Ador Welding Limited (ADOR) Q4 2026 Earnings Call Transcript

Thank you.

Thank you.

Good afternoon. Thank you for taking the time to attend today's earnings call. Just to give you a quick update, we have a few points to discuss and then we'll leave it over to question and answer. Just to give a quick overview on Ador, like we discussed earlier as well, pretty much in line with that, 800 plus employees, five manufacturing facilities located across the country, who deliver across India, and now have a global footprint that's increasing to approximately 15 countries around the world. R&D continues to be an area of investment and is recognized by the government of India, and we closed this year approximately 1135 flows in sales. We identify ourselves, we've discussed this in past meetings as well, but we continue to identify ourselves as a tier one welding player, which is not part of a global MLC, but with roots in India that is stretching out towards other economies and other geographies as well. These are the geographies that we currently operate in with India comprising approximately 80 plus percent of our sales. And approximately 80 plus percent of our sales and Middle East markets and select other markets like the U.S. and stuff like that becoming a lot more relevant for us as we move forward. Revenue growth is approximately 3% for the year, for quarter four, sorry, and EBITDA clocked in at approximately Rs. 38 crores, an increase of 200 bps. Gross margin was approximately 36%, and the PBT was at approximately 39 crores. This excludes, the numbers we discussed today exclude any recovery of the old Kuwait project and the exceptional items also. For the year, standalone, revenues up about 2%, gross margins at 38%, up about 250 pips, EBITDA margin at 12%, the Kuwait project recovery, which was a lot of good work done by the team from the recovery that was pending from 2020-2021, that finally led to 14 crores of recovery, and PVT of approximately 130 crores, excluding the owner's cost of the Uden project. Return on capital employed is approximately on the operational EBITDA at approximately 12%, and return on capital employed is approximately 23%. On the new product introduction, like we discussed in the past, there are various initiatives being undertaken depending on the industry or the technology that we're focused on. We have entered into a partnership with Miller, which is a leading welding manufacturer, welding equipment manufacturer globally for specific products regarding applications in the submerged arc welding space, which basically leads into the industries and power structure in the shipbuilding. We have strengthened our portfolio with Made in India products for the robotic line as well. We have added products that have nuclear approvals for consumables. We're adding more and more consumables for the... For the wind manufacturing industry, for high-end nickels, for all the special and critical welding applications. This is a continuous initiative that is undertaken by the team. And month on month, especially in recent months, we've been seeing a lot faster introduction of products and approvals accordingly. New product introduction. Another area that's a big focus area for us is the automation space. As we have discussed before, I know it needs to be a lot stronger in the automation space, not only via hard automation, but also via robotics, co-mails, laser, all of that. And in fact, we have now introduced products accordingly and we have received some orders as well. Year on year, there's a lot more push happening on this. We've identified a lot more talent to come into the organization also to drive these. And we're starting to see results of this coming. I know, as I said, being, you know, the only tier one player that is not part of the global MNC that operates, we have to be very specific about brand positioning and how we lay that out. So there are several initiatives being done to ensure that the marketing and branding follows suit altogether with that. We're fortunate this year to have received some interesting recognitions. We developed a welder, that means a welding equipment that uses battery welding. As a main power source, we're the first to do so, and we're very fortunate by CII to receive, to be recognized amongst the top 100 innovative companies in India. Our training division, which undertakes several projects primarily on a non-profit basis, but for brand building purposes has been recognized as well. Additionally, the Bureau of India Standards, which we work with very closely, has recognized our manufacturing plants for their quality and processes. Just in conclusion, this is our 75th year, which will happen in October of this year, just to give you a little bit, and we continue to remain focused on creating the best learning experience. We will now leave you open to question and answers, and take it forward accordingly. Thank you. All right, go ahead. Nisha, can you hear us?

Good evening, everyone. Sir, nobody has raised any questions as of now.

All right. Is there any questions? If anyone would like to ask any specific questions at all? We'll wait five minutes. It's fine. I think someone's raised their hand.

So, first speaker is Mr. Rajas Joshi. Mr. Joshi, you are now being placed in the meeting. Please proceed to ask your questions.

Yeah, am I audible?

Yeah, yeah, please go ahead.

Yeah, thank you for the opportunity. So my first question will be on FI26 performance. So if you could just break down our performance into volume and value so that just to get a sense of how we've done with regards to mix price and volume growth.

So, just to give you an overview, the volume growth is pretty much in line with the revenue growth, a little bit up or down within that same thing, within a reasonable level. There is obviously, as you know, in the last three or four months, been a massive inflationary effect that has happened due to the global circumstances and macro circumstances. We are seeing certain product lines outperforming on market growth. We're seeing some product lines have a little bit quieter last four or five months, especially. But we're seeing it pretty much in line with steel consumption as well as in line with the figures that we're showing over here.

Understood, understood. Secondly, on client addition, right, if you could just share some progress and traction on that front, both in terms of new industries that we're now catering to, which you partly alluded to in your opening remarks, as well as then new clients as well, similar to NPCIL or anything else. So some comments on that, please.

