Pitti Engineering Limited (PITTIENG) Q1 2027 Earnings Call Transcript

Ladies and Chairman, we welcome you all to the Q1 FY27 Earnings Conference Call of Pithy Engineering Ltd. This conference call may contain forward-looking statements about the company which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements do not guarantee the future performance of the company and it may involve risk and uncertainties that are difficult to predict. 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 the operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now have the conference over to Mr. Akshay SPT, Managing Director and Chief Executive Officer. Thank you, and over to you, sir.

Thank you. Good afternoon, everyone, and thank you for joining the Q1 FY27 earnings call of Pitti and Eugenic Ltd. Along with me are members of senior management team and our investor relations partners from SGA. Our financial results, investor presentation, and related disclosures are available on the stock exchanges as well as the company's website. I hope you have had an opportunity to go through the same. Let me begin with a brief overview of the broader operating environment and growth drivers. The first is localization in China was one opportunity. Historically, China has been the largest capacities across industrial areas such as electrical steel lamination, casting, and machining. We are seeing customers increasingly look at India as an alternate manufacturing and sourcing base. This is particularly visible in mining equipment, data center generators, as well as specialized industrial applications. Second important trend is the shift of manufacturing from Europe to India. The sharp increase in energy, labor, and material costs in Europe has impacted the competitiveness of European manufacturing. In motors and generators, as well as casting and machining, customers are increasingly evaluating India for sourcing and manufacturing. Importantly, this opportunity is not limited to direct exports as an increasing portion of what we supply to the Indian operations of our global customers are eventually getting exported, creating an indirect export opportunity for us as well. The third driver is electrification. Electrification is creating structural demand for electrical steel laminations at both sides of the consumption spectrum. That is the energy generation as well as consumption. We believe this is a long-term trend that will support our growth of lamination business in the future. Within this environment, we are particularly well positioned because of the breadth of our capabilities. We are progressively expanded from lamination into casting, machining, shaft manufacturing, and integrated SMD. What differentiates us is our ability to provide multiple components and processes under one rule. This becomes particularly valuable in complex applications such as railways, wind powers, specialty motors, or highway equipment. The customers increasingly prefer integrated solutions rather than a smaller supply base. Importantly, our capacity expansion has historically been gradual and closely linked to customer demand. However, the level of demand and opportunities that we are seeing today require us to undertake larger capacity additions. We have recently come into operations of the previously announced 150 crore capex, which was announced last year, increasing our sheet metal capacity to 108,000 tons and augmenting our casting and machining capacity. We are now progressing with the 290 crore investment for our greenfield casting facility in Hyderabad. This facility will help consolidate our foundry operations and provide the infrastructure required for the next phase of growth. Our objective is to build capacity ahead of the demand curve. Speaking of sectoral demand and growth opportunity is broad-based. Our data centers. I have emerged as a strong near-term opportunity, giving the significant power requirements for both primary and backup power generation. We are seeing strong demand from customers such as Cummins, Marathon, MyDeck, and are also developing opportunities with a couple of more marquee customers at the same time. We remain mindful that the pace of AI data center investments may not be sustainable indefinitely. Therefore, we are confident about the underlying growth in regular data centers driven by the cloud adoption and data localization. We remain measured in our approach to the overall data center opportunity. Beyond data centers, we have seen strong visibility in railways, metros, mining and off-highway equipment, and specialty end-use applications in industrial sector. Modernization of North American railways and increasing mining activity are all supporting demand for our products. Over the longer term, we are also seeing automotive and electric mobility as an important opportunity. While our presence in automotive is currently limited, we are actively looking to participate more meaningfully as India's automotive manufacturing ecosystem expands and electrification creates new opportunities. Overall, we believe PITTI has an important stage in its evolution. The combination of global supply chain realignment, India's manufacturing competitiveness, electrification, and expanding capacities and capabilities across lamination, casting, machining, and integrated SMTs provide us with a strong platform for sustained growth. Coming to the operational and financial performance for the quarter, our revenue mix... A revenue mix of traction motor and railway components remain the largest contributors, accounting for 28% of revenue. This was followed by power generation at 15%. Industrial and commercial applications at 12%. Mining oil and gas at 10%. Special application motors at 9%. And data centers at 5%. Renewable energy at 3%. Other segments at 17%. This diversified revenue profile reflects the broad-based nature of our business and presents across several structural growth segments. Moving to volumes, total lamination and assembly volumes stood at approximately 19,200 tons, registering a healthy 18% year-on-year growth. Importantly, within lamination, higher-valued assemblies, including integrated rotor shaft and stator assemblies, grew faster than loose lamination. This reflects a continued improvement in the product mix and increasing contribution from value-added offerings. Total casting and machine components volumes stood at 13,191 tons during the quarter, a growth of 4.2% by-o-by basis. On capacity utilization, we witnessed meaningful improvement across our operations during the quarter. Sheet metal utilization increased for 73% in Q1 FY27 compared to 70%. Machining utilization also improved to 86% compared to 82%.

