Operator
Ladies and gentlemen, good day and welcome to ProStam InfoSystems Ltd. Q2 FY27 Earnings Conference Call, hosted by Arihant Capital Markets Ltd. As a reminder, all participant clients 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 then zero on your touchtone phone. Please note, this conference is being recorded. I now hand the conference over to Mr. Rohan. Thank you and over to you, sir.
Rohan
Head of Investor Relations
Hello and good afternoon to everyone. On behalf of Arian Capital Markets Limited, I thank you all for joining into the Q2 and a full after FY26 earnings call conference of Prostam Info Systems Limited. Okay. Today from the management we have. Mr. Ram Agarwal, the promoter, CEO, and whole-time director of the company, and Mr. Abhishek Jain, the chief financial officer of the company. So, without any further delay, I will hand over the call to the management for their opening remarks. Over to you, sir.
Good evening, everyone. Welcome to our earnings conference call for the second quarter and first half of financial year 27. Thank you for joining us. I hope you have had an opportunity to review our results. The demand for our power solution continues to remain encouraging, supported by rising electricity consumption, increasing renewable energy integration, and the growing need for reliable power backup and energy storage solutions. These trends are creating opportunities across conventional power solutions. As well as emerging segments such as battery energy storage system providing a favourable backdrop for the company's growth. India's battery storage market is expected to grow more than eight-fold between 2025 and 2034 at a seizure of approximately 25%. This growth is being driven by increasing renewable energy integration, the need for greater grid flexibility, supportive government policies, declining battery costs, and rising adoption of storage solutions by commercial and industrial customers. Secondly, India's data center's capacity is expected to increase from approximately 1150 MW in December 2024 to around 2,100 MW by March 2027, and further to approximately 3,200 MW by financial year 30. This rapid expansion, driven by cloud computing, AI adoption, and rising digital consumption, is expected to create significant demands for reliable power backup and conditioning solutions, providing growth opportunities for our manufactured UPS products. Against this backdrop, we delivered a strong performance during the first half of financial year 27. With revenue from operations growing 62.3% year-on-year to INR 196 crores given by Healthy Order Execution. We also achieved an important operational milestone during the quarter with the commencement of operation at our 1.2-gill-hour battery energy storage plant system manufacturing facility in Jajar, Haryana. And our UPS Assembly Facility in Bakron, Gujarat on September 25, 2026. The commencement of operations at these facilities marks a significant step in expanding our manufacturing capabilities. While the HHF facilities strengthen our capabilities in large-scale manufacturing, While the design facility is large-scale and as used to a solution, the background facility enhances our UPS manufacturing capacity across the 1kb to 600kb arrays. Together, these facilities expand our manufacturing base and strengthen our ability to address the growing requirement across utility, commercial, and industrial segment. Turning to our order book and exhibition pipeline, as of 30 September 2026, our order book stood at approximately 1,121 crore, spread across 97 ongoing projects. Government customers accounted for around 78% of the order book, which includes a base developer order worth 854 crore order book. Carrying an annual rental of 62 crore over a period of 12 years. The remaining 22% of the order book is contributed by private sector customers providing diversification across customer segments. From a segment-wise perspective, VSH, EPC, and developer project accounted for approximately 909 crore, representing nearly 81% of the total order book. Solar EPC contract contributed INR 178 crore, or around 16%, while manufactured power solutions products accounted for INR 26 crore. We received additional best order aggregating to 33 megawatt hours from a portfolio that recruited customers in addition to our existing customers' Adani electricity. The growing contribution in the order book from BES reflects the increasing scale of opportunities in the energy storage segment. At the same time, our presence across solar EPC and manufactured power solutions adds diversification to our business portfolio. Overall, the order book provides a healthy pipeline and strong execution visibility for the coming quarters. On the international business front, we took our first step towards expanding our presence in the overseas market by exporting a sample home energy storage system to an international customer in October 2026. This marks an important beginning in our effort. Two, is an effort to explore sport opportunities, particularly in the home energy storage segment. We also successfully implemented SAP and Salesforce during the quarter. These systems are expected to strengthen business process, integration process, improve operational visibility and coordination. And stimulate customer relationship management as we expand our operation. Looking at the demand environment for power backup, energy storage, and power conditioning solutions remains encouraging. Increasing renewable energy integration, growing energy consumption, the need for great stability, and a greater focus on energy. Resilience are creating opportunities across this segment. With the commencement of operation at our new manufacturing facilities, a healthy author book, and expanding presence across conventional power solutions and emerging energy storage applications, we are focused on strengthening our execution capabilities and capitalizing on the opportunities ahead. Our priorities remain centered on scaling up manufacturing operations, expanding our customer and market reach, improving operational efficiencies, and building a stronger platform for sustainable long-term growth. With this, I would like to hand over the call to our CFO, Mr. Abhishek Jain, for his comment on the financial performance. Thank you.
