INOX India Limited (INOXINDIA) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to INOX India Q1 FY27 earnings call. As a reminder, all participant lines will be in listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Abhinav from ICICI Securities. Thank you, and over to you, sir.

Thank you, Athabha. Good morning to all. On behalf of ICICI Securities, I welcome you all to the Q1 F527 Earnings Call of INNOX India Limited. Today, we have with us from the management, Mr. Deepak Acharya, CEO, and Mr. Sunil Lavati, Head Investor Relations. We'll begin with the opening remarks from the management, which will be followed by Q&A. Thank you, and over to you, sir.

Thank you, Avinuji. Good morning, everyone. I welcome all our stakeholders, investors, analysts, friends to the Q&A 527 Earnings Confidence Hall of Inox India Limited. I trust you had the opportunity to review our financial results. Earning Release and Investor Presentation, which are available on the stock exchanges as well as on our website. Joining me on the call today is our VP Accounts and Finance, Mr. Suzyn Lavardi, who will later take you to the detailed financial performance of this quarter, following which we will open the floor for question and answer session. Let me begin with the overview of the global economic environment. Economic Overview The global economy continues to navigate a dynamic landscape shaped by geopolitical uncertainties, evolving trade policies, and an increased focus on energy security. While global supply chains have become more resilient over the past few years, regional conflicts, tariff-related developments, and fluctuations in the energy market continue to influence business sentiments and investment decisions across the industry. Despite these near-term uncertainties, long-term investments in clean energy, industrial infrastructure, aerospace, semiconductor manufacturing, and scientific research continue to gain momentum globally. These structural growth trends are creating significant opportunities for companies with strong engineering and manufacturing capabilities. India continues to stand out as one of the fastest-growing major economies. Supported by robust domestic demand, sustained infrastructure spending, manufacturing-led growth, and supportive policy environment. Government initiatives such as MEC in India, the Semi-MEC Electro-Mission, the Energy Transition, and the increased investment in strategic sectors are opening up new avenues for advanced engineering companies like Amox India. Against this backdrop, I am pleased to share Q18527 has been another milestone quarter for Inox India. As guided in our previous interactions, we delivered our highest fair quarterly order inflow of approximately 532 crores, taking our total order book to around 1,686 crores, the highest in the company's history. Our export order book now exceeds 1,140 crores, reflecting the growing global acceptance of our engineering capabilities and providing strong revenue visibility for the coming quarters. We also continue to exhibit projects efficiently across all our business verticals while maintaining a healthy balance between domestic and international orders. Let me now take you to the highlights across our business segments. Industrial gas solutions. Starting with our industrial gas solution business, the quarter witnessed several important order wins across the multiple product categories. One of the key highlights was the significant order from the space exploration industry for eight large 1,000 500 km cryogenic storage tanks. In addition, we secured orders for six more cryogenic tanks from the same customer, further strengthening our long-standing association with the global space exploration industry. More importantly, these repeat orders reflect the confidence that leading global customers place in our engineering capabilities. Today, Inox India is increasingly being recognized not only as a cryogenic equipment manufacturer, but also as a precision engineering partner for a global aerospace ecosystem. The semiconductor segment also recorded encouraging progress during the quarter. We received orders for storage and transport equipment for semiconductor manufacturing facilities coming up in Dolera. While these initial orders are relatively modest in size, we believe they represent the beginning of significant long-term opportunities as India's semiconductor ecosystem continues to evolve. Our disposable cylinder business continues to perform well. After crossing the milestone of 2 million cylinders during FI26, we have continued to receive healthy repeat orders from customers across the global market. Similarly, our cryosin and liquid center business continue to gain strong traction in the year. We have expanded our dealer network and further enhanced manufacturing automation, enabling us to increase production capacity to meet the growing demand as industries increasingly transition from conventional gas cylinders to more efficient liquid cylinder solutions. LNG solutions. Moving to our LNG solution business, we continue to witness encouraging development across multiple applications. The decline in the global LNG prices has improved the economic viability of LNG as the transition failed, resulting in renewed momentum in LNG fueling infrastructure. During the quarter, we