Ladies and gentlemen, you have been connected to the GMM Pfaudler Limited Q2 FY27 earnings conference call. Please stay connected, the conference will begin shortly. Ladies and gentlemen, good day and welcome to GMM Pfaudler Limited Q2 FY27 earnings conference call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then 0 on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Raveen Kanabar. Thank you, and over to you, sir. Thank you, and good afternoon, ladies and gentlemen. A very warm welcome to all of you into the Q2 and H1 FY27 earnings call of GMM Pfaudler Limited. The earnings presentation was uploaded on the stock exchanges yesterday and is also available on our website. Hope all of you had a chance to go through it. From the management today, we have with us our managing director, Mr. Tarak Patel, our group CEO, Mr. Gregory Gelhaus, our group CFO, Mr. Ankit Nayyar, our company secretary, Mr. Mihir Manohar. 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. contains 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 will now hand over the call to Mr. Tarak Patel, our MD, to provide you with an overview of the performance. Over to you, Tarak. Thank you, Raveen. Good afternoon, everyone, and thank you for joining us to discuss our Q2 and H1 FY27 results. Before we begin, I would like to wish everyone a very happy and prosperous Diwali. May the festive season bring happiness and success to you and your families. I am pleased to report that GMM Pfaudler continued to demonstrate strong business momentum during the quarter. We recorded the highest ever quarterly order inflow in the company's history crossing ₹1,000 crores for the consecutive quarters and reaching ₹1,200 crores with strong India order intake of about ₹483 crores. Also being the highest ever and more than double sequentially. This reflects the strength of our technology, customer relationships, and market positioning. The performance was broad-based with all 4 business divisions contributing to order growth. These orders are coming from investments being made in pharmaceuticals, especially in CDMO, peptides, petrochemicals, fertilizers, defense, energy. While the external environment remains challenging in certain markets, our diversified portfolio, strong order pipeline, and established technology capabilities provide a solid foundation for growth. On sustainability, I'm pleased to share that CRISIL has awarded GMM Pfaudler an ESG score of 61 for FY26, placing us in a strong category compared with a score of 50 in FY25. Which was classified as below average. The improvement reflects the progress made in strengthening our ESG framework and integrating responsible business practices across the organization. Restructuring. Let me turn to our broader transformation program. Our objective is to build a globally integrated organization with stronger accountability, simpler decision-making, better resource utilization, and a more competitive cost structure. We have made good progress in moving our 4 divisions towards a more integrated global operating model. This structure allows each division to focus on its business priorities while leveraging the group's technology, resources, and capabilities. An important part of this transformation is addressing structural profitability challenges in certain European operations. Europe's chemical industry is going through a major reset with multiple plant closures and lower investment in new large-scale capacity. These conditions have particularly impacted and affected some of our European operations, where relatively high cost base is becoming difficult to sustain at current business volumes. During H1 FY27, our loss-making European entities reported an EBITDA loss of approximately ₹43 crores, impacting the group's reported profitability. We are addressing these challenges through a restructuring program focused on key priorities: aligning costs with the current business volumes, improving manufacturing efficiency and capacity utilization, and establishing a more competitive European manufacturing footprint. We are progressively shifting our manufacturing activities to Poland, have completed the closure of the UK facility, and have implemented the workforce reduction measures in Germany. Europe continues to remain an important part of our technology and business platform. The objective is to improve its operating model and cost competitiveness while retaining the capabilities critical to our business growth. Greg will provide more details on the execution of these initiatives and the operational improvements underway. At the financial and organizational level, our priorities include rationalizing our fixed costs, refinancing, debt reduction, group tax strategy, and legal and strengthening the balance sheet and simplifying the group structure. During the first half, we have repaid approximately ₹116 crores of net debt. Together, these initiatives are aimed at improving our financial flexibility Coming to our outlook, we remain confident in the underlying strength of our business. Our core operations continue to benefit from healthy demand and strong order inflows across divisions and geographies. For FY27, we expect revenue growth, double-digit growth supported by momentum across our business divisions, and the reported EBITDA margin of about 10-11%, including the loss-making entities. Most of our loss-making entities' adjusted EBITDA margins are at 14-15%. To put it simpler terms, 80% of our business is operating at EBITDA margins of 14-15%. This adjusted margin guidance reflects the underlying earnings potential of our core business while recognizing the near-term impact of the European restructuring program. Our focus remains on delivering the growth, improving profitability, strengthening cash generation while building a more efficient and globally integrated organization. Before I hand over to Greg, I would like to acknowledge the contributions of Mr. Thomas Kehl, CEO International Business, and Mr. Alexander Poempner, Group CFO. We thank them for their contributions to the company and wish them both the very best for their future endeavors. I would also like to welcome Ankit as part of the leadership team as Group CFO. With that, let me hand over to Greg, who will provide an update on business performance and take you through the operational restructuring program in greater detail. Thank you. Thank you, Tarak. Good afternoon, everyone. I wish you also a very happy Diwali and a prosperous new year. As Tarak mentioned, we delivered strong revenue and order growth in Q2, building on the encouraging start to the year. Business momentum remains healthy across our 4 divisions. Our consolidated order backlog stands at a record high of ₹2,446 crores, up 14% year-on-year, providing good visibility for the second half of FY27. Order intake grew by 17% year-on-year on H1 FY27, with non-traditional industries contributing 44% of the quarter's orders, with India also recording a highest-ever order intake of ₹483 crores and being more than double sequentially. Driven by large orders in our HET business. This reflects the progress we are making in diversifying our revenue base and reducing our dependence on traditional end markets. We are also seeing the benefits of our global operating structure through improved accountability, closer coordination, and better alignment across divisions. Our focus is now on converting this commercial momentum into consistent execution, improved margins, and stronger cash generation. I would like to now focus on our European restructuring program. As Tarak mentioned, certain European entities have been weighing on group profitability. Our priority is to bring the cost base in line with current business volumes, improve operational productivity, and establish a more competitive manufacturing footprint. These measures are intended to create a leaner operating structure while maintaining the quality, technical capabilities, and customer service standards