RIR Power Electronics Limited (RIR) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the RIR Power Electronics Ltd. Q2 FY27 Earnings Conference Call, hosted by Veritas Reputation. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this call is being recorded. I now hand the conference over to Mr. Abhishek Savan from Verita's reputation. Thank you, and over to you.

Yes, thank you, and good evening, everyone. On behalf of RIR Power Electronics, I extend a warm welcome to all participants joining us for the Q7 FY27 earnings conference call. We appreciate your time and interest in joining us today to discuss the company's performance for the quarter ended September 30, 2026. We truly value your continued interest and support. As you are aware, the financial results for the quarter have already been disclosed to the stock exchanges and are also available on our website. Accordingly, today's session is designed to provide deeper insights into our operational progress, industry outlook, and the company's long-term value creation journey. Following the opening remarks by our senior management, we will open the floor for a quick Q&A session. Kindly request you to keep your questions concise and relevant to allow a broader participation. Before we begin, I would like to remind you that some of the statements made in today's discussion may be forward-looking in nature. They are based on the company's current expectations and subject to various risks and uncertainties that could cause actual results and outcomes to differ materially. Thank you. Joining us on the call today are Dr. Harishan Mehta, non-executive chairman, Mr. N. Ramesh Kumar, managing director and chief executive officer, and Mr. Rankit Shah, chief financial officer. With that, I would now like to hand over the call to our managing director and chief executive officer, Mr. Ramesh Kumar, for the update on the financial performance and overview. Thank you. Over to you, sir.

Thank you, Abhishek. Good evening, everyone. Once again, I thank you all for joining us today for RIR Power's Quarter 2 FY27 earnings call. I am Ramesh Kumar, managing director and CEO, and it is my pleasure to walk you through the company's performance for the quarter ended September 30th, 2026, followed by key operational updates and the outlook going forward. On the standalone basis, revenue from 1% stood at 33.98 crores compared to 27.16 crores in quarter 1 of 527, making a 25.1% sequential quarter-on-quarter growth. While on year-on-year, revenue grew from 25.64 crores to 33.98 crores, reflecting a 32.5% increase. Adjusted operational EBITDA for the quarters is 5.66 crores versus 4.36 crores in quarter 2 of FY26, making it to 29.8% year-on-year growth. Operational EBITDA margin is slightly decreased to 16.6% compared to 17% last year. The slight drop in percentage EBITDA is mainly due to increase in raw material costs by 2.8% due to geopolitical issues. As well as we had a couple of good events where we have spent some money, that is Semicon, India, Dance Rail, and so many things. So, these also added some expenses, so hence that small gap. Profit after tax came in at 4.45 crores as compared to 3.15 crore reported in quarter to FY26. A 41.2% year-on-year increase. The CAT margin improved from 11.97% in Q2 F826 to 12.5% reflecting F53 BPS. Therefore, Q2 stood at 56 paisa compared to 47 in Q2 F826. Now, going to half-yearly performance, on the standalone basis, revenue from operations stood at 61.14 crore compared to 46.66 crores in H1 F826, making a 31.1% sequential year-on-year growth. Adjusted operational EBITDA for H1 is at 36 crores versus 7.25 crores in H1 FOA 2016, making it to 42.8% year-on-year growth. Adjusted operational EBITDA margin stood at 16.9% versus 15.5% last year.

I'm sorry sir, you were sounding muffled. Sorry to interrupt sir. You were sounding a little muffled. Can you just repeat the last line again?

