Syrma SGS Technology Limited (NSE: SYRMA) Q3 2025 Earnings Call dated Jan. 29, 2025
Corporate Participants:
Nikhil Gupta — Headof Investor Relations, Corporate Development & Initiatives
Jasbir Singh Gujral — Managing Director
Bijay Kumar Agrawal — Chief Financial Officer
Satendra Singh — Chief Executive Officer
Analysts:
Aniruddha Joshi — Analyst
Dhananjai Bagrodia — Analyst
Rahul Gajare — Analyst
Indrajit Agarwal — Analyst
Sonali Salgaonkar — Analyst
Deepak Krishnan — Analyst
Bharat Shah — Analyst
Keyur Pandya — Analyst
Bhoomika Nair — Analyst
Aditya Bhartia — Analyst
Sumant Kumar — Analyst
Praveen Sahay — Analyst
Dhaval Shah — Analyst
Vipraw Srivastava — Analyst
Garvit Goyal — Analyst
Presentation:
Operator
Please wait while you are joined to the conference. The conference is now being recorded ladies and gentlemen, good morning, and welcome to the Sirma SGS Q3 FY ’25 Earnings Conference Call hosted by ICICI Securities. As a reminder, all participant lines will remain 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 the operator by pressing star then zero on your touchstone telephone. Please note that this conference is being recorded. I now hand the conference over to Mr Anirud Joshi from ICICI Securities. Please go-ahead.
Aniruddha Joshi — Analyst
Yeah. Thanks, Ryan. On behalf of ICICI Securities, we welcome you all to Q3 FY ’25 results conference call of HGS Technology. We have with us today senior management. And now I hand over the call to Mr Nikhil Gupta, Head of Investor Relations, to introduce the management and take the call forward. Thanks, and over to you, Nikhil.
Nikhil Gupta — Headof Investor Relations, Corporate Development & Initiatives
Thank you. Thank you, Nirok. Hi, a very good morning to all. Welcome to Q3 and nine months fiscal Year 2025 earnings call. We have with us today Mr Jaysh Gujaral, Managing Director; Mr Jaish Doshi, Director; Mr Satila Singh, Chief Executive Officer; and Mr Vijay Agarwal, Chief Financial Officer of SGS to discuss the performance of the company during the 3rd-quarter and nine months 2025, followed by a detailed question-and-answer session. Kindly note, during this call, certain statements that will be made are forward-looking, which involve certain risks, uncertainties, assumptions and other factors that can cause results to differ materially from those in such forward-looking statements. All forward-looking statements made herein are based on the information presently available to the management and the company does not undertake to update any forward-looking statements that may be made during this call. In this regard, please do review the disclaimer statement in the earnings release and all the factors that can cause other trends. With this, I will now hand over the call to Mr Jayb Gujaral, Managing Director, Jay. Thank you. Over to you.
Jasbir Singh Gujral — Managing Director
All right. Good morning. A warm welcome to everyone to the Q3 FY ’24-’25 earnings call of Silma SGS Technology Limited. The quarter gone by has been a satisfying quarter and the nine months have also been satisfying, which is reflected in the performance of the company. Revenues for the quarter were at about INR892 crores, which represented a 24% year-on-year growth and for nine months, they were at INR2,900 crores, a growth of about 40%. What is more satisfying apart from the revenue growth is that the steps taken by the management to bring back the margin profile of the company has started yielding results. For the nine months FY ’25 over EBITDA, operating EBITDA margin stands at 7.2% against our guidance of 7% given at the start of the year. For the quarter notably, this stands at 9.1%. So this gives us the confidence that 7% achievement would be possible and if any movement, it will be only north of 7% in the coming quarters. PBT also has shown a healthy growth of 37% for nine months and 144% for three months. Exports stand at about 20%. Exports have had a subdued sort of muted scenario because our geographies which we are servicing are essentially America and Europe. And in Europe, it’s primarily Germany. And Germany is today the sick baby of EU. It has the highest delinquencies per month. So we have had a muted growth, but the turnaround is visible from the orders and the indications which we have received for the next year, that is FY ’25, ’26, I think will rebound back, though it will be a painful and a long journey. It is not going to be a 1/4 sort of recalibration to the original levels. MedTech business also has been a bit slow because of pushout by some customers and delay in the development of products, which we are very confident that in Q1 of next year, it will bounce-back to whatever we had adversaged when we had taken over the MedTech business of Jewelry Digital, which is now known as jewelry MedTech Devices Limited. On an overall basis, we are confident that we would continue to grow at the industry plus average with the margins which we have guided that is a min EBITDA margin of 7%. We hold that guidance for this year. And when we come out with the final results for FY ’25, we’ll come out with the guidance for the next year. As of this, we are on-track to achieve the guided EBITDA in percentage and absolute numbers what we had said of 305, 310, something of that range for the current year. And next year, we expect a growth of about 30%, 35% with corresponding increase in the EBITDA margins. We have onboarded some both automotive and industrial plants in the current quarter. And going-forward, which will be, 26 ’27, we expect significant business from these clients. In ’25, ’26, these clients will be yielding sub INR200 crores of revenues. With this, I hand over to Bijay Agarwal to take you through the detailed figures. Thank you.
Bijay Kumar Agrawal — Chief Financial Officer
Thank you, Mr. Good morning, everyone. I’ll now take you through our brief financial performance for the quarter and nine months ending December 2023. On a consolidated basis, my total revenue from operations for the Nine-Month is about INR208,062 crores, that grew by almost 41% on year-on-year basis. And for the quarter, INR869 crores, which is with a growth of 23% year-on-year basis. During the nine months, the robust growth is broadly based on, I think across multiple industry levels, largely contributed by industry — industrial growth segment, consumer segment and primarily in the IT segment here. Similarly, for the quarter, we had a strong overall growth in the auto industrial sector again. Our export revenue for the quarter is INR210 crore, which is approximately 25% of our total operating revenue for the quarter. And for the nine months, it is about INR583 crores. Our OEM revenue for the quarter is about 13% and for the nine months, it is approximately 11.5%. This quarter we had a strong rebound in the margins led by expansion in gross margins on the back of change in business mix. Consumer sector business is slightly lower than other segments here. The gross margin for the Nine-Month is 21.3% and for the quarter it is with a very healthy gross margin of about 226.7%, broadly 200 bps of expansion on a quarter-on-quarter basis. Our operating EBITDA for the quarter stood at about INR79 crores with a year-on-year growth of 88% and an operating EBITDA margin of approximately 9.1%. For the nine months, it is around INR208 crores, growing 53% year-on-year basis. Similar way, PBT for the quarter is INR66 crores, again with a growth of 144% year-on-year. And for the nine months, it is INR146 crores volume. PAT for the quarter is 53%, again approximately 6% of our PAT margin. And for the nine months, it is around INR113 crores. Coming to our open order book visibility as on-date as on December 2024, it is around INR500 crores, which comprises almost 30% plus of our contribution from auto segment, about 38% to 40% from consumer segment, approximately 22% from industrial segment and balance from healthcare plus IT and Railway segment business. On the working capital side, currently, as in-quarter end, we stood at around 64 days of net working capital days investments. Again, it is slightly higher than the last quarter. We continue to make efforts to keep this net working capital below 60 days on a sustainable basis. Moving to our debt position, we have a gross debt of approximately INR685 crores against which we are maintaining a treasury of INR412 crore. And with that my net-debt position is INR273 crore. Out of this total debt, this is primarily funded through working capital and only INR65 crore is what is the term-loan here. Coming to my capex, for this nine months, we had spent approximately INR180 crores of capex and largely towards building up this new campus facility in and a facility there in Germany. Some bit of additional capex towards some line and platform which seems to be stuffing for new customers onboarding. My asset turn for the quarter is about 5.5 times and ROCE for the quarter is around 13% on an adjusted basis. We expect this to improve further as we work on higher utilization of our capex going-forward. Slight a bit of update on the merger side, we are waiting for the final order from the NCIT and we hope we should be able to complete this merger in another three to six months of time. We expect this full-year as we have guided broadly previously also, we expect this full-year, we should be able to close at around INR300 plus crores of overall EBITDA for the full-year FY ’25. With this, I hand it over to Singh, our CEO. Thank you very much.
