Ladies and gentlemen, good day and welcome to the Q3 FY 2025 earnings conference call of Sansera Engineering Limited. 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 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 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 Mr. B. R. Preetham, the Executive Director and Group CEO. Thank you, and over to you, sir. Thank you. Good morning and welcome, everyone. Thanks for joining this call. On this call, I'm joined by our CFO, Mr. Vikas Goel, Mr. Praveen Chauhan, our Head of Corporate Strategy, and Mr. Rahul Kale, our COO, along with our Investor Relations Advisor, SGA. The results and the presentations are uploaded on the stock exchange and company websites. I hope everybody has had a chance to look at them. Starting with our quarterly update, we delivered a decent performance in Q3 of FY 2025, with a revenue of INR 7,278 million and an EBITDA margin of 17.5%, with a PAT margin of 7.7%. I would like to highlight that generally, Q3 is the weakest quarter for the overall auto industry, and I think we have delivered this performance despite a challenging external environment and a very strong corresponding Q3 in the last financial year. Following our QIP, the balance sheet continues to remain strong, with surplus cash standing at almost about INR 4,969 million. With this, we are well placed to expand our capabilities in line with our order book of new business. During the quarter, the overall domestic demand trajectory remained moderate post-festive uptrend. That said, January began on a positive note, and the outlook for the year continues cautiously optimistic. We expect some inventory correction to take place due to OBD2 Phase B in the coming quarter. As per S&P Global's 2025 forecast, the global auto sector remains focused on managing production and inventory levels in response to the regional demand patterns, which include slower growth in the key markets. That said, North America, which accounts for about 1/3 of our exports from India, is presenting a meaningful opportunity with the changing global dynamics. Let's take a closer look at our performance across sectors Q3 FY 2025. Emerging businesses, namely tech-agnostic and xEV and non-auto, contributed 24.2% of the revenue. The long-term outlook for these remains very strong. The tech-agnostic and xEV business delivered a healthy growth of 9.5% on the YoY basis. Our xEV business has experienced more than 30% growth year-on-year on a low base. We shall continue to maintain this high-growth trajectory going forward as our outlook for this tech-agnostic and xEV business remains solid, with an order book of INR 5,352 million, including a major proportion from aluminium-forged products. In the non-auto sector, we registered a decline of 6.6% on a year-on-year basis, owing to some softness in off-road and aerospace business. Off-road segment, especially, revenues stood at INR 203 million. Aerospace business recorded a sales of INR 269 million. The decline here is owing to labor issues with one of our key customers, which were resolved by early November. Since then, we have seen a gradual recovery in orders from their side. Further, we have expanded our customer base and added a large European-based player to our kitty. Previously, we were working with Tier 1 suppliers of this OEM. However, now we have added them as a direct customer. We see a significant momentum in aerospace from Q4 FY 2025 onwards. Speaking of agriculture, just as we anticipated, this business delivered a healthy growth of 65% on a year-on-year basis and 75% on a sequential basis. The revenue from the agriculture segment stood at INR 177 million, primarily driven by healthy rural demand for tractors. Our auto ICE business, which remained muted on a year-on-year basis, stood at INR 5,089 million. Our 2-wheeler business grew by 7%. However, this does not show a fair picture of scooter performance, which grew much faster at a rate of 21%. For the long term, we remain positive on the 2-wheeler business, as we expect the overall industry to grow in the coming future. As we saw channel inventory pile up towards the end of December quarter and softness in export orders, our PV business de-grew by 19% year-on-year. This is in line with the overall industry scenario of slower demand. Having said that, some positive recovery is expected to come on the back of newer product launches by the OEM. We aim to win maximum business in the newer models for our existing customers, both domestically as well as in the export market, with a focus on premiumization and critical engineering requirements. 