Krishna Defence and Allied Industries Limited (KRISHNADEF) Earnings Call Transcript & Summary

Ladies and gentlemen, I welcome you to the H1 FY '26 Post Earnings Conference Call of Krishna Defence & Allied Industries Limited. Today on the call from the management team, we have with us Mr. Ankur Shah, Managing Director; Mr. Piyush Patel, Chief Financial Officer. As a disclaimer, I would like to inform all of you that this call may contain forward-looking statements, which may involve risks and uncertainties. Also, a reminder that this call is being recorded. I would now request the management to run us through the investor presentation for the half year ended 30th September 2025 and the performance highlights for the quarter that went by, post which we'll open the floor for Q&A. Over to the management team.

Thank you, Kamlesh. Good evening, and a big welcome to the investor -- half yearly investor presentation for Krishna Defence. I'm Ankur Shah, the Managing Director of the company. I'm joined by my CFO, Mr. Piyush Patel. I will quickly run through the presentation that is there. Yes. Coming straight to the key highlights for the H1 FY '26, as we had earlier suggested that we will be doubling our capacity that is there. So, that facility is operational, was operational since early of April 2025, and we are working full-fledged on the same. Another landmark achievement during this half year was the steel plate cutting and the initiation of the AUV, the autonomous underwater vehicle. This is India's largest AUV that is under construction at our factory as per the naval design. In this -- during this time, we have also done successful trials of a very large casting to be used for a critical defense project that we are working on. We have also got the Bureau Veritas approval for the supply of shipbuilding steel sections, primarily the bulb bars, which can be used not only for the defense, but for other commercial ship applications around. I'm glad to share that we have now a large office building at our Halol factory that is there. We've constructed on top of it. So we have more place for the new engineers and the new team that we are going to be bringing in. And as we speak, the order book as on 30th of September stands about close to INR 196 crores. I give it on to Piyush bhai to just talk about the financial highlights for the first half year. Over to you, Piyush bhai.

Thank you, Mr. Ankur. I welcome you all to the earnings update conference call of the company for the H1 FY '26. These are the financial highlights for the H1 FY '26. Revenue of the company grew by 28.1% to INR 1,205 million. EBITDA of the company grew by 52.9% to INR 216 million. EBITDA margins have surged by 291 basis points to 17.9%. Net profit of the company on a stand-alone basis increased by 47.4% to INR 156 million, and net profit on consolidated basis increased by 71% to INR 184 million. Net profit margin on stand-alone basis have increased by 169 basis points to 13% and net profit margin on consolidated basis surged by 383 basis points to 15.3%. Coming to next slide. These are the financial overviews of operating revenue, EBITDA and net profit wherein we have shown the yearly and half yearly results just for your review. This shows the growth of the company. Coming to the next slide. This is the half yearly income statement for last three half years and two full years. Revenue from operations increased to INR 1,204.7 million in H1 FY '26 as against INR 1,008.2 million in H2 FY '25 and INR 940.4 million in H1 FY '25. EBITDA of the company increased to INR 216.2 million in H1 FY '26 as against INR 161.7 million in H2 FY '25 and INR 141.4 million in H1 FY'25. Now EBITDA margin increased to 17.9% in H1 FY '26 as against 16% in H2 FY '25 and 15% in H1 FY '25. Net profit of the company on standalone basis increased to INR 156.2 million in H1 FY '26 as against INR 113.2 million in H2 FY '25 and INR 106 million in H1 FY '25. Net profit margin on standalone basis increased to 13% in H1 FY '26 as against 11.2% in H2 FY '25 and 11.3% in H1 FY '25. Now net profit on consolidated basis increased to INR 183.8 million in H1 FY '26 as against INR 114.1 million in H2 FY '25 and INR 107.5 million in H1 FY '25. Now net profit margin on consolidated basis increased to 15.3% in H1 FY '26 as against 11.3% in H2 FY '25 and 11.4% in H1 FY '25. Thank you.

