Ceinsys Tech Limited (538734) Earnings Call Transcript & Summary

Ladies and gentlemen, good day and welcome to Ceinsys Tech Limited Q2 FY '25 Earnings Conference Call hosted by Choice Equity Broking Private Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to [ Mr. Sushil Katiyar ] from Choice Equity Broking Private Limited. Thank you and over to you, sir.

Yes. Thank you, Shiv. Good morning and good evening, everyone and a very warm welcome to all of you. On behalf of Choice Equity Broking, I would like to extend a warm welcome to the Q2 FY '25 Post-Result Conference Call of Ceinsys Tech Limited. I would like to take this opportunity to welcome the senior management team joining us on the call. Today, we are pleased to have with us Mr. Kaushik Khona, Managing Director of India Operations; and Mr. Prashant Kamat, CEO, Whole-Time Director and Vice Chairman. Before we proceed, I would like to remind all the participants to please refer to the safe harbor statement in the presentation. I now hand over the call to Mr. Kaushik for the opening remarks. Thank you and over to you, sir.

Thank you and good evening, everyone. It's a pleasure to welcome you all to this earnings conference call for the second quarter of the financial year 2025. Let me first thank our host for today's con call with the Choice Equity Broking. Thank you. In the interest of some of the people who may be new to the company, let me first start by giving you a brief overview of the company, followed by the performance highlights for the quarter under review. Ceinsys Tech Limited is a leading technology solution provider in the IT-enabled sector. We are renowned for our expertise in geospatial engineering as well as other engineering services and solutions. We offer a broad range of geospatial intelligence services, including data creation, data analytics, decision support system, enterprise web solutions and all related solution services. In the financial year '22, Ceinsys strategically expanded into mobility sector by acquiring Allygrow Technologies, a specialized engineering service provider with a strong international presence. This acquisition allowed Ceinsys to enhance its capabilities into manufacturing technology solutions, covering the entire product development process and industrial automation for diverse sectors such as 2- and 3-wheelers, passenger cars, commercial vehicles and off-highway equipment. Ceinsys serves prestigious global clientele that include large corporates, OEMs, asset management companies and government bodies, highlighting its robust reputation in both the geospatial and manufacturing sectors. With offices in India, United States, United Kingdom, Germany and now added with -- at Singapore, the company combines local expertise with a broad international reach. Additionally, Ceinsys is venturing into software product development and emerging technologies through a new vertical focused on the artificial intelligence and machine learning and embedded electronics. This vertical emphasizes advancement in metaverse, in edtech, gaming and mobility, reflecting the company's commitment to innovation and maintaining a competitive edge in a dynamic technological landscape. Now let me provide some highlights of our financial and operational performance for the second quarter and the first half ended 30th September '24. For the quarter under review, our operational revenues grew by 54% year-on-year to INR 90 crores. EBITDA grew by 71% year-on-year to INR 17 crores, with an EBITDA margin of 18.67%. Net profit was at INR 12 crores, which represents a growth of around 149% year-on-year and PAT margin stood at 13%. For the first half of this financial year, our operational revenues amounted to INR 164 crores, demonstrating a strong year-on-year growth of around 46%. EBITDA also saw a notable increase, rising by 42% year-on-year to INR 30 crores, with EBITDA margin standing at 18.3%. Additionally, our net profit surged by 82% year-on-year to INR 24 crores, with a PAT margin of 14.4%. The growth in both revenue and EBITDA margins was driven by the successful execution of value-added projects, which contributed to stronger margins. Additionally, our ongoing initiatives to improve operational efficiency have enabled us to handle large volumes more effectively, further boosting our performance. On the balance sheet front, we reduced our working capital cycle to 108 days, which is down from 190 days on 31st March '24 2024 and 237 days on 31st March 2023. This consistent improvement reflects our ongoing efforts to optimize operational efficiency, reduce cost and enhance cash flow management. Our total order book as on 30th September '24 stood at INR 1,210 crores, reflecting a robust demand across our core business segments, with geospatial and engineering services contributing to almost 76% of the total order book, while technology solutions make up the balance 24%. Some of the notable contracts which we have acquired during the quarter include 2 important contracts from the Maharashtra State Water and Sanitation Mission. The first is an IoT-based project worth INR 206 crores and the second is digital project monitoring system project valued INR 60 crores. Additionally, we have been awarded a extension of third-party inspection project by the Uttar Pradesh State Water and Sanitation Mission, which is valued at INR 196 crores. As you may also know, that during the quarter we have raised fresh equity and issued warrants worth INR 235 crores during the quarter and raised INR 105 crores as funds. These funds will be directed towards driving both organic and inorganic growth strategies, positioning us for sustained expansion and long-term value creation. This fundraise has put us in a strong cash position with a total cash surplus of INR 172 crores and a net operational cash surplus of INR 68 crores as on 30th September '24. It is important to note that our wholly-owned subsidiary, Allygrow Technologies, has been actively investing in the business development during the first half of the financial year and around INR 6 crores has been invested for both organic and inorganic growth initiatives at the subsidiary level of Allygrow Technologies. Additionally, we have made strategic investments to expand our abilities. In July '24, we have successfully acquired assets of a geospatial company in the U.S., which has a strong exposure to the telecom sector. This acquisition opens up new avenues for growth and strengthens our market position in key sectors. Moreover, we have started investing in data center capabilities, which will be a key enabler for our future growth, particularly in the rapid expanding digital infrastructure space. With this, I now open the floor for the question-and-answer session. Thank you.

