Q2 20/21

Nov 3, 2020

Quarterly report

Ladies and gentlemen, good day, and welcome to the Travany Turbine Limited Q2 and H1FI 20 earning conference call. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to pass questions after the presentation concludes. Please note that this conference is being recorded. I would now like to run the conference over to mister from CDR India. Thank you. And over to you, sir. Thank you. Good day, everyone, and a warm welcome to all of you participating in the q 2 and h 1fy21 conference call for Srini turbine Limited. We have with us today on the call, Mister Nikhil Soni, vice chairman and Managing Director, Mr. Arun Mote, executive director, along with other members of the senior management team. Before we begin, I would like to mention that some statements made in today's discussion may be forward looking in nature. And a statement to this effect has been included in the invite, which was mailed to everybody earlier. I would also like to emphasize that while this call is open to all invitees, It may not be broadcasted or reproduced in any form or manner. We will start this call with opening remarks from the management. All in which we will have an interactive question and answer session. I now invite Mr. Nikhil Soni to share some perspectives with you with regard to the operations and outlook for the business. Over to you, sir. Everyone on the call. I hope everyone is safe and well in these COVID times. I also do wish everyone a very happy Divali, which is going to be upon us soon. Firstly, welcome to the q 2h1fy21 conference call for Qiwani turbine. The overall performance of the business in terms of turnover order booking and profitability has been lower in H1fy21 as compared to H1fy20, which has mainly been due to the impact of the pandemic in the first quarter of this financial year as well as to a limited extent in the second quarter as well. The net income from operations in the half year FY 2021 is at $3,510,000,000, which is lower by 24% and EBITDA in H1 is at 7 is at 977,000,000, which is at a margin of 28%, which is only lower by 7%. Back after taking into account the exceptional item, which I will go into a little bit detail. For the half year, is that 50 is at 516,000,000, which is lower by 36%. The outstanding carry forward order book has on the 30th September 2020 is at 6,700,000,000, which is lower by 3% when compared with the corresponding period of last year. Overall, the order intake in Q2 FY21 is 22% higher than than Q1 FY21, even though which is lower by by by about 16% compared to Q2 of FY 20. The overall order booking for the current half year has been also severely impacted due to the pandemic. Also in the export market where restrictions and travels had had not allowed us to finalize and close orders, and customers are waiting for us to travel to do that. There's been some movement on that front and as to and within q 3, we've already seen a greater mobility of our personnel to the extent that over 25 teams are already internationally traveling. And so we believe that we should have better traction in the coming quarters. The turnover on profitability have increased by 12% to 29% in the 2nd quarter compared to the first quarter of this financial year. And in the quarter under review, the revenue from operations grew by 12% as compared to the last quarter, mainly on account of significantly higher exports as a percentage of the entire often as a percentage of the entire product sales portfolio. Even though that there has been a decline of 25% when compared with the corresponding period of the previous year. The mix of domestic and export sales was at 48 to 52 in q2fy21, while the mix was 50 743 in q2fy20. There's been a significant improvement in EBITDA margin in q2fy21. 550 basis points in comparison with the corresponding quarter to previous year, but an improvement in margin is over 300 basis points in comparison to the Q1 FY21. The improvement in EBITDA margin is driven by a combination of higher share of exports and sales but also on account of lower raw material costs, which have consistently shown improvement over the previous many quarters. Further, there's been a significant reduction in overheads, especially in manpower and administrative overheads. While many of the cost reductions achieved after saleable, So administrative cost reduction, especially on travel may gradually increase in the quarters to come as we necessitate accretive interactions by international client base, but also return the fulfillment of the orders. The company undertook a major rationalization program of its manpower cost which could be achieved due to a focus on higher automation and resulting in improved productivity and better outsourcing strategy, all of which enables the company to reduce its manpower strength. This has resulted in a one time cost of 185,000,000 rupees which has been accounted as an exceptional item during the second quarter results, which is in front of you. And the benefit of this will start accruing immediately. This specific initiative was done at the instance of the union, and I must say that this was an off this was an offer which is brought to us and which we given our long term planning and which I've already alluded to in the previous conference calls and the move to allow Sabini Turbine to be more agile and dynamic in its employee base and its employee cost to allow for a greater degree of multiscaling and work planning, which will allow us to really move forward in our business plan and our vision. To be and even to be a top run global manufacturer in this digital Internet of same stage. We believe as this currently stands, and and this is something very important for all of you to recognize that within the bank now has no workers in this company. All people who will be operating at the shop floor will either be officers and at graduate level with a higher degree of productivity, a greater degree of automation in in that yourself, and we believe that These productivity improvements have already started and will show results within this year. So therefore, the costs which we have incurred in terms of rationalization have been very successfully done. More than that, in this time of COVID, the 61 hour personnel, which have been which is decided to take part in the VRS scheme, had an average outflow of about 30.3 lakhs. We also, as a company, facilitated their movement into other occupations, which they might find productive or of interest to them, multi skilling and other skilling are also offered, but more than that, in case they wish to continue, those offers were also led open to them. I'm happy to take more questions on this at a later point in time. On the screen turbine market in general, And so as you