Venus Pipes & Tubes Limited (VENUSPIPES) Q3 2026 Earnings Call Transcript

Ladies and gentlemen, we welcome you all to the Q3 and 9 months FY26 earnings conference call of Venus Pipes and Cubes Limited, hosted by Dam Capital. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as of the date of this call. These statements do not guarantee the future performance of the company and may involve risks and uncertainties that are difficult to predict. Now, I hand over the conference to Mr. Asim Bhardai from Dam Capital. Thank you, and over to you, sir.

Thank you, and good evening on behalf of Dam Capital. It's a pleasure to have you all on Venus 5, Senti

UBQ3 F526 post-earnings call. From the Venus team, we have Mr. Arun Kothari, Managing Director, Mr. Dhruv Patel, Whole-Time Director, and Mr. Kunal Bhubna, the Chief Financial Officer.

We'll have the opening comments of Mr. Kothari first, followed by the Q&A. Thank you.

Good afternoon and warm welcome to everyone on the Q3 and 9-month FI 26-earning call for Venus Pipes and Tubes Limited. I have been joined by Mr. Dhru Patel, our Director, Mr. Kunal Bhugna, our CFO, and SZN, our Investor Relations Advisors. We have uploaded our Q3-FR26 Investor Presentation on store exchanges and company's website, and I hope you had an opportunity to go through the same. I will give insight on performance of the economy, followed by performance of the company. The Honorable Finance Minister recently presented her ninth union budget, outlining the government's economic plan with a clear focus on growth, investment, and financial discipline. The government focus continues to remain on growth-led environment, supported by a strong push towards public capital spending. Capital expenditure has been increased to Rs.222.0 for FY26 and FY27. Further, the recent FTA will also help domestic manufacturing sector, which underlines the government's commitment to building better infrastructure and supporting job creation and encouraging private investment. It also places strong emphasis on the power sector and semiconductor sector, both of which present meaningful growth opportunity for the company in the years ahead. The budget, along with recent GST rate rationalization measures, is expected to further strong the economy. Overall, the budget reflects strong policy, continuity, and a steady approach toward building a resilient, stable economy. On the industry front, the stainless steel pipes and cube industry continues to gain importance compared to other types of steel and pipes. Given by its superior quality, durability, and long service life, as highlighted in our earlier calls, the while industry demand is growing, a significant portion of this demand has traditionally been met by the unorganized sector and imports, with tighter regulations and customer pressing greater emphasis on quality and long-term reliability, we are seeing a steady shift away from unorganized players. On the import side, anti-dumping duty is also supporting domestic high-quality manufacturing. Coming to Venus, Spice and Tube, your company has established itself as a trusted brand known for consistent quality across both domestic and international market. Over the years, we have built meaningful scale and today stand among the leaders in installed capacity in the country. As we scaled up, we also focused on moving up the value chain. By steadily expanding our product range, we have created our presence across several critical industries and improved our ability to serve more demanding applications. This approach has helped us build different customer relationships and positions as well to capture long-term growth opportunities. Our product portfolio has continued to evolve in line with changing market needs and customer expectations. With our recent capacity expansion into value-added products, we believe that company is entering a new phase of its growth journey. Going forward, growth will be driven by higher share of value-added offerings and increased participation in critical end-use sectors. These segments demand strong technical expertise, consistent quality, product quality, and proven execution track record, capabilities that take care to develop. Our long operating history, strong customer trust, and disciplined execution gives us the confidence to scale successfully. In this area, clearly differentiating winners, prices, and tubes, and setting the foundation for a sustainable and higher quality growth path. Coming to our Q3 and 9-month FR26 operational performance of the company. Our growth journey is baked by numbers. We continue to report. Record quarterly performance with all-time high revenue of Rs. 296.7 crores for Q3 FR26, growing by 28.3% on a year-man-year basis, on 9-month basis. As well, we have reached revenue of rupees at 64.7 crores in 9 month FI 26, which is already 90% of our FI 25% revenue. Our domestic performance improves significantly during the quarter, with revenues growing 43% year on year, to INR 203 crores, and more than 15% sequentially. The domestic demand environment. Improved meaningfully during the quarter, as well as export continued to perform well, contributing around 31.5% of revenues, and I am at 93.5 crores. On a segmental basis, for nine months FY26, both seamless and well-deafed, delivering strong performance, resisting growth of hours 27% and 22% respectively, reflecting touch-time demand and stronger execution across the businesses. Our capacity utilization remains healthy with newly commissioned capacity ramping up well and contributing meaningfully to volumes. Supported by a strong order book of approximately A&R 4700 per hour, we remain confident of accelerating the rainfall of these capacities and driving further growth in the coming quarter. On the capacitance, our new capacity for fitting as well as seamless type and tubes are progressing well and remain firmly on tray. These facilities are expected to come on stage over the coming months and we will further able to cater the high value and critical application segment. Overall, we are excited about the year ahead and confident that 2020 will be a year of meaningful growth and driven by the commissioning of the new capacities and our continued expansion into a more valued product portfolio. With this, I hand over to Mr. Kunal Bumna, our CFO.

