IZMO Limited ($532341)

Ladies and gentlemen, good day, and welcome to the Q4 FY '26 Earnings Conference Call of IZMO Limited. [Operator Instructions]. Please note that this conference is being recorded. 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 the case of future performance and involve risks and uncertainties that are difficult to predict. I now hand the conference over to Mr. Sanjay Soni, Managing Director. Thank you, and over to you, sir.

Thank you. Good afternoon, everyone. On behalf of the entire IZMO team, I extend a warm welcome to our earnings conference call for the fourth quarter and full financial year ending 31st March 2026. We are delighted to have you with us today. I would also like to acknowledge our Investor Relations partners, [indiscernible]. I trust you have had the opportunity to review the financial results and the investor presentation made available on the stock exchanges and our website. FY '26 has been a year of landmark achievements for IZMO, a year in which we meaningfully expanded our global footprint in automotive technology, deepened our AI capabilities and made India proud in the global semiconductor arena. I'm pleased to report that we have closed FY '26 on an exceptionally strong note, with Q4 marking the highest quarterly revenue in the company's history. Today, I will walk you through our business performance, key strategic milestones and the path we have charted for FY '27 and beyond. Business and development. IZMO operates across 4 core business verticals. IZMO stock, IZMO [indiscernible], and IZMO micro. Together, these divisions serve automotive OEMs, global dealer networks and high technology sectors, including AI infrastructure, defense and space electronics across 22 countries. Our studio division continues to be our most established business delivering steady resilient revenue streams globally. IZMO stock, the world's largest automotive imagery platform, so it's completely redesigned portal gained strong traction following its launch last year, enhancing user experience for renting fleets insurance networks, leasing companies and dealer groups worldwide. The revamped platform has opened new customer segments and reinforced our market leadership in studio quality automotive imaging. IZMO [indiscernible] deepened its OEM relationships in Europe, most notably with the completion of the [ Stellantis ] rollout across the entire European aftersales network. A significant long-term engagement that [indiscernible] underscores the trust OEM partners place in our multilingual digital marketing platform. In the U.S., we sustained strong organic client additions throughout the year. [indiscernible], our acquisition in the U.K. continued to contribute new OEM and dealer clients, particularly in Germany and across Central Europe, further diversifying our geographic revenue base. [ Drug data ] had an outstanding year. Our suite of decision intelligence tools, including FAP, warranty boost a fixed ops model and fixed of [indiscernible] to continue to grow rapidly as dealerships invest more in improving the fixed operations and service business. We maintained a class leading gross revenue retention rate of over 93%. A clear testament to the real operational value are to deliver. We launched our AI factory last year and have completed full AI-based software development within the company, leading to cost efficiencies and faster development times. The company now operates its own LLM infrastructure, designed exclusively for its own products, giving us the ability to build AI into the core of all our software products. With our AI first strategy, we will ensure that the company is in the forefront of the AI software revolution. Business forecast for our Solutions division is robust, and we are getting more OEM imbursement. The addition of a partnership with [ Ford], strong data is now able to offer solutions through 4 directs the shop, professional e-commerce marketplace connecting Ford Motor Company, but it's [indiscernible] Lincoln retailer network. This is in addition to 4 partnerships in over 20 countries worldwide, where we are the preferred vendor for more than 2,200 dealers. [indiscernible] has been the standout story of FY '26. And I want to spend a few moments on the remarkable progress this division has made in a very short time. When we launched IZMO Micro, we set out to build a world-class semiconductor packaging facility from India for India and for the world. What we have achieved this year exceeds our initial expectations. In August 2025 is IZMO micro achieved the breakthrough in silicon photonic packaging, developing a 32-channel high-density platform with industry-leading insertion loss below 2 decimal and performance up to 70 gigahertz. This placed India firmly on the global silicon photonics map and established IZMO Micro is one of a few select companies globally with this capability. What this means for the company is that we have achieved the capability to design and manufacture the core components of optical transceivers, which are critical for AI data centers. There are several hyperscaler data centers announced for India with an investment of over INR 30 crores. This creates a huge demand for optical interconnects as the amount of data required for AI is too huge to contemplate. For example, the basic optical transceiver of 800G capacity is able to transmit about 200 Hindi movies in 1 second. This unprecedented demand from AI data infrastructure spend is creating demand for silicon photonics worldwide, and we are ramping