Salzer Electronics Limited (NSE: SALZERELEC) Q4 2025 Earnings Call dated May. 26, 2025
Corporate Participants:
Unidentified Speaker
Savli Mangle — Head of Investor Relations
Rajeshkumar Doraiswamy — Joint Managing Director, Chief Financial Officer & Whole Time Director
Analysts:
Unidentified Participant
Poonam Sanghavi — Analyst
Prabal Jain — Analyst
Ankit Kapoor — Analyst
Ayush Chhabria — Analyst
Darshan Jhaveri — Analyst
Sumire — Analyst
Shridhar Jadhav — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Sajar Electronics Limited Q4 and FY25 earning conference call. As a reminder, all participant lines will be in the lesson 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. Please note that this conference is being recorded. I now hand the conference over to Ms. Poonam Sanghvi from Progressive Shares. Over to you Ma’ am.
Poonam Sanghavi — Analyst
Thank you Avirath Good morning everyone. On behalf of Progressive Shares I welcome you all to the Q4 and FY25. Post earnings conference call of Sazer Electronics Limited. This conference call may contain forward looking statements which are based on the beliefs.
Poonam Sanghavi — Analyst
Opinions and expectations of the company as of the date of this call. These statements are not guarantee of future performance and involve risk and uncertainties that are difficult to predict. I now invite Ms. Sabli Manglis for the opening remarks to be followed by a question and answer session. Over to you Ma’ am.
Savli Mangle — Head of Investor Relations
Thank you Poonam and good morning everyone. Thank you for joining us today to discuss the audited financial performance for the quarter and full year ended 03-31-2025. I have with me Mr. Rajesh Duraiswami, Joint Managing Director Mr. P. Sivar Kumar, Assistant Vice President, Marketing Mr.
Bellari, Assistant Vice President Business Development Mr. F. Venkatachalam, General Manager, Commercial Mrs. R. Menika, General Manager, Accounts Mr. K.N. murugesh, Company Secretary Mr. Jitendra Makariya, Director, KC Industries and Mr. Ramban COO KC Industries. I shall now take you through the standalone financial performance for the quarter and full year ended March 2025. During the quarter our revenues increased by 15% year on year to rupees 336 crores from rupees 380 in the previous corresponding period. This growth was mainly driven by higher demand for industrial switch care wires and cables as well as building product division businesses mainly due to high demand products like three phase dry tie transformers via harness relays and new products like contactors et cetera.
The EBITDA excluding other income was rupees 26 in Q4FY25 as against 31 in Q4FY24 a decline of 15% mainly on account of higher expenses due to smart meters. The EBITDA margin for the quarter stood at 7%. The profit after tax is rupees 8 crores in FY25 as against 12 crores in Q4 FY24 coming to our full year financial performance in the full year March ended the 31st 2025. The net revenue in FY25 is rupees 1383 crores as against rupees 1136 crores in FY24 a year on year growth of 22% driven by businesses of Industrial switch care, wire and cables and building products.
The EBITDA excluding other income stood at rupees 125 crores in FY25 as against rupees 110 crores in FY24 a year on year growth of 13% mainly driven by higher sales in high demand products like three phase dry tap transformers, wire harness relays, contactors etc. The EBITDA margin for the full year stood at 9%. The tax 62 crores in FY25 as against 43 crores in FY24 a year on year growth of 44% and the margins stood at 5%. Coming to our balance sheet highlights the network stood at least 530 crores as on March 31st, 2025 a year on year growth of nearly 14%.
Happy to share that the Board of Directors has recommended a dividend of rupees 2 rupees 50 paise per equity share of face value rupees 10 each. This is subject to shareholders approval. Moving on to the breakup of revenues as per business divisions, the Industrial Switchcare division contributed 56% of total revenues in this quarter and 58% in FY25. This business grew 2010% year on year in Q4 and 29% year on year in FY25. The EBITDA margin for this business division stood at 8% in Q4 and 12% in FY25. The Wyerson Cable division contributed nearly 38% to our revenues this quarter and 37% in FY25.
There was an increase of 8% year on year during the quarter and 14% in FY25. The bidder margin for the quarter stood at 6% while for the full year it was at the same at 6%. The Building Products division contributed 6% to our revenues in the quarter, well as 6% for the full year. This price Coming to the exports we continue to face steady growth mainly due to higher sales in Middle East, Africa and Asian countries. During the year. Exports to Middle east and Africa grew 91%. Asian countries grew 34% year on year. North and South Americas grew 14% for this quarter the revenue share sorry of the Revenue was nearly 24% for the full year ended.
Export share was nearly 27%. The growth in exports was 10% year on year in Q4 and for the full year the exports grew 24%. Thank you and I would like to now hand over to Rajesh to take us through the business developments and the way ahead. Thank you and over to you.
Darshan Jhaveri — Analyst
Thank you Savli Good morning all of you. A very warm welcome to all of you for Sals Electronics Limited earnings conference call for the fourth quarter and full year ended 31 March 2025. Thank you all for taking the time today to join us for this call. We have shared our results, update presentation and media release. I hope you all must have received and gone through it. I would like to share some key updates and also the Market and Future Outlook we are witnessing a transformative period in the electrical industry driven by powerful macro trends, surging energy demand, accelerated electrification and an urgent global pivot towards clean and sustainable energy solutions.
