Power & Instrumental (Gujarat) Limited (PIGL) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Power & Instrumentation Gujarat Limited Q1 FY '25 Conference Call hosted by Kirin Advisors. [Operator Instructions] I now hand the conference over to Mr. Ganesh from Kirin Advisors. Thank you, and over to you, sir.

Thank you and good afternoon. On behalf of Kirin Advisors, I welcome you all to the conference call of Power & Instrumentation (Gujarat) Limited. From the management team, we have Mr. Padmaraj Pillai, Managing Director; Mr. Rohit Maheshwari, Chief Financial Officer. Now I hand over the call to Mr. Padmaraj Pillai. Over to you, sir. Thank you.

Good afternoon to all who have joined in. I firstly welcome you. We really thank you from the bottom of our hearts for joining us for our quarterly conference call. This call has been arranged to update everyone about our performances and what we look at the future of our company as such. Since our inception in 1975, Power & Instrumentation Ltd. has built up a reputation as a very leading player in the electrical contracting and equipment supply industry. We have always been committed to deliver top-notch engineering procurement and construction solutions, encompassing a wide area of services, starting from supply of the equipment to the maintenance of the various electrical systems. Our service portfolio is comprehensive, covering the entire electrical requirement from generation to distribution. Through a journey of the last 48 years, we have built a very strong industrial presence with our diverse services and expanded our client base, which spans a wide spectrum of semi-government and PSU entities, central and state government organizations, telecom companies, leisure companies, hospitals, and various other industries and companies. We have established a very strong Pan-India presence and delivered exceptional results, particularly in the state of Rajasthan. Recently, we have expanded our operations into Himachal and resumed activities in Jharkhand, while continuing our significant work in Assam. This strategic regional expansion not only enhances our operational footprint, but also positions us to better serve our diverse clients across various sectors. In the first quarter of FY25, we made significant strides, and we are particularly excited about our recent contract with Ahmedabad International Airport Limited, which is held by the Adani Group, for development of a substation at the Sardar Vallabhbhai Patel International Airport, Ahmedabad. The project is valued at INR 21 crores, and this project really, really underscores our strong role in the industry and is scheduled for completion within 4 months, starting from May 2024. The current order book of the company is approximately about INR 400 crores, and with a strategic focus on completing this project within a span of 2 to 3 years. We are very optimistic about securing [ high-backed ] orders in the future with the potential value of e-order to range from about INR 300 to INR 350 crores. We have also strategically acquired a controlling stake in Peter Electrical Company Limited, and this is to move forward and expand our foothold in the electrical market. By increasing our shareholding from 15.23% to up to 60%, we aim to leverage PECL expertise in manufacturing of electrical panels, compact substations, and bus cutting systems to further enhance our capability. We are also very pleased to announce that our company has recently secured a significant contract under the Mukhya Mantri Ujjwal Jharkhand Yojana, amounting to INR 28.41 crores. These contracts involve the electrification of un-electrified and partially electrified habitation and households in the Sahibganj District of Jharkhand. This achievement further solidifies our commitment to supporting the government's vision of enhancing rural electrification and improving the quality of life for the people in this region. This not only centers our position in the power infrastructure sector, but also reflects our dedication to contributing to the socioeconomic development of the areas that we serve. As we are all aware, India's position is the third largest producer and consumer of electricity globally, with an installed power capacity of 442.85 gigawatts as on April 30, 2024. It presents an immense opportunity. We are focusing on bolstering our project execution capabilities to improve our output and position ourselves advantageously for the larger contracts. Looking ahead, our primary focus will be on optimizing the project execution, which will enhance our performances and enable us to bid for even larger and more valuable projects. Our expansion efforts are also geared towards establishing a stronger presence in the new and existing market. Now let's delve into some financial performance highlights of the quarter 1. Our total income was INR 26 crores, reflecting a year-on-year growth of 18.37%. Our EBITDA stood at INR 3.65 crores, representing a year-on-year growth of 35.42%, with EBITDA margin of 14.04%, up by 177 basis points year-on-year. The profit after tax was INR 1.87 crores, marking a year-on-year growth of 86.19%, with a PAT margin of 7.18%, which is an increase of 256 basis points year-on-year, and lands us with an EPS of 3.7. I thank you all for being here on this call. I am looking forward to discussing our progress in more detail. With this, I would like to open the floor for questions and answers.

