Ladies and gentlemen, good day, and welcome to the Interarch Building Solutions 1QFY27 Earnings Conference Call. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star , then zero on your touch-tone phone. Please note that this call is being recorded. I now hand the conference over to Mr. Arvind Nanda, Managing Director. Thank you, and over to you, sir.

Thanks for taking time out to join the call. So I think people are now fairly familiar with what Interarch does and what a pre-engineered building is: a combination of engineering, design, marketing, production, delivery at site and erection, like a nut-and-bolt assembly of a plant of any size or any type. So over the years, Interarch has developed itself and made itself capable of designing, engineering, and executing various —very, very complex projects, very complex industries, paint lines, EVs, renewables, lithium batteries, data centres. And going forward, we are concentrating on making it capable of providing steel solutions for nearly every kind of building, which may come up in the future. So we are concentrating on heavy structure requirements, where buildings like high -rise buildings, data centers, large commercial buildings, large -- heavy buildings like power stations or steel plants, fertilizer plants, port infrastructure. The basic idea is to convert Interarch into a complete building solution that whatever kind of building you have, we may be able to engineer it, definitely able to detail it, produce it in-house, deliver it at site in a very proper sequence and pieces, rea dy-made, everything done and just assembled at site as a nut-and-bolt assembly. More and more people in India are looking at this as a solution for their construction because it is very fast. As we all know, speed is key; you save about 50% -60% time, plus all the work is off-site. And it's a lump -sum situation where one company takes responsibility for everything. So for the client, it's a very win-win situation. But as Interarch, as a pre -engineered building company, as a building steel solution company, we have to make ourselves capable. That is the key to this business. If we are not capable of doing these kinds of buildings or the customer doesn't perceive us to be capable, then there is no way that we can get orders. But I'm very proud to say that today, we are perceived as one of the top players and most of the challenging jobs, challenging clients, very complex clients do come to us for even their newer and newer requirements, knowing that Interarch will be able to o r can. And if they do and they say yes, then they will be able to execute the challenge, whatever the new kind of buildings may be. So, in preparation of that, we have now started our heavy structure plant in Andhra Pradesh

on a trial production basis; the official production —commercial production— should be by the end of this month, early next month. In the meanwhile, we have also started the Gujarat pre-engineered building plant, our first plant in Gujarat, on the 9th of July. The Phase 2 should be done by October. So that will be a full - fledged plant during the year, adding to our capacity and making it our fifth fully integrated plant. The second phase of the heavy structure at the same location, the civil works, has already commenced. And we hope that the second phase will also be done by March , and in continuation, the third phase by December of next year to make it a full plant catering to about 75,000 to 80,000 square -- 80,000 tonnes of heavy structures. Because we see a lot of demand coming from data centers and high-rise buildings. In parallel, we are also working on a lot of export markets. We have been exporting to Africa and neighboring countries, but U.S. and Canada are very much on our horizon. We have found good buyers over there. We have found a good partner in Canada , a couple of them as well as in the U.S., who have started buying buildings from us. And we feel that as they are delivered, the numbers , quantity, and volume of exports will keep going up. We are concentrating on building up that market. We are participating in more and more exhibitions and conferences to meet more builders and convince them that we can do the kind of buildings they want and deliver on time. So that should give us a good new stream at least in '27, '28. For our projections, as we have mentioned, we will meet INR2,150 crores to INR2,200 crores this year. We are well on target. We have had a 30% -- 25% increase in the first quarter year- on-year already. We have a very good order book. We have increased our order book in the last 3 months to about INR1,860 crores now. So keeping in view that we want to do at least INR600 crores per quarter going forward for the next 3 to 4 quarters on average, they could be up and down. We have started booking orders on that basis. There are a lot of inquiries, a lot of business available in the market. But like I always mentioned , we need to take orders we can deliver on time, because that is the most critical aspect of being a pre -engineered building company, with the heavy structure also starting, and at least in the next year, giving us the full capacity of Phase 1 and partial Phase 2. We want to revise our projections for '27 -'28 to INR2,700 crores from INR2,500 crores. For EBITDA and PBT, we are keeping them at the same level. But as we go forward, and I think our operational leverage and our internal control of expenses ticking in, we should increase our EBITDA. But currently, we are aiming for 9.5% to 10% in '27 -'28 and '27 -- '26-'27 remaining as we had pro jected. So we are well on track for our projections. And I think now I will open the floor for questions so that a lot of points can come up during your questions and answers. Thank you. To Manish now.

Yes. So thank you, sir, and good evening, everyone, and thank you for joining us today. As Mr. Nanda said, we commenced FY27 on a positive note and the broad environment and the capacity expansions has already been briefed by Mr. Nanda already. So I would like to just give you an update on the order book and immediately followed by the financial highlights, and then we have the questions and answers. So our pipeline continues to remain healthy , reflecting sustained customer confidence and improving investment activity across the industry. We operate virtually in all industries, including the sunrise industry like the semiconductor, EV, data centers and all of those kinds. And as of 31st July '26, our order book stood at INR1,864 crores, significantly better than where it was 3 months ago when we addressed the last investor meet. It also includes a major order for a major energy company in Vadodara, which is INR165 crores. And we continue to remain disciplined in our order selection and quality of the orders, focusing on projects that align with our execution capability, strategic priorities, and profitability objectives. And our diversified customer base and integrated business model position us well to capitalize on the opportunities emerging across India's industrial landscape. Looking ahead, we remain focused on the execution, strengthening the customer relationship and expanding our manufacturing and engineering capabilities, which are our core of the business. Our integrated business model , backed by our strong in -house engineering, helps us achieving our objectives quarter-over-quarter, year-over-year. While the first half of the financial year is expected to remain relatively measured due to the seasonal factors in our business, we expect execution momentum to improve progressively as we get out of the monsoon and over the coming quarters. And with a robust balance sheet, expanding manufacturing footprint, disciplined capital allocation and continued investments in future -ready capability. We remain well positioned to capitalize on India's evolving industrial and infrastructure investment cycle. Coming to the financial highlights for Q1FY27, revenue for the quarter stood at INR460 crores, registering a year-on-year growth of 20.7% compared to INR381 crores in the same quarter last year. EBITDA for the quarter stood at INR39 crores as against INR32 crores in the last year same quarter, reflecting a growth of 24.6%, which is more than the revenue growth, so the pricing is better. EBITDA margin for Q1 FY27 remained stable at 8.6%. Profit after tax for the quarter remained flat at INR28 crores as a function of the other incomes, which I will explain later. And the total order book, as I explained, is upwards of INR1,864 crores. So thank you very much, and we can open the floor for the questions and answers.

