Sealmatic India Ltd (BSE: 543782) Q3 2025 Earnings Call dated Jan. 10, 2025
Corporate Participants:
Umar A K Balwa — Managing Director
Ratan Kandare — Chief Financial Officer
Analysts:
Pavnish — Analyst
Devender Wadhwa — Analyst
Hardik Gandhi — Analyst
Rajesh Jain — Analyst
Shantanu Nakade — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Sealmatic India’s Limited FY25 Half Yearly Earnings Conference Call for the period 1st April 2024 to 30th September 2024.
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 touchtone phone.
Please note that this conference is being recorded a statutory Notice all content on this earnings call is for informational purpose, a general nature only, and does not address any circumstances of any particular individual or entity. Do not construe any such information or material as legal, tax, investment, financial, professional or any other advice. Content on this earnings call does not represent or constitute any solicitation, inducement, recommendation, endorsement Offer by Sealmatic.
Any information, materials, statements and or data set out herein is subject to change anytime without notice and as such, no reliance must be placed on fairness, accuracy, completeness or correctness of any information and materials contained on this earnings call.
I now hand the conference over to Mr. Omar Balwa, Managing Director of Sealmatic India Ltd. Thank you and over to you Sir.
Umar A K Balwa — Managing Director
Thank you Ryan for this introduction. Good evening and a very warm welcome ladies and gentlemen to this fourth earnings call of today. Before I begin with the formal address, I take this opportunity to express my heartfelt appreciation to all of you for taking the time out of your busy schedules and accepting our invite and to be part of this call. I would also like to express our gratitude towards our shareholders and the keen interest expressed by investors and the analyst community in our company Sealmatic.
As I have already briefed over the previous three earning calls about the company and our journey in the business of mechanical seals and hence there’s a lot of data available on the BSE side and also on our social media handles such as YouTube, LinkedIn, Facebook, Instagram etc. Hence I will not get into specifics and make this introduction as brief as possible which will allow us to take as many questions as possible.
Just brief introduction about the six months that went by Sealmatics subsidized in increasing its turnover by 19% on a half yearly basis as compared to FY24. Our half year turnover period ending September 2024 stood at rupees INR448 million. This shows the demand for cinematic products is very strong and is being driven by the markets in India, Europe, North America, Middle east and other. Regions globally A quick look on the Outlook for financial year 2025 so for the financial year 2025 half yearly Sealmatic has achieved a year on year organic order intake growth of almost 25% which shall lead to seamless operations and will enhance profitability and similar increase in the top line. Our continuous investment into research and development drives our commitment to keep evolving our capabilities as a leading ceiling technology company globally in the Middle East, Europe, Russia and USA. We are currently expanding our footsteps to support various OEMs and end users. Our recent joint venture in UAE Abu Dhabi in the name of SealTech LLC will provide world class support and services for mechanical seals addressing the needs of major customers like Adnoc, OEMs like KSB, Sulzer, Sundine, Ibarra and host of other EPCs such as Peg, Cipem, Mary Technimond, Warley Wood Group and many other important customers, thus targeting a significant portion of of the US 60 million mechanical sales market in the UAE. Similar activities are in an exploratory stage and are being conducted in Oman, Kuwait and Qatar for the Middle east region. We are also exploring and are conducting a feasibility study for establishing a service center in Houston, Texas. USA Russia has been a good opportunity and a lucrative market for us. We are putting a major thrust over there. We have participated on a continuous basis in exhibitions until now. In the period of last 18 months we have participated in three exhibitions with great success and are slated for the next exhibition in April 2025. Thus our focus in Russia is in a strategic manner. Other important exhibitions that we are participating in the near future are at Sabik in Saudi Arabia which is slated in January 2025 Egypt in Cairo February 2025 Oil and Gas India in Mumbai March 2025 Defense Expo in Chennai in September 2025 Pump Symposium in USA in September 2025. Our drive towards penetration in various markets is relentless and we are committed to establishing sealmatic as a global player or rather I would say that we are globally recognized. Our new manufacturing unit in common got fully integrated with our Mira Road unit. The new. Facility spanning an impressive 25,000 square feet signifies a remarkable expansion. Thus this will announce 65% of our production capacity to the existing capacity at Mira Road. Other important developments was such as we have signed an agency agreement in Saudi with the STG Group, thus marking a significant step in the company’s expansion in the Kingdom of Saudi Arabia. The mechanical steel market in Saudi Arabia is currently valued at an impressive USD150 million, thus giving us opportunity to a potential of a huge market over there. Our global markets which is exposed TO More than 57 countries have demonstrated a longevity along with year on year growth and will remain essential even as new markets will emerge in the near future. We will continue to invest for particularly demanding API682, oil and gas, nuclear, marine and other high critical applications. In this manner we will create long lasting value for our shareholders and employees as a result of which we are one of the chosen companies in the field of mechanical fields for critical applications in nuclear, marine, power plants, oil and gas etc. We have undertaken various CSR initiatives for development of society including education, health care, destitute care, women empowerment, etc. I would also like to extend great appreciation and thanks to our shareholders for all their support and to our employees, customers and partners without whom none of our achievements would be possible. I will now hand it over to Ratan who is our CFO to share vital detail about the half year that went by.
