Ladies and gentlemen, good day and welcome to the INOX India Limited Q2 FY 2027 earnings conference call hosted by ICICI Securities Limited. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need any assistance during this conference, please signal for an operator by pressing star followed by zero on your touchtone telephones. I now hand the conference over to Mr. Mohit Kumar from ICICI Securities Limited. Thank you, and over to you, sir.
Thank you, Sara. Good morning. On behalf of ICICI Securities, I welcome you all to the Q2 FY 2027 earnings call of INOX India Limited. Today, we have with us from the management, Mr. Deepak Acharya, CEO, Mr. Pavan Logar, CFO, and Mr. Sunil Lavati, Head 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. Thank you so much. Good morning, ladies and gentlemen, and a warm welcome to INOX India Limited Q2 and H1 FY 2027 earnings conference call. I hope you had an opportunity to review our financial results and investor presentation. I will begin by sharing an overview of the global business environment, our performance across the key business verticals, and the important developments that are shaping our growth trajectory. Let me touch upon the global business and macroeconomic environment. As you are aware, the ongoing West Asia conflict has created additional challenges for the global economy, particularly in logistics and supply chains. These developments have made the operating environment more complex for everyone. We at INOX India are navigating these challenges with focus on execution, operational efficiency, and customer commitments.
Despite this, underlying demand drivers across industrial gases, LNG infrastructure, aerospace, space applications, scientific research, and semiconductor manufacturing remain very encouraging. These sectors require increasingly sophisticated cryogenic systems, precision-engineered equipment, and reliable manufacturing capabilities. We believe these requirements create opportunities for us. We continue to strengthen our position as a trusted partner for complex cryogenic equipment and engineered solutions, mainly due to our manufacturing infrastructure, technical expertise, and expanding presence across domestic and international markets. Let me now throw some light on our current order book. During the quarter, we have achieved a significant milestone. Our order backlog crossed INR 2,200 crore, marking the highest level in the company's history. Of these orders, from customers in the space sector comprise about INR 1,100 crore, reflecting the growing traction of our offerings in this segment and being the partner of choice for the customers.
Also, in the September quarter, we had received a mega order for sub-coolers from a U.S.-based company. We are planning to manufacture these at our Savli facility. This is an important development for our business and further strengthens our position in specialized cryogenic equipment. Let me now take you through the key developments across the business verticals, starting with industrial gas solutions. Our industrial gas solution business continues to see a healthy demand for equipment used in storage and transportation of industrial gases. During the quarter, we received orders worth approximately INR 60 crore from domestic players, covering transportation equipment, trailer tanks, and large storage tanks. These orders reinforce the continued demand for reliable gas handling infrastructure. We have also made significant progress in liquid cylinder manufacturing.
Following the revamp of our manufacturing unit, production has ramped up meaningfully, with more than 1,500 liquid cylinders dispatched in the first half of FY 2027, worth more than INR 25 crore, as against 1,600 in the last year. We are particularly encouraged by the progress of this business, as we are currently the only player with liquid cylinder manufacturing capabilities, positioning us uniquely in the Indian market. We believe the enhanced production capacity will further strengthen our ability to cater to growing customer demand.
Additionally, we secured repeat orders for disposable cylinders from the U.S. market, along with repeat orders for DOT cylinders from existing customers. Repeat orders from established customers reflect the importance of product quality, delivery reliability, and consistent execution. I'll now update you on the traction from the LNG solution vertical. LNG solution business continues to benefit from the growing requirement of LNG transportation, storage, and fueling infrastructure.
The current geopolitical environment has also reinforced the importance of energy security and reliable storage infrastructure. We are seeing increasing traction in LNG transportation, particularly in the semi-trailer segment. During the quarter, we secured a combined order of 40+ LNG semi-trailers from various customers. These orders demonstrate continued demand for LNG transportation solutions. We also secured orders aggregating approximately INR 14 crore from a domestic customer for storage tank, vaporization system, and unloading pump skids. Additionally, we received an order from a leading city gas distribution company for LNG fueling station, along with orders for vertical tanks, vaporizers for the gas plant at Dharmavaram. Another encouraging development is the emergence of LNG-powered railway applications in India. Following the recent launch of LNG train by Indian Railways, we have received four related orders, of which two have already been dispatched.
We view this as a promising beginning of new application area and opportunity to build our capabilities as the market develops. These developments demonstrate the breadth of our LNG portfolio, spanning transportation, storage, fueling, and emerging applications. Let me now take you through the development of Cryo-Scientific and advanced engineering solutions. Our Cryo-Scientific business continue to build capabilities in highly specialized applications that demand engineering precision, stringent quality standards, and ability to operate under complex technical conditions. During the quarter, we secured an order worth approximately INR 35 crore for the specialized cryogenic equipment for another important apocalyptic India scientific research ecosystem, the upcoming Laser Interferometer Gravitational-Wave Observatory project being established in Maharashtra to detect gravitational waves produced by cosmic events such as collisions and black holes and neutron stars.
It will become a part of the global network of gravitational wave observatories, significantly improving scientists' ability to locate and study such events. The project is in collaboration between the LIGO Laboratory, U.S.A., Indian institutions including RRCAT, IPR, and IUCAA. Beyond its scientific importance, LIGO-India will strengthen India's capabilities in precision engineering, advanced instrumentation, ultra-high vacuum technology, while providing opportunities for Indian scientists, engineers, and students to participate in frontier research. During the quarter, we also secured an order worth approximately INR 12 crore from a European customer for prefabrication of TCWS piping, which are currently under manufacturing. For INOXCVA, these projects demonstrate the relevance of our engineering and manufacturing expertise in demanding technology-intensive applications and support our ambition to participate in increasingly sophisticated scientific infrastructure projects. Let me update you on the beverage kegs.
