Ladies and gentlemen, good day, and welcome to the Lumino Industries Q2FI27 Earnings Conference Call, hosted by Monty Laloswal. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need a session during the conference call, please signal an operator by pressing star and then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Tina Varmani. Thank you, and over to you.
Thank you. Good afternoon, everyone. On behalf of Motila Losfal Financial Services, we welcome all of you for Lumino Industries conference call for second quarter. We would like to thank the management for giving us an opportunity to host the call. From company side, we have with us Mr. Devendra Goel, Managing Director, Mr. Jay Goel, Whole-Time Director, Mr. Hemant Bhuvania, CFO. So, I'll hand over the call to the management team for their opening remarks, and then after that, we will open the floor for Q&A. Over to you, sir.
Thank you. So, good afternoon, gentlemen. I'm Devyendra Goyal. I'm the Managing Director of Luminar Industries. Thank you for joining us today for Luminar Industries Limited Q2 and H1FY27 Earning Conference Call. This is an important occasion for us, as it is our first quarterly earning call. Since the company's listing in September 2026, on behalf of the entire Lumen Industries team, I welcome all our stakeholders, investors, and analysts. I would like to thank our shareholders for the confidence they have placed in the company. We understand that being listed company brings a greater responsibility towards our investors, and we remain committed to transparent communication and creating long-term value for our shareholders. As we begin this new phase, I would like to use this opportunity to give you a detailed understanding of Lumen Industries, the markets we serve, the strength of our business model, and the opportunities we see ahead. I will also discuss our operational developments, order book, capacity expansion, and key priorities. Following my remarks, our CFO will take through the financial performance for the quarter and the first half of F27 in greater detail. So, let me begin by explaining the business we have built over the past three decades. Luminar Industries operates in India's power transmission and distribution sector. Our business has developed around a clear need. Electricity must be transmitted and distributed safely and efficiently from the point of generation to the point of consumption. This requires a larger network of conductor, cable, electrical wires, substation, transmission line, and supporting infrastructure. We participate, we as Lumino participate in this entire value chain or the ecosystem through our two business segments. One is manufacturing and the other is the EPC, which is engineering requirement and construction. Our manufacturing business produces aluminum conductor, power cable, electrical wires, and including special products such as high temperature, low side conductors, which is commonly known as STLS conductors. We also manufacture high-performance conductor, which is like AL59. These products serve a wide range of applications across power transmission and distribution and renewable energy, industrial facilities, railway networks, communication systems, electrical panels. These are the various industries where we cater to the demand for wires and cables. High-Temperature Low Sight, which is STLS conductors, are advanced overhead transmission line conductors designed to carry significantly higher electric current than the conventional ACSR conductors without requiring substantial changes to the existing transmission line infrastructure. In India, STLS conductors are increasingly important for power transmission capacity enhancement, grid modernization, and evacuation of renewable energy, particularly where constructing new transmission line corridors or acquiring additional right-of-way is difficult. Our EPC business undertakes projects across extra-high-voltage substation, power transmission and distribution, STLS reconductoring, solar and water management. These projects involve planning and execution of infrastructure, including the supply of materials, installation, and associated commissioning activities. The combination of these business is an important part of our operation. We are not limited to supplying products, nor are we dependent only by executing infrastructure projects. We can participate at different stages of the value chain, supported by our manufacturing capabilities and project execution experience. This integration is one of our key strengths in Lumino Industries. For an EPC project, the availability of the right product at the right time is important for meeting the project's schedules. Our in-house manufacturing capability allows us to supply certain products directly to our own project, giving us greater control over product's specification, quality, and availability. It also reduces our dependence on external supplies for these requirements. At the same time, our manufacturing business supplies product to external customers, including power utilities and EPC companies. This gives us access to demand beyond our own project portfolio. The two businesses, therefore, serve different customer requirements while also supporting each other. During FY26, approximately 23% of the specialized products used in our EPC projects were manufactured in-house. The model also supports a bidding process. Our understanding of the product Their application and their cost helps us assess project requirements and plan procurement and execution more effectively. Over time, we believe that the combination