GMM Pfaudler Ltd
NSE:GMMPFAUDLR
| US |
|
Johnson & Johnson
NYSE:JNJ
|
Pharmaceuticals
|
| US |
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
Financial Services
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Mastercard Inc
NYSE:MA
|
Technology
|
| US |
|
UnitedHealth Group Inc
NYSE:UNH
|
Health Care
|
| US |
|
Exxon Mobil Corp
NYSE:XOM
|
Energy
|
| US |
|
Pfizer Inc
NYSE:PFE
|
Pharmaceuticals
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
|
Nike Inc
NYSE:NKE
|
Textiles, Apparel & Luxury Goods
|
| US |
|
Visa Inc
NYSE:V
|
Technology
|
| CN |
|
Alibaba Group Holding Ltd
NYSE:BABA
|
Retail
|
| US |
|
3M Co
NYSE:MMM
|
Industrial Conglomerates
|
| US |
|
JPMorgan Chase & Co
NYSE:JPM
|
Banking
|
| US |
|
Coca-Cola Co
NYSE:KO
|
Beverages
|
| US |
|
Walmart Inc
NYSE:WMT
|
Retail
|
| US |
|
Verizon Communications Inc
NYSE:VZ
|
Telecommunication
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
1 194.4
1 639.65
|
| Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
|
|
Johnson & Johnson
NYSE:JNJ
|
US |
|
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Mastercard Inc
NYSE:MA
|
US |
|
|
UnitedHealth Group Inc
NYSE:UNH
|
US |
|
|
Exxon Mobil Corp
NYSE:XOM
|
US |
|
|
Pfizer Inc
NYSE:PFE
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
|
Nike Inc
NYSE:NKE
|
US |
|
|
Visa Inc
NYSE:V
|
US |
|
|
Alibaba Group Holding Ltd
NYSE:BABA
|
CN |
|
|
3M Co
NYSE:MMM
|
US |
|
|
JPMorgan Chase & Co
NYSE:JPM
|
US |
|
|
Coca-Cola Co
NYSE:KO
|
US |
|
|
Walmart Inc
NYSE:WMT
|
US |
|
|
Verizon Communications Inc
NYSE:VZ
|
US |
This alert will be permanently deleted.
GMM Pfaudler Ltd
You don't have any saved screeners yet
Ladies and gentlemen, good day, and welcome to Q4 FY '24 Conference Call of GMM Pfaudler Limited. [Operator Instructions] Please note that this conf is being recorded. I would now like to hand the conference over to Ms. Priyanka Daga. Thank you, and over to you, ma'am.
Thank you, Manav. Good day, ladies and gentlemen. A very warm welcome to all of you into the Quarter 4 FY '24 earnings call of GMM Pfaudler Limited. The earnings presentation was approached on the stock exchanges this evening and is also available on our website. Hope you have had a chance to go through it. So the management we have with us our Managing Director, Mr. Tarak Patel; our CEO of International Business, Mr. Thomas Kehl; our CEO of India business, Mr. Aseem Josh; our CFO of International Business; Mr. Alexander Porter; and CFO of India business, Mr. Manish Poddar. The performance of the company, after which we will get into the Q&A. Before we begin with the overview, update this name. The education that was uploaded on the stock exchanges as well as our website, including our call discussions that will happen now contains only have certain forward-looking statements regarding our business prospects and profitability, which are subject to certain risks and uncertainties. The actual results to materially differ from those in such forward-looking statements. I will now hand over the call to Mr. Patel to provide an overview of the performance. Over to you, sir.
Thank you, Priyanka. Good evening, everybody. We are happy to report a strong finish to the financial year, where we were able to grow both revenue and profitability by 8% and 11%, respectively. Despite challenging business environment, driven by a weakness in the chemical sector, we've seen sequential improvement again in Q4 order intake, that grew by about 14% to about INR 851 crores, driven by the [indiscernible] technologies and system platforms. This is partly a result of our business diversification strategy and has helped mitigate the slowdown in the chemical sector by allowing us to focus on nontraditional industry segments. [indiscernible] also, 1 of the companies that is there within the group, has seen an improvement in terms of order intake and in terms of EBITDA, which is mainly coming from the semiconductor industry. So like I mentioned, a lot of the new industries that we have diversified into is giving and making up some of the shortfall that has come from the slowdowns in some of the key industries that we cater to.
Further, we are currently having a strong opportunity pipeline as well, and we believe that the order intake for Q1 will continue also in a similar trend.
In terms of financial performance, our consolidated revenues for the year grew by 8% to INR 3,446 crores, while EBITDA increased by 11% to INR 477 crores, with an EBITDA margin of 13.8%. Q4 revenue was at INR 741 crores, and EBITDA stood at INR 91 crores, with margins at 12.3%. Profitability margins improved in the international business, while margins in India has been kind of stable for the last few quarters now. This is the result of the ongoing cost control measures and the focus on operational excellence.
