Thermax Limited
NSE:THERMAX
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Thermax Limited
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Good morning, everyone. Welcome to 3Q FY '19 Earnings Con Call for Thermax Limited. Today, representing the management, we have with us Mr. M.S. Unnikrishnan, MD and CEO; and Mr. Amitabha Mukhopadhyay, Executive Vice President and Group CFO of Thermax Limited. I'll now hand over the call to the management for their opening remarks, post which we can open the floor for Q&A session. Over to you, sir.
Thanks, Amit, and a warm welcome and good morning to all my friends from the community. It's a pleasure to be with all of you. I'll, as usual, start on with the gist of the results of the company. Starting with the order booking at the group level. We have been able to marginally improve the order booking to INR 1,480 crore from a number of INR 1,413 crore over the previous year same quarter. But the order -- carryforward order balance level, we have a fairly good number, an all-time high at INR 6,475 crore in the group level, which is 17% better in comparison to what it was in the last year at the same time. Revenues for the group is 29% up at INR 1,468 crores, and at the operating level, the PBT has improved by 17% to INR 112.1 crores for the group. After the exceptional items, the profit after tax is rated at INR 75.7 crore as against the INR 15.2 crore for the last year. Coming to the exceptional items, there are some negative and some positives, and the negative is in terms of an impairment of the goodwill, which was rated at INR 126 crores for Danstoker Group when we purchased in 2010. We also made a minor impairment of INR 13 crores of First Energy, which we bought over 3 years back. But there's a positive on a reversal of impairment after we -- having taken the decision to buy over the assets of Babcock & Wilcox through a share purchase. There is an upside of a reversal of INR 112 crores, which would mean a net impairment effect of INR 27 crores at the group level for Thermax, which we have already taken in consideration in the declared results. That's overall, about -- after adjusted -- the adjustment is on a conduct of plus and the minus adjusted, which I mentioned were Danstoker versus the impairment reversal happened on account of TBWES merger. The board having taken the decision to do a slum sale, that is the way we will be -- intend doing. The logic behind this is: TBW is capable -- the factory as well as edifice available is capable of manufacturing boilers of different kinds, either low-pressure, high-pressure, even supercritical, whereas Thermax have got a boilers and heaters group, which has been manufacturing subcritical range in the core generation and captive power for almost now, I would say, from 1980s onwards. So instead of operating 2 different edifices, we found it prudent to have this merge with TBW as an -- operated as an entity as 100% subsidiary. And the route that is chosen after multiple discussions is to make a slum sale of this particular business, of BMX, into that company. And this would be effected through a loan to be advanced to them at the time when the transaction is going to be conducted. In our understanding, we are gearing to have the transaction completed latest by April/May of the coming year. Otherwise, all other procedures related to transfer of manpower and assets being managed by the team would also take place. This would certainly have a synergy impact effect of having 1 set of management running the same business but under the same number umbrella, Thermax Group. For the time being, we have decided to retain the name of TBW, this is Thermax Babcock & Wilcox, itself because we have a permission to utilize it. Do we need to change it into any other name will be a decision that we will take when we go to the market, probably the same week.That's about the overall results for the current quarter and outlook to be indicated to you. Well, we've had a good quarter in terms of order intake. Despite not being supported by the domestic market, we have been able to register a decent enough order book on account of the fact that our international order intake has gone up by 65%, even when the domestic has gone down by 10%. So that has certainly helped us. If I look at the inquiry pipeline, which are under active consideration for finalization, both on the domestic market and the international market, there are sufficient number of medium- and small-sized projects under negotiation and continuing without any difficulty even with the worries of election happening or the global meltdown or will be a GDP contraction going to happen to the world from 3.3% to 3%. Inquiries are there, orders are getting finalized. However, whatever we were looking forward to in terms of the medium- and large-sized projects, especially in the power sector, oil and gas sector, fertilizer sector, steel sector, none of these are going to be happening immediately within the country, nor are they having sufficiently large similar kind of sized projects of INR 500 crores and above that we were looking forward to in the international market. So nobody's predicting a contraction in order registration. Based on the numbers available in front of us and the pipeline, we can certainly target for a improvement in the order intake even in the coming year also. So that is the overall take on that. Just to give you a feedback about Indonesia, it's doing well. Our order intake had been fairly good for the boiler business, the package boiler business. Beyond Indonesia, we have been able to also register orders from Myanmar, we've added from Vietnam and Malaysia, Philippines for manufacturing to be done in Indonesia. It is a positive sign, and I'm sure the -- if you look at the tempo of inquiry generation and order finalization, we should be able to be on target in terms of entering this particular edifice becoming -- crossing the breakeven as from this sort of 5-year period of time from the time of completion. That's from my side, and I'll leave it to you to ask me specific questions so that I can help you by giving the right answers. Thank you.
[Operator Instructions] The first question is from the line of Ravi Swaminathan from Spark Capital.
Sir, I have a question. I just wanted to understand how the China slowdown is likely to impact both domestic and international business, given the fact that well, basically, the -- if there's a slowdown over there, the -- your competitors over there who provide the backup power for the steel plants, cement plants, et cetera, how competition is panning out from China as a country? If you can highlight that, it'll be really helpful?
Thank you, Ravi. It's a very wise and right question at this juncture. Yes, the Chinese competition is increasing across the globe, and I'm sure there is an impatience that we are seeing in the Chinese suppliers across the globe. We've been able to resist it because the disadvantage with China in the last maybe 3 to 4 years had been the increasing cost of manufacturing for equipments like what we are manufacturing. We are able to manage in line manufacture license, like maybe mobile phones, electronic items and the equivalent. But these fork items when it comes to -- the costs have gone up in China because we are also -- we were also operating a Chinese factory, with the decision to be operating there, costs have gone up over there. So their ability to be competing against a well-run Indian company in the global market is not as good as it used to be in the last subcycle or a down cycle either. So it remains a threat because with the difficulty for them to be selling in North America and Europe and there is a marked negativity prevailing against Chinese product even in Europe, where they don't have a trade war with them, we can see that a preference of a lowered level currently prevailing, whatever is the reason for it. So that is an opening for India. For example, say, absorptions made in China, in our factory, if I were to export it to America, we had to pay -- my customer has to pay 25% import duty, whereas earlier, it was 0. For India, it is even now 0 or very lower percentage. Unless they turn against India and also, I mean, if the government were to put a penalty duty against in India, well, it may be difficulty. But coming to neutral countries like Middle East, Southeast Asia and part of Africa, well, we -- in every order that we are picking in the medium-sized projects in these parts of the world, which I mentioned, are in competition with 1 or 2 Indian companies, and the rest of them are Chinese. So for Thermax, the competition, whether it's in India or abroad, is almost the same. So we have been able to manage it in whatever order that we receive. But only thing is that prevalence in the market means the margin improvement is not an easy task because they are willing to go to any extent. But one more thing is the sovereign credit the Chinese used to be offering to countries and/or maybe even for individual projects of certain size; that is coming down. I think Chinese credit has been looked upon with a lot of microscopical actions by various customers and countries and in that, they do know that the possibility for a lower price, but later, it becomes a burden. So countries and companies aren't as receptive to Chinese credit facilities as in the earlier past. That's another positive. It's a mixed reaction. I would say it is offering us an opportunity as well as a challenge. Opportunities, I mean, we are able to continue to be maintaining our costs under check, and second, our quality improvement and I think we can beat Chinese to the global market.
