Kore Digital Limited (KDL) Earnings Call Transcript
August 20, 2024
Earnings Call Speaker Segments
Ladies and gentlemen, good day, and welcome to Kore Digital Limited Q1 FY '25 Results Conference Call hosted by Kirin Advisors. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Ganesh from Kirin Advisors. Thank you, and over to you, sir.
Thank you, Ziko. Good evening, everyone. On behalf of Kirin Advisors, I welcome you all to the conference call of Kore Digital Limited. From the management team, we have Mr. Ravindra Doshi, Managing Director. Now I hand over the call to Mr. Ravindra Doshi. Over to you, sir.
Good afternoon. Good afternoon to all the participants. I extend warm welcome to everyone on today's conference call for Kore Digital Limited. We are pleased to have you with us as we reflect on our remarkable performance in quarter 1 financial year '25. Before we go into detailed financial analysis, I would like to provide a brief overview of our company and the great journey we have embarked on. Since our inception in 2009, Kore Digital Limited has been at the forefront of telecommunication and infrastructure development. We offer cutting-edge solutions and services. We are licensed by Department of Telecommunication, and we provide a passive infrastructure that is(IP)-I. Our unwavering commitment to meeting communication needs of Maharashtra and India has been the cornerstone of our mission through the strategic deployment of numerous cell sites, multiple, okay, and established robust optic fiber network. We have strived to ensure seamless and reliable connectivity across the region. Our partnerships with esteemed clients like Vodafone Idea, Bharti Airtel, Reliance Jio, Tata Teleservices, BSNL and many small Internet service providers in Maharashtra and Gujarat and other parts of India, we are -- our presence is small in out of Maharashtra. We continue our journey. Our focus remains on innovation, reliability and customer satisfaction. We are committed to pushing boundaries of what is possible in telecommunication infrastructure. We look forward to continuing to shape future of the communication in Maharashtra and beyond. Now we are turning to our operational performance during quarter 1 financial year '25. We have achieved a significant milestone by securing a new work order from Navayuga. Additionally, we have commenced the critical task of optic fiber laying on Mumbai Nagpur Expressway started on June 27. This marks an important step in expanding our infrastructure footprint. These developments underscore our commitment to excellence, innovation and strategic growth. I am confident that through our continued dedication and collaborative efforts, Kore Digital will continue to thrive and make substantial contribution to the telecommunication and infrastructure landscape. Looking ahead, Kore Digital Limited is poised for significant expansion and development with improvement in impressive pipeline of projects totaling about INR 400 crores for financial year '25. Here, I would like to add that in next investor con call, that is next quarter, we may have some more positive announcements about targets in '25 and '26. We strategically -- we are strategically focused on enhancing connectivity through fiber optic along expressways and communication corridors as well as specialized infrastructure construction. These forthcoming projects, particularly those connected to Samruddhi Highway and Mumbai Metro lines highlight our commitment to shaping future transportation. We participate even -- we anticipate even greater growth. We envision generating approximately INR 1,000 crores, maybe a little higher from similar ventures in '26. This marks an exciting chapter for Kore Digital as we continue to lead transformation initiative in infrastructure sector. For achieving these things, we are enhancing our manpower and infrastructure machineries. And this year, we'll be adding about INR 50 crores in machinery to achieve the target. Turning on to financial performance of '21 (sic) [ '25 ]. I am pleased to report that we have demonstrated strong growth. Our total income for the quarter stood to INR 50.77 crores. The total revenue reflecting an extraordinary year-on-year growth of 1,031%. This impressive revenue growth is further complemented by strong EBITDA of INR 7.46 crores, representing a year-on-year increase of 635% with EBITDA margin of 7%. Our profit after tax reaches INR 5.3 crores, marking a substantial Y-o-Y growth of 685% and PAT margin of 10% is consistent. Our diluted earnings per share rose to INR 13.21, a remarkable increase of 550% compared to the same quarter last year. On quarter-on-quarter basis, our total income increased by 40%, while EBITDA saw a modest growth of 2.49%. PAT grew by 18.3% quarter-on-quarter, further solidifying our strong financial standing. The consistency in our performance is the testament of our strategic focus and operational efficiency. Here, I would like to add, quarter 2 is always sluggish in our life and quarter 2 will not be this good, depends how far we are able to operate. These outstanding results underscore Kore Digital's strong growth trajectory driven by our strategic initiatives, operational expenses and unwavering commitment to customer satisfaction. As the demand for communication infrastructure continues to rise, our strategic positioning will enable us to achieve new heights and further enhance our market share. Before we proceed to questions and answer, I want to express my sincere gratitude to all our stakeholders for being integral part of our growth journey. Our support and involvement have played a crucial role in our success. We genuinely appreciate your valuable contribution. With this, I would like to open the floor for questions. Thank you once again for your presence and continued support.
