Kaynes Technology India Limited (KAYNES) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the Keynes Technology India Limited, Q4, and Full Year 26 Onyx Conference Calls, hosted by Access Capital 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 continues. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchstone pole. Please note that this conference has been recorded. I now hand the conference over to Mr. Nikhil Kandui from Access Capital. Thank you and over to you.

Thank you, Sabnagin. Good morning, everyone. On behalf of Access Capital, I would like to welcome you all to the Q4 and full-year FY26 earnings phone call of Keynes Technology, India Limited. We have with us management today, represented by Mr. Savita Ramesh, third person, Mr. Ramesh Kunikanan, Executive Vice Chairman, Mr. Muttakumar Narayan Swami, Managing Director. Participants are requested to note that Mr. Jairam Samzat, Whole-time Director and Chief Financial Officer, would not be available for the call due to health concerns. Now, I will hand over the floor to the management for the opening remarks. First, we will open the floor for Q&A. Thank you and over to you, sir.

Good morning, everyone. On behalf of Keynes Technology team, I would like to welcome everyone to the earnings call of Q4FI26. Mrs. Savita Ramesh, Chairperson of our Board, our Managing Director, Dr. Muthukumar Naranswamy, Mr. Sumit Verma from our Investor Relationship, and MUFGIR, our Investor Relations Partners, are with us today. Let me begin this with a brief of overview of our financial performance for the consolidated year, FY26 period. Our total revenue stood at 3626. 0.4 crore, reflecting a year-on-year growth of 33.2%. Our EBITDA for the period FY26 was 5,741 million, registering a growth of 39.8% over the same period last year. This translates into an EBITDA margin of 15.8% for FY22. While profit after tax claims in INR 3,639 million, representing a path mission of 10% for a year, FY22. I am also pleased to share that during SS26, our micro-facility achieved a significant milestone by crossing INR 10,000 million improvements. This achievement is not only the scale and maturity that the unit has attained over the years, but also strong customer confidence. Execution capability and manufacturing that they have built across its operation. This quarter and the full year reflect a period of consolidation as we continue to strengthen execution capabilities and prepare the company for the next phase of growth. Over the last few quarters, our focus has remained on driving consistent improvement in top-line growth while maintaining healthy bottom-line market. That's it, our gear. Near-term top-line performance did not fully meet market expectations, primarily due to geopolitical disruption, especially the West Asia conflict. Which led to last-minute customer deferment, supply chain delays, and project timing shift. Similar to the earlier Russia-Ukraine situation, these events created temporarily uncertainty in execution timeline, even though the underlying demand environment remained strong. Since our revenue... Our closely linked to customer projects, readiness, and approval cycles, some revenue recognition has shifted, despite the orders remaining valid and executable. While these factors have had a temporary impact on near-term revenue timing, our strategic direction, customer engagement, and long-term growth roadmap remains firmly aligned and seems as... The company has not seen a structural deterioration in demand, order book quality, or customer relevance. Our order book remains healthy, diversified, and non-cancellable in nature, and we continue to see Strong engagement across multiple strategic sectors. Over the last few years, change has grown rapidly, and in a relatively short period of time, that growth has created significant expectations from investors, customers, partners, and suppliers. We respect those expectations. We are conscious that when a company scales at the pace we have scaled, execution has to mature equally fast. That journey of institutional strengthening is underway, and we remain fully committed to improving consistency, predictability, and delivery against the confidence placed in us. There has been. Some top management restructuring and role realignment industries, such transactions naturally take some time to settle, particularly in an organization that is expanding across multiple technologies, manufacturing, and strategic platforms simultaneously. However, these changes are intended to sharpen accountability. Deepen execution ownership and build a resilient operating architecture for the next phase of Next phase of scale, the organization is adapting quickly, and the leadership team is fully aligned to match with the market expectations. In core EMS as well, our diversification strategy continues to hold strong. As discussed in the earnings call, growth is increasingly broad-based across automotive. EV, industrial, aerospace, and railway-related segments with lower dependence on any single business line. This diversified vertical mix gives us confidence that near-term volatility is one area will not define the long-term trajectory of the company. I am pleased by the trajectory of our two new growth engines in OSAT. Unit 1 is fully operational, and Unit 2 is in commercialization by Q226. This business strengthens gains further by deepening backward integration, adding technology depth, and expanding our presence in high-value manufacturing. In OSAT, the order outlook for both the current year and the medium term remains strong with revenue visibility of over INR

25,000 million

over the next five years. Similarly, in PCB, we continue to see a robust and confirmed demand pipeline for the next five years. With several customers. Already indicating requirements for additional capacity. One important point that defers acknowledgement is that certain areas where market expectations moved ahead of actual delivery were driven not only by execution facing, but also by the border operational complexities associated with managing the core EMS business amid global uncertainties. Write it. Simultaneously scaling new strategic platforms such as OSAT and PCB. Going forward, our focus remains clear, improving execution in EMS, moving towards product-driven revenues, ramping up PCB and OSAT with discipline and delivering growth with stronger top-line and bottom-line growth. and capital efficiencies. We value the trust placed in us and recognize that credibility is built through consistent delivery. With that, I would like to hand over the call to Dr. Muthukumar, Managing Director of Health Institute.