Casting and fabrication utilization stood at 72%. Turning to the financial performance, revenue from operations

for Q1 FY27 stood at 529 crores, compared to 457 crores in Q1 FY26, a growth of 16% bio-wise. Adjusted EBITDA stood at 89 crores, compared to 78 crores for Q1, representing a growth of 14%. Adjusted EBITDA margin was 16.8% for the quarter. Adjusted tax was 32 crores compared to 26 crores in Q1 F526. As a recently concluded CAPEX comes on stream, we are confident of achieving significant growth in the remaining year. And therefore, we are devising our annual target to 82,000 tons for lamination from 78,000 tons as previously stated in Q4 conference call. Overall, we remain focused on executing our expansion plan and deepening our relationships with existing customers and capturing new opportunities across both domestic and global markets.

With that, I will now open the floor for Q&A session. Thank you.

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

We take the first question from the line of Vala Subramaniam from Aryan's capital. Please go ahead.

Pala Subramanyam with E-Sun Mutual Line and proceed with your question.

Sir, I am audible?

Yes, please go ahead.

Good evening, sir. Thank you so much for the opportunity. Sir, I am looking at high-radius stator and rotor, sir, please. The volume growth is nearly 37%, which is outpacing loose lamination growth of 16%. So, of each of the applications, there are sectors we have supplied, especially for high-value stator and rotor assemblies, and secondly, earlier call mentioned about raw castings, EBITDA per 10, it's around $30,000 to $35,000, while machine castings around $80,000 to $100,000. So, if you could mention about the high-value added assemblies and integrated assemblies, EBITDA per 10 also.

So, the growth in high-value-added lamination SMBs is primarily driven from data centers, it's driven from special industrial use, mining of 5A, and rail base. So, these are the areas where these higher-value-added SMBs are typically used, and that is the sectors, as you can see, which have grown in the recent past. As to the EBITDA pattern of the integrated SMDs, it's very difficult to say because it depends on the kind of casting and machining which has been integrated into the lamination assembly. So the margin, you cannot literally go in an EBITDA pattern basis there. It's a mix of all three verticals, which is machining, casting, and lamination.

Okay, sir. On the data center side, you mentioned our revenue share is around 5%. Like, if you look at most of that demand is coming from U.S. and Europe market, especially for data centers. So, whether majorly we are supplying to domestically or we are also getting a lot of traction from exports market side. So, we could share, like, is there any new customer additions across the geography? And whether it's primarily for a high-value stator rotor assembly for cooling and power packer system for any other components we are supplying.

So what we currently classify as data centers in our revenue mix is primarily the power generation side of data centers. Anything that we may be supplying for cooling application, we would not have that distinction given by the customer to us. So it would still be classified under industrial use. As far as the data center that is classified in the PPT, which is for the power generation side is concerned, we have direct exports to US for one customer, and for a couple of other customers, we are supplying this product in India, which is both used for local market as well as re-export to other countries.

