Q1 20/21

Aug 6, 2020

Quarterly report

Ladies and gentlemen, good day and welcome to the Traveini Turbines Limited Q1 FY21 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 ask questions after the presentation concludes. Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Ashabhar 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 1fy21 conference call for Srini turbine Limited. We have with us today on the call, Mr. Nikhil Soni, vice chairman and Managing Director, Mr. Alan Motte, executive director. And Mr. Suresh Tenija, Group CFO, 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, following 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. Thank you very much and a very good afternoon to everyone. Thank you for joining the Q1 That's my 21 conference call for training turbine. I hope everyone is well and the families are well in this COVID times, but also given the unseasonable rains in Bombay. I hope that you are all well. So first off, I'd like to give you a little bit overview on where the business stands and how we have prepared in this past quarter. Even though we had a call about 6 weeks ago, I think that you would see that the up that the company's performance has been quite good in this very trying time. The COVID 19 pandemic has impacted not only us, but global economies and industries in a very severe way. And while Q1 FY21 has been a difficult water due to the restrictions of travel involvement of raw materials, but also the fact that that businesses were not allowed to operate, and we were also closed as a company in terms of entire production for over 3 weeks. That supply chain took continue to to be impacted and so did our logistics, supply chain as well. So given these factors, it is it is, quite commendable, I think, in our opinion, the performance that Srini turbine has put forward in this current quarter, which truly shows the agility that the company is able to operate through while being able to have a low asset base and under which it operates, but still deliver on a very dynamic manner to our commitments to our customers primarily, which ultimately hopefully leads to performance for our shareholders. Again, in this time, our top priorities have and will continue to be the safety and security of our employees and key stakeholders along with those with close customer connect. This is all to ensure that we understand and work with our clients through whatever impact the virus may have led, they continue to have on their businesses. The order booking for the quarter has also been impacted due to this lockdown while surprisingly to us. The inquiry generation has been at a similar level and has in fact maybe increased by a couple of percentage points. Our team has worked relentlessly and I see they deserve the entire credit, the dedication of the employees of Trinity Turbine to be able to deliver satisfaction to our customers really was at the forefront of all the efforts in this past quarter. And it was turned out in a extremely forigious manner for us in terms of being able to derive the benefits of our transition, where we are at this point in time. As part of this new normal, the company has also strengthened its digitization efforts with an adoption of various tools such as augmented reality and virtual reality. I alluded to this in our previous conference calls, and as you would tell from his results that it is because of these digitized digital tools that we've been able to achieve whatever performance we have in this current quarter. We believe our step into digitization is just that it's beginning right now, And we are at the real transformation of the company where we would be digitizing and where we would hold digitization at the center of all our activities and us to benchmark activities on efficiency and productivity. So we're at a real transformation right now. There's a lot of thinking internally, and we will be taking future initiatives, which will truly transform our company to be even more agile in the days years to come. The performance itself The net income from operations for the quarter was at 1,650,000,000 rupees, which is lower by 23%. And EBITDA was at 433,000,000 rupees, which is lower by 7%, while that was lower by 11% at 273,000,000. This is, of course, impacted the pack numbers impacted by the performance of the joint venture, which had a loss of 146 lakhs during the, during the current quarter, which we believe will get, this is due to the fact that there's no dispatches in the joint venture and, by the by the next subsequent quarters and by the end of the year, the joint venture will display profitability, and so we are confident on its operations. The outstanding carry forward order book as on the 30th June 2020 was at 6,780,000,000 rupees, which is only lower by about 3% when compared with the beginning of the year. The company achieved a total order book of 144,000,000,000 rupees as against 215,000,000,000 during Q1 FY 'twenty. The decline in order booking, as you well imagine, was due to the lockdown and lower international order booking, as we had also alluded to in the previous calls. However, the positive factor is that even during this period, the inquiry flow has been very steady. At the same time, the company could achieved a higher EBITDA margin of 26 percent due to a focus on cost reduction through value engineering, supply chain optimization, and a reduction in administrative costs. All of these are sustainable into the future as well. We have been alluding to this over the previous conference calls that the form in which the company is selling its product is more modular, which allows us to have a tighter control which has a factor control and manufacturing expenses as well as a utilization of, raw material inventory. So therefore, not only does this allow us to be more efficient from a from a cost perspective, but also to be agile from a cash flow perspective also. At the same time, the mix of aftermarket along with product sales has positively impacted the company this quarter, and I will go into that in a little bit in detail. In a few minutes. The domestic order booking was down by 19% And as you would imagine, that this is impacted with the restrictions that we had in terms of the lockdown in the current quarter. The main segments that we got orders from, but the usual suspects in terms of, the renewable sectors, waste heat recovery, and to specifically process cogeneration. This is a segment that we are still seeing some growth in in the domestic industry. And we believe that the domestic industry will show us good growth, not good growth. Sorry. You were to show us order booking for this current year akin to probably about a total market of about 5 years ago. Though at the same time, the inquiry suggests that in the coming year, which is FY22, the order booking from the domestic market will pick up again. This is driven by several factors, which I'd be happy to answer once you ask questions around it. At the same time, the export market, has seen a