Ladies and gentlemen, good day and welcome to Jyoti CNC Automation Q1 FY 2027 earnings conference call hosted by Anand Rathi. Before we begin, a brief disclaimer. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not guarantees of future performance, and it may 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 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 Mr. Aniket Jain from Anand Rathi. Thank you, and over to you, sir. Thank you. Good evening, everyone. On behalf of Anand Rathi, I welcome you all to Q1 FY 2027 earnings conference call of Jyoti CNC Automation Limited. We are pleased to have with us management represented by Mr. Parakramsinh Jadeja, Chairman and Managing Director. We will have opening remarks from the management, followed by a question and answer session. Thank you, and over to you, sir. Thank you, Aniket. Good evening. Good evening, everyone, and a very warm welcome to our Q1 FY 2027 earnings conference call. Along with me, I have a senior management team and SGA, our investor relation advisor. Results and presentation have been uploaded on the stock exchange. I hope everyone has had a chance to go through the same. I will begin my opening remarks with an overview of the economy, followed by industry and company's operational and financial performance. The global economy has witnessed a challenging FY 2026, with the geopolitical tensions creating uncertainty across markets for significant part of this year. The conflict in the Middle East disturbed global supply chain and energy markets, leading the volatility in crude oil prices, raw material costs, and inflation. These developments have created an uncertain operating environment for businesses across the industries. FY 2027 has begun on a relatively stronger footing. Geopolitical tensions in the Middle East have moderated, with greater restraint being shown by all countries. While the outlook has improved, the global environment continues to remain sensitive, and any fresh geopolitical or trade-related disruptions can once again impact global supply chains, commodity prices, and cross-border trade. In today's interconnected world, no economy remains insulated from global events. India had to witness the impact of higher crude oil prices and supply chain disruptions during the past year. At the same time, these events have reinforced the importance of building the resilient and self-reliant manufacturing ecosystem. While India has traditionally been recognized as a service-led economy, there is now a clear policy focus on strengthening our domestic manufacturing as a long-term driver of economic growth, employment generation, and global competitiveness. The Government of India continues to accelerate the country's manufacturing ambition through initiatives such as Make in India, the PLI schemes. Higher infrastructure spending and the development of industrial corridor sector-specific policies are also driving investment across key industries, including PLI, incentives for mobile and electronics manufacturing, increased private participation in the space sector, continuous focus onto defense indigenization, and policy support for automotive industry through EV and advanced manufacturing initiatives. Together, these measures are strengthening India's manufacturing ecosystem, attracting investments, and reinforcing the country's position as a preferred global manufacturing hub. As a company, we are closely aligned with this structural growth opportunity. Our businesses is a direct reflection of manufacturing activity across the country as our CNC machines enables customer to expand our capacity, improve productivity, and manufacture with greater precision. Speaking about the machine tool industry, the global market today is estimated around $85 billion-$90 billion. China remain the largest consumer of machine tools, followed by the United States, reflecting the scale of their manufacturing ecosystems. India's machine tool market, while currently estimated at around $4 billion As with an inflection point, as manufacturing investments accelerate across the sectors, we believe the domestic market has potential to grow multiple times over the next decade. Despite this opportunity, India continues to depend heavily on imports, with nearly 60% of domestic machine tool demand being met through imports, primarily from Japan, Europe, and South Korea. This presents a significant opportunity for import substitution as Indian manufacturers increasingly look for reliable, technological advanced, and locally supported solutions. Domestic machine tool companies are well-positioned to capture larger share of this market while contributing to India's vision of becoming a global manufacturing powerhouse. Coming to the key updates during the quarter for standalone businesses. During the quarter for Jyoti in India, we continued to witness a strong demand from general engineering, automotive, EMS, defense, and other precision engineering sectors. This reflects increasing capital expenditure by manufacturers, rising localization initiatives, and continued investment in expanding domestic manufacturing capabilities. The demand environment remains encouraging, with customers increasingly looking to automate operations, improve productivity, and enhance manufacturing precision. We recently launched a new product, NX, a high-precision double column machine. The product is targeted to cater primarily to railway sector, along with the commercial vehicles, infra, power, and heavy engineering. These type of machines was largely imported previously, and we are confident we will receive encouraging response from our customers. India demand is reflected in our standalone performance. Q1 FY 2027 revenues witnessed a robust growth of 37% to INR 107 crore as compared to same period last year. The profitability front as well at Q1 FY 2027, EBITDA adjusted for Forex losses stood at INR 145 crore compared to INR 99 crore in Q1 FY 2026, with margin of 28.4%, an increase of 190 basis points. Reported EBITDA stood at INR 137 crore with margin of 27.2%. Q1 PAT stood at INR 88 crore, growing by 21% over same period previous year, with margin standing at 17.2%. Speaking of the global operation at Huron. Globally, demand continued to be led by the defense, aerospace, and general engineering. As customers globally continue to invest in advancing their defense and manufacturing capabilities, we believe the long-term demand outlook for high technology CNC machines remains robust. Speaking about operation at Huron, I'm pleased to share that all operations are running smoothly and are in full swing. There have been no disruptions to order intake, project schedules, or overall operations at Huron facility, reflecting the resilience of our team and processes. We're also witnessing steady improvement in demand environment across multiple industry sectors. Ladies and gentlemen, the line for the management has been dropped. Please stay connect while we reconnect them. Ladies and gentlemen, the line for the management has been reconnected. Thank you, over to you, sir. We are also witnessing a steadily improving demand environment across multiple industry sectors, which gives us confidence in healthy order inflow over the coming quarters. Based on current market trends and the customer engagement, we remain optimistic about building a strong order book for Huron. Huron continued to be a key pillar of the company's long-term growth strategy. Its advanced technological capabilities, strong engineering expertise, and established global presence significantly enhance