Sealmatic India Limited ($543782)

Ladies and gentlemen, good day, and welcome to Sealmatic India Limited Earnings Conference Call for the Financial Year Ended 31st March 2026. [Operator Instructions] Please note that this conference is being recorded. Statutory notice. All content on this earnings call is for informational purpose of a general nature only and does not address any circumstances of any particular individual or entity. Do not construe any such information or material as legal, tax, investment, financial, professional or any other advice. Content on this earnings call does not represent or constitute any solicitation, inducement, recommendation, endorsement or offer by Sealmatic. Any information, articles, statements and data set out here is subject to change any time without notice. And as such, no reliance must be placed on fairness, accuracy, completeness or correctness of any information and materials contained on this earnings call. I now hand the conference over to Mr. Umar Balwa, Managing Director of Sealmatic India Limited. Thank you, and over to you, Mr. Balwa.

Thank you, Rindum, for the introduction. Good evening, everyone, and welcome to our seventh earnings conference call. We truly appreciate you taking the time out of your busy schedules to join us today. I would also like to thank our shareholders, investors and the analyst community for your continued interest in Sealmatic. Since this is our [ seventh ] call, extensive data about the journey in the mechanical sales business is already available on the BSE website and on our social media channels. Therefore, I will keep my opening remarks brief so we can maximize our time for your questions. Sealmatic succeeded in increasing its turnover by around 2% on a yearly basis. Though the margins have come under pressure and has resulted in EBITDA of around 17% for this year as compared to the previous year of 24%. This shall be enumerated later on during this earnings call. The market is volatile because of the current geopolitical situation, but that volatility is where Sealmatic has always excelled because we don't just sell products, we sell reliable engineered sealing solutions, which in turn gave positive outcomes to our customers. Despite the strong headwind due to the changing geo and eco political climate globally, the demand for mechanical seals, specially Sealmatic products, is stable and is being driven by markets in India, Europe, Middle East, North America and other regions globally. FY 2026 has been a year of resilience and innovation. We are focused on our goal to become one of 10 global sealing technology company. A special thank you to our seal magicians for their incredible dedication, guiding us through this period of turbulence. FY 2026 brought significant challenges from geopolitical instability and economic headwinds. Despite that, we have achieved new highs in customer satisfaction and technical innovation. Our focus remains steadfast on delivering intelligent, high-quality sealing solutions. Despite intense competition, we continue to stand tall but adhering to global standards. We have created a very strong identity, the seal magicians. This is unique in the industry and has fostered a sense of pride and collective identity at our company. Global standing. We are consistently reinforcing our mission to become one of the top 10 global sealing technology company. Breaking the box, reiterating our significant signature policy: do not think outside the box, break the box. Recent milestone, achieving ISO 3834-2 certification for welding processes, in addition to the 15 prestigious quality certifications that we already have. Securing major orders for [ calavari ] class submarine, critical power projects for 660 and 800 megawatts in the thermal power industry, oil and gas applications in India and Middle East and also other remarkable orders. Our focus both today and for the midterm is to align Sealmatic legacy with our aggressive vision of 2030. We have created a robust strategy to capture a substantial market share of the oil and gas sector demand for API sales in India and the Middle East. We're actively expanding our global footprint with established sales and service centers now operating across India, Middle East and through partners in Europe, U.S.A. and South America. As we move forward, our growth will be rooted in consolidation, integration and immense value creation. We are investing in our future as shown by the expansion of our third manufacturing unit. I'm confident that we'll continue to lead this sincerity, integrity, setting new benchmarks. At Sealmatic, we have provided to our seal magicians, the needed tools, the support and the vision to succeed. Our motto is if there is a barrier, we break it. And if there is an opportunity, we seize it. I would like to extend great appreciation and thanks to our shareholders for all of their support, and to our employees, customers and partners, without whom, none of our achievements would be possible. I will now hand it over to my colleague, Firoz Chaudhary, for a brief overview on sales and marketing, followed by Mr. Ratan Kandare, who is our CFO, to share vital details about the half year that went by. Thank you very much.

