Unimech Aerospace and Manufacturing Ltd (NSE: UNIMECH) Q3 2025 Earnings Call dated Feb. 17, 2025
Corporate Participants:
Anil Kumar P — Chairman and Managing Director
Ramakrishna Kamojhala — Whole-Time Director and Chief Financial Officer
Rajanikanth Balaraman — Whole-Time Director
Analysts:
Manish Valecha — Analyst
Kamlesh Jain — Analyst
Jagvir Singh Fauzdar — Analyst
Prasheel Gandhi — Analyst
Akshay — Analyst
Ashutosh Nemani — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Unimech Aerospace and Manufacturing Limited Q3FY25 earnings conference call hosted by Anrati Share and Stock Brokers Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star, then feed on the Touchstone phone.
I now hand the conference over to Mr. Manish Manisha from Anurati Share and Stock Brokers Limited. Thank you. And over to you, sir.
Manish Valecha — Analyst
Thank you. Good afternoon ladies and gentlemen. Welcome you all to the 3Q FY25 results conference call of Unimec Aerospace and Manufacturing Limited. We have with us from the management, Mr. Anil Putan Kumar, Chairman and Managing Director, Mr. Ram Krishna Kamajola, Google Time Director and CFO, and Mr. Rajnikanth Balaram Director, over to Mr. Anil for your opening comments. Over to you, sir.
Anil Kumar P — Chairman and Managing Director
Thank you, Manish. Good evening everyone. I’m really excited to be part of this to take investors the first investors call after our IPO listing. So on behalf of entire UNIMEC team, I would like to extend our heartfelt thanks to our investors, partners and stakeholders for unwavering support and trust as we embark on this exciting new chapter. On this new chapter, as a publicly listed company, we are committed to delivering sustainable growth, creating long term value for our shareholders and maintaining the trust and confidence of our investors. We remain focused on executing our strategy and driving continued success in the years to come for customers, investors, partners and stakeholders.
Overall, the last quarter was a fantastic quarter for us from you know, the long term aspects because we made a strong foundation for growth and harvesting opportunities actually. And I will talk about certain small setbacks also while kind of, you know, while at touch basing in the first slide. So. So overall capacity addition to strengthen operations and drive growth. So we have added significant capacity for the future growth and also easing operational challenges and closing on strategic leadership on both sales as well as the operational position to support our future expansion. We have closed out of the position from business reliance and the operational aspects. Lot of the key positions
Focusing on the business units like aero tooling or fission components in patient components, aerospace and non aerospace. A lot of these positions have been closed. And coming to the third point, sharpening our focus on core businesses verticals, streamlining operations and achieving greater efficiencies. As I mentioned here we have created a very strong systems and focus teams and on each of our core verticals to increase our efficiency efficiencies kind of to focus on the margins and the overall revenues.
And coming to the fourth point, working on key SKUS qualifications, the new products I would say when I say SKUS new products qualification and high growth opportunity within our aerospace, nuclear, semiconductor segments to fuel the future growth. So we have been kind of, you know, part of a lot of the fair activities with a couple of our new customers or other emerging customers who are already there and also the nuclear customers where we are working on high value kind of, you know, Work lines where we are getting qualified for the future orders. Okay.
There’s a very significant momentum happened because we created a focus on focus teams on these areas and customers confidence are very high on us on these low verticals. And I would say in a nutshell more on these focus teams or systems and laid the groundwork for stronger foundations, positioning for a mid and long term growth actually. So a lot of these will translate into the stronger business performance quarter to quarter as well as the yearly what you guys are going to see in the future.
So while I would say overall nine months, the business performance has decent growth, about 19% kind of the growth compared to the last year. But the quarter on quarter, if you compare to the last quarter, our performance is little down. Let me be transparent on that because of the two major setbacks that we had which we didn’t anticipate. Also one of the factors was kind of the lease licensing which kind of became anticipated even during the last quarter of last year.
And it was business as usual for our customer as well as for us because you know, Saffron or CSM or any of the customers on the leap end customers like airlines or mro, they were doing regular transaction without any issues. It’s just that lot of the high value, the product lines didn’t come to us and dump us in the form of big order for us, which kind of, you know, had a small setback on the revenue only for the quarter. It’s a kind of once in a decade kind of an experience because even it was not a big issue for our customers because the transaction was going as usual for us as well as for them.
But I’m giving you all the confidence on this. This has been solved already. We have taken care of this. And it’s just that I see that last quarter a small difference was there from revenue or the overall business performance. And coming to the second point, which is, you know, the nuclear segment where we had one of the standard part which kind of, you know, goes into the complete subsystem during the final testing. Okay. Got, you know, kind of had a final technical twitch which we realized when we kind of loaded these subsystems, completed subsystems onto the testing station which we have built in one of our facilities.
So this technical glitch has kind of moved our revenue by a quarter actually. Otherwise the manufacturing. Aspect, the assembly aspect. All these have been taken care. It’s just that that one bought out item which is approved, which is bought by one of the approved vendors in you know, by our nuclear customer. I kind of had the technical pitch where we had to send all Those items back 11 of the item items back to requalify, retest at a year and then we got it back and even that problem is also solved.
It says that we have, we lost that particular timeline because we have a limitation or capacity issue on the test station. Because these have to be every assembly that you build have to be tested on our substitute on a test station. And you know, once you lose that capacity on the test station, I think you can’t regain. So that’s kind of, you know, the bad news. But we have learned a lot from that as a company, as a group, we stay confident and our customer, we gain more customer confidence with the kind of process that we adapted, the kind of how we kind of address all these challenges and we came out.
