GMM Pfaudler Limited (GMMPFAUDLR) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the Q1 FY27 Earnings Conference Call for GMM Fodler 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 this conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Raveen Kanabar from GMM Fodler Ltd. Thank you, and over to you, sir.

Thank you, Elvett. Good afternoon, ladies and gentlemen. A very warm welcome to all of you into the Q1 F527 Earnings call of GMM Fodler Ltd. The Earnings presentation was uploaded on the stock exchanges yesterday, and is also available on our website. Hope all of you had a chance to go through it. From the management today, we have with us our managing director, Mr. Tarek Plattin, our group CEO, Mr. Gregory Gerhoff, our group's CFO, Mr. Alexander Kornstatt, our deputy CFO, Mr. Ankit Hayat, our company secretary, Mr. Mehta. We will give you a brief overview of the performance of the company, after which we will get into the keynote. Before we begin with the overview, a brief disclaimer. The presentation which was uploaded on the stop exchanges and also on our website, including our call decisions that will happen now, contains or may have certain forward-looking statements regarding our business prospects and WD, which are subject to several risks and uncertainty. The actual results took materially different from those in such forward-looking statements. I would love to have you with a call to Mr. Tarek Patin to provide you with a brief overview of the performance of the economy. Over to you, Tarek.

Thank you, Rabin. Good afternoon, everyone, and thank you for joining us today to discuss our financial performance for the June quarter ended, and equally important, the strategic transformation that is underway across our organization. Thank you. Here for GMM Fodler, we successfully transferred ourselves from being a leading Indian engineering company into one of the world's largest process equipment platforms through the acquisition of the global Fodler business and a series of complementary technology acquisitions. With that foundation firmly established, we are going to be the next phase of our journey. This phase is about GMM Fodler taking a decisive step in its growth journey by evolving into a single, globally integrated organization. Our customers operate worldwide and increasingly expect the same advanced technology, consistent quality, and support wherever they are located. To meet their expectations and accelerate our ambitions, we are organizing our business into four distinct global divisions, each with a clear accountability and a sharp focus on the industries that they serve. The last year, we have undertaken one of the most significant organizational transformations in our history. Historically, our businesses operate through geographical structures, With India and international businesses functioning independently, while this approach was appropriate immediately after the acquisition, as it allowed the business to stabilize and the customer relationships to continue, it was never intended to be the long-term operating model. Today, we have evolved beyond that stage. We have reorganized the company into four distinct global divisions, replacing the traditional geographic structure. These divisions are CRT, Corrosion Resistance Technologies, PPT, Process Performance Technologies, HET, Heavy Engineering Technologies, PST, Process Systems Technologies. Each division is under dedicated leadership with clear accountability for technology development, product strategy, customer engagement, and operational excellence. This is far more than an organizational change. It represents a fundamental shift in the way we go to market. Instead of managing similar businesses independently across the different regions, we are now bringing together global expertise under one technology platform. This enables us to leverage engineering knowledge across geographies, accelerate product innovation, improve customer responsiveness, strengthen and allocate capital more effectively. Most importantly, it creates a single global organization with common objectives rather than multiple regional organizations pursuing independent priorities. As I said earlier, our customers increasingly operate globally. They expect partners who can provide consistent technology solutions across markets. Our new operating model positions us much better to meet these expectations. The journey will take time, but we believe it creates a much stronger foundation for sustainable long-term value creation. It also helps our capital market stakeholders to better monitor the underlying business drivers across each of our business divisions, providing greater clarity on our overall business. In line with this vision, we have further strengthened our leadership team by establishing clearly defined roles and responsibilities across our businesses. Mr. Gregory Gelhaus has been appointed as Group Chief Executive Officer and will lead the cultural and organizational transformation required to build a truly global organization. This leadership structure will help institutionalize a global mindset, strengthen accountability, and align performance across the organization. It will also enable us to build a robust leadership pipeline, establish effective succession planning, and create global centers of excellent support by shared service capabilities. Ultimately, our strategy is to... It's leadership across our process technology businesses, expanding customer relationships to broader the portfolio, and driving operational excellence across each division. By capitalizing on growth opportunities more effectively with unified global operations, we need to deliver sustainable, profitable, and create long-term value for all our stakeholders. The new global structure allows each division to focus on its own strategic priorities, while unlocking meaningful value across the group. As we move forward, you should increasingly view the geographically managed organization, but as a global technology company with integrated capabilities, deep domain expertise, and a clear roadmap for long-term value creation. With that, let me now hand over the call to Greg.