Oh, that's actually a big focus area for us. We talked about that in the past. So let's do it in two, three bases. The first is... Blue hanging fruit of customers where we have product, but we are not aggressive enough to be in the door. I think there's a lot of work being done in select pockets, especially on structural, on automotive, on oil and gas. We'll be a lot more aggressive. We've got a strong key customer account team. We've got a stronger CRM process that we are following at the moment that we've implemented in the last few months that's enabling us to be a little more aggressive. I think we keep seeing the benefit of that as we go forward. The second is segments where we are not product-wise strong and now entering the door, like a little bit of wind and stuff like that, where we are now getting the approvals in place, getting the testing procedures done, entering. It will take a little bit longer, but I think the benefit will be quite large from that perspective over the next one or two years.

Understood, understood. Second, my next question would be on the outlook for the next few years. So if you could just spell out how one should look at revenue growth and margins for the next few years, both on a volume basis and then from portfolio completion, if that helps with regards to mix of pricing, and then on cost efficiencies when it comes to margins as well.

Yeah, so I'll take the margin answer, because I feel that's a little bit easier for me to answer right now. Like I've been talking, and you hopefully have seen in the last two or three quarters slight improvements on those margins. I've been talking about how Ador within itself has the ability to improve its own margins, and we've been working towards that. And there's still a little bit of room left. So I think on a similar trajectory, you can see that happen, you know, for another 100, 200 basis points going forward over the coming periods. I would say it's immediate. It takes a little bit of time. As far as podcasts go, it's very tough to focus on. And I keep saying that and neither do we give. We are very clear that we need to keep looking at outperforming on volume and value. As of now, we remain, you know, if you take IIP numbers, GDP numbers, you know, 6%, 7%, 8% in that region and you hope that those numbers consistently perform, I think we're in a position to do better than that. But, you know, supply chain shocks are just the way things are at the moment, you know, lack of clarity for many planning purposes. Thank you so much. I don't have anything beyond that. All I can tell you is that, look, we're planning that those numbers should be, you know, in that line of what I mentioned at the very minimum.

Understood, understood. So, my next question will be on the flares business, right? So, X of one-time gains, segment has, I mean, probably again, optically, you know, made losses even in Q4. And so, just wanted to understand our plans for this segment going forward.

We made an announcement at the end of March, early part of April. We made an announcement that we were realigning the entire division, so we no longer have a division called flares and process equipment. We have, as I mentioned, in many calls, we were waiting for Uber to come towards closure. We have, we do not see. Our sales being successful in large scale projects, which means the kind of business we want to go after is basically a product line type of business, where we have orders and we can see profitability in those orders. That basically would be the reason of, like we discussed, a 20-30 crore product line. A 20-30 crore product line for a 1,200 crore company does not need to be a separate division anymore. It needs to be product management driven and just driven within the smaller part of it. And that's exactly what we've done. Restructured a lot of stuff, a lot of changes over the last five to six weeks, and we should see that play out better this year. As I said, we're very clear we don't want to lose any money in that, and we can make a little bit of money if we do this correctly.

I understood. And so, I mean, accordingly, are we seeing any kind of, you know, orders or pipeline in this business for next year?

Yeah, I think it should be all right for the process and process equipment player from approximately a 20 croc at a number that I'm talking to you about. I think it should be kind of okay on that front. Whatever little traction I've been noticing, it should be okay for that. Yeah.

And then we should be able to break even. This is that number that you just mentioned? Yes, yes.

All right, all right. Perfect.

I think I'll just stop and get back in the queue later if there's no more questions. Thank you.

Thank you, Mr. Doshi. We will now move to our next speaker, Mr. Pritesh. Mr. Pritesh, you are now being placed in the meeting. Please proceed to ask your questions.

Yeah, hi. I just wanted to check for last year, this F526 amongst all the industries that we were catering to. Any broader observations that you have in terms of the industry, clientele performance, any hits and misses there? And then I wanted to check on the export side of the business because we do a lot of business in Italy.

So, I think in terms of industry, how will that business shape up? I think in terms of industry, first, I think there are some industries that, I mean, you guys will know better than me, but we are seeing, we choose obviously shipbuilding, a little bit on some structural, wind, like I said, even though it's not a big thing for us at the moment, but we are seeing a lot of activity there to get us approved and stuff like that. Automotive is picking up, doing all right from that front. Thank you. Those are the main, I'm not seeing, you know, I'm not seeing anything else that's really outshining or anything like that beyond a few of these. Thermal is expected to, and some work comes from there as well. Oil and gas pipeline kind of work, all of that going on, so that's kind of all right, but nothing exorbitant or nothing shining out from that perspective. We do expect it, like everyone else does, for the reasons that, you know, the next 12-18 months it should be a little bit better. From the exports perspective, last year was a bit soft compared to Target, very flattish compared to where we wanted to be the year before. We did notice one of the markets were quite reliant on where the markets were a little bit soft due to their own structure, blah, blah, blah issues internally. For example, in Saudi and stuff like that, a little bit softer, but we did see other markets do a little bit better. So far this year, what we have seen is the order book, inquiry base, and approvals where we set up, exports should do better, should do well, should do better with the markets we operate in. We're definitely seeing a lot of the efforts we put in, we're seeing a lot of traction from that.