Satendra Singh — Chief Executive Officer
Thanks, Vijay. Good morning, everyone. I think and Vijay covered the numbers pretty well. I’d like to start with the comment which is to thank all my colleagues in the company who have worked hard to execute this strategy, which we have been kind of sharing with you and executing every day. So thanks to the colleagues, I think we have had this very, very good quarter. To repeat a little bit about this strategy, I think we continue to build for future, which is to focus on the people, to focus on the processes and to focus on the plant capabilities. And Pune, which was opened in October is one such investment which we have made to build our capability and also to fill-in the white space which we have had as a company because we were not present in the Western region. So that kind of takes care of our ability to fulfill the customer needs in the region. Overall, I think we are executing day-in and day-out on the operational side. So there’s a lot of initiatives which we have done to streamline and improve our processes on the process excellence side. So with this, I think I’ll — I’ll say thank you everyone once again and back to Nikhil to take the questions-and-answers.
Nikhil Gupta — Headof Investor Relations, Corporate Development & Initiatives
Thank you,. The operator, request you to please take us through the Q&A session.
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 touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Dhananjay Bagrodia from Ask Investment Managers Limited. Please go-ahead.
Dhananjai Bagrodia
Hello, sir. Just wanted to ask you regarding your debt position. Our debt has increased year-on-year. So how should one look at that going ahead and how are we thinking about this?
Bijay Kumar Agrawal
So year-on-year basis, debt has increased slightly primarily basis the working capital investment. In this quarter, we had additional working capital towards some bit of new additional inventories bringing related to new customers onboard. That will keep on select within this quarter-on-quarter these may come. But on a full-year basis, we have already guided that we will bring down this overall working capital investment below 60 days, that’s what we are confident we will be able to maintain on a sustainable basis.
Dhananjai Bagrodia
So the 60-day working capital that is 10%.
Bijay Kumar Agrawal
Yes, that’s there. As on this quarter-end December and we are at 64 days of net working capital investment, but gradually on a quarter-on-quarter basis, this can again come down below 60 days. And again, it’s a dynamic number. When the business is growing, revenue is growing, overall working capital investment, it may increase depending on the business. That’s how the overall working capital borrowing is also led with the working capital investments.
Jasbir Singh Gujral
And last quarter, we also commissioned our Pune plant, which is yet to give revenues, but the inventory buildup happens when you start-up a new plant and you bring in new customers, the prototyping and all that takes time, but the inventory goes up. And hence we have seen a marginal increase of about four, five days in working capital — net working capital, which we believe that we’re very confident that in the coming quarter — by the end of this year, we should be sitting at about 60 days of net working capital. Okay. And this is all working capital and there is no sort of long-term loan on this.
Bijay Kumar Agrawal
Gradually this is reducing.
Dhananjai Bagrodia
And these are in terms of order book, what would be the order book for this quarter and how do we see — how much do we see that executing over the next 18 to 24 months?
Jasbir Singh Gujral
See, Vijay will go into the details. Orders, we normally track it on an annualized basis. As I’ve all-the-time being saying, we are mindful of quarter-on-quarter, but what we are very focused on is what is the long-term story? Is it intact growing or is it having some issues? So we don’t — figures are available, but we don’t track orders on quarter-to-quarter basis because in 1/4 a new customer comes gives us INR200 crore orders, it will show-up. On an annualized basis, we have a very solid order book of which Vijay will deal with in detail. So during the quarter, we executed order and intake?
Dhananjai Bagrodia
Sorry,
Bijay Kumar Agrawal
Please go-ahead.
Dhananjai Bagrodia
We’ll go-ahead. No, I think this order book, how long does it — how long are you seeing that being executed over?
Bijay Kumar Agrawal
So this is getting executed over a period of nine to 15 months.
Dhananjai Bagrodia
Okay.
Bijay Kumar Agrawal
The current order book, which is INR5,300 crores,
Dhananjai Bagrodia
INR5,300 crores. Sure. And sir, lastly, most of our businesses, excluding industrial have Q-on-Q been flat. Is there any seasonality in these businesses in terms of auto consumer and you mentioned healthcare, but auto and consumer, is there any seasonality in the businesses?
Jasbir Singh Gujral
See, quarter-on-quarter it could have Bobs because each industry has its own, what you call dynamics. For example, the auto industry or the consumer industry where we are not present typically stocks up for Diwali in Q2 for the financial year. And the dealer and the sale happen in Q3, but at the production and the manufacturing and the uptake happens in Q2. So this over a period of time gets neutralized and we are on-track to achieve the growth rate in the respective verticals which you have set-out to.
Dhananjai Bagrodia
Thank you so much. Congratulations again for a good set of numbers.
Jasbir Singh Gujral
Thank you.
Dhananjai Bagrodia
Thank you.
Operator
Thank you. Ladies and gentlemen, we request you to restrict to one question per participant. The next question comes from the line of Rahul Gajari from Haitong Securities. Please go-ahead.
Rahul Gajare
Good morning, gentlemen, and congratulations for the very strong performance in this quarter. Sir, my question is on the margin profile that improvement that we have seen. Is it at — if I see your order book composition, I think auto and consumer continues to be almost 60% to 70% of your order backlog. So is it that incremental orders that you all are taking are at a better margin or what would really attribute to the margin improvement over here.
