Anlon Technology Solutions Limited (ANLON) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the H2 FY '25 Earnings Conference Call of Anlon Technology Solutions Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Unnikrishnan Nair P.M., Chairman and Managing Director of Anlon Technology Solutions Limited. Thank you. And over to you, sir.

Thank you, Michelle. Ladies and gentlemen, investors, associates, friends in the industry, I really want to thank you for taking your time off and joining this conference. First of all, I just want to express my sincere gratitude to all of you who stood by us in this month, almost a year now that we embarked on this journey of supporting the Indian industry with something that we can call our own and with the help of several international partners. So in the last many months, we have received encouragement, support, appreciation. Many of you paid visits to us just to say that you are all with us. We deeply appreciate that. We could not have done this without the sincere support from all of you. So I really want to thank you for all the support we have enjoyed from you. And we try to leave up to the expectations as much as possible while balancing the responsibility is vested on us from the industry. So looking back to the 6 months and the year that passed until the 31st of March, I would like to bring some key highlights of what we have done in these months to you. Number one thing is that, for many, many, many years, we relied on complete import of certain very critical and safety-related infrastructure equipment for airport airside operations. And now we stand and look back with a certain amount of satisfaction that our effort to make a rather complex [Technical Difficulty] very successfully, and that is being tested in an airport -- a brand-new airport in India. And we have received very successful reports about that. They have accepted the truck for operation -- regular operations. That's a brand-new airport, and as soon as they start operations, they will put our vehicle into service. All kinds of tests are over. Both our OEM and the customer together tested them and approved this. So today, we have completed all those preparations, and we have completed the machine successfully. Not only that machine, following weeks, we completed nearly now 7 machines. All of them manufactured in India with technology support from Germany and 4 components from the United States and Germany. And many of the components, more than 60% indigenized components. And quite a lot of engineering and software preparation also done in India with a very talented group of people. And yesterday, we concluded a Factory Acceptance Test with the Airports Authority of India who have cleared also the Factory Acceptance Test of 4 vehicles. So it's a big feat for us. Fortunately or unfortunately, we have to start with one of the most complex machines to even start with. We would have liked to start with some lighter machines to see the success and go into a more serious one. But the market wanted us to do one of the most complex machines, and we have done that. And in the process, we had to take an extra 2 months' time because this machine, normally an equipment, we can test along the way, okay? We can do an assembly, test it how it works and then go on for the assembly. But this particular equipment, there is an extremely high-pressure pump. This can only be started and tested when the complete circuit is over, and the entire circuit has to be ready for high-pressure operations. I do not want to get into too much of details, but the extra 2 months had to be taken for a few reasons. Number one, the quality expectations of our German partner was of a very high standard. They were not willing to make any compromises. So they had -- we had almost finished by end of March, but they said no, we have to do certain testing. And in fact, one of the machines is, at the moment, sailing to Germany for advanced test and rest of them have been tested in Bangalore. Then there were several software enhancements that we had to do. So they were not satisfied to just make a machine which they made about 17 years ago, redo the same technology, but they also wanted to bring in some extra enhancement in that. We also would like to inform you that we have entered into some new segments using artificial intelligence and digital solutions. One of them is we are in the final stages of doing a proof-of-concept for a major airport in India. This is for augmented reality-based 3D way finding solutions. My son, Rohan Unnikrishnan, who has completed its artificial intelligence graduation program, is spearheading this program. And we have a slight delay due to this airport red alert that is now happening in various airports in India. The airport that I'm talking about is one of the most sensitive airports in India. And so we are also entering into this segment. On Monday, we will do a presentation to Mumbai Fire Brigade on preparing the young firefighters to stay at high altitudes with augmented reality. That is virtual reality training program. So these are some of the new segments that we have gotten. And I also have great satisfaction in informing you that we have had also a very successful year in terms of our traditional business in terms of order booking. In terms of order booking, in the history of Anlon, maybe in the history of Indian aviation sector itself, we have clocked one of the highest numbers of CFT order bookings last year, of which some have been delivered and some will be delivered during the course of this year. And also, the market as our customers have greatly encouraged that us with another set of, let's say, 15 numbers of Make in India vehicles to follow through, which constitutes about 60% of the coming year's orders. One of the things that we would look forward to the coming year is that we have now established a supply chain with the help of the German engineering team. We have now successfully translated the quality requirements to the local industry. It took some months for them to struggle and prepare what they wanted, especially many of the fabricated components. We will now build on this platform to optimize costs and reduce the prototype building with our design. We have established contacts with a good quality material supply chain. So now we are able to offer a little more better scale of economy, thereby increasing -- improving our margins. And we have streamlined our production so that we have an improved scale of the ability to manufacture. And also in terms of volume output. So these are some of the key highlights. When we look back to the 6 months, there are quite a few things I'm excited to share with you, but we can follow through in a question-and-answer session later. Now I would request my colleague and our Chief Financial Officer, Mr. Emmyunual Setti, to explain the financial details of our last 6 months or year performance. Thank you, Michelle. And I require -- I hand over the session to Mr. Emmyunual now. Emmyunual, please.

