HLE Glascoat Limited ($522215)

Ladies and gentlemen, good day, and welcome to HLE Glascoat Limited Q4 and FY '26 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Vidhi Vasa from MUFG Intime. Thank you, and over to you, ma'am.

Thank you, [ Yusuf ]. Good evening, everyone. Welcome to the Q4 and FY '26 Earnings Conference Call of HLE Glascoat Limited. Today on this call, we have Mr. Himanshu Patel, Managing Director; Mr. Harsh Patel, Executive Director; Mr. Naveen Kandpal, Chief Financial Officer; and Mr. Nilesh Ganjwala, Senior Adviser. This conference call may contain some forward-looking statements about the company, which are based on beliefs, opinions and expectations as of today. Actual results may differ materially. These statements are not a guarantee of future performance, and involve risks and uncertainties that are difficult to predict. A detailed safe harbor statement is given on the company's investor presentation, which has been uploaded on the stock exchange as well as company's website. With this, I hand over the call to Mr. Himanshu Patel, sir, for the opening remarks. Over to you, sir.

Good evening, ladies and gentlemen. FY '26 has been a landmark year for HLE Glascoat. This year is defined by strategic expansion, operational resilience, technology leadership and the successful integration of transformative acquisitions that have further strengthened our position as a diversified global engineering solutions company. At the same time, we continue to benefit from broader industry tailwinds. Global supply chain diversification, increasing investments in pharmaceuticals and specialty chemicals and the growing presence of preference for reliable engineering partners continue to create significant long-term opportunities for the company. During the year, we delivered consolidated revenue from operations of INR 1,353 crores, reflecting a strong year-on-year growth of 31.7%. EBITDA stood at INR 148.5 crores, while PAT came in at INR 56.6 crores despite transition-related costs and losses associated with newly acquired business. These numbers reflect the strength of our core operations, disciplined execution capabilities and sustained demand across our product portfolio. Our consolidated order book stood at approximately INR 681.6 crores as of March 31, 2026, providing healthy visibility for FY '27 and reinforcing confidence in our future growth trajectory. A key strategic highlight during FY '26 was the acquisition and subsequent integration of Omeras GMBH and Omerastore through our wholly owned subsidiary, HLE Surface Technology GmbH in Germany. Also, the current order book at Omeras is around INR 78 crores, which provides an encouraging visibility for FY '27, and creates a stable base for profitable plant operations in the coming months. Our experience with international acquisitions over the years has been extremely encouraging and continues to validate our long-term strategic approach the successful integration and growth of Thaletec is a strong example of this. Since the acquisition, we have been able to strengthen the business meaningfully, delivering healthy double-digit growth along with strong double-digit margins. This reflects both the strength of the underlying business model and our ability to create value through operational integration, technology focus and customer engagement. A key aspect of our acquisition philosophy is selectivity and strategic fit. We remain highly disciplined in identifying businesses with differentiated technologies, strong market positioning, niche capabilities and high entry barriers. As we know, Thaletec continues to remain a highly specialized and differentiated platform with strong technological strength and a well-established market reputation. Similarly, we believe Omeras represents another unique and strategically valuable business operating in a specialized niche and established customer relationships. We remain confident about the long-term potential of the business and the meaningful contribution it will create from FY '27 onwards. Another important milestone during the year was the successful completion of the amalgamation of Kinam Engineering, Kinam Enterprise Private Limited with HLE Glascoat on the approval received from the unviable NCLT [ Endava ] branch. This development further strengthens our capabilities in the heat transfer equipment segment and [indiscernible] better alignment and integration across the group structure, positioning us for more efficient and scalable growth going forward. Moving to filtration and drying. This business continues to deliver strong performance during FY '26 and remain one of the key pillars and growth delivers for the company. The business benefited from healthy customer demand, differentiated technology offerings and strong execution capability. We continue to maintain the leadership position in this segment and remain optimistic about the long-term opportunity landscape, supported by increasing process automation and rising demand for advanced process solutions. With regard to the glass line equipment business, we witnessed encouraging recovery momentum during the later part of the year. The India GLE business saw improvement in execution levels, order inflows and capacity utilization, supported by healthy demand from pharmaceutical and specialty chemical customers. We also continue to receive encouraging customer response for our Thaletec range of advanced glass line product, particularly in applications requiring higher performance standards and process reliability. The Thaletec business continues to strengthen its positioning in international markets, especially across the U.S. and Europe. While large pharmaceutical CapEx announcements globally are gradually translating into project execution, we believe we are well positioned to benefit from these opportunities over the medium term. Within the Omeras business, we have adopted a calibrated and disciplined approach focused on execution, quality, selective order acceptance and long-term sustainability rather than pursuing aggressive near-term scale. During the integration process, we also rationalized certain nonviable business segments in line with our diligence assessment. We believe these measures will help establish a stronger and more sustainable platform for future growth and profitability. The heat transfer equipment business also delivered a stable performance during the year. Successful execution of oil and gas related orders has strengthened our track record in this segment and expanded our opportunity pipeline across both domestic and international markets. From an industry perspective, demand conditions remained relatively healthy across pharmaceutical and API-related segments during the year, while specialty chemicals witnessed gradual improvement. Agrochemical demand continued to remain relatively subdued, although inquiry activity has improved selectively during the recent quarters. Overall, customer engagement levels and project discussions across most business verticals remain encouraging. We remain confident that the strategic initiatives undertaken over the past few years have created a strong foundation for the next phase of growth for HLE Glascoat. With a healthy order pipeline, diversified end user exposure, strengthened international operations and improving international visibility and benefits, we believe the company is well positioned to deliver sustainable growth and enhanced stockholder value over the medium to long term. From a balance sheet perspective, we continue to maintain a disciplined financial approach during the year with a strong focus on working capital optimization, prudent capital allocation and enhancing overall financial flexibility. Our long-term approach towards balance sheet strengthening, efficient cash flow management and sustainable growth remains unchanged. Further, the Board has recommended a dividend of 55% for FY '26, reflecting our confidence in the long-term fundamentals and cash flow generation capabilities of the business. As we enter FY '27, our focus remains firmly centered on improving profitability, enhancing operational efficiencies, driving better asset utilization and strengthening cash generation across businesses. We remain committed to disciplined execution, prudent capital allocation and building a scalable technology-led global process equipment platform capable of delivering sustainable long-term value creation. I will now hand over the call to our CFO, Mr. Naveen Kandpal, who will take you through the financial performance for Q4 and FY '26. Thank you, and over to you, Mr. Naveen.

