Krystal Integrated Services Limited (KRYSTAL) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Krystal Integrated Services Limited Q4 and FY '25 Earnings Conference Call hosted by Adfactors PR. [Operator Instructions] Please note that this conference is being recorded. This conference may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on the date of this call. The statements are not the guarantee of future performance and involves risks and uncertainties that are difficult to predict. I now hand the conference over to Mr. Sanjay Dighe, CEO and Whole-Time Director of the company for Krystal Integrated Services Limited. Thank you, and over to you, sir.

Good afternoon, everyone. I would like to wish all of you a warm welcome to Krystal Integrated Services Limited's earnings conference call for the fourth quarter and full year ended 31st March 2025. I would like to begin this session by expressing my gratitude to all of you for taking time out to join us today. We have on call with us my colleague, Mr. Barun Dey, who is our Chief Financial Officer; and Adfactors and the team led by Savli. It gives me great pleasure to address you all today as we stand at the cusp of a spectacular growth journey. Since this is only our third conference call, I would like to share a brief overview of Krystal before we get into the recent developments and business and financial performance. A brief background for the people who are new or otherwise also because it's been quite some time. Krystal is among the leading and the fastest-growing, well-diversified services provider in the integrated facility management space. Predominantly the services offered are staffing solutions, security services, catering services and staffing catering services. So these are the 4 verticals that we've been operating all these years. Over the years, we have also strived to become a one-stop shop for all our services, which reflects in our diversified service offerings. This was complemented by our endeavor to develop a nationwide footprint in terms of our customers, our offices and the locations that we service for our customers. Over the years, we have built a very strong team of skilled workforce, a robust and marquee customer base and obviously, a very good quality of Line 1 and Line 2 managers, which are a senior team and their team leaders. So today, we are in 4 key domains that I explained in the earlier. Integrated facility management, which encompasses housekeeping, sanitization, washroom hygiene, gardening, pest control, facade cleaning and various other services that any infrastructure requires to keep it up and running. The second portfolio is private security and van guarding. The third is staffing solutions and payroll management. And the fourth is catering, which comprises of providing food and beverage services through some good -- through our corporate kitchen in Mumbai and servicing some of the good corporates here in Mumbai. Now touching upon some key developments. The year gone by has been particularly very, very eventful for us, marked with several major milestones. Recently, we forayed into the rapidly growing wastewater management and affluent treatment segment. The company has prior experience in executing turnkey projects way back in 2016 and had built a very good team since then. But this year, the company is focused independently on growing this segment because there is a huge scope here for growth. We have already hired a team of 20 talented members who understand the technical -- the technology and the engineering part of it. Also, some are specialized into the ZLD process, which is zero liquid discharge. Today, the team comprises of professionals from various industrial development corporations and other private sectors as well, which work in this domain. We already had embarked on the solid waste management services, where we have been doing solid waste management for Thane Municipal Corporation. But here, as completing our portfolio as a whole as a waste management, we have now pushed the pedal on water waste management as well. So in totality, our waste management division has now over 200 experienced people in field. And we are very, very upbeat on growing this portfolio in this coming financial year. Two other new avenues that we have diversified along with this wastewater management is technical facility management. Technical facility management used to be one odd service that we used to offer in our integrated facility management portfolio. But because of the demand for the services, because of the market that these services have, we have carved out this vertical as an independent technical facility management vertical. And the way we are very, very upbeat on the wastewater management, we have a very planned growth strategy for the technical facility management vertical also. The second new vertical that we have set as a 100% subsidiary is our B2C line of work. Taskmasters is the name of this subsidiary. And we will be offering this B2C services, which I will delve upon a little later and explain to you. Technical facility management will encompass specialized services requiring very higher skilled skill sets and is expected to be more profitable in the long run. This also aligns with our strategy to upskill our services portfolio. Services here in encompass MEP, which is mechanical, electrical plumbing, HVAC and AHU maintenance, DG set maintenance and various other equipment that is put and installed in any infrastructure, which requires maintenance. Taskmaster is what I just touched upon, it's Taskmaster Private Limited. This is a 100% subsidiary, as I explained to you, which is going to