Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Trishakti Electronics & Industries Ltd (NSE: TRISHAKT) Q3 2026 Earnings Call dated Jan. 20, 2026
Corporate Participants:
Aakash — Operator
Rishabh Ratot — Investor Relations
Dhruv Jhanwar — Chief Executive Officer
Analysts:
Anshul Jain — Analyst
Satya — Analyst
Digant Bump — Analyst
Yashtana — Analyst
Manish Jaiswal — Analyst
Jayesh Shah — Analyst
Presentation:
Aakash — Operator
Good evening, ladies and gentlemen. I’M Aakash, moderator for the conference call. Welcome to Q3. Nine month FY26 earnings conference call of Trishakti Industries Limited. We have with us today Mr. Dhruv Jawar, the CEO of the company. As a reminder, all participants will be in lesson only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on a touch tone telephone.
Please note that this conference is being recorded. I would now like to hand over the floor to Mr. Rishabh Ratot from Confidently Partners. Thank you. And over to you sir.
Rishabh Ratot — Investor Relations
Thank you and good ladies and gentlemen. My name is Rishabh Radhwar from Confide Leap Partners. We represent the IR for 350 Industries Limited. I warmly welcome you all to 350. Industries Limited Q3 9th month FY26 earning conference call. The company is represented by Dhru Jawar, the CEO of the company. I would now like to hand over the call to Mr. Dhruv Jawar for his opening emo. Thank you. And over to you Dhruv.
Dhruv Jhanwar — Chief Executive Officer
Thank you, Rishabh. So good afternoon everyone. It is a pleasure to welcome you. All to three Shakti Industries Limited Q3. Nine month FY26 earnings conference call. I am pleased to welcome all our stakeholders, investors and analysts as we review. Our recent performance and outline our strategic priorities going forward. The third quarter marked another strong milestone in our growth journey as we continue to build momentum. Our standalone revenues from operations stood at 8 crores, up 20% quarter on quarter and 357% year on year.
Our EBITDA stood at 5.61 crores reflecting. A 43% growth quarter on quarter and. A 369% growth year on year driven by higher asset utilization, disciplined cost management and strong execution across multiple projects. Our PAT also rose 53% quarter on. Quarter 17 44% year on year to INR 2.45 crores underscoring our ability to. Translate operational strength into sustained profitability. For the 9th month ended December 2025. Our standalone revenues reached 18.74 crores up. By 37% year on year. Our EBITDA for 9 month FY26 stood.
At INR 12.23 crores reflecting a robust. 211% growth year on year with margins at 65.27%. Our PAT for the 9 month period. Stood at 4.97 crores, up 183% year on year, demonstrating consistent profitability across the fiscal year Based on our 9 month FY26 performance, our annualized revenue run rate. Now stands at 48 crores. Our heavy equipment hiring business remains the. Core growth engine operating at 100% utilization. During this quarter we have made exceptional progress on our 400 crore capex program planned through FY28.
With 200 crores already spent, our FY26 capex target was rupees 100 crores. And we are delighted to announce that we have already deployed 154 crores worth of machines year to date. Moving ahead, we are focusing on expanding our next generation higher tonnage fleet to support large scale industrial and renewable projects. Our balance sheet remains robust, supported by prudent financial management and an efficient payback cycle of around 3 to 3.5 years for our equipment investments. With fleet size now standing at 117 machines and marquee clients including Larson and.
Toubro Reliance, Jindal Group, Asia International and. ITD cementation anchoring our order book. These relationships provide us with resilient revenue. Visibility and a sustainable growth Runway. Looking ahead, Krishakti is well positioned to capture a larger share of India’s infrastructure and renewable energy opportunities. We remain fully committed to delivering sustainable. Growth and long term value for all our stakeholders. Thank you for your continued trust and confidence in 350 Industries Limited.
With that I conclude my remarks and. Open the floor for questions. Thank you.
Questions and Answers:
Aakash
Thank you sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on your touchtone telephone. If you wish to remove yourself from the question queues you may press Star and one again. Let us wait until the question queue assembles. Ladies and gentlemen, if you have any questions please press star and one on your telephone keypad. Ladies and gentlemen, if you have any questions please press Star and one on a telephone keypad. The first question comes from Mr.
Anshul Jain from Lakshmishree Investments. Please go ahead sir.
Anshul Jain
Hi, good afternoon.
Dhruv Jhanwar
Hi, good afternoon.
Anshul Jain
Hi. This is Anshul Jain from Lakshmishi Investments. So I have three questions for you. Firstly, your ARR post nine months, that is this 3/4 stands at about 48 crores. And your presentation shows revenue targets of 20 to 22 cr for FY26. And we are already at 3/4 which is about 18.73 crores. So like can we expect to significantly surpass this guidance? And secondly, revenues grow 20% Q3 versus 63% in Q2. So like why is this difference like what led to the slowdown? And can you Help me with the order book date.
Order book as of date. Thank you.
