Thank you. Thank you, team SGA.

Good morning, everyone, and a warm welcome to our first quarter earnings conference call for fiscal year 2027. Joining me today is Mr.

Vishnu Malpani, our Whole-Time Director, Mr. Ronak Jajoo, our CFO, and our investor relations advisors from Strategic Growth Advisors.

Our standalone and consolidated financial results, along with our latest investor presentation, have been uploaded to the stock exchanges and our website for your reference. To start with capitalization on global industry megatrends, before we review our specific operational milestones, it is critical to look at the powerful macroeconomic tailwinds driving our businesses.

We are currently witnessing an unprecedented synchronized high-growth cycle across all sectors. In the energy domain, the global push for energy security and the transition towards advanced gas turbines have triggered massive, multibillion-dollar global equipment upgrade cycles.

Concurrently, the aerospace and defense sector is experiencing structural supply chain shifts, driven by a global surge in aircraft demand and an intense domestic focus on defense self-reliance. These are not short-term spikes.

They represent structural, multidecade growth shifts. Because Azad has spent years securing strict OEM qualifications and building specialized heavy infrastructure, we are uniquely positioned at the epicenter of this dual megatrends.

These powerful industry tailwinds provide a strong compounding foundation that will fuel Azad's long-term scale and order book expansion for the years to come. Now, a very historical national milestone: India's first indigenous turbojet engine.

I want to begin today's call with an announcement that fills me and our entire team at Azad with immense national pride. I'm thrilled to share that Azad Engineering has successfully manufactured, assembled, and delivered India's first indigenous, expandable turbojet engine to the Gas Turbine Research Establishment, DRDO, and the Ministry of Defence.

As highlighted in the official press release from the MOD, jet engine technology represents one of the final frontiers of sophisticated engineering. It demands a level of extreme precision, advanced metallurgical expertise, and uncompromising manufacturing quality that is mastered by only a select handful nations globally.

For Azad, this milestone is a profound architectural shift. We have successfully evolved from being a precision component manufacturer into a fully integrated propulsion system player.

By taking up the end-to-end manufacturing, assembling, and integration of this complete jet engine assembly, we have moved right up the value chain. This significantly expands our total addressable market and firmly seals our position as an indispensable trusted partner in the India's long-term aerospace and defense sovereignty.

We have also been advised to prepare for a significant scale-up in production volumes once the ongoing sequence of testing is completed, which will, in turn, accelerate development across all of India's past and future critical indigenous engine programs. On the capacity expansion, another feather added: the new Baker Hughes facility.

Our physical infrastructure footprint is scaling up right alongside our technical capabilities. I'm proud to report that our massive multifacility expansion roadmap at our Tunki Bollaram Industrial Park is progressing exactly as planned.

Following the successful commissioning of our dedicated lines for Mitsubishi, GE Power System, and Siemens Energy, we hit our next major milestone recently. In April 2026, we officially inaugurated our fourth dedicated lean manufacturing facility, a state-of-the-art 7,600-square-meter facility custom-built for Baker Hughes.

Operating dedicated plants represents the deepest possible level of customer integration in our industry. It creates immense operational stickiness and provides long-term, multiyear supply chain visibility with global marquee OEMs.

Civil construction across the remaining units at Azad Centre of Excellence is on track to wrap up within this fiscal year. While we are undertaking a measured, calibrated ramp-up across these new lines to satisfy stringent customer qualification schedules, we expect the more substantive revenue contributions to begin crystallizing in the second half of this financial year.

Now on the Q1 FY '27 financial performance snapshot: our unwavering focus on operational discipline, operating efficiencies, and optimized product segment mixes has enabled us to kick off the new financial year on the strongest note ever. Looking at our standalone financial performance for Q1 FY '27, I am happy to mention that we have met our guidance.

Revenue from operations grew by 26.8% year-on-year, reaching to INR 170.5 crores, up from 134.5 crores in Q1 FY '26. Reported EBITDA expanded at a faster pace of 32.1% year-on-year to arrive at INR 64 crores, reflecting the mounting benefits of our operating leverage.

EBITDA margins expanded to a robust 37.6%, up from 36.1% in the same quarter last fiscal. Profit after tax registered a healthy growth of 21.2% year-on-year to stand at 36.4%, maintaining an exceptional PAT margin of 21.3%.

On a consolidated level, our revenues came in at 172.6 crores, with an EBITDA of INR 64.4 crores, and PAT of INR 35.2 crores. Our business segment across energy, oil and gas, and aerospace and defense continues to grow symmetrically and strictly in tandem with our long-term structural targets.

On the closing outlook, very important for me to give this message: as I have mentioned this earlier, FY '26 was a year of expansion during which we undertook a wide range of foundational activities to position Azad for its next level of revenues, performance, and growth. I'm pleased to report that we have already stabilized 80% of these initiatives in Q1, with the remaining major activities on track for completion by mid-Q2 and full closure by Q3.

