Q1 2027 Skipper Ltd Earnings Call
Speaker #3: Ladies and gentlemen, good day and welcome to Skipper Limited Q1 FY27 earnings conference call hosted by ICICI Securities Limited. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.
Speaker #3: Should you need assistance during the conference call, please signal an operator by pressing star and 0 on your touchscreen phone. Please note that this conference is being recorded.
Speaker #3: I now hand the conference over to Mr. Naveen Sahadeo. Thank you, and over to you, sir.
Speaker #4: Thank you, Anushka. Good evening, everyone. On behalf of ICICI Securities, I welcome you all to the Q1 FY27 earnings call of Skipper Limited. From the company, we have with us Mr. Sharan Bansal, Director; Mr. Shiv Shankar Gupta, CFO; and Mr. Aditya Dujari, AVP Finance and Head of Investor Relations.
Speaker #4: So, without any further ado, I hand over the call to the management for their opening comments. Over to you, sir.
Speaker #5: Yes. Good afternoon, everyone, and thank you for joining us today. Before we proceed, I would like to draw your attention to the fact that certain statements made during the call may be forward-looking in nature and should be considered in conjunction with the risks and uncertainties associated with our industry and business.
Speaker #5: We are pleased to report another quarter of resilient execution, despite a challenging external environment. We ended last year with a lower-than-expected order inflow due to subdued domestic bidding and various geopolitical and tariff-related uncertainties in a lot of our export markets.
Speaker #5: During the quarter, geopolitical developments temporarily impacted export dispatches and revenue reclamation. However, the strength of our domestic business, disciplined project execution, and continued focus on operational excellence enabled us to deliver our highest-ever first-quarter revenue while further improving profitability across every metric.
Speaker #5: For the quarter, revenue grew 4.5% year-on-year to a record ₹1,310 crore. More importantly, EBITDA increased 10% to ₹140 crore, with margin expanding by 60 basis points to 10.7%.
Speaker #5: PBT grew 27%, while PAC increased 26% to ₹56.5 crores. Reflecting the benefits of improved operational leverage, a better project mix, and continued cost optimization, finance costs reduced to 3.6% of revenue, from 4.2% last year.
Speaker #5: Further strengthening earnings quality, beyond financial performance, this quarter marked an important milestone in strengthening our balance sheet. We successfully completed a ₹433.5 crore preferential equity raise from marquee global and domestic long-only institutional investors.
Speaker #5: Substantially enhancing our financial flexibility. This was followed by CRISIL upgrading our long-term credit rating to A+ Stable in July, validating our stronger financial profile.
Speaker #5: Prudent capital allocation and consistent operating performance. Together, these developments are expected to lower our cost of capital and support our next phase of growth.
Speaker #5: Operationally, business momentum remains robust as we continue to build on our leadership position in the transmission infrastructure sector. We close the quarter with our highest-ever unexecuted order book of over ₹9,200 crore, representing healthy growth over March 26, and providing strong multi-year revenue visibility.
Speaker #5: During the quarter, we secured fresh order inflows of approximately ₹1,674 crore, while our bidding pipeline expanded to an all-time high of ₹35,000 crore.
Speaker #5: Supported by robust domestic transmission investment and improving opportunities across international markets, we secured 2,765 kV projects from a reputed developer in the state of Maharashtra and successfully completed qualification audits from developed market customers, including the USA, Finland, and Australia, while strengthening our international presence with the establishment of subsidiaries in Brazil and the UAE.
Speaker #5: The USA entity is also expected to become operational shortly. Further, the ongoing 75,000-ton capacity expansion is expected to become operational during the second half of the year, taking our total manufacturing capacity to 450,000 tons per annum, further strengthening our position as the largest power T&D structure manufacturer in the country.
Speaker #5: Looking ahead, we expect FY27 to be edge-to-weighted, as export logistics normalize, capacity utilization improves, and recently secured orders move into execution. We expect stronger growth momentum during the second half.
Speaker #5: Our focus remains on improving project mix, driving operational efficiency, expanding exports, strengthening return ratios, and maintaining a disciplined balance sheet. The long-term outlook for the power transmission sector remains exceptionally strong. Accelerated investments in renewable energy integration, HVDC corridors, interstate transmission infrastructure, and rising electrification across both domestic and global markets continue to create significant opportunities.