Over to you, Muthukumar. Thank you, Mr. Ramesh. Good morning, ladies and gentlemen. And thank you for taking time to join with us today. It's a privilege to address all of you as we continue our journey of building Keynes into a globally recognized, technology-driven manufacturing enterprise. Under the leadership and vision of our Executive Vice Chairman, Mr. Ramesh Kannan, Keynes has built a strong foundation of customer trust, execution excellence, and sustainable growth. Over the last few quarters, the company has continued to deliver strong financial and operational performance, supported by a healthy order book, including the customer engagement, and growing presence across all the high-value sectors. For Q4 FI26, our total revenue stood at $12,426 million, reflecting a year-on-year growth of 26% for this quarter, and, you know, overall, for the year, we've grown at 33%. While the operational EBITDA for Q426 came up to $1,937 million, translating it in EBITDA margin of 16.6%, reflecting our continued operational resilience and scale expansion. The profit after tax for the quarter stood at $912 million. Our debt-to-equity ratio stood at approximately 0.2 in FI26, reflecting a prudent, disciplined capital structure even during the phase of significant expansion. At the same time, Our organization is able to give Earning Per Share basic has grown from INR 13 in FY24 to 54.9 in FY26, reflecting the company's consistent growth trajectory and long-term value creation for our all stakeholders. We realize our working capital days stood at around 122 days in FI26, primarily reflecting the business model requirements of the smart meter segment, which has different working capital cycles when compared to the core EMS business. On a like-to-like basis, we would like to bring it to your attention that the core EMS business has demonstrated a significant improvement in the efficiency as committed earlier, with the working capital days reducing from 83 days in FI24 to 53 days in FI26. We remain focused on further strengthening the operational efficiencies and improving project execution cycles and optimizing working capital, and we continue to scale the business. One of the defining milestones in the journey has been the inauguration of the VOSAT facility at Sarnanth by our Honorable Prime Minister, Shinarendra Modi. This is not only a matter of pride for kind, but also a strong validation of our company's growing role in India's semiconductor and electronic manufacturing ecosystem. What teams have achieved in relatively a short span of time reflects the strength of our mission, execution capability, and the commitment to our teams across the organization. As we enter the next phase of our evolution, our focus will continue to be on strengthening the foundation and scaling the organization with a greater speed, agility, innovation, and operational excellence. Change today stands at a very important inflection point. The industry is evolving rapidly, customer expectations are keeping more demanding, and our global manufacturing landscape is increasingly shifting towards high-value, technology-intensive solutions. The environment of our aspiration is not only to grow in scale, but also significantly enhance quality and value of our business. One of our key strategic priorities in the next few years will be to accelerate the transition from a traditional EMS-led organization to a differentiated ESDM and product-driven enterprise. The critical pillar for this transformation will be strengthening our new product development capabilities. We believe that innovation-led manufacturing will define our future of the industry, and our goal is to steadily increase the contribution of NPD-led and value-added solutions to nearly 30% of the total revenue in the coming year. To achieve this, we are investing on our engineering capabilities, customer core development model, a digital infrastructure, and an R&D infrastructure, and an integrated product realization platform that allows us to engage in the early phases of the customer product development. This will not only improve the margins of the company, but also the customer's confidence and... Position came as a strategic technology partner and an original design manufacturing company rather than a manufacturing service provider. At the same time, operational excellence will remain at the core of our execution philosophy. As we scale consistently in quality, delivery, productivity, and reliability becomes even more critical. Our focus will therefore be on building deeply a process-driven organization powered by enterprise-wide digital systems, automation, and data-driven decision-making. Quality in particular will be defining theme for us going forward. As we all know that quality is no more a differentiation, the basic expectation. What differentiates the company now is the ability to deliver superior quality consistently with the speed at a competitive cost. And reliability, and of course, intelligence. With artificial intelligence coming in, we are introducing artificial intelligence in various processes to make sure that we are ahead of the market. At Keynes, we are committed to building a culture where quality is embedded into every process, every product, and every decision across the organization. We're also driving the company initiatives with Total Protective Maintenance, Advanced Quality Systems, Industry 4.0 Integration, and two of our plans have already done the kickoff and moving into the next phase of implementation. These initiatives across the organization are not just about improving the manufacturing metrics. These are about creating a culture of ownership, discipline, a continuous improvement, and a customer-centric across all our facilities. As the manufacturing ecosystem becomes more competitive globally, automation and digital transformation will become essential enablers in long-term competitiveness. Our focus will therefore continue to be on improving productivity, reducing process variability, centering supply chain integration, and enhancing execution. Another important change is the quality and diversity of experience we continue to bring in our leadership and governing structures. Our board today brings together an expertise across technology, finance, law, engineering, manufacturing, automotive, and electronic and strategic operations. Leaders such as Mr. Ezgi Murani, who brings deep financial leadership experience, including his tenure at the Group CFO and TVS Motor Company, Mr. Koshi Alexander, who has extensive experience in finance and public sector electronics, including serving as Director of Finance at Bharat Electronics Limited, brings significant strategic and operational depth in the organization. Mr. Purnima Ranganath, with extensive legal and governance experience, the guiding philosophy principles in people development and in our legal framework. Dr. M. Manadurai, with a deep experience from India's space and technology mission, is joining our board, will strengthen us to take it to the next levels of technological upgradation. Mr. Rajesh Mittal, with a strong expertise in engineering and automotive operations, is joining our board, and I am sure that it will strengthen our supply chain capabilities and penetrating and getting more into an automotive operation. Their guidance, along with the addition of strong leadership in various functions in the case, continues its journey towards becoming a stronger design-led, technology-focused, and a box-built solution company. Most importantly, none of this is possible without our people. At Keynes, we strongly believe that people define our strength and future of the organization. We continue to invest in leadership development, capability building, and creating opportunities for our team to innovate, grow, and lead. At the same time, we are consciously building a strong pipeline of future leaders who can carry forward their values, culture, and long-term mission of the organization as we continue to scale in the Wixit Barat era. Our focus remains very clear, a customer focus, innovation and quality, and people. These four pillars continue to guide our Cain's journey as we build Cain's into a world-class manufacturing organization that will be the new benchmark for the industry. With this commitment from our teams, the trust from our customers, and sense of our strategic direction, I am confident that Cain's will continue to play a defining role in shaping the future of Indian manufacturing in the global stage. With this, I complete my initial remarks and would like to thank Access Capital for hosting this yearning call. I would also like to thank all the participants for joining us today. And I'll hand it over to the Access Capital and looking forward to answer your query. Once again, thank you very much for taking time to join this call. Over to you, Access Capital team.