know, McCoy, which is an international market research of outfit, ranks syvania, 2nd largest screen turbine manufacturer in the small screen turbine space. This is driven by our over 20% market share in the global market. And a clear dominance in the thermal renewable segment. This, as we would imagine, is the only growing segments within the entire handed of the steam turbine market. The above 100 Megawatt market is continuously declined in terms of its outputs on basis of declining the demand for coal in the entire power basket, but more so is between the ranges of 30 to 100 and 0 to 30 the the renewable energy space plays a much greater role. The domestic order booking in the previous quarter has an increase of 19% when compared with q 1fy21. The domestic order booking has been in some sectors such as dosage code generation, which is mainly distilleries, sugar, also cement, waste, food recovery, chemicals, fertilizer, and paper and pulp. The the inquiry generalization of the domestic market has surprisingly shown a very robust increase of over 30% in the first half of this year. The main segments of the tractions in order finalizations have been have been witnessing is in the sugar co generation including distillery, biomass, IPT, food processing, and the way we've seen recovery factors. These are expected to continue to be drivers of demand in the Indian economy going forward into the second half of this financial year. The export market, the overall order intake has been higher than last quarter, an increase of over 30% in comparison to Q1 FY 'twenty one. The order bookings in the export markets have been witnessed mainly from Europe the Middle East, South And Central Central America. And the segments include waste solid simple waste, incineration based IPTs, as well as biomass and sugarco de elevation. While the market globally are yet to regain its level of previous years, We witnessed the overall export order intake, which is increased by 30% during the quarter under review when compared with the first quarter of this financial year. But in my expectation, and as I had said in the previous call, our expectation, the export market has been more muted than what we had expected. Which is largely driven by the lack of transportation and the lack of travel that our service engineers and marketing engineers have been allowed to do. We believe that for the greater mobility in the coming quarters, yes, there will be small shocks in between in terms of shutdowns and lockdown, which will happen for months at a time or 1 month or 2 months. But in general, the ease of traveling will only increase in the forthcoming quarters, and we believe that this will suit our strategy to be able to cater to our customers on a face to face basis while still utilizing the best of digital technologies. It was another part of the quarter under review. We could already see physical movement in a limited manner, which has already gained our success in this current quarter. In the export market, inquiry generation, The renewable energy sector is driving demand specifically from the biomass and waste to energy projects. The company currently has ordered an installation from over 70 countries and will be focusing on new markets in the coming years. Some of the segments of focus are biomass, paper, process, and sugarco generation, and other agro based industries, including palm oil, etcetera. The aftermarket segment during Q2 FY 2021, the aftermarket order bookings increased by 77% at 710,000,000 in comparison with Q1 FY 2021. And a 41% in comparison with Q2 FY 2020 on account of the increased volume of stairs and refurbishment. On account of the substantial order book, you're due to FY Twenty 1, the half year order booking for the current year has reached almost a similar levels at the half year FY Twenty. Which under the current circumstances is significant. The team has played a very important role in trying to build the order bookings from the aftermarket segment which, as you know, includes syringe, brand spares, and the service of our own installed base, but also third party offerings that we do through our refurbishment offering. Our competition has been far more successful in the domestic market, And again, the export market has been hampered due to a lack and a slowdown in terms of travel. We believe all of this will get ease in the coming quarters, and we are more optimistic in the order intake on 40¢ in the pawning quarters. As regards to joint venture GTV Limited, which is already been communicated to you, Traveen has filed a petition in the national company law tribunal, and the matter is currently subjugists. As with most things in the pandemic, these NCLC hearings have also been continuously postponed due to the pandemic reasons. Most about where the company state is positioned right now. We believe at this point in time, Sogany Turbines is poised to transform itself into a truly world class efficient, productive outfit to manufacture at a quality level where there's a minimal amount of rejection, but more so, which meets every standard globally applicable on a technological level which is truly work class. We've been utilizing the best in digital technologies to ensure that information is seamlessly communicated to the entire value chain within the organization from sales and marketing to to to to, process planning, manufacturing, design, engineering, etcetera. Without any human intervention, which allows for a seamless and error free transmission of data. More so, with a focus on cutting edge digital technologies. We aim to be closer to our customers, to be able to cater to their requirements for more remote cases, but to do all of this with lower costs and with higher accuracy, This covered with our technological investments in R&D, which will continue to expand after our portfolio, but also expanded over to other rotating improvements, both from a product perspective as well as from the aftermarket and aftermarket capabilities will be significant. Already in this current quarter of q 3, we've had great success in the refurbishment market for utility range turbine. And we believe that this is an area where our offering is being able to offer of a world class quality and a technological level, which which is benchmarked with the world's best, but at a price point, which is immensely affordable. Is a win win situation for everyone. The outlook of the company, as we had spoken about in the previous quarters. This current year will be impacted with the cause of COVID. There will be a decline in turnover, which as you can see is already reflected partly in page 1. Having said that, the the margins by which the company is operating will continue to sustain to some extent we may not be able to achieve and sustain