Good evening, everyone. We welcome you all for the Q3 FY26 and nine months FY26 earnings conference call of Elecon Engineering Company Limited.

Today, we have with us the management represented by Mr. Dipak Dalwadi, Head of Gear Division; Mr.

Kaushik Patel, Head of Material Handling Equipment Division; and Mr. Narasimhan Raghunathan, Chief Financial Officer, along with his team to give us a earnings outlook.

Over to you, sir, to give us outlook on the quarter three conference call. Over to you.

Yeah. Thank you, Harshit.

Good evening, everyone, and a warm welcome to Elecon Engineering's Q3 and nine months FY26 earnings conference call. Joining me today are Mr.

Dipak Dalwadi, Head, Gear Division; Mr. Kaushik Patel, Head, MHE Division.

The earnings press release and the investor presentation have been filed with the stock exchanges and are also available on our website. I trust you have had the opportunity to review them.

I will begin with a brief overview of our business performance, followed by a detailed discussion on the financial results. Elecon Engineering today stands among Asia's leading manufacturers of industrial gear solutions and material handling equipment, built on decades of engineering excellence, deep domain expertise, and trusted customer relationships.

Our Material Handling Equipment Division is emerging as a powerful growth engine for the company. Backed by over 75 years of experience, the division has unique capabilities to design and manufacture large, complex, and high-capacity equipments, such as wagon tipplers, stacker reclaimers, crushers, and specialized conveyor systems.

These capabilities are possessed by very few players in India, creating a strong competitive moat for Elecon. Serving sectors such as power, steel, cement, ports, mining, and fertilizers, the MHE business continues to deliver customized, high-value solutions that enhance customer efficiency and reliability.

In our Gear Division, Elecon maintains a leadership position in India's organized industrial gear market. We offer one of the widest and most comprehensive gear portfolios, ranging from heavy-duty gearboxes to precision-engineered components, catering to industries such as steel, cement, sugar, power, and defense.

Continuous investments in research and development and infrastructure ensure that innovation, customization, and lifecycle support remain central to our value proposition. With a presence across nearly 95 countries, a strong global distribution network, and longstanding relationships with customers worldwide, Elecon is well positioned to benefit from the ongoing capital expenditure cycle in India and international markets.

With this, I now hand over the call to our Gear Division Head, Mr. Dipak Dalwadi, who will walk you through the performance of the Gear Division.

Yeah. Thank you, Mr.

Narasimhan. The Gear Division, which contributed approximately 78% of consolidated revenue in Q3, delivered a largely stable performance with revenue growth of 1.3% year-on-year.

Both domestic and overseas businesses demonstrated resilience during the quarter. The muted growth was largely due to timing-related factors, including delays in order inflows during the first half of the year, followed by execution and dispatch deferments arising from customer-driven dispatch schedules.

Importantly, the underlying demand environment remains healthy. We are witnessing strong inquiry levels and improving order inflows across domestic and international markets.

Market sentiment is gradually improving, supported by ongoing investments in power, steel, cement, and a visible pickup in sugar segment. With this improving visibility, the Gear Division is well-positioned to return to a stronger growth trajectory.

To conclude the division performance, I now hand over the call to Mr. Kaushik Patel, Head of MHE Division.

Thank you, Dipak. The MHE Division continued its strong growth momentum, delivering 16% year-on-year revenue growth during the quarter.

This performance was driven by robust demand from power, cement, mining, and port sector, along with steady execution. We remain confident that the MHE business will continue to perform well in Q4 FY26 and beyond, supported by a healthy order book, a strong project pipeline, and deep customer engagement.

With this, I now hand over the call back to Mr. Narasimhan to provide further overview on Elecon's financial performance.

Thank you. I will now be walking you through the in-depth financial performance for Q3 and nine months FY26.

Financial performance, Q3 FY26: We are pleased to report a resilient and encouraging performance in Q3 FY26, despite certain short-term challenges. For the quarter ended December 2025, our consolidated revenue from operations stood at ₹552 crores, compared to ₹529 crores in Q3 FY25, reflecting a year-on-year growth of 4.3%.

