Atlanta Electricals (NSE:ATLANTAELE) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Atlanta Electricals Q1 FY 'twenty seven Earnings Conference Call. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Mr. Mohit Apadhyay from AdFactors PR. Thank you, and over to you, sir. Thank you. Good morning, and a very warm welcome to Atlanta Electricals Limited Q1 FY 'twenty seven Earnings Conference Call. Joining us today are Mr. Neera Kupeshwar Patel, Chairman and Managing Director Mr. Anand Sharma, Chief Operating Officer Mr. Akshay Kumar Mathur, CEO and Mr. Mehul Mehta, CFO.

0:58 Before we begin, I would like to remind participants that certain statements made during this call may be forward looking in nature and are subject to risks, uncertainties and assumptions. These should not be relied upon as guarantees of future performance. I now invite Mr. Mehul Mehta, our Chief Financial Officer, to take you through the financial highlights for Q1 FY 'twenty seven. Thank you, and over to you, Mehul, sir. Thank you, Mohit. Good morning, everyone. I will now take you through our financial performance for the first quarter of FY twenty seven. We are pleased to begin FY '27 on a strong note, building on momentum established during FY '26. Our Q1 performance reflects the successful execution of our expansion strategy, improved manufacturing capability and sustained demand across the transmission and distribution and renewable energy sectors.

1:56 During the quarter, consolidated revenue from operations grew by 48% year on year to 466.33 crores compared with 315.11 crores in q one FY twenty six. This strong growth was primarily volume driven, supported by the commissioning and ramp up of our new manufacturing facility, which significantly expanded our production capacity. Heavy utilization of domestic orders and improved capacity utilization across our plant also contributed to this performance. Importantly, there were no material changes in pricing or product mix with the growth largely attributable to increased production capacity. On the profitability front, gross profit increased by 55.5% year on year to 127.20 crores, while gross margin improved by 130 basis points to 27.3% from 26% in the corresponding quarter last year.

2:59 This improvement is structural in nature and reflects better operational efficiency and a gradual shift towards higher value products, including increased production of the Q20 EV class. EBITDA for the quarter stood at INR77.10 crores, reflecting representing a 58.1% year on year increase, with EBITDA margin expanding to 16.5% compared with 15.5% in Q1 FY 'twenty six. The margin expansion was driven by operating leverage as our higher production volumes were absorbed across the expanded manufacturing base, along with the continued improvement in product mix. Profit after tax grew 50.4% year on year to INR 46.84 crores, while PAT margin improved to 10%.

3:50 Earnings per share increased by 40% year on year to 6.09, reflecting the company's ability to translate revenue growth into higher shareholders earnings. Before I move ahead, let me briefly touch upon the sequential performance. The first quarter is typically a softer quarter for our business. As most customer tenders are quoted during the initial part of the financial year, while order execution and revenue recognition are generally stronger during the second half, particularly q three and q four. In addition, as our products are capital goods, customers often accelerate procurement towards the end of the financial year to utilize their annual capital expenditure budgets. Accordingly, revenue and profitability moderated from the exceptionally strong fourth quarter of FY 'twenty six. Revenue declined by 37.6% quarter on quarter, while EBITDA margin normalized from approximately 20% in Q4 FY 'twenty six to 16.5% in FY 'twenty seven.

4:51 Similarly, tech margin operated from 13.7 to 10%. Despite this seasonality, our profitability continues to remain healthy and has shown strong year on year improvement. Our manufacturing operations also continue to scale up across all facilities against an aggregate installed manufacturing capacity of 63,060 MVA. We recorded sales with capital utilization... Capacity utilization of 4,381 only during the quarter. Employee benefit expenses increased during the quarter as we strengthen our workforce to support our expansion of our manufacturing system. These additions were made proactively in anticipation of the future business growth. As our new facilities continue to ramp up and contribute higher revenues, employee costs are expected to normalize as a percentage of sales. Similarly, while absolute operating expenses increased alongside the growth in business, other expenses actually declined as a percentage of revenue, demonstrating improved operating leverage and enhanced cost efficiencies.

5:57 On the input cost front, raw material prices continue to witness upward pressure due to the prevailing geopolitical environment. We expect this trend to persist over the coming quarters. However, given the nature of our contract and customer relationships, we have been able to pass on a significant portion of this incremental cost, helping protect our margins. Turning to the balance sheet, inventory levels increased during the quarter as it strategically stopped raw material to support production ramp up and our newly commissioned facilities and ensure timely execution of our strong order book. The inventory buildup also reflects planned procurement aligned with project execution schedules and measures taken to mitigate potential supply chain disruptions.

