Ladies and gentlemen, good day, and welcome to Q3 FY26 Action Construction Equipment Limited conference call, hosted by Emkay Global Financial Services. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I will now hand the conference over to Mr. Abhishek Taparia from Emkay Global Financial Services Limited. Thank you, and over to you, sir.
Good afternoon, everyone. I would like to welcome the management and thank them for this opportunity. We have with us today Mr. Sorab Agarwal, Executive Director, Mr. Rajan Luthra, Chief Financial Officer, and Mr. Vyom Agarwal, President. I shall now hand over the call to the management for their opening remarks. Over to you, gentlemen.
Yes, good afternoon, and welcome to this earnings conference call for discussing the results for the quarter and nine months ended 31st of December 2025. We take this opportunity to wish all of you a wonderful new year with good health and happiness. Along with me in today's earnings con call, we have our CFO, Mr. Rajan Luthra, and our President, Mr. Vyom Agarwal. I hope that all of you have had an opportunity to look at the company's financial statements and the earnings presentation, which have been circulated and uploaded at the stock exchanges. Innovation, value, and trust are the pillars on which ACE has built its market leadership. As a reflection of our engineering capability and our deep understanding of India's project site requirements, the company has recently unveiled an extensive suite of new generation technology-powered equipment.
The new portfolio includes intelligent tower cranes, passenger lifts, AI-assisted pick-and-carry cranes, advanced aerial work platforms, high-performance telehandlers, and a range of advanced material handling systems and robust construction equipment, reflecting ACE's sustained focus on new-age technology, driving performance, reliability, and safety across India's infrastructure and industrial sectors. These machines offer higher productivity, enhanced safety, and more intuitive operation, which, while ensuring reduced total cost of ownership for our customers. As India's infrastructure momentum accelerates, ACE remains committed to delivering world-class solutions that strengthen our nation's growth story. Now, to brief you on the financial performance for the third quarter of FY26. On a standalone basis, the total income was flattish on a year-on-year basis at INR 888 crores approximately, with an EBITDA margin of 18.5%.
The EBITDA of company grew by 2.48% to INR 164 crores, as against INR 160 crores in the corresponding quarter last year. The EBITDA margin expanded 74 basis points to 18.5%. The PBT grew by 4.28% to INR 151 crores, against INR 144 crores and stood at 17%. The PAT grew by 8.15% to INR 115.88 crores, against INR 107 crores, and stood at 13.04%. The PBT and PAT margins expanded by 96 basis points and 117 basis points, respectively, on year-on-year basis. For the nine months ended FY 2026, total income declined by 2 point.
3.21% year-on-year, reflecting the subdued performance in H1, and stood at around INR 2,373 crore. Despite this, EBITDA grew by 7.15% to INR 458 crore, with EBITDA margin expanding by 186 basis points to 19.32%. Profit before tax increased by 8.54% to INR 415 crore, with PBT margins improving from one, improving by 190 basis points to 17.5%. Profit after tax stood at around INR 316 crore, registering a year-on-year growth of 11%, while PAT margins expanded by 171 basis points to 13.34%. From a sequential perspective, in quarter 3 FY26, operational revenues grew 15% quarter-on-quarter.
Operating EBITDA increased 16.28% to INR 128 crore, while PBT and PAT rose by 9.9% and 11.5% quarter-on-quarter, respectively. Margins reflect a INR 5.5 crores provision towards additional gratuity and leave encashment arising from implementation of new labor codes. Excluding this, margin profile would have been even higher. The contribution of cranes, material handling, and construction equipment segment stood at 90% of our total revenue, and we reiterated our market dominant position while registering revenue of INR 763 crore, which has grown by 10% as compared to quarter 2 FY26. The company recorded sales of 2,710 units in the quarter. The margins expanded to 20% and stood at INR 152.82 crore.
The revenue contribution of every segment stood at about 10%, and we registered revenue of INR 89.44 crores. Our quarter three performance, along with the sequential improvement in demand as the year progressed, has reinforced our assessment that the initial softness following the transition from BS3 and BS4 to CEV5 was temporary. Demand stabilized in quarter two and returned to normalcy in quarter three. Quarter three sales have been particularly encouraging, especially when viewed against the higher base of quarter three of last year.which had benefited from pre-buying of equipment. Looking ahead, we expect timely project awards, improved on-ground execution, supportive policy measures, and higher government spending to create a favorable operating environment for the company in the coming quarters. The India-EU FTA and the proposed US deal at the rate of 18% tariffs are structural positive for Indian manufacturing, boosting both competitiveness and sentiment.
India is now better placed than key competing markets, especially China, and these developments are likely to reignite the China Plus One strategy, driving manufacturing growth, which augurs well for us. Further, the Honorable Finance Minister Union Budget 2026 reinforces a growth-oriented and physically disciplined roadmap for India's development, with a continued thrust on capital expenditure. The Government of India has sustained its infra focus, with CapEx spending growing at a CAGR of 19.4% over FY22- FY27 budget estimates. The government has budgeted the CapEx spending at 11.5% year-on-year in FY27 budget estimate to INR 1,221,000 crore. The CapEx spend to GDP is healthy at 3.1%.
Productive CapEx to create infra assets is crucial for amplifying productivity, which will further fuel economic growth, enhance global competitiveness, and accelerate technological innovation in the country. The budget prioritizes infrastructure and manufacturing through measures such as the enhancement of Construction and Infrastructure Equipment scheme to promote domestic manufacturing of high-value and technologically advanced equipment. The proposed Infrastructure Risk Guarantee Fund and the development of dedicated freight corridors, 20 new national waterways, and 7 high-speed rail corridors as growth connectors. An outlay of INR 5,000 crores per city economic region over 5 years has been proposed to support infrastructure development in Tier 2 and Tier 3 cities through a reform and result-linked financing framework, alongside incentives for municipal bond issuance and continued support under the AMRUT scheme. These initiatives are expected to accelerate project execution, strengthen logistics, and drive sustained demand for the company.
With our enhanced capacities and execution re-readiness, the company remains well positioned to capitalize on these opportunities, and we are optimistic about our medium to long-term growth prospects. Also, we expect our top line to remain flattish during the current year, with improved margin profile as compared to the last year. With this, I would like to open the call for question and answer session. Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask question may press star and one on the touchtone telephone. If you wish to remove yourself from question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from the line of Garvit Goyal from Serene Alpha. Please go ahead.
Hi, am I audible?
Yes, you are audible.
Good evening, sir. My question is more on the industry side. What are you seeing in terms of the competition from the Chinese players? Are you seeing any kind of increase in their intensity in terms of more import from China in the crane category?
We are specifically talking about the crane category?
Yes, sir, and more of the construction equipment as well, both.
