Interarch Building Solutions Limited (INTERARCH.NS) Q2 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Interarch Building Solutions Limited Q2 and H1 FY '26 Earnings Conference Call hosted by AMBIT Capital Private Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not guarantees of future performance and involves risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Jaiveer Shekhawat from AMBIT Capital Private Limited. Thank you, and over to you, sir.

Thank you so much. Good evening, everyone. I welcome you all to Quarter 2 FY '26 Earnings Conference Call of Interarch Building Solutions Limited. From the management side today, we have with us Mr. Arvind Nanda, the Managing Director; Mr. Manish Garg, Chief Executive Officer; Mr. Pushpendra Bansal, Chief Financial Officer; Mr. Viraj Nanda, Executive Director; and Mr. Anil Kumar Chandani, President of Corporate Finance & Strategy. Now I would like to hand over the call to Mr. Arvind Nanda for his opening remarks. Thank you, and over to you, sir.

Thank you, Jaiveer. Thank you, everybody, for joining the call. I'm Arvind Nanda, Managing Director of Interarch Building Solutions. Well, you have seen all -- you have all seen our results. Normally, I start my presentation with explaining more about what pre-engineered buildings really are and how they are differentiating from contracting or construction or fabrication or steel buildings. But I think over the last 1 year and now with some other companies also coming into this space, I think more and more people are familiar that pre-engineered building is a separate space and a separate category by itself, which cannot be similar or mixed up with other kind of construction and building activities. Primarily, very briefly, I will say that as a pre-engineered building manufacturer, while all the buildings are made of steel, fully steel, there is hardly any non-steel element in the building. But the main difference in pre-engineered buildings than any other buildings or industrial buildings, especially steel buildings, is that the pre-engineered building company will do the complete solution, complete comprehensive one package, one product, one-stop shop kind of a product. We are making a building into a product. So right from value adding to the customer's requirement, value adding to tell him how he can make his building better in a pre-engineered building, saving commercially and schedule-wise time. We then work on the full design and engineering of the building. Customer will only give us his requirement. How the building requirement will be met and these buildings can be sometimes very complex, very large, very high and very open span. So these are no longer very simple envelope or cover kind of a building. These are very, very complex buildings. And in today's environment, most of the manufacturing processes also happen on the building, the process building, mezzanines, conveyor systems, machinery mounted on the buildings, robotic systems. They are all a part of the building itself. So therefore, the building design and engineering is a very highly complex job. Therefore, the first task of a pre-engineered building is to have that capability of design engineering in-house to be able to design and engineer any customer's requirement. If it's a semiconductor plant or a data center or a lithium battery plant or a paint plant or an FMCG or an automobile plant, we must have the capability of converting that requirement into a building. And not only convert it into a building, but also most efficiently and most competitively because this product is offered as a one lump sum price. So how we design it, how efficient we are in designing, how good our softwares and how good the skill of our people is, is primarily the decision -- just a decider in when we get the order or not. If I'm not very efficient in my design, I designed the building in a higher weight or in an inefficient way for scheduling or for costing, I will not even get the order. Because right at the stage of estimate, I have to do all my design engineering in the most efficient manner and then give the customer a one lump sum price. So not only does my engineering calculate the amount of steel required, whether it's in columns, beams, how they will be made, how the secondaries will be done, the purlin, the roofing, cladding, hardware, everything will be done, then we manufacture the whole building in our factories. Unlike any other steel building provider or a civil work company -- civil construction provider, we actually manufacture the whole building in-house. So what will be the manufacturing cost and our capability to manufacture it in-house is very critical. I cannot make any item designed to which I cannot produce. And I do not buy any ready-made section from the market, unless it is a small item like a pipe or angle or something. 99% of my building would be manufactured by me in-house piece by piece. So there is no premanufactured items. There is no prefabricated item lying with us, which we put together to make a building. Each building is unique. Each building is uniquely designed. And each piece of each building is unique. It is not only manufactured separately and for that particular building in a customized way, but also meant for a certain part of the building. So therefore, the manufacturing itself is a very complex part of our process of doing a pre-engineered building. And then the last leg is that we carry all these pieces ready -- all readymade in the plant, all the drilling of holes, painting, welding, cutting, final coat of paint, everything is done in the plant. And they are carried to site in the trailer in transportable pieces. And at the site, depending on where the pieces have to go, our project management team and our certified builders then erect it in a way that the building can be -- is meant to be erected so that each piece goes where it is meant. All these pieces have to go in an erectable sequence. I can't just supply any piece as I want. I have to start from one end of the building and especially in large projects, every piece, every nut, bolt and clip, smallest piece for each area has to go at the right time. Then only the building can be erected. So there is no small or large piece in our case. The whole building has to go in a package, which can be erected. So therefore, these are the 3 or 4 parts of a pre-engineered building, which separate us from any other steel building manufacturer or a fabricator or a civil construction. And then the key also is how to coordinate all this, how to make sure that the deadlines of the customer are met, materials have to be ordered after we get an order, materials have to -- the building has to be designed, engineered and approved by the customer's consultants. After the approval, then the whole building is detailed and converted into a manufacturable pieces, then each piece gets manufactured and then in a sequential manner, delivered to site. And all is done in a coordinated manner so that there is no shortage of raw material. There's no shortage of drawing. There's no shortage of production capacity, transportation and everything can be done at site. So not only do we make the whole building right from engineering to erection in the plant, but the coordination and the delivery process is a very complex process for a pre-engineered building. We are not manufacturing steel by ton or pieces which are lying around and we just deliver what we want, but in a very, very organized and a coordinated manner. So therefore, it makes us more like a capital goods company. We are more like a requirement of industrial or a non-industrial company who comes to us with a requirement and we design, engineer, manufacture and install so that, that product can perform. And overall, the customer gets one company to deal with, and he gets one price and one date with which he holds us liable for that product. So the whole building has become a product. It can be anything from a simple warehouse to a very complex warehouse for big companies like Amazon and Flipkart or an industrial plant. It can be a simple industrial plant, and it can be an extremely complex industrial plant for a semiconductor or for a lithium battery or -- and as a company, we are completely building agnostic. We can make any kind of building, high-rise to malls to airports, to stadiums, of course, all industrial kind of buildings and nonindustrial, even houses, villas and resorts. And we are completely industry agnostic. It doesn't matter to us what your industry is. While we are a capital goods company, but we have the additional advantage of being totally industry agnostic. So we can work with any industry. I don't think there's any industry in India that we have not worked with. I don't think there's any large, medium company in India that we have not worked with. So we are industry agnostic, we are building agnostic, and we are also geography agnostic. As Interarch as a company, we have made a setup that all over the country, we are able to install building, whether it's in Assam, Orissa, Bihar, Punjab, Kashmir, South everywhere. It doesn't matter to us where the location of your plant is. We are fully equipped with certified builders and our project management team to install your building there. And constantly, we are working on more and more business development, how do we develop different kind of buildings into steel, different kind of steel buildings into pre-engineered steel buildings, different kind of heavy structures. So constantly, we are working on that as a company to take us to the next level of work so that -- because as we have realized that all over the world, the buildings, more and more people who want to build fast, more and more countries which want to develop fast use steel. And steel -- the fastest way to build in steel is prefabricate -- pre-engineered steel, whether it's a complete building or just pre-engineered sections readymade at the plant, ready to be installed, reaching the site and assembling it. India's steel construction -- steel consumption is still very, very low compared to what's happening in the world. We are maybe 1/3 of world consumption and 1/10 of what China has done. Therefore, we are -- going forward, we feel that the government's push into manufacturing, into PLI schemes, into electronics, into data centers, into EVs and the renewables, all this push making India part of the supply chain, having more and more free trade packs. This will only push India to set up industry and building faster and faster. And I think the pre-engineered building industry will play a very, very critical role going forward. And as we see, there's a lot of action happening on the pre-engineered building industry segment as well. And we are very hopeful that the industry will grow. The whole category will grow. The -- more and more people will convert from steel building and concrete building into pre-engineered buildings. So a lot of buildings are still being made in steel, but not using pre-engineered or pre-engineered fabrication system. They are doing site fabrication, which is very slow, tedious and labor intensive. So we feel that going forward, this will be a very, very major category of business to deal with India's development and India's plan to become a developed country in the very near future. And the government, I think, is going all out to ensure very high level of manufacturing, which is still our primary market as such in India. Thank you very much. And I'll pass it on to Manish Garg, who will give you a little bit more brief about our new plants, new production, new capacities, et cetera, that we are doing. Thank you. Manish, on to you.