And among the core large sector, you had touched upon power, fertilizer, et cetera. If you can touch upon steel, cement, chemicals, aluminum, et cetera. How the industry and demand environment is there from these sectors? It'll be really helpful.
Steel, to say the least, the capacity utilization really gone up post the minimum import price that India has imposed upon. On the contrary, all of them are enriching the balance sheet. In certain conditions, it is okay, but now it has become counterproductive because we cannot afford to be importing even the conventional -- nonconventional item, which are not manufactured in the country so easily. So that is inflection point. But expansion programs are not taking off because even today, the consolidation based on NCLT is -- to be completed for Bhushan Steel, I think is already over. There's a second Bhushan Steel, and also it's about to be completed. And the health of the industry hasn't improved. They should start thinking about expansion. I think I mentioned in one of the earlier con calls that Kalinaganagar expansion 2 as well as the Morawie of JSW is already ordered out. So in that 1 week was the order when we lost the order, but others are going well. And we also saw a [indiscernible] order conclusions in the Eastern sector of India, which -- a good number of orders have come to our company also. So that is another positive news. But I'm not expecting anything more to happen in the next maybe 4 to 5 quarters in terms of steel capacity expansion. Though, the Government of India is already outlining the capacity-expansion program from 130 million, 1-3-0 million tons per annum, to 300 million, which, in my opinion, is not needed in India because we don't need 300 million tons per annum of steel to be manufactured. At least doubling it from 130 million to a 250 million plus is something which we need as a country, but that would happen -- my feeling, that will wait for maybe a few more, not quarters, 1- to 2-year period of time for it to be effective thing. That's as far as the steel industry is concerned. All the nonferrous metal expansion programs, both aluminum and copper are completed. They're all -- I mean, the capacity is getting utilized. So possibility is there that 1 or -- 1 year down the line at least for value-added nonferrous metal manufacturing capacity addition in the country. That's the next thing to happen. Coming to oil and gas sector, it's a pity that we are not going ahead with the expansion program. We are in maybe anytime short of petroleum product availability in the country. We'll be forced to import refined petroleum. So there are 3 of them which are almost -- at least I'm happy to say that in 2 of the projects, the government has already appointed project managing consultants. In one of them, technology transfer agreement is also signed up. I'm expecting H2 of next year, the tenders will be out in the market and people like us should be enriching our balance sheet, with the orders to be coming in towards the end of next year or maybe beginning of the year after. That's as far as the oil and gas industry is concerned. Fertilizer, I don't think anything is going to happen for at least 1 year. I don't think anything is going to be happening because there are 2 different schools of thought in the decision-making fraternity of the country that we already are over fertilizing the land that we have, so we should be reducing the utility of urea, one. There are others who are saying that for real improvement, you have to go for upper quality of NPK mixture. This is a decision that we made finally as a control industry. The government, that's going to take a call on this. I'm not expecting anything to happen. Power is another story where we'll regret possibly in the future for not having increased the capacity because as the economy is going to start growing at the same kind of rate for 3 to 4 years, there will be peak deficits, and it can't be made good by either solar or wind. We need to necessarily go for supercritical thermal power plants. But the balance sheets of all the current thermal capacities are bleeding. I don't think they have the muscle power to be expanding, nor is the banking sector in any position to be supporting this with an overhang of debt available on their side. So that's the reality. The power will not -- and it'll be a pity for the country, but the truth is that we will not have the major expansion program going on for the power in the next 1 year. Cement gains. I mean, I need to be telling that all of them are healthy, happy. They were gung ho about maybe expanding, but I think they must [ have overdosed ] slightly. But all of them have programs currently for waste heat recovery to be done to convert into power. And a happy situation is that unlike where they were going, for example, a 3 million tons per annum plan, they would go for a 10- to 12-megawatt size of a waste heat recovery based power plant. Today, they are extracting the last of the heat from the plant and elevating the power generation even up to 22-megawatt for a 3 million tons per plant, which will mean almost 40% of the power can come from the plant itself. So that's a good move, which should benefit companies like us. Of course, there are competition. It's not that only one company is there, and price points are not improving. Despite the steel price having gone up, the price points haven't increased in the waste heat recovery. So that's about the main sectors that we spoke about.
Got it, sir. Sir, if you could give the order book breakup, it'll be really helpful.
Amitabha, would you want to help him with the -- we'll now onwards give only the consolidated level numbers, rather we'll confuse you and [indiscernible] sectors. All numbers that we speak will be on consolidated. Yes, Amit, please go ahead.
For the quarter order intake, energy, INR 1,153 crores; environment, INR 212 crores.
[Operator Instructions]
Yes. For the quarter order intake, energy segment, INR 1,153 crores; environment segment, INR 212 crores; chemicals, INR 114 crores; total, INR 1,479 crores. And order balance, energy segment, INR 5,763 crores; environment segment, INR 641 crores; chemicals, INR 70 crores; total, INR 6,475 crores.
The next question is from the line of Renjith Sivaram from ICICI Securities.
Sir, just if you can throw some light, like, we had been avoiding this FGD orders for a long time. So in the next slot of NTPC, are we participating? Are we seeing the payment terms improving? And also, from the other FGD-related opportunity, how are we going on with this? If you can throw some clarity on that?