required by our business. The focus is to improve productivity and ensuring that our cost structure is aligned with business requirements. A key part of our restructuring is the progressive transfer of selected manufacturing activities to Poland. Poland offers a more competitive cost environment and provides an opportunity to develop a scalable manufacturing base for our European operations. This will allow us to improve manufacturing economics, optimize capacity utilization, and better align production costs with customer requirements. Over time, we expect Europe to have a rationalized operating model with India and Poland being used as low-cost manufacturing hubs. While used to retain its strategic technology and business capabilities. The transition is being implemented in a phased manner with due consideration to quality, operational continuity, and customer commitments. Our restructuring program focuses on consolidating our European manufacturing footprint. We have closed our UK facility and implemented the workforce reduction plan in Germany. The European restructuring program is ongoing. As these operations— across these operations, our objective is consistent: address structural losses, reduce fixed costs, improve capacity utilization, and establish a more competitive operating model. These actions are necessary to reduce the drag from loss-making entities and improve the quality of the group's earnings. We expect FY28 to be an important year for the benefits of our transformation program. The expected improvements are across 5 key areas. Number one, 4 global divisions are fully established, clear ownership of growth and profitability, in each business. The second is reduced European drag, where the restructuring benefits begin to show up in group margins. The third is our group, overall group initiatives, which gain traction, cost efficiencies, and a greater use of low-cost manufacturing sites to support profitability. Number 4, stronger earnings conversion with lower financing costs from our refinancing and debt reduction programs and a simpler legal and tax structure. And number 5, a strong order book, including the record backlog that we carry, which carries us with momentum into FY28. We expect the benefits of these initiatives to start to come in from FY28 onwards. The transfer structural exercise aimed at addressing the underlying issues in our operations rather than providing short-term relief. With strong order momentum across our divisions and a more competitive operating model taking shape, we believe GMM Pfaudler is positioning itself for improved profitability and sustainable growth. Overall, we remain confident in the long-term potential of the group and the progress that we are making. With that, I would like to hand over to Ankit to take you through our financial performance and the factors impacting profit. Profitability and in the first half of our fiscal year. Ankit. Thank you, Greg. Good afternoon, everyone. Let me also wish you all a very happy and prosperous Diwali. As discussed, we continue to see encouraging business momentum. flows and healthy revenue conversion. Alongside this, we are making progress on our operational and financial transformation initiatives. Let me now take you through our financial performance for the quarter and first half of FY27. Order intake during the quarter was a record ₹1,198 crores, up 36% year-on-year and 19% on a sequential basis. This reflects healthy demand across our technology portfolio. Order intake during the half year was a record high of ₹2,204 crores, up 17% year on year. Consolidated revenue for the quarter stood at ₹1,065 crores, growing 18% year-on-year and 15% on a sequential basis. For H1 FY27, revenue stood at ₹1,989 crores, representing a growth of 17% year-on-year. This performance reflects healthy order inflows and continued conversion of our order backlog into revenue. Moving to EBITDA performance and margins, EBITDA for the quarter stood at ₹110 crores on a sequential basis, improving by 18%. which was supported by across our businesses. Reported profitability continues to be impacted by certain loss-making entities within the group. Excluding these loss-making entities, Q2 EBITDA would have been about ₹139 crores. A margin of 15.9% compared with the reported margin of 10.3%. For H1 FY27, reported EBITDA stood at ₹204 crores. So A margin of 10.2%. Excluding the loss-making entities, H1 EBITDA was about ₹247 crores, a margin of 15.2%. This reflects the underlying strength of our core business and the improvement in operating performance across the group. While the loss-making entities and certain transformation-related costs costs continue to impact reported profitability. We remain focused on addressing these challenges through cost optimization, operational efficiencies, and broader restructuring program. We expect the benefits of these initiatives to become increasingly visible towards the end of FY27. With the fuller impact accruing from FY28 onwards. Our gross margins in the quarter have reduced because of the impact of loss-making entities, which Greg spoke about. And we are making restructuring efforts towards them, and we were still able to improve our EBITDA margins on account of operating leverage on top-line growth. Which demonstrates the strength of our business. Profit after tax for the quarter stood at ₹35 crores compared with ₹38 crores in the corresponding period last year and 59% sequentially. For H1 FY27 reported PAT stood at ₹57 crores, up 20% year on year with a margin of 2.9%, which has already surpassed the FY26 full-year profit. Improving the conversion of EBITDA to PAT remains an important, important financial priority. We are working on improving operating profitability reducing finance costs and optimizing our overall capital structure. Alongside operational improvements, we are progressing with several important financial initiatives. Our priorities are focused on 3 key areas. One, group-wide refinancing and debt reduction. We have made good progress on our group-wide refinancing program with the objective of strengthening our capital structure. Improving financial flexibility and reducing During H1 FY27, we, we repaid approximately ₹116 crores of net debt, and we remain focused on improving cash generation and managing working capital with discipline. As the refinancing program progresses, we expect lower finance costs and reduced foreign exchange volatility, which should support improved earnings and greater predictability in our financial performance. Strengthening our balance sheet remains a key priority. We continue to focus on debt management, cash flow generation, and disciplined working capital management. Group strategy and legal entity simplification is another important objective. We have made good progress with our group-wide tax strategy and legal entity simplification initiatives as shared in the last quarter. The objective is to create a more efficient group structure, optimize tax arrangements across jurisdictions, and simplify the management of our international operations. We are on track on these initiatives timelines, which will also help in streamlining intercompany transactions, improve tax efficiencies, and support better capital allocation across the group. We are also pleased to report that CRISIL has maintained our credit rating at AA- with a stable outlook. Collectively, these initiatives are expected to improve our financial flexibility, reducing finance costs and strengthening the group's overall financial position. Moving on to the performance of our business divisions, let me take you through the 4 divisions. Corrosion-resistant tech— Technology revenue of ₹500 crores during the quarter, flat year-on-year and up 7% sequentially. Order intake stood at ₹556 crores, up 11% sequentially and up 15% year on year. For H1 FY27, revenue stood at ₹966 crores, representing growth of 5% year on year. While order intake was ₹1,058 crores, up 19% year