Standard Engineering Technology Limited (SETL) Q3 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Standard Engineering Technologies Limited Q3 FY '26 Earnings Conference Call. [Operator Instructions]. Please note that this conference is being recorded. I now hand the conference over to Ms. Monali Jain from Go India Advisors. Thank you, and over to you, ma'am.

Thank you, Steve. Good evening, everyone, and welcome to Q3 and 9 Month FY '26 Earnings Call of Standard Engineering Technology Limited. We have on the call Mr. Nageswara Kandula, Managing Director; Mr. Ramakrishna Kandula, Executive Director; Mr. Venkata Mohana Rao Katragadda, Executive Director; and Mr. Anjaneyulu Pathuri, Chief Financial Officer. We must remind you that the discussion on today's call may include certain forward-looking statements and must be therefore viewed in conjunction with the risks that company faces. I will now request Mr. Nages to take us through the financials and business updates, subsequent to which we can open the floor for questions and answers. Thank you, and over to you, sir.

Dear shareholders, investors, analysts, partners and well wishers, good evening all, and thank you for joining us today. It is my privilege to present to you the Q3 and 9 months FY '26 performance of Standard Engineering Technology Limited, a period that marks strong financial execution, strategic transformation and the laying of foundation for our next phase of global growth. During Q3, we formally completed an important milestone with change of our company's name from Standard Glass Lining Technology Limited to Standard Engineering Technology Limited. Let me be very clear, this is not a departure from glass lining. It is an expansion of our identity to reflect what we have already become. Glass lining remains at the core of our DNA, and it continues to be one of our fastest-growing and most-profitable verticals. However, over the last few years, the company has evolved into a high-precision integrated engineering platform, capable of delivering complex multidisciplinary projects with single-point accountability from concept to commissioning. The new name reflects our expanded engineering capabilities, our turnkey execution strength, our global ambitions and our role as a long-term strategic partner, not just an equipment supplier. This evaluation has been deliberate, disciplined and customer led. The initiative announced earlier have now been fully implemented during Q3. We successfully completed the acquisition of Scigenics Private Limited, significantly strengthening our position of bioprocess, fermentation and life science systems. We acquired a majority stake in C2C Engineering Private Limited, now renamed Standard C2C Engineering Private Limited, beginning process mechanical, civil, HVAC, electrical instrumentation and automation engineering fully in-house. With this integration, Standard Engineering Technology Limited today operates as a true end-to-end engineering solution company, capable of executing large complex and regulated projects with speed, precision and accountability. While our engineering platform has broadened, I want to reiterate that glass lining remains a major growth engine. Shell and tube glass lining heat exchangers developed with our Japanese partner, GL Hakko, have been historical market acceptance. Our 200 units already in order book, 100 units successfully delivered. These products are increasingly replacing graphite and alloy alternatives due to superior safety, life cycle, performance and reliability. Conductivity glass lining reactors. One of the most exciting developments in our journey is the successful execution of conductivity glass lining reactors. Multiple units have already been manufactured, supplied and executed successfully. Customer feedback has been extremely encouraging, especially from regulated pharma markets. From April 2027, we will officially launch conductivity glass-lined reactors in India and global markets. Our international partner, [ IPP ], has expressed a strong interest in selling a majority of these reactors globally, which we see as a powerful validation of the technology. We firmly believe these products has the potential to redefine safety standards in pharmaceutical and chemical processing worldwide. The Union Budget 2026 with a nearly 10% increase in allocation to the Department of Health and Family Welfare created a strong structural tailwind for us. Pharmaceutical, biotechnology, advanced manufacturing facilities in a company like ours, deeply embedded in precision engineering and turnkey execution, this translates into a long-term demand, visibility across greenfield and brownfield projects. Financial performance, strong and consistent. Coming to our financial performance, total income for 9 months FY '26 grew by 23.6% to INR 562 crores. Q3 FY '26 income increased by a strong 37.1% year-on-year to INR 196 crores. Profitability improved in line with the growth. EBITDA for 9 months FY '26 stood at INR 102 crores. Q3 EBITDA increased to INR 34 crores. PAT grown 18.8% for 9 months FY '26, and by 28.3% during Q3. These numbers reflect disciplined execution, improving operating leverage and the early benefits of our integrated engineering model. Order book, exports and -- we enter the next financial year with a strong and [ robustful ] order book, growing traction on turnkey engineering, glass lining, heat exchangers and advanced technologies. Export contributed already at 15% with significant headroom for growth. Robust order inflow in FY '27, strong export raw material, continued focus in profitable growth, capital display and execution excellence. Behind every milestone stands our people, our engineers, technicians, partners and customers, whose trust and commitment fuel our progress. Standard Engineering Technology Limited today is not just a company. It is a platform for long-term value creation, a company built on engineering depth, technological leadership, and global ambition. Thank you for your continued trust and support. With that, we will be happy to open the floor for questions. Thank you all.