Okay, sir. So my third question, the plan, the CAPEX of 290 crores, if you could share the breakup between machine components facilities and like castings or assemblies, and if you could share the roadmap, I think it's planned to be commissioned by Q1-FI-29, so how much CAPEX by FI-27 and FI-28.

So, we have already incurred about 60 crores of capex from that 290 crore capex announcement. It's a greenfield and expansion, so we have started with the land acquisition. I would say that, as you can see in the PPP slide 5 of Q4, we have given the breakup between machinery and infrastructure investment. Infrastructure investment is about 30% and 70% is going towards plant and equipment. I will not have a quarter or year-by-year expenditure plan, but the capacity is expected for commissioning by Q1F530, as we had mentioned in the previous call.

Okay, got it, sir. Thank you.

Thank you. Participants who wish to ask a question, please press star and 1. We take the next question from the line of Mohit Jain from Devane Chokri, PMS. Please go ahead.

Hi, actually, sir. Congratulations on the good side of number again. Sir, I have just this question on exports. So, in absolute terms, exports were roughly flat. You know, last year we did about 137 crore, this year 139, or vice versa. And you've been highlighting this China plus one and, you know, tariff-driven sourcingships as it pales in for you. So, and on the other hand, domestic grew 23%. So, is it export flatness just, you know, the orders may be within the year or you are really seeing customer delays?

So, see, exports will again pick up in Q3, Q4. And the direct exports are remaining, you know, kind of steady, registering nominal growth. What's a bigger opportunity for us is the indirect exports. Like I said in my speech, we are seeing increasingly a situation where we are supplying to the local operations of our global customers. And those products are getting made in India and then exported all over the world.

Okay.

So you're thinking in the second half, you'll see a surge in exports.

Yeah, I think Q2, Q3, Q4, quarter on quarter, you should be seeing improvement in direct exports as we ramp up the new capacity.

Got it. And lastly, we said that we had some LPG issues, not only the entire industry because of the war. So has that issue subsided? And, you know, we were also planning to do some electrification there.

So what's the status there? So, we are currently doing the electrification. A lot of it is already done, and right now, there is no LPG issue. So, we have steady supplies of LPG coming in. Whatever is the incremental cost, obviously, is being incurred by the company, and it's being compensated by the customers as well.

Got it, sir. Thank you. Thank you, and have a nice day.

Yeah, thank you. Thank you. We take the next question from the line of Rahul Kumar from Vicaria Fund. Please go ahead.

Yeah, hi. Thanks. I think congratulations on the great set of numbers, actually. Just one question on this margin. Actually, if you see the value-added product mix has actually improved for the lamination, as well as the machine component also have improved as a share of overall business. But if I look at the margins, actually, they are more or less flat. So what would have driven that? So if you look at the cost in the P&L, manpower cost is slightly higher when compared to the previous time. And that's primarily because for the capex that we have incurred, we have, you know, put in all the manpower and expenses in place. As we start using the capacity and the operating leverage keeps in, the margin will improve. Is there also a case that, you know, the traction motors which you supply are of higher margin versus the company average, and given the fact that I think this quarter, there is some more softness in the traction motors, does that also lead to some margin softness? No, I would not say that would be the case because if you see the other three segments which have really grown very well in this quarter, namely your mining and oil and gas segment, as well as the special purpose applications, these typically have a superior margin when compared to even railway products in certain cases. Okay. Okay. So, it's just that the operating leverage needs to kick in because we have finished the capex of 150 crores and obviously the staffing and variable costs have all come in and the leverage has not come in in terms of the operating leverage.

Understood. Got it. Got it.

