Lohia Corp Limited (LCL) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Lohia

Corp Ltd. Q2 FY27 Earnings Conference Call hosted by Motila Roosevelt Financial Services Ltd.

As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ashish Boddar from Motila Loswal Financial Services Limited. Thank you, and over to you, sir.

Yeah, thank you, Sagar. Thank you, everyone, for joining us today in Lohia Park Limited, the CQFY27 on this conference call. We have a pleasure to host Mr. Gaurav Leja, the whole-time director and chief operating officer, Mr. Anupam Agrawal, chief financial officer, and Mr. K.G. Gupta, advisor to CMG, sir. Without ado, I hand over the call to Gaurav Leja for his opening the mask, postage. He can open the floor for Q&A.

Thank you. Thank you. Good afternoon, everyone. Thank you for joining us for Loya Corp Limited's Q2 and H1 FY27 earnings conference call. It is a pleasure to connect with our shareholders and the investor community once again. Following our recent listing, we have had the opportunity to engage with the wider investor audience. We value this engagement and remain committed to building long-term relationships through consistent performance, transparency, and responsible business practices. For those who are relatively new to Loya Court, let me briefly introduce our business. Loya Court is among the leading global manufacturers of machinery and equipment for technical textile, with a strong presence in woven plastic fabric and stat production. Our solutions span the entire production value chain from tape extrusion and circular weaving to coating, printing, and back inversion. With manufacturing operations across India, the US, and Italy, we serve a diverse global customer base across packaging and non-packaging application sectors. Research, innovation, and engineering excellence remain central to our business. Our R&D Center in Kanpur and Digital Innovation Center in Bangalore support product development across machine design, automation, polymer processing, and digital technologies. Our intellectual property portfolio includes 71 patents in India and 56 patents internationally, alongside a growing pipeline of patent applications and design registrations. These capabilities help us develop differentiated machines, offering higher productivity, greater automation, and lower operating costs. Our strategic priorities are to strengthen our leadership in mobile plastic machinery, while expanding into conversion equipment, high-performance fiber equipment, monofilament machinery, and recycling technologies, leveraging our engineering capabilities to broaden our addressable markets. Alongside product innovation and expanding our international presence and strengthening our aftermarket services remain important priorities, our focus on technical support, remote assistance, and operator training enables us to build deeper customer relationships and create values throughout the operating life of our equipment. In the recycling segment, we supplied the RiklaMax 120, the largest machine in the RiklaMax series, with a capacity of 500 kgs per hour, to a key customer in India on August 26th. We also advanced the development of RiklaPro D150, which is a mother-baby extruder series, a two-stage solution designed to improve the quality and efficiency of recycling post-consumer and contaminated plastic waste. We are also pursuing opportunities beyond our core woven plastic machinery business, particularly in recycling equipment and specialized technical applications. During the quarter, we executed a 1000mm specialized stretching line for a key Indian customer to process ultra-high molecular weight polyethylene for the defense sector. We also secured our first order from South Korea, making an important milestone in our international expansion. Our emphasis on aftermarket support, digital services, and customer engagement also continues. During the quarter, we hosted a customer care meet in Udaiput, bringing together our sales, service, pairs, and technical teams for direct engagement with customers. We also participated in five industry exhibitions across India and international markets. Strengthening customer outreach and brand visibility. In addition, our technical training and research center led the BIS Working Group on a new national standard for polylactic acid, which is a kind of a bioplastic, and helped advance ISO 15270-3 on physical recycling to the draft international standard stage. Overall, the quarter delivered strong growth across revenue and profitability, supported by a robust order book. Anupamji will take you through the detailed financial performance shortly. Looking ahead, our focus remains on executing our order book efficiently, strengthening our technological capabilities, expanding our product portfolio, and pursuing sustainable growth opportunities with financial and operational discipline. We believe that our established global presence, strong engineering capabilities, extensive intellectual property portfolio, and customer-centric approach provide a solid foundation for the next phase of lower cost growth. I would like to thank our employees, customers, business partners, and shareholders for their continued trust and support. With that, I would now request our CFO, Mr. Anupam Agrawal, to take you through the financial performance for the quarter and the first half of the year. Thank you. Thank you, Gaurabhi.

