Ladies and gentlemen, good day and welcome to the Amber Enterprises India Limited Q3 and 9 months FY26 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing * then 0 on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Jasbir Singh, Executive Chairman, CEO, and Whole Time Director of Amber Enterprises India Limited. Thank you, and over to you, sir.
Hello, good morning everybody. On the call today, I'm joined by Mr. Daljit Singh, our MD, Mr. Sudhir Goyal, Group CFO, and Mr. Sanjay Kumar Arora, Whole Time Director of IL JIN Electronics. We have uploaded our quarterly presentation on the exchanges, and I hope everyone had an opportunity to go through the same. We extend our appreciation to the Honorable Finance Minister for the enhanced outlay of INR 40,000 crore towards the ECMS scheme. This scheme will serve as a catalyst for accelerating the growth of a robust electronics ecosystem in our country and creating significant employment opportunities. Further, we extend our sincere gratitude to the Ministry of Electronics, MeitY, for granting approval under the ECMS scheme for Ascent-K Circuits HDI PCB application and Shogini Technoarts' Multilayer PCB application. These approvals are in addition to the earlier clearance received for Ascent's Multilayer PCB application.
The expansion reinforces our long-term commitment to strengthening India's Atmanirbhar Bharat in the electronics manufacturing ecosystem. We are pleased to share that land allotment of 16 acres has been secured in Jewar near New Noida Airport for Ascent-K Circuits to establish state-of-the-art manufacturing facilities for HDI PCBs, and we look forward to shortly doing groundbreaking to commence construction. Additionally, Amber Enterprises has been allotted 100 acres of land in Jewar near New Noida Airport, enabling the company's future expansion plans. We extend our gratitude to the Government of Uttar Pradesh for fast cabinet approvals of both projects and timely allotment of land parcels. Let me now take you through the quarterly performance. Consolidated revenue for the quarter stood at INR 2,943 crores, reflecting a growth of 38% over the previous year.
Despite weak underlying room AC industry, our operating EBITDA for the quarter stood at INR 247 crores, growth of 53%. PAT, before exceptional one-time impairment of Shivalik, grew by 128% to INR 84 crores. Let me now take you through the divisional performances. Firstly, on the Consumer Durable Division. The Consumer Durable Division recorded revenue growth of 27% in Q3 FY26 and EBITDA growth of 22%. The growth is driven by the diversified product offering, adding wallet share within existing customers, and expanding product portfolio. The room AC industry has transitioned to the revised higher efficiency BEE star rating norms effective 1 January 2026, marking a key shift toward enhanced energy performance and sustainable cooling solutions. The quarter witnessed a channel filling ahead of BEE rating upgrade. We continue to deepen and strengthen our customer base, both in room AC and commercial AC, during this quarter.
We are cautious about sharp surge in commodity costs and currency depreciation. While we are navigating these challenges, the pass-through will happen with a quarterly lag, as we have seen earlier. On the outlook, we believe the industry will be flattish this year, while we continue to remain optimistic that this division should grow in the range of 13%-15% for the full-year basis. Coming to the electronics division, IL JIN purchased an 80% stake in Shogini Technoarts, a Pune-based printed circuit boards manufacturer with capabilities across single-sided, multilayer, and flex PCBs. Shogini brings a sizable 450,000 square meter capacity boost and broadens division reach to a diverse customer base spanning across automotive, medical, industrial, power, and other segments.
Coupled with Ascent's expansion, JV with Korea Circuit and Shogini lays a strong foundation to emerge as India's most comprehensive printed circuit board manufacturer, offering solutions from single-layer PCBs to advanced HDI products across the value chain. Further, strengthening its position in the high-value industrial automation segment, IL JIN has increased its holding in Unitronics, Israel, taking its current stake to 45.5% now. Moving to the performance, the electronics division continues its growth momentum with revenue of INR 845 crore, reflecting a growth of 79% driven by printed circuit board assembly vertical (PCBA), bare PCB board (PCB), and new additions in power electronics and automation electronics. The division recorded an EBITDA of INR 88 crore, recording a growth of 157% despite the margin pressure in the bare PCB vertical.
The PCB vertical continues to face headwinds of CCL and gold price spikes, and as a tier 2 B2B supplier, our ability to pass on comes with an inherent lag of almost 1-1.5 quarters, and we are confident to pass on these to our customers. Looking ahead, driven by strong growth momentum and a portfolio of high-value, margin-accretive products, we expect FY27 full-year EBITDA margins to be in double-digit numbers. The electronics division, which began to address the shift of fixed-speed AC to inverter AC in 2018, is now evolving into a full-stack EMS company. It features PCB assemblies serving diverse customer segments and comprehensive bare printed circuit board solutions and box build solutions for mobile wearable, power electronics, and industrial automation products. Now coming to the third division, Railway Subsystems and Defense.