So I would request Ram, our CFO to take care of the rest of the slide and then we are happy to kind of answer all your questions after the presentation. Thank you.
Ramakrishna Kamojhala — Whole-Time Director and Chief Financial Officer
Thank you Anil. Good evening everyone. My name is Ram Krishna. I’m the CFO co founder here. Next couple of slides I’m going to touch base the company overview as well as you know the financial overview, the slide number four, the business overview. So here quickly while Unimic, you know the focus of Unimic remains same. We specialize in machine engineering and manufacturing. The critical system and components now predominantly supporting to MRO tooling know and ground supporting both in mechanical as well as you know patient parts segment.
So the business remains same. The focus of Unimic is high mix, high complex, low volume category is again you know continue to focus on that you know dividing into both addressing both into build to print and build to specification segment. And while now business segment wise as you you all know like we remain focused on two major segment. Aero tooling, MRO tooling where we manufacture you know the patient assemblies are aero tools for MRO for aero engine segment as well as airframe segment and coming to patient parts and assembly segment.
While aerospace remain focused they also focus on defense, semiconductor and other emerging sectors in this segment. While the nature of both work in the fly you know are completely different and we have a separate facility and separate team to focus both the segment aero tooling as well as fission while coming to the other parent other aspects of the financial or business the revenue. New for the nine months ended we close at 174 crores wherein 95% now is exports and in terms of the other the main key enabler which is the the SKU qualification and number of.
Number of eligible SKUs wise no we are close to 4000 slightly above 4000 you know SKUs we are so so far qualified over 8 years of time and in terms of facilities as you all know like you know we operate into two facilities with the 1 lakh 80,000 square feet and the only development is like you know we we are now added you know another 60,000 square feet which, which is now about to kind of you know inaugurate kind of thing and it’s almost ready and we are able to use that.
So coming to customer side. Yeah strong customer pipeline and customer base is there to say customers we have overall from seven different countries now as I told like remain we are focused on the export export segment and industries aerospace we are still strong and nuclear is going to be definitely our next priority. In addition to the central semiconductor energy segment. Coming to the next slide which IS slide number 59 months highlights here in a nutshell as I mentioned the revenue perspective we are at 174cr Comparable from 9 months of last year from 146 to we have moved to 174 which is 19% growth and EBITDA side 64 crores we gained 64.59 months EBITDA and PAD 34.2 crores.
While profitability wise in terms of margins we have remained stable and we have shown a growth from the last nine months last year period. Other aspects of operational performance which guide you in terms of growth over the last year to now. Our last last year into now which is nine months customers wise as I mentioned you know, you know the onboarding is quite good so far no. 9 new customers in this nine months we have onboarded total 25 number of customers SKUS wise no in the tooling segment continue to get qualified do you know high complex high tools now we have continued to do that from the existing licenses you know as of now overall you know from 2000 to 4000 cases and orders as of now as of 31st December 103 crores we have and a new customer at that time, you know nine, nine new customers.
You know we were working you know in pipeline capacity wise as Anil mentioned chairman mentioned like this significant capacity added you know from 202 lakhs to 4 lakh more critical you know high end missions were added. You know, right now, you know, the majority of the addition happened, you know, in November and kind of December. So utilization seems to be high, seems to be low. But, you know, utilization in about 18 months to 24 months now is going to be optimum. Utilization would be there when. To handle this growth definitely you know, key people and you know the leadership team is definitely required which we did in the last nine months. So the head count moved from 384 to 661 which includes leadership team for the both the segments. And most important thing is last quarter was you know lot of skilling activities in terms of you know operational, you know training as well as you know the on site training, you know has been conducted successfully.
Going on to the next slide, slide number 6 overall financial highlights. Which gives you kind of, you know overview of overview as to how from the last couple of years we have moved revenue side, you know, definitely, you know, but end, you know would be there and you know by year end and EBITDA margin levels, you know any point of time like you know 35% level, you know we are, we are always showing you know and in terms of pad margins. So you know it’s remain constant and strong.
You know showing more than 24, 25% level in terms of the return on capital employed and return on equity while you know post capex edition or an asset edition, you know. So in the last November December, you know there is a the utilization of assets perspective. You know it is going to be futuristic. While you. You all appreciate that now as of this quarter and maybe in a couple of quarters now the ROCE is going to be slightly lower. But you know we are confident that now over 18 months, 24 months. No it is back to normal and fixes turnover ratio is also as I mentioned earlier that it is always 3 to 3.5. You know kind of turnover ratio where we always maintain, you know once assets coming to a full utilization for the year.
Coming to the next slide. Slide number 7 Quarter highlights this quarter. You know, definitely it’s less than our expectation as a quarter again even if you compare with the last quarter or last year quarter it is definitely low. And yeah as Anil mentioned, you know quite unique challenges we are facing in terms of you know customer license renewal as well as no nuclear power. You know one of the standard technical which as mentioned, you know has caused us to spend more time on you know falling out. You know this technical issue and you know resolving that while good parties. I think this is not no more you know any issue now and we have resolved and you know we are back to normal.
In addition to that the last last quarter, you know all the kind of, you know that the efforts put in more towards no hiring the talent. As you can see like you know in the first slide, you know we were in a 380, you know, kind of in head count now 661 we have more. Majority of the talent pool enhancement happened in the last. Quarter and prior to the quarter whomever we have hired, you know for the majority of the training happened. You know it’s the time that know that people hiring people training, you know the efforts are gone in and next in facility expansion. 60,000 square feet. You know aerospace special economic zone facility has been you know now completed in and you know it got you know kind of put to utilize now.
