Ladies and gentlemen, good day and welcome to the MTAR Technologies Limited Q4 FY 2026 earnings conference call. As a reminder, all participant lines will be in a 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. Irfan Rahim from MUFG. Thank you, and over to you, sir.
Thank you. Thank you, Julius. Good morning, everyone. On behalf of MTAR Technologies, I extend a warm welcome to all participants on Q4 and FY 2026 earnings con call. Before we begin the call, I would like to give a short disclaimer. This call may contain some of the forward-looking statements which are completely based upon belief, opinion, and expectation as of today. These statements are not guarantee of our future performance and involves unforeseen risks and uncertainties. With this, I would like to hand over the call to Srinivas, sir. Over to you, sir. Thank you.
Hello, and good morning to everyone. Thank you for taking the time to join us today. Today on the call I'm joined by Mr. Gunneswara Rao Pusarla, Chief Financial Officer, Ms. Srilekha Jasthi, Head - Strategy & Investor Relations, and Orient Capital, our investor relations partners. We have uploaded our updated investor deck, press release, and results highlights in the stock exchanges and company website. I hope everybody had an opportunity to go through the same. MTAR has achieved record fourth quarter sales of INR 306 crores and EBITDA of INR 61.8 crores with PAT of about INR 44.2 crores. For the year, we have achieved revenue of INR 876 crores with EBITDA of INR 171.2 crores and PAT of INR 94 crores. The outlook for next financial looks very positive and having confidence in execution of orders on hand.
We are raising our guidance for FY 2027 from 50% revenue growth to 80% plus 80% revenue growth, plus minus 5%, with clear EBITDA margins of around 24% for the year, mainly due to our initial expansion of capacities in various sectors in clean energy, which is already commissioned. Apart from clean energy, the oil and gas plant will also be commissioned by September end and will be fully operational. The nuclear and aerospace sectors will contribute in much larger numbers, with nuclear projects being executed this year having strong order book and volume production commenced in aerospace division with certain customers. We can also look ahead with confidence in spite of geopolitical crisis, as we are now well prepared and we are in much stronger position now to achieve the required growth and the required margins as well.
The closing order book for FY 2026 is at INR 2,580 crores. We had given a guidance of INR 2,800 crores. The marginal difference is due to some nuclear orders and the defense orders being deferred to the current quarter, which does not have any impact on our business outlook for this year. We have secured orders of INR 481 crores during the quarter. We are very confident of receiving large orders across various sectors during FY 2027. Also we will end up with a very strong order book by end of FY 2027, much larger than the closing order book of FY 2026. The estimated closing order book would be close to about INR 5,000 crores at the end of the year.
As you're aware, the company has always been strategically positioned to focus on technology-intensive and differentiated products, and we are now witnessing the results of these efforts. Today, exports contribute to majority of our revenues, reflecting the vision laid out way back in 2010. The manner in which the strategic decisions have unfolded reinforces our confidence in the direction we have taken. We are working on several key initiatives, which I will now take you through, and which we believe are expected to deliver significant outcomes in the coming years. Based on the advanced visibility, we have built capacities for our customers in the past, and we will be rapidly building capacities in clean energy sector during the current year and expand capacities as well as in the subsequent years in this sector based on the customer requirements.
We will never face or the customer would never face any kind of bottleneck in terms of the timely deliverables that we're supposed to meet. The teams are actively engaged in rapidly building these capacities, training their employees, and ramping up the operations to meet the customers' demand. Further, we'll be entering into long-term contract with another international customer in supplying key infrastructure assemblies for AI data centers, for which we have already received the first article export orders for INR 35 crores. We have a potential of reaching INR 400-500 crores over the next couple of years. This is a significant development in the area of clean energy sector, which we are really excited about at this point of time.
MTAR has been in civil nuclear program for more than 35 years. Now we have the strongest order book of INR 600 crores plus. All these orders have to be executed over the next 3 to 3.5 years. We do have the capacities to address the orders. We are expecting more orders in the areas of refurbishment of reactors and also new reactors within the current financial year. This again will be on the growth path year-over-year basis based on strong order book and execution capabilities of the company having rich experience in the field over the years. Other vertical of MTAR being the defense and aerospace business vertical. We have orders for more than INR 360 crores. The business has demonstrated tremendous growth and continues to hold strong long-term potential.
We are catering to several reputed MNC customers in this segment, and we have already commenced volume production for some of the customers. We are also working on the first articles at the same time. The first articles for IAI should be completed by September of this year and should enter into volume production by October in the current financial year. We are gearing up our capacities in this sector as well to handle the increased orders from these customers. In the domestic defense business, we are focusing on various programs of defense, mainly in landing gears, structural assemblies for various aircraft programs, actuator assemblies, programs, et cetera. We are moving in the right direction in this segment, and we are very positive of building this segment in a much bigger manner moving forward.
