INOX India Limited (INOXINDIA) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to INOX India Q1 FY '27 Earnings Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Abhinav from ICICI Securities. Thank you, and over to you, sir.

Thank you, Atharva. Good morning to all. On behalf of ICICI Securities, I welcome you all to the Q1 FY '27 Earnings Call of INOX India Limited. Today, we have with us from the management, Mr. Deepak Acharya, CEO; and Mr. Sunil Lavati, Head of Investor Relations. We'll begin with the opening remarks from the management, which will be followed by Q&A. Thank you, and over to you sir.

Thank you, Abhinav ji. Good morning, everyone. I welcome all our stakeholders, investors, analysts, friends to the Q1 FY '27 earnings conference call of INOX India Limited. I trust you had the opportunity to review our financial results, earnings release and investor presentation, which are available on the stock exchanges as well as on our website. Joining me on the call today is our VP, Accounts and Finance, Mr. Sunil Lavati, who will later take you through the detailed financial performance of this quarter. Following which, we will open the floor for question-and-answer session. Let me begin with the overview of the global economic environment. Economic overview. The global economy continued to navigate a dynamic landscape shaped by geopolitical uncertainties, evolving trade policies and an increased focus on energy security. While global supply chains have become more resilient over the past few years, regional conflicts, tariff-related developments and fluctuations in energy market continue to influence business sentiments and investment decisions across the industry. Despite these near-term uncertainties, long-term investments in clean energy, industrial infrastructure, aerospace, semiconductor manufacturing and scientific research continue to gain momentum globally. The structural growth trends are creating significant opportunity for companies with strong engineering and manufacturing capabilities. India continues to stand out as one of the fastest-growing major economies supported by robust domestic demand, sustained infrastructure spending, manufacturing-led growth and supportive policy environments. Government initiatives such as Make in India, the Semiconductor Mission, the energy transition, and increased investment in strategic sectors are opening up new avenues for advanced engineering companies like INOX India. Against this backdrop, I'm pleased to share Q1 FY '27 has been another milestone quarter for INOX India. As guided in our previous interactions, we delivered our highest ever quarterly order inflow of approximately INR 532 crores, taking our total order book to around INR 1,686 crores, the highest in the company's history. Our export order book now exceeds INR 1,140 crores, reflecting the growing global acceptance of our engineering capabilities and providing strong revenue visibility for the coming quarters. We also continued to execute projects efficiently across all our business verticals while maintaining a healthy balance between domestic and international orders. Let me now take you through the highlights across our business segments. Industrial Gas Solutions. Starting with our Industrial Gas Solutions business, the quarter witnessed several important order wins across the multiple product categories. One of the key highlights was the significant order from the space exploration industry for 8 large 1,000 panel cubic meter cryogenic storage tanks. In addition, we secured orders for 6 more cryogenic tanks from the same customer, further strengthening our long-standing association with the global space exploration industry. More importantly, these repeat orders reflect the confidence that leading global customers place in our engineering capabilities. Today, INOX India is increasingly being recognized not only as a cryogenic equipment manufacturer but also as a precision engineering partner for global aerospace ecosystem. The semiconductor segment also recorded encouraging progress during the quarter. We received orders for storage and transport equipment for semiconductor manufacturing facilities coming up in Dholera. While these initial orders are relatively modest in size, we believe they represent the beginning of significant long-term opportunities as India's semiconductor ecosystem continue to evolve. Our disposable cylinder business continued to perform well. After crossing the milestone of 2 million cylinders during FY '26, we have continued to receive healthy repeat orders from customers across the global market. Similarly, our Cryocyl and liquid cylinder business continued to gain strong traction in India. We expanded our dealer network and further enhanced manufacturing automation, enabling us to increase production capacity to meet the growing demand as industries increasingly transition from conventional gas cylinders to more efficient liquid cylinder solutions. LNG Solutions. Moving to our LNG Solutions business, we continue to witness encouraging development across the multiple applications. The decline in the global LNG prices has improved the economic viability of LNG as a transition fuel, resulting in renewed momentum in LNG fueling infrastructure. During the quarter, we secured