So why, so now the next business is on the process equipment side. Why is it that we still continue to have adjusted for those one-offs losses continuing? Because in the past also we have said across a lot of quarters that, you know, this is towards the end. So, you know, where exactly does this all finish and what kind of…

The 3 crores that you see in FE is basically a gain that has come because it was one of the reorders that came in from ONGC. So that's a gain. And accounting wise, we will have to take it in the same line item where we have taken the expense. So it's a gain. If you look at it in June, it was 28 crores if I'm not mistaken. And now, in March quarter, we have taken a 3 crore gain. So, full year, the hint on that is about 25 crores. Going forward, if we get any money back from ONGC for any LD and all, again, it will come in that same line item.

There is no further negative left. We took the biggest hit we did in Q1, and we are working towards recovery on what we can. That was the great job.

And then there is this another gain, right, which you are reporting impairment, reversal on trade receivable. So that goes and sits where?

That is the KOC that we had taken in Kuwait project. That was the project we had taken in Kuwait and with a lot of efforts from finance team, they were able to recover that money. So that has also come in as a separate line item so that people are aware that this money is not from current operations. It's an effort of the past that has come in.

So, then from a segmental point of view, what happens is you report a 5 crore number in the process division, which has both these gains sitting, right? So, if you adjust for that, then there is a loss. So, my question was there. So, on an ongoing basis, there is a loss. Adjusting for gain, there is a profit. So, you know, my question was from that direction.

Are you asking basically that does the flares and process equipment division, if it continues to run the way it does today, it loses mark? No, it does not. Because effective 31st March, I have taken many decisions that will not allow that to happen coming into this quarter. Because I had to wait until the UDAN project was completed for many things to happen. That's it. From that respect. Okay? Sorry, but this is okay? Like that. You're on mute. Sorry, we can't hear you.

Yeah, you got muted. So, incrementally, the growth division, so basically, we don't see the losses recurring in the process equipment division, and the welding division moves in line with the steel growth rate plus whatever extra growth rate that we come from. Export business because last year was a flat number in export, correct? That's how I have to read it.

Yes, yes, correct.

Any downside or upside case in the margins of the welding business?

No, right now we don't see anything.

Any other diversification plan out of the business?

Nothing at the moment, nothing that stretches much beyond anything on that. We are now, we do have the merger behind us, we do have movement behind us, we have Kuwait behind us, all of those things. We will explore certain, what I would not call diversification. We will look at product adjacencies, opportunities that arise. But nothing at the moment that is a large ticket investment.

Okay. Okay. Thank you very much and all the best to you. Thanks. Bye.

Thank you, Mr. Pritesh. Our next speaker is Mr. Satish Doshi. Mr. Doshi, you are now being placed in the meeting. Please proceed to ask your questions.

Thank you so much for the opportunity. Am I audible, sir?

Yes, go ahead.

Yeah, thank you. And congratulations on good set of numbers. Relatively, we have posted a decent growth in terms of revenue from welding business, YOY and QOQ. I wanted to understand in the context of the ongoing situation in the Middle East, what would be the outlook going forward for medium term and how sustainable are the EBITDA margins? I mean, I have adjusted all the one-offs of reversal of provisions and all of that, so I am looking at an EBITDA margin of approximately 12% in the Q4 and Q3 as well. So, what would be a sustainable EBITDA margin and the growth outlook for the welding division?

So, the first was on the exports. Hopefully, that situation will come down. But we've seen demand through the last few weeks even be good. Question is being able to get product out there, which is now also there are opportunities that keep coming and going. So, it's happening. But we've seen in terms of demand, no issue. And we expect demand to be fairly good in those markets going forward. Unless something very, very adverse happens much beyond our control, we don't see anything being very adverse from that perspective. That's the first. Second is on EBITDA margins, like you said, yes, that is the number that we look at as a base, and that IFOs ought to continually look at how to keep incrementally improving upon that, which we believe is definitely in our scope and has to be done step by step. The third thing you would ask about the welding industry, like I mentioned, you have to look at steel consumption, IIB data, All of that. And take it from that perspective. And that's where we're trying to follow that kind of trend.

Thank you. Just a follow-up question regarding the growth outlook. Would you like to quantify any internal target that we are looking at in the media?

Sorry, I don't share. We have targets, of course, but I'm sorry, I don't share it publicly. We don't like to be biased, but we are speaking. That's the way we look at it.

Also, would you like to guide us at what capacity we are operating right now?

Anywhere, welding has a lot of different types of lines in consumables as well as in equipment, but I would say a fair estimate is anywhere in the region of approximately 70%.