Our beverage keg business has continued to demonstrate a strong momentum during the first half of the FY 2027, supported by increasing traction from international beverage customers. During Q2 FY 2027, beverage keg sales grew approximately 446% year-on-year. Our beverage keg order book also recorded strong growth, increasing by approximately 155% year-on-year in Q2. These trends reflect encouraging demand and the progress we are making in expanding our presence with global beverage companies. A significant development during this quarter was our entry into the three-year global supply agreement with a leading global brewing company. The stated requirement for 2027 exceeds around 4 lakh kegs across 22 countries. This represents the customer's overall requirement under the agreement and not the volume exclusively allocated to us, as supplies are expected to be shared among the multiple vendors. Our current allocation relates to 2027.
Given the three-year nature of agreement, we see potential to pursue additional business in 2028 and 2029, subject to customer requirements and further allocations. We are also targeting opportunities across European market, Vietnam, Singapore, as we work to expand our international footprint. Customer approvals continue to be a key focus of our growth strategy. We have made progress in securing approvals from leading global beverage companies, with four out of five players targeted having approved us. Securing approval from the remaining player remains an important milestone as we continue to expand our presence and pursue opportunities in global beverage market. We are seeing encouraging traction from the repeat customers and remain focused on strengthening customer relationship, expanding our addressable market, and meeting the stringent quality and delivery requirements of international beverage companies.
We believe the combination of growing demand, customer approvals, and our manufacturing capabilities provide a sound foundation for the continued development of beverage keg business. Aerospace and space sector opportunities. The aerospace and space sector continue to represent significant long-term opportunities for INOXCVA. These applications require highly specialized cryogenic systems, stringent quality standards, and exceptional reliability. Our order book already reflects the growing importance of space sector, with approximately INR 1,100 crore of orders from space sector customers. We have received an order from the leading Indian aerospace player for vertical storage tank and also engaged in discussions regarding additional requirements. We are actively engaged with several companies across India's emerging private space ecosystem and see the potential for further opportunities as this business expand their launch capabilities and infrastructure. Another important development is our work on two large kettle-type cryogenic sub-coolers for leading U.S. aerospace company launch infrastructure.
One sub-cooler is designed for liquid oxygen and the other is for methane, using liquid nitrogen as the cooling medium. These systems are critical to the handling of cryogenic propellants in launch infrastructure. The engineering challenge is to achieve the required thermal performance and extremely high flow rates, while ensuring complete separation between oxidizers and fuel systems. Manufacturing these sub-coolers involves precision deep hole drilling, automated orbital TIG welding, hydraulic tube expansion, controlled tube bending, and stringent cleaning procedures. Quality assurance includes helium leak testing, borescopic inspection, and thermal cycling. We also dispatched two tanks for the U.S. aerospace customer. This is an important execution milestone and reflects our ability to manufacture and deliver specialized equipment for demanding international applications.
Overall, we believe our experience in advanced cryogenic systems, together with our engineering capabilities and manufacturing infrastructure, positions us well to participate in the growing requirement of global aerospace and space industries. Let me talk about new opportunities emerging in the semiconductor space. India's semiconductor manufacturing ecosystem is creating new opportunities for specialized infrastructure, process support systems, and precision engineering solutions. During the quarter, we secured a key order and commenced execution for the initial piping scope as a leading semiconductor manufacturing facility in Dholera. We also submitted bids for larger project scopes, which are currently under consideration. While these larger quantities have not yet translated into confirmed orders, we believe semiconductor manufacturing represents a promising area for the application of our engineering and project execution capabilities. We will continue to engage with customers in this sector and evaluate opportunities that align with the technical strengths and long-term business objectives.
I am also happy to share that we recently have inaugurated an orbital welding skill excellence center under the name SemiOrbit at ITM SLS Baroda University. This institute will provide advanced welding skills to welders, which will help them to become experts in orbital and IR welding, and will make them capable of working in semiconductor fab infrastructure development teams, which require a high degree of precision and training. When we have such a strong order book, our preparedness in manufacturing, execution, and delivery must also be spoken about. As our order backlog grows and the complexity of projects increases, our focus remains firmly on execution, manufacturing productivity, and timely delivery. During September, we dispatched major equipment for the Bahamas project, along with the first two tanks of the U.S. aerospace customer, and equipment for Electra and Great Tobacco projects.
We also dispatched five tanks for the Bahamas project, reflecting the progress made on these international deliveries. Our teams continue to work closely with customers and logistic partners to manage the production schedules, transportation, and delivery commitments. Our priorities remain disciplined execution, efficient working capital management, stringent quality control, and consistent delivery. As we convert our growing order backlog into revenue, maintaining these priorities will be essential to sustaining customer confidence and supporting the profitability growth. Looking ahead, we remain encouraged by the range of opportunities emerging across all our categories. Our strong order backlog is very encouraging. We are also making progress in developing a new application area, expanding international customers, relationship, and strengthening our manufacturing capabilities. We will continue to navigate the external environment with focus on operational discipline, customer commitments, and efficient resource utilization.
