Techknowgreen Solutions Limited (543991) Earnings Call Transcript & Summary

So good morning, everyone. On behalf of Kirin Advisors, I welcome you all to the conference call of Techknowgreen Solutions Limited. From the management team, we have Dr. Ajay Ojha, Managing Director; and Dr. Prasad Pawar, Chief Executive Officer and Whole Time Director. With that brief introduction, now I hand over the call to Dr. Ajay Ojha, Managing Director. Also, please kindly note that this session is being recorded. Over to you, sir.

Thank you so much, and thank you all of you for attending our conference call. It is always such a pleasure to be with you and also to begin with, I want to apologize that we have been receiving a lot of e-mails from all of you, the enthusiasm that we have seen this time there has been a delay in our conference call. Too many things at hands, as you know, and we are actually growing with you all having around for -- with blessings for us. So too many things in hand. There has been a delay. I sincerely apologize. But at the outset, let me tell you that we are blessed with all our investors in place, and we are blessed that God is giving us a lot of jobs in hand. And with the laboratory, the climate change research laboratory that we have put up. Now you have been hearing me and all of us from Techknowgreen family that we have been working in 3 verticals. But with the expansion and with the augmentation of our services, now we are actually in 4 verticals. First being the knowledge vertical, where earlier we used to talk only about regulatory permitting but now we are into industrial permitting. So if you look at the mix of the services and the work orders that we have received in the recent times, we have actually gone one step ahead, and we are not only talking about permits that are regulatory in nature but also permits, which are required by the industries end-to-end in both manufacturing and services sector. And this has been reflected by our work orders like whole building life cycle analysis from Gargantuan or for that matter, Web Werks where we have done end-to-end support for them in, in fact, preconstruction-related permits, along with environmental permits and all the local permits in place. At the same time, our knowledge vertical talks about sustainability and sustainability being a buzzword in the market. We already have established, and you will be very happy to know that Techknowgreen has now started bidding for huge projects out of India. In fact, we have been working on bidding with -- on sustainability matters in Middle East especially on data centers. So that is our knowledge. We have added upon 4 more vertical -- 4 more sectors in our NABET qualification and certification. And now we have 17 approved verticals or sectors, which we have approved for to carry out environmental impact assessment by the quality control of India. So we are certified in those sectors. In fact, in the permitting domain, we are talking about end-to-end knowledge support, including and not limited to project management, which we have recently received from QUAT Technologies for handling their entire sustainable design as well of the layout of the industry until actually getting all the permits done. So that is an additional thing that we are doing in our knowledge sector. So we are actually using our knowledge in not only providing regulatory permits but also designing and handholding them from the preconstruction or design stage till the operation stage. So that's an additional thing in knowledge. In the technology sector, of course, we have an execution of the technology as part of our technology vertical, where we have been expanding in different states. We have been -- we have gone way ahead in our air pollution control device augmentation of technology. And now we already have been working with multiple states across India for implementation of Yuka Yantra, which is our one of the technologies and one of the equipment that we have developed and mastered in urban air quality. Along with that, there is a lot of traction in wastewater treatment technology, which we already have a patent for and people are actually really liking the technology, and we will have a lot of news for you all in terms of technology designing and technology implementing. In both of these sectors, both the air and the wastewater sector and including and not limited to nala treatment, which is one of the most essential part of businesses these days in environmental sector. Our info technology is growing at a great pace. And I have been mentioning this since last 2 years that we are coming up with our software and with our apps. You'll very, very soon hear from us on the Know Your Compliance software. The beta testing is on the snags are being removed and catered to and that would be a game changer, I believe, for us. Now in terms of research, as I've been telling you all and sharing with you all this that the research is and is very, very core DNA for us. So we have gone ahead and our conventional research, which was policy and engineering and product development, we have expanded it with the TRL9, which is surveillance and testing for environmental aspects as well as climate research. We are very happy to inform that our laboratory is all set. A lot of research is going on and a few testing and environmental monitoring is going on because we still require NABL certification for full-fledged operations the laboratory. Right now, it is mostly in-house product development, in-house research, which is going on in the laboratory and some climate research, which we have also started on our own, along with our in-house capabilities of surveillance and testing. Probably, we are going to apply for NABL. There were some snags. We will be applying and getting that in the next 2 months, hopefully. Till such time, you will see a lot of research articles and research papers published from our side with the help of our newly established TRL9 laboratory. So a lot of traction, a lot of things to talk to, a lot of things to share with you all. I'm sure you all are waiting for us to take you through our financial numbers. And I would call upon my friend, my family, my family [Foreign Language] Prasad Pawar, the CEO, to talk about and take us through the numbers, please.

Thank you, Ajay. Good morning all. Very happy to connect with all of you again. I would like to share the presentation. Can you see my screen?

Yes.