Thank you, sir. Good afternoon, everyone. It's pleasure to speak with you today as we reflect on Anlon's financial performance for the fiscal year and half year ended, 31st March 2025. I'm pleased to report that this has been a year marked by strong growth, disciplined execution and strategic investment. Let's begin with the top line. We delivered a 43.4% increase in the revenue from operations, reaching INR 50.23 crores for the year. This growth reflects both increased volumes and stronger market traction. Notably, our performance accelerated in the second half of the year. With H2 revenues rising nearly by 79% compared to the same period last year. This momentum is a clear testament to the success of our commercial initiatives and the ability of our operating model. A significant contributor to this growth was the delivery of the equipment worth nearly INR 11 crores from our long-anticipated manufacturing and assembly segment, which marks a major milestone for the Anlon. In addition, we witnessed a meaningful increase in the direct sale of key equipment, such as personal protective equipment, multipurpose fire robot and line laser marking machines. Further strengthening our top line. On the profitability front, EBITDA grew by 47.3%, which is INR 10.25 crores, with the margins improving slightly to 20.4%. This performance was achieved despite rising input costs and increased infrastructure investment. Our ongoing focus on cost control and productivity enhancement played a pivotal role in preserving margins while we scale the business. EBIT stood at INR 9.67 crores, up by 43% year-over-year. Profit before tax rose to INR 8.73 crores, a 42% increase compared to the previous year. And profit after tax reached to INR 6.49 crores, reflecting 43.7% growth over FY '24. Earnings per share improved from INR 8.06 crores to INR 10.38 crores, a strong indicator of the value being delivered to our shareholders. Of course, this growth was accompanied by an increase in interest and depreciation expenses. Interest costs rose to INR 94.6 lakhs comparing to the last financial year, which was INR 61.56 lakhs. In line with our strategic funding and for expansion, depreciation increased to INR 57.8 lakhs from INR 21.83 lakhs, reflecting our investments in building long-term capability and capacity. Coming to the cash flow highlights. In terms of the cash flow, net cash used in operating activities stood at INR 16.73 crores, impacted by higher working capital requirements due to increased inventories and receivables as we scale operations this expected at our growth stage and aligns with our expansion strategy. Investing activities saw a net outflow of INR 10.34 crores, primarily due to capital expenditure in our manufacturing and assembly facilities. This reaffirms our commitment to long-term capability building. On the financing side, we generated INR 26.01 crores net cash, supported by proceeds from the successful QIP and facility with the banks. This healthy inflow helped us to strengthen our liquidity position. As a result, we closed the year with INR 29.5 lakh in cash and cash equivalents, down from INR 1.35 crores in FY '24, but with a significantly stronger asset and growth base moving forward. We are confident these investments and working capital shifts will yield long-term returns and position us for sustained growth. Looking ahead, as we look forward, FY '26, we are optimistic our core business continues to perform strongly, and our new manufacturing and assembly segment offers a meaningful upside considering the orders which are on hand. We will maintain a short focus on financial discipline, operational excellence and long-term value creation. Before I conclude, I want to extend my sincere thanks to our investors, partners and most importantly, our colleagues whose dedication and support have made this performance possible. Thank you. And now I will hand back the call to moderator, forward to your questions.

[Operator Instructions] The first question is from the line of Rahil Dasani from MAPL.

Am I audible?

Yes, you are audible.

And first of all, congratulations on such a great execution. It's pleasing to see how the company is progressing. And even on the manufacturing side, even at such a scale, we have been able to maintain the double-digit margin. That is very commendable. So my first question is, what's the sale of a vehicle, when does the AMC and spare part they might come in. Moreover, now that it is our own manufacturing vehicle, how much percentage of the vehicle cost will be AMC and spare part for, say, for example, your truck is INR 1 crores.

