Steamhouse India Limited (STEAMHOUSE) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the Q1FI27 Earnings Conference Call of Steamhouse India Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded.

I now hand the conference over to Mr. Amit Sharma from AdFactors PR.

Thank you, and over to you, sir.

Thank you, Nirav. Good morning, everyone. Welcome to the Q1 FY27 Earnings Conference Call of Steam House, India Limited. Today, from the management side, we have with us Mr. Vishal S. Budhia, Chairman and Messaging Director, Mr. Vavav Gattani, Chief Financial Officer of Steam House. Also, we have the ad factors, IRT. We will begin the call with the opening remarks from the management, after which we shall open the forum for the Q&A session. Kindly note that the company is presently in the silent period pending the announcement of its financial results for the quarter ended September 30, 2026. Next, this call would not discuss any unpublished financial or operational information or any other unpublished price-sensitive information. The discussion shall be limited to the information that is already in the public domain or has been previously discussed in accordance with the applicable laws and regulations. I must remind you that this conference may include forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the management as on the date of this call. These statements are not a guarantee of future performance and involve risks and uncertainties that are difficult to predict. I now ask the conference to Mr. Vishal S. Budhya for his opening remarks. Thank you, and over to you, sir.

Thank you, Amitji. Good morning, everyone, and thank you for joining us. It is my pleasure to welcome all our investors, analysts, and stakeholders to Steamhouse India Limited, Maiden Investor Call. I'm Vishal S. Budya, promoter, chairman, and managing director of Steamhouse India Limited. On behalf of the entire management, I would like to thank you for your continued trust and support, particularly as we begin our journey as a listed company. Before discussing our financial performance for the quarter, I would like to briefly introduce our business, our operating model, and the long-term opportunity we see ahead. Steamhouse pioneered the community boiler system in India, which sells steam and nitrogen to industries like chemicals, pharmaceuticals, textiles, plywood, food processing, tire industries, etc. These industries need steam for their sheeting and processing requirements and have their own boilers for generating steam for their requirements. These industries have had to invest in their own captive boilers, along with the associated land, fuel handling system, water treatment facilities, pollution control equipment, manpower and maintenance, and all of these were mostly inefficient. By outsourcing their steam requirements to Steamhouse, these industries can now focus on their core manufacturing activities, operations, while we provide a reliable, efficient and scalable steam solution. We believe our steam-as-a-service model represents a structural shift from traditional captive boiler ownership to outsource steam solutions by aggregating demand through centralized facilities. We provide customers with greater efficiency, reliability, and cost optimization while creating a scalable business model for Steamhouse. Today, our business operates through three verticals, generation and distribution of steam, purchase and distribution of steam, generation and distribution of nitrogen. Our business model creates value through scale. By serving multiple customers from a centralized facility, we operate larger and more efficient boilers, optimize fuel consumption, improve capital and capacity utilization, and spread infrastructure costs across a wider customer base. As highlighted in our investor presentation, community boilers can achieve thermal efficiency of 75% to 83% compared with around 50% to 65% for the conventional captive boilers. Our USP is our knowledge of steam distribution for kilometers. We have established more than 60 kilometers of steam pipeline infrastructure across industrial clusters in Kuchrat, enabling us to deliver steam directly to the customers with minimal pressure loss while monitoring consumption in real time. Our customer relationships are long-standing and sticky. Approximately 90.7% of our FY26 revenue came from repeat customers, and we currently serve 21 customers with multiple operating units connected to our network. Most of our customers are covered by steam supply agreements comprising fixed and variable components. With the variable component linked to the coal price, this contractual structure enables us to pass through changes in fuel cost. In addition, newer contracts increasingly incorporate minimum guaranteed off-take commitments, providing better revenue, visibility, and facilitating the capacity planning. When evaluating new projects, we focus on customer tie-ups, contracted demand, and achievable utilization levels. As utilization improves, incremental steam volumes contribute meaningfully to the profitability because a significant portion of our infrastructure and operating costs are already in place. This creates operating leverage and supports margin expansion as the business scales. Looking ahead, expansion remains one of our key priorities. Expansion remains a key growth driver for this team house. We currently have four projects under execution at Jagadia, BAPI, Nandesari, and AMC, Andhavad Mineral Corporation, Tirana, along with three projects planned through IPO proceeds at Ankhleswar, Panuli, and Dehej. Beyond Gujarat, we are also expanding our footprint with a planned project at Tarapuru. These initiatives expected to increase our steam distribution capacity from 345 tons per hour currently to approximately 705 tons per hour capacity, providing a strong foundation for long-term growth. The long-term opportunity remains significant. Steam is a critical input across a wide range of industries, including pharmaceuticals, chemical, textile, food processing, paper, pulp, and tires, supporting essential processes such as heating, drying, sterilization, and distillation. As industries continue to focus on operational efficiency and sustainability, we believe the centralized community boiler model remains significantly under-dependent, providing a substantial runway for the future growth. An important milestone in our expansion beyond Gujarat is our entry into Himachal Pradesh. We have been awarded the EPC mandate for setting up a 300-tons-per-community-boiler facility at the Bulgdrug Park, UNA, with a project value of approximately 311 crores, inclusive of GST. The project will also include long-term operations and maintenance. Importantly, the project is structured as an asset-light opportunity with the project costs funded by Himachal Pradesh Bulgdrug Park Infrastructure Limited. This allows us to bring our proven community boiler expertise to the new markets while maintaining our focus on operational excellence and sustainable growth. Additionally, the Government of Gujarat's supportive policy framework, backed by capital subsidies for eligible projects, provides a strong tailwind for our long-term expansion plans and helps us expand our footprint across Gujarat. Alongside steam, we are also building a second growth vertical through industrial gases. We have commenced nitrogen generation and pipeline distribution at Anklashur through a PSA plant, through a PSA-based plant with a capacity of 350 nmq per hour, leveraging our existing industrial customer relationship and pipeline infrastructure. We intend to gradually scale this business by adding new nitrogen and while commercially viable expanding into industrial gases such as hydrogen and oxygen. This creates opportunities to deepen customer relationships, cross-sell additional products, and diversify our revenue streams over the long term. We are also actively diversifying our fuel mix by increasing the use of waste-to-energy solutions, wherever commercially viable. Our experience at BAPI, along with projects under development, reflects our commitment to combining operational efficiency while sustainable energy solutions. Let me now briefly discuss our financial performance. Q1 FY27 was a strong quarter for a steam house despite a challenging microeconomic environment marked by geopolitical uncertainty and subdued industrial activity across certain sectors. During the quarter, we recorded steam sales of 305816 tons, representing year-on-year growth of 16.7%. The revenue from operations increased by 13.35% to 1286.21 million Indian rupees. EBITDA grew by 60.08% to 309.32 million Indian rupees, with EBITDA margins expanding to 24.05%. Profit after tax increased by 80.25%, 80.25% to 183.42 million. This performance was driven by higher steam volumes, improved capacity utilization, and the operating leverage inherent in our business model. Despite external headwinds, we continue to execute well, reflecting the resilience of our customer relationship and strength of our operating platform. As we look ahead, our priorities remain clear. We will continue to expand capacity prudently, improve utilization across our network, execute projects on schedules, strengthen our presence in new geographies, scale our industrial gases business, and pursue sustainable energy solutions through greater adoption of waste-to-energy technologies. To conclude, I would like to leave you with the four key messages. First, our centralized team distribution model provides customers with reliable, efficient, and cost-effective alternatives to captive boilers. Second, our significant capacity expansion pipeline together with our entry into new geographies positions as well for long-term growth. Third, we are creating additional growth avenues through industrial gases and sustainable energy solutions while maintaining discipline, capital allocation, and operational excellence. Fourth and most important, we continuously explore and invest in emerging technologies to strengthen our capabilities, enhance operational efficiencies, and remain in the forefront of industrial steam and energy solutions. Our objective is to build Steamhouse into India's leading provider of centralized industrial steam and pipeline-based industrial gas solutions, while helping industries reduce emissions, improve energy efficiency, and lower their overall operating costs. I would once again like to thank our investors, customers, employees, lenders, business partners, and all our stakeholders for their continued confidence and support. With that, I now invite our Chief Financial Officer, Mr. Vaibhav Gattani, to take you through the financial performance for the quarter. Thank you.

