Ladies and gentlemen, good day and welcome to the Elecon Engineering Company Limited FY 2026 earnings conference call hosted by Elara Securities India Private Limited. As a reminder, all participant lines will remain 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 the operator by pressing star, then zero on your touch-tone telephone. Please note that this conference is being recorded. I will now hand the conference over to Mr. Harshit Kapadia from Elara Securities India Private Limited for opening remarks. Thank you, and over to you. Good evening, everyone. We welcome you all for the FY 2026 earnings conference call of Elecon Engineering Company Limited. Today, we have with us the management representative, Mr. Dipak Dalwad i, Head of Gear Division, Mr. Kaushik Patel, Head of Material Handling Equipment Division, and Mr. Narasimhan Raghunathan, Chief Financial Officer, along with his team, to give us an earnings outlook. Over to you, sir, to give us an outlook for the Quarter Three conference call. Over to you. Yeah. Thank you, Harshit. Good evening, everyone, and a warm welcome to Elecon Engineering's Q3 and 9M FY 2026 earnings conference call. Joining me today are Mr. Dipak Dalwad i, Head, Gear Division; Mr. Kaushik Patel, Head, MHE Division. The earnings press release and the investor presentation have been filed with the stock exchanges and are also available on our website. I trust you have had the opportunity to review them. I will begin with a brief overview of our business performance, followed by a detailed discussion on the financial results. Elecon Engineering today stands among Asia's leading manufacturers of industrial gear solutions and material handling equipment, built on decades of engineering excellence, deep domain expertise, and trusted customer relationships. Our material handling equipment division is emerging as a powerful growth engine for the company. Backed by over 75 years of experience, the division has unique capabilities to design and manufacture large, complex, and high-capacity equipment such as wagon tipplers, stacker reclaimers, crushers, and specialized conveyor systems. These capabilities are possessed by very few players in India, creating a strong competitive moat for Elecon. Serving sectors such as power, steel, cement, ports, mining, and fertilizers, the MHE business continues to deliver customized high-value solutions that enhance customer efficiency and reliability. In our Gear Di vision, Elecon maintains a leadership position in India's organized industrial gear market. We offer one of the widest and most comprehensive gear portfolios, ranging from heavy-duty gearboxes to precision-engineered components, catering to industries such as steel, cement, sugar, power, and defense. Continuous investments in research and development and infrastructure ensure that innovation, customization, and lifecycle support remain central to our value proposition. With the presence across nearly 95 countries, a strong global distribution network, and long-standing relationships with the customers worldwide, Elecon is well positioned to benefit from the ongoing capital expenditure cycle in India and international markets. With this, I now hand over the call to our Gear Division head, Mr. Dipak Dalwad i, who will walk you through the performance of the Gear Division. Yeah. Thank you, Mr. Narasimhan. The Gear D ivision, which contributed approximately 78% of consolidated revenue in Q3, delivered a largely stable performance with revenue growth of 1.3% year -on- year. Both domestic and overseas businesses demonstrated resilience during the quarter. The muted growth was largely due to timing-related factors, including delays in order inflows during the first half of the year, followed by execution and dispatch deferments arising from customer-driven dispatch schedules. Importantly, the underlying demand environment remains healthy. We are witnessing strong inquiry levels and improving order inflows across domestic and international markets. Market sentiment is gradually improving, supported by ongoing investments in power, steel, cement, and a visible pickup in the sugar segment. With this improving visibility, the Gear D ivision is well positioned to return to a stronger growth trajectory. To conclude the Gear D ivision performance, I now hand over the call to Mr. Kaushik Patel, Head of MHE Division. Thank you, Dipak Ji. The MHE Division continued its strong growth momentum, delivering 16% year-on-year revenue growth during the quarter. This performance was driven by robust demand from power, cement, mining, and port sector, along with steady execution. We remain confident that the MHE business will continue to perform well in FY 2026, and beyond, supported by a healthy order book, a strong project pipeline, and deep customer engagement. With this, I now hand over the call back to Mr. Narasimhan to provide further overview on Elecon's financial performance. Thank you. I will now be walking you through the in-depth financial performance for Q3 and nine FY 2026. financial performance FY 2026. we are pleased to report a resilient and encouraging performance in FY 2026, despite certain short-term challenges. For the quarter-ended December 2025, our consolidated revenue from operations stood at INR 552 crores compared to INR 529 crores in FY 2025, reflecting a year-on-year growth of 4.3%. The gear business reported a largely flat performance during the quarter, primarily impacted by timing-related delays in order receipt and execution, as well as customer-driven dispatch deferments. However, the underlying demand environment remains healthy. We witnessed robust order inflows across both domestic and international