Dhruv Jhanwar
So your first question was regarding the arrangement, right? So let me answer your first question first. So yes, right now since honestly if. You see our segmental assets also it. Has reached 200 crores. So for this year we are guided that we’ll be doing 100 crores in capex. But in the first nine months itself. We have done 154 crores because the. Demand is extremely high right now. So that is the reason why in the past four to five months our fleet has literally quadrupled up. So this is the reason why our ARR has gone up significantly.
And of course if we have created. A 200 crore segmental assets in our. Books for heavy equipment hiring then we. This is the reason why we will be surpassing our guidance for this financial year. Because last year whatever guidance we had given was with respect to the 100 crores of capex. So since we have supplied this CAPEX projection, hence our revenue projections will also keep going up. So on a annualized basis right now in the first nine months we are at 48 crores of revenue or annual 100. But in the last one week we have won a few more orders.
So this will significantly go up in the coming quarters also. And this is the repeat your second. Question regarding the revenue part.
Anshul Jain
Yes, revenues grew 20% in Q3 and 63 was in Q2. So I just want to know like why is there the difference? Like what led to the slowdown?
Dhruv Jhanwar
See we are in a contractual business, right? So the amount of capex we have been doing, our lead times for the. Machines to start generating revenue is around one and a half months. So if I’m doing capex today, then. It takes one to one and a half months for my machines to start. Generating revenue because it does take time for our machines to reach the side. Get the TPI done, logbook started, dieselbook started, there are many compliances. So that is the reason why whatever. CAPEX is being done in Q3, the.
Real fruits will be we’ll be getting it in Q4. So that is the reason why there. Is a lag in the lead time from when we purchase the machines and. When we start generating revenue from it. I think this answers your question. And also one more reason is that. Our the asset base was Quite low in Q2 and in Q3 our asset. Basis also jumped significantly higher. And if you see in our Q2. Balance sheet, the exponent balance sheet, a lot of our machines were into cwip. So those machines have also started generating.
Revenue now in Q3 and purchase. Have now started generating revenue from the. Month of January itself. So I think this answers your question. And the third question you had on. The order book side. So this is. Since it’s a contractual business, we get six months orders, 12 months orders. But generally before we actually take an order from a client we have a full survey of the site where we make sure that the project should at least. At least go on for the next two years or so. So although the current ARR is at.
48 crores, as and when our contracts. Keep getting renewed, this ARR will also keep going up. So this is how our order book is actually placed.
Anshul Jain
Okay. Okay. Yeah, got it. Thank you for these insightful answers and wishing the best to three Shakings.
Dhruv Jhanwar
Thank you so much.
Aakash
Thank you sir. Ladies and gentlemen, if you have any questions please press star and one on your telephone keypad. The next question comes from Mr. Satya, an individual. Please go ahead, sir.
Satya
Hello. Hi sir. Hope I’m audible.
Dhruv Jhanwar
Yeah, yeah, you’re audible.
Satya
Congratulations on a good set of numbers, sir. And I’m relatively new to the company so pardon me if the questions are a little basic but just trying to understand it. So we are projecting, you know, great growth and I think we’re also already delivering on a lot of it. But want to understand like how are we suddenly, you know, getting this huge demand, where is it coming from? And you know, our competitors are also getting such demand. I was looking at a couple of other, you know, one listed player, their growth is not as much, they’re significantly bigger as well.
But what’s our story sir, in terms of how are we getting this huge demand from.
Dhruv Jhanwar
Yeah, so. Yeah. So let me give you a brief understanding about this. So in the last six months itself. We have that in the renewable energy. Segment the demand is skyrocketing like anything, so be it in the solar part and the. And the best plants as well. So recently we have got a lot of orders related to the best industry. The Bess industry, battery storage. So since a lot of new plants. Are coming up for those things. So that is the reason why they. Need a lot of heavy machineries in order to make those plants.
So if the requirements are going up significantly in that industry then technically when. We are, you can say that we are secondary benefit of this thing. And a lot of new plants are. Also coming up, be it steel or be it anything. Recently we had won an order for the bullet train project as well. So LNT is doing that project. So we have Given a few machines. Over there as well. So if you technically see that all. These demands are picking up on a. Very fast way and this is the reason why we could actually do a 150 plus crore capex this year when.
We were only projecting 100 crores. So this kind of demand came as. A surprise for us as well. Like we were also not expecting that. In X1 towards the end side of. H1 we will be getting so much. Demand and because demand side is more in the H2 part generally December to. March we get a lot of demand. But this year like as I told you since the renewable energy part is going up quite well. So this has given us a really. Good understanding that where our industry is heading.
Satya
Right. And sir, when you say renewables you are referring to mostly wind right? Or is it also includes other parts of renewable.
Dhruv Jhanwar
So see other companies might be into wind. I’m sure we are. We don’t have any exposure in the wind energy segment because for wind energy you need more than 750 ton and 900 ton machines. So right now we feel that that market, that particular market segment does not. Have good yield because the number of. Machines in those industries are going up significantly. And recently the government had also raised a new rule that the average height. Of the windmills has been like suppose if it was 10 meters then it.