Our balance sheet metrics have also seen improvement, and [indiscernible] has upgraded our rating to the positive. There was a strong focus on improving our working capital during the year. This has resulted in significant cash inflows in H2, leading to higher debt repayment and improved debt ratios. Manish will be talking about this in a minute.
In terms of corporate updates, we have completed the consolidation of [indiscernible] in Q4. Canada. The results have been published includes MixPro. I also welcome a leading member to the GMM family. Ms. Shilpa Mineola, who has been appointed as an Independent Director effective May 22, 2024. With her appointment 70% of the Board now comprised of independent directors.
I will now hand over the call to Manish, our CFO of the India business, and he will take you through the financial performance of the company. Thank you. Over to you, Manish.
Thank you, Tarak. Good evening, everybody. We'll refer to the slide deck uploaded with it back to Q2 FS 24. Apart from the P&L, our focus has been to strengthen the balance sheet. You may recall, earlier in the year, we had communicated that we plan to -- we target to repay INR 140 crores of in financial year '24. Happy to report that we have repaid INR 145 crores of long-term debt in this year. We have prepaid and closed the entire debt of Hyderabad and Vatva acquisition that we took in the past 2, 3 years. Overall, we have repaid INR 96 crores of long-term rate in India and INR 50 crores for a long-term rate in the international business. This has helped us improve our financial governing Our net debt to equity now is at 0.4%, and net debt to EBITDA is at 0.8%. In the upcoming years as well. We plan to continue this journey.
We have marginally improved our working capital days for [indiscernible] inventories in the FY '24 as referred on Slide 8. Moving to cash flow front. On the cash flow front, we have significantly improved our cash generation in H2 as demonstrated in cash flow Slide 9 of [indiscernible]. This is primarily on account of inventory optimization and cash collection. While in H1, due to operational reasons, our working capital has expanded, we brought it back to decent levels in H2. Overall, through the year, we generated INR [ 53 ] crores of free cash flow, which is a decent over 50% of EBITDA of INR 477 crores that we did in this year. With that, over to you, Priyanka.
Thank you, Manish. Operator please open the line for questions.
[Operator Instructions] Our first question from the line of Anirudh Cheti from [indiscernible] Investments.
I have 2 questions. Sorry, I just wanted your update on the the competitive environment in the domestic GLE space, you did mention that demand is still weak, but how has the competition intensity evolves into last book? I just wanted your views on that.
Yes, sure. So this is Aseem. I'll address it. So yes, demand, as you know, continues to be a little sluggish. We have to compete vigorously. Having said that, we've taken efforts to make sure that we are competitive from a manufacturing efficiency standpoint and also reaching out to a broader set of customers. So I think that is helping us in winning more orders and capturing share in what is right now a slow market for us.
I think maybe just to add a couple of points. The last 2 quarters have seen significant improvement in Indian [indiscernible] line order intake. So I think we were kind of, in Q1, Q2 around the INR 70 crores, INR 80 crores, INR 90 crore mark, which has doubled or increase to INR 150 crores, INR 151 crores in that quarter. So I think the glassine business has seen some improvement. I think our market share probably has also increased. But as Aseem mentioned, the competitive incentive is still there. And hopefully, once the market and industry kind of turn, you will see some of the pricing pressure fully off.
Clear. And sir, second question on the international front. The revenue seems to have grown, but the order intake declining. So just wondered your read of the situation there in terms of your conversations with the customers there, are they pausing some of the projects that they intend to do? Is there any delays happening there? Like some color around that the global environment would be helpful.
Sure. So I will hand over the call to our International CFO in a second, but -- Aseem in a second. What I would like to just mention is that -- do keep in mind that the international business obviously has a large component, which is services, and that keeps getting adding on as the year progresses, so a short delivery items. We do obviously understand that the starting backlog is a bit lower than last year. And that's definitely something that we are trying to improve and increase the order intake. We had received a large order in Q4, a $12 million order from the U.S. And we have further also this quarter seen another large order coming in from the U.S. market as well.
So in terms of orders, indeed, [indiscernible] still remains very strong. Decision-making has been a bit slower than usual, but we are seeing now some positivity at least in U.S. and Europe, where we do see order intake also improving. And we are seeing companies similar here in India. Thomas, do you want to add something as well?
So thanks for the lead in. I think there's not much to add to that, what we said. The order intake, as you rightly mentioned is lower than the revenue last year. That is because the markets are -- have slowed down somewhat, but we are seeing recovery signs and signals in Europe as well as in Americas. So the projects are out there. decision-making processes are [indiscernible] slightly improving in speed. That is a good news. We have been gaining a couple of large projects, especially in the Americas and the existing business. that were due or we are expectations in this quarter in that business. China is a different issue. China is still rather slow. The number of projects is not necessarily increasing, but we expect the China recovery also very, very soon.