multiple orders from the LNG fueling stations from the customers, including Sabarmati Gas, Ultra Gas, and BPCL. We also received healthy orders from LNG semi-trailers, where we continue to maintain leadership position in Indian market. Our Bahamas mini LNG terminal project is progressing well. The first batch of large storage tanks has successfully reached the project site, and installation activities are underway. We are also encouraged by the development of broader LNG ecosystem in Bahamas with additional satellite station opportunities coming around the initial project. This validates the success of the first installation and creates further business opportunities for the company. After the Bahamas order, we already received 2 additional orders in nearby islands, namely Eleuthera and Great Abaco. Execution also continue on the prestigious LNG fuel tank project for Cochin Shipyard, making our entry into India's evolving marine LNG segment. Cryo-Scientific Division. Coming to Cryo-Scientific Division business, the quarter has been particularly satisfactory. We secured a prestigious order from the CERN for the manufacture of highly specialized cryogenic modules for one of the world's most advanced particle physics research facility. This marks our entry into another globally renowned scientific institution and further strengthens our position as a trusted partner for highly complex cryogenic engineering solutions. We also received another important order from ITER France, reinforcing our long-standing association with one of the world's largest fusion energy research programs. These projects continue to demonstrate our capability in delivering highly specialized cryogenic system for globally significant scientific infrastructure. Beverage keg business continued to make steady progress during the Q1 FY '27 as we further strengthen our presence across key international markets. During the quarter, we continued executing orders from the leading global customers while expanding our engagement with strategic brewery partners. We remain encouraged by the traction we are witnessing from our approved customer base, including the 3 of the world's largest global breweries, Heineken, AB InBev, and Molson Coors. These together account for over 40% of the global beer market value. We received orders from Heineken India, Hartwall Finland for standard keg, and we also received requests for quotation from Asahi and CCU Chile. In parallel, we remain focused on expanding our portfolio of specialized and non-standard keg variants catering to niche applications. We have received orders from Orbel Germany. These value-added products not only enhance our competitive differentiation, but also offer superior margin potential compared to standard commodity keg. Overall, while the beverage keg business continue to scale gradually, we remain confident in its long-term growth prospects supported by strong customer base, expanding market reach and our focus on different product offering. Beyond our core business, we continue to invest in building new growth platforms. During the quarter, we further strengthened our competitiveness moat with the receipt of AS9100D aerospace quality certification, making another significant milestone. This certification significantly expands our addressable market by enabling us to manufacture aerospace components for the onboard flight applications. Until now, our participation in the aerospace sector has largely been limited to ground support equipment. With this certification, we are now eligible to supply onboard system as well, opening up significantly large opportunity within the global aerospace value chain. We are also partnered with ITM SLS Baroda University to establish a dedicated skill development center focused on semiconductor pipeline fabrication and orbital welding. This initiative aims to develop skill talent pool to support India's rapidly expanding semiconductor manufacturing ecosystem while strengthening our capabilities in high-value engineering services. The collaboration also aligns and supports the India Semiconductor Mission through specialized training and industry focused skill development programs. We also entered into a partnership with Wayout of Sweden to manufacture modular water microfactories in India. These innovative containerized systems are designed to convert multiple water sources into safe drinking water while significantly reducing the plastic waste. We believe this partnership demonstrates how our engineering capabilities can be leveraged beyond the traditional cryogenic applications into a suitable industrial solution. As we look ahead, our record order backlog, diversified customer base, expanding presence across aerospace, LNG, industrial gases, semiconductors and scientific research together with our continued investment in technology, manufacturing capabilities and new growth platforms, position us well for sustainable long-term growth. We remain committed to operational excellence, engineering innovations and creating long-term value for all our stakeholders. Thank you once again for your continued trust and support. With that, I would now like to invite our VP, Accounts and Finance, Mr. Sunil Lavati to take you through the financial performance of this quarter. Thank you very much.

