Syrma SGS Technology Limited (SYRMA) Q3 FY23 Earnings Concall Transcript

Syrma SGS Technology Limited (NSE:SYRMA) Q3 FY23 Earnings Concall dated Feb. 09, 2023.

Corporate Participants:

Nikhil Gupta — Investor Relations Contact

Sandeep Tandon — Executive Chairman

Jasbir Singh Gujral — Managing Director

Bijay Kumar Agrawal — Chief Financial Officer

Analysts:

Aniruddha Joshi — Analyst

Bhoomika Nair — DAM Capital — Analyst

Nikunj Gala — Sundaram AMC — Analyst

Praveen Sahay — Prabhudas Lilladher — Analyst

Dhaval Shah — Girik Capital — Analyst

Chirag Lodaya — Valuequest — Analyst

Sandeep Abhange — Anand Rathi — Analyst

Unidentified Participant — — Analyst

Nishant Sharma — Nuvama Wealth Management — Analyst

Dhananjay Bagrodia — ASK Asset and Wealth Management — Analyst

Smitesh Sheth — Raedan Securities — Analyst

Suraj Nawandhar — Sampada Investments — Analyst

Saurabh Mehta — East Lane Capital — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to the Q3 FY23 Earnings Conference Call of Syrma SGS Technology Limited, hosted by ICICI Securities. 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. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Aniruddha Joshi from ICICI Securities. Thank you, and over to you sir.

Aniruddha Joshi — Analyst

Yeah, thanks, Michelle. On behalf of ICICI Securities, we welcome you all to Q3 FY23 Results Conference Call of Syrma SGS Limited. We have with us senior management. But before I hand over to them, just in one line, our view is positive on the Company. The Company has done extremely well in the second [Phonetic] results, and we congratulate them for the excellent set of numbers.

Now, I hand over the call to Mr. Nikhil Gupta, Investor Relations, to take it forward. Thanks, and over to you, Mr. Nikhil.

Nikhil Gupta — Investor Relations Contact

Yes, thank you Aniruddha. Very good morning, everyone. A very warm welcome to Syrma SGS Q3 FY23 earnings calls. We have with us today Mr. Sandeep Tandon, our Chairman; Mr. J.S. Gujral, our Managing Director; Mr. Jayesh Doshi, Director; and Mr. Bijay Agrawal, our Chief Financial Officer, to discuss the performance of the Company during the first — sorry, during the quarter three 2023 followed by the detailed question and answers.

During this call, certain statements that will be made are forward-looking, which involve several risks, uncertainties, assumptions and other factors that could cause actual 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 in the course of this call. In this regard, please do review the disclaimer statements in the earnings release and all the factors that can cause a difference.

With this, I now hand over the call to Mr. Sandeep Tandon, our Chairman, for the opening remarks.

Sandeep Tandon — Executive Chairman

Hi, thank you all for joining this call. Like expected, we have been quite — we have quite strong growth in the last quarter — over the last quarter-on-quarter as well as in the preceding quarter. We continue to see demand from all our customers. Of course, there is some slowing on export, but that is more like a mis-balance of numbers not coming through as soon as we were expecting, but that also will — should be starting to trigger very quickly. But because we are so well-diversified across industries, we are able to keep our growth prospects the same despite certain turbulences in certain area that might hit.

We are not used to doing quarter-on-quarter review, so everything looks good as far as our year looks — still continues to be strong. The team has done a fabulous job in bringing up our new facility in Manesar too and in Chennai for the design and development. We continue to double down on our design and development capabilities, where we’ve added new talent this last quarter coming from marquee companies building out more ODM type development with our current and new customers.

We have had very strong audits done by marquee customers throughout our facilities. So, we are expecting new business to roll-in over the next 6 months to 9 months with those customers. Generally, a good quarter. Hats off to the team.

Supply-chain issues have calmed down somewhat, but not fully there. And also, of course, we were predicting a Chinese New Year that comes, so planning materials before that would have made some changes on our inventory levels, but on the — but otherwise very strong performance from the team and very proud of what we’ve achieved year-on year, quarter-on-quarter, over the last — in the last three months.

I’ll over — hand it off to Nikhil now. Thank you.

Nikhil Gupta — Investor Relations Contact

Yes, thank you. Now, I hand over the call to Mr. Gujral, our Managing Director, for the opening commentary.

Jasbir Singh Gujral — Managing Director

Good morning, ladies and gentlemen. It’s a pleasure to host you on the Q3 earnings call of Syrma SGS Technology Ltd. The third quarter has been an exciting and challenging one. Exciting, because we continue to see robust growth in the domestic market and strong inbound inquiries from domestic and multinational customers, both for domestic and exports. Challenging because we face short-term headwinds because of the recessionary conditions in Europe, which impacted our exports. But the long-term story remains intact.

The quarter gone by, we have seen a good performance on almost all parameters and this is a testimony of the robust and resilient business model which our team has been able to craft out over the last years. We have seen growth across almost all segments, barring export and a couple of industry verticals.

The domestic business has done phenomenally well. As of 31st of December, we have an order book of INR2,100 crores which would be executed during FY — during calendar 2023 spilling over to 2024. Now, I’ll was just summarize the key financial parameters before I hand over to Bijay to run you through the detailed financial numbers.

Our consolidated revenue for the quarter ended December 2023 — December 2022 stood at INR524 crores, which is a 73% year-on year rise, EBITDA by 53% to INR60 crores and PBT by 51% to INR45 crores.

On 9-month basis — that was for the quarter, last quarter, on 9-month basis our consolidated revenues grew on expected lines by 55% to INR1,391 crores, EBITDA by 42% to INR151 crores and PBT, 34% to INR111 crores. The growth is primarily led by our continuous efforts on design-led manufacturing and has broadly been across sectors, but led by auto and consumer.

The growth in a few sectors like healthcare and exports has been muted and slow because of the recessionary conditions, inflation in Europe. But we’re very confident on the long-term story and expect this to rebound in the coming quarter or two quarters. Our margins, consolidated PAT is of INR34 crores, which is a 70% growth year-on year.

I now hand over you to Bijay Agrawal to run you — run through the detailed financial number of quarter and the 9 months ended December 2022.

Bijay Kumar Agrawal — Chief Financial Officer

Hi, thank you and good morning everyone. I’ll just quickly take you through the brief financials as explained by our MD. On a consolidated basis, our revenue grew by 73% year-on year for this quarter to INR524 crores. EBITDA for this quarter stood at INR60 crores, a growth of 53% year-on year and despite ongoing global issues. And also, we are able to control some of our cost in this particular EBITDA, that’s where we have been able to show this growth.

Coming to PBT, our PBT for this quarter is INR45 crores with a 51% growth and PAT for this quarter is INR34 crores with a growth of 70%. This quarter, our gross material cost increased by 300 basis points to 73% as a factor of softening into our export health business and also coupled with our growth — significant growth in the consumer segment specifically.