Thank you, Ranjit. Good evening and happily probably to everyone. Let me take you through the financial highlights for the second quarter and first half of the financial year 2027. During the quarter under review, our revenue from operations slowed at INR 120 cross, resisting robust year-on-year growth of 82%. This performance was primarily driven by healthy order execution during the quarter. Our EBITDA stood at INR 9 crores, declining by 17% year-on-year, with EBITDA margin at 7.83%. Our PACT stood at INR 6 crores, declining by nearly 27% year-on-year, while PACT margin stood at 5.08%. During the first time of the financial year, 2027, revenue from operation grew by 62% year-on-year to INR 196 crores, reflecting strong budget's momentum. Debitda stood at INR 16 crores, resisting a modest growth of 5% year-on-year, with EBITDA margin at 8.06%. PAT stood at INR 11 crores, resisting a growth of approximately 6% year-on-year, while PAT margin stood at 5.46%. While revenue growth remains strong, profitability was impacted by a higher contribution from the relatively low-margin third-party product power and other product segment, along with the execution of the low-margin orders. This was further compounded by the elevated input and freight costs, foreign exchange fluctuation, higher employee costs, and increased overhead, and also related to the associated expenses for jajjar and work-roll facilities. As we have highlighted earlier, margin in our project-led business are influenced by the nature of order executed and the time of project execution. With the expansion of our manufacturing capabilities, certain operating costs are also expected to remain elevated during the initial phase. Our focus remains on improving execution efficiencies and optimizing costs while maintaining healthy profitability. Coming to working capital, the working capital cycle stood at 192 days as of H1 FI27 compared to 185 days in FI26. The increase was largely on account of higher inventory level maintained to support order execution, ensure supply chain continuity, and caters to the company's expanding business operation, along with increased government deposits due to higher GST input credit and supplier advance. Looking ahead, the company is focused on strengthening its execution capabilities, improving cost efficiencies, Uh, improving cost efficiencies and ensuring better working capital management as the newly established manufacturing facilities scales up. With strong revenue growth, an expanded manufacturing footprint, and a healthy order pipeline, the company remains well positioned to capitalize on the opportunities across the power, pollution, and energy storage segment. With that, I conclude my remark. We will now be happy to take your questions.
Operator
Thank you very much. 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 handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Parash Cheda from Purpleman, Vortex Ventures, LLP. Please go ahead.
Yeah, good evening, sir. Thank you for this opportunity. Yeah, good evening, Parash G. Yeah, good evening, sir. Sir, I mean, to start first thing first, revenue has, of course, grown quite substantially led by, you know, healthy execution. But, you know, we've seen this EBITDA margin that has, you know, moderated substantially. So, Q2 margin was 7.83%. Now, earlier you had indicated about 13-14% EBITDA margin for FY27 as a broad range. Now, is that guidance still achievable and, you know, what is the quarterly margin trajectory now you expect in H2?