Thank you very much. We will now begin the question -and-answer session. The first question is from the line of Sudeep from Ambit Capital.

Thank you for the opportunity, sir. My question was on the revenue run rate for Q1. So you mentioned that for 9 months, the revenue run rate for FY27 would be around INR600 crores per quarter. So this time, it was around INR460 crores, lower than Q3 of last year and Q4 of last year. So what was the reason, like what was the reason behind lower kind of revenue number for this quarter?

See, normally because of the seasonal conditions, of clearances at site and what's happening at site, you will notice that nearly every year, the pickup is -- the first quarter is lower than second quarter, and then third and fourth, that is how it picks up in any case. So there is nothing unusual about it. And so order book is in place, capacity is in place. It's just that during these 2 quarters, the first 2 quarters, sometimes the clearances and site conditions don't allow us to dispatch these customized materials. So that's why I said, we are aiming for INR600 crores a quarter. We have to actually do about INR1,700 crores in the next 9 months to meet our target. So we will -- it will vary a little bit in each quarter. It's not going to be flat. So it could move up to, say, INR550 crores and then INR600 crores and then INR620 crores like that. But that is the standard sort of trend we have seen in the past as well. So nothing unusual.

Okay. Sir, it was actually lower than Q2 of last year, and we had a commissioning of capacity, 40,000 MT coming up in September-October '25. So that was the reason why I asked, like why was it even lower than Q2 of 2026.

Like I said, a lot depends on our clearances that we get. Q1, Q2 can be different, depending where our work is going on. Sometimes in the first quarter, there is rains or there is no clearances at certain sites because we are doing work there and the sites are flooded and work cannot be done. And the second quarter becomes better and sometimes it is vice versa. So there's nothing to worry about it. And what we got into production last September was the second phase of the Andhra plant. The first phase was already there. The second phase, which is about 20,000 tonnes, came into play in September last year and is being utilized now. So there is no reason to worry because our business is not always the same every quarter. First 2 quarters can vary. So nothing to worry about it.

Sure. Got it, sir. Sir, my next question was on the announcement of QIP. So that is like INR250- odd crores. So what would be the kind of envisaged utilization of proceeds?

We had earlier got approval for INR100 crores in the Board meeting 6 months ago and got the shareholders' approval. Then we figured that there's a lot of change happening in the Indian landscape of industry, and we need to speed en up our expansion plans. So the basic fund

utilization is that the Phase 2 and Phase 3 of heavy structure, which I mentioned earlier, in Andhra itself will be about INR150 crores. We sped it up. Earlier, it was going to be a little slower on phase a year. Now we are doing in 1.5 years, all 3 phases. Then another plant in Gujarat, to meet our pre -engineered building requirements we will need another plant in Gujarat, for which we already bo ught the land. So that's another INR50 crores to INR60 crores and INR50 crores to INR60 crores will be required for our, what we have signed, our MOU with the Canadian company to set up a 100% export unit for steel structure, which is called open web joist system to be exported 100% to them. So that is overall sort of broad figures, about INR140 crores, INR150 crores in heavy structure, INR50 crores to INR60 crores in the Gujarat Plant 2; Plant 2, not Phase 2 of this but Plant 2 and the open web joist system, 100% export unit. And to just give you an idea, the last time we raised funds was in the IPO of about INR180 crores. Until today, we have already spent about INR240 crores in capex in the last 2 years, 2 years, say, from first April '24 to now. So the idea is to speed up the expansion and not wait for internal resources because right now, the market is picking up and we feel that we should be a major participant in the market.

The next question is from the line of Anuj Shah from PhillipCapital.

Congratulations on a steady set of numbers. Coming on to the JV that we signed with ER Steel in Canada. Could you just elaborate on the rationale behind this partnership and synergies that Interarch expects to derive in terms of say, technology or product capabilities, customer acquisition? And what sort of revenue potential do you envisage from this venture over the next couple of years, 2 to 3 years' timeframe?

See, we had met this company a year, 1.5 years ago for basically exports to pre -engineered buildings to Canada and North America. So while we were talking to them, and they visited our factories and met us. And they felt that we had the capabilities becaus e the North American market requires very high quality and very precise deliveries. They are very conscious of that , while they are able to pay the price for it. So they felt that there is a system called open web joist system in U.S., which is very commonly used, but only in the North American market. Very few other countries in the world , and India, of course, don't use it at all. So they felt that there is a huge market in North America. And if we collaborate, I mean, we concentrate on the marketing, on the manufacturing and the factory part of it, and they concentrate on the sales and the engineering and getting the custom er that we can build up a good market for it. They have been buying in the past from other players in U.S. And it's -- there are not that many players because this is an item which requires a lot of manpower and manufacturing, and the U.S. and Canada don't seem to be very competitive in it. So the idea was that we would set up a joint venture. We concentrate on the manufacturing part, make the item they sell, they send us the orders, we manufacture and we supply to them and the Canadian and U.S. part is looked after by them, whether it is sales, whether it is collection,

whether it is installation, everything is looked after by them. So we are very keen overall to build up an export market. So we feel that exports should be an important vertical going forward. And the right time to build up is now, when there's a lot of demand from the North American market and other countries as well. And we are in a good position to sort of give the expertise that we have developed over the last 20-25 years in manufacturing, in design, in quality standards to other people and leverage on that. Exports will be more profitable. Prices there are higher. We will make more profit. The expense on sales marketing is 0. Expense on project management is 0. So therefore, we feel that exports are very important, and this is a part of that overall strategy. Over a period of time, this plant is being set up for about 15,000 tonnes. So I feel that over a period of time, if we take an average price currently, we can take about $1.50. So it will be about $20 million to $23 million at full capacity. But of course, it will take 2 to 3 years because it's not going to be overnight that we'll get this figure. In our first phase, we are planning about 4,000 to 5,000 tonnes, which will give us sales of about $7.5 million. And so about, say, INR70-75 crores, with a good -- I would say maybe with a 20% EBITDA margin on that. And capacity is, of course, 3x of that. So in the next 2 to 3 years, I think we should develop into -- the production time in 1 year, we should be in production by 1st July or en d July next year. And then it will take us about 2 to 3 years to build up this capacity. That is our idea. Maybe it will be faster. But of course, we will be ready to expand into another phase of this if the demand picks up; that is how we are planning it. So overall, this plant will give us about $22 million to $23 million of sales from India, and a profitability of over 20% is what we are aiming for.

