Ceinsys Tech Limited (538734) Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to Ceinsys Tech Limited Q2/H1 FY '26 Conference Call, hosted by Arihant Capital Markets Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Jyoti Singh. Thank you, and over to you, ma'am.

Thank you, Saksha. Hello, and good morning, everyone. On behalf of Arihant Capital Markets, I thank you all for joining into the Ceinsys Tech Limited Q2/H1 FY '26 earnings. Today, from the management, we have Mr. Prashant Kamat, he is the Whole-Time Director, Vice Chairman and Chief Executive Officer; Mr. Surej K.P., he is Whole-Time Director and CEO; and Mr. Kaushik Khona, he is the Managing Director in the Operation; and Dr. Abhay Kimmatkar, he is the Managing Director; and Ms. Amita Saxena, she is the Chief Financial Officer. So without any further delay, I will hand over the call to Mr. Kaushik Khona, Managing Director, India Operations, for his opening remarks. Over to you, sir.

Thank you, Ms. Jyoti. Thank you, and good morning, everyone. It is a pleasure to welcome you to the earnings conference call for the second quarter and the first half of the financial year 2025-'26. Let me first thank our host for today's con call, Messrs Arihant Capital. In the interest of some of the people who may be new to the company, let me first start by giving you a brief overview of the company, followed by the performance highlights for the quarter and the half year under review. Ceinsys Tech has been recently branded as CS TECH Ai, while the corporate name remains as Ceinsys Tech Limited. We are a leading technology solutions provider in the IT-enabled sector. We are acclaimed for our expertise in geospatial engineering as well as other engineering services and solutions. We offer a broad range of geospatial intelligence services, including data creation, data analytics, decision support system, enterprise web solutions. In the year 2022, the company strategically expanded into mobility sector by acquiring AllyGrow Technologies, a specialized engineering service provider with a strong international presence. This acquisition allowed the company to enhance its capabilities into manufacturing technology and mobility engineering solutions, covering the entire product development process and industrial automation for diverse sectors such as 2 and 3 autowheelers, passenger cars, commercial vehicles and off-highway equipments. In the year 2024, we acquired a geospatial business of VTS in U.S.A., which was majorly operating into telecom domain. Since then, we are identifying some more targets for inorganic growth to expand our horizons into the domains where the company is already operating. That is the geospatial and engineering services and technology solutions, for which the company has already mobilized almost USD 28 million. We serve prestigious global clientele, including large corporates, OEMs, asset management companies and government bodies, highlighting a robust reputation in both geospatial and manufacturing sector. With offices in India, United States, U.K. and Germany, the company combines local expertise with a broad international reach. Additionally, the company is venturing into software product development and emerging technologies through a vertical focus on artificial intelligence and machine learning and embedded electronics. This vertical emphasizes the development of AI and ML-enabled applications and solutions to enhance our delivery for the existing domains at the outside, reflecting the company's commitment to innovation and maintaining a competitive edge in a dynamic technological landscape. Now, let me come to the highlights of our financial and operational performance for the second quarter and the first half ended 30th September 2025. We are pleased to report another strong quarter, our best second quarter so far marked by record revenue and EBITDA. For the quarter under review, our operational revenue grew by 82% year-on-year to INR 164 crores. EBITDA grew by 112% year-on-year to INR 36 crores with an EBITDA margin of 21.77%, reflecting an improvement of 310 basis points year-on-year. Net profit stood at INR 26 crores, representing a growth of 120% year-on-year with PAT margins at 15.72%. This performance continues our trend of steady sequential improvement with consistent quarter-on-quarter growth for more than last 6 consecutive quarters. For the first half of the year, our operational revenue grew by 95% year-on-year to INR 320 crores. If you can recollect, the performance of the company for the year 2023-'24 on a consolidated basis was INR 254 crores. So the first half of this year overtakes that by substantial numbers. EBITDA increases by 119% year-on-year to INR 66 crores with EBITDA margin at 20.56%, which is an improvement of 226 basis points year-on-year. Net profit for the first half was INR 57 crores, a growth of 143% year-on-year with PAT margins at 17.93%. The growth in both revenue and EBITDA margins was driven by successful execution of projects, which have contributed to stronger margins. Additionally, our ongoing initiatives to improve operational efficiency have enabled us to manage higher volumes more effectively, further boosting our operational performance. As on September 25, our total order book stands at INR 1,092 crores, reflecting a healthy demand and strong customer confidence. We also contribute to maintain a solid financial position with an operational cash surplus of INR 47 crores. Execution of Technology Solutions projects saw 2.5-fold rise in quarter 2 of FY, this year, '25-'26, rising from INR 36 crores in the corresponding quarter last year to INR 88 crores this year -- this quarter, underscoring strong demand and enhanced delivering capabilities. The Technology Solutions segment contributed 54% of the total turnover this quarter, reaffirming the company's strategic focus on the high-value digital initiatives. Our geospatial business also delivered healthy growth, driven by increased focus on water, IoT and enterprise solutions. The geospatial and engineering services projects grew by 39% year-on-year from INR 54 crores in quarter 2 of '24-'25 to INR 75 crores of this quarter, reflecting sustained demand and operational excellence. Further, our net working capital cycle stood at 160 days during this quarter with improvements in recovery since October '25. And further expected recoveries in the next 2 to 3 months, we anticipate the cycle to reduce to approximately 120 to 130 days in the coming quarters. We invested INR 21 crores towards the technology innovation and business development to further expand our presence in U.S. market with INR 13 crores out of this already expensed out towards a profit/loss account during this quarter. During the quarter, we secured several major contracts, which underscore the strength and diversity of our offerings. These include an AEC software development project valued at INR 21 crores, which also includes a 3-year enterprise license commitment and then 2 project management consulting contracts valued at INR 115 crores and INR 11 crores, respectively. These wins reflect the breadth of our capabilities and our continued success in securing large and strategic projects across multiple domains. In closing, we are focused on driving growth and continuing to deliver on our commitments. We remain optimistic about the future and look forward to sharing more updates as we progress. With this, I open the floor for question-and-answer session. Thank you.