Yes, Paraji. There has been moderation in the EBITDA because of the increased cost and also in the current market, it is about taking order and executing it. This has been the phase for the H1 and the freight cost has gone up. It has almost doubled. Correspondingly, even the forex cost has impacted the bottom line because of the fixed price tariff based contract that we execute. However, I feel that H2 should have moderation, and we would see the growth coming in, and we are well poised to achieve a decent turnover of around, with the order in hand, we are well positioned to have around 500 crores of revenue being booked in the current financial year. So, we can see some moderation in the margin, but overall, it would be on the higher side.
Sir, you said for this financial year, what kind of revenue you said, sir?
We have around 260 plus crores of order in hand left for the financial year, piracy.
So, already 266 crores of order in hand is there with us. Apart from that, from channel, additional around 25 to 30 crores of revenue would be we can book based on either month on month number. So, if you take 195, 192 crores plus this, so we are sufficient to achieve number of around 500 crores.
So you would find some growth in the margin, Parashji. There would be some growth in the margin. Earlier, we were very, very confident of maintaining very high margin. But right now, situation in the market is that we should be clear in taking order. So what's happening, we should, in fact, you would have seen, I have not quoted few of the customers name as well, while taking, though I've taken the best order, but I'm not naming name of those customers, as like earlier we used to do, because Hello? Yeah. Yes, sir. You would find some moderation happening, but yes, on absolute term, we should be on the higher side. We would grow.
Right. So, about, let's just find that crores of, potentially, of revenue, and what kind of EBITDA margins do you now expect, you know, if you just sort of tone it down to, will there be an improvement on the current end?
Yeah, yeah, this, there would be some improvement because now things have started settling. Okay. The market has also seen some sign of recovery, and additionally, we have also now, since the best factor.
So, okay, so, I mean, so, would you like to leave us with a range for EBITDA margin, or it's, I mean, for full financial year now?
Sorry, line got disconnected.
Yeah, Abhisak, we were trying to say, you know, if you can just indicate a range for EBITDA margin, so about let's say 500 crores of EBITDA, what kind of margin is possible for FR27?
We would try to maintain the parity, but still it should be above 11%.
Yeah, it should be above 11%.
And you expect pad growth for this year?
Yes, pad growth would be there.
But we would still expect pad growth for the year.
Yeah, we would be pad growth for the year.
And broadly, do you think this margin decline is temporary or structural actually? It's temporary.
Plus, we also told you that it's about the type of billing that we do. So in quarter two, we did a good third-party product billing as well. Which you know, this is also one of our product segment. So, we got an order there, which we executed. Otherwise, practically speaking, you would see, Parashji, that there has been, because of our sustenance and being present in the market, we were able to execute the order. Else, the position would have been different.
And, sir, you know, Parashji, you have seen the market situation. In the power sector, in the dollar fluctuations, freight costs, supply chain, the disturbance, an interim pressure. Future is not dark at all. Future is very good. Lekin, first, the situation market prevailed. Iran ke war ko lehka jo chalga da. So that was more important was the continuity to be there in the market with order and the execution. And this is also what ProStadam tried keeping all odds out. Our focus was on delivering number. Even if the margin is on the lower side, important was to have the regular billing done on the books. And this is what we try to ensure.
Right, right, right. And I think maybe now, you know, broadly, you know, some sort of rate, you know, softening, moderation is happening now and probably will happen going forward.
Yes, sir, it should happen. But as of now, if you speak, it has almost doubled. The rate caps cost has almost doubled as compared to last financial year. So there would be some moderation, but if you look at silver, it was 70,000 now when we are speaking about 180, 190, it went up to 4 lakhs. So 180, 190 became the new normal. So that some cost increment would be there, which would happen.
But fat growth is possible for FA23 and about 7% every time the gene is what we expect.
Fat also an absolute term would be on the higher side, sir. It would be there.
Okay. Working capital flow, you know, I mean, capital days, I mean, you know, the issuables are also quite high. So, I mean, how do we see that, you know, and what is the realistic target now for working capital days, you know, by March 27th?