Coming to treasury position as on December-end, we are continuing with a total treasury balance of around INR886 crore as on December end, which includes some bit of short-term investments and mainly the surplus funds from our IPO invested into FDs.

Moving to debt and capex update, debt for this quarter is approximately INR326 crores, which includes INR236 crores of working capital loan and around INR90 crores of term loan. On that basis, my net debt position as on December end is INR560 crores. Coming to capex, we had deployed around INR35 odd crores of capex during this quarter and expecting to incur another INR40 crores to INR60 crores in Q4 of this financial year.

Coming to our overall working capital position, my inventory days has increased to 121 days from 108 last quarter and mainly on account of — we were expecting Chinese New Year in this initial January first two weeks and that’s why we were — on a conservative basis, there were higher inventories which were carried on as on December end mainly.

On receivables side, there is a saving of almost 2 days — 12 days on quarter-on-quarter basis, so my receivables has stood at 62 days as on December end. Same way, trade payables are at around 99 days as on December end. And in totality, my net working capital days are 83 days, 3-day increase over last quarter.

So broadly, that’s the financial summary. I now hand it — hand this over to Nikhil.

Nikhil Gupta — Investor Relations Contact

Yes, thank you. Operator, back to you for the Q&A.

Questions and Answers:

Operator

Thank you very much, sir. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Bhoomika Nair from DAM Capital. Please go ahead.

Bhoomika Nair — DAM Capital — Analyst

Yeah, good morning sir and congratulations on a good revenue number this quarter. I see that consumer segment has done quite well. We’ve seen very strong growth trajectory, both on Y-o-Y basis and Q-o-Q. So, if you can talk about how sustainable is this number, what is the kind of clientele there, you’ve added clients or is it does wallet share gain, etc.?

And also if you can talk about — you did mention in your opening remarks that exports has seen a bit of softness. So, what is exports as a percentage of revenues? Are we seeing an improvement in the inquiry levels, etc.? And then I’ll take on more questions, if there is time.

Jasbir Singh Gujral — Managing Director

Okay. Now, answering your last question, the exports for the 9 months ended December stood at about 34%, which are lower than the corresponding figure of last year. And for the quarter, they put out about 26%. So, there was a significant headwind on the export front. But we are very confident that based on the inputs received from the customers and the inbound inquiries, the long-term export model remains intact and robust. And we expect a rebound to happen in Q1 of 2023, 2024 in the export front also.

Now, as far as your question on the consumer growth business is concerned, this is primarily led by our entry into the fiber-to-home devices under the telecom PLI scheme. And the visibility, which we have received, makes us confident that this is a sustainable — that this will lead to a sustainable growth in this segment in the coming quarters. It’s not a one-off growth but a sustainable growth, and we have also added more technology partners in this segment, which will further broaden the base and de-risk the segment from the vagaries of a particular technology partner going down or a customer going down. So, we are broadening the base on this plant.

Bhoomika Nair — DAM Capital — Analyst

Okay, and thereby, the margins have kind of reduced because of this new client in Asia [Speech Overlap].

Jasbir Singh Gujral — Managing Director

Yeah, [Speech Overlap] as an industry has lower margin, but it has a positive spin-off of higher turnaround which results in velocity of capital and sort of that working capital days come down. So, it is a trade-off, but as industry consumers is more price sensitive than industrial and export and healthcare.

Bhoomika Nair — DAM Capital — Analyst

Sure. Sir, if I may just squeeze in one question on — you know, obviously we have a decent order book. We’re seeing good trajectory going ahead. But any new areas that we are entering, new clients that we’ve bagged in the last quarter or so, if you can just talk about that, that would be really helpful.

Jasbir Singh Gujral — Managing Director

The new areas which we discussed last year also, the growth would be led by the automotive, industrial and consumer. In automotive, the high traction of growth will be in the EV segment. As we speak, we’re very strong end to the mobility, that is the electronics which go into the vehicles. The new segment which is opening up is the charging infrastructure and energy storage infrastructure.

Early days, but we’re having good inquiries, we’re talking to technology providers who can you provide solutions for that. So, that’s one area which we expect that going down the third quarter of this year 2023 the energy charging — the EV charging infrastructure should see traction, which currently is at a very sort of slow momentum, but mobility is very high, which is the electronics which go into the scooter.

Bhoomika Nair — DAM Capital — Analyst

Right, sir, the [Speech Overlap]…

Jasbir Singh Gujral — Managing Director

During the quarter, we have been approved by three or four marquise customers, international customers, and we have come on to their global vendor list. These are into automotive, refrigeration and industrial.

Bhoomika Nair — DAM Capital — Analyst

Got it, sir. I’ll come back in the question queue. Wishing you all the best.

Jasbir Singh Gujral — Managing Director

Thank you.

Operator

Thank you. Ladies and gentlemen, in order to ensure that the management will be able to answer questions from all participants in the conference, please limit your questions to one per participant. Should you have a follow-up question, please rejoin the queue. Thank you. The next question is from the line of Nikunj Gala from Sundaram AMC. Please go ahead.

Nikunj Gala — Sundaram AMC — Analyst

Yeah, good morning, everyone. Sir, my first question is with respect to your material margin which you have mentioned in slide 11 of your presentation, right. Consumer material margin has declined from 45% to 19%. So I understand quarter-on-quarter won’t be the right thing, but what will this number be from 9-month to 9-month, any color you can give us like why is there such a sharp deterioration there?

Jasbir Singh Gujral — Managing Director

You see, the numbers on 9-months I’ll ask Bijay and Nikhil to share with you separately. I don’t have it right away with me. But sort of the contraction in the margin is that the consumer earlier was predominantly ODM, so the ODM component always has a higher margin. And with the plain-play print-to-build consumer kicking in, and that too of high value, the percentage, the ODM to the total bucket of consumer has gone down and hence the contraction in the margin.

Nikunj Gala — Sundaram AMC — Analyst

Okay. So, what was the percentage of ODM earlier and now?

Jasbir Singh Gujral — Managing Director

Bijay, you can answer, okay.

Bijay Kumar Agrawal — Chief Financial Officer

Yes, currently my — for this quarter, ODM percentage is 11% and it was previously 26%.

Nikunj Gala — Sundaram AMC — Analyst

Okay, sure.

Bijay Kumar Agrawal — Chief Financial Officer

That is mainly on account of change in this export business, which was a [Indecipherable] business actually. So, the moment that comes back again it will be…

Nikunj Gala — Sundaram AMC — Analyst

Okay, sure. And what kind of capex we have done in 9 months and hence the — what is the gross block [Phonetic] as of 9-month FY23.

Jasbir Singh Gujral — Managing Director

Bijay will answer that.

Bijay Kumar Agrawal — Chief Financial Officer

So, we have done approximately 35 — so we have done approximately INR35 crores of capex during this last quarter and this is split into multiple different facilities, our north facility and south-based facilities also.

