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Rossell Techsys Limited — Call Transcript 2026
May 14, 2026
59805_rns_2026-05-14_94bc20c6-c5a8-4df7-b11e-2fdf01276685.pdf
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ROSSELL TECHSYS LIMITED
Corporate Office: No. 58-C, Road No. 2,
Hi-Tech Defence and Aerospace Park,
Behind KIADB Industrial Area, Devanahalli,
Bengaluru - 562165, Karnataka, India
CIN: L29299WB2022PLC258641
Date: 14 May 2026
To,
BSE Limited,
20th Floor, P.J. Towers,
Dalal Street,
Mumbai - 400001.
BSE Scrip Code: 544294
National Stock Exchange of India Limited,
Exchange Plaza, C-1, Block G,
Bandra Kurla Complex, Bandra (E),
Mumbai – 400 051
NSE Scrip Symbol: ROSSTECH
Subject: Transcript of the earnings call held on 12 May 2026.
Dear Sir/Madam,
Pursuant to Regulation 30 and 46 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, we are enclosing herewith the transcript of the earnings call held on 12 May 2026 at 09:30 AM that was organized to deliberate on the business performance and financial highlights for the quarter and financial year ended 31 March 2026.
Request you to kindly take the above information on records.
Thank you,
For Rossell Techsys Limited
JAYANTH
VISHWANATH
Digitally signed by JAYANTH VISHWANATH
Date: 2026.05.14 11:21:28
+05'30"
Jayanth V
Chief Financial Officer
Encl: Earnings call transcript
+91 806 843 4500
[email protected]
www.rosselltechsys.com
Registered Office:
Jindal Towers, Block 'B',
4th Floor, 21/1A/3, Darga Road,
Kolkata-700 017, West Bengal, India
Page 1 of 19
"Rossell Techsys Limited
Q4 and FY26 Earnings Conference Call"
May 12, 2026
ROSSELL TECHSYS
BOUT ON CREDIBILITY | BUILT-IN QUALITY
ROSSELL TECHSYS
BOUT ON CREDIBILITY | BUILT-IN QUALITY
Rosell Techsys Limited
May 12, 2026
C H O R S E L L
MANAGEMENT: MR. RISHAB MOHAN GUPTA – MANAGING DIRECTOR
MR. SENTHIL BALASUBRAMANIAN – CHIEF EXECUTIVE OFFICER
MS. ZEENA PHILIP – CHIEF OPERATING OFFICER
MR. JAYANTH V. – CHIEF FINANCIAL OFFICER
Moderator:
Ladies and gentlemen, good day, and welcome to the Rossell Techsys Limited Q4 and FY26 Earnings Call. This conference call may contain forward-looking statements about the company which are based on the beliefs, opinions, and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict.
As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr. Rishab Mohan Gupta, Managing Director of Rossell Techsys Limited. Thank you, and over to you, sir.
Rishab Gupta:
Thank you. Hi, good morning, everyone, to our respected shareholders, investors, analysts, customers, partners, and members of the Rossell Techsys family. I am Rishab Mohan Gupta, Managing Director of Rossell Techsys Limited. Joining me today are Mr. Senthil Balasubramanian, Chief Executive Officer; Ms. Zeena Philip, our Chief Operating Officer; and Mr. Jayanth, our Chief Financial Officer.
Thank you for joining us as we close one of the most defining and transformative years in Rossell Techsys' history. On behalf of the entire leadership team, thank you for your trust and your continued belief in the Rossell Techsys journey. Today, the belief stands rewarded. At the beginning of the year, we made clear commitments to our stakeholders. Standing here at the end, I can say with confidence that we delivered on every one of them.
Financial year '25-'26 was a year of delivery, discipline, and focused execution. We crossed our guided revenue milestone, restored profitability across programs, expanded our order book, built capacity, entered new markets, and rewarded our people. Most importantly, this performance is not a one-off. Financial year '26 marks the beginning of a structurally higher growth trajectory. The foundation built this year is designed to compound.
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ROSSELL TECHSYS
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Rossell Techsys Limited
May 12, 2026
Our financial performance in the fourth quarter was the strongest quarter in the company's history. We delivered revenues of approximately INR142 crores, a 62% year-on-year increase, with profits of around INR9.5 crores. For the full year, our revenue grew from INR259 crores in the year '25 to INR485 crores in the year '26, an increase of 87%.
Profit before tax rose from INR10 crores to INR28 crores, while our EBITDA increased from INR38 crores to INR66 crores. These are not incremental gains. Revenue nearly doubled, profitability more than doubles, and EBITDA expanded sharply, even after we made significant investments in capacity, people, inventory, and new market entries.
Our order book and revenue visibility is quite clear. Today, our revenue visibility is stronger than at any point in the company's history, supported by strategic agreements aggregating approximately INR3,000 crores. As on date, the company's total order bookings stand at around INR715 crores of confirmed POs, and during the year, we received orders aggregating approximately INR570 crores, further strengthening execution visibility.