on year. Moving to PPT, uh, the division reported revenue of ₹331 crores, growing 30% sequentially and 34% year on year. Order intake stood at ₹364 crores, which is flat Q-on-Q and up 85% year-on-year. For H1 FY27, revenue for PPT was ₹586 crores, representing growth of 29% year on year, while order intake stood at ₹731 crores, up 74% year on year. HET reported revenue of ₹92 crores, growing 24% sequentially and 38% year on year. Order intake during the quarter stood at ₹201 crores, which is up 248% Uh, on a sequential basis and 254% year on year. For H1 FY27, revenue was ₹165 crores, representing growth of 17% year on year, while order intake stood at ₹258 crores. Up 306% year on year. PST reported revenues of ₹142 crores, growing 8% sequentially and 57% year on year. For H1 FY27, revenue stood at ₹273 crores, representing a growth of 51% year on year. Order intake was ₹157 crores for the first half, including ₹77 crores in Q2. To summarize, while reported profitability continues to be impacted by certain loss-making entities and transformation-related costs, our adjusted margins demonstrate the underlying strength of the business. Our focus remains on improving operating performance, executing the restructuring program, reducing debt, and strengthening the group's financial position. We believe the combination of improved operational efficiency, financial restructuring, and disciplined capital allocation will support stronger earnings and sustainable value creation over the medium term. And we remain confident of delivering our FY27 guidance. Thank you. With that, I hand Hello. Thank you, Ankit. Anil. We may now open the line for questions. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment. While the question queue assembles. The first question comes from the line of Sameer Thakur from Ambit Private Limited. Please go ahead. Okay, thanks. I hope I'm audible. Yes, go ahead. Yes, sir. Great. Okay, thanks. Yeah, the first question is, uh, what are the cost savings targets which you have for European restructuring? Uh, any target which you have in mind for the margins and all? And what would be the restructuring cost for this? Will that be taken this year or next year? So any color on that will be useful. So I think a couple of points here. We've mentioned that some of the restructuring work has already been initiated and completed. So of course, uh, the big cost was the UK shutdown, which is now done. And then last year we already had all the costs taken in our Germany restructuring, the 40+ employees that have been reduced. So that impact will start showing up in H2 of this year and then fully for the next year as well. There are other costs that we have also looked at in Europe. You would have seen that as part of our transition and reorganization, we now do not have a position of CEO International, and we obviously have a group-level CFO, which is unpaid. So that cost structure will also be saved. We are currently also reducing and restructuring our Swiss operations as well, and that plan is under implementation as well. So some of those benefits we will see in the next financial year. We don't expect any large additional cost on the count of restructuring in Europe. The big one which was related to the German restructuring has already been accounted for and fully in last year's numbers. So we don't see most of the benefits will start rolling up. We don't see any major restructuring costs attached with this new restructuring program. Okay, uh, that's helpful. Uh, the second question is on heavy engineering, very strong growth here. It seems like you are taking market share, if I'm not wrong, and What end markets you are seeing more traction, whether it's petrochemical, thermal, nuclear, and also any export opportunities here, or it's mostly domestic? Any color on that? for us is our work in the nuclear sector. So the work that we have done with the Nuclear Power Corporation of India, uh, with Megha Engineering, those are 2 areas that we believe will continue to be growth areas for us. Now with the new, uh, 5 new nuclear reactors planned, you know, L&T and, um, some other Indian companies have now been approved, and that's work will start as well, and then eventually there will be private participation as well in this nuclear space. So we are quite bullish on nuclear. We want to continue growing our market share in this area. And, you know, because of the earlier work that we have done with them through HDO, the company that we acquired, we already have a good footing in that industry as well. Lastly, on the thermal power side as well, we have now broken up into this sector as well, which we believe will be an important sector for growth. Sure. So like you rightly said, um, the heavy engineering business has done exceedingly well, not only last quarter, but the order intake has continued into this quarter as well. Uh, there was a large order from Africa that we received, which was basically spread over 2 industries: oil and gas, petrochemicals, and fertilizer as well. What has also been quite successful We have received orders now for LP heaters and SP heaters, again both critical to thermal power. Not many people in India qualify for these equipment, and we finally made a breakthrough. So nuclear and thermal power will remain a very important part of our growth story going forward for heavy engineering. Okay, thank you. That's helpful. On the margins, the gross margins were lower than at least my expectations. Was it fair to assume that gross margins in the backlog could be better than what we see in the P&L. Any comment— commentary on that would be useful. Yeah, so I think before I hand over to Ankit and then to Greg to talk about this, I would also just maybe take you back a little, maybe 6-7 months. So the backlog that we are eating into now right now obviously came at a time when the markets were obviously a lot softer, demand was slower, and hopefully going forward the backlog that we have in our hands today is obviously more profitable, right? You already see an improvement here in India in glass line prices. I think across the world you see some of that, and then the operating leverage kicking in with the volumes now, uh, being much, much higher. The Indian factory, of course, is full. Heavy engineering is booked out till Q2 of next year. Our glass line business in India has really recovered well, and we expect the next half to be quite strong with more order intake and more shipment. Means we— some of these initiatives like, you know, the cost reduction programs of Shikhar. If we have more volumes, we get much better benefit, right? So we will see some of that flowing through, and we believe that there is a possibility of upside when it comes to some of these, uh, you know, uh, the operating kind of leverage that we will get. Uh, maybe I'll hand it over to Ankit now. Maybe you can talk a little bit on gross margins and what you're seeing there. Yeah, so I called it out my speech as well that gross margins were impacted by the loss-making entities in Europe. But what we see, as Tarik mentioned, this will improve over H2. We are confident that we'll come back to the gross margins that we have delivered over the last few years. So as we are moving ahead, uh, and as we are seeing— as we are seeing good pricing that is happening because of market coming back. We are confident that we will come back to the levels seen in the past. Okay, thank you. That's helpful. If, uh, one more question I can squeeze in, uh, I'm sorry to interrupt you, sir. We may request that you return to the question queue for follow-up questions. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants, please limit your questions to 2 per participant. The next question comes from the line of Kunal Mehta from InCred Equities. Please go ahead. Hi, very good afternoon, Tarak and team, and congrats on these amazing set of numbers and record order backlog and intake. My first question is regarding that, uh, backlog and what are the margins that we have, you know, considered for the newer order intake that has happened in the last 2 quarters. And also, if you can provide some color on, you know, are we getting more orders from the peptide side? And any sense on the defense asset recovery system that you got last year, are we expecting more orders in, you know, the new emerging themes like defense or data centers, best and semiconductors? You can provide some color. Yeah, um, yeah, so let me start off in terms of, uh, the backlog. Like I said, again, we have strong backlog across all our divisions, so it's been really encouraging to see backlog improving across all divisions and geographies. This is critical for our success because it means that we are not seeing it in sports, we are seeing it across businesses, right? So not only in India but across the US, South America, Europe, we will have full of factories. the order backlog stands at, you know, 2,400, and just wanted to understand what is the execution timeline for the at least, uh, I mean, we won't lose money. And then next year, definitely, I think we will be in a position to, uh, make money in Germany, right? So we are going from negative to positive just because volumes are coming back, and that's already in our backlog. It's not something that we are expecting. We recently won another large glass line order just yesterday in Italy in the tune of $5 million. So things are improving. There is some kind of investment coming back. And again, let me talk about the major areas that we are focusing on, you know, as a company. I think the biggest one for us today is pharmaceuticals, right? Because if you look at CRT and PPT, both these verticals are heavily dependent on pharmaceuticals, and the order intake and the backlog that is being built today is because of the investment in pharmaceuticals. And when we talk about pharmaceuticals, we're talking about CDMO and peptides. And you mentioned peptides, and peptides has been a fantastic success stories for us. We've received already from Indian customers in maybe the last 6 months or so, maybe close to ₹150 crores worth of business orders from just peptides, right? I spoke about Germany and the restructuring there. We expect H2 to be So this is only peptides. I was in Hyderabad on Friday to meet the owner of another Hyderabad company who has plans to invest huge amounts to just invest in the peptides and the manufacturing of peptides, right? So peptides is going to be seeing a lot of investments. We are well positioned because we have technology which has been supplied to and has been tested in Europe with companies like Uh, the backend for many, many, many years. We have installations now in India up and running with global major API, you know, pharma companies. So it's not like we don't have credibility. So people know us for peptides now, and this is definitely an area that we're trying to push on. So pharma CDMO peptides is a massive, massive investment that is happening, and we're trying to piggyback on most of that. Not only in India but across the world. The other industries for us, again, like I mentioned, nuclear and thermal power continues to be another strong area for growth. So heavy engineering is focused on that. We are building capabilities, expertise. We've broken into— we've got new, um, you know, acquisitions in place. And now we are also seeing the export business in AGT pick up. So the Middle East and Africa, like I said, is now adding to the backlog. as well. So the export chunk is now becoming better. Uh, European, you know, I spoke about Europe being tough, but there is one sector in Europe that is doing quite well, and that's defense. And again, we have technology that we are catering to defense, right? So Europe has not built a TNT plant since the 1980s. We are seeing now that our products and our technology is going into NATO-sponsored projects. for TNT, for nitrocellulose, and that is something that we believe will continue over the next few, uh, quarters because we see the inquiries coming in, right? So that's on basically, um, the defense. In the US, again, we have semiconductors as a growth area because Edelon has high purity systems and tanks. for fab and also for semiconductors or chemicals, right? So again, another growth area for us. And then lastly, we talk about our PBT business of mixing. We have critical minerals, metals and minerals, as another growth area because people are spending money on rare earths, on minerals going into data centers, into AI, right? So as a company, we're trying to see, hey, what are the 5 or 6 growth areas that are really investing What technologies do we have as a group that we can cater to these technologies and really drive that growth, right? So the focus that the verticals bring in now will kind of allow us to really jump onto some of these growth cycles very quickly, like we have done with peptides, right? We could have sat back and said, fine, we were happy with the first peptide order. But no, we said this is something that they're doing well. Let's really be proactive here and really try and double down and grow this business exponentially, right? So these are the multiple themes that we are playing out. And again, like I said, If you asked us 5 years ago, 80-90% of our business came from chemical pharma and from glass line. Today we are a global diversified engineering company. And that's what we are striving to become. Of course, there is some pain as we go through some of the cleaning up, some of the restructuring. It's part of the process. And the last thing that I would just like to mention is that also from a control perspective today, with the leadership team now realigned and reorganized, we have control over some of these initiatives and we're able to drive some of these programs with much more kind of aggression. that we need to do. And I think that's something that you will see throughout this conference call, the next few quarters as well, and eventually when we come to the market with our Investor Day, a lot of the will be, you know, a lot of the kind of discussion and the details will be around some of these cost structures changing over the next few quarters and how India and some of the low-cost manufacturing becomes part of the global supply chain, right? Uh, so that's where we are. And, uh, yeah. Yeah, thanks, Saif. That was great clarity on the end segment. My second question is on, you know, this interesting slide that you had put up in the presentation for the restructuring of Europe. Where UK facility was actually already closed in FY25. But are we still facing some EBITDA loss there because I think we have shut down the equipment manufacturing over there and it's just basically services now? So, uh, I'm just kind of surprised how that is still contributing to the EBITDA loss. So when we say Europe, uh, it is the larger continent, right? So in UK, obviously the restructuring was 2 years back and it's a profit-making entity now. This is all driven by Germany, which obviously we restructured last year, and we would be hopefully breaking even in the next few quarters. Okay, so basically Germany and Swiss, that is, uh, and, and how fast can we, uh, you know, switch the operations to Poland? Because Poland is emerging as a uh, you know, uh, one of the hotspots for Europe, uh, in Europe for manufacturing. So current— what is the current capacity of the Poland manufacturing unit and what is the planned expansion you know, uh, in the next 2 years over there? Yeah, so, so no doubt, to your point, Poland is a key strategic priority for us. As I mentioned earlier during my opening remarks, we are really pushing that. We have already a, a lot of activity that's moving to Poland, uh, even, uh, in these— this first half of year. We're expanding the facility. At the moment. We expect that expansion to, to really come, uh, into the business, uh, at the end of this fiscal year, start of next fiscal