Thank you, Swapna, and good morning everyone. On behalf of Axis Capital, I would like to welcome you all to the Q4 and full year FY '26 earnings concall of Kaynes Technology India Limited.

We have with us management today represented by Mrs. Savitha Ramesh, Chairperson; Mr.

Ramesh Kunhikannan, Executive Vice Chairman; Mr. Muthukumar Narayanaswamy, Managing Director.

Participants are requested to note that Mr. Jairam Sampath, Whole-time Director and Chief Financial Officer, would not be available for the call due to health concerns.

Now I'll hand over the floor to the management for the opening remarks, post which we will open the floor for Q&A. Thank you and over to you, sir.

Good morning everyone. On behalf of Kaynes Technology team, I would like to welcome everyone to the earnings call of Q4 FY '26.

Mrs. Savitha Ramesh, Chairperson of our board; our Managing Director, Dr.

Muthukumar Narayanaswamy; Mr. Sumit Verma from our investor relationships; and MUFG IR, our investor relations partners, are with us today.

Let me begin this with a brief overview of our financial performance for the consolidated year FY '26 period. Our total revenues stood at ₹3,620 ₹3,000 that is to say ₹3,626.4 crore, reflecting a year-on-year growth of 33.2%.

Our EBITDA for the period FY '26 was ₹5,741 million, registering a growth of 39.8% over the same period last year. This translates into an EBITDA margin of 15.8% for FY '26, while profit after tax came in at INR 3,639 million, representing a PAT margin of 10% for the year FY '26.

I am also pleased to share that during FY '26, our Mysore facility achieved a significant milestone by crossing INR 10,000 million in revenue. This achievement reflects not only the scale and maturity that the unit has attained over the years, but also strong customer confidence, execution capability, and manufacturing depth that Kaynes has built across its operations.

This quarter and the full year reflect a period of consolidation as we continue to strengthen execution capabilities and prepare the company for the next phase of growth. Over the last few quarters, our focus has remained on driving consistent improvement in top-line growth while maintaining healthy bottom-line margins.

That said, our near-term top-line performance did not fully meet market expectations, primarily due to—

Near-term top-line performance did not fully meet market expectations primarily due to geopolitical disruptions, especially the West Asia conflict, which led to last-minute customer deferments, supply chain delays, and project timings shift. Similar to the earlier Russia-Ukraine situation, these events created temporarily uncertainty in execution timelines, even though the underlying demand environment remains strong.

Since our revenue are closely linked to customer project readiness and approval cycles, some revenue recognition has shifted despite the orders remaining valid and executable. While these factors have had a temporary impact on near-term revenue timings, our strategic direction, customer engagement, and long-term growth roadmap remains firmly aligned, and Kaynes has continued to demonstrate resilience and execution strength through this period.

The company has not seen a structural deterioration in demand, order book quality, or customer relevance. Our order book remains healthy, diversified, and non-cancellable in nature, and we continue to see strong engagement across multiple strategic sectors.

Over the last few years, Kaynes has grown rapidly and in a relatively short period of time, that growth has created significant expectations from investors, customers, partners, and suppliers. We respect those expectations.

We are conscious that when a company scales at the pace we have scaled, execution has to mature equally fast. That journey of institutional strengthening is underway, and we remain fully committed to improving consistency, predictability, and delivery against the confidence placed in us.

There has been some top management restructuring and role realignment in this phase. Such transactions naturally take some time to settle, particularly in an organization that is expanding across multiple technologies, manufacturing, and strategic platform simultaneously.

However, these changes are intended to sharpen accountability, deepen execution ownership, and build a resilient operating architecture for the next phase of scale. The organization is adapting quickly, and the leadership team is fully aligned to match with the market expectations.

In core EMS as well, our diversification strategy continues to hold strong. As discussed in the earnings call, growth is increasingly broad-based across automotive, EV, industrial, aerospace, and railway-related segments, with lower dependence on any single business line.

This diversified vertical mix gives us confidence that near-term volatility is one area will not define the long-term trajectory of the company. I am pleased by the trajectory of our two new growth engines in OSAT.

Unit 1 is fully operational, and Unit 2 is in commercialization by Q2 '26. These businesses strengthen Kaynes further by deepening backward integration, adding technology depth, and expanding our presence in high-value manufacturing.

In OSAT, the order outlook for both the current year and the medium term remains strong, with revenue visibility of over INR 25,000 million over the next five years. Similarly, in PCB, we continue to see a robust and confirmed demand pipeline for the next five years, with several customers already indicating requirements for additional capacity expansion.

One important point that defers acknowledgment is that certain areas where markets expectations moved ahead of actual delivery were driven not only by execution facing, but also by the broader operational complexities associated with managing the core EMS business amid global uncertainties while simultaneously scaling new strategic platforms such as OSAT and PCB. Going forward, our focus remains clear: improving execution in EMS, moving towards product-driven revenues, ramping up PCB and OSAT with discipline, and delivering growth with stronger top-line and bottom-line growth and capital efficiencies.