decline in order booking of 53%. And some of the export orders that we had on hand which was stuck at port, was able to be dispatched in this current quarter. We have to say that the company incurred certain costs on those on those, export orders with a socket box in the form of demerit Those have been included as far as cost, and we believe that those costs will not be recurring in future quarters. The company currently has inflation over 70 countries, and we are focusing on expanding are present in variety of different sectors, not only in the renewable sector in which we have a global dominant market position, but increasingly so in the process code generation and also in the oil and gas market going forward. The aftermarket turnover The turnover for the aftermarket in FQ1 FY 'twenty one was at 4 26,000,000 rupees, which is 3% higher when compared with the same quarter of the previous year and the share of aftermarket sales to total sales was at 26% as opposed to 19% in the same quarter of the previous year. During Q1 20 of this year, aftermarket segment showed a The on the other hand, the order booking in the aftermarket segment was at 401,000,000 rupees, which showed a decline of 35% as opposed to the same quarter in the corresponding year. We have to take great comfort in the fact that the aftermarket segment has led the business in this current quarter, not only in being able to to maintain its, its sales in this prime times because we have to understand that it was because of the urgency that our customers faced in terms of getting their fares because they made in part of the central supply chain or or part of essential industries themselves that drove us to get permission to start our operations. So after aftermarket is what allowed us to get back in front of our customers and being able to deliver to them. At the same time, the order booking was impacted, driven by the fact that there was uncertainty in terms of when customers may take their shutdowns, as well as total lockdowns in certain areas. It did allow did not allow us to have a, a closer interaction with our customers. Going forward, we believe that aftermarket order booking will pick up in the coming quarters, and we will display a good result in terms of quarter booking for the aftermarket segment for the full year, which is FY21. Design And Development, as we call, has been a very strong area for the company, and we always believe that The value of 3 d turbine has been its engineering capability and the technology that it puts in to its product and therefore able to cater to its customer's requirements We have continued to focus on this and will be investing further in research and development into new areas of locations or newer areas of fluid dynamics and newer areas of of rotating equipment. We can utilize the best of our ability, both from a manufacturing perspective, but also from a supply chain and management side. We are optimistic that we would come up with certain areas, whereby we can lead to future revenue growth for the company. But this will all be driven by technology and design and development. The outlook for the company and we is is quite good. While we had given an update in the last call, about the possibility of having a decline in turnover and profitability. At this point in time, 6 weeks forward from when we spoke I'm not at the position to change what we anticipated at that point in time, but we believe that the outlook for the business is quite good. This is driven by not only a decent inquiry level, but also in terms of the focus that we have in the end markets, which have funding and have the traction in terms of customers willing to set up 2 projects. The problem happens in terms of finalization about us and what we find as at this point in time that customers are looking to bargain. And therefore, while we have a cost advantage over our competitors, we feel that there's not a time for us to the discounting at a level which is not necessary. And so, therefore, we may even go slower on accepting orders that customers feel that they have a bargaining advantage in terms of being able to pressurize us in terms of pricing. But having said that, Our international travel, we believe, would start off again in the next 4 to 6 weeks. At the same time, our operations in Dubai and South Africa have started, and this will help cover not only the European and African markets, but also some parts of West Asia. The Thailand and Indonesian operations will be starting soon. And so, therefore, we will be able to have more focused efforts in front of our customers at that point. We have a strong inquiry pipeline like I had said, but specifically for the aftermarket, it is quite robust. And we believe that Q2 onwards, the order booking is expected to pick up for the full year, the company sees a strong order booking for the aftermarket business. There's also a strong pipeline between all the segments of the aftermarket, but today, there would be a greater focus on the refurbishment business. The the the one segment business, which will get impacted and may not be able to recover to the same level of its performance in previous years of of the previous year will be our service, which as we move into a more digitized form of offering service to our customers, it will definitely have a revenue impact because we may not be able to be in front of the customers as much as we may like. But from an overall year on year perspective, the business will perform well. The company's foray into the oil and gas market is also gaining momentum, and we are hopeful of getting some large orders in this segment in the coming quarters. And we'll be able to displace on good results for this current financial year. More than that, this places us very well for this market segment for next year going forward. Due to the COVID 19 in passing the domestic as well as global markets and economies based on the current situation, the company may witness a decline in revenue and order booking in H1, but it is expected to improve in 2 with the current orders in hand. And the company believes that it could limit its decline in revenue and profitability to the extent that we've already spoken about. While all the attempts are being made to minimize the impact in terms of revenue declines, our attempts form a cost cutting perspective and operational flexibility will will be also moving forward with a very sure footing. We believe that there is still some scope for us to be able to rationalize costs, and we think that From the longer term perspective, we will take very prudent decisions, and I hope to come back to you in the next couple of quarters with some concrete plans as to how we will be able to implement those. Therefore, with a with a healthy outstanding order book and with a good pipeline of inquiries, we are confident that the company will fare well in the coming quarters. Of course, we've been impacted quite severely with this COVID crisis and the lockdowns. And we had lost between 4 to 6 