During the year, the company also submitted bids aggregating nearly INR4,500 crores across the aerospace, defense, space, and semiconductor segments. The company secured a landmark multi-year space contract valued at approximately INR400 crores, along with repeat orders from overseas defense customers, reflecting strong customer confidence.
In the semiconductor segment, assured orders and onboarding of new customers provide clear growth and visibility. More bids are expected to convert into orders in the coming months, further strengthening revenue visibility.
When it comes to operational highlights; in aerospace and defense, our aerospace and defense programs delivered consistent on-time performance throughout the year. Seeing our performance, Boeing not only appreciated our efforts but also agreed to level load future schedules, a powerful endorsement of the relationship and trust we have built.
Businesses with these Fortune customers saw meaningful growth during the year. These are not transaction relationships; these are strategic partnerships built over years of consistent delivery and quality. We recently received a repeat order from one of the major customers in defense.
In the semiconductor space, we emerged as a key growth driver in the year '26. Following successful customer qualification in the second quarter, volumes ramped up immediately, demonstrating both our manufacturing readiness and our strong customer confidence in our capabilities. This segment is now an established and growing revenue pillar for Rossell Techsys, where we are building early market leadership. In addition, we are in the process of onboarding another major overseas customer, which is expected to further accelerate growth in this segment.
From our space programs, we progressed decisively from qualification to volume-ready execution during the year, culminating in one of the most significant wins of the year 2026. We successfully executed the first large production batches and are well-positioned to scale the segment meaningfully in the year 2027. In parallel, we are in the process of onboarding additional customers in the space segment, further strengthening our growth pipeline.
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May 12, 2026
One of our space customers is actively encouraging an expanded presence in the United States as well for our US subsidiary, RTI. We are seeing increased interest from multiple customers seeking to leverage our capabilities. We are evaluating the optimal way to strengthen Rossell Techsys Inc.'s infrastructure to capitalize on this growing demand, and we view RTI as an important pillar of our global growth architecture.
On the Indian market side, targeted efforts to expand our domestic presence began yielding results during the year. We secured initial orders in the Indian defense and aerospace ecosystem, modest in scale today, but strategically significant in establishing our local credentials.
With our DPL license and AS9110 MRO certification now in place, we have formally unlocked the Indian market for manufacturing, repair, overhaul, and aftermarket services. In parallel, we have established strong domestic partnerships that provide a robust platform for scaling our India business in '27 and beyond.
On the commercial aerospace side, we have also begun opening doors for the commercial aerospace segment. While we currently participate as a Tier 2 supplier in this space, we are now positioning ourselves for a more meaningful entry into commercial aerospace programs. We would like to emphasize that this opportunity has the potential to be transformational.
Once this door opens at scale, it could significantly reshape our growth outlook, business model, and long-term projections. We are approaching this opportunity with discipline and intent, ensuring that when we scale our presence, we do so with the right capabilities, the right certifications, and the right partnerships.
While revenue grew sharply by 87%, inventory increased by only 45%, reflecting disciplined working capital management. Inventory coverage improved significantly from 10 months historically to 7.67 months, demonstrating enhanced capital efficiency. As our scale increases and demand planning continues to strengthen, we firmly believe and confirm that inventory coverage will reduce further in the coming years.
On the capacity expansion side, to meet the growing customer demand and address urgent program requirements, we have taken a strategic decision to lease an additional facility of approximately 210,000 square feet in close proximity to our existing operations instead of constructing a new facility as previously contemplated. This decision enables us to achieve operational readiness significantly faster.
The space and semiconductor programs will be migrated to the new facility, which is expected to deliver revenue levels comparable to our existing facility. This transition allows us to optimize utilization across both facilities while maintaining focus, efficiency, and scalability. This significant move ensures that capacity will not be a constraint on growth. It enables us to respond swiftly to customer needs and positions the company to sustain rapid expansion without compromising financial discipline or execution excellence.
Our financial position remains stable and it is supported by a diverse multi-banking framework. During the fourth quarter, we secured additional working capital facilities to meet execution requirements for the current year. In parallel, the company is actively pursuing the fundraising
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Rossell Techsys Limited
May 12, 2026
initiatives for strengthening the balance sheet to support the next phase of accelerated global scale-up. These initiatives are being undertaken with priority and precision, aligned with the company's accelerated growth plans and commitment to financial discipline.
On the people side, our people are the foundation of every result we have reported today. The workforce growth from 680 to nearly 1,200 in two years is not just a number; it is a reflection of the organization we are building. We have continued to invest in training, upskilling, and certification, including the use of virtual reality-based training technologies. A strong, capable, and motivated workforce is the engine of our next phase of growth.
And critically, this year's extraordinary performance has been recognized and rewarded. We have implemented employee increments and performance bonuses. Our people created the value, they deserve to share in it. This is a principle, not a policy.
Improved earnings, stronger fundamentals, and a clear visible growth trajectory form the foundation of sustainable long-term shareholder value. During the year, we have delivered meaningful value creation, reflecting the execution of our strategy. In line with our commitment to balancing growth investments with shareholders' returns, we are pleased to announce a dividend distribution.