[Operator Instructions] [indiscernible].
In the presentation, you have shown the EBITDA for next year at INR 630 crores as against which gets us to the margin of, say, 17-odd-percent. But when we say historically last 10 years, only is it the 17% mark once in FY '20. So what makes us so confident that we are achieving those margins again this year?
This is -- you are talking about the guidance, right?
Yes.
The guidance was made obviously what it was 2 years ago now. So [indiscernible], just to give you a background, the 2.5 or 3 years back, we had given a guidance for INR 3,700 crores of top line and INR 600 crores of EBITDA. This slide is basically just a reference to where we are versus what we had guided to.
So it's clear that obviously, since that time, the industry has seen a kind of a down cycle, especially the agrochemical industry, which is obviously a big chunk of our glass line business. And some of that, you obviously see in terms of order intake and the current margin scenario. The idea obviously now is to kind of use this time, this kind of a down cycle to kind of improve on the internal cost efficiency measures, which we are working on. And we believe and we do see some signs of recovery. And hopefully, as the market recovers, some of the benefits that we will be working on today will kind of translate into much better margins as well.
Going back to your question on historical margins, yes, from an industrial perspective, capital goods company, 13.8% EBITDA margin for the year. In the peak of a down cycle, I think it's a pretty pleasing performance. And I think we've kind of held our ground quite well. Going forward, obviously, we want to improve on this number. And that's what the kind of idea is. It's been 3 years since we've acquired the [indiscernible] business since the acquisition has happened, 3.5, 4 years, we see significant change in size and scale. Even the margins internationally have improved significantly, nearly double. The Indian margins are now kind of stable. We have obviously a clear strategy for our different product lines. We have higher growth product lines coming from newer acquisitions. We have the regulatory business in India, which is also doing exceedingly well. So we have come out this kind of rigs associated with the down cycle in chemical and pharma is being kind of compensated by the other product lines, right? So I think, we, today, are in a position to kind of start looking at maybe a 3-year plan again. And hopefully, in the next maybe few quarters, we should be able to kind of come back to the market with some kind of recalibration in terms of where we are and where we want to go. And I think that's something that we've been working on internally. And I think, very shortly, we'll be able to share some kind of road map with you and the investor community.
Sir, got it. So sir, this number, which is in the presentation is not the guidance for FY '25, if I understand correctly. That means...
Dance or that was given, we are just giving to comparative to say that, yes, is the guidance that we have put out and how we are tracking towards that guidance. This shows you that we are not changing the guidance mid-way. So that number is out there and we are showing you where we are. Obviously, the guidance will probably get recalibrated when our new guidance comes in, in the next few quarters.
Okay. Okay. Got it. And just from an opening commentary, we're seeing good demand from your semiconductor industry. So sir, what exactly do we provide there? And what kind of demand are we seeing I mean this subsidiary?
So we have a company in the U.S. It was historically part of the Pfaudler Group. And we used to make [indiscernible] line vessels. So these are very kind of color business, there equipment for very high purity applications. And there's a very specific kind of a low rental requirement for the semiconductor, 0 [indiscernible]. And Elon has capabilities and experience in technology that goes into this. And that's driving some of this improvement in that business. Semiconductor also is an interesting area for us. It is not only to be in cater to them through headlong, but there are other product lines that could also go into some of these that we can get the downstream of upstream kind of chemical facilities, right? there are specific chemicals that go into -- so 1 of the areas that we're trying to see there's other areas of adjacency is in the semiconductor space where we could look at cost arise of our other equipment.
Right. Sir, what percentage of our order book will be coming from this?
I think the size of [indiscernible] today is about $25 million, or $25 $30 million, which last -- I mean 2 years ago was about $10 million to $12 million for insignificant growth. [indiscernible].
The number of the ranging all right. It's about $35 million business. We expect this business to grow significantly further due to the investments that are done in the semiconductor industry in the Americas, but also starting in Europe right now. We are well positioned. The quality and the purity of our [indiscernible] is outstanding, and we are #1 in quality performance in that industry. We have been investing in a new site, setting it up as we speak, having the capability to also provide all sizes that are needed, tanks, larger tanks, smaller tanks and midsized tanks to the industry, and this is how we actually support [indiscernible].
We have our next question from the line of [indiscernible] from UnifiInvestment Management.
And Tarak, just on the international market, while you're going through the presentation, we showed that they are not saying that they stated for the final sale value for the [indiscernible] acquisition. So is there any one-off in the profit after tax we reported for the international business over there of just INR 2 crore?
So on Mixion, this was acquired last financial year. And as per the PP allocation that has to be done once the evaluation has to be done within 12 months. So in this quarter, we see that revaluation. And accordingly, there was an inventory -- so there was an intangible created and that's been intangible as per th PPA to be amortized in this quarter, and there would have the onetime impact for Mixion related transactions.