6:45 Our working capital profile remains stable. As of the end of the quarter, net working capital stood at 72 late with inventory days at 105, receivable days at 88, and payable days at 110. This translates into a cash conversion cycle of approximately eighty three days, which remains broadly in line with the previous quarter, reflecting disciplined working capital management despite the increase in business sales. So the first quarter demonstrates that the investments we have made over the past year are translating into sustainable growth. Our expanded manufacturing capacity is beginning to deliver meaningful operating leverage. Our margin profile continues to strengthen and demand across our key end markets remain robust.

7:36 With that, I would now like to hand over the call to our chief operating officer, mister Anand Sharma, who will take you through the operational performance and key business development during the quarter. Over to you, sir. Thank you, Mural. Good morning, everyone. I will take you through the operational highlights and business developments for the quarter. We continue to business healthy demand across our key end during the quarter supported by 15 investments and new transmission and distribution, renewable energy, and industry application. This was reflected in our order inflows and continued execution across our manufacturing facilities. We have had a record order inflow and order book in... During quarter one of twenty seven.

8:22 The company recorded its highest ever quarterly order inflow of $9.72.42 crores. This strong order booking increased our outstanding order book to $31.01 6.63 crores, which is 3,116 crores as on 06/30/2026, providing healthy revenue visibility and reinforcing the robust demand environment across transmission and distribution, renewable energy, and industrial application. The executable portion of this order book continues to support our production planning and execution schedule. Among the key orders secured during the quarter were $2.91.68 core orders from RB Penal, which is the Rajasthan UTSE for the $1.60 MB, 50 MB, and 31.5 MB of our transfer.

9:11 And a 21... 25.1... Rose order from the Punjab state utility, PSC deal for the supply of 23 numbers of one sixty MB to forty five sixty six MB power transfer. These orders further strengthen our presence in the high capacity transformer segment and underscore our execution capabilities in serving leading eight machine. Our order book also continues to evolve towards higher capacity products. Today, transformers rated two twenty kV amounts to over 55% of our total order book, while 400 kV transformers and vectors contributes nearly to 75 crores, demonstrating the continued progress we are making in the extra high voltage, which is EHP range of transformers.

10:02 From the execution perspective, power power transformers continue to remain our largest revenue contributor during the quarter, accounting to nearly 79% of the revenue. Auto transformers, inverter duty transformers, and other products contributed the balance. From an end market perspective, transmission and distribution contributed approximately 66% of revenue followed by renewable energy at around 19% with the remaining contribution coming in from thermal power and other industry applications. This diversified mix contribute... Continues to provide stability to our business while allowing us to participate across multiple growth segments. During the quarter, we also made a steady progress in strengthening our manufacturing and technology capabilities.

10:54 We also continue to make meaningful progress in strengthening our high voltage transformer capability. During the quarter, our facility, Unit 4, received the prestigious power grid approval for the manufacturing and supply of 400 kV class transformers, marking an important operational milestone. We also participated in the PGCL vendor development program for 500 MB and 400 kb transformer tender, reflecting the progress we have made in expanding our engineering and manufacturing capability. In addition, engineering activities for three fifteen MBA transformers... Transformer orders secured last year have been completed now. Manufacturing of the first unit is expected to commence over the next couple of months followed by the mandatory short circuit test, which will...

11:47 We are planning to do in early next part of the quarter. Subject to successful completion of these tests, we expect to execute the balance order quantity within this particular financial year only. While these developments represent important operational milestones, we expect meaningful commercial contribution from 400 kb customers portfolio to commence from next financial year. Our focus during the quarter remained on strengthening our manufacturing capabilities and ensuring timely execution of our growing order book. As we continue to scale our operations, we remain committed to enhancing operational efficiencies and preparing our facilities for the next phase of growth.

12:33 Our capacity expansion program continues to progress as planned. Construction activities at our dedicated inverter duty transformer manufacturing facility are advancing well, and we remain on track to commission the facility before end of current calendar year. Once operational, we will add approximately 5,000 MVA of manufacturing capacity and further strengthen our ability to get to the growing demand from renewable energy sector. Battery and battery energy storage systems and EV charging infrastructure and other emerging applications. We are also making steady progress on our tank and radiator manufacturing facility as a part of our backward integration efforts, which this facility is going to come adjacent to our the world's facility. This initiative is expected to announce the supply chain reliability, improve product quality and consistency while reducing the dependence on the external vendors and support our long term cost efficiency.