So, I think you mentioned in the opening remarks of, you know, the upgrading the volume guidance for this year from 282,000. So... Just extending this, let's say, to FY28 and FY29, what are the targets for that, and do we have the capacity, or you will decide to expand, let's say, at the end of FY28 or something like that? So, if I have to look beyond FY27 towards 28 and 29, like I had mentioned, I think, in one of the previous calls, we are, you know, strategically, we would look to have a fully-owned facility in Bangalore akin to something like a facility that we own in Orangabad today. So, eventually, that is something that we should start working on. If I look at the capacity side with this 82,000 tons being the target for current year and 108,000 tons being the capacity, we only have a headroom to, you know, grow about 8,000 tons with the current facilities, assuming the 80% operating efficiency. So, definitely for FY28, there will be some incremental CAPEX to increase the capacity, but we will do it closer towards Q3, Q4 timeframe, because we can still modulatively expand in some of the facilities. Over maybe 28 and 29, we should be looking at doing a CAPEX in Bangor for that facility, which I mentioned.

Okay, understood.

But we are tracking it very closely with the market trends and how the demand is shaping up, because we don't want to be exposed on making the investment and not having the business. Okay, okay. But in terms of volume growth, let's say if we are looking at 17-18% growth for this year, for next two years, do you also want to look at similar kind of growth? If I just look at the outlook and the demand forecast from the customers, we do see that kind of a growth over the next three years. But, you know, it's coming from segments which are... I would say can change very quickly. So, you know, like mining and oil and gas are segments which go up very fast and can correct very fast. And data center is, you know, obviously a very new segment and it's growing very, very fast. So it's something, you know, we don't want to invest ahead of time too much for. Okay. And I think we have done the expansion of casting facility also in this quarter. I think that is finished. So, if I remember, right, the last time we had mentioned that the volumes for the casting target would be somewhere around 16,000 for this fiscal. Thank you. I think that currently the share of your machine components is, I think, 50%, 60% plus. So do you want to, I mean, do we want to maintain a, let's say, sharp jump, actually, almost 60% kind of a jump over the last year. So do we have the demand visibility for that? And two, I think, what will be the share of, you know, machine component in that? Yeah, I would say that both the product categories are growing, casting and machine components. Obviously, the growth in machine components is higher as more and more customers want machine components rather than just a raw casting as a supply chain solution for them. We have very strong visibility in the machining space. So part of the capex that we announced, 290 crores, taking the machining capacity to 10,80,000 machine hours will be progressively implemented over the next few quarters. I mean, every quarter on quarter will be having capacity addition. So you should see machining volume increase. Casting capacity has gone to 24,000 tons. We would be upward guiding the casting numbers to about 17,000 tons as well. And out of that, what will be the share of machining would depend on how quickly our machines come in and we are able to put them to use because the current capacity utilization on machining is almost 86.33%. And that is the biggest bottleneck for us in terms of ability to grow the machine components. It's not the order book, the ability to get machines fast enough. I think we can see a casting volume sharp jump over this here, and depending upon the machining capacity, we can also ramp up the higher value-add machine component as well.

Yes.

Okay. Okay.

That's great.

Just last question on the debt plan. I think last time when we discussed, the debt was a bit elevated because of the higher income rate situation. So what is the situation now and where do we want to,

where would the debt settle over, let's say, next one year or two years?

So, right now, the net debt is somewhere around 491 crores as of last quarter-end, and we have already incurred, like I said, about 60-odd crores of expenditure out of the 290 crores. So, despite that, we've been able to meaningfully reduce the net debt, and I think there is still potential to further, you know, rationalize our working capital to get, you know, about 25-30 crores.

Okay.

Okay, okay, okay. But actually, our interest cost hasn't actually gone down. I think it's even though the debt has actually reduced. Yeah, so that's the finance cost. Actually, this quarter, if you see, the dollar has moved quite sharply due to the Pesticia crisis. And there's a forex impact of about two odd crores, which is, you know, accounted in the finance cost. The interest and bank charges are about 19.6 crores, and the forex impact is about 3 crores, not 2 crores, by mistake.

Okay.

Okay.

Understood. Understood. Okay. So that is more related to the currency translation rather than actual interest cost.