Right, right. Parash, there are three factors that resulted into increase in my working capital, and which you can very well relate with the expansion which the company is already taking. First is regarding data has gone up. The data has gone up because in the month of September, we've built around 86 crores of net revenue. Only one particular month, in the month of September. If you look at gross, 86 crores turns into roughly around 87 crores of billing done. 87 into 1.1. It comes to around 90 plus crores of billing. Only in the month of September. That is one of the reasons. And second, we have our inventory level because of the best coming in and with the buckroll facility now gradually coming up on the shape of starting the manufacturing. So our inventory level has gone up, which is now standing at around 120 crores. Which was early, used to be around 76-77 crores. So this has been a deliberate attempt to maintain the inventory for the future orders. Plus, there's a lead time supply chain disruption which you should maintain. So inventory level have gone up. And third, because of the CAPEX and the inventory level, my GFC, today, credit standard around 19 crores, 18 and a half crores. So, it is a conscious working capital blockage which has happened, but if you look at it on an overall basis, the cash conversion cycle in FY26 was around 132 days, which is at 189 days, which is not a significant jump if you compare with the expansion which the company is undertaking at this stage.
Right. So, sir, what are the average receivable days now?
Sir, average receivables, average receivables is something around, sir, 100 and, as per me, if I remove the one single billing, it is around 178, 178 is.
And further, Paraji, there is one more major collection, which is post-September. Data has gone down further. It was 257 crores as of H1, which dropped to 201 crores in October 2026. It has gone down. We made a collection of around 75 crores. of collection that we did in the in the in October quarter October month.
Okay, in the month of October.
73 crores of collection done in the month in this month. And additional big collection would also come from two of the major parties which would also be collected by December.
Right. Okay, I think that is a little bit of a difference.
But what happens, Paranjee? Correspondingly, again, since I have big order in hand, so those billing can again, if it comes towards the very far end of the financial year, we can find the skewness for a day, not for the quarter. Actually, that is what is happening. Right. Because in Mayan, like I told you, 90 crore of, 95 crore of billing done only in one particular month. So, it shoots up my total positioning.
Right. And just, you know, last question in mind, operating cash flow, you know, has been negative, you know, in the first half. And initially, we were expecting positive operating cash flow in FI 27. Now, with all these changes, you know, what is expected on that?
Sir, we are improving on that. If you remember, it was around 49 crore negative in March, March end. If you look at March 26, which is right now at around 17 crores roughly at this, at September end.
Right, right. So, for the full year, do you think that will inch towards positive or it will still remain negative?
Sir, we are trying our best to make it, but because of the CAPEX being done and the inventory level that I'm maintaining, so that is somewhat which is also impacting the cash flow from operating activity. But, sir, still we are trying our best and looking that we should be working on something which is very, very positive by the end of the financial year. And we have also, as told you earlier, we have also appointed ND. Now, we are also targeting billing through ND. We are not directly bidding in majority of the government orders. Even when Ramji told that 78% of the order in hand is related to government, but that is because of 856 crores of order of developer model. If you remove that, then majority, 70 plus order is only private. Even in H1, majority of the billing is only from private.
And, sir, I mean, for FY28 now, you know, what kind of sort of growth do you expect in terms of, you know, revenue and guidance and EBITDA margins?
Parash, as told earlier, 25% growth is what we are keeping always in tandem and with the best facility we now. And do you not ask this question? Still, I would answer it because other people would be also wanting to know what Ramji mentioned that yes, we have done a sample export of BES. I would not name the country right now considering I would keep it secret at this stage. So if the sample is approved, then we can expect good volume coming from export as well in next financial year related to energy storage. So, but however, on the moderation side, you would also find some revenue segment going down, some revenue segment going up, like manufacture solution would go up, best segment would go up. Though in the current financial, you are finding solar EPC volume been on high, but the same would not might not continue next year if we don't have a high value order. I mean, that's only selective basis order execution. So, high margin order and high value order that we are targeting for next financial year. So, 25% is the minimum expectation that we are keeping an eye for next financial year.
