Ladies and gentlemen, good day, and welcome to Vimta Labs Limited Q2 Investor Conference Call, hosted by Systematix Institutional Equities. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star and then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Vishal Manchanda from Systematix Institutional Equities. Please go ahead, sir.
Thanks. Good evening, everyone. On behalf of Systematix Institutional Equities, we welcome you to the Q2 FY24 earnings call of Vimta Labs Limited. We thank the Vimta Labs management for giving us an opportunity to host the call. Today, from the Vimta management team, we have with us Miss Harita Vasireddi, Managing Director, Mr. Satya Sreenivas Neerukonda, Executive Director, Mr. Narahari Naidu, Chief Financial Officer, and Miss Sujani Vasireddi, Company Secretary. I'll now hand over the call to Mr. Narahari Naidu for the opening remarks.
Thank you, Vishal. Good evening, and a very warm welcome to all, to all, to all our Q2 FY 2024 earnings call. Our investor presentation and the financial results are available on the company website and in partnership news. Please note that anything said on this call, which reflects our outlook for the future or which could be constituted as a forward-looking statement, must be reviewed in conjunction with the risk that the company faces. The conference call is being recorded, and the transcript, along with the audio of the same, will be made available on the website of the company as well as exchanges. Please also note that the audio of the conference call is the copyright material of Vimta Labs Limited and cannot be copied, rebroadcast, or attributed in press or media without specific written consent of the company.
Now, I would request our Managing Director, Miss Harita Vasireddi, to provide you with the update on the quarter. Over to you.
Thank you, Narahari. Good evening, everyone. Thank you for joining our Q2 FY 2024 earnings call. Before Narahari takes you through our numbers in detail, let me run you through the general economic landscape and more specifically, on how our industry and business have done during Q2. The global economy remains unsettled, with persistent inflation, which is coupled with geopolitical disruptions, as we all know. These uncertainties have dampened the global consumer demand, triggering a ripple effect across multiple industries. Speaking of the industry that we operate in, certain segments of TIC markets. TIC stands for Testing, Inspection, and Certification. These markets are feeling some heat from the global conditions. If I were to elaborate, persisting inflation and lower consumer demand are influencing the import and export dynamics. This is impacting food imports as well, and we have- ...
Now I would like to walk you through the consolidated financial performance for the quarter ended 30 September 2023, after which we can open the floor for question and answers. I'll start with the consolidated financial highlights for the quarter. Total income for Q 2 of FY 2024 stood at INR 754 million, as compared to INR 806 million in Q 2 of FY 2023, down 6.4% on a year-over-year basis. EBITDA stood at INR 179 million in Q2 of FY 2024, as compared to INR 261 million in the corresponding quarter, degrowth of 31.4% on year-over-year basis. EBITDA margins for the quarter stood at 23.8%. Lower EBITDA margins were driven by higher employee costs and lower operating leverage.
Profit after tax in Q2 FY 2024 stood at INR 63 million, as compared to INR 132 million in quarter 2 of FY 2023, a degrowth of 52.1% on a year-over-year basis. PAT margin for the quarter stood at 8.4%. PAT margins were driven by higher depreciation and finance cost. Moving on to half year performance. Total income for H1 FY 2024 stood at INR 1,595 million, as compared to INR 1,606 million in H1 of FY 2023, which is flat on a year-over-year basis. EBITDA stood at INR 432 million in H1 FY 2024, as compared to INR 509 million in H1 of FY 2023. Degrowth of 15.3% on a year-over-year basis, translating into EBITDA margins of close to 27.1%.
Profit after tax in H1 FY 2024 stood at INR 185 million, as compared to INR 252 million in H1 of FY 2023, a degrowth of 26.6% on a year-over-year basis, translating into a steady PAT margin of 11.6%. On the balance sheet side, we continue to have a net debt-free balance sheet, with cash and cash equivalents, including other bank profits, of INR 262 million. Our total debt stands at INR 193 million as on thirtieth September 2023. Capex for the quarter stood at INR 421 million. We continue to maintain our Capex guidance of INR 900 million for FY 2024. With that, we can now open the floor for Q&A. Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. 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 Lokesh Manik from Vallum Capital. Please go ahead.
