Good afternoon, everyone. I would like to welcome the management and thank them for this opportunity.

We have with us today Mr. Aayush Shah, Director; Mr.

Chintan Shah, CFO; Mr. Dipak Dalwadi, Head of Gear Division; and Mr.

Kaushik Patel, Head of Material Handling Equipment Division. I shall now hand over the call to the management for their opening remarks.

Over to you, gentlemen.

Thank you, Abhishek. Good evening, everyone, and a very warm welcome to Elecon Engineering's Q4 and FY26 earnings conference call.

Joining me today are Mr. Dipak Dalwadi, Head of Gear Division; Mr.

Kaushik Patel, Head of MHE Division; and we would like to welcome our CFO, Mr. Chintan Shah, who joined us recently.

He brings nearly 19 years of experience, and we are confident that he will play an important role in driving Elecon's continued growth. The earnings press release and investor presentation have been uploaded to the stock exchanges and are also available on our website.

I trust that you have had the opportunity to review them. I will begin with a brief overview of the operating environment and our business performance, following which Chintan will take you through the detailed financials.

Elecon Engineering marks a significant milestone this year as we celebrate 75 years of engineering excellence, innovation, and strong customer partnerships. Over the decades, we have established ourselves as one of Asia's largest and leading providers of industrial gear solutions and material handling equipment, supported by deep domain expertise and strong technical capabilities.

Our Material Handling Equipment Division continues to build strong momentum and remains a key growth driver for the company. With a legacy of over seven decades, the division has developed specialized capabilities in designing and manufacturing large, complex, and high-capacity systems, including conveyors, port equipment, feeders, and other critical infrastructure.

These capabilities are limited to a select group of players in India, providing Elecon with a distinct competitive advantage. Serving core sectors such as power, steel, cement, ports, mining, and fertilizers, the MHE business consistently delivers customized high-value solutions that enhance operational efficiency and reliability for our customers.

In the Gear Division, Elecon continues to maintain a leadership position in India's organized industrial gear market. We offer a comprehensive and diversified portfolio, ranging from heavy-duty gearboxes to precision-engineered components, catering to industries such as steel, cement, sugar, power, and marine.

Our continued focus on research and development ensures that innovation, product customization, and end-to-end lifecycle support remain central to our offerings. With a strong domestic presence, an established distribution network, and long-standing customer relationships, Elecon is well-positioned to enter its next phase of growth and further strengthen its presence across key markets, both in India and internationally.

Moving to segment-wise performance, the Gear Division, which accounted for approximately 63% of consolidated revenue in Q4, reported revenue of ₹472 crores, reflecting a decline of 21% year-on-year. This was primarily due to delayed order inflows, extended dispatch timelines, and customer-led deferment of deliveries amid ongoing macroeconomic and geopolitical uncertainties.

While near-term performance was impacted by external factors, the underlying demand fundamentals remain intact. We expect a gradual normalization in timing difference for order flows and execution as market conditions stabilize.

During the year, we secured a healthy inflow of orders across key sectors, including power, steel, cement, and material handling equipment. As we are carrying a strong open order book for the next year, supported by a strengthening demand environment and a healthy project pipeline, we remain confident in Gear Division's ability to regain momentum and deliver improved performance going forward.

The MHE Division, which contributed approximately 37% of the consolidated revenue in Q4, continued its strong growth trajectory, posting a 37% year-on-year increase in revenue during the quarter. This performance was driven by sustained demand across core sectors such as power, cement, mining, and ports, along with consistent execution.

Looking ahead, we remain confident that the division will maintain its growth momentum, supported by a healthy order book, strong sectoral outlook, and continued customer engagement. Despite a challenging environment, we delivered moderate consolidated revenue growth of 6% in FY26.

The underlying fundamentals across both divisions remain strong. A robust order book and strong execution pipelines provide clear visibility for sustained growth in the coming financial year.

Elecon remains committed to its long-term growth strategy, with a clear focus on portfolio diversification, expansion into new sectors and geographies, and continuous strengthening of our engineering and execution capabilities. As part of our strategy to expand into international markets, we are pleased to announce the recent establishment of a step-down subsidiary in Mexico, further strengthening our presence in the Latin American region.

On the domestic front, core sectors are expected to continue driving sustained capital investments, and we are well-positioned to capitalize on these opportunities through our strong capabilities and market presence. Supported by strategic capital expenditure, strong in-house R&D, differentiated product offerings, and our proven ability to deliver customized, high-quality solutions, we are well-positioned to address the evolving and increasingly complex needs of our customers.