Nikunj Gala — Sundaram AMC — Analyst

The question was like, till 9 months what is total [Indecipherable], like what is the gross block at the end of December 2022?

Bijay Kumar Agrawal — Chief Financial Officer

Against those projects, we have spent almost INR180 crores as of now on and in the upcoming quarter, we are expecting to incur another INR40 crores to INR60 crores.

Nikunj Gala — Sundaram AMC — Analyst

And what is the gross block now?

Bijay Kumar Agrawal — Chief Financial Officer

Gross block currently is approximately INR600 crores.

Nikunj Gala — Sundaram AMC — Analyst

Okay, INR600 crores, okay. And any guidance for FY24 capex if you can?

Bijay Kumar Agrawal — Chief Financial Officer

For FY24, we are estimating we should be — incur somewhere between INR200 crores to INR250 crores of capex.

Nikunj Gala — Sundaram AMC — Analyst

Okay. And currently, like — as on like 9-month basis, what was our utilization levels?

Bijay Kumar Agrawal — Chief Financial Officer

So, we have started two facilities, one is in Manesar, Gurgaon and another was in Chennai. So, the first facility which was initially started, that is growing at a very decent utilization of around 50% plus. And the second one had just recently commissioned, so the utilization levels have to be seen on a run-rate basis going forward.

Nikunj Gala — Sundaram AMC — Analyst

Okay, so this INR600 crores is still at a — like gross block which you mentioned, like still a large chunk is still under-utilized, right?

Jasbir Singh Gujral — Managing Director

Yes, there is lot of room for utilizing the capex cycle, which we have done and it typically takes 3 months to 6 for the set to come to its optimum utilization. So, you’re right when you say that the capital investment done so far is yet to reach its optimum utilization stage.

Nikunj Gala — Sundaram AMC — Analyst

Okay. When we say optimum, it’s like 80% to 90%…

Jasbir Singh Gujral — Managing Director

[Speech Overlap] 80%, 85% — typically we say 80%, 85% is the optimum utilization.

Nikunj Gala — Sundaram AMC — Analyst

Okay. Then in that case, sir, like INR200 crores, INR250 crores we are spending — we will be spending in 024. Then, like is there that capex is any customer-backed or it’s just the anticipation with which we are working with that capex guidance?

Jasbir Singh Gujral — Managing Director

Typically, the capex which we do is split into two, one is the fundamental basic infrastructure, which is the land, building and putting up a facility. And the second is stuffing that infrastructure with the production equipment. While the first one is done once we find that the existing space or if existing facility cannot accommodate more line, the second expenditure is invariably incurred once the current assets reach 80%, 85% of utilization and then we stuffed the — tough in more lines which are dedicated to expected business inquiries from the customers. It’s not done without any visibility of business.

Nikunj Gala — Sundaram AMC — Analyst

Okay, sure sir. And just last question, like since we have so many verticals, import-export, the nature of the contact with the customers varies very differently and hence the asset turns on the incremental CapEx which you put becomes very difficult to guess. So as a very — tongue rule, what is threshold ROC with which you initially put the capex?

Jasbir Singh Gujral — Managing Director

See, we try to get ROC of 25%.

Nikunj Gala — Sundaram AMC — Analyst

25% pretax ROC?

Jasbir Singh Gujral — Managing Director

[Speech Overlap] overall ROCE, but to say that I’ll do this business — [Technical Issues] should give me this, ROCE is very difficult to predict. So on the long-term, we plan and we budget that we endeavor to get 25% growth from the overall business.

Nikunj Gala — Sundaram AMC — Analyst

Sure, sir. And like in that if you can help me like, just breaking down that number in terms of turns and the working capital requirement, that would be helpful, sir.

Bijay Kumar Agrawal — Chief Financial Officer

That varies significantly from project-to-project and new business to — or just like the new business which we have recently added, that is giving us a better turn versus my overall average asset turn currently for this quarter is about 5.6 times. [Speech Overlap] that is something which varies, but yes, what we expect going forward, the new business which we’ll be adding, that should give us a asset turn somewhere between 6 times to 8 times.

Nikunj Gala — Sundaram AMC — Analyst

Okay, sure. Thank you. Thanks a lot for your comments. Thanks for your time.

Operator

Thank you. The next question is from the line of Praveen Sahay from Prabhudas Lilladher. Please go ahead.

Praveen Sahay — Prabhudas Lilladher — Analyst

Yes, thank you for taking my question. The first question is related to your order book. So, can you give some detail on the industry-wise or domestic and export mix in your INR2,100 crores of order book?

Jasbir Singh Gujral — Managing Director

See, out of the INR2,100 crores order book what we have is the one which is executable within 12 months is about INR1,800 crores and the spillover is about INR300 crores. And on the…

Bijay Kumar Agrawal — Chief Financial Officer

And if we talk about export also here, export order book currently stood at around somewhere between 35% to 40% and the balance is domestic order book. Industry-wise also maybe about 40% is like a consumer sector order book and maybe about 20% plus is what the current order book is there on from the auto sector. And then again, around 15%, 16% is like — current order book is there from industrial and about 7%, 8% from MTA [Phonetic] sector.

Praveen Sahay — Prabhudas Lilladher — Analyst

Okay, great. Second question is related to what you had mentioned about the design-led manufacturing driving the core growth. So can you explain that?

Jasbir Singh Gujral — Managing Director

See, in the EMS industry there is one built-to-print, which is the vanilla EMS. The second one is where design component is involved. And we have always been a design-led manufacturing company. And going-forward, we would be strengthening this design team to a bigger extent, so that we can take benefit of the emerging technologies and emerging business opportunities.

So at talent level, senior level, we are strengthening the team. It will be a quarter or so when the full team is in place and the results should kick in thereafter. So, it is a deeper involvement engagement with customers, with the semiconductor industry to design products, meeting the futuristic demand of the [Technical Issues] across verticals.

Praveen Sahay — Prabhudas Lilladher — Analyst

Okay, that’s helpful. So what is our target for the ODM contribution in the coming years?

Jasbir Singh Gujral — Managing Director

We would strive that the ODM contribution should be a healthy 25%, 30% plus — 25% plus on the increased toplines. You see, with the domestic automotive demand and other demand is going up, 25% of the increased turnover, the resultant turnover, we will — we are striving and endeavoring and budgeting to have it from the ODM business.

Praveen Sahay — Prabhudas Lilladher — Analyst

And especially in the consumer segment, you have largely the ODMs?

Jasbir Singh Gujral — Managing Director

No, we have ODM but the ODM in consumer as a percentage of the total consumer sale would be less. Bulk of it is build-to-print, which is the design and product is of the technology provider.

Praveen Sahay — Prabhudas Lilladher — Analyst

Okay, thank you for taking my questions.

Operator

Thank you. The next question is from the line of Dhaval Shah from Girik Capital. Please go ahead.

