Ladies and gentlemen, good day and welcome to the Tempsens Instruments (India) Limited Q2 FY 2027 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this 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. Mohit Kumar from ICICI Securities. Thank you, and over to you, sir.
Good afternoon. On behalf of ICICI Securities, I welcome you all to the Q2 FY 2027 earnings call of Tempsens Instruments (India) Limited. Today, we have with us from the management, Mr. Vinay Rathi, Managing Director, and Mrs. Priyanka Menaria, CFO. We will begin with the opening remarks from the management, which will be followed by Q&A. Thank you, and over to you, sir.
Yeah. Thank you, Mohit, and good afternoon, everyone. Before we begin, a brief note. Some statements made by me on today's call may be forward-looking and are based on management's current expectations. They are subject to risk and uncertainty, and the actual results may differ materially. Our H1 FY 2027 results are unaudited and have been subject to limited review by our stat auditor. Where we refer to peak revenue potential of new capacity, this is indicative revenue at full utilization. It is neither a forecast nor guidance. All figures we discuss today are consolidated and compare the first half of FY 2027 with the first half of FY 2026. H1 FY 2027 includes Tempsens Germany, Tempsens Polska, and Tempsens Measurement and Control, which were not part of the group in H1 FY 2026. Please refer to the disclaimer in the investor presentation filed with the exchanges.
Thank you for joining our second earnings call and our first since listing on NSE and BSE on 28th August. Second, yeah. In the first half of FY 2027, our consolidated revenue grew 33.7% to INR 255 crores. Exports more than doubled to about 37% of our product revenue. EBITDA grew 12% to INR 55 crores, and adjusted profit after tax grew 17% to INR 38 crores. For those who are new, I would just like to describe what we do. We measure temperature, we generate heat, and we connect it. So our three verticals, temperature sensing, electrical heating, and specialized cables, often serve the same customers in the plant. What we make is engineered, made to order, made in India, supplied to the world. So first, the listing. Our IPO included a fresh issue of INR 95 crores.
We have used INR 55 crore of it to repay debt as set out in the offer document, and our borrowings now are about INR 41 crore, roughly half of what they were in March 2026. Second, our international business. Exports more than doubled in the half, driven by addition of Tempsens Germany and Tempsens Polska, and by sustained organic growth in our three export markets. We also added a new office in Ajman in UAE to serve customers across Gulf. Third, several products we spoke about earlier are now having a firm start. High-temperature wiring harness for an OEM customer, standard furnaces for a life science OEM customer, and our laboratory furnaces. The standard furnaces are now ETL and CE approved. All the supplies are beginning in the second half of this year. Let me take you through all the three verticals, our export and our capacity expansion.
First of all, let us speak about temperature sensing. Temperature sensing revenue grew 57% in the first half to INR 133 crore. It is now 53% of our product revenue. Part of this growth has come through the entities we have consolidated in this year. Organic growth in this vertical is about 25%. The organic growth is led by thermal power plants and other OEMs, including CVD equipment manufacturers. We are now ramping up dispatches of sensors for fuel cells. Our order pipeline from the traditional business and the new OEM business remains firm and healthy. We also launched the EDGE Series of non-contact pyrometer, also a combined thermal and visual camera for temperature monitoring and surveillance. We are also adding a brownfield plant of 50,000 sq ft within unit one for contact sensors, mainly for the OEMs.
This plant remains on track to be completed by Q3 of FY 2028, with a peak revenue potential of INR 120 crore from this plant. Coming to the second section, electrical heating. Electrical heating revenue grew 44% in the half to INR 47 crore, led by significant oil and gas dispatches in India, Southeast Asia, and Middle East. Two milestones from the first half. First, we completed a major certification for furnaces for supplies to our life science OEM customer, the supplies of which will begin in the second half. Secondly, these laboratory furnaces are now ETL and CE approved, with bulk dispatches starting from Q3 of this year. We are also adding capacity of about 25,000 sq ft for custom-built large furnaces. Second important area in this field is Mid-Voltage heaters, where we see these are central for electrification of large processes.