Our manufacturing infrastructure is now running at full throttle, and we expect this to propel Azad into its next phase of accelerated growth from Q3 and Q4 onwards. At Azad, we have never chased reckless scale at the expense of our margins.

Our growth is anchored entirely against firm, long-cycle contracts, multiyear order book visibility. We do not engage in speculative expansions.

Backed by an incredibly strong, growing pipeline and a world-class manufacturing infrastructure that is rapidly maturing, we enter the rest of FY '27 with absolute clarity and complete execution confidence. We proudly reiterate our long-term annual revenue growth guidance of over 25% while maintaining our stellar industry-leading profitability profile.

We remain dedicated to building a high-moat, high-resilient global precision engineering platform. I want to thank our customers, partners, and our exceptional team at Azad for the relentless execution, and our shareholders for their continued confidence in our journey.

I now hand over to our CFO, Mr. Ronak Jajoo.

Thank you, everyone.

Thank you, Chairman, sir, and good morning to everyone. Now I will take you through a comprehensive review of our financial performance, capital structure, and operating efficiency metrics for the first quarter ended June 30th, 2026.

As the Chairman summarized, this quarter was marked a highly successful phase of execution. The financial data demonstrate that our front-ended capacity investments are successfully translating into scalable, highly predictable revenue lines.

Most importantly, we are beginning to see the true power of a structural operating leverage as our assets base moves through its planned stabilization curve. Let me take you through the financial highlights and operating leverage.

Our standalone financial performance for quarter one FY '27 underscore our robust business momentum across both sequential and year-on-year horizon. Top-line expansion: our standalone revenue from operations reached to 170.5 crores, reflecting a stellar growth of 26.8% year-on-year basis, against 134.5 crore in quarter one FY '26.

On a sequential basis, our revenue grew by 8.3% over 157.4 crore reported in quarter four FY '26. This sequential growth highlights a steady acceleration in customer schedules and manufacturing deliveries right at the start of the fiscal year.

Operating leverage in EBITDA growth: our reported EBITDA grew at a impressive pace, hitting 64 crore, representing a growth of 32.1% year-on-year basis from 48.5 crore in quarter one FY '26, and strong sequential jump of 10.9% from 57.8 crore in quarter four FY '26. Operating margin expansion: this outpaced growth directly extended our standalone reported EBITDA margin to 37.6%.

This is an expansion of 150 basis points over the 36.1% recorded in quarter one FY '26, and solid 90 bps points step-up from 36.7 achieved in quarter four FY '26. This margin progress proves that our pure-play manufacturing operations are absorbing fixed corporate overhead efficiently as production scale rises, and we are confident to maintain the same in coming quarters and so.

Core material margin cruising efficiency: this expansion was heavily supported by our cost indigenization program. This reduction reflects our long-term efforts to lower core manufacturing costs by onboarding domestic suppliers and increasing backward integration through our subsidiaries.

Let me take you through the analysis and variance on other income and net profitability. To evaluate our pure core performance accurately, it is essential to analyze the structural change within our non-operating income segment occurring on account of volatile foreign currency momentum, which we saw in quarter four FY '26 because of macroeconomic environment, which is not in control of the company.

The foreign currency element in other income: other income came to 4 crore in this quarter, displaying a sharp moderation from 9.1 crore in quarter one FY '26, and substantial decrease from elevated 17 crore reported in quarter four FY '26. I must emphasize that this sequential drop is entirely a function of foreign currency dynamics.

In quarter four FY '26, other income was heavily bloated by major non-operating foreign currency gain due to macro reason, as I mentioned, beyond the control of the company. In contrast, quarter one FY '27 witnessed currency volatility that normalized the non-operational tailwind.

Furthermore, our treasury income is expected to moderate, as I mentioned in last call also, as we steadily deploy our cash reserves into active factory infrastructure and machines. Net profit metrics: our standalone PAT grew at 21.2% year-on-year basis to INR 36.4 crore, up from 30 crore in quarter one FY '26.

Sequentially, net profit grew at 3.5%, against 35.1 reported in quarter four FY '26. This yields an exceptional standalone PAT margin of 21.3%, basic EPS of 5.63 per share.

On a consolidated metrics, our metrics remain equally strong. Consolidated revenue from operations grew at 25.9% year-on-year basis to close at 172.6 crores.

Consolidated EBITDA at 64.4 crore, yielding an operating margin of 37.3%, while consolidated PAT reached 35.2. All three subsidiaries are performing precisely on track with our turnaround target, which we had set for ourselves.

Now I'd like to give hand over to Mr. Vishnu Malpani, who is our Whole-Time Director, to take you through the strategy.

Thank you.

Thank you, Ronak, and good morning, everyone. The Chairman, Mr.

Chopdar, spoke about what 22nd of July meant to the nation. Our CFO, Mr.

Jajoo, has given you the critical numbers that drove this quarter. Let me give you the corporate view, because from where we sit, that delivery of an engine was much more than a successful engineering milestone.