secured multiple orders from the LNG fueling stations from the customers including subalmati gas, ultragas, and BPCS. We also received healthy orders from LNG semi-fuelers, where we continue to maintain leadership position in the Indian market. Our Bahama's mini LNG terminal project is progressing well. The first batch of large storage tanks has successfully reached the project's right and installation activities are underway. We are also encouraged by the development of broader LNG ecosystem in Bahama with additional catalogue station opportunities coming around the initial project. This validates the success of the first installation and creates further business opportunities for the company. After the Bahamas order, we already reached out to additional orders in nearby islands, namely Alutra and Great Abaco. Exeggation also continues on the prestigious LNG fuel tank project for Kosin Chupia, making our entry into India's evolving marine LNG segment. Coming to cryo-scientific division business, the quarter has been particularly satisfactory. We secured a prestigious order from the firm for the manufacture of highly specialized cryogenic models for one of the world's most advanced particle physics research facilities. This marks our entry into another globally renowned scientific institution and further strengthens our position as a trusted partner for highly complex cryogenic engineering solutions. We also received another important order from ITER France, reinforcing our long-standing association with one of the world's largest fusion energy research programs. These projects continue to demonstrate our capability in delivering highly specialized cryogenic systems for globally significant scientific infrastructures. Beverage cake business. Our beverage cake business continued to make steady progress during the Q1 FI27 as we further strengthened our presence across key international markets. During the quarter, we continued exhibiting orders from the leading global customers while expanding our engagement with strategic bravery partners. We remain encouraged by the traction we are witnessing from our food customer base, including the three Of the world's largest global breweries, Henneken, ABNB, and Molson Coors, which together account for over 40% of the global beer market volumes. We received orders from Henneken India, Hartwell Finland, Quartz 100K, and we also received requests for quotations from Asahi and ECU Chile. In parallel, we will remain focused on expanding our portfolio. Specialized and non-standard cake variants catering to niche applications, we have received orders from Orban, Germany. These value-added products not only enhance our competitive differentiation, but also offer superior margin potential compared to standard commodity cakes. Overall, while the beverage cake business continues to scale gradually, we remain confident in its long-term growth prospects supported by strong customer base, expanding market reach, and our focus on differentiated product offerings. Beyond our core business, we continue to invest in building new growth platforms. During the quarter, we further strengthen our competitiveness more with the receipt of AS9100D Aerospace Quality Certification, making another significant milestone. This certification significantly expands our addressable market by enabling us to manufacture aerospace components for the onboard flight applications. Until now, our participation in the aerospace sector has largely been limited to ground support equipment. With this certification, we are now eligible to supply onboard systems as well, opening up significantly large opportunity within the global aerospace value chain. We are also partnered with ITMSLS Baroda University to establish a dedicated skill development center focused on semiconductor pipeline fabrication and orbital welding. This initiative ends to develop a skilled talent pool to support India's rapidly expanding semiconductor manufacturing ecosystem, while strengthening our capabilities in high-value engineering services. The collaboration also aligns with supports India's semiconductor mission through specialized training and industry-focused skill development programs. We also entered into a partnership with Layout of Sweden to manufacture modular water microfactories in India. These innovative containerized systems are designed to convert multiple water sources into a safe drinking water while significantly reducing the plastic waste. We believe this partnership demonstrates how our engineering capabilities can be leveraged beyond a traditional cryogenic application into a suitable industrial solution. As we look ahead, our record order backlog, diversified customer base, expanding presence across aerospace, LNG, industrial gases, semiconductors, and scientific research, together with our continued investment in technology, manufacturing capabilities, and new group platforms, position us well for sustainable long-term growth. We remain committed to operational excellence, engineering innovations, and creating long-term value for all our stakeholders. Thank you once again for your continued trust and support. With that, I would now like to invite our VP Accounts and Finance, Mr. Sunil Navati, to take you to the financial performance of this quarter. Thank you very much.