Okay. So, adjusted operational EBITDA margins stood at 16.9% versus 15.5% last year irrespective of cost increase as compared to the other prices. EBITDA margins improved by 140 BPS over last year level. Profit after tax came at 7.59 crore, compared to 14 crore, reported in H1 F526, making it 55.2% year-on-year increase. Liquidity remains – sorry, I may – after backlog has improved 38.9 crores from 31st March 26, closing at 17.4 crores, this increase is giving us confidence for our future quarters. So, liquidity remains comfortable, and our balance continues to be strengthened. Looking ahead, we continue to see a strong demand momentum across industrial power and infrastructure segments and expected to maintain a healthy growth and profitability trajectory. Now, I would like also to take you through a few important business updates. As we already said about our Odisha plant, the upcoming facility in Odisha, just to repeat for the new people who have joined, the project will be executed in two phases Where phase 1 consists of epitaxy and packaging, and phase 2 is the fabrication. As you all know, clean room construction, infrastructure for sourcing the power supply through 33 kV line has already been completed quarter 1 this year. Furthermore, this year, in quarter, this quarter, we have completed the erection and installation of state-of-the-art silicon carbide epitaxial wafer manufacturing reactors at our facility. This development marks a significant milestone in the company's plan to establish India's first vertically integrated SIC semiconductor in Vodaf, strengthening its commitment to developing advanced semiconductor development in September. Our facility is expected to commence commercial production of statutory and regulatory form. As mentioned, the equipment required for SIC epitaxial wafer manufacturing process has been installed. The connection, utilities, and other infrastructure elements represents an important step towards operationalizing the facility, Our focus on new product development in the existing business for railways and power sector will continue to sustain the current growth trajectory. As I said earlier, the problem is now shifted from the market, the manufacturing, and because the order backlog has increased almost double, So, to ensure on-time delivery without compromising the quality, continuous improvement in plan by identifying the bottlenecks in the operations is being done. Further, the dividend approved by the shareholders in the preceding annual general meeting have been processed and paid to all the shareholders on the record date for your patients listening, and to Abhishek.

Thank you very much. Yes, Abhishek.

Yeah, so thank you, Mr. Ramesh Kumar, for sharing the summary of our quarterly results and updates and other operational and development matters. I would now like to hand over the call to Dr. Harshad Mehta, our non-executive chairman, for his comments on the results. Over to you, sir, for your comments.

Thank you, Bishik. Welcome, everyone. Good evening, even though for me it's a good morning, but I'm glad to see many people participating, and we are excited to share the growth, the continuous growth that RIR has been achieving, And we expect this pandemic, with revenue from operations growing year on year, 43.98 crore, and rising it to 41.2. Financial performance, the installation of silicon carbide EPI, which is one of my favorite topics for the last five years. I'm really glad to see it coming up. Odisha's facility makes an important step towards advancing India's semiconductor ecosystem capabilities initiative as well as self-reliance India initiative. The silicon carbide EPI reactor only right now is present capability in India, and we already have inquiries from not only international, but also national labs as well as defense and other applications that we are looking at trying to help EPI. Our focus on serving railways, getting a lot more issues, and we had, without realizing it for data centers, but in our technology development, we worked on the thermal management advancement way back in about 20 years ago, and those are very useful as we go forward. Commitment to building Indian solution capabilities in strategically important industries continues to be my focus. Government's continued support and enabling policy environment are further encouraging progress in this area. With comfortable liquidity, strengthening balance sheet, we remain focused on developing new products and creating sustainable long-term values for our shareholders, our employees, as well as the nation. Over to you, Abhishek.

Abhishek, you are on mute.

Yes, sorry.

Yes, yes, sorry. I was on mute. Thank you, Dr. Mehta. We will now be happy to answer any of your questions and hear your perspectives. Over to you so that we can open the floor for any questions that we have.

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 touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We'll take our first question from the line of judges Malu from Genuity Capital. Please go ahead.

Hi, sir. Thanks a lot for the opportunity. Just one quick question. Actually, the sound was not clear at that time. So, till when will the epitaxy plan be operational? And if you can give the timelines.

So, from our side, almost everything is done. We are only doing internal testing of our reactors. We are waiting for certain clearances from the government of Odisha. The building clearance and the fire clearance, these things are in process. So, as soon as it comes, then we can start. So, there is no timeline. It all depends on the government's, you know, clearances as early as possible.

So, look, because I was seeing our balance sheet, so I think, I guess PPE was flat and CWI was increased, right? So, just asking on that thing. So, can we expect that from next quarter it will be operational?

Yeah, we certainly hope so. In semiconductors, they need to, I think, get their actions in place.

Okay. And, sir, on the consolidated level, how much are we expecting, like, in revenue and EBITDA dumps in FY24?

For Odisha plant, you are talking or overall?

From Odisha and overall?

No, we don't give the forward-looking statements, but if you see our first and second quarter growths or the numbers what we have delivered, But definitely, we are not looking at going back or tracking back. I am sure we will be doing better than what it is now, or maybe equal.