year, where we can start to really benefit from that extra capacity in Poland. And in parallel, as we mentioned during our opening remarks, we are moving very quickly to realize cost reductions in Western Europe and moving our operational activities to Poland where it makes sense. But at the same time, as we said, we're very careful in doing that. We have customer commitments. We want to maintain our very strong quality and customer service. So it is a phased approach, but to your point, it is something that we're working very, very hard on to realize quickly. So with this said, can we expect significant improvement in margins from FY28 onwards? Yeah, so maybe, Ankit, you want to comment on margin improvement here? Yeah, so, uh, and your question is related to the European operations? No, overall margins. Yeah, overall margins, see, as we have called out earlier, the objective or our endeavor is to show growth on a quarter-to-quarter basis. So if you look at Q1 versus Q2, there is an improvement. The objective is to keep growing. The second half of the year, as Tarik mentioned earlier, we'll see some of the savings coming in specifically for Germany and the other initiatives that have been taken. So we're confident we'll see that sequential growth on a quarter-to-quarter basis on 1%. Okay, thank you so much. And I would just like to especially mention the, uh, you know, improved communication. I'm sorry to interrupt you, sir. We may request that you return to the question queue for follow-up questions. The next question comes from the line of Sagar Shah from Spark PWM. Please go ahead. Yeah, uh, thanks for the opportunity. Uh, first of all, uh, happy Diwali to the entire team actually of GMM Pfaudler. Uh, sir, uh, my first question was, uh, to Greg as well as Tarak, actually, uh, related to our glass lining business, corrosion-resistant business, actually, because we have seen The domestic chemical companies actually especially, uh, giving out good numbers, especially in the Q1, as well as, uh, very encouraging, uh, even commentary in Q2 FY27. So, uh, I wanted to check from your end that, uh, is the— are you getting some sort of sense in terms of new CapEx done by the chemical companies and that can lead to an order, good order intake actually, especially in our CRT business because it is flat, uh, on a YOY basis. That's why I'm asking. That is my first question. I'll follow up with the second question to Ankit, actually. Sure. So on the CRT front, again, chemicals still remain subdued. We see spurts of chemicals and mainly specialty chemicals, agrochemicals. Unfortunately, there has not been any kind of major revival, so it's still quite slow. If chemicals were to improve, that would be really bonus. So we're not building any kind of numbers, any kind of plans around the big revival in chemicals. Um, and maybe I'll also maybe add here that the CRT business around the world is improving, right? And again, majority of that is still led by pharma. I know US, again, pharma investment in CGMO peptides, companies like Tamerex are investing. Uh, in South America, we've had large glass line orders again coming from CGMO. We've seen our China, uh, order intake in glass line actually improve, which way we thought China would be tough place for us, but we've seen the China factory will now have a full factory because suddenly China is buying more glass line reactors. And again, driven not really by chemical— there is some chemical in there, but again, it's pharma. Again, CGMO is adding capacity in China. And in India, if you see over the last maybe 2 quarters, it's really mainly pharma, right? And Hyderabad Pharma, uh, Dingli's, MSA, SciLife, um, you know, these companies continue to add, right? So that's the normal kind of behavior in India. And from whatever we speak to, uh, owners and management of these companies, they have plans at least for the next few quarters, right? So it continues to be a very exciting time. And then along with the CDMO play, we have this peptide play that is coming back online, and that's really bringing in a lot of investment. Okay, fine, got your point. So basically our demand will be largely led by pharmaceuticals/CDMO and other inherent sectors within the pharma. Yeah, okay. Uh, my second question was to Ankit actually. Uh, actually in this particular quarter as well, uh, our tax rate was relatively lower actually, and that led to Uh, the QOQ uptake, actually the tax rate was around 30% and last quarter it was 45%. So as part of our restructuring program as well Uh, I wanted to understand what, what will be our stable tax rate at least for FY27 and FY28. And second, uh, related to that was our finance cost. We have actually reduced our debt by ₹116 crores. No, but in the, in this H1 FY27. So now, uh, as part of this, and what is the further plan to, for reducing the debt since we are FTA positive? And what will be the net reduction in finance costs due to the same in FY27 and FY28? These, these are my questions for Ankit. Yeah, so on, on debt, what I can say is, uh, so these are 2 programs that we called out in Q1, right? One is tax restructuring and one is the refinancing. On the tax restructuring, we have made good progress, uh, and some of these initiatives have now started to show some color in financials. We have communicated timeline in terms of, uh, when these initiatives would kick in completely. In terms of guidance on taxes, as we had called out the last time, our endeavor is to be at 30% or lower, and that is what we are targeting. So you'll see improvements quarter on quarter as we make progress on these initiatives. Uh, on the debt front, uh, although we, we paid debt, uh, if you look at the quarter-on-quarter basis, there was some forex exchange, forex impact that happened. Uh, but we expect the interest cost to be lower than last year, uh, and, uh, that is where we are at the point. So, uh, sorry, I didn't get your point. So what will be the reduction in the finance cost? I'm sorry to interrupt you, sir. We may request that you return to the question queue for follow-up questions. Maybe we can just finish this one. Yeah, I think the question was that just can you repeat on the finance cost and how it's going to impact this year and then again next year? I think that was the question. Yeah, so So as I said, there would be a reduction in finance cost because some of these initiatives that we are taking will help in removing some of the inefficiencies we have on the finance cost. Also, we have given timelines last quarter in terms of when we want to do it, uh, but we are seeing good progress on both these initiatives, and, uh, and we'll keep sharing as we progress on these initiatives. Thank you. The next question comes from the line of Nikhil Kanoria from Sunidhi Securities. Please go ahead. Yeah, hi, good afternoon. Am I audible? Yes, sir. Yeah, firstly, I would like to congratulate the entire team for posting such a high order inflow. So my question is regarding the slides that you have given on PPT. So on page number 21, while you have given some plans as to how you're gonna do, uh, look at the conversion of EBIT to PAT. So just wanted to check what will be the priority over there, uh, and what could be the delta from each step that you have mentioned over there. And on this next slide, the way you have given outlook for '27, if you can guide us some— if you can throw some color on FY28 numbers as well on a top line growth, EBITDA, and what sort of savings can be done from these 3 or 4 strategies that we are going to deploy. So yeah, so before, uh, before you answer this, let me also— so the company today, you should think about, about in terms of improvement, there are 2 improvements, right? So Um, I would also just— maybe Greg can say a few words here. We are talking about gross margin to EBITDA improvement, so that's one play that we would like to kind of highlight and speak about, and that's why we also shared with the investor community, the