Just a second, Kamlesh, we just want to go forward with a few things, and then we can open the floor. Just to give you people the brief on the company, we are based or headquartered in Mumbai with our factory in Gujarat in Baroda, where it's in Halol, where we manufacture special steel -- shipbuilding steel sections called the bulb bar, which are used for construction of warships. The one on the left is the image. We are also supplying welding wires and weld consumables. These are used for the welding of the plates and some of the critical platforms that we are supplying for the Navy. Some of our other product range includes the special steel alloy ballast bricks, which is again used for underwater applications, armored steel profiles, which are used for the chassis for the T-90 tanks around and the improved space heating device or the Bukhari, as we call it, which is used by the Army at high altitude for them to balance. In addition, this is our clientele base. These are the products that we do for the dairy and the milk industry with the milk cans, milk cooling tanks around. 92% of our revenue in the first H1 has come from defense and about 8% has come from the dairy side. The way forward is we are developing further more weld consumables that are there, which some of them are still being imported. We are on the final stage of certification for that. We are adding a few hull structure, as I mentioned about the castings that is there and a few components that we are working right now is on the aerospace components. We are trying to augment and integrate a facility in such a way that we are able to increase the throughput and the efficiency. Approval for LRS and IRS is also on the cards. And for advanced underwater platforms, we are working and forming another joint venture to work on this because we see this as one of the important things, which is going to be a turning around for our company. We are working on those platforms and the related technologies towards that. And just to give you a recap, we have stake in a company called Conceptia, which is into ship and submarine design, which is a part -- which is our associate company, based out of Bangalore. And another company called Waveoptix, which is into defense electronics, mainly for mesh for optical fiber to radio frequency and so on and so forth, mainly for Army supplies and for underwater applications. So that's just a brief around what we are doing. I leave stop the screen sharing and then we can take up things for questions.

[Operator Instructions] We'll take the first question from the line of Harshil Solanki.

I have three questions. First is on the job work charges. In the FY '25 annual report, the number has gone up by 250% from INR 6.5 crores to INR 23 crores, but your revenue has only increased by 83%. Similarly, in H1 also, job work charges has doubled, whereas revenue has increased by 30% only. So if you can elaborate why the job work charges are so high and the increase is not in line with the revenue.

Job work charges are pertaining to the machining and other jobs that we are getting done outside. And don't look at it from the revenue because it is a very product-specific thing that we are working on, right? It's not that every product goes for job working around. So to relate it directly to the revenue perspective would not be the criteria. We are trying to make things in such a way that we are doing the critical processes in-house and which are very general processes like very basic machining, short blasting, painting, which are not critical processes we are trying to job work outside. So we don't have to augment asset and infrastructure for that, and all of this could be done outside. So that's the logic behind the job work part around. So that was -- if that is a satisfying answer for you, we can move to the next question.

Okay. There is a late delivery charge of INR 5.25 crores in FY '25. So -- if you can highlight what is the reason behind that?

Reason behind the late delivery. So the reduction has happened because of late delivery. We were -- we -- this predominantly is from one of the customers called MDL. We were first time doing a profile for them for the commercial application, and it took us some time to do the initial development. Mind you, it is about at the INR 80 crores, INR 84 crore order that this has been levied across that is there. So that is the reason. It took us some time to develop the profile that is there. And that is the reason the project got delayed and LD was levied on us. Kamlesh, we move to the next participant.

Sure. We'll take the next question from the line of Mr. Garvit Goyal.

Congrats for a good set of numbers. My question is on the order book. While we have executed and our execution is commendable, but it seems like we are facing some challenges in growing the order book, specifically looking at the 6 months and 12 months order book and comparing with the current one. So I'm just trying to understand like are you seeing any weakness in the order inflow or maybe we are losing the orders because of the rising competitive intensity. So what is the case? So can you put some color on that?

Yes. So there is no case firstly that we are losing out on orders or order flow is not coming. We -- I understand where you come from. What is the logic for you asking that question. So our order book stands about INR 196 crores as we speak on the 30th of September, right? Generally, all the action in the defense, a lot of the action happens in H2 or Q3, Q4 around that is there. Plus, we have tenders in pipeline to the tune of about INR 100 crores to INR 110 crores, which have yet not been converted or because not translated to PO as we speak right now. But we are not -- we are not worried on that. And we are, in fact, as I mentioned during the way ahead, we are trying to augment our capacity in such a way using automation so we can shorten the time process because we are seeing the demand continue to come. And in addition to the defense, now a lot of requirement is likely to come on the commercial shipbuilding front also. So we are gearing up for that demand to come through.