We believe the current challenges are transient and do not alter our long-term growth trajectory. With this, I now hand over the call to our CFO, Mr.

Chintan Shah, who will take you through the detailed financial performance for the quarter and full year FY26. Over to you, Chintan.

Thank you, Aayush. Let me give a quick walkthrough of the financial performance for Q4 and then for the full year FY26.

Financial performance, Q4 FY26: For the quarter ended March 2026, our consolidated revenue from operations stood at ₹746 crores compared to ₹798 crores in the corresponding quarter of the last year, reflecting a moderate year-on-year contraction. This quarter's performance was primarily impacted by slower conversion of the order pipeline to the revenue, in line with a broader industry trend of uneven execution cycles across all capital-intensive sectors.

Several customers across key end-user industries recalibrated their capex schedules, leading to a shift in the dispatch directions across the value chain. The underlying demand environment remains constructive.

Domestic market contributed almost 82% of the consolidated revenue, while international markets accounted for 18%. During the quarter, consolidated order inflow stood at ₹657 crores, registering a year-on-year growth of about 1.9%.

Consolidated EBITDA for the quarter stood at ₹158 crores, with a margin of 21.2%. Profitability was impacted by operating deleverage due to lower revenue conversion, marginally higher employee cost, along with the change in the product mix.

Net profit for the quarter came in at ₹108 crores, translating into a PAT margin of 14.5%. This excludes the one-time impairment of goodwill of ₹102 crores recognized as an exceptional item.

We expect margins to improve gradually as execution accelerates and volumes pick up. Now moving to performance for the year ended March 2026: For the full year FY26, adjusted consolidated revenue stood at ₹2,341 crores compared to ₹2,227 crores in FY25.

This excludes realized arbitration award of ₹25 crores recorded in the first quarter of FY26 in the MHE Division. Adjusted EBITDA for FY26 stood at ₹498 crores, with margins of 21.3%, remaining broadly stable despite near-term execution volatility.

Apart from arbitration award realized, as stated earlier, additionally ₹10 crores were recognized under other income as a part of arbitration settlement. Furthermore, this year also included exceptional gain of ₹80 crores below profit before tax, representing unrealized mark-to-market gain arising from the reclassification of investments, as well as impairment of goodwill.

Impairment of goodwill ₹102 crores recognized as an exceptional item. Including all exceptional and one-time items, reported PAT for FY26 stood at ₹341 crores.

Moving to segment-wise performance, starting with Gear Division: The Gear Division contributed 63% of consolidated revenue in Q4 FY26 and continues to be the largest contributor. Revenue for the quarter stood at ₹472 crores compared to ₹597 crores in Q4 FY25.

The performance reflects a temporary gap between the order booking and deferment of deliveries driven by the phasing of execution in large industrial projects. Importantly, demand fundamentals remain strong, supported by sustained customer engagement and a healthy inquiry pipeline across both domestic and overseas markets.

EBIT for the division stood at ₹91 crores versus ₹147 crores in the same period last year, with margins at about 19.3%. Margins were impacted by lower throughput and changes in the product mix.

However, these are transitional factors, and we are expecting the same to be normalized as execution improves. Order intake remained strong at ₹550 crores during the quarter, and the open order that we have is about ₹894 crores as of March 31, 2026.

This provides a good visibility for the coming quarter. As execution timelines normalize and macro conditions stabilize, we expect the Gear Division to return to its steady growth trajectory.

Moving to Material Handling Equipment Division: The MHE Division continued its strong growth momentum in Q4 FY26, reinforcing its role as a key growth driver. Revenue for the quarter increased to ₹274 crores from ₹200 crores in Q4 FY25, reflecting a robust growth of 36.8% year-on-year.

This performance was driven by sustained demand across sectors such as power, cement, and ports, supported by both replacement demand and ongoing industrial infrastructure investments. EBIT for the division stood at ₹62 crores compared to ₹59 crores in the corresponding quarter of the last year, reflecting stable profitability despite a dynamic revenue mix.

Margins remain healthy, supported by a balanced contribution from equipment sales and aftermarket services. Our inflow during the quarter stood at ₹107 crores, and the order book closed at ₹398 crores as of March 31, 2026.