So how much would that be, if you can quantify that?
Yes. about $1 million, I think.
INR 8.5 crores?
It will come probably next year. mix was approximately $1 million.
But I think what you are asking, I think what this is Adidas asking is that there was a onetime charge for acquisition expenses. There has been, I think, a $1 million charge for accusing expenses in this quarter because we were kind of working on a couple of targets, and we have spent some money. There is a $1 million charge in this P&L as a onetime charge.
That is also there additionally.
Okay. Okay. So if I -- so what you're comparing is the pet reported on the Slide #28. If I look at the like-to-like excluding the onetime charge, it will be more than INR 10 crores, right? Not mentioned anywhere in the note.
You're talking about the distance from EBITDA to PAT in like [indiscernible] international business, right?
Yes. Yes.
So 1 is the amortization of the Mixion intangible, that is what has happened. And the second 1 is the additional deferred tax provision that we had created in this financial year. And maybe, Alex, you do...
And both of these are noncash.
Both of these are non-cash.
Okay. So if you can quantify mixel amortization, you said $1 million, -- what will be the more...
We have given that as a not typically in the disclosure that is just for the financials. You have that number in that...
[indiscernible] Refer to that.
Effective tax rate for the India and the international business collectively stands at 27%. These are onetime adjustments on account of a new entity acquisition and related defer tax creation.
Okay. Perfect. And the second is how the total overall environment is looking into the international market now? You were saying that there was some slowdown in the -- because the international market was doing very well in last quarter year-on-year. We have seen 1 quarter where we have seen the year-on-year degrowth quarter-on-quarter growth in the international market. So it is coming...
And maybe give you a little bit of what we expect. I think international business will probably trade around the same kind of margins for the next financial year. We are quite confident of that. There are a couple of areas that we need to call out. China is definitely an area where order intake has been slow, and we probably will face some absorption issues in China, but we expect the China recovery to happen, and we are planning for that. We are also doing a couple of restructuring exercises in Europe, especially in our U.K. site, where we have restructured that site to become a [indiscernible] facility. So we've kind of reduced our cost structure there.
In the meantime, we have also kind of started our journey of a low-cost source in Eastern Europe. So that's first few orders have been placed to a local supplier there to cut down our cost in Europe. So many of the strategies that we are building will hold and help us maintain margins if not improve. India also, we are going to be working on a transformation project here. So that's something that we are quite hopeful to in terms of cost savings. But generally, in terms of environment, if you had to compare with 12 months ago, I would still say that we are probably looking at slightly a more positive outlook. However, are we out of the woods yet? I would say we still have maybe 6 to 9 months before we see a complete turnaround, right? But the signs are positive. And luckily for us, we've made up some of the shortfall. We've been through the most difficult period with a lot of help through other business lines like our heavy engine business, where we have catered to Adani Group or the Reliance thing is completely different from our traditional markets of chemicals and pharma, right?
So -- and then obviously, the services and the systems business internationally has also kept us and kind of made up for some of the shortfalls that has come because of the slowdown in the chemicals and the subsequent impact on the glass mining business, right? So all in all, I think we've kind of made it through the toughest part. I think now that we have focus on internal cost concerns, I think we are going to be in a strong position to kind of get some of the benefit as and when the market was to turn.
And starting the year today with INR 1,700 crore backlog is not a bad number. Obviously, at the highest point in the last 2, 3 years, if we checked, it would have been around INR 2,200 crores. So that was a bit abnormal. The market went a fire. Somewhere between, let's say, INR 1,800 crores to INR 2,000 crores would be a good number to start with, right? So the focus is definitely on internal cost efficiencies. At the same time, we are being aggressive in the market. And I think if the market was to turn a little bit more positive, which we expect it will, I think there will be a nice uptick in the business.
Okay. Lastly, if I may ask on that -- we have given this guidance 2 years back. Obviously, today, the margins are lower, the revenue is in line with the margins. So is there any color which you can throw on that those guidance which we had given 2 years back in terms of the ROCE, EBITDA and the revenue? Revenue is not an issue, but especially on the EBITDA and the ROCE?
[indiscernible] [ EBITDA 630 ] is a tough call at this stage for FY '25. We are done [ 77 ]. So I think past 2 years have been gave us on track, but then, of course, with regard to the scenario in which we are operating now that seems a bit difficult. We have been -- as Tarak mentioned, we have been focusing on cost optimization and getting [indiscernible] as he mentioned earlier [indiscernible]. So -- and of course, RPs just an outcome of what we have earned. It will take long with the EBITDA numbers...
But I think we are quite continue growing the EBITDA number for next financial year as well. I think we all are aligned that, yes, obviously, a year but we have internal measures, but we've already taken actions, and we believe that we have responses to at least maintain or grow margins, right? So the idea will definitely grow and we kind of at least in terms of cutting down cost structure where we can and then make the move to the both operational efficiencies, we will definitely work towards that.