Okay. See, Chinese players are reasonably aggressive. There is no denying the fact. And before going on to cranes, let me just brief you a little on the excavator market. Although we are not present there, I'm talking of the track excavators. So in the last five years, they've taken up 20%-25% market in India on account of their predatory pricing and the credit terms and all they offer. So yes, they are reasonably aggressive in terms of their pricing and their positioning strategy with respect to credit, and often they keep it so attractive and lucrative that customers get attracted.
Coming on to the cranes, see, obviously, the pick and carry cranes and, less than 30-35 ton capacity, India is self-sufficient and, you know, we produce more or less all the cranes in India, and we are the market leaders there. And we face no problem from any Chinese company or any competition. But yes, with respect to the bigger cranes, the truck cranes and the crawler cranes, yes, Chinese have been very aggressive in the last, I would say, 5, 7, 8 years. And with their pricing, again, predatory pricing and credit terms.
So when the Indian infrastructure was growing, Indian manufacturing, or let's say, the infrastructure construction market was growing, so the crawler crane and the truck crane market manufactured in India remained subdued only on account of that the Chinese players was dumping at low prices at very aggressive credit terms. Not out of place to mention that 4-5 of the companies which were in the larger crane segments also shut shop in the last 4-5 years. Whether it was Tata Hitachi, they stopped making crawler cranes in the last 5-10 years. TIL was in some sort of financial problem. Tadano, in a joint venture in India, did not start to produce even though they developed the cranes in India. Kobelco stopped making the bigger cranes. The only one, the pricing problem from the Chinese, and there's another one, ABG Cranes.
So looking at all this, and because we were also in these bigger crane segment or heavy crane segment, we had applied for, file for, you know, protection or what you can say, study in, Ministry of Commerce. And for proper DGTR, Directorate General of Trade Remedies, proper assessment happened, and it was a, you know, a public, trial, you can say, and it lasted nearly one and a half years. And finally, duty was recommended on the Chinese cranes in the month of September. But unfortunately, for some good bad reason, it has not been notified by the Finance Ministry. And obviously, Finance Ministry was totally busy with their budget in the last, one and a half months.
So we have been trying to seek time from them as to the reason why it has not happened, or, you know, if any additional information or anything is required. Although there is a very clear order from Ministry of Commerce, DGTR, specifying the entire proceeding, which is public knowledge, it can be seen anywhere. So, that is the situation, what it is today, that, the anti-dumping duties, which was, the DGTR findings and, ruling is there, but they have not been notified by the government, which should have happened in December.
Okay, sir. And considering your opening remarks, it seems like industry environment is improving, right?
Yes.
And so, considering both the, both the cases, like, at this place, industry environment is improving, and on the other side, the Chinese competition is rising. So how do you see the growth outlook, maybe in FY27 and FY28? Because we are having the capacity with us, right? So what do you think about the growth outlook?
You know, I've understood your question. You are mixing two things. With respect to our core business of mobile cranes, of construction equipment that we manufacture in India, we have hardly any competition from Chinese.
Right.
With respect to a particular segment of that business, which is heavy cranes, cranes bigger than 30, 40 tons, there is competition. As it is, we are small in that segment because the Chinese have captured it over the last so many years. We were trying to increase the manufacturing capacity, capability of our company and our country, you know, by getting that order. So we really do not face any problem or competition from China or Chinese aggression with respect to our core business. So there is no problem there. Everything is fine. We are expecting growth there. Yes, last one and a half years was slow, especially after the, you know, the election results, were a little, not as per expectations. Luckily, we were safe because of pre-buying happening of BS3 last year. I'm talking of last financial year.
This year was slow because a lot of pre-buying had happened, some extended monsoon, overall geopolitical, plus, plus, plus, plus, Mr. Trump and tariff sentiment. We were expecting some telehandler execution to happen from the government order. It got delayed, reasons beyond our control. So obviously, the market last 8, 9 months, 10 months, we were able to not really increase our revenue, but now things seem to be on track. The sentiment is very much there, and we are market leaders in our core segments. We do not face any threat, any competition from the Chinese manufacturers with respect to our core business, and we expect that we should be in positive territory year-over-year in this quarter and, going forward in the next year.
Okay, and with respect to the ramp up, like, I just want to understand right now what is our peak revenue capacity that we have, and how fast can do you think we can reach close to that number?
See, our current capacity is upwards of INR 5,000 crore. I think, a little tweak here and there, it can go up to INR 5,500 crores-INR 6,000 crores. And we are at a revenue level of close to around, INR 3,300 crores , INR 3,400 crores as of now. So, what we feel and what we have thought and planned that by FY 2029 or latest by FY 2030, we should be somewhere between INR 6,000 crores-INR 7,000 crores. And like I said, we already have a capacity of close to INR 5,500 crores. We are doing close to about ±INR 3,400 crores . So yes, we have capacity available for the next one or two years of growth, maybe more. And, as and when, we see the opportunity that, or, or the need to increase capacity, we will immediately work on it.
We have got ample land available. In the last year, in the current year, we bought land. In the last year, we bought land. So now we have enough land, whether in Indore, whether in Faridabad, for our future expansion. And, and hopefully, we can do it very quickly as and when required. But yes, I do not see any foreseeable expansion in the next one year, apart from a lot of modernization and automation, which we are focusing on. And yes, in saying this, I would just like to say that with respect to tower cranes, we have envisaged increase in capacity. So, you know, maybe in the next year, we will try and start to expand that, expand our capacity by setting up a new plant for tower cranes.
But that will be totally based on the momentum we see in the market, and then we'll accordingly start to increase our capacity.
That's good. And sir, you know, maybe you want to-
Hello, Mr. Garvit, I just-
Okay, okay. Have a good one. Thank you.
Thank you. Ladies and gentlemen, in order to ensure that management is able to address questions from all the participants in the conference, please limit the question to three, three questions per participant. To your follow-up question, we request you to rejoin the queue. The next question is from the line of Kaushik Poddar from KB Capital Markets Private Limited. Please go ahead.
. Yeah. Can you expand a bit on your defense as well as, export capability or what you have in mind on both these, sphere?
Yeah, see, both of them combined together, we feel that we can easily do 15% type of revenue. You know, defense as well as export business put together, maybe a 10% contribution coming from exports on an increased base as well, and 4%-5% coming from defense. In the last year, we did close to 2% in defense, and in the current year, again, we would be somewhere around 2% on the defense business. But in saying this, I would just like to say that currently we have orders of approximately INR 500 crores in hand, which have to be executed. And because of certain procedural delays, they did not go into execution, and will start to go into execution now, very soon.
