Tara Chand Infralogistic Solutions Ltd (NSE: TARACHAND) Q3 2025 Earnings Call dated Jan. 28, 2025
Corporate Participants:
Vinita Pandya — Investor Relations
Himanshu Aggarwal — Chief Financial Officer
Analysts:
Rohan Mehta — Analyst
Bhavya Sonawala — Analyst
Unidentified Participant
Manan Vandur — Analyst
Ronil Dalal — Analyst
Ankur Kumar — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Tara Chand Infralogistic Solutions Ltd Q3 and 9M FY25 earnings conference call. 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 Ms. Vinita from Stellar Investor Relations. Thank you. And over to you Ma’am.
Vinita Pandya — Investor Relations
Thank you. Vain Good afternoon everyone and thank you for joining us today. We welcome you all to Tara Chand Infralogistic Solutions Ltd Q3 and 9 month FY25 earnings conference call. We have with us today the senior management team of Tara Chand Infralogistic Solutions Ltd full time Director and cfo. We shall be sharing the key operating and financial highlights for the third quarter and nine months ended December 31, 2024.
Before we begin, I would like to state that this call may contain some of the forward looking statements which are completely based upon our beliefs, opinions and expectations. As of today, these statements are not a guarantee of our future performance and involve unforeseen risks and uncertainties. The company also undertakes no obligation to update any forward looking statements to reflect developments that occur after the statement is made. Documents relating to the company’s financial performance including the investor presentation have been uploaded on the stock exchanges and the company’s website.
I now invite Mr. Himanshu Gurwal to share his initial remarks on the Company’s performance and then we will open the floor for Q and A. Thank you and over to you Himanshu.
Himanshu Aggarwal — Chief Financial Officer
Thank you for the introduction, Vinita. Good afternoon ladies and gentlemen. I, Himanshu Agarwal, the whole time Director and CFO of Tarachan Infra Logistics Solutions Ltd. Welcome you and thank you to be a part of the earnings call for quarter and nine months ended 31st December 2024.
I hope that you all have had the opportunity to look at the presentation that was posted on the NSE and Company websites yesterday. The financial year 2025 has been a year of milestones for the company with the first one being achieved on April 16, 2024 when the company migrated to the NSE main board. I understand that some of you might be new to our company, so to start with I would like to give you a brief about what our company does.
Our company operates across the length and breadth of India through its three key segments of verticals. Segment A which is called Equipment rentals and infrastructure works, it currently contributes about 55% of the overall revenue. Segment B, which is warehousing, handling and transportation, it contributes about 40% of the overall revenue.
And segment C is steel processing and distribution which contributes about 55% of the revenue mix in the equipment rental segment. Our company serves India’s infrastructure development and industrial capacity expansion needs from through a vast fleet of cranes, piling rigs, aerial working platforms, also known as man lifts and trailers. The largest crane in the company’s fleet is of 800 tons lifting capacity, while there are 106 cranes in total with lifting capacities ranging from 50 metric tons up to 800 metric tons.
Additionally, there are hydraulic piling rigs which are used for ground improvement and foundation works in the civil construction domain. And we’ve got aerial working platforms that are used for working at heights above 30 meters. In the financial year 2024, we have introduced the tallest aerial working platform in India at that time with a working height of 68 meters.
And the same remains deployed for a critical steel plant expansion project. On a long term basis, the company has been active in the construction of large metros, the metro rail network that spans across the country. We’ve been a very active participant and played a very important role in the construction of the first ever in the ongoing construction of the first ever bullet train of the country, which is also known as the Mumbai Ahmedabad high speed rail project.
Apart from that, in our industrial capacity expansions, we’re actively working with the cement, steel, oil and gas in refineries as well as the power sector industries. The company has in this financial year also entered the renewable energy sector and we are working in both solar and wind energy domains. In the urban infra or rural infra development.
We’re also actively working with NHAI and other such agencies for development of large network of highways and such infra across the country encompassing states like Jammu and Kashmir in the north, Gujarat in the west and then east. We’ve got Assam in West Bengal. In our segment B, we are providing warehousing and logistics solutions specifically for the steel sector. The warehousing activity is primarily executed for PSU companies like Steel Authority of India Ltd. And Rashid Spartan Ltd. Where the stockyards are either owned by the client or owned by us.
The company has a vast experience of more than four decades for steel handling projects where we are involved in handling of more than 10 million tons of steel per annum. The third segment, steel processing and distribution, is a relatively small segment with lower margins. Here the company processes steel for its end user clients from third party sources and this segment is there more so from a customer stickability perspective only.
We have a very diverse team of domain experts, operators, engineers and technicians who are spread across 21 states in the country. Our total team strength is upwards of 700 people and at present the company is working across 74 sites in the country. On the financial results for Q3 and nine months ended December 2024, I’ll just share a few highlights.
Again, this has been a milestone period for the company in which we have recorded our highest ever quarterly and half yearly revenues and also the highest ever Q3 and half yearly profits. In Q3 FY25 we achieved our highest ever quarterly revenue of 64.2 crores, making a 45% year on year increase with an EBITDA of 20.8 crores and an EBITDA margin of 32.4%. Our profit after tax of 5.2 crore was a 56% year on year growth culminating in an EPS of 0.7 rupees per share which is again a 65% year on year growth. The cash profit after tax stood at 17.2 crores which marks 49% year on year growth.