Thank you, sir. Good afternoon to all the participants. I am pleased to share our financial result for the quarter end FY '26. During the quarter 4, the company reported consolidated revenue from operations of approximately INR 391.7 crores, with a growth of 17.4% compared to Q4 FY '25, with EBITDA of INR 43.9 crores and EBITDA margin up 11.2%. The company earned profit after tax of around INR 20.1 crores with a PAT margin of 5.1%. For FY '26, our revenue grew by approximately 31.7%, rising from INR 1,027.5 crores to INR 1,353 crores. Our EBITDA for FY '26 stood at INR 148.5 crores against INR 140.9 crores, thus restoring a growth of 5.4% year-on-year and EBITDA margin stood at 11%. In Q4 FY '26, our filtration, drying and other equipment segment grew by 11.9% compared to Q4 FY '25. We reported a revenue of INR 122 crores in comparison to INR 109 crores in the corresponding quarter. Likewise, for FY '26, our revenue increased by 50.9% in this segment. Meanwhile, our glass line equipment business generated about INR 219.5 crores of revenue in Q4 FY '26 compared to around INR 169.9 crores last year same quarter, reflecting a growth of 29.2%. Likewise, for FY '26, our revenue increased by 15.2% in this segment. The heat transfer equipment segment showed a revenue degrowth by 10.9% in this quarter. But for FY '26, our revenue increased by 54.6% in the segment. During the financial year, margins were impacted because of the EBITDA loss of INR 15.3 crores and PAT loss of INR 15.6 crores at the recently acquired business of Omeras in Germany, as well as the exceptional items related to the statutory impact of the new labor cost, amounting to INR 2.1 crores and business acquisition cost of INR 4.6 crores. We continue to prioritize efficient working capital management, disciplined capital allocation and internal accrual funding to further strengthen our balance sheet. Also, the Board has recommended a dividend of 55% for FY '26, reflecting our confidence in the long-term fundamentals and cash flow generation capabilities of the business. Thank you. We now look forward to taking your questions.

