Transcript21aug2024

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August 21, 2024

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533033 Company Symbol: ISGEC

Dear Sir(s)/Madam(s),

Furnishing of Information in terms of Securities and Exchange Board of India (Listing Obligations and

Disclosure Requirements) Regulations, 2015 ("Listing Regulations")

Subject

Transcript of the Conference Call to discuss the financial performance of the Company for the quarter ended June 30, 2024

1. This is in continuation of our intimation dated July 31, 2024 and in compliance with Regulation 30 read with Part A of Schedule III and any other applicable regulation(s) of the Listing Regulations, please find enclosed herewith Transcript of Conference Call organized on Wednesday, August 14,

2024 at 04:00 p.m. i.e., 16:00 hours (1ST) on the financial performance of the Company for the quarter ended on June 30, 2024.

2.

This intimation is also being uploaded on the website of the Company at www.isgec.com under

"Schedule of Analysts/Investors Meet" section.

3.

The above is for your information and records please.

Thanking you,

Yours truly, i

For Isgec Heavy Engineering Limited For Isgec Heavy En t.t::� ��

Sachin Saluja

Company Secretary & Compliance Officer Company Secretary e Officer

R..."4::-H,"'"'"'-

Membership No. A24269 Membership No. A24269

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Radaur Road, Yamunanagar 135 001 (Haryana) India

“IISGECC Heavyy Enginneeringg Limiteed

Q11 FY ‘225 Earnnings CConference Caall”

Auguust 14, 2024

MANAAGEMENTT

MR. AADITYA PPURI – MAANAGINGG DIRECTTOR

MR. KKISHORE CHATNAANI – WHOLE TIMME DIRECTTOR

MODEERATOR

MS. NNIDHI SHAAH – ICICCI SECURRITIES LIIMITED

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Moderatoor

Ladies andd gentlemen, goood day and weelcome to ISGEEC Heavy Enginneering Limitedd Q1 FY25

Earnings Call, hosted byy ICICI Securiities. As a remminder, all partiiciple lines willl be in the listen-onlyy mode. As a reeminder, all paarticipant lines wwill be in the liisten-only modee and there will be ann opportunity ffor you to ask qquestions after the presentatioon concludes. SShould you need assisstance during thhe conference ccall, please signnal an operator bby pressing staar then zero on your toouchtone phonee. Please note thhat this conferennce is being reccorded.

I now hannd the conferencce over to Ms. NNidhi Shah fromm ICICI Securiities. Thank youu, and over to you, maa'am.

Nidhi Shaah

Thank yoou so much, Shhlok. Good eveening. On behaalf of ICICI Seecurities, I wouuld like to welcome you all for the Q1 FY25 Earnnings Call of ISSGEC Heavy Enngineering Limmited. From the managgement today wwe have with us Mr. Adityaa Puri, Managinng Director; MMr. Kishore

Chatnani, Whole-time DDirector and CFFO; and Mr. SSanjay Gulati, WWhole-time Diirector and

Head of MManufacturing UUnits.

I would nnow like to handd over the confference to the mmanagement forr opening remaarks. Thank you.

Aditya Puuri

Good afteernoon, everyonne, and thank yoou for joining uus for our earninngs conference call today.

I hope thiss message findss you and your loved ones welll and safe. We look forward too engaging in a constrructive discussiion with you. OOur quarterly finnancial results wwere publishedd yesterday.

We have uploaded our ppresentation on BSE/NSE andd our website wwww.isgec.com today. For regular uppdates about thhe company, please visit our wwebsite and yoou may also follow us on social meddia platforms.

Quarterlyy results

The standdalone total income increasedd by 7% to INR1,243 crorres in June 20024 quarter comparedd to June 2023 qquarter. The staandalone profitt before tax increased at 42% to INR111 crores in June 2024 quaarter comparedd to June 2023 quarter. The cconsolidated total income increased by 11% to INNR1,549 crores in June 2024 quarter comparred to June 20223 quarter.

The consoolidated profit bbefore tax also iincreased by 333% to INR96 crrores in June 20024 quarter comparedd to June 2023 qquarter.