Thank you so much. Good evening, ladies and gentlemen. My name is Firoz Chaudhary. I am pleased to inform that Sealmatic continues to strengthen its position as a global sealing technology company. Our growing global footprint is also reflected on our revenue composition. During financial year '25, '26, 54.36% of our revenue was generated through exports, while 45.64% were contributed by the domestic market, hence reflecting our balanced growth strategy across global and local markets. Within the export business, distributors remained our largest channel, contributing INR 40.29 crore, followed by OEM sales of INR 14.5 crore, of which, INR 8.3 crore was for API sales project, in which 45 were single seals and 76 were double seals, and INR 6.2 crore was from our regular OEM business. End user contributed around INR 1 crore. In the domestic market, OEM sales contributed INR 36.25 crore. Out of this, around INR 11.2 crore was for API sales projects, in which, about 322 were single seals and 142 were double seals and around INR 25.05 crore was for non API seals, while end-user contributed INR 11.26 crore. Together, this figure reflects the continued trust that customers place in our products and services across both domestic and international markets. Over the past year, Sealmatic has significantly expanded its international presence through active participation in some of the world's most important industry exhibitions and technical forums. Our team proudly represented Sealmatic at NEFTEGAZ in Moscow, Mine Exchange in Utah, Iran Oil and Gas Show in [ Sahara ], Oman Petroleum Show in [ Muscat ], Defense Technology Exhibition in Chennai, Turbo Machinery and Farm Symposia in Houston, RoTIC in Dubai, Westlake in Chicago, PCV Expo in Moscow, Qatar LNG Show in Doha, [ Camtech ] in Mumbai, India Energy Week in [ Goa ], and [ Editech ] in Abu Dhabi. Total 14 exhibition in the last financial year, and this has fostered the company [ 5 cr ]. One of the most encouraging developments during the year has been our success in securing and executing a significant number of critical API mechanical steel order across the Middle East. As of today, we have successfully secured and are executing approximately 916 critical API seals for projects in UAE, Saudi, Oman, Kuwait, [ Iraq ]. Out of this, 686 mechanical seals have been supplied, while around 230 seals are currently under execution. These seals are strategically supplied during the project execution space at highly subsidized price levels even below the cost of raw materials, which enabled us to establish a strong installed base and references with leading end users. This has posted the company, [ 8 cr ]. These projects are particularly important because they represent far more than a onetime equipment supply opportunity. Once commissioned, the installed Sealmatic seals create recurring and profitable aftermarket business throughout the operational life of the equipment, which generally extends beyond 35 years. This creates a sustainable revenue stream and establishes Sealmatic as a long-term technology partner, rather than simply a product supplier. We continue to work closely with some of the world's most respected end users, including ADNOC, KNPC, PDO, OC and ROO, while maintaining strong relationships with leading OEMs such as KSB, Sulzer, Sundyne, Ebara, Ruhrpumpen. In addition, we actively collaborate with major EPC contractors, including Saipem, Maire Tecnimont, Worley, Wood Group, [ Peg ] and several other prestigious organizations involved in large-scale energy and industrial projects. Our vision for the future is in one simple philosophy. That is stop selling output and start selling outcomes. We are selling reliability to highly complex process plant expertise that solves our customers' tougher sealing problems. Most importantly, we are building partnerships that last decades and not for quarters. As we move into the next phase of our journey, we remain committed to creating sustainable value for our shareholders, employees and customers. On behalf of entire Sealmatic team, I thank all our shareholders for their continued trust, confidence and support. The future remains exciting, and we look forward to achieving even more greater milestones together. Thank you very much. I now hand it over to my colleague, Mr. Ratan Kandare, who is our CFO.