Dhaval Shah — Girik Capital — Analyst

Yeah, hello team, great set of numbers and good visibility on the margins. Sir, couple of questions, first being the cash balance on the book of INR800 odd crores, next you will be using around INR200 crores, INR250 crores from that plus cash commodity benefiting. How are we going to utilize this money if you can give some understanding on that?

Second question is, given we also have a plant, which is on the PLI, how will these PLI benefits come to us? From where — from which quarter or which year will it start coming in the P&L? And last question will be, what is what is the ROC for the 9 months and third quarter?

Jasbir Singh Gujral — Managing Director

Okay. On the cash and ROCE, I think Bijay will come back to you immediately. I’ll take your question till then on the PLI. On the PLI, we are — already we’ve sort of achieved that threshold capex and turnover limits. So, we are eligible for the PLI and as per the guidelines, we have to file the application after the close of the year, so the PLI application will be filed after 31st of March, 2023.

Now, when we get that PLI we get it in Q1 of 2023, 2024, Q2 of 2023, 2024, it’s dependent on the government, but going by the past trends I think in the first-half year or maybe at worst by Q3 of 2023, 2024, the PLI which accrues to us for the year-ended March 2023 should be with us.

Dhaval Shah — Girik Capital — Analyst

Okay. And broadly, what is the amount?

Jasbir Singh Gujral — Managing Director

Let’s see. There’s still two months remaining. But I think it should be –we are eligible for 5% or 6% of the PLI in telecom and I think we should be crossing the double digits in the PLI.

Bijay Kumar Agrawal — Chief Financial Officer

Now coming to capex thing, against total capex of around INR800 crores, what we are estimating we should be able to use around INR300 crores in next one year towards capex and some capex-related funding can be used thereafter, and about INR100 crores to INR150 crores is what we can use towards working capital and balance is what we have kept as general corporate purpose, which we can use as and when, depending upon the business requirements. So, that’s where we are.

Coming to our ROCE, team ROCE for this quarter, if we deduct the overall surplus unutilized funds of IPO and also the goodwill on the balance sheet, my ROCE for this quarter is 22.4% and for 9 months it will be approximately 21.7%.

Dhaval Shah — Girik Capital — Analyst

Okay, thank you very much.

Operator

Thank you. The next question is from the line of Chirag Lodaya from Valuequest. Please go ahead.

Chirag Lodaya — Valuequest — Analyst

Yeah, thank you for the opportunity. Sir, my first question was, just wanted to understand, is there any seasonality between the quarters for us?

Jasbir Singh Gujral — Managing Director

See, because we are spread across various verticals on — on topline numbers we would not be impacted, but within the industries there is a seasonality and there could be impact on the discretionary spend based on the recession or the inflationary conditions as we are facing in export. But because of the broad base of the verticals which we service, the depression or decline in one vertical is offset by a growth in the other vertical for the topline, but for the variation within verticals does have an impact on the earnings and the profit.

Chirag Lodaya — Valuequest — Analyst

Right. No, but what I’m trying to understand is, generally Q4 is much larger compared to other quarters in this kind of business. So, do we also have that kind of skew or more or less our all quarters are equal?

Jasbir Singh Gujral — Managing Director

So you see, if we were to sort of split the 9 months gone by, quarter one we’re at a run rate of about INR128 crores, INR129 crores per month. Q2, it went up INR148 crores, INR149 crores. Q3 it is INR169 crores — INR168 crores or INR169 crores. So, we expect that it should be around that — sustaining that thing, but since we are not dependent on too much of government orders, the skewing towards the fourth quarter is invariably when you’re dependent too much on the government orders and the grants are lapsing, so you tend to ship out [Indecipherable] in the last quarter.

Since we are not significantly present directly in the government sector sales, we don’t see this skewing happening because of the quarter. The growth would happen because of the long-term growth. Quarter-on-quarter I’m growing, it will be — based on that, quarter-on-quarter I’ll keep growing.

Chirag Lodaya — Valuequest — Analyst

Right, and sir, coming to next year, looking at the current order book, we feel that overall growth rates might not be that encouraging, so I just wanted to get sense what kind of growth we are expecting next year.

Jasbir Singh Gujral — Managing Director

See, we expect to grow in line with the industry and industry is expected to grow at a very strong level. So to say that the orders don’t justify that growth, I think we all — we have INR2,100 crores of orders and financially it’s yet to begin, it’s still almost like 50 days away. So, we’re very confident that the growth momentum and trajectory will be maintained in the coming years.

Chirag Lodaya — Valuequest — Analyst

Right. And on profitability, sir, this current quarter, our profitability was bit muted. It is to do with mix change which we have seen in the overall numbers. Going ahead also, our mix will more or less be same like what we have seen in Q3. So, is it fair to assume, our margins would be in the range of 10%, 10.5% kind of a range?

Jasbir Singh Gujral — Managing Director

Let’s put it this way that the Q3 gone by has seen headwinds in exports and healthcare. We expect a rebound of it to happen in the Q1 of FY23, FY24. So, obviously if the — when the rebound happens, obviously we are very confident the margins would see an uptick. [Technical Issues] optimum utilization of my investments and the operating benefits setting it. I think all these two, three factors will sort of add to the margins of the Company.

Chirag Lodaya — Valuequest — Analyst

Right. So sir, what would be our top 10 client concentration?

Jasbir Singh Gujral — Managing Director

Client concentration would be about I think…

Bijay Kumar Agrawal — Chief Financial Officer

It’s approximately currently 46%.

Jasbir Singh Gujral — Managing Director

46% or 50%.

Chirag Lodaya — Valuequest — Analyst

Right. Okay, sir, thank you and all the best.

Operator

Thank you. The next question is from the line of Sandeep Abhange from Anand Rathi Shares and Stock Brokers. Please go ahead.

Sandeep Abhange — Anand Rathi — Analyst

Hi, can you hear me? Hello?

Operator

Yes.

Jasbir Singh Gujral — Managing Director

Yeah. Yes I questions related to your — the consumer segment overall. Sir, consumer segment, I wanted to know, like apart from the fiber-to-home which you mentioned, what other categories which are… Your voice is not clear. I couldn’t hear the question properly.

Sandeep Abhange — Anand Rathi — Analyst

Hello?

Operator

Mr. Abhange, I would request you to kindly use your handset.

Sandeep Abhange — Anand Rathi — Analyst

Yeah, can you hear me?

Operator

Thank you.

Sandeep Abhange — Anand Rathi — Analyst

Yeah. So I had a question related to the consumer segment. In consumer segment, apart from fiber-to-the-home, what are the other categories which are performing, like we have also come about the — your [Indecipherable]? So are the variables categories also overall and we — and we are seeing a — quite a good shift from China to India, the overall manufacturing facility, so that’s — I wanted some color on the consumer segment.

Jasbir Singh Gujral — Managing Director

So the consumer business broadly is led by the fiber-to-home [Indecipherable] of the variables, as you rightly said. Control for water purification, these are the ODM businesses, control for the energy-saving devices, the brushless DC motors, we have got big traction, and a large order from a leading company in the country for our own design product. So, these three, four categories in the consumer segment would lead the growth.