Has been moved to around 11 or 12 meters. So because of that most of the 750 ton machines are now not usable. For the wind energy segment. So. So we did not take that hit. Because we were not in the wind. Energy segment and we are not even. Planning to get into the wind energy segment anytime soon because the yields in that particular segment is not great right now.
Satya
So our renewables sir is mainly solar.
Dhruv Jhanwar
Yeah, it’s mainly solar. And the battery storage.
Satya
Got it, got it sir, on this only sir, one quick question follow up on this is we’ve have like a lot of great names in our client list and you know how, how did we sort of like what’s our offering that such big names are coming to our in a short span of time. Relatively short span of time sir, what are we doing differently? So I just trying to understand that.
Dhruv Jhanwar
Yeah, so see if you technically see. If I’ll be very honest with you. We are into this industry since 1997. So we have always worked with the bigger companies. Now the thing is that in like. We like we had given a press. Release last year regarding this thing that we had a family separation where our. Side of the family had taken over this whole company in FY24. So then we had restructured the whole company and now we are only focusing on it with. On this business which is our core revenue generating business.
So we have experience in heavy equipment hydrating. So we have transformed the whole company. Into an infrastructure phase company. So the point, the point being is that the. We were always in links with LNT Reliance. We were always the vendors. It’s just that right now everything is being restructured. That’s why it’s looking like we are. Newcomers in this industry. But it’s not like that because of. That reason why we were always vendors. It’s just that we had to shift. Everything and get the whole company restructured in the last two years.
Satya
On the receivables front the receivables are pretty high and I was also comparing it with the comp to another component. But overall also receivables seem to be on the higher side. Yeah.
Dhruv Jhanwar
Any,
Satya
Any commentary on that? Is it expected to stabilize and, and why is it so high this year.
Dhruv Jhanwar
It is expected to stabilize is that this particular, this financial year has been a like. Like a V shaped demand cycle for us. So the whole point is that since we are adding so many machines like our projections were just as I told you on a 400 crore capex side. Even though one and a half years. Is left we are already done with. More than half of the capex cycle. So because of that the receivables are going up. But of course as I told you. That the lead time is also there. So because of that particular lead time.
Of 1 1/2 the receivables are still showing a lot. But over the next few quarters you’ll be able to see that it blends. In quite well when our top line also goes significantly higher. This quarter we only did 8 crores of top line. But in the upcoming quarters this top. Line shall go up because our monthly billings have significantly gone up. So once you match it with the top line on a yearly basis I’m sure the blend will like will be. Able to judge better.
Satya
One follow up question, if I can continue or I can fall back in the queue.
Dhruv Jhanwar
Absolutely, you can continue.
Satya
On the. It’s a more of a bookkeeping question sir. In the balance sheet that we released in the September quarter there is this large entry of non current liability. And so what do we include in that?
Dhruv Jhanwar
Yeah, so the non current liability is actually the machines we purchase. So we have a very short moratorium period for that. Right. So because of that we purchase the machines on that particular, with that particular logic behind it. So that is the reason why there. Is a spike in the non current liabilities. But of course when it comes to. The, when you’ll be seeing it on a annualized basis you’ll be able to see that it’s a, it’s again balanced out. As I told you that like in. H1 itself, right at the end of.
The X1 like. On the inside of. H1 we did receive a lot of contracts. So just to make sure that the. Machines reach on time. So this is the reason why we had to make sure that the funding. And all before the funding the machines had to reach the site because of this particular reason. There is a temporary upside in that. But it will all, it will obviously go down next few quarters.
Satya
Right. So and in our segmental revenue split that we give there is a heavy equipment hiring line item but there’s also an others which in September was a large about more than a crore and right now it’s a negative entry of 1.6. What does that say?
Dhruv Jhanwar
Yeah, when we buy a lot of machines for the FOC part the SEA. Of course fares we do get a lot of credit notes as well. So this is just a accounting entry. Of those credit notes entry. So whenever the suppose if you’re receiving. The machine worth 5 crores and with. That 5 rows of machine we also. Get 10 lakhs of spares. So these pairs are then utilized. Right. So it’s just an accounting entry for that because this is free of cost. So somebody has to pay for that thing right in the books. So it’s just an entry thing.
So that’s why last quarter whatever goes. In it is offsetted to this bottle.
Satya
So the number that we should look at is the heavy equipment hiring line item or we should look at the net of.
Dhruv Jhanwar
Heavy equipment hiring. Yeah. And in the next financial year we’ll. Move to a single revenue stream segment. So we’ll just have one revenue stream that will be the heavy equipment.
Satya
Got it sir, Got it. Fall back in the queue.
Dhruv Jhanwar
Yeah, sure. Yeah.
Aakash
Thank you sir. The next question comes from Mr. Digant Bump from SVIP Capital. Please go ahead sir.
Digant Bump
Hi sir. I, I congratulations on a great set of number but my question’s already been answered was about the 6 segmental revenue, the other is in result. Yeah, yeah, yeah.
Dhruv Jhanwar
We had a lot of questions.
Digant Bump
So, so, so the basically the loss that is being shown is, is basically the utilization of the free items that we utilize.