[Operator Instructions] The first question is from the line of [ Vishal Singh from Finvestors ].

Thanks for posting excellent set of numbers, Sir. Two questions. As I was going through the results and balance sheet, I saw growing cash equivalent to INR 206 crores. Further, we have increased our debt from INR 9 crores to INR 19 crores. And we have paid -- not paid any interest cost from past 2 quarters and further paid extra 14% to 15% of taxes. Any specific reason, sir?

Prashantji, if I can take this?

Yes, yes, go ahead. Go ahead, Kaushik.

Yes. So thanks, Vishalj, for your question. I understand you are referring to the balance sheet, which is part of the presentation. And in that presentation, if you look at the overall financial capital or the -- I would say, the funds, the total cash, which is as on 30th September '24 is INR 213 crores and the borrowing is INR 41 crores. This is -- this borrowing includes other financial liabilities, which are consequential to the operations of the business, including the term loans -- sorry, the loans which we had taken earlier and which has already been repaid now. This amount of financial liabilities are also in respect of certain accounting liabilities, which are not actual liabilities but they are lease liabilities, which are classified as borrowings. And therefore, the total amount of net surplus is INR 171 crores. You have commented upon the finance costs. The total -- if you look at the finance costs, it's hardly INR 5 million, which is INR 50 lakhs. This finance cost is mainly in relation to the bank charges, which we pay to issue the bank guarantee, as well as renewal of bank guarantee. There is no interest cost during this quarter because there is no net borrowing cost -- there is no net borrowing. So I think if I can just clarify, the classification of borrowing is because of accounting standard. However, the total surplus cash, which we have is INR 171 crores, of which, just the cash which we have raised because of the preferential allotment is INR 103 crores and the operational cash surplus is INR 68 crores. So because there is operational cash surplus at the end of the quarter -- at the end of 6 months, as well as on 31st March 2024 also, we had a operational cash surplus of INR 29 crores. Therefore, you don't see any borrowing cost. Whatever finance cost is there, is in respect of the bank charges, which we pay, which is, as I said, for bank guarantee issuance, renewal or the renewal of limits for which they charge the bank charges. I hope I have clarified the question.

And excellent EBITDA margin, sir. Are we going to sustain it? And further if you can guide us for top line for like another 2 to 3 years?

Prashantji?

Okay. Are these margins sustainable? My answer would be yes. But we are not going to be putting our neck on the block to say it will match exactly to the every number. But these are the sustainable margins. This is not a aberration quarter, if that's the question. If you think this is flipping the pan, or happening for the first time, or will it -- is that manageable on a continuity basis? Answer is definitely yes. Guidance, I think we said last call also, we don't want to give any forward-looking statements on our numbers. We believe based on the space in which we are and the initiatives the company has taken, we would see a robust growth. And I would leave it at that.

And just to supplement that, I think if you have seen the today's advertisement, which has come into The Economic Times, quarter-on-quarter, the EBITDA margins have grown from 22.1% of quarter 2 of FY '24, 22.1% has gone up to 23.6%. And it is today, we are talking 24.9%. So I think they are growing and sustainably growing.

And what -- did you tell about that total orders? Just repeat that, again, sir. I was not able to listen to that.

So as I mentioned, we have total order book of around INR 1,210 crores, which is as on 30th September.

The next question is from the line of [ Garvit Goyal from Nvest Analytics Advisors ].

Congrats for a good set of numbers. I'm actually a bit new to the company, so can you please help me to understand like what exactly we are doing in our geospatial segment? And how we are different specifically from an ordinary EPC company, sir?

Prashantji?

Let me try to address this in a short and maybe you can add later.

Yes.

So basically, what we do in geospatial is, if you see current Government of India focus or a different state government focus, they are trying to digitize most of the utilities, whether it is land records, whether it is water supply system, whether it is energy domain, whether it is property tax collection. So wherever there is a digital data associated and it has a longitude and latitude attached to that digital data, that's the space in which Ceinsys operates. How we are different from EPC? We typically don't get into the hardware side of the business, typically. I wouldn't say it's 0 but we largely depend on the digital side of the world. That's the main difference here.

So who exactly are the customers? Yes, sir.

Sorry, in a nutshell, if I have to say, you should look at us as more like ITES and IT company segment. That's our majority revenue.