Jasbir Singh Gujral
See, the margin improvement as all-the-time being saying is a function of the product mix which we sell. For example, in Q3, my consumer business is only 31%, high-volume consumer business, which is a nice margin business, whereas my industrial business is 30% for three months, against average of 25% for nine months. When automotive is 24% of my revenue for this quarter comes from automotive. For nine months, it is 21%. So the product mix change results in this — the change in the margin profile. And as I had said earlier that for this year, we are guiding — we targeted about 40% of our revenue coming in from consumer business. The wish and the desire of the management on which we are working with a very focused strategy is to bring this high-volume business to about 35% of our revenue. I would be happy with 30%, but I don’t see it happening immediately. If it comes on to 35, it will have a natural positive impact on the margins because
Bijay Kumar Agrawal
Additionally the operating efficiencies we have been working upon since last maybe almost two years, both on the supply-chain side and maybe operating on scale side, both have been at least now delivering on the results side
Rahul Gajare
Actually. Okay, okay. So this is basically product mix. It is not that the incremental orders that you all are taking are or you are getting are at a slightly better margin. It is basically the product mix that is driving really the efficiency over here.
Jasbir Singh Gujral
Every industry has its own margin profile and every customer has its margin profile. We always endeavor and strive to increase that margin profile within the industry. For example, if our automotive customer gives me a 22% gross margin, our endeavor is to take it to 24% with some customers, 28% with some customers. So that the branded margin comes down to is about ’23 24 ’22. So it’s a mix of A, vertical wise the sales and then the endeavor of the management that new businesses which we take-in the upcoming seas in EV and all that, they should be at a better margin.
Bijay Kumar Agrawal
So when we say this is business, in that business, this is automatically getting covered that higher-margin business and now we are adding much more in the profile.
Rahul Gajare
Sure. Thank you very much.
Operator
Thank you. The next question comes from the line of Indrajit Agarwal from CLSA. Please go-ahead.
Indrajit Agarwal
Hi, thank you for the opportunity. I have two questions. First, what exactly is happening in the consumer segment because we have had this 38% 40% of the order book as consumer last quarter as well, but growth over has been tapered. So is it more like by choice or there are some execution issues? What exactly should we read-through over there.
Jasbir Singh Gujral
So there are no execution issues, abnormal execution issues. So normal execution issues running in the factories or they are always there. What we have done in the last quarter is that we have started renegotiating prices for the high-volume consumer business to see whether we can have a bump in some margins or not. And that is a long-term strategy of the company to move to the high-profit, high-margin business, low, medium volume, high-margin business. Consumer business will continue to be about a high-volume consumer business will continue to be about one-third of my revenue. That’s my desire. And that is also guided by the PLI. See, we have a limit on the PLI, so there is no point of bumping of the business which is not with PLI.
Bijay Kumar Agrawal
So we are structuring the business in a way so that we can maximize on the side, on the benefit side and additionally, then improving the overall margins either through pricing and that is where we are at least this business. On a delivery side, we are keeping as a check. We should be keeping it as a balanced number in the overall profile also.
Indrajit Agarwal
Understood, sir. A follow-up on that. Does low-margin also mean low ROCE or asset turns are better so that the ROCs are offset in the consumer segment? And secondly, is the consumer largely exports
Jasbir Singh Gujral
See, typically in the industry — in the EMS industry, a high-margin business will have a lower said turn, higher working capital involvement. You can’t have all the or all the nectives in-market. So a low-margin business has a competitively significant lower working capital involvement and a higher sector. So this is the typical nature of the industry.
Bijay Kumar Agrawal
And in this — on this question of the export side, this is largely a domestic business. So maybe almost as of now, this consumer segment business, about 80%, 85% is domestic and is export
Indrajit Agarwal
More questions, I’ll join back. Thank you.
Operator
Thank you. The next question comes from the line of Sonali Salgaukar from Jefferies India. Please go-ahead.
Sonali Salgaonkar
Thank you for the opportunity and congratulations on a great set of numbers. Sir, my question will be regarding, firstly, could you reiterate what is your guidance for FY ’25 and also you mentioned for FY ’26, sorry, I joined the call a bit late. And secondly, what is the kind of steady margin that we should expect considering and we do appreciate that every quarter will have its own product mix changes and every segment will have its own margins.
Jasbir Singh Gujral
See for the FY ’25, we had guided a 7% EBITDA, which comes to about INR3,305, IN 310 or something around that perpar north of INR300 and we are confident that we’ll be able to achieve that in the — this quarter and for the year. Now FY ’26, we believe and we are confident that we’re lower than the industry rate and the industry growth rate is typically 30% 35% currently. And if we grow at 30% 35%, then there’ll be a corresponding bump in my overall EBITDA margin also. When the operational leverages kick-in and all those things. So we are on-track to achieve what we had guided for FY ’26 early-on that this is a wish list. Now we are on-track for achieving that.
Sonali Salgaonkar
Great, sir. Sir, and secondly, a very important point is that for the last two quarters, we have been showing considerable improvement in our EBITDA margin. This is the second consecutive quarter. So has anything structurally changed in terms of A, whether we are targeting certain sub-segments within the key segments or how should we look at it or probably it is finally a boils down to the function of our product mix change, which could be transitory.
Jasbir Singh Gujral
It could be a product mix. See, in Q1, we had 54% high-margin consumer business and that hit us badly on the margins. In Q2, this came down to about 40-odd percent and we’ve sort of bumped up to 8% odd percent EBITDA margin. This quarter, it is down to 31%, so the EBITDA margins go up. So EBITDA margins are a clear play of the product mix and operational efficiencies kicking-in. The endeavor of the management on a long-term basis is to bring down the high-volume consumer business which is inherently low-margin to below 35%. 35 is the bare thing. I would be happy if it could come down to, 31 32 33 and grow our other business. The efforts of nurturing clients over the last two years in other sectors like industrial, like automotive have started yielding results. And industrial, we have got some very formidable names in various applications for reasons of confidentiality, I will not be able to take the name, but there are — they are with superior margins and reasonably decent revenues.
Sonali Salgaonkar
Understood, sir. Very clear. And also is exports a driver of our margins in any way? Is it a higher-margin business as compared to export?
Jasbir Singh Gujral
Export is a higher-margin business? Unfortunately, for the current year, we are only at 20%, so we’re down from 25% because of slowdown in Germany. Germany is today a sick debut of EU and Trump has just come in. I think it will be a while before the get settled down. So — but on a long-term basis, again, I said we are worried about quarter-on-quarter short-term. On a long-term basis, we are very focused that export should constitute north of 25%, possibly 30% of my revenues. Now whether it is ’25 or ’26, that I really can’t say because it’s a play of domestic business also panning out in various segments other than the consumer. But yes, exports are high — comparatively higher-margin business and we intend to bring it back on-track to about 25% of the revenue, which currently has come down to about 20%.