With that, I will hand over to our CFO, Pavan Logar, to discuss the financial performance of Q2 and H1 FY 2027 in greater detail. Thank you very much, and wish you all a very happy Diwali and prosperous new year ahead. Thank you so much.
Thank you, Mr. Acharya, and good morning, everyone. I shall here summarize the financial snapshot for the quarter and half year ended September 30, 2026. For Q2 FY 2027, total income stood at INR 467 crore, representing a growth of 26.6% on YoY basis, driven by strong execution across key segments. EBITDA stood at INR 100 crore, up by 10.8% YoY, reflecting improved operating efficiency and better product mix.
The EBITDA margin for Q2 FY 2027 stood at 21.3%. The profit after tax was INR 66 crore, growing 7.8% YoY. The PAT margin came in at 14.2%. For H1 FY 2027, total income for the half year stood at INR 849 crore. This is a record high half-year performance. The performance reflects healthy performance across Industrial Gas, LNG, and Cryo-Scientific division. EBITDA for H1 was INR 189 crore, also the highest-ever half-yearly EBITDA. The EBITDA margin in H1 FY 2027 was 22.3%.
PAT for H1 stood at INR 127 crore. The PAT margin was 14.19% in H1 FY 2027. As of September 30, 2026, our order backlog scaled a new peak of INR 2,268 crore. This reflects sustained order inflows and revenue visibility for the quarter ahead. Of this, 72% is from exports, reaffirming our strong global presence. Our total fund availability as on Q2 FY 2027 stood at INR 384 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 so much.
Thank you very much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may enter star followed by one on their touchtone telephone. If you wish to remove yourself from the question queue, you may enter star followed by two. Participants are requested to please use only handsets while asking a question. We will wait for a moment while the question queue assembles. The first question is from the line of Samir Thakur from Ambit. Please go ahead. Samir, your line is unmuted. You may ask your question. As there is no response from this participant, we will move on to the next question from the line of Mohit Surana from Monarch Networth Capital. Please go ahead.
Good morning, sir, and congratulations on strong top-line numbers. My first question is with respect to the profit margins. If we take out the other income, our EBITDA margin is now around 19.5%, which is roughly 230 basis points down YoY. You mention in the notes that it was because of the product mix, logistical costs, and other reasons. Can you just give some more explanation on whether this is a new normal for the company, or we will revert back to the earlier range of 21%-22% EBITDA margin, excluding the other income? That is my first question, sir.
Yeah, very genuine question you asked. Margin dip is a mix of freight and strategic pricing, and is not structural. H1 EBITDA is 22.3%, within the expected range. Forget about the Q2 FY 2027, but if you consider the H1, we are still within 22.3%. The balance sheet is debt-free and INR 384 crore net cash. I think this is definitely because of geopolitical uncertainties and some freight issues which has ramped up in last quarter. I do not think we will have severe impact because of this going forward. We will be within our range going forward on the margin side.
Understood, sir. That gives us some comfort on the margin recovery. The next question is with respect to orders with respect to ISRO. If you can give some understanding on when this ISRO order can be, when the tender would be published and when we can start bidding for the tenders. Secondly, more on the U.S. space company side, what kind of opportunity we expect? We already have some orders in hand which you are executing, but what the order potential we see in the next one or two years in the U.S. space company?
We see the aerospace and space industry is very lucrative going forward, and a lot of such challenging projects are coming worldwide. As far as question of U.S., we have more than around INR 1,100 crore order booked from the aerospace and space industry backlog we are having. We will be delivering those equipment by next year March, that is 2028 March. Okay?
So we are within our expected timeline and deliveries as required by the customer. As per your request for ISRO, we have bidded for the semi-cryo engine test facility, and we are awaiting the results of the outcome. For the third launch pad, you rightly asked, we are also chasing with the ISRO for a long time. Certainly, this is not in our hand, but we hopefully, another few months, the tender will be out now, and we are preparing in advance for this tender.
Understood, sir. So one last question if I may squeeze in. With respect to the small LNG terminal orders, which you earlier mentioned we are bidding for from Southeast Asia, and that as well as Andaman and Nicobar, any update on those?
Yeah, we are very positive about the Andaman and Nicobar tender. That also will be likely to be opened up. Technically, we are qualified now. On commercial side, maybe another two to three weeks, there will be some clarity. We have already bidded for Indonesia and other projects. Let us see how does we progress on this matter. But we are very positive for projects.
Can you share what will be the amount of the orders, any order size for ISRO as well as this LNG, mini LNG terminals?
Yeah, the ISRO size, what is publicly presented is around INR 3,850 crore, the entire third launch pad. Because of this was like one and a half year to two years old price journey ISRO has released. But because of the changes in the pricing and other things, it may slightly go by 10%-15%. On the FSRU project, yes, it is a very big project for us, but I am not in a position to tell you the exact numbers.
Understood, sir. Thank you so much for this, and all the best for your future executions. Thank you.
Thank you. The next question is from the line of Eshwar from iThought PMS. Please go ahead.
Hi, sir. Thank you for taking my question, and congratulations on the good top-line growth this quarter. You said that the U.S. customer was around INR 1,000 crore share of your order book. How much do you expect to be executed by FY 2027 and how much by FY 2028? Also, in their last earnings call, now that they are public, they announced a massive spaceport in Louisiana. Are we getting any RFPs for that particular port?