Okay, okay. Thanks a lot, and all of us.

Thank you. Before we take the next question, we would like to remind participants, to ask a question, please press star and one on your phone now. Next question is from the line of Pratik Giri from ShubLab Research. Please go ahead.

Hi, greetings. Thank you for the opportunity, and I hope I'm audible. Ramesh ji, I think probably your magic is there in the P&L. I think after a long time, we are hitting 34 crore revenue on a quarterly basis. Yes. I just wanted to, you know, get some understanding that should we take this as a base case quarterly run rate and there should be improvement on top of it from here on or you think something has worked one time for us in this quarter?

Thank you, sir. We are almost close to 30 crores. I have also mentioned in my remarks that the otter backlog is at 39 crores. There is a scope to increase this base, but at the same time, as I said, now we have shifted our problem from market to the plant. So, we are working at the back end to, you know, increase our productivity and also that we remain, keep growing over this numbers what we are going to create this year of every quarter and quarter.

Got it. So, it's safe to assume that this is going to be the base case, probably base quarter from here on.

Yeah, yeah, it should be.

Got it. No, no, that is the end.

Certainly. No, certainly, Mr. Martin. Certainly. Certainly. Yeah. This quarter or last quarter, we haven't seen any one-time revenue. These are constantly operating routine revenue that we expect as we go forward.

Yes, yes, yes, Mr. Mathur. That's why I said probably Ramir G is magic in the P&L. And in fact, congratulations to the team. Just one thing, Ramir G, I think order book is not published in the present media release, or I might be missing it. If you can do that also in the media release, that will be very helpful.

Yeah, maybe next time onwards we will do it because I don't think we have been doing it so far. So, definitely we will take your advice and the next time onwards we will keep it. That's the reason I have deliberately kept it in this meeting so that people will understand better.

Got it. Got it. My second question is, Rameji, that a protection process, I understand, probably we are very close to the completion. Now, this phase one has probably two parts, phase one A and phase one B. The second one is packaging. I just wanted to understand, you know, what are the steps we have taken for that phase to probably start, you know, seeing some shape? Or are we yet to do the basic groundwork for packaging also?

No, for the, see, as far as place is concerned, it is readily available. Now, only the financial part which we have, we are in, you know, why I call it as a decision, but it is almost true. We are at the, you know, closing stage from the bank for the term loan for packaging, and once that is done, we are ready with the equipment and the supplier, everything. So, the work will start and complete maybe in 9 to 12 months time. The base work is done. So, it's just waiting for the finance from the bank.

Got it. Got it. Because, Rameji, one thing we have realized that, you know, dealing with state governments brings a lot of delays in the system. So, that is why I was asking. In fact, I had one follow-up also that if we try to understand for our fabrication unit also, Because I'm sure then fabrication will be put, there will be certainly some other sort of delays, which probably we might encounter. So it will be an impact, Mr. Mehta can also chip in, you know, in this. If we can proactively start this, probably as soon as possible, because as a shareholder, probably it's already more than two years, and I understand things are not in our hands. But if proactively we can do something for the next phase to cut down the delays, that will save us a lot of pain, Mr. Mehta.

I will just give you a update because, you see, this is for the Varisa government also. They have made the building, this flatted building, what they have leaped to us for the epitaxial reactor As well as for the packaging. So, initial problems, we are also learning. So, based on our request, they are also learning. So, I am sure once the building approval comes, then packaging, there is no special approval is required. It is only expansion approval that will happen easily. Absolutely. As far as your admin, with respect to fabrication, it's going to be a greenfield project. So once a greenfield project, these things will be taken care right from the one. So if the building is made and then thereafter the layout, these things will not be there because, you know, the first layout will be made and the building will be made. So the process will happen until the government will not be there. For this application plan, because we have to do it from the green-tree project. It is treated as a green-tree project.