provide deep cleaning services and everything -- and all other services that are required by the residential sector, homes, Bungalows, villas and other residential sectors. This is our B2C offering. We've been thinking about doing this for quite some time, and we think this year, it's a good year for us to push this B2C product in the market. Today, thanks to our diversified range of services, not only are we able to cater to almost all the major industries, but more importantly, strengthen our business model and offerings. Broadly speaking, some of the key sectors where we are present include health care, education, city infrastructure, which covers airports, railways, metros, manufacturing units, retail outlets, entertainment hubs, and so on and so forth. We are present in almost all verticals through either a stand-alone service offering or bundled services. Our clientele is spread across government organizations as well as corporates across the length and breadth of the nation. It is heartening to say that Krystal's brand value is backed by our most valuable asset, our people on the field. We have 43,300-plus on-site workforce who are our brand ambassadors. Through our pan-India footprint of 26 branches, the number of customers and locations that we cater to have increased to 461 customers and 3,209 locations across the country during this year. Our quality and consistency of service delivery has won us the trust and faith of our clients, which reflects in an industry level of contract renewals. In fact, our top 3 customers have been with us since over a decade. We were also awarded by the Economic Times this year as the "Best Service Delivery Company of the Year" for financial year '24-'25. So I'm very happy to share this news with you. Coming to some key recent orders, contracts. These are indeed exciting times for us at Krystal. Throughout the last financial year, we were able to grow our order book and acquire new customers at a much higher rate than the previous year. In financial year 2025, we acquired 139 new customers, which is a very, very good performance on a national level. And I'm very happy that our sales team and business acquisitions team are engaged on a daily basis, on a weekly basis to make these things happen. This was vis-a-vis the 76 new clients we acquired in financial year 2024. So we have nearly doubled our rate of customer acquisition this year. The contracts we won during this year cover a wide range of sectors from airports and metro stations to hospitals, retail establishments and other manufacturing sites including pharma companies, thereby expanding our portfolio of clients, both in the government and the private sector. To just name a few recent noteworthy contracts win over the last quarter, we secured a INR 349 crore facility management contract from Tamil Nadu Medical Services, a security services contract from SVC Cooperative Bank, which is a Shamrao Vithal Cooperative Bank for managing their pan-India security requirements. We got the staffing contract for Mumbai Monorail stations and INR 84 crores worth of sanitization service order as PGIMER, which is one of the very prominent hospitals in Chandigarh. We further expanded our presence in airports providing bundled services at the Chandigarh Airport, Chennai International Airport and Trivandrum Airports. So these are very, very noteworthy achievements that we have done in the last quarter of the financial year gone by. As I mentioned earlier, a significant milestone achievement was our entry into the wastewater and affluent treatment space, which was through our contract with TPPA, which is a industrial zone in Chennai, which is called as Tindivanam Industrial area. This contract marked our foray into wastewater management and affluent treatment, which is an exciting new vertical for us. We see tremendous growth opportunities here, and Krystal is well-positioned to capitalize on these by leveraging its strengths. This comes as a natural follow-up to our previous foray into waste management, as I told you, and I mentioned already the Thane Municipal Corporation. So these are strategic in nature such that we get prequalification in this space so that in the future, we are ready for much larger projects or projects which are midsized but have a national presence and are very, very marquee in terms of its margin profile. Further, we secured the 3-year INR 167 crore facility management contract and a 5-year INR 134 crore staffing and payroll management contract from the Director of Medical Education and Research Center, Maharashtra. Other wins during the earlier half of this fiscal include 1 with BRFL Textiles, a contract extension in Chennai by the Director Head of Medical Education and Research for Housekeeping and Security, and staffing for Nicomac Taikisha Hyderabad plant. On another note, our participation with the Vishnu Prasad Research Center earlier in the year marks a new chapter in innovation. We will be commercializing this patented bio enzyme technology for solid waste management, which is a high-margin, eco-friendly service in our portfolio. All these developments demonstrate our ability to scale across diverse verticals, and we see immense opportunities in all of them going ahead. An important aspect of our strategy is to harness innovation, science and technology and diversify and evolve into an end-to-end service provider offering technologically innovative services. While doing so, our focus shall always remain on delivering sustainable value for our stakeholders. I think now I would like to hand over to Mr. Barun, our CFO, to take us through our financial performance. Thank you very much.