[Operator Instructions] First question is from the line of [ Vivek Rakolya ] from [ Paycom ] Family Office.

Am I audible?

Yes. Go ahead.

The first question was in the Q2 con call, the management had expected an EBITDA margin of 16% for the full year of FY '26. The actual stood at 10% -- 11%. Other than the label or changes and Omeras acquisitions, what were the 3 key reasons for not achieving this guidance? And how would you expect the revenue and the margins going ahead, if you could quantify wherever possible?

So I think in the Q2 call, I think the discussion was not related to the overall margins for the second half of the year and also for the next financial year because the first 6 months had already passed by. If you adjust for the Omeras revenues and the losses incurred there, which was, of course, also expected from a loss perspective, the adjusted EBITDA margin for the business, the ongoing business, is close to over 13.5%. So that is a considerable -- considerably higher than the 11% that is currently reflected after adjusting for this thing. So I think from a margin perspective, we are on an upward trend, and we are expecting this trend to continue in the coming financial year.

And would you expect to achieve 16% full year EBITDA margins in the next 2 years?

Yes, that would be correct. That would be correct. Again, 16% EBITDA margin, I would expect from the entire business with the exception of Omeras because Omeras is right now in the turnaround mode. So while we expect Omeras to be profitable, Omeras may not, by itself, deliver 16% at a stand-alone basis. So on an average, it could drag the average down a little bit, but excluding Omeras, we will be at 16%, yes.

Great. The second question is, again, in the previous call, the glass line equipment utilization was expected to move from 60%, 65% to 80% in the exact quarter. What has been the update on the utilizations? And also in the presentation, it was mentioned that the GLE margins have fallen, EBIT margins have fallen from 18% in FY '21 also to 10%, considering the exceptional year due to Omeras' acquisition this year. But the broader trend is clear. What steps are we taking to reverse this decline? And is there any indication that the steps are working?

Again, the same thing, if you adjust for the Omeras numbers, as you rightly said, our adjusted margins would be in the range of about 10% for the year. And for the last quarter, it will probably could be closer to about 11.5% to 12%. So that's really where we are. As is obvious, things are looking better. At the glass line equipment business, specifically from an India perspective, we are now closer to over 75% capacity utilization. And even the order booking and the order pipeline looks far more encouraging than it was the whole year. Interesting to note here that the Thaletec range of products that we have introduced in India and have -- having -- talking about that for the last couple of years, is seeing very good traction. If you remember, we had presented this as a medium-term opportunity, and we had always estimated that this will take about 3 to 4 years' time for a substantial versus a mindset change in the hands of the users. We are seeing that happening. And this year, Thaletec products have contributed close to about 20% of the overall glass line India products. So I think that's already a substantial improvement from that perspective. Going forward, we only expect this trend to further strengthen.

Understood. And does Thaletec face the same margins as the India operations?

The Thaletec margins are relatively stable relative to last year. We are currently in the low double-digit margins at Thaletec at the EBITDA level, and those margins are in line with expectations. The only thing with Thaletec is that over the last, I think we had a slightly softer third quarter, due to which the annual sales of Thaletec has related -- has remained more or less stagnant. We haven't seen growth at the top line level at Thaletec Germany, but we are expecting that again to turn around because the current order book at Thaletec Germany looks very encouraging.

Understood. And the next question was about the recent developments on the impact of gas prices. That glass furnace operations, has there been any disruptions in that? And is there any likely impact in Q1?

