Glass Wall Systems (India) Limited (GLASSWALL) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the Q1FY27 Glass for Systems India Limited Conference Call, hosted by IIFL Capital. This conference call may contain forward-tucking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not the guarantees of project performance and involves risk and uncertainty that are difficult to predict. As a reminder, all participant lines will be in the decision-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 a touchstone phone. Please note that this conference has been recorded. I now hand the conference over to Mr. Mohith Agarwal from IIFL Capital. Thank you and over to yourself.

Thanks. Good afternoon, everyone. Welcome to Glasswall Systems India Limited's first quarter FY27 earnings conference call. From the management side, today we have with us Mr. Jawahar Hemrajani, Chairman and Whole-Time Director, Mr. Ishaan Hemrajani, Managing Director and CEO, and Mr. Sanjay Sarant, the CEO of the company. I will now hand over the call to Mr. Ishaan Hemrajani for his opening remarks. Thank you, and over to you, sir.

Yes, hi. Thank you, and good afternoon, and a very warm welcome to everyone present on the call. Thank you so much, Mohit, for introducing myself and my father, who are both on the call today. We also have Mr. Sanjay Savan, who is the Chief Financial Officer at the company, and SGA, Strategic Growth Advisors. They are our investor-related advisors. They are also on call. I think to begin with, I would like to thank and congratulate all our stakeholders, investment bankers, and business partners for helping us achieve this milestone of getting listed on the Indian Shop Exchange. Since, obviously, this is our first earnings call, I would like to take you through Glassdoor Systems' journey, business overview, industry opportunity, and This is a growth strategy, followed by which we can talk about the financial findings of the first quarter, and post that we can jump into the Q&A. We have also uploaded the investor presentation deck on the stock exchange, and I'm sure everyone has had a chance to go through that, right? So, let me start by introducing the company briefly. Glassfall Systems has been operating via Facade Solution Providers, and we have been operating in this industry for more than two decades. Our business has started in 2002 and was founded by Mr. Jawahar Indrajani, who is the chairman of the company. So, it's been almost now 24 years for us in doing this business. Let's start by introducing what we do exactly. We are, as I said, facade solution providers. So, facade is everything on the exterior of the building that you see today. Our major product is obviously aluminum frames with glass that you see on a lot of commercial buildings. But our expertise is expanded into everything on the external building envelopes. So, we have capabilities to design, manufacture, and install not only aluminum and glass, but also railings, lures, ACP cladding, stone cladding, any sorts of rain screen cladding, windows and doors. So, expertise of our company is to provide turnkey solutions for everything on the external building envelopes. Obviously, this is a premium segment. We define the skylines of the city. So, we are an important trait to the developers. It is only after we finish that the developer can start his handover procedures and also get his fire NOCN occupation certificate. So, in that sense, we are a very important trait. We define the aesthetic of the building. We also need to make sure that the functional requirements of the building are met by the product that we put onto the building. So, because it is the external space of the building, it is subjected to all natural elements. So, when we design façade, we take care of the fact that the façade is going to be subject to air, water, acoustic performance, thermal performance, building movements, seismic or earthquake movements. So, all of these natural elements, the facade has to cater and fight and accommodate the worst natural elements. So, we are heavy on engineering, we are heavy on manufacturing. This industry is very niche in the sense that every project is different and we engineer for every project from the ground up. We are operating in three business verticals today. The first business vertical is the domestic facade solution. On the domestic facade, we are working with the grade-A developers in the country today, where our nature is turnkey, turnkey jobs. So that means, as I told you, we do everything from the beginning. We do the engineering, we do the manufacturing, and we also do the install. So, we work closely with the developer. All our contracts are through the developer, and our focus predominantly on the domestic side is to do non-residential real estate. So, all of our order book today on the domestic side is commercial real estate, where more often than not, it is already a leased out property, and the developer is building to cater to a particular demand of lease, and we are executing the job. So, that is our first business vertical, which is domestic facade. We are a pan-India company, so we have presence around the country, but our major markets are Mumbai, Pune, Ahmedabad, Bangalore, Hyderabad, Gurgaon, Noida, Salt, Tier 1 cities is where we, is our focus markets. The second business vertical that we are in is the international facade business. Here, our job scope is that of doing the engineering, doing the manufacturing, and then only supplying the goods as a ready-to-install product around the world, right? So, our clients in the international business are people like ourselves, facade contractors in U.S., in Australia, and elsewhere in the country who hold the main contract. So, they do the install, but they buy the product from offshore. So, we come in and we engineer and supply the product to them as a ready-to-install product, and they install on site. So, it's a purely product supply sort of a business where B2B product supply, where obviously margins are slightly better and we don't hold the execution risk of projects. We started the business in 2022 with U.S. and today we are operating in the U.S. and in Australia. We are also exploring new geographies. As I take this call, I am sitting in Canada in my hotel room, and why I am here is to basically try to develop Canada as a country where we could possibly export panels into. I am also heading to Israel next week, which is another country that we are exploring very closely to expand our international business. This is the second business vertical, which is B2B