Skipper Ltd (India) (NSE: SKIPPER) Q3 2025 Earnings Call dated Feb. 06, 2025
Corporate Participants:
Sharan Bansal — Executive Director
Shiv Shankar Gupta — Chief Financial Officer
Analysts:
Abhijeet Singh — Analyst
Dhvij Patel — Analyst
Manish Ostwal — Analyst
Aditya Welekar — Analyst
Dhiral Shah — Analyst
Unidentified Participant
Gunjan Kabra — Analyst
Dinesh Kulkarni — Analyst
Mahek Talati — Analyst
Darsh Solanki — Analyst
Shridhar Jadhav — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Skipper Limited Q3 FY ’25 Earnings Conference Call hosted by ICICI Securities Limited.
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 a substance 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 Mr Abhijit Singh from ICICI Securities. Thank you, and over to you, sir.
Abhijeet Singh — Analyst
Thank you. Thank you. Good evening, everyone. Today, we welcome the management of Skipper for a discussion of the Q3 FY ’25 performance. Management team is represented by Mr Sharan Bansal, the Director; Mr Shiv Shankar Gupta, the CFO; and Mr Adity Gujari, GM Finance and IR.
So over to you, Mr Sharan, for opening remarks, and then we will open the floor for Q&A.
Sharan Bansal — Executive Director
Thank you, Abhijit. Good afternoon, everyone, and welcome to Kipper Limited’s quarter three FY ’25 earnings conference call. I’d like to extend my gratitude to all our investors, analysts, stakeholders for your continued interest and support.
Before we proceed, I would like to remind you that certain statements made during the call may be forward-looking in nature and should be reviewed in conjunction with the risks and uncertainties associated with our industry and businesses.
I’m pleased to share that our company continues to deliver strong and consistent performance, maintaining its trajectory of order book expansion, revenue growth and profitability improvements over multiple quarters.
Some of the key operational and financial highlights in comparison to previous year quarter were as follows. In-quarter three FY ’25, we achieved our highest-ever 3rd-quarter revenue of INR1,135 crores, reflecting a remarkable 42% year-on-year growth. This sustained growth was primarily led by our engineering business, which continues to benefit from strong demand, our diversified client base and best-in-class manufacturing capabilities.
On the profitability front, our consolidated EBITDA increased by 44% year-on-year to INR110 crores with operating EBITDA margins improving to 9.8% from 9.6% last year. Finance cost as a percentage of sales improved to 4.4% from 4.9%, reflecting better working care capital efficiency and improved working capital management. Consolidated PBT grew by 67% to INR48.4 crores with a PBT margin of 4.3%, while PAT increased by 76% to INR36.1 crores, translating to a PAT margin of 3.2%. For the nine-month period, we recorded our highest-ever revenue performance, reaching INR3,336 crores, a 57% year-on-year growth.
Our export revenues increased by 36% to INR594.6 crores, now contributing 23% of our Engineering segment revenues, highlighting our growing presence in international markets. Meanwhile, our consolidated PAT by 80% to INR101.4 crores with PAT margins improving to 3%.
Moving to our order book and business outlook, we continue to build strong visibility for future revenue growth. In-quarter three, we secured INR1,318 crores of new orders, taking our year-to-date order inflow to INR3,743 crores, a 19% year-on-year increase. Our order book now stands at INR6,354 crores, reflecting a near all-time high backlog and reinforcing our leadership in the domestic power T&D segment with major contract wins from power grids, various boards and private CSOs.
Additionally, as we expand our global footprint, our international order pipeline is poised for acceleration, backed by rising infrastructure investments and increased manufacturing capacity. The Indian transmission and distribution sector remains in a high-growth phase, fueled by the government’s focus on renewable energy integration, great modernization and large-scale electrification initiatives. Our qualification to execute high voltage APC projects at 765 KV and 800 KV gives us a distinct competitive advantage Edge, making us one of the few companies in India of undertaking these technically advanced projects.
According to CEA, the power transmission sector is expected to witness investments of INR9.15 lakh crores by 2032 with interstate transmission line additions projected to grow by 30%. This presents significant long-term opportunities and Skipper is well-positioned to capitalize on these sectoral tailwinds. Furthermore, the global transition towards renewable energy, electrification and carbon neutrality presents a multi-decade growth opportunity. And our strategic investments, strong execution capabilities and deep industry expertise will enable us to play a pivotal role in shaping the future of our infrastructure.
In-line with our growth and diversification strategy, we have embarked on expanding our EPC capabilities beyond transmission lines to include substation EPC, an area that offers significant margin potential and strong demand prospects. We are favorably positioned to secure our first major substation EPC project, marking an important milestone in our intra growth journey. Further, as part of our commitment to operational excellence and digital transformation, we are in advanced stages of implementing F4, a next-generation ERP platform that will drive efficiency, scalability and real-time decision-making across our operations. This strategic move is aimed at enhancing productivity, optimizing resource utilization and strengthening our competitive edge in a rapidly evolving business environment.
