Ladies and gentlemen, I welcome you all to the H1 FY 2025 Post-Earnings Conference Call of Aimtron Electronics Limited. Today on the call from the management team, we have with us Mr. Mukesh Vasani, Chairman Promoter, Mr. Nirmal Vasani, Senior Technology Director and Promoter, Mr. Sneh Shah, Director of Sales, and Ms. Nikita Shah, Chief Financial Officer. As a disclaimer, I would like to inform all of you that this call may contain forward-looking statements, which may involve risks and uncertainties. Also, a reminder that this call is being recorded. I would now request the management to run us through the investor presentation, detailing us about the business and performance highlights for the half year that went by, the growth plans and visions for the coming year. Post which, we will open the floor for Q&A. Over to you, sir.
Good morning, everybody. This is Mukesh Vasani. I'm the Chairman and Non-Executive Director of Aimtron Electronics Limited. We really appreciate your time. I hope everybody's hearing me well, because today we are in Germany. We have Electronica, EMS, and SEMICON Expo, just like we had in Delhi, India. It's a huge crowd and it's international. Today's call will be a little shorter. Thank you so much for your time. We did look at our presentation, so I'm going to flip through very quickly and we can spend more time in our question and answer. I'm just going to skip through a couple of pages. I think for new joining today, we are in a very wide variety of industries, starting from industrial, gaming, IoT, medical, AI, power, and so many areas we work. We have a niche market as we spoke last time. We are two promoters.
I think you know both of us, Mukesh and Nirmal. This is our growth pattern, and we did discuss last time, so I'm not going to go too much in time today in essence of your interest in questions and answer. On business profile, I think we already talked a little bit. Manufacturing facilities. Huge expansion is going on as for our plan. Texas facility, we already registered everything and is getting shaping up. We are here in Germany also. There might be something coming out in future. We have one person already hired here. Manufacturing facility-wise, you already seen this. Capabilities, I'm going to skip this time. We do complete solution end-to-end from PCB design all the way through box build. You can see in our cable assembly also, we put a cable line. We already have some interest in our sheet metal.
We do plastic injection molding, sheet metals with one of the preferred partner right now. In our magnetics, we do complete box build, system integration, plastics, everything we do, including logistics. On this product portfolio also, we did discuss last time, so I'm going to skip this one. You understand that now EMS is a very hot topic in India and government schemes and everything. Everybody knows mostly everything, so I'm not going to go too much in detail. If you have any questions, you can ask those questions in our question and answer. Product catalog also we spoke last time, so I'm going to skip. I think partnership, you already seen we have DGT, Microchip and Texas Instruments. We can working with them in R&D side. That is something is interesting for us for future. We did discuss about competitive strength.
Most of the businesses have India and they go expand globally. Our benefit is here, we have a foundation in U.S.A. and we are expanding globally. That is the difference here. Rest of things you can see, American quality, American way of working. Even though India is a Made in India kind of concept, separate entity, but still the roots coming out from there. We see that difference, to maintain our quality and maintain our profitability. SWOT theory, way forward. I think maybe let me just bring Sneh Shah over here for a couple of minutes. Sneh, you want to put some more light on the moving forward, what you are.
Sure. Thanks, Mukesh, for the brief. Good morning, everyone. To what we have committed, like 40%-50% CAGR, I think the first half year also we can reflect that numbers and that can be seen. Second half also, we are committed to in line with that numbers. In terms of sectors, IoT played a major contribution and down the line it is going to be there. To what we committed in terms of defense, we had one international drone player, which Nirmal will brief you up. We do have one PO coming up from one of the Navratna PSUs as well. That's a breakthrough that we had it in first two quarters. Down the line, definitely that is going to increase. AI, one of the important sector we have been talking about. Development has already started in that segment.
We are on the large of making plastics and all, and probably we'll be closing that order soon in coming quarters. Also, in terms of defense, we are eyeing at India as well as other global players. We did get a chance to visit Tata Airbus project as well because couple of our U.S. entities are directly, indirectly, working with global defense players. That's also we are seeing to it how we can have it under Aimtron Electronics or Aimtron India entity, that we are trying to channelize something on that front as well. Down the line, to what latest technologies are AI, IoT. IoT this year is going to be the major contributor, down the line, we have couple of more sectors that we are going to add on.
