Ladies and gentlemen, good day and welcome to the Azad Engineering Limited Q1 FY27 earnings conference call. This conference call may contain forward-looking statements about the company, which are based on beliefs, opinions, and expectations of the company as 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. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rakesh Chopdar, Chairman and Chief Executive Officer, Azad Engineering Limited. Thank you, and over to you, sir. Thank you. Thank you, Dms G. Good morning, everyone, and a warm welcome to our first quarter earning conference call for fiscal year 2027. Joining me today is Mr. Vishnu Malpani, our Whole-Time Director, Mr. Ronak Jajoo, our CFO, and our investor relations advisors from Strategic Growth Advisors. Our standalone and consolidated financial results, along with our latest investor presentation, have been uploaded to the stock exchanges and our website for your reference. To start with capitalization on global industry megatrends. Before we review our specific operational milestones, it is critical to look at the powerful macroeconomic statements driving our businesses. We are currently witnessing an unprecedented synchronized high growth cycle across all sectors. In the energy domain, the global push for energy security and the transition towards advanced gas turbines have triggered massive multi-billion dollar global equipment upgrade cycles. Concurrently, the aerospace and defense sector is experienced structural supply chain shifts driven by a global surge in aircraft demand and an intense domestic focus on defense self-reliance. These are not short-term spikes. They represent structural multi-decade growth shifts. Because Azad has spent years securing strict OEM qualifications and building specialized heavy infrastructure, we are uniquely positioned at the epicenter of these dual megatrends. These powerful industry tailwinds provide a strong compounding foundation that will fuel Azad's long-term scale and audible expansion for the years to come. Now, a very historical national milestone, India's first indigenous turbojet engine. I will be beginning today's call with an announcement that fills me and our entire team at Azad with immense national pride. I am thrilled to share that Azad Engineering has successfully manufactured, assembled, and delivered India's first indigenous expendable turbojet engine to the Gas Turbine Research Establishment, the DRDO, and the Ministry of Defence. As highlighted in the official press release from the MOD, jet engine technology represents one of the final frontiers of sophisticated engineering. It demands a level of extreme precision, advanced metallurgical expertise, and uncompromising manufacturing quality that is mastered by only a select handful nations globally. For Azad, this milestone is a profound architectural shift. We have successfully evolved from being a precision component manufacturers into a fully integrated propulsion system player. By taking up the end-to-end manufacturing, assembling, and integration of this complete engine assembly, we have moved right up the value chain. This significantly expands our total addressable market and firmly seals our position as an indispensable trusted partner in India's long-term aerospace and defense sovereignty. We have also been advised to prepare for a significant scale-up in production volumes once the ongoing sequence of testing is completed, which will in turn accelerate development across all of India's past and future critical indigenous engine programs. On the capacity expansion, another feather added, the new Baker Hughes facility. Our physical infrastructure footprint is scaling up right alongside our technical capabilities. I am proud to report that our massive multi-facility expansion roadmap at our Turkayamjal Bolaram Industrial Park is progressing exactly as planned. Following the successful commissioning of our dedicated lines for Mitsubishi, GE Steam Power, and Siemens Energy, we hit our next major milestone recently. In April 2026, we officially inaugurated our fourth dedicated leading manufacturing facility, a state-of-the-art 7,600 square meter facility, custom-built for Baker Hughes. Operating dedicated plants represent the deepest possible level of customer integration in our industry. It creates immense operational stickiness and provides long-term multi-year supply chain visibility with global marquee OEMs. Civil construction across the remaining units at the Azad Center of Excellence is on track to wrap up within this fiscal year, while we are undertaking a measured, calibrated ramp-up across these new lines to satisfy stringent customer qualification schedules. We expect the more substantive revenue contributions to begin crystallizing in the second half of this financial year. On the Q1 FY27 financial performance snapshot. Our unwavering focus on operational discipline, operating efficiencies, and optimized product segment mixes has enabled us to kick off a new financial year on the strongest note ever. Looking at our standalone financial performance for Q1 FY27, I am happy to mention that we have met our guidance. Revenues from operations grew by 26.8% year on year, reaching INR 170.5 crores, up from INR 134.5 crores in Q1 FY26. Reported EBITDA expanded at a faster pace of 32.1% year on year to arrive at INR 64 crores, reflecting the mounting benefits of our operating leverage. EBITDA margins expanded to robust 37.6%, up from 36.1% in the same quarter last fiscal. Profit after tax registered a healthy growth of 21.2% year on year to stand at 36.4%, maintaining an exceptional PAT margin of 21.3%. On a consolidated level, our revenues came in at INR 172.6 crores with an EBITDA of INR 64.4 crores and PAT of INR 35.2 crores. Our business segment across energy, oil and gas, and aerospace and defense continues to grow symmetrically and strictly in tandem with our long-term structural targets. On the closing outlook, very important for me to give this message. As I have mentioned this earlier, FY26 was a year of expansion, during which we undertook a wide range of foundational activities to position Azad for its next level of revenues, performance and growth. I am pleased to report that we have already stabilized 80% of these initiatives in Q1, with the remaining major activities on track for completion by mid Q2 and full closure by Q3. Our manufacturing infrastructure is now