Ladies and gentlemen, good day and welcome to INOX India Q2 FY2026 Earnings Call hosted by ICICI Securities Limited. 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 touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Abhinav. Thank you, and over to you, sir.
Thank you, Trisha. Good morning, everyone. On behalf of ICICI Securities, I welcome you all to the FY2026 earnings call of INOX India. Today, we have with us from the management, Mr. Deepak Acharya, CEO, Mr. Pawan Logar, CFO, Mr. Sunil Lavati, Investor Relations. We will begin with the opening remarks from the management, which will be followed by Q&A. Thank you, and over to you, sir.
Thank you, Trisha and Abhinav. Good morning, everyone. I welcome all our shareholders, investors, and friends to the Q2 and Q1 FY2026 earnings call of INOX India Limited. I trust you have had the opportunity to review our results, earnings release, and investor presentation, which are available on the stock exchange and on our website. Joining me today is Mr. Pawan Logar, who will later take you through the detailed analysis of our earnings.
Sorry to interrupt, sir, but there are some disconnections in your line.
From my side?
From the management side, sir.
Shall I repeat that again?
Yes, sir, you can now repeat. You are now clear.
Okay. Good morning, everyone. I welcome all our shareholders, investors. There is some background noise. Can you stop that?
Yes, sir, I'll stop that.
Okay. Good morning, everyone. I welcome all our shareholders, investors, and analyst friends to the Q2 and H1 FY2026 earnings call of INOX India Limited. I trust you have had the opportunity to review our results, earnings release, and investor presentation, which are available on the stock exchange and on our website. Joining me today is our CFO, Mr. Pawan Logar, who will later take you through the detailed financial performance, following which we will open the floor for questions. Let me begin with giving some macro-level context as well as some industry context. As we cross the halfway mark of FY2026, India's economy continues to demonstrate remarkable strength and resilience. The country remains the world's fastest-growing major economy, with GDP growth projected between 6.3% - 6.8%, supported by robust manufacturing activity, infrastructure expansion, and rising industrial investments.
The government's continued emphasis on "Make in India" and "Make for the World," along with strong export momentum and rising global demand for Indian engineering and manufacturing excellence, continue to align well with INOX India's long-term growth vision. The continued push towards hydrogen economy as well as use of LNG, both as a transit fuel as well as fuel for power generation, which advocates well for the cleaner, greener future for the world, it also opens up a lot of growth opportunities for us. Let me give you an overview of the business performance. We are pleased to share that Q2 FY2026 and H1 FY2026 have been the best performance period in the company's history, making the highest-ever sales, highest EBITDA, and PAT margins, and record order backlog, reflecting our strong execution capabilities, innovation-led portfolio, and rising global footprint.
During the quarter, our consolidated revenue increased by approximately 16% year-on-year compared to Q2 FY25, driven by robust order inflows and higher dispatches across key business segments. Our order backlog stood at INR 1,485 crore as of September 30, 2025, compared to INR 1,457 crore in the previous quarter, reflecting sustained demand visibility. Of these, 63% of the order backlog is from the exports and 37% from the domestic market, reinforcing our growth, international reach, and our efforts to add newer product applications to our fold. Let me give you some of the segmental highlights. Industrial gas solution. The IG segment had an exceptionally strong quarter, led by several prestigious order wins and successful project deliveries. We received two large 1,500 m³ cryogenic vessel orders from a leading U.S. aerospace company.
These are highly engineered tanks designed for critical cryogenic applications, which is a testament to INOX India's precision engineering and credibility in global market among the top-notch consumers. Another key highlight was the successful dispatch of a unique radial-flow thermal swing adsorption vessel for Tata Air Separation project, which is executed by INOX Air Products. This vessel, developed over the last one and a half years, makes a significant technological milestone and reflects our growing strength in complex process equipment manufacturing. Additionally, we secured an order of 90,000 liquid hydrogen storage tanks from a European customer for semiconductor and electronics facility, further reinforcing our presence in the high-purity and clean energy domains. Together, these orders underline the growing trust of global clients in our capabilities for advanced cryogenic and hydrogen-related applications. LNG solutions. The LNG segment continued its growth trajectory during the Q2 and first half of FY2026.
We secured two important satellite LNG power station projects from small island nations near the Bahamas. These projects are part of a broader island energy infrastructure development plan, complementing the main Bahamas project we had earlier executed. Our LNG vehicle fuel tank supplies to major OEMs also remained robust, supported by growing adoption of LNG as a clean and cost-efficient fuel alternative. We are expanding our capacity and building capabilities to scale our LNG fuel tank production up by 10 times over the next few years, supported by favorable regulatory changes and increasing domestic and export demand. Cryoscientific division. In the cryoscientific division, we witnessed strong progress with new and follow-on orders from the reputed scientific clients. We received two major refurbishment contracts: vacuum vessel thermal shield for sector F repair and a cryostat thermal shield repair.