of manufacturing knowledge and EPC experience can support stronger customer relations and a wider range of business opportunities. Now, I would like to talk about our manufacturing capabilities because Whatever revenue that we generate, 70% of the contribution is from product and 30% is from the EPC. So for us, Lumino is more of a product company than an EPC company, and this is how we would like to grow going forward. We would like to be seen as a product company and not as an EPC company, and management is continuously working towards reducing the exposure on EPC. So I would like to talk about our manufacturing capabilities. We currently operate two manufacturing facilities at Howda in Winsenghor with a combined annual capacity of 40,000 metric tons for aluminum. Our facilities are supported by warehousing infrastructure and in-house testing lab accredited by NABM. Our product portfolio covers both the conventional requirements and specialized applications. Aluminium conductors are used in the overhead transmission line and distribution line. Power cables serve applications ranging from substation to industrial installation to railway signaling and electrical systems. Under our brand Lumecon, we also manufacture electrical wires, including house wires, earth wires, and thermostat insulated wires. We have added products such as AL-59 and STLS conductor to our portfolio. Our electrical wire business and cable portfolio also provides opportunity to serve broader range of customers and applications. We have recently obtained US certification to support exports to the markets including US and Europe. Our manufacturing footprint is located in West Bengal, with access to rail, road, port infrastructure. From this base, we supply customers across India and overseas. Our operations have covered most of the states and the union territories in India. We were exposed to 17 countries as of September 26. This reach reflects the range of applications served by our products. Our customers include power utilities, infrastructure developers, EPC companies, and international customers. We aim to build on these relationships through product quality, dependable supply, and a better understanding of customers' requirements. Alongside our manufacturing business, our EPC operations provide another avenue for growth. We have experience across several areas of power infrastructure, including power substation, transmission, and distribution networks, reconducting of HDLS conductors. We also have executed projects outside India, including our first international EPC power distribution project in Rwanda. The EPC business requires across engineering, procurement, and material supply, site execution, and project milestone. The scale and duration of each project depends on its scope, location, and technical requirements. As project progresses, the timing of the billing and the collection is linked to the contractual milestone, customer approval, and the completion of the specified work. This makes project planning and working capital management an important part of our EPC operation. We focus on aligning procurement with project requirements, maintaining execution schedules, and ensuring that the work completed is appropriately done and built. Our in-house manufacturing capabilities provide additional support in the process. Where product specification and project economics permits supplying product manufactured by us. Can improve coordination between procurement and site execution. This is particularly relevant when managing projects that require specialized conductors and cables. We see the manufacturing and the EPC business as complementary part of the same operating platform. Our objective is to grow both the businesses while maintaining discipline on order selection, project execution, use of capital, and the ratio of revenue generated between two verticals, which is manufacturing and EPC, and as I said, manufacturing would always contribute minimum 70% of the total revenue. Let me now discuss the industry environment and why we see a favorable long-term opportunity for our business and our growth. We see opportunities for conductors and cables supported by renewable capacity addition, the expansion of data center, and the continued investment in power infrastructure. Initiatives such as Green Corridor Phase 3 and Infrastructure Development under Trahan Mantri Gati Shakti are expected to support demand for our products. We also see opportunities for specialized products, particularly STLS conductor, as utilities seek to increase power transfer capacity across existing networks. India's electricity requirements are rising as economic activity expands. Industry capacity grows and more household and business gains access to reliable power. At the same time, the energy mix is changing, with renewable energy becoming an increasingly important part of the country's power generation capacity. These developments create requirements across the electricity network. New generation capacity needs suitable transmission infrastructure to carry power to the demand centers. Existing networks need to be upgraded to handle changing power flows while the distribution system requires investment to improve capacity, reliability, and efficiency. The industry's investment of possibilities therefore extends beyond the construction of new transmission lines. It also includes the expansion of substation, the replacement and upgradation of existing conductor, underground cabling, renewable energy evacuation, and energy associated with railway electrification and industrial development.