On the financial front, we have further strengthened our liquidity position, having received INR148 crores from the pending call money proceeds of our rights issues. This will allow us to reinforce our working capital base, optimize finance costs and ensure greater financial flexibility to fund our future growth initiatives. With strong financial performance, a robust order pipeline and strategic expansion into new growth areas, we are well-positioned for sustained long-term value-creation.
Thank you for your continued trust and support as we lead the way in advancing power infrastructure and meeting global energy demands.
Thank you, and I’m happy to take your questions now.
Questions and Answers:
Operator
Thank you. Ladies and gentlemen, we will now begin with the question-and-answer session. Anyone wishing to ask a question may please press star and one on your touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Hello. The first question is from the line of Vij Patel from FinTrush Capital. Please go-ahead.
Dhvij Patel
Hello. Hello. Am I audible?
Sharan Bansal
Yes, are you audible.
Dhvij Patel
Hi, sir. So congratulations on a good set of numbers. I just had a couple of questions. So sir, for the 75,000 tonne expansion that we had guided for Q1 of FY ’26, I just wanted to know what is the update on that and has the facility started?
Sharan Bansal
No part. We are looking to commission part of the facility within quarter-four and some amount of the commissioning will spill-over to quarter one next year. So — but we are expecting to commission a major part in-quarter four itself.
Dhvij Patel
Okay. And what revenue are we expecting from that in Q4 itself?
Sharan Bansal
No, within Q4, we are not expecting any additional revenue from the new capacity expansion. It will start coming from quarter one.
Dhvij Patel
And okay, so what about the next fiscal year, the entire expansion?
Sharan Bansal
For the entire year, we will have to see how soon we can get to full capacity utilization for this new expansion. But looking at the order book position and strong demand from all our existing contracts, we feel that we should be able to achieve full utilization soon in this capacity. But I don’t have any firm — the overall revenue potential of this capacity expansion is about INR700 crores.
Dhvij Patel
Okay. And sir, though, are we planning for the INR200 crores of capex for the next fiscal year since we were targeting INR800 crores over four years? And also which segment would it primarily focus on?
Sharan Bansal
Yes, I think as we have guided earlier that most of our capex will be happening in the engineering segment only. And yes, we are in-line with further capex next year as well.
Dhvij Patel
Okay. And sir, engineering Products have seen a slight drop-in the margins. So I just wanted to know what has led to that.
Sharan Bansal
No, I think see, quarter-on-quarter is difficult to predict a margin movement because margins are a function of the various contracts being executed. But overall in the year, we will be in-line with our margin expectations. And of course, we are looking at margin improvement going-forward as the non-P&D portion of our revenue as because next year we are not expect — we are expecting very minimal execution in the non-T&D side. Bulk of the execution will happen on T&D only. So we are expecting margin improvements in the coming year.
Dhvij Patel
Okay, sir. Thank you. I’ll get back-in the queue.
Sharan Bansal
Thank you.
Operator
Thank you. The next question is from the line of Manish Ostwal from Nirmal Bang Securities Private Limited. Please go-ahead.
Manish Ostwal
Yes, sir. Thank you for the opportunity. Am I audible?
Sharan Bansal
Yes, you’re audible.
Operator
Yes.
Manish Ostwal
Yeah. Thank you. So, sir, question on the interest expense as a percentage of revenue, it has declined from a nine-month perspective of 5.1% to 4.7%.
Operator
So sorry to interrupt Mr Manish, sir, can you speak clearly? Your is breaking up.
Manish Ostwal
Yeah. Yeah. So my question on the interest expense in the P&L. So it has declined as a percentage of revenue from 5.1% to 4.7%. So first, can you update us in terms of net working capital scenario in the business? How many days we have — it has improved? And what is our guidance for the next year-on this line-item?
Sharan Bansal
So for the three months, the quarter — quarter three, the our finance cost this year is about 4.4% compared to 4.9% in the previous financial year quarter three.
Manish Ostwal
Right. I’m comparing nine months, sir.
Sharan Bansal
I think you’re comparing nine months. So yeah, so from 4.8 we’ve come to 4.7 effectively. Yeah. So I think you know, with better-quality contracts and better operational efficiency, we are looking to certainly bring this number down, but we don’t have a guidance to give you right now. But yes, you should see significant improvement in this head as well going-forward.
Manish Ostwal
And what is the net working capital and days for — as on 31st December in our business.
Sharan Bansal
Currently, it’s 88 days as of December.
Manish Ostwal
Okay. And second, sir, if I look at our order book position, so in March 2024, we have INR6,200 crores of order book now it is INR6,300 crores. So from a YTD basis, we — definitely we got INR3,700 odd crores orders, but order book growth was very muted. So how should see — and what is the timeframe of execution of this order book for the next year? Out of, how much will be executed in next 12 months basically?
