Rossell Techsys Earnings Call for Q4FY26 & Full Year

追加: 2026-05-19

[00:00:00]FI26 earnings call. This conference call may contain forward-looking statements about the company which are based on the belief, opinions and expectations of the company as on the date of this call.

[00:00:12]These statements are not the guarantees of future performance and involve risk and uncertainties that are difficult to study.

[00:00:19]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 touchtone phone. Please note that this conference is being recorded. I now hand the conference Rishad Moan Gupta, managing director of Lash Limited. Thank you and over to you sir.

[00:00:48]Hi >> thank you. Hi good morning everyone to our respected shareholders, investors, analysts, customers, partners and members of the Rosel Texas family.

[00:00:57]I am Risha Brahan Gupta, managing director of Rosad Texas Limited. Joining me today are Mr. Sanul Barraman, chief executive officer, Mina Phillip, our chief operating officer, and Mr. J, our chief financial officer.

[00:01:12]Thank you for joining us as we as we close one of the most defining and transformative years in Rosel, Texas's history. On behalf of the entire leadership team, thank you for your trust and your continued belief in the Rosel Texas journey. Today the belief stands rewarded.

[00:01:29]At the beginning of the year we made clear commitments to our stakeholders.

[00:01:33]Standing here at the end I can say with confidence that we delivered on every one of them.

[00:01:41]Financial 2526 was a year of delivery discipline and focused execution. We crossed our guided revenue milestone. restored profitability across programs, expanded our order book, built capacity, entered new markets, and rewarded our people.

[00:02:00]Most importantly, this performance is not a one-off. Financial year 26 marks the beginning of a structurally high growth trajectory. The foundation built this year is designed to compound.

[00:02:13]Our financial performance in the fourth quarter was the strongest quarter in the company's history. We delivered revenues of approximately 142 crores, a 62% year-on-year increase with profits of around 9.5 crores.

[00:02:27]For the full year, our revenue grew from 259 crores in the year 25 to 485 crores in the year 26, an increase of 87%.

[00:02:38]Profit before tax rose from 10 crores to 28 crores, while our bita increased from 38 crores to 66 crores.

[00:02:47]These are not incremental gains. Revenue nearly doubled. Profitability more than doubled and ITA expanded sharply even after we made significant investments in capacity, people, inventory and new market entries.

[00:03:01]Our order book and revenue visibility is quite clear today. Uh our revenue visibility stronger than at any point in the company's history supported by strategic agreements aggregating approximately 3,000 crores. As on date the company's total order booking stands at around 715 crores of confirmed POS and during the year we received orders aggregating approximately 500 cr 570 crores further strengthening execution visibility.

[00:03:31]During the year the company also submitted bids aggregating nearly 4,500 crores across the aerospace defense space and semiconductor segments.

[00:03:41]The company secured a landmark multi-year space contract valued at approximately 400 crores along with repeat orders from overseas defense customers reflecting strong customer confidence.

[00:03:54]In the semiconductor segment, assured orders and onboarding of new customers to write sure growth and visibility.

[00:04:02]More bids are expected to convert into orders in the coming months, further strengthening revenue visibility.

[00:04:09]When it comes to operation highlights in aerospace and defense, our aerospace and defense programs delivered consistent on-time performance throughout the year. Seeing our performance, Boeing not only appreciated our efforts, but also agreed to level their future schedules. A powerful endorsement of the relationship and trust we have built.

[00:04:28]Businesses with these fortune customers saw meaningful growth during the year.

[00:04:32]These are not transaction relationships.

[00:04:34]These are strategic partnerships built over years of consistent delivery and quality.

[00:04:40]We recently received a repeat order from one of the major customers in defense.

[00:04:45]In the semiconductor space, uh we emerged as a key growth driver in the year 26 following successful customer qualification in the second quarter.

[00:04:54]Volumes ramped up immediately demonstrating both our manufacturing readiness and our strong customer confidence in our capabilities.

[00:05:03]This segment is now an established and growing revenue pillar for Rosel Texas where we are building early market leadership.

[00:05:10]In addition, we are in the process of onboarding another major overseas customer which is expected to further accelerate growth in the segment.

[00:05:19]From our space programs, we progressed decisively from qualification to volume ready execution during the year culminating in one of the most significant wins of the year 2026.

[00:05:32]We successfully executed the first large production batches and are well positioned to scale the segment meaningfully in the year 2027.

[00:05:40]In parallel, we are in the process of on boarding additional customers in the space segment, further strengthening our growth pipeline. One of our space customers is actively encourage encouraging an expanded presence in the United States as well for our US subsidy RGI. We are seeing increased interest from multiple customers seeking to leverage our capabilities.

[00:06:04]We are evaluating the optimal way to strengthen Rosel Texas Inc.'s infrastructure to capitalize on this growing demand and we view RTI as an important pillar of our global growth architecture.

[00:06:18]On the Indian market side, targeted efforts to expand our domestic presence began easing results during the year. We secured initial orders in the Indian defense and aerospace ecosystem. Modest in scale today but strategically significant in establishing our local credentials with our DPA license and AS910 MRO certification now in place. We have formally unlocked the Indian market for manufacturing, repair, overall and aftermarket services.