In the stanndalone results, manufacturingg revenue has iincreased as theere are good ordders for all products aand additional capacities creaated with investments in the llast years have come into operation..

Borrowinngs

Our fund position has iimproved. On the standalone basis we have closed with June 2024 quarter wwith the net surrplus of INR1333 crores as coompared to a nnet borrowing oof INR356 crores at the end of Junne 2023 quarteer. The consoliddated net borroowing has alsoo improved substantiaally. Our consoolidated borrowwing has reduced to INR491 crores on 30/006/2024 as comparedd to INR1,066 crores as at 30/006/2023, that is lower by 54%.

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Order boookings

Standalonne orders book during June 22024 quarter aare INR1,025 ccrores as againnst INR816 crores in June 2023 quaarter. The conssolidated orders booked durinng June 2024 qquarter are

INR1,1244 crores compared to INR1,1552 crores of orrders booked inn June 2023 quuarter. The orders in hand positionn is strong. Coonsolidated ordders in hand aas on 30th Junne 2024 is

INR7,741 crores. Of thee consolidated oorder book, 69%% is for projectt business and 31% is for manufactuuring business.

The orderr book includess INR1,316 croores for internaational orders wwhich is about 17%. The order boook includes thee order book oof ISGEC Hitaachi Zosen, whhich is very goood. It has

INR1,0222 crores of ordeers as on 30th June 2024. Thhe order book iis well diversiffied across various seectors and custoomers.

Market ddemand

The overaall demand trennd is encouragging, and the inquiry positionn continues to be robust.

Export inqquiries have alsso picked up.

Philippinnes project

Most of thhe plant relatedd construction wworks have beeen completed exxcept for somee portion of piping, ellectricals, instruumentation andd partial road, grains, flooringg, painting, etccetera. The plant has manufactured aand sold about 3.5 million litrees of ethanol beetween April 20024 to July

2024 so faar. The plant is temporarily shhut for some corrrective actionss, for some defiiciencies in affluent trreatment and diisposal related mmatter pointed out by local goovernment authoorities. We hope the pplant can restart later in this mmonth. My colleeagues and I will be happy to aanswer any questions..

Moderatoor

Thank youu, sir. We will now begin the question-and-answer session. The first questiion is from the line off Nirav from ASSK Investment Managers, pleaase go ahead.

Nirav

Sir, first of all, thank you very mucch for this oppportunity. Myy question is sspecifically pertainingg to couple of ssegments. So, I just wanted to get some idea how is the capptive power market inn India? So, baased on your aassessment for FY25, how biig can be the market for captive poower India, if yyou can help onn this number wwith in terms off mega wattagees, it would be really vvery helpful?

Also, accoording to you, wwhat can be thee outlook for waaste heat recoveery plants in Inddia for next couple of years? These aare my few quesstions initially; I will ask further questions.

Aditya Puuri

So, we thiink that the demmand for captivve power plantss will remain roobust. This is allso because a lot of prrocess industriees require steamm in addition too power. So, it sshould remain robust. So, should thee demand for wwaste heat recovvery boilers beccause that's an eefficiency increaasing, it's a move towwards decarbonnization. So, peeople are invessting in that. So, we can't givve out any specific nuumbers, but wee think it will reemain robust.

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Nirav

Sir, according to you, as compared to laast year, how mmuch growth caan we see, maybbe in terms of inquiryy, pipeline or soomething like thhat? It would bee really very hellpful.

Aditya Puuri

We can't ggive you any cooncrete numberrs. We think thee market will remmain robust.

Nirav

Got it. Sirr, my other queestion would be pertaining to boilers for theermal power plaant. So the market foor thermal power plant seems to be buoyantt and there seemms to be only one player who is baagging most oof the orders. JJust wanted too check, do wee intend to geet into that particular market as welll?

Aditya Puuri

Are you taalking about thoose large 600 MMW boiler poweer plants. Are yyou talking abouut those?

Nirav

Yes, the laast ones, I thinkk the market treend is for 800 MMW boilers.

Aditya Puuri

No, we mmay do some smmall packages. We may bid ffoor some small packages, but we are not planning tto get into thosee, big plants.

Nirav

Big ones, like 800 MW bbecause as I bellieve..