Sandeep Abhange — Anand Rathi — Analyst

Okay. And — like I wanted some color on the healthcare segment, like as you said that it will come back in the next quarter, so in healthcare overall, what is the breakup like domestic and export? And are you facing any difficulties from China, like have you — are you aware the China has started to recover and they have started dumping medical devices products in — so what is the overall scenario in healthcare space? Are you facing any difficulties, like what are the exact difficulties? Can you put some details on that?

Jasbir Singh Gujral — Managing Director

Okay. See, on the healthcare front, it’s a predominantly export-led business but it’s a little component and domestic, and what we supply is a solution to the customer. So it’s not a commodity which we are supplying, it’s a — at end of the day it results into a commodity but backed by an engineering solution which [Technical Issues] to the customer.

Now, this is facing a bit of a — sort of slow down because of inflation, recessionary conditions and reduction in the discretionary spend of the customers. Now, this healthcare product, what we supply, the solutions which indeed are not lifesaving that it is mandatory for the consumer to spend, these are discretionary spends. And as we are seeing sort of the slowing down of the business in the Western world because of recession, we really don’t see too much of [Technical Issues]. Competition would always be there, but well, being threatened by competition from China or their dumping because it’s not a sort of, what you call, sugar analyzer, or that — what use — pulsometer and all those things, these are solutions which we have provided to the customer — customized solutions.

Sandeep Abhange — Anand Rathi — Analyst

Okay, thank you for the — thank you very much.

Operator

Thank you. The next question is from the line of Varun Mohan Raj from Skaniva Capital [Phonetic]. Please go ahead.

Unidentified Participant — — Analyst

Good morning. Thank you for the opportunity. So in the previous call, we mentioned that we are looking at inorganic expansion, I mean forward expansion into box-build assemblies. So, can you throw some light color on it, like what is our existing business in this box-build assembly section?

And also when we move forward with the inorganic or the organic way into box-build assemblies, will our margins go higher, probably like our peers, which in the mid-teens for their EBITDA? Thank you.

Jasbir Singh Gujral — Managing Director

See, as far as the inorganic thing is concerned, it’s a work in progress currently and we have nothing concrete to share with the industry and the market. We are evaluating continuously, and as and when something would materialize we would come back to you.

The current box-build, as a percentage of my total sales is hovering at about 14%, 15%. Once we go into a box-build depending upon the industry segments which we are go into, it does have a positive rub-off on the margins. But what — much would depend upon the industry vertical where we go in because, for example, if it is appliances, it’s not a significant — there is a very sort of reverse [Phonetic] in margin. We’re not planning to go into them. But would — the margin profile would depend upon the industry vertical where the box-build is applied.

Unidentified Participant — — Analyst

Okay, so can our existing ODM as well as the PCB business is integrated into the box-build or will it be a separate kind of business?

Jasbir Singh Gujral — Managing Director

It is the same facility fungibility line. And typically, what happens is, a, we could get box build right from day one, and, b, is we start out with the PCBA and then gradually migrate up the value chain to end up supplying a box-build product. And that’s been what we’ve been doing for the last N number of years, that when we enter a customer it could be a PCBA, but if that PCBA was to go into a final box-build and not part — form of a big machine or equipment, then we sort of go up the value chain to supply the box-build product.

Unidentified Participant — — Analyst

Okay, thank you. That’s it from my side. Thank you for the opportunity.

Operator

Thank you.

Bijay Kumar Agrawal — Chief Financial Officer

Ma’am, can I just — hello?

Operator

Sure, sir. Please proceed sir.

Bijay Kumar Agrawal — Chief Financial Officer

I just want to answer on the question which — the follow-up answer.

Operator

Sure, sir, please continue.

Bijay Kumar Agrawal — Chief Financial Officer

In the inorganic, as you had asked, yes, we are looking at inorganic things, as Mr. Gujral said and it’s a little early. But whatever inorganic we’ll do, it will definitely increase the margin. That’s how we are targeting inorganic.

And in terms of the order book on the earlier question which was asked, if you see, earlier the order book was about INR1,700 crores, which is now INR2,100 crores. So, not only the actual order to conversion is happening at a faster pace, also the order book keeps on increasing. So, you cannot look at in isolation the order book, that INR2,100 crores will not get us into the kind of growth which we are looking at. Thank you.

Operator

Thank you, sir. The next question is from the line of Nishant Sharma from Nuvama Wealth Management. Please go ahead.

Nishant Sharma — Nuvama Wealth Management — Analyst

Thank you for the opportunity and congratulations for good set of numbers, sir. Two questions from my side. One question is related to margin on the ODM and OEM business. What — if you can throw some light like what would be the differential margin between ODM and OEM, that would be great.

And second question would be around the status of the PLI, so if I’m not wrong we have two PLI, one is in the telecom segment where we have scaled it up very well; and other is on the white goods space. If you can throw some status, some guidelines on what would be the threshold in terms of capex. And in terms of revenue and incentive percentage that would be helpful. Thank you.

Jasbir Singh Gujral — Managing Director

Okay, on the PLI part, I’ll take the second question first. As I already confirmed that we have crossed the threshold limit for capex and turnovers in the telecom PLI, and we are well on our budgeted figure numbers which we had planned at the start of the year and what we [Technical Issues] the government.

On the air-conditioning or white goods PLI, unfortunately, we have not started off the capex cycle. The capex cycle is 10 years, per year INR50 crores over a period of 5 years and resultant turnover for I think five 5 times capex is the turnover which we have to do.

We are supplying air-conditioning control board for some companies, but the quantities are not large. Our old design boards have been supplied to a couple of customers and they are still under validation. The investment cycle for this PLI would kick in only when the ODM Board gets approved. That’s as of date. However, if we were to get a quantum jump in the air-conditioning business on built-to print, which means the design of our customer or a technology provider, then the capex cycle would be set in. But as of date, it is on sort of a slow trajectory.

Now, on the first question which you said, the delta between ODM and EMS, well, it is superior in ODM. And what superior number it is would again depend upon the vertical which we supply to.

Nishant Sharma — Nuvama Wealth Management — Analyst

Understood, sir. So basically, I was looking at that because the consumer segment, which is a low margin, would be scaling up much faster and would have a share of like 50% the consumer segment. So, will there be any scope of like 100 basis point to 150 basis point kind of a jump in the EBITDA margin going forward, is that a possibility? So I was just looking at from that perspective.

And on the PLI side, just to reconfirm, for air conditioning it’s INR50 crores over the period of 10 years? No, INR50 crores over a period of 5 years, capex INR10 crores per year. Okay, understood. And telecom, it is INR20 crores per year.

Bijay Kumar Agrawal — Chief Financial Officer

Approximately.