markets, supported by sustained inquiry levels, which gives us confidence in future order inflows. The domestic market contributed 76% of the consolidated revenue, while overseas markets accounted for the remaining 24%. The consolidated order intake during FY 2026 stood at INR 701 crores, representing a 7% year-on-year growth. The order inflow, combined with a healthy inquiry pipeline, keeps us optimistic about growth prospects going forward. Consolidated EBITDA for the quarter was INR 109 crores compared to INR 143 crores in FY 2025, translating into an EBITDA margin of 19.8%. Margins were temporarily impacted due to flat revenue performance, higher employee cost, and a change in product mix. We expect margins to normalize as volumes pick up, operating leverage plays out, and the order book converts more rapidly into revenue. Profit after tax for the quarter stood at INR 72 crores, representing a PAT margin of 13%. Performance for nine months ended December 2025. For the nine months ended December 2025, after adjusting for the one-time arbitration of income of INR 25 crores recognized in FY 2026 in the MHE Division, adjusted consolidated revenue stood at INR 1,595 crores compared to INR 1,429 crores in nine FY 2025. adjusted EBITDA for the period was INR 340 crores, with an EBITDA margin of 21.3%. In addition to the INR 25 crores recognized in revenue FY 2026, an additional 10 crores was recorded under other income as part of arbitration settlement. Furthermore, INR 80 crores was recognized as exceptional income below PBT, representing unrealized mark-to-market gains from investment reclassification. As a result, profit after tax for FY 2026, including these one-time items, stood at INR 335 crores. Segment-wise performance, Gear D ivision. The Gear D ivision contributed 78% of total revenue FY 2026. revenue for the quarter stood at INR 429 crores compared to INR 423 crores FY 2025, reflecting a flat year-on-year performance due to the aforementioned reasons. We expect a faster execution of orders to convert into revenue in Q4, which should support improved performance going forward. EBIT for the Gear D ivision stood at INR 78 crores FY 2026 compared to INR 118 crores in Q3 FY 2025. The EBIT margin declined to 18.2% compared to 27.8% in the same quarter last year, primarily due to higher employee cost and product mix. As revenues scale up, we are confident that margins will recover with operating leverage coming into play. Order intake for the quarter was INR 464 crores, and the open order book stood at INR 811 crores as of 31st December 2025, providing strong revenue visibility for the coming quarters. Material Handling Equipment Division. The MHE Division continued its strong growth momentum FY 2026. quarterly revenue stood at INR 123 crores compared to INR 105 crores FY 2025, registering a 16% year-on-year growth. Growth was driven by strong demand in the product supply and aftermarket segments, particularly from the power, cement, fertilizer, and port sectors. EBIT for the division stood at INR 25 crores compared to INR 33 crores in Q3 FY 2025. EBIT margins during the quarter were impacted by product mix. Order intake during the quarter was INR 237 crores compared to INR 185 crores FY 2025. the open order book stood at INR 561 crores as of 31st December 2025, reflecting strong growth prospects ahead. While there have been short-term execution delays in the gear business, the fundamentals of both the divisions remain strong. The temporary mismatch between order intake and execution has impacted near-term revenue recognition. However, our solid order book and execution pipeline provide clear visibility for growth in the coming quarters. On the balance sheet front, we continue to maintain a robust financial position with a strong net cash balance of approximately INR 600 crores, providing significant flexibility to growth opportunities, execute our CapEx plans, and navigate macroeconomic uncertainties. Our CapEx FY 2026 to 2028 is estimated at INR 400 crores, aligned with our long-term strategic priorities. Though our financial nine-month performance remains strong and demonstrates the underlying strength of the business, given the near-term softness, we believe it is prudent to revise our FY 2026. On a FY 2026 revenue may be lower by up to approximately 5%, and adjusted EBITDA margins may be lower by up to approximately 2% compared to our earlier guidance. That said, we remain confident about an improvement beyond the near term, supported by a healthy order book, a robust inquiry pipeline, and improving execution momentum. With that, I would now like to open the floor for questions. Thank you. Thank you. Ladies and gentlemen, we will now begin the question-and- answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We take the first question from the line of Sanjay Ladha from Bastion Research. Please go ahead. Yeah, hi. Thank you for the opportunity. So my first question would be, sir, we have seen order intake was the slowest in the last eight quarters. How are you seeing this and what's your view going forward? Hello? Yeah, can you hear me? Yeah. See, now in the near future, coming quarters, there is a good expecting business in the power sector. There is a substantial capacity increase going on this segment. So we are hoping good orders from the power sectors. Then even steel sectors are also now growing, and overall trend for the steel sector is also showing in the growth. So we are also hoping good orders from the steel segments. And as the sugarcane growth is very well in the last quarter, so we are also hoping the good business in the sugar industry also. Sir, can you throw some light on the inquiries which you are talking about? So what