Yes, sir. Thank you very much. Good afternoon, everyone, and thank you for attending the call today. We are delighted to share that Interarch has delivered its highest ever quarterly revenue in this quarter, inching closer to our INR 500 crore mark. EBITDA and PAT grew by 65.1% and 56.2% year-on-year, respectively. Supported by a robust order book and a healthy project pipeline, we remain confident of sustaining this strong growth momentum through to the second half of this financial year. This quarter indeed has been a transformational one for Interarch as we continue to expand and strengthen our manufacturing footprint across India. The commissioning of Phase 2 of our Andhra Pradesh unit marks a significant milestone. This is now our fourth fully integrated pre-engineered steel building plant, and it takes our total installed capacity to 200,000 metric tons. This expansion further strengthens our leadership into the PEB Industry and our commitment in enabling India's next phase of industrial growth. The groundbreaking of our Gujarat facility in Kheda represents another major step forward in our growth journey, strategically located in the state known for its world-class infrastructure and thriving semiconductor, EV and allied industry clusters, where Interarch already has a very large market share and footprint will drive our next phase of capacity expansion and geographical diversification. In parallel, we did the groundbreaking of our brand-new unit in Andhra Pradesh, which is next to our existing fully integrated plant for our heavy steel structures and multistory buildings. This will firm our position in the high-rise steel building segment. And with these strategic expansions, we continue to invest in capacity, foster innovation and shape the future of India's PEB industry. As on the order book, as on 31st October '25, our order book stands at INR 1,634 crores, reflecting a strong pipeline for the coming quarters. We secured orders worth INR 463 crores between 1st of August and 31st of October. Key customer wins during this period included our repeat customers [indiscernible], Havells India and our new customers, Techno Electric and Jindal Stainless and many others. We take pride in the fact that 80%, 85% of these are repeat orders from our existing customers, demonstrating their continued trust and confidence in our capability. Looking ahead, we remain committed to broadening our footprint by increasing our presence in the new-age industries such as semiconductors, electric vehicles, renewables, data centers and diversifying geographically as well as well as manufacturing. Our strategic partnership with JSPL to jointly explore opportunities in the multistory and heavy-steel building segments, along with our collaboration with Moldtek Technologies to enhance export capabilities and global presence will further help Interarch scale new heights. Now I would like to give you some financial highlights for this quarter and this half for this financial year. Revenue for the quarter came at INR 491 crores, which is a growth of 52%. EBITDA stood at INR 42 crores in Q2 of FY '26 as against INR 25 crores. It is a year-on-year growth of 65%. EBITDA margins for the quarter as a percentage terms stood at 8.5%. And profit after tax for the quarter alone stood at INR 32 crores as against INR 21 crores in Q2 of the last year. Total order book, as I explained, is at INR 1,634 crores. Now coming to the financial performance for the first half, that is YTD September. Revenue for our first half stood at INR 872 crores, which is a growth of 39% over the last year half. EBITDA stood at INR 73 crores in H1 FY '26 compared to INR 52 crores in H1 FY '25 last year, which is again a growth of 40% year-on-year. EBITDA margins stood at 8.4% in percentage terms. Profit after tax stood at INR 61 crores in H1 FY '26 as against INR 41 crores in the H1 FY '25. With this, I would like to conclude the presentation and open the floor for questions and answers. Thank you very much.