3-wheeler business, being the smallest in size, delivered a decent growth of 10.4% year-on-year. I would like to highlight that our CV business delivered the highest-ever quarterly revenue in this quarter, growing at a healthy steady rate of 10.5% year-on-year. We have also received fresh orders from this segment, contributing to 4% of our new order range. Now, let's turn our attention to our order book. As of December 2024, our order books stood at INR 22 billion, that is INR 22 billion, with more than 60% of these orders coming from the international market. We booked around INR 1.9 billion worth of orders during this quarter, and major order inflows are from the non-auto sector, helping us to move closer toward our long-term vision. Recognizing the strategic importance of the semiconductor sector in powering everything from consumer electronics to advanced technologies such as artificial intelligence and electric vehicles, India is looking to establish itself as a global hub for semiconductor manufacturing. In line with our diversification strategy, we are also looking at this space very closely. We have won a prestigious order from a global leader in wafer fabrication equipment for supplying parts of high-precision and complex machine parts to this equipment. This strategic deal comes following an extensive evaluation and selection process. This fairly large order is our first-ever order in this fast-growing space. We expect our business with the customer to grow meaningfully in the next three years. This LOI is a testimony to our ongoing efforts to diversify into the related high-growth areas with high precision. As an engineering-focused company, we aim to deliver best-in-class solutions across multiple business areas within our playbook. To conclude, I would like to give an update on our subsidiary company, MMRFIC. The company is performing well in line with our plans, and as mentioned previously, we have further invested in the company, for which the shareholding percentage will be determined on the FY 2022 financial results. MMRFIC continues to make strides in the defense space and has recently emerged as a proud winner of iDEX Prime X Challenge by the Defence Space Agency, DSA, for developing a 200-watt Ka-band solid-state power amplifier for satellite ground stations. MMRFIC has been awarded multiple government grants to support the development process, namely iDEX, Grant 3, up to INR 10 crores for iDEX Prime 1, up to INR 1.5 crore each for iDEX DISC 2 numbers and TDF grant of up to INR 7 crore. We feel privileged to contribute towards the Atmanirbhar program for defense and aerospace sectors, offering them all the support that we can provide in terms of experience and expertise. As through this, we also get to be part of such an industry which, as you know, is a critical aspect for the country. For a long period of time, we are confident that Sansera will continue to be a preferred choice of a player for global giants with its deep precision engineering capabilities. Now, I hand it over to Vikas Goel, our CFO, to take it forward. Vikas? Thank you, Preetham. Good morning, everyone. Let me give you a brief about our consolidated financial performance during the third quarter of FY 2025. Our revenue from operations rose by 2% on a year-on-year basis to INR 7,278 million. The other expenses have reduced sequentially from the previous quarter, and our employee expenses are broadly in line with our previous quarter. So, the other expenses are basically the result of our continued efforts to improve cost metrics. The EBITDA for the quarter stood at INR 1,271 million versus INR 1,207 million in the same period of last year. The EBITDA margin stood at 17.5%. During the quarter, we were able to maintain our margins sequentially due to our diversified product mix, cost-saving efforts, and certain pricing actions. Interest costs also reduced on a sequential basis, owing to the funding received through the QIP process. That said, Q4 of this year would be an even better representation of the reduced interest expense. Depreciation and amortization expenses stood at INR 445 million, again in line with Q2. Profit after tax margin improved on a year-on-year basis by 90 basis points, reaching 7.7%. Talking about the nine-month performance on a year-to-date basis, the revenue from operations rose by 8% on a year-on-year basis to INR 22,351 million. EBITDA stood at INR 3,877 million, with a year-on-year growth of 10% and a margin percentage of 17.3%. Profit after tax witnessed a growth of 12% from last year and stood at INR 1,577 million, with a margin of 7.1%. We are also happy to share that ICRA Limited has upgraded the long-term credit rating from AA- stable to AA stable and reaffirmed the short-term rating to A1+. India Ratings Limited has also upgraded our company's credit rating, long-term rating, from AA- to AA stable. With this, we conclude our presentation and open the floor for questions and answers. Thank you. Thank you, sir. Ladies and gentlemen, we will now begin with the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants are requested to restrict yourselves to two questions. If you have any more questions, kindly rejoin the queue. The first question comes from the line of Mumuksh Mandlesha from Anand Rathi Institutional Equities. Please go ahead. Yeah. Thank you, sir, for the opportunity and congrats on the order wins in the Semiconductor and Aerospace. Yeah. Sir, firstly, sir, just on the growth recovery from here this quarter, about 2% only kind of growth we had seen, which was, I mean, a little muted. So just to understand, how do you see the growth recovery going ahead from here, sir? Thank you, Mumuksh. See, there were a couple of reasons, as I have already stated, that while the quarter three generally remains a weak quarter for us among the four quarters, traditionally for most of the automotive companies. Now, added to that, exports, especially for Europe as well as uncertainty in the U.S. prior to the elections, saw a weak demand from the passenger vehicle industry as well, so I think that things can only get better, and we look forward for stronger quarters and much, much stronger coming year