Ratnaveer Precision Engineering Limited (RATNAVEER) Q2 2027 Earnings Call Transcript

Good afternoon, everyone, and welcome to the Q2 and H1FI27 Earnings Call of Ratnavir Precision Engineering Limited. We sincerely thank you for joining us today. During today's call, the management will discuss the company's operational and financial performance for the second quarter of FI27, followed by an update on key business developments, strategic priorities, and the outlook ahead. This will be followed by an interactive Q&A session. Before we begin, I would like to remind everyone that certain statements made during this call may be forward-looking in nature. These statements are based on the management's current expectations and assumptions and are subject to various risk and uncertainties. Actual results may differ materially from those expressed or implied. Participants are advised not to place undue reliance on these forward-looking statements. Please also note that this conference call is being recorded for compliance purposes. Representing Ratnaveer, we have with us today Mr. Vijay Sanghvi, Managing Director, Mr. Ajay Banchal, General Manager of Finance, Ms. Swati Jatap, Finance Analyst. I now invite the management team to deliver their opening remarks. The presentation has been shared on the exchange, which you can refer later. Following the address, we will open the floor for the Q&A session. Thank you, and over to you, sir.

Thank you so much, team FinPortal, and good afternoon to all. I, Vijay Sangvi, Vengeance Director of Ratnavale Precision Engineering Limited, welcomes you all on the virtual call of quarter two earning calls. So, I would be thankful to everyone who have been spared their time and to understand the company and to understand the Ratnaville in a better shape. So, this is a call and the intention that the management can be in touch with the investors, institutions to understand the better results and give us the guidelines to follow it, how company can be followed further. Thank you. Thank you so much. So, here I can present the company Ratnavir at a glance. Ratnavir, 26 years, passed into the journey of the manufacturing business. Company's overview would be that it's established in 2002, and it would be a continuously ongoing journey. We have five different of the facilities. Total 46 tons, 668 tons can be processed. Total 800 plus employees have been working. 31 countries global presence over there. 219 client base having that and a lot of many client base that can be put down onto the screen as well. So you can see the very clearly the screen up front to you. Q2, can I continue?

Yes, sir, please continue.