running at full throttle, and we expect this to propel Azad into its next phase of accelerated growth from Q3 and Q4 onwards. At Azad, we have never chased reckless scale at the expense of our margins. Our growth is anchored entirely against firm long-cycle contracts, multi-year order book visibility. We do not engage in speculative expansions. Backed by an incredibly strong growing pipeline and a world-class manufacturing infrastructure that is rapidly maturing, we enter the rest of FY27 with absolute clarity and complete execution confidence. We proudly reiterate our long-term annual revenue growth guidance of over 25% while maintaining our stellar industry-leading profitability profile. We remain dedicated to building a high moat, high resilient global precision engineering platform. I want to thank our customers, partners and our exceptional team at Azad for their relentless execution, and our shareholders for their continued confidence in our journey. I now hand over to our CFO, Mr. Ronak Jajoo. Thank you everyone. Thank you, Chairman Sir, and good morning to everybody. Now I will take you through a comprehensive review of our financial performance, capital structure, and operating efficiency metrics for the first quarter ended June 31, 2026. As the Chairman summarized, this quarter has marked a highly successful phase of execution. The financial data demonstrates that our front-ended capacity investments are successfully translating into a scalable, highly predictable revenue line. Most importantly, we are beginning to see the true power of structural operating leverage as our asset base moves through its planned stabilization curve. Let me take you through the financial highlights and operating leverage. Our standalone financial performance for quarter one FY27 underscores our robust business momentum across both sequential and year-on-year horizons. Top-line expansion. Our standalone revenue from operations reached INR 170.5 crores, reflecting a stellar growth of 26.8% year-on-year basis against INR 134.5 crores in quarter one FY26. On a sequential basis, our revenue grew by 8.3% over INR 157.4 crore reported in Quarter Four FY26. This sequential growth highlights a steady acceleration in customer schedules and manufacturing deliveries right at the start of the fiscal year. Operating leverage in EBITDA growth. Our reported EBITDA grew at an impressive pace, INR 64 crore, representing a growth of 32.1% year-on-year basis from INR 48.5 crore in Quarter One FY26, and a strong sequential jump of 10.9% from INR 57.8 crore in Quarter Four FY26. Operating margin expansions. This outpaced growth directly expanded our standalone reported EBITDA margin to 37.6%. This is an expansion of 150 basis points over the 36.1% recorded in Quarter 1 FY26, and solid 90 basis points setup from 36.7 achieved in Quarter 4 FY26. This margin progress proves that our pure play manufacturing operations are absorbing fixed corporate overhead efficiently as production scale rises, and we are confident to maintain the same in coming quarters and so. Core material margin sourcing efficiency. This expansion was heavily supported by our cost indigenization program. This reduction reflects our long-term effort to lower core manufacturing costs by onboarding domestic suppliers and increasing backward integration through our subsidiaries. Let me take you through the analysis and variance on other income and net profitability. To evaluate our pure core performance accurately, it is essential to analyze the structural change within our non-operating income segment occurring on account of volatile foreign currency momentum, which we saw in Quarter 4 FY26 because of macroeconomic environment, which is not in control of the company. The foreign currency element in other income. Other income came to INR 4 crore in this quarter. This line shows a sharp moderation from INR 9.1 crore in Quarter 1 FY26 and substantial decrease from elevated INR 17 crore recorded in Quarter 4 FY26. I must emphasize that this sequential drop is entirely a function of foreign currency dynamics. In Quarter 4 FY26, other income was heavily bloated by major non-operating foreign currency gains due to macro region, as I mentioned, beyond the control of the company. In contrast, Quarter 1 FY27 witnessed currency volatility that normalized these non-operational trades with. Furthermore, our treasury income is expected to moderate, as I mentioned in last call also, as we steadily deploy our cash reserves into our active factory infrastructure and machines. Net profit metrics. Our standalone PAT grew at 21.2% year-on-year basis to INR 36.4 crore up from INR 30 crore in Quarter 1 FY26. Sequentially, net profit grew at 3.5%, almost 35.1 reported in Quarter 4 FY26. This is an exceptional standalone PAT margin of 21.3%, basis EPS of INR 5.63 per share. On a consolidated metrics, our metrics remain equally strong. Consolidated revenue from operations grew at 25.9% year-on-year basis to close at INR 122.6 crore. Consolidated EBITDA at INR 64.4 crore, yielding an operating margin of 37.3%, while consolidated PAT reached 35.2. Our key subsidiaries are performing precisely on track with our turnaround target, which we have set for ourselves. Now, I like to hand over to Mr. Vishnu Malpani, who is our Whole-Time Director to take you through the strategies. Thank you. Thank you, Ronak, and good morning, everyone. The Chairman, Mr. Chopdar, spoke about what 22nd of July meant to the nation. Our CFO, Mr. Jajoo, has given you the critical numbers that drove this quarter. Let me give you the corporate view, because from there we said that delivery of an engine was much more than a successful engineering milestone. It is a permanent upgrade in Azad's market positioning. Three things that changed on 22nd of July. First, we moved up the value chain, global value chain. By managing end-to-end integration and balancing of a complete propulsion system, we have broken out of the traditional component supplier tier. We have proven that Azad can act as a primary technology integration partner for any of the global OEMs or defense needs of the country. Second, the moats got deeper. Azad was placed within a highly exclusive tier of global manufacturers capable of executing complete defense assemblies. The regulatory qualification and technical barriers to entry here are immense, and they protect our business from standard competitive pressures. Third