13:44 Overall, we remain focused on executing our healthy order book, strengthening our manufacturing ecosystem, expanding our technological capabilities, and maintaining high standards of operational excellence as we prepare for the next phase of the group. With that, I would now like to hand over the baton to our CMD, Mr. Neel Bhatti. Over to you, sir. Thank you, Anandvai. Good morning once again, everyone. As both Mirgul Bhatti and Anandvai have highlighted, we have commenced FY 'twenty seven on a strong operational and financial footing. More importantly, the quarter reinforces the confidence in long term opportunities emerging across the Indian power infrastructure sector. The transformer industry continues to benefit from a structural demand environment driven by sustained investment across the power value chain. We believe it is not a cyclical upturn, but a multiyear investment cycle supported by expansion in transmission network, renewable energy integration, battery energy solar systems and industrial electrification, railway electrification and rapid growth of data centers.

14:52 This trend is expected to drive significant investment in grid infrastructure over coming years and see create long term opportunities for transformer manufacturers. At Atlanta Electricals, our strategy remains focused on moving up the transformer value chain while strengthening our manufacturing and technological capabilities. Over the last few years, we have consistently invested in expanding our product portfolio, enhancing manufacturing infrastructure and developing capabilities in higher voltage transformer categories. These investments are gradually translating into stronger business mix, improved operating leverage and higher quality earnings. A key strategic priority for us remains the development and commercialization of four hundred and seven sixty five kV transformer platforms.

15:41 These products will significantly expand our addressable market, enable us to participate in larger transmission projects, while order sizes are substantially higher and the execution cycles provide greater revenue visibility. With these long term gestation opportunities, we believe they will play an important role in our next phase of growth. Alongside strengthening our domestic franchise, we continue to focus in building our international business. Our export strategy remains centered on expanding our presence across Europe and Africa and now to a certain extent, United States as well. We continue to engage our customers in these markets and remain well positioned to obtain necessary customer specific approvals and certifications as project progresses.

16:29 Over the medium term, we aspire for exports to contribute approximately 15 of our revenue, helping us diversify both our customer base and our geographical footprint. We expect this we expect to the recent policy with respect to the recent policy pertaining to Chinese power equipment manufacturers to participate in TSU tenders through Indian manufacturing facilities. We have not observed any material impact on pricing discipline, bidding intensity or overall market dynamics. At this stage, we believe it is too early to accept the long term competitive implications, and we will continue to monitor developments closely.

17:14 Based on the tender executed so far, we do not foresee any immediate disruption in the industry. Looking ahead, our priorities remain clear. We continue to focus on executing our healthy order book, increasing capacity utilizations across our facilities, expanding export footprint, strengthening backward integration, advancing our capabilities into EHV and ultra high voltage transformer segments and maintaining discipline across the business cycle. At the same time, we remain committed to delivering sustainable growth, improving profitability and creating long term value for our stakeholders. With that, we conclude our opening remarks, and we are now happy to open the floor for questions. Thank you. Thank you very much. We will now begin the question and answer session.

18:17 Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We take the first question from the line of Maher Manohar from Trust Mutual Fund. Congratulations on a great set of numbers, very good numbers. Sir, I actually wanted to better sense, when I see two large capacities are expected to commission, I mean, coming next three to four months, almost 60,000 NVA kind of capacity, maybe on the 400 Kt side. So I mean, I understand that gross margins have expanded this quarter and EBITDA margins have also expanded. But on the incremental order inflow that we are having, do we see some moderation in gross margins over there because these capacities are expected to start? How to understand that, Sameer?

19:15 Good morning, Vivek. So as as far as I understand, I mean, voice wasn't clear, but as far as I understand, you were asking about the capacity utilization and the margin expansions coming in near term forward term, right? Is what I understand here? No. No. So my question was, so next three to four months, almost 60,000 MB capacity, New capacity is expected to commission. I mean, this is from CG Power and transformer rectifiers. So with industry adding this capacity, do we see moderation in incremental order inflow, moderation of margins in the incremental order inflow for us? Or at this stage, if the demand is strong enough for us to maintain the margins? So far, sir, we've witnessed the highest possible order inflow in quarter one since last... In the first quarter. And when we compare this quarter to the last, at least, say, two, two point five years.

20:11 So we don't see any impacts on the order inflow, neither do we see any correction on the pricing terms when we, you know, consider Atlanta Electricals. Nothing of that sort is visible in the market. Sure. Sure. Sure. Sure. Second question was only $7.65 kV. So I mean, what is the state of what there? We were looking for approval from PGCIL. What is your operational update over there? The the approval process is in place. We are in very advanced talks with our technical partner. As soon as we close the agreement, I think the approvals will be a fast track mechanism. Probably should we expect end of second quarter for us to have approval from PGCL for Transpacific EV?

20:59 Certainly. Okay. Okay. Sure. I guess my last question was on just power transformers versus distribution transformers. I mean distribution transformers are reporting moderating margins versus power transformers across the board. That is not happening. Just your take on this would be helpful, sir, just to get a sense, why is that happening? Because the overall tier list is... I agree that the end user category is different and number of peers are different, but just a broader take of your your view would be quite helpful, sir. Yeah. So the distribution market is entirely different than the power customer market. The competition profile in power transformer market is entirely different than the distribution market. Since we are not present in distribution market segment, it would not be fair on our part to make any comment.

