Thank you. Good evening, ladies and gentlemen.

I'm Krishna Bodanapu, Non-Executive Chairman of Cyient DLM. I welcome all of you to our Q4 FY26 earnings call.

Joining me today are our Managing Director and CFO Mr. Rajendra Velagapudi—sorry, Managing Director and CEO Mr.

Rajendra Velagapudi, and our CFO Mr. RM Subramanian.

Before we begin, I would like to remind you that certain statements made during this call may be forward-looking in nature and subject to risks and uncertainties. A detailed disclaimer is available in our investor update section posted on our website.

I'll start by first sharing my perspective on a few key developments in FY26, and more importantly, how we're positioned as we step into FY27. On reflection, FY26 was a poor year on a growth perspective, and I think that is a reality that stares us.

Having said that, I'm happy to say, and we will talk about it in more detail, that we end the year strongly with a strong Q4 and a strong order book that will—a strong backlog and order book that helps us deliver well into the coming years. Let's start with the order book momentum, which remains a strong anchor for our confidence.

Over the course of FY26, we witnessed consistent and healthy order intake across our focused industry segments. Each quarter we had a book-to-bill ratio of greater than 1, which ends up at being 1.5 times for the full year.

The ability to sustain the strong order book through the book-to-bill ratios reflects not just the demand conditions, but also the effectiveness of our customer engagement model, our service offerings, and our focus on long-term programs. I'm happy to say that the order intake is the highest—or the order backlog is the highest that it has ever been, which bodes well for the coming year ahead.

Equally importantly, or I'd even say more importantly, is the quality of the order book. We are increasingly winning programs that are more complex, more integrated, critical to our customers.

Now, these engagements come with longer lifecycles, greater collaboration, higher barriers to entry. All of this sustains or substantiates the durability of our growth.

What this also means, the type of programs that we're working on, means that we will continue to have better predictability and better profitability, which, as is very important to the sustainability of our business or, for that matter, any business. Margins this year at 10+% were very good, and we believe that that will sustain into the future.

A key driver behind this momentum has been our focused effort to support and strengthen the sales organization. Over the past few years, over the past year, we've hired some very good sales leaders across geographies and industry verticals, and this enhances both our reach and the depth.

This has helped us to progress meaningfully from being just a manufacturing partner to being a value-editing value-adding strategic partner. I'll say we continue to hire sales team and good sales leaders, and we continue to see some very good benefit which will translate into, again, the coming year.

Being a good value-add strategic partner is relevant in the segments we focused on, where selling is relationship-driven, it is technically intensive, and as it comes with long consultation cycles. With a stronger leadership bench and more structured go-to-market approach, we believe now we're putting into place a sales team that is well positioned to convert and execute a very, very strong pipeline into FY26 on top of a good year for order intake and a very strong order backlog that we start the year with.

Of course, we've had challenges this year, obviously the significant geopolitical uncertainties that have characterized this year, with initially with the scare with tariffs and, or with the uncertainty I would say, with tariffs, and now and what continues is the crisis in West Asia. Some of our customers have been directly impacted, and this has led to temporary disruptions in schedules and execution plans in Q4.

Of course, there is a stress, and it's hopefully a cyclical stress in the electronic component availability with what's happening in the memory sector, and we end up, given the complexity of our boards, we end up using memory in a lot of our boards. Also 60+% of our revenue comes from exports, and therefore the global geopolitics and the global issues have a disproportionate impact on on us.

Of course, despite these headwinds, we performed strongly. We did well on our delivery commitments, we protected customer confidence, and we responded with agility across supply chain and execution.

Another positive we're seeing is the structural shift in the growing traction in the build-to-spec engagements, which are higher value engagements. While build-to-print or EMS remains an important part of our of our portfolio, customers are increasingly seeking partners who can engage earlier in the value chain, contributing to specifications, manufacturing decisions, suppliers, part selections, and of course the entire lifecycle management, which includes things like service, etc.

These wins reflect the trust customers place in our engineering depth, process rigor, and governance. On the subject of margins, of course, I'm thrilled with the company's ability to sustain healthy double-digit performance.

As this has been our our intent and our ambition, and I'm happy to say that this year we we ended with 10+% EBITDA margin across the whole portfolio, including the operations in India and the operations in the US. This is the first time that we have ended with 10%+ EBITDA margin for the entire year, and we believe that we are in a very sustainable situation.

Of course, this is not by chance. This is through deliberate actions.

We focused on the right segments, we've invested in operational excellence, and of course, we've maintained discipline in cost and execution. We remain clear that margin sustainability is as important as growth, and our objective is not short-term optimization, but building a robust business model that will deliver long-term value for all our stakeholders.

I can again confirm that we continue to invest where it is needed, especially on sales, especially on on technology, which will all lead to some very good outcomes over the years. As we look ahead, I am particularly engaged by a strong entry into FY27.

The order book, the pipeline maturity, early ramps, all gives us measured confidence as we go into the new financial year. Of course, there are global uncertainties, but we're quite confident that structurally we have a very strong business mix.

Obviously India's growing role in global electronics, increased defense spending, rising electronic content, all bodes all bodes very well for Cyient DLM and presents meaningful opportunities. Before I hand over for the business update, I would like to thank our employees for their dedication, our customers and partners for their trust, and you, our investors, for your continued support.