[Operator Instructions]. The first question is from [indiscernible] with CAO Capital.
Congratulations on a great set of numbers. Sir, I had a few clarifications that I want to seek from you regarding the press release that you come out with. In that you mentioned that strong growth trajectory with the project pipeline worth INR 400 crores. So this INR 400 crores is confirmed orders, sir? Or are these bids where the bids are going to be opened?
No. I -- once again, I'll explain to you. Our business is a little different than the standard copy book financial accounting or maybe standard stock exchange operations. What we do is we get the projects, we take the right of way and we take the permissions to construct the projects. And once constructed, we lease it out to -- on long term to our customers. So putting it in the terms of order book, that doesn't fit in. INR 400 crores I have given -- I'll explain. Let me try. If I'm not able to, please ask again, no issue. So this year, I'm expecting [ my ] construction revenue because this is in a joint venture. Kore Digital is constructing. So Kore Digital will be paid for the entire construction cost. And this revenue is counted from that? It's only purely construction cost from Samruddhi project and from other partners. And that is why I'm so confident about what I will do.
Understood, sir. Sir, then my question is that you also have an (IP)-I license. And as you mentioned, what you described to me just now, what you're doing, it sounds exactly like (IP)-I, right? So I was just wondering, sir, that do you have ownership of that (IP)-I asset that you have created? Or is it part of the JV [indiscernible] the JV or with the partners?
See, there are certain percentages. JV. And I own my part, percentage of network. Like we are constructing 10 ducts. So I'm 37%. So 37% means I will get about 4 ducts out of it.
Understood, sir. And sir, there is -- from what I understand, there are a few companies in the listed space, which own (IP)-I assets. And there is an element of recurring revenue also from (IP)-I assets.
Let me explain. I got your question. Can I? Yes. Okay. See, basically, (IP)-I assets are of 2 types. One is underground ducts. Other one is the poles. Poles or towers, whatever we call it. There are 5, 6 categories. The (IP)-I recurring revenue, what you are seeing, that will also be generated once the network work is over. Here, we have built in permission for the poles. So poles will be constructed once the network is there. If network is not there, pole will not be useful. Once we are constructing the network. I'm hopeful I'll finish it within maybe 18 months.
In 18 months. Understood, sir. Sir, my next question is that in terms of -- so recently, BharatNet related contracts were also awarded. So is there -- so I saw the -- there are, I think, some 16-odd consortiums. And the total -- sum total of the tenders that government is talking about somewhere INR 70,000 crores to INR 80,000 crores [indiscernible] something like that. So is that an opportunity for us?
It is definitely. That is why I have said that maybe in next quarter results, I'll give some good news.
Okay. Okay. Sir, are you part of any of these consortiums?
No. I'm not part. But if I want, I will get. Whatever I want, I'll get. I'm the senior most guy in the industry.
Right, sir. Right, sir. Sir, one final question before I go back in the queue. I have other questions as well. But in [indiscernible] my final question is, so in this Mumbai Nagpur project, so what kind of optical fiber cable are you laying down? I mean, what is the core comp? Is it like...
