Ladies and gentlemen, good day and welcome to Cyient Semiconductors Conference Call hosted by Cyient Limited. As a reminder, all participant lines will be in 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 n operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Krishna Bodanapu, Executive Vice Chairman and Managing Director from Cyient Limited. Thank you, and over to you, Mr. Bodanapu. Thank you very much, and good afternoon, ladies and gentlemen. Along with me on this call are Mr. Shrinivas Kulkarni, who is the CFO of Cyient, Mr. Suman Narayan, who is the CEO of Cyient Semiconductors, and Mrs. Ramya Mohan, who is the CFO of Cyient Semiconductors. I am delighted to share an update on behalf of Cyient Semiconductors, since today is a significant day, not just for Cyient, but for India's semiconductor story. About a year ago, as you know, we carved out Cyient Semiconductors with a clear, ambitious mandate to become India's first and largest fabless semiconductor company, owning IP and delivering chips. In 12 months, we've moved fast. We've built strategic partnerships with GlobalFoundries, Navitas, and MIPS. We won the Semiconductor Laboratory Modernization Program, which is a landmark program for India's semiconductor self-sufficiency. We made a very ambitious and defining acquisition of Kinetic Technologies, which fundamentally shifted our model towards custom silicon and proprietary products. This is a products and IP company and an R&D play to create a sustainable and substantial moat for the future. Today, I am proud to announce that Cyient Semiconductors has signed a definitive agreement for its first external funding round. A total of INR 300 crore with equity valuation at INR 4,650 crore from EAAA Alternatives, who were formerly known as Edelweiss Alternative. This is the first tranche of our fundraise. This is Cyient Semiconductors formally stepping out as an independent company with its own identity, with its own capital structure, and its own ambitious plan for growth. What was encouraging for me is over the last few months, we've had a lot of inbound interest from marquee investors, from global firms, from strategic players, and we are delighted to sign this definitive agreement with EAAA, our first partner in this journey. Going forward, we will continue to partner with the right partners who will add value beyond capital to us. Cyient is also committed to our original investment thesis of up to $100 million based on capital needs and context of our group companies. We believe this is a period where disciplined investment can create disproportionate value in the long term, particularly as the Indian semiconductor ecosystem grows into a strong, vibrant, globally sustainable player. As a growth-stage semiconductor company, we will continue evaluating capital requirements based on market opportunities, product roadmap expansion, and strategic acquisitions. However, we will also remain disciplined on dilution and capital efficiency. I want to highlight three things. First, as I've said before, most experts concur that power is the single biggest bottleneck for data centers. While new power plants are coming up, they're not coming up fast enough, which means that optimization is the only way that we can generate enough power for the data centers. The share of power for data centers is going up from 2% in 2025 to 8% in 2030. We at Cyient Semiconductors are building power solutions to enable AI scale and accelerate faster. In order to create a differentiated solution here and win in this space, we need to accelerate our business quickly from a services-led model towards a product and IP-led semiconductor model. The second is that the market timing is exceptional. India's Semiconductor Mission is a national priority, which has government backing, policy tailwinds, and a growing demand base. We are not just riding the wave, we are building the infrastructure that makes the wave possible. This just makes the timing ideal for a fundraise now. Lastly, Most importantly, we are early. $500 million valuation today for a company with this technology, these partnerships, this pipeline, and this market background is a good testament of what is expected to come. Semiconductor companies' valuations are driven by IP, future potential of revenues, and the markets that we serve. We are confident that we are very well-positioned to avail this opportunity. The capital that we are raising will directly go into R&D, lab infrastructure, and working capital to execute on our growth roadmap. Every rupee is going towards building moats. These are technology moats that take years to replicate and are impossible to copy. I have been in this industry for a long time, and I do not say this lightly when I say we are building at Cyient Semiconductors, a once-in-a-generation opportunity and organization. This intersection of India's ambition, global semiconductor demand, and AI power demand has created a window. We intend to own the window that this