up capacity to meet this. We have an order book position of INR 60 crores with an opportunity visibility of over INR 100 crores in the next 12 to 18 months. In addition, [indiscernible] industry has seen an overall boost the making India initiative of the government has allocated INR 19 crores to support the industry an [indiscernible]. The continued support will create a vibrant manufacturing ecosystem that will rival any other in the world. India is poised to take its place on the world stage of semiconductor especially for silicon photonics. IZMO Micro has also made a strategic entry into India's defense electronics sector, targeting high complexity patient vertical packaging applications where domestic capability has historically been limited. India's defense budget had a record INR 7.8 lakh crores, and the government indigenization mandate gaining momentum. This is a large and subsidiary growing market. By April 2026 decide evolved into ongoing defense supply contracts, demonstrating our transition from design capability to repeat revenue streams. In April 2026 IZMO Microsystem was named the photonic IC packaging partner. So the map supported silicon photonics initiative at [indiscernible], action-level program advancing India's silicon photonics and semiconductor capabilities. This basis is more in a strategically important role within India's emerging semiconductor ecosystem. This requisition, coupled with our existing DSIR approved R&D status, unlocks access to significant government support grants and manufacturing incentives. We have also expressed a new subsidiary in Germany, which is the base for IZMO Micro's expansion into the European market. IZMO Micro is now a member of silicon [indiscernible], Germany's leading semiconductor and microelectronics cluster. The assertation connects major chip companies technology suppliers, research institutions and ecosystem partners across Europe. [indiscernible] IZMO Micro's stronger credibility and access to the European semiconductor value chain. And we're already seeing results with partnership with breeding companies there. Put it in perspective, so Micro has gone from being in an investment phase to growth sustainable revenues and reliable projected growth. More importantly, the company has mature processes in advanced silicon photonics packaging and has made major inroads into defense. We remain measured in our expectations while being generally excited about the medium and long-term opportunity. Summarizing. Over the course of FY '26, the company achieved several pivotal milestones across technology development, strategic expansion and capital planning. The year began with significant technical breakthroughs translating into a healthy order book position. The company has been recognized for its advanced semicon photonics technology, which will transfer into new products in the coming year. Innovation and market expansion continues into the new year, and we are confident of meeting our growth objectives financial performance. Now coming to our financial performance. Q4 FY '26 at the milestone for the company. We reported a consolidated revenue of INR 109.16 crores, an 82.5% year-on-year increase and 84.7% quarter-on-quarter increase. The highest quarterly revenue in is most [indiscernible]. Net profit for the quarter came in at INR 17.3 crores, definitely a substantial year-on-year improvement. Strong Q4 performance was driven by a combination of significant contributions from IZMO Micro's order book, continued expansion of our automotive software client base and [indiscernible] deepening penetration in the U.S. market. For the full year FY '26, we reported consolidated revenues of INR 284.88 crores reflecting a 26.8% growth year-on-year from INR 224.6 crores in FY '25. This was a meaningful acceleration from the prior year, driven by client additions across all 3 divisions: [indiscernible] of synergies and the increasing contribution of IZMO Micro. Consolidated net profit for FY '26 was INR 47.56 crores broadly in line with the prior years. We are increasingly automating several software development processes using AI tools, which has helped improve cost efficiencies. While the full year profit reflects the investment phase nature of IZMO Micro, and some operating cost step-ups as we scale globally, we are satisfied with the quality of our earnings growth given the scale of the strategic bets we have made. Outlook. We enter FY '27 with strong momentum and a clearly differentiated multivertical strategy. Automotive Solutions business is stable and growing steadily with [indiscernible] on partnerships in all our major markets. The company is heavily focused on its semiconductor business and is making rapid strides in technology and market growth. IZMO Micro's order pipeline from defense, space, telecom, and AI hyperscaler customers is healthy, and we foresee no slowdown in demand. The continued support from the government's -- for the [indiscernible] industry means the future is bright for companies with the right technology as they can scale. Across the company, our AI-driven cost optimization programs continue to benefit margins, ensuring we remain focused on delivering both growth and profitability improvement in FY '27. That concludes our remarks. We can now open the floor for questions.

[Operator Instructions]. Your first question comes from the line of [ Raman Keith ] [indiscernible].

Am I audible?

Sir, your voice is not clearly audible.

Can you hear me now?

So it is still not better.

Hello?

This is much better.