Aditya Puuri

We will nnot be doing thaat. We might doo some small paackages.

Nirav

What wouuld be the scopee of work in thee smaller packagges? If you cann elaborate a bitt.

Aditya Puuri

If we are successful, mayybe INR100 croores, scope of wwork may be thhings like handlling plants, maybe somme small air poollution control,, material handlling, some pipinng.

Nirav

So, you aare saying that your scope off work would bbe focused morre towards the balance of plant part aspect. Am I riight in my assesssment?

Aditya Puuri

But only ssome aspects off the balance off plant, not the ccomplete balancce of plant.

Nirav

Got it. Thhank you very mmuch.

Moderatoor

The next qquestion is fromm the line of Nidhi Shah. Pleasse go ahead.

Nidhi Shaah

Yes. So, tthank you for taking my questtion. My first qquestion would be the consolidated PAT was 500 mmillion and thee standalone profit was 550 mmillion. Can youu please help uus with the profit of thhe subsidiaries?? How we move from the standalone to the coonsolidated?

Kishore CChatnani

Ma'am, yoou are talking aabout the quarteerly numbers, ccan you repeat the numbers thhat you just said in miillion?

Nidhi Shaah

Yes. Basically, could you just walk us through this, hoow do we get ffrom the standaalone profit to the connsolidated profitt? As in, what is the profit of thhe subsidiaries??

Kishore CChatnani

Yes, we ccan tell you thee profit of the subsidiaries. So, you will havve noticed thatt in ISGEC

Heavy Enngineering Limiited, standalonee, there is an other income coomponent of abbout INR28 crores. Haave you noticedd that, ma'am?

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Nidhi Shaah

Yes.

Kishore CChatnani

So, out off that INR28 croores, about INRR22 crores is divvidends from suubsidiary companies.

Nidhi Shaah

Okay, okaay, got it.

Kishore CChatnani

So, when you consolidate that, it gets addjusted. But if yyou are lookingg for profits fromm different subsidiaryy companies, I'lll just tell you. TThere are, Saraaswati Sugar Miills has done abbout INR20 crores proofit in this quaarter before taxx. ISGEC Hitacchi Zosen has done INR5 crrores profit before taxx. Eagle Press and Equipmennt Co., the Cannadian companny, has done INNR9 crores profit beffoore tax. ISGECC Redecam, so all the other companies theree are minor ammounts, less than a croores each. Andd there is a loss in the ISGECC Investments which actuallyy holds the

Philippinees companies. So, there's a looss of INR29 ccrores there, wwhich is largelyy a foreign currency mmark-to-markett loss. It is not a realized loss;; it is a foreign currency markk-to-market loss.

And as I said, the diviidend, which iis received froom the subsidiaary companies, that gets eliminatedd in the consolidated. I hope I'vve been able to answer your quuestion.

Nidhi Shaah

Yes, yes, thank you. Couuld you also telll me how is the order pipeline and the enquiriies shaping up for thiss quarter whichh is Q2 and for tthe rest of the yyear?

Aditya Puuri

It is buoyant right now. It seems that thhe order bookinng for the rest oof the year shouuld also be good as off today.

Nidhi Shaah

So, what aare the segmennts that you're seeeing maximumm growth from?? Could you givve us some colour on how the industtry looks as of nnow?

Aditya Puuri

Well, youu know, we suppply to a great nuumber of industries and we're not dependent on any one particular sector. There are some partts of the businness that are liike sugar machhinery and ethanol. BBut otherwise, we supply to a large numbeer of industries, and we contiinue to get orders, divversified orderss from everywhhere. So, I know there is a sloowdown in cheemicals. So maybe wee are not gettinng from one poortion of chemiicals, but we aare getting fromm the other portion oof chemicals or from oil and gas. The coomposition of orders has noot changed drasticallyy since the last ttime we spoke.

Nidhi Shaah

All right. I'll get back in the queue for fuurther questionss.

Moderatoor

Thank youu.The next queestion is from thhe line of Abhiijeet Singh fromm ICICI Securitties. Please go ahead.