Thanks, Tarek. As Tarek rightly mentioned, this is a transformational year for GMM. With the four new divisions, our focus is to bring the full strength of each technology to every market, deepen relationships with existing customers and winning new ones, diversify and expand beyond traditional chemical and pharmaceutical markets, and enter a broader range of high growth and markets. With this new structure, decisions are made once and globally. We respond more quickly with the same high-standard delivery wherever customers operate. Our focus also remains on cost, whereby each vertical rationalizes its cost structure and global footprint to drive lasting efficiencies in even more competitive cost space. Hence, we see this as a very positive change, and I look forward to driving our progress in the months and years ahead. I would like to touch upon our quarterly performance. We closed the quarter with a record order backlog of 2,200. ... representing an increase of approximately 20% year-on-year, supported by a healthy order intake of over 1,007 crores during the quarter. It is important to view this backlog in the right context. Nearly 30% of the order intake in Q1 last year comprised of multi-year projects, whereas the current order book is largely made up of projects with execution cycles of 10 to 12 months. As a result, a substantial portion of both our operating backlog and the order secured this quarter is expected. It's to be executed within FY27, providing strong revenue visibility and confidence in our execution outlook. Now let me take you through our division-wise performance. CRT, corrosion-resistant technologies, our CRT division reported revenues of 466 crores, representing a growth of 10% year-on-year. Order intake during the quarter stood at 502 crores, representing a growth of 23% year-on-year. CRT continues to maintain its leadership position as a business owner with the industry's largest installed base. The business also benefits from a large aftermarket and service franchise, providing recurring revenues and healthy customer engagement. Demand from the core pharmaceutical and chemical industries remained stable during the quarter. Now, for PPT, Process Performance Technologies, the division reported revenue of 255 crores, growing 23% year-on-year. Order intake stood at 367 crores, growing 64% year-on-year. Thank you. ...platform across mixing, filtration, and drying, and sealing technologies. The division continues to benefit from expanding customer adoption across pharmaceuticals, food and beverage, and other process industries, while growing capabilities continue to strengthen our market position. HET, Heavy Engineering Technologies, the HET division reported revenue of 74 crores, which is flat year-on-year. Order intake during the quarter stood at 58 crores, which is increasing more than 700 percent year-on-year. HET is in its position in manufacturing large, critical process equipment, catering to energy, petrochemical, and industrial applications. We also remain well-positioned to benefit from the increasing investments across defense, nuclear, fertilizer, and other infrastructure-led sectors over the medium term. Now, PST, Process System Technologies, our PST division reported revenue of 131 crores, registering a growth of 46% year-on-year. Order intake during the quarter stood at 80 crores, whereas the order intake for Q1 FY26 was 363 crores, which was represented by one large defense order. The division focuses on engineered process systems and skids for high-specification applications. It continues to benefit from opportunities across semiconductor industry. ...manufacturing, defense, and pharmaceutical sectors, where customers increasingly seek integrated process solutions. To sum up, GMM is entering a fundamentally different phase of its journey. The last few years were about building a global platform. The next few years will be about extracting greater value from that platform. We believe that our new technology-led organization, disciplined balance sheet approach, and focus on earnings quality will position GMM Foddler for stronger and more sustainable value creation in the years ahead. We invite Alex, our group CFO, to take you through our financial performance.

