Creative Newtech Limited ($CNL)

Good afternoon, ladies and gentlemen. On behalf of Creative Netech Limited, we extend a warm welcome to all participants joining us for the Q4 year ended FY '26 Earnings Conference Call. We sincerely appreciate your presence as we discuss this quarter and year's performance, highlight significant achievements and share our vision for the future. This conference call may include forward-looking statements that are based on the company's beliefs, assumptions and expectations as of the date of this call. These statements are not assurances of future results and are subject to risks and uncertainties that remain difficult to foresee. [Operator Instructions] Please note that this conference is being recorded. [Operator Instructions] With that, it's my privilege to hand the call over to Mr. Ketan Patel, Chairman and Managing Director of Creative Newtek Limited. Thank you, and over to you, sir.

Good afternoon, everyone. Welcome to Creative Newtech Limited motor and year ended 31, 2026. I would like to begin by thanking all of you for joining us today. every year brings its own milestones, learning and opportunity. And this call gives us a chance to share that journey with all of you. Joining me on the call are Mr. Ajit Sator, Mr. Vijay Advani, our Whole Time Director; Mr. Abhishek can Windeand Sarasota, our Investor Relations team. This year, I believe we make choices that will matter for the long term. We entered stronger categories build deeper partnerships and move CML closer to the future of connected Technomelt. The world of technology is entering a more India region and connected fee. Surveillance is moving beyond cameras into visibility, analytics and extra. AI is improving decision-making, IoT connecting devices, infrastructure and people with purpose. And this is exactly where CML is building its next step. During the year, we strengthened our presence across terminate, AI, IoT, cybersecurity, drone data center solution high-performance computing and connected infrastructure. This development during FY '26 was aligned with this larger direct. Our BS mainboard is pine was another proud milestone strengthening our visibility among the wider indexer community. We have already built a strong base in survelance, and FY '26 helps us deepen that position through partnerships with sparsetrics, and lower. AI and IoT are now emerging as the next player for this ecosystem, and we are moving in that direction with care. Along this, our partnership with so as a special like layer to our portfolio, taking us into mission-critical professional discretion for industrial and enterprise environments. Our B2G entry is another important movement for CL opening lower in public infrastructure and response-led technology. Our partnership with Casper and BDRs is present in cybersecurity and road techno. On the computing side, we strengthened our presence across memory storage, high-performance computing and data center categories. We also expanded our brand portfolio in widen our reach of emerging markets such as Varanasi Varagon San Vigano. Will continue to show the strength of our brand building capability, we expanded its reach over 30 countries in APAC, Middle East and Africa, signed air purifier licensing across 10 countries added home audio products and the new markets, including Indonesia, Pindai. Recorded over 100% growth in performance across India, UAE and Saudi Arabia and sold 1 product every 60 seconds online in FY '25, '26. As I look back at FY '26, I can see that Ciena has moved with intent, built new debt and earn a stronger position in the technology lets. As we said in FY '27, our focus is to keep raising the bar by converting our momentum into stronger execution and deeper market. We know the direction we have the momentum and now our focus is to exit the best. Looking ahead, our ambition is to make creative Metecstronger in Elyse. Stronger in the categories we chose, stronger in the brand we built stronger than the partnership we create and stronger in the value with this. We are building a business that is aligned with the next phase of technology and from surveillance and AI to IoT, cybersecurity, drones, connectivity and infrastructure services. At the same time, Garmin more value through our own brands, licensed brand and strategy brand pragmatic. We are building to -- what we are building today is not only for the next quarter or the next year. We are building an institution with depth, trust and global ambition. I want to thank our teams, partners, customers and stakeholders for their continued belief in PM. We move forward with disciplined clarity and a strong commitment to a long-term value space. Now I will hand over to Mr. Ajit Capo, who will take you through the financial highlights for the quarter and the full year.