Dhruv Jhanwar
Yes, yes, yes. So it’s like we had a lot. Of see if you are buying 150. Crores of assets in this store in just under two quarters, obviously that amount of freezer sums up to a massive amount. Right. So it’s just to offset that amount. Because it’s actually a part of our heavy equipment segment only. But technically it is not so because. That is the reason why there was another line item we had to add or else this is the only way to do it properly.
Digant Bump
Okay. And. And the assets that are showing as 11 and a half crores, that is what is still available. And that eventually will be shown as losses in the coming few quarters.
Dhruv Jhanwar
It will be used in the machines. Right. So it’s not a loss. It will be used for. Yeah, of course,
Digant Bump
Of course. Just, just for accounting terms it will be shown as a lawful.
Dhruv Jhanwar
Yeah, yeah, yeah. But we have utilized all our, most of our focs. So I don’t. I’ll have to check what you’re exactly implementing to once.
Digant Bump
So in this, in the same segmental wise revenue assets, liabilities results. If you see there is segment asset written in that 3C is others which mentions 11.43 crores. Segment asset, segment liability.
Dhruv Jhanwar
Oh yeah, yeah, yeah. That’s right. That’s right. So if you see that on a. 200 crore block we have received a lot of FOCs and all these things. So just an asset adjustment thing. So it won’t reflect as exactly losses because it will be adjusted with our heavy equipment hiring income. Right. Yeah,
Digant Bump
Right.
Dhruv Jhanwar
That’s why it’s in the segmental thing and not in the others other income thing.
Digant Bump
Okay. Sure,
Dhruv Jhanwar
Sure.
Digant Bump
Thanks.
Aakash
Thank you, sir. The next Questions come from Mr. Arisha Malik from Artha Advisories. Please go.
Digant Bump
Yeah, hi. Actually I just started looking at this company and I wanted to understand as I’m seeing that we have industry leading margins right now compared to our peers. So I wanted to understand what are we doing differently and what is there anything like is our equipment better or what is it, will it be sustained? Like will these margins be sustainable in the future?
Dhruv Jhanwar
So see the major part is that why we are clocking 70% EBITDA margin. The major, major reason is that we. Don’T have to pay for any kind of maintenance for the first three years because it’s covered by the OEMs of late. So that is the reason why we. Don’T take an additional 5% hit which. Most of our competitors are taking. So this is, this is the major. Reason why we are clocking the 65 to 70% range. But eventually post three, four years when the maintenance also kicks in, then all. These. Like then the, when we’ll be.
Gaining around 60 to 65% EBITDA margins.
Digant Bump
Right. And the next question is I wanted to understand the split between our source of funding like how much is it through internal approvals and through debt funding capex amounts.
Dhruv Jhanwar
Yeah, most of it was from the internal approvals. We are extremely cash flow positive right now. So because of having positive operating cash flow that is the reason why we. Can reinvest in the machines. So when we buy machines we buy. Machines at 100% LTV either a three. Year funding or a four year funding. So our repayments are also quite fast. And we have raised two equity rounds first one and a half years because of those. Because with these cash flows we are. Able to buy even more machines.
Digant Bump
Right. And I wanted, the last question is I wanted to know that what, what’s our longest order book at the moment? What the long duration order book. What’s like can you give some updates with that or any detail?
Dhruv Jhanwar
See our first ever machine which we purchased was for like on this particular. After the restructuring of the company we had given that machine in general. So it has been two years already. That machine is still running over there. So technically two years is the longest like the longest work order we have had till now. But whatever contracts we have recently entered, all our 12 months and above contracts. And, and we strongly feel that we. Have entered in the phase one of these particular projects and there are still three more phases to go after this.
So we do see that there is good, good revenue visibility for the next. Two or three years because until these projects are made like these projects are finished, our machines will not be leaving the sites.
Digant Bump
So as of today what’s how many like what’s the amount of future order book that you have received?
Dhruv Jhanwar
We have received around 48 crores worth of orders. The nine month balance sheet P L point of view. So till 31st December our net order. Book stands at 48 crores. Recently in the past one or two. Weeks, the past two weeks we have. Received a few more contracts as well. So there is, we are currently as of if you’re talking about today then we are at around 55 to 56 crores.
Digant Bump
And what is, what are the, what is the execution timeline we are looking at for this order book?
Dhruv Jhanwar
So for this particular order book we have already started the execution. All the machines are at 100 utilization as of now. Our last set of machines which were the 110 ton machines and the 150. Ton machines have also been started on 10th of January. Around 10th of January. So right now since we are talking. We are at full capacity right now.
Digant Bump
So 11 to 15 months. Like can you give any guidance on the timeline?
Dhruv Jhanwar
Yeah. So from December this year to last. Year to December this financial year will. Be plotting 48 crores of revenue. If you take 55 crores of revenue even if you stop expanding. Right.
Digant Bump
Okay. These
Dhruv Jhanwar
Calendar months. Yeah,
Digant Bump
Yeah. Okay. Thank you so much.
Aakash
Thank you. Sir. The next question comes from Mr. Yashtana from I Thought PMS. Please go ahead sir.