Total order which we have received from this U.S. aerospace customer, around 10%-15% will be completed this year, end of March, that is FY 2027, and balance will be spilled over in the next year. In the next year, we wish to complete the assignment, but at least 80%-90% will be definitely done in the next year now. Whatever you ask, this is only a first requirement which they have given us. There are three, four more projects which are in pipeline, and definitely we have very good chances because of our high-end engineering, customer support, and whatever the products we have delivered so far, the quality requirements are very stringent. We have demonstrated our capabilities, so we have very good chances going forward.
Right, sir. My second question would be regarding the beverage tank solution. Last quarter, you had guided the utilization to rise to about 50%-60% by the year end. Are we on track for that?
Yeah, we are on track for the year targets what we have considered. The beauty of our this business is last so many days or months, you can say, we are constantly chasing for approvals with the major breweries. Now out of five, four approvals we have received. The fifth approval, audit visit is likely to be planned in the coming month. The visibility for this product now, and the market is improving. The keg requirement in the world market is improving, and we are seeing a good traction for this product. As our product is approved, wherever we have sent the samples and the first orders we have received. People are happy about the product and the delivery of our equipment.
Right, sir. Right, sir. Good to hear. Thank you. That is all the questions I have.
Thank you. The next question is from the line of Samir Thakur from Ambit. Please go ahead. Samir, your line is unmuted. Please ask your question. Please check if you are on self-mute. As there is no response, we will move on to the next question from the line of Vinil Shah from Dalal & Broacha. Please go ahead.
Yeah. Thank you for taking my question. My first question is on the margin front. We have highlighted that one of the factors which affected our profitability growth was aggressive pricing strategies. But given the complex and specialist manufacturing that we do, shouldn't we have better pricing power and stronger margins? I wanted to understand that why do we need to resort to such aggressive pricing strategies? Also, for the new significant orders that we have had from this global aerospace player, have we followed a similar aggressive pricing strategy? That is my first question.
Good question. See, as you know, we manufacture two types of main products. One is a standard equipment, another is a non-standard equipment. Standard equipments are industry standard, where we have reasonably good competition, whereas non-standard tanks or non-standard equipment are custom-built equipment which require very specialized engineering and execution and project management skills. Definitely our margins are better in the non-standard tanks. For standard tanks, yes, we do have to compete with the worldwide players in the market. We do not say we are very aggressive on competitive pricing to win strategic market share, because we want to maintain our market share in variety of markets. Sometimes we have to work that way. This is only maybe, it is not a regular feature of ours, because there are some equipment which has come up into this quadrant.
But going forward, we don't see that it will be severely affecting our margin. If you see our EBITDA margin for the FY 2027, we are still 22.3% as compared to our earlier price, earlier expected range what we have declared. We don't think that we have any adverse impact because of this. However, you know very well that the product needs, the geopolitical uncertainties, increased logistic cost, all these are playing a vital role in today's scenario, and this is the fact we have to use it.
Okay, sir. Just a follow-up. Could you give us a broad idea like, after all our ordered backlog, current ordered backlog, how much will be the standard order and what will be the complex manufacturing order?
Our out of total backlog of around INR 2,268 crore, around 30%-40% will be our standard, whereas balance will be of custom-built products.
Okay, sir. Sir, just a small question on the semiconductor opportunity. You have told us that there is significant growth opportunities, but could you just help us understand, like, what kind of opportunity are we targeting with this player, and by when shall we expect a meaningful contribution to the revenues?
Yeah, semiconductor we see as a big opportunity going forward, because as you know that India, around INR 1.6 lakh crore projects in semiconductor are already approved by the government, and 12 companies have already started their work. The majority of the work is happening in Gujarat, especially Dholera and Sanand. So almost 70% is happening in Gujarat.
We are very proximity to both the places. So we are very much positive about the progress of these projects, and being very close to the projects, we can give good service to the semiconductor projects. The first project which we have issued is again for the Dholera project of Tata Electronics, and we already started our work. We have already bid for two bigger projects, especially for the ultra-high purity gases and conventional bulk gases. The result will be known in another four to six weeks. So let us hope and cross our fingers.
Okay, sir. Thank you. I will join as we speak.
Thank you. The next question is from the line of Mohit Chugh from Subh Labh Research. Please go ahead.
Hi, sir. Mohit here.
Yeah.
Yes, sir.
Sir, congratulations on good set of numbers. Sir, in quarter two, we have seen a good order inflow. Can you give us an idea of order book pipeline visibility over next few quarters? Would we be able to get such kind of inflows in coming quarters?
Yeah. Order inflow is good, and especially in this quarter, we have issued order book of more than INR 1,000 crore. With this, our backlog is more than INR 2,200 crore now. Yes, this is a very bulky and a lumpy order, I can say, in this quarter. That does not mean that we will continue at the same pace going forward. At the same time, we are working on very complex and very bigger projects. So if something comes up, even we can cross these numbers as well. Let us hope that we get good orders in coming future, in coming quarters, and certainly we will inform you once we have some positive indications on this.
Okay, sir. Good. My next question is on, we entered into partnership with Wayout to build micro factories. Are there any significant developments?
Come again, I could not hear you properly.
Sir, we entered into partnership with Wayout to build micro factories.
Yeah.
Are there any significant developments in that business and in that business, I mean?