Yeah, thank you. Good afternoon to the team. Ma'am, my question was on the Capex side of the business. So, you know, we have a high technological obsolescence. Machines get depreciated in 5 years, 6 years on an average. If you can just share, what would be the revenue proportion between the older lines, revenue coming from the older service lines and the new upgraded service lines? Can you give us an idea in terms of whether the depreciation is only as per books, or the machines are actually getting, will need replacement of the books?
For us, the Capex investment is continuous. Yes, technology does get obsoleted at a much faster pace in today's world than in the yesteryear. So we keep on investing in higher-end technologies. That doesn't mean we are not able to use the equipment that are already deployed for its services. So there are certain tests that will continue to have the same specs that, you know, they had for several years. New requirements come up for which we invest in new technologies. So we cannot break up revenues from old and new.
Uh-
It's a good mix, that is, quite constant, year after year.
That would be 50/50, 70/30, how would the proportion be?
No, it will be about 10%-15% on the new ones.
Uh.
-that we keep introducing every year, either as a new capability or as a capacity expansion. Whenever we invest, we are going in for the latest technologies only.
Yeah.
The rest will be from the older pool.
Got it. And, ma'am, we have also mentioned in the past that our facilities are actually fungible across for serving different industries. So if this time we were seeing that the headwinds from the export market, like you said, like you mentioned in your initial comments, we are also seeing good growth coming in the domestic market from the electronics segment. So how is our standing in that area, and what is the growth potential you're seeing there even in this quarter?
The technologies that are deployed in engineering departments, such as our electronics and electrical division, are very distinctly different from the ones that we deploy for, you know, analytical projects in pharma and food. So there you don't have any interchangeability.
Okay, just last small one. Between pharma and food, what is the downtime if you had to shift between one process to the other?
There are no clear lines drawn as such.
Okay.
They have their individual capacities, and then there are some common pool capacities. So as the need occurs, decisions are taken on the fly, with respect to who gets to use which resource.
Understood. Understood. I'll join back on the team. Thank you so much, ma'am.
Welcome.
Thank you very much. The next question is from the line of Ankit Gupta from Bamboo Capital. Please go ahead.
Hello. Thanks for the opportunity. Am I audible?
Yes.
Yes. Thanks for the opportunity. My first question was on, you know, the kind of operating deleverage we have seen during the quarter with, you know, like, around INR 5 crore degrowth in our top line. So, you know, we saw a significant decline in the margins from around 32-32.5% to almost 23%-24%. So if you can talk about what led to such significant decline in the operating margins?
Yeah. So, yes, that's a very good point that you have raised. Although the degrowth is to the tune of about 10% quarter-on-quarter, we see a significant dip in the bottom line because most of our costs are fixed in nature. The only variable that we have is the materials, consumables, reagents, that kind of thing. But everything else, like our manpower cost, the cost of maintaining equipment, the cost of you know, power, fuel, cost of transportation of employees, all these remain quite fixed in nature. Therefore, when you see a dip in your revenues, you've already spent certain on certain incremental capacities. So that sort of adds to the negative dip in the bottom line.
Sure, sure. So, like, in this quarter, we saw that, you know, despite decline in our top line, the cost of reagents has increased, you know. So that was... is it more to do with the product mix or, like, revenue mix with the pharma and food contributing less during the quarter?
Yes, there is a revenue mix change here. We have animals also as a part of this cost, so there were probably more expenditure on that side of the operations. That's why you see that slight change in material cost.
Sure. Sure.
And I'll just add to that. So in addition to the, you know, change in, mix of revenues, we, you know, the consumption cost, would be lower, in general when, there are higher revenues. So about 10% is down compared to a corresponding quarter, so that has also had some impact on the overall, cost of materials.