Let me explain this part. We are constructing the duct network and those ducts will be leased out to the telecom companies. Telecom companies in their own technical side, they decide which optic fiber cable has to be laid. So suppose if it is Reliance Jio, Jio may prefer 288 core. [indiscernible] may prefer. Maybe. And 96. So it differs company to company, occupant to occupant.
Right. And sir, do you have...
We will be having our own. We will be having our own 96 fiber cable end-to-end.
And sir, how many -- so there is a term which is used in towers, which is a tenancy. In your ducts, if I were to use a parallel term, so you mentioned that you...
So we have 10 ducts for sale. Those 10 tenants we can accommodate.
You can do?
Our project is based on 2 tenants, unless whatever comes, that is plus.
So is it 2 into 10 then...
No, no, no. I am saying we have tenders is the capacity we are building. 2 tenants will take care of entire project and profitability. Additional whatever we get, that will be [indiscernible].
The next question is from [indiscernible] Shah, who is an investor.
First of all, congratulations for amazing set of numbers. Sir, my question was that next year, we are targeting for INR 1,000 crores revenue. So sir, I just want to know that how we will achieve it. I want to know, sir, more on orders that we would get...
Let me explain one second. We get the tenders, we build the network and sell it off. Sell it off is to lease it off. So these are the calculations based on the leasing revenue and construction revenue. There are 2 parts. Construction revenue is about 60% to 70%. Leasing revenue is 30%. So maybe out of that INR 1,000 crores or maybe a little more, we will be billing INR 600 crores from the construction, EPC and rest of it from the telecom. Leasing, it's mostly leasing revenue only.
The next question is from the line of Agastya Dave with CAO Capital.
So just, you went into details of this leasing part, right, the recurring part. So that leasing part would be recurring, right? Sir, recurring in nature.
Leasing is always recurring, sir. Every 3 years, I get the lease.
Correct. So you...
And again, again, let me make it clear. On top of this, we will be constructing more than 5,000 telecom poles. That revenue will be in addition to this. It is not projected because we really don't know the need of telecom companies. This is based on the network requirement. So that cannot be certain we cannot take the figure at this time. But average, I will tell you, sir, each pole generates me minimum INR 8,000 a month. So this is additional revenue, which we are not projecting because we are not sure.
And sir, these would be, I'm assuming 5G poles if they happen.
It will be 5G only.
Right. And with tenancy of 2-point something?
No, no, tenancy 1.
Tenancy 1. Tenancy 1.
These are small poles, 12 meters only.
So micro cell.
It is micro cell. It cannot have tenancy more than 1. Having tenancy more than 1 in the remote area doesn't make sense.
Understood, sir. Understood. Understood. Sir, so then in terms of -- I'm trying to understand how we will see the numbers, right? So you mentioned that there would be an element of lease. So that lease would be renewed every 3 years. You'll be recognizing 1/3 of the total lease amount every year for 3 years, then renew it and then again, 1/3 for every 3 years, right?
True. True.
Okay. Sir, what kind of cost...
Sir that -- again, but that depends on our negotiation with telecom companies. We may get 15 years upfront also with a big discount.
With a big discount or maybe some escalation also, right, annual small...
Kind of yes. Rates will depend on how we -- what is the payment.
Understood, sir. So I was -- let's take this base assumption 3 years tenure and then you're recognizing it. So EPC revenue will be depending on the contracts that you are winning, right? That is the construction part. This is the recurring part. Sir, the margins will be dramatically different, right? So can you -- so if I take FY '24, which is last year. So if I take the INR 100 crores of revenue -- INR 103 crores of revenue last year, was there an element of leasing there? And...
It is the standard 30% and 70%, means approximately.
Broadly. Okay. Sir, can you give some estimate as to how the margins are in the EPC business versus the leasing business?
Sir, nothing less than 10% that we are following the standard. Sir, if margin is less than 10%, I will not take the contract.
In the construction business?
Yes.
And in the leasing...