And, basically, on my side, at least, we have been doing proactively on the second half of phase one on the packaging, and we have been working on it in terms of trying to identify the right participant, right technology partner, right product mix, because the product may keep on changing in terms of the margins, specifically from China. We want to make sure that we stay ahead and make sure we pick the product that, you know, creates value, which is our base business model. So we are ready with everything. We have the agreement, draft agreement, but it's not many waiting for the bank's approval, which will happen. And I think Odisha now, after the first sense of the money coming in, the facility and the agreements in terms of tri-party, I feel that we should not see any more delays. And the only reason that we are, is we want to make sure that we make investment quickly and do like what I learned by mistake. Like, we invested $2 million in EPI in 2021, and now we are going to monetize. None from mistake, but at the same time, I don't want to be proactive. So we keep everything ready, and then we start to move forward once we get comfortable that, okay, now is the time. We don't expect any issue.

Got it. Got it. No, Mr. Mehta, in fact, we have been seeing you, you know, working hard for the past two years, and probably this is the first project in Odisha which has seen the day of the light. So, congratulations for that, Mr. Mehta. My last question before I join the few back is on bank funding. So, I understand earlier we wanted to have an equity mix also in this, but good that probably debt can also be available. But Mr. Mehta, given the current, you know, company's size and strength, will it be a mortgage-backed or an asset-backed loan? If that is the case, then what is it that bank will probably identify as an asset to be mortgage-backed against that loan? And why is it taking so much time for them to, you know, give us the approval, given that we are government-approved and probably government-funded also to an extent?

I think I would have Ankit answered the detailed question, but I would summarize it in terms of what I get, meaning I inquire with Ankit and Rameshri almost every week, sometimes at the middle of the night, what's the bank status. And we hear, for the last two months, we have got all the approvals, and now everything is in paperwork time. So I'm in the U.S., for me, it's very sometimes disappointing, but I said, okay, when in Rome, act like Romans. So we are in India, we act with the Indian system. But Ankit, can you please give the details?

Sure. Thank you for your question. So, basically, this loan would be backed by certain immobile properties and some FDs which would act as collateral and security for the loan, and these properties belong to the promoters. Secondly, on the loan approval part, we had a call today morning with the bank authorities, bank officers, and they have informed us that they have obtained all the internal approvals, and it is just a matter of time that they issue a formal sanction letter to us. So, that is what the current status for the loan is. Now, considering the size of the company, etc., on the question of the size of the company vis-a-vis the size of the loan, we feel comfortable even having this size of loan because we have a 5% interest subsidy from the government, which would make this loan very cheap for the organization. And therefore, if we currently see, right, that we have already raised equity and there is equal participation from the government, and having a certain portion of debt would definitely help us have an operating leverage on this. And that is the only reason why we have considered debt also to be a part of the portion which will act as a funding source, because this particular 5% interest subsidy will not add into the opinion that much, and it will help us build this phase 1B very fast.

Got it. So, just one follow-up. So, there will be some equity portion also, apart from this debt. Or we are still contemplating about it?

No, for 1B, we will not be having any more equity participation. It would be just of your... At this point. At this point. Because 1A, we have already done entire equity contribution, no debt. And 1B, we are looking at debt contribution.

Got it. Got it. Now, this is helpful. I am joining the feedback. Thanks a lot, Ramiji. Thank you.

Thank you. Next question is from the line of Somnath Paul from Relay Investments. Please go ahead.

Good afternoon and good morning, sir. Sorry, I have not been an old follower of the company. I am trying to understand the company better. So my question is more on a broader level. So I think the last couple of years, the challenges were maybe a dedicated CFO or CEO and, you know, the UISA government power line issues. So I think more or less that being sorted. So if you look at a broader trajectory for the next two, three years, how do you think that, you know, or when can be a period when you think we can go all guns blazing in the sense that Semicon is picking up very well. And now that we have all things in place, so can you just give a broader outline of how you think span up and we move from this current level to a different level with our leadership in technology?

So I think we have been... So we have been...

Yeah, go ahead, go ahead. Please, sir, go ahead. Hasha, sir, please go ahead. Okay, okay.