Sonali Salgaonkar
Understood. Very clear, sir. All the best and thank you so much.
Jasbir Singh Gujral
Thank you.
Operator
Thank you. The next question comes from the line of Deepak Kreshnan from Kotak Institutional Equities. Please go-ahead.
Deepak Krishnan
Hi, sir. Just wanted to understand on the new JV that the new entity that we have formed for laptops, what sort of revenue potential can we see from this new venture that you are putting into? And maybe just on revenue guidance, wanted to check if the INR4,500 crore guidance still stands or is that number sort of revised down with a higher EBITDA margin.
Jasbir Singh Gujral
Okay. What I could understand is about the laptop business and the guidance which you given was 30% 35%, does it include laptop or laptop will be in addition to that. Is this your question?
Deepak Krishnan
No. So the laptop business revenue potential and the INR4,500 crore revenue guidance that we have given for this year, does it still hold?
Jasbir Singh Gujral
Okay. The laptop business has just started last month. It’s still in the infancy stage. It will mature in the coming quarters. And in the coming year, it would also mature into going up to the backward integration of board level assembly. Currently, it’s a laptop assembly. On the guidance of revenue, we are more focused on the margins and we are very confident that whether we do INR4,200 crore INR4,100 crore or whatever, the INR300 crore-plus INR305 crores of EBITDA margins are intact. Revenue is a play of consumer business, other businesses. So to us, based on the inputs for the street, we are more focused on growing as per the industry rate with margins of 7% or 7% plus.
Deepak Krishnan
Sure, sir. Maybe just wanted to check if any PLI incentive is booked this quarter and is there any one-off income because the other income is relatively higher. Just wanted to check these two items.
Jasbir Singh Gujral
One-off income one-off income, we had acquired a piece of plan for expansion in North. Once we put up the campus in Pune, we felt all expansions should happen in the Pune campus. So we sold-off that piece of land in, Ah Manesa and that has resulted in a one-off income, which is shown separately and not in the operational EBITDA.
Deepak Krishnan
Sure, sir, any P&I this quarter?
Bijay Kumar Agrawal
INR15 crore to INR17 crore of total income for the full-year.
Deepak Krishnan
Sure. Okay. Okay. Thank you, sir. Best of luck for future quarters.
Operator
Thank you. Thank you. The next question comes from the line of Bharat Shah from Ask Investment Managers Limited. Please go-ahead.
Bharat Shah
Yeah. Gujaral. This I’m actually asking Vijay you have referred to EBITDA margin of 7%, but I suppose what you mean is operating profit margin of 7% because EBITDA margin will mean operating profit plus other income. So that’s a bit of a sorry,
Jasbir Singh Gujral
With all treasury income.
Bijay Kumar Agrawal
This is operating EBITDA margin right 10% plus. Vijay after an IDR. I’ll say this is operating EBITDA margin, which we are referring, 77% plus and other income will be over and above that.
Bharat Shah
So because he kept saying EBITDA, therefore, I just wanted to clear the confusion, you know. Because that — what he means is operating profit margin of 7%. All right. And the outlook for the year coming, we were earlier discussing turnover of closer to INR6,000 crore or thereabouts. So is that something intact?
Jasbir Singh Gujral
I think we would come back with that figure, but with the current estimates, I think there could be a mild variation in that, but with a caveat, the EBITDA margins which we had guided based on INR6,000 crores of revenue would be intact.
Bharat Shah
Okay. Okay. So which means it will be a play on the overall profits. Turnover will be a resultant number.
Jasbir Singh Gujral
Yes, yes, absolutely. So we say that, okay, if you are guiding the for X EBITDA margin absolute trigger, then that X can be constituted by 100 revenue or 120 revenue-based on the product mix. But to us it is the X which we are guiding the market, that is more important.
Bharat Shah
Absolutely. Last bit, on the capital efficiency, return on capital employed, what is the progress being made? One element you highlighted that working capital will be sought to be kept below 60 days and hopefully, it will improve further going ahead. New facilities have been built, new hiring in talent investment has happened. So physical infrastructure, people infrastructure, other initiatives all are in-place. And therefore, hopefully with the growth of the business, should it result in a measurable improvement in return on capital employed?
Bijay Kumar Agrawal
That’s right. That’s what we are also targeting. My overhead costs are much more stable now and the expenses are largely been taken care of. So with this, the way we are anticipating next quarter also, we are targeting like this year, we should be closing around 14.5% to 15% of ROC and gradually it should then move towards our targeted ROCE of 20% over the next two years.
Bharat Shah
So by-20 fiscal ’27, we should be hugging closer to 18% to 20% return on capital employed.
Jasbir Singh Gujral
Yes.
Bharat Shah
Jake, thank you and all the best.
Jasbir Singh Gujral
Thank you.
Operator
Thank you. The next question comes from the line of Keyur Pandia from ICICI Prudential Life Insurance. Please go-ahead.
Keyur Pandya
Thank you. Thank you. Sir, just to clarify, as you mentioned that, I mean, revenue may vary and the margin vary. So we are targeting for absolute EBITDA. So in that backdrop, how should we think about, say, gross block asset turn or is there any other measure, say EBITDA per INR100 crores gross block, whichever way basically how should we think of that measure of ROCE?
Bijay Kumar Agrawal
So currently, we are at a weighted-average asset turn of around 5.6 times. With this increase in scale, we are hoping we should be around somewhere around 6 times of asset turn. And that is where we are saying this year probably we may much more closer towards 14.5 to 15 and gradually then this should improve
Keyur Pandya
So anywhere looking 5x to 6 asset turn is sustainable and I would say more optimum asset turn that is possible and targeting EBITDA margin, operating EBITDA margin of 7%, 7.5%. Is it correct?
Bijay Kumar Agrawal
Yes. Gradually, yes, operating margin will — again, we see an improvement in the operating margins there or maybe asset turns should improve. Is it thereafter six to seven times in that case. That’s the because
Keyur Pandya
I mean, as you discussed that share of consumer should or would come down, that should impact theoretically negative to your gross block asset turn and that should be offset by higher margins. And that is how it will play-out or just want to understand the construct of the ROCE and with the mix change.
Bijay Kumar Agrawal
If you say this 35% or maybe less than 35% of consumer business, that is actually not a negative growth. There will be a growth and positive, but other businesses may grow at a better pace so that overall — in the overall total portfolio of this business should be within the check of 35%. That’s what we are saying. So asset term side, I still don’t see a negative from 6 to below six that way. Gradually it should improve further, the increase case. And as my facility also ramps-up, this will also add to my asset turns going-forward.
Keyur Pandya
Okay. Last follow-up. So based on current gross block, what is the maximum revenue that we can generate ballpark?
