Ladies and gentlemen, good day. Welcome to the GMM Pfaudler Q4 FY 2023 earnings conference call. As a reminder, all participant lines will be in the listen-only mode. 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 touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Miss Priyanka Daga from GMM Pfaudler. Thank you. Over to you. Thank you, Ryan. Good afternoon, ladies and gentlemen. A very warm welcome to all of you into the quarter four FY 2023 earnings call of GMM Pfaudler Limited. The earnings presentation was uploaded on the stock exchanges last evening and is also available on our website. Hope all of you had a chance to go through it. From the management, we have with us our Managing Director, Mr. Tarak Patel; our CEO of International Business, Mr. Thomas Kehl; our CEO of India Business, Mr. Aseem Joshi; CFO of International Business, Mr. Alexander Pömpner; and CFO of India Business, Mr. Manish Poddar. We will give you a brief overview of the performance of the company, after which we will get into the Q&A. Before we begin with the overview, a brief disclaimer. The presentation which we uploaded on the stock exchange and our website, including our call discussions that will happen now, contains or may have certain forward-looking statements regarding our business prospects and profitability. This is subject to certain risks and uncertainties. The actual results could materially differ from those in such forward-looking statements. I will now hand over the call to Mr. Patel to provide an overview of the performance. Over to you, sir. Thank you, Priyanka. Let me start off with by giving you a snapshot for the financial year that we completed. We closed the year at INR 3,178 crores of revenue, a significant increase over the previous year number. INR 431 crores of EBITDA, which translates to a 13.6% margin. INR 235 crores of profit after tax, which translates to a 7.4% PAT margin, EPS of about INR 43 or so. The order intake for the year also was quite strong, and we did about INR 3,392 crores of order intake, which translates to a current backlog on April 1, 2023, of INR 2,162 crores. This backlog is quite evenly spread between the international and the India business. The international business has a current visibility of about eight to nine months in most geographies, with certain geographies having even a longer backlog. For the India business, we have about a six to seven-month backlog of the India business, we are quite confident that going forward we will be able to also, from what we've seen in the beginning of this year, the order intake continues to remain quite strong. Like I mentioned, the revenue growth was in excess of 20%, which was driven by international business, which grew at 21%, and the India business, which grew at 32%. The main drivers of the order intake were basically our technology platform, which includes glass lining equipment, precision and drying, mixing and heavy engineering, also on the services business. Our systems business, which has a very strong OpEx pipeline, continues to remain behind our budget, we expect that in the coming months, some of these orders, which were, you know, actually going to be finalized, will now get finalized, that will give us a nice bump to our order intake as well. The profitability in the International Business has seen a significant improvement. It is now close to about 11%. When we acquired the International Business, we had an EBITDA margin of close to 7.5%-8%. The International Business has performed quite well. The Indian margins obviously have remained quite stable, 16%, and we have seen some pressure on the India margins, mainly driven by higher input costs and a slight slowdown in investments in both chemical and pharmaceutical. Some of the other highlights of the year, we obviously, the both our factories in Vatva and Hyderabad are fully up and running now. These facilities accounted for more than INR 300 crores of revenue. Do keep in mind that not a very long time ago, both these factories were zero in terms of revenue, so we are quite happy with the startup. We completed an operation excellence program in Vatva, and we now plan to, we have actually started one more operational efficiency program in Hyderabad as well. Cost reduction measures continue across geographies. We have seen some stabilization in India, especially on the metal prices. We've also seen a steep reduction in energy costs starting this quarter as well, mainly natural gas. That's gonna give us a nice positive outlook for the year. One of the higher kind of materials that goes into glass lining, which is the lithium carbonate, has also seen a 50% reduction in cost. If these costs continue to remain at this level, that would obviously have a positive impact on profitability as well. In terms of some manufacturing highlights, we recently manufactured India's biggest glass line vessel, 80,000 liters. We have a backlog of more than five or six of these large sizes currently in our factory. Our Chinese facility also manufactures probably the world's biggest glass-lined vessel, which is about 140,000 liters. From a profit perspective, we've completed the acquisition, the balance acquisition of the 46% of GMM International. 100% is now owned by GMM Pfaudler Limited. All the profits now accrue to the shareholders of GMM Pfaudler. During the year, we also completed the acquisitions of Hydro Air Research in Italy, JDS Manufacturing in USA, and Mixel Group, which has factories in France and China. One more point here. In terms of outlook, we are quite positive with our outlook forecast. We expect the growth rate to continue in the same region of maybe about the 15%. From a margin perspective, we also do plan, we do hope to see an improvement in the current margin, which currently stood at 13.6%. We do plan to increase this margin, which will be driven by both improvement in margins in the international business as well as in the India business as well. Manish, over to you, please. Thank you, Tarek. Good afternoon, ladies and gentlemen. On the results, as Tarek mentioned, we ended the year on a strong note, with INR 3,178 crores of revenue, 25% higher YOY, and an EBITDA of INR 431 crores, 52% higher YOY. We also achieved an EBITDA margin of 13.6%, which is 1.5% higher than last year. Last year we were at 11.2%. On the