Mold tek technologies Q1 FY24 first ever concall

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ladies and gentlemen good day and welcome to mold  Tech Technologies limited 1q fy24 conference call   hosted by antique stock broking as a reminder  all participant lines will be in the listen   only mode and there will be an opportunity for you  to ask questions after the presentation concludes   should you need assistance during the conference  call please signal an operator by pressing Stars   Then 0 on a touchstone phone please note  that this conference is being recorded   I now have the conference over to Mr Danish karya  from antique stock broking thank you and all to   you sir yeah thank you warm welcome to all the  participants uh uh for the q1 fy24 conference   call of multech Technologies from the management  we have Mr J lakshman Rao chairman and managing   director of the company and the finance team uh I  would love like to hand over the call to them to   Mr J lakshmandra and post which we will open the  flow for Q a session thank you and over to you sir good morning jayesh and all the participants  and thanks for your interest in joining our   first conference call of small Tech Technologies  limited uh I'm glad to inform you that we have a   very robust growth in the q1 uh the sales are  up by 35 percent and profit uh after tax is up   by 103 if it has grown 86 percent uh and overall  Outlook is much better now because the especially   our growing area mechanical engineering Services  we have started with a good opening of project   flow typically our project flow starts towards the  end of first quarter of U.S that is uh Jan March   ending yeah all the new projects are generally  initiated at this stage and they start picking   a pace from April onwards and by second quarter  that is July to uh I would say still Jan or even   up to March there will be Progressive delivery  and Progressive invoicing in our company so   that's why the q1 tend to be the starting of the  busy season but Q2 to Q4 in our Indian fi uh the   invoicing improves and the numbers also sell so  I'm glad to inform you the beginning is good the   as of today they work on hand for mes a short  of from 200k last year to 1.1 million that's uh   four to four and a half times and we anticipate  the accumulative increase in the project flow in   mes because we also entered into uh fresh tools  designing and drafting services and the pilot   projects are going on with couple of clients  and hopefully in few quarters that will emerge   as another new segment of business and revenues so  that is how the mes is shaping up and on the Civil   side also we have a strong honor book so from  Q2 onwards the numbers will further improve our   hope and in the field of acquisition we are still  looking at couple of options but we are very keen   to have companies who will continue to work with  us management and very few such opportunities are   coming but we are patiently waiting for a proper  Target once we have that we wish to improve move   into structural designing and architectural  services where we have much better value add   so that is the background of q1 and the beginning  of Q2 I would now rather take more question and   answers so that we can have a meaningful  discussion or back to the immediate audit   thank you very much we will now  begin the question and answer session   anyone who wishes to ask a question may press  star and one on the Touchstone telephone   if you wish to remove yourself from the  question queue you may press star and do   participants are requested to use  answers while asking a question   ladies and gentlemen we will wait for a  moment while the question queue assembles our first question is from the line of Devi  srimali from DS investment please go ahead sir   yeah hi good afternoon and congratulations  for a good setup number just a couple of   broad you know questions around how do you  see the opportunity size in terms of the   key Market or the segmentary focus and what  percentage do you see getting offshore and   if we connect this to our aspiration that what  what sort of market share or player we want to   be how do you see basically two three years  Outlook from here that would be my first one   okay you want to continue or you want me to answer  this yeah I could please answer this then I will   tell you okay uh the outlet for next two three  years is very good because uh we are not only   established ourselves as a player in BMW services  for tier one clients our flying field is now   increasing see like any engineering for uh example  even in civil it will take for five to eight years   for any company to establish its credentials setup  systems showcase the projects we have done so that   you will be in the eyes of bigger players so  today multi can civil has already reached that   couple of years ago we our work in the Civil has  been well established because there are Monumental   buildings or structures built across United States  without detailing and connection designing inputs   so we can refer in any City uh be it the aerody  airport beat a plan to beat Amazon warehouse or   be it a 64 storage building in Chicago we have  several examples to prove ourselves and we also   been given Awards by some of the trade bodies in  the United States in the field of civil Structural   Engineering so there over the last 10 years  because we started spectral steel only from   2010 onwards after our Recreations so since then  it took us about 10 years to establish ourselves   now already several projects of you know exemplary  projects we have done including the World Trade   Center when it was revealed we did a part of the  detailing and connection design work so that way   we have established ourselves and in this field  of engineering especially civil or even automobile   to that matter your credentials your experience  matters a lot so today we have crossed that even   in the field of mechanical engineering in mainly  automobile BIW body and white division we started   with just 2D detailing today we do 2D 3D Robotics  and even simulation so end-to-end solution we   are able to deliver for last three four years  fortunately we got an opportunity to work for   Tesla very early in 2019 1819 and that has become  a benchmark and now in a electrical Vehicles field   we have been well valued as a experienced design  company so as you know there are several uh EV   projects