For the nine months ended FY25, December 2024 our revenue reached 166.2 crores which is a 34% year on year growth with EBITDA at 58.5 crores which was again a 42% year on year growth and a margin of 34% in the EBITDA. Notably, our profit after tax grew to 17 crores which is actually slightly higher than the total profit for the last financial year. So this saw a 73% year on year growth while the EPS soared to 2.2 rupees per share which is a 69% year on year increase.
The cash profit subsequently climbed to 47.27 crores which is a 42% year on year growth as well. Another financial control measure that we have taken which has helped us to bring down our receivable days which has come down to 79 days for the nine month period compared to 101 days in the previous year.
This reflects a significant improvement in our cash flow cycles. We have a very healthy Excuse me, we have a very healthy order book of 73.30 crores as of January 2025 which is executable in the current financial year itself and this again reflects a 67% year on year growth.
In the order book for the nine months our equipment dental segment registered A high growth of 69% at 91.80 crores in revenue and recorded an overall EBITDA of 49%. It is important to note that a revenue of 10.9 crores with an EBITDA margin of 19% from specialized services contract is also included in this segment revenue figures. So the EBITDA margin from equipment rentals was stood at 53.8% for the nine months ended December 24.
Among the major sectors served by us in the equipment rental segment, the rural and urban infra sector contributed 40% of the revenue while cement was at 30% followed by steel at 21%. As stated earlier, we ventured in the renewable energy sector in this FY and it has contributed 5% to the revenue mix for this segment. Our warehousing and transportation segment registered just a marginal 8% increase in revenue at 65.6
Crores due to the one off decline registered in Q1 FY25. This segment registered an EBITDA margin of 15% for the nine months ended December 24th. The revenue for our third segment which is Steel Processing and Distribution declined by 17% for the nine months and it stood at 8.8 crores. There was no revenue recorded for Q3 in this segment. The EBITDA margin for this segment for the nine months stood at 4%.
In the equipment rental segment, the average gross monthly rental Yield rose to 3.05% rising from 2.75% in the same period last year. This has been primarily due to the meticulous capex undertaken by the company in the previous and ongoing FYs. In the current year, the company has already completed a capex of 132.7 crores which is the highest ever in the company’s history.
With this capex, the company has now added 30 cranes, 5 aerial working platforms and 20 prime movers with trailers to its fleet. The total fleet size of the company now stands at 362 machines against 307 machines in the same period last year. The gross block of the company has grown to almost 408 crores as of December 24th against 298 crores as of 31st March 2024. The debt to equity ratio of the company for the Fed period is at 0.91 compared to 1.08 for the same period last year.
The positive impact of the capex that has been done is expected to further boost the Q4 performance of the company as a large chunk of the addition that took place in Q3 was done in the second half of the month of December 2024. To conclude, I would say that these tenor results reflect our relentless focus on growth, strategic investments and flawless execution. We have surpassed our targeted 30% year on year growth in our revenue for the financial year.
And we are confident of continuing this trend in Q4FY25, which is traditionally the best quarter for the company. Thank you for your continued trust and support as we move ahead together. We strongly believe that the future looks bright and we are just getting started.
So thank you. And with that, I hand it back for the Q and A session. Thank you.
Questions and Answers:
Operator
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 while the question queue assembles. Ladies and gentlemen, if you wish to ask a question, please press star and 1. The first question comes from the line of Rohan Mehta from Ficom Family office. Please go ahead.
Rohan Mehta
Hi, am I audible?
Operator
Yes, Rohan. Please go ahead.
Rohan Mehta
Yeah, so my first question is, could you provide me the net yield for segment A, the current quarter Q3, Q2, Q3 FY25 and also Q3 FY25.
Himanshu Aggarwal
Okay, so thank you for the question, Rohan. So for Q3FY25, the gross yield was 2.98 and gross yield for Q3FY24 was 2.75. On a net yield basis, it was about 1.9% in QY FY24 and in Q3FY25, it would be around 2.1%.
Rohan Mehta
Okay. Okay. And also, can you provide me more details about the specialized service contracts? No. Basically, in terms of the nature of work, how differentiated it is from the regular EPC contract? Just wanted to understand the nuances?
Himanshu Aggarwal
Right. So a regular EPC contract is a combination of a lot of things and it has a much larger scale. So basically, this is a smaller chunk of a large EPC contract with specialized services with regards to either specific manpower services or machinery is involved, which is to give the necessary result for the overall larger contract or the larger work that is being done. The specificities of the nature of work, I will not be able to divulge much of that because that is again, more of an internal matter.
Rohan Mehta
Got it, got it, got it. And I’ve noticed that EBITDA margins for segment A is declined from about 50% to 44%. Now I do understand that this includes these specialized service contracts. So I wanted to know what will be the steady state margin expectation you have in this segment moving forward.
Himanshu Aggarwal
So going forward like we are also getting certain contracts which as of today also if you talk about 73 crore order books, there is a mix of equipment rental warehousing as well as specialized service contracts. So for this specific segment, the 44 to 46% combined revenue EBITDA margin wherein the specialized service is also included is a steady state scenario in the near future. And as far as independently the equipment rental is concerned, there we do see it ranging between 53 to 50.
Rohan Mehta
Got it, got it. And one final question. How do you see the current macro environment in terms of the crane rental business? Are you seeing any slowdown or any demand issues at the moment?
Himanshu Aggarwal
At present we are not seeing any challenges and also with the demand that we have in the coming, in the present quarter and the visibility that we are getting from our clients in the coming quarter, we haven’t seen a slowdown in the demand because of the nature of work that we do, the mix of equipment that we have, there is still sufficient demand in the market and there is a lot of activity and a lot of activity has picked up in the last couple of months or so as well because there were some slowdowns in the first quarter because of elections and then monsoons were there. But activity has subsequently picked up at least as far as the services we are provided to give. So that is nowhere. We are seeing that any specific slowdown is impacting our equipment rental division.