The gear business reported a largely flat performance during the quarter, primarily impacted by timing-related delays in order receipt and execution, as well as customer-driven dispatch deferments. However, the underlying demand environment remains healthy.

We witnessed robust order inflows across both domestic and international markets, supported by sustained inquiry levels, which gives us confidence in future order inflows. The domestic market contributed 76% of the consolidated revenue, while overseas markets accounted for the remaining 24%.

The consolidated order intake during Q3 FY26 stood at ₹701 crores, representing a 7% year-on-year growth. The order inflow, combined with a healthy inquiry pipeline, keeps us optimistic about growth prospects going forward.

Consolidated EBITDA for the quarter was ₹109 crores, compared to ₹143 crores in Q3 FY25, translating into an EBITDA margin of 19.8%. Margins were temporarily impacted due to flat revenue performance, higher employee cost, and a change in product mix.

We expect margins to normalize as volumes pick up, operating leverage plays out, and the order book converts more rapidly into revenue. Profit after tax for the quarter stood at ₹72 crores, representing a PAT margin of 13%.

Performance for nine months ended December 2025: For the nine months ended December 2025, after adjusting for the one-time arbitration income of ₹25 crores recognized in Q1 FY26 in the MHE Division, adjusted consolidated revenue stood at ₹1,595 crores, compared to ₹1,429 crores in nine months FY25. Adjusted EBITDA for the period was ₹340 crores, with an EBITDA margin of 21.3%.

In addition to the ₹25 crores recognized in revenue in Q1 FY26, an additional ₹10 crores was recorded under other income as part of arbitration settlement. Furthermore, ₹80 crores was recognized as exceptional income below PBT, representing unrealized mark-to-market gains from investment reclassification.

As a result, profit after tax for nine months FY26, including these one-time items, stood at ₹335 crores. Segment-wise performance, Gear Division: The Gear Division contributed 78% of total revenue in Q3 FY26.

Revenue for the quarter stood at ₹429 crores, compared to ₹423 crores in Q3 FY25, reflecting a flat year-on-year performance due to the aforementioned reasons. We expect a faster execution of orders to convert into revenue in Q4, which should support improved performance going forward.

EBIT for the Gear Division stood at ₹78 crores in Q3 FY26, compared to ₹118 crores in Q3 FY25. The EBIT margin declined to 18.2%, compared to 27.8% in the same quarter last year, primarily due to higher employee cost and product mix.

As revenues scale up, we are confident that margins will recover with operating leverage coming into play. Order intake for the quarter was ₹464 crores, and the open order book stood at ₹811 crores as of 31st December 2025, providing strong revenue visibility for the coming quarters.

Material Handling Equipment Division: The MHE Division continued its strong growth momentum during Q3 FY26. Quarterly revenue stood at ₹123 crores, compared to ₹105 crores in Q3 FY25, registering a 16% year-on-year growth.

Growth was driven by strong demand in the product supply and aftermarket segments, particularly from the power, cement, fertilizer, and port sectors. EBIT for the division stood at ₹25 crores, compared to ₹33 crores in Q3 FY25.

EBIT margins during the quarter were impacted by product mix. Order intake during the quarter was ₹237 crores, compared to ₹185 crores in Q3 FY25.

The open order book stood at ₹561 crores as of 31st December 2025, reflecting strong growth prospects ahead. While there has been short-term execution delays in the gear business, the fundamentals of both the divisions remain strong.

The temporary mismatch between order intake and execution has impacted near-term revenue recognition. However, our solid order book and execution pipeline provide clear visibility for growth in the coming quarters.

On the balance sheet front, we continue to maintain a robust financial position, with a strong net cash balance of approximately ₹600 crores, providing significant flexibility to growth opportunities, execute our capex plans, and navigate macroeconomic uncertainties. Our capex outlay for FY26 to 2028 is estimated at ₹400 crores, aligned with our long-term strategic priorities.

Though our financial nine months performance remains strong and demonstrates the underlying strength of the business, given the near-term softness, we believe it is prudent to revise our outlook for FY26. On a consolidated basis, FY26 revenue may be lower by up to approximately 5%, and adjusted EBITDA margins may be lower by up to approximately 2%, compared to our earlier guidance.