quarter as well, Q4 ended up with a decent at 24% higher revenues YOY at INR 866 crores and 34% higher EBITDA at INR 96 crores. On international business, the EBITDA margins would improve by 0.5% if we exclude the three new acquisition entities performance of HARI, JDS and Mixel. We are absolutely on track to surpass our FY 2025 target of INR 3,700 crores of revenue, EBITDA of INR 630 crores and ROC of 25%. For the quarter specifically, payroll cost was higher for the international business. This is an accumulation of three factors. There were three new acquisitions that we just spoke about. There's the annual increment cycle on the international business starts on J anuary 1st, therefore we will expect increment on Q4 over Q3, and there were a few one-time payments as well. On the similar line, other expenses were higher due to the new entities and the annual catch-up of the facilities expenses there. Order intake, I think Tarak has already spoken about. On cash flow, specifically on slide number 11 in our presentation, there are a couple of calls I just wanted to share with you. As part of the global PUC alignment, there is an increase in the unbilled revenue for this year. This is a major portion in the negative 248 working capital number that we see in slide number 11. The second piece is, due to the addition of the three new entities, the profits accumulated for were only for two to three months. However, working capital being a balance sheet item, were added for us to be as an, you know, to a balance sheet item. These two items are distorting the cash generation picture as we see in the numbers. If you eliminate these two items, we have a healthy, free cash flow of 50% vis-a-vis the EBITDA. On the similar line, on the standalone cash flow, refer slide number 25. We have shown the annual cash flow into two halves to reflect upon the improvement in the working capital in India in second half. We believe that we can continue this journey of improving the working capital by additional three, two days in the upcoming years. Over to you, Priyanka. Thank you. Thank you, Manish. Hi, Ryan. We can, probably now open the Q&A session. Thank you. We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question is from Venkatesh Balasubramaniam with Axis Capital. Please go ahead. Yeah, thanks for the opportunity. I had a few questions. The first one is: In the fourth quarter, there was a dip in the international margins, quarter-on-quarter. I think last quarter, I think we were at 12.7%. We have moved down to 8.9%. That's a sharp decrease. Now, this dip, is this like a cyclical thing, that every year we will have a dip in the fourth quarter on the international side o r is it just like, we had something specifically negative in this quarter, which pulled down the margins? That is the first question. Sure. Venkatesh, let me start off, and then both the CFOs are here who can also jump in. Yes, so I think the way that you should look at it or somebody should look at it, that internationally, historically, fourth quarter has always been weak in terms of margins. Usually, there are two reasons for this. One is obviously, as Manish mentioned, that the new increment cycle in the international business starts on January fourth, so you will always see that kind of bump up happening. Also there is sometimes the catch-up cost that you have in some of the factories which get allocated right at the end of the year in Q4. Our expectation is that international business margins will stabilize to the earlier numbers in Q1 and Q2 and so on and so forth. This is obviously a phenomena that will continue, and you can always, kind of probably build in the fact that Q4 in the international business will always be slightly lower than the past three quarters. Maybe, Alex, you want to jump in and just. Hello together. No, exactly like what Tarak said, as in general, if you look on a, let me say, 12-month basis, we definitely confirm that we are on track with our growth plan and margin improvement. Okay, okay. The second question, I think what you said that this year you're expecting around roughly 15% kind of top line growth. Do you have like a margin guidance target, whatever, you know, what you can get to this year in terms of consolidated margins? I would say that the international business is currently tracking between 11%-12% or so. We would expect 100 basis points improvement there, somewhere in between that, at least. That's the minimum that we are targeting, and we're quite confident that we can achieve. India is around 15%-16%. We are also hoping or expecting an improvement there in the same kind of range. These are conservative estimates. You know, obviously, if our cost efficiency, you know, energy costs, metal costs continue to go down, if there's a kind of an improved, you know, I guess, investment cycle that gets kicked in, you know, this will obviously add to that. There are currently quite a few measures that we have taken, both in India and internationally, to make sure that margin improvement is a prime focus within the group. Looking at the order inflow in Q1 and our expectation for Q1 shipment as well, we are quite confident that margins will normalize to earlier levels, if not improve upon that. Okay, okay. If you could spare some thought on this aspect, I think you had guided for around INR 3,700 crore top line for FY 2025, and around INR 630 crore EBITDA. That basically means 17% EBITDA margins in FY 2025. We are currently at 13.6%. Looking at your numbers, it looks like the top line, achieving the top line guidance will be very easy, whereas the margin guidance looks, you know, a tad bit tougher, you know, 13.6%-17%. Is it more like, you know, given that the top line is higher, we don't need to get to 17% margins to get to that six, and that is what is the plan? We will get to the 17% margin, irrespective of the higher top line, which we might end up achieving. Yeah. The idea and when we did put out the guidance was a revenue number of INR 3,700 crore, like you rightly said, and a INR 630 crore EBITDA number, and 25% ROCE. I think we are on target to achieve all three of them. Obviously, the INR 630 is not going to mean that our margin can be as low as, let's say, 10%, and we do like, you know, INR 6,000 crores of revenue. That's not gonna happen. Is it going to be