Jasbir Singh Gujral
How with the product mix, which we have said about 35% 37% consumer and all that, we should be able to achieve INR6,500 crores of INR6,600 crores of revenue with this gross block. With marginal additions for equipment and all that.
Keyur Pandya
Okay, understood. Thanks a lot and all the best.
Operator
Thank you. The next question comes from the line of Bhumika Nair from DAM Capital. Please go-ahead.
Bhoomika Nair
Yeah, good morning, sir, and congratulations on a good set of numbers. Sir, just wanted to understand how JDHL has performed in the quarter and for the nine months, if you can share revenues, EBITDA and PAT and the outlook for the same. And my second question is on the Auto and the industrial segment, we’ve seen order backlog growing quarter-on-quarter, but, but I guess I got the — I’m not to sure if I got the number right, but you said that industrial was about 20% 25% of the total order book. So if you can just give some outlook on industrial, what are the new segments, what orders you’ve seen because it seems a little lower than our historical trend.
Bijay Kumar Agrawal
So I can explain the business and then maybe Viral, you can add-on the industrial fee side. Our business is slightly subdued in this quarter, which we have already explained at the start of this call that we are expecting this to rebound from next quarter onwards or with this current quarter onwards that way. So as of now, in the last quarter, this business done approximately INR20 crores INR25 crores of revenue with a less than INR10 crores of EBITDA — around INR10 crores of EBITDA that way. And going-forward, we see this should rebound better on a quarterly basis.
Jasbir Singh Gujral
See, on the MedTech business we are building the platform and there has been a slight sort of a delay in customer lifting, customer approvals and all those things. But we are very confident that in the coming year, so we are delayed to show by about nine months. But in the coming year financial fiscal ’26, I think MedTech should come back to what we had envisaged, and thereafter, beyond ’26, it should grow because the customers, the designing and the products and the areas which we have entered in the last one year, we have recalibrated the entire business in the medtech space so that we are now more outbound, more customer-centric rather than executing businesses which were historically coming in. So more outbound and customer-centric than inbound business. I still believe and I maintain that in the coming years, medtech business should be a very reasonable, decent chunk of our business. Currently, it’s at about 6%. Now if we grow at 35% and businesses also growing at 6%, it has a natural growth, but I expect it to grow at a faster rate in the coming year.
Bhoomika Nair
So sir, I mean, what is the current — where do you expect what is the order book out here? And when you’re saying ’26, ’27, you’ll see a significant ramp-up, what kind of revenues are we looking at from this business?
Jasbir Singh Gujral
I would not be able to share the revenues to be very honest. But the pipeline, the product development pipeline, which we are today capturing to, including designing, which would go into production in the coming years, I think gives us the confidence that in the year ’25, ’26, we should be closer to maybe 160, 150, 170 or 200, but it’s a bit early because it also involves designing. It’s not a pure-play manufacturing of a product which has already been developed.
Bijay Kumar Agrawal
In the order book also this business in totality is contributing almost 7%, 7.5% order.
Bhoomika Nair
Okay. Okay. The second part was on the industrial business, if you can throw some light on how the order intake has moved and what is the outlook in terms of new client additions, etc.? And which segments are we seeing growth being driven by?
Bijay Kumar Agrawal
Our current order book on the industrial side is about 20% 32% of my total thing. On the side, we see a lot of traction on the smart metering business side mainly and lot of — we have added one more new customer recently and previously, as we have explained, Honeywell business is also now picking-up gradually. So we’ll see this sub-segment will perform much better on the industrial side. Additionally, we are working on the renewal piece, which is a kind of a solar segment here in this case and maybe other power supplies business, which will contribute to this particular segment.
Satendra Singh
Just to add-on to what Vijay and Gujaral we covered on industrial, it’s a combination of Indian business as well as exports business. So in exports, I think we see — we have a couple of customers, which we would not be able to share the names at this point, but we have the business logged-in and that should start trickling in the FY ’25, ’26. So we would see us growth over there from the — from those customers.
Jasbir Singh Gujral
And just to tell on the applications within the industrial segment, utility metering, including smart metering, whether for gas, electricity or water is one dominant component. Power supplies and power management units for data centers is another dominant segment. Industrial cleaning wet dry steam is a decent-sized business. Then we have into the renewable like solar trackers or solar inverters, which is developing, which I think in the coming years should go up. And then it would be like automation, communication cars, automation cars, I can’t think the name of decent, very good orders from a global giant for interface cars and this goes in a very, very-high volume
Bhoomika Nair
Sir. I have more questions. I’ll come back-in the question queue. Thank you and all the best.
Operator
Thank you. The next question comes from the line of Aniruddha Joshi from ICICI Securities. Please go-ahead.
Aniruddha Joshi
Yeah. Sir, two questions. One, what is the total PLI benefit that we would have booked in nine months? And also, I mean, in a way is the money received or is it accounted for? That is question number-one. And secondly, we have seen now back-to-back slowdown in the consumer business. So how do you see the outlook from a over next two-odd years? And also, as I understand, generally, the Q4 is quite heavy from a RSE perspective and Q1, Q2 are strong because of demand for water purifiers. So Q4 and Q1, we should see a higher revenue-share of consumer business. Is that understanding correct also? Yeah. Thanks.
Jasbir Singh Gujral
On the business part, the consumer business, which is not high-volume is going as per track. And that’s a high-margin business. It’s not a low-margin business, though it’s clubbed in the consumer segment. And for this quarter and the coming quarters, we are on-track to grow as per the industry rate with the margins which we had guided. Again, end-of-the day, it is a focus of the management to give margins and see that the margins consistently over a period of time inch upwards. So with that in mind, you have a flexibility to play with the product mix without sort of sacrificing the margins and still doing the business. As I said, we are renegotiating some of the prices to see what incremental margins we can get. So that’s a work-in progress.
Bijay Kumar Agrawal
On the PLI, I think the PLI for the full-year, we are estimating it should be around INR15 crores to INR17 crore. For the nine months for current financial year, we have accrued around INR14 crores.
Aniruddha Joshi
Okay. And what was the numbers last year nine months?
Bijay Kumar Agrawal
Last year also full-year number, I don’t have a Nine-Month number that way, but last year also for FY ’24, this number was around INR16.5 crores full please FY ’24.
Aniruddha Joshi
Okay, sure, sir. Yeah, that’s helpful. Thank you.
Operator
Thank you. The next question comes from the line of Aditya from Investec. Please go-ahead.
Aditya Bhartia
Hi, good morning, sir. Sir, my question again is on the PLI scheme. I remember in one of the earlier conference calls, you had indicated that there is a PLI benefit due of almost INR45 crore in respect of FY2 — in respect of FY ’24, of which our share would be around INR16 crore. So just want to clarify these numbers that we are saying, is this our share which we retain and which we kind of record as income in our books of accounts, it’s the total quantum that we have received in nine months.