It is a permanent upgrade in Azad's market positioning. Three things that changed on 22nd of July.

First, we moved up the value chain, global value chain, by managing end-to-end integration and balancing of a complete propulsion system. We have broken out of the traditional component supplier tier.

We have proven that Azad can act as a primary technology integration partner for any of the global OEMs or defense needs of the country. Second, the moats got deeper.

Azad was placed within a highly exclusive tier of global manufacturers capable of executing complete defense assemblies. The regulatory, qualification, and technical barriers to entry here are immense, and they protect our business from standard competitive pressures.

Third thing that changed was our addressable market expanded. This successful execution opens long-cycle monetization opportunities across domestic defense programs and international aerospace supply chains as well.

In effect, an entirely new structural growth engine for Azad happened on that day. Now let me connect that to what we build.

Our physical expansion at Tunki Bollaram Industrial Park is governed by a strict, risk-mitigated asset model. We do not build speculative capacity; we build dedicated customer-aligned infrastructure.

This quarter, our new 7,600-square-meter facility for Baker Hughes commenced operations, following the same deployment model we have proven with each of our other customers, namely Mitsubishi, GE Power, and Siemens Energy. Why does this model matter so much to us?

Because once a global marquee OEM integrates a dedicated, qualified facility into their primary supply chain, shifting that business carries a huge switching cost. This is what operational stickiness means in our industry, and this is what gives us exceptional multiyear revenue and volume visibility.

We are pacing this expansion with discipline. Civil construction for the remaining units at the new plant, Azad Centre of Excellence, is on track to wrap by the end of this financial year.

Machine installations are being executed in modular, back-to-back phases aligned strictly with the roadmap of our customers. You also see the strategy coming live in the numbers that we delivered this quarter.

On a consolidated basis, our revenue from operations grew by 25.9% year-on-year to about 172.6 crores, driven by steady delivery schedules and strong operational execution across all our facilities. Aerospace and defense also registered one of the highest growth acceleration, up approximately about 38.4% year-on-year, reflecting our increased share of wallet with some global aviation majors and initial tailwinds from our advanced propulsion and defense system deliveries.

Our energy and oil and gas vertical also grew by 21.6%, driven by healthy demand across gas turbine components and operational launch of a new customer-dedicated production lines. Acceleration where we are investing, resilience where we are established—this is what we are shaping.

Let me close by a section with a long view, because Azad's operating engine is designed to compound value over long cycles. By scaling multiple customer-dedicated plants within a single centralized geography, we are capturing significant operational synergies.

This structure lets us expand operating leverage rapidly. We have built an infrastructure that is incredibly difficult to replicate.

Our technological moats across sectors are widening and getting deeper. Our customer relationships are structurally locked in, and our execution framework is fully geared to deliver steady, high-margin growth for years and to stay firm on the guidance that we've communicated in the long term.

With that, I'd like to end our speech, and we would be happy to take questions from everybody. Thank you.

Good morning, sir, and thank you for the opportunity. Very congratulations on your turbojet engine.

Sir, my question related to the turbojet engines only. How's the roadmap now once you have delivered the first?

I believe that you need to deliver four, five different prototypes, and then it will go to testing phases, etc. Could you give us some timeline that how many years down the line or months down the line this would actually translate into the orders to us, sir?

Vikas.

Thanks, Vikash. This is Rakesh.

Finally, yes, we have delivered the need of the hour of the country. We have delivered this engine which have been currently being imported by other OEMs.

India is importing, MOD is importing this engines for the platforms, multi platforms they use. It was really indeed a very proud moment while we delivered this engine.

The GTRE especially, the DG, she herself was here to receive this engine, and it was a very, very proud moment for us for to this. On the note what we know, it's a limited what we know, as being an MOD program, they don't share much of an open things.

What they have been told us now this engine is under testing. The next phase of this is going to go on the weapon.

I think next 4 to 6 weeks is what we know. Okay.

These are just a timeline which we heard about it. We have no base for it, or we have nothing in written or something.

This is the next test will go on the testing on the weapon, which is 4 to 6 weeks away, and probably with that, the airworthiness certification will happen and is good to go for production. This is not some years' story, these are few months' story.

This is what you have told, and we have been guided to prepare for massive production on these engines.

Noted, sir. Sir, now that in newer plant location, we would have only three sheds left in terms of either sell it for a dedicated player or utilize for the other customers.

How should we look at if this engine comes in, which you would dedicate one shed to this engine or it would get fit then by the existing segment? My second part of the question largely related to for your growth beyond FY '29, you need to plan the next phase of capex now.

If you could give us some highlights that how is our planning, because market size is still pretty large, and now the domestic engine manufacturing is also getting added in your fold?

Vikash, this engine itself is a big story. The volumes what we have heard and what we have seen, this is, see, if it is a two-digit volume, definitely yes, we can manage with the existing capacity.