thing that changed was our addressable market expanded. This successful execution opens long cycle monetization opportunities across domestic defense programs and international aerospace supplier chains as well. In effect, an entirely new structural growth engine for Azad happened on that day. Now let me connect that to what we built. Our physical expansion at Turkayamjal Industrial Park is governed by a strict risk-free mitigated asset model. We do not build speculative capacity. We build dedicated customer online infrastructure. This quarter our new 7,600 sq m facility for Baker Hughes commenced operations following the same deployment model we have proven with each of our other customers, namely Mitsubishi, GE Steam Power, and Siemens Energy. Why does this model matter so much to us? Because once a global marquee OEM integrates a dedicated qualified facility into their primary supply chain, shifting that business carries a huge switching cost. This is what operational stickiness means in our industry, and this is what gives us exceptional multi-year revenue and volume visibility. We are pacing this expansion with discipline. Civil construction for the remaining units at the new plant, Azad Center of Excellence, is on track to wrap by the end of this financial year. Machine installations are being executed in modular back-to-back phases, aligned strictly with the roadmap of our customers. You also see the strategy coming live in the numbers that we delivered this quarter. On a consolidated basis, our revenue from operations grew by 25.9% year-on-year to about INR 172.6 crores, driven by steady delivery schedules and strong operational execution across all our facilities. Aerospace and defense also registered one of the highest growth acceleration, up approximately about 38.4% year-on-year, reflecting our increased share of wallet with some global aviation majors and initial tailwinds from our advanced propulsion and defense system deliveries. Our energy and oil and gas vertical also grew by 21.6%, driven by healthy demand across gas turbine components and operational launch of our new customer dedicated production lines. Acceleration where we are investing, resilience where we established. This is what we are shaping. Let me close by a section with the long view, because Azad's operating engine is designed to compound value over long cycles. By scaling multiple customer dedicated plants within a single centralized geography, we are capturing significant operational synergies. This structure lets us expand operating leverage rapidly. We have built an infrastructure that is incredibly difficult to replicate. Our technological moats across sectors are widening and getting deeper. Our customer relationships are structurally locked in, and our execution framework is fully geared to deliver steady, high margin growth for years and to stay firm on the guidance that we've communicated in the long term. With that, I would like to end our speech and we will be happy to take questions from everybody. 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 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to please use handsets while asking a question. Ladies and gentlemen, we will now wait for a moment while the question queue assembles. Our first question comes from the line of Vikas Singh with ICICI Securities. Please go ahead. Good morning, sir, and thank you for the opportunity. First of all, very congratulation on your turbojet engine. My first question related to the turbojet engines only. How is the roadmap now once you have delivered the first, I believe that you need to deliver 4 or 5 different prototypes, and then it will go to testing phase, et cetera. Could you give us some timeline that how many years down the line or months down the line this would actually translate into the orders to us? Okay. Thanks, Vikas. This is Rakesh. Finally, yes, we have delivered the need of the hour of the country. We have delivered this engine, which are being currently being imported by other OEMs. India is importing, MRO is importing these engines for the platforms, multi platforms they're using. It was indeed a very pride moment while we delivered this engine and the GTRE, especially the DG, she herself was here to receive this engine and it was a very pride moment for us to this. On the note, what we know is limited what we know as being a MRO program. They don't share much of an open things. But what they have been told us now, this engine is under testing. The next phase of this is going to go on the weapon, I think in next 4 to 6 weeks is what we know. Okay, these are just a timeline which we heard about it. We have no base for it, or we have nothing in written or something. This is the next phase. We will go on the testing on the weapon, which is 4 to 6 weeks away. Probably with that, airworthiness certification will happen and it is good to go for production. This is not some years story, these are few months story. This is what we are told, and we have been guided to prepare for massive production on these engines. Noted, sir. Sir, now that in newer plant location, we would have only three sheds left in terms of either sell it for a dedicated player or utilize for the other customer. How should we look at if this engine comes in which you would dedicate one shed to this engine or it would get it done by the existing segment? My second part of the question largely related to for your growth beyond FY29, you need to plan the next phase of CapEx now. If you could give us some highlight as to how is that planning? Because market size is still pretty large, and now the domestic engine manufacturing is also getting added in your fold. Yeah, Vikas, this engine itself is a big story. The volumes what we have heard and what we have seen, this is. If it is a two-digit volume, definitely yes, we can manage with the existing capacity. We have got so many buildings, shops ready for our different customers. The best part is all the capacity what we have are fungible and can manufacture these engine components also. We do not need to really add some great capacity for a two-digit volume which is there. But what we could say, it is not two-digit volumes. It is two digits to four digits, we do not know. Based on that, we have to do a planning. I think in the next few weeks, we will know what exactly the volumes are. But we are prepared. We are prepared if it is two