Pennar Industries Limited (513228) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Pennar Industries Q1 FY '27 Con Call. [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. Vikram Suryavanshi. Thank you, and over to you, sir.

Thank you, Atharv. Good morning, and very warm welcome to everyone. Thank you for being on the call of Pennar Industries Limited. We are happy to have with us the management of Pennar Industries for question-and-answer session. The management is represented by Mr. Aditya Rao, Vice Chairman and Managing Director; Mr. Shrikant Bhakkad, Chief Financial Officer; Mr. Manoj, President, Corporate Planning; and KM Sunil, Vice President, Investor and Media Relations. Before we start with the question-and-answer session, we will have opening comments from the management. Now I hand over call to Mr. Aditya for opening comments. Over to you, sir.

Thank you so much. Good morning. Thank you to all of you for joining Pennar Industries' Q1 FY '27 Investor Conference Call, for the quarter ended 30 June, 2026. We will cover the numbers for the quarter, take you through each of our businesses and share how we see FY '27 unfolding. I'll walk you through the quarter's headline numbers, the story behind each of our growth engines. Shrikant, our CFO, will then take you through the detailed financials. We will as usual end with the Q&A from all of you. So Q1 has come in well. Revenue grew 3.58% year-on-year to INR 884.55 crores, and PBT grew 16.04% to INR 46.8 crores. Revenue growth was moderate this quarter. A few segments moved a little slower than planned, but profitability held up because we have the business quite tightly on cost tactics. Key growth drivers for the next quarters are PEB India. The order book now sits at [ INR 1,000 crores, ] the highest we have ever carried. Revenue is going to come in through Engineering Services coming in. We have several large data center orders also that are coming in, in the next few years. [indiscernible] picks up sharply in this quarter in Q2, and we expect this business to do well. PEB U.S. also our order book is at a new peak. We have now crossed USD 100 billion in order backlog. Revenue is running ahead of what we had wilted into the plan for the quarter. And again, here from Q1 to Q2 also, we expect very strong growth here in this revenue stream. Engineering Services, Structured Engineering grew well, 26.3%, a strong quarter, and our U.S. sales team is closing more work than before. Tech Pennar has been the weak spot. The order book was [indiscernible] and a few execution flips cost at some customers. A new sales team is now in place, and we expect that trajectory to improve from Q2. Hydraulics, our order backlog is at INR 30 crores. [indiscernible] activity in the U.S. has slowed, to Europe has done well the introduction of some tariffs, uncertainty, even though it's the Senate and not the house, the expectation that something may come in is causing order backlog to order things to run a little lower than we expect. We are in wait-and-watch mode on the Hydraulics. Every other business, I think we'll have a clear articulated plan and we're confident of revenue profit growth. Hydraulics, we'll wait see for the next few quarters as far as U.S. is -- is one of the biggest markets for us for Hydraulics. So we will monitor this. Boilers again highest ever order backlog in over INR 150.75 crores. [indiscernible] this quarter. First, industrial power boiler has been achieved. It's a good pre-qualification [indiscernible] for us, allows us to dramatically improve our addressable market. And our first orders in the pharmaceutical sector, which is a new industry vertical for us. On profitability and margins, PBT margin was at 5.8%, up from 4.77% last year. Mix moving in the right direction, higher-margin businesses, PEB U.S. and [indiscernible] are growing faster and the group margin follows. So same trend that we've been on for the last 3, 4 years, and we expect this to continue. And capital efficiency rose was around 20% and ROE around 12%. We're on board to move higher. We are deliberately stocking a little more raw material and anticipation of revenue growth with PEB India, PEB U.S. and all others at a strong place in order backlog perspective, we want to put us in a place where we can dramatically expand revenue. So ROE at 12%, ROCE at 20% is lower than what we would traditionally want to see, but we will look to improve this further. And we are quite certain that September quarter, we will see very good improvements in this. So this is the quarter in summary. There's no change in our strategy to put capital into our private business units, expand our order backlogs, and consequently expand our revenue and profitability. Working capital to keep it tight and make sure our ROCE guides all of our desire. I'll now hand this call over to our CFO, Mr. Shrikant Bhakkad for the detailed financials. Thank you to all of you again, and look forward to your questions.