Bijay Kumar Agrawal
This is a net basis like whatever probably may need to share. So these numbers which we are quoting are all negative, which should be our share retention.
Aditya Bhartia
Okay. So INR14 crores that we have received in nine months of the fiscal is roughly our share.
Bijay Kumar Agrawal
Yes,
Aditya Bhartia
Correct?
Bijay Kumar Agrawal
And current financial.
Aditya Bhartia
Understood, sir. And this will be in respect of entirely FY ’24, correct?
Bijay Kumar Agrawal
Okay. This will be in respect of current financial. The current financial year what we are saying, which will be around INR17 odd croress Nine-Month number is around INR14 crore rupees on a net basis
Aditya Bhartia
And we record it on a cash received basis or we are doing it on an accrual basis.
Bijay Kumar Agrawal
We are doing it on accrual basis.
Aditya Bhartia
Understood. Because last year, sir, wasn’t it the case that we thought of doing it on a cash received basis and therefore, we weren’t really recording lot of PLI benefits and we have spoken about PLI benefits of coming into the books of accounts in the following year.
Bijay Kumar Agrawal
So that is something previously in the initial start of the very first year we were doing — we were in vector the time we were getting the first approval there so which we, then later on it is now on all approvals.
Jasbir Singh Gujral
So the first year is always a tough year when the entire application has to be vetted by the department and the agencies nominated by it. So that takes a lot of time and hence we were conservative to not account for it. Once the products are approved, the capex is approved, that is only a data which generates the sort of common sales how much is the PLI. So it’s a pretty simple methodology. And hence, as per the industry practice, we have migrated to a basis.
Aditya Bhartia
Fair point, sir. So does that mean that in one particular year, we would have recorded a on cash basis BLI benefit, benefit which was made-for the preceding year as well as on the accrual, we would have recorded the benefits of the same year.
Bijay Kumar Agrawal
Yes, previously it was previously to accrual business. Now is accrual business. So there’s basically an impact.
Aditya Bhartia
Sure. So this year like INR14 crores is in respect of current year accrual, but we would have recorded on — for cash for preceding year also, right? So overall PLI benefit that we would have recorded would have been higher. There would be some amount for FY ’24 as a
Bijay Kumar Agrawal
. Previous years, it is all linked to whenever we get it. So that far it is slightly different that way. The current year related, we have approved around INR42
Aditya Bhartia
Sorry, sir, your voice was trapping a little bit.
Bijay Kumar Agrawal
So I think the, it is linked to the of the cash. But currently, for current year related we have accrued around INR18 crore.
Aditya Bhartia
No, that’s a fair point, sir. I’m just requesting for one simple data, INR14 crores is in respect of this year. Have we have we recorded any amount in respect of preceding year FY ’24 as well, which we may have recorded on cash basis?
Bijay Kumar Agrawal
Receiving we are related. It is linked to the receiving of the amount, which will happen gradually.
Aditya Bhartia
Understood, sir. Thank you.
Operator
Thank you. The next question comes from the line of Sumant Kumar from Motilal Oswal Financial Services Limited. Please go-ahead.
Sumant Kumar
Hi, sir. Can you talk about the railway order inflow of the — and also what are the sub-segment we got ordered for railway?
Jasbir Singh Gujral
Railways.
Sumant Kumar
Yes.
Jasbir Singh Gujral
Railways, I think we had guided that this year we’ll be doing about INR70 crores of revenue from the railways and we are on-track to achieve that revenue this year. New product approvals are in pipeline. So till those product approval by RDSO happen because every product has to be approved by RDSO, it will be tough to give a figure, but I believe that next year this figure should be higher than INR70 crores. Even if it’s a 50% growth rate will be about INR100 crores. So anything between INR100 crore or INR100 plus crores in railways in FY ’26 is what we are targeting.
Sumant Kumar
Which are the sub-segment in rail basis?
Jasbir Singh Gujral
Sorry,
Sumant Kumar
Which are the sub-segment in railway in the product-type.
Jasbir Singh Gujral
So these are — these are the — really the brake controllers, the bulk of it will be signaling equipment and other products which go on to the baggage. But bulk of it would be the signaling system for the railways. So it will be up next 50% what goes onto the locomotive or what goes onto the wagon and 50% what goes onto the infrastructure, which is a signaling.
Sumant Kumar
So thank you. Thank you so much.
Operator
Thank you. The next question comes from the line of Bharat Shah from Ask Investment Managers Limited. Please go-ahead.
Bharat Shah
Shab, earlier you mentioned that pick turnover from the current infrastructure can be around INR6,500 crores, which means virtually before the next year-ends we will need to raise physical infrastructure to prepare for the growth ahead
Jasbir Singh Gujral
We have this facility in Pune where the equipment can be planted. We have just got two lines in Pune and it has capacity to take-in a number of more lines and then, yes, for ’26, ’27 onwards, we will be constructing within the same campus, a production facility were to taking us to for the ’26, ’27, ’27, ’28 because there will always be an overlap. But the bulk of the cost is the land which has already been acquired. The building and all that cost, but it’s not comparable to what the land cost is.
Bharat Shah
So which means if we need to raise the capacity, we can do it fairly quickly.
Jasbir Singh Gujral
See, currently for the nine months, my capacity utilization is around 70% or little less than 70%. So if I have done INR3,000 or INR2,900 crores of revenue at 70%, this takes us to INR4,000 crores in the new sets which we have just put in, which are not called taken into the capacity would yield additional results. The facility has just been set-up. So we don’t count that into the capacity because it takes time for us to build the output in from a new plant here to get customer approvals, you have to get quality approvals. But with this asset-base with some marginal balancing equipment, INR6,000 crores INR6,500 crores is achievable and this would also depend upon the product profile. Hypothetically, if I was to do only consumer, then it could be even more than INR7,000. But with a low-volume, high mix, all those things, the blended output should be about INR6,000 crore to INR6,500 crores
Bharat Shah
So basically as we get into the next year, at some stage we will have to unlock new capacity to prepare for ’26, ’27. So basically what we are saying is that can be done reasonably quickly at Pune facility to raise the overall production capacity.
Jasbir Singh Gujral
Yes, you are right. You are right. So it takes about six months-to set-up a — since it’s not a vertical growth, it’s a single-story growth in Pune, it takes about six months-to set-up a manufacturing facility. And by the same time you order the equipment and you can sort of align the of the equipment with the completion of construction.
Bharat Shah
Yes. Sure. And Vijay, just one issue. For the current year, what is the likely tax-rate for the profits? This is approximately 23% to 25% there. For the quarter, it is lower because there is other income, which attracts a lower capital gains tax and that’s where it is lower. Otherwise, it will be around 23% to 35% correctly. And the next would be presumably be similar?
