Virtuoso Optoelectronics Ltd (BSE: 543597) Q3 2026 Earnings Call dated Feb. 05, 2026
Corporate Participants:
Vinay Pandit — Investor Relations
Sajid Shaikh — Chief Financial Officer
Sukrit Bharati — Managing Director
Analysts:
Akash Jain — Analyst
Siddhant — Analyst
Garvit Goyal — Analyst
Shreyansh Jain — Analyst
Piyush Jain — Analyst
Dhruv Jain — Analyst
Anik Mitra — Analyst
Nithya Shah — Analyst
Disha — Analyst
Harsh — Analyst
Jitendra Pradhan — Analyst
Akhil Shah — Analyst
Presentation:
Vinay Pandit — Investor Relations
Ladies and gentlemen, on behalf of Captify Consulting Investor relations team I welcome you all to the Q3 and 9 months FY26 post earnings conference call of Virtuoso Optoelectronics Limited today on the call from the management team we have with us Mr. Sukrid Bharti, Managing Director and Mr. Sajid Sheikh, Chief Financial Officer. As a disclaimer I would like to inform all of you that this call may contain forward looking statements which may involve risk and uncertainties. Also a reminder that this call is being recorded. I would now request the management to detail us about the business and performance highlights for the period ended December 2025.
The growth perspective and vision for the coming years. Post which we will open the floor for Q A. Over to the management team.
Sajid Shaikh — Chief Financial Officer
Thank you Vinay. Good morning everyone and thank you everyone for taking the time out and joining this call. I would like to start with the discussion on the financial performance for both the Q3 as well as the nine month ended for FY26. Starting with the quarter third. The third quarter performance Q3 has been a good quarter for us. Kind of a comeback quarter if I have to say in net sales for Q3 are almost 205 crores which is almost double than what we were able to do in Q2. Of course historically as well this is generally a good quarter.
What is important to note here is that the EBITDA margins have been very healthy for Q3 standalone basis. If you see it’s in excess of 11%. The absolute number is roughly 23 crores for Q3 alone. PBD is also very healthy in line almost with the EBITDA it’s 5.1% and in terms of value it’s about 10 and a half crores. PAT margins are also very healthy at 3.4% and the absolute number here is about 7 crores. A little more than 7 crores. So that’s what we have done in Q3. I would just like to you know, add one more point over here is that till last year as a company we were not declaring quarterly results.
However we had given an update in the previous year, a quarterly update, a business update that we have given which contained the top line numbers. So whatever comparisons going forward I’m going to talk about are only on the top line numbers if I have to Compare this year versus the last year. So that was Q3 as far as the nine month numbers are concerned. We have been able to breach the 500 crore mark. We stand at about 505 crores. EBITDA is a shade under 11% at about 55 crores roughly. PBT margin is also pretty healthy at 3.6% and the pad stands at about 10.3 10.3 crores which is 2% of the number.
When you see Q3 of this year versus Q3 of last year in terms of top line we have grown by almost 36%. We have shown a very healthy growth in the EBITDA numbers primarily because of the other products that have come into play. So beyond AC there are other products like the refrigeration products that have started to contribute and moving to that, this kind of a product mix has helped us deliver a healthy EBITDA and hence a healthy PAT margin as well. So this is a brief on the financial numbers that we have been able to achieve over the last nine months and quarter.
I would like Sukhraji to take forward in terms of the business updates.
Sukrit Bharati — Managing Director
Thank you so much and very good morning to all of you and once again thank you for taking the time to join. So post the financial update. Just a quick update on the overall business activities of the company. So over the last nine to 12 months as we’ve been updating, we’ve been investing in not just the AC business but also diversifying our other businesses and we are happy to share that the other businesses have now started contributing in terms of revenue and are becoming EBITDA positive standalone which is helping the overall results of the company to go section by section and division by division.
So AC Vertical, we have launched our own ODM designs which is also shared in the PPT and we have onboarded some additional customers as well based on the ODM designs that we have launched. So AC we are diversifying not just as an OEM to ODM but also with multiple customers over the next three, four months. For the current season we are running on full capacity or we have an order book which expected to run on full capacity for the next few months so that is a good sign. Of course capacity expansions are also planned but they will happen in due course.
The capacity I’m referring to right now is only for NASI capacity that was installed and not the Chennai capacity. Chennai capacity. We have taken charge in January. We Hope that by Q1 the plant will become operational and the real benefit from that plant will only come for the next financial year. So that was in the AC division coming to the next vertical of refrigeration. Refrigeration is also picked up. We are seeing strong demand in refrigeration also where existing capacity again for the next few months in the season looks to be completely booked and we hope we can keep building on that.