Sharan Bansal
Yeah, actually, so as we have maintained in the past, there is no problem of orders. The bid pipeline is extremely strong and there are enough orders available. It’s just that because we have capacity constraints also, so we have not gone out and aggressively taking in a lot of orders and rather maybe it is difficult to get orders also beyond the execution time of two years. So I would say that once the capacity — we are able to have more capacity starting in the next financial year, then we will probably be able to target higher order growth as well. But as of now, our order intake is in-line with our expectations given in the beginning part of the year.
Manish Ostwal
Okay, sir. Thank you very much. Thank you.
Operator
Thank you. The next question is from the line of Abhijit Singh from ICICI Securities. Please go-ahead.
Abhijeet Singh
Thank you for the opportunity. So sir, you mentioned that we are entering into the substation space going-forward from here. So what would be the scope here? Are we looking at only EPC or also we are looking at supplies as well?
Sharan Bansal
We will be doing supplies of the — all the tower structures that go into substations. Of course, that is a smaller component of the overall substation. In substation, we’ll be looking at the EPC and a lot of our current projects also are having a substation scope, which the owner is either giving it to another substation EPC player or sometimes we are outsourcing it fully to a substation EPC ourselves. So I think having execution skills in that space will allow us to keep those margins with us as well.
Abhijeet Singh
Yeah, right. So sir, this revenue for the EPC for substation will be booked in the infra segment, right, mostly because supply percentage is — I mean the portion of supplies in substation is smaller compared to a line project. So majority of the revenue is going to get booked in the infra segment?
Sharan Bansal
Right.
Abhijeet Singh
So, sir, how do we look at the scale-up of this segment because this could open practically a huge addressable market for us. Almost half of the entire market is in substation and the other half would be in the line. So how do you look at the scale-up for our business? So how aggressive are we going to go in this business in the next two, three years.
Sharan Bansal
Yes, you’re right that also the total INR9 lakh crores market opportunity, roughly about half is in the field. And because it is directly aligned with our overall operation, which is why we have decided to venture into this area as well. It is difficult for me to put any numbers on this because as of now, we have not started winning major projects. We have just — as I was mentioning in my con-call minute in opening remarks that we have — we are favorably placed to secure our first project. And I think our first major project, we have done some small projects in the past. So I think this is something where probably as the quarters pass, we will be able to guide better as to what our revenue and margins from this business can be. But of course, the opportunity is very, very large. It is almost the same size as the overall transmission line opportunity.
Abhijeet Singh
Right. And sir, like last one to two years, we have built substantial capability in terms of the EPC for the line business. So here, what are the kind of capabilities that we are building right now. I mean in terms of capacities, okay, fine. I mean the supply component is anyway is not much. But otherwise, what are the capabilities that we are building right now and what is required to be able to scale-up to higher levels? So if you can throw some light on that.
Sharan Bansal
No, so in fact, a lot of engineering strength is something that we are building up because this is a heavily engineered infra business. So yes, I think engineering strength is what we have really focused and are building up. Execution, execution strength in terms of manpower equipment, I think those are the ones that we have also built-up. So I think we are well-placed to take some good projects in this area in the future.
Abhijeet Singh
Right. Right, sir. I’ll come back-in queue. Thank you.
Operator
Thank you. The next question is from the line of Aditya from Axis Securities. Please go-ahead.
Aditya Welekar
Yeah, sir. Thanks for the opportunity and congrats for the good set of numbers. My question is on-demand outlook. So just want to understand the current demand scenario on-the-ground in the context of some weakness in the 3rd-quarter with some slowdown in the government capex. So what is our current bid pipeline looking like? And if you can quantify it?
Sharan Bansal
So it is — the bid pipeline continues to be in the range of INR18,000 to INR20,000 crores. And like I mentioned to the earlier caller that there are plenty of opportunities available, but as of now, we are having to be selective in choosing where to build because again we are pressed for capacity. We are fully booked for the next year and a half and more or less booked for the next two years. So as we will add capacity, we will be looking to increase the building pipeline and of course, the order backlog as well.
Aditya Welekar
Okay, sir. And so in that context means from nine months or from FY ’25 onwards, are we still guiding that our revenue will grow for 25% CAGR from FY ’25 and for the coming two to three years and 10% to 11% EBITDA margin?
Sharan Bansal
We are certainly looking at robust revenue growth even on this elevated base, I would refrain from putting any specific guidance numbers on the growth. However, market is very, very buoyant. And to answer your earlier question, the best part about our sector is that it is not even dependent on government spending because if you see the budget allocation, transmission sector doesn’t really have any allocation from the budget to government budget allocation also towards power transmission. So all of it is bidded in the PPP mode and whether even if is winning project, they are bidding on the basics of their strength of their own balance sheet and so are the private developers that there is a lot of interest from the private developers. So I would say that business is very robust, INR9 lakh crores has to be spent in India over the eight, nine years. We company apart from domestic has a growing export presence also. So I would say that our constraint would only be our capacity increase and our execution. It will not be the market.
