Thank you. We will now begin the question-and-answer session. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Your first question comes from Deepak Poddar with Sapphire Capital. Please go ahead.

The revenue mix is in consolidation basis. So, the bifurcation we will give you the later on, but it is coming into a total segment of manufacturing, engineering and all goods.

Okay, understood. And regarding, can you just update on your status on your Amravati defence, the proposed manufacturing facility? So, what state is it right now and when you expect to start?

Deepak, what I understand is that the land has been acquired, the project planning consultant has been appointed and we are, there is already a plan which is being in place for the construction of the said manufacturing facility.

And by when we expect the production or commercialization of the facility to start?

So, we are planning to manufacture the first batch to come out on the Q4 FY27.

Okay.

Okay. For Q4 FY27?

Yes.

So, the production and the prototypes and all will be starting in the Q3 of FY27. And this would spill over to Q4 of FY27.

Okay. So, do we expect any kind of revenue to come in, come through in this year or it will start meaningfully?

So, we expect the revenue to come in this year because it is a buyback agreement with a performance guarantee attached to it. So, there will be, whatever production which takes place will be, of course, accounted in revenue coming in.

And so how much, how much we are targeting?

So, it would be a percentage to, we look at around, in a range of around INR 70 crores to INR 100 crores of revenue in this particular quarter.

INR 70 crores to INR 100 crores of revenue. Okay. Understood. And regarding the JV that we are planning at Vasai, so any contribution we are expecting from that JV this year?

Yes, there will be a revenue. So, I am talking about a combined revenue which comes in from both verticals and it will come from this JV as well and it will come from the manufacturing at the Amravati plant as well.

Yes.

Okay. Because I was just looking at the presentation. So, there it was mentioned that the commercial production of Amravati we are expecting to start from 1Q of FY28, right?

So, that would be, that would be the full capacity production. That would be in FY28. And of course, there will be commercial production starting in Q4 of FY27 and that will then of course be lower in the next year coming up.

Okay. And what sort of margins we can expect in defence?

So, we are looking at around 30% to 35% of PAT. 30% to 35% PAT margins?

Yes. Okay. And on the debt side, I mean, what would be our current debt and how much debt we would require for all this CAPEX?

In defence, currently we are looking for around INR 250 crores of debt for the 1st Phase.

And what would be current debt levels?

So, in, sorry, in defence there is no debt right now.

I was just trying to understand the company level. What would be our current debt and what would be additional debt we would require?

So, current debt is around INR 400 crores at consolidated level, outstanding. Because we have solar also, so it is also funded by debt, partially. Yes.

And we would require INR 250 crores for defence and what for other projects?

Sorry? So, yes, so solar, for solar we have around INR 350 crores of debt.

So, that INR 350 crores is additional debt requirement? This INR 2 50 to 3 50 crores you mentioned for defence, you will require additional debt.

Yes, right.

And for INR 350 crores additional debt you require for solar?

No. So, for Solar, we already have INR 350 crores of debt.

Understood. And just one last thing, on the margin front EBITDA this year, what sort of EBITDA margin we should look at, at a company level? So, we are looking at around 16 to 18% of EBITDA.

So, we are looking at around 16% to 18% of EBITDA?

Yes. Okay. That is very helpful, Sir. I mean, would like to wish you all the best. Thank you so much. That is it from my side.

Thank you. Your next question comes from the line of Manan Vandur with Wallfort PMS. Go ahead.

Yes. Thank you so much for the opportunity. So, my first question would revolve around the defense ammunition part. So, just wanted to understand that from Q1 FY28 onwards, for the whole FY28, the ammunition part would add how much revenue and what would, what would the EBITDA margins be for them?

So, in the discourse, I will speak about the EBITDA. EBITDA would be around, around 45 % to 50% of EBITDA that would come around. For the EBITDA, because I was speaking about PA T initially, so this would be 45 % to 50% of EBITDA, right? And as you speak about the revenue towards the ammunition, not the arms, okay, I am talking about the ammunition right now, we look at around INR 200 crores of ammunition of revenue, which would be added.