Good afternoon. Now I will first tell you the fourth quarter Q4 FY '25 results. We reported INR 4,13.10 crores in revenue during Q4 FY '25, a 41.39% year-on-year rise. Growth was primarily driven by several new contracts owned and executed during the period, coupled with an increase in our average billing per contract. Our EBITDA, excluding the other income for the quarter stands INR 26.75 crores, growing 42.28% year-on-year. EBITDA margin improved by 4 basis points to 6.48%. Cost efficiency in terms of material cost helped offset higher investment in skilled talent, thereby benefiting the margins. Our PAT during this quarter is INR 16.91 crores as against INR 15.74 crore in the fourth quarter of FY '24. PAT margin stood at 4.09%. Earnings per share for the quarter is INR 12.12. Coming to our annual FY '25 numbers. Our revenue for FY'25 came at INR 1,212.78 crores, an 18.11% year-on-year rise. The new order across our service portfolio and higher average billing helped increase top line. Our EBITDA, excluding other income for the year stood at INR 77.71 crores, up by 13.15% year-on-year. EBITDA margin is 6.41%. Investment made towards strengthening our talent pool, coupled with investments in new ventures had a bearing on the margin. Our PAT during the period is INR 62.33 crores as against INR 9.03 crores in FY '24, up by 27% PAT margin stood at 5.14%, up by 37 basis points. Earnings per share for the period is INR 44.61. The Board of Directors has recommended a final dividend of INR 1.50 per equity share of face value of INR 10 for the financial year '25, subject to approval of shareholders. This is all from our side. We can now open the floor for questions.

Hello, I hope I'm audible.

Yes, you're audible.

So regarding this Tamil Nadu contract, I think could you please clarify that. So earlier also, we are having contract over there. I think there was some retendering it is awarded to some other player and we challenged that in court and I think we lost that one something like that. So this INR 380 crores -- INR 348 crores contract is just extension to that one or it is new area? And can we expect any further orders from this Tamil Nadu Medical Corporation?

Now, this is a new contract. This is not an extension. And this is a new contract for 3 years.

Yes. But earlier also, we are doing work over there, and the contract was extended till like into December. So I think -- is it of the same area, or it is a new geography, and what happens to that contract if it is...

No, no. So that contract, it is the same contract. It is a rendering of the same contract. It is the same geography for the Tamil Nadu district hospitals across the 4 zones. There was a rebidding which was done because the earlier bids were -- the government of Tamil Nadu decided to in the contract and rebid it. So there are different companies which have submitted the bid across the 4 zones. It was a competitive bidding. But as we all know by now, Krystal is very, very focused on the margins. And now that we are listed, we are more responsible. Our responsibility is to give good returns to our stakeholders as well. So, we as a policy, do not bid for tenders just for the sake of it unless and until we see value. So here, though it is the same tender, and earlier we were billing higher values. We have submitted -- we had bid in our own way in our own prudence for all 4 sectors, keeping in mind our responsibilities. We got sector here based on our rates. So therefore, the contract is the same, but we now will be servicing 1 zone earlier that we were servicing 3 zones. And we are happy here that we have got this opportunity to participate in this tender with the Tamil Nadu government. We are very, very experienced here in the Tamil Nadu government, and we have been servicing this contract for many years now, earlier tenure also. So we are very happy to be keeping our association going for the next 3-year tenure as well.