We have been able to partially improve the terms of payment after multiple discussions with the government and NTPC. Unlike the secondary tenders where they have increased the retention to 35%, it has now come down to 17.5%, but not that it's a great number, but it is okay, tolerable, so we can at least participate. So in the second bulk tender, we are participating, and the price points are yet to be put forward. Technical discussions are going on and bids are already under evaluation. We'll be there, but not for all of them. There are multiple of them. We'll be selective in terms of which are the projects that we are targeting, number one. Initially, in the private industry, though inquiries are there, nobody has come forward for a finalization level, barring one. In that particular one, we are at an advanced stage of discussions, and commercialities will start maybe in the next month. And possibly, that conclusion should happen in the first quarter of the coming year. So we're back in the FGD business. But only thing is, as I mentioned about like the instance if a critical did happen, if it's going to be a dog eat dog and suddenly, you're going to have a top line created without any bottom line and if it's sufficient for technology, well, we will have to be careful on that. See the one factor which is to be considered by all us here is the industry does not look up to having an FGD added on as a value-add for power generation. They feel it is a burden on their costs. And thankfully, the government has now agreed for a pass-through for the cap free costs. So that is only a relax one can talk about at this point of time. We'll be actively participating. The good news is that we are active in the other private sector, not for very large orders. In the similar industry, wherever there is FGD getting installed, a good part of the orders are coming to your company. We are also encouraging many of the other guzzlers of energy, some solid fuel, where they also import coal once in a while, telling them that FGD introduction will save them of difficulties in the future. Some of them we are able to convince. But progressively, I think there's a pioneering effort needed from companies like us to ensure that FGD has become a very normal product that gets added on along with the boiler in the future too. So that's positive news there. Is that okay, Sivaram?
Yes. And sir, last call, you were sounding very much positive, and that positivity has come down a bit this quarter. So what has actually happened? And what has changed your overall tone?
Well, I was as positive -- I'm as positive as whatever, the last time. Maybe the words that I've used is there is anything missing in that front. See, one should recognize for a fact that the global situation is turning a little negative between the last quarter and current quarter. Last time, nobody spoke about a global GDP contraction expectation to 3% from 3.3%. People talked about may maintain and manufacturing revisited in America, Europe may come positive. They have not been able to sort out many issues in North America related to investment. There's a, I mean, shutdown happening -- has already happened for a long period, and again, uncertainties prevailing about will it happen for a second time. Brexit hasn't really gone through. Now these are very, very big political things, which a small company like Thermax shouldn't be worried about ideally, but this impacts the investment destinations and the investment in the value. Even where projects have got a viability, people will look forward to have the decision-making then. Once the Brexit is done, everybody knows where to invest, how to invest. Similarly, in North America, if the government is going ahead with the real Americanization plan, or still vis-à-vis, I mean, there's the trade war, which has happened in China, is it for [ trade ] or is it going to be maneuvered in the future and sorted out. And availability of goods from a low-tariff country is something which will be forcing an investor because, please remember, anybody who sets up projects with capital being deployed will look forward to a minimum stability of 10 years where the capital is recovered and the loan is repaid. So such kind of decisions sometimes can have an impact based on this kind of geopolitical decision-making. That is why I said. I'm not sounding negative. Certainly, I am feeling even the election scenario within the country between the last call and the current call, do I need to -- normally, I don't give a political commentary, but the loss of 3 seats by the ruling party of the country has even made the people who are absolute continuum that -- those who believe that it is going to continue for the -- another 5 years, they're all sitting back and now doing various arithmetic to find out will there be political stability or not. In a country like India where government is the main investor through borrowings, and government-supported policies create capacities in the largest sector for commodities and the infrastructure, certainly, there will be a concern about -- as to will there be a stability of governance or will there be instability. At the end of the day, the decisions related to investment in the country are not made by 1 million people. It is maybe totally 100 people who take all the decisions. Those 100 people will certainly have a thought process, should we wait? That's about it. Otherwise, everything is fine. Nothing has gone wrong.
Okay. And sir, this raw material to sales has been increased level in the last couple of quarters. So is it largely to do with the pricing pressure? Or what -- or is it regarding commodity prices, which we are unable to pass through? What is causing that?
Both are true. With the pricing pressure in the market at the time of finalization, though we are in a fairly healthy position as far as our order book is concerned, same thing cannot be said about every competitor of mine. So when an order needs to be finalized, the weaker of the competition will be willing to accept prices which are much lower than ideal price levels. So -- which will force people like us even when we're accepting an order because orders are negotiated, it is not, I mean, tendered and -- it is also negotiated. So we may get to know about what price is being offered by the competition. And the purchaser who's wanting to buy from Thermax, he'll necessarily say that, look, this opportunity is available to be me to get at this price, I'd still prefer to deal with you but you'll have to come down on prices. So of that, how much can I pass it to my suppliers is the question. Now commodity prices were on a upswing for the past maybe few quarters; steel rise around INR 28 a kilogram all the way up to INR 45. Now it is maybe stabilizing between INR 43 to INR 45. So in there, cost increase that has happened to steel or the associated commodities, there is no way we could have increased our prices in the market. That has had a hit on them. So this is a condition prevailing. Unless otherwise you have at least 3 to 4 quarters of, I mean, a lot of orders available in the market, companies come under pressure. We -- not that we come under terrific pressure, we also are a part of their entire ecosystem. So I cannot be an island of excellence where I say that this is the minimum that I'll take, otherwise I won't take. We have factories, we've got people, so we need to keep the edifice on. So that is where we would normally prefer taking orders from good companies where there won't be a delay in execution and they're able to be generating funds to execute the project. Those kind of projects, we accept it even at the cost of maybe a minor compromise on margins, that's the reality. And same thing prevails in the global market too.
[Operator Instructions] The next question is with the line of Aditya Bhartia from Investec.
Sir, my first question pertains to Dangote order. Are margins in that order comparable to the margins that we have historically been seeing? And are you facing any cash collection issues in that order?
I'm not expected to be very open about the margins in an order. Basically, it's in a public domain. But however, Aditya, I can reveal to you that the margins are not inferior to what we normally make. It is not that, that margin was available. We struggle a lot to ensure that we are able to get good prices, and we'll do a good job so that no over expenses happens. So the margins should be closer to what we normally make, that's number one. So far, there have not been any cash flow difficulties from the customer. Yes, they have paid all the -- whatever had been the milestones that we had asked for so far. And the last 4 boilers have -- the initial 4 boilers are also passed the hydraulic test, so now it'll be at the last part of the assembly, and they can move out of the country in the first quarter of next year. So I presume that they would take delivery and pay. And there are standard letter of credits available for the last part of the payment. Just to give you another indicator, the main equipment, which is to come for the refinery work to start, has to come from Korea. I'm happy to say that the sale from that place, and it released the [ duty ] at Nigeria also. And one more Indian company, which is supplying a column -- fractionizing column, a very large equipment by another large Indian company, has also got into the ship now. So the project is progressing quite well, and there have not been any cash flow problems so far on the project from the customer's side. So things should happen, albeit there may be a minor delay here and there.