[Operator Instructions] The first question is from the line of Mr. Jaiveer Shekhawat from AMBIT Capital.

Mr. Nanda and team, congratulations on a very strong quarter. Sir, first question is actually on the growth momentum itself. So I want to understand better what's driving this accelerated execution during the quarter? And is there any change in terms of the kind of orders that we are executing, which are possibly shorter execution cycle? Or are you able to execute much faster the orders that you already have, possibly more color on that?

I think the speed of execution has improved with the new facilities opening up, our older facilities also becoming a little bit more productive. So the speed is picking up. Like I have mentioned many times before that our order book should reflect 9 to 10 months of sales going forward because pre-engineered building is not a long-term business. Even a very large customer with the largest orders would want his building supply between 10 to 11 months. So average would be 8 to 10 months, we should have orders. So our order book sometimes has to reflect what is our ability. So the idea is that as we go forward, as we build up our capacity and we feel that we are able to execute faster, pick up more business. So I think last half of the year, the execution has been much faster than the previous years. Normally, our first half is not as fast as the second half. But I think this year, first half has been pretty good in the sense of achieving higher production. It is also to do with our sites and clearances that we get from customers and in spite of monsoons and other things which happened. But I think our execution has been faster. And as we go on into the coming quarters, I think the execution will pick up at the speed that it is going and new facilities will get added. So I think the outlook is very good. There is a lot of business in the market. Of course, there's a lot of competition as well. A lot of new companies are coming in, a lot of old companies are expanding. But we feel that we need to build up our capacity. And again, I'm repeating capacity is not only the plant. For us, capacity also means engineering capacity, sales capacities, project execution capacities, the ability to coordinate and make everything work and make sure that your financial flow of payments from customers and -- that is coming through. So we look at the business in totality. We don't only look at that just add capacity to the plant, which is critical. It is important that we have capacity in the plant, but all other capacities and managing that business is very important for us. So while we are adding factory capacities faster, -- but we are always concentrating as to how to improve the work of the company from engineering to project management, at sales, how to get better customers, better financial situation, payments and financial flow should be good. So we look at an overall picture. We are not the kind of company which just jumps into the deep end and says, okay, now let's do something. We think, we plan, and we also feel that we should not go beyond our capacity. Yes, we have to challenge ourselves, and we have to grow. But within the limits that we can grow easily because like even Manish mentioned, most of our orders, 80% plus customers have worked with us in the past. And they only come back because they feel that we can perform, we can deliver and we can meet our commitments. So in pre-engineered building, the commitment is a very wide word. It is not just delivering steel, but right from sales to engineering to design, to procurement, to production, to delivering to site and executing it at the site of the client. So overall, I think things are getting better, and we, as a company, are getting better and growth looks good in the coming quarters.

So sir, given that this quarter, you didn't have the entire benefit of the new capacity, which anyway got commissioned at the end of September, but you have still been able to touch almost closer to INR 500 crores. And plus you've also added a lot of people across teams as you were highlighting. So does that mean with your existing capacity, you still have a potential to touch about INR 2,000 crores of revenues and then additional, let's say, INR 500 crores of revenue from the increased 40,000 tons?

