Ladies and gentlemen, good day and welcome to the Data Patterns (India) Limited Q3 FY25 Earnings Conference Call hosted by Go India Advisors. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Monali Jain from Go India Advisors. Thank you and over to you, ma'am. Yeah, thanks, Vico. Good morning, everyone, and welcome to Data Patterns (India) Limited Earnings Call to discuss the Q3 and nine-month FY25 earnings. We have the senior management of the company on call, Mr. S. Rangarajan, Chairman and Managing Director, and Mr. Venkata Subramanian, Chief Financial Officer. We must remind you that the discussion on today's call may include certain forward-looking statements and must be best noted in conjunction with the risks that the company faces. May I now request Mr. Rangarajan to take us through the company's business outlook and financial highlights, subsequent to which we'll open the floor for Q&A? Thank you, and over to you, sir. Thank you, Monali. Good morning, ladies and gentlemen. It is my pleasure to welcome you all to our Q3 FY25 Earnings Call. I hope you had the opportunity to review our earnings presentation, which is available on both the stock exchanges and on our website. Before Venkata presents the financial results, I would like to share some key updates and highlights for this quarter. While we faced certain delivery deferments from customers, our overall execution momentum remained strong. On the profitability front, we achieved better EBITDA margins, standing at 40% for the nine-month period. In Q3, as highlighted in our earnings release, we maintained an order book of INR 1,184 crore, including orders worth INR 89 crore negotiated till date. This is driven by two and a half times growth in order inquiries, which stood at INR 240 crore for the quarter, bringing the total of the first nine months to INR 324 crore. We remain optimistic about delivering strong growth and are firmly on track to achieve our full-year revenue growth guidance. We anticipate a major ramp-up in the Q4 and remain confident of achieving 20% to 25% revenue growth by 2025, while maintaining strong EBITDA margins at 35% to 40%. In the Q3, a substantial portion of our revenue and order inflow was driven by the exports market. From the outset, we have focused on developing and designing our products in India, and we are now intensifying efforts to introduce and expand the presence of our indigenous products in international markets. This shift towards export marks an exciting and positive development for the company. We remain dedicated to securing additional export orders, and our current international order book is a testament to steady growth and successful diversification within our overall order pipeline. Our international order book stands at INR 106 crore as of 31 December 2024. With a robust bidding pipeline, we target INR 20 to 30 billion in new orders over the next 18 months. Our dedication to research and development has led to the creation of several new products, which we plan to showcase at the Defense Expo in February 2025 in Bengaluru. These innovations will enable us to participate in larger opportunities in the medium and long term. We are strategically deploying funds to accelerate product development, with a substantial portion allocated to expanding our R&D capabilities. This investment is driving the creation of next-generation products aligned with emerging industry needs and technological trends. We have progressed in the value chain by developing integrated systems with reusable building blocks, drawing on our core strengths. This has helped us expand into important global markets like Europe and East Asia, where we are now effectively competing with major OEMs. As we move forward, our focus is on growing our addressable market, where we would now shift our focus towards complete systems. Our aim is to establish ourselves as a systems supplier, addressing not only the needs of India but also those of other countries. With a trained workforce and improving delivery capabilities, we are well positioned to meet the demands of international markets. As of 31 December 2025, our order book stands at INR 1,095 crore, with growth observed across all verticals, where development and production contribute 47% each. In Q3, we secured a production order for EW worth INR 80 crore, a production order for radar worth INR 53 crore, and a production order for avionics export worth INR 53 crore. We recently saw the Indian government allocate INR 6.8 lakh crore for the defense budget in FY25-26, marking a 9.5% increase from the previous year. A substantial INR 1.8 lakh crore has been earmarked for upgrading military capabilities, with 75% of the modernization budget dedicated to indigenous weapons and equipment. These create opportunities for the defense sector as a whole. Overall, we are committed to sustaining a growth rate of 20% to 25% while maintaining EBITDA margins between 35% to 40%. With that, I will now hand over the floor to Venkata for his remarks. Thank you, sir. Good morning, ladies and gentlemen. We are pleased to share the highlights of our financial performance for Q3 and the first nine months of Financial Year 2024 to 2025. Let's take a close look at the results. During the Q3, revenue came at INR 117 crore, up by 29% quarter on quarter. Development contracts contributed to 37%, production contracts to 59%, and service contracts approximately 4% of Q3 revenue. Radar and ATE were the highest contributors to the revenue at 62% and 18%, respectively. Our order book remained strong at INR 1,184 crore as of date, including the orders negotiated, driven by growth in both development and production contracts. We achieved an improvement in gross margin to 80%, up by 1,260 basis points, driven by a favorable product mix. For nine months, revenue stood at INR 312 crore, down by 7.5% year on year, but with a strong gross margin at 76% and EBITDA margin at 40%. Our net debt-free balance sheet reflects our potential financial management. As of December end, we hold over INR 575 crore in cash and cash equivalents, underscoring our financial strength and liquidity. As mentioned by our CMD, we are on track to meet our stated guidance of 24 to 25 with a 20%-25% growth in the revenue. With this, I open the floor for Q&A. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Dipen Vakil from PhillipCapital. Please go ahead. Thank you for this opportunity. Congratulations on great margins, sir. Sir, my first question is, over the years, we have moved from a revenue guidance of closer to 30% to now to 20% to 25%. Sir, I want to know what are the challenges that we are currently facing because of which we are not able to target high growth, and what kind of triggers are expected, or what kind of triggers are we looking for in such a way that we can expect a growth of closer to around 30% going ahead, sir? You gave me a table like a good market. The market order book doesn't happen on a year-on-year. If a growth is many years behind, before the order happens, it takes sometimes three years, five years, or eight years, depending on what we did some years back. The contract starts happening now. Of course, the conversion rate to contract can be much quicker in the coming days, but having been where we are as a defense industry in India, that is how the actual contract happens over a period of time. Today, of course, we are increasing it, so whatever we did many years back, the contracts are coming as repeat contracts now, and some new orders and development contracts are happening, which is what we are driven today in the revenue growth we've seen today. Going ahead to say what triggers are necessary to increase the scaling or increase in revenue growth faster, we need to have an addressable market which is larger and build products that further address the market and see that those initial entry orders that we've been, which are tested, based on which repeat orders, production orders start happening. That could be the trigger point. So what we've done actually is raise money to build products to increase the addressable market to INR 10 to 20,000 crore. Once we increase the addressable market, develop the products, position it, go through the process of acceptance, and then the contract should happen, which will scale growth substantively. There are two things which have to happen. One, the growth rate has to grow faster. Second, we need to have an order book for a few years, not one and a half, two years order book. We need to have an order book for three to five years on hand. We expect to do this over a period of time, and that is the reason we are doing very internal R&D, tremendous product development we're doing, so that the company can be propelled to higher growth and also have a stable order book which is at least four or five years, three, four years at least, so that we can have predictable growth patterns in the coming years. Got it, sir. So my next question is that, so recently, so Defense Secretary as well has mentioned that there are some heavy ordering expected in the next couple of months. And this quarter, somehow I was not able to see the order inflow guidance for full year. So what is the order inflow guidance that you are expecting for FY25? And while I understand that you have guidance for INR 20 to 30 billion in the next 18 months, so can you highlight two to three major orders which are expected, which are there in that INR 20-30 million guidance? I wouldn't want to get into very specific programs because, see, bidding happens in these programs. It will be not correct to open forum to discuss which order I'm expecting in which contracts. So I would rather not get into that. That That is why we're giving overall guidance. But I'll tell you this, we have another couple of months to year-end. There has been a shift in the order intake, and the shift in certain amounts of products, decision-making has taken some time. But we have not lost those contracts. The contracts are still firmly in our hands in the sense that the bidding will happen, and we should get those contracts. So given the next one-year time frame, I think we should be able to build the orders, keeping in line with our next year guidance, which we will talk about in the next session. After a year-end closing, we'll talk about it. We'll have far more greater numbers in our hand in the next three to four months' time. Then we will be able to give you some guidance to take this forward. I can give you overall general is that there are major programs that have participated, and products have been accepted, and those bids are about to happen, in the process of happening. Some we've already quoted. So the decisions have to happen. I'm not in control of when the decisions happen, but I think in the next few months, those decisions will happen. The orders will come. We've predicted some of those orders even for next year deliverables and taken advanced action on that. That is an internal decision we've taken. But at the point in time, I wouldn't want to give you exact details of the order book in an open forum. Maybe another three, four months from now, we'll give you better guidance on that. Got it, sir. And last on, sir, on the execution side of it, sir, we have seen a degrowth of 16% this year, largely attributable to the delay in deliveries because of the client's request. Sir, so that has impacted us for the Q2 or Q3 in a row. So when do you expect this to turn around in terms of delivery starting to happen, or maybe offset this by execution of some other projects because that is leading to degrowth in our overall numbers now, sir? Yeah, we are working on both strategies, as you said. We are engaging with the customer. We expect that we will be able to get some kind of clearance to go ahead in the next few weeks' time. Products are ready. So once that actual testing is done, we will ship it, hopefully, this quarter, Q4. We expect to ship those products. But like you're saying, in the eventuality, that is not happening. We are also working on some products we have planned for Q1 of 2026. We also plan that we expect to keep the delivery in the higher-up schedule. So working on both strategies so that our guidance remains, we're able to continue to deliver our guidance. Got it, sir. Sir, and exports, sir, on the export, so this time we have seen a huge growth in our export revenue. So can you tell us from which area have we got these export orders, and what kind of execution are we looking at going ahead in exports? See, these are all very preliminary export contracts we've got. So it's a welcome thing for us. The only thing which I would like to say here is, see, we've been a product development company. It is very nice to know that our products are going to European markets, very advanced Western countries, and where our IP has been accepted. So we started quoting a few places. We were successful in last year. We got these orders 14, 15 months back. We developed the entire product, a radar contract, of course, modified existing radar, but it's a completely new