Thermax Limited
NSE:THERMAX
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Thermax Limited
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Ladies and gentlemen, good day, and welcome to the Thermax 2Q FY '19 Results Conference Call hosted by Motilal Oswal Securities. [Operator Instructions] Please note that this conference is being recorded.I now hand the conference over to Mr. Ankur Sharma from Motilal Oswal Securities. Thank you, and over to you, sir.
Yes, thanks, Ammon. Good morning, ladies and gentlemen, and welcome to the Q2 '19 Post-Results Earnings Call of Thermax Limited. With us today from the management, we have Mr. M.S. Unnikrishnan, Managing Director and CEO; and Mr. Amitabha Mukhopadhyay, Executive VP and CFO. As always, we shall begin with the opening remarks from Mr. Unnikrishnan and then open the floor for a Q&A.Over to you, sir.
Thank you, Ankur. Let me welcome all our friends for our second quarter con call. Our internal conclusion is that this has been a good quarter, not an excellent quarter.Starting on with the order intake for the quarter at the group level. We have ended up at INR 1,344 crores or 4% lower than the last year's same quarter at INR 1,397 crores, but almost at the expected levels related to what I have -- what we projected internally and what we've been able to achieve.And the order balance, an all-time high, going up from INR 5,261 crores in the last year same time to INR 6,411 crores, then an all-time high in terms of our order book position, which is at 22% better than the previous year same time. Revenue, certainly, we have been able to execute all the orders, which could have been executed with commercial security and orders for the company, going all the way up to 38% overall. And total income has gone to INR 1,463 crores from INR 1,057 crores, a 38% improvement. Very happy with that number.Similarly, on the profitability level, yes, we expected, in any case, it to be lower, but even -- slightly lower than even our internal expectation, we completed a INR 118.2 crores versus last year's number of INR 94.7 crores.And this reduction, I need to be explaining to you that the material cost has gone up at the group level by 1.4%. A part of that impact, I have to be attributing it to the orders taken in the last year, which got executed in the current quarter at a very challenging market condition where people were desperate for orders, not that we are not anymore desperate, but them also. They are more desperate lately, you see.And the commodity price increase, which has happened between the time of the order intake. And today, they will be covered a good part of that. There had been certain price increases we had to concede to some of our suppliers, despite having given them the orders for some items, actually. So part of that can be explained, otherwise, it's both on the negotiation table, we lost some margins; and later, in execution, some margin losses has happened. Similarly, we also noticed that on the middle line, in the other expenses, there is certainly an increase which has happened. Last year was INR 218 crores and had gone to INR 326 crores, so the 21.1% in the last year same quarter going to 22.8%. So there are a couple of them which are onetime expenses, and some of them are related to the Mundra assembly going on, port assembly going on for the Dangote order, which part of revenue recognized, but part expenses are related to revenues, which will be recognized in the forthcoming 2 quarters. So there will be an advantage that will be available at no cost. And we're quantifying it right now that it'll certainly help us to improve at least some margin improvement in the H2 going forward. You would also notice that there is an increase of INR 42 crores in one quarter alone in the manpower cost. That is INR 172 crores of the last year going to INR 214 crores for the current quarter. Of this, around INR 18 crores is on the standalone, that's Thermax, which can be explained as we had to be investing approximately 195 people into the manpower resources in various businesses with the increased order book level to support the orders, which would have had an impact of approximately INR 7-plus crores and, of course, increments that they have given had some impact. And the higher profitability and the split at the end of the year will mean also we need to keep provision for employee incentives should get a higher level than the year. So these are approximately an INR 18 crores embedded onto that manpower costs. And an accounting practice, which is followed in one of the subsidiaries, the Boilerworks in Denmark, the site were conducted by them, where in India, we don't contract laborers' expense out as a material cost or higher services. But over here, it is coming into employee cost, which approximately is 19 plus crores or 20. So don't get immediately carried away. Also, has Thermax manpower cost gone through the roof? No, it is nominally, really, but nothing abnormal about that. With this, I mean, this quarter, profitability could have been better, but we tried our level best optimal level. It is quite okay in our understanding.Then coming back to our YTD performance. The order book is lower by 10% for the first 6 months, around INR 3,000 versus INR 3,300 last year. Balance, of course, are well remaining constant, but the revenues have improved for the group by almost 30%. That is at INR 2,447 versus INR 1,887.There, the margins are -- versus in the first -- for the quarter, it is lowered by 1% at PBT level here, and 1.1% cumulative impact of first quarter and second quarter put together. That's about the results of the company. Just to give you a feedback about the hedge, which I've spoken the last quarter also that we had some difficulty of improving the capacity utilization on account of the fact that there were some glitches. We overcome that. We are almost at 60% capacity utilization. With the orders coming in compatible for that, we are certainly moving upwards with an expectation that we should be reaching to peak capacity at least in the Q4 of the current year is our expectation. Sri City, happy to inform you that trial production started. In fact, first couple of chillers have already come out of the production bay. But then there, automated manufacturing and robot welding area satisfactorily performing even the testing. So we'll start the commercial building from the -- I think already started in the current quarter. Building has already happened in the month of October. So you will have output coming from the Sri City factory in Q3 onwards. Then coming to TBWES, we already declared in the results that it has now become 100% subsidiary of Thermax. Certainly, B&H has got -- our boilers and heaters have got fairly large order book available, and with this facility coming in, will help us to ensure that the -- if at all, there could have been some delay in execution, we'll be forwarned. I think, I mean, it's now more going to be existing for Q3 onwards for the largest division of the company. Happy to inform you that the first batch of boilers, which are produced in the Q4 of last year and Q1 and Q2 of the current year from Indonesia, are well accepted by the market, a positive sign. And though Q2 order intake for Indonesia was not very large, the last one, we certainly have been able to book fairly good orders from that captive market, a positive improvement. We'll be on track, to my reckoning, as we'll be committed related to Indonesian manufacturing facility.China continues to be a major difficulty. Things have worsened only because we were expecting the Chinese-manufactured chillers can be sold in certain markets. With the current trade war on, where we're thinking that the American market, whatever we're getting orders will be manufactured over there, is now with a 25% duty imposition with the country of origin coming from China.We are taking a calculated decision going forward, which I cannot explain to you at this point of time. But at least by Q4, we will let you know as to what are we going -- or how we're going to treat our Chinese investment. This is something which we're seriously looking at on what do we need to do going forward. But let me assure you that the current asset value, post the impairment that we had in the past, is just over INR 15 crores over there. So I don't think the shareholders should worry about that -- you shouldn't be worried for them in the count. Danstoker, despite my promise in the last quarter, in the current quarter also has reported a minor loss, not something major like the previous quarter. Order intake had been good in the current quarter. We have decided to stop our entire manufacturing at Boilerworks factory. And since Polish factories stabilized, we are shifting the Indian manufacturing from there to Poland, which should help us with the additional order intake coming in from Danstoker Group to raise to a positive balance sheet for the end of the year also. So these are the subsidiaries. All other subsidiaries are doing well. I remember having mentioned to all of you that cooling business had a challenging last quarter there in Q4, and it improved last quarter. Current quarter also, it is not so good for them, including services and maybe we had to make transfer of provision made in our U.K. subsidiary to India at around INR 5 crores, so that India was just about breakeven, but it is at least profitable to that extent, increased profitability in the European subsidiary of the cooling business. That's overall about Thermax. Outlook going forward, I need to be admitting that whatever was the positive sentiments prevailing in the domestic market related to capacity building, in Q1 of the current year and the Q4 -- Q3, Q4 of last year, there may be questions we asked and be able to take it by the month or by the week because private investment all of a sudden seemed to be having some amount of slackness in conclusion and handing over of advances to register order.Similarly, the India fee difficulty and the creditors' difficulty in the market may have difficulties going forward, at least for a short while until the liquidity eases in the market for lifting of finished goods. So we have got to be very careful about, going forward, how we are going to be supporting their SME industry by supplying our equipment. But very happy to inform you, despite an improvement of 38% in the top line, our overall accounts receivables are well under control. On the contrary, I would say the days of sales, the DSO, has come down for the first time, at least I reckon, remember in the recent past, to double-digit number of 90 to 93 days. We always prevailed in 108 to 110 days. It has come down.So our mission is working very well in terms of cash flow management. That's about the overall performance of the company. Looking forward to your questions and suggestions to take the company forward. Thank you once again.