Rohan Mehta
Got it. That’s all from my side. Thank you so much.
Himanshu Aggarwal
Thank you.
Operator
Thank you. The next question comes from the line of Bhavya Sonawala from Samaasa Capital. Please go ahead.
Bhavya Sonawala
Hi. Thank you. Am I audible?
Himanshu Aggarwal
Yes, you are.
Bhavya Sonawala
Yeah. Questions on numbers I have a couple of questions. My first question is similar to the previous participant in terms of share from the rural and urban infrastructure has kind of been decreasing and even though the cement and the renewable sector has shown some decent contribution, particularly in this segment, are we seeing any kind of slowdown on caution or is there any reason behind it? If you can just throw some light on this.
Himanshu Aggarwal
Sure. Thank you for the question and the congratulations message. So with regards to slowdown, again to repeat the earlier answers in the sectors we are currently operating and with the kind of equipment and services that we give, we haven’t seen any specific slowdown impacting our demand. One, we are working across sectors so our equipment is usable across sectors so we have not really seen any instance where any equipment has not been utilized because it cannot be used in a specific sector per se.
So for example, the cranes that we purchase, they are purchased in a way that they are basically full with full all their different accessories. So they are fully loaded cranes as they are called. And they can be used in the cement plant, they can be used in the wind sector as well as steel industry or in the infra sector. Also we use in them. And when it comes to our filing rigs, again we are working like with JK cements in their plant. We are working with infra companies for infraworks.
So there are multiple activities across which we have got our works happening and we do not see a challenge with regards to the demand for the equipment that we have.
Bhavya Sonawala
Okay, that being said, my second question is kind of on a macro environment, in the near future, do you expect any kind of oversupply in terms of crane dentals? And I understand that the industry is very segmented with each segment using a different type of crane. Overall, do you see any issue probably over supply six to one year down the line which could probably affect us in our rental income or growth or overall.
Himanshu Aggarwal
I see with the kind of opportunity that we are discussing, at least at our client level and the project level, because we have a visibility of projects based on the tenure of projects. Usually these projects are three years, four years or at least two years. So we do not see that the supply, if any of oversupply that is being talked about would impact the demand because on the other side there is an increase in the increasing demand side is also there from the client side because various sectors are expanding. Although at the macro level we are also hearing that there is slowdown probably in production or in the expansion plans of companies.
But that doesn’t directly impact us because these services that we are catering to are not dependent on how fast or how big they expand because that will only add to a larger demand. But even at the slower pace that they are going to expand. If you look at on a conservative side as well, there again the demand is high enough to cater to the supply that is already there or it’s going to add up in the next year or so.
Bhavya Sonawala
Okay, that makes sense. My last question, if I can squeeze in is just what is our average cost of borrowing?
Himanshu Aggarwal
So we are at about 8.8% for the nine month in this financial year.
Bhavya Sonawala
Sorry, can you repeat that? I missed you.
Himanshu Aggarwal
So yeah, so we are at about 8.8% cost of borrowing for this financial year.
Bhavya Sonawala
Thank you so much and wish you all the best. Thank you.
Himanshu Aggarwal
Thank you. Thank you, Bhavya.
Operator
Thank you. The next question comes from the line of Ashish Khurana from A&K Capital. Please go ahead.
Unidentified Participant
Am I audible?
Himanshu Aggarwal
Yes, you are.
Unidentified Participant
Thank you for the opportunity. Himanshuji. Congrats on a decent set of numbers. So I am a bit new to the company, so my question was a bit broad based. So especially regarding the equipment rental business. So it seems like a pretty solid business in terms of fee margin and the cash flow it generates. So my question was regarding the kind of entry barriers or the cognitive advantage that we have in this segment. So from outside it seems like the ability to manage one’s fleet utilization, reach a certain scale, knowing when to sell to manage residual value and all these could be some factors which help build a strong, as they call it, moat around the company. But I mean your views as an insider to this company and industry would help, you know, understand this much better and also if you could, you know, give a ballpark figure of what is the share of organized versus unorganized players and specifically the rental industry, equipment rental industry or sector.
Himanshu Aggarwal
Okay, so thank you for the question. Shashi Sharing the message on the so with regards to your question, you put out a very broad question and some of it you kind of answered where basically the equipment rental business per se, it’s not about just having the asset and giving it out on rent. So it goes out as a package service package where the entire management of that equipment, which is basically operations of that equipment with the operating crew, the maintenance and all the other accessories that go with it are our responsibility. So that is one difference where it’s not just about having the bandwidth to invest and bring in a machine and then get the orders for it. 2. Having a network of clientele over the years we’ve been in this business for more than two decades now. So that has enabled us to establish credibility among clients, plus the kind of contracts and orders that we work with, which are large clients and large orders.
And there are very stringent norms with regards to compliances, statutory compliances, as well as safety guidelines that need to be followed. So that is not easy for a smaller company or a growing company to easily get a grasp of. So it takes a lot of time to reach that stage. So those are factors. And then obviously having the right kind of equipment makes the knowledge, the having the right kind of equipment mix to be able to take advantage of the opportunities that are there or are coming up with the kind of discussions and visibility that we get from our clients. So that has enabled us to establish this kind of mode, as you kind of pointed out around this business. And I hope that helps clarify what you were asking to with regards to our company.