Sure. My second question was on our revenue target of INR 500 crore by 2026. Let's say, given the headwinds that we are seeing and assuming some bounce back in our revenues, revenue growth during the second half of this year, we would be, you know, finishing, let's say, INR 320-330 crore of revenue, which we had reported last year itself. From INR 330 or even INR 335 crore kind of revenue that we finished this year with, from there to grow to, you know, INR 500 crore revenue by FY 2026, we need our top line to grow by at least 25%. What kind of visibility do we have of 25% top line growth for FY 2025 and 2026 for us to achieve our targeted revenue of INR 500 crore?
Yeah, the slope, as you said, is definitely going to be steeper. Earlier we were targeting 15% year-on-year, now that becomes 25%. Our expansion activities are nearing completion. By March,. You know, we should be able to commission the additional capacities that we are creating in terms of building and space. And the new capabilities that we have been investing in or developing the last couple of years, they should yield higher revenue. In addition to our growth with customer partners, you know, we see continuous growth of business from some of our key customers. So these remain the key sources of our confidence that we will still meet the INR 500 crore target by 2026.
Because in our case, given, you know, significant contribution comes from pharma and secondly, on the foods, those two engines have to fire for us to reach this INR 500 crore. And, you know, as we, as you have been communicating in earlier calls also, that pharma you have been seeing good traction, and that gives you confidence of, you know, achieving INR 500 crore. Given the headwinds that we are seeing on the pharma side also currently, do we expect some, you know, revival in, in next year and FY 2026 for, you know, pharma to grow significantly and, you know, drive our revenue growth?
Yes, our confidence has not shaken. In fact, our order books are, much more larger today than even the last quarter. We definitely think that the factors that influence this quarter results are more external and less to do with our company's innate ability to, grow. One is, as I was explaining in my, opening remarks, DCGI has slowed down in giving, the NOCs, approvals for conduct of BA/BE studies. Where this process used to take just a few weeks, this is now taking several months. There's a huge backlog, and this is impacting, all the companies that are in this service. The other thing is the reduction in imports and the allotment of samples to our NFL lab in Mumbai. Now, that trend we saw till end of September. October is now back to normal.
And then, of course, there is a slight delay in pipeline, actually, booked contracts converting into commencement of projects. This is only because of certain delays on the sponsor side. So all these factors are more to do with external environment, which seems to be a temporary aberration rather than anything permanent.
Okay, okay. My last question was on the electrical and electronic segment. That segment, as mentioned in our press release and as you were saying, has done well. But, you know, how do you see this segment shaping out over the next 2, 3, 2 years? Because, you know, the significant—like, is the, like, do you think this segment can become, 50, 70 crore kind of segment over the next 2, 3 years, or it's, it's an uphill task to achieve those kind of numbers?
Capacity utilization-wise, the good news is that we are already working at close to 75%-80% of our capacity. We see very strong growth quarter-over-quarter. Yes, the numbers are small, the percentage looks big, but still, you know, quarter-over-quarter, we are seeing a very strong response from the market. And, if you study this industry closely, there is a lot of push from the government on Make in India. The electronic segment is, I think, going to be one of the biggest beneficiary of this push from the government. Defense also, there is a mandate that they source defense components from the domestic market up to 50%. That itself will trigger a lot of component manufacturing, and Hyderabad is known for being a defense component manufacturers. So there are several factors, which give us a very good feel about the prospects of electronic industry.
Okay.
Will we reach INR 50 crore-INR 70 crore in the next 2-3 years? That's a good question I'll be able to answer with more confidence as we travel a year or so. So far, the confidence is very good. The markets are responding to our expectations.
Sure, sure. Thank you. Thank you, and wish you all the best. Thank you.
Thank you.
Thank you very much. Before we take the next question, a reminder to all the participants, you may press star and one to ask a question. The next question is from the line of Ankeet Pandya from InCred Asset Management. Please go ahead.
Yeah, hi, thank you for the opportunity. Ma'am, I have just two questions. So, firstly, on the EBITDA margin front, where it has come down to almost 22%-23%, do we see in the second half, given that again, the strong momentum picking up from third quarter, to go back to around 28%-29% levels, or there'll be some there can be some downside risk to margin profile for FY 2024?
