Jash Engineering Limited (JASH) Q2 2027 Earnings Call Transcript

Good evening, everyone. I am Siddish Shawan from Einstein Young, and I would like to welcome you to the Just Engineering Q2 F527 earnings conference call. Before we begin, I would like to inform you that our Chairman and Managing Director, Mr. Pratik Patel, will not be joining us today on today's earnings call due to the unavoidable commitments. However, we have with us by Mr. Darmendra Jain, Chief Financial Officer, and Mr. Sanjay Sharma, Vice President of Sales of Marketing. Who will be take us through the results and address your questions? I would also like to indicate that all participant lines will be in a reason-only mode. And there will be an opportunity to ask a question after the opening remarks conclude. To ask a question, please select the raise hand option under the reaction tab of the Zoom application. We will call out your name and request you to unmute yourself. Kindly begin your question by stating your name and organization. Additionally, please note that this conference is being recorded. The recording will be available on the company's website within a day and the transcript will be shared subsequently. Before we proceed, I want to remind everyone about the safe harbor related to today's call. Some of the comments made during the discussion may contain forward-looking statements that Involved known or unknown risk, uncertainties, and other factors. This should be viewed in conjunction with our business list, which may cause actual results, performance, or achievements to differ significantly from what it is expressed or implied. If you require any further information or clarification after this call, please feel free to reach out to me. With that, let me now hand over the call to Mr. Sanjay Sharma. Over to you, sir.

Okay. Thank you, Sudesh, for this opening remarks. And warm welcome to everybody. Good evening to everyone. And just to introduce myself, I am Sanjay Sharma, heading sales and marketing function over here. And I'll be now pleased to do the presentation for this Q2 and then consolidated H1 results as well. So... So, in this quarter, we have reported, we are reporting a revenue of 194, in fact, 195 crores, which is 22% higher than as compared to last year on YOY basis. And EBITDA is of Rs.27.3 crore, up 23%, PAT is 14.3 crore, up 30%. And so Q1 and Q2 put together the first half year revenue growth consolidated for first year, first half is 351 crore. Which is 20% higher, and even EBITDA growth is also 75% higher to 42 crores, and PAT growth is also substantially higher to 34%. So, this is for the revenue. Looking forward, we have a good and very strong consolidated order booking of 955 crore, out of which approximately 65%, 625 crore is from international markets, and remaining is from the domestic market. And we continue to grow our product portfolio, engineering capabilities, and our manufacturing facilities, and further to that, we have also increased our project presence in new geographies like Saudi Arabia, Vietnam, Thailand. We are already very much there in countries like Hong Kong, USA, and UK. So, based on this, our first half-year performance and the strong, I would say, the consolidated order booklog and our plans for second half, we are pretty confident that we expect to do a very good second half-year performance and we should be able to meet the projections which were made in the beginning of the year. So, as we already mentioned, total revenue is 351 crore, up 20% from the last year, first half. Likewise, gross profit margins have also increased. This is 32% growth on a year-on-year basis. EBITDA also has grown up by 75% and PAT margins is 239% growth. Now, subsidiary-wise performance for the Jesh Engineering standalone, it is 227 crore for this year, as against 208, 9% growth. Pat is also increased by 18%. In Rodney Hunt, there is a growth of 17%, and Pat is down by, say, slightly on the negative side. Waterfront, it is 8% growth, 22 crores to 23 crores, and PAT is also, as compared to last year, it is on a positive side. Just processing equipment, it is a bit lower. As against last year, 25 crores, it is down to 21 crores, and because of the reduction in the revenues, even the PAT is also on a negative side, slightly on a negative side. Consolidated order booking, as we mentioned, it is 955 crores, and subsidiary-wise breakup is that Jesh Engineering Limited, it is 561 crore, followed by Rodney at 391 crore. And the waterfront is 31 crore. Even Jash Moses equipment, they have a 32 crore, say, pending order book, consolidated pending order bookings. So all the book together, it is 955 crore total. Out of which 330 crore is destination within India and 625 crore is outside India. And in addition to whatever consolidated order booking is there, so we continue to have a strong order pipeline for the orders which are expected now in this month and coming months also. So we have orders worth about 46 crores, which is already negotiated and expected to be received most likely in this month itself. And then we have another orders for about 129 crores, which are under negotiations and likely to be finalized in this quarter. So, this is a consolidated income statement. So, total income for first half, it is 3. Okay. So, you may go through it and this is quarter-wise also there and then even half-year-wise comparison last year to this year is also there.

