Jash Engineering Limited (JASH) Earnings Call Transcript

Good morning, everyone. I'm Siddesh Chawan from Ernst & Young Investor Relations, and I would like to welcome you to Jash Engineering Q1 FY '26 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. The recording will be made available on the website within a day, and the transcript of the call shall be made available subsequently. To take us through the results and answer your questions today, we have the top management of Jash Engineering Limited represented by Mr. Pratik Patel, Chairman and Managing Director; and Mr. Dharmendra Jain, Chief Financial Officer. Before we begin, I want to remind everyone about the safe harbor related to today's earnings call. Comments made during the call may contain forward-looking statements that may involve known or unknown risks, uncertainties and other factors. It must be viewed in conjunction with our business risk that could cause future results performance or achievements to differ significantly from what is expressed or implied by such forward-looking statements. After the end of this call, if you need any further information or clarification, please do get in touch with me. With that said, I will now hand over the call to Mr. Pratik Patel. Over to you, sir.

Good morning, everyone, and thank you for sparing your valuable time and attending this investor call. First, I would like to give -- inform in brief what has happened in this quarter. As those who have been able to go through the results posted on the NSE and BSE, you will see that the results were quite subdued in the first quarter, but this was also as a result of our decision to defer some deliveries to U.S. because of uncertainty relating to tariff and also certain deliveries which we could not take place. So mostly it was stand-alone of Jash Engineering, which has contributed to this situation at Rodney Hunt and Mahr and Waterfront and other subsidiaries. We have increased our revenue. However, in Rodney Hunt because of this tariff situation plus new intake of people, the losses have little bit increased over last year by $100,000. When we come to consolidated order book, our order book is still quite strong. We have INR 875 crore and our pipeline also is quite strong. We are entering into new markets like Vietnam, Japan, Israel and we are now trying for South Africa as well. So we expect the healthy growth to continue since we are expanding the market and the demand also is quite strong from the existing markets where we are. We have recently commissioned our new facility in Shivpad from where we are having today the investor call, and with this commission, we expect improvement in our output from Chennai facility and also the same facility will be using for WesTech, a company which we are acquiring, 90% of that shares of the company we are acquiring. The due diligence is at an advanced level. I would say we hope to complete everything by next week and include this company as our subsidiary by next month. However, the biggest problem today we are facing is the U.S. tariff uncertainty. Earlier, the tariff applicable on us was 25% plus 25% on stainless steel and as of 2 days back, this has become 50% already. So this puts a lot of pressure on the orders which we have already taken from America. We are talking to our clients. In some of the cases, they have agreed to partly compensate us for the increased tariff but that is not true for all the cases. However, we are trying to mitigate that by building a new plant in Houston. Earlier, we were going to build the office but when I was in the U.S. in June and when this was announced, 25% additional on steel and stainless steel, we decided to defer the plan to build the office and instead we are now going to first build the plant in Houston, and this plant was anyway supposed to be built up in '28 but now it would be built up in '26. At the same time, we are also increasing our capacity in Orange because in time to come, we have to increase our output from U.S. plant in the revenue of Rodney Hunt from the current 35%, to 30% to around 65% to 70% in the coming years. By doing these 2 expansion and by the acquisitions which we are going to do of WesTech and another company in the U.K. for which we are nearly the deal is done. And the process of due diligence will start within August. And I would like to wind up that deal in September. So with these 2 acquisitions and the expansion that we will do in America, we are sure to mitigate all the risks associated with this tariff situation over the next few years. With that, I would like to go on to the financials. As you can see in Q1 consolidated, our revenue has increased from INR 116 crore to INR 133 crore. Our gross profit has also marginally increased. However, as a percentage it has come down little bit 1%. Our EBITDA has gone down by 4%. And the profit before tax, last year we had minor losses, this year this has increased from INR 0.4 crore to INR 6 crore and profit after tax also -- before tax and after tax both has gone down compared to last year. Next. When you see the stand-alone, as I was explaining earlier, one of the biggest setback has been the stand-alone revenue of Jash Engineering. So last year we had done INR 92 crore as against that we have done INR 82 crore this year. The reason as I said was, there were 2 reasons for it: one was we could not dispatch material for Rodney Hunt due to uncertainty on the applicable tariff; and another was the delivery, some of the deliveries in India also could not happen. The production was done, it could not happen. I would like to state here that INR 28 crore worth of material was dispatched but because of U.S. GAAP practice, we could not take them in our revenue in Jash Engineering. In Shivpad, revenue has increased, in Rodney Hunt, revenue has increased, in Waterfront also revenue has increased. However, the profit after tax has reduced in Jash Engineering because of the reduced revenue. In Shivpad, it is nearly -- it is not a big reduction, but in Rodney Hunt last year we had $0.8 million loss in the first quarter and in this year it is $0.9 million. This is mostly because we are now rebuilding Rodney Hunt to take care of future increased production requirements. So we are adding people in Rodney Hunt at production level and at other levels so that once all the new expansion is done, we have a team which can take care of all the issues related to production. In Waterfront, we have had loss of INR 0.4 crore. I believe this is temporary in nature and Waterfront also would be in profit this year. So overall, I would like to state that we still maintain our projections given at the start of the year