lithium-ion battery plants are coming up  all across Europe and the companies like fft where   we are related with are very active in this  field of EV we have been working with sft and   vdl for last three to five years so they are not  believe in our abilities and they see our quality   improved and consistency has been very greatly  acceptable to them so now they are calling our   people over for uh on on-site jobs and keeping our  team internally to monitor the project progress so   with these relations moving up I see a great  feature ahead in the next two or three years thank you for that detail answer it clarifies a  lot of things so if I can connect some you know   similar data so if if you know we were to look  at our last two years growth rate which has been   quite good so would it be fair to say that  you know we will have organic growth which   is probably similar to what we have done in  23 but at the same time we are also looking   at acquisition which will further boost our  growth how would you look at the growth quality   as well would it be large integrative or do you  think we are a very decent margin and right now   this is what we want to maintain doing that and  topic fi20c level margins so yeah I have had 23   level margins will be definitely improved as our  capacity utilization is improving in mes so of   course jumping like 105 last year and Evita may  not be possible every year but definitely we'll   be seeing a a good uh growth in Evita levels  even on the compared to the 22-23 figures uh   we started with a good bang today uh with the  ebitda growing at uh 86 percent that is up from   uh it was around uh 18 in q1 last year is up to 27  now from 5.31 crores to 9.85 uh is the jump that's   about human growth is 86 percent in the beta  so probably even reaching a 40 to 50 percent   overall Evita is what we are targeting for the  current uh Financial year or compared to last year that's great to hear and my last would be uh  our projects more you know few quarters type   of visibility do you have a mix of long-term  contract as well as short-term that can be my   last one yeah our projects are typically long  term because none of the buildings are built   in three months and uh of course we are not up  to the end of the building we are mainly in the   phase of starting right from Foundation till  the end of the main structure that is called   steel structure so our job starts right from their  foundations design and Foundation uh construction   happens by them none of the works we are involved  no supervisory or no site visits but our team in   USA could place in Atlanta they interact with the  project managers and Direction contractors of the   buildings in USA and they clarify on-site  clarifications rarely they visit also but   who are moving into structural designing and  Architectural our relations with the general   and contractors who are the top end of the Civil  Spectrum would increase so going forward this   will be the target for voltage by through a  proper acquisition of a architectural come   structural designing company we will be directly  dealing with the general contractors and take the   end-to-end responsibility of the project design  project architectures and even detailing 3D and   2D detailing currently we are only in 2D and  3D and little bit of connection design but our   connection design is now well established we  are fulfillingness in all the states able to   almost all the states for stamping the designs  which is very essential for the construction   industry in USA so now with these credentials  we have to build up our credentials in design   are not frictional that is true only inorganic  means it's better because otherwise we have to   struggle again another eight to ten years  to establish our name in designing and   architectural services so we are keenly looking at  a design uh acquisition acquisition of a designing   an artificial firm we are looking at two three  options closely but uh I'm very particular about   having a proper fit especially the promoters of  that company should continue with us for at least   a period of five to six years because their their  credentials are always linked with the core team   of the engineering so that is where we need  to build up uh otherwise it will take several   years for us to establish so having started the  designing for correction designs for last three   years I know it will take another five six years  by inorganically acquiring a company we will be   quickly Bridging the Gap so that is a way of  grow growth in the field of civil coming to   Mechanical right from baw now our in relations  with the tier one clients like fft or vdl or   guest amp are improving now all these people  are into different fields of Automotive not   necessarily body and white Interiors exteriors  wiring harnesses stamping dice all these areas   also we are now able to interact and start doing  the pilots so these Pilots once proved there will   be more and more opportunities to work with them  in other trees and diversify our service range so   that that can phenomenally bring Improvement  if you succeed in taking those opportunities thank you for explaining the acquisition  it's the last one would be the tech   position maybe request you to join the  question queue for follow-up questions thank you our next question is from the line of  Proline from goldfish please go ahead with your   question sir hi Mr Rao thank you for conducting  this call for the first time it gives us some   insight about your company I have few questions on  your core division which is civil and Structural   Engineering so uh just from the point of view of  demand landscape uh can you help us understand   where is the majority of demand coming from is  it from residential commercial or industrial   construction and then within competitive landscape  can you help us understand what is the advantage   of Indian detailers is it this low cost or is  it something else as well and within that well   well where does Malta extend whether there are  many Indian detailers which we found out right   I mean they're doing our research so can you  help us understand what is the advantage that   montec has versus some of these appears within  who are based out of India and you have also in   the press release mentioned that you are moving  up the value chain in terms of fixing billing uh   right and moving into tier one plant and our  hourly