Mtar Technologies Limited (MTARTECH) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the MTAR Technology Limited Q4-FI26 running conference call. As a reminder, all participant lines will be the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference has been recorded. I now hand the conference over to Mr. Irfan Rahim from MUFG in time. Thank you, Anu, to you, sir.

Thank you. Thank you, Jalice. Good morning, everyone. On behalf of MTAR Technologies, I extend a warm welcome to all participants on Q4 and FY26 earnings on call. Before we begin the call, I would like to give a short disclaimer. This call may contain some of the forward-looking statements, which are completely based upon belief, opinion, and expectation as of today. This statement is not a guarantee of our future performance and involves unforeseen risk and uncertainties. With this, I would like to hand over the call to Srinivas, sir. Over to you, sir. Thank you.

Hello, and good morning to everyone. Thank you for taking the time to join us today. Today on the call, I am joined by Mr. Dineshwar Rao, Key Financial Officer, Ms. Hireka Jethi, Head Strategy and Investor Relations, and Orient Capital, our Investor Relations Partners. We have uploaded our updated investor deck, press release, and results highlights on the soft exchanges and company website. I hope everybody had an opportunity to go through the same.

NTR has achieved record fourth

quarter sales of Rs.3 and 6 crores and EBITDA of 61.8 crores with FAT of about 44.3 crores. For the year, we have achieved revenue of 876 crores with EBITDA of 171.2 crores and FAT of 94 crores. The outlook for Next Financial looks very positive and having confidence in execution of orders on hand. We are raising our guidance for FI27 from 50% revenue growth to 80% plus 80% revenue growth plus minus 5% with clear EBITDA margins of around 24% for the year, mainly due to our initial expansion of capacities in various sectors in clean energy, which is already commissioned. Apart from clean energy, the oil and gas plant will also be commissioned by September end and will be pre-operational. The nuclear and aerospace sectors will contribute in much larger numbers, with nuclear projects being executed this year, having strong order books, and volume production commenced in aerospace division with certain customers. We can also look ahead with confidence in spite of geopolitical crisis. As we are now well prepared and we are in much stronger position now to achieve the required growth and the required margins as well. The closing order book for FI 26 is at 2,580 crores, and we had given a guidance of 2,800 crores. The marginal difference is due to some nuclear orders and the defense orders being deferred to the current quarter, which does not have any impact on our business outlook for this year. We have secured orders of 481 crores during the quarter, and we are very confident of receiving large orders across various sectors during FI27. And also, we will end up with a very strong order book by end of FI27, much larger than the closing order book of FI26, and the estimated closing order book would be close to about 5,000 crores at the end of the year. As you are aware, the company has always been strategically positioned to focus on technology-incentive and differentiated products, and we are now witnessing the results of these efforts. Today, exports contribute to majority of our revenues, reflecting the vision laid out way back in 2010. The manner in which the strategic decisions have unfolded reinforces our confidence in the direction we have taken. We are working on several key initiatives. Which I will now take you through, and which we believe are expected to deliver significant outcomes in the coming years. Based on the advanced visibility, we have built capacities for our customers in the past, and we will be rapidly building capacities in the clean energy sector during the current year, and expand capacities as well as in the subsequent years in the sector, based on the customer requirements. You'll... We will never face, or the customer would never face any kind of bottleneck in terms of the timely deliverables that we're supposed to meet, and the teams are actively engaged in rapidly building these capacities, training their employees, and ramping up the operations to meet the customer's demand. Further, we'll be entering into long-term contracts with another international customer in supplying key infrastructure assemblies for AI data centers. For which we have already received the first article export orders for the 35 crores, and we have a potential of reaching 400 to 500 crores over the next couple of years. This is a significant development in the area of clean energy sector, which we are really excited about at this point of time. MTR has been a civil nuclear program for more than 35 years, and now we have the strongest order book of the 360 crores plus. And all these orders have to be executed over the next three to three and a half years. We do have the capacities to address the orders, and we are expecting more orders in the areas of republishment of reactors and also new reactors during the current financial year. This again will be on the growth path year-on-year basis, based on strong order book and execution capabilities of the company, having rich experience in the field over the years. As a vertical of MTR being the defense and aerospace business vertical, and we have orders for more than 360 floors, and the business has demonstrated tremendous growth and continues to hold strong long-term potential. We are catering to several repeated MNC customers in this segment, and we have already come into volunteer, and we are also working on the first article at the same time. The first articles for IAI should be completed by September of this year, and we should enter into one in production by October in the current financial year. We are gearing up our capacities in this sector as well to handle the increased orders from these customers. In the domestic defense business, we are focusing on various programs of defense, mainly in landing grades, structural assemblies for various aircraft programs, actuator assemblies. And we are moving in the right direction in this segment, and we are very positive of building this segment in a much bigger manner moving forward. The product division is moving in the right direction with revenues increasing year-on-year basis, and for the current year, we should cross more than 200 rows in this segment itself. We are already qualified now for various ball-screw supplies to even MNC customers as well. During the last financial year, and moving forward, we expect a lot more orders to come in, in terms of supplies of ball space with these MNC customers. Finally, it has been a great year with a positive operating cash flow of 195 flows, and we ended with networking capital days of 172 days compared to the previous quarter of 278 days. We'll continue to focus on NWC in the coming quarters as well. I would like to thank all the team members of FDR for their exceptional efforts during the year and their continued focus and dedication towards achieving the growth of the company and moving forward as well. The entire focus is going to be purely on achieving the required growth and delivering the required products to the customers on a timely basis. I will now hand over the call to our Chief Financial Officer who will take you through in detail with regards to all the financial information of the company.