We have got so many buildings, shops ready for our different customers. The best part is all the capacity what we have are fungible and can manufacture these engine components also.

We don't need to really add some great capacity for a two-digit volume which is there. What we foresee, it's not two-digit volume, it's two-digit to four-digit, we don't know.

Based that, we have to do a planning. I think in next few weeks, we will know what exactly the volumes are, but we are prepared.

We are prepared, it's two-digit, three-digit, or four-digit. However, these engine, what we have predicted is definitely what we see in the coming time, but we have other commitments, we have other businesses which are very hand, and we are also having the prior to finish whatever the commitments have been given.

Now main focus is to speed up the infrastructure, which is about to finish. As I mentioned, 80% of the infrastructure is now ready.

FY '26 was our stabilization year. Q1 is where we started the productions step-by-step, building-by-building.

Q2 is what we are right now talking, all the spindles are fully running on full throttle. The expectations, as again I mentioned earlier, you see that Q2, everything will be settled down, and the production starts coming after.

Noted. On the capacity built-up roadmap?

That is all planned. If you talk about the coming years, I'll ask Vishnu to jump in this question.

What we see is major plan is from FY '29 is what we have to start sketching. Already sketched, but we have to really work on it.

I'll pass on this remaining answer to Vishnu.

Thank you, Mr. Chopdar, for this.

Vikash, because the idea for us is we build capacity basis the contracts that we have to deliver every year. Now, for us, we have been working on quite a few opportunities that are there right now at Azad, and we are evaluating what is the total need that we would need over the next 5 to 6 years, and we are doing that planning.

As for the next couple of years, Azad has deployed and built capacity to cater to the next couple of years in terms of where we want to grow in terms of revenue. However, you are absolutely right in spotting the fact that there are opportunities that we're working on.

We're doing our math internally to figure out what is the quantum of capital do we need and when do we actually need that. Once that internal discussion gets closed and that loop gets closed, I think we should be able to maybe address this in the next quarter with far more accuracy in my view.

Thank you.

Noted. Sir, if I can pitch in one last question.

Our mostly sales in export market, I presume it's a dollar-denominated. The rupee depreciation benefit is built in above EBITDA in the margins or below basically?

This is below the EBITDA margin. This is not built into the EBITDA margin.

Noted, sir. Thanks.

That's also my side, and again, very congratulations on the engine.

Thanks, Vikash.

Thank you.

Hi. Good morning, everyone, and thanks for the opportunity.

Congratulations for delivering the ETGG engine. I think it's a great achievement for the company.

The first one is actually on the MHI contract that we've got for hot section. Now we already have given in the presentation the TAM that is for the cold section.

Now hot section typically in my view should have much higher TAM. Wanted to understand if you are in discussion with some of your vendors for getting more such contracts, extending the adjacencies across.

Just wanted to get your thoughts on this. Given the fact that some of your global peers like Howmet and all have reported very significant growth.

As you said in your opening remark, the market look very, very promising. How do you see from a growth perspective that technically we are at a low base essentially?

We have just started the aerospace part. How do you see the growth curve for Azad growing?

You mentioned that S2 onwards, the growth would go to the next level. Just wanted to understand your broad thesis on that.

Amit, I'll try to recollect the first question you have put. The first question what you asked is on the stabilization of the hot section, the market.

Now, as you are aware, how critical this component is, of course, the cold section itself is so tough to come where we are, Azad is playing around with that. In the hot section, definitely other OEMs have shown super interest and asking us, "When is your facility ready?"

The best point is the facility what we are setting up for Mitsubishi is exactly a model which will be utilized for other OEMs as well. Another good news I'll tell you, it's not just for the land-based, it's not just for the energy, the same facility will cater to hot section for the aviation engines as well.

The first point is to establish this, which is around 7 7 to 8 months away from now. Then we do the qualification.

While we do the qualification, we will invite the other OEMs, and to be honest, we don't need to invite, they're already here. That answers the thing.

Any other questions you have on this, Amit?

No. That's fine.

Just wanted to get the broad timeline. That's fine.

Yeah. Yeah.

The B part was actually the growth that we are seeing in this market. You mentioned in your prepared remarks that both the vectors are seeing excellent tailwinds.

Now as I mentioned that some of the peers, Howmet and all, despite being a much higher base, they have reported 37.7% EBITDA margin, 50% EBITDA growth. What is the growth trajectory for Azad we see, and are there any constraints that you see at your end to grow by that number?

No.

Actually, it's a very valid and very nice question, Amit. People who know about this subject, they will also obviously know this is not a million story, this is all a billion story.

We also know, as you could name only two or three in our name, there are only two or three players in the world who have cracked this. Azad will be the next to crack this.

Once this is cracked, the league itself will change. If you talk about engines, that is a different league.

Now we talk about this hot sections, this itself is in a big league. Definitely, the market is massive, and there is a long queue of the other products what are required in this field, and Azad is preparing for that.

It's a very, very good situation now.

Great, sir. That's very reassuring.

