INOX India Limited (INOXINDIA) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the INOX India Limited Q2 FY27 Earnings Conference Call, hosted by ICICI Securities Limited. As a reminder, all participant clients will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need any assistance during this conference, please signal for an operator by pressing star followed by zero on your touchtone telephones. I now hand the conference over to Mr. Mohit Kumar from ICICI Securities Ltd. Thank you, and over to you, sir.

Thank you, Sarah. Good morning. On behalf of ICICS Securities, I welcome you all to the Q2 FY27 earnings call of INOX India Limited. Today, we have with us from the management, Mr. Deepak Acharya, CEO, Mr. Pawan Logar, CFO, and Mr. Sunilawati, Head Investor Relations. We will begin with the opening remarks from the management, which will be followed by Q&A. Thank you, and over to you, sir. Thank you.

Thank you so much. Good morning, ladies and gentlemen, and a warm welcome to Anoxin Limited Q2 and H1 FY27 earnings conference. I hope you had an opportunity to review our financial results and investor presentation. I will begin by sharing an overview of the global business environment, our performance across the key business verticals, and the important developments that are shaping our growth trajectory. Let me touch upon the global business and macroeconomic environment. As you are aware, the ongoing West Asia conflict has created additional challenges for the global economy, particularly in logistics and supply chains. These developments have made the operating environment more complex for everyone. We are at Inox India and navigating these challenges with focus on execution, operational efficiency, and customer commitments. Despite this underlying demand, drivers across industrial gases, LNG infrastructure, aerospace, space applications, scientific research, and semiconductor manufacturing remain very encouraging. These sectors require increasingly sophisticated cryogenic system, precision engineered equipment, and reliable manufacturing capabilities. We believe these requirements create opportunities for us. We continue to strengthen our position as a trusted partner for complex cryogenic equipment and engineered solutions, mainly due to our manufacturing infrastructure, technical expertise, and expanding presence across domestic and international markets. Let me now throw some light on our current order book. During the quarter, we have achieved a significant milestone. Our order backlog cost 2,200 crores, making the highest level in the company's history. Of these orders from customers in the space sector comprise about 1,100 crores, reflecting the growing traction of our offerings in this segment and being a partner of choice for the customers. Also in the September quarter, we have issued a mega order for sub-coolers from US space company. We are planning to manufacture these at our Sauli facility. This is an important development for our business and further strengthens our position in a specialized cryogenic equipment. Let me now take you through the key developments across the business vertical, starting with industrial gas solutions. Our industrial gas solution business continued to see a healthy demand for equipment used in storage and transportation of industrial gases. During the quarter, we received orders worth approximately 60 crore from domestic players covering transportation equipment, frame tanks, and large storage tanks. These orders reinforced the continued demand for reliable gas handling infrastructure. We have also made significant progress in liquid cylinder manufacturing. Following the revamp of our manufacturing unit, production has ramped up meaningfully with more than 1,000 finite liquid cylinders dispatched in the first half of FY27, worth more than 25 crores, as against 1,600 in the last year. We are particularly encouraged by the progress of this business, as we are currently the only player with liquid cylinder manufacturing capabilities. Positioning us uniquely in the Indian market. We believe the enhanced production capacity will further strengthen our ability to cater to growing customer demand. Additionally, we secured repeat orders from the disposable cylinders from the U.S. market, along with repeat orders for dot cylinders from the existing customers. Repeat orders from established customers reflect the importance of product quality, delivery reliability, and consistent execution. I will now update you on the traction on the LNG solution vertical. LNG solution business continues to benefit from the growing requirement of LNG transportation, storage, and fueling infrastructure. The current geopolitical environment has also reinforced the importance of energy security and reliable storage infrastructure. We are seeing increasing traction in the LNG transportation, particularly in the semi-teller segment. During the quarter, we secured a combined order of 40 plus LNG semi-tailers from various customers. These orders demonstrate continued demand for LNG transportation solutions. We also secured orders aggregating approximately 14 crore from the domestic customer for storage tank, vaporization system, and unloading pump skits. Additionally, we received an order from a leading city gas distribution company for LNG fueling station. Along with orders for vertical tanks, vaporizers, for the glass plant at Varuj. Another encouraging development is the emergence of LNG-powered railway applications in India. Following the recent launch of LNG-trained by Indian Railways, we have received four related orders of which two have been dispatched. We view this as a promising beginning of new application area and a opportunity to build our capabilities as the market develops. These developments demonstrate the breadth of our LNG portfolio, spanning transportation, storage, fueling, and emerging applications. Let me now take you through the development of cryo-scientific and advanced engineering solutions. Our cryo-scientific business continues to build capabilities in highly specialized applications that demand engineering procedures, stringent quality standards, and ability to operate under complex technical conditions. During the quarter, we secured an order worth approximately 35 crores for the specialized cryogenic equipment for another important approach in India, scientific research ecosystem, the upcoming Laser Inferometry Gravitational Wave Observatory project being established in Maharashtra to detect gravitational waves produced by cosmic events such as collisions and black holes and neutron stars. It will become a part of the global network of gravitational wave observatories. Significantly improving scientists' ability to locate and study such events. The project is in collaboration between the LIGO Laboratory USA, the Indian institution including RRCAT, IPR, and IU-CAA, beyond its scientific importance. LIGO India will strengthen India's capabilities in precision engineering, advanced instrumentation, ultra-high vacuum technology, while providing opportunities for Indian scientists, engineers, and students to participate in frontier research. During the quarter, we also secured an order base worth approximately 12 crore from a European customer for prefabrication of TCWS piping, which are currently under manufacturing. For Inox CVA, these