Yeah, so this is on the journey of the growth of integration and the diversification from 2002, 2003, 11, and the 13 to 19, we set up the backward integration process and completely established the track record. Also, having EEPC Star Expo House for last award and recognition for 16 years consecutively. Also, in 2021, the tube manufacturing can be started. In 2023, the company has been done the main board IPO. And 2025, the company has been also integrated facilities of the preferential issues can be completed. QIP can be completed. And in 2026, also, we have been done. We have done the ECMS approval, and also for the CCL project announcement. And in 2027, for the part of it, we have been done the right issue and the CCL approval and commencement of the project. Please, next. So, the product portfolio, we have been having a cover-up of the stainless steel fasteners, nut and bolt, stainless steel clips, stainless steel washers, stainless steel tubes and pipe, finishing line, and the steel metal components are the key product over line over there. And we have been 90% of the power can be used by the green power. Company has been certified with the ISO 9000, 14000, 45000, and CE certification, BIA certification will be there. Also, there is a long-term credit rating would be a negative, a minus stable. And also, there is a 100% forward and backward integration company. Servicing to the global market across the 31 countries and 89 distributor partners to under 19 clientele base, mainly into the European, all the European countries and Asia Pacific, Middle East and the West of the world. So, we have been located into India, and we have been serving to the ninth state of India. Next, industry overview and structural tailwinds across all verticals. So, the reason the industrial fasteners would be demanded from 91 US dollar in 2025, and CAGR growth with 115.67 billion in 2032. Also into the stainless steel market, which can be moved further for the US$2.25, US$1 billion to $353 billion up to $2034. And also there is a 73 gigawatt industrial 2024 for solar roofing hooks, which can be increased to 500 gigawatt up to 2030 renewable targeted buy. And also there is a 2024 for tubes and pipes, the 37.18 billion dollars to reach to the 60.14 billion up to 2034. Next. So this could be a very much new and the first beginner line is a copper clad laminates, which called as a CCL, which is a mother of all kind of the electronics and the PCB industries, which can be used for the all kind of the PCB manufacturing for the data. And for the clips, for the drone, for the all-electronical appliances. And India's PCB market by 2032, the expectation would be the 176790 crores. And Indian CCL market would be reached to the 30,000 near by the 29880 crores up to 2031. And also, the plan investment by Ratnaville is 338 crores over the next two to three years. Also, it can be approved with the ECMS scheme by Gujarat government as well as government of India. And also, this can be also covered the 86 crores of the solar plan investment also for the captive consumption for the solar. So, in case of the financial case, that is in the revenue, which have been expected, that is 150 crores from the first line. So, total 750 crores. The management has already been given the guidelines in last quarter also that we have been expecting from all the five lines, 750 crores top line with 20% EBITDA and 13% of PED. But the new revision of the guideline because of the corporate laminate have a turning curve, and it could be a changing curve for the company, 300% of plus price are been increased. And this revision of the guidelines can be announced very soon and very shortly. So till time, we have been just keep the same target and the margins over there. And there is a huge export. So, the margin gap can be increased and it can be a bottom line can be drastically improved. So, but the very soon we can be present over there for the new guidelines and the new revision of the numbers. Next. So, Q2, Financier 27, the key business updates from the revenue of the operation is a 387 crores is a revenue operation which is growing with 35.46%. Equally, the EBITDA can be reached to the 42 crores and 0.13 crores would be 38.85% would be increased. And the PED, the 24.07. So, 55.97% can be jumped. It was a phenomenal and the fantastic numbers and the performance by the company. And it was the historical highest presence over there. And the pet margin will be jumped with 6.22%. EBITDA margin jumped with 10.82%. And the net worth has also been jumped with 156%. Equally, the return on equity will be 9.66%. And return on capital employed will be 13.31%. So, this was the fabulous and the fantastic growth which we have been committed over there and we have been sincerely worked towards this and we could be grateful and thankful to all the members who have been associated directly or indirectly to the company. As well as the CCL project update, the facilities of the civil work and construction was almost completed, like 75%. Mercenaries is on the way, expected to mid of November to India, and installation time would be around 45 days. Estimatedly, the December 20th to January 20th would be a trial run time, and from December 20th, the product run can be started. That was the visible roadmap right now, and we have been working towards sincerely over there. Next. Okay. This is Ratnavira in the spotlights. So Ratnavira will be into the spotlight of the money control, mint, and also the right issue can be approved and success. And there is a lot of other social media and the networking. It was a continuously ongoing. Please. The P&L consolidated, these are the numbers which have been already presented over there and during the question answers, if anything would be required specifically, then we can answer you on the specific numbers and the segment wise. Also, there is an individual questions we can be answered separately. Next, this is the half yearly trend and the strong leadership with the deep execution experience, the Vijayar Sangvi, the Sima Sangvi. Also, there is a chartered accountant, CA, Swati Jakthap, and also the Ajay Panchal is with me right now. This is the normally the disclaimers, and thank you so much for the presentation. Thank you.

Thank you so much, sir, for the great insights. Now, we will begin the question and answer session. I request the participants to please use the raise hand feature, and we will take the questions one by one. To ensure that we are accommodating as many questions as possible, we would request the participants to limit themselves to two questions per turn. You are welcome to rejoin the queue if you have any additional questions. To begin, we will take the first question from Srishti Jain.

Hello.

Hi, Srishti. Hello, good afternoon.

Good afternoon, sir. Sir, you guided yesterday on an interview that, you know, you're looking at margin expansion from 10 to around 13%. So I just want to understand the main reason for that. And will it be just like valued at products? And I also wanted volume numbers like for both YOY and Cotter and Cotter, if that is possible.

Thank you so much to connectors. And I can be just given you the highlight that's the 13% of the pet numbers can be increased because of the company has been focusing into the volume to the value and very much sincerely focused. Our pet margin was increasing very sharply. And looking to this guidance, we have been given the guidance of 10% on the consolidated for effort. But we have been looking forward to the 13% PED because the CCL profit margin and the expansion of the margins will be possibly higher than this. But considerably, we have been looking forward to it. And we have been very much ensured that our new guidance will be coming up very soon. And you can see the clear roadmap and the financial program over there. And number two, your question would be on to the, what is your next question?

Volume numbers for wire wire and Q&A comparison.

So volume numbers that I have been already suggesting that we have been looking forward up to FY28, that is with the CCL old numbers which is given past guidance, including consolidatedly we are looking forward to 2500 crore as a top line with EBITDA of 14% and the PAT of the 11%. But these numbers can be very soon, guidance can be changed with the newly numbers can be reproduced again, where the margins have been improving a lot. Thank you.

Sir, I want to understand base business volume.

Base business volume in terms of?

The current business that we are doing, steel pipes, washers.

Yeah, but on the side of the revenue, you want to understand? Volume means revenue-wise?