exactly 17% or not? That's something that really is, you know, I can't really promise. INR 630 is something that we will definitely do. How much of revenue that requires? We obviously hope that it requires something very close to INR 3,700, because that's our internal plan and that's the target. We do have some challenges that we're facing currently in the market, in Chemical and Pharma here in India. We are quite confident that when the cycle will turn, and we have enough visibility to make sure that we have a few quarters before, you know, the cycle needs to turn. The kind of action plan that we have for the next financial year, we believe that, we will be very close to all these three numbers. I think that's a good opportunity for me right now to also just give you a little bit of outlook in terms of what we are hearing from both Chemical and Pharma. Chemical and Pharma both are seeing, you know, challenging environment, some headwinds, but we do expect a strong recovery at the end of this financial year, end of this year rather, or the calendar year. Many of our pharma customers are now looking at large CapEx for the investment, and most of these will start sometime in the end of 2023, early 2024, because a lot of them are planning for the cycle, the ordering cycle to turn, which is expected sometime in mid-2024, 2025, right? I think that's something that we will see. Chemical is seeing a slightly slower order intake right now here in India, but we do have a large, obviously, pipeline, so we believe chemicals will also start ordering again. With the backlog that we have, obviously, we believe that we are quite in a comfortable position. Internationally, both Chemical and Pharma have remained kind of stable, but, Thomas, if you could just jump in and give an overview of the German market as well. Thank you, Tarak. This is Thomas Kehl. Yes, I think I can only second that the markets, chemicals and pharmaceuticals in Germany and in Europe especially, are still strong, still growing. We are experiencing, not only in Germany, but in other countries in Europe, still a shortage of basic medicals, especially treating children. That drives the government to motivate and incentivize the pharmaceutical industries to invest locally in Germany and in other European countries, and that will go on for quite a while. That will be seen this year, next year, and maybe the years after. This is something that we feel very strong about. We are very positioned to serve those markets and industries and expect that demand to be strong. In Chemical, we have seen some chemical companies making plans to move in other regions, like BASF, with some of their products. However, those products that they are making in China in the future are not related to the equipment that we make, fortunately. In the chemicals that we serve, the demand is right now at a normal to normal plus level, I would say. Okay. Now, just a couple of other data questions. I think first two quarters of this year, you had like an INR 22 crore kind of FX gain in the other income. third quarter, you had an INR 18.5 crore loss. In the fourth quarter, did you have a gain or a loss? I don't think it was a substantial number. I can share. Yeah, I think it was kind of small. Nothing significant. Nothing significant because the Euro dollar didn't move, and that was the biggest lever in the first three quarters, actually. Therefore, and that's why we didn't want to call it out separately, because it business as usual. Okay, one last question from my side. What is the expected effective tax rate for the overall consolidated entity for the next year? Some kind of broad range it would be. On a go-forward basis, it should be something like 26%-27%. Okay, thanks a lot. All the very best. Yes. Thank you. Ladies and gentlemen, a request, please restrict yourselves to two questions per participant. Our next question comes from Sandeep Tulsiyan with JM Financial. Please go ahead. Y eah, good evening. F irst question is regarding all the acquisitions that you made in the last one, two years that's JDS, Mixel, and Hydro Air. I f you could give some sense of where are the capacity utilizations across these plants today when you acquired, and, uh, over the next two to three years, what kind of additional, uh, revenue generation capacity these plants have? And out of that, how much you look to add within the three thousand seven hundred crore target that has been mentioned? Right. Hi, Sandeep. Let's just go through quickly the acquisitions. Like I had mentioned earlier, we closed three acquisitions this year. Hydro Air was kind of done earlier during the year, and that company currently does about $7 million-$8 million of revenue, has been performing quite well, and we expect that company to at least double over the next few years. This company, in terms of manufacturing capacity, is an engineering company, doesn't really have or need any kind of capacity or capacity utilization numbers, because they basically just order things from different vendors, put the entire thing together and then sell it to the customer. No real factory that is linked to this acquisition. We bought a small company in the south part of the United States, near Houston. This is a glass lining, a spare part and re-glass facility. We want it to be closer to the chemical zone in Texas, and this is very near to that. That is currently under the startup phase, and we accept, we expect that over the next few months we will get that started up, and then we'll be able to cater to that local market as well and improve our spares and services business from that site. Lastly, the Mixel acquisition was completed only in February this year, so we only have two months of revenue that we have accounted for. Having said that, the backlog in that business continues to remain strong. Mixel is an important opportunity for us because it fits into our overall global strategy of really growing our mixing business into something or something as big as glass lining. That fits in quite well. We are already seeing synergies between some of our units and Mixel as well. The idea is to now to kind of put it under one global brand umbrella and launch that brand as a mixing platform, right, for us. That company currently does about almost how big is Mixel in revenue? About 15 million. About EUR 