Thank you, Sneh. Nirmal, you want to add right now or you can add later? You can add about drone side.
Yeah. There are some very unique opportunities. There is one in particular that I recently had the opportunity of meeting, in the Southern United States in one of our defense and aerospace hubs that the U.S. has. They are looking for a large-scale provider, with very high volumes. The business, the likelihood of it, Aimtron has a pretty high degree of confidence in because the geopolitical situation in reference to the election results that just happened, the president-elect is going to be highly in favor of these types of projects. Aimtron is expecting that not only will it be this customer, but also, we should see a significant growth in not just drone and aviation, but also in power, and in oil and gas and those types of technologies as well.
There's a lot of opportunities that we're seeing in the Southern American market that we should be contributing to this significant growth for Aimtron Electronics.
Thank you, Nirmal. I think, we can start with this. Sneh, you want to share a couple of line on this one, then maybe Nikita can take the rest.
Sure. To what one assembly line we had talked about in RSP, that's already been received at the facility. Trial productions are underway. Probably this month it will be up and running with its full production efficiency, 100%, down the line. To what we committed in terms of diversions of routings of customers from U.S. We created a subsidiary of Aimtron Electronics directly at Texas. Immediately not, but down the line, you will see that a couple of quarters down the line, you will see that we will be having a lot of customer base coming from Texas facility. To what Nirmal briefed, we are eyeing at drone sector as one of the major contributor. We are expecting somewhere around couple of million dollars worth of business, which will be executable around next two years of time frame.
To what IP revenue, we stated about first two quarters, it jumped almost double-fold in terms of percentage, which was seven, which has increased to 18, more than 100% growth just in IoT. Again, next two quarters also, next financial years, that is going to be major contributor. To increase the operational efficiency, we had changed couple of store activities where material needs to be stored, where lean 5S Kaizen, we already are following that. To improvise on that front, how we increase the efficiency. We changed the structure of store, and we created a compact rack system. I think we will be having one factory visit tour as well, where everybody can view that. We will be planning something on that front.
Okay.
Under Make in India initiative, to what we are eyeing at, registration with all the PSUs is completed. Couple of companies have already audited. We would not declare the name as of now. They already approved us, and we already received one order from one of the Navratna PSUs. CDSCO, that is for medical domain, just like we have one, three or four at five for MedTech. Under Make in India, Made in India, we need to have CDSCO as well. Unit in Vadodara, it is CDSCO approved, where we are making one cancer detecting device, again for one of the local international players itself. Down the line, we have initiated working on AS9100, which will help us to enter more significantly into aerospace and defense sector. Probably when we will have a next call, by that time, AS9100 certification will be up and complete.
Thank you, Sneh. Now your excitement. I would like to invite our CFO to share the result.
Good morning, everyone. It gives me an immense pleasure to display the financial indicators for H1 2025. Aimtron Electronics is now a zero debt company as on 30th September 2024. The revenue for the half year stood at INR 576.9 million, with a rise of 33.90% year-on-year. The EBITDA stood at INR 147 million, with a rise of 30.70% year-on-year. The net profit stood at INR 111.8 million, with a rise of 57.40% year-on-year. The net profit margin is 19.40%, adding 289 basis points year-on-year.
Thank you.
The revenue breakdown.
Yeah. Let me just go to the next page. I think, yeah, you can continue. Before that, I think there's one huge, and this main news is also our order book is getting increased. In this little slowdown period, lot of CM, their order book keeping down. Our order book compared to last year is INR 1,350 million, it's getting increased also. It shows good sign for us. Continue, Nikita. Yeah, continue.
Yes. The revenue breakdown, we have a major generated industry-wise, from industrial sector, which is 56.3%. Geography-wise, the major we have from India itself, which is 51%. Segment-wise, we have the revenue from the major PCBA, that is 77.7%.
They have more interest in a question and answer, so let's go very quick.
Yes. As on 30th September 2024, we have the closing order book of INR 13.50 million. Moving to the profit and loss section now. The EBITDA stood a margin that is 25.5%, and the net profit margin was 19.40%. The Earning Per Share was 5.48. Now moving to the balance sheet. As said earlier, there is no long-term borrowings as on 30th September, and short-term borrowings has also reduced to INR 70 million now. Assets have grown and even the inventories, we have INR 14.46 million. We have a good assets ratio in our books.
All right. I think, Vinay, we can jump-
Yes.