That said, we remain confident about an improvement beyond the near term, supported by a healthy order book, a robust inquiry pipeline, and improving execution momentum. With that, I would now like to open the floor for questions.

Thank you.

Hi. Thank you for the opportunity.

My first question would be, sir, we have seen order intake was the slowest in the last eight quarters. How are you seeing this, and what's your view going forward on that?

Hello. Yeah.

Can you hear me? Yeah.

See, now in near future, means coming quarters, there is a good expecting business in the power sector. There is a substantial capacity increase going on this segment.

We are hoping good orders from the power sectors. Then even steel sectors are also now growing, and overall trend for the steel sector is also showing in the growth.

We are also hoping good orders from the steel segments. As the sugarcane crop is very well in the last quarter, we are also hoping the good business in the sugar industry also.

Sir, can you throw some light on the inquiries which you are talking about? What I want to understand is, when you say we have a good inquiries and we have a good bid pipeline, can you throw some light on how much is the bid pipeline we have, and how much is going to converted into the order book, so that we get to know that how much percentage it is going to accrue on you?

Because from the last three, four quarters, we are mentioning that, but the order intake and the order flow has been quite a lower side on that front. I understand the business dynamics, but just wanted to have your views on that.

See, actually now the power investment has started and they have releasing the orders. We also received very good orders from the say L&T, MHI, and QLR and all.

We are getting the orders from the power industry. At the later stage, they want their requirements, so that's why to be executed in the next financial year.

Also there are many inquiries floating from the power industries, and they are in pipeline. We are hoping the all inquiries to be converted into the orders.

We have a very full confidence for achieving the good inquiries, and all whatever in the pipeline it will be converted into orders, which will be useful in the next coming quarters.

Sir, my another question: we are seeing comparatively better demand for the domestic market for quite some time, while when we communicate in our investor presentation, we say that export revenues should be our 50% going forward by 2030. How do you see this divergence?

Because how do you see export market will pick up? What is the growth strategy for export?

Any inorganic acquisition we are evaluating on that space?

Yeah. At the moment, we're not looking at any inorganic acquisitions.

At the same time, how we look at the export business as such, we have explained in many investors' conference call earlier that we are putting lot of efforts, lot of activities have been ongoing for past three, four years. We also lined up OEMs, and we have met the revenue targets of what we were looking for.

These are the OEMs, you are aware that they're going to give us a sustained business in forthcoming years. Overall, the long-term export growth or prospects, what we are looking at, and considering how we are at present the market share is and there is a huge potential, all those aspects and internal what are the efforts which you're doing, all are in place.

At the same time, we are aware that certain geopolitical situations and certain regions' economic growth and other things, those are all the external factors which is presently impacting us. Having said that, all the activities which we have been doing for four to five years now, and all the orders which you executed, and how the customers are looking at presently, based on the experiences which they had with us for three, four years, we are confident that in coming years we will be able to reach our milestone of 50% revenue coming from the exports.

Sir, can you also throw some growth guidance? I'm not talking about a year perspective from that point of view.

I'm talking about the longer three-year time frame. What the growth we are targeting?

Last time we say that, no, it's 20% growth guidance. We have lowered down.

That's okay, that's the business part of that. If I see three-year time frame, what are the growth prospects we are looking for?

It's around 20% to 25% what we are looking at as a overseas.

Oakes. Thank you.

We'll get back in line. Thank you.

Hi, sir. Am I audible?

Yes.

Yes.

Good evening, sir, and thanks for the opportunity. Sir, in continuation to the earlier participant only, over the last one and a half year or two years, we are continuously speaking or putting some emphasis on the export side, while we also received a few orders that were announced earlier.

These have not been yet translated into material in the larger volume. As a result, if we benchmark export against FY23 base, the business has delivered only a marginal annual growth of around 4% to 5% despite a consistent effort and focus that we are putting into.

At the same time, if we look at the domestic market, India appears to be in a strong capex cycle, particularly across sectors that we serve to. We have not heard from management a clear articulation around the incremental market share gains in India and maybe targeting at 25%, 30% kind of growth at least in the domestic market while exports are muted.