We continue our expectation of certification by Q4 of FY 2027. The new plant of about 50,000 sq ft within unit six is on track to be completed by Q1 of FY 2028. The peak revenue potential of this new plant will be INR 200 crore. We are also in final stages of discussion with the automotive manufacturer for prototype contract for supply of AdBlue heaters for commercial vehicles. These would be used for emission control. We see high sales potential in this application, and we will share more once the contract is finalized. Coming to the third part of our product offering, specialized cable. Specialized cable grew in the second half to about INR 74 crore, as the business recovered from a softer first quarter.
We executed orders in thermal power plant, oil and gas in Africa, chemical in India, and supplies for our UL-certified high-temperature wire harness to OEM customer will begin Q3 of this year. We are prospecting to them, to the same OEM that buys our sensor. Our oil and gas approvals in the Middle East are progressing well, and we expect to open newer export markets with these approvals. Unit eight, our new cable plant, is on track for completing in Q2 of FY 2028, with peak revenue potential of about INR 60 crore. Also, our 50/50 joint venture with Victura has signed an agreement to acquire a facility of about 80,000 sq ft, expected to be commenced by Q4 of this year, with peak revenue potential of about INR 120 crore. Coming to export.
Export revenue more than doubled in the first half to INR 94 crore, which is about 37% of our total product revenue, against 25% last year. Tempsens Germany and Tempsens Polska contributed alongside sustained growth in Southeast Asia and Middle East. Organic export growth is about 45%. Domestic revenue has grown about 12% to INR 159 crore. We are also onboarding senior professionals from our industry overseas to strengthen our presence in the global market. Coming to capacity expansion. We are adding five projects which are commissioning between FY 2027 Q4 and Q3 of FY 2028, with the aggregated peak revenue potential of about INR 500 crore at full utilization. All five are on their announced timeline, and this is a potential and not a guidance. With this introduction, I will hand over to Priyanka to take you through the financials.
Thank you, Vinay sir. Good afternoon, everyone. All numbers which are shared are consolidated for the first half of FY 2027 against the first half of FY 2026. I will cover growth, margin, profitability, and the balance sheet and cash flow. Revenue from operations for the half was INR 255 crore, up by 33.7% from INR 190.7 crore. Total income was INR 259.4 crore, up by 33%. These numbers include Tempsens Germany, Tempsens Polska, and Tempsens Measurement and Control, which were not in the base period. Margin. EBITDA for the half was INR 54.9 crore, up by 11.9% from INR 49.1 crore, at a margin of 21.2% of total income against 25.2% last year. Our gross margin of the first half was 45.7%, broadly in line with our full-year level of 46% FY 2026. Employee cost grew 41% to INR 42.1 crore for main three reasons.
We are building teams for new capacities, we invested in strengthening our corporate structure for future growth, and we added the newly consolidated entities. Employee cost also includes an ESOP charges of INR 1.1 crore against almost nothing last year. Other expense grew 37% to INR 25.6 crore. Profit before tax grew 11.7% to INR 44.5 crore. Finance cost was flat at INR 2.5 crore. The full benefit of the debt repayment will show from the next quarter. Profit after tax for the half was INR 35.7 crore, up by 18.1%. I want to be clear here, our tax charges includes a deferred tax credit of INR 1.3 crore, leading to the tax benefit on IPO expense. This is one-time item. On the balance sheet side, our IPO include a fresh issue of INR 95 crore and the net proceeds of the company were INR 87.3 crore after issue expenses.
We have used a full INR 55 crore against the debt repayment. Our total borrowing at September 30th was INR 40.7 crore against INR 77.9 crore at March 31st, 2026. Our debt-to-equity ratio is now 0.06 x from 0.15 x. Of the remaining net proceeds, INR 7.5 crore is for capital expenditure in electrical heating and specialized cables, and INR 14.1 crore for general corporate purpose. Both were unutilized at the time of September 30th. Cash and working capital. Our operating cash profit before working capital changes was INR 50.7 crore, up by 16.2%. Inventory rose by about INR 28 crore in the half to INR 139 crore to support the growth in our business. Receivables were slightly lower than in March at INR 83.1 crore, even as revenue grew.
Capital expenditure for the half was INR 36.7 crore, of which INR 26 crore was leasehold land for the expansion of specialized cables.
The rest went into the plant and equipment, INR 5.9 crore, and project under construction at INR 4.8 crore. With that, I will hand back to Vinay.
