Ladies and gentlemen, good day, and welcome to Q1 FY25 conference call of GMM Pfaudler Limited. 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. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. I now hand the conference over to Mr. Dhaval Rajput. Thank you, and over to you, sir. Thank you, Yusuf. Good evening, ladies and gentlemen. A very warm welcome to all of you into the Q1 FY25 earnings call of GMM Pfaudler Limited. The earnings presentation was uploaded on the stock exchanges today 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, our CFO of International Business, Mr. Alexander Poempner, our CFO of International Business, Mr. Manish Poddar, our Executive Vice President Sales International, Mr. Wilhelm Lau, and our Compliance Officer, Ms. Mittal Mehta. 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 that was uploaded on the stock exchanges and also on our website, including our call discussions that will happen now, contain or may have certain forward-looking statements regarding our business prospects and profitability, which are subject to several risks and uncertainties. The actual results could materially differ from those in such forward-looking statements. I would now hand over the call to Mr. Tarak Patel to provide an overview of the performance. Over to you, Tarak. Thank you, Dhaval. Good evening, everybody. We are happy to announce a good start to the financial year. Revenue and profitability remain stable with strong execution across geographies. The business environment remains challenging, mainly driven by a slowdown in the chemical and agrochemical sectors. Order intake improved significantly this quarter, mainly driven by heavy engineering, mixing, and systems businesses. The last two quarters have now seen a strong order intake, and this quarter's INR 882 crore of order intake is the highest order intake in the last 8 quarters. Our order backlog is also up by 5% to about INR 1,777 crore, and our opportunity pipeline remains stable, with key opportunities expected to close in Q2. Our diversification strategy has helped mitigate the slowdown in the chemical sector by allowing us to focus on new markets and industry segments. In terms of financial performance, our consolidated revenue for the quarter was at INR 785 crores, and EBITDA stood at INR 89 crores with an EBITDA margin of 11.3%. We also participated in ACHEMA this year in June. This is the trade show that is the biggest trade show for our industry segment as well. We also inaugurated the GMM Pfaudler JDS facility in Americus, Georgia, USA, which is a facility catering to the GLE, the glass and services platform. In FY 2025, we are also planning to launch our three-year, the strategic plan, which will highlight growth opportunities across our platforms and regions. I would also like to maybe spend a couple of minutes just to give you an overview in terms of what is, what we are seeing both in India and internationally. In India, like I mentioned, the order intake this quarter was quite strong, mainly driven by our non-glass-lined businesses, and we expect the glass-lined business to also kind of have some strong order intake in Q2 and Q3. Having said that, you know, the industry and the outlook remain slightly better than a few months ago, but again, the chemical and especially the agrochemical sector is still not so, I would say, strong in terms of their investment. Internationally, also as well, we have seen, you know, strong order intake, but this has been driven mainly by our non-glass-lined and non the technology business, and the systems business has done really well. So we expect the international business also to have strong order intake in the next few quarters. All in all, you know, it is a challenging environment, but we expect that, you know, the next few months and quarters should have some, the positive, outcome as well. With that, I will now hand over the, call back to you, Dhaval, and we can then open it up for question and answer. Thank you, Tarak. Yusuf, you may now open the line for questions. Thank you. Thank you very much. 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 withdraw yourself from the question queue, you may press star and two. Participants are requested to use handset while asking questions. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. First question is from the line of Sagar Shah from Spark Capital. Please go ahead. Thank you, sir, for the opportunity, and now I'll go ahead with my question. First of all, I got your point that currently it is a very challenging environment. So in this difficult stage, still we are seeing almost sluggishness in the margins, actually. Even the order pickup actually has significantly picked up. Yeah, the order intake is at an all-time eight-quarter high, but still the margins are coming down. I understand we have implemented cost control measures, but still the margins are not being under control. Now the consolidated margins have slipped down to almost 11%-11.5%. So what exactly is the reason behind here? So, is it the geopolitical tensions or some, the sluggishness in the glass-lined market? Are we booking orders still at a loss on a, on a glass-lined level? Because of, on the non-glass-lined, there's still mixing are higher, except for in the heavy engineering, all are almost higher margin segments actually for you. And on the standalone level also, we saw some, you can say, dip in the margin. So, what exactly is the reason behind this? And, going ahead, what are the steady state EBITDA margins on the standalone level as well as on the consolidated level, can we see in this year, FY25? That is my first question. Let me answer your question in two parts. I think, one, you started off by saying order intake of this quarter at 1,882, of course, is the highest in the last eight quarters. But of course, keep in mind that these orders are yet to be executed. So the new orders that have come in in Q4 of this, of last year and Q1 of this year are yet to be executed, and that margin profile is yet to flow through in terms of the P&L. The last few quarters, yes, we've had lower margins. Obviously, the main reason for this is obviously the volumes that we kind of have right now in terms of backlogs is not as high as what we've had in the past, and there is definitely, a volume issue in terms of cost, right? So the cost absorption that we have across our factories is not completely utilized, and hence we have slightly lower margins. Plus, also keep in mind that because of the slowness in demand, the competitive intensity is much higher, and hence there is definitely pricing pressure as well. However, having said that, I still believe that coming through a down cycle where most of my customers are seeing a 20% reduction in revenue and margins, we've