Ador Welding Limited ($517041)

Good afternoon. I hope you all can hear me. Good afternoon. Thank you for taking the time to attend today's earnings call. Just to give you a quick update, we have a few points to discuss, and then we do open to question and answers. I'll just give a quick overview on [indiscernible] we discussed earlier as well, pretty much in line with that. In 200-plus employees, 5 manufacturing facilities that located across the country. We deliver across India and now have a global footprint that's increasing to approximately 15 countries around the world. R&D continues to be an area of investment and it's recognized by the government of India, and we closed this year approximately of INR 1,135 crores in sales. We identify ourselves. We've discussed this in past meetings as well, but we continue to identify ourselves as a Tier 1 welding player, which is not part of the global events, but with [indiscernible] in India that is stretching out towards other economies and other geographies as well. These are the geographies that we currently operate in with India comprising approximately 80-plus percent of our sales. And approximately 80-plus percent of our sales and Middle East markets and select other markets like the U.S. and stuff like that, becoming a lot more relevant for us as we move forward. Revenue growth is approximately 3% for the year for quarter 4, sorry. And EBITDA dropped at approximately INR 38 crores, an increase of 200 basis -- bps. Gross margin was approximately 36%, and the PBT was at approximately INR 39 crores. This excludes -- the numbers we discussed today exclude any recovery of the old [indiscernible] project and the exceptional items. For the year stand-alone revenue is up about 2%, gross margins at 38%, up about 250 bps EBITDA margin at 12%, the Kuwait project recovery, which is a lot of good work done by the team for the -- from recovery that was spending from 2020, 2021 that finally led to INR 14 crores of recovery. And PBT of approximately INR 130 crores, excluding the [indiscernible] risk cost of the [indiscernible] project. Return on capital employed is approximately -- the operational EBITDA at approximately 12% -- our operational EBITDA is approximately 12%, and return on capital employed is approximately 23%. The new product introduction, like we discussed in the past, there are various initiatives being undertaken depending on the industrial technology that we're focused on. We have into a partnership with [indiscernible], which is a leading welding manufacturer -- welding equipment manufacturer globally for specific products regarding applications in the submarine welding space, which basically leads into the industries and power structure ship building. We have a -- second our portfolio made in India products for the robotic line as well. We have added products that have [indiscernible] for consumers. We're adding more and more consumables for the wind manufacturing industry for high-end [indiscernible] for all special equipment applications, the continuous initiative that is undertaken by the team. And month-on-month, especially recent months, you can see a lot hostel introduction of products and approvals accordingly. New product introduction, another area that's a big focus area for us is the automation space. And as we have discussed before, I don't need to be a lot stronger in the automation space, not only by a hard automation but also by robotics, cohorts, laser or of that. And in fact, we have now introduced products accordingly, and we have received some orders as well. Year-on-year, there's a lot more push happening on this. We rectified a lot more talent to come into the organization also to drive these, and we're starting to see results of this coming. And, as I said, being the only Tier 1 player that is not part of global MNC that operates. We are really very specific about brand positioning and how we lay that out. So there are several initiatives being done to ensure that the marketing and branding follows suit altogether with that. We foresee this year and oversee some interesting recognitions. We developed a welder that is a welding equipment that uses battery only as a main power source, the first to do so, and we are very fortunate by CII to receive amounts to be recognized among the top 100 new agent companies in India. Our training division, which undertakes several projects, primarily on a nonprofit basis but for granted, purposes has been recognized as well. Additionally, the Bureau of India standards, which we work with very closely, has recognized our manufacturing glass for their quality and processes. Just in conclusion, this is our 75th year, which will happen in October of this year. Just to give you a little bit, we continue to remain focused on creating investment in experience. We will now leave it open to questions and answers and take you forward [indiscernible]. Thank you. Go ahead.

Good evening, everyone. Sir, nobody has raised any question as of now.

[Operator Instructions]

First speaker is Mr. [ Raja Joshi ].

So my first question would be on FY '26 performance. So if you could just break down our performance into volume and value that distribute a sense of how we have done with regards to mix, price and volume growth.

So just to give you an overview, the volume growth is pretty much in line with the revenue really pick up a little up or down in that same thing within a reasonable level. There is obviously, as you know, in the last few of one's been a massive inflationary effect that has happened due to the global circumstances and macro circumstances. We are seeing certain product lines outperforming on market growth. We're seeing some product lines have a little bit quieter last 4, 5 months, especially but we're seeing it pretty much in line with steel consumption as well as in line with the figures that we show in [indiscernible].