Thank you, Mr. Srinivas Reddy. Hello, everyone. Good morning. Thank you for joining us on the earning call. We delivered a robust performance in FI26, registering a strong growth compared to the corresponding period last year. I would now like to take you through the company's financial performance for the year. Overall, the company witnessed healthy growth on both YOY and quarter-on-quad basis, driven by strong execution across key business segments. When comes to the full year performance in FI26 versus FI25, revenue from operations stood at 876 crores in FI26 as ignited 676 crores in FI25, which is the around 30% increase in YOY. EBITDA reported at 171 crores in the FI26 as compared to 121 crores in FI25, an increase of 41.7% increase. When it comes to profit before tax, 126 crores in FI26 as ignis to 72 crores in FI25, which is almost 75.1% increase in YOY. Profit after tax was at 94 crore in FI26 as ignis to 53.4 crore in FI25, registered a 76.2% increase. When compared to quarter 4 FI-26 versus quarter 4 FI-25, our revenue for this quarter is, quarter 4 is 306 crore in FI-26, as against 183 crores in FI-25. EBITDA reported at 62 crore in FI-26, as compared to 34 crore in FI-25, an increase of 81% compared to the previous year's fourth quarter. Profit before tax stand at 59.5 crore in FI26 as against 18.6 crore in FI25. Profit after tax was at 44 crore in FI26 as against 14 crore in FI25, which is an almost 222% increase on YOY basis. We are witnessing a strong growth across sectors in which the company operates. Amid this positive movement, the company continues to maintain strong focus on cash flow discipline, prudent capital allocation, and effective working capital management. Our working capital days stood at 172 crores during FY26 when compared to Q3 of 267 days. This is supported by various initiatives taken by the company, including better payment terms to the customers. The company is meant targeting to maintain a working capital level at a similar level by end of the current fiscal year. Our gas margins are at 47.7% and when compared to last year, 49.4% were also impacted due to increased input prices of consumables and other freight costs amid prevailing geopolitical uncertainties. Our EBITDA margin is at 171 crores, which is 19.5%. We have guided around 20% plus or minus 1%. 21% where plus or minus 1% we guided and we achieved 19.5%, which is due to the gross margin impact due to prevailing uncertainties in geopolitical regions and also increased headcount due to ongoing expansion activities in the company. Our ROC is at 17.2% versus 11.4% in the last year, where we are also expecting a significant growth going forward due to increased turnover, and also our margins will improve significantly as our MD has already indicated. We will have a better operating leverage and also increased turnover will allow us to give contribution to the company. Our part is at 10.7% versus 7.8% compared to the previous year. This also will improve in the current financial year due to increased turnover and margins. Our other important aspect we would like to highlight is our cash flow from operations are 196.9 crores in this fiscal year compared to 101 crores in the last financial year. This is mainly due to the margins, additional margins, and also the better payment terms negotiated with customers. And we are continuously monitoring the working capital in every line item we are monitoring, and we will see that we will achieve the further improvement in the cash flow firm operations. We believe that the road ahead is highly promising, and we are actively focused on expanding capacities, diversification into new verticals, strengthening our customer base across all existing segments. While the opportunities ahead are exciting, we remain equally committed to addressing potential challenges proactively to sustain our growth momentum over the long term. Thank you, everyone, for our continued support, and we thank you all the stakeholders of the company for their continuous trust and confidence reposing on us. Thank you, everyone. Now we open the floor for the questions and answers.

Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use answered while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Mohit Kumar from ICICI Securities. Please go ahead.

Yeah. Good morning, sir, and thanks for the opportunity, and congratulations on a very, very good year. My first question is, sir, is it possible to break your revenue expectation of 80% growth, or roughly around $16 billion, I think, revenue we're expecting for FY27? How much do we expect to come from the clean energy in nuclear and defense? Broad breakup will be helpful.

Basically, the clean energy sector would be around close to about 70% and the rest would be all the other verticals. The absolute numbers of the other verticals are also phenomenally growing year-on-year basis, which is very good. But the clean energy segment is growing much faster. That's where we are. Understood.

My second question, given your order book expectation of order backlog expectation of 50 billion, which means that expecting order inflow of approximately 40 billion, right, in FY27, can this break up this number of solute and clean energy, nuclear, and defense, your expectation, broad expectation?