Yes. Wayout is a Swedish company which is dealing with micro factories, where these micro factories are basically a 20 ft container which encapsulates all the equipment required for the water treatment, and it gives a clean, hygienic, potable water at the outlet. You can fill up any sort of water, maybe river water, sea water, ground water, or lake water, or tap water, whatever it is. You can change the parameters of the water through the PLC control, depending on the chemical composition or maybe some micronutrients addition or pH value addition or a change we can do. This is a very interesting project for us, and we have started manufacturing the first micro factory at our Savli plant. Recently, the scientists or the experts from the Wayout factory are in our factory.
We are working out how it can be made quickly, because there's a good amount of requirement has come up from Africa, Mexico, and so many other places, and even Middle East and all that. Hopefully, going forward, if we see that shortage of clean drinking water because of the rain shortage this year, and because of people are going for clean drinking or maybe I can say experience like we see in the cinema business also, the old days, people were seeing in normal theaters, now they shift to the multiplexes.
Similarly, this water is also having a good experience that you can have good taste of water with pH values and other things. This is, you can shift that container from one place to other. It can manufacture around 20,000 L of water in a day. It's quite sufficient for around 10,000 people, and that's the advantage of this. We see a very good growth prospects, not only in India, but rest of the world.
Okay, sir. Good, good. Thank you, sir. My last question.
I'm sorry, sir. Could you please return to the question queue?
Oh, okay.
Thank you so much. The next question is from the line of Bhavika Singhvi from Niveshaay. Please go ahead.
Yeah. Am I audible?
Yeah.
Yes, ma'am.
Yeah. Thank you for the opportunity, and congratulations for good set of numbers. So, basically, as you mentioned that the Q2 margin decline was temporarily driven by the higher freight cost and the strategic pricing. I just wanted to understand, as our order book is mostly around INR 1,000+ crores on the space side, and it is more on the U.S. market. So, wanted to understand, will we see the same impact going forward? Also, if you can give the understanding on the margin profile over different segments, and how much margin we generally aim at the space sector, particularly on the export side, though we receive a premium there. I just wanted to understand that even after this freight cost and the pricing pressure, what are our margin we get from the space orders?
I think you asked a very pertinent question here. Regarding this U.S. space order, this is a very complex equipment. This is the first time perhaps the product is being designed for such type of application, and because of the changing demand in the market for heavy payloads that is getting launched. So, margins are relatively better as compared to standard products that we run. Secondly, here our scope is up to the FAS delivery, or EXW delivery rather, EXW delivery. So, the freight cost is in customer scope for this order. So, we do not see any challenges in the freight cost for this project. Going forward, yes, there are plenty of such opportunities coming not only in U.S., but in many other countries, and even in India.
Pertaining to your question of margins in different sectors, definitely yes, we have major three sectors, industrial gas, LNG, and Cryo-Scientific. The margin varies from IG to CST on a higher basis. So, more complex, more critical the projects, the margins are better. The simple standard tanks has a less margin.
Okay. So, we are confident that we will be able to achieve the guided 21%-24% range of margin, which you have said.
Let us see. Hopefully, yes. But present situations are so difficult to predict anything. We always hope for the best and work hard and work backwards to see that we achieve the targets.
Got it. Also, sir, in your initial commentary, you mentioned about the sub-coolers you added in the portfolio and you got a customer for that. Because this is the first time we have been shifting from the storage tank to the sub-cooler, which is a high-end product, wanted to understand what percentage or what is the order size of this particular project and how we see scaling in this particular product and entering more critical products in the space side?
This is a very specific product, I can say. We got almost 16 such sub-cooler order, 12 for LOX and four for methane. This is, I mean, the design is very critical for this project. This is required because whenever you are filling the cryogen into the propellant tanks, the temperature gets increased because of time lapse. Here, these sub-coolers will sub-cool the liquid, maybe oxygen or methane, to a lower temperature and liquid getting transferred from one place to the propellant tank. At the propellant tank, the temperature is to be maintained. This is the function of these sub-coolers. I think going forward, such equipment will be definitely required for all other projects as well. Because the volume of these liquids are very, very high, earlier only smaller satellites were transferred to the space, so small quantity of liquids were handled.
Here, the huge quantity of liquid has to be handled in a very small time. Very high flow rates are required and sub-cooled liquid is required. It's a very challenging opportunity for us and for the world, I can say. We are very confident that whatever designs we have made, we have got our initial approvals from the customer and from the third-party agency.
Okay. Can you mention the order value we received for this product?
Out of the space order backlog, it is around 60%-70%.
60%-70% to the sub-coolers only?
Yeah.
Okay, got it. That is all. Thank you so much.
Thank you. The next question is from the line of Jay Negandhi from Ambit Capital. Please go ahead.
Hi. Thanks for the opportunity. I hope I'm audible.
Yeah, yeah. Thank you.
Sir, just wanted to understand our contractual liability on the dispatch of large tanks, since you mentioned that higher freight costs affected our margins. Is our liability till the Indian port or till the U.S. port or any other country we are exporting to?
The two orders which you are talking about, one is the U.S. aerospace customer and another is Bahamas. Our Bahamas order was FAS delivery, so it was just keeping the tanks across the port or the near the jetty. For the space customer, we have on EXW basis, so all transport and logistic cost to their account. We are quite safe into this, at least for these projects.
Okay, understood. Sir, my next question is on the Dholera semiconductor project. I wanted to understand the size of the initial order that we have gotten, and what could be the potential value of larger orders that we will apply for in the future? Also, does this scope of work apply similarly for OSAT and fabrication projects, or does fab have a larger opportunity in size or vice versa?