[Operator Instructions] First question is from the line of Venkatesh Balasubramaniam from Citi Research.
The first question is, what is the kind of CapEx that you are expecting on an annual basis over the next 2 years? And how much of that would be the maintenance CapEx, and how much of that would be growth CapEx, if possible? If you could share this.
Yes, I will not -- I will share it with you. We have already cleared the hedge Phase 2 for taking the current capacity, installed capacity of 12,000 metric cube per annum to 22,000, which is currently estimated to be costing near to INR 50-plus crores, INR 50 crores to INR 55 crores. It's already sanctioned, expensing out all the revenues starting now, based on the learning from the Phase 1, because we will be needing further capacity, and some of the decisions that we have to be taking related to the existing chemical facility in Maharashtra. What do we need to do? That's the opportunity of growing this. That's the committed expenses. There are no major CapEx related to capacity building anticipated in the -- at the small one, could be there. We need to be making an assembly unit for the water business because it started growing well. But water business will not be needing more than -- if maybe land is available, we are talking maybe INR 20 crores, INR 30 crores kind of a size of an investment, not anything bigger than an assembly unit quality. That could also be related to what we need to do with our India and Gujarat facilities. So do we need to have a heating one more facility in Sri City? Currently, for cooling, it's something under consideration. So that is to be concluded. So barring that, there is nothing expected in terms of capacity building in the next, I would say, 24 months, I can predict very clearly, could even extend up to 36. Beyond that, if Thermax will be growing, imagine double-digit growth for -- averaging out to maybe 15% for the next 3 years, we will have to create additional capacity for the core businesses of the company, which we will take accordingly, I would say, in 18 months down the line. Then the maintenance CapEx, as you asked about, for Thermax, maintenance CapEx would be ranging between INR 30 crores to INR 45 crores on an average. Amit, am I right in giving the number? Some of the -- yes, there is one thing which we would love to do. We just started digitizing our operations. Very happy to inform you that we're one of the earliest Indian engineering companies to induct a Chief Digitalization Officer to the executive council of the company, has already joined. So if there is anything needed related to future automation, which cannot be anything substantial, but that will be coming as a maintenance capital only -- CapEx only, which will be leaving us with the option of disproportionately growing some of the better profitable businesses through inorganic route is an area that we are looking forward to, which will crystallize our plan in the next 2 to 3 quarter period of time. Is that okay with you?
Yes. So to conclude, would it be reasonable to assume that on the maintenance CapEx, you will not spend more than INR 30 crores to INR 45 crores and growth CapEx might not be more than INR 40 crores, INR 50 crores? So the CapEx number should be somewhere closer to INR 100 crores, down from INR 200 crores in FY '18, approximately?
Well, still, you're right.
You're right. You're right, you're on the point. Maybe a little lower or so, we're very conservative in spending money.
So the -- as this one on a related thing. The company is fairly well run and generates very good cash flows from operations. So whatever CapEx or acquisition needs are there, it can be very well be done from the cash flow from operations. So what is the need to hold so much cash in your balance sheet, which is, I think the cash and investments are almost, like, almost INR 1,300 crores or INR 1,400 crores? Why doesn't the company take a call to return this money to shareholders because this INR 1,200 crores or INR 1,300 crores is almost half of your net worth? And if you return it, at least visually, your ROE should go up meaningfully. So why are we holding cash? Because I've been noticing there's a substantial buildup in current investments over the years. So why is the company holding cash?
That's a wrong word to use, Venkat. When you're prudent, you get me saying that -- so we are a volatile industry. So we don't borrow even working capital to run the organization. It is not the ROE maximization as a prime motive of Thermax as a group. I thought you're following Thermax for at least 1.5 decades where we run as a professional company. You would have seen it that way. We are not expecting Thermax not to grow. Growth will be needing growth capital. Of course, we can borrow money from the market. All of you will come after us and I'm sure will give us money. But we rather prefer for some more period of time to bring in stability for the organization. You need to be looking at the companies who went in for huge expansion and huge borrowings, both in the European Continent and American Continent in the past 1 decade. Some of the largest names in the capital goods companies today have disappeared or on the verge of getting disappeared. And I don't think that is the fate of Thermax going to be. And we will continue to be on the same path. It is shareholders' money, none of us are taking it away. But if it is going to be taken out to deprive the company's future by distributing wealth at this point of time, that's not the way we look at it. We are not a quarter-over-quarter company. We are a fairly medium- to long-term company. So your argument is welcome. But decision is that we are not -- we have very clear-cut plan laid to double the turnover of this company using growth capital. And there afterwards, we'll also take it to a global-level size, and it needs a lot more money than what we currently have and what we are going to be generating. So one option, as you mentioned, was to drain it off, borrow it and do that, right. Yes, on optics, it looks very nice, but we are not an optic-oriented organization.