Sir, my first question is on the margins front quarter on -- year-on-year, our margins have declined significantly due to act other expense. Can you just help us understand going forward, this is the normalized margin? Or can we expect it to go back to the moat to our older margins? And what relate to the margin decline during this quarter?

The margins will increase because we are expensing a lot of cost today IZMO micro during the growth phase. So we will increase our margins going forward, because as the revenue keeps going up, our cost structure will remain constant. It's not a linear function. And in this quarter, basically, I think we focused a lot on the revenue side and bottom the business, we didn't really care about the margin because the overall thing was to build up the business and to do the campaign for the clients and build up the top line. So it was a conscious decision we took. And even though the margin was slightly less, it didn't matter. But in the long run, definitely, our focus is on the margin, which we see going forward, going back to its original scale IZMO Micro scale up.

Understood, sir. And sir, secondly, on the [indiscernible] photonics, I just want to understand the product which we created for the packages, you can't put an exact demand. And what is the addressable size of this particular segment, like in India versus globally? And if also, can you just give us some sense of unit metrics like what will [indiscernible] demand coming from a 1 gigawatt data center or something like that?

So if you look at the total TAM, that's around $30 billion, that's globally to start with, and it's expected to go up to $80 billion in the next couple of years. We are now addressing Indian customers, we are addressing American customers, we are addressing European customers. The time is pretty significant. We have just started out on this path. And given the breakthrough that we have achieved, the companies which we are talking to are like $1 billion companies, they have shown a lot of interest in our capabilities and in tying up together for not only package design, but also packaging of silicon photonics. So I think given the market size and given the TAM, there's a lot of room for us to grow, comfortably over the next 5 to 7 years without any -- it's more to do with our limitation of size and limitation of scale rather than the market. It's for us to go and grab as much as we can. But being very highly complex, it's not so easy to scale up either. So it's a balance. But looking at the market size, market is very, very large and growing. Because if you look -- if you read the paper every day, you find everyday coming out with new chips, which are faster and faster. The data throughput is not happening at the same pace. So the chips are actually idle 80% of the time. Now the focus is moving towards how to get [ copper ] in the limitation. You can't put more data on copper. Everything is moving to photonics. So that's where the whole growth story is that to match the computing speed, you will need to move the data faster. And Photonics is the only way to achieve that. So that's why we have entered very early there. We are very lucky to have the tie-up with IT results and that give us a launch pad to get into this and then build up our category.

Sorry, [indiscernible], sir, your audio is getting very bad right now again. And -- no, sir, it's still bad.

I'll just join back.

No, it's okay. Now it's okay.

Okay. Can you hear me now?

Yes. Yes.

Just a follow-up on the earlier question. I just wanted to understand what is in medical packaging -- photonic packaging that we are doing. Can you just explain [indiscernible]?

It's better. It's not easy to stay on this kind of a call, frankly, because it's a very complex listing. So you'll have to read up about it online or we can send you some data if you want and what is really entails.

Next question comes from the line of [ Gaurav Shukla ] with -- investor.

Congrats on the very good number, sir. Sir, my question regarding IZMO micro. How much revenue we are expecting from micro in FY '27?

We are expecting around INR 50 crores this year in FY '27 from IZMO Micro, specifically. I would say between 45% to 50%. That's -- we did around, I think, INR 18 crores to INR 19 crores last year. We should grow significantly this year. The order book is very healthy. Pipeline is also building up. So we don't foresee any issue in reaching that number.

Can you quantify the order book of IZMO Micro?

I said it in the call in the additional [indiscernible] we have around INR 40 crores formal micro and the pipeline is around INR 100 crores. That means not yet closed, but at various stages of discussion with the customers. So with the way strong pipeline, especially with a few key clients who are -- we started with one project in second and third. And now they are like, can you use -- so please take up more and more work. So as they get more and more confidence, they are moving work back from where they were getting it done abroad and moving it back to India. So it's a very good I would say, validation of our capabilities. And these are complex projects, defense and RASM with very, very high precision and high complexity.

Yes, sir. Blended data margin in FY '27 -- as you have maintained 19.6%, including EBITDA other income, what will be in FY '27 any point [indiscernible]?

I think we should achieve between 20% to 25% going forward. Like I said, once the IZMO Micro revenue kicks in and the costs are flattish, you'll start seeing the margin accretion happening at the EBITDA as well as net profit level.