15 million has a strong backlog, and again, we expect that this business will at least double over the next three to five years, and that's the idea. That's pretty much how these three acquisitions are going. What we are also doing is, we are not adding a lot of capacity or new people. We want to use the same kind of factories across the geographies, but have more throughput, and we have more material moving through these factories by moving some of the production either to India, but also moving a lot of the engineering, documentation, calculations and stuff to India. One of the things that we are just starting, and we have just recently launched this in the company, is an India engineering office, where we are going to now look at bringing in people to take off and do some of the non-value add. No, not really non-value add, but non-critical, maybe, work that is done in some of these western countries, which will also help us improve our costs. Got it. Second question is on the related party transactions which you disclosed. When you look at the change, it's gone up materially in the last year, somewhere in excess of INR 500 crores, which are to DDR, other group entities. Of course, there was an overall plan to shift some of the manufacturing to India factories which were underutilized at that point in time. If you could just give us a sense of how this ramp up has happened, how should we read into this more, this whole like phenomenon that we're shifting manufacturing from China, Germany, and U.S. to India, and try to take advantage of the local manufacturing? From INR 500 crores, how should this number pan out over the next one to two years, if you could give us some broad outline, please. The related party numbers do include a lot of intercompany sales that we do within the group as well. Obviously, our stock and sale program that we currently have with Germany, I think that's a key driver to that. We are also doing a lot of job work or orders for some of the other formula units. Only this year, in this financial year, in Q1, we received a large order from the U.S. of a company called Cargill. This is for heavy engineering equipment that is going to be made here in India. There is quite a bit of work that's being done. We also now do work for MAVAG. About 80% of MAVAG manufacturing is done locally here in India. On top of that, we have also supplied quite a few more. That was earlier. We've also supplied to other units as well. I'm not sure, I don't have the breakup with all the related party transactions with me, but if you want an exact number in terms of what it used to be and where it's increasing, we can give that to you just offline. You know, we can take that along and just have that center cross. Maybe, Aseem, you want to just talk a little bit about the India sourcing program right now and some of the stuff that we're working on? Sure. Hi, Sandeep. As far as sourcing from India is concerned, I think Tarak talked about it. I'll just take a minute to explain how we're thinking about expanding that portfolio. As we have discussed in the past for our glass-lined equipment, you know, we have, over the past year and a half, started exports from India for two things. One is to cover under-penetrated geographies, especially Southern Europe, Eastern Europe, South Asia kind of locations, as well as have a stock and sale program, which Tarak has talked about in the past, right? That is started, that's gone off successfully with a number of equipment that have shipped, and we have a standard cadence going of things manufactured and dispatched here. In addition, for our other product lines, that cover the systems and non-glass-lined portfolios, we also find opportunity to manufacture in India and sell into other geographies. A good example is oil and gas opportunity we had in China, fairly large, about $7 million, I believe, in sales value, where the relationship is in China, the manufacturing is in India, but the engineering, is in the U.S. in this instance. You know, it's a good example of where we can leverage our global strength, wherever the region or wherever they exist, to be able to serve our customers instead, and we continue to drive that. Great. Just last, if you could quickly give some perspective on this bad capital allocation, because we've been very aggressive in acquiring companies as well as adding capacities here in India for the last two years. How should we look at the CapEx number going forward for the next two years on an annual basis? Will it be more acquisitive or will it be more expanding the existing capacities? Sure. Sandeep, last two years, last two, three years, we have acquired capacity in Hyderabad and Vadodara, as you know, and in for a guided period of FY 2025, for achieving INR 3,700 crores, we have sufficient CapEx, and we generally believe that we can probably do closer to INR 4,000, INR 4,000+ crores of the turnover out of the existing CapEx infrastructure that we have. Of course, maybe 2.5% of maintenance CapEx every year, just on a sustenance basis, will definitely be needed, but no enhancement CapEx is planned for any deliveries at least FY 2025. Thank you. Our next question comes from Nitin Agarwal with DAM Capital Advisors. Please go ahead. Hi, thanks for taking my question. Just a couple of questions on the Q4 results. You know, two line items. One is on the cost of goods and other expenses. You know, there's a meaningful change on a QOQ basis. Is there a seasonality element to either both of these elements? If you can just help us explain those two elements. I mean, the costs have gone up quite a bit, and the other expenses are also up quite a bit on a QOQ basis. Like I mentioned, there is seasonality. There is always a margin reduction. If you look at the last year numbers as well, the Q4 numbers were lower by about, you know, 100-200 basis points because of the seasonality. We have an increment cycle that kicks in on January 1st. That's something. We had a couple of one-off favors that we had to make, and basically, that's on the payroll side. Of course, the three new entities come up and their expenses, you know, do distort the picture on a comparative quarterly basis. On the other expenses side, like we said, there are, you know, annual facilities, catch-up expenses that happen. Therefore, probably the full