because our order books, both by way of continued orders as well as the new products that are getting introduced, look quite strong for the coming year as well, so we are quite optimistic about the coming year business. Sir, if you can share for the key segments, new segments in terms of guidance for next year, firstly on the aluminium forging and then on the aerospace and then on the EV space. Yeah. See, our long-term guidance, we have said that 40% of our business would come from non-automotive xEV and tech-agnostic products. Now, if you see, we have reached almost 26% in the current financial year as we speak. But then, if you really look at the stack-up that we have from the current order book to, I mean, current revenue mix to adding the current order book, we will almost reach almost about 38% in the next three years' time. So our diversification strategy and focus on non-automotive xEV and also on tech-agnostic components have really started yielding fruitful results. Now, having said that, most of these segments also cater to almost 60% of the business also comes from the export industry, which means that it definitely would be margin accurate. Now, just to take an example on Aerospace and Defense and Semicon put together because this is something that we manufacture in one common facility at our Plant 9. So we have a current order book of very close to about INR 600 crores. Now, when I say INR 600 crores, INR 600 crores is the annualized full potential revenue that we have. These are contracts which have already been secured. Now, the challenge would be to, unlike the automotive industry, here, the number of products that are involved in development are quite significant. So we expect that at least 50% of this order book would get executed in the next year. And when I say next year, it is FY 2026. And we expect that by FY 2027, at least about INR 500 crores or plus would get executed. Now, the risk here remains is that if there is a delay in the development of any particular package of the products, what happens is generally the customer would have to resort to the current suppliers for ordering for the next six months to one year, and that could impact on the delay in starting of production. So apart from that, the orders are there, and we have put enough and more resources, including engineering resources, are being augmented, and we are preparing ourselves to deliver this order book as well. Very clear, sir. Just also on the aluminum forging. Mumuksh, those were your two questions. I would request you to rejoin the queue. Yes. Sure. Thank you so much. I'll come back to you. All right. The next question comes from the line of Siddhartha Bera from Nomura. Please go ahead. Yeah. Hi, sir. Thanks for the opportunity. Sir, first question is on some of the newer areas which you have got good orders. To give some color, if you can share what is the size and in the longer term, what is the quantum of revenues you think you can potentially address in the Semiconductor space? Yeah. Thank you, Siddhartha. As I said, that the space has been we have keenly been observing, and we are being evaluated from the last one and a half to two years from potential customers. Now, one of them who are the world leaders in manufacturing of machines for etching and deposition have started the business relationship with us post very, very rigorous evaluation over one, one and a half years. Now, so these are the components which go into the machines which are very, very high precision. Some of the operations that we do on a 5-axis machine are first time in our history. While we have been in this business of precision engineering for almost 30, 35 years, this kind of machining requirements, we are addressing it for the first time. It was quite challenging, but we have been able to successfully demonstrate our capability. We are also setting up a Class 1000 clean room for addressing their requirement. So, with all these things, we expect that we are creating a kind of very niche opportunity which can actually scale up not only with this customer as well as with a couple of more slightly bigger customers as well. Now, what is the biggest thing is these customers are looking at India not for any cost advantage. Basically, they are all looking at India for lack of because they are not able to expand for the lack of skill set that is available either in Europe or in the U.S. So, we have been able to present these they are presenting these opportunities, and these also come with good margin profile. Now, currently, our order wins from this customer is about $12 million annual per annum. But the LOI that has been signed will go up to about $30 million in three years per year. So this is the kind of opportunity currently that has been visible with this customer. But again, it all depends on how fast and how well we perform. And I think once we establish our credentials, this can only be scaled up further. Got it, sir. Sir, second question on the U.S. side. I mean, you also hinted that there are new opportunities also opening up for the U.S. market while we do see the tariffs impacting demand as well. So how to think about the roadmap for the U.S. market in the next few years? Are you concerned with the demand outlook from existing clients and what other new areas we can look at to offset this? And lastly, for this new U.S. assembly plant also which you were