Good afternoon, everyone. I will take you through our financial performance for the quarter and the first half of the year, along with key business developments, order book movement, and our financial position. Starting with our consolidated financial performance, revenue from operations for Q2 FY27 stood at 594 crores. Compared with 418 crores in Q2 of financial year 26, representing Y on Y growth of 42%. On a sequential basis, revenue increased by 18% from 503 crores in Q1, FY27. For the first half of financial year 27, consolidated revenue from operations put at 1097 crores. Registring growth of 50%, over 734 crores of last H1. Our performance during the quarter was driven by sustained momentum across all business segments, supported by strong order book execution, and healthy demand across domestic and international markets. Coming to profitability. EBITDA for Q2 FY27 stood at 116 crores, compared with 87 crores in the corresponding quarter last year, an increase of 33%. EBITDA margin stood at 19.4% against 20.7% in Q2 FY26 and 19.9% in the preceding quarter. The moderation in the quarterly EBITDA margin primarily reflected higher commodity prices. However, operating leverage helped keep EBITDA margins resilient as employee costs and other expenses increased at a modest pace than the revenue. For H1 FY27, EBITDA stood at 215 crores, an increase of 76% over H1 FY26. With the EBITDA margin expanding to 19.7% from 16.7%. PAT for Q2 FY27 stood at 77 crores compared with 52 crores in Q2 FY26 representing growth of 48%. PAT margin for the quarter stood at 13% compared with 12.5% in Q2 FY26. For H1, FI27, pads stood at 144 crores. Compared with 69 crores in H1 FY26, representing growth of 108%, the PAT margin expanded to 13% from 9.5% in the corresponding period last year. Moving to our operating performance, domestic revenue grew by 83% year-on-year to 375 crores in Q2. While overseas revenue rose to 218 crores, increasing 6% sequentially and 2% by-on-by. Domestic markets contributed approximately 63% of quarterly revenue, and international markets accounted for 37%. Across our business portfolio, machinery revenue stood at 480 crores, while aftermarket revenue and other revenue contributed to 50 crores and 59 crores, respectively. Machinery accounted for approximately 81% of quarterly revenue. Our outstanding order book as of 30th September 2026 stood at 2000 crores approximately compared with 1778 crores at the end of June 26 and 1030 crores, 1000 crores approximately at the end of September 25. The order book grew 12% sequentially and 93% Y-on-Y, providing strong visibility for the coming quarters. The export order book was also at an all-time high. Turning to working capital, our net working capital cycle as of 30th September 2026 stood at approximately 92 days, compared with 84 days at the end of financial year 26. Customer advances continue to be an important element of our business model, supporting order execution and working capital requirements. As of September 30th, 2026, total borrowing stood at 115 crores, while cash and cash equivalents together with current investments stood at 238 crores. This resulted in net cash position of 123 crores. Net debt to equity stood at negative 0.18 times, while net debt to EBITDA stood at negative 0.57 times, reflecting the strength of our balance sheet. We continue to approach capital allocation with discipline, balancing investment in technology, product development, and operational capabilities with efficient working capital management. Looking ahead, our immediate priorities remain timely execution of the order book. Maintaining operating efficiencies, strengthening our international presence, and expanding our portfolio of differentiated machinery solutions. We will continue to monitor raw material costs, demand trends, and the broader global operating environment while maintaining our focus on profitable growth and prudent financial management. With that, I conclude my remarks. Thank you for your continued interest in Loya Corp. We can now open the floor for questions.

Thank you. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and then 1 on their touchtone phone. If you wish to remove yourself from the question queue, you may press star and then 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Again, to register for a question, please press star then 1.

Your first question comes from the line of Ruchel

Salarka with Pink Wealth Management. Please go ahead. Hello. Hello.

How are you?

Yeah, yeah. Please go ahead.

Yeah, so my question is that since I'm new to this company, I just wanted to understand, you know, when a customer buys products from us, as we have a wide range of portfolio products, like extrusion lines, tapes, circular rooms, so if a customer just buys circular rooms, or if let's say they buy a circular room from us, so they also have to buy extrusion lines and tapes also from us, or they can buy any one of the products, that is what my understanding I wanted to ask.

So, generally, there are two, three different kinds of ordering. So, when it is a project order, when a customer is entering this industry or expanding complete capacities, right, he would order complete tape extrusion line, binders, weaving machines, downstream equipment as well, like, for example, printing or coating or conversion lines, depending on the application. Then there are balancing machines. Suppose the customer needs to add, augment the fabric capacity a little more. Then he places solo loom orders, for example. Right? They are in the tune of 2 to, let's say, 12 machines or etc. And in general, customers buy complete projects from us. Very seldom, very seldom... It comes across that he buys partial projects from us and some balancing equipment from someone else. If he had, for example, converting machines, when we were not operating in a particular segment, that was the case more so. But after offering certain other kind of machinery as well, so customers are generally choosing us for complete project orders. Could I explain properly to you, sir? Yes, sir.

Yes, sir. And so my second question is that on the demand side, since, you know, we have seen that there is a rise in commodity cost, and we are also, is it like we are not able to pass on the price, or like we have already done the contract, that is why we were not able to pass on the price, and because of that, are we going to see, you know, slowdown in the capex from the customer side also?

So, you know, customer capex are not driven by commodity prices movements in the short term. They are normally driven by the end use of the applications that they want to manufacture. Number one. Number two, you rightly mentioned that we are commodity prices. This year, the commodity prices have been on the upwards movement. Because of geopolitical situation more than anything else, but our contracts are generally for a short delivery for a period of six to nine months, during which we do not tend to increase the prices. But if the contract or the lifting of the machines gets postponed beyond a certain time, we definitely go back to the negotiation table with the customer. In general, it's a short cycle execution. So in general, the commodity prices which happen in the short term do not get passed on to the customers immediately.

Answer for the new order inflow which we are taking right now. So we have been able to pass on the price?

Yeah, yeah. So what happens is we keep on revising our price list from time to time. So, just to give you an example, this year, in February and in July, we have approved to revise our price list. So, any order taken after the revision of the price list will be at the new order, new rates, new prices.