opportunity creates. I am confident that you will see a lot more from us in this sector in the coming days, and I am excited to keep engaged with you. For now, I would like to hand over the call to Mr. Suman Narayan, CEO of Cyient Semiconductors, to talk through the business update. Suman? Thank you, Krishna. I want to give you all a clear picture of where Cyient Semiconductors stands today, and why we believe the next couple of years are going to be fundamentally pivotal for our semiconductor story. As Krishna said, we're building one of the most differentiated semiconductor companies in India. Deep custom chip capability, proprietary products for power semiconductors, and a front row seat to two of the biggest structural trends in the industry right now, the AI data center power revolution and India's Semiconductor Mission, with a goal to become the largest custom power semiconductor company based in India. Our business today operates across three complementary areas. First, semiconductor design services, where we provide advanced IC development and chip engineering for leading Fabless semiconductor companies and IDMs globally. Second, custom ASIC turnkey solutions, where we design and develop custom silicon platforms strengthened with our foundry and OSAT partnerships for customers requiring differentiated architectures and long product life cycles. We are a one-stop shop for silicon. Third, and most strategically, the power application-specific standard products where we're building proprietary silicon products and IP that create scalable and recurring revenue streams. To accelerate this vision, in March 2026, we completed the acquisition of Kinetic Technologies for approximately $85 million. The acquisition significantly expands our low-voltage power semiconductor portfolio, strengthens our customer reach as meaningful analog and power management IP, along with a proven product roadmap. In partnership with Navitas as well, we launched seven new GaN products specifically targeting the Indian market. Let me tell you about five wins that I believe define this company. First, we built a robust partnership across the semiconductor ecosystem with companies like GlobalFoundries for competitive wafer pricing, with MIPS for a partnership for us to create intelligent power solutions, with Anora for test and validation at scale, and with Navitas for access to GaN technology. We also onboarded key industry veterans across the semiconductor industry as our advisors. Second, we have built the first set of robust leaders across senior and mid management with deep expertise to execute in semiconductors. Third, power semiconductors represent one of the fastest-growing segments of the semiconductor industry today. With our acquisition and internal investment in low and high voltage product strategies, we're positioning Cyient Semiconductors to participate in the addressable market opportunity of approximately $8.5 billion. Fourth, we also continue to strengthen our innovation and industry leadership position, and during the year, we filed four patents focused on high voltage DC architecture and advanced delivery systems for AI data centers. Along with NVIDIA, Google, Meta, and other hyperscalers and infrastructure companies, we're also contributing members of the Open Compute Project, OCP, helping shape the next-generation AI data center power architecture and infrastructure standards. Finally, commercially, our ASIC pipeline includes approximately $100 million of qualified opportunities, and we were selected as the L1 bidder on the Semi-Conductor Laboratory Modernization Initiative, one of India's flagship semiconductor programs supported by the government of India. In parallel, we continue to invest aggressively in internally developed next-generation high voltage power semiconductor custom products. As Krishna highlighted, FY 2026 was focused on building the foundation for long-term growth, strengthening our sales engine, execution capability, R&D investments, IP portfolio, and strategic partnerships. In FY 2027, our focus shifts to execution at scale, successfully integrating the Kinetic, accelerating our ASSP product roadmap, and converting our growing ASIC and ASSP into sustained revenue growth. In summary, these investments that we talked about are going to help us with expanding our power semiconductor roadmap, including GaN and intelligent power solutions, scaling our ASSP and ASIC product development and R&D, integration and growth initiatives following the Kinetic acquisition, and increased investments in sales channels, building out ecosystem partnerships and global engagement with our customers. We believe we are at an important inflection point. The acquisition is complete. The pipeline is strengthening. The market opportunities around intelligent power and AI infrastructure continues to expand rapidly. For decades, India has designed chips for the world. We believe that the next chapter is building globally relevant semiconductor products