I want to understand is when you say we have good inquiries and we have a good bid pipeline, so can you throw some light on how much is the bid pipeline we have and how much is going to be converted into the order book so that we get to know how much percentage it is going to accrue on you? Because from the last three, four quarters, we are mentioning that, but the order intake and the order flow has been quite a lower side on that front. I understand the business dynamics, but just wanted to have your views on that. See, whatever orders we actually now the power investment has started, and they have releasing the orders, so we also receive very good orders from the L&T, MHI, and QLR and all, so we are getting the orders from the power industry, but at the latest stage, they want their requirements, so that's why to be executed in the next financial year, and also, there are many inquiries floating from the power industries, and they are in pipeline, and we are hoping all inquiries to be converted into the orders, so we have a very full confidence for achieving the good inquiries, and whatever in the pipeline, it will be converted into orders which will be useful in the next coming quarters. Sir, my another question. We are seeing comparatively better demand for the domestic market for quite some time. When we communicate to the investor presentation, we say that export revenue should be over 50% going forward in the FY 2030. So how do you see this divergence? Because how do you see the export market will pick up? What is the growth strategy for export? Any inorganic acquisition we are evaluating on that space? Yes. At the moment, we are not looking at any inorganic acquisitions. At the same time, how we look at the export business as such, we have explained in many investors' conference call earlier that we are putting a lot of efforts, a lot of activities have been ongoing for the past three, four years. We also lined up OEMs, and we have met the revenue targets of what we were looking for, and these are the OEMs you are aware that they are going to give us a sustained business in forthcoming years, so overall, the long-term export growth or prospects, what we are looking at and considering how we are at present, the market share is, and there is a huge potential, so all those aspects and internal whatever efforts which we are doing, all are in place. At the same time, we are aware that certain geopolitical situations and certain regions, economic growth and other things, those are all the external factors which are presently impacting us. Having said that, for the efforts, all the activities which we have been doing for four to five years now, and all the orders which are executed, and how the customers are looking at presently, based on the experiences which they had with us for three, four years, we are confident that in coming years, we'll be able to reach our milestone of 50% revenue coming from the exports. Sir, can you also throw some growth guidance? I'm not talking about a year perspective from that point of view. I'm talking about the longer three-year time frame, what the growth we are targeting. So last time, we said that it's 20% growth guidance. We have lowered down. That's okay. That's the business part of that. But if I see three-year time frame, what are the growth prospects we are looking for? It's around 20%-25% what we are looking at as the overseas. Okay. Thank you. We'll get back in. Thank you. Thank you. Ladies and gentlemen, if you wish to ask a question, please press star and one. Also, ladies and gentlemen, in the interest of time, we would request to restrict to two questions per participant. We take the next question from the line of CA Garvit Goyal from Serene Alpha. Please go ahead. Hi. Hello. Yes. Good evening, sir, and thanks for the opportunity. Sir, in continuation to the earlier participant only, over the last one and a half years or two years, we are continuously speaking or putting some emphasis on the export side. While we also received a few orders that were announced earlier, these have not been yet translated into material, really larger volume. So as a result, if we benchmark export FY 203 base, the business has delivered only a marginal annual growth of around 4%-5% despite consistent effort and focus that we are putting into. But at the same time, if we look at the domestic market, India appears to be in a strong CapEx cycle, particularly across sectors that we serve to. We have not heard from management a clear articulation around the incremental market share gains in India and maybe targeting a 25%-30% kind of growth at least in the domestic market while exports are muted. In the Indian market, even in the Indian market, we are currently growing at 15%-20% kind of number. So I agree that the margins can be a thing you as a management try to protect. But anyways, if we look at the last two quarters, margins have also started falling. So I just wanted to understand from you why we are not aggressive on the domestic side? And number two, despite the cautious take that we are taking on the domestic market, why are we facing a fall in the margins? Is it because even within the existing market share that we are speaking about continuously around 40%, we have started facing the competitive pressures? Yeah. Yeah. I'll address it. So while we continue to focus on our export market, we have been very strong in the domestic market. As you know, nearly 40% of the organized market share is what we hold. That still continues. We continue to be the leadership leading the market in the Indian scenario. And we are taking all the efforts while we may not go for an aggressive market increase from now on, which