Thank you, Vipa, sir, and good morning, everyone. I will now take you through the financial highlights for the first quarter ended 28 June 26. For Cuban FY27, total income stood at Rs. 392 crores, representing a growth of approximately 8.3% year-on-year, driven by healthy education across all industrial gear, LNG, cryocentric solutions, and various businesses, supported by a strong mix of domestic and export delivery. Abitda is 28 rupees 90 crore, registering a growth of 1.4% year-on-year, reflecting continuous operational efficiency and a favorable business mix. Profit after debt, 28 rupees 61 crore, a great performance on a year-on-year basis. As of 30 June 26, our order book stood at Rs. 1,686 crore, the highest in the company's history, providing strong revenue visibility for the coming quarter. Of these, our Rs. 1,140 crore comprised export orders and the scoring for strong international presence and diversified customer beings. Our liquidity position continues to remain comfortable with total fund availability of repeal 331 crore A-138 June 26, providing adequate financial flexibility to support ongoing project execution, capacity expansion initiatives, including the Kangla facility and other strategic growth opportunities. That concludes my remark on the financial performance of the quarter. I would now request the moderator to open the floor for the question and answer session. Thank you.

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 one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Jai Negandi from Ambit Capital. Please go ahead.

Hi, I hope I'm audible. Thank you for the opportunity. My first question is on the aerospace market. Now that we have received a new certification that enables us to supply on-flight products as well, so by how much does that expand our time, to what value, and what products and solutions are we targeting to supply to these customers now?

Yeah. Traditionally, we have been qualified for ground equipment so far. With this certification, now we will be qualified for bidding several projects which are coming up. And as you know, the Indian Space Research Organization is in full throttle to see that more and more private participation is coming up in the industry. And we have been discussing with ISRO and other organizations or other startup companies for various products which we can manufacture. Some of them will be like propellant tanks, which are part of the rocket. Even Indian government has received a UI for LVM3 manufacturing. So with all this, there is a good potential going forward to see that we can manufacture this equipment at an auxiliary. And this certification is the first criteria or the eligibility criteria for most of the equipment to be supplied on the flight. So that way, we are very much positioned well because we have experience of ground equipment, and with this, we are now completing the eligibility requirement with solid financials of our company.

Alright, my next question would be on the semiconductor market. So, we entered into the semiconductor infraspace through supplying tanks, and we have also launched the skill development program. So, you know, directionally, does that increase our time with respect to addressing the semiconductor market in the future? And I also wanted to understand if this skill development program for pipeline fabrication, would it be eventually used in fab plants or OSAT plants or both?

Yeah. See, as you know, we are concentrating all our efforts to see that we grow multifold into the semiconductor business. So, we are supplying equipment to Micron, Foxconn, Tata, Asan Project, Tata Dolera Project, and many more now. And, basically, this cryogenic equipment, the transfer lines for VJ lines, this is one of the capital equipment for this, and the industrial gases which are to be supplied to this is very high purity of the order of 5N or 6N category, we call it. And we are one of the pioneers in manufacturing such equipment. We already supplied earlier equipment to Singapore and Japan. So we have a very good quality setup for us manufacturing such equipment. On the semiconductor pipeline in steel center, while discussing with these major semiconductor complexes, we found that there is a shortage of people into this area, and it is difficult to execute this project without any support of such people. So, whenever we're talking about, like, say, Micron project in Ahmedabad, they require at least 200 to 300 skilled workers to manage this pipeline. So, presently, India doesn't have these skilled people. So, we have started our training the people. Our first batch is also now qualified, and we will be supplying this to most of the semiconductor projects in India, and we see a great potential going forward for this semiconductor pipeline business in India.

All right. Thank you. If I could just squeeze in a small one, our order intake has been pretty strong in the previous quarter, this quarter as well, more than 500 crores. And our press releases suggest that in the coming quarter, also the order intake is going to be strong. So does that feel like, do you feel the need for an upward revision in the guidance that we had given, which was close to 450 to 500 crore of order intake?

Yeah, slightly, see, we normally get, like, many lumpy orders, like what we recently understood from the aerospace company, maybe a few, many LNG terminal orders. So, such type of projects definitely increase our order intake in a substantial manner. And we are quite hopeful that there are many such projects that are in pipeline. And if they all come to us, definitely our growth will be much higher than what we have anticipated.

Okay, sir. Thank you so much. I'll get back into you. All the rest. Thank you so much.

Thank you. The next question comes from the line of Mohit Chug from Shubh Lab Research. Please go ahead.

Hi, sir. Popeye Motivans. Yeah. So, my first question is based on USA entry opportunity, but I remember that the entity which we had non-complete agreement is probably leaving the USA, and we were legally exploring entry into that geography. Any update on the same?

Yeah, we have up to 2028, we have this agreement, and we have started our spread work now, but once it is finalized, we will let you know. So, we cannot enter that market before 2-0-2-8. We are in the process of seeing how we can start this operation.

So, my second question is, in S426 annual report, I read that we are entering into Transformer Great business. Please help us understand the economies of the business in terms of average order value and what margin profile can we make?