Speaker #5: With our strengthened balance sheet, expanded manufacturing footprint, healthy order pipeline, and improving profitability, we believe Skipper is well-positioned to deliver sustainable growth and create long-term value for all stakeholders.
Speaker #5: Thank you, and I look forward to your questions.
Speaker #1: Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star one on their touch-tone telephone. If you wish to remove yourself from the question queue, please press star two.
Speaker #1: You may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.
Speaker #1: The first question is from the line of Aditya Verger from Axis Securities. Please proceed.
Speaker #2: Yeah, thanks, sir, for this opportunity, and congrats on the decent set of numbers. So my question is with respect to ordering and awarding. Are we seeing any pickup in ordering activity compared to last year? In FY '26, we had seen some slowdown.
Speaker #2: So, is the ordering environment improving? Any color on that?
Speaker #5: Yes, thank you for the question. And definitely, the ordering has certainly picked up in this financial year. We have seen a number of bids getting finalized.
Speaker #5: And we believe that those order inflows will start translating from quarter two itself. We are expecting bids of close to ₹90,000 crore to ₹1 lakh crore.
Speaker #5: Of bids in the Indian transmission market in this financial year, and also in terms of the export side, we are seeing good traction coming from a number of markets, including our focus areas, which are the developed markets of the USA and Australia.
Speaker #5: So, in these markets, we are also seeing very good positive developments. So we definitely do expect FY27 to be much better compared to FY26 in overall ordering.
Speaker #2: Understood. And just to get a broader perspective on the sector in general, we have ₹9.2 trillion of capex earmarked. But that has been divided into two parts.
Speaker #2: From FY22, 27, and then 27 to 32. So, currently, where are we in that entire execution capex cycle? And how much is still remaining?
Speaker #5: We are seeing that annually we can expect, like I said, ₹90,000 to ₹1 lakh crore of bids in the transmission sector. Like this year, that is what we are expecting to see.
Speaker #5: So our estimate so far is that just about 40% of the total bids of ₹9 lakh crore have been bid so far.
Speaker #2: Understood. Just one last point. On the means, we have seen that in this quarter, finance cost has declined, and that has led to growth in our PAT.
Speaker #2: So, is it due to the drawdown or the decline in our gross state post our QIP?
Speaker #5: No. Our fundraiser actually came in at the end of July, or in fact the first week of August is when we received the funds.
Speaker #5: So, quarter one did not see any benefit from the fundraise. Whatever improvement you are seeing in the finance cost is purely due to better working capital management and overall operational leverage of the company.
Speaker #2: And that's great to hear. So how much are we expecting the finance cost to go down? Meaning, once this happens, you will use that fund to reduce your debt.
Speaker #2: What is the current debt position, and how much is it expected to decrease further?
Speaker #5: I believe that this year our finance cost should be somewhere between 3.2% to 3.5% for the whole year, after this fundraise.
Speaker #2: Thanks a lot. Thank you, and all the best.
Speaker #5: Thank you.
Speaker #1: Thank you. We will take the next question from the line of Renga Varshini from Weldified. Please proceed.
Speaker #6: Hello, sir. Congratulations on the good set of numbers. Am I audible?
Speaker #5: Yes, please.
Speaker #6: My first question is on the export revenue. Is it completely lost or delayed for a longer period due to geopolitical disruptions? My second question is on the growth guidance of approximately 15% given for the financial year.
Speaker #6: And for this quarter, we were able to achieve around 4% growth. For the remaining quarters of the year, on which segment do we expect growth to achieve this target of 15%?
Speaker #6: Third, we have a strong order book of ₹9,200 crore. So, can you please quantify what percentage of it will be completed by the end of, let's say, FY27 and by the end of FY28?
Speaker #6: That will be helpful, sir.
Speaker #5: Okay, sure. So regarding your first question, I can say very confidently that export revenue is just export ordering. It has certainly not stopped or slowed down.