Thank you so much. So welcome to TSL earnings call. The next slide, please. Yes. So key highlights of financial year '24-'25. In comparison to '23-'24, wherein we had a sale of around INR 23.44 crores. This year, we have achieved INR 32.98 crores sale with a growth of 40.69% as compared to last financial year, where in knowledge consultancy, we have a growth of 40.17%. In technology, we have a growth of 4.92%. And in research and development, we have a growth of 89.20%. Next. So achievement and challenges and major milestones, which we have achieved in '24-'25 is that we were earlier having 13 sectors of NABET, which is a National Accreditation for Environmental Impact Assessment. So we have added 4 new sectors in our KT now. We are amongst the few in the country, who are having so many sectors with them for EI accreditation. And we are A categorized consultant for the NABET now, and we can provide our services for such 17 sectors across India. Yuka Yantra is getting commercialized under NCAP, and many states are getting interested in this particular equipment. Very soon, we will be able to give you good news about all this. TRL9 climate change laboratory is established for research and innovation by TRL9. We have completed our service cycle completely. And now we have all the required services in-house to cater to our client as a single window. Then 100% TSL subsidiary is established in U.S.A. as well as in Singapore. And the work related to that end market searching and all is going on. I would like to also mention that indoor air R&D project for Maharashtra government is completed successfully. And this is the first indoor air project in India, which is taken up by Maharashtra government, and we have completed it successfully with good results of profit. Then one of the renowned project of hazardous waste disposal project, is also completed successfully. Next, please. So strategic priorities with the financial outcomes, which we have planned. So we have decided that we have to strengthen our knowledge consultancy vertical. So for which we have added 4 sectors in NABET and now we have much more to cater to the new and emerging sectors for the environmental impact assessment. Then we had got into the MoU with Sterling and Wilson Data Center for exclusive ESG partnership for their global business. So now we have a sustainability partner. We are exclusive sustainability partner with Sterling and Wilson for all their global initiatives as well as within India and for them as well. Then TRL9 climate change laboratory is completed. That is another feather, which we had added. As a part of global presence, we have added U.S.A. and the Singapore business. CWT and Yuka Yantra is not only patented but it is also getting commercialization for -- in most of the states in India. And we -- very soon, you will get a news about it. Indoor air project is also completed. Next. So if we compare revenue year-on-year growth with quarter of last financial year. So knowledge consultancy, we can see a growth of, say, INR 17.83 crores from INR 12.72 crores; technology from INR 6.09 crores to INR 6.39 crores and research and development from INR 4.63 crores to INR 8.76 crores. So from last financial year INR 23.44 crores accumulated sales, we have achieved -- we have been able to achieve INR 32.98 crores for financial year '23 in comparison to financial year '23-'24, we have a growth of almost 40.69% in our revenue. This is a sector-wise comparison. So we have got kind of -- vertical wise, we have got a growth of 40.7% in consultancy, 4.92% in technology and 89.20 in R&D. Next, please. Yes. So private and government distribution. So among the INR 17.83 crores, private or in knowledge consultancy, particularly, we have a sale of INR 15 crores from private and INR 2.82 crores from government. In technology, we have a INR 6.11 crores from private and INR 128 crores from government. R&D, we have INR 2.88 crores from private and INR 5.88 crores from government. So if we compare, then 27% of our business revenue is coming from government and 73% is coming from private. Next. Yes, so vertical-wise sales we have already discussed. So INR 12.72 crores to INR 17.83 crores and likewise. Next. Work order, we have in hand in comparison to '23-'24, we have now current work order in hand around INR 23 crores on March and after that, we have got certain new work orders, which we have mentioned. Next. Next, yes, some of the top 5 clients, if you say then Web Werks, GISSPL, Majhi Vasundhara, NTT, and Bigspace are some of the biggest clients in our last year's revenue, whereas the highest value work was -- ticket size was INR 3.64 crores and lowest was INR 15,000. Next. So these are some of the vendors wherein the technology as well as related to executing projects we are aligning with them. Next.

Just to add, Prasad in this space. Most of these expenses are laboratories. That is why they are the top vendors, okay. They are all assets basically that we have bought, yes. Next, please.

Next. Next. Next. Yes, so these are the major capital investment, which we have made during the year, which consist of computers and peripherals, plant and machinery, office equipment, furniture, building, vehicles and software basically. Next. These are the financial debt and financing. So INR 77.50 crores is the virtual permission we have obtained. However, we have not utilized it completely. Next. So if we talk about financial performance, then in that case, our PBT in '23-'24 was 36.40%, whereas in '24-'25 it is 28.89%. PAT if you see compared to '23-'24, it was 26.05% and this year, it is 23.22%. EBITDA was 37.97% last year and now this year, it is 31.22%. Next. So these are the ratios which we have already mentioned and which we will discuss during the designs. So thank you so much for your patience and hearing, and we would like to know more about from your side.

[Operator Instructions] Mr. Mayuresh, you can go ahead.

Okay. Congratulations for the great set of numbers. We have presented good growth over year-on-year growth. I'm just concerned about the reduced profitability. And I wanted to know because you presented that profitability has reduced from around 36% to 28%. So I wanted to know, will it continue to reduce? What are the reasons of the reduced profitability? Will it continue to reduce in the next quarters? And what are we doing to stop the reduction in profitability or increase the profitability.

Ajay?

Yes, yes. Prasad, you want to go ahead or should I? So Mayuresh, thank you for your question. And this question has been asked a lot to us about the profitability margins. I can assure you that we will retain healthy profit margins. This time, what has happened is a lot, our profits we have invested in our laboratory. So if you look at our laboratory, we initially wanted to have a preferential shares. We didn't work out. So we put in a lot of money in our -- from our cash into our laboratory. So we have not even utilized our -- not even utilized our OD, which we had presumed that we would require. So almost to the tune of INR 3 crores, we have actually put in back into our laboratory assets. So that is why if you look at our profitability, it hasn't referred somewhere else in the balance sheet but in the asset sector. But definitely, I mean, we are retaining same profit ratios that we have been consistently achieving.

Okay. Understand. And can you give a visibility what could be the ratio? Will it come back to -- like is the target to bring it back to around 35% in the coming quarters?

So it's a little bit difficult to predict right now but I'll tell you we are...

Target. Not prediction. It's difficult to predict I understand, and we have challenges. But what is your ambition? What is your target? And what is the achievable target?

Always to be beyond 30%. 35% is a good number. If we are able to achieve, we all will be happy and smiling. But we want to retain our initial margins in the first 2 years, and we had continued even with the growing revenues. We still want to achieve beyond 30%, which is a healthy ratio, which is a very healthy profit margin. And we make sure that we align to our assumptions to that extent. But rest assured, Mayuresh, 30% and above is what we keep that as our benchmark figure.

And that's PBT. So profit after tax will be close to 20% to 25%.

It will be maintained around 25% is what -- which I've been claiming since our first call 2 years back, that 25% to 30% is our -- is going to be what our margins would be, PBT. And PAT would be 30% to 35%. This is what we want to retain. This year, there has been a lot of investments that has taken away our cash and profits into assets. But still, if we account for that, the money which we have put in assets, we still are at 34%, 35%.