The appreciation in Rossell Techsys’s share price reflects the market's increasing recognition of the fundamental transformation underway. While this progress is encouraging, we believe that a significant part of the company's underlying potential, driven by a strong order pipeline, expanding customer base, enhanced certification, and entry into new markets, remains to be reflected over time.
The value creation journey is progressing steadily with important milestones still ahead. To conclude, over the past years, we have not only delivered improved financial performance, we have built a strong foundation for sustainable wealth creation. This progress has been driven by disciplined execution, scalable growth initiatives, and increasing long-term visibility achieved within a single financial year.
This value creation is not episodic, it's structured, repeatable, and designed to compound over time. We believe this is the right time for the company and for our long-term stakeholders to build on this momentum and advance the next phase of growth. We would like to assure our shareholders that this journey is driven by our ability to convert opportunities into performance and performance into enduring value.
This progress is underpinned by a strong and visible order pipeline, the continued trust of global customers, and the unwavering commitment of our nearly 1,200 colleagues who contribute every day with dedication and pride. The foundation is in place, the direction is clear, and the opportunity ahead is significant.
We believe the company is entering a phase of sustained progress, making this a meaningful stage of Rossell Techsys’s journey. Thank you for your trust, confidence, and continued belief in Rossell Techsys. Thank you.
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ROSSSELL TECHSYS
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Rossell Techsys Limited
May 12, 2026
Moderator:
Thank you very much. We will now begin the question-and-answer session. The first question is from the line of Yogansh Jeswani from Mittal Analytics. Please go ahead.
Yogansh Jeswani:
Hi, thanks for the opportunity. So sir, congratulations on a good scale-up that we have seen in the top line. Just one question on the margin front. Margins have been sequentially weaker and impact lower than what we have been aiming for and guiding for. So any specific reasons for the same if you can highlight, please?
Rishab Gupta:
Yes, so see basically Rossell is investing a lot for the future, whether it's on people, whether it's on infrastructure, whether it's on training. We've also got a lot of new customers with a lot of new contracts where a lot of qualification is going on. A lot of energy and efforts are being spent on these qualifications, which doesn't necessarily yield in revenue this year, but in the following years to come, all these qualifications will result in repeat orders making our profitability much higher moving forward. So that's one of the primary reasons.
Yogansh Jeswani:
Right. So going forward in FY '27, do you feel our margins can increase substantially? And also if you could just broadly share a guidance in terms of what FY '27 revenue would look like and if you can also break it up in terms of the new segments, how they will contribute --the semiconductor and your space -- and also if MRO will start in FY '27 or is it for a later, later period?
Rishab Gupta:
Yes, sure. So if you look at it from a revenue perspective, I can't be very specific, but we saw the scale that we had last year and we're targeting the same kind of growth this year as well on our revenue moving forward. The breakup in the split of revenue, I would say is 50% aerospace and defense and 50% non-aerospace and defense for the year '26-'27.
We got all our MRO licenses and we've started a lot of marketing activities with all our different customers globally and in India. So hopefully we should see some traction in that in the short to medium term.
Yogansh Jeswani:
[Inaudible 0:14:53]
Rishab Gupta:
Yes, margins definitely will get better moving forward. I've always said the margins will be between 17% to 22%. We are definitely going to show an increased margin this financial year with a lot of efficiencies and the scale we're looking at. So yes, our margins will get better this year for sure.
Yogansh Jeswani:
Is it semiconductors and is typically a high-volume, low-margin business? With that scaling up, do you still feel that your blended margin will continue to be 17% to 20%?
Rishab Gupta:
Yes. The margins in the current competency that we do, whether it's for defense or non-defense, will be in the range of 17% to 22%. Yes, definitely for our non-aerospace and defense customers, we're doing a lot of automation, which also increases our bottom line and our profitability.
Yogansh Jeswani:
Got it. If I can squeeze in one more question?
Rishab Gupta:
Sure.
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Yogansh Jeswani:
So sir, on your balance sheet side, if we see the debt has been increasing and in your opening remarks you did touch upon that you are looking for some fundraise. So if you could just broadly share your thought process how going forward we'll manage our balance sheet and specifically the debt side because again FY '27, the growth that we are anticipating is very high, right?
So again we'll need a lot of working capital because our business is such wherein a lot of inventory goes in and, a lot of money will be required. So how are we looking at it and how do we plan to manage the debt and the pressure of it?
Rishab Gupta:
See, the idea definitely is to reduce our inventory levels moving forward. I did mention that as a company we were running on a 10-month inventory, which we've been able to get down to 7.6. The idea is to keep reducing that moving forward and eventually be a 4 month inventory company.
So a lot of energies and efforts are being made towards that and we're already seeing improvements coming in that area. We're also looking at a fundraise. The idea for the fundraise is primarily for Rossell to -- for growth enablement infrastructure. It's going to be growth enablement infrastructure that we see moving forward.
There's a lot of potential that we're seeing with a lot of our customers, and we are proactively strengthening our balance sheet to support the next phase of accelerated global scale-up. That's the fundamental idea of doing this QIP. So yes, we have a lot of plans in mind to raise capital and also to improve our inventory levels moving forward, which will obviously make our balance sheet much stronger for all the different customers we work with moving forward.