Yes. Yes, thank you, sir. Thank you for your very encouraging words and your time as well. The service requirements and spare parts requirements, let's say -- so we can classify into 3: service, consumables and spare parts. The -- this vehicle being a very special vehicle that uses extremely high pressure for the circuits, it's a normal practice that none of the customers would want to service this vehicle. And they -- most of the airports would ask us to even operate the machine. This requirement will kick start right from the first day of the induction into operation. This means that if -- for example, we have supplied the first machine that has put into operation in a brand-new airport. In the first month, they will use it most likely for paint or let's say, runway marking removal because once the final testing of the airport is done, they might want to reorient some aerobridge positions or something like that for which they would like to do a relining. So initial months, it will start with the paint removal. So first day of operation itself, we will be there to work on this machine. And to answer your questions on the percentage of service and spare parts, it's altogether calculated at about 7% to 8% of the value of the vehicle.

Understood. Okay, that has been understood. Sir, one interesting thing I can see is that our PPT shows Brijbasi high-tech as a customer. But from what I read, it seems that they were a competitor for us with Bronto as a tech partner and that they are strong in high-rise and crash fire. So if you can explain what's exactly going on with them and how are we serving them being a competitor?

You mean to say the products -- you are asking the products in high-rise building and rescue?

Our Investor PPT has a slide which mentions Brijbasi high-tech as a customer for us. But from what I read, they were a competitor in the field who have partner with Bronto to compete with us in high-rise and flight -- and crash fire tender.

You are saying Brijbasi Company?

Yes.

Yes, yes, yes. So -- see our partner, Rosenbauer, is like a world standard for firearms. So this brings us to a situation that the customer asked us to supply pumps and firefighting systems to even to our competitors, okay? For example, BPCL required a high-rise building firefighting machine. We also competed, but both -- anyone who -- from whom BPCL would buy, they would buy a Rosenbauer firefighting system. So it's quite unlike of in tender rules. But beyond all the rules, including government companies specify that we must have a Rosenbauer firefighting system. Therefore, they are also our customers. You got my point, Rahil?

Yes, sir. Understood.

That is why they are our customers.

Understood. Okay. And sir, my last question before I get back in the queue is that still now we have been more focused on getting our product ready and not sales, almost still we have been getting large orders, which was very surprising, but now with the product ready, what sort of pressure are we to put on the sales part, any further hiring plans on the sales or marketing side to get more and more RFPs?

Yes. So in terms of internal preparations, we have -- number one, we have a -- we have now consolidated on strong production team. We will have a couple of more, let's say, 2, 3, 4 more recruitments in production management. That will allow us to do a lot of things including software programming in-house within our company, number one. Number two, we have acquired certain design software. That will further strengthen our in-house capability. Number three, we have moved on to a unique automated storage and retrieval system, which will considerably reduce our time to look at parts, retrieve it manually and look at tools and search for tools and all these things in the shop floor. And the new system will reduce the idle time or, let's say, searching time for parts by about 33%, almost 1/3. So that anyone wants one part, has to just key in, in the computer and the part will be available for her -- for him. The other step that we have done is, we have translated to a set of suppliers with a long-term view that what materials they have to use, what in the welding technology they have to follow, what kind of metal working methodologies and production systems that they need to use. So quite a lot of time in the last 1 year has been spent on preparing the market to giving us components. So I don't know, I can tell you that the amount of time that we have spent and sometimes we almost thought our patience is running out. But our OEMs also helped us. We have made -- I lost count of how many times our teams visited these suppliers. We called them over to our plan. We showed them how the final assembly will look like and how we need it. So I think these last few months have really prepared us well to know what we can get, what we cannot get, what -- who will give us the best material, who is best for what type of machine applications? So therefore, we are in a much better platform to produce more equipment at a much better time when that -- at much better cost to produce more equipment. I hope I answered your question.

Sir, just one thing is in this -- is that, are we planning to expand our sales team?

You mean to say are we planning to expand our space, our factory? Is that what you are asking? Rahil?

Sir, sales and marketing team.

Sales and marketing team, yes. We will -- the utility vehicles itself will become an independent sales team. It was at the moment, utility vehicles and building systems. We are also getting some inquiries for Baggage Handling Systems. So we are thinking about dividing the team and recruiting some more people in sales and marketing. And one of the most important thing -- see, Rahil for us, it's not really sale, it's actually a technical sale of the concept and the technology that we can put into use for customer. So in -- when people make proposition, the one that has got distinctive advantage and long-lasting performance life is what they buy. So unlike in many sales and marketing area, our sales is more or less into a lot of things into performance and specifying the product, what it can do. Price, I'm not saying price, doesn't have a value. It has a great value, but that comes at the last in our world of sales. So we have -- for achieving this purpose, we have set up a strong product engineering team. So a salesman will translate what the market needs. In fact, if you look at the fire engine, every single airport went for their own design. So each machine has to be prepared according to the local requirements, specific requirements and training habits of each fire team. So this must be translate -- this will be translated to product team. They will give tailor-made solutions to each one of the customers' needs. You got my point? So it's not just expanding sales teams, but it's also supporting the front-end team with a strong technical support.