We value the trust placed in us and recognize that credibility is built through consistent delivery. With that, I would like to hand over the call to Dr.

Muthukumar, Managing Director of Kaynes Technology. Over to you, Muthukumar.

Thank you, Mr. Ramesh.

Good morning, ladies and gentlemen, and thank you for taking time to join with us today. It's privilege to address all of you as we continue our journey of building Kaynes into a globally recognized technology-driven manufacturing enterprise.

Under the leadership and vision of our Executive Vice Chairman, Mr. Ramesh Kunhikannan has built a strong foundation of customer trust, execution excellence, and sustainable growth.

Over the last few quarters, the company has continued to deliver strong financial and operational performance supported by a healthy order book, increasing the customer engagement, and growing presence across all the high-value sectors. For Q4 FY '26, our total revenue stood at 12,426 million, reflecting a year-on-year growth of 26% for this quarter, and on overall for the year, we grown at 33%.

While the operational EBITDA for Q4 '26 came up to 1,937 million, translating it in EBITDA margin of 15.6%, reflecting our continued operational resilience and scale expansion. The profit after tax for the quarter stood at 912 million.

Our debt-to-equity ratio stood at approximately 0.2 in FY '26, reflecting a prudent discipline in capital structure even during the phase of significant expansion. Same time, our organization is able to give earning per share basic has grown from INR 30 in FY '24 to 54.9 in FY '26, reflecting the company's consistent growth trajectory and long-term value creation for our all stakeholders.

We realize our working capital days stood at around 122 days in FY '26, primarily reflecting the business model requirements of the smart meter segment, which has different working capital cycle when compared to the core EMS business. On a like-to-like basis, we would like to bring it to your attention that the core EMS business has demonstrated a significant improvement in the efficiency as committed earlier, with the working capital days reducing from 83 days in FY '24 to 53 days in FY '26.

We remain focused on further strengthening the operational efficiencies and improving project execution cycles and optimizing working capital as we continue to scale the business. One of the defining milestones in the journey has been the inauguration of the OSAT facility at Sanand by our honorable Prime Minister, Shri Narendra Modi.

This is not only the matter of pride for Kaynes, but also a strong validation of our company growing role in India semiconductor and electronic manufacturing ecosystem. What Kaynes has achieved in relatively a short span of time reflects the strength of our vision, execution capability, and the commitment to our teams across the organization.

As we enter the next phase of our evolution, our focus will continue to be on strengthening the foundation and scaling the organization with a greater speed, agility, innovation, and operational excellence. Kaynes today stands at a very important inflection point.

The industry is evolving rapidly, customer expectations are keeping more demanding, and our global manufacturing landscape is increasingly shifting towards high-value, technology-intensive solutions. The environment of our aspiration is not only to grow in scale, but also significantly enhance quality and value of our business.

One of our key strategic priorities in the next few years will be to accelerate the transition from a traditional EMS-led organization to a differentiated ESDM and product-driven enterprise. A critical pillar for this transformation will be centering our new product development capabilities.

We believe that innovation-led manufacturing will define our future of the industry, and our goal is to steadily increase the contribution of NPD-led and value-added solutions to nearly 30% of the total revenue in the coming years. To achieve this, we are investing on our engineering capability, customer co-development models, a digital infrastructure and an R&D infrastructure, and an integrated product realization platform that allows us to engage in the early phases of the customer product development.

This will not only improve the margins of the company, but also the customers' confidence and position Kaynes as a strategic technology partner and a original design manufacturing company rather than a manufacturing service provider. At the same time, operational excellence will remain at the core of our execution philosophy.

As we scale, consistency in quality, delivery, productivity, and reliability becomes even more critical. Our focus will therefore be on building deeply a process-driven organization powered by enterprise-wide digital systems, automation, and data-driven decision making.

Quality in particular will be defining theme for us going forward. As we all know that quality is no more a differentiator, a basic expectation.

What differentiates the companies now is the ability to deliver superior quality consistently with the speed at a competitive cost and reliability, and of course intelligence. With artificial intelligence coming in, we are introducing artificial intelligence in various processes to make sure that we are ahead of the market.

At Kaynes, we are committed to building a culture where quality is embedded into every process, every product, and every decision across the organization. We are also driving the company initiatives with Total Productive Maintenance, advanced quality systems, Industry 4.0 integration, and two of our plants have already done the kickoff and moving into the next phase of implementation.

These initiatives across the organization are not just about improving the manufacturing metrics. These are about creating a culture of ownership, discipline, continuous improvement, and a customer-centric across all our facilities.

As the manufacturing ecosystem become more competitive globally, automation and digital transformation will become essential enablers for long-term competitiveness. Our focus will therefore continue to be on improving productivity, reducing process variability, strengthening supply chain integration, and enhancing execution.

Another important strength Kaynes is a quality and diversity of experience we continue to bring in our leadership and governing structures. Our board today brings together an expertise across technology, finance, law, engineering, manufacturing, automotive, and electronic and strategic operations.