our ability to serve customers worldwide. As we continue to leverage Huron's strength, it will play a critical role in expanding our global reach, accelerating innovation, and delivering world-class CNC machine solution to customer across diverse industries. Our financial front at consolidated basis. Revenue for Q1 FY 2027 stood at INR 508.5 crore compared to INR 410.2 crore in Q1 FY 2026, a growth of 24%. The consolidated number also include INR 35 crore in revenue from Jyoti CNC to Huron, which get netted off in consolidation. Further, the Q1 FY 2027 and Q1 FY 2026 are not strictly comparable as in Huron. We have moved away from our accounting method, which led to lower revenue recognition in Q1 FY 2027 as compared to Q1 FY 2026. At which time we are following a percentage completion method on a certain terms and condition. On a like-to-like basis, our consolidated revenue should have been higher by more than INR 30 crore. Q1 FY 2027 Adjusted EBITDA stood at INR 119 crore compared to INR 100 crore. Adjustment was on account of unrealized Forex losses to the tune of INR 10 crore. Adjusted EBITDA margin stood at 23.4%. Reported EBITDA stood at INR 109 crore with margin of 21.4%. Q1 PAT stood INR 57 crore in a margin standing at 11.2%. Overall, both our standalone and consolidated businesses continued to benefit from a healthy demand environment. Historically, the first quarter has been seasonally a softer period for machine tool industry, with customer ordering activity generally picking up in a H2 of the year. We expect a stronger H2 this year as well, supported by a healthy demand pipeline across both domestic and international market. In addition, our new manufacturing facility is scheduled to commence operation by the end of September, which will significantly enhance our production capacity and enable us to better cater to the strong demand environment. As a result, we expect the H2 of FY 2027 to be particularly robust for the company. Overall, the demand environment today is so strong that we are running at close to our full utilization. Our plant operation at 86% capacity utilization in Q1 FY 2027. Underscoring the need for the capacity expansion that we had announced earlier, I'm pleased to share that our expansion project, which will add the capacity for 10,000 machines annually, is progressing as planned. Installation of machinery is well underway. Our operating team has already been put in place, and we have proactively built up raw material and inventory over the past nine months to ensure a smooth production ramp-up. We remain on track to commission the new facility by the end of September. Following which we will be in a position to cater to strong domestic and international demand, our pipeline while supporting our next phase of growth. Our revenue continued to be well diversified across the end user industries, reflecting the strength of our business model. During the quarter, 37% of revenue came from aerospace and defense, 35% from automotive and auto components, 17% from general engineering, 6% from electronic manufacturing services. The balance 5% came from other industries. Moving to our order book, we continue to maintain a healthy and diversified order pipeline. As of today, our order book stands at INR 4,848 crore, providing a good revenue visibility for the coming quarter. The industry-wise order book comprised 38% of order book from aerospace and defense, 20% from general engineering, 19% from automotive and auto components, 13% from electronic manufacturing services, and 4% from die and molds, and with balance coming from the other sectors. For a detailed update on order inflow during the quarter, you can refer to our investor presentations. On machine sales front, we sold 1,406 machines during Q1 FY 2027 compared to 1,117 machines in Q1 FY 2026. The product mix was as follows. Entry-level machine sales stood at 1,349 compared to 994 last year. Mid-range machine sales stood at 33 compared to 104 last year, and high-end machine sales stood at 24 compared to 19 last year. Overall, we have started FY 2027 on a strong footing with healthy revenue growth, improving profitability, and robust order book. Demand continues to remain encouraging across key sectors, while our upcoming capacity expansion will further strengthen our ability to capitalize on the opportunities ahead. With a strong manufacturing base, continued investment in technology, our partnership with Huron, and a clear focus on supporting India's manufacturing transformation, we remain confident of sustaining our growth momentum while creating a long-term value for all our stakeholders. With that, I would now like to open the floor for question and answers. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may please press star one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star 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 is on the line of Harshit Patel from Equirus Securities. Please proceed with your question. Thank you very much for the opportunity, sir. Hi. Sir, firstly, on your CapEx, as you mentioned that the additional 10,000 machine capacity will come on stream in September 2026. What will be our overall CapEx outgo for the full year FY 2027? Because there will be some maintenance CapEx as well. Just a follow-up to that, on our relevant backward integration, foundry, sheet metal fabrication, machining, all those things, they will also come on board in September 2026? Thank you, Harshit. Let me come back to, one by one, your questions. We targeted at close to INR 450 crore of a CapEx for our new capacity over there. Until today, we are on to a same target line. We are on the track, absolutely on that. Another of your questions about the detailing. Today, almost our 80% of machine shop is already the factory has been constructed, machine has been put up. Already we started to partially machining and everything is already started. Only the part of automation that we are going to do it now and then it will improve our more and more manufacturabilities over there, about the machine shop there. Sheet metal shop, the building is about to finish now, and all the machines we already received. Once the building has been handed over from these days, within a week time, our installations and everything is going to start. Parallelly, our paint shop also, the building is getting ready in this week. Basically all the equipment, everything is put inside and installation is going to start from this. Only the foundry part, that is running little late. We are expecting this foundry to be finished in October. Right now the foundry equipments and everything is going to come in September, and we may take at least one month additional time to that. Apart from that, assembly building is also ready now. Assembly building is ready, machine shop is ready, sheet metal is ready. Only in foundry, we will have a one month to wait over there. Almost you can say that 99% we are on time. Understood, sir. Perfect. Sir, secondly, on our working capital position, as you mentioned in your opening remarks, our current inventory levels are slightly elevated because we are planning for the upcoming execution ramp-up from the H2 of FY 2027 onwards. How this inventory position along with both receivables and payables, how this metric will look like at the end of FY 2027? Here I'm trying to understand how will our working capital and the operating cash flow generation will look like for the full year. Basically the last year, Harshit, we started to ramp up. Today, you see that we are close to now INR 5,000 crore