The recorded CAPEX allocation in the railway budget and the announcement of 7 high-speed rail corridors position India firmly on the path towards faster and future-ready mobility, which augurs well for the sector. On the performance, the division registered a growth of 20% driven by railways, metro projects, and defense solutions. On the expansion front, the construction is progressing well for Sidwal's greenfield facility for HVAC products, pantries, doors, and gangways, and the facility is under the machine installation phase now, and commercial production is expected to begin in Q4 FY26. With regards to Yujin Machinery joint venture for pantographs, brakes, driving gear, and couplers, this facility is now ready. Currently, the product development is underway, and commercial production is expected to commence from the second half of FY27 following requested RDSO approvals.
Special cooling products for defense applications are also gaining traction and are expected to contribute meaningfully in the coming years. Backed by a strong order book visibility of INR 2,600 crore+ and a product portfolio expansion, we remain optimistic of doubling the division's revenue over the next two financial years. During the quarter, one-time exceptional impairment loss has been recognized for our investment in Shivalik, through which we had invested in Titagarh Firema Italy. The Shivalik investment was done primarily with two objectives: one, to have a strategic association with the leading rolling stock manufacturer, Titagarh. Together, we have been actively contributing to some of the country's most prominent mobility initiatives, including key metro projects and Vande Bharat.
Our collaboration with Titagarh has translated into business visibility worth about INR 700 crores for heating, ventilation, and air conditioning products, as well as new products which were launched, doors and gangways, and which shall continue to grow in the future as well. Secondly, the objective was to open export opportunities for Sidwal through an Italy venture. However, the Titagarh Firema turnaround did not materialize in the manner we had envisioned due to the operational and other challenges. And to curtail future losses, one-time exceptional impairment loss has been recognized during this quarter. Now let me hand over to Sudhir Goyal, our CFO, for financial highlights. Thank you.
Yeah, hi. Good morning everyone. Let me first take you through the consolidated financial highlights. For Q3 financial year 2026, we clocked a consolidated revenue of INR 2,943 crores, up by 38% over last year. We recorded quarterly operating EBITDA of INR 247 crores, a growth of 53% year-over-year. For clarification, operating EBITDA is before the impact of ESOP expenses and other non-operating income and expenses. Profit for the quarter stood at INR 84 crores before the impairment of investment in Shivalik of INR 94 crores, reflecting a growth of 128%. However, PAT is after considering one provision of INR 9 crores pertaining to new labor codes. Let me take you through the nine months financial year 2026 financial performance at the consolidated level. We recorded a consolidated revenue of INR 8,039 crores, a growth of 29% over last year.
Operating EBITDA of INR 608 crore resulted in a growth of 26% year-on-year and profit before the impairment loss of INR 158 crore, reflecting a growth of 19%. Now let me take you through the divisional performance overview. Firstly, revenue and operating EBITDA details of the divisional performance are not comparable with the published segmental results. Starting with the Consumer Durable Division, the Consumer Durable Division reported a revenue of INR 1,971 crore in Q3 financial year 2026 compared to INR 1,555 crore in Q3 financial year 2025, reflecting a growth of 27% year-on-year. Operating EBITDA for the quarter increased by 22% year-on-year and stood at INR 141 crore compared to INR 116 crore in Q3 financial year 2025.
Coming to the electronic division performance, the revenue for the quarter increased to INR 845 crores in Q3 financial year 2026 compared to INR 472 crores in the same quarter last year, reflecting a growth of 79% year-on-year driven by PCBA vertical, bare PCB, and new additions. I would like to emphasize that we acquired Shogini on the 1st of December, and the consolidated P&L includes results for one month only in respect of Shogini. Operating EBITDA for the quarter recorded a growth of 157% year-on-year and stood at INR 88 crores compared to INR 34 crores in Q3 financial year 2025.
Moving to the railway subsystem and defense divisional performance, the revenue for the quarter increased to INR 127 crores compared to INR 106 crores in Q3 financial year 2025, reflecting a growth of 20% year-on-year and the resulting operating EBITDA of INR 18 crores, a growth of 49% year-on-year. With a robust order book and an expanding product portfolio, we remain confident in doubling the divisional revenue over the next two financial years. On the balance sheet front, IL JIN Electronics has successfully concluded fundraising with the entire INR 1,750 crores received from market investors. As we embark on a growth path in our electronic division, we stand on the strength of a robust balance sheet. Thank you. Now I request the operator to please open the floor for the Q&A.