year is a right reflection to see on a consistent basis, how do we expect these numbers to go up. In your, in our GPMs, you know, how do we account for, you know, rather, what is the impact of the metal price movement that typically gets passed through as inventory loss or gain, typically in a gross margin line through the quarter? There's a concept called MAUC, moving average unit cost. Every time you purchase an inventory, the existing inventory gets reweighted to the new pricing. Therefore, you see that, I mean, last year we had that lag of we had the price benefit in the first half and the price and that the reality stuck in the H2, and therefore you had a margin improvement in the H1 last year and H2 in the subsequent period. Every time you buy a new material, the inventory gets impacted by the total go on the average basis. Okay. Lastly, in terms of the recent acquisitions we've done, they're fully accounted for it from the Q4 or there is some element which is yet to be captured in the number? Yeah, they have been fully accounted for in this year. Of course, you know, the PPA, as the accounting concepts allow us for a one-year period to do the PPA revision. We don't expect any material numbers coming out of that from either of the three acquisitions, but otherwise, yeah, they're now pretty much part and parcel of our revenues and assets, and they're pretty good mixes and all. Except for the revenue is only two months for me. Yeah, Mixen is just two months. HARI started in first week of August. JDS end November. It's not only started production yet. Yeah. It's not getting any kind of Yeah, the cost, but no revenue coming in. That should now Exactly. That is the reason that, you know, on a like-to-like basis, if we, if we exclude these three entities, where the international margin is higher by 0.5% at least. Lastly, you know, what is our interest annual, annualized interest cost now, in the current environment? Yeah. I think we've been, you know, because of the EBITDA financials that we enjoy, we have the weighted average cost of capital is at 7.7%, sub 8% on a global basis. India also is at 8.3%. About 8.5% on average for on a overall? No, no. Yeah. On a global basis, we are at 7.7%. India, we are at 8.3%. Okay, thank you. Thank you. Our next question comes from Rohit Ohri with Progressive Shares. Please go ahead. Hi, Tarak. Two questions and two parts to that. The first one being, we've been speaking about bioplastic, bioproteins, and certain niche, which are currently small industries, have a lot of potential to grow. So what is GMM Pfaudler doing over there in that domain? Secondly, if you could share some more details on the EV space and GMM Pfaudler playing a role in that. I think, Aseem. Yeah. Rohit, hi. This is Aseem. I'll take this question. Yes, we are closely watching these and other mega trends. You mentioned two of them, bioproteins and then lithium. We actually have opportunities in both those areas. As far as bioproteins go, the HARI acquisition that we made last year has some very interesting membrane separation technology that is applicable there. In fact, we have already worked with a couple of leading players in that space, in Europe, and we are very hopeful that we can expand that. Sorry. In U.S. Sorry, in U.S., excuse me, not in Europe. As far as lithium is concerned, there, too, we have a play. We are actually exploring what else we can do. We already have a large project, I think it was about $10 million of acid recovery, you know, which is involved in our system business. This was a project we won in Korea for acid recovery for a lithium plant. Our acid recovery solutions traditionally have gone into chemical, explosives kind of applications, minerals kind of applications. Thanks to lithium, thanks to some of the, you know, environmental norms that are coming in that apply to the power industry, we see additional segments where we can apply these technologies. We have, for example, in India, an order that we are executing now for Hindalco, for a power plant. This is a flue gas desulfurization application, where sulfur is removed out of flue gases, and that weak sulfuric acid that comes out of it is then concentrated up so that i t could be used or sold into the market. It's an exciting area for us, and we are keenly following developments in this space. Okay. Okay, thanks, Aseem. Tarak, GMM has become a global organization with 16 manufacturing units across the globe. somehow, if you see the world map, we see GMM everywhere except for Japan and ANZ. Do you think that these markets are not lucrative for our portfolio since we don't have a presence over there? Okay. Firstly, let me just clarify that even though we have a lot of dots around the map, all of them are not manufacturing facilities. There are about eight key manufacturing facilities. Some of the other sites are small, kind of engineering offices or kind of centers, where we kind of bring in stuff and just kind of assemble and things like that. Eight really big, not big sites, but, you know, really two manufacturing sites around the world, three of which are in India and one of which is in China, so four really for the rest of the world. In Japan, we already have a relationship and have had a very strong relationship with a Japanese manufacturer of glass-lined equipment, a company called Kobelco Eco-Solutions. In the past, and we currently have also supplies that we supply to them, which we buy from India, and they sell in the local Japanese market. Keep in mind that Japan historically has been a very closed market. They usually buy only Japanese equipment, and there are currently three manufacturers, so there's no real need for us to penetrate. It's quite, you know, it's kind of tough also to penetrate the Japanese market. Having said that, because of our relationship in Japan, some of our products are already being sold there. The Japanese company also buys, the pharma glass, the glass that we actually spray onto the reactors from us. It's a Pfaudler glass that they sell in Japan. The Pfaudler brand name is quite popular in Japan as well. Indirectly, we are there in Japan. Directly, it doesn't make really a lot of sense for us to kind of go in and try to take over or be a part of the Japanese market. Our real focus now in terms of glass-line growth is going to be really