No, the orders are going to flow in mainly from clean energy and all the other sectors. If you remember, I've said about the oil and gas. We talked about the different scenarios phase sectors, which we are in advanced phase in volume production as well. So the order info would come in from various directions for different verticals, but we are very confident of having the closing order booked around 5,000 closed by the end of this year. Mainly in clean energy and the other sectors as well, which we are in an advanced stage of execution with various customers, and we have proven our quality and timely deliverables to all the customers in various sectors at this point of time.

My last question on Niplea, sir. Are you seeing the tender for the pervishment of reactor or something like Mahai Banaswara tender getting floated? Are you still having some conversation around those opportunities?

Yeah, absolutely. See, my buzzword is new reactors. It is called the Ashwin project in joint collaboration with NTPC and NTCL. So, those tenders are expected this year. The refurbishment reactors we have already coated, and that's why I said that around 250 floors of orders were deployed for this quarter. We are pretty confident of getting those orders. But it does not have any impact on our business of the public. Understood.

Are there any other opportunity for the refurbishment of reactors in the near future, in this fiscal? Yeah, there should be.

Yeah, absolutely. I mean, it's a continuous process, right? We have a lot more reactors right now, and as and when the reactors are taken for refurbishment, then NCAR has an opportunity to participate in that. Understood, sir.

Thank you. Best of luck, sir.

Thank you. The next question is from the line of Bala Muradi Krishna from Oman Investor Advisor. Please go ahead.

As of the morning, can you please repeat the message that I am going to be a sponsor?

Bala, can you be clear? Because the voice is not that clear.

Father, could you please come closer to your answer? Yeah, thank you.

Yeah, is it final? Yeah. Could you please repeat the address part of the 27 and 28?

No, I've said we are based on the kind of requirements by the various customers that we have and the latest inputs that we have. It is very clear that we have, uh, The guidance would be now from earlier we mentioned as 50% of revenue growth, but now it will be around 80% plus minus 5% around that area. And also the margins would be around close to about 24%.

So, we are on the bloom side, so we are having some Catex plans. So, are you on track, and do you have anything to pass on the plan?

No, we are on track. As I mentioned earlier in my speech that we have already commissioned the initial phase of expansion, which is very good. And that's into, we're also training the employees and ramping up the whole thing. So that's already done in terms of the initial phase. And now we are moving into the, rapidly moving into the additional capacities that we're planning during the current financial year.

Lastly, on this Amca, any updates of the joint? So we have planned collaboration with the Amca.

There is no further update of that, as of now.

Thank you. The next question is from the line of Renew Bait Polygalia from IIFL Capital. Please go ahead.

Yeah, hi. Good morning, team, and congratulations for this healthy performance. So, my first question to you is, while one of, I think, one of the largest customers in the Clean Energy has rolled out a pretty aggressive multifold capacity expansion plan in the U.S., what would be your CAPEX plan over the next two to three years? And I'm not sure if you can quantify or not, but are you also looking for a multifold expansion in your manufacturing capacity? Your revenue growth tends to indicate significant jump in the growth potential as well.

Absolutely, yes. We are, obviously, we had multiple calls and we are rapidly focusing on additional capacity. We are doing that. We can't disclose the numbers as such because we have signed the NDA, but we are moving ahead with rapidly with multiple capacity expansions required by the customers. And that's on track right now. Now we are focusing, the entire team is focusing on that. And not only on the capacities, but also we are training the, parallel training the employees and moving forward with it so that these capacities can be utilized with the best of efficiency. And also, we are incorporating automation as well, wherever required, so that demand for dependency also comes down to a larger extent. Not everything can be done, you can do automation, but wherever possible, we are doing that. So, more or less, we are right on track with what... The customer needs and we are entirely focusing on that and you will see the capacity coming into play by end of this year and again next year as well. So everything is on track as far as the implementation plan for building additional capacities are confirmed. And as far as the capex is concerned, it's a rough figure. We have looking at around 250 to 300 crores of capex, which we are looking at to build all these capacities, multiple capacities for the customer.

And this 250,300 crores capex is for 2728, two years.

Yeah, it's spread over two years, not exactly one year.

Got it. Sure. I'm just curious on this side, given that the customer is doing multifold, do you think there could be more vendors which could be added on the supply side? And how confident are we on MTAG broadly retaining if we wanted to share with the customer?

We are really not concerned with that because we know the learning curve is very steep in this and we have enough on our plate. Doesn't really matter to us at all. And it's not easy to establish this technology and also to ramp up at the same time. And we have been satisfying the customer over the last 10, 15 years now. So we have been working with them together as genuine partners. And we strongly believe that we will adhere to their requirements over the coming years very comfortably. So we are not really worried about that.

Oh, super.

So, second, pretty impressive. I think last few years, one of the persistent concerns was working capital stretch and impact on cash flows. So, good to see that working capital has finally started to improve cash flows. OCS is near 25% of EBITDA along with growth. So, the question here is, now that we are looking at significant step-up on the revenue side, nearly 70-80% plus revenue growth, do we expect these OTAs or to EBITDA to broadly sustain at these levels? And we have guided for similar networking capital cycles. So, are we expecting the advances from customers to broadly sustain going forward as well?