So what kind of number are you looking like? I understand out of this order book, we will be executing some part of it in H2, right, to achieve our guidance of 30% to 40%. So, my question is, what is giving you the confidence or the visibility when we enter into FY '27? So how are you looking at like how will you close FY '26, what number of order book?

I would not read too much on the order book. I would rather see on the execution front that is there, as I've maintained that we will be growing at that 30%, 40% CAGR that is there. We are very confident of achieving that. And that kind of order flow, we are definitely seeing because we know the platforms that the Navy is likely to build, the other requirement that is coming up. The Navy plans are a very 10-, 15-year plan. If you see -- if you read the news around, they've been talking about the LPD, the MCMV suit that is likely to come up, the corvette order is likely to get finalized. The frigates are likely to get finalized. So destroyer, all of that. So there are lots of plans that are there. Most of them are likely to start to mature now. So that is the reason why it is looking like that. But in terms of order flow, we don't see a slowdown at all coming through.

That's what I'm trying to understand, like you must be -- you are aware of all these programs that you mentioned, right? So we must be able to understand like maybe a tentative number, like what kind of order inflow do we expect in H2, right? So that can give us some visibility into at least FY '27?

So very difficult to predict how much will be the exact order flow that will come in H2 that is there. But that number should be in the range of about close to INR 100 crores to INR 150 crores. That is what we anticipate.

Understood, sir. Are you seeing any rising competitive intensity for maybe for our hero products or anything like that?

Nothing as we speak right now, no. We don't see any because of -- currently, only two players are approved for the supply of the same to the Navy front, and that continues to play.

We'll take the next question from the line of Ashish Soni.

Sir, in terms of this maritime policy, so which all units do you think will start getting orders for you in next one or two years? Because it's a big vision for India for next five years. So just give a walk through what you are thinking right now.

Great question around. And there's a lot of excitement not only at the shipbuilding front, but also from the government side to the fact that even the PMO is monitoring the shipbuilding infra that they want to build up around. But let me tell you, these are all long-term projects that will take time to translate by the thing. But we are part of the entire ecosystem that is there. We've been talking to stakeholders. They've been talking to us. So everyone is gearing up for it, but it is not going to happen tomorrow, right? It is going to take some time to percolate down. But definitely, that is the way forward. That is how I would put it.

But in terms of your units, I think your -- one of the units, Conceptia is doing commercial shipbuilding. So do you think it can start getting orders from next year sort of thing? Just give broad perspective of different units, do you think like which year because I know it will be lumpy, it will be long-term game. So just I wanted -- because capabilities-wise, I think you have developed a lot of good capabilities to capture all this. So I'm trying to understand how you're thinking in terms of which year, which can come, just a broad perspective. I know it will be lumpy and all. So just that's the understanding I wanted to get.

Why only Conceptia, right? If Conceptia, definitely, you are right, that is the first one that will get -- that will start to get the back the orders that is there is because of the design concept that is there and the various commercial kind of ships that is coming through. I believe we are already in talks with a few shipyards and inquiries have started to come through. We see them materializing maybe by the end of this year or early next year. That's the way we are looking at it. And parallelly, we are also looking that they will be requiring the shipbuilding sections, we have weld consumables that we are manufacturing. Those will also start to come into place. My only challenge here is to put a number to that thing will be very difficult. Talks have started. We see actions starting maybe, say, at least for us, maybe early next year and for Conceptia late this year.

So do you think the inflection point in FY '28 for your business overall for all units to fire if -- and the margins, is it sustainable the current margin? Because you gave a commentary that you'll increase margins of 15% to 20% over a period of time. So do you think FY '28 can be an inflection year and margins?

Yes, we hope so. We hope so. We are seeing a lot of action being built around these things, a lot of action being built around. Now the action is being built around. It will take time. These are all large infra projects that is there. We see that, that could be a very different year because we have the other products, we should be ready with the AUV platform, trials would have been done. We would see all those things. So, for us, that would be a very, very crucial year. You're spot on with that assessment.

And AUV, you spoke about joint ventures. Can you throw some light what exactly you're planning or talking about the joint ventures, please?

Yes. So, again, AUV is a complex platform. It's like it's an unmanned sub that is there. So it will have your hull structures, it will have your propellers, it will have the powering device, it will have the autonomy. Several factors have to come in. So we single-handedly don't have the capacity to do it. We need to partner with companies that have expertise in these areas, and that is how we are working on it. For different platforms, we are partnering with different people. Because think of it like you also have to make a 3-story building, you also have to make a 30-story building. So we are choosing the right partner for the right kind of platform, and that is how we are working towards it.

