Venus Pipes and Tubes Limited (VENUSPIPES) Q3 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, we welcome you all to the Q3 and 9 months FY '26 Earnings Conference Call of Venus Pipes and Tubes Limited, hosted by DAM Capital. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on the date of this call. These statements do not guarantee the future performance of the company and may involve risks and uncertainties that are difficult to predict. Now I hand over the conference to Mr. Aasim Bharde from DAM Capital. Thank you, and over to you, sir.

Thank you, and good evening. On behalf of DAM Capital, it's a pleasure to have you all on Venus Pipes and Tubes Q3 FY '26 Post Earnings Call. From the Venus team, we have Mr. Arun Kothari, Managing Director; Mr. Dhruv Patel, Whole Time Director; and Mr. Kunal Bubna, the Chief Financial Officer. have the opening comments from Mr. Kothari first, followed by the Q&A. Thank you.

Good afternoon, and warm welcome to everyone on the Q3 and 9-month FY '26 earnings call for Venus Pipes and Tubes Limited. I have been joined by Mr. Dhruv Patel, our Director; Mr. Kunal Bubna, our CFO; and SGA, our Investor Relations adviser. We have uploaded our Q3 FY '26 investor presentation on stock exchanges and company's website, and I hope you had an opportunity to go through the same. I will give insight on performance of the economy, followed by performance of the company. The Honorable Finance Minister recently presented our ninth union outlining the government's economic plan with a clear focus on growth investment and financial discipline. The government focus continues to remain on growth-led supported by strong push towards public capital spending. Capital expenditure has been increased to INR 12.2 lakh crores for FY '26 and '27. Further, the recent FTA will also help domestic manufacturing sector that underlines the government's commitment to building better infrastructure and supporting job creation and encouraging private investment. It also places strong emphasis on the power sector and semiconductor sectors, both of which present meaningful growth opportunity for the company in the years ahead. The budget along with recent GST-led rationalization measures is expected to further strong the economy. Overall, the budget reflects the strong policy continuity and a steady approach towards building a refinance stable economy. On the industry front, the stainless steel pipes and tube industry continues to gain importance compared to other type of steel and pipes driven by its superior quality, durability and long service life. As highlighted in our earlier calls, the while industry demand is growing a significant portion of this demand has traditionally been met by the unorganized sector and imports with the tighter regulations and customers placing greater emphasis on quality and long-term reliability, we are seeing a steady shift away from unorganized players. On the import side, antidumping duty is also supporting domestic high-quality manufacturing. Coming to Venus Pipes and Tubes, your company has established itself as a trusted brand known for consistent quality across both domestic and international markets. Over the years, we have built meaningful scale and today stand among the leaders in installed capacity in the country. As we scale up, we also focused on moving up the value chain by steadily expanding our product range, we have created our presence across several critical industries and improved our ability to serve more demanding applications. These efforts has helped us build customer relationship and position us well to capture long-term growth opportunities. Our product portfolio has continued to evolve in line with changing market needs and customer expectation. With our recent capacity expansion into value-added products, we believe the company is entering a new phase of its growth journey. Going forward, growth will be driven by higher share of value-added offerings and increased participation in critical end use sectors. This segment demand a strong technical expertise, consistent quality, product quality and proven execution of credit deployment. Capabilities that clear to develop, our long operating history, strong customer trust and disciplined execution give us the confidence to scale successfully in these areas clearly differentiating Venus Pipes and Tubes and setting the competence for a customable and higher quality growth path. Coming to our Q3 and 9 months FY '26 operational performance of the company. Our growth journey is backed by numbers. We continue to report record quarterly performance with all-time high revenue of INR 296.7 crores for Q3 FY '26 growing by 28.3% on a year-on-year basis on 9-month basis annual, we have reached revenue of INR 864.7 crores in 9 months FY '26, which is already 90% of our FY'25 percent revenues. Our domestic performance improved during the quarter with revenue growing 43% year-on-year to INR 203 crores and more than 15% sequentially. The domestic demand environment improves meaningfully during the quarter as well as export continues to perform well computing around 31.5% of revenues at INR 93.5 crores. On a segmental basis for 9 months FY '26 both seamless and welded pipes delivering a strong performance registering growth of over 27% and 22% respectively, respectively reflecting first-time demand and a stronger execution across the businesses. Our capacity remains healthy with newly commissioned capacity ramping up well and contributing meaningfully to volumes. Supported by strong order book of approximately INR 470 crores, we remain confident of recreating the ramp-up of this capacity and further growth in the coming quarters. On the CapEx front, our new capacity for fitting as well as seamless pipes and tubes are progressing well and remain firmly on track. These facilities are expected to come on stream over the coming months and we will further able to cater the high risk, high value and critical application segment. Overall, we are excited about the year ahead and confident that 2026 will be a year of meaningful growth and driven by the commissioning of the new capacities and our continued expansion into a more value added product portfolio. With this I hand over to Mr. Kunal Bubna our CFO.

