Tega Industries Ltd

NSE:TEGA

Earnings Call Analysis

Strong Q1 Growth Driven by Consumables and Strategic Initiatives

Tega Industries reported Q1 FY '25 revenues of INR 352 crores, marking a 72% increase year-over-year, driven largely by a 26% rise in its consumable business. EBITDA reached INR 76 crores, yielding a margin of 21%. The equipment segment, however, saw a drop in revenue to INR 36 crores due to delays in orders. The company has a robust order book of INR 560 crores and anticipates 15% average revenue growth for FY '25, maintaining a blended EBITDA margin of 20-21%. Continued integration with McNally is progressing well with an eye on future opportunities.

Strong Revenue Growth and Profitability

In the first quarter of FY '25, Tega Industries reported total group revenues of INR 352 crores, reflecting a significant increase of approximately 72% from INR 268 crores in the same period last year. This growth is attributed mainly to the spillover from the previous quarter and increased service income. The EBITDA for this quarter was INR 76 crores, resulting in an EBITDA margin of 21%, up from 15% a year prior. The consumables segment was a key driver, showing a robust growth of INR 84 crores year-on-year, while the equipment segment saw a dip, with revenue decreased from INR 44 crores to INR 36 crores due to delays in payment receipts.

Resilient Order Book and Future Outlook

The company maintains a strong order book of INR 560 crores as of June 2024, an increase from INR 520 crores in June 2023, excluding long-term contracts. The management expects a sustainable revenue growth target of about 15% on average for FY '25, paired with an EBITDA margin between 20% to 21%. Looking forward, the integration of Tega McNally is progressing well, with expectations set on securing additional large contracts like the INR 120 crore order from NMDC for a key iron ore project.

Challenges and Strategic Initiatives

Despite achieving impressive growth, Tega Industries faces logistical challenges, particularly related to shipping delays at major ports and increased container turnaround times. The company has addressed these difficulties proactively by enhancing inventory management and customer communication. Furthermore, Tega aims to grow its equipment business by strengthening its market position and investing in product revitalization initiatives, notwithstanding some volatility in revenue recognition timelines.

Investment in New Capacity and Expansion Plans

Tega is setting the stage for future growth with substantial investments, such as a $30 million capex plan primarily focused on its Chile project, which aims to boost production capacity. The company has initiated construction activities, with commercial production expected to start by June 2025. Alongside, an additional investment of INR 15 to 20 crores is planned for enhancing the equipment business segment.

Sustainability and Innovation Focus

Tega's commitment to sustainability and environmental governance is evident as it seeks to optimize energy consumption through innovative products and by harnessing solar energy. This aligns with the company's broader strategy to not only improve operational efficiencies but also bolster its reputation as a responsible leader in the industry.

Earnings Call Transcript 2025-Q1

[Operator]

Ladies and gentlemen, good day and welcome to the Tega Industries Limited Q1 FY '25 Earnings Conference Call hosted by Orient Capital [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Hitesh Agarwal. Thank you, and over to you, sir.

[Hitesh Agarwal]

Thank you Shlok. Good evening, everybody, and welcome to the Q1 FY '25 Earnings Conference Call of Tega Industries Limited. Today on this call, we have with us Mr. Mehul Mohanka, Managing Director and Group CEO; Mr. Pratik Roy, Product Management, Global Sales and Marketing; and Mr. Sharad Kumar Khaitan, who is the CFO.

Before we proceed with this call, I would like to give a small disclaimer that this conference call may contain a certain forward-looking statements, which are based on belief, opinion and expectation of the company as of date. A detailed statement has also been given on the company investor presentation, which has been uploaded on the stock exchange. I hope everybody has had a chance to go through the results.

Now, I would like to hand over the call to Mr. Mehul Mohanka for his opening remarks. Over to you, sir.

[Mehul Mohanka, executive]

Thank you. Good evening, and a warm welcome to all the participants on the call. I am joined this evening by Mr. Imam, who is the Director on the Board; Mr. Pratik Basu Roy, President, Product Group and Sales; and Mr. Sharad Kumar Khaitan, our CFO.