So while the the quarter last quarter kind of you know more of like the facility and alignment, you know from old facility to its enhanced facility and even you know the other facility where PV factory where in a nuclear power segment you know working, you know there also innovation work was happening and a lot of missions you know were more to the new facilities and you know existing facility almost continue missions were allowed in Q3 alone. You know out of 17 new missions which we planned in IPO money.
You know so the, the effort, you know the kind of major strategic initiatives, activities, actions were carried out you know in the last quarters which we are very confident that that will give you know good results now in the coming quarters and coming years. Number eight, the consolidated review Q3 and you know and you know the nine months under like you know so as you can see the overall revenue from 53 and you know 9 months 174 crores will be reported and PBT level 19 crores. And overall you know 9 months 69 crores. And PAT level it is for the quarter 15 crores and you know overall 54 crores.
However, a couple of important aspects that I would like to highlight here is you know in terms of cost perspective material cost remain under control. You know so we don’t see any major ups and downs. No in any metal cost consumption level in terms of prices or anything. There’s no major issue as such subcontracting level as you can see, you know slightly it is coming down because of more missionaries are now coming into the facilities and you know own machineries are going to be used more.
So there would be like small you know reduction in some contracting would be notation going forward as well. And employee benefit side definitely referring to the previous times, you know the percentage of employee benefit may be higher. But the question is the important aspect is you know where you know majority of hiring happened and you know where the actual benefit out of that, you know is going to be derived in the future. Other expenses side, you know it is remain under control.
We don’t see any major issue except you know the quarter three. Some of the expenses you know would be kind of one time nature we have seen whether it is, you know, the complaints related, you know, some of the indirect complaints related, IPO cost related, or no kind of, you know, filing cost could be, you know, so we have some cost. We have noticed, you know, which has pulled pull down the EBITDA margin in addition to the sales reduction. And while ebitda, you know, overall, you know, YTD level. It is about 35% relying with you know, any of the previous previous quarters, previous year, you know and we remain content that like you know, the EBITDA level, you know, why leaving quarter three but you know it is definitely going to be, you know, attractive in the next, next coming quarters. Definitely in the next quarter and PBT level and patch level overall nine months we reported 28% level and which is definitely better than in the last nine months or last financial year.
The ninth slide, you know, which I don’t want to highlight too much but here, you know, just like you know, the top four customers know who are our first customers. We feel proud to be in saying this that they remain our top contributor in our revenue and you know, they’re. Their support, you know, is continuing to be growing in addition to the new customers. No, in terms of revenue and the customer conference, an extension to that, you know, we, we are remain considered to be, you know, a green channel partner.
No familiarity of their shipment, you know, wherein now we are authorized to drop, you know, their shipment, you know, different locations, you know, so that, that you know, kind of, you know, benefit, you know, the resilience, you know, through reduction, customer cancellation, geography happening. So yeah, this, this is the kind of, you know, kind of positive side, you know, which we would proud to see always quickly, you know move on to the business segment update, you know slide number 11.
I’ll bring attention to updates web slide number 11. So again the emphasis of business is you know two segments, segment one aero tooling and segment two innovation parts in the segment one aero tooling. As you all know we focus on two major categories of tooling. Aero engine tool, Aerofone tool, Aero engine tool where we focus on you know, the top engine programs and directly work with their licensees and some of the OEMs as well and airframe side as well as some of the OEMs will work while you know aero engine cooling is always the first business which we started and now the focus of the segment or the revenue contributor in this segment is very, very high. And the revenue as of now, you know, coming from the segment is 86%. 86%.
And the growth strategy of this segment is mainly important aspect is like you know, the revenue, the kind of size of the revenue or margins always depend on the kind of choice of the complexity we select. And every time, you know, every you know, quarter every year we will continue to focus on the complex tools and you know, large size tools which, which we have not previously would always know. We will try to attempt that. And another strategy is to some of the Customers maybe you would like to get into potential exclusive contact with them which. Which bind you know for the long term positioning clearly and we always try to get large valid share with this time and you know more important aspect of tooling segment is you know, creating capacity important, you know, the winning possibilities will always increase, you know when you create capacity towards that.
Now some of the key strategic initiatives were already carried out in the last few three and you know, four months now the number one capacity expansion has to know the unit one aerospace, 88 crores capital has been earmarked now for building missionary as well as working capital created. You know, we already created, you know capacity of 3 lakh 72 thousand hours, 370 hours which is the kind of an almost double size, you know compared to last last year this, you know March and 2.
And in addition to that as a vertically is growing and the facilities increasing and business opportunities increasing, we also enhance the talent. From here more than 210 employees, you know were recruited in this segment only. Including the training is also over. And major important thing is now the organization sector point of view. We are adding the first level strong festival people. You know, PNM element people also has been hired, you know, recently. And in this segment, you know, six new customers were added. Moving on to the next segment, you know slide number 12. This is segment two machine component assembly.
The PCA segment is again, you know, while you know this segment is, you know started you know a couple of years before this segment, you know focus on you know precision engineering component as well as, you know sub assemblies and assemblies focusing into beyond AO and beyond ao. While in the segment we focus nuclear, nuclear, aerospace, defense and semiconductor and other emerging industries. You know, while nuclear outlet started focusing gaining more focus on this, you know being you know the more government attention as well as you know opportunity in this segment is very high. Overall, you know, this segment has reported you know kind of year on year growth of you know, kind of 6 crores to 46 crores. You know.