Thank you, Greg. Good afternoon, everyone. As highlighted by Tarek and Greg, this quarter marked an important milestone in our reporting journey. In line with our new organization structure, we are leading the business to our four global technology divisions. This reporting framework better reflects how we manage the business internally and provide investors with improved transparency into the underlying performance of each technology platform. Coming to the financial performance. During the quarter, the company recorded a total order intake of 1,007 crores, which is flat year-on-year. Consolidated revenue for the quarter stood at 925 crores, registering a growth of 16% on a year-on-year basis. EBITDA for the quarter stood at 94 crores. On a year-on-year basis, EBITDA was lower by 7%, primarily reflecting continued pricing pressure, an evolving business mix, and investments towards strengthening our global organization structure. However, in a quarter-on-quarter basis, EBITDA improved by 25%. Profit after check for the quarter stood at 22 crores, which more than doubled year-on-year. Our consolidated order backlog stood at 29 crores, increasing 20% year-on-year and 4% quarter-on-quarter, providing healthy revenue visibility for the coming quarters. We have realized that while there is confidence in our long-term strategy, many of you would like to get greater clarity on how the acquisitions made over the past three years are translating into shareholder value. Therefore, I would like to address some of these questions today. On acquisitions, we look at our group structure today. There are multiple acquisitions done across different countries. And naturally, it is viewed as the organization has become too complex. I would like to reassure everyone that these acquisitions were never undertaken simply to increase scale size of the company. Each acquisition was made with a clearly defined strategic objective. Either to add a new technology, expand into an adjacent process solution, Strengthen our engineering capabilities, or provide access to new industries and customers. Collectively, these acquisitions bring us from a fundamentally glass-line equipment company into a diversified global process technologies platform. More importantly, the acquisitions phase is now largely behind us. Our focus has shifted to integrate these businesses. The organizational restructuring that we announced is the direct outcome of this transition. Instead of operating acquired businesses independently or through regional structures, we have reorganized ourselves into four global technology divisions. This allows every technology worldwide to operate under one leadership team, creating significantly greater accountability, technology focus, and customer alignment. The objective is straightforward. One technology, one strategy, one global organization. That's how we intend to unlock the full value of our acquisitions. Regarding integration and synergies, another important question to receive is whether the acquisitions are actually creating synergies. Immediately after acquiring the global partner business, our priority was business continuity. During that period, we intentionally allowed regional organizations to continue operating independently while preserving customer relationships, leadership teams, and operational stability. Now that integration has matured, we are entering the next phase. Our new organization enables us to leverage common engineering expertise across regions, improve cross-planning between technologies, align product development globally, and optimize manufacturing resources. This is very important to increasingly emerge over the coming years. Our focus is on integrating these technologies, customers, and capabilities. Another question was with regard to our debt structure. And therefore, you have sought greater clarity on our balance sheet. The acquisition of the global toddler business was transformational in nature and required leverage. However, our capital allocation philosophy has always remained disciplined. Over the last few years, we have consistently worked towards reducing leverage while continuing to invest selectively in high return businesses and strategic capabilities. Importantly, many of our subsequent acquisitions have been relatively small, technology-driven transactions rather than large transformational acquisitions. Physicians have largely been funded to internal accruals and prudent financing structures while maintaining balance sheet discipline. Going forward, our priorities remain clear. Continue strengthening the balance sheet. Improve the balance sheet. Maintain discipline capital allocation. Pursue only high strategic opportunities that strengthen our technology portfolio. Health and financial prudence will continue to go hand in hand. As we mentioned in our previous earnings call, we intend to repay some debt at the group level, and will repay an amount of approximately 7 million euros of debt by the end of Q2, in this financial year. With many of our large strategic acquisitions now behind us, our focus is to strengthen the balance sheet. Our improving cash generation and disciplined working capital management are expected to adequately support our operating requirements while enabling faster delivery. At the same time, we are also evaluating refinancing opportunities for cost and debt maturity profiles. Overall, we believe we are moving in the right direction, and I expect to see a gradual But meaningful improvement in our leverage matrix over the coming quarters. Another important question we get is if benefits translating or flowing down to the PAT level. This is an area where we widely expect improvement. Following the acquisition of the global business, we inherited a large international organizational structure comprising multiple legal entities across several countries. While this structure provided global reach, it also resulted in additional financing costs, overlapping administrative structures, and a more complex tax and corporate framework. As a result, the conversion from EBIT to PLT has not reflected the full operating strength of the business. Addressing this has become one of our key management priorities.

We are already simplifying our global structure,

rationalizing legal entities where appropriate, streamlining reporting lines, and optimizing the corporate architecture. These initiatives are expected to improve financial efficiency over time by improving our structure and enhancing EBIT to PLC conversion. This is not a one-quarter initiative. It is a multi-quarter value creation program that will strengthen the quality of our earnings. Overall, while certain end markets continue to remain dynamic, our diversified technology portfolio, balanced, audible, and strong global present positions are well to capture future growth opportunities. As our integration initiatives continue to progress, we remain focused on improving operational efficiency. Strengthening the cash generation and enhancing the overall quality of earnings.

With that, I would like to hand over to Rabin.

Thank you. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Samir Thakur with Ambit Capital. Please go ahead.

Hi, thanks. So my first question is, are there any signs of recovery in traditional end markets like chemical and pharma? And has competitive intensity begun to ease over here? Also, if you can comment on regional commentary by end markets, that would be useful. Thank you.

Yeah, hi. So, yes, I know traditional markets in India, I'll start with India, and maybe Greg can speak a little bit about the international business, but we do see... A significant improvement in the PAMA business here in India. So we are seeing a lot of action in PAMA, in Hyderabad, GDMO. So that's driving a lot of investments, and that's helping us build backlog in our local Indian glass line business. And we expect also that this will continue. So definitely compared to about 12 months ago, there is a positive shift in terms of the glass line business here in India, and there will be more inquiries, more opportunities. So, no question. Thank you for having me. Our question is at the end of the Council. So, we've had another address for example from Anyoteer, Thank you. The technical, unfortunately, in India has still remained black. There are a few projects here and there, but nothing significant. So, We do hear that volumes are back for most of our clients and customers. That group may be the one Traditional markets are definitely better off.

So internationally, I think it's a similar trend to what you've heard from Clark, similar situation we see from the pharma sector internationally. We do see a number of opportunities. It is improving there, and we see that both. So, again, as Tarek said, that's our traditional glass line business, but also our PPT division, where we... I would say all in all, what you've heard from Tariq and myself in terms of pharmaceutical is consistent globally as well as in the chemical sector.