Good morning, everyone. I am Vabhav Gattani, CFO of Steamhouse India Limited. I will take you through the financial performance of Steamhouse India Limited with a focus on the key operating and financial numbers for Quarter 1 FI27 and the progress we are making on profitability, utilization, and capital allocation. Let me begin with the operating performance. Quarter 1 F527 was a strong quarter for Steam of India Limited, with Steam volumes reaching a record quarterly level of approximately 3,05,816 tons, representing a growth of 16.70% year-on-year and 11.52% sequentially. The growth in volumes reflect the improving demand environment across our customer base and better utilization of our installed capacity. Our revenue from operations for the quarter stood at Rs. 128.62 crores compared with Rs. 113.47 crores in quarter 1 FY26, representing a growth of 13.35%. Importantly, the quality of revenue has improved significantly. The revenue from scheme increased by 46.07% year-on-year to Rs. 123.37 crores from Rs. 84.46 crore in quarter 1 FY26. Coming to profitability, EBITDA for quarter 1 FY27 increased by 60.08% year-on-year to Rs. 30.93 crores from Rs. 19.32 crores. EBITDA margin expanded substantially to 24.05% compared with 17.03% in Q1 F526, an improvement of 702 basis points. One of the key indicators of this improvement is EBITDA per turn. EBITDA per turn increased by 37.17% to Rs. 1011 by 27 from Rs. 737 per turn in Q1 F526. This improvement was driven by higher steam sales, better utilization of our waste-to-energy boilers, and operating leverage from the higher-volume base. Our clean EBITDA adjusted for operating lease expenses increased at 65.43% to Rs. 29.22 crores from Rs. 17.66 crores in quarter 1 FY2026.

Sir, sorry to interrupt, we are losing your audio.