the 26.8 percent PBT margins which we've achieved in the current quarter, but definitely we would be able to sustain and put a margin somewhere in between 20 to 22% on a going forward basis. We believe that this coupled with our long term vision on a on expanding and growing our markets, both from a product perspective, technological perspective, and a variety of different means is something that will allow us to grow quite significantly. We are very ambitious and aim to utilize Some of our free cash reserves to aid this growth in the coming quarters. Currently, the board hasn't taken any decision in terms of utilization of the reserves which are very healthy at this point in time. And as you do come about, we will definitely let you know. But have you said that for this year as a whole? ABT for this current year should be at the same level as of last year without including the performance of the joint venture as well as the one time write off. Having said that in a year of pandemic, we think that these performances would be quite good, but it it positions us extremely well for the year to come, where we are extremely ambitious to be able to further our growth in a very sustained manner and I look forward to giving you some of that insight in the quarters to come. With that, I'd like to open the floor for questions. Thank you very much. Ladies and gentlemen, we will now begin the question star and 2. Participants are requested to use answered by asking a question. Ladies and gentlemen, we will wait for a moment while question queue The first question is from the line of Ravi Swaminathan from Spark Capital. Please go ahead. First question is with respect to the aftermarket. So basically, we had seen very good growth in this quarter. Do you think that 40% kind of year on year growth that we had in this quarter. Actually, to that extent, is it sustainable, or is it like these orders where supposed to come in 1Q and they got spilled over the second quarter? And, when this aftermarket growth at Farfetch, can we see the EBITDA margin also seeing an expansion and a structural expansion by 102100 bps. Yes. Zavi, you've been following the company for a while. So you know 2 years ago, what our EBITDA margins were. We had certain cost increases which we had to get out of the system, which took 3, 4 quarters. And forming that, you can see our material cost had sustained had had had reduced from about 56.1% to a sustained level of about 54%. 46% as of this current quarter may not be the most, realistic number for us for you to assume going forward, but I would imagine that we have a sustained increase in on material cost. This is supported by 2 factors. 1 is, one is a product mix. The fact that you rightly say the high degree of export gives us higher margins, but also a higher amount of aftermarket as a percentage that the order book also gives you data comfort in terms of margins. More than that is our internal strategy of standardization, which appeals to our balance sheet, being able to actually reduce inventory I haven't talked about how we'd manage that trade receivable, etcetera, happy to do that as well. But when we get more operational efficiency, we will translate into higher productivity. Which is the move that we've done in terms of employee rationalization for the least of a sustained higher margin. We give you better clarity in the coming quarters as to what that sustained margin would be, but I'll give you an indication as to where it stands. From the aftermarket order book, as you rightly pointed out, we were a little disappointed in the exports or the book or for the aftermarket coming in, in the previous two quarters. We had a higher expectation and we think in the coming quarters, we will be able to get some of that back into our order book. We think that currently, as you said, the certificate increase is something that the team worked very hard to get, but this has been focused on, as you know, we have 3 different distinct 3 distinct, segments of our aftermarket, which is crevini branded spares, the service of our our own installed base and the service and parts for 3rd party airlines. And each of these has different growth. The growth within our own installed base will be somewhat linear to the extent that we are able to drive the in our existing customer base to upgrade or to buy spares in a 15 basis from us. The real growth in the market comes from the refurbishment market, and I already gave you an indication guidance that we had in this current quarter, which is q 3. And we believe that we should be able to expand this part of the business quite significantly and into areas into aligned rotating equipment. It gives us not only a competency to be, to approach a broader market, but also to prove our own technological levels as we cater to those. So in the in the roundabout manner, the growth that we've seen in the market has disappointed from the export market, which we hope to bridge in the coming quarters, But in in an overall sense, we aim. We are very ambitious on this particular business line as we pointed out because not only is there a gap in the market for a service provider like Savani, globally, but, but that this is a very high margin business as well, which requires lower capital. Got it, sir. And, with respect to the domestic market in the last quarter, you had mentioned that fees, and percent of sectors are seeing some traction. Are you seeing the kind of sustainability in Bracken from this core industry which are not there for quite some time? You know, what is we spoke in the last conference call as well, and our expectation was that domestic order booking would be slower. As as it has turned out this quarter, we've seen a much higher degree of domestic order booking. So we're very pleased by that. And also, the inquiry book is done quite rapidly. So we're quite confused by what seems to be at least an appetite for growth in the Indian market. I have our president in the in the line. Maybe you can add it a little bit as to how he sees which sectors in the market, picking up? Domestic order book as well as the inquiry book is quite strong because we are seeing, like, a process cogeneration industry based to an additional input, cement plan for thing because their their final product will be competitive when we are planning the ceramic combined because everybody's looking for a cost reduction in their final product. We are seeing efficiency improvement in the system. Do part of the inquiry that is increasing substantially. So what we're doing that, and going forward, this this will contribute because, accommodating this up, their final product is decided by this sort of a equipment getting allergy to their, CapEx and reducing local So we are employed, bullish on