And there also the planned capacity expansion that we had earlier planned to do in this current year but we have, we deferred it for about six months. But that also we will continue doing by Q1 or Q2 in FY27. So that was the refrigeration segment. The EMS and lighting segment continues to be good. The expansion that we have planned in EMS is ongoing and we expect to double our ems capacity by Q1 of FY27. So that will start contributing maybe towards the end of next year or the year or in FY28. So that vertical also is doing well standalone.
But the growth in that vertical numbers possibly should come towards the end of 27 or in 28, the fourth vertical of compressors. We are happy to share that we are already at 50% plus utilization in compressors almost three months behind our internal schedule and we have a good order book for the entire calendar year where almost 60% plus capacity is already booked. And we are looking to book almost 70, 80% capacity which is currently installed of 2.8 million in that segment. We also want to see how the government decision on QCO comes in March. Based on that we will decide on a quick ramp up to add another five odd million capacity.
So we want to scale up to seven and a half million if, if the direction from the government is in line with whatever we expect. So that was on the fourth segment, the fifth part of the component business. So the plant, the component plant in Chennai and the component plant in Sanand have also become operational. Chennai of course became operational last year but I think in Q3 it became EBITDA positive. The Sanand plant last month has become a bit of EBITDA positive. So we are. So that is also helping and contributing to the overall movement of the company.
So that was the. That was a quick update. I see a good demand coming from various customers across product segments. Of course this month and this quarter and next quarter are our peak seasons and we hope that with a decent summer the number should be at their peak. So I mean that was a brief update about how things are in the company. Thank you so much and I think we’ll open for questions.
Questions and Answers:
Vinay Pandit
Sure. Thanks Sukhrit and Sajid for the detailed update. All those who wish to ask a question use the option of raising. We’ll take the first question from Akash Jain. Akash, you can go ahead and please restrict your questions to two in the first round. Thank you.
Akash Jain
Thanks. Sukrit. A couple of questions. One is I think you briefly alluded to this compressor expansion and the government decision that will hopefully come in March. So if my understanding from your brief is is there then basically the expansion from two point from the current capacity doubling it and also the fact that we were doing expansion to go one level deeper on backward integration and increasing margins that are both contingent on what you what the outcome of that government decision will be. Am I right? It’s not just capacity expansion but also backward integration. Both of them are linked to that decision.
Sukrit Bharati
So the lateral increase in capacity is dependent on customer capacity booking which is an ongoing process. So that may may not happen. I mean that may happen regardless of the government decision. Because if we get, if we are discussing discussion with 2, 3 customers and if we get a strong order book from them, then regardless of the government decision we will go for lateral expansion in capacity. Backward integration will of course depend on the government outcome. So the, the two parts, One is lateral increase in capacity is dependent on customer order book and not so much on the government decision.
The backward integration will depend on government decision.
Akash Jain
But the customer order book to some extent is also dependent on the government decision. Right. So I’m just saying if the government decides to delay or the decision is not as positive as as we are hoping for, then obviously the imports from China continues and to that extent the customer order booking also get impacted. If I’m not mistaken. Right?
Sukrit Bharati
Correct. So if the government says that there is a finite time for which extension is being granted and that is probably a definitive timeline, then also lateral expansion has no impact because still it is a clear guideline that ultimately the decision is favorable. But if there is no finite timeline and it is an indecisive decision, then yes, order booking will also get slower. But the only silver lining there is that regardless of government decision, a local supply chain building is something that brands are trying to do irrespective as long as pricing is similar and we’ve so far been maintaining similar prices with customers.
So I believe the shift will happen. Of course not as fast as it will happen if the government decision is strong.
Akash Jain
Understood. Another very basic question, Sukrit, maybe, maybe you would have answered that earlier in some other con call. See, we are seeing metal prices going up and I understand clearly on the AC side obviously our margin to some extent will be protected by the, by the customer. But can you give us A sense of what happens in the rising metal prices scenario both on margins as well as inventory gains and loss. And how much part of the business is protected back to back by the customer. And how much of the part of the business is something where some exposure or risk we are running.
Can you please help us understand a little bit of that?
Sukrit Bharati
So maximum customers, we are on a conversion pricing model. So there the cost is transferred and the impact to us is minimal in most cases. I mean majority. Currently we are operating like that. There are some customers which are price based where pricing gets done on a quarterly basis. So in that case it is a setback for a specific quarter. But next quarter it sort of corrects itself. So if you ask us, we are not expecting a massive impact of copper prices on our margins in the coming two, three months.
Akash Jain
There may be some impact on the short term because of inventory gains and loss. Also because there may be a delay in passing on some of these costs to the customer. But over a period of time on a rolling basis, you think everything will be stabilized to the current levels.