Abhijeet Singh

So my quuestion is on the margin. Soo while the mmanufacturing bbusiness, the ssegment of manufactuuring has showwn pretty muuch, you knoww, robust imprrovement in thhe margin sequentiallly. But the I mmean, absolutee margin for thhe industrial prrojects businesss has been hovering aaround the similar level of 4%% to 5%. So, sirr what are the ssteps that we arre taking as of now annd what are thhe levers we haave to improvee upon this maargin profile off industrial projects, iif you can delvee upon that?

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Aditya Puuri

So, we haave dwelt on this earlier also in earlier calls. We have as a sstrategy decidedd not to go in for veryy long durationn projects. We aare going in forr smaller duratiion projects, wee are going in for projjects which havve a comparativvely lesser portiion of civil andd site work. Beccause that's where youu know, most oof the difficultiees are being fellt. And as this pproportion of thhese orders reduces, wwe can expect sslowly, but we can expect somme improvemennt in the marginns. We are focusing mmore on technoology led projeccts, industrial prrojects.

Abhijeet Singh

Right. So can we expect margins movinng towards doubble digits in thee next two, threee years? Is that sometthing that we arre targeting as oof now?

Aditya Puuri

Margins wwill improve. But in projects business, doublee digits are veryy difficult.

Abhijeet Singh

Right, sir.. Also I mean, bbarring this quaarter, if we talk about FY25 ass a whole and mmaybe even the next yyear. Sir, whatt kind of execuution do we exxpect in the industrial projectts business particularlly? Because heere, do you seee any risks to eexecution, like you know, beccause there have beenn some moderaation in growthh in Q1 across the industry. SSo, how do youu look at it going forwward on a one totwo year basiis?

Aditya Puuri

So, I thinnk, moderationn is probably because of thee elections and because of the global environmeent. So, I can't ccomment on whhat happens in the world. I knnow there are unncertainties in the woorld, but we do not foresee any significantt changes in thhe demand. WWe are also concentrating more on exxports, so if theere is some falll in domestic deemand, we hopee that we'll get compeensated from exxports.

Abhijeet Singh

Right, sir.. I'll come back in queue, sir. TThanks for answwering the questions.

Moderatoor

Thank youu.The next queestion is from thhe line of the DDeepesh Agarwaal from UTI AMMC.Please go ahead.

Deepesh AAgarwal

Yes, goodd evening, gentllemen. My firstt question is onn the sustainabillity of the preseent margin.

So, this quuarter you repoorted a very strong margin in the project bussiness on the coonsolidated basis. So, this 13.5% kind of margin, hoow sustainable iis this? Sorry, mmanufacturing.

Kishore CChatnani

You are taalking about thee manufacturingg?

Deepesh AAgarwal

Manufactuuring, right. Maanufacturing.

Aditya Puuri

Yes. Theyy are going to be sustainable. TThey will be aroound this figuree.

Deepesh AAgarwal

So, goingg ahead, we shhould be doing a 13.5% kindd of margin in manufacturingg. Is that a guidance??

Aditya Puuri

Somewheere there. Somewwhere there. Soomewhere, doubble digit.

Deepesh AAgarwal

Double diigit. Sir, the othher question is oon Philippines. Is that understanding correct?? Whatever the loss wwe see in the Phhilippines projeect plant and thhe construction,, that is purely because of forex?

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Kishore CChatnani

So, there as you know, tthe plant operaated for some tiime. It was nott operated at fuull capacity because wwe caught the suugar season latee. There is a INRR29 crores losss that I spoke abbout a little while agoo for the quarterr. Out of that abbout INR22 croores loss is foreex mark to marrket, which is basicallly because the Philippines Peesos depreciateed more againsst the dollar coompared to dollar to IINR. So, it's a mmark to market loss, it's not a realised loss, buut it's a reportedd loss.

Deepesh AAgarwal

Understoood. And so, once this plant geets operational after these hicccups, should wwe still see that INR5500 crores - INRR600 crores kinnd of a top line aand probably 25%, 30%?

Kishore CChatnani

We continue to expect that when thee plant will opperate at full capacity startinng mid of

Novemberr it will be aboout INR500 croores in revenuee for a year andd it will continnue to have

23% - 24%% kind of EBITTDA.

