Jash Engineering Limited (JASH) Q3 FY2026 Earnings Call Transcript & Summary

Good afternoon, everyone. I'm Siddesh Chawan from Ernst & Young, and I would like to welcome you to the Jash Engineering Q3 FY '26 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. The recording will be made available on the website within a day, and the transcript of the call have been made available subsequently. To take us through the results and answer your questions today, we have the top management of Jash Engineering Limited, represented by Mr. Pratik Patel, Chairman and Managing Director; and Mr. Dharmendra Jain, Chief Financial Officer. Now I would like to draw your attention to the safe harbor related to the today's earnings call. Comments made during the call may contain forward-looking statements that may involve known or unknown risks, uncertainties and other factors. It must be viewed in conjunction with our business risks that will cause future result performance or achievements to differ significantly from what it is expressed or implied by such forward-looking statements. After the end of this call, if you need any further information or clarification, please do get in touch with me. With that said, I will now hand over the call to Mr. Pratik Patel. Over to you, sir.

Good afternoon, everyone. I'm thankful to you to attend this investor call based on the first 9 months performance of the company. I'm sure that you must have gone through the presentation, which we have uploaded on to the stock exchange. However, we are running the same here for this [indiscernible] purpose. As already -- as already -- as already seen from the results, we have had a very marginal growth in revenue this year. And reason for the marginal growth is well known. It was the U.S. tariff, which had resulted into slowdown in delivery from India to U.S. And as a result of that, we had significantly low revenue towards the U.S. However, the -- however, the -- the drop in U.S. revenue was somehow fulfilled by the increase in domestic revenue. And so overall, even though the drop is from our projection, but actually, there has been some growth. There is significant drop as can be seen when I present later on, there is a significant drop in PAT or EBITDA as well as gross profit margins, but this is also an extra [ credit ] line and I hope that by the end of the year when we announce our final results, we expect this PAT to be in the range of 9% to 10%, which I view is significant because in spite of such a big effect of the tariff, we have been able to post PAT margin of 9% to 10%, which I think is [ strategical ]. As can be seen from our experience of U.S., I tried to -- earlier, I tried to diversify the business in a way that none of the geography has more than 35% market share. And in the U.S., we are around 35% to 40% market share, but the tariff has taught us that we should focus more on diversifying in a way that we are no more [indiscernible] to future happenings in U.S. As a result of this conclusion, we had decided to acquire additional businesses which can bring more revenue to the company as well as strengthen our U.S. and U.K operations by acquisition of Penstocks U.K. The Westech acquisition is already done. And I think the Penstocks U.K. acquisition is also on the verge of closure. If everything goes well, we should be able to do it within February, if not, then in March '26. However, these 2 is not enough, that is the acquisition of Westech and Penstocks is not enough. We need to become stronger in other geographical areas. Middle East is one of the fast-growing area. And in Middle East, we have decided to set up a company. Already, we have received permission for the company setting up and we are now applying for land. And once we get the land, we should be able to build up a plant and start commercial operations in Middle East. Why is this important? Many Indian companies, including Wabag and Ion Exchange and Tecton and so on, are presently doing jobs in Middle East. And for those jobs sooner or later, they will all be requiring Saudi or Middle East value addition. And when that happens, we aim to be ready in Middle East to be able to cater to this business of our local EPC contractors. In addition to the business of other EPC contractors worldwide, we will also be ready to serve our own local EPC contractors we already have a very good relationship. Having said this, coming back to the U.S. trade deal, it has been agreed, but it is not yet signed. However, based on whatever has been agreed, it looks like the uncertainty has gone. It looks like now we are back on the original situation in America with lower tariff and stability of tariff, which is more important than even lower tariff. And once that takes place, then our long-term outlook on growth again would be in line with what we had projected a year back. Next, coming to the financial snapshots. You can see our growth in revenue has only been 3%. However, there has been a reduction in gross profit margin, in EBITDA as well as profit before and after tax. As already mentioned by me before, I'm not too much worried about it. This is something on expected lines. We still expect to end the year with a PAT of 9% to 10% on the revenues of between INR 780 crores, INR 790 crores to INR 810 crores. On the stand-alone, you can see we have had a small drop in revenue. This drop in revenue of Jash Engineering has been because of a huge reduction in exports to Rodney Hunt. So our Rodney Hunt business from India to America has been affected by close to INR 25 crores, INR 30 crores. And as a result of that, the domestic revenue has gone down a little bit. However, it was made up by -- sorry, the export revenue has gone down by a little bit, but it was made up by increase in domestic revenue. Shivpad revenue also has gone down a little bit. Rodney Hunt revenue is affected tremendously and the Waterfront revenue has gone up. At the end, I would like to say that I'm not too much bothered about Jash Engineering and Shivpad Engineers because our order booking is strong. And because of this tariff issue, a lot of projects everywhere slowdown. But now I think slowly, slowly, the world is coming to reconcile with whatever the revised tariffs are there. And with that, everyone is taking a decision to go ahead. In case of Waterfront, we are doing well. We expect to do well. I think this year, we may break even at the end of the year or have some minor losses. But what is important is with Penstocks U.K. and Waterfront being together, I expect a very positive and very good outlook for this company in the future. This shows the breakup of our business product-wise as well as geography-wise, as you can see, U.S.A. is close to 35% now. Earlier, it was higher. We would like something like this to be in the future that India is around 40% -- 40%, 45%, America is around 35% and balance is coming from other territories. This gives our consolidated results for quarter 3 as well as corresponding quarters last year and 9 months for '25 as well as '26. As I said in the beginning, we still expect by the end of the year, we would have net profit of 9% to 10%. Our order