Thank you once again, and I will turn it over to Rajendra to talk about the business. Rajendra.

Thank you, Krishna. Good evening to all of you.

I'm Rajendra Velagapudi. Just I will quickly walk you through some of areas of the achievements in terms of business.

First I would like to give a concise overview that covers three critical areas. One is the current EMS industry outlook and its primary demand drivers, notable highlights and milestones recently achieved by Cyient DLM, and our forward-thinking strategic roadmap organized around the pillars of strengthen, expand, and transform.

To just begin, let us look at the industry perspective. The global EMS market is poised for robust expansion, with projections indicating growth from approximately $650 billion in 2025 to nearly $1.1 trillion by 2033, a solid CAGR of 6%.

This trajectory is fueled by a confluence of long-term structural trends, that is accelerating electronification and digitization across multiple sectors, increasing defense expenditures worldwide, shifting geopolitical landscapes that prompt supply chain realignment and localization, the rapid emergence of AI and supporting infrastructure, and a marked rise in domestic investments within India, particularly in defense and rail. Geographically, the demand is distributed broadly: APAC leads 40%, followed by North America 35% and Europe at 25%.

Segment-wise, consumer and IT remain dominant, trailed by industrial, while automotive, aerospace and defense, medical and rail are collectively gaining strategic importance as growth drivers. The key takeaway here is that the EMS industry benefits from enduring multi-year demand, setting the stage for sustained disciplined growth.

Shifting focus to Cyient DLM's recent accomplishments, we have made significant strides on multiple fronts. At the Integrated Electronics Manufacturing Interconnection event, which was held in the beginning of last quarter, Cyient DLM recognized by the Global Electronic Association and also achieved top honors in the fiercely contested hand soldering championship, where our participant emerged victorious among a field of international competitors.

These accolades underscore our dedication to excellence and are a testament to the ongoing investments we make in quality, training, and process maturity. On the automotive front, we have successfully completed the International Automotive Task Force audit and secured the letter of confirmation, further enhancing our credentials.

In addition, we have commenced series supply for a new automotive product line and initiated series production for a semiconductor mission supply partner. These are not preliminary trials, but full scale, repeatable production endeavors, signaling our growing capabilities and reinforcing our entry into more rigorous customer environments.

We continued order intake momentum in Q4. As Krishna said, I am pleased to share that we secured an order intake of over $208 million for the year, resulting in a robust book-to-bill ratio of 1.5x.

This performance is a clear testimony to our focused strategy and execution in our key markets. We witnessed good traction across major industries, reinforcing the diversification and resilience of our business model.

With the continued strengthening of our sales organization, we are confident that this momentum will further improve as we move into FY27. Looking ahead, our strategy is structured into three phases, as I said earlier: to strengthen, expand, and transform.

If we look at the strengthen, our immediate focus is on fortifying our core. This involves deepening our presence in key markets, pursuing operational excellence, and strengthening our build-to-spec capabilities.

Tactically, we are enhancing our go-to-market structures, building cross-functional teams, pursuing large deals and new client logos, and investing in automation to support scalable, disciplined growth. If you look at the expand section, the next stage targets selective growth avenues, particularly in automotive, Indian defense, and AI infrastructure manufacturing.

We are also aiming for vertical integration across cable, sheet metal, and machining, broadening both our market reach and manufacturing depth, while capitalizing on global industry tailwinds. If you look at the transform, finally we aim to move beyond conventional EMS models by developing production platforms, investing in product organization capabilities, and forging technology partnerships and MOUs.

This phase is designed to unlock new long-term strategic opportunities and additional growth levers. In summary, the EMS industry continues to present a promising landscape, bolstered by megatrends like digitization, increased defense spending, supply chain localization, and the rise of AI infrastructure.

Cyient DLM's recent milestones, particularly in automotive and semiconductor, underscore our momentum. Our phased roadmap—strengthen, expand, transform—charts a clear and disciplined path for growth through the years.

Looking ahead for FY27, the company remains focused on operational excellence, margin improvement, and deepening strategic customer relationships, supported by a strong pipeline and order book, and we continue investments in capabilities and go-to-market. Thank you for your continued support and interest in Cyient DLM.

Now I hand it over to RMS, our CFO.

Thank you, Rajendra. Good evening, ladies and gentlemen.

This is RM Subramanian here. Let me take you through the financial performance of Q4 FY26 and the full year performance.

For the quarter, revenue stood at INR 3,691 million, reflecting a strong growth over previous quarters in the financial year. On a year-on-year basis, it is down by 13.8%, mainly due to the large order closure in Q4 FY25.

We also observed some moderation in customer offtake due to West Asia crisis and project execution phasing getting extended. That said, from a demand perspective, we are encouraged by the underlying pipeline and the order inflows.

Coming to the order book, we ended the quarter with a strong order book of INR 24,166 million, with INR 672 million net addition during the quarter. The order book reached its highest level in last 10 quarters.

It is really encouraging as it gives us a good visibility moving into FY27. EBITDA for the quarter is INR 431 million, down 24.9% year-on-year, and the PAT came in at INR 224 million, a 27.6% decline year-on-year.

While the year-on-year comparison reflects the impact of lower revenues and operating deleverage, it is important to highlight the sequential strength in profitability is improving. At a margin level, EBITDA improved to 11.7% and PAT stood at 6.1%.