Leaders such as Mr. S.G.

Murali, who brings deep financial leadership experience, including his tenure as the Group CFO in TVS Motor Company; Mr. Koshy Alexander, who has extensive experience in finance and public sector electronics, including serving as Director Finance at Bharat Electronics Limited, brings significant strategic and operational depth in the organization; Ms.

Poornima Ranganath, with extensive legal and governance experience, the guiding philosophy principles in people development and in our legal framework; Dr. M.

Annadurai, with a deep experience from India space and technology missions, is joining our board, will strengthen us to take it to the next level of technological upgradation; Mr. Rajesh Mittal, with a strong expertise in engineering and automotive operations, is joining our board, and I am sure that it will strengthen our supply chain capabilities and penetrating and getting into the more into an automotive operation.

Their guidance along with addition of strong leadership in various functions in the Kaynes continues its journey towards becoming a stronger, a design-led, technology-focused, and a box-build solution company. Most importantly, none of this is possible without our people.

At Kaynes, we strongly believe that people define our strength and future of the organization. We'll continue to invest in leadership development, capability building, and creating opportunity for our team to innovate, grow, and lead.

At the same time, we are consciously building a strong pipeline of future leaders who can carry forward their values, culture, and long-term vision of the organization as we continue to scale in the Viksit Bharat era. Our focus remains very clear: a customer focus, innovation and quality, and people.

These four pillars continues to guide our Kaynes journey as we build Kaynes into a world-class manufacturing organization that will be the new benchmark for the industry. With this commitment from our teams, the trust from our customers, and strength of our strategic direction, I am confident that Kaynes will continue to play a defining role in shaping the future of Indian manufacturing in the global stage.

With this, I complete my initial remarks and would like to thank Axis Capital for hosting this earning call. Would also like to thank all the participants for joining us today, and I'll hand it over to Axis Capital and looking forward to answer your queries.

Once again, thank you very much for joining, taking time to join this call. Over to you, Axis Capital team.

Yes, please.

Yes, thank you for the opportunity, sir. My first question is on guidance, sir.

At the start of the year, sir, we had guided that we are looking to close the year with revenues of ₹4,500 crore, which was subsequently toned down to ₹4,000 crore, and we end the year with close to ₹3,600 crore of revenue, sir. Sir, how should, as investors, we look at this guidance, and what is the sanctity of the guidance that we are providing, sir?

Because there is a very vast variance between what was expected versus what is delivered, sir.

Thank you very much for asking this question. We fully understand and appreciate your question.

We did an aggressive top-line growth in the year based on the order book, and we thought the electrification of the vehicle and, of course, the government projects where we were working is going to be at the fast pace. Giving a guidance of ₹4,500 crore is almost 55% growth over the previous year.

In the third quarter, I think we have toned down saying about ₹4,000 because of the few delays, and one of the largest electric vehicle OEM manufacturers has completely dropped by about 90% of their revenue wherein we were the single supplier which has dropped our numbers. We were quite confident in the last quarter of getting two government orders where the products have been done and the product testings have been approved is going to be done, but there is a delayed project.

I think these are the two things that has put us. While we have delivered about 33% growth in revenue and 39% growth in the bottom line, we sincerely understand and appreciate that the guidance what we have given, we could not meet.

Having said that, I think while we are looking at strengthening our execution capability, agility in manufacturing, and delivering the product on time, there are certain cases where it's beyond our situation where the customer pull and the drive which makes us to hit the numbers. That is one of the reason that why we chose to say this time that we will be outgrowing the market, and we will be doubling the market growth so that our penetration will be much more.

Hope you have answered your question, but we fully understand and we are aware of the questions what you're asking and the implications of that.

Sir, I appreciate this answer. Sir, 75 days into the quarter, we would be aware of how the quarter would be looking like.

The management comes on the television and holds on to the guidance. Additionally, even apart from the P&L side, the guidance was also that we would be just about marginal negative on the OCF side, sir.

Sir, both of this guidance, 75 days into the quarter, is actually a bit concerning when the actual numbers reported would be way off. Sir, how do you look at that, sir?

I think the intent behind committing those numbers in the last quarter stating that is, based on the product sample that has been approved, we went ahead and started our [unclear]— [Automated message] Hello, sorry for the interruption. Can you hear me well?

Yes, sir.

See what happened is while we have got the indications of an LOI from the customer, we started ordering the materials. In fact, if you ask us, we have started even the pre-manufacturing activities of this, which gave us a confidence that yes, we will be able to deliver.

If you see, more than 50% of the manufacturing of those activities also has been on the pipeline. As you said, it is not a denied order, it is a delayed order.

We sincerely apologize for that this has happened, but I'm sure that you will all trust with me that it is beyond our control. Going forward, we will take this input in terms of committing for the future numbers.