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. In order to ensure that the management is able to address questions from all the participants in the conference call, please limit your questions to two per participant. We will wait for the question queue to assemble. The first question is from the line of Natasha Jain from Philip Capital. Please go ahead.
Thank you, and good morning, team. Congratulations on a very good set of numbers. So my first question is on RAC. Given that there was a push in the third quarter on account of DEE, and then there was low-cost inventory, how should we see the fourth quarter from a very near-term perspective? And then calendar 2026, given that there is a high amount of inflation and the entire GST benefit probably is written off, and the cost could be even higher than that. So how should we read calendar 2026 from an RAC point of view?
Good morning, Natasha. See, this is how we look at the room AC sector in the country. As an industry, we feel that if you see quarter one was minus five%-10%, then quarter two was minus 35%. We saw a little growth in the industry in quarter three with the primary sales moving ahead in lieu of the energy rating. We feel that the industry should be flattish this year, whereas we have again and again maintained our guidance, and we are hopeful to deliver about 14%-15% kind of growth. Let me give you a little background on the air conditioning industry, Natasha, that in the last 25 years, we have seen seven bad seasons in this industry, and two COVID waves hit us both in March. Nine bad years for the industry in the last 25 years.
25 years back, the market size was 500,000 numbers, just 500,000 numbers. And now we are at 14-15 million numbers, 1.4-1.5 crore numbers. So I expect that in the future, also, these kinds of issues will keep on coming on the currency and commodity issues, big table revisions. But looking into the households, looking into the per capita income growth, looking into the adequacy of power, and the desire for comfort living, I believe that this industry should grow in the range of 12%-15%, at least for the next four to five years. And thereon, once we cross $4,000 per capita income, this will further grow at the 20%-25% range. This has been historic in all the countries.
We believe that on the calendar year, on a CY26 basis, the industry should be in the range of at least 12%-15% growth path.
Sir, this would be value growth that you're talking about or just RAC volume?
I'm talking about volume growth. Value may be a little higher because of a higher increase in the cost.
Understood. Sir, my second question is, very recently, Mitsubishi Electric had announced that they are doing INR 2,100 crore CapEx and backward integrating into RAC in compressors. Now, given that all Japanese and Korean brands are our prime customers, I just want to understand how should we read this from Amber's point of view because I believe Mitsubishi is one of our biggest clients. Does it entail any risk for us?
No, there is no risk, Natasha, since you have all seen that in 2021, when PLI got announced, six major brands announced, which are all our customers, their own factories. I mean, markets did assume that Amber will not do well, and our stock price was hit unnecessarily. But we could see that Amber moved into a different category. We started offering our products in the components shape, and we kept on growing more than the industry space. So this Mitsubishi Electric, yes, it's our client. This was told by them two years back, and we have already gone into supplying the components for the factory which was inaugurated. We are very much part of this, and our association continues from here on with Mitsubishi Electric Group.
Got it. Great to hear that, sir. Thank you and all the very best.
Thank you, Natasha.
Thank you. The next question is from the line of Dhruv Jain from Ambit Capital. Please go ahead.
Thank you so much for the opportunity, and congratulations, team, for a very good set of numbers. So my first question is an extension of what you said, right? So you mentioned that the industry should grow at 12%-15% CAGR going forward. And with the brands, I mean, with the PLI now getting over, and over the last 4 or 5 years, we've seen that the brands' share of overall manufacturing has gone up. Should we now look at the EMS share given the fact that PLI is getting over? And for growth, for you guys, should it be an AZ-plus industry because you gained EMS gains share?
Dhruv, as Amber's B2B capability on components and on the finished goods capability side, we have seen this kind of shift in-house, outsourcing three times now in the last 25 years. Whenever this kind of shift has happened, we've moved in tandem to the industries or our brands or our customers' policy change. We have established 24 factories now in the vicinity of two customers. So any customer who would like to manufacture on their own, we are very happy to supply them the components. I'll just give you an example of automobile in a true reference. If Toyota puts up a factory, they will do engines on their own, car chassis on their own, car bodies on their own, and assembly line on their own. But will Toyota ever produce tires for their own, audiovisual systems, glasses, seats, bumpers?
Similarly, in our category also, whenever a brand puts up a factory, they do some kind of backward integration plus assembly and plus labs, but other components are required to be supplied just in time by suppliers like us. We have a very comprehensive solution for the customers. If they want to buy full boxes, we can give full boxes. If they want to buy only components, we are happy to supply components only. And that's what we have done in the last 25 years. Moving forward, this trend will continue. We don't control the change of policy of a customer, whether they want to insource or outsource. We are there as a backbone of them as a supply chain solution provider. Plus, what we are doing over and above is we are expanding our product portfolio into the commercial air conditioning space.