Leasing, whatever we get in leasing, we normally invest back into the network. So that way, you will not see any massive margin or profit because most of it goes back because I keep increasing my network. I put it back into the network. That is the standard till now.
Understood, sir. Understood. Understood. Sir, you mentioned that you would need INR 50 crores of CapEx this year in...
Yes, this is the new one we are in process of doing. It is CapEx, yes. We are buying construction machinery additional. So that will be CapEx only. Yes.
Right. And sir, you would require some capital for this, right? You don't have -- you are a debt -- almost a debt-free company as of. So would you be going in the equity route debt would be...
I'll be -- immediate basis, I'll be going for that route and then we'll see what is good for us and our investors.
Understood, sir. And sir, one final question on the working capital side. So 10% margin you don't operate. You will never consider that. On the payment terms, sir, what are your benchmarks?
Sir, 90 days is the normal expectation and 180 days is the reality.
Okay. Yes, the standard...
But I also pay in similar terms. So it doesn't put any pressure on me.
Right. So working capital, sir, whatever we have seen in FY '24, is that a good expectation to have for the subsequent years?
I did not get your question.
Payment days in terms of receivable days.
These are the very standard operations, sir. Normally, everything is accommodated within the 90 and 180 days time line.
Perfect. Sir, one final question from my side. What is the make of the BharatNet, this Phase 3, which has come up now? Because Phase 1 and Phase 2, nothing much happened, right? In fact, Phase 3, I would...
So they were not funded. I'm talking on con call, which is not good. But the reality is that funds are released just a couple of months back. Without fund, nothing moves. And BharatNet is not a very lucrative project. Let me tell you. Profit margin-wise, it is not. So maybe 100 consortiums or 50 or 20, whatever they have done all as insider, I know that nobody is happy. And they are really scared if payments will come in time or not. And I am also scared because that is why I decided I will complete my operations and streamline construction of Samruddhi Highway. After that, I will go and meet. I know the top guys everywhere. So getting order is not an issue. Execution and payment is the problem in telecom line overall. Especially BSNL.
Sir, overall the company is growing very well, right? But overall, in terms of opportunities slightly over the medium term, the next 2 years visibility, you were kind enough to provide today. But going forward, sir, how do you see the business and the industry panning out?
Sir, I'll give you some very good news in next 2 quarters. You can see that we are technocrats. That's very clear. And then we are into deep tech. So some very good commercials will come from our other orders also, which is not visible till now. Next 5 years, I see company in a top range. That's all. Hopefully, if we are lucky enough to get the things in defense and others.
Sir, I've been tracking the industry and I've been invested in your company also, I'm a shareholder and like many companies in the industry, I have over the years, invested. And sir, one thing that I feel that the pickup that was expected even during the 4G launch period, right? We were at 20 million roughly optical fiber kilometers before 4G. And by 5G, it was expected that optical fiber cable consumption in the country would touch 100 million. But last year, we ended at 16 million. So I was just...
Let me tell you one thing. Our telecom companies, all the telco operators, those who are the consumers of this product. They are really seriously cash strapped. That is the main reason that infrastructure is -- growth is slow because we always -- as Indian, we do the [indiscernible]. Cut the corners and make the networks run. I was part of a 3G rollout. 3G rollout is supposed to give you X, but the actual backhaul was X minus 30 backhaul. Not the site. The cell site which is supposed to say, deliver 60 Mbps. The total backhaul was 30 Mbps. So this is the reality. 5G really where it works and who is able to get it all the speeds, I really doubt. Maybe I'm not getting in my office. I'm in Mumbai.
I'm not even getting anything in 4G. Even 4G is struggling.
Yes, yes. It has deteriorated.
It has deteriorated. We don't get like 3G speed 4G. 4G was supposed to be 40 mbps plus.
Yes. So the reality is different. Yes, we -- India should have reached that target. It will reach slowly.
The next question is from [ Hitesh ], who is an investor.