Ratan Kandare — Chief Financial Officer
Good evening ladies and gentlemen. We are very pleased to present our result of half year financial year half year FY25 which showcased significant performance during this period. We have achieved revenue of 44.83 crore which is an increase by 19% as compared to first half of FY24.
We have achieved the profit before tax of 8.7 8.77 cr during first half of FY25 which is a 20% total of revenue. These profit earn are in line with profit percentage earned in March 24th. In this first half of FY25 we have achieved the EBITDA of 10.36 crores which is 23.1% of our total revenue earned in first FY25.
Umar A K Balwa — Managing Director
We are ready to take questions.
Questions and Answers:
Operator
Thank you. Ladies and gentlemen. 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 withdraw 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 Pavnish from Ridya Kas Private Limited. Please go ahead.
Pavnish
Good evening. Am I audible, Sir?
Umar A K Balwa
Yes. Yes. Good evening.
Pavnish
Sir. My question was [Foreign Speech] effect on liquidity of the company. Because of this.
Umar A K Balwa
Good evening. The withdrawal of preferential issue will have no bearing on the cash flow or the liquidity of our company. We are well and sufficiently financed. So to that extent it doesn’t affect our functioning or or operations in any manner. Yes, the market conditions are turbulent at the moment and the investor would have thought otherwise and they decided to postpone it for a while till the markets are in a more stable condition. So that was the only reason for a withdrawal from the preferential investor.
Pavnish
And then my follow up question on this would be like, what kind of revenues do we project in coming financial years like financial year 2627? If you could give some guidance on this, please.
Umar A K Balwa
I can give you guidelines for FY25. So if you compare us with the previous year, FY24, our incremental growth on the top line would be by 25%.
Pavnish
And answer one more question like is there any route through which retail investors could also participate in the preferential issues that that would be there in the coming future?
Umar A K Balwa
Yes, we would very welcome retail investors to participate in the preferential issue as and when we come out with the same. But as you know, there would be a minimum ticket size to that, so that could be discussed and we could design a particular preferential issue in that manner. I mean, we would be very happy to have as many investors possible rather than. Than going with 1, 2 or 3. I would be happy to have more than 25 years.
Pavnish
Yeah. Because I am asking this question because there was a notification on the BSC that you would be having a preferential issues. And then it was. There was a notification that the issue has been cancelled. I mean, how do I approach the company to participate?
Umar A K Balwa
In fact, if you recall, if you would have seen if you have followed the BSE side. So at the time of the board meeting it was announced that we are coming out with preferential issue and everybody had a chance to come and approach the company and we would have welcomed them.
Pavnish
Okay, so next time, whenever there is a chance I can approach the company and I can participate. I meet a minimum investment criteria.
Umar A K Balwa
Absolutely. You’re very welcome.
Pavnish
And just one last question. How do I approach this? How do I post the company?
Umar A K Balwa
I’m sorry.
Pavnish
Just one last question. How do I approach the company? For this.
Umar A K Balwa
Yeah, sorry, you have email ID is listed on the BSE side. You can write to compliance at Filmatic and you will be very promptly answered to your email.
Pavnish
Thank you so much, sir.
Umar A K Balwa
Thank you so much. You’re welcome.
Operator
Thank you. The next question comes from the line of Devinder Wadhwa from Value Profile Investments Adversary. Please go ahead.
Devender Wadhwa
Thank you sir for taking my question. So my first question is what is your order for NTM basis and what is the revenue visibility we are looking for?
Umar A K Balwa
I’m sorry mister, I. I didn’t get your question.
Devender Wadhwa
Sir. My question is what is our order book currently and what is the revenue visibility?
Umar A K Balwa
I answered this question to Pavnish, but I’ll still answer it once more. That we’re looking at an incremental growth of 24% of the top line for FY25. And the order book is robust and healthy to give us another incremental growth for FY26.
Devender Wadhwa
Sir, could you give me a bar the figure of the order book? Possible.