Understood. Understood. Secondly, on client addition, right? If you could just share some progress and traction on that front, both in terms of new industries that we're now catering to, which you partly alluded to in your opening remarks? As well as in new clients as well, similar to NPC or anything else. So some comments on that, please.

That's a still a big focus area for us. We talked about that in the past. So we're actually -- so that's rule basis. The first is we do have front of customers where we have product, but we are not aggressive enough to be in the door. I think there's a lot of work being done in select pockets especially on structural, on automotive, on oil and gas, be a lot more aggressive. We've got a strong key customer account team. We've got a stronger CRM process that we are following at the moment that we've implemented in the last 2 months, that's enabling us to be a little more aggressive there. I think we keep seeing the benefit of that as we go forward. The second is segments where we are not product-wise strong and now entering the goal is a little bit of wait up like that. The way we are now getting the approvals in place, getting the testing procedures done entering. Will take a little bit longer, but I think the benefit will be quite large from that perspective over the next 1 or 2 years.

Understood. Second -- my next question would be on the outlook for the next few years. So if you could just spell out how one should look at revenue growth and margins for the next few years, both on a volume basis and then from portfolio completion, if that helps with regards to mix or pricing? And then on cost efficiencies when it comes to margins is [indiscernible]?

So I think the margin answer exactly, that's a little bit easier for me to answer right now. Like I've been talking a [indiscernible] in the last 2 or 3 quarters, [indiscernible] some of those margins. I've been talking about how [indiscernible] itself has ability to improve its own margins, and we've been working towards that. And there's still a little bit of [indiscernible]. On a similar trajectory. You can see that happen for another 100, 200 basis points going forward over the coming period. Figures. Obviously, it's media been -- as far as progress , it's very tough to forecast. And I keep saying that and neither do we give guidance and stuff like that because play very hard too. But we are very clear that we need to keep looking at outperforming on volume and value. As of now, we remain -- if you take IIP numbers, CP numbers, 6%, 7%, 8% in that region and you hope that those numbers consistently perform. I think we're in a position to do better than that. But supply chain shops are just the way things are at the moment, a lack of clarity from any planning purposes. So I don't have anything beyond that. I can tell you so we're planning that those numbers should be in that line of what I mentioned at the very [indiscernible].

Understood. Understood. So my next question will be on the flares business, right? So ex of onetime gains, segment has, I mean, probably again particularly made losses even Q4. And so just wanted to understand our plans for this segment going forward.

We made an announcement at the end of March, early part of April, we announced that we were combining -- we are realigning the entire division. So we no longer have a division called as and process equipment. We have -- as I mentioned in many calls, we were waiting to overcome towards closure. We are -- we do not see ourselves being successful in large-scale projects, which means the kind of business we want to go after is the product like type of business where we have orders and we can see profitability in those orders. That basically ligation of like we discussed in 230 crores. The INR 230 crores of product line. [indiscernible] company, there's not increased separate division anymore. It used to be product management driven and just driven within the smaller part of it, and that's exactly what we've done. Restructure a lot of stuff, a lot of changes over the last 5 to 6 weeks. And we should see that play out better this year. And as I said, we're very clear, we don't want a little money in that, and we can make a little bit of money in this correctly.

Understood. And so I mean, accordingly, are we seeing any kind of orders or pipeline wins business for next year?

Yes, I think it should be all right for the process and process equipment there from approximately a INR 20 crore kind of number that I'm talking to you about. I think we should be kind of okay on that front. Whatever little traction I've been noticing, we should be okay for that.

And then we should be able to breakeven basis that number that you just mentioned? I think I'll just stop and get back in the queue later if there's more. Thank you.

We will now move to our next speaker, Mr. Pritesh.

I just wanted to check for last year, this FY '26 amongst all the industries that we were catering to. Any broader observations that you have in terms of the industry clientele performance, any hits and misses there? And then I wanted to check on the export side of the business because we do a lot of business in Middle East.

Sure. So I think in terms of industry...

How will that business shape up? How will that business shape?

