Profit surge masks revenue miss; execution on H2 critical

Reported PAT ₹15.0 Cr (Q2) vs ₹4.21 Cr (Q1) = 256.9% growth; adjusted PAT ₹8.45 Cr vs ₹2.1 Cr

Order book explicitly stated at ₹900 Cr, with ₹800-850 Cr expected new orders over next 12 months

Q2 revenue down 24% YoY despite 22.8% QoQ growth; guidance targets 25-30% full-year growth, but H2 needs ~50% growth to hit target

Adjusted PAT margin in Q2 was 9.2% (₹8.45 Cr on ₹920.9 Cr revenue), aligning with guidance band

Saudi Arabia ₹462 million (Q2), up 18.5% YoY; Africa ₹470 million combined; India 16% of revenue = claims of diversification verified

Prior: FY27 +20-25% growth, 9-11% PAT margin. Now: 25-30% full-year growth (slightly raised), 8-9% by year-end (slightly lowered). Mixed signals.

Approximately ₹700 Cr of ₹900 Cr order book ready for H2 execution; 70% large projects, 30% small orders for pace diversification.

H1 hampered by West Asia uncertainty (freight +5-10%, raw materials volatile). Cost mitigation strategy (localization, pooled sourcing) in early innings; margin expansion delayed.

European acquisition closing in next 6 months (vs 'under review' in Q1); Saudi JV disclosure delayed to 'another quarter' pending model build and team setup.

Yes, we are very confident of the coming two quarters. We know where execution is coming from. About 30% WIP material ready within the organization; our guidance remains the same. We're targeting 25-30% growth for full year.

PEB is 20% of project pipeline; mostly FY28 onwards due to customer preference for local partners. Margins lower but significant milestone. In incubation; more clarity in a year as we educate clients and align supply chain.

European acquisition is moving positively. We expect to close it within the next six months or in the first quarter of next year.

Discussions have progressed really well on the JV front. We're already taking orders from Saudi Aramco, SABIC, government projects. Expecting non-pharma sector pipeline. Disclosure on JV in another quarter once we finalize human resource aspect and ensure pipeline is intact before announcement.

Yes, there are certain sales commissions coming up due to partnerships. International partners bring influence on introductions and consultancies; this is conversion fee practically paid for each partnership.

Definitely an impact on raw materials, freight, and volatility in markets. But we are not looking at receivables as recovery; we know where it is coming from. Most receivables are LC-backed; collections expected in Q3-Q4. Not impacting pipeline. Deliberate actions taken for investor/company/on-site personnel security.

Yes, we are scaling margins through localization and pooled procurement optimization. Added costs from geopolitical situation but we are on track for 2-3% margin add each year. Management working toward scaling COGS optimization. Each region ring-fenced for growth.

Data centre opportunities in MENA are strong. Fabtech scope is ~30% (design, HVAC, MEP, project management, coordination, integration). Bids already ongoing. Also exploring food & beverage, electrical industries, lens manufacturing, diaper manufacturing.

Working with auditors and consultants to refine billing methodology toward project completion. Still need to understand impact on old/new contracts. Moving towards this in FY28; more clarity during the year.

IPO proceeds to be deployed on working capital, general corporate purpose, inorganic activity. Free cash will be used toward acquisition or internal working capital, cost optimization, revenue growth. Target to utilize by end of FY27.

70% value is large projects; 30% small orders for faster execution pace. This helps us execute; we added ₹500-600 Cr orders recently and are still maintaining ₹900 Cr. Expecting ₹800-850 Cr added orders in next 12 months to maintain 30-35% or 25-30% growth run rate.

Between ₹3,600-4,000 Cr in various stages of bidding/conversion. Conversion cycle next 12 months is ₹800-850 Cr add on to order pipeline. This drives lead pipeline for next few years.

We're acquiring local manufacturing capability, product diversification, existing project references in European market. Investment comes directly from Europe; this helps 10% to 20% win rate increase on Middle East/Africa projects. Gateway to US market as well. 100% of employees will come with the acquisition; synergies will be in model build and market positioning.

Recovery is not dependent on UAE normalization; we're managing expectations of customers. It's about order execution and margins improvement. We know where it is coming from. Executing on customer commitments. Each region has deliberate action plans; ring-fenced to grow.

Diversified geography means always averaging out. You cannot say high margin, low margin; it's a blend. Every month, finance/ops team follows FIFO method on availability during geopolitical disruption. We take immediate action and move forward on EBITDA margin management.

We never divided like this. [Arihant: We never thought about it; we're only segmenting by geography.] [Aman: 30% of project is in-house manufactured by us; rest scope critical infrastructure, turnkey, more process machines bought from different vendors.]

Yes, Amit.

Depends on project by project. Some projects are reference-based (lower margin) for market entry; others are routine where our margin would be higher. Blend-wise, will be close to current margins, but project-to-project it would differ based on reference and not reference.

Competitors include Telstar, Jacobs, Exyte Engineering (Europe-based, multi-billion dollar). Entry barrier extremely high for design & build scope. Risk high for customer to piece by piece arrange. Competitive advantage is in-house capabilities (design, engineering, manufacturing, execution). We focus on delivering brand value, not competing on price.

[Arihant:] Currently ROE ~9%. Don't have specific IRR for each project, but growing more than 20-30% and want to see 30%+ ROE. That's the target to reach in 2-3 years.

H1 down 12% YoY; H2 needs ~50% growth to hit target. Contingent on ₹800-850 Cr new order conversion and execution pace.

₹3,600-4,000 Cr hot pipeline in various bidding stages; conversion timeline next 12 months. Execution on Saudi, African, new market entry projects.

Q2 adjusted PAT margin 9.2%; localization & sourcing optimization targeting 2-3% EBITDA add each over 2-3 years. Raw material volatility, freight, geopolitical costs headwinds.

Pooled sourcing, localization in emerging markets, cost control mitigations expected to add 2-3% per strategy. Implementation in early innings; results visible over 2-3 years.

₹200+ Cr cash on hand; IPO for strategic acquisitions (Europe acquisition expected), geographic capex expansion (Saudi JV, African footprint), WC optimization by FY28.

West Asia (Saudi, GCC, Africa) represents ~40-50% of revenue. Freight, raw materials, security costs elevated. Collections delayed but recoverable.

H2 needs ~50% YoY growth to hit 25-30% FY27 guidance after -24% Q2 YoY decline. New geographies (Europe, Saudi, Africa), new sectors (data centres, non-pharma), and acquisition integration (European company) are execution-heavy.

Raw material prices elevated, freight volatile, security/protective measures added to H1 costs. FX headwinds from prior gains now headwinds. Localization & sourcing optimization not yet delivering.

Receivables ₹235 Cr gross (net ₹226 Cr after ECL); ₹81 Cr overdue, mostly due to geopolitical uncertainty. Most are LC-backed; collections expected Q3-Q4.

70% of order book value concentrated in large projects; small orders (30%) provide execution pace buffer. Large project delays could impact revenue recognition and execution pace.