Good afternoon, everyone. We are pleased to share that our company has delivered a resilient performance in the third quarter and nine months ended December 25. On revenue front, revenue from operation for Q3FI26 stood at Rs. 296.7 crore as compared to Rs. 231.3 crore during Q3FI25, achieving a growth of 28.3% year-on-year basis. Revenue for 9-month FI26 student took us at 64.7 crores witnessing a strong growth of 23.5%. Revenue bifurcation over the quarter was 34% from welded, 60% from seamless and 60% from others. Growth in the seamless segment was 43% on year-on-year basis and welded segment rested a growth of 30% for Q3 FI26 on year-on-year basis in terms of revenue. Our export sales took robust at Rs. 93.5 crore for the quarter compared to Rs. 89.1 crore during the same period last year, a growth of 5% on year-on-year basis. On the EBITDA front, our EBITDA for the quarter stood at Rs. 48.8 crore as compared to Rs. 37.2 crore in Q3 FI 25, a growth of 31%. EBITDA margin for the quarter stood at 16.4% compared to 16.1% in the same period last year. On 9-month FI 26 basis, EBITDA saw a growth of 12%, standing at Rs. 141.1 crore with margin at 16.3%. On the past month, PAD 4 Q3 FI 26 is Rs. 25.6 crore, compared to Rs. 18 crore in Q3 FI 25, a growth of 42% on a year-on-year basis. PAD margin sold at 8.6% for the quarter. During the quarter and nine months, we had a one-time impact of across 64-65 lakhs due to increase in gratuity and legal liability on account of changes in labor code. As we look ahead, we are optimistic about the opportunity before us. Backed by disciplined investment, consistent execution, and well-defined growth roadmap, we are focused on building a stronger Venus brand and raising the bar in the stainless steel pipes and tube industry. With this, I would like to open the floor for questions.

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 the 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. Our first question comes from the line of Dhruv Jain from Ambit Capital. Please go ahead.

Thanks for the opportunity, sir. So, just one question on the export front, right? So, we've seen a bit of a, you know, decline in momentum in terms of growth. So, how should we think about exports going forward? And if you could also share, you know, what is the split of the order book with respect to domestic and export? So, any reason why the export growth is low? And in the next year, how should, in your view, export growth come through? That's my first question.

Primarily, just to give on the front of order book, it's around more than 30% on the side of export and violence being domestic. So, if you see, we had also been exporting to USA in the last quarter, we did around more than 20%, but this quarter, it was around 12% sort of number of the total export, but we exported to USA. So, again, the percentage had been more than 30%. Yeah, definitely not. It was as in the last quarter, but again, the order book is there from Middle East, Saudi, and also from good order book also coming from Europe. So, it seems more than 30-35% would be export also going forward, and going forward here also. Okay, so, and with the barriers... And just to also mention, in case of, you see, the recent tariff fees which has been done, Because, see, in case of our product, the Section 232 duty of 50% was enormous, same for every country exporting to EUAC, but there were a lot of apprehension, because there was, you know, the difficulty about the tariff, what would be the tariff, it can increase any time. So, I think that piece has been done in the recent two-three days back. So, I think, as I... Steel NP perspective, we should see order from USA also coming forward in coming quarters.