The next question is from the line of Bhavin Vithlani from SBI Mutual Fund.
So my question is on the orders. Could you help us on the exports front and domestic front? You had -- your commentary was a bit soft last quarter. So how are you looking at the waste heat recovery? Steel and cement was an opportunity that you spoke about. How are you progressing on that?
Yes. I think more than the numbers, you were asking underlying in the numbers. The number I'll give you and then explanations I'll give you. Normally, I would have asked Amitabha instead to give it. See, our domestic order booking has gone up from INR 697 crores to INR 751 crores, an 8% improvement in that current year this quarter. Whereas for international, it has come down from INR 700 crores of last year same quarter to INR 593 crores. Why I want to give you an explanation is that last year, I'm talking about FY '18, quarter-over-quarter, if you look at it, our international order booking was almost nearing the domestic order booking, not because international upgraded alone, it is also domestic had not happened to that extent. So we had a specific quarter where I declared that we almost recommended international company because our international booking was more than 50%. But it has taken a major dip 4 quarters back, where international component of the order intake had come down to 20%. Now I'm very happy to say, even at the INR 1,344 crores order book level, it has gone to almost 40%. So if I'm able to retain that kind of -- that is our level that we want to maintain for a few years, that 60% to come from domestic market and 40%, and of course, preferably, 40% upwards is always welcome. So there, there's an improvement in international order intake for the quarter. Then you asked specific questions about waste heat recovery base. Yes, there had been a delay in conclusion of an order, but that we have been able to conclude in the cement waste heat recovery area. We have been certainly able to conclude that one, not a part of the numbers which are declared. We've also had order losses in the waste heat recovery, cement waste heat recovery to a Chinese organization who has set up their organization in India because there is a reemergence that you're seeing in some of the areas of Chinese companies who relocated in India earlier. But thankfully, the rupee devaluation by, whatever, that 10% to 13%, which is prevailing there, may not make them as competitive as the way they expected it to be. So it is -- traction is already there for the waste heat recovery in the market, and it will continue also.
Could you also help us break in the order in terms of how is the BB boiler, the smaller boiler business, the chillers and the boilers and heaters division, and how should we look at the growth within that? So what I -- my observation is the larger projects are absent, but your base business is growing fairly strong this quarter. Correct me if my reading is wrong.
For the quarter, it has not grown. It has stabilized and remained at the same level, which normally we talk about anywhere from INR 400 crores to INR 600 crores, equally, that is remaining there, both domestic and international, because those kind of numbers are at a stable level. The same, we also had decent enough intake of orders coming for projects. For example, we had, from far-away Colombia, one order for the single largest capacity of bagasse fired boiler of the world on a grate. It's a 250-ton capacity boiler worth around, say, $12-plus million. We picked it up from there. We've had orders coming from Southeast Asian market for medium-sized captive power plant using biomass as a fuel. So project orders were also there in the current quarter. We had a couple of orders coming from various EPC companies who are billing in oil and gas sector. The equipment heaters and the waste heat recovery system coming for that. So both projects and products have done well. If the projects don't do well, my order intake will be in 3 digits. The moment you see a 4-digit then that means that you're talking about almost 13.5 -- or INR 1,350 crores. That means projects also are done currently. Now the question is, inquiry pipeline for both are good, I would say, not strong, good. But conclusion of orders, since we are almost into the middle of the Q3, overall market sentiment, there is a slowdown in thinking of conclusion of orders at this point of time from the -- even from the standard domestic market. International market, it's not so bad right now. It was bad maybe 3 quarters back, but today, it is looking stable.
Last question is on chemicals. When do we see the stabilization? And once, you mentioned fourth quarter is when you will see full utilization. How should we look at the margins once you see full utilization from fourth quarter?
Chemical has got 2 verticals. One is the resin vertical, which is dependent upon the hedge facility which is commissioned and going ahead, which is almost equal into 50% into the business at this point of time. Second one is the performance chemicals, which is coming out of our Jhagadia factory in, again, Gujarat. There, there's a capacity constraint. There's a little more of a blending, and root chemicals are procured and then there's a trade secret of blending it, and this is a service plus chemical being given. So I'll treat both of them separately. So the resin, my expectation is that once we are able to complete the current phase, full production coming in, you should be looking at upwards of 15 as a PBT percentage. Last year, of course, the same quarter, we had a chunky profitable grate order, which totally changed the cross-section. We could have shown you maybe a 27%, 28% profitability for the last year's first quarter -- sorry, the quarter 2. Currently, it has come back to -- I think, overall, chemical is around so maybe 15%. You should look forward to upwards -- so 15% plus is the chemical profitability you should look forward to, including performance chemicals and the other one. And the growth potential for that, well, I mean, we are not seeing anything negative in the chemical business related to the offtake from the factory. And yes, of course, speciality chemicals, which is more profitable than the numbers which I indicated to you, well, there, to get an order, it's not one order. It is like IT companies getting an order for 5 years. You get entrants into a company, then it's a replacement chemical every year, you keep getting the orders. Such orders is what we are focusing a lot more than one-off sale of normal chemical, where like a commodity, you make fully 8% to 10%. So these are the ones which can give you a profitability upwards of 20%. So average of speciality and normal percent, put together, you can go upwards of 15%. Does that answer your question?
Yes, that answered it.
The next question is from the line of Kirthi Jain from Sundaram Mutual Fund.
Sir, in our press release and also in our opening statement, we had highlighted that order flow seems to be on a slower pace. So with regard to that, what would be our revised guidance in terms of the order flow, which we are envisaging for the current year? And also, given the steel price, everything high, which had impacted our gross margin, have you taken the expected impact of the steel price increase in our current quarter numbers, sir? That's the second question I have.
The first one is very clear that I wouldn't have cautioned all of you if there is no visibility of a slackness. I need to be also elaborating further. See, we have gone on a domestic order dependence to build INR 6,411 crores carryforward orders right now. Amitabha, if I'm now to take a carryforward split between domestic and international, what would be the number like?
It is -- carryforward domestic is INR 2,916 crores and internationally, INR 2,495 crores.