order book. We have ramped up every our procurements since last nine months. With this new facility is coming up and execution will set right nicely after the new facility, we are expecting to, the working capital in inventory stage is drastically removed, improvement we will see. In terms of operating cash flow, we are expecting to very positively surprised to be seen. Understood, sir. Perfect. Sir, thank you very much for answering my questions. I'll come back in the future. Thank you, sir. Ladies and gentlemen, in order to ensure that management is able to address questions from all the participants in the conference call. Please limit your question to two per participant. The next question is from the line of Rabindra Nath Nayak from Nirmal Bang Securities. Please proceed with your question. Hello. Good evening, sir. Thank you for. Good evening, Rabindra Nath Nayak. Thank you, sir. Sir, congratulations on good gross margin. It is a significant growth in the gross margin, despite very low sales in Huron. The other figures like the staff cost and also the other expenditure in quarter-over-quarter basis has increased. Whether it is due to the new capacity that we are building, the interest cost also has gone up. You mentioned that with the foreign exchange loss, our EBITDA is around 23%. I am referring to your past call that we mentioned that whatever may be the realization, INR 34, INR 36 or if even realization go to around INR 30 lakhs, our margin will remain 24%-25%. How will you reconcile all these things to actually to a 23% margin in this quarter? Whether there is some capacity cost we have built in in this quarter so that our margins are low. Can you comment on something on this? Thank you. I will come to the next one. Thank you, Rabindra. Our standalone margin has improved very well. It means we are completely on a cost and everything has nicely been there. Even though individually, we have a 27% plus, and we always guide it to the people to at 25%. Right now, what we are seeing is the difference are coming in Huron. We have made the revenue close to INR 35 crore in quarter. Compared to the last year quarter, it was close to INR 70 crore. We missed this INR 35 crore additional revenue. Due to this, our new accounting structures and all. We have produced, but we are not able to bill them. The cost and everything has been loaded there. That is how it has been looked like. We have INR 35 crore of material has been transformed from India to there. That in consolidated revenue, it has been net off, and that is why this revenue has not been seen to be higher there. In terms of a margin, we are absolutely on track. Once the revenue comes in coming quarters, been booked in Huron, it will be restated to all the margin to be there. Okay. Sir, interest cost has gone up. Why we are not capitalizing the interest for the new capacity that you're going to build? Basically, we have fully booked into cost over here. Anyhow, the capacity is going to start in this year. We are going to utilize from September onwards. Partly already we started using the building up of this all our components and all. Okay. Already we have put to use. There are many things we have put to use there. Okay. That's how we are able to improve from our third quarter. If I have not put to use, and if I start everything from October onwards, then I can capture the revenue from next year onwards there. Okay. Already we started, so we put to use, and then cost has been incurred, so we cannot push into any capitalization over there. Okay. If we compare it of like-to-like basis, whether it is right to estimate that of around INR 20 crore- INR 25 crore of additional cost we have built in our cost, for which the margin is down? No. Basically, if you look at that, see, the margin, I told you that revenue has not come from Huron at close to INR 35 crore. That's supposed to come as compared to the last year first quarter. Okay? If you calculate this margin, we miss the margin of INR 20 crore-INR 22 crore. Exactly over the same margin we miss there. Okay. Sir, one suggestion, if you give the Huron's performance on a quarter-to-quarter basis, that would be helpful. Instead of discussing in the conference call, if you can give it explicitly, that would be helpful for the investors to actually analyze the things properly. That is a suggestion. Sure. There was a Forex gain that we have not accounted because if you could have accounted for that in this quarter, then the YoY, the things would be better. We have got INR 10 crore loss. Last year it was INR 20 crore of gain for us in the Forex time. Like-to-like basis, performance would be compared properly. Sir, the new machines that you have just discussed in the opening remark, what type of machine and what is the realization? Also, what is the import currently India is doing for this import machine? Basically, this large size of a machine are coming mainly from Taiwan, Korea, are the main supplier of these particular machines. The machines are more than five meters range We have built up the six meters, the new first model. Then another machines we have put up right now under development is eight meter and 10 meters also. Particularly for the heavy engineering, last year India has import more than 300 machine of this categories there. Value for this machine is close to INR 3 crore- INR 5 crore in between over here. We have just been developed and the target industries is right now the railway is also expanding big way there. We have received some of the orders in this quarter also against this machine for the railway component suppliers over there. Okay. Is it a three-axis machine or the- Sorry to interrupt. Rabindra sir, may we request that you return to the question- It has been last question. Okay. Yeah. Rabindra, this is a three plus one. This machine is a five-sided machine, but not in a five-axis simultaneously there. Okay. Thank you, sir. Thank you. Thank you. Thank you, sir. The next question is from the line of Saif Sohrab Gujar from ICICI Prudential AMC. Please proceed with your question. Yeah. Good evening, Parakramsinh sir. Good evening. Just one question around the Huron thing which you mentioned at the initial part of the call regarding one of the machines where I think the approval was pending because of it is in inventory, right? Is that correct, which I have? Correct. Comparing it to the last call which you had highlighted, it is about the licenses which I remember, right? Correct. Machine, I think the controller has to issue approvals. Correct. Is that approval received now, is it a timing issue or is it still due even post June, sir, for this specific machine? No, particularly it's not in a one machine, specifically all the export license is right now they are taking a longer time there. Okay. We are in a waiting mode there. Once we will receive the license, it means there is a certainty for the machine to be dispatched, then only we can able to book this into our revenue to be there. This is the method, very conservative method been adapted by the local authorities and the local auditors over there. That we have adapted over here basically. We are in a very strong positions. Our two to three meeting our management has done with the authority there, and they are very much positive. They are looking to the end user client and all, and they will clear very soon there. Got it. That's it from my side. Over. Yeah. Thank you, sir. The next question is from the line of Bajrang Bafna from Sunidhi Securities. Please proceed with your question. Sir, congratulations for decent