Of course, sir. So, my second question is on the fittings business. So, you know, given your capacity comes on stream in the second half, I mean, it's come on stream now in the second half, how should we think about it from next year, you know, growth perspective in the sense that what is the kind of contribution or any targeted revenue that you have in the fittings business and how should it ramp up in FY28 as well? So we will ramp up our plan in that regard will be very helpful.

See, as we said earlier, the investment is roughly in the range of 60-odd crore in our fitting business, and we can see an asset turn of around, you can say, 3.5 times. As you rightly said, the fitting business will be coming at the end of this March, 2022, so from the next year, we will be getting the manifesto in the first year, maybe something around 50% of... Near to 50% of that should be contributing, and in the F528, I think a substantial portion of the capacity should be utilized from the fitting units.

Okay. Thank you so much, Jumal, the president.

Thank you. Our next question comes from the line of Roman from Electrum PMS. Please go ahead.

Yeah, thank you, sir, for the opportunity. Sir, just wanted to understand a little bit on the value-added products. So, obviously, fittings and, you know, the other products going ahead will be value-added. So, can you give a percentage of the entire portfolio, how much it is now and in the next, let's say, two years, how much that can become, and hence what impact on the margins can come through at matured utilizations?

Thank you. It's around the, currently, if you see those valued product, the contribution, what is coming in the business is around 50 to 20 percent. And going forward, given the expansion, what we are doing on the side of printing and also on the side of stimulus and other businesses, we believe we should be at least level of that, what is currently being contributed. And on the front of EBITDA, it's 16.4, 16.5, roughly. for this current quarter and we believe it can move from 16 to single up to 18 percent.

Okay, up to 18 percent it can go over when when when this value added product.

It will come in phases definitely yeah because so FI 27 definitely improvement will be soon and FI 28 should be the year where the entire Thank you. Okay, okay.

And just one more thing. So I think US was a smaller proportion right now of the overall revenue for us. But with this trade deal and all, do you foresee that US can become a bigger growth driver? And hence, what are the segments that we will look at in that market? So petrochemicals, power, any sense on that?

Yeah, absolutely, yes, with this ease of value, definitely, because we have been exporting to USA in the first quarter of FI26, was a good portion of our supply to USA, and post that Q2 and Q3 number has been depleting, but with this ease, we definitely believe the US should be increasing, and see, the sector of this, again, we are not selling to the end customer there, but as you rightly said, it will be mix

of chemical and utility and other sectors. Okay, so basically this quarter the export growth was lower because U.S. contributions came down in the last two quarters, isn't it? Okay, and lastly, can you share some order book details for this quarter?

Yes, sir. It's around 470. Out of that, more than 30% is export and value to domestic. Okay, 30% is export.

Okay, so domestic is picking up, right? Any sense on domestic? How do you look at it in the next two, three years?

It's going good from the perspective that the orders are being received and power and power sector, oil and gas, engineering, simply, E-sector.

Okay, got it. Okay, thank you so much. I'll get back in the queue for follow-up.

Thank you. Participants who wish to ask a question may press star and 1 on the touch-tone telephone. Our next question comes from the line of Pritesh from Lucky Investments. Please go ahead.

Can you give the order inflow number for nine months versus nine months last year? Order in slow, in slow.

No, we are, as such a, not a specific make-up we are giving.

Okay. Total order, you only give order back-up? Yes. Then how does this pack-up versus last year, this 470 crores versus last year, what should be the number?

It was less than 350 crores.

Okay. And my second question is, in your capacities, which is to be commenced operation, it is fitting seamless pipe and condenser pipe or condenser pipe as started operation?

Condenser pipe as started operation. It will be fitting and seamless pipe.

What is the status on fitting order for the condenser pipe capacity?