[00:06:46]In parallel, we have established strong domestic partnerships that provide a robust platform for scaling our India business in 27 and beyond.

[00:06:55]On the commercial aerospace side, we have also begun opening doors to the commercial aerospace segment. While we currently participate as a tier 2 supplier in the space, we are now positioning ourselves for a more meaningful entry into commercial aerospace programs. We would like to emphasize that this opportunity has the potential to be transformational. Once this door opens at scale, it could significantly reshape our growth outlook, business model, and long-term projections. We approaching this opportunity with discipline and intent, ensuring that when we scale our presence, we do so with the right capabilities, the right certifications, and the right partnerships.

[00:07:32]While revenue grew sharply by 87%, inventory increased by only 45% reflecting disciplined working capital management.

[00:07:41]Inventory coverage improved significantly from 10 months historically to 7.67 months, demonstrating enhanced capital efficiency.

[00:07:49]As our scale increases and demand planning continues to strengthen, we firmly believe and confirm that inventory coverage will reduce further in the coming years.

[00:07:58]On the capacity expansion side, to meet the growing customer demand and address urgent program requirements, we have taken a strategic decision to lease an additional facility of approximately 210,000 square ft in close proximity to our existing operations instead of constructing a new facility as previously contemplated.

[00:08:19]This decision enables us to achieve operational readiness significantly faster.

[00:08:25]The space and semiconductor programs will be migrated to the new facility which is expected to deliver revenue levels comparable to our existing facility.

[00:08:34]This transition allows us to optimize utilization across both facilities while maintaining focus, efficiency and scalability.

[00:08:42]This significant move ensures that capacity will not be a constraint on growth. It enables us to respond swiftly to customer needs and positions the company to sustain rapid expansion without compromising financial discipline or execution excellence.

[00:08:57]Our financial position remains stable and it is supported by diverse multi-banking framework. During the fourth quarter, we secured additional working capital gap and facilities to meet execution requirements for the current year. In parallel, the company's actively pursuing the fundraising initiatives for strengthening the balance sheet to support the next phase of accelerated global scaleup.

[00:09:21]These initiatives are being undertaken with priority and precision aligned with the company's accelerated global plans and commitment to financial discipline.

[00:09:30]On the people's side, uh the people are the foundation of every result we have reported today. The workforce growth from 680 to nearly 1,200 in two years is not just a number. It is a reflection of the oration we are building. We have continued to invest in training upskilling and certification including the use of virtual reality based training technologies. A strong capable and motivated workforce is the engine of our next wave of growth.

[00:09:59]And critically this year's extraordinary performance has been recognized and rewarded. We have employ we have implemented employee increments and performances bonuses. Our people created the value they deserve to share in it.

[00:10:12]This is a principle not a policy.

[00:10:16]Improved earnings, stronger fundamentals and a clear visible growth trajectory from the foundation of sustainable long-term shareholder value. During the year, we have delivered meaningful value creation reflecting the execution of our strategy. In line with our commitment to balancing growth investments with shareholders returns, we are pleased to announce a dividend distribution.

[00:10:37]The appreciation in SE Texas's share price reflects the market's increasing recognition of the fundamental transformation underway. While this progress is encouraging, we believe that a significant part of the company's underlying potential driven by a strong order pipeline, expanding customer base, enhanced certification and entry into new markets remains to be reflected over time. The value creation journey is progressing steadily with important milestones still ahead. To conclude, over the past years, we have not only delivered improved financial performance, we have built a strong foundation for sustainable wealth creation. This progress has been driven by disciplined execution, scalable growth initiatives, and increasing long-term visibility achieved within a single financial year.

[00:11:25]This value creation is not episodic.

[00:11:27]It's structured, repeatable, and designed to compound over time. We believe this is the right time for the company and for our long-term stakeholders to build on this momentum and advance to the next phase of growth.

[00:11:39]We would like to assure our shareholders that this journey is driven by our ability to convert opportunities into performance and performance into enduring value.

[00:11:49]This progress is underpinned by a strong invisible order pipeline, the continued trust of global customers and the unwavering commitment of our nearly 1200 colleagues who contribute every day with ded with dedication and pride. The foundation is in place, the direction is clear and the opportunity ahead is significant. We believe the company's entering a phase of sustained progress making this meaningful stage of Rosel Texas a journey. Thank you for your trust, confidence and continued belief in North Texas. Thank you.

[00:12:23]>> Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star N1 on their touchstone telephones.

[00:12:34]If you wish to remove yourself from the question cube, you may press star N2.

[00:12:40]Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question Q assembles.

[00:13:11]The first question is from the line of Jurg Jwani from Mal Analytics. Please go ahead.

[00:13:18]Hi, >> thanks for the opportunity. Uh Susan, uh congratulations on a good scale up that we have seen in the uh top line. Just one question on the margin front. Uh margins have been sequentially uh weaker and in fact lower than what we have been aiming for and guiding for. So any specific reasons for this pain if you can highlight please.