Unidentified Participant
Yeah, it does. Thank you. With regards to organized versus unorganized share, do you have some light?
Himanshu Aggarwal
It’s hard to put numbers on it, but for the organized side, I do know that there are close to about 10 big companies in the country who can be considered big by the virtue of the number of machines, of the kind of machines they have. And there again, it is difficult to kind of put them in the same basket because not everybody is doing the mix of equipment. Like we’ve got cranes, piling rigs, AWP trailers and somebody is doing just cranes. So there are different mixes there. But yes, There are about 10 organized players of which only about 2 or 3 are listed and the rest are big enough as private limited companies. But a lot of it apart from those 10 would be considered in the unorganized sector. That’s a personal view.
Unidentified Participant
Okay. And Himanshuji, while answering the last question, mentioned that most of our equipment is full fledged. As in it can be used across sectors. And one thing which I have noticed is that in the last year how we have shifted our sector concentration and gone from being heavy on infrastructure to cement and metals. So this shift is possible in a similar 6 to 12 months time because as you said, we have been in this business for 20 years and we have declined. And whenever we see a certain sector slowing down, we can find other sectors where there is still demand and shape to that. So that is something we can expect in future as well. Is it?
Himanshu Aggarwal
Yes, definitely. See like currently you would see last year we were at about 10% in petrochemical and this year we are at about 4%. It’s just because we saw a better opportunity in the steel and cement sectors and we mobilized equipment there in the infrastructure. We’ve kind of pulled out for the very reason.
And in previous calls I’ve tried to explain that because we were also doing some sort of subcontracting activity back in the day 2223, which we stopped doing after September 23rd specifically because of the margins being very low and there being a lot of disputes also arising there. So that has made us concentrate more towards the better margin, better cash flow driven sectors. And that is the mix we have tried to follow.
And going forward, as you ask, there are certain sectors like we started with the renewable and early sector only this year, petrochemical, as I pointed out There is a large opportunity there as well. And we keep weighing in the opportunities and then take a call on which machine needs to be deployed where so that we can expand our share in that sector or our revenue mix for that specific sector based on the demand.
Unidentified Participant
Understood, sir. My last question would be on our gross yields. So we, I think, as far as I know, are already probably the best among the listed players at close to 3%. So is there more room for expansion in that or given that, you know, we already, I think, have capitalized a large bit of CapEx that we have done recently. So shall we assume that it will be around this range going forward or what are the other drivers that, you know, could, if at all, you know, make it go up?
Himanshu Aggarwal
So, yes, to answer that, we are at a pretty good level already because being at 3.05% is one of the better levels that we understand in this market. But the driver for any change on the upward would be better pricing going forward. And also when we calculate our gross yield numbers, it is based on the net market value of the equipment that we have, the total equipment that is deployed in the equipment rental segment and the return that we are getting on it. So the net market value also keeps changing on a period basis, like what the net market value of our equipment was a year ago and what it is now has also changed with the new CapEx as well as the other equipment depreciating a bit while the rentals have remained similar to what they were a year ago. So that kind of helps in that gives a little surge on the gross yield as well.
So those factors could add up to any positive side that you would see. But 3.05% or 3% is a pretty good or ideal scenario, at least as of now.
Unidentified Participant
Yeah, it is pretty good. Thank you for the answers. They were very clear. And thanks a lot. All the best.
Himanshu Aggarwal
Thank you. Thank you.
Operator
Thank you. The next question comes from the line of Manan Vandur from Wallfort PMS. Please go ahead.
Manan Vandur
Yes. Am I audible? Hello? Hello?
Operator
Yes, Manan, please go ahead.
Manan Vandur
Okay. Okay, sorry. Yeah. Thank you so much for the opportunity and congratulations to the full Tarajan team. So my first question is, even as we are coming towards almost the end of the financial year and in previous falls, when I had asked about, you know, guidance earlier, so you said that around quarter three, you might give something. So do you have any plans for FY26 guidance that you can give us?
Himanshu Aggarwal
Okay, so thank you, Manan, first for the congratulatory message and for your question the guidance you’re particularly asking from a revenue perspective or any other aspect that you are looking at for FY26?
Manan Vandur
It would be revenue guidance, EBITDA and patent percentage wise.
Himanshu Aggarwal
It is still a little early for us, but as I mentioned in my opening remarks, we’ve been growing at 34% in this financial year against our targeted 30% and we are confident that with the kind of order book that we have and visibility we have for Q4, we will easily be crossing our target of 30% and rather maybe achieve a little better as well. Going into Q into FY26 we would definitely push to maintain our 30% year on year growth. While the EBITDA margins which are currently about 34% is where is the range that we are consistently working to remain at about 34 35% overall EBITDA margin which is considering all the segments and Even on the capex side we had planned 160 crore capex at the start of this financial year which was to be done in 100 crores this year and 60 crores next year.
But we had to prepone some of it because of the demand that we saw that it made more business sense to do 130 odd crores this year in Q4 we haven’t yet thought of any more capex but going forward the balance 30 odd crores that is left plus another 5060 crores we do see would come into play for capex in the next financial year as well. So that’s a basic guideline that I say for FY26.
Manan Vandur
Okay, so you are saying that as of now in FY26 the capex you can see would be 60 crores plus 30, so 90 crores something it
Himanshu Aggarwal
Could go to that extent but we’ll have more clarity towards the end of Q4. So when we have the next call, probably when we are discussing Q4 results and the FY results, we’ll be able to give a more firm picture of FY26.