the domestic market as well. And, of course, international market, once travel opens up, we'll be able to get back because all the inquiry pipeline, nothing we lost because we all delayed. The finalizations are getting delayed because there is no travel Got it. I must point out that in this in this previous quarter, we had an 81% market share in the domestic market. But on a reduced market, so they frankly didn't wish to highlight it. But we are even more competitive than we've ever been. And so we continue to maintain our dominance in this small screen turbine market for India. And, maintain our global second position. Okay. Okay. Got it. And my last question will be present to working capital, working capital improved significantly. And, obviously, that program operations have also increased significantly. How much of this is sustainable? That's my question. Mostly it is. Mostly it is. You see when when, again, when I take you back a couple of years, when we talked about the fact that there was some cost increases that happened with. This had this was due to an extreme degree of customization that we are doing with our provides. And as we move to a more standardized platform, not only did this actually reduce our our normal period cost but also our inventory and there are other working capital needs and and that so therefore, the degree of generalization is allowed us to streamline our balance sheet to a much bigger extent. This coupled with good customer advances had allowed us to be extremely confident in the working capital space. So that is not a matter of concern. And so we don't see this of course, given given turnover, and then we will be able to get in there, but mostly it's sustainable. About it. And, the the free and the cost of cash, I mean, can there be an increase in dividend or by last or something on the thought can happen? Then that is, like, we are not, like, I think that it was a low market gap. That's a good question, the fact is that the board hasn't considered any of these, supposes at this point in time, so it will not be correct for me to actually talk about this. But the thought of the ball at this point in time is focused more on growth. We need to show a higher top line growth, and I think that what investments are needed, internally to be able to drive that course. It's something that should be a matter of priority. And as we are able to discover what what those avenues of growth would be, the other strategies will become a lot clearer. Got it, sir. Thanks. I will come back if you have any questions. Thank you. Thank you. The next question is from the line of Bhavan declining from SBI Mutual Fund. Please go ahead. Thanks for the opportunity. My first question is on the competitive landscape. We've seen in the last quarter, a couple of your large competitors announcing that they're exiting from the steam business. So are you actually seeing them, exiting from the smaller turbines that you are addressing or they are more on the larger turbines? That's a very good question, and I'm gonna answer it in in a sort of roundabout manner. This has been a phenomenon that we have seen for the last, I'm gonna say 10 years, which is the percentage of full internal power generation in terms of new order, new orders has been continuously declining continuously. I mean, it's a it's a steep slope, downward slope. And so therefore, large utility based turbines, are really not getting sold, especially into the common power generation sector. So the entire market size for large utilities, their bank has disappeared. At the same time, the market for small screen turbines has radically changed from sitting based on the fuel source of coal to more renewable waste. Measured. And so, therefore, what you've seen over the last 3 or 4 years is that the small steam turbine market, both from a megawatt as well as number of units ordered has remained largely, the same. It's not increased by 83, 44% annually. But the but the larger market of above 100 megawatts has fallen I I would say over 70, 75%. And so, therefore, the the when you when our larger competitors which is the people who have a lot of money to invest both in technology and marketing the space, see that the entire market shrink. I don't know if it suits them from an entire from a perspective of being able to address the market. So it's it's a package. I don't think it is it is lucrative enough for them. Secondly, Given competition like us, who are more members, who are more agile, who have a much lower overhead costs, as well as structurally manufacturing costs, who have aligned that technology to be, cheaper. I think that, larger competitors are very difficult to compete with us also. So what we've seen is that actually, Globally, we benchmark our competition versus feelings, who is by far the most dynamic company in the space. And really apart from them, we think that, other competition, is something that is is is is very manageable. So if you look at it in terms of people who are exiting this market have been happening continuously over the course of the last 7 or 10 years. The largest competitors, and I think you're talking about certain week that came about in the last several weeks, those will have further impact in terms of the number of participants in this market. So we are informed by the fact that, other people do not find it as lucrative markets. We, as we've always said, are one of the few companies that makes up margin on the product. Most people in this capital space and specifically exchange turbines or turbines in general end up making their margin only in the aftermarket. And so they drive their sales, just so that they have an installed base. So we believe that we are positioned well. They're happy about the fact that other people don't find it lucrative, and it will be primarily driven by their cost rates as well as the size of the market. Thanks so much. A couple of updates from, the previous quarters. So one is that we are endeavor to actually get into the the refurbishment market for 3rd party turbines. Where are we in that? I do understand, you did mention about payment restrictions impacting, but more structurally, how, have you progressed on that efforts, taken by us? 2nd is, the efforts that we have been taking, to enter the drive to wine markets in the oil and gas space. So that that would be useful. No. You brought up 2 very good points, and I'm gonna get the the the heads up is is just to actually answer both opening these questions for you. I I I it was my mission that I did not, talk more about our driver by an API market offering. And our, our plans for order booking this current and coming here but first maybe I'll ask Sachin about the different after markets to talk a little bit about how we