weeks of revenue, and this will directly impact the company for this current financial year, but it plays just quite well for the coming year and the coming years. The company has a good cash position of about $3,000,000,000 And this is driven by, an increased use of our or or the reduction in our inventory. But we've been able to actually release a lot of cash there. At the same time, our operational flexibility has also allowed us to get better cash from our customers in terms of receivables. But more importantly than anything else, that as we move into Q2 and Q3, we have the, of your opinion that we will move back into a negative working capital environment where the company has always a bit of a company had for the for the several years in the past. So with that, I'm happy to take some questions from the investors and from participants. Thank you very much. Participants are requested to use answered while asking a question. We take the first question from the line of Ravi Swaminathan from Spark Capital. Please go ahead. My first question is with yeah. My first question is with respect to the orange order that you had mentioned, that they can be a big How large can there be, per annum on a steady state basis? If you could quantify, it will be really helpful. Well, the market, in my estimation is, is, is, is a couple of $1,000,000,000 market for a product in any given year. The point is that the cause of the fact that these products are low in value from from the perspective of end buyer. They don't tend to qualify too many people, and they don't want to go through the process of of all the bureaucracy of having to qualify because safety and security of the product is paramount to them. So they don't mind not having the best cost. But given the change in environment that we have in terms of declining oil prices and the need for everyone to be more efficient in terms of debt supply chain procurement, we have actually had good success in getting into a lot of the qualification, that that our clients need. And at the same time, we are hopeful. And as as we currently stand, we are in the process of closing a couple of orders. So it all depends on size and scale of what the requirement may be. If it's a new refinery or a new complex, process requirements are large. If you do the question of upgrading or, replacement, the quarters are in terms of value are smaller. Got it, sir. But you told you had mentioned that it's a couple of $1,000,000,000, which is like 15,000 crores. Even 1, 2,000,000 market share can make a huge delta to your order flow. Do you expect a kind of magnitude of inflows in the 1st year itself? Let's wait and see about success get, we're we're hopeful that we think that we would be able this is a this is a new market segment for us, drive markets. And if I leave the drive when I when you look at the entire market, this has a potential to pretty much double the business that we are getting right now, but that's over the longer term. Got it. Got it. And, more slightly short term, I mean, the gross margins have expanded this quarter. Is it because of the mix after sales service, growing at a relatively higher base than the other segments because of which it is there, or is it you have you have to yeah. Well, you have two two reasons. One is that structurally, we have, reduced costs. This has been through the entire organization. So it starts from manufacturing expenses, which is driven by the mix of products that we are selling. In terms of, how standardized the MAT. So that is and that is and at the same time, administrative costs, as you would imagine, the compound considerably, both from a work from home was negative as well as the fact that international travel is not possible. At the same time, uh-uh, the mix of aftermarket with, with product has, of course, helped in terms of the, the, the, the EBITDA margin. But the decline, the lower revenue also was made down by general operating, the, administrative overhead. And so we believe that as turnover grows, there may not be a potential to expand EBITDA margins. I don't think I would like keep that as, as I say, get out from to investors here. But I think that to maintain margin to something that is definitely enough. Visibility. Got it, sir. And my last question is with respect to cash levels. I mean, we are sitting on a very comparable 300 crores of cash which is like 15% of market cap. You don't have big CapEx plans and you had also mentioned that working capital in fact, you might even go down So any plans to increase dividends or do buybacks? Well, at this point in time, the the the board hasn't taken any session on it. And as it when it does, we will come back to you. Of course, the but I think the imperative of the business right now is to ensure that we provide greater visibility to its shareholders from a revenue perspective. And I think that the ambition that we have in terms of the equity growth is something that, that really he would like the the cash surface to to to, to focus around. Ultimately, the company has derisked itself in in a variety of different ways. As you could from the fact that it was able to actually deliver this type of turnover in a quarter, which was significantly impacted both in terms of dispatch as well as outreach to customers, both in India and internationally, we think that we have the the Revitol, both from a management perspective as well as, as well as the different functions, to be able to, to add value from our revenue. Okay, sir. Thanks. Thank you. The next question is from the line of Hashitosh Karruk from Oshundal. Please go ahead. Hi. Can you hear me? Yes, I can. So I just wanted to understand, I mean, from a from a sectoral mix perspective, would you be able to, give some sense of your order book mix across the them? No. I I think, you know, we've stopped giving that because people are reading too much into it. But in general, it says, in terms of outlook as we look at it from a domestic market perspective, a certain sectors which are performing well, which we believe will continue to grow well such as, the process code generation, which is, in the food, distillery space. Pharmaceutical space. We think that, the waste heat recovery segment, which is in steel and cement, particularly a bit more time to pick up. In the international market, you're definitely, we are seeing a much greater traction in Europe. And we think that that could be a bigger market for us in the coming quarters. It's basically based on where where people have opened up and requirements in terms of the the the underlying businesses. I mean, the our largest market segment is the renewable segment. And so that will be our focus in terms of municipal solid waste consideration as well as other biomass based applications. Okay. Okay. And, on the, on the, on this team, do you think that there would be any kind of benefits coming through the manufacturer, like us? You see, I the PNI is, I think, for specific industries, we think under Asana, there will be other