Solar Industries India Limited (SOLARINDS) Earnings Call Transcript & Summary

ladies and gentlemen, good day, and welcome to Solar Industries India Limited Q3 FY '25 Earnings Conference Call hosted by Centrum Broking Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Chirag Muchhala from Centrum Broking Limited. Thank you, and over to you, sir.

Yes. Thank you, Steve, and good morning to all of you, and welcome to Solar Industries India's Q3 FY '25 Results Conference Call. From the management, we have today Mr. Manish Nuwal, MD and CEO; Mr. Suresh Menon, ED; Mr. Milind Deshmukh, ED; Mr. Moneesh Agrawal, Joint CFO; Ms. Shalinee Mandhana, Joint CFO; and Ms. Aanchal Kewlani, Senior Finance Manager. So now I hand over to the management for their opening remarks. And post that, we can take questions from participants. Over to you.

Thank you so much, Chirag. A very good morning to our dear stakeholders and well wishers. My name is Aanchal, and I would like to welcome you all to the Solar Industries Third Quarter and 9 monthly conference Call of FY '25. New Year has bought pleasant surprises for us, and well wishers. We break all our quarterly reports on revenue, EBITDA and PAT. This call's recording, including the transcript, will be available on the site. The financial statements, quarterly fact sheets, investor presentation, press releases are also available on our website. To begin with, I would like to remind you that during this call, we might make projections or other forward-looking statements regarding future events and about the future financial performance. Please remember that such statements are only predictions, actual events or results may differ materially. And our website will be updated with all relevant information timely. Now I would request Solar's, CEO and MD, Mr. Manishji Nuwal for his opening remarks on the company's performance followed by Q&A. Over to you, sir.

A very good morning to one and all. I, Manish Nuwal, Managing Director and CEO, welcomes to you all to Solar Industries quarterly earnings conference call. Thank you for joining us today. To start with, I am delighted to announce that we have registered our strongest quarter yet with growth in revenue by 38%. Our Q3 performance reflects the successful execution of our strategic initiatives, propelling our net revenue from INR 1,429 crores to INR 1,973 crores year-on-year basis. This impressive surge is attributed to the efforts by our Solar team in Explosives and Defence sector. Our international business has delivered a very positive third quarter performance, which has grown by 21% year-on-year basis and have reached to the best ever to INR 758 crore in revenue terms. Solar's different business quarterly performance has picked up as we have discussed in the previous quarterly calls. The growth is around 578%, which is the highest-ever quarterly Defence revenue in Solar's history. Now it is at INR 409 crores. While domestic demand has been subdued due to the general and state elections in many parts of the country, and we have observed very heavy monsoon season in this year, which has resulted into some kind of subdued demand in the mining sector. But our long-term growth trajectory remains robust, driven by our strategic diversification. The government's active promotion of private sector participation, driven by the Aatmanirbhar Bharat initiative, is fueling modernization and innovation. Solar industries, recognizing the potential of this sector early on strategically made huge investments in building its defence capabilities, securing an early mover advantage. On this backdrop, company has signed an MOU with the government of Maharashtra for investing INR 12,700 crores in the next 10 years to establish an Anchor Mega Project in the state of Maharashtra. The nod from Cabinet Committee on security for particular -- for a procurement deal with Solar Industries to supply Pinaka enhanced rockets and Area Denial rockets to the armed forces will drive the revenue growth, open new possibilities and further establish Solar Industry's prominence in the Indian defence sector. We have already made our presence felt in the global defence market also. With a clear vision and a strong foundation, we are confident in our ability to deliver enduring value for our beloved stakeholders. Thank you for participating in today's earning call, now I will request Aanchal to share the detailed financial numbers. Thank you.