Product Supply. The third business that we are in is Penestration business. Penestration, for easy understanding, is doors and windows that you see in residential projects. But we operate in the premium segment here, where we are doing ultra-luxury projects and ultra-luxury residences. This is led by My brother Amit, who is also on the call today. He is an architect by qualification, and here we are doing very niche projects. We have types of companies in Europe and all around the world where we import the engineering, we do the local assembly, and we do the local installation. So, the engineering is basically with partner companies based out of Europe, and we have exclusivity with a lot of companies supplying products into India, fenestration products, very high-end, and we do the manufacturing and we do the install. So, here, there are two client bases. One, traditional client base was very B2C. So, because we were doing private houses and residences, so it was a B2C sort of a business model. Now, that has migrated a little bit into B2B, because now we are seeing that in the country, there are multiple luxurious projects that are coming up that demand the best window products available in the world. And this is the market that we are increasingly catering to. So, while the B2C will continue, we see that there is a B2B element also that is coming up here. So, you have the domestic turnkey facade vertical. You have the international product supply. And then you have the fenestration, which is a high-end window, very niche. Obviously, higher margins, lower volumes, but higher margins. Very niche fenestration business. So, these are the three verticals. That we operate out of. In terms of our product portfolio, I have already mentioned to you earlier, we do everything on the exterior of the building, and we also have products that we have listed on the international EPD system, which is our sustainability plate, where we see that a lot of developers today are becoming very conscious of the sustainability angle, and we have products. We have our own product that we have listed on. We have third-party audited and listed on international EPD system, which says that our products that we put on to the building are much more sustainable than the global average values. So, while we do everything on the external, we have a huge sustainability play where we are ahead of the market in terms of our having our products registered. We are a Mumbai-based company. So, office is in Lower Corel. Our manufacturing is two and a half hours away from Mumbai City in an industrial area called as Ville Baghaar Man Rao. It's an ownership land partial in MIDC. It's a 1 lakh square meter land area. What we have developed with the recent expansion is around 32,000 square meters. And we are building up our own glass processing unit, which I'll come to in a bit. So, right now, we are a Mumbai-based company. All the design offices, all the central operations are run through the Lower Perel office, and all the manufacturing is done through the Ville Vagad factory, wherein in the same land parcel, we have only developed around 30% as of now. We are developing the glass processing unit, which is going to add maybe another 25% or so. So, that land, as of today, even with the future expansion of glass processing unit, is around 55-60% occupied. So, there is good and enough room available for us in the same piece of land to expand further. Right now, our capacity is around 130 panels a day, and we have four dedicated production lines with a lot of people working in the factory. All our CNC machinery, which is for cutting, notching, drilling, is all from Germany and Italy, so very top of the line. Our blazing pumps are from Graco, USA, which is, again, top of the line. Our entire sheet metal factory is with Amada and Japanese machinery, so the infra that we've put in is very high-end in our factory. It is the best available in our industry, and we have fairly automated operations through the factory floor. We have 400 kilometers of conveyors, and we have around 350 odd workers working, of which around 120 are on our payroll. The rest are contractual workers. So, we also have a test facility that we have made in the same piece of land. The test facility is basically to put up all the facade products before it goes on to the building and actually test it to real-life situation. So, we do testing for air and water leakage. We do testing for seismic or earthquake moments. We do testing for structural load. We do testing for building moments, that is inter-story, that is a vertical moment. We do sway, which is a horizontal movement. So, before, one is to do all the mathematics on paper, and one is to actually put it on a test lab and test it out for real-life scenarios, right? So, we do have a test lab in-house. We are the only ones in the country to have this as FASAD fabricators, and it is a third-party lab accredited from NABL, which is the certifying body for all Indian labs as third-party labs. So, our manufacturing setup is world-class. We are also expanding and doing the backward integration for which we have raised the primary money. Obviously, the construction is underway for that. What we are desiring to do is do our own processing of glass, which we are today doing from third-party entities. So, obviously, for us, this is more control over supply chain. And also, there is a bottom-line saving for us because we are going to be vertically integrated to that extent. So, the monies that we raised for the primary on account of the glass processing is already being put to use where the construction is underway. The entire project cost was 80 crores. We have raised 50 crores through primary, and the rest was through internal accruals. In terms of client base, in the domestic segment, obviously, we work with the creme de la creme. So, companies like Barmanet, Prestige, Keraja, MBC, Lodar, these are the kinds of clients who we deal with. On the export side, we now have customers in the U.S., which is Reflection, Window Wall, and WinPro. That is our major client in the U.S. And we have clients like SRG Global in Australia. They are also fairly big in Australia. So SRV Global and Multiplex are the two clients that we have in Australia. Overall, we have completed around 158 projects. 