In Q3, our expectation is that we will come back to at least Q1 level or maybe be even able to do slightly better there. So once we are back to those levels, then we will get back the margins.
Oh, but so, basically, like, you know, pharma and the food segment, that will have to again see a bounce back. That will be the key for driving the margins for the second half of FY24, if to see it correctly.
Yes, yes.
Okay.
Only this that we see is the, you know, approvals. They're still coming slow. Unless the regulator does something about this, you know, this may continue. But the good news is what was supposed to come in in Q2 will now come in Q3. So we may not be able to cover up the lag, but definitely, you know, we can do what we have done in the previous quarters.
Any particular reason that you like, you know, there's a delay in approval for these studies in the pharma segment? Any particular reason that's happening?
We don't understand them fully, but the regulator has called for a meeting with the industry mid-November. I think the industry has raised concerns on the delays collectively, so I think the regulator wants to respond to those concerns. We'll know more once this meeting happens on what their plans are. The speed has definitely come dropped to only about 30%.
30%, okay. And, ma'am, on the pharma side, so this is more on the industry level and on the global scenario. So, in the CRO and the CDMO segment globally, there has been challenges currently on the funding issue. So, can that also be one of the reason that, our pharma segment, is seeing a demand challenge?
Yes, we also have sensed that, due in our business development efforts in the overseas markets in U.S. and Europe. We do see that there are certain companies that are becoming a little conservative in terms of expanding their R&D pipelines. But we also understand that this could be just a temporary phase, and they expect to come back to normal, you know, investment levels in R&D by Q1, Q2 of next year.
Okay. Fair enough. Yeah, that's it from my side. Thank you.
Thank you very much. The next question is from the line of Dhanil Desai from Total Capital. Please go ahead.
Hi. Good afternoon, ma'am. Am I audible?
Yes.
Okay. Ma'am, my first question is on the food segment. I think last quarter also you indicated that you know Q2 may be challenging because of the you know the rain part, and also the Q1 was impacted by the cyclone. So barring that, now since things are normal, do you see anything in terms of change in the environment on the non-JNPT food business? And also, if you can give some color that whatever challenges we are seeing on the food side, how much of that is non-JNPT and food and you know JNPT food, if you can give some color on that.
I won't be able to share such detail on our food testing revenues, Vimta and NFL. But the impact that we saw in Q1 was there on both these revenue streams of food division. That effect continued at NFL till end of quarter two, but the regular food testing business that Vimta does, it picked up from middle of the quarter, and it's been stable.
Okay, okay. So let's say even if the imports dropped at JNPT, did we get a higher share of revenue than last quarter of the total import samples? Are we progressing in terms of getting more share of the samples coming in, you know, because that's the journey you want to travel, so any any progress on that?
There is no information available to us publicly on that. So I won't be able to comment on whether our share is high or not. We did convey our concerns to our partner that the capacities are highly underutilized. So that information is parked with them. They are equally invested in the NFL project and revenue. So that's the only submission we are able to make with the government.
Got it. And on the pharma side, ma'am, till last quarter, I think we were quite upbeat, and I think, you know, this quarter we are suggesting that apart from regulatory issues, there is also some deferment and because of the change in the macroeconomic environment at global scale. So in your conversation, you know, is this like a one or two quarter thing? So generally, when such things start, people hold back things for, you know, slightly longer because they want to see things getting stabilized on a macroeconomic front. So how has been your experience in the past, and what is your current conversation with customers telling you?
Our experience is like this: we work with both small and medium companies and also with large companies. Large companies who are more R&D focused, we do sense that they are not putting any newer investments, but they do have some current projects that they will move. That's the sense we are getting from large customers. The smaller ones and mid-sized ones, it doesn't seem to be impacting them so much. That's the sense we have as of now.
Okay. Okay, and last question. So we said that we still end this year with some growth. So are we talking about, you know, mid-single digits kind of a growth or closer to 10%, you know, any sense on that?
Sorry, your voice was quite jumbled. Can you repeat?
So we said that we may still end the year with some growth over FY 2023. So can you give some color whether we are looking at, you know, 4, 5% kind of a growth or a 10% growth? So what does that mean?