Sure, sir. And sir, just wanted to understand how has the response been to our Indonesia facility. You did indicate a bit in your opening remarks, but if you could just lay out how you're seeing this facility over the next 3 or 4 years?
Yes. First and foremost, we are manufacturing package boilers and some components for medium-sized capacity boilers. The larger ones will continue to be going from India. Now for this, there were limited local competition who were ruling the roost over there. Certainly, there would have been resistance from them to ensure that task as much as they can delay maybe Thermax' entry into the market as a local manufacturer. Very happy to say that today, the factory is almost coming to a level of utilization of 60-plus percentage, which for an engineering company, it's quite good. So we've already cleared our next level of [ missionary ] expansion to increase the capacity, and that's already ordered out. There are some very large groups in that part of the world who, if they start buying from a company like Thermax, will certainly have consistency of order incoming. I'm very happy to say that we have been able to capture orders from some of the largest groups in Indonesia and in the other ASEAN countries also. And the best information to be shared with all of you is that the company which bought the first boiler manufacturer and regulation factory has given me a repeat order for making another boiler for the same factory. So that's a reaffirmation of the quality of product that we are able to bring out from that factory. So I'm quite positive about the boiler manufacturing side of our initiative in Indonesia.
Understood, sir. And sir, last question. When you spoke about different industries, especially the industries which place the large orders, you didn't sound too optimistic. But while speaking about order inflow expectation, you spoke about a likelihood of order flows in next year being higher than this year. So how should we kind of reconcile the 2 things?
Number one is that I'm expecting an improvement in the standard product order finalization because the inquiries and the response from the customers, when I see the data from around, say, 20, 21 different segments, which I keep talking about, the food, food processing, alcohol, beverages, auto industry, ancillaries, light engineering, pharma, all of them are on a positive upswing only. They are not looking at government change or government continuation. They're looking at the urbanization, which is happening unabated in the country and the consumption increase that is happening. And even before, I mean, the election year, a lot more of money in the budget is being targeted at the rural economy. And when they have more money, what do they do? They buy white goods. They consume a lot more. So the capacity utilization of those consuming industries will be going up, so new capacities are going to be happening. That is why I'm quite positive about whatever may not happen in the larger sector, part of that can be compensated with the other sector, which is for the consumption-oriented sector. The international markets already were in so negative. But I've seen in the current quarter, there had been an uptick in the order finalization in international market. It's an indicator that we'll continue to be finalizing medium-sized orders. So if we are able to be remaining at the same level of aggression and the cost control, we should be able to manage to get similar kind of orders from the global market, which would mean -- you could just imagine, my year before -- last order was -- last year's order was including a Dangote order of INR 1,000 crores. Without a Dangote in the current year, I'm almost closer to what we had done in the previous year. So that's an indication that things can happen. So that's the optimism which is there in me, to better the order booking. And I'll keep informing you. I mean, there are certain calculations and assumptions that we make. If something were to go wrong totally, I'll come back to you to say that sorry, I assumed that it's going it happen, it didn't happen. But currently, at least based on information, I feel there could be an improvement. That is the reality.
The next question is from the line of Renu Baid from IIFL.
Sir, 2, 3 questions from my end. First, if we look at the performance for the quarter, energy segment margins for the 3Q. And broadly, it seems that it could be coming in from the international subsidiaries from our side, and you've also taken a knock at Danstoker. So how should we correct all these points? And if you can help us understand the performance of the core energy segment, India segment as well as outside India? And what is dragging the margins in the energy business for us?
Renu, domestic business has improved its margins in energy in -- to be precise. Cooling, which was in a major difficulty in the last year has started improving their margins in the domestic market as well as in the orders that they are getting from outside. Heating business has improved the margin. Boilers and heaters is almost at the same level in terms of the margin. Power business may undergo bit of a improvement challenge. But otherwise, they are positive. But yes, the larger tendered orders that we would have accepted in the last year, which are under execution currently, 1 major project from the State of Gujarat and 3 from the fertilizer sector, all of them are currently seeing a bit of a tightness in margin, not that of an erosion in margin, tightness in margin. So power, possibly, we see it as a bit tight situation, currently and going forward also. So overall, in Indian operations, the margins are improving or maybe at least maintaining. The major negative currently are coming -- in the current quarter also has come from Danstoker Group where we had costs over and as I mentioned about. What are we taking as actions over there to ensure that we're able to contain it and improve for the future is what I need to be telling. With the closure of 1 or 2 larger companies in that part of the world, we were getting project-type orders also in a company like Danstoker, which has got Boilerworks as another subsidiary. And those project orders were lingering beyond a level where we were booking. Site expenses, which are far beyond what we'd have expected. So that is one of the negative. In the current quarter alone, we have a negative closer to [ 17 ] from those projects. So that is almost reaching conclusion. So we decided not to take anything other than standard product orders under the Danstoker Group. We will not take -- because there are definitely orders available, we don't want those orders. So once those are going to be through by end of March or early April, nothing will be remaining as non-project tender orders over there, and that is point number one. Second, so we're going to close down our manufacturing for project from the Boilerworks factory. And since Polish factory is now catching momentum, I mean, the numbers are at least at -- I mean, I don't know how to compare to tell you. Currently, we are able to generate 1,000 man-hours per week in manufacturing from Polish factory. We're going to be doubling and possibly tripling towards next year beginning and then -- beginning, we will double and we will triple, that's the target we have taken. And as I mentioned to you guys in the con calls earlier, the cost of manufacturing in Poland is almost 1/3 of what you have in Denmark. So that should also help me improve. And how do we get more orders in the future? Germany, as a country, will -- which is the largest market in the entire of Europe was not possible for Thermax to sell because we had a company earlier there, which was shut down, Omnikel. So the legal framework needed us to be waiting for the entire administration process to be completed, beyond which only we'll be allowed to be starting -- I mean, allowed to start an operation there, which the period has now come. So Q1, Q2 of next year, I can start selling back in Germany with Danstoker brand. So I'm going to reenter the largest European market also based on that. The third block was manufacturing in the coming -- I mean, supporting me from Poland. So this action that we are taking in Danstoker should bring it back to the good days when we used to be making 7%, 8% in our EBITDA in that particular edifice. So that should happen some part of next year. That is as far as our European operations are concerned. And then Chinese operations that I told you about, we'll stop selling conventional absorptions. We are only making heat exchangers for the district heating system; that will continue for some more time. But I'll inform all of you at the appropriate time what we are going to do with that. So there's some negative, the big negatives that come down over there so that is about the international negative operation. Thermax Inc. America is turning in positive. Thermax Europe in London is turning in positive. And all of these offices, that where we are picking orders, it's normal. I mean, the inquiries, that was a major concern for 2 to 3 quarters in the last year, with inquiries were there, but orders were not getting fulfilled. But the current quarter has seen a reversal of that. That is why our international bookings are substantially improved for the products in the current quarter. So that's about the overall scenario, Renu.