See, that was one of the small initiatives, I should say, we have taken. And we got some orders from GE for that, and the transformer tanks we already manufactured. But what we are seeing, even though the margins are better, basically this is a fabrication. So, this does not really fall into our manufacturing capability. And though there is a big market, we may not continue with this business going forward. Okay, sir. Okay.

Thank you, sir. These are my questions.

Thank you. The next question comes from the line of Shubham from ICICI Securities. Please go ahead. Yes.

Congratulations on good set of numbers. And I have two questions. First being, the company has recently signed agreement with Vyaut to explore freshwater infrastructure systems. So, can we expect significant inflows from this going forward? And second would be... The inflow for this quarter was boosted by megawatt in industrial gas segment from a global space exploration sector. So, are there more such orders in pipeline?

Yeah, we tied up this way out of Sweden to manufacture micro factories, which will convert any source of water, maybe river, sea, or the groundwater, or the... This is a wonderful resource for the industrial waste water and converted into safe drinking water. So these micro factories are very special equipment which they have developed and innovated for last three, four years. So they will be transferring the technology to manufacture these and will be manufacturing those equipment. Besides that, we will be using our cakes, which we produce for other beverages, for water circulation, which will reduce the plastic bottle consumption. A huge number and it will have advantage of carbon emission reduction substantially. So this is the project and the first module is under designing is over now and we'll be constructing next six to eight months and it will be tested and tried at our facility. And once this is successful, then it will be manufactured in mass spaces in India, so that we become very competitive in the world. One such a project is already on in Dubai, and people are very happy, that was, I was told. So, going forward, we see a good amount of potential into this, as you see the water scarcity and safe drinking water is always a question mark for our country, and definitely there are 600 million people who are starving for a good safe drinking water. So, we have this opportunity, so we will be taking this forward. Was there a second question on the aerospace decision? Hello. So on the aerospace, yes, we have in the last quarter of the fourth quarter of the last year we received order, the first quarter we received order, and the second quarter also we have now received order, which we already published to the SEBI and other authorities. So, we expect that such orders will be coming because there is a huge expansion all over the world, and even you can see the many startup companies in India are also putting heavy amount of capacity for aerospace. So, we see good potential for such type of orders going forward.

Thank you. The next question comes from the line of Divyam Ketan Doshi from 923 Capital. Please go ahead.

Congratulations, sir, on the wonderful set of numbers and a great order. I just wanted to know how is the LNG performing? As you said, it is at a very slow growing state, but how is it performing?

Yeah, LNG, see what we have seen last few quarters, especially in India, the growth was not that fast. But now looking to the LNG pricing, which is slightly low as compared to the earlier figures, the delta between the diesel and LNG is quite substantial now. With these, even, you see, we have seen a lot of fueling or CDD companies emphasizing on fueling stations. So already we have issued a request for quotation from PSUs, at least two, three PSUs, contributing to almost 2025 stations going forward. And even the automotive industry is pushing it hard. The government of India is pushing it hard. The marine sector is also moving very fast. The shipping industry is utilising LNG on a larger basis. So, all put together, we see a great potential for LNG in coming few years now.

Okay, so thank you. And one more question. The order which we got for a cryogenic tank for a space company. So, who is the biggest competitor for us there?

There is only one competitor which we know that is from U.S. and that is chart industry. So, sir, large tanks manufacturing capabilities are very few in the world.

Okay, and also one last question, sorry to experience. Can you also give us the segment-wise EBITDA?

No, we don't calculate segment-wise EBITDA. We have, we calculate in totality.

Okay, okay, that's it. Thank you so much, sir, and all the best.

Thank you. The next question comes from the line of Mohit Surana from Monarch Network Capital Limited. Please go ahead.

Thank you. First of all, thank you for taking up this question and congratulations on the set of order booking and order intakes. As of today, I think our order intakes are north of 1,400 crores. I am including that 930 crores worth of orders that you won in July month. Sir, out of that total health commons kind of order, how much is from the U.S. aerospace company? That is one question. And second, we have seen the order booking flat for cryo-scientific and energy division. Any color on how are we thinking on ramping up our order intakes on those segments?

Yeah. Out of the total order book, as of today, maybe around... 400 crores will be the aerospace, and balance will be other IG, LNG, and AC. As we see, the LNG and crash center peak, we have bidded for so many projects, and we are just waiting for the order to get realized. Basically, because of this customer delays, statutory regulatory authorities have rules, and maybe... Some impact of this geopolitical situation. The big projects are getting delayed. So, but we are quite hopeful that this will materialize in next one or two quarters. So the growth what we anticipate in LNG and CST will continue as per our predictions.