Thank you, , and good afternoon, everyone. BAT Music has concluded FY '26 with a strong financial performance and a broader operating base. The year reflects the company's ability to scale meaningfully while continuing to build strength across technology categories that are becoming more relevant for enterprises, institutions and consumers. What stands out for us is the quality of progress across the year. The business has moved to a higher revenue base. EBITDA has crossed an important threshold and profit has continued to expand in absolute terms. . This gives us a strong platform as we move into the next phase of growth. The fourth quarter was a strong closing quarter for the year. It reflected healthy business activity across our portfolio. Supported by wider market participation, category expansion and continued momentum across areas such as service, cyber security, data center solutions, high-performance computing and connected technology infrastructure. I will now take you through the key highlights of our consolidated financial performance. We'll note that our financials are prepared in accordance with the guidelines. Looking at consolidated Q4 FY '26 years, the company reported revenue from operations to INR 740.01 crores and total income of INR 740.44 crores reflecting a year-on-year growth of 81.16% in total income. The quarterly EBITDA is at INR 29.39 crores, registering a year-on-year growth of 52.15%. EBITDA margin for the quarter stood at 3.97%. Open before tax for the quarter stood at INR 21.72 crores. PAT for the quarter came in at INR 17.79crores. reflecting a year-on-year growth of 29.57%. PAT margin for the quarter stood at 2.4%. Now looking at consolidated full year FY '26 years. The company reported revenue from operations of INR 2699.77 crores and total income of INR 2717.51 crores. reflecting a year-on-year growth of 50.85%. The EBITDA for FY '26 stood at INR 104 crores, registering a year-on-year growth of 41.73%. EBITDA margin for the year stood at 3.8%. Profit before tax for FY '26 is stood at INR 81.76 crores. PAT for the year came in at INR 70.29 crores, reflecting a year-on-year growth of 32.35% PAT margin for FY '26 stood at 2.59%. For creative mutating INR 2,700 crores in total income, INR 100 crores in EBITDA and INR 70 crores in PAT marks an important financial milestone. These numbers reflect the scale we are building, the consistency of agitation across the business and the strength of our existing portfolio. As we move ahead, our financial priorities remain focused on efficient operations, disciplined capital allocation, working capital management and STD value creation for all stakeholders. That concludes the financial overview for the quarter and full year. Thank you.

Should we open for Q&A.

We can take questions now.

We are now opening the floor for the question-and-answer session. [Operator Instructions] The first question is from the line of Amit Saboo Capital.

So my first question is on the Honeywell business. that business, if you see the gross margin ROE, everything is much better than our legacy business. So have you considered demerging that business to unlock value?

Amit, thank you very much for always being on our conference for from goal packet level. What I understood from you are saying is since annual business is better, can we market year in this, that's what you're saying? .

That business is a much better ROE, much better growth profile. Everything is better than our leases business, which has lower margins, lower growth, et cetera. And typically, if you see the branded businesses trade at maybe 30, 40x multiple. So if you demerge that with that business, which has a fairly good EBITDA PAT, so that will unlock value for shareholders.

So Amit, the long-term plan is that in the next 2 to 3 years, we will be on that path where we'll have the brand business separate and market entry business separate. That's the plan. Because this business while we've been building the brand business of Hanigan, it was very dependent on the market into business because the cash flow infrastructure, everything was used of this business. As this business has now reached a significant milestone, our idea is that we should at least have in the near-term future, 3 to 4 brands. And in the long term use 6 to 7 brands, which becomes a part of this business, and that business can operate at the steel. So for the next 15 months, there is no plan but then probably after that, we could initiate this because that's also another, I think, 12 to 15 months process to demerger. So we are thinking that once that business also -- so for us, a brand is something which is at least INR 1,000 crore business. So once we start reaching the when we will plan.

So my next question is on the -- I just wanted to understand the impact of Middle East are and how do you see growth going forward. And we're also looking to expand in Middle East -- are those plans still in place? How do you see on the ground? What do you expect going forward?

Short answer to your question is that the Middle East were -- yes, it is impacting the business currently because our material moves from China to the Middle East by ships. And now you can only move the material through the Red Sea, where the initial, say, the freight cost was between $1,500 to $1,700 which is now on to $7,500 to $8,000 plus the availability of containers and ship plus the congestion and support. That's the case. If the war stops say in the next weeks time, there would not be much disruption because we had material there, usually, the partner stocks 45 to 60 days materials. Usually, you have in your warehouse of the therefore, 45 to 60 days material. So that was very. Coming to our plans, we think that if this continues, it will be the new normal dam, right? And we have our people there. We have our manpower there, we have our offices there. So when I think the growth or I think the pricing of the products may get affected a little bit of consumer sentiments and hence, consumerism can get affected. But otherwise, in the current scenario, we will keep continuing what we want to plus also, we have to understand that Middle East also becomes your main supply chain out for Africa. So it is very important for us to be in Middle East. Currently, Saudi keeps buying. We have presented all large format retail, ecommerce on e-commerce, their few of raw material stocked out, but otherwise, still materials. Same in earth delay Abu Dhabi and other bases. But if this continues, it will have some material impact for...

Right, sir. And my last question was on the revenue growth. How do you see revenue growth going forward?