Thank you, Firoz. Good evening, everyone. Thank you for joining us today. I am pleased to present the financial performance of Sealmatic India Limited for the financial year ended 31st March 2026. FY '25, '26 has been another year of steady progress for the company. Despite the dynamic business environment and industry challenges, we have maintained our growth by preparing the receivables, probability and operational efficiency. Let me take you through the key financial highlights of the year. Our sales turnout for the FY '25 '26 stood at INR 103 crore compared to the previous year of INR 101 crore, reflecting a growth of 2% year-on-year. While the growth in revenue has been moderate, it demonstrates the discipline of our business model and the trust our customers continue to place in Sealmatic products and [indiscernible]. Moving to the profitability. We achieved a profit before tax of INR 14 crore during the FY '25 '26. This represents across 14% of our total revenue, which is in line with the profitability. Maintaining of these now in a competitive and challenging environment reflects our disciplined approach towards the cost management, operational efficiency and value creation. Further, our EBITDA for the year stood at [ 18.38 ] crore, translating into the EBITDA margin of 17.36% of total revenue. This EBITDA performance highlights the effectiveness of our operational strategy and our continued focus on the productivity, process optimization and the efficient resource utilization. As we move into the FY '26 '27, our focus remains on delivering the profitability growth, strategic and the market presents, expanding our customer base and enhancing the operational excellence. We remain committed to the innovative solutions, lengthening the financial discipline and creating long-term value for all our stakeholders. Thank you.

[Operator Instructions] The first question comes from the line of [indiscernible] markets.

Yes, sir. Congratulations to the team. Sir, my first question is, is there -- Am I audible, sir?

Yes, not very audible, but we'll manage to decipher what you are trying to convey. Please continue.

Yes, sir. Sir, in your June 2025 call, sir, you had mentioned you had supplied roughly [ 4 90 88 ] [indiscernible] across GCC, sir, like Dubai, Kuwait and all. And you have guided the replacement revenue of around INR 15 crores would start from FY '27, most probably from the beginning of April 2027. Sir, what is the progress like...

I think -- sorry, please continue.

Sir, out of all 490-plus we have supplied in 2025, how many are actually commissioned on the physical running at the end user site today?

I'll let Firoz answer this question. Probably you missed it in Firoz's deliberation. Probably will again reiterate and let you know.

So Mr. [ Reddy ], we have attributed around 916 critical API seals in projects in UAE, Saudi, Oman, Kuwait and [ Iraq ]. And out of this, 686 mechanical seals have been supplied, while around 230 seals are under execution.

Okay, sir. Sir, and you had mentioned the replacement is roughly 75% of the new seal cost. Sir, can I know the -- like actual, our gross margin on the replacement versus the subsidized product seals, sir?

I think communicated many times in our earnings calls, our gross margins for this postpaid seals, which we call them as spare part business, would be around 80%.

Okay, sir. Sir, just one final question, sir. In earlier calls, you had mentioned like [indiscernible] had started from FY '27 with nuclear and naval as key pillars, with the [indiscernible] act out as now positive. And sir, the bar, small modular reactor bits are approaching. And you being the only Indian company on BHL's nuclear [indiscernible] list. Sir, are you actually quoting any nuclear field packages right now, sir?

Yes, we are actively quoting for nuclear applications for the new expansion for [ Kudankulam ], which is in Tamil Nadu. And also we are actively liasoning with BHEL and other nuclear pump companies globally as well as in India. So this project do take a lot of time. So right from the time of some bidding our offer, it would take about 2 to 3 years to finally receive the order and another 2 years to complete that order, and maybe another 1 or 2 years for the final installation commissioning. So that is the process of this business -- of nuclear. But I'll come to the larger portion of our business, which is oil and gas and refinery, which Firoz already mentioned that we have secured order for mine, 116 API mechanical seals, out of which, 700 approximately have been supplied and 200 are under execution. So this [indiscernible] period is still very much in the horizon. Unfortunately, due to the geopolitical situation in the Middle East, the commissioning has got deferred by, say, about 6 or 9 months, and we are very confident that once this turbulence in Middle East will settle, all the commissioning will start appearing.