Okay. Understood, sir. My second question is, sir, what is the current capacity utilization that you've done in Q1, sir?

So we have a current capacity of approximately, with the Gujarat plant also coming up, of about 200,000 tonnes to 220,000 tonnes. And if I'm not mistaken, I think we have done about 190,000 tonnes last year, Manish, is that the right figure?

162,000 tonnes and we had a capacity of 200 (Errata: Correct number to be read as 200,00 0 tonnes) at that time, sir, it was about 80%.

Okay. So you can answer that question in full to them.

Yes. So the last year capacity, sir, was 200,000 tonnes. And with the inauguration of the Kheda plant Phase 1, it has gone up to 221,000 tonnes , to be precise. And last year, our sales was 162,000 metric tons. So that's a capacity utilization of 80%. But in our business, the utilizable capacity is about 85% to 90% of the installed capacity. So if I look at the utilizable capacity, we were at about 88% of the utilizable capacity.

Yes. So Q1, our sales are about 38,000—sorry, yes, 38,499 tonnes. So 38,500 tonnes is the total volume that we have done in Q1.

Okay. Out of the 2 lakh...

That is correct, yes. So that's about 80% again because the quarterly capacity is 50,000 tonnes. So of that...

Okay. Understood. Understood. As far as the outlook is concerned. So full year, we are aiming for INR2,200 crores to INR2,300-odd crores revenue. But are we also confident of maintaining our margins? Because this time, we've done around close to 8.5%, 8.6% kind of a margin. Are we confident of recouping that, and I mean, shifting away to 9%, 9.5%, to 10% kind of a margin that we've done in the previous years. What sort of margin trajectory are we aiming for in this year and probably next year as well?

Well, we are aiming for a sales target of INR2,150 crores right now. So we are trying to increase our margins. I think as we get into more complex job and more complex clients, I think our margins should go up. And also, again, we are concentrating a lot on our internal economy : better purchasing, less wastage, better recoveries, other cost reductions that we can get as a bigger company to increase our margins internally as well. So we are working on both. And I think margins will gradually go up with addition of exports, with the addition of heavy structures. We are also trying to leverage our present expenses to increase our turnover in these lines. So I think it will show results, but I'm not very sure that it will show immediate results this year because we have to also, whenever we open new plants and new areas like we have done, Gujarat and heavy structure, a lot of expense goes into that in advance of actually the sale happening. But I think on '27, '28, we are quite hopeful that we s hould increase our margins substantially.

The next question is from the line of Ronald from ICICI Securities.

Firstly, sir, on the treasury income part. So does this quarter have lower other income because of lower treasury? Does the working capital ratio, especially on the payment side, which you were getting affected last quarter, still persist? Or has it normalized?

No, no, we are in a much better condition. Last quarter, we had explained that a lot of the large projects were in the stage where the billing had been done, money had not been recovered. And we had also stocked a little bit extra because steel prices were going up. And on the other side, to get proper supplies, which a lot of people were not able to get, we were paying the suppliers sort of literally advanced payments to buy the steel. So all these 3 questions—3 things —together had that negative effect. We are back to positive now. And I think the other treasury is because we are spending money on capex. Like I mentioned earlier, also out of INR180 crores that we raised during the IPO,

we've already spent INR230-240 crores. So the money has -- earlier, the treasury funds were coming in and interest coming in because we had that money with us. Now it is getting spent. So in a way, it is a good thing. And depreciation is also going up. So other income is basically the money that we were holding while we had to spend it. So instead of holding it, we have now built up the capacity. But we will -- that should give us more operational profit going forward, of course.

Okay. Great, sir. Secondly, on -- just a clarification that if there is a large order, then it comes out for tendering , then does that order have already got the design and those things done, and there's a cut-off already. So you now have to bid. So instead of you designing everything, I was a little bit confused about whether, say, a mid - to larger-sized company, if they come out for some plant expansion or anything of that sort. So they should have done an estimation of the capex, what they are going to do through a consultant or through a designer already, rather than PEB players again doing the designing and going for the bid.

Okay. Manish, can you answer the question?

Yes. So I'll answer this, sir. Sir, in our case, any customer who is building a new factory or a data centre or any kind of building- when we use the word designed for them, it is basically the layout, meaning how the building flow will be there, where which machine will fit. We do not get the final structural design from either the consultant or the customer. They only do based on the -- they only do the budgeting based on their past experience. For every bid, we only get what we call a design basis RFQ and the architectural drawings basis, which we carry out the entire structural design, not the building layout design, calculate the bill of quantity, how much of which steel is going to get used and then bid. So, for each building, it has to be first estimated, then quoted, and then the order will come to us, and then we will do the final detailing. There is no design that comes to us from the consultant. That is what our business is.

The next question is from the line of Shubhankar Gupta from Equitree Capital.

First question is that I think, Arvind sir, you mentioned that there were a lot of changes happening in the industrial landscape [inaudible 0:30:25 ] numbers, right? Just wanted to understand [inaudible 0:30:31] if you can guide us a bit on that.

I think we lost a little bit of signal. Can you just repeat the question, please?

So I'm saying that you initially mentioned that the QIP of INR100 crores was cancelled out and QIP of INR250 crores was approved by the Board, right? Because of the changes happening in the industrial landscape, and we…

Is it audible?

Yes, but we lose you at some point.