from India. That is a company that we are building at Cyient Semiconductors, a semiconductor company that is Indian in origin, global in ambition, and strategically positioned for the next decade of AI and semiconductor growth. I will now hand over this to Ramya, our CFO, to talk about the specifics of the deal. Thank you, Suman. Before we get into the Q&A, let me take a few minutes to address the questions I know many of you will have after reading the press release on the SEBI disclosure yesterday. The first question, why raise external debt when there is cash with the parent? As Krishna and Suman highlighted, the growth opportunity in front of us is massive. Building differentiated semiconductor products demands long-cycle R&D investments, sustained product development, customer qualification cycles, and the ability to support complex global execution programs over multiple years. This financing structure gives Cyient Semiconductors the dedicated capital base and the strategic flexibility needed to accelerate roadmap investments. It creates real operational discipline and financial separation from the parent. Our goal is to build Cyient Semiconductors as a standalone business with its own governance, its own accountability, and its own long-term optionality that includes potentially a future spin-off path. The second one being why debt financing and not equity financing. As Krishna mentioned when he was speaking, we had a lot of interest on the equity side. Multiple capital pools approached us, and those conversations are still ongoing. We made a deliberate choice not to issue large amounts of equity at this stage to protect against dilution and preserve the shareholder value we are working to create. Debt at this stage was simply the more flexible instrument. The next question, why not a bank debt over a structured financing debt? As we started evaluating our options, bank debt versus structured financing, it was clear that debt financing gave us the flexibility to manage the cash outlay, and we had the ability to bring in debt and equity together in a combined structure at a valuation we believe is right for the company at this phase of growth and transformation. The next question, the valuation of $500 million. There are three ways to think about the valuation of the round that we just raised. This valuation roughly works out to be 6x revenue to 7x revenue, depending on what revenue we consider, FY 2026 or FY 2027. The way to think about it is along these three lines. Trading comparables with global semiconductor companies. Most semiconductor companies today are trading anywhere between 5x to 15x revenue, depending on their profile. These are the big names in the industry, and all of these are larger, low-growth, established companies. If you look at smaller, high-growth companies, including our own partners, their trading multiples are much higher. Compared to those, the 6x revenue is extremely well-aligned to the market. Comparing recent M&A transactions. If you look at some of the recent M&A transactions, again, publicly available information, the valuation paid is upwards of 10x revenue. What is factored into the price in semiconductor valuation is not today's revenue, but today's IP and product roadmap, which will lead to tomorrow's revenue and more. Lastly, the only listed company in India focused on services is trading at upwards of 7x after all the market corrections. When you put it all together, we believe $500 million valuation is a well-grounded number. Yes, semiconductor is a new industry for India, but the capital markets around the world do not value semiconductor industry just for today's revenue, but actually for future potential. I also want to highlight that we continue to receive significant inbound interest, and we continue to engage, but selectively. We are not in a rush, and we are not going to dilute for the sake of dilution. If and when we bring in additional partners, it will be because they add genuine strategic value. We will take our time to get that right. With this, I will hand it over back to the moderator. Thank you. The first question comes from the line of Sravan Thakur with CRISIL PMS. Please go ahead. Hi. Thank you for the opportunity. Are we expecting anything on the Navitas side for NVIDIA this year or the year after? Suman? I think, obviously, Navitas will be in a better position to comment for the NVIDIA side of the equation, but obviously, they're on the reference design for the NVIDIA, on the NVIDIA board from a Navitas standpoint. We are working closely with Navitas to get GaN enabled in India, and the seven products that we launched in India are primarily on the 650 volts GaN. Okay. Do you guys develop any GaN technologies for the 800-volt bus architecture that is going to come in the data center side? Yes, we are actively working not just on the GaN side of the equation for the 800-volt architecture. We are working on the 800-volt to 50-volt power architecture, and GaN will be one