Thank you so much, sir. Thank you for the detailed and deep insight. We will now begin with the quarterly financial update followed by the 9 months update. Highlights for the quarter were: we have achieved the highest ever quarterly revenue at INR 973 crores, up by 38%; highest ever quarterly EBITDA at INR 536 crores, up by 46% and PAT at INR 338 crores, up by 52%; highest ever Defence revenue in the quarter recorded at INR 400 crores plus, highest ever order book in the quarter that is around INR 7,100 crores plus. Now let's quickly review the quarter in detail. The top line grew by 38% from INR 1,429 crores to INR 1,973 crores. Coming to the cost, the raw material consumption is almost same from 52.59% to 52.14%. In absolute terms, the material consumption cost is INR 1,029 crores versus INR 752 crores in the same quarter previous year. Employee cost is around INR 151 crores versus INR 111 crores. Other expenses cost is INR 267 crores versus INR 210 crores. Interest cost is approximately INR 31 crores versus INR 28 crores. The depreciation cost is approximate INR 47 crores versus INR 39 crores. Coming to the customer's basket, revenue from CIL was INR 259 crores against INR 235 crores. Revenue from non-CIL institutions was INR 278 crores versus INR 245 crores, up by 13%. Revenue from housing & infra is INR 257 crores versus INR 251 crores. Export and overseas revenue is INR 758 crores versus INR 624 crores, which was highest in the third quarter Defence revenue was quarterly highest till date at INR 409 crores versus INR 61 crores, up by massive 570%. Coming to the highlights for 9 months. We registered revenues to the tune of INR 5,374 crores versus INR 4,459 crores, up by 21%. Highest 9-month EBITDA at INR 1,485 crores versus INR 1,042 crores, up by 43%. Highest 9 month PAT at INR 942 crores versus INR 633 crores, up by 49%. Now we would be happy to take any questions, comments or suggestions that you may have. Over to you.

[Operator Instructions] The first question is from the line of Amit Dixit from ICICI Securities.

Congratulations for good performance, sir.

Sorry to interrupt. Mr. Amit, your voice is breaking a little bit. Can you use your handset?

Yes. I am using my handset.

Can you go again, please?

Yes. Is it better now? Hello?

Yes, yes. Please go ahead.

Yes. So my first question [indiscernible]. If you look at the export orders that we have received over the recent past, particularly the one -- the last one that we received is up INR, 2000 crores. So just wanted to get a sense on the ammunition export market, how do you see it panning out over the next 12 to 15 months? Are we seeing some more opportunities over there? And is it possible to just to know categories, where we are seeing certain [indiscernible] explosive or Pinaka, for instance, or something else that we might be getting in? That is my first question.

Yes. If you have seen that what we are working in different sectors on variety of products, one of them was high energy materials for which we have received a lot of orders from the international markets and which we have shared with all the stakeholders whenever we are getting any such kind of significant orders. But as far as the orders from Indian defence market is concerned, we were waiting for the Pinaka orders to come in, which is one will be -- which is the biggest orders for the history of [indiscernible]. So like CCS has cleared the procurement of these products, and we should be able to sign it at any moment. So let us wait for that. And as of now, the total order book of Defence is INR 4,971 crores. And once Pinaka comes in, it will be around, say, INR 6,000 crores approximate number. And if you add these two, then the total order book will be INR 11,000 crores plus, which will happen very soon. So if you summarize that the facilities which we have established for the whole Defence spectrum is being properly utilized in the coming periods. So like high energy materials, we have started giving results. [indiscernible], we have started, we are supplying to [indiscernible]. We are supplying to many PS -- defence public sector enterprises, and we have participated in many development programs on the basis of which like we are getting orders for Pinaka kind of rockets, and we are also participating in many other rocket programs. So once those start getting developed or anything materialize happen, we will definitely share with our stakeholders.

Wonderful, sir. Bhargavastra [indiscernible] and Army actually loved it. When can we -- and which [indiscernible] stage we are in when we can see possible ordering or some more development on this front?