21:44 While we can reconfirm that in case of our customers, the growth remains steady and, let's say, improving as we are talking. So that... That's the market we are present, and we really are confident that the growth we are witnessing shall continue for for some time. Sure. Sure. That's it for my check. Thank you very much, Harihar. Thank you. We take the next question from the line of Kunal Mehta from Incred Equities. Please proceed. Yes. Hi, sir. Very good morning and congrats on a good set of numbers. My first question is on the gross margin. Though we have improved Y o Y, I think Q o Q, the gross margins have declined probably due to the different product mix and raw material pricing pressure. So if you can throw some light on what was the product mix executed in the quarter and the...

22:42 You know, which product is the raw material, the the BOM, are we facing the highest pressure on? And are we kind of stocking up on inventory for the year because we see more fluctuations going ahead? Hi,. Hi. Yeah. I'll I'll try to answer your... One of the question which is mix of revenue. So we have 56% of the revenue coming from two twenty kV class, and then the 25% is coming from 66 kV class and roughly around five and a half percent from one thirty two kV class. This is the revenue mix for the first quarter. Regarding the raw material pricing and inventory, yes, we are setting up the inventory, but it is not like it is for the full year. It is for the coming quarter, the orders which are getting executed current quarter only.

23:43 Yeah. Yes. I think I think what Mehul was suggesting. See, in case of inventory or building or raw material purchases, we are... We believe in a principle that we buy the material on job to job basis only. We are in the business of manufacturing customers and not speculating on the raw material side. So that is the theory we have always been following and that is the theory we are following now also. Because in this kind of volatile market, nobody including us can predict as to where commodity prices are going to travel three months later, three weeks later, maybe three days later, actually. So situation is not at all known to everybody, so it's always better that we continue to procure material on a job to job basis without calculating on the raw material price.

24:35 Okay, sir. Thanks. So one... The next question is, our ATLANTATrapo facilities primarily for the four hundred and seven sixty five kV. So are we currently also manufacturing two twenty kV, like in the... Like we did in the last quarter and in this quarter as well? Yes, Kunal. Right? We have continued that approach, and we are still manufacturing two twenty kV customers in that particular. And the $2.75 crore in the order book was 400 k b will be manufactured from that facility this year? For that, we shall be utilizing our Unit 4, Okay. And so the order inflow, I know this was a record quarter for order inflow. Should we probably take this as, you know, steady state going ahead, or maybe this is... Like, q one and q two are the major order inflow quarter, and then q three and q four are more focused on execution.

25:35 In our in our experience,, we have seen that typically quarter two and a pay... Mid of quarter three is the period where the order thing peaks out, actually. So having booked, let's say, record value of order in quarter one. From here on, as expected, the quarter two and quarter three mid will certainly add good amount of orders in the period, coming coming time. Okay. And my last question is on the IDT mix. We are seeing a lot of other players like and, you know, add capacity. And how is the IDT market shaping? Are we seeing good demand there? And will that increase in our mix going ahead?

26:25 Well, the renewable energy sector, as long as it's growing and which is growing, the demand of IDTs would continue to be strong for sure. Till now we have orders of IDT and with the new facility coming in place by end of this year, we certainly would be adding more numbers in the IDT bucket. No. My my question is, do we see any supply deficit in the IDT space? So the in in in the in the market landscape, is the capacity for, you know, supplying IDT, is there deficit of the demand on on current basis?

27:11 Supply deficit is there across all ranges according to us, including IDK. Okay. I'll call that Yeah. Put up a facility for... Exclusively for the IDK. Okay, sir. Thank you. I'll come back in the queue for additional questions. Thank you. Before we proceed with the next question, ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants, please limit your questions to two per participant. We take the next question from the line of Doha from Access Capital. Please proceed. Firstly, congratulations on a great set of numbers.

27:57 So my two questions are, if you can provide the appreciation in terms of MBA for this quarter? And what are the contribution from the Wadod and the Anki facility? So in the total MBA sales based capacity utilization for the quarter is 4,381 MVA. Out of this, fifteen twenty MVA was produced from Varus facility and three twenty MVA was produced from Sarvossa that is unkempt. Okay. Second question is in terms of backward integration, we know that you are setting up a facility for the tank and radiators. What was the completion of this in terms of percentage of the entire manufactured product? What percentage would be coming from backward integration, if you can help with that?