that is INR 860 crore and with profitability anywhere between INR 80 crore to INR 110 crore depending upon what finally turns out on the tariff. If tariff continues to be 50%, then definitely we will take a hit of $1 million to $2 million resulting into somewhat lower forecast on profit after tax. However, we have to see if we are able to as a country able to arrange a deal with America or not. So my response on the PAT bet would be more sure of 1 or 2 quarter down the line when we know clearly what is going to happen on the tariff front. Next. This is a consolidated income statement for Q1. You can see there is not a very, very big difference in comparison to Q1 of '25. The revenue increase at Jash would have compensated for all the shortfall which we are seeing now. And we hope that in quarter 2 and quarter 3 things will improve at stand-alone basis at just so that we would be able to show the improved performance. Anyway, I would like to reiterate that the first quarter always is challenging for us if you see historically and so it is not a big cause of concern as of now. Next. The revenue composition you can see 69% of our business is coming from water control gates, 14% from screening, 10% from Mahr and 7% percent from hydropower and various other groups. The geographical contribution is quite spread out now. India is 42%, U.S.A. is 37%, rest of the world, I would say, is close to 20%, 21%. So this is a very ideal scenario for us where the geographical contribution is quite diverse worldwide. Our consolidated order book as on 1st August is INR 875 crore. Of which outside India we have INR 574 crore and within India we have INR 301 crore. As I told before, we are reviving Mahr Maschinenbau and in Mahr Maschinenbau we have already got INR 24 crore order book. Rodney Hunt order book is also strong. However, we are not going presently aggressively in taking orders in Rodney Hunt because of this situation of tariff and until we build up our additional facility in America, we have to be cautious if the tariff situation is not solved. On Jash Engineering stand-alone, we have quite a good order book position with INR 500 crore orders in hand. We expect in all these companies to achieve the forecasted results before. In case of Waterfront, we have order booking of INR 9 crore. We have aggressively started marketing in U.K. We are building up our team. By acquisition of one more company, we hope to become a pan-U.K. company and in 3 to 4 years our target is to become the biggest sluice gate manufacturer in U.K. As I said our pipeline of new orders is quite strong. We have already negotiated orders worth INR 28 crore and we have around INR 56 crore worth of order under negotiation. We have a quite strong conversion ratio of the orders which we negotiate and so I believe that our order booking would remain within the range of INR 50 crores, INR 60 crores to INR 100 crores every month. If you remember at the beginning of the year, I had said that we are looking for revenue of INR 860 crore -- combined revenue of INR 860 crore. I am quite confident of achieving this and also going a little bit above it. However, as I said all our well-laid plans presently are in chambers because of U.S.A. So we hope some clarity is there on U.S.A. front. However, even if there is no clarity on U.S.A., the revenue would be in excess of INR 860 crore this year. Only it may result into some variation in profit projection, but I am still confident on view of the profitable orders that we have taken already that we would be improving upon the profit which we had declared last year. As I informed you, our new plant in Chennai is now operative from 1st of August commercial production has started. We have got all the necessary permissions. And with this now we are in a position to increase our output from of Shivpad process engineering division from Chennai. As I informed before also WesTech once we acquire, WesTech has a revenue of INR 55 crore and Shivpad had a revenue of INR 44 crore. So the process equipment division would have now a revenue total combined revenue around INR 100 crore. And with this plant commission both the company, both the divisions industrial as well as municipal production can be done in-house resulting into lot of saving. So commissioning of this plant would help, and acquisition would ensure that -- acquisition of WesTech would ensure that the plant gets loaded up with more work sooner than later. Next. Regarding WesTech, this was a subsidiary of WesTech U.S.A. WesTech U.S.A had 80% stake in WesTech India, and remaining 20% was owned by the employees. We are now taking 100% of the WesTech stake from U.S.A. and 10% from the employees and the remaining 10% we will take from the employees after 3 years at a pre-agreed valuation. What WesTech brings to us is entry into high growth industrial segments which is in mining, metals and paper industries where we were not that dominant, or we were not existing earlier. The biggest advantage WesTech brings is nearly the same type of equipment, but in lighter duty we are making for municipal. With the industrial portfolio coming in, WesTech can also on its own grow aggressively because they get a better product mix, and Shivpad also benefits because they get an enhanced engineering team of WesTech to support them. The combined turnover of this division WesTech and Shivpad would be around INR 100 crores as per the last year financials. We hope that with WesTech being merged to India, we would be able to take the process equipment division from the current INR 100 crore to INR 200 crore in 3 years' time. One of the biggest advantage of acquisition of WesTech is the season team. These are all around 26, out of 26 people, 24 people are ex Dorr-Oliver. They are very experienced, they are the people who are the key team in Dorr-Oliver. Today that experienced team has come to us and in today's time I always claim that manpower is the biggest problem, but with getting such a team and that to a profitable company with a profitable company we are sure that we would be able to enhance the results, financial results and performance result of the complete division in time to come. It also helps us in our Jash Invent product portfolio because the market for industrial for Jash Invent is quite high and WesTech brings their muscle of the industrial business to us for Jash Invent. Overall, I would say WesTech it would be a very nice addition and will help us -- as a group, it will help us individually in many of our subsidiaries to grow faster with their product range. With this I would like to conclude my presentation, and I would like to take any questions you have. Thank you.