Onto the question and answer.
You can stop the presentation. We'll move to the Q&A.
Yep.
All those who wish to ask a question may use the option.
Thank you, everyone.
In case you're not able to raise hand, you can put your question in the chat box. In the chat box, we have the first question from Rohit Ahuja, who is asking if you can share a bit more information about the defense development that you mentioned on slide number 28, with respect to engaging with clients on potential deals worth $10 million.
Yeah, okay. Let's have Mr. Sneh Shah jump onto this because
Sure. Basically, the customer is based out of U.S. and we already have started development of plastics and a couple of other parts like linear actuators and all. Development is already initiated, and we are expecting closure in coming quarters. As of now, it will be prototype first. Once prototype is done, pilot batch and then from pilot batch it will go to mass production. That $10 million worth of split will be over the next two years. That is what we are expecting as of now. Plastics, as we already have initiated, we are expecting that closure probably before end of this financial year, where we'll be closing on mass production orders.
Thank you.
Yeah. The second question in the chat is from Praveen Sahay. Order book of 1.5 times FY 2024 is a significant improvement. Can you give details from which sector, industry or geographical location these orders are received, and more from existing customers? We've already spoken about the deals, so he just wants to understand a bit of a breakup about the order book.
Sure. If you see in the presentation itself, we have mentioned. Industry sector, IoT sector is something that is contributing, and it's a combination of both existing as well as new customers. Probably shifting towards PCBA. From PCBA, we are shifting more towards box build. That is something that is increasing our top as well as bottom line.
Sure. Anybody else who wishes to ask a question, use the option of raise hand. There is another question from Mr. Suman Kumar. How much revenue can be expected with the current capacity and the work in progress in terms of capacity expansion?
Very interesting questions. I think for one line, INR 100 crore is the thumb rule for EMS industries if you have box build. We have now five lines. You can do the mathematics. Sneh can elaborate more.
Could you give a ballpark, sir, what revenue can we achieve from this capacity?
If we run on three shifts and the current capacity or in terms of CapEx that we already have invested, we can easily go up to INR 450 crore to INR 500 crore worth of reach.
Okay. We'll take the next question from Mr. GD Tiwari. Tiwari [Pedboi].
Yeah. Good morning. Yeah. I am interested to know something about technical aspects of environmental and durability test used for defense equipment. As I understand, Aimtron has completed the first phase vendor registration in aerospace. My linked question is, whether the company is ready with all the climatic and durability test evaluation society for Air Force and defense industry? That I would like to know if it is possible to get.
Certainly. That's by default, rugged testing is something that is required when you go with any aerospace and defense kind of project. We do have affiliation with a couple of third parties. I'm just giving you a layman language example. Say ERDA, that's one of the government body in Gujarat who does research, laboratory testing and all. Just an example, say UL or you want a CE or something kind of IP or something, IP67 or something. All that rugged testing and all that, yes, we do it. We do have a design team, like hardware, firmware, mechanical, who help us out along with the test manufacturing team, an engineering team, where we can get things done on that basis.
Okay. Thank you very much. One related question. You are not planning to have your own facility in near future? You will be always dependent on the hired facility.
I think there's two answer for this question. One is to develop full test lab is a huge setup.
Yes.
Yeah. We are UL approved shop now. We just recently got UL approval. All the examinations, documentations are done, that's why we didn't blast today in this message. We, Aimtron Electronics India facilities UL approved. We do CE marking every day. Some of the tests we can do in-house, but we need to accredit by ourselves, that's why we have to go through different agencies.
Yeah. Thank you very much. One more related question. All the export you are doing to the U.S. or European market. Those equipments are also tested in our Indian facility or the agents are doing the testing?
What we do, we do not do a full IP or end user equipment. We do not have that our responsibility. We do a part of that equipment. Let's say American Machine, they make a company, we make just a control box for them.
No.
That's why we don't need a complete full agency approval for that.
Thank you. Thank you very much.
Appreciate. Thank you.
We'll take the next question from Nikhil Chandak. Nikhil, you can go ahead.
Yeah. Hi. Two questions, actually. One is, in the last meeting, I remember you'd explained about there also being a promoter entity or a group entity in the U.S. What I wanted to understand is that out of your total order book of INR 130 odd crores, how much order book is from your U.S. entity, which I understand is not part of the listed entity, but how much order inflow legally or from an order-wise comes from the U.S. entity. Second, I understand there is a longer-term plan of gradually shifting the business from the U.S. entity directly to the Indian entity. How far are we in that journey?