28:52 So the tank and radiators considering the fabrication components of the transformers. These are ranging between not more than 54% to five percent of the total transformer cost. I hope that answers your question. Thank you. Thank you, sir, and all the best. Thank you. Thank you. We take the next question from the line of Arafat Seth from Dollar Capital. Please proceed. Yes. Hi, sir. Congrats on great set of numbers once again. My first question is on your current order book bid pipeline currently from a client. And how do you expect the order inflow to convert in FY 'twenty seven?

29:44 So we have close to about INR 3,100 crores of order book that Anand Page has mentioned. Out of which, we anticipate close to about INR 2,400 crores, which may which is falling due for execution in this financial year. And eventually, we would expect more orders to come in during the financial year. Okay. And sir, any large order expected to come in next couple of quarters recently? It would not right it would not be right for us to disclose certain information. But yes, there are situations where Atlanta would be L1 and eventual order conversions may take time. But, again, we are talking about ESUs or state private entities here, and they take their own sweet time. So we will not be right to comment on, you know, your product as of...

30:42 Sure, sure, sure. And sir, lastly, any guidance for growth for FY 'twenty seven, 'twenty eight on the expanded capacity? Sir, we went public about a year ago, not more than, I mean, seven, nine months ago, and we have been maintaining 40% CAGR for coming three years and with stable margins. When we went public, the margins were at about 16%, 16.5%. And we intend to stick to that guideline and stick to that. I mean, the company's company will ensure that those guidelines are met. Sure, sir. Thanks. That's it from my side. Thank you, sir. Thank you. We take the next question from the line of Shubhi Gupta from Trenetra Asset Management.

31:29 Please proceed. Good morning, sir. So first of all, that we had scheduled short circuit test for 400 kV transformers for June and July. So what is the update on that? And the second question would be that last quarter, we saw there was a shortage of mineral oil, and we combat that with ester oil usage. So wanted to understand what is the situation now. Is it the same? Or is there some improvement? So the 400 Kt development is at a very advanced stage. We are at certain material at the order intake and certain material already delivered at the shop floor. This quarter end is when we expect the first transformer to get ready and go for short circuit.

32:20 This is well on time as per our schedule. Regarding the Oil shortage. The oil shortage, it's not that we combated the the... I mean, or we mitigated that risk with extra oil. We had extra oil contracts in which we extra natural mineral... Natural oil contracts, which we executed. However, the oil supplies have now eased out. We don't see any pressure of not getting oil at all. The prices searched, the prices are also seeing downward correction in terms of consumer demand. Thank you, sir. Thank you. We take the next question from the line of Mayank Chaturvedi from HSBC.

33:08 Please proceed. Yes. Hi, team. Congratulations on a great set of numbers and to deliver a revenue growth of 48% Y o Y growth in such a volatile situation. I think it's pretty commendable. So while you've given the volume number here, can you also give us how it has grown on Y o Y basis? I'm just trying to assess what is the price led growth here. Hi, Mahan sir. Thank you. Sir, are you talking about the per MVA utilization? Yes. So you've said the volume for the quarter is 4,381 MVA. So one piece is what is the volume growth? What was it in 1Q FY 'twenty six?

33:56 So I'm just trying to assess what is the split between the volume growth and the price growth which you have passed on to your customers? So this is directly attributed well to the price variation close, which we have in our purchase orders. And because of that, any incremental price can be passed on to customers. Because of this and the increasing raw material prices, there is an in per m b relation across the daily class, which is seen for q one. Okay. So so what was the volume number for one q f y twenty six? So see total revenue was 466.33 crores and And Last year's quarter. Last year, q one FY twenty ten...

34:48 Yeah. That was $3,605,100. Okay. Got it. And so on these Chinese players that have been allowed to participate in public tenders now, just want to understand in current tenders that are being put out, have they started participating? And if so, what kind of pricing actions are we seeing from them? I'm not saying that they might be aggressive or anything, but just your view on it, what's happening there? Mind by... Out of the four companies which have been allowed on, there is only one company which is manufacturing transfer. And to the best of our knowledge, since this factory... Since this, let's say, guideline came from the government side in 2022, their parent company uploaded many of their export orders to the India unit.

35:46 So there was a period of about six to nine months according to our knowledge, wherein they were facing the crisis to fill the shop with the order. But later on, the support of of their parent unit, and after that, see, only the participation in the government tenders, so the PS two tenders were not allowed... Was not allowed. Yeah. But the private customers like big corporate houses, Adani, and the lines, etcetera, have been buying customers from them. So in nutshell, our information, our knowledge, they have not been sitting idle. With this, let's say, information or the update coming in from the government of the inside that they are allowed to participate in the PSU tenders.