Thanks, Priyanka. We continue to expect revenue growth this year to be in line with the blended growth over the last three years. The first half is tracking ahead of this range, helped by entities we consolidated. On profitability, the first half carried our investment in people, capacity, and corporate structure, made us ahead of growth. As supplies of harness cable and furnace start and the OEM sensor ramp-up in the second half, we expect the profitability to improve progressively. To sum up, in the first half, revenue grew by a third, export more than doubled, EBITDA grew almost 12%. Our balance sheet is stronger after IPO, and several new products and projects being begin supply in the second half of this year. We see a strong second half now. We are engineered, made to order, made in India, made for the world. Thank you.
We are happy to take any questions.
Thank you very much. We will now begin the question -and -answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, let's wait for a moment while the question queue assembles. The first question is from the line of Naman Parmar from Niveshaay Investments. Please proceed.
Yeah, good afternoon, sir. Thank you so much for the opportunity. Firstly, I wanted to understand overall only specifically on the gross margin side. Currently in the quarter that there was a very big blip in the gross margin compared to previous, right? What would be the reason for that? Even though your order book are for three to four months, right? Your major orders are at a fixed price, so raw material prices impacted, and going forward, what to expect similarly?
Naman, the gross margins, if you see from the complete financial year last year, are near to that number, maybe about a percentage more than the consolidated, like complete last year's number. Overall, if you see in the complete financial year, it will be in line with the last year's number, maybe a percentage here and there. We don't see anything about the current fluctuation on the pricing because that is built up in the prices for the customers.
Okay, got it. You expect that this margin is sustainable going forward and it will improve on?
Yes.
Okay. Secondly, like you mentioned about the fuel cell has been started, right, in the current quarter. How other product that you are tapping for that and where you are supplying specifically in the fuel cell, if you can elaborate more on that side?
These temperature sensors are used in any kind of process. For controlling the temperature or knowing the temperature inside the vehicle, we are providing these temperature sensors. The supplies have started in the last two months, and we are ramping up in the direction which is meeting the customer's requirement. Secondly, we are also now getting our cable harnesses approved for these customers to be supplied for the same customers.
Okay. Got it. That was important. Lastly, in the total revenue, how much would be contribution from the MRO? If you can help me on that side.
The MRO business will remain as it was in last year. Our contribution to MRO business would be in the line what it was in the last year.
Around 25%-30% down?
Yeah, around 25%.
Okay. If you can give the breakup as well for the temperature sensor, heating solution, and specialized cable, how much margin that can be in all the three divisions. It will be very helpful for me.
Naman, we are not providing the margin breakup for the three divisions, but overall, I would say that the sensors and the heaters would have a comparatively larger margin, gross margin than the cable division.
Okay, got it. Thank you so much for answering my question.
Thank you.
Thank you. A reminder to all participants, anyone who wishes to ask a question may press star and one on their touchtone telephone. The next question is from the line of Abhinav from ICICI Securities. Please proceed.
Hi, sir. Thanks for the opportunity. My question is on the revenue growth. What I understand is we have existing products which we expect to grow steadily. Secondly, there will be contribution from the new products as well as capacity expansion that is undergoing. Just wanted, what is the revenue potential from these two verticals? That is the new capacity that we are expanding as well as the new products that we are launching, the likes of Mid-Voltage heaters and all that.
So, I would say mostly it is the same products which we are trying to go to more number of customers, and secondly, OEM customers for the same product range. Mid-Voltage is a new product which we will be launching mostly by the next year. There is a huge demand of the Mid-Voltage heaters, but we don't have an exact number of our revenue percentage right now because this product will come into our basket only after the approval cycle is complete, and we would be having it in the next financial year.
Got it. So my second question is on the employee expense, which have increased in the last couple of quarters. I understand that there have been certain employees that have been hired, and the revenues will flow in subsequently in subsequent quarters. One, do we expect the expense to be at this level, and by when exactly we can see some benefits of this? If you can just give us a timeline as well.
Yeah, Abhinav. So, we are continuously ramping up our capacities and increasing the capacity and also the manpower against to increase capacity. So, in the next half year, we will see the absorption of those expenditures towards the revenue, and from next year, it will be completely absorbed for the particular fiscal year expansion.