of the components of that architecture. Okay. Can you give specifics, like any sort of pipeline, any sort of orders that could be coming in from the next year or so? It is pretty early in the 800-volt architecture. As I said, we're part of the Open Compute Project right now, the OCP, the Open Compute Project, where we are actually working on defining that architecture. All right. Thank you. Thank you. A reminder to all the participants that you may press star and one to ask a question. The next question comes from the line of Chinmaya Bhargava with Badrinath Holdings. Please go ahead. Hi. Thanks for taking my question. I have a question on the Navitas partnership in India that you spoke about. Can you tell us if you have a distribution partner or how you aim to get these parts into either domestic data center build-out or in other high power applications? Yeah. We just recently hired someone to head our sales in India as of last week. He hails both from Arrow as well as from Texas Instruments. The gentleman is actually evaluating distribution companies right now to work through the India ecosystem. We will have that solved in the next month or so from a distribution standpoint. A small follow-up on the pipeline that you said has about $100 million. Could you talk about which end industry that's currently, how that's broken up? Yeah. Our ASIC and ASSP pipeline is usually targeting industrial and medical applications. That's where most the bulk of our pipeline is based out of. Okay. Thank you. Welcome. Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes on the line of Pratik Kulkarni with KOSH WEALTH MANAGEMENT. Please go ahead. Hello, sir. Am I audible? Yes, you are. Please go ahead. Yes, sir. In the beginning of the brief you said that the semiconductor-. Mr. Kulkarni, sorry for interrupting. We cannot hear you. Can you speak a little louder? Just a second. Hello, is it clear now? Yes, please go ahead. In the beginning brief note, you said that there are three segments in the semiconductor company, design service, custom ASIC turnkey solutions, and power applications semiconductor products. Could you just give me an expected mix from revenue contribution from each of the segment and what margins you think would be the most promising segment among the three? First, you would target the turnkey solutions and then move towards the design service and more towards power applications. How is that dynamic? Sure. Today, our ASSP including Kinetic is roughly 50%-60% of our business. The rest of the business is split equally between services and ASIC turnkey. As we progress and we develop our own products, which we're working on, we do believe that ASSP revenue share will increase in the next three to four years because there is an R&D development cycle of almost two years to three years for the product to commercialize. From a gross margin standpoint, ASSP, given its product and IP driven, will have the highest gross margin, typically in the 50%-60% range, depending on which customer segment you serve, followed by custom ASIC turnkey, followed by services. Now, in the near term, we do believe that custom ASIC turnkey will grow faster compared to the other segments. In the longer term, ASSP will continue to remain the significant portion of our business. Wow, okay. Second question will be in the custom ASIC turnkey solutions, mostly will be which foundries we would be using for providing manufacturing services for our customers? Primarily today our custom ASICs are using the TSMC foundry. We use the 180 nm Gen 2 primarily for our custom ASICs, and some of them also have a dual chip on there. For the microcontroller, we might be on a 40 nm or 55 nm also from TSMC. We will be transitioning some of those opportunities with the GlobalFoundries as well moving forward. Okay, sir. Thank you. That's all my questions. Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes on the line of Jimit with Emkay Global. Please go ahead. Hello. Yeah, hi. Thanks for the opportunity. I just have a few questions. One is with respect to the Kinetic acquisition that we did. Is it a complete fabless sort of solution that we have, or do we have any sort of enhanced manufacturing there? Second, in terms of the semicon financing that we did currently, previously we did Kinetic acquisition that was out of the console balance sheet cash. Are we looking to fund any more semicon initiatives with the DET as in a balance sheet, or are we just looking external partners as an option going forward? I'll let Suman answer the first part of the question on Kinetic, and then I'll answer the second. Today, Kinetic adds a fully operational fabless semiconductor platform and with product execution, customer programs, and capable ASSP infrastructure, as we talked about, it's about 250 products and 100 IP from a patent portfolio standpoint. On the funding, Cyient remains committed, like I said, to the $100 million. We've already put in about $30 million. The rest of the money is available. We'll