This is the balance sheet?

Yes, this is the consolidated balance sheet. Okay. And the sales outlook for the consolidated, so it remains at 875 crore, which we had announced in the beginning, and the breakup was like this on the Gestion Engine Limited, 530, Rodney and 330, Mahar, 15. Waterfront 60 and just posted 2.40 crore. So as on that, we seem quite confident that we shall be able to achieve this revenue forecast of 875 crore. There could be some advance which we come to know later on regarding the dispatch time. One of the major concerns that we are facing, issues that we are facing is the delivery time which is there from when there are products which are going from India for exports market to various places. So the transit time is becoming a challenge which we hope it will improve from wherever we are. So in case those issues are resolved, we are very much confident that 875 crore is possible. Thank you. So, that's a brief presentation, and then we can now open the forum for the question and answers.

Thank you. We will now begin the question and answer session. Gentle reminder to all the participants. To ask a question, please select a raise hand option under the reaction tab of the Zoom application. We will now wait for a moment until the question queue assembles. We'll take the first question from Sanju Marwa. Please go ahead.

Yeah, hi. Thanks for giving me the opportunity. I was just trying to think through, you know, the medium-term EBITDA margin profile or PAT margin profile for the company over, say, let's say, next two to three years. So if I look at, you know, there are a few. There are negative factors which might put pressure on EBITDA margin, and there are a few positive factors, and I was just thinking through. I'll just share what's in mind, and then I wanted to understand. Keeping these factors in mind, I think, just wanted to understand what gives the confidence to the company that the patent margins going forward will increase to, let's say, 13 or 14%, which I think Mr. Prateek mentioned in the last call. So to my mind, the negative factor which I was thinking through was that going forward, we'll be increasing the quantum of on-shoring. Like in Rodney Hunt, last time Mr. Prateek mentioned that 70% of the order book, which is actually around 390 or 400 crores for Rodney Hunt, that will be manufactured in US to mitigate tariffs, etc. And that will probably lead to reducing the India manufacturing arbitrage. And then we are also scaling up Waterfront and Maher, wherein you will have more UK-based manufacturing. So in short, we'll probably increase our focus in terms of manufacturing abroad. And the second was, we'll also have significant capacity addition in FY28 or FY29, depending on how the strategy goes, be it at Saudi or Orange in Houston, US. And that will again, in the initial periods for maybe one or two years when the capacity utilization would be low, we'll have a period of operating deleverage. And till the time we have optimum utilization. So in short, these could be the key factors which could probably pull down the bidder margin. And probably the positive factors could be rupee depreciation, or maybe the higher priced orders for last year, which we are, because of tariffs, we would have priced that basis our pricing strategy. And we are executing now in a low tariff environment and probably tariff refunds, which you are getting. So I was just trying to think through the positive factors, look more transient in terms of macroeconomic related, right? And less structural, which is dependence on tariff refunds or rupee depreciation, right? And probably executing higher priced orders, which will normalize over a period of time. So I was just trying to weigh in the negatives and the positives. And it appeared to me that negatives are more structural than positives. So if you could just... Try to explain, you know, what gives you the confidence that over medium term, our margins will increase and probably not moderate or normalize. That was my question. Sorry for the long question, but that's it.

Majorly in EBITDA, you have already explained many points. So our submission on that is that normally we are doing 18 to 20 EBITDA percentage. In many years, we have done 18% EBITDA is very common in our last few years. One year, we have done 20% EBITDA also. But in 22, we go down. And last year, because of tariff and war, we go down again. But definitely, one year, if we go down the EBITDA, to maintain again at that level is challenging. So, we have all these things committed here. Pratik sir has informed that we are planning for EBITDA 21 to 23. So, when we are at 18 and 20, then we are... I hope that once that USA market grown in regular basis, then definitely we improve the EBITDA of the US market. And once waterfront is also in positive, then it will be increased trend of the EBITDA. But definitely in out of India, if any company you have to establish, so it will take time 2, 3, 4 years to earn the profit. So that will happen in the EBITDA, but in UK also. So we are very confident that once we are targeting the volume, like in a waterfront, 10 to 12 million, and in USA, 50 million. If one or two years we achieve, then definitely we are very confident that we will achieve our targeted EBITDA also. Except the abnormal thing happened in the worldwide, then there is a problem otherwise we are having a fixed cost fixed, not increasing in the level of increase of revenue. So definitely it will contribute to higher side EBITDA.