And, sir, how long it takes for us to execute the order, the order book which we have, and how do you see the demand as of now in terms of export demand and also the domestic demand? What is your outlook in terms of order inflow also?

So, generally, to answer your first question, generally, the order gets executed within a period of six to nine months. And many other things, it will depend on, you know, readiness of the site, arrangements of the bank finance, etc., which may prepone or postpone the, you know, the delivery period. But by and large, six to nine months is the right time to, you know, we have been seeing that because of the buildup of the order book, some, some orders are getting, I mean, beyond this six to nine period also. This is number one. And what was your second question? Can you just repeat it?

And, sir, how are we seeing the order inflow? Like, are we seeing the demand traction strong in terms of exports and also in terms of domestic?

So, to answer your question, on the exports front, we are today sticking at an all-time high order book of around 500 plus odd crores. So, since we export to over 100 countries in the world, Somewhere or the other, there is need for a back production unit, and we are one of the preferred suppliers to those machines. So, the order traction from the export side is good. As far as the domestic is concerned, domestic market, Indian market is concerned. Currently, We are seeing a heavy traction after two, three years of low investment in this segment. We are seeing a heavy investment happening from middle of last year, and it is continuing. The inquiry and the demand seems to be on the upward side, and we see this traction continuing at least for the next five, six months. Okay, last question, sir.

What is the sustainable EBITDA margin and gross margin we should look?

So, you see, gross margins will be dependent on how geopolitical situations pan out because of commodity prices. The raw metal prices generally tend to keep some inventory levels to take care of the increasing price trends. So, EBITDA margin, as far as EBITDA margins are concerned, we should look at somewhere in the range of 19 to 21%. I mean, I am not giving an exact number because, you know, things can go differently because of certain situations. Otherwise, at a sustainable level, we internally take 20% as our EBITDA margin.

In terms of recycling product, how are we seeing the demand traction over there? Like, are we getting good order info or good inquiry in recycling machines?

Yes, we are seeing a good traction also in the recycling machinery segment. We recently introduced Two other recycling machinery technologies as well. One was for post-consumer recycling machinery, mother-baby type of machinery, which is a two extruder combination recycling machinery, as well as we are increasing our capacities of recycling machinery as well of our Reclanact series. Also, we have ventured into washing lines as well. So we have seen a good inquiry movement in the recycling machinery segment as well. But it's a fairly new segment for us as an overall machinery segment.

And how soon we can expect it to convert this into an order book?

The inquiry back? Yeah, it's already getting converted. It's not that it's just an introduction that is happening. We are executing one to two recycling machinery a month.

And then how long this demand can go because since, you know, this is a need of an hour because the industry dynamics are changing. So how do we see that, you know, how this it can go for us also?

So, we have just entered the industry, per se, you can say, recently, and we have a long way to go in this industry. As a demand, we expect that the recycling machinery segment will continue to grow decently. It will have a good growth. The industry segment will have a good growth, especially because of the government impetus

and

self-awareness as well.

Okay, sir. Thank you, sir, for answering for all my questions. Thank you. I'll be joining on the line.

Thank you.

Thank you. The next question comes from the line of Akshay with CAN Mutual Funds. Please go ahead.

Yeah. Thank you for the opportunity, sir. Congratulations on a great set of numbers. And season greeting, festive greetings to the company. So my two, three questions. So first is on the revenue breakups. So typically, if I'm not wrong, revenue breakup is in a split of 45 is to 55, 1H versus 2H. I mean, 2H is little on the higher side. So would that be a fair assumption for FY27 also?

Yeah, that would be more or less the same similar kind of, you know. 45 and 55 could be the breakup. It could be 45 and 52, but it will make the important, yeah.

Okay. And so, just on the order book side only, I mean, obviously, we are at a record high order book. So, how should we understand this order book? I mean, can it go up from here or, I mean, what is the maximum order book that we can support with the existing infrastructure? And on the inquiry pipeline, if you could give some number, like what is the inquiry pipeline looking like as of now? Yes, sir. So this was my second question. Thank you.

Okay. So as far as our current capacities are concerned, our current capacities are, you know, good to serve us to a revenue of, let's say, 2,500 crores. So there is still room to grow from here as far as the order book is concerned. This current capacity may require some amount of balancing of equipment in one or two plants, but we feel, we believe that 2500 crore is the maximum revenue that we can do with the current capacity. We definitely have land available in our Kanpur premises. And so what we need to build is the maybe a shared and few machines to add to go to the next growth cycle. That's number one. And number two, you asked about the inquiry pipeline. So I mean, in Capital Goods, inquiry pipeline happens at two or three different stages. The largest amount of inquiry book starts when we participate in exhibitions. You know, some are repeat customers who know us. But some are new customers who are entering this business for the first time, both internationally and domestically, we tend to participate in all exhibitions and industry shows. So the biggest inquiry pipeline gets generated on these shows. So, we have seen over the years. The conversion of between 15 to 20 percent of the inquiry pipeline getting converted into firm owners. So, I mean, today we would be, if I don't have the numbers right now, but I believe we would be sitting at around 30,000. Inquiry pipeline for all the machines put together. They would be in different stages of, you know, conversion, but that's the inquiry pipeline. So, I believe that between 15 to 20 percent is, you know, the right amount of inquiries that get converted into the orders. That's the historical data I think for you.