Got it, sir. Sir, like then you mentioned like we are particularly on the digital side. So is it like, for example, a company in a water treatment plant that is...

No. Water treatment plant would still be as a part of EPC. But where the upstream water flows, how the pipeline should be laid, where the best way to get the shortest path to draw those lines, all of that planning, in the digital world, depending on physical coordinates and satellite imagery, or the LiDAR taking data, is the work which we do on the computer.

The next question is from the line of Praful. As there's no response, we'll move on to the next question. It's from the line of Shreya from Oaklane Capital.

Congratulations on a excellent set of numbers.

Ma'am, sorry to interrupt, can you please use your handset?

Yes, sure. [indiscernible].

There is still a disturbance.

The current participant has been disconnected. We'll move on to the next question. It's from the line of [ Puneet Mittal from Fort Capital Advisors ].

Congratulations for a good set of numbers. I have 3 questions. One is more of bookkeeping. There is something called unbilled revenues -- receivables, sorry, in your balance sheet. Can you please explain that, and whether these unbilled revenues are already factored in the revenues? Second, again, there is a line item called margin amount or escrow account of INR 37 crores on the cash flow statement. So if you can explain what is that? And thirdly, there is 1% of issued capital granted to Mrs. Rashi and Mr. John. So it will be useful if you can give a little bit more background of these 2 individuals and what are the KPIs associated with this grant?

So Kaushikji, if you can take the first 2 questions, I can address the third one.

Sure. So unbilled revenue was your first question. Unbilled revenue is basically recognizing the amount of the work already carried out for which the invoice -- the milestone to raise invoice has not been reached but the effective work has been completed. And therefore, as per the accounting standard 103, the same amount is recognized and that is accounted as a part of the income. So when you look at a turnover of INR 90 crores in this quarter, it includes the unbilled revenue but the invoice is raised and unbilled revenue will total up to the amount of that. And unbilled revenue will be like a WIP, which gets adjusted. So opening WIP is removed and closing WIP is added. That is answer to your question #1. Question #2, you were talking about escrow account. I didn't understand from where you are looking at escrow account.

So if you look at the consolidated cash flow statement in the investing activities, the last item is margin money/money at escrow account of INR 37.75 crores.

So this amount is basically where we are -- as per the amount which we have to receive, there is a amount which is already received, which is going to be utilized for the purpose of project ongoing. And that is already part of our cash balance.

Sorry, I didn't get -- understand that. Received amount that we received from whom?

From the customers. It is already received from the customers and it is already part of the cash balance.

Okay. So then it should not probably be in the investing activities, right? It should more be in the operating activities. That's fine. That's all from my side.

Yes. As regards the third question, Prashantji?

Yes. So your third question was about -- if I understood correctly, the third question was regarding this 1% of stock to John. Is that correct?

Yes, to John and Mrs. Rashi, I think, 1% of [indiscernible]

Yes. Okay. So these are the individuals we have hired in U.S. Let me first give you a background and reason of John. That's where you started. So John is the erstwhile CEO of the company which we acquired in this quarter -- the assets of the company which we acquired, the geospatial company from Michigan. Now this is linked to his performance delivery in these 12 months period. And based on that, there are different slabs depending on what performance he achieves, he's going to get those stock options. Rashi Mehta is the finance VP we have hired in U.S. And her ESOPs will be linked to success of how we are able to identify and close acquisition transactions. So these are the 2 individuals. And these are the 2 specific purposes they are hired and they will be getting stock options.

[Operator Instructions] The next question is from the line of Gunit Singh from Counter Cycle PMS.

I would like to congratulate Mr. Prashant and the team for a great set of numbers. So sir, we raised about INR 200 crores to INR 250 crores. I would like to understand, have we made some headway in terms of doing any inorganic acquisitions -- inorganic growth, I mean? I would like to understand the management's point of view with regards to efforts in that direction. And I mean, can we expect something in FY '25 in terms of any inorganic growth?

Gunit, as I said, we already closed 1 transaction in, I think, August in M&A space, which is a company from Michigan in geospatial. In terms of progress, if you are looking at, we are currently in active discussion with 3 companies, out of which one, we are at a stage probably we would be able to give them nonbinding term sheets before the end of this month. However, whether these acquisitions will close before FY '25, will depend on many more additional factors like due diligence and how much time it takes for negotiations and all that stuff, from the contractual point. So I won't be able to answer that question definitively. But the intent behind raise of fund was going after acquisitions actively. And the team is very much active and looking forward for all of that.

Great to hear that you're making progress in that direction. Sir, my second question would be, our stand-alone revenues are about INR 78 crores with INR 20 crores EBITDA, whereas our consolidated revenues are higher at INR 90 crores but EBITDA is at INR 17 crores. So, I mean, I just would like to understand, which of our subsidiaries is actually making losses currently? Is the U.S. subsidiary not EBITDA positive? Or I mean, how is this translating from stand-alone to consolidated? Also, sir, in continuation to this, I would like to understand, generally, our Q4 is the strongest quarter because of payments coming in from the government sector. But now that we are diversifying and moving into different fields as well, so I mean, should we expect this INR 90 crores kind of a run rate to continue and the earlier seasonality in revenues that we saw, the variations? I mean, should we expect the revenues to be more consistent quarterly? I mean, how should we -- what should be your take on this?