projects demonstrate the relevance of our engineering and manufacturing expertise in demanding technology-intensive applications and support our ambition to participate in increasingly sophisticated scientific infrastructure projects. Let me update you on the beverage cakes. Our beverage cake business has continued to demonstrate a strong momentum during the first half of the FY27, supported by increasing traction from international beverage customers. During Q2 FY27, beverage cake sales grew approximately 4.46% year-on-year. Our beverage cake order book also recorded strong growth, increasing by approximately 155% year-on-year in Q2. These trends reflect encouraging demand and the progress we are making in expanding our presence with global beverage companies. A significant development during this quarter was our entry into the three-year global supply agreement with a leading global bravering company. The stated requirement for 2027 exceeds around 4,10,000,000 across 22 countries. This represents the customer's overall requirement under the agreement and not the volume exclusively allocated to us as supplies are expected to be shared among the multiple vendors. Our current allocation relates to 2027. Given the three-year nature of agreement, we see potential to pursue additional business in 2028 and 2029, subject to customer requirements and further applications. We are also targeting opportunities across European market, Vietnam, Singapore, as we work to expand our international footprint. Customer approvals continue to be a key focus of our growth strategy. We have made progress in securing approvals from leading global leverage companies with four out of five players targeted having approved us. Securing approval from the remaining players remains an important milestone as we continue to expand our presence and pursue opportunities in global leverage market. We are seeing encouraging traction from the repeat customers and remain focused on strengthening customer relationship, expanding our addressable market, and meeting the stringent quality and delivery requirements of international beverage companies. We believe the combination of growing demand, customer approvals, and our manufacturing capabilities provide a sound foundation for the continued development of beverage cake business. Aerospace and space sector opportunities. The aerospace and space sector continue to represent significant long-term opportunities for NOCVA. These applications require highly specialized cryogenic systems, stringent quality standards, and exceptional reliability. Our order book already reflects the growing importance of space sector with approximately 1,100 crore of orders from space sector customers. They received an order from the leading Indian aerospace player for vertical storage tank, and also engaged in discussions regarding additional requirements. We are actively engaged with several companies across India's emerging private space ecosystem, and see the potential for further opportunities as this business expands their launch capabilities and infrastructure. Another important development is their work. On two large kettle-type cryogenic sub-coolers for leading U.S. aerospace company launch infrastructure. One sub-cooler is designed for liquid oxygen and the other is for methane, using liquid nitrogen as a cooling medium. These systems are critical to the handling of cryogenic propellants in launch infrastructure. The engineering challenge is to achieve the required thermal performance at extremely high flow rates. While ensuring complete separation between the oxidizers and fuel systems. Manufacturing the sub-coolers involves precision deep hole drilling, automated orbitality welding, hydraulic tube expansion, control tube bending, and stringent cleaning procedures. Quality assurance includes helium leak testing, boroscopic inspection, and thermal cycling. We also dispatched two tanks for the U.S. Aerospace customer. This is an important execution milestone and reflects our ability to manufacture and deliver specialized equipment for demanding international applications. Overall, we believe our experience in advanced Karajani system, together with our engineering capabilities and manufacturing infrastructure, positions us well to participate in the growing requirement of global aerospace and space industries. Let me talk about new opportunities emerging in the semiconductor space. India's semiconductor manufacturing ecosystem is creating new opportunities for specialized infrastructure, process support system, and precision engineering solutions. During the quarter, we secured a key order and comments execution for the initial piping scope as a leading semiconductor manufacturing facility in Olera. We also submitted bills for larger project scope, which are currently under consideration. While these large opportunities have not yet translated into confirmed orders, we believe semiconductor manufacturing represents a promising area for the application of engineering and project execution capabilities. We will continue to engage with customers in this sector and evaluate opportunities that align with the technical strengths and long-term business objectives. I'm also happy to share that we recently have inaugurated an Orbital Welding Skill Excellence Center under the name SEMI-Orbit at ITM-SLS Barola University. This institute will provide advanced welding skills to welders, which will help them to become experts in orbital and IR welding, and will make them capable of working in semiconductor fab infrastructure development teams, which require high degree of precision and training. When we have such a strong order book, our preparedness in manufacturing, execution, and delivery must also be spoken about. As our order backlog grows and the complexity of the project increases, our focus remains firmly on execution, manufacturing, productivity, and timely delivery. During September, we dispatch major equipment for the Bahamas project along with the first two tanks of the U.S. aerospace customers and equipment for Uletha and Grey Tobacco projects. We also dispatched five times for the Bahamas project, reflecting the progress made on these international deliveries. Our teams continue to work closely with customers and logistic partners to manage the production schedules, transportation, and delivery commitments. Our priorities remain disciplined, execution, efficient working capital management, stringent quality control, and consistent delivery. As we convert our growing order backlog into revenue, maintaining these priorities will be essential. To sustaining customer confidence and supporting the profitability growth. Looking ahead, we remain encouraged by the range of opportunities emerging across all our categories. Our strong order backlog is very encouraging. We are also making progress in developing a new application area, expanding international customers' relationship and strengthening our manufacturing capabilities. We will continue to navigate the external environment with focus on operational discipline, customer commitments, and efficient resource utilization. With that, I will hand out to our CFO Power Logger to discuss the financial performance of Q2 and H1F527 in greater detail. Thank you very much and wish you all a very happy Diwali and prosperous new year ahead. Thank you so much.