This shift is reshaping not only the way electricity is generated but also how it is distributed, controlled and consumed. In this context, the switchgear industry is evolving very rapidly. According to various datas it says by 2030 wind and solar are expected to contribute approximately 30 to 35% of the global electricity generation and it continues to grow. In India, the government has set an ambitious target to achieve 500 plus gigawatt of non fossil fuel capacity by 2030. This aims for about 50% of India’s electricity generation to come from renewable sources. In this context, the need for intelligent, efficient and environmentally responsible switchgear system is becoming very vital, particularly in India.
India’s industrial switchgear segment is one of the fastest growing segments in the world, projected to grow at around 8% CAGR until 2030. This growth is underpinned by robust investments in renewable energy, national electrification programs and push for smart grids and automation across sectors. Smart switch gears enabled with monitoring, control and diagnostics is gaining traction as industry demands more reliability, efficiency and safety. Here at Salzer we are very well positioned to leverage this trend with our focus on innovation and quality. Simultaneously, the wire and cable industry in India also continues to show strong momentum powered by urban expansion, smart city initiatives and make in India digital infrastructure, etc.
A shift towards organized players and increasing export potential reinforces a promising long term outlook. With the market expected to nearly double by 2032. At Salza we remain agile and future focused. We are actively expanding our product portfolio, entering high growth projects and building strategic partnerships to capture emerging opportunities. Our execution combined with strong balance sheet and deeper customer relationship gives us the confidence to drive sustainable growth. As always, our commitment is to create long term value for all our stakeholders by staying ahead of the industry trends and consistently delivering high performance solutions. Now coming to our key updates on the company and the recent developments as part of our growth strategy, we all know that we enter into smart meter manufacturing business and we are happy to share that a second order worth Rs.
50 crore for smart energy meters from a leading AMASP in India has been secured. This reflects strong momentum and growing trust in our customers in our technology. We are in advanced talks with various other AMSPs also and optimistic about follow up orders as we continue expanding our presence in India’s digital energy transformation. We are also very pleased to announce rupees 192 crore order from Bangalore Corporation BBMP marking our re entry into Energy Saver project space. In partnership with Schnell Energy Ltd. We will install our in house developed energy management system and street light controllers and replace street lights with energy efficient LEDs across parts of Bangalore City.
This project showcases our R and D strength, supports BBMP Smart City vision and aligns with national energy efficiency goals. As part of our portfolio review, the Board approved writing off our equity investment in Salazar Costar EV Chargers and Salzar Emach Electromobility amounting to rupees 83 lakhs and Rs. 34.75 lakhs Respect in each of the joint ventures. These ventures focused on EV charging infrastructure and vehicle conversion kits were found to be operationally unviable and yielded no economic returns. This strategic vision allows us to reallocate resources towards more sustainable and value accretive opportunities. To stay aligned with our long term vision in the EV charging space, we have made a strategic investment in an Hyderabad based company called Ultra Fast Chargers Private Limited acquiring a 30% stake through KC Industries Limited with our earlier JV facing delays due to limited tech transfer support from our joint venture partner.
This timely move keeps us actively engaged in the promising growing sector and well positioned to tap into this high growth potential market. Going forward, our EV charger business will be driven by through our investments in Ultra Fast Chargers Ltd. We are seeing strong demand from major charge point operators and with UofC’s technology combined with Salzus manufacturing strength, we are confident in achieving our ambitious target of producing and selling 1000 DC fast chargers in financial year FY 2026. We remain committed to executing our growth strategy and capitalizing on emerging opportunities in Our key markets as far as our subsidiary KC Industries is concerned, the sales have been growing well and EBITDA margins.
Hello. Hope I am audible.
operator
Yes sir, you are audible. You may go ahead.
Darshan Jhaveri — Analyst
KC’s top line grew 9% year on year in FY25 to rupees 53 crores from 49 crores in the previous corresponding year. EBITDA grew 27% year on year to 9 crores from 7 crores last year. Pat margins at KC are remaining at very healthy pace. PAT margin at 11% in FY25 as compared to 9% in FY24. Looking ahead to FY26, we anticipate strong revenue growth projecting an 18 to 20% increase in all our existing businesses. The Smart Meter segment is set to play a very pivotal role and is expected to contribute significantly to our revenues in FY26.
We remain focused on strengthening our margins through sustained operational efficiency and disciplined executions across all divisions. I extend my heartfelt appreciation to the Salsa Electronics team for their dedication and hard work and to all our stakeholders for your continued trust and support in the company. This is all from our side for now and I would like to thank you all very much for your time and attention. And we can take questions now.
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 the Touchstone phone. If you wish to remove yourself from the question queue you may press star and two participants are requested to use answers 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 Prabhal Jain from SM Holdings. Please go ahead.
Prabal Jain
Hello. Am I audible?
operator
Yes sir.
Prabal Jain
Good morning. So my first question is on the Smart vertical. Smart Meter vertical sir, from Q1. I think we have been in talks with 7 8am amisc Q2. You got a 5 crore trial order so post that. I think it has been like two to three quarters. So when can we expect a big order win here in this vertical? And are there any reasons for like delaying getting a big order like due to quality inspection or something or like what is happening at the ground? If you can talk a bit about that.