So, we have been, sometimes we have been ready with the technology and the product or the market is not ready. But this time what we have seen, and it's like nothing happens at the, you know, like a straight line improvement with, you know, horizontal line and then you see a vertical line immediately. Absolutely. This is, if you can see the first two quarters, you can see the trend, and you can see that we are building the stability, we are building the infrastructure, Ramesh Kumar has done a lot in terms of efficiency improvement, as well as Ankit has been putting his experience in this situation as well. We may still require some people on the technology side because of the fact that right now government of India in the policy of making India, self-reliance India, looking for great kinds of things that India has never done. We have done it in the U.S., but we need to have a couple of good people from that perspective, and we already have identified them. They are in India. They work for multinationals outside, you know, and so forth. So I do see that I have never seen, I mean, sometimes except for retail or something in the industry, technology-wise, we are ready. The steps they usually go through in terms of becoming it a product, it goes to reliability as well as statistical failure analysis and so forth because the product goes into railways, defense, and quite high value for defense. We have fulfilled demonstrations and test demonstrations for an electromagnetic aircraft launcher. We expect to be out any time, and in this situation, this is like becoming an industrial electronics. But the beginning, from concept to technology demonstration, which is one of the very difficult parts that we have done, Now, from technology demonstration to get the product and go to reliability that we can do a lot on paper, but it has to be proven in the field. And that's the point we are at.

Right. I think so. But broadly, sir, how or when, in which FI do you think your vision probably comes to realization and the money flows into the company and the shareholders and the promoter as well?

I mean, as soon as we start silicon carbide as a product, which will happen in the next three months maximum, we will start revenue. So we have revenue started coming, not wait until the end of the project is done, until we see the revenue. We would see revenue in three phases or three steps. One, once the AT is ready as a product, that would happen, as I mentioned, in three months or so. The next one would be, as Ramesh Kumar said, eight to nine months for the packaging. That's the second source of revenue. And the final source of revenue would be the FAB. Once the FAB is built here, but at the same time, we are not delaying it because we have the IP and we are having the contract out and we'll generate revenue from that as well.

Right, sir. And just my final question. Sir, it is a bit surprising that if we understand it in USD terms, and correct me if I'm wrong, the current order book is close to 4 million USD, wherein, I think, in your earlier calls, you yourself have mentioned, you know, probably the entire space to be, or the inputs, maybe, you know, more than, more than maybe, say, you know, maybe close to around 100 million dollars or so. So, sir, what do you think are the current challenges on that particular part which you think might be rectified going forward?

So, the market exists. What it says is there's a market. We wanted to develop the market in the product that we are working on. Our challenges are obviously demonstrating the product, demonstrating being competitive with global partners, and what is helping us as a tail end is the government's mission to make in India or at least have 60% component made in India and so forth, which is coming, but coming slowly. You know, I think it's a – but that could help definitely at the same time in parallel, having product, demonstration product, prototype product, and demonstrate reliability, which we are very sure of with our technology. But that has to be demonstrated.

Right. So thank you for your reply, and I'll fall back in queue for further questions. Thank you.

Of course. You're welcome.

Thank you. We'll take our next question from the line of Kesha from Niveshai. Please go ahead.

Yeah, thanks for the opportunity. So, I just wanted to ask, like, I think the, I mean, the reactors are already installed. So, how many units can we process through that reactor? I mean, earlier I think we were planning for over 5,000 acres per month, correctly if I'm wrong about the numbers, and initially, how much we are planning to produce in a month, and also, if you can, let us know about the realization for the acres. Based on the current market rate, that would be really helpful. Ankit, you want to answer that question, numbers and value?

Can you just repeat the question?

Kishore, can you use your handset mode, please? Yeah, I'm audible now.

Little better, please go ahead.

Yeah, I just wanted to know about the capacity of the wafers that we can manufacture through that unit. I mean, earlier, I have, I don't know, I'm able to resemble that, correct or not, but it was 4-5,000 wafer per month. So, like, after three months, following the waves, I mean, when the plants will get commissioned, how much wafers are we planning to produce in a month, and also, the realization of the wafer, I mean, the wafer realization, if you can tell the number.

To answer your question, what we are expecting in the next four to six months is a revenue of around 12 to 15 crores from epitaxy process. I do not have the exact breakdown as to what would be a poor way for realization because it would depend on various specifications and thickness, the pricing would differ, and therefore having an average price for that would be difficult, but what we have estimated for various thicknesses, etc., we estimate the revenue of around 12 to 15 crores for The next four to six months for this balance period of the financial year.