70%. So the normal capacity at which we can operate is, what, 90% in this industry?

Yeah, you can operate approximately 70% to 80% to 90% depending on what types of systems you are, how old your equipment lines are, accordingly you can. There are some lines that currently operate at 90-95% for which we need to undertake GAPEX, some new technologies we need to invest for as well. But yeah, pretty much along that.

Lastly, sir, we have been seeing a lot of trust from government on the shipbuilding sector, making India efforts. And we are announcing, we are seeing a very big announcement from, you know, government of India for buying or procuring or making ships in India. So how we are placed in this, in that infrastructure? I mean, are we in the approved category and what kind of growth this sector can, you know, give us, given the opportunity in sizes so big?

It's a big focus area for us. The quantum of welding and shipbuilding is very large. So it's definitely a big focus area. We spent a lot of time, effort and put a lot of resources behind it. We have positive approvals in place. For, I would say, approximately 75 to 80% of it. There are yards where we are stronger placed than other yards, just like it would be for anyone supplying in. We are making a lot of effort to continuously grow that, not only from a consumer's basis, but equipment, automation. We represent some international brands for really high-end automation as well. So a combination of all of that, there's a lot of effort being done to see that. But yes, we are on the same page as U.S. partnership building.

Generally, what could be the ratio, sir? I mean, let's say if, let's say, you know, 10,000 tons of steel is being used in making a ship, how much of our welding rod would be required?

I can't answer you specifically on shipbuilding, but I can tell you that it's approximately 2% as a thumb rule the industry uses in general for most of these applications. 2%, okay.

All right, sir. Thank you so much, and I'll get back to you.

Thank you, Mr. Doshi. Our next speaker is Mr. Dhawan. Mr. Dhawan, you are now being placed in the meeting. Please proceed to ask your questions.

Thanks for the opportunity. So my question is, I think you already mentioned that we are seeing some tailwinds from a few of the sectors. So let's say your welding revenue by this year end, FY26 was roughly 1070 odd crore. And based on these tailwinds, by when do you see we can do roughly 1500 to 1600 odd crores kind of the revenue from the welding business? Is it like by FY28, is it achievable?

Amen. Look, that would indicate somewhere in the region of approximately 80 to 20% growth rate, year-on-year for two years. Yeah, I would love to be able to do that, and I think it's definitely feasible, but the ground economics and the ground macroeconomy has to support that. So, I can't venture a guess much beyond that, but to tell you that, look, it's in our radar that we have to get ourselves there, and we are investing and driving accordingly. But I don't want to put a number up there yet. But you're not very far off as long as you've got to be strong.

Sure, sure. And let's say, you know, the shipbuilding, I think majority of the commercial players are already, you know, getting the orders and maybe the construction would begin maybe after a year kind of the timeframe. So do you foresee, you know, this shipbuilding itself can give you 1000 odd crores kind of the revenue visibility in the next five years, in the next five to seven years?

That's a very large number. I won't give you a number, but I will tell you that that's a very, very large number that you're talking of. Very hard for, I think, most companies of our size to get that much just out of welding from shipbuilding. But it could incrementally add a bit. But that's a very, very large number.

Okay. Okay. And in terms of the incremental orders from the other sectors, how do you see right now? Is there any order inquiries coming in or any finalization which has been done recently?

It seems to be fairly okay. I think from, I would say, November-December onwards, we've seen it be kind of okay. Even right now, it's all right. It's just that you have inflationary impacts that you are dealing with at the moment. We're a little bit cautious in that regard. Demand is all right. It's not bad. Given all the macroeconomic circumstances, in fact, I would imagine it could have been worse. It's not. But you have to take it with a very short-term view on it until things stabilize.

Sure, sure. Okay, sir. Thank you. That's all for my sake. Thank you.

Thank you, Mr. Dhawan. Our next speaker is Nishita Shankarisha. Ms. Nishita, you are now being placed in the meeting. Please proceed to ask your questions.

Yes, hello. I'm looking at this company for the first time. So apologies if some questions are very nuanced. I just wanted to understand, I wanted a clarification. You mentioned that we can expect 100 dips of margin improvement in the coming period. So was that on the gross margin front or the EBITDA margin front?

That will be more on the EBITDA level, that we still see that there are spokes of improvement over there. Of course, part of it will also come from gross market.

Okay, understood. And if you can give a time period by when we can achieve this improvement, is this possible in FY27?

Yeah, we're working towards it and whatever little we can do as fast as possible, we'll do it. But surely over the next few quarters, you will see EBITDA margin improvements happening.

As long as you do not have ridiculously difficult supply chain shocks, it's possible. So, within us internally, we see it as a feasible model.

Okay, okay. And like you also mentioned that in some lines, we are already at the utilization of 99%. So, what is the CAPEX that we are expecting in 527?

I think the CAPEX time will be in the region of approximately 30-35 crores for the coming year.