Right. So as in -- you mentioned about INR 17 crores of cost overruns on this quarter for Danstoker also. So why did you see energy margins approximately 6% and about 7.5%, 8% adjusting for these one-offs. So for next year, should we be targeting to be closer to double-digit margins in the energy segment? Or you think there could be headwinds from the current project mix that we have and businesses that we mentioned about?
The orders on-hand should help us to go closer to what you're expecting, unless something -- one more spurt of any cost increase were to happen. Number two, negatives that could ever happen is in terms of the market would return negative, and I'm compelled to take orders the way we had taken in some of the areas where -- I mean, they're all positive margins, but not 8% or 10% kind of margins, so how the market is going to pan out. So the energy product businesses have got short-cycle orders also of 3-month delivery to 5-month delivery equivalent. So whatever I do in the first half of the next year, we'll also get revenue recognized in the next year. If there are convenient decent-enough margins, we should be able to improve the margins in the next year for the energy sector -- should be able to improve.
Right. And overall, for the 9 months Amitabha also can help us, but how was the net financials for Danstoker for the 9 months in terms of the losses or profitability from the [indiscernible]?
It is negative. We won't give -- normally give so much of -- I've been very open to deliver things have gone wrong. And I also mentioned to you how we'll turn it around and bring it back to normalcy. So numbers for one small subsidiary is unfair on a part of the set. It's going to be -- it's a negative, and it will be negative at the year-end also, though they may turn in some positive results for the Q4, but year-end will be negative for us.
The next question is from the line of Venkatesh B from Citibank.
I had just one question. Last year, we did close to almost -- on the consolidated level, we did around 9% EBITDA margin. Now for 3 quarters, we have seen contraction: first quarter, 158 basis points; second quarter, 150 basis points; and third quarter, 108 basis points. So is it reasonable to assume that we should close out the full year at below 8% margins? And the fact that the current backlog also has orders which are at that range, 8% kind of margins?
Next quarter, though, I don't predict it, I think could be better than the number that you have in your mind. So it should slightly improve rather than degrading it any further.
Yes, sir. That is what I was hoping, that it will be higher. Even if you do like, say, 8.8% in the fourth quarter, the full year number will come in at around 7.8%. So I was factoring that in into my numbers while I was asking you this question.
So we are trying to -- see like, the surprises of the tenders we have mentioned about the [indiscernible] backlog to be positive, even if they were to be neutral in the current quarter, we would have been at the same level as last year, they won't have any negative. So next quarter, we are trying our leverage. These are all things, unlike in the auto industry, where we know every car sold, what are the costs and what are the profit in each one of them, in project orders, only when you account for each of the expenses that you'll be able to come to know, though we have a better control on all of this. So I'm not expecting anything substantially negative in the coming quarter. Substantially, there could be 1 or 2 here and there, I told you about some projects having tightness in margins. So there will be an improvement in the next quarter. Next year, I will not want -- currently, some unknown factors because as we execute projects, please remember, surprises can happen. So we are normally able to manage it. Once in a while, we'll have a little difficulty, challenges may happen. But otherwise, I don't think next year we will remain at the same level, it could be better. It could be better as what our current anticipation is. Because we want -- because not only me, but for all my suppliers, the steel price increase, which is -- I didn't think any of you really understood that what it means for companies who are buying equipment from -- all these operators [indiscernible] price telling that even the orders that you have taken and losing money, help me out. When the steel price went up from the -- I told you, INR 28 to -- about 28,000 a ton, all the way to INR 40, INR 42, INR 45, and not one month was there available, where you could see a negative or maybe it coming down. Now it is almost stabilizing, twice their revenues, but again, they've increased in the recent past. So they have played havoc with the Indian manufacturing industry which are using ferrous metallurgy. So that is something which is really, really -- and even at the same time, even styrene prices went up, so my chemical business of resin manufacturing. I mean, so the price of styrene has gone up all the way with 37%, and the customers won't pay for -- the rate contracts that we have with our customers, they won't pay me at 37% more for resin. Thank god, it has now come back to the original levels with the petroleum prices for petroleum having come down to maybe [ income fees]. So somewhat, these variations can have -- so in such situations that a company will go out of control and get this negative. These ensure that we shall remain a decently profitable organization. So I'm not expecting any commodity spurt in the next, at least, 3, 4 quarters. But there's a lot of unpredictable things, can it happen? I presume it should not happen. Even though it happened, actually, our margins still improved. It may not be in a big way, but at least, whatever, the erosion happened, can be possibly, partially recovered in the next year. This is my current view, Venkatesh.
Sir, just a follow-up. I asked only one question by the way, this was the second question now.
Okay, go ahead, let him go ahead. Please, quickly.
Yes, how much percentage of your backlog has got past the cost pass-through clauses?
In our industry, hardly any order will come with a cost pass-through. Though all our quotations that are offered will have that pricing variation clause, it means [indiscernible] when it gets concluded. There are some government tenders where you get a PVC price variation first, and we don't participate in too many of those. I have mentioned in earlier con calls how we manage to contain the cost for the major items by placing the letter of signature orders for the specialized fee within 7 days of me getting the order. So those are protected. But commodities, see like, cannot be protecting because nobody agrees for the long-term contracts for commodities fee.
The next question is from the line of Pulkit Patni from Goldman Sachs.
My first question is could you talk about the capacity expansion plan at Dahej, where for the resin factory, we are going from 12,000 tons to about 40,000 tons. So where are we today in terms of our capacity utilization there?