rates are also increasing so can you   help us understand as to I mean what does this  fixed team billing actually means and what does   it mean for our profitability what does this  uh mean for our margins and within in the last   question for this segment would be in this whole  uh uh I mean you know within the connection and   member design capabilities as we mentioned that  you are now present in our state now so what   percentage of Revenue comes from this segment  and I mean you know compared to our skills and   maybe still detailing are I mean our skills in  connection and member designer also now at par   and established and is this a slightly higher  margin business so yeah these are the questions   more on your post uh and your code segment yeah we  are not in residential majority of our buildings   are fixed City I mean commercial and Industrial  uh buildings including airports including stadia   including a multi-sured high-rise buildings it  could be sometimes essential but majority are   commercial warehouses uh airports so any huge  construction activity now we are moving more   and more into bigger projects uh the projects  earlier we were doing are hardly three to seven   or eight stories currently we are even handling  60 storage buildings uh huge warehouses of Amazon   or airports for some of the expansion projects  of airports so we have moved from day to day   Mom and Pop projects to very high-end Industrial  and Commercial buildings even industrial plants   we provide structural designing and I mean sorry  structural detailing and connection Design coming   to your second question of uh fixative margins  yes free shipping margins are better because   we charge three to three thousand dollars per  head per person and the utilization of those   persons will be provided to our I support media  which we have developed in-house so the client   feels comfortable he knows how his resources  are occupied with when they can load further   work so that way they will be a happy and we are  happy because we have a fixed Revenue low bench   and the profit margins are there to be with the  margins are to the tune of fifty percent so we   still have more and more fixative assignments  which we are gradually improving currently uh   it's concluding around 10 to 12 percent of our  revenues and we are aiming at growing that to   15 to 20 percent uh that is your second question  coming back to your value chain that is what I   was talking to you we want to move from low end  detailing to higher end member design collection   design means how do you connect the members the  member design itself is the high engine and that   member design cannot be outsourced unless there is  a PE stamping the drawings calculations stamping   means the professional engineer certified by the  board of American structural Society or whatever   it is uh they are only like say your Chartered  Accountants here in India or our so-called uh   structure licensed Engineers who need to  stamp the drawings for ambulance foreign engineer who has to study several years of  engineering and practice and write examinations   to pass and then only is authorized to stamp  the drawings so we have on board the two fees of   American origin one of them is an Indian citizen  we return back to India and working in a ryderabad   office one of them is an American living in USA  so these two people almost cover majority of   the sampling uh requirements of 50 states of USA  every state board has its own PE clarification I   mean licensing even if you have passed the PE exam  you have to again take on filthy some obligations   at different uh State levels and then only on  authorizer to sign and see the drawings so that   level of uh Revenue stream or the cost for such  kind of services is at least more than 100 of what   currency we are charging let's say we are charging  45 28 or 30 at the most in detailing we can aim   at 60 to 100 in design member design but currently  we are not doing member design we are doing member   connection design that means how the members have  to be connected to every corner or every joint   that itself is fetching a more than 54 centimeter  like fix a team that is a I would rather say   anything better than 15 this year and there our  turnover as of today is hardly half a million that   is around constituting less than three percent of  our top line but we are focusing on that this here   again people don't just take you for granted just  because you have a big team but they will look at   your previous background previous connection  design Works where you have done and what are   the buildings and take the referrals and then they  take a chance to come in why should they come in   because in U.S they pay 120 an hour so it's better  to pay 60 to 80 an hour to Indian uh Professional   Engineers who are authorized and able to stamp  it so the cost Arbitrage is so uh encouraging for   them to try our services and we have now started  this two three years ago today I'm glad to say it   has come to a sizable uh Revenue stream but it  has several potential to grow several times so   maybe 10 times or 100 times in the next few years  but it all takes a proper way to approach the   market gain the conference of The Architects and  sectoral Engineering I mean General Contractors   through a proper execution a variety of projects  are through an acquisition so our game plan our   business plan is to go through an acquisition  of a established design firm which may also have   architectural services so that we are directly  jumping two steps of the value chain and dealing   directly with the general contractors who are the  major relation makers and who we can give right   from architectural if they like it otherwise at  least from structural till detailing Outsourcing   and in the process they are also saving costs so  this is the game plan we are in and as I told you   the 10 years or 11 years of our credentials are  helping us to ramp up a little faster than what it   otherwise would take but an acquisition can really  make it uh really fast like you save at least five   to seven years so that's very clear thanks a lot  just one follow-up question would be can you help   us understand uh what is the order book in your  course Division I mean in your course division or   I mean at least in terms of your own air growth  on photons growth any number that you want to   share in your civil and structure design segment  what is the order book looking like right now uh if you look at last year we did about 12 and  a half to 13 million per annum for the full year   civil so 13 million we did uh now our order book  is around 4.1 million dollars as on today uh that   is more than uh 30 percent above our average  uh odd book but in the mechanical side there   is a spot from 200k last year this time it is  around 1.1 million and we hope uh mechanical  