Now

on the margins, you can imagine these high-cost countries like US and Europe are making that healthy EBITDA margins. Definitely what would Azad make, it's a good thing to understand.

Yes. No,

great. That's very assuring.

The second question is essentially on the working capital side. Now in Q1 FY '27, we saw that there was a bit of increase in finance cost, possibly due to the working capital needs.

Now since we are in expansion mode, so, I'm not asking for a timeline, but just wanted to understand that this working capital in terms of days, when we can expect it to plateau?

This is Ronak. From the finance cost side, if you see, I have already told FY '26 presentation, I told that finance cost will going to continue because you have a bill discounting charges which will go into the finance cost only.

There is a betterment of the cash flow, operating cash flow, not on the financial cost side. Coming to the specific question of when it get tapered, we are targeting H1 around 200 days, and by H2, we are targeting in range of 160 to 185 of days.

This is largely back on the bill discounting facility, where our current debtor days, which are around 170, 180 days, will go down to 90 days. That's how we look this entire situation to be unfold.

No,

great. Very clear.

Thanks, Ronak. Thanks for the chance, and all the best.

Thanks for the opportunity. My two questions.

First one again on the ETTG engine. The question is that as you mentioned in your opening remark that this engine required you to have done metallurgy, machining, various other processes.

I understand obviously is that Azad right now has machining, and now with the joint ventures in place, you have the surface treatment capabilities. Other capabilities, I'm assuming that those were outsourced or were done outside Azad.

Is it possible to quantify in this engine how much of the value-add was by Azad in-house and how much was done outside Azad?

Hi, Gaurav. Rakesh this side.

No, but we have done everything in-house. There's nothing that we have outsourced any of the parts or something.

Maybe some small washer or some specific requirement which Azad's capability is not available, we have gone to GTRE, and they have either done it in-house or they have got it done by their approved sources. It's not that we have gone out somewhere, except from small washers or some kind of small machining or some kind of welding operations.

That's all. All right.

Okay.

The second question was on the margin. That for last 2 years, we're consistently doing about 37, 38% EBITDA margin, which used to be about 30 to 35% before, consistently.

Now, you continue to guide your margins around 35% level. What I'm trying to understand is that you are doing 37, 38% margin when you are yet to utilize the new facility.

Why is the conservative guidance on the margin that when there will be a little bit of operating leverage which should come by from the new facilities there?

Gaurav, as you can see, we are consistent doing 35 plus. The guidance what we are always on it, and for the calculation purpose, it's always nice to use a 32 to 35 window.

Of course, you can see that we have been delivering precisely going above 35. For calculation purpose and for the guidance purpose, I think 32, 35 is a good number which we are holding for since so long.

Right. Or

is it possible to kind of explain what has led to this margin range shifting from 35 to 37, 38% in last 1 and 1/2 years? Is there any process capability improvement in what you're doing that is reflected in these margins?

It's the skill set what we are opting on the shop floor. It's continuous improvement.

It's not only last 3 years, we've been seeing since inception. I remember the days we were operating at 18, 19% EBITDA, and the same product line, we're now operating at this EBITDA level.

Definitely there's some magic happening on the floor.

You mean the process engineering

or It's not just process, there are many factors. If at all, I would love to take you on the floor and I would like to demonstrate what exactly lies between these margins and what all is lying from 18 to 35, 36.

Why not, we can see further also. We are trying to find where we find, we'll dig it out.

Understood. Okay.

That is from my side, and all the best.

Thanks, Gaurav.

Good morning, sir. Congratulations on the turbojet engine.

Sir, my first question is that since you'll be looking at double-digit growth in these kind of projects moving ahead, as you just mentioned, what are the margins that we are looking at for similar projects? Second question is that we have signed a deal with Rolls-Royce for a civil aircraft engine.

What is the time period for that, if you could just tell me that?

Hello. Could you repeat the question number one, please?

Yeah. Sir, I'm saying that congratulations on the turbojet engine.

Since you'll be looking at double-digit growth in similar kind of projects moving forward, what is the margin that we are looking at for these kind of projects? Okay.

Thank you so much. We have just made the first engine.

Okay? We can never come to a costing out on the first engine as it takes a lot of time to stabilize in the production.

We are being producing the first 20 engines. It could be appropriate for me to answer this question once we have done at least 5, 6 engines in a row, and then we can come to a level what we hold and how do we feel on this.

If you could just tell me what would be the timeline for these four, five engines?

I think it's just not far away. 8 to 12 weeks, you can say 3 to 4 months.

It is a continuous process which we are going to see. Maybe by next call when we see or if you have free to, you're most welcome to visit us and we can share more details with you here.

Sir. Okay.

And Sir, Rolls-Royce deal, the time for that?

I think very soon. Within this quarter, I think we should be delivering the first batch of the qualification parts.

It's almost finished. The first delivery is quite nearby.

Sir.

Thank you, and all the best.

Thank you.