programs around it, such as there's increasing, well, we've been contacted several times in terms of standardizations and standards standard, sorry, not that. And so we believe that there's a need for us to, as as standards are adopted with these these certain non tariff barriers, which will come up in the Indian market which will, which will, as it is, we don't suffer from imports to such a large extent, but even to the limited extent of high 7% of of the market which goes to export may possibly come down. At the same time, we think there are certain implementation of certain policies which could end up benefiting the the company from the longer term such as the capital goods policy. And so we think that there's there's potential for us to make the most of a covered team in the programs as well. Okay. So if you can elaborate the point of digitization you mentioned earlier, So how exactly will that play a role in our, business? Will it cut costs? Or is it going to expand the, for decide on a demand side. Both. Both. Yeah. Both. Firstly, it opens up a new revenue stream, and that's what I'd like to focus on because very frankly, these are ways for us to reach customers when we couldn't reach them previously. This is a way for us to offer services to them both in terms of reliability as well as, productivity to them where we couldn't previously. So this is a new offering for us to be able to offer this to our to our customers, not only in terms of being able to remote monitor, but also to use data. I'm much more efficient for able to predict, where and how our customer may having problems. And so this dependability is a service and ultimately leads to a revenue increase in terms of newer product lines. This also benchmarks ourselves from the offerings with our competitors. And so, therefore, it it is it is a step up in terms of being able to get it to our customers more better. But the second part I did actually put it also is the fact is the reduction cost, and this happens through the entire value chain of the company. So when you start from Play Select Travel that comes down, you have increased digitization on the shop floor in terms of the 4.0. And so we'd have greater degree of automation and a greater degree of flexibility on the operating floor, which not only leads to, decline in manpower cost but or higher productivity, but, but also leads to higher efficiency and lower turnaround time and, less we have stage and variety of different factors. So so I think both all these factors add together to to make the company more agile firstly, but also increase revenue than lower cost. The next question is from the line of Harshad Patel from Equita Securities. Please go ahead. Sir, I had a couple of questions. The first one was on our Sorry to interrupt requesting you to please speak a bit louder, sir. Is it audible? Yes, sir. Yes. Yes, sir. I can hear you, sir. Sir, I had a couple of questions. The first was, one was on our value engineering effort. Sir, could you elaborate a bit more on that as to what exactly we are doing here and what would be its contribution in our over over operating margin improvement Because since last 3 to 4 quarters, we have, been witnessing a sustainable improvement in the operating margins from the kind of levels that we have achieved in FY 'nineteen. So from FY 'twenty onwards, there has been a pretty decent progress on that front. So if you could elaborate a bit more on that, it will be very helpful. Okay. There's a value engineering and a continuous exercise whereby we we aim to take cost out of our product, both through material cost reduction as well as through a manufacturing and supply, ticker, supply chain efficiency. So it's more complicated for your confidence simply laying it out. But principally for us, it drives around the fact that the steam turbine is a customized engineer to order product. To the extent that you can standardize modules and you are able to actually configure those in the manner they can be used across the variety of different platforms. We are able to then have value engineering for engineering side, but every system has its own different elements. I have a Executive Director with Arun Martin on the line as well. Arun, would you like to, speak in a little bit more about your value engineering Right? Yeah. Sure. Yeah. Sure, Nikkad. I will do that. This is a wrong meeting. When we talk of total cost to cost to the product, we have the material cost. We have the conversion cost, and then we have the indirect material cost. These 3. And the last one, of course, is the overhead. Now we are, as a wife, chairman has said, in the business of India to order product. So what happens is that there is a continuous learning of the product and which entails value engineering. What we mean by value engineering is that we ensure that the function of the product is not compromised but the material that goes into it is reduced on a continuously basis. About 1.5 to 2% of the material by value engineering and by supply chain initiatives. It's something that is considered to be good for our engineers. So why don't we do this value engineering? And it's a continuous you'll find it every time it is a new product, the cost will keep going down. The second is the conversion cost. Which, through direct operations and also subcontract, we'll continuously reduce it. There we get some percentage. Maybe half a percent or 1%. And then on the conversion cost on the other side, we have been going through a process of rationalization of manpower and other administrative expenses, which we have started, and that is yielding continuous results. As we wanted in FY 'twenty, that is last year and this year, you're rightly pointed out there has been a continuous improvement in the market So this is one of the processes. And the last one is, of course, on the other expenses of indirect materials. That we are going live. So it's a combination of all the effort that is giving us, this margins. We have also introduced new initiative of using an inventory, and that is also giving a result, which will continue to be there for about 1, 1 a half years next So these initiatives in total are giving the company, more margins on a product as well as on customer care. And we would like to emphasize that the current difficulties have shown how an agile organization like us has transformed and given results to the shareholders, in a much better manner. Thank you. Thank you, Arjun. I think essentially if you look at it from the reported results, you'll see that our material cost is somewhere in the region about 52% and that's come down from, I think, 58 to 50 6% levels in different quarters in the previous year. And I think that is something that what Arun was talking about in terms of efficiency of operations. And the other costs I think you would be able to work through? That was a very elaborate, but thank you for your response on that. So another continuation of my question would be that, you got earlier mentioned that you have