Pennar Industries Limited (513228) Q3 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Pennar Industries Q3 FY '26 Earnings Conference Call hosted by PhillipCapital (India) Private Limited. [Operator Instructions] Please note that this conference is being recorded. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. I now hand the conference over to Mr. Harshil Shah from PhillipCapital (India) Private Limited. Thank you, and over to you, sir.

Thank you, Anushka. Good morning, and a very warm welcome to everyone. Thank you for being on the call of Pennar Industries Limited. We are happy to have the management of Pennar Industries here today for the Q&A session with the investment community. The management is represented by Mr. Aditya Rao, Vice Chairman and Managing Director; Mr. Shrikant Bhakkad, CFO; Mr. Manoj, Vice President, Corporate Planning; and K.M. Sunil, Vice President, Investor and Media Relations. Before we start with the Q&A session, we will have opening comments from the management. Now I hand over the call to Mr. Aditya for opening comments. Over to you, sir.

Yes. Your voice is still muffled. As I told you, speak a little slower and louder.

Should I go, again?

No, no. It's okay. But I'm just saying your voice is not very audible. Okay. So I'll get started. If my voice isn't clear or if it's inaudible or please do let us know. All right. Good morning. Thank you for joining us for Pennar Industries Q3 FY '26 Investor Conference Call. I'm happy to have you here with us to have this opportunity to share our recent performance and provide an update on the strategic direction driving our continued growth. We'll begin with an overview of our Q3 results. We highlight key metrics, including revenue, PAT, working capital and our primary growth engines. Following this, Mr. Shrikant Bhakkad will provide a detailed financial review. We'll then move into a Q&A session to engage with your questions. We're pleased to report strong performance this quarter. Revenue increased by 13.3% to INR 959.02 crores. PAT grew by 10.14% to INR 33.55 crores, reflecting sustained momentum across several of our core business segments. The PAT was impacted by certain onetime costs during the quarter, including provisions related to Labour Code implementation, wage agreements, among others. Excluding these nonrecurring items, PAT growth would have been approximately 20%, demonstrating the underlying strength of the business. So we'll talk now about our key revenue growth drivers. Our PEB division's capacity utilization has improved. Manpower challenges have eased and inventory also has reduced by about 4,000 tons. Our order backlog is strong and holding, and we expect it to grow further over the next few quarters, driving revenue growth here. In Ascent, our U.S. subsidiary in Metal Buildings, we have delivered strong double-digit growth in both revenue and profitability. The order backlog has increased to $52 million, and we are in a good place for sustained double-digit growth in revenue and PBT through the remainder of the fiscal year. Ascent Structural, that acquisition also started booking orders and will be contributing very meaningfully to our revenue in Q4 and following quarters. Engineering Services, our structural engineering business continues to perform very well. BIM growth was more modest, but we have strengthened our sales and business development teams in the U.S. to support future expansion. Overall, again, we expect healthy double-digit growth in revenue and PBT for the full year. Hydraulics, our order backlog has more than doubled. The reduction in tariffs in the U.S. will now help this business grow even quicker. We are expanding our presence in domestic and European markets. And this segment, while modest in revenue contribution, remains on a very stable path, and we don't expect -- we expect minimal impact for FY '26. The Boilers division saw a very strong increase in our order backlog to INR 123 crores this quarter. We received a lot of strong export orders from Australia and Sri Lanka, [ Saipem and Brown Industry ]. With strong execution in place, we anticipate very robust revenue growth in Q4. This will become a major growth lever for us for the next financial year. Our Q3 PAT margin stood at 3.56%. After excluding the onetime -- after including the onetime events, we would have been at 4%. So our revenue and profit trajectory continues to shift towards higher-margin businesses. And this positive trajectory will continue to grow our PAT at double-digit rates. Capital efficiency, our ROCE stands at 21.3% and return on equity is at 12.1%. We're quite confident of achieving these returns as performance continues to scale through the year. Working capital at 76 days, reflecting timing-related impacts from revenue perhaps not coming in, in some of the segments. With stronger Q4 projections, especially in PEB and other key segments, we expect good improvement on this number in the next -- in this quarter and the next quarter -- Q4 and the next quarters. This concludes my performance overview for the third quarter FY '26. I will now hand over to our CFO, Mr. Shrikant, who will walk you through the detailed financials. Thank you again for your interest and support.

Thank you, Aditya. A very warm welcome to all our shareholders and investors joining the Q3 FY '26 earnings call. Let me take you through the key financial highlights, and I will go slowly so that the numbers are clear. Key metrics, total revenue has increased, from -- INR 943 crores to -- from INR 839.72 crores, an increase of INR 103.34 crores, overall 12.3% increase in the revenue. EBITDA has improved from INR 88.3 crores to INR 98.54 crores, a growth of 7.2%. PAT has increased by 10.14% from INR 30.46 crores to INR 33.55 crores. This PAT growth reflects the impact of certain onetime employee-related costs. Excluding this, the underlying PAT growth would have been substantially higher. Detailed commentary on the financial results. Revenue from our operations, the consolidated revenue, as I said, has increased by INR 103.34 crores. This is predominantly driven by two reasons: one, increase in our stand-alone and in our subsidiary businesses. So INR 61.47 crores has increased from our stand-alone business and INR 41.87 crores increase from our subsidiaries. Within the segment, the diversified Engineering revenue has increased from INR 415.6 crores to INR 520.31 crores, a growth of 25.19%, primarily driven by our strong performance in the steel BU sector. Custom design building solutions revenue remained stable at INR 441 crores to INR 440 crores at a consolidated level. The growth of INR 42 crores is in the U.S. business, driven by the Telco acquisition. This was offset by lower PEB sales in India due to the challenges that we have, and we are confident that this will improve in the coming quarters. The order book stands at INR 810 crores for the PEB India. PEB U.S., the combined asset buildings and asset structural order book is now at $60.6 million. Now coming to other income. The other income has increased by INR 9.23 crores, predominantly. The factors include foreign exchange and translation gains, income from mutual funds and deposits and collection of old receivables, write-back of creditors plus the rental income. To give you a detailed explanation, INR 2.71 crores comes from ForEx transaction and translation gains, INR 3.72 crores comes from interest income from mutual funds and deposits, INR 8.4 crores is from collection of old receivables and write-back of creditors. Moving on. The employee benefit expenses have increased by INR 17.31 crores, which includes INR 3.6 crores due to onetime costs, which are on account of Labour Code compliances, order from Chennai High Court on Union employee settlement and the wage agreement revision that we had. The balance INR 12.16 crores is an incremental cost in upstream due to our Telco acquisition and the normal increase due to revenue. Explaining on the finance cost, finance cost has increased by INR 2.85 crores, which is in line with the expectations. This increase is attributable predominantly on the acquisition of the assets from Telco Enterprise, higher working capital utilization in line with the revenue growth. Finance cost stands at 3.56% of our net revenue, which is better than our guidance of 4%. Our guidance breakeven -- breakup still remains the same, 1% on long-term loans and 3% on our working capital. We remain within the limits on the long-term loans. Working capital is high, and we are hard at work to reduce the quarter, and we plan to reduce this by using our inventory turns and accelerating the sales. Depreciation and amortization has increased by INR 4.25 crores at a consolidated level, INR 1.33 crores comes from stand-alone, which is on account of Raebareli CapEx and other repairs and maintenance capitalization that we had and INR 2.92 crores comes from subsidiaries on account of Telco acquisition and robotic machines that we have installed at our U.S. operations. Moving on to other expenses. The other expenses increased by INR 39.79 crores, comprising INR 26 crores from stand-alone and INR 14 crores from subsidiaries. On stand-alone, the job work and the manpower cost has increased by INR 19 crores, which are aligned with our higher order execution and increase in the manpower rates for our higher sales. Other costs are broadly in line with the revenue growth. We expect manpower and subcontract costs to stay at this level, while we aim to moderate the expenses to maintain the overall fixed cost discipline in the coming quarters. Subsidiary level increased reflect the higher turnover and associated job work and operational costs, which we expect to stabilize in the coming quarters. Tax expense has been lower due to the credit that we have received relating to previous assessment year, a provision of INR 1.4 crores was reversed based on the assessment order. We continue to guide to a consolidated tax rate of approximately 25.5%. Overall summary, revenue growth has been strong this quarter, predominantly on the diversified engineering, custom design building solutions in the U.S. and overall operations, both in India. The revenue expansion has translated into an improvement in our profit for the quarter. With this, I will hand over the call back to the moderator for the investor community questions.