So you can make all the domestic dependence on the order carryforward. Now with the semi-final elections going on and the final expected maybe a few quarters there afterwards, infra-oriented projects will be declared. But on the ground, funding won't happen for them. Inauguration will happen -- I mean, whatever is the foundation, certainly, I'm sure will happen. But will that create additional demand for multiple commodities and overall sentiments in terms of signing the check to go ahead with the project, will it happen? Because I have seen multiple election -- 3 election years in the country. And a set of people who are from the pure consumer, FMCG-oriented, no government-related or maybe no policy-related ones, may continue to be doing their capacity utilization to reach the peak level. But others will normally wait for it. So that is what's the reason for caution. In the international market, one of the markets I'm a little doubtful about, that's the Middle Eastern market. Though the oil price have really gone up and, of course, it's come down also in the last maybe a week, but it is still remaining upwards of $70, is that investment-grade for the entire Middle East because their oil production/extraction cost is much lower, almost the lowest in the world. But the political instability with the recent happening, which I don't want to comment on beyond the level, the largest investor have got to be Saudi Arabia. And on the back of Saudi Arabia, it should be Kuwait and Oman doing it. Kuwait and Oman may continue, but Saudi Arabian investments are in suspension. So one of the international markets normally supports me for equipments and the boiler heater equal into that one. I need to wait and watch how it's going to be panning out. But I'm quite comfortable with Southeast Asian market. I'm equally comfortable with the African market at this point of time because there's nothing more -- because last year, there's a little negativity in the African market. I think there is some positive investment moment that we are seeing in some African countries at least. So that's about my overall take on the order booking. Next thing you asked me was about the margin, whether we have accounted for. Be assured of the fact that all visible and predictable cost increases for completion of orders on hand are already accounted for. We do account that way. Very few will remain because when you execute the orders, which I just picked up in the INR 2,340 crores orders, which I picked up in the last quarter, there, whatever cost, non-costs are already there in the estimation itself. As we execute the -- if there is any further increase beyond what is there in the contingencies available in any project costing sheet, it may have a hit going forward. But unlike the last year, already getting executed in the current year, where there had been a major increase in the commodity prices, I don't think any one of us are expecting the commodities to be rising at the same levels or acceleration that happened the last year. I am possibly looking forward to a stability or at the best, in some sectors, towards next year, sometime there could be a reduction also possible. The capacities are getting built up at various places. It's my take right now.
Sir, next one thing. Sir, we are telling that the hedge has ramped up to 60 percentage. But when we see the turnover, the commercial turnover has not gone up. So is it like due to the rundown of the Maharashtra facility, we are seeing this -- the hedge ramping up?
Yes. Whenever asset rises, somewhere I commented that I will also ramp the other one down. But it will run for some time, based on the orders available for the gap to be filled in. For example, currently, I'm expecting I'll be needing between 16,000 to 17,000 metric cube capacity. So even if I reach up to, say, a peak capacity of 1,000 also, I'll still be short of 5,000 -- 4,000 to 5,000. And when I commission my Phase 2 and stabilize it, next year, I'll have to do -- then I don't have to be worried about the Maharashtra capacity at all.
We have the next question from the line of Venugopal Garre from Bernstein.
Unny, my first question is on the margin side, just wanted to also understand 2 things here. One is that since we have an export business, which is fairly large as with an international business, would there also have been some element of benefit coming in from rupee depreciation on the margin? That's one part to it. The second thing is now that we are sort of doing a line-by-line addition of TBWES given that, that is a slightly higher EBITDA margin entity, but it might be really -- is it really small from an absolute EBITDA perspective in this quarter? That's the second thing I want to understand in the margin side.
Venu, on the rupee devaluation, happened, unfortunately, in such kind of times Thermax won't be a beneficiary because the way we conduct it is that Amitabha and team will have to take all the net position coverage -- forward coverage on a weekly basis. Though we have had some small amount of very large order left open because we're waiting for the conformity of the final payment because, otherwise, I would have booked it -- when will the lifting happens. But happy to say that we've got a stand basis for the last payment currently available. So when we covered it, there were some improvement that you would have got for, but that's only a percentage of otherwise a practice. Thermax always, on a weekly basis, does the forward closure. On the contrary, the mark-to-market, all these people, normally, all of you put together will make me do a negative over there, which of course I'll recover on the top line. But it's an MTM loss for me, rather than a gain for the company. Because these -- see, I want to be honest with you. Many companies have mastered the art of having part covered -- partner covered. We believe that we have better engineers than maybe for the currency management people because whenever we try, we can't commit -- speculate a loss on that. So we prefer a confirmed margin than a speculative additional profit, on principle.
Got it. Got it. Also the TBWES thing, that is the other part, what will be the sort of contribution, because in the first quarter where you're doing line-by-line, right, addition?
It's at INR 20 crores top line only. That's the last part of the last sort of remaining. And I don't think from next quarter, anything will remain there. That facility utilization certainly will -- I mentioned about the boiler and heater business was the main beneficiary of this one, whose director of capacity was going for outsourcing haven't got a facility available, which is already on.
Got it. Sir, my second question is in this water assembly related expenditure, that you spoke about CapEx and you're seeing some improved traction in water. I just wanted to understand what exactly is this primarily going to cater to, given that you only operate in certain parts of the water business. So that's the second question.
Yes. See, in the water, Thermax is only into 2 segments. Number one is commercial and the small SME segment, where we make split mounted water treatment plants and wastewater treatment plants, which is a very profitable business. Even then, the water was in difficulty for 3 years in red, this one was generating profits. That was a INR 50 crores, INR 80 crores, INR 100 crores, INR 130 crores. Now raring to cross INR 200 crore size as a profitable business. And the second one is the industrial projects, the regular Thermax water and wastewater business and recycle business. And in that, we could see who could decide whether technology-oriented, industrial B2B business. And about the first one, will the package standard plan, which normally gets sold, these very standard ones are less than 30 lakhs in size, which my distributors, channel partners buy and sell. And about 30 lakhs is something where the orders are directly taken through the channel partner, but it is assembled in an assembly unit prevailing in Pune. Now the logistics cost of the entire thing is currently consuming near to a double-digit percentage, getting the India thing to Pune, assembling and sending it back to maybe a Chennai or to Calcutta or to maybe a Northern market. So progressively, we will want to have localized assembly facilities created and the localized value chain created for because there's nothing complicated in the water, barring some of the core components which, in any case, are imported or maybe we will have to get it fabricated or manufactured, based on our own engineering. We don't do any manufacturing, it's only assembly line. So these are assembly plans which we need to be making. And we already decided that since traction is visible, and that's one growing business where one doesn't have to worry about the -- how many more wastewater treatment, water treatment plants of these kind of things are going to be needed, we need many. We'll want to start with the CapEx for it. But that's not a major CapEx in assembly unit. You need a building, share some very minimal occupants for assembly, and preferably workmen who may not be on the payrolls will be something like a model, some automobile companies have perfected, where you outsource and assembly contractors will come and do tasks, will manage the quality and the finance over there is what we have in our mind.