the China market. The China market for us is something that, we probably have a much lower market share than the rest of the world. The China factory was started about a year and a half ago. It's fully operational now. They're fully up and running. The momentum is very strong. We have good people there, a good site director as well. China really can, double or triple in the next few years, and that's really our focus and hope. Okay. Okay, My last question is, probably Manish can take it. He did touch upon the fact that, you know, with the current capacity, we can be around INR 4,000 crore or so, and your target is INR 3,700 crore. My question is, are you looking at INR 5,000 crore by 2027, 2028, growing at around 40%-50% CAGR? Tarak, do you want to take that? Unfortunately, since the guidance has already been given to 2025, I think the first order of business for us is to achieve that and then reguide. We obviously have internal targets. We have built some kind of internal plans as right now. Too early to share what those numbers are, I believe that as a company, we would like to obviously grow and continue to grow. We would also like to improve the margin and really look at both of these as opportunities, both through organic as well as inorganic growth. That's really the idea. We're keeping a close eye on our markets. We also are looking to diversify, if one or two industries were to slow down, we always have buffers in place. I think one of the things that you will also see now, this is a question that I used to get quite a bit about acquiring international businesses, because most Indian companies who bought international businesses haven't done so well. I think this year you will also see that the international business is helping us significantly, both in terms of revenue and the profitability, right? Let's say, for example, if India were to slow down for the next six months, nine months, I'm still confident that the numbers will be met, because international business, with such a larger part of it coming from services and aftermarket, will still continue to make those numbers, right? We have a kind of buffers in place. We have de-risked, only from our India focus to now having really a global refocus, which makes, you know, a little bit more comfort around the fact that these numbers will be made either through some certain geographies or business lines if one or the other one were to slow down. Okay. Okay, thank you, sir. Thank you for answering. I'll call back in the queue. Thanks. Thank you. Thank you. Our next question comes from [Ashit Koti with Investore]. Please go ahead. Good evening, Tarak sir. Yes. Thanks for the opportunity. Just two questions. One is, Hydro Air, you said it is more of a assembling unit. Is it that kind of activity would get transferred totally to India? That is one. You have shown, I think around INR 333 crores or odd amount as a debt, which is majorly used towards increasing the stake of buying down that 46%? Yeah. Let me first answer the Hydro Air question, and then you can take the debt question. The Hydro Air question, the idea, obviously, so Hydro Air, you know, it's a $78 million company, is very localized. It caters to certain parts of Europe, Italy, Germany, Switzerland. The idea of this acquisition was obviously to bring Hydro Air into our stable, so we increase our product portfolio, we add new businesses and new industries that we can cater to. However, the real benefit will come now because Hydro Air has access to the Pfaudler global network. The European business will still continue to cater to the European U.S. market. However, for India and China, we will now do the manufacturing locally. The technology and the engineering will be done by the Hydro Air guys in Italy. However, the local cost structure of manufacturing and assembly will be done in India and China, so that we can obviously compete more with the kind of local competitors that we would have and bring our costs down significantly, right? That's the idea. We have also quoted recently some of these Hydro Air kits to Biocon and other biotech industries as well, and that will all be manufactured locally. The engineering will be done in Italy. Manish, on the debt chart. On the debt, yes, there were three elements. One was, as you all know, the 46% acquisition, led to a debt of something like INR 175 crores. In India, we had a short-term, working capital debt of INR 50 crores. The third piece was for Mixel, we had taken some EUR 8 million-EUR 8.5 million of debt in the International Business. Collectively, these were the three elements which led to the increase in the debt. Currently our debt ratios, maybe you can just spend a minute and just, you know. Sure. I think, as we mentioned, we continue to enjoy a healthy balance sheet from that perspective. On a consolidated basis from net debt to EBITDA, we are at 1, and in India, we are at 1.7. Net debt to equity, we are at 0.5 only. It's absolutely healthy and comfortable from the debt perspective. I think maybe also for the benefit of the group, I think most of the acquisitions that we have planned have been completed, the large acquisitions, right. I don't think there's any significant kind of major acquisition that we have planned for the foreseeable future. The focus will obviously be now to reducing and repaying debt. We have pretty much repaid quite a bit of debt, we had to take some more for the acquisition of [Gamut Ten], which is now done, and you will see over the next two to three years that the debt will be reduced. The interest coverage ratio is at 6.5 x, and the DSCR is at 1.7 x on a consolidated basis. Maybe you want to give the update numbers on the pension plan as well, the debt-like item. Yes. The pension plan, when we started the year, we had something like INR 373 crores, and now we have it at INR 280 crores, primarily because of the interest rate increase. The present value of the liabilities have gone down, so that has helped us in the OCI, or other comprehensive income, that is where it stands. T hese are, as we mentioned earlier, these are the closed pension plans, there are no new additions, these were closed quite a few years back. The average age is something like 79, 80 years, there's a natural progression to then exit to these plans. The U.S. funded plan was there, that's