Yogansh Jeswani:
Got it, sir. I have more questions, so I'll get back in the queue.
Rishab Gupta:
Thank you.
Moderator:
Thank you. Next question is from the line of Rahil Dasani from MAPL. Please go ahead.
Rahil Dasani:
Yes, good morning and first of all, thank you for this opportunity. So just wanted to understand how much of the loss-making Boeing order was executed in Q4 and how much is left to be executed in FY '27?
Rishab Gupta:
I can tell you that we did approximately INR75 crores this year on that program and we're left with another INR70 crores for this financial year.
Rahil Dasani:
And that will be throughout the year or maybe we do it in the first half?
Rishab Gupta:
It'll be high in the first 2 quarters and then low in the next two.
Rahil Dasani:
Got it. And if the same thing if you can share for the space and semicon execution in Q4 and plan for FY '27?
Rishab Gupta:
Yes, so for both the space and the semiconductor this year we're looking at a significant growth. We're looking at close to a $300\%$ to $400\%$ growth on our revenue from the previous year for both semiconductors and space.
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Rahil Dasani:
Got it. And since in your introduction you spoke about the entry into the commercial that we are seeing right now. So by when can we expect our first large commercial aircraft order and execution?
Rishab Gupta:
So the companies we're talking to are building a strategy for India. They've made a decision that they want to create a supply base in India. Rossell has been shortlisted as one of the suppliers they want to work with. So it's still early stages, but we're hoping that we shall get some RFPs by the second quarter of this financial year. So we should be getting some RFPs and requirements and opportunities by the second quarter of this financial year.
Rahil Dasani:
Got it. But is this a starter order or will it be significant from the first level itself?
Rishab Gupta:
See, when you're looking at commercial orders, they're all much larger in scale. They're not going to be small-size orders. Yes, maybe the first year the revenue would be much smaller, but then the scale in the second, third, fourth, and fifth year will be much, much larger moving forward. But the order sizes are much larger than the defense or the space or the semiconductors that we deal with today.
Rahil Dasani:
Got it. That is very good to hear, sir. And if you can also share what our plans in the MRO part are. Are we looking for any acquisition or will we develop the capabilities and do everything from scratch here?
Rishab Gupta:
See, we've already got the license. We have a lot of relationship with existing customers that we're in dialogue with. We're partnering with not only foreigners but foreign companies but Indian companies as well. So it's something that we're working on.
Senthil is taking lead on this and we're pretty confident that this should bring us a lot more value to our customers and obviously increase our profit margin significantly moving forward. A lot of potential not only in MRO and the existing fields we were in, but Rossell also has a plan to grab a lot more content share on the existing platforms we're on today so we can increase our revenue three to five times on the existing platforms that we're on.
Rahil Dasani:
Got it, very clear. And just one last question from my side. We had earlier announced a large strategic contract from Boeing for a new platform of theirs. So what has been the status of the same and when do we expect this to commercialize?
Rishab Gupta:
I think deliveries have started. I don't want to say something wrong. Either Senthil or Zeena if you can take this up, but I think deliveries have started and I think the program ramp-up is going to happen sometime in the third quarter of this financial year and then it'll be consistently growing for the next five to seven years.
Rahil Dasani:
Okay. And you don't think that you can share the quantum for the same?
Rishab Gupta:
We announced the award wins when we got them, I think a couple of years ago. I think you're referring to the T-7 program if I'm not mistaken, correct?
Rahil Dasani:
Yes.
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Rishab Gupta:
Yes, so we have strategic agreements of close to USD $200 million on the T-7 already. USD $200 million.
Rahil Dasani:
Got it. And you said this will be ramping up from Q2?
Rishab Gupta:
I think so, if I'm not mistaken. I'll leave that for Senthil or Zeena to answer when the production ramp-up is expected for that program. Yes, the orders have been received.
Rahil Dasani:
Your voice is not clear.
Zeena Philip:
Yes, I'm Zeena. Yes, it will ramp up from later part of this year.
Rahil Dasani:
Later part of this year, got it. Yes, that would be all from my side. I have a few more, I'll join back in the queue. Thank you.
Moderator:
Next question is from the line of Hriday Choksey from Indus Equity Advisors. Please go ahead.
Hriday Choksey:
Good morning, sir. Thank you for the opportunity. Congratulations on a good scale-up. So my first request to you would be is if, I think the company is scaling really well and to do justice to understand the story even deeper would urge you all to consider doing some in-person analyst meets so that everyone can really spend some more time with you all and understand the story even better.
Rishab Gupta:
Sure, well noted. We can look into this for sure.
Hriday Choksey:
Sir, secondly, I missed the opening remarks. So I just had a question. So I understand we've had a good revenue scale-up, we have a visible order book and we've had a slight miss on the margins.
But if I take a three to four-year lens, so what where do you see Rossell Techsys as a company in 2030 and what do you how should one envision the future of the company?
Rishab Gupta:
See, I mean I'll talk to you first about, the whole macro macro picture that we're looking at. I mean if you look at it globally what's happening, aerospace commercial production is ramping up. Defense spend is increasing significantly. Countries are increasing their GDP spend on defense.