digit, three digit, or four digit. However, this phase, base engine, what we have predicted is definitely what we see in the coming time. But we have other commitments, we have other businesses which are there in hand, and we are also having a priority to finish whatever the commitments are being given. Now main focus is to speed up the infrastructure, which is about to finish. As I mentioned, 80% of the infrastructure is now ready. FY26 was our stabilization year. Q1 is where we started the productions step by step, building by building. Q2 is what we are right now talking, the machines are, all the spindles are fully running on full throttle. The expectations, as again, I mentioned earlier, you see that Q2, everything will get settled down and the production starts coming after it. Noted. On the capacity built up roadmap? Yeah. That is all planned. If you talk about the coming years, I will ask Vishnu to jump in this question. What we see is major plan is from FY 2029, is what we have to start sketching. Already sketched, but we have to really work on it. I will pass on this remaining answer to Vishnu. Sure. Thank you, Mr. Chandra, for this. Vikas Singh, the idea for us is we build capacity based on the contracts that we have to deliver every year. For us, we have been working on quite a few opportunities that are there right now at Azad Engineering, and we are evaluating what is the total need that we would need over the next 5 to 6 years, and we are doing that planning. As for the next couple of years, Azad Engineering has built and deployed and built capacity to cater to the next couple years in terms of where we want to grow in terms of revenue. However, you are absolutely right in spotting the fact that there are opportunities that we are working on. We are doing our math internally to figure out how much is the quantum of capital do we need, and when do we actually need that? Once that internal discussion gets closed and that loop gets closed, I think we should be able to maybe address this in the next quarter with far more accuracy, in my view. Thank you. Noted. Sir, if I can fit in one last question. Our mostly sales in export market, so I presume it is dollar denominated. So the INR depreciation benefits is built in above EBITDA in the margins or below basically? This is below the EBITDA margin. This is not built into the EBITDA margins. Noted, sir. Thanks. That is all from my side. Again, very congratulations on the engine. Thanks, Vikas. Thank you. Thank you. Our next question comes from the line of Amit Dixit with Goldman Sachs. Please go ahead. Yeah, hi. Good morning, everyone, and thanks for the opportunity. First of all, congratulations for delivering the ATGG engine. I think it is a great achievement for the company. The two questions I have is, the first one is actually on the Mitsubishi Heavy Industries contract that we got for hot section. We already have given in the presentation the TAM that is for the cold section. Hot section typically, in my view, should have much higher TAM. So wanted to understand if you are in discussion with some of your vendors for getting more such contracts, extending the adjacencies across. Just wanted to get your thoughts on this. And given the fact that some of your global peers like Howmet Aerospace and all have reported very excellent numbers and very significant growth. Yes, as you said in your opening remarks, the market looks very promising. How do you see from a growth perspective that technically we are at a low base, essentially, we have just started the aerospace part. So how do you see the growth curve for Azad Engineering growing? You mentioned that H2 onwards the growth would go to the next level. But just wanted to understand your broad thesis on that. Okay, Amit ji, I will try to recollect the first question you have put. The first question what you asked is on the stabilization of the hot section, the market. As you are aware how critical these components are. Of course, the cold section itself is so tough to come and Azad is playing around with that. But in the hot section, definitely other OEMs have shown super interest and asking us, "When is your facility ready?" The beauty, the best point is the facility what we are going to, setting up what we are setting up for Mitsubishi is exactly a model which will be utilized for other OEMs as well. Another good news I will tell you, it is not just for the land base, it is not just for the energy. The same facility will cater the hot section for the aviation engines as well. So the first point is to establish this, which is around 7-8 months away from now. Then we do the qualification. While we do the qualification, we will invite the other OEMs, and to be honest, we do not need to invite, they are already here. So that answers the thing. Any other questions you have on this, Amit ji? No, that is fine. Just wanted to get the broad timeline. That is fine. Yeah. Yeah. The B part was on actually the growth that we are seeing in this market. You mentioned in your prepared remarks that both the vectors are seeing excellent tailwinds. As I mentioned that some of the peers, Howmet and all, despite being a much higher base, they have reported like 37.7% EBITDA margin, 50% EBITDA growth. So what is the growth trajectory for Azad you see, and are there any constraints that you see at your end to grow by that number? No, actually, it is a very valid and very nice question, Amit Dixit. People who know about this subject, they will also obviously know this is not a million story. This is all a billion story. We also know, as you could name only two or three in our name. There are only two or three players in the world who have cracked this. Azad Engineering will be the next to crack this. Once this is cracked, the league itself will change. If you talk about engines, that is a different league. Now we talk about this hot section, this itself is in a big league. Definitely the market is massive and there is a long queue of the products what are required in this field, and Azad Engineering is preparing for that. It is a very good situation now. Great, sir. On the margins you can imagine these high-cost countries like U.S. and Europe are making that healthy EBITDA margins. Definitely what would Azad Engineering make? It is a good thing to understand. Yes. No, great. That is reassuring. The second question is essentially on the working capital side now. In Q1 FY27, we