And margin front, can you just answer on that because margins have expanded quite a bit in this quarter. So do you think the margin was maintained or it will have some fluctuation for next one or two years?

No, I see that we should be able to maintain these that is there, and we will work towards improving them. Again, to put a number, very difficult, but we will try to economize and make ourselves more efficient. That is the way we will be able to add to the bottom line.

[Operator Instructions] We'll take the next question from the line of Shikha Mehta.

Congratulations on a great set of numbers. I just want to understand the margin a little better since we've seen a decent improvement. So can you just highlight on what has led to that margin improvement?

A couple of factors that have led to the margin improvement around this. One is we've been -- the operational leverage has kicked in since the numbers have increased that is there. The fixed cost gets divided over that -- over the larger number of quantities. So that is something that has helped in. Plus, we've tried to become more efficient, increase the yield of the product that we were getting earlier because we were doing smaller numbers then the more numbers that you do, your yield becomes better. So all these two, three factors together have contributed to the margins that we are seeing right now.

So it's mainly on the efficiency and production side and not as much on the product mix side, right?

No, no, no. More on the efficiency and the productivity side.

Got it. And another thing I wanted to understand was if you can go into your other products other than your bulb bar and explain the kind of growth we're expecting to see or the addressable market we're expecting to see in the next, say, two to three years?

Again, for the weld consumables, it will move in the same trajectory at that 30-odd percent, 40% at odd growth that is there...

But are we seeing acceptance currently, even for...

Yes, yes, yes.

Even for changing up old ships? Or is it just...

Not old ships. These are for the new construction.

Sorry, sorry, I meant on the doors and hatches. Are we seeing...

No. So, doors hatches, so I was trying to refer to the weld consumable business and other products that is there. At the composite door hatches front that is there, first, the newer ships is something that is the target for the Navy internally. And then it will move on to the replacement or what they have to do in a phase-wise manner. So that is how we see it. Not a very defined way right now because the product is just about to get inducted right now. So not a very clear plan. But if you look at the 10-year horizon, we definitely see that almost every ship will have these doors.

Got it. So, broadly on even all these categories, which are not per se a hero product, we're currently seeing 30% to 40% growth.

Yes, yes.

Broadly that, right?

Broadly. That's why it's a range that is there. Some will grow by 25%, some will go by 45%. So you see an average come in the range of 30% to 40%.

We'll take the next question from the line of Santosh. Santosh we cannot hear you. I think we'll move to the next participant. We'll take the question from Mr. Karan Singh.

Great set of numbers. Great teamwork and everything was fantastic. I have a few questions. Like first one is like when are we going to list in main board? Any update on that?

So, Mr. Karan, we have already done our bit of application that is required to the exchange that is there, and we are waiting for their -- the next step from their side. But I believe if fingers crossed, everything goes well by December, we should see ourselves on the main board. That's how we see it, maybe December -- early in December or something. But again, these are things that is not in our hand. Exchange has to give an approval. We're not seeing any red flags or any major remarks so far.

Yes. And we have a partnership that we are building, right, with VABO, if I'm not wrong. When are we going to start manufacturing? Is there any time line that we're going to start with manufacturing?

So we have started with the manufacturing already that is there. But again, these are still at very trial stage. We are making prototypes around it. But -- so to answer your question, we've started to manufacture already.

And are we going to like manufacture in our same location? Or are we building some other factory?

We have space in our factory to accommodate this kind of manufacturing unit. So we will be doing within our premises.

And if I would want to know more about our total addressable market size, incomplete right now, what would be our TAM in general for all our products that we are already doing work with? Any round figure that you could give?

[Foreign Language] you will come to what the growth is there. That's why I've always maintained that is that we'll continue to grow with our revenue in the range of 30%, 40% that is there. So the addressable market exists that is there. And hence, we can confidently say this kind of growth that is what we see for ourselves.

And last question. Can you throw some light on underwater platforms that we are like kind of developing? And do we have anything substantial on that for approval or something right now?