where the assets and liabilities have been knocked off, that volatility in the P&L has been taken care of in this year. We assume that INR 283 crores, what is there, over a period of maybe five, seven years, would reduce by maybe 50% or 83% probably will have a much longer period. Kindly appreciate, as the interest rate cycle, you know, turns and you know, you'll have a reverse movement as well. The time value of, it's a combination. No, no, he's asking you a different question. He's not asking you for the pension liability. He's asking about the other debt. When do you repay the other debt? The other debt. Okay. Debt of this INR 800 crore broadly. Yeah. Although we have INR 300 crore of cash, the gross debt of INR 800 crore, we have the original payment scheduled till FY 2028, we feel in next two to three years, we should generate enough cash. If we don't do any further acquisitions and all that, we should be able to pay off our debt in next three years. Okay, thank you. Back on the queue. Thank you. Ladies and gentlemen, if you wish to ask a question, please press star then one. Our next question comes from Sanjay Shah with KSA Securities Private Limited. Please go ahead. Good evening, gentlemen. Thanks for opportunity. My, just to get some understanding about our vertical-wise business then, in India, majority skewed towards the technology side. When we see international, I understand it is because of Pfaudler, but, it's well equally divided among technology, services, systems and all. Tarak sir, can you help me? How do you see that coming in next two to three years? How do you see that opportunity of improving our business on system side, services side in India, too? Sanjay, this is Aseem, I'll take it. You're right, when you look at the pie, certainly in India, our, more, the bulk of our revenue comes from the technology segment, both glass-lined and non-glass-lined. Now, we do recognize the benefit of having a more greater balance, with more systems and more services, and that's the focus. The services piece, we have, increased our emphasis on that segment. That's currently less than 10% of our revenue, and we are focused on growing that. As you know, you know, India is still a strongly growing market, so the install base is being built out. In the next five to eight years, as this install base matures, you know, there is definitely a need for service that will come, and we anticipate people will be looking for quality service, so and for which GMM Pfaudler will be ready. As far as systems is concerned, this too, I think, will follow the install base. As the market starts maturing, we will be able to grow our system business. We are certainly improving our capacity in India as far as engineering is concerned and sales is concerned to drive this. Over time, we expect to improve this balance. Sir, in technology side, how was the progress on our non-glass-lined segment? Could we do any good inroads into it? Yes, very much so. We have delivered very strong results in our mixing business. The, you know, actually, engineered the system, the vacuum evaporator kind of business has done well. Also our alloy business, which also falls in technology, has grown really well as well. We are actually quite pleased with the kind of growth rates, you know, very high double-digit growth rates that we've witnessed across our non-glass-lined technology portfolio. Yeah. Let me just add to this. Our mixing business in India used to be close to INR 25- INR 30 crores. This year, we may be close as to, we were, you know, at INR 150 crores of revenue just from mixing itself, right? Again, very technology, focused product range, quite high in terms of profitability. We had large orders for fermentation reactors, from three main customers here in India who are going to manufacture Penicillin G. That really boosted our growth. For next year as well, we have a strong backlog in mixing. The acquisition of Mixel, I think that mixing business is really going to be a nice growth area for us and also adds to our profitability, but also is very complementary in nature to our glass-lined business. Let me also step one step back and talk a little bit about heavy engineering. Last year, keep in mind, so this financial year that we just completed, our heavy engineering business was pretty much break even. We had some struggles there with higher input cost, materials rising, and some of the large orders that we had, INR 100 crores worth of orders that we received from one single vendor, were not lucrative in terms of margin. Having said that, the backlog now for the next financial year is definitely more accretive in terms of margin. We've been very careful in terms of our strategy, what we're trying to book and how we book it. We have a good mix of four business as well as our heavy engineering business as well. All in all, we are quite confident that the growth in heavy engineering will continue, but the margin improvement in heavy engineering will be significantly better than previous years. That's another kind of a positive aspect of the business. That's something that we are watching quite carefully, and we hope that that will continue as well. Our ability to maintain and differentiate ourselves will be able to improve margins as well. Thank you, sir. It's really helpful to understand. Thank you very much. Thank you. Thank you. Our next question comes from the line of Nitin Agarwal with DAM Capital Advisors. Please go ahead. Thanks for the follow-up. Just one, housekeeping. On the International Business, what would be our organic growth this year, excluding the acquisition we made this year? It's pretty much all organic, except for about $5 million or $6 million is the revenue that we have. Yeah. You add, basically Hydro Air for about seven, eight months and 2 months from Mixel should be in the range of $5 million-$7 million. JDS has already started, everything else is really organic, coming from within the Pfaudler, you know, the portfolio. Obviously next year, going forward, once these businesses, the new businesses start producing and growing, they will play a bigger share they will have in terms of the growth. Thank you. Thank you. Our next question comes from the line of Rohit Ohri with Progressive Shares. Please go ahead. Hi. Thank you for the follow-up. Tarak, I just wanted to know