There's rapid space ecosystem growth happening. Semiconductor equipment expansion is happening globally and companies have decided to create a supply base in India. China diversification is happening, so a lot of companies are looking at coming into India. Supply chain there are a lot of supply chain resilience requirements.
So there's a big demand for trusted manufacturing partners and Rossell is very well positioned for that. We are high reliability manufacturing company. We're interconnect systems. We do -- there's a lot of requirement for the current competencies that we're in today and like I said earlier, the idea is to strengthen our balance sheet and be able to grow and to the need of our different customers.
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Today we do X amount of an aircraft. The idea is definitely in phase two, which is two to two and a half years from now, for us to be able to deliver a lot more product and a lot more content on the existing platforms that we're in. So we're also looking at moving up the value chain two years down the line where we can multiply our revenue per platform significantly.
So we are positioning ourselves for the growth we see coming our way and that's why one of the reasons of taking another 210,000 square feet of space next to us was to meet the growing demand of all our customers. So if you look at it, Rossell has the reputation, we have the global customers, we've shown strong growth, we have secular tailwinds, we have a visible scalable business model.
There are significant qualification barriers for anyone to get into the different activities we're in today. And that's why today Rossell is just getting set for this increase in demand and like I'm saying, the growth that we're even seeing this year will be similar to the growth we had last year.
So we are preparing ourselves to be able to deliver at the right quality, at the right price, and that's one of the reasons we're looking at a QIP as well this year. I hope I answered your question.
Hriday Choksey:
Yes, that's helpful. So just a follow-up here. So currently we're largely doing work related to e-waste and that would fall within the avionics realm, right?
Rishab Gupta:
Electronics, yes. You can say the electronics realm. Yes.
Hriday Choksey:
Yes, it's within avionics, right, and in any sort of plane or fighter jet or whatever. So just to going forward, are we also some -- when you keep saying we have further opportunities to move up the value chain, are you talking about maybe getting into aero engine parts, maybe aero structures and different parts of different parts that we can get into? Is that what you mean?
Rishab Gupta:
See, I can put it we're looking at getting into electromechanical integrated systems and assemblies. That's the next step.
Hriday Choksey:
So today I understand you've given a certain level of EBITDA guidance, but just to understand two years out, once maybe the QIP is done, money is come in, capex is done. Our MRO has MRO division has been set up, commercial aviation is there's been an uptick, what do you see as a margin profile for the company two years from today, which would be something like FY 2028?
Rishab Gupta:
See, two years from see, two years from today, two years from two years down the line, we'll still be focusing on our current competencies and where we're going to be scaling our current competencies. So I said in our current competencies we're looking at anywhere from 17% to 22%.
Obviously on the MRO side, the profit margin goes much higher because it's services that you're providing. And when we go to our phase two expansion, which I mentioned about electromechanical integrated systems and assemblies, then our profit margin from 17% to 21% can go anywhere from 21% to 30%.
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You know, so that's the kind of scale we're looking at. Right now, all focus is for operational excellence. We want to dominate wire harness scaling for the next two years at least. We're focusing on a lot of commercial work. We're focusing on our semiconductor growth.
We're focusing on our operational maturity, our systems, our margin protections, infrastructure scaling, and our MRO foundation. So the focus for the next two years is these things I just mentioned and then the idea is to look at phase two sometime in the year 2028-2029.
Hriday Choksey:
Noted, sir. So just a quick question on the MRO bit. So right now majority of India's fleet usually goes out to get serviced and this is a good opportunity for us. So what is the sort of TAM you're envisioning here? What do you think is the total -- what are the numbers you think we can generate from this business?
Rishab Gupta:
That's a tricky question to answer, but why don't I leave this question for Senthil. Senthil, if you don't mind taking this up because you're heading the MRO and that's your baby.
Senthil Balasubramanian:
Sure, sure Rishab. Good morning everyone, this is Senthil, I'm the CFO for Rossell. Like Rishab mentioned, we have the license and we are now talking to all our existing customers and, organic and inorganic growth, existing customers and also external customers saying that we do have a capability and we are generating a lot of, I guess, interest from our customers.
And so this is, the foundation, right, where we are talking to our customers and things like that. To put a number, might be tricky like Rishabh said, it's something we are working on, but we do see great potential partnering with, other service providers and also with our existing customers.
Even, from the US there is a lot of interest with our existing customers. So I'm talking strategy, but to put a number is, we'll work through to see, how well we are able to ramp up in a very short period of time.
Hriday Choksey:
That's helpful. Thank you so much for answering all the questions and just once again would request you to please conduct some in-person meets so we can spend some more time together. All the best.
Senthil Balasubramanian:
Thank you. We'll definitely invite, a lot of our customers and interested people to come visit our factory because once you visit the factory, you get the wow factor, you will definitely see all the world-class manufacturing that's happening at Rossell.
Moderator:
Thank you. Next question is from the line of Sheo Narayan, an Individual Investor. Please go ahead.