see the refurbishment. Sachin, can you give a little bit of insight as to wherever they need to find this place in terms of getting orders from the refurbished market in the short term. As far as refurbishment business, which is our multi brand service business is concerned, but we have seen a steady progress in the inquiry generation over the last couple of years. And as our wife, chairman has mentioned, I will refer to the chapter as you are all aware, because of the pandemic situation and the travel limitations, the international auto bookings has not been up to our expectation. But on the domestic front, we have done considerably well, and there is a remarkable improvement in our performance, both for inquiry generation and auto booking on the domestic plan. So going forward as travel easy for further, we are looking at better auto booking and inquiry generation, from international for the refurbishment business. As far as the sectorial performance is concerned, like to say that our constant efforts towards expanding have helped, get into new markets for the refurbishment business and, not just new geographies, but also, new segment, as an end user applications diverts from what we had done in the past. Thank you. Bobby, before I ask you, sir, to answer on the APM market, we are currently in the process of doing 5 year strategic plan for both the product business as well as aftermarket. And I have to say that the ambition levels that we are putting are quite, tough to achieve because we believe that we have to be growing at a level which allows us to compound So this will need all our market segments to perform, and we have to have the the the correct ecosystem and culture within the company. And so therefore, the the rationalization that also took place allows us to be to align all employees of the company. So, Satya, can you talk a little bit about what your ambition levels are for the APR market and, and and and abroad? Thank you. It's here, coming to APA market. And and we've been sending the last, industrial car also. So and it's good vendor lead. To become a part of the program that is one of the major challenge where the last 2, 3 years, our efforts in this, have given a very positive reward. Today, globally, 75% of the requirements, when he approved as a approved vendor And the one more important point, I would like to mention that even domestic market has been in, recently announced there was huge investment getting planned for the 10 years into hydrocarbon sector, where 3 needs approved by EIL, PDIL, all the predicted consultant and, EPC players in this thing. This is what we have seen, the size of the market. Totally, when we backed this thing for 2,000,000,000 in the face of the market, which will be all opening to us. The 5 to 7 years part of the team as we start building the references. We have quite often discussed in Middle East, Georgia, and, especially in South American region, then Europe and, Southeast Asia, apart from the rest of Asia. So since the product is, proven and, running references are established and the VA has a premium, a clothing, It was 70 5 percent of refineries and the hydrocarbon companies and consulted by EPCs to create So we we we have quite bullish on this, and we may be able to, you know, really drive this segment to a great extent. Thank you so much for taking my question. Thank you, Mr. Prashad. Thank you, Sachin. Thanks, Mikael. Thank you. The next question is from the line of Ashik Patel from Equita Securities. Please go ahead. Hi, sir. Thanks very much for the opportunity. To add a couple of questions. So the first one was there is a couple of quarters ago US planning to develop a strong value proposition for the super critical CO2 turbine. So have you made any progress on this side? And why do you think we'll be able to commercialize this technology? That will, you know, first question. No, that's a very, very good question. We are extremely bullish on this technology being the defector of our own market, for our own market. So we thought that it is it is worthwhile for us to invest at the point in time that global investment is going in and the same space. The research it has progressed substantially. Unfortunately, I'm not able to get into detail as to where we currently stand, both from a perspective of our academic collaboration as well as industry partnerships because they're subject to certain degree of confidentiality. But suffice to say that this market will develop over the medium term, which is not a short term product. And I think that if you look at it over the next 5, 7 years, this market will develop quite substantially and possibly a post that it will replace the steam turbine market. Secondly, you have, okay, it is very the domestic 0 to 50 megawatt scheme turbine market was around a 1000 megawatts in FY 20. So that one thing, expect the size to be in 20 That was a 0 to 100 megawatts segment. It was about 1000 megawatts. We believe in in in this current year, it would be in the 1st half year of decline by 50%. So, going forward, I would say that we anticipate some growth. So maybe, 25 to 30% down year on year. So that, that as counsel made a word, anything was for 0 to 0. So then what would it be 0 to 30? I think it is a little bit worth of it or maybe more 75% of it. Sure. And, sir, let's lastly, only bookkeeping, sir, Sir, could you kindly share of export in our aftermarket order books and similarly on the order booking trend as well? That will be all purpose. You know, I'll get, Narayan to get those informations to you, but, suffice to say, I think you heard what Sachin had to say also that we were slightly disappointed on the order intake from the exports on for aftermarket, but we believe that given the type of travel we allowed, and we already have people out traveling that that, this should get made up in the Thank you. Thank you. The next question is from the line of Karshal Shah from Danki Securities. Please go ahead. Yeah. Thank you very much, sir, for the opportunity and, congratulations on a fairly decent set of numbers. Sir, I had 2 questions. One was the execution, you know, as you spoke about your opening remarks, which has been a week so if you can just share your thoughts on how, we expect the execution to kind of, progress over the next few quarters, and also the key sectors which can drive, better education, both in the domestic and in the export market. And the second question was on the end point, but, we've done you know, very remarkable rationalization. So what could be, you know, sustained number in terms of the employee expenses that we can kind of build in you know, going forward. Okay. From from a output perspective in the next several quarters, of course it will improve because we already have an