Yes. See, now we feel that with this new plants all in place, at least next year, we should have full capacity to do INR 2,000 crores plus, and that is our goal. See, our goal this year was -- our targets given were 17.5% increase over the last year, which was coming to about INR 1,710 crores or INR 1,720 crores annual. I think we should cross that this year with a better performance in the first year -- first half. Next year, I think definitely, we are planning another 20% increase as we have predicted. So it should cross INR 2,000 crores. And for that capacity, we are ready. So we have now capacity in place to achieve INR 2,000 crores plus in '26, '27.

Sure. And sir, last call, you also highlighted you also have an additional inquiry pipeline on top of the order backlog that you already have. So given that these new capacities have come in, do you expect the current order intake, which is roughly moving around this INR 450 crore mark, barring the fourth quarter wherein you had a large order, I mean, will that substantially step up over the next few quarters? And are there any large projects that you have in the pipeline that you expect to execute?

Yes, there are a lot of -- always a lot of projects in the pipeline. There's a lot of growth happening in the country. And like I mentioned, that more and more people want to go in for steel and for pre-engineered steel for faster execution of their projects and the size of the projects is also growing much larger. So there are certainly a lot of them in the pipeline. We have to also be careful that we pick up those which we can execute. We have the capacity, some require very, very fast execution, which we may not be able to do because we are fully booked up next few months. So we have to be careful. It's a business which we have to take into many factors when we pick up an order, not just that the order is available, therefore, we pick it up. Price is also there, payment terms, quality, scheduling of the customers because we don't want to let a customer down. We would rather lose an order today and keep the customer for future than to just take an order and then not be able to execute. But yes, the pipeline is good. There's a lot of large inquiries also in the market, large requirements are there. And we are certainly going to participate and take orders as per our production capacities and our ability to execute. So I think order book should pick up. We should be able to take more and more orders because we have more and more capacity now.

Sure. Sir, last question. On the inventory side, we have seen almost about INR 85 crores of increase in the first half. And also, if you could call out the volume growth that has happened and how have your overall realizations per ton or your profitability per ton has been trending? I think this will be my last question.

I think the stocks have gone up a little bit. There has been a little bit of unreliability from the customer side and some of the orders that we obtained required certain special thicknesses and sizes of steel. When that happens, then we have to sort of stock special items just for that particular order. And if that order goes a little slow, then we are stuck with the inventory. But I think the inventory will start coming down. We need to get it back into control. It has gone up. I think during monsoons and sometimes this period, the reliability of the suppliers is also a little low. So therefore, to protect ourselves because our effort is to deliver the full building to the customer and the full building might need many different sizes all at the same time, which sometimes the suppliers cannot give. So we tend to overstock when we feel the supply is unreliable. But I think now it is going to start moving downwards again. So stock will be well under control. And I think the margins, I would say, have not improved on a per ton basis because for us, also, we are investing a lot of money. And when we invest into plants, we have to also invest into people. Also, we are investing into exports. We are trying to develop exports in a bigger way in the coming years. So a lot of investment is also happening. So I think per ton, our -- I think our recovery is not improving that fantastically well, but it will go up. I think we are -- as the operational leverage improves, as the production improves and the present overhead sort of get divided over larger sales. But right now, I think what we have got, we are on a good track. I think the margins can be better, but I think we are quite satisfied with them in a high growth, high investment kind of a situation.

The next question is from the line of Nakshatra Rathi from Niveshaay.

Congratulations on a good set of numbers. I had a question regarding the market share. Our competitors are guiding that they are going to eat our lunch. What is your commentary to that?

They are going to?

They are going to eat our lunch by FY '28. So effectively, both of the companies that have recently listed, they both are guiding that they will be achieving 5% to 10% of market share by the end of FY '28.

I think in the organized sector, we have a pretty high market share, and we are increasing. From a lower level, maybe it is easier. The market is also growing fast. The market size is not remaining the same, market size is growing faster. And yes, I think -- I always feel that in an industry, the more the good players are there, the more the market expands. The idea is that everybody pools in and everybody increases the size of the pie. In pre-engineered structures and pre-engineered steel buildings, the size of the pie and what we call TAM also is very, very high and very large. There is no figure we can put to it. So I think there will be a lot of growth. The more companies come in, everybody goes into their niche, everybody promotes the product with their own customers, new customers and business developments. So I think it's a good thing to have. And we are trying to grow as fast as we can, but we have our own way of growing and our own factors to consider. So I don't want to name any figure as to how much percentage of the market will I have. But I certainly feel that as a company, we will try to grow as fast as we can, as safely as we can, which we have done for the last 20, 25 years. So I don't want to really name any figures and start competing with others on figures. Like I always say that Interarch only competes with Interarch. We have to make ourselves better and better. I joke that we are the Mercedes of the company, but Mercedes mainly competes with itself, how to make itself better. So I don't say that we are Mercedes because we have the largest numbers or we have the largest market share, but because we feel that we concentrate on improving ourselves and giving great value to the customer. That is what Interarch is.