set of numbers on a standalone. Of course, there is- Thank you. Some ambiguity on the Huron side. I'll be little more specific to get the clarification done from you. Since you already pointed out, I'm just putting in perspective. Earlier, we have adapted percentage completion method, and now we are booking revenues on Huron once the machines are dispatched. Since the complete dispatch was not there in this quarter on the Huron side as compared to what we have exported some material to Huron, we have seen the revenue dip. If we would have adapted the earlier method, then revenues would have been higher by close to another INR 30 crore-INR 35 crore, which would have flown to EBITDA, and the comparable EBITDA would have been much better than what it looked like in this quarter. Is my understanding right, sir, to understand- Absolutely. You have understood as perfectly right. I already stated into all past two questions also. Correct. Absolutely. Let's say if this method has been not set, my top line which should be INR 35 crore more and INR 22 crore margin should be more there. Correct. Now, sir, going into Q2 precisely, can we expect that some dip that we have seen in Q1 in terms of dispatches of machines, can they pick up in Q2 or we have to wait for the H2? Can we expect some sort of pick up in dispatches of machines in Q2? Yeah, basically- Margins. Yeah. Basically, we are looking to be this particular things has been changed only in the last three months. Okay. It started from Q1. Okay. Now we are expecting Q2 is much better. We have a local machine. Those are the machines are going to be prepared and going to dispatch. We are not waiting for the end user certificate also. We are significantly we are expecting Q2 numbers to be improved there first. Okay? Gradually, I will tell you one thing. These are the long-term, long, large machines, and the manufacturing times are longer. It is lumpy things are coming up. One third quarter and fourth quarter, we will see the bunch will come. Ultimately, we are producing and keeping there into WIP there. One day it will go out, and we will see the nice results on coming quarters to be there. Okay. Sir, I am just trying to conclude it. The earlier practice was that since the lumpiness was not there, so numbers were looking smooth because of percentage completion method. Absolutely. Now, few quarters might see more dispatches, few quarter might see lower dispatches on the Huron side. It is better for us to look at the yearly picture rather than quarter- on- quarter EBITDA margins. Is that understanding right? Absolutely. Machine tool company, we need to see a yearly basis only there. Okay. Sir, still we stand by with our earlier guidance of close to 25%-30% growth on top line and maintaining the EBITDA margins in the range of 25%? Absolutely. We are fully committed. We are on way and we have demonstrated, if you look at that, even this situation also, we are close to 23.4% at margin and growth also is close to 24% at consolidation level also. We are on track, and we are absolutely going to deliver 25%-30% as guideline has been given and margin also to be maintained there. We are fully confident on that. We'll deliver that. Thank you, sir, and wish you all the very best. Thank you very much. Thank you. Thank you, sir. The next question is on the line of Aniket Jain from Anand Rathi. Please proceed with your question. Hi, sir. I wanted to check on the EMS market. Is the demand environment improving there? Can we see some good ordering in the couple of quarters that are yet to come in this year? Maybe that's question one for EMS ordering. Okay. What is the question number two? Sir, question number two is also on the accounting change that you have done. If I understand correctly, there'll be some huge lumpiness in the revenues, basically INR 30 crore-INR 35 crore. We may see INR 30 crore for Huron in one quarter, and that may increase to INR 100 crore in next quarter. Eventually the run rate was about INR 70 crore, that was historically done. Correct. Doesn't that create a lot of lumpiness in the EBITDA margins also? It can go to probably 30%-31% when the revenues are higher and come down to 23%-24%. How do you look at the margins, the sustenance of margins then? I always say that, Aniket, that first of all, the machine tool company, we are not a quarter- to- quarter. Okay? Anyhow, we are here. We manufacture the very large machines and also it will going to happen, we will see that things. You will also able to understand the complete cycle to be there. There is a part and parcel of the business, we will see that things basically. Regarding the EMS, we are fully busy right now. It's not converted into a order, because all my customers also are developing their own capacity. Many customers are waiting. Now there is a new electronic manufacturing component PLI scheme and the enhancement up to INR 40,000 crore. Many of customers are waiting, and then they get the clearance. Right now, we are fully more than 200 our people. Those are working with those our customers and developing each new processes, toolings, the programming and supporting them. We are fully equipped to support to them. Once they are ready, we are also ready. Basically right now, our capacity also will come up. They all are looking to us over here also. That today we are almost 90% utilization levels are there. Already we have a big order book are in our pipe, and we first like to execute all these things first. Understood, sir. Very clear. Thank you so much for answering. I will get back to you. Thank you, sir. The next question is from the line of Arafat from Dolat Capital. Please proceed with your question. Yeah. Hi, sir. I'm audible? Hi. Yeah, absolutely. Sir. Thanks for taking the question, and congrats on strong stand-on performance. My first question is on your realization. If you look at the realization per machine blended, it's come down in FY 2026 to around INR 38 lakh from INR 40 lakh-INR 45 lakh in FY 2025. If you look at actual number, what you discussed in the 1Q FY 2027, it's further down to INR 36 lakh. Just want to understand, it's mainly due to the, let's say, machinery or the sector or which has drive this lower realization for the 2026 and also 1Q FY 2027? If you look at that, the last year, the first quarter, was 1,100 machines are there. This year, we have increased the number of machine to close to 1,406. Okay? The last year, the first quarter average was INR 34.41, okay? This year, it's close to INR 34.56. It's almost similar there. Okay? We will be in a range in coming days, because the way number of machines and capacity on entry-level and mid-level machines are increasing. We will be in a range of similar in coming quarters or one or two years to be like this. Got it. Got it, sir. Next question, a bookkeeping question. You said the total CapEx for this 10,000 machine goes to INR 43 crore. I think if you look at for the 2026 CapEx, I think it's somewhere close to INR 300 crore. Just want to understand what CapEx we have done till now in FY 2026, and what would be your CapEx for FY 2027 in terms of numbers. In terms of this year, we are going to do up close to INR 200 crore-INR 225 crore. Balance of this INR 150+ some maintenance CapEx and all kind of things. Okay. Can we assume again INR 300 crore CapEx for this year as well? No. It is not going to touch to INR 300. I told you that INR 200-INR 250 in between. Okay. Fine. Thank you, sir. Got it. Thanks. That's it from my side. Thank you, sir. The next question is from the line of Shwetha from iThought PMS. Please