Jasbir Singh Gujral — Managing Director

Approximately. The threshold limit is INR20 crores, you could spend more. In telecom the threshold limit is INR10 crores.

Nishant Sharma — Nuvama Wealth Management — Analyst

Okay. So for this year, we have spent INR20 crores on the telecom side and we are on that same trajectory going forward also?

Jasbir Singh Gujral — Managing Director

Yes, please. And [Speech Overlap] 50% of our turnover that — I think that is not correct. We don’t see consumer forming 50% of our turnover.

Nishant Sharma — Nuvama Wealth Management — Analyst

So, current order book 40% is consumer, right, the INR2,100 crores breakup which you have mentioned? Approximately 35% to 40% is there of the order book, so it will be in that range only, total consumer business, 35% to 40%. Okay, understood. I’ll fall back in queue. Thank you.

Operator

Thank you. The next question is from the line of Dhananjay Bagrodia from ASK Asset and Wealth Management. Please go ahead.

Dhananjay Bagrodia — ASK Asset and Wealth Management — Analyst

Sir, congratulations on a good set of numbers. But this is a question in relation to a previous answer. When you mentioned that healthcare, for example, is more solution-based, sir, just to understand little more about — does it mean that there is some part of this business, which is revenue accretive regardless of any orders? Is it sticky or does it move in tandem with orders? How does this part work when it’s a solution base to a client?

Jasbir Singh Gujral — Managing Director

See, when it is a healthcare business which we are into, it’s essentially a solutions-based product which you’ve supplied to a customer and that customer is seeing a slowdown in demand because it goes on into the Western world. It’s not for the developing countries or this part of the world. So because of the inflation uncertainty, because of the Ukraine war, the energy crisis in the West and inflation which this generation of West, whether America or Western Europe, has never seen in their life, an inflation rate of 7% to 10%, so their discretionary spend has taken a big hit, a big knock and hence the slowdown in the products which we supply to our customers, they are more, not lifesaving as I said earlier, they’re more lifestyle and healthcare products which go into the thing. Hence, this is facing a headwind. And as I shared earlier, I think by Q1 of next year we expect a rebound to start kicking in and expect to attain over previous levels going forward.

Dhananjay Bagrodia — ASK Asset and Wealth Management — Analyst

Sure. Sir, I understand that. I meant, like how does it work in terms of solution base, does it move in tandem with the order placed or is there some part of it which is sticky and you get revenue for that regardless of how much…

Jasbir Singh Gujral — Managing Director

[Speech Overlap] we have developed a solution, if it has a life of 10 years or 5 years, so the product — it depends on the product life cycle. So once we’ve provided a solution, the orders will keep kicking in till a new product is developed. And once we’re with a customer and if we’ve serviced the customer well, and we have done that over the last 4 years, 5 years, 6 years, so it’s but natural that any new development of a product which comes in from the customer, we would have a head-start and we would be the preferred choice for the customer because we have serviced that customer very well over the last 4 years, 5 years, 6 years, 7 years, 10 years. So, that could be adding to the portfolio of the product or a replacement of the existing product.

Dhananjay Bagrodia — ASK Asset and Wealth Management — Analyst

Okay, sure. Sir, I know this might be tougher, but is there any part of your business which we could like, let’s say, consider — let’s say, there is a global slowdown all your segments, is there some part of your business which you could say is like sticky, which will — you see a minimum revenue regardless of how much slowdown, let’s say, happens. Right now, we’re seeing auto industrial doing really well in consumer, but some durable companies are saying that they are starting to see slowdown. Would there be any part of our business which we could see sticky?

Jasbir Singh Gujral — Managing Director

See, the stickiness of the customers is evident that we have customers who have been with us for 30 years, 20 years, 15 years. And we are growing with the customers, the wallet share is growing with the customers. Now, in the very unlikely situation of a global recession like 1930s, well, then it’s macro-level thing which will affect everyone and it depends how much less we can be affected by it. But to say that we’ll not be affected by global recession, unlikely, though, if it was to set in, I think would not be correct. But based on over broad profile of products and regions, geographies, we believe that we are well-placed to face any such headwinds.

The fact that despite exports and Europe and America slowing down, we have still been able to grow at 50% odd for the 9 months and 73% for quarter on is a testimony of the robust business model which we have in place.

Dhananjay Bagrodia — ASK Asset and Wealth Management — Analyst

Sure. And sir, lastly on your last part — last question, if I may squeeze in, PCBA, sir, what’s the — what could help us leapfrog in terms of making PCBA a much larger portion of our revenue? And how are we going about that?

Jasbir Singh Gujral — Managing Director

See, PCBA still the accounts for about I think 70% odd of our revenue.

Dhananjay Bagrodia — ASK Asset and Wealth Management — Analyst

Okay. So in terms of — let’s say, us versus the consumer business — PCBA for consumer, different types of industries, in consumer, obviously PCBA would be lower margins, but for that to — is there any way that we could see that in terms of margin increase if we do anything more value-add or does that affix across the board?

Jasbir Singh Gujral — Managing Director

See, we have our industrial, we have our business model set in and things. We will be concentrating on different industry verticals, and we will not be skewed towards a particular vertical, whether it’s automotive, whether it is consumer. We would like to have a healthy mix of all the verticals. Now, if consumer — if you are referring to, say, mobile phone, well, but that’s a separate thing. And as of today — I’m not saying that it’s no-go forever or it is — as of date, we have not at all sort of — we’re not evaluating going into that segment, because there are good players in that line and we don’t see that we’ll be able to give any value-add. See, our unique selling — unique proposition which we offer to the customers will give them a value-add. If I have also one of the manufacturers of a particular thing, then, well, that’s not our DNA.

Dhananjay Bagrodia — ASK Asset and Wealth Management — Analyst

Okay, sure. Thank you.

Operator

Thank you. The next question is from the line of Smitesh Sheth from Raedan Securities. Please go ahead. Mr. Sheth…

Smitesh Sheth — Raedan Securities — Analyst

Hello?

Operator

Yes, sir, proceed.

Smitesh Sheth — Raedan Securities — Analyst

Yeah. Hello. Sir, just now in the opening remarks you have mentioned there were audits conducted by some of the marquee customer. So which segment they are into and how much time does it take from audit to an order finalization or a placement stage?

Jasbir Singh Gujral — Managing Director

Okay. Now, the segments where we have been audited by our IT, telecom, automotive, industrial; industrial is again a broad-spectrum, it could be renewable power, it could be refrigeration, it could be anything. Now, so it is across the industry vertical. Typically, from the time when a audit is conducted and should the business materialize, it is cycle of 12 months to 18 months for volume production to kick in. So whatever orders have been done in Q3 of FY22, FY23, that is up to December, the business of this would come only towards the end of FY23 or financial year 2024, 2025. So, whatever orders were done in 2022, the business has started kicking in now. So, this is an ongoing process. When the new customers come in, it takes 12 months to 18 months for volume production to start.

Smitesh Sheth — Raedan Securities — Analyst

Okay sir, thanks a lot.