Umar A K Balwa
Order book as on date would be 500 million rupees.
Devender Wadhwa
Sorry.
Umar A K Balwa
Order book as on today would be rupees 500 million.
Devender Wadhwa
500 million. Okay. Thank you, sir. Amanda, next question. Sir, we are doing lots of collaboration with other companies in different countries. How does it translate to the revenue of the company?
Umar A K Balwa
The only joint venture that we have is in Abu Dhabi. And whereas in all other countries they are authorized sale and service representatives. So we sell them and further they sell. To their customers in the region over there.
Devender Wadhwa
Recently we also did a collaboration with Russian company. So how does it impact our revenue? How much percentage IT possibilities can share?
Umar A K Balwa
Russia has been very good opportunity for us because of the ongoing Ukraine situation. As we all know, the market that we see in Russia is going to be very very robust and healthy for us. This year in FY25 we expect a revenue of almost 8 crore from Russia alone which is profitable and which is growing business for us in Russia.
Devender Wadhwa
Okay. Okay sir.
Operator
Thank you. The next question comes from the line of Hardik Gandhi from HPMG Shares and securities Private Limited. Please go ahead.
Hardik Gandhi
Hello sir. Am I audible?
Umar A K Balwa
Yes, yes. Hi sir. So hope you are well. So just wanted to know on the bottom line. So we had a good growth on the top line but the bottom line was quite comparatively lower than last year’s same period. So what was the major reason for that?
Ratan Kandare
A lot of investment has gone into sales and marketing, mainly exhibitions. And if you look at the expense expenditure that has been enormous because you need to invest money into new markets. And we also established five sales and service centers in India which are manned by Sealmatic employees. So that’s some area expenditure. But all said and done, we will have a good bottom line for FY25. As you see in the half yearly it is 23.5% at the moment and we are very confident of increasing it to almost 25.5% on the bottom line. That is EBITDA I’m talking about. So if you compare us with the previous years we would be lying on the bottom line as well.
Hardik Gandhi
Understood sir. So but just on that front, given that we are. We have done this capex and for for now the money which was coming from preference is not there has been stopped. Right. So how will it affect us? I know you previously mentioned this but. So you say that we have good liquidity as well as there is no, there is no issues for the plan going forward. But there was a reason why we raised this money and if this money is not coming to us right now so that will affect us in some negative way. So I just wanted to know how. What’s the plan on that.
Umar A K Balwa
Mr. Gandhi? It wouldn’t affect us in any manner operationally or the cash flow. The money that we are seeking via preferential issue was our expansion into Middle east and into usa. So which still can be, you know furthered or postponed by say about four or six months when the markets will become more stable. Currently it has got no bearings on the withdrawal of the preferential issue.
Hardik Gandhi
Understood, sir. And are we still trying to capture the 15% of the market share or have we increased from that 15% going forward?
Umar A K Balwa
Yes, I think I’ve clarified this in the previous earnings call as well. The 15% of the market share that we’re trying to attain is the new requirements.
Hardik Gandhi
Correct? Correct.
Umar A K Balwa
Yeah. Yeah. We are very much online.
Hardik Gandhi
Understood. And what sir, just one last thing. What is the capacity utilization for the existing plant and how fast do you think that the new plant will ramp up.
Umar A K Balwa
The current existing capacity utilization? I would say on a ballpark figure would be 80%. And the new plant in common which is 20 km from the existing plant is already integrated and would be ramped up in the next two or three months period maximum.
Hardik Gandhi
Understood. So and that new plant has a 65% additional capacity.
Umar A K Balwa
Yes, yes. Yes.
Hardik Gandhi
And how much of a cap like hard. Let’s just say if that plant also wants to reach 80% utilization. So in how many years time do you think it’s. That’s a practical.
Umar A K Balwa
I would be. It would be fair to say in the next 18 months time the plan to also would be having 80% capacity utilization.
Hardik Gandhi
Okay. Okay. And going previously we had. You had mentioned multiple times that in the next next year we will have a golden era where there will be a repeat demand and then on. On that front. So do you think that is still intact and we can see a good, good growth on the repeat orders from the OEMs and everything?
Ratan Kandare
Yes. I’ve always mentioned that our Chandragupta Maurya period would start from FY27. And that is the whole purpose of investing into OEMs and projects and subsidizing our sales. So from FY27 we see a great growth in profitable business for the next 25 years.
Hardik Gandhi
Understood. And just one last. I know I might be taking.
Umar A K Balwa
No problem.