sort of thinking in the past, any update there how to navigate these tariff issues in the U.S. market? Yeah. Siddhartha, the reason that we haven't taken the final step on this manufacturing facilities was to wait for all the uncertainty around the tariff and structure that the new U.S. government would have in place. So we would like to just, we have been waiting. I mean, we probably would wait till the end of this quarter to firm up our final plan as to exact location and the scale of the operations that we need to start. But the one factor is definitely going to be there that it will only be encouraging for people to look at some kind of front-ending facility and manufacturing facility in the U.S. That is what is the whole objective of this, I mean, current regime to encourage more manufacturing in the U.S., which also would mean that more and more OEMs, especially in metalworking place, will look at vendors who would have some kind of facility to offset the tariffs. So in terms of the current customer orders, I don't think there is so much of an issue with that because in certain new products that we have started producing, we are almost single source for that. So it is on the ramp-up and that would continue to happen. But meanwhile, there have been a lot of engagement with the existing multiple OEMs to look at all the newer programs because ICE has got a renewed focus both in terms of multi-fuel engines as well as hybridized engines. So we are engaged in multiple conversations with multiple customers for our traditional components which would actually go beyond 2035 as well. So we are looking quite positive towards the opportunity in North America. Got it, sir. Thanks a lot. I'll come back in the queue. Thank you. The next question comes from the line of Abhishek Jain from AlfAccurate Advisors Private Limited. Please go ahead. Thanks for the opportunity and congrats for the chance to set up number in a tough time. Sir, my first question on the CapEx side. You have done a CapEx of around $3.7 billion to date and looking for around $4.5 billion in this year. So how much incremental have you been able to generate based on these CapEx next two to three years? What would be the asset turnover? Yeah. Generally, I'll probably take this question and then Vikas can add to my answers. See, generally, we have always maintained that when we are putting up a greenfield facility or expanding the facility, generally, you will have to take our overall asset turns around 1.3-1.4. And the order book is also quite clear. It is at INR 2,200 crores. So we will require over the next three years to invest about INR 1,300 crores-INR 1,400 crores, which included this year as well, to make sure that we execute this. But one thing that we would like to add is any incremental expansion in the new facilities, especially in aerospace, where we have already created the infrastructure and then further addition of only the machining facility and this thing would be at a higher asset turn, which would mean that any incremental investment this year, in fact, we would be investing about close to INR 110 crore-INR 120 crore in the aerospace facility on the machining alone. And that would mean that it would have an asset turn of more than two. So it's a mix of both this thing, and I think it is safer to assume that 1.3 - 1.4 is a right mix for us to look at. Oh, thank you. And next question on the international business, so now it counts for the 31% and the new order book is. I am not able to hear it properly. Can you please be a bit slower and clearer? Sir, my next question on the international business, so which accounts for the 31% now? And most of the order book, around 60% order book is for the international business going ahead. So just wanted to understand what change in the mix we can achieve, international versus domestic business for the next two years. I think, see, over the time, we expect that the international business should move between 35%-40%. This also includes our business out of Sweden and exports from India. But again, it also depends on how the domestic market would perform because the domestic market is performing strongly. The base is much larger here. 69% is coming from the domestic market. But then anywhere between 35%-40% over the full next three to four years' time is what we think it will that is where we are looking at. Thank you, sir. Thank you. A reminder to all participants, you may press star and one to ask a question. The next question comes from the line of Khush Nahar from Electrum PMS. Please go ahead. Hello. Hi, sir. Am I audible? Please be a little louder, Khush. Thank you. Yeah. Hi, sir. Thank you for the opportunity. So I have two questions. So first, how do we see demand in general if you can elaborate a bit more considering the tariffs that might be placed on India also? And second, sir, a bookkeeping question. Our employee expenses increased year-on-year by 15%. So what kind of manpower are we adding here because the revenue has increased only by 2%? And consequently, our tax rates are also lower this quarter. But is it safe to assume that it will be 25% on a yearly basis? Yeah. The first two questions, let me answer. The impact of trade on India and the Indian suppliers is yet to be seen because the reciprocal tariff is what he's talking about and the U.S. President is talking about, but nothing has yet been firmed