The total group revenues for Q1 of FY '25 stood at INR 352 crores with an EBITDA of INR 76 crores. That is an EBITDA margin of 21%. Revenues have been higher by about INR 75 crores than the same period last year, mainly due to spillover or the carryforward from the last quarter, that is Q4 of FY '24 to the current quarter and higher service income. The total revenues of the Consumables business segment grew by INR 84 crores over the same period last year, whereas the Equipment business segment moderated to INR 37 crores from INR 45 crores during the same period last year.

The increase of group revenues by 27% should be adjusted for the onetime impact, and it will sequentially bring it in line with our earlier estimates of 15% average growth rate.

It may be noted that we acquired Tega McNally Minerals Limited in February of 2023, and hence, the comparative figures for the same period last year are fully comparable as both the consumable and the equipment business segments have been fully operative for the entire 12 months period ending 31st March 2024.

It is very important for me to thank and express my heartfelt gratitude to the entire team on our performance in such a dynamic operating environment. I believe that high employee engagement leads to improved customer satisfaction that in turn leads to better business results. Our employees across the globe feel engaged and committed, which helps us in customer satisfaction and creating value for all our stakeholders.

The integration of Tega McNally with Tega has been progressing as per our expectations and has started yielding results. As informed earlier, Tega McNally has formed a consortium for designing and commissioning of a new 7 million ton per annum iron ore screening and beneficiation plant at Donimalai for NMDC Limited. The total contract value, including taxes, is INR 872 crores with Tega McNally's share being INR 120 crores, and this should be executed over a period of 26 months.

From a logistics point of view, the shipping routes continue to be a challenge with shipping lines evading the conflict stricken Red Sea. Congestion at major ports along these alternative routes has escalated, delaying the container turnaround time. The time to deliver products to customers has also gone up substantially.

The COVID crisis has left us with experiences on how to manage such logistic challenges proactively, and we have already executed such measures in anticipation of such disruptions. The impact of heightened shipping costs will be passed on to the customers in most of the cases. Our supply chain is more vigilant with better planning for both raw material as well as customer deliveries. We have built up the inventory and are in constant communication with all our customers and business partners to navigate this crisis.

We also have a strong order book at a group level of INR 560 crores as at June 2024 end, vis-a-vis an order book of INR 520 crores as of June '23, without considering the long-term orders like NMDC in Tega McNally. We have received all regulatory approvals, including construction for the Chile project and have started the construction activity.

We intend to start the commercial production for the new facility by June of 2025. The Chile project will assist us in consolidating the existing facilities and adding new capacity, which shall help us gain efficiency and strengthen our presence in Latin America. Apart from the existing project, we have also procured additional land measuring 51,000 square meters alongside the project site for INR 21 crores, which will be used for future expansion.

Sustainability is not only important for us, but also for the customers we serve and Tega recognizes the significance of environment, social and governance. We are committed to being a sustainable business as we believe it is not only a commercial and model imperative, but also a tremendous opportunity. As we work towards our net zero goals, our technologies and products are helping our customers on their own sustainability journey by enabling significant reductions in power consumption and a reduction of the carbon footprint.

I would like to express our sincere gratitude to all our investors for their unwavering faith in our company. Thank you for your continued support. And now, I would like to hand over to Sharad to take you through the financial performance of the company for the period under review.

[Sharad Khaitan, executive]

Thank you, Mehul. A very warm welcome to everyone, and thank you for joining the earnings call for Q1 of FY '25. In our business, generally, H2 is always better than H1 in terms of our performance, both in revenue and profitability margins. And hence, comparison with the immediately preceding quarter, that is Q4 of FY '24 is not being commented upon.

The total group revenues for Q1 of FY '25 stood at INR 352 crores with an EBITDA of INR 76 crores. That is at an EBITDA margin of 21%. Revenues have been higher by about INR 75 crores in the same period last year, mainly due to the spillover or the carryforward from the last quarter and higher service income as informed earlier.

The revenue from operations has grown by approximately 72%. That is from INR 268 crores in the same period last year to INR 340 crores with the consumable business segment growing by approximately 26%, that is from INR 224 crores in same period last year to about INR 305 crores in the period under review.