design. This has been delivered, and our customer has accepted it. So going ahead, we want to see that more products we develop in India, we want to see that this is showcased abroad. So we are planning to set up a proper marketing organization in the coming year to see that we will start looking at exporting. It will take time to graduate large orders in export and get a substantive business there because we need to have a fielded product, go through the process of quoting. Maybe the quoting to printing orders will be faster in the Western countries than it is in India today because of the process, which is more cumbersome here. But we have to go through the processes. So we are in the process of building an organized structure to address this. But before we do that, we need to have products which we can be marketed. See, till now, what happens is in India, we've been only subsystem suppliers. We need to graduate the system supplier. Then those products are exportable. So we are working internally to build the products which are export-worthy, then take it back to export. So this is going to be a slightly medium and long-term kind of an approach. But yes, we are starting on it. To come back to your answer, what areas? Here we worked in one area which was given as an exercise in radars. Initial orders have been in radars. But over a period of the last seven, eight years, we've been developing some avionics for a European customer. And that we continue to deliver on a month-to-month, not only on a quarter-to-quarter basis, but on a month-to-month basis. Their orders have gone up. Consequently, their subcontracting order sources come up. And here we have designed the product. It is not a build-to-print production contract with no margin. That is not the way we have done it. It's all our IP, developed products, and gone ahead. That is accepted. Customer is happy, so increase the volume of business here. Now we're producing multiple systems per year, month, and they're very happy with our performance. Even during COVID, there was not one month delay in our product. They're very happy with this. They're considering other programs for this. There have been a lot of visits from foreign large OEMs to our office factory. They are quite impressed with what we have achieved here, so in the months ahead, I think we need to engage with them to carry through this process to see that we start getting initial trial orders with them, new customers, but these will be perpetual orders. If we get the first orders and successfully implemented, then we're not really depending on one customer here, but their own marketing capabilities and their order book, part of it will come to us, maybe a small part, but it will be a sustained revenue. So we're going to start building that capability going ahead, and we think with Aero India also is going to expose us to a number of foreign OEMs who visited us and want to come there, and we've had some time slots appointments made there. So this is a process, but I think they like what we're doing. They like the engineering. So I believe that we're in the right path to see that we increase our revenue in exports. The second thing also we're doing is not only building the products, but also building a lot of people with capability. You can't take an order and not deliver. And then we want to kind of surprise them with delivery ahead of schedule, faster than what they would imagine. For which we need to create infrastructure in India to see that the development, delivery, and manufacturing is in pace, the expectations are very fast delivery which we can do. So we now cross more than 1,000-odd engineers in the workforce, in 1,500 people we have. And they're recruiting more engineers. They are getting trained in our existing development, what we're doing for DRDO and others. They're doing their own development. They're getting trained. So a lot of trained manpower is also getting done. And use this as a foundation and then start exporting is what we're thinking because it has to go global as you go abroad. Yes, the large market is India. This is the only time when India has opened up to Indians. And on defense and aerospace, the excitement is very much here. We have to address this market. But this is a capital intensive market. It is a government-driven market. It is a zero-to-one market. So we need to also buttress it with export orders, with IP from India, so that the bottom line also is taken care of. Build that and then take it to export, in which case we have steady revenue, month-on-month, quarter-to-quarter revenue also will come in there. So this kind of balances the kind of capital intensive market, government market which we are addressing in India. So we need to have a mix of both. And we're building an organization to do that. We're going to invest in infrastructure, equipment, and development to see that they're gearing us up to see that delivery model can happen along with the marketing infrastructure we're going to set it up. Got it, sir. That's really very encouraging. Sir, thank you so much for answering my question. Just one suggestion on your PPT, sir. Some of the disclosures have been reduced, especially on the new order wins, maybe on the client side of it. Request you not to decrease the disclosures because that really helps us to see the trajectory of the company. Yeah, purposefully we did it, Vakil, because I don't know when it is going to open market. As you asked me a question, I'll give you a direct answer. I don't know the impact of all these answers in the open market. So that's the reason we are trying to not give specifics on every order, who gave the order kind of thing. So we'll internally discuss with our management and board to find out what line to draw where and then come back to you. Thank you, sir. The next question comes from the line of Jyoti Gupta from Nirmal Bang. Please go ahead. Good morning, sir. Good set of numbers. I anticipated, I mean, our numbers are in line. Two questions I have. One, while moving to exports is actually fared well for the company because of the kind of products that you're making. My first question would be, will the margins be better than what? Because last year, the entire story was about indigenization because of better margins and not looking at exports. But now everybody is moving to exports. Is it because the margins look better compared to what we are anticipated going forward? Second thing is, while I understand that two things that there have been delays, but the two