Yes. Okay. Understood. If you have to take a comparative number for Q1, FY26, it was, I think, about one odd close, which was a forex impact. So, the rationalization of interest and cost and bank charges have taken place, but the forex is not, you know, allowing it to be visible on the P&L. Understood. And just the last question, I think, on the other income part. If I remember, we had done, I think, 400 crore of kind of APEX, and every year we are getting this incentive from the state government. And you were having some shift of this seven-year plan to nine-year plan. Just can you help us understand how would it pan out in terms of impact on PNS for this year and the next year?

So, we had done a 220 crore

capex, which was giving us the incentive in the previous years. From this year, we are supposed to move to the expansion plan, which we had done on 400 crores, which would have typically yielded us somewhere around 40 crores a year. However, the eligibility certificate that we had received is for a seven-year reclamation period. So, the run rate for us to recover the money is much higher than what the current sales are. So we are evaluating whether to, you know, start claiming the incentive from current year or next year. So as to maximize the net cash flow, we are more or less coming to a conclusion that this year we would not be taking the incentive income because we would not be able to recover a large chunk of the money that we can recover next year.

Okay. Okay.

So last year, I think we had some 20 odd crores in the quarter too. That was basically the previous KPEC. This will not re-ecker this year. This 400 roads, you are actually discussing with the government for a nine-year plan. So, possibly the next year onwards, you will start echoing that.

If you are able to successfully get the nine-year plan, then you take it

this year because then the required runway to claim would be much lower. Otherwise, you will try to refer it to next year so that the sales increase and then the opportunity to reclaim the money is higher. Understood, understood, understood. Okay, understood. It's not dependent on the government's decision. So we may or may not do it this year. But definitely from next year, we shall be getting it. Okay, okay, okay, understood. And the previous incentive is already exhaustive. The previous one is already exhausted. In terms of cash flow, we get to receive roughly about 70 euros from the government, which is expected to come in the next 9 to 12 months.

Got you. Understood. I will get back in with you.

Thank you. Participants who wish to ask a question, please press star and one. We take the next question from the line of Srikant from SpinPoint X Capital. Please go ahead.

Thank you. As we have capabilities in making the starter, rotor and sharp, whether we are supplying our motors to industrial robomaking companies presently?

We don't make the motor, we make the components for motors. I'm pretty sure that some of our customers will be supplying these motors to many robotics companies. For example, we supply robots, machines, laminations to ABV, and they also make robots. We supply to CG, we supply to Siemens, and I'm pretty sure they supply to companies like KUKA and others for robots as well.

Okay, okay. The next question is that we are increasing the capacity capacity. As we have presently wind energy customers, are we planning to provide some new SKUs like casting components to the same wind energy company going forward?

So, wind energy for us is a lamination side business. We don't do much for wind energy in the casting. On the casting side, our largest customers would be coming from the mining segment and the railway segments. The wind energy castings are very, very large. Now, if you see nobody's making a one or two megawatt turbine, people are doing three, four, six megawatt turbines, and the castings are 20 tons, 30 tons. So, that is actually beyond our manufacturing capability today in terms of equipment.

Got the point. So, how is the traction from mining companies from USA and Europe presently, ordering queries, something like this?

It's very good. I think that's one of the key sectors which we are seeing, which will grow for us in the casting and machining space. You can see in quarter one, already mining as a segment has grown substantially for us from 5% of revenue to about 10% of revenue.

And final question, it is very helpful. Can you application of our components in the green hydrogen and marine applications?

So, in the green hydrogen space, we make anode and cathode plates for hydrogen electrolyzers for a customer in Euro. These are basically stainless steel components which are machined and supplied to the customer. It's not a very large business, if I'm not mistaken, it's about 2 odd million Euro kind of a business. There's a potential to grow, and I mean, this is something they keep saying all the time that there's a potential to grow, but we obviously start at 2 million. Coming to your marine thing, we classify that under special purpose motors. We do make components for marine propulsion, electric propulsion for marine ships, basically, we make marine generators.

Okay, whether there's scope to increase order books from these two segments going forward?