[Operator Instructions] We will take the first question from Suruchi Parmar.

I am Suruchi Parmar from NX Wealth Management. Just wanted to ask question, like, in the last con call, I remember you have told that in the Orange plant, you have some labor problems. So while you are planning to increase your capacity in Rodney Hunt and also in Houston you are planning for the plant setup. So will this be a problem, labor shortage? And how you are going to deal with it?

So Orange, labor shortage is there and Orange key management is a problem. These are the 2 problems in Orange. However, there is BABA Act in America. And BABA Act in America mandates that for certain type of projects by 2029, 90% of value addition has to be done in America. So I would have to invest in America. Now where to invest? We are investing in Houston because we are facing some problems of availability of people in Orange. So we are investing in Houston. However, Houston facility will not be able to take care of all the production that we are planning in America. So Orange also will co-exist. Now because we are facing problem, I cannot say, we will do nothing in Orange. We have to grow Orange also, get a better team of people, maybe hope more and more people will be willing to work in America in time to come in manufacturing. And with that positive note we have to go ahead. I have got a big infrastructure in Orange. I cannot keep it aside and plan a similar infrastructure in Houston. So I do believe we have a chance to get our act right in Orange with competent manpower. We have put a new operations head in America who has been with us for a few months and I'm quite confident he has the capability to turn around our situation in Orange.

