Ladies and gentlemen, good day and welcome to Q1 FY26 earnings conference call of Elecon Engineering Company Limited. As a reminder, all participant lines will be in the listener 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. Please note that this conference is being recorded. Please note that this conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations the company has on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. I now hand the conference over to Mr. Mayank Bhandari from Asian Market Securities. Thank you and over to you, sir. Good evening, everyone. On behalf of Asian Market Securities, we welcome you all for the 1Q FY26 conference call of Elecon Engineering [audio distortion]. I take this opportunity to welcome the management of Elecon Engineering, presented by Mr. Kamlesh Shah, Group CFO, Mr. Narasimhan Raghunathan, CFO, along with their team. Now, I request Kamlesh Shah to take us through the overview of the company quarterly results, and then we shall begin with the Q&A session. Over to you, [Kamlesh]. Good evening and very warm welcome to everyone on our Q1 FY26 earnings conference call. I am joined today by my colleagues, Mr. M.M. Nanda, Head of Gear Division, Mr. Dipak Dalwadi, Gear Division Designate, Mr. Kaushik Patel, Head of MHE Division, and Mr. Narasimhan Raghunathan, CFO. The press release and investor presentation have been uploaded on the stock exchanges, as well as our company website. I hope everyone has had the opportunity to go through the session. To begin with, I will provide a brief macro-level overview of the prevailing business environment, followed by a detailed review of our financial performance, which Mr. Narkshiman, our CFO, will take you through. Elecon Engineering is a leading manufacturer of industrial gear solutions and material handling equipment, recognized for its innovation, superior quality, and dependable performance. Serving a broad spectrum of industries, including steel, cement, sugar, power, and marine, we are dedicated to delivering customized, best-in-class solutions that drive operational efficiency and growth. As one of Asia's largest suppliers of industrial gear solutions, Elecon holds a leadership position in India's organized gear market. Our global footprint spans approximately 95 countries, supported by a robust distribution network and long-standing relationships with key industry players. In line with our strategic vision, we aim to increase the sale of exports to 50% of total revenue by FY30. This ambitious global expansion is powered by our strong R&D capabilities, continuous investment in product innovation, and strategic partnerships with OEM partnerships across the international market. Our business is anchored by two divisions: industrial gears and material handling equipment, each playing a distinct role in shaping our overall performance. The Gear Division, which contributed approximately 73% to our consolidated revenues in Q1, delivers a steady performance during the quarter, with a growth of 6% in revenue on a year-on-year basis. The momentum shows some softness in Q1 is due to, in terms of product deliveries, especially in Middle East markets. We have also seen some impact of geopolitical volatility in some overseas markets during the quarter. Having said that, we do not foresee any material impact on the business from a full-year perspective. We have shown our resilience in FY25 also, where we have overcome comparatively more muted momentum in the beginning of the year, but we ended on a very strong note. Compared to last year, the demand momentum currently is relatively better. We have received robust orders during the quarter and are encouraged by the sustained inquiry levels, which bodes well for future ordering flows. The division is well-positioned to build on this momentum, supported by improving market sentiment and ongoing capital investment across key industries. Along with steady momentum in the steel and cement sectors, we are seeing very strong growth coming from the power sector this year. In Q4 FY25, we capitalized on a new manufacturing facility in the [Gear Division]. While this marks a significant step towards enhancing our capacity and long-term growth, it has had a short-term impact on margins in Q1. This is due to accelerated depreciation without corresponding revenue contribution from the new facility. As we ramp up production and begin generating revenue from this new capacity, we expect the margin in the Gear Division to return to normalized levels. Coming to the MHE Division, we continue to deliver consistent robust performance. On a reported basis, revenue has increased by 139% YoY. This includes a one-time amount of around INR 250 crore from arbitration claim settlement of previous contracts, which we have recognized as revenue in Q1. Even after adjusting this amount, our revenue has nearly doubled on a YoY basis in this quarter. Our strong performance is supported by a healthy order book, driven largely by sustained demand from the power and cement sectors. We are also witnessing an increasing order visibility in the steel segment, reflecting broader industrial momentum. MHE Division continues to demonstrate a strong growth trajectory, driven by the successful execution of our strategic initiatives, increasing market demand, and our proven capabilities to deliver customized solutions across diverse