No, basically, we have negotiated good payment terms with various customers, not necessarily with one particular customer. Looking at the kind of requirements they have, and we have clearly told them that the terms have to be much better to improve our working capital days and also looking at our operating cash flows being positive. So, this is a continuous endeavor from our side, and you will see improvements happening during the current financial year as well. So, we will sustain those margins pretty comfortably right now, and we are on track with that. So, as far as the improved guidance is concerned or the margins are concerned, we are very clear. We have done all the analysis over the last couple of months. In spite of the current geopolitical situation, we are pretty confident that we are in a much stronger position today to confidently say that we'll be able to achieve this.

And this last question, while our debt for the year overall has increased to about close to 30 crores, how are we looking at the borrowing level or debt levels to be over the next two years, 2020?

Yes, you want to answer that?

Hello. Yeah, I would say presently we need to raise debt for the increased expansion plan. So we have considered in our matrix debt is an option to go ahead as far as today is concerned. So every year we are also repaying and also we are increasing a debt of term loan we are increasing. We are able to negotiate it at a better payment terms, which is INR loans we are negotiating at a better term. So, for the time being, our debt-to-equity ratio is very healthy, so there is no issue of raising a debt, and we will see that we will repay the debt as fast as possible. And the capacity expansion requires the capital. Either you need to go for debt or for raising capital from the external sources, but we are doing on the debt basis as of today.

Perfect. Any targeted levels for 1527 on the debt side, end of the year number?

See, like that side, today we are at, we wanted to maintain a debt equity ratio for next two years, 0.5, in the range of around 0.5. We'll see how it goes.

Perfect. Thank you and best wishes, Steve. Thank you.

Thank you. A reminder to all participants. Please restrict yourself to two questions. The next question is from the line of Sumil Jain from Lucky Investment. Please go ahead.

Thanks for taking my question. So, you know, you've indicated multiple capacity expansions on the hotboxes side. I understand that you cannot give a quantitative number, but is the number going to be significantly higher than the previously mentioned number of boxes? You know, on the previous call, as you discussed, if you could give some sense directionally on, you know, the capacities on that side.

Yeah, absolutely. See, when I said multifold capacity expansions, we're working on it. Obviously, the numbers are significantly higher. As I said, I can't specify, quantify the details, but yes, absolutely, it's on a significantly higher side.

Got it. Now on Fluence, I see that that customer has been dropped from the customer list that you mentioned in the presentation. Can you give a sense on that project?

Yeah, I've told this in the last earnings call itself that the fluency is still deliberating because. of the various factors on the duties imposed on batteries and various other things for exports, so this is something which we have done the prototype for them, but they're still deliberating it, so we have dropped it because we have enough on our plate right now, and as and when they have the requirements, we've already done the prototypes for them, so we can move ahead with them whenever they're ready with it. It's still open, but... It's not a closed-door situation, but I think about it unless I see some traction on that, so let's see how it goes.

Got it. Now, finally, if you could give us a sense of the opportunity size with the new customer onboarded for AI data centers and also on the FBR, as you, you know, recently mentioned in an interview, if you could, you know, give us a sense in the next two, three years what these businesses could look like in terms of either audit and flow or execution.

I did mention about the data center infrastructure with another customer as well. That's really not a milestone for the company in terms of diversifying and getting more into the AI data center business opportunities that we are doing. We've already received the first practice order for that, which is close to about 35 floors, and then, as I said, over the next couple of years, if everything goes well, we're looking at almost like 400 to 500 floors of revenues being generated from that. And we are looking at a separate. We already have the basic infrastructure for that to deliver the orders for the first particles and as well as certain volume production that they need. And based on how it goes, we will try to build the infrastructure for them as well in the coming years. And as far as the FBR is concerned, we worked on major assemblies for the FBR for a long time back, and finally it's very critical. So hopefully we have done a major contribution for that project, and as and when the government decides to add in a few more reactors, then we will have definitely an opportunity to work with that as well.

Can I squeeze in another question if that's okay?

Yeah, it's fine. Go ahead.

On the oil and gas side, so some of our other peers have mentioned the signing of major contracts, multi-year contracts with the same customer that we quote. If you could help us understand the opportunity size or the total machine parts procurement with each of these oil and gas customers, and how much is currently being sourced from India, how much can incrementally be sourced from India, and your competitive positioning in that space.

Yeah, so, as I said, the plant, see, we have done successfully the first particles for the customer, and they really appreciated our quality and the kind of work we have done for them. This is on the whipstock assemblies, which we have done for them, and obviously, the potential is around 35 to 40 million dollars over the period of time, as and when we get into the major volume production. And also, we're adding a lot more customers in oil and gas. We're just not depending on one customer. We are looking at the other customers, which we have received orders as well for first radicals. Going on track with it. And the good news is that the main plant is going to be operational by September. So it's like a chicken and egg story, right? And you need to have a real dedicated plant for this, which is going to grow very rapidly over the next five to 10 years, the way things are going right now. And that's we are right on time with The kind of facility we have and this sector would grow very rapidly moving forward as well.