Yashtana
Yeah. Hi. I’m also new to the company and I think my questions have been answered. It is regarding the funding of the CapEx. So I think you mentioned that you’ve done more than half of the budgeted 400 crores capex. So again I think I missed the part where you mentioned how have you funded that half and how are you planning to fund the other half from the internal accruals. And if you can also mention the 9 month FY26 cash flow that you have generated it.
Dhruv Jhanwar
Can you please repeat the last part of the question?
Yashtana
The cash flow or nine month cash flow that you know you have generated.
Dhruv Jhanwar
Yeah. So see as I told you that we are currently at. We are generating good amount of cash. Flow answering this question of the 200 crores of CAPEX we have done so. As I had mentioned earlier that we have raised two rounds of equity which. Has helped us to buy more and. More machines and to mobilize the 200 crores worth of machines after this, whatever. The machines have been deployed we are gaining good cash flow from them. So internal are quite nice right now. So with this particular internal accruals on a monthly basis whatever cash we are generating we reinvest those that cash into buying new machines.
So this is how organically we are. Slowly and steadily growing our asset base.
Yashtana
Okay, got it. And if you can mention the 9 month cash flow number if possible.
Dhruv Jhanwar
9 month cash flow numbers we will have to check. We can connect offline once because nine. Months will not join the balance sheet. So for that I’ll take some time. To check the books and get back to you. You can talk to Rishabh from confidely. And we can connect after the call.
Yashtana
Sure. And the other question that I had sir, so right now currently you mentioned that we have orders. The order book is close to 50 crore plus and the orders are for a timeline of 12 months and the utilizations are full. I wanted to you know ask you what happens or what is the risk of non utilization of all these machines that you are buying? Right, because we are doing a huge capex and expansion and we are giving out the machines. But is there any clause wherein the customer can sort of give the machine back or cancel the contract?
So what is that risk of non utilization in the business, if at all?
Dhruv Jhanwar
Yeah, yeah. So see the customers can de higher our machines but if the machines they have to give us a 30 day. Grace period and post this grace period. They will also have to pay for the one side of the mobilization of the machines. So technically this is a huge chunk of money. Because for example if I’m, if I’m renting out a 260 ton machine. So hypothetically I’m saying that if I’m. Generating 15 lakhs of income on a. Monthly basis from a 260 ton machine. Then if the contract during the tenure is dehad, if we get dead then.
First of all we’ll be needing a 30 day grace period. So that’s equivalent to a 15 lakh additional income. Plus the mobilization of that machine will. Cost if from Chennai to Gujarat. The if I want to transport that one machine the mobilization cost on one side is around 2025 lakh. So we’ll be getting that as well. This is the major reason why generally. Nobody gets dead very easily until unless. You’Re doing a bad job. So this is a very big reason. And till now whatever machines in whichever. Sites we are given, most of the machines are still running because the projects.
Are not even close to the finishing part. So that is the reason why we. Have good clarity on these side.
Yashtana
Got it, Got it. And so one last question. So I didn’t perfectly get. So I, I think you have some understanding with the OEMs where you don’t have to pay them for a couple of two or three years and then you have to make the payment. So if you can just help me understand what the exact terms, terms of the contract are with the oem.
Dhruv Jhanwar
No, no, this is, these are all normal fundings. So these are all part of CBC fundings. It’s just that for example if I’m like if you’re getting 100 crore order. From maybe Reliance then to mobilize 100. Crores worth of machines it is not easy, right, to get 100 crores of. Debt at a single goal. So this is the reason why we. Do get some small moratoriums from the. OEMs as well for the smooth operational part. So it’s not that we get such lucrative deals Also but it’s just that. We make sure that we do like.
As soon as the machines have released. The site we start repaying them in. Terms of long term borrowings only which. Is the CVC funding for the banks.
Yashtana
Okay. Okay. All right. Thanks and good luck.
Dhruv Jhanwar
Thank you.
Aakash
Thank you sir. The next question comes from Mr. Manish Jwan, an indigenous. Please go ahead sir.
Manish Jaiswal
Yeah. Hi sir. A very good set of number I have gotten your company from last one year and I have to say you. Right now.
Dhruv Jhanwar
Yes, yes. So like 40, like 50, 55 crores. For the order book. Just do the math. On the basis of that this order. Book will keep on going down as. Well and up as well on a very fast basis. Because we have contracts, right? For example if a 250 ton machine. Contract is expiring in February, so technically. Speaking I just have a 30 lakh contract left. But if it gets extended another 12. Months then I’m again good with a 2 crore order. Right? So because of that we are currently at our current pace.
We are very confident that we should. Surpass that number as well. Because this financial year if you’ve seen. The first three quarters itself, we have. Done almost 19 crores of revenue and our guided revenue was 20 to 22 crores. And now we are at peak capacity. So this year we will be surpassing. By a good percentage. So this will help us to get. Closer to our FY28 revenue targets.
Jayesh Shah
Okay.
Manish Jaiswal
Because
Dhruv Jhanwar
If you stop expanding we should. Be doing 55 crores of revenue for. Sure with our current.