Sir, like how much do we expect on the revenue growth and the EBITDA basis for FY '27?

On the EBITDA, I just mentioned that it would be 80% of gross margin. So if this starts, say, I'm not very sure about this year, how many spare part business would kick in, but say, with effect from 1st April 2027, all the 700 seals which we have supplied so far would get commissioned, and the recurring business would start. For this year, I don't know. I am not able to give you an accurate picture because of the situation that exists in the Middle East.

[Operator Instructions] Next question comes from the line of Pat, an individual investor.

Sir, just quick follow-up question on that. Out of that 686 seals, do you have any sense of how many of them have been commissioned, like a ballpark number, is it 30%, 40%? How much of that is commissioned in the Middle East, out of that 686?

I would say, out of the 686 seals, some would be line with the OEM in India, and they will be under transit from India to the Middle East. And most of the seals, the larger chunk has gone to UAE then Abu Dhabi, and a smaller portion has gone to Iraq for the [ rumela ] operating operations. So when we talk about 686 seals, I would say 20% would be now in the stage of commissioning, but a very slow pace, but the balance, 70% out of the 686 seals, would start get commissioning once this situation settles down. And which we see by talking to various people at the end of the level that very soon they would be starting to commission the seals that have been supplied.

Got it. Got it. And do you think the situation in the long [indiscernible] gulf I think there are more projects also coming in because of the situation. So in a way, in the long run, this may in fact, act as a -- this unfortunate thing may, in fact, act as a tailwind for you?

Yes, I mean, I'm of the philosophy that every adversity has some kind of an opportunity. I mean, though it is very sad that this war has broken out and there's a lot of destruction, but that destruction has to be reconstructed. And in that reconstruction, many pumps would be ordered. Besides the already expansion, which are going on, so I see opportunity for us over there.

Got it. Right. And sir, what happens with the Mongol project? Because that seal, I think, many API seals had been -- were in talks for the Mongol project. What's the hear test for that?

Yes. I think for that, Firoz, I would like you to answer the question.

So part -- so in Mongol, we have supplied around 118 seals and 53 are under execution.

118, you are saying, right?

Yes, 118 seals after the Mongol project, and this would now get supplied. I'm very optimistic that by the year-end, the pumps fitted with Sealmatic mechanical seals would be on their way to Mongol. But we don't like the month of December in Mongol because it would be minus 34 degrees Celsius, but that still is an opportunity for us.

Got it. And I guess the commissioning is, of course, you can comment on that because it will take us -- yes. And sir, the last question, maybe just -- you mentioned the number around the Middle East, which is around 1,000. But we beyond the Middle East, just on the API seals, we let leave the nuclear business for now. What is the number in India, Mongol and other regions combined?

Mongol, I mentioned that it is [ 109 ] seals. In India, we have quite a considerable number of API and non-API seals supplied via OEMs because we work via OEMs only. We don't directly hold the end deal for the first phase. So once our seals get supplied as a [ first rectangular ] then we start interacting. So our seals are being installed as we speak at [ ISL Panipat, ISL Matura, Baraumi, Big Boy ], and also the culture fertilizer and host of other applications where our seals are getting commissioned as we speak.

Outside, maybe is it fair to assume it might be another 20%, maybe 30%, 40% more beyond that 900 number?

Say -- I would say, I would be happy to say that there would be approximately 300 seals in India.

Got it. Got it, sir. And in general, the value of seals in India projects and the Middle East project, I mean, while they are all API critical seals, do you think that in Middle East, even for the replacement business, we'll be able to get more revenue or the [indiscernible], the quality of the seals different or better or can start of generate more revenue?

Irrespective of the geographies, the quality of the seal remains constant. Realization is higher in the Middle East because of the price levels that exist in the Middle East. Typically, it has been historically that the prices in the Middle East are the highest in the world for our products. So what we would supply at [ 1 f ] in India, it would be 1.25 in the Middle East.