Right, sir. My second line of question is regarding the complexity of the buildings that we do. Can you elaborate on how are these different from a competitor's? And are you looking for a new entrant to get those kind of large-sized orders?

See, new entrant is very difficult. It takes time for anybody to develop because it's a step-by-step process. You have to do a step-by-step process in engineering and convincing the customer that you can do the right engineering and the production and the delivery. So it's a step-by-step process. It's not something that I can start today with INR 1,000 crores and jump into it. Everybody takes time. Even the so-called new entrants in the listed space are not really new entrants in the pre-engineered building space. And of course, once you've done more and more complex projects, then people will give you on that -- based on that history, more and more complex projects. But most of the companies try to stick to simpler buildings. They are easier to handle. The size is easier to handle. The number of customers are more. They are more based on price competition rather than quality or delivery or anything like that. So in complex buildings, there's always competition between only 5 or 6 companies. That's what we have seen. Because the ability to design, engineer, convince the customer that you are the right company to be able to produce it in time, deliver it in time and execute it in time is quite a complex process by itself. And the more complex the building, naturally, every part of the work, engineering, production, execution, everything becomes more complex. So new entrant is difficult, but new entrants normally start with simpler building. And if they have the ambition, they can keep moving up the value chain. Nothing is to stop that. It all depends on how they want to do and what they want to achieve. But totally new entrant to come in and start bidding for a semiconductor plant or for a lithium battery plant is not possible. Nobody will try trust you, so it's a very much confidence building exercise.

Yes. My last question is regarding what is the update on new partnerships that we have had? What is the order book from that area if it has started already?

The new partnership like JSPL and Moldtek?

Yes.

JSPL, we are doing a lot of joint marketing. They have a lot of experience in high-rise, we are trying to build. So that's also a little bit of a longer-term process. We want to get in. We are setting up our own because they also have limited capacity. So that's why we are setting up a new heavy structure plant in Andhra for ourselves to augment that capacity because high-rise do need heavier structures. So our marketing excise, we recently had a presentation together in Ahmedabad just last month. It went out well. There was a big discussion on how to use steel in more and more buildings, especially high-rise. There was a very good thing, which we call Interarch Dialogues. We had called 6, 7 leading architects and builders and contractors as to how they can use more steel in this. Jindals were also a part of that. Moldtek, we are concentrating more on the export side. So -- and as we speak, we are jointly participating...

Any orders there, sir?

No, we are not -- well, we have been doing a little bit of small this thing, but it's still on a beginning stage. In fact, as we speak, we are participating in exhibition and -- builder exhibition in the U.S. jointly, it is going on right now. We -- our people had participated in another conference in July in Canada also. So we are -- this business there, you have to go and meet a lot of people, start getting inquiries. We are getting a lot of inquiries. We had a good Canadian company which wants to work with us. They came to India to meet us last month, 1.5 months ago. They are sending us inquiries. So we are well on our track, but it's not something which happens overnight. It's not a product which can be sold overnight, but we are well on our track with a lot of people, a lot of inquiries coming in. And I think maybe it will take about 8 to 12 months to show some serious results. But we are very, very, very confident on the export market going forward. I think we have got the right partnerships, the right people, and we are participating to meet the right people in America and Canada. And I think that should give us a good business.

The next question is from the line of Aasim from DAM Capital.

So just one question was on this heavy structures unit. So you did talk about that it is probably for high-rise buildings. But I just wanted to know, are there other use cases like maybe large industrial units, which do not necessarily be enclosed by shared completely, maybe like a petrochemical unit or a power plant. Is that something that also opens up for you by setting up this heavy structures unit and the tie-up with JSPL?

Okay. I'll let Manish answer that. Manish?

Yes, sir. I'll answer that. So the answer to your question, sir, is yes. It is basically suited for heavy fabrication, wherein the per piece weight could be as large as 15 to 20 tons. So yes, it does open up other than multistory also the heavy structure market for us, be it the power sector or the oil and gas sector or any other sector like railway bridge girders and everything, wherein heavy steel structures are required. So yes, it does open up a lot of other avenues for us for heavy steel fabrication, sir.

Okay, but would the market also open up for you on that regard? Or would you still need to take some time to build some credibility in this particular space?

So I think, sir, the market is already existing. It is not serviced by us currently, particularly the oil and gas and the heavy structure. We haven't yet participated. In fact, we had a lot of -- we generally get a lot of inquiries, but we wanted to build up this specialized plant. So I don't think it will take us any time to actually enter that market. That market already is there, and we have established credibility, sir.

Okay. Okay. Fine. That answers my first question. The second question was basically on, could you just spell out the volume you've done in metric tons in quarter 2?

Yes. So the quarter 2 volumes are 41,215 tons, so approximately 41,000 tons.

Okay. So I think this would be almost peak utilization at your current expanded capacity, right? You will most likely be at...

Yes. So I would say for all the plants, which were operating before the quarter, yes, more or less. But I would say the 82,000, which kicked in only in the last quarter is still to deliver the optimized capacity.