And one important aspect which I would like to bring to investor notice, you know on in terms of revenue from you know the patient component that’s on the segment. While you know, I heard from a couple of investors, you know what I call like you know, so the clarity about the number of patient parts component revenue between tooling as well as additional. So between tooling and fission component segment. There is one nature. One item which is coming from the one of the shock mod which is coming from the one of the customer is of both the nature as well as tooling as well as fishing component nature.
Now, that category of work, you know, the shock modes in the category of work. No, going forward, you know, We wanted to. It can be considered the fission component segment. While you know if you know if any of the investor wants to understand specifically of this value. They wanted to consider the tooling segment. We are happy to give it to that. And it can be considered, you know any. Any. Any of the segment. You know leaving that efficient part. You know new customers are going to be continued here. And this segment growth strategy is. Is definitely on you know creating more capacity and the approval process of you know we can first start the inspection clear approved process.
You know we focus more on that and you know the PCA segment. The growth will depend on you know diversifying across various industries. You know, new clients and mainly the focus on nuclear segment. While we are really banking on you know the new tender which is going to come up in a UMCTR project as well as new projects in the nuclear segment.
So towards the strategies. You know some of the strategic initiatives now we have taken. You know is you know definitely the point number one capacity expansion. So the existing unit to in P. You know in Bangalore, you know under renovation to. To accommodate you know the large capacity of the Missionaries. You know we have. We are maximum 62 crores. You know for this segment. Note what standard Missouri working capital. And already we created 56,000 hours of capacity which is a kind of 31% growth.
And to handle the capacity and the business. Definitely the second strategic initiative important initiative is talent pool has been immense. Hired almost 69%. 69 Number of headcounts were added including SAP kind of category as well. And the new customer acquisition happened in this segment. You know two new customers were added as. And also this segment focusing, you know exploring you know high growth opportunities towards the nuclear. As I mentioned now. So there you know more than you know five to six kind of you know phase no under process now which is the key approval process which decide the you know the size of the next coming quarter order coming year orders. You know.
So the focus is there and you know this thing. And yeah, we would also wanted to highlight the segment. You know a lot of new projects. New projects now which is the. The nuclear nuclear. New nuclear reactor projects are coming up. You know we are gearing up for now towards that as well as you know the renovation project which is EMC card projects also. We are ready for that
And final. And just a second. Mr. Anil wants to add a few things.
Anil Kumar P — Chairman and Managing Director
Yeah. So when you see the kind of you know the slide the revenue segmentation within tooling and precision components. So the precision component there is a drastic change. In that number because one of the customer, one of the product line. Few of the product lines come as you know, the just detailed precision parts, you know, as part of the scope of manufacturing which is purely position in nature only. We kind of move that those parts or revenues into kind of, you know, the fiction segment. But since still it is under the tooling category from you know, overall since we don’t kind of, you know, submit kind of offer the whole assembly solutions there.
So this is kind of, you know come under the Fisher because this needs a kind of, you know, different kind of systems, operational systems and the business unit approach. So that’s where we kind of, you know, kind of move that to patient side. I know it has kind of created some confusion among couple of the investors but we would kind of try to give the regular report to you guys on the tooling and switching companies separately probably based on the customer investor request. We kind of, we are okay to kind of share the customer’s report for you guys.
So but in a nutshell I would say the big portion of you know, the vision component revenue is still under coming from the tooling. We will kind of, you know, give more explore clarity on the slides in the coming coming days.
Ramakrishna Kamojhala — Whole-Time Director and Chief Financial Officer
Thanks Anit. Moving on to the next slide, slide number 13, details of manufacturing facilities wherein we would like to highlight a couple of important aspects and strategic initiatives that we have taken out taken now in the last quarter. So in addition to the two facilities, the third facilities is under discussion and we are very keen to close. The new site which is again in Bangalore is going to come up, you know, in a couple of days, you know, so third facility, you know, is needed towards the enhancement, you know, for the kind of capacity that we are adding for the future business.
And in terms of the installed capacity and utilization perspective unit number one, the mission capacity has been moved, you know increased from 1 lakh 17,000 to 3 lakh 70,000 hours which is 107% growth. You know, this capacity utilization while you know, you know added, you know, very recently the utilization 54% and signaling unit 2 which is nuclear segment and fission component segment, you know, where the capacity enhanced of 43 to 56,000, you know, 31 growth, you know, here again utilization is 50 level.
So in addition to this, you know, as part of the IPObject what you could have noticed that not the new machinery is going to be added, you know, or arrived now in coming, you know, months total, you know, 40, 50 machineries, you know, is going to come up, you know, which, which will add further, you know, capacity to the both units and overall, the capacity utilization, you know, for the next two years. No, you know, we would. Definitely reached to the 90% level. You know, 18 to 24 months. And in terms of manufacturing capabilities, again, you know we remain to be strong in design, engineering, manufacturing, fabrication, special process. And we and electrical electronics like assembly, assembly side, you know, we’ll continue to focus on the segment and strengthen further.
And that was about overall business and financial update. And I would I’ll hand over to my to explain about the strategic initiative.
Rajanikanth Balaraman — Whole-Time Director
Good evening ladies and gentlemen. So I’m now in slide 15. We’ll be talking about strategic and new initiatives. The first Update is on DEI Engineering. As you know, we signed agreement to acquire 30% stake in data engineering. So the work that they’re doing is among the top in the country where they’re looking at filling this white space of developing microgas turbines which is indigenously developed for aerospace applications like UAV missiles, etc.
We feel this is going to be a very, very critical IP led growth for a deep tech company. And as part of this agreement, Unimec will also be an exclusive manufacturing partner for dea. Creating more pipeline and Runway for this partnership also further expands Unimex capability in build to spec solutions and turbo machinery manufacturing. Not just by micro gas turbine, but also in engine manufacturing as well.