Understood. On the interest expense side, since you've mentioned that the debt has been repaid from the IPO proceeds, what will be the net interest on a quarterly basis going forward?
Like, you can expect at least 1% increase in the profitability due to the finance cost impact. It will be reduced.
Understood. Lastly, on the electric furnace part, are we seeing some impact of the ongoing conflict? Do we see some things improving going forward, particularly on the electric furnace segment?
Electric furnace, we got our ETL approval, which is equivalent to UL approval, and also the CE approval, which is IEC approval. Now the supplies are starting to this life science customer, and the ramp-up is taking place. We made the first supplies in October, and it will be ramping up to its potential by March. Secondly, we are also building up another capacity for the larger furnaces, which are not standard furnaces, but for larger process furnaces. We see furnace to be a substantial part of our revenue in the next year.
Understood. Thank you, sir. I'll come back if you have said anything more. Thank you.
Thank you.
Thank you. The next question is from the line of Pratik from Union Mutual Fund. Please proceed.
Yeah. Thanks a lot for giving the opportunity. Many congratulations, Vinay ji, Aryan, for a good set of numbers. My question was on the opportunity on the fuel cell business side. How meaningful can this business evolve into for us over next two, three years, considering there is lot of demand in the U.S. and in the globe for this sort of a technology? What sort of order book or visibility do you reckon we can have over next, say, three, five years' time?
Yeah, Pratik, this OEM business is getting a significant part of our business, and we expect this OEM business, either from fuel cell or with this emission control kind of jobs that we are doing, to be about 15% of our revenue in the next years to come. Specifically talking about fuel cells, we are ramping up to meet the customer expectation. We have got orders for almost a year from the customer, and this is what we see. Once it ramps up, it could be a substantial business for us.
Got it. Second, you mentioned briefly on a new potential, you are working on a new business on the CE customer. You mentioned also thermal side, a lot of traction may come through over time. Considering the opportunity on the oil and gas, because of the Middle East, where there is lot of refinery getting disrupted, et cetera. In this sort of vertical power, specifically thermal and oil and gas, and this new opportunity, how should one track this, like, in terms of opportunity for us?
We have a good chance of the traditional industry where we are serving, which are heavy industries, power, oil and gas, and all these kind of industries. Once this disruption, because of the political situation in Middle East gets a little bit resolved, we see a huge potential would be there for tapping for additional opportunities in these markets. That is one. Secondly, the OEM market is becoming very important for us. That started with this fuel cell kind of thing, supplies for the temperature sensors. Also now we are getting the cable harnesses for this customer. Then this life science opportunity what we have for supplying furnaces. A third major OEM opportunity also is there with our joint venture with Victura, supplying the emission heaters for the exhaust for, again, commercial vehicle.
Coming in the same line, we are also working on a huge opportunity on the AdBlue heaters, which is again for commercial vehicles for emission control. That is still in a prototype stage, and it will take about a year to materialize. We see that these OEM opportunities would become a substantial part of our total offerings, other than the heavy industries project and the MRO business what we are doing currently.
Got it. Vinay , considering so much opportunity lying ahead, and revenue growth momentum being really strong for us, and the way we are putting CapEx as well. Whatever front-loading of cost we are seeing in the first half, higher, because gross margin are holding up pretty well. It is employee cost and other expenses which has been front-loaded. Hopefully, logically it should get normalized in a couple of quarters at that 24%-25% margin run rate which we were doing earlier, should be back. Is my understanding correct?
Yeah, that is correct, Pratik. Overall, we will be coming to the similar margin, but some of the entities also what we added were having higher manpower cost, but blendedly it will come to the same consolidated margin what we were having in the previous years, almost in the same side.
Understood. Thanks a lot. Wish you all the best and a happy Diwali to you. Yeah, thank you.
Thank you. Happy Diwali to you.
Thank you. A reminder to all participants, anyone who wishes to ask a question may press star and one on their touchtone telephone. The next question is from the line of Arvind Arora from GK Capital. Please proceed.
Hi. Thank you for the opportunity. Sir, could you please share the current capacity utilization, and what is our mix on standard and non-standard product?