Good afternoon, everyone. We are pleased to share that our company has delivered a resilient performance in the third quarter and 9 months ended December '25. On revenue front, revenue from operations for Q3 FY '26 stood at INR 296.7 crores as compared to INR 231.3 crores during Q3 FY '25, achieving a growth of 28.3% year-on-year basis. Revenue for 9 months FY '26 stood at INR 864.7 crores, witnessing a strong growth of 23.5%. Revenue bifurcation for the quarter was 34% from welded, 60% from seamless and 6% from others. Growth in the Seamless segment was 43% year-on-year basis and Welded segment registered a growth of 39% for Q3 FY '26 on year-on-year basis in terms of revenue. Our export sales stood robust at INR 93.5 crores for the quarter compared to INR 89.1 crores during the same period last year, a growth 5% on year-on-year basis. On the EBITDA front our EBITDA for the quarter stood at INR 48.8 crores as compared to INR 37.2 crores in Q3 FY'25, a growth of 31%. EBITDA margin for the quarter stood at 16.4% compared to 16.1 in the same period last year. For 9-month FY'26 basis EBITDA saw a growth of 12% standing at INR 141.1 crores with margin at 16.3%. On the PAT front, PAT for Q3, FY26' is INR 25.6 crores compared to INR 18 crore in Q3 FY'25, a growth of 42% on a year-on-year basis. PAT margin stood at 8.6% for the quarter. During the quarter and 9 months, we had a onetime impact of approx [indiscernible] INR 455 lakhs due to increase in gratuity and lease liability on account of changes in labor code. As we look ahead, we are optimistic about the opportunity before us backed by disciplined investment, consistent execution and well-defined growth road map, we are focused on building a stronger Venus brand and raising the bar in the stainless steel pipes and tube industry. With this, I would like to open the floor for question.

[Operator Instructions] The first question comes from the line of Dhruv Jain from AMBIT Capital.

So just one question on the export front, right? So we've seen a bit of a decline in momentum in terms of growth. So how should we think about exports going forward? And if you could also share what is the split of the order book with respect to domestic and exports. So any reason why the export growth has slowed? And in the next year, how should, in your view, exports growth come through? That's my first question.

So primarily just to on the front of order book, it's around more than 30% on the side of export and balance in domestic. So if you see we had also been exporting to USA in the last quarter, we did around more than 20%. But this quarter, it was around 12% sort of number of the total export what we exported to USA. So again, the percentage has been more than 30%. We are definitely not -- it was as in the last quarter it was. But again, the order book is there from Middle East, Saudi and also from good order book is also coming from Europe. So we see more than 30%, 35% should be export also going forward -- in going forward year also.

Okay. So and with the...

And just to also mention in case of USA the recent tariff fees, which have been done -- because in case of our product, the Section 232 duty of 50% was same for every country exporting to USA. But there was a lot of apprehension because there was no visibility about the tariff, what would be the tariff. It can increase any time. So I think that piece has been done in the recent 2 days, 3 days back. So I think as a steel perspective, we should see order from USA also coming forward in coming quarters.

Sure, sir. Sir, my second question is on the fittings business. So given your capacity comes on stream in the second half -- I mean, it's come on stream now in the second half. How should we think about it from next year growth perspective in the sense that what is the kind of contribution or any targeted revenue that you have in the fittings business -- and how should it ramp up in FY '28 as well? So a 2-year ramp-up plan in that regard would be very helpful.

See, as we said earlier, the investment is roughly in the range of INR 60-odd crores in our fitting business, and we can see an asset turn of around you can say, 3, 3.5x. As you rightly said, the fitting business will be coming at the end of this March 2026. So from the next year, we will be getting the benefit. So in the first year, maybe something around 50% of -- near to 50% of that should be contributing. And in the FY '28, I think a substantial portion of the capacity should be utilized from the fitting business.