158 projects since our inception, and in U.S. and Australia, today we have around 15-16 projects that we have completed. Our strengths are that obviously the business model is diversified into three business verticals. Our capacities are fungible, so it is the same factory, it is the same design team, so tomorrow if an opportunity presents itself, the company is flexible to address that opportunity in a particular segment because our capacities are interchangeable or fungible between the three business verticals. We have a strong client relationship. Obviously, a lot of the business that we do is with repeat clients, which I think everyone knows on the call. So, very relationship-driven business. Yes, we are trying to introduce new clients, and that's the reason that we are all traveling, and we are doing it on a yearly basis, too. But a lot of our client is repeat, and that is also reflection of the fact that we've been delivering quality and timelines over a substantial period. So, a lot of developers today feel very comfortable with continuing business relationships with us. Obviously, our design, engineering, and manufacturing are amongst the best in the world, and we spoke about it. The softwares on design that we use are, again, top of the line available in our industry. So, in terms of infra and people availability, I think we are well poised for future growth. We spoke about sustainability and also experience management. Obviously, my father is a veteran businessman. He's been in business for the past 40 years. He acts as a good guide for us in Glasswall. I, myself, I have more than 12 years of experience in Glasswall. I am a civil engineer by qualification, and today in my capacity, I lead the entire operations of the business. So, overall, we are a very nice business. We account for, let's say, on a project, as a total project cost, for start is anywhere between 7 to 11, 12 percent. So, we are a substantial bit of work for the developer. We hold great leverage over our clients in terms of the nature of work that we do. Company is diversified into multiple business verticals, and our infra is geared up to allow for growth for the next couple of years without any incremental CAPEX. So, this is the business. In terms of the industry opportunity, obviously, there are research reports around this. What I can briefly touch upon is how the business verticals are growing. The domestic facade is poised to grow at a CAGR of approximately 15.9%. Today, it's a 9,000 crore market, and it is assumed to grow at around 16-odd percent CAGR, and reach around 14,500 crores by F530. The global facade market is extremely big. Obviously, you can't even quantify it. But we have in the U.S., the facade market for someone like us who is supplying product into the U.S. is close to 30,000 crores. So, and that is growing at around 6.5% or 7%. So, I think there is huge opportunity in the export segment also for a company like ours who is playing around with a China plus one model and where we see that all these countries want to actively de-risk themselves from being 100% dependent on China. So, we see that there is a good opportunity there for our company to keep growing. Penetration is again growing fairly quickly. I think that is growing at 25% CAGR, and it is today a 9,700 crore, sorry, it is a 1,000 crore market increasing to a 3,000 crore market over a period of time. So, what's our strategy for going ahead is doing the same things that we are doing. It is a new journey for us to be listed. So, while we are learning how to communicate and put our story across on the public market, but the basic intent of the business remains the same. It is to keep these three verticals growing, explore new markets on the international side. It is to grow our domestic presence and definitely scale the penetration side of things where we see that there is good opportunity. So, the future growth is to keep all these three verticals growing. The three verticals are very different to each other, but the aim is to maintain a good balance going forward between all three. I think before handing over to the CFO, I would quickly recap the deal that we did at the listing time. The IPO size was 428 crores. The fresh issue was 60 crores. The OFS was 368 crores. The 60 crores is obviously what we spoke earlier for the backward integration of the glass processing unit that we spoke about. One needs to understand that our business is obviously a project business, so we get projects and we complete projects. So, a lot of our revenue recognition and profit recognition depends on project schedules, and I'm sure everyone on the call knows that there is a certain amount of, let's say, a pre-appointment or a delay or a move from initial estimated project timeline So, our business also, because it is project, completely project-based, can move a little bit here and there depending on the project schedule. So, I encourage all the investors today on call to look at this business from a long-term perspective at a yearly level as opposed to quarterly level which could fluctuate a little bit here and there based on the project schedules. While we have been delivering consistent growth on a year-on-year basis and the same is going to happen this year, my only request is to have cognizance of the fact of the earlier statement as to the little bit seasonality of our business where we typically see that the first two quarters are fairly slow and the last two quarters are fairly heavy. So, this trend has been historical and is probably going to continue to be the same. In FY27, we have said this earlier with all our meetings, we are expecting around 25% growth on revenue, and EBITDA margins will be historically in the same range that we have delivered over the past two years. The EBITDAs are, what we are aiming to deliver is around 23% to 25% EBITDA, and 18% to 20% PAT at the consolidated levels. Today, our order book, as on 31st July, is 982 crores, which is the unexecuted order book that the company has on hand. And this is almost twice the revenue of last year. So, this is good visibility for us for the next 18 to 24 months. And a good amount of that will be executed in the balance of the year as well. So, from a visibility standpoint, I think the company has good visibility. We are a strong pipeline. I am trying to develop new markets. We are trying to develop new markets. So, overall, I think from an order book standpoint, the company is very comfortable. And from a margin standpoint also, we are fairly confident that the end of the year will be what we are saying. Because we know that the margins that we have taken the job at are at the same level that we are committing. So, I think that's it from my end. I will probably hand over to Sanjay Stavans, who is the CFO of the company, to just briefly touch upon the Q1 results.