Hardik Gandhi
Yeah. So on the Dubai front, where? Sorry, not Dubai, the Saudi front where you mentioned that we. We were going to use that 20, 25 crore preferential to do a capacity expansion. So if we are going to postpone it, firstly, how long do you think we, we are going to postpone? And second thing is if, if and when you do start a plan there, what time, how much time would it take for the whole plan to be completed?
Umar A K Balwa
I’ll just correct. Maybe there’s a misunderstanding. It is not for Saudi Arabia. It was for Oman, Qatar, Saudi Arabia and USA. The investment of 25 crores is not for a new manufacturing plant in Saudi Arabia. Or for that matter any new manufacturing plant out of India is not possible economically. The whole purpose of economies of scale and cost of production gets defeated when you go and produce the same products outside of India. So the investment is needed to do sales and deliveries and repair for mechanical fields in those regions.
Hardik Gandhi
Understood. So. So indirectly you say. You’re saying that with the joint venture which we did. Which we did there. Right. So the mechanical field will come from there. You’ll prepar it here and then send it.
Umar A K Balwa
In Abu Dhabi. We have a joint venture where we are putting up a service center. Two of our employees are being transferred as we speak to Abu Dhabi whereby we’ll be solely focusing on customers like agnoc. Not only repair our mechanical seal, also repair mechanical seals of any competition, which is a lucrative business. Profitable business.
Hardik Gandhi
Right. So. So the repairing facility will be there itself. Or will we get it here, repair and send it back?
Umar A K Balwa
I’m sorry, I didn’t. I didn’t get a few of the word.
Hardik Gandhi
Yeah. So will we repair the seals there itself or will we import those seals and then send it back to the service center?
Umar A K Balwa
The seal will be replied in Abu Dhabi. It will be a full fledged service center with qualified, qualified technicians. The parts to repair those seals will go from India.
Hardik Gandhi
Understood? Understood. And how big of a service business are we looking there?
Umar A K Balwa
The service business? The current market in the UAE in Abu Dhabi alone is $60 million. There’s the market size over there, which is. Which is totally land user business. And it’s a profitable business.
Hardik Gandhi
Understood. So. But just from what I’ve understood that usually when there is a seal issue or something, they just replace it rather than repairing it. That’s from. From what I’ve known and spoken.
Umar A K Balwa
Yes, many times they replace the entire seal. Even replacement, when we talk about repairing of the seals is 75% of the cost of a new seal. Correct. When we repair a seal, we replace the vital components. And those vital components constitutes 75% of the cost of that seal. So that’s a profitable, lucrative business. So when we say repair, it does not only mean that we’re repairing or servicing, it means we’re replacing the seals with new parts.
Hardik Gandhi
Okay. And any pressure from. From the import of the raw material side? Because I think the raw material is imported. Right. Seeing any types of price pressure or anything from that?
Umar A K Balwa
No, not, not to the, to the extent that we have felt a pinch or a. Or a kind of a push. The system is seamless and in fact certain of the components have reduced to the price of the previous year because the volume also increased over here at Fieldmatic.
Hardik Gandhi
Correct. Correct. And are we going to plan to. I think people were planning to open domestic operations for the raw material which you use. So are there plans to curb the import and just purchase domestically?
Umar A K Balwa
When we talk about critical components such as, you know, silicon carbide. So this is not being currently manufactured in our country.
Hardik Gandhi
Correct.
Umar A K Balwa
So they have to be imported. Then there are certain orange quality of rubber which goes into refineries and petrochemicals. Those are imported. So these are very critical parts. Whereas when we talk about the body of a mechanical seal which is a stainless steel that is indigenous.
Hardik Gandhi
Correct. Correct. Understood. Yeah. That’s it for mine. Thank you so, so much.
Umar A K Balwa
You’re welcome.
Operator
Thank you. The next question comes from the line of Rajesh Jain from NB Investments. Please go ahead.
Rajesh Jain
Good evening, sir. Thanks for giving an opportunity. I just had two questions. One is about the joint ventures and that we are tying up with different parts of the world. You have also given us the potential in those regions. Just want to know down the line, two to three years from the formation of these JVs or the tie ups, how much of that potential we will be able to capture.