The product division is moving in the right direction with revenues increasing year-over-year basis, and for the current year, we should cross more than INR 200 crores in this segment itself. We are already qualified now for various ball screw supplies to even MNC customers as well during the last financial year. Moving forward, we expect a lot more orders to come in in terms of supplies of ball screws with these MNC customers. Finally, it has been a great year with a positive operating cash flow of INR 150 crores, and we ended with net working capital days of 172 days compared to the previous quarter of 278 days. We'll continue to focus on NWC in the coming quarters as well.
I would like to thank all the team members of MTAR for their exceptional efforts during the year and their continued focus and dedication towards achieving the growth of the company. Moving forward as well, the entire focus is going to be purely on achieving the required growth and delivering the required products to the customers on a timely basis. I would now hand over the call to our Chief Financial Officer, who will take you through in detail with regards to all the financial information of the company. Thank you.
Thank you, Mr. Parvat Srinivas Reddy. Hello, everyone. Good morning. Thank you for joining us on the earning call. We delivered a robust performance in FY 2026, registering a strong growth compared to the corresponding period last year. I would now like to take you through the company's financial performance for the year. Overall, the company witnessed healthy growth on both YOY and quarter-on-quarter basis, driven by strong execution across key business segments. When it comes to the full year performance in FY 2026 versus FY 2025, revenue from operations stood at INR 876 crores in FY 2026 as against INR 676 crores in FY 2025, which is around 30% increase in YOY.
EBITDA reported at INR 171 crore in FY 2026 as compared to INR 121 crore in FY 2025, an increase of 41.7% increase. When it comes to profit before tax, INR 126 crore in FY 2026 as against INR 72 crore in FY 2025, which is almost 75.1% increase in YOY. Profit after tax was at INR 94 crore in FY 2026 as against INR 53.4 crore in FY 2025, registered a 76.2% increase. When compared to quarter four FY 2026 versus quarter four FY 2025, our revenue for this quarter is, quarter four is INR 306 crore in FY 2026 as against INR 183 crore in FY 2025.
EBITDA reported at 62 crore in FY 2026 as compared to 34 crore in FY 2025, an increase of 81% compared to the previous year Q4 . Profit before tax stand at 59.5 crore in FY 2026 as against 18.6 crores in FY 2025. Profit after tax was at 44 crore in FY 2026 as against 14 crore in FY 2025, which is an almost 222% increase on YOY basis. We are witnessing a strong growth across sectors in which the company operates. Amid this positive momentum, the company continues to maintain strong focus on cash flow discipline, prudent capital allocation, and effective working capital management.
Our working capital days stood at INR 172 crore during FY 2026 when compared to Q3 of 267 days, which is supported by various initiatives taken by the company, including better payment terms with the customers. The company is targeting to maintain a working capital level at a similar level by end of the current fiscal year. Our gross margins are at 47.7% and when compared to last year, 49.4%. We are also impacted due to increased input prices of consumables and other freight costs amid the prevailing geopolitical uncertainties. Our EBITDA margin is at INR 171 crore, which is 19.5%. We have guided around 20% ±1%.
21% where ±1% we guided. We achieved 19.5%, which is due to the gross margin impact due to prevailing uncertainties in geopolitical regions, and also increased headcount due to ongoing expansions activities in the company. Our ROC is at 17.2% versus 11.4% in the last year. We are also expecting a significant growth going forward due to increased turnover, and also our margins will improve significantly as our MD has already indicated. We will have a better operating leverage, and also increased turnover will allow us to give contribution to the company. Our PAT is at 10.7% versus 7.8% compared to the previous year.
This also will improve in the current financial year due to increased turnover and margins. Other important aspect we would like to highlight is our cash flow from operations are INR 196.9 crores in this fiscal year compared to INR 101 crores in the last financial year. This is mainly due to the margins, additional margins, and also the better payment terms negotiated with customers. We are continuously monitoring the working capital. In every line item we are monitoring, and we will see that we will achieve the further improvement in the cash flow from operations. We believe that the road ahead is highly promising, and we are actively focused on expanding capacities, diversification into new verticals, strengthening our customer base across all existing segments.
While the opportunities are ahead are exciting, we remain equally committed to addressing potential challenges proactively to sustain our growth momentum over the long term. Thank you everyone for your continued support. We thank you all the stakeholders of the company for their continuous trust and confidence reposing on us. Thank you everyone. Now we open the floor for the question and answers.
Thank you. We'll now begin the question- and- answer session. Anyone who wishes to ask question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from the line of Mohit Kumar from ICICI Securities. Please go ahead.
Good morning, sir. Thanks for the opportunity and congratulations on a very, very good year. My first question is, are you possible to break your revenue expectation of 80% growth or roughly around INR 16 billion, I think revenue you're expecting for FY 2027. How much do you expect to come from the clean energy in nuclear and defense? Broad breakup will be helpful.
Basically the clean energy sector would be around close to about 70%, and the rest would be all the other verticals. The absolute numbers of the other verticals are also phenomenally growing year-on-year basis, which is very good. The clean energy segment is growing much faster. That's where we are.
Understood. My second question is, given your order book, expectation of order backlog of INR 50 billion, which means that expecting order inflow of approximately INR 40 billion, right, in FY 2027. Can you just break up this number also between clean energy, nuclear, and defense, your broad expectation?