The next question is from the line of Ravi Swaminathan from Spark Capital.
Sir, just wanted to know what was the market size in the domestic market and the energy segment first half of this year vis-à-vis last year the first half? And kind of growth that one could have seen in the inquiry pipeline at least, has there been any growth at all?
I have to divide this into 2, really. One is the standard size heating energy products, both heating and cooling. I need to say that there had been an improvement in the market size by around 7% to 8%. These are all estimates based on the market input numbers. We currently have a sales force totally implemented. So there is an accuracy available in terms of the data fit into that. Any data not having coming to that, I would say, I'll give a 10% to 15% correction factor for it. So that is the current growth that has happened. My market share is retained. And in some verticals, it has gone up also.
Okay. And the regular CPP market.
Captive power plant market. No, the regular captive power market is quite silent right now, quite silent. It's only the recent recovery oriented for the cement plant which are continuing. In fact, I have inquiries, but no orders getting concluded for the captive power, which we thought should be now gone in by many industries but all of them are a little silent right now.
Okay. Say, in terms of megawatt terms, would it be roughly around say, 600-, 700-megawatt per annum? Is my assessment right in terms of size?
See, if I were to look at the current year in megawattage, maybe first quarter, we already had 1 order of a BTG, which should have been maybe 160-megawatt itself. Our BTG order was there. Because if you multiply with that 4, I know you may get the number that you have, but if I look at it for the captive power, right now, the orders which should have got concluded, whether I go it or my competitors got it, it's only in the cement waste sheet, which -- please remember, it was maybe INR 7 crores to INR 8 crores per megawatt. I would say almost touching an 80-megawatt would have got concluded in the first half of the current year. And in this [ sponge end ] sector, in the eastern sector of India, there were 14, 15 conclusions which has happened, some of which where there is captive power plant, some of which when there is a boiler separately, turbine separately. That would have been amounting to also an equal number. Then they would have 1 or 2 one-off order conclusions in the country. Put together, we would have concluded maybe 250-, 300-megawatt in the country currently in the first half. Second half, the number would be almost the same if there is a large order to be concluded. That's my real take for the current year.
Got it. And from a competition perspective, I mean, say, other listed companies who basically -- the known ones -- I mean, have they been more aggressive in terms of pricing compared to last year or past few years? Or is it like the pricing environment have been highly stable, say, compared to -- though they could be tough, but it would have been stable over the past 2, 3 years. Your perspective on that would be great, sir.
See, the listed company, I think, would now be a little more careful about quoting, that's my understanding. Because in the last 2 conclusions that we've had -- because there all of -- there are same people competing for the orders. If there is 1 order or 3 plus 1 Chinese player will be there, whether we sit or maybe -- I would say, 10-megawatt and then all of them will be there. In that, there is a decency prevailing in pricing by the -- at least the Indian players now. I would say that in decency, which prevail for almost 1 year, 1.5 years, is getting corrected right now, getting corrected. But since there are in too many finalization, I cannot say what is the pattern going to be. How are the Chinese entering to our area was well entrants into India with their own operations, with at least the EPC portion, but the manufacturing coming from China? We have started quoting some not-so-conducive prices. But of course, the market, not everybody will go up along with them. But -- and fortunately for them, they have a group company also making cement plants. So if that were to be combined together with the cement plant, along with the wastage recovery, then all 3 Indians will be out of that game. But thankfully, we haven't come to such a level so far. But as the market again picks back, what happened is, Ravi, all of us were expecting that cement investments are going to now really rise because everybody is ready with the plant. I think 1 by 1, some people are -- 1 or 2 of them are coming in also with the fresh orders. But it's just going to take some time before we see the traction in the cement fresh capacity investment. They will have to invest. I'm aware of the fact that there will be investment happening. But signatures are not forthcoming at least in the last 1 quarter, and we'll have to wait and watch on that area.
At least over a 24- to 36-month period, can it pan out, basically...
No choice for India. We'll have to do that. See RERA has now settled fairly well. Barring the inventory available or unsold inventory available in the 4 metro cities, Hyderabad and Bangalore, if you keep that aside, you're seeing affordable housing really catching up, even the biggies of the construction world has started moving into 1-bedroom and 2-bedroom user demand area, which is going to be increasing the cement demand. And whatever are the projects already concluded by the real performing Minister of India right now is going to be -- is already in traction and will continue to be. Rural roads, which is announced, I never thought so many of them are going to be really on the ground level. It has already happened. Last -- in the budget, Finance Minister commented that we thought will it really take shape. It is happening. In fact, the road construction in India is not -- and not about the national highway. Non-national highway sectors almost increased by 100% in the last 2 quarters. So -- and most of them are cemented roads, even in rural areas now, the way it is happening. So cement demand is going to be picking up. Irrespective of the outcome of the elections, I would say coming, there is a cement demand improvement in the country. You talk to anybody who's running an organization. I'm not talking about will speak publicly that there -- the languages for press and languages internally are different. All of them are looking for investing money now. So the cushion of 24- to 36-month is positive.
Okay. And my last question is with respect to the chemical segment. So basically, rupee depreciation, would it have -- can it help you in 2 ways? So one is that, say, a few quarters ago, you had mentioned that there used be a lot of imports which used to be there in this chemical space, which is we're at the pricing we used to be aggressive. So is it getting plugged? And a -- but a lot of your specialty chemicals goes in terms of exports to U.S. and other countries. Are you seeing better demand because of better price competitiveness for you here? And can you see better margins in this going forward?
Whenever there is a rupee devaluation, my ability to be passing on that on a one-on-one basis 100% to the market is limited. But the contracts have to get over for the current year. Next year when they get it, I'm able to pass on good part. It also depends upon how the competition behaves. So that is why there is a lag factor in that one. The lead factor related to the recovery on the fresh orders are all my quotes in the developed world, where dollar denomination deals are on, I certainly get a benefit. I would want to utilize it not for margin improvement since I've got capacity available. I would rather want some order obtaining in decent margins. One is to rush -- in this market, since already it's decent margin for a company overall making PBT in the range of maybe currently at languishing at 8, but has the ability to go to 9s and 10s. I would rather have a business which has got a 15% assured profit. Take a higher slice of the turnover of the company at that 15% to improve my margin, then go for sticking on to my margins to marginally improve this rate. So that's a kind of instruction to the business. They're going with that only, right now.
Okay. So -- and that imports, which used to be there -- which used to be aggressively priced. Is it getting blocked, so basically -- and is it in the resin space?