This again provides a strong foundation for the continued growth. We continue to see the MHE Division as a structurally high-growth segment, supported by long-term trends in the industrial automation and increasing focus on material handling efficiency.

Moving to balance sheet and capital allocation: On the balance sheet front, we continue to maintain a strong financial position, with a net cash balance of approximately ₹700 crores. This provides a significant strategic flexibility to pursue growth opportunities while maintaining financial discipline.

The board has recommended a final dividend of 150%, that is ₹1.5 per equity share having a face value of ₹1 each. This is subject to shareholders' approval.

While our performance for the year was below initial expectations, this was primarily due to geopolitical uncertainties, an unfavorable product mix, and delays in customer-led deliveries. Given the continued macroeconomic uncertainty and limited near-term visibility, we believe it is prudent to adopt a cautious approach.

Accordingly, we are holding our guidance for FY27 at this stage, and we'll revisit our outlook once there is a greater clarity and stability in the operating environment. With that, we conclude the detailed financial review, and now open the floor for the questions.

Thank you.

Hello?

Thank you for the opportunity. My first question is the gear to MHE ratio was 63:37 for quarter four as against historical trend of 75:25.

Do we expect this as per the trend going forward and its impact in the EBITDA margin?

No, going forward, the EBITDA margins should not be affected. We still do expect further growth in the Material Handling Division going forward while the Gear Division grows as well.

The mix might change further, but we don't expect long-term the margins to vary.

Thank you. My second question is, can you give me the number of domestic and export split for gears and MHE

and engineered versus catalog mix for gears for quarter four? We couldn't hear you very clearly.

If you could repeat that, please.

Can you give me the domestic and export split for gears and MHE and engineered versus catalog mix for gears for quarter four?

The mix of the engineered versus catalog for the quarter is CP is 55, that is standard product, and engineered product is 45, that is customized product. For the year FY26, catalog product is 55% versus engineered product is 45%.

Okay. My last question is, what issue is MHE facing since order inflow for the quarter was at 10-quarter low?

Thank you. That's my last question.

It's a timing difference. In fact, we were expecting certain opportunity to be converted into order, but it has been deferred for Q1.

In fact, in month of April, we have already received almost more than ₹15 crore order. We are hoping that in April month itself, we can mitigate that gap of Q4 which has been generated.

Thank you.

Good evening, sir. Thank you so much for the opportunities.

Sir, we have a capex program of ₹400 crore. How much was spent in FY26?

If you could share what is the capex split between gear and MHE? I'm trying to understand on the ROCE part also.

I think ROCE fallen from 29% in FY24 to 20.4% in FY26. I'm trying to understand with higher capex and lower margins, whether we can able to bounce back to at least 25% kind of level by FY28?

Let me take the lead on this question. This is Chintan.

We have capex plan, as we just last quarter published, ₹400 crores between FY26 to FY28. We have roughly spent about ₹95 crores towards different, different categories.

Out of that, if you want to have a split, gear has almost 80% spent, and MHE has the rest of the spend. Coming back to your question on ROCE from FY24 to FY26, it's a valid question.

What I want to highlight right now is, as we grow, our base for equity and capital employed increases. If you look at the quality of the total capital that we employ, almost ₹800 crores of the balance that we have is parked into different form of investments.

Now we have a policy of investments where we are very conservative in the investments, and so the yield on the investment is about 8%. This is point number one.

Point number two, every year in last two years, we have generated average cash post-tax about ₹300-₹350 crores. Every year we have added the new cash on the capital employed, but to that extent our capex has not happened.

We have not increased our installed capacity by way of increasing the capex. As we move from this year and next two years, we will have our own capex, we will build the capability, increase the installed capacity, and we'll see the results in terms of the revenue increase and the EBITDA increase, improving the margins.

Having said that, this position of ₹750-₹800 crores that we have as an investment, it's a good problem to have it. That gives us the flexibility to remain open for our any strategic investments, as well as the expansion.

We are just closely monitoring the macroeconomic conditions and would like to continue with this same approach at least for some more time till the time we have the clarity on the expansion that we want to do.

Yes, sir. Sir, on the defense side, one of the Navy order impacted our margins.

How about the future RFP also pushed out like corvette by Q3 FY27 and IAC also in Q1 FY27? Whether we can able to win at least one or two orders, Navy orders, by FY27?

How long it will take to bid a larger defense contracts? We have qualified for upcoming Navy orders?

Yeah. I am Dipak here.