At the PAT level, PAT increased by 80.25% year-on-year to Rs.18.34 crore, compared with Rs.10.18 crore in Q1 FY2026. Pat margin also expanded to 14.26% from 8.97% and improvement of 529 basis points. Therefore, the key message from quarter one is that profitability has grown significantly faster than revenue. As volumes increase and our existing infrastructure is better utilized, we are seeing the benefit of operating leverage flow through to EBITDA and PAT. Our capacity utilization also improved meaningfully. Utilization increased to 41.40% in quarter 1 FY 2027 from 36.06% in quarter 1 FY 2026 and 38.32% in quarter 4 FY 2026. While utilization remains at a relatively low level, this also provides us with significant headroom to accommodate incremental demand from existing customers as well as new customers without requiring a proportionate increase in the existing cost base. We believe that this is an important driver of future margin expansion. As utilization improves, the fixed infrastructure costs are spread over a larger volume of steam, resulting in stronger EBITDA contribution. Another important point is our ability to protect steam margins despite movement and fuel cost. Our scheme supply agreements include mechanisms to pass through changes in coal prices, which provides protection against fuel price volatility. At the PBT level, PBT increased by 81.25% year-on-year to Rs. 21.90 crores from Rs. 12.09 crores. We expect finance costs to moderate during FY27 as we utilize the IPO proceeds to repay high-cost borrowings and optimize the overall debt profile. Let me now briefly discuss our full-year financial performance for FY2026. For FY2026, revenue from operations increased 24.4% year-on-year to Rs. 491.51 crores from Rs. 395.1 crores. EBITDA increased 20.45% to Rs.83.49 with an EBITDA margin of 16.99%. PAT increased to 38.64. ROE and ROCE for FY2026 stood at 22.36% and 16.06% respectively, reflecting the underlying capital efficiency of the business. Another important indicator is customer retention. Approximately 90.72% of FI 2026 revenue came from repeat customers. In Q1 FI 2027, the proportion increased further to approximately 99.38%. This provides a strong base of recurring business and supports visibility as we add capacity and increase utilization. Let me now touch upon the balance sheet and capital allocation. As of quarter 1 FI 2027, cross debt stood at Rs. 359.48 crores compared with Rs. 281.62 crores at the end of FI 2026. The increase was primarily due to additional borrowings for general corporate purposes which were intended to repay from IPO proceeds. Therefore, the capital allocation remains focused on two clear objectives, sending the balance sheet through debt reduction and funding capacity expansion in identified locations. As these investments become operational and utilization improves, we expect the combination of higher volumes, operating leverage, and a more optimized financing structure to support profitability and return ratios. Looking ahead, our financial priorities are straightforward. First, we want to continue growing steam volumes by improving utilization across our existing capacity. Second, we will remain disciplined in adding new capacity with the objective of matching capacity additions with the identifiable customer demand. Third, we expect the expansion from the current 345 tons per hour capacity towards approximately 705 tons per hour capacity. Together with the 300 tons per hour buldrug power project at Hula, to provide a meaningful growth opportunity over the medium term. Fourth, we are building the nitrogen business and evaluating additional industrial gas opportunities. While this is currently a smaller business, our steam operations, it provides an additional growth avenue by leveraging our existing customer relationships and pipeline infrastructure. Finally, we remain focused on improving capital efficiency, reducing financing costs, and maintaining its discipline working capital management as a business case. To summarize, quarter 1 FY2027, we delivered 16.7% growth in steam volumes, 13.35% growth in revenue, 60.08% growth in EBITDA, and 80.25% growth in BAT. EBITDA margin expanded by 702 basis points to 24.05%, while PAT margin improved by 529 basis points to 14.26%. We believe these numbers demonstrate the operating leverage available in our business. As utilization improves, with significant capacity headroom, plant expansion, strong repeat customer contribution, and the development of new verticals such as nitrogen and industrial gases, we remain focused on delivering sustainable and profitable growth. With this, now I am opening the floor to the question and answer session. Over to the moderator. Thank you.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on the touch on telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press star in one to ask the question. The first question is from the line of Sagra Tanna from Aramie Ventures. Please go ahead.

Congratulations, sir, on a successful essay.

Thank you so much.

Two questions, sir. Is there a seasonality in our business in terms of quarter Q1, Q2, Q3, Q4?

Uh, seasonality, not really in sense of consumption, uh, by production of the customers, but monsoons are generally challenging for us due to various reasons. One, the, uh, fuel that you procure is generally wet because it's a big volume. Second, at many times, industrial clusters totally go down because of flooding or such reasons. Uh, this particular year, it happened more. So that's, that's the only, uh, thing. Otherwise, more or less, because we have multiple, uh, business customers with us, uh, it's more or less,

So, sir, what explains Q1 over Q4 jump in volumes?

So, one, the chemical and pharma industries have come back on track gradually. They have been receiving more orders. So, I think this is the pre-dominant reason we would say that the demand has improved. And you would see that major business has come from the repeat customers. So, we'll appreciate the increase of demand from the customers and their improvement in business to our growth.

Got it. And, sir, as we have exited the coal trading business, will that help stabilize EBITDA margins going forward?

Yes, we feel that, we all know that coal trading was hardly any margin. It was a very low margin business, and that's the reason we stopped it. So, we feel that the margin levels can be maintained and can be even better going forward.

Got it. Thank you so much, and all the best, sir. Thank you so much, sir.

Thank you. Next question is from Lion of Sojal Jhavar, from Diamond Capital. Please go ahead.

Congress, we can start on the good side of your numbers.

Thank you so much, sir.

Yeah, so my first question would be, sir, I want to understand the part of, sir, that today, 3.45, 10 per hour is backed by 100% contract, or there are contracts that are still 3.45, 10 per hour today. And follow up to that question only, like, if you can answer me, given the contracts are long-term in nature, if somebody wants to terminate the contract in one year, can they do that or not?

Rebhaji, can you answer this, please?

Yeah, so, out of our capacity, we are almost at the 70% of the quality. Hello, am I audible? Yeah, sir, how am I audible? Yeah, so out of the 345 tons per capacity installed, we have around 70% capacity tied up for the customers. So, yeah, that's the answer to your question.