up. They expect that a lot of these are kind of negotiation tools. And that is why I said that we would wait till end of March probably where things would become much more clearer before one can come to any kind of conclusion onto what is going to be the effect on each country and each product category. It's too early for me to make a comment on that. So I would refrain from making any kind of comments on what is going to be the effect on this. As far as our labor cost is concerned, yes. See, because it's an engineering industry and it's a high-skilled area, we will not be able to, on a short term, adjust towards big variations. We would rather carry the trained manpower because our long-term and medium-term goals are very clear and the targets are clear. So we have focused on creating a skilled manpower, especially in the areas of high-precision machining like aerospace, defense, aluminum machining, aluminum forging. These are areas which need very, very high skill set. So any temporary drop in the revenue, we will not definitely make a knee-jerk reaction to cut the manpower. Rather, our investment and training and skilling of these people is on a long-term basis. So in a short term, when the revenues are weaker, you would see a slightly higher percentage. But this is done keeping long-term strategy in mind. T alking about the tax rate. The quarter, yes, it seems lower for this quarter because of certain pricing actions we did in our Sweden subsidiary because of which we have a relatively higher profit there. On a full-year basis, we should be closer to the average for the whole entity. It's around 25%. Around 25%. That's right. Thank you. Sir, just one question if I can squeeze in. So what kind of revenue growth do you assume for the next three years considering this uncertainty in demand and obviously our current order book which is strong? The current order book presents a very, very aggressive opportunity for growth. But having said that, the current auto is generally a cyclical business. And there would be once in three years, a couple of quarters, there would be a dip in demand. There is also coupled with now there are technology changes that are coming in. So I would still say that high teens is what we should expect over the three years on a CAGR basis. Nice. So with obviously sustainable EBITDA margins around 18%-20% going ahead considering product mix. If it's EBITDA sustainable margins, w e would not put a number to that. Yeah. I mean, the intent is to improve our margins year on year, at least by 0.5%. That is how the company has focused on working. And on a long term, 20% is definitely a target on which we are working on, so both on ROCE and margins. So that is where our long-term vision is. So we as a company are working towards that. All right. Thank you so much for the detailed answers. Thank you. The next question comes from the line of Basudeb Banerjee from CLSA. Please go ahead. Yeah. Thanks. Thanks, Preethamji. A few questions like I can see year-to-date CapEx at around INR 360 crore. And even a year back when we were discussing, you were looking at full-year CapEx of INR 300 crore, INR 320 crore. So maybe post-fundraising, some more comfort for growth CapEx. And on the other side, revenue growth is low single digit. So how to look at from a strategic angle next three, four years, your triple-20 vision of growth, margin, and ROCE, especially the last one? And how are you looking at the ROCE factor in next three, four years? Where venturing into Semicon and EMS or other areas in the initial phase of scaling up, how do you look at that in the transitionary phase? Thank you, Basu, and congratulations for your new innings, so yeah, this quarter, as you said, this year or year-to-date, the going has been not as expected because especially in our export markets and domestic PV industry has been muted. Exports, especially in certain of our customers like off-road, have had a significant degrowth in this year, which was also expected, but then I see a very, very strong momentum. Order book is strong. New programs are quite promising. The new industries with which we are working on, like we have added Airbus as our customer directly. Today, Aerospace and Defense and Semicon order book stands at almost INR 600 crores, so we are focused on making the right investment into these areas. Of course, auto ICE business, which is our traditional business, there's not much of incremental investment that is going on. This is where our effort in consolidating our products at our various manufacturing facilities and harnessing that existing capacities we are working on. So Rahul, our new COO, along with his team, have been very focused on having this approach. I would definitely you would be able to see results in the next few coming quarters of all these actions that have been initiated. I would say that on all the newer investments that we are making, especially in non-automotive sectors, both our margin profile and ROCE are much, much better and higher than the traditional line of businesses. But of course, as you rightly put it across, few of the first initial quarters, there would be a learning curve. We are going through that already because from month of October, the production to these sectors have started. I expect that over this quarter and middle of next quarter, we should be through with the first bunch of the 12 million order