So revenue growth for us, our internal thing is that we want to grow by at least in a year 25%, 30% for sure. And the profit also we want to in absolute terms for the next 5, 6 years, growth by 30% for Sue. So -- and in India, the demographics for the consumer business is really in our favor. And the government both on AI, digital infrastructure, making India on the enterprise business also that is. So I think we may have some price escalation, but I don't think demand will go less for the next 3 to 4 years. . And looking at our base, right, we are not at a significant base. We are still not, say, not a INR 10,000 crore company also. So for us, because of our small footprint, I think, for another 3 to 4 years going at this rate would not be a problem.

All right, sir. And then last question and my last question was on the margins. As we scale the business, say, how do you think it will impact margins? Can you scale it to say, INR 900 crores, INR1,000 crores top line on 1 will and still maintain this type of margins. So we do -- the margins will dilute as we scale.

So over a long-term period, if you look at -- so if we take average, the margin will be going higher. You will have a year like this where your margins are impacted because of logistics costs. Two things have happened. The logistics costs have gone higher, the raw material cost has also grown higher. So the summer can digest price increase above a certain immediately. So in that year, your margin would be lower. But in our case, since our operational efficiency will start picking close INR 450 crores, INR 500 crores. Our margin will become better in a business like one. So for example, we are operating at a 13% EBIT now. once we cross the INR 1,000 crores mark, we should operate as it is 18%, 19%. That's why the brand business is so important for us because that cumberlamost all brands to operate on.

[Operator Instructions] The next question is from the line of Mate Shah from Sapphire Capital.

Great results. We had a great growth. And also in 4Q, we had quite high gross and EBITDA margins. Any sort of reason or not this happened either?

Last 2 quarters, we have started focusing on making India companies. And this main India companies are mainly into surveillance and the end customer at some point is either a PSU or government or somebody. And in this case, because the suppliers or the vendors whom they are billing in their size is much smaller. And that's why you get a higher percentage margin. And here in the making India products because you get a chance to also participate in the supply chain scenario. The margin is higher. . While the margin is higher, your expenses are also a bit higher because these are smaller customers, so they can't really have a lot of money for larger orders cash flow. So I think over a period of time, when this also becomes a significant part because of the government's push on AI, IoT, operational efficiency, the digital infrastructure, data centers, this margin -- higher margin will also start showing in the bottom line.

That was great. Secondly, you mentioned we'll have 25%, 30% growth annually, this year, we grew more than 52 this on the conservative side you're guiding? Or do you see this Middle East crisis kind of lowering the consumption going ahead?

So 50% any criteria is ambitious target. What is in our favor is that our base is small. So prices like Middle East may impact a little bit on the bottom line in terms of percentage, not absolute margin. That impact would be there. But otherwise, the demographics of India is in our favor and the digital push also make it also -- if you see our businesses, because it's a manger business like you added surveillance, tomorrow you add Panos, this goes into data center. Immediately, you get a 10%, 15% push for your top line because of a new category, what you added into that. So that will help. The biggest threat for us is right now supply chain disruptions and the cost of raw materials, because the cost used to go up in IT to go down, but right now, the cost has gone up by 30%, 40%, especially memory and storage and CPUs. That's where the cost?

So are we able to pass on these costs or it's happening with the lab? And also are we planning to increase our inventory to kind of help with these price increase that are happening kind of month-on-month?

So whether we are able to pass the costs, yes, we are able to pass the cost to the customer. when there's a customer is able to absorb the cost, now it's the time when the customer is starting to feel the heat of it because the cost has moved higher a lot. So the consumption decrease that. Second question to you is whether we have to have higher inventories. So when the material is in short you keep buying whatever material in our level and also you parked with you for, say, a period of 30 to 40 days. So then we are some inventory various customers can be met what you've done that. So yes, the inventory level also goes higher because then we don't have our GPO. Plus parking the inventory also helps that the future escalation on the price we are able to manage that.

That's fair. Okay. And secondly, now we have these 2 businesses. We have 1 on the market and 1 is the brand business. You said we are in term going to have 3 to 4 brands. Any acquisition on the line that is going to happen in FY '27. Also, how do you see this brand business growth coming in? Because you said 25%, 30% on a consol basis, if maybe you can mention the number on the -- just the brand business. for FY '27?