No, the orders are going to flow in mainly from clean energy and all the other sectors. If you remember, I've said about the oil and gas. We talked about the defense and aerospace sectors, which we are in advanced stage in volume production as well. The order inflow would come in from various directions for different verticals, but we are very confident of having the closing order book around INR 5,000 crore by the end of this year. mainly in clean energy and the other sectors as well, which we are in advanced stage of execution with various customers, and we have proven our quality and timely deliverables to all the customers in various sectors at this point of time.
One last question on nuclear, sir. Are you seeing the tender for refurbishment of reactor or something like Mahi Banswara tender getting floated? Are you starting to having some conversation around those opportunities?
Absolutely. See, Mahi Banswara is new reactors. It is called Reaction Project in joint collaboration with NTPC and NPCIL. Those tenders are expected this year. The refurbishment reactors we have already quoted and that's why I said that around INR 250 crores of orders were deferred for this quarter. We are pretty confident of getting those orders. It does not have any impact on our business outlook for this year.
Understood. sir, Are there any other opportunity for refurbishment of reactor in the near future in this fiscal?
Yeah, they should be. Yeah. Yeah, absolutely. I mean, it's a continuous process, right? We have a lot more reactors right now, and as and when the reactors are taken for refurbishment, then MTAR has an opportunity to participate in that.
Understood, sir. Thank you.
Thank you. The next question is from the line of Bala Murali Krishna from Oman Investment Advisors . Please go ahead.
As of morning.
Good morning.
Could you please repeat the guidance on FY 2027, FY 2028?
Bala, can you be clear? Because your voice is not that clear.
Bala sir, could you please come more closer to your end, sir? Yeah, thank you.
Yeah. Is it fine now? Yeah. Sir, could you please repeat the guidance part on FY 2027 and 2028?
No, I've said, we are based on the kind of requirements by the various customers that we have and the latest inputs that we have, it is very clear that we have the guidance will be now from Earlier we mentioned that 50% of revenue growth, but now it will be around 80%, ±5% around that area. Also the margins will be around close to about 24%.
sir, on the Bloom side, so we are having some CapEx plans. Are you on track and do you have anything to pass on those plans?
No, we are on track. As I mentioned earlier, in my speech that we have already commissioned the initial phase of expansion, which is very good. We are also training the employees and ramping up the whole thing. That's already done, in terms of the initial phase. Now we are rapidly moving into the additional capacities that, we are planning during the current financial year.
Okay. Lastly, on this AMCA, any updates, sir? The joint venture we have planned, collaboration with, any update on further on that?
There is no further update on that as of now.
Okay. That's all. Thank you. Thanks a lot.
Thank you. The next question is from the line of Renu Baid Pugalia from IIFL Capital. Please go ahead.
Hi, good morning team. Congratulations on this healthy performance. My first question to you is, while one of the largest customer, the clean energy, has rolled out a pretty aggressive multifold capacity expansion plan in the U.S., what would be your CapEx plan over the next 2-3 years? I'm not sure if you can quantify or not, are you also looking for a multifold expansion in your manufacturing capacity? Your revenue growth tend to indicate significant jump in the growth potential as well.
Absolutely, yes. We are, obviously, we had multiple calls, we are rapidly focusing on additional capacity. We are doing that. We can't disclose the numbers as such because we have signed NDA, we are moving ahead with rapidly with multiple capacity expansions required by the customer. That's on track right now. You know, we are focusing, the entire team is focusing on that. Not only on the capacities, but also we are training the parallely training the employees moving forward with it so that these capacities can be utilized with the best of efficiency. Also we are incorporating automation as well wherever required so that the manpower dependency also comes down to a larger extent.
Not everything can be done, we can do automation, but wherever possible we are doing that. More or less we are right on track with what the customer needs, and we are entirely focusing on that. You'll see the capacities coming into play by end of this year and again the next year as well. Everything is on track as far as the implementation plan for building additional capacities are concerned.
Got it.
As far as the CapEx is concerned, it's a rough figure.
Yeah.
We have, we are looking at around INR 250-300 crores of CapEx, which, we are looking at, to build all these capacities, multiple capacities for the customer.
This INR 250 crore-INR 300 crore CapEx is for FY 2027, FY 2028, two years?
Yeah, it's spread over two years, not exactly one year.
Got it. Sure. Just, I'm curious on this side, given that the customer is doing multifold, do you think there could be more vendors which could be added on the supply side? How confident are we on the MTAR broadly retaining its wanted share with the customer?
No, we are really not concerned with that because we know its learning curve is very steep in this and we have enough on our plate. It doesn't really matter to us at all. It's not easy to establish this technology and also to ramp up at the same time. We have been satisfying the customer over the last 10, 15, 12, 15 years now. We have been working with them together as genuine partners. And we strongly believe that we'll adhere to their requirements over the coming years very comfortably. We are not really worried about that.