Understood.

Sorry to interrupt, Mohit sir. As your voice is very low, may I please request you to use the handset?

Sure. Am I audible now? So, sir, when will the bidding for ISRO and the Andama-Nicobar mini-LNG terminal project is expected to start? Have you got any sense from the government on that?

Yeah, the budget for bidding of Andaman Nicobar is by Munfen now, and the RRQ for the third launch pad is likely to get released by again by Munfen.

Understood. And, sir, just one last question, if I can squeeze in. What's the update on the new manufacturing plant that you're setting up? What's the kind of completion date you're targeting?

At Kandla?

Yes.

Yeah, Kandla work is going on in full speed. The civil work is under construction is going on, and we have already ordered PEB structures, and all major machines are ordered. So, hopefully, by December end or mid of January, we should be in a position to start the operations at Kandla.

Perfect, sir. Thank you so much. That's all for my hand.

Thank you. The next question comes from the line of Bhavika from C.J. Shah. Please go ahead.

Hello. Hello. Congratulations on good set of numbers. Thank you so much. My first question is basically on the semiconductor side. So, how much orders are you expecting from semiconductors in going in the future?

So, as you know, we have entered into semiconductor business in just the last two, three quarters now, and whatever the opportunities are coming in, we are 100% grabbing the opportunities. However, exactly the total value of orders This is difficult for me to tell you at this moment, but we have recently received from Dolera project around 30 euros odd plus for the tank, for the storage and this thing, and transport equipment, and we have already supplied to, we have received order from Micron as well, from Dolera project. So, we are not losing any order that much, I can tell you. But how much will be there from the semiconductor is a difficult question for me to answer at this moment. But knowing our engineering capabilities and our manufacturing excellence and our experience in manufacturing such equipment for more than a decade, we are quite well-placed for exhibiting disorders.

Got it. And so, second question I have on the revenue side, like in this quarter, we did below 18 to 20% growth indicated earlier. Is it due to the logistic disruption? And with an order backlog, which we have right now, how much of the current backlog is expected to be executed in FY27? And how much will we see it executed in the next, going forward, 20-29? And along with that, I also, if you can highlight that on the EBITDA margin, which has been declined this quarter from the last year, what is the reason behind it? And is it because of the new facility which we have started, the Sabli facility?

Okay, you asked so many questions, I forgot the first question, but still I'll answer. Okay, so basically the revenue we did 382 crores, and we have targeted something around 410 or 415 crores. And let me tell you, almost like 32 to 35 crore material, which was kept ready for dispatch, could not be dispatched because of several issues like logistics, pricing going up, supply chain, small issues, maybe ships not available, so many things. And we did not want to take any chance that it gets stuck up somewhere. So that was one of the reasons. If we would have done that 32 crores or 35 crores, we would have been in the range of almost 18 to 20 percent range, what we already projected. On the EBITDA margins, you said, we have, though the EBITDA margins are slightly less as compared to the last quarter, but our margins are still 23.5%, which is within the range from 21 to 24% guidance, what we have provided. What was another question then?

The Savli facility about on that, like, how is the operations going there? Yeah.

Sauli facility, the recent new facility, we have already started the civil work, and we have already ordered all the equipments, which are major long-lead equipments, and the pre-engineered building structures is also ordered now. So, out of the total capex budget, you are Sauli or Kandla, you are asking?

Sauli.

Oh, sorry, we have completed everything. I'm sorry, I'm sorry. Both the shops, Krayer shop, and the cake shop is under full production now.

And, sir, the next question is on the high-view power order status. Like, in the previous call, you have mentioned that the next high-view power project is expected to be in six to eight months. So, is anything happening right now on that side?

No, we have supplied the equipment, but the new project initiation is slightly delayed now at their place because of some... Issues may be regulatory issues I was told. So once that is over, then we will, but we have waited for all the projects which they have asked us on that. So we are in quite in line with the requirement, and the products what we suggested to them, they have agreed for the incomplete.

Okay, that's all. Thank you so much, sir.

Thank you.

Thank you. Ladies and gentlemen, you are requested to restrict your questions to one or two per participant. We'll take the next question from the line of Preet Jain from Niveshay. Please go ahead.

Hello? Yeah.