Manan Vandur
The second question that have we completed the renewable energy order which we had in Q3 because in Q2 presentation in order book it was written 5% of the total order book is renewable energy and this quarter results The Revenue said 5% of renewable energy from the revenue part. So does that mean that we have executed the renewable energy order?
Himanshu Aggarwal
We have executed the initial orders and these usually tend to keep getting extended. So the trend is such that from the overall equipment rental revenue we are getting 5% in the renewable energy because the other sectors are also chipping in and they are also growing. So we are able to maintain renewable energy currently at 5%. But as I was trying to answer an earlier question from Mr.
Ashish, going forward if we see greater opportunity there and better margins of better cash flows there then we will move more towards renewable energy. But as of now we are comfortable with the sectors that we are operating in and that is why we’re getting those good numbers as well.
Manan Vandur
Correct. Correct. Understood. Thank you. And the last question would be that how much of this 73 crore orders could you bifurcate this to us in terms of the material handling? Sorry, the equipment rentals. I’m sorry, what would be the different sectors could be there.
Himanshu Aggarwal
So on the order book front, segment wise you’re trying to ask.
Manan Vandur
Yes, like cement or infra renewable energy.
Himanshu Aggarwal
That is difficult for me to give up because we haven’t done those numbers frankly and I don’t have it in front of me right now. But I can definitely look it up. You can send out an email and we can respond to that. But as a revenue mix out of the 73 odd crores we record, 64% is towards segment A and 36% is towards segment B which is material handling and 64% is for equipment rentals. But in that 64% which sector wise division is there? I’ll not be able to comment on that right now.
Manan Vandur
Okay, no problem. That’s it from my side. Thank you so much.
Himanshu Aggarwal
Thank you.
Operator
Thank you. The next question comes from the line of Chaitanya Sharma from Trade Walk research. Please go ahead.
Unidentified Participant
Hello, I’m audible.
Himanshu Aggarwal
Yes, I can hear you..
Unidentified Participant
Congratulations on the wonderful set of numbers. I have two questions on the operations front and one on the financing front. First one being how is the company financing its capex and what kind of revenue visibility can we see from these capexes?
Himanshu Aggarwal
Okay so to answer the financing part. So the capex that we do it is a combination of debt plus internal accruals plus there is suppliers credit which is usually from ranges from two years to two and a half years. So basically our upfront margin is about 25 to 30% of the overall equipment purchase that we do which we manage from our internal accruals. Balances from suppliers credit which converts into debt or we pay upfront to the supplier on completion of the credit period and the credit period that we get from the supplier. It’s an interest free credit treaty.
Unidentified Participant
Okay, and what kind of margins did you mention?
Himanshu Aggarwal
About 25 to 30% upfront margin is paid to the supplier.
Unidentified Participant
Okay. That’s great. The next question is how is the company targeting to complete its capex? And what I think that was already asked. But you had a target of 160 crores and how much are you planning to go beyond that in FY26?
Himanshu Aggarwal
Okay, so we had 160 crore target for 100 this year and 60 next year of which we’ve done 132 out crores this year itself.
So the 2830 crores will overflow into the next financial year. Plus as I mentioned in the earlier answer as well about 5060 crores. We do see that we would be taking up based on more visibility that will have clarity towards the end of Q4.
Unidentified Participant
Okay, that’s it. My next question is what is your rental equipment utilization rate and what are the rental yields trajectory you are seeing?
Himanshu Aggarwal
So the rental yield that we are currently at for the land. Well
Unidentified Participant
Sir, your voice is not audible.
Himanshu Aggarwal
So the rental Yield is at 3.05%. Average monthly rental gross levels is 3.05% for the nine month period and for the quarter it was 2.98%. We had another question. I missed that.
Unidentified Participant
You have another. sorry.
Himanshu Aggarwal
I said you had another question. I missed it. I did not.
Unidentified Participant
Yeah, I’m asking what kind of trajectory are you seeing and what are your equipment utilization rates?
Himanshu Aggarwal
Okay, so in the quarter three FY25 we achieved an average capacity utilization of 89%. And overall for the nine month period the utilization has been at about 85%. Okay. On the trajectory front, the 3.05% yield, excuse me, as I answered in the earlier question is already at a pretty decent level. So we see that it will be able to maintain that.
Unidentified Participant
Okay. And my next question is recently RINL which is Vizag Steel was approved quite a lot of equity inclusion, about 11,000 crores. And they are expecting to ramp up their operations. How does our company stand to benefit from it anyway and what kind of revenue will it be?
Himanshu Aggarwal
Right. So we would definitely be benefiting directly because we are managing the entire central dispatch stockyard of Limited plus we’ve got their stockyard in Mumbai and Nagpur. So the volumes would definitely increase with the ramping up of their operations which is happening in the current month itself. So as you would see that the revenue for our segment B which is warehousing and transportation has only grown by about 8% year on year. So there we see a large opportunity which will definitely with the RINL operations coming to the levels, the peak levels that are required because we’ve got a total capacity of 7 million tons of which only about 4 billion tonnes or so, if I’m not mistaken, is currently being produced.
So with the ramp up that is happening, that will definitely help in our revenue for segment B and also eventually bring in the other numbers as well.
Unidentified Participant
Okay, that’s wonderful. Thank you very much. That’s all for My pleasure. Congratulations again.
Operator
Thank you. The next question comes from the line of Ronil Dalal from Ficom family office. Please go ahead.
Ronil Dalal
Hi Himanshu, Congratulations on a great set of numbers, a very tough environment.