We are committing for our growth based on what market can pull in, and one of the reason that you will see that going forward, we will be better is when our Executive Vice Chairman said, our dependency on every vertical, we are bringing it down. We are taking into many other vertical so that the impact on one business will not have an overall impact, but we will definitely keep this in mind and make sure that in future, we will be better prepared for mitigating this risk.

Fair enough, your ans—

Our type of business, we also depend on customer inspection, accepting it. I hope you all appreciate that.

Sure, sure. Sir, this is a fair enough point for the P&L side of view, but sir, OCF ₹600 crore of negative, I think that is a bigger disappointment, especially when you kind of guide that you will be just about neutral or slightly negative, sir.

You would have known that,

and

sir, why have we not been able to turn that around, sir?

I think it's a fair question. The operation cash flow, I think there was a little maybe misunderstanding.

I was also in the call during that time. The two cash flow that we are talking as a standalone EMS business, I wanted to bring it to all your notice that on a standalone EMS business, our cash flow was ₹250 crore positive when compared to ₹65 crore last year.

However, as a consolidation entry, 65% of our revenue today comes from EMS business where we are cash flow positive. The metering business, which is a specific model, this is the first full year we have taken and we are getting matured into this business.

One of the things that happened is this business model is a strategic acquisition for Kaynes in order to make ourselves getting matured towards the product-based company rather than an EMS assembly company. I just want to bring it to all your notice that prior to acquiring metering company, we have been supplying them the EMS business.

The entire revenue is not new to us, almost 50% of the revenue as an EMS business we have been supplying there. This an unique acquisition where it is not only making the meter, but also installing the meter and also maintaining the operation maintenance of providing the software.

We are the only company which has got a unique combination of all the three, and that's the reason for why Kaynes has committed and moved into this acquisition, which has definitely brought back the good amount of insights on product development as converting ourselves Kaynes into a product company and putting as maturing into launching no more new products in that segment like whether it could be a water meter or gas meter, we are on the pipeline. Having said that, we should have anticipated this well.

There were a lot of government delays and the payment terms based on the installation. With various activities that the various state governments releasing the tender for supplying the meter, installing the meter, going to those houses and installing, there was a little delay.

I would request you all to appreciate that as a standalone Kaynes EMS business, our net working capital has come from 64 days to 54 days. However, the total number has gone up because of this.

65% of our revenue comes from EMS business where our receivables is only 35%, whereas 25% of the business comes from EMS where the receivables is 67%. We have worked out a strategy as a management team on how to mitigate this.

We've been working with various organization to see that how this business model can be mitigated. Rest assured, ladies and gentlemen, we'll be able to bring it back at least to a level of reduction.

I think the inflex point has stopped, and we'll come into the reduction, and we will come back in three quarters with a positive results on specifically this entity. On EMS business, we have demonstrated our ability of how to bring back the working net days by both working on supplier side and also on the customer side and brought it back.

The numbers are available in this. I think you can see from our opening receivables of about ₹399 crore in the EMS business by end of the year, sorry, ₹379 crore, but the end of the year we have come to ₹399 crore.

Even though we grown the EMS business at 30%, our outstanding or receivables has gone up only by ₹20 crore, which clearly shows how we could able to manage this business efficiently. Ladies and gentlemen, trust us, in the years to come, we will manage the metering business and demonstrate our ability to manage the product development, which is going to be a strategic shift in the Kaynes organization from moving an EMS provider to a product provider, and at the same time manage this working capital cash flows efficiently.

Added to that, if you all recollect, we were very clear, our main EMS business, we will be cash flow positive this year, whereas the entire company, we will not be able to do that. Please appreciate we have done and honored what we have said.

From ₹65 crore, I want to bring it to your attention of a cash flow positive of EMS business from last year, we have migrated to ₹250 crore plus, which is a significant improvement in an year where there were a lot of uncertainties, including the escalations at one end, supply chain disruption in the last quarter, and of course customer pulling of the material. Our customers and suppliers have really supported Kaynes initiative in taking this commitment and moving forward.

Hi, just I think the call is all over the place. Going forward, given I think we are not giving guidance in the same business when you articulated it's a customer-driven business, and when you're saying demand is very good, what is stopping you of giving you the guidance?

Is it you see more deterioration in working capital, which will erode the revenue growth from here on also? We are very confused.

If you can throw some light how the direction of revenue and working capital improvement will happen, because it has not happened so far. You're not giving any guidance, it's very confusing for the investors because if you can throw on three aspects of both revenue and working capital.

Okay. Thanks for asking this and giving us an opportunity to explain our position.

It is not that we are not giving an guidance for the revenue. We are not only giving guidance for the revenue numbers.

When we are saying that the industry in India, the GDP growth is at 8%, the EMS space where we are playing has grown at about 18% last year or is expected to grow in this year 16% to 18%, we say we'll outgrow the market, we'll penetrate into each and every segment, and we'll double the growth of market growth. This is what the commitment that we have done.