[Operator Instructions] The first question comes from the line of Raman K. V. with Sequent Investments.

Congratulations on good set of numbers. So my first question is with respect to the margin. The margin has declined from 18.6% to 15.1%. And in the previous quarter also when we asked about the margins, you said the margins will be improving sequentially. So I just want to understand what was the major reason for the decrease in the margin during your quarter? Or is this the new normal, 15% going ahead?

Margin, sir, actually, we -- last call, I told margins going to increase. We expected this 4.5 million export is happening, but third quarter only 1 million export is happened, and next quarter, we are going to do 3.5 million export. That is due to the company name changed. And again, we went to [indiscernible] to get license. Eventually got license. And equipment is ready to dispatch. So fourth quarter going to -- slightly that, that whatever declared thus far is going to increase in fourth quarter. Due to that, slightly this has decreased our profit. Okay? Any further question?

Mr. Raman K. V., does that answer your question?

So yes, just a follow-up on that. How much was the impact due to labor code? Have we taken any impact on the labor code changes?

Sorry, sorry. Say again, please? The line is not clear. Please say again.

Have we taken any financial impact due to a recent labor code changes?

Your voice is not clear.

Myself Anjaneyulu. So the labor code impact has been evaluated from the management side, and we had already compared with the labor code already whatever that basic thing -- that 50% gross and everything has been compared already. There is no additional impact which needs to be considered in the financial statements.

Understood, sir. And sir, my second question is, we have acquired 2 entities, Scigenics and C2C Engineering, in the previous quarter, as you mentioned. Can I know what is the current run rate of these businesses?

Sorry, can you please repeat?

Sorry. Your voice is...

Raman sir, can you please use your handset. We are not able to hear you clearly.

Can you hear me?

Yes, far better.

Yes. So I just want to understand that the 2 entities which we acquired, Scigenics and C2C Engineering firm, what's the current quarterly run rate of this? And how much do you see the potential to scale this business?

These companies -- whatever we acquired, that companies are size-wise very small. Our strategy also -- earlier also I said same thing. But technical and intellectual wise very high. And C2C, maybe last year -- this year, they are going to touch maybe INR 20 crores, INR 22 crores revenue. Next year, we are targeting -- going to at least to double or triple their revenue. That is possibilities are there and C2C revenue. And Scigenics -- Standard Scigenics also maybe -- after they came to Standard Technology under, maybe 25% to 30% growth is going to happen in Standard Scigenics also. So both companies have bright future. Total addressable market is very high. But due to some management constraints from there growth is not happened. Now we are pushing things, and we are introducing our whole customer base, domestic and globally. So bright -- very bright futures are there at both companies.

Understood, sir. And sir, we only -- in the previous quarter, you mentioned we have acquired 51% stake. Are we planning to acquire the remaining 49% stake in C2C?

At present, no. At present, their management will continue. They are very strong in engineering. They are very good people, old management, and they have 20 years' experience. So they have very, very good contacts in the market. We are also happy to continue with them. They strengthen our technical and engineering aspects.

[Operator Instructions] The next question comes from the line of Koushik Mohan with Ashika Group.

Sir, I have -- just a small understanding over here. Can you help me with -- currently also -- last quarter, we told that there is some exports which will be delayed. Again, it got -- it was going to come in Q3. Now we have the reason by telling that we have changed the name and that's the reason this exports is not happening, right? So will this be passing on or it will be in the same in line for the Q4? Are we going to meet our growth guidance, whatever we have suggested?

Yes, yes, you're exactly correct. And 4.5 million, 1 million completed in Q3. 3.5 million is almost in packing condition. That is going to complete in Q4. So whatever we committed, 13% export, that is going to be reached. That we are going to reach 100%.