Yes. So a couple of things. Number one, we have an active look out of looking at any brand which we can look in the surveillance drone AI space. So the brand which have some legacy which has a good team. So we can then just get operational efficiencies in and use our balance sheet to grow. So we are looking at that kind of. Second, with our Honeywell brand, this month every year that we launched our own brand also in this space. This brand categorically, we have launched -- we are planning to launch it in the U.S. and in India. Same categories of products, what we do in Honey. But different models and slightly similar specification. Honeywell business is not available in U.S. for us as a licensing, so it would be good for us to drive that business in the U.S. We will know in the U.S. first online and then we will go into large format retail there because there is no seller. So material is already in the U.S. in the warehouses of mono. Material is already in this. The loss is happening in another 2 to 3 days and the material will be available for the markets from the 22nd or 23rd of. So that will also help us improve One is to have our own brands. So we have freedom of communicating in a way we want to communicate because Anival has this design language system in which we have to communicate that on. Second, it also helps us to go into the biggest market that is U.S. And just for your -- just to give you an idea, the Indian steel fire market is close to INR 3,000 crores. U.S. last year are prefire market was INR 28,000 crores. And out of the INR 8,000 crores of material or $1 billion of material was sold just on Amazon. So this year, at least in our portfolio, we have right now 2 brands, fiber power and animal cyber power JV. And Cyber Power has also started giving results because of government puts on the orange economy and AGC new term is a rent point AGC community that audio visual gains and comic community where the government thing, they can at least pay 2 million jobs in the future. So these 2 brands are there, plus if we are lucky to acquire a brand and then plus the launch of then we will at least have 4 brands in the brand category.

That is great. And again, on the -- like you've explained the how we're going to drive the growth of LAN business, this INR 1,000 crore target that you mentioned -- when do you expect to kind of reach that maybe 2, 3 years down the line? And also, what sort of -- I would say it would you have proportionately from the brand side and from the market entry side because, again, you have quite high margins on the brand side. So just to see how the EBITDA is also scaling up with that?

So if you talk as our vision by 2030, we want to be 50% market and 50% brand business. Whatever is the turnover. And you are part enough to expose it at what we have today. And if we grow at say 25% also what would be the business. That's the first thing we want [indiscernible] Second, as I told for us, any dramas not doing INR 1,000 crores is not a brand. So we -- in that space would at least require 2 to 3 brands, which are above INR 1,000 crores in that right? In the market and this pace business also, we want to have more and more technology products where AI is a component or whether IDs and components or whether we are trying to go to data center, the digital push. So we should be there. So surveillance is again 1 category where we think the government will never allow a foreign company to come in. So there also, as we start working with more and more weaken India companies, and we start working with them or a technology company in this stage. I think there also the margins will start improving. Plus, it would also give a competitive advantage because we are not selling a product when you are selling an appliance product with some amount of software where we did a [indiscernible] So I think we plan this with the team this year and similar kind of skill sets we also got into the company, people want and servers, people who understand surveillance, people who understand AI. And now with the operating leverage, what we have and the scale we have, all the metrics also will start falling in the U.K. So like your manpower costs will not be a to 2%, 2.5% or purchase is possible around 1%, 1.1%. We've already been cost will be less 10%. Your finance cost will be less than 1%. So that will also give us a lot of cost leverage. So what we could do in Honeywell in 7 years' time, for our own brand, we will be able to -- or we aspire to be able to grow it in 3.5 to 4 years. That's the one.

That is quite good. And just a clarification, you mentioned 12% to 13% margins in the brand business, the EBITDA margin or the EBIT margin?

I'll ask achieve to answer that because Ajit is our new CFO. He is thinking that I'm taking all the questions.

Yes. So in the brand business, we are expected to have the EBITDA of 13%.

And because we are in Hong Kong, there is no tax. So that 13% from the PAT yes. .

Okay. And we can scale up to 17% to 18% once we have INR 1,000 crores business on this side.

Because then what happens is your manpower cost, which is 7% drop through, say, 4%, 5%, you get a couple of percentages there from there. Your marketing cost and your online cost, which is close to, say, 16% over a period starts falling to 12%, 13%. So that also gets to an advantage. Lastly, your suppliers start using you a lot, so you give you an extended credit. Pricing at INR 1,000 crores -- 1,000 from INR 500 crores, INR 600 crores, we will start any. So for example, the new brand is also a part of secure connection, we're having with resi. So some capital will go in building the brand. But because the same thing is doing everything and you are not really spending a lot of money for new manpower new losses titan all that. You'll start seeing that coming tar.

[Operator Instructions] The next question is from the line of Sara an investor.

Congratulations for a great set of numbers to you . My question is around if you can share some of the -- if you can share the numbers for Haninge. I mean overall brand business within that was on India and Honewell?