I think in terms of industry first, I think there are a few industries that I think you guys will know better than me, but we are seeing green shoots, obviously, shipbuilding, a little bit on some structural wind, like I said, it's not a big thing for us at the moment, but we are seeing a lot of activity there to get us approved and stuff like that. Automotive is picking up, doing all right on that front. Those are the main -- I'm not seeing anything else that's really outshining or anything like that beyond a few of these. Thermal is expected and some work comes from there as well. Oil and gas pipeline kind of work, all of that going on. So that's kind of all right. But nothing exorbitant or nothing shining out from that perspective. We do expect it like everyone else does for the reasons that over the next 12, 18 months, it should be a little bit better. From the export perspective, last year was a bit soft compared to target, fairly flattish compared to where we want to be the year before. we did notice or pockets where we're quite reliant on the markets were a little bit soft due to their own structural blah, blah, blah issues internally, for example, in Saudi and stuff like that a little bit softer, but we did see other markets do a little bit better. So far this year, what we have seen is the order book inquiry base and approvals where we're set up, exports should do better -- should do well, do better. The markets we operate in, we are definitely seeing a lot of the efforts we put in, we are seeing a lot of traction from that.

So why -- so the next business is on the process equipment side. Why is it that we still continue to have adjusted for those one-offs losses continuing because in the past also, we have said across a lot of quarters that this is towards the end. So where exactly does this all finish and what kind of unexecutable number you asking?

The INR 3 crores that you see in FE is basically a gain that has come because there was one of the reorders that came in from ONGC. So that's a gain. And accounting-wise, we'll have to take it in the same line item where we have taken the expense. So it's a gain. If you look at it in June, it was INR 28 crores, if I'm not mistaken. And now in March quarter, we have taken a INR 3 crore gain. So full year, the hit on that is about INR 25 crores. Going forward, if we get any money back from ONGC for any LNO, again, it will come in that same line item.

There is no further negative debt. We took the biggest hit we did in Q1, and we are working towards recovery on what we can. That was [indiscernible].

And then there is another gain, right, which you are reporting impairment reversal on trade receivable. So that goes [indiscernible]?

Project recovery, yes.

That was a project we had taken in Kuwait. And with a lot of efforts in financing, we were able to recover that money. So that has also come in as a separate line item so that people are aware that this money is not from current operations. It's an effort of the past that has come in.

So then from a segmental point of view, what happens is you report a INR 5-odd crores number in the process division, which has both these gains sitting, right? So if you adjust for that, then there is a loss. So my question was there. So on an ongoing basis, there is a loss adjusting for gain, there's a profit. So my question was from that direction.

Are you asking basically that the flares and Process Equipment division, if it continues to run the way it does today, it loses..

No, it does not because effective 31st March, I've taken many decisions that will not allow that to happen coming into this quarter.

Because I had to wait until the project was completed for many things to happen from that.

You got muted. So incrementally, the growth division, so basically, we don't see the losses recurring in the Process Equipment division and the welding division moves in line with the steel growth rate plus whatever extra growth rate that we come from the export business because last year was a flat number in export, correct? That's how I have to read it.

Yes.

Any downside or upside case in the margins of the welding business?

Nothing at the moment, nothing that stretches much beyond anything on that. We are now -- we do have the merger behind us. We do have [indiscernible] behind us. We have to wait a lot of those things. We will explore certain, what I would not call diversification. We will look at product adjacencies opportunities that arise, but nothing at the moment that is a large ticket investment.

Our next speaker is Mr. [ Satish Joshi ].

Congratulations on a good set of numbers. Relatively, we have posted a decent growth in terms of revenue from welding business Y-o-Y and Q-o-Q. I wanted to understand in the context of the ongoing situation in the Middle East, what would be the outlook going forward for medium term? And how sustainable are the EBITDA margins? I mean, I have adjusted all the one-offs of reversal of provisions and all of that. So I'm looking at an EBITDA margin of approximately 12% in the Q4 and Q3 as well. So what would be a sustainable EBITDA margin and the growth outlook for the Welding division?

So the first was on the exports. Hopefully, that situation will come. But we've seen demand through the last few weeks even be good. Question is being able to get product out there, which is now also there are opportunities that keep coming and going. So it's happening. But we've seen in terms of demand, no issue, and we expect demand to be fairly good in those markets going forward. Unless something very, very adverse happens much beyond our control, we don't see anything being very adverse from that perspective. That's the first. Second is on EBITDA margins, like you said, yes, that is the number that we look at as a base and there are efforts on to continue to look at how to keep incrementally improving upon that, which we believe is definitely in our scope and has to be done step by step. The third thing you had asked about the welding industry, like I mentioned, you have to look at steel consumption, IRB data, all of that and take it from that perspective, and that's where we're trying to follow that kind of trend.