comes with an additional competitive scenario and compromising on the margins, etc. At the same time, we continuously look at how we could enhance the product, upgrade our products, reduce our cost, all those aspects, and how to retain the current market. Like you see that whatever the incremental business segments like power sector and things like that, which is happening, we are able to continuously improve our revenue on account of that. So therefore, our domestic approach continues to remain robust. We got a separate team who are continuously bagging those orders and approaching the market. So all those efforts are also always there. And in terms of margins, we see more that it is a scenario which is playing out due to the lower turnover in the first three quarters. Once we see in the fourth quarter, while of course, turnover from a point of view is what we have given the guidance, there has been a little bit of a lower outlook in the current year. In terms of margins, overall margins is how we see. It gets normalized when we approach the Q4. So we remain on the same, more or less same thing. Of course, considering the market in the current year, our marketing team generally uses its flexibility to increase and decrease the price at which we sell the products. So at the same time, overall, our approach towards margins remains the same in the domestic market. So now you are saying going ahead also, we will be focusing on maintaining the market share instead of focusing on increasing the market share in the domestic market. Is that understanding correct? Yes. Your understanding is correct. We would reasonably try to increase the market share, but if it comes within a very aggressive competitive scenario, then we would like to look at maintaining the margins. But in that case, how we will be able to grow? For example. No, it's just a follow-up. It's just a follow-up, actually. All right. Please go ahead. So in this particular case, I'm not understanding. At the same time, we are speaking about 20%-25% growth, right? And we are aware geopolitical tensions are there. So export is a bit on toast right now for us. So if we are not looking to grow in the Indian market, maybe at more than 25%, then how we will be able to achieve that guided numbers? So that I'm not able to understand. Yeah. See, the growth, the export growth, what we had indicated to be around 20%-25% is how we see it. At the same time, we will have to factor in the geopolitical situations which are beyond our control. At the same time, our efforts definitely would be there to reach our milestones subject to these geopolitical considerations. At the same time, our approach towards the export market in terms of adding new clients, identifying growth opportunities in different markets, approaching different markets with different approaches, connecting with the OEMs, consultants, and distributors in different regions. All those efforts and expanding our network of branches and wherever required, if there is assembly centers sort of thing we are to establish, we are keenly looking at. So therefore, all the efforts are on to improve that, to reach that milestone of export projections. Thank you. We take the next question from the line of Sunil Manikan Kothari from Unique PMS. Please go ahead. All right. Thanks for the opportunity, sir. My question is to Kaushik Bhai. Basically, looking at the power sector opportunity, which seems to be materializing thermal power mainly. So just wanted to understand your thoughts for the next two, three years. How do you see MHE Division's opportunity? How prepared we are? Because I think for some years, we were not investing much in MHE Division. So in terms of team, technical capability, or investment in machines, a little bit detailed thought process on MHE's preparedness to capture the growth and possibility of growth will be very helpful. Okay. First of all, I will give you the updates on the market. Yes. Presently, as you mentioned, there is a good opportunity for us as MHE to grow and to catch up the business in the power sector because there are many projects that have already been announced by the various end users like NTPC and other state government bodies, so I think a few orders have been finalized, and out of it, we got the good business in the current year, so in a couple of years, there is a good visibility for us to grow further, and apart from the power, of course, other sectors are also helping us to grow because most of the end users have already announced their CapEx investment and, of course, some capital investment also there to upgrade their existing equipment. We are hoping good growth in the next two, three years. Regarding Kaushik Bhai, our preparedness, how much? Now, to speak to our capability, we have been in this business for more than 75 years. We have our own manufacturing setup over here. We have a dedicated design team for our equipment. In fact, we have upgraded our equipment considering the present market requirement and customer needs, and as far as manufacturing is concerned, if you see most of the products require the fabrication activity. Although we have an internal setup for the fabrication, but for fabrication, we have been now outsourcing to get the things done. Only to get it machining, we have an internal process, and apart from upgrading our existing machines, we have a CapEx planned near to INR 35 crore-INR 40 crore, and out of it, a few machines, we are expecting to get it in next quarter. Next quarter means Q1 of next financial year. We are also investing in our machinery as well as expanding our capacity to meet the near future opportunity or grab the opportunity to that. I hope. Yeah, Kaushik. My