On a capacity perspective, we are running around 25 to 30 percent currently. And a few of the approvals had been listed from power sectors for Condensati, and a few more approvals we are working on, and we believe that if those approvals are being received, it should expand the capacity of the collection for Condensati also.

Pichai, further to add this, this condenser tube section is not able to produce only condenser tubes. We also supplied some great food processing industry as well as in farming industry also. Or some of the good tenders in the coming months is floating by some of the power sector in India. So we are hopeful that the condenser sector...

Sorry, I can interrupt you sir, but there seems to be some echo in the background.

Okay, sorry. Yeah, we are anticipating, then, sorry, one second, one minute, oh no, now is okay? Yes, it's better. Okay, okay. We are expecting some new tender, which is floated by India power, from the India power sector, so which will be open in next two to three months, so we are hopeful the conductor, conductor front capacity will improve in the coming quarter.

Okay. What is the peak utilization number, revenue number possible out of the condenser capacity that you have put and the fittings capacity that you have put?

Yeah, we are anticipating.

See, for condenser, if I take a full capacity runner for fitting and well-ordered, the better name would be rather than condenser. It should be running around 350 odd crores.

This is for the value added pipes and fittings?

Welded and fittings, taken together.

Fittings and the new pipes, okay. And how much of this 350 crore do you think can come in FY27?

In FY27, on the side of seamless, we believe that more than 80% of it will be roughly between 220 to 250 crores. So, which we believe it should be 80%. And on the side of value added, value added, which is 120, 140, in which we add, therein we believe it should be around 70% of it.

So, basically out of 350 crore, you will be able to do 250 to 270. That's how we should interpret.

Yes.

So, then, you know, you have a base product growth rate, plus these two new product areas that are going to start larger operations next year. Is it fair to assume that the revenue growth will be much higher than what, you know, you would have achieved in the last few years?

Absolutely.

So, what kind of revenue growth should we look at in S527?

See, again, on an overall basis, what we are currently guiding is at least more than 20% compared to F526.

What, 20%? So, is this number only, right?

Sir, see, again, this number, 80% and 70% are some on exemption. Definitely, it should be higher than that, but what we are currently guiding is more than 20%.

Okay, sir. And my last question is, why is it that the welded tubes is growing slightly slower? And second, what is the status of, you know, capacities or competition in the seamless tube site? So two different questions.

See, on the side of Welded, last quarter it was fine, but again in this quarter there has been certain detrimental and it is majorly because of the decrease in the sale to USA. But what we see going forward, there should be an order from Saudi and Vidalis on the side of Welded and power sector also, so we will be able to ramp up that. And from the perspective of competition,

we simulate there has been a competition but keeping our, keeping

backward integration and also tubing business and also we are coming up with this via tube and value added tube in business which will cater to hydraulic instrumentation, heat exchangers. So, we are slightly better placed as compared to the new capacity or new competition coming in for this event, again, along with requisite approval and again presence in Europe and many parts of the world, we seem to be, we should not be that much affected by this competition.

Thank you. Anyone who wishes to ask a question may press star and one on the touchstone telephone. Our next question comes from the line of Bhargav from Ambit Asset Management. Please go ahead.

Yeah, good afternoon, team, and congrats on the good performance. Sir, my first question is that, is it fair to say that the order of which DATL is likely to announce in our sort of addressable market is closer to 3,000 to 4,000 crores, and of that, just about 700 crores have been ordered so far?

Hello. No, still, for the pipe order, in the estimated pipe segment order, not only 3,000 crore order is pending with the bail. What of the tender has been received by the NTPC, from NTPC, or from Adani Group, the bail or other power companies. So, we are anticipating in the next four to five years, almost more than 8000 metric ton demand will come from the power sector. So, still there are a lot of tender pending to become in the domestic market. So, they will float almost every six months or every quarter, they will float some new tender, or this demand will continually maintain at least for four to five sectors. Further, this one will be also limited to very few players who are approved in either Vail, NTPC or Adhani Pawan.

So, sir, in rupees crores, how much does this translate into?

Almost, you can say, more than you can say, it will be more than 6,000 crores near about.