So what I can very say that for the next year, we already have around INR 500 crores of orders. So if you put it in percentage of next year's growth, I mean, our defense revenue can go up to 8%-10% in the next year, but it will not happen because obviously it will be phased out or, you know, with respect to delivery. So we expect that next year we can go up to 4%-5% contribution from defense, at least about 4%.
Mm.
Going to exports, last year, we did 4% contribution from exports. This year, we are looking at somewhere around 6%-7%, more towards 7%.
Okay.
So in the current year, 7% exports and 2% defense will make it about 9% contribution to our business.
Your objective is to get it at around-
Yeah, currently 9%. So next year we can be pretty confident it will be somewhere upwards of 10%.
Okay.
Our plan was 10%-15%. So the first benchmark, hopefully we should be, you know, reaching in FY 2027.
In this budget, there was some this thing, incentive or something to be given for your construction equipment and all those things. Can you expand on that?
Yes. The finance minister did mention upon a CIE scheme, that is Construction and Infrastructure Equipment scheme. To the best of our knowledge, because we have attended certain meetings in Ministry of Heavy Industries with respect to this, and to the best of our knowledge, so this is a PLI scheme, which, wherein, for the first time, you know, focus is being given to construction and infrastructure equipment in India.
Mm.
Especially to those equipment where our country relies mainly on imports of equipment.
Mm.
-or where, you know, the percentage of the demand fulfillment in India is more from imports, even though it is made in India.
Mm.
But let's say, still the good quantities are being imported. So that's the focus.
Mm.
So, you know, to indigenize or to do that in India, whatever is getting imported into the country, and obviously most of it is from our neighboring country only.
Mm
. because of their price and policy. So herein, this will be a proper PLI scheme with, with, you know, some incentives based on, attaining, revenue turnovers. And, FY25 revenues and investments would become the benchmark. FY25 revenues will form a part of the, you know, the added, investments that, that, would be required in this scheme. Sorry, FY25 investments would be, you know, considered.
Okay.
While, you know, becoming eligible for this scheme. So hopefully it should be out in the next two, three, four months, but maybe it can be a face saver in the absence of the anti-dumping duty order, which we were expecting.
Okay. This thing, new scheme that is to come after, say, in 3-4 months or something, will this be for newer products or for your existing products?
This is mainly for categories where our country is importing more than manufacturing in India, or totally based on, you know, where products are totally being imported. So if, if you look at it like that-
Mm
Crawler cranes and truck cranes will get included in this.
Basically, import substitution based on import substitution.
Yes. So the heavier cranes, where we were expecting anti-dumping duty, in all probability should get included in this, apart from categories like piling rigs, reach stackers, aerial work platforms, which are hardly being manufactured in our country. Plus, a lot of other machinery, road machinery, construction equipment, smaller and bigger dumpers, smaller excavators, really big mining excavators. So, you know, tunnel boring machines, ropeways, a lot of other things which the country is really not producing in fact.
Yeah, tunnel boring is specifically mentioned in the budget. That's what I see.
Yes. Tunnel boring is how the entire process started, because China stopped our machine.
Ah! Okay, okay, okay. Now, these things you are capable of manufacturing, or you require some kind of expertise for, for manufacturing such things?
A couple of, let's say, truck crane crawler cranes, we are already there, and a couple of other machinery categories-
Uh.
which are coming under this scheme. We were, as it is, envisaging, and we have the capability to design and to manufacture that in India.
Okay, okay. Thank you. Thank you. I'll come back if required. Thank you.
Okay.
Thank you. The next question is from the line of Rochan Charan from Global Consilient Research. Please go ahead.
Sir, am I audible?
Yes, yes, please.
Sir, my question is, with regards to your margins, sir, on product-wise. So construction equipment on a quarterly basis has seen a lower growth as compared to the agricultural equipment, right? So I just wanted to know, out of these two, which one has a higher margin, sir?
. The construction equipment is definitely has a margin. Agree, we are struggling, as a matter of fact, especially in the last quarter. So construction equipment business-
Sir, do you expect any, increase, like, further growth, like how much has been happened in this quarter, in the agricultural equipment to continue, sir?
First, we are focused on construction equipment or agri?
Agricultural, sir.
I'll talk of both. I'll talk of both.
Okay.
See, construction equipment, we, this quarter, we are already at close to about 20% EBIT level.
Okay.
Which I think is one of the best in the country and maybe in the world as well.
Right.
So I think we are touching our peaks, and obviously with numbers of our construction equipment and certain other type of equipment, increasing going forward in the next 1 or 2 or 3 years, more operating leverage will kick in, and we will have the flexibility to either further increase these margins-
Mm-hmm.
or pass on these benefits to the customer. That we'll decide in due course of time, because I think at 18%-20%, construction equipment business is at a right level of profitability.
Understood, sir.
Going to the agri equipment, yes, we were close to about 4%-4.5% here and there, generally at EBIT level.
Mm-hmm.
But due to certain provisioning and whatever, which Mr. Luthra can explain, our profitability has gone down to about a percentage there in this last quarter, which I'm sure will bounce back. So yes, from there, from our 4-5%, our endeavor and target is that that needs to go to at least 12%-15% level, so that-
Mm.
It comes to some sort of, you know, a sensible margin profile over the years to come, and we are definitely working towards it.
Right, sir. Sir, I understood the, on a volume-
Can I just request you to rejoin the queue for the follow-up question, please?
Okay, ma'am.
Yeah. Thank you. The next question is from the line of Vijay Pandey from Nuvama. Please go ahead.
Hi, sir. Thank you for taking my question. And, sir, I have a couple of questions. First is, in terms of the guidance. So our guidance is, slight growth or is it, flat growth for fiscal 26 for full year? And does it include volume, or is it on value terms? That will be my first question.
Yeah, I'll answer that quickly. Current year, I think will be flat. Flat to positive, but, yes, flat. That is what I can tell you, and it is in value terms. In number terms, definitely there's some decline, but I'm sure we'll more than make up for it in the next year.
Okay. Secondly, sir, in terms of the scheme, the PLI scheme, so, what is our expectation on which of the products will it come and where we have the capability to supply it, like? And-
In the PLI scheme,
Yes.
We would be focused on crawler cranes and truck cranes for sure, and maybe some bigger rough terrain cranes. Apart from container reach stackers and piling rigs, and maybe some aerial platforms, because recently we had started to do some aerial platforms. Till date, we have not done any piling rigs or any reach stackers, but yes, we want to enter that line. We have not manufactured any piling rigs in India, we only do trading. Truck cranes and crawler cranes, we've already been doing. So I believe these four, five products is what we will be focusing on if the PLI scheme comes, and obviously, if we are eligible for that, whatever the conditions the Government of India will lay down for that, yes.