Yes.

Okay. So, that would be, we have been doing, this year, last year was 1080 crores. This year, we have been reaching to the target of 1350 as a projected plan, and we have been very much in line with this year's projections, and up to FI 28, we have been targeting to reach to the 1800 crores as a total.

Okay. And so last question.

Yeah, please.

The finish line business is, you know, running near capacity. So are we expanding there also?

Yes, our capex for phase two for fasteners, tips and pipes, also for the sheet metal components and clips, which is already ongoing. And this year also we have been expanding, spending into the capex of around 58 crores, which is already planned for the last year also. And this can help us to reach to the 1,400 crores top line to 1,800 crores as a top line.

Thank you, Shishu. We will move on to the next question from Mr. Priyanshu Jain. Priyanshu, you can unmute yourself and ask the question.

Hi, I'm an audible, sir. Yes, very much. Hi, sir. First of all, congratulations on the numbers. So, my questions will be on the CCL side. I'm really sorry, like, if I have missed the initial commentary, I wanted to know that we will be doing a trial phase between December and January, right? Can you tell about the recent developments? Have the China team have already arrived? We are working as the things will going to progress further. So like have they arrived in India and like the developments have already started as we are going to like bring the machines by November, mid-November. So, and after the trial production, when can we expect from the trial production to at a full-fledged scale where we will reach around 60 to 80% utilization for our first or second line and for as we like going to progress for the five lines. So, I think the demand is not the constraint. How much time it will take to be commercialized at a full utilization for all five lines? This is my first question.

Okay, so can I answer your first question first? Thank you so much for your kind words and appreciate the team. And number one, about the CCL progress, which I can already mention, but I can again happy to mention you that all the civil work was completed. So almost 75% of the site was ready. Number one. Number two, machines are on the way. And by 15th or 20th of November, we are expecting the machine can be arrived. In a country. Number three, all the machines are being equally on the sea. So the foundation work is also being ready. So we need the 45 days to 50 days, estimatedly, for the commissioning and erectioning of the entire machines over there. And after that, we can start our trial run, which is targeted by 15th to 20th December. And one month would be a trial run on the product development side. And after that, The capacity to realisation, every month we targeted for the first month, for example, is a February, so 30% can be in February, 30% additionally can be into the March, so 60% in March, and 85% we can be reached up to the April. That is what we have been targeting and almost we are on wait. Number three, the Chinese team are been expected to arrive by 15th of November in between the 15th to 20th of November in India to install the machines. And also, we have appointed CTO as a chief technical officer, having 30 years of experience. He's a Chinese person and who are going to execute the entire machines in an installation part, quality, product development, system developed, and having an enriched experience of 30 years into the multiple industries, into the CC. And he has been enough experience to run the same kind of the machine. So we have been quite confident over that. Just initially, teaching errors might be a one week or two week, we can be here or there. But looking to this roadmap plan, we have been working with very sincerely and over there. And number four, the almost by April 27, we can be reached to the 85% of the capacity. Thank you.

Sir, 85% utilization will be on the two initial lines?

No. First, we are going to start by the one line, which has been ready. And after that, in December, January, we have a target to order for the new another two lines, which are been expected to start up by the first, the second line would be into the June 27. And third line would be into the September 27. After that, after the two lines, another two lines can be installed, we have been placing the another two line of the order, which can be targeted by January 28, and April 28 can be started. So all the five lines can be installed up to April 28. That was the roadmap was decided.

I'm really sorry, just a follow-up on this only. Sir, on the Chinese team, only the experienced person who is having the experience of more than 30 years or apart from him, like the other engineers from the team?

Other engineers of each machine of 22 engineers have been arrived. And the one person who has been staying here for the next two years to set up all the lines up to the quality, handle the plant and the production and the quality of the product. So total 22 plus 1, 23 people are arriving for the installation of the facility.

Thank you, sir. I have many questions, Moo, but I will take them offline. Thank you, sir, and all the best. Thank you so much.

Thank you. We will move on to the next question from Mr. Meeth Mehta. Meeth, you can unmute yourself and ask a question.

Thank you for the opportunity. So my first question is, as we have seen that the prices have increased, so how does your margin impact when the prices increases or decreases? So, is it dependent, your margins are dependent on that, or is it just cost plus model? And should I go with my second question or take one by one?

No, you go with the second question, no problem. And you are talking about this price increase for CCL?