I will take you to the financial performance. For quarter 2 FY27, the revenue from operation was Rs. 661 crores compared to 509 crores in quarter 2 FY26, representing year-on-year growth of 30%. EBITDA was at 84 crores with an EBITDA margin of 12.8% while Profit after tax was 53 crores with a margin of 7.9%. In the first half of financial year 27, the revenue from operation reached at 1183 crores, representing year-on-year growth of 25%. EBITDA reached at 155 crores with a margin of 13.1% and profit after tax of 93% with a margin of 7.8%. The cash flow from operation for H-1 financial year 27 was positive by 56 crores. The repayment of borrowings from the IPO proceed has further strengthened our balance sheet. The reduction in debt service cost is expected to generate greater utilization of internal accrual towards growth of business expansion. An important indicator for our business visibility is our order book. As of 30th September 26th, our closing order book stood at 2,885 crores. This comprises of 922 crores of orders for manufacturing segment and 1,963 crores order for EPC segment. Additionally, we secured order worth 386 crores in October comprising of 229 crores for manufacturing segment, And 157 crores for EPC segment, taking the order book total to 3093 crores. We are L1 in tenders worth 555 crores. The manufacturing order book includes conventional and high-performance conductor, also includes HD, LT, railway signaling cables. This reflects demand across different product categories, while the underground cabling orders add to the EPC project portfolio. Capacity expansion is another important part of our plans. We are deploying our new manufacturing facility, so we are developing our new manufacturing facility at Ranihati Havda on a land acquired for this purpose. The facility is planned to add 35,000 metric ton of capacity in phases, taking our total installed capacity from 40,000 metric ton to 75,000 metric ton per hour. The new facility is intended to expand our cable manufacturing capabilities, particularly in ST cables, and broaden the range of products we can offer. The additional capacity is planned to come up in stream of phases, in line with the facility's development and operational readiness. Our expansion is important. It adds capacity input. In the product categories that complement our existing manufacturing operation. It also provides opportunity to support future demand without relying solely on the current facility. Our focus will therefore be on commissioning the facility in a planned manner, establishing production process, and building utilization as the business develops.
So, now, I would like to talk about... How the next phase for Lumino looks like? Where would we see the growth coming from? Where would we see the revenue and these kind of EBITDA margins that we're talking about? We would be able to generate these kind of numbers. So our focus will be centered on five areas. The first will be we will focus on execution of our manufacturing and EPC order book, timely delivery, product quality. Site safety and adherence to project requirements remain central to maintaining customer's confidence in securing repeat business. Second, we will work to expand the contribution of specialized products, including HDLs, and the broader range of power cables. We believe that developing our capabilities in these areas can improve product offering and create opportunities across transmission, distribution, railway, and industrial applications. Third, we will focus on efficient use of our manufacturing asset. As we bring additional capacity into the operations, we will pay close attention to utilization, operational efficiency, and the development of demand for the product manufactured at the new facility. Fourth, we will maintain close attention to the working capital and cash flow. Manufacturing and EPC have different procurement, execution, billing, and collection cycles. Managing inventories, receivables, supplier payments, and project milestones will remain important to ensuring that the business growth is supported by sound financial management. First, and the last point, we will pursue growth with discipline, our integrated business model, established customers' relationship, and experience across power infrastructure provide a base for future opportunities. We intend to build on these strengths while assessing new projects and investments on their commercial merits. To conclude, Lumino enters this phase with more than three decades of experience in power transmission and distribution sector as product manufacturer and as an EPC. An established manufacturing platform, EPC execution capabilities, and product portfolio serving a range of infrastructure applications. The investment requirement associated with the rising electricity demand, renewable energy integration, and network modernization provide a long-term opportunity for our business. Our aim is to translate these opportunities into sustainable growth through the right product mix, timely execution, and efficient use of capacity. We thank our employees, customers, suppliers, banking partners, and shareholders for their support as Lumina Industries begins this new chapter as a listed company. We look forward to engaging with our investors and keeping you informed about the process. So now, I'll leave the floor open for question-and-answer session.
Sure. Thank you. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and 1 on your touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. We have the first question from the line of Vidit Trivedi from Asian Market Securities. Please go ahead. Mr. Vadit Riberi, can you hear us? As there is no response, we'll move on to the next question. We have the next question from the line of Ajit Sethi from EcoQuantum Solutions. Please go ahead.
So, my name is Ajit. So, my first question is, could you please share the revenue breakup of our manufacturing segment between cables and conductor? And within cables, how much revenue is coming from low voltage and above 33 KV cables? And similarly, within conductor, what is the revenue contribution from STLS and conventional conductors?