EBITDA for business food at 21.3%. Now, the EBITDA margin were impacted due to a lower contribution from the international business, which is a 36.3%. This typically carried a higher margin and also impacted the overall margin performance during the quarter. Employee cost, there is an increase in the manpower requirement for the expansion and operationalization of the new university, combined with the periodic salary revision led to an increase in the employee cost. In other expenses, basically includes the credit cost which is now being borne by the company in this quarter As per the revised commercial agreement versus ex-factory billing, during the same period in the last quarter, in QI F526, we were supplying the goods at the X worth. So, all the freight costs were won by the same profit of the tax, which is the 17 crore, grew at a lower price compared to the EBITDA, grew less by. This is basically lower income since Q1 FY26, we had a 1.6 crore income on account of the property sale, and during this quarter Q1 FY27, we have a higher depreciation on account of new capacity expansion commercialization. So, basically, this is all from our end. We now open for the Q&A section.

Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and 1 on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and then 2. Participants are requested to use answers while asking the question. Ladies and gentlemen, let me wait for a moment while the question queue assembles. A reminder to all the participants, you may press star and 1 to ask a question. The first question is from the line of Shree Kaunt from Pinpoint X Capital.

Thank you for the opportunity. So, my question is, to what extent capabilities are similar to executive projects in residential and commercial? Because we have residential customers and commercial customers. So, what are the advantages to a synergist to us in this execution of this segment?

So, I will take this question. I think what you are trying to ask is, is the infrastructure from a design and manufacturing standpoint able to cater to residential, commercial, and all these other segments? Is that correct?

Yes, correct. What are the similarities to us company? Because we are catering to residential, commercial, and the hospitality. So, what is the risk to us compared to other players?

Yes. Okay, super. So, I think one is the infrastructure that the design capabilities and the manufacturing capabilities that we have today in the country are much superior than all of our peers, right? So, while everyone is growing, but our infrastructure, for example, we spoke about the test rig. We are the only first-class fabricators in the country to have this. The glass processing unit that we are putting up for backward integration, we are the only ones in the country to have our own glass processing unit. So, from an integration standpoint and a scale standpoint and a skill standpoint, I think infrastructure is a big benefit for us in terms of the value add that we bring to the client. as opposed to our peers, right? The second big differentiation is that we are a diversified business today, where we have three business verticals. Our peers, the grade A peers that we compete with in the domestic market on a day-on-day basis, do not do any exports, for example, and also do not have a luxury penetration arm. So, today our company is de-risked and diversified in the business that we do across the business vertical, right? So, I think between the infra and our business model in itself, we have a distinct advantage over our peers.