And can you answer the follow-up question like given the contracts and long-term in nature, is there any chance that someone can basically terminate before the contract?

Sir, sorry to interrupt you again, but your voice is breaking. Sir, your voice is breaking a little bit.

Allow me to manage and understand my position. Hello, am I audible now?

Yes, sir.

Yeah, so the tenor of the agreement typically ranges between 1 year to 10 years. And the agreements also have non-exit clauses built in the agreement. So the customers cannot terminate before a certain tenure gets expired. So that is one clause we have already built in the agreement. So, in most of the cases, these clauses are there. And anyways, we have seen in the past that since we are adding value to the customers by providing them ready solution at a lower generation cost, it doesn't make sense for the customer to terminate the contract and move to their in-house captive consumption.

Okay. And so, can you give me another, like, are the price which has passed on, are then monthly, or is it from the 10 years different from fast-forward the price?

So, the pass-through is predominantly monthly. There are few customers with whom we have a quarterly pass-through mechanism that was the required from their legal side, head office side. So, but then that frequency is maintained continuously, even if it is quarterly. But in most of the cases, it is monthly.

Okay. And sir, one last question. On UNA, the R-Kill or UNA will be getting from government only? And how much is the EPC profit and OEM is how much and how much is the revenue sharing?

So on the EPC front, we would be doing the project and handing over the project to government. And on the revenue sharing front, we would be sharing 9% revenue, but that cost would be recovered from the end consumer only. So, that revenue sharing which would be done with the Himachal Pradik Bandarapar Infrastructure Limited Company, that 9% will have to be recovered from the end consumers of steam only. So, from company's pocket, from steam house pocket, nothing will go. That has to be recovered from customer and that has to be passed on to the authority which has allotted the tender.

Okay, so. And one last question, if I can, if I might.

Sujal, sorry to interrupt you. May I request you to come back in the question queue for a follow-up? Thank you. Next question is from the line of Ajit Sethi from Eco Quantum Solutions. Please go ahead.

Yeah, thank you for the opportunity and congratulations on a good set of numbers. Given the high stickiness of existing customers, so what is the value proposition that would incentivize customers currently sourcing steam from competitors or generating steam in-house to switch to steam house?

So, one, there is generally not a competitor in most of the geographies that we are talking about or we are operating. So, the question of competition doesn't really, really arise. But yes, from their self-generation, one, their inefficient boilers, two, the fuel that they could be using, for example, furnace oil, LDO, or natural gas, which are predominantly very expensive, or if a customer is operating on an intermittent consumption pattern, in all such situations, we are very cost-efficient as compared to their self-generation. So that could be in range of 25% to 35% cost-efficiency. So that's the predominant reason why industries stick to us.

Okay.

And so, what is the amount of CAPEX that we are spending to increase our capacity to 705 tons per hour, and when will be this operation?

Babaji, please.

Yeah. So, for the under-construction project, there are four under-construction projects, and on which maximum work has already been done, we'll have to do around another 55, 60-odd crore of CAPEX to go all these four projects live. And for the balance, the IPO-end-use project and one of the projects which is planned in Tarapur, we intend to do another 170 crore worth capex in next 15 to 18 months. Out of these four under-construction facilities should go live in current financial year. This is what we are targeting. Okay. The 160 tons per hour capacity, which is in Tarapur, should get live in quarter 4 of FY2028. And the IPO end-use facilities, which are in Dahej, Dahej, GIDC, Ankleeshwar, and Panoly should go live in quarter 1 FY2029. This is the timeline with which we are working.

Okay, sir. Thank you.

Yeah, thank you.

Thank you. Next question is from the land of Avinash Nahata, from Parmi Financial Service. Please, go ahead. Yes, you are. Yes, sir. Go ahead.

Thank you. Since we are new to the company, Vishalji, we would want to understand the pipeline infrastructure as to how many kilometers this particular steam travels at, what pressure, what bar, and then I'll come to the second question. If you can please explain how steam travels logistically to the end customer and what is the network?

So we are laying overhead pipeline networks in kilometers. So, for example, the total laid pipeline is above 60 kilometers right now, including seven industrial areas. And the farthest customer we generally quote about is seven and a half, eight kilometers away from the point of generation. So, the pressure drop there is one bar in general, approximately one bar, and temperature drop can be in a few bits. So, four to five degrees is what we generally lose on temperature side. So, but this varies again with various seasonality. So, monsoon, it can be slightly higher. Summers, it can be on a better side. So, this is how we supply. We supply steam to pipe network to the industries at their doorstep.

So you're saying there's on an average drop of 4 to 5 degrees from where it is produced to where it gets dissimilarated?

Yes.

And with a pressure drop of 1 bar, that's what you said, on an average?

Yes.

And so you mentioned that 25-30% is the savings for a small processing house if they do it captively versus what they outsource from Steamhouse.

Not processing house in specific, I would say. It's more of any industry who has a boiler who is either on either of these expensive fuels or is an intermittent consumer in that case. But if it's a textile process house per se who has a higher consumption, a bigger quantity of consumption on coal, then we are not so beneficial to them. So, we can be a little cheaper or at par with them, but not so beneficial in that case.

Okay, one more question. Like you said, there is a temperature drop 4 to 5. One thing technical. So, during that process of transfer, there is also a condensation because of temperature inside and outside. So, there is a steam loss also because of that? Yes. What is that percentage? I mean, I am producing on average. On an average, so this, yeah.