And just a last question, sir. We have taken this price hike that you all mentioned about. I mean, just trying to decode this 2,000 crore of order, I mean, what could be the volume and the value growth? I mean, obviously, because of this, some inflation, we would have taken price hike. So, if you could bifurcate the value versus volume?

Between the quarters?

I mean, the order book that is... Sorry?

You are talking about the price height that we have taken from the customer. Right?

Yes, sir. Yes, sir. Price height only. Yes, sir.

So, what happens is, depending upon each product profile, as I mentioned for the earlier caller, that we did a price height in our list prices in February of 26 and July of 26. These will differ from product to product. And we also have to look at the competitive landscape before we can decide on the price hike. That's number one. So this is the list price that we keep on increasing. Beneath the list price and the negotiated price, there is a discount margin, which my sales team has. And, you know, they generally tend to tighten the discounts. For some short-term price increases, but when the discounts become unmanageable, then we definitely have to go for a price hike in the list prices. As far as your second part of the question regarding quantity and price, I would not be able to give that data. It's not handy with me right now.

Thank you so much, sir.

Thank you. The next question comes from the line of Viraj Mehta with Enigma Investment Partners, LLP. Please go ahead.

Hello, sir. Good afternoon. Sir, first of all, congratulations for a brilliant set of numbers. Sir, my first question is on the CAPEX piece. Provided that we have already done 1,100 crores in H1, and you are saying 55-45 split, we'll probably do 1,300 in H2. That means we are already at 2,400 crores. And you are saying that we can only do 2,500. So, what is the balancing increment that we need to grow next year of 15-20%? Have we started some KPEX? Can you talk a little bit about that, sir?

Yes, good afternoon. So, yes, we started some KPEX. We do maintenance KPEX and some balancing KPEX every year. So, this year, the figure is something like 75 watt crores. Which is to add some capacity of new introduction of machines that we have done, especially on the conversion and recycling machinery side, as well as some maintenance capabilities as well. And we intend to start building the new shed in time to come, in near future, in time to come, to add more assembling capacities.

Sure, sir. Sure, sir. So, sir, given that we are already at 1,900 crores of order book, and provided we'll probably execute in the range of 1,300 crores for the rest of the year, that provides you a very good head start of 600 or 700 crores remaining for next year. What kind of order book that you think we're looking at by the inquiry that you have end of the year? And if you can just give a, based on the inquiry that you have today, what kind of revenue growth you're kind of okay projecting for next year?

Good afternoon, Viraji. So, currently, we are sitting at around 2,000 crores. We believe that it will grow a little bit from here. And I, to best estimate, by March and it should be in the same range bound, 2,000, 2,200 types of order book. So, next year, we are looking at 10 to 15% growth from this year's growth, 27. Because 27, the base would already be very high this year. We have already grown by around more than 40%, which will get some tapering towards the end because of the H2 base effect. But for financial year 28, we believe that we should be growing at around 10 to 15% because of other, you know, the new initiatives that are kicking in, the space growth that we are seeing, the recycling business, and the monofilament piece of the machine fee that we make.

Sure. So roughly, you're saying 2,400 crores this year and closer to 2,750, 2,800 crores next year is kind of the base case. Obviously, business can change, but I'm just saying as of today, that's what you're comfortable projecting.

Yeah, yeah. 25, 2600 types of numbers. 10 to 15% would mean that much.

Okay. Thank you. Thank you so much.

Thank you. The next question comes from the line of Nishita with Sapphire Capital. Please go ahead.

Yes. Hello. Am I audible?

Yeah, yeah. Please go ahead.

Yeah. So, I just wanted to understand it's only on our capacity only. So, what is our current capacity utilization?

Okay, so ma'am, the capacity utilization in terms of units is a bit, because we make heterogeneous products, and the capacity is a bit fungible between our in-house capacities and the vendor capacities. So, you know, a lot of parts are made by a vendor base, which is around Kanpur, Fridabad, and Bangalore. So, these are, you know, places where we get our material from. So, the capacity of vendors and us, there is a lot of time, I mean, it can move from vendor capacity to our capacity and the reverse can also happen. So, getting exact number of capacity utilization would be a bit difficult and also because of the fact that we make heterogeneous product ranges. So, one product could have a lot of... Standard bought out items, and another product could have a lot of machining parts. So, that changes the economics for each and every product differently.

Okay, understood. And another thing I want to ask, so you just mentioned that we do maintenance out of case of 75% to add some machinery. So, these machinery we are majorly adding on the recycling side only?

Sorry, ma'am. Can you repeat the last sentence?

So, are we adding these machinery on the recycling segment of our product?

So, ma'am, we have, apart from maintenance cathode, we have added some new machinery, and we are adding some new machinery as we speak along to add manufacturing capacity of recycling machinery, conversion machinery, and coating machinery, etc.

Okay, okay. And like even with the 15% growth

for

next year, we'll still be exceeding our peak capacity revenue. So how do you think we'll be able to reach that? Are we planning some capacity expansion in FY28, if you could give some sense on that?