Oh, super. Second, pretty impressive, I think last a few years, one of the persistent concerns was working capital stretch, and impact on cash flows. Good to see that working capital has finally started to improve cash flows. OCF is near 25% of EBITDA along with growth. The question here is, now that we are looking at significant step up on the revenue side, nearly 70%, 80% plus revenue growth, do we expect these OCF or to EBITDA to broadly sustain at these levels? You've guided for similar net working capital cycle. Are we expecting the advances from customer to broadly sustain going forward as well?
Basically, we have negotiated good payment terms with various customers, not necessarily with one particular customer. Looking at the kind of requirements they have, and we have clearly told them that the terms have to be much better to improve our working capital days and also looking at our operating cash flows being positive. This is a continuous endeavor from our side, and you will see improvements happening during the current financial year as well. We will sustain those margins pretty comfortably right now and we are on track with that. As far as the improved guidance is concerned or the margins are concerned, we are very clear. We have done all the analysis over the last couple of months.
In spite of the current geopolitical situation, we are pretty confident that we are in a much stronger position today to confidently say that we'll be able to achieve this.
Sure. Just last question. While our debt for the year overall has increased to approximately INR 67 crores, how are we looking at the borrowing level or debt levels to be over the next two years, 2027, 2028?
Gunneswara, you want to answer that? Mm-hmm.
Hello. Yeah, presently we need to raise debt for the increased expansion plan. We have considered in our metrics, debt is an option to go ahead as far as today is concerned. Every year we are also repaying and also we are increasing a debt of term loan we are increasing. We are able to negotiate it at a better payment terms, which is INR loans we have negotiated at a better term. For the time being our debt equity ratio is very healthy, so there is no issue of raising a debt. We will see that we repay the debt as fast as possible. The capacity expansion requires a capital. Either you need to go for debt or for raising a capital from the external sources.
We are doing on the debt basis as of today.
Perfect. Any targeted levels for FY 2027 on the debt side, end of the year number?
See, like debt side, today we are at, we wanted to maintain a debt equity ratio of for next 2 years, 0.5, in the range of around 0.5. We'll see how it goes.
Perfect. Thank you and best wishes to you. Thank you.
Thank you. A reminder to all participants, please restrict yourself to two question. The next question is from the line of Soumil Jain from Lucky Investments. Please go ahead.
Hi. Thanks for taking my question. You know, you've indicated multifold capacity expansions on the Hot Boxes side. I understand that you cannot give a quantitative number, but is the number going to be significantly higher than the previously mentioned number of boxes, you know, on the previous calls as you've discussed? If you could give some sense directionally on, you know, the capacities on that side.
Yeah, absolutely. When I said multifold capacity expansions, we are working on it. Obviously the numbers are significantly higher. As I said, I can't specify, quantify the details, yes, absolutely it's on a significantly higher side.
Got it. On Fluence, I see that customer has been dropped from the, you know, the customer list that you mentioned on the presentation. Can you give a sense on, that, project?
I've told this in the last earnings call itself that Fluence is with, they're still deliberating because of the various factors on the duties imposed on batteries and various other things for exports. This is something which we have done the prototype for them, but they're still deliberating it. We have dropped it because we have enough on our plate right now. As and when they have the requirement, we've already done the prototypes for them, so we can move ahead with them whenever they're ready with it. It's still open, but it's not a closed door situation. I think about it unless I see some traction on that. Let's see how it goes.
Got it. Finally, if you could give us a sense of the opportunity size with the new customer onboarded for AI data centers and also on the FBR, as you know, recently mentioned on an interview. If you could, you know, give us a sense in the next two, three years what these businesses could look like in terms of order inflow or execution.
I did mention about the data center infrastructure with another customer as well. That's really a milestone for the company in terms of diversifying and getting more into the AI data center business opportunities that we are doing. We've already received the first articles order for that, which is about close to about INR 35 crores. As I said, over the next couple of years, we'll, if everything goes well, we're looking at almost like INR 400 crores-INR 500 crores of revenues being generated from that. We are looking at a separate, we already have the basic infrastructure for that to deliver the orders for the first articles and as well as certain volume production that they need.
Based on how it goes, we will try to build the infrastructure for them as well in the coming years. As far as the PFBR is concerned, We worked on major assemblies for the PFBR for a long time back, and finally it went critical. Hopefully, we have done a major contribution for that, for that project. As and when the government decides to add in a few more reactors, then we would have definitely an opportunity to work with that as well.
Got it. Can I squeeze in another question, if that's okay?
Yeah, it's fine. Go ahead.
On the oil and gas side, so, some of our other peers have mentioned, you know, signing of major contracts, multi-year contracts with the same customer that we quote. If you could help us understand the opportunity size or the total machine parts procurement with each of these oil and gas customers, and how much is currently being sourced from India, how much can incrementally be sourced from India, and your competitive positioning in that space?
Yeah. As I said, we have done successfully the first articles for the customer, and they really appreciated our quality and the kind of work we have done for them. This on the whipstock assemblies which we have done for them. Obviously, the potential is around $35 million-$40 million over the period of time as and when we get into the major volume production. Also we are adding a lot more customers in the oil and gas. We're just not depending on one customer. We are looking at the other customers, which we have received orders as well for first articles. Going on track with it, and the good news is that the main plant is going to be operational by September. It's like a chicken and egg story, right?