[00:13:40]Yeah. So, see basically Rosel is investing a lot for the future whether it's on people, whether it's on infrastructure, whether it's on training. We've also got a lot of new customers with a lot of new contracts where a lot of qualification is going on. A lot of energy and efforts are being spent on those qualifications, which doesn't necessarily read the yield in revenue this year, but in the following years to come, all these qualifications will uh result in repeat orders uh making our profitability much higher moving forward. So that's one of the prime reasons >> right. So uh going forward in FYI27 do you feel our margins can increase substantially and also if you could just broadly share a guidance in terms of what FI27 uh revenue would look like and if you can also break it up in terms of the new segments uh how they will contribute the semiconductor and your space and also if MRO will start in FI27 or is it for a later period?

[00:14:39]>> Yeah sure. So if you look at it from a revenue perspective, I can't be very specific, but we saw the scale that we had last year and we're targeting the same kind of growth this year as well.

[00:14:48]Uh on a revenue uh moving forward, the break up and the spit up of revenue I would say is 50% aerospace in defense and 50% non-erospace in defense for the year 2627.

[00:15:02]uh we got all our MRO licenses and uh we started a lot of marketing activities with all our different customers globally and in India. So hopefully we should see some uh traction in that uh in the short to medium term questions.

[00:15:19]>> Yeah, margin definitely will get better moving forward. I've always said uh that the margins will be between 17 to 22%.

[00:15:26]uh we are definitely going to show uh increased uh margin this financial year with a lot of efficiencies and the scale we're looking at. So yes, our margins will get better this year for sure.

[00:15:37]>> So it semiconductors and uh uh is typically a high volume zone margin business with that scaling up do you still feel that your blended margin will continue to be 17 to 20%.

[00:15:49]Yes, the margins in the current competency that we do uh whether it's for defense or non-defense will be in the range of 72 17 to 22%. Yes, definitely for our non-erospace and defense customers, we're doing a lot of automation which also increases our bottom line and our profitability.

[00:16:06]>> Got it.

[00:16:08]If I can squeeze in one more question.

[00:16:12]>> Sure.

[00:16:14]Thanks. Uh so sir u on on your balance sheet side if we see the debt has been increasing and in your opening remarks you did touch upon that uh you're looking for some fundraising so if you could just broadly share your thought process how going forward uh we'll manage our balance sheet and the uh specifically the debt side because again FI27 the growth that we are anticipating is uh is very high right so again we need a lot of working capital because our business is such wherein a lot of inventory goes in and uh you know a lot of money will required. So how are we looking at it and how do we plan to manage the the and the pressure properly?

[00:16:51]>> See the the idea definitely is uh to reduce our inventory levels moving forward. I didn't mention that as a company we were running on a 10-month inventory which we've been able to get down to 7.6. Uh the idea is to keep reducing that moving forward and eventually be a four month inventory company. Uh so a lot of energies and efforts are being made towards that and we're already seeing improvements coming in that area. We're also looking at a fund raise. Uh the idea for the fundra fund raise is primarily to for Rosel to you know to for growth enablement infrastructure. It's going to be growth enablement infrastructure uh that we see moving forward. Uh there's a lot of potential uh that we've seen with a lot of our customers. Uh and we are proactively strengthening our balance sheet uh to support the next phase of accelerated global scale up.

[00:17:38]That's the fundamental idea of of doing this QIP. So yes, we have a lot of plans in mind to to raise capital and also to improve our inventory levels moving forward, which will obviously make our balance sheet much stronger for all the different customers we work with moving forward.

[00:17:57]>> Got it. I have more questions. I'll get back in with you.

[00:18:01]>> Thank you.

[00:18:04]>> Thank you. Next question is from the line of Rahul Dasani from Apple. Please go ahead.

[00:18:10]>> Yeah. Hi, I'm audible.

[00:18:12]Yes, you are.

[00:18:14]>> Yeah, good morning and thank you for this opportunity. Uh, so just wanted to understand how much of the loss making Boeing order was executed in Q4 and how much is left to be executed in FI27.

[00:18:27]>> Uh um I can tell you that we did approximately u 75 crores this year on that program and we're left with uh another 70 for this financial year.

[00:18:41]And that will be throughout the year or maybe we >> it'll be uh high in the first two quarters and then low in the next two.

[00:18:50]>> Got it. And if if the same thing if you can share for the space and semicon execution in Q4 and plan for FI27.

[00:18:59]>> Yeah. So for uh for both the space and the semiconductor this year we're looking at a significant growth. We're looking at close to a a 300 to 400% growth on our revenue from the previous year for both semiconductors and space.

[00:19:13]>> Got it. And since in our introduction you spoke about the entry into the commercial that we are seeing right now.

[00:19:20]So by when can we expect our first large commercial aircraft powder and execution?

[00:19:27]>> So the companies we're talking to are building a strategy for India. uh they they made a decision that they want to create a supplier base in India. Rosel has been shortlisted as one of the suppliers they want to work with. Uh so it's still early stages but we're hoping that we shall get some RFPs uh by the second quarter of this financial year.

[00:19:47]So we should be getting some RFPs and requirements uh and opportunities by the second quarter of this financial year.