So, my next question is, we are in a niche segment, so what are the technical capabilities needed to pursue the new player to make a presence in this facade segment and penetration segment?

The technical capabilities that are needed, is that your question? From a technical standpoint, obviously, as I told you earlier, because we are the external skin of the building, the facade has to make sure that there is no air leakage, there is no water leakage, the acoustic performance is good, the thermal performance of the system It should cater to earthquake. It should cater to building movement. It should cater to difference in temperature. So, from a design capability, what we need to do is that the system that we draw, which has two purposes. One purpose is to meet the aesthetic intent of the architect and developer because they care about how the building looks. The other aspect is to meet the functional requirements. So, our capabilities on design engineering through high simulation software that we have and people and structural engineers and architects that we have on board, what we do is we try to meet the aesthetic intent of the architect as well as the functional requirement of the project through the design that we do of the system. So, that is where the heart of the process is, where the design of the system and the systems that we have in us today is, let's say, not superior, but is the differentiating factor between us and maybe other players.

Thank you. And one more question for export segment. We are not in installation segment, but we are providing previous steps in the before installation. What is the management rationale and why we are not in the installation yet and taking help of other contractors in the US and Australia?

So, the whole idea is that we need to get greater market access to scale. With doing installation also, first of all, it will be a new market for us where the labor laws and the whole ecosystem is different. So, it is opening the company to that much greater risk if we take the installation also, right? The whole purpose of doing export is first to go to various geographies, is to minimize risk on the installation side, and it is also to get greater margin access as opposed to the domestic market, right? So, once you make the goods and it leaves Navasheva, it doesn't really matter to the company whether it is going to the US, Australia, Israel, or elsewhere. So, you can be operating in that much more market and scale up that much larger and quicker if you're only doing a supply business. So, the rationale behind the international business is exactly that.

Sir, one final question. So, what is the expected timeline for TAPEX companies of in-house last process in the United States?

In the next eight months, we are looking at commissioning.

Thank you.

Thank you so much.

Thank you. And I invite our next question from the line of Nirav Bhanshari from Systematics, BNS and AIH. Please go ahead.

Yeah. Hi, Nirav.

Hello. Yeah, hi, hi. Hi, sir. Thanks for the opportunity and congrats on the setup number. So there's a couple of questions. What was the order inflow for this quarter, Brody? And other question was, with regard to the margin, as you said that the international business is due to the Fed cost increase and we are passing it to the cost increases. So, how should we look at it moving forward in this couple of quarters? Was there any delays in this Q1 which will get supplies in the Q2 numbers?

No, that's a good question. So, I'll answer both of it. I think first one, let's talk about the freight because you touched it up and Sunday also spoke about it. See, up until last year, our worst was X-Works, right? So, we had no freight cost at all because the client was taking care of it. It was getting picked up from our factory, so the domestic transit, the shipping, and then the, let's say, local transit in the U.S. was all being taken care by our clients, right? What we have migrated to SENS is a DDP, which is a delivered duty-prayed sort of a model, where all the freight cost is now borne by us. So, why we did this is, first of all, to help our clients in the sense because with the war, the volatility of the shipping cost was too high. But while we did that to extend some sort of assistance to our client, we have a complete pass-through on this. So, whatever is the cost of freight is a complete pass-through to my client. So, we are not opening ourselves to risk on any sort of volatility on the shipping, but what is definitely happening is because there is now an increased shipping cost, which is part of our revenue, and an equivalent part of our cost as well. And what Sanjay mentioned earlier is because there's an as-par increase in revenue and cost, there is no real impact on margin, but the percentage of margin is lower to that extent, right? So that is what has happened. Going forward, I think container costs are going to cool down. So the add-on revenue on account of this would be fairly minimal, I would like to assume. And today, let's say in this 107 crores of revenue in the first quarter, around 6 crores or so, 6 or 7, just give me a second. Yeah, 5.5 crores was actually freight. So, if you adjust the freight down on the revenue and the cost side, the margin obviously increases by around 1.5%, right? Right? And also on the Q1, there was a sale of, Q1 of last year, there was a sale of property for which capital gain was recognized as other income. So, net adjusted, all of these, we are exactly in the range of the margin profile that we delivered on a yearly basis last year. Right? So, the margin hasn't deteriorated at all to that extent. It is at par with what we have delivered over the last financial year and what we are committing to deliver this year. From a new order standpoint, I don't think there is any order of substance that has come in the past three months. There are a couple of jobs that we are very close on, which would come on to the company very soon.