Yes, yes, for CCL. And my second question is, in CCL, we have the different TG value grades. So, which one are we targeting? Which temperature glass grid are we targeting for this one? And what would be the end-user industry that you will be focusing on? And is there any other plans to diversify into different, what do you call, grades and end-user industry? So, just a color on that.

Okay. So, first question for the increasing to the prices of the CCL. So, as we all know about it and the many of the circulations have been already been uploaded. So, in the last year, almost 300% plus price have been increasing. Okay. And because of the shortages into the CCL, demand was very, very high and the supply was short. And the ultimate result would be the price increase. So, this can be, and raw metal price also increasing equally, but it is not equally to the 300%, but it can be increased to the 40% to 50% maximum. And in India, there is no producers have been available. So, the Chinese people having a local demand in China was very, very huge. And so, if the Indian companies want to CCL, they can be asked the monopoly and they can be asked the additional cost and the price can be escalated and improving. So, this can be very much clear that the price increases from the CCL, they must have to be passed to the PCB manufacturers and they can be collected. That is the job of the PCB company. Number two, for the TG value, we have been producing from 140 TG value to 180 TG value and concentrated business segment. All the PCB industrial manufacturing company in part of it, that is an automotive company, EV vehicles, electronic vehicles, as well as to the drone industry, as well as to satellite equipment, aerospace, and all kinds of the electronic devices that can be used for the CCL. And we have a latest, modern, and first-class facility which can be produced from the lower grade to the higher grade of the facilities of the multi-layers. Also, we can be do. FR4, we can be do. Pre-pack, we can be do. And also, there is a lot of other articles on the one side, two side, the 18 microns, 35 microns, 15 microns, 17 microns, we can be produced. Also, thickness range, we have a massive thickness range into there in one plant, the 0.8 millimeter to produce for 3.2 millimeter also. So, there is a very wide range of the products and cover up all sectors gradually and slowly. But we have a facility which can be produced all kind of the TG values over there. The maximum TG values right now can be used for the critical component as a 180 TG value and starting from the 140 TG value and all commercial grade below 140 TG value is a very simple product which can be used, manufactured very easily. Thank you. Thank you so much.

And one more question, just a smaller. So, are there key talks for implementing anti-dumping duty on CCL as government is trying to, you know, localize this thing? So, do you, have you heard any talks on that?

No, no, no. There is no one producers available in a country right now. So, there is no scope for any kind of the anti-dumping duty. There is a huge Shortages are being available, our PCB manufacturers are being empty with the CCN, so there is no scope for right now for any kind of the anti-dumping duty can be done. Anti-dumping duty can be done only and only when the local industry can be injured and local industry having equal, if the importers are being dumped the product and the local industry can be injured, then only the anti-dumping question will be coming out. So, right now, there is no question about it because there is no manufacturers available. So, no injuries can be possible. Right now, the CC are living in a huge shortage. So, no question about it.

All right. That's clear. Thank you so much.

Thank you. We will move on to the next question from Dia Jin. Dia, please unmute yourself and ask the question.

Hello, sir. So, just two questions. So, when we expect trial productions in December, Jan, when can we expect a customer ramp up to happen? And what is the reason for the lower employee cost?

What is the reason of?

Lower employee cost.

Lower employee cost in the current business?

Yes, sir.

Okay. Yeah, yeah, yeah, I understand. So, the first CCL customers part, we already have been announced and given the circulations that we can start up our marketing activity already. We take the visit, the exhibitions into the Bangalore. We give the engagement into the magazine itself. And it could be a very popular company right now as a Ratnavir into the CCL. So, we have been already personally visited to the PCB industries of the key customers over there. Already the 57 visits can be done. And it will be very warm, pleased, welcome to us in the industry because the CC is having a huge shortage. Number two, we have already been received some of the orders confirmations over there. Also, we have been received some of the long contracts can be done. And also, there is some of the contracts and discussion which is in pipeline. And very soon, in the next couple of weeks, you can be hear from the exchanges also that the order booking and the long-term contracts for the regular requirements can be solved. So this was very well taken off and the demand and the order booking is not a big question right now for this product. But important is how we can tie up in such a way that can be important. Number two, about the lower employee cost, the employee cost would be into the continuous part. Some of the employee cost, which can be part of the project cost, can be capitalized. That's why it cannot be shown. And number two, some of the cost can be represented into the job work cost, which can be on the contractual employees that can be on the job work cost can be considered. So that is why you can be feel onto the analysis side that the employee cost will be looking after the smaller one, but it can be very well controlled and it will be into the same line. Thank you.