Yes, yes. And CapEx is good. I think there should be no problem if the money goes in CapEx, it will definitely come back in the form of profits in the coming years. Also, from the presentation, I've noticed that out of the INR 30 crores, INR 32 crores that we made this year, INR 15 crores have come only in quarter 4. So is our business seasonal? Or will this revenue continue in the coming quarters?

So what happens is, see, being in an SME quarterly financials seems to be very difficult for us to be accrued, but I can tell you that, yes, there is a seasonal thing going on in our business since last -- I mean, right from the early stages, last 25 years. So yes, there is a seasonal change, which we are trying to abide -- which we are trying to overcome now because what happens is all the allotments of funds happened during the first quarter. So the first quarter usually is really slow because there are tenders, which are bought out. There is a lag phase. There is some time, which is required. The last quarter is the highest because what happens is 31st March being the closing period, 90% of the bills and the completion time of the projects are in that period. So obviously, you will see some seasonal change but we are trying to -- when the revenues are very high, we will not see this change. Since the revenue still in the range of INR 30 crores to INR 50 crores, you'll have an earmarked variation that could be seen -- variability that can be seen. But once the revenue crosses INR 50 crores, this probably will be negative.

Yes. Yes. Yes, I totally understand. Will it be possible for you to share the presentation on the visibility of the current order book because it was pretty quick and I didn't get time to read because you showed the different order books. One was '23-'24 and the other was '24-'25 or I'm not sure what...

Yes. Sorry, go ahead.

Yes. So I wanted to understand was it the total number of orders that we received in '22 to '23 or '23 to '24? Or is it the unexecuted order book that you had shown?

No, that is -- Ajay?

Go ahead, Prasad.

Yes. So the figures, which we have shown is basically a spillover of last financial year, which was not executed during last year, so that is a spillover for '24-'25. As we are talking about March ending scenario here, we are talking about the order which are not yet capitalized is the numbers there.

And what is the total number of unexecuted order book till 31st of...

That is to the tune of almost INR 23 crores to INR 24 crores.

Okay. And what is the run rate of orders that we receive normally? So how many -- how much orders have we received in -- from April to June? if I may know?

April to June.

April to June, the first quarter of 2025.

So we have confirmed work orders in terms of written statements to the tune of INR 5 crores. And in the pipeline, they're going to receive till the end of June, it would be to the tune of another probably INR 10 crores. Yes, they're all actually signed and the work orders are not in hand. The process has been completed. So I think we will...

Finalization of proposal is already done. However, formal work order yet to be received.

Okay. Okay. So everything is fixed, just a letter is -- we are waiting to receive the data. So we could say that the total pipeline, maybe by the end of June, will be INR 23 crores, plus INR 15 crores.

Yes, we can say that.

Yes, we can say that.

Okay. So total of order a little bit less than INR 40 crores. That's a good one. That's a good one. And I think -- and what is the execution rate? Do we execute the orders we see within 6 months, within 1 year, considering the size that we are receiving right now?

See, usually, it will be concluded in the financial year completely. There are certain orders which are short term, but there are certain orders which has a period of, say, 10 to 12 months.

So there is only -- there might be some spillovers in the first quarter of the next year. Like for example, if we are starting June and if the period is -- usually, the big projects, the big ticket size projects are usually 15 months to 18 months. So there might be a spillover of a quarter. So usually, our strike rate for completion of execution with respect to the work orders booked in a year versus the execution is to the tune of 70%.

Okay. Okay. And by the first quarter, if we have INR 40 crores, I assume -- assumption is not good but I assume we could end up with at least INR 60 crores to INR 70 crores of order book. And the visibility, what I see is at least INR 50 crores of revenue for next year.

I feel so good when you talk like this. We are all eyeing on numbers. But let me tell you, we have our own computations. And this year, we want to achieve something which you have been all eyeing for. I can assure you that.

Great. I have questions relating to your products, our products. So air pollution control device and water management technology. Could you please elaborate on these? Like how does these products work and who are our customers and where do we manufacture these products?

So very quickly, very quickly, in the wastewater sector, what we have done, we have got a patent on that. It is called as circular economic wetland technology. Now circular economy means we are using plastic bottles and grasses to treat wastewater. It's a very simple technology, and it can be applied in any industrial sector for industrial sewage or a residential or a commercial sector data centers, wherever there are people, there would be sewage generation. And last but not the least is in situ nala because most of the nalas contribute to the river pollution and we can fix this directly inside the nala itself. In fact, one of the projects which we are doing is right now in the Ulhasnagar Municipal Corporation in Mumbai for treating 5 million liters of sewage in the nala. So because of the rains, actually, we were to commission it this month because of the early rain we had to postpone it post rains. So this is the applicability and the buyers are the governments as well as the private sector, including and not limited to also residential and commercial establishments like buildings and construction. So that's about it. And about the air quality, see, our equipment, which is called Yuka Yantra. Yuka stands in Sanskrit for tree. So it's tree-like machine, which actually does 2 different purposes. First is to absorb and collect the dust from the air and gather it at the bottom of the unit, so that we are extracting dust out of the air. And the second part is taking the gases and passing it through a system, which is self-regenerating. So you never have to replace that system. And it passes through it and it treats it. So the applicability of Yuka Yantra is at all the hotspots like traffic junctions, construction sites, RMC sites, wherever there is concentrated air pollution. This can be used. And in fact, if you go to the Science Circle, there are 8 of these equipments installed at Science Circle in Mumbai. As our demonstration, which was sponsored by CEAT under their CSR activity. Similarly, data centers where construction is going on, they have installed, NTT is a big, huge data center. They have installed this equipment. CEAT Tyres across their entrants in their main office, they have put up. Navi Mumbai Municipal Corporation, we are already L1. We have given a demonstration to them. And they have put it up in Navi Mumbai at Sanpada. So a lot of people are now who are looking at urban air quality as one of the issues and the government of India is also looking at National Clean Air Programme, this equipment actually brings in the technology intervention, which has been long waited for and that is how we think there is a lot of potential to go ahead with this in urban air quality because we don't have any solutions as such for urban air quality. And our technology is already approved by the state government, technology assessment cell. And they have already approved it. So the acceptability of our technology is very huge. Our patent is awaited. It was awaited. We thought we will get it in March. There were certain queries from -- for that, and we are now resolved all the queries we are expecting any time we will get the patent from this.