will start adding numbers like last year from  the Q2 Q3 onwards because typically there the   invoicing happens only after some benchmarks so  projects are coming in time but their execution   and delivery is generally typically starts after  three months so we hope the invoicing will pick   up from Q2 onwards and peak in Q3 and Q4 like it  happened last year sure sir that's it from my side   I'll come back in the queue but this was very  clear thanks a lot for this thank you thank you ladies and gentlemen in order to ensure that the  management is able to address questions from all   participants in the conference please limit your  questions to one or two more participants should   you have a follow-up question we would  request you to rejoin the queue thank you   our next question is from the line of  abhijen from grow Capital please go ahead um sorry to interrupt me with a question  to use your handset please sir yeah good morning sir and thank you for  attending we just wanted to understand   in the look at life there uh how much  handling do you have in terms of you   know sourcing your work or how do you Source  your work in terms of civil engineering is   it the subcontractor actually has in  this or is it the designing minerals in terms of repeats and uh is it majorly you  know what is the split between government or   state governments work versus you know  professional work like Amazon or others   so I just wanted to get a sensor back so we are  completely working with private projects sometimes   we provide contractors may get government work  like University buildings or some buildings for   the state but we our dealing is always with  the private parties we never dealt with the   government directly uh coming to your repeat  clients yes we have several repeat clients   and we are keep adding new clients and most of  our repeat clients are the base who give good   reference about our company when a new fabricator  is to use our work in detailing our main contact   point is uh fabricated so this is what I want  all of you to understand that at present we are   at almost at the bottom of the pyramid uh maybe  second step is connection design that we have   started two three years ago which is giving us a  credibility and a respect Among The Architects and   Structural Engineers who deal for the GC GC mean  general contractor so once we ourselves become a makers and then we can not only get this sectional  and Architectural work from them we can ourselves   decide we are the detailing company for them and  we can even charge them higher rates so this is   very crucial stage of the company I would  say and if we take proper steps in the next   couple of years uh things can be available  thank you so much sir and I just wanted to   congratulate you on segregating the CEO position  and appointing a full-time CEO so congratulations   on that I think it's a very professional  move from your side and thank you so much thank you our next question is from the line  of Mr Naveen from NS Capital please go ahead good morning sir thank you for the opportunity on  the mes site sir just want to understand if we are   fully tied to just automobile sector or do we have  exposure to any other sectors like utilities power   Etc yes we are into power and utilities exactly  you mentioned it we are in poles and transmission   tower design and there also revenues are around  1.2 1.3 million out of the 5.5 million we did last   year around 20 25 percent of our revenues are  coming from poles and Powers structure details   it will be structures and we are now entering  in uh stamping Dyson tools and viral harnesses   and looking at other areas of automobile  mainly automobile because our contacts are   well established with automobile and with the  EV Vehicles happening and several uh uh new   models are being brought in uh there is expected  to be huge demand for automobile services in the   next three to five years right right all these  civil sides are very quickly uh where do you   see traction locally sir is it rarousing or is  it data centers oh yeah it's happening Centers   High rail buildings uh in USA and even uh  schools and some infrastructure projects   of the government which are of course executed  by private parties are also on the increase so   in spite of the so-called Russian talk we are  not finding any reduction in the flow of work our targets brilliant one last thing sir  your leadership in both uh packaging and   technologies have been very inspiring how do  you intend to split your time going forward   sir will the next Generation take care of  packaging and you will be more involved in   Technologies going forward uh if you could share  some right on uh that that will be helpful sir   yeah yeah I'm fortunate that all our second  generation people are actively involved in   both the companies uh you all know that they  are very well educated my son is an IIT really   I am Lucknow uh daughter-in-law is from symbiasis  is also from symbiosis my doctor is a chartered   accountant so all these people are now currently  involved while uh three of them are involved in uh   uh Mountain packaging in marketing and finance  area who is the next Microsoft employee he's   the active in business development in mptl  So currently with Prasad being a head of   operations now I have hardly two three uh I  mean three four days in a month it was paid   for the older Technologies in framing division in  training the targets and monitoring the equality   aspects because uh sits in Atlanta so I monitor  through 1C and the core team of people here uh   on a monthly to three times through mrm and PRM  reviews and getting the annual Time same direction broadly percent or twenty percent  the time is still unpacked is also but not maybe TCS and uh Tech  Mahindra they are much bigger in size and uh   but we are in a niche player  we analyzed none of these names   uh engineering all three of them are  chemical and Aerospace and other areas   whereas our specialty