Both EBITDA and PAT margin are the highest compared to all previous quarters of the year, reflecting focused execution on operating efficiency and margin-accretive business mix in Q4. Let me now walk you through our full year financial performance.

For FY26, revenue stood at INR 12,615 million, representing a 17% year-on-year decline. The softness is caused by the one large A&D order completion during FY25.

This is also an year of moderated demand across certain customer programs and deliberate execution pacing. However, the business demonstrated strong operating resilience through the through the year despite the softness.

On the profitability front, normalized EBITDA after factoring one-offs of wage code impact and M&A expenses stood at INR 1,302 million, a decline of 10.2% year-on-year, while reported EBITDA stood at INR 1,268 million, down 12.6% year-on-year. Importantly, margins remain stable in double digit, driven by an improved business mix and tight control over operating expenses.

At the bottom line, normalized PAT after factoring earnout impacts for FY26 was INR 563 million, down 24% year-on-year, largely reflecting operating deleverage and normalization adjustments. However, reported PAT increased by 7.7% year-on-year to 733 million, INR 733 million, with margin improving to 5.8%, up 133 basis points year-on-year.

Coming to the order book, we closed FY26 with a record order book of INR 24,166 million, which is INR 5,105 million higher than last year. This is the highest order book level for us since 2.5 years.

This is providing us a strong revenue visibility and the confidence as we enter into FY27. In summary, FY26 for a year of was a year of subdued revenue, however we sustained double-digit EBITDA margin since and built a record high order book.

These factor underline the robustness of our operating model and position us well for a gradual recovery and profitable growth in the coming year. This slide captures the quarterly trend of revenue and margin.

Starting with revenue, we saw steady ramp-up to FY25, peaking in QI Q3 FY25, followed by a moderation in FY26. Despite the softer revenue annual environment in FY26, the quarterly trend shows a sequential improvement towards Q4 FY26, reflecting a gradual normalization in customer schedules and improved execution momentum as the year progressed.

The margin follows similar trend as revenues, with gradual improvement sequentially in FY26. While EBITDA moderate in early part of FY26, we saw strong recovery in Q4 FY26.

Same is the case with PAT as it shows a healthy upward trend after the start in FY26, softer start in FY26. Profitability improved sequentially, culminating in INR 224 million in Q4 FY26.

To summarize, while revenue revenue trend was subdued, both EBITDA and PAT margin show a clear upward trajectory, particularly in the second half of the year. This reinforces our confidence in the structural strength of the business and our ability to convert growth into profitable outcomes as volumes recover.

The next slide highlights the quarterly trend of our non-P&L metrics. Starting with the order book, I mentioned earlier that we see a clearer and consistent upward trajectory.

The order backlog have increased from about INR 21.3 billion in Q1 FY25 to INR 24.2 billion by Q4 FY26, making it as the strongest level the company has seen for quite some time. Inventory days remained elevated through FY26, largely driven by advance stocking for the long lead components and program ramp-ups.

Importantly, we are seeing reduction in Q4, reflecting tighter material planning and improved execution alignment. DSO has improved steadily, moving from the low 90s to the mid-70s, driven by stronger collection and billing discipline.

DPO on an average is higher in FY26 compared to FY25. During the FY26, we saw elevated working capital, typical of a ramp-up and revenue moderation phase.

As we move into Q4 and forward, we are seeing clearer signs of normalization, with sharper control on inventory, stable receivables, and a healthier cash conversion cycle. We expect to improve it further as we move into FY27.

In terms of revenue share, from an industry perspective, aerospace, industrial, and medical continue to be our largest contributors. Defense share is low and having year-on-year decline of 68% due to large order coming to an end in FY25.

The other segment shows stronger growth, largely aided by B2S business. From a product category standpoint, PCBA remains the largest contributor at around 48% of the revenue, reflecting its continued strength across industry segment.

It is also encouraging to see the box build revenue share going up. Others category recorded strong growth, supported by B2S and value-added offerings.

Geographically, the rest of the world continues to account for over 90% of the revenue, driven by strong demand across four industries we operate. It is expected to remain same in the near term.

Overall, the Q4 mix reflects a balanced portfolio, increasing contributions from strategic programs and strong overseas demand, which positions us well moving forward. The next slide is on financial detailed overview.

This slide provides the detailed P&L view of for the quarter. As mentioned earlier, revenue is lower year-on-year due to large order completion in FY25 and moderate offtake from few clients due to West Asia crisis.

However, the quality of the revenue significantly improved along with supply chain efficiencies. As a result, we post a healthy double-digit margins at 11.7%.

Although it is lower by 174 basis points year-on-year, the traction is sustainable and hence provides more confidence moving into FY27. With better control in finance charges and benefits from other income, normalized PAT stands at INR 224 million, a significant growth sequentially, but a decline 27.7% year-on-year due to strong Q4 FY25.

Next slide, revenue for the year is INR 12.6 billion, down 17% year-on-year growth, primarily impacted by the completion of a large order in the previous year and delayed ramp-ups in few programs. Material costs are lower year-on-year, mainly due to improved revenue mix.

With the revenue contribution from high-margin business increasing, we see this trend sustained. The overall margin in FY26 have improved due to business mix and better supply chain efficiencies.