[Operator Instructions] Our first question is from the line of Dhruvesh Sanghvi from Prospero Tree.

Congratulations, sir. I just wanted to understand what is the typical bid size that we are doing now. In the future, considering that our order books have improved and our positions have improved and now your working capital needs also will be partially or fully addressed with this fund raise. So what is the kind of per order average that we are looking at in the future that we are bidding from tomorrow or next month or next quarter?

We are looking at right -- we're looking at bidding anywhere between the range of INR 30-plus crores to about INR 150 crores of single project that we are looking at right now.

Okay. And in the past, I mean versus the past, is there a material difference to this size that we were only at INR 10 crores, INR 15 crores, and now we are targeting INR 100 crores. Is it something like that or not?

Pardon me?

What has been the change in the size of the orders that we will be doing in the future versus the past? [Foreign Language], INR 10 crores, INR 20 crores was our average size and now we are aiming to do INR 50 crore INR 100 crores jobs or no? In the past also, we...

Actually, the whole point is that in the past, we have -- what completion certificate we had in our hands enables us to quote up to about INR 140 crores as a single value order that we can bid for. Why I said with INR 30 crores is the low range and up to INR 140 crores is upper range is because we have decided that we are not going to quote anything below INR 30 crores.

Okay. So, something what we received recently of the INR 28 crores, as this kind of orders probably will stop coming to us and we will go into with a slightly higher zone?

See, it would depend upon -- actually what happens is when the government comes out with the packages, basically, I mean it would depend upon the area. Like for example, what we quoted -- what we quoted in Jharkhand, all the packages were in the range of same, INR 28 crores to INR 30 crores. There were no bigger packages. So particularly when it comes to that kind of a thing, we don't restrict ourselves because it's in our range INR 28 crores and INR 30 crores is almost the same. So we don't restrict ourselves and if you're getting good rates and you're getting good margins, I mean, there's nothing wrong in doing it. But in particular, if you ask me, I would be looking at -- in particularly if you ask me, I'll be looking at like the average price of a project not less than INR 30 crores or maybe around INR 50 crores and going right up to INR 130 crores, INR 140 crores as per my qualification.

Sure. And just 1 more question, and I will join back the queue. In terms of territory, how are we selecting? I mean, considering there will be some sort of bandwidth issues also, which will start coming in because orders will come across India, you are sitting in Gujarat, how will you start catering multiple states and how will you mobilize teams? [Foreign Language] selection criteria that I will not go beyond this and I have organization capabilities here, et cetera. What are your thoughts?

I'll tell you like we've been placed very comfortably in Rajasthan for a decade now. So that becomes one territory where we are very comfortable. So obviously, anything that's coming in Rajasthan and particularly in Ajmer, we will definitely be looking at -- I mean, like quoting for project. Apart from the ACR, previous experience of working with the airports, we've done airports across the country. So across the country, we've got our presence because we have worked there, so we have local contacts. We have local I mean support and -- I mean, the political support you need or whatever kind of things that we have, our relations built up over the last 48 years, 49 years of working in Pan-India. So that way, we do not envisage or any kind of issues when we go outside. Yes, but then as you rightly said that once when you have such kind of orders in your hands then how do you look at it? Yes, so what do you look at it is that how can I improve my credentials and how can I improve my profits. So the point is that the lesser known places have, I mean, less number of bidders basically or if it's a little tough terrain, people do not, I mean, like who have just entered this industry or coming with who don't have that kind of bandwidth would look at not going into those places. And, so we get the over advantage of being in such places. I mean that improves your margin.

Our next question is from the line of [indiscernible] Mata from Analah Capital. Please go ahead.

My question was, can you please explain your new order which you received on August 14?