loss-making entities, because we want to be transparent and we want to also show you how we are planning to improve and make these changes over the next few quarters, right? So calling it out is good from the perspective now it can be tracked. And, you know, we are also in terms of— we'll come back to you every quarter to see what improvements we have made. So the gross margin, we already start at the industry-leading gross margin of about 60%. So we're already starting at a very high point. We have good technology, we have good brand, we have good loyalty and good customers. So that is a very heartening kind of a number to start with. So we have room there. To kind of reduce our cost structure, to improve efficiency, to really improve gross margin, to EBITDA as well. And then like Ankit spoke about, we have a lever between EBITDA and PAT as well that we are working on, right? So all these projects are ongoing. Like Amit said, the refinancing, the restructuring, we've given some timelines, but we expect to be much faster on that. You know, we have progressed quite well and we will keep you posted on that. But before I hand over, maybe you want to say a few words on gross margin to Riddha, and then maybe I'm just going to take over from it. Yeah, I think in line with what we announced after the Q1 earnings, uh, the new organization structure is, is no doubt helping us to improve from gross margin to EBITDA. I think, you know, as we discussed, we moved from a regional organizational structure to now 4 global technology divisions. And also when you think about it, we moved in terms of really aligning our support teams around those divisions. So with that brings a lot of opportunity to streamline operations to make productivity improvements, and really, while obviously still making sure we continue to strengthen and improve our strong customer service. But there in our new structure lies opportunities to improve from gross margin to EBITDA. Yeah, on the EBITDA to PAT, uh, the 2 initiatives, just to give some direction, uh, last year EBITDA was around 49%, right? So if you bring it down to 30% or lower, you can very rightly see how much would be the savings there on FY26 basis. From a financial perspective, if you have looked at our FY26 numbers, there have been certain notional losses that we see because of our current debt structure, our intercompany loans, and that is what we are trying to do. Once we are able to do that, uh, hopefully some of these notional losses will not happen and we will have clean finance costs that will be reported. So those would be the 2 additions that will happen to the PAT once these 2 initiatives kick in. Okay, so the thing is, see, uh, my question was about, uh, EBITDA to PAT. So I understand that the gross margin trajectory is still visible, and then it's heartening to see that it is at the industry-leading level. What I meant from the question is that you have given 3 levers about tax, about then refinancing and all of those things. And since these are long-term kind of a thing, like, uh, say 1 year to 2 years or maybe beyond that as well, so what can we, uh, build in, say, for FY27, FY28, some trajectory? Because I understand that from 49% to 30%, it will be a huge saving, but this will not happen overnight. So say, for example, uh, X percentage this year, X percentage that year. So maybe, uh, we can have a structured, uh, way as to how it is get— getting fizzled out. Uh, so that is what I was looking at. As I said earlier, the guidance has been given on both, uh, tax and refinance tax. Obviously you will see improvements year on year. Uh, last year it was 49. You'll see some improvement this year, and hopefully by FY28, uh, we'll be in the ballpark range of what we have been targeting, right? And already finance cost, like I said, it will keep coming down, uh, as the debt— I mean, as we look at capital allocation, as we have better cash flows, the endeavor would be to reduce debt, uh, and that is what we have done in order to Okay, so maybe, uh, the way you have given for FY27, if you can throw some light on FY28, uh, numbers as well, like as to what can we expect. And, uh, though this might be a little early, but, uh, if you Sorry to interrupt you, sir. We may request that you return to the question queue for follow-up questions as there are several participants waiting for their turn. The next question comes from the line of Anil Shah from Insightful Investments. Please go ahead. Yeah, hi, am I audible? Yes, sir. Yeah, yeah, just, just trying to understand a little bit more if on your— if you could be a little bit more granular on your restructuring. If I've understood right below the line item which is likely to come through, and most of the work has been done. So how exactly are we going to restructure, and how do we really see aggregate margins on the EBITDA side for the whole company as such moving? And you've talked about better margins in '28, but even if you could say, you know, exit quarter, let's say for '27, or the first quarter of '28 or the full year of '28, what could margins be? Because I, I'm sorry, but I really need a little more granularity on what exactly are we doing with restructuring for these businesses. Uh, you are saying the business scale of operations in some of these, some of these businesses in Europe and some of the plants is low, but at the same time you've, you're mentioning that there's not going to be any extraordinary cost The bigger restructuring costs are behind us, right? Germany was a big restructuring we did last year. Then we, when we spoke about the Swiss restructuring, these are not major restructuring costs. There would be some of them, but those would not be very material. And, uh, as, as, as you know, that the demand in Europe has not been as per expectations, so the business model is now being driven to a place where it caters to the current reality. So that is what we're trying to do. We are trying to convert our businesses in these European loss-making entities to the current business reality. I've understood the tax part. Sure, sure. So I think, I think we have and we will provide clarity for sure. We will give you more clarity Uh, as we have, uh, the numbers firmed up. Again, like I said, the Investor Day is planned shortly in the coming months, so obviously we would like to come with a clear plan. But maybe, Amit, you can just talk about in terms of how we see the levers moving and how they impact, or how would they impact, and in terms of any restructuring costs for this. Yeah, so like, like we mentioned earlier Yes, I understood that part, but to do it without incremental cost in terms of, you know, getting rid of the extra people, uh, and at the same time not telling me or not telling us exactly in terms of, you know, how margins because of this cost bill. Obviously, the idea is to bring these losses down substantially and hence the overall margins improve because the rest of the company's margins already seem to be at 15-16%. So I'm still not able to get clarity or understanding as to how we plan to do this. I fully understand that business operations there are not at the optimum level, but obviously the costs are at higher level. How do we plan to bring the cost down? Yeah, so I think some of these things have already been materialized. So there are laws in certain areas where you can reduce people to a certain number without having any kind of incremental restructuring costs. So we are doing that within those limits. These are not very large factories where we need to reduce 40-50 people, right? So for example, our Swiss entity is 30 people, but it's super expensive. So even restructuring 8, 9, 10 people is a significant cost benefit for us. So even though it does seem like large restructuring in terms of actual quantity of people, people, it's not that large, right? Plus you've also seen the reorganization of the top management team, so that's going to save us a good amount of money as