Fine. Thank you for the question. So, the total revenue from manufacturing segment for H1 was 831 crores. Out of this, if you see on the conductor side, 65% of the revenue is from conductor. 35% of the revenue are from cable. For the STLS segment, we did a STLS revenue of 50 crores in H1.
And one more question was there regarding 33 kV. So we have set up a new facility wherein the commercial production will probably start by December or January 1st week wherein right now we are manufacturing low voltage cables only. From December or January next calendar year, we will start manufacturing cable of medium voltage which is right from 3.3 kV to 33 kV. That is where we will start expecting revenues from this range of product. But I would also like to inform that by the time we will start a commercial production, we also have a decent order book in hand for 11.33 kV cable to the tune of almost like 50-55 crores.
Okay, so with the new facility coming online, so it will improve our product mix towards high voltage, medium voltage and high KV cable. So how should we see the EBITDA margin of the manufacturing segment going forward?
So, Ajit, this manufacturing facility, the new manufacturing facility would be coming up only in quarter four. So, there would not be a substantial increase in terms of EBITDA margin for the current financial year. However, going forward as the production for the new plant comes up and picks up, so there will be generally the EBITDA for the high temp HD cables are 1 to 2 percent higher than the normal cables. So you can expect that our EBITDA would also go up by 1 to 2 percent on HD cables. However, on the blended basis, the EBITDA for the manufacturing segment should be in the range of 12 to 13, 13.5 percent.
Ajit, for us, as a new entry into 11 and 33 kV cable, there will not be a substantial increase in the EBITDA margin. Reason being, we would be entering this market, though we carry a lot of experience of 30-35 years of power sector. But to penetrate, obviously, it will take time, there will be some price competition. So, to bring those advantages to the balance sheet, I see after 12 months, the numbers should improve in a better way.
Could you please share the total volumes achieved in H1 F527 and how they are compared with H1 F526 and going forward, how should we see the volume growth for next two to three years in manufacturing services? Okay.
For H1 F527, we did a total tonnage of about 13,781 metric tons. And compared to H1 of F526, we did about 15,800 tons in H1 F526. So you see there is a slight decrease in the volume. That's because we have focused more this year on value-added products. So, because of our increase in this year as compared to last H1 in HTLS and EL59 conductors, that has led to the decrease in the tonnage.
So, typically, I would like to say that with an installed capacity, right now we have 40,000 metric tons of installed capacity. In FI 25-26, our capacity utilization is approximately 82 to 83 percent. So, and this year, H1, our capacity utilization is actually around 60-62%, but effectively it is 80% on a basis where, you know, we have manufactured high-value items, better margin items, which effectively gives me an 80% utilization.
Yeah, because AL59 typically takes up more production capacity as compared to conventional conductors, so they take about 1.5% almost capacity, so effectively we've produced the same quantity as last year.
And going forward, how should we see the volume growth for next two to three years?
So Ajit, we are almost at 80 to 82% utilization. So from the existing plant, hardly there would be any major growth coming up in terms of quantity. But since once the Ranihati plant comes up, the major growth drivers would be coming from the Ranihati plant.
So, wherein we'll be adding around 35,000 metric tons, and in phase 1, we'll be adding 10,000 metric tons. So, we believe that in next financial year, we should be able to use at least 70-75% of the 10,000 metric tons of new capacity that we'll add into our system. Going forward, every year we are adding 10,000, so we believe that, yes, gradually that growth will be there, and by FI 28, 29, we should be having a capacity of 75,000 metric tons, out of which, yes, I believe we will always, as a management, we will work very hard to ensure that we are using capacity at least to the tune of 80%.
Speaker 9
Yes. I have a question. I am a retail shareholder of Luminum industry. I have a question. Your seat number is held for substantial trade receiver.
Sir, sir, I am not going to hear you clearly, sir.
Speaker 9
My voice is not clear.
Yeah, now it is better. You said you are a retail shareholder of Luminum industry.
Speaker 9
Thank you, sir.