Deepesh AAgarwal

Okay, okaay. And sir, I wwant to understaand what is thee thought proceess now about eexiting this plant becaause now the pllant is operationnal and it's beenn a drag for us ffor quite a whille and I am sure manaaging it from Inndia, the Philipppines plant wouuld be also a chhallenge. So, wwhat are the steps you are taking to acctually sell yourr stake in this pplant to some strrategic partnerss?

Kishore CChatnani

As of noww we are focusinng on running tthe plant well. YYou are right, itt is not the easieest thing to run a plannt in a foreign ccountry sitting here. So, we aare working andd focusing on rrunning the plant welll.As and when we have any neews about dispoosing the plant, we will certainnly share at the approppriate time.

Deepesh AAgarwal

Sure, suree.The other quuestion is to Mrr.Puri, if I look at your orderr book over thee last three years, it iss flat. So, the nuumber, or the bbook number is flat. I understaand you are focuusing more on the maanufacturing orrders over the pproject orders, bbut I don't see such a sharp juump in the manufactuuring order boook also. So, wwhat are your thoughts withh respect to yoour growth appetite? Would we see the growth cooming back for ISGEC like it used to see ovver the last decade or how?

Aditya Puuri

So it's not that we are ffavouring manuufacturing overr projects, but iit is also true tthat we are concentrating on technollogy-led, shorteer duration proojjects with commparatively less site work.

And I thiink in spite off narrowing dowwn the breadthh of the projecct business, wee have still managed tto have a good order book in tthe project businness, and we wwill grow this.

So, it's likke saying that wwe have exitedd from certain ttypes of projectt business, but in spite of that, we'vve had a reasonnable order boooking from the other projects, industrial projects where we are exeecuting.

Deepesh AAgarwal

Sure. Andd lastly, if youu can share whhat is the currennt outstanding order book onn FGD and where are we on complettion of those leggacy FGD ordeers?

Aditya Puuri

So exceptt for one FGD plant, two out of the three shhould be complleted within thiis financial year or thhe first quarter oof next year. YYes, actually witthin this year thhe third one wiill continue for some ttime.

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Deepesh AAgarwal

And how much of the mmoney would bee stuck in thesee projects in terrms of retentionns or these receivablees?

Kishore CChatnani

So, the twwo that we are wwe are expectinng to complete iin this year, wee are hoping, thhere's about

INR400 ccrores of milesttone link paymments which is tto be received. And we are exxpecting to receive ouut of that INR4000 crores to maaybe INR325 crrores to INR350 crores out of that in this current yeear. And maybee INR50 crores or so will spill over into the neext year.

Deepesh AAgarwal

Okay, sure.I'll join the qqueue.

Moderatoor

Thank youu.The next question is from tthe line of Sanddeep Bait, an inndividual invesstor. Please go ahead.

Sandeep BBait

Yes, goodd afternoon, sirr.A couple of qquestions. The first one is on the Philippines business.

Can you rrepeat how mucch was the sale of ethanol in thhe first quarter?

Kishore CChatnani

3.5 millionn litres.

Sandeep BBait

But it's noot reflecting in tthe revenue of tthe…

Kishore CChatnani

Yes, yes. Because as Mrr. Puri mentionned in his remaarks, there is sttill some amouunt of work required tto complete the plant. The plannt is operationaal, but there is sstill some amouunt of work required tto complete the power plant. AAnd therefore, oour auditors, booth in Philippinnes, KPMG and here, they are continnuing to show it in current CWWIP and the reevenue, since thhey are not capitalizinng the CWIP, tthey will be dooing that in thiis quarter and iin the Septembber quarter, where theey are not reporting it as a coommercial revenue. Revenue ggenerated durinng the trial run and coommissioning pperiod.

Sandeep BBait

So that's ggetting adjustedd against the CWWIP, is it?

Kishore CChatnani

That is noo, that is…

Sandeep BBait

No, sorry.. So the revenue, which is beinng generated, hhow are you shoowing it in yourr accounts?

I wanted tto understand thhat.

Kishore CChatnani

It is reduccing the net marrgin in the CWIIP.

Sandeep BBait

It is reduccing the?

Kishore CChatnani

It is reduccing the CWIP bby net margin.