[Operator Instructions] The first question is from the line of [ Harshal Mehta ] from [indiscernible].

Am I audible?

Yes, sir, you're audible.

Congratulations, sir, and congratulations to the whole team for an amazing set of numbers. Pardon my ignorance, sir, if I have missed any information regarding this question. But I just wanted some clarification regarding the ESOP allotment to Prashant sir and some subsequent events after that. As I believe in June '24, Prashant sir was allotted roughly around 6,50,000 options at INR 10 per share. And later on in Q4 FY '25 con call, Prashant sir clarified that he will be surrendering the remaining ESOPs because of the new CEO coming in. And again, in, I guess, July '25, 4,00,00 more options were issued to Prashant sir at INR 10 per share, I guess. And recently, in the result announcement, I guess, Prashant sir -- so it was confirmed that Prashant sir has resigned recently. So just wanted clarity as in how are we looking at this particular scenario? As in the issue price that we are offering, and in between also, we have offered some ESOPs to other people also, but that -- those were subsequently at higher rates, considering this particular thing. So any clarity about this, if possible?

Sure. If I can just submit, first of all, let me clarify, the ESOPs to all so far has all been allotted only at par. There have not been any differential pricing. That's point number one. Second point is Prashant sir has been granted the balance ESOPs during the June 2025, which was part of the deliverables to him. It is only in respect of the future ESOPs, which were expected are not going to be given to him because he himself has clarified that he will be active with the company till December '25. And thereafter, Surej sir, who has already been appointed on the Board, will take over as a part of the operating -- the CEO of the company -- of the group. So there is absolutely no confusion. It is only whatever was committed and based on his performance, whatever was due, has been allotted. The next tranche of, I think, around 2,00,000, which is not going to be due will not be granted to him. That is what he has expressed in the, I think, previous investor call. I hope that clarifies.

Right, right, sir. And sir, just one small thing. I guess, previously also, when those ESOPs were allotted, so whenever there was no notification regarding any kind of KMP selling this particular shares, and the stake was substantially decreased over the time. So just to highlight, if possible, then this can be addressed for future communication, if possible.

So sir, whatever communications are required of the allotment has already been made. The last allotment, which was made and due was already...

No, no, not related to allotment, sir. I was saying about the selling of shares.

So I don't think the selling of share is what we are required to be providing to the investors because it is -- once the shares are allotted, it is up to the shareholder whether he wants to retain or he wants to sell. However, as of now, also, he holds substantial shares, which you can see from the shareholding list, which we have already filed for 30th of September, okay? And I want to say there is no lock-in for any of the ESOP shares once allotted, and it is up to the allottee whether to retain or not to retain.