if there's any increase or decrease in the market share for GLE, non-GLE or mixing? Mixing, definitely an improvement in market share. It has went from INR 30 trillion revenue a few years ago to now INR 150 trillion, definitely growth in market share. In China, we've also probably grown market share in last nine. In India, with the 2 factories that we have now, I would say our market share is stable. You know, we had spoken about a smarter state strategy in last nine, where we were really kind of going after high margin business. Obviously that is something that we continue to do. However, we are also now being a little bit more aggressive in the market. Otherwise, generally, I think globally, if you see our market share would have remained around the same. You know, keeping it, you know, everything equal, I think our market share will be pretty much around the same, except for China, where our market has increased. Is it possible to put a number there? As per your estimates, what is the market share, maybe like 45% or 50%, if you can put a number? Yeah, I would say in China it's up 10%, India more than 50%, Europe about 40%, U.S. anywhere between 20%-25%, something like that. Okay. My last question is related to Hydro Air or HARI. Do you think that GLN has an opportunity open in the water treatment, because it is membrane treatment at the end of the day? Do you think that there are certain opportunities with the help of ion exchange and water treatment as such? Yeah. That technology, as you rightly pointed out, is certainly applicable to water treatment, both fresh as well as, you know, waste. However, we will carefully evaluate the commercials of such deals because, you know, we have to make sure that they make sense for us. Sometimes in the water area, they are not perhaps as attractive as some of the other segments that HARI covers. This is Thomas Kehl. The HARI acquisition was mainly driven by getting companies on our belt that have technology and process know-how that is somewhat superior. The water treatment basically is what we would call a commodity in this industry. We can serve it, but it's not necessarily our major target. We look at it more highly, more demanding specialized applications. Okay. Okay, thank you, Tarak. Thank you for the comments. Thanks for that. Welcome. Thank you. Our next question comes from [Ashit Koti with Investore]. Please go ahead. Yes, sir. Thanks. Pfaudler Inc. is still holding 14% share, sir? will there be any, again, disinvestment in next one years or so? DBAG, the private equity fund through Pfaudler Inc., continues to own 14%, out of which, you know, we had disclosed, the family had disclosed that we would acquire 1%. We are waiting for the final clearances from FDI France for the clearance on that, we will acquire 1% from DBAG through Pfaudler Inc., which will then put the family in excess of 25%. The balance stake of DBAG of 13%, like you know, DBAG has been now around for about nine years or so, I think the time has come, you know, that they will eventually exit. The exact date and time of that exit and the way that they exit also has not been decided yet, that's something that's still open. Do keep in mind that, again, they've been, you know, a very strong supporter of the business. They have been part of the business and supported the business for now nine to 10 years. We have a very strong relationship with them, and they are responsible investors as well. As and when they find the right solution, you know, they will consider selling, their last little bit and then demotorizing themselves as well. Sir, as a promoter, do you plan to, not immediately, but in the foreseeable future, again, go back to your the way you used to hold shares? I mean, say, more than 50% or so. Do you plan to do that? I had officially, and this is probably the public domain, said that, you know, being in the immediate foreseeable future, closer to the 30% mark is something that I would like to do. Again, there's a lot of dependence on, you know, a lot of things, but that is a goal that I do have in mind. Having said that, how long that takes, I really can't give you a timeline, but the first and the most important thing for us as promoters is to cross the 25% mark. That obviously kind of helps us in terms of hostile takeover, gives us more rights as the promoters, and also allows us to buy from the market, up to 5% every year without triggering open offer, right? These things are something that we would like to do, and this is a good opportunity for us to do it, and that's what we will do. Then let's see if the time and if everything is great and the stars are all aligned, we will then look at increasing our stake even further. Thank you, sir. Then just last question, with regards to the market share, what was responded by, that like U.S., we have got 25% and China, 10%. We would be more keen on increasing, say, market share in China or in U.S.? No, so sorry, just to clarify again, in both Europe, i n any Western market, which are basically the United States and Europe, we have somewhere between 35%-40%. That kind of, you know, fluctuates, but we are the number one market leader in both these geographies. In India, we have a market share in excess of 50%. We are definitely the market leader here. In China, it's a slightly different situation. We have a new factory that just came online 1.5 years ago. The first idea was to stabilize and get it up and running, which we have done now. Now the focus is to really go after market share and build our market share in China, which we expect to do. Market share in China is below 10%, the ability to grow market share there is significantly better than the rest of the world, where we already have a very high market share. China is definitely the focus area. Thank you, sir. Thank you. Ladies and gentlemen, we have reached to the end of the question- and- answer session. I would now like to hand the conference over to Miss Priyanka Daga for closing comments. Thank you. Thank you everybody for joining us today. It was a pleasure interacting with you, and we look forward to many more such interactions during the course of the quarter. Thank you. Take care, and see you soon. Thank you. Thank you. Thank you, bye. Thank you. On behalf of GMM Pfaudler, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.