That's very good. I think there is no further scope to grab anything from Tamil Nadu, right?

No, see, Tamil Nadu is a very, very good state. It also has good programs. And they are also very forward-thinking state. We have a very good presence in terms of our office and infrastructure in Tamil Nadu. And our tender team also is distributed zone-wise. So we have a very active tender team focused on various other business opportunities in Tamil Nadu. So yes, we have our eyes open there, our evaluation there. So whenever we feel there is a good opportunity where we are able to add value to the government through a proper financial assessment of these tenders, we will be happy to submit our bids. So it is a very good market, and we have good presence there. We will always keep our eyes open and see what is there in store for us.

Regarding the contract wins from Airport Authority of India, I think the airports which are we win almost are managed by Airport Authority of India. So, do we see that we have scope and any discussion with the private airports, which are large airports like Hyderabad, Mumbai, Delhi? So, do you see any scope? And what could be the margins in this segment as compared to other segments?

See, Mr. Bala, our presence in airport has been there since the year 2006, 2007. So we are one of the most experienced players when it comes to managing of airport terminals. And we are participating. We have the experience of working with GMR, GVK also and now the Adani Airport also. We are, anyway offering our services at the Mumbai International Airport, the international terminal. But why we are pursuing our business with the private players, we are also not forgetting the Airport Authority of India terminals, because they have more than 100 terminals nationally, and that is also a good footprint that we plan to have in our portfolio. So therefore, we bid for both the private airport business as well as the government airport business.

So on margin front, could you comment on how big the margin is?

I will not be able to comment on the margin because it's a little price-sensitive issue. But as you know, we get into businesses to ensure that we add value to the organization and to our investors as well. And at the same side, we are very prudent as to when we acquire business, what kind of qualification criteria it will build for us in the long run. So these are 2 areas that we are very mindful. So I will not be able to disclose specifically. But please be rest assured that when we are entering into businesses, it is keeping at the end of the day, the entire value proposition in mind.

Sorry to interrupt you, sir, but I would like to request you to rejoin the question queue. [Operator Instructions] Question is from the line of [Technical Difficulty]

Congratulations on a good set of numbers, sir. Just 2 questions from my end. Sir, just wanted to understand the potential of the new businesses that we started, water waste management, what are the kind of contracts we can probably bid for? And the Taskmaster, how many cities have we kind of launched in? And by when do we expect some kind of revenue to start coming in from here as well?