Depends again on the season, weather conditions, it can be between 3 to 7 percent again. Sorry? 3 to 7 percent. Teens se 7 percent.

Achha, eek tiz orr, just I'll close before that. So, 705, when you calculate 4.46 million ton, how do you arrive from 705 ton per hour to 4.46? If you can just briefly explain.

Yeah.

So, sir, we normally consider 80% as the sellable capacity because around 20% of the capacity gets used in the boiler itself in the processes, in the aerator process and all. And 330 days is the clear days we consider because the boiler has to be taken under annual mandatory maintenance. That's the law of the land. And there would be days wherein we'll have to take preventive maintenance. So, 330 days is the official days we consider.

Got it. 24 hours, 3-30 days, and 80% capacity.

And 80%, yes. That's the fillable capacity, for all practical purposes.

And how much we operated in Q1, as a percentage, jitna we can make, 80% is?

It was 41%, sir. Jitna we can make, jitna we can sell, 41% we have sold in Q1, which was the last year's 36% higher.

I'm going to request to come back for a follow-up question. I request to all the participants, kindly limit yourself to two questions per participant, and rejoin for a follow-up. Next question is from the man of Sanne Gosar from MK Ventures. Please go ahead.

Yeah, thanks for taking my question, and congratulations on the IPO. Thank you. My first question is, if you can explain about the industrial gas business, like what are we trying to do in the industrial gas business, and what is the possible business model in terms of are we kind of looking to partner with someone, or do we have, like are we looking to set up in-house air separator units, And how can we leverage the existing pipeline infrastructure to kind of build on to that industrial gases business? So, any color on that will be very helpful.

Thank you for bringing up this question. We intend to supply other gases because gases like nitrogen, oxygen, CO2, maybe instrument air, because these are the gases that almost similar industries that we are serving right now with steam are also using for some reason or some project or the other. And this helps us to leverage the current customer network that we have and have a basket sale. Number one, that's the reason we want to get into this business. Two is we already have an infrastructure laid for steam supply. Now, the only addition we need to do on these infrastructures is some pipes have to be added on the same civil and the steel structures that we have already laid and the ROUs that we have. So, newer pipes will also leverage the, newer business will also leverage the current infrastructure that we have already invested on.

Two.

Three is we are already supplying nitrogen, which was, I can say, a pilot project for us on the scale that we want to do it. It was a pressure swing absorption model. But you rightly said again that we are now working on air separation units, ASU, where cryogenic process of separation of nitrogen and oxygen comes. Five nines of oxygen, nitrogen, lean and LOX, liquid nitrogen and liquid oxygen can also be supplied, which are also premium products, one, and currently are being transported through tankers. So, this will give us a very strong hold on the customers as compared to the current mode of transportation where we understand the cryogenic tanker brings the gases from one point to another and then it has to be transported and transferred and stored into the cryogenic tanks of the customer. The customer has to give his space, and there is, again, a regular loss of these gases through vaporization. So, instead, if they get these gases at their doorstep, it's a good opportunity for the customers to save money and for us to get a stronghold business. We are working with several gas players right now, discussing with them on two, three ways. One, we do the whole project ourselves because the space required is very less, and the CAPEX will also be not so big as compared to the infrastructures or the CAPEX we have already done. And second, we are also talking to a few companies who can get interested in having a built-own operating model with us, where they invest and supply us gases at our site, and we sell that in turn.

Got it. And just a small follow-up on this, like incremental spends on the pipeline infrastructure, like how should we think about that, like how much stacking can you do in terms of the existing pipeline infrastructure? Like you can add more pipes to it or how much capex kind of will be needed, maybe say on a per kilometer basis or any other benchmark that you can help us understand.

So, on stacking, the pipelines are already designed for 9.5, which is a scale of earthquake and 120 kilometers of wind speed, and to carry four to five pipelines, six pipelines of various sizes and various weight on the structure itself. And we understand that the gas pipelines, steam pipelines generally do not have weight of the material that they are carrying. So, the pipelines are very less weighted. So, yes, we have opportunity of laying many more pipelines as gradually going forward, we can further strengthen by some bits to have even more strength if we need more pipes to add to. Second is the cost of pipeline laying will be a very tough thing to answer, but what I want to still say is it would be hardly 10% to 20% at the max of the current infrastructure that we have already invested in. So, you can understand that 80% infrastructure will be reutilized or leveraged for a better revenue.

Got it. This is very helpful. My second question is on the boiler technology, like boilers are the core to your operation. And in terms of, like, what kind of suppliers are you using? And in terms of efficiency, what are the various efficiency measures or new technologies that you are exploring to kind of improve the overall efficiency, profitability, cost, savings? So, if you can give some color on that.

So, we are currently working with one of the best manufacturers, boiler manufacturers of the country. I would not be able to name right now in the public domain. But they are also licensee of a German and Japanese technology provider because especially for waste-to-energy, we need the best technologies that are globally successful, and we have already adopted them and are using, and a few of them are under installation right now, one. On the coal side also, we have again selected the best vendors, best manufacturers of the country, again not be able to name here. But our continuous support is to see that we keep improving thermal efficiency by selecting the right fuel, the right boiler designs, the right SCADA system and DCA system for improvement in the efficiency and safety. And on the other side, we are working on various other technologies. As I said, it's also not that plain that we are doing as compared to most of the people in India. We are adding industrial waste to it. Industrial waste has much better economics and efficiency, I would say, once. And over and above this, we are working on atomic energy-based ideas as well. We are discussing with a lot of global organizations on how we can start supplying or manufacture steam and other gases is using the atomic energy going forward. So many technologies are that we are focusing on, and CMOS strongly believe that technology intervention is going to be the best part of taking this business forward rather than just limiting to keep growing laterally.