Yes. So the gas pricings have definitely increased. We -- as with so many other things that have changed because of the recent conflict in Iran. Now so far, we have been able to pass on the price increases to the large extent. But so there has been the impact. So what was your exact question actually? You got cut off a little bit in between.

No, no, sir. That answers my question, sir. And do you just -- taking a step back over the last year of operations, which were the 2 areas wherein management had a big positive and big negative surprises over the last year?

I think the big positive or -- I mean, there was not one single big positive, but the fact that the pharmaceutical API sector is doing well is positive for us. And also, we were beginning to see some recovery in other sectors. That was positive. But then, as everybody knows, the last month or last -- in February, things have changed again. So therefore, probably the big negative. So it is -- a big negative is mostly the external geopolitical issues that are going on right now.

Understood. And sir, the last question was that Omeras was expected to achieve double-digit margins and breakeven by the Q4. Was the set target achieved? And if not, what were the reasons for the same? And also from a strategy standpoint, what is the game plan for Omeras over the next 2 years considering there is a longer execution time line of 12 to 18 months for that segment?

For the Omeras is now very close to breakeven, which is exactly what we had expected and what we had communicated at that point of time. I think we expect, over a period of time, maybe over the next 2 years, to get into double-digit margin kind of business. The growth at Omeras, both in terms of capability as well as in terms of the order book, is very, very encouraging. In fact, the order book from December '25 to March '26, over one quarter, the order book has almost doubled, and we expect this trend to continue going forward as the pipeline of orders over there is very, very strong. So we expect Omeras to turn around very, very soon. In fact, we are very close to breakeven as we already mentioned earlier. In terms of getting to double-digit margins, I would expect that to happen in the next financial year for Omeras on a stand-alone basis. So I think as far as Omeras is concerned, we are very much on track. We have built capabilities, as I mentioned earlier. We now have a very strong team. We have concentrated over the last 6 months to build a strong management team, which is critical to deliver the results and performance that we all expect. And I think we have now a team in place already. And I think things are looking very, very encouraging on an overall basis, both from a perspective of team capability as well as the order book in hand and the order book pipeline.

[Operator Instructions] Next question is from the line of [ Kiran ] from TableTree Capital.

Sir, I have a few questions. First question, sir, are you giving the breakup these days for palleted glass line treaters and dryers and cleaner for FY '26?

I think, as for the segment reporting requirements, we do provide results for filtration and drying, which is, of course, filtration drying is straightforward. Then the glass line products, which includes glass line India, Thaletec, which is glass line Germany, and glass line panels that are being manufactured at Omeras, and heat transfer basically captures the heat exchanger business of Kinam. So that's how we are presenting the numbers. I think that's absolutely clear.

Got it. Got it. So the glass line piece is what is the combination? And out of the 24% was, to answer your previous question, previous responder, 24% of that was from Thaletec?

That's correct. That's correct.

Okay. Got it. Sir, second question on -- actually, so question on Kinam -- heat transfer equipment rather. We've done INR 200 crores of revenue. I think in one of the con calls, I can't remember which quarter, but we said we had one large ONG order on heat transfer equipment. And this year, we did INR 200 crore. Do you expect a similar kind of run rate on the heat transfer equipment going ahead as well for FY '27? And margins also to kind of be in a good range for heat transfer?

So I think we expect the heat transfer business overall to grow at a 15% to 20% range for the next couple of years. That is what we expect. And yes, we have made some inroads in the petrochemical industry, and we are looking to expand or rather -- our market. We are also looking at some export opportunities. And in the long run, we feel, especially with the current geopolitical situation happening, whenever that [ second ] round, we expect the demand for the [indiscernible] business to really jump. So whenever that happens, we may then talk of a different kind of growth. But that time line is uncertain, of course, for obvious reason.

Got it. So until that time happens, 15% to 20% growth is what you're projecting for the next 2 years year-on-year?

Yes. Yes, correct. That's correct.