Bijay Kumar Agrawal
Yes.
Bharat Shah
Okay. Thank you.
Operator
Thank you. The next question comes from the line of Praveen Sahai from Prabhas Capital. Please go-ahead.
Praveen Sahay
Yeah, hi, sir. Can you give the capex number for ’25 and ’26?
Bijay Kumar Agrawal
So currently till nine months, I have already spent around INR180 odd crore. In this quarter, I may spent somewhere around INR30 crores. So current year it is around INR200 crore to INR225 and next year I may spend around INR100 crore to INR150 crore.
Praveen Sahay
Okay. And also in the past, you had announced for the QIP, what’s the status for that?
Bijay Kumar Agrawal
We have the approval from the Board and shareholders together. As of now, we have not initiated anything on that team. We are internally working on a few of the expansion growth projects. If we need any further additional capital, then we’ll probably go for that.
Praveen Sahay
Okay. Thank you, sir. All the best.
Operator
Thank you. The next question comes from the line of Dhaval Shah from Girik Capital. Please go-ahead.
Dhaval Shah
Yeah. Hello, sir. Thank you for the opportunity. So, sir, if we understand our progress as a company over the last two, three-year period since the — since we went public. So does it mean that our strategy as a company is now more focused on EBITDA margin the way you mentioned about you renegotiating the contracts, going back to the customer versus the kind of growth we were talking about and chasing growth, the working capital had expanded and that’s why we also thought of doing a fundraising and now we are more of talking more on the margin front. So what has led to this change in this thought process over the last two years, you saw things changing on the — on the customer side, demand front, competition front. If you could help us understand on this part, number-one. And number two, going-forward, know the — in the order book, consumer is still high, but your industrial order book is also increasing. So does the increasing power of industrial and others, which is railway IT also benefit your margin? And will we now consistently be looking at on an annual basis, 7% plus kind of EBITDA margin without other income.
Jasbir Singh Gujral
These are my two questions. See, we have recalibrated our sort of strategy based on the imports and the growth areas available, which I had earlier also said, it was not that we were sacrificing the high-margin business for the sake of low-margin business and that continues even today. We are more focused on generating EBITDA and that’s the recalibration we have done. Why we have done it is because of the inputs we have received from various quarters. And correction is always I think welcome thing if it’s for the better. We continue to sort of focus on margins with growth at the industry level. Now on your other question of railways and others, those businesses are factored into a normal plan which we share. And I’m very confident that going-forward, what we had guided for this year and next year, we’ll be able to achieve that.
Dhaval Shah
Okay. Okay. And for this sustainable 20% ROCE, so what sort of margins would — would it require? 7 — like 7%, 7.5% because the you know the way asset turns will change depending on the products. So what sort of margins are we looking at for that sustainable 20% ROCE number.
Bijay Kumar Agrawal
Richard. So I think if we are able to improve the overall asset turn somewhere between 6.5 to 7 times with our overall EBITDA margin of 8%, I guess we’ll be nearing towards our targeted ROCE.
Jasbir Singh Gujral
And also provide a better working capital management and control.
Dhaval Shah
Okay. So 6.5 to 7 times asset turn with a — with an almost 8% EBITDA margin. Now this is possible when we go for what sort of product mix in this, then because the margins are also higher, also higher than historical.
Bijay Kumar Agrawal
When we talk about margin percentage that already factors in the different product mix. So whichever product mix complet we are able to deliver that EBITDA margin with a lower working capital investments. So automatically the ROCs will improve this.
Dhaval Shah
Okay, okay. Thank you. Thank you. Good luck.
Operator
Thank. The next question comes from the line of Viprash Rivasa from PhillipCapital. Please go-ahead.
Vipraw Srivastava
Hi, I’m audible, right? Yes. Sir, quickly on the PLI thing, which one previous participant asked. So in FY ’24, it was a — it was cash-based in FY ’25 with accrual-based. Is this correct or am I wrong?
Bijay Kumar Agrawal
So current year accrual — only FY ’23 was cash-based, then gradually we have changed the factor. So ’24, ’25 both were accrual-based, right?. Yes.
Vipraw Srivastava
Okay. Thank you. And secondly, sir, quickly on the — our consumer segment. So you had — if I remember correctly, you were saying 40% should be from consumers. So if we take nine months and if you take the revenue mix for nine months, we already are on 40%. So in Q4, should we see the same mix of business or do we see consumer going up in Q4?
Jasbir Singh Gujral
I personally don’t see consumer significantly changing in Q4. At the end-of-the year, I think will be around 40%, maybe a percentage lower or 0.5 percentage higher, maybe 38%, 39% consumer business. The endeavor of the management as I hold the time-being saying is that to bring it down to 35%.
Vipraw Srivastava
Right, right, sir. And sir, lastly, I mean, we do know that in the electronics ecosystem, government of India is coming up with a PLI on components where they’re going to incentivize a component, let’s say like bare board. So do we see some risk from that end because your peers that were integrated into bare boards in your consumer segment, how do you plan to compete with them?
Jasbir Singh Gujral
See, on the backward integration, I have been dealing with it all the quarters. So the backward integration essentially would be into either the PCB manufacturing or the semicon manufacturing.
Vipraw Srivastava
Right, right.
Jasbir Singh Gujral
Deep in PCV manufacturing and semicon manufacturing, they are independent business units, business projects to be evaluated on an independent basis. Now hypothetically, if I set-up a PCB plant, will it give me a positive rub on my EMS business, the answer is no. I manufacture 700, 800 type of SKUs of all types. There is no way I can manufacture the entire thing in my factory. So maybe some critical bones are manufactured in the factory, but I’ll continue to outsource PCBs from the PCP vendors. Today also we have got a dozen PCB vendors for each category seeing the cost and the capability. So these projects are to be evaluated as standalone projects, it gives you a derisking of business, fair it up, but there is a downside as the EMS business goes down, who will use the semicon components which I make. It’s the EMS which is the major consumer of the semicon component, who will buy the PCPs which I make if the EMS business goes down. So it is to be evaluated as such, nothing negative, nothing positive. It has to be evaluated on a standalone basis. If it sets the parameters which the management has set, Johnny will go-ahead for it. But it has no significant leg-up to my EMS business.
Vipraw Srivastava
Sure, sir. But sir, I mean, one of your large peer, they have been saying that they will consume the entire PCB board they manufacture internally. So do you think this understanding is not correct? I mean, you can’t consume whatever they manufacture internally?