Sandeep BBait

So, it is geetting adjusted against your CWWIP.

Kishore CChatnani

That's righht.

Sandeep BBait

Okay. And in Septemberr quarter, will you start bookinng it as revenue or it will continnue?

Kishore CChatnani

We expecct to capitalize aand start bookinng revenue.

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Sandeep BBait

Okay. And how much is the total capitaal employed in tthe Philippines project as of daate?

Kishore CChatnani

Let me geet the figure, maaybe we'll answwer you in a feww minutes.

Sandeep BBait

Or you caan give me the ccapital asset figuure that's also ookay?

Kishore CChatnani

That is INNR900 crores.

Sandeep BBait

INR900 ccrores. Okay. AAnd secondly, question for MMr. Puri. Would you like to, given that trade, thiss is the first quaarter for the yeear. Would youu like to give soome revenue guuidance for the full yyear on a conssolidated basis?? And what kiind of marginss can we look at for the industrial project businesss on a full yearr basis?

Aditya Puuri

So industrrial project bussiness we just ssaid that it will be around 13%%, it will be doouble digits the margin in the manuffacturing. And as far as the reevenue for the year is concernned I think last year, llast meeting wee said it will be up about 7% too 10%.

Kishore CChatnani

Revenue ffor the year shoould be early doouble digits.

Aditya Puuri

Early douuble digits. Yes.

Sandeep BBait

Sorry, youu're saying reveenue guidance is early double-ddigit growth?

Aditya Puuri

Yes.

Sandeep BBait

And marggin? Sorry, I was asking abbout the indusstrial project bbusiness, not thhe product business. You mentionedd about…

Kishore CChatnani

Product buusiness, we havve already said the margin thaat is shown in thhis quarter, we are hoping to be able to maintain thaat.

Sandeep BBait

Yes. I undderstand that, buut on the industtrial project, how much are youu guiding for?

Kishore CChatnani

For the cuurrent year, it's going to be aroound the same llevel. As Mr. Puuri said, we havve changed into the nnew philosophyy of order bookking on technology-led orders. The revenue is going to keep on ccoming in the ccoming quarterss. Some of it wwill get reflected in this currennt year and more of itt will be reflectted in the comiing years. So, ffor this year, it will be close to the same level also..

Sandeep BBait

So, about 5%, is that whaat you are sayinng?

Kishore CChatnani

Yes, pleasse.

Sandeep BBait

5% EBIT margin. Okay. Thank you. Soorry. One last qquestion. On thee sugar business for India, if you cann comment on yyour outlook forr the current yeaar?

Aditya Puuri

We wouldd not like to coomment right noow because it ddepends upon thhe cane price, tthe ethanol policy. It will depend onn that. As of noww, the agroclimmatic conditionss for sugarcane seem to be

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Augustt 14, 2024 good, till date. The agrocclimatic conditiions are good. TThe cane crop iss, in our area, slightly less than last yyear. But the aggroclimatic condditions are betteer.

Sandeep BBait

Okay. Thaank you.

Moderatoor

Thank youu.The next question is from tthe line of Amit Kumar from Determined Innvestments.

Please go ahead.

Amit Kummar

Yes, hi, thhank you so muuch for the oppportunity, team. I just had one question, you kknow, just, you knoww, hopping bacck on the mannufacturing verttical margin. SSo, when I loook at on a quarter-onn-quarter, you kknow, basis, youur revenue is doown from INR7740 odd crores to INR540 crores. MMargins are up 3370 basis pointts. So, how do you explain thhat? And speciffically, was there any special high maargin executionn or delivery in this particular qquarter?

Aditya Puuri

So manuffacturing consissts of a numberr of equipmentss.And thereforee, sometimes hiigh margin orders gett bunched, sommetimes they doon't get bunchedd.So there is nnothing very exttraordinary over here..

Kishore CChatnani

Except wwhen you're talkking about thee consolidated. You're talkingg about the coonsolidated numbers hhere. Now therre is better proffitability in the ISGEC Hitachhi Zosen, whichh is part of the manuffacturing segmment and there iis a profit this quarter in the Eagle Press INNR9 crores profit in tthis quarter. Foor the March qquarter, they haad a loss. So thhese two are coontributing, besides thhe contributionn from ISGEC standalone itsself, into the mmargin score. TThat is the reason whhy the margins aare better.