Thank you, Mr. Acharya, and good morning, everyone. I shall have a summarized financial snapshot for the quarter and half-year ended 30th September 2026. For Q2 FY27, total income stood at INR 467 crores, representing a growth of 26.6% on YOY basis, driven by strong execution across key segments. If it has to rate 100 crores, Up by 10.8% YOY, reflecting improved operating efficiency and better product mix. The EBITDA margin for Q2 FY20 stood at 21.3%. The profit after tax was Rs.66, growing 7.8% YOY. The paid margin came in at 14.2%. For H1 FI27, total income for the half-year stood at 849 crores. This is a record high half-year performance. The performance reflects healthy performance across industrial gas, LNG, and crime scientific division. EBITDA for H1 was 189 crores, also the highest ever half-year EBITDA. The EBITDA margin in H1 FI20 was 22.3%. Paid for H1 stood at 127 crores. The paid margin was 14.19% in H1 FY27. As of September 30, 2026, our order backlog scaled a new peak of INR at 2,268 crores. This reflects sustained order inflows and revenue visibility for the quarter ahead. Of this, 72% is from exports, reaffirming our strong global presence. Our total fund availability as on Q2 FY26 stood at Rs. 384 crores, providing ample headroom to support future capacity expansion, ongoing project execution, and other strategic initiatives. That concludes my remarks on the financial performance for the quarter and half year. I will now request the moderator to open the floor for questions. Thank you so much.

Thank you very much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may enter star followed by one on their touchtone telephone. If you wish to remove yourself from the question queue, you may enter star followed by two. Participants are requested to please use only handsets while asking a question. We will wait for a moment while the question queue assembles. The first question is from the line of Samir Thakul from Ambit. Please go ahead.

Samir, your line is unmuted. You may ask your question.

As there's no response from this participant, we'll move on to the next question from the line of Mohit Sarana from Monarch Network. Please go ahead.

Good morning, sir, and congratulations on strong top line numbers. My first question is with respect to the profit margins. If we take out the other income, our EBITDA margin is now around 19.5%, which is roughly to 30 basis points down YOY. And you mentioned in the notes that it was because of the product mix, logistical costs, and other reasons. Can you just give some more explanation on whether this is a new normal for the company, or we will revert back to the earlier range of 21-22% EBITDA margin, excluding the other income? That is my first question, sir.

Yeah, very genuine question you asked. Margin leap is a mix of freight and strategic pricing, and is not structural, okay. H1 EBITDA is 22.3, within the expected range. Forget about the Q2 FI20 term, but if you consider the H1, it is free, we are still within 22.3. And the balance sheet is debt-free and 384 crore net cash. I think this is definitely because of geopolitical uncertainties and some freight issues which has ramped up in last quarter. And I don't think we will have severe impact because of this going forward. So we will be within our range going forward on the margin side.

Understood, sir. So that gives us some comfort on the margin recovery. So the next question is with respect to orders, with respect to ISRO, if you can give some understanding on when this ISRO order can be, you know, when the tender will be published and when we can start bidding for the tenders. And secondly, more on the U.S. space company side, what kind of opportunity we expect. I mean, we already have some orders in hand which we are executing, but what the order potential we see in the next one or two years on the U.S. space company.

We see the aerospace and space industry is very lucrative going forward, and a lot of such challenging projects are coming worldwide. As far as the question of U.S., we have more than around 1,100 crore order booked from the aerospace and space industry backlog we are having. And we will be delivering those equipment by next year, March. That is 2028, March. Okay? So, we are within our expected timeline and delivery as required by the customer. As far as your request for ISRO, we have bidded for the semi-cryo engine test facility and we are awaiting the results of the outcome. And for the third launchpad, as you rightly asked, we are also chasing with ISRO for a long time. And certainly this is not in our hands. But we hopefully another few months, the tender will be out now. And we are preparing in advance for this.

Understood, sir. One last question, if I may squeeze in. With respect to the LNG, small LNG terminal orders, which you earlier mentioned, we are bidding for some southeast island, and that as well as Andaman-Nicobar. Any update on those?

Yeah, we are very positive about the Andaman-Nicobar tender. That also will be likely to be opened up. Technically, we are qualified now. On commercial side, maybe another two to three weeks, there will be some clarity, and we have already bidded for Indonesia and other projects. Let us see how does we progress on this matter. But we are very positive for the projects.

So can you share what will be the amount of the orders, any order size for ISRO as well as this LNG, mini LNG terminals?

Yeah, the ISRO size, what is publicly presented is around 3,850 crores, the entire turn launch pad. And because of the, this was like one and a half year or two years old price release, ISRO has released. But because of the changes in the pricing and other things, it may slightly go by 10 to 15%. So, on the FSRU project, yes, it's a very big project for us. But I am not in a position to tell you the exact numbers.

Understood, sir. Thank you so much for this and all the best for your future executions. Thank you.

Thank you. The next question is from the line of Ishwar from iThought PMS. Please go ahead.