Thank you. We will move on to the next question from Mr. Mayank Agarwana. Mayank, please unmute yourself and ask the question.

Thank you, sir. Thank you for the detailed presentation and question. And I really want to mention one thing here. I really appreciate your efforts to early identify the CCL opportunity in the country and took the courage to enter in this thing which you have never done earlier and even move forward. Somebody has earlier done in the country. It's really appreciate this kind of entrepreneurial stuff. Our country really need entrepreneurs like you. Thanks. Thanks for this. And my question is basically, we, with all this five line functioning, we will just be 2% of the market, as you mentioned, the PPT 1.8%. Are we planning to add more lines going forward or how we are thinking on that? Secondly, China has stopped exporting a lot of equipments and a lot of engineers of particular segments. Do we come into that or not? My second question is that. And third question is competition. Do you think there can be more competition would be coming in in CCL to us or we should not be worried of the competition because there is enough demand there? Yeah, these are questions for me.

Okay. Thank you so much, Mike, and very much grateful and thankful for your such a kind words about the entrepreneurship and the leadership. This is all about the diversification and we have been committed to grow and we want to be growing to the futuristic business. And that's why we select a line that it can be for the next future is about the electronics and the digital India. And CCL is one of the ecosystem products which can help us to make it sustainable digital India, making India systems over there. So, we could be one of the applied material part of it. Number two, your question would be about the CCL file lines and the 2% of the market. Yes. So, an addition of the new line. So first, our target would be to establish the one line, to establish into the quality, delivery, services, and the quality of the product, which can be used for all the segments up to the 180 TG value, which can be a very critical, complex products can be used. So, our target would be this, to first establish into this line. And we have been very confident because we have a great team, experienced team, talented team. They know about the machines and they know about the product and they know very well knowledge about the product. So, we have been very much confident on their experience till now. And number two, about the addition of the five lines, yes, definitely, the business was growing with 50 to 60% of CAGR growth. And the huge, huge demand would be there. In India, it cannot be right now the beginning. So that's why this is a huge business over there. All the PCB players are being fully booked for next two years, three years, four years, also entering into the long-term contracts. So the demand of CCL will be regularly feeding to the all PCB manufacturers. So definitely first establish one line. Then we have a plan for the 18 months to the remaining four lines to establish. And then after, we definitely look forward the business and we definitely increase the volume into the same line. And because we are the first mover, and we definitely get an opportunity to serve the maximum to the markets. Number three, about the China export for the equipment and engineers, no. Our government and the Chinese government have a healthy relationship for the equipment, and it could be covered under the ECMS and P&I scheme. And there is a huge and the big support from the government side also. And they have been freely available for the engineers to come India and establish the machine. And for equipment is also there is no restrictions. And about the competition, when the market was growing with 60 to 70% of CAGR growth, and the zero manufacturers are available. So this is the just startup. So there is no any kind of the right now, there is no any kind of the saturation will be coming up. So, competition will start when the saturation of the market will be coming up. So, at this moment, this was growing with 60-70% of CAGR growth and number of the industries have been investing and the number of the companies and the huge investments into the semiconductors lines, data centers, and as well as chips, the business have been coming up and the investment has been going on. So, at this moment, there is no scope for any kind of competition would be arrived. Yes, we have to maintain the correct quality. We have to maintain the delivery services and the product first class and the margins have been intact. And because much more players have not been there, so no internal fighting will be there. And after the five lines, we just captured the 2.5% of the market. It is almost like nothing. So, no market share will go. Our target would be this. In the next five years, we can be reached to the target of around capture of 7% to 8% of the market share. That was the first vision for the company is to reach to the capturing the 7% to 8% of the market share from 2% to 8%. This was the point. Thank you, Mike. I think all your questions will be covered. Yes, yes. Thanks a lot and best of luck. Thank you.

Thank you, sir. We'll move on to the next question from Mr. Abhay Singh.

Yes. Hi, sir. I'm Uribe. Yes, sir. First of all, congratulations on a great set of numbers. My first question is regarding the CCL business. Have you secured any off-take agreements or customer approvals as soon as your capacity comes live? And these customers, whether are they Indian PCB manufacturers or you are going to supply to overseas customers.