So, as we currently Cash flow from operation, if you see our cash flow is positive by 56 crores in September 26 as compared to 63 crores in September 25. However, this 56 crores which you are seeing, this includes a reduction in trade acceptance to the tune of 68 crores which we have paid from the proceeds of IPO. So, had this 68 crores not been paid, you would have seen my cash flow from operation would have been positive by 125 crores, which is substantial as compared to September 25. Further, your question was on working capital. So, if you see, in March, my working capital was almost 73 days, which has further come down to 66 days as of September 26. Your third question was on realization. So if you see my balance sheet as of March, we had a total debtors beyond 6 months which was around 230 crores. My total debtors was almost 900 crores out of which debtors more than 6 months was 230 crores. So out of that 230 crores as of date, we have realized 215 crores from that. So there is hardly any debtors which are beyond 6 months. However, in the nature of industry in which we operate, you will always see that the quantum of data is to the tune of 700-800 crores. But the payment cycle for the EPCR that we get 60% of the payment once we supply the material, we get 30% payment once the material are erected, and 10% payment comes once the contract is completed and is kept with the project authority as retention amount. So considering all that, our EPC working capital cycle as of September is 111 days, which earlier was 120 days. So there has further been improvement of 9 days in working capital cycle for EPC segment. In terms of manufacturing, in March it was almost 50 days, which has further come down to 46 days. We expect the working capital should further improve going forward.
I hope we have been able to answer your question, sir.
We have the next question from the line of Abhishek Kamdar from Value Plus Advisors. Please go ahead.
Yeah. Thanks for the opportunity. I just wanted to know the order book released on September 2885. And post that, I think you wrote about almost 100 croons of orders plus an additional 555 croons of L1 tenders. What do we expect the order book to be at by the end of this financial year?
And Abhishek, there's another thing. The total order book is approximately, with the L1 thing that you're talking about, the order book would be approximately 3,400 crores. Out of which ETC would be?
Would be around 2200 for the EPC. So, Abhishek, the order booking is not a challenge in today. However, our focus remains on cash flow from operations, that the project which we are executing, the cash flow should come on time, and also the project should be completed on time. So, the focus remains on that. As a result, which you see that the numbers which we have reported cash flow from operations, you have seen a positive cash flow. Further, in case you would have not paid the trade acceptance, this would have further gone to 125 crores. So, the focus is there to have positive cash flow, complete the project on time, and have a healthy EBITDA.
And secondly, Abhishek, our revenue contribution is 70% from product and 30% from EPC. So, you might have a question that you have such a substantial order book on EPC. So, how does it contribute to 30% only? So, for manufacturing, a tax for the order book is around 3 to 4 months, whereas for EPC, the tax is around 3 years. So, this order book that you are talking about is spread over 3 years for EPC.
Correct. Understood. Yeah. So, fair enough. And I just wanted to check, you mentioned operating cash flow is positive at about 56 crores, net of repayment of paid acceptances. What is the expectation for H2 on this, on the operating cash flow? Do we expect a further improvement?
100%. So, Abhishek, absolutely you will see further improvement in operating cash flows because our focus is always on realization and reduce the working capital cycle. So, going forward, we expect that it should improve further.
And this will be contributed both by the EPC and the manufacturing side, the improvement?
Yeah, both the segments. Mostly EPC because there has been long dues, we have completed those projects, there are retention money lying. So we expect that in H2, a lot of retention money is what we will be able to bring back into the system. So that will help in making our cash flow healthier and positive, more positive.
Thank you and all the best.
Thank you. Participants who wish to ask a question may press star and 1 on your touchstone telephone. We have the next question from the line of Rahil Shah, an individual investor. Please go ahead.
Good afternoon, sir. Congratulations on a great set of numbers. I have a couple of questions, but I'll start with the number one. How many substations of 220 KV and 400 KV have been completed and handed over to the clients? And when are we going to be eligible to bid for 765 KV substations?
Any other questions, Rajeshji?
Another one is, during the IPO, it was mentioned that substantial amounts of nearly 100 crores were stuck with West Bengal Electricity Board. How much of those monies have been received till date?
So, Rajiji, answering your second question, which is West Bengal Electricity Board, we have received 98, like, total outstanding was approximately 140 crores, out of which we have received 138 crores. So, right now, the outstanding is approximately 2 crores only from West Bengal Electricity Board. Now, coming to your first question, which is how many EAC substation up to 220 and 400 kV have you handed over?