Make sense. Understood. Sir, I have one more question, can I ask that?

Go ahead, Rahil.

So just in relation to my previous question of how Brijbasi high-tech, like you said that we are also supplying several other truck manufacturers. So how does it work in that way? Because now we are sharing our technology with these other players who may -- in the end, come and underbid us in tenders. So how should we think about it?

The units that we sell are self-sufficient. They just take an engine power, and they operate by themselves. They are free to open it and learn. All the best to them. But in the last -- from 1978, fortunately or unfortunately, nobody has duplicated Rosenbauer fire pumps.

No, of course, I'm coming in terms of our main moat is our technology is our -- the vehicle that Rosenbauer has. If we are sharing the new products from that like the pumps and the engine, they basically would have a similar product to us, and they may underbid us in those tenders.

See you -- when you are a universal supplier, and then the government agencies ask the suppliers, I want only Rosenbauer, you cannot take a stand that I will not give pumps to others, you see? So we -- for example, Cochin, BPCL, they had a very special requirement of 6 deliveries at various rates of form from a single equipment. And this is available only with Rosenbauer. So when a company like BPCL starts come forward to specify that particular equipment, we cannot take a stand that we will not supply to you, okay? So we have to be able to supply to you so that -- so the amount of equipment sale on that is high. We've lost that particular order because -- not because that the our -- not only because our equipment costly, but because the one that they sold is the ladder unit was much cheaper than ours. But still, we made a very strong sales because the equipment that we sold was one of the, what you call, prime equipment that would more than make good all that loss we have made in -- or let's say the sales that we didn't make. So it was a good project for us. We still do the service and maintenance for them.

Understood. Yes, that was going to be my next question as to if we are also servicing these customers who we are giving specification to. I want that.

We'll take the next question from the line of Parikshit Kabra from Pkeday Advisors LLP.

And congratulations on a great set of numbers. I was just wondering, this time, the jump in sales, is there anything special that you can attribute this to? Or is this just your general increase in sales pipeline and so on and so forth?

Maybe later on, Emmyunual also will contribute, but from a management perspective, we did strongly what you -- what we used to do. Number two, the requirement of even spare parts is going high because number of vehicles in the country is going high. Third, many customers until some time back, people used to buy only the main equipment from Rosenbauer and let's say, things like personal production equipment like helmet, boot, jacket, everything from some cheap source. But last 2 years, I've seen a different trend, including from Messrs. Adani Group. They said, don't care about the cost for these kind of products. So they chose to buy premium personal protective equipment from one of the best sources in the world, which is Rosenbauer, saying they wanted all firefighters and the passengers to be safe. So this shift has made a significant contribution to our revenues.

Sir, if I can just interrupt you here, this trend that you're talking about seems to, at least from the sound of it seems like a 2-year trends, but your sales numbers have jumped significantly in the last -- in H2. So is there something in particular that has happened in H2?

No, I pointed out what happened in the recent past. The first 2, 3 reasons I told have been contributing over the years for the revenue of the growth. So this means that when new vehicles are coming, people are buying more and more of our associates' equipment. See, Mr. Parikshit, we are in a field where all the machines that we sell are handcrafted. That means that the part which is good and bad. Good thing is that we are the only source that we can -- they can buy parts from and technology from. The other thing is it's a lot of stress that you cannot say in a month, okay, I -- sorry, I finish my budget. Please come for spare parts next month. This is not possible. Whenever they want a part, I have to make money, and I have to buy the equipment and give it, and I have to service it. Because we are in a lifesaving and safety equipment field. So over the years, as the number of equipment increased, proportionately, service and spare parts and the technology support area also increased. And the market is registering, let's say, there are aviation is one of the growing fields. And many, many tire 2 and tire 3 cities are also coming for high-rise building rescue and machines and all. I mean, fortunately, all the 3 areas of our focus and our emphasize, all the 3 areas are growing. That means aviation -- of late, we also got into defense aviation, then the petrochemical industry, they need more and more of our equipment because government is putting a lot of emphasis on being self-reliant in oil refining. And then thirdly, the civil fire and emergency infrastructure. Because now as we move on, there are more and more high-rise buildings all over the country. So each municipal corporation, each town wants to have the safety equipment for dealing with a high-rise building incident. 3 months, 3.5 months ago, our machine in Thane saved 42 people from a burning building. So we are in an industry where India is increasingly becoming aware of safety, fire safety and disaster management. So this is over the years significantly or -- and consistently contributing the increase in revenue.