Sukrit Bharati
Correct?
Akash Jain
Oh yeah. I’ll get to. Thanks. Thanks.
Sukrit Bharati
Thank you. Thank you.
Vinay Pandit
Thank you. We’ll take the next question from Siddhans. Siddhant, you can go ahead.
Siddhant
Good morning, sir.
Sukrit Bharati
Good morning.
Siddhant
So my first question is regarding the 10 lakh units. Is it including the Chennai plant?
Sukrit Bharati
It is. Yes.
Siddhant
Okay. And what is the capacity of the chennai plant?
Sukrit Bharati
About 300,000.
Siddhant
Okay. So can you please give us the revenue breakup for this quarter as well. As for nine months in terms of. Segment.
Sukrit Bharati
You want segment wise revenue breaker.
Siddhant
Yeah.
Sukrit Bharati
I don’t have the exact numbers but for the last quarter or the last nine months, out of the total 500 crore revenue that we have done, roughly 300 to 320 would come from air conditioning business. About 80. 70 to 80 is coming from EMS business. And 60 to 70 is coming from refrigeration. And the remaining is coming from compressor. About 15 odd. Probably from compressor and remaining from components.
Siddhant
Compressor is 15cr.
Sukrit Bharati
That was because on it started mass production only in mid November. Mid November or December.
Siddhant
Right, sir. And sir, are we still sticking to the guidelines? In the last quarter you mentioned that. We are looking at 200 crores of revenue for the compressor business in the next financial year.
Sukrit Bharati
We are. Yes.
Siddhant
So are we sticking to that guidelines?
Sukrit Bharati
We are. Yes.
Siddhant
Thank you, sir. I’ll get back in the queue.
Sukrit Bharati
Thank you.
Vinay Pandit
Thank you. We’ll take the next question from. You can go ahead.
Garvit Goyal
Hi, I’m audible.
Sukrit Bharati
Yes, please.
Garvit Goyal
Sir, in your opening remarks you sound Very positive across the segments. So do you think for this year we will meet our guidance of 800 to 900cr with, with two 2 to 3% net margins and what is the outlook? Looks like Forever 27 across the segments.
Sukrit Bharati
So we are, we are holding on to the guidance. Yes. For this year there’s no change in that. That is point number one. Point number two for the next year we’ll, we’ll give you more accurate numbers probably by end of March or in the April call rather than giving it now. I think we’ll have a more, we’ll have more clarity. We’ll share it with you then.
Garvit Goyal
Okay. And on the refrigeration segment, last quarter you mentioned that you started doing the assembly for a couple of customers. So are you seeing any major demand traction here particularly in this segment and any color on the size of the market in India?
Sukrit Bharati
So it’s a small, it’s not a very big market because the market that we are catering to is the premium segment in, in refrigeration and currently not a massive product segment for us also within, within the refrigeration portfolio. But the, the demand from customer that we have is consistent even though overall monthly value is about I think one and a half, two crores. Not a, a massive number but it is a consistent number. And the size of the market, my estimate for the frost free and multi door segment is between should roughly be about 0.5 million in the country.
So if it is a growing market but currently a small market, the only advantage is that nobody else in the country, no other OEM or ODM is currently doing multi door refrigerators assembly or production in India as far as our knowledge goes. So that was one highlight for that product. But I think it is a slow and steady approach. Let’s see if there is more demand. We will, we will further invest in that segment but otherwise we’ll continue to assemble those products as per customer requirement.
Garvit Goyal
And lastly on the product mix change we are like reporting good margins in this particular quarter mainly because of the non AC products. So what is the trajectory of margins do you think going ahead? Like are these kind of margins sustainable or quarter over quarter or what? Any color.
Sukrit Bharati
So guidance of margin we are still maintaining 9 to 10%. Of course the intention is to have better EBITDA margins but we continue to hold a 9 to 10% guidance and EBITDA. Understood sir.
Garvit Goyal
I don’t back the queue sir. Thank you very much.
Sukrit Bharati
Thank you.
Vinay Pandit
Thank you. We’ll take the next question from Shreyansh Jain Shrians, you can go ahead.
Shreyansh Jain
Hello. Am I audible?
Sukrit Bharati
Yes please.
Shreyansh Jain
Yeah sir, so I have a couple of questions. So first about the starltech Chennai facility. Do they only have audio capacity or ideo audio? Both. And will we be making for V Star only or other brands as well?
Sukrit Bharati
We intend to make for multiple brands not only for them. That is point number one. The point number two, they have both IDU and ODU capacities. So they have. They are fully backward integrated except for molding. Plastic molding is outsourced.