Good questions to both. I'll answer the first question. Now, the waste water management, this is a very, very big opportunity. It is a big area. And also this has a combination of both the angles. A lot of MIDCs, which have set up their plants even under the Make in India or which were existing, there are the affluent treatment plants or CETP, they are somewhere they are owned by the government and somewhere they are proposing that the manufacturing units themselves put that to meet with the green and environment-friendly requirements set by the global and government standards. Now, if you see today, the manufacturing this thing in India has a lot of multinational also Indian companies. So there are a lot of environmental compulsions. So therefore, this CETP, ETP managing the wastewater is very, very crucial. There are other players who may be doing that. We are focusing on a sector wherein we will do 2 to 5 MLD kind of projects, which are midsized projects, small projects, but marquee projects. And also, the turnaround of project completion cycle is going to be faster. So we are very specifically got into this kind of segment, and we have put up a very good team that I said in my opening remarks here. Also, because it is project-based, it also has a built-in operations and maintenance for the 2- to 3-year tenure. So you have a pipeline also of business. And importantly, also, it has a much better margin profile than our existing business that we are doing. So, in combination, it is a good sector to be in. Anyway, we have offices nationally 26 offices. So our reach in these MIDCs is already there. We are not doing anything new to go and approach that. We also have our industrial corridor offices where we are anyway giving services and various type of services through our IFMS staffing payroll. So it is the same geography. We already have the team. We already have our establishments there. So there is no cost for us of going and entering, and acquiring this kind of business. It is just a very wise thing for us to extend this nationally. And we have tasted success in Tamil Nadu, which is the first one. And then nationally, we are already our sales team, which is independent for this vertical, is already in talks to several MIDCs while we are talking. Secondly, the Taskmaster Private Limited is a B2C. We have put a team for this B2C. Anyway, we used to do a couple of high rises in terms of buildings or townships, but we never extended our services inside the home. It used to be always outside the home in a public area. But now we have consciously set up a new team. This is a good market. There are other players, which all of us know who are already doing that. But they are doing everything. We are just focusing on the business that we know well, which is infrastructure management. All our competencies, we are extending it to the residential sector. Two upside here is we have our own training academy at Vashi. We have a national training program. We have training curriculums. We have -- our training division is led by some prominent defense personnel. So when somebody goes to an apartment, there are 2 things. One is a backup of a 25-year-old company, which is into this and not just an aggregator. Second is they can be -- the training can be guaranteed. And because we have a mechanism of evaluation of the hiring people, which is a very standard norm while we are providing our services to our customers, the resident can be very sure that they are already security check done when they are coming into your house. So a very focused approach. Expectation from a resident or a family is a much superior quality of services, security check done of the people who are deployed there in their homes. And thirdly, well-trained, well quality and a knowledge backup of training of a 25-year-old company. So all our experience, we want to bundle and get it through to your residents. We are doing it through -- we have small e-rickshaws that we have, and we will -- they are custom-made to carry our vacuum cleaners and other machines, and they will come over to your doorstep and do this. You asked me in terms of geography. Currently, we have started this in Mumbai itself. We plan to expand this into Mumbai in the various suburbs in the western suburb in the town side, et cetera, and then slowly move towards Alibag. We have some customers there who have very, very good villas and open that holiday home and villa and luxury villa space there and then in Goa. This year, we want to establish this in these 3 sectors. And then obviously, because we have a pan-India metro present, we aspire to offer these services in all the metros. But this year, we will be in these 3 geographies. You asked me if the billing has started coming in, yes, I'm very happy to say that the billing is already happening now on a daily basis. And we are doing other things like the digital and all those things are under construction. And you can -- people can book our services and start Gpaying us. It's a cash business. So it's a cash on delivery kind of a business. So we are very, very bullish on this vertical as well. As our 100% subsidiary, this will add very good value to our consolidated numbers going forward.

Sure, sir. That's very helpful. Sir, just one last question from my end. Our trade receivables have seen a sharp increase. Any particular reason there?

I didn't get it. Can you ask me again?

Our trade receivables have gone up quite sharply. Any particular reason?

Yes, because we've gotten into many new contracts in the last year, also in the last quarter 3 and quarter 4. So while these businesses -- we start this business, the entire process of documentation, billing takes a little time, and one has to give that for both parties to understand. So therefore, you have -- you are seeing a little variance in these numbers. But over a quarter, they get streamlined because the entire process gets streamlined. So on quarter -- because every quarter, we will add new business. So if you add 1 or 2 very big businesses or like we've added the hospital here and all those things. So therefore, you see this kind of variance. But over the quarter, these numbers get streamlined once we understand the processes.

The next question is from the line of Deepak Poddar from Sapphire Capital.

Am I audible, sir?

Yes.

Sir, just wanted to understand, first up, on what sort of growth we are looking at for this year FY'26 and something on the sustainability of this fourth quarter performance? I mean, how do you see that?

Yes. We have -- I mean, the way that even I have explained to you in a very transparent manner, we are very, very well geared to continue the same growth trajectory, the way that we have -- so we will definitely maintain our growth because we have that kind of team. We have a very healthy pipeline, and our prospects look very, very good. So we will continue this. And the Q4 performance also, we will obviously keep on performing quarter-on-quarter because our work goes on, on a daily basis. So the process of business acquisition, evaluation it just doesn't stop. So we will continue the growth, Deepak, the way that we have grown. And we will also continue the growth in the last quarter that we have done.