Normalized EBITDA stands at 10.3%, 77 bps higher year-on-year. Reported EBITDA margin also improved to 10.1%, up 103 basis points.

At the bottom line, normalized PAT declined to INR 563 million due to operating leverage and one-time cost during the year. However, reported PAT increased by 7.6% to 733 INR 733 million, with 5.8% margin, up 133 basis points year-on-year.

Overall, despite revenue headwinds, FY26 demonstrates margin resilience, disciplined cost management, and improving profitability, positioning us well as the revenues recover. This slide is on EBITDA and PAT walk.

The slide explains the bridge from reported to normalized margin. The first one-off relates to M&A evaluation expenses amounting to INR 17.75 million.

We incurred this expense to evaluate a deal that did not go through. The second one is the wage impact totaling to INR 16.4 million, resulting from the new wage code by Government of India.

The third item is the reversal of earnouts from the earlier M&A deal. All these expense above are exception in nature and not reflective of normal business.

The PAT walk reflects the tax impact of this adjustment as well. The next slide, in terms of IPO proceeds utilization, as of March 2025, we have fully utilized the IPO proceeds in complying to the objects defined during the IPO.

We are glad to report that IPO proceeds are fully utilized and the account stands closed. In summary, FY26 performance Okay.

This brings to me towards the end of the finance presentation. Before we move into Q&A, let me summarize our performance in four key points.

Order book remains strong, with four consecutive quarters of growth in build-to-book ratio of greater than 1. Revenue was impacted by FY25 large order completion, but we are well positioned for a strong FY27 backed by strong order book.

Margin remains healthy at double digits, with further improvement possible with scale. Fourth, industry and product mix are diversified and moving in the right direction, supporting the long long-term margin expansion.

With this, I turn into the floor. Thank you for your kind attention, and we can move to Q&A from participants.

Hello, sir. Good evening.

Congratulations for the very strong numbers in respect of margins and very good cash flow and order book and all. I think, sir, there is a small miss if we see the Y-o-Y revenue.

I think in the quarter 3 call, we were confident of hitting our revenue Y-o-Y as well. What could be the reason, I think US tariff or West Asia war or any other reason for that?

Yeah. Yes, Vaibhav, first of all, thanks for that.

It is a question which is very important for everyone. I think the headwind what we had, one is the West Asia war impact.

Because of that, the materials got delayed, that usually all our materials comes through after West Asia in terms of all the flights and all. They got delayed and so we got the material for the quarter to finish it.

We also had other headwinds in terms of the Israelis, where we are working for some of the programs, defense programs. We could not get some of their approvals, clearances, again because of West Asia war which is going on there.

Added to that, and we also have some other NPI approvals from our customers. These are the three main reasons where we could not able to meet our commitment what we said in the last investor call.

All right, sir. Sir, just to know if it is not in the presentation, how much exposure we have in West Asia in terms of our supply chain or delivery?

Going ahead, we expected very strong FY27. How is it going to affect our target or what are the targets that we have set in terms of revenue and margin for FY27?

FY27, I think we are not giving any of the guidance right now on the revenue side. Whatever FY26 has gone by, so that is a year which was not a good year for us.

I think now FY27, you will be starting seeing the growth, year-over-year growth you will be seeing it in all the quarters, four quarters, which is a very strong. I think by looking at the order backlog what we have and also the pipeline which we have currently, it gives a strong reason for us to look for higher growth.

All right. Thank you so much.

Yes. Thank you very much.

I have a couple of questions. Obviously, very strong order book growth that sounds promising, but it's not converting into revenue, and I can understand the reasons you've provided.

Can you give us some sense of how do you define order book and backlog, and has that definition stayed consistent over the last few quarters?

Yeah. When we say order book, those are the purchase orders which we've got from our customers.

Okay? Only that we will take it where we can take material actions.

That's where we will consider as a order book. We won't take anything which is TCV and all those we won't take it as a part of our order book.

Order book is very clear: it is a purchase order which are available with us, executable in that financial year or beyond the financial year. It is a total order book what we have, but for the year FY27 order book is very, very strong and solid right now.

That's what I think in terms of order book. Order intake is, I think as we said, it's only again the POs what we get from our customers.

That only we'll take it as an order intake. It is not anything about this is an full TCV for 5 years, we'll get around $40 million, so that we won't take as a part of our order intake.

Just one one question. I think in your slide deck, you mentioned you're still looking for acquisitions, with the IPO proceeds that you've used up of 100%.

Any thoughts on what structure are you thinking about as you look to make acquisitions?

RMS here. Let me take that, okay?

We continue to look for both organic, inorganic growth. As Cyient DNA which is, we continuously look at opportunistically.

We will look at both from a product perspective in terms of what we don't have and geographically, okay? This is in terms of the playbook of what we look for.

Based on what comes in our market, we continue to evaluate it. Depending on the fitment, we will look at it, okay?

We looked at it sometime in the last quarter, but it did not go through. We continue to look for opportunistically.

As long as it fits in our portfolio in terms of growth geographically or product-wise where we don't have that expertise, we will look for that, okay? It's depends on opportunistic.

Got it. One final question.

In terms of you've identified some new product areas. You've spoke about semiconductors, you spoke about AI, it seems that you're getting into more sort of critical product segments.