All right. Thanks a lot. I'll join back to you. Thank you.

Thank you. The next question is from the line of Viprao Srivastava from Philip Capital. Please go ahead.

Oh, yeah. Hi, sir. Good afternoon.

Quickly, sir, on the hedging policy, given that, you know, we have received

a very large other income because of currency depreciation. So, any light you can throw on the hedging policy and what kind of other income we can expect in coming year?

Yeah, you want to answer that, please?

Can you come again?

Sir, on the hedging policy, sir, given that, you know, there is a lot of currency deposition which has happened, and hence we have received other income. So, what is the hedging policy, and, you know, what kind of range we can look at for FY27?

So, on the revenue side, you are talking, correct?

Other income, sir, currency depreciation and other income coming in?

Other income, today we are, we have 25 pros mainly because of the foreign exchange gain we have received in this year. So, we will, you know, it is a realized, mostly it is a realized, and someone is, something is an unreelaged forex gain also is there. And in the current financial year also, we are witness, we have spoken to the bankers, many people. The U.S., the dollar will be in the similar range, and it will further, rupee will depreciate. That is what the forecast is showing. So that way also we will gain in terms of the, you know, foreign exchange fluctuations will help us because more than 70% of our revenue is from the exports only. Imports are maximum 30% to 35%. So thereby we will gain on this also.

Sure, sir. Thank you. Thank you. Thank you.

The next question is from the line of Meet Jen from Motilal Oswal. Please go ahead.

Am I audible?

Yes, sir, you are. Please go ahead.

Yeah, I am. Thank you, sir. Thank you, sir. Go ahead. Thank you for the opportunity, sir. A very good set of numbers and very strong guidance. So my one question, most of the questions are answered. My one question is regarding this MKJet landing gear as support. So just want to understand, can you throw some more light on this key? What kind of quantum of the size and at what level currently are we in this stage and which are the customers for

No, basically, it's in the initial stage right now. Sri Lekha, you want to answer this question? Because you are handling this. Are you there?

It's a four-cron order, me.

Okay, so what we understand earlier that we were... So, we were... Hello.

Hello, yeah, yeah, please.

Yeah, I was not able to hear you. I was not able to hear you earlier.

Okay, okay.

So, it's a 4 crore order which we got, and it's the first structural assembly which we managed to win for AMCA. So, right now, they are floating the tenders for structural assemblies, and we have started participating in all the tenders, and we are one of the eight qualified vendors for these structural assemblies.

So, this is similar to what we were doing along with Adani group that we didn't receive, or this is something different?

But that was also for AMCA project. Yeah, that is different, and this is different, because both are for AMCA. That is for the entire integration of AMCA aircraft. But parallelly, there are tenders going on for structural assemblies of AMCA, and there are only eight qualified vendors who can participate in these structural assemblies.

Understood. Our second question is on this new client that we added SLB in both our oil and gas and clean energy. So going ahead, whatever revenue that we record, we'll be putting in the same head of as a fuel cell or we'll be getting a separate head for this?

No, it will be in the clean energy segment as such, as far as the... Data center infrastructure is concerned. As far as the assemblies for oil and gas, we will go into the oil and gas segment.

So, currently, sir, we are doing this prototyping work for them right now, right? Yeah, that's it. Okay.

They are doing the prototype work as I mentioned. They are in multiple, they are in multiple segments, not only in oil and gas, but also into the infrastructure building for the data So, they'll go in the respective segments. Understood.

And the last question on this, like you mentioned that we have received some better payment terms and also we see some advances, capital advances that have come from the customers. So this will be a normal going ahead or this is a one-time advance that we received?

See, it's not about anything. When I say we're talking about better payment terms, it's a multiple factors, right? It is not about advances, it's about better payment terms in terms of trade periods and all multiple factors which we have negotiated. It's not just one customer, it's multiple customers. The way we are growing, we felt that we should, we are in a position to... We'll discuss with our customers and ensure that we are on track with their requirements and the kind of volumes that are growing up and the demand which has been created. So we are able to do that in a more efficient manner right now. And this will be a continuous process. There's nothing like one time, as you mentioned. It will be a continuous thing and we'll sustain it moving forward as well to maintain our working capital and the number of days and operating taxes.

That's a very good question.

So if you look at last year, it was we had a weak first half, right? And the strong second half. But this year, it will be we'll have a very good first half and a much better second half. That's what we want to do.

Okay, sir. Thank you so much for the information.

Thank you. The next question is from the line of views, Seval Dasani from Sundaram Alternate. Please go ahead.

Yes, hi, sir. Congrats for a good set of numbers. So, my first question is on the cross margins. There is a... 190 basis points, sequential depth. So can you please help us understand the reasons for that? Has there been any renegotiations with our customer in Green Energy?