Shall we open the proof of question and answer, sir?

Yes, please.

Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star, then 1 on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants, you are requested to use hands-up while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. A reminder to all, you may press star and 1 to ask a question. We will take the first question from the line of Miral Shah from Enam Holdings. Please go ahead.

Yes, thank you for the opportunity, sir. So, my first question is on guidance, sir. Have you started? At the start of the year, sir, we had guided that we are looking to close the year with revenues of 4,500 crores, which was subsequently toned down to 4,000 crores, and we end the year with close to 3,600 crores of revenue, sir. Sir, so how should, as investors, we look at this guidance, and what is the sanctity of the guidance that we are providing, sir? Because there is a very vast variance between what was expected versus what is delivered, sir.

Thank you very much for asking this question. We fully understand and appreciate your question. We did an aggressive offline growth in the year, based on the order book, and we thought the electrification of the vehicle, and of course, the government project where we are working is going to be at the fast pace. You know, giving a guidance of 4,500 growth It's almost 55% growth over the previous year. In the third quarter, I think we have turned out to say about 4,000 because of the few delays, and one of the largest electric vehicle, OEM manufacturers, has completely dropped by about 90% of the revenue, wherein we were the single supplier which has dropped our numbers. But we were quite confident in the last quarter of getting two government orders where the products have been done and the product testings have been approved. It's going to be done, but there is a delayed project. I think these are the two things that has put us, while we have delivered about 33% growth in revenue and 39% growth in the bottom line, we sincerely understand and appreciate that the guidance what we have given, we could not meet. Having said that, I think while we are looking at centering our execution capability, agility in manufacturing, and delivering the product on time, There are certain cases where it's beyond our situation where the customer is full on the drive, which makes us to hit the numbers. And that is one of the reasons that why we chose to say this time that we'll be outgrowing the market and we'll be doubling the market growth so that our penetration will be much more. Hope you have answered your question, but we fully understand and we are aware of the question, what you're asking and the implications.

Sir, I appreciate this answer, but sir, 75 days into the quarter, we would be aware of how the quarter would be looking like, but the management comes on the television and holds on to the guidance. Additionally, apart from the P&L side, the guidance was also that we would be just about marginal and negative on the OCM side, sir. Sir, both of these guidance, 75 days into the quarter is actually a bit concerning, when the actual numbers reported would be way off. Sir, how do you look at that, sir?

I think the intent behind committing those numbers in the last quarter, I think that is... We have, based on the product sample that has been approved, we went ahead and started our product.

We got there.

Hello, sorry for the interruption. Can you hear me well? Yes, sir. Yeah. See, what happened is, while we have got the indications of the LOI from the customer, we started ordering the materials. And in fact, if you ask us, we have started even the manufacturing, pre-manufacturing activities of this, which gave us the confidence that, yes, we'll be able to deliver. If you see more than 50% of the manufacturing of those activities also has been on the pipeline. As I said, it is not a denied order. It is a delayed order. We sincerely apologize for that this has happened. But I'm sure that you all trust me that it is beyond our control. And going forward, we will take this input in terms of committing for the future numbers. We are committing for our growth based on what market can pull in. And one of the reasons that you will see that going forward, we will be better is, like when our executive vice chairman said, our dependency on every vertical, we are bringing it down. So we are taking it to many other verticals so that the impact on one business will not have an overall impact. But we will definitely keep this in mind and make sure that in future, we will be better prepared for mitigating these risks. Fair enough, sir.

Our type of business, we also depend on customer instruction, accepting it.