Sir, and on the sales side, we have grown on a Y-o-Y basis around 36% -- 36%, 37%. On Q-o-Q, we've grown around 4.8%. But when we look at on the gross profit margin, we made a gross profit of 38.9 percentage. But when we look at Q2, we made around 35.6%. There was an improvement in the gross profit. But when it was flowing down to EBITDA -- I can understand the employee cost. That is because of labor code. But also, when we see our total expenses, that has also increased as per the revenue. So is there any -- why -- because majority of costing is coming under other expenses. If possible, can you give more clear understanding on other expenses? Why is this too high in this quarter?

Yes, Koushik, I'll just give you the logic behind it. One second, sir. I'll just give you the logic behind this. Maybe what you observed is perfectly right. So here, there are 2 reasons. One is increase in the employee benefit expenses. We had -- we are recruiting the people at a high level to get into the new end-user industries as well, and we are building the team to get into the new end user industries. That is one reason. And second one is the increase in other expenses, mainly due to the increase in the consumption of the consumable item, which will be primarily used in the projects. So because of which, these 2 expenses have got increased in the current quarter and Y-o-Y as well.

Okay. So that means that -- can I understand that Q4 this will not happen and the Q4 margins will improve? Is my understanding right?

Because -- since we have recruited the manpower also, this will get...

Q4 is the largest...

Yes.

Sorry?

I mean continue. I mean continue.

Yes. Since we have recruited the people, this will be the...

Can I tell?

Yes, you can tell, sir.

Can I tell? Can I answer?

Yes. Yes, sir.

Q4 is going to complete the whatever balance exports, and also growth also good. So profit going to -- for Q4 is going to increase.

Got it, sir. So sir, then that means that our Q4 numbers will be more better than whatever we can expect, because whatever has been one-time costing over here, it will be -- not be considered there.

Mr. Koushik, last year also we announced this year we are going to grow 25% to -- 25%. 20% to 25% this is going to grow. More than -- maybe more than.

That will help for us for the growth part. And sir, one clarification only. Like recently, we have pledged our shares, right? Can we understand what's the reason, if it is possible?

Sir, that is promoter personal process via [ CBCS ]. That's nothing related with company. Company has cash in the bank and cash INR 50 crores. And even though CC also -- today we are using only INR 40 crores in CC. This business is growing year-on-year -- sorry, quarter-on-quarter. And CC units also we are using at least INR 40 crores. So cash flow -- company cash flow or company cash, everything is very strong. This is [indiscernible] only promoter's processing thing. That's all.

[Operator Instructions]. The next question comes from the line of [ Ram Arvind ] with ithought PMS.

And just a question on the shell and tube glass tank heat exchangers. So this is going to have a considerable amount of our top line starting from FY '27, right? So I want to know if we have -- like what sort of order inquiries do we get, that is from which segment service sectors do we get order inquiries for the high-alloy heat exchangers, not the glass tank one, but the normal high alloy heat exchangers. That's my first question.

Hello? Excuse me. Can you speak -- can you ask again question please loudly? Your voice is not coming properly. I am out of country. That's the reason. Please kindly...

Yes. Can you hear me now?

Can you speak loudly, sir? Yes, yes. Now yes.

Yes. So apart from the glass-lined shell and tube heat exchanger, which we are going to be starting on full flow from FY '27, which is going to hit our top line, so I want to know what other heat exchangers, so which is the high alloy heat exchanger, which segment is this mainly being catered to? And that's the first part of the question. And secondly, do we have a steady order pipeline or do we have inquiries from the petrochemical and oil and gas sectors? That will be my first question, and then I'll come with the next question.