Yes, when I say ammunition, I mean to say the defense part. I am not trying to go into the aerospace, which is why I said ammunition.

You are talking about arms and ammunition.

Yes, the defense arms and ammunition part.

Around INR 300 crores to INR 350 crores.

Okay, INR 300 crores to INR 350 crores for FY28. Okay, got it. And so the second question would be that, what is the share of Tembo in the aerospace venture? Because you said that it is a JV. So, can you explain the capital structure, please?

So, it is, basically, this is a collaboration. So, the structure is yet in process to be made. And in due course, it will be informed in the exchange.

Okay, understood. And so last question would be that, do we have a guaranteed offtake in the aerospace?

Okay, understood. Yes. So, the last question is that, do we have guaranteed offtake from the aerospace venture too, just like how we have for the defense?

So, what it is, basically, it is an expansion of the current manufacturing facility, which is operated by the Collaboration. And it would be a mirror effect coming out in India. And after that, the facilities which they are already manufacturing in Japan and Europe and in Malaysia would be transpired back to India. And the orders are already, so it is actually getting into larger manufacturing and larger production for orders which are already in place. And of course, there are certain products which we would get into, components getting into manufacture, which we would be the, and I can rightly say, we would be the only company in India to do this. And that would give us an edge of, of not even an edge, it would give us a complete advantage in the existing defense or this UAV platform or corridor which is existing in the country. But apart from that, as you say about a buyback, there is already business in place, which needs to be sufficed. So, there are already orders in hand. That is the reason we can give you guidance for revenues.

Understood. And just the last question along with this would be that same service for FY28, what could be the revenues and the EBITDA for the Aerospace Division, please?

So, as I said that there would be INR 100 crores of additional base from the time, we start up manufacturing. That would be INR 100 crores of additional revenue and approximately INR 100 crores of additional revenue and the EBITDA remains the same. About 45% to 50%.

Okay. Thank you so much. That is it from my side. God bless you. Thank you.

Thank you. The next question comes from the line of Abhay from Shah Investment. Please go ahead.

Yes, so my only question would be that what is our Tembo Global subsidiary in the Tembo defense sector?

So, Tembo Classic Engineering Private Limited is the subsidiary.

Yes. And what is the percentage of holding Tembo Global has in subsidiary?

Around 76%. Around 75%-76%.

75%-76%. All right. Fine. Thank you.

My question is around the Vasai facility. So, could you talk us through how the capacity utilization is shaping up there? And what is the utilization currently? And by closure of FY2 7 somewhere would be target?

So, Nachiket, good evening. What you mean is the Vasai facility at the moment, we are looking at around 35 %-40% of capacity utilization. And we by the year end of FY, we look at around 65%-70% of capacity.

Okay. And the guidance which you have given for FY27 includes in sync with the 65% -70% utilization?

So, we look forward to overcome our guidance. The idea is always to go beyond what we are guided.

Yes, I got it. And so by me, of course, this is commendable that we will almost double the utilization in a short period. So, what would be the peak utilization and by when do we target to reach?

So, idea is to get the peak utilization in around one and a half to two years. That is the idea. Okay. And of course, as a manufacturer, as an entrepreneur, we would like to capitalize as soon as possible.

Yes, Sir. Of course. And we have around 1 lakh MTPA capacity split between ERW and strut channels. So, could you break down the split further as to what would be for the price? So, how is this 1 lakh capacity split between the ERW struts and other existing?

ERW would be the maximum component. Okay. Almost about 40 % to 50%, but other businesses and other components are also increasing during this period and the last one. So, now probably ERW will become a little less contribution, but the other strut channels and other components, the business are also increasing. So, month on month, orders are coming to the peak level and every month is a better month than the month coming ahead. So, we expect that all of them to surpass a lot of things.

Yes. And like the commercial sales for these products have already commenced or they are still on the horizon?

So, there are certain products for which commercial production has already come in and certain are in line to get.

So, pipes are being sold already?

No, no. They are yet to contribute to the revenue. The channels and all have already come in.