Ajit would take that -- so.

Yes, Brand business in India was INR 231.98 crores and outside India was INR 137.63 crores. Total brand business we achieved in INR 69.61 crores.

Almost INR 370 crores. Brand business is currently 14% -- 86%.

Total share of brand business is 14.1% in our total side of the business. And is 85.5% a market in spine.

Got it. Got it. No, I think that was our guidance was somewhere around 50 to 60. So it's good to see that number kind of .

Your voice not clear.

No, I was saying that our guidance was around INR 350 crores to INR 360 crores. So this is good to see that .

Yes our guidance was around INR 359 crores to INR 360 crores will be INR 370 crores. So in a certain CapEx, we did very well on the audio category.

Yes, yes. Also, can you talk a little bit about the receivables? I think this quarter, we had a little higher receivables.

Yes. So the decibels has gone up from INR 237.76 crores to INR 565 crores. So if you understand from the turnover point of view, so that was 13.41% of turnover in the last year. And now currently, that is coming 20%, so mainly because of in the last quarter, our turnover has got doubled against the same quarter of the last year, that is INR 721 crores from the INR 393 crores. And we are getting into a new area of businesses like AI, servant and data center product line. So where to get into the new areas, we have to extend the extended credit, so this is the reason you can see our debtors are a little bit on the higher side because we are shutting down in the new businesses, and that is going to get normalized in the coming days.

Got it.Okay. One last question is on that Honeywell. I think we got into this annual licensing around mid of '21, and that was for 5 years. So that erosion is coming up for renewal?

Yes. It will come for renewal in March 2027. .

The next question is from the line of Sonia Keswani from Coherent Wealth.

Sir, on attribution and a good set of numbers. I had a question on the intangibles, we have increased quite a bit. What has been the reason there in it?

So now to take the -- so intangible has gone up to 46. So that is a large expansion in terms of the network office and everything. We have all the systems and all the software licenses and everything that we are purchasing -- so this is the reason you are seeing this growth in the intangible assets.

So last year, what we did was we moved to a new ERP. So Microsoft we moved from we move to Microsoft Business Center. Plus we also wanted to incorporate CRM and supply chain into that. So that is 1 expense. We also had to change the servers and the license we had to increase for this. So that's the case. Sonia, we also opened 1 distribution center in Noda. And we made the report of the Aneel LPs in the season, we can make. So I think that...

Yes. So the way we explained you because we are into the new area of as we are opening the new offices. We have our new set of team in development in Delhi opiates and other offices, you have to stand on the intangible and new kind of software and everything. So that's why this expenses you are seeing the kind of growth.

Okay. And on the finance cost bit, if I see the short-term debt has increased INR 300 crores in the last quarter. But then if I see the finance cost has not increased as much. I mean, how are we able to get such look interest cost on such a high amount of debt, if you could just explain that?

Yes. So if you see the debt, so debt has increased from INR 69.56 to INR 83.72 of between INR 171 crore is a supply chain vendor financing for the MSME payment. So that is getting reflected in the balance sheet under the short-term debt liabilities.

Government has induced a platform called the French platform, where SMEs can be paid in 45 days through that platform. So that amount is close to INR 171 crores, which gets reflected as debt into the balance sheet. That's what Asia. This is all at around an interest cost of 8%, 8.5%, 9%. So that's why you don't see any increase in the finance.

To ask your other question is the activity we had was in the last quarter in the second quarter. So basically, you are seeing an impact for around 8 months of interest not 3 months.

Okay. And if you could also help me with the revenue breakup for then Haniel, how much was IP access to restructure cable is audio. So 1 from .

Because we want to overall protect the investor everything from the competitive data, and we said that we will not disclose numbers in new in the 4 categories of accessories where we refer home audio and Honeywell networking cable. But we can definitely say that in the purifier and in the accessory space, we plan to be #2 and #1 in India and abroad. And currently, we are close number 2 in there EBITA space.

The next question is from the line of Grupa an individual investor.

I do late so I don't know some repeating -- but I wanted to know your process behind starting your own brand. So why now? And like if you could give some insights on it. All right. .