Yes. So, currently, we are building one. This is a full-scale prototype that we are building. This is probably India's largest built -- being built right now. And we are glad that we are one of the chosen partners by the Navy to work on these kind of things. And as you know, going forward, technology, AUVs, drones are going to be the future. And we are very glad that we are right there at the pivot point to take this forward because we are in the midst of this technology, and we are working towards that. So we're not going to be laggard there. We are right there talking to the right stakeholders, right partners for building this product, which is a future technology to come through.

Are we working on something related to drones or only with Navy and underwater we're working. Anything related to drones?

No. So, currently, we are not working anything with aerial drones.

Karan, I would request you...

Just one second. It's not a question, but I really like the way our company has executed. It's really commendable on your team and everyone. And I hope the best for the future for every one of us.

Thank you, Karan ji. Thank you. I appreciate.

We'll take the question from Jayesh Gandhi.

This is Bharat from Dalal & Broacha. I just had a couple of questions. What would...

Jayesh, can you be a bit louder? I can't -- at least I can't hear you clearly.

So I just wanted to know the breakup for our defense products for this H1.

Yes. So breakup, just -- I'll give it in a percentage norm that is there, about 65% to 70% is towards bulb bars, about 15% is towards weld consumables and the balance is towards the HBF profiles that is there, about 20-odd percent.

Got it, sir. Got it. And sir, I just want to understand that H1, our order book, has our execution slowed down a little bit by any chance? Because typically, we used to execute about 45% to 50% of our order book. It's come down to about 40%. So...

Jayesh, order book is not -- revenue is not a function of order book, no. We have -- production is a function of what we deliver. This is the -- this H1, we have delivered our largest revenue so far at about INR 120-odd crores, right? So there's no slowdown in production.

Got it, sir. Got it. And on our -- just I wanted to understand on the gross margins, there's been a 500 bps approx improvement. So you mentioned earlier that it's majorly due to efficiencies and so on. So there's been no product mix change as such.

There's not been what?

There's no product mix change as such because the 500 bps expansion is pretty significant.

Because the numbers have increased quite a bit that is there, specifically for bulb bars. So you keep doing the same thing again, you become more efficient that is there. We were fortunate enough to get similar size orders for large quantities, which helped us become more efficient and increase the better yield that is there. So that is what this has translated to.

Got it, sir. Got it. And sir, could you help me with what our revenue potential? And when would our revenue start to come in for the Jalkapi, Jalkapi mission? Is there any time line that you can suggest?

So we have to put this -- put her in water by December of 2026 that is there. Honestly, Jayesh, this is more of a technical project than a commercial project, right? So we are -- there are several challenges in this. Commerce is the last thing that we are thinking right now. First, this has to, a, work, perform as per what the standard or the required parameters are. That's what the bigger focus on this is right now. But to answer in terms of finance, this all is only about FY '27 that you will see the action.

Got it, sir. Got it. So we shouldn't right now currently bake in any huge sum of revenue from it, right?

No, no, no.

Jayesh, I would ask please join the queue. We'll take the next question from the line of Ajinkya Yadav.

Congratulations on great set of numbers, Ankur ji. My question is regarding this autonomous underwater vehicle only is that I wanted to know like there is a program like AMCA which is going in for air defense. So we are working similarly on this AUV program. So are there any other players who are selected by the Navy who are working in parallel with us for the same program and the time line for the same, any amount of a grant given by the Navy for this program?

So we are working with other partners, as I mentioned, because we do not have all the technical capabilities that is there. We do not have expertise or specialization in terms of autonomy. We don't have towards propeller or the power systems around or the sensors. So we have to collaborate and partner with other companies around this to be able to build this complete platform, to build this complete platform around. And currently, in India, how many people are working on the AUV, there are two or three companies like the L&Ts and Adani Defense and MDL, they are working on it. But all of them are working at different, different platforms, right? So the size of the platform is different for different programs that are there. And for the last part of the question about to give any grant, there is no grant currently. It's a prototype, full-scale prototype that is being built.

Yes. And the follow-up on this will be like let us say, we will be successful in building this prototype. So is there any binding, you can say, agreement in between us and Navy that the orders will follow to us?

Yes, there's no binding agreement that is there, but there is a commitment to place further orders.

We'll take the next question from the line of Anil Gow.

Firstly, congratulations on the good numbers. So I would just like some clarification on the CapEx growth guidance for the next two, to three years. And I just had -- I wanted clarification on why are our fixed assets not improving much compared to the scale of revenue because like the assets have gone from INR 11 crores to INR 12-odd crores, I think, to INR 22 crores in the past two years. So any clarification on that would be appreciated.