Even in the Indian market, we are currently growing at 15% to 20% kind of number. I agree that margins can be a thing you as a management try to protect.

Sir, anyways, if we look at last two quarters, margins have also started falling. I just wanted to understand from you why we are not aggressive on the domestic side?

Number two, despite the cautious take that we are taking on the domestic market, why are we facing a fall in the margins? Is it because even within the existing market share that we are speaking about continuously around 40%, we have started facing competitive pressure,

sir? I'll address it.

While we continue to focus on our export market, we have been very strong in the domestic market, as you know that nearly 40% of the organized market share is what we hold. That still continues.

We continue to be leading the market in the Indian scenario. While we may not go for aggressive market increase from now on, which comes with an additional competitive scenario and compromising on the margins, etc.

At the same time, we continuously look at how we could enhance the product, upgrade our products, reduce our costs, all those aspects, and how to retain the current market, like you see that what are the incremental business segments like power sector and things like that, which is happening. We are able to continuously improve our revenue on account of that.

Therefore, our domestic approach continues to remain robust. We got a separate team who are continuously bagging those orders and approaching the market.

All those efforts are always there. In terms of margins, we see more that it is a scenario which is playing out due to the lower turnover in the first three quarters.

Once we see in the fourth quarter, while of course turnover from a point of view as what we have given the guidance, there has been a little bit of lower outlook in the current year. In terms of margins, overall margins, as how we see, it gets normalized when we approach the Q4.

We remain on the more or less same this thing. Of course, considering the market in the current year, our marketing team generally uses its flexibility to increase and decrease the price at which we sell the products.

At the same time, overall our approach towards margins remains the same in the domestic market.

For now, you are saying going ahead also, we will be focusing on maintaining the market share instead of focusing on increasing the market share in domestic market. Is that understanding correct?

Yes, your understanding is correct. We would reasonably try to increase the market share, but if it comes with an very aggressive competitive scenario, then we would like to look at maintaining the margins.

In that case, how we will be able to grow? For example...

Garvit, I would request you to join back the queue. No, no, it's just a follow-up, actually.

In this particular case, I'm not understanding. At the same time we are speaking about 20% to 25% growth, right?

We are aware geopolitical tensions are there, export is bit on toss right now for us. If we are not looking to grow in Indian market maybe at more than 25%, then how we will be able to achieve that guided number, sir?

That I'm not able to understand.

Yeah. See, the growth, what the export growth what we had indicated to be around 20% to 25% is how we see it.

At the same time, we will have to factor in the geopolitical situations which are beyond our control. At the same time, our efforts definitely would be there to reach our milestones, subject to these geopolitical considerations.

At the same time, our approach towards export market, in terms of adding new clients, identifying growth opportunities in different markets, approaching different markets with a different approaches, connecting with the OEMs, consultants, and distributors in different regions, all those efforts, and expanding our network of branches, and wherever required if there is assembly centers, sort of thing, we let us establish, we are keenly looking at. Therefore, all the efforts are on to improve that to reach that milestone of export projections.

Right. Thanks for opportunity, sir.

My question is to Kaushik. Basically looking at the power sector opportunity which is means to be materializing, thermal power mainly, just wanted to understand your thoughts for next two, three years.

How you see MHE Division's opportunity? How prepared we are, because I think some year for some years we we were not investing much in MHE Division.

In terms of team, technical capability, our investment in machines, little bit detail thought process on MHE's preparedness to capture the growth and possibility of growth will be very helpful.

Okay. I will give you the updates on the market.

Yes, presently, as you mentioned, there is a good opportunity for us as MHE to grow and to cater the business in the power sector, because there are many projects as they have already been announced by the various end users like NTPC and other state government bodies. I think few orders has been finalized, and out of it we got the good business in current year.

In couple of years, yes, there is a good visibility for us to grow further. Apart from the power, of course other sector also helping us to grow, because most of the end user has already announced their capex investment, and of course some capital investment also there to upgrade their existing equipment.

We are hoping good growth in next two, three years.

Regarding Kaushik, our preparedness? How much...

Yes,

now coming to our capability, we have been in this business for more than 75 years. We have our own manufacturing setup over here.