Hi. Good morning, team.

Congratulations on a lot of positive developments. My first question is on our asset base and the revenue potential from that asset base.

Now in the last 1 and 1/2-odd years, we have undertaken a big capex plan and included the capital WIP. I believe we ended the year with maybe 1,200, 1,300-odd crore rupees of net block, maybe around 1,500-odd crore rupees of gross block.

Just wanted to understand what will be the peak revenue generation potential from this capacity, at what utilization we may be operating in some of the earlier sheds that we have made operational, and how would you anticipate it to be ramping up?

Hi, Aditya. Vishnu here.

Thank you for your question. Aditya, I think I will take you back to our conversation in the previous calls.

The entire Tunki Bollaram plant that we are building is built with a mindset of building dedicated sites for all of our customers. We are building eight plants there, and each of these plants would be dedicated to a certain customer, right?

What is going to happen there is each of these plants, overall, without getting into specifics at a customer level, I'd like to say that each of these plants are poised to generate, at full utilization and full capacity, from 150 to, let's say, about 180-odd crores, right? That would give you a good sense of roughly about 1,200 crores out of the newer plant revenue, right?

Then, as and when we keep growing based on the contracts that we have, we will keep building capacity as well. Our idea is to finish this plant from a civil construction perspective by this financial year, and then, while the plants are in our control, we're constantly going to focus on improving the utilization and capacity output on that, right?

We are fully geared up for the contracts that we're supposed to be delivering over the next 2 years in terms of capacity or in terms of infrastructure, we don't have any risk from there.

Sure. That makes sense, Vishnu.

Vishnu, we also spoke about acceleration in revenue momentum from second half. Is it because of maybe some qualifications that are pending for some of these new sheds, and as they happen, from second half onwards, we would anticipate a much stronger revenue momentum?

Yeah. Hi, Aditya.

Rakesh this side. That's true.

We knew that this is a plant. Okay?

Maybe last two or three calls if you can recollect what I mentioned that FY '26 Q4, we could put up these buildings, got the machines inside, done the foundations, do the Delta qualifications. Then Q1 was something we switched on lot of machines, production started very slowly, the qualifications were done.

Now as we speak in Q2, those machines are now on full throttle production ongoing right now as we speak. Okay?

To reflect these numbers, you could see reflection from Q3 onwards their says what we do. This is exactly consistently we have been guiding the market last three, four quarters what exactly is the status.

That's why what I mean is 80% done is these plants where the machines have been deployed, foundation done, qualification done. This doesn't happen in 1 week, 10 days, you know that very well, right?

It takes a lot of time, different customers travel plans, each and every parts being reproduced, requalified. That all is done now.

It's all 80% is done now. The production is switched on.

That's the whole reason we say that we see a major breakthrough coming next, too.

Understood. Instead of just looking at this 1 year, let's say we look at a slightly longer-term picture, a 3-year period, then where do you see the company's revenue number kind of settling in?

Do you think that instead of this 25%, we should be looking for a much stronger growth, maybe closer to 35-odd percent on an annual basis, as we will be having capacities, we already have certifications, we already have some decent-sized orders. It's just about getting some of the formalities done and we can scale up business at a much faster pace?

Of course, Aditya. See, right now, the reason we are guiding 25% plus because we know what situation we are in.

As we shift to the next level, we'll change this guidance.

Perfect.

Okay. In a better way.

Understood, thanks. My second question is given that a lot of our contracts will be maybe dollar-denominated, do we get a big benefit out of rupee depreciation?

Is it a case that this year maybe revenues get a lift of maybe 7, 8% purely on account of how forex numbers have moved? To that extent, even if volume growth is somewhat similar to what we are speaking about, in revenue terms, we may end up doing lot better.

See, I would say one thing on this, Aditya. It can be.

It is not a significant number. It can be some few percentages which, in large growth of this, should not be really taken as an beneficiary thing because we also import a lot of things, right?

We also import a lot of things. It is vice versa what we see is not a major benefit we see or a major problem to be see.

We should consider this is a normal thing. Meaning you can say it's a natural hedging.

Sure. No, I'm saying from the perspective that our material cost is not very high.

To that extent, we don't get significantly impacted by rupee depreciation on the cost side, but we may have a disproportionate benefit on the revenue side. Which is why I was just trying to understand that can it really boost the revenue growth as well?

Can it be an additional lever from the perspective of this year, given how sharply rupee has depreciated in the last couple of months?

Aditya, Vishnu here. I think, see, we don't look at that largely when we are looking at business growth, etc., right?

Our revenue growth is a function of our capacities coming up online, because we know this could be a factor for a particular quarter or for a particular year, so that is not really something that we do. You're right to mention that rupee depreciation could probably help us to an extent of 5, 6%.

That's true, but not that an important factor for us while we are planning our business. We don't look at it from that lever at all.

Sure. Understood.

Thank you so much, team. Wish you all the best.

Thanks, bye.

Thanks, sir.