Yes. So basically, this is providing of electric supply to those people who have not received electricity for last 75 years or post-independence or whatever. These are the unelectrified or partially electrified habitats. Partially electrified habitats wherein, like, how it happened is that when we started electrifying the country, I mean, particularly in the rural segment, it started off with like villages with 100 houses or more that came down to 80 houses or more, then it came down to 50 houses or more then 20, then a cluster of 5. Now what government is aiming is, even if there is 1 house, we have to provide the electricity even if it's costing us much more this thing to the government. So that way, now this is basically like those people, those areas where the electricity has not come in the last 70 years of us being in existence. So and providing the electricity supply to the unelectrified houses, basically the below poverty line people or the tribals, I mean that's the kind of work that we're going to do.

And I want to ask another question. So what is our client base? I mean, how much is from government and nongovernment?

So see, my primary focus has always been on the government jobs. But yes, here or there, we've been taking private jobs also, like, for example, the Ahmedabad International Airport that we took from Adani. And similar like, in past also, we worked for certain hotels and certain hospitals and all that. But that remains a very small part of the portfolio. That doesn't have very significant impact on the portfolio. So what our primary focus has always been on the government jobs only.

Our next question is from the line of Prateek Chaudhary from Saamarthya Capital. Please go ahead.

In your initial remarks, you mentioned order book, I mean, maybe a single order size of INR 300 crores to INR 350 crores that we will be eligible to bid after some time. So can you just tell a little more on that?

Yes. So the point is, in government what happens is there's a pre-qualifying criteria set by the Central Vigilance Commission. Because they are the people who give the criteria that what should be the bare minimum criteria of any company quoting for a tender so which is like you either have to have 1 job of 50% or 70% or 2 jobs of 40% and 3 jobs of 30% kind of a thing. So basically, what is going to happen in end of 2025 is that we will be having completion certificate of about INR 100 crores, INR 130 crores is completion certificate. So which means that we will be eligible for -- if you consider that to be 30%, so INR 350 crores, 30% would be approximately about INR 120 crores, 125 crores. So when we have the 3 completions of that volume, we'll be directly qualified to quote for single job of INR 350 crores.

This is end of calendar year '25.

Yes.

Okay. And you also said that in one of our previous calls that you will be getting into the transmission because I think what I understand is that you were on more on the distribution side as of now and you look to get into a transmission in the next few months -- what -- any updates you have on that?

Yes. The update portion is that post-November, I mean, October-November, there's going to be a lot of tenders for the transmission sector to be coming in, where the tenders have already been like finalized by the state and the central government because of the upgradation of the grid that as I was talking about it last time. So yes, we have already had our strategic tie-ups. We have already decided the segments where -- I mean, the areas where we will be participating. So that is where we are in line, definately.

And what would be our because this is a new segment that we would enter into...

No, it is not a new segment. It's only an upgradation of the current segment. See, I'm already working, I'm already putting up towers up to 33kv. Now I'm going beyond that. So it is only that the size of the tower will change, the size of the conductors will change. The nature of the job remains almost the same.

And per order, these would be higher value and on revenue as well as profitability, right?

Yes, yes, yes.

Okay. So this will start post October-November this year.

Yes, the tendering will start, I think, post October-November as our discussion with PowerGrid and as our discussion with our Power Finance Corporation. I mean the bids are going to be called post-October. Gujarat has announced about INR 96,000 crores to be spent on the transmission sector alone. Those co-tenders. They're all planning, I think probably they will all be start coming by October or something.

Okay. And on the reactive power, which you've been talking about in the previous calls, any update on that. We were supposed to...

We've been working on it very closely with a couple of PSUs who are into the renewable sector. They all require -- they all require it. But the only thing is -- the only thing is that there is still a factor of confusion for them because they are looking at a product while we are talking about a solution. So I mean, we want to be a solution provider, not actually just an equipment supplier basically, because that is not going to affect the purpose. So they are still building upon the things and how to tender it or how to come out with it and what to do about it.

And have we reached some sort of an agreement with the foreign partner we were having talks with?

Yes. So that is already -- that is already in order. It's only the -- it's already, I mean, what you call that, the initial expression of interest has already been signed by both the companies. It's only now to take it forward into a formal agreement would require me to break through and get an order at least. So that is what we are waiting for.

And do you see this as something which will -- which you will be able to crack, say, in the next 6 months or so or would it take...