Darshan Jhaveri
Sure sir. As you rightly said, I think by end of quarter two. I think we received the first trial order from one of the NASPs for 5 crores which we executed in Q3. And as we executed and it was tested and found satisfactory, I think we received the second order in Q4 for a value of 50 crores. This shows that the product has been acceptable and it’s working well. And we expect this size of an order to, to continue as we go forward. As you rightly asked, I think there has been delay in securing orders on a bulk basis.
I think there are various, multiple reasons which I think I have explained in the previous calls. Also because the AMI sps also are struggling to implement and install these smart meters due to various constraints involved in the ground level, in the field level. I think these misps are overcoming this and then they’re starting to install this. So that’s where I think the whole project is slow for us. But as I’ve said, we are confident of securing at least 500 crores of revenue this financial year for smart meters in FY26. So that conference we have, and we hope that we will, you will soon start seeing order inflow for us.
Prabal Jain
Okay, great. Sir, a couple of follow up questions. So first I’m sure you must be bidding, you must be having a healthy bid pipeline of the the order smart meters that you have bid in. So if you could share some numbers around that. And the second one is, I remember you said your realization per meter is around 2600, 2700. So you can give us some color on what is the average realization of your peers like? Because I’m sure you must have had an idea about it. So how are we positioned in terms of that? Like are they charging more than us, less than us? Ballpark equal?
Darshan Jhaveri
Yeah. First of all, we are not in the bidding business. We are not supplying anything direct to the discoms. So our business is to do sell on a B2B basis to various AMISPs who are taking orders from the discounts. So we are not in the bidding process. The bids are being taken by the AMASPs and they reroute the orders to us. So that’s how this business happens. That’s the first answer for the question on the realization. I think there are a few models of meters available so the price ranges anywhere between 2300-2700 depending on the model.
So we are also selling at these price levels on comparative basis. If you ask me, I think in any market, in any product, an established high quality player will definitely Demand a premium of 5 to 6% in this meter business also is going to be similar. That’s what we expect because we don’t have a very accurate data on what our competitor selling prices are. But I’m sure that you know an established player will definitely command a premium than a new entrant like us. I hope I have answered your question.
Prabal Jain
Yes sir. Yes sure sir, One more follow up question. I think in terms of smart meter more or less our capec has been done. If you could talk a little bit. About the Saudi facility where are we on that? And the capex plan for the upcoming FY26.
Darshan Jhaveri
The CAPEX for smart meters is done, is completed. We are all set to just take up the production and fulfill the capacity that you have set up. So there is no more capex that is required for smart meters on the Saudi. We have not done any capex so far. We are just waiting for the allocation of space by the Saudi industrial corporation called Modan. Once we the space is allocated which we expect to happen anytime in this quarter or beginning of next quarter then we will start doing the capex and the expected capex in Saudi facility is approximately 10 crores.
Prabal Jain
Okay, so FY26 capex the only capex is the Saudi capex.
Darshan Jhaveri
If you see only major capex. Yeah, other than our maintenance capex.
Prabal Jain
Thanks. I’ll get back in the queue. Thank you.
operator
Thank you. The next question is from the line of Ankit Kapoor, an individual investor. Please go ahead.
Ankit Kapoor
Thank you sir, my question is regarding the overall top line that we have achieved with this S525. I mean it’s very good that we have increased our top line but if you see the bottom line is in it badly and margins are shrinking plus our interest cost is rising. Total Debt is over 400 crore and for a small company like Salzburg it’s very horrifying. Right. So my question is only that noticing that we are over committing but under delivery we are saving.
Darshan Jhaveri
Sir, thank you for your very candid question but I would little bit differ on this because we have been delivering what we have been committing except for this quarter in Q4, FY25 and there are multiple reasons for that which I will come to it. I’d also like to go back a little bit in the history and tell that over the last 10 years I think we have had a CAGR of 17 to 18% on top line and 15% on the bottom line. And if you also look at the last five years I think the CAGR has been at around 16% and 15% on top and bottom line.
So we are definitely committed to delivering on a long term basis value to our stakeholders. And for your another specific question of the debt at 400 crores I think almost 90% of our debt is tied to the working capital and if you see the recent increase in working capital in this current year. It’s mainly because one is the smart meter investments we are making and also the stocks that we are adding for the smart meters which is yet to produce or to generate revenues for the company significantly. So that’s one reason. And on the top line if you see we have also grown at close to 30% on our switchgear business on a year on year basis.
And as a company we have grown around 22% which is a significant growth I would say given the situation in the last six months or second half of last year, which was actually a slow year relatively. So given all these situations I would say that this Q4, except this Q4, I think the company has done well and delivered what we had committed. And the reason for this Q4’s lower profitability is mainly because of the loading of expenses of all the smart meter business which has been set up this year and has not generated revenues. I think revenue of only 5 crores.
But whereas we have spent quite a lot of money on that and you also seen some of the write offs that we have done on our subsidiaries. So these accumulated things have taken the hit on the profitability and that is the reason that we are seeing reduced profitability in Q4. But on a year on year basis I think we are still at around 9% though we committed the EBITDA can go up to around 10 which has not happened. 10, 10.5% which has not happened. But we are sure and and committed to increase our profitability to 10 10.5% EBITDA in the coming year.