Aditya Welekar
Yeah. So in that context of capacity constraintments, what will be our top-line growth driver in that case? Because I guess we might be — we already might be operating at a full utilization level. So means that capacity, will it not constrain our revenue CAGR for coming two, three years until the new capacity kicks-in?
Sharan Bansal
But we are adding capacity this year also. So that will also add our capacity by about 25%. Like this year, we are expanding capacity by 75,000 tonnes overall our capacity base of 300,000 tonnes.
Aditya Welekar
Okay, understood. And lastly if I can, the export contribution in the order book has now come down to 11% from 15% in the previous quarter so is there any impact of — in the North American orders because of this new administration there? Any risk from there or you see the traction in the North American market?
Sharan Bansal
No, in fact, I would say quite the opposite, the new tariffs, if you have noted that India has been left out-of-the tariffs as of now and the tariffs have been specifically put on Canada, Mexico and China. So in fact, these are the countries which mostly have been — our competitors have mostly been based in these countries supplying into USA. So I would say that opportunity for Indian manufacturers and exporters will be very robust in the USA market in the long-run because of the hawkish stand chance being taken by the US government toward these places. So on the export side, it is just a matter of — in terms of absolute numbers, it continues to grow even on this quarter, we have grown, you know our exports have grown compared to previous year quarter. So I would say that again once we have more capacity, then we will be able to target larger export orders as well.
Aditya Welekar
Understood, sir. Thanks a lot. I’ll get back-in the queue.
Operator
Thank you. The next question is from the line of Dira from PhillipCapital — PhillipCapital PCG. Please go-ahead.
Dhiral Shah
Good evening, sir. Thanks for the opportunity. So sir, what will be our growth guidance in the polymer segment, particularly?
Sharan Bansal
The polymer segment, right now we are — we have a lot of headroom to grow. We are currently at a low capacity utilization in this business. So I would say that, yes, we definitely — and in the last — in this sector has been facing some headwinds in the last one or two years due to volatile commodity prices and due to lower allocation by the government in the Jal Jeevan scheme. However, in the current latest budget, the government has restarted the Jal scheme and made some significant allocations to that. So I would say that we will now with the commodity prices stabilizing and our volumes increasing and the mission project back on-track, we certainly can expect better growth numbers in this business.
Dhiral Shah
So what is the Nine-Month volume on the polymer side?
Sharan Bansal
Month polymer volume was 22,300 tons.
Dhiral Shah
And sir last year same time nine months
Sharan Bansal
It was 24,600 crores.
Dhiral Shah
Okay. And sir, when we are entering into substration EPC side, so generally substation EPC guys are having higher margins of almost maybe 13% to 15% or even higher. So are we also looking same kind of a margins on the substation EPC one?
Sharan Bansal
Yes, absolutely. Already, even if you look at the transmission line business, we have done better than industry margins. And certainly in the substation business, even though we are a new player, we will expect to do at least the industry average margins.
Dhiral Shah
Okay. So over next two years, as you are talking about even in your opening commentary, maybe infra revenue would come down. But overall for next two years now with the substation, what kind of infra revenue growth you are expecting, sir, over next two years?
Sharan Bansal
So even on the existing business, even on the line side, our infra revenue will continue to grow. Our substation is a new entry for us. So I don’t expect major revenue to come in the first year. But I would say that maybe from FY ’27 onwards, we can see significant revenues in this business. But in the first year, FY ’26 will be probably the first main year of — for us for getting projects. So I don’t expect much revenues in FY ’26, but FY ’27 onwards, we can expect significant revenues.
Dhiral Shah
Okay. And sir, sir, last one question on the order inflow side. Since now we have also expanded our capacity maybe from next year onward. So what kind of order inflow guidance we are looking for FY ’26?
Sharan Bansal
Again, like I mentioned earlier that there is no — there is no shortage of orders and the demand is very, very robust. So as the new capacity has a revenue potential of INR700 crores, so I think at least along with the services revenue that come with it. So I think we can target at least the order book also to expand by minimum that much base on the new capacity.
Dhiral Shah
Okay. Okay. Thank you so much, sir.
Operator
Thank you. The next question is from the line of Pratik Lambe, an Individual Investor. Please go-ahead.
Unidentified Participant
Yeah, hi. Am I audible?
Sharan Bansal
Yes, please.
Unidentified Participant
Yes. Thank you, sir, for the opportunity. Mike, I have three questions. One on the capacity. Secondly on exports and lastly on the infra order book or basically the non-T&D portion. Now continuing with one of the participants’ questions on the capacity utilization, I just wanted to understand how do you see the margins being impacted while you ramp-up the capacity of 75,000 tons, which was slated to be completed in this financial year? And also some color on the capacity that currently is being added, whether it’s aligned in the same-facility or a new facility is being put up also have you — have you hired a new team separate team management team for it? So how should we think about margins from — while we ramp-up this capacity? That would be one question on the capacity front, sir.