second question is on the competition. I mean, compared to the previous cycle of 2000, 2007, how do you see the competition, competitor pricing, and what ability we have added in terms of maybe product? Or are we again planning or thinking about entering some maybe EPC or something? What's your thought process for future growth? That's my last question. Okay. Let me make it clear. We have adopted the strategy that we should focus on equipment supply and providing the after-sales service, and that will continue over the next two years. Means we don't have a thought to enter into EPC business. But looking to the present market needs, I think for us, we have an ample opportunity to put our equipment in the new projects which are being announced by the end user. The reason is only that many end users have changed their strategy for closing the tender. And those strategies are favorable to MHE, in fact, favorable to Elecon to supply the equipment in the market or for particular projects. As far as the competitor is concerned, you must be aware about the market scenario that few players like McNally Bharat Engineering and TRF. They have McNally become bankrupt. TRF has already announced to shut down their material handling operation. So only a few competitors are there like L&T and TKL. But again, if you see the business strategy of L&T and TKL, they are more focusing on the EPC projects. Of course, we have a competition with them, but not to the extent that every sector. And Elecon being the first equipment manufacturer for material handling equipment, most of the PSUs' preference is with Elecon. Okay. Thank you. And my good wishes to Mr. Narasimhan for a future career. And thank you very much. Thank you, sir. Thank you. Ladies and gentlemen, a reminder. Please restrict your questions to two per participant and rejoin the question queue for follow-up questions. We take the next question from the line of Gaurav Nigam from Tunga Investments. Please go ahead. Yes, sir. Sir, I have one question on the Gear Division. What was the mix of engineered gears in this quarter's revenue? And on the gears specifically, you mentioned about the revenue deferral which happened. So would you be able to quantify how much was this revenue deferral that you are talking about? Yeah. Just a minute. So in terms of revenue differently, it is around INR 30 crore-INR 40 crores where some of the dispatches which is where we try to squeeze before December, that is getting extended to January or February. So the revenue mix in the EP and CP. So the CP is 52% this quarter, and the remaining is 48% EP for this quarter. Understood, sir. So that was question number one. Just a quick on the second question on the export side. I mean, we had indicated our OEM count that we had acquired had tied up. Can you update on that business? What is the status and how much business did we do with them in this quarter or in nine months, whatever you are comfortable with? Yeah. It is around 18 OEMs where we are tied up with. Having tied up with 18 OEMs, the revenue what we got during these nine months is around INR 31 crores. And what we look forward to in the future is that repetitive business which could come in the future. Got it, sir. This is great, sir. Thank you. Thank you. We take the next question from the line of Raj Shah from Enam AMC. Please go ahead. Yes, sir. Hi, sir. Am I audible? Yeah, yeah. Okay. Sir, my first question is regarding the gross margins. So if you see the gross margin of 43% that we reported in this quarter is lowest in the last five years. I know you cited some reasons relating to customer mix and product mix. But can you throw some light on exactly where which customers were being serviced, international or domestic? And product mix changes, as you mentioned, engineered products in gears was 52%. I failed to understand why this 600-700 basis points fall in gross margins according to this quarter. Yeah. The gross margin, see, the product mix is around 52% from catalog products and 48% from engineered products. The gross margin largely, while in certain things like, for example, exports during this quarter, we had a little bit low where the margins are better off. Then the product mix sometimes keeps fluctuating between catalog products and engineered products. So that's also one of the sort of, I would say, that it's more of a timing thing. And specifically, we are also a few orders, specific orders which we are executing presently. This is for sort of indigenously developed product for the Indian Navy, which is of a, though it is of a smaller order value. Since it is being done for the first time by us, it has got higher sort of manufacturing costs, which is more towards learning and understanding and designing and things like that. So that's also again from a one-time point of view. At the same time, overall, there is no significant gross margin in the long term. It is impacting us. Only thing is that probably 0.5% or 1% is what we had explained. Considering the competitive scenario, our marketing team, how we are viewed, how our approach towards it, we look at the pricing of the products and accordingly factor those things. But otherwise, gross margin per se in Gear D ivision as well as, of course, MHE Division is strong. In the Gear D ivision, the overall gross margin levels remain the same, except for during this year, it has been on the lowest side. Okay. So just to follow up with that, you said 1% you attribute towards competitive scenario. Now, the amount that you told regarding the Indian Navy orders, if you can attribute some percentage to that and whether this will be beneficial for us in the future orders of Indian Navy? Yes. It is around 0.5%. Definitely, that