Yes. Sorry, okay. So what I'm asking is, as you mentioned at the beginning of the call, we were planning a QIP of INR100 crores earlier, but have done INR250 crores, right? Because of changes in the industrial landscape, which we were observing on the ground. So just wanted to understand what those changes are and what's happening on the ground. That's one.

Yes. See, what we are seeing is that two things are happening. One is, of course, a lot of the large projects are coming into India because India is trying to encourage them through PLI schemes and other semiconductor plants, renewable plants, lithium battery plants, EVs And now again, the car industry has started moving again automobile industry which was not building for many years because -- so there's a lot of industrial movement because of these very large plants. Most of these industries require very large plants. So therefore, the size has increased dramatically. A lot of the FMCG and paint, they're also coming back. But another thing happening in our landscape is that the use of steel as a building material is also changing. In -- like I said, data centers, high -rise buildings, these are also moving a lot towards steel. So both these things happening together is straining everybody's capacity. So either we bid and take the order, but then we need to have the capacity because these orders are very large. Most of the large orders today, whether it is EV, whether [inaudible 0:32:46] they're all divided between 2 to 3 companies, but there's no one company which can do it even now. So that is a big change in landscape. One is the size of the projects that the government of India, at least, is trying to attract into India? And what is happening? And second is the usage of steel, and a lot of projects which were not using steel earlier.

Got it. So sir, second question is actually on similar line only. So you mentioned that we have been entering the newer segments, data centers, right, renewables probably. So just wanted to understand, like, what part of our -- like the Q1 revenue came from these newer segments. If you could help us elaborate a bit on what these newer segments are according to you? And then what percentage of the order book of INR1,864 crores is from these newer segments? Also of these...

Yes, carry on.

Sir, I'm saying also, are these -- the newer segments only, are they also margin accretive (inaudible 33 40) for us?

See, what we are calling newer sectors is that these renewables EVs, lithium battery, data centers, semiconductors, the chips. There are a lot of these, which we are calling the new age industries. So that is coming in a big way in India because Indian government is also trying to attract phones, phone assembly as we have seen the numbers have gone up. So I think this is what we are calling

the new age industry. And we have positioned ourselves pretty well to cater to that kind of industry in India. So margin accretive depends on the competition. Yes, of course, as they become larger, you become one of the few companies which can do it. But you are not the only company. So it's not that I can demand whatever I want. But yes, they know that only 2 or 3 of the companies can do this kind of project. S o you don't compete with everybody else who can bid get very low. But here the emphasis of the client also is that the doability. Will these guys be able to engineer design my project in time produce it in time, deliver it in time, erect it in time and in a proper sequence? So those things are in his mind. It is not only a production item because it starts from design engineering and then whole thing has to be delivered in a sequence because these projects are so large that I can't deliver everything and then start erection. I have to deliver in very tight proper sequence. Every nut and bolt for a certain area has to go together with all the columns and beams, then only when it gets installed. So that is how the customer mindset works. So naturally, we earn a little better mar gin also because the moment the size of the project increases our productivity level also goes up. A INR10 crores project will be costlier for than INR100 crores project. Sometime I might have to go lower in price for INR100 crores project as a margin, but might end up making more. And as I increase my turnover, then actually my overhead gets divided over a larger turnover. So there are a lot of things at play in this business. Sometimes I will take a very large order at a low margin, sometimes I can get good margin. But our idea is to build up a clientele which will give us some good margin, appreciate us, give us a good margin, give us a good value. We deliver a great job and the total capex involved in our building even in the lithium battery or that is very low compared to their total capex. But it's a very critical item of capex for them. If the building is not done on time, there's nothing that they can do. So therefore, it will get -- so our focus is that only that go with the large companies, go with the companies which appreciate partnership with a company like us, which deliver, which are professional in working, which are very knowledgeable in design, engineering, very good in sales. So make yourself a good partner to the world's best companies in India. And then I think it will come. So we can only do the effort. The results sometimes are not really in your control. But our effort is to reach a point where we do make much better profi t than we make today. We don't think we are making very good profits. We should do much, much better. But then it's not -- everything is not in our hands, yes.

I don't have the exact breakup. Manish, do you have the exact breakup or we can send it to them later?

No, we can send it to them later. But I can tell you that part of the -- next part of your question that how much of our order book is through this new age industry and new segment, that's about 35%.

35%. Okay. Got it. That's helpful, sir.

Of the remaining order book. With the new age industries as well as the new sector, which is the multistory buildings and data centers and hotels and all of that.

The next question is from the line of Akshay Kolekar from Dalal & Broacha.

So my question is basically on the PEB business. So based on the recent conversation on the call and over the last 1 to 2 years, you are doing capex. So it looks like this industry is quite capital intensive. So would you agree that the sustainability in a growing business is difficult without regular investment that like in PEB industry require capex in manufacturing capacity? Like how should investors think about this? Yes, that's it. That's my first question.

See, how much do you want to expand capacity? That is the key in this. It's up to you. I mean , you don't have to expand capacity if you don't want to increase your business. But we feel that we are in a very good position in this industry. The country is in a very good space where it is expanding fast. People need to build faster, build bigger. They are shifting to steel as a building material very easily. They want to deal with one company as a lump-sum, one-stop shop kind of thing. So we are in a very good space. So we are building capex at a speed where we feel that we can cater to the market. And even like I've always mentioned that for us, it is a 4 -legged animal. So just by putting money in the factory, which is what is most visible, it doesn't make a pre-engineered building company. I have to make sure that my sales, marketing, design engineering people, project management, certified builders, truck driver, trade, everything is in place, before I can get an order and execute it. Most visible in expenditure is, of course, the factory. But it's entirely up to us. We feel that our clients are growing. They want to give us more business. Many times, I have to refuse and not being able to take it. So that is, I think, a company choice. It's not a business. Otherwise, I don't think we are a very high capex kind of company, business as well. But it's our choice. We want to grow fast. We want to take advantage of the changing situation. And we have made up our mind that we have to be in the top 2 companies in India, come what may. And actually, we cannot be in the top 2 companies if we don't ha ve the capacity. There's no question. So that is our decision.