Yes. Pulkit, the first tranche of the capacity that we created at Dahej is 12,000-meter cube per annum, which got permission last year. It is currently running at 720-meter cube in the last month and expected to reach 900, as I promised you, by March. So that is as far as the existing capacity is concerned. The next level of expansion was to go from 12,000 to 20,000, to additional 10,000, for which we already had ordered equipment that some of them already come, some are coming in. And our expectation is, in the quarter -- Q2 of next year, we should be able to commission the land, the expansion program, taking it from 12,000 to 22,000. Now last time, when we put up the new capacity, we had major challenges and capacity run -- I mean, rising up, some issues whether that is sorted out. So I presume the expansion program from 12,000 to 22,000, once commissioned, there are not other facing problems, similar to [indiscernible] problems that we faced last time. So by December, we should be able to be rising up, and by March 2020, we should be having 22,000 available to us. Current capacity need for the company is approximately 17,000 to 18,000 meter cube, so that is sufficient for the next 2, 3 years in -- as far as the capacity. And we continue to be running our factory in Paudh, in Maharashtra, that 10,000 [indiscernible] available to the company, then another 10,000 also. The next level is to take it from 22,000 to 40,000. We have the master plan ready. We have not taken the investment decision, and there are purpose in our mind, as we have another 18,000 also created with Dahej because of the master plan is for that, or should we look at where the consuming markets are and have one more location gone through is something which is currently undecided. The investment is very clear that we'll be investing for taking it from 22,000 to 40,000 Thermax will do. Will it be at Dahej or will it be any other location is something which we'll conclude in the coming year, and then we will inform all of you as we go ahead with that.
Understood, sir. So my second question is while you've grown your order book by 17% on a year-on-year basis, if I look at the last 3 quarters, they've been in the INR 6,400 crore range. Now, given the fact that next quarter is right before the election, how should we look at next year's revenue growth for the company? Do you think we can grow from where we are this year? Or it should be ballpark in the same range as what we've clocked for FY '19?
We are intending to increase our order, ambitions are to increase it. But you are right in the other, it depends a lot on the order to be -- orders to be concluded in the Q4, Q1 and Q2. If there are similar kind of order intake going to happen, then, certainly, one would see an improvement in the top range also next year. But in case there's a major contraction beyond expectations, either by postponement of decision-making or by we're losing the order to competition who have become very desperate, or the customers deciding to postpone the decision-making, all 3 are possible. So I would not want -- so, see, no company will ever target to contract the top line. Though, we are capable at the moment if sort of a contraction were to happen, how to control the bottom line to ensure the bottom line doesn't get unduly impacted. So these are all decisions taken as we see. We measure the market on a daily basis and then of the order intake. Based on which one's decision will take us to which we're too directed.
The next question is from the line of Sandeep Tulsiyan from JM Financial.
So my first question is on the environment segment margins. So you've seen a very sharp volatility in margins in this particular segment. So is it more to do with the mix between different subsegments? Or is it more because of the commodity price between the procurement and delivery that is impacting the margin here?
Both your assumptions are right, Sandeep. Because the environment segment, as we are reporting, comprises of water business and air pollution control business. Water is -- after having gone through some major difficulties in the earlier past, it's now stabilized, so the margins are improving. And margin improvement is both on the industrial projects as well as in the standard products that we sell to the commercial segment, both of them are stable and improve. And, equally, for the air pollution control is the one business hit maximum for the commodity price increase, as I'm continuously telling all of you in the con calls. So since the stability has come in industrial prices, I'm presuming that we should be able to maintain the same kind of margins in the environment segment going forward also.
Understood. And the second question is if you could give us a breakup of domestic and international inflows as well as order book, both for third quarter as well as the corresponding number for last year?
Amitabha will do that. Why don't you do that.
Domestic and international order book and carry forward.
For the Q3.
Yes. Order intake for the current quarter, domestic is INR 1,024 crores; international, INR 455 crores; total, INR 1,479 crores. And order carryforwards: domestic, INR 4,139 crores; international, INR 2,335 crores; total, INR 6,475 crores. YTD order intake: domestic, INR 2,969 crores; and international, INR 1,506 crores; total is INR 4,475 crores; total, INR 4,475 crores.
Yes. And so the corresponding number for last year, 3Q, if you can just give for the same.
Okay. Last year for the quarter, domestic order intake, INR 1,136 crores; international, INR 276 crores; total, INR 1,413 crores. YTD order intake: domestic, INR 2,421 crores; international, INR 2,360 crores; total, INR 4,781 crores. Order balance: domestic, INR 2,788 crores; international, INR 2,767 crores; total, INR 5,556 crores.
The next question is from the line of Lokesh Garg of Crédit Suisse.
Maybe just would like a perspective on what segments are contributing to domestic inflows of, let's say, INR 1,000 crores this year and maybe INR 4,000 crores for the 9 months? And similarly, a little bit more perspective on some base segments and in some ways countries that are contributing to this, let's say, INR 2,300 crores of order inflows for 9 months that we have had in the company.
Lokesh, we have had fairly good order intake coming from the tire segment, the CEAT tires, BridgeStone, Apollo, MRF, TVS Tyres, all of them have concluded orders for expansion programs. And happy to inform you that we've been able to get all the orders in the segment. That's a bit on this. There has been also orders coming in the domestic market from food processing industry, there's multiple kinds of food processing industry across the country, whether it's South or West or maybe North. Not so much in the East region. All these 3 regions have concluded orders for food processing industry. We've had [indiscernible] industry investing in the current quarter as well as -- in the current quarter only one order, but otherwise, in the first 2 quarters, there had been more orders in the Eastern sector from the [indiscernible] industry. We have had the chemical industry giving us orders, paper industry giving us orders also, which many aren't aware that we are importing a lot of waste paper or maybe even [indiscernible] in the country, and decolorized and recycled paper with the use of packaging there afterwards, with the e-commerce picking up. Though the reading paper is coming down, the Kraft paper utility is substantially going up, unbelievable quantity, so India has been seen as a major country for e-commerce in the future. Looking at that, a lot more people are setting it as a plan. So those -- all of them who need specialized [ warriors ] for it, and we do design such standard equipment, and we have received good support from that industry. We've had from the FMC industry, starting with Unilever onwards, for their capacity increase at various places; they and their franchisers giving us orders. So these are -- and then if I could talk about we have orders coming from outside India in the Southeast Asian market from tire affiliates. We've had orders from Nigeria, Savannah Sugar. So there are various parts of the globe where we have been able to conclude orders. There is a sugar refinery coming up in the highland where 2 megawatt into 8 megawatt captive power plant, a cogeneration plant, we have received the order against global competition from one of the largest FMCG multibillion dollar companies of the world. So we've had good orders from various segments. And thankfully, this quarter, we didn't have any order which is where I gave you a INR 100 crore number. All the orders were small and medium. So this gives a lot of confidence to us, that these are the questions that you guys keep asking and worrying about, that, if the big orders were to be absconded, how are you going to survive? So we are seeing that. This support, of course, this will be needing a lot of efforts to be present in the market, not in the sense for finalizing, to -- when the inquiries that we -- where we get involved, that might deliver, so might be able to add the value. Helping the customer to select the right product and the right combination, the pressures, then pressures of fuel, everything put together, then we get a premium as the people remain. So we need to have a lot more force industry. So I need to appreciate that we've had a good channel management improvement done in the recent past. And my channel sales through channel partners in the country have gone up by almost 20%. This is -- 20% is not only -- I mean our inquiries are increasing. It's also a channel effective in going up where our people are able to deal with even a -- converting a customer who otherwise would go to a low-cost boiler, we are able to get it on Thermax' sales because we are able to explain to the customer what are the benefits of buying a high-efficiency boiler. Then we've introduced some new products. We ignored the smaller capacities in between, where people have gone again from oil and gas firing, where we were the kings into solid fuel firing, burning coal for maybe 1 ton of steel by a small company. And we thought okay, it is not worth doing. But today, for the past 1 year, we've introduced a new product, a fully automated boiler which can burn coal and [indiscernible] just 1 ton of steel. And it has sold like hot cakes. Now we'll take it out of the country. So there are some of these product innovations that we've done, we're also reinforcing our presence. So we're just giving the confidence that even in valleys where big projects are absent, we should be able to improve our standard product order bookings. So that is what has helped, really, for us in the current quarter, such as state. So can I repeat the same thing in every quarter? Our intention is to do that thing. Will the market buy it? We'll have to wait and watch. Is that okay, Lokesh?