been able to maintain margins, and we're not showing any signs of degrowth as well, right? So order intake is positive. It is a tough period for us, definitely, because the markets that we cater to are slowing down. However, we have also put in a lot of effort into diversifying our portfolio. And today, the reason that we are better off than many other people in this business is because we've diversified. So right now, when our glass-lined business has slowed down and we see pricing pressure in glass-lined, we've been able to make up for the shortfall in things like heavy engineering, in mixing, and in systems, right? So across the board, the other businesses have kind of catered. But yes, generally, there is a slowness in the market, and 60%-70% of our revenue comes from chemical and pharma, which is seeing a slowdown. However, having said that, in the future we would then kind of reduce that exposure to chemical and pharma, and we would expect the other industries to kind of cater and add to the revenue mix as well as the profitability mix. In terms of cost control, there are numerous measures that we have taken internally as well. So some of the benefits of the implemented cost controls are already showing up, and many of them will show up in the ongoing quarter. The outlook for this year is going to be maybe a small amount of growth, both in revenue and profitability. We're expecting that, you know, 5%-10% growth is what we expect. We hope that the order intake will continue for the next few quarters, but this year is basically a year of consolidation to look internally. I've talked about this in the last few quarters. Business has been slow, and until we bring the backlog up to a much bigger level, we will still face absorption issues. However, the last two quarters have been kind of positive in terms of order intake. We are not completely out of the woods, but definitely better off than what we were 6-9 months ago. That, so that's how I would like to answer that question. I hope that is, you know, that's clear for you. Okay, so basically, are you guiding for actually around the 5%-7% growth in revenue, sir, for this particular year? So that is what our expectation is. You know, we have a strong order backlog, so we have about INR 1,777 crores of backlog currently, executable backlog. We've already done about INR 785 crores already in Q1, so you can do the math. We still have order intake in Q2 and Q3. That will be shipped out in this year. We also have the services business that we will continuously add revenue and shipment as well. So we are quite confident that we will be able to at least achieve, if not grow, last year's number, but we expect to grow over last year's numbers. That's the internal estimate that we have. Okay. Okay, so, any broad level EBITDA margins that you are targeting for this year? So we've given a... I think we spoke as we want to maintain the same level as last year. I think last year, Manish, our margin control was what, 13 or 10? 13.5. Yeah. So that's what we are expecting. We might improve on that slightly. If the volumes pick up, then obviously we expect that number to probably be even a little bit better than that. Okay. Sir, currently, glass lining business, out of our total technologies business, would be how much percentage, sir, right now, as on Q1 FY25? I don't have that numbers right now because they are not the same for both India and internationally, so I don't have consolidated numbers. But predominantly, you know, glassline in India was a large percentage of our revenue. That has seen a significant reduction, but luckily for us, the heavy engineering business and the non-glassline business in India has made up for the shortfall. Internationally, they had services and systems, a big chunk of their overall business. So for them, those two areas have given good amount of growth. But in India, we were definitely more glassline focused. Over the last maybe 4, 5 years, we've kind of diversified and created other platforms that can also help us mitigate some of the risks associated with the glassline business. Okay. Okay. So, okay, so my just last just second question would be on the Industrial Mixing business. As you have guided that out of our INR 80 crore of order intake, mixing was also a big part, actually. So basically, can you lay out something like can you explain on that front? Can you give a color that what exactly has been done now going ahead to consolidate all three companies of mixing, and how do you look at that business for the next three years and also for this current year? And how has it contributed to the revenues actually in this particular quarter? Yeah. So I think on the number front, Manish can comment, but just let me give you, and maybe Thomas and team can jump in as well. In terms of the mixing business, again, you're absolutely right. It is a very important part of our growth strategy. It opens up a much wider range of industries that we cater to. You know, over the last, maybe this quarter and last quarter, we received large orders in mixing, where both India, Canada, and France have kind of worked together to win this order. One very large order from Australia has come through. A couple of orders in India have come through. So mixing is growing. Mixing is definitely an area we want to focus on, and maybe I'll hand it over to Thomas and the team to jump in and maybe talk a little bit about what they're seeing in their respective geographies. Thomas, maybe you can, yeah. Yeah. Mixing seems to be a little more stable because the mixing industries are much more segmented and gives us more applications and markets to cater to rather than chemical and pharmaceuticals. So we are a little bit less vulnerable than we see with the other intake. And, as far as just mentioned, big success in geographical expansion in Australia also just happened. A large order that we received there, and there's a number two order from the same customer, another project that we have good chances also to get in the near future. So I think you asked for the outlook in the next one to three years. We are very confident to grow the business in mixing globally, even further. We are developing further technologies. We are also in a project where we are standardizing some of our products to be more competitive and increase margins, and we are rather optimistic in our mixing efforts. We also look at further opportunities on M&A. Yeah, and so I think I'll just add to what Thomas said. You know, to capitalize on the opportunity that the market affords us, we are doing a lot of work internally to ensure that we are positioned well as a global company to address mixing needs wherever they are. So we have announced, we shared earlier, that we have a general manager of the mixing