See, this heat exchanger will be replaced with silicon carbide, high alloy heat exchanger and graphite, particularly graphite. Graphite is 80% industry is using because of low cost, but previously failure and particle issues. This is the solution we are providing. And high alloy also lot of intake is there. Coming to silicon carbide, price is 5x compared to this glass lining. With glass lining, life also very long life, at least minimum 15 years. So this 3, 4 areas [ MOCH ] we are going to replace. And we have multi -- I said 200 we booked. But we are limited. Because of April onwards, we are going to fulfill our capacity in Japan. Also we have expanded clients. And India also will be new clients completely. It's going to complete coming 4 weeks. So April onwards our capability is we can produce 300 heat exchangers per month. And average price, we are considering INR 12 lakh heat exchangers. But how many -- how much -- immediately 300 maybe we can't tell. Every month, we are targeting. First quarter at least 100 -- each month 100, 150 we are planning to sell. This is a big market. India have 2x those opportunities, shell and tube heat exchangers. Global also there. Global also we are -- global requirements are firstly to Europe. And U.S. market purpose, we are planning to start some sample equipment. And our global partner, [ IPP ], also waiting about these products. The high alloy estimated life is 4 years, 5 years. But here many people they don't bother about cost. But 4 years, after 5 years, this is going to fill again the supply. But this is going to be a permanent solution to market.

Since already our revenues is close to 80% catering to the pharma sector, right, and even the glass-lined shell and tube exchangers will again -- I assume that will be going towards the pharma sector. So how is the like revenue diversification happening here?

Pharma requires that, but I sold -- in India first heat exchanger I sold to SRL. Later then I sold to Ducan and I sold to Anupam Rasayan. These are all chemical clients. And I reviewed recently -- CDMO players -- many CDMO places I've given recently big orders, [indiscernible]. And almost -- I think single order. 45 numbers we received from [indiscernible], 40, 45 something. Like that. We are unique, and so this product no alternate suppliers. So this is very big. But we are now -- once April -- once we start in India assembly center, then we can full pick up. But equally, this product is required in chemical and pharma. Petrochemical less, not much. But pharma and chemical, and in this area it's very, very much required.

Okay, sir. Understood. On the high alloy heat exchangers, so which sector do you mostly get orders from, sir? Is it from the oil and gas...

Sorry?

Or petrochemical? So for the high alloy heat exchanger, which sectors do we get orders?

Wherever high alloy heat exchangers are using. In oil and gas also, that place also we can replace. But based on application. Suppose vapor and coolant also both are corrosive, the heat exchangers are not suitable. Wherever one side corrosive, second side coolant is normal [indiscernible] and we can generally use those. Gujarat Fertilizers also -- GSFC also we are discussing. They are facing many problems. They are importing heat exchangers. A lot of the discussion is going on. But we are not fully ready. That's the reason we are slowly launching. But God's grace, successfully we supplied 100 numbers. All are happy. And clients are asking again when we are going to supply. But recently, we announced we are going to supply April onwards full. We have started order booking. And prices also wherever -- now prices are very high from import from Japan. Now recently, we reduced another 20%, 25% prices to heat exchangers. And our aim to sell more heat exchangers into the Indian market. And same time, our revenue growth, and same time, our customers are going to get benefit. This is our aim.

Okay. Sounds good, sir. Just one last question on the C2C acquisition. So can you just help me to like give some light on what exactly C2C does? And how it's going to help with your engineering capabilities, apart from equipment sales? Like how you're going to like transition to a solutions provider?

C2C acquisition -- actually, last 3 years back, we decided our company -- product company to slowly become a solution provider. So based on that -- in-house engineering team is there. We are doing 3 -- our capability is 4, 5 projects for -- at a time, we can handle 2 engineering teams, in-house engineering team. But more demand from market, more demand day by day increasing. And also suddenly we got opportunity, C2C opportunity. C2C is a 20 years old company. They build scratch to complete plant -- high engineering plant, Duncan, Berger, Bayer, and many, many companies. They build Dr. Reddy's, [indiscernible]. They work with many -- pharma and chemical both and paint industry also and food also, and even battery reprocess plants also they build. They will give complete basic -- concept to completion. Means they will give -- suppose anybody who have land, they will give full concept. They will provide basic engineering. They will provide detail engineering. They will complete, engineering they will provide. And the Standard Engineering Technology is possessing 80% in-house equipment. So we are capable in-house equipment manufacturing and supply, [indiscernible] up to water [indiscernible]. So this is -- we have now full capabilities, end-to-end. Earlier also, we have enough engineering capabilities. But after C2C acquired -- C2C have high engineering technologies. So based on this, we are -- so complete solution provider, you will get a complete solution provider. This is only one company in the world. Sir, you can look into the manufacturing [indiscernible], you will understand. Many engineering companies are there, many equipment manufacturers are there. Many equipment means independent businesses. Some company is manufacturing only tools. Some company is manufacturing 2, 3 equipment. Some company will standard variety of equipment. But we are coming to -- we have engineering capabilities, and 95 variety of equipment we are in-house manufacturing. It's not only manufacturing. We are supplying completely. We are taking to our responsibility. So customer also feel happy. So we are providing complete solution. That is -- that purpose we are acquiring C2C.