Shreyansh Jain
Okay sir, answer second question. Are there any players who do contract. Manufacturing in deep freezers or. They are mostly dominated by brands in house.
Sukrit Bharati
So there are. I mean of course there is one player who does OEM ODM in this segment solely and there are a couple of other players who are manufacturing for their own brand also and they’re also doing OEM ODMs. So. But totally not more than four or five players in the entire segment who are branding for somebody else.
Shreyansh Jain
Understood. Answer one last question. On the compressor parts are out of 2.8 million capacity. How much are we using for internal consumption? And how. How much of the capacity are we. Going to sell to third parties?
Sukrit Bharati
Our internal consumption will not be more than maybe 0.3 or maybe 2 and a half to 3 and a half lakhs in the next financial year which is about 0.2 or 0.3 million. So. Sorry, 0.0. Sorry. 0.2 million. The remaining everything will be outsourced. We will be for outside customers.
Shreyansh Jain
Okay, so perfect. Answer. One last question. On the washing machine side. How is it ramping up and what. Would be the time to reach peak capacity utilization?
Sukrit Bharati
Washing machine the season starts effectively in April. May. We are. We’ve. We’ve completed the initial pilot and we are looking at a. An. At a field trial stage of the product. We are hoping that will start ramping up towards April or May this year.
Shreyansh Jain
Thank you so much sir. All the best for the next quarter. Thank you.
Sukrit Bharati
Thank you.
Vinay Pandit
Take the next question from Fiuz J. You can unmute.
Piyush Jain
Am I audible?
Sukrit Bharati
Yes please.
Piyush Jain
Yeah. There was some technical with respect to. Yeah. Good morning Sukrit. Thanks for the call and update. A couple of things from my side. You said compressor is a 28 lakh capacity and this is only respect to you said key. We can increase of 50 lakh basis the government decision or something. So can you give some capacity utilization number for current quarter or let’s say by next year. What type of percentage utilization we will be achieving? This and this. This business can be what size? How to interpret this? 28 lakh capacities. How much business this can generate and additional 50 lakh. You talked about additional 50 lakh or total 50.
Just clarify.
Sukrit Bharati
Right. So first part refrigeration market quickly. It is about 22 million currently in India out of which 14 odd million is currently imported. 13 to 14 million is currently imported. The rest is with some. There are the. The large Korean companies are manufacturing compressors locally. So predominantly the balance quantity comes from from them. As per our understanding that is 0.1 0.2. The 2.8 million capacity that we have can achieve a top line of about 400 crores. Based on the product mix and the size of compressors that we make. That is point number two. Point number the point number.
So that answers the second third question. Second question the third part of the question. For this quarter we are looking at a 50 to 60% capacity utilization. And post April we are looking at a 60 plus capacity utilization.
Piyush Jain
Okay. And this capacity will be increased basis whatever Government positive decision.
Sukrit Bharati
250 or 78 to 75 years to 75. 78. Yes.
Piyush Jain
Got it. Okay. Another question is from broader broader perspective. Whatever I’ve interacted you in the past for current year you said if AC business works out maybe 900 to 1000 whether we will be able to achieve that guidance. Considering this Q4 is largely a inventory buildup of PC. And for the longer perspective where we do you see after. Because last 12 to 18 months we have done lot of new product like compressor deep freezers and components or heat exchanger. So what kind of revenue we can see from 2728 where the on on segments start firing.
Sukrit Bharati
So two parts this year the. I mean the revised guidance that we had given for 800 to 900 crores we are maintaining probably so that is point number one. Point number two next year guidance. Of course like I answered previously, we’ll probably share with you by April because once we have more accurate numbers. But it is looking to be a strong year and overall the. The revenue diversification in terms of product mix will be much better than it is now. So we believe AC in the overall revenue will go down will be about 60 to 65% and 30, 35% will come from the other products that we have invested in in the last couple of years or last one and a half years.
So the product mix becomes better. It also helps us maintain 9 or 9 to 10% EBITDA margins overall as a company. So that was the. So that is. That is how it will look like I hope I’ve answered your question.
Piyush Jain
Yeah. Last question from my part is on two parts. One, is this 100 crore PLI, is this factored in EBITDA, whatever we are receiving or it is a significant amount?
Sukrit Bharati
It is. It is factored. It is factored, yes.
Piyush Jain
So till now how much we have consumed this PLI and how much is remaining out of this?
Sukrit Bharati
So in 100 crores the total PLI value that we are going to realize is about 40. The exact number is 37 plus 20. 57 crores.
Sajid Shaikh
57 and a half crores.