As far as Bhargavastra is concerned, it is one of the product range for which we were working. It falls under the loitering munitions. So initially, we developed the loitering munition, which is like [indiscernible] which can work as a [indiscernible] mode, which we have received orders and supply also. We were the first company in India, which has developed this product on its own, without having any kind of foreign knowledge or foreign supply of the critical component. It was almost 100% sourced in India, which was practically our ratio of domestic content was plus 80%. And in the same line, we have started development on the anti-drone systems, which will be a hard kill and we may have a soft kill also in the future. So the recent trial which has happened at the Bakasura, which has -- we have seen that the results were quite encouraging. So this product, we are developing on our own. And within 2 years of development, we have reached to this stage. So based on these trials, we will definitely are likely to get some kind of positive traction from the end user because the whole knowledge and development is within India. So this will help the security forces a lot from strategic angle. So we may see that in 2 years' time, we should be able to start commercialization of this product.

Wonderful, sir. One bookkeeping question, if I may. What was the cash flow from operations in 9 months and CapEx so far in 9 months?

Can we share it later?

Yes, sure.

The next question is from the line of Amit Zade from Ageas Federal Life Insurance. As there's no response from the current participant, we'll move on to the next. It's from the line of Ravi Naredi from Naredi Investments.

First of all, Manish, thank you very much for nice results, you have delivered again. Sir, company has signed with government of Maharashtra for investing INR 12,700 crores in next 10 years to establish an Anchor Mega Project, please say more few words about this project and how the company will arrange the funding?

So the recent signing of MOU with the government of Maharashtra is in line with our strategic initiative to have a strong defence product portfolio in our company's basket. So it is in line with that, we have signed this MOU with the government of Maharashtra. And this is a tentative plan that we should be able to deliver or execute these projects in the next 10 years. But we are confident that we should be able to do all these investments in the next 7 to 8 years time. And if you look at the current profitability of the company, which, if you take the 9 months figure and if you convert it into 12 months figure, yearly profit after tax is around INR 1,250 crores to INR 1,300 crores. And as we are going forward, the profit after tax will also keep increasing because of the orders which we are going to receive, plus the international subsidiaries, which are going to enhance their business. And in India also, we are expanding a lot. So if you plug all these 3, the healthy cash profit will keep generating to sustain all the investments.

Exactly what is the project, this one?

Project is basically to set up the facility for manufacturing of different products for the security forces.

And it is only for Maharashtra government or it will be for pan-India working?

No, defence, it is only the government of Maharashtra.

Government of Maharashtra.

The next question is from the line of Dipen Vakil from PhillipCapital.

Congratulations on a good set of numbers. Firstly is, your defence growth has been phenomenal for this quarter. And we feel that the annual guidance is we earlier had guided for revenue top line of close to around 20% contributing from defence, and that was something around close to around INR 1,500 crores. So any revision on that guidance that you would like to present?

So yes, annual guidance, we had given around INR 1,500 crores. And for the 9 months, it has been INR 975 crores. So we feel that the annual guidance is sustainable. There may be some 5%, 10% plus/minus [indiscernible], but we are sure of reaching the guidance.

Got it. Sir, my next question is in the line of, sir, our core explosive business. So this quarter has been largely flattish when we look at the domestic explosives number. So when do you expect the market scenario to change? When do we expect the pickup in execution to start coming in even in the Explosives segment?

Volume in first half of the year has been good. We had around 12% growth in our volumes of explosives. However, we have observed that due to subdued demand due to above normal monsoon month and general and state elections over wide in the country, slower mining activity had been there, which has impacted the volume in quarter 3. As we go ahead, we have observed demand picking up from Jan '25, which should help in better volume from now onwards.

Okay. And any more order in pipeline in the Defence sector, which are there in near to medium term?

Pinaka, as Manishji has spoken, we already had the CCS confirmation and we should be signing the order. Once that comes, we will be announcing.

Got it. Got it. So execution time line for the -- so INR 7,900 crores of order, what would be the execution time line for INR 7,900 crores? And once Pinaka is confirmed, what would be the execution time line for the INR 6,000-odd crores of Pinaka?

So there are a few orders in that. So every order has different time lines. So it will range around 8 to 12 years.

8 to 12 years is Pinaka. So the other defence is also 8 to 10 years?

Yes. And this is for the Pinaka, we are speaking about. For rest of the orders, I think it's 3 to 4 years.