Sir, I just wanted to know like during Q4, you mentioned that we would be achieving INR 80 crores in Q1. And I understand that sometimes revenue recognization gets delayed by a month.
This time actually, yes.
Yes. But then you are saying that Q2 might also be a little...
Q2 is normally, sir. Q2, normally in telecom and infrastructure, the road infrastructure, what we are in, it is always low because of monsoon. Our efficiency is hardly 30% during this time.
Okay. But we can expect that revenue that will...
It will cover up. It will cover up. I'm definite.
The next question is from the line of [ Neena Deshpande ] from KM Consultancy.
My question is, can you brief us about your recent project received from Navayuga Engineering Company, their order size and the time period to complete and the margin details. And sorry, it's a bit of a complex question. But if any, and who are your competitors for bidding this order?
Competitors, I won't be able to help, but other things are definitely. With Navayuga, it is an ongoing construction order. So it is not locked to a specific amount. So average this quarter, we'll be doing is, I think, about INR 60 crores, INR 70 crores during this current quarter, quarter 2. Revenue payment collection shall be about INR 40 crores, INR 250 crores. What we do is we are joining them in constructing critical areas in Maharashtra, where operation of the other normal contractors and things are a bit difficult. Samruddhi is not the only project. There are 4, 5 projects where we'll be collaborating for next 3 years. Revenue, no, no, you said margin. Margin is slightly above 10%. Have I missed anything?
No, sir. You answered my question. Can I have another one? How do we receive the payments we receive in advance then on milestone basis or on completion of contract?
Normally, it is -- we have the milestone model. Once a particular milestone is reached, 80% of the payment is released. So it is ongoing payment. Process is ongoing. Suppose we have completed, say, 20 kilometers of the work. So for every 2 kilometers, 3 kilometers, depending on the work and bill size, we get paid. It's not advanced, but we get paid very fast. So working capital is not a big problem. Is it the right answer or you wanted something else?
No, no. Thank you for answering.
The next question is from the line of [indiscernible] who is an investor.
First of all, sir, congratulations so much on a great set of results. Most of my questions were answered. I just wanted to ask about your future plans in terms of do we have a vision for the next 5 years? So I have 2 specific questions on that front. So if we see our revenue trajectory, it has been fantastic. So from INR 13 crores in FY '23 to INR 100 crores in FY '25 and probably INR 1,000-plus crores by FY '26. Can we expect INR 5,000 crore revenue mark by 2030?
I would love to do it. I'd love to top it up, more than that.
But sir, do we have that kind of a vision or do we have that kind of a visibility as such in terms of the market opportunity that we can expect anything close to that?
[ Bagadiyaji ], let me tell you. I've not been very specific. Yes, we are working on something related to defense and other things and INR 5,000 crores is just peanuts.
So can we expect more than that by 2030?
Sir, I'm doing my level best to get it.
Okay. And my second question...
I told you I would love to top it up. INR 5,000 crores is -- okay, if we have done this much, INR 5,000 crores should be -- I'm not giving projections, should be [indiscernible]. There are certain other things, which is personal. And for those reasons, I was not keen on growth. Once my son, Chaitanya has joined and then I have seen the response of all the investors and all. So even I love to make money. Why not?
Okay. And sir, my second question is that our predominant presence is in Maharashtra and some part is in outside Maharashtra. Do we have plans to expand in other states if it is.
[ Bagadiyaji ], I'll be really very straightforward and honest. If there is a good margin, I will definitely do it. Margins are not really very good in telecom. Moving out of Maharashtra really doesn't make any sense. If I have to just make the numbers and no profit, I am not that kind of businessman. I'll rather go into line where there is a margin -- very good margin, good challenge and good opportunity to make big money. And we are technical guys, so we can do it. And we are in process. Please wait till the March. I'll give some really good announcement. But I am the one who will make only if I receive the paper signed one.