So, we're in the process of completing these substations due to the orders we received last year. By March this year, we'll be completing about six substations, which will be 5 to 20 KV and 1 to 400 KV. And until now, we've already completed one from our earlier orders.
So, once we hand over these substations within March 27, we would become eligible to bid in tenders up to 765 KV. So we believe that next financial year, the company should be qualified to bid in tenders up to 765 KB.
And that's it, sir. All the best for the future.
Thank you. Participants who wish to ask a question may press star and one on your touchtone telephone. Participants who wish to ask a question may press star and one on your touchtone telephone. We have the next question from the line of Viraj Jain, an individual investor. Please go ahead.
Thanks for the opportunity. I am, sir. First of all, congressman on a great set of numbers. So, sir, my question was, you know, what is the outlook on underground EHV cabling orders? I mean, have you started getting any meaningful orders, and from which clients would that be?
Okay. So, Viraji, until now, we have been manufacturing low-voltage power cables, which is, though, that is also used in underground cabling system, but we are... Setting up a new manufacturing facility, which should be up and running by December, end of January, first week, wherein the voltage rating would be medium voltage and high voltage cables right from 1.1 to 66 KV. So, in that, you have already received orders worth 50 odd crores of 11 and 33 KV. And these are different clients like HG Infra, Heartic Power, Bail. And BPCL. So these are various clients that we have received the orders from.
And also we have received an order a few days back from Gujarat Electricity Board, DGVCL, which is an underground cabling order, which is an EPC and supply of underground cables. So that is about a 75 crore order, and out of which about 60% is the HD cable.
That is HD cable, yeah. And right now, in cables, we already have an order book of almost like 400 crores for up to 1.1 kg.
Understood. Sir, also, sir, what's the outlook on the HDRs conduct? That means we understand that there could be a potential of around, you know, annual order infos of around 5,000 crores. I mean, does that outlook still stand? Could you please throw some light on that?
Yeah, LTLS, TAM for next financial year, we are looking at 5,000 crores. The numbers are pretty strong. We believe that these are the numbers which should be there in next financial year as far as the TAM is concerned. And we expect that 10 to 15% of the TAM is what we would be able to convert as our orders.
Understood, sir. Thank you, sir. I'll get time in the line.
Thank you. We have the next question from the line of Abhishek Gamdar from Value Plus Advisors. Please go ahead.
Hi, thank you for the follow-up. I just had one question around AL59. You mentioned that it takes up a higher portion of the country.
I'm sorry to interrupt you, Abhishek, but your voice is breaking up a bit. If you could come closer to the microphone.
Yes, this is better, yes.
Yeah. Thanks for the follow-up. I just had a question around AL59. You mentioned that it consumes about one and a half times the capacity of conventional conductors. In that sense, I will add two questions. One is around the premium that we command for the AL59. Is it on a capacity-adjusted basis better off than our conventional conductors? Yeah, and how should we think, so once we get to our 75,000 metric tons capacity with the expansion, how should we, you know, what should we expect in terms of product mix between AL 15 minutes?
Once we achieve that 75,000 metric tons, we assume and we believe that we should be able to use the capacity to the extent of 85%. So that would be approximately 56,000 to 60,000 metric tons annual. Out of that 56,000 to 60,000 capacity annually, we are looking at, say, 20,000 to 25,000 metric tons in cables and around 35,000. We are looking at approximately 25,000 metric tons in AL59, and 15,000 tons would be contributed to HDLS and other conventional conductors. Now, coming to your first question, which is about the premium between, since we are making AL59, so that's almost like 1.5x of the conventional conductor, so what is the premium we are looking at?
Yeah, so, yes, obviously, since it takes up more of the capacity, it does have a higher premium, but as the market in itself is moving from conventional to AL59, that will be the standard form of conductors in a few years. So, that is why we see that there is a premium, but it's not substantial enough to cover that.
Because right now, the demand from the DBCD is mostly for AL-59. The conventional conductor demand is gradually reducing, just phasing out. So, the EBITDA margin is mostly the same when it comes to, a little bit better in AL-59 compared to conventional conductor.
Got it. So, in terms of our share of AL-59 going up, we expect... Our EBITDA margin should remain in this 12% to 13.5% band even after we get to the 75,000 tons?