Prashantji, if I can just take the first part?

Yes, go ahead.

So your observation is correct and thanks for your interest. The stand-alone top line is INR 78 crores and the consolidated top line is INR 90 crores. The EBITDA is slightly affected because I think we also had clarified that the subsidiaries have invested almost a sum of INR 6 crores towards the business development for organic and inorganic growth through subsidiaries. So I think if you consider that -- and that has been expensed out in the profit and loss account. So that is the reason why you see a slight impact on the consolidated results when you compare the subsidiary. If you make the adjustment for that INR 6 crores, I think it will show the improvement in the results in line with the stand-alone results as well.

And sir, in terms of the run rate, I mean, can we consider the revenue...

I am coming to that. Gunit, I am coming to that. So on the investment, I would just like to add a couple of more points. This is not only business development. This is also related to whatever you heard in terms of M&A and all that, what we are planning and what the activities are happening. Because large part of this activity is happening in the U.S., the investment vehicle used is a subsidiary in U.S. That's why when we consolidate, you see a different picture. But these investments are -- you should look at as a company, as a group. Therefore, segregating and saying that -- okay, the other part of your question was -- is subsidiary at EBITDA level is losing money? Answer is no. Subsidiaries are also healthy positive. If we correct for this adjustment of investment, our profit margins would be similar to past, probably a couple of percentage points better, whatever that number comes out, okay? In terms of seasonality, I would still expect similar seasonality, if not exactly same. Because as you heard, as of this quarter also, almost like 76% of our revenue is coming from geospatial and from government-related business, not directly government but government-related business. As a result, I would expect seasonality to continue for at least some more period of time. But the second part of your question is also correct. Because we are diversifying and because we are looking at other avenues and we have started looking at some success, that seasonality, if you see previous years, suddenly becoming double or something like that, I don't think that will happen. There will be seasonality. There will be Q4 better but is it going to be the difference like last year? I have my own doubts.

[Operator Instructions] The next question is from the line of [ Raj Sarraf from Finvestors ].

Sir, we have an order book of INR 1,210 crores, of which 76% constitute geospatial and engineering services. So sir, I'm not seeing any growth when I compare this [ INR 64 crore ] and compared with the last year, sir. So what is the problem, sir? Are we not seeing any growth in execution [indiscernible] in geospatial and engineering services.

So I understand -- yes, if I can just understand -- I mean, what I understand is you are feeling that the execution pace has not improved. I think if you look at quarter-on-quarter turnovers and the performance, the last year same time, we did a turnover of around INR 46 crores from Ceinsys on stand-alone basis, which has grown up to INR 78 crores. So I think there is a growth, which is substantially more than 75%. As regards the turnover, which -- sorry, the orders which we have, we are not digressing from the time lines by which we have to perform. And therefore, all the orders which are here with us, of which almost INR 400 crore orders have been received in the last month of -- last fortnight of September, these orders will also be executed over a period of next 1 or 2 years based on the actual orders, which -- the duration which they have been given. Coming down to execution part, the execution ability has increased quarter-on-quarter. And if we compare to what it was in 2022-'23, we are right now at 3x. And what it was in '23-'24, we are almost double. So I don't have any -- we don't have any question as regards the execution capability as we are in line with the project requirements. I hope I answered your question.

Sir, what I'm going through the presentation, sir, the operational revenue in geospatial and engineering services, if I compare Q2 FY '24 and Q2 FY '25, so it is INR 518 million in Q2 FY '24 and in Q2 FY '25 it is INR 543 million, sir.

I'm sorry, I'm still not able to understand the question itself. Kaushik, did you understand the question?

When I'm coming to the presentation, sir...

So let me talk -- let me clarify. This geospatial, what you're looking at INR 518 million also includes the engineering services, which is basically the automobile part, which is part of the subsidiary company. If you club the 2 businesses together, because earlier -- last year, the classification was slightly different. The segment which we had classified in up till 31st March 2024, there were 3 different classes where it was not geospatial and engineering. It was a different classification. So therefore, the classification, if you look at the apple-to-apple, we are talking about INR 518 crores and INR 54 crores, which is the technology solutions. I would request you to look at the combined number because the classification of the segment has been changed. And therefore, I would again request you to look at the figure that INR 518 crores plus INR 54 crores is a consolidated number of quarter 2 FY '24, which is coming to around INR 58 crores. Out of that INR 58 crores, INR 47 crores was of Ceinsys of the stand-alone basis, out of INR 47 crores, INR 35 crores was geospatial. If you look at this quarter, the total turnover is almost around INR 90 crores, of which the subsidiary, which is Allygrow, if we remove, Ceinsys turnover is INR 78 crores, of which geospatial turnover is around INR 62 crores. So from a INR 35 crores to INR 62 crores is a healthy growth as regards specific component of geospatial, which you asked for. I think it's a matter of combining the 2 figures because the classification segment has changed last year.