Got it. So I'm going to be asking a fundamental question because -- which is going to expose my lack of understanding of your business as of yet, but you have exclusive right to redistribute Rosenbauer's equipment in India. So when you -- when in Rahil's question earlier, when he asked, there is a person who's competitively bid with you, but still buys the equipment from you. This essentially means that when someone puts out a tender, they say, okay, I want truck of with these specifications. Some of them require the equipment from your vendor, but the others can be assembled and made on their own. And hence, they can be -- someone else can underbid you because the other parts are cheaper. Is that a fair understanding?

No, no. Let me explain this to you. In the high-rise building, in the high-rise building equipment area, there are 2 equipments, okay? One is called a hydraulic platform, but this hydraulic platform only for industrial applications, okay? And that is like a train, okay? And in the particular case, the oil refinery chose to go for an industrial machine. Here, we are costlier slightly because that doesn't need civilian rescue-related European nation safety norms. Because they -- I mean, it's not really a nice industrial practice, but they sell it saying it's an industrial equipment. That is the only place we are slightly costlier. However, the cost of equipment itself is quite significant what they bought from us. So we were happy to lose that project because we served what is the most significant part of the machine and they sold only the structure. Now to overcome that situation, last -- week before last, the German management team was here. They are allowing us to do the same equipment to be manufactured from Bangalore. So with that strategy, we will overcome whatever little bit marginal cost difference at the moment. And we never promoted that the equipment in India because we believe that's our responsibility to educate the market saying, that is not safe for a human rescue. This machine is used only for repairing windmills in Finland, okay? And we always refrained from projecting it as a civilian rescue machine. However, if somebody needs, now we are building a platform that we will give it from India. They visited us, they saw our manufacturing background. They said, okay, this is -- we are quite satisfied. Because we are now going to build this year, civilian -- the civilian counterpart of the same equipment. This only we can do because our competitors cannot build off-site. You got my point? The design is such that they have to do quite a lot of work in the chassis to prepare themselves to build such a machine in their own factory. So therefore, they must do it in their factory. And we are the only manufacturer in the world in this area that can do it in another factory, which is Bangalore at the moment. So they are very friendly now. I don't know if you are friends from our competitor in the conference call, but it is quite a funny situation. No, I'm not enjoying the -- I mean I wouldn't call it a monopoly or something, but this is -- this company is making this ladder from 1842 in Germany. And the ladder, they supply to Paris fire brigade in 1855 is still displayed in their lobby. So they know what they talk about, and they made it in such a way that their ladder -- their safety -- their rescue system can be built anywhere in the world if we give them an appropriate chassis. So therefore, that gives us a competitive advantage. We have no problem if somebody wants to buy a pump or a firefighting system from us. And only in that particular equipment, they can do slightly cheaper, nowhere else.

[Operator Instructions] We'll take the next question from the line of Yash Visharia from Mavira AMC.

Congratulations on the great set of numbers. Sir, with regard to the 3 segments that we are talking about, one is aviation, one is civil and the other is the firefighting. So what is the target market that we are seeing in each of these segments? And second is relating to the margin profile. So what are the margin profiles that we are seeing in all these 3 segments?

Yes. Let me put it this way, that the divisions is like this, mobile firefighting rescue and evacuation. And in this particular field, one segment is aviation. The second segment is petrochemical industry. And the third segment is civil defense, okay? So mobile firefighting itself -- I'm just rephrasing what, sir, you mentioned...

Yes, sir. Yes.