Our next question comes from the line of Romil from Electrum PMS.

Sir, just wanted to understand a little bit on the value-added products. So obviously, fittings and the other products going ahead will be value-added. So can you give a percentage of the entire portfolio, how much it is now and in the next, let's say, 2 years, how much that can become and hence, what impact on the margins can come through at matured utilizations?

See, it's around -- currently, if you see those value-added products, the contribution what is coming in the business is around 15% to 20%. And going forward, given the expansion that we are doing on the side of fitting and also on the side of seamless and other businesses, we believe we should be at least double of that what is currently being contributed. And on the front of EBITDA 16.4%, 16.5% roughly for this current quarter, and we believe it can move from 16% to go up to 18%.

Okay. Up to 18%, it can go when this value add.

It will come in phases definitely.

Yes.

Because FY '27, definitely improvement will be seen and FY '28 should be the year where the entire improvement should come.

Okay. Okay. And just one more thing. So I think US was a smaller proportion right now of the overall revenue for us. But with this trade deal and all, do you foresee that US can become a bigger growth driver? And hence, what are the segments that we will look at in that market? So petrochemicals, power, any sense on that?

Absolutely this ease of tariff definitely US -- of course we have been exporting to USA and first quarter of FY '26 was a good portion of our supply to USA. And post that Q2 and Q3 the number has been deflating but with this ease, we definitely believe US should be increasing. And the sectoral mix again, we are selling to the -- we are not selling to the end customer there. But as you rightly said, it will be a mix of chemical and engineering and other sectors.

Okay. So basically, this quarter, the export growth was lower because US contributions came down in the last 2 quarters.

Yes.

Okay. Okay. And lastly, do you -- can you share some order book details for this quarter?

Right. It's around INR 470 crores out of that more than 30% we export in [ Dhaneti ] development.

Okay, 30% is export. Okay. So domestic is picking up, right?

Yes.

Any sense on domestic, what -- how do you look at it in the next 2 years, 3 years?

It's going good from the perspective the orders are being received and power sector, oil and gas, engineering can be easy shelter.

[Operator Instructions] Our next question comes from the line of [ Pritesh ] from Lucky Investments.

Sir, can you give the order inflow number for 9 months versus 9 months last year?

Pardon.

Inflow, inflow?

No, we are [indiscernible] breakup are giving up now.

Okay.

Total order, you only give order backlog.

Yes. And how does this stack up versus last year INR 470 crores versus last year, what should be the number?

It was [ INR 350 ] crores.

Okay. And my second question is in your capacities, which is to be commenced operation, it is fitting seamless pipe and condenser pipe or condenser pipe has started operations.

Condenser pipe has started operations. It will be fitting and seamless pipe.

What is the status on the order from condenser pipe capacity?

On a capacity perspective we are running around 25% to 30% currently.

Okay.

And few of the approvals had been received from power sector for condenser use and few more approvals we are working on and we believe it was approval, as and when is earning received it should expand the capacities, utilization for condenser [indiscernible].

Pritesh Ji, for example, this [Technical Difficulty] difference is not able to produce condenser tubes, we also supply [Technical Difficulty] as well as in pharma industry also of some of the good tenders in the coming months is [ getting ] as a in some of the power sector in India. So we are hopeful, the [Technical Difficulty]...

There seems to be some echo in the background.

Okay, sorry. Yes, we are [Technical Difficulty]. Hello, now it's okay?

Yes, it's better.

Okay. We are expecting some new tender, which is floated by the India power sector, which will be open in the next 2 months to 3 months. So we are hopeful the condenser and [ discipline ] capacity will increase in the coming quarter.

Okay. What is the peak utilization number possible out of the condenser capacity that you have put the fittings capacity that you have put?

Yes, we are anticipating.

See, for condenser I take a full capacity run for fitting and value-add welded the better [ name ] would be whether condenser will be running around INR 350-odd crores.

This is for the value-added pipes and fitting?

Welded and fittings taken together.

Fittings and the new pipes, okay? Okay. And how much of this INR 350 crores do you think can come in FY '27?

In FY '27, on the side of seamless, we believe more than 80% of it [Technical Difficulty] but seamless would be roughly between INR 220 crores to INR 250-odd crores, to which we believe we should be 80%. And on the side of value-added, welded tube which is INR 120 crores, INR 140 cores and between that there we believe it should be around 70% of it.