Okay. Okay. So I just took your utilizable capacity, the 167,000 number, divided that by 4, so that...

So now -- yes, yes, yes, you are right. You are right to that extent. So yes, there can be -- utilizable number can go up a little bit with our ramping up of the AP unit too.

Okay. And what number would that be? Like so that 1,67,000 would be how much around -- not very far from this number, right, [indiscernible].

Yes, yes, it really won't be very far from this number. So as we always say that in our kind of industry, depending on the order mix and everything, our utilizable can be anywhere between 80% to 85% to 90%. So let's say, 80% to 90%. So there's always this 5% kind of improvement that can always happen.

And I think we can also add that we have these satellite plants, which work completely with us. So we do use them whenever we need to increase just the production of the structure. So that is always there like our captive plants is run by our people, our play. We give them the material. And so that is always our thing. So that's why you might see sometimes higher than our own capacity because we are also getting this work done from outside from our own captive plant.

Okay. Okay. So I think this happened in Q4 of FY '25. So actually, then my -- just one question would be that how much of the capacity does come from the satellite plants? And another follow-up is basically then I think you're very close to -- you just set up your AP unit, but I think you will have to start planning for your next unit very soon, right? Because, I mean, how much satellite units can help you. So are there other regions that you are planning to like explore to set up a new plant? Or would you be looking at your existing markets only just set up more capacities in existing areas?

No, we have started the new plant in Gujarat for pre-engineered building, which should be up in about 10 months from today. That has already started. We have done the groundbreaking last week -- last month. So that is the next PEB plant we are adding. The Andhra new plant is heavy structure. Gujarat new plant is pre-engineered building.

Okay, okay, my bad. Gujarat, you had just slipped my mind.

Yes, that we are doing, yes.

Congratulation on a very good Q2.

The next question is from the line of Rahul Kumar from Vaikarya.

I just wanted to know what are the volume growth target for this year and next year?

See, we had given a target of 17.5% growth in revenue for '26, '27 -- '25, '26 and then 20% per year after that for next 2 years. That is the guidance we had given earlier. But I think the better performance that we've had in the first half, I have a feeling that we should cross the 17.5%, which we had given for this year to maybe closer to 20% . For the next 2 years, we maintain the same.

Okay, okay. No, because I think 1H we already done 40% kind of a number, right? So 20% still seems a bit -- actually for the full year, it seems a bit low.

Yes. But we have done the first -- this year, that formula of 40%, 60% and 45%, 55% wouldn't apply because we have actually done much better in the first half. So the same formula will not apply. But let's say, we are trying our level best to execute more and more orders to get more clearances. And see, I think by the third quarter, we'll have a clearer picture. But currently, this is what we anticipate.

Okay. Okay. Okay. And this job work which you have mentioned in your P&L, does that relate to the outsourced work which you just mentioned?

Yes.

Okay. I understand. Third thing is the INR 300 crore order which we had got, has that been completed in last -- this quarter?

Manish, do you know -- how much percent is completed?

Yes, yes, yes. I have the figures. So this order is above INR 300 crores, so close to in the range of about INR 350 crores. Now out of that, approximately 62% has already been completed. The rest will get completed during this quarter.

Okay. So we have already booked INR 200 crores kind of a number from this project, right?

Yes, 62% is already invoiced.

[Operator Instructions] The next question is from the line of Ronald Siyoni from ICICI Securities.

Congratulations on very good set of numbers. My first question would be, if we even do not include the job work-related expense, then the gross profit margins are a little bit lower. So is it a one-off kind of [indiscernible] or what because I think the job work would only involve the third-party contracts, right, which you would be outsourcing? Is there a component in raw material...

Yes. Job work is the cost that we could pay outsourcing as well as sometimes in the factory also, if we hire contract labor in some of the plants we do. So job work is actually -- we can say the cost of the manufacturing cost. It is a part of the manufacturing cost either way.

Even if we exclude that, then still gross profit margin comes to around 39% compared to 41% last year and 40% in Q1. So what would be -- what explains that? Is there some kind of order mix execution change or something product-related change?

Yes. I think a lot of times, it's order mix. It's also what kind of order we are executing. It can also be effect of steel prices or the order pricing. So there can be a lot of different effects. So pre-engineered building rate can vary a little bit here and there. I think -- but it should be close to the figure that -- it's always around that figure. So sometimes it can go up too much -- too much down depending on the job, but I think around that figure is normally acceptable to us. And it can't be exactly the same every year.

Yes, sir. And sir, lastly, sir, on your margin, if you can give some guidance on your overall operating margins for the year you're expecting or mid- to long term, at least, should we be moving closer to 10% or this kind of 8% to 9% range will continue over the mid to long term?