Can you spend a minute talking about what products are you contemplating building there, and gives us a sense of when we should start to see the results of those new forays?

We're particularly on the equipment manufacturing for semiconductor equipment manufacturing. We are doing a lot of the power boxes for the customers, and a lot of those products which goes into the PCBAs, wire harness, and the complete integration of those machinery, the subassemblies which goes into the That is where I think we are focusing today.

We are seeing a lot of traction from existing customer and also from the new customers in semiconductor area. Okay?

That's what that. Again, on the AI side, as I said, we are expanding, that's where I said we are now focusing more on those areas.

Probably we will explore more on that and probably come back in the next quarter if you have some update on that.

Got it. Thank you.

Hello? Am I audible, sir?

Yes.

Yes, thank you so much for the opportunity. Sir, you mentioned that some of our revenue was impacted due to the West Asia war.

Would it be possible for you to quantify the amount that was deferred? I believe that's the reason our inventory has gone up because the shipments didn't go through.

Yes, exactly. We have already planned for that.

That's what the revenue which we have missed there. That's where I think the inventory, which has gone up, the DIO and the absolute value of the inventory has gone up.

That is one of that reason because of the West Asia, yes.

Can you quantify the amount of revenue that we lost out due to this? Would it be possible?

No, yeah, I think as I said, there are basically three areas where we impacted our Q4 revenues. I think, yes, we have the numbers, probably I think we It is

Maybe I can get in here. We don't want to get into exact quantification of the stuff, but if you look at it, some of them are postponed in terms of pushing to the next quarter, etc.

What we can broadly say is these are the reasons why there has been a gap in terms of what we expected and what happened. Overall, the way we're ending this quarter is based on the order book and what we have on hand.

This is the confidence that we should continue to grow quarter-on-quarter.

Sir, any color on the order pipeline that we have, and what sort of inflows will we expect for FY27?

We are looking at the book-to-bill ratio is greater than 1 as we said. I think we will be focusing on that.

I think we are very, very confident by looking at the current order pipeline what we have. We will be working towards that, and probably you'll be seeing those order intakes for every quarter.

You'll be seeing a positive things going forward. Okay?

Yeah. That's what I think probably I can share an order intake side, yeah.

Just to maybe one point to add to what Rajendra said is, from an order intake, it is growing in the direction of what we want from our sector perspective. The non-A&D segment is growing, and that's the direction we want to go on.

There are some focus new areas of what Rajendra talked about. India has a strengthening of that as well.

Overall, directionally, we're happy with the way the order book is shaping up, and that gives a confidence for going forward.

Okay. All right.

Sir, what was the contribution from the B2S segment this quarter?

We're not getting into the specifics of section-wise thing. I think B2S is a long-term play.

Last year we did not have; this is the first year we are having it. For the first year, it has done well, and this will in terms of fructification to series order and volume production, it will have a couple of years down the line is where it will come up.

Overall, we are very happy with the way the performance has come up. It's better than our expectations.

We should give that division a little more time in terms of what we do. Otherwise, it continues to be a profitable division.

These margins of 10% to 11%, we sort of expect that to sustain, right, going ahead?

Basically on the margin front, let me try and answer. If you look at it, our revenues could have been softer, but we've been able to consistently maintain the margin.

It's because based on the quality of the revenue and the order book what we have. Since the color of the order book continues to remain strong and we are happy about it, we can say that we are confident of sustaining it.

If we have the top-up in terms of the growth, the operating leverage impact will start kicking in, and we can have something on top of this. Okay?

That's what we are confident about in terms of sustaining and performing better as the volume grows.

Sir, given the strong order book that we have, can we expect somewhere like 25% to 30% sort of growth for FY27? Would that be a fair assumption?

On revenue guidance, we've clear that we will not be giving any guidance on that. Having said that part, what I can say is Q4 was a good quarter in terms of the growth Q-on-Q.

Also the order book and the visibility what we have gives us the confidence it will be going to be a strong year, which will make probably everybody happy. I don't want to be getting into the numbers, and let's leave it at that.

Okay. All right.

All right. Thank you.

Hello. Am I audible?

Yes, sure. Is it better now?

Yeah. Thank you so much for the opportunity.

Great performance on the margin front. Sir, I had two questions on Altek and then on the investments that we made on our sales team.

Let me start with Altek. Altek historically operates on a much shorter book-and-ship cycle compared to the 18-24-month gestation that we usually see in our standalone base.

How do you see this impacting our projected '27 consolidated revenue? Because there is enough and more cross-sell synergies.

If you can highlight between the growth that we're seeing in standalone vis-a-vis Altek.

Yeah. Altek, I think as you rightly said, Adit, we usually get it order intake in the same year, most of the things getting converted in that year.

Almost 50%, I can say, it get converted. I think we also have a good order backlog right now available, and we also see a lot of pipeline from the existing customers.

Also to add to you, I think we also added one of the new customers, the synergy customer from the Cyient DLM standalone side. Now they also just started working with the Altek.

We got the first PO there in the last quarter, and we'll be seeing more of those tractions happening from the synergy coming in. With the order book which we have plus the pipeline which we have, we are very confident that we will be seeing the growth in Altek business in FY22.

In FY27, sorry.

Understood. The growth rate that we're seeing in our order book is not explicitly reliant on specific cross synergies.