These projects underscore our ongoing partnership with global scientific research institutions and reaffirm our execution excellence at a complex cryogenic facility such as the ITER project. Discussions are also underway for new ITER project assignments, and we expect the next order to be finalized during Q3 FY2026. Beverage keg division. Our beverage keg business continues to gain traction across the geographies. We secured a 30,000 keg order from a German company. The first batch has been dispatched, with the remaining lot scheduled post-customer trials in November. Additionally, we received a non-standard keg order from a customer in Germany, reflecting the rising demand for customized keg format. We are also actively bidding for over 500,000 kegs with the major global breweries, including Heineken, AB InBev, Paulaner, and many others. These developments indicate rising confidence among the global breweries in INOX India's products, quality, and reliability.
With multiple approvals and distributor partnerships progressing, we remain optimistic about scaling our keg business further in the coming quarters. As we have completed our first half of FY2026 with a robust foundation, our healthy order pipelines, expanding global customer base, capacity expansion initiatives, and diversified portfolio across LNG, industrial gas, and cryoscientific and beverage applications position us strongly for sustained growth. We remain confident in maintaining our growth trajectory, driving operational excellence, and delivering long-term value for our stakeholders. I will now hand over the call to Mr. Pawan Logar, our CFO, to share the detailed financial highlights. Thank you for your time and continued trust.
Thank you, Mr. Acharya. Good morning, everyone. I shall share a summarized financial snapshot for the quarter and half-year ended September 30, 2025. For Q2 FY2026, total income stood at INR 371 crore, representing a growth of 16% YoY, driven by strong execution across key segments. EBITDA stood at INR 92 crore, up by 18% YoY, reflecting improved operating efficiency and better product mix. PAT profit after tax was INR 62 crore, growing 22.9% YoY, supported by margin expansion and robust volume growth. For H1 FY2026, total income for the half-year stood at INR 723 crore, marking the highest-ever H1 revenue in the company's history, reflecting healthy performance across industrial gas, LNG, and cryoscientific divisions. EBITDA for H1 was INR 180 crore, also the highest-ever half-year EBITDA, with margin improvement driven by a favorable business mix and cost optimization measures.
PAT for H1 stood at INR 122 crore, also the highest-ever, registering a growth of 20.9% over the same period last year. As of September 30, 2025, our order backlog stood at INR 1,485 crore, the highest till date, providing strong revenue visibility for the coming quarters. Of this, 63% is from exports and 37% from the domestic market, reaffirming our strong global presence. Our total fund availability as of Q2 FY2026 stood at INR 221 crore, providing ample headroom to support future capacity expansion, ongoing project execution, and other strategic initiatives. That concludes my remarks on the financial performance for the quarter and half-year. I will now request the moderator to open the floor for questions. Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchscreen 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. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Palash Jain from ICICI Securities. Please go ahead.
Hi. Thank you so much for this opportunity, and congratulations on a great set of numbers. I just have a couple of questions. First being that, what is the order inflow outlook for H2? Overall growth was 16.7% YoY in H1, whereas in Q1 was lower as compared to Q2 in terms of order inflow. What can we expect for the full year? Also, is there any foreseen large order in H2? That's my first question.
For the H2, normally what happens is. For the H1, it is almost like 43%-45% of our target we achieve. And balance H2 is like 55%. Whatever yearly targets we have kept for the order book as well as the revenue, I think we are quite confident that we will achieve these targets. Yes, as you rightly said, a few big orders we are expecting, especially on cryoscientific and LNG, which are likely to come in quarter two or quarter three now. This will sum up our revenue as well as our order book in line with our yearly targets.
Thank you. Thank you so much, sir. My second question being, what influence can we draw from the beverage keg approvals, as you rightly said, we have received from major overseas companies? What is the expectation of sales in FY 2026? Is there a potential to scale this category to, let's say, up to INR 2 billion by FY 2027?
Yeah. Presently, normally in this keg business, what I have seen is like the season starts from January to July. That is the very peak season, and balance portion is like slightly slow. Now the RFQs are on. We have for Heineken, AB InBev, and Paulaner, and many such big breweries. We are hopeful that another 15-20 days or max one month, we should get a substantial order from these breweries. All our products, which we have supplied as a sample or a prototype, everybody has approved the products. There is no further discussion on approval process now. It is only we have to bid for the project and win the order. We are quite hopeful that whatever targets we have kept this year, we will achieve.
For the coming years, definitely, yes, go and have more and more approvals because we are still waiting for [Katsuhi ] and other YAGO approvals are pending. We need to visit our plant somewhere in January, February, and they will start. What I understood is the major breweries like Heineken and AB InBev approve. Other breweries have very little to say, and they approve the product without any difficulty. We are quite hopeful with the approvals in place. Coming years will be much better than perhaps this year.