is a thought process that by bagging those orders, which is of significance for us. In the first time when we execute, we are this thing, but once we establish our credentials, then there is a potential that such orders could come in the future, and whatever the learning costs which we incur in the first year, obviously, we will not be incurring it for a similar product in future years, and we are eager to bag those orders, and while in the initial years, it could be a little bit on the lower side on the margins, definitely, there is a huge prospect for such orders. Okay. Sir, any update on? We request you to rejoin the queue for follow-up questions. Sir, that was a follow-up question. This is the second question that I asked. Okay. Please go ahead. Yeah. Sir, any update on the 200 crore aircraft carrier order that was expected in Q4 and next-generation missile weapon products in defense? Yeah. See, one is that it is getting a bit longer time. So probably Mr. Dipak Dalwad i, you can explain. Yeah. That new generation Corvette, that is, we are expecting the GSL and GRSE are expecting the orders anytime. And we are expecting RFP by the Q3 of next financial year. And aircraft carrier orders, sir? Hello? Sorry? Aircraft Carrier Orders? Aircraft carrier, the bigger one. Indigenous Aircraft Carrier. Yeah. And regarding this Indigenous Aircraft Carrier, that follow-on project is expected to be given to the CPRs in the coming future. And for that, we can get the RFP in the Q1 of financial year 2027. Okay, sir. This is not a question, but if you can just be more detailed in guidance regarding the segment-wise guidance. Last quarter, it was INR 650 crores in MHE, INR 2,000 crores in gears. Similar data if you can give. That would be great. Thank you. Yeah. It's broadly around INR 700 crores from MHE, and the balance is towards the gears. Okay. Thank you, sir. Thank you. We take the next question from the line of Niraj Mansingka from White Pine Investment Management Private Limited. Please go ahead. Sir, two questions. One is on the margins front, I think you have discussed that. But if you remove the Indian Navy margins, how much would the margins for the Gear Division come back to? Sorry, can you repeat again? If you remove the exceptional lower margins in the Indian Navy, how much would the margins come back to on the gear side? You're looking at gross margin or net margin? EBIT margin. EBIT margin if you remove that. If you remove the lower margin of the Indian Navy, how much would the adjusted margin for the gears division be? Yeah. So specifically, probably we will come back to you and clarify to you specifically. But it's to be useful if you discuss here because how will the public know? Because public forum, you can just tell us some broad range because the margins fall has been quite large in the last five quarters in the company. So that's the reason I was asking you. It is around 2% - 3%. Okay. The other question is, in the last few quarters, our orders for the order intake has been good in the gears division, right? But the revenue reported for the gears has not increased. So our cumulative order book from March is increased from INR 583 crores to INR 811 crores. But our run rate of gear revenue has slowed down. What might be the reason? And can we also correlate that the margin will be lower in the existing orders because there is, as you said, employee cost and other cost increase, or those have been taken care of? See, for the answer to your first question, the whatever orders we have booked in Q3, they are major for the power industries. And their requirement are at the latest stage. So all these orders will be executed in the next quarter, I mean, next financial year. So that's why the order books are showing high. But the order executions, they have been deferred by the customers in the next financial year. I got it. Any timeline you have a thought on when it will start, those revenues? Because the run rates have gone down quite low. Q1 itself. From Q1 itself. Q1 itself. Okay. And sir, last question on the U.S. tariff. On the export, how are you managing it? Would you be impacted if the tariff status quo maintains? You are asking about the tariff and impact to us? Yes, sir. Yeah. Yeah. Broadly, you know that the US economy per se is not growing well. At the same time, while we are looking at more growth opportunities, the present revenue is not that much impacted. We are able to manage that due to the tariff implications. Okay. Sir, and the question you did not. Niraj, I think one of the best questions. Please join back to you. The question was not answered. Just one second. Sir, the question was that the orders that you have in hand, do they have higher margins or do they have lower margins? The orders of 811 crores on the gear side. We will work out that and clarify at a later point of time. Okay. Thank you. Ladies and gentlemen, in the interest of time, we request you to restrict to one question per participant and rejoin the question queue. We take the next question from the line of Saket Kapoor from Kapoor & Company. Please go ahead. Yeah. Sir, I hope I'm audible. Yeah. Yeah. Sir, firstly, the small point is about our existing order book. The closing order book is at INR 1,372 crores. So if you could just give us some color, what is the execution cycle, I think. So you mentioned about some power companies' order, which is there in the order book, but they will get executed for Q1. And then, sir, you have also spoken about some product mix and absorption of cost because of the increased employee cost and others. So if you could just give us some color, as the other participant has asked, how is the margin profile likely to