[00:19:53]>> Got it. But is this a starter order or will it be significant from the first level itself? when you're looking at commercial orders, they're all uh much larger in scale. Uh you know, they're not going to be small size orders. Yes, maybe the first year the revenue would be much smaller, but then the scale uh in the second, third, fourth and fifth year will be much much uh larger moving forward, but the the order sizes are much larger than uh the defense or the space or the semiconductors that we dealing with today.

[00:20:20]>> Got it. That is very good to hear, sir.

[00:20:22]And if you can also share what are the plans in the MRO part are we looking for any acquisition or will we develop the capabilities and do everything from scratch here. See we've already got the license we have a lot of relationship with existing customers that we're in dialogue with. We're partnering with not only foreigners but uh foreign companies but Indian companies as well. Uh so it's something that we're working on. uh Santil is is is taking lead on this and we're pretty confident that this should bring us a lot more value to our customers and obviously uh increase our profit margin significantly moving forward. Lot of potential not only in MRO and the existing fields we are in but Rosel also has a plan to grab a lot more content share on the existing platforms we're on today uh so we can increase our revenue three to five times on the existing platforms that we're on.

[00:21:13]>> Got it. Very clear. And just one last question from my side. We had earlier announced a large strategic contract from Boeing for a new platform of theirs. So what has been the status of the same and when do we expect this to commercialize?

[00:21:27]Uh I think deliveries have started. Uh I don't want to say something wrong. Uh either Santina if you can take this up but I think deliveries have started and I think the program ramp up is going to happen sometime in the third quarter of this financial year and then it'll be consistently growing for the next 5 to seven years.

[00:21:43]>> Okay. And you don't think that the quantum for the same?

[00:21:47]>> I we announced uh we announced the the award wins when we got them I think a couple of years ago. It's I I think you're referring to the the T7 program if I'm not mistaken. Correct.

[00:21:57]>> Yeah.

[00:21:58]>> Yeah. So we have strategic agreements of of close to uh 200 million on the T7 already. $200 million.

[00:22:07]>> Got it. And you said this will be ramping up from Q2.

[00:22:11]>> Uh I think so if I'm not mistaken. I leave that to for some to answer when the productions on purpose is expected for that program.

[00:22:20]>> Yes, the auto started. Go ahead. You your voice is not clear.

[00:22:28]>> Yeah, I'm Dina. Um, yes. Uh, it will ramp up from later part of this year.

[00:22:34]>> Later part of this year. Got it. Yeah, that would be all for my side. I have a few more. Join back in the queue. Thank you.

[00:22:43]Thank you. Next question is from the line of Fred Choxy from India Security Advisor. Please go ahead.

[00:22:50]Um good morning sir. Thank you for the opportunity. Congratulations on a good scale up. So my first request to you would be is uh if you know the I think the company is scaling really well and to to do justice to understand the story even deeper would urge you all to consider doing some in-person analyst meet so that everyone can really spend some more time with you all and understand the story even better.

[00:23:12]>> Sure. Well noted we can look into this for sure.

[00:23:15]>> Uh so secondly I missed the opening remark. So I just had a question. So I understand we've had a good revenue scale up. we have a visible order book and we've had a slight miss on the margins but if I take a 3 to four year lens what where do you see Rosal Texas as a company in 2030 and what do you how how should one envision the future of the company I mean I I I'll talk to you first about you know the the whole macros uh macro picture that we're looking at I mean if you look at it globally what's happening aerospace commercial production is ramping up uh defense spend is increasing significantly countries are increasing the GDP we spend on defense. Uh there's rapid space ecosystem growth happening.

[00:23:56]Uh semiconductor equipment expansion is happening globally and uh companies have decided to create a supply base in India. Uh China diversification is happening. So a lot of companies are looking at coming to India. Supply chain there are a lot of supply chain resilience requirements. Uh so there's a big demand for trusted manufacturing partners and and Rosel is very well positioned for that. We are a high reliability manufacturing company. We're interconnect systems. We do uh there's a lot of requirement for uh the current competencies that we're in today. And like I said earlier, the idea is to uh strengthen our balance sheet and and uh and be able to grow and uh to the needs of our different different customers.

[00:24:41]Today we do x amount uh of of an aircraft. The idea is definitely in phase two, which is two two and a half years from now, for us to be able to deliver a lot more product and a lot more content on the existing platforms that we're in. So, we're also looking at moving up the value chain two years down the line where we can multiply our revenue bl per platform significantly.

[00:25:05]So, we are positioning ourselves for the growth we see coming our way. And that's why one of the reasons of taking another 210,000 ft² of space next to us was to meet the growing demand of all our customers. So if you look at it, Rosell has the reputation. We have the global customers. We've shown strong growth. Uh we have secular tail tailwinds. We have a visible scalable business model. There are significant qualification barriers for anyone to get into the different activities we're in today. And uh that's why today Roseland is just getting set for this increase in demand. And like I'm saying the growth that we're even seeing this year will be similar to the growth we had last year. So we are preparing ourselves to be able to deliver the right at the right quality at the right price and that's one of the reasons we're looking at a QIP as well this year. I hope I answered your question.