When we started, we were confident of a 15% growth. That's where we started.
Right.
That seems quite challenging, given Q2 numbers. I'll be able to maybe answer more confidently when we connect again in January. There will be a growth. I'm not yet able to say what percentage.
Okay, got it. Thank you. That's it from my end.
Thank you very much. The next question is from the line of Guneet Singh from CCIPL. Please go ahead, sir.
Hi, thank you for this opportunity. So, the Indian government has permitted private sector to use government labs. So I just want to understand how will this impact Vimta Labs?
We don't see a necessity for us to use government labs. I'm also exactly not sure what kind of infrastructure you're referring to or which industry this is related to, but so far we have not had any thoughts in that direction.
All right, but in terms of competition, do we, I mean, foresee any other competitors or any other players coming up who might use, I mean, the government labs to compete with us? So what are your thoughts on that?
I don't know. It's very difficult to comment on that.
All right. So my last question would be regarding the FY 2024 numbers. So I mean, we are saying that we should be able to see Q1 margins going, going ahead for the remaining two quarters. And, I mean, even to maintain the numbers of FY 2023, we would be, we would be needing some growth, year-on-year. So, I mean, is that assumption correct?
Yes. We expect H2 to be better than H1.
All right. So that is about 29% plus margin.
I couldn't catch your last...
So I mean, I'm saying that should be around 29% plus margins for H2.
Yeah, it should be around that. Yes.
All right. That's it. Thank you, and all the best.
Thank you.
Thank you very much. The next question is from the line of Ankit Gupta from Bamboo Capital. Please go ahead.
Yeah. Thanks for the opportunity. On the pharma side, if you can talk about, you know, how much of the revenues are contributed by large pharma or, you know, generic companies based out of India. Versus, you know, BC-funded research R&D companies who are currently facing some challenges on the funding front.
I don't have that analysis information with me, because it is... It varies.
Sure.
from each business unit. So unfortunately, I don't have that information with me.
Sure.
to share with you.
Okay, but broadly, if you can say, you know, like, what large pharma will be contributing to our revenues on the pharma side. Any broad number that you can share with us, you know, across.
This is quite dynamic. Quarter to quarter, you know, our top ten or top twenty, there is usually a turn there.
Sure, sure. Okay, okay. Okay, okay. Thanks. Thank you.
Thank you very much. Before we take the next question, a reminder to all the participants, you may press star and one to ask a question. The next question is from the line of Manav from Kovard Investments. Please go ahead.
Hello? Hello, am I audible?
Yes.
Yeah, yes, ma'am. Yeah, thank you for the opportunity. On the outset, let me first wish you all for your 39 years from since foundation, and also wishing S.P. Sir also, who has been received honored from the Finance Minister, Nirmala Sitharaman, for his continuous efforts in the fields of life sciences and healthcare. Ma'am, my first question is because little bit we were shattered seeing the results, but not, not an issue. We think we can cope up with the results going forward. The first question is: How are we managing our working capital? Because the way we are, the working capital days are going is little more in the upside, where we have to focus more on the downside. How are. What is your outlook on improving this working capital cycle going forward?
Thanks for asking that question. On the working capital side, currently we are cash sufficient.
Okay.
Our debtor collection days also did not significantly reduce. Rather, we have maintained more or less-
How much is it currently?
93-100 days kind of thing.
Okay, 100 days, actually. Okay. So, how are we? Are we planning to reduce it even further, or what are your plans?
Yeah. So our efforts are continuous to reduce the overall receivable days. We are targeting to reach around 90 days. In fact, if you see the past trend, we started with 105. Last year, we had brought it down to 99. Now we are in the range of 96-97.
Okay.
So the efforts are continuous. That's on the receivable days. When it comes to cash position, we are having almost close to INR 20 crore in fixed deposits-
Okay.
-as of September, 2023.
Yeah. Yes, sir. So I just want to ask how is the Europe situation going on? Because you mentioned in the last call, clinical sector is facing a little bit Europe issue. How are we seeing, is it recovering, and we are seeing incremental growth from that side? How is it turning out to the Europe situation? Hello? Ma'am, am I audible? Hello? Hello? Hello.