I'm sure that we will be able to do that, but exactly we don't want to put the number because see, for example, the December projection of automotive industry was a mid double-digit growth for this year, whereas the latest prediction says it will be a single-digit higher or lower double-digit, which may impact onto the offtake of the product. While we are trying to mitigate it by getting into the various verticals like, in fact, we are going to be getting into defense in full swing and, of course, space business is another thing, but at the same time we want to be a little cautious because the market is in a highly volatile condition, nothing to do with us.

Our ability to deliver, our capacity and capabilities is always available. We are committing a doubling the growth of market growth, which we will be definitely coming back in every quarter to say that how the market has grown and how we have grown.

You can rest assured that Kaynes will continue to focus on delivery efficiency and meeting the customer demands and, of course, making the investors calculation. Sorry if we have made you to put it in a confusing state by not giving the exact number.

Having given the exact number, we find that there are a lot of uncertainties which is beyond our control, and rather than coming and telling apologetically saying that it is because of this reason, we don't want to be providing a reason, but we wanted to be a solution provider in this. That is on the first revenue.

In terms of working capital management, we will continue to be efficient on this area. You can rest assured that Kaynes standalone, the EMS business, will continue to be cash positive, and we'll be improving it at least by about 8 to 10 days in the years to come in this segment.

Having said that, the metering business, which is a completed a full year, we started the metering business which about ₹521 crore sorry, ₹231 crore one minute, sorry. The receivables of ₹521 crore to ₹1,300 crore, we are putting our execution team to go and install it in every area.

We will reverse the trend. That's what we can say.

We have a very clear roadmap of bringing it back in three quarters to track in this metering business also. We are also working out the current business models, I'm sure that most of you are aware, the business model of metering business is completely different from the EMS business.

These are all some of the things. The positive thing is getting into the product, a new technology, and of course expanded margin product, and the other side is on the working capital management.

Rest assured that Kaynes management has got the capability, and we will ensure that we reverse the trend in these quarters. Quarter after quarter, you will see within three quarters of this year, we have a very clear strategy on how we are going to come out of this cash flow issue in the metering business.

Ladies and gentlemen, at this point of time, we want to bring it to your notice the working capital management will not have any impact on our growth trajectory or in terms of our execution capability. Our order books continues to be stronger at ₹9,000 crore plus.

What we have been talking about in executing the new product in 12 months to 18 months, today our ability to launch the product in 9 months, a full product has come because of the acquisition of new technology and new teams that we have got a product technology things. You will be able to see and you will be able to hear in more and more of our products launch in the electric vehicles space, in every spectrum that we are going to work in, wherein you will see that it gives an ability to launch the product and, of course, improve the margins.

We are also committing 30% of our revenue in the years to come will come from the new products, which means it gives us an opportunity to leverage our technological excellence at the same time getting into a better product standardization of the product to bring working capital management and, of course, expanding the margins. Our idea was not to give a guidance.

What we are trying to tell is we will better our growth of this year next year. We do not want to attach a number to that.

That is the only conclusion. I hope I have clarified this.

Sir, I don't want a number. The question was more what will change suddenly which will get your ₹600 crore negative cash to breakeven?

Business remains the same, even Escorts moves out, which I think you have two more quarters to go, correct me if I'm wrong. Rest of the business is not negative working capital.

What will take this ₹600 crore was the question.

The ₹600 crore by end of the third quarter will come to around

we will try to work on to positive, but we will at least 70% to 80% of this will come down for sure, and by end of the year, we will be positive.

We have a very clear strategy quarter-on-quarter. I'm sure that the next earnings call when we are going to be together, because it's almost 45 days have gone in this quarter and the team is working on to put this into effect.

Thank you very much, sir. Thanks.

We took little bit time on this business because more of a product is what we were focusing, and we didn't anticipate this much of delay in the execution of the erection commissioning.

Hi. Good morning, team.

A few questions from my side. First, if you can help quantify what was the share of metering-related revenues in our consol revenues for fiscal '26 versus '25, and how does the growth look ex-metering portfolio?

That's first question. How are we scaling up in terms of new applications on the power supplies and other aspects, including EVs within the industrial business?

Third is if you can share updates in terms of ramp-up of the rail portfolio with respect to Kavach solutions, and do we see any headwinds on government offtake given that government finances this year are likely to be under stress? If you answer these questions, then I have two questions.

I'll come back.

Thank you very much for listing it out. I will answer the first two questions.

One is of the metering business. The metering business contribution to our total revenue is around 20% to 25%, okay?

Having said that, it is not that the entire 25% of the revenue has come because of the metering business. I'm sure that you'll all be able to recollect that we have been supplying the components and the PCBs for this metering business, which is around 60% of the revenue has already been coming.

That's why when people say, "Oh, your growth is it only because of metering business?" 60% of this is our EMS business which we have done, and we have added the box build, software, and O&M business onto this.

The growth is like that in that business. The second question which you asked is, yes, the company is now launching the product for EV segment, and you can see our growth in the EV segment this year is about 28% growth, despite the fact that one of our largest customers in two-wheelers has dropped the production significantly by about 90%.