Sorry to interrupt, sir. Your voice is very low. May I request you to please use a handset?

Is it currently audible? Yeah.

Yes, please go ahead.

Congratulations on good set of numbers. So, basically, in the previous call, you stated that the employee cost at your new OPEX, at your new facility, is much larger than the utilization. So, is the new facility now, of beverage care, now being utilized at higher levels?

Yeah, recently, in the first as well as the second quarter, now we are seeing good orders coming in. However, still, we are not fully utilizing the facility to the fullest, because we have capacity to manufacture 300,000 kegs. But going forward, we see the good traction for the kegs market, and our approval and other quality, what we have supplied to all customers. So, we expect a lot of repeat orders in this financial year.

And also, sir, when we are seeing the private space in India, a lot of competitors are coming here, emerging in this space, and they are currently at 200 odd crores of top line. So, are there competition to us? Because we saw two, three private players in India, in Gujarat also one player is coming, and cryogenic OGS listed player also. We are not

afraid of any competition coming in, but let me tell you, these equipments are mission critical equipment, so whenever the customer evaluates the offer, they really see what is their past track record and experience in delivering such products with high quality and during the timeline period. So, we are not shy that we will not be getting the orders because we have a better, you can say, experience into these delivering the products, and definitely people will come to us. Even the eligibility criteria for the big projects are very stringent, and we don't expect that smaller people will enter into this field.

Okay. And on the nuclear side, any updates? We also supplied to some nuclear players. So, any updates on any new order on that side or any growth trigger on that side?

Barring the nuclear fission experiment, which is in the winter, we have not received any order, but we are now concentrating on developing products for the nuclear sector as well. So, whenever we have some good news for you, we will let you know.

Okay, and this 18 to 20% growth is intact for this year, no? Got it. Thank you. Thank you.

Thank you. The next question comes from the line of Chef Saurabh Gujar from ICICI Prudential. Please go ahead.

Thank you for the opportunity, sir. My question is on the U.S. private space order. Given for a few quarters now, you have been declaring orders from that segment, right? And even in July, the exchange filing suggests soon, which includes such order. How big is your overall exposure for you in terms of order book? Maybe as on July, this is the last exchange filing you had, right, from those. And in terms of the execution timelines, are these like more long cycle orders or these are We are still executable, just like the normal business we have.

Yeah, this is, like what you rightly said, the fourth quarter of the last year, the first quarter of this year, the second quarter of this year, we have received orders from this company. And the overall order is more than 1,000 crores from this company. And we are quite well positioned to manufacture this equipment at our Kandla and the new Sauli facility. The timeline for this project is something around. A year to two-year time, so end of FY28, we have to deliver these equipments, because these are very big equipments, and first of its kind equipment. So we have a time of around two years to deliver these products.

But in terms of execution, this would be more like percentage completion, or these are like, as a number of delivered at times?

For this year, it will be on percentage completion, but next year, it will be a dispatch set.

And this one second thing is on the domestic ordering, sir. If we look at overall ordering, it has been strong led by mainly exports, right? But domestic last few quarters, we have seen ordering to be in range on broadly range, right? Sir, how do you see domestic ordering picking up, sir, going from there?

So normally, if you see the trend of domestic ordering, quarter one, quarter two is always slightly slow. So, but there are plenty of opportunities in the market for steel, healthcare, semiconductor, chemicals, the gas industry. So many opportunities are there. So we are hopeful that whatever the 60-40 ratio which we normally maintain in the domestic and international, that will be maintained going forward.

Thank you. We have the next question from the line of Pravesh Kochar from 4Lion Capital. Please go ahead.

Hi, thank you for the opportunity. On the private aerospace business, if there is, you know, expansion from one launch a month to one launch a week, and maybe a launch a day, how does that sort of expand?

Yeah, I told you last time also, perhaps, this is basically a CapEx-based atom and at the launch pad. So, once these total installations are done, I think that will be the capacity for them to launch on a maybe weekly basis or a holiday basis. So, that capacity will be then utilized on a regular basis. So, Maybe for this launch pad where the equipment will be supplied, maybe additional equipment won't come, but there are many other opportunities going forward that then we expand further for different type of equipments which we require. So, like, after the tanks, then they gave us the order for heat exchangers now. So, different equipments can come up over a period of time, and as the growth is happening, not only with this customer, but many other customers in the U.S. Japan and other countries. And even in India, we are seeing a lot of private companies coming in. The aerospace sector is booming, in my opinion, and we are very well placed because of our engineering excellence and expertise in manufacturing and delivering the products in time and our reputation in the market for a reliable manufacturer for the aerospace industry.