We have a dedicated design team for our equipment. In fact, we have upgraded our equipments considering the present market requirement and customer needs.

As far as manufacturing is concerned, if you see our most of the products required the fabrication activity. Although we have our internal setup for the fabrication, but for fabrication, we have been now outsourcing to get the things done.

Only to get it machining, we have an internal process. Apart from the upgrading our existing machines, we have a capex plan near to 35 to ₹40 crore.

Out of it, few machines we are expecting to get it in next quarter, next quarter means Q1 of next financial year. We are also investing in our machinery, as well as expanding our capacity to meet the near future opportunity or grab the opportunity in that.

I hope... Kaushik-bhai.

Yeah. My second question is, sir, on the competition, compared to, say, previous cycle of 2000-2007.

How you see the competition, competitor, pricing, and what ability we have added in terms of maybe product or are we again planning or thinking about entering some maybe EPC or something? What's your thought process for future growth?

That my last question.

Okay. Let me make it clear that we have adopted the strategy that we should focus on equipment supply and providing the after-sales service, and that is continued over the next two years.

Means we don't have a thought to enter into EPC business. Looking to the present market needs, I think for us we have ample opportunity to put our equipment in the new projects which is being announced by the end user.

Reason is only that many end user has changed their strategy for floating the tenders. Those strategies are favorable to MHE, in fact, favorable to Elecon to supply the equipment in the market or for particular projects.

As far as the competitor is concerned, you must be aware about the market scenario that few players like McNally Engineering, then TRF, McNally become bankrupt, TRF has already announced to shut down their material handling operations. Only few competitors are there, like L&T and TKIL.

Again, if you see the business strategy of L&T and TKIL, they are more focusing on the EPC projects. Of course, we have a competition with them, but not to the extent that every sector.

Elecon being the first equipment manufacturer for material handling equipment, most of the PSUs preference is with Elecon.

Okay. Thank you, and my good wishes to Mr.

Narasimhan for future career, and thank you very much.

Thank you, sir.

Sir. Sir, I have one question on the Gear Division.

What was the mix of engineered gears in this quarter's revenue? On the gears, you specifically mentioned about the revenue deferral which happened.

Would you be able to quantify how much was this revenue deferral that we are talking about?

Just a minute. In terms of revenue deferral, it is around 30 to ₹40 crores, where some of the dispatches, where we try to squeeze before December, that is getting extended to January or February.

The revenue mix in the EP and CP, the CP is 52% this quarter, again, and the remaining is for 48% EP for this quarter.

Understood, sir. That was question number one.

Just a quick on the second question on the export side. We had indicated our OEM count that we had tied up.

Can you update on that business, what is the status and how much business did we do with them in this quarter? Or in nine months, whatever you are comfortable.

Yeah. It is around 18 OEMs where we have tied up with.

Having tied up with the 18 OEMs, the revenue what we got during this nine months is around ₹31 crores. Okay.

What we look forward in future is that repetitive business which could come in future.

Got it, sir. This is great, sir.

Thank you.

Hi, sir. Am I audible?

Yeah.

Okay. Sir, my first question is regarding the gross margins.

If you see, the gross margin of 43% that you reported in this quarter is lowest in last five years. I know you cited some reasons relating to customer deferments and product mix, but can you throw some light on exactly which customers were these?

Were they international or domestic? Product mix changes, as you mentioned, engineered products in gears business was 52%.

I fail to understand why the 600, 700 bps fall in gross margins occurred in this quarter.

Yeah. See, the product mix is around 52% from catalog products and 48% from engineered products.

The gross margin largely, while in certain things like, for example, exports during this quarter we had a little bit low, where the margins are better off. Then the product mix sometimes keeps fluctuating between catalog products and engineered products.

That's also one of the sort of we would say that it's a more of a timing thing. Specifically, we are also a few orders, specific orders, which we are executing presently.

This is for a sort of indigenously developed product for the Indian Navy, though it is of a smaller order value, since it is being done for the first time by us, it has got higher sort of manufacturing costs, which is more towards the learning and understanding and designing and things like that. That's also again from a one-time point of view.