Coming to the M and A opportunity, we continue to explore inorganic expansion opportunities that aligns with our long term vision. Making sure we are looking at deals, looking for deals which are accretive to our business. There’s synergy to it and at the right value. And as we find one, we will be closing that in. So far we’re mostly in the deal flow stage. As part of the geographical expansion, we are looking at expanding opportunities in the US and European countries by increasing our valid share both for our existing suppliers and customers. As well as onboarding new customers. We are also in the lookout for collaboration with global players to look at any of the newer opportunities and product lines.
With that I hand it over back to Ram.
Anil Kumar P — Chairman and Managing Director
Thank you Rajneet. So that was our last slide. And Manish. So over to investors. For any Q A
Manish Valecha — Analyst
Rituja, we can take the Q and A. Q any please.
Questions and Answers:
Operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may Press Star and 2. Participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question you assemble. The first question is from the line of completion from Lotus Asset Managers. Please go ahead.
Kamlesh Jain
Yeah, thanks for the opportunity and many thanks for the elaborate presentation. So just one observation. Like we just came out with the IPO and we had also told that this decline in revenue was like say one time in happens in a decade. So why such disclosure was not made in the IPO prospector itself because I believe it would have happened in the quarter, in the, in the October to December quarter why those disclosures were not made there.
Ramakrishna Kamojhala
Okay, so your question is if I understandly why the disclosure not made relevant to the license aspect, is that right?
Kamlesh Jain
Yeah.
Ramakrishna Kamojhala
Okay. Is it revenue down downward or. No, the license signaling is.
Kamlesh Jain
No, no, the development. I’m not talking, I’m not doing on the fall in revenue. I am saying just about the. That key development which happened in that regarding the renewal of your tooling license because you have just articulated in your opening remarks that, that this happens once in a decade. Then why such disclosure not being made during the prospector itself?
Anil Kumar P
Yeah, see, thanks for the question. A good question. It is like we have not anticipated. We did not know that okay there was a license 21 pending at that point of time and we got to know. I think we kind of realized it as we kind of went through the process in probably December or something like that. That.
Okay, the formal timing is still pending. Okay though because the regular business was happening regularly with our customer and our customers to their end customers, be it MROs or airlines or the kind of, you know, OEMs they were negotiating on. It seems that, okay, they were negotiating on couple of, you know, the rebates and you know the long term pricing succession and something not major clauses actually because it has happened with all the pre licenses, not just, not just with our top customers. And I think we never realized because we don’t see their website, customer website or their certificates or anything like that. We were unknown of this factor.
But when we saw the revenue downtrend when we got to know they have not, our customers have not ordered high value tools which are very recurring in nature and volume in nature that they have not ordered procured in the last quarter. When we kind of, you know, executed when we are during last end of the quarter, we got to know that okay, they have not carried the inventory that they used to carry because of the renewal sending otherwise the regular orders that was coming that were coming from their OEMs or their end customers were happening. And we thought, okay, this was kind of, you know, you would be able to recover within like a 1015 crore kind of downtrend without understanding the kind of the detail of the license or complexity or anything like that.
Now that, okay, they have taken care of it during December and it has also been, you know, the order intake also have been significantly improved from probably December, November, December. So it was already a solid issue by our customer without our awareness actually. So we kind of, you know, didn’t notice that significant change. But you know, what hampered our, you know, the quarterly revenue was not just, but not just the tooling license.
Also the kind of, you know, the technical that we had in the nuclear reactor. We kind of, you know, had a setback of almost like we had to move about 7, 8 crore kind of revenue in that quarter which kind of affected this. So the combination is what affected otherwise the tooling alone we would have recovered and we are still looking at possibility of recovering that actually.
Kamlesh Jain
Okay. And I, I hope that whatever such developments happen, we do disclose on the exchanges regularly. I know it’s just a matter of days that you have got listed but I hope in future you would be having a proper disclosure on those particular parts.
Anil Kumar P
Sure. Yeah, we, we kind of, you know, understood the expectations because we are new to this and definitely we’ll take care of that. Thank you.
Kamlesh Jain
Yeah, yeah, thank you. Answer a second on like so currently the flavor of the market is that whole tariff issue. So we have roughly around 77% of business comes from the US so what are the tariffs which currently US imposes or the tariffs which we have in India if anybody imports those materials. So can you elaborate on that particular part?
Ramakrishna Kamojhala
So in terms of the tariff increases, you know, on we heard some of the materials, raw material side, you know, some tariff increase as of now we are trying to understand better. But while, you know, raw materials are you know, materials. As of now, lesser. So in terms of manufacturing on a consumption side, you know, we are not so worried. And in terms of like you know, our supply to the US Know what tariffs, you know, those, those details. No, as of now we don’t know. But I would like to emphasize one important aspect here is no when tooling the business with India is not that they’re focusing, you know from cost saving angle or in a low cost angle. It’s the kind of complexity and know the complex manufacturing with you know, the in time lead time that was the kind of USP that pygenic establishment.
So we don’t see as of now any worry in that. But yeah, to the extent like you know how it is going to be costly for US side you know, you are ready to evaluate, you know.
Kamlesh Jain
But if you can quantify what is the duty currently U. S charges like say whatever material are your product supply.
Ramakrishna Kamojhala
We don’t know actually how much US is charging on our tools.
Anil Kumar P
Most of what we do is egg shipment where a customer basically bears any of the customs duty. We are not aware what this comes.