So sir any range we are looking at, I mean, in terms of for this year as a whole, FY'26, I mean, I think in fourth quarter, we grew by about 40%, right? But on an annual basis, we grew by about 18%, 19%. So, what is the growth range one should look at?

You should expect us to be somewhere in that zone only. I mean the aspiration for any company is to do better only. So there is nothing stopping us from doing better. But to be very realistic on the call that I'm doing to you and the expectations, we will continue the way that we have grown.

I mean 18%-20% is what we are targeting?

We will continue the way we have grown.

Okay. We'll continue the way. And any fundraise also we are planning?

We've already taken Board's approval in the last Board meeting for fundraise for INR 300 crores for our various projects. But of course, in the current scenario, we were not able to do that. So we have -- now we've just finished our Q4, and we are into this call. So we have already an approval which we have got. Once we finish the formalities of closure of this financial year, then we will sit and we will figure out how we are going to go about it. And obviously, everybody will come to know.

The next question is from the line of Rushil from [ Pink Wealth ].

Sir, my question is that since we are venturing into the new business, wastewater and task management and there's a margin accretive also. So just wanted to understand on the capital allocation side, will there be increase in ROCE and ROE also over the long run?

No, I don't think so.

So ROCE and ROE will be like maintaining the same what we are doing it?

Yes, absolutely.

Okay. And sir, my last question is that I just wanted to understand your thought process regarding the security personal management business. Sir, since there has been -- now we have been seeing that a lot of automation on hardware like CCTV cameras and automation has been applied. So going forward in the long run, do we see that the requirement of security person will be less?

We have already made our assessment there. And the cameras and the other technologies, they have been there since a couple of decades now. So which has not stopped the growth of manpower. It is a good complement. Both of the technology and manpower complement each other. And there are so many areas even today nationally, we do not have the Internet and Wi-Fi. Also, there are many other pockets in the city where there is any infrastructure. So it is always -- now we are moving towards a combination of both. So the requirement of manpower will continue to happen. But also we will have a value-added proposal to combine the technology with it. So if you ask me, it will be a dual benefit for us. We will be able to deploy people and also be able to deploy various technologies and other technology-driven services as an add-on feature to our customers. So it will just add to our entire portfolio.

Next question is from the line of Agastya Dave.

Sir, congratulations for a great set of numbers. Sir, one question is on the way we are doing accounting. So in your stand-alone numbers and in your consolidated numbers, I see a minority interest component. There is a non-controlling interest, which you are attributing to the parent company. So I want to understand, first of all, which is this parent company and which business is having a stake in some of your subsidiaries? I couldn't figure it out when I went through the annual report. That's why I'm asking this question.

This is pertaining to a small JV that we did way back when we did our first CETP project for Amarnath. So it is a JV which is Aquachem. It is one-off JV that we did. So [indiscernible] we go for acquiring business, it is that way. So it is just a one-off JV, which is there.

So as the company grows, this amount will remain constant because that project itself is not growing, right?

Yes, that project is also closed. I mean, it will grow, it is on an O&M stage. So once that O&M tenure gets over, it will get closed.

All right. Sir, one suggestion, sir, just for the like following the proper practices and just to avoid this confusion, the P&L mentions this minority interest, but the balance sheet does not. And I checked the schedules in that you are clubbing this as part of net worth. The general practice is -- there is nothing wrong about it, but the general practice is that it is shown below the net worth as a separate NCI or MI line item in the balance sheet, a consolidated stand-alone both because technically, this is not something I as a shareholder, will have access to, right? This is not part of my earnings. This is your JVs -- like it's a minority interest. So it would be better if we show it separately.

Point taken, Agastya.