Long term, your brand will always get you flexibility, get you higher profitability and long term also, it will help you to go to countries or territories where you want to go through because sometimes it happens and when it's a licensed brand, you can get to all the territories. That's one. So in the -- what to launch your own brand, you should have the right skill set, the right resources and infrastructure and the right connection with the Honeywell business and being in the market for the last 7 years, we have now absolutely the right knowledge of how to build a brand. We also have the right distributor connects across various territories. We have the right supplier connect also. When we were looking at the markets where we are present in Hana, 1 of the most important market in the world is U.S. and in the space of consumer electronics if we are, say #1, #2 in the U.S., then you are #1 number in the whole world. And if you are also a number, say, 12 or 14 in the U.S., we will be the #1 in Asia before -- so in Honeywell's case, we can't do certain categories in the U.S. because it has already been given to a US company. So we said that this is the right time and brand building, again, we know that it's a 3-, 4-year process now. First 1 was me, but now we think that we will be able to do in the INR 3.5 and INR 40 crores. So launching it now. And while Honeywell is scaling up, we can slowly scale this up also and it becomes better. Second, it also helps us to protect our own brand. For example, today, arrears Bazacategory today. Data centers busbar. So a lot of ramps from a broad 1 to enter India and into the territory where we are, right? So if you have your 2 brands, then obviously, you can defend the 2 brands on the marketplace better than having just 1 of that. So that's 1 part of it. Second, your messaging, right? So we want the messaging to have flexibility on a messaging, flexibility on the kind of influences we can use for because now brand are being first built by influencers and online and then they come to the real one. So that flexibility we get it. Third is, for example, we have been spending -- so last year, we would have spent close to INR 32 crores to INR 33 crores on marketing and of the Honeywell, right? which finally, in terms of profitability, you still can get advantage because Anwil get so that in, but we will never be able to use their marketing because that's not for your own brand. So as we will spend marketing money to build this brand, we have that advantage. Lastly, a surfer is a newer category Still, there are not leaders in that manner. So before a category gets associated with the brand, if our bank can take that space into the consumer mindset, it would be better. So that's the pace. So that's why we internally talked about it. And we category created our brand in ways that we will not eat any way into the Honeywell share but it will help us to take market share and also it will help us to grow the market. I hope I have answered your question were Grupa.

Yes, And the other thing was the kind of capital that will be Bellon brand?

Yes. So except the inventory, we will not require any other tariff because the same team is building that -- and I think over a period of time, we get an advantage because we'll become a strategic company for a lot of contract manufacturers because 2 brands are coming out of them. So except the working capital, we don't think will require any Yes, will require at least INR 10 crores to INR 12 crores in marketing initially, but I think the balance sheet can easily support that in the next 12 to 14 months period. This is also 1 of the that we go aggressive on marketing initially because we build a base on that way you can grow faster than wait for a period.

The next question is from the line of Chandra an individual investor.

Just I missed how much do you see the brand business going next 2 years FY '27 and '28?

All right. So our aspiration is that the brand business should at least grow between 50% to 60% every year and the new brand should also add a bit what we are doing there because the base is smaller. In the categories what we are, if you see the market, say, for us audio is close to INR 25,000 crores in India and abroad is separate. The market for INR 3,000 in India and abroad. -- audio for the market for ELO data center cables is close to INR 4,000 crores rin India. One of our -- another networking company, which is also listed at almost INR 1,200 crores of cables on the vessels. So there is a huge market only, which we can address in this space. Only that why this time is required is to build that brand confidence into the people that business. So we have aggressive plans to at least growing the brand space also by 50%.

Yes. This question of your guided for 50% to 60%. But due to the Middle East last -- so can we -- we are confident that it will be growing at 50% still loans?

Middle East war can definitely affect the brand business because a lot of our business is in Middle East for Hanna. So this supply chain does not get restored faster it can get reflected in that case. But because we are launching our own brand also, that's not Middle East, that's U.S. and India. So I think that will have. So for us, Sandra what happens is usually you have a plan is that you want to go this time you have an that you want to grow your own brand and plan is to acquire a brand. So any 1 plan of hit nail you will exactly get where you want to be. So there is a lot of margin built in, but territory while Middle East can become a problem because of the war. So material costs can become the biggest problem because of the war and third is the logistics cost also can become. So you may grow but your margins will erode for that year, for sure, because the consumer cannot digest the 30%, 40% price, hike.

And can you help me out regarding the huge increase in trade receivables, how can it will be reduced going forward?

Yes. So I had explained to you the data has gone up from INR 237.76 crores to INR 565.11 crore that is coming 13.4% last year of turnover to 21% current year of turnover. But turnover has gone up by 50%. In the last quarter, we did a 100% growth in our revenue as compared to last quarter. So that is getting converted into receivables. And another area is that a new kind of businesses, what we are getting into in the AI data internal surveillance project where a little bit of extended credit, we have to extend to the customer. So that is a new territory. We are getting into a new set of businesses we have started. So extended credit, that is going to get settled on in the going forward. So we are very confident that later days and better is going to reduce in coming rates.