Thank you, Nikhil. Namaskar. Yes, you remember last questions and last answer also. I don't have to explain too much. You can see our result. Also, this time we are even 51% just a local. We are bringing more and more local business. That's the number one. Number two, we are bringing a lot of out of Aimtron business over here. That is the reason, part of your second question is, Sneh already mentioned that we open an entity. This contract is sometimes two years, sometimes three years. It's not easy to move, just, "Hey, guys, give me order now in India, other I'm going to go somewhere else." That's not going to happen. Is that correct? Also in America, that gives us a credibility.
We cannot say that, "Hey, we are Indian company now and give me order in India." We created a company in Texas, and that company, we are looking a small M&A under the Texas company. That's where more and more business we are moving towards that company. This drone business is going to come definitely in the Texas Aimtron Electronics LLC. That is we are creating right now. All the blanket orders takes. See, we have only six months. We finished. This is the first six months we finished. We haven't finished six months yet, though. After listing, we finished six months in 6th June. It takes one year to two years to just move all the contract to new company or a new entity.
Other than that, intercompany, we are trying to minimize, and our goal is to get at least 10%. That's our goal. End goal is 10%. You won't see this much also business in this, Nikhil, if you look at the in detail, we don't have intercompany business. We try to started explaining the customer, "Hey, why you are going to go two different entities? Just go directly in Aimtron.
Understood. To be sure, 10% is the orders which the U.S. entity is giving to the Indian entity right now. Is that the right way to understand?
Approximately, yes.
Approximately. Okay.
If that then that's approximately.
What would be the roughly size of the U.S. entity, say, which theoretically eventually can move to India? What would be the size?
Maybe we can take another call, but a little bit in general. In general is we are about INR 900 crore worth of total because we have six, seven different companies.
Okay.
Definitely that's our end goal. Is that correct? That's where we have more buck. Is that correct? India and Indian customers, Indian entity Make in India. There's a lot of benefit in India. That is end goal. Right now it's too early to say.
Right. Understood. Understand.
Really appreciate it.
Perfect. Sure. Thank you so much.
Thanks, Nikhil. We'll take the next question from Anik Mitra. Anik, you can go ahead.
We have got to start, okay?
Yeah. Yes. Anik Mitra, you can go ahead, please.
Am I audible?
Yes.
Yes.
Thanks for taking my question, sir. Sir, taking the cue from the previous participant's question, I just wanted to understand what is the future of the unlisted U.S. entity? Means, are you going to take over this particular entity going forward or what will be the future of that particular entity?
Our main goal is to grow Aimtron Electronics India. That is the business, because we all are investors, correct? I'm also indirectly an investor. Correct? We all see the big value in India. That is our end goal. For that end goal, we are finding out all the options from all the experts. As I said earlier also, the easiest option is create a company in Texas. That is a tax-free state, and that's very favorable to business over there. Because right now to acquire under Aimtron Electronics to intercompany also, we don't have enough funds. It's too early to dilute something or do something and get the bigger company under small company. Main goal, as Sneh said, let's get this revenue to INR 500 crore. We have a lot of capacity over here. We established a world-class facility.
When you come to Vadodara, you will love it. Let's do this first, and then we start adding one another to the group also. At least at the end, before I retire, maybe five, seven, 10 years, I would like to bring everything under Aimtron Electronics India umbrella. I hope I answered your question, Anik.
Yeah. Great.
Thank you, Anik.
Yeah. One more. Regarding your new SMT line, have you installed that particular line in Vadodara or in Zandali?
Yes. We've been waiting for this blasting news to the EMS company. Yes, on Dussehra day we did the ritual with coconut.
Okay. I didn't get it. Means is it in Vadodara?
It's in Vadodara.
Vadodara.
It is in Vadodara.
Okay. That was from my side. Thank you so much, sir. Thanks.
Appreciate it. When you all need to come out and visit our facility, I think you will see the difference.
Yeah. I'll be very happy to be a part of that.
We've got quite a few questions on the chat. Before that, we will take the question from Prateek Chaudhary. Prateek, you can go ahead.