[Operator Instructions] The next question is from the line of [indiscernible] from JM Financial.
Now that we are seeing a growth in our order intake, can we expect -- like going forward, do we expect maybe another couple of quarters of Y-o-Y degrowth? Or do we expect that from here on, at least there will be some recovery in terms of Y-o-Y growth? That's the first one. And for FY '25, like I understand that you want to come back later with the guidance, but some initial idea on what can we expect in terms of revenue? And like would be more towards a recovery in the second half of year, would that be the case?
Yes. Do keep in mind that there is a minimum lead time associated with executing orders [indiscernible] different for both India and international business. So in India, at least, we can book orders till maybe November of this year that kind of gets shift out in this financial year. In international business, I think it's a little bit shorter time frame, so August will be the [indiscernible] we need some of these orders to come in. You keep in mind also the International business has 30% of services revenue coming in, these orders can come in as and when [indiscernible] the end of the year, right? So all in all, I think the International business is starting off with a pretty decent backlog. There are certainly areas where we have, I would say, maybe shorter lead times. And in these facilities, we need to kind of be more [indiscernible] book to orders and that's what we are working on. But generally, in terms of guidance, I think it's better that you wait for the Investor Day.
The strategic plan of the company is being worked upon. We had a Board meeting today also where we have discussed it and we will be coming with the external community with a presentation and a deck and our thoughts over the next few years and what we expect the company to be strategically 3 years down the line, right? So I think just give us a couple of months here, and we will come back to you.
In the meantime, just in terms of general outlook, I think you can say that next year should see some amount of growth, both in terms of revenue and profitability. And obviously, that is a bit of a conservativeness [indiscernible] and I think improve improve rather quickly, then we could definitely outperform that, right? So I think that is to kind of be a little bit conservative at the same time and if the market turns, we will definitely take advantage of that.
All right. Just to follow-up. So you've mentioned the minimum lead time for India to be in November and for international to be August. This is for the new orders which are coming, you're saying like that's when you start supplying these new orders? Is that...
What I'm saying is if our booking orders in November, I can still ship it out by March 31 in India. If I book an order by August 31 in international, I can ship it out by March 31. That's what I was saying.
Our next question from the line of Kishan Mundhra from Guardian Capital.
[indiscernible], we can't hear you. Can you unmute maybe or...
No, I think maybe he'll get back in the queue. Maybe we can try the next one. [indiscernible].
The next question is from the line of Rahul Agarwal from Himalia Investment Advisors.
My question is more on the end-user industries that we serve. Do you think that there is significant overcapacity that has built in into the end user industries, which would imply that the order inflow slowdown that we have seen over the last 2 quarters is likely to be a prolonged 1 over the next 3, 5 years as you look at it? Or what sort of a rate -- growth rate could you under what you expect from our core end user industries over the next 3, 5 years?
So I can give you some kind of maybe idea in terms of what we are seeing, predicting how these industries will kind of react would be a little bit difficult. But generally, let's break it down for Indian pharma. So I think pharma, we are already seeing a nice recovery. I think our pharma looks good for the future. And pharma has seen all the pricing pressure in the U.S. kind of also kind of reduced. And I think people are investing now. We have good large investments coming in pharma, some of our key customers that outline projects and large projects. I think the contract manufacturing in pharma is also picking up. And some of the companies that we are talking to are saying that, hey, listen, we want to compete with China, and we want to put up these kind of facilities and take them head on, right?
So pharma is not looking that bad. I think what has really hit us is chemical and each chemicals basically agrochemicals, which has seen a lot of oversupply. I would not say overcapacity, but I think there's been dumping, overstocking, which has thought would be kind of slow down. But we think that this can change very quickly, right? So we are already hearing that now in the next couple of quarters is overstocking problem in going to kind of reduce and some amount of the business is going to come back. But do keep in mind, there's always going to be competition from China, and there was a lot of pricing pressure from the Chinese competitor. That's something that I don't know how exactly to play out. But probably it's not something that is very sustainable. But all in all, I think if you ask me, I would say about 9 months before we really see a significant change. So I think the next couple of quarters look somewhat similar. You will see some improvement, but I don't think it will be significant. I think significant reinvestments probably start maybe early next year.
Got it. So that's very helpful. And typically, what are the replacement cycles for existing capacity that your customers have? Like do these equipment the last 10 years, 20 years, how do you think of replacement cycle? And second, from a longer, in 3, 5-year perspective, it's hard to say, take guess on where some of CapEx -- where would the CapEx would probably end up? Would you say high single digits? Would you say double digits, where would you put that?