The next question is from the line of Tanmay from Schein Star Billa.

Sir, please go ahead. So first of all, congratulations on a very healthy set of numbers for the full year -- so while going through your investor presentation, I'm seeing a lot of traction given on the surveillance part and also there have been a few hints given that we're looking to sort of work with different brands or increase our portfolio or in the surveillance part. So any sort of strategies do we have to acquire any kind of a brand or a company -- or what kind of strategies we are looking to increase that as a share of part of whole portfolio? .

So Sammells elaborate the answers, so can also get an -- our Prime Minister program months Narendra Modi, when we had this Makena initiative, right? And we make in India, we started with electronics. It was the mobile consumer goods, right? And then they went to Surveillance and the products. We, as a company, feel that there are 3 or 4 categories where we will never have any company from abroad coming to India or any players from outside, we will get an opportunity. One is surveillance because it's a case of national security. Second is grown also similarly posing defense. It also is the case of national security. The government is really pushing very much on digital. So with the help of AI data center, we will be able to do that, that way. So we decided that if we want to really work with Indian companies or make in India, and we want to have our own brand we should target the surveillance. Now we also have that because of AI, cameras are no longer is just video capture in the U.S. They are actually data collection devices and the normal camera after having, say, AI you on its backend and can actually do a lot of select monitoring, it can do audit, if you can do a lot of other stuff. -- over company, we said that because we have a lot of AI partners who buy our fiber our PC, we get access to their solution. And we have a lot of camera companies in the partner amateurs. We get employees from customer for camera and when we understand the solution and each our partners solution. So that would face, we think is a very protected space from outside from different companies. So surveillance makes a core. Now when you are -- when you want to enter in the new business we'll require right skill sets to run that. We are looking at it in the save space -- and in the turbulence case, if we can acquire a company, we say a brand and which has put an amount of SI and certain amount of sales that. So we are actively looking at that space. And in that space, over a period of time, we think will -- a lot of growth will come. That's what.

and my second question would be, as we are seeing a lot of issues towards the Middle East concerns. And also, we anticipate some kind of an inventory going spiking up and also a lot of marketing initiatives and distribution initiatives coming up. So are we in talks for any sort of fund raise because I believe the cash on the balance sheet and the detenablement would not let us go beyond the lit. So an is also plans on raising any sort of funds.

So currently, we think through that internal appeals, we will be able to look at the working capital for the next 15 months there's a large opportunity with continue position or companies at least 30% of our size. And if you look at that kind of acquisition, then only will require money. Otherwise, banks and NBFCs are quite supporting on your working capital. So if the capital expenditure has to be done in, say, an acquisition of a brand or something, then only we will look for a fine. But for the working capital cycle, I think we'll be able to manage it to the banks.

The next question is from the line of Sean Jen from Swan Investments.

Congratulations on a good set of numbers, sir. My question is when you're guiding for 50%, 60% of growth in the branded business, what kind of growth are we kind of building in the Honeywell piece because you will also add your own brand. And also, we have the camera business that will come in this piece as well. So ideally, what kind of growth rates are we working with for Honeywell piece of the business?

So thanks, thank you so much for being on this part. In the Honeywells, we are also looking to grow the business at least by 40%, 50% because there's a large opportunity in that space. And that category can be really driven by accessories. That is our electronic expenses category, air beautified and the Honeywell data center to reasons. So these 3, we will definitely look at that. When we come to our own brand business, it's a new launch, so we understand it will take another 8 months or 9 months for the brand to get its footing and into that category. But that will help us to -- U.S. definitely will be a newer business, so it can definitely add to whatever we are doing. In India space, that business, whatever we will add as a turnover will become the brand turnover because there is no base in that. So to answer your question, Honeywell, we will keep looking at growing at 50% because the planned resonance and the brand acceptance among the consumers is very, very real. So that we will go at least by 50% this year also.

Got it. And just last question on this piece again. So your own surveillance as well as your own brand should ideally do 100 120-odd crores going forward in FY '27?