Sir, hi, sir. Thank you for taking my question and congratulations on the good topic about this quarter. So, you said that the U.S. customer was around 1,000 sows share of your order book. So, how much do you expect to be executed by FI-27 and how much by FI-28? And also, in their last earnings call, now that they are public, they announced a massive space port in Louisiana. So, are we getting any RFPs for that particular port? Thank you.

The total order which we have received from this U.S. aerospace customer, around 10 to 15 percent will be completed this by end of March, that is by 27, and balance will be spilled over in the next year. In the next year, we wish to complete the assignment, but at least 80 to 90 percent will be definitely done in the next year now. And whatever you ask that, this is only a first requirement which they have given us. There are three, four more products which are in the pipeline, and definitely we have very good chances because of our high-end engineering, customer support, and whatever the products we have delivered so far, the quality requirements are very stringent. So we have demonstrated our capabilities. So we have very good chances going forward.

Great, great work. And also, my second question would be regarding the beverage tax division. Last quarter, you had guided the utilization to rise to about 50-60% by the year end. So, are we on track for that?

Yeah, we are on track for the real targets, what we have considered. The beauty of this business is it lasts so many days or months. We are constantly changing for approvals with the major breweries, and now out of five, four approvals will be assumed. On the 5th approval, audit visit is likely to be planned in the party now. The visibility for this product now, and the market is improving, the cake requirement in the world market is increasing, and we are seeing a good traction for this product. As our product is approved wherever we have sent the samples and the post-orders we have received, so people are happy about the product and the delivery of our equipment.

Great, sir. Good to hear. Thank you. That's all the questions.

Thank you. The next question is from the line of Samir Thakur from Ambit.

Please go ahead. As Samir, your line is unmuted. Please ask a question. Please check if you're on self-mute.

As there's no response, we'll move on to the next question from the line of Vinil Shah from Dalal and Rocha. Please go ahead.

Yeah, thank you for taking my question. My first question is on the margins. So, we have highlighted that one of the factors which affected our profitability growth was aggressive pricing strategies. So, but given the complex and specialist manufacturing that we do, should we have better pricing power and stronger margins? So, I wanted to understand that why do we need to resort to such aggressive driving strategies and also that for the new significant other wins that we have had from this global aerospace player, have we followed a seminar aggressive driving strategy? That's my question.

Good question. See, we, as you know, we manufacture two types of main products. One is standard equipment, another is non-standard equipment. Standard equipments are industry standards, where we have reasonably good competition, whereas non-standard tanks or non-standard equipment are custom-built equipment, which require very specialized engineering and execution and project management skills. So definitely our margins are better in the non-standard tanks, but standard tanks, yes, we do have to compete with the worldwide players in the market. And we don't say we are very aggressive on competitive pricing to win strategic market share because we want to maintain our market share in variety of markets. So sometimes we have to work that way. And this is only maybe it's not a regular feature of ours because there are some equipment which has come up into this quadrant. But going forward, we don't see that it will be severely affecting our margin. And if you see our H1 EBITDA margin for the FY27, we are still 22.3% as compared to our earlier price, earlier expected range, what we have declared. So we don't think that we have any adverse impact because of this. However, you know very well that the product meets, the geopolitical uncertainties, the increased logistic cost, all these are playing a vital role in today's scenario. And this is a fact we have to live with.

So for me, here's a broad idea like from our ordered backlog, how much will be the standard order and what will be the complex manufacturing order?

So our out-of-total backlog of around 2 to 6-8 rows, around 30 to 40 percent will be our standard, whereas balance will be of custom-built products.

Thank you, sir. And, sir, just a small question on the semiconductor opportunity. So, viewers told us that there is significant growth opportunities, but could you just help us understand, like, what kind of opportunity are we targeting with the players, and by when shall we expect meaningful contribution to the revenues?

Yes, semiconductor, we see as a big opportunity going forward, because as you know, that India, around 1.6 crore cordless semiconductor are already approved by the government, and 12 companies have already started their work. And the majority of the work is happening in Gujarat, especially Dolera and Sanand, so almost 70 percent is happening in Gujarat, and we are very proximity to both the places. So we are very much positive about the progress of these projects, and being very close to the projects, we can give good service to the semiconductor projects. The first project which we have issued is again for the Dolera project of Tata Electronics, and we have already started our work, and we have already bid for two bigger projects, especially for the ultra-high-priority gases and conventional bulk gases. So, result will be known in another four to six weeks. So, let us hope and cross our fingers. Okay, sir. Thank you. Enjoy.

Thank you.

Thank you. The next question is from the line of Mohit Chook from Shoblam Research. Please go ahead.

Hi, sir. Hope I'm audible.

Yes, sir.

Sir, congratulations on good service numbers. Sir, in quarter two, we have seen a good order inflow. Can you give us an idea of order book pipeline visibility over the next two quarters? And would we be able to get such kind of inflows in coming quarter?

Yeah, order inflow is good. And especially in this quarter, we have issued order book of more than 1,000 crores. With this, our backlog is more than 2,200 crores now. And yes, this is a very bulky and a lumpy order, I can say, in this quarter. That does not mean that we will continue at the same pace going forward. But at the same time, we are working on very complex and very bigger projects. So, if something comes up, even if we can cross these numbers as well. So, let us hope that we get good orders in coming future and coming quarters. And certainly, we will inform you once we have some positive indications on this.

Okay, good. And so, my next question is on, do you enter into partnership with way out to be not effective? Are there any significant developments?

Come again, I could not hear you properly.