Yes, and there are one question other than this and what -- this is unique business, I understand, but what is completion level in market is any peer of views that are there in market? I want to --

No, we don't have completion. Yes, as of now. Globally, yes, the Korean companies are the American companies are there, Taiwanese there. But in the photonic space, it's basically U.S., Spain and India, which is going ahead -- in advanced packaging, of course, there are many companies internationally. But in India, what we do, like track [indiscernible] up.

Your next question comes from the line of Prasenjit Paul with [indiscernible].

Congratulations for the good set of number. My first question is we can see the jump in other expense around INR 69 crores. So can we expect the INR 69 crores to continue over the next upcoming quarter? Or it will come down or even move up?

No, it will come down because we have done a special project for a group of clients as far as the revenue also shot up and [indiscernible] a lot of it was passed through revenue. So we made a margin on that, but a lot of us are expenses given to -- for marketing and all that. So you'll see it coming down next quarter.

Okay. And sir, it's more [indiscernible] division and also in more studio division, we can see a big jump in the revenue in Q4 FY '26. So are those like subscription revenue that will continue? Or are those like onetime revenue, just a bump up in this --

Most of it is subscription, but there is always a listing of one time, we did some projects, but most of it is subscription, which project [indiscernible].

If you can tell about the IZMO [indiscernible] and IZMO studio, which one is mostly subscription revenue and which one is the one-off contributing this jump for this quarter.

IZMO Studio is mainly subscription. There IZMO [indiscernible], we do some projects sometimes for the big OEMs, which can be onetime -- so -- and that's normally done in the Q1 of the financial year -- their financial year, which is Q4 of our financial year.

Okay. Okay. And sir, finally, regarding this [indiscernible], obviously, that's a big market. But what I understood is globally, whatever the players they are doing?

So all are highly funded. I mean this segment requires huge investment. I have never seen in the world any small company like IZMO is a small company, no small company succeed. So considering the same and considering that even we don't have huge strong, I mean balance sheet cash or something. So how are we confident that you can scale up this segment without huge cash or without huge funding. See, the huge cash goes into a different segment. We are not in the segment. We are in the packaging segment of silicon photonics. We are not designing something new from the ground up. We are helping companies move from copper to light using our photonics packaging capabilities. So we're not going to compete with Marvel or compete with some of the big guys, we're going to complement their strength which is why I don't need $1 billion to invest. I need to invest INR 100 crores, INR 150 crores to expand my packaging capability and also the scale, which is what they are asking for the international customers that right now your scale is small, we've built it to a scale where we can give you a lot more work. So there's a difference in what we do and what the big guys. So that's where we are. We are in a very big area. And there is enough opportunity there to grow and be a partner to the big companies to meet those skill sets.

Okay. Got it. So you still need like 100 or INR 150 crores or INR 200 crores of investment the process of raising that -- yes, yes. So if I'm not wrong, sir, earlier, you disclosed the exchange that you are seeking for INR 300 crores of external funding. So like what is the progress and whether you will dilute equity or raise the debt or I mean how you are --

We are looking at equity income debt. It's still not frozen. We are talking to a lot of potential investors. I think in the next 30 to 45 days, we'll have a clear picture on which is the route we'll take and how much of equity, how much of debt will be clear, we'll announce it to the shareholders once we are clear about it.

Okay. Okay. And apart from the silicon photonics, earlier last year, so you are also planning some separate listing or maybe some foundries on the frog data AI part. So is it still on or like that you are not pursuing anymore?

This is on, but we'll do it at the right time once we achieve certain milestones there. So we will look at that at a somewhat later point in time.

The next question comes from the line of [ Krishna ] from [ Radha Krishna Investments ]. As there is no response from the line of current participant, we'll move on to next question. Our next question comes from [ Santosh Karunakaran ] with Financial Finance.

Excellent set of numbers, congratulations for that. You could see that the top line for Q4 increased significantly. So is it going to sustain?

We hope so. But there was, like I said, one of the projects we have done where we got substantial revenue. So it won't -- maybe it will not be at this level, but definitely close to this level going forward. Because the revenues from IZMO micro kicking in, we do expect to see achieving this number. Maybe not this quarter, maybe the next quarter.

So what could be a revenue and a margin rains for FY '27?

Still looking at the growth -- overall growth in this year compared to last year, despite the jump in the last quarter. So overall, we still expect the growth. And like I said, margin accretion, you should see margins going up as last year. I don't want to give a number there. I'm only giving the EBITDA range.