We are working on a lot of things, whether internal economies, scrap, better purchasing, operational leverage is, of course, there, getting a better margin from the customer also. So we are working on various angles. But also, you must realize that as we try to grow faster, then, of course, we have to have an intake of orders also. And sometimes everything doesn't work to our liking, but we still have to do the orders to keep our facilities and production and all that going. But our aim is to reach double digits at least in EBITDA margins, we should reach double digits, maybe not this year, but we are certainly trying because we feel that is about the minimum that we should be aiming for. But whether we reach this year or not, I'm not too sure. I doubt it. But we are certainly trying to bring it to that level because we feel that, that is a minimum that a company like ours deserves, dealing with the top customers, doing complex buildings, having the capacity to do very large orders that we should be able to get. But I think it is a combination of both internal economies as well as trying to get better margins. Internal economies and more productivity and more -- working more efficiently, I would say, is more in our hands, and we should be able to achieve higher margins with that. We are certainly pushing. We are not happy with the margins that we make, that I can assure you.

The next question is from the line of Raman KV from [ Sequent ] Investments.

Sir, I have one question with respect to the new vertical, which you are planning to catering, the heavy steel structure. Sir, I just want to understand the business opportunity of this business? And what will be the margin with respect to the normal PEB versus the heavy steel structure and turnaround time with respect to this particular execution of this project?

Manish, do you want to take that question?

Yes, sir. Yes, sir. So sir, in this new line, it's basically -- I will say it's not really a new line means it is a new segment of the building that we will start servicing from this particular product line, which we just explained, which will include heavy structures for various usage cases and also the multi-story building. I would say, sir, that the margin profile in this would be pretty similar to the pre-engineered steel buildings to begin with. And as we establish ourselves as one of the major players, there is always a likelihood of doing a bit better on the margin. But generally speaking, it would still be in the range of about 9% to 10% as you just experienced in our pre-engineered steel building. So there is...

The turnaround time, like usually for us, the order book execution is around 6 to 8 months.

Correct.

Would it be the same or different?

Yes. So it would be the same, sir, because the whole premise of any customer using steel building in case of a concrete building or any other is the speed. So yes, the turnaround time will be similar to pre-engineered steel buildings.

I do want to add in this. I think the volume requirement in this -- because this is more of a, one can say, commodity structure. The responsibilities of a company like ours becomes a little less. So many times, the design is given by the customer. We do the detailing, we do the manufacturing and we deliver to the customer. Many times, we don't even do erection. Because the requirement sometimes like a steel plant or a fertilizer plant can also be there. Some are building like high-rise and data centers where you will be required to do everything. Invariably design is not a part of our sort of scope. The volumes are much higher and the likelihood of the volumes in the future going up are much higher because the requirements are, say, one steel plant can need 100,000 tons. It's like that kind of requirement. A power station can do 60,000, 70,000 tones. So -- and that -- more and more people want to shift offline -- offsite. So the requirements can be more, volume will be more, and it's not so much of a niche business as pre-engineered building is. Pre-engineered building is a highly niche business. So we feel that it will also give us a little bit of a different vertical, which if we're growing and the speed with which India is growing, if the requirement grow, that can be multiplied much faster. So to multiply pre-engineered buildings, we have to multiply everything, engineering, sales, factory and execution and then coordinate all that and then take the responsibility for the building. Whereas in this, it's more like a commodity. Of course, every item is different. I mean we still have to manufacture everything according to the requirement of the customer, but a little bit more commoditized. So I think the volumes for the future, it's a line I think we want to get in. Part of it will be used for our own pre-engineered buildings, if we are doing a data center or a high-rise. But I feel that going forward, it can also be a very, very big line for commodity steel structure, what we can call pre-engineered structure so that they go ready-made from the plant and they can be just assembled at site with a nut and bolt kind of assembly. That could be a huge line opening up. And people are doing it. JSPL has got a lot of capacity. Some other companies are also doing it. So we are looking at it from both angles.

So this the new -- just a follow-up, this manufacturing line which you are setting up for the heavy steel in of 25,000 metric tons per annum, it's fungible, right? It can be used also for our [indiscernible].

Yes, yes, of course, of course.

And sir, second is...

We interrupt you to come back in the queue because there are other participants who wish to ask their questions. The next question is from the line of Vandit Shah from Abakus Asset Management.

Congratulations on great set of numbers. Sir, just one question. I was doing a back of the envelope calculation. We have done 40% revenue growth in first half. We have given a 20% guidance. When I do the calculation, we see only 6% growth in the second half, 6% to 8% growth. So are we underguiding or are we seeing any capacity constraint for that?

No, we are not underguiding. Sometimes the quarter can -- we are very hopeful that we will cross the figures that we have given. Like I mentioned, that maybe we'll definitely cross it. And we are trying to cross it, but also under guidance is also a good idea. Why not?

Yes, because it was -- so by doing just the calculation, the run rate for the second half, if we do 20% growth is 872. And last second half of FY '25 only we did INR 827 crores plus we have added 40,000 tons of capacity for the second half -- additional capacity for the second half.

Yes. Well, we are quite confident. But again, in our business a lot depends on how customers give us -- there's a lot of things which happen. So it's not just a factory capacity, which makes it happen. We built the factory capacity now faster than before so that we are -- we feel that that should not be a constraint going forward. But I think a lot will depend on our performance in the next quarter. I think up to December quarter of what we achieve, then I think we should be able to change the guidance...