Yeah, it should be within that range. We are working towards reducing the cost, bringing in more efficiency, but this is something which I would like to comment that, you know, it should be within that range, but we will always pursue and work hard towards a better efficiency and a better margin.
Thank you. We have our next question from the line of Garvita Jain from Seven Islands PMS. Please go ahead.
Hello, sir. Am I audible?
Hello. Okay, thank you. So, my question is on the finance cost, sir, since our gross debt is already down to 128 crores after the IPO. But we still have a lot of credit acceptances of around 520 crores bank guarantee cost also, which adds up a lot to the finance cost. So what is the finance cost that we expect for FY27 and FY28? And it's only how much the reduction possible, if that's where you can answer.
So, Karpita, we have raised a... Funds of 500 crores, out of which 337, the object was towards repayment of the debt. Out of that 337 crores, we have already repaid debt as 264 crores as of September. However, this debt was paid towards the end of September, so that is why you do not see improvement in finance cost this year. However, in H2 of the current financial year, since most of the debt has been paid, you will see an improvement of 15 to 16 crores in H2 in terms of finance cost. The balance out of 264, the balance 75 crore's debt which is pending, that should be paid within 15th of November because the due date for those debts were at 15th of November. Moving on, going forward, you will see that debt should be at the similar range and on an annual basis, you see that yes, there should be a reduction in finance cost to the extent of between 20 to 25 crore.
Okay. Okay. So, one more question on the, yeah, that's okay. So, we are expecting this thing to, approximately 15 growth saving on FI 27 and 25 growth by FI 28. Okay. One more question on the working capital. Since we are saying that we are already almost 80% capacity utilized on the manufacturing side, So, given the growth which we are expecting in H2, is this right to assume that that will most probably be driven by the EPC segment of the business, and if EPC is driving the growth, there might be some stretch on the working capital. So, how much stretch is possible from the current 66 days on the working capital? And if debt is to be maintained at the current level, do we have enough visibility on the cash generation from the current business?
Yeah, we have enough of visibility on the cash generation, and the growth would be contributed by both the product and the EPC. We feel that, you know, like our product would, from H1 to H2, our product will increase by 30-35%. And our ratio between the revenue generation would be 70% product and 30% would be the EPC. So we don't foresee our working capital or the capital requirement getting stressed because of EPC because we are maintaining that ratio and we would not be growing in a big way in EPC. That is what the management has decided. So we'll keep EPC within that range. And for that, we have the capital visibility.
Okay, and so 12 to 13% EBITDA margin which we are guiding for, that is the consolidated margin, right? If you could give me the margins which are there for the EPC business, how much margin are we expecting from the EPC business?
So, for manufacturing segment, we reported an EBITDA of 13% for H1, and for EPC, we reported an EBITDA of 13.5%. Blended basis, it was 13.1%. Going forward, the manufacturing EBITDA should be in the range of 12 to 13, 13.5%, and EPC should be in the range of 13 to 14%.
Thank you. We have the next question from the line of Viraj Jain, an individual investor. Please go ahead.
Hi. Thanks for the opportunity. Sir, in general, we are listening that all the EPC players are facing labor shortages. Whether we are also facing any similar issues and how do we intend to tackle them?
Yeah, hi. So, yes, there are some labour shortages in general, in transmission line specifically, since we do not operate much in that segment, so we are not facing the same kind of challenges.
And secondly, since we are doing most of the jobs are EHE substation, so we have a set of ganks for labour ganks. So, for us, labour is not an issue when it comes to EHE substation. Mostly, it is in the transmission line where the labour shortage is happening, and we are not doing transmission line projects.
Thank you. As there are no further questions, I would now like to hand it over to the management for closing comments.
Thank you everyone for taking the time to join us today and for your continued interest in Lumino Industries. We sincerely appreciate all your questions, observations, and valuable feedback. We remain committed to maintaining transparent and consistent communication with all our stakeholders. As we move forward, our focus will continue to be on strengthening our manufacturing capabilities, improving operational efficiencies, and expanding our presence in high-growth segments, and delivering sustainable and profitable growth. We are confident about the opportunities ahead and look forward to our continued support and association with Lumino Industries. Thank you once again, and have a great day. Thank you. Thank you.
Thank you. On behalf of Moti Laloswal, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.