Sukrit Bharati
57 and a half Crores is the maximum permissible out of which half roughly has been factored for over the last three years. Half is pending.
Piyush Jain
Okay. And last question, how much share of our business from Voltas has reduced recently or something? Percentage dependence and how many new customers in AC segment specifically we have added?
Sukrit Bharati
So we are seeing a strong demand from Voltas and they continue to be. I mean I believe the numbers that we expect from them are similar or higher than what we did last year. But the other customers, we’ve added three customers currently onboarding, maybe another one customer this season. So four additional customers this year in AC apart from Voltas. But share of Voltas has either remained the same, volume of voltage remain the same or is expected to grow based on the current numbers that we have.
Piyush Jain
Okay, thank you so much. All the best.
Sukrit Bharati
Thank you. Thank you.
Vinay Pandit
You. We’ll take the next question from Dhruv. J. Dhruv, you can go ahead.
Dhruv Jain
Hi Sukh, thanks for the opportunity. So my first question is, you know, related to the inventory issues that we’ve been seeing. Right. So I think couple of your peers have spoken about inventories being spied up in the channel while you maintain that you have a very healthy order book. So is that a risk for the first quarter or do you think that the new customer additions will sort of offse the impact that you may have because of this issue? Obviously everything is dependent on summer result as well. But you know, some thoughts would be very helpful.
Sukrit Bharati
So of course we have a smaller base as against our customers. The second thing was with a larger customer variety I think your inventory levels tend to be higher because you have to maintain a larger variety of inventory. So we were fortunate that last six months when, I mean during the five, six month lean season which hit the industry, we were not sitting on as much inventory as our peers. We were fortunate that way. Inventory levels with customer addition will go up slightly but I don’t believe they will have an impact on numbers. For production, if that is the question.
Dhruv Jain
So I was talking about channel inventory.
Sukrit Bharati
Ah, sorry, sorry, sorry, sorry. Channel inventory. Sorry.
Dhruv Jain
So I mean fourth quarter, I mean from whatever commentaries that most of the AC brands have spoken about, channel inventory seems to be high. So while you said that you have a very strong order book in the fourth quarter, is that a risk at some point of time in the season, you know that numbers may see a dip or because you have a significant customer additions which were not there last year, you think you’ll be able to offset most of it.
Sukrit Bharati
So I think we’ll be able to offset most of it point number one. But point number two, channel inventory I think dried up by the end of. I mean or dried up in the sense it significantly reduced by October, November from whatever discussions we’ve had December onwards, of course the channel has again started buying material and I believe industry has been doing good numbers in December and Jan overall as far as primary sales are concerned. So unless secondary sales are muted, I don’t see a challenge with primary sales continuing. So that being said, I mean that is in industry in general from whatever we are understanding based on discussions with our customers, but we believe we’ll be able to offset that challenge.
Hopefully there should be no hiccups in this season.
Dhruv Jain
Sure. And sir, with this customer diversification, how should we think about your top customer share going down, say in the next one or two years?
Sukrit Bharati
We hope we’ll be able to have a good hedge, but that also depends on how quickly we scale and how much the market scales. But we are hoping that we can maintain a healthy share with Voltas also because they’ve, they’ve always been our anchor customers and we want to continue being one of their largest suppliers. But giving an exact mix is difficult. But let’s see how things pan out.
Dhruv Jain
Sure. And sir, just on washing machine, my final question while you’re starting this year, how should we think about the scalability of that vertical? I mean, how are you thinking about it in the next say one or two years?
Sukrit Bharati
So as of now in washing machine, our installed capacity is only for one mold basis which what we are planning we have to further once the first model picks up and does well, we will look at adding more capacity. Currently if you ask us, it is, it is more of a offset for us in terms of seasonality because it is a, it is a cross as far as seasonality is compared to against refrigeration and also air conditioning. So hence it is a good product segment to be part of. But this year we are not we will first evaluate how the product does in the market.
And if it does well then we will plans ramp up in FY28.
Dhruv Jain
Okay. Got it. Sir, thank you so much. And all the best.
Sukrit Bharati
Thank you. Thank you so much. Thank you.
Vinay Pandit
We’ll take the next question from Anik Mitra. You can go ahead. Am I audible?
Anik Mitra
Good morning. Yeah. Sir, in one of earlier phone call of Walters I have heard that they are trying to build up their own capacities. Means it’s related to backward implication. So on that aspect I wanted to understand your point of view.
Sukrit Bharati
Sorry, which customer did you mention? Voltas.
Anik Mitra
Yeah.
Sukrit Bharati
So Volta has already created their capacity from. I mean that of course everybody knows from two plants in Chennai. And I am not aware of their expansion plans if there are any further expansion plans. So.