Thank you, Aditya. A very warm welcome to all our shareholders and investors joining us today. Q1 FY '27 reflects a continued evaluation of our business towards profitable and sustainable growth, while the quarter saw some moderate revenue growth are operational discipline and improvement in the product mix and the project execution translated into stronger profitability across businesses. Our strong priority remains unchanged. This initiative has helped us deliver double-digit growth in EBITDA, profit before tax despite the challenging operating environment. Key financial highlights, the revenue from operations has increased from (sic) [ to ] INR 870.4 crores from INR 845.7 crores, a growth of 2.9%. EBITDA increased to INR 106.8 crores from INR 94.3 crores, representing a growth of 13.3% recollecting improved products and a project mix. Profit before taxes increased by 16% to INR 46.8 crores. The most increasing aspects of the quarter is the profitability growth significantly exceeded the revenue growth, which is reflecting the strong operating leverage, and we shouldn't see values that we have been working towards over the last several years. In terms of customized design Building Solutions, the investments made over the last year, including the integration of the teleco position have strengthened our platform and customer reach in the U.S. As a result, revenue from the business in the custom design building solution has gone from INR 411 crores to INR 507 crores and continues to be an important driver for our transformation journey. Profitability of this initiative is taking time to fully materialize as we continue to invest in process strengthening activities. In India, while we have very good capacity. Execution in PEB business was impacted by operational challenges. We have strengthened the execution team, and we are focused now on improving the project delivery. In view of the -- we view this as an operational rather than the structural issues. Combination of process stenting in the U.S. and overcoming the operational issues will help us drives the growth in the customized building solutions, importantly. As Aditya has mentioned, our order pipeline remains at an all-time high. And we expect the momentum to improve over the coming quarters. we remain optimistic about the mid-term and the long-term growth of these businesses. Our diversified engineering business experienced a softer quarter due to lower activity in steel and hydraulics. And other businesses which we have exited over the years in terms of module mounting structures and Pennar [indiscernible] which has decreased our sales from INR 450 crores to INR 385 crores. How would we continue to view this business as important contributors to our diversified portfolio and remain focused on enhancing competitiveness and the operational efficiency, which continues to bring profit to the table. Coming to the margin. One of our key highlights, as I said, is the operating margins. While quarterly fluctuations remain quarter-on-quarter due to the nature, we believe the structural measures, which we plan to undertake will give us a result over the period. Gross margins have been expanded from 42.56% to 43.85% at a consolidated level. while the contribution margins has increased from 27.14% to 28.51%, right, in terms of the numbers from INR 231.81 crores to INR 252.12 crores. One of the important aspects is on other income that includes incurred interest income and bank deposits were INR 2.26 crores, gain on sale of investments, INR 2.16 crores, rental and export-related incentive, INR 3.05 crores and write-back of liabilities and provisions contributes the rest. A potential terms arises from normal business activities and treasury management activities. Coming to cost. Employee expenses increased during the quarter from INR 92.5 crores to INR 107.32 crores, up by 16% annually reflecting investment in the taco capabilities across the U.S. operations, which has increased by [indiscernible] crores. up by 37%. These investments are focused on sales and business development activities, project execution captains and the growth initiatives in the U.S. market. Coming to finance first. We continue to maintain a disciplined approach to have capital allocation to all to the financials remain slightly above our internal target during the quarter. Our long-term guidance remains around 4% as a percentage of our revenue. Interest cost for the quarter stood at approximately 4.18% this quarter, slightly higher. Term loan costs are primarily attributable to Delco acquisition cost, which has already begun contributing to the revenue growth. As the scale improves, we expect that the cost to normalize as a percentage of revenue. Working capital allocation and utilization remains related due to the investment supporting the revenue growth and the higher order book. As we move into Q2 FY '27, management's priorities to enhance the inventory to accelerate the collections and optimize the current assets. We believe this will strengthen our cash generation, improve our generation and also provide additional flexibility to our future growth initiatives. Before I close, I would just like to mention -- in terms of the milestones of our order book, we are all at a record high in terms of PEB India, PEB U.S., as well as the bundle division. This strong revenue visibility and reinforces our confidence in the growth outlook for the coming quarters of FY '27. Thank you. And I would like now to hand the call back to the moderator, and we'll be happy to take your questions.