36:34 We have not witnessed any participation as yet. But Okay. Knowing knowing the, let's say, facility they have and the kind of load they have at the moment, we possibly do not see why would they be, let's say, going to fill more orders from the Indian PSUs with lower margins. We don't see any logic in that actually. Okay. You... Okay. So what what you're saying is that if they do try and supply to Indian PSUs, they will be... They will end up picking lower margins versus what they're making right now. No, would not be interested in lower margin orders because they are not sitting idle. That's what I would find to say. Got it. It. Got it. All right, sir. Yes. Thank you. That was it from my side.

37:26 Thank you, Venkatesh. Thank you. We take the next question from the line of Chandan Misra from FinVestors. Please proceed. Very good morning, sir. First of all, congratulation in posting good set of number. Sir, my first question on order book from data center. Is there any order book we received? No, sir. The current order book does not contain any order from the data centers. Secondly, sir, if you please provide time frame to commence unit six inverter duty transformer facility and by which time it will contribute to revenue?

38:15 By end of third quarter, this financial year, so by December 10 is when our target are to commission the in order to be transferred to them. So that we can start from... Actually, they'll say. Thank you, sir. Thank you, sir. Thank you. We take the next question from the line of Jaina from Saltoro Investment. Congratulations on a great set of numbers. My question was regarding the order big size orders that PGCL is giving. Recently, it awarded over INR 1,000 crores order to one of our peers. I just want to understand whether such orders are a recurring feature?

39:02 And how does Atlanta plan to win orders when it comes to orders of these size? So, sir, there is a huge backlog with Power Grid, and so such kind of orders can be expected and should be expected in near the... In future as well. I'm not just talking for Atlanta, if it is called the entire consumer industry. So it's not one of... I think Power Grid will continue to keep ordering such kind of transforms. Like, we see that... When we talk about Atlanta's positioning and Atlanta strategy, when we see a record order book, again, this entire record order book that we have built in this quarter is technically two twenty kV and below.

39:52 I would repeat once again, this is the last quarter when we would... I mean, Q2 would be the last quarter when our experimental stage or the product development stage would end. And we would open our gates for further 200,000,000 plus platforms. When we do that, Atlanta will be well positioned in the industry to track 400 to the class and which we know are certainly higher in terms of value, providing us a good amount of visibility, a longer visibility in the market. So that's our strategy. Whenever we are able to do that, yes, Power Grid would be certainly one of the biggest customer. However, apart from that, there are a lot of other private players, state transmission companies, PPP contractors, who have such auto backlog and Atlanta will be happy to assist them.

40:43 Got it. And my second question is on the capacity expansion that our peers are doing. It's massive capacity expansion. Companies are doubling their CapEx and companies are doing a lot of capacity expansion. So probably faster than what one would have anticipated. So why, like you said, in the near term, you're not able to see any pricing pressure. But let's say one year or down the line, how are you kind of positioning and protecting the company given that we also have a huge capacity, whether it's exports or otherwise, if you could spend a minute explaining that, it would be As a complete whole, sir, our targets would be to protect our margins. So naturally speaking, one strategy is to enter into a newer product development and protect the overall blended margin with newer products coming in. And the second strategy is to establish a good export market, a sustainable export market, which can protect our lower AP class margins.

41:53 Again, the shortage is still there in the two twenty KV and the 100 to KV segment as well. And we are not seeing any margin corrections in 02/20 and 150 even as of today. But however, for the longer term, this is the strategy where we are focusing on building our footprint outside India to protect our lower PV class margins. In a longer the piece about, say, two years, three years down the line, still two years, three years, we would be actually focusing on $407.65 Kt domestically. We take the next question from the line of Pratham Modi from HPMG shares and securities.

42:47 Yes, you are. Good morning. Yes. So my question is regarding CRGO steel. The DGTR has initiated an investigation into CRGO steel imports, which could potentially lead to the imposition of provisional anti dumping duty. Could you share our assessments of likely short term and long term impact on company's raw material cost? So this inquiry has been initiated recently and is expected to... The the the DGL is expected to give some work it... Some work it by the end of March next year. In short term, we are not seeing any pressure on the PRG of prices or the supply because of this inquiry initiation.

43:34 However, there is another angle of the issuance of the DS licenses to few of the Chinese news, which also is looking to be eased out in next one month time. So in short term, we are not expecting any, let's say, shortage of the CRGO or the pressure on the CRGO prices... Due to CRGO prices. In long term, it would not be fair on our part to speculate as to what would be the recommendation and the outcome of this particular inquiry, which has been initiated recently. So we'll get to see when we get the report. Okay, sir. That answered my question. Thank you so much. Thank you. Thank you. We take the next question from the line of Tina from Financial Services.