industries. Looking ahead, we remain confident in the division's continued momentum, supported by a healthy order book and robust demand outlook across these sectors. All in all, the current order backlog and momentum of the order inflows across both our divisions provide a strong foundation and visibility for healthy growth in the coming quarters. Elecon remains strongly focused on executing its long-term growth strategy. We are actively diversifying our business portfolio and expanding our presence across new sectors and international markets. Our wide-ranging product portfolio, backed by strong in-house R&D and engineering capabilities, continues to differentiate us in the industry. Our ability to deliver customized, high-quality solutions positions us well to meet the evolving and complex needs of our customers. The MHE is on a robust upward trajectory and emerging as a key growth driver for Elecon. In the Gear Division, inquiry level remains encouraging. We are seeing consistent demand from both domestic and international markets. Although there are some geopolitical headwinds in some of the overseas markets, the traction is quite steady on an overall basis. We are seeing a positive outlook in the defense industry and expecting to receive orders in the later part of this year. We take pride in the way we have executed and delivered in the last year. During the challenging macroeconomic environment in the earlier part, we displayed great resilience and discipline. As the external environment improved, Elecon saw its ability to capitalize on the same, and we ended FY2025 on a very strong footing. Looking ahead, the order inflow momentum continues to be consistent. Together with the current order backlog, it provides a good foundation and visibility for sustained momentum and growth in the coming quarter. With this, I would like to hand over the call to Mr. Narasimhan, our CFO, for financial highlights for Q1 FY2026. Over to you, Narasimhan. Thank you, sir. Good evening, everyone. A very warm welcome to our Q1 FY26 earnings call. I will now take you through the highlights of our financial performance for the quarter ended 30th June, 2025. We are pleased to report a resilient performance for Q1 FY26. For the quarter ended June 2025, our consolidated revenue from operations stood at INR 491 crore compared to INR 392 crore in Q1 FY25, reflecting a healthy growth of 25% on a year-on-year basis. This has been driven largely by strong growth in the domestic business activities across both divisions, which has also been aided by a favorable pace. In the overseas business, we have faced some geopolitical-led headwinds in the Middle East market. Nonetheless, the inquiry levels in most overseas markets remain encouraging. Domestic demand, too, is picking up meaningfully, particularly from core sectors of power, steel, and cement. The consolidated revenue for Q1 FY26 includes INR 25 crore pertaining to arbitration settlement for some of the earlier contracts in the MHE Division, which has been recognized in the current quarter. The domestic market contributed 75% to the consolidated revenue, while the remaining 25% comes from overseas markets. Our domestic revenue in Q1 FY26 stood at INR 367 crors compared to INR 259 crore in Q1 FY25, reflecting a growth of 41.4% on a year-on-year basis. Our overseas revenue in Q1 FY26 stood at INR 124 crore compared to INR 133 crore in Q1 FY25, reflecting a decline of 7% on a year-on-year basis. The order book visibility and continuing inquiry levels keep us optimistic for higher growth in the coming quarters. Our consolidated EBITDA for the quarter was INR 130 crore, up from INR 92 crore in Q1 FY25, representing a growth of 41%. The EBITDA margin for Q1 FY26 stands at 26.6% compared to 23.5% in Q1 FY25. After adjusting the one-time arbitration settlement income, EBITDA for Q1 FY26 would come to INR 105 crore compared to INR 92 crore in Q1 FY25, reflecting a growth of 14% year-on-year. Adjusted EBITDA margin would come to 22.6% versus 23.5% in Q1 FY25. The consolidated EBITDA margin has been impacted by the increased costs in the Gear Division, which was driven by employee costs, together with brand-building initiatives undertaken in the overseas markets. As our recently commissioned capacity ramp-up and benefits from the above initiatives in the overseas markets in terms of revenue start to come in, we expect the margin to return to a normalized level. At a consolidated level, we expect to maintain an EBITDA margin of 24% on a steady state basis. Apart from INR [23] crore recognized in the revenue, we have recognized another INR 10 crore pertaining to the arbitration settlement under other income as well during the quarter. In Q1 FY2026, we have also recognized INR 80 crore as an exceptional income. This pertains to the unreleased mark-to-market on reclassification of our investment in Eimco Elecon (India) Ltd, from associate to a financial asset. The profit after tax for the quarter, including this one-time income, comes to INR 175 crore. Segment-wise performance, the Gear Division accounted for 73% of the total revenue in Q1 FY2026. For the quarter ended June 2025, the gear division's revenue stood at INR 357 crore compared to INR 337 crore in Q1 FY2025, up by 6% year-on-year. The EBIT for the Gear Division stood at INR 66 crore in Q1 FY2026 compared to INR 80 crore in Q1 FY2025. The EBIT margin