as an English player is  more there is no listed company in our space   of civil structural designing or detailing  there are quite a few I would say five or   six uh decently known detailing companies  privately held size one of them are as big   as our team or maybe a little less than our team  and several others are not even half of our size thank you sir I'll join back in the queue  if I get an opportunity but otherwise your   leadership in both this very inspiring  sir and thank you for connecting the call   thanks for your compliments thank  you our next question is from the   line of Dolly Chaudhary from nirishai  investment advisors please go ahead um hello sir thank you for the opportunity  and congratulations on this number uh I have   a few questions so first of all I also  guided that the mechanical decision will   be growing further so I wanted to know  the revenue mix that we can expect in   upcoming quarters from both the division  like what was the ratio of Civility uh yeah it is uh still in the same ratio it was  in line with what it was at the q1 this is a   quarter also the growth is mainly due  to civil but going forward because of   the improved work on hand for mechanical uh  Q2 onwards the numbers of percentage of mes   might increase better than last year  and might end up better than last year separating is purely Market driven but as far as our  current market situation is concerned uh   both the divisions are having better  than last year's uh work on hand and   especially the Our concern area is mes  because last year it was so good but   we were little concerned how it will start  but it started well this year too and uh as   I mentioned in my press note our invoicing  starts picking up after second third month   of receiving the project so the billing of  mes also will improve from second quarter   like last year and going forward performance  should be better than what it is in this q1 see in the mechanical division poles and  transmission towers are very fast within a   month we typically complete a process maximum  two months but in the case of baw it can be   sometimes if it is only a 2d work it can be  a month or two but nowadays we are taking   end-to-end projects where they spread around  six to eight months depending upon the input   movement from the clients but not less than  uh five months in any case sometimes due to   delays or clarifications or Corrections rework  this stretch it or even up to seven eight months   okay so that will be ordering  all the best for the future thank you our next question is from the  line of Deepak podar which are five capitals um your line has been unmuted you  can go ahead with the questions   am I Audible yeah yeah yeah hi Susan thank  you very much sir for taking uh my question   so I've heard two questions first of all I  just wanted to understand uh is there any   other industry also here we are like trying  to cater to apart from the industry we are   currently catering and secondly a clarification  you mentioned we are looking at an a better growth   of 40 50 so is it an absolute habit of the  margins you are talking about here that's it machines we already have a small team  working on that and other areas these   two entries embedded electron  uh but there we are ready to   start at beginning because our hands  are full with white harnesses and uh this thing can be domain and the PMC  area where we already have a team bus   bodybuilding is another area we have done few  projects so that is the other lines rather than   civil and I mean automobiles coming to your  question on ibika what I am thinking is the   absolute numbers we used to achieve at least  40 percent growth in uh Evita that said it   was around 43 crores uh this time we wish to see  reaching around 60 crores is the internal margin so we have an internal Target to reach  you know close to 60 or at least 55 to   60 cross Evita in The Current financial year   okay understood yep that's very clear  sir thank you very much all the very best thank you our next question is from the line of  Amman which from a suit Investment Management   please go ahead good morning sir my first question  is on your hiring we hired around 150 150 people   so if you can talk about uh what is their current  utilization what is the current attrition rate in   the industry given there's a very big demand  and also if you can talk about for the full   year uh this year and for next year what uh what  kind of number of people we are looking to hire   so yeah we heard a record number of 115 trainings  uh training Engineers this year uh because we   foresee in all our areas there could be  a growth and we also find our internally   trained and groomed managers are performing  better both in terms of quality and attitude   and Engineering depth so we found people who are  coming from outside competitors I I mean with all   district uh meant we've been seeing in one of  those attitude or quality Consciousness or the   productivity so our team is more and more  believing that our internal training being   now very strong both we are in Emmys also who are  taking a general manager for training uh recently   while in civil we have the team for last four or  five years so our internal training has now become   pretty strong we have extraordinary examples even  3D models 3D printed models and other things will   teach our Indian engineers how to handle American  projects and American Construction standards which   is never taught in schools so we are also putting  a learning management system in place which will   enable the knowledge transfer across the people  from Seniors to Juniors and these initiatives   should reduce one is our cost of Manpower and  because all these people are under uh future   trainers managers they also have a good uh what  you call career path and might make them stick to   us better of course we still have a nutrition at  par with the industry somewhere around 40 to 15   percent that happens because this is a niche skill  especially in the field of mes the simulation and   robotic knowledge is very limited and there  also again we started at internal training   of a batch of 20 people and within a year  we are seeing them able to handle at least   complex projects so going forward also will  be investing on at 600 to 200 resources 150   research per annum depending upon the workflow  and you know lines of new lines of operations so you may see utilization