For this financial year, Q4 we are expecting very good order from the Indian Navy, and there is a big order at this moment.

Sir. Sir, on the follow-up on that, I think it's a initial order, we might have a lower margins.

Maybe in upcoming defense orders, whether we can expect higher margins levels?

As far as these are the project orders, margins are all actually good margins. For the small orders, of course there will be a margin gap, but for this kind of big project orders, there are a good margins.

Just to refine the answer, the first order that we executed, and as we discussed in our last call, since the first order has a lot of developmental initiatives and activities, we have a slightly lower margin, as we communicated last time, that 1% or 2% margin was lower. If we get the repeat order of the same grades that what we are talking about, then yes, the margins will be good.

In terms of timeline, it's almost two years timeline we see.

This kind of project orders are executed between two to three years.

Sir. Sir, my last questions, first thing about what is our current capacity utilization level in Q4?

Secondly, I'm trying to understand our pricing power. If we could rank your end markets—power, steel, cement, mining, defense, sugar, plastic, and rubber—by the pricing power side.

Where we have seen more competitive pricing pressure, and where we are getting higher margins?

As far capacity utilization is concerned, we are at this moment with addition of capex is around 56% to 60% utilization is there.

Yes, sir. The second one?

Hello? For answering your second questions, our engineering product has a better margin than the catalog product.

Definitely we are going for more the engineering products.

Sir. Thank you.

Yeah. Hi, sir.

Am I audible?

Thank you for the opportunity. My first question was, sir, on the revenue front, if we see, on the export side, for the quarter, we have largely maintained what was there in the same quarter last year.

When it comes to gears, especially the domestic gears, the revenues are down by 27%. Within gears, that too in a domestic geography, exactly where are we seeing such kind of delays in dispatches where customers are not ready to take up the delivery?

Can you please be a little specific in sharing your thoughts?

We have faced these issues where the customers asked us to defer deliveries specifically in the steel sector a little bit more. Another reason why also there was a reduction in the turnover is specifically because we got the order booking a little bit later because everyone was trying to defer their capex investments because of the current geopolitical scenario.

Hence, the order booking was late, it couldn't be executed within the year. We expect it to really improve in this quarter.

Got it. Okay.

This delay in orders, was it specific to any large order or it was broad-based within the steel sector you're talking about?

It was not for a specific large order. We saw it across the board.

Got it. Got it.

Secondly, sir, on this Mexico part, we are aware that the management was contemplating investing or setting up some assembly center even before the tariffs kicked in. Today what is the scenario?

Do we still attract 50% tariff or what kind of strategy are we seeing to cater that part of geography?

Right now in the USA, we have the 50% tariff whatever we are exporting from India to our subsidiaries in USA or to customers in USA. That is attractive 50% because of Section 232.

With establishment of this Mexico, we will serve the Latin America, and the tariff is not applicable there. We want to get the opportunity to establish and to supply our products from there to the Latin America.

Okay. Will we be investing or incurring any capex in Mexico?

Not much right now. We just established, we will come back to you after some time.

Sir. Sir, I understand—

Sure, thank you.

Hello. Thank you so much for the opportunity.

I just wanted an update on export side. As we had planned we would be ramping the export up to 50% in next three to four years, in current geopolitical scenario, what would be our export mix going forward, and how would be our sustainable margins till FY27-28 if we are focusing more on domestic or export

geography? This year, despite of the existing scenario, we have managed to maintain at least what we were able to perform last year.

We expect going forward it will still improve. We have some improvement in order booking in a few of our entities, while the Middle East obviously has suffered significantly.

We still expect, regardless of what the situation is, that we will be improving going forward. The EBITDA that you asked regarding the product mix and export versus domestic, we expect it to not affect us that much going forward.

What would be the sustainable margins which we would be focusing forward?

Right now, we can't comment on that specifically because of the current scenario, and it's currently an ever-changing scenario. We cannot comment on it right now.

We will assess the situation and get back once we have a better understanding.

One more thing I wanted to ask. Going forward, what kind of orders would be on gear side?

Is it customized gears or catalog gears are on a sale point for Elecon going? Since last couple of quarters, the mix has been majorly on catalog kind

of. Major it will be from power industry and steel industries and cement.

Major will be contribution for engineering and customized product. Catalog product, it will be 2%-3% lower than the engineering product.

Okay. What would be the margins in this industry in customized products we would be seeing?