Thank you so much for your wishes. And we already received some of the orders from the Indian domestic market first. And also it could be a PCB manufacturing company. And a lot of discussion for the long-term contracts and the soft confirmations are being available. And I already told that in the next couple of weeks or the three weeks, we will be announced to get the confirmations of all the orders. And so, right now, for the first line or second line or the third line of the business, the market and the customers would not be a big issue. Important would be to establish the machine, the deliverance of the quality of the product, Equivalent to the inputs, we have to establish the product quality, we buy the machines equally, we set up the facilities 100% equally to the global companies, and now our task will be, the next task will be this, that we can maintain the quality of the product into the first category, and once upon a time, this can be done, all the companies, PCB companies, and the user of the CCL will be across to us. Thank you.

Okay. So, my next question is regarding the working capital requirements. So, for the first line, which we are putting for almost 15 lakh sheets of CCL, how much would be the working capital requirement at the initial utilization levels, and what will be the requirement at the peak utilization? And how are we going to fund it? And so, the next question is, like, Like, the commissioning would be happening by at the end of December, right? And the production will start from January onwards. So, like, what are, is there any particular risk which might delay the commissioning of the CCL line, like, beyond November or beyond Q4, like, such as the approvals or, like, orders or trial production? Are we facing any such risk as of right now?

Okay, about the working capital part, we have already been done a very successful IPO, right issue IPO of 330 crores, which can help us enough to be a liquidity fund available for the working capital to be sold, number one. Number two, about the delays. So this could be first facilities in the country. We have a roadmap plan. Up to this till now, we are online and up to the machines can be produced and delivered that can be done in line. Civil work and the other approvals are being online. So there is no delay at this moment. Once upon a time, we can do the successful implementation and successful commencement of the machines. And when we run the machines and the synchronization of all the machines together, might be possibilities of the chances that it can be set up one week, two week, here or there. That can be possible because it's the initial teething challenges will be there. And also, after that, we run the first batch and second batch and try to establish the formulations in pre and as well as to the glass fabric speed and synchronization of the all the raw materials as well as to the product. We have a technical team, they know the machine, they know how to run the machine, they already run this machine, so there is no much more delays will be going on, but yes, initially setting up We have a feedback from our team and they have been very confident and they have prepared And I'm going to share this roadmap to you. This is the point only. Thank you.

Great, sir. Sir, just one final question. So, like, sir, regarding the cash flows, so, like, the new segments which we started in the end of FY26, which raised our inventory and receivables in the FY26 end, so we usually expect the cash flows to come in the next half. So, like, is there any reasons why the cash flows have not come through in this first hop also? And when we can expect the cash flows to start coming?

Yes. So, that is, cash flows can be available. And for the CCL business, this year, we have already not calculated any kind of the revenues would be from here. And the operating cash The cash flows would be just under the pressure because of only and only to the capex and the loading of the capex is ongoing. So once upon a time, this capex can be stabilized. All the capacities can be utilized in a full operational. Definitely, this cash flow can be coming up positively and this can be very much well within the line and it was into the very much clear roadmap would be there.

Thank you, sir.

Already, if you can see that from quarter 1 to quarter 2, that can be improved also.

Great, sir. Thank you, sir. I'll join back with you.

Thank you, sir. We will move on to the next question from Ms. Disha.

Hello. Am I audible, sir?

Yes.

Yes, thank you so much, sir, for this opportunity. Just two questions, sir, from my side. Firstly, sir, for this quarter, we've seen EBITDA margins have moderated a bit to 9%. So, what has led to that? And what's the bad margin, sir, that you mentioned that we're expecting for this year?

So, the EBITDA margin for quarter 2 is around, in terms of the value, it is up 42 crores compared to the quarter 1 is up 37 crores.

No, as a percentage, I'm saying it's 99.4%. So, what has led to this moderation?

No, if you can compare with the quarter one, quarter one was 11.25% and quarter two is a 10.73%.

I was talking about without including other income, sir.

Okay, only the gross margin.

Yeah.

Yeah, so gross margin can be in a quarter one is a 10.23% and in quarter two is a 9.44%. So, it could be a marginally, marginally dropped because of the only and only the reason was the new product has been on way and the expenses can be booked and the sales can be coming up. So, might be that would be a slightly the cross margin can be dipped down, but it could be a quarter and a quarter, it can be improved.

Okay. And so, what's the bad margin that we expected for this year?

The pet margin was this year is expected to the by the around around 6.25%.

Okay, okay, fair enough. So just on the tax rate for the full year, because this quarter tax rate was only 13%. So what is going to be the tax rate? What should we model as the effective tax rate for this year and for going ahead?