And which margin should get more normalized?
That would again return back to the same level, sir.
Yes, sir. It would return back to 20-13%. What we have told, it would return back. Because right now what's happening, the factory is started, but all the overhead costs is right now not getting, it's not possible to recover all the costs today. I hope this will also understand. It's a period when we are settling. So that additional load is also coming on the existing number. So, that would be the factor for some cost deviation in the current financial year, then improving in the next financial year. As like told, in BES already 54 crore of new order has been taken. 36 crore order of BES already built in the current financial year. And 54 crore of new order taken for execution in the current financial year. So, we are positioned for achieving 90 CR only in BES, which is a new segment for us.
Right. So, you put back, it will be back to 10% plus every time margin in FY28 with about 25% short of revenue growth.
Yes, sir. Yes, sir. That kindness is minimum value.
Okay. Thank you so much, sir. I will come back in a little bit.
Operator
Thank you, sir. Yeah.
Operator
Thank you. Ladies and gentlemen, you may press star and 1 to ask a question. Next question is from the line of Dheeraj Patel, an individual investor. Please go ahead.
Sir, can you hear me? Sir, my question is regarding our Janjer manufacturing facility. So, it's now operational. So, like, what is the improvement in our capacity on the best side? And also, it will help to reduce our dependence on external supplier and improve project delivery time or enhance cost competitiveness.
Yeah. Hi, Deirdre. Good evening. This Jhatseh plant, this capacity of this plant is 1.2 gigawatt hour.
Best assembling plant under single shift. And with the capacity to scale it up to 3 gigawatt hour, if we work under 3 shift. And you would find that capacity coming into picture from next financial year onward. Already, some export sample we have sent, that is around 16 kilowatts of storage facility to overseas, if that isn't clear, and we are also trying to go up with some business model, if that goes up, you would find some traction coming in there. And now you had asked about, what was the second question? This is about the capacity. What's the second question?
It's like, it will reduce our dependence on external supply or something like that.
See, BEST is a different product all totally. Here, it's an assembling plant. So, self-procurement would be done. Yes, assembling would be done in-house. So, when assembling is done in-house, so your dependency on third party would reduce. However, with regard to lithium cell, that would be continued to be imported, unless we go for some backward integration.
Okay, okay. Thank you. That's all for my side.
Operator
Thank you. Next question is from the line of Araf, Jain, and individual investors. Please go ahead.
Yes, Araf, Jain, you're Audible.
Thank you so much for the opportunity. So, this is regarding your Jajar and Bacrol facilities. So, I just want to know, as they ramp up, what kind of capacity utilization can we expect over the next two to three quarters? And when should the benefits of scale and operating leverage become visible in the financial performance?
Yeah, first giving answer about your buckrow facility. The buckrow facility is that plant has a capacity of producing around 3,000 pieces per day. It's a plant capacity, single-stage UPS. So it's a full-fledged UPS assembling plant along with lithium as well, lithium integration as well. So, that plant can generate a revenue of around 500-600 crores per year. With regard to utilization, the UPS that we were selling through procuring from third party or from customization, that would gradually shift towards our factory-based assembly. So, you can assume the number would spill from import to, import would still continue, but import with value addition would be the new change. Uh, UPS. Now coming to your Jajjar facility, Jajjar capacity, Jajjar facility, it is 1.2 gigawatt hour. So if it runs on full capacity percentage, you would find around a thousand crore of revenue is what we can post from that particular facility in an year, if it is being utilized on 100% basis. Fingership. However, Since it would scale on a gradual pace, you can assume and be focusing more towards the C&I side, rather than being on the utility level. Majority order are today with us also on the utility space, but our focus is more towards C&I side. The best tip of the utilization is expected to be around 25% to 30% next year from this. And with icing, if we get the export order, it would give a good icing on that particular number. So, you would find BEST capacity would take up shape over the next two to three years. Now, to add to it, you would be knowing that majority government has been very, very proactively promoting in-house manufacturing, India business manufacturing. Even the latest VGF scheme, which is about to be launched for 14,500 crores, in that 30 gigawatt hour is being kept for BEST. And the mandate asked is about a 40% should be local content manufacturing. Even though the PLI which government has come up, 10 GWh, that is also in order to ensure localized manufacturing. Third, government is about, I am not very sure, but I have heard some news that government is also looking to ban export of second-hand lithium so that the recycling can be done here in India. So, these are some of the developments which are happening on the best space. So, best would take a good shape on the utility side, on the C&I side, and data center side. So, you will find best segment growing up.