Okay. Just to add on to what Ankiti said is that the productivity numbers will differ depending on what is the coating. Say, for example, we do it based on certain microns. Say, for example, if I have to do coating of 30 microns, then it will deliver how many vapors per month. So, that is how we work, but not necessarily that every wafer will be coated at 30 microns because the voltage, the thickness is decided by the voltage. So, it will vary. Exact number will be very, very difficult to tell that, you know, so many wafer will be produced, and by wafer, this will be the cost.

Got it. So, let me take this. There will be little number that... Sorry?

Yeah, go ahead.

Yeah, just 20 to 15 crores number that we are planning to have in four to six months. So, is our customer already started? Like, do we have the demand for the basis so that we are projecting the revenue to become, if you can tell on that side as well?

The customers as well as we are pushing for domestic customers, specs for what they want. We also have a letter of intent, and so at this point, we have about 90% in terms of what our capacity is, has been letter of intent, but obviously letter of intent, it depends on time, and it's what it says, letter of intent, that we have customers interested, we need to have product which is competitive, and so forth. We do expect that we are very conservative at this point in terms of installing two reactors. We may very well need about five reactors very soon, but we are waiting, not taking that step right away. But we are making sure that we grow, not rather than have the reactor idle and not work on full 100% efficiency.

Okay. Absolutely, I didn't have got my answers. Thank you so much.

Thank you. We'll take our next question from the line of Saurabh Jain from SQL Investment. Please go ahead. Saurabh, your line is unmuted. Yeah, please go ahead with your question. No, your audio is not clear. Please use your handset. Your volume is very low, Saurabh.

One second. Am I audible now?

Yes, please go ahead.

So, I just want to know, sir, what is your current capacity and capacity utilization and current order book as of 30th September? On the existing product you are talking about? Capacity and capacity utilization.

There are three product verticals which we operate on the existing product. One is HPG low-power devices, and the second one is the high-power devices, and third one is the equipment. So when it comes to high-power devices, the entire process happens, right, from the way for a new diffusion to combating lithography, fabricating, and then making as a, you know. So, there we have a good capacity, and we are also adding some of the bottleneck operations we have identified, and we are investing some money to increase the capacity. So, if you ask me presently, certain bottleneck operations have maybe reached to 90%, but we can double those by adding machines. So, the capacity can double there. The rest of the two products, there is no capacity issue because it is more to do with the assembly. So, I need to put more assembly benches in the people, keep on adding the people, that is in LPD as well as in equipment. So, it is more to do with the assembly. There is no actual production kind of a thing. So, it's a component assembly in LPD, in the equipment, there are various, you know, products being... Sorry, we are not very clear.

Saurabh, your audio is not clear.

No. No. Yeah, yeah. Can you speak a little loudly?

Current order book, sir.

I told you that order backlog at the end of quarter 2 is almost 39 crores.

And particular revenue guidance for FY27 and FY28?

FY20?

7 and FY28.

Some existing or new, what is that you are asking?

Including what?

We don't give any forward-looking statements, right?

Thank you.

Thank you so much.

Thank you.

Next question is from the line of Vijendra, an individual investor. Please go ahead.

Yeah. Good evening. Am I audible?

Yeah.

Yes.

Yeah. Very good evening, sir, and happy to see the result. Sir, just one query I have. Recently, Ministry of Power and Ministry of Electronics have raised a request for indigenous development of VSC-HVDC systems. So, is there any way we can be part of that value chain? Are we planning to do anything like that?

We already are participating, and so far we have submitted our interest, and then in about a month's time, we would submit our plan. That is what government of, I mean, ministry and the power ministry, they both are looking for in terms of how we would address the development plan is what government is thinking about or government is planning to. So we are very much part of it, and that is, you know, one of the things, at least from experience perspective, with my experience, with my U.S. company experience in high voltage D.C., If I acquired it from GE and so forth, we would see, I am quite sure we would see some roles.

Just to add on to what Mr. Hashanah is saying is that if you see all other participants, whoever it is going to come, they don't have anything with the silicon carbide in India. So, they have to start from the scratch, whereas RIR, we are already there as far as EPI is concerned. And then they have given sample supply for sample supply 18 months and for product supply 36 months. So, in 18 months, we will be ready with our packaging. So, we already have a tire for a fabrication. So, we can send our AP wafers, get it fabricated, and package it in India, and supply to this tender, if we win the tender. So, I feel we are much better positioned than anybody else, because all others have to start, because the government is saying 100% indigenous. Yes. So, if it has a percent, yes, then we will have to start from scratch, whereas we have already crossed many bridges for this activity. Yeah.