declined to 18.4% in Q1 FY2026 compared to 23.7% in the same quarter last year, mainly due to the increased increase relating to employee costs and brand-building initiatives undertaken in the overseas market. EBIT margin was also impacted by accelerated depreciation on the new manufacturing facility, while the corresponding revenue has still not come in. The order intake for the quarter was INR 480 crore, reflecting a healthy 21% year-on-year increase. As of 30th June 2025, our open order book stood at INR 710 crore, positioning us for a sustainable growth in the upcoming quarters. The material handling equipment division delivered another outstanding performance in Q1 FY2026, including the arbitration settlement income. The MHE Division's revenue for the quarter was INR 133 crore compared to INR 56 crore in Q1 FY2025, growing by 139% year-on-year. Excluding the one-off income, revenue growth would have been at 93.6%. This growth is driven by a strong demand in both the product supply and the aftermarket segment across the core end-use sectors of power, steel, and cement. The EBIT for MHE stood at INR 61 crore compared to INR 14 crore in Q1 FY2025, reflecting a significant growth. After adjusting for the arbitration income, the EBIT would have grown by 155% year-on-year. The adjusted EBIT margin stood at 27% in Q1 FY2026, up from 25.3% in Q1 FY2025. This was primarily due to a favorable product mix and a higher contribution from the aftermarket business. The order inflow for the quarter stood at INR 134 crore compared to INR 149 crore in Q1 FY25. As of 30th June 2025, the open order book for the MHE Division stood at INR 400 crore, reflecting strong demand and growth prospects. On the balance sheet front, we are pleased to report a strong net cash position of around INR 550 crores, providing us with significant financial flexibility to pursue growth opportunities and maintain operational resilience. Looking ahead, the capital expenditure budget for FY26 to FY28 is INR 400 crores for the next three-year period. On that note, I would like to open the floor for questions you may have. 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 remove yourself from the question queue, you may press star and two. 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 is from the line of Vishal from Bandhan AMC. Please go ahead. Hello. Good evening. Thank you for the opportunity. The first question is on the exports and the international business side. Could you elaborate exactly what happened? What led to the decline in exports of 7% on a year-on-year basis? This was due to some hold of deliveries for the goods in the Middle East because of Israel and Iran war kind of situation, and the delivery will get cleared by in the queue to sometime. How big would have this been? I mean, what would be the approximate quantum? 1/4, INR 14 crore. That's it. Even if I exclude, even if I adjust for this INR 14 crore, we would have still reported a decline in the exports revenue. Yeah, that momentum will come up by Q2, Q3. Are we seeing any weakness in our core geographies, say U.K., Europe, or in any other geographies that we are? In fact, this time, U.K. and Europe both have been in a better way, particularly compared to Q1 last year. Okay. Which are the other geographies that would have been weaker for us? I mean, because you've reported INR 124 crore of exports. Even if I adjust for INR 14 crore, you would have still reported a decline. That is what I'm trying to understand. What I said, one is our INR 14 crore delivery deferred to Q2, as well as some orders are on hold in the Middle East. Okay. The other question is on the order inflow of INR 480 crore in the gear business that you've reported. What portion of these orders would have come from the international side? MHE [audio distortion]? No, for the gear business. Gear business? Yeah. What? 119. Yeah. INR 119 crore is the order from overseas business. What sort of growth on a year-on-year basis? The growth, I should do on what? The The revenue of this quarter plus the future for the rest of the period? I was trying to understand this INR 119 crore of order inflow that you've got from the international business for gears. This is a growth of what percent? Yeah, what, on year-on-year basis? Yeah. Yes, it is 10%. 10% growth. 10% growth. Okay. Last question is on the profitability. You said that higher manpower costs and operational expenses of the new plant have impacted the margins in the gear business. By when do we see normalization of profitability here? I think by the end of the year, we'll sustain our margin, what we already spent on. When you say that we should have 24% margin within for the gear business, we should be about at the same level, 24, 25%? Further, this margin is also because of the change in the product mix also. Generally, my product mix between the engineered product and the standard product is 50/50, 50% plus in the engineered product. For Q1, my revenue from engineered product is 43% and 57% from the standard product. Okay. Generally, you know, if you compare on a quarter-to-quarter, on quarter basis, this change will be there. By the end of the year. It is getting covered up. Indeed. All right. I'll come back in the queue. Thank you. Thanks. Thank you. The next question is from the line of Pratik Kothari from Unique PMS. Please go ahead. Yes. Good afternoon. This