Sharan Bansal
So on the capacity front, we have taken on expansion of 75,000 tons this year and it’s a brownfield expansion capacity that we are doing. We have already got the team in-place, majority of the team in-place with some few members left to join. And I’d say that this is — this is being done now most of our capacity expansion is being done with the view of catering to more-and-more developed market business. So certainly, we are going for the best-in-class technology and plants from around the world, which can really attract buyers from developed countries. So I’d say that is what we are looking-forward to in this new capacity expansion.
Unidentified Participant
Okay. So do you mean like it will be more of an automated facility with not much of labor involved, so that the element of margin…
Sharan Bansal
The nature of our business is labor-intensive. So there will be labor involvement. But yes, of course, compared to our existing facilities, certainly for the per tonne of output, lesser number of labors will be required.
Unidentified Participant
Okay. Got it, sir. Thank you. I don’t seen line. Correct me if I’m wrong, apart from — yeah, may I —
Sharan Bansal
Yeah, please go-ahead, sorry. We had two questions. I had actually interrupted him. Please go-ahead.
Unidentified Participant
Yeah. Sticking to the same line, if correct me if I’m wrong, apart from the 75,000, which was planned in FY ’25, you also alluded to another 75,000 ton capacity for FY ’26. Is that right?
Sharan Bansal
We will be looking to definitely keep expanding capacity as because the market is robust, both on the domestic side and on the export side. We have significant cost advantages compared to all our peers globally. So I’d say that, yes, we will be looking to add capacity consistently.
Unidentified Participant
And you do not see any demand challenges in putting up another 75,000 as well?
Sharan Bansal
No, not at all. We don’t see any demand challenge. There’s plenty of opportunities everywhere in the world right now.
Unidentified Participant
Okay. And sir, just one point on the capex, how much would be the capex amount for the current INR75,000 that we are putting up?
Sharan Bansal
We’re investing approximately INR200 crores.
Unidentified Participant
Okay. Okay. Thank you. Sir, the next question is on exports. Of course, we understand that the exports are currently down because of the capacity constraint or also there is some optical illusion because the domestic market is so robust. That’s why the percentage terms in terms of contribution of the exports to the total revenue is a little lower as compared to last year. But when the new capacity comes in, can you share some targets with respect to exports, which will also help us our margins reaching at a higher-level. And also if there is any challenges that the management sees with respect to this exports.
Sharan Bansal
So in terms of absolute numbers, see, exports are, you know, quite consistent just one minute…
Unidentified Participant
Yeah, because I see…
Sharan Bansal
Last year, the total execution of exports was about INR640 crores. And this year 59 this year of INR595 in nine months. So already we are close to INR600 crores. So I think in terms of absolute number, number exports is growing only. But yes, in terms of percentage, definitely because domestic market has been growing so fast, which is why as a percentage it is down.
Unidentified Participant
Okay. So even it will remain at the same percentage going ahead or will it grow a little at a higher-rate.
Sharan Bansal
So long-run, long-run, we definitely do expect that as we see more business, right now, we don’t have much business coming from the developed geographies, but we are anticipating large amount of business coming in from developed countries in the future. So I would say — and even from the developing countries, once we have more capacity to allocate, then we will be able to get more business from there. So I’d say that, yes, as a percentage basis, we certainly do expect exports to bounce-back.
Unidentified Participant
All right. All right, sir. Thank you. And this last question on the non-T&D portion, because of, I think the slowdown in the non-T&D, whether it’s telecom or water or even railways, our order book-to-bill is actually down from, let’s say, in FY ’23, it was 3.4 times of revenue, then in FY ’24, it was 3.7 and now it is to 2.25 because of the slowdown in the order intake of the non-T&T side. So how do you see this apart from the substation other segments picking-up, sir?
Sharan Bansal
See on the non-DND, again, anyway the non-D&D business company was focusing on a lot more when our T&D opportunities were lesser because non-P&D business always came with a lower-margin also 1% to 2% lower-margin than T&D. Now that the T&D opportunities are so robust, we don’t see much value in focusing on non-TMD business. Of course, it will continue to be there in the order book as some percentage. We will not want to exit that market completely. But I would say that as a percentage basis, you can expect that it will play a lesser and lesser role in our overall order book and execution.
Unidentified Participant
Got it, sir. Thanks a lot for your sponsor. Thank you so much.
Operator
Thank you. The next question is from the line of Gunjan Kabra from Niveshai. Please go-ahead.
Gunjan Kabra
Thank you so much for the opportunity. So just wanted to understand on the substation EPP because we are just starting out. So will we be bidding on our own or will we be doing subcontracting for someone in the beginning and then build the orders on our own? And also you mentioned in the previous calls that we don’t actually manufacture towers for substations because of the size and any other reason. But what will be — what are the supplies that we actually do to substations currently and we think the margins will also expand because of that.