Absolutely not. It's not about negotiation on the front. It's about deliverables right now. So there's enough requirement by not only in one customer, but various customers that we have. And it's purely because of the last quarter was mainly certain costs have gone up because of all of you are aware about certain geopolitical situations, our input costs have gone up on the operations side. But that's very marginal. So I think as I mentioned earlier, we are pretty confident and strong enough right now to You know, to adhere to the margins that we have said right now, and also the revenues that we have declared, the guidance, what we've declared. So, there is no question of reduction in prices or anything like that. That's not the case.

Sure, sir.

So, my next question is on the CapEx plan, where you have talked about just 250 to 300 crores. And the multifold capacity expansion which we have talked about. So, this would ideally lead to a much higher, much much higher asset turn for us versus what we are currently doing.

So, do you think this is sufficient enough to cover for growth for next two, three years?

No, see, we are going step by step, right? When I say multifold capacity expansions in various sectors is purely based on the demand what we have, not just for this year, for the coming years as well. So we are planning year-on-year basis. So that's how we are implementing the whole plan based on the customer needs. And which is very promising for us right now. And since we are in this line for many years, it becomes that much more easier for us to implement the capacities and also to execute them. The execution is the most important aspect of it and we are pretty confident about it. The way we are increasing our headcount, the management bandwidth, and also training the required people to get them qualified. We are doing that ahead of time. And we always had these capacities in the past as well, ahead of time, and which has actually given us. A very good result because of having such capacities and we're doing the same thing even now. And this time around, it is purely based on the demand which has been told to us and the visibility which has been given by our customers. That's how we are moving forward.

And so lastly of this nuclear execution, we have, I think, around 700 crores of order book. So what kind of revenue should we assume for this year? Because I think you have said that in the next three years, we assume the execution of the current order book.

Yeah, see, we have to execute over the next three, three and a half years. Some of them are like close to four years, but most of the orders should get executed in the next three, three and a half years. So you'll see a real upsurge in revenues in the current year moving forward as well as in higher revenues. That's why I mentioned that. So we are in a very sweet spot in terms of nuclear division because we never had this kind of order book in the past. And this order book will continue to grow, actually, because a lot of, even now, if you look at over the next 50 years, a lot of private players are also coming with this program, nuclear program, which is announced by the government of India. And so we have enough infrastructure to handle this because we have been in this line for 35 years. So this will be on the growth path for sure.

So, that's it from my side. Thank you and all the best.

Thank you. Thank you. The next question is from the line of Dhawan Shah from Applicate Advisor. Please go ahead.

Yeah, thanks for the opportunity, sir. And my question is on the guidance, like there is a strong visibility from the bloom plus other segments are also, you know, doing well. So what is our internal guidance? By when can we achieve 5000 crores of revenue?

That's a very long-round question. Anyway, so I can't talk about that right now, when we're going to achieve 5,000 crores, but the way we are moving forward, I think we are on track with that number probably. Let's see, I can't just say anything right now about that, but one thing I can promise you that we are on track with that.

By FY30, is it possible?

Hopefully, yes. Let's see how it goes. I can't tell you. We have a clear roadmap to be where you want to be by FI type.

Understood.

And how much capex do you have to do, you know, to achieve that kind of revenues in incremental capex apart from this 250 crore?

No, we will be having incremental capex year-on-year basis. That's very clear in terms of additions of capacity year-on-year basis based on clear visibility given by various customers of ours. And each year we'll evaluate that and we'll plan it ahead of time. So that's an ongoing process. The kind of growth that we are looking at right now.

But as per your estimates, how much capex we have to do, you know, to achieve 5,000 crores of revenue? Internally, is it like 500 crores, 600 crores? How much is our internal estimates?

Well, we can't exactly specify that right now, but probably between 500 to 700 crores, I guess.

And we are also building the greenfield capacity, so that would be enough, you know, to achieve this kind of growth.

Yeah, absolutely. I mean, we are building the infrastructure for the future growth and also adding equipments in a phased manner based on the requirement of the customers. And that should be more than enough.

Understood. And when can we see, you know, the operating leverage play out? Because I think the product mix is also changing, you know, from clean fuel to other segments, maybe year down the line. So how do you see the operating margins play out, you know, once we'll achieve the scale?

Well, the operating leverage will improve because of, we'll have better operating leverage because of the kind of revenues or volumes that we're doing right now. And it's not only in one product, but multiple products that we are working with with the customers, and we'll start seeing that from the current finance period.

Sure, sir. Okay. Thank you.

That's all for my question. Thank you. The next question is from the line of Gaurav Naguri from Evendus Park. Please go ahead.