That is a very, very nice question you asked. Like you are learning about semiconductors, we are learning about semiconductors. The exact opportunity semiconductor is very difficult to quantify at this stage. The only one thing in our mind was to enter into this sector. Even if it was a small order, the numbers are very small to mention here perhaps. But it was our entry into that market, and with the work of last one and a half month, I can say, I am confident. Yesterday also I visited those guys and they said, "Your team is doing fantastic job on these projects." Hopefully, we should get good orders from this Dholera fab. As you asked for other projects, yes, the quantity of piping which is there almost like 500 km or 600 km in the first phase of Dholera fab.
The quantity is not that high in other projects such as Roswell and other things, but definitely they require cryogenic equipment as well as some piping. Not only this, but there are a lot of data centers which are coming in. These data centers also require such similar type of piping. We are entering into area which is, I can say, very strong in such expertise which is required. What I have seen in the last so many months now, the availability of skilled manpower is not available in this sector. To initiate that, we already started a SemiOrbit Skill Centre near our factory, and we will be supplying at least 30 - 40 welders per month.
Just to give you idea, for a place like semiconductor industry in Singapore, there are around 5,000 welders are required. That is the volume of work which is intended into such type of businesses. We are in the process of developing these welders to take this challenge.
Understood. Any update on the data center cooling prototype?
Data center cooling prototype, we have just designed it now, and it will take around six to eight months for conceptualizing finally.
Okay. If I could just squeeze one more. You have gotten a strong foothold in the aerospace market on the exports front. Can you help us understand how the opportunity pipeline is in the Indian market, or how should we look at it going forward?
The Indian market is also growing very fast. As you know, there are the startup companies are there, mostly four, five startup companies which are working. We have received orders from all of them, maybe small quantities or bigger quantities. Our initiative of working with them and helping them in engineering and establishing the specification, as we have worked for the second launch pad. Everybody is quite inclined to work with INOX India. Whatever the inquiries have been floated by these private small startup companies, we have bagged all the orders. From the ISRO, yes, we are waiting for the final RFP to come now.
Okay. Thank you so much, sir, for answering my questions. All the very best.
Thank you. The next question is from the line of Avadhoot Joshi from Trivantage Capital. Please go ahead.
Hi. Thank you for the opportunity. Am I audible?
Yeah, yeah.
Okay. My question is on the data centers. If we look at what is happening in the U.S., these data centers will be generating power from LNG, and pipelines are being laid out for that to the data centers. Of course, there will be the cryogenic tanks at the end to store the gas for the contingency. Are we looking any orders from that side because that CapEx looks huge into U.S. what is happening? What is happening in that area if you can throw some light on that?
If you see this supply of power to the data centers, it is very important because you require 100% uninterrupted power supply to the data centers, okay? As you see, we have supplied similar and Caribbean, where the power will be produced with the help of LNG as a fuel. The project is big. It may be say 50 MW, there it can be like 200 MW, 300 MW. We have our products ready for such projects, and we are trying to enter into this area as well now. We will be definitely getting some results for that project. Hopefully, this is the most effective way of handling the power requirement with the data centers.
Understood, sir. Second question, as you mentioned about the pipe cost, out of this INR 2,200 crore order book, how much of it is exports? Any split on that side?
Exports?
Yes.
I don't have that number, but whenever it like, our 60% business is to export market. If you see the INR 2,200 crore, almost 50% is to these two, three major customers, where either we have exports or EXW delivery. Balance, when we have that, we have back-to-back agreement with them. If suppose we have in our scope, if the prices are increasing, we definitely talk to the customer and resolve amicably.
Understood, sir. Thank you. That's it from my side.
Thank you. The next question is from the line of Bharat Sheth from Quest Investment. Please go ahead.
Hi. Congratulations, sir, and thanks for the opportunity.
Thank you.
Sir, as I think, I have been listening to you that whether in the space or data center or SemiOrbit and water treatment, then keg for this brewery. Our opportunity side and the new verticals we are entering, that is opening a large opportunity. Can you give some color that in next three to four years, how do we really see our company and what are the challenges to meet and without losing our EBITDA margin range what we are driving?
Okay. Very, very good question and might be very futuristic. Hopefully, yes, we are working on various new areas or sunrise sectors, as you rightly said. We are quite confident because we have the solutions for these sectors. This is not the first time we have been doing such work. We have been doing it for many such projects, such as ITER project, the Launchpad project, the Caribbean project, so many projects we have done it first time. It is our engineering capabilities and manufacturing excellence, and the time to deliver a product has really put us on a forefront in all the sectors
Correct
we are delivering. That is how it is because our name is now among the few which you can count on your fingers, that it is one of the leading company in the cryogenics and providing solutions to the customer requirements. That is the beauty of our company. Certainly, yes, going forward, the business, as you are saying, we are growing at 18%-20% minimum. If some bigger opportunities come, our growth can be much faster than this. Hopefully, we will be a very prominent player into this market now.
And sir, what are the, I mean, the kind of a CapEx or funding requirements that require, and what are the major challenge, I mean, to achieve those kind of, I mean? Second thing that, yeah.
Yeah. The CapEx, whatever is required, we don't have any constraint. We are a debt-free company, and net cash is also very good numbers are there with us. So we don't depend on any other funding requirements. So we do major funding from our own internal accruals. So that is not a problem at all. Regarding the facility, you are asking about the space and other things. So we already expanded our facility to Savli two years before.