book has been continuously growing. As of 1st February, our order book is close to INR 923 crores, which is a reasonable growth over last year. And so I think that we are on the right track. Yes, we had slowed down this year in booking our orders. But at the end of this financial year, we would be again going strongly forward in America and so our order book will continue to grow. Our consolidated order book position is INR 923 crores, of which INR 653 crores is outside India and INR 270 crores is in India. All our divisions, all our subsidiaries have good order position. And so as far as order book is considered, we are doing quite well. Our orders negotiated and under negotiation is also quite good. Generally, the month of February and March are weak little bit. However, it seems that we would be still doing a respectable booking in this month. In the beginning of the year, we had given a combined revenue forecast of INR 860 crores. I regret to inform that due to tariff, it is not going to be possible to achieve revenue like that. We have -- as can be seen, we would be having a drop in revenue at Rodney Hunt, which is significant. It would be to the tune of INR 70 crores to INR 80 crores. Because of that drop in revenue at Rodney Hunt, the revenue of Jash Engineering also will drop a little bit in comparison to the forecast. This is because our export from India to U.S. was stopped or delayed for a number of months because of uncertainty related to tariff. Now we cannot make it up so fast. We are trying our best. But in spite of that, we will be losing around INR 50 crores, INR 60 crores, INR 70 crores in revenue at Rodney Hunt. At Mahr Maschinenbau, we will be meeting whatever we had projected, and at Waterfront also we'll be meeting whatever we had projected. So I expect anywhere between INR 775 crores and INR 800 crores as our consolidated revenue for the year with revenue drop being maximum for export on account of Rodney Hunt. Within India, we expect to do more than what we had projected. However, outside India, we would have a drop on account of the prices we had faced in America. Coming to updates. I've inform about 2 very good development. One is about setting up of Rodney and Mahr industries in Saudi Arabia. Saudi Arabian market is booming. A lot of investment is happening, not only Saudi Arabian business, but also in GCC, a lot of investment is taking place. By setting up a plant in Saudi Arabia, we have 2 benefits. One is price benefit because when you do production in Saudi Arabia, localization benefits are given also to contractors, CPC contractors. And at the same time, we get price preference also. So setting up this unit, in the long-run will spare up our capacity in India and also enable us to do more business and get more revenue from Middle East. The most important part is the India-U.S. trade deal. It has been very favorable. We -- I'm pleased to announce we have already last week -- this week, sorry, this week, we have already cleared -- last week, we have already cleared 2 consignments at 25% tariff rate. And we were informed by [ custom ] maintenance that once the ratification of the deal is done, then we should be able to gear at 18%. And so it seems we would be back as it is earlier. Even though the tariff rate has gone up, but that doesn't affect us. We were never affected by the tariff. You are affected by the uncertainty of tariff that you do your costing considering 0% and then 25% is applied. Then you do your costing considering 25% and then 50% is applied. And to top it up, Mr. Trump said that I may apply 500%. That put a scare on us and stopped us from taking any major orders in Americas. Now that the deal is signed, I'm quite confident that America would be like normal for us. And in next year, we'll be back to the growth path what we had projected before. I'm pleased to announce that our new plant in SEZ Pithampur is now ready. It will go on commercial production from the beginning of April. This would free up a lot of spare capacity for us. And as a result, we can aggressively take more orders in America as well as in the various other export markets. This is the third plant in Pithampur. And with these 3 plants done, the Pithampur plants have reached a capability of anywhere between INR 300 crores to INR 400 crores depending upon what is the pickup of the material which is ready. Our biggest problem has been material which is ready, but clients don't pick it up. I hope that we are out of that problem now because once the tariff issue is gone, a lot of material has started moving everywhere. But with this new facility, even such type of interruptions, we have spare space to manage. And so I believe we are now back in each way for export business. The company has been developing new products as well as been doing special projects. This explains some of the projects or the products which we have developed. We are doing great in special gates for desalination plants. More and more projects in Middle East and in India are coming with desalination. And I'm pleased to inform that we are considered one of the best supplier for these projects, desalination projects. We have also developed special Surge Vessel � Bladder Type as well as Twin Screw conveyors for sludge handling. All these new product development will go a long way in increasing our revenue in future. This showcase some of the projects which we have done worldwide. Very important is the MSD Bissell project and the Mahasawat and the TK Halli project. What is important is the right type of equipment which we have supplied to this project. So we have supplied cast iron products. We have supplied stainless steel products. We have supplied aluminum products. We have supplied composite products, different type of screens. It shows the wide variety of material which can be given by a single company to a complex project and that is our strength. And on that strength alone, we are assured of a bright future in the export market as well as in the domestic market in the future. I'm pleased to inform that the 20 -- 40 MGD Rithala plant, which has installed a 37-kilowatt Archimedean Screw Turbine is going very well. This is the first commercial generation of electricity in STP other than the one which we have done in Indore. And this will establish that all STPs should offer this technology in the future. Another project, which again, I would like to tell about is the sewage treatment plants at Bandra, where we have supplied the screens, where we have supplied the fine screen, the coarse screen, the gates, the stoplogs, the roller gates, et cetera, a wide range of products in a single project. And that is our strength. And that is why [indiscernible] was. And this strength, no Indian company has. And that is why when we were facing setback due to exports in America, the Indian market has come to our rescue and our growth has been significant in Indian market. And as a result of that, the revenue shortfall has not been major. With this, I would like to thank you once again for patiently listening to me. And if anyone has any questions, it would be my pleasure to address and do the same.