The Equipment business segment had a revenue of -- revenue from operations of INR 36 crores versus INR 44 crores in same period last year. The equipment business performance was lower in the current quarter due to delay in receipt of payments, inspection reports and certain dispatch clearance certificates from a few customers, which is expected to be regularized in Q2 of the current financial year.

The order book for both the business segments remains strong. The overall operating EBITDA at a group level for Q1 of FY '25 has grown from INR 39 crores in same period last year to INR 64 crores in the reporting quarter. We achieved an operating EBITDA of 19% at a group level versus 15% last year. The Consumables business segment achieved an EBITDA margin of 21% in Q1 of FY '25 versus 16% in the same period last year.

The EBITDA margins for the equipment business would show recovery once we are able to record the revenue as mentioned earlier. With respect to integration of Tega McNally Minerals Limited with Tega Industries Limited, please note that the integration milestones and the synergy targets are progressing as per the integration plans, and we are satisfied with the progress made till date.

We are on the path to capture the full potential of the equipment business, not only to gain economies of scale, but also to reposition the products in the market and accelerate our overall strategy.

One small step in this regard is getting the order from NMDC Limited, the largest iron ore mining company of India, for designing and commissioning of the 7 metric tons per annum iron ore screening and beneficiation plant at Donimalai as part of a consortium being mentioned by Mehul earlier.

Tega McNally share, including taxes in the said contract is approximately INR 120 crores, and the scope includes design and supply of specific equipment from the proposed plant like feeders, creams, hydrocyclones, spiral classifier, tilling, thickness, et cetera.

Thank you very much for your time, and the forum is now open to any questions you may have. Over to you, Hitesh.

[Operator]

[Operator Instructions] The first question is from the line of Aman Soni from Nvest Analytics Advisory.

[Aman Soni, analyst]

Congratulations for good set of numbers. My first question is on future outlook side. Could you share your perspective on future outlook of the copper industry and how company plan to navigate the anticipated market trends and challenges in the upcoming period?

[Sharad Khaitan, executive]

The revenue estimates, what we give is about an average of 15% over the last 5 years and blended EBITDA margin of 21-odd percent.

[Syed Imam, executive]

So as we have said earlier also, copper and gold, our business is around -- 75% of our business comes from these 2 ore. Last year, copper overall grew by 2.2%. But in the last quarter, there was a problem with the Panama mines, which closed down and a few other projects which have also got delayed, IFRS commissioning was there.

But from this first half, we see good headwinds over there. Projects are now coming online. And going forward, both for the current financial year and the next year, we think copper can be -- outlook is pretty good.

[Aman Soni, analyst]

Okay. My next question is on margin guidance and the growth guidance for this financial year '25. Could you please provide the guidance?

[Sharad Khaitan, executive]

We have already given the guidance that the revenue growth should be around 15% on an average with a blended EBITDA margin of about 20% to 21%.

[Operator]

[Operator Instructions] The next question is from the line of Saloni Shah from SK Investments.

[Saloni Shah, analyst]

I have a few questions. The first one is regarding the competition. Sir, considering long-standing players like Metso and the others in the market, we currently offer a superior product. So can these competitors replicate it? Or is your product continuously upgraded?

[Syed Imam, executive]

So if you look at the product compared to Metso, globally, we are competing against product of Metso only. Metso is our major competitor globally. And our product, both from quality and other aspects of deliverance of value to the customer is in no way second to anyone, okay? And on some of the fronts, including DynaPrime, we are the leaders in that segment.

[Sharad Khaitan, executive]

We do invest into R&D and a lot of proposals and products are under evaluation, and we will let you know once the commercial launches are done. So we always try to remain ahead of the curve and ahead of the competition as well.

[Saloni Shah, analyst]

Okay, sure. Sir, then my second question is, sir, could you provide more details on the potential infrastructure improvement plan for the next 2, 3 years? Specifically, what kind of CapEx are we anticipating for the same?