Arvind, our capacity utilization would be close to about 80%. What we do is completely make to order, so exactly we cannot give an exact capacity utilization. In general, we can say that it is about 80% capacity utilization. Can you repeat the Like, today, most of what we do is make to order, and the standard products are now getting in because of this OEM business, which is very much standardized, and also we have got greater visibility for this OEM business. But most of that we do, I would say that 95% of what we do is make to order as on today.
Okay. The OEM order extends after you confirm the order, correct? As of now, you are saying it's, you are still under discussion. Is my understanding correct?
No. As I told you, the sensor for the fuel cell is confirmed, for the life science is confirmed. Also, our joint venture with Victura has a confirmed order for the exhaust temperature, exhaust heaters. So these are all confirmed OEMs, but we are in a very close discussion. We already have also few orders for the cable harnesses for the fuel cell. We are in almost close discussion for the AdBlue heater OEM. So, most of the orders that we told are already with us, and the ramp-up is taking place.
Understood. What is our current order book?
Current—
Traditional business, the order book is approximately three to four months, and for the OEMs, we have visibility approximately one or two years.
Okay. Understood. What is our plan on R&D spend? What is our budget for the year, and where we are focusing it? You can explain that part as well. That would be helpful. That is all, sir.
R&D remains the main focus area. As we already told earlier that we have got today about 80 people working in R&D. Constantly, we are adding on IT. The major part what we are working on is first is thermal, second is mechanical, and third is electronics. A major delta item what we see on the R&D side is the development of the non-contact temperature sensor, which is already developed. Also, the thermal cameras in that side for industrial segment. The second major delta what we see would be created by the Mid-Voltage heater, which has got a TAM of almost close to maybe $600 million-$ 800 million TAM. That's a big area that we can attempt.
Okay. Understood. Thank you.
Thank you.
Thank you. The next question is from the line of Neel Mehta from ICICI Securities. Please proceed.
Good afternoon, sir. Thank you for the great set of numbers. My question is simple. Can you speak on the TAM opportunity of the new? How is it different from what other auto ancillaries, radiator companies are doing? Can you also, I remember you mentioning something in an ET Now interview. Can you also speak on that opportunity?
Neel, can you please repeat the question? Because you skipped a few points.
My—
Hello? Neel?
Hello? Am I audible?
Yeah. Can you please repeat?
Yeah. My first question is, sir, the auto OEM opportunity that we are doing with the commercial vehicles, how is it different from any other radiator company that an auto ancillary company is doing?
Yes. The thing is, we are making, like, what we are doing is temperature sensors, electrical heater, or specialized cable. This automotive requirement is for specific heating cables, which is used in the exhaust for reducing the emission which is going out of a commercial vehicle when you are starting the vehicle. These are as per the newer emission norms which are yet to be enforced. The opportunity is different from a radiator or any other manufacturer. We are only tapping in opportunities where these kind of electrical heating or temperature sensing opportunities are there. One of the opportunities what we already have today and what we found a joint venture is for the heaters for the exhaust. That is already done, and we have got a long-term contract, together with our joint venture partners, to supply to this commercial vehicle company.
The second opportunity that I told that we are working on is for the AdBlue heaters that we are working with a European company. Like, right now, it is in the prototype stage, and once that is finalized, this could turn out to be again a larger opportunity, almost the same size as the exhaust heater opportunity.
Got it, sir. Got it. Very clear. And sir, something on Victura Technologies JV that we had mentioned in quarter one. Something to add on there?
There is no JV with Victura Technologies. We have a JV with Micro-Epsilon for infrared pyrometers and industrial thermal imagers. So that JV is very much there. The newer products are already developed. So we are in the final stages of transferring their products to be supplied from this joint venture. So it is in the final quality stage to be approved by their quality system.
Got it, sir. Got it. Thank you so much.
Thank you. The next question is from the line of Gaurav from JM Financial. Please proceed.
Hi, sir. Thank you for this opportunity, and congratulations on the good set of numbers. My question is particularly for quarter two. Specifically, the gross margins, they have come down in this quarter. As you said, I believe that company will be able to manage that gross margin similar to what we have seen in FY 2026. But particularly in this quarter, can you highlight, was it because of fluctuation in raw material prices, or was it a strategy to pile up inventory because of which we are taking a little bit of hit on COGS this quarter?