order backlog, which is security becomes sufficient enough for us for us to take forward for, with the full year, of course. The issue is the order accepted, the customer acceptability of the turbine. So we have been prudent in terms of, actually working with our customers because not all customers are able to accept because of various problems that they may have. And so therefore, while we had said that turnover for this year may be down compared to the previous year, between 10 to 15%. I think that is still reasonable for us to assume at this sometimes. This is also compounded by, what we have in any given given year, which is the book and bill within the current within a within a specific fiscal. Given that 3 months Q1 with WhiteHat because of COVID and part of Q2 as well, the amount of book and bill has also been limited. But having said that, we we we think that we're that's getting realistic in terms of the output that is necessary for the for for whether for where our customers can interact. Of course, if there's a greater opening up of the market, we will have been able to push out more products I have to tell you from the output from a productivity perspective of labor. We have 2 units, one is in Sunproa, one is in senior, and, they they have the same degree of output, which is the number of providers they would produce, etcetera. And the number of people involved with the same degree of productivity, in one factory versus the other was 20% of the other. And so therefore, this rationalization aims to move us to a unified productivity level throughout the throughout our manufacturing day. So therefore, from a employee cost perspective, while, I think the 20th draw that we have at this current point in time for quarter, is is slightly lower because the credit for the other rationalizations are included in that. And also given the fact that we are are going to be hiring across the breadth of the higher value added services. I think that, maybe crisis or sustainable number for us to take in the short term for the very first first question. So just one last thing. You had alluded the incident period in the first quarter that, for the full year, the revenue number could be down by about 59%. And just now, also, you've kind of given the similar range. The first half has been, you know, a little weaker. So does that mean that in the second half, we're expecting significantly better traction across segments and just one a additional point on the execution part. If you can just also share which are the sectors which are kind of, you know, slow moving, and which are the sectors which already to take delivery. Actually, you're not a sector. It's customer to customer. You know, there's nothing the the the the sectors which are facing orders, you know, which are largely sectors of food, pharma, certain degrees of distillery and, and agro. But an an incident from a VAT perspective. It depends on really customer to customer in terms of the balance sheet, really. In terms of how they've been able to put the rest of the plant up together. So I think that is very difficult to say which sectors are volatile. Understood. That that is it. Thank you. Thank you very much. Thank you. The next question is from the line of Anan Bovani from Unifi CAFD. Please go ahead. Hello? Hello? Yes. Yes. Yes. Yeah. Good afternoon. So so this is actually all the book. I see that about 22% of all the book is now aftermarket. And, it has it's been telling me over last 15 or 4 by 10%. So so part of it is is because we haven't got, but, you know, I mean, the absolute level that I've done very well. So do you anticipate this particular thing of improvement in aftermarket to kind of continue and let's say, see by let me get to, like, a 40% 25% kind of a number. Is that kind of a realistic expectation? I think your expectation should be that we should continue with the same growth trajectory of our aftermarket as far as the percentage shared in our Turnover, we are equally opportunistic that our products will grow in the newer market segments as well as capture greater market share in the existing market segment. The previous, question, I've alluded to, you know, our turnover mix And I think the fact is that while we're cognizant of where we sit and turnover because there's a, basically, a overhead and cost, absorption through that. Of margins and profitability is something that I think will be sustained going forward. So why does we may see a decline in in turnover for the current year? At a PBT basis, we would be on the same level last year in absolute level. Yeah. And his, aftermarket breakup, he mentioned he had 3 areas, defaulted to double check. 1 is the there. You can have, services. What is the 3rd is 3rd is for we offer the same, same offerings to third parties. So we need to third party, spares and services. But you see for 3rd parties where the offering is a little bit more diverse because we would be, it's the the the the offering to be anything from balancing to complete, revamp and, updation of efficiency So the value addition is different across the entire chain. So very difficult to place it under, any other buckets in this generic name of refurbishment. Okay. So when that, the larger, is introducing an ASR OEM for exiting the class, Have we seen being able to get refurbishment business in that moment? Because if a player is exiting the market for manufacturing, most likely, it would be, affecting the refurbishment market as well. So if that's the right assumption and I will be getting any share there, No. The assumption is slightly wrong. We are exiting the product business is to manufacture, but they will stick on in the in the aftermarket. But it makes our value proposition even stronger, which is to say that we are also a full line manufacturer. And, and so therefore, we do target that segment very actively And if she gained success and gained success is, in a very prestigious community program order very recently. So, the ranges are not constrained by by any limiting factor that we place on ourselves for participating in the market below the three megawatts. Etcetera. So, yes, I mean, that is a it is a target segment for us. The value proposition changes, I see, because no one no OEM is actually gonna give up that it because it's a it's sort of dead in bucket for them. Yes. And, sir, with regards to a a 5 year plan, there are possibility, for us to do some inorganic, growth Is is that a option you explore considered and tell you, contemplated any potential value of that vaccine? Well, I'll tell you the the no. We have not contemplated any accent, and that kind of support has not considered anything. Is it is it part of management thinking? Yes. Is it is it something that we'll act on? We'll have to wait