numbers, which is inventory days, which has increased from 187 from 155. Your cash conversion cycle, do you anticipate in FY25 this to be elevated, or is this going to come down from 187 in FY25 and cash conversion to actually improve by the exit of FY25? Okay, I'll take your question two first and one later, well, details will make it, I can give you. I'll just immediately react on your inventory days. What's happened is I've been informing this, what is it? We went ahead with two large contracts for radars. We said margins may not be very high, but it is necessary to build capability to build complete systems, and it's a very large space radar kind of thing. So we have, in the last one and a half years, designed the radars. A whole lot of material is blocked in manufacturing. It's a large radar. It's a very, very large radar. So a lot of material is blocked in terms of manufacturing, and it's a long gestation in terms of development and manufacturing gestation and test gestation. So, a lot of our money on inventory is actually more than 60% of the inventory, which is actually only on these two projects. We expect to deliver one project by end of this March and probably Q1, Q2 next year. We expect to deliver the rest of the product. So once we do this, the inventory will come down substantially because it is driven by two main orders, which is going to go out and delivery is happening. So that is on one hand. And taking as a trailer to this, we expect the inventory days to come down and going ahead whatever next year because this kind of inventory-oriented contracts may not normally we don't take. But because the complexity of the product is so, so high, we said it is necessary that this kind of complexity, we need to design from scratch and build a competency which is unmatched in India. So we took up this contract with very low margins. But we have taken that because it is a problem. We need to do two things. Capability building has to happen. And that has to be demonstrated capability. It is not that I say I have capability. The capability comes in product demonstrations. That has to happen to build confidence to larger customers to look at us going along to how to build scale a few thousand crore company. We need to have big, big contracts. So for that, we said this is going to be a baseline. So we took the contracts. And based on which, we have learned a lot on these contracts. So there is addition and capability. So that has happened. But normally, our product mix is very different. And it's all IP-driven and not material-driven. And that is what we've invested in the last nine months also in EBITDA margins. And the last one is the same. It's all IP-driven. As against other companies, we buy and integrate. We design everything in-house. Of course, it takes an enormous amount of effort and pre-development and a whole lot of R&D expense and things happened in the previous years. But we tend to write off all those things on the year of realization of product. We don't capitalize it, except for the large products where we've taken money from the market. We're building CapEx. Otherwise, on the normal products, we do R&D where we get an order and we build development. We do not capitalize this revenue. We write it off. So it's what's happening. So the second question is, yes, it is going to come down. The reason for this is only two contracts. Coming to your first question, why are we going global? Why some emphasis on export? Is it because we get higher margins there? No, that's definitely not the reason. When you do a system in India, we would expect to get a higher margin in India. There we are doing part of a system because when you export complete systems, it's a different problem. Again, we are getting it into all the OEMs on the subcontract development and testing and equipment here because they also look at a cost multiple which is lower here in India than in the U.S. or Europe. So they're looking at it at a slightly lower price. So really, we will not go for export just for the margin. The margin, I think we should drive it out of Indian business. If foreigners compete in Indian business, their margins on a system level, I think, comparatively, we have a lot of advantage in doing in India, especially IP in India. Without sacrificing large margins, we still be able to compete effectively with the foreigners. And since everything is foreign in India today, I think it gives a level playing field to see that. Why don't you build those products and compete with the foreigners in India. So that is the business we are in. And we continue to put a lot of effort in this. Follow this. Once you build the product, there are a lot of other areas, company, countries like India who are used to buying some products. We'll start exporting to those countries first. That is the product mix which we're doing. The other portion of exports we're doing, subsystems on development and delivery for the foreign OEMs, is they get a number of years of business ahead. They plan ahead. And so it allows us to give you quarterly revenue, monthly revenue, stabilized revenue process, which can mix both CapEx, tender business, and a revenue business which goes month on month. So it is a good mix to have. And this has been discussed internally. We said we need to, since we have a capability to build world-class products, we should expand our shores, get more marketing because we have been very engineer-driven, inward-looking company all along. Now we want to say that now we are a public company. We should not prevent ourselves only to look inwards. We should go out, start looking export seriously. So we just started doing this. It's only beginnings in our life. I think next three to five years, we should really go into it because we need to have both the mix, not only in India. We also have to get export and be a well-rounded company. So that's the reason why we're doing it. Okay, so one last question on the avionics part. Now, when we heard the BEL saying that they'll be delivering a lot of EWs for the LCA Mark- 1, while the LCA Mark- 1 platform itself is delayed, should avionics and you even have one of the products which is your intermediate jet trainers. Is the delivery for LCA for you also happening, or is it somewhat a bit staggered because how come the BEL is making deliveries for LCA Mark- 1? And is it the same case for you, or is it not? Every problem is industry problem. So we are not alone, and nobody is alone. We're all together in this. If a big program gets delayed, then there is an