We'll now begin the Question and Answer session. [Operator Instructions] We will take the first question from [ Jiten Parmar ]. Please go ahead.

You have given all the reasons for the performance and that is -- I mean, that is how business goes. We understand that. Will you be able to give projections for next year? What are the things -- I joined the call a bit late, so I don't know whether it was there in the presentation or not.

So I think we had given our 5-year projection sometime back around a year back. And we will be back to maintaining the same. So that -- this year was bad because of the U.S. tariff. But now the order book in U.S. is $42 million. So it is only about our starting production. There is no stop gap as such. We have to start the production and start shipping material. We now know. Fortunately, that the tariff is not going to exceed 25% even in those projects where we had considered 50%. So we'll be saving some money what we lost this year we'll be saving next year. So we are back to normal if nothing -- another calamity comes, some war or something, we are normal to maintain the same projections which we had given before.

So basically, this year's blip will not affect what projection we had given for next year. Is that?

[indiscernible]

Okay. Perfect. And also with Waterfront and now with the U.K. deal also signed, do we see any advantages of that happening to us on Waterfront?

See, understand U.K. deal was done for 2 reasons. One was to strengthen Waterfront because they were in the north -- the main clients are in Midlands where this new company is, so the clients had reliability issues on service and after sales. That is taken care of by acquisition of this company. But what is very, very important is Penstocks U.K. as a design which is unique. And that design, I visited U.K. last month and that design I would like to roll out worldwide. And that is something which is very -- going to be very unique for future. So the acquisition not only brings stability to Waterfront and penetration in the Midland market, but also brings new product design to us, which is like Lego blocks very fast and needs very few people and can help me roll out this product, and it is a very competitive product worldwide.

Perfect. And A little more on the EU deal. Do we have any -- do we get any benefits of that in Jash?

I think we may get benefit, but most important is there is no limitations for us compared to what was before. So that deal that way is positive for us.

I wish you all the best. I mean we know you were very, very transparent over the years. And I mean, generally, there is -- we generally wouldn't even need to ask you any question because your FAQ and everything covers that. So hats off to that. And I really appreciate the transparency you've shown over the years and wishing you all the best.