So we've done our capacity expansion, and it is still undergoing a few [indiscernible] some few things that we are adding on the core of journey that is there. So, again, to put a number, we look at about every year, we'll be adding anywhere from about INR 5 crores to INR 10 crores that is there in terms of CapEx, not specifically for improvement or line that is it, but becoming more efficient and introducing better manufacturing practices around it. The fixed asset question, I will leave it to Piyush bhai to answer that question around.

As mentioned by Ankur bhai, our -- as you mentioned, fixed investment in machineries is currently around INR 22 crores and around INR 3.5 crores is under the capital [indiscernible]. And as mentioned Ankur bhai, we are planning to add INR 5 crores to INR 10 crores every year. So -- and our machineries are product specific and specialized setups for the products. So we need not require to add more on front of our investment in terms of the fixed assets. So, with the existing capacity, we can even able to manufacture up to INR 200 crores.

Also, sir, like do you think we'll be expanding our product portfolio as well like adding more products along the same lines?

Yes, definitely. If you see our business highlight that is there, we are trying to work on a few castings and a few other products that go for the naval applications. So that is definitely on the cards. We have to grow our product portfolio. There is no, we will not grow. That definitely is on the cards, and we are working towards it.

We'll take the next question from the line of Karthik Bhat.

My question was on the opportunities in commercial shipbuilding actually. So, currently in our order book, do we have meaningful orders coming from this segment? And with synergies coming in from Conceptia, how are we placed? I know if you can share some numbers as to what percentage of order book can this contribute in the coming years? And is it in domestic? Or are we seeing potential in exports also from this segment?

Great question. So, in the current order book, we have some for the shipbuilding apart from defense. But how do you categorize the commercial or not? See, Coast Guard is not part of defense. It comes from the Ministry of Home Affairs. So we have supplied a few of our products, which goes into building of ships for the Coast Guard that is there. So whether you categorize a nondefense or not, I don't know, but that's how it is. Secondly, we have also supplied to Cochin Shipyard for a platform that they're building, which is actually going for export. So, it is not export from us, but we give it to them and the vessel that they prepare is being exported. So that is how the breakup of what we have been. And this has all just started in the last 12 months. We've seen this activity slowly, slowly start and pick up. So that's how it is.

Okay. Okay. And are we -- okay, got it. Got it. And on the VABO, you had mentioned in the previous call about certain tests which are happening. So are we likely to see some revenue in FY '27? Any color on that? I mean...

Yes, we will surely see revenues by FY '27 on that. That's what I had said. So we've started the manufacturing activity, all the trials and all are going well so far, and we are almost at the final stages of approval. So we should see some revenues on the same by FY '27.

Okay. Okay. And what sort of utilization levels have we achieved with the new capacity? I think it was around 55% or so when we -- during the last call in May.

So, during the last call in May, it was very high because capacity expansion had just started in -- the capacity expansion was completed just in the month of April that is there. So, until March, we were running at almost 100% or some level that is there. Now we are at a normal level about close to 60% capacity utilization.

Okay. Can I go ahead with one question or should I fall back in the queue?

It's better. Please you fall back in the queue because there are still people. We'll take the next question from the line of Jayesh Shah.

Ankur bhai, congratulations on good set of numbers and I think more importantly, maintaining the health of balance sheet. I have a couple of questions. So you mentioned in your presentation as well as you mentioned right now that you're developing some large castings for defense projects. So that is also a naval application? Or is it for something else?

No, it's for a naval application. It's for a naval application. I would be restricted to talk too much on that.

No worries.

But it's for a naval application that is there. Currently, the same is being imported. So there is a scope to indigenize the same.

Okay. So does this thing has a potential as large as the bulb bars or the ballast that we are manufacturing?

This product per se, not, but this [Foreign Language] there is a specific product is there, not for this particular product, but it helps us create a category, right? It helps us create a category where there are lots of products that will start to fall into place, and we would be able to start to do them, right? But again, Jayesh bhai, all these things take time. It's not that from tomorrow, it will start to flow something. It's something that you do build up, right? You start with a small casting of 400, 500 kgs, then you build 800, then you build a 1,200, you go up to 5 tonnes. So that's where the scope of the work is.