I hope you all appreciate that. Sure, sure. Sir, this is a fair enough point for the P&L side of you, but sir, OCF 600 crores are negative. I think that is a bigger disappointment, especially when you kind of guide that you will be just about neutral or slightly negative, sir. So you would have known that, and sir, why have we not been able to turn that around, sir?

Okay, I think it's a fair question. The operational cash flow, I think there was a little maybe misunderstanding. I was also in the call during that time. The two cash flows that we are talking as a standalone EMS business, I wanted to bring it to all your notice that as a standalone EMS business, our cash flow was 250 crore positive when compared to 65 crore last year. However, as a consolidation entry, 65% of our revenue today comes from EMS business, where we are cash flow positive. The metering business, which is a specific model, is the first to full year we have taken, and we are getting matured into this business. One of the things that happens is, you know, this business model is a strategic acquisition for Cain in order to make ourselves getting mature towards a product-based company rather than an EMS assembly company. I just want to bring it to all your notice that pre-health-deckering metering companies, we have been supplying them the EMS business. So the entire revenue is not new to us. At most 50% of the revenue as an EMS business we have been supplying there. But this is an unique acquisition where it is not only making the meter, but also installing the meter and also maintaining the operation maintenance of providing the software. We are the only company which has got a unique combination of all the three, and that's the reason for why Keynes has committed and moved into this acquisition, which has definitely brought back the good amount of insights on product development, converting ourselves, Keynes, into a product company, and putting us maturing into launching no more new products in that segment, like whether it be a water meter or gas meter, we are on the pipeline. Having said that, we should have anticipated this well. There were a lot of government delays as the payment comes based on the installation. With various activities of the various state governments, releasing the tender for supplying the meter, installing the meter, going to those houses and installing, there was a little delay. I would request you all to appreciate that as a standalone VMS business, our networking capital has come from 64 days to 54 days. However, the total number has gone up because of this. So, 65% of our revenue comes from EMS business, where our receivables is only 35%, whereas 25% of the business comes from EMS, where the receivables is 67%. We have worked out a strategy as a management team on how to mitigate this. We've been working with various organizations to see that how this business model can be mitigated. Rest assured, ladies and gentlemen, we'll be able to bring it back at least to a level of reduction. I think the influx point has stopped and we'll come into the reduction, and we will come back in three quarters with a positive result on specific disenctity. But on EMS business, we have demonstrated our ability of how to bring back the work in it by both working on the supplier side and also on the customer side and brought it back. The numbers are available in this. I think you can see from opening receivables of about 399 crores in the EMS business. By the end of the year, sorry, 379 crores, but at the end of the year, we have come to 399 crores. Even though we have grown the EMS business at 30%, our outstanding or receivables have drawn up only by 20 crores, which clearly shows how we should be able to manage this business efficiently. Ladies and gentlemen, in the years to come, we will manage the metering business and demonstrate our ability to manage the product development, which is going to be a strategic shift in the gains organization from moving an EMS provider to a product provider, and at the same time, manage this working capital cash flow efficiently.

Added to that, if you all recollect, we were very clear. Our main EMS business, we will be cash flow positive this year, whereas the entire company, we will not be able to do that. So, please appreciate. We have done and honored what we have said.

From 65 crores, I want to bring into your attention of a cash flow positive or VMS business from last year. We have migrated to 250 crores, which is a significant improvement in a year where there were a lot of uncertainties, including the escalations at one end, supply chain disruption in the last quarter, and of course, customer pulling of the material. And our customers and suppliers have really supported Cain's initiative in taking this commitment and moving forward.

Thank you. We will take the next question from the line of Nitin Aroda from AccessUJ1. Please go ahead.

Hi. I think the call is all over the place. So going forward, I think we are not giving guidance. In the same business, when you articulated it's a customer-driven business, and when you're saying demand is very good, What is stopping you of giving you the guidance? I mean, is it you see more deterioration in working capital, which will erode the revenue growth from here on also? So we are very confused. If you can throw some light, how the direction of revenue and working capital improvement will happen, because it has not happened so far. And you're not giving any guidance. So it's very confusing for the investors. If you can throw on three aspects of both religion and working capital.

I thank you for asking this and giving us an opportunity to explain our position. It is not that we are not giving guidance for the revenue. We are not only giving guidance for the revenue numbers. When we are saying that the industry in India, the GDP growth is at 8%, the EMS space where we are playing has grown at about 18% last year, or expected to grow in this year, 16-18%. We say we will outgrow the market, we will penetrate into each and every segment, and we will double the growth of market growth is what the commitment that we have done. I'm sure that we'll be able to do this. But exactly, we don't want to put the number because, see, for example, the December projection of automotive industry was a mid-double-digit growth for this year, whereas the latest prediction says it will be a single-digit higher or lower double-digit,