Thank you. That's very helpful. Just one last question, if I could squeeze in. Could you also throw some light on the execution timelines, especially for large orders like you mentioned, 1,500 m³ tanks in Industrial Gas Segment received from U.S.-based company, as well as the order for LNG regasification for the Bahamas?
Yeah. Normally for such big jobs, we have a guideline of around 12-18 months, depending on the size of the project. We complete within that time span. These big projects we normally execute from our Kandla facility because the size of the vessels are very large, and we are very next to the port. We can easily manufacture those tanks at our Kandla facility. We are hopeful that whatever we have received the orders will be finishing within time. As of today, the progress is in line with our plan.
Thank you. Thank you. That's very helpful. I'll join the queue for further questions.
Thank you.
Thank you. The next question is from the line of Prakash Kapadia from Kapadia Financial Services. Please go ahead.
Yeah. Thanks for the opportunity. Couple of questions from my end. If I were to look at the H1 results, we've seen 500 basis point improvements in gross margins. So is it purely mix change? And is it right to relate it to mix change and say, "If my current order book is how it is, this could further go up as we execute next year and beyond"? Is that the right way to look at the business?
Yeah. I told you in the beginning also, normally when we are from the past experience, our H1 is slightly around 43%-45% of our total targets. Q3 and Q4 are much better. As you see, a lot of projects get started or movement start because of the monsoon, we have always a problem in the first one and two quarters. Some disturbance we have seen because of these tariffs also. I am hopeful that Q3, Q4, what we have projected, and we have a very good amount of inquiries and others coming in. Already we have bid for many big projects as well. We should be in a position to meet our targets without any difficulty.
Yeah. So it's purely the business mix change, sir. What I was looking at is the gross margin improvement is due to business mix change, and it could further improve if the business mix is tilted towards non-IGs, what I was trying to get more clarity on.
Basically, yes. Yes. The LNG and cryoscientific has always a better margin as compared to standard.
Yeah. I was trying to validate. Thank you.
If I were to look at the quarterly domestic business, over the last few quarters, we've had a run rate of INR 160 crore-170 crore. Post the GST cut, what kind of momentum are we seeing? Because historically, from what I remember, automobiles is a pretty decent contribution to our domestic business that is doing well. Consumer durables after the GST cut is doing well. If you could give us some sense on the domestic side of the business, because I think auto, cement, consumer durable, electronics, these are large contributors to us. What kind of a growth can we expect from year-on on the domestic side? How easy or difficult is it to increase market share in the domestic business? What would be a market share in the domestic side of the business? Normally, our.
Export to domestic is 60 to 60, 40 combination, normally. What you rightly said, the GST impact is just now one month old now or maybe less than that. Definitely, automobile has picked up very well. In automobile, even the OEM manufacturers to whom we are supplying the LNG fuel tanks, we have started getting good inquiries now again or request. Tata is also pushing very hard to see that the LNG trucks are running on the road. Things should improve. For our product, the GST is saved earlier, and today also it is saved. There is no variation in our GST rates. Directly, our product is not cheaper or costlier as compared to earliest regime.
Definitely, yes, as the industry, overall industry, like you rightly said, electronics, automobile, other manufacturing industry grew at a much faster rate, automatically, the CapEx from those companies gets improved, which has a direct impact on our revenues and our order booking targets.
Understood. Thank you. All the best. I'll join back if I have more questions. Thank you.
Thank you. The next question is from the line of HR, from Dalal & Broacha Stockbroking Private Limited. Please go ahead.
Yeah. Thank you for the opportunity. I have a couple of questions. First, it's a continuation of the previous participant. The question is with regards to the kegs division. In the previous con call, we had the target of about 100,000 kegs for the year on a bare minimum basis. Are we on track to achieve that?
Yeah. Already, I have received 30,000. Hopefully, this month, we'll get more than that. Expectation. We are already through, and just final order signing is balanced now.
Okay, sir. Secondly, on the new approval side, I mean, any update on the Asahi and the Carlsberg audit that was supposed to happen in September or October of this year?
Planned, but they are now coming in January now because they have some other plans. I was told that if you get the Heineken and AB InBev, which are the largest breweries, other small breweries automatically follow this one. We already supplied our samples to Carlsberg and Asahi, and results will be known in coming maybe end of November or first week of December. Audit will take January. The samples, whatever the breweries we have supplied samples so far, everybody has a very positive outlook on our quality and our performance of our equipment.
Okay. That's helpful, sir. Next question is with regards to the disposable cylinder segment. Sir, what sort of target do we have for FY 2026 and any guidance for the coming years? Because FY 2025, we closed it at INR 125 crore. FY 2024 was about INR 100 crore. What's your outlook for the current and the upcoming years?