[00:25:59]>> Yeah, that's helpful. So just a followup here. So currently we're largely doing work related to ES and that would fall within the avionics realm right so it's just >> electronics yes you can you can say the electronics yeah >> yeah it's within avionics right in in any sort of plane or fighter jet or whatever so just to going forward are we also some when you keep saying we have further opportunities to move up the value are you talking about maybe getting into aerero engine parts maybe aeros structures and different parts of different parts that we can get into is is that >> I can I I can put it we're looking at getting into electromechanical integrated systems and >> that's the next question. So, so three, so today I understand you've given a certain level of AITA guidance. So, just to understand two years out once maybe the QIP is done, money has come in, KPEX is done, our MRO has MRO division has been set up, commercialization is been an uptick. What do you see as a margin profile for the company two years from today? which would be two years from see two years from today two years two two years down the line we'll still uh be focusing on our current competencies and where we're going to be scaling our current competencies so I said in our current competencies we're looking at anywhere from 17 to 20 uh 22% obviously on the MRO side the profit margin goes much higher because it's services that you're providing and when we go to our phase 2 expansion which I mentioned about electromechanical integrated systems and assemblies then our profit margin from 17 to 21 can go anywhere from 21 to 30%. You know, so that's the kind of scale we're looking at. Uh right now all focus is for operation excellence. Uh we want to dominate wire harness scaling for the next two years at least. We're focusing on a lot of commercial work. We're focusing on our semiconductor growth. We're focusing on uh our operational maturity, our systems, our margin protections, infrastructure scaling and our MRO foundation. So the focus for the next two years is these things I just mentioned and then the idea is to look at phase two sometime in the year 2829.

[00:28:10]>> Noted sir. So just a quick question on uh the mro. So right now majority of India's fleet usually goes out to get service and this is a good opportunity for us. So what is the sort of time you are envisioning here like what what do you think is the total what are the numbers you think we can generate from this business?

[00:28:29]That's that's a tricky question to answer but uh why don't I leave this question for Santel Santel if you don't mind taking this up because you're heading the MRO and that's your baby.

[00:28:38]>> Sure. Um good morning everyone. this until uh I'm the CEO for for photoell and like mentioned uh you know we have the license and we are now talking to all our existing customers and you know organic and inorganic growth existing customers and also external customers saying that we do have a capability and we are generating a lot of I guess interest from our customers and so this is you know the foundation right where we are talking to our customers and things like that to put a number you know might be tricky like Rish said It's uh something we are working on but we do see great potential partnering with you know other service providers and also with our existing customers even you know from the US there is a lot of interest with our existing customers. So I'm talking strategy but to put a number is uh you know we we'll work through to see uh you know how how well we're able to ramp up in a in a very short period of time.

[00:29:34]>> That's helpful. Thank you so much for answering all the questions and just once again would request you to please conduct some in-person meets so we can spend some more time together. All the best.

[00:29:43]>> Thank you. We'll definitely invite uh you know a lot of our customers and interested people to come visit our factory because once you visit the factory you get the wow factor. You'll definitely see all the worldass manufacturing that's happening at >> Thank you.

[00:30:02]Next question is from the line sharing investor please go ahead.

[00:30:08]Yeah sir thanks for the opportunity sir uh as as you mentioned that the growth will be according as per the last year so it will be around 80 to 90% growth uh you have given the margin percentage of 16 to 17% can you throw some light on what will be the pack margin approximately >> hi sorry I'm not sure if that question was to me but I got disconnected I've just joined again so if you could please repeat that question >> sure so sir you ged that approximately we will get the same kind of growth as the last year. So uh the growth is approximately 87% this year. So we are expecting that we will be getting same 80 to 90% of growth next year also. And uh you have >> growth yes in similar levels. Yes.

[00:30:54]Similar levels.

[00:30:55]>> Yes. Correct. And uh the profit margin you said that it will be approximately uh 17 to 18% or 16 to 17%. But what would be the pat margin approximately?

[00:31:10]>> See that totally depends. We see what our pad marginally there's going to be an improvement on that. And like I said, we're looking at uh also looking at strengthening our balance sheet. So it completely uh depends on when the 3P happens as well and when the fund raise happens. Uh so it's difficult to answer that question now. But from our current levels, if it continues the same day, we will definitely see an improvement next year as well. on a I beta on a PBT and our VAT and obviously our revenue much more much higher than what it is.

[00:31:42]>> Sure. And when can we expect that our CFO will be positive?

[00:31:47]>> Sorry.

[00:31:49]>> When we can expect that our cash flow margin will be positive, cash flow will be positive.

[00:31:55]>> Can I take that question?

[00:31:57]>> Yeah, please.

[00:31:59]>> We are expecting a ramp up. I think uh in the coming years you should be uh able to see much improvisation in that.

[00:32:08]>> Okay sir. Thank you. Thank you.

[00:32:14]>> Thank you. Next question is from the line of payments from Anand Capital.

[00:32:18]Please go ahead.

[00:32:20]>> Hello. Am I audible?

[00:32:22]>> Yeah.

[00:32:24]>> Yeah. So uh sir um so uh last call you guided for um you know achieving around 1,300 cr um topline in next two years.

[00:32:33]So we did somewhere around 500 cr this year. Uh so the 800 cr are we expecting to reach that 800 cr in the next year?