Yes, sure, detailed explanation. Wanted to just ask you just on that Q that you gave in the answer itself. Of the INR 4,475 crores worth of orders that we had in YTD time, what -- how many orders are upwards of INR 100 crores and how many are below that, either in quantum or number whatever?
Current quarter, again, most -- there weren't any. But last quarter, there were a couple of orders in the current quarter.
But 9 months from your memory if you can suggest what quantum came from upwards of INR 100 crores order -- of order size above INR 100 crores?
There is -- there were -- the only order was there, which is INR 300 crores. And then, of course, we had NFL orders, which are almost INR 500 odd crores we had.
It was last year.
That was last year really, okay. NFL was last year. And also...
All of them are...
All of them last year? No, in fact, I would say that their contribution will be -- they're not with tender that we want nor did we conclude some big orders. There were orders -- there are a lot of credits between, say -- maybe I would say INR 25 crores to INR 50 crores, there would have been many. Because at this stage where people buy automated boilers, which the boiler alone can cost INR 40 crores, INR 50 crores these days. So big projects who are in there in the current year, not many, but I can also [indiscernible].
The next question is from the line of Inderjeet Singh Bhatia from Macquarie.
Just one question. And as follow up to Venki's question earlier, if things remaining same or no change in commodity prices, would we be able to kind of get to say a 9% mark on EBITDA margin next year?
Possible. So a one-word answer is, also, possible. Because if the commodities don't vary, then we have -- we don't have to be negotiating -- delaying the decisions for purchase. Please remember, 60% to 65%, sometimes even 70% of their costs is in purchase. And many a time, the discrete items we've preferred, technical items we've preferred when the commodity prices are going up, naturally, when suppliers will up the price disproportionately. And to get them to a decent-enough price takes a lot of time and effort. But as the commodity prices are stable, our ability to negotiate with the suppliers will be far superior. And then things don't get delayed also. So if -- barring 1 or 2 projects, which are there with me, which have to be executed in the coming year, all others have decent-enough margins; 1 or 2 of them are into a bit of a difficulty, which will not impact me, I should be able to compensate for that, while having margin improvement then in the rest of them. So the commodity price stability is the best time where you can -- see, there are 2 times where we can improve margins: one is when the commodity price is stable; second is the time when the market is slum with inquiries, [indiscernible] this isn't happening. We have not witnessed both of these for some number of years, whereas the price stability in the input prices are visible today.
The next question is from the line of [ Dia Mehta ] from Anand Rathi.
Sir, I would like to ask about the growth prospect coming forward. So in our pipeline, what do you see about the private CapEx happening, and in which user industry basically?
Before I give you the answer, I owe an answer to Lokesh. Lokesh, you asked, there was one order that they concluded in the last quarter, which was an order value more INR 100 crore. In an order value, I can't tell the exact number, but almost closer to INR 200 crores from GRASIM Group for a capacity expansion of an existing [indiscernible] plant which we gifted them. So that is an order registered on Thermax [indiscernible], subsidiary. So that is -- I don't want to give -- this one order was [indiscernible] in the quarter. Now coming with your question on the sector, which I'm expecting the orders to be happening, these seem to be [ romper ] inquiries, which are in the pipeline. We have a sales force in place. So our inquiry registration and follow-up and everything is automated these days. The sector which is topping the inquiry relations is food and food processing. Almost, I would say, 14% to 15% of all the inquiries that I have globally are from this particular sector. It's not really an Indian phenomenon, we do see a lot of other capacity addition happening in Indonesia and Thailand, Philippines, all of them related to food processing. So that is the #1 sector where I'm expecting orders to happen. Some sectors, such as the dairy and milk products area, there again, there are multiple projects in the country for capacity expansion happening in that area. Next one that's currently visible to us is a light engineering and automobile component industry, where the orders will be smaller in size, but there are multiple inquiries currently happening in that area. Sugar and sugar derivatives, and ethanol manufacturing as a sector, there's a combination because either they make sugar or they go for ethanol, there are inquiries in the pipeline under negotiation. Waste heat recovery related to cement industry, and in their distillery sector because all of them are under terrific pressure to go for the distillery waste we convert in reusable energy, and we are one of companies specializing in that product. And there a lot of customers across the country who are now wanting to have tertiary recovery of energy which the energy which otherwise would have extended to the chimney is being valued by people that are recovering that heat and making reusability, that is another area we are expecting. Water is an area where we are expecting substantial growth in the coming years because of the [side back ]. There are water starvation happening. For example, the area where we are -- this is our technical factory is under a threat of no freshwater being supplied for [ E&E ] companies for the next 6 months because there are contaminations. And they have already told the Indian industry that look, I mean, we can't give you water, you better fend for yourself. So many of my customers in that area are already talking about can I recycle the effluent. So 0 liquid discharge is catching up across the country. So there are -- not every company has the technology solution for recycling the entire effluent as a usable water, it's a high-tech job. So there -- these are the areas where companies like Thermax will find their own, I mean, niche markets. We have just introduced a multistage evaporator design with Thermax system. So with that, I'm expecting that I should be able address that particular market. So water is another area that I'm expecting things to be happening. And pollution control related to smokes emission is going to come to the industry in a big way next year because it will -- now earlier, we're really having smoke. Now most of the cities in India are having smoke. So smokes emission control from the conventional industries getting imposed in a stringent way, so that's in that area I should also have improved orders happening. So these are the general sectors. Beyond which, there are many knitting and sketching more in India, much more than the composite big states. And export has again started improving in this area. Government is also supporting the industry through a second program, which was earlier known as [ TAFS ] Relation Fund. So [ TAFS II ] is already in work. Only for selected companies, it is availed through credit even for export orders available. So those are already going to be helping for not all but selected textile sectors to be investing in, where we'll also find both for in our effluent treatment as well as for the heating [ energy concern ] to be included in that area. Absorption cooling is also improving, both in the domestic market in the current year and the international market from same periods are improving. So these are -- cooling as a business also will grow next year. So these are the sectors I'm expecting major growth. I haven't considered any thermal power oriented anything to come to us, nor have I considered a steel plant order other than we [indiscernible] to happen. But I'm certainly targeting the oil and gas industry. I only hope that the refinery expansion inquiries will be on time, at least I should be able to register one order. Otherwise I'm prepared for waiting for the year after for inquiries should be out in the market next year. So these are the areas that we are expecting the improvement to happen in the next year for order intake.