[indiscernible] classification, sir. And sir, if you allow me to just ask a very important question [indiscernible].

Mr. Raj...

You voice is a little -- not clear.

The next question is from the line of Deepak Poddar from Sapphire Capital.

Yes. Sir, just my question relates more towards medium term to long term. I mean in terms of our aspirations or the vision as such, I mean, if you have to see next 3 to 5 years, is there any aspirations to kind of having achieved around INR 1,000 crores of revenue, or any comment around those lines would be very helpful, yes.

Prashantji?

As we said, we don't want to give forward-looking statement. But if you are asking me a vision in the long term, yes, that number is reachable.

That number is -- and how many years we would see as a range, I mean, where we can possibly achieve such kind of revenue?

We could exceed that within 2 to 3 years, depending on our current order book.

Around -- in 2 to 3 years, INR 1,000 crores of revenue is achievable, right?

Yes, that's the order book and it's a possibility. But I'm not going to comment on forward-looking statements of where we'll be and all that. But ballpark, those are the directions in which company is building itself.

Okay. And that is per annum we are talking about, right? I mean, not cumulative.

Yes, yes. No, no per annum. Yes. I know I wouldn't be talking 5-year cumulative revenue.

The next question is from the line of Shreya from Oaklane Capital Management.

Actually, I -- could you just throw some light on how should we view this geospatial and energy services -- engineering services and the technological which you have reclassified? So how should we look at this? And that will be the first part of the question, sir. So if you could answer that.

So if I can just attempt, Prashantji.

Yes, go ahead, go ahead.

See, till last year, I would say, till 2022-'23, we had a substantial contribution from energy domain, And therefore, it was appearing as a separate segment as for the segment accounting standard. As for the accounting standard, we have to have segments which contribute 10% or more as identifiable separate segments. And therefore, based on the advice, we revisited the segment classification. And that is how the geospatial and engineering services are part of 1 domain -- 1 segment now. While technology solutions, which are not dependent on the specific geospatial segment, which are more related to the solutions which we do in-house by technological upgradation or by platform -- by making the processes over the platform, solutions over the platform is technology solutions. So that's how the 2 segments have been redefined.

So sir, going [indiscernible] our focus will be more on technological solutions rather than geospatial because there has been a steady increase in that segment?

So I think geospatial and engineering services will remain, both of them, to be very frank, both of them are equally strong. If you look at the phase and the cycle at which we are, there are certain orders which we have on the technology solutions, which will contribute substantially in the next 2 to 3 quarters based on the order book which we have and the plan of execution. So I think the segments have been defined based on the contribution which they will -- they are expected to provide over the reasonable next 3 to 4 quarters as we have seen. So it will be difficult to project what will be the percentage of geospatial engineering and our technologies as a part of total but I think they both will be substantial.

Sir, what is the progress on the data center [indiscernible]?

So on data center, we have already started mobilizing the team. We have already had a few people. There is already some market research, which is going on. We have market research happening at Singapore as well as at Bangalore. And I think we will shortly be coming out with a detailed business plan, which we can then present to the Board.

Okay sir. Any revenue guidance, means, what are we looking at the addressable market for the TAM in that segment?

As of now, I think we will be -- it will be difficult for us to give you any specific revenue numbers as it being a forward-looking. But it being a new segment, I think it will take at least 1 or 2 years to become a reasonable big segment to account for.

The next question is from the line of [ Garvit Goyal from Nvest Analytics Advisors ].

My question is on the tax rate. In this quarter, the tax rate seems to be very high. So what is the reason for the same?

Very intelligent question. In fact, the tax rate is high only because we have received dividend from our JV company, which is not accounted as a EBITDA. What happens is that the JV company, we have 70% holding and 30% is with the JV partner. We don't account that as a part of our segment. Now when the dividend is issued, we are taxed for that. On top of it, we are also accounting the share of profit for the particular quarter. So the dividend, which is received is around INR 10.7 crores is also added but for which there is no top line of that. And that is why you see the tax rate higher in this quarter. Because for that, the dividend received, we have to pay the tax, while for the normal accounting, current tax, it is only on the book profit, which we are accounting for. So there will be a extra tax of almost INR 4 crores in this quarter because of this dividend income.

So how it is going to be for next quarter? Like I think it is onetime kind of thing, right?

No, dividend is received every year. This time, the dividend declared was higher and it was received during the quarter of July to September and that's why we see the impact here. And earlier also, the dividends have been declared but the impact was lower and therefore, the percentage of tax was not felt. This time, on a taxable income, the amount is around INR 10 crores to INR 10.7 crores or INR 11 crores, on which I have to pay around INR 4 crores. That is the extra income -- extra income tax, which is accounted as a part of the current tax.