We have already successfully launched our Tower series, Cassette series, Ductable series from 3 tons to 17.5 tons. We are also bringing some new products as we go ahead. That is over and above. Plus to this is our non-room AC components, which we deliver as a solution for refrigerator, washing machine, microwave, and then, etc. All these three things put together, I think we will continue to outnumber the industry. Maybe in a year, two years' time, three years' time, we may move in tandem to the industry. But eventually, we have seen that we have surpassed the industry by the numbers, good numbers every time.
Fair enough. So my second question is on finance cost, right? If you could just help us understand the reason for this shift.
Yes. So hi, Dhruv. This is Sudhir. So finance cost has increased because of you know that there was some change happening in the energy rating, and we have built some inventory at a lower cost in terms of copper as well as compressors, which has increased the cost of finance costs. Plus, we have acquired Shogini on the 1st of December, and we have paid around INR 575 crore payout to acquire that entity. So finance cost includes that as well. And also, we increased our stake in Unitronics post our first acquisition on the 9th of October when we acquired 40.2%, and now we are at 45.5%. So that has led to an increase in finance cost. But you'll see that it will start coming down in the current quarter.
One last question. If you could just give the numbers of Ascent, Shogini.
Dhruv, since you know, Unitronics is a listed entity in Israel, and their results have not yet come out. So it is difficult for us to give you, in the electronic division, entity-wise numbers because that will be insider information, and it's not wise to give you that number. We'll give you once those numbers are out individually.
Okay, sir. Thank you so much.
Thank you.
Thank you. The next question is from the line of Sonali Sangramkar from Jefferies. Please go ahead.
Thank you for the opportunity, and congratulations to the team for a great set of numbers. My first question is, the consumer durable division, with a growth of about 26% year-on-year on sales, is far ahead of most of the peers who have reported, including the branded or the contract manufacturing. It's a very positive thing, but would you like to help us understand what drove this?
Well, Sonali, a couple of things. We've increased our wallet share in some customers, and our non-AC components are actually paying dividends now, and plus the new product categories which we have launched. So all put together is delivering this number. I think the team has worked very diligently on all fronts to increase the product portfolio, to increase the wallet share in existing customers, to work on non-AC components where injection molding has done pretty well. We have started supplying to customers in the telecom sector and to energy meter customers. And plus, of course, the refrigerator and washing machine and microwave-owned customers are also gaining traction. And our ductable ranges of commercial ACs are also growing. So all put together has led to this kind of number.
Great to hear that. Just an extension to this on the AC industry. After the liquidation that we saw in December, what is the current inventory level, and are there any initial trends you fathom of the upcoming summer?
Well, inventory is varying from customer to customer, I think. But overall, at an industry level, if we sum it up, I think the industry has reached almost a normalized inventory level at the moment. So if there's a spike in summer, we will see good summers ahead.
So great to hear that. So my second question is regarding the CapEx outlook for 2026 and also 2027, if you could help. And how should we look at the journey of Shivalik from here on now that we have taken the impairment loss?
Yeah. Hi, Sonali. This is Sudhir. So current year, CapEx, we are expecting it should be around INR 800 crore. And for the next year, the expenditure, which will be capitalized, should be around INR 1,100 crore-INR 1,200 crore. And for Shivalik, now we have explained that there will not be any further loss in the Shivalik because we have taken a complete impairment of the investment. And we don't see now anything coming from the Shivalik, and we'll be focusing on our Indian operations and expanding the same.
Great to hear that. All the best to the team, and congratulations once again.
Thank you.
Thank you. I request all participants please restrict your questions to two questions per participant. For more questions, please rejoin the queue. The next question is from the line of Indrajit Agarwal from CLSA. Please go ahead.
Hi. Thanks for the opportunity. Two questions. First, when we look at your guidance of 13%-15%, that implies a mid-single-digit kind of growth for RACs in the fourth quarter. So would you still think that the industry would actually end up being flattish or negative in the fourth quarter as a result?
Well, I mean, I think if you sum it up, Inderjeet, for all the four quarters, quarter one, I explained it was -5; quarter two was -35. Quarter three has been a little slightly above zero. It's like a 3.5 number. So quarter four should be flattish, at least. I mean, even if they do well, overall, it will come to be a flattish number. That is our estimate looking into it.
Sure. Thank you. And sorry, please say.
I believe that I have always guided that in air conditioners, due to the heat waves, the sales move up one month ahead or it gets postponed. So I would urge everybody not to look at the RAC sector on a quarterly basis rather than on a complete financial year basis. I think that will be a relevant way to look at the RAC sector stocks.