Okay, six. And our market share as of now in the tenders which have already been ordered is how much, sir?

Almost we can say right now the water tender has been floated in the last one year. Our market share is approximately 15 to near about 15 to 20 percent.

15 to 20 percent. Okay. And can this market share increase or given the…

Yes, definitely it will increase. Since we have developed a new plan, the kandasa power, we have not received not much in the kandasa power sector, from the power sector, which we are anticipating in the coming quarter. So, our contribution definitely will improve.

And how much of the funding water book of BATL is remaining now?

It's around 60-65%.

60-65% is unexecuted still?

Yes, unexecuted. This should be executed in coming two quarters to go, substantial portion of it.

Okay.

Okay.

Secondly, sir, is it possible to highlight few key approvals which we might have received maybe in Middle East or Russia? Any clients which you may want to mention which can be potentially big clients going forward in terms of ordering?

Yes, definitely. In the last quarter, we have received some new approval from overseas nuclear sector, overseas domestic and overseas oil and gas sector, and domestic food processing industry, or for some more new growth in power sector domestically.

And this is from which country, sir?

Just I want to keep this secret.

So this is primarily UAE, that's what you are highlighting.

A few of the companies are multinational also who are scattered around the world also.

Okay. Great sir. Thank you very much for your replies and all the worries.

Thank you. Participants who wish to ask a question may press star and one on the touchstone telephone. Our next question comes from the line of Pallav Agarwal from Antics Talk Broking Limited. Please go ahead.

Yeah, good afternoon, sir. So, this is a question on what are the net debt levels at the end of the quarter?

It was net debt was around 260.

Okay, and do you expect that, you know, this should be the peak level or maybe the capex and working capital risk can increase slightly?

For the coming quarter, I believe we believe this should not increase much 10 to 20 crore from here.

Okay, and any improvement in our working capital levels over the previous quarter?

No, similar to, more or less similar.

Okay, okay. And, sir, anything on the margin front? So, you know, we were at about 18% EBITDA margin, and that has come down to about 16% level. So, with the VAP going up, can this go back to about 18% by FI 28?

Yes, as we said, with the start of this, in coming quarters, this condenser, value added, value added, then printing business, then also on the side of seamless business, so I think tubing and BA tubing business will be there. So definitely, in the coming two years to go, it should definitely improve from 16.4% to move to around 18%.

Okay, yeah, thank you.

Thank you. Anyone who wishes to ask a question may press star and 1 on the touchtone telephone. Our next question comes from the line of Dhanjay Bagrodhya from Alchemy. Please go ahead.

Hello, I just wanted to ask you for the end market. How is the end market doing and who are you predominantly taking market shares off? So, how is the end market growing, and how are we taking market share from that?

I mean, in case of domestic, predominantly, the supply is... It is to the, not to the industry, but it is to the distributive trader of those services, and we are seeing demand for power.

I want to understand how much in your estimate will be N marketing. We are just trying to understand and predominantly who will be taking the market.

Your voice seems to be very muffled.

Yeah, absolutely.

Okay.

Can you hear me now?

Yes, comparatively better.

So I was asking, how is the end market doing and the company would be taking market share from who predominantly? Would it be from global players, Indian players, who would be taking market share considering the capacities are themselves only so small in stainless steel?

The demand is there from Babasat, the demand was very, which was not there in the system. So, from there, we have been able to get an order. Apart from that, again, from the domestic players, generally, demand has been shifted from them, from the smaller or unstructured players to winners. These are generally happening in the domestic market.

And in your estimate, how much was the industry growing?

See, it's a very tough to say those numbers because the sectors are being added. Generally, we see a range of 8 to 10%, but keeping this demand of power and universities being added, it will be definitely higher than that.

Okay, fine. And so maybe I missed this, but in your revenues, how much percent will be coming from volumes and how much will be coming from ASP increase?

From? No, see, volume numbers, we are not currently giving.

No, no, no, no. Don't give any numbers. I'm just saying broadly from your revenue growth percentage-wise, how much percent would be from revenue growth and how much would be from ASP increase?