Anik Mitra
But does it. Does it means can it reduce the orders from Voltas going forward? What is your assistance?
Sukrit Bharati
So. So I mean I cannot answer a long term question as of now. But we don’t see. I mean we see a healthy demand coming from them now also. And basis on whatever I understand they want to have a. A decent portion of their purchase coming from other manufacturers. So to that extent I think demand should be good.
Anik Mitra
Sir, you said 28 million of compressors having potential of 400 crore of revenue. Correct.
Sukrit Bharati
2.8 million.
Anik Mitra
2.8 million compressors having capacity potential to generate 400 cr of revenue. And you are saying for 60% plus capacity utilization it comes around 240 crore plus revenue from the compressor.
Sukrit Bharati
Correct? Yes.
Anik Mitra
And sir, I just want to understand regarding your capacity. What is your current capacity and what is your plan going forward?
Sukrit Bharati
So cross flow fan capacity we will. We are increasing to match with effectively our captive requirement. We are not selling cross flow fan as a standalone product. So we are only matching the capacity with our ideal capacity as of now.
Anik Mitra
Answer whatever. Currently who is the second largest customer?
Sukrit Bharati
Sorry, we would. We would. We would. We avoid sharing names of customer.
Anik Mitra
Okay. Thank you. Thank you. I will come back.
Vinay Pandit
We’ll take the next question from Nitya Shah. Nitya, go ahead.
Nithya Shah
Hi sir. Just wanted an understanding on the current debt. You know considering there’s lots of capacity expansions next year. How do you see the debt levels coming up and if you think we would need further raising for the same.
Sukrit Bharati
So we are of course evaluating fund requirement and we will raise wherever there is necessary. But we are still evaluating based on what segments and how they are panning out. Including compressors and air conditioners. Air conditioners. Of course the capacity ramp up is already planned. And I think we will achieve the required capacity as far as debt is concerned.
Debt from the current level of this financial year, debt might go up slightly, but I don’t see major debt getting added to the books because of capacity expansion unless we have to do a major expansion in compressor. But we take it step by step. So both on the equity raise, we will decide once we have some commitments and decisions based on how the government takes a stand. So we will effectively try and balance debt and equity at a similar ratio. And so currently our debt and equity debt is less than 1 as far as debt equity is concerned and we want to maintain a similar ratio as we go forward.
Nithya Shah
Okay, understood. And sir, quarter on quarter, are you seeing an improvement in overall demand across products? What has been the outlook? If you could share some color on that.
Sukrit Bharati
Yes, quarter and quarter. Of course numbers are also depicting it. So the demand has gone up and fourth quarter and Q1 next year. I see, I mean I see the demand to continue and depending on the season, we’ll know what happens in Q2 and Q3 or how strong is the demand in Q2 and Q3.
Nithya Shah
Got it. So thank you so much and all the best. Thank you.
Sukrit Bharati
Thank you so much.
Vinay Pandit
We’ll take the next question from Disha. Disha, you can provide. Oh, hello.
Disha
Am I audible, sir?
Sukrit Bharati
Yes, please.
Disha
Yes. Thank you so much for this opportunity. So just two questions. So you mentioned the AC sales will go down to 60, 65 next year. Right. And the remaining 30 to 35 will come from other components. So in the medium term, what would be the comfortable level of this? Like how much would we reduce this AC sales? What would be the comfortable range to share that?
Sukrit Bharati
No, I think overall we are happy with AC being 60 to 70%. We don’t anticipate AC to be any lower than that. Point number one, because AC being a larger category as far as growth is concerned, we are happy with the 60 to 70% share. And within that 60, 70% share. Also based on the OEM ODM model and the product mix, it also diversifies well, so the overall idea of dependence on maybe very few customers or very few product segments that over long term we wanted to mitigate and those were the steps that we took in the last couple of years.
Happy that some of these, most of these steps are panning out in the right direction and whatever little capacity expansion and product addition that we have to do, we plan to do in the next year, year and a half.
Disha
Okay. So this, this makes sure we expect to sustain over the years.
Sukrit Bharati
Correct? Correct. Yes.
Disha
Okay. And just on the Capex number, I think this year we were targeting 100cr or so. How much have we done till now and what’s the sort of capex that you envisage for FR27?
Sukrit Bharati
So we have I think done almost close to 120 so far and we are looking at a 130 to 150 number by March end in capex.
Disha
Okay.
Sukrit Bharati
And fly Friday FY27. We are still studying the situation. So it is still a little dynamic. But by April I think we’ll give you a more accurate number.
Disha
Okay. All right. Okay. That’s it from my side. Thank you.