That means had that been in full, our penetration would have been much higher. This is one segment which is growing, which is continue to grow, and rather than supplying only PCB, we'll start working on the assemblies and products, which will make our value additions much higher.

Every segment, as we said, we are going to diversify to make sure that our impact because of one business will not be there. Having talked about the first two of your questions, I will leave it to our Executive Vice Chairman to talk about our progress what we are doing in railway business.

Regarding the rail business, our Kavach product has received the initial approvals, and we have got the trial orders. We are in the execution stage.

We have done field survey and everything. We are expecting this year in the first half to complete all approvals, and the second half to get large portion of orders.

Execution-wise, yes, we will have opening order in a big number, but a small portion will be out of that completed. This is the status as far as Kavach is concerned.

We are developing one another two more products for the global requirement for one of the OEMs in the rail sector. Rail business, I am expecting this year to grow by around 20%, 25% because of this coming in.

The margins are going to be north of current 30% plus. I hope I have answered this.

Hi. Thanks for taking my question.

First thing is if you can share details about your metering subsidiary, what was the revenue for the full year, EBITDA, and what is the total receivable in this subsidiary?

You are asking about the metering subsidiary?

Yes.

Hello, can you repeat the question?

Sorry, can you repeat the question?

The metering subsidiary, what is the revenue, EBITDA, and receivables at the end of the year for the full year?

Metering subsidiary, yeah. Sir, as far as the metering subsidiary is concerned, out of the total ₹3,626 crore, the metering We normally don't Okay, it's a subsidiary coming in.

It's about ₹971 crore is a metering subsidiary revenue.

Receivables?

Which is 24% to 25%.

Pardon?

The metering revenue is at ₹971 crore out of the total ₹3,626 crore revenue.

How much is the receivables in this?

On the receivables of the metering business is about ₹1,365 crore including the in the total revenue the receivables on this business. It is more than that because the first two quarters of this year, we could not able to execute the while the metering we have supplied, the installation got hugely delayed particularly in the rural towns where the government has given business.

Our pickup has happened only in the last quarter where our installation is going. It's going to take about one or two quarters for us to complete the installation.

That is why I have committed that it will take up to the third quarter for us to complete it. I'm sure that this is not only with us, it's a overall the ecosystem of this is creating a problem.

We have created a pipeline of team and pipeline of equipment to make sure that these installations takes place on time. The availability of the location is a concern.

Sir, just a clarification in this. If I'm correct, last quarter concall, you mentioned that metering subsidiary receivable was somewhere around ₹1,100-odd crore and you are supposed to receive ₹250-odd crore by securitization itself, whereas when we are seeing now, it has gone up.

If you can help me understand was there any securitization done? If not, why not, because you have committed that it is almost done during the last concall?

Secondly, what has led to this kind of increase in receivables on the year-end basis?

See, this securitization, we have just started with one bank, and the first lot where the installation is completed, banks has started accepting it. Bank would like to have the first month's complete billing and realization.

We have the sanctions, everything, but we have only discounted to around ₹40 crore or so. Because,

sir, I think this exactly same commentary was there last quarter concall, there is no progress in this quarter at all in this?

No, no. Apart from last time, this quarter again we have discounted some ₹40 crore extra.

See, the installation and audit report, after that securitization takes place and they are willing to disperse the money. Our key challenges on the installation now, which is what we are working with the various organization, Public Sector Enterprises, and the end customers and the respective Genco or Discom to see that how we can speed it up.

We understand your concern of why the revenue was in the last quarter ₹380 crore. We almost added this as this is basically because of the delay and on the installation.

Sir, just wanted a better clarity in this business going forward. Are we going to continue to execute this kind of revenue with this kind of working capital?

If not, then what is the factors which are giving you confidence that you will be able to reduce your working capital in this business? If you can quantify something with concrete steps, it will be helpful for us to understand.

No,

no, no. In the past, we have already agreed we are not going to take any orders like this.

We are only going to take meter orders, and we will be supplying to the project teams who are taken up orders for the entire execution like this. Further it will be our EMS component only we'll be taking order.

See, the current business what we are taken is about 35 lakh—

Two quarters we have to complete.

Yeah, 35 lakh meters is what we have taken, which is the order that is being executed and all. Ladies and gentlemen, while I fully understand working capital is one of the key concern and we are working on, this has brought in lot of other strategic advantage to the organization in terms of our product development capability, a software capability which no other EMS business has, and on top of this, our ability to execute the projects like this.

I think these are the strengths going forward is going to come us, and you all know that this comes with a better margin than the standard EMS product. The companies when it's going to migrate from a service provider to a product company, you know the benefits of this.

When we are going to be in a B2C, our brand is going to get strengthened, the people are going to look for our brand, and as I said, it's going to have a lot of strategic advantage. Having said that, you can rest assured that we will come back with a quarterly progress on this and see how Last year, yes, every four quarters, we have added up the number almost more than 50% of the revenue that has come.