And so you said that possibly the expansion will be coming soon. So which means really what's the time period when we are expecting the new facility -- and we have quite some land --

We will expect to implement the project by next -- middle of next year. So from of FY '27, '28, you start seeing Q3, you'll start seeing the revenue flowing in. It will take us a year to implement the project. And this [indiscernible] as revenues will kick in.

Okay. And if you look at the entire pipeline, which is coming to IZMO Micro systems, are we seeing more concentration from India? Or it is coming equally from the product?

Both. Both. U.S., Europe and India, all are, I mean, very, very strong inquiry level.

Next question comes from [ Ash Gupta ] with Pura Ventures.

Congratulations on a stellar set of numbers. So my question was regarding the silicon photonic chips. So we have INR 45 crores of order book right now. How much time are we planning to -- how much time would it take for these order book to get executed? And what is our current capacity? And we were also talking about expanding the capacity. So once the capacity is extended through fundraising, much of an order or execution can we expect from it? And what is the maximum utilization right now?

The current order book of around INR 40 crores will take us 9 months to execute. Our capacity is around INR 150 crores top line, which we can do with the current facility. After the expansion will take us to around INR 1,200 crores top line, addressable top line. So that will give us a lot more room to actually meet the requirements of the big guys who want huge capacity. Currently, they find us too small, so they are giving us just pilot orders. But if I want to move into rail manufacturing for them, they want -- that's why we are looking at setting up the capacity so that we can then meet their demand. So then I'll have a INR 200 crore top line possibility once the expansion is in place.

So just a follow-up question on this. So we're talking about executing the INR 45 crores order book in 9 months. So what is the usually tentative time line? So once I place an order with you, what is the [indiscernible].

It depends on project to project. You can't let's say each project is different. Each package is different. So -- [indiscernible] us some it could even be 3 months, could be even 2 years. Okay, doing something for space, which is like 2 years, for -- the camera payload project. It's very, very complex packaging requirements. That will spread over 2 years. some we are doing for another client, which will be hardly 3 months. So it depends. [indiscernible] said, it's very difficult. It is very customized.

The next question comes from the line of [ Rohan Tantia ] an Individual Investor.

Excellent numbers. Sir, so my question was on the 2 aspects. Firstly, the cost has jumped nearly 5x to INR 69 crores. And so what was the reason for this -- like for the cost to rise? Secondly, IZMO Micro revenue has rose to INR 9 crores, which is approximately tripled now. So can we expect the similar growth momentum in the coming quarters or in how many months we can see it or maybe in the year?

You're talking about the other costs, which have shot up?

Yes, correctly.

So that one, like I said, we had done a project and most of it is outsourced services, and we got the pass-through margins. So that's why you'll see that number jumping up, will again utilize this quarter. Okay. What is the second part of the question?

Second part was, sir, that IZMO Micro the revenue movement has been tripled like if we check around quarter-on-quarter. Can we expect the similar momentum in the coming quarters or in how many months can we see --

For the full year around INR 50 crores. Last year was around 18-point-something, right?

Correct, correct.

So -- it may not happen quarter-on-quarter, but for the year, we will expect to close the number with project billing. It may not be bill in this quarter will be in the next quarter or so. For the year, definitely, we are still looking at that number.

Okay, sir. And sir, one more question I want to ask. Like are we -- IZMO working into quantum and deep tech technology? Or is it like looking at the opportunity towards it?

We are looking -- obviously, we are working with IoT on the quantum packaging. So they are making [indiscernible] doing the packaging, and they have 3 more chips to come in the next 2 years with IoT. Focusing on the packaging side, not the quantum side itself because we don't have expertise and quantum really or the packaging side, which is very critical. So we'd like to focus on where we are strong -- and based upon that.

Your next question comes from the line of [ Jaina Ranka ] with SIC.

As you said, that the silicon photonic industry has been growing around at the rate of 25 to 30, by FY [indiscernible]. So -- and you have also mentioned that there is no other company in India right now that is in the kind of tightening that you are doing. So in the coming years, do you see any huge large sub companies or other tech companies to enter in the same segment as you are in?