As I told you, it will all depend upon the -- on the technical acceptance of this product. It will all depend upon the technical acceptance of the product. Because there is a huge requirement, which is not being right now addressed by the government, as I told you, because there is a confusion as -- I mean, in technical terms, there is a confusion between the story that whether the capacitors in itself can compensate to the problems that they are going through or that they require something even step higher because ultimately, it's the cost factor, which always bothers every project.

Okay. And final question, sir. This Ahmedabad order, which has to be the airport order -- how much percentage of that is remaining to be completed?

Almost, almost, close to about 70%.

Okay. And this, the order that you announced yesterday, that's in JV, right?

Yes.

And sir, how much is your portion of that JV?

[Foreign Language] because as I told you during all my thing is that I do not -- I normally have my -- all my labor job given on a contract basis. We are -- we look at the supply portion, we look at the engineering portion and the labor portion we normally outsource. So wherever we are working in an area outside the vicinity where you're comfortable it is always good to have a JV, local JV partner who would be handling the complete labor contract portion. So this also, it's a 100% job for us only. There is nothing, nothing like that. They will be handling the local...

They will do the entire [indiscernible] field -- our equipment.

Yes, yes, yes.

Our next question is from the line of [ Merelle D'Costa ] from [ Celeste ] Advisors. Please go ahead.

My question to you, sir, that what is your revenue and profit guidance for the Q2 FY '25 and the full fiscal year?

Ma'am pardon me. I couldn't get you.

Okay. My question was, what is your revenue and profit guidance for Q2 FY '25 and the full fiscal year.

Q2 FY '25, I think Rohit, can you answer this?

So good morning, madam. So Q2 FY, we are anticipating good growth as compared to previous year. The numbers are being not to be disclosed, but you can expect a good growth compared to the previous quarter or previous year.

Okay. And another question is, how do you expect the margins to trend in the coming quarters?

Madam, we are expecting the same to grow as you can see from the past trends of Q4 of FY '23 '24, Q1 of '24 '25. So you can see it that it is improving better as compared to the what we were doing previously.

I see. And what are the expected revenue contributions from the newly secured contracts in the next quarter?

So Madam, next quarter, we may not expect anything from the Jharkhand tender. However, we can expect some revenue, major revenue from Adani International Airport project because the completion period of that particular project is 4 months, which will be extended to 4 to 6 months. So we can expect our revenue of that into Q2 some portion and Q3 in some portion. And for Jharkhand, we may expect in a Q4 or end of Q3.

Our next question is from the line of Jairaj Jain from PSC Capital. Please go ahead.

Thank you for the opportunities. So my first question to the management is like, can you explain what is the outlook on the demand for electrical contracting services coming in the upcoming quarters?

Are you talking about from the point of the perspective of the total industry?

Yes. Sir.

So the -- right now, the total scenario is that the government has put a lot of focus on the expansion of the electrical infrastructure. The reason being that as we are moving from a 4 trillion economy to a 10 trillion economy, what is the, I mean, the government vision for the next 5 years to come in. Particularly, this cannot be just achieved by a certain sector. It has to be overall growth of the country. So which is where you are seeing in the likes of Micron coming into India, the likes of Apple shifting the factory to Bihar. So these kind of things which are happening. So for that, the basic requirement is electricity and road. So road has already been the [ emphasis ] for the last 2 elected terms of the current government. I understand the government is fully focused on providing the electrical infrastructure. So as you can see that the total spending, they have given for the electrical infrastructure is close to about INR 2.5 lakh crores in the last budget. And again, this is only the central budget. So if you look at the state budget separately then another same volume of work is going to come in from all these -- from all the other states also, so which means we are looking at about INR 4.5 crores, INR 5 crores of tendering to be done. So which means that if you look at it, which means if you look at from my perspective there are enough tenders going to come in, and there are going to be lesser players to cater to this requirement because you will not be able to get the new contractors every day to get into these kind of volumes. So it is definitely going to be -- I mean, it is definitely going to be -- next 1 decade is definitely going to be full thrust on the power sector.

Line from Jairaj sir has been disconnected, sir. Our next question is from the line of [ Sania Jain ] from Finway.

Hello, good afternoon. So I wanted to know, can you discuss the current debt levels and any plans for reduction?

Current level of?