which may impact on the

offtake of the product. Well, we are trying to mitigate it by getting into the various verticals, like, in fact, we are going to be getting into a defense in spring and, of course, space, this is another thing. But at the same time, we want to be a little cautious because the market is in a highly volatile condition. Nothing to do with that. Our ability to deliver, our capacity and capabilities is always available. So, we are committing and doubling the growth of market growth, which we will be definitely coming back in every quarter to say that how the market has grown and how we have grown. You can rest assured that Keynes will continue to focus on delivery efficiency and meeting the customer demand and, of course, making the investor's calculation. Sorry if we have made you to put it in a confusing state by not giving the exact number. Having given the exact number, we find that there are a lot of uncertainties which is beyond our control. And rather than coming and telling it and apologetically saying that it is because of this reason, we don't want to be providing a reason, but we want to be a solution provider in this. That is on the first revenue. In terms of working capital management, we will continue to be efficient on this area. You can rest assured that change stand-alone, the EMS business, will continue to be cash positive, and we will be improving it at least by about 8 to 10 days in this year to come in this segment. Having said that, the metering business, which is a complete, a full year, we started the metering business, which about 521 crores, sorry, 231 crores, one minute, sorry, from. The receivables of 521 crores, we are putting our execution team to go and install it in every area. We will reverse the trend. That's what we can say. But we have a very clear roadmap of bringing it back in three quarters to track in this metering business also. We are also working out various business models. The current business models, I'm sure that most of you are aware, the business model of metering business is completely different from the EMS business. These are all some of the things. The positive thing is getting into the product, a new technology, and of course, an expanded market product, and the other side is on the working capital management. But rest assured that change management has got the capability, and we will ensure that we reverse the trend in this quarter, and quarter after quarter, you will see. Within three quarters of this year, we have a very clear strategy on how we are going to come out of this cash flow issue in the metering business. And ladies and gentlemen, at this point in time, we want to bring it to your notice. The working capital management will not have any impact on our growth trajectory or in terms of our execution capability. Our order book continues to be stronger at 9,000 crores less. What we have been talking about in executing the new product in 12 months to 18 months, today our ability to launch the product in 9 months, the product, full product has come because of the acquisition of new technology and new teams that we have got a product technology thing. You will be able to see and you will be able to hear more and more of our products launched in the electric vehicles base in every spectrum that we are going to work in, wherein you will see that it gives an ability to launch the products and, of course, improve the margins. We are also committing 60% of our revenue in the years to come will come from the new products, which means it gives us an opportunity to leverage our technological excellence. At the same time, getting into a better product, standardization of the product to bring working capital management, and of course, expanding the market.

Our idea was not to give guidance. What we are trying to tell is we will better Our growth of this year, next year, we do not want to attach a number to that. That is the only question. I think, I hope I have clarified this.

Sir, I don't want a number. The question was more, what will change suddenly which will get your 600-0 negative cash to break even? Our business remains the same. Even Eskarameco moves out, which I think you have two more quarters to go. Correct me if I am wrong. The rest of the business is not negative working capital. So, what will take this 600 crores was the question.

The 600 crores by end of the third quarter will come around. We will try to work on the positive, but we will at least 70 to 80 percent of this will come down for sure, and by end of the year, we will be positive. We have a very clear strategy quarter-on-quarter. I'm sure that the next yearning call when we are going to be together because it's almost 40 days have gone in this quarter and the team is working on to put this into effect.

Thank you very much, sir.

Thanks. We took a little time on this business because more of a product is what we were focusing and we didn't anticipate this much of delay in the execution of the Erection Commission.

Thank you. We will take the next question from the line of Renu Baird Pugalia from IFL Capital. Please go ahead.

Yeah, hi. Good morning, team. A few questions from my side. First, if you can help quantify what was the share of litering-related revenues in our console, revenues for fiscal 26 versus 25, and how does the growth look ex-litering portfolio? That's the first question. How are we scaling up in terms of new applications on the power supplies and other aspects, including EVs, within the industrial business? Third is if you can share updates in terms of ramp-up of the rail portfolio with respect to Kavach solutions. And do we see any headwinds on government off-take, given that government finances this year are likely to be under stress? Next. Yeah, first you see questions, I'll have two questions, I'll come back.

Thank you very much for listening it out. I will answer the first two questions. One is of the metering business. The metering business contribution to our total revenue is around 20 to 25 percent. Okay? Having said that, it is not that the entire 25 percent of the revenue has come because of the metering business. I'm sure that you will all be able to recollect that we have been supplying the components and the PCBs for this metering business, which is around 60 percent of the revenue has already been coming. That's why when people say, oh, your growth is only because of metering business, 60% of this is our EMS business, which we have done, and we have added the box build, top twist, and O&M business onto this. The growth is like that in that business. The second question which you ask is, yes, the company is now launching the product for EV segment, and you can see our growth in the EV segment this year is about 28% growth, despite the fact that one of our largest customers in two wheelers has dropped the production significantly by about 90%. That means, had that been in full, our penetration would have been much higher. This is one segment which is growing, which is continued to grow, and rather than supplying only PCB, we will start working on the assemblies and products, which will make our value additions much higher. So, every segment, as we said, we are going to diversify to make sure that our impact is because of one business will not be there. Having talked about the first two of your questions, I will leave it to your Executive Vice Chairman to talk about our progress, what we are doing in railway business.

Regarding rail business...