Sir, there was this news on one of the articles which said that you may be looking to purchase some land in Bengaluru aerospace region. Some sort of an SEZ over there. Are we going ahead with that?
We are looking both options. Is it correct? We are a small company. We are not like a big giant people. They do one day here and they move other day. We are looking to see where is the infrastructure going to be built up. We are also thinking about where we have a Silicon hub or EMS hub or something. That's why we are looking some option in Gujarat also. And couple of big contract we are also working on this. Just let's stay tuned. Give us maybe six more months. Within six months we accomplish good. Our team did wonderful job. Hopefully, in a couple more months you will see something.
In your presentation you have spoken about backward integration and expansion. There you were mentioning about possible further expansion in the SMT capacity as well. This expansion, are you talking about the current line which is being put up, which is under trial production or something more than this also?
Sneh, you want to take this question?
Sure. As of now currently to what we stated, it's specific to SMT that we have put it up. Yes, long term, as we already have stated, we may look forward as well as backward integration. That's a long-term visibility that we are working on it. As of now we can state it that what we stated was specific to SMT lines, to what we have as of now, which is recently installed.
Yeah. Just final question. Again, from the presentation in your market expansion strategy. If you could touch upon what you have written under the industrial sector and the automobile sector. Under the industrial, you have written about exploiting opportunities in India's electronic space supported by PLI schemes and global investments and something on the automobile side as well. Since you already spoke about drone and defense, if you can touch upon these areas, industrial and automobile, what are our plans here?
Sure. Automobile, we are already serving into that sector. This time we got a breakthrough for one of the tier 1 companies. I would not name it, but tier 1 companies we got a breakthrough and we have started working on their battery management systems and specific to EV sector. Industrial, if I bifurcate that, we have myriad of segments under industrial as well. Just an example is Industry 4.0 or something related to their maintenance equipments or oil and gas related something equipments on that front. There are several things that are affiliated with industrial sector as well.
This automotive company that you were speaking about, is this an Indian company or a global one?
Indian company.
Indian company.
With global roots.
Okay. We will be sort of doing the whole box build and assembly of BMS for them.
PCBA as of now.
We'll start with PCBA and then box build will be the end goal.
Future, yeah.
I think that's a good thing about Aimtron. You will not see a bigger picture and come smaller. We go small and go big. That's our goal. It will take some time, but we don't want to overcommit.
Great, sir. Thank you. I'll get back on it to you. Thank you so much.
Really appreciate, Prateek and Vinay.
We have time till 12, right? We have one hour with us.
We have to actually head to the expo also. We have another call also.
I'll quickly take questions from the chat. There's a question from Mr. Darshit Shah. Our operating margins are high at 24%, 25% compared to other players. What are the specific reasons for that?
I think we discussed that also last time. Our model is a little bit of a pick-and-choose model. We look at the customers. We look at those customers, they are looking at long-term strategy. We look at those customers, they take at least one year to just get us on board. That means their quality system, their longevity of the product, let's say 20 years, 10 years, 15 years. Those are the customers we have. Even the same customer, I give an example. We have a customer, let's say Boeing, but we don't build a mechanical or some kind of screws and nuts or bolts b ut we build a heart and it goes in a missile controller. That kind of board we build in the State. Not here yet, but we're going to go on this.
Those kind of customer base we have, and that is the reason we have a high margin. Also, last time I gave an example, Mercedes comes alone. Mercedes are correct. You look at good customers, correct? You also look at all the investor community also look at good companies, correct? Same, we are looking good company to get good business so we can pass into the good through the roots. Thank you.
There's a question from Praveen Sahay. What is the contribution of reverse logistics repair and revenue? Is there anything like that?
We don't have that much. We don't do repair for other people. We do repair anything our customer requires because of their change in design or something. We don't have that much. We focus on the forward business.
There's a question.
I don't think there's anything like that. Continue.
Yeah. There is a question from Vineet Singh. When does company expect to achieve full capacity utilization that is nearly INR 400 crore revenue? What kind of working capital will be required for the same?
Working capital, we have a very good cash situation right now. I don't think so. Money going to be, as long as you maintain the EBITDA, money going to be plowing is correct. That is what it is. If I do - 1% EBITDA, I have to get more working capital. I don't see that much requirement right now because overnight not going to be INR 400 crore. Right now, let us see, we go 50% CAGR to 60% CAGR. By the time we need only additional 15%, 20% additional capacity need to infuse. The rest of money can plow back in and again.