business, and he's working very hard to integrate these teams across geographies, ensure that the domain expertise that exists is available across the company, and that has already yielded results. So, some of the recent wins that Tarak and Thomas talked about in various geographies, were only possible because the expertise across the capabilities of GMM Pfaudler were shared seamlessly, right? So we're working to institutionalize that and work on standard engineering approaches across the company. You know, those kind of things in the background. We're very optimistic, and we will continue to focus on the mixing platform. On the numbers front, mixing for Q1 accounts for 8% of the group consolidated numbers, and of course, that of course, being the focus area, the growth trajectory will be faster, in time. Okay. So the 8% of control number- Maybe please request you to rejoin the queue for the follow-up question. Okay, sure. Thank you. Ladies and gentlemen, to ask a question, you may press star and one. Participants, in order to ensure that the management is able to address questions from all the participants in the conference, please restrict your questions to two per participants. If you have any follow-up questions, you may rejoin the queue. Anyone who wishes to ask a question may press star and one. Next question is from the line of Ashish, an individual investor. Please go ahead. Hello? Yeah, go ahead, Ashish. Yes, sir. Congratulations on a good set of numbers, sir. Sir, can you give some light on, on how the chemical, the whole, space is, looking from a GMM point of view, like, the entire, space? Sure. So, yeah, that, that's a good question because obviously we interact with a lot of chemical companies, both specialty as well as agrochemicals, and we also kind of interact a lot with pharmaceutical companies. So in terms of the chemical outlook, the agrochemical outlook is not so positive. The interactions that we've had with owners, CEOs and, you know, managers in agrochemical companies, it doesn't seem that there is really a lot of positive news that's going to happen. I feel that there's going to be still about 6-9 months of further, you know, slowdown in this sector, mainly driven by the Chinese competition, right? So the Chinese are still dumping and still competing at a cost structure that the Indian companies are not being able to kind of compete at, and that's going to obviously reduce volume and in turn, reduce margins as well for agrochemical companies here in India. So for most of these companies, you know, obviously, revenues and margins will be under pressure for this financial year as well, and hopefully maybe by, you know, Q3, Q4, we start seeing some green shoots where some of the investments in agrochemicals will come back. On the specialty front, we do see some investments. Investments are continuing, so people who are not focused only on agrochemicals are continuing with CapEx. Those decisions have been pushed out, but some of those decisions have been now kind of taken, and we see some amount of order intake coming from specialty chemicals. Like I mentioned earlier, we do expect some of them to close in Q2. In the pharma space, we've seen a lot more positive kind of news. We believe that pharma will continue to add, and again, Hyderabad pharma, there are three or four very big projects that are planned, and we expect again. And these are mainly for the glass-lined business, and we expect some of these large projects to materialize in the coming weeks. So that would put us again in a strong position when it comes to glass-lined. As you know very well, glass-lined, we are the market leader, and we are the first choice, so most companies will end up buying their glass-lined equipment from us. Internationally, the chemical sector also is a bit soft. Obviously, you know, a lot of the international companies are dependent on India and China for outsourcing. But the general weakness is not only in India, it is a global weakness. You know, there is obviously overstocking, and then with the Chinese coming in and dumping at lower cost structures, you know, that kind of makes it much harder for Indian companies. Having said that, the focus today is obviously in chemical pharma. Since we are not going as fast as we would like, we've kind of spread our wings, and we've entered into new markets. With Mixing, we now get to, you know, we cater to metals and minerals, rare earth, paint, dyes, food and beverage. We also are now doing fermentation. With our Systems business as well, we've gone into new industry segments. With Heavy Engineering, we have oil and gas, petrochemicals. So there's a wide range of industries that we are targeting, but generally, the weakness in chemicals has accounted for a large slowdown in the glass-lined business, which is obviously impacting both volumes and margins in the glass-lined business. Yeah, sir, and just a follow-up question. Like, in case of Mixing, like, not 2, 3 quarters, but, like, from here on, from 3 years from now, sir, what can be the revenue split of Mixing in the entire revenue structure? Yeah. So we've actually spoken that, you know, when we got the two companies together and our Mixing business in India, we were $45, $42, $45 million. We expect that to be a $100 million-plus business in a 3-year time period, and that's what we are stating it. Yeah. And, and sir, like, there are... Hello? Yes, go ahead. Go ahead, please. Yeah. Sir, one more thing. There are some plans to go into the nuclear space as well? Energy, nuclear space, reactor space, or, that is, that is not on the cards presently? So, this is Hemal Tekchand. You know, we have some capability to our heavy engineering business to address some of the non-core parts of the nuclear industry, which we will look at. However, as you probably are aware, that's a long cycle, long cycle, opportunity. So we will continue to monitor it, but that's not necessarily a core part of our strategy. Okay. Thank you. Thank you so much. Thank you. Next question is from the line of Bhavik Shah from MK Ventures. Please go ahead. Hello, sir. First of all, just one thing, so where does the Mixing business- Your volume is a little low. Hello, hello. Is it better? Yes, please go ahead. My first question is, where does the Mixing business fit in terms of classification? Does it fit in the systems or services? Mixing, yeah, part of technology. Okay, it's part of technology. What does systems and services constitute for us? Like, what do we offer there? Services is obvious. Anything that we have spare parts, re-glassing, or we go and visit the customer to give them any kind of help with startup, breakdown, that's all considered services business. Mm-hmm. So these are kind of very, kind of sticky businesses, high margin business, recurring