Current debt levels and any plans for debt reduction?

Rohit, can you take this question, please?

Fund base limit of INR 11 crores and nonfund base limit of in terms of letter of credit of INR 10 crores. So going forward, as you have already seen that we are in process of raising the funds. So in future, we will try to mitigate those debts in like upcoming years, so that is outstanding as on date of debts.

So how do you plan to utilize the recent capital raised for business expansion or other strategic initiatives?

No madam, the business -- so the fund is being raised for the purpose of the majorly for working capital purpose and for certain portion we are -- for the acquisition of a stake from 15% to 60% in our Peaton Electrical Company Limited. So the utilization of the fund, which we are raising is bifurcated into these 2 things.

So, are there any significant CapEx plans for remainder of financial year '25?

So, madam, basically CapEx in our industry is more in terms of the submission of the bank guarantees, investment deposit, and the performance bank guarantees for which you need to create fixed deposits and those kind of CapEx are only. Yes, with growing from this level to another level, we definitely will be in need of some CapEx towards issuance of the bank guarantees and the performance guarantees.

Our next question is from the line of Kajal Pathak from the VY Capital. Please go ahead.

So first of all congratulations for a good set of numbers.

Thank you so much.

So my question was, how do the new contracts under the Mukhya Mantri Ujjwal Jharkhand Yojana will impact the company's order book and revenue projections for FY '25?

So basically, we would see some revenue coming in as Rohit had mentioned. We would see some revenues coming in maybe from quarter 4 or end of quarter 3 because normally what happens is with this kind of project, there's a time involved for the survey of the area because we have to decide on the number of connections to be released. We have to decide upon the line to be laid to because this will be quite remote areas. So a lot of things. So that survey would take like we are in the month of August. So let's say, September, October, November, at least 3 months would be taken for the survey. So probably, we see some revenues coming in by December or maybe the quarter 4.

Okay, sir. And sir, what are key milestones for these contracts under this Yojana.

So the key milestone is basically -- see it's basically the social growth. It's basically the social growth, which is the aim of all the government right now because imagine that we all stay in such beautiful cities where we may have 24 hours electricity and you still have brother out there living in a tribal area or a very remote location or a rural area who has not seen electricity in the house for the last 70 years, 75 years. So the pure emphasis is the social -- I mean, there is a social responsibility. It's getting those people to at least have the basic necessities of life actually.

Okay, sir. And sir what is the expected timeline for the completion -- sorry, can you elaborate on the margin expectations for the recently secured INR 28 crores approximately contracts under this Yojana?

So I think in terms of revenue, I think we will be giving you the I mean, like the numbers as and when time comes in because I think right now to give you these numbers would not be idle because we have not even started the job.

Sir, a rough estimate, like what would be the rough estimate?

It's nothing like rough. The industry works on certain patterns. I mean -- and like right now also, as I told you, I mean, we would like to restrict the discussion on the numbers as on date because I mean, it would not be this thing -- I mean maybe as quarter-on-quarter, we keep declaring, and you will see the things that are happening.

Okay. Okay, sir. And sir, how do you plan to manage the execution risk associated with these new projects?

There is no execution risk. What -- what exactly ma'am do you mean by execution risk?

Like any risk associated -- if no then okay, it's okay.

Ma'am, we have been doing this kind of projects all our lives.

Our next question is from the line of Pooja Gupta, an Individual Investor. Please go ahead. I think line from Pooja ma'am has been disconnected. Our next question is from the line of Avdhi from KRG Consultancy.

Congratulations sir. My question is what is our working capital cycle?

Rohit, can you take this question, please?

So, our working capital cycle as on 30 June 2024 stood at 85 days cycle, including the debtors -- including the entire debtors of certain amount which has been under dispute or which have been under dispute. So, cycle comes as [ 5 days ]

And sir, I have another question. Any CapEx plan for FY '25?

Madam as expected there is no CapEx. The CapEx is in a form of bidding of the new tenders and the submission of the performance guarantee and mobilization of sites, which is on a working capital purpose. However, the sumbission of EMD and the PBG is the requisition, which will be in a form of CapEx which will be kept with the department or PSUs or central PSU for a period of 2 years, 3 years or 5 years. That depends on the contract.