The next question is from the line of Narendra from RoboCapital.

Congratulations on a good set of numbers. So my first question is regarding our overall guidance that we had of 30%, if I'm not wrong, top line growth. So given that we are on the cusp of signing the MOUs for the Pinaka orders, do we see any upward revision in the guidance?

So like we've given guidance that in this year, the revenue growth should be around 30%, but like we have said, because of some slowdown in the domestic market, there is a reduction in volume growth, and that is impacting the revenue growth also. But if you remove the domestic part, in all other sections, we have been very good, including the Defence section. As far as the revenue guideline is concerned, definitely, we are falling short of 30%. But initially, the EBITDA margin and the PAT margins, which we have said, I think this year, we should do better than the last year. But we are doing even better than what we have given the guidance at the start of the year. So if you take both the things together, revenue is not increasing to that level, which we have expected, but profit or EBITDA margin are reaching to even better level than what we have shared in the start of the year.

I understand. I actually wanted to know 2, 3 years down the line, do we continue to expect a 30% kind of CAGR year-on-year for the next 2, 3 years, given that we have such a big order coming in? And also on the margin front as well, we have been continuously doing better than what we have guided. So could we see this 26%, 27% kind of margin sustaining going ahead as well?

So I can predict for the next 3 years. And normally, as a practice, we give guidance at the start of the year. But yes, because of the increase in Defence sales, which we were lagging in last many years, and increase in international operations, we see that these margins, we should be able to maintain around.

Okay.

As you are aware that business sentiments and business dynamics keeps changing. So these are our ambition to reach or achieve even better. But sometimes, 2%, 3% plus/minus is not a big thing for our kind of industry.

Yes, I understand. That's why I asked for a longer term view. Right, sir.

The next question is from the line of Sanjaya from Ampersand Capital.

Sir, 2 questions. First of all, this margin improvement that you have seen again in this quarter, do you see further upside to it? Or it is sustainable?

We cannot commit whether there will be improvement or sustainable at this moment. But like I just answered that if you look at the increase in Defence sales, better realization of facilities in the international markets and upcoming new facilities in the domestic market, we should be able to do in the similar levels of margins. Like I say, business dynamics can keep changing, which we have seen in last many years. So this is our guideline, but we cannot commit that this we will achieve on every quarter, and we will improve it further on every quarter basis.

Understood. Sir, you have seen some good order inflow in this quarter. Can you just give us some color on what were the key driver of this order inflow? I mean, which all segments were the key contributor?

We have already shared that.

The order inflow mix I'm talking about.

Yes, we have already shared the orders because whenever we are getting any material orders, we are sharing with all the stakeholders. If you just go to the -- all the -- our declarations to the exchanges, you can see all those numbers.

And last thing, sir, you mentioned that you may fall short of your guidance of 30% growth somewhat, but are you seeing improvement again in domestic market and in -- from January onwards?

Yes, it is much better than the previous last 4 months.

Next question is from the line of Ankur from HDFC Life.

Just on the same question on the domestic volume growth. What would be your guidance for FY '25? Where do you think you will end up on domestic volume growth?

So we expect that instead of 15% guidance, which we have given at the start of the year, we should do around 8% to 10%.

Okay, fair. That's helpful. And also, any outlook on ammonium nitrate prices, they seem to be kind of settling down and getting better. So how do you see that kind of playing out?

The ammonium nitrate prices, which are currently ruling are the sustainable numbers. So there can be plus/minus 5%, not more than that. And I don't foresee any increase in ammonium nitrate prices going forward.

So largely stable. Okay.

Like I said, plus/minus 5%.

Okay. Fair. And sir, just on your export and your overseas business, clearly, we're seeing this very strong growth last 2 quarters. So if you could help us what geographies or what's really happening there? What is driving this growth? How do you see this going forward as well?

So like we mentioned that the sales on our international business has grown up quite significantly. On a 9-month basis, it is almost INR 2,136 crores compared to INR 1,869 crores. So which is a quite big number, 14% increase. And in the last quarter, which is Q3, the increase was of 21%. So we think that this momentum should keep going up in the years next year.