Speaker #5: Last year, we saw certain uncertainties with regard to tariffs as well as overall geopolitical issues in the Middle East. However, this year there is already a strong bounce back.
Speaker #5: We are in advanced stages of contract discussions with a number of buyers, and we should start seeing those orders coming in from Q2 itself.
Speaker #5: So, definitely, the export opportunity is very robust. All over the world, there is a very strong push for transmission grid investment, thanks to renewables and AI data centers.
Speaker #5: In fact, in many locations in the U.S., data centers are not getting clearance because the grid does not have enough power to supply to the new data centers.
Speaker #5: So, certainly, we believe that export opportunities are going to be very robust. We ourselves are expecting more than a 50% jump in export order inflow compared to last year.
Speaker #5: So, this is on the export side. It is definitely much, much more positive compared to last year. Regarding your second question about the guidance of 15%.
Speaker #5: So despite the first quarter growth of about 5%, see, the first quarter and quarter two are generally the lower—the slowest in terms of execution.
Speaker #5: You know, because of incoming monsoons and the monsoon period and, of course, in this first quarter we were also impacted by the West Bengal elections and the freight disruptions on the export side.
Speaker #5: So overall, for the year, we still maintain our 15% guidance. We are quite confident we will achieve that, and it will come as a combination of all our three segments: engineering, polymer, and infra.
Speaker #5: In infra, we expect that this year, already in the first quarter, we have seen good growth. So we are definitely expecting a higher growth in the infra segment overall for the year.
Speaker #5: Thanks to all the execution that will likely pick up post Q2 as well. And regarding your third question about the order book of ₹9,200 crores.
Speaker #5: So typically, our orders are executable over a period of two to two and a half years. So we believe that in this year, in FY27, out of this ₹9,200 crore, approximately ₹5,000 crore will be executed.
Speaker #5: And then there will be certain short-term orders also that will come during the year. So that I hope that answers all the three of your questions.
Speaker #6: Thank you, sir. Understood. Thank you very much, and all the very best, sir.
Speaker #5: Thank you.
Speaker #1: Thank you. We will take the next question from the line of K1 at Axis Capital. Please proceed.
Speaker #4: Am I audible? Yes. Thank you for the opportunity, and congratulations on the decent set of numbers. So, sir, my first question is regarding the sector outlook.
Speaker #4: So in the PBCB market, we saw some bidding moderation. In FY26, with strong Q1 inflows, are we seeing any deferred projects? Likewise, how much growth in percentage terms do you expect on the PBCB side for FY27?
Speaker #5: As I was telling the previous caller, that last year we saw a muted bidding activity or close to about, you know, 50 to 60,000 crores only in the PBCB segment.
Speaker #5: But this year, we expect that number to go up to 90,000 to 1 lakh. And it is further boosted by the fact that now we are seeing a lot of infra state projects also coming up for bidding.
Speaker #5: Earlier, what used to happen was that the interstate projects, the IFCS projects, were the only ones coming up for PBCB. All the intrastate work was still being done by the state transmission companies through the EPC route.
Speaker #5: However, now what we are seeing is that all projects, whether interstate or intrastate, are all coming through the PBCB route.
Speaker #5: And the project pipeline is also very robust, as published by the NTC, National Transmission Council, and also what we are seeing in the bidding activity.
Speaker #5: So we are quite confident that the ₹90,000 to ₹1 lakh crore will be bid this year already. A number of bids have already been floated.
Speaker #5: And in fact, in the sector, the large number of new players, new developers are also coming in. A lot of foreign capital has also been coming in, you know, by if you have heard you might have heard of I Squared, which has set up a platform, Qgrade, then NIIF, which is the sovereign of sovereign government of India fund.
Speaker #5: They have launched a new fund. They have launched a new platform called Anandgrade. So, there is a lot of new foreign capital also which is chasing the transmission sector.
Speaker #4: Okay, sir. Got it. So, yeah, that's it from my side. Thank you, and all the very best.
Speaker #1: Thank you. We will take the next question from the line of Harsh Muthika from SKP Securities. Please proceed.
Speaker #7: Hi. Good evening, sir. Congratulations on a decent set of numbers. I just wanted to get some clarity on the polymer segment. When we look at the segment, last year we achieved more than ₹500 crore of revenue.