Okay, sir. Got it. Got it. That's it from my side. Thank you so much, and all the best for the future.
Operator
Thank you. Next question is from the line of Rohan Joshi, an individual investor. Please go ahead.
Hello, sir. Thank you for giving me the opportunity. Sir, actually, my question was around that, what will be your, going forward, what will be your next strongest growth driver? Like, for example, between best, Soda, EPC, manufactured power solutions, like, what will, like, what will you contribute to the incremental revenue the most, like, what's the medium-term vision? Just a ballpark.
Best would be giving the majority of the contribution. Stoler EPC that we do, we do on a very, very selective basis, RFG, where we find a good margin or it is from private. Like the recent best order that we have explored is from a private body. Solarium. So that type of projects only that we are executing. So next year, grow driver would be best.
Operator
Oh, Chris, thank you. Thank you so much. Thank you.
Operator
Thank you. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. Next question is from the line of Rohan Jain, an individual investor. Please go ahead. Mr. Rohan, you're not audible?
So, just one question, sir. So, what is your assessment of the current best opportunity in India in terms of tender activity and project implementation? And also, are you seeing a shift towards larger projects? And is ProStarM adequately equipped to participate in projects of significantly, you know, higher capacities?
Yeah, I'll tell you one thing. As a strategy, we have came out of our tax bidding with the government bidding tender for all small cases, like up to 5 crore bidding amount. So, we are largely, we want to focus on the very selective and limited tender, where bidding amount is also high, and we will be among the very few companies who can qualify for that bid, so that we can get a better commercial, better rate for those particular bid. Going forward, our target will be to remain focused on selective tenders for UPS, best for C&I, for special applications, not for the utility, where the competition is different, not easy, and suppliers are limited. So, we will be largely focused on these two, three areas, and a bank bidder, and otherwise, for the last six months, we have focused totally to switch over to private sector, where we are bidding through our partners' channels, and this, you will see a very big effect in our next financial year.
Okay, sir, got it. Thank you so much. That's it from my side, and all the best.
Operator
Thank you. Next question is from the line of Paras Chheda from Purple One Vortex Ventures, LLP. Please go ahead.
Yes, sir. Thank you, Mr. Hensel. Sir, this is a developer book, if you would like to counsel, please try to...
Operator
Sorry to interrupt, sir. Your voice is breaking.
Developer projects, if you would like to counsel, Thank you, guys.
Operator
Sorry, sir, we can't hear you properly.
Yeah. No, sir, I was trying to say, am I audible?
Yeah, we were trying to downsell this best project, developer project.
Yeah, we are in active discussion with a few people to lay off our existing to develop our project. And hopefully it should be, we can be through in any moment, maybe this quarter, next quarter, any moment. So we cannot give any particular information, but yes, active discussions are in process.
Right. And sir, you know, just from a broader understanding, I mean, so 62 crores of annual rental income is expected over 12 years, right, on this 854 crore kind of, you know, project base. So, you know, what is the profitability? I mean, the project IRR or the equity IRR on this, are these projects profitable?
Equity IRR is still there. See, margin had dropped in this on all the best developer projects, Paraji, because of the increase in the cost of lithium, of DC block, as well on one side, and dollar on the second side. However, now we are seeing some moderation happening on the dollar side, which is some sign of relief. But yes, on the equity IRR side, it would be more than 12-13%. And if you get the mover benefit, yeah, mover would be also an important play role. If you get the mover benefit, it would result into a better cash flow from the project. However, if you look at it, both the best projects which have been won by Prosparam is in last 15 to 16 months, these are the two highest bidded orders.