So where this amount is getting reflected in our income statement for this quarter, like...

So that goes as a part of the -- that goes as a part of our assets -- adjustment to the assets because it doesn't appear as a part of the income. What appears as a part of income is a quarterly share of profit. So every quarter, like this quarter, we received a share of profit of around INR 2.6 crores accounted on a accrual basis. And during the year, that last year, some of those -- that share of profit was around INR 12 crores to INR 13 crores, on which the dividend was received. And therefore, there is a little duplication of the income on which tax is payable but the income of INR 10.76 crores is not appearing in the income statement as it has already been accrued over the period earlier.

The next question is from the line of Prateek Chaudhary from Saamarthya Capital.

Yes. So one on the acquisition that we have done in U.S., where, on the geospatial side, where we will possibly be targeting the telecom sector over there. If you can maybe briefly tell us what is the scope and opportunity in that foray and how that specific use case and industry is evolving?

Prashantji?

Yes. The answer -- short answer is difficult and long answer won't permit me on the call. So I'm going to try and give you the summary. The acquisition which we have done is a boutique company, which helps these large telecom towers players to create the inventory by scanning their towers.

You said telecom towers?

I have been in -- telecom towers, yes. And they have been in business for like last 6, 7 years. And they have big -- I think U.S. top 3 tower companies are their clients. So we see a potential for them for a serious growth and that is why we have invested in them by acquiring their assets.

Okay. And this would be for mapping of all of the tower infrastructure or the future planning of all of the tower infrastructure, which is to be put up or may be replaced?

Yes. And also, this is one piece of the puzzle. Second piece is whatever is the installed towers, most of these have been installed over historical period. And many of these large companies don't even have the inventory of what is there and how many -- what equipment and what replacement frequency and all of that. So scanning of all existing infrastructure, collecting that information, digitizing that and supplying it.

Okay. And sir, last question, just for our geospatial business, both -- I mean, across the globe, what is the total orders that we have bid for, for which results are still awaited, bid pipeline or orders that we have bid for?

I don't know the exact number but closer to...

Roughly, rough range.

Roughly correct, it is about INR 400 crores to INR 500 crores, yes.

Yes, correct.

Yes. It's in that ballpark. I don't know the exact number.

No, that's in the range. So I would not be able to give you the exact numbers but it is in the range of INR 400 crores to INR 500 crores for which we already bid.

And by the way, this is -- we probably have bidded a little bit more but this is where we believe our winnability is higher. Let me put that caveat also. So our bidding might be a little bit more but we believe our winnability from the bidding, whatever we already bid, is somewhere between INR 400 crores, INR 500 crores, additionally.

So INR 400 crores, INR 500 crores is what you see with a very high chance of you getting the total of this order?

Yes. Now whether it is very high or moderate or high, I would say winnability is a rather better word than trying to put any probability number. We are optimistic about this. Let's put it that way.

Okay. Because I think in some of your other calls, you had mentioned some INR 1,500 crores or INR 2,000 crore number also that...

Yes. So you are absolutely right. If our current is INR 1,200 crores and we are saying INR 500 crores, you are adding up all that together. What we said is consistent.

Yes, I didn't get you, sir.

No, no. If you heard Kaushik's opening remark, our existing pipeline order book is INR 1,200 crores. And we are saying our winnability chances optimistically are another INR 500 crores. So we are talking of total INR 1,700 crores pipeline.

Okay. Understood.

So the numbers which we told you between INR 1,500 crores to INR 2,000 crores is where we will end up, is what we believe.

And this could happen by the end of this financial year itself, potentially?

We'll keep fingers cross here. We are working towards it. Let's hope all the stars get aligned and we get to that point.

The next question is from the line of [ Debashish Neogi from SD Investment ].

First, congratulations, sir, for a brilliant set of numbers and also the transparency with which you come up with the presentation on the con call. Sir, my question is that, I've been investor for quite some time and been following the company for long. I'm seeing -- so from a outsider perspective, it looks like because of the political connections, we are winning these orders but it is not that. Because our win rate is 90% plus, our attrition rate is only 1%, so which means we have competence and engaged employees, which is key to such success. Now my question to you, sir, is if you can elaborate, why our win rate is 90% plus? What exact right to win which we have, specifically geospatial sector, in India in the government department? What is that edge which makes us very different from the others?

Okay. The answer needs to be a little bit elaborate but I will take time for that.

Sorry, sir. If you can give with an example, that will be very nice of you.