Yeah, so we do a decent amount of Quebec every year that way. And apart from that, we have plans to add a big, large assembly space within the complex, within the manufacturing complex, as well as that will add certain assembling and manufacturing capacities for us. Apart from that, we are also augmenting We have asked our vendors to augment their capacities to be able to improve our growing demand.

Okay, okay, understood. And my last question would be from our current revenue, how much does the recycling machines contribute to the current revenue?

So, it is currently, it is very, I mean, minuscule. This year, we expect that the total revenue from the recycling piece of machinery would be around in the range of 30-35 per hours.

Okay, and how, what? Okay. What sort of growth can we see in this? Like next year, what sort of revenue can we expect from this segment?

I mean, we are very confident of doubling that revenue next year.

Okay. Okay. Understood. Yeah. Thank you so much.

Very exciting. Yeah. Yeah. Yeah.

Thank you. Your next question comes from the line of Pankaj Saraf, an individual investor. Please go ahead.

Hi, I would like to understand for the domestic growth, this quarter has been 83% year-over-year. So if you can please double-click on where the growth has come from, what kind of product lines, what kind of customer segments, and why do you believe this will slow down to 10% to 15% next year?

So the domestic growth is growing in fabric applications as well, in non-fac applications as well. Such as wrapping fabric, speciality fabric, etc. We have seen a healthy order book in the cement back sector as well. Yeah, with the shift from pillow bag to block bottom bag, as well as we are seeing a decent order work in the BOPP bag segment as well.

Hi, we are listening.

So, this was the growth fever for this quarter, and why? So, I mean, the 83% number seems very large. Is it because you've taken market share, or is it because you found new applications, and then why do you believe this will slow down next year so significantly?

So, we have added new segments as well in conversion machinery. And some segments were not strong earlier. So some amount of growth has come from those segments, especially block bottom back application. In the fabric application, the conversion rates, which the processors get based on raw material plus conversion, that has cooled a little vis-a-vis the peak rates. It is still healthy, so to say, going forward. But, of course, as capacities are added in the industry, we foresee a little slowdown in the order book. I am not saying that there will be a complete slowdown, but a little slowdown we see in the order book going forward in next year.

Got it. Okay. Thank you.

Thank you. The next question comes from the Ryan of Stargate Kapoor with Kapoor Company. Mr. Kapoor, your line has been unmuted. Please proceed with your question.

Yeah, hello. Hello. Please go ahead, sir. Yeah, yeah, yeah. Namaskar, sir. Sorry, sir, for the mistake. Sir, just looking into the closing order book of closer to 2,000 crores, sir, what will be the split for the recycling part of the mix in this, and how much will be machines and the spare business?

So, number one, this is only the machinery business. This does not have the spare business, which is on top of it around 30-35 crores is spare business, which is not in the order book. We don't generally give away the spare order book alongside the machine. This is purely machines. As far as the recycling machines, as I mentioned to an earlier caller, that this year we are looking at revenue of around 35 crores. So, the order book will be also in the similar range. In the total, between 35 crores would be recycling machines, yeah.

Okay, out of 1.994, it is 35 crores worth of recycling. Yeah, yeah. And the execution, I think, sir, you mentioned is nine months for as- Yeah, six to nine months.

For smaller machines, six months, and for larger machines, nine months.

So, this, the order book of, closing order book will get, will get done by the first quarter.

By the, let's say, by the first and second quarter. Because if you look at the run rate, we are currently, we clocked 600 or crores this year, this quarter, second quarter. So at that run rate, three quarters, three and a half quarters would be a fair estimate. But, you know, there is sometimes a tendency of the customers to lift machines a bit late. When I say six to nine months, you have to appreciate that domestic and exports have to be looked at differently. Good morning, everyone. Usually, customer places an order, then goes on to build its site, expands its plant, takes clearances, gets finance tied up, so, you know, it will all depend on those things. In the international markets, since we serve the developing world more than the developed world, So, we often face this situation of LC not coming through before the dispatch, and therefore things get delayed. So, I think four quarters should be a fair estimate to take for the order book to get executed. And then the new orders fill in that space.

Yeah, yeah, yeah. So, new orders will be there to replenish it. So, taking into account what we did for last year on a top line of 1,770 out crore. And we have already done close at 1097 for the first half. So we will be flattish in what should be the trajectory going ahead. I think the last year the year H2 was on the higher side of a much similar to what would this time H1 is. So, what should we look forward for H2 in terms of the order execution and how are the margins likely to shape access?

So, generally, we have seen historically that H2 is stronger than H1. Generally, we have seen. It may change in one year or two years, but generally, we have seen that between 45 to 47 percent gets executed in the first half and the remaining, you know, gets executed in the second half. This year also, we seem to be going in the same direction. Kind of a trend. So we did around 1,100 crores in first half. So we believe that 1,200 to 1,300 crores would be the fair estimate for the second half. And see, it all depends on our ability to manufacture the complete project on time and deliver. You just cannot. Send a tape line to a customer where the looms are pending or you cannot send the looms to the customer while the winders and the other machines are pending. So the project has to be planned across all units in a manner that the complete project gets executed well within time. So, some hiccups are there, but we see that we have the ability to deliver the orders subject to customers, you know, not delaying those orders. So, this is the first part of your question. You talked about margins. So, unless we see further headwinds from on the commodity prices, we believe that 19 to 21 percent internal target of 20 percent of EBITDA is a doable target for us.