Absolutely, sir. So I was under that impression that might be, if any KMP is selling, then there should be any kind of notification. That's why I just wanted to add.

No, I understand. I don't think there is any obligation to that.

Congratulations, sir, once again for great set of numbers.

The next question is from the line of Jyoti Singh from Arihant Capital Markets Limited.

So just wanted to understand like our working capital cycle currently stand is around 160 days. So what are the near-term steps to bring it down to 120 to 130? And also, on the employee cost side has dropped 37% comparatively last year. So what structural efficiency enabled this? And if you can share some highlight on?

So thanks for your question, Jyotiji. The working capital cycle for this quarter ended has been at 160 days. And in fact, in the operational highlights in our investor presentation also, we have mentioned that during the first 2 quarters, typically, the recoveries are slow because many of these recoveries are due from the government projects. And typically, the government projects disbursements happened during Q3 and Q4 substantially. We have already got one tranche of substantial recovery in the month of quarter, which is after the September end. And we have also got a feedback that in the month of November, December, January, we should be able to get a recovery of almost all the overdue debtors. And therefore, we believe that at one point of time, the working capital cycle would be somewhere near 100. But as a normal kind of cycle, which we predict for the purpose of the business in which we are and the government projects which we are, we have been maintaining a working capital cycle of around 120 to 127 days even in the past. Therefore, with the kind of -- the recoveries already happened in one tranche as well as the recovery expected in the next 3 months, we expect that the working capital cycle will remain between 120 to 130 days. However, we will try to bring it down further. And that could happen more so in the quarter 4. I hope I answered your question, Jyotiji.

Yes, sir. And sir, on the EBITDA margin side that we have -- at this time, we have performed really level. So what's our future target?

So I'm happy that you have noted that our EBITDA margins are improving. And if you see the last 6 quarters, the EBITDA margins have steadily improving. This quarter, we have seen a substantial breakthrough. The EBITDA margins have improved by more than 247 basis points and 310 basis points on a year-on-year basis. I think it is only because the old projects, which had lower margins, are getting completed and the new projects, which are having higher margins, are being executed. And that I think -- and we also have the statement which we mentioned in the beginning, opening statement that our focus on the technology advanced projects like IoT or artificial intelligence/ML projects are going to contribute a higher margin. And that is where we see that even the turnover has also been steadily increasing -- so even in this quarter, we have seen that our turnover contributed on the technology solutions has been higher, which also contributes to the overall weighted average percentage of EBITDA. We expect this to continue. However, we don't give any kind of future outlook on what numbers it will be there. But based on the numbers which we have -- with the project which we are pursuing, we expect this to continuously, steadily improve.

The next question is from the line of Nikhil Chowdhary from Toro Wealth Managers Llp.

So I want to understand, sir, what part of the unbilled revenue in this quarter has been carried forward from the last March numbers? And second thing, how much of our billed receivables are pending more than 6 months?

So if you look at billed revenues more than 6...

80%. Actually, our 80% debtors, which we have is less than 6 months only. Balance 20% is -- 10% is more than 6 months, and rest all is more than 1 year. So 80% of the chunk of debtors is less than 6 months.

Okay. Okay. And what about this 20%, like when do we expect to get them, like...

Sir, it is expected that we will be getting funds more in the month of March and February, where most of the government departments do get funds. So we will be getting -- we will be able to recover this during the year-end -- financial year-end.

Okay. Okay. And what part of the unbilled revenue that was there in March has been carried forward in this year. This...

Sir, unbilled revenue is never like that. It has been carried forward because it is a continuous process, UBR gets generated and the billing also is being done. So there might be a normal chunk or small project might be there, where further billing or something is stuck, which is continuous, but that is not the major chunk.

And we were expected to receive some orders probably, that has been long pending, actually. Any update on that, like...

So I think we are on the -- the traction is on it. We are expecting those new kind of -- signing up of the new orders also within next -- I think quarter 3, quarter 4 is what we are -- we already projected. During the quarter 3, quarter 4, we expect some major projects also to be awarded to us.

And then there is a big pipeline, which we have built up over the year. And usually, historically, the numbers are like that. We've been getting orders maximum in the Q4, as the government closes their decision-making and the tenders. So that's the national trend. Yes, Q3, we have a good pipeline, which we will close, yes.