Middle East order, the delay, this would be from the international subsidiaries, right? The delay that you spoke about, not from India to exports. Ultimately, it is going from India to Dubai or direct to the customer, as the case may be, depending upon what the order says about the delivery schedules and how the delivery is to be done. The order is from Middle East, and because of this current geopolitical challenges in between Israel and Iran, which also is getting escalating, the customer has put the hold on the delivery for this period, and he is going to get in the queue to sometime. Got it. Of this ROU assets which we had capitalized last year in Q4, everything is now capitalized, and what we see in interest and depreciation is now fully accounted for. Yeah, some part is there. It is of nearly INR 25 crore, which is getting capitalized in this in Q2 sometime. Okay, which will come subsequently. Yeah. Fair enough. Sir, on this arbitration, now all of this past arbitration is behind us? I mean, after this order which we have. Yeah. Whatever we did, whatever we committed, we realized. I think we realized better than that. Yes. We have initiated further two arbitration proceedings, and we are expecting one of them will get the outcome by the end of this year, and another will come in the next year sometime. Okay. We are expecting a INR 20 crore plus in terms of the realization. Got it. Fair enough. Sir, it's INR 400 crore of capex for the next three years, including this one. I mean, some light, where do we intend to spend this? What will be the, where is it? This will be again on the route of ROU, or will we be taking it on a balance sheet? Two questions here. This will be at both the ways because some part will be at our own, and some part we will go with an ROU, kind of because this is more beneficial to us. I see as a long-term benefit to the organization rather than the short term. Got it. Where will this spend be? I mean, this INR 400 crore, how do we intend to spend? That will be over a period of three to four years. What I will spend, some part may come in the fourth year or depend upon this. I understand. My question was, where do we intend to spend? I mean, on what? Is it specific in gear or somewhere in international? 400 crore would be in the Gear Division. Over and above this INR 400 crore, INR 35 crore we are going to spend in the MHE Division also because now the MHE Division is also getting the momentum. The INR 35 crore of MHE will come in this year, whereas the INR 400 crore of Gear Division will be spent over the period of three years. Got it. Got it. Great. Thank you and all the best, sir. Thank you. Thank you. The next question is from the line of Harshit Kapadia from Elara Capital. Please go ahead. Hi, sir. Thank you for the opportunity. Sir, could you give us some update on the domestic business, how it has been growing, and which sectors have contributed to this growth? That's the first question. The growth is coming. If you say the domestic market, we are quite positive and robust about the domestic market because that momentum is continuing, you know, it's for the last couple of years, and that will further continue for the next couple of years also. This year, we are seeing the momentum from steel, cement, and the power sector is also giving the boost to us. Recently, only we got an order for nearly INR 80 crore from the power sector itself. We also are going to see a good momentum, which is going to come in this year from the defense sector also because defense sector, I think we are expecting anything in the queue to a small thing, but the big one we can expect anytime now because everything is being geared up for, and we are quite positive for that. Sir, any tentative size we can say? Will it be like INR 500 crore or so for the defense part, sir? See, we are expecting, you know, close to INR 200 crore this year, and next year, we are expecting a better number, you know, as we go further on that. Understood. By H2, do you think these margins would mainly move towards the 24%- 25% range, or will it start reflecting from Q2 onwards, sir? This will be there from Q2 onwards. You can see that momentum of 24% mark. Okay. Sir, the CapEx which you mentioned, which is largely for the gearboxes, which sector are we going to see more of these gearboxes being specific? If you can share something, is there anything also for the high-speed gearboxes which you are already trying to enter into? If you can give some clarity on that. All our machines are general purpose machines because it is not for the specific line or for the specific sector or for specific customers, unlike in the automobile sector, if it is. This will be for across the sectors and across the applications over there, including for the high-speed gear. We are mainly gearing up ourselves for our export market where we see a good momentum is coming up from the OEM business, and we have to keep ourselves ready for any kind of volume which we are estimated to work for. Okay. Thanks. Sir, last question on the MHE side. You know the margin this quarter has been the highest over the last few quarters. What is a sustainable margin that one can expect? Any number you can suggest for MHE for the full-year basis? What is the number that we can expect? The full year, I think we already spelled out. MHE is expected to generate a revenue of INR 650 crore