I cannot say FY '27, but I can say that if we get full 14 months, 12 months for after we get a brand, yes, between INR 80 crores to INR 100 crores is definitely possible. And I'll break it up for you because if you look at the Permian business, we think that if we get a business which is already running, then we could with our cash flows and with our team, which is already selling metrics, which is already selling Goa, which is already selling parts in the -- which is already selling Honeywell data, cable, Honeywell, surveillance, cables, universignal, cable into the same casting -- so the same team will be able to do that. So for example, I'm just saying that company is going say, INR 5 crores. We think we will be easily able to take it to, say, INR 10 crores in a year, the same companies we get it. That's one. In our brand space, our only thought is that whatever we did in Honeywell in La we can do 25%, 30% of that also, it will be significant business would be at least INR 25 crores, INR 30 crores for sure. So if we get the full 12 months. So if we say talk from this people next may and we get the surveillance also then it is easily possible to get INR 80 crore 100 crores. And this time also, the advantage will be that we don't have to really invest a lot of money because the same teams are doing the same province, then is trying to do the new brand of surveillance if we get and the same Honeywell do the new band business only the product guide for both the teams are.

The next question is from the line of Bharat Agarwal, an individual investor.

My question is regarding receivable days. So as a percentage of turnover, we have to 20%, which is quite high from the previous year, which I think it was 13% previous year. So going forward in FY '27, so will this number remain as high as 20%? Or like what is the expectation of the company to bring this number down?

No, no, it should fall back to the original number. This is 2 things. One is because it's also a part of March, where we did INR 700 crores in sales plus our average receivables is close to 40 to 50 days. So you get the February, which is 28 days. And then the March turnover, which -- so in May, it has come down. I will also agree that we have to do a better job in the better receivable is and with our CFO, will really work to get it back to the normal 13%, 14%.

Understood. So your debt level will not -- like the debt level currently has increased a lot, including the reds debt -- so that will also reduce because the receivables will reduce?

Two things is 1 is that trade has become a very important platform for -- and the government norm says that all MSM will have to be paid in 45 days. If you see at our business, we sold well with all MNC companies only for a large period of time. Now when surveillance has come and only surveillance making India companies can be there in loan tech also making media companies can be there. That's why the trend is coming. So if you think -- so the supply credit is almost up to INR 171 crores I could in the -- and this by spread, if we remove that, then we are doing a better job.

So if you see the debt level other than the trade supply chain finance that has gone up from INR 69.53 to INR 83.72 crores. So that was only increased by INR 14 crores against the increase of turnover of INR 50 crores 50%, so this is INR 171 crore is the supply chain finance, that is in the short-term loans. So that is going to get normalized once our receivables are also going to be normalized in the coming days.

Understood. And sir, my next question is regarding the license renewal of Hannibal. So how confident are you to get this renewal?

So Honeywell, over the period of time, their average licenses are all 20 to 23 years plus. Honeywell has a very small team of 4 people who do the licensing business. but they get a large revenue into that. So we are very sure that the Honeywell license will get reviewed after March '27. Honeywell themselves are also now splitting into 5 companies of their own. So the rod separating, building materials, building division animal building solutions in separating the productivity division is separating and the materials division separately. Two companies have separated 2 will separate by this July, August. Once that clarity is there, then in whichever the trademark licensing business will follow, they will start initiating the renewal for the next 5 years. So currently, we are very confident that we.

Sir, 1 last question from my side. So currently, in Q4 FY '26, the brand business has seen a decline. I think you mentioned earlier that it was due to middle situation. So what would be the possible impact of this middle situation has been quantified?

So for example, India business is INR 231 crores. And outside the India business is INR 137 crores. outside India business is again divided 50%, 50% between Southeast Asia and Middle East. In Middle East because ships are not moving and with air, we cannot send anything. Plus, there is problem. So we have to send materials through that fee. The trade is much higher. So if the material does not start moving there, then we will definitely have a problem in this quarter. People start accepting the higher rate also from rent fee then. But to give you a call-afigure, it's a chance that we could do only 50% of our business, what we are doing currently. I think would mean we have certain measures that we will start improving the -- we'll focus on the Southeast Asia business more this year, so we can really grow that business.

Ladies and gentlemen, with that, we'll take that as a last and final question. I now request Mr. Ketan Patel, Chairman and Managing Director of Creative New Tech Limited to address us with the closing thoughts.

Thank you once again to everyone who joined us today. Creating new tech loses FY '26 with stronger momentum, wider market base and a clearer part for the future. Our focus is now built on this progress with disciplined speed and responsibly. We value the confidence that us by our shareholders, our partners, customers and teams. For any further queries, please contact part uncertain or the show who are side. Thank you so much.

Thank you very much, sir. On behalf of the entire team at Creative Newtek Limited. Thank you for being with us today. We truly value your time and engagement. The conference has now concluded, and you may now disconnect your lines.