Operator

Thank you. The next question is from the line of Suraj Nawandhar from Sampada Investments. Please go ahead.

Suraj Nawandhar — Sampada Investments — Analyst

Hello, good morning, sir. I joined the call a bit late, so the question might be repetitive, but I see exports revenue has fallen to 26% of our revenue from operations. Sir, do we expect it to stay at lower levels or do we expect to bounce it back to around like [Speech Overlap]…

Jasbir Singh Gujral — Managing Director

Sorry, what you said, exports?

Suraj Nawandhar — Sampada Investments — Analyst

Exports revenue had fallen to 26% [Speech Overlap].

Jasbir Singh Gujral — Managing Director

Yeah. See, exports revenue has fallen to 28%, that’s what I shared in the opening remarks, and we are very confident that it will rebound, kick back, in Q1 of 2023, 2024 and then gain traction and momentum thereafter. And we expect that next year we should be back to whatever percentages we — which is about 30%, 32% earlier. If everything goes as it is and if there are no surprises across the world, then the exports should rebound and will rebound.

Suraj Nawandhar — Sampada Investments — Analyst

Sir, currently, if we look at the rest of the world situation, it looks — they’re going into a recession and a slowdown, and India in all of that looks a very bright spot. So why don’t we — why are we not focusing more on India? Do we get better margins from exports?

Jasbir Singh Gujral — Managing Director

No, you see, India, we are — the growth — and that’s what we said in the beginning, the growth in the current thing has only come in from the domestic demand. So, it’s not that we are looking at export versus India, it is exports plus India. And we are geared up to cater to both the market. So, it’s not that we are sacrificing growth in India. We are bullish and we are very aggressive on achieving a greater market share for the verticals industry products which we are in. So, India would continue to be one of our prime focus areas. I think it’s a wrong perception. India is one of our prime, what you call, focus areas, but it’s not domestic versus exports, it is domestic plus exports.

Suraj Nawandhar — Sampada Investments — Analyst

Right. And sir, let’s say, if at all, in case the global markets doesn’t rebound as we have expected, so we should be able to fulfill that void with Indian business, right?

Jasbir Singh Gujral — Managing Director

Yes, you see, again despite export coming down we have still achieved what we had set out at the beginning of the year. And based on the inquiries and the imports and the dialog with the international customer, it’s only a question of time, maybe 1 quarter, 2 quarters before the export traction gained momentum and comes back to its original form.

Suraj Nawandhar — Sampada Investments — Analyst

And sir, do we get any better margins in next year or is that at the same level as domestic business?

Jasbir Singh Gujral — Managing Director

You see, exports has two advantages. One, it provides us a natural currency hedge because electronics, you have all 60% of the cost of materials is imported. And second, yes, export does have a better margin.

Suraj Nawandhar — Sampada Investments — Analyst

Okay. And sir, how is the semiconductor issue right now? Do we have a very smooth — how is the semiconductor issues right now? Do we have a very smooth supplier or there are still some problems?

Jasbir Singh Gujral — Managing Director

See, passive components have eased out, but microcontrollers continue to be a challenge area because passive components, at least it has a wider manufacturing base whereas the microcontrollers and the active component have a smaller manufacturing base, there would be a handful or two handfuls of companies making all those things. And bulk of the semicon is being done by Taiwan Semiconductors and Samsung. They control about 85%, 87% of the market share of semiconductors. So, easing in the passive components, but challenges remain in the microcontroller and active components.

Suraj Nawandhar — Sampada Investments — Analyst

And sir, till when do you expect this to normalize or is it difficult to say?

Jasbir Singh Gujral — Managing Director

It’s difficult to say, it’s very difficult to say, but with the way the passive components have eased, we believed last year that it would be easing out by maybe middle of this year. Maybe another two quarters from here, it should ease out. But that only necessitates long-term planning. The growth has come despite the shortages.

Suraj Nawandhar — Sampada Investments — Analyst

Right. And sir, how is the freight cost behaving now?

Jasbir Singh Gujral — Managing Director

It has slightly softened. The container availability has also eased out a bit and the freight costs have also eased out a bit. They were not what they were middle of last year or third quarter of last year.

Suraj Nawandhar — Sampada Investments — Analyst

All right, thank you sir. Thank you for your time and all the best.

Operator

Thank you. The next question is from the line of Saurabh Mehta from East Lane Capital. Please go ahead.

Saurabh Mehta — East Lane Capital — Analyst

Yeah. Hi sir, thanks for this opportunity. Sir, I’d would like to just understand the box-build better, like what is our current revenue mix from the box-build and do we see it reaching [Phonetic] in the coming years?

And also, I want to understand our manufacturing capability in terms of box-build, like are we vertically-integrated or do we plan to be — given it’s not our key strength, so we want to depend on outsourcing for this? And does it — like in terms of box-build versus a plain PCB, is there a big differential in terms of margins, because what I see is our key competitors, they have a mix of over 30% box-build and they make margins at 14%, 15%. So, just would like to get your perspective on this business.

Jasbir Singh Gujral — Managing Director

No, box-build as a percentage of our total sales is about 14% — 14%, 15%. On the capabilities, we have full capabilities for the box-build. When I say full capabilities, it may not be a note [Phonetic], but we have got long-term contracts, dedicated vendors for sheet metal and plastic, which go in for box-build.

Putting up a plastic molding line with the tool room is not a big deal, but the volumes have to justify the investment over there and the management bandwidth which it’ll take. But we have got dedicated vendors with whom we have been working for the last decade, two decades, and we have had no — faced no issues that because of lack of — in those facilities, the business is suffering. Should that be the situation, we would evaluate and go in for the backward integration. But currently, since we are not facing any challenges because of that, we would continue to work out on this model [Phonetic]. Now, box-build versus PCBA, the volume — value goes up and slightly the margins in absolute terms also go up. Hello?

Saurabh Mehta — East Lane Capital — Analyst

Yeah, so basically you’re saying, box-build would definitely — there’ll be better margins in that business.

Jasbir Singh Gujral — Managing Director

Yeah, and it has superior margin than a vanilla PCP because once we make a box-build, then it doesn’t go into the factory of the customer, it goes directly to the warehouse of the customer and to the ultimate consumer. So obviously, what the customer is doing at his end we are doing at our end. And if there is a differential cost strategy, it does result into a superior margin.

Saurabh Mehta — East Lane Capital — Analyst

Got it. And sir, in terms of box-build, what we do currently like, 15%, 16%, what other kind of products are we doing? Are we doing more high-end products or are we doing more consumer products? And I also would like…

Jasbir Singh Gujral — Managing Director

We are primarily doing industrial products where would be the power supplies which are going in for data centers or what you see at the airports and all those things, the door openers. We do point of sale printers, which is again an industrial or a consumer application. It’s not the normal printer, which we install in the house. They are a bit more sophisticated fiscal printers, which are having lot of software in it based on the vast structure of the country where they exported. So, these are the two sets which we currently do. One is the power supplies and one is the — some controllers we do which are box-build and the point-of-sale printers are box-build.