And another point I want to add is if you look at the interest cost, I think though the absolute number is going up, we are still conscious on this and we are still maintaining as a percentage to our top line it is less than 3%. It is close to around 2.8% which is what last year also it was. It is continuing to be at this year and we will ensure that we are conscious and we’re looking at this and we will ensure that we will bring this down over the course of the period.
Ankit Kapoor
One follow up question from same line that the net profit which is attributable to the owner of the company is just 46 crores in this FY25. When you see the consolidated financial statement while the company is saying that the net profit consolidated business is just 2 crore and you’re representing ETF on the basis of that 52 crore only while the actual profit is 46 crores annual profit, I’m Talking which is attributable to owners of the company. Right.
Darshan Jhaveri
Ah. But I. I think let us start from the standalone profit. If you look at the standalone profit even let us take. I think we had an exceptional gain of close to around 15 crores net of our write offs. So even without considering that, if I don’t consider that I remove the tax part of that income also. And if you see our ebt is around 67 crores without considering the exceptional gain and if I remove the tax portion for that we will still be at a of 49 crores on a standalone basis which is a growth of around 13% compared to last year’s profit of around 43 crores.
So that’s on a standalone basis. Now if we take this to the consolidated basis because when we go into the consolidation of the profits we Normally as per NDAs 110 accounting standards we remove the exceptional item. It is not shown in the consolidated figures. So that’s why that is not shown there. So from 62 Pat we have to on a line by line basis if you add the profits of KC even that is attributable to our stakeholding of 71% it is still 4 crores. So if you add that I think we are at around 52 crores.
That’s how you see 52 crores as fact on a consultative basis.
Ankit Kapoor
Okay.
operator
Thank you. Yeah, thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference please limit your questions to two per participant. The next question is from the line of Ayush Chabaria from Shervas Capital. Please go ahead.
Prabal Jain
Yeah.
Darshan Jhaveri
Hi.
Ayush Chhabria
Yes sir. Thanks for taking my question. So I just wanted to understand like as we have guided for the smart meters business will be dropping somewhere around 400 to 500 crores when you’re going forward. I’m not wrong. I just wanted to understand the working capital days for this would be somewhere around. I’m just assuming somewhere 200 to 250. So how do we fund this going forward?
Darshan Jhaveri
Sir, currently our working capital cycle or a data cycle is at around 85 days right now. 85 to 90 days approximately. On a gross sale level basis for smart meter I expect this to be around 45 to 60 days. It is not going to be 200, 250 days. Because as I already mentioned in this call to one of the earlier questions we are not getting into selling for the discoms where it is an eight year payback. We are into a B2B business and we will be selling to other amisps where the payment terms are between 45 to 60 days.
Ayush Chhabria
Understood. So broadly, whatever 45 to 60 days, you’ll be funding it through short term debt, right?
Darshan Jhaveri
Yes, yes, yes.
Ayush Chhabria
All right. Also sir, I just wanted to understand on the gross margin front there’s a lot of like I think for the first time a company has taken stock in trade. This is pertaining to smart meters, is it? Just to clarify.
Darshan Jhaveri
Yes, I think mostly it is smart meters but it also includes other products.
Ayush Chhabria
I think going forward we’ll revert back to our. Yeah. Majority smart meters.
Darshan Jhaveri
Yeah, correct. So going forward we’ll revert back to our original gross margins that we used to do. Right, Correct.
Ayush Chhabria
All right, that will be. Thank you so much.
operator
Thank you. The next question is from the line of Sridhar Chadam from JM Financial. Please go ahead.
Unidentified Participant
Sir. Am I audible?
operator
Yes sir.
Unidentified Participant
So just want to understand. So this entire 50 crore order of smart meter will be executed in SY26.
Darshan Jhaveri
Yes, definitely FY26. Not. We’re not going to wait for the full year. I think we would be executing this as soon as we get the clearances from AMSPs. Mostly it will be split in this Q1 and maybe a little bit in Q2.
Unidentified Participant
And sir, the guidance of fine went.
Darshan Jhaveri
And we expect more orders coming in Q1 as well as Q2 also.
Unidentified Participant
So what would be the revenues from smart meters from for this year and the margins around that?
Darshan Jhaveri
Yeah, as I said in this call before, it can can reach up to 500 crores this year.
Unidentified Participant
And what would be the typical margin? An EBITDA margin? Anywhere between 12 and 14%. 12 to 14%. And sir. Correct. The contract of BBMP. So that 192 crores is spread across how many years?
Darshan Jhaveri
192 crores. The implementation period is eight months. And we will get this 192 crores back in over a period of seven years. Over a period of seven years. Seven. Seven years. Yeah. 84 months on a monthly basis.
Unidentified Participant
Okay. Okay. So that’s all. I’ll come back in the queue. Thank you sir.
operator
Thank you. The next question is from the line of Senthil Kumar from Joindre Capital Services Ltd. Please go ahead.
Unidentified Participant
Good morning sir. I’m audible. Yes sir, very much. You mentioned that EBITDA was impacted by higher expenses from new smart meters. Could you please quantify how much expenses we can incurred in Q4 as well as in the full year? In the full year. I can. I can tell you. I think that we should have. We have incurred approximately around 8 to 10 crores. So that 8 to 10 crores has impacted the margin, right? Yeah. Okay. And second thing, you just now said.