So basically, out of INR 350 crores, you will be able to do INR 250 crores to INR 270 crores. That's how we should interpret?

Yes.

So then we have a base product growth, right, plus these 2 new product areas that are going to start larger operations next year. Is it fair to assume that the revenue growth will be much higher than what you would have achieved in the last 3 years?

Absolutely.

So what kind of revenue growth should we look at in FY '27?

See, again, on an overall basis, what we are currently guiding is at least more than 20% compared to FY '26.

But 20% is this number only, right?

Sir, again, this number, 80% and 70% are some assumption. Definitely, it should be higher than that, but what we are currently guiding is more than 20%.

Okay, sir. And my last question is why is it that the welded tubes is growing slightly slower? And second, what is the status of capacities or competition in the seamless tube side, so 2 different questions.

See, on the side of welded last quarter, it was fine. But again, in this quarter, there has been certain decremental and it is majorly because of the decrease in the sales to USA. But going forward, there should be an order from Saudi and Middle East on the side of welded and power sector also. So we will be able to ramp up that. And from the perspective of competition, seamless, there has been a competition, but keeping our -- keeping backward integration and also tubing business and also we are coming up with this BA tube and value-added tubing business, which will cater to hydraulic instrument, instrumentation of heat exchangers. So we are slightly better placed as compared to the new capacity or new competition coming in again, along with requisite approval and again, presence in Europe and many part of the world, key seems to be this -- we should not be that much affected by recent competition.

Our next question comes from the line of Bhargav from Ambit Asset Management.

Sir, my first question is that is it fair to say that the order which BHEL is likely to announce in our sort of addressable market is closer to INR 3,000 crores to INR 4,000 crores. And of that, just about INR 700 crores have been ordered so far?

No, still for the pipe order in the pipe segment order, not only INR 3,000 crore order is pending with the BHEL. Whatever the tender has been issued by the NTPC from NTPC or from Adani Group, the BHEL or other power companies. So we are anticipating in the next 4 years to 5 years, almost more than 8,000 metric ton demand will come from the power sector. So still a lot of pending to be in the domestic market. So they will float almost in every 6 months or every quarter, they will float the some new tender and this demand completely maintain at least for 4 sectors to 5 sectors. Further, this demand will be also limited to very few players who are approved in either BHEL or NTPC or Adani Power.

So sir, in rupees crores, how much does this translate into?

Almost you can say -- more than you can say it will be more than INR 6,000 crores near about.

Okay, INR 6,000 crores. And our market share as of now in the tenders which have already been ordered is how much, sir?

Almost we can say right now the water tenders floated in last 1 year, our market share is approximately 50% to about 15% to 20%.

15% to 20%, okay. And can this market share increase or given...

Yes, definitely, it will increase since we have developed a new plant, the conductor power, we have not received not much tender in the conductor power sector from the power sector, which we are anticipating in the coming quarter. So our contribution definitely will improve.

And how much of the pending order book of BHEL is remaining now?

It's around 60%.

Around 60%, 65%.

60%, 65% is unexecuted, still?

Yes, unexecuted which should be executed in coming 2 quarters to substantial portion of it.

Secondly, sir, is it possible to highlight a few key approvals which we might have received maybe in the Middle East or Russia. Any clients which you may want to mention which can be potentially big clients going forward in terms of ordering?

Yes, definitely. In the last quarter, we have received some new approvals in the -- from overseas nuclear sector, overseas domestic and overseas oil and gas sector and domestic food processing industry for some more new [ grad ] in power sector domestically.

And this is for which country, sir?

Just I want to keep this secret.

So this is primarily UAE, that's what you're highlighting?

Not in UAE [indiscernible] and a few of the companies are multinational also who are scattered around the world or so.

[Operator Instructions] Our next question comes from the line of Pallav Agarwal from Antique Stockbroking Limited.

So just a question on what is the net debt levels at the end of the quarter?

It was -- net debt was around INR 260 crores.

Okay. And do you expect that this should be the peak level or maybe the CapEx and working capital this can increase slightly?

For the coming quarter, I believe we believe this should not increase much, INR 10 crores, INR 20 crores from here.

Okay. And any improvement in our working capital levels over the previous quarters?

No, similar to -- more or less similar.

Okay. And sir, anything on the margin front. So we were at about 18% EBITDA margin, and that has come down to about 16% level. So with the [ WAP ] going up, can this go back to about 18% by FY '28?