be on the existing order book? And lastly, sir, on the utilization level, since we have already done CapEx and we are also emphasizing further addition, what is our current capacity utilization levels for both the divisions? See, for the answer to your first question, actually, mostly orders are for EP divisions. So their execution cycle is around five-to-six months. So all orders will be executed mostly in the next financial year and starting from the quarter four. So few orders will be executed in quarter four and maximum orders in next financial year. Thank you. We take the next question from the line of Rohan from Innovation Capital. Please go ahead. Hello. Thank you for the opportunity. Sir, my question was broadly on the impact of increasing commodity metal prices. How does that impact our existing order book in terms of margins going forward? Thank you. See, as such, because of this demand situation in the existing market, the price trends are more or less stagnant. So there is no such increment in the commodity markets. And because of that, our raw metal prices are almost stagnant. So there is no much impact because of the raw metal prices for getting the orders from the market. Sure, sir. But for our existing order book, some of the metal we'll purchase, right, in future and at a higher price. So will we be able to pass this on to our customers? I don't think in the near future also there will be a price increase in the market for the metals and all the major commodity items. We don't see any increase because normally we look forward for the six months onward for the raw metal prices for booking the orders as well as the study of the market, and that we find that it doesn't seem any increase or, I mean, major change in the raw metal prices of the major category items of these commodity materials. No, no. Absolutely. So I am talking about the increase in commodity price that has already happened, the metal prices that have gone up in the last one to two months. I'm talking about that, sir. Yeah. If you see. But we are also managing and having a good relationship with our suppliers. So we are managing the prices. Okay. Okay, sir. Thank you. Thank you. We take the next question from the line of Aman Soni from Nvest Analytics Advisory. Please go ahead. Aman, please unmute your line and proceed with your question. Hello. Am I audible now? Yes, please go ahead. Sir, just clarification on the guidance part. You mentioned most of the order book in the gear segment will be getting executed next year, right? But at the same time, we are targeting 1,800 crore in Gear D ivision for this year. Maybe to achieve that number, we need to do around INR 575 crore in last quarter, right? So out of the existing order book of 800 crore, if we have to execute 575 crore, that means we have to execute a significant portion in Q4 itself, isn't it? Yes. So we have lined up because now we are having good orders on hand. So we have lined up all our manufacturing activities, and we are confident that we will achieve all the numbers what we have guided. No, no. Actually, I'm asking, while you are saying out of the existing gear order book, a significant portion will be executed in next year, right? Then how we will be managing INR 575 crore of execution in Gear D ivision in Q4? See, we. For that, what I talked about, that was for the Engineered Products, but for the Catalog Products, we are having less manufacturing cycles of, say, one month or 30 days or 60 days, so for that, we are getting the orders, and we will execute orders, and there is a very good orders in pipeline, so we will definitely execute these orders in the shorter lead time. So does that mean in Q4 also, we will be particularly executing more of Catalog Products, and that's why margins can be on a lower side because product mix is not getting changed then? No, no, no. It is not like that. The CP orders, which we are getting, we are executing in the same quarter. The EP products orders we get in September month in Q2, it will be delivered somehow in Q4. And some orders we received in Q3 for the EP product, it will be delivered in Q4 only. So the mix of the CP and EP would be similar in Q4. But some EP products, which we got in the December month only, that would be spillover in Q1 next year. Understood. And sir, in the last few quarters. Aman, I would request you to join back the queue for follow-up questions. Just a follow-up only on this question on the margins part. I mean in the last few quarters, we have been speaking again and again about product mixes getting impacted, product mixes getting impacted. So I just wanted to understand when this picture will get cleared. If that is going to be the case, if we are facing any delay in execution of our engineering products, then our total margin profile is going to be suffered, right? Yeah. This is the one case. The other case is that if you see the product and the service mix, so that also includes in the margins. So this quarter, that is another one case, the service portion from the revenue, that also impacted the margins. But we have the good order in the service business also. So that will be executed in Q4. So that is not the case. Q3, the margins are lower. In the Q4, the EP products. EP products and the service, that will be mix of all the. So margins, it will not like that it happened in Q3. Thank you. We take the next question from the line of Senthil kumar from Joindre Capital Services Limited. Please go ahead. Senthil, please unmute your line and proceed with your question. Since there is no response, we will move on to the next question, which is from the line of Sani Vishe from Axis Securities. Please go ahead. Yeah. So, sir, this is