[Sharad Khaitan, executive]

There are 2 business segments what we are talking about, ma'am. The first is we are doing -- we have a CapEx plan of about $30 million overall in the consumable business segment, of which a significant portion will be towards the Chile CapEx plant, which we just spoke and mentioned that we are starting the construction. We have started the construction, and it is expected the commercial production to be there from June '25.

Apart from that, in the equipment business space, as and when the CapEx is required, we shall have those fundings done to revive the equipment business and take it forward. So anything in the range of INR 15 crores to INR 20 crores is the immediate requirement for that particular business.

[Operator]

The next question is from the line of Manish Oswal from Nirmal Bang Securities Private Limited. The current participant seems to have disconnected. The next question is from the line of Chirag Muchhala. Please go ahead.

[Chirag Muchhala, analyst]

Firstly, on the consumables segment, in last quarter, we had mentioned about some supply chain issues in West Asia related Red Sea supply constraints, which had led to some deferment of revenue. So just wanted to have an update that all -- are all those things completely sorted? Or did those impact revenue booking in Q1 also?

[Sharad Khaitan, executive]

Chirag, like we mentioned in our opening remarks, the revenues have been higher by INR 75 crores Q1 current year versus Q1 last year. And we have clearly mentioned that one of the main reasons is the spillover or the carryforward from the last quarter. That is why you have such a high revenues in Q1, which normally we do not have.

As far as the logistics is concerned, the shipping routes continue to be a challenge because there are so many issues around the Red Sea and there is congestion of the ports and there's a lot of delay in the container times. But like we mentioned earlier, we have taken proactive steps in anticipation of such disruptions, and we are doing a preplanning advancement to ensure that we meet our estimates and our customers are also not disturbed.

As far as the backlogs, et cetera, is concerned, a significant major portion of that has been recovered. And these disruptions keep having. So as and when they come, we will let you know about that.

[Chirag Muchhala, analyst]

Sure. Sir, on the Europe order, so this would have been the second quarter for the execution of that Europe order. So just qualitatively speaking, how is our experience and the normal quarterly run rate, it can vary from month to month. But in Q1 also, if you can qualitatively speak about whether the Europe orders normal, I mean, execution has been progressing well as per our expectation. And roughly speaking, around INR 30 crores or so has been generated from that order in Q1?

[Sharad Khaitan, executive]

Chirag, as far as this European order is concerned, we are very happy to inform that it's been more than 6 months, and we are doing pretty well. The customer is very happy and satisfied with our progress we have done so far. And it's a matter of pride that we have been able to successfully maneuver these 6 months and prove that, yes, we can operate in those conditions as well. This order, particularly on an average, generates about INR 10 crores of cash flow per month, which is on a steady-state basis and keeps continuing accruing us over the period of 5 plus 1, that is 6 years.

[Chirag Muchhala, analyst]

Okay. Sir, one question, I wanted to check on how the global -- the mining industry, especially the 3 ores that we cater to gold, copper and iron ore. So considering that there are certain economic challenges globally in certain countries because of various economic situations, et cetera, are we seeing a trend where the shift from, let's say, metallic liners to DynaPrime, et cetera, continues as we have seen in 2, 3 years prior? Or is there some softness in the decision-making by customers? Because generally, when economic situations are a bit unfavorable, generally, this product upgradation, et cetera, takes a backseat with some countries and some customers. So just wanted to have your qualitative comment on the same.

[Pratik Roy, executive]

Chirag, Pratik here. So you see, you're right that there has been some disruptions in the 3 ores. However, fortunately, that there's -- while some of the countries like Australia, Canada, Peru and United States have gone down, some others like Kazakhstan, South Africa, Indonesia, they have come up. So overall, the market remains moderately with the growth, so flattish. So there is no immediate challenge out there.

Similarly, for copper, while one segment in construction is going down, the other on energy consumption is going up. So those are balancing each other out. So the larger trend is that we see a similar trends as we have seen last year. However, significant growth is projected beyond '25. So that's the situation currently.

[Sharad Khaitan, executive]

Just to summarize, Chirag, we are bullish on the prospects of the overall industry. The metals that we primarily focus upon from the consumers' perspective are copper and gold, which continue to be of significant interest globally due to their various end-use applications. And we don't think any impact on the global economic situation is going to have on the use of these 2 commodities. With EV, focus on renewables, all of that, the consumption and the focus on these 2 ores shall remain as it is and should be on a growth trajectory as itself.