Correct, sir. And lastly, sir, on the difference part, sir, what are we exactly trying to explain when you mentioned about some South Korean order also, and what is the piece currently for difference? Yeah, yeah.

So, generally, we export to around 100 countries in the world. In the last three years, we would have sold our machines to around 100 countries outside India. And generally, our customer base is in the developing world. And this is the first time we got an order from a Korean company. And that was a big highlight. That's why we wanted to put it in the opening remarks by Gaurav ji. Otherwise, this is a first order. And we keep on looking at opportunities to expand our footprint globally. This was around the new geography that we mentioned. And as far as the new material, I will request Gauravji to explain to you a bit on this.

So, this machine that we made for such a license application, it was a little confidential project by the customer, we have a NDA, etc. sign, but what we did was, we made the machine as per the customer's requirement, right, and jointly helped develop that process further. The end application was for bulletproof. Completely, but one of the layers.

Sir, just coming to your slide number 20. Sir, Darren, you have given us the advanced manufacturing infrastructure and in-house training center. And, Darren, it is mentioned that we have an FIBC unit for 8,000 ton of FIBC. So, this is the forward integration exercise we do? We manufacture bags or what are we trying to explain in the…

You can say that it's a kind of forward integration that we have done, but the idea is not to compete with our customers, right? This is a showroom or a demo unit, per se, to say. This is where we showcase all our machines in our factory-like running conditions, where we showcase these machines to new customers. These current customers, people entering this industry for the first time, as well as we also do long-term validation development of machines in this facility.

Sir, my point was, we have mentioned here a tonnage, 8,000 tons of FIT. So, what are we trying to explain by this?

This is the capacity of the FIBG unit, that amount of FIBG bag that the facility can make, to sell.

But we are not into the sale. We are not manufacturing FIBG bag. No, we make, we sell.

Right? But this is like a, you can say it is a mix of a marketing center as well as a R&D center. But what we produce, we sell. So, we have tied up with certain profile customers, right? We don't go chasing our customers for this application, but we have tied up with profile customers to cater to their small requirements.

Correct, sir. I thought, lastly, sir, we are looking, we are seeing that many, some of the FIBC manufacturers are also coming up with technical textile in their needle punch technology. So, in our sphere of things, do we have that technological advantage of our machines, wherein this needle punch part goes into, or how should we read when we hear expansion from the FIVC player in your vicinity only, coming up with the needle punch. I know what you are reading.

I know who you are reading. What they have ventured into is a complete different segment of industry, right? So they have ventured out of woven as well to some non-woven applications into needle punching. So that is not enough scope as of today. Do I see it as a scope going forward? I don't think so.

Non-woven, yes, you are correct. Yes. Thank you for correcting me.

Right.

So when we look at the balance sheet part, we find this other current liabilities to the tune of 478 crore, sir. What would we attribute to it? And sir, just to add to one point, when we represent our numbers to the exchanges, they are in millions, whereas in your press release, I think, so we speak in crores. In concord also, we are speaking in crores to finally make it uniform so that our interpretation and getting down to work is easier, sir, rather than putting millions and crores into conclusion. Thank you for this recommendation.

In fact, we have been trying to request all our capital market constituents to have everything in crores, but we are always told that stock market and NAC, BAC and SEBI all, they understand that millions, rupees in millions. That's the reason why all our presentations are in millions and we speak in crores. But nevertheless, your point well taken. We will try to see what we can do best here.

Thank you, sir. Now, tell us about this figure's representation of the current liabilities for $478,000.

All the customer advances we have, generally, we create an order in our books only when it is backed by submission advance. So, generally, we tend to take around 20% advance from the customer at the time of booking. So, this represents as a liability in the books of account. So, if you have 2,000 crore, 2,000 crore order book, then we have about 400-400 crore customer advances.

Okay, okay. We are very new to the capital market, just got listed. We had a very good listing also, and there was a very humble purpose by the promoter also, wherein it was for, I think, for some PFR commitment that the issue came. So, currently, with the type of turbulence we have in the capital market, what could be one of the reasons why has the market suddenly turned negative on our stock? It is not there for you to comment, but it is very much visible that after reporting a strong set of numbers, coming up with your guidance, the investor presentation, We are thinking decline in your stock price. That is not to be taken. Why should you comment? But this is an aspect that today also you are the largest shareholder. So, it's a cause of concern or it's just a market dynamic coming into play? A very small understanding I had.

I would not call it as a cause of concern. This is, you know, some market dynamics because of, you know, elections or American elections results. I do not know. I am not the right person to comment on it. But we don't read too much out of it. You have given us the mandate to work efficiently in manufacturing machines, which we are doing efficiently. Rest is up to you all to, you know, see that this talk goes up.

Okay, sir. I'll join the queue, and all the best. Hope for client visit and other activities going ahead to have better understand. Thank you, and all the best.