You need to have a real dedicated plant for this, which is going to grow very rapidly over the next 5 to 10 years, the way things are going right now. We are right on time with the kind of facility we have, and this sector would grow very rapidly moving forward as well.
All right. Thanks a lot. I will join back again. Thank you.
Thank you. The next question is from the line of Vipraw Srivastava from Phillip Capital. Please go ahead.
Yeah. Hi, sir. Good afternoon. Quickly, sir, on the hedging policy, sir, given that, you know, we have received a very large other income because of currency depreciation. Any light you can throw on the hedging policy and what kind of other income we can expect in coming years?
VR, you want to answer that, please?
Can you come again?
Sir, on the hedging policy, sir, given that, you know, there is a lot of currency depreciation which has happened and hence we have received other income. What is the hedging policy and, you know, what kind of range we can look at for FY 2027?
On the revenue side you are talking, correct?
Other income, sir. Currency depreciation and other income coming in.
Other income. Today we have INR 25 crores, mainly because of the foreign exchange gain we have received in this year.
Right.
Anyhow, it is a realized, mostly it's a realized, and something is an unrealized Forex gain also is there. In the current financial year also, we have spoken to the bankers, many people. The U.S. dollar will be in the similar range, and it will further, rupee will depreciate. That is what the forecast is showing. That way also we will gain in terms of the, you know, foreign exchange fluctuations will help us because more than 70% our re-revenue is from the exports only. Imports are maximum 30%-35%. Thereby we will gain on this also.
Sure, sir. Thank you. Thanks a lot. Thanks a lot. That's all from my end.
Thank you. Thank you.
Thank you. The next question is from the line of Meet Jain from Motilal Oswal. Please go ahead.
Hello, am I audible?
Yes, sir, you are. Please go ahead.
Yeah. Hi. Thank you.
Yes, sir.
Go ahead.
Thank you for the opportunity, sir. Very good set of numbers and very strong guidance. My one question Most of the questions are answered. My one question is regarding this AMCA jet, landing gear support. Just want to understand, can you throw some more light on this? Okay, what can the quantum of the size and at what level currently are we in this stage, this and which are the customers for this?
Basically it's in the initial stage right now. Sumit, you want to answer this question because you are handling this. Are you there?
It's a INR 4 crore order, Meet.
Okay.
Hello?
Hello. Yeah. Yeah. Please.
Yeah, I was not able to hear you. I was not able to hear you earlier.
Okay. Okay.
It's a INR 4 crore order which we got, and it's the first structural assembly which we managed to win for AMCA. Right now we are floating the tenders for structural assemblies and we have started participating in all the tenders, and we are one of the eight qualified vendors for these structural assemblies.
This is similar to what we were doing along with Adani Group that we didn't receive or this is something different?
That was also for AMCA project.
That is different, and this is different because those are for AMCA. That is for the entire integration of AMCA aircraft. Parallelly, there are tenders going on for structural assemblies of AMCA, and there are only eight qualified vendors who can participate in these structural assemblies.
Understood. Our second question is on this new client that we added, SLB, in both our oil and gas and clean energy. Going ahead, whatever revenue that we record, we'll be putting in the same head of as a fuel cell or we'll be getting a separate head for this?
It will be in the clean energy segment as such, Meet. As far as the data center infrastructure is concerned, as far as the assemblies for oil and gas will go into the oil and gas segment.
Currently, sir, we are doing this prototyping work for them right now, right?
Yeah, that's it.
Okay.
We are doing the prototype work, as I mentioned. We are in multiple segments, not only in oil and gas, but also into the infrastructure building for the data center. Both. They'll go in the respective segments.
Understood. Last question on this, like as you mentioned that we have received some better payment terms, also we see some advances, capital advances that had come from the customers. This will be a normal, let's say, norm going ahead, or this is a one-time advance that we received?
See, it's not about anything. When I say, we're talking about better payment terms, it's multiple factors, right? It is not about advances, it's about better payment terms in terms of trade periods and all multiple factors which we have negotiated. It's not just one customer, it's multiple customers. The way we are growing, we felt that we should we are in a position to discuss with our customers and ensure that we are on track with their requirements, the kind of volumes that grow, growing up, and the demand which has been created. We are able to do that in a more efficient manner right now. This will be a continuous process. There's nothing like one time, as you mentioned.
It will be a continuous thing, and we'll sustain it moving forward as well to maintain our working capital and the number of days and operating cash flows.
Okay. That's good to know. Sorry for just one more question. Sir, the 20% kind of growth that we can emphasize for FY 2027, how it will be backended for H2, it will be major or it will be well spread out between all the quarters?
That's a very good question you asked. If you look at last year, we had a weak first half, right? A strong second half. This year we'll have a very good first half and a much better second half. That's what it's going to be.
Okay, sir. Thank you so much for the information.
Thank you. The next question is from the line of Piyush Sevaldasani from Sundaram Alternates. Please go ahead.