well. Uh, so that is something that's built into— it's already gone, it's gone in pretty much H1. You'll see some of it kind of the end of Q2, and then obviously for next year we won't have any of it, right? The German cost as well already done. We haven't seen any real benefit in these 2 quarters. You'll see some in Q3. More in Q4, but you will really see a lot more in Q1 of next year, right? Uh, so that's where we are. In some cases also, the cost structure is not justified because the orders have not come in. But in some cases the orders are now coming in. So you will have also orders coming which will obviously fill the gap and have full factories, which means obviously you have better operating leverage. So it's a combination of multiple things. That will improve. But just to clarify here, it is not far off to say as a company a 15% core business EBITDA margin is not something that is crazy, right? This is definitely achievable even in a down cycle. We are showing some of the strong entities. You see India numbers already, we are at 13-14%. And it's not been a great half year in terms of shipment. H2 is going to be definitely stronger. So you see India margins also improve with, you know, better operating leverage, better cost coming in, economies of scale. So all that stuff will also happen. Sure. So Tarak, can we go ahead and, you know, think of 12.5% to 13% aggregate margins for next year, given, you know, given what you just talked about as far as the European operations are concerned, that some people will be let go some businesses already being coming in, in, you know, both ways. So overall, should we think of 12.5% to 13% margins for next year? So instead of giving you a number, that is, you know, uh, I would say wait, wait a couple of months. The Investor Day is happening. We have a lot of data. You've seen over the last couple of quarters how we like to share more and more information with the streets. We want to be transparent. We will break this up to you and give you exactly what we mean, how much savings will come from restructuring, how much is going to come from operating leverage, how much is going to come from other stuff. So just bear with us, uh, you are in the right direction. It will improve. We are working quite hard to get to those levels. We also, you know, when we— of course, you know, we do— we are conservative, and I think we will do better than what we promised, and that's the goal. And of course, you know, we have a lot of stuff going on, and I think some of the other Uh, you know, initiatives that Ankit spoke about, we are really pushing them to kind of close faster than we planned. So we will see improvement there as well. So just bear with us, we hear you, I know what you're asking. I know that what you're asking is not completely, um, off in terms of, you know, from your perspective, but just give us some time. We'll do it in a nice structured manner. We are coming— most of the investor deck is ready now. We're just putting our final touches. Uh, we have also seen a couple of changes in terms of the organization over the last few months. Uh, the new vertical setup is also— we are learning. So we just need a little bit of time, um, and we will come back to the market. Sure. Okay, thanks. All the best. Thank you. Yep. Thank you. The next question comes from the line of Avirat Sharma from Fin Avenue Growth Fund. Please go ahead. Hi, Tarak sir. Congratulations on the great order intake this quarter. I just wanted to understand, uh, what exactly are we doing on the defense side and like some orders we got last year or so. What's the pipeline like in defense for this year and The next. So we do a couple of things for defense. So we obviously have acid concentration plants. So both nitric acid and sulfuric acid are highly corrosive acids that do quite well in glass line and tantalum construction. And most TNT manufacturing plants or nitrocellulose plants propellants will need a large amount of nitric acid and sulfuric acid. So that's where we kind of get in there. We are responsible for building the acid recovery part of this defense establishment. But which is a large part of it, right? So for example, the large order that we got from Bulgaria, close to $30 million, that's really a lot of technology. A lot of kind of know-how that goes into it. People will not give you an order of $30 million, a European NATO-sponsored order, if you don't have the capabilities, right? It is really solid technology that we have there, and that's why we got that business. Similarly, we're talking to a few other companies in Europe for the same kind of acid recovery concentration plant, which goes into producing TNT nitrocellulose. Like I said, Europe has not built a new plant since the 1980s, and I think they buy most of their explosives from China. So I think onshoring is something that, of course, I think they're planning. And I think that maybe the US could be another opportunity in the future as well, because there I think the stocks are depleting as well. So I think that could be a nice area for us to kind of also maybe focus on for the future. So, sir, and also coming to the peptide side, how big do you think is the opportunity, especially in India, as well as all of the peptide CapEx coming globally? What What do you think, uh, is like a quantity you can capture there? So if you get me started on peptides, I can talk for hours, but I think it's a, it's a once in a generation drug, right? So I think what we are seeing is only the tip of the iceberg. I think from everything that I— people that I speak to, doctors that I talk to, I mean, even in Bombay here, my doctor says that Mounjaro is flowing like water, right? So every person over the age of 45, man or woman, coming in they're going to be on GLP-1s or peptides, right? So do I know the answer? I know that maybe there's one company in China that does 100,000 tons, right? Maybe India is half of that. Is that, you know, how much is global capacity? I probably think there's a shortage and I know that nobody else can put it up as fast as India and China. We expect European companies to add that kind of peptide capacity. It's going to take them 4 or 5 years before they get something up and running, right? So I think India has an advantage in terms of speed. I know how quickly we supplied the last batch of, you know, peptide reactors. So I know speed and timing is critical for success in peptides, and even the new projects that we are discussing, speed is again going to be quite critical. So peptides is going to be— and again, peptides is not only GLP-1s, it's, you know, skincare, shampoo, food, everything. So I think there's a lot of benefit. You know, longevity now, people are talking about even vaccines and cancer vaccines and stuff. So peptides, I think, has a strong life. Okay, and one, one last question if I could squeeze. So I have a question on the Eglon business. What's the, uh, you know, addressable market you're catering to there and what is the opportunity size, not exactly in the quantum but broadly what's the opportunity size there and what, what kind of growth we could see there in the Eglon business? So look, for Eglon, it has several end markets that it's catering to. I mean, we've talked about nuclear already. We've talked about They also have defense as well, applications. They are working in semiconductor space where we're seeing a lot of activity, and they also have the traditional chemical space as well. So Eglon is part of our growth ambition that we have. We are seeing a lot of growth, particularly in US. for the Eglon business in all of those areas I mentioned. And so that remains quite a big focus. Obviously, it's part of the CRT technology division, and they're in the work putting a lot of emphasis on making sure that we're growing. We have, uh, opened up a, a new facility there in the US to cater towards the existing demand but also future demand that we believe will, will be coming. In