Sure. This is helpful. Second, Sudhir talked about the inventory buildup of copper and compressors ahead of the label change. I just want to understand, what does the regulation state? Does it state that post-31st December, you cannot sell to the brands or retailers, or the retailers cannot sell? I mean, still, when can we manufacture old BEE norm ACs?
Yeah. So basically, the norm says that the manufacturing cannot happen for the old products post-1st January, whereas the manufacturer can supply the old inventory for three months. Coming to the retail part, the retailers are allowed to sell the old inventory for six months. So that is how the government's norms are. So we cannot manufacture. So first, before the 31st, we have to stop all the old models.
Sure. So the inventory that we have built up will be utilized in the next months. We will see that the inventory drawdown when we see March quarter results. Is that understanding correct?
That's right. Yeah. Yeah. Yeah. Especially on the primary things.
Sure. Thank you so much.
Thank you. The next question is from the line of Pulkit from Goldman Sachs. Please go ahead.
Sir, thank you for taking my question, sir. Two questions. First, could you give a rough breakdown of consumer durables between AC components and non-AC components?
Right now, it varies, Pulkit, from quarter to quarter. This time, this quarter, it has been about 60/40. 60% has been finished goods, and 40% have been components.
Sir, within components, AC and non-AC?
Now, almost, we have reached a 50/50 split.
Okay. It's 60/20/20 for the quarter. Okay. That's useful.
But it keeps on varying. Don't make a generic view about that it will continue. Every quarter, it changes.
Sure. Sure. Yeah. So my second question is, I remember this was maybe two or three years back where we had seen some commodity price inflation. And while theoretically, obviously, it's a full pass-through business, but we've seen whenever brands are under pressure, there is some pressure felt by OEMs also. Is it fair to assume that consumer durables, especially air conditioner margins, could be under pressure next year given the magnitude of commodity price increase that we have seen? Or do you think it's going to be a complete pass-through, though with a lag of one quarter?
I think from a B2B company's perspective, it will happen with a quarter lag. Whereas I think for our customers, because the BEE table has changed, it's an opportunity for them to change maybe from February or March onwards.
But you don't think there's going to be any margin impact for you because of the commodity price inflation?
There will be a slight margin impact, but not a very big impact for us.
Okay, sir. That's useful. Thank you so much.
Thank you. The next question is from the line of Tanesha from Dam Capital. Please go ahead.
Hi, sir. Good morning. Congratulations on a great set of numbers. Sir, on the electronics piece, right, I mean, we've acquired PowerOne now and even Unitronics. If you could just spend a couple of minutes here on how we're looking to scale these businesses up because Unitronics currently is not present in India. What are our plans for scaling these businesses up, and to what opportunity can we possibly take it to?
See, PowerOne and Unitronics both are in the industrial power electronics space. Unitronics, we feel that there is a geography expansion scope to bring those products to India. Second is the product expansion space. They have not manufactured any PLCs, HMIs used for the heating, ventilation, air conditioning applications. So after acquisition, we've already sent them samples, and the team has visited India. And now, they have started their R&D work. I think within 15-18 months' time, we are hopeful that we will add a new product category on the heating, ventilation, which will be launched worldwide because Unitronics, almost 55%-60% sales come from the U.S. markets, and the remaining comes from the European markets. So India will be their expansion on geography. Second will be the product expansion strategy.
And third will be, of course, due to Amber's balance sheet, there will be some purchase leverage, which will come. And fourth is the backward integration. Unitronics, they only assemble the products because they are the designers of the products. They develop the software, and they assemble the products in Israel. But they buy the printed circuit boards from outside. They buy printed circuit board assemblies from outside, even the injection molding required from outside. So that is what we are exploring right now gradually, that the growth of Unitronics can be catered by India by supplying these components as a backward integration. So these are the four things as a synergy which we are looking into the Unitronics. Coming to PowerOne products, which are UPS, solar inverters, both off-grid, on-grid, and battery energy storage systems and EV chargers. So it's both a B2B and B2G business.
They apply to intenders. They apply directly to OEMs. What we are doing right now is, again, a similar case. They were assembling, not manufacturing components. There's a scope of IL JIN and Amber put together supplying the boxes, the sheet metal boxes, injection molding components, and PCB and PCBs. That is the first thing. Second is purchase leverage. They are largely south-based. We are now bringing them to north because it's voluminous products. We are planning to expand in the existing facility as a brownfield expansion, one of their facilities in Noida, for catering to the clients from Noida. That is what PowerOne is. But the TAM of both the products, PowerOne, the audience of PowerOne products, and Unitronics products, is almost about the current level is $6.5 billion. I'll just give you a heads-up on what we are doing in electronics.