Okay. Got it. And my second question is, how much of our current contribution is from exports? And what is your medium -term target for the export mix? Like , you are doing the JV with a Canadian company. And how the margin profile in export, it is better than domestic business?

No, Manish, can you answer that? No, no, right now exports are very low part, but Manish will give you a detailed answer.

Yes. So sir, if we talk of particularly quarter 1, our export contribution is very little. So out of, let us say, about INR460 crores, it will be in the range of INR10 crores to INR12 crores. So that's answer number one. Answer number 2 is that, yes, whether it is export of our pre - engineered steel building to any country, be it North America or Africa, for which we have order books. Or the new business that we are talking about, the open web steel joist, which Mr. Nanda also clarified that there the EBITDA could be in the north of 20%. So the answer is that for pre-engineered steel building business, exports do give us a little better margin than the domestic. And this special open web steel joist joint venture with Canadian company should give us an EBITDA in excess of about 20%.

And how is the target, your medium-term target for export mix?

Yes. So as we said, that open web steel joist will come up somewhere sort of in the quarter -- end of quarter 2 next year, whereas in short to medium term, we want to do about 10% of our total turnover through exports. That's in the short to medium term, 1 to 2 years.

The next question is from the line of Aasim from DAM Capital.

Just 2 questions. So this time in your revenue breakup for Q1, you have talked about 10% coming from buildings, which earlier used to be 2% or even 0% earlier. So just can you talk about what kind of buildings these were? Was it heavy structure linked, or is something else part of it, since your heavy structure capacity is only coming up now?

Okay. So in a segment, sir, we specified the 3 segments. One is industrial, which is purely manufacturing units for people. Number two is warehousing and logistics and number 3 is what we specified as buildings. Buildings are basically institutions. So it is -- it could be a flight kitchen, it could be a commercial building. It could be an office building, it could be a multistory building for somebody or a process building. So yes, that particular segment , which was not using steel as much as it is using now , is converting very fast from the RCC -framed buildings into steel -framed buildings. And this particular segment, which is the building segment, which is like what is not industry and warehouse is what comes here is growing significantly. Even now, our order book has orders for multi-story buildings within Delhi, outside Delhi, at the airport, a hotel, a data center. So yes, this quarter, it did include a data center as well within the 10% that we made in Noida for RailTel Corporation. So that segment is growing.

So these buildings will not just be heavy structures. It could be, I guess, lightweight structures as well, right? It's just a multistory building at the end of the day.

Yes, so a multistory building could use a combination of the heavy structure, plus some part of it will be out of the pre-engineered building manufacturing segment, some part of the building. So that's how you can call it that some of the multistory building could be hybrid that maybe 70- 75% of it will come out of the heavy structure plant and 20-25% could come from here. Because you already have a line operational in Pantnagar Kichha, for making these heavy structures already.

See, heavy structure, just to add to your line. I mean there is no like heavy structure building and light structure building. It gives us an advantage of how to make that building in the most -- in the best commercial technical, like you say, techno -commercial manner because of the variety of items we can make. So then we can give the best commercial technical solution to the customer. So there is nothing that will only go from the heavy structure or only go on a PEB plant. For us, the whole thing is a steel solution. What is the best solution, and can we make it in-house? That is the idea of making all now after the heavy structure plant, we'll be fully equipped to really make anything for a steel building. That is our idea.

Okay. Okay. Got it. Got it. So basically, steel structure will have part heavy, part light. That's how you want to look at it. So if I wanted to ask if your existing order book has any heavy structure numbers in it, or in your bid pipeline for that matter, that would technically not be —I mean, not be a relevant question, right? That's how I should understand it?

Yes, it's a relevant question. So if we can always divide it , okay, now this building we got and 80% of this is being made in that heavy structure plant. So we can divide it like that. Our idea is to -- our idea is that we should not be restricted in either bidding for a building because it requires a lot of heavy structu re which I can't do competitively. So we were earlier restricted. In many kinds of buildings, we were not able to bid because we were not competitive since we didn't have our own heavy equipment. So you can divide it, but for us, it is to give the best solution to the customer.

Got it. Got it. Okay. And just lastly, I mean, I ask, so in your -- now that your heavy structure line has started or rather will start by next month, I'm assuming your heavy structure part of your order book will still be negligible, although you did say that 35% is new age PEB and heavy structures. But in terms of bid pipelines, are you already seeing —are you already bidding for projects that involve heavy structures plus the lighter grade?

Yes, as a general strategy, we start going into the market much before we set up a plant, even though we might not take orders or take orders, get it made from where outside. But as a general strategy, we always make sure that there is a market and we can bid for it. And yes, if we had

our own plant, we would -- the customer would give us the order also. You have to have that position. We can't do it after we set up the plant. So in fact, we already have our first order, which we will put into trial production and commercial production for our data center to be manufactured in the new plant. We already have that thing. But yes, of course, we have to do it a little slowly because the speed, the quality, that quantity, what we can deliver is a little -- something new for us. So these are completely new machines, different machines, different processes. And like I said, at Interarch, we are always very concerned about our reputation that once we take something, we have to do it. So business is there. There's plenty of business in the market that is available , and I think everybody is doing well, companies like JSSL, SISCOL, I mean they are all reasonably full companies which are doing mainly these kinds of buildings. So I don't think business will be a problem, but we are taking it slowly because we want to not make -- have a misstep going forward. That's why , for next year, we are taking about INR200 crores of this business added to our projections and increasing the projection to INR2,700 crores. And then another quarter or 2, we will know and then maybe we'll revise projection, but our idea is always to be a little cautious.

The next question is from the line of Devang Patel from Sameeksha Capital.

Sir, the last couple of orders have execution period of 15 to 16 months versus 8 to 12 months for our normal orders. Could you please explain what is different for these orders?

Manish?

Yes. So sir, these are orders from the energy sector. So some of them are for the valve halls for the HVDC transmission line wherein the engineering and the site clearances take a bit longer than a standard industrial project. And that is why these orders have a little longish period. So you get your sites cleared for execution in about 6 months after you get the order. Otherwise, we get it in about 2 to 3 months, and that is why these are very specialized orders for the HVDC transmission lines or for very heavy transformer manufacturing wherein the foundation and the civil work and the associated work, which is a precedi ng activity for us to begin and the complicated engineering approvals takes a bit longer than the normal cycle and such orders are normally on the variable price concept. That is why the tenure is a bit longer.