Next question comes from the line of [ Deepak Poddar ] with Sapphire Capital.

Am I audible, sir?

Yes.

Sir, I just wanted to understand what sort of revenue growth outlook we have for FY '27?

We expect to grow by 15% this year.

15%?

Yes.

And then what margins?

The margins would be better this year. I think this is the benefit for all listeners.

Better in the sense? I mean, last year, I think it was 17%, right? FY '26 as a whole...

Yes, because been better because last, we participated in maybe -- are you on speaker phone, sir?

No, no, I'm not on speaker, I guess.

Because there's an echo from your side. Are your there, Mr. Poddar?

Yes, speaker, please go ahead.

Mr. Poddar, are you there?

Yes, I'm there. So you said the EBITDA margin would be better, right? So I mean, would we want to go back to our previous margin, I mean, we used to do 22% to 24% kind of EBITDA margin, right?

I would like to give a reason for that. So last year, we participated in 14 international exhibitions, and that cost itself was approximately INR 5 crores. So our purpose of participating in international exhibition has now been achieved by way of getting ourselves approved by various EPC end users and OEM. So we want to taper down on that participation. So this year, in FY '27, we would be only participating in 5 exhibitions. So 10 exhibitions, if you remove them, the result will save us approximately INR 3.5 crore or INR 4 crores. And also last year, we invested approximately INR 8 crores, which was below cost of raw material to supply API seal, and which was the highest so far. So even that would taper down, and I'm very confident that we will be achieving 23% or 24% of EBITDA for FY '27. And also end is a business, if you look at our data, end as business is still not picked in the way we expected it to kick in for this year because of the geopolitical situation, but that will all come in and will improve our EBITDA.

And in what? I missed that. I mean it was spent in which area?

I'm sorry, I didn't get the question.

So INR 8 crores that you mentioned was spend. So it was spent where? I missed that.

On the API seal, because on the API seal, normally, you have to compete, and most of the time, you're supplying below cost of raw materials.

Okay. I got it. And it would taper off in FY '27, right? I mean it would reduce?

It will taper or not, but it is possibly go away. But we can taper it off and we'll select that we will do an x number of API seals for every year. So last year, our API seal, both on OEMs in India and OEMs abroad were approximately 322 seals and 300 more seals for Middle East market. So this year, we would be going for, say, approximately 300 or 350 seals, for which we have already quoted, and this would come up for annualization during the during the year. So that also would reduce our cost of goods.

Next question comes from the line of [ Sumit Anand ], an individual investor. Since there is no reply from the line of Mr. Anand, we'll move to the next participant. That is [indiscernible] Reddy [indiscernible] markets.

Sir, there's a couple of questions on cash flow, sir. Sir, am I audible?

Yes, please.

Sir, one quick point on the cash flow, sir. Inventory rose to about INR 62 crores and operating cash flow stayed negative again this year, sir. Is this a deliberate talking ahead of the FY '27 replacement demand? Are delayed shipments in [indiscernible]?

There are a couple of reasons attached to this. The number one is that there was a delay in execution because of this geopolitical situation, the items which had to be supplied got delayed. And secondly, because of this uncertain situation where a rare or material, intentions were applied by China, and we had to stop certain items so that we wouldn't face challenges in exhibiting the orders that we already have in our hands. So the inventory has gone up for that reason.

Okay. Sir, when do you -- like when do we see operating cash flow starting positive again, sir? Can we see in FY '27?

FY '27, it would start sprouting, but I would be happy to say FY '28 would be a better period for us to judge the cash flow.

Okay. Sir, just one last question, sir. Sir, I understand like [indiscernible], but our current order book is higher, similar or lower than the same period last year, sir?

It is better than the last year. If you talk about a period-to-period comparison, say, June 2026 and June 2025, we are better off this year.