So, we have declared that we have got a certain couple of EU clients in the US market as well as the Israel and China. So, any, let's say, we are getting any RFQs from them?

Yeah, yeah, I'm traveling for the same reason I have, I'm meeting today, I was in U.S., I'm in Canada right now, and next week I'm in Israel, is to kind of discuss and try to close on jobs that we've been quoting on. So, that's why I say that I have greater confidence that there are jobs. Obviously, on the domestic side, it's huge. I'm talking purely on the international side, that we are very close to clicking a couple of jobs on these new markets that we are trying to establish. Thank you so much.

Thank you. The next question is from the line of Sunil Jain from Nimal Bank Securities, Private Limited. Please go ahead.

Yeah, hi, Sunilji. One is recognition of revenue from a P&L standpoint in terms of how we do it, and one is our payment terms, right? So there are two different things. Let's start with the payment terms. Payment terms is a milestone basis where we get paid advances, 10 to 15 percent. I'm talking a generic payment term across all across the domestic sector, right? We get paid on design submission, which is around 10 percent. Then we get paid on material delivery on-site. So, let's say it's a 50-floor building. If I deliver material of two floors, I get paid for two floors. I don't have to wait till I deliver the entire material. So, it's a pro-rata sort of a payment cycle, right? So, advance, design percentage, around 10%. Then on material, we get paid around 55-60%. So, overall, which is my major cost, is the material and manufacturing, right? We get paid on material delivery up to 75-80% of the job, right? Then balance 15-20% is installation and handover. So, this is how the payment flows. On the invoicing side, we raise tax invoice again on these milestone basis. On the revenue recognition side, we follow the percentage of completion method where the budget of the project and the cost incurred on the project determines what the revenue recognition is. So, for the P&L revenue is a percentage of completion. For the payment and invoicing is this milestone-based agreement that we have with the developers in the country. For export, I bill when the material leaves my factory. So, I raise an invoice when the material leaves my factory and I get paid 60 days from the invoice date. So, by the time the goods reach, let's say, my clients, I'm already paid for it. So, this is how we do it in all the business verticals.

Yeah, well, understood. Second thing about fret, you said that now the fret is included in selling price. Yeah. But you also said that duty paid is also included in that. I mean, if suppose last year when the U.S. imposed duty, that was not part of your expenses, but now if suppose anything comes, then it will be part of your expenses. Yes, that is true. So, what could be the experience, how do you expect if suppose any duty comes now from U.S.? Pass-through, I know. All of this is a pass-through for me.

The company doesn't have any risk of any changed duties or even,

sorry, shipping to that extent. Yeah, but will that have any impact on the demand side from the U.S.?

I can't say that there is no impact on the demand, but I don't think that U.S. has any other choice, because obviously all of this tariff thing is not really spurring up domestic manufacturing, right, Because no one is willing to put in that capital in this country, and then they don't have the manpower also at their disposal to start entire manufacturing. I'm talking for my industry, right, specifically for my industry. So they don't have that manpower or the will to invest the capital to start manufacturing. So, when that is not happening, and the product is still coming from offshore, because the import percentage hasn't dropped as a volume of goods, it is nothing but inflationary to the final consumer, because even my client is passing it through to the developer. So, yes, demand overall of construction is going to get a little bit slower, I assume. I feel that. But for now, I think it's such a big market that for us, where we are very small in this market, it's not going to be too much of a big deal.

Excellent. One more question relating to, you said that there was some delay in delivery of the export business. So, will that miss the decision?

There is no delay of delivery in export business. Project schedule is determined that in Q3 and Q4, I have three projects that I have to complete which is going to be on the floor of export. So, there is no delay per se. There was lesser jobs. The jobs that we had was not on schedule on Q1. So, Q1 and Q2 don't have a lot of export business in Q2. Now, you will see quarter three or quarter four, because the schedule is for me to start from now.

So, the review group guidance.

So, I have interrupted in between, Mr. Sunil, I would request you to please speak to me with your name.

The last question is.

Thank you. I will invite a next member who pays a covered idea from ISA Securities Committee. Please go ahead.

Thank you for this opportunity. I just wanted to know about the average life cycle of a contract. So, what is the time period from which you receive the order and then what is the return?

It is 18 to 24 months typically. 18 to 24 months typically is the turnaround from order receipt to completion of order.