PCBA, we are doing printed circuit boards. We are doing power electronics and industrial automation. If you sum it up, the TAM of all the four today, out of $155 billion electronics getting consumed in the country at the moment, the TAM of these four things is about $16-$17 billion. Now, where is this $155 billion going ahead in the next five years? As a business as usual, the growth is expected to be about $350-odd billion, whereas the government of India has taken a very good target of touching $500 billion. So you can imagine, if we concentrate on India as an operation, it's a good place to be in. And these are all value-added capabilities which we have added. So in value-added, PCBA is volume-based things. PCB and power electronics and Unitronics are all value-based things. So as a B2B supplier, you have to balance volume and value.
Volume will give you purchase leverage and scale, and value-based proposition will give you bottom line and also stickiness and entry barriers. That is what we are trying to do in the electronics division.
Absolutely, sir. Thank you for that explanation. And my second question is, Sudhir, you mentioned that we do around 1,100-1,200.
Thank you, Mr. Shah. But can you please rejoin the queue for more questions as there are more participants left in the queue?
10 more questions.
Thank you. The next question is from the line of Praveen Sahai from PL Capital. Please go ahead.
Yeah. Thank you for the opportunity. My first question is related to the electronics segment. Out of 79% of growth, if you can give some color on how much is organic and how much is inorganic growth in that?
In nine months' financial, about 12% is the inorganic growth contribution. Out of 2,100-odd numbers, almost about INR 240 crore is inorganic, and the rest is organic.
Okay. And the second question is related to this, Sidwal. Out of this time, 20% of growth, and also, you had said all the three segments: railway, metro, and defense contribution. So how is the defense contribution in the growth, as well as if you can give the order book bifurcation of INR 2,600 crore, how much is the defense?
Defense, we started our endeavor in defense vertical about four years back, and we are seeing some green shoots right now. Earlier, we were doing about INR 4 crore-INR 7 crores in Sidwal for defense applications. But this year, we expect that we will do about INR 50-odd crores in the defense order book. But as far as the INR 2,600 crore is concerned, I think almost about railway contribution will be about 46%. Metro is about 35%, and defense will be about 10% at the moment. But what we are doing is we have been visited by very many defense customers, and that continues. We hope that in the next two financial years, defense vertical will start contributing at least 20% in the Sidwal's books.
Thank you, sir, and all the best.
Thank you.
Thank you. The next question is from the line of Keshav Lahoti from HDFC Securities. Please go ahead.
Thank you for the opportunity. Sir, as you have highlighted, 9 months inorganic growth. Possibly, can you highlight the same for Q3? And lastly, I just want to understand what is the impact of the inorganic on the margin front? What would be possibly the organic and inorganic? Because your inorganic is a high-margin business. And electronics, we have seen hitting double-digit margins, which we were supposed to hit FY27 slightly ahead of the target. So what is the big-margin guidance for FY27 for the electronics division?
Well, we've guided earlier also, and we'll reiterate that we should be hitting a double-digit number in FY27 for the electronics division. This is the first quarter ever where we have seen about 10.5% EBITDA for our electronics division. Both volume and value play could be exhibited here. But as our CFO told you, because Unitronics is a listed entity, we'll not be able to give you a breakup of this. Once they declare the result, definitely, we can give you the numbers on all the subsidiaries.
Understood. Got it. Thank you. One last question from my side. As you have highlighted, normally, copper and PCB prices hit there. Can you please quantify what would be the impact of margin because of this in this quarter, and when will it get normalized?
Well, in the consumer durable division, we think that it will be maybe 0.25% kind of a 0.25%-0.5%. But which will be definitely we will change the costing. And as we have done in the past, that happens at a quarterly lag that we come back. On the CCL front, only in the PCB sector, not in PCBA, not in the Power Electronics and other places, but only in the PCBA, right now, there's an impact of about 5% on the pricing. But the customers have started giving the revised approvals, and we are hopeful that this will be completely passed on after the next quarter.
Got it. That is helpful. Thank you.
Thank you. The next question is from the line of Rahul Agarwal from Ikigai Asset. Please go ahead.
Hi, sir. Good morning. Thanks for the opportunity.
Good morning.
Sir, given the constraints on asking questions, I'll just summarize everything what I wanted to know in one question. We have different projects going on in electronics. We've not discussed KCC in detail on this call apart from the advances, CapEx, and stuff like that. So if you just summarize for us across three segments, the project status in terms of execution, how do you think you'll spend money over the next two years? What are the timelines for these projects? And for all three segments, if you just summarize the growth outlook for fiscal 2027, 2028, just ballpark numbers and margins, that will really help to basically get a full understanding on the entire company. That's the only question I have. Thank you.