Okay. So my only thought process was that now you will be increasing the focus on on-shoring, right? For example, you will be, you were talking about increasing order book execution when it comes to Rodney Hunt in US itself, and that's why we are setting up, I think, Orange, right? And then Waterfront and Mahar also needs to be pulled up to meet the requirements of UK's class.

Because earlier, ratio of India versus US is 75-25, PRP is 70-30. Nowadays, you see the ratio is around 50-50. But if we have a pending order of 40 million, out of that, 18 million order is from India and 22 million order is from USA. Yeah, sorry. 22 million order is from India and 18 million pending order is from USA. So it is manufacturing from local, you are making USA, making India is increasing trade. So that's why we are planning for the another plants there and because of the problem in the labour availability in that area is also one reason for that.

Okay. Thank you. Thank you so much. That's all. Thank you.

Thank you. We'll take the next question from Dilip Kumar Shahu. Please go ahead.

Yeah. Am I audible? Yes, sir. Yeah. Yes, sir. First question is regarding the gross margins. While across industries, gross margin has fallen because of this cost discussion across the board, our gross margin has gone up. So that's one question. What actually led to that fall and how sustainable those factors are? I think you explained to some extent the previous answer. You know, detail on this.

Yes, sir, gross margin is normally, we will not consider for half yearly. Because half yearly, what happens if one or two big orders, we have booked a good margin, then definitely our gross margin also increases. But yearly gross margin will be average hour. So we are more concentrated on the yearly gross margin. And if you see earlier, here also our gross margin is around that only. If you see in 26, gross margin is around 60, 58, 57. So it's around 55 to 60 is our range for the gross margin. And I think we are in that range only.

No, I understand that. But, you know, because across, if you look at other manufacturing companies, usually it is compressed in the current quarter and last quarter because of all the issues that we know. There's a huge inflation across all material costs have gone up. So that was the reason. But I understand. I think you are confident that this gross margin 55-60% will be there across 870 gross that you are committing.

Yeah, yeah. If you've seen our last five years, you can more confidently, if you see our gross margin in the last five years, you see that it is between 55 to 60, closely.

Great. Second question is regarding this new acquisition of process engineering business of ASTEC that we talked, you know, we've brought in.

Yeah.

How has been the integration? It looks like there has been some advent we are facing because you alluded to some integration issues in last quarter. How are you poised in terms of getting value out of this acquisition?

When we acquired Vestec, the process equipment, in fact, Vestec India, which we have now named it as Jesh process equipment. So initially, last year, they had some setbacks in terms of order acquisitions. In fact, when we acquired them, they lost some major orders. So due to which, when we started this year, their pending order booking, their order backlog was very low. So, that's what is reflecting this year. Earlier last year, say, they were about 50 crores, and this time we are projecting at about, say, 40 crores. So, now, in the second half, there is the expectation that there will be a few major orders which will be now received, which will improve the situation in just process equipment from wherever they are. Coming to the integration between the two companies, I can say that yes, that work is now in progress. They have their own ways of doing the costing, the costing philosophy was different. So we are integrating their processes with our jet standard, I would say processes, SOPs, that is there. And also important is that their technology, they have a lot of designs. So, what we are also doing is that earlier the entire manufacturing was outlawed. So now what we are doing is that a few of their products we have started manufacturing inside the gesturing premises in Indonesia. So, that improves the situation. And so, case to case, this is depending on the merit of the product, merit of the order. So, we are now splitting few orders. It means we are, like, taking few orders for manufacturing in indoor and remaining orders, they continue to manufacture as per the existing process. But there also now we are having much, I would say, closer monitoring and better controls over there. Secondly, there are some products that they want to develop earlier. They were not able to develop because of the constraints on, I would say, finance and all that. So now, based with now just on board, so they are also now going ahead with development of new, I would say, products. And in the second half, as I mentioned, we are expecting some good orders, which will then definitely help them to improve the situation. And with this pending order booking, by end of this year, it will become very healthy. And we are pretty sure that from next year onwards, we will see a lot of improvement in their performance in terms of revenue. Another thing that with the coming of process equipment, this company is that they have some good designs and good, I would say, technologies, which we have adopted and I would say inducted in the ingest process equipment, in ingest products, basically, for our water and wastewater sector. So, when we have adopted and we have taken over that technology, it has added to our product range also. Just for information, one product that we have already received orders for about 18-20-15, then we will continue to get that orders. So these are the positives. Long term, we are very much confident that process equipment, just process equipment will perform very good overall for the company.