So I think firstly, I just want to add before we kind of get into the -- the first question is that as a company and we deliberately try to diversify and take the risk away from our [indiscernible] business. [indiscernible] business was really accounting for 80%, 90% of our business, not so long ago. Today, it's down to 50%, right? And also chemical Pharma work out in for nearly 80%, 90% of our overall business, That's also down to maybe now 50%, right? So as a company and as management, we've been very clear from day 1 that we need to diversify both the product portfolio and the industries that we serve because having all your eggs in 1 basket, [indiscernible] only 1 or 2 industries, it's going to be kind of detrimental and very risky if those markets were to slow down, right? So today, I think we'll be able to mitigate some of these risks and maintain our margins at a decent level because we have the other businesses that have performed well when our glass line business has slowed down. So I think last line for us, really the way that you should think about it is the bread and butter business. We are market leaders, but that's not a high-growth market for us. We're going to consolidate this position [indiscernible] improve margins that kind of sell technology and really bid on what we already have.
The growth and the margin improvement in the other platform is going to be much more significant, much more faster. These are smaller kind of businesses with high growth potential, low market shares, where we can grow market share. And many of these new products also cater to some of these new tech and new age industries, right? So things like we [indiscernible] semiconductor or things like [indiscernible]. These are things that we've served now, but these could be very significant markets in the future, right? So as a company, obviously, chemical and pharma are our traditional industry, and over time, we hope that our kind of exposure to these would be reduced, and we have other industries that kind of make up some of the segments as well, right. Aseem, you will add something to this?
I think, I mean, to your specific question about replacements, it really truly does depend on the kind of applications, the customers, maintenance cycles, et cetera. But as a rule of thumb, some you would see for our reactors, I think, 7, 8, 9 years need to be replaced much sooner. And the other pie to use more carefully or sparingly maintain much better. So the line is there tend to be a lot longer. But that's sort of how I would...
Just 1 more point here, Rahul, also, that do keep in mind that the Indian industry has been significant growth -- chemical industry has seen significant growth in the last maybe 10, 12 years. This is when we started kind of supplying the reactors to the SCI of the world. So how we are reaching of course, the these reactors are kind of to a cage where they will either need replacement, [indiscernible] or spare parts, right? So we do expect that the installed base, which is now quite large and has been there for the last 10, 12 years, will start providing some type of services or [indiscernible] revenue. We hope to do that. And [indiscernible] kind of be proactive and reentering some of it by setting up, let's say, service centers, go to our customers, putting more of our kind of focus on reclassing and hopefully, like in the international business, which is a much more mature market, they already see 30% to 40% of their revenues coming in from reclass and services, right? So India currently is less than 10%. So hopefully, there will be [indiscernible] and regard component, that could also kind of bump up. And hopefully, that kind of comes in in the next maybe few years or even earlier than that.
Got it. That's very, very helpful. And last question on the GMV side. You said you've diversified away from pharma as well. What could be the -- I couldn't get the number. Can you repeat what would be the industry end user industry composition broadly between pharma, agro chem and others on the GLE side and also on the non-GM side.
Yes, chemicals and 40 is pharma generally only on GMV. There's a little bit of die and stuff like that. And these are the 2 industry segments that we only serve. There's a little bit of pain and die, but it's not.
So yes, just to be clear, the segment -- industry segment data that Tarak alluded to was for the company, not only for GLE. GLE, the glass line equipment primarily goes into chemicals and pharma, with very few other applications.
So just to finish at this point, 3, 4 years ago, if you were like INR 500 crores, INR 600 crores of revenue, we were 80% last line. And today, we are now half and half, right? So so we've diversified and let's say our INR 1,000 crores whatever so that we are doing INR 500 crores comes [indiscernible] INR 500 crores comes from non-glass lines.
SP1 We have our next question from the line of Rohit Ohri from Progressive Shares.
A couple of questions. During the year, we saw promises will be cutting resins and inaugurating quite a lot of service centers or maybe revitalizing some businesses in Europe and U.S., how many of such events are still pending? Or do you think, how many of these restructuring or revitalizing processes are there?
Are you following us around, rohit? How do you know I guess for the linked in right? Yes. So yes, service is a big component, and we have kind of created a couple of service centers in our existing facility. So we don't really take new facilities like we silane service center in [indiscernible], where we had a facility, and we are just adding this additional kind of [indiscernible], Similar in Brazil as well and in the Americas. But I think there is 1 more ribbon that you are going to cut. So there's 1 more that we added also now in [indiscernible]. But Rohit, we are also having another unit that we acquired 51% shareholding in the U.S., in the south of the U.S., where we will be operating that factory in July [indiscernible].
[indiscernible] in the middle of July in the south of U.S.A. in Georgia, where we end up in a joint venture. We have built up a new facility together with a partner there, and it's specialized in reclass and services that we will have another service station and the [indiscernible] southern part of the U.S. and maybe Mexico much better in the future than in the past and -- which we have increased further our service footprint.
Okay. For the brand mix [indiscernible], by when do you think that it will be probably 50% of the total revenue?