Okay, thank you. That's helpful. I have one more question. I think there is some decline in margins for Indian business, the standard of business. So any reason for that and how should we think about it going forward?

Yeah, so looking at the India business, and maybe I'll have Ankit to also step in a little bit here. Here we have, obviously, a very large component of growth, which has come from our HET business. As you know, our HET business is an India-led business. It takes us to oil and gas, hydrochemical, and now we have, obviously, broken into nuclear, and we're getting into power sector as well, right? So a lot of growth opportunities with a strong backlog and an even stronger opportunity pipeline, which we believe will help us obviously build backlog for the next few quarters and maybe even years. So that's a strong area of growth for us, and obviously that comes with large projects. And again, the strategy has been to obviously get into certain kind of industries, you know, creating ERs. We have recently been approved by EIL for duplex, super duplex, and even air-cooled heat exchanger. We have recently broken into power. Last year, we broke into the... Thank you. Thank you. I'm going to take a look at some of the changes between the three businesses. However, having said that, I think the improvement program in terms of margins across all our businesses out of India is ongoing. You know, obviously the idea is to bring it back to a stable level with the market improving. Pricing will also improve. So we see with better utilization, you know, with better revenue, we will see some of this getting absorbed, right? So all in all, with the backlog that we have, the order book that we had in Q1 and So I think that will continue, and I think, you know, obviously, recovery of margins...

Just in addition to what topic makes it, we are also investing in cost. As you would have heard, we have invested in a new organization. So we are investing in people, and that's why we see a bit of a model. But these are good.

Okay, thank you. So, we should expect sequential implement, further implement in margins going forward. That's right.

Yeah, what we said the outlook, and we kind of mentioned, we don't want to specify anything right now in terms of what is the final expectation, but obviously compared to previous year, we definitely expect improvement across all our businesses, and we are working hard to build down costs and improve margins.

Okay, thank you. That's helpful. If I can squeeze in one more, just obviously this organizational structure is a very good state. But if you can just explain what were the bottlenecks before this stage, any examples of that, that would be helpful.

So I think maybe we take both of them. I will speak maybe from the past. I think the regional structure prevented maybe businesses to work together and work closer together. People were incentivized after regional numbers and regional kind of targets. Today, the entire vertical has the same target. So every single person in that vertical, let's say for GRD, if that person is sitting in the U.S., in Europe, or in India, they have the same target for profitability, right? So, it is everybody's best interest. Everybody's clear and aligned in terms of what their KPIs, you know, they are exactly, the KPIs, right? So, a common KPI, so everybody's aligned, and if they want to extract maximum value, they will then think of opportunities like, you know, export our wine stuff from India or low-cost countries, putting together multiple different options in terms of our clients to bring more business, right? So the drive in the incentive program now aligns everybody within the decision, and that, I think, is going to be a big change by geographically. They were all not just independent entities, and they were more kind of based on local geographic kind of KPIs rather than global KPIs.

Maybe to add to that, I think what we see now in the new structure is, as Tart said, we have a globally aligned team by Technology Vision, Thank you. A difference from the organizational setup in the past, and we believe it's going to help us significantly moving forward.

And just one more point to this is that we have brought in also the right talent to run these verticals. So some have been internal, some have been external. In the case of HED, obviously the strategy of a heavy engineering vertical is very different from a black line CRD vertical, right? So this allows the articles to really focus on their own strategies, their own kind of operational excellence. Everybody is not, it will not be painted under the same brush, right? So these articles, to create and build their own strategy, right? And I think that's very, very important.

Okay. Thank you very much. That was very helpful. That was all from my side. All the best.

Thank you. Participants in the interest of time and fairness to others, please restrict yourselves to two questions. For any more questions, you may rejoin the queue. The next question comes from the line of Praveen Kumar with Aquitas Capital Advisors. Please go ahead.

Yeah, hi. Thanks for the opportunity and congratulations on a decent set of numbers and more importantly for taking first steps to improve the disclosure. Good on that part. I had a couple of questions. One was on the, if you can give us some clarity on the margin profile and the roses of these four divisions which I've broken it out into. Thank you. And also associated with that, if you could give us a sense of which of these segments do you think are closer to steady state margins today and which are kind of away from that. And also if you can give us some sense of how do we track that, you know, the divisions which are away from that. Steady state aspiration margins. How do we keep a track of when they are closer to that? What is your aspiration? Thank you. That's my first question.