At the same time, overall there is no significant gross margin in a long term it is impacting us. Only thing is that probably 0.5% or 1% as what we had explained, considering the competitive scenario, how our approach towards that, we look at the pricing of the products, and accordingly factor those things.

Otherwise, gross margin per se in Gear Division, as well as of course MHE Division, is strong. In the Gear Division, the overall gross margin levels remains the same, except for during this year it has been on the lower side.

Okay. Just a follow-up to that.

You said 1% you attribute towards competitive scenario. Now, the amount that you told regarding the Indian Navy orders, if you can attribute some percentage to that, and whether this will be beneficial for us in the future orders of Indian Navy?

Yes. It is around 0.5%.

Definitely, that is the thought process that by bagging those orders, which is of a significant for us. In the first time when we execute, we are this thing, but once we establish our credentials, then there is a potential that such orders could come in the future.

Whatever the learning costs which we incur in the first year, obviously we will not be incurring it for a similar product in future years. We are eager to bag those orders.

While in the initial years, it could be a little bit on the lower side on the margins, definitely there is a huge prospects for such orders.

Okay. Sir, any update on...

It was a follow-up question. This is the second question that I'm asking.

Yeah. Sir, any update on this ₹200 crore aircraft carrier order that was expected in Q4, and Next Generation Missile Vessel orders in defense?

Yeah. One is that it is getting a bit longer time, probably Mr.

Dipak Dalwadi can explain.

Yeah. That New Generation Corvette, GSL and GRSE are expecting the orders anytime.

We are expecting RFP by the Q3 of next financial year.

Aircraft carrier order, sir? Hello?

Sorry?

Aircraft carrier orders?

Aircraft carrier. Indigenous aircraft carrier.

Regarding this indigenous aircraft carrier, that follow-on project is expected to be given to the shipyards in coming future. For that, we can get the RFP in the Q1 of financial year '27.

Okay. Okay.

Sir. Sir, this is not a question, but if you can just be more detailed in guidance regarding the segment-wise guidance.

Last year, last quarter, you told ₹650 crores in MHE, ₹2,000 crores in gears. Similar data if you can give, that would be great.

Thank you.

Yeah. It's broadly around ₹700 crores from MHE, and the balance is towards Gear Division.

Okay. Thank you, sir.

Sir, two questions. One is on the margins front, I think you have discussed that.

If you remove the Indian Navy margins, how much would the margin for the Gear Division come back to?

Sorry, can you repeat again?

If you remove the exceptional lower margins in the Indian Navy, how much would the margins come back to on the gear side?

You're looking at gross margin or net margin?

EBIT margin.

EBIT margin, if you remove that?

If you remove the lower margins of the Indian Navy, how much would the adjusted margin for the gears business division be?

Yeah. Specifically, probably we will come back to you and clarify to you specifically.

Sir, it would be useful if you could discuss here, because how will the public know? Because public forum.

Or you can just tell us some broad range, because the margins fall has been quite large in the last five quarters or in the company. That's the reason I was asking.

It is around 2% to 3%.

Okay. Sir, other question is, in the last few quarters, our order intake has been good in the Gear Division, right?

The revenue reported for the gears has not increased. Our cumulative order book from March is increased from ₹583 crores to ₹811 crores.

Our run rate of gear revenue has slowed down. What might be the reason?

Can we also correlate that the margin will be lower in the existing orders because there's a, as you said, employee cost and other cost increase, or those have been taken care of?

See, for the answer to your first question, whatever orders we have booked in Q3, they are major for the power industries. Their requirement are at the later stage.

All these orders will be executed in the next financial year. That's why the order books are showing high, but the order executions they have been deferred by the customers in the next financial year.

I got it. Any timeline you have a thought on when it will start, those revenues?

Because the run rates have gone down quite low. From

Q1 itself. From Q1 itself.

Q1 itself. Okay.

Sir, last question on the US tariff. On the export, how are you managing it?

Would you be impacted if the tariff status quo maintains?

You are asking of the tariff and impact to us?

Yes, sir.

Yeah. Yeah.

Broadly, you know that as an economy, US economy per se is not growing well. At the same time, while we are looking at more growth opportunities, the present revenue is not that much impacted.