And along -- so coming back to the other segment is utility vehicles, okay, that are used for cleaning runway, both in terms of removing rubber, sweeping and removing sharp objects that can potentially deflate an air truck tire, which is statutorily required. And fortunately or unfortunately, all equipment that we sell are statutorily required by our customers. So this means that there is no choice whether to buy or not, okay? And so this also adds a lot of responsibility in terms of assuring a performance. For example, the runway rubber removal machine has to be moved out in case of an emergency landing in maximum 3 minutes. So the equipment has to be ready for that. Coming back to the segment, then you have an equipment that will test the friction levels of runway. Now there is a new regulation, which is prevalent in the -- maybe last year it was introduced by ICAO, saying that if a pilot before landing wants to know the friction value of the runway that [Technical Difficulty]. The airport or air traffic control is bound to tell them what is the latest friction value. So therefore, that equipment is also becoming -- and the friction sensor is saying, the value is less, then immediately, they have to deploy a runway rubber removal machine, and the pilot can decide whether to land or not. So this segment is after mobile firefighting and rescue, this is the next segment, which is airport airside maintenance. We also have a product called Disabled Aircraft Recovery Kit. This is immediate recovery and removal of an aircraft disabled due to any reason to a nonoperational area so that they can resume the operations. This is a very critical requirement today for the airports. So this comes the second segment in civil aviation. So civil aviation has mobile firefighting as well as the utility vehicles. Then in the area of civil defense, they need equipment to train their firefighters to be ready for fire -- high-rise firefighting. We are offering them digital solutions to simulate fire situations. And then we are giving them new equipment for new types of challenges. So basically to come back to segment, it's mobile firefighting rescue and evacuation, utility vehicles and prevention of fire equipment. And the fourth one will be building systems, especially for airports. That's also related to civil aviation. So the -- I quoted 3 segments in terms of growth because they are civil aviation, petrochemical industry and then the civil defense of municipal corporations and state governments for protecting people. So in terms of products, 3, 4 segments, and in terms of generalized category, 3 segments, especially from a customer point of view. I hope I have confused you enough?

Sir, thank you for the elaborative answer, but my question was relating to what are the -- what is the target market that we are looking at for -- across the segments that you just elaborated on?

Please come again. Please...

Sir, what is the -- what is the TAM that we are looking for in terms of number and value for these segments in the coming years?

Yes. It's -- government would like to build, I don't know, like our PowerPoint said 240 airports, that's an unimaginable number from the base where we are at the moment. We are at about, I don't know, 70 to 80 live airports. So that is a huge expectation. But I would say we will realize at least our most conservative estimation another 30 to 40 airports. So this is the projected growth in the coming years, at least a couple of years in civil aviation. And they would like to do all Euro 6 fuel production from India. So every single manufacturer like HPCL, BPCL, IOCL, everybody is asked to double the capacity to manufacture more of Euro 6 fuel. And the government of India is asking, we have something like 722 municipal corporations in India. Various categories, tire 1, tire 2, tire 3, depending upon population and the geographical area. And I would say, at least 1/10 of them should go for high-rise building rescue machine. Because according to National Building Code, you -- any building above 15 meters, except Mumbai Metropolitan Region, all other parts of the country 15 meter and above is classified as private building. So this is why I said, fortunately, all the 3 segments or, let's say, customer areas that we work have to grow if the country has to grow in infrastructure. See, for example, many cities, including Gurgaon, the corporate offices of multinational companies are asking their landowners, let's say, building owners to provide them sufficient safety measures to house and to make offices of their senior expat colleagues to be working from there. So they are giving them certain basic fire and safety standards to protect their data, their servers, their valuable materials and lives of their colleagues who are coming from all over the world and working there. So this is the growth engine for us in all the 3 segments that we are working on.

Sure, sir. Sir, any number on the order book currently and order pipeline?

I will need now help of Emmyunual. Can you please explain to Mr. Parikshit?

Yes, sir. So Mr. Parikshit, so at the moment, we are having an order book of INR 80 crores, which is actually apart from our traditional business. So our traditional business, I think I understood that you are not, we may [Technical Difficulty] come across how the business is defined in Anlon, is that -- if you initially you asked how the revenue has jumped suddenly. So the main reason I just wanted to give you a clarity on that. So we just started building the revenue from the manufacturing and assembly this year. So that is built in the H2. So that is one reason. And apart from that, there are other equipment like as sir said, personal protective equipment and then there is a multipurpose fire robot and there is a line laser marking machine, and there is a Baggage Handling System, which we -- we deliver in this particular year, that is one of the reasons that, okay, we are seeing such growth. Coming to the order book, yes, we have received close to INR 25 crores, INR 27 crores, which is relating to the manufacturing and assembly in the previous year, out of which we delivered close to seventh year and balance which is going to be building this year, which is in the form of the semi-finished and final state of the production. Apart from that, from last 4 months, we have received orders close to INR 48 crores. So which is again -- which are again in the pipeline. This order book, what I'm talking is, other than the AMC and spare parts what we get regularly. And also you asked segment-wise how it is. So over the years, we were not -- our major revenue was coming from the airport segment as well as the refineries and municipalities. But when it comes to manufacturing and assembly, we received an order from the Goa government that is for building a 42-meter detail, which will be, assembled a tower plant. So that is close to INR 9.62 crores. So other than the -- there are 43 vehicles order, which is on our hand, out of each, 4 vehicles are other than the vehicles relating to the airports. Rest all are relating to airports. But eventually, we are seeing a lot of inquiries, and we are seeing a lot of growth in other areas as well because the number of tenders which we are -- which is getting out from the respective organizations, which are increasing compared to the previous year.