See, from volume growth, it should be at least you can say from quarter and quarter more than 15%.

And year on year?

It will be again same sort of number.

Okay, so then would it be fair if we've taken price hike as we move up, the change of price hikes have been taken, or in terms of realization has been improving because of the segment mix change?

Not much on the change of segment currently. It is again a great mix with three points changing, which also altered the prices of the good.

Okay, so then, sir, so then, predominantly, it would just be, we've been able to increase revenue of particular items. Would that be fair?

Revenue of, yeah, definitely, the contribution for similar set increase, that is increase our revenue. That is also helpful.

Okay, fine. Understood. Thank you so much.

Thank you. Our next question comes from the line of Sonal Minaj from Prussian Capital Investment Advices LLP. Please go ahead.

Hi, sir. This is Sonal Minas. I hope I'm audible. Yes. Yes. So I had two questions. First question was regarding the mail order and the backlog you were talking about and you mentioned to the previous. The person who's asking the question, you have around 15% market share. Just wanted to understand, like, who were the other 2-3 noteworthy players who basically bagged these orders. If you could share one or two names, just for understanding the industry and comparative nature, that will be helpful.

See, giving the name of other pair would not be right. But again, generally, just to mention you, for this power bidding of Bale and all, generally, 5 to 7 pairs are approved currently in the country. Out of this, we are amongst them.

Okay. So, isn't this public knowledge?

Like, that who gets what all the...

I don't see. No, they don't. It can be available through Bale, but not on public.

Okay. I understand that. The second question, sir, was with regard to the price realization and the volume growth you were just talking about to the previous gentleman. The kind of realization growth that we've seen right now in this particular quarter. Should essentially materialize into little higher gross margins, little higher EBITDA margins. So, directionally, are we heading toward, let's say, 18% kind of EBITDA margins in FY27, FY28, or that's still a little far off?

No, no, no, not absolutely far away. Your IT said by FY28. Definitely 27 would be here, where you've definitely seen the, for the 9 months, for the 9 months, this is 16.32 data margin, it would definitely be improving from here, and by FY28, definitely the target is to reach by around 18%.

Got it, sir. So just squeezing in a third question, you mentioned about getting approvals in the international market, some in Middle East. So wanted to understand what is the lead time of getting these approvals with a particular, let's say, What is the lead time to get

in the approval? It's again depend on its client-line business and their comfort level. So, sometimes it can take you three to five years or so. Sometimes keeping your credential and all, you can get in less than two years or so. But generally, the lead times are generally high for getting the approval from these multinational companies.

And is it higher in, let's say, oil and gas than compared to power? Just for our understanding.

It's more time in the nuclear sector. Nuclear sector takes more time than oil and gas and power. Especially in the case of lead time, lead time normally varies. Depends on the plant, normally lead time only the submission of the approved paper doesn't, we can consider the lead time on the plant front as well as your past tech, education, and the plant capability, all these things does matter.

Sure, sir. Got it. Thank you, sir. Thanks for answering my questions. Thank you.

Thank you. Our next question comes from the line of Sahil Sangvi from Monarch Network Capital Limit. Please go ahead.

Hi, thank you for the opportunity. Congratulations for a very good summer. The first question was with respect to CBAM. So, what we are hearing is that there are already benchmarks in place and there are third-party evaluators also. So, have we done that evaluation and where do we stand on the liabilities that could come? I understand we don't have to pay this year, but any sense on that front, and could that really impact our margins?

See, at the end of December, they have come up with a revised calculation and formulas, and see, for us also, we have to take those numbers from our, because pre-cursor emission is also need to be considered, while calculating the C-MAM value. So, we have also taken up with our suppliers. So, see, each one in the system is working because, say, the formula calculation has been revised at the end of December. So, everybody is working. And as and when it comes up, then we can be able to. But again, we are also taking guidance from the consultant and on, and the entire team is working on that.

And what will be our current split as and in percentage basis which you can give on the export? I mean, how much goes to Europe and how much US and how much Middle East?