And this will be majorly to add the lines only?

Yeah, so we have done generally a maintenance capex that will come anywhere in the region of 10-12 crores type scenario, and this year we'll have 2-3 lines that are coming that are new that are up over this year and next year. So we expect 30-35 crores to keep it stretching around to 40 maybe at the most over the next two years each year.

Okay. Okay, understood. And this will be in which segment? The process equipment segment or the welding segment?

No, no, no. It's all welding. It's all welding. It's primarily for the consumers, not for.

Okay, okay. Understood. And if you can give some color on the order book size that we currently have?

We actually, you know, our business operates on a… 80 to 85% of our sales is on a distribution system. We distribute across the country for our welding business, our maintenance and repair business, as well as in our international, we work through distribution. So we don't have long autobook periods. We normally have very rotating quick cycle periods. I can tell you that so far it's in line with pretty much what we've seen over the last three, four months is what we're noticing right now.

Okay. Okay. Understood. Thank you so much.

Thank you.

Thank you, Ms. Nishita. Our next speaker is Mr. Ronit Kapoor. Mr. Kapoor, you are now being placed in the meeting. Please proceed to ask your questions.

Yeah, so I had a couple of questions. So firstly, I think there's been a recent income tax demand of 14 odd crores. And I wanted an update regarding that. What does it pertain to? And particularly, I see that in your notes, you have mentioned that your BIS hearings are closed. So any update on that?

Yeah, sure. So, I'll address the BIS first. So, the BIS hearing, most of it is closed, but it's still going to go back to Magistrate Court, which we've been given a date sometime in June, July. So, that process is still going on. And we're very hopeful that that will end in a much more logical manner than where it is at the moment. So, that's progressing at the moment. On the income tax matter, I'll ask Suria Khan to give you an update on that.

So, we have filed our appeal last week only, and we don't see any merit in which the department will succeed in time. So, we are hopeful it will come in our favor.

Okay, and secondly, I want to know, given the healthy cash balance that the company currently has, and I see the smaller players in the industry are growing faster than us, so I want to know, are we open to any acquisition?

Yeah, we are open to acquisitions, but our acquisitions are a little more targeted now. As I said, as I've been telling shareholders for a while, the first is I need to clear up a few things in terms of Mooran, Merger, a few other heavy baggage things that need to be cleared up, which we are now. We start spending a little time and effort on it. But it will be more dependent on technology necessarily than only market share related. But we will look at both. We will explore.

Okay, and lastly, I want to know like in terms of your welding business, like how the growth levers are in terms of currently the maintenance division and because you don't give us a breakup, like so I want to know like how much is the equipment division grown compared to the maintenance and repairs and your consumables and such.

Sorry, just repeat that question. You want to know the...

Breakup of your welding equipment business and your consumer business, like in your welding.

In terms of revenue or growth or what?

Revenue, yeah.

So we don't give the revenue numbers for a specific reason, much like several competitors don't, we don't as well, and then we feel that it's fair. But if you look at our historical data, I can tell you that it's pretty much along a similar ratio than what it was earlier.

Can you specify in terms of the growth?

Growth cycles are fairly similar across the board for all of them. You'll see a little bit of a spike in welding equipment in general when you see a capex cycle pick up. Otherwise, you'll see pretty much similar data for both.

And in terms of exports, what would be the exposure to Middle East?

Our exposure is fairly high for the export division, but very secure. We're very secure in terms of how we deal, in terms of we deal with distributors, our payment terms, all of that. And demand remains fairly high. I'm not at all worried about the Middle East at the moment from that perspective.

So, were any dispatches affected during the quarter?

During March quarter, there was a little bit of a dispatch effect, of course, during the first three, four weeks. Towards the end, last few days, we saw traction happen. But yes, what was planned to happen between the first and the 20th and the 25th of the month was obviously naturally very, very slow. But we've seen that pent-up being cleaned up most of it.

So, that issue has been resolved as well, like the dispatches have gone in this quarter?

Yeah, most of it is resolved as on today. Now what happens tonight over there, we don't know, but as on today, yes.

Okay, thank you. That's all the best.

Thank you, Mr. Kapoor. We have a next speaker, Ms. Saloni. Ms. Saloni, you are now being placed in the meeting. Please proceed to ask your questions.

Yeah. Hi, sir. Am I audible?

Yeah, please go ahead.

Yeah, sir, I know Mr. Aditya, you generally refrain from giving a revenue growth target, but in, I think, one of the presentations last year on 29th May, I think after the merger, we mentioned our target of turnover to pass 2,000 crores by 2019. So, are we still on that?

F529.

Yeah, F529. So, basically, doubling our top line currently in the next three years, giving us a 25% figure. So, are we still following that?

We're still following the principle of doing that, but the main principle that drives that is to triple our earnings over that much period of time, and that's what we're working towards, and we've seen that hashtag. Have a lot more success because the base economy is tiny and hard to be able to deliver that level of growth. But yes, we are following the principle of we must somehow get there. And we are going to look at it like that. Yes.