So, it is slightly better or almost at par at the current EBITDA what we are looking at.

Okay. Like around 16% to 18%.

So, I do add to this particular comment, what we manufacture is also used in our EPC division. So, then that is how we leverage on better margins. Okay. So, a lot of engineering also comes in play. One is the physical side of a product and one is an engineering side. So, when you combine both of them, it always helps in your profitability and margin growth.

Yes, absolutely. But S ir, our preference would be then to have more captive utilization, have value-added engineering upon it or to sell outright.

Captive utilization plus value-added engineering is the best combo which you kind of succeed in the long run because then you do not just become a person who is manufacturing, but you add value by putting engineering in place.

Absolutely. Thank you so much.

I will next question comes from the line of Nitin Babulal Gandhi with Inno Quest Advisors Private Limited. Please go ahead.

Yes, thanks for taking my question. As I understand the current d ebt is INR 400 crores out of which solar contribution is almost INR 350 crores. And some parties of solar will start flowing this year ‘27. So, can you share what is the overall game plan for solar? Where do you see the potential?

Sorry, your question is not clear. Can you please repeat it?

At present, we have a debt of INR 400 crores and we have deployed in solar business substantial money and INR 350 crores is outstanding against that, right?

No, I think it is a little bit. See, my current debt is INR 400 crores on a consolidated basis which also includes solar and that. So, solar as a division, total debt would be INR 400 crores, right? Now, ask me the question.

So, how is the solar business revenue contribution going to be?

So, solar would work out at an IRR between 15 to 16% . That is how the revenue contribution would work out to be. And there is a subsidy also attached to it which is not calculated while deciding.

And what will be asset turnover from this business?

What will be the revenue contribution coming from this division?

Of course, there will be a revenue contribution coming from this division as well. So, there will be around… So, in current year, what we are looking at around INR 50 crores to INR 60 crores of revenue contribution coming in this year. And at peak level, what will be the contribution? Around INR 80 crores to INR 90 crores.

And that will be somewhere around FY28, right?

Yes. Okay. It is a 25-year PPA.

And coming to the defense business, INR 300 crores is additional borrowing required or it is going to be the total project cost which is INR 300 crores? You said INR 300 crores is going to be the revenue…

So, there will be two phases, okay? We intend to grow this defense on the initial first 2-3 years at a INR 1,000 crore basis, okay? The first set of investment would be around INR 550 crores and second would be around 400-INR 450 crores, that would be. So, in that, there will be debt also and internal accruals and equity participations.

For the 1st Phase, out of INR 550 crores investment, INR 300 is going to be the debt which you are going to borrow in subsequent phases?

Around INR 200 crores to INR 250 crores.

Okay. And what would be the asset turnover coming from this business? What would be the? Asset turnover. So, it will be the top revenue possible from this division.

Okay, revenue. So, as we mentioned earlier in our question, the first year in FY28, we look at around 300 to INR 350 crores of revenue by FY28.

No, I am asking what is the peak potential, maximum what we can show from this?

Peak potential, it will keep on increasing, dear. We are going to put in… there will be a lot of that we would…that you will come to know during the course of time.

Okay. Out of INR 1,600 crore guidance, you are saying INR 50-60 for Solar and INR 100 for the other business. So, the rest will come from EPC, right?

So, from EPC engineering and a part would come from textile as well because there are orders already in hand which we have to fulfill and… but of course, as you have seen over the trend, the textile is getting plateaued and would be plateaued.

It is not possible. Honestly, it is not possible at the moment. So, during the next guidance and the next quarter, it would be very much visible how we are going to act.

Okay. Thank you. And do you arrange for a visit personally?

More than welcome. You can connect with in vestor relations people and they can guide you further. Okay.

Thank you. Thank you. Your next question comes from Isha Shah with Malhotra Family Office. Please go ahead.

Thank you for the opportunity. So, what were the company's working capital days as of the end of Q1 FY27 and by when do you expect a meaningful improvement in the working capital efficiency?

So, we are looking at around 90 days of working capital at the moment and we look forward to get more efficient to between 80 to 90 in the coming days and that is how our plan is.