just look at, depending on what opportunities are available, what is the best use of capital, et cetera. We will definitely put in more funding if it comes to that. We think that at this point, it is best that Cyient Semiconductors have its own capital structure. If I may just draw a parallel to Cyient DLM, the way semiconductor business works is more like a DLM kind of a structure, where you do have a higher capital investment, you have design which takes upfront capital or upfront money, et cetera. We think it's better that Cyient Semiconductors have its own independent capital structure with the kind of investors that want to participate in that capital structure. We thought this was a good starting point. Therefore, we will take any decisions in that construct or in keeping that in mind. If required, or not just if required, if it makes sense for Cyient, especially if there is something around design that Cyient would want to co-invest with Cyient Semiconductors, in that case, absolutely, we would be willing, able to support with the rest of that $ 70 million that's available. Okay. Thank you for the answers. Just if I can squeeze in one follow-up question. As far as I understand, the initial GaN portfolio that we have essentially targets around 650-volt applications. That includes AI, DC power supply that we have, and even USB laptop charger adapters and those kind of other solutions. I checked that the Navitas is actually exiting the low-margin business, which is the consumer mobile land. What are we looking at in terms of our portfolio buildup as we move ahead in the build-out phase? If you can just share some broad thoughts on this. Yeah. Actually, it's a good question. If you look at some of the adapters that we have, a lot of the adapters are starting to migrate to GaN, especially on the laptop side as well of the segment. That does use a lot of the 650 volt. I think over time, what we will see the migration to with the higher voltage in the 800-volt class architectures as well is the higher density power supplies, AI infrastructure power delivery, industrial and intelligent power solutions. It'll be higher margin differentiated power semiconductor solutions as we partner closely with Navitas. Okay. Thank you for your answer on this. Just if I want to summarize, you are trying to focus more on the power DC side, but right now the portfolio location also includes the adapter and charger sort of ODM. Is that the right understanding? The 650-volt GaN is actually applicable across multiple applications. Yes, today, I think if you look at it, a primary market for GaN has been the chargers, but they are migrating into a lot of the other power supplies as well, especially on the industrial power supply side. Perfect. Just one last question in terms of the growth prospects that we are looking at for semicon. We initially mentioned in the last earnings call that we are looking to break even by FY 2027 end or FY 2028. Is that intact or even more of our investments going forward, we are shifting our goal posts that we mentioned earlier? Just some light on that, please. Thank you. Yeah. In terms of, we are still looking at a break-even, but as we are speaking to the investors and as we see market opportunities, given the growth expectations and the momentum that we're building, we're looking to see what is the right way to generate extract value. For now, we are still looking at a break-even late FY 2027, early FY 2028. Based on the investor conversations, we'll come back. I'll just say that from a board perspective and a Cyient investment perspective also, I think what we are seeing is the opportunity is very significant. Of course, we'll have to make the trade-off in the right sort of balance between growth and profitability. At this point, I think we won't let go of an opportunity or we won't not invest in an opportunity because I think the opportunity set that is available to us is very significant. I just want to say, our intent, of course, remains that we break even quickly. I would just say maybe a quarter or two shift. We wouldn't worry too much or I wouldn't worry too much as an investor because just the opportunity set is also here and now and we don't want to lose out because we don't have any investment dollars. Creating that investment dollars is also obviously one of the key reasons why we've gone down the fundraising path. Thank you. Mr. Jimit, please join the queue for more questions. Next question comes from the line of Moez Chandani with Ambit. Please go ahead. Yeah. Hi, good afternoon. Thank you for taking my question. First, I just want to understand the deal structuring for the fundraise and the debt that you've announced. Can I get a sense of how much is the debt raised at? What interest rate it's being raised at? The deal is a combination of debt and equity. Debt of INR 200 crores, equity at INR 100 crores. It's at competitive rates. We can't disclose the rates because it's still not closed today. All