Got it, sir. Sir, second question, sir, from Omeras perspective, obviously, we bought it for INR 27 crores. It had about INR 200 crores of revenue. Now if I remove INR 100 crores, because it was only 6, 8 months where we had Omeras for this year, INR 89 crores is what the presentation says. So roughly, we did about INR 1,250 crores this year. In terms of the demand that you're seeing, especially Thaletec, very good demand. Omeras, very order book doubled. I think pharma and CDMO stuff within India is exploring. Sir, do you think that INR 1,250 crore has a potential to go to about INR 2,000 crore in 2 years?

I think if we do less than INR 2,000 crores, we will be disappointed. I think -- but this would -- but I would only -- the only difference would be -- I would include Omeras in the 2,000 number.

Got it. Got it. Got it. So we are saying, including Omeras, INR 2,000 crores in a couple of years, give or take? I mean, I'm not holding you to it. I'm just trying to understand the reason, sir. And 15% plus margin overall, not this year, but overall, next year is what we are trying to target?

Yes. I would say, again, 15% margin, let's understand the Germany business delivers a lower margin. The Indian business, yes, 15% plus, for sure.

Got it. Sir, I was asking about the [ consultants ]. So consol will not be -- it will be around 15.

Consol could be in the range of 14 -- between 14 and 15 on a consol basis.

Got it. Got it. Understood, sir. Understood. Understood. And one last question, sir, in terms of customer segments, when it's a customer segment, obviously, we cater to primarily pharma and agrochemical and chemical. Within the subsegment, where are you seeing the steepest growth for -- demand for our filters and dryers, glass line, including Thaletec and Omeras. I mean, in terms of subsegments, would be really interested to see where the CapEx is happening.

So most of the CapEx currently in India is happening in the pharma sector, API, I should say. There is also demand in the customer manufacturing sector. I think as I explained of the specialty and the growth, we come from not keeping up with the pace of the others. So that is how it is moving for both filtration and drying as well as for glass line India business. It is going thus far for glass line Germany business, it's a mix, but we have had also more share from the pharmaceutical API business.

Next question is from the line of [ Pehel Sharma ] from DD Investments.

So I wanted to ask that like how does your long-term global strategy evolve? And what roles in Europe and other international markets play in driving HLE's future growth?

Yes. Thank you. I think if you see actually as a company in the last few years, we have positioned ourselves well in Europe. So we have, of course, already processing in India, and we were exporting 2 different countries from India. But since 2021, we have positioned ourselves in Europe. So in Europe, we have -- for Thaletec products, we have already started expanding out of their markets of sand, which you used to call it a DACH country, which is basically Germany Austria, Switzerland. So we already expanded out of those countries, and now we have related reach in different areas of Europe. But we have also, in the last few years, expanded into the U.S. market. So we have appointed more people there, and we have gotten orders of -- consistently orders from the U.S. for the last 2 years. And our global -- as part of our global [indiscernible] the U.S.A. will be a major growth driver for us at Thaletec. This will also be the case for our Omeras business. Omeras is known position in Europe, especially in Italy and in Germany. So as a first step, we would like to expand our presence in other countries in Europe. And as a step 2, we will also take Omeras to the U.S. So we want to become a global company with technology and global companies [indiscernible]. The new opportunity that will come by also with the Middle East because as I explained in the previous question, [indiscernible] become a great opportunity for us in the retail center business. So we already have a lot of things going on, and we have already invested in people in the Middle East. So we have our own sales being [indiscernible] and this was being done well before all the funding starts. So that was also a big area of focus. So Europe, Middle East, U.S., we are well positioned to expand ourselves into different markets.

Great. Great. Understood. And one more question that what is your current utilization level in the heat exchange segment? And how is it expected to trend over the next 2 years, like next 2, 3 years?

So the utilization in heat exchange business is about 70%, 75%. And I think we will -- as I explained, we will grow at -- at a normal pace, we will go at a 15%, 20% for the next 2 years. So because we are doing that, we are also looking for creating -- we start looking for creating capacity next year onwards based on how it goes -- how currently it goes.