Thank you, Deepak sir, and good morning, everyone. I will now take you through the financial highlights for the first quarter ended 30th June '26. For Q1 FY '27, total income stood at INR 382 crores representing a growth of approximately 8.3% year-on-year, driven by healthy execution across our industrial gas, LNG, cryogenic solutions, and beverage keg businesses, supported by a strong mix of domestic and export deliveries. EBITDA stood at INR 90 crores, registering a growth of 1.4% year-on-year reflecting continued operational efficiency and favorable business mix. Profit after tax stood at INR 61 crore, a great performance on a year-on-year basis. As of June 30th, 2026, our order book stood at INR 1,686 crore, the highest in the company's history, providing strong revenue visibility for the coming quarters. Of this, over INR 1,140 crores comprise export orders, underscoring our strong international presence and diversified customer base. Our liquidity continues to remain comfortable with total fund availability of INR 331 crores as on 30 June '26, providing adequate financial flexibility to support ongoing project execution, capacity expansion initiatives, including the Kandla facility and other strategic growth opportunities. That concludes my remarks on the financial performance for the quarter. I would now request the moderator to open the floor for the question and answer session. Thank you.

[Operator Instructions] The first question comes from the line of Jay Negandhi from AMBIT Capital.

My first question is on the aerospace market. Now that we have received a new certification that enables us to supply on-flight products as well. So by how much does that expand our TAM to what value? And what products and solutions are we targeting to supply to these customers now?

Yes. Traditionally, we have been qualified for ground equipment so far. With this certification, now we'll be qualified for bidding several projects which are coming up. And as you know, the Indian Space Research Organization is in full throttle to see that more and more private participation is coming up in the industry. We have been discussing with ISRO and other organizations or other startup companies for various products which we can manufacture. Some of them will be like propellant tanks, which are part of the rocket. Even Indian government has received an EoI for LVM3 manufacturing. With all this, there is a good potential going forward to see that we can manufacture this equipment at INOX India. This certification is the first criteria or the eligibility criteria for most of the equipment to be supplied on the flight. So that way, we are very much positioned well because we have experience of ground equipment and with this, we are now completing the eligibility requirement with solid financials of our company.

All right. My next question would be on the semiconductor market. So we entered into the semiconductor infra space through supplying tanks, and we have also launched the skill development program. So directionally, does that increase our TAM with respect to addressing the semicon market in the future? And I also wanted to understand if this skill development program for pipeline fabrication, would it be eventually used in fab plants or OSAT plants or both?

Yes. See, as you know, we are concentrating all our efforts to see that we grew multifold into the semiconductor business. So we are supplying equipment to Micron, Foxconn, Tata Assam project, Tata Dholera project, and many more now. And basically, this cryogenic equipment, transfer lines for VJ lines, this is one of the capital equipment for this. And the industrial gasses, which are to be supplied to this, is very high purity of the order of 5N or 6N category, we call it. And we are one of the pioneer in manufacturing such equipment. We already supplied earlier equipment to Singapore and Japan, so we have very good quality set up for us manufacturing such equipment. On the semiconductor pipeline skill center, while discussing with these major semiconductor complexes, we found that there is a shortage of people into this area. And It is difficult for -- to execute this project without any support of such people. Whenever we're talking about, like, say, Micron project in Ahmedabad, they require at least 200 to 300 skilled workers to manage this pipeline. So presently, India doesn't have these skilled people, so we have started our training the people. Their first batch is also now qualified, and we'll be supplying this to most of the semiconductor projects in India. And we see a great potential going forward for this semiconductor pipeline business in India.

All right. If I could just squeeze in a small one. Our order intake has been pretty strong in the previous quarter, this quarter as well, more than INR 500 crores. And our press releases suggest that in the coming quarter also the order intake is going to be strong. So does that feel, like, do you feel the need for an upward revision in the guidance that we have given, which was close to INR 450 crores to INR 500 crores of order intake?

Yes, slightly. See, we normally get many lumpy orders like what we recently received from the aerospace company, maybe a few mini LNG terminal orders. So such type of projects definitely increase our order intake in a substantial manner. And we are quite hopeful that there are many such projects which are in pipeline. And if they all come to us, definitely, our growth will be much higher than what we had anticipated.

The next question comes from the line of Mohit Chugh from Shubhlabh Research.

Sir, my first question is, based on U.S. entry opportunity. Sir, I remember that the entity which we had non-compete agreement is probably leaving the USA, and we were legally exploring entry into that geography. Any update on the same?

Yeah. We have up to 2028, we have this agreement. And we have started our spreadwork now, but once it is finalized, we will let you know. So we cannot enter that market before the year of '28. We are in the process of seeing how we can start this operation.

Sure, sir. Good, good. And sir, my second question is, in FY '26 annual report, I read that we are entering into transformer tank business. Please help us understand the economics of the business in terms of average order value and what margins profile can we make?

See, that was one of the small initiative, I should say, we have taken. And we got some orders from GE for that. And the transformer tanks we have already manufactured, but what we are seeing, even though the margins are better, basically this is a carbon steel fabrication, so this does not really fall into our manufacturing capabilities. And though there is a big market, we may not continue with this business going forward.

The next question comes from the line of Shubham from ICICI Securities.