Yes. Hi, sir. Congrats for a good set of numbers. My first question is on the gross margins. There is a 190 basis point sequential dip. Can you please help us understand the reasons for that? Has there been any renegotiations with our customer in clean energy?
Absolutely not. It's not about negotiation on the price, it's about deliverables right now. There's enough requirement by not only in one customer, but various customers that we have. It's purely because of the last quarter was mainly certain costs have gone up because of all of you are aware about certain geopolitical situations. Our input costs have gone up on the operations side. That's very marginal. I think, as I mentioned earlier, we are pretty confident and strong enough right now to, you know, to adhere to the margins that we have said right now, and also the revenues that we have declared, the guidance what we've declared. There is no question of reduction in prices or anything like that. That's out. That's not the case.
Sure, sir. My next question is on the CapEx plan where you have talked about this INR 250-300 crore and the multifold capacity expansion which we have talked about. Sir, this would ideally lead to a much higher asset turn for us versus what we are currently doing. Do you think this?
I think so. Yeah. Absolutely, yes. Right. Yeah.
Okay. Do you think this is sufficient enough to cover for growth for next two, three years?
See, we are going step by step, right? When I say multifold capacity expansions in various sectors, is purely based on the demand what we have, not just for this year, for the coming years as well. We are planning year-on-year basis. That's how we are implementing the whole plan based on the customer needs and, which is very promising for us right now. Since we are in this line for many years, it becomes that much more easier for us to implement the capacities and also to execute them. See, execution is the most important aspect of it. We are pretty confident about it. The way we are increasing our headcount, the management bandwidth, and also training the required people to get them qualified. We are doing that ahead of time.
We always had these capacities in the past as well ahead of time, and which has actually given us a very good result, because of having such capacities, and we are doing the same thing even now. This time around it is purely based on the demand which has been told to us and the visibility which has been given by our customers. That's how we are moving forward.
Sure. Sir, lastly, on this nuclear execution, we have, I think, around INR 700 crores of order book. What kind of revenue should we assume for this year? I think you have said that in next three years we assume the execution of the current order book.
We have to execute over the next 3 and a half years. Some of them are like close to 4 years, but most of the orders should get executed within the next 2, 3 and a half years. You'll see a real upsurge in revenues in the current year moving forward as well as in higher revenues. That's why I mentioned that we are in a very sweet spot in terms of nuclear division because we never had this kind of order book in the past. This order book will continue to grow actually, because even if you look at over the next 2, 3 years, a lot of private players are also coming with this program, nuclear program, which is announced by the Government of India.
We have the enough infrastructure to handle this because we have been in this line for 35 plus years. This will be on the growth path for sure.
Sure, sir. That's it from my side. Thank you and all the best.
Thank you.
Thank you. The next question is from the line of Dhavan Shah from AlfAccurate Advisors . Please go ahead.
Yeah. thanks for the opportunity, sir. My question is on the total guidance. Like, there is a strong visibility from the Bloom plus other segments are also, you know, doing well. What is our internal guidance? By when can we achieve INR 5,000 crores of revenue?
That's a very long run question. Anyway, I can't talk about that right now when we're going to achieve INR 5,000 crores. The way we are moving forward, I think we are on track with that number probably. Let's see. I can't just say anything right now about that, but one thing I can promise you that we are on track with that.
By FY 2030, is it possible?
Hopefully, yes. Let's see how it goes.
Understood.
Commit right now on that. We have a clear roadmap to be where we want to be by FY30.
Understood. How much CapEx do you have to do, you know, to achieve that kind of revenues? Any incremental CapEx apart from this INR 250 crore?
We will be having incremental CapEx year- on- year basis. That's very clear in terms of additions of capacities year on year basis based on clear visibility given by various customers of ours. Each year we'll evaluate that and we'll plan it ahead of time. That's an ongoing process, the kind of growth that we are looking at right now.
As per your estimates, how much CapEx we have to do, you know, to achieve INR 5,000 crore of revenue? Internally, is it like INR 500 crore, INR 600 crore? How much is our internal estimates?
No, we can't exactly specify that right now, but probably between INR 500 crores-INR 700 crores, I guess.
We are also building the greenfield capacity, so that would be enough, you know, to achieve this kind of growth?
Yeah, absolutely. I mean, we are building the infrastructure for the future growth and also, adding equipment in a phased manner based on the requirement of the customers. That should be more than enough.
Understood. When can we see, you know, the operating leverage play out? I think the product mix is also changing, you know, from clean fuel to other segments maybe a year down the line. How do you see the operating margins play out, you know, once we'll achieve the scale?
No, the operating leverage will improve. We'll have better operating leverage because of the kind of revenues or volumes that we're doing right now. It's not only in one product, but multiple products that we are working with the customers. We'll start seeing that from the current financial year itself.
Sure, sir. Okay. Thank you. That's all from my side.
Thank you. The next question is from the line of Gaurav Nagori from Avendus Spark. Please go ahead.