It sounds promising. Do you have any details about how many devices -- Yuka Yantra devices have been sold till now? And how many orders do we have and cost per device?

So there are 3 different variants of it. One is a variant where we treat about 10,000 meter cube of air every day and the biggest being we are treating about 3.5 crore liters of air every day, 33,000 meter cube of air. The cost depends upon variability and the accessories that you want to add upon. It ranges from 10 lakhs to 50 lakhs anywhere in between those prices, depending on what peripherals you want to add into it and how much sophistication you want in this instrument. The biggest order we got from one of the data center facilities, we have installed 6 there, 8 for -- so overall, about 22 to 25 equipments we have already sold in the market. And in the pipeline, we have multiple inquiries right now being generated for that. We will -- in the next probably quarter we will be showing you a lot of sales of this equipment, hopefully. And as far as one point, which I didn't mention was the manufacturing that you asked. See, as far as the waste water is concerned, there are 3 parts to it. One is civil, one is mechanical and one is plumbing and one is design. We normally tend to do more of intellectual property supply, proprietary items and designing part of it as well as commissioning part of it in wastewater. So there is no manufacturing unit required for that. However, on the Yuka Yantra, we right now have a tie-up with a fabricator because it's a fabricated unit. And we bring in all the materials from outside. We do our fixing of all the mechanical electrical equipments with our own people in that fabrication unit. So this is right now the arrangement that we have. Once we get it, we look at what the options are.

Sorry, where is it located?

It's in Pune.

Pune. Okay. Okay. Fair enough. Once we start getting orders, it could be interesting to have our own fabricating...

For that as well.

Yes. And sky is the limit. I would say this thing India is facing enormous problem of air pollution if this could even reduce it by a few percent in the hotspots, it could be really beneficial. About the MoU signed with Sterling and Wilson data center, do we have -- do we already have any orders? And what kind of revenue do you see with them in the future.

Oh, I mean we have been bidding with them. Like I have mentioned in the Middle East, we have bid with them on sustainability partnership in Riyadh for DataVolt. We are bidding multiple places. We are pitching to Adani, we are pitching to so many things. And the best part, I don't want to predict any numbers in terms of revenue as of now but we are actually engaged by Sterling and Wilson for their own sustainability purposes, which we already have back some work orders from them. So it's in a very nascent stage right now. This is all the bidding and the marketing and the pitching process is going on in the first quarter because this happened, I think, in the month of April, right? Prasad?

Yes. Yes.

Yes. So it's all in the pitching stage right now but we are going to give you good news in the coming days with our...

I hope so, looking forward. Last question. May I know the profit margin for the Yuka Yantra? What kind of profits do we make percentage -- in percentage?

30% to 50%, same. We want to -- we want to keep it up because it's a proprietary item. We want to keep up with our this thing. Initially, it was -- it is going to be a little bit low in the range of 20% because there are a lot of accessories being involved in the product development and the makeover and the facelift, which is going on, but we would like to maintain it in the range of 30% and above.

As the volume increases, I think it should be possible. Thank you very much for clarifying my questions, and wish you good luck for the upcoming quarters and awaiting good news.

Thank you.

Thank you so much.

Mr. Paras, you can go ahead and ask your questions.

Sir, just wanted to understand with respect to this Yuka Yantra thing, are the -- so one is the state government, Maharashtra state government has approved this product. And since we are marketing it across India, do we need approvals from the other state governments? And are those approvals in progress? Or this will be -- I mean, so basically, this will be mostly government installations or private installations as well?

Yes. So Prasad, I'm just taking over and then you can...

Yes. Yes. Please.

Parasji, thank you so much for your question and your patience. The first part is, see, as I was mentioning that it is not only governments that are looking for this kind of investment. See, what the government, for example, I'll give you, in MIDC -- in the Thane-Belapur region, the MIDC and the Navi Mumbai Municipal Corporation have asked all the construction sites to take up -- all the construction sites to install air pollution control devices, and they are penalizing them if this is not done. So the percolation might happen from the policy perspective from the government. But actually, the takeaways or the installations might happen at 2 different levels. One is at the municipal corporation level and urban development level as well as at the level of the industries or the construction sites. So we have a mix of clients right now where the implementation is happening. At the same time, the government's policy is also on the end cap. When we talk about government because government has allocated a lot of funds for cities, which are in the non-attainment zone. I mean which are not able to reach to the NCAP standards. So there, the implementation body is actually the municipal corporation. So municipal -- there are 2 ways by which they're handling this. One, the municipal corporation themselves are installing this, and they are also asking the clients or their end users to install it. So it's going to be a mix of entire thing. Right now, if you look at our sales, it has been all private. We have not backed any government orders as such as of date. So all our installations actually are private only. However, in the coming days, our pitch has been also because there are a lot of tenders with the municipal corporations are floating for dust control devices hotspots because up until now, the hotspots were only identified and plans were only submitted to the central government on the theoretical basis. Now it is time that everything is being capitalized or the capital expenditures are being done on that part. So it is...

Sir, tenders have been floated now?

Yes, yes, there are a lot of tenders, which are coming in but they are not mentioning Yuka Yantra, they are just mentioning dust control devices.

Which, of course, will be sort of at least one of the leading contenders, if not...

Yes, yes. Absolutely, absolutely.

And sir, now let's say...

Parasji, Just 1 point I forgot to mention. You asked us about whether we require approvals from each of these states. So what happens when it is a government approval, usually, the tender or the applicability is, once we are approved for one state, all the other states would take it on the face value of it. Usually, unless and until there is a very specific requirement of a state to take a permission.

So that provides a good traction, that means.

Absolutely, absolutely.

In addition to that, each and everybody, which is planning to take this, they kind of pass for a trial. And they see the effectivity of the equipment. And on the basis of that, they go for the equipment basically.

Understood. Sir, there's also just additionally, since we're talking about Yuka Yantra and a couple of those, let's say, have been already installed. And some of the significant ones, do we have some sort of a data collection from that whereby we are able to reinforce and emphasize the efficiency of the functionality of this product?