Rajanikanth Balaraman
In fact we spoke to our customers also a few days ago and then they say okay, they don’t see a big, you know, change in this arrangement. As of now that’s just a speculation. But we are still working closely with our customers and our end customers also because that’s where this one of these licensing, it seems renewable got delayed because you know all these considerations they were making for the purpose of rebate for example. Now more business you do with OEMs or airlines, the more rebate you get. So they were considering these, you know, tariffs and other stuff as far as the factor. But I have not seen any big change in the kind of, you know, the contract that they have kind of, you know. Agreed.
Kamlesh Jain
Thanks. Thanks a lot.
Operator
And next question is from the line of Jagheer Singh from Shade Capital. Please go ahead. Yes, please go ahead with the question. Sir, I’m sorry to interrupt you. We are unable to hear you, sir. Your voice is sounding very muffled. Hello?
Jagvir Singh Fauzdar
Hello?
Operator
Yes, now it is.
Jagvir Singh Fauzdar
Hello. Now it’s better. Ma’am.
Operator
Yes, go ahead.
Jagvir Singh Fauzdar
So sir, my question is related to the Q3 revenues. So this is down. So these revenues are subjected to the net squad or what?
Ramakrishna Kamojhala
So okay, next quarter if I understood your question like you know the impact of this Q3, these two setbacks. Would it continue for the next quarter? Is that your question right. Hope I understood the question right.
Jagvir Singh Fauzdar
Yes.
Ramakrishna Kamojhala
Okay. So towards it, you know, a couple of aspects I would like to highlight here. While licensing side there is no issue because it started out issue and technically glitch in terms of in NPCL segment. You know, while it started out in January kind of mid, you know, impact, you know, would be there from you know, NPCL point of view. While overall like you know, as of now in terms of the revenue, what we see in the next quarter Q4, you know, while you know nuclear power is still need to assess, you know.
But leaving that now we are kind of view that now as of you know, December in hundreds year opening order approximately we have now so 65% conversion is very easily possible. And we see that the 62% conversion is going to happen. So to the extent revenue for the Q4 will happen and nuclear power subject to like you know, testing and all those stuff, you know, capacity constraint and maintenance, you know, test aside, you know, if it happens successfully, we we might see a little bit upside. But no, we don’t want to you know bullish about that aspect as of now.
Jagvir Singh Fauzdar
So in the Q4 we may see around 65 to 70 crore of revenue.
Ramakrishna Kamojhala
Approximately that range. You are right.
Jagvir Singh Fauzdar
What what is about the EBITDA margins? Because in Q3 EBITDA margins are very low around 28. So Delhi we are doing around 36 to 38 EBITDA margins. So what is the target for Q4 and the next financial year?
Ramakrishna Kamojhala
So okay, Q3 EBITDA margin is never going to be a benchmark because that was exceptional quarter. And now that the next quarter the revenue is is decent then you know EBITDA margin we definitely see higher, you know, more than 40. You know, would be there, you know for the quarter and the quarters to come. You know. So because anytime you know we cross revenue of you know, 60ish, you know. So the EBITDA always will be good. So for each kind of thing, you know we, we are confident about
Jagvir Singh Fauzdar
So around 40%.
Ramakrishna Kamojhala
Yes.
Jagvir Singh Fauzdar
And what is the sustainable EBITDA margin for the next year? By 26
Ramakrishna Kamojhala
Sustainable level would be same range would be there sir, extra four quarters. Also next subsequent.
Jagvir Singh Fauzdar
Okay, the next question is related to the order book. Generally we have a small order book. So how we can see the Revenue growth in the coming years.
Anil Kumar P
Sure. See that’s the reason why we kind of, you know, created the focus business verticals also on, you know, the Christian comprehensive where we’ve added a lot of strategic and key leadership positions and to that is to build more resilience and you know, the kind of diversity in the business. So honestly speaking, today we had a very good year of India also.
Other than the leads that we are already working on, emerging customers with emerging customer already who are already onboarded. We had a very new at least 15 to 16 kind of, you know, the leads, strong leads from, you know, the customers, OEMs predominantly both on airframe as well as aero engine as well as some of the defense, you know, the leads. So that is definitely going to give a strong boost for our visibility and resilience and growth actually for the business.
So as a listed company now, we have very different, you know, customers have a very different kind of, you know, the viewing on us because a lot of credibility has been built and you know, with the existing customer, you know, the success story, they want to be part of our success journey going forward. So definitely there’s going to be a strong growth and very sustainable growth kind of, you know, the aspect that we’re looking at now, probably we are working on all the kind of consolidation of all the leads and the emerging customers. Probably in the next quarter you would get to see some, some idea about, about those, the longer visibility
Jagvir Singh Fauzdar
In the, in this budget. So government has a big planning related to the nuclear power.
Anil Kumar P
Yeah.
Jagvir Singh Fauzdar
And many. There are a lot of investment are going in the semiconductor also in India. So what do you take on this semiconductor nuclear power opportunity
Anil Kumar P
Speaking? We are fortunate to be in that segment already. We are in that segment. It’s not a segment that we are kind of, you know, tapping now. We are already presenting these two segments and we are working with a couple of OEM. These are a couple of OEMs because see for example a semiconductor, we are working with OEMs who are manufacturing the lab equipments as well as semiconductor building equipments actually. So there is a very strong traction happening around that. And there also it’s kind of a high mix and high and high mix and medium and low volume which attracts similar kind of margin. That is one thing.
And the second aspect is on the nuclear side as you see a lot of promotion happening around nuclear, both domestically as well as the international space. And also seeing India collaborating with the US for the technology aspects as well as to Europe. So I see a very strong growth story around the nuclear, and we are really strongly poised. To capture this growth. And good thing is we are part of you know, the various kind of, you know, the category of the reactors today. Be it you know, the 700 megabytes, the subsidy key subsystems are you know, the second generation kind of, you know the nuclear reactors are the small reactors that you know, the whole world is banking on.