impact to all of us. If the impact for BEL will be more because they are larger suppliers and nominated basis, they get a lot more orders. We get smaller orders, so the impact will be less. But on a balance sheet, on a P&L of ours, the impact matters. So what we need to do is to not allow this impact. We must have an order book. We need a four-year order book, mix of contracts, mix of programs so that we can mix and match and deliver and take care of our shareholder interest and revenue positions we make. We need to do that. This is what actively the company is doing in terms of strategy, product development, and marketing. We need to scale up all of them to see that these small things should not affect the company performance. One or two things should not affect. It is affecting today, which is not good. So we need to strengthen areas where it will not have an impact on us. We're working on a strategy to see how to do this. Thank you. May we request that you return to the question queue for follow-up questions as there are several participants waiting for their turn? Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to one or two per participant. Should you have a follow-up question, we would request you to rejoin the queue. The next question comes from the line of Lavina Quadros from Jefferies. Please go ahead. Yeah, hi, sir. So I just wanted to understand a flavor from you on there are a lot of concerns that whether in India, defense indigenization is going to get slowed down, defense spend is going to get slowed down, ordering activity will slow down. I wanted to understand from you, are you seeing any changes on the ground, particularly? So this budget commentary has clearly not been for CapEx anymore. But just wanted a sense, but defense spend has been good. Wanted a sense from you on what is the kind of movement you're actually seeing in terms of ordering activity, tendering. If you could just give your thoughts, thanks. Actually, our interaction with MOD senior IAS officers and MOD people by personal interaction has been very positive. They are looking at modernizing processes, are looking at lacking processes, delaying procurement activities, also providing a level playing field to industry, which are the DPSU alone. They're looking at all of these things, and I think MOD is concerned that there are delays, and the delays are not acceptable, so they're looking at processes to see how we can quickly do things. The activity is on. We're promising to see that major changes in processes will happen to allow more industry participants and faster ordering. It's going to happen. Matter of fact, I think Defense Secretary has recently joined online to say that he's going to see that industry is going to give a lot of orders. So I think they are serious, and they do know that the bureaucratic issues should not slow down this process. Second, we are looking at the international context now. The necessity that India has to defend itself very strongly, and we need to, and our PM and the government are very clear that indigeneity in defense is a mandatory requirement to make it a strong country. No country with zero defense or limited defense capabilities can be strong. All of us understand that, and more so our Prime Minister, so he's very clear that it has to be indigeneity, and the PM was very clear, so there is not going to be any let up in my mind. I think if at all you see with the international outlook what is happening in the international world, we should rededicate ourselves to do much more in India and faster in India and believe in ourselves, give opportunities to see that we can go through the opportunities, maybe fail a bit, but we'll get up and run. But the opportunity has to come from government because they are the users. We would strive, and we will also emphasize that they should do more, to do more in India and enhance capabilities in India and develop and deliver in India and also go global from India. I don't think any one of us are thinking second or thinking that this is not happening. We are very, very bullish about India and the process. There are changes, delays, but we are bringing up notes to ministries to say that we need to look at it. We need to look at it slightly differently. We have done this five, six years one way. But yes, we have built up capabilities, but that is not adequate in Indian context. We need to do more. So all of us are starting to do more, and I'm sure the government is behind us, and we're going to encourage us to do more. I have no second thoughts on this. All right. So lastly, one more aspect. I know everyone's asked about exports already, but let's say between a lot of commentary on government-to-government discussions on exports of products, be it to Southeast Asia, like for example, orders were expected for HAL, BEL. There have clearly been quite a few delays. Now, just generally, again, are you seeing scope for pickup on that side or any commentary that, let's say, the larger companies start getting orders sooner? Because eventually, it will trickle down to you, apart from your own individual efforts in those countries. Any thoughts over there? Thanks. Okay. See, I'm not too prudent nor we are not part of that kind of nominated export contracts which DPSUs get because the government is on contracts unless some part of it, small part, gets from us. Clearly, we are not looking at this and planning ahead based on it. And I don't want any more government delays or product delays to affect us. So we need to go outside the system. We want to be on our own. We'll contact the end users, the OEM, B2B customers, not B2C, probably. Some B2C we have done, but through B2B. So the big OEMs we need to contact, get contracts from them on an individual basis, not because of it going through a DPSU. That may or may not happen. We are not really focusing on that. If it happens, it happens. It happens in spite of me. I've not done anything for that. So I'm not really going to focus on it. We're going to do our own homework, our own effort, our own products, our own marketing reach, outreach, and then give very competitive, high-value products to our customers. So this is what our effort should be and the direction should be. We need to work on that. I don't think we should work on these areas because the market is so big and opportunities are there. If we are able to gear ourselves up, build products, and give reasonable pricing and quality products, I think we should get this. But it's going to take time. It's because nobody