Speaker #7: But this particular quarter has been slightly muted. But we maintained the margins for sure. So, can you please give us guidance on how the rest of the year will look like?
Speaker #7: And what has driven this dip in revenue?
Speaker #5: So again, it mostly due to ongoing commodity price fluctuations, what we have seen in the market. So most players have suffered in this current scenario where the trade has just been very cautious as because the commodity price movement has been very sharp on both sides, upper side and lower side.
Speaker #5: So, that's why I would say that trade has been cautious, and there has been some amount of destocking that has taken place. However, having said that, we are happy with the direction that the margin profile is moving in this business.
Speaker #5: And we are quite confident that, for the full year, we will be able to deliver a 20% improvement—a 20% growth in top line—with some improvement in margins as well.
Speaker #7: And sir, do we expect to increase the volume as well going forward, or will this mostly be driven by higher realizations?
Speaker #5: Yes, this will come with both volume and value.
Speaker #7: Okay. Okay. Thank you, sir.
Speaker #1: Thank you. We will take the next question from the line of Naveen Sahade from ICICI Securities Limited. Please proceed.
Speaker #4: Yeah, thank you. Thank you for the opportunity. Sir, a couple of questions. So, my first question was about the margin improvement that we have seen this year now.
Speaker #4: You would appreciate that this quarter was particularly known to have some cost inflation, even on the commodity side. Each of the things.
Speaker #4: So, I just wanted to get more—if you can talk more about how we managed the quarter-on-quarter margin improvement as well.
Speaker #4: And is this more sustainable or structural?
Speaker #5: Yes. Yes, sir. Absolutely, Naveen. So, as I have—we have—mentioned before, our long-term aspirational margins are 12% for the company. So we are happy that we are moving in that direction, on the right track.
Speaker #5: We have also benefited from some of our legacy contracts now getting over. And now, you know, hardly any of those are left in our order book, which were low margin.
Speaker #5: So definitely, that's why the new contracts are obviously either coming with a better quality, better margin profile. Apart from that, obviously, our constant efforts on operational leverage, et cetera, are also giving us results.
Speaker #5: With regard to commodity prices, you know, as I mentioned earlier, we have a combination of both firm price and variable price contracts.
Speaker #5: And even on the firm price contracts, we do deploy a number of ways—number of measures—to secure ourselves on the raw material side.
Speaker #5: So, I would say that due to all these efforts, we have been able to deal with the commodity price fluctuations that are taking place in the market.
Speaker #5: And yet delivering a margin expansion. So that definitely will be structural. We will consistently move towards our long-term aspirational margin of 12%.
Speaker #4: Understood. In the previous participant's question, did you say we are aspiring for 20% revenue growth this year? Because that would be like increasing our guidance from 15% in the past.
Speaker #5: No, I mentioned in the polymer segment, 20%. Overall, for the company, we are expecting only 15% revenue growth.
Speaker #4: Sure. And just one more question: if I am slipping, is there a way, you know, is the scope of work seeing any change?
Speaker #4: Because now, in the past two quarters, the infra segment is seeing a significant jump, whereas, as you know, our engineering main segment is a little soft in this quarter.
Speaker #4: So, is there a difference in the scope of work that we are doing for the client, or are there new orders or some new, like, you know, projects we would have received in infra which is driving this?
Speaker #5: No, there's nothing different. What is happening is key. See, the engineering segment mainly is suffering from what I mentioned earlier, which was a lower order intake last year, both on the domestic and particularly on the export side.
Speaker #5: See, the bulk of our new capacity that we have built up last year—also the 75,000-ton capacity which we built up—is primarily focused on exports.
Speaker #5: And export order intake was poor last year. And even on right now this year, there is still the disruption is there in terms of high shipping prices where customers are delaying the listing because they don't want to pay the additional shipping charges right now.
Speaker #5: So they are constantly deferring the shipments also. So, I would say that these are temporary in nature. Long-term, the outlook is very, very positive.
Speaker #5: As I mentioned, we are guiding for a 50% jump in export order inflow this year compared to last year. So, certainly, the engineering slowdown is temporary for this year.