Good to hear that, sir. And just one more thing, sir. The silicon carbide factory, which the process, which is going to happen in Bhurneshwar, are we planning any men's production till this quarter? And when this, how the utilization will be there, means the capacity, how much we are going to utilize by this remaining quarters for this year?

Maybe you are joining a little later, because as we said, we are all set to go for a production. So the production starts once the clearances from the government, the statutory clearances comes. We are hoping that if not in November, definitely in December, we will start the commercial production of AP wafer. And that is what Ankitsha said that we are estimating, what is that we are estimating this year revenue from this particular activity.

Okay. Thank you so much for answering. Thank you so much.

You're quite welcome.

Next question is from the line of Somnath Paul from Relay Investments. Please go ahead.

Thank you for taking my question again. So, I would just like to understand more on a broader level, given the fact that Semicon in India is catching up, and then there are many, many big players, repeated players with foreign tie-up, putting up massive amount of money in developing their plans, and a couple of them have already just started or about to start. So, how do you think we, being the smaller part of maybe the broader value chain, are we faced in terms of competition because I think Semicon is all about scale? So, first is that, and second, sir, is that on the railway defense and a few trial export orders which we have received and which we have delivered over the last one and a half years. So, have you seen some customers coming back for some increased quantity or maybe more advanced versions of the products that we have sent in the sense of a trial order?

I think if you look at it, if you look at the value chain, the value chain, we are the highest value chain and the only company in India providing value chain starting from silicon or silicon carbide material all the way to systems, which is vertically integrated systems, includes pieces like EPI, includes pieces like device fabrication, Includes packaging, includes modules, and includes systems. So when you look at, when you talk about the big guys, and they are absolutely big, putting in a lot of money, their value chain at this time is the last 5% of the total value chain, which is the OSET packaging, outsource automation testing. They get the process very first from their customers. They would go through the automation in terms of testing and packaging.

Overall, from the value chain perspective, their value chain is a very, very small portion of the entire value chain.

In terms of magnitude of revenue is big, but the profit margins are small. We are, we always, in the very beginning, followed a market, followed a principle saying we will focus on high value, high margin, low competitive products. So the product that we make, medium and high power, there is no one in India is making it, and globally, there are about four or five competitors, ABB, Siemens, Hitachi, Toshiba, and so forth. And it's not growing, because it's not easy, technically, to develop the product overnight and gain customer acceptance from reliability perspective and so forth.

Just to add, also add on to the, you know, we are doing, we are already doing in silicon-based products, that is our HPD, where we get the wafer and do the coating and fabrication and packaging and converting that into product and converting that into system and supplying to various customers. So, which is not being done by all these biggies who have come into the picture, you know, they are all just getting the, you know, the fabricated chips and then just packaging it, testing and sending it to. And also, the voltages are different. They are into, you know, small milliamp kind of activity, which they do, whereas we are into high-power devices. Our silicon base itself, we produce up to 9,000 volts, 6,000 amps, which is very, very high, you know. And now we are thinking of, we are doing it for HVDC, silicon-based 5KB for U.S. customers. And with respect to railways, we are continuously supplying whatever has been existing products, and we are continuously developing new products as and when railways changes their specifications, RDSO. So, based on, they are also improving their train sets, like, you know, from now, all the kinds of trains are going to be, one day, Bharat, of course, the demand will continue because, I think locomotives are going to continue because of the freight, you know, freight corridors, which demand in very ways also. I answered your question.

Yes, sir. On the second question, on the repeat orders or increased demand from the dispatches which we did over the last one and a half years, I also asked that.

So, defense, we are yet to start, but always we are getting repeat orders. That is why if you see our railway business this year, I am able to see at least 70% to 80% growth over last year quantity, last year value. Not only with the new products, it's the existing products itself. Whereas, you know, defense, we have given our proof to the testing, everything has been done, the repeat orders, the first trial orders, we are anticipating any time. So, we are waiting for the trial orders. So, as far as the introduced export is concerned, the first order which they have given, We have almost about 70% executed. Once we complete, they will also test it at U.S. market, and then they will keep repeating those orders.