[Operator Instructions] We take the first question from the line of Aniket Nikumb from ABN Capital.

Hello, am I audible?

Yes, go ahead please.

Sir, my first question is, we seem to have a strong growth that we have shown in diversified engineering. So can you tell us a little bit about what has worked for us, what business segments have worked?

I'm sorry, you're saying diversified engineering, what is the -- what has worked...

Yes, what has worked because it seems like just a little bit all of a sudden, we are growing at 25% broadly?

Excuse me, your voice is not very audible. Can you speak a little slower?

Yes. Am I audible now?

Yes. Speak a little slower, please so that we can understand.

Yes, sure. Sir, I was saying that can you comment a little bit about what segments in the diversified engineering have worked for us, given the strong growth we have shown in this quarter?

Okay. I can tell you which growth vectors for us are growing strongly. I mean the attribution of it -- diversified engineering versus PEB versus others, I think I'll request Shrikant to answer. But for the third quarter question, we had pretty strong growth in our core business verticals, which is our revenue in boilers, in engineering services and process equipment grew. In our PEB U.S. business also, there was a substantial amount of growth. India, too, as you would recall, we had some issues, but those issues have now been addressed. So we are at a good place to deliver growth in all five key verticals right now, which includes PEB India, which we see very strong growth in the next few quarters on the back of us having resolved the labor issues that we had and also on the back of stronger order backlogs. The acquisition of Telco plus our U.S. order backlog also being strong will drive that business quite strongly. Ascent has also done quite well last quarter. Engineering services, our structural engineering is doing extremely well. We are, in some sense, capacity locked again, but we have quickly expanded capacity. And this quarter, we'll see a very strong growth. Hydraulics because of the removal of duty from 50% to 18%, we already had some initiatives underway to scale those -- scale that business vertical in the absence of the U.S. market. But now with the U.S. market coming back, I think we are quite confident that several of our customers are going to restart. In fact, this morning itself, I had a very encouraging conversation with one of our primary customers in the U.S., and we're quite confident again of that business scaling well. Boilers, as I mentioned, the order backlog now is at INR 123 crores and double digit from a quarter-on-quarter basis itself, double-digit growth is what we expect. So all of that will drive our growth over the next few quarters.

Yes. To answer your specific questions on the increase in the diversified engineering business, it comes from three angles. One is the steel business, boilers and BIW. The combination of steel business, boilers and BIW has given us the increased growth.

Okay, sir. I appreciate that. I think my second question, sir, is on the PEB business segment or the -- as you reported in segment reporting, the custom design building solutions and auxiliary segment, we've reported a flat number. So can you tell us what proportion of the business was from the acquisition? Because I guess that is not there last year? And why the business was flat, given that we already had a strong order book and we had new capacity and so on?

So the acquisition didn't really come in, in the last quarter. Though we had completed it in late September, early October, putting our new systems in place, getting our order backlog back, our transferring order backlogs, all of that took a little bit longer than we thought since this is an asset purchase and not a company purchase. So -- but however, this quarter, it is extremely strong. Our order backlogs are higher than they've been. And from a revenue run rate point of view also, the rate we are at right now from a production output point of view that we're at right now for our acquisition, it's higher than it's ever been even prior to the acquisition. So very quickly, growth has come in. Very quickly, we have been able to scale. A very short onetime issue, which resulted in the PEB business not being major growth vector, but we feel that reverses quite strongly in this quarter. Everything is looking really good for as far as we can tell for our PEB business. India order backlogs are up. The labor issues have been resolved. In the U.S. acquisition is now starting to contribute quite strongly and our order backlogs are also up for the regular metal buildings business in the U.S. So combine all of that, and we are very, very confident that this is going to scale. So that narrative should give you an idea about what we are expecting this quarter and what we saw for the last quarter.

Got it, sir. Sir, typically -- we typically give the order book in the U.S. and India, but I don't see it in this presentation. Would you be willing to share those numbers, sir, on the call?

Sure. The U.S. -- let me break the U.S. up into two pieces. The U.S. order backlog for buildings is $52 million. The U.S. order backlog for Telco is about $10 million. U.S. -- India order backlog is about INR 820 crores.

[Operator Instructions] We take the next question from the line of Deepak Poddar from Sapphire Capital.

Hello. Am I audible, sir?

Please go ahead, Deepak.

Sir, just wanted to understand, can you quantify what's the one-off? I mean, you mentioned your adjusted PAT is 4%, right? So can you just quantify the one-off in terms of Labour Code or any other one-off?

Kuram, the one-off from?

Onetime cost...

Okay. Shrikant, do you want to take this?

Yes. The onetime cost on account of three things, which comes in salaries and wages. One is on account of Labour Code compliance implementation. Second, we have received a Chennai High Court order for the union employees settlement, which -- for which we need to have -- made a provision. Third, there are wage agreements that have been finalized with the workers. So all inclusive, close to around INR 4 crores is the impact that we have onetime cost.

INR 4 crores is the total cost. So this will not reoccur. I mean, these all are one-off, right?

That's correct. All of these are onetime recurring costs -- onetime non-recurring cost, my apologies.

Yes, INR 4 crores. And in terms of the Telco acquisition, I think the contribution has started coming from this third quarter, right?