Congratulations on good set of numbers. And I have 2 questions. First being the company has recently signed agreement with Wayout for -- to explore freshwater infra system. So can we expect significant inflows from this going forward? And second would be the inflow for this quarter was boosted by mega order in industrial gas segment from global space exploration sector. So are there more such orders in pipeline?

Yes. We tied up with Wayout of Sweden to manufacture micro factories, which will convert any source of water, maybe river, sea or groundwater, or the industrial wastewater, and convert it into safe drinking water. So these micro factories are very special equipment, which they have developed and innovated for last 3, 4 years. So they'll be transferring their technology to manufacture this, and we'll be manufacturing those equipment. Besides that, we will be using our tanks, which we produce for other beverages, for water circulation, so which will reduce the plastic bottle consumption by a huge number, and it will have advantage of carbon emission reduction substantially. So this is the project, and the first module's designing is over now, and we'll be constructing next 6 to 8 months, and it will be tested and tried at our facility. And once this is successful, then it will be manufactured in mass [ spaces ] that in India so that we become very competitive in the world. One such a project is already on in Dubai, and people are very happy with it, that I was told. So going forward, we see a good amount of potential into this. As you see, the water scarcity and safe drinking water is always a question mark for our country. Definitely, there are 600 million people who are starving for good, safe drinking water. So we have this opportunity, so we will be taking this forward. What was your second question? On the aerospace, you said something?

Yes.

So on the aerospace, yes, we have in the last quarter of the -- fourth quarter of the last year, we received orders, the first quarter we received order, and the second quarter also, we have now received the order, which we already published to the SEBI and other authorities. We expect that such orders will be coming because there's a huge expansion all over the world, and even you can see the many startup companies in India are also putting heavy amount of CapEx for aerospace. So we see good potential for such type of orders going forward.

The next question comes from the line of Divyam Ketan Doshi from 923 Capital.

Congratulations, sir, on the wonderful set of numbers and great order inflow. I just wanted to know how is the LNG performing? As you said, it is a very slow moving -- at a very slow-moving state, but how is it performing?

Yes. LNG, what we have seen last few quarters, especially in India, the growth was not that fast. But now looking to the LNG pricing, which is slightly low as compared to the earlier figures, the delta between the diesel and LNG is quite substantial now. With this, even we'll see -- we are seeing a lot of fueling or CGD companies emphasizing on fueling stations. So already we have received a request for quotation from PSUs, at least two, three PSUs contributing to almost 20, 25 stations going forward. And even the automotive industry is pushing it hard. The Government of India is pushing it hard. The marine sector is also moving very fast. The shipping industry is utilizing LNG on a larger basis. So all put together, we see a great potential for LNG in coming few years now.

Okay. And one more question. The order which we got for a cryogenic tank for space company, so who is the biggest competitor for us there?

There is only one competitor, which we know, that is from U.S., and that is Chart Industries, who is manufacturing this. For such large tank manufacturing capabilities are very few in the world.

Okay. And also one last question, sorry to squeeze in. Can you also give us the segment-wise EBITDA?

We don't calculate segment-wise EBITDA. We calculate in totality.

The next question comes from the line of Mohit Surana from Monarch Networth Capital Limited.

Congrats on the stellar set of order booking and order intake. Sir, as of today, I think our order intakes are north of INR 1,400 crores. I'm including INR 930 crores worth of orders that you've -- that you won in June -- in July month. Sir, out of that INR 1,400 crores kind of order, how much is from the U.S. aerospace company? That is one question. And second, we have seen order booking flat for Cryo-Scientific and LNG division. Any color on how are we thinking on ramping up our order intakes on those segments?

Yes. Out of the total order book as on today, maybe around INR 400 crores will be the aerospace, and balance will be other IG, LNG, and AC. As we see the LNG and cryogenically, we have bidded for so many projects. And we are just waiting for the order to get realized. Basically, because of these customer delays, statutory regulatory authorities approvals, and maybe some impact of this geopolitical situation, the big projects are getting delayed. So -- but we are quite hopeful that this will materialize in next one or two quarters. So the growth that we anticipate in LNG and CSD will continue as per our predictions.

Understood. Sir, when will the bidding for ISRO and the Andaman Nicobar mini LNG terminal project is expecting to start? Have you got any sense from the government on that?

Yes. The solicitation for bidding of Andaman Nicobar is by month-end now. The RFQ for the third launch pad is likely to get released by, again, by month-end.