Speaker #5: And not structural at all. Our new capacity which are going to come up, you know, in the in very soon the capacity is going to go up to 450,000 tons.
Speaker #5: And with the normalization of shipping rates, I would say with these new orders coming in, certainly we will see a bounce back in engineering revenue from next year also.
Speaker #4: Understood. Thank you, sir.
Speaker #1: Thank you. We take the next question from the line of Abhijit Singh from Systematics. Please proceed.
Speaker #4: Thank you for the opportunity. Actually, Naveen sir has asked almost all the questions that I wanted to ask. But sir, there is one thing I just wanted a bit more clarity on.
Speaker #4: So exports have declined in the revenue mix, right? And as far as we understand, both steel and aluminum have risen—about 10% for steel, and about 30–40% for aluminum in Q1.
Speaker #4: You know, why and why basis? And also across the industry, we have seen gross margin, which is essentially reflecting raw material cost as a percentage of revenue, has compressed sharply both Y and Y and Q and Q.
Speaker #4: And on the contrary, we have done an exceptional job, wherein even the export lever wasn't there in the mix. So exports went down, and therefore that could pull the gross margins down.
Speaker #4: Sir, what is, I mean, driving this kind of margin sustainment? It's very impressive. And in Q2 and Q3, these cost pressures continue. Do we see a similar margin range?
Speaker #4: You know, 10.5 to 11%?
Speaker #5: Right. So, as I was mentioning to Naveen earlier also, see, firstly, we had the burden of some legacy contracts, you know, till last year also, which are now almost negligible in the order book.
Speaker #5: So that has also contributed to the revenue or to the margins going up. Secondly, you know, we have maintained in the past that we are not that impacted by commodity price movements because we have a combination of firm price and variable price contracts.
Speaker #5: And see, variable price contracts, anyway, get adjusted on a month-to-month basis based on the commodity prices. And as far as the firm price contracts are concerned, they already have that buffer built in.
Speaker #5: To take care of the price increases, and plus we also deploy a combination of other measures like increasing inventory, and also, you know, doing some part hedging for some materials.
Speaker #5: So that's why we are able to manage and not let the commodity prices impact us. However, to answer your statement about steel and aluminum—see, steel, which is our major raw material, did see some increase, you know, earlier in the quarter.
Speaker #5: But by the month of May, we saw that steel prices had normalized to the pre-February or January levels quite a bit. So now they are completely back to the, you know, pre-February level.
Speaker #5: So in steel, there was only a temporary spike. Even aluminum prices have rationed to quite an extent. And, but like I said, we do deploy a number of measures including increasing inventory and hedging, et cetera, so we don't expect that commodity prices are going to be really a big concern for us with respect to our margins.
Speaker #4: Understood, sir. And sir, the export order inflow growth that you are expecting for the current financial year, will this primarily come from the USA and Australia?
Speaker #4: Is that correct?
Speaker #5: North America and Australia are going to be our main markets. Europe is still going to take some time because we are yet to get our approvals, et cetera, in place.
Speaker #5: So we are a bit ahead in these two markets—North America and Australia. So for this year, yes, certainly, we do expect most of our inflows in developed countries to come from here.
Speaker #5: Of course, from our traditional markets of the Middle East, Africa, and Latin America, we are expecting substantial flows from there also.
Speaker #4: Great. Because I think for the folio, we are maybe targeting about ₹1,100 crore of inflow from exports on that number, based on last year's export number, yeah.
Speaker #5: Absolutely.
Speaker #4: So, and of course, this is also coming from the fact that we've been thinking of increasing our export mix to 50%, and half of that would come from developed markets.
Speaker #4: And half from the other markets. So, I mean, we are on track.
Speaker #5: Correct. We are on track for that, yes.
Speaker #4: Right, right. Amazing, sir. And then lastly, regarding infra projects, what is the project that we are executing right now, this ₹250 crore revenue that you've got for the two quarters?
Speaker #5: These are all we do—we do infra projects in India only. We don't do any EPC projects outside of India. So all of these projects are the transmission projects which we have won from various TBCB developers.