Sir, we entered into partnership with Wayout to build a micro factory. Are there any significant developments in that business segment?

Yes. Wayout is a Swedish company which is dealing with micro factories. Where these micro factories are basically a 20-foot container, which encapsules all the equipment required for the water treatment, and it gives clean, hygienic, potable water at the outlet. And you can fill up any sort of water, maybe river water, sea water, ground water, or lake water, or tap water, whatever it is. And you can change the parameters of the water through the PLC control, depending on the chemical composition, or maybe some micronutrients addition, or pH value addition, or a change you can do. So, this is a very interesting project for us, and we have started manufacturing the first micro-factory at our Savli plant, and recently the scientists or the experts from the way out factory are in the factory. So, we are working on how it can be made quickly, because there is a good amount of requirement that has come up from Africa, Mexico, and so many other places, and even Middle East and all that. So hopefully going forward if you see that shortage of clean drinking water because of the rain shortage this year and because of people are going for a clean drinking or maybe I can say experience like we see. In the cinema business also, the old days, people were seeing in normal theatres, now they shift to the multiplexes. Similarly, this water is also having a good experience that you can have good taste of water with pH values and other things. And this is, you can shift that container from one place to another. It can manufacture around 20,000 litres of water in a day. So it's quite sufficient for around 10,000 people. And that's the advantage of this. And we see very good growth prospects, not only in India, but the rest of the world.

Oh, okay. Go ahead, go ahead, sir. Thank you, sir. Sorry, my last question.

I'm sorry, sir. Could you please return to the question queue?

Oh, okay, sure.

Thank you so much. The next question is from the line of Bhavika Singhvi from Nivisay. Please go ahead. Am I audible?

Yeah.

Yes, ma'am.

Yeah, thank you for the opportunity and congratulations for a good set of numbers. So, so basically, as you mentioned that the Q2 margin decline was temporary driven by the high off-site cost and the strategic pricing. I just wanted to understand as our order book is mostly around the like around 1000 plus crores on the space side, and it's more on the US market. So, I wanted to understand, does we will see the same impact going forward? And also, if you can give the, like, understanding on the margin profile over, like, different segments and how much margin we generally aim at the space sector, particularly on the export side, though we receive a premium there. Just wanted to understand that even after the strike cost and the pricing pressure, what are our margin, like, we get from the space orders?

I think you asked a very pertinent question here. And regarding this US space order, this is a very complex equipment. It is not like this is the first time perhaps the product is being designed for such type of application because of the changing demand in the market for heavy payloads getting launched. So, margins are relatively better as compared to standard products, that is one. Secondly, here our scope is up to the FAS delivery, or X-World delivery, rather, not FAS, X-World delivery. The freight cost is in customer scope for this order. So, we don't see any challenges in the freight cost for this project. And going forward, yes, there are plenty of such opportunities coming not only in the U.S., but in many other countries, and even in India. And pertaining to your question of margins in different sectors, definitely, yes, we have major three sectors, industrial gas, energy, and cryosentity. The margin varies from IG to CST on a higher position. So, more complex, more critical the project, the margins are better, the simple 100 times has a less margin.

Okay. So, we are confident that we will be able to achieve the guided 21 to 24 range of margins, which you have said.

So, let us see. Hopefully, yes. But present situations are so difficult to predict anything. But we always hope for the best and work hard and work backward to see that we achieve our progress.

I got it. And also, in your initial commentary, you mentioned about the sub-coolers you added in the portfolio and you got a customer for that. Because this is the first time we have been shifting from the storage tank to the sub-cooler, which is a high-end product. Want you to understand what is the order size of this particular project and how we see it? Sorry, scaling in this particular product and entering more critical products in the space side.

This is a very specific product, I can say, and we got almost 16th sub-cooler order, 12 for locks and 4 for methane, and this is, I mean, the design is very critical for this product. And this is required because whenever you are filling the cryogen into the propellant tanks, the temperature gets increased because of time lapse. So here these sub-coolers will sub-cool the liquid, maybe oxygen or methane, to a lower temperature, and when it is getting transferred from one place to the propellant tank, at the propellant tank, the temperature should be maintained. This is the function of these sub-coolers. And I think going forward, such equipment will definitely be required for all other projects as well, and because the volume of these liquids are very, very high, earlier only smaller satellites were transferred to the space, so small quantity of liquid were handled, but here the huge quantity of liquid has to be handled in a very small time, so very high flow rates are required, and sub-cooled liquid is required. So, it's a very challenging opportunity for us and for the world, I can say. But we are very confident that whatever designs we have made, we have got our initial approach from the customer and from the third-party agency.

Okay, but can you, like, mention the order value we receive for this product?

Out of the space, order backlog, it's around 60 to 70 percent.

60 to 70 percent to the sub-coolers only? Okay, got it. That's all. Thank you so much.

Thank you. The next question is from the line of J.A. Negandi from Ambit Capital. Please go ahead.

Hi. Thanks for the opportunity. I hope I'm audible. Yeah, yeah. Thank you. Great. So, I just wanted to understand our contractual liability on the dispatch of large tanks, since you mentioned that higher freight costs affected our margins. So, is our liability till the Indian port or till the US port or any other country we're exporting to?

So, what are the two orders which you are talking about? One is the U.S. Aerospace customer and the other one is Bahamas. Our Bahamas order was a phase delivery. So, it was just keeping the tanks across the port or near the jetty. And for the space customer, we have on expo spaces. So, all transport and logistic costs to their account. So, we are quite safe into this, at least for bigger projects. Okay, understood.