Got it. And my second question is on the non-aero IG business. Are you seeing any sort of market share gains in the global market with, you know, the acquisitions and consolidations that have happened?

Yeah, domestic also market. We are seeing 20th opportunity for the steel plants. So many of the steel plants are putting a lot of new equipment. Even there are new players coming in. We have semiconductor. We have... There's chemical companies, petroleum companies, so many, even healthcare. So this will grow like anything, and our growth in this sector may be around 15% to 18% in industrial gas sector.

This is the non-aero IG, sir?

Yeah, yeah, yeah.

Lastly, can you give some colour on the new contract you have got from CERN on the scientific side? Thanks.

Yeah, this is a very special project at the Nuclear Research Centre in Europe. And this is equipment or very special equipment. Very few companies in the world can really manufacture this equipment. This is for particle physics research experiment. So, whatever the protons, electrons, and neutrons will be there, they will be doing the results on these particles, and maybe they will do fragmentation of these particles through these colliders.

Thank you and all the best.

Thank you. The next question comes from the line of Alicia Mahavala from Trust Mutual Fund. Please go ahead.

Hi, so good morning. Thank you for the opportunity. So first, I just wanted to understand challenges we faced in tier 1. What is the update on that? Are we still seeing logistic disruptions? Are we still seeing delays in dispatches?

Actually, our delay in dispatches was basically because of the logistic issues, because in the last few days, we suddenly saw a tremendous increase in the freight rates and availability of ships for the dispatches, especially to the Middle East and even to some other countries as well. So barring that, I don't think there will be big challenges on this, maybe slightly, because even the price is increasing there, the logistics, we have to talk to the customer, and the customer has to agree that pricing. So it takes a little longer time for discussion. So during the last 15-20 days, dispatches are there, that is getting affected. But it will stabilize over a period of time.

So, you are saying that in July also we have seen some of these disruptions continue?

Yeah, definitely. See, in the July first week also we see, or the July whole month also, the prices of logistics. It was earlier, like, if you want to send a container to Europe, it was costing, say, $3,000, $4,000. Now it is $800, $900. So this is impacting this one, but most of the cases, the logistic cost is under the customer scope, but many customers, they defer the deliveries for some time and wait for credit reductions. So that's why the dispatch gets affected a little bit.

Since the first half largely will be disrupted because of these external challenges, are we still confident of doing the 18-20% vote for this year?

Could not hopefully. What do you say?

I think since the first half is largely going to be impacted because of these macro disruptions, are we still confident of doing the 18-20% vote this year?

Yeah, the overall growth, what we see in a yearly basis is we are quite confident. And we are like working hand in hand with them so that we plan properly, we take them into consideration their special requirements. And this is not a long time, we can say, issue. So sooner or later, this problem will get resolved. Maybe if quarter one we are not done, quarter two we'll do like that. So growth-wise or revenue-wise, whatever guidance we have given as 18 to 20%, we are quite confident that we will achieve these targets.

Understood. And in light of the large orders that you have received in the last couple of months, would you start seeing an acceleration in execution from second half of this year or would that largely be for next year?

You're talking about the aerospace orders?

Yes.

Yeah, the aerospace order will start in this third or fourth quarter a little bit, but most of them it will be carried into the next year. Actual dispatch, but we can, on project completion basis, we can take some advantage.

Understood. Okay. Great. Thank you.

Thank you. The next question comes from the line of Ansh Shah from Mangal Kesha Financials. Please go ahead.

Hello.

Hello.

Congratulations, sir, on a set of good numbers. My first question was on the Keg business. So, with the approvals from global jewelry majors coming now, how should we think about the Keg capacity utilization and the revenue scale-up in FY27 and FY28? Like, has the business crossed the break-even point?

And in last, discuss if the Tawdi plant was operating at a utilization of 25 to 30 percent,

what is the utilization currently, and what ramps up? Can you give a timeline, basically, of the utilization as well?

The cake business is a little dicey business, I can say now, with my experience, but we are now approved by major breweries. So, even we have received an inquiry from Asahi as well, and many other like Henneke, Naby Nbevo, and Malsan Cruz, and we also received very good order this quarter from one of the biggest brewery in the UK also. So, going forward, we see at least from 30% utilization to 50% to 60% utilization by end of the year.