Yeah, hi, Gaurav. Gaurav, in this particular quarter, we see new joint or at least new acquired entities also merged. That's why for these entities have a lower gross margin comparative to the Tempsens India, which we have standalone. That's why a little higher is there. Also, in the last year, in last FY 2026 half year, we have executed one of the defense order, the big defense order, in which the gross margin is very high. That's why in this particular year, FY 2027 half year, it's increasing the gross margin. It will recover once the dispatches of our heater businesses and the furnace businesses is green, so it will be gradually come down.
Okay, that was clear. Thank you so much.
Thank you. The next question is from the line of Arnab Bhattacharjee from an individual investor. Please proceed.
Hi, team. Am I audible?
Yes.
Yes, sir.
I had a few questions, two questions rather. The first question that I had was, I want to understand how you guys are emitting the temperature data. Is this on the internet, Internet of Things, or is this just an old traditional way of someone looking at the temperature from your temperature sensor and then taking a manual step? Or are there software tech triggers? Basically, how do I take an action when I see the temperature is high enough? For example, let's say for fuel cells, there will be lots of fuel cells, right, that is powering our data centers. I don't think there's a manual action there. So someone has to consume that data which your device is emitting and then take a follow-up action, either turn off the heat, lower the voltage. So I wanted to know how that part of the integration happens.
Is your team into it or it is on the consumer to do it?
Mr. Bhattacharjee, the thing is, these temperature sensors are part of an automation system, instrumentation automation system. What it does is, it supplies this signal, electrical signal to automation system, which could be a PLC, DCS, or a controller, which then would control the heat source, which could be a heater or which could be a furnace, oil, or it could be any other fuel. It is part of an automation system, and this automation system is not what we do normally, but in some cases, we supply these automation systems. For example, when we are supplying the furnace, we supply the sensors, the automation system, and the heater. That is the complete thing what we supply.
Most of the cases, most of our supplies in either sensors, those kind of specialized cables, or even the heaters, we supply these components, and they would go to be a part of the automation or electrical system of the customer, or any other EPC or project supplier.
Understood, sir. Thank you. The second question is, I think, you want to call yourself R&D-enabled manufacturing team, right? I saw that you guys have a significant concentration of employees who are contributing towards R&D. I wanted to understand, firstly, which divisions they are catering to. Is the entire R&D team working on thermodynamics, or is there a blend of different engineering divisions? The second thing I wanted to know, how do you split your R&D team between the people who are working on adjacencies, improvements, adjacencies, and new products? Is there a split? I mean, a theoretical split is enough. How that shows. I just want to know, how the future of the company is shaping. Are you guys trying to get into newer products which are more complex with higher gross margins, or we are just trying to work on top of what we have?
That's the basis of the question. Thank you.
Right. Mr. Bhattacharjee, the thing is, as I told you, we are working in three major domains, electrical heating, temperature sensing, and specialized cables. So all our R&D team is focused towards these three divisions, and we are technology agnostic. We have people who are expert on the thermal side, people who are expert on the mechanical metallurgy side, and the third thing is the electronic side. Blending of these three technologies would result in a particular product or enhancement of a particular product. We don't have exact number of how much would be on enhancement and how much would be a new product. As I told you, the major delta items are like this Mid-Voltage heaters, where there are very limited number of players on the world market.
Obviously, once those are already proven in our lab, and once it is approved with the agency, with the certification, then it could have a larger delta for the company. Similarly, the infrared pyrometers and the thermal imagers that we are doing. That would also create a larger delta for the company, and that is true for the other products as well.
What is the application of this Mid-Voltage heaters? Which systems do they go into?
They are used for electrifying larger processes. Right now, we have got low-voltage heaters, which can be powered at 690 V, but now we are working with heaters which can be powered up to 6.6 kV. They can power up processes even up to 20 MW. And right now, we are doing up to 3 MW. Larger processes can be electrified, and this is the need of the hour for a lot of standard industries like petrochemical industries or also for the newer kind of industry for energy storage, carbon capture. That's a huge application, electrical boilers that we can cater to.
Thank you, team. That's all from me. And congratulations and all the best to you guys.
Thank you.
Thank you. A reminder to all participants, anyone who wishes to ask a question may press star and one on their touchtone telephone. The next question is from the line of Naman Parmar from Niveshaay Investments. Please proceed.
