are quite small. I mean they’re about a million euros per year. So not very large, not very material.
Nilesh Shah
Thank you so much.
operator
Thank you. The next question is from the line of Pratik Bhandari from Earth Ventures. Please go ahead.
Unidentified Participant
Yeah, hi sir. Thanks for the opportunity. First of all, just wanted to understand about the figures you mentioned for the peak revenue potential from your Rayaba rally plant and how much of it would start flowing from the Q1 of FY26. A substantial number, exact amount. I think we can tell you where at about 50% of our PC capacity due to utilization. But this as we add manpower as the, you know, Q1 tends to be a muted quarter sometimes only Q1, Q2 was in the first half of this year. You see us reach very high capacity positions and we’re not committing to the entire 38 crore gross sales or 30 crores net revenue being reached in the next few months.
But a very high percentage of that. Sure. We are committed to 38 crores is the annual sales fee that you’re talking about.
Aditya Rao
Right.
Aditya Rao
Maybe correct that that’s not annual. That’s not. It’s monthly. It’s monthly. Absolutely. 38 cross net sales. We should say closer to 30 crores. Okay, got it, got it. And also you have mentioned in your previous calls about your, you know, plans for the BIW vertical to scale up to thousand crores. So by when are expecting the same to happen? That would take us a few years. Right. Now it’s, we are in the process picking up customers and the kind of customers we’re picking up gives us a lot of confidence in the business. We’re picking up programs quite strongly.
They’re investing more into our both our hot stamping business which is, which is a high value technology and very few players in India who have it. And also tailor willed lags are also another investment we’re making. Tool development is another that we’re making in that business. The combination of all of those three is giving us customers such as Hyundai. We expect Kia to come on board soon as well. We’ve just signed Sierra Automotive. We have Maruti, Ashok Leland and others as well. So all of these are revenue streams that are in the future. As they all come in, I think we will be able to achieve our revenue targets.
But we are not constrained there by the market. Some of our competitors are 10,000 crores in that business just in body and wire. So the market will not prevent us from growing. Building customer relationships, building with OEMs is the key success factor here which we are doing. So after that it’s just a question of execution which we will do over the next two, three years and get our revenue out. All right. And one last question on the acquisition you have highlighted in your presentation based out of Dubai. So if you can throw some light on what exactly the company is into and are we targeting the Middle east area only through this acquisition or any other geographies as well.
So the acquisition is for engineering services, structural steel engineering. The Middle east does have a significant construction market. And a piece of that is from the design, detailing, engineering side is building information, modeling side is what we’re looking at. That business is immediately accretive. We believe we have the manpower increase. We’ve built up our manpower in the last two, three months. We are working three shifts. We’re working Saturday, Sundays as well. We are confident we’ll be able to cater to that. So from next quarter onwards we think revenue from there will start. And I think we can come at immediate profitability from that.
Yeah. So immediately revenue positive. Immediately profit positive. And it can grow and scale. It is right now only for the Middle East. Engineering services. Specifically for Middle East. Right, I’m sorry. Specifically for the Middle East. Especially with the Middle east yesterday. Okay, so you, you mentioned that.
operator
Sorry, sorry to interrupt you but we request you to rejoin the queue for follow up questions.
Unidentified Participant
Sure.
Unidentified Participant
Yeah. Thank you. The next question is from the line of Ankur Agarwal from RC Business House. Please go ahead.
Unidentified Participant
So on the Larger frame time frame, let’s say by 2028. What is the minimum assistance assessment for the top line or.
Unidentified Participant
The management assessment in 2028? For what?
Unidentified Participant
For top line in the margins we.
Aditya Rao
Were able to provide guidance. Sir, as I said, I think the narrative we are providing you is our addressable markets are all very big. We have built good strong capabilities in there. As we build up our asset base, our revenue and profit increases. So that’s all we’re going to do. The revenue potential is quite vast. What exactly the revenue we will achieve we will not be providing guidance. But I can definitely say on behalf of my team, we’re committing to double digit revenue and profit growth year on year.