proceed with your question. Sir, firstly, a clarification. In the beginning, you said that this quarter's capacity utilization was 86%. Can you tell me what the capacity was for that utilization number? Basically, it's 6,000 machine a year. Okay, if I was not wrong earlier, for FY 2026, we said around 90% utilization. That's why I wanted to confirm that number. Correct. The last year, let's say at the end of the year, we built 5,550 machines there. Okay. Yes. Okay, sir. Thank you. My question is, even though the ASP declined this quarter, we saw an improvement in the gross margin. Is that how it is going to be going forward, even as the entry-level machines ramp up with the new capacity? That's why I am telling, let's say, the gross margin ultimately with all model mix, I always guide it like that. We will be at EBITDA level at 25%. We may sometime go plus, but business model has been ensured like that, we'll be nearby that. Okay, sir. Lastly, one structural question. Are you seeing any signs of replacement demand, like machines that were imported 20 years back or something that are getting swapped with Indian machines now? Yeah, there is a lot of new demands are coming, particularly in the last July. We have seen historically highest order book today now. Every area, demand is coming up. We first time in a local market, local equipment is in India, we crossed more than 1,000 machine in one month. Specifically, every industrial area is growing, but particularly the area I'm coming from. Let's say Rajkot alone, Jyoti has booked more than 250 machines in July there. It's a massive demand. All day now, we have been witnessing the people, those have been used our machine in 2000- 2005, they are replacing. Even new capacity been add on, Many new things are coming there. See, the last year, none of the Indian machine tool company, we were having the capacity. Import has surged. Okay? Import has increased to now in the last year has reached to 62% of total India's consumption there. Okay, sir. Got it. Thank you, ma'am. The next question is from the line of Saurabh Vyas from Systematix. Please proceed with your question. Mr. Saurabh, your line has been unmuted. Hello. Please proceed. Am I audible? with your question. Hello. Yes, sir. Hello. Hi, sir. Thanks for the opportunity. First question regarding the Huron accounting one. As of now, we took this stance because of the ongoing investigation in the Huron capacity. I just wanted to understand that if we get this investigation concluded, and if this investigation comes into our favor. Going forward in the next year, we will be again going back to the percentage of completion method or the Huron facility specifically will be accounted as on the basis of deliveries? No. See, the principle of account is no more connectivity with our investigation and all. Basically, the uncertainty is happening due to geopolitical situation, and end user certificate is an important parameter there. Previously, it was not that important there. Now, they consider this is the uncertainty of the deliveries. Until that certainty will not been come over there, they will not book. If I get, let's say, the end user certificate within three months of my order, I can able to book a POC in there also. Got it. Just, sir, one more question on the new CapEx. Basically, we will be adding around 10,000 of machine capacity in the coming quarter by September. What number of machines that are we looking from this incremental capacity to be booked by FY 2027? What I said that we will be grown up by 25%-30% this year. Okay. That already we have estimated, and we have been given the guideline there. You can make calculation based on that, because right now, the last year, we have built almost 90% of our capacity. You can say that we are going to cross more than 8,000 machines this year. 8,000 machines. Perfect. All right, sir. Thank you so much. Thank you. Thank you, sir. The next question is on the line of Dev Gandhi from Fortolio Investment Managers LLC. Please proceed with your question. Yes. Hello, sir. Thank you for taking this question, and thank you for addressing all the questions very clearly. I just had one question on the parent subsidiary. First, can you just explain me the rationale behind changing the accounting policy? Secondly, the total loss that the subsidiary has recorded are approximately of INR 30 crore. Can you just give us the bifurcation of how much that loss has occurred due to operational and probably delay in sales issues, and how much is purely due to accounting purposes? Basically, I'll tell you that, this year, last year, first quarter, we did close to INR 7 million turnover. This year also, we have manufactured the machine up to INR 6.5 million, but we are able to build up to INR 3 million there. Additional INR 35 crore revenue we have missed, but all the cost has been incurred there. Okay. That is the difference are being seen into INR 30 crore of a gap there. Okay. Sir, the rationale behind changing the accounting policy? See, the rationale behind the accounting policy is that today, now this end user certificates, okay, is getting too much late there. Okay. With this, investigation has been started. The auditor has taken a very conservative steps, based on the accounting standard and French GAAP over there, any percentage of completion method, if any of your dispatches, if there is uncertainties are there, you are not able to book those revenues, basically. Uncertainties means that you have received the order, even you have received the funds also, but your government authorities, they will not clear, you are not able to dispatch. You are not able to book this revenue to be there. Okay. Just one clarification. We are just awaiting the certification and completion of this investigation. Once these two things- Absolutely. Get sorted out, we'll just- Both things are different. You remember one thing. Investigation is a different parameter and end user certificates are different there. Yes. Okay. End user certification, dual use end user certification, we need to take any exports from Huron to there. Not today, even in past also. Okay? Previously, we used to get the certificates very fast. Today, the timeline has increased there, basically. Sir, any reason for the timeline to stretch? Geopolitical situation. Those guys are, all they are, it's a defense ministry. They check every individual user. Let's say today, if I received the machine order from HAL, okay, and if I have to export, let's say give machines to HAL, and I'm using a Siemens controller. Siemens has to take this permission for HAL from German defense government there. Okay. From government defense there. Okay. They will give the clearance based on the users of these machines. Okay. Every time they ask something, we go to our customers. Let's say we are right now waiting for many of our Chinese customers and Turkish customers to getting the clearance over there. Okay. Once the authority asks something, questions, we have to go again to that customers and getting the documents and going back. This is how it's a process has been increased there. Okay. That is quite insightful, sir. Thanks a lot. Just if I may squeeze one more thing. On the U.S. citizen side, can you give any timeline as to when this entire thing will get sorted out? We will be normalizing things, basically. I don't think so. We are not seeing very near future to be let's say they are not, geopolitical situation is such that we don't see that it is being finished in one month or two months, like that. Okay. We are sure the way