Hello, yeah, Manav, you are audible.
Yeah, I'm audible. May I just ask that, how is the Europe situation turning out to be? Is it critical still, or are we seeing recovery in clinical sector, and are we seeing incremental growth going forward?
Hello?
Hello. Ma'am, ma'am, sir, can you hear me?
I can hear you, but I think the management is blank. Line has gone blank. Just give me a moment. Just stay on line.
Yeah, one moment.
The person you have called, he is your-
Hello? Hello. Hello. Yes, ma'am, I can hear you. So can I ask the question now? Hello.
Just give me a minute, Manav. I think the management line is blank. Just give me a minute here.
Okay.
Just stay online.
Yeah, I'm online. Thank you.
The management line is connected.
Okay.
Manav, you can go ahead with your question.
Yeah, I'll ask the question, sir. Thank you, sir. So ma'am, I'd, I've been asking that, how is the Europe situation turning out to be? Is it still critical, or are we seeing recovery and incremental growth going forward? Hello? Can you be a little louder? I think I'm just very feeble sound over here.
Hello?
Hello. Yes, ma'am. I can hear audible now. Should I ask again the question?
Yes, please.
Okay. Yes, ma'am. Ma'am, I'm just asking that, how is the Europe situation turning out to be? Is it still critical, or are we seeing growth and recovery over there for clinical segment?
Yeah. I think that comment was made based on certain feedback we had from customers in Europe.
Okay.
Mostly in the agrochemical industry. There, you know, we do see response getting better in terms of their inquiry, requests for quotes and stuff. So, it seems better than before.
It seems better. Ma'am, can you also please just provide me the employee count which we are operating with as of today?
We are around 1,400+ employees.
Plus. 1,400+ employees. Okay. So yeah. Ma'am, also the total loan book of yours as of today, total loan book and the split of secured and unsecured.
So, as on 30th September, the overall outstanding is close to INR 19 crore, which consists of INR 12.5 crore of term loan and INR 6.5 crore of working capital utilization.
Okay. Okay, sir. Sir, I just wanted to ask, like, India is being very optimistic. It might be through Davos 2023, BioAsia, Invest India, Invest Telangana, Startup India, Make in India. These are all initiatives which is promoting India being the labor, largest labor-intensive economy, and we have the largest gene pool across China in population as well. How are we see. There are various uniqueness of problems which our pharmaceutical and engineering companies facing across globe. What opportunities do we see being Vimta, to lead this, a change and being tapping the largest gene pool for quicker and better quality medicines and formulations?
The biggest shift that we are seeing in the pharmaceutical industry is the shift towards large molecules. You know, whether it's biotherapeutics or biosimilar. So biosimilars are said to have better efficacy and also safety-wise, supposed to be better than the small molecules.
Mm-hmm.
So in terms of moving towards, you know, more safer medicines, I think the whole world is walking that way. A lot of biotech ecosystem is now developing and growing in India as well.
Okay.
Therefore, even Vimta has been focusing on enhancing its Large Molecules capabilities, whether it's on the-
Right.
the clinical side or analytical or clinical research side.
Okay.
That's definitely a trend that we see, and then we are working towards, you know, capitalizing on that trend going forward.
Perfect. Perfect. Ma'am, and on the theme of government support, Vimta being life sciences industry, and to the state, the life sciences is a major contributor. And Telangana undoubtedly has pharma hubs, B- Hub, T- Hub, and Genome Valley 2.0 is also coming up. Our recent discussions with these investors, analysts from Kotak and IIFL, what major concerns do you see these people have in monetizing our opportunities? And also what we have understood around our environment, and how can we monetize it more better for these new age industry which are coming in Telangana, in particular Hyderabad as well?
Sorry, parts of your dialogue were not very audible, but if I want-
Okay. Yeah, I was just majorly, I was asking what major clarifications does majorly these analysts had pertaining to Vimta, which we had given them presentation about. What any clarifications or any commitments or any, what is the doubt they had regarding our company, which we had clarified, and any notion they have of company which was clarified further from these thoughts or these meetings?