Yes. That as we said in the start of this coming quarters, this condenser value-added then business, then also on the side of seamless business, regarding tubing and [ BA ] business would be there. So definitely, in the coming 2 years to go, it should definitely improve from 16.4% to move to around 18%.

[Operator Instructions] Our next question comes from the line of Dhananjai Bagrodia from Alchemy, please go ahead. [Foreign Language]

Sir, just wanted to ask you in end market, how is the end market doing and who is predominantly taking market share?

Can you just repeat?

Sir, how is the end market growing? And how are we taking market share from there? I mean, [indiscernible].

In case of domestic see predominantly the supply -- mainly the end market only. So we are definitely getting those on the front of export the [Technical Difficulty] and we are seeing demand from power [Technical Difficulty].

So sir, what I want to understand how much in your estimate would you think the end market is now, I just want to understand [Technical Difficulty].

Your voice seems to be very muffled.

Absolutely...

Okay. Can you hear me now?

Yes, comparatively better.

So I was asking who would -- how is the end market doing and the company will be taking market share from who predominantly? Would it be from global players, Indian players, who would be taking market share considering the capacities are so small in stainless steel?

The demand is there from power sector where the demand was, which was not there in the system. So from there, we have been able to get an order. Apart from that, again, from the domestic players, generally, that demand has been shifted from them from the smaller or unstructured players to 2-wheelers. So this has generally happened in the domestic market.

And in how much would be the industry growing?

It's very tough to say those numbers because the sectors are being added. Generally, we see a range of 8% to 10%, but keeping this demand of power and new industries being added, it will be definitely higher than that.

Okay, fine. And sir, maybe I missed this, but in your revenues, how much percent coming from volumes and how much would be coming from ASP increase?

From?

No, see volume numbers, we are not currently giving.

No, don't give any numbers. I'm saying broadly from a revenue growth percentage-wise, how much percent would be from revenue growth and how much would be from ASP increase?

From volume growth, it should be at least you can say from quarter-on-quarter more than 15%.

And year-on-year?

It will be again same sort of number.

Okay, sir. So then would it be fair we've taken price hike as we move up the chain, so price hikes have been taken or in terms of realization has been improving because of a segment mix change?

Not much on the change of segment currently. It is again, the grade mix which keep on which also altered the prices of the good.

Okay. So then predominantly, it would just be we've been able to increase revenue of particular items. Would that be fair?

Revenue, yes, definitely, the contribution for seamless share increase, yes, they increased our revenue. That is also helping.

Our next question comes from the line of Sonal Minhas from Prescient Capital Investment Advisors LLP.

This is Sonal Minhas. I hope I'm audible.

Yes.

Sir, I had 2 questions. First question was regarding the BHEL order and the backlog you were talking about. You mentioned to the previous person who was asking the question, you have around 15% market share. Just wanted to understand like who were the other 2, 3 noteworthy players who basically back these orders. If you could share 1 or 2 names, just for understanding the industry and competitive nature, that will be helpful.

Giving the name of other player would not be right. But again, generally, just to mention you for this power bidding of GAIL and all, generally 5 players to 7 players are approved currently in the country. Out of this, we are amongst them.

Okay. So isn't this public knowledge like that who gets...

No, they don't --... It can be available through BHEL, but not all public.

Okay. I understand that. Second question, sir, was with regard to the price realization and the volume growth you were just talking about to the previous gentlemen. The kind of realization growth that we've seen right now in this particular quarter should essentially materialize into a little higher gross margins, a little higher EBITDA margins. So directionally, are we heading towards, let's say, 18% kind of EBITDA margins in FY '27, '28 or that's still a little far off?

No, no, no, not absolutely far away. You rightly said by FY '28 definitely '27 would be year where you definitely will see the -- for the 9-month this is 16.32% EBITDA margin. It will definitely be improving from here. And by FY '28, definitely the target is to reach by around 18%.

Got it, sir. Sir, just squeezing in a third question. You mentioned about getting approvals in the international market, some in Middle East. So I wanted to understand what is the lead time of getting these approvals with a particular, let's say, consultant or refinery or somebody who's supplying there. What is the lead time to get in the...

It again depends on client and their comfort level. So sometimes it can take you 3 years to 5 years also, sometimes keeping your credential and less than 2 years also. But generally, the lead times are generally high for getting the approval from the multinational companies.

And is it higher in, let's say, oil and gas than compared to power just for our understanding?