Not really, sir, post quarter. We couldn't really get anything in the third quarter because though we have completed the acquisition, putting our systems in place and asset purchase, the order backlog transfer took a little bit. I think you saw a little bit come in, in December, but nothing that material. But this quarter, I think I'm quite sure we will be able to give you some very good news on that for Q4 from Telco, from PEB India and Ascent.

Understood. And then that's about, what, INR 100 crores per annum revenue, right? That's the business?

It will be higher than that, sir. Yes. It would be substantially higher than that.

Okay, okay. Would you be able to quantify, I mean, what contribution annually that company can bring?

We can't give revenue guidance, but we can definitely tell you that from an order booking point of view, we are doing about $2 million, about INR 18 crores, INR 20 crores per month. So typically, over the medium term, short term to medium term, your revenue and your order booking tend to convert. So we're not giving you guidance for the year, but it will definitely be substantially over INR 100 crores.

Understood. And in terms of issue you mentioned on PEB India, right? So is the labor issue still kind of hunting us? I mean, what's the issue we are talking about here?

No, we've resolved it. That was the issue we had for the last couple of quarters. We have now resolved it. We've undertaken many initiatives, including building our own labor quarters, including increasing our contract manpower, including increasing our skilled manpower, which is sourced from other verticals as well. So now the issue is resolved. We are not labor bottleneck anymore. So the combination of a large order backlog, we will see this revenue get back to full growth. So yes, that issue is solved, but you will see it in this quarter.

Okay. So what was the issue which led to third quarter lower growth in PEB India, right?

In PEB, overall, as I mentioned, there was a dip and the rational reasons for that was what I mentioned. Telco did not come in the way it wanted to. The U.S. also, I think Ascent buildings also, we didn't have a lower quarter, but we had a moderate growth quarter. And PEB India because of those reasons. As I mentioned in the last time we had spoken, which was mid-October, we were well on our way to a solution. But by that time, half the quarter was done. So from a run rate point of view right now, what we are seeing every month, what we're seeing happen, this issue is behind us.

Okay. Okay. Understood. And I think you mentioned something on consolidated PAT of 25%. I was not able to understand. I mean what we are trying to say here, I mean, consolidated PAT of 25% something?

I think the narrative we may have given that matches those numbers is if the onetime labor costs are removed, then our PAT growth and our cash PAT growth are around those numbers, I think. But what's relevant, I think, is what we have to declare. I think we can -- there may be onetime items, but they are cost items which the company had. So we just wanted to give some narrative clarity on why our revenue growth is 13%, 14%, but our profit growth was only 10%. That was the reason why we would have.

Okay. Understood. And just final thing from my side. I think in the last call, we mentioned a floor of 20% PAT growth that we are looking Y-o-Y, right? So that we continue to hold for this year and coming years?

That remains. That definitely remains. This is a surprise onetime thing, quite frankly, even the new label or regulations, we should have anticipated that coming, but we have to follow accounting law, and that is the reason why we couldn't compensate for that quickly enough. But with the revenue growth plans that we have, we will absolutely maintain our double-digit profit growth commitments. If you look at what's been happening over the last few years also, that will -- that's absolutely what we intend to achieve.

We take the next question from the line of [ Nitin Jain from Fair Value Equity Advisor. ]

So can you please clarify what was the exact impact due to the change in Labour Codes only, like that part of the onetime impact?

We don't have that exact precise breakup as of right now, but we will make sure we give that to you. Overall, the combination of three issues, which was the court case, which was from, I believe, 10, 12 years ago that went against us plus the Labour Code plus wage revisions together, we have that. The exact because of the Labour Code, we'll get back to you, but it is a substantial number.

So my next question is, in Q2, management had indicated that the unexecuted order book was around INR 880 crores in the PEB business. And this quarter, we have won orders worth INR 780 crores. So even if I consider the PEB revenue for Q3 and the unexecuted order book as of December, which is, I guess you mentioned around INR 820 crores. So it is not reconciling exactly. Can you please help me with that?

Sure. Yes. So the reason that number wouldn't match up is what we have given you a few numbers for order backlog. The INR 780 crore number is order bookings for that quarter. It doesn't represent the situation as it is right now. As it stands right now, we're well over INR 800 crores in the PEB India order backlog as well. And from a revenue recognition point of view, there is a lot of -- what we follow effectively is when the risk has passed. So we have shipped it debits our order backlog, but it won't show up in revenue because our auditors will not allow us to take that revenue in until we have received some measure of confirmation from our customers about goods that are shipped. So those differences will give you a thing where you -- if you look at the number that was quoted to you the last time we spoke in November, that would have been the order backlog at that point of time. The order booking number that we have given is INR 780 crores is a lump sum number for that quarter. The situation as it stands right now is one where the order backlog is very strong at well over INR 800 crores. And that's only PEB India I'm talking about. If you add the entire PEB space, it is much higher. Over -- due to all of those reasons, you will not see those numbers line up where order booking -- opening order book, minus revenue plus new order booking is equal to current order backlog. That equation will not work because of the reasons that I just mentioned.

Right. No, I'm not saying as of today. Obviously, there might be more order wins as of today. But I was hoping to reconcile as of the end of quarter 3.

Yes, the order book that we have given as part of our press media release that includes multiple businesses. So that includes India business, our diversified engineering business plus the boiler and the hydraulic businesses as well. So that INR 780 crores is for the entire company, the order book, while the PEB order book, INR 810 crores specifically is for PEB India and INR 52 crores plus INR 10 crores, what we have is for the U.S. -- yes, in million, $52 million and the $10 million is for the U.S. business. So the order books are different. And this quarter, orders that we've received is INR 780 crores. I hope I was able to clarify.

Right, right. So just a follow-up to that. Out of the INR 780 crores, you mentioned that this is for different verticals put together, what portion would be attributable to PEB?

That exact number, we do not have right now. We'll get that number...

At least we can give you the exact number for PEB India as well as the PEB U.S. And just to make sure that this is something that has been clearly understood. Typically, when we give you order backlog numbers, they are as they are right now. So in the month of January, for example, we had well over INR 200 crores in order booking in PEB itself -- in PEB India itself. So I think the best way to understand this, especially from a revenue foreseeability revenue projection standpoint, is what our order backlog is at this point of time. The INR 780 crores is just the major order booking that we have that we are -- we have to comply with reporting. That's why we go ahead and do that. But it is not by any means a holistic revenue projection indication for what we're going to be doing. It's a blend, and it is not intended to be the way we project revenue. It only covers significant major orders. So -- and as I mentioned, there's a lot more of that, that came in, in January. So I think we'd be best -- the point of this is to look at revenue foreseeability, what's going to happen in the PEB business in India and the U.S. The best way for us to accomplish that is to look at current order backlogs. But yes, that's my two sense.

[Operator Instructions] We take the next question from the line of Shubhankar Gupta from Equitree Capital.