We'll take the next question from Rushabh Shah.

Sir, my first question was, how do you see the investments on the private side, especially in the semiconductor business. Do you think this could be a large opportunity business for us going ahead?

The semiconductor business is for very fine quality of water. We are not into that. We are into water. They will need water. And when they need water, whatever equipment are required to collect, transport and create that water, we are doing. But high treatment is a different subject altogether. We are not into that.

Sir, the next question is, a couple of quarters back, we have talked about filling the gaps in our product portfolio on the conveyance side of the business. So any update on that?

No. I would say we are talking with a few companies and few people to add such products. But as of now, I have got nothing to announce.

Okay. A question -- the next question is how big our O&M business because the replacement time for gates, as you say, is 25 to 35 years, but O&M would be higher part of it. And for other product categories, what is the replacement time, sir, for, let's say valves and screen? And how big is the O&M business for those products?

So the O&M business is not big for us. It is 5% to 10%. However, what is -- the life is 25, 30 or sometimes faster, it is one out faster based on the type of application. So I would say we are mostly going to be in projects business. O&M will depend upon certain products which needs more O&M and certain products which need low O&M and low after-sales requirement.

Okay. And my last question, since we don't have pass-through mechanism on projects. We have a fixed price project. So what happens when the raw material prices are volatile? Just asking this question from the risk management perspective of the company.

See, when we are bidding for the project, we are always forecasting what would be the pricing of the raw material. And accordingly, we are taking it in our estimates. However, if a project is long gestation, say 2 years and something happens in between, like COVID happened, then it is very difficult for us to project that and cover for that. In that case, we take a hit. However, if you go through our effect, you will see that whenever something like this has happened, say, for example, current, when the U.S. tariff hit us, the U.S. dollar to Indian rupee was something around INR 82, INR 83. Because of the tariff, the Indian rupee weakened and became INR 91, INR 92. So whatever we lost is partially compensated by the depreciation of the rupee. And this is something which has been also during the raw material prices. Whenever the raw material peaks, you will see that generally, the rupee also depreciates. And that has been written by me in my FAQ as well. So generally, because our export is at a very high level, the drop or rise in prices is always one way or other covered partially by the drop or increase in the rupee value.

If I remember, since we don't have the pipeline valves and for commercial valves for a pipeline and about a year back, we were visited by a French company. So any progress on that front, are we looking to add those products in our product portfolio?

We are looking but until an understanding is not achieved, we cannot say anything.

We'll take our next question from [ Kunal ].

Sir, my first question is, sir, out of the INR 370 crores, INR 380 crores of order book of -- which is -- has U.S. exposure. How much of it is to be executed by FY '26? And how much of it will spill over to Q1 FY '27? Because I believe that now that the trade deal has been announced, we might try to push more shipments out in Q4, which will lead to higher sales in Q1 because once the goods reach there and is recognized as sale. So Q1 will be really good for FY '27?

It should be good. Material -- a lot of material is under shipment already and a lot of material is expected to reach shortly to U.S. And with 25% or maybe we are lucky 18%, obviously, whatever we had held up, we would now like to produce fast and sent. So next year, we hope to have a good year in America. Just to give you an indication, last year, we did $36 million revenue in America. This $36 million has come down -- will come down this year to something like $29 million, a $7 million drop because of this problem. So next year, obviously, with the order book and everything in hand, we will go aggressively to build up our U.S. business once again.

And sir, my next question is that are we -- do you see we are late to set up a factory and production in Saudi? I mean a lot of orders have been rolled out and...

See, it's never late. But yes, if you are thinking that someone has gone before us, then yes, maybe we are late. I think in the products which we make, there is no -- there is only one company in Saudi Arabia today. So if we are able to start production, then we will be maybe second or third company.

Okay. So it's not that we'll be losing out on much business and if we are said coming next year in 2027?

We may lose some business because of localization issue. But I would like to clarify one thing. If I get the land and if I submit the drawings and if the drawings are approved, then 1 year from that time, I can take the benefit of localization by producing the same equipment in India also.

And export it?

And export it.

Okay. Sir, my last question is how much is the order book of Westech now that we acquired 90% of it?

Westech order book is INR 45 crores.

To be executed by FY '27? Or what is the gestation period for the products?

INR 20 crores, INR 25 crores will be executed. INR 15 crores would be executed in the remaining 2 months and balance will carry forward.