It's more time in the nuclear sector. Nuclear sector takes more time than oil and gas and power. Normally, especially in the case of lead time, lead time normally vary depends on the normal lead time only the approval, submission of the approval doesn't [Foreign Language] we can consider the lead time on the plant front as well as your past execution and the plant capability, all these things does matter.

Our next question comes from the line of Sahil Sanghvi from Monarch Networth Capital Limited.

Congratulations for a very good set of numbers. The first question was with respect to CBAM. So what we are hearing is that there are already benchmarks in place and there are third-party evaluators also. So have we done that evaluation? And where do we stand on the liability that would come? I understand we don't have to prepay this year, but any sense on that front? And could that really impact our margins?

See at the end of December, they have come up with a revised calculation and formulas. And for us also, we have to take those numbers from our -- because precursor emission is also to be considered by calculating the CBAM value. So we have also taken up with our suppliers. So see, each one in the system is working because the formula calculation has been revised at the end of December. So everybody is working. And as and when it up, then we can be able to. But again, we are also picking guidance from [indiscernible] the entire team is working on that.

And what will be our current split as well in percentage vis-à-vis you can give on the export? I mean how much goes to Europe and how much US and how much Middle East?

See, on a 9-month basis if you see the -- it was more than [Technical Difficulty] Europe was around 60%, 65% and US was around 20%, 25%, Middle East, you will probably around 10%, 12% and balance [indiscernible].

Right. And any kind of benefits that we are getting from the EU trade deal? I mean, from 1st of July, there was this quota reduction. So is there anything in the EU trade deal for us?

No, from pipe and tube, as such we have not seen that. But again, the quota reduction to every country who are exporting to EU. It's not standalone India only. Applicable to [Technical Difficulty].

Okay. Okay. And on a Y-o-Y basis, this quarter, was there a price improvement or a price reduction?

There is sort of improvement only.

Our next question comes from the line of Sneha Talreja from Nuvama.

Congratulations on great set of numbers. Just a couple of questions from my end. Given the US tariff just got finalized, how do we see the opportunities in the US market shaping up given in the last couple of years, we've done so much work especially Europe, Middle East where do you see opportunities for the US market? That's first.

See, absolutely, the opportunity should be there because as you rightly said, we have worked on US part and it was a time there to get this benefit, but this hovering off has come. But with this tariff currently -- and see, as I said earlier also Section 232 for all the country exporting to USA. But as there was no clarity on the side of tariffs, that's why the volume or demand the order was not coming in quantum. So definitely, we believe it should be a better opportunity going forward from USA.

I just want to touch upon the working capital requirement, how different it is from domestic versus export market and both in terms of margins given that we've recently seen rupee depreciation?

See, [indiscernible] is more or less similar. It's not that much changing between domestic and export. But again, margin perspective, more generally, when you are established in Europe and US market, we generally drive a higher margin. But I said coming forward quarters, I think we should be able to better profit export market as compared to domestic. But again, set up in those markets, we generally get those benefit.

Understood. And lastly, on your order book front, we've seen a great improvement on a quarter-on-quarter basis from INR 3.5 billion to INR 47-odd billion. So incremental order book would be coming in from which areas? Is it mostly domestic or exports?

From power sector and export.

Our next question comes from the line of Romil from Electrum PMS.

Sir, one clarification I just wanted. So see, we have got new qualifications from the export market also. So our exports are also anticipated to grow. In India also, I think domestic power and all is doing well, so new approvals received. So just want to understand, so next year, probably you said we'll grow 20% plus kind of number. But beyond that, so because next year, you'll have the seamless capacity also coming in. But beyond that, let's say, 28%, 29% going towards there, shouldn't we face some capacity crunch, if at all, the demand remains stronger? And in context of that, do you see the capacities which are coming up by the competition? Can they gain that market if we don't have capacity? How does that stack up? If you can just throw some color?

After new capacity expansion, we'll be able to do the 20% growth for the FY '27 as well as FY '28 we always plan for in advance for the -- we see the market -- how the market demand is going on. We are always open to do the capacity expansion, but we are also focusing on our cash flow. We don't want to take the not much debt for the capacity expansion or we want to leverage our position. But whenever it will be required, we are open to do capacity expansion. You can see in the -- almost in last 4 years, we have the capacity expansion almost more than 4x. So whenever need will arise, definitely, we are open for that. We are more focused on the growth as well as the balance sheet focus and the debt focus, focus on the ROC and ROA.