See, on a ninth-month basis, if you see, it was more than, Europe was around 60-65%. And the US was around 20-25%, but at least the UAE and Saudi around 10-12% and balanced for other countries.

Right, right, right, right. And any kind of benefits that we are getting from the EU trade deal? I mean, because from 1st of July, there was this quota reduction. So, is there anything in the EU trade deal for us?

No, from pipeline to SS, we have not seen that. But again, the quota reduction is to every country who are quoting to India. It's not standalone to India only. Okay, okay, okay.

And on a viable basis, this quarter, was there a price improvement or a price reduction?

Sort of improvement only.

Sure. Thank you. Thank you, Anonymous.

Thank you. Our next question comes from the line of Sneha Talreja from Novama. Please go ahead.

I think congratulations on great sort of numbers. Just a couple of questions from my end. Given the U.S. tariff, you know, just about finalized, how do we see the opportunities in the U.S. market shaping up even in the last couple of years? They've done so much work, especially in Europe, Middle East. So, where do you see opportunities for the U.S. market?

See, absolutely the opportunity should be there, because as you rightly said, we have worked on US part, and it was a time where it was benefited, but this hovering of tariff has come, but with this clear cut piece of tariff currently, and see, as I said, you are there also section 232 is similar for all the countries exported to USA, but as there was no clarity on the side of tariff, that's why the volume or demand. The order was not coming in quantum. So, definitely, we believe it should be a better opportunity going on from users.

I just want to touch upon, you know, the working capital requirement, how different it is from domestic versus export market, and both in terms of margins, given that we've recently seen repeat applications?

See, working company is more or less similar.

It's not that much changing between domestic and export.

But again, margin perspective, generally, when you are establishing this Europe and USA market, you generally drive a higher margin. But I said, coming forward quarters, I think we should be able to do a better profit in the export market as compared to domestic. But again, after you are set up in those markets, you generally get those benefits.

And lastly, on your, you know, order book front, we've seen a great improvement on a quarter-on-quarter basis from 3.5 to 4.7 on demand. The incremental order book would be coming in from which areas? Is it mostly domestic or export?

Ajmeet, sir. It's from power sector and export.

Understood. Thanks, thanks, thanks a lot, team, and all the very best.

Thank you. Our next question comes from the line of Romil from Electrum PMS. Please, go ahead.

Yeah, thank you for the follow-up. Sir, one clarification I just wanted. So, see, we have got new qualifications from the export market also. So, our exports are also anticipated to grow. In India also, I think domestic power and all is doing well. So, new approval is received. So just want to understand, so next year probably you said we'll grow 20% plus kind of number. But, you know, beyond that, so because next year you'll have the seamless capacity also coming in. But beyond that, let's say, you know, 28, 29 going towards there, shouldn't we face some capacity crunch if at all, you know, the demand remains stronger? And in context of that, do you see the capacities which are coming up by the competition? Can they, you know, gain that market if we don't have capacity? How does that stack up, if you can just throw some color?

Yeah, definitely. After the new capacity expansion, we are able to do the 20% growth for the FI27 as well as FI28, or we always plan for the in advance. We see the market, how is the market demand is going on. We are always open to do the capacity expansion, but we are also focusing on our cash flow. We don't want to take the not much debt for the capacity expansion, but we want to leverage our position. For whenever it will be required, we are open to capacity expansion. You can see in the almost in last four years, we have did the capacity expansion almost more than four X. So whenever need will arise, definitely we are open for debt. We are more focused on the growth as well as the balance sheet focus and the debt focus. I will focus on the ROC and ROE.

And again to mention here, see the demand, new demand has come from this power sector, which was not there in the system, as we rightly said also. So that means we are also driving, see the export geographies, we are trying to capture more. We are expanding our horizon to many parts of the world, that will also come into play. We are moving our supply towards food processing and other. And again, see, we are also adding a product like shipping, which generally many of the competitors doesn't have. They are also adding many of the value added product. Generally, not many players are there in those arrangements. I think keeping all the mix bag, we believe as a company, keep it level too.