for this year, that is year ended March 31st, 2026. What we see is that 23% is sustainable margin that we already see. When I say 23%, we are over in a period of next two to three years. Any change in the product mix are improving the, you know, my margin profile. The 23% is a conservative figure, which you know what we say is minimum achievable for us. Any good product mix which are giving a better revenue margin for us in MHE. Okay. Sorry to add one more question, sir. We started also exports business in the MHE. Can you share some update on where are we on that? Are we going to see more traction on the export side for MHE as well, sir? Oh, sure. Yes. As we told last year, we secured one order of export that is $1.4 million, and that has been successfully executed in last year. Yes, we have a focus on export, and we have an ample inquiry from the overseas market. In fact, we are expecting one order in the coming quarter in Q2. That amount is near to $1.8 million. Going forward, export is our focus area, and we are going to create our footprint in the global market as far as MHE business. And sir. Sorry? Go ahead, sir. Go ahead. Yeah, in fact, we are also expecting one good order at least in Q4 of this financial year and quarter one of next financial year. Okay. One of these is near to $12 million. Oh, wow. That's a large order. Our stance on we taking only the product part of MHE and not the complete EPC also stands for exports as well, right? The orders which we are talking of. Yeah. We are going with the same strategy we have adopted since 2017. We are focusing on supplying the equipment and, of course, after sales market. Understood, sir. Okay. Thank you very much, sir. We are very clear business strategy to just go for the supply of equipment only and after sales. Now, we don't want to explore further in turnkey projects anymore. Fair enough, sir. Thank you very much, and wishing you all the best. Thank you. The next question is from the line of Mythili Balakrishnan from Alchemy Capital Management. Please go ahead. Hi. A couple of questions. I wanted to check with you on the OEM partnerships. You had mentioned that last year we had done around INR 60 crore in FY2025. What is the momentum you are seeing in that business currently? That is a momentum which is keeping us busy, and that is the reason we are quite confident, and that is how we are putting our CapEx plan out. I think Nandaji would be the one who can just provide more also. You see, basically, we have supplied some of the prototypes in the past, and then we also started receiving the serial production on this basis. As we projected last year, it was EUR 1.6 million that way. EUR 6 million, we got it against that. You know, going forward also, we are quite a robust situation on that. We expect almost EUR 2 million now. In this Q1, we generated the revenue of EUR 2 million, and by the end of this year, we are confident to generate nearly EUR 7 million of business profits. Got it. Got it. In terms of our guidance of INR 2,650 crore of revenue, this does not include the INR 25 crore odd of arbitration settlement that we have. No, no. It is only revenue, what we have projected, normal business revenue. Got it. In terms of depreciation, if I remember, in the last call, you had mentioned that there should be in a INR 70-INR 75 crore run rate for the full year, FY 2026. Clearly, we are running ahead of that, and it possibly is closer to INR 100 crore. Would that be the right number to look at? For all, as a control driver, the depreciation would be at that level of that size. For this year, my depreciation, by the end of the year, would be nearly INR 90 crore for Gear Division. For the overall company, it will be closer to INR 100 crore, right? Yeah, yeah. 100 and then [five]. Okay. Got that. Also, in terms of the inflows to the MHE Division, it seemed a little weak this quarter. I just wanted to get a sense. Is that some seasonality to the business, or is it anything else to read into that? the MHE, yes, we were expecting certain orders to come in Q1. That has been now coming in Q2. In fact, we already secured a few orders in July itself in the last 10 days. I think whatever gap is generated in Q1 comparing to last year, quarter one, I think that has been covered up now. Going forward, there is a good traction in the MHE business from cement, steel, and power. Got it. Got it. That's all from my side. Thank you. Thanks a lot for this. Thanks. Thank you. The next question is from the line of Raj Shah from Enam AFC. Please go ahead. Am I audible? Yes. Yes. Hi, sir. My first question was regarding the brand-building activities and the increase in employee cost, which led to lower margins in this quarter. If you can explain where this cost was spent, in which areas, and what was the quantum? That amount is spent in Europe mainly, where we are just working more on the digital platform and engaging the service of the consultant over there also for the branding. Employee cost, yes, it is because of the normal increment. Plus, we also increased some employees, which also helps there also. The quantum was, I don't have actual quantum of how much we are spending in this Q1 and what is our target to spend for the full year also. That is as per our plan, what we have spelled out earlier also. Okay. Got it. Another question was on borrowing cost. There was an increase last