See, typically we do not reveal the margin profile. We give a broad range in terms of how the product mix is moving and how it impacts our gross margin percentage.

Customer-level, product-level, and mixer margins, we do not provide our comments.

Thank you.

Two questions from my side. The first one is to Chintan.

On this goodwill side, there is a comment number 8B in the notes to accounts. If you can explain that comment, and also did we get any tax benefit from that goodwill write-off?

That's the first question. Second is to Mr.

Dalwadi, from the gear division side, or even in fact if Mr. Aayush can also throw some light.

You mentioned that because of the geopolitical risk there was some deferment of the order booking. Overall, if you look at the geopolitical risks that sort of rose only on the intervening night of 27-28 February.

Could one month make such a large difference?

Right. Let me take up the first question about the goodwill.

I think you're referring to note number 8.b. There's a detailed note in the notes to accounts which will comprehensively cover.

Let me explain to the entire large audience that we have. This goodwill represented the goodwill that we acquired way back in 2010-11 when Elecon did the acquisition of Benzlers and Radicon Group in the European region.

Now what happens is, over the last 15 years, Elecon has done an integration of all this business into the Elecon group of products and the geographies that we have it. We do not have any separate structure.

The single team—sales and marketing and the operations team—takes care of all the mix of the products that we have it. Eventually we realized that goodwill doesn't stand alone on this acquisition, do not have much value in our financials.

Of course, the business as a whole has the valuation which doesn't need to be discounted right now, but it has a good cash flow profitability and all. From a goodwill alone, standalone basis, we do not see that the carrying amount should continue like this.

That's the reason we did the impairment. Coming back to your sub-question about the tax deduction of this write-off that we have done, this goodwill was never into the standalone financials.

It was always a part of our consolidated financial statements. As far as tax deduction is concerned, it will be in the books of the entity where this goodwill used to rest in UK.

As far as the tax deduction in the local tax is concerned, there is a tax deduction which is being claimed every year, and probably now only five years have left with only $13 million dollar amount—$1 million dollar amount. It's going to be claim as a deduction in next five years' time gradually.

This is how the position is.

Okay. Understood.

If I got it right, you were asking about—

My question was that the geopolitical risks, the major part of it played out starting February 27-28, and that one month has probably made a fairly large difference on the overall revenue side. Was this largely to do with the month of March or this played out throughout the quarter?

Actually, as you rightly said, I think the news about this disruption started coming in the last week of February, and it got intensified in the first week of March. The largest impact is in the month of March.

About ₹77 crores of the orders were in a different buckets, like couple of orders of ₹12 crore rupees which were ready for dispatch, but it was on hold by the customer. We also had the order about ₹34 crores in the month of March which were scheduled to be delivered, but now it is to be delivered probably in April, and if the situation is clarified in itself in the April itself.

We also had a ₹31 crores of the order which were scheduled to be dispatched in the March, but their production was put on hold on immediate basis. That's how we had almost ₹70 crores impact for this event in the month of March.

If you look at your—I know where you're coming from—in the December quarter itself, we had lowered down our guidance, and we communicated that we are reducing the revenue in the quarter ending March by at least 5%. That's the guidance we already had released in the month of January when we were talking about December quarter and March quarter.

Okay. Just one last question on the receivable side.

That number has gone up from ₹610 crores to about ₹720 crores. Any particular reason for that?

If I look at versus September? There's an increase of about ₹90 crores compared to last year balance sheet if you look at it.

From ₹90 crores, ₹70 to ₹75 crores is largely because of the sale which has happened in the February and in the March, which has not due even as on 31st March. About 15-odd crores is overdue compared to the same bucket of the last year, which is getting realized in the month of April.

Understood. Thank you.

Yes, hi. Good afternoon.

Sir, in domestic gears, we did highlight the delays from steel sectors. If you can touch upon the various other sectors we cater to, from sugar, power, cement, how are things panning out there?

Because we see the order book kind of building up from ₹600 crores last year to ₹900, across sectors is the execution expected to be delayed, gradual? If you can just touch upon that.

Moving forward, the executions are not being delayed, because for the domestic, now there is a visibility, and we are having a good orders on hand and at the same time a good orders in the pipeline also. We anticipate that there won't be any delays in deliveries for the power sectors and for the cements and steel.

Steels also now expanding their all executions, and powers, of course, they are demanding the projects to be closed very fast. They all are demanding, I don't see any delays in delivery for the power sectors and cement steel sectors.