[Operator Instructions] The first question comes from the line of Ganesh Gupta from SS Family Office.

I would like to ask that broadly with our FY '27 debt-to-equity target of 0.8, what kind of ROCE did we expect for full year FY '27?

ROCE for the year, I mean, our stated target is higher at around 50%, but we will definitely be over 20% for Q2, higher than that. For the year as an average, I think we said 25% that's at -- 25%, we can come at it.

25% being the base line and 25% to 30% range.

That is EBIT divided by capital right?

And sir, what is our revenue from the network JV in Q1 if you can answer that?

So we don't consolidate that because we are a minority shareholder in that business unit. I'm sure if we are allowed to give network numbers in that sense? Or is that something we have -- so I mean, I can tell you that it's going well. I mean order book, everything is in good shape, and I think it should -- I think it's going to be a very good value generator for Pennar. But as of right now, we don't have numbers to share on that. I think I'll have to speak with them and come back to you on that.

No worry, sir, and what kind of qualitative value has been created from that JV within the company till now.

Till now, I think I think the value of an investment would be about the valuation of that company, the equity valuation of the company. Considering the capacity being set up is 2 gigawatts, which has a top line revenue potential of about INR 4,000 crores, and the goods of 45%, I believe, in that. So I mean you would have to value what a profitable company with that kind of revenue stream would be worth. And that's a revenue stream we expect I think they will achieve. So it would difficult for me to comment on exactly what the value of that would be, but I think I can speak to them and have narrative for you on that the next time we speak next quarter.

The next question comes from the line of Nitin Jain from Fair Value Equity Advisors.

So in your PV business, the drop in EBIT margin is more than 200 basis points -- so this is, I think, the highest among your peers. A lot of your peers were able to get price hikes from clients to mitigate the steel price hike. So while we're not able to do the same, if you can elaborate.

We were able to get the vast majority of the pass through steel price increase pass-through, some I think there was a little bit of a late effect where it took some pain for us to get those increases. So a lot of them are in now our order margin contribution both in India and the U.S. are back up, but there was a period of time about a month or 2 where it didn't get passed with. It's probably what you're referring to in terms of the 200 basis point drop. I would strongly suggest you see this as a momentary extremely confident that operating margins move back to where they were for PEB India and for PEB U.S. from this quarter onwards.

Okay. So will it be this quarter or [indiscernible] over the year?

Q2.

Q2, okay. And you indicated that PEB is expected to grow well in India as well as the U.S. given the record higher [indiscernible] So what revenue growth are we expecting in both PEB as well as overall company level?

So I think PEB will be a big driver of revenue in this quarter, both India and in the U.S. As I mentioned, the order backlogs are very high. And it's all at a stage right now where join clearance is available, the working capital has been deployed or the labor situation is all of the past. So we are going to see the higher tick numbers. But as I speak of the individual thing, I think overall, as a component, you should expect to double-digit growth from last quarter to this quarter from last year to this year, every which you should see good growth in this quarter, Q2.

Sir, if you could quantify the number.

I would be providing guidance. So I think that we don't usually provide. But I would -- I think the best picture I can give you is that order backlogs are strong in revenue, double-digit growth.

And for the overall company level?

For -- I mean, individual components and overall company level the revenue would be high, growth will be high.

The next question comes from the line of [indiscernible] Shah from CRK Investment.

Sir, what is that, there was a revenue slowdown in the coming years?