Yes, Parasji we have collected data. We have, in fact, integrated IoT into our devices. In fact, we have created a dashboard where we are getting data of every minute from all these devices for how much volume of air is treated, we have put up demonstrations in terms of what the inlet and outlet efficiency is, how it impacts the air quality index, which is normally understood by layman. So I'm very happy to disclose this that we have been able to achieve very easily 60% reduction in the pollution levels in and around this influence zone of our equipment, which is almost about 15 meters radius is our influence zone. So this is how we have been able to demonstrate the efficiency and that is how the likability of our equipment has taken place in the market.

So in general -- and so that's interesting to hear. So in general, I mean -- and I know that you can't put a number to this, but what kind of market would you sort of expect for this particular product over the next couple of years in terms of revenue potential from this kind of -- I mean, just you would have targeted something that you'd probably capitalize -- target to capitalize?

It's not the right thing for me to disclose but I'll tell you the other -- the surrogate analysis from which you can get an estimate of what we are talking about. The National Clean Air Programme has -- only in Maharashtra has allocated around INR 3,400 crores for the next 5 years.

Sorry, sorry, I missed that. Sorry, what was that?

So the NCAP fund in Maharashtra itself is to the tune of INR 3,000 crores to INR 3,500 crores.

And that is particular to do with air pollution?

Yes, this is only air pollution, purely air pollution, nothing else. It also in the range of INR 75,000 crores to INR 80,000 crores for all the cities. There are 119 cities in India. And Maharashtra has 19 cities out of them, highest of the non-attainment cities. So the funds, the central government's concept is very clear. They are providing funds under FAME and under the NCAP regime. The state has to utilize and allocate these funds. And what has happened is most of the times, from the policy perspective, the fundings are done, the utilization has not been completed because these funds then percolate to the implementation bodies. That is the municipal corporations. If you see recently a lot of people earlier, it used to be electrical vehicles, it used to be mechanical sweeping machines, there are targeted sectors. Now all those things which are available on the Google is ended now. So people are looking at new avenues and options for reducing air pollution. So we are at the right time and at the right place, the right entrant as a sunshine product that we are looking at. Give us some time, we will bring you a lot of numbers in place with Yuka Yantra. It's a very promising technology in place.

So as we speak or in general, I mean, some of the municipal -- I mean, so these BMC tenders have been -- municipal corporation tenders have been floated or are we in the process of being floated?

Some are floated, some are in the process.

And have we bid for some of these?

Yes.

Yes.

Understood. So at least there is some traction pickup that can be expected out of this product there?

Sure. Absolutely.

And on the pref, sir, now that pref off the table, so there is no thought process in terms of going for pref at some point again for...

I would love to. We are expanding. There are so many things which we are doing even with our climate research lab, we are adding something we are already ongoing with adding some tissue culture expertise into it so that we can work out the impact of certain things on live cells. So we are doing a lot of things. And we are always looking at our investors confidence and that is the boost and the kick for us. If you believe in us, we'll keep on asking for money.

Understood, sir. So basically, from the previous discussion that you had with the other investors. So about, you're targeting at least floor of EBITDA margin, 30% plus and that at least you would sort of maintain, going forward...

No, no, absolutely. 25% and about, 25% to 30% is a very good margin. Our target is 30% and above. There are a lot of variables in this. Like this year, what happened is a lot of profits went into our CapEx and so on but we are targeting that. Like, for example, the product development for Yuka Yantra and lift -- facelift that we are targeting might require some of our profit to go there this year. So it's a vicious cycle. Every time you see that you have money, you keep thinking that there's something else that could be done with this money.

I mean the propensity to invest is obviously there. I can understand that clearly. I mean, but again, I would presume that you would be judicious about in terms of investment, in terms of where the commercialization can happen sooner than later in terms of investment.

Parasji, our thought process is very clear. We don't do fundamental research. We do only applied research. So ours fundamentals are every research that we do has to be converted into revenues. Nothing else.

Correct. Absolutely. I mean...

Which has a commercial value.

Got it. Correct. Understood, sir. And sir, one more thing you said, okay, this year, I mean, you would sort of, at least as investors, be happy in terms of some expectations that you may have of commercialization or whatever that be. So I mean, sir, [Foreign Language] in terms of what areas are you specifically expecting to contribute this year?

So Yuka Yantra, for sure. Yuka Yantra for sure and the software that we are talking about, it might be a very nascent stage for me to talk about the software because it will take a market development, a lot of marketing pitch and all. But Yuka Yantra is already set to give us money, that I can assure.

Yuka Yantra as well as wastewater treatment technology.

The CEWT. Yes, Prasad, go ahead, please.

Yes, CEWT is another thing, which will actually gives -- will give us a good number. And also the consulting part of it.

The design part of it.

And so far with Sterling and Wilson association, at the moment, as we speak, we are yet to translate into some sort of proper work orders whether globally or with them.

So with them, we already have a work order for their sustainability.

Okay. So I mean what's the size of the work order with them just for now?

No. Their ticket size is very low, around -- I think, around INR 7.5 lakhs or something for their sustainability to start off with. But -- so we have -- it's not only SWDC. We are also working with SWREL, RL, we are working with SWDC, and also in the coming days, we are going to extend that to their vendors also. So we are working -- once we are done with SWDC, we'll have green program policies also, we'll be bringing in all their vendors also into the supply chain through the sustainability regime. So our potential is very huge. They already have around -- listed down on 100 vendors, which are very huge and prominent in their circles.

Sir, just extending on that point, U.S. subsidiary, we have established and Singapore subsidiaries also there. And you're also bidding alongside SWSS, probably partnered. So what is the bid value as of now internationally as we speak or what you're targeting at least for this year in terms of bidding?