How about the cement, sugar?

Cement is stagnant as such, but even though we are getting the good orders from the two, three major contractors. Cement, they're more in the brownfield projects than the greenfield, they are moving at their own pace.

Sugar industry is now because of this we are anticipating good orders from the sugar, because now the gas and this petroleums we are facing, means we may face problem from this war situation. Ethanol will be now on the demand, we are also anticipating good demand from the sugar also.

Right, right. Sir, one on margins.

When you look at the mix, it's usually in 50s. This I think was a different year where we saw it at 45%.

One, if this goes back, why aren't we guiding that our margins will go back to the earlier numbers?

We will sustain the margins, but at this moment we are not—

Generally, when we calculate the margins, what we projected at the beginning of the year, we calculate based on the EP and CP is the 50-50% standard we consider. During the year, the orders we received in the catalog product because the delay from the customer side of the projects they have, catalog product orders we received much more than the engineered product in the beginning of the year and the second part of the year.

That's why that executes in the same year. The EP products orders we have in hand on the 31st March of 2026, it may be executed next year sometime.

Just to clarify what Shah is saying, we're not giving clear guidance, but we expect it to go up simply because of the current geopolitical scenario, and we don't know how it's going to pan out. If all the domestic orders go smoothly and what demand we are expecting comes in, you're right, we'll be able to go back to the EBITDA levels that we had suggested even earlier, which is close— Close to 22%

to 24%. 22% to 24%.

Correct, correct. Sir, last on capex.

We see—

Done. Okay.

Hi. Am I audible?

Thanks for the opportunity. First question, do we have any applications or order visibility from the nuclear side?

Sorry, from the—

Nuclear side,

please. No, we don't.

Okay. Secondly, you are mentioning that visibility is there in the domestic market, particularly from the steel and the power, and things are improving.

Then I'm not able to understand why are we not giving any clear guidance on that part, maybe on the growth side and as well as the margins front for FY27?

We have a strong order book, right?

We have our own learning in last two quarters where despite having order books, there were delay in the dispatch schedules and all. We have, based on that learning, decided to stay at least for few months till the time we have a clarity in the situation that we have.

The situation is quite fluid still at the moment. While we see that there's a possibility that everything will be smooth going forward, again, I believe yesterday or today we're seeing conflicting news and conflicting information.

This is the reason we want to keep a hold on that for right now. Once things clear out, we'll be able to give you a much clearer picture at appropriate time.

Got it. Because of all this scenario in Middle East, there must be some infra redevelopment requirement, right?

Do you people see any impact of that, like some new orders maybe coming in because of this infra redevelopment that will be required in Middle East?"

There is no doubt that there will be a strong requirement going forward once everything clears out. Which direction it is going in, we're still not sure based on how the outcomes go ahead.

While you're right, there is possibility for a significant uptake in orders from the Middle East, we can't guarantee that which way it's going to go until the war is concluded.

Got it. Regarding the defense orders, specifically that aircraft carrier that we were expecting in FY27, what is the current update on that, sir?

Yeah. The Coast Guard, shipyards already got the orders from the Indian Navy, anytime in the Q1 or Q1 they are going to release the RFP, and then we are expecting orders to come by Q4 of this financial year.

Okay.

It is getting delayed, right? Means earlier I think you mentioned Q2 of FY27.

Yeah. It is a little bit deferred from the defense.

Okay. What about the P17 Alpha, sir?

P17 Alpha also they have deferred, but it may come in the financial year of '28, around Q3, because even shipyards have not received the RFQ.

Got it. On and all, can we expect a marginal growth over FY26 or there can be a scenario of de-growth as well in FY27?

No, we're not expecting any de-growth to happen compared to FY26. We're expecting growth.

The amount of growth is currently what is under question, but otherwise we are expecting growth.

How confident are we on the margin front, like we will be able to at least maintain or grow it from here for FY27?

From FY26, we'll be able to definitely maintain or grow it. We are expecting growth, but the geopolitical situation will control it a little bit.

What we are anticipating, there is going to be an increase in some raw material costs or logistic costs, but we're already filling that in into our new orders, so that shouldn't affect us.

Any kind of supply chain issue are you people observing right now because of this Strait of Hormuz closure and all, that can further lead to some problems, maybe in the margins front or the execution of the order?

Generally, for our domestic orders, we don't see that happening. Only wherever there is something in the Middle East, we expect that to be affected.