that we have received and production has to start. The things are looking quite positive, Basu. I would like to add here, Basu, normally the CapEx that we incur in our business is ahead of almost three-to-four quarters of the actual sales realizing. So the CapEx that you see now is not meant for this year. It's actually going to result in revenue in the coming year, and that also takes a gradual upscale as the volumes increase on any new order, and most of the CapEx that we incur is actually driven by the new orders that we have. Sir, the new businesses, what will be the fixed asset turn compared to the earlier traditional businesses? New businesses should give us about 2-2.25 asset turns. Okay, and last question, this year you will be ending up with how much consolidated CapEx? Consolidated CapEx would be INR 425 crores-INR 450 crores, not inclusive of the new parcel of land. That land included, it would be very close because we have invested in a very large piece of land, 55 acres, in the new EV estate that the government of Karnataka is creating very close to the existing Toyota facility where a new airport is also proposed to come nearby. So I think with that, we should be very close to INR 550 crores with the land parcel included. Any last guidance you are giving for aerospace revenue for next year? Next year, I already said, Basu, that we are targeting about 50% of our order book execution. Our order book is about INR 600 crores as we speak. So Aerospace, Defense, and Semicon put together, we expect that we would execute at least 50% of that in the next year. And Semicon will be how much of that? I will interrupt, Basudeb, I would request you to rejoin the queue now. Sure. Thank you. The next question comes from the line of Arjun Khanna from Kotak Mahindra Asset Management. Please go ahead. Sure. Just carrying forward from Basu's question. So what is the revenues we expect from Semiconductors this year? This year, hi Arjun. Do you mean the next coming year? Right, so just to understand the breakup, while we are saying INR 300 crores for FY 2026, so FY 2025, what would this like-for-like number be? I think, see, in our own estimate, we have taken about INR 60 crores as the revenue coming out of Semicon in this year, but the potential to do is much higher because our order book currently is almost close to $17 million. In fact, I have been just corrected. I was telling about $12 million. We have recently received one more additional order, so it has been about $17 million. While the opportunity is slightly higher, I'm being a bit more cautious because the cycle of establishment of these products and the FAIs and customer also, as I said, that these also will require that we have to get into the cycle. If we miss the cycle, we would miss about six months of revenue, so in our current estimates, we have taken about INR 60 crores coming out of this. Sir, FY 2026. So if I look at Aerospace, Defense, and Semicon, we have said we'll do INR 300 crores in FY 2026. So this INR 300 crores, what would the number be in FY 2025 for all three businesses? Semiconductor may not be there much, but for Aerospace, Defense, what do we expect for closure of FY 2025? Hello? Hello, sir. Please go ahead with the answer. Ladies and gentlemen, the management seems to have disconnected. I would request you all to stay online while I get them reconnected. Thank you. Ladies and gentlemen, the management is reconnected. Arjun, can you repeat your question? I couldn't hear. Right. Sir, we've mentioned INR 300 crores of revenues in FY 2026 from Aerospace, Defense, and Semicon. Just wanted to understand what would this number be for FY 2025 given that most of the year is done? We should be very close to about INR 140 crores. Sure. So we are looking at almost a doubling of the business in FY 2026. If you really look at the INR 140 crores, about INR 8 crores- INR 10 crores that are only coming out of Semicon. So, a big amount of that would get added in the next year. Plus, there is a good amount of defense orders coming through, which we are getting into production. So, the Aerospace will have its normal growth, but that would mostly be supported by Semicon and D efense. Right. Sir, the second question is on MMRFIC. If you could just talk about how do you look at the end game out here? So while we continue to invest, we see a new R&D facility also. So do we and we start just taking a much larger stake in the future? If you could talk about in terms of synergy benefits that possibly this partnership could represent? Yeah. Actually, see, when we looked at them and it's been now close to two years since we have invested in them. So coming this March, it will be two years. I think in my calculation from whatever equity that we have already put, it should result between 35%-36% of holding in the current this thing. But going forward, we have the right to go up to about 51%. And beyond that, it is only whether valuation and whether we want to be because we need to be making sure that the promoters who are working on the projects also are interested and they have a reasonably good amount of stake in the company. Now, that is something on holding and the thing. But as far as the order book and the products are concerned, I understand that they have a very, very strong now development programs that are going on. They have been working with multiple products with ISRO, with