And one more last question that where do you expect incremental demand like for heat exchangers to originate geographically? Like between domestic markets like India and export regions such as Europe or the Middle East?

So our current focus, of course, is in India. So for India, the strategy is penetration because there are players present. We have new events for India in the [indiscernible] business, especially for petrochemical and oil and gas. For the traditional chemical and pharmaceutical industry, we are the largest player in the country, and we will continue to grow well and keep our market share. The next growth of -- next phase of growth for us is expected to be the mix to begin with. And later on, as a step 2, we will expand in the United States.

Next question is from the line of Ajay from NIVESHAAY.

Sir, wanted to know more on Omeras. If I heard it correctly, you mentioned that new order book [indiscernible] 78 crores?

Yes. The current order book is about INR 78 crores to INR 79 crores.

Got it. And sir, [indiscernible] average more on Omeras, what was the contribution mainly in this quarter and get reported in the analytics? I mean is that subsidized or how much contribution has recorded for Omeras and which quarter? And also the time maybe because the Thaletec [indiscernible], we still a net margin of around maybe [ 13%, 15% ]. So is there in any [indiscernible] absolute any loss which we are in at Omeras currently? And maybe this year, as was [indiscernible] Omeras [indiscernible]?

So Omeras' revenue contribution in the fourth quarter is about -- between INR 43 crores INR 44 crores to the overall sales of the consolidated basis. I think the margin at the EBITDA level is -- we touch breakeven when we do roughly about -- between INR 45 crores to INR 50 crores in the quarter. That's roughly about INR 15 -- between INR 15 crores and INR 18 crores, INR 20 crores to INR 17 crores per month. So that's our rough breakeven calculation. Of course, it depends on margins and some dynamics of the business. But probably, that's the kind of number that we are looking at, which effectively means that at roughly about INR 225 crores kind of an annual revenue, Omeras will be at EBITDA breakeven. So that's as far as Omeras is concerned. So as Thaletec is concerned, I think we have had a year where, as I mentioned, where the numbers were slightly subdued in terms of growth related to the previous year. But the margins have been in the low double digits. I think it's in the range of roughly about 11% -- 11%, 11.5% at the EBIT level.

Sir, like the call on Omeras that you are targeting maybe this year to actually breakeven and we have some margins. So this we are mainly a [ 200 crore ] top line. Is that what -- we're aiming at on the Omeras business?

I think the aim is to get way above INR 200 crores. That's what -- obviously, yes, yes, certainly. The order and the pipeline currently indicates that we'll be able to achieve that for this year. So while the margin may not be very healthy in terms of double digit or so on, but at least the fact that it makes a sustainable turnaround, would itself be a very big thing for us. Going forward, of course, we can wait on top of that.

And just majority of the demand will [indiscernible] maybe give some color on this? And [indiscernible] this, the India CapEx, which we are planning to move for Omeras, like which particular is that for and will [ lag ] beyond the [indiscernible] businesses they're looking at? The [indiscernible] vertical particularly for Indian business?

Sorry, for the European market, we expect demand from both banks as well as from architectural business. So Omeras has a great strength in architectural business. So -- and that we will continue to do. And also, we expect a robust healthy demand from tanks. So as far as the India investment is concerned, we are investing in India mainly to cater to the Indian market and in the long run of the [indiscernible]. So the demand for the India operations will be -- in the beginning, we are expecting to do only tanks. The architectural market in India at the moment is not at the maturity level where they will accept this product. So yes, in the beginning 3 years also, we will be focusing on tanks for different applications. So tanks also is for a very -- for various applications. Tanks are for us doing -- we have order tanks for storing extremely pure water for semiconductors or foo. Tanks are also used for -- as biogas divesture. So when we say tanks, it's not so simple. Tanks also is -- or multiple segments to come.

Got it. And the time line on this CapEx, like you expect this to get conversion in Q1 FY '27?