Sheo Narayan:
Yes, sir, thanks for the opportunity. Sir, as you mentioned that the growth will be according as per the last year, so it will be around 80% to 90% growth. You have given the margin percentage of 16% to 17%. Can you throw some light on what will be the PAT margin approximately?
Rishab Gupta:
Hi, sorry, I'm not sure if that question was for me, but I got disconnected and I've just joined again. So if you could please repeat that question.
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Sheo Narayan:
Sure. So sir, you guided that approximately we will get the same kind of growth as the last year. So the growth is approximately 87% this year. So we are expecting that we will be getting same 80% to 90% of growth next year also.
Rishab Gupta:
We're looking at similar growth, yes, in similar levels, yes, absolutely.
Sheo Narayan:
Correct. And the profit margin you said that it will be approximately 17% to 18% or 16% to 17%, but what would be the PAT margin approximately?
Rishab Gupta:
See, that totally depends. We see what our PAT margins are today. Definitely there's going to be an improvement on that. And like I said, we're looking at -- also looking at strengthening our balance sheet. So it completely depends on when the QIP happens as well and when the fundraise happens.
So difficult to answer that question now, but from our current levels, if it continues the same way, we will definitely see an improvement next year as well on our EBITDA, on our PBT, and our PAT. And obviously our revenue is going up much more much higher than what it is.
Sheo Narayan:
Sure, sir. And when can we expect that our CFO will be positive?
Rishab Gupta:
Sorry?
Sheo Narayan:
When we can expect that our cash flow margin will be positive, cash flow will be positive?
Jayanth V.:
Can I take that question, Rishabh?
Rishab Gupta:
Yes, Jayanth, please.
Jayanth V.:
We are expecting a ramp up I think in the coming years you should be able to see much improvisation in that.
Sheo Narayan:
Okay, sir. Thanks, sir.
Moderator:
Thank you. Next question is from the line of Hemant from Anandhan Capital. Please go ahead.
Hemant:
Yes, so sir, last con-call you guided for, you know, achieving around INR1,300 crores top line in next two years. So we did somewhere around INR500 crores this year. So the INR800 crores are we expecting to reach that INR800 crores in the next year?
Rishab Gupta:
Yes, we're looking at a very significant growth just like we grew last year 87%, we're looking at something similar this year.
Hemant:
Okay. And yes, so one another question is we actually deal with long-term contracts, right? Majority of our contracts are long-term.
Rishab Gupta:
In aerospace, that's correct. Not in the other not in semiconductors and not in space.
Hemant:
Okay, okay. So in that in that aspect, how do we try to compensate the raw material prices variation when we are doing the agreements? How do we tackle that?
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Rishab Gupta:
So it's all built in. We have back-to-back agreements if we are signing a five-year contract with our customers, we sign a five-year contract with all our different suppliers. So when we're bidding, you get an RFP, you get different bids from all our different suppliers around the world.
They tell us what their escalations are, they don't, we add in escalation and then we submit our bid. So it's kind of a back-to-back agreement in some cases that we have from our customers to our suppliers and in some cases we take an escalation and you add that to your cost.
Hemant:
So we -- am I trying to understand like are we able to pass on the prices to the customer for the existing orders also?
Rishab Gupta:
In some cases, yes, we've changed our contracts also recently where we've added a few more clauses, whether it's an EPA clause, which is an equitable price adjustment clause. We've added those in our contract. Some customers agree to it, some don't.
We've also started asking for advance payment and upfront payments for long-lead items or material that is single source that needs to be procured upfront to secure the material to de-risk the program.
So it depends on what that material is and who the customer is. But yes, definitely in some cases we're able to get compensated from our customers and in some cases we add that in our contracts as well.
Hemant:
Yes. And one last question. What was the percentage of cost that went into our manpower last year versus this year?
Rishab Gupta:
Jayanth, can you please answer that?
Jayanth V.:
Around 15% of our revenue goes into employee cost. You've seen that in our P&L. We're looking at an improvisation in this year as we scale up too.
Hemant:
So this year it was 15%. How much was it last year?
Jayanth V.:
15.5% in FY 2026. We're looking at good improvisation in this year in FY 2027.
Hemant:
Okay, okay. That's all from my end. Thank you and all the best.
We're looking at good improvisation in this year in FY27.
Hemant:
Okay, okay. That's all from my end. Thank you and all the best.
Rishab Gupta:
Thank you.
Moderator:
Thank you. Next question is from the line of Raj Agrawal from Niveshaay Asset Management. Please go ahead.
Raj Agrawal:
So thank you for the opportunity and congratulations on the scale-up. Sir, my first question was on the semi-con and space side. You know, where do these businesses get their wire harnesses
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today? And going forward, what kind of share of business do you think, you know, can move to India and Rossell particularly?
Rishab Gupta:
So it depends on the customers we're dealing with. Today, one of the customers we deal with have a big supply chain base in South Korea. And because it's such a growing market, they've decided to create a new supply base in India.
So Rossell is one of the partners they've tied up with. When we're looking at it from a scale perspective, I think, I mean the sky's the limit in this. I think we've barely scratched the surface yet. Like I'm saying, this year on the semiconductor we should be growing at 300% to 400% compared to last year. And I mean the growth in this can be pretty, pretty significant.