[Operator Instructions] Next question comes from the line of [ Pages Sirorka ] with [ BM ] Capital.

Sir, most of my questions are answered. Just wanted to understand a question on the industry. I just wanted to understand, apart from Middle East, because obviously, there's limited options over there. How much delay do you see the end customer is doing for your products? Like how -- for example, like how much are they delayed because of all of this Iran war tension? Can you quantify that like...

If you rate as of today, we are delayed by 7 months.

Okay. Delayed by 7 months. So all the projects are pushed?

So -- but that seal is not surprising and interesting for us and also good for us at the activity, the intensity of the activity of new projects being envisaged in the Middle East are still continuing. So nothing is affected for the new projects, which we are envisaging for the coming [ 5 ] years of implementation. So their plan to announce and to improve their oil and gas capacities, especially we see a lot of action in Abu Dhabi, a lot of action in Saudi Arabia, in Qatar, especially there's a lot of actions. So that activity is still continuing while there are delays for exhibition. But that seal has not stopped the confidence of the companies for investing money over there. So that's a good sign.

Understood. I just wanted to clarify, the 7 months is for overall or just is particular to Middle East?

Our major focus at the moment is Middle East because the spot of activity happening over there is the highest because there is no new oil and gas or refinery or any kind of petrochemical plants being put up of that magnitude and size anywhere in the world. So that's a major focus. And the other focus #2 is India for us for our kind of business.

[Operator Instructions] Next question comes from the line of [ Sumit Anand ], an individual investor. Since there is no response from the line of Mr. Anand, we'll move to the next participant, that is from the line of [ Tinad ], an individual investor.

Am I audible, sir?

Yes, please.

Yes, yes. It was really great to know the prospects. My question is, sir, now that India is also getting up for a nuclear reactor phase, and also with Sealmatic doing very well, do you see any potential institutional interest in the company, sir, going ahead? Just wanted to know your insights on that.

Mr. Tinad, I probably have heard the question, but I have not understood the sense of it. Can you please clarify what the question is?

Sir, my question was that now that the government of India is also pushing for nuclear reactors by 2032 and everything, and Sealmatic is also gaining attention both in India and also abroad, especially with the kind of certifications and standards that you have got. So I just wanted to know if there is any institutional interest coming -- or is there any talks going on or if there is anything happening in the industry, people watching Sealmatic with interest. So just wanted to know about your thoughts on that, sir.

I don't know how to answer this. But we are under a spotlight, and there has been a lot of attention from the industry in Sealmatic. It's a unique company. I don't want to grow my own comfort over here, but it's a unique company. What we have built over here is something which is unparalleled for the size of the company that we are. Of course, there are bigger company than us, the conglomerates, but leaving them on the side, as we call them as a [ 3 big boy ]. But in the Tier 2, we are the largest, and we are the most renowned player, not only in India, but globally. So yes, there is a lot of interest. There's a lot of attention coming from the industry from institutional companies and the likes. Mr. Tinad?

I got you, sir. Yes, yes. I hope we're going to become one of the world's leading companies in the coming days, so maybe take on the [ John Crane ] or the Eagle [indiscernible].

Next question comes from the line of Pat, an individual investor.

Sir, we increased in last 6 months, the API seal supplied from 492 to now 900 plus. So it's like almost double. So that's fantastic in a way. And going forward as well, like in just terms -- in terms of the orders, like not the supply, I understand some [ 2 250 ] yet to be supplied. But this 900 number, what do you think -- what's our target internally for the next fiscal?

See, on a [indiscernible] basis, if you talk purely as a senior company and which only come from experience. So I can give a thumb rule. The 700 seal supplied so far, and it's just a thumb rule, just as a late thumb rule. I would say if you put a cap of $10,000 per seal, and this is as you see, so we are talking about $7 million of business from this supply seals.

Yes. Sir, my question was not in terms of that. My question was like next year, this number, which is 900 right now, will go to 1,800, [ 1,600 ], what's our target for that?