Sir, you have said in your opening remarks that if the same situation of tariff continues then we will get a hit of INR 1 crores to INR 2 crores in PAT. So is it because like your...

$1 million to $2 million, INR 8 crore to INR 15 crore.

Okay. And so this is because of like while your plant is still under construction in Houston and after the Houston facility and your wrap up in your other Rodney Hunt and Orange, it will improve the situation or still you will see some such problems if the same tariff structure continues?

So please understand tariff affects only the orders which we have already taken and which we are going to make in India. Tariff does not affect the new orders. The new orders we are already increasing whatever is the tariff adding to it for India sourcing and quoting. So the available order in hand only are going to get affected. And out of that orders which are going to be produced in India, not the whole Rodney Hunt order book. Only that part of orders which are going to be produced in India, that is going to be subjected to the increase tariff.

Okay. And sir, what about the figure of new orders you got in the first quarter?

We have already provided data for the tariff, whatever it take time. Either 25% or later maybe 50%. So new order whatever we booked, we have estimated the tariff in that, and measure of the order may be from the...

Last year.

Last year.

[Operator Instructions] Next question is from [ Diraj ].

Sir, can you please throw some light on this gross margins. However, we are in line to achieve your top line guidance that were given. But how -- going forward, how can we estimate the gross margin to shape? And what is the reason behind -- there is a slight dip in gross margins last quarter 2 and this quarter 2. So going ahead, how can we take these margins? And what is impacting these margins?

The difference in margin is only 1%, if I understand well, between earlier quarters and now -- last quarter. We don't -- see, Diraj, irrespective of where you make in India or America, there will not be a big hit on the gross margin. When we are producing in America, we are considering American produced cost basis. So raw materials from America, labor cost of America, overheads, et cetera, of America, et cetera. So -- and on that, we will add our margins. So the dynamics does not change whether you produce in America or whether you produce in India. Dynamics vis-a-vis our competitors in America are favorable when we produce in America because, one, we have a team of 25 to 30 engineers in India supporting estimation, project management and design engineering. So vis-a-vis our competitor in America, this 30 people team, engineers team, is at a comparatively low cost. And so we -- that enhances our competitiveness, also enhances our ability to take more margin compared to them. Another thing is with the pressure on producing in America, they are all in the same boat. So if they were getting some material from Mexico or China, now they cannot. And so everyone would be increasing their cost to face the American increased cost. And so that should not affect our margin portfolio.

Okay, sir. Sir, can you tell me how much revenue has been booked from Kansas project this quarter?

From Kansas project, I cannot give a breakup like that. But around, I would say, out of the Rodney Hunt revenue, at least 15%, 20% must be from Kansas project.

It was only 45,000 in this quarter. Because of Kansas project, over 45,000 is the higher cost.

45,000.

Okay. Got it. And just one last question, then I'll fall back in the queue. In this quarter, the equipment -- screening equipment revenue has decreased a little bit compared Y-o-Y in our revenue, yes.

[ indiscernible ] onto this question, we cannot compare quarter-to-quarter output of different products. We are in custom built. We are not in mass production. So sometimes certain products are required more, sometimes certain products are required less. So annually or quarterly, you cannot compare different, different product output.

In NPCIL project is majorly listening...

But still, it is not possible. Sometimes the gate may be more, sometimes the spring may be more, sometimes the valve may be more. It all depends upon the project, which type of projects we take and which type of projects are coming out to tender.

Okay. So is this mix between screening equipment and gates is also affecting the gross level? Can I assume...

No.

The next question is from Navani.

This is Navani Naredi from Naredi Investment Private Limited. And I have got 2, 3 questions. First of all, I would want to know how is the performance of disc filters in this Q1 FY '26? And how much it has contributed to the overall revenue?

So let me answer first the disc filter issue. No disc filter was delivered in Q1. We have got order for 6, 7 disc filters. They are all at approval stages. And these disc filters orders would be executed in Q2, Q3.