Sir, sorry, I would just maybe ask one more point on the first answer which you had given. So, can we safely say all these big companies that we are talking about, in case if they decide to come into your value chain, so they have no, I mean, they cannot just buy the technology, right? So, I think either they have to acquire a company or maybe collaborate with a company of yours, because I was thinking from that perspective.

Yes, yes. They had to start from the scratch, actually.

Either they buy out or maybe they collaborate with a company like you. That would be fair understanding?

Yeah, yeah. In India, there is no one who has the capability of doing it. And setting up the capability in India itself is a barrier to entry, specifically for medium and high-power devices. And so from that perspective, you know, we feel that we are uniquely in a leading position. What we need to do is now, and this is where we are trying to do as much as we can, is modernize our facility as well as automate as best as we can And so that we are not, you know, we are not being challenged by any newcomer that we don't really see any at this point, but we don't face any newcomer with, you know, tons of money.

Yeah, because the point was on the money part, that there's a lot of money going around. So, you know, it is not, it is not just the money can, you know, put up a facility and get it done maybe in six months.

Money cannot buy it, absolutely.

Yeah, that's right. Right, sir. Thank you. Thank you for the reply. Thank you.

Thank you. We'll take our last question from the line of Ashish Soni from MS Capital. Please go ahead.

Sir, with all this commentary, do you think SY29 will be inflection point for you in terms of revenue scale-up? Because railways right now is picking up. You spoke about defense trial orders coming in, And then all this packaging also, it will come next year sort of thing. So do you think FY29 is an inspection point from your perspective and growth can come from which verticals? If you can highlight that.

I think growth should come from all verticals because we are not leaving anything. And if you see the existing performance is from the existing customers and existing products. Very few new products also we have added. There is no doubt on the new product for various applications, but, you know, what I'm saying is we have to be optimistic. We are always optimistic. We feel that, you know, we will be doing much better than what we are doing this year with all this new development as well as silicon carbide coming in, giving us some revenue. I think we are very optimistic that we can do much, much better than what we are doing.

My question is only inflection point, because a lot of whatever work you are doing, I think the fruits can come from F829, majorly is what I anticipate, so that's the question I understand.

I certainly feel the grid, HVDC grid, railways, and defense. Defense doesn't have a lot of volume sometimes, because we are in a very high-power, specialized niche. With the choice, we decided the sectors that we would serve, which are very heavily infrastructure that we are focusing our product, I see a tremendous amount of investment coming from the government of India in the next five years.

Okay. Thanks and all the best for the future.

So whether the inception point comes, I think in this situation, because of the fact that we are not dealing with consumer application, you're not going to see like tremendous growth from 0 to 80 percent or 90 percent, but you would see a ramp with a little bit higher angle as you go forward.

And one of the participants spoke about $100 million. So is that our revenue aspiration or the target market? I just didn't understand that. Can you throw some light on that as well?

As I said, I'm going to stay quiet because I don't know the Indian regulation. I don't know if I can handle that question.

No, see, aspirations are there because, you know, the tenders, which, you know, it will be even much, much more. So, see, our aim is because once we, after FY29 or 30, once we are complete the Odisha project, then the numbers will be totally different. So, that is where I think he was mentioning that once that comes into the play for completely total, then these numbers can be achieved.

So, that's a revenue number, not a target market, right? That's the correct assumption.

Yeah.

That's the revenue number. Thanks and all the rest for the future, sir.

Thank you. Ladies and gentlemen, that was the last question for today. I now hand over the call to Musabi Sheikh Saavan for closing comments. Over to you.

Thank you. Thank you to everyone who joined us today and participated in the discussion. We appreciate your questions and continued interest in our IR power electrons. As always, we remain committed to transparent communication and delivering long-term value to all our stakeholders. In closing, on behalf of the Board of Directors and Management, we thank you all for your participation in this call. We remain focused on operational excellence, financial prudence, and long-term value creation. Should you have any queries, please feel free to reach out to us. We look forward to engaging with you again in our future updates. Have a great evening and stay safe. Thank you.

Thank you.

Thank you, everyone.

On behalf of Veritas Reputation, that concludes this conference. Thank you all for joining us today. You may now disconnect your lines.

Thank you.