So definitely I see this is going to be a huge journey and also we are working with a lot of couple of tire ones who kind of, you know, can help help us, you know getting the bigger chunk of the order. So you’re right question was really you know, interesting and we are exploring, we are putting, we’re investing more and more on these segments. And as a you know what is very interesting here or probably I would love to mention here is we are high mix and low volume game players and complex subsystem kind of, you know, solution, end to end solutions kind of makers. And and these are the segments that requires this kind of skill set. And definitely we are in a right position today in the right time.
Jagvir Singh Fauzdar
Last question related to the capacities. Recently we did some capacity expansion and even we have raised some fund in the IPO for the capacity expansion. So if we include all these capacities, so what kind of revenues we can do in at the full T capacity and and in how many years we can achieve this peak capability.
Anil Kumar P
Okay, I’ll divide the question to two parts. No, in terms of our visibility of utilization of the capacity, you know, what we have created, you know, recently and maybe in a quarter it’s going to be created. So these capacity is going to be reached to fullest extent. Now we are content in a two years time. So maybe in the next year approximately 70% you know level would be reaching and subsequently 90% would be reaching.
So what it mean in terms of revenue growth? So while we, we are of course point number one is we are working towards consolidating the kind of leads, you know, recent era India before the previous customers and over onward customer in a two months time, you know we are going to get a good grip on in terms of you know, long term visibility. And annual business plan is going to be released in April months now by that time we will have a you know, better view for you know, you know, from that point of view.
Having said that, I can give an indicative kind of picture more for the next year is you know, 40%, you know, is kind of, you know, growth. You know we minimum, you know we are anticipating for the coming year, you know at a full, full level, you know, but yeah, definitely. You know, we’ll come up, come back, you know, in. In April month, you know, after annual business plan closure. No, a better picture about that. Yeah.
Jagvir Singh Fauzdar
Thank you very much sir. Thank you. This is from my side.
Anil Kumar P
Yeah, thank you.
Operator
Participants who wishes to ask a question may press star and 1. The next question is from the line of Prashil Gandhi from Anandra. Please go ahead.
Prasheel Gandhi
Yeah. Hi sir, Congratulations on the great listening I had. First question sir. In the nuclear side of business, any products that we are planning to add apart from the drive mechanism systems to our opportunity PI.
Anil Kumar P
Sure. So apart from dry mechanism we are working on six, you know subsystems level, you know, key parts such as fuel, equator, you know, ceiling plug, in fitting, shielding plug, you know the. These are all the high value, large size commodity category of the parts are subsystems which you are working on and on. So our plan is to complete around eight, you know, category of parts, you know, while we already taken up, you know, five place kind of thing, you know. So yeah, we already started out of that. No. 3 successfully completed. 92 are in pipeline by quarter end, you know, five critical parts. No in nuclear segment is going to be approved, you know or where we are convent of getting approved from the nuclear power.
Prasheel Gandhi
Sure sir, that was very helpful. The second question is I think a lot of MRO shops that have been set up in India over this in this decade, our relationships help us in gaining higher share of this business in the Mr. Asia side of business. Asia side of Asia region.
Anil Kumar P
Yeah, so that was good question. And see since the demand the at least 50 to 60% of the demand aircraft future demand is coming from Asian region and there is a strong, you know drive and focus to set up the local MROs in India. And we have growing very, very significantly on the, you know, aircraft purchase. So there is a, you know, strong focus on Indian MRO. And, and we are working with our end customers. No, basically we are talking about two to three kind of, you know, the engines that are used on these regular commercial aircraft like be it Leaf or be it already the licensees are there.
And what I am confident of is the kind of valid share that is going to happen from the, from the current. The vendor base of the existing customers definitely is going to be increasing for us considering the kind of the overall cost of the ownership including the logistics. So we are better position. There because we are very, we are a trustworthy supplier for, you know, the kind of, or a key supply chain link for our customers on any of these programs. And we already have a green channel kind of, you know, the kind of status for them with all these customers where we drop ship without them doing any quality check at our site. Okay.
So we have earned that kind of trust and credibility with these guys and definitely will take advantage of this new MROs that is coming that are coming in India. And now coming, coming to second aspect, the MROs where they will use the engine or the aircraft tools that are not under the license agreement with our current customers. Definitely those are something that we are already working and we already have bagged one decent order with one of the OEM and we are, we are working and we are in the process of, you know, delivering a lot of those tools now. Okay. So it’s, it’s very interesting days for us and we are exploring more about it now.
Prasheel Gandhi
Sure. Sir, thank you for this insightful answer and we should wish you the very best.
Anil Kumar P
Thank you.
Ramakrishna Kamojhala
Thank you.
Anil Kumar P
Thank you. Participants who wishes to ask a question may press star and 1. The next question is from the line of action individual.
Akshay
Hello. Am I audible, sir?
Anil Kumar P
Yes,
Operator
You are,
Akshay
Sir. My question is on the US Front. So most of our product goes to US so what are the business risk or our order risk? We are seeing by as the new US President Donald Trump is elected and he is imposing tariffs on various types of goods.
Anil Kumar P
Sorry, I couldn’t hear it fully. Could you just repeat the question?
Akshay
Yeah. What I am asking is that as the new president Donald Trump has been elected in the US So what are the risk arising from the tariff he is going to impart on the all the countries as most of our product goes to the U.S.