We'll take our next question from [ Philip Sahoo ].

Yes. Pratik bhai, just one hygiene question. If we are going back to business as usual next year, is it fair to assume that our operating model will also become same as earlier, and we will make around 20% to 24% operating margin and 12% to 14% PAT margin going forward next year onwards?

Yes, if everything works out, it should happen like that. I will tell you one thing. There's a good possibility. I don't -- cannot forecast the future so accurately today, but there's a good possibility because those projects which we had taken considering 50% tariff, will now go at 25% or 18%.

Great. Yes, that's good.

So we were hit this year, we will get some benefit next year.

Very good. Sir, including the current year's acquisitions both in U.K. and in India, we would add around INR 100 crores of inorganic business next year, INR 70 crores, INR 80 crores.

No. I would say, INR 50 crores. So please understand one thing. Whenever you acquire a company, everything looks very rosy. But when we go in, then we have to reestablish our systems on profitability, our systems on how to do business, et cetera, and to rebuild the team and that takes time. So my experience in any acquisition has been -- we think we will be able to do everything very fast. However, once we go in, we realize these are the lacuna, this has to be taken care of. This is the weakness of the team that is to be taken care of. So to rebuild the team, to take over all the process and system and convert them to what we have in Indore is not easy. It takes time. So I would say in any acquisition, my experience is, first year is gone in rebuilding the company or reorganizing the company. And then next year onwards, you start catching up and then the third year is when the peak reaches.

Sure, sure. So does that also mean that we might see some profitability hit in U.K. and in Westech?

In U.K., whatever hit we had to take, we have taken. Now it's gone.

Sure. Pratik bhai, the second question is, we are having around 3 SEZ assets in India, 1 in U.S., 2 in U.K. and 1 in Europe. And now we are going to have 1 in Saudi. So that's like most of our manufacturing assets are now for export-oriented or in other countries. So is it fair to assume that the current breakup of 540 and 340 will grow much faster outside India than in Indian revenue because India doesn't have...

We still produce, I would say we still -- whether it is Saudi Arabia, whether it is U.K. or whether it is America. See the concept of setting up these plants there are that fast to deliver and simple products would be made there. High margin, complex products would be made in India. So when we see Rodney Hunt $36 million revenue, $9 million to $10 million was produced in India. When you see U.K. INR 40 crores, INR 45 crores, INR 15 crores to INR 20 crores was in India. So this will still continue. It's not -- means by setting up a unit abroad doesn't mean that production will be shifted completely there. If they need something fast, in 3 months, 4 months' time, it will be produced there. If they are big projects needing a lot of people, and if I don't have the people there, then I will produce here.

Sure, sure. And we had plants in Houston, if I remember, for U.S., which I think we didn't discuss much because of whatever is happening there. So what is the plan for U.S. for next 3 to 5 years in terms of investments?

So Houston plant, we had placed the order on a contractor. He has gone bankrupt and he has closed the company. So now we are searching another contractor, and we would be able to get his pricing in this month and we'll negotiate a new job with him, order within next month, and we expect to start in June, July the construction and commission the plant next year before September.

Sure. So -- and it will be an office and manufacturing...

No. Only manufacturing. Office is dropped, with this shock of 1 year, we have dropped the office. Maybe once we are back on this high-growth profitable path, then we'll think of office.

We'll take a next question from Sahil Doshi.

Sir, firstly, I just wanted to check, last quarter, you had said a legal opinion was obtained that possibly the duty which you have paid in the U.S., there was some benefit which you could get back. So just wanted to check on that.

So two consignments have already been cleared last week with 25% duty. Not 50%, 25% duty. So based on that legal opinion only. And if the tariff is reduced to 18% based on the ratification of the deal, then we will be -- all future consignments which are also already on the way would be given at 18%.

Okay. No, my question was you alluded to the fact that the 50% tariff which you had paid in certain projects, there was a scope of us getting it back based on some legal opinion.

That we don't know. To get money out of any government is very difficult. So whether that will happen or not, I don't know. I think what I had said at that point of time was not that. I had said that instead of 50%, we got a legal opinion that we can go on reciprocal tariff, not iron and steel tariff. Refund is not something I discussed. It was the reciprocal tariff was 25%, which was increased to 50%, but iron and steel tariff was 50%. So I had alluded to this that the legal opinion is that we can give a 25% tariff instead of iron and steel tariff. Now that the reciprocal tariff has been reduced from 50% to 25%, we have been able to get to consignments near at 25%

Understood, sir. Sir, second, on the U.S., like you said, because of the tariff uncertainty and your business plans were on hold and you were not too aggressive in terms of order booking. So how much do you believe that orders you would have passed or business you would have let go because of this? And once that clarity has emerged, how do we see the U.S. over the next 1 year because the order book in the U.S. for the last 1 year more or less been stagnant.