Umar A K Balwa
I’ll give an example. Jain, Sam. That when we’re talking about say Abu Dhabi Joint Venture, okay, so that is predominantly going to cater to the market in Abu Dhabi and adjacent areas in the uae. So let us focus on Abu Dhabi. So what we are doing currently over here is that many projects are being undertaken by adnoc. So at all the firms are being manufactured in India and are being supplied to ADNOC in the uae. So all the fields that will go fitted in those terms will be from India. Of course they need to be approved by adnoc, which is a good news that we are approved by ADNO. So our target is to install 100 CES in the next 8 months in ADNOC, then in the, in the year that will follow on another 100 seals and so on and so forth. So in three years time our target is to have minimum 300 seals to be installed in Abu Dhabi. Now this itself, when we talk about lucrative business in three years time we expect a business of US$1.5 million which is totally an end user business, profitable business and a proprietary business because the original sales are cinematic sales. So as we speak of our target for 100 sales for this year we have achieved 70 sales so far, 30 more to go which will happen in the next four or five months time. So that’s the kind of margins, that’s the kind of business we are talking about. And if we expand it to say in Kuwait or in Oman or in Qatar or Saudi Arabia, it’s a similar market size. Of course, Saudi Arab India is a much bigger market and of course a difficult market as we all know because of the stringent conditions the end users. So that’s the kind of bandwidth that we foresee for cinematic.
Rajesh Jain
Okay, that is quite helpful sir. Just a follow up on this is these 100 seam what you are saying, it is basically in the pumps which were sent from India earlier, the sematic seals are only there.
Umar A K Balwa
No, no, these are new projects. So any, any refinery or petrochemical unit there’s always capacity, augmentation, expansion, modernization. So when such activities are being undertaken by the end user such as adnob, they will buy new pumps. So new pumps, new mechanical sales.
Rajesh Jain
Okay, so you are saying it is for the project business only again.
Umar A K Balwa
Yes, exactly.
Rajesh Jain
Okay sir, my second question is as on year ending FY24, how much was the project business? What? How much was the value of the project business? As well as if you can give that number for the H1, FY25 also.
Umar A K Balwa
It would be difficult to give a exact scientific value on that. But I can tell you in FY24 we had done almost 175 mechanical seals which went for projects. And this year we are planning more than 250 seals for projects.
Rajesh Jain
So for us. So what should be the. What should we take as the average cost of these fields.
Umar A K Balwa
For the future business or for the current business?
Rajesh Jain
No, no. Whatever these fields you are saying 150 we have done till FY24 and another 250 you’re doing now in this current financial.
Umar A K Balwa
Yeah, I think I’ve mentioned this in my previous three earnings call. And I’ll still further, you know take the opportunity of giving more insight. This project business it is like the, you know the razor and the blade or the Kodak sim and the camera. So you during projects you are subsidizing your sale. So that is actually in terms of financial value it is not visible. But in terms of future business it is going to be enormous.
And that is why we say from FY27 there is going to be a golden period. Because all the hard work that we did in FY24, 25, 26 and we’ll still continue doing it will all come as end user business beginning FY27. So when we talk about project business it is done at a loss.
Rajesh Jain
I understand that. I have gone through all the last three concords. See what I’m trying to ask you is. Okay, I’ll rephrase my question. So you’re saying your golden period will start from FY27. So based on whatever you have planned for what you have done in 24 and you’re doing now in 25 and then in 26 how much will be the project’s business will come for? You know that annual sale will come from 27. How much will…
Umar A K Balwa
In India FY27 when we talk about and assuming that the current business as we are conducting and it grows in a similar fashion we will be able to add 15 crores of pure end is a business which is highly profitable. Yes. Then again when we go on FY28 so this 15 crores gets repeated plus additional 10 or 15 crores will further be added. So it will be incremental growth as we move forward.
Rajesh Jain
Understood. Understand. Sir, another last small clarification. I think someone had asked about the drop in the margins or the profitability. I think you had mentioned that this year we will will end FY25 with 35% EBIT margin is what we said.
Umar A K Balwa
25.
Rajesh Jain
And last year was how much? Sir.
Umar A K Balwa
Last year was 21.
Rajesh Jain
So this year we’ll end up with EBITDA of 25.
Umar A K Balwa
Yes. Yes.
Rajesh Jain
Okay sir, thank you very much. Thanks for all the clarification and wish you all the best.
Umar A K Balwa
Thank you very much.
Operator
Thank you. We have more follow up questions from the line of Devinder Vadwa from Value Prophyllic Investment Advisory. Please go ahead.
Devender Wadhwa
Thank you sir. My last question is what is the CAPEX planning for next two to three years?
Ratan Kandare
The majority of Capex will go into R D. There may be one to develop future technologies or mechanical seams. And of course the normal CAPEX network, you know entail to modernize our plant, to expand our business would be Approximately say about 4 crores. 4 crores.
Devender Wadhwa
Okay. And what about the R D you said about the normal category is around 4 crore. And how much is R expenses.
Ratan Kandare
And plus R D? R D I would say another 2 crores.
Devender Wadhwa
2 crores.