Amit Kummar

So actuallly, again, I'm ssort of comingg back to the ppoint which hass been asked eearlier, that

13.5% maargin in recent ttimes, I don't thhink we have seeen that. What is the sustainabble level of margin thhat we should aassume, either for this year oor for a medium term, two, tthree years perspectivve?

Kishore CChatnani

Let us reppeat there that thhis kind of marrgin we expect to sustain. That is one. Secondd, Mr. Puri mentionedd in his remarks, we have beenn making invesstments in increeasing capacity for certain products in our manufaacturing busineess, particularlyy the iron founndry. Also, thee container business, we have expannded capacity thhere. We have eexpanded capaccity in the boilerr tubes and panel andd those places. SSo, all of that ccapacity is havving a good ordder book, and oorders have been bookked at good pricces, good margiins. So, that is rreflected in the numbers.

Amit Kummar

All right. Understood. Thhat's very, very helpful. Thankk you so much.

Moderatoor

Thank youu.The next queestion is from thhe line of Manaas Thakkar fromm MT Advisorss.Please go ahead.

Manas Thhakkar

Hello, thaanks for the oppportunity. So, I had just onee question on CCapex, like whhat is your guidance oon the capex foor this year and the upcoming ffinancial year '226?

Aditya Puuri

About INRR60 crores in thhe engineering business in ISGGEC, this year.

Manas Thhakkar

For this yeear?

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Aditya Puuri

Yes.

Manas Thhakkar

And any pplan for the nexxt year, like till nnow has it beenn planned?

Aditya Puuri

Still to maake. Still to deccide on that.

Manas Thhakkar

Okay. So,, this is INR60 ccrores in engineeering businesss for this year, rright?

Aditya Puuri

Yes.

Manas Thhakkar

Okay. Thaank you.

Aditya Puuri

INR60 croores we plan too spend, the exeecution may gett spilled over too the next year, but as you see, we prrobably will deccide about INRR60 crores of thee investment.

Manas Thhakkar

Okay. Okay. Understoodd.Thank you.

Moderatoor

The next qquestion is fromm the line of Jaiinam Jain from ICICI Securitiees. Please go ahhead.

Jainam Jain

Good eveening, managemment. I had a coouple of questioons for the mannagement. Firsttly, starting with whatt was the order inflow of Hitacchi Zosen subsiddiary?

Kishore CChatnani

Order infflow of Hitachii Zosen in thiss quarter? Is yyour question aabout order infflow about

Hitachi Zoosen in this quaarter?

Jainam Jain

Yes.

Kishore CChatnani

So, this quuarter inflow wwas INR71 crorees. I'll just put iit in perspectivee.We have largge orders in

ISGEC HHitachi Zosen. AAs of 31st of March, we aree well booked with INR1,0500 crores of orders. Soo, in this quarteer we booked onnly INR71 crorres and as of ennd of June 20244 the order in hand iss INR1,022 crorres. Because wwe are well bookked, we did nott book too manny orders in this quarteer.

Jainam Jain

What is thhe status of CBPPI Philippines?

Aditya Puuri

We've just gone through that just now.

Kishore CChatnani

The plant has started operations. It hadd trial operationns and commisssioning and gennerated 3.5 million littres of ethanol. They sold us that ethanol. TThe plant will run at full cappacity from

Novemberr, mid-Novembber on sugarcanne.

Jainam Jain

Okay.

Kishore CChatnani

Just to summmarize what aall we said earliier.

Jainam Jain

Okay. Annd my last question is what ddo you think aabout the profittability of Eaglle Press &

Equipmennt, considering iit made losses iin the last two yyears?

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Aditya Puuri

So, this qquarter, Eagle hhas shown a prrofit, and probaably, for the whhole year, it mmay show a profit. Wee are putting ouur best effort too see that the pplant runs well.. There is a shoortage over there in thhe north Ameriican market, peeople are not deeciding orders. Partially it is bbecause the

EV car mmarket is not picking up as peopple were expeccting. And the ssecond thing is, there's the uncertaintty of the electioons. So, the proospect is a littlee uncertain. Butt we are puttingg efforts to run it welll.