[Chirag Muchhala, analyst]

Sure, sir. That's heartening to know. And last question on the equipment business. So our commentary thus far has been that we want to take a conservative approach in terms of equipment business bidding for new contracts because obviously, the initial focus is to upgrade the products and processes and integrate the same.

So in that context, it was happening to see our first maiden large order of INR 120 crores from NMDC. So, I mean, where are we in that journey? And should one expect that going forward, we should expect continuation of such large orders and we are ready with at least some of the product categories so that we will now start bidding aggressively in the domestic market?

[Syed Imam, executive]

So on the domestic market, see, the Indian market as far as mineral processing equipment is there, is very bullish now, okay? And our basic idea with this NMDC, such large project come in sequences of growth. And basically, we are going to look at both in the coal and the iron ore sector, how this growth are going to take place through brownfield and greenfield projects. We have been over the period of the last 18 months or 15 months that we have taken over McNally, been putting in a lot of upgradation of the product.

Some of the upgradation is already in progress. And overall, we are pretty bullish on this thing. As you know that apart from the NMDC, our order booking is pretty strong now and good. And going forward, I think even next year also, we think that the strong growth will continue to happen with the capital equipment business.

Having said that, capital equipment business, the equipment takes 5 months, 6 months to get ready, various components are there. So in some months, we will have larger revenue. Some months we will have below the average revenue. But overall, looking forward for the full year, we are pretty confident of reaching our growth targets.

[Operator]

The next question is from the line of Saurabh Patwa from Quest Investment Advisors. Please go ahead.

[Saurabh Patwa, analyst]

Sir, just wanted your -- on the acquired company, McNally Syed Ji, how the progress has been? So is it in line with what you would have originally expected? Or is it better? And how do you see from a 3-year view, the acquisition helping us in our growth targets?

[Syed Imam, executive]

So even in last year, we grew, okay? So in 12 months, we -- compared to the previous year, from 183, we grew up to 206. So, I mean, both we were looking at the business. There were a lot of issues over there for us to understand. Cultural integration is a part of it. It's a process. And right in the first stage when we had taken over the company, we had said this will take around 18 to 24 months for us to fully integrate, okay? And then we'll start looking at.

So whatever is happening till date, we are pretty happy with the milestones which we are reaching. As I said in the question before, we have invested quite heavily on product upgradation and people and resource. We have hired people from different industries to bolster the whole team. And happily, our product booking is pretty strong now. And overall, as I said, we are pretty bullish on that.

[Saurabh Patwa, analyst]

So while the integration, sir, just an extension of the previous question, is the -- while the integration may take 24 months, are your -- is it much higher than your expectation or -- and you're getting much more confident now versus what you would have maybe 12 months back or maybe 6 months back?

[Sharad Khaitan, executive]

Like we mentioned earlier, the integration milestones and the synergy targets, what we had expected, we are as per our integration plan. And like Imam sir just mentioned, we are pretty confident of the turnaround of the McNally story as well with the growth we made in FY '24 and the current state in FY '25.

[Operator]

The next question is from the line of Mayank Bhandari from Asian Market Securities. Please go ahead.

[Mayank Bhandari, analyst]

I have a few questions from the annual report that you had recently released. Firstly, sir, what is your proportion of revenue from mill liners? Like 75% of the total revenue?

[Sharad Khaitan, executive]

Yes, around that same level, Mayank.

[Mayank Bhandari, analyst]

So which gives me a number of almost INR 1,100 crores of the total revenue from the Mill liners.

[Sharad Khaitan, executive]

You're talking about FY '24 numbers, right?

[Mayank Bhandari, analyst]

Yes, yes, FY '24.

[Syed Imam, executive]

So, go ahead. What's your question?

[Mayank Bhandari, analyst]

So in last almost 2, 3 years, the growth has been in the -- particularly in the Mill liners. It has been at a handsome rate of almost more than 20% CAGR. So I think -- I mean, if you were to estimate your market share now at this moment globally, what would have been -- I mean, have we been significantly outperforming the competition? So is it like double-digit kind of market share now?