Sir, any specific driver of which particular segment is going to help us achieve that? Because generally, if we look at the past, generally been 15% to 20% growth, right? So any particular segment which we are focusing on, which would, you know, get us there?

I mean, from a customer's perspective perspective.

No, from our segment's perspective, like consumables or...

Across the board. Now, as I said, now we have basically one segment, but across the board. The way we manage the business, each one has to, has to be pushing their numbers accordingly like that across the board.

A lot of questions have been asked about the shipbuilding as a new industry that is opening up. According to you, which industry is still going to be the primary driver for our business? Steel, I'm assuming, obviously.

Yeah, the engineering structural fabrication will remain the big driver because that is a large part of it. And that will have pockets where it will do well and stuff like that. So I'm not too concerned about that at the moment. And you will see, hopefully, a big uptick as CapEx plan will be fixed up with the right plan. But in general, I'm not worried about that. But, yeah.

Apart from shipbuilding, sir, any other new industry that is opening up and we would be, you know, targeting?

No, nothing specific. I think there is shift building, there is defense, and all that kind of stuff. There is a little bit of the renewable space that we have to work on as far as ad hoc is concerned. We are working on real basis going on. So, you know, that kind of thing.

If you don't mind, sir, what is the current product mix, sorry, the revenue mix of these particular segments as of now, and how much do you think we can cater to in the next three to four years, let's say?

We don't share too much of that data historically. Like I said, they would be anywhere in the top seven, eight key industries that we focus on.

Okay, so just one last question from my side. As you already know that Saudi Arabia as a country has announced a massive basically construction boom that is happening over there. And as a company, we are anyways focused more towards UAE and Oman. And so what is our strategy basically in terms of getting more clients from Saudi Arabia given that the construction boom has started?

So, let me correct you a little bit there. Last year, last financial year, our second largest market outside India was Saudi. This year, Saudi is our third largest market. So, we are quite set up over there. There are a lot of project rejects that have happened in Saudi. There will be a lot of business coming forward from there. I think we're quite well set in terms of sales and distribution and approvals. These are the three biggest triggers. I think we're quite positively set up there. It's a question of a few things clicking now from that perspective.

Okay. So, any particular jump in the inquiry or the order pipeline that has come from that market?

In the last 3-4 months, it's been a little healthier than what we saw. I'd say from December 1st, it's been a little bit healthier than what we saw during calendar year 25. Okay.

All right. Thank you so much. Wish you all the best, sir.

Thank you. Thank you.

Thank you, Ms. Saloni. We have next speaker, Mr. Jason. Mr. Jason, you are now being placed in the meeting. Please proceed to ask your questions.

Yeah. Thank you for taking my questions. I am audible.

Yes, please go ahead.

Yeah, thank you so much, sir, for taking my questions. First, I'll just have some questions on confirming in the sense. So, sir, you said that the FPD segment is now, of course, merged into the MNR segment. So basically, in a nutshell, it becomes only one segment. That's the welding segment. Is that right? Going forward, we'll have only the welding segment continuing.

We only saw the welding segment. That's how we believe it's the right way that most of the industry is doing it. We think that's the right way.

Right, so there'll be no need for any segmental information after that.

No, we will not do it. Like I said, it's not the size and scale of it as far as the prospect goes, not deserving of being a division in any way. It's product-like.

Sure. And this, so the Uran project, of course, I know we booked the losses and in Q1, it's down and dusted, right? Everything pertaining to that is done. Is that?

So there are two parts to that. The first part is everything pertaining to the accounting losses and what we foresee is forecasted losses and blah, blah, blah, all of that is all done. As far as the project, it's at a part of 96, 97% level because of this gas issue and this and that. There are a few things that have led to a delay that will get closed up in terms of final commissioning, but no major exposures.

No major exposure. So no major, any further losses or anything coming from that? Yeah. Okay. Okay. Sure. Sure. Okay. Thanks, sir. And so just from this perspective, I mean, you know, our welding growth year on year has been 4%, right? So just in order to know, I mean, you know, IIP growth is currently hovering around 4% to 5%. So what would be needed to basically at least take our revenue growth to 6%, 7% or probably let's say 10%, you know, with a lot of things that's spoken about, the capex being at a very high level in the economy, especially public capex and stuff like that. So just wondered your sense of how, I mean, what? What could be done so that we can grow in higher single-digit growth? What could we do better on that front?

If you look at the supply chain shocks and if you just look at steel in general, we follow steel, right? So if you just look at those main trackers and those main concerns that they had, it's very similar on the ground for us. I think CapEx is, I don't know the exact data, you know much better than me, but whatever we're seeing, CapEx in terms of capital formation that applies to us, slightly weaker than we expected last year. Hopefully going to be a little bit better going forward.

Okay. Okay. Sure.

And sir, just could I get the total exports value for this year? I believe the last year was around 154 crores.

Like I said, the numbers would be out at the right time, but it's fairly flattish this year.