authorities are being responding to us about licensing and all. We also, our team went and meet them. Definitely, they are going to improve the timeline over there. Got it. Thank you so much. That is very insightful. All the best. Yeah. Thank you, sir. The next question is on the line of Aniket Jain from Anand Rathi. Please proceed with your question. Hi. Thank you for taking my question again. I wanted to check whether these export licenses are required when we are manufacturing the machines in India and exporting from India as well. Is it just a Huron-specific issue? No, every machine tool company. Let's say, today I'm in India, and whatever the machines I'm manufacturing, the machines are simultaneously five-axis, and if I have to supply to any of the customers. The license, let's say right now, I'm buying this controller from Siemens. If tomorrow I buy a controller from FANUC or a Siemens anywhere, they have to obtain this license from their authority to be there. Understood. Right now, Huron is in Europe. They are making a machine. They have to take there. Okay? Okay. I'm buying a controller from Siemens is taking this basically in behalf of us there. Understood, sir. Got it. This was the question. Thank you, sir. The next question is on the line of Abhishek Jain from CRIS PMS. Please proceed with your question. Thanks for opportunity, sir. Sir, as you mentioned that you are not able to book around INR 35 crore revenue in this quarter. Otherwise, revenue to be around INR 65 crore. Sorry to interrupt, Abhishek sir. May we request? Sorry to interrupt, Abhishek, sir. Your voice is very low. Hello. Are you able to hear me now? Yeah. Now is correct. Yes, sir. Sir, as you mentioned that you are not able to book around INR 35 crore revenue in this quarter, otherwise, revenue to be around INR 65 crore on the Huron. Right. Just wanted to understand what's your full year guidance for the revenue of Huron in FY 2027, and what EBITDA margin can we expect from this year? Okay. Basically, that's the correct question now. Huron, we are expecting close to INR 300 crore-INR 325 crore of revenue this full year. On the margin side, what margin we can make on the Huron in this year then? Basically, at EBITDA level, we will reach at Huron level at close to 8%-10%. Eight to 10%? Yeah. Okay, sir. My next question on the CNC controller, as you are developing your own CNC controller. Just wanted to understand, what is the progress right now, and when we can expect commercial deployment of CNC controller? Basically, we are manufacturing, let's say, designing and developing drives, motors, CNC. Today, our HMI is ready, and I think commercialization will happen in the next two years' time. When can we expect the CapEx for this commercial production of the CNC controller? Right now, we have already applied for the PLI. We are eligible, and we have been applied there. We already now our plans are ready. Once we will get the clearance, we will make a plan to commence there. What would be the incentives for the PLI, sir, in terms of the percentage? Today, in terms of a capital subsidy is close to 25% from the central government. Similar, whatever the central governments are giving is the same amount matched by the state government. You can consider close to 50% there. Got it, sir. My last question on that customer qualification program, which you are running with the semiconductors and with the Apple. Just wanted to understand what is the progress over there. Already many customers we have been qualified, and many we are designing and developing the processes for them. Yeah. It is going greatly. In beginning also, I said that we have more than 100, 200 people are connected with them and developing the many more product for them basically. Okay, sir. Thank you, sir. That's all from my side. Thank you. Thank you, sir. The next question is on the line of Kamlesh from Lotus Asset Management. Please proceed with your question. Lotus Asset Management. Yeah. Thanks for the opportunity, sir. Sir, I'm apologizing for the question. Sir, what processes we are taking up in terms of improving our HR, then our financial operations, particularly CFO side, and our audit system. You may be looking at lot of these things circulating on the media, social media as well. What steps we are taking to improve our systems, internal systems? On the given the fact that we are in such a good position and we are doing remarkably well, 10% market share in terms of CNC market. Internally, what we are doing better on improving the processes. I ideally believe that you should change the auditor. These steps should be taken because it will further improve our visibility in the investor community, because these are literally dragging our overall perception. First of all, Kamlesh Jain, I'll tell you one thing. The improvement is always is an continuous improvement. Okay? This is the ongoing process all the time. Every company has been growing from small to mid-size to bigger size, and they're evaluating and improving every day by day there. Okay? You look at with your perception, and we are also taking into account on this area, but we are very much always in improvement side in terms of the quality, in terms of the processes. We are a ISO 9000 company. If we are not in a good in terms of this HR best practices and all this, we cannot have a work with the world's largest and biggest customers to be there. They will not qualify to work there. If you look at that, our customer base and all, if our processes are not into place, none of the customers. Your suggestion, we will take into consideration, and we will see that. Always we are improving, and we'll further improve to be more there. Yeah, I appreciate that, sir. Secondly, and we really look forward to that too. Despite having such a strong performance, we continue to hear a lot of complaints on that front. Kamlesh Jain, without people, performance never comes. Understand that. Yeah, I do appreciate that, sir. Okay. Without a good quality work of the people, we should not able to reach on this position there. Sir, on the Huron side, you told that we would be doing INR 300 odd crore in this year and 10%-11% margin. I believe that is on the Huron side only. I said 10%-12%. No, I'm trying to understand that. That is only on the Huron standalone basis. Whatever components which we are sending from India, so that would be having their own 20%, 25% margin built in that. Absolutely. For a company as a whole, on INR 300 crore, would we be making, say, 25%-30% margin because? Absolutely. The machines in Huron are. Absolutely. Yeah. 10 odd% is primarily on the Huron standalone basis. I said that Huron. Someone has asked to Huron performance, so I said at Huron level there. Okay. Sir, secondly, on the percentage of completion method. When I go to your annual report for FY 2025, we used to have been following that practice in accounting treatment as well, revenue recognition. I'm really confused that whether it was adopted in FY 2026 itself or, because it has been the practice in the previous year as well. I'm really confused on that part, whether we have followed now or it was there in earlier years as well. Kamlesh Jain, this practice is in Huron since last 20 years. Yeah. Okay. That still exists, only one condition has been added. Okay. That is, I'm telling you that only once uncertainty is that to be end user certificate, okay? Once the end user certificate given by the government, we will add on to a POC in there. It will be continued there. It has not been closed, okay? This has not been changed