We are able to manage that due to the tariff implications.

Okay. Sir, and the question you did not

the question was not answered. Just 1 second.

Sir, the question was that the orders that you have in hand, do they have higher margins or do they have lower margins? The orders of ₹811 crores on the gear side.

We will work out that and clarify at a later point of time.

Okay.

Yeah. Hi, sir.

Hope I'm audible.

Yeah.

Yeah. Sir, firstly the small point is about our existing order book.

The closing order book is at ₹1,372 crore. If you could just give us some color what is the execution cycle?

I think so you mentioned about some power companies' order which is there in the order book, but they will get executed for Q1. Then, sir, you have also spoken about some product mix and absorption of cost because of the increased employee cost and other.

If you could just give us some color as earlier participant has asked, how is the margin profile likely to be on the existing order book? Lastly, sir, on the utilization levels, since we have already done capex and we are also envisaging further addition, what is our current capacity utilization levels for both the divisions?

See, for your answer to your first question, actually, mostly orders are for EP Division. Their execution cycle is around five to six months.

All orders will be executed mostly in the next financial year, and starting from the quarter four. Few orders will be executed in quarter four and maximum orders in next financial year.

Hello. Sir, thank you for the opportunity.

Sir, my question was broadly on the impact of increasing commodity price, metal prices. How does that impact our existing order book in terms of margins going forward?

Thank you.

See, as such, because of this demand situation in the existing market, the price trends are more or less stagnant. There is no such increase in the commodity markets, and because of that our raw material prices are almost stagnant.

There is no much impact because of the raw material prices for getting the orders from the market.

Sure, sir. For our existing order book, some of the metal we will purchase, right, in future and at a higher price.

Will we be able to pass this on to our customers?

I don't think in the near future also there will be a price increase in the market for the metals and all the major commodity items. We don't see any increase, because normally we look forward for the six months onwards for the raw material prices for the booking the orders, as well as the study of the markets.

That we find that it doesn't seem any increase or major change in the raw material prices for the major category items of this commodity materials.

No, no, absolutely. I am talking about the increase in commodity price that have already happened, the metal prices that have gone up in the last one, two months.

I'm talking about that, sir.

Yeah. No, but we are also managing and having a good relationship with our suppliers, we are managing the prices.

Okay. Sir.

Thank you.

Hello. Am I audible now?

Sir, just clarification on the guidance part. You mentioned most of the order book in the gear segment will be getting executed next year, right?

At the same time, we are targeting ₹1,800 cr in gear division for this year. To achieve that number, we need to do around ₹575 cr in last quarter, right?

Out of that existing order book of ₹800 cr, if we have to execute ₹575 cr, so that means we have to execute a significant portion in Q4 itself. Isn't it?

Yes. Because now we are having a good orders on hand, we have lined up all our manufacturing activities, and we are confident that we will achieve all the numbers what we have guided.

No, no. Actually I'm asking while you are saying out of the existing gears order book, significant portion will be executed in next year, right?

Then how we will be managing ₹575 cr of execution in Gear Division in Q4?

See, for that what I talked about, that was for the engineering product. For the catalog products, we are having a less manufacturing cycles of, say, 1 months, or 30 days or 60 days.

For that we are getting the orders and we will execute orders. There is a very good orders in pipeline, we will definitely execute these orders in the shorter lead time.

Does that means in Q4 also, we will be particularly executing more of catalog product and that's why margins can be on lower side, because product mix is not getting changed? No, no, no.

It is not like that. The CP orders which we are getting, we are executing the same quarter.

The EP products orders we get in September month in Q2, it will be delivered somehow in Q4. Some orders we received in Q3 for the EP product, it will be delivered in Q4 only.

The mix of the CP and EP would be similar in Q4. Some EP products which we got in the December month only, that would be spill over in Q1 next year.

Understood. Sir, in the last two quarters...

It's a follow-up only on this question on the margins part. Means in last two quarters, we have been speaking again and again about this product mix is getting impacted.

I just wanted to understand when this picture will get clear. If that is going to be the case, if we are facing any delay in execution of our engineering products, then our quarterly margin profile is going to be suffered, right?