We expect to be commercially operational by the end of this financial year. So this will -- the CapEx in India will probably reflect in next year's financials from a revenue perspective.

Next question is from the line of [ Ashika Bajaj ] from Credent Family Office.

Am I audible?

Yes, please go ahead.

So I wondered, did you have any export revenues in this financial year?

I think exports from India have been in the range of about 5% to 7%, so yes, of course, I'm not including the revenues from the Germany business, but exports from India operations has been in the range of 5% to 7% of the India business.

Okay. And just a broad question, which segment are we expecting to drive overall growth in the next 2 years, like in 3 segments that you currently have?

See, our growth will be driven by multiple segments. We will not be driven by one segment, and that is actually what we are aiming for as well in the long run. So pharmaceutical API businesses are doing well, and they will continue to be our top contributor to our growth, India as well as outside of India. But now because Omeras is in our portfolio, we will also -- other things like biogas, storage, storage systems, architecture business, they will also contribute to overall growth. And at -- as part of our strategy, we have been sending into the oil and gas and petrochemical business. So that will also contribute to growth. So this gives us a very diversified product and growth portfolio.

Okay. And is it possible to get a big [indiscernible] revenue for FY '26?

Sorry, I couldn't get your question. If you could kindly repeat?

Yes. Is it possible to go this high revenue number for FY '26?

Yes. So in the current financial year, so Thaletec gave revenue of around EUR 34 million.

Next question is from the line of Vivek Gupta from Star Investment.

Am I audible?

Yes, please go ahead.

Yes. Sir, as the next-gen leaders at the HLE, how do you envision HLE to evolve over the next decade? And what positioning or capabilities would you like the company to be known for? Also additionally, with multiple integrations underway, how are you managing increased organizational complexity and maintaining executional discipline and the margin performance?

There are many questions in one, but I will -- maybe I'm trying to answer to my best understanding. So I think actually, we have always -- so we are always striving to be a technology-led global company. And even with the next generation, that vision or that way of doing business will not change. We will not go into -- has new [ to ] kind of products. Only and only if you have some technology differentiation, then we will enter a segment or a product. So that has been our strategy so far, and we will continue to operate in that way also going forward. As far as the integration question goes, we have now -- this is -- we have already acquired now 3, actually 4 if you start from [indiscernible] glascoat. Four acquisitions, out of which 2 are international and 2 acquisitions are in India. So we have now, I would say, a good understanding of what we have to do when we acquire a company. There is -- and we are carrying that process forward also for Omeras now. And we had already done it for Thaletec and [indiscernible] transport and Kinam. So we have a good team. The team understands what needs to be done, and the indications have been, so far, quite smooth. I hope I answered your question.

Yes, yes, sir. Sir, in the Q2 call -- con call, you had guided for heat exchanger utilizations to reach around 65% to 70%. So could you provide the current utilization level and elaborate on the factors behind your relatively cautious growth outlook compared to the listed peers that are expecting stronger growth in this segment?

See, our current utilization is in the same range, 75% range, plus or minus a few percent. So that is -- and peers, I think as far as the chemical pharma, API, specialty chemical industry goes, there are still no peers to Kinam. So I assume that the players that you are speaking about are really peers or the companies that are operating in the petrochemical and oil and gas sectors. So what is -- we are new -- relatively new entrants to petrochemical and oil and gas. And that is the reason that we are not seeing, let's say, we are not predicting ourselves to do the same kind of numbers of growth that those companies which are well establishing those sectors are having.

Next question is from the line of [ Somya Raghuvanshi ] from Narva Capital.

So my question was, how do you view the synergy potential between Omeras and HLE's existing portfolio?

The Omeras, see, Omeras and HLE, from the market point of view, we have a lot of customers overlap in India and outside as far as the tank goes. There is also a potential to -- for technology exchange because Omeras is a glass line company and Thaletec and HLE Glascoat is also a glass line manufacturing company. The way things operate there is there is opportunity to learn from each other. So that is very good synergy potential from that point of view. And of course, Omeras tends to expand our markets, I mean, reach, because Omeras is present in certain markets where actually we are not strong. So over the period, not -- it's a long process. It doesn't happen overnight. But over a period, we will be leveraging each other strength in all the 3 areas that I just mentioned.