We'll take the next question from the line of Rahil Dasani from MAPL.

Sir, I have several questions, but since you are running short on time. I wanted to understand a bit about the numbers. So one interesting thing I can see is that even after the scale up in revenue start, employee expenses didn't increase much. So can we say that hiring is largely done for the manufacturing side and going ahead as we scale up in manufacturing to an optimal utilization, our cost will not increase as much?

Yes. We both will answer this, Rahil. The first year of any project is a lot of learning curve, yes? So we basically inherited a defined with the help of our OEM, which is required for any Make in India program. And we made a re-design. Because most of these machines working in India has been deployed 17 -- 15 to 17 years ago. So time has moved in, engineering has moved in. Some of these -- very few of the manufacturers became obsolete in over time than in Ukraine war. So we've basically brought out a new design, but from the base of the Earth while German design, okay? And this had to be translated to be a manufacturable design from the supply chain. And this progress has been achieved. And we are in a platform where our suppliers will now understand what we need. So the amount of wastage, the amount of learning time and learning with materials have come to almost a much, much reduced position at the moment. So therefore, we are saying we can improve the turnaround time, we can optimize costs, and we can produce equipment faster. And in one way, I thank God under the circumstances that we built the most complex machine in the first year. And none of the equipment in the coming 1 year at least that we are going to build are not as complex as this machine. It looks like writing the post-graduation exam before -- before school final exam, something like that. Yes, something like that. And I don't know maybe Emmyunual would like to add something more to that.

Coming to the employee cost, yes, of course, there are -- as we also wanted to prepare for all these supplies comes with the AMC, comprehensive, annual maintenance contract, wherein in some of the cases, we may need to offer these machines. So we should be prepared with the sufficient staff who can operate these machines and who can maintain this. And considering the volume of the orders we are getting, keeping that in view, there's a slight increase in the employee cost. That is a major reason for the increase in the cost.

Understood. And sir, my second question is that, so as manufacturing has built in, in this half or working capital has spiked, which was expected, of course, but now, we are only left with INR 4 crores of cash on your balance sheet. So how will we manage the working capital going ahead as this manufacturing revenue scales up more and more? Would that be the way to go? Or are you also thinking about the balance sheet?

So basically, Rahil, if you see the balance sheet the building what we have done in the H2, some of the things which is -- which falls in the March month, so which is due for the receivable at that time, okay? So you see there's an INR 18 crores value of the receivables, which is there in the balance sheet. And apart from that, there is an amount which is -- which we have put in for the inventory, which is in the form of the final stage. So all these are going to be liquidated in a few months' time. So Anlon side, we may also get some of the extension of the limits, which may help us to manage. Of course, if at all if there is any further orders, which will be getting it, we may look for the other options. But at the moment, we have not decided on that.

Rahil, you have to send some money to us by money orders.

Sir, you let me know. And sir, my last question is that...

Rahil, I am sorry to interrupt you. Rahil, you'll have to rejoin because there are others who are waiting. [Operator Instructions] We'll take the next question from the line of Mulesh Savla from Shah & Savla.

And heartiest congratulations for successfully completing complex machine and delivering it to the customer. Sir, as you said that about 60% of the components were indigenously manufactured. So can you tell us, sir, this 60% can go up to what level within another 2, 3 years? And what are the critical components which we must import from the supplier or OEM and all other things, we can do it. So can you give some more color on level of indigenization that we can think of?