So nothing less than INR 5 crores. We have already bid for INR 2 crores, INR 2.5 crores, INR 3 crores. And it's not even first quarter ended. See, what has happened is our U.S. and our Singapore subsidiaries got formulated only in the end of March. Yes. So I mean, we -- last year, we did not get anything to do with either bidding or registrations. In fact, our U.S. registration works are still -- were still going on till last month, in terms of filings, in terms of getting the local approvals, in terms of -- like Singapore, we could not bid because we didn't have certain types of registrations, which are mandatory there. So the first quarter has only gone and getting everything aligned for bidding processes. But with the SWDC, it was very easy because we were bidding from India with them. So we do their sustainability part, and they are doing very huge projects for data centers, MEP. So that was easier. In the U.S. on our own, it is a little bit difficult, was difficult in the first quarter. But now we are all set. We have already started bidding for one of the projects I can mention of L&TE, where we are going to be the subject matter experts, hopefully, let's see in the U.S. And in Singapore, we are already getting aligned with so many people. In fact, Prasad is looking at the entire portfolio of Singapore. Prasad, you want to add something very quickly without disclosing too much?

Yes. We -- I just wanted to mention that we are on the right path, and we are working on a very good alliance with the Singapore government itself for some research and that things are moving in a positive direction. Very soon it will be converted into MoU and a business thereafter.

And that we can expect in the next quarter or 2, potentially?

Yes.

Understood. Sir, before I just wrap up, just one this thing. What is the potential of this research laboratory that we've set up, sir, in terms of revenue potential or margin potential?

The margins are very high because it's going to be research like, for example, we'll set up a margin of 30% and above. In terms of testing, there's not much because testing is our bread and butter, it's the business as usual scenario. The research potential is very, very huge. In fact, we are writing some proposals to the tune of in crores, I can tell you that. I can give you apparel, the research project, which was sponsored by the government of Maharashtra to us on indoor air quality was costing INR 10 crores, one project. So you can imagine the potential that we have in terms of laboratory. And that when we did at laboratory in this.

Right. Right. Understood, sir. And just last question from my end, sir. If you permit, what kind of general, we've grown at about, let's say, 40%, 50% over the past. Now in general, what kind of growth rate do you expect, let's say, for this year and next couple of years? Or in general, I mean or at some sort of a target that you have internally, may or may not be achieved but that's what you're working towards.

We want to continue with the same -- sustain the same -- at least the same growth rate and beyond.

Right. And of course, I mean, if this Yuka Yantra hits, I mean then...

Then all your magic number that you keep speaking about INR 100 crores will be achieved very soon.

Right. Right. Right. And probably, I mean, the way this entire environment thing is panning out, that may not be far away in the next couple of years, probably that could come across?

We are also hoping for the same.

Yes, Paras. [Foreign Language] and we all are waiting for that.

Congratulations and best of luck towards that. And just 1 thing, I've been in touch with your company secretary. So as when time permits, I would like to visit the facility once if you guys have time, whenever you have time, sir.

Please, you are most welcome, sir. Please do come and seeing is believing. Please do come.

Yes. Yes, that's what. I thought it would be best to connect. So I'll coordinate with company secretary once again. And I would request you all to at least provide some time that for visit.

[Operator Instructions] So we have some questions in the chat box, we'll first address that. So we have a question from Mr. Akash. He's asking where do you see Techknowgreen in the next 3 to 5 years? Now you are a fully integrated company with a new research lab setup. Do you see the company entering a high-growth trajectory, growing 40% year after year?

Yes. So as I was mentioning, Akashji, thank you for your question, we have a target of 40% to 50% growth every year, which we have been achieving as such, and we would like to sustain it for sure. And all our alignments are in the same line for this growth rate. For sure. I hope that answers your question. We have already answered that to Paras sir also.

Yes. We have another question from Ms. Ashna Tyagi. She's asking, can you please share the revenue and margin guidance for FY '26?

Ashnaji, thank you for your question. We'll continue with what we are doing and better than what we are doing. I can assure you that. So you will have to estimate by yourself at the growth rate of 40% to 50% and the margins of 30% is what we are targeting.

The next question is for Mr. Ritik Jain. He's asking. I saw ESG consulting TAM is near $215 million in India. Please share your reviews on it? And what is your TAM considering all your business segments?

So ESG -- Ritikji, thank you so much for your question. ESG is a growing sector. See, ESG has 2 different sectors. One is the asset AUMs and one is the consulting part. And you have mentioned the ESG consulting part. It's much more than you're mentioning, I think, overall, the recent KPMG reports state otherwise, there's a huge market. See, we have, as I was mentioning that in the ESG sector, there are small ticket size as well as big ticket size, and our competitors have always been big 4s. But with the SWDC coming hand-in-hand with us as a partner, we see a lot of potential, and we are bidding for huge projects like Adani airports and so on. We are in the final talks. And I think numbers. I don't prefer to provide numbers. But I can tell you that last year, we did not do very well with the sustainability individual sector. This year, you're going to see at least a 500% increase in our sales in the sustainability sector alone vis-a-vis, the sectoral growth. I can tell you that.

We have a question. What sort of guidance do we have for FY '26 and FY '27 with the new lab and subsidiaries time line for Yuka Yantra? How will commercialization take place? Who are our customers?

Anonymous attendeeji, thank you for attending, sir, or madam. See, I've already mentioned about the guidance with the growth rate, we want to sustain at the 40% to 50% growth rate, which we have been doing in the last 2 years, especially with the new lab and subsidiaries being formed we have lost the first quarter in the subsidiaries because of the local norms and things to be taken up. In fact, the new lab also first quarter is going to be only our product development, internal research because we need certifications to be done, and it's a time-consuming path. Our laboratory was established in April. It takes about 6 months usually for NABL certification, we are eyeing at 3 months. So we have -- we'll be applying very soon in the coming week for the final certification. It will take about 2 months is what I'm expecting. And for the Yuka Yantra, as we have mentioned already that we have already pitched and it is time that the fruits are going to be ripened. And we hope that we will be able to eat all those ripe fruits in this year itself. And, of course, go on sustaining that because the National Clean Air Programme is not only for this year, it's going to be extended, we hope that at least for the next 3 years. 2025 was the target but I think the target is going to be -- is not yet achieved to the extent it was desirable. So I think that would continue for some time and these funds are going to be there floating around.