Okay. Okay. Okay, sir. No, that's it from my side. Thank you.
Thank you.
Thank you. The next question is from the line of Aditya from Old Bridge Capital Management. Please go ahead.
Yeah, hello. Thank you for the opportunity. Sir, my first question is on the volumes part. So we saw in the construction and crane segment, volume dropped by 23%. But, is that the case, similar kind of degrowth we have seen in tower cranes?
Not really. I think Tower Cranes has reasonably held up. Yes-
Okay.
For a couple of months in between there, we saw a 10%-15% dip on a year-on-year basis on a monthly level. But I would say that tower cranes has more or less held up with respect to its numbers. And it was more to do with mobile cranes, and especially because of a lot of in quarter three, quarter four last year, there was a lot of pre-buying. So that was the main reason which contributed to this issue.
If I may ask, what would be the volumes you would have done in Tower Cranes this year as compared to last year?
In the first nine months, we have already done close to about 500 machines, a little here and there.
Mm.
Last year, we did a little upwards of or close to 650 cranes, tower cranes. This year we've only done 500 cranes, and by the end of the year, we should be somewhere close to, you know, 680-700 cranes.
Okay.
That is an 8.9% increase over last year.
Okay. Okay, okay. And-
If you look at the smaller, the self-erecting tower cranes, there again, we did 161 units last year. We've already done-
Mm
. 113 in this year. So, here again, we would be, let's say, 4-5% more than last year.
All right.
So tower cranes, about 800 last year. This year it will be close, closer to 900.
Sir, what would be our capacity here in tower cranes?
See, in the fixed tower cranes, our capacity is 800-900 units. And once we do 700 cranes this year, so we will be touching close to about 80% capacity. And that is also one of the main reasons which I mentioned that in the next year, we will try and expand our capacity for tower cranes.
Okay.
Because our current capacity is 800-900. We are doing a small rejig, so that our capacity comes closer to maybe 1,100 units, which can suffice for next year requirement. And that is also one of the main reasons that we might invest such. We already planned for, you know, expanding our capacity in tower cranes in the next year, setting up a new facility.
Okay, okay. Sir, my second question is on the realizations part. In the agricultural equipment, we have seen significant jump in realization, both YOY and QOQ. So we are reaching almost INR 990,000 per unit in agriculture. So what's driving this?
Sir, I will take the question.
Yep.
This is mainly because of the over increase here in the harvesters. Harvesters, now we have become number two in the country, and average selling price of a harvester is somewhere about INR 20 lakh, 21 to 22 lakh. We had a very significant growth in the harvester this current year. This has led to the increase in average realization per in the agri department.
Sir, in the agricultural volumes of 900, how much would we have sold harvesters?
Harvesters, we have done about 410, or around 410.
So, Luthra, sir, this is for the quarter?
For nine, for nine months, sir.
For nine months, then, so what is total agri for nine months?
Yeah.
Total agri.
Total agri and tractors we have done slightly.
1600, I think.
Sixteen hundred.
So 1,600-
424. Tractors are 424.
We have done 2,000 units, I think, in agricultural equipment in nine months. Out of that, we are saying 400 units are harvesters, right?
Yes.
Yeah.
Around 1,600 units of tractors are there.
Just to understand the harvester market a bit better, so if you say we are the second largest player, how big would that market be, and what is our market share then?
Our market share, the biggest, is the Claas which has now been sold to Yanmar, and the market will be somewhere about, our market share will be around 30%.
30%. Okay, okay. Okay.
And-
Just one last question. Yes, please.
I'd just like to add one more thing. Here, when we are talking about harvesters, we are only talking about Track Harvesters. We are not talking about the Wheel Harvester, which, is, you know, manufactured in, Punjab. So we are talking about a very niche segment of Track Harvesters.
Okay. Okay.
The market I told you, only Track Harvesters. Yeah.
One last question is on my gross margins. We have been posting really healthy gross margins of 32%-34% range, probably more on 33% from the last five quarters to say. Earlier, we used to do anywhere around 29%-30%. The jump of the delta that we have got of 2%-3%, what would be the major reason driving it consistently, and how sustainable is it going forward?
Yeah, I think it is a combination of four, five things. So obviously, gross margin is a combination of sales price, your material cost, and, obviously, the manufacturing expenses. And, so with our cost efficiencies, which we are building in, and automation and productivity improvement, and our continuous focus on, you know, maintaining, ensuring, and increasing our sales price, and our input cost in terms of raw material. So it is a combination of that. So on all fronts, we have been gaining something, and that is what, we have been. You know, it's reflecting in our gross margin. And I think going forward, should be sustainable because it is reasonable amount of pricing power, and the market today understands that, yes, if the commodities go up here and now, especially steel.
So, you know, and which we have demonstrated in the last 7, 8 years, that as and when there is a, you know, a drastic increase in any input cost, it can be passed on to the market with a lag of 3-4 months. So I think, gross margin profile should be sustainable, and, going forward with operating leverage playing in because we already have capacities up to INR 5,500 crore, which I mentioned. So further, we're increasing operating leverage going forward in FY27 and FY28. We will get an opportunity to further increase it, I believe, but that would not be our endeavor. Our endeavor would be that we get a better contribution from our agri business and improve it in the other way, not by increasing it further in the construction equipment or crane segment.
Sir, just I want to add the market, because of the product mix also.
Yes, I forgot that.
Because the market-
Yes, combination of a lot of things.
The market is moving toward telematics and what we have done, which nobody has done. So that is also getting good marks.
Yeah. And, there's something more I would just like to add, that with the BS5, CEV-V, and, very recently, in the last 2-3 months again, we have, in our cranes, introduced certain added features, AI-based features, safety and, other features or different types of platforms, like, clutchless transmission, which is a first in the country for pick-and-carry cranes, or a single chassis crane where safety is enhanced. Plus, we have really focused on operator comfort. And we are one of the first companies in India, rather, I would say one of the first in India and maybe in the world, with our ACE Live app and telematics. It's not that we get some information on the machine, on the customer, or our dashboards or different devices.
We can talk with the machine and pass on some instructions and some controls and parameters from our cell phones or tablets or laptops onto the machine, and and some extended safety features which we have added. So we believe and obviously, the market is willing to pay a price for all these advanced features. And we believe that not only a better price, which is definitely one of the agendas of every company to maintain and sustain profitability, but these value-added features which we are giving, whether on safety or whether on, you know, innovation or whether on the controls of the machine, in the next 6 months to 1 year or 1.5 years, are going to be very instrumental in determining our future growth within the crane segment and other products in the country.
We are very hopeful that whatever we have done is more or less the first time it has been done in the world on pick and carry cranes, and it is going to reap good, results going forward. Already, we are seeing a change in product mix happening in the last six months, one year. This will, I think, work really to the benefit of the company in times to come, in the next one year itself.