Just one question from my side, which I wanted to deep dive into. So you said that PAT growth is 10% from INR 30 crores to INR 33 crores roughly, right? But if we exclude the other income, it is roughly landing at INR 17.5 crores and INR 23.7 crores, actually roughly down 26%. And even if we, let's say, include the onetime expense, the PAT will be at around INR 21.5 crores, which will still be at around 10% lower than on a Y-o-Y basis. So just wanted to understand what has led to this degrowth in PAT?

If I can explain the PAT through the other income is part of our regular income only, which is basically income from deposits or foreign exchange translation reserves...

It's not operating income, right? Like I'm talking about operating income basis, you are down 10% Y-o-Y.

See, out of that, close to around, as I've explained in my conversation, the other income includes INR 3.72 crores approximately on foreign exchange translation gains and other things. That's part of the operating income. But the rest of the things, which is like the mutual funds and other things, they are not.

To explain it a little bit better, I mean, the assumption for us is -- the model we follow is contribution operating margin targeting. And when we have these things where there's a gap between -- whether it's ForEx gain or other gains, we do take that into account when we are mapping out what we want our operating contributions to be. So to Shrikant point, while I understand your question and what you're trying to say, we would take those things, keep those in our operating cash flow because we target our overall -- an overall operating margin is what we -- including these items is what we target.

Okay. Let's consider that even foreign exchange is a part of, let's say, income, right? That would be around INR 4 crores. Roughly our PAT growth will then be roughly 3%, 4%, right, if you include that? That part of the other income? So even then it has like grown very, very less like compared to what we were targeting a few quarters back. So I just want to understand like broadly, in your view, what has led to this underperformance? And then how do we foresee it for FY '27?

So we don't necessarily see it -- because of the reason that I mentioned, we don't necessarily see it as underperformance. As I mentioned, there's a certain profit number that we -- operating margin that we target. And we have multiple levers in order to achieve that. So the output that you see is effectively because of these onetime costs. If those onetime costs are put back in, then we do see a number which is completely in line with our long-term stated objective, which is to get double-digit profit growth north of 20% and that is what we see. I do get your narrative that, look, if you were to exclude the other income and other items, but these are very much in line with our overall -- with our stated objectives of -- we also -- I do want to also state that there's a lot of provisioning that we make. We are very conservative in our accounting. I mean we follow accounting law, of course. But there's, for example, a lot of provisioning that we made that we are sure will come in for us as well. So what we're trying to give you is what the output is based on our operating margin controls. But if you are asking us whether this is something that is sustainable that can grow 100%. So we are quite confident of achieving and growing our revenue and profit growth targets, and we are quite confident of committing to you as we have before, that we expect our profit growth for the year before the following quarters to be double digit and north of 20% Yes, that's the best way I can answer your question.

Okay. Fair enough. And on the debt number, see a certain rise in that. So Shrikant, if you can probably help me with like how is the debt -- like what is the debt number currently? And like at what interest have we -- like are we currently paying for that?

Specifically, in terms of total overall borrowing cost has been increased in line with the increase in the revenue, as I narrated in my discussion. And the second, the increase on account of long term is on account of the acquisition Telco. So overall, 3.56% of the net sales is what our borrowing cost is.

Okay. So to understand this clearly, you're saying that 13% revenue growth Y-o-Y. So even that has been the increase in the total borrowing. Is that what you're saying?

In terms of absolute numbers, yes. In terms of percentage, there is a decline by 0.04...

Okay. Got it. Okay. That's helpful. And at what cost is this the whole total borrowing at weighted average cost?

Blend of 9.5%.

We take the next question from the line of [ Vinod Krishna from Avendus Wealth. ]

Sir, am I audible?

Yes, please.

Sir, can you give us 2- to 3-year guidance in terms of sales and PAT? Because you have been saying 20%, you can be maintenance on if you can a little bit elaborate on the drivers of sales growth? And my second question is regarding PEB dynamics in India. See, how is the competition shaping up? And how do you see we doing better in PEB going forward?

So growth drivers, as I said, our key growth drivers that we have mentioned, which includes our boilers and process equipment, hydraulics, pre-engineered buildings India, pre-engineered buildings U.S. and engineering services are all firing, and we expect growth in each and every one of those business units in revenue and profitability. So that's our core strategy that the addressable market for these is quite high. So in this quarter, which is Q4 for the financial year and for the remaining quarters, you will see growth in all of those vectors. This year, we had a substantial issue with PEB India, but that's in the rearview mirror. We have solved it last quarter towards the end itself, it was solved. And we are quite confident that we bring in -- we hit our numbers.

So when will we our 5% PAT margin that we have been guiding, sir? And what would be long-run PAT margin that we can settle at once we read like all the legacy business is gone and then you reach scale in your -- most of your businesses because you've been telling that you want to have a 10% share in this steel product businesses. So what will be -- when will we reach 5% and what will be our -- once we reach our desired market shares in each of our segments, what will be our PAT margins?

We will be -- we are right now at 4%. You will see consistent quarter-on-quarter improvements. As to when we reach 5% and I think the better way for me to answer that so that this doesn't become some form of guidance is for me to say that our long-term sustainable PAT margin is 7% level, and we are quite confident we'll achieve that in the next -- within the next 2 to 3 years. And that will not happen at one time. It will happen quarter-on-quarter, you will see improvements. I mean 3 years ago, our PAT margins were 2% change. So that consistent with what we have done over the last 2 years, we'll continue doing that, and that will ensure that we get...

And sales growth of 15% to 20%, we can take. I'm not asking for a guidance, but given the drivers and multiproduct and both geographies of U.S. and India, so we can assume a 15% sales growth at least with 7% in 3 years, 3 to 4 years.

I will say double-digit sales growth, 15%, we can definitely say is one of the targets we have in mind, but double-digit sales growth, we commit to.

And then PAT of 7% over 2-, 3-year or 4-year.

That is what we have guided to in our previous calls. And we are quite confident...

How long are we -- sir, have we reached the market shares of 10% in those products, sir, you were mentioning that we want to take a small market share in all those products, boilers and all the others...

We have not achieved 10% market share in any of our business revenue streams. So that's a good and bad thing. It's a bad thing in the sense that we are not the largest player in any of those fields. It's a good thing in terms of we have tremendous amount of headroom to grow. So that is -- and we like it that way. I think once we reach 10%, we'll be happy, but in none of those businesses, have we reached 10% as yet. And goal is to, market share, capture.

And there's no challenges to reach. It's just a function of time and systems and people.

I don't think our model calls for us to reach. I mean, if you look at -- let's look at the PEB space. The largest player in the PEB space is 20% market share, right? And they -- that's the business model and growth for them from a revenue standpoint would be harder going forward, right, because they already are at 20%. And unless the business -- the market itself is growing at double -- high double-digit rates sustainably over years, they would be difficult for them to grow. Our model is a little more nuanced. We pick 5 large addressable markets and we pick those. Our market share is low. So sustained growth on that is what we're trying to achieve. So there's two things we try to do to ensure our revenue grows. One, yes, our market share grows moderately. But most importantly, the addressable market itself also should grow. That's what we have picked. And we are quite confident that based on where we are at right now, we should have -- each one of these business units that I mentioned can deliver double-digit growth, and that's our goal to grow them.