[Operator Instructions] The next question comes from the line of Krishna, an individual investor.

Yes. I was checking this Q3 financials. I understand there was a jump in the inventory by INR 20 crores in absolute terms. May I know the reason for the same, why there was so much jump in the inventory?

Sorry, sir, your voice is low. Anjaneyulu, can you answer that question? I didn't understand that.

As he explained already -- hello? As he explained for America, so most of the export equipments are also ready, which is the inventory, which needs to be delivered in a month. Because of that, that inventory levels are high. That is one thing. And second one is we have acquired the Standard Scigenics as well, right? So there is some inventory over there, which is not in the Q3, which is in Q -- sorry, which is not there in Q2, which is there in Q3. These are the 2 reasons, primary reasons.

Okay. If we see the -- for financial year '26-'27, '27-'28, considering the recent acquisition of C2C and what the extra subsidiaries we have incorporated in the U.S., what will be the revenue top line expectation for '27-'28 in the absolute terms?

Nages sir, can you answer top line for the '27-'28 financial year after considering the acquisitions of C2C and Standard Scigenics.

Yes. Considering that U.S. got incorporated, the subsidiary of our Standard Engineering.

Sorry to interrupt, sir. Nages got disconnected. I'll reconnect him. Just a second.

Yes.

Ladies and gentlemen, the lines to management has been reconnected. Please go ahead. Krishna, could you please ask your question again?

So I was checking for financial year FY '27-'28, what will be the revenue guidance considering the recent acquisition and the subsidiary once we incorporate in the U.S.?

Nages sir, can you hear us? Ladies and gentlemen, the line for the management has been disconnected again. Please wait while we reconnect them.

Hello?

Yes, sir, I can hear you. Please go ahead.

Yes. As per the earlier discussion also, I think we have mentioned in earlier calls also, our objective is to grow our revenues at 25%, our objective is to grow at 25%. We continue to grow our revenue targets at that same level. If net go up also, considering all these things, but our objective is to grow our revenues at 25%, which is clearly an event based on the 9 months revenue -- current 9 months revenue versus previous year 9 months revenue as well. So our objective is to grow like that.

Okay. One last question. What will be your revenue contribution from the U.S. market?

Sorry. Come again?

What shall be your revenue from the U.S. market -- revenue contribution from the U.S. market?

You mean to say for FY 2026-'27 financial year.

I am speaking for '27-'28. '26-'27 I mean -- '27-'28, not '26-'27.

Yes, '27-'28, it will go -- it will increase significantly. But our long-term objective is to go -- long-term objective is to increase our export revenue significantly, considering the relationship that -- considering the collaborations that we have with Biocon and IPP.

The next question comes from the line of Maitri Shah with Sapphire Capital.

Hello? Am I audible?

Yes, ma'am.

One second. Sorry. Sir, can you connect Mr. Nages sir once?

Yes, sir, I can connect.

Yes, yes, I am there, sir. I am there.

Okay.

Yes. Can I go ahead?

Yes.

Yes.

Okay. Firstly, I wanted to just check in about the 2 acquisitions that we did, the Scigenics and the C2C Engineering. Could you speak of the current revenue per quarter of those 2 companies?

So your question is like what is the revenue from the Scigenics business and C2C business in the current financial year, right?

Yes, correct. And not including them in our books, just on the stand-alone basis, what these companies are earning?

Yes. Based on the previous financial year, their revenues were somewhere around INR 25 crores. And current year, it is expected to grow -- expected to touch financial year '26 somewhere around INR 40 crores in the case of Standard C2C. And in the case of Standard Scigenics, it is going to touch somewhere around INR 35 crores to INR 40 crores in the current financial year, without considering the effective date of the acquisition date I'm telling.

Okay. Okay. And we're expecting a 25% growth rate for FY '26 as well, for this year or this current year or fiscal year as well?

Sorry. Come again? Your voice is breaking a bit. Can you please repeat?