Our next question is from the line of Nandan, an individual investor. Please go ahead.

First of all, a very good set of numbers so congratulations. Sir, I have couple of questions. The first question is that we are going to acquire this Peaton, which is our subsidiary company or associate company I think. So what will be the valuation at which we are going to acquire the stake and we are going to raise the stake to [ 60% ]?

I'll pass this question on to Rohit, can you please?

Sir, so the valuation is under process that will be put up at the time of AGM. So currently, we are working on the valuation of the particular company. So 24 August, we have our AGM. So by that time, we will give you the valuation in the AGM itself.

Okay, sir. Sir, my next question is, what is the benefit through this acquisition? I mean if you can answer this -- what will be the thing that will help us through this acquisition? Is it like we will have some kind of ease of business or anything?

So the point of acquisition of this company is also to have any better transparency and to have better because it is a company which actually is manufacturing products and almost 50% of the consumption is by our company itself, power instrumentation itself. So we wanted to have more this thing, so we brought it in the same umbrella so that the transparency and the things are maintained in clarity.

Okay. And sir, can we expect some more -- I mean, top line addition through this acquisition? And are we planning for some more growth in that company as well?

Yes, absolutely, absolutely, we are planning because there is a new product which will be introduced probably by the month of December. So you will see those revenues coming in, in '25, '26, not in '24, '25.

Okay, sir. Now sir, the next question is, are we working on any kind of transmission order as of now? I mean any substation order or any significant order that...

Yes, we are doing. Not a significant one, but we are doing a little bit of work for the Eastern Coal Field -- sorry, for the Central Coal Field, we are doing a small project in Ranchi. So that is definitely there. But then, yes, because we have now -- we have 33kV completion and everything in order. So definitely, I mean, now we'll be looking at 132kV and above.

Okay. So as of now, we are eligible to apply for 132kV or are we going to eligible?

No, we will be eligible for 132kv.

Okay. In the individual capacity, you mean?

yes, in individual capacity.

Okay. Okay, sir. The next question is, sir, what is our revenue growth possibility that you see? I mean, since last 3 or 4 years the revenue was on the flattish end. But now, since we have got the working capital in hand. I mean the scope can be quite big. So what is -- as a shareholder what can I expect in terms of revenue growth going forward, say, for instance, for the next 2, 3, 4 years?

So I would want -- I would be telling you only one thing. You keep watching us. You are going enjoy this ride.

Okay. And sir just 1 more question. I mean we are into transmission and distribution segments. So going forward, where do you want to see the company in terms of revenue split. I mean, would we be more keen in terms of the transmission orders or into the distribution orders -- because...

See, I always believed in one thing, which is the factor if you can see -- if you see my order book also, I've always believed in 1 thing, you can't keep all your eggs in the same basket. And this is an industry where and particularly when you're catering to government your PQs become very important. So you need to keep your -- you need to keep your hand in a couple of pies because maybe today the distribution sector is bullish, tomorrow morning the transmission will be, day after tomorrow maybe again the distribution will come in. So it is going to be a mixed bag all the way. Because what happens is that if you keep -- if you are just in 1 segment or 1 line. Like what will happen is that when that particular line will go down, you will not have the credentials to quote for the other segment which is coming up. So we need to keep our hands in a couple of pies. So that's why I said that we will be there in the distribution, we will be there in the transmission. And we will be still doing the efforts as we are going because tomorrow you never know, there will be a huge boom coming into the building infra segment also. So at that time, we don't want to lose on the bandwagon. So we keep our credentials and we keep our PQs alive. So that's like it's going to be a mixed bag all the way.

Our next question is from the line of Dhruvesh Sanghvi from Prospero Tree. Please go ahead.

Sir, when you bid, you mentioned that there is a certain sense, certain style in the industry. [Foreign Language] I mean what is the bidding style. What do you think when the bid comes. [Foreign Language] It's very difficult in this kind of an EPC project to estimate the cost [Foreign Language].