Just a follow-up question regarding the growth outlook. Would you like to quantify any internal target that we are looking at in the medium term?

Sorry, I don't share we have targets of course. Sorry, I don't share it publicly, guidance. That's the way we look at that.

Also, would you like to guide us at what capacity we are operating right now and...

Well, a lot of different types of lines in consumables as well as equipment, but I would say a fair estimate is anywhere in the region of approximately 70%.

70%. So there is -- and the normal capacity at which we can operate is what, 90% in this industry?

You can operate, yes, approximately 70% to 80% to 90% depending on what types of systems you are, how old your equipment lines are accordingly you can. There are some lines that currently operate at 90%, 95% for which we need to undertake CapEx. Some new technologies we need to invest for as well. But yes, pretty much along with that.

Lastly, sir, we have been seeing a lot of thrust from government on the shipbuilding sector make in India efforts. And we are announcing -- we are seeing a very big announcement from government of India for buying or procuring or making ships in India. So how we are placed in this -- in that infrastructure? I mean, are we in the approved category? And what kind of growth this sector can give us given the opportunity size is so big?

It's a big focus area for us. The quantum of welding and shipbuilding is very large. So it's definitely a big focus area. We spent a lot of time effort and a lot of resources behind it. We have most of the approvals in place for, I would say, approximately 75% to 80% of it. There are yards where we are stronger place than other yards just like it would be for anyone supplying in. We are making a lot of efforts to continuously grow that not only from a consumables basis, but equipment, automation. We represent some international brands for really high-end automation as well. So a combination of all of that, there's a lot of effort being done to see that. But yes, we are on the same page as far as shipbuilding goes.

Generally, what could be the ratio, sir? I mean, let's say, if, let's say, 10,000 tons of steel is being used in making a ship, how much of our building block will be required?

I can't answer you specifically on shipbuilding, but I can tell you that it's approximately 2% is the thumb rule the industry uses in general for most of [indiscernible].

Our next speaker is Mr. Duane.

So my question is, I think you already mentioned that we are seeing some tailwinds from a few of the sectors. So let's say, your welding revenue by this year-end, FY '26 was roughly INR 1,070-odd crores. And based on these tailwinds, by when do you see we can do roughly INR 1,500 crores to INR 1600-odd crores kind of the revenue from the welding business? Is it like by FY '28, is it achievable?

Look, that would indicate somewhere in the region of approximately 18% to 20% growth rate year-on-year for. Yes. I would love to be able to do that. And I think it's definitely feasible, but the ground economics in the ground macro economy has to support that. So I can't venture a guess much beyond that. But to tell you that it's in our radar that we have to get ourselves there, and we are investing and driving accordingly. But I don't want to put a number out there yet. But we are not very far off as long as the economy is strong.

Sure, sure. And let's say, the shipbuilding, I think majority of the commercial players are already getting the orders and maybe the construction would begin maybe after a year kind of the time frame. So do you foresee this shipbuilding itself can give you INR 1,000-odd crores kind of the revenue visibility in the next 5 years -- in the next 5 to 7 years?

That's a very large number. I won't give you a number, but I will tell you that that's a very, very large number that you're talking of very hard for, I think, most companies of our size to get that much from shipbuilding. But it could incrementally add a bit, but that's a very, very large number.

Okay. Okay. And in terms of the incremental orders from the other sectors, how do you see right now? Is there any order inquiries coming in or any finalization which has been done?

Fairly okay. I think from, I would say, November, December onwards, we've seen it kind of okay. Even right now, it's all right. It's just that you have inflationary impacts that you are dealing with at the moment. Customers are a little bit cautious in that regard. Demand is all right. It's not bad. Given all the macroeconomic circumstances, in fact, I would imagine it could have been worse. It's not. But you have to take it with a very short-term view on it until we stabilize.

Our next speaker is [indiscernible].

I'm looking at this company for the first time. So apologies if some questions are very nuanced. I just wanted to understand -- I wanted a clarification. You mentioned that we can expect 100 bps of margin improvement in the coming period. So was that on the gross margin front or the EBITDA margin front?

That will be more on the EBITDA level that we still see that there are scopes of improvement over there. Of course, part of it will also come from gross.

Okay. Understood. And if you can give a time period by when we can achieve this improvement, is this possible in FY '27?

Yes. We're working towards it. And whatever we can do as fast as possible, we'll do it. But surely for the next few quarters, you will see EBITDA margin improvements happening. As long as we do not have ridiculously difficult supply chain shocks, it possible. Within us internally, we see it as.