Yeah, thank you so much for following up. Just wanted to understand on the TAM side only, if you can help me understand about the opportunity size for all these three-fold industry that you are going to tap going forward, and how much percentage of the revenue would be contributing from this, like your automotive, the life science part, the fuel cell part, and the battery energy storage. If you can help me understand on TAM and the revenue percentage going forward, it will be very helpful, sir.
The TAM on the automotive side, this could be a pretty large number, especially for the commercial vehicle, because that is kind of still in the increasing trend. The global market size, like we have got for the totality, not exactly for a particular segment. We have got the totality for the electrical heating cables and sensors, but specifically for fuel cells and also for automotives, specifically, we don't have an exact TAM number as of now.
Okay. Okay, got it. Okay, thank you, sir.
Thank you. The next question is from the line of Suraj Jain, an individual investor. Please proceed.
Hi, sir. Thank you for the opportunity. Just want to know, how this customer base is going to change after the capacity expansion across like oil and gas industry and power industry?
Suraj, what we are trying to do is, we have our traditional growth engines, which are the heavy industry, be it petrochemical, power, glass, all those kind of industries. Then on top of it, we have got a lot of OEM customers that we are trying to add. Overall, what we see is that within the next three years, we would have 80% traditional customers and maybe about 20% would be these kind of OEM customers, which have got a larger visibility, a standard product. That would be the kind of blend what we see as of today. Right now, all the products that we do are made to order, specialized for the customer. But we see that this would be about 20% of what we do, and sorry, 80% of what we do, and 20% would be the standard products.
I can see like in power, your major is like the power industry and cement industry and all those things. Capacity is going to come under this major industry only, going to cater this major industry only.
As I told you, two parts. It will be covering all these industries plus the OEM parts. OEM could be from multiple industries. We have categorized like heavy industries, which is like our typical customer base, cement, steel, power, petrochemical. Those are our standard customer base. We are expanding not just in India, but worldwide with these set of customers. And we are adding on top of it a lot of OEM customers. And these OEM customers are coming to us because of the scale what we have, because of our backward integration. And third is like also the China Plus One is also playing out after this political scenario is changing. People are also looking on diversifying their supply chain and taking India very seriously to be a serious supplier for their needs of engineered products.
One more question, like how much incremental revenue you are getting from the Germany and Poland acquisition, and are these profitable or not?
These are profitable entities, and the incremental revenue would be about INR 300 million.
The incremental revenue from these entities is approximately INR 25 crore-INR 26 crore.
INR 25 crore-INR 26 crore. Whatever capacity expansion we are getting, it is within India only. There is no other capacity expansion outside India?
No, we are doing capacity expansion in other areas also. We just added a sales office in U.A.E., and also in Poland and Mexico, we would be doing the capacity expansion.
Sir, do you think like this export market is going to increase at the same pace as currently we are having like 50% sales we are getting from export? So that pace is going to increase?
That base, one, it has increased because of the addition of these newer geographies within the company. And we are also adding a lot of people on the export side. We think that both India and the export market would grow, and typically we will be having the similar blended export range what we are having today, or maybe it will move towards more export side.
Okay. As you said, like currently, like inventory has increased around INR 140 crore, INR 140 crore, and can I expect like working capital requirement going to increase for the business expansion?
We see that the working capital, like in terms of number of days, would remain constant, and obviously in terms of the absolute number, it would grow. But in terms of number of days of working capital cycle, it will remain in line like last year.
Okay. This is my last question. Who are the major competitors globally, and do you have any pricing pressure from Chinese manufacturers?
We do not have any competition specifically till now because these are special engineered and like low volume production as of now. But as we get into more OEM kind of customer base, there would be Chinese competitions. We have got competition in each of the countries where we are present, so it depends on country to country where those competitors would be there.
Okay. Thank you, sir. I will be back in the queue. Thank you for your time.
Thank you.
Thank you. A reminder to all participants, anyone who wishes to ask a question may press star and one on their touchtone telephone. As there are no questions from the participants, I now hand the conference over to the management for closing comments.
Thank you all for giving an opportunity. We see a very positive outlook and good growth in the company. Wish you all a very happy Diwali and festive season. Thanks for your time.
Thank you very much. On behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.
Thank you.