[Foreign Language] If it is a short tenure job so then the percentage of margin can be lower because the realization would be much faster. If it's a long tenure job then you look at the percentage in that segment [Foreign Language] What is the kind of work? Again where is the work. For example, if I'm supposed to I'm working in Ahmedabad for example, all the means and necessity of the things are very easily available. So there is -- the cost goes down. So even if you're at a thin margin, you'll still be able to earn something. But if you are going into the rural part or if you're going somewhere where typically, it can be time consuming, typically there can be some kind of the thing. So all these factors are taken into consideration before taking the margin call. Whether this tender is going to be quoted at 10%, 15%, 20% or 40%. So that call is only depending upon what is the kind of tender, where is the tender, whether it is urban, whether it is rural, whether it is -- I mean whether the price variation clause is applicable or not. So all the things factor -- all these factors come together and then we finally decide on the margin.

And similarly, just to understand [Foreign Language] in a typical project. So because in the P&L, when we see it is all purchase of traded goods. [Foreign Language].

[Foreign Language]

I meant labor and transport would be how much? Will it be a very big part of the total or no, it will be very small?

So typically, the labor portion comes to approximately, if I'm not wrong, it should vary somewhere around 8% to 9%.

[Foreign Language] so is there a way where you give a range [Foreign Language].

[Foreign Language].

Our next question is from the line of Prateek Chaudhary from Saamarthya Capital. Please go ahead.

Sir, the new product that you mentioned, which will be launched under Britain Electrical, please share some more details on the same, which segments you will be targeting here and what could be the opportunity size? And any other products?

So basically, this is -- so basically, this is compact busway systems. Now it has been made mandatory that any building more than 10 storeys and above. I mean it is the distribution of the power inside the building, that is the cables which were earlier used need to be replaced with this basically. That is because right now, the kind of buildings that are being made, 30 storeys, 40 storeys building and particularly in the urban cities like Mumbai, Delhi, Ahmedabad, Bangalore, I mean, Chennai, all this -- all the top places I mean like. So it has been made mandatory that the cables have to be, the new buildings will not have any cables running through the building because there's a lot of fire incidents which have happened and so when now you consider a 150 storeyed or 60 storeyed building already, supposedly let's say, each floor has about 8 flats. So you're talking about 480 flats in other things, so 480 numbers of cables running through a duct would definitely be a very dangerous situation. This is -- already internationally this has been happening. I mean, the bus duct has been used. So now in India also it has been made mandatory. It has been made mandatory about 3 years back, it has been made mandatory about 3 years back. So now all the new buildings that are coming up have a lot of requirements of this particular product. So that's the 1 that we've been doing R&D on for the last about good 3, 3.5 years. We've completed it. We have installed one prototype also, which is running successfully for the last 1 year. So now we're in the final finishing stages to complete that and then get it into thing so that in FY '25, '26, we can start putting the product in the market.

And what could be the opportunity size here for building or?

So last year, the survey of the industry said that the total requirement of the industry was about INR 1800 to INR 2,000 crores and the catered manufacturers who could only manage to make it up to INR 700 crores. So there's a huge deficit in the, I mean the actual requirement to the production right now.

And you typically, so this gets sold to the builder or to the architect?

This gets sold to builder ultimately, so the builder is going to pay the money.

And that you said INR 1,800 crores is the total market size, so the INR 700 crores is being...

Yes, INR 700 crores, yes.

So the rest is being imported?

Yes, the rest is being imported, yes.

And sir, final question on the reactive power thing, since you're -- I mean, you're close to the discussion taking place with PSUs -- and you said that they need a product whereas you're giving a solution, so...

No, it's not actually what I meant by saying is that they are comparing it to a -- I mean, like when I said -- when I said that they are still confused, so they're comparing it to something, which is like something conventional, which was there for [indiscernible] in the industry, without understanding that the loads have become so dynamic right now that you have to upgrade yourself, you cannot think in those old lines. So that's what I was saying. So they are comparing it to a product to a product, while it is a product to a solution what we are providing.

Could we have some -- is there a likelihood of some success in the near future?