and see. But the more important thing is that what we do recognize is the strength of our balance sheet, which is, and the way that the company run, that technology is at the heart and soul of what we do. And so therefore, whatever we do, have to keep that in mind. They need acquiring assets is is not of great concern to us because we think that the way that we operate, which is asset light is the way forward. So I don't have a clear answer for you, a a part of saying that the principles by which we would evaluate. Anything would be the same way we evaluate our current business. But I cannot definitely rule out any, you know, organic taxes or plan as well. Depending on where I go through the free picture. Thank you. The next question is from Manish Goel from Inam Holding. Please go ahead. Yeah. Thank you. And very good afternoon, sir. I have a couple of questions. So, sir, on the on the de exiting the global business, 1st in turbines, how will it impact our JV, going forward, sir, for the small turbines. You're putting it in a very difficult situation because, like I said, our joint venture, is is could be filed a petition that NCLP, which is updated. So I really wouldn't like to predict here on what their plans are. But suffice to say that it doesn't impact up. Uh-uh. Sure. Growth in any manner. Okay. So, sir, just on a, as you were mentioning that for the the market for smaller turbines. So it was growing, steadily in last 10 years. So, like, if you can just throw some more light as to how do we see this going forward, for next 3 to 5 years, and also keeping in mind that between the mix of, industrial driven demand, for process Cogent and on other side, the renewable based biomass based, renewable energy demand. So how do you see the landscape evolving for next 5 years? You know, I just, give one specific segment as a example to you, and this is pretty much prevalent globally. So municipal waste, it's it's actually it needs to be certain now that landfills is a bit elusive to other provinces and groundwater and and other issues is really not the way forward. And so incineration, for some degree, of treatment, of the waste is necessary. If you had incineration, you have a potential economic output in terms of power. And so, therefore, when you look at European countries, which have always been the environmental leaders, we believe there is significant amount of greater investment, which is necessary in this space. The order only has, I'm gonna say approximately 10 odd percent, 12 odd percent of global population. So the amount of waste that's created everywhere else in the world presents a significant opportunity in which we're seeing in a small manner right now in the way solid solid municipal relations and relations sector. So we believe that the growth in this renewable form, both from biomass is independent out and out producers as well as uh-uh the other forms of renewable, we continue to grow the market. And this is despite the fact that captured house generation based on, uh-uh, coal may actually decline. We've keep saying that increase. So so that's coupled by our, greater market participation in in in areas. Which expand our reach into the market via an API, turbines, or combined cycle offerings, etcetera. We'll continue to aid our growth in the entire you know, the entire market may go by, 1 or 2, 3% annually. Okay. Yeah. That is what I was trying to get a sense that overall market now at a particular size, maybe as you also mentioned, that currently, the pandemic has kind of like, to locate environment, but I just wanted to get a better sense on next 5 years. Okay. So, basically, we are expecting, low single digit growth, going forward as an overall market, but we our address, we are looking to increase our addressable market, and that is how we can look forward to the growth going forward. Yes. Sir, I I I also I also will I also will add new markets, like a drive to a brand market is a new It is not con it's just it's not something that we've addressed at all. There'll be certain market segments like combined cycle that we've not addressed at all in the past. Which has a combination of technological input as well as market, and sales and customer acquisition. Sorry. You said about domestic market? Yeah. I was listening to, as we have been mentioning that demand, especially for the process. We we did see a fairly, or just to be frank, did Chinese players have a meaningful presence in the in in this waste state recovery market. Uh-uh. No. No. They've they've not had a meaningful they've not had a meaningful path based on the Indian, steam turbine market, industrial steam turbine market since 2007 8. Okay. Okay. And, sir, coming to the the senior plant, so the entire rationalization, which has which we have done is at the senior plant and And but will it, like, in near future, continue manufacturing, or we are yes, sir. We can't. No. No. Okay. No. No. No. No. No. No. No. It is it will continue to manufacture. It is just a question that, we want to raise a productivity level by 4. Which is the output. And so unless you're able to unless you do really bring in elements of, higher capability and capacity. So we only have diploma, our graduates on the shop floor. We want to move away from the worker culture and unionization. And so right now, we have no union in in in Sevaney. But more than that is to move the multiscaming and to other elements whereby you actually are able to not only raise the output, but, but do it a little bit much better, quality, first time, right, etcetera. And so these things are all getting capability of capacity, and that's where we move towards. There's a conscious shift towards that. So so did I hear clearly that you are looking to raise productivity like 4 x or No. No. That's labor productivity. Okay. Okay. Sure. And, sir, uh-uh, with the recent second wave, COVID in Europe and the lockdown settling, for a month by certain countries, Are you seeing any renewed challenges in, execution and auto booking, sir? You know, the the order placement cycle for these products is long. Everyone goes into ordering a screen turbine with knowing the timelines that are required. And so negotiations may happen. Finalizations get, may get delayed because of degree of uncertainty. From the execution viewpoint, depending on where we are on the execution cycle, where it may be example, if the product is already delivered and it's a question of commissioning it versus how ready the entire plant, because, you know, you need answer that you can get. But having said that, this is a time of extreme uncertainty. But Harish said that we we we've taken them as much as the buffer as we have to by giving the visibility that we have to pay So we said that we we have anticipated that there