Hi. Thanks, thanks for the opportunity. Just in continuation to the question which was previously asked, can you share more details on what kind of components that you are supplying to these data center solution? Is it part of MEP or part of racks or any more details? What is the value add in those components by MTAR? That's question one. Second is on the execution and the margin risk. Where I'm coming from is that obviously orders inflow is obvious, looking or hearing the commentary of your client, it's given that orders should come in. What we hear is that your peer or the competitor is also increasing capacity in their home market, you are also expanding the capacity as well.
Do you foresee margins kind of be at risk in the longer term or in the near term, because the raw mat and multiple commodities have seen a sharp price hike, it would be difficult for you to pass on these increase in the price to the client. These are my two questions.
To answer the first question, we are dealing with the various assemblies required to build a data center infrastructure, and the value addition is close to about 70% in this area, and it is pretty profitable. It is very specialized job that we are doing, and we are doing the first articles right now. We will know more about it as and when we finish the first article, which is close to 35 crores. That itself is a big number. As far as the capacities that we are looking at, see, we are not looking at competition.
See, the most important thing for MTAR is what we have done over the last 12, 15 years, and how we have partnered with our customers in ensuring that being very innovative in our approach, bringing automation into play, doing various other innovative aspects with the customer. There's enough on the plate for us to work on. The most important aspect is that there is pressure on deliverables more than anything else right now to ensure that we deliver everything what they need, and we are focusing primarily on that.
Okay. Okay. I mean, if you can just elaborate a little bit more on margins, because in this quarter also, we have not seen much operating leverage benefit in the gross margins and EBITDA margins despite a good run rate in this quarter. Given that we have seen a sharp inflation across categories, I mean, do you foresee what gives you confidence that margins would see expansion on these orders inflow?
It's not only about one sector, right? If you look at the current financial year, last year we were working on various aspects in different sectors. In first articles, we are building the WIP for various nuclear programs and all that. We will see the margins coming into play because of not only one sector, but multiple sectors that we are dealing with, right? The kind of volumes that we are looking at this year, like last year we had. It's not about one quarter, right? If you look at last year, we had certain impact because of geopolitical situation. We are beyond that right now because we evaluated everything and we studied that. That's why we have said, you know, we are in a much stronger position moving forward as well.
If you look at the last year, we had a weak first half in revenues last year. This year, as I said, our first half itself is very strong, and the second half would be even much better than that. Obviously, the operating leverage will come into play big time, quarter on quarter basis, as we are ramping up step by step, quarter on quarter basis, for the deliverables. That will help a lot in terms of improving the margins in one given sector. All the other sector also, the volumes are going up in absolute numbers. People talk about percentages, but I would always look at the numbers in how which we are growing in each of these sectors, which is very promising.
That's also contributing a lot to coming with improved margins quarter on quarter basis and ending the year at about around 24% EBITDA margins for the year.
Just to add, our MD's point. See, we have spent almost 28% on the fixed cost, both salaries and other expenditure. With increased revenue, we will have at least 5% operating leverage we are estimating. Definitely there is no issue as far as the meeting the EBITDA targets. Even in the conservative scenario also we have considered.
Okay. Is it possible to quantify how much of the new product development cost is expensed out in P&L in FY 2026?
This is a continuous process. Last year also, we are working on the first articles in aerospace and other things. This year we are completing the mostly all the first articles of all the customers in aerospace. We will have a volume production in the future. With the same set of people and machinery, we are going to do much more revenue than what was done in the last financial year. This first article new product development is a continuous process in the company. Every year we are incurring that expenditure, which is already factored in our actual margins and also what our margins we have communicated to shareholders in this call.
All right. Okay. Okay. Is it possible to quantify in FY 2026 as a % of revenue, how much FY expense as a % revenue is incurred?
Not so, not so much, because if you look at our revenue, mostly, 90% of the revenue is only from the existing products, what we are doing. Only oil and gas already we have done the first article.
Okay.
The facility is coming up in September of this year. We are going to do that production around the next 6 months, we are doing the volume production only because already we have done the 1st article. Other clean energy sectors we have already done. Only in the aerospace 1st articles are happening. This year is almost completing by September. All the September or December maximum it is completing. It is not sizable material amount to quantify. That's what I want to say.
Okay. Thanks for the time. All the best for the future.
Thank you. The next question is from the line of Abhijeet Singh from Systematics. Please go ahead.
Thank you for the opportunity, sir, and congrats on a great set of results. First question is on the nuclear business. Are capabilities and capacities. In the nuclear business, are they fungible across reactor technologies, let's say, PHWR, fast breeder? In case one picks up faster than the other, are we placed to supply, you know, across these technologies? How does the scope change if that happens?
No, all the assets are fungible. You know, whether it is FBRs or PHWRs, that doesn't really matter. The technology is different, but the machineries and all are fungible across both the reactors. That's not an issue at all. We have built our own machines earlier for taking care of the FBR reactors, and we continue to operate those machines, very specialized machines, and they're fungible as well across all sectors. It's not an issue at all.
Right. Sir, you mentioned that you're expecting an order inflow from, another, you know, nuclear different, you know, reactor in FY 2027. The quantum for that would be similar to the one that we received in FY 2026 or, there would be a change?