See, we have kept our internal target for production around 2 million-2.5 million. In the first half, we almost achieved around 500,000 cylinders manufacturing. Recently, our major U.S. customers have visited last week to our plant. They are quite hopeful that they will continue their business with INOX India, looking to the quality delivery and our price constraint. Yes, definitely, there was a small constraint when it was like 25% tariff. People were not so much worried. Now with 50%, slight hesitation they have. We explained to them properly that we can work with them to the extent possible. As the tariff goes away, again, we will come back to the original numbers. They are quite happy with our explanation. They will place the orders. There is no problem.
Earlier in the quarter one, we already received a National Refrigeration order. We almost in H1 sold around INR 46 crore of cylinders to National Refrigeration.
Got it, sir. Got it, sir. And sir, one last question, if I could squeeze in. It is with regards to the LNG stations. Any update? Because I think in the previous quarter, we had about 50 stations as of date. Any traction seen in that segment?
LNG station somehow is not picking up that fast to our expectation. Some private players like Ultra Gas and GreeLiine, they are putting almost at that 100 stations they are coming up in due course of time. Besides that, we have some small stations where two, three requirements from GAIL is coming up now and other small companies. What we expected so fast, it is not happening. At least 10 more stations or 15 more stations will come by the end of this year now.
Thank you. That was really helpful. Thank you and all the best.
Thank you. Thank you.
Thank you. The next question is from the line of Divyam Doshi from Pragya Securities Private Limited. Please go ahead. Sorry to interrupt, sir, but Mr. Divyam, you are not audible.
Hello. Am I audible now?
Yes, you're audible now.
Please continue, Divyam.
Yeah. So my question was, could you please provide a sense of your average project size or revenue realization per unit in every segment that INOX provides and the segment-wise growth outlook for the rest of FY2026?
You mean our all verticals?
Yes, sir.
Okay. If you see our backlog, our backlog is total INR 1,485 crore. Out of that, 45% is from industrial gas, 31% from LNG, and 23% from the CSG division. Okay. On the revenue side, the income is 57% from the industrial gas, 25% from the LNG, and 13% from the cryoscientific division. This is for the quarter two FY2026.
I wanted to know that the order book, which we have right now, that is INR 1,485 crore, when is that expected to complete and when is the revenue expected to realize?
Almost 60% of these, or more than that perhaps, will be completed by Q2. The balance will be carried forward for the next year. This is how it is normal at our place. We have almost 732 so far.
720.
723 we have achieved and balance around INR 800 crore-INR 900 crore we'll achieve in the next two quarters.
Okay. Can you please share where INOX sources its key raw materials? That is, for example, stainless steel or other cryogenic-grade materials from?
Normally, around 85% - 90% we procure from India. That is JSW. There are certain projects which require, which do not require other Indian-origin materials. Then we buy from mainly Japan or maybe Korea. Like that, we buy. Most of the material is from JSW.
Okay. If the whole INOX group comes together and buys the raw material together, will there be a great cost-cutting in that?
INOX group, our three businesses, only the consumption takes place at INOXCVA. That is how we are doing it. For other two businesses, like industrial gases and the cinema business, they do not procure any material as such.
Okay. Okay. If I could squeeze a last question, can you please help us understand the total addressable market for the fusion-related work for the next five years? How much of that opportunity is likely to be in our project, which could help us in the future? If it will be recurring?
You're talking about the ITER project?
No, no. The fusion-related work project.
All over the world?
No, the time which we could. The total addressable market for us.
It's very difficult to say this because there are many such applications which are coming in. So far, what we have executed is around INR 800 crore-INR 900 crore we have executed so far. Whatever the new opportunities we are coming in, we expect another for next five years, around INR 500 crore-INR 600 crore additional business. Every year, around INR 100 crore, INR 150 crore we can expect. This year also, we have received so far a good number, and we are expecting one more order in the quarter three or quarter four. Going forward, at least for the fusion projects, we have established our name as a good quality supplier, and we are now approved by the majority of the fusion energy experimentation work. We have got the ESPN approval also. That will definitely help us in getting more and more orders in the coming days.
Okay, sir. That's it. I'll join back again. Thank you so much and all the best.
Thank you, Divyam.
Thank you. The next question is from the line of [Ishwar] from [ITHORT PMS]. Please go ahead.
Hello. Am I audible?
Yeah.
Yes, sir. Thank you for taking my question. I have a couple of questions. Sir, our customer who develops liquid air energy storage projects, they raised funds for around GBP 300 million from U.K. Infrastructure Bank. Approximately what percentage of this CapEx will be for fuel tanks? Sorry, LNG.