DRDO, with Indian Army. There have been four or five grants that have been given on the iDEX programs from them. And then, according to my information, their current order book backlog is in excess of INR 100 crores. So in that way, they are very well poised to have a meaningful growth in the years to come and also scale it up in the products that have already been developed. And most of these would also result in technology transfer agreements once your iDEX programs are completed. So I think the future for this company is definitely in line with what we have been all anticipating. Especially they are currently, as we speak, they are also participating in the aero show where they have a stall. We expect that there would be a lot of interest from the customers also coming out of that. Sure. Sir, just to understand, sir, maybe over a three-year period, say by FY 2028, would you expect in terms of milestones, maybe INR 100 crores of turnover from this business? See, Arjun, what has happened is that, yes, these are all now currently the one big project which they have been working on, which is the Radar 1, which as we speak, has been under evaluation, and it is just on the cusp of the mass production. Now, we expect that the field trials to be over sometime in the next two quarters, and then we have already given five sets for all the field trials, and once this starts, there will be a very stable revenue, significantly higher revenue coming into the company because we expect that about 150-200 radars is the peacetime requirement per year, but apart from that, there are several projects on which this is a thing. I am not in a position to put an exact number, but things look very, very positive. Sure. Sir, the final question. Sir, we request you to rejoin the queue. You have done one question. Right. Right. Thank you. The next question comes from the line of Sahil Kanade from Asian Markets Securities. Please go ahead. Hi, sir. This is Mayur Milak. So two things here. One, the Semiconductor business, is it currently safe to believe that you're reporting it under the Auto tech-agnostic segment? No, it is on non-auto. So it will have a separate growth pattern going forward, right? Currently, we are reporting under non-auto because this is the facility which is combined with Aerospace and Defense and Semicon. We have not yet started reporting it separately. But going forward, as the business achieves scale up and reaches a meaningful thing, we will separately show, but it will be under non-auto. So, under non-auto, it will be off-road, agriculture, Aerospace, Defense and Semicon. It will be like that. So when you say there could be a 40% kind of CAGR growth in the Aerospace and Defense based on your order books with Airbus and gradually the Tier 1 supplier as well. The Semicon will be over and above the 40% growth that you'll be reporting in that space. Hello? Ladies and gentlemen, there seems to be a disconnect from the management's end. Please stay online while I get them reconnected. Thank you. It seems to be some technical glitch because we are connected. We can hear you guys, but then you can't hear us. So I think there was some issue. Could you please repeat your question? Sure. Sir, I was just trying to look at the numbers in the Aerospace and Defense segment that you've reported so far. It looks like this year will be a flattish year where you're saying you already have included about INR 50 crore-INR 60 crore of the Semicon revenue to be added into this segment for this year. So clearly, the Aerospace and Defense by itself would have been in negative growth territory this year. But. INR 50 crores-INR 60 crores is going forward next year. Okay. So. This year, the revenue has just started. So this year, we should be ending up very close to about INR 140 crores, INR 135 crores-INR 140 crores. So we will have a positive growth. And sir, when you guide for a 40% kind of outlook growth in that space, that will be over and above. So the Semicon growth will be over and above the growth that we will get in aerospace and defense space individually. Safe to look at it like that? Yeah. Basically, what I said is that between INR 140 crores-INR 300 crores is what we are targeting for the next year. About INR 60 crores will come out of Semicon. So if I remove that this year, INR 10 crores has come from INR 140 from Semicon, INR 130 crores-INR 240 crores is the growth that we expect from Aerospace and Defense put together. So there is a good amount of defense orders also getting added into that. So Aerospace by itself will grow by about 50% CAGR. That is the minimum that we have taken. Fair point. Sir, coming to the, I think a couple of guys have also asked it, but I was just trying to look at the ratios, so clearly, in the last eight years, there are two things here that our asset turn has always been at that 1.2 mark. And our ROCs have always been in that 11%-12% range. Now, I believe we've already started our journey on the non-auto side and the heavy growth xEV end. But some of that really doesn't seem to be reflecting into the asset turn as well as ROCE. So can you throw some light as to is there a near-term possibility of looking at a 14%-15% ROCE over three years, or are they going to be more gradual and slower than because the numbers do suggest that even in two, three years, we should be around the 12% mark only, so just trying to work