Sir, my next question is, I understand the base business and the trajectory that you will have in that. But in the new businesses that you are starting, sir, how quickly will they ramp up? So for example, this wastewater business, next year, what kind of run rate can we see from this business? And will it breakeven next year? Or will we have in these 2 divisions, will we have some starting up losses?

I'm very happy that you got the chance to ask me this question. Thank you so much, and I'm very happy that we are talking here because you have asked a very good question. I wanted somebody to ask that because this is a new area that we have gotten into. And though we say it's a new area, we have the expertise and we had put in a team way back in 2016, 2017 to do this. This is a very good space that we are into. And because these are project-based businesses, there is nothing like breakeven because once the project is over, we've already taken all our bill money and revenues and we've already booked our profit. After that, there is 2 years, 3 years O&M, which we are getting paid for on a monthly basis. So it is a very good business because it's a cycle. It's 8, 9 months of project you do the project, you get the money and you're out of the project. It's a very good line to be in.

So we won't have any sort of losses?

No, no, not at all. Kindly consider the changes to the minority interest on the balance sheet.

Next question is from the line of Aakash Javeri from Time & Tide Advisors.

Sir, my first question is that we had mentioned that for the wastewater segment, we have INR 1,000 crore outlook for the company in the next 18 months. Are we on track for that? And apart from the INR 20 crore order that we have received for this division, have we got any more orders?

Yes, good questions. Yes, we had a particular business plan. We had already evaluated pipelines. We had already evaluated which tenders or projects that we will go ahead and evaluate, bid for work around. Only after that, we have gone ahead and made the announcement that we will have an order book position of INR 1,000 crores in the next 18 months. So when we did that announcement, it was a very well-studied announcement. Otherwise, we definitely won't have done such announcements in this domain. So the team is there. It is working on a daily basis. The evaluation is going on, on a daily basis. And there are some very good projects that have been worked on a national level, whether it is East, West, North, South. As I told earlier, the companies, the plant and the other government bodies are very mindful giving the environmental compulsions. And the segment also that we are playing this is very, very healthy for us. And so we are very optimistic that we will stick to our projections in this financial year.

Sure, sir. And sir, in catering, we've been growing at a great pace. We've gone from INR 30 crores to INR 74 crores in FY '25. Sir, can we continue this trajectory because I know that we have only one kitchen in Kalina. So are we planning to put more kitchen? Or have we reached optimal utilization in this division?

See, we still have space for manufacturing food in our current kitchen. We've not reached the optimum level of customers that we are servicing. And again, the nature of business is twofold. One is the production which happens in the kitchen and one is the production which happens on-site. So because we are pushing for business in both the domains, so the prospect of growing this business is also very high. And even if we reach the optimum level of our production in the kitchen, the business that gives us the leverage to manufacturing food at other locations, which is away from the kitchen. So totally, I think it is good potential. We have done very well this year, and we aspire to continue that growth going forward.

[Operator Instructions] Next question is from the line of Pankaj Motwani from Equirus Securities.

So my question is on the staffing and payroll management side. So I just want to know like what is the typical nature of the contracts in this segment? Like are they primarily structured basis on the fixed fee arrangement or based on percentage of fees bill because the intent behind my question is to understand the sensitivity of the margins in the segment because of the fluctuation in employee cost. So that's my question.

Yes. Pankaj, good question. Like now we are already doing staffing for a range of industries, whether it is manufacturing units, whether or metro rail or whatever. So it is a management fee-based percentage of the CTC and it is not per person based. And these are all 2-year, 3-year contracts which we have. So it is a good business to be in. And whether it is the metro rail or so many other government bodies are also now outsourcing. So we are a little mindful of not getting into per person which kind of a deal. We only get into staffing payroll management work where it is a management fee base. So where we do the entire billing and based on the billing, we charge the agreed management fee. So whenever the billing increases, obviously, the management fees increases.