Got it. Got it. And last question, could you just share color on the industry, like how -- what has been the like traction in the -- under the water projects that we are getting payments with respect to the schemes that we are executing? Just overall, although you have explained it in the initial comments and now in the questions. So how it has been compared to last 6 months, 8 months, 1 year back? Is the situation better or like because other companies are like seeing delay in payments and all, so just wanted some color how does it pan out versus last 8, 10 months? Is it better?

So if I can answer that, we have already seen that there was a lull in last 2 quarters because the JJM schemes were also being kind of reviewed by the government; however, the complete review is over. And that is where we saw the first tranche of major recoveries happening in the last week of October, and that is what has given us the vision as well as the confidence that the balance monies are also getting disbursed in these 3 months. As regard the water projects, obviously, they have also -- the kind of bids which we have made, those also should now open up. And as what Dr. Abhayji mentioned, most of them should be kind of awarded during the quarter 4. Some of them could be quarter 3, quarter 4.

[Operator Instructions] The next question is from the line of Ayush Agarwal from MAPL Value Investing Fund.

Sir, just a follow-up on the previous participant's question. I wanted to understand -- I mean, if question was correct that of the INR 149 crores -- sorry, INR 130 crores of unbilled revenue as of March, how much would have moved to the billed receivable? And how much still stays in unbilled? Because that will help us understand that of the H1 revenues, how much has moved to unbilled?

So just to -- I think our CFO has already clarified that majority has also been -- already been billed because typically, in our project cycle, what happens is that the unbilled revenue is only a temporary phenomenon where we have completed the execution of a particular event, and then, the milestone for billing is achieved in the next quarter. So I would say out of, let's say, INR 135 crores UBR, we would have -- more than INR 125 crores would have been billed so far. It is only 1 or 2 schemes where it was under the lull, as I said, part of the old projects, which would have kept pending. But those also are expected as already clarified by our CFO by March. So I think INR 8 crores to INR 10 crores out of INR 130-odd crores was pending, but that is also under progress, and that should also be built.

Actually, it's a continuous process. The UBR gets -- as we progress, we deliver -- we achieve the milestone, UBR gets generated and the invoices are also booked continuously.

Just a follow-up on this, you mentioned that there were some recoveries in the month of October. Can you quantify that number?

We have already received 1 major tranche of around INR 40 crores and further recoveries of almost around -- small other recoveries of around INR 20 crores has already been made, so -- in the month of October -- last week of October.

Understood. Sir, second question is on the acquisition part and also going beyond water and Maharashtra. So this is a very big concern that a bulk of our order book revenue still come from Maharashtra from the water department. What are we doing given we have a presence in UP, we have an office in Lucknow, and UP is an equally large state with a lot of schemes happening there? What are we doing to go beyond water and go beyond Maharashtra? And any update on the acquisition?

We're building already outside market...

Yes. Kaushik, I will take this. See, it's a spread, and it's a sinusoidal kind of a phenomenon. JJM has funded the project, and Maharashtra was the first major beneficiary out of that. We've got projects from UP as well as Maharashtra and other states. So we are not only focused in water, we are also having good presence in transportation, infrastructure, AEC and energy utilities. So you can see the projects which we currently are executing. One is major project in energy, we are executing in Maharashtra as well as UP. And there is one project called JJM we are executing in UP. We're expecting the extension of that project. The funding was from -- as Kaushik has mentioned that, there's a lull in funding as well as the approvals of the existing projects by the central government. So it's not only Maharashtra focused thing, it's a country-wide phenomenon. Having said that, we are also focused into transportation. We just bagged a big project from MMRDA, which is INR 115 crores. I, again, said we have a big pipeline, which is, again, with water as well as the other domains what we have. I would not divulge into those details, as it's a forward-looking statement, but JV is a good pipeline wherein we will definitely get a balanced kind of projects in other domains as well. I hope I've tried to answer your question.

And then what about the acquisition, sir?

Kaushikji, please...

Sorry, what about?

Acquisition.