Manish Jaiswal
Very nice, very nice. And that’s where your pat margin will be in stable 30.
Dhruv Jhanwar
It will be anywhere between 25 to. 30% because in the first two years we get good amount of depreciation because. The machines are absolutely brand new. But eventually in the next three to four years when we do have to pay taxes on the income side, sorry, income tax side then the spat margin will slightly bore down. But it’s not a big thing because. We will be churning our machines and we will be buying more machines as well. So for the next 3, 4 years. This 25 30% margin should always be stabilized.
See if you’re going on expanding and if you have that hunger that on a 400 crore capex. So we have just said. But if the demand is more then why can’t we do a thousand crore capers also? So if you’re going on buying machines. Every year then the depreciation benefit is also a lot. So we don’t have to pay a. Lot of taxes as well, we can make sure that our packed margin will. Always be in a similar range.
Manish Jaiswal
Okay, Very nice guidance overall guidance. Extend Karogi guidance. Like that something.
Dhruv Jhanwar
My target is that let’s reach the 400 number first. See, investors like clarity, right? You all love clarity. It’s not that I can see. I can say anything I want. Right. And that will be part of guidance. But it’s always better to be practical. Right now with our company’s size we. Feel that 400 crores of capex is. Somewhere where we can reach organically. If we announce a thousand crore capex journey which the demand is there but. Obviously for the banks and all to get to give us more and more. Limit, it takes time.
Right. So because of that 400 is a. 400 to 500 is a genuine number. We feel that with the current internal. Approvals you can easily reach there. Now in order to go to 1000. Crores then we’ll be needing further internal. Approvals and the demand should also be like that. So that’s why we don’t want to overcome it anything. Of course once you are done with the foreign. It’s not that we are just going. To sit and relax. Right. As well. Right.
Manish Jaiswal
Okay. Okay. Okay. I think. Right. With the pat margin of around 25, say 30%.
Dhruv Jhanwar
Yes, yes, yes. We. We genuinely feel that there is a very high chance because of the kind of demand we are seeing right now. But we don’t want to commit to anything. But with our current order book we are already 55, 60% there and it’s literally two years. So we are on a good track. We don’t want to overcome it anything. But we are very strongly, we feel. That in FY27 see if we are able to generate more demand before the upcoming monsoons then it is going to be a very good thing for us. Because if we are able to make sure that we can do another hundred crores of Apex.
If you are getting that demand in. The next six months only then these machines at. When a 300400 crore growth starts generating revenue and positive cash flow then the real thing starts happening. So right now if you see our 200 crore blocks has now started generating full or like is it. It is at full utilization. So maybe in the next few quarters. You’Ll get more clarity on where our top line is going to go. But yes, if, if we get one. Or two more projects like Jason Miller. Recently, if they are able to get those kind of projects then hundred percent.
We can try to surpass that.
Manish Jaiswal
Okay, thank you and all the best. All the best. Thank you, sir.
Dhruv Jhanwar
Thank you so much. Thank you.
Aakash
Thank you sir. The next next question is a follow up question from Mr. Satya, an individual investor. Please go ahead, sir.
Satya
Hello. Hi sir. Thank you for the follow up. Sir. In steady state, what will be our asset turn like? Be like
Dhruv Jhanwar
We want our asset turn. To be very low. Because the when we send a machine to a plant. So we wanted to be there till Jitna time, right? Because for us to keep churning that it’s not a good thing. Because if the machine is going from. Like Chennai to Gujarat it takes 12 to 15 days. So if we keep turning our machines a lot and we get shorter term. Contracts then that additional 15, 20 days. Of revenue will like we’ll start taking hit in that.
Satya
Right?
Dhruv Jhanwar
We would love it if our machines are working in the same turn for the three years, four years, five years, six years.
Satya
Differently. Sir, I want to understand. So
Dhruv Jhanwar
How
Satya
Much revenue can it generate in a year?
Dhruv Jhanwar
Oh, that way. Yeah, yeah, yeah. So see it depends on different kinds of assets. Okay. If you are purchasing the smaller machines like 100 tons then the top line in those machines is more because the. Operational cost is also more. So the net blended deal will come similar only. But for example if I’m buying a higher turning machine like a 250 ton. 500 ton machine then the revenue that machine will be generating and the cost of operating those higher turned machines is very low.
Aakash
So to
Dhruv Jhanwar
Be on the safer side, on a lower tonnage machines we can generate up to 3%, 2.83%. With over time we can also go. To 3.5% of net revenue. But in the higher tonnage machines our. Net revenue will be two and a half percent only. But the operational cost in those machines. Will just be 0.2% or 0.3%. So our net blended yield will be similar. In both the cases.
Satya
This yield is annual. So I didn’t understand this. As yield you are saying is annualized or. Sorry,
Dhruv Jhanwar
I didn’t mention that. It’s a monthly basis. Yeah, like 3%, two and a half percent. Which I’m saying is on a monthly basis. Got
Satya
It. So about 30, 35% on an annual basis. Yes,
Dhruv Jhanwar
Yes, yes.
Satya
Got it.