Thank you. Sonny, I'll request to come back for a follow-up question. I request all the participants kindly limit yourself to two questions per participant and rejoin for a follow-up. Next question is from the line of Bupesh. From ICICI Securities, please go ahead.

Firstly, congratulations to the management for this.

Bupesh, sorry, John Trump, can you speak a little louder, please?

Congratulations to the management for this. Thank you, Bupesh. Oh, okay. I just wanted to ask, like, given you have 41% of utilization, in the range of 40% of the utilization to go up to.

So, our intent is to take utilization to 60-60% of experience and learning in the last decade. The new boilers that we are commissioning will be expected to be in the range of 50% at the very initial months of the commissioning. Okay. Can you just repeat the number? 60-65% is the optimum utilization that we wish to take it to. Okay, thank you. Thank you.

Thank you. Next question is from the man of Pratik Srivastava. From Nivesh Wisdom, please go ahead.

Yeah, first of all, sir, again, congratulations on the great set of numbers.

Pratik, sorry, your voice is breaking.

Is this better? Yeah. First of all, again, congratulations, sir, on the great numbers, and I definitely like your question. Oh, a few questions which I had. One was, can you talk about, you know, your trade receivable days, and what was the revenue of Q1 operating cash flow, and what can you take, like, as an average, like, your CFO to EBITDA ratio?

Yeah, so, on the trade receivable side, we have a fortnightly billing system, and the payments are typically realized between 7th to 15th today. So that's a broad credit policy we have on the receivable side. And with regards to cash flow for operations, it was around, compared to the EBITDA, last time it was around 1.2 times. But going forward, we can safely assume that this number should continue, the ratio should be a bit lower.

Got it, got it. Second question, sir, is around this, you know, related party scheme, sales team, Sanjee Group. So now that cold trading has stopped with them, is there, like, are we going to, you know, are there going to be any more related party transactions with Sanjee Group?

And can you explain that part, please?

So, on the, as you rightly pointed out, the cold sales have been stopped, but we are still purchasing steam, steam, steam house, India Limited is still purchasing steam from Sanju Dying and Printing Mills Private Limited for same location. The original business idea or the original community boiler project, the first one was conceptualizing Sanju Dying and Printing Mills Private Limited back in 1415. So, that, Sachin facility, the steam generation facility still lies with them. But the distribution permission in the distribution pipeline network is owned by Steamhouse Ltd. So that related party transition still continues, at least for next few quarters. We have some future plans wherein we would like to evaluate further opportunities in such in GIDC or nearby to do other projects. So, in that case, maybe this team purchased from Sanjur Dying can stop, but at least for the next few quarters, this will continue.

So, one last question on this Oona project, which we are doing. What could be the expected margins, EBITDA margins on this project?

So, this will be, instead of EBITDA margin, this should be, this is the EBITDA pattern. We should be getting around 8 to 10% clear cut margin. We are doing no CAPEX there, but that will depend upon what will be the fuel price when we will be billing to the customer. So, it's a pass-through to the end consumer. So, whatever will be the fuel price, we should be making around 8 to 10 percent. But that is still not finalized. We will be signing the agreement with the Himachal Pradesh Pulsar Park Infrastructure Limited. And then we will be able to come to the final number. But this should be a typical rate. That is what has been discussed informally with these guys.

Thank you. Pratik, I'll request you to come back for a follow-up. Next question is from Lain of Deepak Pardar from Sapphire Capital. Please, go ahead.

Hello. Sir, am I audible?

Yes.

Thank you very much, sir, for this opportunity. So, just wanted to understand on the volume front, first up, now, if you see last two, three years, or even for FI26, our volume growth has been in the range of 10-12%. And first quarter, you mentioned because of the demand improvement from your customers in chemical and pharma space, you saw volume growth of 17%. So, just wanted to understand, I mean, in our kind of industry, I mean, given we have got ample capacity, the utilization is 40%. So, what sort of steady state growth one should envisage for us, I mean, in terms of volume, yeah?

Vishal, sir?

So, yes, we can expect similar growth in at least, say, 5% to 10% for the current locations where we are already there with the current installed capacity on smaller numbers. But as we said that we are already installing new projects, new locations, that would add to the utilization, this is the capacity that we are installing. So, it will be in two ways. One, improvement in the current installed capacity utilization, and second will be new capacity and their utilization. Okay.

Just to add, the revival in chemical and agrochemical sector, predominantly chemical sector, we are a proxy play to chemical industries, and we are seeing the benefits out of it. We also went through tough phases when these guys were not consuming steam in 24, 25, 26. So, the volume growth was a bit on the lower side, but these industries have revived, so we should get the benefit out of it.

Okay. So, given the new capacity also coming and the revival you spoke about, so a 20-25% volume growth at a company level is what something is achievable for us?

Yes, very comfortably.

Okay. And just my second question is on your EBITDA per ton. I mean, one of the reasons you mentioned also was because the trading part we have discontinued. So that is kind of resulted in jump in our EBITDA per ton. So this 1,000 rupees EBITDA per ton is kind of a sustainable and improvement over and above that because of the leverage advantage you have been saying?