Got it, sir. And secondly, sir, when we speak about reaching double-digit EBITDA margins, so can you share the levers where we can see the improvement and we can reach that double-digit margins?

See, EBITDA margin should go up with higher turnover, same overhead cost because all the overhead costs in pre-engineered building don't go up at the same point as sales. The ability to get larger orders, a larger order will always give us a better return even if we are not sort of putting it in the job cards or job costing, but it will give us more margin because it's a larger order. So I think larger orders, more capacity, ability to take more orders with the same overhead. But when the growth is very fast, what happens is that you also have to build in for the next level of future growth. I mentioned this earlier also that as Interarch, we are very concerned about a long-term plan for Interarch also. I know everybody is very worried about every quarter and every year and the growth and the EBITDA. But this business is such that if we do not plan, let's say, all our investment into people is like an R&D for us. If I don't invest into people, I don't invest into technology, we are doing the new SAP HANA, we have developed a lot of new software and hardware plug-in for our engineering. We are seriously looking at how we can adopt AI for our engineering and project management. So for us, the growth of Interarch in the long term is also as critical. Maybe I can show short-term higher margins by not spending money today, but I think it will hurt our long-term growth. But we are keeping both in view. We have to increase. I think the increase in EBITDA margins and all can come more from our internal economy. We have a lot of scope, I think, for improvement internally and in working and by adding capacity. So we are doing all, but we cannot forget that the future growth of Interarch, we have come 25 years of pre-engineered buildings. It didn't happen. For the first so many years, all the money that was made in Interarch was plowed back into Interarch, even including when we got private equity many years ago, everything was plowed back with the idea that, that is what will make Interarch a better and a greater company. But yes, now I think the margins are also good. So we are working on both the fronts. We are very, very aware that short-term and annual growth and quarterly growth is also critical now that we are listed. But we cannot lose sight of the longer-term goal for us. Like if we are investing into exports today, maybe we'll have to spend a lot of money in 2 years, but the business might start coming 2, 3 years later. But if I don't, then I'll never get exports. Same with heavy structure. I already have a heavy structure team selling, engineering, but we are not taking orders because we don't have. But if I don't do it today, then when my plant comes up, then it will cost me a lot more to not have orders. So a lot of things go like this. So I have to -- or as a senior management of the company, we have to keep all angles in mind. That is very critical for us. And one focus is definitely that we should make better margins, no doubt. And I think we have shown good performance. I think investors should be happy with our performance in the last 1 year. We've got a lot of new pre-engineered building come in into the listed space. I think they are also doing well. So I think we have created a space. And while I don't want to be boasting, but I think a lot has to do with how we have put the industry across and how the industry has to perform and set these standards. So that is also very critical. So we are looking at short term, medium term, long term, all 3 all the time, we have to.

Sure. Sure, sir. And sir, just one last question. So the asset terms about the new -- for the new plants, if you can give for the Gujarat PEB, would it be same and for heavy steel structure? And last, what would be the CapEx guidance for FY '26?

See PEB structure is the same, so about maybe 6, 6.5x. But the heavy structures -- heavy structure by nature is only a structure, whereas a building, the structure is one part of a building. So structure is normally 65% to 70% of the building, 30% are other items. So when we talk about pre-engineered buildings, naturally, the other 30%, 35% also add to the turnover. But in structures, we are not going to add anything else. Maybe it gets added, maybe not. So there the asset turnover will be less -- will be higher. So it could be maybe a turnover of about INR 250 crores to INR 300 crores for the same investment of INR 70 crores to INR 80 crores, primarily because there is no other building part going with the structure as we are assuming right now. Maybe if we sell it with our building, then that will also have a INR 400 crores to INR 500 crores turnover. But if we treat it as a separate vertical, then may not. So heavy structure, we are leaving it out of our revenue sort of figures and our turnover figures going forward, primarily because we feel that it's a little bit of an experiment going forward.

Got it. And the CapEx guidance for...

Sorry?

CapEx guidance for FY '26, we commissioned INR 41 crores to INR 45 crores in first half. What would it be for the whole year?

Yes, about -- see both these plants will cost us about INR 150 crores in the next 12 months. So I would say another INR 60 crores, INR 70 crores in this year and INR 60 crores, INR 70 crores in the next financial year.

Due to time constraints, that was the last question. I would now like to hand the conference over to the management for closing comments.

Well, thank you very much, everybody, for joining, and thank you for your support. I think you all will be very patient listeners through many of these investor calls and you have helped us build our narrative where we have been able to put across what the pre-engineered building industry is. I think till 1 year, 1.5 years ago, not many people knew what pre-engineered building is. So I would like to thank all of you for putting it across. And any of you want to get more information, you -- we'll be happy to answer questions one-to-one through any of the -- you can contact AMBIT, you can contact SGA and same for site visits or factory visits. If any of you are interested, we would be most happy to be a part of -- as an educational part also. So please contact us or all our partners going forward. Thank you very much again for participating.

Thank you. On behalf of AMBIT Capital Private Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.