Aditya Rao
We have enough capacity to attend that addressable market.
Aditya Rao
We right now we are at about our capacity utilization across businesses and it’s a blend. So some cases we have higher, some cases a little lower. It’s between the 60, 65% range. We typically aim for 75%. Once we 75% on an OE perspective I think it’s important for us to expand capacity.
operator
But we request you to rejoin the queue for follow up question as there are participants waiting for their turn. Thank you. Thank you. The next question is from the line of Ashish Soni who is an individual investor. Please go ahead.
Unidentified Participant
Congress on the good set of number and gradual improvement. My question is more to do with scaling of high margin business like us, Aspen business or engineering services. What is stopping or why are we not able to get more aggressive in that regard? Can you throw some quality to. I think given that market share can improve but it’s gradual improvement. But what is stopping us really growing aggressively on those businesses?
Aditya Rao
I wouldn’t say anything is stopping us. I think you’ve defined out a plan, a methodical plan to scale. I think there are five revenue streams we want to grow and grow aggressively. Our definition of aggressive is sustained double digit growth. Are higher revenue growth numbers possible? Absolutely, and we will not say no to them. But as you mentioned, our market share in both engineering services and metal buildings in the US are quite low. We are number 10 in the US and we can easily climb into the top five and scale and we intend to do that.
We are mapping out our market. We are expanding capacity. As you know, we are investing significant capital in all of these businesses. There are acquisitions which are under play. So work is happening. Sir, I think I am quite confident that all of these business which I spoke about, the two business specifically you spoke of will continue to see growth and they will continue to scale well, but it is not conservatism. We just want to make sure that the foundation is well prepared and then growth is automatic. That’s, that’s all.
Unidentified Participant
Do you think in next two, three years it can like substantially grow with all the base building, lessons learned and everything in place for you in this business?
Aditya Rao
Yes. I think your question was whether in India we will be able to grow. Yes. I mean even with something like peb.
Aditya Rao
Right.
Aditya Rao
Which is one of our largest businesses, which probably is one of our largest business, we are at the number three or number four. So we are trying to get to number three, number two as well. But our goal is not market dominance. Our goal is decent market share, good revenue, good capital efficiency and profitability. That’s our goal. Our goal is not to be number one in anything. That’s not the way we think. We think about sustainable market, sustainable growth, good R and D, good product development. And I think our plan is working. So we’re going to go ahead with that.
operator
Thank you. So we request you to rejoin the queue for follow up questions. The next question is from the line of Dilip Kumar Sahoof, an individual investor. Please go ahead.
Unidentified Participant
Yeah, hi. You know, the question was regarding the US business and you know, in continuation of the previous speaker’s question in Arika, if you can give us some qualitative change that has happened in US business in the last three years. Because I see the order book move from $50 million to $50 million in last three years. But the business of dollar business hasn’t really scaled its coming years. In the past you were looking at, you know, people change and recruiting sales team and you know, having manufacturing capital on the ground, etc. With the current acquisition.
Can you just let me know how things are going to look in next two to three years?
Aditya Rao
Thank you. That’s a good question and the good point you made. If you were to review the last two, three years, our ddt. Let’s talk structurally where we are. About three years ago the raw material price was seen in the US or the finished price product for what we were selling was about $6,500 per tonne. We’re right now at about $4,500 per tonne. So that in effect is something that has given us, it looks like, is there strong growth? Some growth, but is there strong growth? I want to assure you that raw material pricing aside, capacity increases have happened.
There’s a lot of automation that has been put in our market presence in terms of our DMs has expanded beyond a Few states in the south and the Midwest, they’re not still captured anywhere near all of the east and the south of the US but we are going to be adding a lot of states with this acquisition. We get a lot of the manufacturing states as well, such as South Carolina, we get Alabama, we get some element of Florida as well. This expansion in our market itself is making us very confident that this year from a revenue perspective.