So as narrative which we've been providing you for the last 3 years, that continues. We are having a fair amount of revenue decline in what we call the legacy businesses, which comprised of our steel business unit and the railways business unit. So both of those business units we're not deploying capital into those businesses. While the revenue drop there also, we believe to be temporary, I think guarantee you to that comes back. But what the messaging we have for you is that our growth vectors, which is the PEB India, the PEB U.S., boilers, BIW and Engineering Services, are all [indiscernible] The only 1 that we don't have arisen provide for you is Hydraulics because of the situation in a fair amount of confusion, but that's not -- that doesn't deal from the regular story where our revenue growth is predicated on these 4 revenue streams growing. The other legacy businesses, which comprised about INR 1,300 crores of revenue annually that has seen a little bit of a decline. So you see the smaller numbers. But if you were to remove that, then you actually had pretty good growth in our -- shall we say, our prioritized business units in the quarter. Overall, a 4% doesn't look like very high growth, but it's flat in that manner, that will be the older business units decline at this group. But either as it may I think with the higher levels of growth being achieved in multiple business units, we will be in a place to the combined entity to grow at double-digit rates.

An apple share of these legacy low-margin businesses have declined. So what kind of margins do we expect for the company for the next 2 to 3 years?

So as you see, I think over the last -- not just this quarter, for the last 4 years, quarter-on-quarter with momentary metrics, perhaps you have seen our operating margins improve as these -- as the [indiscernible] businesses reduce -- so accordingly, you've seen in this quarter as well. So our revenues only grown by 4%, our operating margins have grown at a more healthy rate. So that will continue. What we have guided to is over the next 3 years, reaching a PBT of 7%, right now at around 5% change. 5.38 [indiscernible] So we are quite confident that just executing this gets our PBT up.

Understood, sir. And can you what is the current order book of the company?

What, sorry?

Order book.

Order book [indiscernible]

So we don't combine everything. PEB India is at INR 1,008 crores. The U.S. has just crossed. I mean, it's not quarters right now across [indiscernible] in order backlog for Ascent, which is our U.S. sub. Boiler order book is at INR 150 crores. PW, we don't measure an order book, and is not just getting commissioned at over the next 3 months double our revenue from a scheduled order backlog point of view. So everything except Hydraulics is in [indiscernible]

The next question comes from the line of Shubhankar Gupta from Equitree Capital.

[indiscernible]

Sorry to interrupt, Shubhan, your voice is not clear. May I request you to please use the handset.

Is it better now?

Yes, please go ahead.

Yes, sure. So I'm just asking like, can you provide a segmental pickup of the segments, like the EBITDA for all these events if that's possible. Does this just help us aggregating how like the EBITDA has moved a bit within [indiscernible] segment.

I believe this is something we discussed last time from clarity on this. We've discussed this internally please give us a little bit a quarter we are setting these businesses up for growth, high scale, capital deployment. And I agree, it's important to get that segmental picture. If I can request you give us until next quarter to achieve this. That is directionally where we are going. We will get there, but do give us the quarter to present because -- let me be honest, we have not prepared the data for dispersal yet. We haven't -- obviously, we have a return into the company, every stream we have separate P&Ls balance sheet, it's capital efficiency. But at this point, we are currently not able to share the segmental thing. But you have the management's commitment that we get ourselves there, do give us this quarter to get there.

Sure. Sure, no problem. That's helpful. And from the other income perspective, like can we see like so other income as we I think from INR 8 crores, it has gone to INR 14 crores, INR 14.5 crores on a quarterly basis, right? Just wanted to understand like, is this something which we [indiscernible] something which is more one-off? And what is the other income anticipation at least from an FY '27 perspective?

So as I mentioned, I think perhaps not last quarter, but a couple of quarters ago. So I think it makes more sense from a reported standpoint. There's certain revenue categories we have particular in other income. These include things such as ForEx gains and all of this. Some of them -- and they're all not onetime events, they're consistent events. So really, our operating margin or contribution only makes sense when you look at our revenue, including both what their net revenue and also the other income. So it's not a separate item, which is onetime or not part of our regular income. It's just accounting law makes that in there. It is composed of various other components, including, I think, the gains that we have from sale of investments related incentives that we have got certain foreign exchange fluctuations, certain write-back of liabilities as a credit cost. So all these are part of the other income at the pedal and this would continue. We tend to target a certain operating margin, taking these into account. So removing them would perhaps not give a accurate picture because the model works because we take those into account, and we are pretty good in meeting them. As they come in, you do see a little bit of up and down on it, but the combined good income plus net in the picture -- net sales picture is what gives you our actual sales. That's the narrative provided also 2 quarters ago.