We have another 50% space available at Savli. We recently has acquired a land at Kandla near the port, where the construction work is going on, which will be finished most probably by March of this year. So for the next year, we have full-fledged availability of product available from this plant as well. So going forward, whatever expectation we are having or the order book we are having, we are very, very well placed from the manufacturing perspective. Only challenge-
Yeah
The challenge we are seeing is slightly on the people front, availability of skilled manpower and all that. But to cater to that, we have started our own training center, so where we train every month around 40, 50 welders and fitters to take care of the equipment. So we are in line with whatever we want for the future.
Sir, any room for automation? Of course, this is a critical nature, so I understand that.
Almost our 60%-70% of our welding activities and fabrication activities is automated right from the beginning, not today. Wherever all opportunities are there, we are going for a higher level of automation, even digital threads to control and the AI tools which are required, and maybe the IoT tools for the machines, for controls and everything, to see that we have minimum of skills which are required for the production. At the same time, we depend upon the data available, and it is more transparent from our side, so that the operations becomes very easy for understanding and maybe for regular work by all the people in the shop floor.
Sir, with your permission, may I ask one more question?
Mr. Bharat, please return to the question, please.
Okay, fine.
Thank you. Participants, please limit your questions to only two questions per participant. The next question is from the line of Pravesh Kochar from FourLion Capital. Please go ahead.
Hi, thanks for the opportunity. Just wanted some update on the launch vehicle LVM3 bidding, where that is heading. Did we have the site visit, and how do you see the competitive landscape there?
Yes, the ISRO team visited our site. We explained them everything. But still they are in their own reevaluation, evaluation method. Maybe it will take some time, I suppose. It is not so fast on track. But yes, they have approved and seen that INOX is having capability to manufacture this equipment.
Got it. Understood. Any sense of the competitive landscape there? Because some of the other players are already manufacturing other launch vehicles. Do we have a decent chance here?
Yeah, presently they are doing the technical competency only. We are now qualified to that extent, though it is not formally declared so far. Looking to the discussion when they were here, and earlier also we have submitted for such things earlier. That time also we were qualified. The other players, definitely yes, they have lot of money from the perspective of CapEx in addition. From experience in cryogenics, they are lacking. We have better chance into all the bids.
Understood. Second question is, the sub-coolers now that we are going to be supplying to the U.S.-based customer, is the opportunity for some of those heat exchangers in other non-space applications as well? Because that was not a big part of our business earlier. Is that something that you see opening?
There are plenty of such opportunities available, but we restrict ourselves to where we have our competency and where we have, you can say, expertise. Mostly we will focus on the cryogenic type of equipment only.
Yes. I meant to ask this, the cryogenic heat exchangers, which are obviously cryogenic because it's liquid oxygen and methane, sub-cooled. Are these applicable in non-space industries as well, or this is limited to just space?
Normally, no, not required.
Got it. Okay. Thank you, sir, and all the best.
Thank you.
Thank you. The next question is from the line of Divyam Doshi from 923 Capital. Please go ahead.
Hello, sir. Congratulations on the great sales numbers. I just wanted two or three updates. I just want an update on the MRI machine that we had a prototype made for, and the LOX module for submarines.
Yeah. On the MRI, yes, we did the first machine, and that is under trials now. The EOI for five machines is on the works. So once that is released, I think we will get that number. Working with other companies, we already started working with other companies as well. So this project is slow, but we are improving on the feasibility of these products. On the oxygen tank for the AIP system, we have delivered this product to L&T, and it is under final testing. Once that final testing is over, the next course of action will begin for the next submarine, and tanks will be produced.
Okay. Sir, one more question that, can you explain the LIGO order which we got recently?
This LIGO order is basically a device which means like, it can detect the earthquake in advance.
How we know?
Can you hear me?
Yes, sir.
It can detect the earthquake in advance. This is a facility getting developed at Hingoli, near Nanded in Maharashtra. The big order has been received by L&T for around INR 4,000 crore. They are doing a lot of civil work there. The cryogenic equipment supply, some cryopump supply, and many other installations are manufacturing it to our scope. They have not yet decided upon who will do the work at site. We are bidded for that. Let's hope that some more orders will come onto this. This is a very prestigious project, and the one which is available is in LIGO, U.S.A. A similar replica will be done over here with the help of RRCAT in there.
Sir, is this a single project, or will there be more future projects on the same thing?
Because there is some, the circuit or what they say is like, the earth is divided into some zones, and two or three such equipments are sufficient to detect any sort of earthquake all over the world.
Okay.
It is not a It's one of its kind, you can say.
Okay. That is it. Thank you so much, sir, and all the best.
Thank you so much.
Thank you. The next question is from the line of Abhinav Nalawade from ICICI Securities Limited. Please go ahead.
Yeah, hi, sir. Good afternoon. Thanks for the opportunity. Just one question. Half of our order book is from the U.S. space currently. As you mentioned that, 20% will be executed in FY 2027, that is the second half, and remaining 70%-80% will be in FY 2028. So, rough calculation gives me an understanding that, it would be a meaningful contribution in both the second half as well as FY 2028 in terms of revenue from this space, right?