saw that there was a bit of increase in finance cost, possibly due to the working capital deals. Now since we are in expansion mode, I am not asking for a timeline, but just wanted to understand that this working capital, in terms of days, when we can expect it to plateau. Yeah. This is Ronak. So from the finance cost side, if you see that I have already told FY 2026 presentation, I have told that finance cost will going to continue because you have a bill discounting charges which will go into the finance cost only. So there is a betterment of the cash flow, operating cash flow, not on the financial cost side. And coming to the specific question of when it gets tapered, so we are targeting H1 around 200 days and by H2 we are targeting in range of 160-180 type of days. This is largely back on the bill discounting facility where our current debtor stage which are around 170, 180 days will go down to 90 days. That's how we look this entire situation to be unfold. No, great. Very clear. Thanks, Ronak, and thanks for the chance and all the best. Thank you. Our next question comes from the line of Gaurav with Bandhan. Please go ahead. Thanks for the opportunity. My two questions. First one, again on the ATGG engine. The question is that as you mentioned in your opening remarks that this engine required you to have done some metallurgy, machining, various other processes. My understand obviously is that Azad right now has machining, and now with the joint ventures in place, you have the surface treatment capabilities. For the other capabilities, I am assuming that those were outsourced or were done outside Azad. Is it possible to quantify in this engine how much of the value add was by Azad in-house and how much was done outside Azad? Hi, Gaurav. Vishnu was this side. We have done everything in-house. There is nothing that we have outsourced any of the parts or something. Maybe some small washer or some we have gone with, or some specific requirement which Azad's capability is not available. We have gone to GTRE and they have either done it in-house or they have got it done by their resources. It is not that we have to go out somewhere except some small washers or some kind of small machining or some kind of building operations. That is all. All right. Okay. The second question was on the margin bit. For last 2 years, you are consistently doing about 37%, 38% EBITDA margin which used to be about 30% to 35% before, comparatively. Now you continue to guide your margins around 35% level. What I am trying to understand is that you are doing 37%, 38% margins when you are yet to utilize the new facility. Why the conservative guidance on the margins bit when there will be a little bit of operating leverage which would come back from the new facilities there? Yes. Gaurav, as you can see, we are consistent 30, 35% plus. But the guidance what we are always on it and for the calculation purpose, it's always nice to use a 32-35% window. Of course, you can see that we have been delivering precisely going above 35%. But for calculation purpose and for the guidance purpose, I think 32-35% is a good number which we are holding for since long. Is it possible to explain what has led to this margin range shifting from 35% to 37%, 38% in the last one and a half years? It's all process engineering of these margins. Yeah, it's a skill set what we are opting on the shop floor, and it's continuous improvement. It's not only last three years, we've been seeing since inception. I remember the days we were operating at 80, 90% EBITDA, and the same product line we are now operating at this EBITDA level. So definitely there's some magic happening on the floor. Sure. So you mean the process engineering? Yeah. It is not just process. There are many factors which we should be, if at all, I would love to take you down the floor, and I would like to demonstrate what exactly lies between these margins and what all is lying from 18% to 35%, 36%. Why not we can see further also. We are trying to find where we find, we will pick it up. Understood. Got it. That is it from my side, and all the best. Thanks a lot. Thank you. Our next question comes from the line of Shubhi Gupta with Trinetra Asset Managers. Please go ahead. Good morning, sir. First of all, congratulations on the turbojet engine. My first question is that, since you will be looking at double-digit growth in these kind of projects moving ahead, as you just mentioned, what are the margins that we are looking at for similar projects? My second question is that you have signed the deal with Rolls-Royce for a civil aircraft engine. What is the time period for that? If you could just tell me that. Hello. Could you repeat that question number 1, please? Yeah. I am saying that congratulations on the turbojet engine. Since you will be looking at double-digit growth in similar kind of projects moving forward, what is the margin that we are looking at for these kind of projects? Okay. Thank you so much. We have just finished, we have just made the first engine. Okay? We can never come to a costing out on the first engine. As you know, it takes a lot of time to stabilize in the production. We have been producing the first 20 engines. It would be appropriate for me to answer this question once we have done at least 5, 6 engines in a row, and then we can come to a level what we hold and how do we fare in this. And if you could just tell me what could be the timeline for these four, five engines. I think it is just not far away, 8 to 12 weeks, you can say 3 to 4 months. It is a continuous process which we are going to see. Maybe by next call, when we see or you feel you are free to, you are most welcome to visit us, and we can share more details with you here. Okay, sir. And the Rolls-Royce deal, the time for that? Yeah. I think very soon, within this quarter, I think we should be delivering the first batch of the qualification parts. It is almost finished. The first delivery is quite nearby. Okay, sir. Thank you, and all the best. Thank you. Thank you. Our next question comes from the line of Aditya Bhatia with Investec. Please go ahead. Hi, good morning, team. Congratulations on a lot of positive developments. My first question is on our asset base and the revenue potential from that asset base. In the last one and a half odd years, you have undertaken a big CapEx plan, and including Capital WIP, I think you made entry with maybe INR 1,200, INR 