And any countries -- sorry, yes, go ahead, please.

Please tell me, what you were saying.

So which regions -- sorry, what's helping you grow this so strongly? What I was trying to understand, which region, geographies is kind of driving this growth?

It's a mix of all that we are doing better businesses in our existing territories. We are entering new territories also. And that's why we are having better results.

The next question is from the line of Rakesh Roy from Boring AMC.

My first question, regarding Defence business, especially in Pinaka, standard Pinaka, as you say, is INR 10,000 crores. So how much is for the company? if you were saying, we are INR 6,000 crores?

Yes.

Sir, again on Pinaka. Sir, the demand for Pinaka in the international market is increasing, especially for our [indiscernible] company. So how do you see the demand for our company, our supply or do we get any order or do we get any inquiry from them?

We cannot answer on or we cannot share the details about each inquiry. But by and large, like we said that we already have some export orders for Pinaka rockets, which we have started supplying. At the same time, in India, for which this program was started, so we have received the CCS clearance, and we should sign the order any time soon. So once we have these numbers, so definitely the interest of international more countries will start growing. And once it grows, definitely, we will get some kind of better utilization of our facilities. But these kind of orders from international market or Indian market takes time. Nothing happens in 1 week or 1.5 months.

Right, sir. Sir, this extended Pinaka is a replacement for old Pinaka or they are just adding more? Just to understand and how much mix they are expecting, sir, [indiscernible] Defence?

You can discuss this [indiscernible] directly, please.

Okay, sir. And sir, you are actually saying that you are currently near to INR 5,000 crores or INR 6,000 crores you are expecting for Pinaka. And how much you are looking from Brahmos because demand from Brahmos especially in export or domestic market is increasing. So how much is improved from the Brahmos and [indiscernible], sir?

So like I said, the total order book in Defence as of now is INR 4,971 crores, and the Pinaka order should be around INR 6,000 crores. So the total order book will be around INR 11,000 crores. So this INR 11,000 crores include all; Pinaka, Brahmos, Akash, mines, grenades, [indiscernible], everything.

And the last question regarding [indiscernible]. Where we stand in [indiscernible].

So we have intention to start these programs in which we have already started working. Say if anything significant or material happens, we will share with you.

Okay. And one last question from last year, over the next 3, 4 years, where you see Defence business, where we see our revenue overall total Solar revenue in -- for Defence business?

So like for this year, we have given a guidance of INR 1,500 crores. So we have almost crossed INR 900 crores, and we should do around INR 1,400 crores to INR 1,500 crores in this year. So in the end of Q4 or once we will give guidance for the next year, we will share you that what we can achieve in the next financial year or in next year, something like that.

Mr. Rakesh, does that answer your question?

Yes.

The next question is from the line of Pratik Mukasdar from RNL Investments.

Manishji, congratulations for a wonderful set of numbers. you guys are continuously raising the bar up. So it's very heartening to see. I want to ask 1 question. Now that U.S. has a change of frames and Trump has come in and -- so does it really change the global sentiment as far as our business goes or that is just the headline and below the headline, work is going as usual and it is even getting better?

So like we have seen in the announcements or the intention of United States to stop the recent conflict, which is happening between Russia and Ukraine. But if you have to connect all the dots that what he is also saying that the NATO countries should increase the defence budget to 5% from an average of 1.6% to 2%. So if all NATO nations have to increase the defence budget to 5%, so what is the purpose for that? So if you look at the current situation and the recent scenario where practically the world's ammunitions in those countries has almost wiped out or almost became 0 level. So they have to fill up them again, which will not take less than 7 to 8 years. That is also assuming that the conflict will come to standstill. There will be no use of any ammunition in any part of the world. So if you look at the realistic situation, we believe that next 7 years to 10 years should not be a big change in the demand of ammunitions and related products.