I mean it's difficult to put a number, but definitely the idea I mean the target is we can do up to even US$200 million in three years or four years from now. That's the kind of potential we see on the semiconductor side where we can do US$200 million revenue three to five years down the line.
Raj Agrawal:
That is great to hear, sir. Thank you. And so on the on this topic again, you know, currently we have one large customer in each of these categories. You alluded that one more customer in semiconductor is going to get added. So is it a new semi-con company or is it a supply chain partner of basically one of our customers that we have?
Rishab Gupta:
No, it's a new semiconductor company. It's I mean they've been in existence for years. They're one of the largest semiconductor manufacturers in the world and we should be hopefully joining hands with them and signing a contract with them soon.
Raj Agrawal:
Wow, sir. And in on the space side, sir, there are two large, you know, space companies in US. With our current facility in US getting refurbished based on one of our customer requirement, can you start doing business with both of them? Is it a requirement to be in US for this?
Rishab Gupta:
Yes, sure. We can work with whoever. There are no restrictions. We can work with any company. There's no restrictions on that.
Raj Agrawal:
Got it, sir. And sir, one last question. Sir, our margins have declined. Is it because of changing mix or that was not the reason for decline in margins?
Rishab Gupta:
It's a lot of investments that Rossell is doing. Like I'm saying, we're growing significantly. The partners need to, our customers need to qualify a lot of their products. To qualify products, there's a lot of investments that are required. There's a lot of training that takes place. There's a lot of learning curve that happens and Rossell is doing a lot of that.
Primarily for our new customers in the semiconductor and space category. So a lot of investments are being made in that and we're also making a lot of investments in-house for our training and automation to get better and more efficient moving forward. So like I said, yes, definitely there are a lot of qualifications happening now which will yield in much higher profits moving forward.
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So it just depends of on how many qualifications Rossell does on a yearly basis. And I'm happy to say that it's increasing significantly on a yearly basis and that's why we see a very positive outlook over the next three to five years in the competencies that we're in.
Raj Agrawal:
Thank you, sir. Thank you so much for the opportunity.
Moderator:
Thank you. The next question is from the line of Maitri Shah from Sapphire Capital. Please go ahead.
Maitri Shah:
Yes, hello, good morning. Great set of results and the commentary's been very positive. Just a few questions on the segmental split. You said that semi-con and space is going to grow 300 to 400 times in FY27. Could you help me out with the numbers for FY26? What sort of revenues we recorded on these two segments?
Rishab Gupta:
I don't know if I can be so specific, but I can say approximately 20% of our revenue in the year '25, '26 came from these two segments.
Maitri Shah:
Okay, and that that is going to grow significantly up I could say from the contribution it's going to grow up to?
Rishan Gupta:
We are looking at a 300% to 400% increase this year.
Maitri Shah:
Correct. Okay. And the margins on these are far better than the aerospace and defence if I'm correct.
Rishab Gupta:
I would say would be in the same lines, between 17% and 22%.
Maitri Shah:
Okay, okay. And on the MRO side, you said that the scale-up is going to happen in a very short time, we're going to see a good ramp-up. Any sort of guidance on how much contribution do you see coming in from MRO maybe from FY28, FY29 that could kind of significantly increase our margin outlook going forward?
Rishab Gupta:
Again, I will leave that for Senthil. Senthil, if you mind taking that up, please.
Senthil Balasubramanian:
Sure, sure. Yes, thank you for the question. This is Senthil, I'm the CEO for Rossell. I made a comment earlier, we do have the certification, we received that a few months ago, we're very proud of that. But right now we're in the process of building the foundation of, you know, letting all our existing customers know that we now have a service of MRO also and we're also marketing that with outside customers.
I referred that as the organic and inorganic growth. And so right now we are very excited that we are getting a lot of interest both from our existing and new customers globally, right, not only in India but also in the US. So we'll work through that. We are pretty, you know, excited about this journey and you'll see some pickup on revenue in the coming quarters.
Rishab Gupta:
And just to add on what Senthil said, it's not only the MRO we're looking at. Like I mentioned earlier, today Rossell is nearly on every military platform that comes out of the US. The idea is
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to increase our content on each platform from wire harnesses and panels and move up the value chain.
So we have a very robust plan of how we're going to do that and the idea is to do that two years down the line in in the year 2028 where we invest to, you know, do a lot more for our current customers, our current platforms where we're going to be supplying X into three or X into five moving forward.
Maitri Shah:
That is great. Also the order book of INR715 crore, any sort of split you would provide me on what portion of it comes from the space and semi-con side?
Rishab Gupta:
Yes, so I mean just to rephrase, we have strategic agreements for INR3,000 crores and confirmed POs for INR715 crores. Orders are placed on a strategic agreements also on a yearly basis. So strategic agreements are more on the aerospace and defence side and out of the INR715 crore confirmed POs, I mean I hope I'm not wrong with my numbers, please correct me if I am wrong, but I would say approximately 50-50 with the aerospace and defence and non-aerospace and defence.