So, my next question is on the Dolera Semiconductor project. So, wanted to understand the size of the initial order that we have gotten, and what could be the potential value of larger orders that we will apply for in the future. And also, does this scope of work apply similarly for OSAT and fabrication projects, or does FAB have a larger opportunity in size or vice versa?

So, very, very nice question you asked, and like you are learning about semiconductors, we are learning about semiconductors. The exact opportunity of semiconductor is very difficult to quantify at this stage. The only one thing in our mind was to enter into this sector. So even if it was a small order, the numbers are very small to mention here perhaps. But it was our entry into that market. And with the work of last one and a half month, I can say, I'm confident yesterday also I visited those guys and they said your team is doing a fantastic job on these projects. So hopefully we should get good orders from this Dolera fab. And as you asked for other projects, yes, the quantity of piping, which is there almost like 500 kilometers or 600 kilometers in the first phase of Dolera Fab, the quantity is not that high in other projects, such as OSAD and other things, but definitely they require cryogenic equipment as well as some piping. And even not only this, but there are like a lot of data centers which are coming in. So these data centers also require a similar type of piping. So we are entering into area, which is, I can say, very strong in such expertise, which is required. And what I have seen in the last so many months now, the availability of skilled manpower is not available in this sector, and to initiate that, we already started a semi-orbit skill center near our factory, and we will be supplying at least 30 to 40 welders per month. So, just to give you an idea for a place like semiconductor industry in Singapore. There are around 5,000 welders are required. So that is the volume of work which is intended into such type of businesses. So we are in the process of developing these welders to take this challenge.

Understood. Any update on the data center cooling prototype?

Data center cooling prototype, we have just designed it now, and it will take around 6-8 months for conceptualizing finally.

If I could just squeeze one more. You have gotten a strong foothold in the aerospace market on the export front. Can you help us understand how the opportunity pipeline is in the Indian market, or how should we look at it going forward?

The Indian market is also growing very fast. The few, as you know, there are the startup companies are there, mostly four or five startup companies which are working. We have issued orders from all of them, maybe small quantities or bigger quantities. And our initiative of working with them and helping them in engineering and establishing the specification as we have worked for the second launch pad. So everybody is quite inclined to work with Anox India. And whatever the inquiries have been quoted by these private small startup companies, we have backed all the orders. And from the ISRO, yes, we are waiting for the final RFQ to come now.

Okay. Thank you so much. All the very best.

Thank you. The next question is from the line of Avatood Joshi from TriVantage Capital. Please go ahead.

Hi. Thank you for the opportunity. Am I audible? Yeah, yeah, yeah. So, my question is on the data centers. So, if we look at what's happening in the U.S., these data centers will be generating power from LNG, and pipelines are being laid out for that to the data centers, and, of course, they will need cryogenic tanks at the end to store the… Gas for the contingency. So, are we looking at any orders from that side because that CapEx looks huge into US what's happening? What is happening in that area if you can throw some light on that?

If you see this supply of power to the data centers, it's very important because you require 100% uninterrupted power supply to the data centers. Okay. And, and as you see, we have supplied similar. We have our products ready for such projects, and we are trying to enter into this as well now, and we will be definitely getting some resources. Hopefully, this is the most effective way of handling the power requirement in the data centers. Understood, sir.

And second question, as we mentioned about the pipe cost, out of this 2,200 crore hour order book, how much of it is XWorks?

Any split on that side? XWorks? Yes. I don't have that number. But whenever it's like our 60% business is to export market, and if you see the 2,200, almost 50% is to these two, three major customers, where either we have exports or a phase delivery, and balance, when we have that, we have back-to-back agreement with them. And if suppose we have in our scope, and if the prices are increasing, we definitely talk to the customer and resolve amicably. Understood, sir. Thank you. That's it from my side and all this.

Thank you. The next question is from the line of Bharat Shed from Quest Investment. Please go ahead.

Hi, congratulations, sir, and thanks for the opportunity. I've been listening to you that whether in the space or data center or say we call and water treatment, then cake for this delivery. So our opportunity size and now the new vertical we are entering. So, that is opening a large opportunity. So, can you give some color that in the next three, four years, how do we really see our company and what are the challenges to meet without losing our EBITDA margin range what we are writing?

Okay. Very, very good question and I think very futuristic. And hopefully, yes, we are working on various new areas or sunrise sectors as you rightly said. And we are quite confident because we have the solution for these sectors, okay? And this is not the first time we have been doing such work. We have been doing it for many such projects, such as Eater project, the Launchpad project, the Caribbean project, so many projects. We have done it first time. And it is our engineering capabilities and manufacturing excellence. And the timely delivery of product has really put us on a forefront in all the sectors of what we're doing. And that is how it is, because our name is now, among the few which you can count on your fingers, that it's one of the leading companies in the cryogenics and providing solutions to the customer requirements. So that is the beauty of our company. And certainly, yes, going forward, the business, as we are saying, we are growing at 18 to 20 percent minimum. But if some bigger opportunities come, our growth can be much faster than this. And hopefully, we will be a very prominent player into this market now.

And so what are the, I mean, that kind of a capex or funding requirements that require, and what are the major challenges, I mean, to achieve those kind of, I mean, and second thing that, yeah.