of the 115 people  when do you expect the full utilization what   is the current utilization we are thinking of  this new hiring new hired people see new hired   people in the year one will hardly contribute  anything because even if they are ready our   people are very very careful about involving  them in direct projects they will be doing   mainly the uh leftover workout Corrections  work which comes back from the client and   they get a feel of the project they get the feel  of where to interfere or where to take this help   of seniors because the work what we do is very  I mean important any mistake in that can result   in thousands of dollars of last Fabricators  and it can even come back as a back shots   so we generally in the year one don't consider  any output from them uh six months at least zero   maybe the second half we consider around 20 25  outputs on them so that is typically the case oh okay so the next question is if you can talk  about so you have talked about via shortlisted   the two three companies for the acquisition and  we are looking at a member design and member   connection design uh these areas so these uh the  the two three acquisition candidates are these   small companies like maybe under 10 million  dollars where we are only acquiring them so   that we get uh access to customers or are they  companies which are much bigger maybe of archive   or maybe a little lower than R5 where we are  also looking to get a lot of trained employees   if you can talk about this fact now we are open  but there's no need to acquire huge huge Beyond our path which will enable us to grow by creating  Indian Engineers who will be able to handle that   work at a much lower price so there's no point  in acquiring a 100 member design company there   and then uh finding what for itself might  become a problem so anything between 10   to 30 employees size which will be fall in  the typically five to ten million bracket   is what we are aiming it and as you know we  are a cash rich company completely Term Loan   free working capital free and we rather have  more than 30 gross uh cash on hand so that   is will be used mainly to acquire the company  uh company or companies whatever because most   of the spectral engineering and Architectural  firms are a reasonable specific like somebody   in Florida will take care of companies in  uh that part uh company in Atlanta would be   doing most of the architectural sexual work  in that uh area so by acquiring one or two   companies then either we set up offices in  different cities or make some Davies or uh I mean relations so that we spread across the  country that is USC the other uh game plan so   the equation typically can be sometimes as small  as 3 million in a small City but we are acquiring   a decent to be company it could be in the 5 to  10 million The Sweet Spot is five to six million   uh and not one acquisition probably won't start  with one and once we have a team in place and   uh businesses started establishing maybe making  couple of more Acquisitions in different cities   make it better business sense so my that my final  question is the Hindi uh press release you have   talked about uh we are expected to get 20 000  kind of uh orders so uh the coming quarter so   if you can just help us understand uh typically  this will mean how much in say rupees crore what   was the similar number last year and also if you  can talk little bit about competitors may you   highlighted very clearly that in civil we have a  clear advantage over other players but say in NES   in automotive there are a lot of players in India  who are much enlisted space Also who are much   bigger much more experienced than us so is there  a particular soft segment like maybe Robotics   and uh any other new segment where we have a  significant maybe diw significant Advantage even   of bigger player compared to bigger players and  not comparing TCS but the mid player so these two   questions if you can ask no no don't get carried  about 2010 figures the 20 2010 figures jobs we   have done several of them in the last few years  each 20 000 pennies typically close to a million   dollars so I think when this press note was made  the meaning was that we are about to grab some to   such projects so we have done even projects which  are 20 35 000 uh thumbs also so that is uh your   question one uh coming to your second question  of Nish area and the competition yes there are   several big players other than mold Tech in the  field of mechanical engineering but in the mission   area of baw and a further missionary of electrical  vehicle Mission baw we are first among them and   we have been compared even with the tatas uh in  some of the projects which we got in Europe and   Mexico we are our competitors are TCS also data  technology sorry data Technologies and similarly   even onward and uh all these CC CSG Technologies  I don't access care but whether they are into they   are more into CAD work I guess uh electronics and  other CAD related work they are not into negative   civil or not into uh baw so baw itself is a niche  area in that there are I would say three or four   major players we can be considered almost in  par with them we are not uh compared to let's   say data Technologies small Tech is uh very small  that's not the case because we also have about 200   to 20 people probably Tata technicalities where  I think 400 people uh onward might have another   200 250 people so we are at par with them in size  and inability to execute and in fact we are first   among them I don't know whether they had done it  before but we are uh first people one of the first   people to do the EV platform for Tesla baw way  back in in 19th so that credentials had to our   you know marketing efforts and you believe this  piw itself is good enough for us to scale this   year no it's not we can't imagine to reach 100  million or 50 million in BMW never it might end   up as a maximum 10 to 15 million dollars uh  10 million to 15 million per annum kind of a   segment but that gives us an entry into the key  area see in BMW what are you doing we are doing   the fixture design the robotic designs for the  manufacturing lines of the automobile companies supplier is rubbing shoulders with the  automobile companies and here not only   does these Robotics and features for the  online manufacturing of the car but he will   be involved in Interiors exteriors uh you  know other aspects