Okay. And like you also mentioned that in some lines, we are already at the utilization of 99%. So what is the CapEx that we are expecting in FY '27?

CapEx will be [indiscernible] of INR 30 crores, INR 35 crores for the coming year.

And this will be majorly to add the lines only?

Yes. So we have maintenance CapEx that will come anywhere in the region of INR 10 crores to INR 12 crores type scenario. And this year, we'll have 2, 3 lines that are coming that are new that are over this year and next year. So we expect INR 30 crores, INR 35 crores stretching out to INR 40 crores maybe at the most over the next 2 years each year.

Okay. Understood. And this will be in which segment, the Process Equipment segment or the [indiscernible] segment?

Building. [indiscernible].

Okay. Understood. And if you can give some color on the order book size that we currently have.

Our business operates on 80% to 85% of our sales is on a distribution system. We distribute across the country for our welding business, our maintenance and repair business as well as in our international, we work through distribution. So we don't have long order book periods. We normally have very rotating quick cycle periods. I can tell you that so far, it's in line with pretty much what we've seen over the last 3, 4 months is what we're noticing right now.

Our next speaker is Mr. [indiscernible].

So I had a couple of questions. So firstly, I think there has been a recent income tax demand of INR 14-odd crores. And I wanted an update regarding that. What does it pertain to? And particularly, I see that in your notes, you have mentioned that your BIS hearings have closed. So any update on that?

So I'll address the BIS first. So the BIS hear, most of it is closed, but it's still going to go back to Manchistate Court, which we've been given a date sometime in June, July. So that process is still going on. And we're very hopeful that, that will end in a much more logical manner than where it is at the moment. So that's progressing at the moment. On the income tax matter, I'll ask Suryakan to give you an update on that.

So income tax matter, we have filed our appeal last week only. And we don't see any merit will succeed in the -- so we are hopeful it will come in...

Okay. And secondly, I want to know like given the healthy cash balance that the company currently has, and I see the smaller players in the industry are growing faster than us. So I want to know, are we open to any acquisition like...

We are open. We are open to acquisitions, but our acquisitions are a little more targeted now. As I said, as I've been telling shareholders for a while, the first cleared up a few things in terms of [indiscernible] merger, a few other heavy baggage that need to be cleared up, which we are -- now we start spending a little time and effort on it. But it will be more dependent on technology necessarily than only market share related. So -- but we will look at both. We will explore.

Okay. And lastly, like in terms of your welding business, like how the growth levers are in terms of currently the maintenance division and because you don't give us a breakup, like -- so I want to know like how much is the equipment division grown compared to the maintenance and repairs and consumables as such?

Sorry, just repeat that question. You want to know the?

Breakup of your welding equipment business and your consumables business like in your welding.

In terms of revenue or growth or what?

Revenue.

So we don't give the revenue numbers for a specific reason, much like several competitors don't, we don't as well, and then we feel that is fair. But if you look at our historical data, I can tell you that it's pretty much along a similar ratio than what it was earlier.

But in terms of the growth, can you just specify in terms of growth?

Growth cycles are fairly similar across the board for all of them. You see a little bit of a spike in welding equipment in general when you see a CapEx cycle pick up. Otherwise, we've seen pretty much similar data for both.

And in terms of exports, like what would be the exposure to Middle East?

Our exposure is fairly high for the export division, but fairly secured. We're very secure in terms of how we deal in terms of we deal with distributors, our payment terms, all of that. And the demand remains fairly high. I'm not at all worried about the Middle East at the moment from that perspective.

So were any dispatches affected during the quarter like...

During March quarter, there was a little bit, of course, during the first 3, 4 weeks. Towards the end, last few days, we saw traction happen. But yes, what was planned to happen between the first and the 20th and 25th of the month was obviously naturally very, very slow. But we've seen that pent-up being cleaned up most of it.

So that issue has been resolved as now, like the dispatches have gone in this quarter?

Yes. Most of it is resolved as of today. Now what happens tonight over there, we don't [indiscernible].

We have next speaker, Ms. [indiscernible].

Sir, I know Mr. Aditya, you generally refrain from giving a revenue growth target. But in -- I think one of the presentations last year on 29th May, I think after the merger, we mentioned our target of turnover to pass INR 2,000 crores by 2019. So are we still on that?

Fy '29.

Yes, FY '29. So basically doubling our top line currently in the next 3 years, giving us a 25% figure. So are we still following that?