No, we got the order for cryogenic liquid air storage application for this project, what you rightly said. There are many such projects they are working. This is not the only project for which that is totally funded now. They asked for several quotations from us for beyond this application because this was a pilot project. We will be supplying this equipment by the end of December or January to them, and that will reach another two months. Maybe next year, by mid of next year, pretty this entire station will be operational. They can feel what is the advantage of this such type of application. Definitely, they have started getting RFQs for the new projects, which are quite big projects. We are hopeful that we will be in a position to provide them good solutions for these upcoming projects.
Okay, sir. Approximately what percentage of the capital costs will be for tanks?
I'll get you that number, whatever we have received the order. This is only a small part they have given us, frankly speaking. We have many more opportunities in this project. As this was the first order and the first interaction with INOX India, I think they have restricted this to only for the supply of cryogenic liquid air storage battery system only to us. Going forward, once we have developed a good relationship, they can offer many storage equipments, many piping skids, and many other equipment they can offer us for building up.
Okay, sir. Okay. My second question is, how is the outlook for LNG fuel tanks, sir? Because one of our Chinese competitors, they make around 200,000 tanks annually and sell it at a similar landed cost to us domestically. Approximately what would our market share be in this segment, both domestic and export, sir?
Yeah. Presently, if you see, there are four, five OEM manufacturers in India. The biggest one can be Blue Energy, then Tata Motors, Shukla Land, and Volvo. Okay. So we are catering to almost everybody, all the four. But definitely, the market is going to grow up gradually. We have developed all tanks right from the small tank as small as 200 liters and now to 990 L, which can carry you to almost 1,000 km in one field. The market is going to grow. The OEMs are yet not ready for bigger tanks installation because of their chassis design or something is pending work. Hopefully, by another or the beginning of the quarter three, they'll be in a position to take bigger tanks as well.
Presently, they are utilizing 450 L tanks, one on left side and one on right side, so that they can carry to 900 liters. Going forward, we see a lot of good potential. Over a period of time in the next three to five years, the LNG fuel tanks will be at least 25%-30%, in my opinion. That will require around 30,000-40,000 tanks a year.
Wonderful, sir. What would be more beneficial to us, sir, having two tanks on the same vehicle or a single bigger tank, realization-wise?
Realization-wise, perhaps two tanks will be a better solution for us. It depends on the design of the truck. If the truck cannot have a turning radius because of the 990 L tank, which is mounted at the back of the cabin, then it is difficult. They cannot run that tank. 450 L two tanks is almost 900 kilometers, and this is also 900 km. Two tanks from a revenue point of view is better for us. At the same time, whenever the two tanks are there, the driver is aware that one tank is already empty, and he will think of filling it up in the next filling station. If 990, if something even goes wrong or issues are there and suddenly the tank is empty, then he is in trouble. What we have seen, people are happy with 450 L two tanks.
Wonderful, sir. That's all the questions I have. Thank you, sir.
Yeah.
Thank you. The next question is from the line of [ Pravesh ] from [Fort Lyon]. Please go ahead.
Hi. Thank you for taking my question. One quick update on the Highview project. I think last time we had mentioned it's likely to get completed by October.
HYVU?
You can provide an update on that. Highview.
Yeah. Far, we are on the track. Almost all tanks are now completely tested. Hydro testing, everything is done. Final painting and other things is going on. We hope that our deliveries are in January first week, and we'll be meeting those deliveries. We don't have any constraint for delivery of these tanks now. In fact, we are trying to see how we can deliver slightly earlier also.
Understood. Is there any plan from Highview? Because this was a starter kind of a project on air batteries. Are you getting more traction on similar lines for air batteries or?
We are getting inquiries from them for future projects, and we already bid for them. It is under evaluation now.
Understood. Earlier on the call, did you mention that you are bidding for 500,000 beverage kegs in this season? Is that the right number that I got?
Correct. Basically, major breweries have total requirement of that size, and we have bidded for that. How much we win is we have to see now.
Understood. Just generally, what is your expectation or target in terms of getting these orders?
We thought that this year we'll do at least 100,000-150,000 kegs. Basically, even if they have a requirement of, say, 300,000. Being our first entry into the market of INOX India, they will definitely, even if our prices are lower, they will not give the entire order to us. Normally, it is a purchasing strategy of these breweries that they distribute the order to two to three vendors. From the reliability point of view, from the delivery or some logistic point of view, they distribute the order to two to three vendors. Out of, say, 500,000 kegs requirement, we at least expect 100,000-150,000.
Got it. Understood. One final question, if you can give where we are run rating on the number of IMO tanks now, and if there has been a material step up.
So IMO.
That you can see in H2?
IMO, we are having almost like 46, 50. Around 90-95 tanks are under construction. Few were delivered. As you said, Bahamas and other projects are going on. Definitely, the mother station of Bahamas and the two new orders we have received will require IMO tanks for catering to the small stations. The requirement of IMO tanks going forward will improve. That is what our thinking.