Flattish. Okay. Flattish. Okay. I also just wanted to know this collaboration with Miller seems to be very interesting. Okay. And just wanted some sense, whatever you could share of how it will help us compete in the equipment division. I mean, with the market leader, I mean, with the market leader, I mean, I'm sure it's in that, that trajectory only, but yeah.

Yeah, from a high-end technology perspective, there are select industries which require that if we had product gaps on. We've been talking about this for a while and there are product gaps that exist by virtue of us not being an MNC and we're looking to plug those. And this is an opportunity that we have to take forward. It's interesting and there's a lot of work left to see the benefits to it, but it's an interesting small start.

Sure, sure.

Okay. And again, when I looked at your new product introduction, those products look very interesting and probably very high-end as well. And you also spoke about, you know, like future areas like laser cutting, robotics, automation, etc. So I just wanted to know which are the end-user industries for these categories? What could the potential be? And is this equipment, all this, the CNC bevel, etc., is it locally made, made in India or imported? How does that work?

Most of it is locally made. Most of it is locally made. You might have a few that are in source from board or something like that. The application could go anywhere. There's automation happening. So every structure of application, oil and gas, stuff like that, anywhere there's automation happening, which is in many, many industries today. It's about being able to convince the customer, be in front of the customer, convince the customer, get all of that done, and do some interesting work with laser, robots, robotics, all of that. Like I said, I think the opportunity is good for us. We have to be at good speed. Get the right talent to push hard. And we're seeing that a little bit. We're seeing that benefit coming.

So you're seeing that benefit coming, right?

We're seeing our best order book for us on the automated field that we've ever seen. But there's still a lot of scope, a lot of scope, a lot of work.

Okay, sure. And sir, just again, one question in relation to that, as compared to developed markets, India is a different ballgame. So you have a lot of labor, which is reasonably cheap, right? Or cost effective for a better world. Just wanted to understand, sir, from that perspective, these high-end technologies, how do you see it on the ground? I'm asking you because you have a much better idea and welding and all, we don't have much information publicly available to us. So just wondered in that sense, how do you see that transition happening from the manual thing to the more AI-based, the software-based solutions?

So I won't go too much into that very, very AI-based or anything like that. I can just tell you that what you would call semi-automation, basic automation, hard automation, robot, robot, which is not some, you know, exceptional end of the spectrum. It's basic automation the way you look at it in many ways. I think across the world, across India, we're seeing. You're seeing companies, not only A-class companies, you're seeing B, C, SMEs, all of that, look at automation a lot more seriously because of the availability of skill and manpower. So I think the potential is good.

Okay, okay. And so just my final question, I just wanted to know, I mean, equipment, yes, Miller definitely helps us in improving the product mix. You mentioned that. Now, just in terms of consumables, I just wanted to understand what are the concrete steps we're taking to basically improve the product mix and the product gaps.

They're basically related to, like I said, identifying certain segments or identifying certain induced segments like renewables, stuff like that, where we're not present, getting in there, investing more and more approvals, for example, in nuclear, stuff like that, and then adding on capex in certain specific products like fluxes and all of that to be able to take it on.

Sure, sir. Thanks. Thanks for answering my questions. Thank you. Thank you. Thank you.

Thank you, Mr. Jason. We have next speaker, Mr. Akshay Satija. Mr. Akshay, you are now being placed in the meeting. Please proceed to ask your questions.

Hi. Thank you for the opportunity. First, I actually wanted to ask regarding what would be our market share if we look at the domestic markets and even exports-wise, if you could throw some light on that.

So the market, because it's a very small industry, people have various different ways of looking at the market, organized, unorganized, and the mixed data that comes from it. We look at it very simply. I think we believe ourselves to have anywhere in the region of approximately 17, 18, plus minus a few percent in terms of market share.

Okay, okay. Sir, also there's been a lot of talk around the shipbuilding sector. If you could throw some light on what sort of revenues we are doing right now from the shipbuilding sector and where could we go if the sector picks up in five, seven years kind of range.

I won't give you a revenue number because that's slightly confidential, but I will tell you that it's still small compared to the pie that is going to be available and that is there. So there are two elements. One is the natural growth, the organic growth that will come from customers that use us. The second is pockets where we have product, but we are not in. The third is approval. So I think the opportunity to grow from the base is quite high.

Okay, okay. And so finally, so say five, seven years from now, we look to double our volume. What would be the approximate key picks required if we are to double our volume in five, seven, six years kind of range?

Good question. I would say in the region of approximately 120. I'm not talking about anything to do with land and all that. I'm just talking in terms of land, machinery, capability and stuff. I would say in the region of 100 to 150.

Got it. Got it, sir. Okay. That's it from your side. Thank you.

Thank you, Mr. Raksha. We have our next speaker, Mr. Vikram. Mr. Vikram, you are now being placed in the meeting. Please proceed to ask your questions.

Yes, good evening, and thanks for the opportunity. Can you hear me?