So I'll give you a detailed analysis on the ongoing projects in the electronics sector. The first expansion we are doing is in Khosur, in Tamil Nadu, where the groundbreaking ceremony happened. It was blessed by the Chief Minister of Tamil Nadu for the groundbreaking. Construction is moving perfectly on time, as guided. We should be starting our trial production in September of 2026. By January 2027, we should be coming in the mass production scale. That is on the Khosur side. There is an investment coming up for total investment. Land we already acquired last year. The major building part will come now. I think on the complete CapEx, close to about INR 700 crore-INR 800 crore will come this year on the machine building, plus the plant and machinery. Now, coming to Korea Circuits, the KCC, which has been allotted we have been allotted the land.
We have deposited 10% of the land, and they have yet to give us the possession. The allotment has been done. I think coming week, we should be able to get the possession. Then that's when by March, we expect that we should be able to do the groundbreaking, March or April, as our maps get approved. Total 15 months' time for the construction. The first phase of investment is INR 1,200 crore, and it's a 70/30 JV. So we are expecting about 60/40 or 70/30 kind of a ratio for equity and debt. That's where our partners are also going to infuse funds. And after 15 months, there will be a trial production period of 3 months. So you can imagine that after 18 months, we will start the commercial production of that. The offtake agreement has already been signed.
The first two years, complete capacity offtake will be done by KCC themselves. So we are not bothered about the top line as soon as we start the project. After that, of course, there will be customers, and the ecosystem of complete semiconductor and OSAT businesses are getting established in the country. So there will be both domestic and export. Then there is another expansion going on in Pune. For organic expansion, we bought adjoining land in Pune, and that's the construction going on. I believe the construction will be over in March or April. And May will be when it will start. And that is on the electronics side. These are three ongoing projects on electronics. The fourth investment which we are doing is in Sidwal, which is almost the building is ready.
Machine installation is happening in the greenfield facility for doors, gangways, and pantries, and heating, ventilation, air conditioning. I expect that by March, the trial production will start. April or May will be the commercial production start for that plant. For Yujin, the factory is already done. Now, we have applied to RDSO for requisite approvals. Because these are all safety products, it will take time for approvals. We expect that in H2 of the next financial year, we should be able to do the trial production. In quarter four, I think the commercial production will also start. These are the status of all the projects going on.
Would you like to summarize the guidance on growth and margins, just medium term?
Well, I think all the divisions are doing pretty good. I believe, as we have already guided, that in consumer durable, we expect to do about 15% kind of growth despite markets being flattish. Electronics is doing pretty good. All the divisions are doing very good. We expect that it will be a good growth story for next year also because of all the projects adding up. In Sidwal, we are on a good growth path. I believe we should see somewhere about 40% growth kind of story in Sidwal next year itself. We were guided, and we maintain our guidance that we will reach a number of doubling the revenue of Sidwal in the next two financial years.
Thank you. Thank you so much, Jasbir. Best wishes for the rest of the year.
Thank you.
Thank you. The next question is from the line of Sameet Sinha from McGuire Capital. Please go ahead.
Yes. Thank you. Jaspreet, as you were thanking the finance minister, I was hoping to hear about the 20-year moratorium on taxes for the data center industry and that you would have your products ready. But in the context that the defense sector took you, let's say, 4 years to get up to INR 50 crore, can you kind of give a sense of where the data center products, how could that progress? And is that also going to take 4 or 5 years to get there, or it could be much faster?
Well, I think that's a great announcement done in this budget, which it was a surprise for all of us. So we were very excited to hear that. I think it will take about 3-4 years for companies to shift their data centers here and take a leverage of this incentive scheme, which the Government of India has given for 20 years. But it is positive for companies like us because we've already developed our products of in-row and in-rack cooling products. Liquid cooling and immersive cooling is under development at the moment, which we feel that it will be developed by the next 12 months' time period. And that's where we'll do the kind of trial productions. But in the in-row and in-rack, we have cracked 2 good customers.
They gave us a very small share of business for the first year, which was about 5%-7% of their requirement. But now, next year, we expect a little to grow a little bit bigger. So to summarize your question, I think somewhere about the third year, we should see good traction on the data center in Sidwal coming up.
Got it. Okay. The second question is, obviously, the story of commodity prices going up and down has a big impact. When do you think that that ecosystem develops in India with CCL and other products, which will kind of give you that visibility and probably pricing integrity as you plan your business? How long will that take?