Ratan Kandare
Yeah.
Devender Wadhwa
This is for. This for FY24. This for one year. Now.
Ratan Kandare
I’m sorry.
Devender Wadhwa
The amount you have said is for F26.
Ratan Kandare
Yes, FY26.
Devender Wadhwa
Okay. Okay. Thank you.
Ratan Kandare
Welcome.
Operator
Thank you. The next question comes from the line of Shantanu Nakare from Value Educator. Please go ahead.
Shantanu Nakade
Yeah. Thank you. Sir. In Russia are we going to sell through the distributors or are we going to sell directly where we are doing the onm? Also.
Umar A K Balwa
We are doing via distributors because Russia is a huge country. It’s difficult to be present in a country like Russia because of cultural differences, language barriers. So it is not possible for us to be.
Shantanu Nakade
Okay, so. And what will be the opportunity? Size. In Russia in numbers? If you can tell.
Umar A K Balwa
Sorry, I. Can you repeat the question please?
Shantanu Nakade
So what will be the opportunity size in Russia in numbers? If you can tell.
Umar A K Balwa
The market size of Russia would be approximately USD200 million.
Shantanu Nakade
Okay. And so my second question is like what will be the ideal inventory days in FY26 or FY27 once the OM business starts?
Umar A K Balwa
I’m sorry, I’m sorry. Can you please.
Shantanu Nakade
Yeah. So what I was asking what will be the ideal inventory days in FY26 or FY27 like once the O and M business starts?
Ratan Kandare
I think we are reducing the.
Shantanu Nakade
Okay, okay. Okay sir. And my last question is. So like what will be the ideal like domestic and export mix going forward?
Ratan Kandare
The same ratio as we are currently using it is in domestic we are using 40%. Export 60%.
Shantanu Nakade
Okay sir, that’s it. From my side. Thank you.
Ratan Kandare
You’re welcome.
Operator
Thank you. The next question is from the line of Harsheet, an individual investor. Please go ahead.
Unidentified Participant
Hello. Hello sir. Am I audible?
Umar A K Balwa
Yes, yes. Please go ahead.
Unidentified Participant
Thank you sir for giving me the opportunity. So sir, first question. Like you have tied up. You have started a joint venture with. Well, with high technologies, right? High tech technologies.
Umar A K Balwa
Yes. In Abu Dhabi.
Unidentified Participant
Yeah, yeah, yeah. So it’s a construction company. So I was just wondering like how it would add a value to cinematic.
Umar A K Balwa
It’s a new company. ITech is a part of Afshan Group. If you look look up option in UAE in Abu Dhabi. I can spam it for you. Habit.
Unidentified Participant
Okay.
Umar A K Balwa
So this high tech is a new company, construction company. It might be a similar company with the same name. And Absha is predominantly involved into rotary equipments. So they. They represent Elliot and other large pump companies.
Unidentified Participant
Got it. And sir, my second question. So you are saying there will be providing services to even like some other company might have installed a particular sale. Now we will be doing service for that seal. And it’s profitable, right?
Umar A K Balwa
Yes.
Unidentified Participant
Yeah. So sir, when we say like our golden periods will start. So that means we will start getting repeated orders. But here right now we are seeing an opportunity. Like we are grabbing other client opportunity into our own. Like we are bringing new clients by grabbing their opportunity. Let’s say after one year still requires maintenance or they require a new sale. So they are not contacting their earlier vendor. They are contacting cinematic. So that’s a business loss for that particular client. But…
Umar A K Balwa
Please go ahead. Please go ahead.
Unidentified Participant
Yeah, same can happen like in say Fi 28 or 29 that our seal also requires maintenance and they give it to other. Some other seal companies. Right.
Umar A K Balwa
They will only come.
Unidentified Participant
Will be lost.
Umar A K Balwa
Yeah, they will only come to seal when the existing supplier is not responding for. For whatever reasons. Or they can exploitative, you know, tactics employed by the current OEM and where the cost is exorbitant. In such cases they do look for alternate, you know, companies to service that particular product. It does not mean that your original product they will immediately contact a competition. Otherwise what’s the point of investing money input projects at loss.
Unidentified Participant
Correct. So. So sir, this brings another question. So right now we are like doing lots and putting our sales over there. That’s great. But like in the coming years we will be increasing our prices. So like the company would keep this in mind that our prices are still low than our computers.
Umar A K Balwa
Yes. Because all the competition that we see globally and also India are all these multinational companies. And simetric price is almost say about 15%, 1 5% lesser than the global companies.