Yes, that's what I'm saying, but I'll take that time, okay? So first answer to that question is we have stopped going after buckshot approach by throwing 10 stones and see what hits. Instead of that, we have got into a mode of rifle shooting. So we are not bidding for whatever is available there in the market, let's bid and see what we win. What we have started doing is go after the tenders where we have a serious competency and serious credentials. So that puts us apart from rest of the competition when that bidding process starts and when we look at who is likely going to win. Because right now, if you know, no government contract can be won only on a price alone basis. There is a QCBC (sic) [ QCBS ]. You have to meet many more criteria. And if we have a approach of rifle shooting and looking after only our competency areas where we are competent, confident and with experience we go after them, obviously, the winnability becomes very high. And that's the main reason why you see sudden change in the winnability and profile of the company winning more frequently the larger contracts.

And I think he rightly said that we have the competence where the people have helped to reach to this level. And with a very less than 1% attrition rate, is something which we can be proud of.

Is the attrition rate still so low because this kind of attrition rate is unheard of, sir?

No, that's correct. It's good to hear that and that's correct.

Okay. So sir, if we look at strategically, our core has been geospatial sector in India and more with government contracts, right? Then we wanted to extend the core because ER&D service or technology is linked to geospatial. So we wanted to extend the core. We acquired Allygrow. So now if you look at purely from a -- strategically, we are operating -- I'm putting my words, we are operating in geospatial in India in public sector and ER&D more into automotive sector outside of India, mainly. So my question to you is that, is there real synergy in these 2? And what is the -- if you split the revenue between government and private, what is the revenue contribution now? And what do you see the revenue contribution will be in the next 3 years, percentage I'm talking about.

Okay. So before I come to revenue, let me add a third vertical, which you just missed. Right now, through the acquisition in the U.S., our revenue from geospatial non-Indian government has also started trickling down. So that will also continue to increase. So with all that, plus the acquisitions which we are planning, now let me come back and answer your question. Today, our revenue split up would be 76-24, 75-25, 74-26 in that range, so 75-25. Let's put it a round figure, okay? Over a period of time, we are expecting it to go more of a international revenue. So there will be a interim milestone where we'll probably hit 50-50. And over a period of time, we'll build the company to get international revenue of the order of 75%, 80% and government business and India revenue could be 20%, 30%. So that's the direction in which company is moving.

Detailed, sir. Sir, what you see -- my last question, sir, what you see is the biggest...

Sorry to interrupt, sir. Could you please fall back in the question queue for further questions? The next question is from the line of Rudresh Kalyani from Kalyani Private Business.

Thanks for the good set of numbers. So I wanted to know the total pipeline for orders.

So I think you missed it. We have as of now...

No, sir. I know you talked about INR 1,700 crores. I'm not talking about that. I'm talking about the total order bid which you have bidded till date.

So I think we would -- it will be not practical to provide you the total orders which we have bidded. What we can recap, we have already have orders on hand, which are to be executed for INR 1,210 crores. There are several orders, of which some of the orders which we are focusing right now are in the range of around INR 400 crores to INR 500 crores. So that's the numbers. We may be bidding more but for that, I think that we always, in every quarter, we try to find out opportunities which suit our credentials and credibility. And that bidding process, or I would say, shortlisting process will be a continuing process every quarter.

Okay. And let's say, with the size of the company we have, don't we think we have spread too thin across the segments? We are talking about the metaverse. We are talking about the water pipeline. We are talking of the highways, et cetera and in the transport vertical as well. So just wanted to know your thoughts.

So your observation is correct. But if you step back up a little bit and think through the technology platform for all of this, that's a scanning and capturing of reality. That's our main core competency strength area. All what you said are the use cases of that competency and that's why we are selecting those segments. So we are not moving away from our core competency. We are using our core competency for different use cases. That's the way to look at all what you just asked as a question.

But metaverse as well as the data center is entirely different domain altogether, right?

No, no, no. Metaverse still needs the reality capture data. We are not going to get into virtual reality fighting. But for virtual reality, for gaming, you need a real-world information, which comes from scanning. We are going to build platforms for somebody else to use. Look at it from that perspective, there is a core competency remaining same.

Okay. And finally, my last question is...

Yes, sir, please go ahead.

Sorry, just to complete, data center, as we mentioned last quarter also, is a adjacency which we are seriously exploring because we see there is a big market potential. So that's a different vertical we will create if we get -- decide finally to spend energy, time and go after it very seriously because we see a big potential. But metaverse and all this is a scanning data and the same competency.

The next question is from the line of [ Ankit from Alpha Capital ].

Congrats for a great set of numbers. Sir, my question is in terms of this order book of INR 1,210 crores and bid pipeline, can you comment as in which state contributes most to this? And given, I guess, we won large order from Maharashtra and given Maharashtra is entering election, so any slowdown or any risk we see on that front in the coming times?