Sharan Bansal
Yeah. So in terms of the execution, we will be doing it on our own and also we will be partnering with other companies for substation opportunities as a JV. In terms of supplies, we definitely do supply substation structures. It’s just that, okay, maybe it’s a very small portion because substation structures, anyway, the quantum is not large on a per substation basis. And so that’s why you obviously it forms a much smaller part of our order book and execution. But yes, we definitely do have the full capability of supplying the substation structure. When we will be doing the substation and execution, then there will be other supplies like transformers, GIS substations. I think those will also be involved with which we will be the partnering with you know experienced players, experienced manufacturers in the business.
Gunjan Kabra
Okay, and what’s the generally the timeline of execution of such projects?
Sharan Bansal
In substations, it could be anywhere between, of course, if it’s a high voltage one, right now availability of transformers is a problem. So that would depend on the transformer availability. But I’d say that it would be similar to transition line, which is approximately two years.
Gunjan Kabra
Two years. Okay. And what’s the kind of demand and supply scenarios in towers on the high KV side right now? Is it like according to the demand, is the current capacity in the country fairly balanced or how is it as we are having capacity constraints, so in front of demand, how is the supply right now?
Sharan Bansal
In terms of overall demand, the capacity of Indian market is balanced. There is going-forward with the expected growth in-demand, capacity will have to increase. But also you have to keep in mind that almost, you know the — there’s a lot of capacity that Indian players are also using to cater to their own EPC projects outside of India. For example, our peers are also exporting towers to their own EPCs outside India. We are export — doing a lot of exports, although we don’t do EPC outside of India, but we are exporting our towers. So Indian capacity is also being used to cater to demand outside of India. So I’d say that, yes, looking at the overall transmission business sector, there is opportunity for capacity increase.
Gunjan Kabra
Got it. And in the infrastructure segment, so B2 EPC on that side, so margins are low unlike other EPC segments that normally the competitors do. So though it’s right now, it’s not a major part initially, but it’s inching up in terms of total revenue. So how do we think this segment can increase overall and the margins can up in this segment because it’s right now I think 5%, 6% EBITDA margin.
Sharan Bansal
You’re asking about the infra segment?
Gunjan Kabra
Yeah.
Sharan Bansal
Okay. No. So the infra segment, see, it’s a — again, it’s growing for us. And in the infra segment, essentially, we are recording the services portion of our EPC projects. But because the supply portion revenue gets recorded in the engineering products, which is why there is front — some amount of front roading of margins also. And I would say that if you look at a consolidated basis, then the margins are in-line with our expectation of 10%. But yes, I think even in this sector — even in this segment, we can expect better margins in the future also.
Gunjan Kabra
Got it. Okay. Thank you so much. Good luck.
Operator
Thank you. The next question is from the line of Dinesh from Research. Please go-ahead.
Dinesh Kulkarni
Hello, sir, can you hear me?
Sharan Bansal
Yes, we can hear you.
Dinesh Kulkarni
Okay, sir. Thank you for giving me this opportunity and really great set of numbers. Sir, my questions most of been answered. But see, we have seen a very robust growth in this financial year, almost close to 40% or so. Can we expect similar growth to continue for the foreseeable future, given the — maybe the budget constraints and the capex constraints which we have seen in this budget or something on those lines?
Sharan Bansal
See, our — as I mentioned earlier, our segment — our sector is not dependent on government budget and government spending because there is a — there is a strong amount of private capital interest. So in all transmission line project there is significant amount of bidding activity happening from the private sector. And even power, which is a government company, they are able to win projects on the strength of their own balance sheet and not because of government budget allocation. So that is even whether government allocates more to the capex or less, it doesn’t matter to the power transmission sector because power transmission has a clear runway ahead with the INR9 lakh crores of investment needed to connect 500 gigawatts of renewable power.
In terms of our growth, see, our growth will depend on our capacity expansion and our execution on the infra EPC side, whether it is lines or substation. So that is what will determine our growth. Certainly, we have done very well last year and this year. Now on this elevated base also, we expect to continue to do well. But in terms of how much percentage growth, of course, look, maybe probably the performance of the performance of last year and this year will be difficult to do on an elevated base. But yes, we do expect robust growth in the coming years also.
Dinesh Kulkarni
Okay, sir. That’s really great to hear. Sir, something like say you mentioned we are having something like INR200 crores of capex maybe for next year, right? So how about we should look at the CapEx in FY ’27, ’28, like will it be at such elevated levels or we expect it to come down?
Sharan Bansal
No, I think the capex will be consistent. As of now, we are expecting another INR200 crores to INR250 crores of capex in the coming financial year FY ’26 as well. And then we will make a plan for further years as we go along.
Dinesh Kulkarni
Okay, sir. And are we expecting margin boost because of this capex or current levels of around.
Sharan Bansal
We are expecting margins to improve for two, three reasons. One is that of course, now non-T&D will have a lower share in the overall revenue mix. And on the P&D side also, because of the better-quality contracts coming, expect that margins will expand because of that. So I would say that because of these two factors, we should see — and of course, some part of margin expansion will also happen because of better working capital management at our end. So I’d say all these three factors will improve our margins in the coming years.