[00:32:45]>> Yeah we're looking at a very significant growth just as we grew last year 87% we're looking at something similar this year. Uh okay and um um yeah so one another question is we uh actually deal with long-term contracts right majority of our contracts are long-term >> in aerospace defense. Yes in aerospace defense.

[00:33:04]>> Yeah. So in terms of >> not not in semiconductors and not in space.

[00:33:09]>> Okay. Okay. So in that in that aspect uh how do we uh you know try to compensate the raw material prices variation when we are doing the agreements? How do we uh it's all built in. We we have backto-back agreements. If we are signing a five-year contract with our customers, we sign a five-year contract with all our different suppliers. So, when we have bidding, you get an RFP.

[00:33:30]You get different bids from all our different uh suppliers around the world.

[00:33:34]Uh they tell us what the escalations are. They don't, we add an escalation and then we submit our bid. So, uh it's kind of a backto-back agreement in some cases that we have uh from our customers to our suppliers. And in some cases you take an escalation and you add that to your cost.

[00:33:49]>> So, so we uh uh uh am I trying to understand like uh are we able to pass on the prices to the customer uh for the existing orders also?

[00:33:59]>> In some cases uh yes, we've uh changed our contract contracts also recently where we've added a few more clauses whether it's an EPA clause which is an equitable price adjustment clause. Uh we've added those in our contract. Some customers agree to it and some don't. Uh we've also started asking for advanced payments and upfront payments for long lead items or uh material that is single source that needs to be procured up front to secure the material to to deris the program. So it it depends on what that material is and who the customer is. But uh yes definitely in some cases we're able to get compensated from our customers and in some cases uh we add that in our contracts as well.

[00:34:42]>> Yeah. And one last question um what was the percentage of uh cost that went into our manpower last year versus this year?

[00:34:51]>> Uh J can you please answer that around 15% of uh of our uh revenue goes into employee cost in our P&L. Uh we're looking at uh an improvisation in this year as we scale up too.

[00:35:11]So this year it was 15%. How how much was it last year?

[00:35:15]>> 15.5 in FI26 where we're looking at uh uh good improvisation in this year in FI27.

[00:35:23]>> Uh okay. Okay. That's all from my thank you and all the best.

[00:35:28]>> Thank you.

[00:35:30]>> Thank you. Next question is from the line of Raj Agraal from Disha Asset Management. Please go ahead.

[00:35:39]Uh so thank you uh for the opportunity and uh congratulations on the scale up.

[00:35:44]So my first question was on the semicolon semicolon space right you know where do these businesses get their wire harnesses today and uh going forward what kind of share of business do you think uh you know can move to India and Rossell particularly >> um so it depends on the customers we're dealing with today one of the customers we deal with have uh a big supply chain base in in in in South Korea and uh because it's such a growing market uh they've decided to create a new supply base in India. So, Rosel is one of the partners they've tied up with. When you're looking at it from a scale perspective, I think uh I mean uh the sky is the limit in this. I think we barely scratch the surface yet. Like I'm saying this year on the semiconductor, we should be growing at 300 to 400% of that last year. And uh I mean the growth in this can be pretty pretty significant. I mean uh it's difficult to put it in numbers but definitely the idea I mean the target is we can do up to even 200 million in 3 years or four years from now that's the kind of potential we see on the semiconductor side but we can do 200 million revenue 3 to 5 years down the line >> that's that's great to hear so thank you and so on the on on this topic again you know currently we have one large customer in each of these basic uh categories you alluded that one more customer in semiconductor is is going to get added. So, is it a new semicon company or is it a supply chain partner of of basically one of our customers that we have?

[00:37:16]>> No, it's a new semiconductor company.

[00:37:18]It's a it's I mean they've been in existence for years. One of the largest semiconductor manufacturers in the world and uh we should be hopefully joining hands with them and signing a contract with them soon.

[00:37:29]>> Wow. Sir uh and in uh on the space side itself there are two large you know space companies in US uh with our current facility in US getting refurbished based on one of our customer requirement. Uh can you start doing business with both of them? Is it a requirement to be in US for this?

[00:37:47]>> Uh yeah sure we can work with whoever.

[00:37:49]There are no restrictions. Uh we can work with any company. Uh there there's no restrictions on that.

[00:37:55]>> Got it. Sir and one last question. Uh so our margins had declined uh is it um because of changing mix or that was not the reason for decline in margins?

[00:38:05]>> It's a lot of investments that do is doing like I'm saying they're growing significantly. The partners need to our customers need to qualify a lot of their products to qualify products. There's a lot of investments that are required.

[00:38:15]There's a lot of training that takes place uh there's a lot of learning curve that happens and Rosel is doing a lot of that uh primarily for our new customers in the semiconductor space category. So a lot of investments are being made in that and we're also making a lot of investment in in-house for our training and automation to get better and more efficient moving forward. So like I said yes definitely there are a lot of qualifications happening now which will uh yield in much higher profits moving forward. So it just depends of on how many qualifications yourself does on a yearly basis and I'm happy to say that uh it's increasing significantly on a yearly basis and that's why we see a very positive outlook over the next 3 to 5 years in the competencies that we're in.

[00:38:58]>> Thank you sir. Thank you so much for this opportunity.