Follow-up question from Vineet Singh is, are all PCBA manufactured in the U.S.?
PCBA manufactured in U.S. I did not follow the question, we do full box build, correct? U.S. company is separate and India company is separate. Maybe you can elaborate the question or we can take it next time.
I think he's trying to ask is the company only into assembly or also in the manufacturing of PCB?
All are same infrastructure. In U.S. or in India, we do complete box build. We do not make the PC board, though. Raw PC board we do not make. We make PC board assembly, and we do design, and we do full box build.
There's a question from Mr. Sridhar Jadhav. He's raised hand, he would like to ask a question. Sridhar, you can go ahead.
Yes, sir. Am I audible?
Yes.
Yes.
Sir, thank you for the opportunity and congratulations on good set of numbers. Just a couple of housekeeping questions. CapEx was supposed to be INR 90 odd crores, from IPO proceeds, and then cash balances are huge. When do we expect to incur complete CapEx?
Sneh, you want to take this?
Sure. Certainly, a couple of quarters down the line, that will be completed. As of now, couple of things are in progress, but we might not be able to disclose everything. Considering that, if you see just one example that we completed was installation of one assembly line. That CapEx part has already been taken care of. Down the line, six months, we'll have more deep roots into that.
Any tentative timeline you would want us to guide for full deployment of CapEx?
Probably next six months.
Okay. Sir, my next question is, what is the time for this complete order book execution of INR 135 odd crore?
I think, let me just add to here, Sneh. I know I'm going to give you a little vague answer, so that's why. When you see our last book also, when you got INR 650 depleted, we had newer INR 650 more. This INR 130 going to be stay always there. It's going to increase the baseline always. You know what I'm saying? Let's say INR 1,350 million right now we have. Next time call, we will have INR 2,000 million. You know what I'm saying?
How this EMS business works, you get order and you get keep adding more and more new blanket. In general, any orders is going to be only one-year contract maximum. Within a year, let's see, for this INR 135 crore, it will be done within one year. Then another INR 200 crore will be booked in next year or maybe more.
Okay, understood, sir. Basically the maximum time taken to complete the order would be less than 12 months.
That is the industry standard. Most of the people, except the defense. Even defense also, they have a seven years contract or five years contract, but they give you one year's visibility of an order.
Sir, my last question would be on, we have almost 40%, 45% of business coming from U.S. with new president elected like you mentioned, that Aimtron Corporation is merely a funnel to have a presence in a state-side and this company would kind of take a major expansion. Do you expect any impact per se on the business going forward from his policies or any other adverse implications on the business maybe in form of taxes or something like that?
Let me have this question answered by young man, Nirmal.
Actually, that's a very good question, this is one that Aimtron has spent a lot of time deliberating upon in terms of what our strategy would be once the election has concluded. All of our research shows and all of the president-elect's speech and his policies show that this is going to be very favorable for Aimtron in the long term. He is targeting very specifically China and Europe for higher tariffs, and that means that for low-cost solutions, especially outside of the North America region, India becomes the only option with the population to actually support the demands that Western countries have. This is something that Aimtron feels is going to be very positive for the group as a whole, and something that we feel will be even exceeding our expectations in terms of what our potential is. A very good question.
Thank you for asking.
That's all. I'll come back in queue.
Sridhar, thank you so much. I have to leave. If you want, maybe, Vinay, you can continue with Nirmal and Sneh. I got a-
Of course.
I have another call also, and we have to have another meeting with the customer. Everybody really enjoyed. Our journey doesn't stop here. We just started journey. You might have questions, you are most welcome to ask Vinay, you're most welcome to ask us, most welcome to visit our facility either in here or USA or India, anywhere. Again, this is two separate business. We would like to go forward with India entity in a more focus. That is our goal. With that said, I'm taking your permission, Vinay.
Sure, sir. We'll continue the Q&A with Sneh and Nirmal.
Thank you so much. Really appreciate.
We'll take the follow-up question from Prateek Chaudhary. Prateek, you can go ahead.
Hi, Sneh. As per our guidance, there will be a very significant uptick in our revenues in the second half. Do you expect our EBITDA margins to improve slightly going forward as our scale of operations increases?