Our overseas entity which is in the UAE itself, that one will be affected, but our other entities and domestically, we don't see it affecting us.

Got it, sir. Thank you very much, sir, and all the best for future.

Thank you.

Good evening, sir. Sir, my first question is on the inquiry pipeline which you indicated that we have a healthy inquiry pipeline.

Is it possible to quantify for both the segments, gear and the MHE?

Yeah. As on Q4 FY26, the open orders that we had for the Gear Division was about ₹894 crore rupees, and for the same period last year what we had was about ₹583 crores.

If I look at the MHE Division at that Q4 FY26 is roughly about ₹398 crores versus what we had in Q4 FY25 as at Q4 FY25 is ₹365 crores. That's how it's about totaling to about ₹1,292 crores of open order we have as on 31st March 2026, which is what we had as open order about ₹948 crores as at 31st March 2025.

Basically this only gives us the confidence in a lot of the questions that being raised right now in terms of how do we maintain the margins or revenue. This is on that.

Yeah. Sir,

I was referring to the inquiry pipeline which did not get converted, which got deferred because of the geopolitical reason.

Yeah. For MHE, yes, we have a good inquiry inflow.

If I'm quantifying, it is more than ₹1,000 crore. More than ₹1,000 crore inquiry we have right now for various sectors.

For the Gear Division, it is very good news for all of us that in the first week itself we are having whatever inquiry was in pipeline, going to be converted in the order in one or two days' time. We already got the LOI.

It's a very single largest big order ever got in the industrial gear business market. That is in few days you will get the good news.

Okay.

From the power sector.

Okay. Secondly, since the deferred revenue when you talk about, is it possible to quantify how much was that?

We are at the last leg, and we are having LOI right now. We would like to publish further details once the things materialize.

Okay. Sir, second question I had on the MHE.

If you look at the growth trajectory of MHE, I think it's been very, very strong in the last four to five years. This year, I think, obviously there's some moderation in terms of order inflow, and that we've seen in the order backlog as well.

What kind of growth one should estimate given the fact that power as a space is doing really great, thermal especially? From a estimation perspective, what kind of growth we should assume going ahead, let's say in the next two to three years?

Is it possible to quantify, sir?

As I mentioned that we have a good inquiry inflow for MHE business, definitely that power sector is going to help us to grow further. At this point of time, I can only assure you that whatever the growth trajectory we have shown in last two, three years, we definitely can continue with the same pace and this growth percentage.

All right, sir. All the very best to you.

Thank you.

Thank you.

Hello, sir. Thank you for the opportunity.

I have a couple of questions. Firstly, with respect to increase in prices of input costs, how did it pass on with respect to the order book business, because we would have taken the orders some time back, right?

In those cases, we would have already placed the orders or secured the prices for the raw material as soon as we received the order, because we were expecting this situation to take place. To safeguard us, we had already taken action as soon as we received the order.

Our execution cycle is also not long, it will be taken care. Whatever orders are on hand, we already placed the order, and we are executing.

Still even suppliers are not in the position to claim what is their need, actually. It is all for the pending orders is taken care.

Whatever inflation is there, that is taken care of already with respect to the order book. There will not be much impact in terms of margins for whatever existing business we have.

Is that the correct way to understand?

Yes.

Yes.

Okay. One more question with respect to our current order book, gear and MHE, can you tell what would be the segments where we have a sizable chunk, like top two, three segments?

Power—

Power,

steel, and cement. Power, steel, and

cement. These are the three main sectors we're seeing good demand.

Okay. Within this you're saying there's a slowdown or something with respect to steel, right?

Could you explain a bit on that?

There was a deferment of delivery that was requested from the customer end. The gearboxes were ready in that case, but we couldn't deliver it to the customer and we couldn't invoice it because of that.

There are a few cases where there was deferment, but it will be cleared in the Q1 and they will move

forward. Got it.

Thanks.

This is a usual phenomenon. It can happen, but specifically because of this geopolitical, it was affected even more.

Hello. Thank you for the opportunity.

Sir, you mentioned that in sugar, given the geopolitical issues related to the crude prices, we expect strong demand going forward and ordering trends going forward. Can you explain a little bit more, because what we are hearing from some other players is that there's excess capacity built in the country for ethanol.

How should one look at it? Thank you.