[00:39:03]>> Thank you. Before we take the next question, a reminder to all the participants, if you wish to ask a question, please press star and one.

[00:39:12]The next question is from the line of Misha from Safire Capital. Please go ahead.

[00:39:18]>> Yeah. Hello. Am I audible?

[00:39:20]>> Yes.

[00:39:21]>> Hello. Yeah. Hello. Good morning. Um, great set of results. The commentary has been very positive. Um, just a few questions on the segmental split. You said that the semicolon in space is going to grow 300 to 400 times in FI27.

[00:39:36]Um, could you help me out with the numbers for FI26? What sort of revenues we recorded on these two segments?

[00:39:44]>> I don't know if I can be so specific.

[00:39:47]Uh, but I can say um approximately 20% of our revenue in the year 25 26 came from these two segments.

[00:39:56]>> Okay. And that that is going to go significantly up I should say from the cont 300 to 400% increase this year.

[00:40:05]>> Correct. Okay.

[00:40:06]>> And the margins on these are are uh far better than the aerospace and defense if I'm correct.

[00:40:12]>> I I would say would be in the same lines between 17 and 20.

[00:40:16]>> Okay.

[00:40:17]>> And on the MRO side you said that the scaleup is going to happen in a very short time. We're going to see a good ramp up. um any sort of guidance on how much contribution do you see coming in from MRO maybe for 28 29 um that could kind of significantly increase our margin outlook going forward >> again I will leave that for Sil if you mind taking it up please >> sure sure um yeah thank you for the question this is the CEO for u I made a comment earlier uh we do have the certification we received that a few months ago we're very proud of that right now we're in the process of building the foundation ation of you know letting all our existing customers know that we now have a service of MRO also and we're also marketing that with outside customers I referred that as the organic and inorganic growth and uh so right now we are very excited that we are getting a lot of interest both from our existing and new customers globally right not only in India but also in the US so we'll we'll work through that we are pretty you know excited about this journey and uh you'll see some pick up on on revenue in the coming quarters >> and just to add on what some said it's not only the MR we looking at like I mentioned earlier today is nearly on every military platform that comes out of the US uh the idea is to increase our content on each platform from Hans and panels and move up the value chain so we have a very robust plan of how we're going to do that and the idea is to do that two years down the line in in the year 28 uh where we invest to uh you know do a lot more for our current customers, our current platforms where we're going to be supplying X into three or X into five moving forward.

[00:42:03]>> That is great. Um also the order book of 715 cr um any sort of split you would provide me on what portion of it comes from the bent semicond >> uh yeah so I mean just to rephrase we have strategic agreements for 3,000 cr and confirm 700 uh orders are placed on a strategic agreements also on a yearly basis uh so strategic agreements among the aerospace and defense side and after the 715 confirmed POS I mean, uh, I hope I'm not wrong with my numbers. Please correct me some if I'm wrong, but I would say approximately 50/50 with the Aerospace and defense and non-erospace and defense.

[00:42:42]>> Okay. Um, and on the QIP, you said that we'll be raising some funds. Any sort of color on when this would be happening?

[00:42:51]What sort of funds are we raising? Any quantum on that? And also, um, where are we going to be using it?

[00:42:57]>> Like a new facility, are we putting it up? A new market we're going to enter.

[00:43:02]Um yeah, >> you see we're making all our efforts for the QP obviously from our mind uh we want the right investor to come in as well. So obviously we're targeting to get the right investors.

[00:43:13]>> Mhm.

[00:43:14]>> Uh so that's uh that's the idea basically for the QIP. Uh where the money is being used it's it's going to be primarily used for our infrastructure uh you know capacity expansion. We're expanding our facility footprint. We're adding infrastructure. We're scaling our production capabilities uh and we're preparing ourselves a lot of platforms.

[00:43:35]So that's one of the areas where money is going to be used. Second is operational infrastructure. As we scale, we need better systems, quality infrastructure, planning capability, supply chain capability, testing infrastructures.

[00:43:48]So we're industrializing ourselves much more. So that's again where money is going to be used. And the third area is uh working capital for scale. you know for the aerospace ramp ups we're seeing for the semiconductor growth we're seeing for long lead inventory uh so it's going to be primely used in these three areas capacity capacity expansion operational infrastructure and working global >> okay yeah uh yeah that sir thank you so much >> thank you >> thank you next question is from the line of Aner Singi from the land please go ahead >> hi good morning so just a clarification when uh we say 3,000 of strategic contracts. Is that uh over and above the order book? Like does that the revenue over and above the order book?

[00:44:33]>> Yes, that's over and above. Correct.

[00:44:36]>> All right. And uh what is the typical size of an order that we receive? Like recently we received a repeat order for is it typical range of the order size?

[00:44:45]>> It again completely depends. We're on nearly every platform so it completely depends on the platform and the customer. So it's difficult for me to answer that question.

[00:44:54]>> Okay. Uh so so 3,700 crores of visible revenue is what we have right now.

[00:45:00]That's the correct.

[00:45:01]>> No, we have visible revenue because of our strategic agreements as well. So we have 3,000 crores of strategic agreements and how the aerospace and defense landscape normally works 6 to 12 months before delivery. Uh POS are placed against the strate strategic agreements. So you have a very clear outlook for the next 3 years at least of where we're heading as an organization.