So, I think on a margin perspective, let me, obviously, as a company, you know, we obviously have always said, like, a 15% of the margin for the company is something that we aspire to worth, right? That should be something in our business and our kind of area where we operate and the technologies we have, that's something that we should have, and then, obviously, we bring from there, right? So, currently, the businesses and the verticals that now we have created somewhat kind of have around that kind of margin profile. There are obviously different initiatives within those verticals to improve margins over time, but I would say that they will be around that range. Obviously, there are, you know, businesses which are more like a systems business, it's a longer, higher gestation, more value-add because we get profit characters. Thank you. So, don't ask. We shape them very drastically. I could have been something on the... No, I think you covered it, Tark.

I think it's, you know, the goal is for us, as Tark said, we have management teams. We have a number of initiatives to improve our financial performance for each of the divisions and, of course, for the company overall. So we will continue to drive that, and we have different opportunities in different divisions to improve performance, and we'll keep focusing on that.

Yeah, thank you. I'm sorry. Sorry, I didn't finish. Yes, sorry, I think it was the same thing. I could not repeat what I thought was said. So, we will improve the margins. We have, of course, some units which already are significantly higher margins. You would also see the announcement that we made of the latest acquisitions. So, we will work on it. And, of course, as Tarek mentioned, we mentioned the 15% that we've got margin. That's the minimum target.

Understood. My second question was, again, on the margin trajectory. You're talking about, you know, in the past, you have talked about that aspirationally margins should exceed 15% or higher in the medium term, right? So, I just wanted to understand from standing from where we are today, from current levels, what kind of cadence of margin improvement should we expect? I understand that this is not a company where we should be looking at a quarterly margin as proof of anything, but how should we or what time frame do you think we can get to those aspirational margins of 15% and beyond? And what kind of cadence can we expect in this? And what would be the likely triggers apart from mix change?

So, I think directionally, we are moving in the right direction. I think we have multiple different initiatives to improve revenue, to grow revenue, and to improve margins, right? So, let's leave it at that. There is definitely opportunities. We know these opportunities. We know that where we have high costs. We know where we don't think so well. So, there are opportunities across the group, across regions, right? So there are multiple things ongoing. We're working on debt. We're working on restructuring. There's a lot of opportunities that we're working on, right? So we are going in the right direction. I think let's focus on then. Let's maybe build some kind of momentum with auto intake in Q2 and then we meet again next quarter. Maybe hopefully we'll have a much clearer picture in terms of where we're going to end up and what the future hopes.

Maybe just to add one, we already have several units which achieve these margins or even higher margins. What we currently are suffering on is that we have... We have measures in place. We will improve this unit, and you will directly see an uplift, and it is our margin for the full group.

Tarek, while I appreciate your response, the reason we're looking for, I was looking for more of a cadence of margin is because, see, as you yourself, you and your team referred to, the investment in employees, etc., it's already showing up in the numbers, right, because employee costs are up significantly, both standalone as well as consult, right? So we are already seeing the costs up front. So it would be useful to actually get a sense over what time frame are we even, I understand there are multiple triggers for this margin improvement, but it would be useful to get some sense that over what time frame should we expect that.

Yeah, I get what you're saying. You know, like I'm saying, there's a lot of initiatives that we're working on. The time frame, again, we are not somebody who's going to wait around for a long period of time. We are actioning a lot of these changes along with the global transformation. We have a stronger team today. We have now accountable CEOs, four CEOs who are driving costs and strategy within those organizations, you know, and making tough calls where they need to make tough calls, right? So that's happening. Alex and Ankit are working on financial kind of areas to improve stuff, like debt, structuring, borrowings, et cetera, inventory, cash management, right? So we are working across the group. Business is looking a little bit better. Again, let us kind of build some kind of consistency. Let us give a few quarters of consistent results, and then we can sit down and talk about margins. And then I think you guys will also have a clear idea in terms of what we're trying to do. So, let's put this out. The work is going in, and as Alex said, there is improvement possible, and we will improve, and that's one way. So, I think that would be a clear direction in terms of our margins over the next few quarter of the years.

Thank you. A reminder to all participants, please restrict yourselves to two questions, and for any more questions, you may rejoin the queue. The next question comes from the line of Sagar Shah with Spark PWM. Please go ahead. Yeah.

First of all, thank you for the opportunity, and thank you to the management of JMO Fodler. To actually first and disclose the segmental results, actually, as what the entire state was asking for. Now, my first question, sir, was related to the follow-up on the previous participant's question. You highlighted that there was some uptick in the employee expenditure. You were realigning the entire sales team for different segments now, actually, that you have highlighted in this quarter. Now, apart from the sales teams, I wanted to know from Tarak as well as Greg actually that what exactly are we doing to strategize actually our sales team to strategize our operations even geographically so that actually we acquire greater market share in the segments actually that we have actually highlighted in this particular presentation. Apart from the sales teams, what exactly measures are we taking to actually acquire greater market share also and that in turn will actually be a margin and answer in the medium to long term. That was my first question.