business. And the international business has about 35% of the revenue is coming from services. In India and China, it's a bit lower, but services is anything that we have to do to make sure that our equipment is up and running. The systems business is obviously the kind of complete systems that we build together, which has proprietary equipment manufactured by us, but we do all the piping, automation, P&ID designing, and process know-how as well. So when you put it all together into a skid-mounted system or a complete plant, that comes into systems business. Okay. So, what will be, how will be our margins, say, for technology, system, and services? Can you give a broad range of margin profile? Like, whatever our order book is, based on that, what's the current, like, margin profile between technology, system, and services? Yeah. So I'll take this one, and then maybe Manish can add. Look, when we diversified our business, obviously our benchmark has been the core glass lining business, and our strategy always has been to add businesses that are at that level or higher. Right? And so with that, you can imagine so the technology business over the long term will. We should be at the glass lining level. Systems, actually we're selling an outcome to our customers. So again, while it varies across the different applications, broadly it's in line with our technology business. And services is healthier margins because we are there, you know, solving our customer's immediate problem, often in terms of spare parts, et cetera. So, technology systems sort of, you know, your typical product margin, and services is better. Okay. What will be the timeline for execution of our order book and the CapEx for current year? Execution of order book, most of the order book that we have, the backlog that we have, will be shipped out in this calendar year. There could be some kind of spillover depending on the length, but generally, anything that's booked in the first quarter or to the second quarter or maybe even up to November, gets shipped out, at least from the India business. International business has obviously a slightly longer delivery timeline. And what was the second question you asked, sorry? On the CapEx. Mm. Basically, we don't have any expansion CapEx coming up this year, and most likely nothing in the next financial year as well. The maintenance CapEx, we have alluded to, towards something like 2-2.5%, but we, I think, will be much lower than that any which way in this year. Okay, sir. Got it. Thank you very much. Back to you. Thank you. Next question is from the line of Yash Goenka from Aviga Capital Advisors, LLC. Please go ahead. Hi, am I audible? Yeah, please go ahead. Okay. So when I look at your employee numbers from 2023 to 2024, it has come down, but the employee cost has gone up significantly by around 14%. So can you comment on it? Because I, I think we were of the view that we will bring that down number of employees overseas to India, but which I cannot see it in the numbers. So a color on that. Which two number sets are you comparing? Can you please repeat? Okay, employee count in the annual report, which was 809 in 2023, and 784 in 2024. Right. Right. When I look at employee cost... Yeah, you can go ahead. This is standalone numbers. These are standalone numbers, right? The employee count you're referring to is standalone. Okay. Annual report. I think the employee cost you're referring to is consolidated. I think because- Okay. If it is thousand, then of course, these are India numbers. Yes. Right. No, no, it is India numbers. It is, it is definitely India numbers. Okay, so can you confirm- Consolidated numbers, so that might not be the right yardstick in terms of measuring, but generally, you want to comment on employee cost? So, if you see actually for the current quarter, if you see, we have actually a lower number on the employee cost, and specifically in India, we can talk about that. Q1, you would expect a upcycle on account of increments. Despite that, because of some employee reduction, headcount reduction across all the functions, we have been able to manage the cost at a number lower than the Q4 closing numbers. The reduction is- International as well, the numbers have been, you know, strictly in line with the Q4 numbers, a tad lower only. Yeah. We've actually reduced headcount across geographies, including India, internationally and in Europe as well. So there is a reduction in employee and employee cost probably as well. And if you look at the numbers carefully, you will see that. Okay, that's helpful. Thank you. Thank you. Before we move to the next question, a reminder to the participants, to ask a question, you may press star and one. Next follow-up question is from the line of Sagar Shah from Spark Capital. Please go ahead. Yeah, thank you for the follow-up opportunity. So just, what Tarak sir said actually, previously on my first question. So, can we assume that the orders that we have booked in the last 6 months, as far as the glass-lined orders are concerned, they are of higher margins as compared to what we had seen in the last, you can say 12 months or maybe 18 months, actually. So can we assume those are higher margin orders? So that is the reason that we are guiding for higher margins and higher revenue growth actually, as compared to what we have achieved in this quarter. No, I don't think that's the right way to look at it. Right now, the market is still very highly competitive. Pricing is definitely under pressure. However, as a market leader, we do get premium, and we try to extract the premium as we, as and when we can. But there is a lot of competitive intensity just because the volumes are not there. We all are now fighting for a much smaller bucket of orders, and hence there is definitely more competition. Having said that, there is definitely, you know, there are areas where we look to improve margins by selling and differentiating our product offering from our competitors. Either we look at export, we look at stuff that is different from our normal kind of, stuff that we do, which could help in improving margins. But generally, pricing in glass-lined is around the same as it was for the last 9-12 months. Until we see a significant change in volumes and investments going up, the pricing is not going to significantly change. On the margin side, you know, some of the benefits of the cost position improvements that we've done, that should start flowing through. But, on the pricing side, Tarak's been quite clear, on that as well. But however, having said that, we are working hard to look internally to see where we can reduce costs all across, our different functions as well. There are multiple initiatives that are ongoing, and hopefully, some of these will kind of deliver, and