The acquisition. Okay. Surejji, would you like to take this? Okay. I think he is -- so acquisitions, we have been working quite actively since last 3 quarters or 4 quarters. As already explained last time, 2 of the targets have been kind of on the complete due diligence part. We are expecting some kind of way forward within next 1 or 2 months. Hopefully, by quarter 3 or quarter 4, we will be able to give some kind of announcement about the acquisitions, which we have been pursuing. And as already clarified in the past, the acquisitions will be in the same field of the business segments, which we are into, which is -- one is into the geospatial engineering solutions and second is into the technology upgradation. So we are focusing on that.

Understood. Sir, one final question from my end. On the standalone part, we are doing very wonderful execution, but on the consol level, we are losing almost INR 6 crore, INR 7 crores of EBITDA every quarter. And that's a significant chunk. It becomes INR 25 crores on a yearly basis. So when can we...

Sir, sorry to interrupt. Can you please come again in the queue?

Just the final question, it's almost complete, madam, please. It's for...

I got it. Let me attempt to answer this. We have also clarified that the subsidiary, which has not been reporting positive performance is only because we are investing heavily into the business development over there. So the kind of EBITDA losses, which you see, are more to do with investment into the business development and some of the efforts into the IP, which we are expensing out. So if you look at this quarter also, we expensed out around INR 7 crores INR 8 crores, and that is what has been happening in the last 2, 3 quarters because we are substantially investing into the business development in U.S. market. The result of this is what we are expecting, as we already clarified in the previous investor call, in the quarter 4 of this year and quarter 1 of the next year onwards, we should see a bigger pipeline. There are certain large contracts, which are under negotiation also over there, and we expect to kind of -- give some kind of update on that in the quarter 4. So the investments, which are happening, and the standalone balance -- standalone results are better than the consolidated, your observation is right. But I think what is the EBITDA negative is more of investment rather than expenditure.

The next question is from the line of Keshav from Niveshaay.

Sir, my question is that the trade receivables has risen to about INR 131 crores. Sir, if you can elaborate on the average payment terms with the suppliers and the credit period we typically operate on, so -- if you could give some color on that?

So thanks for your question. I think your observation is correct. The trade receivables are about INR 130 crores. And we also clarified trade payables.

I'm talking some more trade payables.

Yes, that's correct. So it is all -- first of all, these are based on the deliverables, which are as per the milestones their invoices are raised. All the receivables have typically payment within 30, 45 days. It is only because of most of these receivables are towards the government projects, where because of the funding, which they have not been able to secure from the central government that the funding was delayed, and therefore, the debtors are there. However, as I mentioned, some of the debtors have also been kind of recovered in the October month. And as just to repeat, October, November, December, January, we should see a lot of recovery of the debtors. And typically, the debtors cycle should be between 30 to 45 days. The UBS cycle then adds to it, which is why we said around 120 days is the overall cycle.

Sir, actually, my question was towards the trade payables to the suppliers.

Okay. I'm hearing as trade receivables. So trade payables are those payables which are linked to the receivables. There are certain contractors who we have negotiated to pay based on the payments which are received from the -- from our clients. So if you see the total creditors have also gone up, and the total creditors have gone up by almost INR 100 crores, while the total receivables have gone up by around INR 140 crores. So these creditors, which have gone up is only because of the increase in creditors by around INR 58 crores, which are linked to the back-to-back payments. So once we receive the payments from the clients, the payments will be made. I think...

We made a major -- even we have cleared a major chunk of payments in the month of October.

I hope we answered your question.

The next question is from the line of CA Garvit Goyal from Nvest Analytics Advisory LLP.

Congrats for a good set of numbers. My first question is on the order book side. I agree we are saying that in Q3 or Q4, we will be getting some bigger orders. But I want you to share some size of these orders, like what kind of size we are expecting? And one more thing, last quarter, when the con call happened, you mentioned like you will be getting some orders in 2 months, right? Why that didn't happen, sir? So I want you to put some color on that. That's my first question.

Abhayji, should I answer?

Yes, yes. I'll just take, and then, you can extend it on. So we -- as I said, we have a pipeline. There are orders that are process of tendering. There are process of approval for the projects within the department and the budgetary sanctioned by this. So this is a long cycle. However, there is a good buildup of the pipeline, and we have already submitted the bids. Those were not closed, which we were anticipating last quarter. So those are now coming up in this Q3. So -- we may find this quarter with the closures, which we are pending in Q2. And then, again, I said that Q4 will be the largest quarter for us for any closures. Whatever numbers we have projected, those will be definitively fulfilled. We will even go beyond that. That's what I can say at this point in time. Kaushikji, over to you.