Given the complexity of this order that you mentioned, I mean, it would be fair to assume that these orders will fetch higher margins. Is it fair to assume that, going for and even the freight cost is not in our quote, right? It is in the customer's quote. Is it fair to assume that in H2 as well as in FY 2028, we can assume the margins to trend upwards compared to first half or even FY 2026 EBITDA margins?
Yeah, should be. Should be.
Understood.
As is to improve because of this order.
Understood. Sir, in terms of execution, I mean, you mentioned the complexity is there. In terms of execution, will there be any challenges or any surprises that you may face while executing these orders, which may impact the margins? Any risk to that?
No, the risk is like, it is a first-of-its-kind order and very big size of coolers are there. So, a lot of imported materials is there into this. Thick forgings are required, multiple hole drilling is required, orbital welding is required, cleanliness is required. So, all these areas are very known to us. It is not that something which we are not aware of. Even the design aspect too, we have designed it very nicely depending on the TMR requirements, and the final design is also approved by our customer now.
So yes, there are challenges, but we are mitigating the challenges by proper planning, understanding the product well, and keeping the good quality material and reputed manufacturers, this thing, and training our people, having the trained people from the welding perspective and the test perspective. So, it is a challenge, but let us see, and we are confident that we have handled several such projects in the past with very complex nature very smoothly. So, we will do this project also in a similar manner.
Understood. So just one more question. You mentioned that there is a prospect of additional orders coming from this U.S. space. Any rough timeline in terms of when can we expect these orders? Any idea on that?
No exact response, but I have heard from the X that he wants to deliver, I mean, launch at least 1,000 such rockets every year. That means three rockets a day. So if three rockets per day, one or two launch pads are not sufficient. That much I can tell you.
Understood. That is all, sir. Thank you. Thanks and happy Diwali.
Thank you. Happy Diwali. Thank you, everybody. I think we are over discussion now?
Should we take more questions?
Yeah, I do not know. If you have, you can.
The next question is from the line of Bhavika from Niveshaay. Please go ahead.
Hello, ma'am. I want to-
Yes, ma'am.
Probably a bit better.
Yeah. Yeah. Thank you for the opportunity, sir. Sir, the first question I want that out of the approximate, like the space order which we have, what is the exact order value attributed to the major one U.S. customer which we are talking about, with whom we are like, we will be doing another three to four projects in the pipeline? If you can share that information.
This is the first order where we have like 16 sub-coolers and 16 large capacity 1,500 cu m tanks weighing up to around 450 tons, which we normally use for oxygen and methane storage. This is a project which is put together, LOX and cooler and the tanks is nearly INR 1,000 crore. Out of that, 15%-20% will finish in this financial year and balance will be shifted to the next year. Maybe we will try to finish by March 2028, but something 10% can shift to next year as well. We have-
You say that INR 1,100 crore, the space order is coming from one particular customer only, right?
Yeah.
Okay. Also though, sir, like you mentioned that we are doing three to four projects in the pipeline, though, like you can't give the order book size of that, but can you share the TAM of that opportunity for us? Because as you said that this space order will be lumpy for us. Just wanted to understand that going forward, once this customer announce the projects coming commercialized, how much size of orders we can expect from this particular customer?
I think the opportunity-wise, if you see, if they have one such launch pad getting developed and similar three, four launches, launch pads they will develop in future. So another three to five years, there will be substantially good orders for this customer, provided we deliver the equipment of good quality and in time. So that is the most critical part of this order now. We recently supplied the two tanks in the last month now, and we have almost like every second month or third month, we have dispatches from our place for this project. Hopefully, we will be in a position to deliver as per time and as per the quality requirements. If that goes well, yes, we have pretty good chances of getting the future orders.
Got it. A lot of private players are also coming in the space, right? Especially if I talk about the domestic market. Are we seeing traction from that space? Like how much orders we are getting? Do we having any negotiations going on with those type of players on the private side who are coming in the space sector?
Yes, we are working with all the top five startup private players in India, and we have delivered equipment to almost four of them so far. Maybe small quantities or small value, but whatever the projections they are giving us is very large for next three to five years, maybe to the tune of around INR 2,000 crore-INR 3,000 crore put together with private sectors.
It was our initiative that right from the beginning, we were having the intention to catch them young so that we are into the business, and we never know who will be becoming bigger and bigger. So we are helping them out. As we have good experience on the second launch pad and experience of developing products for the space sector for last 30 years, people are relying on our capabilities. We hopefully get good orders from this private space sector as well as Government of India ISRO department as well.
Got it. Also, second question I have on the semiconductor side. Basically, regarding the Tata Electronics order which we have received for the initial small piping order. It is like not on the opportunity size, like someone have asked, but just wanted to understand what other products we can offer the semiconductor space.
Ma'am, I am sorry to interrupt. Can you take this offline? We would need to close the call now.
Oh, okay. No problem.
Thank you so much. We take that as the last question. I now hand the conference over to the management for closing comments.
Thank you very much for the patience hearing. I hope we answered all your questions. If something is still remaining, you can ask the question in writing to our IR head, Mr. Sunil Lavati. We will be happy to answer this question to your satisfaction. I wish all of you happy Diwali and prosperous new year ahead. We invite you to our factory to visit if you are interested so that we can showcase our capabilities to you. Thank you so much.
Thank you very much, sir. On behalf of ICICI Securities Limited, that concludes this conference call. Thank you all for joining. You may now disconnect your lines. Thank you.
Thank you so much. Thank you. Bye-bye.