So what I'm asking is the path to 10% is not -- like you have seen that there's a path and you can see you going there. There's no big obstacles that will not allow us to go there. You don't see any new challenges that will stop us. Like you can see it that we can go there with time? That was what my question was like. I know we were not at 10%, but...

I think in general terms, the market would not prevent any player from achieving 10% provided they have good assets and good capital availability. I mean they commission their assets and they are good assets from a team, technology, know-how, the market will not prevent them. I do believe we are one of those players, yes. So nothing should prevent us from getting 8% to 10%.

We'll take the next question from the line of Rahul Kumar from Vaikarya Fund.

Shrikant, actually, can you help us understand the monthly run rate for the PEB in India now versus what it was in Q3? And also, can you help us understand the impact of the steel price increase on the PEB in India?

Overall, INR 442 crores is what we have done in terms of the custom design building solution company, which is close to around INR 145 crores kind of a thing in terms of the overall number, that's fair. Coming to your second question in terms of steel prices, I think steel prices as we have alluded in our calls and other -- the price increase greatly do not impact us in any way. There are short-term contracts and there are long-term contracts. We have the quarterly pricing with JSW, wherein we are protected for the next quarter rate and what we have the indication from them. And in the long-term contracts, we are -- the increased margin is there as part of the contract. So any increase or decrease, we'll have to pass on to the customers. So that's how the contracts are worded. So I hope that answers your question.

Okay. Okay. So what's the mix of these long-term and short-term contract in this period.

On a quarterly basis, we receive as we said, close to INR 700 crores, INR 780 crores of short-term contracts. And long term, the overall, the PEB cycle itself is 6 months. So on an average, certain contracts can be higher than 6 months, and there are a lot of contracts that are less than 6 months. So maximum, the order book that we have is executable over a period of 6 months.

Okay. Okay. No, actually, on the monthly run rate, I think sometime back you mentioned that our PEB India business is back on growth trajectory and the monthly run rate has improved. So I was wondering what is the monthly run rate of the India PEB now versus let's say, October, November when it was impacted?

I'll come back to you with the precise number on the revenue.

Yes, we'll give you the exact number because that's the revenue number we're at right now in a month, we want to make sure that's something we can communicate well. But what we can tell you is that the monthly run rate right now compared to what it was 2 months ago, 3 months ago is higher by double-digit numbers. You can say north of 20% higher. So it's growing and growing quickly, PEB India.

Understood. Second question is on...

Rahul, I would request you to join back the queue as there are several participants waiting for their turn. We take the next question from the line of Prateek Bhandari from AART Ventures.

You mentioned that with the renewal of duty from 50% to 18% in hydraulics, that would enable you to grow substantially, right? So can you quantify the numbers with which you can grow there in the hydraulics division? This was my first question. So my second question was you mentioned that you have an order -- the hydraulics division order book also has doubled. So if you can quantify the number of the same? And what has been the monthly run rate for the boilers division in terms of revenue? So these are my three questions.

Okay. So we do not as yet provide revenue breakup across all five of these revenue verticals right now. Once we start doing it, then we'll be able to provide that data for you. Let me get as close as I can to answering your question. So hydraulics order booking because of the change in the U.S. duty structure, it's still something that we are fully mapping out. All I can commit to is that our order backlog will grow a lot more. But please do give us this quarter, next quarter onwards, we will provide an exact number for how much our order backlog is going to grow because we're still mapping out the impact. And as of right now, it looks extremely encouraging, but I don't have an exact impact number for you. I can tell you, however, that the order backlog is projected to more than double in the next few weeks. So that I can tell you.

No. You mentioned that it has already doubled, right?

Right.

So -- but then if you can quantify the numbers, I mean, I wanted to understand as to the numbers, the base numbers and compared to where we stand at the moment in hydraulics.

Okay. So as I said, revenue breakup for hydraulics, we don't provide. If you want an order backlog number...

Yes, order backlog.

Yes. I don't believe we've declared that. Allow us to come back to you. I will -- I want to give you a number that is there right now. We will get back to you and give you this number.

Okay. And in terms of boiler business, what was the order inflow for us during the quarter? You mentioned that we stand at INR 123 crores of order book at the moment. And what typically is the execution time line for the boilers?

So we source in our boiler business, two kinds of orders. One is the power boilers and one is process equipment boilers. For process boilers, the order execution cycle is much smaller, much shorter. It's about 3 months to 4 months. For power boilers, it tends to be a little higher than that, about 9 months. So what you see is a blend of both of those sectors. But as a blended average, this INR 123 crores is something we expect to be able to revenue out within the next 6 months.

So for power boilers, you mentioned the order execution time line, 1 to 4 months. And which was the second one?

Sorry, process is the shorter duration execution cycle, which is around 4 months. Power boilers is a longer duration, which is about -- as I mentioned, about 9 months. The weighted average, you can take about 6 months.

Okay. So the higher execution time line is the power boiler?

That's correct.

We take the next question from the line of [ Nitin Jain from Fair Value Equity Advisor. ]

Sir, last quarter, you had mentioned that you were able to commit to a minimum of 20% PAT growth. And this call, you have lowered it to around double digit. So is there -- can you provide any color on that? What foresight do you see in the business, which is making you retract from the 20% growth commitment?

Thank you for the question. My comment on that is there has been no retraction. We have absolutely have plans in place to allow our profit to grow at 20% per quarter. As I mentioned for one of the questions of a previous caller, we are quite confident that our ability to hit 20% is dictated by our operating margin being what it needs to be. And -- but for these onetime costs, I think we would have it. It came in quite late in the quarter. I think only in the month of December or maybe even January would be when we realize this. So that we have tools in place in order to make sure that we get that 20%. There's a tremendous amount of leeway we have on our operating margin on what we can pass through. Steel price increases, we can pass that in there's a certain time frame we do. We target operating margins and operating margin growth. So from what we have on our plate right now, our order backlogs, the revenue streams, our customer and our capacity we are quite confident of delivering 20% growth, so there's no -- in profit. So there's no -- we are not -- there's no correction that we're offering on that. These plans that we have are long term, they're not dictated by any short-term events such as steel price volatility or even things such as markets, for example. So we'd like to commit that and recommit that we are committed to that number, double-digit profit growth. And guess what you mentioned, 20% is absolutely the stated target for us.

Right. And my last question is specifically to the PEB business. It seems that like maybe due to some new reason every quarter, we are consistently underperforming every quarter compared to what commitments we have made in the previous call. And I think somewhere it is reflecting in the market strong reaction to the price as well this morning. So is there any particular reason why we are consistently overpromising and under delivering in that business?