Okay. Okay. Thank you so much.
We are able to distinguish ourselves from any other manufacturers, you know, with respect to the offerings that we have. And today, our new generation cranes, we can very proudly say, have become fail-safe cranes. So basically, unless and until you actually want to turn off some system and, you know, have some accident with the crane, you cannot do it. You'll be protected from doing it. And the operator skill level or let's say, the safety consciousness of the operator, that report can be generated by, you know, the machine learning that is going in through the data capture, which is happening.
Okay. Okay. Okay. Understood, sir. Understood. Thank you so much. Thank you so much for the comprehensive answer.
Thank you. The next question is from the line of Pankaj Tibrewal from Ikigai Asset Managers. Please go ahead.
Yeah, good evening, and thank you for the opportunity.
Good evening, Pankaj.
Yeah. Sir, when you talked about the longer term vision of 2029 and 2030, and you talked about INR 6,500 crores-INR 7,000 crores in your thought process, how does the things add up? Because we believe that there's a large opportunity on the earthmoving equipment side, backhoe especially, where JCB is a very large player, which is today, it's market share-wise.
Mm-hmm.
When you look at the overall next three years, how does the things add up from different pieces and export also? If you can dwell on a little bit of a more detail, it will be helpful.
See, we have been fluctuating between 8,000-10,000 cranes. I would say 7,000-10,000 cranes in the last 2, 3 years.
Yes. Yes.
Actually, going a little down in the last 1 or 2 years. I feel that, you know, if you put all the pieces together, how we will reach that revenue. So over the next 3 or 4 years, this about 9,000-10,000 cranes will definitely go to 14,000-15,000 cranes for us.
Okay.
Not only organically, but also, you know, with respect to some market share, incremental market share, which we will get because of a lot of good work, hard work, and, you know, better features which we have introduced in the market in the last six months, one year, which we are very sure of, and we are seeing a traction already.
Mm.
With respect to our construction equipment, which has backhoe and some road machinery.
Mm.
We feel from the current numbers that will easily double up from here, or maybe more than that.
Okay.
Tower Cranes, we again feel, will more than double up from here.
Okay.
Our material handling will more than double up from here.
Mm.
Exports and defense. Defense, we are seeing doubling up 100% in the next year on an increased rate.
Okay. Yeah.
Exports is increasing steadily. Apart from that, there are some inorganic opportunities which are there with us, which we are pursuing. If everything goes well, you know, obviously, in due course, it will become public knowledge. All of that put together, I think reaching an INR 6,000 crores-INR 7,000 crores type of scenario over the next 3-4 years should not be difficult unless and until something major was to happen in the world economy or Indian economy.
Sure. Sure. That's, that's helpful. And this all growth will be funded internally, right? There's no need for an external capital, either a debt or an equity raise to be happening, right?
We are a debt-free company.
Yeah.
And last year, we were able to, you know, bring ourselves to a zero working capital scenario in our final balance sheet, also in the middle of the year. So we're very hopeful by the end of this year, again, we'll be able to bring ourselves to zero working capital. Plus, we don't have any debt, plus we have, I think, close to Luthra, you can correct me if I'm wrong, about INR 1,200 croress on our books available to be deployed anywhere.
Right.
So in doing all of this, and we already have a, like I said, a capacity to go to INR 5,700 crore, and we will be close to INR 24,000 crore, INR 25,000 crore, INR 30,000 crores right now.
Mm.
So, and obviously, once we are increasing our revenue, more profits will flow in. So I don't think we should need any type of debt or any type of thing to, you know, double ourselves or even more than that, including some acquisitions.
Fantastic. Last but not you know, the final question, any color on the ground level reality? Because you are the, as an industry, you are the first company to feel the slowdown or the excitement. So-
Things are definitely improving. There's been a lot of traction December onwards. It took us by surprise, and I think now, especially with the, you know, the European FTA deal, just the sentiment, see, Vyom, how much it will take shape, when it will take shape, but sentiment matters more than anything else.
Mm-hmm. Mm-hmm.
So there was already positivity in the air and in the business on ground in December. It continued into January, then the E.U. thing happened, and now I think, with the U.S., whatever, you know, thawing of ice has happened and a good budget with respect to manufacturing and focus on infrastructure. So I think things will start to build up from here, hopefully, and, you know, we should also be playing along. And I just hope that the 25-30% growth scenario comes back as soon as possible, because it's been one or two years and we are also feeling wasted.
Anyway, that always is a part of the cycle. So good to hear that the ground reality has started to change, for good. Thank you so much, and all the best to the team.
Yeah. Thanks a lot. Thanks.
Thank you. The next question is from the line of Mudit Bhandari from IIFL Capital. Please go ahead.
Hi, sir. My question is upon the margin. So if I look at Q1, Q2, Q3 FY26 to Q3, crane or equipment division realization, average selling price has slightly decreased on a blended basis. And even then, our margin has expanded. So, which product is driving that or, how that is being done?
Luthra Saab, were you able to figure out the question, ki our selling price has decreased across which product category?
Across our non-agricultural product, total construction equipment segment on a blended basis.
Price realization has increased, not decreased.
I think it has increased.
Whatever data you are looking at is wrong. Our price realization has only increased.
Well, in most of products, the price, selling price has increased.
Okay. So if I calculate reported revenues by reported volume figures, so it's a blended realization.
But there is a definite increase across all product categories. All product categories, non-agri.
Okay. Mm-hmm.
The last nine months.
Okay. Okay, and which product has led to our margin improvement in this quarter?
The current quarter, I think it's more to do with the product mix, because what is happening, new generation cranes are becoming more popular than the traditional Hydra cranes. And, in that, again, the higher tonnage cranes are becoming more popular. And tower crane again is on a growth this thing. So I think especially, bigger pick-and-carry cranes, the new generation type, and some tower cranes. So that's further helping us in our margin profile.
Understood, sir. If I look at current improved selling price, is this now accepted by customer post the changing norms of CEV or whether-
Yes, yes, yes. Now that acceptability is very much in place. We struggled in quarter one and to some extent in quarter two on account of price acceptability. But now I think it is 9 months down the line, 10 months down the line, so now it is totally flown into customers. And that is also one of the reasons that, you know, we've been able to improve our numbers in December, and we are very confident of this quarter. Because the price has flown down and acceptability is, is totally there in the market. It has been 8, 10 months.
Okay. So, if let's say we get tower crane, crawler cranes and truck cranes in FY27 also, then that will be at an increased realization or increased selling price to our pick-and-carry crane, or how is the difference in our selling price within these?