started in house testing of turbine. So you will commission the text by in sometime in FY 2020. So, could you give us an idea as to what kind cost savings that I presented into. And earlier when we did not have that kind of test bed who used to test our turbines. Well, actually, there's 2 different things that were test that that we that we, that we've commissioned over the previous years. And I don't know what you're being assessed, but we we we installed and commissioned a a a dynamometer, which is actually essentially giving us greater, dependability on our research and development and new models of the updates that we would develop. And previously, we've researched houses would have this. And so the cost would be spent in terms of the higher expenditure on R and D there. But we decided to do this in house, not only does it being able to do it more, do it quicker, but also we felt that it is a good capability that we should build ourselves the cost to it itself isn't really very large. Another large equipment that we did commission in the last, I would say, couple of years was the vacuum tunnels. And this is a larger vacuum tunnel than one that we already had. This really did this augmented our capabilities to the extent that that we already had a, a vacuum tunnel, which allows for high speed balancing, and this, this increased capacity that really did help the capacity of our joint venture, which had larger turbines, but also the refurbishment market that we can cater to the bank of a much, much higher, than the gains that we currently cater to, which is 0 to 100. Sure. Understood. And just a last one, we're keeping question 1. So for the first quarter, could you quantify what was the share of sports in our overall aftermarket orders and the present order book. That will be all from my side. You know, I'm not certain if we get that information out there. And if you have that, you can give it. Otherwise, you can contact him afterwards. Rhiannon, are you there? Yeah. I'm I'm able to hear. You know, the the aftermarket VIX is, or after you said that, you know, the overall dispatches in the aftermarket area in the in the international segment is lower than what it was distributed. So it is in the range of around 8020, that is a kind of mix, for the affirmative perspective, both order booking as well as immigration. Okay. Sure, sir. Thank you. Thanks so much. Thank you. The next question is from the line of Costa from Direct Enterprise. Please go ahead. Yes, hello. So I had a few questions on this GPL JV. I mean, how much ever you could answer? I'm sorry I joined the call late all so, but just basically three questions. How much of your end profitability does this really contribute to right now? And What is, the main topic of, debate right now in this whole, in this whole issue, which is going on and what is our stance on it? What is the best possible outcome that we would like to achieve, from this legal cases is going on. And what should we base for in the worst case scenario? Okay. So so let me if if you've answered the question because as you do know, this matter is up to this right now, And so therefore, elaborating on this is is is, it's quite difficult for for us to do. But let me try and answer it in in in whatever manner I can From a perspective of, of the profitability of the joint venture, the expectations are, of course, for it to be a larger market, larger turnover, larger profits than the stand alone enterprise. As it currently stands in light of the last several years, as you can see, The joint venture really hasn't contributed more than, I would say, a maximum of 10% of of, profit to the to three meter banks. The matter is currently in front of NCLP from a perspective of of, this management of oppression. And I think the petition is in public, domain, so you can't get access to it. We believe as a company that, that very frankly, we have certain competency and capabilities in this field, our field is not litigation. Mean, sorry, we have competencies in the field of manufacturing and designing, seed provides, our field is really not litigation. And so, We hope that, you would be in a position to move on from this study quickly. Thank you. The next question is from the line of Anin Barmani from Unifi Capital. Please go ahead. Thank you for the opportunity. I have three questions. First of all, in this quarter, if you can us a sense of how much did we save on travel costs given that there was almost no travel? Oh, I don't think we give that break up. I I think you're asking for a bit too much of detail, but, as you could see from other expenses, I think we would possibly have a other expenses include a variety of different factors. One aspect which has been higher has been our selling costs which is, like I said, because we had higher, we had some, exceptional costs in terms of damage for, for what, but if you look at it, we would be quite substantially see maybe 3 to 4 crores of reduction, in the year on an annualized basis. This is 3 to 4 pro reduction for the overall other expenses or for the travel expenses? Travel. Okay. And No. No. No. I mean, annualized though. Annualized. Okay. Thanks. So for 1 quarter, we have yeah. And with regards to the oil and gas market, you mentioned the overall market size is $52,000,000,000 about 15,000 crore. As of today, the qualifications that we have from the key players what is the addressable market size for us out of this 15,000 as of today? We have president, assigned for 2000 and 9 for Saturday. I could answer that question. Hello? Hello? Oh, okay. I don't Can you answer that question for on the oil and gas market segment, please? Yeah. You see the I would like to give you a overall my chairman has indicated. So overall market is in a couple of. Now we will be catering to a particular segment. And, that particular segment would be up to maybe 3 to 5 megawatt range. And it would be in specific applications. So it will depend if the the the overall turnover and the addressable market will depend on which inquiries will be coming. So we won't be able to quantify this just like that. Today, Our concentration has been on the registration and more the registration we get, more the inquiries we get. And based on that, we would be doing it. It will not be correct to quantify the market and how we will be getting it because we are in the very initial phases. Just wanted to understand what is the current market set up like. I'm not asking what we are targeting or Well, of the 3 to 5 Megawatt Segment in the oil and gas, it's what is the size? Because oral drive turbine is 2,000,000,000, but 3 and 5 megawatt would be some percentage of it. So what percentage is it? Yeah. It it would be roughly about, I would say about 15 to 20%. Okay. Yes. For us in 1, how much of the revenues were due to orders which couldn't be shipped in Q4? I think we can take this offline with the mister. It was not more than about 20 to 30 girls. 15, 20 crore. 