It's possible -- we don't know. Anything is possible. So by then, we will be far end. It's not a question of CapEx. It's a question of process technology. Question on material sciences, everything goes into doing a silicon photonic package. [indiscernible] going to spend INR 1,000 crores and put a packaging plant. [indiscernible]. It does not happen like that in technology. It's not a cement plant where size will determine everything. So as we keep building up more and more strength, we build up more and more process knowledge to build up a client base. They will not just jump to some deals just because it's a big guy who started today. You have to learn -- it's not easy. So we are not worried about -- it is a big market. Huge market.

Yes. And my second question was that what's the cost of packaging that you are doing? For example, unit economics, can you explain like how much packaging?

Yes, if you go right down to [indiscernible], which is what the big guys are setting up the [indiscernible], packaging cost is 8% to 10% of the overall ship cost. When you go to advanced packaging where we are, it goes to 50% of the cost packaging. When you go to silicon photonics, 80% of the cost is the packaging. So that's how the unit economics was as we go up the value chain. Their packaging becomes much more critical than the wafer itself -- the silicon itself.

So right now, the silicon photonic packaging has been -- no one is doing in India. So the companies which are using this kind of packaging and as -- so they are kind of importing from the other countries.

A lot of them have not been using it. They're now looking at it as, okay, it's possible to do it because it's again this come out in the last 2 to 3 years, even internationally. So a lot of things is now moving to photonics because now it's possible. It is possible. So it's being used now in telecom extensively. Now they're using it and LiDAR. It's being used in sensors. They're using it in defense, space Photonics is now making inroads everywhere because the technology has matured to a point where companies can actually build applications around it or build products, which use photonics. So that's why we have actually at the right place at the right time.

Okay. And my last question would be, as you said, in the next year, Q2 or maximum at Q3, [indiscernible] the time line when the revenue thinking of the new CapEx. So during that year, how much revenue are you expecting from the IZMO Micro? I mean how much capacity utilization are you assuming?

See, we are looking at 20%, going up to 45%, going up to 80% phased -- in a phased manner.

Can you put the [indiscernible] ...

[indiscernible] be only half was 6 months working. So we look for a 6-month period when it jumps to 50 to 60, then we go to 80% to 90%.

And what will be the EBITDA margins in that?

That should be around 35% percent plus.

35% plus.

Yes.

So what would be the blended EBITDA margin of the overall business for the FY '27 and FY '28?

Around 30% plus.

Your next question comes from the line of [ Ravin ], an individual investor.

Sir, IZMO Microsystem is trying to increase its manufacturing capacity as part of its growth strategy, silicon, open space. Also, IZMO Microsystem is collaborating with TC Craft and an [indiscernible]?

See, [ 360 ] is the foundry. So they make the silicon [indiscernible] does the design of the package for its customers. We come out with the actual package. So it's a collaboration between 3 companies who do part of the listing. And then we go as a team to a client and say we give you everything. Package design the silicon and we do the package. That's how we are collaborating because like [ Alcon ] has a lot of design expertise -- let me do it for [ Craft ] is a foundry. We don't have -- we are not what will be ever doing a foundry, not in the short term, maybe in the long term. So it's -- each one complements each other skill set wise. And when you give a package to our customer is happy that, okay, everything is here between these 3 companies and what everything. I don't need to run around. That is the [indiscernible].

Got it. Specific on the collaboration -- latest update from this collaboration?

No, we are working together. There's a lot of customer engagement in Europe. We'll start seeing results soon.

Your next question comes from [ Krishna ] with Rada Krishna Investments.

I think he already asked a question, earlier, I remember.

Yes. At that point of time also, we did not get any audio. So [indiscernible] please rejoin the queue if you have further questions, please. Your next question comes from [ Mara Venkata Raman ] an individual investor.

Really achieve excellent quarterly growth in profit, which were been looking for so many quarters, actually this quarter at really commendable growth. We hope to see this similar growth in [indiscernible] profit. And you expect -- one question I was wondering the other expenses you already told it's because of the onetime project delivery expenses. But interest [indiscernible] guessing, I would expect you to put some small note in the annual note, that one thing.

[indiscernible] relation.

Second thing I was really what is that there are 11 subsidiaries which are totally contributing around INR 50 crores profit, and I was -- I think that these are not article. Any reason why this was not audited?

See, the U.K. origin France is all with KPMG, Belgium is with KPMG. U.S. audit is not done. It's only tax filing because U.S. audit you come only for $100 million companies plus -- it's very complicated and very expensive. So there, we have a tax auditor who reviews the financials before they file it for tax. And then we have a limited review in India by our state auditors. Rest all are audited. U.K., everyone is like done properly. So wherever [indiscernible] we are doing it.