No. Can you repeat your question?
The order inflow expected in FY 2027 from nuclear, the quantum of that would be similar to that one that we received in FY 2026 of about INR 5 billion.
No, no. We can't quantify that since we have refurbishment of reactors and the new reactors. It depends on the timing of the tenders and when the department would release the order. It'll be a major orders that will flow in, but I can't assure the timing of that. As and when they're coming, yes, the quantum would be similar.
Right. Secondly, on the refurbishment part of the nuclear business. What is the kind of nature of the order? What is the scope of our business in the nuclear for refurbishment orders? How to look at it as from the, you know, perspective of frequency, let's say. Let's say how many orders do we expect per annum in the next 2 to 3 years? Or, you know.
It depends on the refurbishment of the reactor. Yeah. Basically it depends on the refurbishment of the reactors when they are due. We already got some orders of the refurbishment of various reactors. Overall it's 5 reactors. We got some orders on those refurbishment reactors. We're getting some more in this quarter. Basically this for the coolant channel assembly that we are looking at in the refurbishment area, which we have been doing for ages right now. That's an ongoing process. Each time they declare as and when they need to refurbish the reactor and such reactors is an opportunity for MTAR to cater to the requirements of the NPCL to handle these reactors.
Okay, sir. Thank you a lot. That is it from my end.
Yeah. Thank you.
Thank you. The next question is from the line of Aman from Institute Investment Management. Please go ahead.
Good afternoon, sir. My first question is on the nuclear side. We are mostly doing products which are related to, say, machining head and all those things. You had talked about we are also trying to enter Calandria and all those products. Can you give an update by when do we expect the approval and when we can start bidding for such products so our addressable market per reactor also increases?
Technically, we are already qualified for Calandria and end shield. Like for the Mahi Banswara, Achin project, they have intimated to us the tenders will come in this year for that, and which we are qualified for that. We'll be able to participate and this for the first time we'll be doing it. We have the infrastructure, and we are qualified for that right now. We'll be participating in that, and we are expecting the orders in that area as well this year. An increase in wallet share and what we could contribute to NPCIL.
Sure. That is helpful. You had talked about scaling from Q1 itself. Is it on track or there's some delay and only Q2, Q3 we can see scaling of nuclear business?
Nuclear business would scale. Primarily the way we are looking at is by the time we get the raw materials in place and all that, we are working on it. We already have orders, earlier orders where it's an advanced stage of execution. We'll really see the scaling up going from Q2 onwards in a big way.
Sure, sir. My next question is on oil and gas side. You very nicely explained the chicken and egg situation where customers were looking for us to put the plant. Finally, the plant is coming online now, by September. Could you talk about what kind of peak sales we can do from that plant? Also, is there a brownfield capacity expansion that is possible? Because a lot of these customers want big plants, and they have very big timelines, next three, five years visibility. Could you talk about little bit on that part?
See the plant, the way we have built the infrastructure and the equipment and machinery, it's a multi-port plant in various requirements of a number of other customers as well. If you look at 3 to 4 years horizon, we are looking at about the oil and gas plant, which is getting commissioned in September, can grow up to even INR 40-50 crores of revenue in that one plant itself.
That is helpful. Final question on aerospace side. You talked about significant order from actuator assembly, which we are expecting from LCA Tejas Mk-1A stages. Is it like INR 50, INR 100 crore? What is the significant meaning? Is it INR 20 crores?
I think it's about INR 130 crores-INR 150 crores. That we have done it, we got qualified, we have supplied them, and we are doing that. We're expecting that order. We're supposed to get it in the last quarter itself, but hopefully we should get that in this quarter.
Sorry, for, say, X number of this only and this we can expect to be repeated every year, for at least two, three years?
We have to see that. You know, like, basically it's a free issue material. What you're talking about here is, the order what I'm talking about is, the raw material is free, issued, free from the department. It's just the value add what we're looking at. Let us get the first batch of orders, and then we'll see how it goes. It also depends on the programs that they want to set up, right?
Yes, sure. That's it from my side. Thank you.
Thank you. Due to time constraint, we take this as a last question. I now hand the conference over to the management for closing comments.
I'd like to thank, first all the MTAR team members for a phenomenal job done last year, but we're also focusing on the future years as well. The way things are going, we are very positive about what we have and how we are going to grow in the current year and maintain sustaining our margin and as well as the implementation of various capacities, expansions that we are looking at in the current year. A lot of focus is being done in these areas as well. We are very confident of moving ahead and surging ahead with the growth that we're looking at, not only for this year, but years to come.
We have a clear roadmap for at least for the next five years, we have a very clear roadmap on what we need to do to build this company to a much greater level. That's for sure. I would also like to thank all our shareholders, investors for imposing faith in us over the years. Moving forward as well, we would ensure that we will adhere to whatever we have mentioned in terms of our guidance and as well as the margin profile that we have explained. Thank you so much all of you for sharing your time to join us in this earnings call. Thank you so much.
Thank you. On behalf of MUFG Ti- Intime, that concludes this conference. Thank you for joining us. You may now disconnect your lines.