So EBITDA percentage were suppressed because of the call trading. EBITDA per ton was anyways to be calculated. This is the steam sales and the EBITDA number. So, I think I just wanted to make that clear. EBITDA per ton of 1,000 rupees can be safely assumed that it will be maintained in our steam generation and distribution sites for the next few quarters as the new facilities that are coming up are on waste and will definitely help in keeping EBITDA per ton at 1,000 rupees or better. Quarter two of every financial year is an exception, considering EBITDA gets impacted on account of monsoon. However, we have done certain structural changes like moving coal purchases from credit to cash, restoration of solar power to reduce costs. We are also trying to optimize the inventory quantity and value. So the number should stay here, barring quarter two, because historically that has been lower on account of monsoon. But on the annual basis, I think we should be with what we have delivered in quarter one. It should be better or actually at par with what we have delivered in quarter one.

Thank you. Deepa, I'll request to come back for a follow-up. Next question is from Tej Patel from Nivesha Investment Advisory. Please go ahead.

Hi, sir. I'm an audible. First of all, congratulations on a good shot of numbers. So, sir, I mean, that's pretty interesting. So, if you already had an order recently received an order from Himachal, and then in presentation, also, you mentioned about Suraj. I mean, this is completely, probably, new set of, let's say, business coming in for government, which was, let's say, not at all present a year back. I mean, I just wanted to understand, you know, why there's suddenly a jump of, let's say, interest for government, for community boilers. And, you know, based on your interactions with the officials, I mean, how welcoming are the government with this concept? And, you know, could we see, you know, community boilers probably, you know, as a concept being adopted in various schemes and various, you know, parts which government has been building across India? And, you know, are there such more opportunities, apart from the three already you've been mentioned? If you could elaborate on this, that would be very much helpful. Yeah. Thank you.

So, thanks for bringing up this question again. One, this hasn't happened suddenly. These things were going on since 2021-22, when the government announced three Bidra parks and seven PM Mitra parks to be set up with some investments coming from the central government and remaining from the winning state government. So, various state governments had to bid to win these projects. And the criteria to win these projects was how many facilities would they give to the industries that are coming in. So, almost a plug-and-play solution was what was expected from the central government. And so, for all these three bulgur parks, one of them, which we have fortunately won in Himachal Pradesh, has a sponsor of around 1,000 crores from the central government. So, the process of planning these projects, the tenders were almost going on since more than three, four years. 2022, all the DPRs were submitted by the various state governments. And PM Mitra parks are still, as we all know and we keep reading about, are under construction at various locations. So, one, in March 2024, Central Government, the Central Pollution Control Board rolled out a guideline saying that all the SMEs of India should shift to the umbrella of common borders. So, for the government and the Pollution Control Board authorities, it is like CETPs. Earlier, we used to have ETPs, effluent treatment plants, and in the last three decades, we see that most of the industries are participants of CETPs, common effluent treatment plant. For the government, this is an air pollution reduction scheme where, you know, a common boiler, they use common boiler instead of community boiler because it comes from common effluent treatment plant. For them, it is a common air treatment plant. I could use it if I can use this word as a proxy. So, government is now pushing it hard that all the industries come into umbrella of common boiler want to reduce air pollution. Second, to give a bigger comfort to the industries to operate on, you know, common facilities and a plug-and-play solution. And we keep reading and listening to the Honorable Finance Ministers and Industry Ministers' statements where they say that the newer idea of bringing all the industrial parks going ahead is to have as many as plug-and-play options, solutions to the industries too. So that's ease of doing business for the industries. And third is a question. Yes, there are many more such opportunities that we are resaging right now. One of the projects for the Gujarat-Balkirk Park project is the tender is light even today as we speak. So we are, yes, trying to participate in such projects as well. And all the PM Mitra parks are there. Basic discussions are going. Even the Ministry of Textile has been interacting with us on and off on such projects in the textile parks. Many private associations of the industries are also talking about having common boilers in their industrial parks, seeing the benefits of the common boilers. So many such opportunities is what we will see. So now the concept is almost 11, 12 years in the country, 11, 12 years old in the country. I think the time is right where the industries, government, and various associations have started liking it and understand the concept. So, that's the reason we would see a lot of things probably happening now soon.

Thank you.

Thank you.

Next question is from Land of Ocean from Molecule Ventures. Please go ahead.

Hello, sir. I have one question. Is there any specific reason for a lower utilization for Sarigam facility?

So, yes, Sarigam. Sorry, please.

And you mentioned to one of the previous participants that around 70% capacity is tied up for 345 TPS. So, why we see a lower utilization in general of around 40% sort of?

So, I'll first answer Sarigam thing. So, Sarigam was a project where we initially missed a big customer there and could not onboard him. And the project was running on a lower capacity. But if you see this financial year and the quarter one, we have a better utilization in Sarigam because we have been able to onboard two, three new good customers. So, capacity utilization in Serigam has increased and improved, and we are further in discussion with two, three bigger customers. We hope that the capacity utilization might reach to a very good level in the Serigam plant as well, if the agreement happens, which we are very positive about. On the capacity utilization, as we already said, one is the initial, in the last two, three years, the chemical pharma industries were not performing so great, And post this Europe and US tariff agreement, the improvement has begun. And second, some of the projects were commissioned very late, and so the capacity utilization of those projects cannot be calculated on a flat basis. And third, we also keep some margin for the projects or the new industries that could come on board going ahead, going forward. So that when we talk about reaching 60-65% capacity utilization, we also see that we can accommodate at least two, three years of new incoming demand from the industries.