Our Shavaj product has

received the initial approvals, and we have got the trial orders. We are in the execution stage. We have done field survey and everything. We are expecting this year, in the first half, to complete all approvals, and the second half to get large portion of orders. Execution-wise, yes, we will have opening order in a big number, but a small portion will be out of that. So, this is the status. As far as Kavach is concerned, we are developing one another two more products for the global requirements for one of the OEMs in the rail sector. That also. So, rail business, I am expecting this year to grow by around 20-25 percent because of these coming in. And the margins are going to be north of current 30 percent plus. I hope I have answered this.

Thank you. We will take the next question from the line of Amber Shinghania from Nippon, India, AMC. Please go ahead.

Yeah, I have a question. First thing is, if you can share details about your metering subsidiary, what was the revenue for the full year EBITDA and what is the total receivable in this subsidiary?

You are asking about the metering subsidiary?

Yes.

Hello, can you repeat the question? Sorry, can you repeat the question?

The metering subsidiary, what is the revenue, beta, and receivables at the end of the year for the full year? Okay, metering subsidiary.

Sir, as far as the metering subsidiary is concerned, Out of the total, 3,626 crores, the metering, we normally don't, okay, it's a subsidiary coming, it's about 971 crores is a metering subsidiary's revenue.

And the recipients?

Which is 24, 25%.

Thank you.

The metering revenue is at 971 crores out of the total 3,626 crores revenue.

Yeah, and how much is the receivables in this?

Okay, on the receivables of the metering business is about 1,365 crores, including the total receivables on this business. It is more than that because the first two quarters of this year, we could not be able to execute the, while the mid-trings we are supplied, the inflation got hugely delayed, particularly in the rural states, sorry, rural towns where the government has given business. Our pickup has happened only in the last quarter, where our inflation is going. It's going to take about one or two quarters for us to complete the inflation. That is why I have committed that it will take up to the third quarter for us to complete it. I'm sure that this is not only because overall the ecosystem of this is creating a problem, but we have created a pipeline of team and pipeline of equipment to make sure that this inflation takes place on time. The availability of people, the availability of the location is a concern.

Just a clarification on this, if I'm correct, last quarter corn call, you mentioned that metering the subsidiary receivable was somewhere around 1100-odd crores, and you were supposed to receive 250-odd crores by securitization itself, whereas when we are seeing now, it has gone up. If you can help me understand, was there any securitization done? If not, why not? Because you have committed that it is almost done during the last call. And secondly, what has led to this kind of increase in receivables on this time?

See, this securiturization, we have just started with one bank, and the first slot where the installation is completed, banks have started accepting it. Bank would like to have the first month's complete building and realization. So, we have the sanctions everything, but we have only discounted to around 40 crores or so.

Because I think this exactly same committee was in the last quarter on call, so there is no progress in this quarter at all, isn't it?

No, no. Apart from last time, this quarter again, we have discounted some 40 crores, etc. See, the installation and all reports, after that, particularization takes place, and they are willing to disperse the money.

Our key challenge is on the installation now, which is what we are working with the various organizations, public sector enterprises, and the end customers, and the CD. We understand your concern of why the revenue in the last quarter is 380 crores. We almost added this as basically because of the delay on the inflation.

I just wanted a better clarity in this business going forward. Are we going to continue to execute this kind of revenue with this kind of working capital? If not, then what is the factor which is giving you confidence that you will be able to reduce this working capital in this business? And if you can quantify something with concrete steps, it will be helpful for us to understand.

No, no, no. In the past, we have already agreed we are not going to take any orders like this. We are only going to take meter orders, and we will be supplying to

the project teams who have taken up orders for the entire execution like that.

So, further, it will be our EMS component only will be taking orders.

The current business, what we have taken is about 35 lakh meters is what we have taken, which is the order that is being executed and all. But ladies and gentlemen, I think we need to, while I fully understand working capital is one of the key concerns and we are working on, this has brought in lots of other strategic advantage to the organization in terms of our product development capability, a software capability which no other EMS business has. And on top of this, our ability to execute the projects like this. I think these are the strengths going forward is going to come up. And you all know that this comes with a better margin than the standard EMS product. The companies, when it's going to migrate from a service provider to a product company, you know the benefits of this. When we are going to be in a B2C, our brand is going to get sent in. The people are going to look for our brand. And this is going to be, as I said, it's going to have a lot of strategic advantage. Having said that, You can rest assured that we will come back with a quarterly progress on this and see how last year, yes, every four quarters we have added up the number, almost more than 50% of the revenue that has come. But now that we have created an ecosystem of our ability to install the meters and the location, we will get into it. And you also know that when we are doing it with the public sector enterprises and doing this. The process is taking a little more time than normally in Tier 1 OEM or other business, but having understood this business, we are pretty confident we are going to come, and like our Executive Vice Chairman said, we will also be cautious of taking such a huge business of 35, 40 lakhs rather than on this model to only just supplying emittering supplies and giving it to an SPV company where they will do the Inflation Erection Commission. Hope that answers your question, but it is a very, very valid question.

Thank you. We will take the next question from the line of Dhaval Somalia from Access Mutual Fund. Please go ahead.