trusts an Indian developed product overnight in the Western world. They're not used to it. So it's going to take time to break the barrier, get the first initial contracts, prove that it's working, get the buy-in and say that they're happy. Then they'll find the advantages because there are a lot of advantages when people like us get to give products and OEMs because they are also plagued with the same problems of 20 years support, 25 years support, outsources of electronics. And the larger OEMs in the U.S., European market, they keep on giving new products based on new components coming in the market. They keep doing this, and they start obsoleting their older products. But these older products are still in line in life with the products delivered to end customers. So they have a lot of problems how to maintain those. Companies like us will go the extra mile in maintaining products for 20 years, stock components for 20 years, maintain them because we need it. We are hungry. We are hardworking. So we will ensure that our customer is happy. We will not let go of customers. So it's a good thing for both organizations to work like this together because we have a need to do such things. So I'm thinking that we should expand the marketing organization and also the infrastructure to deliver quality products much ahead of time. That's what we want to do in the next three years. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to one per participant. Should you have a follow-up question, we would request you to rejoin the queue. The next question comes from the line of Renu Baid from IIFL. Please go ahead. Yeah, hi, sir. Sorry if I missed this in the start of the call. If I look at the YTD inflows, it's been quite weak, and we have reiterated INR 7 to 8 billion of annual guidance. So if you can help us with where are we placed with respect to L1 orders and orders where we expect closure in the next three to four months, that would be helpful. Also for next year, what set of large orders do we have certainty which are a part of the INR 20 to 30 billion order inflow guidance that we are giving? I don't know what L1 contracts we've done. We only have tenders open. We can do this. Yes, we've asked to do an excellent L1 in some contracts with INR 13 crore, but we are going to build more of those contracts, but it belongs to us, and so we become L1, so we're going to do that. We are going to participate in a number of MoD contracts directly, so we are in the process of doing it, but we can't give you a projection on all of them because only when the tender bid is open, we know whether L1 or not, but on the guidance itself, while yes, there is a lot of slippage in the programs which we actually planned for this year and next year, the contracts have not happened because of some events delaying the closure of these contracts. But we have not lost the contract. Contracts are still live. We expect that this activity is happening at the customer end to see that we quickly release tenders and close those contracts. I think in the next five, six, eight months' time, those contracts should start coming in. That is why we say the INR 2 to 3 billion we're talking will be there. There are major programs. Again, based on disclosure, what we want to do, we don't want to specify the programs because I don't know how this is related to the open market. That's why we keep inquire. Earlier, I was telling everything. When Renu asked, I explained everything. Today, slowly, you have to excuse me to say I'll be a bit more circumscribed in what I say. And I'll give you general guidance. There are big programs hopping. They've got delayed because of monetary reasons, clearances in the government. So that is all. If If it's happening, we'll do. And a lot of new programs, DRDO has got a number of new programs sanctioned, and that level of sanction, money sanction has happened. So they're all in the developer stage now. And I think we are very advantageous positioned in those programs, having developed the EW capabilities where all of them are required. And the complete system capability we have achieved in this, we believe we are very well positioned to take a portion of those contracts. But again, I don't want to name the contracts, but yes, we have done that. We have also done a lot of products which are being approved. We're hoping that those products will be approved by the users. If they approve those products, back-to-back contracts will be INR 200 crore in each of them. So we are working both DRDO and us are working together to see that the approvals are acceptable to the users and users back-to-backers rather than importing the products from abroad. So we are working actively. I've also made representation to MoD to do this. So I hope all this will pan out. But the path direction is right. What we're doing is we're convinced the direction is right. There have been delays, but I think this will get compensated in the next few months. I will be more specific, Renu, after about three, four months. Once more clarity comes in the product, then exactly quotations happen, then timelines are very clearly visible. But I will tell you, post-contract, I'll tell you which contract I got. Thank you. The next question comes from the line of Arafat Saiyed from InCred Research. Please go ahead. Yeah, hi, sir. I hope I'm audible. Yes, yes. Yes, sir. Please go ahead. Yeah. So my first question is on your deferment of contract. So can you quantify the number in this quarter which got deferred for the next quarter, or how is that things will pan out? Okay. No, no, no. No problem. This is about total deferment contracts is about INR 70 crore. One is actual product available should have gone last quarter or the previous quarter, got deferred again. So that is about INR 20 crore. And the other product, we made it ready because the export contract will happen. But the contract happened very last minute. And what happened is the inspection process has been initiated. The product is ready for dispatch. But based on the customer need, we got the product up. But there was an MoD requirement. The contract got delayed by three months. We received the contract, but when it was ready, I expected it to come for inspection. So I then shipped it. These are two. There are other program products which orders were expected some of the deliveries happened, but the order has got deferred. So there are a mix of these kind of things. Got it. And second, sir, can you just please guide on the order pipeline for the next couple of