Yes, definitely. I'm telling you wherever I'm going and saying everybody is looking at the product and everybody is very interested in the product. But the only point is that to break open the conventional mindset, that is the toughest part because somebody will have to take the lead. So we are even discussing it with the Central Electricity Authority also because this is the thing that has to be done otherwise. And by introducing the things what we are doing is that we are freeing almost like the distribution sector can like use the same GSS and increase the capacity by at least 15% to 18%, which is like 18% if you put it, if I have 100 substations, I have to put 18 more instead of that I just put to this product mix. So we're trying to make them understand, let's see. Yes. So what I was saying -- what I was saying is that we also meeting -- we also met the Central Electricity Authority and tried to make them understand that by introducing this product, they are going to, I mean, like, free the space in each GSS, like for example, the GSS, which can cater 1000kV right now, which is using 1000kV of power. I mean it can go up to 1,200kV, so basically 20%. So which means that for every 100 substations that have been installed instead of putting up 20 new substations, which is again a very big capital also and then again the constraint of the place and everything. I mean this product can definitely help in that sector. But that is like the things are being discussed -- it's a very new thing so for people to understand it and to accept it, it'll take time.

And any regulatory sort of mandate which has come recently...

Yes, the regulatory mandate -- the regulator only mentioned. The regulatory mandate has only mentioned that the reactor power concentration should be done, like by what way they have not mentioned. So people are still exploring the conventional risks because of the cost factor or maybe because they are not wanting to understand the new product. But internationally this is the product that is being used all over.

It's already -- and this is STATCOM that you will be doing, right?

Yes.

And internationally, it's already there in...

Yes, all the developed countries.

And sir, final, any other product that or any other product or solution that we may be launching through Peaton.

Right now, this is the one thing, it's complete one, and then move forward to the next one.

Our next question is from the line of Harish, an individual investor.

Congratulations for the good set of our numbers. My question is on your -- the listing part of BSE-NSE. Our stock is listed from February under the surveillance measure. And the reason for that mentioned on BSE is that details of noncomplaint, details of -- compliance officer has not been submitted. So what is the corrective action we are taking for that?

No, I don't think there is any compliance pending from my end because if you see the ESM portion, if you see there's a disclosure that is there on the website of SEBI itself, which very clearly states that there is nothing to do with the company. The company is -- it doesn't say that the company is bad or good. It is only basically that they have a software-based thing in regards to the whole thing. And that explanation is there on there. So there is no compliance pending from my side.

No, I'm on a BSE website. It is against your share price. They are mentioning non-complement on details of non-compliance officer. [Foreign Language]. That is what the BSE Exchange is saying.

Rohit, can you?

Sir, I would interrupt into that. We have already submitted the details to the BSE. And if you can see the NSE's website, the details of compliance officer and everything are already been showing there. So let me check once with the BSE and revert back to you.

Okay. And second question is on this QIP. Is there going to be any lock-in period for this QIP investment, QIP shareholders?

Sir, that will be as per the ICDR guidelines. So whatever lock-in as per ICDR guidelines has been prescribed, the share price will be locked in for that particular period.

So what is the guideline? Can you enlight on that? What is the guideline?

So sir, basically I need to cross check with my PAs. Otherwise that is of, I guess, for promoter category is of 6 months and for nonpromoter it is of 3 months. That is what I am aware of. But I need to check exactly with my company directly.

The next question is, what is the process of getting the proposed shareholder for the QIP? How do you go about it? Suppose, in case somebody I want to offer it, how do i go about it?

So sir, definitely, if you want to go with -- whenever we are preferring for next time, prep round or anything, we can approach you and then you can show your consent to us.

Okay. Okay. But are -- is there any process by merchant banker, you have to get registered with them and they will send you the...

No, no, no. It is not like that, sir, you can send the e-mail to company as on date stating that whenever you do any further fund raising or anything, I would be happy to participate. So next time whenever we do anything new, we will first approach you. And thereafter, we will take care. If you are interested, we will welcome you. Otherwise, you can be decide.

Thank you. Due to time constraint that was the last question for the day. I now hand the conference over to Ganesh for closing comments.

Thank you, everyone, for joining the conference call of Power & Instrumentation (Gujarat) Limited. If you have any queries, you can write us at [email protected]. Once again, thank you everyone for joining the conference call.

Thank you. On behalf of Kirin Advisors, that concludes this conference. Thank you for joining us and you may now disconnect your lines.

Thank you all. Thank you all for joining in.