out some number on that side. Sorry, this is about the ROCE. So when you say ROCE, could you just elaborate how are you looking at it? Because according to us, we're looking at above 15% mark. So basically, sir, I'm looking at EBIT one minus tax net of that. Post-tax, you're looking at? Yeah, yeah. We look at it pre-tax because this includes all elements. So see, pre-tax, we are targeting to reach up to 20%. So if you do a post-tax, it will definitely be about 15% over a period of time. And various actions in terms of margin improvement, in terms of diversification, and also capacity utilization improvement are some of the actions. Sure, and on the asset turnover as well, so you've already pointed out that the. Y ou're done with two questions. I would request you to rejoin the queue. Oh, okay. The next question comes from the line of Shashank Kanodia from ICICI Securities. Please go ahead. Yeah. Hi, sir. I wanted to check on your QIP proceeds? So out of this INR 1,200-odd crores, what proportion would you be using for retiring your debt and balance for growth CapEx? So Praveen? Hello? Hello? Yeah, hello? Yes, sir. Can you hear me? Yeah. Praveen, could you please answer in case that our line gets cut because you are on the line where you could hear most of it? Sure, sure. I'm trying to do that. Are you answering this question? No, I didn't hear that. Yes. I was just asking, sir, out of your INR 1,200 crores of credit proceeds, what proportion you will be using for retirement of debt, and what proportion you will be using for growth CapEx? And the gross debt number as of December end versus the March numbers. So out of the INR 1,200 crores, we have already retired INR 700 crores of debt, which was the plan as declared in the QIP document. INR 200 crores is going towards the CapEx, out of which INR 100 crores is towards the new parcel of land, and another INR 100 crores is towards some new machine equipment that we are in the process of procuring. Balance, INR 300 crores out of that INR 25 crores was the expense of QIP, and INR 275 crores is what we will basically be deciding in the next few weeks. Mostly, it will go towards growth CapEx and certain other developmental expenses. Okay. So sir, the gross debt number is roughly about INR 300-odd crores as of December end because I think it was INR 800-odd crores as of March end, if I'm not wrong. Gross debt as of December end is about INR 350 crores because there is some debt also in the subsidiary companies, which we have not touched as of now. And we are retaining some debt in the parent company, in the flagship company, because of a longer period of that debt. But on a net basis, we are negative debt. Right, right. The positive cash, INR 500 crores of cash flow, right? Positive INR 500 crores of cash? No, on a net basis, it will be about INR 150 crores. Okay. Net basis, INR 150 crores of positive cash. Yes, yes. Okay. Secondly, sir, in the past, on the order books, sir, you have been mentioning that it will take roughly two, two and a half years to reach the peak revenue potential of that order book. So from roughly INR 3,000 crores of revenue that we're doing right now, it essentially means we should be touching closer to INR 5,000 crores of revenues by FY 2027. Is this the right understanding? I would say by 2028. Okay. So by FY 2028, you should be touching INR 5,000 crores. Crossing INR 5,000 crores, considering everything as normal. Right, right, right. And sir, lastly, if you can put a timeline to your 20% EBITDA margin and ROCE targets. We have been giving this as an aspiration target, but I think we would be more concerned in what is the timeline that we're looking at attaining these 20% margins in ROCE? See, this is a 2-way street. If you look at the diversification strategy and new products introduction that we are adding, and there is definitely some amount of effort and cost which is incurred in the initial phases whenever we introduce a new product line into the business. So that leads to some cost. Also, there is a learning curve when we stabilize. So while theoretically, we are improving our margins on one side, on the other side, we are incurring additional costs and in the learning curve to stabilize these new products. That's an ongoing process. And we believe that year on year, we should still be able to sequentially improve our margins by about 50-60 basis points. So considering we are about 17.5% now, it should take about three to four years for us to get closer to 20%. Right. Understood, sir. Thank you so much, and wish you all the best. Thank you. Ladies and gentlemen, in the interest of time, we would take that as the last question. I would now like to hand the conference over to the management for the closing comments. First of all, let me apologize for all the inconvenience caused due to some technical issues during the call. We could have done the call without that. I'm sorry for that. And with this, I conclude this call. If you have any further queries, please contact SGA Investment Relations Advisor or us directly. And with a very positive looking next year, we end this call. And thank you, everyone, for joining us today for the earnings call. Thank you very much. Thank you, sir. Ladies and gentlemen. Thank you. Thank you, sir. Ladies and gentlemen, on behalf of Sansera Engineering Limited, that concludes this conference. You may now disconnect your lines.