44:28 Please proceed. Yes, sir. Congrats for a great set of numbers. My question is related to this technology tie up for seven sixty five kV range of transformers. So where are we in this process, and when can we start bidding for seven sixty five related orders once we have the type of tires in place? So any time lines on both these aspects? Morning, Keenan. So this is Nilal. We have advanced our significantly advanced level to close our technical tie up. It would not be right for us to disclose the name of the entity as of now. These technical tie ups do take time because there are certain government approvals also required on the counterpart where they have to share technology with an Indian entity. So that approval process is taking then.

45:26 As soon as the technical type is done, our intention would be to utilize the facility to make a first seven fifty five kV class product, meaning a transformer, ICT, and a reactor. And once tightest is done on that particular product, I'm sure we will open the doors for seven fifty five kV class orders as well. We expect those doors to open by end of this financial year or say in the last quarter of this financial year. Okay. So maybe tech tie up by q three and the formal production can start. So formal production can start from quarter four. So this facility would not need the power grid approval, right, because this this was already operational a couple of years back?

46:13 This will require power grid revaluation and the new name, and that process, we are thinking to initiate once the tech hire is done. The tech hire targets are to close in this q two, and q three is when what we will utilize for raw material injection and production. Okay. So only power grid revalidation is required. Any kind of test also is required for this particular facility? No. As of now, CA has not been able to finalize their recommendation for the short circuit test on the seven fifty five kilobytes transformers. Once it comes, maybe we'll have to comply with that. But as of now, there are discussions underway at Power Grid office also.

47:04 We recently have part... Participated in one of such discussions wherein a deliberation is going on regarding this seven fifty five k b short circuit test. So nothing concrete is available as of now regarding this. Understood. Understood. Thank you, sir. That's it from my side. Thank you, ma'am. Thank you. We take the next question from the line of Jigar Jani from Nuvama PCG Research. Please proceed. Yeah. Hi. Thanks for taking my question, and congratulations on a great set of numbers. Sorry, my call dropped off in between, so I'm repeating myself. But what would be your guidance for execution of this order book? How long will it take?

47:50 And what would we what will it translate into the growth numbers for this year? And on margin, are we should we assume that most of this raw material pressure is behind the spend these margins on growth or EBITDA level should sustain? Yes. So out of the un exhibited order book of INR 3,100 crores, we expect around INR 2,400 crores of orders are executable in current financial year. Regarding the margin, so if we see for past two years also, FY '25, FY '26, Q1, we start... For example, FY '25, we start with 13.80% of EBITDA margin, and we ended annually at 15.56.

48:43 2¢... FY '26, we started with 15.48% EBITDA margin. Q four was 20% EBITDA margin, and annually, it was 18.56. So we actually started up at 27 with highest ever EBITDA margins in the last three years. This is 15.6%. Due to margin... Sorry. On the raw material front, yes, we expect that this price increase will continue or will sustain, but the margin will be sustainable to this level. So we expect the margin somewhere around 17% to 18% as we always convey to our investors. Sure. And just one data keeping question, can you give me the Q4 MVA number in production, the last quarter numbers?

49:35 Last quarter, I think we were able to achieve 13,000 NVA. Yes, Q4. It was 13,000 NVA approach. Okay. Great. Thank you so much, sir, for answering my questions. You. Thank you. We take the next question from the line of Kunal Mehta from Ingrid Equities. Please proceed. Sir, I have two questions. One is, sir, we are actually seeing a lot of capacity addition in 400 KV. A lot of companies have already announced that they want to get into 400 KV, two twenty KV. But my question is after commissioning of the capacity, what is the tentative average time that they take to get the approval then start getting orders? So when will they be at par with ATLANTA has been in two twenty kV already since a long time.

50:33 And 400 k b, I think we are already ahead of them once we get this PGCL approval. So even though the capacity commissions, what is the competitive advantage that they will have? Because because they will be still behind us because they don't have a history of, you know, supplying the 400 kV. So in this, how do we fare better? It's very difficult to comment on competitors, very frankly speaking. But, yes, there are entry barriers in this industry. There are approval processes. It does take time. I do not... I would not like to comment on how the competitors are placed in in this industry. But, yeah, I mean, it'll be very difficult to comment on the competitors front for us as we speak. Okay, sir. And, sir, this tech tie up, I mean, are we seeing some kind of on a commission base, or are we seeing, you know, some kind of a monetary...

51:37 Like, some some kind of a monetary benefit that the the technical partner will get? How is... How are the terms going to shape? Any flavor on that So we can estimate how much, like, cash that we'll be spending in this? So yes, it's a combination of both, fixed onetime fee upon successful development and loyalty fund, which is going to be there for at least three to four years, but it will be only on seven sixty five class products. And the one time fee ranges anywhere between $3,000,000 to $5,000,000 The royalty fund ranges anywhere between 4% to 2% is what the discussions are at that stage.