year. Last year, same quarter, it was INR 2 crore. This year, it was INR 6 crore. I was just trying to get the sense of what it would be for the entire year because as per March 2025 balance sheet, our borrowings have increased. No, it's not the borrowing, but what we have did, as we also discussed earlier at the various forums, we have acquired the machinery, and we did the CapEx under the operating lease. Considering the index as applicable, this is to be divided into two parts. One is on account of the principal amount and the interest portion also, which is called the discounting, based on the discount. Discounting part is getting reflected as a finance cost, and the principal amount is reflected as depreciation also. It's not a borrowing, but it is the division of the lease amount over the period of five years between principal and discounting as per the index standard. Got it. Around INR 25 crore, I guess you said that it is yet to be capitalized, which will be in Q2. Yeah. It will be capitalized in Q2. We just received the machines in June sometime, and it is under installation phase. Got it. Sir, with this new CapEx getting commissioned, what will be our revenue potential? Additional revenue with this INR 300 crore CapEx, what we did over the period of three years, it is going to generate additional INR 500 crore of revenue for us. Okay. Thank you, sir. That answers my question. Thank you, Raj. Thank you. The next question is from the line of Niraj Mansinga from White Pine Investment. Please go ahead. Thank you very much. I just wanted to know one small thing. You talked, you spoke about 11, 12 OEM customers in the past. Can you just give an overall color on? I know you have bought orders on them, but can you give an overall color on these orders? How many are rectifying? How much are still working progress prototypes are seeking? As on today, our number of OEMs are 18, [one eight]. Of which some are under the development, which is there also. Most of them have now started the commercial production also. That is the series production. When do you see this larger scale-up for them happening if the commercial has started? That larger scale will start, you can say, from January 2026 onwards. What can be the run rate? Any thoughts from that? I know it's speculative to some extent, but any color on the range that it can go on per customer basis? I don't know. With the current geopolitical scenarios, which is there in the Western countries as well as the Middle East level as well, and particularly on the western side of Asia, presently, it becomes very challenging for us. This year, we are going to generate INR 70 crore of revenue from these OEMs. If all things get normalized, then I think we are quite sure it will generate INR 100 crore plus of revenue at the potential for us also, at the first phase level, what we say. Going forward, the same will generate more revenue by adding more product portfolio in our basket, and we may also explore the new opportunities from the other OEMs also. Okay, got it. Thank you for the color. Thank you. The next question is from the line of Lakshmin arayan from Tunga Investments. Please go ahead. Thank you. Just a few questions. First is that what is the revenue mix from the past and refurbishment in the gear section? Do you actually offer on-site refurbishment, or do you actually do the refurbishment at your sites at your own location? I think your voice is not clear. Okay, can you just tell us? You're talking about refurbishment? You're talking about refurbishment? Yes. My question is, what percentages of our revenues in gear is actually coming from sales and refurbishment? Do we offer on-site refurbishment, or do you actually bring the gear to your location and do the refurbishment? Yeah. As far as the numbers are concerned, for this quarter, Q1, from our revenue, we have generated 32% from service. CSDM. Service, which includes both breakdown services or spare parts plus refurbishment also. Regarding the on-site and off-site, I think Mr. Nanda, who will just give. See, normally, if we say small adjustments are to be done, we do it at the site. If the major refurbishment is to be done, the gearboxes come to our refurbishment center at Vallabh Vidyanagar in Madurai, actually. That's how we normally work on that. Got it. Do you see a potential of this refurbishment even in international markets? I'm told that refurbishment is a large market, and it is slightly underpenetrated. If my assumption is right, what is your plan on this? It seems to be a large market. Yes, you are right. Refurbishment is a huge market which is there. We already planned last year, and we already have placed one full-fledged service team at the U.S.A. We also are going to explore the same setup in further expanding the setup in Europe also. Got it. Got it. You had mentioned there is a heightened CapEx in sectors like cement, steel, and power. Just want to understand, in particular, domestic market in gears. How long is your capacity booked on these things? Do you actually see it continue for a longer time, which is two to three years, these three or four sectors you actually mentioned? Generally, we get the order which is executable within a period of six months when it is a customized or the engineered product that is there. Booking the order, all the customers know very well about our delivery capabilities. Accordingly, they