No, actually because of this war situation, only we anticipate that if it continues still further, then there will definitely lack of supply for the gases and the petroleum. That's why we anticipate that there will be demand for the ethanol, and we need to produce more and more ethanol.

That is all anticipation.

Understood. Thank you.

Yes, thank you so much, sir. Sir, this is particularly for the gear business margins.

As you provided the revenue mix for quarter four where catalog is 55 and engineered was 45, but, sir, if I look on YoY basis and compare with Q4 of last year, your catalog has actually come down from 60 to 55 and your engineered products has improved from 40 to 45%. I just do not understand why there is such a margin impact.

Also related question which you earlier alluded to in terms of developmental order from Navy which is been implemented and there is lower margin. What is the impact?

What is the size of order? What kind of this developmental orders are you referring to?

Is it something related to your P17 Alpha orders or if you can highlight on that? Sir, if we see your overall margins for the entire year for gear business, what we have reported in FY26, this margins are in fact lower than what you have reported in FY22.

In FY22, you were roughly at 20% margin, and which increased to 26% in FY24 and now has fallen to 18.8%. How do we see this going forward, sir?

Would really appreciate if you can provide perspective on this. Thank you.

Yeah. For your first question for the engineered product versus the catalog product, this year we had done the catalog product 55% and engineered product 45%.

We have a better margins in the engineered product, but this year we could not execute the orders or we could not dispatch the orders to the customers because of the customer's requirement. The margins are not reflecting in our financials because we have some inventory of the engineered product.

We have not invoiced during the quarter and during the year. Because of that, the margins has not improved this year against the last year.

What is this number, sir? How much of this orders?

Earlier you had mentioned ₹77 crores. Just want to reconfirm how much of this orders are pertaining to gear business and engineered products, sir?

Almost 60% of the open orders we have in the engineered product, but the inventory we have around ₹45 to ₹46 crores that includes the margin because we are valuating the inventory at the cost. Around 30% margins, 25% to 30% margins if we consider in the inventory when we are invoicing, so that is not reflecting in the financials.

Okay. Just to complete my earlier question on the five-year picture where your margins are lowest right now.

Ideally, sir, do you really expect that margins should revert to your mean level of 23%-24% now with your dispatches improving, you probably get a operating leverage with the revenue growth? In FY27, do you expect the margins to improve, sir?

If you compare with the FY22-23 because the India in the growth trajectory, the capex was going on and it is also going on, we were getting the good orders in the engineered product. That's why the margins was good that time.

Now we are also getting the orders in the engineered product, but that was not reflected in the invoicing this year, so that's why the margins is not reflecting. The second thing in R&D cost, because we are developing some new products, if you see our investor presentation, we have taken the four patents and we are applied for the three more patents.

We are also working on the R&D to develop new products and upgrade the existing products, we are also spending some cost there.

What is it pertaining to the developmental order, sir, what you referred to earlier? In earlier calls also, you had mentioned that there is a couple of percentage point margin impact due to some orders related to Navy.

If you can just clarify on this, sir?

For the Navy orders, we will come back to you. Sure.

Sir. Last question on the MHE margins, sir.

Now how do we see that sustainable, because now MHE margins you are adjusting the intersegmental numbers also, and after that you are providing the margins in the presentation. What is a sustainable margin for MHE?

Would it be at 22%-23% going forward, considering now that equipment contribution will increase and your spare parts may not grow in the same pattern as your equipment business?

Considering the revenue mix, as you mentioned, the sustainable margin around 20% to 22% in between.

Sir. Thank you so much.

Thank you.

Thank you all for taking the time to join our investor call today and for your continued trust and engagement. While the Gear Division experienced a temporary moderation in performance in FY26 due to execution timing factors, the underlying fundamentals of the business remain strong.

At the same time, the MHE Division continues to demonstrate consistent growth momentum and has delivered revenues ahead of the guidance set for the year, supported by robust demand across key sectors and a strong execution pipeline. With two well-established divisions, the business remains structurally balanced and is not reliant on a single segment for the overall performance.

Together, both the divisions position us well for sustained and resilient growth going forward. As previously communicated, we will not be providing forward-looking guidance for FY27.

However, our strategic priorities remain unchanged: focused on disciplined execution, operational efficiency, prudent capital allocation, and strengthening our presence in high-growth markets. Despite near-term challenges, we remain confident in our ability to take advantage of long-term growth prospects and to deliver long-term sustainable value to all stakeholders.

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

Thank you, and have a great evening.