hopefully improve margins. So the margin improvement that we talk about is really from internal work, and we hope that the market will support in terms of volumes. And in terms of volumes, the volumes improve and obviously, pricing and margins will also improve. Okay. Okay. My next question was related to our revenue growth, which was down almost 13%. So is it related to any other some Forex impact, or is it just related to lower utilization? For how can we look? Forex impact. Q1 of last year was a very strong quarter in terms of both order booking and in terms of shipments, so it would not be a comparable quarter. Having said that, this year, definitely, international has been strong in terms of execution. India has been decent. The India AG business, which is gonna do quite well this year, did not have a good first quarter, and we expect AG to make up for some of the shortfall in Q2, Q3, and Q4. So overall, we are quite confident that we can maintain or even grow over last year's, revenue numbers. Okay. Okay, sure. Sir, my last question would be that, can you state the, as you had, from this previous participant had, you had answered to that question related to that, the mixing, the overall, the, the glass lining margins where, related to, almost are same as the, system to system level. The technologies margins are same as the glass lining level. So what are the margins right now that you are actually enjoying at the glass lining level, mixing level, and system and services level? Can you at least suggest a ballpark numbers for all the segments at least? We don't have product line, you know, margins being shared in the public domain. So sorry, I, I can't share those numbers. But broadly, like Aseem mentioned, mixing continues to be enjoying at normal glass lining levels. Of course, glass lining margins are down, relatively down, for the past two, three quarters as we've been observing. But apart from that, all other businesses have been doing decent. Okay. Okay, so, Okay, sure. I'll, I'll follow up. Thank you so much. All the best for future. Thank you. Thank you. Participants, to ask a question, you may press star and one. Next follow-up question is from the line of Ashish, who is an individual investor. Please go ahead. Yes, Tarak Sir, just... Hello? Yeah, yeah, go ahead. Follow-up question for Tarak Sir. As you said that the three-year plan will be shared, sir, at what point of time, sir, can we see that three-year? Hello? Yeah, yeah. So, Ashish, the plan is, it's coming along. We've had some, you know, we've put in a lot of work over the last few months. We are now putting the final touches to the plan. I don't have a time frame, but as soon as it's ready, there's no reason for this to kind of be delayed and hold. I think we want to come back to the market and share the plan with you. We just need to make sure that everything that we are thinking about, everything that we want to articulate, our business strategy and our long-term strategy is articulated and communicated well. So I think at least, in the next maybe, you know, three to six months, we should have something out there for you all, if not earlier. But we've spent the last maybe, you know, 4, 5 months working on this. We've kind of aligned internally with the management team. We are now going across geographies as well and reaching out to our employees to get them kind of aligned and bought into this plan as well. And it's a joint effort, where everybody kind of, it comes from bottom up, so we are actually getting numbers from every geography, from every business, every platform, and every product line as well. And then obviously, we are looking at opportunities into markets where we don't have a presence currently, right? So are there areas where we as a company want to kind of explore? One of those areas is mixing, that we've taken. Is there anything else that kind of gives us our focus on chemical and pharma? And that's what we really need to build, and then focus on those new industries, which will give us good and strong double-digit growth, plus strong margin profiles as well. And we've identified some areas where we believe we already have a strong footing, and we can even kind of use our brands, our capabilities, and our, you know, our customer loyalty to kind of build on that. So, a lot of stuff has to come together, but I think 3-6 months should be the right time frame in terms of when you can expect, some kind of communication from our side, if not earlier. Okay, sir. Thank you. Thank you so much. Thank you. Next question is from the line of Srikanth KN, an individual investor. Please go ahead. Sir, do you have any specific- Sir, your voice is very low. Yeah. You're able to hear me now? Yeah, yeah. Go ahead, Srikanth, please. Yeah. I just want to know if there is any specific impact of geopolitical situations, say, in the Middle East, and macro events such as the interest rate cuts that have been forecasted, say, in the September rate cycle. Is there any specific impact on us, because of these two events? Impact of geopolitical impact, not so much. The only thing that we've heard is that, well, from our customers, that shipping costs for some of their chemicals and stuff has increased. Now, what impact it does it have to our customers? I really can't tell, but for us, there's no specific impact on geopolitical situation. We did have an impact few months, 9 months, 1 year ago, when obviously there was a gas shortage in Germany, which impacted energy costs. But I think we are way ahead of that and we managed that quite well. But otherwise, currently, there are no other geopolitical issues that will impact our order intake or our business, for that matter. The second question? On the interest rate cycle, I think it only benefits us because the international business, the debt is at SOFR and Euribor base. So whatever interest rate reductions happen obviously flows through in our interest cost savings. Thank you, sir. Thank you very much for answering my question. Thank you. Participants, to ask a question, you may press star then one. Next question is from the line of Miten Lathia from Fractal Capital Investments. Please go ahead. Thank you for the opportunity. Sir, earlier in the call, you outlined the incremental strength that you're getting out of both the chemical and the pharma space in terms of the business outlook. Could we also get into slightly more detail and say if the kind of orders that are likely to come through will be more suited to the capabilities that we have? Or it is likely to be more in the sort of standard type of orders, which most of our competitors also are able to supply? I think glass-lined generally, if there is a large order, more often than not, they would go with, a company like ours, obviously, because we have the