[00:45:20]>> All right. And uh just a request if we could come visit you and see the factory that would be very helpful.

[00:45:28]>> Yeah sure we can definitely plan that. I will tell uh Krishna to take that forward and you can be in touch with Krishna for that.

[00:45:34]>> Sure. Thank you.

[00:45:36]>> Thank you.

[00:45:38]>> Thank you. Next question is from the line of Mitun Mati from MM Capital.

[00:45:43]Please go ahead.

[00:45:46]>> Uh good morning sir. I wanted to know about the geography splits in terms of revenue. How much is coming from exports and predominantly uh how much is from North America if at all we have any other geographies uh uh provided as >> yeah sure so today we're dealing with multiple geographies. We're not only dealing in the US but we deal a lot with Europe. We're dealing with Israel and we started dealing a lot with India as well. Uh the question was the revenue split. Sorry uh could you repeat the question? Yeah, the revenue splits as in uh in terms of geography especially exports.

[00:46:21]>> Uh so I would say 98% of our revenue is on exported. So we're still very export focused. So 98% of the revenue is on export >> and the region is North America and uh we have diversified into southeast middle east and we're looking to expand uh more on these numbers of southeast and middle east uh in the coming year uh also in in future.

[00:46:52]>> Great. Uh my second question would be in terms of the uh in terms of the low orbit satellites which we had initially with blue origin. Uh so are we getting any scale up orders over there or uh or we are not getting any orders in the low orbit origin tech I'm trying to understand how it's uh today we're not dealing with blue origin we're dealing with uh Amazon uh for all our uh uh uh space requirements. So we're dealing with them now. The idea is to obviously expand our customer base on the on the space side as well and uh looking at uh getting new contracts from different customers. The sun engineer >> terms of semiconductor we are predominantly providing wiring harness or are we providing anything more than wiring harness over there?

[00:47:43]>> Wire harnesses as of now it's all wire harnesses.

[00:47:46]>> Okay. Okay. The last question would be s the quantum of amount which we are trying to raise in QIP would be around >> uh look it you know QRP has to be done on on on the market cap of the company with the 5% up down market share so I mean it is raising anywhere from uh 7 to 10%.

[00:48:08]>> 7 to 10% fair enough appreciate it sir.

[00:48:11]Thank you. I got my answers clear.

[00:48:14]>> Thank you.

[00:48:16]>> Thank you. Next question is from the line of Ankor Gulachi from Jan Capital.

[00:48:20]Please go ahead.

[00:48:24]Ankor, your line is unmuted.

[00:48:27]>> So just a small question. Your transportation is uh Semon or Airlift and uh whether you guys build on FOB or CIS basis.

[00:48:38]>> Sorry, could you repeat that? I something on transportation. I lost you.

[00:48:41]It's it's it's all being done by air right now. It's fated. All all the everything we supply is F rated.

[00:48:49]Was that the question?

[00:48:50]>> Yes, that's fine. And second, uh FOB basis or CIF? I mean, you pay for freight or the the customer pays for freight?

[00:48:58]>> No, the customer pays for it. Uh please correct me if I'm wrong, something the customer pays for it, right? No, that is correct. Uh predominantly all the shipment cost is paid by the customers. Yeah.

[00:49:09]>> Okay. Thanks. All the best.

[00:49:14]Thank you. Next question is from the line of Ankush Mahajan from Sanctum 12.

[00:49:19]Please go ahead. Sir, >> thanks for the opportunity uh to ask me question. So I joined later. Uh just try to understand sir if we if I see the yearon-year basis the margins are on the lower side beta margins. So what was the reasons behind it? It's a one time or uh recurring something or what is the guidance for FI27 for the margins?

[00:49:42]So definitely there'll be an improvement in our in our margins on IBITa and our PBT in this financial year which is 26 27. Uh the reasons why margins were a bit lower in the year 2526 as I mentioned earlier is making a lot of investments uh in infrastructure in training in tooling in people and processes. Uh we're doing a lot of qualifications right now with our new customers. Uh that requires a lot of investment uh and the revenue comes uh in subsequent years once that product is qualified. So we're doing a lot of FAI which are starting the inspections uh where the time taken and the effort and and the cost taken to to qualify that component is much higher in the in the initial days and once qualified we'll see much better margins moving forward because we're doing a lot of automation for our non-defense customers. So our profit margin will be much higher moving forward.

[00:50:31]>> Thank you. Thank you sir.

[00:50:37]>> Thank you. That was the last question for today. I now hand the conference back to Mr. Rishad Mohan Gupta for closing comments. Over to you sir.

[00:50:47]Would like to thank everyone for joining. Uh Rousel is on a very good growth trajectory. We've been able to build the confidence of all our customers. We are a very reputable company. We deal with the best of the best globally and uh we're very well positioned and to grab the scale that we foresee and we're very excited about the future and uh sky is the limit. So thank you all for all your support these years and look forward to your continued support moving forward. Thank you all very much.

[00:51:21]>> Thank you very much members of the management on behalf of Resell X Limited that concludes this conference. Thank you all for joining us today and you may now disconnect your lines.