Your next question comes from [ Dia ] with Sapphire Capital.

Also, you said that we are expecting 20% to 25% EBITDA margins in FY '27 and 30% plus in FY '28. So what -- what are the drivers for this [indiscernible]?

The drivers will be basically the growth of IZMO Micro business and '27, '28 will be the new plant coming on stream. So that will drive again margin accretion. Because like I said, our gross margins on packaging is 50% to 60% and in -- even in [indiscernible] photo mix is much higher. So as the contribution from those businesses increase the overall margin will look much better going forward. So these are high technology businesses. So that's the reason.

Okay, sir. And is it safe to assume that you can do like about 30% to 35% growth in FY '27?

At least if I may not be -- I mean, will be challenging, but we definitely are looking at 20%, 25%. I don't want to promise a [indiscernible], we will definitely try for the highest possible, but can't say at this point.

Okay, sir. And how much CapEx are we planning for FY '27?

We are raising around INR 150 crores mostly for CapEx. So I think [ 25 ] will be CapEx and INR [ 25 ] working capital.

Your next question comes from [ Patrik ] an individual investor.

You have had repeat orders on IZMO Micro. So what are these validated customers from which industry are they predominantly from? Can you give some idea?

Automotive, defense, space largely would be from the top 1 would be which sector. Defense.

And all in the Indian defense?

Yes.

Okay. And on the second question, since it's been almost 6 months that we have planned the CapEx of INR 150, why the delay? Because since we are already aware that the order pipeline is not a problem. Execution is a problem. And since the expansion is in place. So why has there been a delay for 6 months to raise this CapEx? Any particular reason?

No, no. We were firming up the whole plan. There was a lot of changes we had made because looking at which technology to go for, which machines to go for. So it took a bit of time. And then the fund raise, we started the process only last month in earnestness after we had frozen the technical part of the CapEx. So that took us time to really freeze on which machines, what kind of technology, all that.

And at the [indiscernible] complex city office we will be close.

Yes, we hope to close it, we hope to merchant bankers are pretty upbeat about it. There's a lot of interest for semicon right now. in India and rightly so, it is the upcoming [ Sunrise ] industry. With the government having out of [indiscernible].

So as of now, we haven't made any breakthrough in Packaging and silicon photonics in data center? Am I correct?

Yes, not yet. We are working on that. We should have our first -- this thing coming out in the next 3 months.

Again, an Indian customer or someone from outside?

Indian customer. Actually, a foreign company is setting it up in India. So you can call it Indian clients or foreign client, I don't know. Okay. The data center is in India, irrespective of being a person who's going the company that is -- that is right.

The next question comes from the line of [ Holger ] an individual investor.

My question was regarding the motor that you have invented, what is the [indiscernible] and you send it to the public sector company for testing. So I want to know about that. And second part is I want to know what will be the revenue of IZMO micro after 5 years. you previously, you have media -- regarding the [ 100 MP100 ] hold motor?

Let me recall exactly which context we had given that [indiscernible].

Motor [indiscernible] at a very high temperature.

Okay. Sorry. So what was your question?

Is there any commercial production of that motor, any order regarding that?

Orders are already there. We are working on the first batch of it has been qualified and we are working on the first completion of the first order for that customer. We went through a very complex, very retail qualification cycle. Given the criticality of the application and the complexity of the product itself. Now we are going to do the actual delivery of the product.

And my second question is that after 5 years, how much revenue we expect from [indiscernible] after 5 years?

I think INR 1,200 cores to INR 1,500 crores.

[Operator Instructions]. Next question comes from [ Shaan Kumar], an individual investor.

[indiscernible].

Sir you are too soft. If you are using any other mode, maybe request to use the handset, please?

I'm using the handset. Is it fine now?

This is better. No, much better.

Sorry. Again, it's about IZMO Micro. You have the planned CapEx coming up in the next year, right? And you told 20% of utilization, which means around INR 250 crores, is it safe to assume that?

Difficult to put a number like that, but capacity [indiscernible] have only 6 months of the year. So I just said the number of 20%. But we are looking at a substantial growth. I don't want to give a number right now. It's too premature.

Okay. And the other part is that recently, Tesla also launched their program for the space or better data center. So we have, I think, technology ready for supporting this pace for better data center chips, right? Like the 2 channel silicon that [indiscernible].