Sukrit Bharati
Thank you.
Vinay Pandit
Thank you. We’ll take the next question from Harsh. Harsh. You can go ahead.
Harsh
Hi. Thanks. I hope I’m audible.
Sukrit Bharati
Yes, please.
Harsh
Yeah. So my question was more on the REC segment. You mentioned that, you know, the primary demand has been better in December and has continued in Jan. I just wanted to understand further in, in the sense that, you know, how much of it is on account of that bee rating changes. You know, there could be some ramp up happening over there in terms of new production happening for the OEMs, the brands. So just wanted to get a clarity. On how much of that demand is sustainable and how much of it is. Is majorly because of this change.
Sukrit Bharati
No. So demand is sustainable? I don’t think so every year from how much ever we understand the market demand. I mean the. The channel starts picking up inventory in December and then this demand keeps continuous till February, March and then based on the season, how fast liquidation happens. The demand, the tail of the Demand continues in Q1 or end of Q1 or first month of Q1 Q1. So that is the typical trend this year. Also there was no change of course. I believe most of the sales that happened in December were for the old table material because there people have some price advantage in terms of.
And probably brands have also priced more aggressively for the older table models and hence the demand was there. But January also saw good numbers with both old table and new table. So I don’t see the reason for this to change significantly in February or March or April.
Harsh
So you’re saying that this could sustain given that, you know, with a caveat that the secondary demand should sustain from here on.
Sukrit Bharati
Correct. And from manufacturing standpoint, the primary demand is what drives sales and stocking drive sales for Q4. How deep the Q, how deep Q1 goes or H1 goes depends on how the market behaves. So we even if the market was like it was muted, we did not See the impact coming till Q1. So this, this year hoping it will be a more aggressive market so demand might sustain to the end of Q1 or maybe mid of Q2 also
Harsh
understood kind of. Yeah that’s that’s the only question I have. Thanks a lot.
Sukrit Bharati
Thank you. Thank you.
Vinay Pandit
Thank you. We’ll take the next question from Hitendra Pradhandra. You can go ahead.
Jitendra Pradhan
So thanks for the opportunity. So my question is on the rec like your comments. So in Q4 we are confident of you know having 200 share plus of revenue from RSA to meet our guidance of say 800 to 850. So yeah answer like the point on the secondary primary sales is understood but sir I mean bolters is mentioned that you know the there are like you know five to six weeks of inventory in the channel. So so the you know nest how the summer goes, how the secondary sales happens, you know that will dictate the overall like kind of you know production volumes and all so.
So sir, so you have visibility till like Q1. But sir what are your read on the situation like you know given there are like some kind of price increases happening be norms and all like do you think that could dent the overall demand and the secondary sales momentum this year?
Sukrit Bharati
I don’t believe it should have a significant impact because I mean I don’t see that as a challenge. I think with B rating increase the customer is ultimately benefiting in terms of power saving so that is a plus that gets passed on to the customer. Also the pricing impact in terms of the BOM cost is more on the five star models and not so much on the three star models. So of course definitely some price increase in terms of the metal price increases will get passed on to the customers. But we have also seen GST reduction coming in so net net.
I don’t think there will be a major impact because of that insert like.
Jitendra Pradhan
We don’t have any margin pressure right because of all this RM you know inflation that is happening couple and all like you know that scenario that environment is better inflationary so we are not facing anything like from OEM side we are not facing any kind of pressure like to reduce our margins and all.
Sukrit Bharati
So and pressure of course is there all the time. There is no scarcity or pressure but like I said with most customers because we are a quarterly price through pass through pricing or we are on a fixed based on market driven pricing in terms of sheet metal. So it may have a short term impact but long term we are hoping that it will average out so no long term impact.
Jitendra Pradhan
Yes, got it. So finally sir, what is, what has been your read through for our company on the budget announcements like especially on the white goods part on the PLI and the ecms. I mean, what are your thoughts, you know, curious to know your thoughts on, you know, the budget announcement because they seem to be pushing a lot in terms of the, you know, manufacturing and you know, going up in the value chain. So. So what are your thoughts and what are the implications for our company?
Sukrit Bharati
So one, overall, the general direction continued to be in favor of manufacturing which was the primary cope. Of course there was not too many announcements specific to our specific company. So no negatives, no positives. I think it was just a reaffirmation on, on the direction and strategy. So we are happy with that. Apart from that, the push in electronics, which is ECMS and other aspects. We plan to capitalize on how much ever to whatever extent we can because we are also expanding on EMS and we are doing all of that so we see how much we can derive value.
But the core businesses today, there was no change in strategy, which is a positive sign.