Okay. Got it. Additionally, within the glass line equipment segment, what are the key factors driving the anticipated utilization ramp-up? And how sustainable do you believe the trend is?

So the key factors that are driving the glass line is I assume you're talking about the Indian operations of glass line business. But the demand uptick that we have seen in the API pharmaceutical business and a little bit of recovery also in the specialty and the CDMO kind of company. I mean everything was going well in about February. What we are seeing is some companies are deferring some decisions because of the ongoing geopolitical situation. So while the -- I mean pharma for the pharmaceutical and the API sectors are not yet doing that, but especially the CDMO or the [indiscernible] companies which we are seeing are coming back have kind of, again, deferred a few things. That is what we are seeing.

Next follow-up question is from the line of [ Kiran ] from TableTree Capital.

Sir, I have a quick clarification on, I mean glass line products. If I just take glass line products, it's a combination of our glass line business, U.S. Kinam, U.S. Omeras, right? And help me understand if this is correct. And then -- sorry, go on.

Sorry, sorry, I just would like to interject. Glass line products do not include Kinam. Kinam is in the heat transfer equipment.

Sorry, sir. Glass line includes glass line for India business, Thaletec [indiscernible] Thaletec and Omeras right?

That's correct.

Perfect, sir. So [ 6 76 ] crores is what we did in FY '26. Now if I understand Thaletec's revenues from the previous point of question, EUR 34 million is about INR 377 crores, right? EUR 34 million, INR 377 crores. And then INR 89 crores is from Omeras. So if I subtract all of that, then I got about INR 210 crores of glass line business in India, right? And this is pretty much flatlined. I mean if I look at '21, '22 numbers, it is pretty much flat line there at INR 200 crores, INR 220 crores. I don't know if I'm making any mathematical mistake here?

Yes. I think you are broadly -- broadly, I think you mentioned all is correct. I can just correct you to the extent that the Thaletec India, the INR equivalent revenue is a little under INR 350 crores because the revenue is calculated at the average exchange rate during the whole year. You probably take an exchange rate right at the end of the year. So the number that reflects in the accounts is, I think, INR 345 crores, if I'm not mistaken, give or take a [ crore ] here and there. And the India business is a little under INR 250 crores. So it is a considerable improvement over the previous year.

So improvement of the previous year -- okay, sir. I mean that's great. But are you saying, it's pretty much flatline for -- I mean, I'm not talking about the peak of chemical CapEx in '21 and '22. But from '22 onwards, it roughly seems to be around this 200 to 250 mark, not pushing through it. I mean, is there any -- I mean, should I understand it as the glass line segment slightly in one because of competition; two, because our clients are not -- have not invested as much CapEx over the last 4 years? How should I read this is what I'm trying to answer. Because we have not grown for 4 years if I look at a 4-year time line.

So there is a -- yes and no, because what has happened in the last 4 years, remember, because of various reasons, the margins have been subdued and -- okay, let me put it [indiscernible]. The cost per equipment that we used to get in '21, '22 was much different than what we're getting now. So if you see the activity of the shop floor, the activity in the shop floor has actually increased. The number of equipment that we dispatch has actually increased by 30% to 40%. When the value for equipment has gone down to a certain extent that you don't see the growth in the business. So CapEx is happening. Our business has grown growth from an outlook point of view, not from a revenue point of view.

Got it. Got it. And over the next 2 years...

Sorry to interrupt, Kiran, will we take that -- sorry to interrupt, Kiran, we will take that as a last question for the day. Ladies and gentlemen, we will take this as a last question for the day. I now hand the conference over to the management for the closing comments.

Thank you very much, ladies and gentlemen. [indiscernible] HLE Glascoat, and we look forward to seeing you in the next call.

On behalf of HLE Glascoat Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.