Himanshu Aggarwal
Thank you, Ronil.
Ronil Dalal
So my first question was that one of your larger competitors, they have actually mentioned that 10 to 15% decline in their crane rental business and also their capex, they have revised it downwards. So I think that’s why a lot of the questions you are getting probably on the demand side as to if you’re seeing any signs of slowdown or any kind of pressure on yields, but this, at least from your commentary so far, that does not seem to be the case. So is there any reason that, you know, you would think that there would be that difference between some of your peers and your operations?
Himanshu Aggarwal
Okay, so to answer that I’ll try to broadly give an idea of how we work. So basically as I’ve tried to explain sector wise distribution, also our sector wise distribution is different from the competitors or peers that you probably are looking at. One, two with the kind of bandwidth we have with the mix of equipment we are working across the board with clients with different kind of work.
So if I’ve got binding, for example, for the same client, I’ve got filing rigs working at a project subsequently where I’ve got cranes also working or area working platforms working for that client at that same project or at another project. So the bandwidth is there as a multi solution provider to the client and we’ve also got our logistics services. So that helps us to have a stronger relationship with the client in that sense and it gives us more visibility because we get a associated with the client at a pretty early stage for large projects.
So that is giving us the confidence and it is helping us to bring in the kind of revenues and the kind of profitability that we’ve been seeing over the last year. And we are still very bullish and positive about the demand going forward because the size of the fleet that we currently have, it is very well placed and the kind of expansion that we are looking at, we are very well placed to manage on the demand side. We do not see any challenges there.
Ronil Dalal
Sure, thanks. And is there any segment where you are Seeing any slowdown. I understand overall the demand is good, but amongst your different segments, which are the maybe one or two segments, if you could highlight where there is maybe some slowdown, if anything at all?
Himanshu Aggarwal
Yeah, thank you. The one area that we did see with renewable energy, especially wind, at the start of the financial year, there was a lot of positivity towards the opportunity there. But the project at the ground level did not really take off at that speed at which it was anticipated probably.
So we have also been very careful and cautious about pushing for growth there. And that is why we still remain at 5% of our equipment rental revenue from the renewable energy sector, of which it is actually a mix of solar and wind and almost equally divided between solar and wind. So we have been cautious there and we continue to remain cautious because that is one sector we still feel is not very clear on the demand cycle that was earlier anticipated.
Apart from that, on the infra front, there have been certain projects because of this being a very election driven year because of the national elections and then multiple state elections, especially large state elections like Maharashtra and others, there have been challenges on the infra projects also taking up to that kind of speed. But that has been kind of now it is getting into speed and we do see that going forward. The infra sector at least does not seem to be a challenge with regards to the demand cycle now coming back to the anticipated levels, at least for our equipment, if we talk about, but for the renewable energy sector, especially wind, I feel that is an area that might still be challenging.
Ronil Dalal
Right. Besides that, I mean, there are different kind of reports and additional screws, but there is an increased competition in the equipment rental space right now. So how are you navigating that? Are you feeling anything around that increased competition?
Himanshu Aggarwal
Definitely. With the kind of growth that has happened over the last couple of years, the competition has increased, but with the larger players that we work across with the larger equipment venture players that I talk about there again, everybody’s got their own pockets and concentrations of growth or concentrations of strength with clients or regional concentrations. And we have worked on that or like we’ve taken up a large chunk of our work in the eastern side of the country as well, which we were not working earlier. So we spread across Odisha and Charkhand and Chhattisgarh.
All those areas we’ve covered in the last one year and a half where we have been able to then kind of de risk ourselves from the concentration of competition in a specific region per se. So that is how we work and we concentrate more on project where we focus on getting a larger chunk of the project in a concentration of equipment there. So that has helped us in managing the competition level from our other competitors as well.
Ronil Dalal
Right. Besides that, is there any increase in borrowing costs that you expect going ahead? I mean, are borrowing at a pretty decent rate? So do you think that this number can go up?
Himanshu Aggarwal
At present we do not have any new borrowings lined up. And these are mostly borrowings from previous periods which are at a pretty good rate already. And we have that kind of rapport with our banks where we ensure that we get the best of pricing. And there are multiple banks that we work with. So any specific major rises from the RBI that could lead to a rise in borrowing costs that could come into play. But at least as of the current scenario, we do not see any major change coming in our average cost of borrowing, which is at about 8.8%.
Ronil Dalal
Right. And this is my last question is that you mentioned that margins can be 34 to 35%. But given that Vizag Steel is expanding and you might get a lot of orders from there, that would be possibly at a lower margin. So on overall margin basis, would that mean that the company level overall margin can then come below 34%? Maybe closer to say 30 to 32%.
Himanshu Aggarwal
So currently if you look at it, our margin in segment B has been on the lower side because of the lower volume of steel that we’ve been able to handle in the current financial year, which has been primarily because of RINL’s challenges.
With RINL improving its production, we’ve got similar costs into play. So we do see our margins kind of improving in that segment, which will help us to manage the overall margin in that range of 34 to 35%.
Ronil Dalal
Right? Sure, sure. Thanks a lot. And all the very best. Great performance again. Thanks a lot.
Himanshu Aggarwal
Thank you. Thanks a lot, Ronil.
Operator
Thank you. The next question comes from the line of Ankur Kumar from Alpha Capital. Please go ahead.
Ankur Kumar
Hello sir. Thank you for taking my. Sir, I want you to understand regarding next year’s 30% number that you are saying projecting, what as in do we have some starting. We have started taking orders for that. What is the order book for FY26 that we are already getting now? And what are the key sectors you think which will help us to achieve this 30% number that we are expecting for next year?