1,300 odd crore rupees of net block, maybe around INR 1,500 odd crore rupees of gross block. Just wanted to understand what will be the peak revenue generation potential from this capacity, at what utilization we may be operating in some of the earlier ships that we have made operational, and how would you anticipate it to be ramped up? Hi, Aditya, Vishnu here. Thank you for your question. Aditya, I think I will take you back to our conversation that we had 3 months ago. This entire Turkayamjal plant that we are building is built with a mindset of building dedicated capacities for all of our customers. We are building 8 plants there, and each of these plants would be dedicated to a certain customer. Right? What is going to happen there is each of these plants overall, without getting into specifics at a customer level, I would like to say that each of these plants are poised to generate at full utilization and full capacity from INR 150 to, let's say, about INR 180 odd crores. Right? That would give you a good sense of roughly about INR 1,200 crores out of the newer plant revenue. Right? We keep growing based on the contracts that we have, we will keep building capacity as well. Our idea is to finish this Plant from a civil construction perspective by this financial year. While the plants are in our control, we are constantly going to focus on improving the utilization and capacity type work on that. Right? We are fully geared up for the contracts that we are supposed to be delivering over the next 2 years in terms of capacity or in terms of infrastructure. We do not have any risk from there. Sure. That makes sense, Vishnu. Vishnu, we also spoke about acceleration in revenue momentum from second half. Is it because of maybe some qualifications that are pending for some of these new shifts, and as they happen from second half onwards, we would anticipate a much stronger revenue momentum? Yeah. I agree there, Aditya. We knew that this is a plant. Maybe last 2 or 3 calls, if you can recollect what I have mentioned. By Q4, we got up these buildings, got the machines inside, done the foundations, do the delta qualifications. Q1 was something we switched on a lot of machines. Production started very slowly. The qualifications were done. Now as we speak in Q2, those machines are now on full throttle production ongoing right now as we speak. Okay? To reflect these numbers, you could see reflection from Q3 onwards, the sales what we do. This is exactly consistently we have been guiding the market last three, four quarters what exactly is the status. That's why what I mean is 80% done is these plants where the machines have been deployed, foundation done, qualification done. These doesn't happen in one week, 10 days. You know that very well, Aditya Bhatia. It takes a lot of time, different customers, travel plans, each and every part being reproduced, re-qualified. That all is done now. 80% is done now and the production is switched on. That's the whole reason we say that we see a major breakthrough coming next too. Understood. Instead of just looking at this one year, let's say we look at a slightly longer-term picture, a three-year period. Then where do you see the company's revenue number kind of settling in? Do you think that instead of this 25%, we should be looking for a much stronger growth, maybe closer to 35% odd on an annual basis as we'll be having capacities, we already have certifications, we already have some decent sized orders. It's just about getting some of the formalities done and we can scale up the business at a much faster pace. Of course, Aditya Bhatia. Of course. See, right now the reason we are guiding 25% plus because we know what situation we are in. As we shift to the next level, we'll change this guidance. Perfect. Okay. Anything else, Aditya? Understood. My second question is, given that a lot of our contracts will be maybe dollar denominated, do we get a big benefit out of rupee depreciation? Is it a case that this year maybe revenues get a lift of maybe 7%-8% purely on account of how forex numbers have moved? To that extent, even if volume growth is somewhat similar to what we are speaking about, in revenue terms, we may end up doing a lot better. See, I would say one thing, Aditya. It can be. It is not a significant number. It can be some few percentages which in large growth of this should not be really taken as an beneficiary thing or it changes the volume. Because we also import a lot of things, right? We also import a lot of things. So it is vice versa. What we see is not a major benefit we see or a major problem to be seen. So we should consider this as a normal thing. You can say it is a natural hedging. Sure. I am saying from the perspective that our material cost is not very high, so to that extent, we do not get significantly impacted by rupee depreciation on the cost side. But we may have a disproportionate benefit on the revenue side. Which is why I was just trying to understand that can it really boost the revenue growth as well? Can it be an additional lever from the perspective of this year, given how sharply rupee has depreciated in the last couple of months? Aditya, Vishnu here. I think, see, we don't look at that largely when we're looking at business growth, et cetera. Our revenue growth is a function of how capacity is coming up online because we know this could be a factor for a particular quarter or for a particular year. That is not really something that we look. But you are right to mention that rupee depreciation could probably help us to an extent of 5%, 6%. That's true. But not that an important factor for us while we are planning our business. We don't look at it from that lever at all. Sure. Understood. Thank you so much, team. Wish you all the best. Thanks. Bye. Thanks. Bye. Thank you. Our next question is on the line of Kamlesh Bagmar with Lotus Asset Managers. Please go ahead. Kamlesh, your line has been unmuted. Yeah. Yeah. Thanks for the opportunity and lots of congratulations to Rakesh and team for achieving the milestones. My first question in regard to your CapEx. Over the last two years, we have done a CapEx of roughly around INR 900 odd crore. Going forward for FY27, FY28, FY29, how would be our CapEx trend? Yeah. Hi, Tanwij. Sorry, I was on mute. Just to quickly address this. One is our CapEx deployment in the current plant will be to bring the balance plants up and to ramp up the existing