anything. It has been modified. The accounting team has been modified there. Okay, great, sir. Thanks a lot. Okay. Thank you, sir. The next question is on the line of Sanjay from Bastion Research. Please proceed with your question. Thank you so much, sir, for the opportunity. Sir, I wanted to understand that, what are we expected, since our new facility is going live in Q2 FY 2027. Q1 FY 2027 should see the jump in order intake, while sequentially from Q4 FY 2026 to Q1 FY 2026, when we see the order intake fell by 15%. Can you please throw some light on that? How should we view this? Basically, we are already having a stretch order book. We have a very large order book compared to our execution today. Every quarter, let's say today, if you see that in the last couple of quarters, we are consciously, let's say what we are dispatching, we are increasing more than that. Okay? Even this quarter also, we have close to INR 510 crore is dispatched and we have INR 600 crore as order book there. Our customer also look at that. Once our execution capability will increase, we can book further more then. Definitely we will see in the last quarter to be more order intake, because that will be our customers also become very confident, then only they will place us to order on time deliveries to be there. Okay. Sir, my another question would be, as you said that Q1 to Q1 should not be comparison, I understand that, but on a sequential basis, we are comparable and the capacity is already going live on, building up. The cost on that front is already building up, right? But when we see on sequential basis, our margin has been down by 320 basis points. This reflects some of the point you said that because of Huron INR 35 crore. That's attributed primarily to Huron. Otherwise, our margin would intact on that basis. Is that understanding right? Absolutely. You can see, let's say, on the same standalone business, I have a 27.5% margin to be there in this quarter itself. Okay, sir. Thank you so much. I really appreciate. Thank you. Thank you, sir. The next question is on the line of Amit from Clear Blue Capital. Please proceed with your question. Hi, am I audible? Yeah. Yes, sir. Just want to understand this end user certificate. It is only for five-axis, right? Absolutely. It is not- Five-axis also, there is many conditions are there. Let's say first is the five-axis simultaneously or let's say there are many long guidelines by EU and all. Certain precision also is in part of that. None of our standalone sales require any kind of end user certificate, right? Standalone in India? Let's say, Jyoti sales to some of Jyoti exports within that. We also required. Okay. There also, is there some lag in the revenue recognition? No. Or there- No, in India particularly, we are having a India and Germany, we have a very good repo systems and all. We are able to get it very fast over there. Understood. Thanks. That was my question. Okay. Thank you, sir. The next question is on the line of Rabindra Nath Nayak from Nirmal Bang Securities. Please proceed with your question. Thank you, sir. Thank you for the opportunity. Sir, actually, in the plan you mentioned that the INR 200 crore of order is expected from MBDA. What is the status of that now? Already, out of that few orders we have received in this quarter. Many are in coming quarters we are expecting there. Okay. Sir, MBDA is also expanding here with L&T. They have already set up the capacity in Coimbatore. Whether we have actually the opportunity there to market our product? Absolutely. Many European companies are coming in India, and we are all in preferred supplier to their list. Not only this one. Many more are coming in aerospace and defense area to be there. Okay. Sir, again, sir, the BFW is already set up with 10,000 machine capacity in Hosur. How the competitive scenario is going to shape up? Because we are also developing this at the same time. Can you please throw some light on that, how the competitive scenario is going to crop up? Right now, Rabindra Nath Nayak, always every business, there is a competition. We are coming up here with the always, we have a very fight and tough competition always. Okay? Yeah, it is an part and parcel of the life. Okay. Sir, they are also manufacturing the three-axis machines in this new facility or they are manufacturing something other- I cannot tell about the strategy of my competitors there. Okay. Okay, sir. Thank you very much. Thank you. Thank you, sir. The next question is on the line of Simran Kumari from Narnolia Financial Services Ltd. Please proceed with your question. I have two questions. Sorry to interrupt, Simran ma'am. Your voice is very low. Yeah. Can you speak little louder? Hello? Yeah. Yes, ma'am. Please proceed with your question. Yeah. Good evening, sir. Thank you for the opportunity. I have two questions. First one is on debt outlook. Could you just provide an outlook for the debt for the fiscal year FY 2027? Walk us through the drivers behind the increment in the interest expense during the quarter. The second question is regarding the order book. What is the current visibility for the order book for the current fiscal? Those are my two questions. In terms of right now, we are in a debt situation. We are very much comfortable situation that we are not seeing further debt to be increased from this year. Because already we have taken term loans and everything to be there. Once, let's say, any further CapEx in next future, we will think over there. Okay? And still, our balance sheets are allowing us to go up to, and we have made a discipline parameter inside that will not grow more than, let's say, our debt should be 1:2 to EBITDA level there. And well, we are within that limits, and we're not going to increase to be there. This year, we are in the similar level to be there. It is not going to increase there. What was your second question? I missed that. Sir, second question is regarding the order book visibility, like for FY 2027- Yeah. Order book, let's say we are very much clear that this year, the first quarter, we took almost INR 600 crore, and we are expecting to finish this entire year in between INR 2,500 crore-INR 3,000 crore there. Okay. Thank you so much. Thank you, ma'am. The next question is on the line of Jay Shah from Genuity Capital. Please proceed with your question. Hello, sir. Good evening, congratulations for a good set. Thank you. Sir, I just wanted to ask on Huron, basically just one question. You said that around INR 300 crore-INR 325 crore of revenue, and if I'm not wrong, our capacity there is 240 machines. What would be approximately the number of machines for this revenue, if you can say? You said around 8%-10% margins, would it be PAT positive this year? Do you think so? Yeah. First of all, 8-10% EBITDA, yes, we are a positive there. Okay. In terms of a PAT margin there In terms of, let's say, the 240 machine is a capacity based on the model mix. Today, what we are receiving the orders is all are large machines. The machine value is more than INR 1 million to be there. That's why this manufacturing time and everything is longer there. For larger machines, in our capacity, we are able to execute, in terms of a value-wise, close to INR 75 million there. It's close to INR 750 crore there. INR 750 is the full capacity realization? Full capacity utilization. Okay. Eventually we will reach there. We have just expanded last year in December. November, December, we add on the capacity. We have now capacity up to INR 750 crore to be there. Understood. Just, sir, last question to understand