Again to mention here, see the demand -- new demand has come from this power sector, which was not very consistent as we rightly earlier said also. So that will be also driving -- see, the export geographies, we are trying to capture more. We are expanding our horizon to many parts of the world. That is also come into play. We are moving our supply towards food processing and other. And again, see, we are also adding a product like fitting many of the competitors doesn't have. We are also adding many of the value-added products, which generally not many players are there in those horizons. I think keeping all the mix bag, we believe as a company we will be able to take it forward also.

Okay. So to summarize on this point, probably we are saying that with the capacity coming in and the utilization is moving up for '27 and '28, probably we should grow at around 20% odd with margins improving plus fittings revenue coming in. And post that, if we need capacity, we will plan by '27 or '28 -- so that's the right understanding, right?

But new capacity, the company keep on planning that. But if something comes up earlier also, we'll definitely update you.

Correct, correct. Got it. And sir, just one thing on the export side. So obviously, in the last 1 year or 2 years, we have done phenomenal on the export front. Going ahead, what kind of growth rate can we expect on a normalized basis considering you are getting approvals and all those things? What -- and is export a higher-margin business versus domestic?

See, it's not -- if you see the current year export, it's not nominal [indiscernible]. And further, again, the percentage of the total revenue should be more than 30% incentives that currently. So we are trying that. Again, depend there are a good margin order you get in export, it can go higher than that also. But intent is currently at least above 30% established in this market, definite margin as compared to domestic.

Okay. Okay. Sir, this quarter, how much OCF we would have generated, if you can give that number?

Balance sheet figure currently, I'm not having.

Our next question comes from the line of Shubham Thorat from Perpetual Capital Advisors.

So, sir, I recently have been tracking the company, so yes, kindly bear with me. Firstly, I wanted to know what is the current capacity utilization in seamless and welded segment?

In case of seamless, it's more than 90% and on the side of welded, it is more than 60%.

I just missed your comments on what -- how much CapEx are we currently doing on the fitting and seamless side? And what kind of asset turn are we targeting there? And just wanted to ask when this capacity is going to be live?

See, the capacity of fitting and seamless pipe, a portion of seamless has come, but major capacity will be -- we are targeting by end of this financial year. So primarily the capacity will be live in the coming financial year '26, '27.

You mentioned by end of next financial year, right?

End of this March '26. March '26.

By March '26.

And how much CapEx are you incurring for that? And what kind of asset turn are you expecting?

See, these all CapEx on the side of seamless on the side of fittings on the side of condenser. So absolutely, those should be at least more than 3x, 3x assessment should be there.

3x.

3x, yes.

Okay. Next, you mentioned that our current order book size is around INR 470 crores. And incrementally, we expect orders from the power sector and export demand. So I just wanted to ask what is the execution time line for this current order book size? And what is the application of our products in the power sector?

See, the order size should typically be between -- you can say less than 6 months, 7 months, the execution time for this order book. And see the application in power is varied. These are used for boiler also. These are also used for condenser of power plant. So it's a mixed bag of use in power industry.

Okay. Okay. And any broad comments on demand situation? And just I want to get a general sense on what kind of issues we faced in the last 9 months or the past quarter that we are expecting to a bit relieved upon while going forward?

You see a few of the geopolitical issues has been there, but with the recent ease of tariff on India by US, I think it's a good sign. Again, the deal was not directly impacting us. But again, it's a sentiment improvement is also there. So we believe and also with the demand from power and other sectors in the Indian market also, keeping all this perspective going forward, it seems to be quite positive from now onward.

Got it. Just final question. I just wanted to -- I mean, I missed your comments on the country-wide geography mix that you mentioned in the exports. Could you please repeat that?

We said it was around 60%, 65% on Europe and 20%, 25% on the side of US and balance to other countries, including Saudi and UAE.

How much in Europe?

60%, 65%.

60%, 65%.

Our next question comes from the line of Pallav Agarwal from Antique Stockbroking Limited.

Yes. Actually, my questions have been answered.

Thank you. Ladies and gentlemen, due to time constraints, that was the last question. I would now like to hand the conference over to the management for closing comments.

Thank you all for joining us today. I hope we have addressed all your questions. We remain committed to keeping the investment community informed with regular update on any developments in the company. For any further information or queries, please feel free to reach out to us or our Investor Relations adviser. Thanks, everyone.

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