Unidentified Participant
That the total borrowings is around a 400. Sir, any repayment plan for FY26? Sir, I don’t think so that we will be able to do any repayment in FY26. Because this year also is going to be a significant growth phase for us. Because I think if we had the smart meter revenues also with our existing business growth of 20% then I think we will be. Overall we will be growing at approximately around 35% plus or 40%. Close to 40%. So at this growth phase, I don’t think we’ll be able to reduce our working capital debt in this year.
But post FY26, yes, we can look at reducing the working capital debt in FY27.
Unidentified Participant
And lastly, sir, northern South America revenue was declined by 17% in Q4. So what is the reason for that? Sir.
Darshan Jhaveri
I definitely am not attributing this to any tariff issue because I think that came up in the very last period. So this was a normal sequentially it has reduced 22% year on year. Also it is down 18% because last year was a good year. This year until nine months it was good. But Q4 has been a little down. So it is nothing related to any tariffs. But if you look at the year on year we have still grown close to 15% in North American market exports. So we don’t see any negative so far. We only see strong momentum from various customers in US and other markets.
And we expect the business in US to continue to grow between 15 and 20% for the full year. Right, sir? Yeah, for the full year.
Unidentified Participant
That’s it for my take. Thank you. I joined the team.
operator
Thank you. The next question is from the line of Karan Mehta from Ekitan Capital llp. Please go ahead.
Unidentified Participant
Hello, good morning. And good morning to everyone on the Solzer team. So my question was a little bit more macro in nature and I wanted to just understand that given the large and growing requirement for electronics and electronic components, particularly in emerging areas like semiconductors, consumer electronics as well as telecom, I was wondering if you could provide an overview of how Salzer is positioned in the segment and whether we stand to benefit from this growing trend towards manufacturing in India. So if you could just answer that and then add a part two to that.
Darshan Jhaveri
Sure. I think we are basically in the infrastructure sector. So any investments, any growth on the infrastructure side, I would attribute all the sectors that you mentioned on the semiconductors, electronic component manufacturing will actually spur investments in that ecosystem. If you look at there are companies who already set up shop in India for making machinery stewards, semiconductor testing or assembly of electronic components and things like that. So this will spark the investments in all the infrastructure facilities and any growth in infrastructure facilities will translate into business for our products. So definitely I think this is going to positively impact sales electronics for our products.
I cannot say directly we will be selling into the electronic sector, but definitely on the infrastructure front we will be selling into this. And we already see a very momentum and very good investments coming into India on this sector and that is creating demand for the products.
Unidentified Participant
So is there any plan to kind of maybe venture further downstream on this front? And I think specifically I was also wondering if the company has investigated entering into production of capacitors as a product line and whether you can share any insights on that front if this is an area you’ve investigated.
Darshan Jhaveri
No, I think we have not gone into exploring the possibility of electronic component manufacturing so far. But we do have an idea on how we can do some kind of backward integration for our smart meters on the EMS facilities, that is manufacturing of assembly of PCB boards. I think that’s something that we are exploring. But right now it’s going to be backward integration for us. But as we start doing that then maybe we can explore and to see whether we can hide that off as a separate business unit or not. I think that’s, I would say at least a year down the line.
Unidentified Participant
Yeah, sorry, just the last part of this question. Sorry to interrupt.
Darshan Jhaveri
Mr. Karan. Mr. Karan, sorry to interrupt. May we request you to return the question queue for a follow up question? Since it’s a very close follow up, can we take this and answer it?
Unidentified Participant
Okay, sir. Please go ahead.
Unidentified Participant
Yes, thank you. So last part is that are we seeing any demand traction for our wires and cables business from data centers in particular?
Darshan Jhaveri
Yeah, data centers actually across the globe. It was a very, very fast growing market until I would say December 2024 and post that. I think globally data center demand, demand from data centers globally has reduced for whatever reasons. I think a lot of people have put their projects on hold or push their projects three to six months away. So we are seeing a slowdown in data center business globally, but in India it is completely opposite. I think we are seeing a lot of demand in the data center businesses. And of course, yeah, wire and cable and wire harnesses is one of the product, but the major product that we sell into data Centers are the magnetics, the transformers.
So we are seeing a lot of demand for transformers from data centers in India. Globally it has slowed down and it continues to be slow even now. We expect that. I mean our customers say that things can get better and pick up again post Q1 of this year.
Unidentified Participant
Thank you very much sir and wish you all the best. Thank you sir.
operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. The next question is from the line of Tarshal Javeri from Crown Capital. Please go ahead.
Darshan Jhaveri
Hello? Good morning sir. Hope I’m audible.
operator
Yes, sir.
Darshan Jhaveri
Hello? Yeah, hi sir. Yeah, yeah. So sir, I think you’ve given a, you know, basic guidance and everything so that I would not like to ask more on that but just wanted to know, I think our industrial gear we said in Q4 the margins were lower than half year dice around 7, 8%. So how do we keep that going in Q1 like because that is also caused I think a significant drop for us like in terms of margin because I think from December we were at around 11% and now it came down to 8% for us.