If you see this, last quarter we are not so positive about the just process equipment, but this quarter we have a good sign of getting the order. So we definitely will be positive and this year we will be very good order booking position. So next year we are on the track and there is no problem in that.

Sure, sir. Sir, my question regarding, you know, next year, while you haven't given any definite, you know, forecast for next year, your long-term growth plan of 15%, if I go by that, you do around 1,000 plus crores next year. And the run rate orders that you should get is around 9,200 crores on a monthly basis for us to go there. Somehow I'm not seeing that kind of momentum coming up. While in one month, we reached 100 crores plus something. But in general, our average, you know, last 10 months of ordering flow is much below that 1,000 crores. So can you, you know, give some idea about what exactly, how exactly we'll ramp it up, say, from 65, 70 crores monthly to 90, 95 crores monthly average for next 12 months?

You see, over the last time, 6 months, our average order intake would be slightly higher than 60-70 crore. In fact, this year also, this month also, we have reported higher order intake for this month. And, you see, this is, I would say, a business wherein every month we will not get the consistent on that value, say, 70-80. At times, there are some big projects which come up for finalization, and they come up for finalization in the same quarter, in the same period, and from all the different subsidiaries. So, there will be some spikes, say, at some point of time. So, overall, we are confident that the 1,000 crore pending auto-booking, which presently we are having, so it will slowly rise up to, it will definitely exceed, it will go beyond 1,000, and we will take it further beyond 1,000, 1,050, 1,100 crores. This is more valuable. As I mentioned that we are adding our product range, we are getting, we are going into new, I would say, sectors also, and in export market also, we are getting into new geographies, like we are already very strong in existing our, say, businesses like Hong Kong, then, say, this, Singapore. So, we are now trying to develop new geographies like Vietnam, Indonesia, and many other countries. So, with this addition of these new geographies and new product range, so, we are confident that, yes, we will, this 1,200 crore is a pending order booking, because every business will depend on your total consolidated pending order booking. And during the last two to three years, if you see the trend, this consolidated order booking trend has been increasing. And we are confident that with all the, I would say, the explanation that I have given, so we'll be getting closer to, and we'll be exceeding that 1,150 numbers very shortly. Thank you, sir.

Thank you. We'll take the next question from Binayak. Please go ahead.

Hi, sir. Thank you for taking my question. Sorry, I must have joined you, then I could repeat what you have already said. Just wanted to check on the growth part in India this quarter has remained subdued. What was the reason for that? And also, Rodney Hunt was quite surprising, which was quite opposite. So could you just tell us what was the reason of these opposite poll performances in these both subsidiaries?

You see, in India, or maybe, what happened is that there were many orders which were even dispatched also, but due to the inco terms, they were not recognized in the Red River. For example, when we closed our September closing, so we have 46 crores orders which were dispatched in voice, but because of these in-code terms, which means that title were not transferred because most of our orders are for F1 destination, that metal should have been received at the customer place, and they were still, I would say, in the transit mode. So that was, I would say, the major reason. Suppose if this 46 crores, if not 46 crores, even if, say, 50% of that would have been considered in the revenue. So that would have helped us to improve our, say, I would say, spotted two and overall actual numbers. Yes, it will reflect now in quarter 3. So, quarter 3, we start with this 46 crores of the spillover which has happened from Q, means I would say this September. And whatever we do in the month of say October, in fact for October, yes, we have our standalone business was about 56 crores, I recall that. So, this will help us. So, 46 hours current spin-over will definitely help us to improve our numbers in Q3 and overall by today, December.

And, sir, on Rodney Hunt, if you could give some comments on the performance there and how is the order book getting there?

Rodney Hunt, overall order booking, pending order booking, it is around 40 million. It is about, say, 40 million. As we already mentioned in our presentation also, it is in terms of INR. It is 391 crore, quite healthy. And in terms of business, I would say we have, I would say, a lot of opportunities. We continue to have a lot of opportunities in US. So, order booking as such is not a point of concern. So, that is something that we are relatively quite confident that we will be able to achieve those numbers.