Dinesh Kulkarni
Oh, that’s great. And maybe last point from my end. You mentioned quite a few times that we are capacity-constrained and that’s why we are doing this capex, but that’s a fair point there. But my point is — question is like, is it not possible to get more orders and then get it executed from outsource it to other players so that we maintain a higher market-share?
Sharan Bansal
See, that is something which can be done for very small quantities or very — it is not a — it cannot be a — on the basis of which we cannot take large orders. We can do it from time-to-time, but that can be for small quantity.
Dinesh Kulkarni
Okay. So — but can we expect any percentage you know, like what kind of a projects we look at in terms of smaller quantity you mentioned, right?
Sharan Bansal
So that is something which we do even today also. Even today from time-to-time, we do use our outsourcing partners where needed, but then those — that quantity is not large.
Dinesh Kulkarni
Okay. Okay. That’s really fair. Thank you very much.
Sharan Bansal
It is difficult to really plan when we take on projects, then we have to have very-high level of certainty that the — about the execution and the quality, both of which is difficult to manage with outsourcing capacity.
Dinesh Kulkarni
Got it, sir. That’s really great. Thank you very much and all the best.
Operator
Thank you. The next question is from the line of Mihek from Agility Advisors. Please go-ahead.
Mahek Talati
Hello. Thank you for the opportunity.
Operator
I’m sorry to interrupt. Can you speak a bit louder? We’re not able to hear you.
Mahek Talati
Hello. Am I audible now?
Sharan Bansal
Yes.
Mahek Talati
Yeah. Yeah. So thank you very much for the opportunity. So two basic questions. One was given that the government is focusing more on the coverage side and it requires telephone towers. So are we sensing any opportunity on that front? And are we planning any capex there?
Sharan Bansal
The government — you’re saying the government is focusing more on
Mahek Talati
Covers, covers, train anti-volution system.
Sharan Bansal
Railway coverage. Yeah, yeah, railway coverage is an interesting opportunity and we have already won one project in that — in that coverage. And yes, in the future also we are anticipating to win more projects in that space.
Mahek Talati
Okay. And anything in terms of numbers, what is the opportunity size and what is the order when
Sharan Bansal
I’m not certain but I believe that the railway coverage opportunity is INR1 lakh crores. Now I would imagine our addressable market in that to be at least INR50,000 crores. So that would be over the next two to three years.
Mahek Talati
INR50,000 crores, how much are we expecting from that out of that INR50,000 crores?
Sharan Bansal
It’s difficult to say, it’s difficult to say because as of now, we won only one project. And again, like I said, we are — we are fully booked on both our engineering and infra side. So we are also adopting a cautious selective approach in taking new projects.
Mahek Talati
Okay. And so again, so when we are similar lines, so we are planning a capex of INR800 crores. So that will be in the engineering segment. So are we planning to add 75,000 tonnes of towers every year or what are we planning in this — for the capex?
Sharan Bansal
Yes, we will definitely be planning minimum 75,000, maybe higher in the years to come.
Mahek Talati
Understood. And sir, last is a bookkeeping question. So we have a — we had a taxation of close to 37%, effective tax-rate of 39% in last two to three years, but now it has decreased to around 26%. So any specific reason and will this be normalized going-forward?
Shiv Shankar Gupta
So we have moved into new tax resign and currently we are taxed at 25.17% including surcharge.
Sharan Bansal
So till last year, we were in the old tax regime because the company had certain R&D tax benefits or which got exhausted last year. So from this year, we have moved to the new tax regime.
Mahek Talati
Understood, understood. Okay, okay. Thank you.
Operator
Thank you. The next question is from the line of Vimok Shah from Fintech Private Limited. Please go-ahead.
Unidentified Participant
Yeah. Thank you for the opportunity, sir. I was just two questions like — so can you say that what is the current component of the order book, particularly a split between domestic and the export orders?
Sharan Bansal
Current order book position is 89% on the domestic and 11% exports.
Unidentified Participant
Okay. Okay. And what is the long-term vision for the mix between the product sales and the EPC project?
Sharan Bansal
Once again, please.
Unidentified Participant
So yeah, what is the — your long-term vision for the mix between like product sales and the EPC project, particularly in the domestic market? I think we are more focused on the EPC side right now, right?
Sharan Bansal
No, because there are a lot of opportunities, there are opportunities both on the domestic side. Definitely bulk of our business is coming on the EPC side. On the export side, we are only taking product orders. We expect both to grow. So it is difficult to say where what the percentage mix will, how it will move. But whenever we get better margins, we will move the mix to learn that percentage. But the opportunities are there in plenty in both the directors.
Unidentified Participant
Okay. Okay. And in the substation EPC, have we received any major contract yet or we are just looking for the opportunity?
Sharan Bansal
We are favorably placed for an order that can amounts to something around INR60 crore INR70 odd crores.
Unidentified Participant
Okay. Yeah. Thank you. All the best.
Operator
Thank you. The next question is from the line of Samarth, an Individual investor. Please go-ahead.