Himanshu Aggarwal
Okay, thank you for the question. So as I try to answer the question which was there earlier on the next year’s guidance, still something that we are targeting and as I said, the clarity would be There towards the end of Q4 as far as order book is concerned with regards to our warehousing and transportation segment, the contracts are usually five to seven years.
So we do have visibility there even up until 2027, 2028 and for our equipment rentals, because we are towards the end of this financial year, it’s only two months left, we’ve got visibility for certain contracts which are running into up until the Q2 of next financial year.
So taking all that into consideration, the capex that we have done and what we intend to do in the first half of the next financial year, all of that we have factored into and the kind of growth that we are seeing in the demand for our warehousing segment, as we talked about about RINL coming back to its full fledged production level or at least at the best optimum production level, all of those factors have been considered when we are looking at growing at 30% next year as well. But I would again add that more clarity would be there towards the end of Q4 on this.
Ankur Kumar
In terms of equipment rental, which sectors you think will contribute? Because as you said renewable is slow, government capex is also looking slow. I think cement is also bit of slow. So what are the sectors which will help you in that?
Himanshu Aggarwal
Right. So with regards to infra and cement, although they are slow on a macro level, but the growth that we are still doing is sufficient for the consumption of the kind of equipment that we are supplying for the services that we are supplying. So we do not see a challenge at our level with regards to the demand for our equipment and the services that are working in these sectors. Because infra sector is pretty large and when we look at a macro level that it has slowed down or the capex has slowed down, we’re talking about thousands of crores of numbers there.
Whereas our chunk of the share is very small. So our growth is sufficiently available for us to grow. The room is sufficiently available and we are working towards that. So those sectors, infrast, cement, steel, petrochemical is one area that we are focusing going forward. There is still a lot of demand there. And cement though at macro level there might be a slowdown there, but still we do see sufficient demand in the cement sector also for the equipment. So we will continue to be working in these sectors. And renewable energy, we will definitely take a call based on how the demand pans out.
Ankur Kumar
Got it sir. And next question is on the depreciation line item. Sir, it has reached around 12 crore per quarter now. So how should we look at that now?
Himanshu Aggarwal
So with the capex that has happened, that is naturally a result of that and going forward that will be similar because we are at about 13 crores of depreciation for the nine month period and 12 crores is the quarterly depreciation. So anywhere around 42 crores is what we anticipate for the financial year and similarly going into the next financial year. Those are the numbers, 11 to 12 crores is the quarterly depreciation that we anticipate.
Ankur Kumar
Got it sir. Thank you and all the best.
Himanshu Aggarwal
Thanks a lot.
Operator
Thank you. The next question comes from the line of Mohit Negi, an individual investor. Please go ahead.
Unidentified Participant
Good afternoon sir. Am I audible?
Himanshu Aggarwal
Yes. Good afternoon, Mohit.
Unidentified Participant
Yes. Hi. Congratulations for a great set of numbers. So my question is related to the steel processing and distribution segment. I heard in your initial comments that there was a degrowth in the revenue, is that correct?
Himanshu Aggarwal
That’s correct.
Unidentified Participant
So is there any particular reason for that and how do we see it going forward?
Himanshu Aggarwal
Okay, so to answer that I’ve highlighted in my opening remarks as well. It is a low margin business and it is more so from a customer stability perspective where our end user client who’s already there in our service segment B or segment A sometimes required steel to be processed at third party locations and then delivered to them. So we do that as an add on Service and in Q3 we did not have any or we did not take up any order because we are being conscious about maintaining our margins. With a margin of just about 4,5% it is not making too much sense to continue growing that business. So we maintain it and we do it only when it’s actually required to cater to a peak client and not really. We are not seeking business specifically in that segment itself.
Unidentified Participant
Understood. Understood. Thank you.
Himanshu Aggarwal
Thank you sir.
Operator
Thank you. Ladies and gentlemen, if you wish to ask a question, please press star and 1. The next question comes from the line of Manoj from Kiva Advisors. Please go ahead.
Unidentified Participant
Hi sir, thank you for the opportunity to ask. We used to can you share the amount of depreciation that we spend versus the useful life of the crane like we depreciated in 8, 10 years versus the useful life can be 30 years something.
Himanshu Aggarwal
Right? So thank you for the question. So we depreciate the equipment as per, as per WDV which is written down value and it is done as per the norms available under the relevant acts. As for the useful life of the equipment, usually the larger planes which we talk about 100 tons and above cranes, the useful life is considered as anywhere between 15 to 20 years.
The larger the crane, the larger the useful life is the way it works. And with our other equipment like the piling rigs, the useful life can be anywhere between 10 to 15 years. For aerial working platforms, again it is 15 to 20 years. So with this kind of equipment it varies. For trailers or trucks it is slightly lower because they are more used on the road and they have got more wear and tear. So there is a combination of different useful life for different kinds of equipment.
Unidentified Participant
One of your peers mentioned that the useful life for some of their claims, that’s like 30 years as well.
Himanshu Aggarwal
Yeah, see there are claims that we. But we take the conservative side and consider 20 years. And usually we try to. The way the cycle of equipment like we follow is that we try to sell off equipment in eight to 10 years of their life with us so that we can then invest into new, fresher, modern equipment and also get a good return on the equipment that we are selling out rather than keeping it for much longer and then not get a good value.
Unidentified Participant
Got it. And would you like to guide separately on the equipment rental margin for the next year?