Unidentified Participant
Okay, nice. And sir, one last question. So in one of the interviews I have read that around more than 70 plus fund houses, large fund houses has approached cinematic to know their business and they wanted to invest in this company. So. So are we still seeing the same attraction? Like fund houses are coming and meeting you and knowing more about the company.
Umar A K Balwa
As of yesterday, 103 companies have visited Silmatic. And there’s a keen interest from big, small, medium companies in Silmatic.
Unidentified Participant
So one more question. So why are we holding on to preferential issue? Like if companies is right now holding that then we can go with another fund house and get funded from them and start our operation. Why to delay that?
Umar A K Balwa
Sorry, I. I didn’t understand the question.
Unidentified Participant
Like I am saying, like if.
Unidentified Participant
More fund houses are interested in investing in Filmatic. So why are we postponing our preferential issue? Why not to give them chance for the preferential issue and get the funds?
Umar A K Balwa
Yes, of course. But the market conditions as we are experiencing in the current times are not conducive. So we’ll have to wait it out for the next three or four months.
Unidentified Participant
Sure, sir, sure. Answer. It would be great like if you also consider right issue so that in the individual investor also benefited.
Umar A K Balwa
There are many. There are many instruments which could be considered and designed to attract investment. Right issue is one one way of doing it. Preferential is another way of doing it. And there are many other methods.
Unidentified Participant
Yeah, sure. Thank you, sir.
Umar A K Balwa
You’re welcome.
Operator
Thank you. We have follow up questions from Pavanesh, from Ridya Kas Private limited. Please go ahead, sir.
Pavnish
I just wanted to know like if we want to. If you could give an appointment and if we could meet you or visit the plant, would that be possible?
Umar A K Balwa
We always welcome and encourage people who are interested in Filmatic to come and visit us. And we spare time answering questions and giving a plan to earn. So you’re very welcome.
Pavnish
Thank you, sir. I would be approaching the company for this and looking for a positive response. Thank you.
Umar A K Balwa
Please.
Operator
Thank you. The next question comes from the line of Arnab, an individual investor. Please go ahead.
Unidentified Participant
Hi sir. I hope you’re doing fine and your team as well. I’m audible, right? Sir, you can hear me?
Umar A K Balwa
Yes, yes. Yeah.
Unidentified Participant
I wanted to understand the recurrence that you brought up in the orders. So is it a function of life cycle? Like, are you suggesting that life cycle of the seals you’re manufacturing is a year and that’s the reason consecutive years you will get repeat orders. I also wanted to know if there is any difference. I’m not sure if you have answered this question before. If you have, then you can just ignore them. Because I’ll be listening to the full video later in the day. But today I joined like 20 minutes late. So pardon me if I am.
I wanted to understand, you know, like, is there any difference in the margin profiles for seals? You’re supplying the ones for nuclear plants versus oil and gas. And you know what gives us the edge? Like our machines, did we purchase them from outside? Like, were they important? Yeah, that. Those are the two questions that I had. Thank you.
Umar A K Balwa
So when we compare mechanical fields, say for nuclear or for defense, at. Applications or for a refinery. As we all understand that these are critical applications though the metallurgy would be similar but the application is critical. So in that sense this seals have to be reliable and have to function for a particular operating parameter. So when we talk about mechanical seals per se, generally the life cycle would be between 12 to 18 months depending on the operating parameters. Mechanical seals are highly sensitive, industrial, consumable. So in a period of 12 to 18 months time, a seal gets replaced and a new seal or a repaired seal gets installed.
Unidentified Participant
A prepared seal isn’t as lucrative to us, right? A repair seal will be cheaper, right?
Umar A K Balwa
Yeah. I think probably you missed out. You came 20 minutes late. I will repeat the answer. Repaired Seal is almost 75% of the cost of the new seal. So when we say repair, we replace the parts, the critical parts inside that seal. So the heart of the seal gets replaced with a new new part.
Unidentified Participant
Awesome. Got it. And can you also talk about like the machining our machines are. These are the. Are these India indigenous ones or these are exports from outside.
Umar A K Balwa
Most of the machines are imported from various countries, namely Europe. And I think if I would make a ballpark figure, 80% of machines are all imported over here.
Unidentified Participant
Thanks. That’s all. I thank you sir.
Operator
Thank you. The next question comes from the line of Shantanu, an individual investor. Please go ahead.
Unidentified Participant
Hi sir. Good evening. First of all, congratulations on a good number. So my first question was how, how. How are there things on demand supply?
Umar A K Balwa
Mr. Shantani, we lost a connection. Can you repeat the question please?
Unidentified Participant
Am I audible now?