Yeah, I would like to add here because of the tariff, there is uncertainty for last year. So last year we have dropped down from 34 million to around 30 million. And this year, we hope that we will achieve around 36 million this year. So, May is not as per the total target revenue, but always our third and fourth quarter is higher cycles. So, we definitely achieve the 35-36 million turnover this year in the USA, which is higher than the 25 revenue.

And so, could you also comment on the new plant contract that we have, I guess, already given?

Yeah, not given. We have appointed an AMC contractor who is one of the best contractors in USA, HLL, and now we have given all the offers to him. So they will evaluate in the past two, three contracts and give a comparison and then we will select one of them and most probably in November we will award one of the contracts to the... Person who prefer by the work AMC contractor, and then will start from 1st of December or whatever their plan. But within one month, we will allocate the contractor and start the work.

And one year for the commissioning.

And it's nearly approximately 12 months for the commissioning of the plan.

So, sir, on the amount of contract, is it the same that $10 million or has it gone further up? And also, don't you think the timelines have stretched quite a lot? So, while we were thinking of commissioning a plant in Q428, don't you think this will now be pushed and we'll be depending on our existing facilities for growing further?

No, at present, there is no such problem. We are already planning according that once that volume has increased, because this year also I have asked just in last board meeting, so they are well comfortable this year for whatever US manufacturing is there. They can easily manufacture there and supply. So next year onwards, next year most probably December we will complete this plan and start in last quarter. So maybe in 27-28 not contribute much, but from 28-29 is definitely contributes fully.

You see, our existing facilities, which are there, we have done an assessment, and if they work on optimum, say, load levels, so we can deliver, we can generate a revenue of about 1,200 crores from the existing capacities also. Plants in India, then the existing facilities, whatever we have in U.S. and U.K. So, 1,200 is something that is possible within this capacity, and beyond that, suppose if our next, I would say, target is 1,500 crores, by that time, And the facility which is being planned, the new facility in the U.S. will come.

And for one year, we are somehow announcing the Orain facility to cater at least one, one and a half year. So some minor investment we are doing there also, so that it will be matched our productions.

Sure, sir. And so one last question on order books of your individual subsidiaries. So we could see UK, UK, there is a very, very, very huge demand because of the new five year plans. But we are not seeing that increase of demand in our order book in UK subsidiary. Okay. And similarly for your other Hong Kong and other subsidiaries, if you could comment, are we going to see a step up in order booking due to the current increase in the capex expenditure of these geographies, including India?

Yeah, sure. Waterfront. Oh, so, Kamini, sir, to begin with, yes, Waterfront now, we, there were some, I would say, drags in the auto-booking position in the projects over there, but often now we have, we have started getting some firm inquiries from various parts of that, from, from UK. Yes, so we, in fact, an order for about 2.5 million GBP, it is under discussion, and most likely it will be awarded, we will be getting that order within this month itself. And in addition to that, there are also, there is a good pipeline of the project which are under discussions and which are likely to be finalized. So things are, yes, now slowly improving. Only thing in the UK is that, okay, they have the frame agreements and then it takes some time for them to get finalized. But things definitely will be improving from From where we are, and maybe two years, three years, maybe three, four years down the line, maybe 10 to 12 million pound is something which can be considered.

And so we are, sorry, just a thing on this same question. So are we assuming, should we assume like a 90 to 100 crore order intake every month going on from here? Or like, could it be lumpy? Yeah.

90 to 100 crore, which is, yeah, it is possible. It is about, let me say, 8 to 9 million pounds. So, it is very much possible.

No, sir. No, I'm talking about the overall order intake, monthly order intake of the whole company. But we see that run rate going forward.

Okay. So, okay. You are saying monthly run rate, monthly rate of 90.

Yes, sir. Yes.

I would say, you see, as I mentioned and as I clarified earlier also, on an average, yes, means 1,000 means monthly by 90 means about, say, about 1,000 crore of order booking. But as I mentioned earlier, they are project orders. There could be some months, it could be a bit lower, and suppose if many orders come together, so at times it can be on a higher side also. But overall, I would say for the year, a thousand crore auto booking is possible.

Thank you.

A gentle reminder to all the participants. To ask a question, please select the raise-end option under the Reaction tab of the Zoom application. We will take the next question from Salil Desai. Please go ahead.