So just wanted to you know, ask about the health of a margin like what led to a lower margin for us in the industrial.
Darshan Jhaveri
My opinion, I think this is a one off quarter and I’m sure that we will get back to our normal EBITDA margin levels starting Q1 and the full year. I think we will continue to grow our EBITDA margins definitely. We are confident of that.
Darshan Jhaveri
Okay, that’s great to hear sir. And so just like on an overall basis like I think we can, you know, we have two parts right now like if our smart makeup business clicks. So we could see like a bumper here, right? So FY26 could be a 35, 40% growth here. So in that case, how will our bottom line growth be? Because there as we delivered on our top line growth, you know, consistently our bottom line somewhat is more lagging. I would feel like it was a 20 growth in top line should result of maybe a higher growth in bottom line because we get some leverage somewhere.
So we wanted to, you know, you know, just ask a bit more towards the bottom line for us. Like how do we see it? Like maybe there’s an inflection point, like okay, we achieved this much growth so that’s now the extra revenue will just directly flow through for us. So just wanted to chew your brain a bit on that, sir.
Darshan Jhaveri
Yeah, I Think you’re right to some extent. I think the top line growth should deliver a higher bottom line growth. But as you have seen that we have been on a good growth phase all these years, I think there has been a lot of other things that that has hindered our bottom line growth. So if everything goes well and if we both these sectors that our new business and our existing business continue to deliver as we are committing, I’m sure that this year the profitability will definitely start to grow as we expect.
Darshan Jhaveri
As you are expecting.
Go ahead sir, please.
Darshan Jhaveri
Yeah, yeah. So what do you know? So okay, so other new business that we want to get into, BP charges. I just wanted you know a bit of a color on that. Like you know, you want to send thousand B.C. charges to how the traction will it come more to the later half and at what and are we breaking even in that business a thousand or you know how would that just. Or will there be some kind of burn for us?
Darshan Jhaveri
DC Charger business will break even from the start. I think we have already sold close to around 70, 80 charges last financial year after our investment into the company in August September. So post that. I think we already sold close to 100 charges last year and this year we are having orders right now close to around 150 charges. And I’m sure that we will see consistently business happening over the year. So as and when it happens I think we will keep reporting in the quarterly calls what’s happening.
Darshan Jhaveri
Yeah, thank you.
operator
Thank you. The next question is from the line of Sumeri from Indus Equity Advisors. Please go ahead.
Sumire
Yeah, hi sir. Good morning. Am I audible?
operator
Yes sir.
Sumire
Yeah. Sir, just one question. Having observed the company’s growth and its commendations on that. But when we go through the last two con calls history, I think sir we were giving a guidance of 18 to 20% in the existing business as well. But we were aiming for I think a 600 to 700 crore smart meters revenue I believe. Now sir, if I’m not wrong, you’re moderating that to a top line of up to 500 crores and you moderated the EBITDA guidance revision from say 11% to I think a 10 to 10.5% negative say by 50 basis points or maybe 100 basis points in terms of an EBITDA margin trend.
So would that be a slightly downward guidance and if so any particular reasons why we are Moderating this for FY26? I’ll come back with my other two questions. Post this.
Rajeshkumar Doraiswamy
Yes, no on the smart meter. Yes, I think we were a little optimistic and we did give a guidance of around 600, 700 crores earlier. But as we see the market, how this is evolving, how the customers are installing the meters in the field, how this is going to go as we scale up. So based on all this field experience, I think we are scaling down our projections. That’s why we are saying that it will be around 400, 500 or 500 crores. But having said that, I think we are still aiming for higher business as we go forward.
We will know in the next 1 2/4. At the end of 2/4 we will know how the business is turning around and whether we will be able to scale up more than what we are committing or less as we go forward. That is one. And on the margin guidance also, as we look at it, I think this year also we wanted to increase our EBITDA by at least 1 percentage point, which didn’t happen. The reason being, I think the macroeconomic situation because of various uncertainties, global uncertainties have driven the commodity prices a little higher, which was not expected.
We didn’t expect this to happen. And that’s one of the reason that the margins are little lower. And again, that is one of the reason that we are also guiding a little lower EBITDA margin. But if things turn out to be well, good, I think we can still be at around 11% EBITDA in the coming year.
Sumire
Well taken, sir. So just to follow that up in terms of your Q4 on the expense side, while I do note that we’ve completed the capex optically, it’s looking like the purchase of stock in trade as well as the increase in the raw material consumption is primarily, I think due to smart meter production. Right. Of course I do believe that you all are incurring this opex and one would think if that’s happening, you are expecting some sort of production to translate to revenue in I would think Q1 or Q2. But then if that’s the case, would that be a recurring theme going ahead? That we would be purchasing fresh stock in trade, would see an increase in the OPEX side with a sustainability of this level whenever we execute smart meter orders.
And so I’ll follow on to that. Out of your, you know, short term borrowings and your incremental working capital that you’ve taken on board, can you give a blended estimate of what your cost in MCLR terms or your rate of interest for your short term borrowings would be? That’s all.