Umar A K Balwa
Yes, yes, yes.
Unidentified Participant
Yes. So sir, I mean to ask how is this in market globally like on demand supply side. And what are our areas on focus specifically in this market like petroleum, defense or any. Any of like if you can.
Unidentified Participant
Just put some color on.
Umar A K Balwa
Okay. No current market size HVC globally or mechanical fees is $4.25 billion. Our current focus, of course is India, the Middle East.
Unidentified Participant
Okay.
Umar A K Balwa
And Russia. Now we, if we further bifurcate or you know, further make it fine. Our focus is oil and gas, refinery, petrochemical, power plants, nuclear and thermal and defense business which involves Indian Navy and Air Force. That’s our major thrust. And we’re investing a lot of time, money and energy on this business.
Unidentified Participant
Okay, okay, I get it. So in that how good are we compared to the peers? I mean.
Umar A K Balwa
In terms of capabilities.
Unidentified Participant
Yeah. Yes.
Umar A K Balwa
We may not be as big as them, but we are as good as them.
Unidentified Participant
Okay, I get it. And so like our last big order was from Mongolia Refinery. So do we have any similar kind of project in pipeline? Like can we expect some announcement regarding project orders?
Umar A K Balwa
Yes, there are many we are working on mainly in the, you know, CIS region. And the Middle East. And the Middle East.
Unidentified Participant
Okay. And so for the, from the current capacity. So what revenue should we expect? Like what revenue the current capacity can generate and in like space span of like approximate tenure, like two years, three years, anything. Like.
Umar A K Balwa
I can give you consolidated figure for say five years. Our aim is to take the company to at least 275 crores by 2028.
Unidentified Participant
Okay, okay. And so how much of that revenue would be from service or like how. Or let’s not go over five years but when, when we will be starting our revenue, service revenue from 27. So how much can it be from service?
Umar A K Balwa
I would say a ballpark figure of between say 35 to 40% would be the end user business which we may call as ONM or service or whichever name we may like to call it as. So that would be in a range of 35 to 40%. Say after five years at 2:75. If you say conservative, 35%. That would be almost 80, 85 crores.
Unidentified Participant
After five years.
Umar A K Balwa
Yes.
Unidentified Participant
Okay. Okay. And, and, and when we are initially starting from FY27, how much would be that?
Umar A K Balwa
I. I just answered that question, but I’ll still repeat myself.
Unidentified Participant
Yeah.
Umar A K Balwa
We expect a revenue of 15 crores on end user business.
Unidentified Participant
Okay. Okay. Okay, sir. And like, as we have not tied up globally with partners, so. So have we started realizing the service revenue from our partners or like we are yet to receive? Like.
Umar A K Balwa
In Russia, we already have 8 crores of business going on in Abu Dhabi. We just started. So next year should get us a good revenue of at least half a million dollars.
Unidentified Participant
Okay. And so I see our receivables are being stretched from 15 crores to 19 crores. So any specific reasons for them? Like if you can just put some color on that.
Ratan Kandare
Because our sales are increasing, therefore data are increasing.
Unidentified Participant
Sorry, I, I could not.
Ratan Kandare
Our sales are increasing by 19% and therefore the data are increased. And we are regularly receiving the payment from the data. There are no any.
Umar A K Balwa
Bad debt or any kind of a, you know, difficult payment.
Unidentified Participant
Okay. Okay. Okay. Thank you. Thank you. That, that’s all from my side. Thank you very much. Have a good day.
Operator
Thank you. The next question comes from the line of Hardik Gandhi from HPMG Shares and securities Private Limited. Please go ahead.
Hardik Gandhi
Hi sir. So my doubts are solved by the previous person, so I will not ask any question. Thank you so much.
Umar A K Balwa
Thanks.
Ratan Kandare
Thank you.
Operator
Thank you. As there are no further questions, I will now hand the conference over to Mr. Omar Balwa. Please go ahead.
Umar A K Balwa
Thank you so much. Brian and I see more than 65 participants in our earnings call of today. I thank everybody for taking out their valuable time and attending this earnings call and also asking interesting questions. And while answering those questions, it also brings out a lot of confidence in us. We are confident that Sealmatic is on the right path and Sealmatic will have a glorious journey as we move forward. Thus making Sealmatic as one of the leading companies not only in India, but globally as. So thank you all for your attention, and I look forward to seeing you all on the next earnings call. And lastly, I would like to apologize because I got a bad throat, so my voice is a bit hoarse. Thank you very much.
Operator
Thank you. On behalf of Sealmatic India limited that concludes this conference. Thank you for joining us. And you may now disconnect your lines.