Jitendra Pradhan
Anything on the pcbs, like, you know, would that be something in your, like, you know, something that you would like to do at some point?
Sukrit Bharati
PCB manufacturing for, maybe for captive in the future? Yes, but we are not looking at any major inroads in PCB manufacturing. No.
Jitendra Pradhan
Got it. Okay. So thank you investor.
Sukrit Bharati
Thank you. Thank you.
Vinay Pandit
We’ll take the next question from Akhil Shah. Akhil, you can go ahead.
Sukrit Bharati
Yes please.
Akhil Shah
Yeah, so I just wanted to know if there are any updates on the main board listings.
Sukrit Bharati
So we are in process of that. There is one technicality in terms of the traded volumes that we are discussing with bse which is a criteria of BSC but not with nsc. But the documentation is in process and we are hoping to file soon. So once we get that clarification from bsc we will file. But even after filing we are looking at a three month tentative timeline for the migration to happen. So once we file, I think we should have a clear date. So we’re waiting for feedback from BSE and if they give a green signal in terms of everything, then we will file immediately.
Akhil Shah
So tentatively, how long should it take from here?
Sukrit Bharati
Hopefully H1 probably.
Akhil Shah
Thank you.
Vinay Pandit
Thank you. We’ll take the follow up question from Garbit Garud, you can go ahead.
Garvit Goyal
Just one question. On the version site you mentioned a significant ramp up or you are expecting in FY28. So just wanted to understand what is the peak Revenue that we can achieve with the existing capacity on that side. And what can be the utilization we are expecting in the initial year ever. 27 sir,
Sukrit Bharati
peak revenue we can currently achieve is about 100 crores. And capacity expansion what I mentioned was 28. We will decide based on how 27 goes, how much capacity we plan to increase or we plan to maintain the same capacity. We have not decided that. Once the product goes into mass production, once we have feedback from the customer and market, we will then further take all of capacity expansion in 28.
Garvit Goyal
And what kind of utilization do we expect in FY27?
Sukrit Bharati
We are hopeful between 50 and 70%.
Garvit Goyal
Thank you very much.
Vinay Pandit
Take another follow up from Siddhan. Siddhan, you can go on.
Siddhant
Yeah. So what, what are the EBITDA margins for the compressor business?
Sukrit Bharati
EBITDA margins with China competition being there and without backward integration are about 5%. But just to elaborate on that, the asset turns on, on the current business are very good. So we are looking at a five plus asset turn as far as the last mile manufacturing that we are currently doing. So it is a good asset turn. No EBITA business. The EBITDA goes up as we improve backward integration. So that will depend on more investment. So the asset turns come down, asset turns, asset turn comes down as we backward integrate. But EBITDA margins improve.
Siddhant
So the overall 9 to 10% of EBITDA margin which we are hoping in. The next financial year, is it based. On 5% compressor margins or more than that?
Sukrit Bharati
It is based on 5 percentage.
Siddhant
Okay, so earlier we used to highlight 6 crore units in the LED EMS space. Right Now I, I can see the. Present and it’s four like cph. So what is the conversion? Basically?
Sukrit Bharati
So actually LED product, we have a large variety of products so it is difficult to define product wise capacity. It becomes more chaotic. So we are defining capacity on the EMS business and along with lighting because in EMS we are also doing other boards and products. So it is easier to define the machine capability capacity in EMS rather than the product capacity.
Siddhant
Okay, so then what kind of realization. Can we assume on per unit CPH levels?
Sukrit Bharati
So per unit CPH is very difficult to again define because it depends on what is the value. But the current EMS setup we are, we are capable of doing about 150, 180 crore top line.
Siddhant
On 44 like units.
Sukrit Bharati
4 lakh CPHS with our product mix.
Siddhant
Right. And so what exactly is the hold up to in the migration to the main board? Because the earlier you rule specified that. We need to spend three years in the SME.
Sukrit Bharati
So, so three years is complete. We have submitted everything saying we are asking them for a formal go ahead before we file documents and we are waiting for that approval. Are we waiting for that clarification from bsc?
Siddhant
Okay. Okay. And so last question, sir. What kind of channel inventory levels were there in Jan.
Sukrit Bharati
I have, I don’t have accurate number. Sorry.
Siddhant
Okay. Thank you sir. And all the best.
Sukrit Bharati
Thank you. Thank you.
Vinay Pandit
Thank you. We’ll take follow. Okay. There are no follow up questions since there are no further questions. So would you like to give any closing comments?
Sukrit Bharati
Right. Thank you so much all of you for taking the time and we look forward to connecting with you in the next quarter. Thank you.
Vinay Pandit
Thank you. This brings us to the end of Q3 and 9M26. Thank you.