capacity to cater to large volumes. When customers want to build, you know, large facilities, world-class facilities, they will not really compromise on quality, and the life of the equipment is paramount when it comes to glass-lined. So hence, their kind of requirement for good quality product for glass-lined and in chemical factories is quite clear. So more often than not, we can differentiate ourselves. But again, like I said before, there's always competition. Maybe the customers would not buy from them, but at the end of the day, they will use their pricing to obviously negotiate, right? So there's only so much that we can do. But generally, the kinds of orders that come from pharmaceuticals are a little bit more sophisticated than a chemical in terms of what's required. So maybe there's a slight preference there for GMM Pfaudler. But generally, I wouldn't say there's a significant difference in terms of what we can do versus competition. The only thing that I would point out here is our glass is obviously something that we've kind of developed over the last 50, 60, 70 years. It's a technology and a formula that has been developed over a long, long period of time. And maybe some of the competitors that are trying to, you know, compete with us, maybe don't have that level of sophistication in their technology. Get that. Thank you. And just to sort of take that into context, when we look at the financials filed by one of our competitors who's likely to IPO, they seem to have done better over the last 2-3 years compared to the two listed players in the space. Anything that you would like to call out as in terms of the market itself or in terms of course correction that we would have had done post what has happened in the last 2-3 years? I mean, I would not like to comment on somebody else's, but I know what the market is and the two listed competitors, you know, what kind of numbers. So it's very unlikely that a third player would be significantly different than the rest of us, because, he's catering to the same customers, he's dealing with the same people and the same pricing, right? So obviously, everybody has their own agenda when it comes to their business outlook. You know, I can't comment on that. But the reality is there is definitely a slowdown in the chemical market, which has impacted volumes and in turn, of course, impacted margins. We've been a little bit better off than most people because we have a diversified portfolio. We have two-thirds of our businesses coming from the international market, which is a little bit more protected than the Indian market. And lastly, we have about 30% of our revenues coming from services, which is sticky and high margin, right? So I think we are definitely in a better situation than the other companies that you might talk about. But I really don't want to comment on anybody else's filing and stuff like that. But I would just recommend people to do their own homework and check the numbers, because mostly numbers are quite easily available, and you can check all these things in the public domain. Got that, sir. Thank you very much for your answer. Thank you. Thank you. Next question is from the line of Shyam Maheshwari from Aditya Birla Mutual Fund. Please go ahead. Yeah. Hi, hi, Tarak and team, and, congratulations on a decent set of numbers in this, challenging environment. Had a couple of questions. Firstly, on the systems business, this has seen quite a bit of upturn. If you look at the order inflows numbers, particularly in this quarter, we got about INR 200 crores of inflows in systems versus INR 70 crores last year. So is there any one-off or big order that we have kind of booked in this quarter in the systems business? Yeah. So let me give you some color on Systems. Systems has really been a good business line for us in the last maybe two quarters. In Q4 of last year, we got about $10-$12 million of a Systems order in the US. We got a repeat or another US order, again, in the range of $10 million, and we expect another $10-$15 million of more Systems orders now from Europe as well, that is expected. So Systems has definitely been an area where we have done quite well. We also got another order here in India for about 23 odd crores, again, a Systems business from a company in Bangalore. So yes, Systems has definitely helped us make up for some of the shortfall that we saw in glass lining. Systems, again, keep in mind, it's, it's a consolidation of many of our product lines, but again, the customers give us a system business because they believe that we have the capability to design and also help them with process engineering, right? So hopefully, the margin profiles of a system business are a little bit more than just equipment, and we expect the systems business over time to grow. And again, as we differentiate the technology that we have and the internal IP that we have around these processes, will help us win some of these systems business. One more point to add in systems is many of the customers do their trials with us. So we have test centers where we work with customers for six months, nine months. We kind of work with their process, and then you have the tie-in. So eventually, when they decide to go ahead with this ordering, they would then order it from us because they've done that kind of work with us. So systems is definitely an area we want to continue to focus on. In India as well, and maybe Aseem can jump in, we have now created a much larger organization for systems. We've kind of brought in people who are more process-oriented. Maybe, Aseem, you want to just jump in and talk a little bit about systems and what you're doing here for some of these new technologies like green chemistry, flow, et cetera? Yeah, Shyam, hi. Look, systems is an important platform for us. We've talked about it. I think I'd like to first address the nature of the systems business inherently is a little lumpy because the ticket sizes are bigger. And, you know, that's what you've seen in our numbers. Usually, they were in our pipeline. It just took a little longer to, you know, to close. And, you know, but Tarak talked about the big orders that have come. Now, as we are continuing to focus on the systems business, we recognize that we need to further enhance our capability to serve our customers' requirements. So when you move from being a solely equipment supplier to a solution provider, you need to have a much better understanding of the process. So we have invested both in our people capability by hiring additional process experts in various domains, as well as the physical capability with our test center in Karamsad, which is now, you know, fully operational. So people can actually come and do a whole range of tests in GMM so that they get a lot more confidence in the