Hi, thanks. Thanks for the opportunity. Just in continuation to the question which was previously asked, can you share more details on what kind of components that you are supplying to these data center solutions? Is it part of MEP or part of RACs or any more details? And what is the value add in those components? That's question one. Second is on the execution and the margin risk. And where I'm coming from is that obviously orders inflow is obvious, and looking or hearing the commentary of your client, it's given that orders should come in. But what we heard is that your peer or the competitor is also increasing capacity in their home market, and you are also expanding the capacity as well. So do you foresee margins kind of be at risk in the longer term, or in the near term, because the ROM and multiple commodities have seen a sharp price hike, it would be difficult for you to pass on these increases in the price of the price. So these are my two questions.

So, to answer the first question, we are dealing with the various assemblies required to build a data center infrastructure, and the value addition is close to about 70% in this area, and it's pretty profitable, and it's not, it's a very specialized job that we are doing, and we are doing the first articles right now. We'll know more about it as well in the first article, which is about close to 35 goals. That excels is a big number. And as far as the capacities that you're looking at, see, we're not looking at competition. See, the most important thing for MTIR is what we have done over the last 12-15 years. And how we have partnered with our customers in ensuring that being very innovative in our approach, bringing automation into play, doing various other innovative aspects with the customer. There's enough on the plate for us to work on, and the most important aspect is that there is pressure on deliverables more than anything else right now to ensure that we deliver everything what we need, and we are focusing primarily on that.

Okay, okay. I mean, if you can just elaborate a little bit more on margins, because in this quarter also, we have not seen much orbiting leverage benefit in the gross margins and the EBITDA margins, and despite a good run date in this quarter, and given that we have seen a sharp inflation across categories, do you foresee, I mean, what gives you confidence that margins would see expansion on these models in flow?

See, it's not only about one sector, right? If you look at the current financial year, so we were, we were, last year, we were working on various aspects in different sectors. In first article, we are building the WIP for various nuclear programs and all that. So, we will see the margins coming into play because of not only one sector, but multiple sectors that we are dealing with. Right, and the kind of volumes that we are looking at this year, like last year we had, it's not about one quarter, right, if you look at last year we had certain impacts because of geopolitical situation, but we are beyond that right now because we evaluated everything and we studied that, and that's why we said we are in a much stronger position moving forward as well. So, if you look at the last year, we had a weak first half in revenues last year, but this year, as I said, our first half itself is very strong, and the second half will be even much better than that. So, obviously, the operating leverage will come into play big-time quarter-on-quarter basis as we are ramping up step-by-step quarter-on-quarter basis for the deliverables, and that will help a lot in terms of improving the margin. In one given sector, and all the other sector also, the volumes are going up in absolute numbers. People talk about percentages, but I would always look at the numbers in how which we are growing in each of these sectors, which is very promising. And that's also contributing a lot to coming with improved margins, quarter-on-quarter basis, and ending the year at around 24% EBITDA margins for the year.

Just to add MD's point, we have spent almost 28% on the fixed cost, both salaries and other expenditure. With increased revenue, we will have at least 5% operating leverage, we are estimating. Definitely, there is no issue as far as the meeting the EBITDA targets. In the conservative scenario also, we have considered.

Okay. And is it possible to quantify how much of the new product development cost is expensed out in P&L and FI-286?

See, this is a continuous process. Even last year also, we are working on first articles in aerospace and other things, and this year we are completing mostly all the first articles of all the customers in aerospace. So we will have volume production in the future. With the same set of people and machinery, we are going to do much more revenue than what was done in the last financial year. So, first article, new product development is a continuous process in the company. Every year, we are incurring that expenditure, which is already factored in our actual margins and also whatever margins we have communicated to shareholders in this call.

All right. Okay. Okay. But is it possible to quantify in FI26 as a percentage of revenue? How much FI expense as a revenue is required?

Not so much, because if you look at our revenue, mostly 90% of the revenue is only from the existing products what we are doing. Only oil and gas. Already we have done the first article. And the facility is coming up in September of this year. So we are going to do that production around the next six months. We are doing the volume production because already we have done the first article. So other clean energy sectors we have already done. Only in the aerospace, first articles are happening. And this year is almost is completing by September. All the September or December maximum it is completing. So it is not sizable material amount to quantify. All right, that's what I want to say.

Thank you.

The next question is from the line of Avichit Singh from Systematrix. Please go ahead.

Thank you for the opportunity, sir, and congrats on a great share of the results. First question is on the nuclear business. Are capabilities and capacities... In the nuclear business, are they fungible across reactor technologies? Let's say, PHWR, fast speeder. So, in case one sticks up faster than the other, are we spaced to supply, you know, across these technologies, and how does the scope change, if that happens?

No, all the assets are fungible, you know, whether it is FDRs or PHWRs, that doesn't really matter. The technology is different, but the... Missionaries and all are fungible across both the reactors. So, that's not an issue at all and we have built our own machines earlier for taking care of the FBR reactors and we continue to operate those machines, very specialized machines and they are fungible as well across all sectors. So, it's not an issue at all.

Right. You mentioned that you expected an order in flow from another nuclear equipment reactor in FI-27. So the concern for that would be similar to the one that we received in FI-26? Or there would be a change? No. Can you repeat your question? I think the order in flow expected in FI-27 from nuclear. The concern of that would be similar to that one that we received in FI-26. Of about 5 billion?