Dhruv Jhanwar
And see in we get a lot of overtimes, like massive amount of overtime. So we can generate 10 to 20% more yields as well. Like if the yields are 30 per annum and we can in some years we can generate 36% also. Like being on a hypothetical situation, I’m. Saying if they use a 40%. Then it can go up to 48 also. Yeah.
Satya
Sir, what’s our client concentration like generally of the revenue and maybe based on the order book that you have, is it concentrated in a few clients or how is it spread?
Dhruv Jhanwar
Yeah. We have a business mantra that we. Do not work with the local subcontractors. Because honestly if I tell you the. Real truth behind everything, if I’m working with a bunch of companies like Tata, Jindal, Reliance and all I can always. Get their bills discounted if I am on any kind of cash crunch in the future. Right. We don’t have any kind of working capital limit. We just have on a 200 crore. Asset base also we are organically growing. We just have a 2 crore bank limit like OD facility. So right now we are organically growing.
Because we are cash flow positive. But if we start working with the subcontractors, the local subcontractors, their payment will start hitting our accounts in next five months, six months. Because that’s the aging cycle for them. So cash management becomes really difficult if. You’Re working with those companies. So that is the reason why there is a concentration. But only in the blue chip companies. Even in the blue chip companies there is some concentration because not all the. Companies keep doing capex together.
Right. Some companies will do capex this year, some will. Some will be at a finishing stage this year. Some companies will start doing effects next year. So we have to make sure that whichever company is doing capex we are. Actually behind them and working with them. So maybe on a three month basis or a six month basis maybe our order book can come from like 30 to 40%. 40% of our order book can come from one company also. But that is just a thing. That one project has just started. As soon as other companies also keep giving us more contracts, that blend is always there.
That pie chart will always be diversified. But in the short term it can be concentrated. But in the longer term maybe if. You take a 12 month thing then. It will get blended again.
Satya
Right. Got it. So do we have any regional focus or. We are available pan India put in.
Dhruv Jhanwar
We are available pan India. We are working in almost like everywhere. In the east we are. We have lesser machines. Except in Odisha. We don’t have any exposure in the. East but we are working on a pan India business.
Satya
Thank you sir. I’ll fall back with you.
Aakash
Thank you sir. We have another follow up question from Mr. Malik from Art advisories. Please go.
Digant Bump
Hi sir. You earlier mentioned the point about higher depreciation that you get the Benefit of in the first two years. I just want to clarify my understanding. Please correct me if I’m wrong but, but is it, is that also coupled with the GST benefit that would kick in because of the high capex that we are doing so the input credit that we can avail and in turn our cash flows would look better for the first couple of years, Is that understanding correct?
Dhruv Jhanwar
Yeah. So when we buy the machines we buy it in GST billings itself. So of course in the first four. Years, three years, we do get our GST back. But in the revenue top line everywhere. We do not take GS because we do not capitalize that. So technically if you’re seeing if I’m doing a 10 crore revenue, I’m actually getting paid 11.8 crores because GST is not shown in our revenue. But if you see GST is being blocked, right? So like the GST money. So it should be considered in the. Capex side when you do a deep.
Dive into our books then you’ll understand this better. And on the depreciation part, as I. Told you that in the we use the SLM method, we do not use. The written down one. So in the income tax we do get 15% depreciation benefit and in the. Books we on 100 and above we get 4.75% of depreciation and 100 tons. And below it’s a 6.03% deposit.
Digant Bump
Got it. Just a quick question there. Just for example, if you can explain, let us say you know, you’ve done 100, 100 crore capex. I’m assuming the GST should be around 28 odd percent. Correct me if I’m wrong. Now assuming is that you know, in order to pick up a new business that you’re doing, it becomes beneficial for you because your actual equipment cost becomes 70 odd crores and your yield would immediately spike up for that particular year until you get the benefit. Once the GST benefit is done, then the margins will come back or the cash flow initially should ideally look higher because this is ideally going to be a non cash entity.
Dhruv Jhanwar
You’Re absolutely right. But it’s for those companies who are. Not wanting to grow after a certain point, right? If after four years, if my GST. Input is being claimed by me and. I’m stopping the capex cycle permanently that. I am told that I will not. Do any capex then it makes sense. Right? But if you’re growing by more than 18 after four years, like this is after four years, even in one year, like for example, I’ll tell you if my payback cycle is, suppose hypothetically is four years. Years then after four years I will be needing at least 18% of my.
New capex to be done so that. GST benefit comes into me. Suppose that if I’m selling out a machine and buying newer machines then that offsets it, right? Or I can buy more machines so that I can get more GST input as well.
Manish Jaiswal
It’s
Dhruv Jhanwar
All about how you manage it. It’s like capital allocation, how you manage. Your fleet in such a way. Burning cash rather you are generating cash. You have to be very practical enough with that.
Digant Bump
This was, this was a very good point, sir. Just one more follow up question there. So is it fair to assume that you would depreciate the machines in the first four to five years?
Dhruv Jhanwar
The only income tax we depreciate machines in seven years. The balance sheet we definition over 22 years. It’s around 20 years. Yeah.