Jainam Jain

Okay, sir. Thank you andd all the best.

Moderatoor

Thank youu.The next question is from tthe line of Sanddeep Bait, an inndividual invesstor. Please go ahead.

Sandeep BBait

Yes. Thannks for taking thhat question again. You mentioned that you'rre looking at earrly double- digit growwth of revenue on a consoliddated basis for the full year. Can one assumme that the growth raates will be simmilar for both yyour industrial pproject and for manufacturingg business?

Or do youu expect manufaacturing business to grow fasteer?

Kishore CChatnani

The manuufacturing busiiness, I'm repeaating, what wee have been innforming earlieer. We still think that''s what it's goinng to do on a staandalone basis.. Last year we ddid INR1,700 ccrores. This year we'lll be doing INRR2,000 crores. II'm talking aboout the standaloone basis. ISGEEC Hitachi

Zosen is ggoing to do bettter than last yeear. So, on a coonsolidated basiis also we are ggoing to be doing bettter.

On the prooject business, we are going too be almost at tthe same level. In percentage tterms we'll growth froom the manufaccturing will be hhigher than the growth on the projects busineess.

Sandeep BBait

Right. Annd when you tallk of early doubble-digit growthh, are you includding the sale off ethanol in

Philippinees?

Kishore CChatnani

No. We arre not factoringg that in.

Sandeep BBait

Okay. Annd you mentiooned 23% - 244% margin onn a INR520 odd crores turnnover from

Philippinees on a full cappacity utilizatioon basis. Earlierr, you had talkked about 30% margin, in one of thee previous calls..

Kishore CChatnani

We had spoken about 27% - 28% mmargin. At thee moment, thiss is what appeears to be, dependingg on the prevaiiling prices of ffeed stock and other things, thhis is what apppears to be, what slighhtly.

Sandeep BBait

So, on a IINR500 crores basis turnover, 23% - 24% woould add up to,, say, INR120 oodd crores.

And on a capital employeed maybe of abbout INR1,000 ccrores, that wouuld translate intto 12% --

Kishore CChatnani

Capital emmployed; we've got the figuress. You had askeed earlier. Its INNR743 crores.

Sandeep BBait

INR743 ccrores. Okay. WWill it be possibble for you to gguide on deprecciation and inteerest on the

Philippinees asset once.

Kishore CChatnani

It's a new plant which haas come up. We won't be able tto guide you, exxact numbers like that.

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Sandeep BBait

Rough esttimate if you caan tell?

Kishore CChatnani

I don't havve anything moore, that I can addd here.

Sandeep BBait

Okay. Annd lastly, you mmentioned that on a consoliddated basis, thee net debt figurre is about

INR490 oodd crores, as off day or at the JJune 30th. By thhe end of the year, would youu expect the company to be debt free on a consolidatted basis, on a nnet debt basis?

Kishore CChatnani

No, it is nnot going to bee debt free. Thhere will be debbt, certainly ISSGEC Heavy EEngineering itself is ddebt free as of now, and it wwill certainly bee debt free by the end of thee year, the standalonee company. The Philippines coompany will haave its loans. Thhe sugar seasonn should be on, and suugar stocks willl be at peak att end of Marchh. It will have its working cappital loans.

ISGEC Hitachi Zosen will have small aamounts of loanns. But the overrall debt positioon is going to be less than what it is nnow.

Sandeep BBait

On a net ddebt basis, you'rre talking aboutt?

Kishore CChatnani

On net debbt basis. That's right.

Sandeep BBait

Okay. Thaank you so mucch.

Moderatoor

Thank yoou. In the interest of time, this was the lastt question for ttoday's confereence call. I would noww like to hand tthe conference oover to the mannagement for cllosing commentts.

Aditya Puuri

I would likke to thank eveerybody for atteending the confeerence. Thank yyou and have a good day.

Moderatoor

Thank you, sir. On behaalf of ICICI Seecurities that cooncludes this coonference. Thaank you for joining uss and you may nnow disconnectt your lines.

Disclaimer

This document hhas been edited ffor readability purrpose.

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