Got it. Got it. And just one last question on the debt base. So Aditya, like any plans of what are the what is the debt equity ratio we are targeting from an FY perspective, I think we had plans to reduce the same, right? So like what are the -- what are the target which we are taking on -- let's say, from a 2, 3 year lens also, not FY '27?

So the -- what we consider healthy debt versus shall I say, unseat. Now by the booked up with a treatment of LCL all that has not been combined. We would consider any debt equity around 0.7% to be healthy. From an annualized point of view, by the end of the year, we are quite confident we will be able to get close to that number. If you are slightly higher than the number, it would be because of perhaps acquisitions we have made and others. But anything higher than 0.7% is something that we will not accept. So we will ensure that -- there's also -- I mean, speaking from a compotepoint of view, there's about INR 50 crores of capital that's been ported. But INR 20 crores has been brought in already. So that too will to some extent, reduce debt equity. So that's not the major metric. But staying around 0.7% is the stated target.

The next question comes from the line of Ashit Bari from LS Finance. Please go ahead.

So I'm a new investor to the company, and I've gone through last 3, 4 years' worth of con call. A number of things I'm a little bit confident in how the goalpost keeps moving into the targeted type margin. So for example, I think in 2024, there was a stated goal of getting to 5% type margin in FY '26, that was missed. And then as you mentioned confidently about 7% back margins by late FY '28 or FY '29. Now as of today, I think Aditya just spoke about, 7% PBT margins by 2, 3 years. So I think the goalposts continue to keeps moving, which does not inspire a lot of confidence in me. So what makes you work by as an investor, should I feel very confident that you would get what you promised you would get?

Okay. So let me first clarify that. You are right. I think it would extremely inappropriate if we gave you guidance, and we switched that around and said something else. So let me try to explain how we are seeing this and maybe that will help -- so for not certain margin and we stop there. Any more then we will say, okay, we see we will reach a sort of revenue or a certain profit number and we'll stop there. Our guidance on consistent and sustainable operating margin increase and profit margin increase, which we have demonstrated over the past few years. So while they may have been an excess time in which or the time frame in which we will reach a certain percentage number, what is definitely the record we have shown is that we have in a capital efficient manner, maintaining our [indiscernible] We have managed to grow our profit margins from 2%, 2.5%, 3%, 2.5% and above that also. In fact for the quarter. We just closed, I think our PAT margin would be 4.07%. So what is creating this increase is effectively our focus on higher-margin businesses and the margins, the operating margins in these businesses even if you take our U.S. business audience, the India businesses are growing. They're focusing on operating margins, which are higher than 15%. And as the additional revenue comes in and the older legacy business revenue streams, the commodity revenue streams with lower EBIT and PAT margins go away, margins tend to expect. So that's all we're doing, and that's the narrative that's [indiscernible] Now if there is stress or a little bit of, as you put it, goalpost moving in terms of when we achieve that. That is primarily because of what we see is a quarter-on-quarter impact in terms of commodity pricing, which tends to temporary effect. But longer term, that's the right -- how do we know what our margins would be 2 years from now, 3 years from now because we have an articulated plan for where we want to be and what those operating margins in those business units would be. So if we execute that, what we've committed to you automatically happens. And more or less, it has been happening. We have doubled our margins in the last few years. So that that's the narrative I want to provide. Now when do we reach do we stop at 5 we go to 6, we go to 7 PBT versus PAT, I agreed that we should give you as much clarity as we can. But I think we put us in the best position to show you where we are headed when we show consistent profit the bad margin improvement, which we have shown. And consistent -- making sure capital efficiency, that's also important. You can't just have high profit with capital efficiency going down. So that also is something that we need to ensure happens. So we commit to you that we are targeting 25% ROCE. ROE over 10%. I mean, we used to be at 7%, 8%, ROE also has now reached 12%. So all of those margin growth. And keeping with that, our PAT margins will increase. PAT, PBT margins will increase. One other factor you want to take into account specific to this quarter is we had a higher tax rate because of 1 type somewhere in the last quarter, which we have tax adjustment relating to a clear which was INR 1.75 crores. So PBT is the metric we should use. Let's use PBT. And that, I mean, it tends to move a little bit because we have India tax code, U.S. tax core, both of which tend to be around 25%, so there's not massive changes there. But long-winded, but that's the answer I have.