Yes. So for FY '26, are we expecting a 25% growth in the revenue as well?

Yes, yes. And this is very evident from the 9 months to 9 months as well.

Correct. And since you said that we had a delay in the export for quarter 3 and most of them are going to come in quarter 4, what sort of sustainable margins do you see, because now we'll see a year-on-year increase in the export sales as well? So what sort of sustainable margin profile you see in the EBITDA level going forward from fourth quarter FY '26 and also from FY '27?

Yes, yes, madam. It is going to -- slightly going to increase. And revenue also we are expecting very good growth in next --'27. Q4 also. Q4 is going to -- we're trying to complete...

Any sort of number? You can give an update, sir -- any number you can give on the sustainable margins we can use?

Present margins slightly going to increase, madam. That I can say. Number-wise, we can't. But slightly we are going to increase, better position.

And exports this year, we are targeting a 13% of our total revenue. What goal do you have in the next 2 years from exports? What sort of contribution do you expect from exports coming in? Can we reach a 25% number? Is that possible?

25% maybe next year maybe not possible. Chances are there, but not sure. But we can reach 15% to 20% surely. 15% to 30% we can.

Okay. Okay. That is great. And what differential do you have in the exports versus the domestic sales? So how much more margins are we earning on the export side of the business?

Exports always better, ma'am. Export division is always better compared to domestic.

Correct. But any number you can give, like what sort of differential do you have percentage-wise?

No. We can't disclose that type of detailed [indiscernible], okay?

Okay. Okay. Makes sense. And it was mentioned in the...

Tariff -- tariff was there.

Correct, correct. In the presentation, we have mentioned that we are going to incur INR 130 crores of CapEx in the next 2 to 3 years. What sort of CapEx amount are we going to incur in FY '27? And if you could kind of explain what are we adding to the CapEx, what capacities are we adding?

Existing facilities we are already -- we started investing this year. How much this year we invested in CapEx? What is it till date?

INR 30 crores till now, current year.

INR 30 crores -- sorry?

Current year INR 30 crores, and totally somewhere...

Another -- fourth quarter also we are going to invest another INR 20 crores. And existing facilities, we are improving and that improvement maybe another INR 30 crores, INR 4 crores, INR 50 crores. Total INR 200 crores gross block. Capacity we are creating INR 2,000 crores. And greenfield also, we are building one more project. That is in -- we got permission. And the first phase, we are going to build the -- some 4.5, 5 lakh square feet we are going to build in the first phase. And 3 lakhs square feet we are within -- we targeted '27 to complete.

The target is to complete the rest?

That CapEx investment maybe greenfield investment, maybe -- first year maybe -- next year maybe we are going to invest INR 70 crores to INR 100 crores, we feel we're going to invest on that project.

And this will be commissioned by when?

This -- 1 year it will take. '27 financial year, first phase may be availability to start the production.

Okay. So 1 year for commissioning and INR 70 crores to INR 100 crores is the CapEx. Is that correct?

Yes. That is greenfield. Greenfield, I'm talking about.

That is greenfield. Yes, yes, that's greenfield. Okay. And close to INR 30 crores to INR 50 crores next year will be invested in the existing plant?

Yes, yes, madam. Correct. You're absolutely right.

So a total CapEx -- so a total expenditure of INR 100 crores to INR 150 crores on CapEx will happen in FY '27?"

Yes.

[Operator Instructions] The next question comes from the line of Sai Kumar, an individual investor.

So my question is on the shell and tube glass line heat exchangers. So you said from April, you are going to commence 300 units per month. So like if you want to reach -- so for example, you are starting with 100 units per month. So how much time it is going to take for you to reach the 300 unit per month capacity utilization? So what is the time frame you have in your mind?

We are creating day 1 300 heat exchangers capacity in Japan and India also same day, because of 80% equipment we are manufacturing in Japan and 20%, 25% approximately we are manufacturing in India. So both places, we are creating capacity. Once launch, customer acceptancy -- customer acceptancy is good and we -- based on customer response only. But capacity, we are already going to create April month onwards 300 numbers. That is based on customer acceptance. Once the customer wants -- customers' orders is 300, we can supply. That's the reason 1 month -- immediately maybe we will not get the order, 300 number. That's the reason I said 100 numbers comfortably we can book per month. That is we are planning.