I got your point, sir. I got your point. And sir, just another question. In the last time's con call, we kind of mentioned that around 40% revenue would be booked by Q1 and Q2 and the rest 60% will be spread in Q3 and Q4. This quarter, we got around INR 50 crores and Q2 is sluggish. So do we expect that out of this INR 400 crores that we are expecting...
I'm hopeful that we will cross INR 120 crores by the second quarter, but I'm hopeful. See, these numbers actually -- for us, they don't make any very big significance. The reason is that -- I know that INR 120 crores is not coming now, that will come in the December. That will add to the December result. So it is like this is infrastructure, so it is a slow-moving thing. And still, we are growing at a very big breakneck speed.
Absolutely, absolutely. So sir, is it INR 50 crores plus INR 70 crores or INR 50 crores plus INR 120 crores.
INR 50 crores plus INR 50 crores...
No, you mentioned INR 120 crores is what we expect by Q1.
No, INR 50 crores plus INR 50 crores I guarantee, INR 120 crores is -- because I cannot say -- see, after a certain level, I cannot pressurize my clients to make payments. If they delay it, then there's nothing. And until now, I have not actually missed any of the target. So I don't want to miss the targets also.
Okay. I think most of my questions are answered. And I'm really hopeful that we cross that INR 5,000 crores mark by 2030.
We will definitely -- with you and all investors support and blessings, we will definitely do that.
The next question is from Prakash [indiscernible], who is an investor.
Doshi, congratulations on the great numbers. Can I understand if there are any upcoming projects that we have bid for either as a sole builder or through a joint venture? And how much would we be able to win? Because we are looking at INR 5,000 crores...
Sir, please don't [indiscernible] that particular target. Let us discuss up to INR 1,000 crores.
Yes. So basically, see, until 2026, you have said that you would come to INR 1,000 crores, and I like your confidence, right, in your company, my company, right? What I'm asking about is what kind of -- see, when I look at it, when I do a business, I'm looking at what kind of roads have been set up. What kind of infrastructure is set up, right? Do we have this kind of visibility in terms of what kind of new highways have been set up, where can we build, where have we bid or where we are bidding? As you said, March probably we can expect some good news, right? So is this something...
Let me answer first part. Yes, we have and we are expecting good business from that. But these are the government tenders mostly. And if we get it, it's really good, but many times, we don't get it. So it's okay. Our order book is not going to deplete. Our order book is what we have in our hand as of today till -- up to INR 2,000 crores is the solid revenue we are having. Visibility for next year will be -- I would love to do INR 5,000 crores. But till now, I don't have anything in hand. It will take time.
I [indiscernible].
Yes, positive. It is positive. Otherwise, I'll not speak. Only when it is positive and achievable, then only I will talk about it. Otherwise, I don't.
Right. And in fact, I had another question, but you've already answered it, that I was going to ask you whether similar cable laying projects are there in other states, why don't we enter other states, but you said that the margin is not good.
Margins are really bad, sir. We are -- luckily, we are not stuck with the manpower and infra machinery and those things. We are not that heavily invested. So we are really lightweight and lucky. We operate at our own [ mill ] where the margins are good, where I can show good results to my investors and enjoy in place of giving bad results and explaining it.
So I'm not really thinking about our company just 1 or 2 years down the line. So we've already given FY '26 guidance as well. I'm looking at our company 5 years down the line or 10 years down the line. Right?
INR 50,000 crores to INR 100,000 crores sir. No, we are doing -- let me -- I'm talking because we are working on some really deep tech defense projects. I'm just waiting for breakthrough. If God is helpful, and we are lucky, we'll be doing really, really big things because we are in 3D printing and our 3D printing is assisted with AI. Metal 3D printing assisted with AI. Our -- a few of the investors are from IITs and they will know it, what I'm talking. So all we need is a small breakthrough.
Right. I completely understand that this does take time. Business is not that something you do a product and you would get an order right away, that it will take some time.
Yes, it will take some time.
Something that you can expand -- is there something that you can expand on the defense projects that you were talking about up to you, if you do not want to expand at this point of time. But is there something -- see, there are 2 phases to this, right? Our company is all about EPC and laying cables and how EPC work, right?