the, uh, over the coming quarters and years. Yeah, so I think that's what I would add to what Greg said, that even though, you know, you think about, um, Eglon and most people know Eglon for high purity systems for the semiconductor industries, they also do a lot of work within the nuclear space, which is driving growth for them. They do these, uh, linings for these glove boxes. They do some work for defense as well. So again, some of these things are, you know, we have now with the focus and each CEO having the autonomy to drive his own or her own strategies, there is definitely— for sure, for the first time we have brought in somebody as the head of Eglon, a recent hire in the last quarter who comes from with 26 years of industry experience, right? So that's going to be another, you know, kind of a positive for us to have somebody with a strategic mindset to really see where can Eglon be, not just, you know, in 6 months, but really 2 to 3 years down the line? Can it double, triple, right? Can it go global? Can we bring some of those technologies back to India? And really target the next growth of semiconductor here in India, which we all know about, right? So all that work is going on, and with the CEOs in place now, with that focus and accountability, you'll see a lot more strategic kind of direction at the vertical divisional level. exceptional items and everything. Great one from the team. Thanks. Yeah, so it's good to get good feedback as well. I think we met with maybe 60-70 investors over the last quarter. We'll keep meeting if there are areas that we can provide more transparency, we would be happy to do so. Again, we're open book, there's nothing to hide. So I think, uh, you know, we do want to be a little bit more proactive when it comes to information so that you guys can track it and also sometimes maybe hold us accountable for some of these things. things that we are planning to do. So, uh, happy to hear that and happy to continue sharing. Absolutely, sir. Congrats. Thank you. Understood, sir. Thanks, thanks. And also, uh, good on the team that we're disclosing so much information, uh, and how we plan to, uh, you know, be clear of the Due to time constraints, we will take the last question from the line of Saurabh Patwa from Quest Investment Management. Please go ahead. Thanks a lot for the opportunity, sir, uh, and, uh, great perspectives shared on the— during the call. Uh, so just wanted to, uh, so we, we have a coming out from last 3 very difficult years Uh, how do you see— so while you have highlighted a lot of these things, uh, while answering some of the questions which you just did, uh, how do you see the next 3 years? especially in the context of changing product mix? And what could be the margin profile both at gross and EBITDA level for the new lines that you— new product lines which you have added in last 2-3 years? Uh, and also what kind of cycles there are, like how much these will be, like say like the order book would be, uh, you know Or are they like— some of these are like more longish from that perspective. So yeah, so this was from the perspective of adding capabilities given these kind of the new businesses which we are now embarking on? Yeah, maybe I'll let— yeah, go ahead. Sorry, go ahead. Yeah, yeah. And secondly, uh, is there any scope of, uh, acquisition which you think would— you may still need to add, uh, I would like to buy a peptide company, but no, uh, no, uh, jokes aside, from an acquisition perspective, there's no plan right now. There's a lot of work happen, but at the same time we keep seeing, meeting, talking. So that's an ongoing process. Again, it's an acquisition, has to make sense. It has to make sense from the perspective of growth. It has to bring growth and high profitability. The last thing we want is to buy a company where we have to restructure and then worry about growth, right? So it should make a lot of sense. And we've been through a phase where we acquired companies, we've learned our lessons. Some have worked out well, some have not. So we know what exactly to look for, uh, and that's something that probably will be driven completely out of India with Greg, myself, Ankit, and maybe the CEOs kind of be responsible, right? So no, no, no plans as of now, but again, like all good companies we continue to meet. Uh, in terms of where this company can be maybe in 3 years, I think maybe you've heard me a lot, so maybe it would be nice to get a perspective from Greg and Ankit. They've come I mean, Ankit's the most newest person here, but let him kind of tell you what he's seen and, you know, what he expects, and maybe then Greg can just close out. Yeah. So from, from a long-term perspective, I think the company is at the cusp of a transition, and the company used to operate in a different manner 3 years back. To your point right now, with the group structure and with the new CEOs, we see a lot of opportunity, uh, and I think hopefully the market stays or improves, we'll see more growth. So the objective is to lay down a structure which helps us to grow over the next few years. What I can talk about is what I've seen, and I've been here for around 5-6 months. The energy of the organization is very good. Everybody is working towards a common objective. We are market leaders in a lot of categories. There is customer stickiness, uh, customers like us, and now we are trying to make this more robust in terms of how we want to go ahead. So a lot of work is happening and we keep, uh, sharing things, and that is what we have been trying to do. Like Tarak said, we are being a little more proactive in terms of sharing things and holding ourselves accountable on a lot of things. So, uh, our endeavor is to keep showing progress on a quarter-to-quarter basis as we move ahead. And on the product mix, uh, changing, impacting the margin profiles, the growth, and at both an EBITDA level? So as, as, as you're aware, our strategy is diversification, right? We were a glass line company especially catering to pharma and chemical. You have seen the progress on the non-traditional sectors. This will continue to grow because, uh, the 3 businesses where we need to grow much faster, which is PPTA, GT, PST, you'll see much more growth. So our share in the non-traditional sectors will keep growing up, uh, and, and over a period of time, our dependency on chemicals and pharma will keep reducing. That we have seen in the past. Yeah, and maybe, yeah, maybe just to add from my side. Yeah, that goes up. Yeah, I was gonna say, just maybe from my side, and just to echo what Ankit said, I think there is a, you know, there is a tremendous energy that we have together as a management team. There is very sharp focus on what are the priorities. You're seeing that in what we've shown in Q1 and now Q2 with more information that you're being provided. You know, as I mentioned in Q1, but also in Q2, I do believe that the new organization setup that we have, which, you know, if you take, take, as you said, the The last 3 years, particularly with the chemical downturn, that's been a challenge. But out of, obviously, challenges come opportunities, and we see a great opportunity now. With the new structure, the new alignment across the businesses globally, and the fact that we can really take that momentum, and you're seeing it in the initiatives that we're talking about. And so we look forward to continuing to improve the business day over day, quarter over quarter, and we'll keep sharing with you that progress along the way. Thank you. Ladies and gentlemen, we will take this as the last question for today. I now hand over to Mr. Raveen Kanabar for closing comments. Over to you, sir. Thank you, Alan. Thank you everyone for joining us today. It was a pleasure interacting with all of you, and we look forward to many such interactions during the course of the year. Take care and see you soon. Thank you. On behalf of GMM Pfaudler Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.