On next year, say, 900, we expect to add our FY '27, say about 300 seals more on the API.

Okay. And sir, if I may ask, why is it less versus FY '26 because in FY '26, you added a lot. It's competitively less in FY '27?

Because the projects got delayed and there's a financial stage on a slower end at the moment. But this will all come because if you look at the number of quotations that we have submitted to our OEMs in Europe mainly and in India, we are confident of getting 300 seals -- additional 300 seals, and we'll be happy to take more. But at the same time, we also have been mindful and careful. If you take too many of these API seals, you're going to erode your margins. So it's a kind of a cash [ 200 ] [indiscernible], though as a pure sales and marketing person, I would like to take as much as possible. But if I take too much, that will also affect our cash flow over year.

Got it. So next year, maybe 300. And after that, I think next year, your cash flow also begins from the market business?

So that will allow us to subsidize more sales for OEMs.

Got it. So that number is 300 next year, but we can expect it to increase a lot going forward in the future year?

Yes.

Got it. Sir, last question, you mentioned $10,000. Sir, in the last con call, I think you had mentioned $7,000. So what's...

Yes. Because this is a compilation. This is a compilation of single seals and double seals. So I just took an average. There are single seals before, very conservative would be $7,000 dollar and a double seal would be, say, $12,000 to $14,000. If you take an average, that would be -- I'm very confident that $10,000 is a figure which will be surpassed.

Got it. Got it. And even the double seals also counts as one, right? So basically...

Yes, yes.

Yes, got it.

[indiscernible] of the year.

Next question comes from the line of [ Sanyam Shah ], Solidarity Advisors.

Am I audible, sir?

Yes, please.

The detailed opening remarks, that was very helpful. On my question. Sir, we started this API seals business 3 to 4 years back. So the delay in commissioning, the 7-month delay that we are seeing, that should primarily be for the seals that we have supplied this year, right?

Yes, please continue.

Is my understanding correct on this?

Yes. Let me hear the whole question then I will be able to answer.

Okay. So does this mean that we should see the major -- the replacement revenue of the seals that we have supplied previously? That should kick in from FY '27 or should that get delayed as well?

No. When we say we started our journey in the API business 3 years back, so 3 years that we started getting orders from the OEM, and the execution takes about 8 to 9 months. So once we supply the seals to the OEM, the OEM will take another 5 to 6 months to supply to the site of the end user. So if you really ask me, I think there's not much delay happening over there on the seals that we supplied here in India, especially for ISL [indiscernible] and big boy, they're all under various stages of commissioning. Because when we say we are commissioning or seeing, it involves a lot of civil and mechanical work, is the whole high and the gamut of work is among us. So sometimes the delays are not because of the OEM. The delay can be by ancillary contractor who is doing the piping or who's doing the boiler or who's doing the erection of any other equipment over there. So imagining a large site of a refinery oil and gas where 10,000 people work at the same time simultaneously. So I feel, as an industry person who has spent so many years, I think we're on track for the installation commissioning. So when you ask about FY '27, it would start kicking in. If you ask the numbers, I will not be able to comment on those numbers. Still, we don't really get the ground picture from the sites.

Okay. Okay. Understood. So nothing on the numbers. I understand that. But the quantum of the seals that should come, that should primarily, on a bigger part, should come in FY '28 and beyond that years?

Yes.

Okay, understood. And sir, one thing which you didn't discuss was any new update on the other verticals like defense, marine or power? I think you mentioned something on the power side in your opening remarks. If you could please repeat that, that would be helpful.