of design of automobile   which we are not into so by working with  this gear one we will be able to penetrate   into those fields also because the software  knowledge and domain knowledge are similar thank you   thank you our next question is from The Lion of  human from gen Z advisors please go ahead sir let's say hey month your line has been  unmuted please go edit the questions   now my questions are answered thank you thank  you we'll move to the next participant our next   question is from the line of pulkit single from  Dallas Capital Management please go edit your   questions thank you for the opportunity so  the first question is yes hello so the first   question is about the CES itself I mean this is  a very Niche area for steel detailing detailing Market itself annually and how much of it is  currently being done in-house bike Fabricators   and how much is outsourced and also like within  the outsourced like how many players are there   typically and it is largely USB for or India is  a larger chunk just try to get a sense of that   place market yeah exact numbers the whole  size of structural detailing in general is   around three percent of the construction cost  of the building so if you have the number of   what are the commercial buildings or industrial  buildings or even high-rise buildings schools   and hospitals which would be I will try to get  the information probably runs into millions of   dollars so in that three to four percent  would be the cost of detailing so this is   a huge Market but currently us itself has  majority of the chunk the outsourced by in   my opinion would be less than 20 percent because  uh as I explained during my almost one hour call and people go with your credentials and what have  you done before so it's like chicken and egg So   for anybody to establish themselves as a reliable  player one is the cost Advantage you give and   then try to grab some work and then uh but over a  period of time you need to Showcase your abilities   in designing and drafting detailing complex  structures involving configuration geographical   geometrical configurations and then you will be  recognized as a one of the reliable detailer so   that typically takes a long time and majority of  the companies have operate before they reach that   stage so the mom and pop companies which started  by a couple of technocrats are with a few people   they generally die within that phase so their  leftovers or maybe eight to ten companies in   India with average head count of let's say uh 200  on average whereas we have more than 500 people in   level maybe for juice is another private company I  know which has more than 500 located in nashik so   like this uh there are only two three players in  India and other countries where this detailing is   done in Romania and then Indonesia and Philippines  to some extent but there again the cost of Labor   and uh Engineers is much higher so they are also  losing the advantages for whatever Arbitrage and   slowly it is becoming a few countries other  than uh us but even today in my opinion 75 to   80 percent of the detailing work is still done  in within USA at a higher prices because when   a fabricator is using the detailing services he  would be definitely interested to save cost but   he will not forego quality and reliability at  the cost of that savings so still majority of   the work is done in US is my guess understood  and majority of the growth when you look at it   is it coming from market growth itself or more  of increasing Outsourcing latest driving your   Revenue growth yeah actually if you ask me our  growth is coming through adding new clients at a   better place than before uh in civil I am talking  because uh our credentials are established we have   been receiving Awards of excellence in detailing  from several trade bodies uh on off together and   uh that we are trying to advertise in the  construction trade industry magazines and   that is in turn giving us credentials and  new business from new Fabricators or bigger   business from our existing clients a bigger  project so these are the ways we are growing   as at present market growth I won't say it is a  material but if Market also is in the positive   side we would be able to get bigger projects more  of them at a better price but if the market is uh   dampened which is not the case as of today if  the markets dampen probably we have to struggle   a bit and do more of like work to grab the bigger  projects So currently uh we are in the I would say   tier two is not tier one in USA a tier one may  be the local huge companies who have established   over under I mean 30 40 50 years so going in the  direction of uh high value add is through sexual   designing and architecture that is our Focus  now because that gives us direct contact with   the GCS and when they decide they can tell the  fabricator use multech for connection design use   them because they are our designers they you  they will provide the connection design they   will provide the detailing work for you and that  influences a more Fabricators to command seek our   services so that way it will be a positive step  an acquisition of uh structural architectural will   even enhance our current line of detailing and  drafting services thank you sorry to interrupt   Mr pulkit may we request you to rejoin the  question group of follow-up questions thank you   our next question is from the line of harshit  singhania from bu research please go ahead uh thanks a lot for a detailed  call and on the clarification   the question is on the mechanical side now the  mechanical today is roughly around 20 percent   of the overall high energy says that BIW would  be a larger part of it but this model checks   your routine that going forward uh I mean  vote from three to Fourier point of view   do you expect this mechanical to be a larger  key given the Tailwinds in the group and the   second one is that say we have done this for  Tesla uh so we are also trying to do more work   for Tesla in the coming years and the second  part is that should be recruit this business   promise perspective because your second second  part of the question I could not hear foreign yeah see as I mentioned in our restaurant itself  our invoicing cycle starts typically in the q1   but Peaks up in Q3 Q4 because the completion of  the project and benchmarks is essential for us   to do the invoicing some of the clients also  in turn