Unidentified Participant
Hi, congratulations, sir, on a great set of numbers. Most of my questions have been answered. Sir, just wanted to know a couple of things. The polymer business has been some — has been seeing some weakness. I mean we have been seeing some weakness for the past few quarters. So how do you see the business for the next financial year? I mean, we have been making investments also. So that was my first question. Whether the business will grow at a similar rate as to what the company is growing or we can see an accelerated growth also because we have de-grown this year.
Sharan Bansal
So in terms of polymer business, see, we — the sector has faced headwinds on two counts. One is the volatile commodity prices, which basically have led to a lot of uncertainty in the trade network. And a lot of destocking has happened in the trade also. And the second has been the project for which there has hardly been any budget allocation this year-by the government. So I think these two reasons are what has, you know, hampered the growth of Polymer, although our volumes on the retail side have been growing quite well and even this year, our volumes on the retail side are growing. So we are positive about that. Our brand obviously enjoys a strong reputation in most of our markets, particularly East and Northeast markets. I would say that now with the commodity prices stable and with the fresh allocation of government into the project, we will see much healthier numbers in this division in the year — next year.
Unidentified Participant
Sure, sir. And sir, another question that the capex we are doing of. I mean, I mean by when can we assume that we’ll be reaching 80% to 90% of the utilization, I mean for the next year. I mean in how many quarters can we assume that?
Sharan Bansal
I think we should be able to achieve it by the end-of-quarter two, we should be able to achieve 80%, 85% utilization.
Unidentified Participant
Sure, sir. And the next round of capex, as you told that if we plan for the next year, I mean, another INR200 crores of capex. I mean, any thoughts on that, whether we would be doing through debt or equity financing or I mean, it’s too early to call that.
Sharan Bansal
It is early, however, the company has strong internal cash flows. This year also out of our capex of roughly about INR200, crore INR210 odd. So-far, we have only raised debt of about INR75 crores. So I think we are able to meet our capex requirement quite well with the internal cash flows.
Unidentified Participant
Sure, sir. That’s good to know. Thank you, sir. I mean, these are the questions and all the best.
Sharan Bansal
Thank you.
Operator
Thank you. The next question is from the line of Daris Solanki from Axis Securities. Please go-ahead.
Darsh Solanki
Yes, thank you. Thank you, sir for this opportunity. So I’ll just ask on the 75,000 tonnes CapEx that we are planning for FY ’26. So just wanted to know, is this something that has been approved or something that we would consider as we go into the next year? And if it is approved, so would it be a brownfield expansion or the greenfield one?
Sharan Bansal
No, for the next year capex, we will be takingboard approval, but this is what our expectation is.
Darsh Solanki
Okay, understood. And sir, what has been our capacity utilization this — till this quarter this year?
Sharan Bansal
By quarter-four, we are well on way to achieve 85% utilization for our existing capacity.
Darsh Solanki
Understood. And sir, I think my last question is that in terms of the market-share, like what is the market-share that we have in the high-voltage segment as of December?
Sharan Bansal
About 12% to 13% on the transmission line side.
Darsh Solanki
Understood. Okay. Thank you. That’s it from my side.
Operator
Thank you. The next question is from the line of from JM Financial. Please go-ahead.
Shridhar Jadhav
Hi, sir, am I audible?
Sharan Bansal
Yes.
Shridhar Jadhav
So sir, just most of my questions have been answered, just a couple of quick questions. Sir, now this year we saw almost
Operator
Sorry to interrup Mr, can you speak a bit louder
Shridhar Jadhav
So sir, most of my questions are answered. Just had a couple of few quick questions. Sir, we are already reaching utilization levels of 85% in Q4 and new capex of INR200 crores, what I understand will be live by quarter two of FY ’26. So how do we — how do we plan to continue the growth momentum.
Sharan Bansal
I’m not very clear on your question.
Shridhar Jadhav
What I’m hinting is, so do we still maintain the guidance or similar growth guidance in coming two to 3/4 till our capex is on an elevated basis of let’s say, March ’24?
Sharan Bansal
We don’t — we have not given any guidance yet for the next year. But we do expect the growth — robust growth to continue.
Shridhar Jadhav
Okay. And my second — my next question was on margin improvement. So sir, now with expected polymer segment and infra segment and EPC substation. So on a blended basis, do we expect our margins to shrink because of other low-margin segments or so what would be our overall guidance for next 12 months on the margin front, blended?
Sharan Bansal
No, we definitely expect to improve margins from currently, we are at just about under 10%. We certainly target to improve this margin incrementally in the coming quarters.
Shridhar Jadhav
That’s all from my side.
Operator
Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to the management for the closing comments.
Sharan Bansal
Thank you. We remain optimistic about the future and are confident in our ability to create long-term value for our stakeholders. We appreciate your continued support and look-forward to interact with you again in the next quarter. Thank you.
Operator
Thank you, members of the management team. Ladies and gentlemen, on behalf of ICICI Securities, that concludes this conference call. We thank you for joining us and you may now disconnect your lines. Thank you.