place the order. We also don't place the order very much in advance. They place the order, and we have a clear visibility for next up to 2027. We have a very clear visibility of the order in play as well as the execution of the order and the revenue visibility because of that. For the domestic sector? Domestic. We have the same clear visibility. In overseas market, considering the just started the pace for the OEM market, we don't know how it will get, it will accelerate and take the largest pace in the market considering the geopolitical scenarios. Got it. Last question from my side. What percentage of revenues are contributed by products where only you have the capability to make and others don't have in your gear division or maybe material handling division? In the Gear Division, if I see more specifically, it is on account of the engineered product where we have very less competition and up to some extent, no competition. Particularly, if you see the capability on account of the defense side, we don't foresee any competition so far in India and domestic markets are concerned. Whatever competition is coming, that is only coming from the overseas market. Got it. Thank you, sir. I will get back in queue. Thank you. Thank you. The next question is from the line of Nirmam from Unique PMS. Please go ahead. Yeah. Sir, on a TV interview, we mentioned you know we can grow for 25% CAGR for the next three years. According to which segments would drive this growth? I mean, we have a lot of businesses. We've added new segments. We're working on new things. What would be the major driver of growth for this 25%? Growth is coming from the overseas market in the gear division. We are also focusing on the overseas market for the MHE division. The MHE division is coming very confidently for its growth trajectory. The overseas market for the OEM, then the gear also, and MHE also, as well as the normal businesses from the gear division, both in domestic as well as the overseas market. Okay, sir. Thank you. Thank you. The next question is from the line of Akash from Dalal and Broacha. Please go ahead. Yeah, thanks for the opportunity. Sir, firstly, I just wanted some clarification on questions asked by earlier participants. Regarding CapEx, I think we were planning around INR 200 crore capex last year, of which INR 150 crore was spent on the P&L. The balance INR 50 crore should reflect in this year's P&L. Plus, how much can we expect in FY2026, the CapEx? Overall, CapEx in FY2026 will not be more than INR 100 crore overall. Okay. You also spoke about the possibility of winning a defense order. That order amount, if you could quantify, did you allude to INR 200 crore for that defense order? There are various opportunities that are there in the defense sectors. What we're seeing in the Q2, we are expecting an order of nearly INR 200 crore. The large order for the P17, the, you know, and now the new version, which is called the P17 Bravo, which we are expecting and which is going to come. Maybe it may come in the Q4 or maybe in the next year sometime. have any ballpark guess on what would be that order value or worth? We are estimating it would be INR 1,000 crore plus order will be there. Okay. All of these defense orders will be executable in more than 12 months, 12 to 18 months kind of a time frame, right? That is. Or even more than that? The INR 200 crore, which I just said, which is which we say will come by Q2 sometime, which will be executed over the period of two years. The big order which we are expecting may be by Q4 or the next year sometime, that will be executable over the period of three years as per the delivery schedules. Understood. You also mentioned about some recent win in the power sector of INR 80 crore. That was on the gear or MHE side? This is on gear side. We are seeing the same momentum also will be there in the MHE also. Understood. Sir, you mentioned about, I think our total export book is around INR 124 crore. Out of that, can you give us a split of how much is overseas and how much is export from India? Yeah. The INR 43 crore is export from India, and the remaining from the overseas business area. Which will be produced or assembled in overseas and will be delivered over there. Understood. Sir, if you could help us with the sector breakups, I mean, which you give every quarter, like how much of revenue this quarter would be from power, cement, steel for the top three, four sectors? I'll forward an email to you, Akash, giving the entire picture of that. No worries, sir. One question from the strategy standpoint. I think last quarter we mentioned that we'll be opening certain assembly centers in the U.S. to enhance our business there. What is the progress on that? Presently, we have worked out an alternative for that to accelerate. Otherwise, I'll put my own entity over there. We have worked out how we will outsource over there by taking at least the marketing efforts from our side, so that we are still waiting about the outcome of the tariff from the U.S., which will help me to become more clear and specific on that. My last question on MHE. Sir, MHE orders we have seen from the last three or four quarters, they have been increasing. This is the first quarter wherein the orders have slightly declined. Also, this quarter we have done such high margins in MHE, approximately almost 33%, even if we exclude