Digant Bump
Actual replacement cycle for you would be, let us say you invested in new machine today, you would actually replace it 10 years down the line or how many years down the line I am, I’ll tell you my school of thought. I’m thinking about you know, you replacing your machine so you know again churning cash from selling old equipment, again buying new equipment, getting gst, getting a better depreciation which again pumps your cash flows, increases your margins as well because it’s easier for you to secure business at a more competitive rate.
Dhruv Jhanwar
This is what you’re doing, right? Like this is exactly what we are planning. Another thing, technically I shouldn’t say se. But if you technically see that every seven years there is a spike in. The metal prices like the metal industry goes insane, right? So if you time or exit on those years then you can get a. Good 10 extra premium for the machines. Because our machines are literally metal, just an engine, hydraulics and then into new metals. So if you like you just have to be creative, right?
Like if you’re very creative you can. Actually generate more ROI as well. It’s not only for the books, right? Fundamentally you have to make sure that. Your asset is being utilized to its max potential. If you go from the 20 or. 30 year old school thoughts that whatever. Machines I have, I’ll just keep it. Like that, let it go to zero. Value, let it be done like that. So if you do, if you follow thoughts are like the old generation thoughts. Then obviously capital management will be very. Difficult for you because although you think that you are generating good cash, but you actually generating good cash so that’s.
How I see it.
Digant Bump
Thank you so much. Thank you so much sir. That will be all from.
Dhruv Jhanwar
Thank you.
Aakash
Thank you sir. Ladies and gentlemen, if you have any questions please press star and one on a telephone keypad. I repeat, if you have any questions please Press Star and one on a telephone keypad. We have next question from Mr. J. Shah from Shah Investments. Please go ahead sir.
Jayesh Shah
Yeah. Hello. Hi. So congratulations on a very good set of numbers. I just have a couple of questions from my end. So firstly your feet is split heavily. Concentrated in the energy sector. So how confident will you be about the longevity of the contract and are adding fleet as per this sector a requirement like. Hello.
Dhruv Jhanwar
Yeah, yeah. So. So you’re asking one of one question or two questions? Only one. That’s
Jayesh Shah
A, it’s one question. How long will be the. Yeah,
Dhruv Jhanwar
Yeah. So see we are extremely bullish on the renewable energy side because that segment. Is growing very fast. Like very very fast. Even the metro side is going growing really fast. But the projects are still yet to open. A few of the biggest EPC contractors have just won the orders. So it will take around two to. Three more months for the civil work. To be done and then they will get the crane and mandatory requirements. So we are just waiting for those particular things. Now if you technically see we like on the renewable energy side, if you see on a pie chart basis right.
Now we are at 45 exposure to. The renewable energy side. But eventually when we start doing more and more capex in other industries as well and new, new projects keep opening. Up then this blend will obviously come down. Right now our asset base is around 200 crores. That is the reason why around 80, 90 crores of machines are into the renewable energy side. But if you see on the longer. Term picture, suppose on a 400 crore. Block, if you want 120 crore machine. The sector then it’s just 30%. So right now we are getting more and more demand from this segment.
So we are concentrating on this whenever there is. But it’s not that we have stopped looking at all other segments as and. When more and more demand comes from. The other segments we’ll surely shift to. Those segments as well.
Jayesh Shah
Yeah, yeah, yeah. And one, one more question. So Reliance entry in the renewables is a very big. So can you share the contract size, duration and whether this can open the door for other projects and Reliance?
Dhruv Jhanwar
Yeah, so Reliance is one of our. Biggest vendors and biggest clients. But yes, Reliance getting into renewable energy has been a really good thing for us. So if they keep expanding into the. Renewable energy segment or any refinery segment or anything. Since we have endless of reliance, we do get requirements for all these things. So it’s not that reliance is only doing renewable energy. They have other things as well. They are into chemicals, they are building India’s biggest chemicals when I’ll plant as well.
So it’s just that that if you have our vendors with them so you will keep getting work for everything. But yeah, if they are doubling down on any particular sector then it’s a. Really good thing for us because the machinery requirements are in all sectors. Be it solar, be it renewable, be. It metros, be it steel, anything.
Jayesh Shah
So this answers my question. Thanks Dhruti. And all the best to you guys for the coming quarters.
Dhruv Jhanwar
Thank you so much.
Aakash
Thank you sir. Ladies and gentlemen, if you have any questions please press star and one on a telephone keypad. I repeat, if you have any questions please press star and one on a telephone keypad. Since we have no more questions, we may now conclude the call. And I now hand over the call to the management for the closing remarks.
Dhruv Jhanwar
Yeah, sorry, phone was on mute. Thanks for everyone for joining our concord today. I really appreciate you all taking out so much time to listen to us. And it’s been a great journey till now and we hope to achieve even. Bigger milestones in the coming quarters. Thank you so much everyone.
Aakash
Thank you sir. Ladies and gentlemen, this concludes your conference for today. Thank you for your participation and for using DOOSA bus conference call service. You may disconnect your lines now. Thank you and have a pleasant evening.