outcome that they can get from the products and solutions that they buy from us. So we'll continue to develop this, and, you know, in a similar fashion... I talked about India, but in a similar fashion, the international business also continues to invest in the systems category. Interesting. And could you just elaborate a little bit more on the kind of solutions you're providing? So I remember Acid Recovery was one such thing, which was getting captured in Systems. But these recent orders, if you could give a little bit more color onto what exactly solution is this addressing? Yeah. So I'll say, I'll start first, and then maybe I'll request Vince to give an explanation of what the recent, our orders are. So in systems, we are very particular that we have some domain expertise in the solutions we provide. So we've talked about acid recovery in the past, where the center of excellence is in Germany. We have, solid li- sorry, liquid-liquid separation sort of, solutions that come out of our North American operations based on the wiped film evaporation, capability we have there. And then we also have membrane separation systems that, come out of our Italian subsidiary, Hydro Air. In addition, there are a whole range of reaction systems that we do in Europe as well as in India and actually in North America as well. Now, maybe, Vince, you could talk a little bit about the recent order. Yes, so we got some orders in the U.S., on the range of $10 million in Q1. It was in the pharma sector, medical device, but we are in different applications. We will see some, I mean, we have a nice pipeline coming in for Q2, where we are in different industries, like energetics, like recovery, because we are in the recycling business of solvent recovery, for example, and with fermentation. So in many different sectors and industries, they need that kind of a system, and the pipeline is quite strong at the moment. And we feel that system, as Tarak said, can compensate the shortfall of the last time. Understood. Thanks, Thomas. And just a follow-up to this. So, does the design capability lie with us, or is it the customers, and then we would just probably engineer possible solutions? No. So in the case of about 90% of systems, we would design the entire suite for them. There are certain customers who want it a certain way, and we will give you the kind of overarching design, but then you still have to do the P&ID, the piping, the instrumentation, the automation. And at the end of the day, some of the cases, we also take process guarantee. So we have to give you so much output of so much product at this kind of quality or percentage by volume or whatever it is. So whenever we do that, then obviously your entire margin profile changes because you're moving up the value chain, and you're giving a customer solutions. And then that is, you know, that's where we want to be. In most cases, I think we have a situation where we are designing for the customer, and we have our own internal engineering team, as well as process team, who does this engineering in-house. Understood. Understood. Okay, thanks. Thanks, Tarak and team, for answering the questions, and all the best. Thank you. Next follow-up question is from the line of Bhavik Shah from MK Ventures. Please go ahead. ... Yeah, hello. Thanks for the follow-up. So question is, so what is our capacity in India and in the international operations, and how do we look at our capacity? Like, what metric do you use, and what will be our capacity utilization in Q1 versus Q4? Good question. I don't think we have exact numbers, but I think for a manufacturing company of our size, I think 80%, if you're at about 80% utilization, you're pretty good. That's where we would like to be. Today, we would be around in India, maybe 55%-60%. I would say maybe in Europe, a little bit more in Europe and the US. China has been slow for us, so China would be a bit less. China doesn't seem to have too much expansion coming in the chemical space right now, so China is a bit slow. But generally, in India, we are probably around 55%-60% utilization. However, our heavy engineering plant is 100% utilized, right? So we would be close to 90%-100% utilized there. But yeah, that was the basic capacity. Right. So we don't need any capacity, say, going ahead for next at least one or two years, if this is the understanding is correct? That's right. So I think Manish clarified earlier. We don't anticipate any growth CapEx. We have no growth CapEx this year, nor do we anticipate any significant growth CapEx in the year come after. We could even be in a positioning where we could look at, you know, if we have, let's say, too much capacity in a specific platform or a product line, we can obviously use that capacity for something else as well. So that's what we are always trying to do, to see if something else picks up, can we kind of give that product line which is growing faster a little bit more realistic, which means that we have to kind of make sure that we have the right team and people to make sure that we can cater to that specific product. And we've done that already, right? When we've seen a slowdown in glass-lined, we used some of the capacity there to cater to some of the other product lines as well. Right, sir. So, there basically, there's a possibility of, say, capacity utilization improving and operating leverage playing out and thus your margins improving? Yes, that's, that's exactly what we are alluding to. Yes. And maybe here would be a good time to also mention that we are going through a cost efficiency improvement program in our India manufacturing setup, and that's ongoing. That started maybe a few weeks ago, and hopefully that will also see savings both in terms of cost structure, procurement, value engineering and things like that at a manufacturing level as well. And that would be a 9-12-month process that we're planning. So hopefully that will also help us improve capacity, but also reduce cost and improve efficiency as well. Right. So like, what, like, do you aspire to like be at 15% in say one or two years? Like, that's where your aspirations are? Sorry, what was the question again? I missed that. Sorry. Our margin aspirations are, say, let's say, 15% in coming 1-2 years. Like, if the capacity utilization picks up, where actually aspire to be? Yes, capacity utilization should lead to some, like, 2-3% addition to the bottom line. That is something that we should. So you will see, I think you are somewhat in the ballpark. I think you have a good kind of idea in terms where we should be. We as management obviously feel that we should be a little bit more aggressive with targets. And like I mentioned, in the next few months, you will see a document that comes from the company to the capital market in terms of what