that have been operational to add further capacity to it. Over the next couple of years, whatever revenue or production output that we need, we are deploying capacity in a phased manner to address that. From a revenue perspective, we are tracking right to the contracts that we have to deliver over the next year. Coming to the second question, yes, you are right to point out that there could be a larger CapEx requirement, given that Azad is surrounded with a lot of opportunities, but this is not needed for the next couple of years for whatever guidance we've given. We need them to collect these opportunities in bag and start working on them so that this could fuel the next level of growth from Azad's perspective. There is a lot of excitement, a lot of opportunities that we're working on right now, and I think maybe in a quarter or so, we should be able to give a more comprehensive perspective that should probably address all of these things at a granular level. Great. I appreciate that. Secondly, you pointed out that you will be guiding next quarter. But can we be looking at, say, investment castings on other segments? Because that also is moving in a big way, and there also the margins are far superior. So can that eventually be looked at in terms of investment and driving the further growth? Tanwij, sorry, I have to reiterate this, but it will be difficult to comment on what opportunities we will be going forward next. Why don't we have a meeting in person? We will show you the kind of opportunities that we are working on right now. But to put a pen down on a particular opportunity and talk about it would be slightly difficult on this call. However, I can only assure you that there is a lot of work across sectors and not just one area that you mentioned. I think there are quite a few areas where there are opportunities that are getting unlocked, and given the bandwidth that we have, given the focus that we have, we will take the right calls and we will be able to update you maybe in the coming call. If there is a meeting that happens in Azad, we will also share the developments that are coming forward in the next few quarters. Great. Lastly, let's say it may be particular to this particular quarter only, but if you see this local peers, the way they have grown, let's say 25%-26%, and that also in dollar terms. So were there some hiccups in terms of stabilization of new lines? Because 23%-24% growth looks to be little less given the fact that rupee depreciation has also benefited us a lot. You see the dollar coming Tanwij, I think we are not comparing the right things, right? These companies have been building capacities or have built capacities several decades ahead of the curve, right? The scale at which they are operating obviously is very different than the scale that we are operating at. We are in the process of starting to run our spindles, right? We are building capacity to address that. For us, like we also spoke with Mr. Job das when he was talking about the quarter, this is the stabilization that we achieved in the last year. Foundation is being set. Now we are at the right point to gain an access to all of these growth drivers that are there in the industry and the tailwinds that are there. It will happen in the coming few quarters, right? I don't see, there are no hiccups. Just because a larger player in this space is growing at a certain rate does not mean we have hiccups, right? They do $2 billion plus a quarter, right? How much are we looking at? We have done 600 crore in the full financial year. I think it's not right to compare that because capacities are online there. They have qualifications. They've been around for decades. I would say no hiccups, again, summarizing it, but the growth is going to unlock basis stabilization that we're doing. The foundation is laid right now, and you will see this in the coming quarters. Great. Best of luck for the future. Thank you. Thank you. Thank you. Our next question comes from the line of Prateek Srivastava with Nivesh Wisdom. Please go ahead. Yeah, thank you for the opportunity, sir. First of all, I think you guys are doing a great job, not just for shareholders, I think even for the country. I think India is very fortunate to have a company like you. My question, because to build a high-precision engineering company, which you guys are aspiring to do with a very high moat, requires a very special kind of talent. My question is on the talent, if you can sort of, because you have also been, I saw that your year-on-year has also gone about 42%. The line item of the headcount. Can you talk a bit about the talent pool which you are hiring to create such moat and such high-precision engineering company which can compete with the best of the world? Thank you, Prateek, for your kind words, and we really appreciate whatever you've said. Now as you've rightly pointed out, I think this is a sector that needs extremely high engineering skills, etcetera. But if you look back at how Azad was built, it starts right from our founder. Our founder was a high school dropper, and he's built the most advanced precision manufacturing company that India has today. That culture is there everywhere in our business from the bottom to the top. You would see that we have several training programs in the organization that bring in normal diploma operators. We put them through 60 to 90 days of training. He has trained people that are now training people. That culture is a continuous program. We've now built an engine of hiring roughly about 150 to 200 people every month, putting them into a 90-day training program. This is a continuous cycle and I think, we think India has the talent. I think India just needs the right opportunity. We are providing a platform to anybody who has engineering skills, and then we are upgrading them to suit our sector. When people are deployed in a sector, they shadow the senior resources and then when they are ready, they get deployed on the real work. That is why you see that we have more people than what we actually require for our revenue, because we are also trying to create a bench strength of people that can be quickly deployed on the floor. Got you, sir. Thank you, sir. Thank you for the opportunity and again, all the very best to you in future, sir. Thank you. Our next question comes from the line of Vasant Bansal with NBG Investments. Please go ahead. Yeah, thank you, team. I have a couple