Still following the principle of doing that, but the main principle that drives that is to triple our earnings over that period of time. And that's what we're working towards. And we've seen that have a lot more success because the base economy is finding it hard to be able to deliver that level of growth. But yes, we are following the principle of we must somehow get there, and we are going to look at it like that, yes.

Sir, any specific driver of which particular segment is going to help us achieve that because generally, we generally been 15% to 20% growth, right? So any particular segment that we are focusing on, which would get us there?

You mean from a customer segment perspective.

No, from our segment perspective, like consumables...

Across the board... We now -- as I said, now we have basically one segment, but across the board, the way we manage the business, each one has to be pushing their numbers accordingly like that across the board.

A lot of questions have been asked about the shipbuilding as a new industry that is opening up. According to you, which industry is still going to be the primary driver for our business? Steel, I assume, obviously.

Engineering, structural fabrication will remain the big driver because that is a large part of it. And that will have pockets where it will do well and stuff like that. So I'm not too concerned about that at the moment. And you will see hopefully a big uptick as CapEx spend picks up on the right side. But in general, I'm not worried about that.

Apart from shipbuilding any other new industry that is opening up and we would be targeting?

No, nothing specific. I think there's shipbuilding, there's defense and all that kind of stuff. There's a little bit on the renewable space that we have to work on as far as is concerned. Railways is going also [indiscernible].

If you don't mind, sir, what is the current product mix -- sorry, the revenue mix of these particular segments as of now? And how much do you think we can cater to in the next 3 to 4 years, let's say?

We don't share too much of that data. Like I said, they would be anywhere in the top 7, 8 key industries that we focus on.

Okay. Sir, just one last question from my side. As you already know that Saudi Arabia as a country has announced a massive basically construction boom that is happening over there. And as a company, we are anyways focused more towards UAE and Oman. And so what is our strategy basically in terms of getting more clients from Saudi Arabia given that the construction boom has happened?

So let me correct you a little bit there. Last year -- last financial year, our second largest market outside India was Saudi. This year, Saudi is our third largest market. We are quite set up over there. There are a lot of projects that have happened in Saudi. There will be a lot of business coming forward from there. I think we're quite well set in terms of sales and distribution and approvals. These are the 3 biggest triggers. I think we're quite positively set up there. It's a question of a few things clicking down from that perspective.

Okay. So any particular jump in the inquiry or the order pipeline that has come from that market?

In the last 3, 4 months, it's been a little healthier than what we saw. I'd say from December onwards, it's been a little bit healthier than what we saw during calendar year '25.

We have next speaker, Mr. Jason.

First, I'll just have some questions on confirming in the sense. So sir, you said that the FPD segment is now, of course, merged into the M&R segment. So basically, in a nutshell, it becomes only one segment. That's the Welding segment. Is that right? Going forward, we'll have only the Welding segment continuing.

We only show the Welding segment. That's how we believe it's the right way that the industry is doing it. So we think that's the right way. Right. So there will be no need for any segmental information after that?

No. We will not... Like I said, the size and scale of it as far as equipment goes not deserving a division [indiscernible] product line.

Sure, sir. And this -- sir, the [ Uran ] project, of course, I know we booked the losses in Q1, it's down in dusted, right? Everything pertaining to that is done. Is that...

So there are 2 parts to that. The first part is everything pertaining to the accounting losses and what we foresee as forecasted losses in blah, blah, blah, all of that is all done. As far as the project, it's at about 96%, 97% level because of this gas issue and this and that, there are a few things that have led to a little bit of a delay that get closed up in terms of final commissioning, but no major exposures.

No major exposure. So no major -- any further losses or anything coming from that -- yes. Okay. And sir, just from this perspective, I mean, our welding growth year-on-year has been 4% right? Sir, just wanted to know, I mean, IIP growth is currently hovering around 4% to 5%. So what can -- what would be needed to basically at least take our revenue growth to 6%, 7% or probably, let's say, 10% with a lot of things get spoken about the CapEx being at a very high level in the economy, especially public CapEx and stuff like that. So just wanted your sense of how -- I mean, what could it be done so that we can grow in higher single-digit growth, what could we do better on that front?

If you look at the supply chain shocks and if you just look at steel in general, we follow steel, right? So if you just look main trackers and those main concerns that they had is fairly similar on the ground for us. I think CapEx is -- I don't know the exact data, you know much better than me, but whatever we're seeing CapEx in terms of capital formation that applies to us, slightly weaker than we expected last year, hopefully better going forward.