We have next question from Mr. Sagar Fulwani. He is asking what are the employees headcount as of March 31st -- March 31, 2025. And what was the increase of employees count? And how will the employee count -- how will be the employee count in the future?

Prasad, you want to take it up? I don't have exact headcounts.

Yes, yes, yes. So we have more than 100-plus employees currently. The addition of the employees in last, say, 6 months is almost 20%, and we are expecting another 20% to be added for the future expansion and growth.

But the moment we cross INR 50 crores probably or in the range of INR 50 crores, our headcount will be doubled probably to handle that.

Yes, it will reach up to 200, I believe.

I believe so.

Okay. Mr. Lakshman, you can go ahead and ask your questions.

So, Dr. Ajay, Dr. Prasad, first of all, congrats on an amazing set of numbers. Okay. So the first question was from the balance sheet, right? I think a lot of my questions, I think Mayuresh and Parasji have covered but I have some 2, 3 questions. So first thing is, as of March 2025, right, we clocked the sales of around INR 33 crores. Out of which, around INR 10.5 crores is shown as receivable. So I understand that because we are reporting 6 monthly, right? Sometimes the payment can come in the next month exactly after the quarter ending. So I just wanted to understand did we realize part of that receivable? Why is the receivable at 1/3 of sales? So any flavor on how much receivable we have currently or something on that line, I wanted to get a clarity.

Sir, out of INR 10 crores, we have already received INR 4 crores, INR 2.5 crores is in the final stage of release and rest will be released in, say, a quarter.

Got it. Got it. I appreciate that. Next question, right, if I remember correctly, right, we wanted to have climate lab and then, of course, the preferential did not go through because of multiple reasons. And you took a loan from ICICI Bank. That was the disclosure. And we had a credit line of around INR 4.9 crores of working capital loan and INR 2.6 crores of short-term loan, okay? But it's absolutely amazing to see that in our current balance sheet, right? We only have INR 2.22 crores of long-term borrowings and INR 37 lakhs of short-term borrowings. So if I understand correctly, we have kind of funded the climate lab just by internal accruals and taking a small loan. Is my understanding correct?

Yes, sir.

All right. Okay. The next question which I have is, see, we spoke about Singapore and U.S.A. being established, right? So can I assume that from Q2 onwards, right, we can start realizing revenues from those geographies as well. Is that a fair understanding?

From Q3, not Q2.

From Q3. Okay. Great. Great. Because I think the -- I understand that the opportunity is endless but I just wanted to understand from when that will start contributing. So that's clear for me. I also wanted to understand, right, today, the climate lab is probably helping us to save costs, what we would have put in other labs, right, for our internal research. But today, we are completely self-reliant. When do you think we can start commercializing the climate lab for other people who are requiring this? Is there any quarter you feel -- or have you already started? That's something, which I wanted to understand.

So as far as regulatory works are concerned, we need certification, as I was mentioning. This certification will be done in this quarter, coming quarter. And probably from Q3, the regulatory work will start. However, at the same time, as far as the research part is concerned, which are also sometimes sponsored that we have already started commercializing. So the lab is already being commercialized in the first place, the ticket size might be very low. But notionally, yes, we have already started commercializing.

Got it. Got it. See -- yes, please go ahead, sorry.

Wherever there is a requirement of regulatory stamping. We are not able to do that because we don't have an NABL certification. But wherever it is generic data and surveillance, we are able to do it.

So see, the other thing, which I wanted to understand, right, over a period of time, I also understand that climate lab becomes a vertical by itself, right? It starts generating revenue. Where do you see -- like, do you see climate lab contributing to 10%, 20% of revenues in the next maybe couple of years? Is that a fair -- because we have put a good amount of effort in the lab. So I just wanted to understand what percentage of the revenue do you think the climate lab has potential over a period of time, percentagewise?

Absolutely. 20%. Target impact, that's our target in fact.

Got it. Got it. Got it. One more question is, now we have -- I have seen this journey from -- I've been associated as an investor from quite some time, right? So I see this journey moving from INR 23 crores to INR 33 crores. Now hopefully, we should cross INR 40 crores, INR 45 crores, let's say. I just wanted to understand, so far, if I looked at your 1 slide, which spoke about the ticket size, I think INR 3.4 crores or something was the highest ticket size, am I right, from 1 single customer, right?

No. The highest ticket size is INR 9.7 crores.

INR 9.7 crores. I'm talking about just the previous year which went by that is 2024-'25. In that -- when I saw the presentation, right?

Yes, it is INR 3.4 crores for last year.

Correct. Correct. Correct. So the reason I'm asking this question is as we start scaling now, I think having consistent INR 5 crores to INR 6 crores, maybe 3, 4 customers would really help us in our long-term growth, right? So I just wanted to get your thoughts on that. It's not a specific question. But just your strategy because as we scale having customers who are ready to pay INR 5 crores, INR 6 crores per project, will really help us in not only scaling -- consistently scaling up. That's how I would put it up. So what are your thoughts on that?

Absolutely, sir, you are absolutely hit the target because if we want to go up beyond INR 50 crores or we are targeting INR 100 crores, ticket size would matter a lot. And this ticket size has to be beyond INR 3 crores for at least 20% or at least 20 clients or 10 clients to consistently be able to produce that kind of output. So absolutely to the point, we are eyeing at such. So if you look at consistently over a period of time, earlier it was Singapore Telecom, which has given us similar kind, Web Werks last year, the government of Maharashtra gave us INR 10 crores work order [Foreign Language]. So it keeps on continuing and we are eyeing at that kind of a ticket size, but at the same time, adding clients who would -- who are future potential are also on the cards, which today might not be big ticket size, but we know for sure, they are in an expansion mode, and we have a potential customer base of big ticket size coming from them itself. Like for example, Quad Technologies, we worked on a project with them for about INR 1 lakh about 2 years back. And now they have given us a work order of INR 1 crore for their expansion. So we have -- our client base that way, we have repeated clients, almost 40%, we retain our client, 40% to 50%. And in their expansion mode, they actually help us out giving us big ticket size projects. So yes, both of them, a permutation and combination will definitely help us to achieve the targets, which you also people are dreaming about on our behalf.