Yes. I think that answers the majority of your question. And what you asked about the ticket size. So based on our past experience of last 3, 4 quarters, you would have seen that we look at bidding large orders, minimum ticket size of, let's say, INR 50 crores. Some of the orders, which we are in the pipeline, could be in the range of around INR 100 crores, INR 150 crores also. So as and when we are able to kind of fructify those orders, we'll be able to declare that as a part of normal procedure, which we mentioned with the stock exchange. There are certain small orders, which keep on coming, for which either the follow-up action was done, but they are not significant for the efforts. We are only focusing on right now building up the major order book as what Abhayji is mentioning. And we also clarified in the previous investor's call that our pipeline is substantial, and we expect in the quarter 3, quarter 4 some major sign-offs happening in the range of around INR 700 crores, INR 800 crores, was already clarified during the quarter 1 call.

So this INR 700 crore, INR 800 crore is what we have bidded for, right?

Yes. No, we have bid for more. We are expecting the closure of those bids, which we expect in quarter 3, quarter 4 is what we are mentioning. There are certain orders what we have bid or we have done a presales for it, which will take some time. It may not close in quarter 3, quarter 4. That pipeline will continue. However, the closure what we expect are in the range of this amount.

So out of that INR 700 crores, INR 800 crores, what is the success royalty there? Because -- like what is the competitive intensity there?

I think that will be all subject to the actual numbers. Abhayji, you want to comment on that?

Yes, but -- see, there are 2 parts of that. One is you bid for L1 side, and there are a lot of competition. One, some of the technology projects where we have a niche kind of offerings and where we have an advantage over winning the trend. So I can say out of the INR 700 crores, INR 800 crores, we can win up to 70% to 80%. I cannot put a number to that, but that's the probability we can expect to have.

Understood. And did we lose any orders to our competitors in the recent times?

Not really. We -- whenever we find that we could be outdated, we do not want to participate by putting our bid. Where we have a niche technology and where we find that we will have an advantage at the pricing and all technology that is both -- advantageous to both sides, so then we actually go and bid. So we do a lot of due diligence. We do not bid every project. There are so many projects, and there are so many players that come, but we have a very niche kind of offerings, and we have capabilities and unique advantage over others, those we bid. In fact, we work closely with the customers on those bids, and then, we go ahead with those projects. I hope that answers your question.

Got it. And sir, lastly, on the inorganic acquisition, last time, we said about -- like we will be doing it by December. We will be announcing something. But now we are saying it will be in Q4. So I'm not able to understand why this delay is happening, sir, quarter-over-quarter.

Sir, I think I clarified it. I didn't say quarter 4. It will -- it should happen in next 1 or 2 months. So I'm not able to pinpoint a specific time line by which it should be closed because it's a large exercise. It requires complete due diligence. We don't want to just venture to acquire a company just for the sake of it. And I think we are taking all the necessary precautions so that we sign off a deal which is favorable for us. So hopefully, we should get something in December. Otherwise, we'll keep track of it, and then, we'll communicate in the next investors call.

The next question is from the line of Darshil Jhaveri from Crown Capital.

So a lot of people have asked the questions that I wanted to ask for. So just 2 parter from my answer, sir. So the order inflow that we are saying that INR 700 crores, INR 800 crores. So we maintain that JJM scheme INR 400 crores and the rest keep INR 400 crores, right? That's the number one question that I have.

Yes, I think that's correct. Those are the indications, which we have already provided. We are right now not making any changes in those estimates.

Okay. Okay. Fair enough, sir. So, sir, just to elaborate on that, sir. So JJM, I don't know if a lot of peers or anyone else is starting to get orders. So, is it a possibility that it's even further delayed because it's not even in our hands? We may have bidded for it, but if the government doesn't allocate, then we cannot do anything. So is it a possibility that this year, it might be just INR 400 crores and that JJM project we might get it in FY '27? Because the -- we are not in the market even there. So we could really be grateful to hear your perspective on it because -- yes.

Abhayji, would you like to take it?