20 to 30 crores, but we also have we've also we've had sufficient Q1 to Q2 also anyway. So I think yes, you're right. So there was an impact of the of of of of that, which was primarily from the export side. Okay. And lastly, there is some chatter about change in possible change in MIES scheme. So currently, we do get benefit under MIS scheme. Right? And what's the percentage the, of the exports that come to us as MIEES incentive? We are 2%. I think the question that you asked earlier in terms of the PLI and and so, we did alluded to that in terms of, in terms of how the company is representing for government to ensure that, that, if any has converted into packing credit or other forms of export incentives, which are not under to your compliance. But secondly, there's also that's the clearly according to certain policies that have already been implemented could have a segment for steam turbines and specifically export of steam turbines. That is a continued, incentives to be provided. And this is provided under the Capital Group's policy. Which has been, tabled and has been accepted and passed by the legislature. Okay. So as of now, it seems the incentive would be modified, but broadly, it will be retained at the same level 2%. Well, I mean, there's there's there's only talk right now, primarily, on newspapers in terms of of policy and the highest completely and limiting it to 9000 crores from the 45 or 1000 crores that it's current outliers through a variety of different, PLI different schemes. How that is con implemented is, is is, I think, anyone's guess. I think from our perspective, very frankly, we focus more on being able to derive better profitability from our customers as it is the refund of money that we get from these teams is extremely slow and and extremely poor. So we just look at this as incidental Yes. It does help our profitability, but from a cash flow perspective, it's really quite delayed. So, we focus on our business currently. That's where we should derive more profitability from better market position, get better orders. I think all of these things that come along the way are always very helpful. And as long as we lose focus of them, it is really not a priority. Okay. And lastly, before COVID struck, we were, you know, anticipating that F521 could be the 1st year we get to, you know, deliver some orders for drive turbines in oil and gas. Is that, still a possibility for us, or is it get now does it get pushed to a 22 now? Yeah, I think you're right. It gets pushed to 22. So we we we we were hopeful of orders right now that we are at in a point of closing. And we hope that's why the next call that we have, we should have positive things to to to let you know about let's see how that develops. I think we're optimistic on that side. If you rightly point out that we'll be talking about it for a couple of quarters now. I'll come back in the queue This is a reminder to all participants connected We take the next question from the line of Manish Kohl from Enam Holding. Please go ahead. Yeah. Thank you so much. Just to clarify, on the revenue mix change, what we have seen with higher aftermarket. So within aftermarket also, is there been a beneficial revenue, mixed in terms of higher spares or more profitable revenues. We should have held the margin improvement? No. The the the blended margin of the aftermarket is consistent. But as you would imagine, the the customer facing elements of service is of course going to see a level of decline because customers also had that that open to, to let your service engineers come, without proper planning and process, etcetera. And we're also in the form of actually moving up digitize offering forward. So there'll be a speed of transition within servicing. But I think for the entire year as a whole, we look at margins to be consistent as previous years, order booking should be good going forward. The maybe slight decline in revenue and our contact segment would broadly be in line with the. Sure. And, also, if you can just provide some insight as to how is the refurbishment a market developing for us, especially last call, we were, like, a big update on the inquiry levels, Yeah. Yeah. Yeah. Oh, so I I have a president, aftermarket, Sachin, but I'm on the line also. Sachin, if you're very good, provide some visibility, too many Yes. This is. Good afternoon. So we we have had some very, good success in opening up some new markets for the refurbishment business. Right. And both on the western side of India and on the eastern side of India, Also, we have had a good endorsement to new, segments of the market. So overall, the trend is, is very positive and the inquiry levels have gone up for the liquidation business. Right. So so is it that the restrictions on the travel is kind of a bit entitlement for us to get the order into right now? An execution part as well for refurbishment. To some extent, yes. Actually, when you ask us, ask us to give an idea about the digital services as well as to specifically aftermarket side for it is there. Okay. Okay. So we are using we are using a lot of, digitization tools for addressing the needs of our customer. Yes, travel has impacted us and, we are seeing much more traction on the domestic market where travel is much more feasible. International markets, challenge of travel has has affected, but we're using digital tools to connect with the prospects and generate more and more inquiries. Okay. And one more question broadly on on the the order inquiry pipeline. Last time we mentioned that domestic market has somewhat header, market size of 1000 megawatts. And, yeah, so if you can give us a sense in terms of how how will this quantify the the audio and 20 pipeline? Both things I think I think I think for this current year, our belief is that domestic market will come down to about it, but, 2 thirds or less than that of the previous year in terms of total orders. So there's going to be a decline in the domestic market. I'm I'm happy to talk about product here, right, and not aftermarket. Yeah. Yeah. Yeah. I'm listening to so so, therefore, as we said in the previous call, also, we believe that the 1st 2 quarters will be driven by domestic market inquiries and are recorded, which were pent up and backlog, from the previous year. And Therefore, we believe that the international market should substantially add to our order booking in the latter half of the year, which is what we're seeing in terms of an interaction with clients. Okay. So, Nikhil, would it be possible to quantify, like, what's the international order book inquiry book Like, usually, you talk about in terms of megawatts. Right? It's in gigawatts. No. It's in gigawatts. It's it's it's it's large. Like I said, that in fact, as we are inquiring for this quarter internationally also has grown, but it's only grown by 1 or 2%. But that seems like that's just a segmentation of it. So that it just we need to to say that the the the market exists. The issue that we're facing right now is from what is from finalization. And I I had spoken about customers are also looking