So I think before I hand over Greg, I think a couple of things that I would just want to highlight. Obviously, you know, Greg has been part of the company now for a year, and he's run the Global Transformation Program, so he's aware of the business. He has a very close understanding of the business. He's been involved in multiple different initiatives over the last 12 months, so he's perfectly placed to really kind of look into improvements across the coast, both from the revenue side and from the cost side. He also comes from a background where he has done restructuring in his earlier business and consulting, so he has done this before and he knows what he probably expected and what we need to do, right? And welcome to the call. Lastly, I think it's also important that we understand that Dred is part of the family, so he has been in the game, right? So the two of us together are... Thank you. So with that, maybe if you can maybe say a few words on the transformation, and then obviously the...

Sure.

So, thanks, Mark.

So, I think to the point that that was mentioned, I mean, around the transformation, part of the clear role from the sales side is to increase market share. No doubt that's part of our transformation program. I do believe and we believe that the new organizational structure, as was mentioned in the opening remarks, helps us to move quicker globally for opportunities that we see across the world. We have that greater ability now to share knowledge, to be able to work closer as global teams. is that we see in the market to... Required, obviously, changes in the way we work, changes in the way we go to market, which we've been implementing already, and we're seeing good progress there. We are seeing, and I would point out, that it is progress that we're making across within each division, but also because our customers will require, as an example, sometimes glass-lined equipment, filtration and drying, mixing equipment, all together for a certain order that they're looking at, a certain opportunity. We're able to work closer together also across divisions. So we have a very strong focus on improving our market share, and we're focused on that, and I believe that our infrastructure is going to help us with that.

And just a side note, it's quite interesting that the group in the region, he saw... So, again, it's a very different way of how we have done things. This is how we've done things since 140 years. Fodler has been a very old company, and obviously Fodler and the GMM has been there. Thank you very much, everyone, and thank you very much, everyone, and thank you very much for joining us today.

Thank you very much, everyone. Thank you very much.

Okay, okay.

Yeah, my second question was related to your data keeping question. So, you highlighted the strategic measures actually that you will take on the operational side. So, I know this is not a sequential mapping or something like the sequential mapping journey that we are looking for. It's a long-term journey. But for FY27 and FY28, so at least that is up to 24 months. So based on the debt reduction program, based on the strategic measures, what are the target EBITDA margins actually that the company is highlighting? And secondly, what is currently on March 26th that the debt that the company holds on its balance sheet? It's the long-term as well as the short-term debt. It's around 835,000 rupee terms. So what is the actually targeted debt level that we are eyeing to the end of this year as well as FY28? So that is my second question related to data keeping question. That's it.

Thanks, Ben. Maybe I'll take it. We will repay roughly three million years here to work this quarter. And we are working on the refinancing and we will further down our debt. We don't want to comment on the debt figure as of the end of the financial year, but as you see, we are working on this and we will further reduce over the coming quarters.

Okay, so what is the date that we are eyeing, actually? And about the margins, also, my question was.

Yeah, so Ankit, he's asking for outlook on margins. I think we've kind of expressed ourselves also, but maybe you want to give this, how are we going to look at margins and how are we going to talk about margins to speak?

Yes, from a margins perspective, the objective is to continue to grow margins. As Tarek mentioned earlier also, our objective is to deliver quarter-on-quarter, see how things are. We see positive shoots in different businesses, and as I've already stated, 50% is something we need to go there. So, what are we seeing this, how we are tracking against it, and yeah, and all we must look good at this point of time to hit those kind of numbers.

Thank you. The next question comes from the line of Dhawan Shah with Alpha Accurate Advisors. Please go ahead.

Yeah, thanks for the opportunity, sir. So my question is on the order inflows for the CRT and PPT segment. You mentioned that you are seeing, you know, the green shoots in the domestic pharma sector, and that's why, you know, we have seen some order inflow growth for this quarter. So if you can share, you know, some thoughts on that, whether that was, you know, one time, like the lumpy order, or is it like the structural revival you are seeing in the domestic pharma, which can be seen for at least next three quarters also for CRT. And then for PPT, what led to such order inflow growth during this quarter? And is it sustainable or not during the next three quarters?