Got it. So yes, I fully understand various geopolitics and other factors. And I do believe the higher-margin businesses should do really well. I'm just like -- so because I want to value the business, I don't fully understand how I should tell you it because I understand it will grow at a print, how much will it grow is a concern, right? The second question I have is. So again, like going back to some of the historical cost that [indiscernible] so you mentioned in the past that 7% PAT margin like a sustainable goal. And then at some point, I'm not sure if this was a slip of fun, but you mentioned that long term, maybe not even 10% is achievable, right? So maybe over like next 10 years, 15 years, whatever time frame. So what would stop you from getting to those numbers apart from geopolitics and the actual macro factors. What are the key challenges that the management sees in getting to those numbers?

So considering the model we follow is have large addressable markets. Our current addressable market is from a total addressable market point of view, it's INR 2.25 lakh crore, INR 2.3 lakh crores. Our specific obtainable market is about INR 80,000 crores. So the revenue we do every year from a gross point of view of about INR 2,400. That, if you look at it from our share, it's about [indiscernible] Provided our addressable markets stay large, revenue stays large. Provided the revenue stays where it is on operating margins in industries tend to be static over the longer term. They don't tend to move on too much unless there's a massive technological change. or temporary competitive intensity tends to reduce. If those things happen, a fixed cost effectively is a function of payroll and other asset costs. As long as those stay within our model, then what falls to bottom line effectively or the limiting factor for our PBT so to speak, in any business, frankly, not just for us, is effectively how much scale you can bring in and typically test half of your operating margin is at EBITDA, half of EBITDA tends to be PAT for most manufacturing businesses. So considering that operating margins were all adding right now is in the 15% to 20% range. A natural order, which will result -- will mean that you can't really get past 10% from a PAT point of view. That being said, it would be better for us to look at this as that's the Mount Everest. That's what we need to reach. Maybe Mount Everest is [indiscernible] a lot of businesses. But all of our competitors also benchmarking, if you see they're all at [indiscernible] lot of them are in excess. So the market would prevent us submitting those numbers. So what else could have a [indiscernible] one thing. So our goal is to make sure that, that doesn't become a for us to achieve our revenue to profit growth as is.

Got it. Maybe one last question. So -- what is the -- I understand there is a separate for the U.S. PEB business. Like how else are you making sure that the middle management and people who are skilled at the lower level to helping the company grow like if Aditya decides or wants to retire, what is your backup plan?

So we -- our human capital agenda is actually probably the most important for me, it is -- none of this growth, all of it is driven by me alone, it's the team. And a lot of them accomplish seasoned professionals who spend [indiscernible] in the industry where the 1 of our business units is headed by people with decades of experience in the field of the president. And there is no exception to this role. To this role. So human capital wise, we are focusing on what the company needs to look like for 5 years to now, what does it need to be? We have the dog structure mapped out. There's been several new additions in just in the last quarter, in leadership grows, we have brought in people from IME, we've gotten people from Hero Honda, senior management level, we are never talking at the manager level. We are talking at the COO, CEO or President level. We've gotten people in from [indiscernible] investments. INEL, as I said, also Wipro Hydraulics as well. So senior team member additions in the last quarter, and we expect this to 20 people to the recourse the year, all of whom are people and our attrition senior management is -- I mean, maybe a good or bad thing is quite low. So we don't really fire people off in that sense. So we believe that our human capital is strong. Our org structure has been defined for what we want to look like 4 years from now. It's good. It's lean and filled with people with a tremendous amount of execution experience. I'm very confident that they say not to be [indiscernible] there is thing called it by the customer. So tomorrow I get it by the bus, the story continues. It's not me, Aditya driven in any sense. It is driven by the team and proud of the team that we have, and they're all ambitious, and the ambition will be the limited factor, not me.