Thank you. Your next question comes from the line of Srikant with Pinpoint X Capital. Please go ahead. Thank you for opportunity.

Sir, can I give overview of the demand happening in technical textile industry because we have some customers in that segment?

Sir, I cannot comment on the whole technical textile industry. It's a very large deal. We are in a couple of segments of the technical textile industry, but to give a generalised statement, the technical textile industry is going to grow. I personally feel that there is immense potential in the technical textile industries for India, for production in India and for exporting from India.

So, we are adding any new machineries to capitalize that growth in the technical textile industry?

So, we recently ventured into monofilament machinery and medical technical textile like medical sutures, etc. as well. Recently we acquired, last year we acquired these companies in Europe and America. And So, what we are trying to do is designate these technologies for production and production in India as well.

Sure, and coming to recycling, whether we do PET recycling and rigid plastic recycling, sir, our machinery?

Yes, so rigid can be done in our machinery but not PET. PET is a different segment altogether. That is not a focus area as of now for the company going forward. Maybe in future it might be a focus area, but that I cannot commit now. But rigid and flexible is what we, our machines can do.

So whether we have some order book in hand to these two segments?

Flexible, yeah. We do. Rigid, not at the moment. We just did an open house recently for our post-consumer recycling machinery. This quarter we did, right? An open house. So we got good appreciation from the people who visited the open house. But we just entered the post-consumer recycling machinery segment.

And in your opening remarks, you are speaking about polylactic acid framework. Can I give over you what is the discussion happening, sir?

So, bioplastic is something that is getting introduced slowly and very slowly. So, one of my director of my technical training and research center, he was a convener of this body of BIS. And he was one of the persons instrumental in framing the standards, etc. Right? Bioplastics is in a very nascent stage as of now. But what we have done is, we have tried processing it on our machines and it works.

So whether it is an inquiry stage or we have some solid pipeline going forward?

No, no, it's not an inquiry stage. We are not in bioplastic, sir. My director of TTRC at Training Institute is the convener of the BIS body of bioplastic.

Sure, sure. Thank you, sir.

Thank you. Your next question comes from the line of Bajrang Bafna with Sunidi Securities. Please go ahead.

Congratulations for very strong set of numbers. Sorry if I am repetitive. So, if you could, you know, you guided in your... Some of the questions answered that next year, you'll be a little slowing down. So, if you could broadly guideline what sort of growth your second quarter numbers are pretty robust. So, overall basis, how do you see the 27 and 28 in terms of growth? And order book, you have already indicated, you'll see a little slowdown next year. But broadly, what are the numbers on the top-line growth that you are seeing this year and the next year? And any other segment, you know, where you could see the growth opportunities apart from your existing business? Thank you, sir.

So, as I mentioned to the earlier caller, you know, we are currently sitting at a 2,000 crore rupee order booth, and, you know, success lies in our ability to, you know, able to dispatch the order booth to the satisfaction of the customer in the next two quarters. That will determine my top line for this year. We have historically seen that generally our X1 and X2 ratio is 45 is to 55. So, we are kind of confident that we'll be able to deliver this number in the next two quarters and achieve a top-line growth of, I would say, in the range of, let's say, 30-35% this year, approximately. As far as the next year numbers are concerned, there is a fair amount of chance that some orders Depending upon domestic or exports mix, some orders can get spilled over to the next year, for sure. And the buildup of the order group from now to March will also determine the next year's turnover. But we are confident of this year, even if you consider this year as an outlier in terms of heavy revenue growth, the next year would be more moderate. But we still do not see that coming down less than between 10 to 15 percent. We definitely would be growing between 10 to 15 percent next year. Because of our new offerings, because of the demand of the output that gets developed, generated from our machines, that demand of that output determines our machines. So because of, you know, so much investment by the government in urbanization. Road building, and different applications, the transport sector uses our products. So, depending upon the versatility of the product that our machine makes, we believe that this kind of a growth is doable.

Got it, sir. And, sir, any other segment that you would target, you know, to basically for the long-term structural growth?

So, we are looking at working on recycling machinery segments to grow our portfolio in that segment. In our presentations earlier, we did mention that we intend to introduce shredder, granulator, etc. as well in the recycling machinery portfolio. Apart from that, we are always on the lookout for opportunities which can add value to our product portfolio and look at adjacent businesses as well in terms of acquisitions or joint venture, like how we entered monofilament machinery and technical medical scooters machinery as well. It was done last year, end of last to last year. Call for new technology segments.

Thank you, sir. Thank you, and all the very best, sir.

Thank you very much.

Thank you. Your next question comes from the line of Risha Bagarwal with Surab Capital. Please go ahead.

Yeah. Hi, good afternoon, sir. Sir, I wanted to understand, have you started working upon further vendor onboarding? Because based on your address, it also seems like there might be, as we continue to grow, there might be more constant on some of the vendors' side as well. So, how has that worked been? I would love to understand your thoughts there.

So, I think by vendor onboarding, you mean adding new vendors or augmenting vendor capacity?

Both.