So I think India asked the question to you because you have a better hand than any of Pharma. But no, I mean, on a serious note, we haven't seen this kind of improvement for quite some time. Our last time business has now gone through a really tough time over the last two years, I would say. And this time the green shoots again, like we said, look positive. We see some in India definitely are quite positive with this whole pharma play, CDMO, and the big Hyderabad players are expanding, so API is looking good. We've also seen good pharma inflow of glassware business in the U.S., so the U.S., obviously, you know, the U.S. You know, story around Mr. Trump and the investment that was signed to the U.S., some of that is actually putting out quite nicely, so we have received some large orders from the U.S. recently. So I think China has also come back with good orders in last night and GRT, which we thought, I mean, China had excess capacity, but I believe that some of the new investments is going closer to the Mongolian border for chemicals again. So that's driving some growth and bringing back some grassland. Europe structurally still remains a bit slow. However, we have won some large grassland audits in Europe in the recent month as well. And the focus is also to push our service business, grow our service business. Maybe today we might have been, I mean, in lots of market share, we would ask you a quarter, and the cost of bringing back service is grassland service. We are looking good globally, Europe still looks a bit tough, but the other German teams are looking a lot more positive. Greg, do you want to add something to that? Well, I think you covered it.

I think going back to the question around pharma, we do see, and as we answered earlier, we do see some positive signals in the pharma sector, and we're seeing that in terms of the orders that we're winning, but also the opportunities that we see in front of us.

Yeah, one more point here, sorry, and this is a very important point, is peptides, right? So we have seen significant peptide investments. So we have already supplied last year a very large order for peptide, you know, equipment, and we've also received two large orders from Hyderabad for complete systems built around peptides, right? So peptide is another area that we're seeing a lot of investment coming in, and I think with eye equipment, We are quite well positioned to grow that peptide offering as well.

And what about the people? This quarter, I think, we have seen significant other inflow growth. So what led to such a growth? Is it like just from the domestic market or there is some room of order? Sorry, we are going to first start with what specific thing will you ask you?

Growth and what? Sorry, I'll give you a minute. Hello.

Hello, please repeat your question.

So, my question is, you know, for PPT, we have seen, you know, the significant order inflow growth during this quarter. So, what led to, you know, such jump for first quarter? And then, is it like the order inflow came from the domestic business only, or there was some export order also, which led to such a growth?

No, so it's a combination of multiple things, the businesses that have come across geographies. You know, India last quarter was decent, was good, but, you know, I hope that India this quarter will do a little bit better. Things are looking good. So, order intake was good globally, and we expect order intake to continue also. So, Brazil also has done quite well. Our listing business has done very large orders. So, again, that equipsment and not systems, right? So, when you compare, I think, when you look at us, you look at two or three metrics. So, first thing you should look at on April 1st, previous year versus this year, what our looking backlog was, right? So, I'm looking back to us already 30% higher, right? We consider last year we had in that backlog a very large de-systems order as well. We had a very large order of those two, 30-odd million for a large system, so that was in there. So now the backlog really is kind of more robots. We have a lot more equipment in there, CRT, PTT, and EGT as well, right? And that's the good part. And if Q2 remains strong, which we expect it to be, then that gives us revenue visibility and then pretty much we can get this more inducted, right? So the focus, again, is to be aggressive. The way that we have reorganized ourselves should help us, serve our customers better, make all our alignment in terms of all the people who work pretty well, who are taking care of our line now to go out to their business, good margin business, and cut costs. So I think we're going in the right direction. If the market is the same, and I hope it does, we should be in a decent position. Again, like you said, also sometimes it could be a one-off, two-off quarter kind of an investment. We hope it's sustainable.

Thank you. The next question comes from the line of Rushabh with Praveen Ratinal Wealth. Please go ahead.

Yeah, am I audible?

Yes, Rushabh.

Yeah, thanks for the opportunity, and first of all, congratulations to the GM and popular team on not just improving the disclosures to the market, but also finally going towards the discipline capital allocation.

So, big congratulations on that.

I have three questions. The first one is on the order book. So you did allude to the fact that in the last year, 30% of the orders were large tenure orders. And you did say that. In the current year, the order book, it is how much percentage of that of orders are executable within the next 10 to 12 months. That's my first question. The second question is on the borrowing. So we have mentioned the fact that we'll be repaying around 7 million euros of debt. And we currently have around 835 crores of INR debt. So, I assume it's closer to 75-76 million euros if I convert it into euros. So, you have said that you will be repaying that debt in the next 12 to 18 months. But can you specify a number and a timeline in which how much debt will be repaid? That is my second question. And my third question is on the tax rate. So going forward, what is the kind of steady state tax rate should we work with? Thank you. Thank you.

Okay, I will be guiding the debt collection. We will pay now 7 million euros, and then we will restructure our debt position and further reduce it. And this will take an extension to the timeframe and turn to 18 months, but as I said, it will continuously go down now in the future. Regarding the text language, And I will work with a tax rate of around 30%, let's say maybe slightly below in the long term. We still require some time to get this stabilized. It partly depends on our current debt profile and our organizational structure. Now, with this change, In the org structure, but especially also in the debt structure, we will bring our tax rates down to this level which I just mentioned. Let's use around 30%, maybe slightly lower.