Rajeshkumar Doraiswamy
You’re right to some extent. I think you’re right. I think we are stocking up for our smart meters and the smart business is still in its early ramp up stage. And as you know any early ramp up of business requires working capital stocking and it takes a couple of quarters to stabilize until it becomes routine. So that’s what is happening right now. So as this new business scales up we definitely expect the overall efficiency of the company company getting better and also margin contribution to get better. So given the in house technology, backward integration and all this, all this together, I think we see that once the smart business scales up and stabilizes we will see everything getting back in order.
Sumire
So my follow up which was part of the question just your can you give a broad range on your interest cost on the incremental working capital you’ve taken what your blended working capital cost at around in percentage terms it’s between.
Rajeshkumar Doraiswamy
7.75 to 8.25% from different banks. The interest cost that we are expecting and as I already mentioned we are conscious of what we’re doing and we will ensure that the overall finance cost on our P and l will not exceed 3% of the revenues.
Sumire
Understood sir, thank you and best wishes for the future.
Rajeshkumar Doraiswamy
Yeah, thank you.
operator
The next question is from the line of Jagasha and individual investor. Please go ahead.
Unidentified Participant
Am I audible?
Unidentified Participant
Yes sir, very much.
Unidentified Participant
I just wanted to know how much exposure do you have to the US geography and are you seeing any uncertainties because of the terrorist issues and all?
Unidentified Participant
Sir, I think the percentage of exports to us on a full year basis is around 8% for us overall I think we have done 27% of export turnover this year out of which I think 8% comes from north and South American market. Which North America is the maximum for us? Until now we have not seen seen any pushback or price negotiations because of the tariffs that has been levied on us. So we are so far so good. And I think that India is in a very sweet spot though. The negotiations are yet to happen and the finalization on the agreement, trade agreement is yet to happen.
But whenever it happens I’m sure that the tariffs on India is going to be much, much lower than our competitors, particularly China or Vietnam or Turkey or any other country that is capable of competing with us. So I don’t see a major issue in that business.
Unidentified Participant
Okay, fair enough. And one more question. How much capacity do we have for a smart meter production in our coin store facility? Is it close to thousand crore per year? Yes sir, on the top line we will, we are close to thousand crores per year as a capacity.
Rajeshkumar Doraiswamy
Okay, so the moment we get order to start producing, right. We don’t need to do anything else actually, in terms of scaling up or in terms of mobilizing those operations, Nothing. Yeah, correct. It’s only a normal logistics of material components production.
Unidentified Participant
Thank you. Thank you sir.
operator
Thank you. The next question is from the line of rubble. Jain from SM holdings, please go ahead.
Unidentified Participant
Hi. Am I audible? Yes, sir. Good morning. Yes sir. BDMP order. I think this is part of an EPC vertical type of thing which you have resumed right after five years after your notification. Can you talk a bit more about this vertical? Like what are your plans? Are you bidding for some more projects like this? If you’re bidding, what is the bid pipeline and why you have suddenly restarted this project? Was it because your daily partner won this project and called you in because of your product which you’re supplying that like? Or was the initiative taken from your team only? And can you give us a color of what we expect from this vertical specifically? Next identity?
Rajeshkumar Doraiswamy
Yeah. First to answer your last question first, I think it’s always a joint effort. It’s not that somebody does something and you know, you are just silent, but it’s always a joint effort. As we go back and see we have it is announced in house developed product which got into the streetlight management system. So actually Sal’s Electronics takes credit and pride in bringing in the streetlight automation. Way back in 2010, I think that’s when we started the first project in the country. The country’s first project happened here in Klamathur and Madurai in Tamil Nadu for automating the street light management system.
I think after that the entire country adopted this and then ESL came into picture and then ESL started doing this project. So we were very closely involved in this project. We did a lot of projects. At some point of time, Salzar was the largest Esco energy saving company in the country. We were rated by Crisil as one of the best Escos in the country. So we are still rated by Cursilon on the Esco front. But over the period there were a lot of changes in the field in payment terms, in dealing with the corporations and things like that.
So we actually took a step back and watched how the market is evolving because we didn’t want to get ourselves entangled in various other issues and stretch our balance sheet. So that’s one of the reasons we stepped back and was waiting and looking for it. And we were always looking for opportunities. So this opportunity in Bangalore came up with this high profitable venture and we saw a lot of safeguards built in the agreement on payment terms. And that’s why we thought we will bid for this and we won the bid. So we are getting into it.
It is not that we have not done anything or on the five years and suddenly we are getting into it. This has been a project, a sector that has been in focus. We have been watching as we got a good opportunity, we jumped into it and we took the order. And as we already mentioned, our partner consortium Partners Schnell Energy Ltd. Is an expert in the IoT business and cloud computing and things like that. They have done various other street lighting maintenance projects. So they have very good experience in implementing such projects. So the combination of our technology and their implementation expertise will work very good.
As we take this project up and going forward we will continue to look for similar opportunities as we get good opportunities. As long as it doesn’t impact our other more profitable growth ventures, we will continue to take more projects.
Unidentified Participant
Thank you.
operator
Thank you. The next question is from the line of Sridhar Jadav from JM Financial. Please go ahead.
Shridhar Jadhav
Sir. I just want to understand in the existing business what would be the growth drivers on the current highways?