at this opportunity to say, well, listen, no one has ordered. So if you want an order, give me a, whatever, 2030 participants in the account. Well, that doesn't work for us. We don't we don't price discount. We don't work that way. Right? So there's no need for us to to buy orders. We are in a good position, and I think that to that extent will, will be proven. But are you seeing your competitions are coming to that in terms No. No. No. No. Okay. You you see, as it is, we have cost leadership in the space. Right. So so very frankly, if there's anyone who could do it, it'd be us. So you know, 1 or 2 orders here, and they obviously have to happen with that. Oh, sure. Not sure. But but in in general, I think everyone understands if you go down that route, it's a specific path. I'm sorry. Okay. Okay. Just last question, you submit from your commentary, it seems that even if we have a little lower revenues in the current entire year, we'll be able to maintain, our margins. Yeah. That's why I said you would look to see that. Exactly. Even though you'd have a a a low operating leverage, The the fact is because of our cost savings and sustainable cost savings on our side also again. We think that, we don't come out in a in a in a good manner, but our thanks, of course, to make sure that we we maximize revenue as much as possible because our order book is sufficient for a higher turnover than that that that that that So so the the note says that there has been some some manpower rationalization. So, so, like, can you quantify in terms of how much, people I have been laid off or what is the No. No. No. These are not. These are these are actually basically undergoing which is which is really to benchmark individuals on directly on, on the productivity. And so, that we have, some implications of which I'll come back to you on the next in the next couple of quarters. I'll give you more details. Because because, really, the question is that, and what Arun has also tried to point out, is that we're trying to make an organization which which is extremely flexible. Sure. And I think that demonstrated in this quarter in the way we operate, but we believe that we should be even more flexible. And so that's the way that we'd like to build us. And does this, like, the the the in terms of reduction cost, does it involve or probably, are you looking to accelerate your process of shifting the facility, for Expinia to the new facility, which has been a a state of art facility and has a lot of room to expand. I think you you you've you've, it's in the, I mean, the the basis of the productivity between the two factories is there. And and it's the learning between the two factories that we want to benchmark both of them at the same level. And so it is really taking it up to that level where can have a greater degree of automation and get a degree of visualization in the merit access process itself, and see how best we can actually come up with that. So so yeah. Yeah. And we'll come up with more details. So okay. Okay. Thank you. Thanks, wonderful. Thank you so much. Thank you. The next question is from the line of Niroshah from Prabhudhadi. Please go ahead. Yeah. Good afternoon, sir. It's Biral Shah. Uh-uh, sir, basically, our first of all, congratulations, and on our on our recent set of numbers given the pandemic and the situation for the first quarter. I just wanted to understand, since most of that that we answered, how how when do you see that that kind of this inquiry level getting converted into actual orders coming to back to pre COVID levels where where the trend was much more smoother. So do you expect that to happen in 2nd quarter or third quarter onwards, 1 and and and and how fast, whether it can be in domestic market faster or international market. So if you could throw some light onto that, that would be it. Okay. Prasad, are you on the line? Are you back? Yeah. Yes, sir. I'm back. Would you like to answer that? Yes, sir. I will take this question in 2 ways in domestic market. Yes, I think slowly, we are seeing some traction is happening, but as our white chairman mentioned that even the negotiation process is taking a longer time. We are making and watching the scenario. There is international markets. What we expect, probably once the international travel starts, so that which we are expecting maybe by endofthismonth or at least September. So since the inquiry pipeline is there, all technical alignment meetings are going on on virtual platform. What we feel that, probably Q3 uh-uh, attraction should be better on international. Okay. Fair enough, sir. I think I need to, in terms of our issues such as supply side and logistic issues, have have they have been resolved completely. Right? So or or are we still facing some? No. No. No. You're very right. So so so here, as we currently stand, issues fine. But if we look at it from a risk perspective, the greatest area of risk for us is our supply chain, vulnerability to COVID. And I mean, vulnerability, not from a cash flow perspective, because that is something that we can help with them on. Is really if if some of our small subcontractors get large cases of COVID and they shut down for a period of months, you know, these are things that that no one can help with, or certain cities locked down and and therefore supply chain gets interrupted. So that is the risk that we carry. And that will be there. We think till the end of the year. Logistics, I think, is fine now. That's not a problem. Okay. So that one will be helpful. Okay. Finally, we had talked about our digitization, and we obviously would have need, a huge amount of investment as well. So could you pull up some some kind of CapEx guidance for the year as a whole and what part will be the statistics? So we we we we we expend all of this out. So but so the thing is, uh-uh, but as a company which is prudent in terms of any capital expenditure and any expense, we actually try to minimize these fees, as much as possible. And And the bigger point is that we have to try to learn ourselves from what, our vendors are providing us. So we have to internalize the the the the processes that they're trying to implement. So from a digitization perspective, it's ongoing and it'll continue. Is something that we've been trying to do for the last 5 or 6 years in different forms of, of process, but I think it's just gonna get more accelerated now. And so from a from a P and L perspective, you're not gonna see anything marked from a from a cost side to spend more. Okay. In fact, you'll see some benefits only. The net the net the net will be better. Okay, Aruna. Thank you so much, sir, and I'll get back to you soon. Thank you very much. Thank you. The next question is from the line of Sandeep Shetty from Philip Capital. Please go ahead. Ana audible? Yes, sir. Yes, sir. You are. Thank you, sir, for the opportunity. So you mentioned about industry 4.0 and automation that is being currently implemented by. Just, sir, if you can't, agree on that because it's a our belief