So, just one question. Was there a tariff refund that was booked during this quarter? And in which line item that would be? Thank you.

0.540 is already get refunded, and around 0.7 million is awaited for refund. Out of that, there is good chances of 0.2 million will get refund within this year, and rest may be some deferment is there because of section F232.

Right. And sorry, can you just repeat? What was the amount that is booked in the PLN in quarter two? 0.540 million USD. Okay, and this would be part of revenues or is this part of revenue?

Yeah, not part of revenue. It is within a conjunction, I think.

Okay, so I just checked from RM first. Okay. All right. So that's all. Thank you very much.

Thank you.

Thank you. We'll take the follow-up question from Dilip Kumar Shah. Please go ahead.

Yeah, my question was regarding the plans that we had for Saudi. So you talked about the US manufacturing facility. So what kind of capacity we are looking at in the new facility and when is the Saudi facility will come on stream and what would be the capacity, sir? Because if you are going to touch a nameplate of 1,200 crores with the current facility, to stretch it to 1,200 crores will be a little risky, isn't it? So by middle of next year, we have to increase our capacity so that we are at 70-80% of capacity utilization or 90% capital utilization by end of the next year. So if you can just, you know, walk through the U.S. manufacturing capacity and the Saudi manufacturing capacity and what is the timeline and investment in these two.

So, for your U.S. capacity, Danminder has already clarified that we will award those contracts in next, say, one or two months, and we will start construction from the first quarter, and by end of, say, I would say, March 28th, the plant will be commissioned, and then from there we can start the manufacturing for the orders from U.S.A. And coming to Saudi means, yes, we have been discussing, in fact, we have decided and that is still on. But in view of the present geopolitical situation, the war situation in the Gulf, so we have presently kept this plan, parked this separately for a while, and we plan to revisit this, I would say, decision by maybe next month when there are more clarities. Otherwise, as far as Saudi is concerned, our progress was to the extent that we had already, in fact, I had visited there a couple of times. We had identified the location within Saudi that where we should have this plant. And within that location, within that city, in the city of Daman, we had decided that, okay, which are the ideal locations we had hired, I would say, consultant who was hand-holding us in terms of doing the documentation work, setting up the account. And also identifying and helping us to coordinate with the local agencies for the land allotment and all that. But because of the situation that has developed during last couple of quarters, so we are a bit slow. But long term, we continue to remain committed and we are confident that we are pretty sure that we should have a manufacturing base in that region to cater to the entire Middle East region. In fact, we would also like to cater to the North African region also, the entire MENA region from there.

Yeah, and this will be directly, you will be selling into the market directly or you are, usually in Saudi and Middle East, you know, the sales through has happened through partners who are local, you know, establishments. So what is your GTM in this market, particularly Saudi and UAE?

No, this Saudi company that we have set up, it is 100% known by us. We have not taken any local partner on board at least on this. Coming to the news products, yes, it will be manufactured locally, and the manufacturing process, it will be on stepwise. Initially, we will be dispatching, say, assemblies, we will be dispatching components from here, assembling it over there, doing then maybe some testing over there, and slowly then, Then we will build up on our facilities at that place. Initially, we will be doing the assembly and testing and as we progress, then we will also set up the manufacturing facility. Unlike other companies who just want, who just do it just for the sake of doing it and then just to meet the requirement of made in Saudi, our plan is that we really want to do the manufacturing over there and cater to the requirements over there.

Sure. So my last question is regarding the people cost, you know, after the material cost, people cost, the line item is the largest for us. And that line item for last three, four years is growing up, you know, from 15, 16% to sometimes 19, 20% now. I understand that quarter-wise, it is not the right way to look at because your revenues change so much. But even in absolute numbers, the people cost is growing much faster than the revenue numbers for last seven, eight quarters. So my question, sir, is at this configuration, what is the kind of revenue you are looking? Just like your manufacturing capacity, your people capacity can deliver what number? Because going forward, if we are going to really go to that 20 to 24% kind of EBITDA margin, operating margin, 22, if not 24, then we have to, that's the only line item that looks unable to, you know, to change downward. Particularly so because, you know, the currency depreciation headwind that we enjoyed for last two, three years looks like it's going to flatten, plat you out. So the other income will come down most likely. So, you know, what is your thought on that people cost and what is the thought on 22% EBITDA margin? Is it a real possibility, 22% EBITDA margin and 1% or 2% other income? I mean, 20-22% EBITDA margin, including other income risk that I just talked about.