Cranes and crawler cranes are very different. Pick-and-carry cranes, the price range is anywhere between INR 15-16 lakhs to, you know, INR 30-40 lakhs, INR 45 lakhs. Truck cranes and all crawler cranes, they start at INR 80-85 lakhs and go up to INR 2, 2.5, 3 crores, depending on models. Most popular, I would say in the range of INR 1.4, 1.3 crores average. So they're totally different types of machines. And yes, there is the issue of price realization in the truck cranes and crawler cranes. That is the reason our market penetration is small, because the Chinese are dumping at very low predatory pricing.
And hopefully with the anti-dumping duty, if at all they come or, you know, going forward with the CIE scheme, which the government wants to, PLI scheme, I'm sure somewhere it will have some compensatory effect or benefit wherein we will be able to sell more machines as compared to what we are doing today.
Understood, sir. Lastly, I think we mentioned we have capacity of 400 truck and crawler cranes, and crawler cranes. Is that right?
Yes.
Got it. Thank you, sir.
We have capacity of about 400. We are doing close to 50, 60. We were very hopeful that anti-dumping duty will come, and we will be able to utilize that capacity in the next 2, 3 years. Unfortunately, it has not come. Now, we are very hopeful that the PLI will come, and we will be able to utilize at least 60, 70, 80% of that capacity. Let's see. Let's keep our fingers crossed. In any case, we had mentioned earlier that our Caterpillar joint venture will be there in place. So hopefully we should be in a position to announce something very shortly, wherein that joint venture definitive agreement shall happen and it will become operative. So that will also help us in utilizing this capacity.
Wonderful, sir. All the very best.
Yeah. Thank you.
Thank you. The next question is from the line of Mihir Manohar from Trust Mutual Fund. Please go ahead.
Yeah, hi. Thanks for giving the opportunity. Sir, I wanted to understand about. Am I audible?
Not really. The voice is a little garbled. Maybe you are on the speakerphone or something, I don't know.
Yeah, sure. This is audible now? This is better?
.Slightly better, yes, yes.
Sir, manufacturing, logistics and infra close to account 70%-80% of the business. I mean, when I see the EPC order books across building and factories, across all EPC companies, the buildings and factories and manufacturing order books are quite strong. I understand that there is an increase in price which is happening, but I mean, given the underlying demand which is strong, why did the volume not, not pick up? And, should we see a material improvement from here on, given the fact that, at least for EPC companies, the building and factories order book has picked up quite sharply.
See, our execution and our orders have also picked up. But, Vyom, I think, large parts of the question I was not able to figure out. Were you able to figure out because it was garbled, in this thing?
Sir, what I could figure out is that, I think, there is some manufacturing uptick in the economy, and-
Mm-hmm.
They want us to reflect upon that on our business. Is that right?
Yeah, I will just repeat. I'm sorry for the garbled voice. So broadly, I mean, when I see the manufacturing order book across EPC companies, infra as well as buildings and factories, that order book has picked up quite sharply across last one and a half year. But however, though, I agree that there has been a price increase which has been there for us because of the new norms, but the volume growth has not been there. So now, given the fact that such high order books are there for EPC company, should we expect much better volumes for us?
100%. See, even though order books were there, but the payments for EPC companies were lagging. That was also one of the reasons that they were going a little slow. Now, everything seems to be have sorted. The price increase and the acceptance, with respect to the emission norm changes that has happened. EPC companies, the order books are there. Fresh orders are also coming in at a good rate now, and the, let's say, the payment problems is sort of getting solved with liquidity being addressed here and there by the government. Manufacturing sector, again, things seem to have picked up, and a very clear indication for that is price of steel going up. So I believe that, you know, all things are now, you know, coming back together in the right, this thing.
That's why we are seeing increase in our own execution, our own order booking and execution, which we have felt definitely in the month of December, as well as continuing well into January and February. I think we go to the next question.
The next question is from the line of Siddharth Sreekumar from ithought PMS. Please go ahead.
Hi. My question is, what would be the volume for backhoe loaders in Q3?
In Q3, it should be close to about, what, 200 numbers, Rutakarsh, approximately?
Backhoe loaders.
Around 4:50, sir.
450, yeah. I didn't hear you-
No, I think it is, the construction equipment will be put together. Close to 400 units.
Hundred.
Backhoe Loaders-
200 units.
200 units. Okay.
Yeah.
How do you see this product category in the future, in, let's say, over a five-year period?
I think that we are doing close to about 800-900 units average in this category. It can easily be at least 3-4 times of what it is now. I would say 3 times. We are already feeling it in our domestic market, especially in the last 1 or 2 quarters. Yes, for the last 3-4 months, the entire construction equipment market was down about 20%-25% in volume, so that was a drag. But we feel that even in the coming year, from this 800-900 units, we should easily go to 1,300, 1,200 units. That's a 30-40% increase. Over the next 5 years, maybe a 3 times is what it seems things are.
We are also getting a lot of good traction in the export market for this product, so we believe that whatever numbers we are able to increase in the domestic market, similar numbers we should be able to increase in the export market also. And, things-
Okay.
seem to be panning out as of now as we speak.
Understand. One related question I have is, like, from a product perspective, do you actually earn a higher margin or the same margin from this product compared to the cranes?
See, as compared to cranes, the margin would be slightly less because of our numbers. But yes, as soon as our numbers start to hit more than 1,300, 1,400 units annually, we feel the margin profile for this product as well as cranes would be similar.
Understand. So like one-
Sir, I just request you to rejoin the queue for the follow-up question, please. Thank you. The next question is from the line of Kunal Tokas from BFC. Please go ahead.
Hello, am I audible?
Yes, you're audible.
Okay. Thank you, sir. Just two quick questions. First is, what is. Can you tell me the share of cranes to the top line and specifically, tower cranes?
Share of cranes to the top line.
Yes.
The tower cranes is generally around 10%-12% to our-
Okay
top line. This quarter it was 10, 11 or 12. I think Mr. Luthra can do a quick calculation and send it over to you.
In the entire cranes segment?
.range generally for us is around, Luthra, sir, do we have a figure for all trades put together to our top line?
We'll send that number, sir.
Generally, it's about 60%-65%, as Luthra said it to you.
Okay, sir. And the second question is in backhoe loaders, which you say can be grown, create in five years easily. JCB is the leader. I assume that you have also, you have already tried to dismantle that leader. So what, what, what has been the challenge in doing that?
Yes, we have deciphered everything. We know the issues, and, obviously, that's, we can discuss in detail. We have all the plan, and, you know, why we are not able to do it, and other manufacturers, why they are not able to increase the numbers. So we definitely have understanding of those facts, and we are working very hard on them. And, we are hopeful that we should be able to break away the shackles very soon.