Yeah, the capex, whatever is required, we don't have any constraint. We are a debt-free company, and net cash is also very good numbers are there with us. So we don't depend on any other funding requirements. So we do major funding from our own internal accruals. So that is not a problem at all. And regarding the facility, you are asking about the space and other things. So, we have already expanded our facility to Sauli two years before. We have another 50% space available at Sauli. We recently have acquired a land at Kandla near the port where the construction work is going on, which will be finished most probably by March of this year. So, for the next year, we have full-plage availability of product available from this plant as well. So, going forward, whatever expectation we are having or the order book we are having, We are very, very well placed from the manufacturing perspective. The only challenge we have seen is slightly on the people front, availability of skilled manpower and all that, but to cater to that, we have started our own training center, so where we train every month around 40-50 builders and fitters to take care of the requirement, so we are in line with whatever we want for the future.

Sir, any room for automation? Of course, this is a critical nature, so I understand.

Almost our 60 to 70 percent of our welding activities and fabrication activities is automated right from the beginning, not today. And where all opportunities are there, we are going for a higher level of automation, even digital methods to control, and the AI tools which are required, and maybe the IoT tools for the machines for controls and everything. To see that, we have minimum of skills which are required for the production. At the same time, we depend upon the data available and it's more transparent from our side. So that the operations becomes very easy for understanding and maybe for regular work by all the people in this.

With your permission, may I ask one more question?

No, please return to the question queue.

Okay, fine.

Thank you. Participants, please limit your questions to only two questions per participant. The next question is from the line of Pravesh Kochar from 4Line Capital. Please go ahead.

Hi, thanks for the opportunity. Just wanted some update on the launch vehicle LVM3 bidding, where that is heading, did we have the site visit, and how do you see the competitive landscape there?

Yeah, the ISRO team visited our site, we explained them everything, but still they are in their own evaluation method, and maybe it will take some time, I suppose, it's not so fast on track. But yes, they have stood and seen that Inox is having capability to manufacture this equipment.

Got it. Understood. Any sense of the competitive landscape there? Because some of the other players are already manufacturing other launch vehicles. So, do we have a decent chance here?

Presently, they are doing the technical competency only. So, we are now qualified to that extent, though it is not formally declared so far. But looking to the discussion when they were here, and earlier also we have submitted for such things earlier. So that time also we were qualified. The other players, definitely, yes, they have a lot of money from the perspective of CapEx addition, but from experience in cryogenics, they are lacking, so we have better chance into all the data.

And the second question is, the sub-coolers now that we are, you know, going to be supplying to the US-based customer, is the opportunity for some of those heat exchangers in other non-space applications as well? Because that was not a big part of our business earlier. Is that something that you see opening?

There are plenty of such opportunities available, but we restrict ourselves to where we have our competency and where we have. You can say expertise. So, mostly we will focus on the cryogenic type of equipment only.

Yes, I meant to ask the cryogenic heat exchangers, which are obviously cryogenic, right, because it's liquid oxygen and methane subcooled. Are these applicable in non-space industries as well or this is limited to just space?

Normally, no. No, not required.

Got it. Okay. Thank you, sir. Thank you.

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

Hello, sir. Congratulations on the great stuff number. I just wanted two or three updates. I just want an update on the MRI machine that we had a prototype made for and the LOX machine for submarine.

Yeah. On the MRI, yes, we have the first machine, and that is under trials now. And the UI for five machines is on the world. So once that is released, I think we'll get that number. And working with other companies, we already started working with other companies as well. So this project is low, but we are improving on the feasibility of these products. And on the oxygen tank for the AIP system, we have delivered this product to L&T, and it is under final testing. Once that final testing is over, the next course of action will begin for the next submarine, and the tanks will be produced.

Okay. And so one more question. Can you explain the legal order which we got recently?

So this LIGO order is basically a device which is like, it can detect the earthquake in advance. Can you hear me?

Yes, sir.

It can detect the earthquake in advance. So this is a facility getting developed at Hingoli near Nandir in Maharashtra. The big order has been issued by the L&T for around 4000 crores. And they are doing a lot of civil work there, but cryogenic equipment supply, some cryopump supply, and many other installations, I mean, manufacturing it to our scope, they have not yet decided upon who will do the work at site. We are ready for that. Let's hope that some more orders will come on to this, but this is a very prestigious project. And the one which is available is in Lego USA. The similar replica will be done for here with the help of RR-Cat from in-law.

So is this a single project or will there be more future projects on the same side?

Because there is some, you know... The circuit, or what they say, like the earth is divided into some zones, and two or three such equipments are sufficient to detect any sort of earthquake all over the world. So it is not a good thing. This is one of its kind, you can say.

Okay, okay. That's it. Thank you so much, sir, and all the rest.

Thank you so much.

Thank you. The next question is from the line of Abhinav Nalavari from ICICI Securities. Please go ahead.

Yes, sir. Good afternoon. Good. Thanks for the opportunity. I just have one question. Half of our order book is from the U.S. space currently. As you mentioned, that, you know, 20% will be executed in FY27, that is the second half, and the remaining 70-80% will be in FY28. So, rough calculation gives me an understanding that, you know, it would be a meaningful contribution in both the second half as well as FI28 in terms of revenue from this space, right? So, given the complexity of this order that you mentioned, I mean, it would be fair to assume that this orders would fetch higher margins. So, is it fair to assume that, you know, going for, and even the threat cost is not in our code, right, it is in the customer's code. So, is it fair to assume that in H2 as well as in F528, we can assume the margins to trend upwards compared to, you know, first half or even F526 EBITDA margins?