[Operator Instructions] Next question comes from the line of Vinod Krishna from Avendus Capital Private Limited.

Sir, if you can help -- I've been these companies who we have been there for the last 4, 5 years. So if you can help us understand how to think about growth because you've been guiding PAT growth of 20%. And how to think about medium-term revenue PAT growth because there is a legacy business of around 20%, 25%, which -- how does that sit? Will it really go to 0? Or will it stay there? And the other part will be growing? How should we think about tailwinds division? What are the factors driving -- giving us the ability to get market share? And then if you can help us understand that PAT 20% is the peak or will -- because you to use the world at least 20%. So if you can help us because that becomes important for us to value the company because how to think about growth drivers for each of your divisions? Is this 20% the match growth or we will definitely be used to say at least 20% PAT growth will come. So if you can help us understand, sir.

So let me speak first about the legacy business units. Steel special grades are tubing and railways businesses. These are good profitable businesses. We should not allow them to go to 0, but capital isn't infinite management manner infinite. And we have to focus on our growth drivers and ensure we don't create many, many subscale businesses. So we have decided on the growth but they are not going to deviate from it. That being said, we need to have some kind of a org corp structure, which allows those -- they should not go to 0. That would be wrong. Pennar should realize value from those revenue streams. So we have -- we are looking at what are the best ways to achieve that. We will -- it takes time to put those in [indiscernible] similar to what we did in solar, there to call our solar capabilities. [indiscernible] which has the potential to do some amount of revenue [indiscernible] It will go to 0. It's it's something that holds value for Pennar. And not value meaning it's some INR 1,500 crores, it should -- I mean what would a company like that work, that is a good question to answer. So similarly, we should do something similar for this INR 1,300 crores of legacy revenue streams in the business. And we are working on it, and we should have something for you soon. Let me put that anything [indiscernible] no commitment in terms of time line, but we are working hard on this. So that's point one. As far as PAT margin growth -- sorry, PAT grows 20% is concerned. As I said, as these new revenue streams comes in, as they take scale, the operating margin being higher and our net margins being from a PBT point of view right now in the 4%, 5% range. just adding our revenue takes care of profitability. There's no natural thing that it has to be 20% and can't be more than that. Let's take, for example, our BIW business. it's expected to double in revenue size in the next few months, once Hyundai comes in. It's the plant has been commissioned today. There's no sales involved. The programs are all there. The 3 programs. We just have to keep producing and executing well and our revenue grows and scales. We've created these fields everywhere and all of them are seats. The U.S. too, even though it's a $120 million P&L right now is a seat. There's a tremendous amount of potential there that can grow because our competitors there are in billions of dollars. So as we grow, achieve a large accessible market and get revenue streams to comply and that is something we need to execute. Once we do that, there's no such thing as 20% is the criteria or not. I think the best way to value us is to look at addressable market, look at our revenue growth and potential parent margins, which will be ranged -- it's not going to be 15%, but it's not going to be 4%, 5% or it is going to scale. So that should suffice to give a valuation range. And from a capital efficiency point of view, you should assume that we treat a 25% benchmark as where we want to be from an ROCE point of view. Those numbers together should give foundation for how we want to look at our business.

Sir, my second question is then I'm assuming that it's not a question. So I'm assuming that there are enough tailwinds because you always say which is not new market reason for growth in all these divisions, mostly -- so our PAT growth of 20% should be taken even for this year? And my second question is in the jet work, when you said INR 4,000 crores by when, sir? And how should we look at that? And -- and my assumption, if you can clarify on my assumption that PAT growth of 30% for this year also is given like full year.