So... If I think about it, structurally, there are good tailwinds in Europe, and most of the world has mandated that in the coastal waters, people should not use diesel engines. They should use cleaner electric propulsion, so there would be tailwinds. In terms of our ability to expand, it all depends on how quickly the market expands. We have large market share with the key customers who make these propulsion systems in Europe. And as they grow, we will grow that segment as well.

And one final question is that we have superior capabilities in machining. So, we are planning for any gear segment machining concept for Chespers planning to introduce from UKPS?

Sorry, I didn't get that. You mean, are we trying to do gear machining?

Yes, sir. So, we have very strong capabilities in machining, and we have some industrial customers who need gears. For a gear, we need a particular complexity of machining. So, we are targeting such type of customers. Because gear machining to any companies are very critical. So, we have some strong experience from last many years. That's not my question.

No, so we are not trying to enter the manufacturing of gears per se. The industrial gear manufacturing would be The capability that we have and we can do. However, in terms of a margin profile, we find that the products that we are making for mining of highway vehicles and special purpose applications are far superior. But eventually, yes, that can be an opportunity to expand our business into.

Sure, sure. Thank you.

Thank you. We take the next question from the line of Sai Shriyash from Scientific Investing. Please go ahead.

Hello, I'm an auditor. Yes. Yeah, I just answered the opportunity. So, I have a couple of questions. The first one is, can you confirm whether the current utilization numbers are on the latest expanded capacity? If yes, given the company is operating at higher utilization, why is the margin in the same range, and is there any meaningful margin expansion opportunity going forward?

So, if you look at the capacity utilization, it's on 1,8,000 tons per lamination in Q1. So, the higher utilization is on the higher capacity.

Okay. So, is there any chance of margin increment and any guidance for FY27?

Definitely, your overall margins will improve as the utilization percentage inches up towards 80%. How much it will improve quarter on quarter is something I would prefer not to say right now.

Yes, thanks, sir. And the next question is, what would be the full-year tax rate? Because in the last year, Q4, you had told us that it would be around 33%. So, is it the same or is there any exception?

Sorry, I couldn't hear your line clearly. If you can repeat the question.

Sir, what would be the tax rate for FH27? Because in the Q4, you had mentioned that it would be 33%.

No, it will be about 25%, not 33%. Effective tax rate is about 25%. Quarter 1, we have a lot of right-of-use assets for our lease assets, and that has incurred the deferred tax, and therefore we have a lower tax rate on the PLN for quarter 1. But the full-year tax rate should be closer to 25%.

Okay, and one last question. So given that the 156 over CAPEX project is completed, is there any target towards debt reduction that by FI 28 or 29, we will retire the debt?

See, the debt number is going to be dynamic. We already have a 290 crore capex ongoing, of which 60 crore is spent. Like I mentioned to someone in the previous call that if I look towards FY28 and FY29, definitely there will be requirement to enhance capacity in lamination if the market continues to grow. And then towards FY29, definitely there will be a need for a facility in Bangor. So, the capex needs of the company for growth will continue. However, there will be earnings. Now, how that will impact the net debt year to year again will depend on how quickly we do the capex or we defer the capex.

Okay. Okay. And the one last question is, is there any opportunity for the inventory reduction and lower working capital? And do we expect the cash flows to better increase?

Like I said earlier that about 20-25 flows is for the potential to optimize the working capital. And beyond that, there would not be any opportunity to further optimize the working capital from today.

Okay. Thank you, sir. Thank you.

Thank you. We take the next question from the line of Pulkit Singhal from Dalmas Capital Management. Please go ahead.

Thank you for the opportunity. You know, when I look at the business last three years, the return on capital has fallen from 19% to almost 15%. Obviously, there was a state of acquisition also. But whatever you're saying in terms of FY27 also, it does, you know, the business seems to be just around even for the future. So how do you see this trajectory? Would it change any particular initiatives that you're doing to raise the return capital? What should we think about?