Thaoji, you start with the employee cost, go to EBITDA, and then comes to the other income. So, it's very... I was just trying to tell you all the facts. If you've seen our last five years, our normal employee cost is surrounding 18%. If you see in last many years, it's up to 18% of revenue. So if you go on H1, then it is definitely it is higher side because our major revenues comes from the H2. So to calculate employee cost percentage wise is not correct for H1, definitely, because a full year is around 18. Last year, definitely. Our employee cost increased from 18 to 19.5 because we have not achieved the target, but definitely any year where we achieve our target, it should be around 18%. And for EBITDA, we already said that in average year, we do 18 years, 18% of EBITDA, but definitely once we... If we grow what we expect from US and UK, and they will earn the EBITDA as per our standalone Indian company, then we definitely go above the big 20% of EBITDA. It may take one or two years, but we are very confident about that, that we definitely go beyond the 20% of EBITDA.

Even though the dollar remains where it is for next year, that's very reassuring to hear, sir. Thank you very much.

Thank you. We'll take the next question from Vinayak. Please go ahead.

Hi, sir. Thank you again for the opportunity. So, sir, in last on call, you were talking about some large orders you were negotiating for the data center vessels. If you could give us an update, what is the kind of negotiations we are ongoing there, and then if you could talk about any acquisitions that we are thinking about doing, if any. Thank you.

And last quarter, because Sanjay is not there, so I will address this question. In last quarter, we clearly told, we are informed to the investors that data center order is not our aim, because it is very competitive, because it is a fabricated product. So we will take, if only we have a spare capacity. And for large order, we have not the capacity to manufacture the large order for the data center. Yes, Sanjay will now continue.

You are right. Data centers, yes, this is a new, I would say, sector for us to address. We manufacture these large vessels for our other application, mainly for search protection systems. So, that is, I would say, technology-driven. In this case, in the data center business, these are the vessels which are made as per the design, in fact, given by the MEPs, the consulting, in fact, the contractors. So, there are a lot of opportunities, we continue to look for those opportunities, we bid also for them, but then for us, it is speak and choose because it is very competitive market. Since it is not, design is owned by them, so there is not, so you cannot eliminate many of the, I would say most of the companies. It boils down to the job work kind of a thing. So wherever the customer is very quality conscious, and if they are driven by some multinational, I would say, companies, so there we are targeting. Last quarter, yes, we... Backed our first order for four numbers of those, I would say, vessels, and we continued to bid for that, and in this quarter also, we have received an order for another nine numbers of similar capacity of vessels. There are requirements we keep on bidding, but depending on our present load conditions, how much we can take, how much we should take, and whether it adds to finally, will it add to our bottom line? So, then we take a decision.

So, any guidance you could give on the number of vessels we would be doing or we are planning to do this year, next year? Yeah.

I can tell you, say, for example, means every year, means we can say, means about 20 to 30 vessels we will target because, and I can find that capacity. Looking into the capacities. We will, we will, we will still target to do about 2025, uh, of, uh, such, uh, such, uh,

and on the acquisitions part, are we, are we looking at, uh, any acquisitions, any synergetic, uh, uh, opportunities?

Yeah, we are, but it's still time to wait for that.

We are. You see, as a company, we continue to look for decent and good opportunities. We are approached by people. They come out with some proposals. So, for each and every case, we do our due diligence and then move ahead. Frankly speaking, presently, also, we are in discussion with an opportunity, but it's premature at present. Maybe during the next call, after three months, maybe we'll be able to share it in a much better way. We'll be right back.

That's it.

Thank you. A gentle reminder to all the participants. To ask a question, please select a reason option. That was the last question for a day. I will request Sanjay, sir, for a closing remarks.

Okay. So, thanks once again to all the investors who are there and to others also. So, we, means overall, we, means I, on behalf of the company, reassure all the investors that yes, please, means that you are, means you are invested, you are invested in a good company and we assure you that we'll Definitely meet and we try to exceed the expectations of all the investors. So, please remain invested. Thank you. Thank you, everyone.

Thank you. Thank you, everyone, for joining us today. If you have any additional questions, you can reach out to us anytime. We wish you good health and look forward to seeing you again in the next quarter. Have a good day. Thank you.