right. Understood. Then just on a related term, you completed the Kinetic acquisition on April 8th. Can I just get a sense of how the deal is structured? Is there any equity? Is there any cash payout that you're doing? How are you raising funds for the cash? Is it equity from Cyient Semiconductor's balance sheet? Is it further debt that you expect to make for the payment, or are you expecting infusions from the parent company into Semiconductor? Sorry, you're asking how did we fund Kinetic? Yes. We funded Kinetic through debt. Okay raised by Singapore entity, because we got pretty good rates, and we felt like that's a good use of our capital. Understood. The acquisition was funded entirely by debt raised by the Singapore entity, is my understanding correct? That's right. Okay, perfect. Also just to understand, I know your profitability targets are maybe end of FY 2027 or year FY 2028. Any sense of path profitability, when you expect to get that? In a lighter vein say we get to EBIT profitability first, then path profitability, because our focus right now is business growth, building the right product segment and aiding the growth. That's where a lot of our focus is right now at. Thank you. Mr. Chandani, please rejoin the queue for more questions. Next question comes on the line of Sandeep Shah with Equirus Securities. Please go ahead. Yeah, thanks for the opportunity. I do agree our size is small, opportunity is big. The issue in the ASIC and custom design, sometimes the end product also has a lot of innovation in terms of new chips coming in the market at a gap of six to nine months, which we are seeing from NVIDIA, because what they launch six months before may not be relevant six months after. How will we make sure on a longer term basis, the scale will keep happening without leaking buckets in terms of revenue growth? I'll take that question. Having been in the semiconductor industry for the last 30 years, I think that's true of any chip development. There's always progress being made every day. What I can tell you is based on my experience, you have to be tightly coupled with the customers that you're working with. Today on the ASSP business, the customer relationships are very strong. If you're defining an ASSP, which is an application-specific standard product, then the customers help you with that definition, and they by default are the teaching customers. They have a good view of what's going to happen in the 9 - 11 months out, from when the chip comes out. We believe we are in tight partnerships with our customers, both on the high voltage and on the low voltage Kinetic side. We have a good understanding of what the market needs are. That's also the reason why Krishna highlighted the need for R&D. If you look at an average semiconductor company, they continue to burn R&D for new product development. Yeah. Thanks. Just a question in terms of Kinetic Technologies debt, that will also flow through the Cyient Semiconductors balance sheet, not the parent. The earlier debt which we have taken is closer to $90 million-$95 million to fund Kinetic Technologies and over and above that there will be additional $20 million through the transaction we just announced. That's right. 80 + 20, 100 in total on Semiconductor balance sheet. Okay. This totally would be foreign currency debt? No, the 80 will be foreign. The 20 is India. Okay. Thank you. Thank you. Ladies and gentlemen, due to time constraints, we have reached the end of question and answer session. I now hand the conference over to Krishna Bodanapu for closing comments. Thank you very much. Thanks everyone for joining, especially in the middle of a trading day. As I said, this is a very exciting opportunity for us and one that we're very keen to capitalize on. We are in a very interesting convergence of opportunities, both the India story, the prevalence of the use of semiconductors in various industries. The geopolitics with diversification from certain geographies. I'd say most importantly, Cyient's capabilities. I think over the last couple of years, we've built some fantastic capabilities, both in digital and more importantly in mixed signal digital analog. I think it's time to leverage on those capabilities. I think we've built a fantastic team. Obviously, two members of the team are here, but more importantly or equally importantly, sorry, there's a whole technology team that supports the new product design, and who are focused on creating these new ASSPs and intellectual properties that can support growth. We are very excited about where things stand, and I think the opportunity will play out in a very meaningful manner, very quickly. I don't think this is something that we'll have to wait for a very long time. It'll play out very quickly. Thank you very much for being here and listening to our story, and thank you very much for the support. Thank you. Thank you. On behalf of Cyient Limited, that concludes this conference. Thank you for joining us. You may now disconnect your line.