Oh, okay, sir. That's great. And my second question is that you've spoken about the multiple future opportunities and optionalities across these different segments like Aerospace, Semicon, Defense, Malin, LNG, Water Solutions. So can you help us understand which can be commercially material over the next two, three years, and what are the long-term future optionalities?

No, all these like marine and semiconductor, all these are opportunities which are like directly converted into business, and we will have some revenue generation from these. As you know, the shipbuilding industry in India is going with a rapid, fast movement, and most of the ships which are manufactured in India will be now based on energy as a fuel. So, the first order which we have issued from Cochin shipyard now, and more and more orders will be coming in due course of time. And on the semiconductor front, yes, we are banging upon this on a very... And we are trying to get each and every order to our, in our hold. And we are also developing products which are required. We, I told you earlier also, that we have started a skill center where we can train the people for building up this pipeline, because there's a huge amount of pipeline in any semiconductor complex. So that is a big business we are looking at. And there is a shortage of people, especially the skilled people for such type of work. And we are geared up to see that we cater to this market as well.

Oh, yes. Thank you so much and all the best. Thank you.

Thank you. We have the next question from the line of Jayene Gandhi from Ambit Capital. Please go ahead.

Hi, sir. Thank you for the opportunity again. I just wanted a quick update on if we have any updates based on the data center cooling solutions prototype that we were developing.

Yeah, we have just frozen our design now. And we will be doing some sort of additional review with some consultants. And once that is done and the clarity is obtained on that, then prototype development will start.

Any specific timeline of the completion and if there is any commercialization plan?

Commercialization should take at least one to one to one and a half year now.

All right, sir.

That was it from my side. Thank you so much.

Thank you. We have the next question from the line of Madhu Agarwal from Agarwal Family Office. Please go ahead.

Hello, Deeperji. Good morning.

Good morning.

This water manufacturing is very exciting with way out. Could you help us understand, you know, What will be the approximate cost, and what is the end market we are looking at? Are we looking at this being primarily to export or for a domestic market? Just to understand a little bit more about what's happening in that space.

Yeah, this is a very innovative product, I can say, and we have tied up with this company of Sweden, called as WayOut, and they have innovated this micro factory. So, the basic purpose of this microfactory is to utilize any source of water and convert into drinkable, potable water. So, that is the idea. Another thing is, like, it can be at the user point of place, where, for example, if you get plastic bottles, it is manufactured maybe in Mumbai and distributed to all over the world. But here in this case, if you have a requirement in Mumbai or maybe some corporate office, this micro factory can be installed at that place, and it can produce almost like 20,000 liters of water every day, so which can cater to almost like 1,000 people in one go. And the approximate price we have not worked out because we are just getting the quotations for different products, but it will be less than a million of rupees for the micro factory and associated equipment required, such as case and dispenser. And the advantage of this water is like you can have addition of micronutrients, pH value additions, or improvement. So depending, you fix the menu what you want, and you can change the water requirement depending on the individual's requirement. So that is what is the basic advantage. So once we develop this product, I think it will be very good in demand. And the best advantage is that you can avoid use of plastic bottles for water storage and use the stainless steel cakes what we produce. So that will reduce the carbon emissions and other things on a great extent. So this is the basic idea of developing this product and making it manufactured in India at a, you can see, competitive pricing, which can be used in India as well as can be exported to globally, even global market.

No, absolutely. That's actually a fantastic tailwind sector to be in. So we think in India we'll be able to do this under 10 lakh rupees, because globally right now it's about a crore to get that micro-faxing.

Yeah.

So, we will try once we develop this model and see what are the instruments and what are the equipment required, we will come up with the pricing and other things. But hopefully, knowing our resources in India and the labor rates and engineering costs will be substantially lower than the European manufacturers.

Sorry to interrupt, ma'am. Due to time constraint, that will be our last question, and I would now like to hand the conference over to the management for closing comments. Thank you, and over to you.

Thank you very much, and thank you for all the participants, and we had a very good interaction, and we are quite confident whatever the guidelines we have provided in the past for the future quarters, we will be in a position to maintain our commitments, and thank you for interest in ENOX India and your participation into ENOX India's further movement and further, you can say, Progress is well appreciated. Thank you. Thank you very much.

Thank you. Thank you. On behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.