All right. And what is the reason behind the decline in domestic demand?

Of which item?

Like, in the results, I could see like there is a decline in the domestic -- of Shivpad.

No, no, there is no decline in domestic demand. On the end of the quarter, we have to deliver material. Now if the client is not opening NLC, we generally do not deliver the material, okay? We also delivered INR 28 crore worth of material in the quarter, but they have not been taken in revenue because they did not reach the site on the last day of the quarter. So if you see overall order booking for domestic business has increased. So the demand scenario, you can -- annualized basis, you can say. But quarterly basis, the reason is sometimes also if the payments have not come, we don't deliver the next lot of material.

Yes. Opening and closing reversal net effect is INR 13 crore approx., because last year, closing reversal is around INR 18 crore. Whereas this year our closing reversal is INR 28 crore. So INR 9 crore is the closing reversal affect and opening reversal are also reversal. Because in last quarter of March it's reversal is of INR 39 crore, whereas this year INR 35 crore [Foreign Language]. Overall, INR 13 crore is effective reversal. Consider the [ indiscernible ] actual effect is that.

Okay. So like for the whole year FY '26, the demand will -- not demand, I would say, the guidance for Shivpad will continue to stay strong. Can I assume that?

All the 4 subsidiaries. The guidance [ indiscernible ] already, in the guidance would be there. We are expecting to touch INR 860 crores plus something. INR 860 crores was I had informed then to it is a conservative figure. So we are still maintaining the guidance. The only -- as I said, the only problem that matter is not on the top line, it may occur little bit on the bottom line because of these revenue -- these terrif situation. We don't know every day Mr. Trump changes his statement. So how can I as a manufacturer plan for all those things. So until there is some stability on the tariff front, I would not be in a position to say how hard we will be hit by the tariff and what it would result into in our PAT. That's why I gave a guidance that with INR 860 crore revenue, our PAT profile would be within INR 80 crore to INR 110 crore range, depending upon finally what happens at the tariff level.

We'll take the next question from Sushil Dhoot.

Sir, I have a couple of questions. First, when we should expect the U.S. plant to start full-fledged production...

Within 2026. So in June, we took the decision to defer the office and build the plant. In July, I gave the drawings. In August, first week, we have got the initial reports from the city about what is possible, what is not possible. We will remodify our plants and submit in August. And I expect to get approvals by November, December. Construction would start. Houston facility construction is expected to start. We have already placed the order, by the way. So the construction is expected to start by January, February, and we have been told 9 months are required to commission the plant. So definitely -- even if there is a delay, definitely within 2026.

Okay. And second, how much CapEx for this year and how much we are paying for the acquisition?

Acquisition, both the acquisition put together, we will be spending around INR 40 crore.

And any CapEx amount guidance, sir? How much we are spending this year?

Close to INR 40 crore.

Okay. And the last question, sir, is there any legacy orders are still there in our order book, which are margin dilutive if I'm not wrong, last quarter it was [ billed ].

Legacy orders are there, but legacy orders with profit are there, then you and we both should not be worried. Legacy order at loss are there, then both should be worried. So Kansas's order is still there in America. And by the time I complete it, it would be maybe January, February. So Kansas's order only is a legacy order, which has some negative outlook for us.

We'll take the next question from Parikshit Kabra.

I wanted to double-click on the demand side again, sir. I know you're saying that the demand has not changed. But if we look at the order book, there has been -- even though the order book has been rising at a broad level, the speed at which it's rising is falling consistently, right? So we had peaked at 28% order book growth, then went to 13%, 10%, 3% and this time, it's minus 8%. And what is also another trend is that in the export order book, we have not actually shown any major growth over the last almost 5 quarters. And the domestic order book has its own trend but let me at least begin with an overall order book and the export order book. Can you please explain what is happening in the demand scenario here that why are we seeing the same kind of 15%, 20% order book growth that we were seeing earlier?