We can do packaging for space. We have expertise in packaging for space and when we do the [indiscernible] work with them.

Okay. Do we have any interest coming up --

[indiscernible], I will request you to return to the queue for further questions. We have several participants waiting for their turn.

You can always send an email to add [indiscernible] if there any questions you have and we'll answer them separately. No issues. Okay?

The next question comes from Parash Chheda with Purpleone Vertex Ventures LLP.

Joined a little bit late. I mean the [indiscernible] is there any -- just wanted to understand that Q4 is micro is now revenue-wise based about INR 9.2 crores. So that's quite interesting. Now is this run rate sustainable and what revenue contribution can we expect IZMO Micro realistically in FY '27 and FY '28?

So FY '27, like I mentioned earlier, that we are expecting around INR 50 crores.

Okay. About INR 50 crores.

Correct. And FY '28 substantially more than that.

Understood. And what proportion could be expected from defense, silicon photonics and other semiconductor packaging?

It should be around 80-20, 80% from advanced packaging and 20% from photonics, which will keep growing. Because photonics, we have just started last year so that it's scaling up, it takes time. Packaging is moving much faster.

The other one is we have announced various partnerships with health and craft and so on. So when do these collaborations start contributing to meaningful revenue, would it be FY '27, it [indiscernible] even itself. And as [indiscernible] reminded receivables have gone up from INR 90 crores to INR 128 crores sort of where do we expect --

In The last quarter itself is INR 100 crores. So it's actually days, 10 days of this thing, which is very normal because we are very large clients like [indiscernible], they paid in 4 months, 5 months. It's very normal for them. But the money come up. So we are not very worried about that. So we will continue to stay cash flow positive as from operation.

The next question comes from [ Deepak], an individual investor.

Congratulations on the set of numbers. Want to know what is the amount of loss of IZMO [indiscernible] in quarter 4 of this?

Sorry? You were not quite on in ...

I want to know what is the amount of loss IZMO Micro is making in quarter 4 of this financial year?

I don't remember off and I can't give you the number. Sorry, if you send us an e-mail, we will reply to it.

Okay. And one more question. In the pro data for the past 1 year, your revenues are almost flat and what is the reason?

We are getting good business from the last quarter onwards. It was flat in between for 2 quarters, and the market was a bit sluggish, but we are seeing again a resurgence in the last quarter and very strong order pipeline going forward.

Your next question comes from [ Suraj ] retail investor.

Hello. Yes, please go ahead. I just wanted to understand -- I understand that you cannot explain in detail, but can you give us a basic idea of what exactly is the difference between silicon photonics and advanced packaging?

Advanced packaging, we are using different materials for packaging. Frankly, I can't explain it to you. It's not so easy, even if you have explained. In silicon photonics, we use a lot of fiber, optical fiber, we use optical connects and the tuning of that is very critical. That is difficult to achieve. So you have a lot of costs, which we have been able to bring down to less than 2 decibels because what happens when you are working with optical interconnects. The tuning takes a lot of time to make sure that the data flow is perfect, and that's where the criticality comes. In advanced packaging, we are handling like trip chips stacked [indiscernible] in other kind of packages where I would say we are -- there are like 400 interconnects to the [indiscernible] chip, which we are doing or we are doing a stack die with 3 chips, 1 on top of the other, different complexity. So the 2 is actually not comparable, different tone totally.

Understood. So sir, when you say that you are the only company in photonics packaging. So that means silicon photonics. You are already talking right?

That's correct.

Advance packaging you must be --

No advanced packaging. When it comes to flip chip or [indiscernible], nobody has in India can do it. That's called 3D packaging. Nobody else in India does 3D packaging. But I can put [indiscernible] the other in regional chip.

Ladies and gentlemen, due to paucity of time. This will be the last question. For further questions, please contact the Investor Relations team. For now, I would like to hand the conference over to Mr. Sanjay Soni for closing comments.

Thank you. I thank every member of the IZMO team for the dedication and execution. And I thank all our stakeholders and partners for their continued trust in us. We remain committed to building IZMO into a leading diversified technology company, anchored in automotive solutions and growing powerfully in semiconductor packaging and AI analytics. Thank you all for your continued support. Please do reach out to our Investor Relations team for any further queries. Thank you very much. Have a good day. Take care.

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