Good morning. I have two questions. Firstly, this 35 lakh odd meters is broadly a 1400 odd crore order. So how many meters are, if you can give some quantum in terms of how many meters are pending from this order? And secondly, like you highlighted, the smart meter business this year did roughly 971-odd crores of top line. That implies that still there is another contribution of 740-odd crores from subsidiaries. What is the breakup of that, if you can help us understand?

Okay. Sir, in terms of the metering, we will take another two to three months to complete the entire pending order of this, and which is what we are also putting into our calculations.

And there is a small extension of this order as per the conditions. It may or may not come. That is another three and a half to four lakhs.

Let me say we are pretty confident in three quarters from now, we will be able to finish off this and the new businesses will be in a different model. That is on the majoring business.

And the other subsidiary which is very prominent is the KEMPL, which is exactly the EMS business only.

And we are considering this in EMS business and there almost, if you see our EMS retrievable, the start of the year we started with 379 crores. The EMS revenue, I will just talk about it. The EMS revenue is about 2,655 crores, with 442 crores in the quarter one, 683 in quarter two, 667 in quarter three, and 862 in quarter four. We started the year with 379 crores of receivables, and we ended up the year with, we went up. We went up to 466 in the quarter two, and 437 in the quarter three, and we brought it down to 399 in the quarter four, which sees that we have. It's exceeded only by 20 crores for a revenue growth of about 26%, which means our prudent management of receivables and our short-term lead time. Actually, basically, it is about how fast you can manufacture and ship it out of the plant and ensure that it gets into the factory and start consumed by the customer. Out of the 2,650 crores, for the other question, one is Executive Vice Chairman Anset KEMPL. There are two foreign entities which put together on an average about 300 crores revenue.

But they are also EMS company.

They are also EMS company in North America and Canada. Okay, understood. Thank you. Thank you very much for giving us an opportunity to clarify this question. I fully understand your concerns on this, but the business model of the metering business is completely different from the EMS space. While it is putting a stress on to the working capital management, ladies and gentlemen, believe us, it gives us an enormous ability to do the product development launch at the time, not only with the product development, but building our capability in erection commissioning on these type of projects. And of course, the software, which is going to really help us, not only for this contract, but beyond this contract, the money is going to come back for a long term for us.

Thank you. We will take the next question from the line of Jigar Shah from HSBC Mutual Fund. Please go ahead.

Yeah, hi, sir. Thank you. Thank you for the opportunity, and sorry to harp on it again and again on Smart Meter Business, but the communication from your side seems to be very off since last two, three quarters on Smart Meter Business and has created a lot of confusion. And if you see, you know, your commentary has been that, you know, this year, smart meter business FI26 would be 800 crores, but it has come at, you know, almost 1,000 crores. And going forward, you will not be taking a missed business, you know, and hence receivables, which is current but not due, standing in other current assets or non-current assets, which is around 250 crore, will come down. So that has not also done. In fact, revenue has increased, receivables have increased, and in FI27, I would like to know that, you know, from MS model, how much will be, you know, revenue and, you know, incremental other current assets, but not due, you know, incremental, what will be the situation?

Okay. Sir, I just wanted to let you know, while we were at 800 crores, when we got an opportunity to grab, to offset some of the business that there was a delay in automotive business or there is delay in something, we grabbed every opportunity and that is why we have grown in this. For the next year, while the 971 crores of sales, what we did this year, In absolute numbers, we may remain same or slightly up or down. That's not a question, but almost 50% of the business will be in the old model and the rest will come in the new model. As the executive vice chairman said, we have to finish some more and there is a contract that if the government is going to ask for more, we may have to continue to supply. So, we will be definitely taking prudent, but RESTEC should be able to work out the business model for this year. We will, in next investor call, we will just make sure that we start a presentation with this for past five minutes or something, and giving these numbers to make sure that we completely keep you all in transparency on how the business is going and how we are going to collect it. We are also working out on a couple of more strategies to make sure that how the non-current assets, what you are talking about, We've been setting up for a long time. How we are going to mitigate that risk and at least get 50% immediately, we will get back to you in the days to come on this specific project. But rest assured that this is on top of our agenda and top of our working to make sure that how we can reverse this and then get back towards the positive end.

Like we have improved our EMS, improved the working capital.

Please, please.

Yeah, just one more thing on the receivables. You mentioned that, you know, subsidiary is 1365 crore. So how much will be this long term and short term?

I think you only estimated about 250 crores is a non-current assess. I think that will be there. Rest of the current. I think our ability to now do the installation is going to be the key. There are four states where our team is working, and it is taking extremely high time for more than six zones. Six zones, we are working on this. But we have put enough infrastructure and team to do this. And we now got a clearance from them to do the almost from morning 6 to night 12. I think our team is putting effort and we'll feed them this process. We have been traditionally a manufacturing company, so we worked on improving the efficiency and productivity of the plant, and we really understand the new model of how it takes time to do the installation at every site location or every house.

Thank you. We will take the next question from the line of Sumant Kumar from Murtilal Oswal. Please go ahead.

Hi, sir. In balance sheet, the intangible asset in FY25 was 238, and in FY26, it is 536. So what was the 300 crore increase? What was the key interest for that?