See, one of the biggest reasons is in America. Now my order book in America as of today is $40 million. However, we do not have capacity to produce more than that presently in America. So I can take orders, but it would be like putting into a problem because when you cannot deliver the older orders and you keep on taking new orders, you will face problem. That is why we are building up capacities so that we can produce in America. The new orders in America are more and more BABA compliant, which means you have to produce in America. Now if my capacities are constrained, I will prefer not to take too many orders so that I don't displace the customer. But you can ask why did we not build up the capacity before? We did not build up because we were not so sure about high tariffs. If the tariffs are low, non-BABA jobs, we can still do in India. But with high tariffs, even non-BABA jobs, we will have to do in America. So one of the major reason has been low intake of orders in America because of that. So we have not grown in the same rate in America order booking-wise as we were growing before.

Got it, sir. Perfect. Makes sense, sir. And in terms of domestic, the last 2 quarters, there has been a slower growth in order book. So is there any change in the demand scenario within India itself? Or is this just a matter of quarter-to-quarter trends?

It is also quarter-to-quarter trend. See, understand. Last year, MCGM announced INR 21,000 crores worth of orders for wastewater treatment plant. So all those orders we also got was in the last year. Now these all orders by the time they come in for MCGM, I think by next 2, 3 months, all those orders would have come in. So obviously, thereafter, there will be no orders from MCGM. And then other projects will come and the order. So our order accumulation also sometimes could be lumpy. It will not be like a commercial industry where every month, a fixed intake of order will be there, and they will grow every year. So I would say we have to look at 2 things when we see at order book. As a company, I look at 2 things. One, what is my capacity? Can I deliver these orders within a year? Because if I take orders for more than a year delivery, I open myself to -- because it is a fixed cost order, I open myself to some risk and the global uncertainty ensures that your well-led plants can go wrong. So if my capacity to produce is of, say, INR 800 crore, I should not take orders of more than INR 1,000 crore. That is how we plan. And in that case, what we try to do is if we cannot take more order, we try to take more profitable orders so that our bottom line improves. That is how we consider our order intake, not year-on-year or quarter-on-quarter.

We'll take our next question from Bala from Arihant Capital.

Sir, my first question is regarding this Waterfront U.K. business. I think post acquisitions we are lagging on the revenue target side. Just want to understand what kind of specific onboarding challenges are there for delaying and when we can expect the breakeven? And how does this U.K. acquisition pipeline align with our diversification goals?

As far as Waterfront is considered, when we acquired it, the team was only 9, 10 people. Presently, I think it is close to 18, 19 people. We have acquired one more shed. We have put in production facility in place. We are now recruiting people to start production. Production has been started, but it's a very lowkey production, but we are starting to recruit people to increase the production output in U.K. Now why we are producing in U.K. The reason we are producing in U.K. is certain jobs need delivery in 3, 4 months. This we cannot cater to from India. Same in America, same in U.K. Certain jobs have to be produced in U.K. because of the delivery issues. So now to get everything in place in a manufacturing industry is not easy, manpower, machinery, place, et cetera, et cetera. We are quite confident this year, we would be able to breakeven. It will not continue like Rodney Hunt 3 or 4 years. I am quite confident this year, we'll be able to breakeven. And with our current new acquisition, we get a new product also, and we are going to the heartland of U.K. in the Midlands, which will bring us proximity to customers as well as a service center in the heart of England. So with those developments, I'm quite confident that the merged company, Waterfront and the new company in time to come would be giving the same type of top line growth as well as bottom line growth in the coming years.

Sir, my second question, WesTech India acquisition. I think like post-acquisition, we are aims to enter into industrial process equipment, especially into mining, metals and paper side. And what kind of synergies we can expect with Shivpad municipal focus and how we will integrate WesTech team technologies without margin dilution? And secondly, if you could throw some light on what kind of revenue and EBITDA and kind of margins? And what kind of cost in terms of purchase and any other -- we are doing any subcontracting? And thirdly, what kind of utilization levels we can expect...