Thanks for the opportunity, and lots of congratulations to Rakesh sir and team for achieving the milestones. Sir, my first question is regard to your capex.

Say, over last 2 years, we have done a capex of around 900-odd crores. Going forward, for say '27, '28, '29, how would be our capex trend?

Hi, Kamleshji.

Sorry, I was on mute. Just to quickly address this.

One is our capex deployment in the current plant will be to bring the balance plants up and to ramp up the existing that have been operational to add further capacity to it, right? Over the next couple of years, whatever revenue or production output that we need, we are deploying capital in a phased manner to address that.

From a revenue perspective, we are tracking right to the contracts that we have to deliver over the next year, right? Coming to the second question, yes, you're right to point out that there could be a larger capex requirement, given that Azad is surrounded with a lot of opportunities built.

This is not needed for the next couple of years for whatever guidance we've given. We need them to collect these opportunities in bag and start working on them, so that this could fuel the next level of growth from Azad's perspective.

There is a lot of excitement on the opportunities that we're working on right now, and I think maybe in a quarter or so, we should be able to give a more comprehensive perspective that should probably address all of these things at a granular level.

Great. Appreciate that.

Secondly, like you pointed out that you will guide in next quarter, but can we be looking at say investment, castings, and other segment, because that also is booming in a big way, and there also the margins are far superior? Can that adjacency be looked at in terms of investment and adding the further growth?

Kamlesh, sorry, I have to reiterate this, but it will be difficult to comment on what opportunities we will be going forward next. Why don't we have a meeting in person and show you the kind of opportunities that we're working on right now?

To put our pen down on a particular opportunity, talk about it would be slightly difficult on this call. However, I can only assure you that there is a lot of work across sectors, and not just one area that you mentioned, I think there are quite a few areas where there are opportunities that are getting unlocked, and given the bandwidth that we have, given the focus that we have, we will take the right calls, and we will be able to update you, maybe in the coming call.

If there is a meeting that happens in Azad, we'll also share the developments that are coming forward in the next few quarters.

Okay. Lastly, say, it may be particular to this particular quarter only, but if you see the global peers, the way they have grown, say 25 25, 26%, and that also in dollar terms.

Were there some hiccups in terms of stabilization of new lines? Because 23, 24% growth looks to be little less, given the fact that rupee depreciation has also benefited in a lot.

Because if you see in the dollar terms

Kamlesh, I think we're not comparing the right things, right? These companies have been building capacities or have built capacities several decades ahead of the curve, right?

The scale at that which they're operating, obviously, it may be different than the scale that we are operating at. We are in the process of starting to run our spindles, right?

We are building capacity to address that. For us, like we also spoke with Mr.

Chopdar, when he was talking about the quarter, that this is the stabilization that we achieved in the last year. Foundation is being set.

Now we are at the right point to gain and access to all of these growth drivers that are there in the industry and the tailwinds that are there, but it will happen in the coming few quarters, right? I don't see, there are no hiccups.

Just because a larger player in this space is growing at a certain rate does not mean we have hiccups, right? They're doing $2 billion plus a quarter, right?

How much are we looking at? We've done 600 crores in the full financial year.

I think it's not right to compare that, because capacities are online there, they have qualifications, they've been around for decades. I would say no hiccups, again, summarizing it, but the growth is going to unlock basis stabilization that we're doing.

The foundation is laid right now, and you will see this in the coming quarters.

Great, sir. Best of luck for future.

Thank you.

Thank you.

Thank you for the opportunity, sir. I think you guys are doing a great job, not just for shareholders, I think even for the country, right?

I think we're very fortunate, India is very fortunate to have a company like you. My question, because to build a high precision engineering company, which you guys are aspiring to do, with a very high moat, requires a very special kind of talent.

My question is on the talent. I saw that your year-on-year has also gone up by 42%, right, the line item of the head count.

Can you talk a bit about the talent pool which you are hiring to create such moat and such high precision engineering company which can compete with the best of the world?

Thank you, Prateek, for your kind words, and we really appreciate whatever you've said. Now as you've rightly pointed out, I think this is a sector that needs extremely high engineering skills, etc.

If you look back at how Azad was built, it starts right from our founder, right? We believe that our founder was a high school dropout and he's built the most advanced precision manufacturing company that India has today, right?

That culture is there everywhere in our business, from the bottom to the top, right? You would see that we have several training programs in the organization that bring in normal diploma operators.

We put them through 60 to 90 days of training. He has trained people that are now training people, right?

That culture is a continuous program. We've now built an engine of hiring roughly about 150 to 200 people every month, putting them into a 90-days training program.

This is a continuous cycle. We think India has the talent, right?

I think India just needs the right opportunity. We are providing a platform to anybody who has engineering skills, and then we're upgrading them to suit our sector.

When people are deployed in a sector, they shadow the senior resources, and then when they're ready, they get deployed on the real work. That's why you would see that we have more people than what we actually require for our revenue, because we are also trying to create a bench strength of people that can be quickly deployed on the floor.