No, no, we can't quantify that. We have refurbishment of reactors and the new reactors. So it depends on the timing of the tenders and when the department would release the orders. So it will be a major order that we flow in, but I can't assure the timing of that. So the argument that come in, yes, the quantum would be similar. Thanks.

Then secondly, on the republishment part of the nuclear business. So what is the kind of nature of the order? What is the scope of our business in the nuclear for republishment orders? And how to look at it as from the perspective of frequency? Let's say how many orders do we expect for an in the next two to three years? It depends on the refurbishment of the reactors.

Yeah, so basically it depends on the refurbishment of the reactors that we have used. And already we got some orders of the refurbishment of various reactors. Overall it's five reactors, so we've got some orders on those refurbishment reactors. We're getting some more in this quarter. So basically this was the pool and channel SMD that we're looking at in the refurbishment area, which we have been doing for ages right now. So, that's an ongoing process. So, each time they declare as and when they need to refer to the reactor, and such reactors is an opportunity for MTAR to cater to the requirements of the NPFL to handle this reactor. Thank you, sir.

Thank you a lot, sir. That's a command. Yeah. Thank you.

Thank you. The next question is from the line of Amman from Assiscute Investment Management. Please go ahead.

Good afternoon, sir.

My first question is on the nuclear side. So, we are mostly doing products which are related to, say, machining head and all those things. You have talked about we are also trying to enter calendaria and all those products. So, can you give an update by when do we expect the approval and when we can start bidding for such products or addressable market per reactor also increases?

No, technically, we are already qualified for Calendian and Shield. And like for the Mahi Baswada, Achwin projects, they have intimidated where the tenders will come in this year for that and which we are qualified for that. So we'll be able to participate and this for the first time we'll be doing it. We have the infrastructure and we are qualified for it right now. So we'll be participating in that and we're expecting the orders in that area as well. That's the increase in wallet share in what we can contribute to NTC.

Sure, that is helpful. You have talked about scaling from Q1 itself. Is it on track or there is some delay and only Q2, Q3 we can see scaling of nuclear business?

No. Nuclear business would scale. Primarily, the way we are looking at it is by the time we get the raw metals in place and all that, we are working on it. We already have orders, earlier orders, where it's an advanced stage of execution. So we'll really see the scaling up going from Q2 onwards in a big way.

Sure, sir. My next question is on oil and gas site. You very nicely explained the chicken and egg situation where customers were looking for us to put the plant. And finally, the plant is coming online now by September. So could you talk about what kind of peak sales we can do from that plant? And also, is there a brownfield capacity expansion that is possible because a lot of these customers want. Big plants and they have very big timelines next to five years visibility. So, could you talk about a little bit on that part?

See, the plant, the way we have built the infrastructure and the equipment and the machinery, it's a multi-pole plant in various requirements of a number of other customers as well. So, if you look at three to four years horizon, we are looking at about the oil and gas plant, which is getting commissioned in September. Grow up even for free to finite rows of revenue in that one plant itself.

That is helpful. Final question on aerospace side, you talk about significant order from actuator assembly, which we are expecting from LCA mark one eight ages. So, is it like 50 hundred crores or what is the significant meaning is it 20 crores?

I think it's about 130 to 150 crores, and that we have done it, we got qualified, we have supplied them, and we are doing that, and we are expecting that order, we are supposed to get it in the last quarter itself, but hopefully we should get that in this quarter.

And sorry, for say X number of just only, and this we can expect to be reputed every year for at least two, three years?

We have to see that, you know, like basically it's a free issue material. What you're talking about here is the order. What I'm talking about is the raw material is free, issue free from the department. So it's just a value at what we're looking at. And so let us get the first batch of orders and then we'll see how it goes. It also depends on the programs that they set up, right?

Yes, sure. That's it for my sake. Thank you.

Thank you. Due to time considered, we take this as a last question. I now hand the conference over to the management for closing comments.

So I'd like to thank first all the NTR team members for a phenomenal job done last year, but we're also focusing on the future years as well. And the way things are going, we are very positive about what we are going to grow in the current year and maintain and sustaining our margin, and as well as the implementation of various Capacities, expansions that we're looking at in the current year. So a lot of focus is being done in these areas as well. And we're very confident of moving ahead and searching ahead with the growth that we're looking at, not only for this year, but years to come. We have a clear roadmap for the next, at least for the next five years. We have a very clear roadmap of what we need to do to build this company at a much greater level, that's for sure. And I would also like to thank all of our shareholders and investors for imposing faith in us over the years. Moving forward as well, we would assure that we'll adhere to whatever we have mentioned in terms of our guidance and as well as the margin profile that we have explained. Thank you so much, all of you, for spending your time to join us in this earnings call. Thank you so much.

Thank you. On behalf of MUFG in time, that concludes this conference. Thank you for joining us. You may now disconnect your lines.