I mean I would hesitate to attribute short-term share price movements to any particular aspect of it. I think our duty is to make sure that we are communicating exactly what we are going to achieve from a revenue point of view, double-digit revenue growth, exactly what we're going to achieve on a profit growth. And that's what we're going to continue doing. We've executed on that plan. And the most important thing for us is that we say what we do. Coming to the PEB space, we had highlighted the concern we had on labor, which led to lower capacity utilization. There was nothing wrong with the market per se. Our order backlogs remain strong. We have not fixed those issues. So that will continue to deliver growth. And I think -- I cannot comment on what the share price does on the short-term basis. What I can commit to is as our profit growth, it is -- I believe our expectation is the PE multiple holds up, which drives up our market cap, which drives up our share price. So we'll continue to execute on that. What we as the executive team can commit to is that what we promised you, we will ensure we will achieve. We'll make every effort that is possible to achieve. And we are very confident, most importantly, that we will achieve these numbers. So as far as PEB is concerned, we had highlighted an issue, and we have solved that issue. So that would be my comment.

We take the next question from the line of Chetan Kumar from Coheron Wealth Limited.

Hello, am I audible?

Yes, yes.

So my question was in terms of capacity utilization. Could you just give us a number on what was the utilization for this quarter?

So capacity utilization is a blend across many businesses. There are some businesses, for example, our tubing business and steel where we are near extremely high levels of capacity utilization. As I referred to on the previous thing, for the last couple of quarters, our PEB capacity utilization has been on the lower side, but that's something we have now fixed and that will trend up above 70%. As a blend overall, we're still at about 70% capacity utilization across all of our revenue streams.

Right. Okay. And my second question was in terms of which sectors are we seeing growth in the PEB side, like where are we getting the orders from and which industries are looking for this space...

Apologies, your voice is -- could you repeat that question, please? It was a little muffled voice. If you could repeat the question, please.

Yes. Sir, I just wanted to understand which industries in the PEB segment are growing, whether it's the data centers, infrastructure, oil and gas. So which sectors have we seen some traction coming from in the PEB space?

Okay. I think the question -- correct me if I'm wrong, your question was in which -- from which sector are we seeing PEB order inflow come in. We are primarily seeing it in the process engineering space, the automotive space and the high-rise building space. Those are the three growth sectors where we have received significant orders.

We take the next question from the line of Miraj Shah from C.J. Shah.

Most of my questions were answered, but for my couple of questions that are still remaining. If you can, sir, just once again touch upon how steel prices are impacting -- the increase in steel price or a decrease in steel price that impact in the PEB space. You did mention that you have some short-term contracts and some long-term contracts. So if you can just highlight it a bit more so that I can understand how the long-term contracts will work over here? That's my first question. And on -- the second question on PEBS side, if you can explain what exactly do we do in a high-rise building, what exactly is the component that we service over there?

I'll request -- let me answer the first question. I'll request a little bit of clarity on the second question. So as far as steel prices are concerned, we are not a perfect but a near perfect pass-through. And as Shrikant had mentioned, the way this happens is we have quarterly rate contracts with steel. So any steel price increase, typically, we have 1.5 to 3 months to pass on what we need to depending on when that price increase comes in. So that's an advantage. More importantly, a lot of our contracts have price escalation clauses. So it's effectively a pass-through. What we do need to be careful about when there's massive steel price increases is that we retain not just the spread, but also the percentage. So that -- and that's something that we are very clear with our customers on that we are going to request and demand a certain operating margin in these businesses, a certain margin after variable. And on that basis, we tend to pass through everything that we get. That's as far as steel pricing is concerned and the impact of that on our revenue and our margins. The second question that you had mentioned, could you just clarify that, sir, please? I wasn't sure I understood it well enough.

No. So I wanted to understand in a high-rise building that we do compared to any other building because in PEB usually, we are doing -- we don't do extremely tall structures. So I wasn't sure what exactly is a high-rise building that we make over here. If you can just explain what is the high-rise building? And do we do the entire building or do we do only selected components of that structure, if you can just explain on that?

It's -- fine. The scope of services we provide in the high-rise building sector is very similar to what we provide in the per-engineered building sector, which is we provide design, manufacture components and shipping aside. And these are primarily the structural framework of the building, so building shells, if you will. So we don't do interiors, we don't do lighting. We don't do HVAC. We don't do any of that. The difference between what we would do in the pre-engineered building space and what we do in the high-rise space is that it tends to have more floors. So incorporates elements such as structural decking and in the design itself, for example, we would be taking into account the compressive load, which is much higher. So traditional PEB very, very seldom goes above four floors even with intermediate mezzanine and structures, ground plus four. High-rise buildings, we've done as high as ground plus 16. And it's the same model. It's a very similar time line. And we come in after the civil has been done. We erect the structures, we erect the intermediate floors. And typically, about 3 to 6 months is the duration of the project. That's the scope and the time line and the value proposition we provide in the high-rise building space.

Understood. I think, sir, you mentioned in the pass on -- you mentioned that you pass on with the percentage as well, right? So you will be benefiting with increase in spreads, absolute spreads.

That is correct. And this stands for India, the U.S., even in the U.S., you do tend to see these price things. So we pass on margin and we pass on percentage. In the case of price decrease, we try to -- and a lot of this is automated. It's not really that we have to go ask our customers, whether it's a price escalation contract or SIAM automotive index-linked pricing. Typically -- these price increases come in automatically. They're contractually baked in. So we don't have to do much. Most importantly is from a risk management point of view, we are not exposed to dramatic issues with our margins in the case of raw material price increases. That's what we aim for.

Understood. But in falling prices, we would have to pass on the benefit as well, right? Spreads would contract.

That is correct. And we have seen that happen historically where steel price falling -- precipitous steel price falls, we retain -- as much as possible, we try to retain the value at that point and not the percentage because -- but we found that it wouldn't be fair of us to demand a percentage when it's going up and then say it's only value added. So there is that element to it. But as it stands, I think commodity price crashes are quite, quite rare. So I wouldn't see it as a high-end risk, as a high value risk for us.

We take the next question from the line of [ Ashish Soni from Family Office. ]

Sir, what's the capacity utilization of Raebareli plant on 31st December and currently?

So that's -- Raebareli has gone up. As of right now, we are at about 60% capacity utilization. We'll get to 70% by the end of this quarter.

Okay. And second question on the Ascent U.S. The order book is like hovering between USD 50 million to USD 55 million. So are we not able to scale that or are we not able to get more orders in Ascent U.S. business?

Not at all. I think we're at a place now, especially with the new express line getting commissioned. We are at a place now that we are going to be increasing that order backlog as well. So I see with the addition of new DMs, and I'm speaking specifically for Ascent Buildings and not for Telco, that's a different business model. But with the addition of our express line and a new sales team also has come on board, I see absolutely no issues with us being able to scale our order backlog. The one nuance here is in India, you can keep these 6 months, 8 months, 9 months, even longer than that sometimes order backlogs. In the U.S., it's much shorter duration. I mean 6 months is the max really, ideally should not hold much more than that because customers expect quicker delivery in the U.S.