Interactions with the investor community have been quite enhanced by Vimta over the last many years.
Okay.
We are very open to interacting with this community, and always encourage you to reach out to us in case you want more information or any clarification. So there's been an increased communication with the investor community. I think there are not many doubts out there. Maybe five years ago, 10 years ago, there was not a clarity on where Vimta fits in which industry, but I think there's a good understanding now.
Okay. Okay, ma'am. Ma'am, I presume that you have read this document as well, the Telangana Life Sciences Vision for 2030, which says that Telangana wish to be a $50 billion in revenue cluster and $100 billion in valuation cluster. Ma'am, the document delineates or gives confidence of growth of 50, is planning to grow on 50. What is stopping us from growing at the industry level, it's growing 15. Why? What is stopping us from growing at a company level, 30%-40%? What shortages are we facing and how can we be the front changers of this revolution?
Very nice question. I think the environment for that kind of growth, you know, the platform for that kind of growth is currently under development. You know, we are at the beginning stages, and we are yet to reach a level, specifically Telangana is yet to reach a level where we could be benefited with a 30%-40% growth rate. Whether it is pharma industry or electronics. But having said that, the future is really brighter. Now, we didn't even talk of these things maybe a decade ago. And now we are talking and we are seeing examples of that kind of investment coming into the state. So that gives us more confidence that, you know, there is an ecosystem that is being built for companies such as ours to grow and prosper more in the future.
Right. Ma'am, also one of the need of the hour segment which we cater to also is wastewater treatment. How are we supporting these government states and also for better execution in their part?
We, we do wastewater testing through our environment division, and if there are any government contracts, you know, we participate in government bids. And, based on, you know, the kind of projects that we are able to win, we work with the government partner in such projects.
Okay, and how do you see this segment going forward?
We don't see a market change in this segment. We expect the change to come in, the sooner the better for our nation. But I think there's a lot of work to be done at the regulation and implementation level. Once that starts happening, then we will see good impact on the revenues for our laboratory also.
Right. Ma'am, on the CapEx side-
Uh, madam-
Yeah, yeah, just last question, sir. I just joined back in the queue.
Yeah, please join back because we have a few more people.
Yeah, just the last and small question. Ma'am, the CapEx we had for this year was planned for INR 90. Upcoming, how are we seeing the CapEx to go? Because this is just the start of mountain.
Whenever we do a capacity expansion of this size, it's usually a plan of at least five years. So any equipment that we buy will be in the normal course of business only.
Okay. Do we have a roadmap for future CapEx, like INR 90 crore or INR 120 or going forward, any roadmap is there?
No. The CapEx plan that we have is for the expansion and the routine, you know-
Okay.
Capital expenditures with respect to equipment.
Okay.
Going forward, we would have what we would normally routinely spend, which is, typically the depreciation amount. This will again, you know, change possibly if we have some exciting, customer partnerships developing.
One clarification I had, ma'am. Ma'am, one of the-
Sorry to interrupt you.
Yeah. Sorry.
We have a few-
Okay, I'll just join back to the...
Queue, please.
Thank you.
Thank you very much. The next question is from the line of Lokesh Manik from Value Capital. Please go ahead.
Yeah, thank you for the opportunity again. My question was on the order book. I'm not sure if you're sharing that number, but what would the same be for the quarter, across all your businesses? And what is the timeframe for executing this order book?
No, we don't go into the specifics of order book.
Just a broad number, what it could be in the future?
That's an information that we have not so far, shared or want to share.
Okay, okay. No problem. That's all right. Thank you so much.
Thank you very much. Due to constraints, we'll take that as the last question. As I now hand over the conference over to the management for the closing comments. Please go ahead.
I want to once again thank everybody for joining us on this Q2 earnings call. Appreciate all the good questions that were posed to us. We look forward to connecting with you again in after the next quarter. Thank you.
Thank you very much. On behalf of Systematix Institutional Equities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.