Of [indiscernible] consolidated revenue? I mean so it's very hard to say now. We think the target is we are currently around $40 million, $50 million of revenue in [indiscernible]. I think the $100 million target is what we would like to achieve in the next 3 years or so. That's the plan. I think how that kind of fits into the overall [indiscernible] things would kind of difficult to get. But I think if you had to take a number, $100 million number, the that number to kind of make it a platform with enough scale and size to have a separate kind of focus for that platform, right?
Do you think that it makes sense lodging all the businesses, maybe [indiscernible] Mixion sell as well as MixPro?
Launching Sorry, what was the question?
Do you think that it makes sense merging all the [indiscernible].
Yes, so we have merged the business internally. We now have a Head of [indiscernible] that we hired from 1 of our big -- I guess competitors, I would say that. But yes, so we are giving it the focus that it reserve. We're being the relevant capabilities and expertise, And Mixion is definitely something that we are focused on. We are now consolidating the design, the brand between all 3, 4 of them and then creating a new go-to-market strategy for the Mixion business. That's underway as we speak. And I think Mixion we all believe more dominantly we can copier as well is going to be a very important part of our growth story.
I mean, Mixion industry in total is a very large industry, market bigger than the last line. This is why we're also interested in participating and becoming a bigger player. And the acquisitions of [indiscernible] companies over the year is giving us the critical mass to play there. Our technologies are, in most cases, adjacent, some are overlapping. So there's a little bit of consolidation needed there. However, our main focus is on growing the business, growing the market share as fast as possible rather than consolidating.
There were no patents filed this quarter as well. I think that earlier in the Mixion space. So we are also developing new technologies along with the companies that we've acquired to really be innovative in Mixion and differentiate ourselves from our competitors as well. So everything is ongoing. It takes a bit of time. But [indiscernible] is definitely a business line that is complementary. It's driven by technology and differentiated, and we're actually solving a problem for the customer, either you're being down in [indiscernible], there's cost, there is quality of its product. So there's a lot of benefit tangible benefits for the customers that we can touch, and we think that is something that has been a strong, strong growth driver for us in India for the last few years and now internationally as well.
And just to iterate are 2 patents that have not been [indiscernible]. So they are now ramped in [indiscernible]. We will buy actually quite a while back [indiscernible].
Last 1 from my side. If [indiscernible], if you can take us through [indiscernible] and order joining process to revolutionize the extractive industry. and something related to asset recovery or something of that sort. If you can take us through that initiative?
Yes. So that basically is not -- it's not -- I mean yes I can, but basically working along with an engineering company to kind of prepare and kind of use our equipment and their kind of process technology to kind of go to the customer together and give them a combined offer, right? Because sometimes [indiscernible] manufacturers, we don't have this technical [indiscernible] know-how and these guys have it. So we don't have on the [indiscernible] stuff. So we put it on together 1 single package and [indiscernible]. This is 1 way of kind of extending our market outlets, right? So it's a good position and a good place to be. But obviously, we need to work together with them to go out and meet the requirements of the customer.
Do you think do you intend to buy it...
We have a next question from the line of [indiscernible] from [indiscernible].
I Have a question within technology. So have started approaching customers with the product? And how has been the underlying traction [indiscernible].
Sorry, we could not give a breakout. Can you repeat, please, Jain?
Sure. Am I audible now?
Yes, better.
So I had a similar question on mixing technology. So how has been the traction for us? Have you started approaching customers with the product? What is the kind of reception that we've received on ground?
Yes. So we've been selling mixing in India, certainly for a long time as a mixed and let in their markets. After the acquisitions of MixPro and Mixion, we've been able to take expertise, it track efforts and sort of customer credentials from there and use them to sell into each of those markets. So there are [indiscernible] biogas are just 2 examples where we've been able to leverage our broader network and [indiscernible] overseas and take them to customers. And that's just an example of several other areas.
Those areas where we, as [indiscernible] mainly focused again on our traditional markets of chemical and pharma. With the acquisition of Mixion and MixPro, we have had obviously a significant opportunity in order intake in new industries. For example, metal and mineral is an area where we have a lot of kind of business. So now we do work with [indiscernible], Vedanta and companies like that. At the same time, we were not [indiscernible], but I would [indiscernible] India what we do [indiscernible] but certain kind of infrastructure projects as well. And all the other ways of stuff that is to India. So India has been kind of a curve ahead in terms of permutation, right? So we've done a lot of work [indiscernible] companies like [indiscernible] now the same technology is now being kind of in outside if the perpetration technology within the group that have been better. So it goes owe but having [indiscernible] and having experience and the way that when we look at acquisitions, we try and buy company [indiscernible], which has a relevant our experience, which we don't currently have within the group, right? So that's a little bit of kind of area that we want to enter new markets. And like our these experiences and [indiscernible] that the company has, we get automatic [indiscernible] through these acquisitions.