Last one. However, we are looking to downsell it and downsell both the projects that what we are looking for. We are in.
Right. And if we manage to successfully, you know, downsell these projects, there will be incremental value created, right? I mean, it will be still profitable.
Yeah, it will be profitable, but we are not very sure about the total margin side of it, because of the increase in cost, so because of that, there can be a margin depletion which can happen, which we are in negotiation with the buyer. As of now, since we are coming up with the Jharjar facility, which we have come up, and so our focus is towards working as like an OEM, or like a manufacturer, and that particular facility would require working capital, and it's better to be on the side of working capital minus base business.
Yeah, yeah. Leverage income carna chate, we want to leverage less on our books.
Correct. What is the probability? I mean, do you think there are advanced stage discussions or is it still uncertain as of now?
Discussion to ho ra paara ji. Jis din proper news mila, uns din hee news bata denge. But we are in discussion with around 6 or 7 player in industry for downsell of the best project. Par korn kis rate mein kya deal leke jata hai, yee abhi filaal meri lihe bolna difficult hai. Right, right.
And that is your short-term debt has gone to let's say 111 crores. So by end of FI 27, what kind of working capital debt do we expect or total debt?
Total debt is bigger, Parajji. The reason is that in order to support the stock inventory and your best facility, working capital requirements would go up to some extent.
Okay, understood. So, sir, you know, just trying to understand that next year, you are saying probably your EBITDA margins could normalize back to 13% plus.
Yeah, 12 to 13 percent. And so, sir, since, you know, the debt will go up, it will be difficult for me to also model. So, what kind of fat margin do you expect, you know, for next year? And maybe because this year, I think, sir, fat growth lana muske loka is what I understand. I don't know.
You said all the fat growth lana absolute growth would always be there because of the cost. And in H1's cost, the dollar was very rude behaved, and the freight was very rude behaved. But the customer was also targeting that the minimum to minimum pricing had been worked. So that was also the focus in H1. So the importance was to make a continuation of the business of it. Again, next year, if you look at it, my EBITDA, my tax percentage would come back to 26th level, or even more.
Yes, sir, you expect some sort of fat growth, you are saying, I mean, absolute percentage of fat growth, you are saying, and for next year, sir, fat margin, because then it will start improving also, because the fat rate is operational.
Fat margin will improve because, sir, in the best price, when we eat C&I, the C&I margin is more than that.
Right. So fat margin, what do you expect, sir, next year?
Next year again, guidance again came back to 8.5%. 8.5%?
And, now, if you are on net date, we are almost free on net date. If you look at it. Yeah, on the net date, 97 crores of FD is sitting in my book, with the corresponding 102, so 105. So we are comparatively in well position in terms of the overall net date leverage position.
Right, sir. And, sir, eventually, so inventory level, you know, once the situation normalizes, so do we then need to keep such high inventory level going forward on a certain level?
Inventory, we need to keep inventory, Parajji, because we also need to take into account the lead time for delivery. So, best segment has a lead time for delivery more than three months. And, I guess, advance payment. I guess, advance payment.
So, if we don't maintain adequate inventory, how will we service the market? Plus, even for our order, we need to keep adequate stock. So, today, whoever has stock is the king.
Right. Because, now, the situation is not going to be changed.
Now, when I expand, the number of days is dropped. But, at the turn, the inventory level would go up. Right, sir.
And just, you know, just last question, man, sir, you know, so 25 to 30 percent facility next year we are expecting in terms of utilization, correct? So, sir, and 1,000 crores you said in a single shift, and potentially you can do maybe three shifts or whatever, two shifts, potentially. Yeah, two shifts if there is demand. So, sir, three years down On the line, If we do assume, you know, peak utilization, I don't know whether it requires more, but I mean, when do you expect peak utilization? Because 500 crore is buckrol ka, and this one would be about 1000 crore. So when do you expect peak utilization, sir?