And if it is a transmission line project, that is what it seems, is it with a power utility or is it with EPC contractor?

No, it is for an EPC contractor. It is from an EPC contractor. And it is not for transmission line per se. It is for the center from -- in a transmission line, there is A and there is B. The place A is where the power is generated, and B is where it is transferred to. So there are stations on either

side. So this is one of those HVDC transmission central stations. So they are for very large multinational power companies, which makes these solutions which are HVDC solutions.

This is not a typical PEB order where you do the whole turnkey of the site?

For turnkey means we only do the steel work. We don't do the civil or electrical or plumbing. So they are -- all our orders are only for design, manufacture, supply and erection of the steel buildings, which is the superstructure. We don't do any other thing in any of the works.

Okay. The second question was on your cash flows in Q1 last year; in the second half of Q4, we had a negative cash flow. Could you confirm what is our cash flows in the first quarter, if you have those numbers?

Yes. We have the numbers. And let me just tell you. We had INR26.83 crores positive cash flow in Q1 from operating activities. So it is almost equal to the PEB. The INR26.83 crores is the positive cash flow from operations during the quarter.

Okay. But some of the outflows we had are not completely reversed as yet. So the rest of the year, you could still have a further better conversion?

Absolutely. Absolutely. We look forward to having much more positive cash flows during the remainder of the year, definitely.

Okay. And with the orders that you're getting now, are we able to get better customer advances?

Our advances have always been -- sir, our advances have always been better. I think we did explain last year's negative operating cash flow: that we executed some very large orders on a work contract basis, very large orders last year. So those are now getting completed , and the billing and the payment collection is being done. So that was a very specific reason why it has become what it has become. So there are very standard advance payment terms that we have for all orders, which were there and are still there. So yes, the advances are intact.

The next question is from the line of Vineet Mehta from Ashika Group.

Congratulations on a good set of numbers. I just wanted to know because you have planned to accelerate your capex in wake of new demand. So can you give me a road map of what amount you are going to spend this year and what amount you're going to spend next year?

Turnover figures?

No, he's talking about the capex that we spent last year and capex we want to spend this financial year.

This year and next year, okay.

Yes. I think approximately half of INR250 crores this year and half of INR250 crores next year. I think that is the projection, Manish, if I'm not mistaken.

Yes, sir. Yes, sir. So it's about INR129 crores this year and INR133 crores next year.

Okay. So just a follow -up. Let's say that you have INR80 crores last year. And this year also, you will make a good profit of around, as per your estimates and PAT and all this; we do a basic calculation, it should come around INR150 crores to INR160 crores plus INR80 crores from last year plus depreciation? Broadly what I'm trying to say is we will still have enough cash. Why are we accelerating this QIP? Is there, like, a sense which I'm not getting in this whole scenario?

See, there's also working capital requirements. There's also an idea of having financial strength. And like we have realized earlier that situation changes pretty fast. So our call was that do we keep going back for more and more funds as we require? Or we have the funds and we can speed our capex faster if we need to. The market situation demands, working capital is also a very critical requirement while we generate our own funds, but working capital is very critical as we go into larger orders. So to keeping everything in view that whilst we were given is that whatever you need for next 2 years, raise it together, then you will have the speed in your control rather than going back to the market again and again. So that's all and our own funds, wh ich we will generate, we will need them for working capital, etcetera, etcetera, because this is mainly just capex going into the plants. It's a business which will require working capital as well. So that is advice we have been given that don't go for it twice or thrice, do it once. But still the timing is not decided. We haven't decided. We will go for it when we need it, which could be this year, early -- I mean, within the next quarter, within the next 4 months, but the idea is to get the approvals and keep it ; then we can go with the speed of the market rather than our own decided speed today. So that's a general advice, and I think it is sensible advice to follow.

Okay. And like the new capacities which come up, do they also operate at 90%? Or initially, this is very low. Like , can you help me with what the ramp -up time will be to go to 90% at the existing facilities?

I think pre-engineered building, we are reasonably sure that we will be able to keep 80% to 90% in that. For the heavy structure, I think we will have a better idea by March this year. Of course, everybody starts on the projection that there's a huge demand, and we are setting up a very small plant. So we should be able to meet it, and we have been in the market, so we should be able to get the orders. But I would like to be more definite about the heavy-structure plant utilisation after a few months. For the pre-engineered building, we are pretty sure because we only set up a new plant

once we are sure that our existing plants are meeting 80% to 90%. We just want to be ready. That's all.

Okay. And one more thing, like in your commentary, I read the near -term challenges arising from external market conditions. Can you elaborate on that, what type of challenges you are seeing?

From external?

So in the commentary, you have written about our revenue has grown by 20%, EBITDA has increased despite of near -term challenges arising from external market conditions. So can you elaborate on what type of challenges you are seeing in this market conditions, like...?

Yes, I think everybody is going through similar challenges because of the Iran war, prices going up, shortages, steel shortage, steel prices going up and remaining higher up, meeting those challenges. Manpower, I think nearly everybody has faced that problem in manpower, while our factory manpower is still more under control, but the site manpower with our certified builders has been a challenge. So I think these challenges are generally there, but I mean, we also believe that some challenge or the other wi ll keep coming up. But these have been little extraordinary, yes.

No, no, that was fair. My question was related because if you are operating at 90% and everything is going smooth. What type of challenges are you still seeing there. Going forward, what will ease down so you see better -- good environment for you? That is what my sense was that part of the...

We are saying that we are very good at meeting challenges. So a lot of challenges came up and we met all of them.

The next question is from the line of Nitin Jain from Fair Value Equity.

Congratulations on a decent quarter. So my first question is on the revenue guidance for the year. You have a very strong order book growth in the first quarter. Like sequentially, we have grown 9% and the revenue growth also has been good at 20% plus. Bes ides the capacities are coming up as planned, but we are still guiding for mid -teens growth. So do we foresee any quarter of single-digit growth or we are just being conservative?