The large-ticket CAPEX will be behind us apart from the Bangalore CAPEX. I would not see that there would be any large-ticket CAPEX required to invest in land and infrastructure. Beyond that, the investments would, you know, center mostly around equipment and that will, you know, kind of again push up your ROC. Currently, if you see the mix of CAPEX, which was done, and therefore the increased deployment of CAPEX, a large chunk of that has gone towards land acquisition and building creations.

Okay. So, the CAPEX for next three years, what would they likely be, and what kind of incremental turnover can they provide?

So, if you have to really look at it, again, this is not something we are currently approved as a board or announced, but if I were to assume that we go ahead and make a facility in Bangor, that would entail a capex of roughly about 200 odd crores, and then in terms of another equipment, about 200 odd crores. So, 400 crores plus the 290 crores which we have announced would be capable of taking us to a top line of closer to about 3,000 to 3,300 crores.

Okay. But since earlier, I mean, the business mix is also changing in terms of machining, etc. And that probably reflects better in terms of the margin aspect. So, historically, your margins have been 14-15% and now closer to 16-16.5%. I mean, how should we think about it three years out? Is this going to be closer to 18-20% or will it just be a very slow gradual increase from here on?

No, for sure, it will be closer. It will be upwards of 18% for sure. With the capex on the casting and machining coming online and the value added products increasing as well as the core drop products increasing, your margin should be closer to 18-18.5 odd percent.

Okay, but the casting capex would probably impact margins negatively first, right?

I mean, unfortunately, the case, as you are seeing, you know, we are always having that capex, which is putting the ROC, and before the operating leverage comes from the capex done, the other capex kicks in. Right, right. And so if you think we have done the 150 crore capex, and quarter two, quarter three, quarter four, I was going to, you know... We, the output of that capex, however, the 290 crore capex are fixed in.

Yes. So what is the peak revenue, let's say, from the current facilities, I mean, the current capacity, whatever we have?

From the current capacity, if I exclude the 290 crore ongoing capex, and look at it, it should be about 2,500 odd crores.

2,500 crores, and this goes to, let's say, 3,500 crores, 1,000 crores. By incremental 700 crores of Apex, which you talked about.

By incremental 700, but then that's not the full potential because you're investing in land and building in Bangor as well as the foundry, which will be capable of much more. Okay.

And lastly, as the project business also, we had some thoughts. Do we have some thoughts around?

See, right now, if you look at it in terms of capital deployment, we are having a hands full over here and we are trying to manage the deployment of capital as deciously as possible. So while that is an opportunity, which is quite enticing, I am more inclined to stay in my lane and do the business that we know well.

Right. Right. So last question is, so tax rates are expected to be 25%. Is that understanding correct this year and going ahead?

Yes.

But other income we will not get for this year, and it will start next year onwards only, the incentive. Yes. Okay. Got it. Thank you. No more. Yeah. Thanks.

Thank you. We take the next question from the line of Rahul Kumar from Vicaria Fund. Please go ahead.

Yeah, I, uh, sorry, uh, I, uh, Can you just give us your guidance, you know, I mean, your targets for, you know, EBITDA and PACT for next two years, whatever your targets. Sorry, I think I was on mute. If I start from current year, I would look at an EBITDA of roughly 370 odd crores based on current outlook. For the next year, we should be looking at a turnover of about 2,500 crores if we don't do the capex. I'm obviously going to talk X of the incremental capex for nomination. So, at a 90,000 ton operating level, we should be looking at a 2,500 pro turnover and an EBITDA margin of about 17, 17.2%.

Okay.

Thank you. Ladies and gentlemen, due to time constraint, this was the last question and we conclude the question and answer session. I now hand the conference over to the management for their closing comments.

Thank you everyone for your time and joining us today. We appreciate your continued interest and support as we move into FI27. Our focus remains on disciplined execution and improving working capital, completing ongoing capex and scaling machine components. Stending our position as an integrated engineering partner for customers across India and global markets.

Thank you. Thank you. On behalf of PT Engineering Limited, that concludes this conference call.

Thank you for joining us, and you may now disconnect your lines.