So initially, you are going to start 100 per month. And slowly by year-end or 1 year or 2 years, you will reach 300 unit per month. That is...

Not 1 year. We have to see. We want to see. As soon as possible, we want to utilize the capacity full fledge. That is our target. Anyhow we are producing every month 150 reactors, every month. And every reactor is required 2 heat exchangers. That purpose only, we created 300 heat exchanger capacity. And other competitors also every month they are producing 600 reactors, all other manufacturers. That 600 also required heat exchangers. But for this part, the others don't have. So that opportunity also we will get. So this is -- that's the reason. Next year -- I hope, 100% I'm sure also, next year, we are going to become the largest glass lining equipment manufacturer in India. Earlier some people are claiming 50%, I'm the market leader, like that, not 50%. I'm going to tell confidently. So we are going to become the largest glass lining equipment manufacturer in India. This is not only challenge to glass lining heat exchanger. Reactors also without gasket we launched. That is high response from clients. And conductivity glass lining reactors. And recently, Laurus Labs given one big order. And Hetero is -- first Hetero is -- built one CDMO plant. They have given conductivity glass lining order. And big price -- very high response. Every year Sun Pharma is facing static issue and they have given one reactor order. We supplied successfully. Wherever we supplied -- Laurus Labs is to be supplied, but Hetero and Sun Pharma we supplied. They are very happy. This also -- this product also don't have any alternative competitor. And Europe is based on -- we explained Europe and U.S. markets. We are going -- our partner, IPP, going to sell. So these all things if we consider, we are going to become the largest glass lining equipment manufacturer in India '27 financial year.

Okay. So one more question, sir. Last year, your sales is around INR 615 crores, and this year, you are telling around INR 750 crores, and exports will be 13% of the revenue. So my question is, then last year sales no exports. So we are just growing like around -- by 5% in the domestic sales. So my question is like why so low growth in the domestic sales?

No, not low growth. This is a manufacturing company. This is not a -- manufacturing creating capacity. We are increasing the capacities, manufacturing capabilities and adding manpower. This year, we are growing 25%. So next year, may be more, more and exciting year next year. So growing, that is export and domestic. Why we are more focused on export? Because of high margins.

Okay. So exports you're...

Not domestically. We are focusing more export, so high margin -- purpose of high margins. So that is -- domestic growth or export growth, ultimately growth is important, high profitability. Top line and bottom line, both are important in any business. That is we consider.

Okay. So export -- I mean, that was my question, like -- but margins are still coming down, because as you're telling, exports you are trying to increase. As you said, margins are high -- a bit high for the exports. But as you see, the margins are a bit coming down. So can you please quantify what was the reason like for coming down?

You know that is -- I said for Q3, we expected 4.5 million export, but we did only 1 million. And Q4, we are going to do 3.5 million. Margin is slightly going to increase. Next year, we are targeting EBITDA -- is more EBITDA. We are targeting next year very high -- excitement here I can say confidently.

Okay. Yes. Okay, sir. And what is -- can you please just tell me what are -- what kind of orders you are having for shell and tube glass lined heat exchangers? Like how much quantity you are -- in the previous call, you said you're completely booked. So can you please tell the numbers per month, how many like...

Presently we don't have that much capacity, but completely booked means whatever Japan is sending to India that capacity we fully booked. Currently, we are ordering, adding -- I think 120 numbers are in hand. So April onwards we are going to [indiscernible].

Sorry. I missed you're -- how much orders, sir?

Already in hand -- 120 numbers already in hand now.

120 numbers. Okay. Okay. Sir, and what is -- one last question. What is our cash flow from operations?

Cash flow from operations. Anjaneyulu, this is how much in this call?

Yes. So approximately as on today, it is somewhere around INR 15 crores. But as on 31st December, it is INR 2 crores to INR 5 crores, sir, cash flow from operations.

Okay. Going forward, we are expecting increase in -- right?

A significant inflow we are expecting in this quarter. By March 31st, we are going to get significant cash inflows from the collection of the debtors and from the business as well.

Already improved, sir. A lot of improvement happened compared to last quarter, cash from operations. This year, March 31, how much we are expecting, Anjaneyulu, approximately?

INR 50 crores to INR 70 crores positive, sir, cash flow positive.