of questions on the P&L side. While I see this raw material cost, last year it was around 12%, raw material cost to sales, and now it is 5%. Can you help me understand what has attributed to this, and is it a sustainable kind of development? Similarly, the employee cost has increased from INR 39 crores to around INR 42 crores. Can you also explain this, what has led to such increase? And is the case with other expenses. Sure. I will take you through the two line item what you have asked me. First coming to the consumption part. Consumption part has two things. One is the raw material cost and other is the process content of the WIP, what is there in the inventory. Raw material, what we are buying till last year are more or less imported and as I told you over previous call also, we have tried to get two mills qualified in India, Sunflag and Ishwar Wire, for few of the critical raw material grades where we are getting the benefit of the cost for one month. Last year we have helped them to get qualified with the giants like GE and Siemens, not for India, but for the global supply chain picture. There we are getting a benefit of the price benefit and also transportation cost benefit since these are the local suppliers which have a very less transportation cost compared to a global transportation cost when we import these materials from overseas, which is around 4%-5% type of situation. That is one lever. The other lever is also the process content, because historically we are taking a lower sales and now the quarter we have closed with INR 170 crores, but we are taking a larger quarter in coming months as K. Menon and Vishnu Malpani has also mentioned in their previous questions and their speech. So that two put together has implemented this particular thing from that particular perspective, and we are quite confident this margin can be sustainable over coming quarters and so. Coming to your second question of employee, as Vishnu mentioned in the previous questions that we don't require that much of manpower to cater to the sales what we are doing. This is for the future sales what we are targeting in quarter 3, quarter 4. Our WIP cycles are around 90-120 days, and we have to keep the inventory into place to cater to the quarter 3 and quarter 4 sales, where all the schedules are running for quarter 3 and quarter 4. That's why you see a employee cost on the face elevated, which will be normalized by coming in quarter 3 and 4, and the absorption will go down over a period of time. Hope this answers you. What about other expenses? What has led to the increase in other expenses? Other expenses, if you see as a percentage of sales, is more or less stable. I don't think it has increased. The major costs that include are the power cost, tool cost, stores maintenance, and the job work which we do the outsourcing are the four, five major heading to that. You can go through the schedule of FY 2026 published to the annual report, and if you have any further questions on that, more than happy to discuss the individual line items. Okay. Now the other question, which is more of a strategic in nature. From your opening remarks and also from the various question answers, one gets the impression that everything seems to be good and company is moving into a very positive direction. What are the challenges that makes you worried? Yes. Hi, sir. Thank you. This is Vishnu here. Sir, I think challenges are also the same. While we are looking at doing this, from an execution perspective, this is a complex thing. Because if you imagine what we are attempting to achieve as an organization, our team put together, we are building factories. At the same time, ramping up capacities in some, hiring people, training people, growing and catering to all contracts. This is a really large execution thing. For us, we are trying to do everything right. From our perspective, we have all the opportunities. I think it's just about stitching all of these things together. We have the right customers in the sector. We cannot have better customers there. All the customers that are noteworthy in the sector are with us. We have the best long-term contracts which give us visibility over 5, 7, 8 years. We have capital, we have capability, and we have consistently proven that we can deliver over time. I think it's all there. It's just about achieving each of these things. All of these things have to work together for us to achieve all the milestones that we set out. So that, in my view, I wouldn't say it's a challenge, but it's something that we are all aggressively focusing on. Understood. This is a thing that every organization has to go through when they're scaling up. So we are attempting to do that in our own way. Yeah. I understand. The last question from my side is, what is your hedging policy to hedge your export receivables? Sorry. I didn't hear your question correctly. Can you repeat that, please? Yeah, sure. My question is that since you have exports, what is your hedging policy to hedge your export receivables? Yeah, to do that, we have some foreign currency loan, which will make it a natural hedge. As I mentioned that we are going for bill discounting line. The moment we book the sales, we get the bill discounting in the future. That will help us to take the natural hedge direction going forward by quarter 3 and quarter 4. Okay. So that covers your entire export. You have a natural hedge to cover your entire export? Entirely. It will be hedged by quarter 4. By quarter 4, we have all the bill discounting facilities that we will use. Okay. Thank you. Thank you, Vishnu Malpani. Thank you. That is all from my side. Thank you. Ladies and gentlemen, we will take that as our last question for today. I would now like to hand the conference over to the management for closing comments. Over to you, gentlemen. Hello. Yeah. We would like to thank everyone on behalf of Azad Engineering, our Chairman, our Board of Directors, and all of us in the team. We would like to thank everyone for joining us today and for your continued trust. We are excited about the phase that Azad Engineering is in. The quarter you have seen and the milestone on 22nd of July tells you where we are headed. From this point, we are only looking upwards and onwards. Thank you again. We look forward to speaking with you in the next quarter. Thank you. On behalf of Azad Engineering Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.