Okay. Okay. And how do you see the mining space? Like last year, as you mentioned earlier also, because of the extended monsoon, the growth was slightly subdued. But in coming years or for the coming period, how do you see it, going forward?

We see that the drop in, say, 5% from our estimation in this year, we should be able to do around more than 15% in the next or we should be able to make up all the deficit, which we are seeing in this year.

Okay, fantastic. Congratulations.

[Operator Instructions] The next question is from the line of Bharat Shah from ASK Investment Managers.

Manish, hearty congratulations. Manish, on the -- what we have discussed many times before, given all the opportunities in the international markets plus the Defence, where we have now made significant forays after many, many years of effort to build that activity. Would we say that 20% plus kind of revenue growth for the next 3 to 5 years, that reason remains intact, right?

Sir, like we have discussed in the previous call also, we believe that 15% volume growth should not be a big issue for us, barring some 1 or 2 quarters on a horizon of 3, 4 years. So if we capture around 15% growth in our traditional market, and if you top up that with the Defence sector opening up for us in a big manner, you don't see that 20% should be a problem for us from any angle. So definitely, we should do 20% plus as far as top line is concerned. And bottom line, definitely, as we move ahead, the margins are already at a very healthy level or you can say, a very, very good levels. Even if we maintain those levels and if we enhance our efficiencies and utilization, the margin will be very good to maintain and sustain at those numbers. So 20% growth should not be a problem at all for us.

And which will mean that compared to our Coal India institutional and the other domestic intra business, both defence and international business, I suppose, would be growing at -- defence clearly, but even the international business should be growing much better than that 15% growth rate that you have talked about, right?

So if you look at the current international business, in this year also, 9 months, we have -- did around INR 2,100 crores. In the domestic market, we have done around INR 2,300 crores. So by and large, both are well divided and almost near to each other. So I think that 15% growth in the both side should not be a problem for us.

Okay. Which means about 20% plus growth over 3 to 5 years in top line, and either maintaining margin or getting some more gains due to efficiency in operational strength, plus the mix of the business favoring relatively better yielding businesses, should be kind of broader picture. Some quarters in between can pose a challenge, but that's part of the game.

Absolutely, sir.

The next question is from the line of Ravi Naredi from Naredi Investments.

Sorry, Manish, to disturb you again. This Maharashtra project is INR 13,000 crores, how much top line it gives on INR 1 crore of investment and what will be our margin? And when we start this investment on this project?

Likewise [indiscernible] that it's an MOU, which we have signed, not a final contract with the government of Maharashtra. Once we have a final detailed plan, then we will discuss with our stakeholders.

The next question is from the line of Rakesh Roy from Boring AMC.

Sir, my one question is regarding -- are we working on a new product apart from [indiscernible] product?

As we have been speaking that the CapEx we have been undertaking year-on-year is to increase the geography, increase the product portfolio and increase our geographical presence in domestic market also.

Manish, just I am trying to understand, especially in Defence business, any product we are going to add in near future?

Yes, we have been adding various products under the ammunition ranges. So as and when the products qualify and receive the orders, we inform our stakeholders.

Okay. And my last question, sir, [indiscernible], is there any plan to hype up our Defence business in the next 3 to 4 years?

Sorry. Can you just repeat your question?

Is it possible from [indiscernible] Solar, is it spin off our Defence our defense business in next 2 to 3 years after...

Currently, we have Defence in our group as a whole. For economic explosives, we have the main Defence business, so that will continue.

The next question is from the line of Yash from Stallion Asset.

My question is on your Defence segment. What is the current EBITDA margins that you're making? And will they improve from here?

So the current EBITDA margin for our company is around 27%. We believe that it should continue in the coming period.

I'm just talking specific to Defence, sir.

You can ask such things, but we will answer only one thing that we, as a business as a whole, we are achieving around 27% EBITDA margin, and we should be able to continue the similar margins.

Got it. And sir, what would be your guidance for our CapEx for FY '26 and FY '27?

That we will give in the end of Q4 results.