Remember. So let me -- what I remember, let me answer to you. WesTech, if someone had asked before, WesTech as well as the company which you are going to buy, I would not be able to reveal individual details because I have still not done the due diligence. But total sum is not going to be more than INR 40 crores. They did revenue of INR 55 crore. They had profitability of INR 4 crore. So it was a profitable company. So this answers the financial aspect of WesTech. Coming to synergy between Shivpad and WesTech, already I said, both the companies did not have manufacturing facility. Now they have manufacturing facility. With the manufacturing facility now is manufacturing facility, we have ensured that there is enough workload that the manufacturing facility can be run profitably and also lead to future growth for both the companies.

We will take our next question from Samartha.

First of all, congratulations on a very resilient performance and laying down the expectations for the year. Sir, last con call, I think you alluded to Saudi as a big opportunity for us. And I think you said that we were exploring something in Ras Al Khaimah or building a plant over there. So anything happening on that front, sir?

As we speak, Sanjay Sharma, our Vice President, Sales and Marketing is in Saudi Arabia, having meetings on the same issue. So until we have all the data, then only we will be able to tell what we are going to do. But yes, we are still moving in the same direction.

Sure, sir. Sir, one thing more. What is the current capacity that we are having right now? I mean, leaving aside U.S., we would be doing expansion also. So is it fair to assume that we have production capacity of more than INR 1,000 crores. And with the U.S. expansion, which will take place in the meantime, maybe by the middle of next year, what is the kind of capacity we would have built up?

See, the current capacity with all the expansions which we are doing currently, we would be around INR 1,000 crore, yes. With the expansion in U.S. [ indiscernible ] anywhere between INR 1,300 crore to INR 1,500 crore. It all depends upon how many shifts we are willing to go for. So if we increase the shift even in Shivpad, we have just started the production. If we are able to cope up and if we are able to do 3 shifts in Shivpad production will also increase multiple times. So depending -- but sometimes I may have shifts. But if the client don't take delivery, I'm not able to produce because these are heavy equipment. So I would say conservatively INR 1,000 crore and INR 1,500 crore. Currently, INR 1,000 crore and with all the expansion, INR 1,500 crore.

Got it, sir. And sir, this CapEx would be through internal accrual only or we would be needing funds for additional capacity, whatever maintenance CapEx and expansion CapEx we have?

So America, we will not need to raise a lot of funds. We may plan for $6 million to $6.5 million CapEx in America, out of which we have already raised $4 million 1 year back, right?. So in America, the difference may be $2 million approximately for which the American banks are willing to give us loans. The CapEx would be only INR 36 crore to INR 40 crore. And further, we need around INR 40 crore for acquisition. So I think we may go for minor debt. It would be minor. The company only has INR 10 crore debt as of now. So maybe another INR 15 crore, INR 20 crore debt we may take. But that is depending upon what happens with the tariff situation in America. If everything stabilized, we believe that the internal accruals will be strong, then we may reduce the extent of debt.

Got it. And just one final question, if I can squeeze in. I know it's a difficult estimate to make. But by the year-end, is there any order book size we have in our mind that this is something at a baseline level we should be having, keeping in mind uncertainties and the new acquisition, tapping the market. So any assumption on that?

Let me tell you one thing. If you heard what I had answered to someone who was in the queue before you was, if my production capacity is INR 800 crore, I will not like to take orders for more than INR 1,000 crore, okay? Which means around 13, 14 months, 15 months order book. So if this year, we do INR 900 crores and next year -- sorry, INR 860 crores. And next year, we are planning INR 1,000 crores, INR 1,050 crores. So we should have INR 1,100 crore order book by end of March 31, 2026.

Okay, sir. I think that's very reassuring. I think I was looking at that kind of a number only, whether we are targeting a pessimistic view or [ indiscernible ].

Generally, we target 10 months to 12-month order book at the end of the year. And if it is a little bit more, we can go to 13 or 14, but not more than that.