How is the revenue loan throughout the period? How is the revenue? Loan throughout this 18-24 month period, so the majority of the revenue recognized later half or in the year half?

No, see again, as I told earlier, it's a project-based business. As the project demands a certain schedule, we as a company try our best to manage the timeline of the project Along with the existing work, right? So, ideally, you want to have, you know, a balanced level of work throughout the year. But necessarily, that does not be absolutely true for our business, but sometimes projects go one or two months here and there, right? It's finally construction. So, what we try to do is we manage, try to manage our capacities to make it sort of linear throughout the year. So, give or take a couple, maybe a month or two months, year or there, typically the projects are always on time. So, there could be blips here and there, but overall, over a span of 24 months, I think the project completes. It is obviously different for different verticals also, like export is typically within 12 months, because I don't do any install, so the timeline is a little bit shorter. On the domestic side, it is longer, at around 24 months, but we also do the install.

So, what is the difference between the margins for export and domestic verticals?

I don't think I can give you that kind of a straight answer, but yes, our peers are aware that the export and the penetration are higher margin verticals for us. So, there is a fair bit of difference between domestic and export. Okay.

Thank you. Yeah. Thank you so much.

Thank you. The next question is from the line of Nathik Mutham from NL Alpha Fund. Please go ahead.

Hi, sir. Thanks for taking my question. For my first question, if I look at, if I look at all companies, you know, PNL, What are the longer-term, looking at, say, pre-COVID levels to, you know, right now? What I observe is, you know, the revenue has more or less been at, say, pre-COVID levels around 350 crores. And at that time, at that scale, the margins were, you know, 10-11% to go take. While today is where we stand at 450 crores, the margins have, you know, gone up 20% plus. So, what I wanted to understand from you is, has something fundamentally changed in the past couple of years? Are we doing something differently, which is doing the Patshaya markets, or, you know, just wanted to understand this list?

No, this is a great question, so I will answer that question. A lot of things have changed since pre-COVID, right, to now what we are doing. The first major change is that we have introduced the export and fenestration vertical, which is scalable and at a higher margin, right? So, obviously, there's an impact of this business verticals to the resultant margin of the company. Also, what we realized was pre-COVID, we were very heavy on residential projects on the domestic side. So, domestic projects, and this is an extension to the earlier question, have a larger life cycle in terms of their completion time, right? And, of course, the developer makes and sells and makes and sells. As opposed to what we are doing today, on the domestic side is completely commercial, where a tenant is waiting to occupy, and the timeline for turnaround of the project is much lesser. So, whenever the timeline is lesser, the realizations are faster and you can understand and imagine that the margins are better, right? So, the entire pivot from a residential heavy order book on the domestic side to a completely commercial order book has also impacted our margins along with the business vertical diversification that we have done. One more important thing that has happened is that we have aggressively tried to improve our contractual terms post-COVID. So when the commodity prices went up in COVID, we did not have any pass-throughs on materials, right? So we suffered on account of that of increased commodity pricing. And what we have achieved post that is that today all our contracts across all business verticals have passed through on aluminum and glass, which is the major raw material for us, right? So, to that extent, any hit on margin that was coming on account of commodity price increases is no longer coming to us because it's a pass-through for all our clients across business verticals. We also consolidated our manufacturing. We were, you know, we had two, three factories around the country. Now, we are operating from one factory. So, there was benefit of cost and scale that happened because of consolidation. So, I don't think it was any one particular subject, but it was a combo of all these three, four things that we've done, that now you see that the margins are sustainable, and today we are a debt-free company, right? And going forward also, we are very confident of sustaining this because the business model will remain the same.

That's very excellent. Sir, one more question in addition to this, you know, if you could help us understand what was the share of exports in 2018-19 people will end, what is it today? To see how, zero, okay.

F518 was zero, our exports have started from 23 onwards, that's why 23 onwards.

Great, sir, that's it so much, sir, thank you, sir. Thank you.

Thank you. Ladies and gentlemen, in order to ensure that the management is able to address all the questions from the participants in the conference call, we request you to kindly limit your questions to two per participant. If you have a follow-up question, please rejoin the queue again. The next question is from the line of Sagar Danna from LKME Ventures. Please go ahead.

Hi, sir. Hi, sir. Hi.

So, on a full-year FI 27 business, what percentage of revenues do we expect from exports, registration, and the domestic for our business?

Can we give forward guidance in this detail?