Got it. Got it. And my final thought, right? See, we have -- I mean, I don't know, like it's very tough to find an investable company out of -- in my experience, right? We have very good balance sheets, cash flows, margins. The growth rate is -- I think we have maintained at 25%, 30%. The market is valuing the company at just 15x earnings today, right? I just wanted to understand that, that means the market believes that we are -- we can only grow at 15%, 20%, right? But from the con call, what I understand is that consistently 25% to 30% growth is something which is possible is what I could gather from your -- from this call. So that understanding is fair enough, right? As we grow, 25% is a fair growth rate as far as profits are concerned, right? Is that -- is my understanding fairly correct?

You have been always fair in your understanding, sir. We ourselves are unable to understand the sentiment of the market. Every time we give good results. People don't invest in us. So it is on to our investors actually that we wanted to ask this question with our investors as to what is going wrong, the revenues are good, the growth rate we have constantly -- now it is the third year, we are consistently providing the outputs. The number looks good. If I may say so, I don't know what's happening. I mean we are very new to this, and we are unable to understand the crux of the market yet. But Lakshman sir and our investors, when I see all our people, attendees and our investors believing in us, I feel that maybe we are not doing what we should to the extent of gaining the confidence of our investors, other than those who believe us in the market. We are -- I mean, I -- this is what I wanted to say. Believe in us, I always say, keep investing in us, and we will all grow.

Okay. Sir, we'll take some few questions from last participant, and we'll conclude the meeting. Will that be okay, sir?

Yes. Sure.

Okay. Ms. Soumya, you can go ahead and ask your questions.

This is Soumya Ranjan. I remember we have connected over LinkedIn as well before. So I have a few questions. Like currently, we have some 2-some-odd crores in CWIP. So I just want to know what is the current CWIP works going on? And what are the future CapEx plans for the company?

So Soumyaji, thank you for the patience that you have shown. See, that was as of March 31 is what you have seen. In fact, that time the laboratory work was still going on. Now most of capital works in progress are already done. They have already been capitalized. And there are a few works here and there, like for example, optimizing a laboratory, putting up a tissue culture unit into it, some kind of equipment that we are bringing in still now, all the snags to be clear to make the laboratory functional. So all the major equipments and the peripherals are already in place but there are certain things like smaller equipment, smaller attachments that are still going on. So I think in the coming year, we might spend not more than -- on the laboratory part I'm saying, not more than INR 1 crore, I think. On the product development, we'll be spending some money for sure on facelifting the Yuka Yantra and making it more publicly acceptable figure kind of thing, that we are working on. However, I think -- and if we reach somehow 200 people, then we need additional infrastructure, I don't know how we are going to do that, and we'll come back to you for another round of raise probably, I don't know. It's too early for me to say anything on that. We probably want to add something, we are always looking out for expansion.

Yes. And another thing, you have -- you were having 3 verticals previously. Now you have added 1 more vertical that is knowledge sharing. So my basic concern is like we are still in a growing stage. So how you justify the diversification -- early diversification into multiple fields altogether. So isn't it like quite demanding to get the technical quality professionals and engaging the manpower for those works? Will it not harm any particular line if you are focusing on another line?

Soumyaji, I think there is some misreading that has happened. So earlier, we had the knowledge vertical already there. So we had knowledge, consulting or rather regulatory and the sustainability. Now we added the gambit in the knowledge, [Foreign Language], we have just gone 1 step ahead, and we are seeing industrial permitting. Most of it are normally outsourced to architects. There is an architectural. So we have tie-ups with such people and that is why our outflows to them. So it's an added single window option that we are providing. That is one part of it. Technology vertical, we already had, so there is no change. Research vertical we already had, there is no change. What we have done is we have added one more vertical in form of the laboratory, which we have just added upon in April. So that laboratory has 2 parts. One is the testing part and one it is climate research part. For which we have already added upon the resources and the people to run the laboratory. So nothing has changed only that the laboratory being a cost center, we wanted to have a separate vertical aligned to it, because we are doing too many things in that. That is the only change that we have done in our classification or diversification. There is no diversification. It's a re-categorization of our...

Understood. Excuse me for my misunderstanding. That's very good. And okay, that was my question. And I will just end this discussion. Just 1 suggestion, that for the share price, like one of my previous fellow investor asked, as a entrepreneurs or as a owner of the company, it's quite good to be with the company's engagement and company's operations. Whereas the focus on the street price, let it stay with the investors. So you shouldn't be bothered about the share price, what is prevailing in the market, that is up to the investors. So obviously, if the company is doing well, and now or somewhere in the future, it will get valued. So please don't bother about the share price. Whatever you are doing, you are doing good and you will be doing good in my opinion. So that's all.

Soumyaji, thank you so much. That is so promising.

Thank you so much for your kind words.

That is so promising. And we always -- I usually don't look at numbers, I don't know when was the last time I looked at the numbers but people keep on messaging us what is happening. [Foreign Language] something has gone wrong. Otherwise, we usually want to work, sir. We are very passionate about our subject and business, and we put in our heart and soul. That is what I can tell you. Thank you so much for your kind words.

Okay. So can we conclude the meeting, sir.

Yes.

Okay. So thank you, Ajay sir, Prasad sir and all the participants who took their valuable time to attend this con call. Further, if you have any more queries, please feel free to reach out to us at [email protected]. Thank you so much.

Thank you so much, all of you. I was just thanking from my heart, from the bottom of my heart to everyone who have such patience with us and you people are amazing. I mean you people, your belief keeps us going. And thank you so much, Kirin Advisors. You -- as always, you have conducted it so smoothly for us. Thank you so much. We cherish our relationship with you.

Thank you, Kirin Advisors for your support and conducting this event. Thank you, investors, for believing us and being there with us. Trust us, we will bring in more prosperity for all of us together with this association. We are looking forward for your continued support and trust on us. Thank you. Thank you so much.

Thank you. Have a lovely day.