Okay. Thank you, sir. All the best.
Thank you.
Thank you. The next question is from the line of Mohit Surana from Monarch Network Capital Limited. Please go ahead.
Thank you for the opportunity. Sir, first of all, congratulations for the good set of results. My first question is with respect to the new LNG terminals. Last time, you had indicated that we have bidded for some Southeast Asian island where these LNG projects are expected to be set up. We have bidded for those projects. Any update on those? I think that will be material for the LNG order book ramp-up.
Yeah. We are equally anxious to win these orders, mainly in Indonesia, Philippines, and the Andaman and Nicobar. These are the two, three main projects which are under our vision. We are bidding for these projects. Hopefully, by the end of the third quarter, at least one will materialize. That is what we think.
Sir, how big these projects will be in terms of value of the contract?
It will be quite big. Maybe around INR 200 crore or so.
Understood. Understood. So my second question is—yeah. Please go ahead.
Yeah.
My second question is with—
Go ahead.
My second question is with— Sorry, sir. Did you want to say something now?
No, no. I said you continue.
Yeah. Sir, second question is with respect to the payment milestones in projects like Highview Power. How do we get paid? I mean, these are like 12-18 months projects. Do we get some upfront payment or, based on milestone, we get payment for these kind of projects?
Yeah. Normally, we get around 20%-30% along with the order. There is a material availability. Once we receive the material, also we get some payment. There is a hydro test. Almost 90%-95% payment at the time of dispatch. Around 5%-7% for commissioning if it is in our scope. This is normally our payment terms with these big contracts.
Understood. Understood.
It's positive cash flow.
Got it. Sir, this quarter, we received one order from a U.S.-based company. We just wanted to understand what's the scope of getting repeat orders from this entity going forward? Or is it just one of the orders which may not be offering again?
No. I will tell you. This order is, as you know, it's a very big order for us again. Requirements are coming up all over the globe. There are more than 40 such, you can say, launch pads all over the world. Most of the launch pads utilize the old technologies of solid propellant. It is not so economical for lifting the rocket. Everybody is now going with the liquid-based system and maybe the methane and oxygen-based system. We are targeting not only the U.S. launch pad operators, but all over the globe. India is also, I told you last time, that third launch pad will be the very modern launch pad. Similarly, there are many such projects coming up in Japan, China, many other countries.
We are just targeting them as well to see how we can get associated and our experience of the space department in India, we can work. The one which is now recently, we have received an order from the space company in the U.S. as well. There is a lot of potential going forward, in my opinion, because there is a lot of new technologies that are coming up into these launches. Everybody wants to see that the launches are very effective, very cost economic. New fuels are coming, new technologies are coming. Everybody wants to augment the launch pads. We see a lot of potential into these going forward.
Understood. Sir, when can we expect ISRO order to be received? I think we are already in discussion with ISRO, right?
ISRO one?
Yes.
Yeah. ISRO one, yes, we are working very closely with them. Hopefully, by December, the RFQ will be out. If everything goes well and fast, end of the year, they should place the order.
Got it. Sir, my last question is with respect to the semiconductor industry. I mean, we have been hearing a lot of news in the Indian market of semiconductor industry projects ramping up. All the plans on that. I just wanted to have your understanding of what you are seeing on the ground in terms of inquiry pipelines, and how soon do you think we can get orders from that industry?
Yeah. On semiconductor, again, we are very bullish. That order is INR 1.6 lakh crore investment, which is planned as a semiconductor outgo. Major projects, almost 75% projects are coming in Gujarat now, I can say. We are very well placed. We have supplied to Micron in the U.S.A. We have supplied to Micron facility in Dholera. We have supplied to Foxconn in Bangalore. We are supplying to Tata facility in Assam. We are supplying to Air Liquide and Dresden project in Europe. I think we have pretty good understanding of these projects. We have an entire range of products which are required by this industry. However, what will be the opportunity from the semiconductor is a big question to me because the investment and how they do plan for their total project is slightly difficult at this moment.
Whatever the equipments are required, we can definitely, from the cryogenic export point of view, supply the equipment, especially the storage tanks, vaporizers, the piping skids, and many other things, even the hydrogen tanks we can supply. We have better understanding of this industry. Definitely, we are targeting every industry. There are no manufacturers, I can say, who can really manufacture to these high-quality requirements going forward. We have supplied similar equipments to Japan and Singapore earlier. We have a pretty good idea of how these equipments are to be manufactured.
Understood, sir. That was very helpful. If there are any further questions, I will contact you. Thank you, sir.
Thank you, Mohit.
Thank you. The next question is from the line of Kaushal Sharma from Equinox Capital Ventures Private Limited. Please go ahead.
Hello.
Yeah.