Yeah, should be, should be. I understand. Margins will improve because of this order. Understood.

So, in terms of execution, I mean, you mentioned the complexities there. In terms of execution, will there be any challenges or, you know, any surprises that, you know, you can, you may face, you know, while executing disorders, which may, you know, impact the margins? Any risk to that?

No, the risk is like, it's the first of its kind order and very big size of coolers are there. So a lot of imported materials is there into these. Thick forgings are required. Multiple hole drilling is required. Orbital welding is required. Cleanliness is required. So all these areas are very known to us. It's not that something which we are not aware of. Even the designer's perspective, we have designed it very nicely, depending on the time or requirements, and the final design is also approved by our customer now. So, yes, there are challenges, but we are mitigating the challenges for proper planning, understanding the product well, and keeping the good quality material, the interpreted manufacturers, this thing, and training our people, having the trained people from the welding perspective and the disc perspective. So, it's a challenge, but let us see, and we are confident that we have handled several such projects in the past with very complex nature, very smoothly. So, we will do this project also in a similar manner.

I understood it. So, just one more question. You mentioned that there's a prospect of, you know, additional orders coming from this US space. Any rough timeline in terms of when can we expect these orders?

No, exactly this one, but I have heard from the X that he wants to deliver, I mean, launch at least thousand such rockets every year. That means three rockets a day. So, if three rockets per day, one or two launch pads are not sufficient. That's much I can tell you. Understood.

That's right. Thank you. Thank you and happy Diwali.

Thank you, happy Diwali.

Thank you, everybody.

I think we are all... Discussion? No?

Should we take more questions?

I don't know. If you have, you can.

The next question is from the line of Bandhika from BKsha. Please go ahead. Oh, hello, I'm out.

Yes, ma'am.

A little bit.

Yeah. Yeah, so thank you for the opportunity, sir. So the first question I want that out of the approximate, like the space order which we have, what is the exact order value attributed to the major one US customer which we are talking about, with whom we are, like, who is into another three to four projects in the pipeline? If you can share that information.

So this is the first order where we have like 16 sub-coolers and 16 large capacity 1,500 cubic meter tanks weighing up to around 450 tons, which we normally use for oxygen and methane storage. So this is our project which is put together, locks and cooler and the tank is more than 1,000 crores. And out of that, 15 to 20% will finish in this financial year and balance will be shifted to the next year. Maybe we will try to finish by March 28th, but something 10% can shift to next year as well.

So we have to say that 1,100 crores of sales orders coming from one particular customer already, right?

Yeah.

Okay. And also though, sir, like as you mentioned that we are doing three to four projects in the pipeline, though like we don't have, like you can't give the order book size of that, but can you share the time of that opportunity for us? Because as you said that the space order will be bumpy for us. So, I just wanted to understand that going forward, once this customer announced the project coming commercialized, how much size of orders we can expect from this particular customer?

I think the opportunity-wise, if you see, if they have one such launch pad getting developed, and similar three, four launches per launch pad, they will develop in future. So another three to five years, there will be substantially good orders from this customer, provided we deliver the equipment of good quality and in time. So, that is the most critical part of this order now. So, we recently supplied the two tanks in the last month now, and we have almost like every second month or third month, we have dispatches from our place for this project. And hopefully, we will be in a position to deliver as per time and as per the quality requirements. And if that goes there, yes, we have pretty good chances of getting the future orders.

Got it. And so, a lot of private players are also coming in the space side, especially if I talk about the domestic market. So, are we seeing traction from that space? Like, how much orders we are getting? Like, do we having any negotiations going on with those type of players on the private side who are coming in the space sector?

Yes, we are working with all the top five startup private players in India. And we have delivered equipment to almost four of them so far, maybe small quantities or small value. But whatever the projections they are giving us is very large for next three to five years, maybe to the tune of around 2,000 to 3,000 crores put together with private sectors. And it was our initiative that... Right from the beginning, we are having the intention to catch them in, so that we are into the business, and we never know who will be becoming bigger and bigger. So, we are helping them out, and as we have good experience on the second launchpad and experience of developing products for the space sector for the last 30 years, people are relying on our capabilities. So, we hopefully get good orders from this private space sector as well as Government of India's ISRO Department as well.

You got it. And this is the second question I have on the semiconductor side. So, basically, regarding the data electronic order which we have received for the initial small piping order. If, like, not on the opportunity sizes, like, like, someone have asked, but just wanted understanding, like, what other products we can offer the semiconductors, please.

Ma'am, I'm sorry to interrupt. Can you take this offline? We would need to close the call now.

Okay, no problem.

Thank you so much. We take that as the last question. I now hand the conference over to the management for closing comments.

Thank you very much, and for the patience hearing, I hope we answered all your questions. If something is still remaining, you can ask the question in writing to our IR head, Mr. Sunil Navati. We will be happy to answer this question to your satisfaction, and I wish all of you happy Diwali and prosperous new year ahead. And we invite you to our factory to visit if you are interested so that we can showcase our capabilities to you. Thank you so much.

Thank you very much, sir. On behalf of ICICI Security is Limited, that concludes this conference call. Thank you all for joining, and you may now disconnect your lines. Thank you so much. Thank you.

Bye-bye.