52:32 These royalties may end up getting at least for three to four. Okay, sir. And how much of CapEx has been done from the facility till now in terms of land, in terms of building the structure? Didn't didn't get your question. Can I please repeat the tank and facility that we are planning to get live by end of this year? How much of CapEx has already been done out of the 180 crores that was mentioned in the last quarter? So close to about 15 to 20 crores is what we have invested as of as we spend. Okay. And the remaining amount, we are planning to take any debt or it will be through the Sorry to interrupt, mister Kunal.

53:23 Yeah. I would request you to join back the queue as there are several participants waiting for their turn. Okay. Thank you. Thank you so much. We take the next question from the line of Pratamesh Saurunke from Nippon Life. Please proceed. Hello. Yes. Good morning, sir. Yes. Hi. Yes. Hi. Thank you for the opportunity. So sir, I wanted to understand some things about your margins. You said you're expecting sustainable margins in the range of 17 to 18%. So first thing, what would be the margin differential between a 200 kV transformer versus let's say 400 kV and a seven sixty kV power transformer for seven sixty five kV power transformer for you guys?

54:14 But, mister, we expect that 400 kV and seven sixty five kV class transformers would help us on better margins as compared to two forty k b or one thirty k b. But as we have been telling, as we have been speaking that on our part, it is not right to comment as to what kind of margins would be the urgent earning from the 475 k b product since we are going to manufacture these products for the first time. For other players who have been manufacturing the products of four hundred and seven fifty five kb, they are aware of their costs related to these products, and hence, they are able to put the margin figures in a concrete manner on the table unlike us as a company who is yet to manufacture four hundred and seven sixty five KB product.

55:08 So once we manufacture a prototype, once we get the short circuit test successfully, and then put the jobs in to commercial production, we would get to know the exact margin differential. Till such time, we can only maintain the margins in 475 kV product as compared to two thirty kV class products, it should be better. Alright. So from the strategy perspective for next one one odd year, you're saying meaningful contribution from 400 kV would start next year, right? So for next year, from the strategic perspective, do you think our margins would benefit rather than the operational efficiencies or the volume?

55:57 We expect that we maintain that the margins will be stable. Like you said, the guidance is when we initially started with stable margins because these margins may be better in terms of manufacturing budget or the the tech hire and the new product development will also eat up some of the market. And we We take the next question from the line of Anuj Shah from Philip Capital. Please proceed. Congratulations, sir, to the entire team of Atlanta for delivering delivering great set of numbers.

56:46 Just a couple of questions, sir, from my end. Was there any export contribution to revenues in Q1 FY 'twenty seven? Sir, there was not. Okay. So going forward, what is the export mix that we are targeting over the next two to three years as Niralsar mentioned that we are also tapping the American U. S. Market. So what sort of export mix should we look over the next two to three years? So we are targeting to have 15% of the revenue coming in from the export market in next three years time. This is the target for next three... Up till three years, actually. As of now, we have got one order from one of the customers, which we shall be executing in this particular year. The market in which we are looking to establish our presence and export all overseas market, we are expecting to book some orders in this particular year, but the execution certainly would not be coming in this particular year. So that revenue stream will start to open from the next financial year only. But the orders, we certainly are putting upwards to book more orders from the export market in this particular.

58:03 Okay. Just a follow-up on the same. So given that, sir, export orders typically, they command different pricing, competition, execution as compared to your domestic business, how should I foresee about the impact of a higher exposure on the company's margin profile, your working capital, and your return ratios? Sir, we are trying to enter into export market just to mitigate the risk of the overcapacity situation, which might come few years later. So that... That's the objective, actually. So we are expecting better margins to come from the export market, which will help us to maintain the margin profile we have been assuring, committing to the market till date. Thank you so much, sir. That was it from my end. Thank you.

58:53 Thank you, sir. Thank you. We take the next question from the line of Aryan Vijayan from Investments. Please proceed. Hello, sir. Hi, sir. Hello. I may have missed a few questions. I wanted to ask that what is the guidance for this year? Hello, sir? Sir, we we maintain that 40% CAGR growth around here in the revenue terms. So last year, we'll be eighteen fifty one, and we can put it 40% on that number for this year.

59:40 Okay, sir. And you said that you have 3,400 crores of order book. How much is to be executed this year? We have 3,100 of un exhibited order because of. And out of this, we expect that around 2,400 crores of orders is due for execution in current financial year. Okay, sir. Thank you. Thank you. Thank you. Ladies and gentlemen, we take that as the last question for the day. I would now like to hand the conference over to mister Niral Kripesh Bhai Patel for closing comments. Over to you, sir. Thank you, everyone, for joining the investor conference today.

1:00:34 Thank you. On behalf of Atlanta Electricals Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.