So our margins remain same if there's any increase in the employee cost because of the wage inflation. So our margin remains sustainable?

Yes. Margins always remain sustainable.

And just a follow-up on this question. Can you provide the EBITDA margins of each of the segments?

We don't work on each segment-wise EBITDA margins because many times, these are bundled service offerings that we give. So, therefore, it becomes very difficult.

Next question is from the line of Prachi from PhillipCapital.

Congratulations on good set of numbers. Am I audible?

Yes.

So under the current assets, loans and advances have been increased significantly. So last quarter, you have said this was provided to the related parties. So are there any plans of reducing this?

Yes, we have plans of reducing this over a period of time.

Okay. Because we see we compare FY '24, '25 has been increased significantly.

But we plan to reduce them as we go forward.

Next question is from the line of Hemanth Soni an individual investor.

Sir, I just wanted to ask you one thing. Initially, we had given a guidance of 20% to 25% year-on-year growth for the next 2, 3 years. But if I take a look at the FY '25 numbers, I think we are close to, I don't remember the exact number, I think it's 14%, okay? So what was the reason for the shortfall? And I also saw the operating cash flow is negative. So can we expect, 20%, 25% kind of growth from '26 onwards?

Yes, we've always remain that -- we will be in that zone. So this year also, we are in that zone, we have, I think, 18% plus is what our growth. So we have said and for the benefit of our valued investors only like you are that we will continue to grow in this scope. We evaluate businesses so that we are adding healthy margins and also maintaining the zone of our growth of the top line. And so going forward also, anybody can expect us to maintain the same trajectory also by way of adding these new 2 businesses to the portfolio, they also have a better margin profile. So overall, we see similar growth and very much numbers that will add value to our shareholders like you. And in terms of your other question, which was there, that is?

Operating cash flow is negative.

We have working capital, which we have acquired very new businesses. So that is pertaining to that, you see that negative cash flow.

But sir, what was the reason behind the shortfall in FY '25, you have not stated that, sir? We were targeting even if I consider the low end, it is 20%, right?

Yes. I think the positivity you will see in the current contracts because the new contracts that we have, they will give you a better margin. You will see a better number this year.

So 25% is doable in FY'26?

We will not be able to comment on that Hemanth Bhai...

Any range, 2025?

We will not be able to give that range, Hemanth Bhai because we are talking always about the zone. But try and understand where I'm coming from, and I'm sure you've heard the call with the kind of businesses that we are into, with the kind of now pan-India presence that we are into. Aspirationally, it is always better for any CEO, the aspiration is to better the numbers. Nobody would like to be stagnant.

We had already given guidance earlier, sir during the time of our IPO, I guess. So what stops us from giving guidance for….

We will always try to achieve and give you the best numbers, Hemanth.

Sir, that is fine, that I understand, sir. But, what is stopping us is what I wanted to know because we had earlier given the guidance. So, are you seeing sort of...

These are similar guidance of 20% to 25% zone as a guidance that we have, and we will keep on growing in that zone.

Thank you. Ladies and gentlemen, we will take this as the last question for the day. I would now like to hand the conference over to Mr. Sanjay Dighe, CEO and Whole-Time Director, for the closing comments. Over to you, sir.

So I thank everybody who have called and who have reported themselves to call. And I thank people for asking questions. There are so many things that we learned from these questions as well. So absolutely delighted to answer all the questions and thank you for finding out time to ask me these questions. Always happy to answer you. I thank the entire team of Krystal Integrated Services Limited nationally, all departments for putting in their untiring efforts, their hard work, and dedication, which drives the company forward through various market conditions, and geographies. I thank the promoter family for bestowing all their trust in me and my senior team to take the company forward. Thank our bankers, thank my valued customers who have stood with me with all their loyalty. And also, I thank our IR company, Adfactors, Savli and her team, the moderators. I hope they do a little better job next time. And that's all. Thank you very much, and wish you all a very good day.

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