No, so it could be normally depending on the calculation of the depreciation and the calculation on the expenditure of the R&D and all of the things. So the tax rate can be a slightly change over there. So it can be worked out with the auditors and the team members who have been looking after it. So I think the tax rate will be nearby to the last year is also the 15% or something else. And we can be worked out. This year also might be a same tax rate or the nearby to the, this tax rate will be going on.

Okay, okay. And so just the last thing on the CCL side you mentioned, we've seen there's been 300 to 400% sort of price increases. So, sir, what sort of increased profitability, increased margins should we expect based on these assumptions? I know you're very conservative given the numbers that you've given, but given the way the prices have moved, what sort of potential EBITDA margins can we get now from this CCL business?

Disha, it would be a very interesting question, and I am also very happy to answer this, but this is at too early at this moment. Honestly, the company has been receiving the order from the two companies already. Long-term contract discussion is going on with the seven companies already been there. Very much positive response are been there, and we are getting the very attractive profit margins over there into this order also, and order volume is also very,

Good morning, everyone, and welcome to the call. We will move on to the next question from Mr. Vineet Khatri.

Hi, Vijay, sir. Very good afternoon, even Ajay, sir. Good afternoon. Congratulations for a good set of results. Sir, I know you are telling about disclosures about your potential customers in a week or so, but just directionally, if you can tell us, since Wipro Engineering, one of the other players who have also put CCL lines, they are present in South India, right? So are we approaching players, PCV players in Gujarat and northern region, or are we also going to, like you mentioned, 57 companies you have visited, right? So are we also going to the south, right? And you also mentioned about 3%, 300% price increase in this ACL pricing, right? And even 500 crores of turnover from one line is possible. So, directionally, if you can tell us what are the right to win for us? Are we providing them cheaper pricing than what they are currently procuring from China? Are we providing them better lead times? Or what are our propositions to them?

Yes, good afternoon. We will be very happy to see you on the call and very happy about your questions. About the customers, yes, we will be getting it very soon about the knowing that how we have been moving ahead. And we have been open for across the Pan India and we have been moving to the Pan India to the all OEMs. Right now, all the PCBs are being empty with the CCR. So everybody welcomes us very pleasurefully and the entry point was very, very clear. They are also directly approaching us and they are visiting us also. They are meeting us and they are excitedly waiting for our production to come out and we can come across the agreement and the contracts. Number three, about the turnover, that is depending on the pricing. Right now, whatever the price is going on, we can be very comfortably and conservatively reached to the target of 500 crores in one line. That looks very easy and very prominent. At this moment, management has not been announced the guidance, but yes, looking to the order positions and the current pricing, this was the very phenomenal numbers. About the price increase, that is very well known to all the industry. And the articles into the newspapers, magazines, associations are available. So everyone knows about it very clearly. So about the CCN, all the things are been very clear. And first, our target would be to approach across the Pan-India, to the South India, North India, as well as to the West and the West. West and the North, East and South. That is all covered up by us. Also, we are looking forward and the very much excitedly inquiries coming from the Japan, US, as well as from the Europe as well. So this is what also the very much pleasant that the exporters, they are also been looking forward because the China, Taiwan and Korea, they have been manufacturers, key manufacturers, and they have their local demand was very, very huge. Industry is growing with 70% of the CAGR growth, which is very, very, very huge number. So, they don't have excess material to export it in India or the other countries. So, this is what right now is going on. Thank you, William.

So, irrespective of pricing, sir, I mean, we are in a situation where we can even command higher pricing or probably similar pricing to what people are importing from China and still get the customers.

True. At this moment, for the initial booking and the pricing for the attractions, we can be kept to the end per pricing with the Chinese or slightly half percent or one percent lower than the Chinese. And they can get the extra advantage of the lead time. They can be extra advantage of the logistic cost. They can get the extra mileage for the foreign fluctuation risk. And also, they can get the deliveries quicker and faster. Also, they can be ordered what they required and what they want. So, these all are the hidden advantages, which also impact a huge cost.

That is very good to hear. And in fact, the guidance that you've given about 7% to 8% of market share that you want to capture for F530 probably with the price increase that has happened, I think in a few years, you can get to a market Great share of more than that as well. And so one final question from my side, with respect to working capital, since the raw material pricing is also increased by 40 to 50%, as you mentioned, correct? So are we looking, I know you have done a fundraise via riot issue, and also you have good past balance as well from the fund raise, but are we looking at any fundraising via equity route anytime soon, sir?

No, not at all. There is no any plan for the right now for any kind of the equity raising or the new fundraise of anything.

No. All the five lines are probably covered, right, sir?