Understood. And sir, just one last question, if I can squeeze in. What's the update on the new manufacturing plant that you are setting up? What's the kind of completion date you are targeting?

At Kandla?

Yes.

Yes. Kandla work is going on in full speed. The civil work is under construction is going on. And we have already ordered the PEB structures, and all major machines is ordered. So hopefully by December end or mid of January, we should be in a position to start the operation at Kandla.

The next question comes from the line of Bhavika from CJ Shah.

Congratulations on good set of numbers. My first question is basically on the semiconductor side. So how much orders are you expecting from semiconductors in going in the future?

So as you know that we have entered into semiconductor business in just last 2, 3 quarters now. And whatever the opportunities are coming in, we are 100% grabbing the opportunities. However, exactly the total value of orders is difficult for me to tell you at this moment. But we have recently received from Dholera project around INR 30 crore odd plus for the tank, for the storage and this thing, and transport equipment. And we have earlier applied to -- we have received order from Micron as well, from Dholera project. So we are not losing any order, that much I can tell you. But how much will be there from the semiconductor is a difficult question for me to answer at this moment. But knowing our engineering capabilities and our manufacturing excellence, and our experience in manufacturing such equipment for more than a decade, we are quite well-placed for executing these orders.

Got it. And sir, second question I have on the revenue side. Like in this quarter, we did below 18% to 20% growth indicated earlier. Is it due to the logistic disruption? And with an order backlog which we have right now, how much of the current backlog is expected to be executed in FY '27? And how much we'll be seeing it executed in the next going forward '28, '29? And along with that, also if you can highlight that on the EBITDA margin, which has been declined this quarter from the last year, what is the reason behind it? And is it because of the new facility which we are -- we have started, the Savli facility?

Okay. You asked so many questions. I forgot the first question, but still I'll answer. Okay. So basically, the revenue we did INR 382 crores and we have targeted something around INR 410 crores or INR 415 crores. Let me tell you, almost INR 32 crores to INR 35 crores material, which was kept ready for dispatch could not be dispatched because of several issues like logistics pricing going up, supply chain small issues, maybe ships not available, so many things. And we did not want to take any chance that it gets stuck up somewhere. So that was one of the reason. If you would have done that INR 32 crores or INR 35 crores, we would have been in the range of almost 18% to 20% range what we already projected. On the EBITDA margins, you said, we have -- though the EBITDA margins are slightly less as compared to the last quarter, but our margins are still 23.5%, which is within the range from 21% to 24% guidance what we have provided. What was another question then?

The Savli facility, about on that. How's the operations going there?

Yes. Savli facility, the recent new facility, we have already ordered all the equipments, which are major long lead equipments, and the Pre-Engineered Building structures is also ordered now. So out of the total CapEx budget. You're -- Savli or Kandla you're asking?

Savli.

Oh, Savli we have completed everything, then. Sorry, I'm sorry. We have everything and both the shops, Cryo shop and the keg shop is under full production now.

Got it. And sir, the next question is on the Highview Power order status. Like in the previous call, you have mentioned that the next Highview Power project is expected to be in 6 to 8 months. So is anything happening right now on that side?

No, we have supplied the equipments, but the new project initiation is slightly delayed now at their place because of some issues, maybe the regulatory issues I was told. So once that is over, then we will -- but we have bidded for all the projects which they have asked us on that. So we are in quite in line with their requirement. And the products what we suggested to them, they have agreed for the in complete.

[Operator Instructions] We'll take the next question from the line of Preet Jain from Niveshaay.

Yes. Congratulations on good set of numbers. So basically, in the previous call, you stated that the employee cost at your new OpEx at your new facility is much larger than the utilization. So is the new facility now of beverage keg now being utilized at higher levels?

Yes. Recently, in the first as well as the second quarter now, we are seeing good orders coming in. However, still, we are not fully utilizing the facility to the fullest because we have a capacity to manufacture 300,000 kegs. But going forward, we see the good traction for the kegs market and our approval and other quality what we have supplied to all customers. So we expect a lot of repeat orders in this financial year.

And also, sir, when we are seeing the private space in India, a lot of competitors are coming and emerging in this space, and they are currently at INR 200-odd crores of top line. So are there a competition to us? Because we saw 2, 3 private players in India in Gujarat also, one player is coming and Cryogenic OGS, a listed player also increased its capacity, announced increased its capacity. So are they a competition for...