Now that we have created an ecosystem of our ability to install the meters at the location, we will get into this. You also know that when we are doing it with the Public Sector Enterprises and doing this, it's taking little more time than in normally an Tier 1 OEM or other business.

Having understood this business, we are pretty confident we are going to come, and like our Executive Vice Chairman said, we will also be cautious of taking such a huge business of 35, 40 lakhs on rather than on this model to only just supplying a metering supplies and giving it to an SPV companies where they will do the installation, erection, commissioning. Hope that answers your question, but it is a very, very valid question.

Good morning. I have two questions.

Firstly, this 35 lakh-odd meters is broadly a ₹1,400-odd crore order. How many meters or if you can give some quantum in terms of how many meters are pending from this order?

Secondly, like you highlighted, the smart meter business this year did roughly ₹971-odd crore of top-line, that implies that still there is another contribution of ₹740-odd crore from subsidiaries. What is the breakup of that, if you can help us understand?

Okay. Sir, in terms of the metering, we will take another two to three months to complete the entire pending order of this, and which is what we are also putting into our calculation to see— There is also a small extension of this order as per the condition.

It may or may not come, that is another 3.5 to 4 lakhs. That is why we are pretty confident in three quarters from now, we'll be able to finish off this and the new businesses will be in a different model.

That is on the metering business. The other subsidiary which is very prominent is the KEMPL, which is exactly the EMS business only.

We are considering this in EMS business, and their almost If you see our EMS receivables, the start of the year, we started with ₹379 crore. The EMS revenue, I'll just talk about it.

The EMS revenue is about ₹2,655 crore, with ₹442 crore in the quarter one, ₹683 in quarter two, ₹667 in quarter three, and ₹862 in quarter four. We started the year with ₹379 crore of receivables, and we ended up the year with we we went up.

We went up to ₹466 in the quarter two and ₹437 in the quarter three, and we brought it down to ₹399 in the quarter four, which sees that we have exceeded only by ₹20 crore for a revenue growth of about 26%, which means our prudent management of receivables and our shorter lead time. See, basically it is about how fast you can manufacture, and ship it out of the plant, and ensure that it gets into the factory and start consumed by the customer.

Out of the ₹2,655 crore, for your other question, one is Executive Vice Chairman answered KEMPL, there are two foreign entities which put together on an average about ₹300 crore revenue. They are also EMS company in the North America and Canada.

Understood.

Thank you. Thank you very much for giving us an opportunity to clarify this question.

I fully understand your concerns on this, but the business model of the metering business is completely different from the EMS space. While it is putting a stress onto the working capital management, ladies and gentlemen, believe us, it gives us an enormous ability to do the product development launch at the time not only with the product development, but building our capability in erection, commissioning on these type of projects, and of course the software, which is going to really help us not only for this contract, but beyond this contract, the money is going to come back for a long term for us till the meter is up and running.

Hi sir. Thank you for the opportunity.

Sorry to harp on it again and again on smart meter business, but the communication from your side seems to be very off since last two, three quarters on smart meter business and has created a lot of confusion. If you see, your commentary has been that this year smart meter business FY '26 would be ₹800 crore, but it has come at almost ₹1,000 crore.

Going forward, you will not be taking AMISP business, and hence receivables, which is current but not due, standing in other current assets or non-current assets, which is around ₹250 crore, will come down. That has not also done.

In fact, revenue has increased, receivables have increased. In FY '27, I would like to know that from AMISP model how much will be revenue and incremental other current assets but not due, what will be the situation over there?

Okay. Sir, I just wanted to let you know while we were at ₹800 crore, when we got an opportunity to offset some of the business that there was a delay in automotive business or there is delay in something, we grabbed every opportunity, and that is why we are grown in this.

For the next year, while the ₹971 crore of sales what we did this year in absolute numbers, we may remain same or slightly up or down, that's not a question, but almost 50% of the business will be in the old model and rest will come in the new model. As Executive Vice Chairman said, we have to finish some more, and there is a contract clause that if the government is going to ask for more, we may have to continue to supply.

We will be definitely taking prudent, but rest assured, we have worked out this business model for this year. We will in next investor call, we will just make sure that we start a presentation with this for first five minutes or something and giving the numbers to make sure that we completely keep you all in transparency on how the business is going and how we are going to collect it.

We are also working out on a couple of more strategies to make sure that how the non-current assets what we are talking about which is sitting for a long time, how we are going to mitigate that risk and at least get 50% immediately. We will get back to you in the days to come on this specific project.

Rest assured that this is on top of our agenda and top of our working to make sure that how we can reverse this and then get back into towards the positive cash flow. Like we have told, our EMS will improve, and we have improved the working capital.

Sorry, just one more thing.

Please.

Just one more thing on receivables. You mentioned that subsidiary is ₹1,365 crore.

How much will be this long-term and short-term?

I think you already estimated about ₹250 crore is a non-current assets. I think that will be there, rest all will be current.

I think our ability to now do the installation is going to be the key. There are four states where our team is working, and it is taking extremely high time, more than six zones.