Because we mentioned 25% revenue growth or something like that, right? So, if you can just give a broad breakup in terms of...

I can definitely give you this flavor, that it will be in a similar breakup of, let's say, range of revenues, as comparable to last year. And what was that? That was around, I think, 40-45% or so was domestic, 42% or something was international, and I think some 10-odd percent was penetration. Sanjayi, correct me if I'm wrong, please.

Yeah, yeah. For financial aid by 26, 49% was domestic, 45% was penetration.

And I think we will be in the same ballpark.

And then in the year, financially, FY25, it was a 47% domestic, 42% international, and 12% connection.

Got it.

So the intent is, you thought of to remain, the intent is from here in the same balance.

Yeah.

Sure. Sure. Second thing you mentioned about how freight costs is now part of the numerator and denominator, right? I don't think there will be a huge impact on the margin because a lot of jobs that we are doing now are high margin. So, maybe this is a downward thing, but the other jobs will be accommodated. So, I don't see a huge play. Maybe a few blips here in this. Maybe. I can tell you that we'll be in the same range. 23-25% EBITDA and 18-20% long pat.

Good. Thank you so much and all the time. Yeah. Thank you.

Thank you. The next question is from the line of Saneel Jai from Nismal Bank Securities, Paris Limited. Please go ahead.

Yeah, thanks for this opportunity again. Yeah, hi. Yeah, yeah. You said that...

Sorry to interrupt, Mr. Cindy, you're not already.

Yeah, yeah. Just a second. See, just I was asking about the market and your markets here in India. Market, you said, but how much is your market share? In light-to-light market, which market can be very big, but what the job you are doing, in that, how much you have the market share?

We will be, I think, around 6-7 percent. Domestic market.

Yeah, the other players are equally like you or they can be bigger or smaller?

We are second largest in terms of revenue in the domestic area, right? The largest one is probably 100 crores above us. So, there are three or four guys whom we compete with who are doing revenues above 200 crores. And then, obviously, the tail from 100 to 200 crores is quite huge. They are also the organized segment. Anything above 100 crores, we consider to be players in the organized segment. But typically, the 100 to 200 crore players don't compete with us directly. Anyone who's doing about 200 crores, and therefore, three, four guys in the country who do it, they are our direct competitors.

Okay. And on the international side, out of the total export, how much is to the U.S. and how much is to the Australia?

I think this year will be completely to the U.S. We don't have any current Australian job. Majority is to the U.S., yes, right now. Last year there was some revenue, last year there was some revenue to Australia, I think around 30-odd crores was to Australia. Rest was all U.S.

10 crores is from Australia, S.Y. don't get it.

Okay, that's great. Thank you very much.

Thank you so much.

Thank you. The next question is from the line of Vedic Parval from Hemp Securities. Please go ahead.

Hi Vedic. Hi, thank you so much for taking my question. My first question is regarding the GPU unit that we plan to install. So, by then, do we expect that the facility will be operational, and how much EBITDA margin improvement do we post the glass processing unit that we have in-house?

Yeah, so we are under construction as we speak. The orders for the machine grease have gone out. I think the estimated timeline from today is around 8 months for starting to commission, and the expected movement on the bottom line is around 1-1.5%.

Okay, and my second question is regarding what kind of order book trajectory do you foresee for the next two years?

The idea for the company is to maintain at least two years of clear visibility because our turnaround time, as I said earlier, is around 18 to 24 months. So, as long as I can see and have a two-year visibility, I'm very comfortable. Anything above that is just me overcommitting in terms of my order book, right? So, the idea is to grow at 23% CAGR, 20-25% CAGR on the revenue side, and is to maintain an order book to cater to that sort of growth on the top line. Okay. Thank you so much. Thank you.

Thank you very much. Ladies and gentlemen, we will take that as the last question, and the draft concludes the question in the last session. I now have the conference over to Mr. E.F.A.N. K.A.N. and R.A.N.I. for the closing comments. Thank you, Anubhati.

Thank you so much. I think, thank you everyone for coming. I think it was a good session. It is our first session. So, it's great. I look forward to meeting you guys every quarter and talking about the business. It's a very interesting time for us. And we hope that all of you all see value in the business and continue to remain invested. Thank you so much.

Thank you, members of the management. On behalf of IFL Capital Services Limited, we conclude this conference. Thank you, everyone, for joining with us today. And you may now just connect to me. Thank you.