Got it. Sir, the incremental growth that you mentioned, reaching around $100 million of top line for mixing is largely through international business, or is it driven from domestic revenues as well?
Both. It's a global number. It will come on board. The manufacturing, obviously, can be pushed out to low-cost manufacturing. We don't need to have [indiscernible] manufacturing. But yes, it's a global requirement. The market side, as Thomas spoke about on the global market side, and we think goes into everything, right? So we'll be supplying mixing to [indiscernible] for the Aramco plants, right? They are going to be supplying mixing to cement factories in Southeast Asia, right? We will be selling [indiscernible] to Vietnam and Australia. So it's really a global play. You could [indiscernible] in Europe or in Nederland. So it's really a global day and [indiscernible]. And the relationship and the network we have, we can definitely leverage the global network to sell some of these products and technologies. That's the idea. And it's all over the world, the growth will really come all over the world.
Got it. And sir, in stand-alone business, what is the kind of capacity utilization for this year or for the quarter?
Sure. So we are -- in our [indiscernible] business, right now, we're at about 65-ish thereabouts. In some of the others, it's a little higher [ 70, 75 ].
And last line.. Sorry, sorry.
No, go ahead.
And last thing in technical reach, what kind of utilization 80%?
Yes. So there is a lot of things. Certainly, we can operate at 90% also. Obviously, there lead times become longer. There are a lot of times we can do to improve throughput of our line, which is what we are currently doing. So once the market comes back, we feel confident that we can certainly drive a lot more output from this -- from the existing assets that we have [indiscernible].
Okay. And this quarter...
The next question is from the line of Sarang Sanil [indiscernible] Investment Advisors.
Firstly, what was the reason for this gross margin expansion was higher services revenue contribution the whole recent? Or has the segment mix contributed to this?
[indiscernible] to material consumption reduction, right?
Right.
Yes. So the top line has [indiscernible] quarter, so which is primarily on the product side and the services are more stable. So as the natural outcome of material cost consumption is quite helped as a percentage [indiscernible], and therefore, you see the improvement [indiscernible].
So we could expect it to reward back the normal gross margins one thing starting [indiscernible], correct?
Sorry, didn't get that.
[indiscernible]
Yes. Yes, this is an exceptionally better raw material consumption, but if the mix is that, we should be back to the numbers.
Got it. Got it, sir. My second question was, what all went wrong in this quarter? What's our expectation because we were way off from the INR 2,000 crore order book and India business was not better than Q3 either as you had expected. Was there any large project that got postponed?
No. I think for Europe perspective, we are on target. So Q4 has seasonality. I mean, we talked about this, obviously, in our last few conference calls. There is obviously cycles that [indiscernible] that happened in the international business in Q4. And also, I guess there was a Q1 time cost this quarter. So generally, I think we are pretty much in line with what we had planned. I don't think there's any significant side of the [indiscernible]. I think, obviously, the year has been a kind of a flat year. And obviously, starting next year, [indiscernible]. So I think there was no deal, but we need to kind of have an exceptional quarter this year. And I think with the order intake being much lower, even our execution has slowed down a little bit because we don't need to [indiscernible] the backlog, right? So I think starting for next year, again, with the backlog that we currently have, order intake, obviously, is a bit lower. We would have liked to have definitely more. But again, like I mentioned, [indiscernible] down cycle now gain position on [indiscernible] chemicals, I think we've done pretty well. I think the market would have return, then definitely, I think that other pie definitely [indiscernible]. But generally, the outlook also remains kind of a positive thing that, yes, we do expect [indiscernible] grew both revenue and margins for next year. Obviously, it's not going to be [indiscernible] be better. I mean, the market still needs some time to correct and improve.
And we have to keep our head down and just make sure that we kind of keep the pace and keep working on the internal cost improvements that we've planned. We are being aggressive in the market. Some of these orders are now -- large orders have come in as well and [indiscernible] in a stronger position. There are a few kind of areas, which are going to be so up for the long term, like China is down. But generally, I think it's okay. I think we are in a strong position today. And I think if the market will return, we will see some of those benefits flow through.
Just to cross-check 1 figure. So you said mixing revenue contributed to $40 million to $50 million for the year, is it?
Yes, mixing today some of the 3 entities, 3 brands is about $45 million currently.
We have our next question from the line of Monish [indiscernible] Shea Capital.
I think we lost her, Manav. So maybe we can now close the call, I guess, if you [indiscernible].
Yes. As there are no further questions, I would now like to hand the conference over to the management of GMM Pfaudler for closing comments. Over to you.
Thank you, Manav. Thank you, everybody -- thank you, everyone, for joining us today. It was a pleasure interacting with you, and we look forward to making such interaction during the course of the quarter. Take care and see you soon.
Thank you. On behalf of GMM Pfaudler Limited this concludes this conference. Thank you for joining us, and you may now disconnect your lines.