Himanshu Aggarwal
So the equipment rental margins are at about 53% and specifically equipment rental. And if I look at the segment as a whole with specialized service contracts in there, which we were at 44%. So as a whole with specialized service contract it will be anywhere between 44 to 46% and on the equipment rental independently it will range between 33.
Unidentified Participant
So we can maintain the existing margins? We were earlier saying basically new equipment, which is margins could improve?
Himanshu Aggarwal
Right. So that is the reason that we have come to 53, 55% earlier. We were at about less than 50% in the previous periods.
Unidentified Participant
So from here we don’t see any improvement further?
Himanshu Aggarwal
Right. So see a 2% or 200 bps improvement is what we are looking at from 53 to 55 is the range. That is why are we talking about to be able to maintain this kind of property, this kind of margins.
Unidentified Participant
Solar lot of solar additions are happening. When you say you are seeing a slowdown there, are you specifically about the blended solar and wind projects and specifically wind projects or even calling out solar as well?
Himanshu Aggarwal
And also specifically wind is where we did not see the kind of movement on the ground with regards to the projects that were announced or anticipated. So wind is the area where especially a lot of our larger cranes are utilized. So that is where we were been focusing on when I said on the slowdown. So solar as such, we have had our equipment working there as well. And we do not See a challenge there.
Unidentified Participant
Right. As you said, election related and the government spending was slow in the first half. Has that seen a meaningful pickup in the last few months?
Himanshu Aggarwal
We do see some sort of demand changing in the last couple of months in the infra sector where the equipment utilizations have gone up. And that is why for the quarter three you would see that we had a capacity utilization of 89% and for the entire nine month period it is 85%. So yes, there is certain change that is there and going forward we are positive about it.
Unidentified Participant
Thank you so much and all the best.
Himanshu Aggarwal
Thank you.
Operator
Thank you. The next question comes from the line of Chaitanya Sharma from Trade Walk Research. Please go ahead.
Unidentified Participant
Hi. Two more follow up questions. What are your outlooks on cash accruals?
Himanshu Aggarwal
Okay. Cash accruals for the current financial year?
Unidentified Participant
The current financial year and the next year and I think I can also see that your cash balance is zero. So how do you plan on bringing that up again?
Himanshu Aggarwal
I did not understand the second half of the question.
Unidentified Participant
I think your cash balance currently on your balance sheet is close to zero. How do you plan on bringing that up again?
Himanshu Aggarwal
So the cash and cash equivalents, just to answer the second half of the question first, if we look at our cash flow statement, the cash and cash equivalent as of December 24th to that 1.52, 152 million actually. So 15.2 crores that has already been on the improvement side and on the question with regards to the cash accruals. So the cash bat currently was about 47 crores for the nine month period and that we see that going forward, the kind of depreciation numbers that are there and the profitability trend that we have seen, those are always, those are expected to improve could be anywhere in the range of 60 odd crores by the end of this financial year and for the next financial year. It is difficult to give any guidance on that because we don’t really do that.
Unidentified Participant
Okay, that’s it. And how are you planning to maintain or improve your working capital cycle? If I’m not wrong, is it around 88 days right now and in the past it has sometimes gone to 130 days, 120 days. So how do you plan on working capital?
Himanshu Aggarwal
The receivable cycle days has come down to 79 days net of GST as of the 9 month period which was 101 days for the same period last year. We have been consciously pushing our clients and also ensuring that the terms in the contract are more stringent which has helped us to Bring down the receivable cycle days by one full month. And that further we are looking at ensuring that we continue to take that forward. And our target is to be anywhere between 65 to 70 days which is ideal for the mix of sectors and segments that we are operating in.
Unidentified Participant
Okay, thank you very much.
Himanshu Aggarwal
Thank you sir.
Operator
Thank you. The next question comes from the line of Ankur Kumar from Alpha Capital, please go ahead.
Ankur Kumar
Thank you for the follow ups. Sir, I wanted to understand as in renewable is how, but how much percent of our business is it like 5% only?
Himanshu Aggarwal
Yes. So it is 5% of our equipment rental sector. So 5% of the segment A of the overall business will be then slightly lesser.
Ankur Kumar
Got it. And so when you said wind is bit slow as in other listed wind companies, they they are seem to be executing quite well, winning quite good also. What exactly is happening there? Can you please comment? Because the listed ones have at least been reporting with numbers.
Himanshu Aggarwal
Right. So see we are not very active in the wind sector. So I’m commenting from a perspective of our research with regards to how aggressive we should be in that sector. In that sense we’ve seen that although there have been a lot of order announcements, order wins. But at the ground level there have been challenges with regards to right of way or other issues as well as money flowing into the projects. So the projects haven’t taken up the speed that they should have. So that is where we see that there is a challenge in that sector as far as our perspective is there with regards to going aggressive in the wind sector specifically.
Ankur Kumar
Sure sir. Thank you and all the best.
Himanshu Aggarwal
Thank you.
Operator
Thank you. As there are no further questions, I now hand the conference over to Mr. Himanshu Agarwal for his closing comments.
Himanshu Aggarwal
Thank you Ryan. Thank you everyone once again for joining today for the Earnings call for Q3 and FY ended night 31st December 2024. As stated in the opening remarks, we are very confident going forward that we will continue with the trend of achieving the targeted 30% y on y growth and we should be able to surpass that. Rather as Q4 is traditionally the best quarter for the company. And we once again thank you for your continued trust and confidence in our vision and onward journey. Thank you.
And back to you Ryan.
Operator
[Operator Closing Remarks]