Okay. And so, my second question is what led to textile revenue contributing just 1% to the overall revenue mix of Q1 FY27?

So, our current EPC and manufacturing, we had a lot of contribution from the EPC and manufacturing base and textile, the contribution of textile was because of the current total expansion towards the EPC and we had certain orders to fulfill in this quarter. That gave us the efficiency and the proper management of productivity towards our manufacturing gave us this boost towards expansion towards the EPC and manufacturing division.

Okay. Thank you so much. That is all from my side. Thank you.

Thank you. Your next follow -up question comes from the line of Manan Vandur with Wallfort PMS. Please go ahead.

Yes. Thank you so much for the opportunity again. So, my question was on the V asai plant where we have expanded to 1 lakh metric tons. Just wanted an understanding that how are we going to use that because we are doing now defense also, then aerospace also, but we have capacity over there for ERW pipes and strut channels. So, that is how we will capitalize for defense or if not for defense, then how are we going to capitalize as much of extension?

So, at the moment, defense would be mirrored to immediately suffice the current orders, which are already there and the collaboration. Okay. And this would expand to our facility going back to Amravati and we would get into a new facility for the JR UAV . This is what it is. And as and when we require the additional space for expansion, we will get into that and we will make sure that the capital production reaches this level.

Okay. But then what will happen of the 1 lakh metric ton that we have made for strut channels and ERW?

So, that we already have a facility in place. So, that is why I said that we have a facility where we can accommodate these things. And apart from that, as this is a temporary arrangement to suffice the ongoing orders in hand and in future, as I said, we would expand to a new facility and take this division over there.

Okay. Understood. Okay. Thank you, sir.

Thank you. Your next question comes from Disha with Sapphire Capital. Please go ahead

Yes. Thank you so much, Sir, for this opportunity. Just a couple of questions, Sir. Firstly, on your FY28 revenue, we just want to get a sense of how much revenues are we targeting? What would be the mix between solar, engineering, and defense? And what sort of PAT margins do we look up?

So, this guidance will come in due course of time for FY28. This guidance will come to you, but it will come in due course of time. But as we, if you see CAGR in the last five years, and you can, we have positively looking at growing. And every time we come up with a figure, which is actually, which surprises. So, the Almighty is kind and we look at this positive growth going forward as well.

But the overall contribution from defense, we are expecting INR 300 and 350 crores around from the ammunition and INR 100 crore from the aerospace division. Is that correct?

This is coming from in FY28, in the defense.

And that will be at a 30%-35% sort of PAT margin.

That will be EBITDA at a 45%-50% of EBITDA.

And 30%-35% PAT margin.

Yes. As mentioned as well. Okay.

Okay. And just the next thing for our overall pipeline that we are currently looking at, what sort of order book target are we looking at?

So, we have, see, this is an ongoing thing. So, there are a lot of projects for what we have bided. And as mentioned, so there are around INR 2,400 crores plus of projects in pipeline. And current order book is INR 1,500 crores. So, this is an ongoing process. So, every quarter on quarter, we have certain targets of orders and to come in place and all. So, we are working towards that.

Okay. That is it for my side. Thank you.

Thank you. Thank you. The next follow -up question comes from Nachiket Kale, an individual investor, please.

Thanks for the opportunity again. Just a small follow -up. We have raised funds around three times in the last two years. So, I just wanted to know, like, we are on this ambitious growth track. So, do we need another fundraise or the funding part is taken care of?

Sorry, I could not hear you before.

So, since you have already raised funds thrice in the last two years, do we need another fundraise to fund our growth plans ahead?

So, as of now, this is a strategic decision which will come in place only after a management discussion. And as and when required, we would notify the exchange accordingly.

Okay.

Thank you. That was the last question for today's call. And on behalf of Tembo Global Limited, that concludes this conference. Thank you for joining us. And in case of any further queries, please reach out to Tembo's investor relations team at cs@ tembo.in. I repeat, that is cs @ tembo.in. You may now disconnect your lines. Thank you.