kind of a follow-up on the earlier question, the question from the earlier participant. So, at the end of Q2 also, we had a very strong order book, and we were very confident about achieving good revenues in Q3 and Q4. But as it went, there were some external factors which were beyond our control, and we could not achieve it in the Q3. Now, again, we have a good order book, and we are expressing confidence in very good performance in the Q4. So, what is the change? What gives us the confidence that this time it will happen, and are there any similar risks that we will not be able to achieve this guidance? Yeah. See, what happened is what Mr. Aayush also said. For catalog products, whenever we project, we factor in that from the time we inquiry to the execution, it takes about one month or so. So based on that, considering the market scenario, we get the understanding of how the market is performing and accordingly factor that, and more since for the engineering products, there is more clarity, we are able to provide better clarity on that aspects. So therefore, depending upon how for that quarter it is fluctuating, we factor both the order on hand, how it will be executed, plus the order intake, what we will be getting for catalog products which will be delivered in that quarter. So this sort of mix and match fluctuates, and that is what will be factoring in when it comes for revenue. Okay. So simply said, the confidence levels of achieving this guidance is higher compared to the earlier quarter. Is that right? Yes. The guidance, whatever we have spelled out with the revision, you would know what we have spelled out. That is achievable, definitely. Okay. Okay, Okay, sir. Thank you. Thank you. We take the next question from the line of Ashwani Sharma from Emkay Global Financial Services Limited. Please go ahead. Yeah, my questions have been answered. Thank you. Thank you. We take the next question from the line of Juhi from Arihant Capital Markets Limited. Please go ahead. Juhi, please unmute your line and proceed with your question. Since there is no response, we will move on to the next question, which is from the line of Manish Gupta from Equinox Investment Advisors. Please go ahead. Yes, sir. Am I audible? Yes. Sir, with U.S. trade deals being delayed again and again, and there is rather no clarity when it will be signed, what are the geographies where you are more optimistic about growth? Yeah. We are more expecting the Middle East and Europe. Okay. And since China is also facing tariffs in the U.S., they would be competing hard in these geographies as well. So how is our competitiveness compared to China in these markets? See, maybe knowing that China, though they are competing, but they were not very good in the after-sales service. So that's why we are not facing any competition from China in terms of the order executions and getting from the Europe and Middle East because in the after-sales service, we are having upper edge compared to China. Okay. My second question would be, sir, you FY 2026, what would be your guidance instead of top line, as well as how would you expect the margins to behave in periods after FY 2026? Yeah. Probably in the current quarter, we will have to do the budgeting exercise wherein we get the inputs from both the divisions and different markets. And then we'll be able to spell out how we look at it in the next year. Generally, we give our guidance in Q4 con call. So we will maintain the same, and we will spell out the next year guidance in Q4 con call. Thank you. All right. And sir, considering that private CapEx in India is just not taking off and geopolitics is kind of very, very volatile as far as export markets are concerned, so do you feel there is a downwardness to growth in coming years for you, or do you expect things to normalize sooner rather than later? See, power industries have started now performing, and they have now released the, I mean, investments. Government is releasing investments in power. So we are hoping good traction from the power industries. And even sugar industries are also expecting to pick up in coming months. So we are expecting good traction from the sugar industries and also from the steel industries. And cement also started now showing some expansion. So we are expecting good traction from all these segments. Since we are also spread out fairly well in different industries across the board, any uptick or downtick in few industries, we are able to manage that, and that's how we are optimistic that the growth will be better. Thank you. Ladies and gentlemen, we take that as a last question and conclude the question-and- answer session. I now hand the conference over to the management for their closing comments. In closing, I would like to thank all of you for joining us today and for your continued trust and support. While the Gear D ivision delivered a resilient performance during the quarter, we are particularly encouraged by the strong momentum and long-term potential of the MHE Division, which brings balance and incremental growth to our overall business. Even as we revise our near-term guidance, our focus remains firmly on disciplined execution, prudent capital allocation, and strengthening our leadership in high-growth segments. We are confident in our ability to build on the current momentum, navigate short-term challenges, and continue delivering sustainable value for our shareholders and all stakeholders. Thank you once again for your participation. Should you have any further questions, please feel free to reach out. Have a great evening. Thank you. Thank you. On behalf of Elara Securities India Private Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your line.