Yes. Let me give you one example, sir. There is a -- let's say, a suction system in the runway rubber removal machine. So our, the German manufacturer suction system is rated to be the best in the industry because they don't leave any rubber particles behind. In the airports, including Mumbai, they have to send a sweeping machine behind the runway rubber removal machine to remove the particles anyway. So from our side, this suction system has several subcomponents. That means it has got an air suction unit, it has got a filtering unit, it has got filtering units downstream. And then it has got a push of the whole slush into the debris stand. When I say indigenization, I bought only the vacuum pump from Italy. That of the upstream and downstream part I made in India with the drawing prepared together from the German engineer and our Indian engineer. So one of the things, Mulesh, that we try to do is that I come from an industry, which is much more precision-oriented and much very highly complicated machinery. I started my career there. So some of my old friends and colleagues came running to help me and they came on board. Okay? Yes, so they -- for them, it's still complex, it's still a different field, but it's not as complex as the job that they had been doing both in terms of software and in terms of hardware. So -- but still with due respect, this is a very well-engineered machine. And this background helps us to optimize what we need to do and what we should not do. You should also know what you cannot do. You can like a hero by saying, I will do everything here. This is the reason for failure of several Make in India projects. You must respect somebody's intellectual property and their OEM work. You cannot come overnight and say, okay, I'm doing it now here. It's not possible. And you cannot reinvent the wheel. So we went for the heart of the machine 25 years' time-tested components. For example, I can get the high pressure pump half the cost in the United States. We wouldn't use that pump with due respect to them. They are good in some area, but they are not good in this area. We needed a precision pump and this pump that we are using for about 30, 35 years that design ever changed, never ever changed. And all our machines, you will see this pump even if we lose the project.

So basically, up to what level we can go indigenization, so can we reach up to 80% of the total cost of the vehicle? Can we reach to 70%? I just would like to have some color on that.

No. The next -- the objective is this. The next objective is whatever over 60% that we developed, we want to further sharpen the quality, we want to further optimize design, and we want to further reduce the cost of this as a next step. So we will go to a level even the Germans would want to source from us for those components.

We'll take the next question from the line of Aakash Javeri from Time & Tide Advisors. [Operator Instructions].

Congratulations for a good set of numbers. Sir, my one question is that you mentioned the vehicle that we rolled out in this half year was more complex than the others. We've had margins of about 13.8% in Europe for that unit. Going forward, since others may not be as complex, can we assume that these margins would be lower, similar level or which scale we can increase these margins?

Aakash, who told you that, that particular machine we made, the 13.8%?

I mean I'm taking it from the segmental results from manufacturing.

If I may interrupt here, I would like to answer to this question. Hello?

Go ahead.

Yes. So the margins, which is actually, which is reported is particularly for that particular machines, it consists of -- there are 2 types of equipment. One is firefighting-related equipment, what we supply to Maruti Suzuki India Limited. And the other one is the RRM, Runway Rubber Removal Machine, which is supplied to Yamuna International Airport. So basically, initially, as we just started, initial struggle was to source some of the things, which results into the list margins. But eventually, if you see that, as sir said that most of the things wherever we can indigenize with the help of our team, the production team and with the help of our CTO, we are eventually targeting to improve the margins. And as sir said, it's a complex mission, but it's basically all these machines are different. We cannot just compare, and we cannot just give a general margins. So firefighting is a different segment, Runway Rubber Machine is a different segment. So that's why it's quite difficult to give the margins as a general.

Yes, Aakash, just to add to what Emmyunual said, few factors for your consideration, okay? Let's say, when we started this manufacturing, one major cost would have been to translate the German drawings to India and then mix with what the Indian market -- what we should do and then to align with the new product. For example, the wastewater and water system is completely redesigned. So you have to imagine that there is certain initial costs to do such exercise. So this is one of the factors. Then let's say, you have some base equipment that need to be prepared for preparing or manufacturing components. So there are fixtures, there are various kinds of proprietary equipment that needs to be prepared before you make a production. Thirdly, you asked a gentleman to bring me, I don't know, a base frame. He comes and but the sender, let's say, the support is the 2mm off center. You've got my point. Then you tell him, okay, you please go back, take it back and do it. But you have a time effect, you have a cost effect impact. So these are unavoidables when you begin such a process. Yes, you got me Aakash sir?

Yes, sir. Yes, sir. Perfectly.

Good that Michelle is asking me for every question 2, 3 answers she is allowing us.

Ladies and gentlemen, in the interest of time, that would be the last question for today. I would now request Mr. Unnikrishnan Nair to give us closing comments. Thank you, and over to you, sir.

So I would say we are almost coming to the end of a curve for what it means to do manufacturing by ourselves. We have -- we learned in a costly way that you can be great in repairing and maintaining and servicing and recommending spare parts. But it's quite another effort to draw it and make it, test it and assemble it. So I think we are almost at the end of the upward curve of this learning process. Just wanted to thank each one of you so much of support. In fact, every late evening that we spend here, we remember your faces and how much you all have been supportive of. And this spirit will continue, and I hope that it will be a great partnership together. Thank you so much for all the support we received. Thank you, Michelle, for a very disciplined and strict moderation of the program. Thank you for letting our...

Thank you so much sir. Thank you, members of the management. Ladies and gentlemen, on behalf of Anlon Technology Solutions Limited, that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you.