Okay. Got it, sir. And regarding the INR 6,000 crores of Pinaka order, so this will be like they will be materializing in your order book in FY '26 once you sign the documents or are they in process? Like what is the status of it?

We should be signing the contact anytime soon because after the CCS has cleared the -- basically the procurement of these products from Solar. And at the same time, there is another Defence PSU government undertaking. So once we have cleared, it's a matter of time, and we are expecting it to get it signed very soon. So we will definitely share the news with our stakeholders once we sign the contract.

Sure, sure. And sir, my last question is again on the MOU with Maharashtra government. This project will have products which are like not your conventional products related to missiles or explosives. There'll be something completely new that you're working on?

Just go through that MOU, which we have shared notification with the exchange. You can see the things which we have already covered. So those things will give you clarifications.

The next question is from the line of Alisha Mahawla from Envision Capital.

A couple of clarifications. Earlier, we mentioned that the order book -- the existing order book ex of Pinaka execution should be 3, 4 years. Is this for Defence or the total INR 7,000-odd crores order book. Second, for Pinaka, if you could help us understand that while the execution is 8 to 10 years, what kind of milestones or how will the ramp-up happen? And third, what will be incremental investments that would be required for Pinaka that we may probably have to undertake?

So the total order book from non-defence is around INR 2,151 crores, that is INR 2,151-odd crores. Those orders are for the next 2 years. And as far as Defence is concerned, the international orders are in a time line of 3 to 4 years. And once Pinaka comes in, the order will vary from 7 to 12 years' time. once those comes in, we will share the details. And as far as investments on Pinaka thing is concerned, we give annual -- we have already shared that in this year, we're going to do a CapEx of around INR 1,200 crores for the group as whole. So that covers all those investments.

Sure. While I understand the execution time line of 7 to 12 years, will it be possible to maybe also share a little bit color on how will the ramp-up be happening?

Color means what you want to understand?

Will it be starting from '26 onwards? And if there is any milestone or maybe is it going to be slightly back-ended, it will ramp up and maybe only be meaningful for us from a revenue perspective, say, '28 and beyond.

We will see that once we sign an order within 6 months and deliveries will start, and we are geared up for that. And there will be practically consistent deliveries of the products unless otherwise that if there is any some special situation emerges, which require us to delay the supply or due to any kind of supply chain disruption. So those are natural business scenarios. But apart from that, we should be able to deliver the product based on -- because there are 2 products in this order. So one order will be for 7 years, one order will be for 12 years. So ramp-up will start from next financial year from Q3.

Next question is a follow-up question. It's from the line of Dipen Vakil from Philip Capital.

Yes. Am I audible?

Yes.

Sir, my question is on the line of our ammunition side of business. Sir, we are seeing some huge growth potential coming on the ammunition side of it. So can you highlight what kind of orders are anticipated here? Or what kind of growth are we seeing in the ammunition side of it now and even going ahead?

Mr. Vakil, I have answered these questions repeatedly in this call. You can go through the transcript, you will get the answer.

I'll look into the transcript then.

the next question is from the line of Nishant Chowhan from Geojit.

Am I audible?

Yes.

Sir, on the Defence orders, we've talked about our current order book of around INR 4,971 crores. So just wanted to know, are these more export orders or are they for the domestic consumption?

It includes domestic and international.

Okay. Because I think last quarter, we mentioned about 2 big orders, which were for export orders itself. So it would be largely export-oriented or domestic?

As of now, the orders are mainly for international market.

And sir, secondly, we've talked about entering Kazakhstan and Thailand as per our annual reports. Any update on that, sir?

Yes, the unit at Thailand has already started. Kazakhstan, we should start in the next 2 months' time.

As there are no further questions from the participants. I now hand the conference over to Mr. Chirag for his closing comments.

Yes. Thank you to all the participants for their presence. And thank you to management for giving us the opportunity to host this call. Sir, would you like to make any closing remarks?

Yes, Chirag. We appreciate your participation and interest in our company's performance, and we will be very happy to see you again in the closing quarter of FY '25. Thank you so much, everyone.

Thank you all. This concludes today's conference call.

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