Yes. So in the month of January, we have already booked more than $3.5 million orders. So ultimately, we decided that 50% is going to remain, 50% will not increase. So we started taking orders. We have taken a few orders of $1 million plus -- 2 orders of $1 million plus last month. So I would say whatever -- maybe we have not taken $7 million, $8 million, $10 million worth of orders, but now from January, we have restarted taking orders. And so I don't see that in future, we'll have any shortfall on that regard.

And just lastly, sir, in previous interactions we've said at one point of time that we could make 9% to 10% margins in Rodney Hunt at an optimal level in that sense. Once we start scaling and going back to that number, with the new -- the environment, et cetera, do you really think that number is yet achievable?

Yes, this is achievable. Once the revenue grows, and the revenue growth has nothing to do with tariff. Please understand whether it is 25% tariff or 50% tariff, we are comfortable at that tariff. We are not comfortable when we estimate at 25% and it becomes 50% or when we estimate at 50% and it becomes 100%. The uncertainty of tariff, because when you do costing, you quote to client, you have to add tariff in it. We add the tariff, quote to the client. The order comes in 2 months' time and the execution may take 6 months to 1 year. And before we execute the job if the tariff increases, the hit is coming on the company. So margins was never an issue. It was about revenue, because of tariff revenue goes down. As revenue goes down, overhead percentage increases, profitability goes down. As revenue goes up, costing remains same, overhead goes down, profitability goes up.

Sure, sir. And just lastly, sir, on Shivpad, just wanted to check that's fallen -- I mean, we've seen a dip there. Could you just talk about what's really transpiring there? And what's the outlook on Shivpad?

We set up a new plant for Shivpad. And we put a new team in place for production because it's a big plant. And as I said, in our industry, the biggest problem is manpower. If you don't get the right manpower, you will suffer. And we had a lot of problem with the manpower. The quality was not coming out, a lot of customer complaints were there. So we had to send a team from Indore, train a team in Indore and send the team in Indore. So first 10 people have already started working in Shivpad from 1st of February. And slowly, slowly, we will set up the complete team in Shivpad through trained people sent from Indore. As a result of that, we have had some setback on deliveries, but quality is more important than revenue because once you lose the trust of clients, then you are in a deep problem. As a result, we have had some drops at Shivpad, but we'll recover soon.

Sure. And now with this Westech, since they were outsourcing a bit of it, when do we see that alignment coming through by '27 or that should be a year later?

A year later. As I said, any new company you take over -- our first meeting at Westech is next week. So we will be going and reviewing all their operations and what changes needs to be done and all strategy discussions. And then we'll need a few months to implement it. And thereafter, the results will come 6 months or 8 months later.

We'll take our next question from Nirmal Kumar Jain.

Pratik bhai, Dharmen bhai, I was at the plant recently 3 days back. Thank you for kind of organizing the visit. And I was amazed to see the level of motivation in the employees at the plant. So while I was visiting the plant, there are products being made for NPCIL and disc filters being manufactured. So I have like 2, 3 probably questions, Pratik bhai. How has the perception of Jhas probably changed once we started supplying to NPCIL. So how that perception is probably helping us to get probably new orders either in India or outside India? That is my first question.

So can I answer question by question?

Yes. So -- yes, so the second question is, Pratik bhai, about the disc filters. So what is the opportunity size for selling disc filters in India? Those are my 2 questions.

So the first question is NPCIL. See, NPCIL experience will not go outside India. Means when you work for NPCIL, that will not get me business outside India. But it will definitely get me a lot of business within India because NPCIL needs good supplier. And today, they consider us as one of their top suppliers. So with the nuclear environment opening up for private industry in future, we expect our experience with NPCIL and their experience with us to be very positive as a result of which both would like to go ahead with this type of business, which is highly critical. It's not an easy business, highly critical. But if you can master it, you have a huge opportunity in the future. But that is only domestic, nothing to do with exports. Coming to your second question, disc filter, we have already mentioned in our FAQ, et cetera, what is the potential for disc filter. We do not make big size disc filter, which are made by other companies. We make small disc filters And we expect the domestic and export put together INR 20 crores to INR 25 crores worth of business.