So, just one follow-up to that. So, you did mention that you'll be bringing down the debt, but can you at least specify a number that what is the kind of debt that you'll be comfortable with in the next 12 months or next 18 months? That's part one. And 30% tax rate that you're talking about, when can we see that coming? So, what should be the FI 27 and 28 tax rate number that you should be working with?

And I will not mention now a debt target figure for end of this year. However, we got the timing of the tax rate to bring it down, and we indicated 18 to 24 months. And the debt, the refinancing, and the reorganization has to be completed first. And then we can go down to this lower and reasonable tax rate. But as I said, it takes us 18 to 24 months to really fully get it stabilized.

So in 18 to 24 months, how much of that will be repaid? Can you please come on?

So, there are two or three things need to be done. They're working on it. Hopefully, we can get some of this done before what we have kind of self-taught speed, and we're working on it. So, just give us some time on this. When we meet again for Q2, we should have the clarity, and then, hopefully, this year, even this year, sometime around that, we're hoping that we can have an investor here as well. To my desk, you have all the details very clearly mentioned, and you can track that also, but we can sometimes get the exact.

Right, sir. Right, sir. Once again, congratulations. Just you missed out my part on the order book. So, how much of the order book is executed between 10 to 12 months?

Yeah, as I mentioned in my opening remarks, it's the large majority of that. So, significantly of the roughly 1,000 crore order intake that we had. A significant amount of that is executable in the next 10 to 12 months. So, as I mentioned earlier, when you look at Q1 in the prior year, 30% of that was multi-year projects, which would not all occur in the next 10 to 12 months, where what we see in this recent quarter is very different.

Thank you. The next question comes from the line of Ravi Mehta with one up. Please go ahead.

Yeah, hi, thanks for this call. Just a couple of questions.

One is, on the employee, is there any one-offs evidence cost in Q1? No, no. Okay, and the investment that you are speaking, is this going to further go up, or this can be like a run rate basis, or there are still some more senior level additions pending? You're talking about employee costs, right?

So the idea is to bring down employee costs over time. Obviously, there have been certain new hires as we move into the new structure, which are required. We need, you know, global kind of HR, finance, IT, but we also have ideas to move a lot of that to India, the GEC model, you know, stuff like that. So, we can look at options there, and then we also have opportunities to kind of put people in front of our clients, right? The idea is that some of these verticals need to grow, so we will invest in sales people, sales organizations as well. But as a concept, we are looking at non-critical activities being consolidated into real-cost geographies, you know, things like engineering, drawings, things that don't require to be done. That can be something. And it only started like that. We have a GEC center now, a global engineering center that has about 12 people, or a lot of our institute, that's another push. We have coal and India coming up as low-cost technologies where we really need to utilize these work entities to make sure that we have a much better cost structure. Keep in mind, we also reduced people in the UK prior year, and last year in Germany, we had a reduction of workforce, factory workforce, which obviously will keep some of that kind of thing through also in the next few quarters. So, we'll be getting that benefit as well, maybe cost-controlled measures in operational expedits that should play out as well, and with the higher volumes, hopefully, we'll have better adoption and, you know, better utilization of our factories as well.

Thank you. The next question comes from the line of Simran Kumari with Manolia Financial Services. Please go ahead.

Hi, sir. My question is related to interest cost. Like, what is the interest cost for FB27 and FB28? And my second question is regarding the order intake. As we can see, this quarter, the order intake is broadly comparable to the performing period last year. So, could you please re-update on the expected order intake trajectory for the remainder of the system? Thank you.

Okay, I'll start with the interest cost. The interest cost we have on average is 6% to 7%. Of course, it's especially the debt that is in the international business, which is USD-denominated or Euro-denominated. They are based on the software base weight and the Euro base weight, but it's also hedged. So for your modeling, I would assume 6% to 7%. And the other question is on the

order intake, as I mentioned in my opening remarks, you know, we – yes, you're correct that we've had – when you look at order intake this quarter versus the prior year, same quarter, it's roughly the same. But as I mentioned, we see a very different profile of order intake this quarter where we see that the large majority of those projects that we want in Q1 have execution cycles of 10 to 12 months. So as a result, you'll see that a lion's share of that is orders where we can see strong revenue visibility over that period given those orders that we want. So it's different from the prior year, as I mentioned, because 30% of that order intake was on orders that were for multi-year projects. It was not going to come.

Thank you. Ladies and gentlemen, we will take that as the last question for today. I would now like to hand the conference over to Mr. Raveen Kanabar for the closing remarks.

Thank you, Alvin.

Thank you, everyone, for joining us today. It was a pleasure interacting with all of you, and we look forward to many such interactions during the course of the year. Take care, and see you soon, everyone.

Thank you, sir. Ladies and gentlemen, on behalf of GMM Fodler Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.