Speaker #4: Right, right. So, EPC—you know, these are the EPC projects, and the civil portion, the non-product portion of the EPC projects, right? Those you book under infra.
Speaker #5: Services, the services portion, correct.
Speaker #4: All right. All right. So, thank you, sir. I'll get that in too.
Speaker #5: Surely.
Speaker #1: Thank you. We take the next question from the line of Basant Bansal from NBG Investment. Please proceed.
Speaker #3: Yeah, good evening, sir. I have three questions on the P&L. The first is about the labor, stores, and other project expenses, which have increased from ₹122 crore to ₹195 crore.
Speaker #3: So, if you can throw some light on that. Similarly, the employee cost has also increased from ₹55 crores to around ₹71 crores, so it will be helpful if you can also throw some light on that.
Speaker #3: And lastly, on the other expenses, which have increased from ₹117 crores to ₹129 crores.
Speaker #5: Sorry, the second and third aspect—the first, okay, the first one was the labor and store. The second was employee, and the third one was?
Speaker #3: Other expenses.
Speaker #5: The other expenses. Okay, sure. Okay. Just a minute, please. Yes, can you hear me?
Speaker #3: Yeah, yeah.
Speaker #5: Okay. So, sir, the labor store and other project expenses, these are directly linked to the EPC site. As the EPC revenue has grown, that's why we see an increase in these expenses, which are primarily site related.
Speaker #5: The employee cost, you see, is in line with the March quarter. In the March quarter, the cost was ₹69.6 crores, and in this quarter, it is ₹71 crores.
Speaker #5: So, it is not much of an increase on that front. And with regard to the other expenses—see, these always have a varying impact because of the kind of contracts which we are executing.
Speaker #5: In many cases, when we are executing CIF or DDP or DAP contracts, the export freight also comes into other expenses. And the export logistics cost also goes into the revenue.
Speaker #5: So honestly, this will vary from, you know, on quarter to quarter basis. You will have to it will it will not you will not be able to draw any particular trend from the other expenses.
Speaker #3: Okay. And so, coming back to this project expenses, I understand from your explanation that it is variable in nature. So, is the revenue—and is it in proportion to the increase in the revenue?
Speaker #5: Increase in the infra revenue, yes.
Speaker #3: Yes, infra revenue—yes, obviously. Your EPC revenue.
Speaker #5: Sorry, this is a combination of not just only linked to infra, but also our factory labor, stores, and other expenses as well.
Speaker #5: So it's a combination of that, but because infra revenue has increased, maybe there's a heavier increase here compared to all other quarters.
Speaker #3: Okay, okay. And the second question.
Speaker #1: Sorry, sir. Mr. Basant, I would request you to please join back the queue.
Speaker #3: Okay, okay. Thank you. Thank you.
Speaker #1: Thank you. We will take the next question from the line of Vanshita Amlani, an individual investor. Please proceed.
Speaker #2: Capacity expansion. So, will it affect the revenue growth of the...
Speaker #1: But your voice is coming through a bit muffled. Could you please fix that?
Speaker #2: Yes. Is it clear now?
Speaker #5: It's more or less clear, ma'am. If you can just speak a little louder, we'll be able to understand.
Speaker #2: Oh, yes. And there is a dealing capacity expansion. So, will it affect the revenue growth guidance of 15%?
Speaker #5: No, actually, there's only a few months' deferment in the capacity expansion. So we are going to be commissioning by the end of Q2.
Speaker #5: So honestly, we don't see any impact on our overall, you know, target of 15% revenue growth this year.
Speaker #2: And if you can give any estimate of the amount that is that will be used to repay the debt from the fund that is that is is used from QIP.
Speaker #5: Yeah. As of now, see, the entire proceeds we have used for debt repayment only. And the idea is to strengthen the balance sheet and, obviously, provide enough ammunition to the company for future capex.
Speaker #2: Okay. And as you previously said, the interest cost will be around 3 to 3.5% of revenue.
Speaker #5: Correct. So now, we will see some further improvement from that because of the fundraise.
Speaker #2: Yes, because if we calculate for FY27, it comes to 220, which is currently the expense. So, will it reduce as a percentage in terms of revenue?