that usually automation and industry is more applicable to Automotive Industry And Industry that mass production is the scenario. But, Trevini being more of a custom made kind of a thing. If you can explain on that, that would be so. So if you start on the output of what do you expect out of industry 4.0 as you expect higher productivity, expect lower base rates, you expect higher quality etcetera. And so so all of it starts from a matter of process. Automation and industry footprint was slightly different, like a probiotic that you may have, within a company is is likely to state automation for us is a digital process of ensuring that these days seen this movement of of drawings and data between design to the machine. So there's no human interference at all. More than that is the fact of how machines are themselves operating and how they're programmed to be able to move between different jobs. And so there's a there's a huge degree of or automation there and learning there, machines are needed to be able to to reduce time, set up time, etcetera. You know, there's there's there's a different component set to how you create the manufacturing process Now, of course, this is more easily understood in our sector that is auto, and our learning also comes from the vendor who are providing this to the auto sector. But I think that he's enough learning for us also as a company where we can actually help, help with this. Okay. Does it answer your question for me? Or or yeah. Yeah. Yeah. Yeah. Got it. Got So my question was mainly because, I was trying to understand how it is impacting production. So I was on that trend. I was thinking on those. See, you see, the main thing is that you see, when you have a customized product, What happens is that every component of it is usually a large day. I'm gonna say it's customized. The biggest issue that you have is in terms of quality. Because you need the consistency on every product that is manufactured, but each of those is unique. So how can you get that done? Ability to have a dependability of quality is extremely important. Then of course, it has to be overlaid with cost. And once you get all those factors, you need the repeatability of Okay. Okay. Got it, sir. Thank you. Thank you so much, sir. That was very helpful. Thank you. Thank you. The next question is from the line of Ashutosh Karod from Oshundal. Please go ahead. I'm so sorry to interrupt, but your audio is not audible, sir. Hello? Yes. So, our, do we compete with the, of the Chinese supplier compete with us on international and domestic level. Sorry. So you couldn't get that. You're not audible at that. What what supplier? Hello? Yes. I'm thinking, do we compete with Chinese players on the for these products which we have? Largely, we don't because these are customized orders and the system by which large manufacturing infrastructure being built in China has been on a very standardized platform. So, actually, we don't see Chinese in the international market or the domestic market. We would not encounter Chinese competition more than, I would say, lesser 1% of the time. Great. Thank you. Thank you. Thank you. Thank you. The next question is from the line of Anand Barmani from Unifi. Please go ahead. Hello? Hi. Good afternoon. Yeah. So just, most often, medium to long term of a question. As a company, our skills lie in engineering, and while you are in one segment, Irvine, the leaders there, and we tried to get into the same a higher development for the the the the key venture. And for some reason, it's, can work out as a plan. So in terms of adding more revenue streams, what is the thought process at the board level if you can do a consent We have cash. We we keep hearing about companies wanting to transition out of China. Is there possibility that we are contemplating to, you know, help network of the leading global, you know, companies and our skill in managing a lean operation and our engineering skills plus their, local, demand. Can those be combined and can we enter a newer segment? If if if you can, you know, do your sums and, what's the process of it? You you you bring up a you bring up a very, very stream point. And this is part that I think individually we've all had. The board has had to say has not considered anything along those lines, and there's nothing in front of the board that might matter. But very likely, you do bring up a point that there is hunger with management to drive further revenue. But I think one of the things that we, have built with a lot of dedication is our balance sheet and the ability to be able to have a high return on capital, a high return on equity business at the same time. Have the productivity of a good asset turnover, etcetera. So very frankly, as long as we can keep all those factors in mind, we're quite open to see how best we could actually approach future businesses, but really technology needs to be at the heart of the Google work exercise over a long period of time. Is that, is that self development of technology is extremely important. Okay. That partly answers the question that most of the administrative and has been discussed at the board or registered certain proposals, anything I mean, I've got the understand the principle, but if you can get into submitting the details of what all ideas maybe you already rejected, that is also give us a sense of what your No. Right now, there has been no plans at all on spending any money from a from a a gas reserves. The company continuously evaluates and is in dialogue with different companies in certain sectors based in terms of newer age different types and non, lithium ion based batteries. We think that's a good area to look at from a research perspective as well a deployment perspective, especially for utility grade applications. We think that there is potential there. We've already talked about development that we're doing both in the business as well as with, active any partners for super critical carbon dioxide market. And it's certainly not the development that we're looking at both with partners as well as, independently on that front. So we think that there's good scope. We couldn't accelerate from those developments further. There'll be some money spent to do it. It's something that the company can well afford. So we hope to have commercialization of some of these operations at least to quote in the following. Thank you. Well, ladies and gentlemen, that the last question for today. I would now like to hand the conference back to the management for their closing comments. Thank you very much for joining this call ladies and gentlemen. I trust all of you will be well between now and our next call. I think the company has, displayed some good performance in this quarter given the Chinese circumstance, and we look forward to taking forward this discussion in our next call. Thank you very much. Goodbye. Thank you. On behalf of Giovanni Turbine Limited, we conclude today's conference. Thank you all for joining. You may now disconnect your lines