Yes, please go ahead.

Okay, great. So, I think just a question you mentioned on the internal, you know, points that you're focusing on. Forget the geopolitical issues, but are you comfortable where you stand now, given the merger is off, lost contract is off, and things like that? Would you say now you're kind of ready for the future?

I think so. I think we've been waiting for this time for the last, you know, I would say almost two, two and a half years at least that we're standing back on solid ground with a lot of big ticket stuff, big ticket problems behind us. I would definitely feel that way at the moment, yes.

Excellent. And secondly, you know, I just had a point in terms of growth again. I mean, You know, we spoke about a CAGR of 25, if you have to meet our vision. Any sense of how we can bridge that gap?

There is that we do discuss, there are ways that we are looking at that I don't, I can't get into full details over here, but there are ways, I think part of partnerships and sort of, you know, being a little more aggressive in terms of maybe doing an acquisition here or there is definitely something that would be interesting. Beyond that, I want to do other things that I'd rather not discuss at the moment, but I think if you take the base of automation, if you take the base of international, if you take the base of... I think the base of certain sectors like renewables, I would say these are definite areas that you can outperform.

Got it. Got it. And just in terms of the fact that the steel cycle has come back from whatever reports I've seen and rising has gone up and things like that, what does that mean for you incrementally?

It's been okay. It's a little bit challenging. I think Steve is going through a very interesting phase in terms of inflation impact, demand restrictions. I mean, supply sort of being, you know, managed. It's okay for us. We're all right on that front. But yeah, it's a lot of managing of that as we move through the process of it. But I think Steve, yeah, I would tend to agree with you that it's more of an advisor stage than anything else.

And one final question on, you know, shareholder value and market cap and things like that. You know, I mean, if I look at the numbers, right, I mean, market cap hasn't moved in spite of all the good work you've done. Is it that we're not putting out the story right? Or do you think the market hasn't understood it or any sense of that?

I think in all fairness, the market understands us quite well. I think they do. I think in all fairness, there were things that we've discussed that were holding us back a little bit that people have been waiting to see is reaching its point of closure, which is what we've been patiently trying to do. And now, you know, we leave it to the market to take it forward from that perspective. Got it. All the best.

Thank you.

Thank you, Mr. Vikram. We have follow-up questions from Mr. Rajas. Mr. Rajas, you are now being placed in the meeting. Please proceed to ask your questions.

Yeah, thank you for the follow-up. So, I was going through your page on LinkedIn and I saw a mention of a tie-up with ITW. So, just wanted to get some sense on what this tie-up is and what it entails.

It's the same one we discussed regarding Miller's Group Company of ITW. It's the same one. So the high-end welding equipment, step one, to specialise industries like thermal and structural and stuff like that.

All right, all right. And I think earlier in the call, you spoke about using the cash balance that we have to, you know, probably look at some technology or enter an adjacency. So, could you please shed some more light on what this adjacency could possibly be for us?

So, it's a little too early for me to discuss, we're just exploring opportunities, but it's related to, simply speaking, the fabrication, joining or cutting of steam, right? At the end of the day, it's going to be around those times.

Understood, understood. And on the exports front, outside of the US and then the Middle East, which you earlier highlighted were our largest two markets, what would the progress on some of the other markets be for us outside of these two?

We've seen, I mean, obviously, one of the tariff things that held back to the U.S., but we've seen in the last two months a lot more traction happening. The Middle East remains core to us. We're seeing a little bit of interest after the Europe FDA. Some stuff over there, we have to build it up correctly, we have to get the right distribution model in. That's primarily, I would say, most of the highlights from that line.

Yeah. And with increasing, you know, automation and robotics and the co-bots in your business, how do you see the consumables versus the equipment mix evolving? And then what impact does that have on margins, if that makes for a change, so to speak?

As you increase automation, you will see that change, but the base is very, very tiny, so I don't think you will see a very big impact happen fast. I'm not too stressed about the margin impact on that at all. I'm not too stressed. In fact, you just need to be able to grow that side a little bit faster because as far as any top-tier brand is concerned, you need to be well-structured in that space.

Okay, okay. And just from a core welding portfolio, product portfolio perspective, any further gaps that you see in a portfolio that need to be plugged for us to, you know, go out there and crack clients that probably we're not able to do today? Something that you've done with ITW already?

There are, I mean, in the last 12 months, I would say, I would have to say the teams have a lot to plug, a few interesting gaps. I'm quite happy with that, but there are always a few. And this is part of being a non, not part of being the MNC globally, the tier one guys. There are a few gaps there. There are a few gaps in terms of certain sectors you want to deal with. So there are a few, but the good news is a lot of the way things are coming into place.

Thank you so much and wishing you all the very best.

Thank you.

Thank you all speaker for insightful questions. With that, we will now conclude our Q&A session. I would like to hand over to Aditya sir for the closing remarks.

Thank you. We appreciate everyone taking their time. Thank you very much. All the best. Thank you.