If it happens, it's an addition. Correct?

Correct. Correct.

Correct. Exactly, yeah.

On the point that you highlighted in your introduction, that we've invested in our sales team, when I look at the standalone EBITDA margins vis-a-vis the difference between the consol and standalone, the EBITDA margins has gone down in Q4 specifically. This is purely because of our investments that we made in Altek, in employee expenses?

Correct?

Let me answer this question. In terms of the average EBITDA margin between India and US business, US business is going to be lower, and that's something which is expected because US manufacturing will have a lower EBITDA margin.

This is in terms of the expected lines. That's point number one.

Point number two, overall Altek and the growth in Altek continues to have a bit of a overhang with respect to the tariff overhang still continues to be there. There's no clarity in terms of which direction it's going, which I think we are all aware of.

Okay? Overall, the synergy benefits in the cross-pollination, there's a little bit of a slowness in it.

Hopefully, things should settle down and then it will lead to it. Once we have a cross-pollination where India's customers start going through Altek and the US customers start moving to India, we will see those benefits.

Those benefits are just started on a trial basis happening, but not in a full-fledged. When that happens, we will have a uptick in the margin.

As of now, none of them is factored in. As you rightly said, the margins are lower, but that's on expected.

The more we start moving to India and using Altek as a beachhead in terms of US business is where the uptick will come in. That will take some time, and it's also dependent clearly on the tariff overhang getting cleared, which should happen over the period of time.

Understood. Understood.

Just let me squeeze in one more question. A question, one is on the current investment that we made in the sales team, how much sales can they generate?

What is the revenue potential of this sales team? Then also if you can just help us understand the build-to-specification, right?

Because last couple of quarters back, you had said that mass manufacturing orders, i.e., for the four new anchor clients that we had onboarded will start coming in from FY27 Q3 or Q4, and we would see actually scaling up in FY28. Is this still on, or do you see this happening earlier than expected?

If you can just comment on that.

No, I think as you rightly said, that's what is going to happen. We'll be seeing it some uptick in the order intake because of this new people who are on board, and we are also adding a few more people, where we are in the process right now.

With all that, we are definitely seeing more order intake in Q3 and Q4 and beyond, yes, when all this new people coming in.

Understood. Also on the build-to-specification that you had mentioned last quarter, that we onboarded four new clients in the defense vertical.

Exactly, exactly. Absolutely.

Yeah. You'll also seeing the revenues and also an order intake for the next year, yes.

The inflection point will be fag end of FY27 or we'll see the visibility more coming in FY28?

No, it will be in the fag end of FY27 and also in FY28 more, yes.

Perfect. Perfect.

No, this clears a lot of things. Thank you so much, and wishing you and the team all the very best.

Thank you. Thank you.

Hi, sir. Good evening.

I just want to understand a bit more about the dip in margins that we saw this quarter. I think you answered it previously, but I just wanted to get to know more a bit because we moved out of the defense orders, which should give us higher margins, but we saw a dip there.

Can you explain a bit more?

From a margin perspective, what I think as reported, we continue to sustain the double-digit EBITDA margin, which is our focus around, okay? In terms of the absolute numbers, okay, obviously there's been a drop in terms of the margins, okay?

Hopefully moving forward, as we move along, and if the product mix remains the same, okay, these margins are sustainable in terms of what we are doing.

Could you just go more into the reason for the dip there in the EBITDA margins?

The EBITDA margins in terms of overall, if you look at it, it's actually improved, okay, in terms of

No, I'm talking about this quarter to be specific. We saw a dip.

That's more reflected on the revenue drop and operating deleverage impact because the fixed costs continues to remain the same. That's the impact of it.

Shouldn't we have seen better margins from not taking up the orders from the defense space?

No, as the percentage

Wasn't that the reason that we moved out out of that space in the first place?

That's why I said, as a percentage, at absolute level it has come down, and at a percentage level it's improved or maintained. That's what I explained, which is because of the revenue degrowth and the operating deleverage impact.

Okay. Got it.

Hello?

Yes, sir. I have one question, which is regarding the order book.

When you say book-to-build order of 1.5, when the order book continues like 400 crores as it's distributed, it means that we can do 1,600 crore plus of revenue in FY27. Can you confirm for me on that?

No, no. I think see, order book whatever is there in that executable order book in this financial year, and then I think as said earlier, the order book whatever we have is going to be 18 months to 22 months, 24 months range, right?

Not that everything can be happening only in one financial year.

Can you give some number I'm asking for some numbers?

That's what I said. We are not giving any guidance right now on that in terms of how much of the order intake will be converted as a revenue in FY27.

We're not giving that guidance. Probably you'll be seeing that in the next quarters itself, starting from next quarter itself, we will be seeing that growth.

Okay. Second thing is that order book pipeline when you say, can you give how big is the pipeline, some number?

Conservative also will be fine, sir.

Are you talking about sales pipeline, what we have?

Mr. Order book pipeline that we are negotiating right now or we are pursuing for next 1 year.

I think we have a very good order pipeline right now as I said. It is a closer to a half a billion dollar order pipeline which we have today, the sales pipeline, where the teams are working out to make those things as an order intake.

That's where I think the focus is going to be in the FY27 order intake target, which we are driving it internally.

Yeah. Hi, sir.

Good evening. Sir, quickly one line item on the balance sheet, which is contract assets.