Yes, it is in the resin. Styrene is the main item to be imported. And that's a cartel which is so large. We're all pygmies in terms of our requirements, in terms of volumes. So there, we'll have to suffer the cost, whatever is pushed down by them. There is a petroleum crude going up and rupee devaluing. It's a double hit. So that is right. But still we're able to -- I need to say that we're able to. The adversities that you would have faced in the last 2 quarters, which I mentioned to you, are the input going on account of the crude petroleum going up, all the way to 80s and which means the trading price increase and the rupee devaluation. So for the same quantum of Styrene to be imported, the cost increase is very high, which the market wouldn't absorb in overnight. But thank God, it started coming down now. And I hope it stabilizes, at least for India's sake, closer to maybe 60s would be at least for the country's sake and my divisional base also. But this will be utilized by us going forward. And I'm sure we would stabilize it in terms of the profitability.
The next question is from the line of Abhishek Puri from Deutsche Bank.
Sir, on the environment business, specifically for the last couple of quarters, you're seeing good traction on revenues. What is driving that, and is it sustainable? That is one. And secondly on the margins front again -- sorry to harp on that once again, have you built in the Sri City costs that will be coming in and TBW costs that will be coming in fully into your P&L when you're saying that margins will improve next year -- in the second half, sorry?
Yes. Starting with the environment business, the water order intake is substantially improved in the last 2 quarters for the standard plants. And we're selective in taking the orders for the projects because the project orders are the one which put them into trouble apart from the municipalities which closed down. So their margin stability will improve going forward also. But it may not reach the energy margins at least for some time to happen. I don't think the water can go to that level. The air pollution control business of the company, they had been some good orders available in the market with a couple of people who are quoting very low prices firstly disappearing, including the GE's arm in India, which is the second largest player after Thermax in the market. So there maybe -- they're recognizing that top line without bottom line doesn't mean anything. Otherwise, there would have some challenge. Currently, it is us versus many small players. So the organized sector larger companies who are really wanting to have that air pollution control done, rather than having a certification available from the authorities, and a plan which may be okay, but not of the high-quality like that we would provide, automated ones. There -- but as it increases, we should be able to improve our margin. But one area where I need to also admit that we could have had top line going forward coming from the air pollution control from the sulfur oxide -- SOx plants on the NTPC orientation, which we kept outside. If the market were to stabilize in that we'll enter, because if we would have taken any orders, it would have made us lose money in the future. But currently, I think in the next year, 1.5 years, there will be plants getting commissioned. And I'm sure the government is going to be understanding that underrated plants will have difficulty. So there, we will have a re-entry possibility. So that's about the current and the future for the air pollution and the water. So margins will improve. Top line improvement of a huge jump the way energy could manage will depend upon we getting chunkier orders for the NTPC and which we are currently not. Then coming to you, asking about Sri City factoring is already done for the cooling. We will -- but there again, like the way we're running chemical both. We'll be running Pune, our cooling facility, along with Sri City for fairly longer period. Though early, our intention was China and Sri City will run together. Now we would possibly make it Pune and Sri City, and eventually Sri City. So Sri City also -- as it reaches capacity, full utilization, will Pune come down, and then we'll take a call on what do we do with the Pune facility for cooling. But the costing for that, of the Sri City, in our calculation it is there, but it is going to be hitting the balance sheet as a depreciation of the company from this quarter onwards because Amitabha will do the capitalization, am I correct, Amitabha, for Q3 onwards is the latest. Is that okay, Abhishek?
Yes, you're right, Amitabha can also give the order inflow and book breakup, along with the international orders, please.
Yes, I'll give it to him.
Order inflow: Energy segment, INR 1,024 crores; Environment segment, INR 204 crores; Chemicals, INR 115 crores; total, INR 1,343 crores. And order balance, that is order book position: Energy segment, INR 5,726 crores; Environment segment, INR 620 crores; Chemicals, INR 64 crores. Total, INR 6,410 crores.
And how much is export on international?
Total international order out of INR 6,410 crores is INR 2,494 crores.
And in inflow, sir?
Inflow, INR 593 crores out of INR 1,343 crores was international.
The next question is from the line of Sandeep Tulsiyan from JM Financial.
Sir, first question is on the margin outlook. You mentioned some inputs on the projects taken at low margins in the 1 year, 1.5 years, but at the same time, you have also prebooked certain costs pertaining to Dangote and assembly at Mundra. So how should one look at margins going forward? Will they continue to remain under pressure? Will there be marginal improvement? Directionally, if you could just guide us on that.
Barring any surprises invisible to us going forward, maintaining this margin will be practical. There could be a possibility of a particular quarter based on some mix or anything going up or down. And that's on an annual basis. Improving back to the double-digit that we're used to, we're working on that on various belt-tightening and various other areas where trimming can be done, areas where we feel that -- I mean, not at global levels because the areas -- normally will control us in India. But we're not done as much belt-tightening and maybe since that we applied to the international operation, but there are areas where we can contain. With that very big improvement. Can that be, say, currently at whatever we are remaining at, maybe an 8% PBT for even the half, to go back to what our dream numbers are. You're talking about maybe 200 basis point improvement to be happening in the 6-month period across a full balance sheet, where the growth is going to be also fairly large. It'll be a tough challenge, but we never give up. So let's fight out. Let's say, where are we on to. But I don't expect because we -- I'm sure all of you will also have that worry in your mind related to an order book now at a fairly large size. Visibility gone to maybe a 1-year quarter plus equivalent in that fund, will there be a major worry. No, I -- that worry is not there in our minds. As of now, there is nothing which should go wrong in that front.
Secondly, sir, you mentioned that based on current capacity utilization levels and the new capacities that are coming up you forecast, at least a 15% growth over the next 3-year horizon. So how much of that would be through this new capacity, and at what pace do we expect the base business from the existing capacities to grow? New as in that -- the hedge plants, Sri City and Indonesia plants.