Hi, sir. Am I audible?
Yeah, yeah, Kaushal, you're audible.
Yeah. My question is on the semiconductor side as well. As you said, we have a complete set of products. Could you please tell me what kind of products can be catered to this sector? What kind of current order book line with this sector?
In the semiconductor industry, there are various applications for which we require this. Mainly, we require nitrogen for chemical vapor deposition, nitrogen purging, periodic chamber clearances, continual idle equipment purging. Oxygen is normally used for silicon layer deposition, heating core reactive gases, and reactive gas neutralization. These are various applications which are required by semiconductor. As you know, India is a tropical country. The dust environment is there in India. The amount of cleaning which is required is very high. The consumption of gases in the semiconductor industry will be tremendous. I was told that almost 47 types of gases are required for chemical in the semiconductor industry. India, as of today, produces only seven or eight types of gases. Other gases are imported from other countries. We see a lot of potential.
We are constantly in touch with our parent company to develop products which are required. We recently developed ultra-high purity ammonia containers, again, for similar application and solar application. We have a pretty good idea about what the requirements are. We are in constant touch with all the newcomers into this industry. The processes, again, will take at least three to five years for complete development of these big projects.
Sir, what is the current order book in this segment?
Current order book will be around 8%-10% of our total revenue now.
8%-10%.
Yeah.
What would be the general timeline to execute them?
Yeah. Timeline is around eight months to around a year.
Eight months to?
One year.
One year. Sir, what kind of EBITDA margin in this kind of products that will be in semiconductor can be expected?
Normally, we do not track EBITDA margin for product to product. We have the consolidated EBITDA. We are operating within the range of around 20%-24% on average, based on the different products. Because it is very difficult to monitor on a case-to-case basis.
Sir, will this margin be sustainable, or there is improvement by going in this kind of segment?
These are the areas which are of recent thing. If we don't maintain our margins in such type of projects, how can we manage the whole show? Definitely, because there are very few manufacturers in the world to manufacture these equipments, we have a better chance to get good margins in these products.
Are we seeing any improvement in this margin going forward?
Improved margin, not substantially, but case-to-case basis, depending on the requirement we quote. Definitely, some improvement can be possible.
Sir, currently, we are around 8%-10%. Like you are saying, that in the next three to five years, the ecosystem will be developed. What kind of mix are we expecting going forward in this segment?
What sort of?
In semiconductor, like 8%-10%, currently, we are having the order now?
Yeah, yeah.
Going forward, you are saying that around three to five years, the whole ecosystem will be developed in India.
Yeah.
What kind of mix overall revenue would cater to this segment?
Very difficult question at this moment. We are targeting for all our products. Besides that, we are also targeting for semiconductor pipelines which are required. Though it is not really cryogenic pipelines, a huge amount of pipelines are required. For example, a Tata project in Dholera will require at least 50 km of pipeline. These pipelines, again, have to be very neat and clean and absolutely dust-free from inside. It requires polished pipes. All these things are required. A huge amount of work is there. We are concentrating on that and trying to work with these big companies for this pipeline work as well, besides the supplying of cryogenic equipment and other gases equipment to them. Things will improve, but the number I cannot tell you at this moment.
Okay. And sir, my last question is on electronics.
No interrupts, sir. Mr. Kaushal, can you please rejoin the queue for further questions?
Sure, ma'am. Thank you.
Thank you. The next question is from the line of Jaiveer Shekhawat from Ambit Capital. Please go ahead.
Sure. Good morning, Mr. Acharya. Sir, first question on the LNG business. If we were to exclude the small-scale LNG projects, what would have been the growth in the rest of the LNG business over the last year? Let's say in the first half of this year versus the last year, how is the growth tracking there? Excluding the small-scale LNG projects which you do outside island nations.
Small-scale LNG project is like big projects. If you remove that.
Excluding that.
Yeah. Remove that, the main growth comes from the satellite station, the fueling station, the LCNG station, then marine fuel tanks. Almost 50% of these products contribute to our revenue, besides the small-scale LNG project, 50%-60%.
Sir, I'm just trying to understand what growth have you seen, either in order intake or revenues from that segment? Because we have received one of these larger LNG projects outside. Apart from that, how is the growth happening for the rest of the segment?
See, we are getting good orders from the LNG fuel tanks. We are getting good orders from LNG fuel ship requirements. Presently, if you have seen in Kochi, they are having four ships which will be 100% now in LNG. We are targeting for that. Similarly, the fueling station, if you have seen. The SR group is putting 100 stations now. Fueling stations. Besides that, there are some satellite stations like Saint-Gobain and other people are putting their plants. We see a pretty good amount of orders coming in over a period of time. The growth can be almost like 15%-20% more than that, perhaps can come from these projects.