Can you please explain what is that?

Contract assets is unbilled revenue which we have, okay? That's more from the B2S thing, yeah.

Okay. Fair enough, sir.

Sir, from working capital perspective, what kind of targets you have for this year? Do we see further improvement from here on, or you expect to maintain the current level?

On net working capital, which we talked about, is slightly elevated. We definitely see possibilities for improvement, and we're going to continue to work on it, okay?

Our target is to reach about 120 in terms of the number of days, but we have some distance to go. Maintaining what do you call a profitable, efficient operations and growing is always a challenge, but we continue to do it, and we continue to work on improving it, okay?

It'll take couple of years, but that's a work in progress.

Sir, the last, if you permit me, from an aerospace perspective, the company has many European defense companies as a clientele. Are we targeting new geographies, or are we continue to be limited to Europe and Middle East?

You're not very clear. Can you repeat the question, please?

They wanted to know, sir, from an aerospace perspective, we currently have clients in Middle East and Europe, Israel and mainly Rafael and Thales and all these companies. Do we have plans to switch to other clients also, or we plan to increase our wallet share with these clients?

No, that's why I think earlier RMS also was mentioning that we'll be also focusing more on the non-A&D side of the business. Which we will be seeing that, I think if you look at some of the order pipeline, what we have, so that's where I think we gives us a strong this thing to us saying that yes, we'll be seeing more of the non-A&D along with the A&D growth, whatever we have the pipeline will continue.

Yes, not that because of whatever is happening today in West Asia or on the in other areas, but we see a traction definitely in the non-A&D, and we will continue that along with the A&D growth.

Right, sir. Thank you.

Hey, hi. Am I audible?

Is it better?

Yeah. I wanted to ask two questions.

One was on the direction on margin in the future years and on the areas of growth. Where do we see growth coming from in terms of revenue and order book?

Secondly, we have had some delay in the quarter. During the war, are we seeing any positive commentary from the Israeli defense customers?

I'll take the questions on the margins, okay? In terms of the margins, we are confident of sustaining the margins moving forward.

This is based on the order book in terms of customers what we have, okay? With the current mix, we can continue to maintain, and with the growing volumes, there will be a couple of basis points improvements with respect to the operating leverage impact, which is on the positive side, okay?

That's what we will continue to aim for in the next year. In terms of the business growth

As I said, I think if I can answer your last point in terms of the defense or Israeli business side, I think we'll be seeing a lot of the traction there, which we are seeing it right now. There are a lot of RFQs in the pipeline which we are working out currently, and we'll be seeing more of the order pipeline and the order intake coming from the Israeli customers.

We see the growth not only from that one area, we are even from existing customers, both in aerospace, non-aerospace, and also the new verticals, electric vehicles, where we are focusing. We are seeing a lot of traction in that one.

We'll be seeing more of the revenues growth coming from those areas, too.

Yes, sir. Thank you.

Thanks for the opportunity. Firstly, if you can cover the geopolitical aspect.

US is a big portion of our revenues. With the reduced tariffs, have we seen any pick-up in the demand and order of the book?

That is one. Also the West Asia crisis, how much I didn't understand how much proportion of our revenue is coming from Israeli client.

I'm assuming he would have not given you the delivery timeline yet because nobody knows when the war ends. On the freight aspect, are you able to reroute from other lines or other modes of transport that you're getting the supplies for your raw material that you elaborated?

On these two fronts, I wanted your clarity.

Okay. Sure.

Definitely, Deepak. On the tariff side, yes, there was some clarity, but still that cloud has not gone away.

Correct? I think so we still don't know, but the customers are still waiting.

Some opportunities coming right now, asking us for submission of the quotes, but it was not that what we were having in the past. I think probably it will just clear that cloud in probably in the next one quarter or so, once we get a full clarity from the US tariffs.

Okay? Otherwise, yes.

To your question, yes, we are seeing the new opportunities coming in right now. On the second one on the West Asia, it is not that it is only from one region there where we could not able to make the revenue.

It is mainly the supply chain, where we are getting it through the air cargo. I think all that cargo comes either from Dubai or this thing, Doha.

That's where I think we had a lot of challenges in getting the materials. It is not that our final goods are only for the customers there in the UAE region or so, okay, it is not for that.

It is basically for all the customers where we had got impacted because of not getting the materials on time.

Sure. On this aspect, are you able to fix this issue?

Has there been any solution to it that you've found, which gives you a good visibility going forward? This and yeah, you can answer this, and then I have another question.

I think, see, we are taking an actions wherever we see the impact now. I think that's where I think our inventory also has gone up because of the materials where we have some partial materials, and we are working out to ensure that we get the materials.

Also, as Krishna said, there are also some challenges in terms of the lead times gone up for the memories. Correct?

Those are the things where we had some impact of inventories. We are so if now if you ask me what's the some of the actions, we have already ordered the materials for the entire FY27, particularly for the critical items where there are long lead items, we already placed the orders.

That way at least it will ensure us that we will meet our commitments for FY27.

Sure. Understood.

One more question I have.

Thank you for opportunity. Sir, my question related to the order book is first one is there any order from the associate companies of a Cyient you have?

How is the mix of a geography in your order book? Because highlighting the RM delay or the Israel defense orders, which has impacted your revenue.