Rajeshkumar Doraiswamy
Sir, as we see that, as I mentioned that there are a lot of infrastructure investments happening across the country as we grow. I think this basically drives the overall business within the country for us. So that’s how we have been growing. And also the data center business, the renewables investments, this is giving an additional impetus to the growth. So that’s where the 28% growth in the industrial switch care business that has happened for us in this year. And we expect that this momentum to continue for this year in the domestic market. On the export front, if you see as we see that the entire global trade order is being disrupted, I look at it as a very positive way for India because there will be a lot of good things that can happen to India.
People will start shifting their bases from various other countries, particularly China, into India. I already hear from a lot of my customers, my large MNC OEMs saying that our factories in China will produce for China and we want India to produce for the rest of the world. I think a kind of thinking that is going into all the large MNC that is operating across the world. So if this thinking goes forward, I think India will be the biggest beneficiary of this disruption. So I expect that that will drive a lot of growth for our businesses.
All our exports also.
Shridhar Jadhav
Understood. So sir, it would be Tied up with the infra growth that we expect in the mentioned sectors. And sir, on the smart meter thing, so do we. So. So do we have like. So I. I’m assuming most of the costs are front ended now with 8 to 10 crores already incurred. And for the labor and all it would be on a. As in when we receive the orders we will go up with the labor cost. Right?
Rajeshkumar Doraiswamy
Yeah. Yeah. Correct. Yes.
Shridhar Jadhav
Okay. That’s all from my side. Yes, sir.
operator
Thank you. The next question is from the line of ankur Agar from RC Business House Private Limited. Please go ahead.
Unidentified Participant
Good morning, sir. Regarding 192 crore order from BBMP Dixon Consortium. How much share is our company in this consortium? It will be a 50. 50 joint ventures. Okay. Then the order in eight months. Delivered in eight months. So the books it will be in top line in eight months.
Rajeshkumar Doraiswamy
No, the top line revenues will incur. Will be. Will be getting it from 9th month until. For 84 months. The first eight months of the implementation, no revenues.
Unidentified Participant
Okay.
Rajeshkumar Doraiswamy
And this entire project will be implemented through an SPV which will be a subsidiary of ours.
Unidentified Participant
Okay. And how much margin in this?
Unidentified Participant
I think here, I think the. The EBITDA margin, the gross margins will be quite high. But then you know we have to see how the expenses happens. And then now the investment gets repaid. So considering that it’s difficult to say what is the EBITDA margin on this?
Shridhar Jadhav
But overall, sorry, better than regular business.
Unidentified Participant
What we are doing better than. Better than. Yeah, yeah, yeah. Definitely it is better than the regular business.
Shridhar Jadhav
Thank you. That’s all from my side.
Unidentified Participant
Thank you sir.
operator
Thank you. The next question is from the line of Deepak and individual investor. Please go ahead.
Shridhar Jadhav
Hello.
Unidentified Participant
Sorry sir. Good afternoon. Tell me, sir.
Shridhar Jadhav
Yeah, good afternoon. My name is Deepak. Can you say me what is the kind of revenues you are expecting from the smart meters in FY27 and going forward?
Rajeshkumar Doraiswamy
As we all know that we have set up a capacity to produce close to 1000 crores of smart meters per year. So that’s the objective. That’s the aim that we are looking at. So we would like to scale to that level as early as possible. So we definitely expect that we will be close to that thousand crore level in FY27. For which I think this FY26 has to deliver what we expect. So we do around 400 to 500 crores this year. I think the next year doubling of that is very much possible.
Shridhar Jadhav
Okay. Thank you and congratulations for a good set of numbers.
Unidentified Participant
Thank you sir. Thank you.
operator
Thank You. The next question is from the line of Bhagwat from Prosperity Wealth Management Private Limited. Please go ahead.
Shridhar Jadhav
Thank you for the opportunity. Can you please comment on the current capacity utilization for our existing business and what’s our growth expectation over the next few years? From the segment.
Unidentified Participant
Sir, on the. On the industrial switchgear businesses the factories operate anyway between 70 and 75% capacity. Our wire and cable business is between 65 and 70% capacity. We operate right now and I think we have been guiding for three year growth even in the last year and the last calls also I think the next three years we will continue to grow between 18 and 20%.
Shridhar Jadhav
Do you have capacity to scale up further? Like you said we are already at 70 to 75%. So what is the maximum utilization that we can expect to grow at this?
Rajeshkumar Doraiswamy
On the industrial switchgear front we can go up to around 85% capacity. On the wire and cable we can go up to around 90% capacity utilization. As we continue to grow and the capacity fills up we will continue to expand and industrial switchgear business is not a very very capex intensive business unlike what we did for smart meters or other businesses. So as we grow we will dynamically increase and expand our capacity.
Unidentified Participant
Thank you.
operator
Thank you. As there are no further questions from the participants I now hand the conference over to Mr. Rajesh Duraiswamy Joint Managing Director Salzer Electronics Limited for closing comments.
Rajeshkumar Doraiswamy
Once again thank you very much for all the interest and the very candid questions that you have asked. And as I mentioned I think we as a management team we believe in responsible leadership and we will ensure that going forward we will continue to deliver long term value for all our stakeholders. So looking forward to speak to you again in the coming quarters call. Thank you all very much sir.
operator
Thank you. On behalf of Progressive shares. That concludes this conference. Thank you for joining us and you may now disconnect your lines.