I was asking this question because I would assume that you would be more cost competitive with them, right? So it has to be some other factor.
Yes, sir. So our pricing is much better than JCB. Machine is very similar.
Yes.
But the issue is that over the years, what has happened is that, you know, today, JCB as a company is really not selling their backhoe loaders, but all the NBFCs are selling their backhoe loaders.
Okay.
Because for them, in a resale value perspective or, let's say, a default perspective of their past experience in the last 15, 20 years, they feel JCB is the safest product. Even JCB bullies the finance companies or the down the line official to a certain level, that if any individual person posted by NBFC in a particular area, if he finds any other machine, he gets blacklisted by the JCB network, they don't give him business. So a lot of things are happening. So it's basically the NBFCs and finance companies are selling the JCB machine, and it is becoming a, you know, some sort of a self-fulfilling type of a property that it is happening automatically.
And then we've understood that, we're working on it, and very soon, I think we should be able to break that shackle also. It's not that those finance companies are not funding our machines.
Mm-hmm.
But somehow they are in a trap of unknowingly, you know, they keep on funding. So what they also do is, if some neutral customer comes their way, they indirectly push it to JCB rather than thinking of any other machine. So I'm sure it will happen.
Mm.
Nothing can sustain forever, so I'm sure we'll figure out something.
Okay.
And, uh-
Okay, sir.
Just this-
Yes.
Just to add to this, for the nine months, as per the ICEMA figures, for, you know, earth moving equipment, the market has contracted, the domestic market has contracted by almost 10%, whereas, we have tried to remain flattish or grown a little bit. So that clearly indicates that we have grown a fraction of our market share as well.
But that is very minuscule-
That-
At the current juncture, I'm sure with all the right things that we have been doing, and even currently we are focused on, and I can very proudly say that our latest machine, which we introduced along with CEV-V , is one of the best machines in the world with respect to performance and reliability, apart from aesthetics.
All right. That's fantastic, sir. Thank you, and have a good day.
Yes, thank you.
Thank you. The next question is from the line of Prateek Kulkarni from Kosh Wealth Management. Please go ahead.
Yeah, hello, sir. Thank you for the opportunity. Am I audible?
Yes, yes, you are audible, yes.
Yes, sir. So I just had one question, and correct me if I are wrong, if I am wrong. In the recent version, there was a mention of some, you know, customs duties on the customs bonded zones, where, you know, foreign companies can fly in their parts and machines there, assemble, and then sell it to, then they can sell it to Indian contractors, but they will be only the duty only will be levied on the imported parts and not on the finished machine. So is my understanding right? And if does, if this does happen, could this, you know, reduce the gap between our total cost of ownership and the foreign players' total cost of ownership for the contractors?
First of all, on basic understanding, what I just heard from you, I don't think this will make any difference whether it is customs bonded or not, because finally, customs duty is always paid only on the imported parts. So if it is assembled in a customs bonded or duty is paid first, the only difference would be the duty being paid when it is imported or duty being paid with a delay of three, four months. So financially, that is the only difference. But Luthra, sir, is there any such thing? That is his main question.
I don't think so. The only benefit the government has given is that now the pay duty can be paid for the put in manufacturers like us, not on a monthly, 15 days, but on a monthly basis. So now the, whatever we import, we will have to pay duty on a monthly basis. And if you were, if you like the, keep the machines in the bonded warehouse, duty has to be paid when you remove the material from the bonded warehouse. So probably nobody wants to keep inventory, unless somebody wants to have a lot of inventories in the bonded warehouse.
Warehouse also, Luthra, which is currently also applicable.
Yeah, we are, right now also it is applicable.
This AEO, what do you think, 15 days, one month, we can pay duty. This is AEO, A2O. We already have this approval, na?
We already have. Earlier it was 15 days; now we can pay duty on a monthly basis. On the first of every month, we can pay duty for all imports to India.
We can calculate whatever is duty and pay once, rather than paying it every time or every 15 days.
On a daily basis, and now it is paid on a monthly basis, at the end of the month.
Okay. Thank you, sir.
Okay.
.Thank you. The next question is from the line of Rajiv Maheshwari from Raj Investments. Please go ahead.
Good evening, Mr. Agarwal.
Yeah, good evening.
I have a couple of questions. First is, has the government totally gone back on this electric cranes, because it's long back, it was showcased in the exhibition, but still no update on as such on that. Can you just throw a light on that?
Yes. No, I think they did come back with some regulations 4-5 months back, which have been approved. But unfortunately, the approvals required from CMVR, again, ARAI approval, there was some issue with the Exide batteries and all. We have any update where, when it is getting finished?
Sir, the batteries have gone to ARAI on their test bench, and we are expecting their approval within this month or maybe next. Then we are good to-
We can safely assume that within this quarter, the electric cranes will become ready for commercial sale?
Correct, sir.
Okay, so they, they will be ready this quarter. So, regarding the electric vehicles, will it help us to gain market in the E.U. and the U.S. after the trade deal, the, the new electric cranes and the new, newer version of the cranes which we recently launched?
See, to be very frank with you, currently, we do not export anything to the EU or America, and that was never in our scope of things also. In the last 4, 5 years, 3, 4, 4 years, we've actually started exporting to Middle East Asia, Africa, some South America, and little bit in Southeast Asia and some Central Asia. Definitely, going forward in the years to come, we will be exporting these electric cranes, and not only these electric cranes, today, our emission norms are the best in the world, Tier 5. Europe is Tier 5, America and Japan is Tier 4. So yes, going forward in the years to come, not only electric, but even, the Indian diesel engines, everything is going to go to the developed part of the world in the next 2, 3 years.
But first, our focus is on Middle East, Africa, South America, which we can penetrate easily.
The second part is regarding our defense order pipeline. Anyway, it's a long time, none of the announcement has come on any big defense orders. So is this the government gone slow or something is going up in the pipeline, which may be announced in the coming months?
Yes, sir, there is a order of close to about 150 machines. They are called heavy recovery vehicles, which we are expecting anytime. Each, each machine is approximately INR 1 crore. So at least first it's a 54, and then it's a 90. Take care of Utraza, that's how it is? This, this joint tie-up with Ashok Leyland, HRV.
Yes, sir.
This we'll be announcing shortly. And even, as of now, we have orders close to around INR 500 crores, available for execution. Within this year, we'll be executing further INR 30-40 crores. So let's say we will be entering the new year with about INR 460-470 crores worth of orders.
Okay, that-
We are very hopeful that in the next year, we will execute about INR 150 crores-INR 200 crores worth of orders.
Thank you.
So that should increase this, make it about a 5%-4% contribution from defense. And we hope to maintain that 5%-6% level going forward.