Jasbir Singh Gujral
Of course, there is a difference. For example, again, I’ll cry, right? For example, if I’m making televisions, right, I’m just making a product not meaning I’m making air-conditioners and I make 500,000, 1 lakh 1 million per air-conditioners, then I can logically configure my plant so that I can have that board from my own production. But in no case, which is a well-diversified portfolio and not concentrated on one model or one vertical or one application, I don’t see that situation arising. Okay. But yes, if I was to make 1 million televisions in a year, then logically my ply can put up a backward PCV plant to supply me 1 million PCVs. But still it has to be evaluated on its parameters, whether it’s giving me the returns or not. Got a value addition, which I’m giving to a PCB manufacturer, which I retain in-house, have to justify the capex and the.
Vipraw Srivastava
Got it, sir. Thank you, sir. Thank you.
Operator
Thank you. The next question comes from the line of C.A. Goyal from Invest Analytics Advisory. Please go-ahead.
Garvit Goyal
Hi, sir. Am I audible? Yes, good morning, sir. For a decent set of numbers. My one question is on the product portfolio side, like the end industries. So our product portfolio is catering to various end industries, including auto consumers and railways and our industrial segment maybe including power and captive goods sector as well. So I just want to hear from you like based on your discussions happening with the ministries, like is there any change in the government budgetary allocation expected for capex and growth in any of our end industries, sir?
Jasbir Singh Gujral
See, end-of-the day, if I go to the utility meeting, which is End-User would essentially be government or these big private discoms which come up. And I personally don’t see that on a sustained basis, there should be any problem in that. Monthly, quarterly bids, some payments not coming to the guy funding arrangements and all those things is part and parcel of the thing. But on a sustained basis, I don’t think funding would be an issue. And again, this particular business is less than if my memory serves me right, would be less than 20% of my industrial business. I think I should be doing about INR200 crore, INR250 crores, INR220 crores of utility metering electronics this year. And my bigger over industrial will be about 1,000. So it’s about 20% 25%, which is directly related to funding from multilateral agencies or the government. The rest of the industrial business is purely with private sector. Now you scratch it in that private sector may be selling into data centers or private utilities or power supply, power management units globally or within the country. I personally don’t believe that funding should be a crunch for us on a sustained basis. Peaks and trucks will happen.
Garvit Goyal
Understood, sir. That’s it from my side, sir. All the best for the future.
Jasbir Singh Gujral
Thank you.
Operator
Thank you. Ladies and gentlemen, we take the last question from the line of Aniruddha Joshi from ICICI Securities. Please go-ahead.
Aniruddha Joshi
Yeah. Thanks. Sir, just want to clarify further on the possibility of QIP. So I guess we were contaminating entry in OSAT business. So just wanted to understand any update on that. And secondly, even if the company decides to go-ahead with the QIP, will it be for the existing business or will be largely for OSAT or third for any acquisition? Because the existing business seems to be doing fairly well. So I am not sure whether we require any funding in that business as such. So if you can clarify a bit more on that. Yeah. Thanks, thanks.
Bijay Kumar Agrawal
We have taken our approval just to be ready for any future growth. We have never contemplated
Jasbir Singh Gujral
No organic growth.
Bijay Kumar Agrawal
We have never contemplated QIB for our existing business-related any kind of a working capital funding. That’s very clear. Regarding our OSAC plan, we have already communicated previously also, we are evaluating — we have been evaluating this business. And once we are clear in our strategy, yes, this business makes complete full sense in terms of overall profitability business numbers and capital risk, then only will plan for it. But QIC anyways, whenever we at least stand, it will be much more for the growth opportunities, not for the existing businesses. The approvals were clearly taken only has to be ready for any future growth opportunities.
Satendra Singh
And just to add to what Gujaral ji and Bujay has said, I think equity raising is the most costliest of funding. We are very clear on that only when such an opportunity does arise, which requires equity funding, we will raise it. We have enough. We have enough accrual happening in the business itself to sustain continuous period of growth.
Jasbir Singh Gujral
Okay. Yes.
Aniruddha Joshi
This is very helpful. Just lastly, understanding on the inorganic opportunities, but whether we are looking at opportunities in India or internationally? And again, which segments we would be looking at the opportunities, let’s in a way PCBA or we would like to expand the services in overall EMS portfolio itself or anything else.
Jasbir Singh Gujral
Okay. You see, we have all-the-time being maintaining consistently for last several, several quarters that inorganic acquisition will not be made only for the sake of having a bump-up in my EMS business. We would do an inorganic acquisition if it gives me access to technology, fills in gap in my product offering, gives me access to regulatory approvals, and then I would look at inorganic acquisition because reinventing the wheel in such cases is a very long-time consuming. Another thing I think where clarity will emerge in the coming eight months is Mr Trump’s policy on manufacturing in USA. So I’m just sharing my thoughts a lot. Nothing on paper, nothing on plan, but that may necessitate Indian industries to have a nearshoring facility to the USA. It all depends upon what the plans and what are the policies which pan-out in the coming quarters. Currently, we are evaluating what you call inorganic acquisitions, but there is nothing which has reached the stage where we can share it with the street or the analysts. There would be in areas of design, there would be in areas of defense and other things where we are not present today.
Aniruddha Joshi
Okay, sure, sir. This is very helpful.
Operator
Thank you. Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I now hand the conference over to Mr Gujaral for his closing comments.
Jasbir Singh Gujral
Well, ladies and gentlemen, thank you very much and for an insightful Q&A session. From the management side, I would like to assure each and every one of you that we are as all-the-time being saying, focused on building an organization and an institution. Business is a byproduct business will happen. But a growth — sustainable growth in business has to be backed by tangible steps to create the organization to which we are fully committed and we are doing. One of the steps is that instead of standalone units, we have started going on the campus foods to save on the cost. That’s one of the long-term strategies of the government — of the company. We have commissioned or in the process of final commissioning of our facility in Germany. Germany currently is a bit of a spot. So I can’t say today how fruitful that would be. But I’m sure in the long-run, it will be a big to buy export business. We are very, very mindful of our social responsibilities, our diversity and nursery and retaining talent. Respect, mutual admiration, care of the employees and all the stakeholders is at the core of our philosophy. I’ll just ask to share his thoughts on it for the final word.
Satendra Singh
Thank you,. I think thank you everyone for good questions. Your questions are motivating us to think different and make sure that we are doing everything we can to satisfy all our stakeholders, which is of course the shareholders, customers, suppliers as well as our employees and society at large. We are committed to a strategy. We are always talking about consistency, thinking long-term, yes, we are keeping very close eye on the quarterly results like we report every quarter to you. But on a long-term strategy, we are clearly focused on building this organization for future and we are continuing to invest there. We are definitely encouraged with the progress we have made over last couple of quarters and we expect to keep the momentum going.
Jasbir Singh Gujral
Thank you very much. Thank you, gentlemen. Thank you very much, ladies and gentlemen.
Operator
Thank you. On behalf of ICICI Securities, that concludes this conference. Thank you for joining us and you may now disconnect your lines.