Anil Kumar P
So the question is what is the risk of tariffs on our business with us? So as RAM already covered on this topic, we are still studying that. It’s still very, very premature in terms of, you know, the potential things. As far as we know now, there are not any tariffs that has been actually applied to us at this moment and we will keep looking at the developments. Another thing is that these are very critical and. For any kind of a flight operator. Just from a logical perspective we don’t believe they can basically slap tariffs on these very critical toolings and equipment. That’s belief that we hold.
Rajanikanth Balaraman
Adding to that I think these OEMs already have supply chain challenges across the world will also have this kind of China plus one strategy where they can’t afford to have increase again on top of it whatever commercial emission OEMs are there they are kind of planning to kind of you know increase their supply chain spend in India. So that’s a good use for us again knowing that we are using, we’re going to use couple of our existing volumes to leverage on the components as well. So definitely as we don’t, we don’t see any risk currently but once we get to know any of the tariff issues definitely will communicate to the larger community.
Akshay
Thank you so much sir. Okay. Okay sir,
Operator
Our next question
Akshay
And for my, my second question is on the capacity addition. So currently we have around 3 72,000 70 hours capacity and we are going to add 23 machines. So our whole capacity our consolidated on one plant one will be 4 lakh 76,000. So after the using the proceeds of the IPO as per the objects what will be our consolidated capacity in plant one as well as plant two? So and what is the, what is the expected utilization in the coming years?
Anil Kumar P
Sure. So after the machines up the another 23 machines in unit one and maybe 27 missions and unit two that are already ordered in the, and the process of arriving it. So the capacity you know going to be added, you know somewhere 1 lakh and 1 lakh 18,000 respectively. So more than you know 5 lakh hours of capacity would be available in both the plant, you know utilizing you know utilization is from May onwards maybe you know the utilization would start now however you know by March end by in 12 months and you know we would be reaching to 65 to 70 utilization of capacity.
Both you know of you know nuclear and aero tooling and nuclear segment put together. I’m telling and the next year, subsequent year, you know in 24 months time, you know we are, you know going to get fullest utilization. Yeah, more than 90% of possibility would be there.
Akshay
Okay, thanks for the answers and all the best for the future.
Anil Kumar P
Thank you very much.
Operator
Thank you. The next question is from the line of Ashutosh Nimani from JM Financial. Please go ahead.
Ashutosh Nemani
Am I audible?
Anil Kumar P
Yes.
Ashutosh Nemani
Yeah. My question is again regarding the revenue decline only. I could not understand when we say delay in customers needing their engine tooling licenses from oem. So is there like lot of higher tool inventory at the OEM end or is there a lower demand? Just wanted to understand and you told it is that issue is solved and we are experiencing a recovery in demand in Q4 people. Right.
Anil Kumar P
So as a supplier, the young supplier, we depend on the customer orders from our licensees, predominantly licensees and OEMs, in this case licenses. Because a lot of the effect has happened because of the licensee. You know, the orders and the licensees work with the end customers like OEM MROs and airlines. And typically based on the kind of number of shops among you MRO shops that has been set up or the kind of, you know, the maintenance activities that is happening in the field or the kind of number of new lines setting up in the OEM or mro, they will have kind of, you know, the ballpark forecast based on which they will kind of take a decision on inventory also. Okay,
So high running tools, which has long lead items or bought out items, long lead time for the bottle items and manufacturing items. They will make a decision to carry some of the inventory which are very highly recurring and highly high running or highly convoluted. So which is something that they could not. They didn’t make a decision because of the renewals. Otherwise the regular orders were, you know, the flow down even we didn’t have any impact on the regular orders orders.
It’s just that those high value items, some of the high value items were, you know, the missing for us from our licensees. I think that is why we kind of, you know, it affected our quarter. In fact, when you are, you know, you’re kind of, you know, in a dilemma whether the license, you know, what conditions will, because they didn’t have any doubt or you know, the doubt on the license will get renewed or not all they were, you know, working around was, you know, come up the, you know, the conditions or the terms and conditions that with what kind of terms and conditions they should accept the license in the news.
Okay, so it’s not just with my top customer, it’s also with all the three license. Okay, so this is just as I mentioned, it’s just one time event in a decade which kind of solved. And then automatically from the probably November, December, they started carrying the heavy high value inventories, also in volumes. I think as a result, we are also seeing a very. The strong, you know, the business inflow. Okay.
So that I hope I have answered the question there.
Ashutosh Nemani
Yeah. Just a follow up question. So what is the validation on this license? Is it long term? Like how many years?
Anil Kumar P
10 years.
Ashutosh Nemani
10 years. Okay. Understood. Yeah. Yeah. Thank you.
Operator
Thank you, ladies and gentlemen. Due to time constraints, that was the last question for today. I would now like to hand the conference over to the management for closing comments.
Anil Kumar P
So thank you. Thank you all the investors and shareholders. We value, you know, investment. We value your, you know, business very well and we are, we feel very proud to have all of you as part of our, you know, the investment community. And we kind of, you know, we feel more responsible now and we kind of, you know, we make sure that, okay, we, we stay responsible, we stay as transparent as possible and in creating a long term value or middle long term value for all our stakeholders. So definitely the very successful days are ahead for us.
While I agree that there was a small setback on one particular quarter, but that’s not the benchmark quarter for us. It’s kind of, as I mentioned, it’s once in a decade, eventually. And we stay committed to kind of, you know, the long term, mid and long term growth for all the investors and the company. Thank you.
Operator
Thank you on behalf of Anandrati share and Stockbrokers Ltd. That concludes this conference. Thank you for joining us and you may now disconnect your lines.hank you.