Okay. Okay. Sure. And sir, just could I get the total exports value for this year? I believe the last year was around INR 154 crores.

Like I said, the numbers will be out at the right time, but it's fairly flattish this year.

Falttish. Okay. And sir, just wanted to know this collaboration with Miller seems to be very interesting, okay? And just wanted some sense whatever you could share of how it will help us compete in the equipment division. I mean with the market leader, I mean, with the market leader. I mean, I'm sure it's in that trajectory only, but yes.

Yes. From a high-end technology perspective, there are select industries which require that if we had product gaps on. We've been talking about this for a while and there are product gaps that exist by virtue of [indiscernible] and we're looking to plug those. And this is an opportunity that we have to take forward. And it's interesting. And there's a lot of work left to see the benefits, but it's an interesting start.

Okay. And sir, again, when I looked at your new product introduction, those products look very interesting and probably very high end as well. And you also spoke about like future areas like laser cutting, robotics, automation, et cetera. So sir, I just wanted to know which are the end user industries for these categories? What could the potential be? And is this equipment all this -- the CNC level, et cetera, is it locally made in India or imported? How does that work?

Most of it is. Most of might have outsourced that are in-sourced from or something like that. The applications go anywhere there's automation happening. So heavy structure fabrication, oil and gas, stuff like that, there's automation happening, which is in many, many industries today. It's about being able to convince the customer in front of the customer, convince the customer, get all of that done and do some interesting work with laser robots, robotics, all of that. Like I said, I think the opportunity is good for us. We have to just get the right talent to push hard, and we are seeing that a little bit in seeing that benefit coming.

So you're seeing that benefit coming...

We're seeing our best order book for us on that we've ever seen, but there's still a lot of scope, a lot of scope, a lot of work left.

Okay. Sure. And sir, just again, one question in relation to that. As compared to developed markets, India is a different ball game. So you have a lot of labor, which is reasonably cheap, right, or cost effective for a better word. Just wanted to understand, sir, from that perspective, these high-end technologies, how do you see it on the ground? I'm asking you because not because you have a much better idea in welding and all, we don't have much information publicly available to us. So I just wondered in that sense, how do you see that transition happening from the manual thing to the more AI-based, software-based solutions?

I won't go too much into that very AI-based or like that. I can just tell you that what you would call semi-automation, basic automation, hard automation robot, which is not some exceptional end of the spectrum, the basic automation in the way you look at it in many ways. I think across the world, across India, we are seeing companies, not only A class companies, you are seeing SMEs, all of that look at automation a lot more seriously because of availability of skilled manpower. So I think the potential is good.

Okay. Okay. And sir, just my final question, I just wanted to know, I mean, equipment, yes, [ Miller ] definitely helps us in improving the product mix. You mentioned that. Now just in terms of consumables, I just wanted to understand what are the concrete steps we are taking to basically improve the product mix and the product gaps?

They basically related to, like I said, identifying certain segments or identifying certain end-use segments like renewables, stuff like that, where we're not present, getting in there, investing in more and more approvals, for example, in nuclear, stuff like that and then adding on CapEx in certain specific products like fluxes and all of that to be able to take it.

We have next speaker, Mr. [ Akshay ].

I actually wanted to ask regarding what would be our market share if we look at the domestic market and even exports wise, if you could throw some light on that?

So the market -- because it's a fairly small industry, people have various different ways of looking at the market, organized, unorganized and the mix data that comes from it. We look at it very simply. I think we believe ourselves anywhere in the region of approximately 17%, 18% plus/minus a few percent in terms of market share.

Okay. Okay. Sir, also, there's been a lot of talk around the shipbuilding sector. If you could throw some light on what sort of revenues we are doing right now from the shipbuilding sector and where could we go if the sector picks up in 5, 7 years kind of range?

I won't give you a revenue number because that's slightly confidential, but I will tell you that it's still small compared to the pie that is going to be available and that is there. So there are 2 elements. One is the natural growth, the organic growth that will come from customers that use us. The second is pockets where we have product, but we are not in. The third is approval. So I think the opportunity to grow from the base is quite high.

Okay. Okay. And sir, finally, so say, 5, 7 years from now, we look to double our volume. What would be the approximate CapEx required if we are to double our volume in 5, 7, 6 years kind of range?

Good question. I would say approximately INR 120 crores. I'm not talking about anything to do with land and all that. I'm just talking in terms of plant machinery capabilities in the region of INR 10 crores...