Even the working capital for them will not be a challenge. Mostly all the five lines have been covered. For the TUM loan, if you require, then the bank will be available and the interest-free subsidy and the ECMS PLA scheme is also been available. So there is no scope over there also. And there is a 50% of the cash subsidies also available. So in coming years, this 50% of the capex amount is also coming up as a cash flow to the company. So company having enough cash flows in the head.

Perfect, sir. And I think, sir, there is also an incentive of 1 or 2% to the buyers of CCL from you if they are procuring. So what is the exact number, sir?

2%.

2% of purchase value, they will be subsidized by government. Exactly. Perfect, sir. All the best, sir. Looking forward to meet you offline as well soon. Congratulations, sir, once again. Thank you so much. Yeah.

Thank you, sir. Sir, I have one question in the Q&A tab. I'm just reading out it for you.

Sirma SGS was supposed to start a CCL plant, but confirmed in yesterday's call that they are postponing the CCL plant. So, this could be a big plus for Atnavir. So, how many other companies are planning CCL plants and what are the updates?

So, madam, that was very clear about the Sirma SGS was. Sirma SGS are an expert and talented manufacturing company. They have been into the PCB manufacturing and they have been leading into the PCB manufacturing company and we respect a lot to this company. And they are more focused into the flexible PCBs where the very limited players have been producing such kind of the PCBs of the critical complexes, critical compliant products. So there definitely we know about it that their main focus will be developing to their core area, which is very important for them, which they have expertise and enough technology, technical know-how they have available. So, they definitely look forward to the forward integration part where the margins are high, where the bottom lines are high, and the order book was fantastic. So, at this moment, we already know about it that they have not been looking forward for the backward integration right now, where the saturations would be there, order would not be there, competitions would be there, and if they want to cut the cost, then only the people can be looked after for the backward integration. So there is no question about it that this very renowned and the very renowned group and expert group can be looking after the backward integration initially. They definitely look forward for the forward integration. And this was a fantastic move by them. And the flexible PCB was a huge market in our country as well. So in coming years, it was a future and it was a fantastic product over there. So, it is a big plus for definitely the CCL manufacturers in a country, because some of the people have not been coming. But right now, the serious start by the Vipro and Ratnavill, it was very well noted. The other peoples might be planned, might be think over it, might be think initially right now or might be in a one or two years later. But the very serious manufacturers will be coming up. That is two names which we are knowing. That is one is Wipro and second was Ratnaware.

Thank you so much, sir. That was the last question for today. I thank all the participants. I now request the management team to please share their closing remarks.

Okay, so it is done?

Yes, please share your closing remarks.

Yeah, so on behalf of the Ratnavir team, from the bottom management to the senior management and the board members, I myself Vijay Sangvi, Ajay Panchal and the Swati Jakta would be very much grateful and kindly acceptance our gratitude towards your kind words, your interest to the company, to understand about the company, to know about the company, and your interesting questions will be Inspired us always, motivate us always, and we as a team Ratnavir would be committed to the grow and committed to the balance grow into the diversified areas. Whatever the management has been announced or management has been given the guidelines, we are committed to deliver these guidelines and we try to be part of the Indian growth story. And also, we are also trying to the developing the new diversified areas where the opportunities are being good. The future of the bright and the sunshine was fantastic. So thank you so much to hearing us. Thank you so much for your participation. And thank you so much for your understanding to the company very well. And I hope that I have tried to give your answers very satisfied. And if you have any other questions, you can connect us to Ajay and Swathi, it will be available. In case of Ajay and Swathi would not be responded, we have been here to answer it. And thank you so much for this call, for your time and cooperation and support and the best wishes. Thank you Finputal team to coordinate us in such a huge participation and such a nicely arranged call. So, we've always been grateful and thankful for the FinPortal team to put your extra efforts and always been transparent with the investors and institutions who will be there. Thank you. Thank you so much.

Thank you so much, sir. On behalf of the FinPortal team.

And one more thing, we have been very much near to our auspicious festival, which is the Diwali. So, I want to wish you everyone for happy, safe, and secure Diwali. And the new year, this new year will be giving you a lot of happiness and success in your life. Thank you. Thank you so much.

Thank you so much, sir. On behalf of Finn Baudel, I would like to express a sincere gratitude to the management team for taking out the time to share the company's performance and address all the investor queries. If any query remains unanswered, please feel free to reach out to the email address given in your chat box. A recording of this earnings call will be made available in due course. Thank you once again for joining us. This concludes today's earnings call. You may now disconnect.

Thank you. Thank you.