And plus also that you could have listed up acquired plant. All of them are there. So put together, we are geared for the percentage that you have asked me. Certainly, we are geared for it. Of course that will be needing a lot more of filler of manpower, some amount of IT expenses for it. Because we don't have to have only human orientation to come in. All that is possible for managing. Your question is, can you have a 50% of more growth in the next 3-year period of time? Yes, certainly, it can be done with this one, with very limited balancing CapEx it can be done. No problems at all. But we'll -- I get that many orders. If the demand is there, why not? Certainly, we're there to take orders. So that is where a predictability -- see, if you would have asked me the same question, maybe a quarter back, and my answer would have been which you had have listened to me is that everything is positive. At this point of time, there's nothing negative barring the short-term few quarters related to the election effect. Otherwise, globally, there is a stability of a different nature barring some political instability in 1 or 2 countries. I'm looking forward to the trade war for overall Thermax as an opportunity than a threat. There'll be a threat, of course, because the companies we're managing out of China who may be bereft of orders from maybe America and in any case in part Europe, how will they react into the markets where they are currently operating. Thankfully, when Thermax operated very strongly in Southeast Asia, Africa, everywhere whenever I got orders, other than the Indian competition, the formidable competition is always from Chinese. And we have been able to overcome. Our currency depreciation has been much more than the Chinese currency depreciation. So there is still an advantage available, over and above our technical credentials. And for example, in some other South American orders, they don't even want to touch Chinese, unless they are coming with the funding. So these are the positive indicators at this point of time. So if inquiries are there, orders are there, things could happen. But one could only ask, because I'm quite dependent, even today, whatever it is, 65% to 70% of my revenues will come from India. With that kind of a number, imagine that there is a political instability in our country, the way it is prevailing in some of the smaller nearby countries. If that would happen, which I'm sure none of you are wanting to happen, if that is the case, then larger projects won't happen. The smaller -- the Indians will consume. That will fetch me the regular orders, but not the biggest, which I'm wanting.
Okay. Okay. Got it. Sir, lastly, a little bit in your net working capital side. We've seen a sharp jump in the other current assets and other noncurrent assets basically comprising of unbilled revenue. Is it a more pertaining to the accounting -- some change in accounting standard Ind AS 155 or is there something one-off over there which you would like to explain?
Sandeep, it is the -- the largest order that is being executed is Dangote. Where normal circumstances one would have revenue recognized and also send them in a ship to Nigeria. Here, we are doing a port assembly. So the physical movement out of our custody of the item is the one where the buildup is happening in between. But be assured of the fact that it is funded by the customer and the way we have configured the entire terms of payment is in such a way that we've already received 55% of the Indian contract value into our account. And accordingly, we have built it up. So that way, nothing to worry on that account. Accounting standard corrections were already run by Amitabha and been well in advance. So that's already accounted for. So this is more of a port assembly happening. And it will only -- it will continuing to be increasing till such time the ship starts coming and taking it away from here.
The next question is from the line of Renu Baid from IIFL.
A couple of things from my side. First, on the execution side. Can help us understand what portion of the Dangote has already been booked in our books in the first half? And by the end of the year, should we be done with 70% or more?
27% is recognized of the main order from them. That's recognized. I -- see, in the second half, we can recognize all the 27% from the current so far. So far recognized.
Yes, so far.
See, it will spill over to the next year also because the physical movement will be a logistic management to be done by them. So what will happen in Q3 and Q4, as I mentioned about, we are ready for the first hydraulic test of the one in Q3 by December end. So once that is passed, only then we get the next 15% as cash transfer. There afterwards, 30% will be based on the LC, which we already have additional [ stand mails, the transactive LCs ] already available. So this is reaching a crucial stage of physical dispatch. So I can give you one more information, which is -- something which is monitored by our team in Nigeria. The site is ready now, where the kind of civil work they've been able to manage because they got -- given to Chinese is unbelievable. Indians won't be able to believe that the refinery marginally bigger than maybe even Reliance's J3. The entire civil work for the foundation, including a jetty to receive heavy consignments, got ready in less than 12-month period. That's ready -- so from there. And we have the photos and the details available of the refineries' largest vessel manufactured in Korea and the ship is already available. So that means material movement has already started. And they're already opening LCs and making payments and taking deliveries. And even another Indian company who had an order not so big like ours has also got paid 90% and their material is also under inspection and dispatch. So it's very crucial for us. We're looking at it on a weekly basis as to how it's going to be moving. So our expectation is that we will have in excess of 60% revenue recognition done in any case in the current year can even be little -- we are ready for even more. But we'll be very prudent related to the cash inflow for that one.
Sure. And sir, one bookkeeping question for Amitabha, sir. On the other income side, are there any exceptional items or just pure treasury-related gains that you've seen in the current quarter, stand-alone and consolidated both?
No, it is regular item. There is no exceptional item this quarter.
Right. And on the margins front, you did highlight the headwinds that we have had from previously secured low-margin orders and inflationary pressures. But should one assume that at least the orders which have come in the last 3 to 4 quarters, especially in the domestic market -- and when these low-margin orders are out of the backlog are executed, margins should be inching back to 10% levels towards the end of the year or next year? Or do you think there could be practical headwinds to margins from here on as well?
See, the double-digit and there afterwards improvement into -- in the double-digit. If you look at historically, it's in a declining commodity price market is where it had happened. So I don't think we are near to that. But sometimes, you're getting exclusive projects, which sometimes do happen for some type of -- there are times where we don't have far too many competition. Or maybe we get international orders where only larger companies are prequalified to be bidding, not the smaller ones. Those are the kind of orders which should help you increase the margin. That's the way it is to be understood. So see, Renu, frankly speaking, current orders, some of them even now which are ongoing. For example, say, an order which we have taken from a steel capacity expansion with the state of Maharashtra, once again the Chinese is the competition because that company has bought 73% of all this steel plant from China. And technically, we were able to overcome Chinese. But commercially, they will not allow us to overcome beyond a level. In that order, to make a profit equal into a double digit will not be practical. So to offset that, we should have other service orders or high-margin orders coming from resins, chemicals or operation maintenance equivalent to that. So that balancing is the one which would take us to real double-digit. We're not too far away from there, if the market were to behave the same way. If the market were to take a plunge in the next maybe 2 or 3 quarters in order intake, then what will happen is all the competition who are weaker on the knees, they'll start trembling and again, which means -- so like -- just go back maybe a year or maybe 6 quarters back. Average order intake of Thermax is to be say INR 530 crores and INR 850 crores, INR 900 crores, 1 quarter maybe INR 1,000 crores. From there, past 4 quarters, including the current one you've just seen, is all are 4 digit as I mentioned about. That means I -- if I'm getting orders, others are also getting orders. Sometimes, I become a little more aggressive to take a higher market share. But if there's at least sufficient -- not, I would say, sufficient for the fixed expense coverage for the competition, then the margin improvements can be possible for like us. So that is the uncertainty currently prevailing in the market.
Sure. And sir, lastly, you did mention that we have a clear detailed plan to double our turnover in the next few years. So can you share with us what exactly are we targeting, apart from our initiatives as you've mentioned Indonesian market a result of which market is growing? So some more granularity if possible within segments or within a broad businesses. How are we looking the broad numbers to pan out as we look to double our turnover in the next 4 years?