Speaker #3: 3.2.
Speaker #5: Yeah, yeah. I think, like I mentioned to the previous caller, we are expecting that after the fundraise, this number should come in anywhere between 3.2% to 3.5% of revenue.
Speaker #2: Okay. Thank you.
Speaker #1: Thank you. We take the next question from the line of Deepam Gala, an individual investor. Please proceed.
Speaker #4: Hi. Congratulations on a good set of numbers. I just wanted to know the order book breakup between the EPC and engineering product segments. Hello?
Speaker #5: Just a minute, please. Yeah.
Speaker #4: Yeah.
Speaker #5: Right. So, out of the total order book—between 9,200—out of the total order book of ₹9,200 crore, you can assume about ₹1,800 crore is infra revenue order book out of this.
Speaker #4: That pertains only to TND, right?
Speaker #5: That pertains mostly to TND and some portion to telecom.
Speaker #4: Are you able to give any percentage for that?
Speaker #5: I would say about 75-25.
Speaker #4: Okay, works. And for order inflow, is it possible to give the same breakup?
Speaker #5: The order inflow—order inflow is 95% TND. The order inflow of this quarter, you are saying.
Speaker #4: Yeah, yeah.
Speaker #5: Yeah, yeah. This quarter, ₹1,600 crores is almost all T&D.
Speaker #4: All TND, EPC and non-EPC, any break-up?
Speaker #5: See, you may basically assume about 25% of the overall order to be infra-related.
Speaker #4: 25% to be?
Speaker #5: 25% for the infra portion, and the balance 75% for the engineering portion.
Speaker #4: Okay, okay. Got it. Thank you.
Speaker #1: Thank you. We will take the next question from the line of Naveen Sahadeo from ICICI Securities Limited. Please proceed.
Speaker #4: Yeah. Thank you. Thank you for the opportunity. Sir, if I missed it, sorry, but just wanted to check—what is the order inflow guidance for FY27?
Speaker #5: FY27, Naveen, I think, you know, we should do anything we should be able to do 7000 crores plus. For this year, 1500 we've already got.
Speaker #5: So, we are well on track. But I think for the full year, 7,000 should be very much possible. And that should take us to a closing order book of ₹10,000 crore plus.
Speaker #4: Great. And in this ₹7,000 crore inflow, how much in export orders are you budgeting? Is it about ₹1,000 crore, or how should one look at it?
Speaker #5: About ₹1,100 crore. As I mentioned, that's a 50% jump over last year.
Speaker #4: Right. Exactly. So if then the follow-up question on this is, if the vision is to, like, you know, be a significant export-oriented player, how would you now peg?
Speaker #4: Because you also mentioned starting the US operations this year, to begin with the US entity. So, how should one broadly look at exports as milestones?
Speaker #4: Let's say, in the journey from the current 9 to, let's say, a 40 or 50 percent, would it be fair to assume a 10 percent increase each year, or would it be more staggered?
Speaker #4: How should one look at it?
Speaker #5: It's possible. See, we will go at about—you know, we get a combination of margins as well as execution visibility. See, what happens is, many times, some projects, although they may come into the order book, the execution cycle can be very, very long.
Speaker #5: So, you know, we will have to then note necessarily that all order inflows translate into revenue execution on an immediate basis. So, I think we'll have to adopt a combination of this.
Speaker #5: And definitely, like I said, this year, with the increase in exports, if we are able to achieve this, that translates to about 15% of the total inflows coming from exports.
Speaker #5: By next year, certainly we can expect anywhere between 20 to 25 percent on a higher order inflow target. So I think that we are on the right track.
Speaker #5: And we're also happy that orders are now flowing in from developed countries, which is our main target. So I think, look, it's hard to put a number to it.
Speaker #5: Okay, what exactly will happen next year or the year after that, we don't know. But directionally, we are moving in the right direction, just like we are directionally in the right direction in terms of margins.
Speaker #5: So even in the export inflow, we are in the right direction. And long-term, aspirationally, just like our margin aspiration is 12%, our export order inflow is also targeted at 50% of our overall order inflow.