Saurabh Mehta — East Lane Capital — Analyst

Right. And sir, probably repeating my earlier question, but is there any reason why there should be such a big differential in terms of margins between us and competition, given we are almost serving similar kind of, similar work, probably their box-build is probably slightly higher, but is there any reason for such a big gap in terms of the margin profile?

Jasbir Singh Gujral — Managing Director

I can speak for myself, honestly. We are in the business and we are in the marketplace and we know what prices are available, so we stand by the numbers which we have shared. I really cannot comment. I’m not competent to comment on the numbers of anyone else.

Saurabh Mehta — East Lane Capital — Analyst

Right, sir. Sir, but given in the call previously, you mentioned about increasing your capacity utilization and efficiency, we can also reach double-digits like at least 12%, 13% kind of margins in, say, in the coming year, right?

Jasbir Singh Gujral — Managing Director

What we have been maintaining all through is that we’ll be at double-digit, lower double-digit margins on a sustained, long-term basis. Short-term because of the capital which has been set in, because of front-loading of the expenses to make the organization future-ready, there could be certain sort of a depression in the margins. But we continue to believe that on a long-term sustained basis we should be at lower double-digit margins.

Saurabh Mehta — East Lane Capital — Analyst

Got it. Sir, last question from my side is on the clean energy space. Are we doing — like are we under discussion or already doing something on the hydrogen space, solar space, for some US clients, like are we already under discussion or are already doing something for them, doing some technical — like more complicated box-build products?

Jasbir Singh Gujral — Managing Director

We are already supplying controllers to renewable energy a company. They’re all export-oriented. And as I shared in the — my opening remarks that electric charging infrastructure and energy storage, these are two upcoming cycles, sort of verticals, which we believe will see a lot of action going forward, maybe not a year from now, maybe 2 years to 3 years from now, energy storage would be one of the biggest growth drivers in this sector. And we are currently evaluating and in discussion. Early days, we’ll share if some — we get some breakthrough.

On energy part, energy conservation and energy efficiency would be another thing, because of the green goals which the Government of India has set in. And we are well placed in that with our own design on controllers for brushless DC motors to the fans and migrating it to other applications.

Saurabh Mehta — East Lane Capital — Analyst

Got it. Thanks a lot, sir. Thanks. This is very useful. Thank you.

Operator

Thank you. The next question is from the line of Chirag Lodaya from Valuequest. Please go ahead.

Chirag Lodaya — Valuequest — Analyst

Yes sir, just one clarification. You mentioned our order book is at around INR2,100 crores and 35% of the order book would be export and around 65% would be domestic, is that fair understanding?

Jasbir Singh Gujral — Managing Director

Yes, please. Broadly, yes.

Chirag Lodaya — Valuequest — Analyst

So sir, on this basis if we see, domestic revenue which we would have achieved, we are almost no on that run rate, so how to look at the overall numbers? Basically, I’m just trying to understand what kind of growth we might achieve in domestic because domestic this year has been exceptional and current run rate is also pretty high?

Jasbir Singh Gujral — Managing Director

We are very bullish on the growth of the domestic business fueled by sectors across vertical led by automotive and consumer and other. Long term, our objective and our target is to be in the 30% plus range for exports going forward, on a long-term sustained basis. Quarter-on-quarter, there could be dips because, you see, we don’t of play quarter-on-quarter, we are more focused on building an organization, which is sustainable, scalable and profitable over the long-run. So, these are the three parameters which we work on, a sustained growth, scalable growth with profits.

Short-term, hiccups would be there. It’s a business environment. So, we are — while we are cognizant of this fact, we not too much worried on the quarter-on-quarter basis, as long as our focus on the long-term building a model which can withstand the long-term vagaries of business cycles, that’s our endeavor.

Bijay Kumar Agrawal — Chief Financial Officer

Also just to add, this order book which we are discussing, that is something which is to be fulfilled in next few months, next quarters or majority part of it in a way. So, it’s not like in the next full years, estimated volumes, something like that, a majority part of it has to be fulfilled in early next few months and quarters.

Chirag Lodaya — Valuequest — Analyst

No, you mentioned that INR1,800 crores is the order book, which has been executable over next 12 months, right? So on that basis…

Jasbir Singh Gujral — Managing Director

That’s right.

Bijay Kumar Agrawal — Chief Financial Officer

That is depending upon the total orders of this thing, but again, that’s just outer deadline of few of the orders in that thing. A majority of those order book has to be fulfilled in next two quarters also.

Jasbir Singh Gujral — Managing Director

See, just to add-on, last quarter we had an order book called INR1,700 crores. Last quarter, we did about INR524 crores. So, if INR1,700 crores minus INR500 crores, just for the sake of rounding off, it’s INR1,200 crores, and INR1,200 crores to INR2,100 crores [Phonetic], so INR900 crores is the fresh intake. So that — as Mr. Jayesh Doshi had stressed very correctly the finer thing, that despite the higher run rate of execution, order book has increased by almost like 25%, INR1,700 crores to 21% is almost like 21% to 20%, 25% [Phonetic]. So. We are very bullish on the entire stake.

Chirag Lodaya — Valuequest — Analyst

Got it, clear sir. And on some export, are we adding any new client, et cetera, or this is existing client we’ll see rebound in growth?

Jasbir Singh Gujral — Managing Director

Both exports of both new clients and existing clients. In existing clients, it would mean sort of expanding the portfolio of offerings for them.

Chirag Lodaya — Valuequest — Analyst

Right. And just lastly, 9-month FY22, if you can give us export share, so this 9-month is 34% versus what could be last year?

Jasbir Singh Gujral — Managing Director

Last year it was about 46%.

Chirag Lodaya — Valuequest — Analyst

Okay, thank you sir.

Operator

Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. J.S. Gujral, Managing Director, for closing comments. Over to you, sir.

Jasbir Singh Gujral — Managing Director

Thank you. Thank you, ladies and gentlemen, for participating in this Q3 earnings call. I would just like to conclude that we as management are focused on building — I just said in my earlier comments a short while back, on building a sustainable, scalable, profitable organization which can withstand the vagaries of business cycles. Quarter-on-quarter is critical, but we are more focused on the long-term. And we are building our capacities, building our management team, that we have a professionally run ethical company which serves not only the business stakeholders but also to society so that all our skills are also focused on making the world a better place by energy conservation, green technologies and a;; those things.

So, we are bullish on the long-term sort of growth story, not only a whole Company but also of the country. We believe we have now reached the threshold, the cusp where we can see accelerated growth in the quarters and years going forward. We would endeavor to be the preferred EMS partner for anyone who wants to look at EMS as a service in India. Thank you very much.

Operator

[Operator Closing Remarks]

Bijay Kumar Agrawal — Chief Financial Officer

Thank you.