Defense and marine, still marine, when we talk about defense and marine because our area of expertise is for naval ships. So when I say defense, defense and marine is same for us. So that's happening. And any construction of a ship takes about 8, 9 years. So we are interacting with the Ministry of Defense, Indian Navy on a regular basis, and we are participating in their various projects for some marine, for auto naval seals for development of critical seals, which are being imported, they want to [indiscernible]. So there are cost of other activities. But it is bureaucratic, it takes its own time. But our focus is still there, and we are committed in delivering products to the Indian Navy. Now coming to power, which is primarily the 660-megawatt and the 800 megawatts in the [ carmel ] side. And on the nuclear side, the biggest agency involved in a nuclear power corporation, then there are contractors like L&T and host of other companies which are doing the execution. So we are very much there. We are approved. We're the only company in India as a mechanical fuel company, which has got the ISO 19443. So we are very well placed, and there's a lot of activity happening. But if you ask me about the results coming in, it will take time because this -- the nature of this industry is slow moving, but the potential is there.

[Operator Instructions] Next question comes from the line of [ Sumit Anand ], an individual investor. Since there's no reply from the line of Mr. Anand, we'll move to the next participant, that is from the line of Lokesh with ABC.

I just want to ask about the business sanction in Russia. Given the ongoing U.S. and European sanctions on Russia, do you see any business opportunity for Sealmatic in the Russian market as 3 big players are not supplying to the Russia as [indiscernible]?

Yes, Mr. Lokesh, I think you have missed the previous earnings calls. I think Russia has been a good market for us. With the sanctions coming in from U.S.A. on Russia, all the Western companies which were established in the Russian market have all left the Russian market. And it has cleared the space for companies like us. So the market is good for us. Russia has been an incredible market.

[Operator Instructions] Next question comes from the line of Pat, an individual investor.

Sir, the dollar appreciation, in general, should help you, right? Or do you do any kind of hedging?

No, we don't do any kind of hedging, in fact, it works both ways because your realization also goes up, but at the same time, your import also get hit.

But sir, for the replacement business, since it's an 80% gross margin business. I think over there, it should then end up helping, right?

Yes, absolutely. Any appreciation in dollar realization would give us more revenue.

[Operator Instructions] Next question comes from the line of [ Rajesh Ayir ], an individual investor.

So my question is now that we are seeing a good traction in the company in terms of growth and the opportunities are opening in previous sectors, end markets, and it's becoming approved supplier, do you see any need of additional capital inclusion or will the current capital sector support for all the growth into your research?

I'm sorry, Mr. Ayir, I think the line was not very clear. I'm asking you, sorry, could you please repeat your question?

No problem. Yes, I can repeat. So the question is that since you are seeing a lot of growth in this sector and industry, as you mentioned, including refineries, defense and power and seen effective, and you've given a road map of how things will pan out over the next couple of years or more, do you see any need of additional capital infusion in the company for supporting all of this growth? Or if you still get through all the internal generation?

I don't know how to answer it, but I can say that if we are going for more API infusion -- API seals infusion, and is able to subsidize and take many orders, at that time, we may need capital infusion either by trading debt or by some other means.

Next question comes from the line of [ Sumit Anand ], an individual investor. Since there is no reply from the line Mr. Anand, we'll move to the next participant, that is [ Sanyam Shah ] with Solidarity Advisors.

Sir, with the recent Middle East war happening, has it impacted any of our expansion plans in those regions? We planned to put some service centers in Oman, Kuwait, et cetera.

No, no. Our plants have not got impacted, and we are still very much committed to our journey in the Middle East.

[Operator Instructions] Ladies and gentlemen, as there are no further questions, we have reached the question-and-answer session. I now hand the conference over to Mr. Umar Balwa, Managing Director of Sealmatic India Limited, for closing comments.

Thank you so much, Rindum. I see more than 50 participants. I thank everybody for taking out their valuable time and attending this earnings call and also asking interesting questions. And while answering those questions, it also brings out a lot of conviction. We are confident that Sealmatic is on the right part, and Sealmatic will have a glorious journey as we move forward, thus making Sealmatic as one of the leading companies, not only in India, but globally as well. So I thank you all for your attention, and I look forward to seeing you all on our next earnings call. Thank you very much.

On behalf of Sealmatic India Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.