INR 50 crores to INR 70 crores we are going to -- positive cash flow.

Okay. And like what is the EBITDA per CFO range? Can you please -- like what is the number, if you can give us?

Yes. EBITDA will be somewhere around -- so EBITDA -- it is approximately 30% to 40%, I mean, out of EBITDA.

Okay. Yes. Okay. Sir, can you give us some order number...

I'm sorry to interrupt. Sai Kumar, could you please come back in the queue. The next question comes from the line of Raman K. V. with Sequent Investments.

I just want to understand the reason for the promoter pledge. I didn't quite get why there is a promoter pledge?

This is personal purpose, sir. This is nothing related with company.

And are you planning to -- by when do you have plan to remove the promoter pledge? Is there any time line?

Maybe next 6 months. Or maybe earlier also. Earlier also I have plan.

Understood, sir. And sir, just one doubt on the order book part. What's our current order book?

We have not decided to disclose the figures order book because of I don't want to take my competitor advantage. And next year a chance to -- better than this year, if possible.

The next question comes from the line of Koushik Mohan with Ashika Group.

Sir, it was like -- I think someone -- previous to this question, someone had a question. Like -- the question was like last year sales was around INR 615 crores, and this year, we are in the run rate of doing 25% growth. And if we assume 13 percentage to be our overall exports, that means that this year's numbers will be -- on the domestic sales will be around INR 625 crores. So last year -- sir, this year it's only INR 10 crores up. But when we see our execution in the ground, we feel that majority sales is coming from domestic. So how are we going to capture this, sir? Like how are we going to do it in the next year as well as this year? These numbers, how are these going to be changing?

What happened, Mr. Koushik, we are focusing in the export mode, not -- they are both important, domestic important, export. But wherever -- good opportunities are coming from export because of high margins. So we are focusing on that. Ultimately, company year-on-year growing is important, growth is important and top line and bottom line also. But ultimately, domestic -- we are not -- we are looking domestic this much growth, export this much growth. The combined growth is 25%. That we targeted, we are achieving. That's all.

Got it. Great, sir. Great, sir. And sir, last question from my end. Just can I understand by current acquisitions and by current run rate and the factory which is coming up on a larger scale, by this -- considering this, next 3 to 4 years, can also we expect 25 percentage plus growth, is my understanding, on the revenue side? As well as if that is 25% on the revenue, then PAT will be around 25% or plus, because of operating leverage that we have. Is my understanding right?

No, PAT -- what is the PAT we have seen?

25 percentage plus...

I'm not understanding...

My question was, this year, we have reinitiated that we'll do 25 percentage growth. And with the same growth can we achieve for next 3 years also -- because I think on the ground as factory is coming up and everything is happening, right? So if the top line is 25 percentage growth rate, then can we expect the same growth rate in the PAT, profit after tax?

Yes, profit. And EBITDA also is going to increase and PAT also going to increase. And also next year, maybe more than 25% -- not 25%, more than we are going to grow in a organic growth, not inorganic growth. Organic growth only, we are going to more than 25%. We are very, very -- our business fundamentals are very strong. That's the reason our company name also. A lot of people are confusing because of Standard Glass Lining -- glass lining is our core engine, growth engine, unique for us. Others don't have this type of glass lining business also. But we are strong. But compared to our glass lining, other divisions are growing very fast, more than fast. So that's the reason our company name also changed. And so organic growth and very -- wherever engineering opportunities we are grabbing. We are high-precision [indiscernible] engineering company. And sir, our precision engineering is going to be our growth engine next coming years.

And I'm really happy that you really clearly mention that in next 6 months the pledge also will be removed. So we are really happy for that.

Maybe I will try to earlier. Maybe I will try to earlier.

The next question comes from the line of Agam, an individual investor.

I just wanted to know the revenue contribution from glass line shell and tube...

Can you speak loudly, sir? Your voice is very low. Can you...

Yes. Am audible now?

Agam, can you please use your handset, please?

Yes, yes, yes. And I just wanted to know that the revenue contribution from the shell and tube glass line heat exchanger for this quarter?

This quarter? This quarter maybe some -- how much, Anjaneyulu? INR 4 crores or INR 5 crores?

Yes, INR 5 crores, sir, approximately. INR 5 crores.

Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments.

Thank you. Thank you all for joining call.

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