Okay, so to summarize on this point, probably we are saying that with the capacity coming in and the utilizations moving up for 27 and 28, probably we should grow at around, you know, 20% odd with margins improving plus fittings revenue coming in and post that if we need capacity, we will plan by 27 or 28. So that's the right understanding, right?

But new capacity, see, the company keep on planning that, but if something comes up earlier, also will definitely update you.

Correct, correct. Got it. And just one thing on the, you know, export side. So, obviously, in the last one year or two years, we have done, you know, phenomenal on the export front. Going ahead, what kind of growth rate can we, you know, expect on a normalized basis, considering you're getting approvals and all those things? And is export a higher margin business versus domestic?

See, it's not, if you see the current year export, it's not nominal, and further see, again, the percentage of the total revenue should be more than 30%, the intent is at currently. So, we are trying that. Again, it can depend, see, if there are good margin on the recurrent in export, it can go higher than that also, but the intent is currently at least above 30%. And see, when you are established in this market, definitely you want a better margin compared to domestic.

Okay. Sir, this year, this quarter, how much OCF we would have generated if you can give that number?

Balance figure currently, I'm not having.

Okay. Okay. Okay, sir. Thank you so much. Thanks.

Thank you. Our next question comes from the line of Shubham Thorat from Perpetual Capital Advices. Please go ahead.

Thank you for the opportunity. Am I already won?

Yes.

Yes, thank you. So, sir, I recently had tried with the company, so kindly bear with me. Firstly, I wanted to know what is the current capacity utilization in the Inglés and Vengate segment?

In case of Inglés, it's more than 90%, and on the side of Vengate, it is more than 60%.

Secondly, I just missed your comments on what, how much capex are we currently doing on the fittings and seamless side and what kind of assets are we targeting there? I just wanted to ask when this capacity is going to be like.

See, the capacity of fitting and seamless type, a portion of seamless has come, but a major capacity will be we are targeting by end of this financial year. So, primarily, all the capacity we will be like in the coming financial year that we don't resist on this energy.

You mentioned by end of next financial year, right?

End of this March 26.

By March 26. And how much capex are we incurring for that, and what kind of asset are we expecting?

See, these all capex are on the side of seamless, it is on the side of fittings, on the side of condenser. So, actually those, it should be at least more than three time asset should be there.

Three times.

Three times, yeah.

Okay. Next, you mentioned that our current order book size is around $470,000, and incrementally we expect orders from the power sector and export demand. So I just wanted to ask, what is the execution timeline for this current order book size, and what is the application of our products in the power sector?

See, now, the order size should be typically be between, you can say there's been six, seven months, the execution time for this order book. And see, the application in power is varied.

These are used for boiler also.

These are also used for condenser or power plant.

So it's a mixed bag of using power industry. Okay, okay. Any broad comments on demand situation? And I want to get a general sense on what kind of issues we faced in the last nine months

or the past quarter that we are expecting to be a bit

relieved upon while going forward.

You see, few of the geopolitical issues have been there, but with the recent use of tariff on India by US, I think it's a good sign. Again, India UD was not directly impacting us, but again, it's a sentimental improvement. It's also there. So, we believe and also there's a demand from power in other sectors in the Indian market also. So, keeping all these perspectives going forward, it seems to be quite positive from now on.

Got it. The final question, I just wanted to, I mean, I missed your comments on the countrywide geography mix that you mentioned in the exports. Could you please repeat that?

He said it was around 60-65% on Europe and 20-25% on the side of US and balance to other countries, including Saudi and U.S.

How much in Europe?

Thank you. My next question comes from the line of Pallavagarwal from Antikytock Broking Limited. Please go ahead. Yeah, actually my question has been answered. Thank you. Thank you. Ladies and gentlemen, due to time constraints, that was the last question. I would now like to hand the conference over to the management for closing comments.

Thank you all for joining us today. I hope we have addressed all your questions. We remain committed to keeping the investment community informed with regular updates on any development in the company. For any further information or queries, please feel free to reach out to us or our Investor Relations Advisor. Thanks, everyone.

Thank you. On behalf of DAM Capital Advices Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.