Yeah. This is the one case.

The other case is that if you see the product and the service mix, so that also includes in the margins. This quarter that is another one case.

The service portion from the revenue that also impacted the margin. We have the good order in the service business also, so that will be executed in Q4.

That is not the case in Q3 the margins are lower. In the Q4, the EP product, CP products, and the service, that will be mix of all.

Margins it will not like that it happened in Q3.

Yeah. Sir, this is kind of a follow-up on the question from the earlier participant.

At the end of Q2 also, we had a very strong order book and we were very confident about achieving good revenues in Q3 and Q4. As it went, there were some external factors which were beyond our control and we could not achieve it in the Q3.

Now again, we have a good order book and we are expressing confidence in a very good performance in the Q4. What is the change?

What gives us the confidence that this time it will happen? Are there any similar risks that we will not be able to achieve this guidance?

Yeah. See, what happened is, like what Mr.

Ashish also said, for catalog products, whenever we project, we factor in that from the time we inquiry to the execution, it takes about one month or so. Based on that, considering the market scenario, we get the understanding of how the market is performing, and accordingly factor that.

Since for the engineered products, there is a more clarity, we are able to provide the better clarity on that aspects. Therefore, depending upon how for that quarter it is fluctuating, we factor both the order on hand of how it will be executed, plus the order intake what we will be getting for catalog products which will be delivered in that quarter.

This sort of mix-and-match fluctuates, and that is what will be factoring in when it comes for revenue.

Okay. Simply say, the confidence levels of achieving this guidance is higher compared to the earlier quarter.

Is that right?

Yes, the guidance whatever we have spelled out, with a revision you would know what we have spelled out, that is achievable definitely.

Okay. Sir.

Thank you.

My questions have been answered. Thank you.

Sir. Am I audible?

Sir, with US trade deals being delayed again and again, and there is rather no clarity when it will be signed, what are the geographies where you are more optimistic about growth?

Yeah. We are more expecting the Middle East and the Europe.

Okay. Since China is also facing tariffs in US, they would be competing hard in these geographies as well.

How is our competitiveness compared to China in these markets?

See, you may be knowing that China, though they are competing, but they are not very good in the after-sales service. That's why we are not facing any competition from China in terms of the order executions and getting from the Europe and Middle East, because in the after-sales service, we are having upper edge compared to the China.

Okay. The second question would be, sir, you moderated FY26 guidance, beyond FY26, what would be your guidance in terms of top line as well as how would you expect the margins to behave in periods after FY26?

Yeah. Probably in the current quarter, we will have to do the budgeting exercise wherein we get the inputs from both the divisions and different markets, and then we'll be able to spell out of how we look at in the next year.

Generally, we give our guidance in Q4 concall. We will maintain the same, and we will spell out the next year guidance in Q4 concall.

Thank you.

Got it, sir. Sir, considering that private capex in India is just not picking off, and geopolitics is kind of very, very volatile as far as export markets are concerned, do you feel there is a downward risk to growth in coming years for you, or you expect things to normalize sooner rather than later?

See, power industries has started now performing, and they have now released investments. Government is releasing investments in power, we are hoping good traction from the power industries.

Even sugar industries are also expecting to pick up in coming months. We are expecting good traction from the sugar industries and also from the steel industries.

Cement also started now showing some expansion. We are expecting good tractions from all these segments.

Since we are also spread out fairly well in different industries across this thing, any pick and downtick on few industries, we are able to manage that. That's how we are optimistic that the growth will be better.

In closing, I would like to thank all of you for joining us today, and for your continued trust and support. While the Gear Division delivered a resilient performance during the quarter, we are particularly encouraged by the strong momentum and long-term potential of the MHE Division, which brings balance and incremental growth to our overall business.

Even as we revise our near-term guidance, our focus remains firmly on disciplined execution, prudent capital allocation, and strengthening our leadership in high-growth segments. We are confident in our ability to build on the current momentum, navigate short-term challenges, and continue delivering sustainable value for our shareholders and all stakeholders.

Thank you once again for your participation. Should you have any further questions, please feel free to reach out.

Have a great evening. Thank you.