I think if you go back to the two quarters before, we did two acquisitions. One is in Iscramico, and second is August Electronics, which is in Canada, and supplying in the VMS space to the big players in North America. The intangible asset that has been capitalized on these two is about 320 crores, and there was a clear thing in what is the order book, and it's based on the current accounting standard, and we did 320 crores. For all of your information, even though you have not asked for this question now, I think we are committed that how we are going to do the amortization of this. Our policy was once in a year. So in the last quarter, we amortized these intangible assets, and that has added to our depreciation and amortization to a level of about 32 crores. That is why the PAD in the last quarter has come down, PBD. Ladies and gentlemen, I believe that the full year was around 10%. Going forward, I think we'll be doing this amortization on every quarter. This is basically from the order book and other assets that's available from acquisitions of Iscramico and August Electronics.

Thank you. We will take the next question from the line of Samit Senna from McQuarrie. Please go ahead.

Yes, thank you very much. So, apart from the smart meeting business, I think everyone is trying to get their arms around guidance. Mr. Mutokumar, you were on TV talking about 2X of the GMN growth. I wanted to get a sense of when do you expect to get to that double the market rate? Is it? From starting now, or is it going to be the third quarter is what you're referring to? And would that include OSAT and PCB as well to get to that sort of double rate? Or is that just a pure EMS business? And then I have a follow-up.

Okay.

Sir, in the double X, two X growth, I think we have launched three products and which is already in production now, SOP started. So, we will continue to penetrate into every customer. And, you know, when the automotive business is growing at around 30%, share of business is the key driver for this business. And we'll continue to focus on not only introducing the new product, but also expanding our share in the business. And that is why we are confidently telling we are getting into this. The aerospace business is another one where we are substantially growing last year, and we continue to grow in this year. Like Executive Vice Chairman said, Railway did another course. As I said earlier to some of you when we are talking, the market industry is growing at 6.5% to 7% in India. Our market space is growing at around 15% to 16% and we will be doubling the growth. Being in the Middle East war, even in the last quarter, we have performed much, much better and our supply chain agility was good. Our strategic stocking has really helped us in this. So we will be doing the XXX growth from the start. When I say 2x growth, it's not the 2x growth of our last quarter comparison, but on the market growth and our growth. I just want to make myself clear. And, you know, the market is going to grow at 15%, and we are doubling, and then you are there as the number. All right. Okay, on OSAT and PCB, I'm sorry, I missed the question. See, OSAT and PCB, ours is a very, very strategic product. We are also evaluating how much of that is going to be consumed internally, and how much we are going to do with outside. For all the products that we are making, where we are making a design-specific, and where we are going to offering as a solution at the Cain's product. We may be using our own products because of the technological advantage and the competitiveness. At the same time, we'll continue to focus on the end customer. There's a pipeline of customers that's coming in, and you know the OZART ecosystems and PCB systems, we are strategizing it out, but at the end of the year, yes, the overall growth from those segments, we can see that either it will expand in bottom line or on the top line, depending on how we strategize to use the product. You know, our own product by expanding the margin or selling it to other customers. It will be a strategic call and it will be moving forward. It will be an integrated business.

Thank you. We will take the last question from the line of Archal Lohade from Nuwava Institution and Equities. Please go ahead.

Thank you for the opportunity. Just extending the previous question, if you could...

Sorry to interrupt in between Mr. Archal. Can you please use the hands and monen speak?

Better? Yeah, sorry for that. Am I ready to go?

Yes, sir, Audible, please proceed.

Yes, sir, just to extend the previous question, you know, if you could talk from a production value perspective, you know, the earlier guidance was 1,000 crores for OSAT, 500 crores for PCB. Does that stay intact or is, you know, is there any risk to that number? That's my first question.

We have not given any guidance like this. This is our first year. I'm sure and certain we will do a good number of PCB of around 300 to 400 and OSAT of around 250 to 300.

On how much of that we are going to consume locally, how much of them we are going to sell outside, is a strategy that's being worked out, and we'll be communicating to you at an appropriate time to all of you.

But OSAT business and all, locally, there will be nothing to start with. It will be always in export mode only.

Thank you very much. Ladies and gentlemen, we will take that as a last question. And with that concludes the question and answer session. I now hand the conference back to the management for the closing comments. Thank you. No worries, sir.

Thank you very much, ladies and gentlemen. I think we appreciate really the opportunity that you've given to us to explain about our initiatives and some of the concerns that you had. We hope that we have answered most of your queries, and if any one of you have any queries, please do reach us to our investor relations, and we are here to show you. We also welcome you to visit our plants and see those facilities, seeing and believing, and I'm sure that thanks to every one of you for supporting us in this growth journey. I'm just handing over the phone to our Executive Vice Chairman for any closing comments.

Thank you very much. I will be shortly meeting in some... So, if there is any clarification, please reach out to us. We will be happy to clarify all parts.

Thank you. Thank you very much.

Thank you, members of the management. On behalf of Access Capital Limited, that concludes this conference. Thank you all for joining us, and you may not disconnect your life.