And any plans to -- because your 70% utilization in Raebareli will happen by end of this quarter, you're saying. So any plans for any more plants in PEB in India?

We will get back to you on that, sir. There are discussions we are having on this. But I think once -- we now put the labor issue behind us. Once we reach high capacity utilization in PEB, we will look to further expand capacity. But as of right now, I don't have the numbers for you on that. Next quarter, we'll put something in front.

And one last question. Any plans on the land bank...

Ashish, I would request you to join back to queue as there are several participants waiting for their turn. We take the next question from the line of [ Parshv Shah from Mehta Equities. ]

Sir, I want to ask about the repeat orders of our PEB orders.

So a significant component of our order backlog is repeat. Sometimes it trends above 50%. Right now, I don't have an exact number, but I'm quite confident it's a high number because all of the large customers that we have, whether it's JSW, whether it's Godrej, whether it's My Home and Anthea Pharma, all of those are repeat customers. So the proportion of repeat customers in our order backlog is high and it has always been high.

Okay. And on the same line, as far as repeat orders is good, so existing order, but do you see another side of the coin that we have a lower bargaining power and high dependency on this kind of customer base?

Yes. I'm sorry, could you repeat that question? You said lower buying power? Could you elaborate?

Yes, yes. High dependency on this kind of customer...

No, I wouldn't say that. No customer contributes more than 6% of our revenue. It used to be higher 7%, 8% that's actually covered. As we grow, the diversity of our customer base is quite high. So we're not very dependent on any customer. And we don't do any government revenue either. So it's entirely private sector, and it's very diversified. So customer risk is quite, quite low. There is no possibility that exposure to a limited customer base reduces our revenue. I don't see that happening.

We take the next question from the line of Avinash Tiwari from [indiscernible].

Can you give some mix or color on your U.S. PEB order book in terms of whether it is construction related, manufacturing related, warehousing, data centers, whichever color you can give over current order book or once you are bidding up right now?

So the $52 million is a blend. It's geared more towards warehouse and data centers. Data centers is doing quite well in the U.S. A major driver of our U.S. order book and why we are very confident that can scale also is the discussions we are having on this. So yes, so primarily it is that.

Okay. Last question to Shrikant. This did you have any acquisition-related cost as well in Q3? You largely booked in Q2, but was there anything in Q3 also or Q3 was clean out of that?

Slightly. I -- maybe INR 1 crores or INR 2 crores additional cost would have come, but it's nothing more than that. I think majority of the cost was recorded in Q2.

We take the next question from the line of [ Vinod Krishna from Avendus Wealth. ]

Sir, am I audible?

Yes, please.

Sir, can you throw more light on competitive landscape in both U.S. and India in terms of PEB like in U.S., I know you're a very small player. So what is giving us the confidence that we can scale up? And as the previous participants asked, we are just -- I won't use the word stuck, but the order book looks around it remains at the same $55 million, $60 million, $50 million. So how many -- how can we scale? And why do you think we can scale in U.S.? And India, how is the competitive landscape changing? Are there new players entering? Or how is our market shares trending in India? So if I make myself clear.

So let me first clarify the $52 million number. As you are aware, if you look at the total order backlog in the U.S., which includes Telco plus U.S. Buildings, perhaps we have not been clear on that. If you combine both at the $62 million, and that's at a 30% growth over the last 6 months. So I wouldn't say that we are unable to grow our order backlog in the U.S. I would say it's quite contrary, and we expect this to grow even further. So I don't see a challenge in scaling our U.S. business revenue. In fact, double-digit growth, as we keep saying double-digit growth and that sometimes that's quite a big range. But our U.S. business is in a great place to grow quite strongly, and we are quite confident of that. And that's on the back of a fast-growing order backlog and new capacity that's been commissioned. So that's as far as the U.S. is concerned. And the competitive intensity in the U.S., you are right. We are a smaller player. We are not in the top 5. We are probably not in the top 10 either. But I think we've made a great beginning. And the market size in the U.S. is so massive that all we have to do is keep pushing out our market envelope from the Midwest and the South where we are at right now, a little more towards the West. We don't do a lot of deep south either. I think that will ensure that we have enough to sustain a high growth rate for the foreseeable future. So that's how we see the U.S. As far as India is concerned, the competitive intensity in India, we would be either #3 or #4, depending on who you ask. With Raebareli having been commissioned and with the issues that we're having on labor, I think our capacity utilization increasing helps us scale as well. So as the rest of the market is growing, I'm quite confident we can grow as well. So our competitors seem to be doing well. We will intend to grow and scale our business as well in line with them. We are not really curtailing the order backlog from what I'm hearing, this INR 810 crores, INR 820 crores going to even INR 900 crores is not something that's prohibitively difficult to do. but we needed to fix our capacity utilization issues, and that's what we are focused on. I'm quite confident both U.S. and India from a metal building space is in a good place for the next -- not just for this quarter or next quarter of this year, but over the next few years as well. So...

So my question on the U.S. was what is allowing us to grow when we are such a small guy and it's an established industry. What are the factors or the tailwinds that we -- tailwinds for the market is there, but what that is allowing us to grow?

Okay. So I think what dictates anyone's ability to grow in a market is a large addressable market and good quality assets. So in a B2B business, if you have -- B2C is harder, of course, and let me not speak of B2C. I have no knowledge of those business verticals. But in the B2B space, what our philosophy is, is that if you have good quality assets, which is not just production capacity, but good engineering talent and good DM relationships, which is what we tend to focus on in the U.S. So just the focus on these issues. In fact, just having good quality DMs itself, sales itself puts us in a position where we can very quickly take market share. So that's what's driving our growth in the U.S. And now we're present in the U.S. for 5 years. We started off at about a $20 million level. And now in the U.S., our revenue streams up. This year, we expect it to be much higher, north of $110 million, $120 million. So I don't see -- if the narrative is we're a small player, we're competing with much larger players, we'll not be able to grow. That is -- I am 100% confident is not the case.

We take the next question from the line of Prateek Bhandari from AART Ventures.

So sir, if I exclude other income, which was relatively INR 16 crores during the quarter as compared to almost INR 7 crores during the same quarter last year, then there is a degrowth in the EBITDA as well. So when you say about your EBITDA margins and when you guide for the EBITDA margins, do you guide inclusive of other income? Or how should we take it as?

Inclusive of other income, sir. Inclusive of other income. And again, I don't want to belabor the onetime expenses point too much, but what we're committing to is onetime means onetime. I shouldn't come back to you next quarter and say there's more onetime cost, right? I mean that doesn't make sense. So I think what we are guiding you to is sustainable EBITDA, EBITDA margins all growing year-on-year for us.