No, I think we are going by our capacity also. Andhra plant came up last year, and we managed to do better in the second, third quarter last year because of the Andhra plant capacity. Now after that, the new capacity has come up in Gujarat Phase 1 and Phase 2 by October or so. So keeping the capacities in view, we are trying to see whether we can make the plants more productive, etcetera. But currently, we don't feel that we can cross -- if you look at our earlier projections that we had given 2 years ago, we had said that we will reach about INR2,000 crores in '26, '27 and then

grow this year by 20%, 25% -- or next year by 20%, 25% because of the added capacity. Capacities came in play. See, there are a lot of challenges which keep coming up. I mean, a lot of people accuse us of trying to give low projections and then try to meet it. But the thing is in this business, you have to be very cautious. Just because business is available, you can't take everything that comes your way. We don't want to take business which is -- doesn't suit our client profile, doesn't suit our delivery schedules, doesn't suit our payment terms. So we are a little cautious as a company. And while we are building up capacity, but we have to be very careful on the other fronts as well. So I think it might beat the projections this year. But I think we'll have a better idea by maybe another 3 to 4 months, how is the Gujarat plant performing, how is the Andhra Phase 1 and Phase 2 are now working and they keep working at full capacity. So I think we are a little cautious because this is a business where it is better to be a little cautious than to go all out and start taking every order that comes your way and then suffer for various reasons, which we have seen in the past. It's very easy to be gung-ho when the things are good, but you have to also be prepared that you have to be very careful to stay on track. So we'll see maybe by next investor call, we might revise. But currently, we don't want to revise this year.

Right. No, sir, the only reason I'm asking is despite the difficult circumstances in the last 3 months that we have seen, we have done very good on the profitability side as well despite the steel prices going up. And yes, we are guiding -- we seem to be guiding on the lower end of 13% to 15%. So I'm not able to -- do we foresee any single-digit growth quarter in the next 3 -- in the next 9 months?

No, I don't think we have any single -digit growth this thing, but we are also concentrating on profitability. I think sometimes the revenue growth, you may have to sacrifice to increase the profitability growth. We are concentrating on that also. We are co ncentrating on trying to get better payment terms from customers, better pricing from customers. So I think it's a thing with many balls up in the air, but we also want to focus on profitability. That is also very critical for us. To take orders and keep reducing your profitability. I don't think it's a very good idea in the long run. So we are doing all that. I think let us see what happens. Right now, we feel that if this kind of turnover we can do with better profitability, we'll be happier than trying to achieve a higher revenue and not increase our profitability. But that current market conditions also give us an opportunity to increase our profitability. And challenges are there because there are a lot of fluctuations in your freight thing, your labor prices, labor have gone up. So erection prices have gone up. So a lot of challenges are there, but we are concentrating on improving profitability also well. We have been doing it, trying for some years, but I think that should be also our focus going forward. You are not missing

anything, but we are trying our level best that revenue growth without profitability growth doesn't make much sense to us. So we are trying to do both.

Okay. My second question is on the finance costs. They seem to be -- they seem to have jumped around 20%, 30% this quarter, which is faster than the revenue growth. So if you could clarify what is our debt to equity as of the quarter 1? And would we be uti lizing some part of the QIP for debt reduction? Or will it be solely allocated for -- to fund the growth? That's all from my side.

I think the financial cost might be looking higher because the interest earning is not there. Otherwise, I don't think -- if I'm not mistaken, I don't think there's any increase, and we have no debt. So there is no debt repayment or anything like that. All the QIP money will go into capex because we are a 0 debt company. But anyway, maybe I might be missing something, Manish. Is that correct?

No, you are right, sir. So I would like to just clarify. The upward trajectory in finance cost is a function of our interest income not being there because we had IPO money, and we had surplus cash, which we had parked in FD, which was earning us interest and which we now spent in capex, therefore, the interest income is not there. And since it is below the line, the finance cost seems to have gone up.

Manish-ji, can I add something here? Because he is comparing the 2 quarters in terms of finance cost only. The growth. Non-fund base limits.

What I am saying is this quarter, we are at 82%. And last quarter -- last year, same quarter we were at 64%.

You take new fresh enhancements, so bank charge you one -time processing fee. So there were some enhancements to meet the growing needs of the business. So those processing fees onetime were paid in this quarter. Some increase because of that, finance -- especially the finance cost. And rest of the answer Manish ji and Arvind sir has already given to you...

We don't really have a debt and equity ratio because we have no debt.

The next question is from the line of Rahul Kumar from Vaikarya Fund.

Just one question. The revenue guidance which you have given for FY27, does this include any business from the heavy structural projects? And two, and what does this revenue mean in terms of the volume growth versus FY26?

Manish?

Yes. So yes, it does include -- and I think we have clarified in today's call well enough that heavy structure is not really purely in the new plant. But yes, it will include about INR100 crores of what will qualify to be heavy structures, INR100-150 crores of that. And in terms of the volumes,

we will grow around 18% in the volumes. So volumes will be approximately 190,000 tonnes for this year.

Okay. Second question to Nanda sir. Sir, what is the kind of competitive intensity you're seeing on the new projects? Are you seeing any other players actually being a bit more aggressive on the pricing front, especially in the context of the expansion by a lot of other players?