years? If you can say some quantum, how much amount you're looking to bid over the next couple of years? I'll give you this in another few months, Arafat, because we have now some of the programs which we thought would happen last year have got postponed. I don't want to talk out of turn and take ownership for something which I cannot take ownership. So let me wait for it. I think the clarity will come in the next two, three months that these contracts will start moving again. Then I'll be able to tell you properly. So that is one. Second point is we have done a lot of development in the last 15 months. We've done some world-class products. The complete products have been designed. We want to showcase them in India. This is the next week. We expect that the users, the senior users, senior people will visit us and have one-on-one dialogue with them about how we use these products and which is urgently required by the services, so we expect that some kind of a positive reaction has to happen. We worked very hard the last 15 months to make this possible, and it's really truly world-class products we've done. We all require INR 2,000 crore of each is required by the users, so we hope some breakthrough happens and they take this seriously. If they take this seriously, we need to work the next few months to convert them into initial contracts, and after flight testing and other things, we'll be getting into larger contracts, so that is a part. We are well, from our side, we've done whatever we can in terms of capability demonstration and product demonstration. Now we need to wait for the user to do the policy framework and see what to do and take interest in it, so I'm just saying that we hope in a few months, we will have some more clarity how it turns out, and then I'll be able to tell you before to the investors that this is the direction it has. Thank you. The next question comes from the line of Abhishek Singhal from Naredi Investments. Please go ahead. Good morning, sir. Thank you for taking my question. Sir, my question is relating to we had raised INR 500 crore for product development. When will that development be completed, and when will revenue start coming from this development, and how much revenue will come from this INR 500 crore QIP? And second question, what kind of order book are you expecting end of this financial year? Thank you, sir. Yeah. See, the agenda financial is not very clear because only 50 days is available to financial year. Maybe some contracts will happen. We are working towards some contracts, maybe INR 100 crore, something like that. We are working on a contract conversion. But if they have it this way or that way, it may take a bit longer. We do not know. But the larger contracts which we are quoting for is going to be all of INR 200 crore. So this will happen over the next year or so or a year or so. A number of those requirements for the products for the contract will happen. A lot of development will happen ahead of time. So we'll be in a position to deliver much ahead of time, much ahead of requirement compared to normal organizations who start from scratch. So that is how we are developing products. Coming to your first question on QIP implementation, we've nearly spent about INR 100 crore already for INR 80 crore on product development, mainly in five, six categories. I think that is also, I think, announced. I'm not sure exactly what we've done. Okay. So we have done that, INR 84 crore or something. We have capitalized on this. This is basically on radars. One is on radars. Second, we need EW suite. Third is in software defined radios. Fourth is some Make-II programs we are participating in. And five, six, and a few smaller items which we are participating in putting products together. The important thing about all this product development is we've made a building block so that even in the existing new contracts which we are going to bid with DRDO or wherever, the building blocks are developed for specific products and reused in these programs. And all of them require what is called a no-cost, no-commitment trial. You need to trial, give a demonstration to the customer before you short-select them to the commercial bid opening. So to allow that to happen, people import and then integrate or represent somebody and do. We are saying we build the building blocks, we reuse the building blocks, and go for participation in the trials, which allows us to also look at a bigger portion of the addressable market with our products. So that is how we have done. So there are two-pronged attack in how we are building products. So it's all come now. Some of the products which I talked about development, a portion of the development which we have done and products have been finished or almost finished, we're going to showcase in India. So that is what we've done. We put a large money in this development of satellite. We have slightly deferred the satellite development initiatives because I'm not very confident how the business model works. Initially, we were thinking that it would be a large business model, but with all the startups and a whole lot of IDEX and things like that and pricing and small companies and startups being preferred for certain things, I do not want to take a step on investing INR 200 crore in product development, which will actually take about two years of satellite development to launch and maybe third year to start getting a contract or so. And how will government change their mindset? I'm not very clear, so we have not, though we have a full confidence in the satellites. We launched the satellites. It's all working for 24 months now. We know every part of it designed in-house. Also, the sensors itself we designed in-house now. But because of lack of clarity, we'll not put that extra. With more clarity coming from the Ministry of Space, maybe we will also attempt doing that as going ahead next year or so. Today, we have stripped ourselves to areas where we see low-lying opportunities, low-hanging fruits, where we can be first-come kind of opportunity advantage. So we're trying to put that in this area. We have spent about INR 85 to 88 crore now. And we have money in the kitty to spend more. So we are cautious about spending the money. We have cash on hand. We're very cautious about spending the money because we've been very clear that it is going to happen. So that's where we are today. Thank you. Our next question comes from the line of Garvit Goyal from Nvest Analytics Advisory LLP. Please go ahead. Hi. Am I