[Syed Imam, executive]

So market share figure as of now, I'm not saying, but let me just tell you because the market itself, if you look at copper and gold, they are growing at 2% or 3%. The liner business itself is growing around 5%. And we are growing above 15%, okay? So, all the growth that is taking place is the market share gain, okay? So we have not reached a double-digit figure as far growth was concerned, but we are on the path to that.

[Mayank Bhandari, analyst]

Okay. Okay. Just reconfirming one thing because in the annual report is written 25% from the non-mill liners, which includes Tega McNally, right?

[Sharad Khaitan, executive]

In the consol numbers if you see, consol numbers, it will be 25% of my domestic sales, which includes McNally revenues as well.

[Mayank Bhandari, analyst]

So total consol number, 75% is Mill liners and 25% is...

[Sharad Khaitan, executive]

No, no. 75% is my exports on this thing and 25% is domestic sales. In that domestic sales, McNally is -- the entire McNally 100% revenue is a part of that domestic sales.

[Mayank Bhandari, analyst]

Okay. Okay. And secondly, sir, you also written that there are some acquisition plans going on in the McNally business, which is written in the annual report. If you could help elaborate on that?

[Sharad Khaitan, executive]

We have not mentioned of any acquisition plans. We have mentioned -- if I recall correctly, we have mentioned that we will do sufficient CapEx in that business.

[Mayank Bhandari, analyst]

Okay. INR 15 crores to INR 20 crores number is.

[Sharad Khaitan, executive]

INR 15 crores to INR 20 crores is the CapEx what we intend to do on the equipment business category.

[Mayank Bhandari, analyst]

Okay, sir. Got it. And third question is, sir, as part of our solar power initiatives, we have, I think, 3 plants under the initiation where we are working on developing the solar plants. So what kind of cost saving we will realize once all of them are materially contributing?

[Sharad Khaitan, executive]

It will help us reduce our power cost. And then other than that, we believe strongly in that ESG and other initiatives. So it will help us generate green energy and that is how we intend to use the solar power.

[Mayank Bhandari, analyst]

Any number, cost saving, in terms of how much you can...

[Sharad Khaitan, executive]

Not any specific number at this juncture, Mayank.

[Mayank Bhandari, analyst]

Okay. And...

[Sharad Khaitan, executive]

But we have solar plants which are coming up, solar installations in Samali, Kalyani as well as the Dahej plant. Totally, if you see it's about 1,600 to 1,700 kilowatt hours of solar power, what we intend to harness.

[Mayank Bhandari, analyst]

Okay. Okay. And sir, the last question on the global front, we have seen that Metso is indicating that the inquiry pipeline for the copper particularly is very strong, although the results indicate that there is weakness. So what kind of traction you are seeing, particularly how has the inquiries increased recently? Or how is it?

[Sharad Khaitan, executive]

Mayank, we would not like to comment on Metso's result this thing. But as far as our revenue estimates are concerned, we are confident that we will be able to meet our revenue estimates and guidance given for both the revenue as well as the EBITDA margins.

[Mayank Bhandari, analyst]

Okay. I would compliment on the annual report. It's very exhaustive and informative.

[Operator]

The next question is from the line of Manish Ostwal from Nirmal Bang Securities.

[Manish Ostwal, analyst]

And I have -- most of the questions already answered. I have only 2 questions. First is our logistic cost compared to our normal logistic cost, what is -- how much it is higher currently?

[Sharad Khaitan, executive]

The logistics cost is basically -- we do not have too much of increase in the logistics cost because we pass on the logistics cost to our customers because a small time lag.

[Manish Ostwal, analyst]

Okay. And secondly, sir, in terms of inorganic growth strategy of the company and overall capital allocation decision thought process, can you elaborate on that front, sir? That will be my final question.

[Sharad Khaitan, executive]

No. Can you be a little specific? I couldn't understand your question.