Thank you. Our next question is from Nailav, Meher Dami, from Augmenta Research. Please go ahead.

Hello. Sir, I was asking in Q1, FI27, the steam sold volume increased 17% year-on-year, but the revenue from steam increased 46%. So, what was the reason for

the realization increase in steam? So, one reason for realization, sorry, please continue.

Yes, sir, please, please, please, you take.

So one reason for improvement in realization was one, better utilization and better leverage of the existing assets. Two, is the higher usage of the waste-to-energy projects that we are already operating in WAPI, which adds a much more significant number to our current numbers. So, these are the two reasons for the improvement of the net debit margins. And second, about the utilization improvement, again, I will answer to this question. Am I audible clear?

Yes.

So, and the second reason, and the reason that the consumption has increased is the chemical and pharma industries have come back on track again. And also that we are changing the mix of the customers that we have by adding newer business customers, like tire industry has been added to our customers. So seeing that only one sector dependency could be a little not so great for us. So we have added, we also signed an agreement with the food processing industry in Haldia. So all these newer segments will diversify our demand and help us in maintaining the growth and better utilization in the different times.

So, with base-to-energy, you are increasing diversity there as well, right? So, will realization and EBITDA pattern increase more going forward?

Yes, we hope so, because it could be a better mix.

Thank you. Thank you. Next question is from Lianna, Arya Varadhan from ANSO Capital. Please go ahead.

Thanks. Actually, the key question we had was related to working capital. What is the working capital? I mean, the working capital cycle has become better over the last few quarters. So what is our guidance on where working capital will be and what is leading to the working capital efficiency?

Yeah, so working capital days going forward between 40 to 40 days. We minimize the inventory quantity and value. So 40-45 days positive working capital cycle should be going forward. And we were purchasing code on credit basis until May 2026 and post that we have converted entire credit purchases to cash purchases. So that is also helping us in improving the margins because you can understand that any cash purchases will help you in lowering the cost of fuel. So that has helped us post May 2026. Thanks.

Thank you. Next question is from Lion of Meal Bhuwa from Integrity Ventures. Please go ahead.

Hi. Congratulations on a very good setup number and IPO listing. I want to understand what is the revenue bifurcation for the Q1S by 27 for this team we have owned, generated, and this team that we have traded.

In quarter one, 73.7% was the steam that was generated from own boilers. 22.2% was the traded steam we purchased and we sold. So that's the bifurcation between purchase and generation.

Okay, okay. Thank you. Thank you so much.

Thank you. Next question is from Laino Vedant from Mars Investments. Please go ahead.

Sir, you mentioned that you will maintain the same growth momentum for the full year, so I just wanted to confirm was it on the EBITDA or on the revenue growth you mentioned like numbers, barring Q2 for the full year growth.

So, almost same for both the numbers, but yes, we are saying we will try to maintain, we are not saying that we will maintain.

Okay, because your guidance was 30 to 35% EBITDA C area, so I think this year we are planning to beat it, right?

We will try, yes, we hope so.

Okay, thank you so much.

Thank you. Next follow-up question is from Rano Sojal Jawa, from Diamond Capital, please go ahead.

No need, my all questions are answered. Thank you.

Thank you very much. As there are no further... Sorry. One last question from the line of Sunil Jain from Nirmal Bang. Please go ahead.

Yeah, thanks for taking my question. Sir, can you bifurcate the margin between you make generation and how much is...

Apologies, we will not be able to give this details considering the competition sensitiveness. Yes, we can talk this on one-to-one call, and we can discuss this, not here.

The growth which you are talking, that is mainly in generation, or there will be increase in trading sales as well?

So, there are two trading opportunities we already have. We already have signed agreements. One is in the HSEZ, and the other one is in Haldia, West Bengal. So, these are two trading opportunities we have. Apart from that, whatever growth as of now, which is envisaged for future, should come from the own generation and distribution. But at the same time, we would like to inform, because we have already covered in our presentation, which is filed with the exchanges, that the distribution model is a high capital efficient model, wherein the return on capital employed is significantly higher vis-a-vis our own generation facilities, Because you can understand that CAPEX goes down significantly. It's just the pipeline which we have to lay down for distributing the steam from one end to the other end.

Thank you. Next follow-up question is from Laino Pradeek Shrivartava from Nivesh Wisdom. Please go ahead.

Yeah, second, sir. Thank you for taking my follow-up question. I just have one question on this green capacity, which we are putting in this Nandesari, Vafdi, and Piranha. If I'm right, it's not coming from the IPO proceeds, then how is it being funded?

So these four under construction facilities were already funded to date and non-convertible departures in the past. So these are almost on the verge of going live.

Okay, okay, okay. Got it. So then the IPO funds were then used to reduce the date?

Yeah, part of the funds were utilized to reduce the date.

Okay, all right. Thank you.

Is there no further questions? I would now like to hand the conference over to Mr. Vishal Bhudia for closing comments.

Thank you, Amitri. Thank you everyone who have participated and especially to those who have raised the questions because this shows how prudent the interest is and we hope that we have been able to answer your questions successfully and we hope that the support of the company continues and we will be happy to answer any further questions. If you have any questions by email or any other way, that would be legally viable to going forward. Thank you, everyone. Thank you so much for your time.

Thank you. Thank you, everyone.

Thank you very much. On behalf of Steamhouse India Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.