Yes, as you said, the order backlog has grown. Revenue also is going to grow very strongly this year and with the acquisition of Telco, that will grow even more. So you should. We can definitely guide you to high growth in ascent in this financial year. And foundationally, the work we have done in the last two years, building up our design teams, expanding our capacities and prepping this acquisition and completing it, that is going to bear fruit in the next two years, three years. So we’re very happy with the progress they have made and retaining margins and they’ve done it in a manner where they generate a lot of free cash as well.
So it’s, it’s, it’s one of our best performance and it’s, it’ll scale.
Unidentified Participant
Yeah. My second last question is to Srikant. He talked about I think the, the other income this quarter, some 1 ups and some I think month recurring expenses. So can you give some, you know, color on how the other expenses are going to look like this year? The current fi.
Shrikant Bhakkad
As I told in my opening remarks, the other income predominantly come from bank deposits, margin monies that we have at the bank, the investment that we have in mutual funds, the gain in the foreign currency transactions and translations and certain liabilities which are no longer required. We generally write back and the rental income that we get on some of these buildings. So bank deposits and other things will continue to be at the similar. What we have closed around 3 crores. Other income which is other than the debt basically which is on your mutual fund, closer to 2 and a half percent liabilities which are no longer required to come back which as a result of quality issues and other things that we have is another component to it and foreign currency translation transaction reserves.
So most of these items are going to be there as we speak. And as we see this has been.
Aditya Rao
4Th of June, it has been close.
Aditya Rao
To around.
Aditya Rao
6 crores.
Aditya Rao
I think approximately 2 to 3 crores will be there every month.
Unidentified Participant
Yeah, because other expenses. I’m so sorry, it was other expenses we commented on for.
Shrikant Bhakkad
Okay.
Aditya Rao
Yeah.
Shrikant Bhakkad
Other expenses as a result overall has been from 609 crores to 654 crores. Predominant part of other expenses also include certain job work, processing charges, subcontracting expenses and Ericsson expenses. While these are variable costs. But this group gets regrouped separately as we do not have the separate line of reporting for these items. So these are contractual things. When we have additional orders and other things that we execute, we let out as a contracting erection, expenses.
Unidentified Participant
Yeah, okay, thank you.
operator
Yeah, thank you. The next question is from the line of Vivek Kumar, who is an investor. Please go ahead. Mr. Vivek, your line has been unmuted. You can go ahead with your question.
Unidentified Participant
Am I audible, sir?
Aditya Rao
Yes, please go.
Shrikant Bhakkad
Am I audible?
Aditya Rao
Yes, you are.
Unidentified Participant
Can you throw more light on your.
Unidentified Participant
US business in terms of growth, sir?
Aditya Rao
Yeah, I understand. So in interest of time, I’ll make it quick. A US business is predominantly custom designed building systems, what we call metal buildings, hydraulics and engineering services. All three are projected for high growth. We have strong assets there and I think the markets there are huge on the back of large addressable market. Good quality assets equals automatic revenue growth and profitability. Thank you. Let me suggest this. We will have our investor conference, so I think we should. There are a lot of questions which are still on the table, which we are not able to get to.
So I think it will be healthy for us to have an investor conference set up next month where we have all of our stakeholders present and we are also present for the whole day or two so that we can adequately address some of these last questions.
operator
Thank you, ladies and gentlemen. In the interest of time, we will take this as a last question. I now hand the conference over to the management for closing comments.
Aditya Rao
Thanks to all of you for your interest. We will work hard to achieve the goals that we set for ourselves. As always, I’m very thankful and very grateful for the support that we have received from our team, especially the investors have been with us for many years. We hope to execute well and we hope to talk to you soon next month on our performance and our growth and our strategy.
Shrikant Bhakkad
Thank you very much.
operator
Thank you. On behalf of Philip Capital India Private Limited. That concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.