Six zones we are working on this. We are working on this.

We have put enough infrastructure and team to do this, and we now got a clearance from them to do the almost from morning 6:00 to night 12:00. I think our team is putting efforts, and we'll speed up this process.

We have been traditionally a manufacturing company, we worked on improving the efficiency and productivity of the plant, and we really understand the new model of how it takes time to do the installation at every site locations or every house.

Hi, sir. In balance sheet, the intangible asset in FY '25 was 238, and in FY '26 it is 536.

What was the ₹300 crore increase, what was the key reason for that?

I think if you go back to the two quarters before, we did the two acquisitions. One is in Iskraemeco and second is August Electronics, which is in Canada and supplying in this EMS space to the big players in the North America.

The intangible asset that has been capitalized from these two is about ₹320 crore, and there was a clear things and what is the order book and it's based on the current accounting standards, and we did ₹320 crore. For all of your information, even though you are not asked for this question now, I think we are committed that how we are going to do the amortization of this.

Our policy was once in a year, in the last quarter, we amortized these intangible assets, and that has added to our depreciation and amortization to a level of about ₹32 crore. That is why the PAT in the last quarter has come down, PBT, but believe that the full year was around 10%.

Going forward, I think we'll be doing this amortization on every quarter. This is basically from the order book and other assets that's available from acquisitions of Iskraemeco and August Electronics.

Yes, thank you very much. Apart from the smart metering business, I think everyone's trying to get their arms around guidance.

Mr. Muthukumar, you were on TV talking about 2x of EMS growth.

I wanted to get a sense of when do you get to expect to get to that double the market rate? Is it from starting now, or is it going to be the third quarter is what you're referring to?

Would that include OSAT and PCB as well to get to that sort of double rate, or is that just a pure EMS business? Then I have a follow-up.

Okay. Sir, in the 2x growth, I think we have launched the three products and which is already in production, now SOP is started.

We will be continue to penetrate into every customer, and you know when the automotive business is growing at around 30%, share of business is the key driver for this business, and we'll continue to focus on not only introducing the new product, but also expanding our share in the business. That is why we are confidently telling we are getting into this.

The aerospace business is another one where we are substantially growing last year, and we continue to grow in this year. Like Executive Vice Chairman said, railways is another course.

See, as I said in the earlier or to some of you even when we are talking, the industry is growing at 6.5% to 7% in India, that our market space is growing at around 15% to 16%, and we'll be doubling the growth. Being into the Middle East war even in the last quarter, we have performed much, much better, and our supply chain agility was good.

Our strategic stocking has really helped us in this. We will be doing the double 2x growth from the start.

When I say 2x growth is not the 2x growth of our last quarter comparison, but on the market growth and our growth. I just want to make myself clear.

If the market is going to grow at 15% and we are doubling, and then you are there at the numbers.

Right.

That— On OSAT and PCB, I'm sorry, I missed the question. See, OSAT and PCB, ours is a very, very strategic product.

We are also evaluating how much of that is going to be consumed internally and how much we are going to give it outside. For all the product that we are making where we are making a design specific and where we are going to offering as a solutions to the Kaynes products, we may be using our own products because of the technological advantage and the competitiveness.

At the same time, we'll continue to focus in the end customer. There is a pipeline of customers that's coming in, and you know the OSAT ecosystems and PCB systems.

We are strategizing it out, but at the end of the year, yes, the overall growth from those segments, we can see that either it will expand in bottom line or on the top line depending on how we strategize to use the product through our own product by expanding the margin or selling it to other customers. It'll be a strategic call, and it'll be moving forward.

It'll be an integrated business.

Thank you for the opportunity. Just extending the previous question—

Better? Sorry for that.

Am I audible?

Yes. Sir, just to extend the previous question, if you could talk from a production value perspective, the earlier guidance was ₹1,000 crore for OSAT, ₹500 crore for PCB.

Does that stay intact or is there any risk to that number? That's my first question.

We have not given any guidance like this. This is our first year.

I'm sure and certain we will do a good number of PCB of around 300 to 400, and OSAT of around 250 to 300.

How much of that we are going to consume locally, how much of them we are going to sell outside is a strategy that's being worked out, and we'll be communicating to you at an appropriate time to all of you.

OSAT business and all locally there will be nothing to start with. It will be always in export mode only.

All right.

Thank you very much, ladies and gentlemen. I think we appreciate really the opportunity that is given to us to explain about our initiatives and some of the concerns that you had.

We hope that we have answered most of your queries. If anyone of you have any queries, please do reach us to our investor relations, and we are here to serve you.

We also welcome you to visit our plants and see those facilities, seeing is believing, and I'm sure that thanks to everyone of you for supporting us in this growth journey. I'm just handing over the phone to our Executive Vice Chairman for any closing comments.

Thank you very much. I will be shortly meeting in some conferences.

If there is any clarification, please reach out to us. We will be happy to clarify all points.

Thank you.

Thank you very much.