Got it, sir. Thank you, sir.

Thank you for the opportunity, and again, all the very best to you in future, sir.

Thank you, team. I have a couple of questions on the P&L side.

While I see this raw material cost, last year, it was around 12% raw material cost to sales, and now it is 5%. Can you help me understand what has attributed to this, and is it a sustainable kind of development?

Similarly, the employee cost has increased from 29 crore to around 42 crore. Can you also explain what has led to such increase?

Is the case with other expenses.

Sure. I will take you through the two line items what you have asked me.

First coming to the consumption part. Consumption part has two things: one is the raw material cost and other is the process content of the WIP, what is there in the inventory.

Raw material, what we are buying till last year, are more or less imported. As I told you over previous call also, we have tried to get two mills qualified in India, Sunflag and Mishra Dhatu Nigam, for few of the critical raw material grades, where we are getting the benefit of the cost for one one last year.

We have helped them to get qualified with the clients like GE and the Siemens, not for India, but for the global supply chain picture. There we are getting the benefit of the price benefit and also transportation cost benefit, since these are the local supplies, which have a very less transportation cost compared to a global transportation cost when we import these materials from overseas, which is around 4 to 5% type of secrets.

That is one of the lever. The other lever is also the process content, because historically we are chasing a lower sales, and now the quarter we have closed with 170 crore, but we are chasing a larger quarter in coming months, as Mr.

Chairman has and Mr. Vishnu has also mentioned in their question-and-answer speech.

That two put together has implemented this particular thing from that particular perspective, and we are quite confident this margin can be sustainable over coming quarters and so. Coming to your second question of employee, as Vishnu mentioned in the previous questions, that we don't require that much of manpower to cater to the sales what we are doing.

This is for the future sales what we are targeting in quarter three, quarter four. Our WIP cycles are around 90 to 120 days, and we have to keep the inventories into a place to cater to the quarter three and quarter four sales, where all the spindles are running for quarter three and quarter four.

That's why you see a employee cost on the face elevated, which will be normalized by coming in quarter three and four, and the absorption will go down over a period of time. Hope you clear on this.

What about other expenses? What has lead to the increase in other expenses?

Other expenses, if you see as a percentage of sales, is more or less stable. I don't think it has increased.

The major cost that include are the power cost, tool cost, stores, maintenance, and the job work which we do, the outsourcing, are the four, five major having to that. You can go through the schedule of FY '26 once it published through the annual report, and if you have any further questions from that, more than happy to discuss the individual line items.

Okay.

Now, the other question which is more of a strategic in nature, from your opening remarks and also from the various question-answers, one gets the impression that everything seems to be good and company is moving into a very, very positive direction. What are the challenges that makes you worried?

Okay. Thank you.

This is Vishnu here. I think challenges are also the same.

While we are looking at doing this, this is from an execution perspective, this is a complex thing, right? Because if you imagine what we are attempting to achieve as an organization, our team put together, we are building factories at the same time, ramping up capacities in some, hiring people, training people, growing and catering to all contracts.

This is a really large execution thing, and for us, we are trying to do everything right. From our perspective, we have all the opportunities.

I think it's just about stitching all of these things together. We have the right customers in the sector.

We cannot have better customers. There are all the customers that are noteworthy in the sector are with us.

We have the best long-term contracts which give us visibility over 5, 7, 8 years. We have capital.

We have capability. We have consistently proven that we can deliver over time.

I think it's all there. It's just about achieving each of these things.

All of these things have to work together for us to achieve all the milestones that we've set out. That in my view is, I wouldn't see it's a challenge, but it's something that we are all aggressively focusing on.

This is a thing that every organization have to go through, right, when they're scaling up. We're attempting to do that in our own way.

Yeah. Understood.

The last question from my side is, what is your hedging policy to hedge your export receivables?

Sorry, I didn't hear your question correctly. Can you repeat that, please?

Yeah.

Sure. My question is that since you have export, what is your hedging policy to hedge your export receivables?

Yeah.

To do that, we have some foreign currency loan, which will make it a natural hedge. As I mentioned that we are going for bill discounting line, the moment we book the sales, we get the bill discounted in the future.

That will help us to take the natural hedge deduction going forward by quarter three and quarter four.

Okay. That covers your entire export?

You have this natural hedge to cover your entire export?

Entirely, it will be hedged by quarter four type of time, once we have all the bill discounting facilities executed in place. Okay.

Thank you, that's all from my side.

Hello. Yeah.

We'd like to thank everyone on behalf of Azad Engineering, our Chairman, our Board of Directors, and all of us in the team. We'd like to thank everyone for joining us today and for your continued trust.

We're excited about the pace that Azad Engineering is in. The quarter you've seen and the milestone on 22nd of July tells you where we are headed.

From this point, we're only looking upwards and onwards. Thank you again.

We look forward to speaking with you in the next quarter.