Okay. And also, sir, one request, if you can -- in your presentation, if you can give some detailed data about the different aspects in terms of order booking, in terms of the growth of those verticals. It would help us understand the business verticals better and as to see -- understand which of the verticals are growing and which are lagging behind. So just a request at that end.

Understood, sir. So for these 5 verticals, all of which tend to be order backlog based or scheduled customer base. We will submit a table soon. Give us a quarter or max 2 quarters on this. We are getting our decks lined up on this. I am quite confident that in the near term itself, we will be able to give you what you're asking, which is for these 5 growth vectors, give you an idea every quarter on what the market size is, what our order backlog is, what our projected revenue is going to be and the operating margins we are functioning at. I think that should go a long way towards explaining how -- what we are going to grow and how those vectors are growing. So point taken, and I agree with you.

Absolutely because those would be self-explanatory because you would also be seeing that there comes repeated questions on those verticals and the trajectories and how we are growing and in terms of order book. So that would really be helpful for everyone's sake.

Understood, sir.

We take the next question from the line of [ Vedant from MAS Investments. ]

I Are you able to hear me, sir?

Yes. Go ahead, please.

Sir, I want to know how will your U.S. business landscape change with the cut in sectoral tariff that is being discussed in a few section.

Could you repeat that question...

Sectoral tariff in U.S. is around 50%, right? Sir, I wanted to know if that is reduced. So how will our U.S. business cope up with that?

I think our major growth vectors are India and the U.S. India is about 60%, 35% is the U.S., 5% is Europe. More or less, that proportion will sustain. So the growth rates we're seeing in the U.S. and the growth rate we'll see in India, and there may be quarter-to-quarter differences. But over the 2-, 3-year time frame, I think both are poised for extremely aggressive growth, and we are quite happy with what the base we have set up in the U.S. So the...

Sir, our margins remain same or increase or decrease in the U.S. business? If the U.S sectoral tariff is...

No, margins in the U.S. tend to be remarkably stable. It's -- to some extent, I think the claim can be made that it is a less competitive space. But it is a geography where you want to invest a lot of time. I think one of the advantages we have is that we've been there directly with assets, with factories and others for 5 years and through the pandemic and through other periods of economic stress as well. So we understand the market well. But I think it's a market where you invest a lot of time. But once you do that, margins tend to be stable. There's no -- there's less price gouging and aggressive pricing. All of that doesn't really happen. It's very stable as a market.

We take the next question from the line of Rahul Kumar from Vaikarya Fund.

Just last question. This is on the U.S. business. If you can just quantify how has the order pipeline moved now versus what it was last quarter?

So we've had strong order booking in the last few months. I think as I mentioned in our previous caller's question, we've increased our DM team, and we also added a new line of sales team. We call it express plus, which is faster cycle time buildings, a lot of automation also in the manufacturing. So a combination of all of that, the overall order backlog has grown. I think if you combine both revenue streams in buildings and structural buildings, if you add Telco, you get to about $62 million. That's our order backlog right now. We have every expectation that this is going to grow further.

No, I was actually referring more to the bid pipeline, which is there based on which the success rate gives you this $52 million and $10 million. So I was wondering more what is the bid pipeline in the U.S.

By pipeline, do you mean lead generation quote activity, order booking? Do you mean that sales cycle?

Yes, sir.

Okay. So I don't have those numbers for you right now, and I will work together. I mean it's -- I can tell you it's healthy, but I think the best way to illustrate that is what is our quote activity. I will come back to you with that number.

Okay. The second question, Shrikant, can you help us understand in the diversified engineering segment, how much was the tooling sales in this quarter versus the last quarter?

Overall, the BIW sales, tooling sales have not been a major change in the current quarter from last quarter to this quarter. Overall, the increase has come from steel business, boilers and BIW. But yes, tool is not onetime event which has triggered now.

We take the next question from the line of [ Aniket from CRK. ]

Almost all of my questions were already answered. But I would still like to ask more upon the PEB part, like can I know what sort of order book we have once again because I missed the earlier given number.

Your voice isn't clear, but...

Yes, I think this is a repetitive question, but I would like to clarify the PEB order book stands at INR 810 crores. The Ascent's order book stands at -- Ascent Buildings, specifically $52 million and Ascent Structural $10 million. So if you're asking what's the order book, that's the answer.

We take the next question from the line of [ Anket ], an individual investor.

Hello, sir. Am I audible?

Yes, please. Go ahead.

In terms of -- I think people have already asked this question, but let me rephrase it. In terms of our EBITDA, because if you are including other income, I think you also said there is INR 8 crores of receivable, which we have received in this quarter, which logically should be one-off. So if I exclude just that number, I think our margins have gone down. So can you comment what -- why is that? And what is our outlook for the coming quarter and years?

Yes, it includes write-back of creditor discount as well as the receivables. These are all other income, which are basically the provisions which we make write-back of those provisions kind of thing. So as I said -- we have explained in our earlier calls, when you look at us, look other income as part of operating income and go through it and remove those onetime expenses that we have.

Sorry, on this INR 8 crores of receivables, do you expect this number to kind of continue going into future? Or how should we look at it?

Some portion will continue to come into picture, but some portions which are onetime of write-back of receivables and other things that we have that is not. And write-back of receivables and other things is not a substantial number.

Got it. And so what is our outlook for Q4?

Mr. [ Anket. ] I would request you to join back the queue as there are several participants waiting for their turn. We take the next question from the line [ Sudarshan Bajoria, ] an individual investor.

I just wanted to -- can you hear me?

Yes. Please go ahead, sir.

Yes. Last call also, you mentioned that labor issue is behind our course and Q3 should have been better compared to what we have done. Obviously, that doesn't seem to be. But can you assure us now that Q4 will have no impact of any of your past issues?

We have solved the labor problem. We solved it late last quarter. The impact -- the positive impact from that would not have been seen in the full quarter. However, in this entire quarter, you will see -- in fact, let me make it clear, you will see much higher levels of revenue in PEB India this quarter compared to last quarter. So that I can -- we are absolutely putting on the table.

Great. And the second point is with the current capacity of PEB, what could be our maximum monthly revenue we can generate?

If you were to combine India, the U.S. and the U.S. both for PEB and Structurals, are at peak capacity, let's say, let's say, 80%, I think it's fair. I don't think we should go much higher than that. We will absolutely be able to hit a revenue number closer to INR 200 crores to INR 220 crores per month.

Okay. Great. I hope that we give better results this quarter onwards because last quarter has been a bit of a disappointment. But we keep our finger crossed. And we hope no more onetime expenses comes in the picture in the future.

Thank you, [ Sudarshan ]. We will take it to heart and ensure that what we have committed, we deliver.

As there are no further questions from the participants, I would now like to hand the conference over to the management for closing comments.

Thank you for your questions, and thank you for your support. And we look forward to deliver on everything that we have communicated today. And we are quite confident that we have a great quarter and a great next financial year ahead of us. Thank you. Thanks to all of you again for your support, sir.

Thank you. On behalf of PhillipCapital (India) Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.