No, no. Let me tell you. Let me tell you. Our profile and things are not done in that way because I don't want our investors to get confused. We are always -- we have been always a high-tech and deep tech company only. But this is -- we have taken optic fiber and EPC because that gives the volumes. I was -- if you know any of the big Tier 2, Tier 3 Internet service provider, so they will know me in a different way. Ravindra Doshi is a partner of Google. He provides the Google with the peering. This is what is a few years back. So we have been in deep tech. Anyone who knows Internet in-depth will understand what I'm talking. And from there, our Internet service providers make money. So that was there, but then there are times markets and dynamics. So business dynamics has pushed me to optic fiber and construction, EPC because that makes big money. Having a very good technology, but not making money doesn't work. So this is how we have come here. But yes, we are always in deep tech. And whatever figures I have given, that will happen, you will see. Because India needs it now, because of Ukraine war and other things, there is an acute shortage of spares for our defense machineries. And that is why we are going to fill in.
Right. So is that something that you can talk about it now in terms of defense or you need some time?
No, no, sir. So I have my presentations, things and then samplings and things ready. We are approaching different agencies. And I am hopeful before December, we will have some breakthrough because they are in dire need. Otherwise, entering defense is lifetime.
[indiscernible] Is it like...
I'll just give you an example. This is what is in dire need by Indian Air Force is the turbine blades. That's the one. Here, we have technology that if we have a sample in hand, we can analyze the sample and we can regenerate with [ Micron Precision. ] Same thing. So that is what where -- see, they may not take critical ones because there are licensing and other problems and other things are there. But there are other hundreds of spares, which they need and they don't get. Something is made of aluminum alloys, something is made of cobalt alloys, something is made of titanium alloys, something of steel. All those things can be created here. And that too, we will be able to -- yes, sir. Sir, come have a tea with me.
So basically, that helps our Make in India campaign as well, right? We as Indians should be proud of what we are making in India. And what we are providing to our own Air Force, right? So that we should be proud of it in fact.
Sir, sir, this is just an example of Air Force. This is applicable to Navy. This is applicable to our -- even...
Currently imported? That's what you're saying, and we are actually making it in India, and we are the ones who are presenting it and are able to achieve...
Kind of. This is -- I'll say that this is the implementation of technology the Indian way. Whatever is not available, can be regenerated.
Right. Are we looking at any tieups, any international tieups like some of our defense companies [indiscernible].
No, no, no. What we are going to do, we don't need that. We are going to do the reverse engineering. And if jet engine's fan blade has broken and you need replacement and Russia is not able to provide, then what? You will ground the jet? No. That is what we have been doing till now. We will ground out of 30, we'll ground [indiscernible], take the parts and keep others alive. And that has also reached a critical stage right now. 15 out of 30 are down.
Tell me one thing, sir. Is there any recruitment that you are doing in this kind of expertise? Any new independent directors coming in? Anybody who understands...
Yes, yes, yes. The process is...
You and your son...
No, no, no. The last meeting -- okay, okay. That was not a meeting available to everyone. We have already announced in the last meeting where I announced the results that we are taking a new CTO, new CFO and new CEO, plus for AI, we are taking new manpower. But AI, I don't want to make any announcements. It is for the in-house use. It is for the improving designs. We are not developing any AI. We are using AI. Explaining over call is a bit difficult. So you have to come and give time, have tea. I'll be able to explain exactly what we do.
I'm actually located overseas, so probably [indiscernible] I understand this better.
But then we will do a video call.
Yes, we could do a video call. Thank you very much for the clarity and I wish you all the very best, not just your company, it's our company. So wish you all the very best and wish you all the very best.
Thanks for the love and affection sir. That is -- means I feel like growing more because of all the investors affection.
[Operator Instructions]. The next question is from the line of [indiscernible], who is an investor.