If I listen correctly, in your opening remark or in some of the questions, you have mentioned about some acquisition of land in Indore. Am I correct? Was it Indore or some other place?
Yes. In Indore as well as Faridabad, Palwal, yes.
Faridabad, okay, makes sense. But in Indore, any plan of setting up a new plant or what exactly is the rationale behind this?
The rationale was to rationalize on the logistics outward logistics cost, because Madhya Pradesh, Indore, is we believe, more or less like, more closer to central India. So dispatch of machines, we realized, to south and west would be more economical from Indore. And, you know, on a larger number of machines, this could lead to significant outward logistics. And obviously, in Indore, there is a good enough base for. To, to further diversify our input supply of, you know, the auxiliary industry base, as well as to benefit on the logistics, outward logistics, and especially, you know, the port infrastructure. So this was the main consideration why we also looked at Indore going forward.
By when can we decide on the framework of setting up that plant, or now you have just planned to take the land and in due course will plan that?
Yes. Right now, we have planned to take the land in the next. It is being developed for commercial use because, you know, the land is under development. So hopefully, we will get possession for use in the next one year.
Okay.
So we can expect something over there in the next 2-3 years. Currently, first of all, we would be developing our tower crane plant on our this new piece of land, which we have bought in Palwal. We have bought two pieces, one is about 22 acres, the other, which we are about to get possession, is about 86 acres.
Okay.
So first, we will be developing the 22 acres in Palwal, and we will have 86 acres in Palwal available for future expansion, and this 30 acres in Indore for future expansion.
Okay. Okay.
We thought to-
Yeah.
We thought to lock in land at good prices because, you know, land prices, you know, at a very significant pace.
Yeah.
To ensure that we do not make a loss, CapEx on cost of land. So that's why we locked in these lands.
Okay. Maybe you got at a competitive rate and, between and since fund was available out there, so-
So prices already doubled. So this, this INR 250 crores worth of land is already INR 500 crore. By the time we are setting up factories, it will be INR 600 crore-INR 700 crore.
You have already doubled your money in a couple of maybe years or?
The company's money, but in any case, the purpose is not to sell them.
Anyway, any-
So the future expansion will come at a very less cost.
Yeah, that's right. One quick update, the January sales is, how, how much percentage is the January sales, compared to last month?
It's definitely higher.
Okay. Thank you.
Thank you. The next question is from the line of Teenal Barada from Prudent Corporate. Please go ahead.
Hello, am I audible?
Yes, you are.
Hello. Yeah. Can you sort of give me the year-on-year growth of these sub-segments in the non-agriculture segment, such as, you know, saying what is the growth rate for cranes, construction equipment, and the material handling segment, and the sort of direction for the next year on how you see the growth in these three segments?
If you look at our segment results, so in the cranes and material handling and, let's say, the construction equipment, on a quarter-on-quarter basis, we've been able to grow at about 10% on revenue basis. And, yes, as compared to on a year-on-year basis, with this quarter, there was a 4% lower growth, negative growth. On a whole year basis, I think it is going to be more or less, flattish, even in this segment, as conveyed earlier. Flattish to maybe a minor positive. So that is how it is. And, next year, we are sure that there should be good growth in both our segments, and, but, yes, we can-- We are only able to put a number to it only in the next conference call, which will happen-
Sorry, I will. Hello? Hello.
Yes, yes, please.
Yeah, sorry if I was not clear. I was asking about volume growth in these three sub-segments in the quarter. Can you give a brief or, you know, an approximate number?
I think it will be better if Mr. Luthra send it across on an email. Luthra, you have data with you, which you can just, send it?
He can continue, and then we can send on email to him.
Just please send us an email. We'll immediately respond on that.
Okay. Yeah, nothing else from my side.
Thank you. The next question is from the line of Kaushik. The next question is from the line of Himanshu, from individual investor. Please go ahead.
Hi, good evening. Am I audible?
Yes, you are.
Hi, Himanshu, go on.
Yeah. So, so my question is regarding some of the new growth areas the company is venturing into in terms of exports, defense orders, and heavy cranes. So will these businesses continue to follow the current asset-light build-to-order model that is supported, that has supported high asset turnover historically, or do we expect higher asset base for all these incremental businesses?
See, we have always been asset-light, and especially our ratio to asset to turnover ratio has been very good. We will totally keep that in mind in whatever we are doing.
All right. Thank you so much. All the best.
Yeah. Yeah. Thank you.
Thank you. The next question is from the line of Param, an individual investor. Please go ahead.
Hello. Hi, sir. Thank you for this opportunity. Firstly, post transitioning to the BS-IV norms, what kind of EBITDA margins can we expect in, say, FY27 and FY28 on a steady-state basis?
I think what we have been achieving in the recent quarters should be our benchmark for, you know, let's say, the next year or year after that. Maybe, close to about, let's say, 18%-19%, if we include other income, and close to about a 15% ±, without other income.
Understood, sir. So secondly, could you elaborate more about the AI integration in your cranes, and how difficult it is for other players to sort of replicate the same?
Replication of the same should not be possible because the new four odd features which we've introduced in our machine, we have patented them before we introduced it on the machine. You know, the technology and the procedure that has been used in you know to make it function. So in case if any competition tries to you know get close to it or copy it, then obviously we'll have to use our patents to stop them. And what these do is they basically make the crane fail-safe, and the operator can only do safe operations, and he even if he does some unsafe operation, it will be brought to a safe safety zone automatically. And whatever unsafe acts an operator is doing are being recorded.
So the operator's grading, whether he's actually a capable operator or not, that also, you know, gets generated. So it's a mix of a lot of things. But most importantly, that it will be very difficult for anybody to, you know, do an unsafe operation or you know put the safety in jeopardy. Apart from that, there are a couple of other things, like the first clutchless transmission. So I'm sure this should gain a lot of traction with operators because operating cranes will be very easy, less tiresome, less cumbersome. And again, keeping in mind safety, as I mentioned, the first rigid chassis single chassis crane. So you know because there is no articulation, so you know the crane is much more safer than any other conventional pick-and-carry crane.
All these things put together, I'm sure, we are moving in the right direction.
Thank you. As that was the last question for the day, I would now hand the conference over to the management for closing comments. Over to you, sir.
Yeah, thank you. So I think as discussed and, and going forward, we expect stability and visibility in the markets post the EU and US trade deals and our own government's focus on infrastructure and manufacturing.
[audio distortion]
I think this augurs very well for our future prospects. We expect that with our capacities and capabilities in place, going forward, our growth trajectory should get back on track soon, and we are looking forward to it. Then I think that's it from our side. Thanks a lot. Thank you.
Thank you.
Thanks.
Thank you.
Thank you. On behalf of Emkay Global Financial Services Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.