So let me answer the question of what is the breakup. You are right to say that the order book has major constituents from Maharashtra and one more major constituent is from Uttar Pradesh, where we have dominant presence as of now. We are building a presence in other states as well. And predominantly, these 2 states are presently accounting for a higher number. The question is of election. Election is going to be over on 20th. It's a matter of small blip, while the execution of the orders which we already received continues. So there is no difficulty in -- which is posed by election. The other businesses, the other options or other opportunities which we have identified in Maharashtra also continues. While similarly, some more opportunities are identified in other states also, which we are continuing to tap. So I don't think any election is going to affect the ability to raise more order book or execute the order book.

Got it. And sir, in terms of this -- I think there can be some, I think, continuity of government as well as change of government. So anything to -- on that front, sir, whether we should still continue to expect good order wins?

So it is -- I think we are not linking our winnability to which government. We are linking it to the credibility and the credits of what we have already delivered so far. And I don't see that the future orders or future winnability is anyways linked to the -- which government is there. It is always going to be on the basis of the quality and the ability to perform.

Got it, sir. And sir, last question is on this -- the INR 6 crore expense that we talked about. Is it like one-off or -- but if I look at historical, our consol EBITDA tends to be slightly lower than stand-alone since last 3, 4 quarters. So is it like INR 6 crores is one-off or like we should expect subsidiaries to go to positive in coming times?

So just to give you answer on INR 6 crores, majority was in quarter 2, although it also has a little bit of, I think, INR 1.5 crores of quarter one. So effectively, we are talking of INR 6 crores of this half. Earlier also, we have been doing the business development activities but this is something which is very focused. So this may continue for next 1 or 2 quarters. I would request Prashantji to further elaborate on it.

Yes, I was coming to that. So 1 technical correction. Until, I think, 2, 3 quarters back, on the consol basis and on stand-alone basis, we were almost similar or on consol, we were doing actually little bit better. The second part, is this INR 6 crores or INR 4 crores or INR 5 crores going to be constant? No, it will not. But because our plans are definitely in place for inorganic acquisitions and all that, these investments will continue. So therefore, if you are going to [ siphon ] the results between consolidated and stand-alone, the picture probably would be similar for some period of time to come in. And that's why when I explained, I said, looking at that way is a wrong way because these investments are happening for a stand-alone company but the vehicle is being used as a subsidiary company. Therefore, we should look at it as a consolidated number.

And I think, for the benefit of all listeners, the subsidiary company is also going to be merged with the parent company. So I think it's only a matter of 1 quarter or maybe a little more that we are seeing the subsidiary separate and Ceinsys separate. The Allygrow Technologies...

Kaushik, I think our U.S. subsidiary will still be subsidiary of the parent.

Yes, that's correct.

Numbers may change but subsidiary will still be there and consol will show a lesser number than the consol -- than the stand-alone, in the foreseeable future, until these investments start giving us results.

That's correct. That's correct. I agree.

So the number will definitely change. So what you are saying as a mix, it may not be [ 78-11 ]. It might be [ 85-5 ]. But there will be subsidiary, there will be consol. And because there is a consol and the investment vehicle is subsidiary, there will be reduction at the consol level than the stand-alone. That trend will continue for the near to medium term future.

The next question is from the line of [ Ankur Aggarwal from Motozak LLP ].

Sir, I wanted to understand about what kind of businesses can come out of data center vertical because it's a very new field for me. And I just wanted to understand this holistically from your side, if you can.

Prashantji?

Okay. On data center, I think we explained that last time also. We have no plans of CapEx investment and running data center for somebody. What we are planning is to get into the designs of data center for somebody. And that's the area which we want -- we are exploring seriously. We are investing in it and we are also looking at that space for the growth. And if you are going to ask me what kind of -- what kind of designs and all that? So it's all areas, including liquid cooling and everything. So that's the area which we are thinking of going into. Yes.

What did you say, sir, including?

Including liquid cooling.

Okay. All right. [indiscernible]

All the areas where technology is involved, yes, all the areas where technology is involved is where we are trying to get into.

The next question is from the line of [ Pankaj Kumar ], an individual investor.

My question is related to the order book. I wanted to know what is the execution period of this order of INR 1,210 crores.

So I can just give you a snapshot. This INR 1,210 crores includes majority of CapEx and a small portion of O&M. The CapEx portion, which is in the range of around INR 1,100 crores, INR 1,125 crores is executable in the next 18 to 24 months, different projects, different time lines. And on the O&M side, there are some O&Ms which have already started. So the period of O&M will be between 1 year to 2 years to 5 years. So that's the kind of execution cycle.

Ladies and gentlemen, that was the last question for today's conference call. I would now like to hand the conference over to the management for their closing comments.

Sure. I think we are grateful that -- to all the participants who have taken so much of their time and interest to ask the questions and understand our company. Thank you all for participating in this earnings conference call. And I hope that we have been able to answer all your questions satisfactorily. If you have further questions or you would like to know more about our company, please reach out to our IR managers, M/s. Valorem Advisors. We once again thank the host, Choice Broking, to enable this facility. And we thank once again all the participants. Thank you.

Thank you. Thank you, everyone.

On behalf of Choice Equity Broking Private Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.