the arbitration award. How much is the service component to the business? These two things I'd like to understand. If I give the answer for the first, the quarter-on-quarter comparison of the order flow and the revenue, I think so far our sectors of the company, the sectors in which we are there, it will not be there. Even earlier also, I was talking the same on the various forums. Not to compare us with a quarter-on-quarter basis. That I think will not be the right approach. That's why. The margin is high, is what you said. Yes, this time it is high, but that is a one-off item of the revenue. It's nearly INR 250 crore. If we remove that, our margin profile is 27%. Sir, how much would be the service or replacement component to it? I mean, because of which the margins, that's why. The service component in this quarter is 41% in MHE division. Understood, sir. That's helpful, sir. I'll come back in the queue. Thank you. Thanks. Thank you. The next question is from the line of Mayank Bhandari from Asian Market Securities. Please go ahead. Thank you for the opportunity. Sir, just wanted to understand the MHE business segment performance once again. We have clocked in almost revenue of INR 133 crore, which includes INR 25 crore of arbitration income. Is it? Correct. What is the net margin we have clocked in here in terms of EBIT? In terms of absolute value or in terms of percentage? Percentage. In terms of percentage, 27% in MHE Division we clocked the margin for this quarter. Okay. For the full year, we are guiding how much revenue? What we say, the full year, 23% sustainable margin, because we don't know how the revenue mix will perform over the period of time. We generally have always delivered better margin on that. Okay. On the gears segment, how are we seeing offtake or the orders in the engineered segment, particularly vis-à-vis standard? Is there any mix change in this quarter which is resulting in a very sharp decline in the margin? This quarter, there's a sharp decline in the Gear Division on account of two. One is the product mix. This quarter, we did the standard product sales of 57%, and the engineered product, we did a revenue of 43%. That is one. Second, the impact is on account of accelerated depreciation. Okay. Apart from the depreciation, sir, what is the normal mix or the standard mix we should assume here? Generally, normal mix is the engineered product is 50%+ anytime. It may be between 50%- 55% over there. Once that, I think that will start from Q2 orders. For the engineered products at the floor. The margin will improve from? Yeah, sure. What we say, the yearly margin profile for Gear Division, which is 25%, I think it is achievable for us. Okay, sir. Thank you. Thank you. The next question is from the line of Dibyansu Kumar from Craving Alpha Wealth Fund. Please go ahead. Thank you, sir, for the opportunity. My first question is, how do you see competition evolving in India's industrial markets, especially with the new entrants? Yeah. Competition generally will be there, but you know, whatever, whosoever the new entrants are coming or existing players who are coming out with an additional product profile, however, it is going to be highly engineered products which is required, you know, high skill. Though one can add the new machines and the new technology, absorbing the technology and using the machine at the optimum level also is taking its own time to reach to a certain level. Thank you, sir. My another question is, with India's rising defense CapEx, what's Elecon's target for defense as a percentage of total Gear Division revenue by any future year? In terms of the revenue, we can't execute the project which is coming, which are executable over the period of two to three years or sometimes maybe five years also. We see a good traction is coming in the defense sector, particularly Indian Navy. You might have heard about the recent developments on strengthening the Indian Navy considering the challenges. We see a good traction, and that is also we are betting upon a lot on this defense sector for Indian Navy or defense products. Thank you, sir. Thank you for answering my queries. Thank you. Ladies and gentlemen, due to time constraint, this was the last question for today's conference call. I now hand the conference over to the management for closing comments. Thank you. In closing, I would like to thank you all for joining this call and for your continued support to Elecon Engineering. We are encouraged by the steady momentum across both our Gear and MHE Divisions. Our consistent execution focused on high growth segment and disciplined approach to cost and capital allocation position us well for sustained performance, and we remain confident in our ability to build on this momentum, strengthen our market leadership, and continue delivering the value to all our stakeholders. We will continue to focus on maximizing value for our shareholders. Thank you once again for your participation and trust in Elecon Engineering. If you have any further questions or inquiries, please do not hesitate to reach out to our investor relations advisor SGA or our CFO, Mr. Narasimhan Raghunathan, or Mr. Ashish Jain, our Investor Relations Officer. Thank you. Thank you. On behalf of Elecon Engineering Company Limited, that concludes this conference. Thank you for joining us, and we may now disconnect your lines. Thank you.