Okay. Yes. So I have one more question to add here, Pratik bhai. I understand that we have the average order size that we have ranges from INR 1 crores to INR 4 crores. But I have a kind of question wherein -- where we get bigger size orders, like, say, the kind of NPCIL orders where we get like INR 50 crores, INR 60 crores, INR 70 crores kind of order size. Is there any way of kind of having some pass-through clause wherein the material cost increases and something of that sort is possible for the big size orders?

It is very difficult. However, please understand that we have stage-wise payment. So we get 10% or 15% or 20% advance and then balance 30% or 35% before -- by the time the material is ready for inspection. So because we are getting stage-wise payment, sometimes that also helps in mitigating the price rises.

[Operator Instructions] We'll take the next question from Navin.

Am I audible?

Yes.

Sir, you previously spoke about the demand environment because of the tariffs, the decision-making has slowed down. Now with the deal signed, how is the demand environment looking outside U.S. also, because even in the outside geographies, the decision-making because of the tariff had lengthened.

Also slowly, slowly things are improving. The tariff was a shock for everyone, even for EPC contractors in America, because they were getting something at 3% and all of a sudden now it is coming from Europe in 25% and elsewhere at higher rate from China or India or anywhere. So everyone have suffered. However, business has to go on. So all new projects, people have added higher tariffs and we then got the job. So now it has stabilized.

And my second question is regarding integration of Westech. You mentioned previously, it will take some time. But will you be beefing our team at our end because they only had a sales team and major production was outsourced. So -- and their team consisted of seniors. So will we be beefing the team at our end?

No, no, no. We will not be using the team at our end. We'll be rebuilding the team there. So we are already -- we have already sanctioned recruitment of a few key people in marketing to go for faster growth. So we have to build the team in Westech, not in India, Indore.

And we want to put our team...

One or two people from our team may go there. But other than that, it is Westech team and we'll strengthen the team by recruiting best competent available wherever we feel we need.

And will you be retaining the Westech brand or it will be marketed under Jash?

Under Jash. Though will be -- I think formally Westech.

Normally known as Westech [indiscernible] we can put.

And you spoke about rupee depreciation benefit. Could you quantify the number?

I think there is a -- in our balance sheet, you can see the foreign exchange gain.

It's including realized and unrealized. But in real terms its around INR 4 crores to INR 5 crores.

It is around INR 4 crores to INR 5 crores in 9 months.

We will take the next question from [ Kunal ].

I just have two questions. One is, sir, I think in the last call, you mentioned that there was a client from Vietnam who was not taking the delivery of the order, so because of that. So how is the scenario in the Southeast Asian markets? I see some kind of growth decline. I think the guidance previously was about 15%. Now it's -- I mean I think this year, we'll close around 6%, 7% growth. Am I right?

Yes.

So how do we see this going ahead? Is that market also showing some signs of sluggish growth?

Every market, like whether it is Vietnam -- Vietnam, I'm glad to inform Vietnam material will be leaving in a week or so. But every market has gone through trouble once the tariff hit because tariff does not just -- it spoils the market confidence and market sentiments. And so everywhere things have slowed down, whether it is Vietnam or whether it's Hong Kong or it's Singapore, everywhere, some or other problem has occurred. And so subsequently, the tariff everywhere has come down, okay, except India, India has happened now. So things are now stabilizing and maybe we'll all be reconciling to the new tariff and planning our activities according to that.

Okay. And sir, just one question. So why have we like named the subsidiary Rodney Hunt Mahr in Saudi, is that name more -- like is it beneficial for us in some way? Why not Jash?

Because Jash, in Saudi language is Jash same as Jaish-E-Mohammed or et cetera, et cetera. So they do not allow me approval of that name. I was in Saudi Arabia for 3 days. I tried everything. Finally, I got these 2 names with the possibility that tomorrow, we will bring Jash also into this name.

We'll take our next question from [ Parikshit. ] We'll move on to the next. Sahil Doshi, please go ahead.

Sir, I just wanted to check in this 9 months, how much has been the exports to U.S. for us, just if you can quantify or maybe...

INR 35 crores only.

Okay. So the entire revenue booking essentially now would happen in Q4 is what...