Congratulations for the great set of numbers. Sir, my all questions are [indiscernible] '26, you are telling that we will reach INR 1,000 crores. So that how much working capital is needed, sir? And how we will drive that capital?
Sir, we'll take that decision in March. This March, yes. '25 March because right now -- sorry.
Is there any estimation for that...
Not till now. That will go for that in the December. So my team will prepare what I need and what it is.
The next question is from the line of [ K. Rajesh ] who is an investor.
Congratulations sir for giving great set of numbers. We are expecting very good numbers in Q3 and Q4. Sir, I'm retired Air Force person. So I know that what is the shortage in my -- regarding the space and these things. So while we used to face these things because whatever aircraft we are getting from other countries, we get aircraft later for space, we need to procure from other countries. So it takes a lot of time. So a lot of time. So the aircraft used to be [ light on ] without any servicing. So we used to wait for months or months [indiscernible] of time. So it's a really great opportunity, sir, if we really get those kind of tools procured from India only.
Yes, sir. I'll explain what we are doing. And if you can add our help, that will be welcome. What we do is 3D metal printing, that is done with a 100% density. Laser metal. And then near net ship we get and then the machining, [ CNC ] machine in [indiscernible]. And then we get the accurate micron level accuracy. And because it is mostly printed from wires, so we can get the wires of the exact specification it is needed. Now it is only -- I think you will be aware of 3D printing. 3D printing is done layer by layer. Now here, we use AI to change the orientation of layers and make it in a way that it will achieve better crystal structure or better strength than the original one also, which are produced normally by molding. So this is our goal. And we are making our presentations with all the agencies, [ DRDO ] and all, and we are hopeful that we will get a breakthrough.
Sir, we are expecting more than INR [ 100 ] crores revenue in Q3 and Q4. Am I right, sir?
This is normal -- my line is such that it is normally like that. And we have elections and all those things in Q3. May be slightly slow.
[indiscernible]
No, no. It doesn't make any difference to us, who is in government. But then still process -- government process is slow.
Sir, I would like to meet you in office.
Please. See, give me a ring. Confirm that I am in office because project is on. So 2 days a week, I am on the field.
The next question is from the line of [ Krishna Yoga ], who is an investor.
Congrats on the good number. Sir, my question is a little bit particular toward the Samruddhi project. Since we started our work in 27th of June, so I mean, I feel the revenue is not generated anything in this present quarter from the Samruddhi Highway, right?
This is 700 kilometers in [indiscernible]. So 1,400 kilometers project and 27th June when we started, it started raining on the same day heavily. We could finish -- we [ couldn't ] finish our scanning. So wherever we are going to do the trenching work and laying the cable, we have to scan the ground under 2 meters, we do the scanning. So scanning work is over. Hopefully, by month end, we'll start digging.
Okay. Because sir, in the last call, I remember you mentioned that the fund will be released only once you've done like a minimum 100 kilometers of...
Yes, that is true. That is true. That is why I'm projecting revenue in this quarter. This quarter will generate the revenue either from construction or from leasing. It will be construction, leasing will not happen that fast. Because telecom companies don't have funds.
Yes. Got it, sir. Completely agree. And previous question you are telling about the 5,000 poles to be installed from your company, that is completely not calculated in the revenue position what you're giving for the INR 1,000 crores target...
Yes, sir. Yes. That is true. It is completely not calculated.
That's it, sir. And the remaining questions are completely answered. thank you so much, sir, for explaining very briefly about the company's growth and your internal things, what you are doing. We are lucky investors to be part of your Kore Digital company growth.
No, no, you are welcome, sir. Kore Digital is there because you people are there.
Ladies and gentlemen, that was the last question for today. I now hand the conference over to Mr. Ganesh from Kirin Advisors for closing comments.
Thank you. Thank you, everyone, for joining the conference call of Kore Digital Limited. If you have any queries, you can write us at research@kirinadvisors.com. Once again, thank you, everyone, for joining the conference call.
Thank you. On behalf of Kirin Advisors, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.
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