our strategies are, how do we deal with our focus on chemical and pharma, how do we kind of diversify away from pharmaceutical, from glass-lined, what are the new opportunities available to us? Where is the growth gonna come from? Because, you know, one of the things that we did learn from this cycle, this down cycle, is that obviously as a company, we are focused only on an industry which obviously is very cyclical. So, you know, as management, we do believe to put the company in a much better standing, much more comfortable, situation. We would like the company to have a much wider industry range that it can cater to, right? And that's what we're really working on. And some of the other industries that we're looking at are growing much faster than chemical and pharma as well. So all these things are things that we are working on. We have to get through this tough period of one year, which I think we will. We are already in a good situation. Order backlogs looks good, order intake is a bit better than before. Glassline is a bit slow, but we all know what needs to be done. I think we're working internally, like I said, and, you know, obviously, you won't see a lot of, you know, crazy numbers from us for the next few quarters. But then we do expect in a year or two years from now, you will see a company that is much more, I would say, stable in terms of revenue and, profitability, and that's the idea of what we are trying to do. Got it, sir. Got it. Waiting for investor day, and, sir, all the best. Thank you. Thank you. Next follow-up question is from the line of Sagar Shah from Spark Capital. Please go ahead. Sir, just a couple of questions. Thank you for the follow-up. Just one for one point on debt, actually. You have released a BSE notification that you have applied for an extension of lease for one of your subsidiaries. You have also basically there is also modification of lease to increase your LC facility by up to EUR 5 million and also EUR 40 million for again new facilities from the existing vendors. So, basically, currently, on the debt level, actually, as we are not looking for any further CapEx also, and, as far as I know, that we are not looking for further acquisitions also. So, what is the reason behind the debt? Initially, we had guided for a reduction in debt, in fact, for in this year, for around INR 100 crore on the long-term debt. Any color on the debt outlook, sir, for this year? ... Sure. So let me give you some broad level cover. So this is basically a refinancing that, so our financing package is being rolled over. This financing package was ending in 2026. We have now rolled it up to 2028. The banks are very happy with the company's performance and hence have agreed to roll it over. Further, they have given us an additional EUR 90 million for acquisitions as and when we need them. There are no current acquisitions that we have in mind, but as a company, and I think I need to correct you there, we do and we will look at acquisition opportunities, as and when they arise. Because for a company of our size and scale and the diversification that we're looking for, we will have to look at new opportunities in new industry segments, and that will only come through acquisitions, right? So, that is the thought process. This line will be available till, August twenty. August 2028. It is part of the refinancing and the rollover that we have inherited, and that's pretty much business as usual. Manish. Sure. So, a couple of things here, just to add to what Tarak mentioned. You know, broadly, it ends at somewhere August 26, 2026 and all that, so we have good 24 months from now. But 12 months from now, technically it will fall under a current liability. So therefore, you know, from a qualification perspective, we need to be a bit more proactive to make sure that, you know, from a qualification perspective, the non-current remains under the non-current bucket. So therefore, we had to do that, you know, well in advance to make sure, you know, our balance sheets are in good shape from that perspective. The second one is one of the bankers, international bankers, you know, out of his own, you know, issues and all that, they wanted to have a different, you know, they didn't want it to have extended credit and all that. And we wanted to have relationships, you know, the banking relationships starting initiating from India. So therefore, an Indian bank, wherein, you know, where we have good old relationships here in India, has been nominated into the consortium so that it helps us into a better deals in future as well. Okay. So, in FY 25, the long-term debt will remain stable, or will we see increase in debt in the next few months, the long-term debt? So, like, as I mentioned, we do not have any aspirations to have growth CapEx in current financial year or in the upcoming, next financial year as well. So therefore, we do not need any debt for that. For the M&A part, I think Tarak already mentioned, so I need not repeat on that. There's nothing lined up in the future, and I don't expect anything to close probably in this financial year. But the credit line that we have is already approved, so tomorrow, when we do find some, it's something that we can draw down at any given point in time, right? It gives us flexibility, and as a company, like we mentioned, you know, obviously there is something eventually that we might want to do, and we need to be ready for that. Okay. Sure, sir. So my last question was related to mixing. As you said, 80% of our revenues came in this quarter of mixing. So the, that translates around INR 200 crore of revenue. So basically, did we see a decline in, revenues for even in mixing, business in this particular quarter, YOY? Or, and, in this year, are we, as compared to $42 million USD, are we see, can we see growth in the, in the industrial mixing business even in FY 2024, or will we see a decline in that business? No, we will be, we may not have declined YOY. I will not have specific numbers thereon ready in my sleeves at this point of time. But, as I mentioned, long term, we are looking for growth. Quarter on quarter may not exactly fall in line with that 25% growth aspiration that Tarak mentioned earlier. Okay. Okay. Sure, sir. Thank you so much, and all the best, sir. Thank you. Thank you. Thank you. Ladies and gentlemen, that was the last question for the day. I would now like to hand the conference over to the management of GMM Pfaudler Limited for their closing comments. Thank you, Yusuf. Thank you everyone for joining us today. It was a pleasure interacting with you, and we look forward to many such interactions during the course of the year. Take care and see you soon. Thank you. Thank you very much. On behalf of GMM Pfaudler Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.