Speaker #5: And we'll get there in a—I think, I can't say by when, but I think definitely we are on the right track.
Speaker #4: Appreciate it. I then wanted to understand if one should look at this 15% revenue guidance also as a very steady, compounding kind of a number year on year.
Speaker #4: Or would you prefer to revisit this closer to the time when we have more orders finalized? How should one look at the revenue growth vision for the company?
Speaker #5: No, I think definitely you know, with the increasing increasing order inflow of this year, we can potentially target, you know, a higher revenue revenue growth of next year.
Speaker #5: I think this year, revenue guidance is constrained by the lower order intakes of last year. So, I'd say that now, with our increasing capacity and better order inflows—both in domestic and export markets—we can target higher revenue guidance for next year.
Speaker #4: Understood. And lastly, if you could just help us understand, how much is the legacy order drag on the order book as of now, very broadly?
Speaker #4: And then, by what time or within what time frame would it get executed, so as to know that thereafter the margins could actually see better improvement on new orders?
Speaker #5: Yeah. The legacy orders are less than 5% now, and I think, by and large, they'll be over this year.
Speaker #4: Understood, sir. Thank you so much.
Speaker #1: Thank you. We will take the next question from the line of Basant Bansal from NBG Investment. Please proceed.
Speaker #3: Yeah. So first, thank you for the opportunity. I just have one question from Metro's perspective: Are there any challenges or concerns that keep you worried?
Speaker #5: Good question, sir. I think on the challenges side, like with any sector where there are a lot of tailwinds and a lot of demand, I would say the biggest challenge is quality manpower—especially on the technical side, both in manufacturing as well as on the project side.
Speaker #5: And definitely, because there has been so much of a spurt in demand that has taken place, recruiting and retaining quality manpower is probably the biggest challenge—which keeps us awake at night.
Speaker #5: So, other than that, honestly, there really aren't many challenges in the sector.
Speaker #3: Understood. Understood. So, how do you manage that aspect?
Speaker #5: We are learning every day, but I think we have a robust HR team, and they do a good job making sure that all the manufacturing additional requirements and the site additional requirements are constantly met.
Speaker #5: And we are able to fulfill our commitments to the customers. And, of course, we also have a very robust system of taking in fresh graduate trainees.
Speaker #5: Every year, we take in close to about 200, or, you know, close to about 250 graduate trainees from very good institutions. And we have a very robust training program also.
Speaker #5: So, I think that is what any good corporate would do, and we are also following the same.
Speaker #3: Yeah, understood. Understood, sir. Thank you very much.
Speaker #1: Thank you. We will take the next question from the line of Naveen Sahadeo from ICI Securities Limited. Please proceed.
Speaker #4: Yeah, thank you. And just one last question, sir, from me. On the visibility of the short-term orders, I believe, if I'm not wrong, this quarter we saw short-term orders of almost about, you know, ₹233 crore—just arithmetic that I'm doing.
Speaker #4: So I wanted to understand, would it be more like a steady state? Can we see these kinds of short orders, or can they be as unpredictable as it gets?
Speaker #5: In terms of short-term orders, yes, we do get short-term orders every quarter. However, short-term orders right now are a challenge, at least in terms of export markets.
Speaker #5: Because like I said, export customers, even the ones, you know, where we have orders right now, they are deferring shipments because they don't want to bear the increased shipping costs.
Speaker #5: So I think, you know, with a lot of these projects which are getting finalized, they will lead to a spurt in short-term orders, both on the domestic and export side, because a lot of players will be challenged for capacity towards the later part of the year.
Speaker #4: Thank you, sir.
Speaker #1: Thank you. As there are no more questions from the participants, I would now like to hand the conference over to the management for their closing comments.
Speaker #1: Over to you, sir.
Speaker #5: Thank you, everyone. Looking ahead, we are confident in delivering a significantly better FY27. A multi-year growth runway lies ahead of us. With a record order book, rising capacity utilization, improving margin profile, expanding export footprint, and a structurally scalable manufacturing base, Skipper is entering a phase where growth, profitability, and return ratios are set to compound together.
Speaker #5: We appreciate your continued support and look forward to interacting with you again in the next quarter. Thank you.