Yes, yes. I will. So see, what -- JJM is an opportunity -- was an opportunity, and then, that will continue for next 2 years, but we are not completely relying on that. Having said that, we have built up a good funnel out of -- outside of the JJM or outside of the water. That's what I said. We have a very good funnel in the energy segment and in the municipal segment. So a lot of projects we are vying -- we would probably get. And then whatever number we have committed or what -- internally, what we have decided what we should do, that we are very much on the plan, and we would be disclosing all those. And whatever comes out of JJM, if that really happens, that will be an advantage. And that will be more than what we are envisaging to close this year.

Okay. Okay. Fair enough, sir. And sir, just the other question for the acquisition side, so what space are we looking at? Is it more to do with government orders? Or is it more like a private player? What is the size of acquisition that we are targeting? I don't want any firm answers, but a range would also do, like is it in this space and like is it more towards government policy because we had some reliance on government, right? So that's like...

So Kaushikji just clearly mentioned in his opening speech as well as 1 or 2 answers he had given. See, we are trying to identify a company, and we have identified company which is complementing to our offerings, which is geospatial engineering, what we call an AEC and the mobility side. Now, we are focusing on the geospatial and engineering side. There is a good market in U.S. Company, which has the good logos, good customers, maybe they are working with government in U.S. or private Tier 1 players, those companies we are vying for. And we have identified such companies. Those can be an Indian company, those can be a U.S.-based company. But those are the major targets. And we have really worked upon that very hard, people who are identifying who have done lot of exercise on that, and we are on target. Perhaps what Kaushik has already said, next 1 or 2 months, you may find something is happening in that space.

So what is the rough size of it, like, for example, an INR 50 crore company or INR 20 crores company, I don't want an exact figure, but a rough range, this is what we are looking at because we've improved our margins and everything very well. So will it be margin accretive, EPS accretive? Just any kind of color on that would be really good. This is what we are looking at. I know whatever closes that closes, but at least that's a filter for us.

Kaushikji, please, you can take.

So see, as I said, I don't want to speculate. We have -- and if you have seen our intentions, we have already mobilized $28 million, which is INR 235 crores. So our target is not to look at INR 2 crores, INR 5 crores, INR 10 crore companies, small companies. We are looking at companies which have a potential of either generating a revenue of [ INR 1,500 crores ], INR 200 crores is what we are looking at. So -- I mean, let's keep our fingers crossed. Let's wait for some more time. We have waited enough. And I think in next 1 or 2 months or maximum by next 1 quarter, we should be able to give some kind of good news.

Okay. Fair enough. Can I ask one more question, sir?

I think moderator would request you to come again.

Yes. Okay. Okay. Fair enough.

The next question is from the line of Kaushal Sharma from Equinox Capital Ventures Private Limited.

So my question on your employee benefit expense, which we -- I'm sorry I missed that part, your employee cost is around 36.9% in the last corresponding quarter that's been reduced to almost half...

Sorry, I can't hear you.

Hard to hear you.

Am I audible?

Now you're audible.

Yes. So my question on your employee costs, like the corresponding last quarter, you were having around 36.9% asset turnover, now it's drastically reduced to 19.9%. So what was the key reason of this drop?

So if you see the numbers, I think it's very clear. We have -- the overall employee cost has been stagnant. From an INR 35 crore of employee cost last year of same quarter, it was -- sorry, it is around INR 33 crores. And today also -- in this quarter also, it is around INR 33 crores. The overall employee cost is the same. What we have explained in the past is look at the turnover. So the utilization of the employee from an INR 32 crore worth of cost, we had achieved a turnover of INR 90 crores. This time, on an INR 32 crores of employee cost, we have achieved a turn over of INR 163 crores. This also speaks about the way we want to kind of project for a higher-margin business, which is a technology business. And that is why we see that we are trying to optimize. One element, which perhaps you would also as I -- if you are analyzing, in the previous quarters, I think in September quarter of 2024, as well as in the June quarter of 2025, there was a slight debit of ESOP cost also. So if you exclude that ESOP cost, you will still find that overall employee cost percentage has been improving quarter-on-quarter.

Okay, sir. And currently, we are having around INR 1,092 crores of order book. Sir, what is the execution timeline for executing this order?

On an average, it is around 18 to 24 months. And some of the projects, as we already mentioned in the past, there are O&M revenue -- O&M in-built into that, which will go up to, let's say, 2 to 5 years thereafter. So effectively, the project CapEx life cycle will be between 18 to 24 months average.

And what is the amount of O&M with that in the overall order book?