It is going to be in line to what we have stated. In terms of revenue, we already have stated 40%-50% CAGR, and we are going to be in line with that. In terms of bottom line as well, it is going to be intact to what we have been maintaining in the past couple of years. We would be in the same range down the line.
Would your PAT margins be upwards of 15%?
As of now, we can say it's sustainable to what we are doing as of now.
At least the current margins will be sustainable, the one that you reported in the just results that you uploaded. Would they be sustainable?
Certainly. It will be nearby to that percentage only.
Okay. Any other developments which are taking place on maybe some sort of an M&A in the U.S. or any other new products that we may be eyeing, both in India and internationally that we haven't spoken about yet?
I think with time we'll keep you posted, but as of now to what we disclosed, one of the deals that we are working on for defense drone industry, around over $10 million worth of business in terms of dollar, $10 million, and probably executable into next two years of timeframe.
Okay. Thank you, Sneh. Thanks a lot.
Thank you. Just checking for any questions on the chat. There's a question from Chinmay Nema. "Can you provide a rough breakdown of the INR 100 odd crore of annual revenue on a product-wide basis? How scattered is it across products and how fungible are our lines?''
If you see our investor presentation, we already have shared the bifurcation where there are myriad of sectors like, say, IoT industry.
Okay. There's a question from Mr. Amit Jain. "Any plans to get into OSAT?" Nirmal, would you like to answer that? I think Sneh is-
We may have lost Sneh. He would be the better person to answer this question. Let me see if I can get in touch with him and see if he can reconnect.
Hello.
Yeah. Hi, Sneh. You are-
Yeah, sorry. Some internet issues. Sorry for the inconvenience. Various-
There's a question from Amit Jain. Any plan to get into OSAT?
Working on backward integration as well as forward. Probably down the line, we will just see to it once we have something fruitful on that front.
Sure. There's a question from Divyansh Gupta. The auto contract that we have won, is it T1 level engagement or T2, T3, and what's the scale of the engagement?
It's always a combination of all, like T1, T2, and T3. You can say roughly around about, say, 40, 50% range approximately is in T1, and then partial combination of T2 and T3. Certainly, we can say it's a combination of all three.
Okay. There's a question from Suman Kumar. India has been undergoing huge transformation as far as semiconductor landscape is concerned. What kind of opportunity does it hold for Aimtron from one to three-year perspective and longer?
Certainly, we are working on some routes on that front. I think it will be very initial to say something as of now. Yes, again, if we gonna enter, it's again going to be a niche market segment, just like we have it for EMS. It is going to be the same business model. That is something that we are looking forward. As of now, to what everyone has chimed in, it's kind of again, a low cost margin kind of business, which we don't want to. As of now, we are in wait and watch mode because four companies are getting established at Gujarat location. Where we already have existence and presence and a good relationship over there with the administrative support and staff.
As of now, we are just seeing to it, and we are working on something where we can just see on how we can work out on high-end kind of work. Even if we gonna enter OSAT or ATMP or something kind of.
There's a question from Venkatesh Nagaraj. Can you share about the skill availability for manufacturing devices and the typical qualification of employees that you're hiring?
Best part is, we have one called Aimtron Foundation, where Mukesh has a zeal of skill development. We do train our youth, in the nearby locations in and around Gujarat, and couple of them in Bangalore as well. We do affiliation with them, and then we do train it with the help of our experienced trainer. Couple of them are IPC certified as well. Just an example, say our production manager, he's IPC certified. Our quality manager, he's IPC certified. We do have IPC certified team with us who train them. Based on that, there are several parameters which are taken into consideration. To give you a glimpse, last year, we stood second in terms of soldering championship conducted and first in Bangalore. That's the level of art skills that we have in-house in terms of manpower.
Okay. Anybody else who wishes to ask a question may use the option of raise hand. Since there are no further questions, we shall bring this con call to an end. Would you like to give any closing remarks before we end the call?
Nirmal?
I think this has been a very fruitful conversation with everyone. I do appreciate all of your patience in dealing with our fluctuating schedules as we are preparing for Electronica. It was very nice meeting everyone, and I look forward to continuing the conversation at our next call. Very much thank you to the team for ensuring that this call is running smoothly. Thank you, everyone.
Thank you. Thank you to all the participants for joining on the call, thank you to the management team for giving us their time. This brings us to the end of today's call. You may all disconnect now. Thank you.
Thank you, everyone.