You see, this is a business which is, to my mind, a very highly segmented business. While there is one word for it pre-engineered building, but many times I give an example, it is like a transport or auto industry. Auto will include a 2-wheeler and go up to a Rolls-Royce or a plane or a train. So it is actually very segmented now. I think we all concentrate on our own market, on our own clients and the demand is moving much, much faster to my mind than the competitive players who are coming in. And I think everybody has something to add to the market in that sense. As long as there is good competition. You see what worries us in pre-engineered building and what has happened in the past is some bad quality players coming in. Then if they give bad quality material or they let down the customers, then they start trying to give a bad name to the pre-engineered building industry. But I think generally, on the whole in the top 5, 6 players, it's a good competition. Everybody is dev eloping either their regional geography or their key clients or key industries. And we have our own. We do our own marketing. We do our own business development in our own way. Other companies do it in their own way. So I don't -- competitive can only be if the size of the pie remains the same. I think that is not happening. Pie is increasing dramatically. From 3 companies between 2003 and 2008, today, there may be 300 companies. So everybody has chosen their own field. Of course, there is price pressure, but we have never in this business found that there has been no competition. And the smaller the market, it seems more intense. So I think today, the market is too large. People -- there are people in steel industry doing elevated roads and bridges and girders of metros, metro stations, bullet train stations. And the quantities are so high that we don't even know who all are doing it. I'm not too worried about the competitive environment. I think we have to be very sure that we can develop our own market. We can convince the clients that we want to work with that we are their preferred partners and we can be good partners to them and then price is secondary. I'm not too worried about this. And in fact, I'm very happy that new good players are coming in because they expand the whole size of the pie. Steel becomes more acceptable. And many times, customers like competition, even if they want to give me the order, but they like the fact that th ere is competition and they can go to other players and get prices and they are not going to be stuck with only one player.

So I think it's going to be -- it's a completely changed environment from 10 years ago, completely changed from 5 years ago. And now as I see it, I think every year, it will be a dramatic change because the steel usage is going up dramatically. So I'm not too worried about that. We have to be safe, like I mentioned earlier, it's a business that you have to be very careful in. It's a business which can kill you very fast if you're not careful. Is not -- nobody has ever in this business closed down because of lack of orders. They ha ve closed down because they couldn't deliver properly. So then they lost money, they lost payments, they had LDs, and that is how they closed. That has been my reading of the market. So nothing to worry about in competitive environment right now.

Okay. Understood. And the last question, I think you mentioned about moving a bit more gradually or more conservatively on the heavy structural project, which is getting commissioned in Q2. But at the same time, you also have mentioned that you are actually -- you want to expand a bit more in that field, doing more expansion for the heavy structure. So what is that confidence based on at this point of time?

See, like I mentioned a little earlier that we always get into actual spending of capex once we have done 2, 3 years of research. Because we are in this field about 3 years ago, our sales and business development people started coming to us is saying that, look, there is a lot of requirement coming up like this and we are not able to bid. So then we built up our in -house team, which specialized in this. We brought some outside consultants because we didn't have the engineering skill for this kind of building in -house at that time, built up a whole team and went and did a lot of business development and marketing and found a very good response. We didn't take any orders because we didn't have the capacity. Some orders, which we did take was a part of the pre -engineered building, there was some heavy structure like in the Tata Electronics plant and a semiconductor plant and a lithium battery plant , which we then got manufactured from outside but 80% to 85% was our standard PEB and 15% was that. So we have been judging the market for last 2, 3 years. And then we said, look, now it's time to invest because if we don't have our own plant, it is not an easy market to tackle. We can't rely on others to give us the item. And that is what gives us the confidence because we do it in a very graded, structured manner rather than just jumping into it because somebody else is doing it. That -- can we do it is a critical thing for us. The important thing is for me is not that is there a market for it? Or is there a demand for it? If I cannot meet it or the customer is not able to trust me for it, then I can't be in that business. So that is what we discovered. I'm only going a little conservatively because at the end of the day, you have to get the order, you have to sell it. You have to recover your money and you have to see what kind of business is that. I've started getting the order. But I want to be conservative so that it is a little different from pure heavy structure business like data centers and high -rise buildings, etcetera, it is different from

the pre-engineered building business that we are used to. The clients are different, the way of working is different, logistics, installation, a lot of things are very different. But -- so we want to try it out. That's why I want to give myself a little time of this 5, 6 months, not because I can't sell, but I want to do it in a manner that I learn the ropes practically. But the confidence comes from last 3 years of work. It doesn't come from hearsay only. So I think from next year onwards, we'll be more confident, yes.

Okay. Okay. Understood. Just last thing on this heavy structure only. So I think you mentioned that we have executed projects, which is a combination of PEB and heavy structures. So when we get commissioned this heavy structural projects, do the projects include where there's a 100% usage of the heavy structures? Or it will continue to be a similar combination of standard PEB and heavy structures?

It could be either. There could be a building which only -- see, generally, we know more of those buildings where there's a little hybrid system because that is the kind of market we are in. But I think as we get solely into this market and see, okay, if s omebody had a sole requirement of a structure which only used what we could make in a heavy structure plant, we normally avoided it because there was no way that we could even do it. But I think as we go forward, it will be a -- for us, it is not a different thing. I mean, I know it sounds a little different. But for us, it is -- heavy structure means that till now I could do a column or a beam or a hot-rolled section, welded of a certain weight. Once it went over 4 to 5 tonnes, I didn't have the capacity in my plant to do it. But now I can go up to 20 tonnes. So that is the basic difference. The column might look the same as my standard PEB column. The beam might look the same. Hot -rolled section, I was doing earlier also, but not very productively because I didn't have too many good machines for it. So heavy structure is basically adding to our capacity to do more kind of buildings, more kind of structures rather than being a totally new thing. I think we have to view it that it adds greatly to our portfolio. When we say how are we doing R&D or how are we participating in other buildings because like I said earlier, it's a very segmented business. So to cater to more segments, I have to then do m ore kind of structures so that I can do their building. So it could be either. It could be a hybrid. I see more hybrid going forward for us, which is the most useful for us because very few heavy structure companies can do hybrid and very few pre-engineered building companies can also do hybrid. So we will be in a good position to bid hybrid and make it very commercial technically viable for the customer. But yes, I think going forward, it could be either. We are not really concerned as long as we are selling and it can be used. But like I said, on the commercial, technicals, both the issues, I think we will be in a more favorable position with these new plants.

Okay. Thank you very much, everybody. I'm sorry we couldn't take all your questions, but we are fully open to any questions. You can contact us any time through SGA, through AMBIT, through our own office directly. And any site visit, any plant visits, you want. We are a totally open and transparent company and we welcome suggestions. We welcome improvements, and we welcome all sorts of questions. We are open to personal meetings also. We do a lot of non -deal road shows on Zoom as well as personal. So please contact us if you need anything. But thank you very much for joining this call, and thank you very much for your patience.

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