Is this orders also in the near terms expected to get a delay in execution?

I think to your this initial first question, we don't have any intercompany orders. Okay?

It is all from the customer orders, whatever we have today with us. All order books are from our customers, not from any intercompany.

Okay? Second thing is yes, I think What did you say next, second question?

RM delay which has impacted your revenue and the second is Israel defense orders. You have a order book such kind of a order books where you have already.

In the near terms, we may see execution challenges of your order book because of these?

Yes, yes. See, now today what happened, whatever revenue we missed in the Q4, now that has just moved into the Q1.

Some of the revenue has come into the Q1. Correct?

Where we'll be working. That way you'll be seeing some of the right shift, and probably once the issues get settled down, probably I think everything will come on track.

The last question on the margin, that's gross margin. Your gross margin, if I look at on the sequential basis, there is a contraction, and that's definitely because of the memory or the RM electronics availability and all.

How you are seeing this gross margin movement in the coming quarters or even in '27 considering such kind of a challenges to continue?

Sir, let me take this question. Gross margin no, it's not seen a huge movement.

A couple of basis point movement has happened. It's a reflection of product mix in terms of what we manufacture quarter-on-quarter.

It's not going to be uniform right through. That's point number one.

Point number two, there are also near-term factors of what the supply chain and the disruption and few things like that. It's a combination of both.

Hopefully, our target in the long run is to maintain the EBITDA, the double-digit level, and in terms of what we're doing. Okay?

That's what we do. There will be a bit of volatility between all of this for the reasons I said, but hopefully we've been able to manage and sustain the margin, and that's what we will aim for to do in the long run.

Thank you, sir, and all the best.

Thank you.

Hi. Thank you so much for the opportunity.

Sir, a two-part question. One, other expenses have significantly gone in this year, even the this quarter despite the year-on-year despite the significant drop in revenue.

Our other expenses have gone from 29 crore to 44 crore. Q3 was the same.

This is obviously hit our EBITDA margins quite significantly. What accounts for these other expense increases despite a severe degrowth in revenue?

In terms of other expenses, what you're seeing is a mix of both US and India operations all put together what you're seeing that, right? Moving forward, once we see the revenue growth, okay, these other expenses will have the operating leverage effect of it's going to be broadly fixed.

That's how, and we'll keep a tab on in terms of what we do with that part.

Sorry, sir. It's not clear at all.

Your voice was clear, but the answer is not clear.

What I'm saying is the other expenses is a mix of both the India and US operations put together, okay? As we move forward and when the volume picks up, this items specifically will have in terms of the fixed in nature, you will have the operating leverage impact.

What you're seeing is the volume as a percentage has gone up, okay? Hopefully, as we move forward, this will be under control.

Got it. Got it.

The second question is in Q3, I guess Krishna sir did speak about 25% year-on-year growth next year in FY27. If I just do rough numbers, again I'm not looking for exact numbers, we'll end up at around 1,600 crore revenue next year if we do a 25% growth roughly.

Our remaining order book would be 800 and year-on-year we'll add like quarter-on-quarter 500, 2,000. Are we really despite all other competition increasing their order books at 40% and similar spaces, right, defense, aerospace, industrial, medical, quite a few competitors are there, there seems to be some structural Is there a structural issue why we are not able to grow?

Altek acquisition didn't go according to plan when I say because you reversed the earnout, right? That tells that it was not according to expectations.

We're not growing our order books by 35%-40% like rest of the companies who cater to industrial, medical, aerospace, and defense, and not even considering consumer, right? Is there anything structural that you're seeing, a problems within the organization, or is there some industry issue, or is it a West Asia exposure issue?

Just not clear around the strategy of what we are paying for. The similar numbers, EBITDA double-digit, this margin, all that is taken, but it seems to be something missing in the entire jigsaw, which we as investors are not able to understand.

I think so it's a pretty good question from your side, really appreciate that. See, if you can look at it the investments what we have just made in terms of our sales teams.

We just started. I think we have few people on board.

As I said, we're still getting some more people in this quarter. I think those are the things which probably gives us a good order intake and also the new pipelines coming up to us.

There is no structural challenges, anything in organization because we are running the business in fact, several years. We have not seen any of those challenges.

It is predominantly having the right people there on the ground so that we can get the new orders and go to the new customers and acquire them. I think as you said about the both percentages, I think we'll be within that ballpark range for the next financial year for the FY27, and we are very confident on that one.

Just to add to what Rajendra said, I think we did have a challenge in order intake in FY25, and that's why we had to make some changes in the organization. That has translated to the order increase in FY26.

If you look at our order intake increase, you mentioned competition at 35%-40%, we are also at such percentage between FY25 and '26. Extrapolating that, yes, we did have a problem in '25 in order intake, which translated to obviously the revenue that you're seeing in '26.

The fact that we are at competition or even, I would argue, higher than competition in '26, will translate into a very strong FY27.

Thank you very much, and thanks everybody for joining today for this investor call. Obviously, we've talked about a lot, but I'll just say thank you for the very insightful questions, and thank you for also giving us some food for thought on where we should be looking at and what we should consider.

Like I said, it was a good start to the year given that we're coming off of a very, very strong order book. I'm confident that we will have a strong FY27.

Thank you for your support, and we'll again speak next quarter. Thank you.