[Manish Ostwal, analyst]

So the question is basically in terms of growth investment into the business. So one is that we are making investment like we are making investment for Chile project, right? And for Equipment business, we have earmarked INR 15 crores to INR 20 crores. Apart from that, any inorganic growth strategy company is following in F '25, '26?

[Sharad Khaitan, executive]

Yes, I got your question. Last year only, we have -- in February '23, we acquired McNally as a part of our growth expansion strategy. And we are open for any acquisition which comes, but then it has to be at the right value for us. If it's the right value fitment, we are definitely open, and we will explore that if it's a strategic fit for us.

[Manish Ostwal, analyst]

So it is a combination of geography or it's a combination of capability standpoint?

[Sharad Khaitan, executive]

We are a global player. And any geography, it can be a capability enhancement, it can be a technology enhancement, it can be a geographical expansion, but it has to be strategically right fit for us, and then we can evaluate that if anything comes.

[Operator]

The next question is from the line of Anupam Gupta from IIFL Securities.

[Anupam Gupta, analyst]

First question is on McNally. So, is there an order book number which you can share, including...

[Sharad Khaitan, executive]

Anupam, can you speak a little louder?

[Anupam Gupta, analyst]

Yes. So the question is basically for McNally. Is there a sort of an order book number which you can share, including the NMDC order, which is there?

[Sharad Khaitan, executive]

See, the NMDC order is about INR 120 crores, which is to be executed in a span of 24 to 26 months. We see the order book at an overall group level because the industry we are servicing is the same. And when we talk about an order book, we don't consider long-term contracts in our order book numbers.

[Anupam Gupta, analyst]

Okay. So basically -- okay. So McNally, what is the growth number which you said you are targeting for the equipment business?

[Sharad Khaitan, executive]

We are targeting a 15% revenue growth in the McNally business.

[Anupam Gupta, analyst]

Should it not be higher given that you are basically now turning it around and you are expanding the sort of targeted market? Can it potentially be higher is the question?

[Sharad Khaitan, executive]

Yes. The overall equipment business is anything in the range of $28 billion to $30 billion. So that is the scope for us as well as the domestic industry also like Imam sir mentioned, there's a lot of scope there. We will definitely try. But on a conservative basis, we would like to remain at a 15% guidance at this stage.

[Anupam Gupta, analyst]

Sure. And on consumables, is there a metric, let's say -- so there are a lot of questions which people keep asking for your new product development, and you have said that you focus on that. But is there -- let's say, in FY '24, what sort of revenues did you do from new products in the consumable side? Or what is your target for that, let's say, a few years down the line? Is it something which you track internally?

[Sharad Khaitan, executive]

You see basically, what we have mentioned in all our guidance estimates is a 15% revenue growth. This comes from a mix of a few things actually. Number one is high-quality solutions what we give to our customers. Second is the product or the solution value addition what you give to the consumers. And this value addition comes from not only the product quality, the service quality as well as other intangibles, what is a part of that. So till you don't modify and keep upgrading, consumers will not find any attraction and value in the product. So that is how we look for our growth trajectories.

[Anupam Gupta, analyst]

Okay. Okay. Understand. And just one last question on the consumable business. What would be the proportion of volumes, what would be from CapEx side of it and what is, let's say, OpEx side of it?

[Sharad Khaitan, executive]

I couldn't understand your question.

[Anupam Gupta, analyst]

So, let's say, for your customer, when you are supplying it as an operational expense versus when you are supplying it as -- when they are doing a CapEx.

[Syed Imam, executive]

Our CapEx-related consumables are very low. It's 5% and below. Most of our consumer business are OpEx related. It comes in the form of our own spares as well as growth in the market share through converting from different type of liners to our design and from competitor. So growth from -- see, the growth -- the market itself is growing by 4%, 5%. So all the new business from OEM levels, which you are going to do will be limited to that. And our figures are also tracking that figure separately.

[Operator]

This was the last question for today. I would now like to hand the conference over to management for closing comments.

[Sharad Khaitan, executive]

Thank you very much, everybody, for participating, and we look forward to your constant feedback. Thank you so much.

[Operator]

Thank you. On behalf of Tega Industries Limited that concludes this conference. Thank you for

Joining us and you may now disconnect your lines.