It's not possible -- it's not possible because the material should have left and be in America by, I said, 20th of March, so that they reach the site by end of March. Otherwise, Deloitte will not allow in revenue.

Okay. So how much do we...

So the drop is coming because of that only.

Right, right. Understood. Understood. So how much do we possibly can cover up in Q4, sir if you just add...

If you see the presentation, we have said -- we have given the presentation in which we have said we will reach around INR 800 crores sale, for example. And then you can find out from there and Rodney Hunt, what can be.

Okay. Sure, sir. And just correspondingly, sir, we've seen a drop in our gross margins in the 9 months. Is that entirely because of the drop in U.S. sales?

Not because of the drop in U.S. sales. It is also because I paid tariff from my pocket. It is a cost.

Gross profit is not linked with the reduction in the revenue. It is directly related to the turnover. So it is variable cost. So it will not affect with the revenue up and down. Yes, it is a consumption.

Consumption and cost also. The cost has gone up because of the tariff.

Tariff is the addition for that.

And just lastly to check, sir, we had given our previous guidance was around INR 1,000-odd crores by FY '27, given the entire situation now globally, do we believe we should be in a decent footing to get strive for that?

Was it INR 1,000 crores or INR 950 crores -- INR 950 crores, INR 975 crores? So we are quite confident of INR 950 crores plus. Let's see how this 18% ratification is done when it is done. But I feel with all of these initiatives, which we have taken, we should be in striking distance of the same.

Yes. And there is good chance of the U.S. closure this year with $45 million to $50 million of opening order. [ Profit growth is ] December, but March closing will be better than the...

Let us not say anything, let us based on this, we'll forecast in April.

We'll take a follow-up question from Kunal.

Sir, we have almost spent INR 30 crores in the Westech deal. How much expected in the Penstocks?

INR 5 crores to INR 6 crores.

Okay. And sir, how much will be the total exports probably from India to U.S. on which the tariff will be applicable in what range at the end FY '26?

FY '26...

Yes. I mean, for this year, for this year. Sir, I think you said INR 25 crore worth of orders have been already dispatched. How much more -- because I think tariff is on that, right? I mean tariffs will be on the...

Yes. So total pending order on 1st April yes, total INR 35 crores we have already dispatched and INR 10 crores to INR 15 crores further in [indiscernible].

Okay. So 18% or 25% whatever would be on that INR 50 crore?

INR 25 crores as of today.

Maybe some time, INR 25 crores, some time INR 50 crores and now INR 30 crores -- sorry INR 25 crores. Up to March, this is INR 25 crores.

Okay. Sir, there is no like -- because I think last time when I had visited the factory, there was something like you would -- the orders that were not meant for the U.S. that would directly be showed to like, let's say, Canada or whatever -- whether or Rodney. So are there percentages of those orders executed as of this year, orders that were not meant for U.S. territory, but in Rodney Hunt's order book, which can be directly be exported to that land? Is that something that is possible?

No. Those orders -- see, when this tariff issue cropped up, all such orders dried up. Why would they place an order on an American company if their country is going to place reciprocal tariff on America. So as a result, there was a big mess for a few months, no one was willing to touch American products. Now I think still it is settling down and all countries are evaluating how to go ahead. Companies are also evaluating how to go ahead. And I think that only next year, we'll start that type of business coming back.

Thank you. That was the last question for today. There are a few questions on our chat box. Some of has been covered. This question is from Ravi Shankaran. What will be our product mix looks like 5 years from now on segment-wise?

No one can predict it because we are in projects and it varies from year-to-year. And this I have clearly explained even in our FAQ.

The next question is from Navani, how much revenue share are we expecting to get from Saudi Arabian market going forward?

See, in the beginning -- in the first year, we don't expect more than INR 20 crores, INR 25 crores, INR 30 crores. But slowly, slowly, we are expecting INR 100 core revenue from that company.

All the questions got covered. That was the last question, sir. I'll hand over to you for closing comments.

Whomever, we have not been able to reply to and they have given us a message on the chat. We'll come back to you with our answers later on. For the others, thank you for spending your valuable time and listening to us. And if you have any doubt or if you want any clarity, you can always write to us to Mr. Dharmendra Jain or to EY, and it would be our pleasure to reply to you. Thank you.

Thank you, everyone, for joining us today. If you have any additional questions, like Pratik sir said, you can reach out to us any time. We wish you a good health and look forward to seeing you again next quarter. Have a good day.

Thank you.

Thank you.