And as far as government cases...
Sorry to interrupt, [ Ms. Mehta ], may we request that you return to the question queue. There are participants waiting for their turn.
Okay. No problem.
The next question is from the line of Ashutosh Mehta from Edelweiss.
Sir, I just wanted to get a sense on how is the liquidity situation in the market currently, both in terms of advances for new orders and receipt of payments for the ongoing projects? And if Mr. Amitabha can help us with the operating cash flow number for the 9-month period?
Ashutosh, I need to say that it is better than what it was in the last quarter. There is a betterment because the bank in terms of awarding you with bigger credit in the thing. Application from anybody, maybe 2 quarters back, things have improved, but not to the extent that all of us will be dealing. So the time taken between the shaking the hands and texting through their phones, which this will take this year 1 to 2 months is very improved, [ 3 months ], it's that most of them are coming, barring for some people who -- because they're having weaker balance sheet, so that is point number one. For larger projects, from weaker balance sheet, no bank is even willing to discuss. So that is one of the reasons that one should be clear about that fact. And only those that were decent credit history would be able to get it from the banking system. Remember also that all the money that you know about the government giving to the farmers and the budgetary allocation, all this will reach a handful of banking systems, and some of that comes back as [ it leads ] to them, and so they have to be dispersing money, and they are on the lookout also for good credit card customers. So many of our customers have good credit, many, let me rephrase the word many. Not all of my customers are creditworthy, many of them are. So there is not so much of a difficulty that we had maybe a few quarters back. It is improving. It can still improve. That is the current take on that. On the working capital side, that we are better off than last year, to my reckoning, our net account receivables have improved to 91 days at this point of time, so the inventory has gone up. But then for a higher carryforward orders, with what's happening in commodity prices, we had to be keeping higher [indiscernible] inventories. So these are the 2 areas that you can talk about. And my cash position currently is INR 880 crores is the threshold -- INR 840 crores a portion of the -- based on quarter end, INR 840 crores. So that is about the cash flow position of the company.
Right, sir. Sir, on the operating cash flow number for the 9-month period, if Mr. Amitabha can help us with that?
Amitabha, what is the operating cash flow? Do you have the number for it Amitabha, for us today?
Yes. Operating cash flow for this quarter is INR 150 crores before CapEx.
The next question is from the line of Renjith Sivaram from ICICI Securities.
Sir, just wanted to understand like if the sugar distillery policy was there and there was a lot of news, we heard that a lot of these sugar companies are putting in distillery facilities. So in that aspect, have you seen orders from that area? And how big that opportunity can be for Thermax?
We are aware of the distilleries coming up, but we do not make the distillery plan. And many of the distillery plan makers also may supply on their own the smaller boiler. However, the waste which comes out of the distillery known as spent wash, that is a pollution problem. So that -- we are one of the companies making a specialized solution for converting that waste to usable energy, and even making power out of that. So we are getting -- we're continually getting orders from distillery segment for the spent wash boiler or the captive top line using spent wash. And other side of the story is that there are also bioethanol plants being planned by the oil industry. In fact, there are 5 projects already sanctioned and tendered out right now. Each one of them will be needing very specialized boilers, which we are developing right now or developing also along with some other larger EPC contractors who may take those orders. So that is another area where sugar is oriented -- because sugar -- sugarcane, a part of the cane may go into producing sugar and other part can go for bioethanol, which should be for blending with petrol. So that is another area where I'm expecting things to be improving going forward.
How big will these opportunities be in terms of numbers?
A typical boiler for a distillery can go for anywhere between INR 12 crores to INR 25 crores, depending upon what are the quantum of wastage in there will be. So if 10 of the market we can put it in the year, INR 250 crores is the maximum size of the market.
Okay. And lastly, can you give the breakup of the revenue in terms of exports and domestic?
Amitabha? For the quarter?
For the quarter and the 9-month.
Yes. Of the total revenue, the revenue of INR 1,436 crores for the quarter, INR 835 crores is domestic, INR 603 crores is international. And YTD: INR 2,138 crores, domestic; 1,761, international; total, INR 3,899 crores.
The next question is from the line of Elesh Gopani from Gopani Securities.
In the auditor's report, there is a qualification regarding that there are many sales tax used against the company, and we have made appeals. So what is the status of these appeals? And in which courts they are situated now?
Amitabha?
Yes. The status of the appeals is that it relates to excise duty, and we have worked with the tribunal, and the casing is pending in tribunal level.
Ladies and gentlemen, that was the last question. I now hand the conference over to Mr. Amit Shah for his closing comments.
Sir, thank you for providing us with the opportunity. If you have any closing remarks, please do the same, sir.
Yes. Thanks a lot to all my friends from the community for continuously being with us, supporting us, asking very, very right and consecutive questions to us. Many a times, I get ideas from your questions truly and what we need to do going forward, so continue supporting us. Times may be challenging, but we have a decent-enough order carryforward, and challenges could be there on cost, but we will be able to manage it. So that's about all what I would like to comment. And looking forward to better quarters, at least in the immediate future, proceeding 2, 3 of them. Thanks a lot once again.