will be some lockdown. There'll be some pressure in the next couple of months. We think that things may open up a little bit later. But but, surprisingly, the Indian market has has, has given us very positive results. Sure. Sure. And, sir, I have a question on the opportunity which is emerging from the, increased focus of the government on internal side. So have we actually started seeing some traction? Because we are still reading that, it's work in progress and lot of policy formulas are happening on-site, a trade agreement as well. So so do ham has this ordering kick started from the ethanol segment? Oh, yeah. Yeah. It's been there for the last year and a half. And it's only increasing. It's only increasing. So, there's there's they're not this is not only from the the ethanol, sugar ethanol segment, which is which is either taking the via fetal elapses or even direct from changes to ethanol. Truth, but also from the grain based alcohol, there is, ample stocks with the food corporation in India and with other state agencies in terms of their grains. And this, when it's spoiled goes into the ethanol sector as well to make fuel. So there's a lot of green waste fuel which is made both for portable alcohol as well as for ethanol for cars. So I think the entire biofuel market is is actually quite, in in in in a very good growth space. Sure. Sure. And last question, sir, on the ad in house capability, like we had earlier mentioned that in the worst case scenario is is the JV with JV does not kind of progress going forward. I mean, our capability to go beyond 30 megawatts has been building up. So just want to get a sense to how is it been progressing on capability front end? Yeah. I don't know if I actually said anything about it, but, but to give you an idea, yes, Sebeni turbine is a is a manufacturer and designer of turbines up to 100 megawatts. We have our own indigenous models, which we have sold up to 60 megawatts. So we have the capacity, the ability, designs, and references. Okay. Sounds good. Okay. Thank you. Thank you so much. I'll come back in. Okay? The next question is from the line of Anand Bernani from Unifi Capital. Please go ahead. Thank you for the opportunity again. Sir, you mentioned combined cycle is a market that we, are now exploring. Can you give us some sense of the size of the market? Like, in case of trial Bines, you mentioned it's a $2,000,000,000 market, which 1 x 5, 7 years can be one engine approved. If a mine cycle, if you can help us understand where it is used and what could be the potential of the PT site for us? Well, the mine cycle is, is a market that whereby you use a bottoming bottle of a gas turbine or gas engine to take that waste sheet and utilize it now, heat recovery team generated to produce power through a steam turbine. That is the application. So, it's basically a wave 6 type of turbine, but it's with more technical, features from injection, etcetera. The market for this is is as availability and accessibility of gas improves, it is rationale for people to be efficient in their power production cycles. And so this will adding a product into it. The size of the market currently is is at the higher megawatt range, which is, say, between over 30 megawatts. And so, it is a very large market. It is probably, 1 third of the entire, power generation market globally. Okay. So this is primarily used when you're using gas for making power. Yes. But but you have wasted out of gas, and so you use that. You use the waste heat. That's called combined cycle. So you're giving more cycles. Okay. And have you shipped any in this particular category? Any uh-uh as of today? We we have some references and, technological developments under me to ensure that we we can get greater customer, confidence. Okay. So we are not we will stay at this point in time in this. So maybe we're it's not available. It's all yeah. It's it's not an approval because if you're not selling to that of supply chain. You're sell you're selling mainly to, developers in this in this market So the it's not the same as the API market where you have to register and and book it. So it's, it's a degree of, marketing and sales that has been involved, which tends to go down to the customer level to sell it to rather than be registered with some large, or marketing companies. For the finance. Yeah. It will be more difficult to give you more visibility in the quarters ahead, but, the intent here was we're looking to expand the market both at clarity as well as few of your efforts in industry. And whichever the large market segments are, we need to, ensure that we fit squarely within that. And then you have to decide. Yes. I have, with regards to this incineration, in terms of the side of the market, what will be the current by then, have you seen any specific degrees apart from Europe, you know, taking decisive what is that, please? It's Yes. It's it's it's it's it's it's it's it's it's it's it's it's it's it's it's it's it's it's. It's in fact you're looking to support the leader in this, but we have a we have I would I I'm gonna have hazard we have a dominant market share in countries like Korea as well. Japan has its own, needs its own requirements for technology to product. We don't tend to import capital goods So but but even consider Korea, we have a a very large market share and even consider Thailand. All the countries are coming up, and I think that India and I front also has shown some signs. So we have maybe 7 to 8 orders a year which come into the municipal solid waste sector, but really for country, the size of India, which we set it as you should see 100 and also, so we're probably at a 10th of the level where we should be. Okay. What will be the total, 5, like, you know, you mentioned about price of the premium dollar, but this would be, like, at 15,000,000 the late fee. So do you have a number handy? I I think it's it's it's it's a driver of both, and and let's see. Let us work something out and and get back to you. Okay. Thank you for the item. Thank you. Thanks. Well, ladies and gentlemen, that was the last question for today. I would now like to hand the conference back the management for their closing comments. Thank you very much for participating ladies and gentlemen. Creator banks, I think, is very poised in this pandemic time to transform itself into a new stated growth. Management, is extremely bullish on where we sit today. And I think the days coming up will be, very good for everyone, both from a shareholder employee and, like, kind of a stakeholder perspective. Thank you very much. I look forward to updating you again next quarter. Thank you. On behalf of Praveeni Turbines Limited that concludes this conference. Thank you all for joining. You may now disconnect your lines.