The Indian government has done a great job as a rule of physics first to bring assembly business. 7 years back, we were not even assembling our phones here. Now we have seen, because of PLI, we are exporting $ billions of phones outside India. Now, the second phase, they have come up with a component scheme. The third phase will be the raw material like CCLs and glass fiber and other raw materials required for the components. I believe we have already got announcements of 2 companies making CCL. We at Amber are also right now exploring some joint ventures for the CCL, which may take about a year from now. But we would like to finally because we are coming up with a big capacity on the PCB side, we would like to add that going forward, maybe in 2-3 years' time.
But overall, if I see once the component ecosystem, semiconductor ecosystem, assembly ecosystem starts building up in the country, automatically, the raw material supply base will continue. But from my point of view, personally, if I see this is my personal opinion, I believe in 3-4 years from now, we can see a good component ecosystem getting developed for raw materials in India. And that will still I mean, but the issue of commodity prices will still be there. We'll take care of only on the currency side. Right now, for the air conditioning industry, we have started buying copper tube from India. Mettube has put up facilities. There are other companies who have put up facilities. But the LME fluctuates. That's international fluctuations.
Got it. Thank you very much.
Thank you. A request to all participants: please restrict your question to one per participant. The next question is from the line of Nirransh Jain from BNP Paribas. Please go ahead.
Yeah, hi, sir. Firstly, congratulations on a very good quarter. Sir, my question is related to the CapEx announcement. So in a recent exchange notification, we have mentioned that for this 100 acres of land, we'll be doing the INR 6,800 crore worth of investment for two manufacturing facilities. So now, since we know the details on the Korea Circuit with the INR 3,200 crore CapEx, may we know the details of the balance figure, around INR 3,600 crore, what our plans are for there? I mean, of course, this would be the overall period of four or five years, but any broader sense on where this will go into. And secondly, I also want to check on Shogini since we have got an ECMS approval, and the slide also mentioned about INR 500 crore worth of investment outlay. So what's the timelines for this expansion there?
Okay. So on the YEIDA front, first of all, I would like to tell all the participants that the expansion which we have received, we will be getting two sets of incentives: one from the ECMS scheme on the HDI, which is about 48%, and the second is from the Government of UP, which is about 42%. Now, 42% is minus the land and building, plant, and machinery. 48% is only on the plant and machinery. So net CapEx, which will eventually be happening, will be much lesser than what we are putting up in the initial phase. So please look into the net CapEx kind of thing. Initially, yes, we will have to do CapEx, but these are very good incentive schemes which both central as well as the state governments have given.
Secondly, we will be getting about 30% top-up on the central scheme incentive by the UP government. But everything will happen after the fifth year, after we complete the whole INR 3,200 crore expansion. So similarly, the scheme is very long. The scheme is about a 7- or 8-year scheme. So you have to do the CapEx over the period of the scheme. And that's how we are distributed. But on the Korea Circuit, it will happen earlier. It will happen in 3-4 years' time in the phases. As we explained, that first phase will be INR 1,200 crores. As far as Shogini is concerned, it is INR 500 crore of application. And we have 4-5 years to do that number for that. The eligibility is 4-5 years. So at the moment, we are not anticipating any big CapEx.
It's about, I think, INR 55-60 crore CapEx, which we'll be doing in the coming financial year. That's all we have planned for Shogini at the moment.
Sure, sir. Sir, and secondly, I also want to check on Power One and Unitronics. So these are already very high-margin accredited businesses, already operating at roughly 28% for Unitronics. So with your plans for further backward integration, we'll be integrating our PCB and PCB assembly solutions. Do you think there is further scope of margin expansion into these businesses?
Well, it varies. I mean, I think 28% was in one of the quarters. In another quarter, there was 22%, depending on which geography is selling what products. But on average, it is 24%-25% on a maintainable basis. At the moment, I'm not anticipating we are going a little slow because this is our first full acquisition outside India. I believe our team is already there from India for our purchase leverage project task force formation. And we believe that it will take about a year or a year and a half for us to demonstrate purchase leverage capabilities coming on the table because of Amber and also because of the backward integration. But the answer is yes, there is a possibility of margin expansion. And that's both because of the purchase leverage as well as because of the new product segment.
To demonstrate on the balance sheet, I think it will require a little patience for at least one and a half years from now.
Sure, sir. That's all from my side. Thank you and all the best.
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So, sir.
Hello?
Hello? Thank you. Hello? Hello? Okay. The vision card again? Link weaker. I'll request everybody to be present. I think there's some problem at the Chorus level. Technical issue? Technical issue. They are trying to fix it. Okay. So I think let's close the call. Thank you, everyone, for joining on the call. For any further information, kindly get in touch with our head of IR, Ravi Kharbanda, or Rohit Singh, our strategic growth advisor, our investor relations advisors. Thank you very much, and have a good day ahead. Happy to address any queries further. If anyone of you have, please contact Ravi for that. Thank you. Thanks.