Both. So, right. So, we at times add new vendors as well, depending on capability as well as capacities, right? This year also, we added some vendors to our vendor. Vendor family, as well as in our current vendors also, vendors are augmenting their capacities to cater to our growing numbers. So, let's say we have three dedicated ancillaries and cancers, they have added capacities to their current manufacturing capability.

So, if I talk about you, along with the vendor ecosystem, which you have created, because we've always said that 2,500 crores is like the peak revenue of this combined ecosystem, and we've done around 600 crores. So, it's almost like we're operating at peak utilization, then should I really think that the bottleneck has been maybe on the vendor side, wherein they are not able to maybe supply all the...

So, what happens is that we try to make all functionally critical parts in-house. And the, you know, components for machining, fabrication, etc., which are not so functionally critical, they are generally given to the vendors. So, with this philosophy in mind, we also are able to keep control over our quality. So, when you say that we are reaching our peak capacity, so I would like to mention here that, see, capacity or the revenue number that I keep on mentioning in my statements earlier, that 2500, it is a function of the units that we manufacture, the diverse product profile that we manufacture, as well as our ability to great price increases from the customers is concerned. So, you know, those three factors will pan out differently in different years. For a moment, you have to appreciate that you, our earlier years, we are selling more machines on the, which was higher rated capacities now than earlier. So, I mean, if you look at my unit economics, you would find that the numbers would have come down from, let's say, three, four, five years back, but peak numbers, peak numbers in financial year 22, but my sales revenue has grown. And number two is that the machineries are also with higher rated capacity. So let's say, for example, the tape line machine, which was maybe sold at 600 kg per hour output five years back, today the normal ask from the customer would be in the range of 1000 kgs or 1200 kgs. So, you know, in terms of the extrusion capacities, we may be adding more capacity in the market with lesser number of machines to be supplied. So all those factors go into considering that fact of peak capacity, etc. So my sense would be that the dedicated ancillaries, they are equipped to expand, onboarding of vendors keep on happening on a regular basis. We are finding new customers in Gujarat and NCR region as well as in Bangalore. Sorry, suppliers, I mean suppliers. And we always are on the lookout of also seeing that whatever capacities inside we can free for volume parts which can be given to vendors. And our internal manufacturing capabilities can focus more on different critical parts and other items. So, that's how we came. It's more or less fungible, actually, between us and vendors.

Add to it, like, let's say machine tools can produce variety of parts, right? So, suppose we are making X amount of parts in-house, and I see that that can be sent to my vendor, and I can make more critical new part introductions in-house, so we do that as well.

Yeah. The reason why I was asking you is because we are making an estimate of how the demand will come for our customers in the coming quarters. Obviously, one can never pinpoint. If in case the demand inflow is higher than what we predict, then could there be a situation wherein essentially our execution timelines get extended because maybe because, you know, the demand intensity is higher.

It can be. It can be. So, today also, when we say six to nine months execution cycle, it's on an average. Some machines we are able to deliver quicker, some machines are a little longer. So, just because I cannot pinpoint, let's say, if I have, like, 200 projects, right, to pinpoint exact delivery schedule or cycle of that each number. So that's why we stay in a ballpark figure, but you're right in what you're saying.

I see. The other question was on margins. Our domestic share has increased materially in the revenue or in the P&L, but our gross margins have been fairly consistent at 41%. But if I compare it sequentially, still there's a fall of 3%. So is that more because we focused on domestic or is it more because of input cost inflation?

No, no, it is largely because of input cost inflation, but some amount of geography mix will also pan out here because domestic market is a bit heated this time, this time around. And also, as I probably mentioned in my last call that outside India, India is the cheapest market. Outside India, starting from, you know, East in, let's say, Bangladesh, Vietnam to all the way to the West, depending upon which geography is performing in which year will also determine how my, you know, Martin Mixwood. Look at. But this time around, I would, if you were to select one big reason for the material input cost, so it would be because of the input cost of commodity prices. Getting inflated rather than the other way around.

Very helpful. So just last question. Based on just the current market scenario, the incremental market share, not the existing machines which are already installed, but the new machines which are getting installed in India, where would you guesstimate your own market share to be?

I mean, what happens is that unfortunately, the market share again is a function of how my competitors are also doing, right? Many of the companies are in, in fact, all the companies other than us are in the unlisted space. We don't really get data from there unless you commission a study to get hold of how many numbers got sold. But our intelligence from market intelligence tells us that in the conversion space, I mean the tape line room binder, other than those three pre-tubric machines, our market share would have grown. This is my...

Any number, you would like to associate as a board person, which is talking about or not. I was asking, is there any absolute market share percentage number?

So in converting machines, sir, you can take our market share as around 25% to 35% depending on different converting machines.

Got it, sir. Thank you all the very best for the coming quarters. Thank you.

Thank you.

Thank you. Ladies and gentlemen, we will take this as the last question for today. I now hand the conference back to the management for closing comments.

So, thank you, investors, for joining this call.

From the management side and from Loya Co-op Limited, I convey my best wishes for the festive season ahead. And thank you for joining us.

Thank you, members of the management. On behalf of Motila Loswal Financial Services Limited, that concludes this conference. Thank you, everyone, for joining us. And even now, disconnect your line.