Peak utilization stays for three years.
Gradually. Even second year, we also see a good growth. Because, sir, afti facility ka credential develop ho jata hai. Based on the order that you're executing from your site. And even best is a demanding segment as of now. The advantage to this segment is, if I do the utility side, the single order value is also on the very, very big level. Like, today, the smallest best order that I have is of 5 crore. Second is of 11 crore. Third is of 29 crore. So, yes. So, you would find the average ticket sales is good on the best segment size. However, if you put TNI, it would be around 40-50 lakh of single order book value.
Right. What if you feel like I have a ticket, which is where the whole challenge of how to build up.
But margin would be better.
Yeah, margin would be much better. Correct. And the pressure on the utility sector is easing off now?
Still, it will take some more time for moderation. It will take some more time. Because whatever best project has been taken, it's not facing a good north wind, rather it's a south wind. In terms of execution and the project cost. So, it's a headwind right now. But market is very big. ESA had come up to a scale. They are looking for a target of 888 gigawatt hour by 2031, if I'm not wrong, is what they are targeting on utility side for bets.
Right, right. And despite debt going up next year, working capital debt, 8.5% to 9% bad margin is possible next year?
8.5% to 9% bad margin is possible. Best if I am able to do a good best volume, then that would comfortably give me a good margin.
So 8.5% to 9% is quite achievable, I mean acceptable bad margin.
Yes, about just our economy. This is about economy, how competitors are behaving, and how new expansions are coming up. So, but as of now, if I look at my assessment, it seems feasible. But external factors can decide here and there, but as of now, it seems feasible.
Fair enough, sir. And just last question, man, sir. You know, once we reach some peak utilization, you know, two, three years down the line, three years down the line, so what path margin do you expect then on a steady-state basis?
Paraj, it's too early to comment. Yeah, let's not speculate. It would not be a good answer. It will be difficult.
Yeah, I think it's, yeah, correct on a endless answer. Fair enough, sir. Thank you so much, sir.
Operator
Yeah, thank you, sir.
Operator
Thank you. Next question is from the line of Devan Shah from Eternal Capital. Please go ahead.
Yeah, hi. Firstly, thank you so much for the opportunity, sir. So, just wanted to ask you two questions. So, firstly, as I understand it and as I have been seeing the best industry move, I've seen a lot of players entering into it and moving towards becoming a commodity is not yet a commodity. But what is your moat given the increased competition and how are you seeing on the ground level, what is the differentiating factor that we have and competing with these players going forward?
As you correctly said, this has become commodity more than the technical product or solution, and that's why the whole industry is in trouble, because all the new players, unknown players have just jumped in, and as they have crashed the prices, and in opposite, China has increased the prices. So, the 90% of beta in the last one year, all are in doldrum. But this I take as an opportunity because people like us who knows the subject, who knows the product, they will take, we have all taken a calculative call decision on this for the future, future. What is best, and what will make a deficiency factor, it will be the local domestic content, because India has totally banned, almost virtually banned, the import of solar, raw materials, panels, everything. Similar will happen on the battery side also. And this will create a very big business volume or opportunities for the people like us.
Got it, sir. So, mainly it is on the technical side of things.
We are not built any tender for the developer or EPC. We want to remain focused as a manufacturer, OEM, and a solution provider. So, we don't want to call ourselves as a typical EPC, where the top line is big and bottom line is very minimal. So, we want to remain focused on the technology partner, solution provider only. This will create a big opportunity for people like this.
Operator
Got it. Thank you so much, sir. That helps a lot. Thank you.
Operator
Thank you. That was the last question for today. I now hand the conference over to the management for closing comments.
Hello. Yes, sir. So, thanks, thanks, all of you for joining us today, and And if you have any further question or query, please let us know by our IR partner and we'll come back to you. Thank you very much.
Operator
Thank you. On behalf of Arihunt Capital Markets Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your links.