audible, sir? Yeah. Sir, please go ahead. Good morning, sir. All of my questions are answered. Just one question. Like you mentioned to some previous participants, you expect getting clearance from customers in upcoming weeks. But let's say we don't get that. So then also, do you still believe we will be able to do INR 320 to 350 crore kind of top line in Q4 via a different product mix and delivering to different customers? So that's my question, sir. Yeah. That's what we're working on. We are trying to prepone some of the contracts in light of this doesn't happen. But we are very positively indicating to customers that it will likely take place in the next week, two weeks or so. They will come here for inspection and go ahead. And in this case, we can deliver it in March. So we're hoping that we will continuously engage with the customer. But nevertheless, we're also taking some alternate action to prepone some of the other contracts for next quarter. We're doing both, Garvit. Thank you. The next question comes from the line of Alisha Mahawla from Envision Capital. Please go ahead. Hi, sir. Thank you for the opportunity. Just wanted to understand that since we were mentioning that some of the development contracts that we've taken, which will be executed over the next few quarters, with slightly lower margins, exports also is not delivering, is not offering margins superior than the domestic business. So can we expect the margins to now start gliding lower and probably end at the lower end of our expected margin band? You know what we're doing is we are trying to build a product mix that some are lower margins, some are higher margins. We're focusing such a way that our bottom-line business, whatever we are talking, goes straight to you and to our investors. It's not margin-wise. We don't want to reduce that. So we believe we should keep the lower margin. Your EBITDA or whatever may come down. But the bottom-line PAT, its revenue will go up because margins are lower. The PAT percentage may go down. But the PAT, as an overall PAT, compared to last year, this year, we will retain growth margins as predicted to you as permitted. So that is what we're doing. So we'll have a mix. I don't think we should get into really a situation where I'm going to give you less margin, lower PAT kind of numbers in the coming quarters. We will try to mix delivery in such a way that that doesn't happen is what we're aiming to do. Thank you. There are a number of our own IP products, so we expect that that will compensate for the loss of margin in some products. Thank you. Ladies and gentlemen, due to time constraint, that was the last question for today. I now hand the conference over to the management for closing comments. Thank you, everyone, for joining us on the Q3 Investor Call. Yes, I understand there are various questions and concerns which have been brought up by you. We are also well aware of that. We are taking the remedial action to see how to do this. We are on the right path. We are doing product development. A host of IP is being generated, and large products required by India. They're looking towards India to develop. We're in a unique position. We're positioning ourselves very well there. Products are coming out actually very well. A couple of European customers have come. Heads of the institutions have come and seen the products and are very happy with the engineering, so all of them have given us a good recommendation that we will have to work with you going ahead. This is being done by you. It's such a large team. We will be very happy to work with you. I expect things to happen. I think the path is very clear. We're also investing ahead to see that once we get a contract, we're able to execute contracts in time and ahead of time. We're also putting infrastructure, not only in terms of test facilities and manufacturing infrastructure. We're also putting trained manpower and building capability across the board. We're also spending money. We want to spend money in the coming year. There are a lot of IP infrastructure in terms of PLM licenses and this and that, which will become a backbone to become a large company. We need to scale to a large company. And whatever is necessary to scale to a large company, we are doing on capability, on infrastructure, on IP and backbone, and also on people training, scaling of people capabilities. All of them we're doing. I think we are doing the right direction. An enormous amount of money is getting spent in product development. We will see it coming in the book. Hopefully, some contracts will happen in the next two quarters to say that, yes, we've gone in the right direction and we've got orders which will scale. So that also will happen. And the third initiative we are taking now is trying to slowly start moving up the export chain. So we are going in that direction. Again, it is all coming out of capability and product capability driven. From a competency model, we are trying to build products. A lot of people worried whether when you go export, the margins will come down. I don't think so. What we were trying to do is not akin to services model. We are doing a product model. With the product model, yes, we have to be competitive with respect to certain countries from their OEMs or subcontractors. But that does not mean less margin in my mind. I think we will do this properly. It's my belief. More and more orders we start getting, I'll be able to say what is the calibration we need to do, how do we want to do this further. We'll understand from our experiences. But I think we are in the right direction. And we are very, very bullish about growth going ahead. The orders have got delayed, but I think we will continue to get the contracts, large contracts. And we're very well positioned in all those large contracts because the products are proven and it is all flying, very reliable, and it is advanced. And we built an organization where actually people will come there. They're very happy to see the engineering capabilities which are built over the last two to three years' time. So I think the direction is right. So we will continue to press on the direction of what we're doing and look towards how to scale markets. Thank you very much for listening to me. Any other questions you have? Kindly mark it to Go India, and we will see that every question of yours is answered. Thank you very much. Have a good day. Thank you. On behalf of Go India Advisors, that concludes this conference. Thank you for joining us, and you may now disconnect your line.