this license and end user certificate better. Is it that even from France, if you have to locally sell in the European Union, like to Germany or Spain, Portugal, even there, do you need certificate or this is only to- No. Export out of European Union? No, out of European Union. I don't need a license there for the Germany, for the Italy, for Spain. Okay. Understood, sir. Just last question, sir. You said that a lot of replacement to one of the previous participants, a lot of replacement demand and a lot of local demand is also coming in. If I have to, I have visited Rajkot a couple of times, just trying to connect these two things. Is it that you are finding a lot of component guys who are now getting into aerospace or precision engineering, even at a local level, Tier 1, Tier 2 suppliers? Are they also upgrading? Is it fair to say that they are upgrading to a certain level of machinery, and that's why in the future, our realizations can go up? It feels that now since with the new capacity, Jyoti can take a lot of import share, because you said 62% is import as on today. Are these guys also upgrading because India is seeing so much manufacturing, and like you said, all Europeans are coming here. People would need some better capability machinery, right? Yeah. If Jyoti can deliver, would our realizations go up with time because people have to also upgrade if they have to work with Europeans and U.S. companies? Absolutely. You see the face is changing the entire India there. India is moving more and more. This one, the maturities are coming, is all the manufacturing company is expanding their core competencies to produce the very high-precision component there. Okay. Recently, we have supplied some machines in our town, and those guys are supplying parts to Airbus or Dassault and to these programs also. Based on that, all these Indian manufacturing capabilities are increasing. Second, people are looking more and more on automation on a machine there. Okay. That's another area is opening up, and we are forefront to substitute to import substitution. Yes, in coming days, we are looking to on a higher and higher manufacturing, the larger machines to be there, basically. On a high-tech machines to be there. Understood. Sir, just to end this, when you say high-tech machines or higher range machines, is it basically that your customers are also moving from components to a system supplier and hence they also need more advanced machineries? Or is it that they are getting into more technical components, and that's why they need advanced machines, or it is a mix of both? All mix. Basically, they are moving their own high-value chain, basically. India's manufacturing is going more and more on a high-value manufacturing to be there, and that's why the precisions are required more and more there. Understood. This is all work coming from China, Taiwan, Korea, the business that India is now getting? Would it be fair to say? Yes. Absolutely. It's in China plus one, is a real things are coming up. Even I'll tell you a simple example. Earlier, our Indian railway, what the speed was there and what are the now Vande Bharat and all the new trends are coming. Once we need to produce the high-speed trains and all, you need a higher precision components and more technology-driven parts to be there. Those are the things are everywhere is improving there, basically. Understood. This NX machine that you've put in the presentation, sir, what is the use in Indian Railways? If you could just spend one minute on that. To manufacture the bogie. Okay. Wagon. Wagon bogies. Yeah. Okay. Thank you so much, sir, and all the best, sir. Thank you. Thank you very much. Thank you, sir. The next question is on the line of Deepesh Kashyap from Invesco MF. Please proceed with your question. Yeah, hi. Hi, sir. Can you hear me? Hi, Deepesh. Yeah, Deepesh. Hi, sir. Hi. Sir, just one more question on Huron thing. Sir, I think last year, last quarter, we reversed around INR 67 crore of revenue from Huron, and this quarter we are talking about INR 35 crore. Total around- It's not reversed. This quarter is not reversed then. It is not recognized. Almost INR 100 crore of revenue, which has to be recognized, right? Correct. I just wanted to know how many machines are we talking about in this number, and is this a single order or these are multiple orders? It's a multiple order and around seven to eight machines. Seven to eight machines, multiple orders. Yeah. There's a different timing when you have applied for the license. Will it all come in a single quarter, single month, or it'll be spread out? How do you think? No. Once they will clear, I think they will clear everything there. Okay. The entire thing may happen in a single time. Yeah. Okay. Generally, I think you said whenever you're near completion to the machine, two to three months before that, you apply for the license. Earlier it was our practice. Now we will start from day first now. Already we have received some of the orders in this quarter, we already applied for that. Okay. This is typically to a particular geography that is taking time from EU, or it is anywhere out of EU that is taking time, sir? Everywhere. Particularly our customers are all into China, Turkey. These are all our sensitive areas, today's timeline there. Okay. Got it. Sir, what is the debt level right now? I think last year we closed at around INR 700 odd crore net debt levels. With the inventory building up, how is the debt level right now? Sir, today our March and today's level is almost same. Okay. We are still confident that the OCF generation that we talked about in the last quarter, that will continue for this year also. Absolutely. It will be- Absolutely. We will build up a good OCF this year. INR 200 crore-INR 220 crore of CapEx you have talked about. You said the debt will be at similar levels. You expect to generate a similar OCF kind of a number? Yeah. Basically, this year we are expecting close to a 50% of EBITDA level there. 50% of EBITDA conversion. Okay. Got it. Thank you so much, sir. Thank you for your time. Thank you. Thank you. Thank you, sir. The next question is on the line of Saurabh Vyas from Systematix. Please proceed with your question. Mr. Saurabh, your line has been unmuted. Please proceed with your question. Am I audible now? Yes, sir. Yeah, Saurabh. Yeah. Just one last question. Just wanted to understand that in case the entire investigation that is going on in the Huron, would there be any going forward in the coming quarters, if it does not get concluded, is there any impairment loss we are supposed to be booking by end of FY 2027, in case if this gets dragged along by at least Q4 of FY 2027? Yeah. Not at all. Hello? Not at all. Not at all. Okay. Thank you, sir. Thank you, sir. Ladies and gentlemen, in the interest of time, that was the last question for today. I would now like to hand the conference over to management for closing comments. Thank you all of you for joining us today. I hope I have addressed all your questions. We remain committed to keeping the investment community informed with the regular updates on any development in the company. For any further information or queries, please feel free to reach out to us or SGA, our investor relation advisor. Even I'm inviting all of you, all this expansion and everything is going on. Come over here, witness, see how we are growing, and welcome to all of you over here. Thank you very much for joining in this call. Thank you, sir. On behalf of Anand Rathi, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines. Thank you.