First and foremost, geographical expansion for the project business which we restrict earlier to only fraternal markets. Now we've -- I mentioned earlier about South America we started moving identicals. We are opening our offices in South America and getting prequalified. But of course, there are challenges over there because in that market, they need fund to come along with your EPC or maybe the equipment. So we will not go for it. So but selectively over there. Second, we're opening our own office in Kenya and started targeting some of that market and started picking orders. Southeast Asia is a big move for localizing the project operations over there. Amitabha and Amrita and team have recently gone there. And we've just -- in the concluded board meeting, taken the concurrence to half the hubs created in Thailand and Indonesia for project businesses, 2 separate ones. And now we'll have to have the registration of the company done, overall, that formality is completed. Then local partner for some other work to be done or not the regular -- from a JV for as a company, but for project to project SPV creation and identification, all that is going on and actually it is already on, on that. Then second item is we've also concluded that there are certain industries where we are already present, where we are only doing the current products of the company, which are the adjacent products. I'm not currently talking about analyzing, crystalize the entire thing and start recording team already moving and picking orders. There are both in EPC group, moving away from power EPC into general EPC, okay? That is another one. And boiler heater unfortunately, it's only boilers and heaters, but they -- what they manufactured predominantly is heat exchangers. So moving into those terrains and getting -- these are all the activities already started. So that is for the project business growth coming into. And we've been predominantly domestic in nature for the air pollution control, which we're seeing in the other markets because India is leading Southeast Asia or maybe Africa equivalent markets. But even those markets have started implementing, owing the climate change, the air pollution control equipment of the type that we can manufacture. For example, when we went to Indonesia in the beginning, we thought a primitive multi-cyclone is what the market is that I'm taking for air pollution control. We tried introducing electrostatic precipitator, the very modern product. Nobody bought from us. But today, it's almost become mandatory in Indonesia for an inquiry coming, they are also asking for electrostatic precipitator. That business will also move in globally. So these are the, I mean, geographical expansion and product basket expansion not to the unknown terrain. Nonterrain products which are not currently done, that is the next item. We want to have a better growth happening to the following business of the company, which are profitable, chemical. We will look at both green and inorganic growth for expansion because they are in the profitable business. We know what to do in that business. We identified both performance chemicals, which want to grow in India, and resin how to grow globally, which kind of accounts can fetch us continued 15%. That is an area that we want to be growing faster. Water, I already indicated to you that we'll now got a niche after having undergone major difficulty of losses for 3 years picking up as the margins improved, there, the investments are not too much there. It is our ability to ensure that we take the right order, execute rightly. We are growing. Our subsidiary, Thermax Onsite Energy Solutions, which is going to be crossing a triple-digit turnover, which has started 7 years back, and this is currently delivering almost equivalent to maybe 12% to 13% profits. And EBITDA level, much better. And green scheme being given. We're expanding the territorial limitation for them. We are moving into Southeast Asia, with that product, even Africa with that product. But there with selective multinationals, where we'll own the asset and run it. And we're going to be expand it beyond sea into water and wastewater treatment also, where we'll charge them with our plan on a per meter cube basis. So that also we'll have to know it is not a normal growth and even growth further. So they are very clear cut ideas related to the product -- the business -- smaller business growing faster with capital allocation done for it. And the larger business, which didn't really need money, it is more in terms of our own ability to be taking global risk and going. See, there are -- we studied what is our prime criteria for expanding geographical territories for the project businesses, is the risk mitigation on the country risk. And second is in terms of our ability to execute and making the margins that we're marking in India plus. So that's the way the India thing is done. We've got a Risk Council, incidentally, chaired by Amitabha. And when the businesses sits on that. And they do the analysis and they've already identified the countries and geographies where we're going to go. And what are the safety nets to be built to ensure that we are able to execute orders safely and come out of that. With all that accumulation, we're able to see the numbers which I spoke to you. One item that I missed is, cooling is only absorption cooling right now. We have just started process cooling. We're also buying over the shares of our partner in SPX, which has started also fetching us orders. So cooling also will have more than proportionate or otherwise, cooling market isn't growing for the absorption cooling. But the general cooling market is really growing. So that is another item that is identified. So these initiatives put together certainly, we'll be doubling it. And thankfully, we have got capacity available. We have got financial muscle power available because somebody asked me earlier, as to why aren't you returning the money. It will all need our money that we have and what we're going to be generating. Even working capital requirements, you'll need to have a balance sheet to spend. So money on the balance sheet will give you a better rating and -- but I don't know many a times people when they talk about they don't understand that I have a INR 4,500 crores worth of a bank guarantee limit to be given today. And if -- I'm rated -- Amitabha we're AAA+?
AA+.
AA+. He'll get it at 0.2%. But if I were to have a rating other than that which is the fate of many -- of my competitors, they may have to pay maybe 0.7%, 0.8%. So money on the balance sheet, and working capital management of the spend is what is going to grow the project businesses the way we want it to be grown. Because 0.5% extra for a bank guarantee can make a hell lot of difference, because in that projects for advance, for the warranty, guarantees, put together, the BG per order will be almost 30% in the global market. Yes, that's it.
Sure, sir, that's pretty helpful. And then one more question, one more question. For Thermax, hasn't the inflows in order backlog detail segment-wise was shared for Thermax global. Can we have those details for the stand-alone in their business also?
Yes, of course.
Standalone.
Yes, standalone.
I think we were giving stand-alone when you used to ask for only consolidated number, anyway. Energy segment, INR 869 crores. I'm talking about orders intake. INR 869 crores. Environment segment, INR 204 crores; Chemical segment, INR 106 crores. Total, INR 1,180 crores. And orders carried forward, order balance: INR 5,223 crores for Energy; INR 620 crores for Environment; and INR 42 crores for Chemicals; total, INR 5,886 crores.
And the share of exports in both inflows as well as backlog?
Okay. Exports in inflow, INR 466 crores. Exports in backlog, INR 2,190 crores.
Ladies and gentlemen, due to time constraints, that was the last question. I would like to hand the conference over to the management for the closing comments. Thank you, and over to you.
Thanks a lot, Ankur, and Motilal Oswal for hosting this conference call for us. And let me thank each one of you who continue to be motivating and encouraging us to be performing. If the market were to be looking up, I'm sure we'll also look up better than what we have currently. But in any case, the visibility having improved, we should be -- we have a lot of work to do in our backyard to ensure that the profitability can be improved. We'll work towards that, and we'll come back to you after 1 quarter. Thanks a lot once again.
Thank you very much. Ladies and gentlemen, on behalf of Motilal Oswal Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.