Sure. Sir, the order backlog that you have on the industrial gas business, usually, what time period is it usually executable at? Because these are, again, your standard tanks and a lot of other equipment.
Standard tanks, maximum up to like three to four months. Non-standard, depending on the project. For example, this [SPX] or this order of U.S. big tank order, it is like around 12 months. Depending on the project, yes, the delivery varies. For standard tanks, we do it in almost like three to four months.
Sure. Because I'm just trying to gauge the current order backlog that you have in the industrial gas business. Does that allow you to do a 15%-20% growth in the next year?
Industrial gases, yes. Because if the projects are there, definitely the growth is possible. For standard tanks, it is difficult. It is always a combination of standard and non-standard tanks. Presently, also, our business is like 50%-60% comes from the project jobs. There are a lot of projects which are coming up in India as well as in other countries. We are targeting them, and we are hopeful that we'll get these orders as well. The growth is we are expecting, and we are adding new products as well, the new territories, new products. All that should contribute to our top line.
Sure. Sir, lastly, what kind of an order backlog by the end of the year would you want to expect so that you can achieve your 2027-2028 targets?
Hopefully. Normally, whatever we are like every month, we are getting INR 150 crore, INR 160 crore order. If that continues, our backlog will be in this range only around INR 1,500 crore- INR 1,600 crore.
Sure. All right, sir. Thank you, and all the best.
Yeah.
Thank you. A reminder to all the participants to please restrict yourself to one question. The next question is from the line of Kunal Bhatia from Dalal & Broacha. Please go ahead.
Yeah, hi, sir. Thank you so much for the opportunity. And congratulations on a good set, sir. Sir, in terms of I just because I have only limitation of one question. The most important question I just wanted to ask in terms of the Cryoscientific order backlog. Are we expecting any big number to come in there? Because that was the only space wherein our 100 or that INR 400 crore plus order back orders that we receive on a quarterly basis came down. So anything big we are expecting?
We are expecting good order from, in cryoscientific. Actually, we missed this quarter two. Hopefully, at the end of November, we will get the order now.
Okay. And sir, finally, in the recent launch of the CMS 03, did we supply any of our tanks in there?
No. See, the CMS 03, what you have seen. Three things which are there. This was the largest among the satellite, 4,400. And for the communication purpose. Way back, we have installed a facility at Space Application Center, Ahmedabad, where these satellites or the payloads are tested to space conditions on Earth. That is, simulation is done. The Space Application Center thermal vacuum chamber we supplied was 6.5 meters in diameter. We were told that these satellites were tested in that chamber. Besides that, there is acoustic testing which is done at Bangalore. Again, these satellites were also tested in the Bangalore facility. Both our equipment which is supplied to Space Application Center and Bangalore. Lastly, the launch pad. The launch pad, if you see at Sriharikota, way back in 1999, 2004, we have supplied all the ground equipment for cryogenic and gas systems.
We have been in all phases of this launch. Going forward, if you see these heavy vehicles or heavy launch vehicles which are happening now, definitely bigger and bigger size of satellites you will see over a period of time. Our equipment, what we manufactured earlier, will be 100% utilized for the testing of these new satellites.
Okay. That's great news. Sir, but any cryo?
Sorry to interrupt, sir, but could you rejoin the queue for a follow-up question?
Ma'am, just last continuation question. Sir, I just wanted to ask, any cryogenic tanks did we offer for this ISRO rocket?
Cryogenic tanks already were supplied in the past. So they were.
Okay. Great. Okay.
They don't buy the tanks. The tanks are one equipment, and the whole facility is developed. It is not like every time you have to order these tanks for the launches.
Okay. Okay. Great, sir. Got it. Got it. Congratulations. Thank you, sir.
Thank you. Thank you.
Thank you. The next question is from the line of Amol Rao from One Up Financial Consultants. Please go ahead.
Sir, good afternoon.
Good afternoon.
On the VOK order, sir. So these orders, just out of curiosity, are they fixed-price contracts which have to be executed? Or is there some escalation for material that we are allowed for, sir?
No, no. Normally, when the small orders are there, they are fixed contract only. We have to supply. The cycle time of manufacturing is not that big. However, if it is a big order of, say, an order of stretch for a year or so, definitely there is a price escalation formula built into the system.
All right. The price escalation is built in case there is a continuous supply of over a year or two.
Absolutely. Absolutely.
All right, sir. Thank you so much, sir. Wish you the very best.
Okay. Thank you.
Thank you. Ladies and gentlemen, in the interest of time, that was the last question. I would now like to hand the conference over to the management for the closing comments.
Thank you, all the participants. It was a nice interaction with all of you. Hopefully, we have answered all your questions. If you have something, additional questions, or some more information is required, you can write back to us via mail, and we will answer the question. Hope to see you in the next quarter again. Thank you so much for your time.
On behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.