We have our next speaker, Mr. [indiscernible].

Okay. Great. So I think just a question you mentioned on the internal points that you're focusing on. Forget the geopolitical issues, but are you comfortable where you stand now given the merger is off, loss contract is off and things like that? Would you say now you're kind of ready for the future?

I think so. I think we've been waiting for this time for the last, I would say, almost 2, 2.5 years at least that we're standing back on solid ground with a lot of big ticket stuff, big ticket problems behind us. I would definitely feel that we...

Excellent. And secondly, I just had a point in terms of growth again, I mean, IIP 7%, 8%. We spoke about a CAGR of 25% if we have to meet our vision. Any sense of how we can bridge that gap?

There is that we do discuss senior man, there are ways that we are looking at, but I don't -- I can't get into full details over here, but there are ways. I think partnerships and sort of being a little more aggressive in terms of maybe doing an acquisition here or there is definitely something that would be interesting. Beyond that, there are 1 or 2 other things that I'd rather not discuss at the moment. But I think if you take the base of automation, if you take the base of international, if you take the base of M&R, I think the base of certain sectors like renewables, I would say these are definite areas that outperform.

Got it. Got it. Got it. And just in terms of the fact that the steel cycle has come back from whatever reports I've seen and pricing has gone up and things like that, how does -- what does that mean for you incrementally?

It's a little bit challenging I think Steve is going through a very interesting phase in terms of inflationary impact, demand restrictions. I mean supply is sort of being managed. It's okay for us on that front. But yes, it's a lot of managing of that as we move through the process of it. But I think, Steve, yes, I would tend to agree with you that there's more of a revival stage than anything else.

And one final question on shareholder value and market cap and things like that. I mean if I look at the numbers, right, I mean market cap hasn't moved in spite of all the good work you've done. Is it that you're not putting out the story right? Or do you think the market hasn't understood it? Or any sense of that?

I think in all fair market understands us quite well. I think they do. I think all fair, there were things that we discussed that were holding us back that people have been waiting to see is it reaching its point of closure, which is what we've been patiently trying to do. And then now we give it to the market to take it forward from that perspective.

We have follow-up questions from Mr. [indiscernible].

I was going through your page on LinkedIn, and I saw a mention of a tie-up with ITW. So just wanted to get some sense on what this tie-up is and details.

It's the same one we discussed regarding group company of ITW the same one. So the high-end equipment that go to specialized industries like thermal and structural and stuff like that.

All right. All right. And I think earlier in the call, you spoke about using the cash balance that we have to probably look at some technology or enter an adjacency. So could you please shed some more light on what this adjacency could possibly be for us?

It's a little too early for me to discuss. We're just exploring opportunities. But it's related to simply speaking, the fabrication joining or cutting of steel, right at the end of the day, is going to be along those lines.

Understood. Understood. And on the exports front, outside of the U.S. and then the Middle East, which you earlier highlighted were our largest 2 markets, what the progress on some of the other markets be for us outside of these 2?

We've seen -- I mean, obviously, the tariff thing that held back the U.S., but we've seen in the last 2 months, a lot more traction happening. The Middle East remains core to us. We're seeing a little bit of interest after the Europe FDA, some stuff there. We have to build it up correctly to get the right distribution model. That's primarily, I would say, most of the highlights...

And with increasing automation and robotics and cobots in your business, how do you see the consumables versus the equipment mix evolving? And then what impact does that have on margins if that mix were to change, so to speak?

As you increase automation, you will see that change, but the pace is very, very tiny. So I don't think you will see a very big impact happen fast. I'm not too stressed about the margin impact on that at all, not too stressed impact. We need to be able to grow that side a little bit faster because as far as any top-tier brand is concerned, you need to be well structured in that space.

Okay. Okay. And just from a core welding portfolio -- product portfolio perspective, any further gaps that you see in our portfolio that need to be plugged for us to go out there and crack clients that probably we're not able to do today, something that you've done with ITW already?

I mean in the last 12 months, I would say I would have to say the team has done a lot to plug a few interesting gaps. I'm quite happy with that. But there are always a few -- and part of being the MNC globally, the Tier 1 guys, there are a few gaps there. There are a few gaps in terms of certain sectors want to deal with. So there are a few, but the good news is a lot of are coming into place.

Thank you, speak for insightful questions. With that, we will now conclude our Q&A session. I would like to hand over to Aditya, sir, for the closing remarks.

Thank you. Thanks. We appreciate everyone taking the time. Thank you very much. All the best.