invoice to date automobile uh vendors   uh tier one customers I mean vendors built  to automobile companies in a periodic manner   once they reach a benchmark so our benchmarking  starts initially the projects are decided in 5th   March once the new year is over a new budgets  are created and they get the design they get   the orders in FIB March and they in turn take  a month or two to do their basic design layout   and then they will be seeking Partners like us  to executively designing 2D 3D and simulation   so that happens sometime in April May so we get  Awards of projects in the month of April May and   actually they have to be executed over the next  six to eight months so uh whatever happens in   April May will be executed by 5th March or maximum  sometimes they are completed by December some of   them is overshoot into first quarter of the area  their financially so that is why our invoicing   picks up from Q2 so it Peaks up in Q3 and Q4 in  especially in Mechanicals in civil also majority   of the decision during the year-end or postponed  they are taken in the end of January kind of time   frame so those projects which come to the an  architect and structural designer they need   to complete that structural designing part  architectural part create the drawings and   then send over for uh quotation purpose from the  detailers happens in March so April May onwards we   get Awards again they're billing majority start  happening in the other quarters so that is why   cyclically even if you look at the last year  our lowest turnover lowest profits were in the   q1 so on that we have achieved 100 growth this  year is uh I mean for me it's a great saying uh yeah if we continue to speak on only to  detailing uh mechanical will catch up   in terms of percentage of our revenues from  currently 25 percent uh to maybe 30 40 also   but I also have a very clear cut idea  to make this acquisition to move into   structural designing and architectural  services in which case even civil might but at least from next one to two year point of  view or basically the contracts we are winning is   it fair to assume that the market demand Supply  is that 30 percent margin is something which is   maintainable as I said in my previous questions uh  this 30 person can even be improved as we progress   into higher value headlines uh certainly 30 now  will become our Benchmark we wish to improve that   this year by moving more into connection design  and moving executing more projects in mes but   acquisition probably even if it happened this  year uh probably it can only add members next   year onwards so once that happens we move into  architecture and structural uh the numbers could   be still better got it got it thanks a lot  uh and uh thank you Lord thank you thank you   I'll ask question for the question answer session   comes from the line of Mr kosher Mohan from  ashika institutional equities please go ahead uh can you just give me some light on what  segment will be leaving you with this bro   both the segments civil is growing at at least  20 25 and um in a maze we are anticipating the   growth also in the similar 13 range if some of  our plans happen so when the Top Line grows at   the base of 25 to 30 percent uh achieving uh you  know 40 35 to 40 percent beta is still possible   because uh better capacity utilization happens  as I was telling last year trainees this year   trainees there must have improved accountability  and they will also be contributing a bit of their   productivity in this year so capacity utilization  per person per month uh numbers hours per month   effective hours are also improving now gradually  so with that there will be differential increase   in cost of Manpower but the pace at which the  Top Line growth may happen can improve the   ebitda Intel okay so I have a last question uh  I just wanted to understand uh the recent team   that you have recruited it will be taking around  one year of the training I think I hope that there   are already six months for four to six months old  so the output will start off from the team uh next   year is what my assumptions are right you see we  are continuously taking people it's not that this   year the number has increased last year also we  took around 75 80 people and they said it's 115   so the last year 1890 people would become fully  productive more or less fully productive this   year and the guys who joined three four months  ago probably they will start contributing from   third quarter onwards uh in a bit uh in a you know  20 25 of their output and then probably they will   pick up face from next financial year so like  this is a psychic earlier our input used to be   40 to 60 Max and during covet actually we stopped  also we didn't even take a single batch in 2020 I   think 19 20 uh 2021 and maybe a little bit in 2122  for 22 23 we have taken considerable people and 23   24 batch also now currently we are taking 115. so  last two years we are ramping up in anticipation   of uh our growth in both the segments which is  coming true coated and the last and final question   sir any inorganic growth that you are looking into  sorry any inorganic growth that you are looking   into any of course that's what I've been talking  to you uh that we are in the search for a proper   fit in sectional designing and Architectural  form in USA where it talks with uh two three   of them but we are very clear what we want and  how the synergies will establish so our city is   still on and definitely hope I sincerely hope in  this year we will finalize on at least one target   so this will be funded through the cash that we  have at your balance yeah yeah we have enough cash   and no working capital no Term Loan so it's easy  to raise the money for any required funds foreign thank you thank you due to time constraint that  was the last question of our question answer   session I would now like to hand the conference  over to the management for closing comments   uh I sincerely thank all the participants who  have taken their time to understand our company's   prospects and future and I also thank antique  for giving this opportunity and to the moderator   Mr Davis sorry moderator support from Jewish  romantic I thank you all and have a nice day   thank you on behalf of antique stock broking that   concludes this conference thank you for  joining us and you may now disconnect

2023-08-08

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