Maitri Shah:
Okay. And on the QIP, you said there will be raising some funds. Any sort of colour on when this would be happening, what sort of funds are we raising, any quantum on that, and also where are we going to be using it? Like a new facility are we putting it up, a new market we're going to enter? Yes.
Rishab Gupta:
See, we're making all our efforts for the QIP. Obviously from our minds, we want the right investor to come in as well. So obviously we're targeting to get the right investors. So that's what that's the idea basically for the QIP. Where the money is being used, it's going to be primarily used for our infrastructure, you know, capacity expansion.
We are expanding our facility footprint, we're adding infrastructure, we're scaling up production capabilities, and we're preparing ourselves for larger platforms. So that's one of the areas where money is going to be used. Second is operational infrastructure. As we scale, we need better systems, quality infrastructure, planning capability, supply chain capability, testing infrastructures.
So we're industrializing ourselves much more, so that's again where money is going to be used. And the third area is working capital for scale. You know, for the aerospace ramp-ups we're seeing, for the semiconductor growth we're seeing, for long-lead inventory. So it's going to be primarily used in these three areas: capacity expansion, operational infrastructure, and working capital.
Maitri Shah:
Okay, yes, thanks. That's it from my side. Thank you so much.
Rishab Gupta:
Thank you.
Moderator:
Thank you. Next question is from the line of Anirudh Singhi from Dalal & Broacha. Please go ahead.
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| Anirudh Singhi: | Hi, good morning. So just a clarification, when we say INR3,000 crores of strategic contracts, is that over and above the order book? Like does that work the revenue over and above the order book? |
|---|---|
| Rishab Gupta: | Yes, that's over and above, correct. |
| Anirudh Singhi: | All right. And what is the typical size of an order that we receive? Like recently we received the repeat order for what is the typical range of the order size? |
| Rishab Gupta: | It again completely depends. We're on nearly every platform, so it completely depends on the platform and the customer. So it's difficult for me to answer that question. |
| Anirudh Singhi: | Okay. So the INR3,700 crores of visible revenue is what we have right now. That's the correct way to look at it? |
| Rishab Gupta: | No, we have visible revenue because of the strategic agreements as well. We have INR3,000 crores of strategic agreements and how the aerospace and defence landscape normally works, 6 to 12 months before delivery, POs are placed against the strategic agreements. So we have a very clear outlook for the next three years at least of where we're heading as an organization. |
| Anirudh Singhi: | All right. And just a request if we could come visit you and see the factory, that'd be very helpful. |
| Rishab Gupta: | Yes, sure. We can definitely plan that. I will tell Krishna to take that forward and you can be in touch with Krishna for that. |
| Anirudh Singhi: | Sure, thank you. |
| Rishab Gupta: | Thank you. |
| Moderator: | Thank you. Next question is from the line of Mithun Maity from MMM Capital. Please go ahead. |
| Mithun Maity: | Good morning, sir. I wanted to know about the geography split in terms of revenue. How much is coming from exports and predominantly how much is from North America if at all we have any other geographies provided as in? |
| Rishab Gupta: | Yes, sure. So today we're dealing in multiple geographies. We're not only dealing in the US, but we deal a lot with Europe, we're dealing with Israel, and we've started dealing a lot with India as well. The question was the revenue split? Sorry, could you repeat the question? |
| Mithun Maity: | Yes, the revenue split as in in terms of geography, especially exports. |
| Rishab Gupta: | So I would say 98% of our revenue is all exported. So we're still very export-focused. So 98% of our revenue is all export. |
| Jayanth V.: | Within that 80% would be North America and we have diversified into Southeast, Middle East, and we're looking to expand more on these numbers of Southeast and Middle East in the coming year, also in the European region. |
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Mithun Maity:
Great. My second question would be in terms of the in terms of the low orbit satellites which we had initially with Blue Origin. So are we getting any scale-up orders over there or we are not getting any orders in the low orbit origin sector? As in I'm trying to understand how it's going.
Rishab Gupta:
Today we're not dealing with Blue Origin; we're dealing with Amazon for all our space requirements. So we're dealing with them now. The idea is to obviously expand our customer base on the on the space side as well and looking at getting new contracts from different customers this financial year.
Mithun Maity:
In terms of semiconductor, we are predominantly providing wiring harness or are we providing anything more than wiring harness over there?
Rishab Gupta:
Wire harnesses as of now, it's all wire harnesses.
Mithun Maity:
Okay. Okay. The last question was, sir, the quantum of amount which we're trying to raise in QIP would be around?
Rishab Gupta:
Look, you know, QIP has to be done on the market cap of the company with a 5% up-down market share. So I mean we're looking at raising anywhere from 7% to 10%.
Mithun Maity:
7% to 10%, fair enough. Appreciated, sir. Thank you. I got my answers clear.
Rishab Gupta:
Thank you.
Moderator:
Thank you. Next question is from the line of Ankur Gulati from Gen Capital. Please go ahead. Ankur, your line is unmuted. Thanks.
Ankur Gulati:
Just a small question. Your transportation is seaborne or airlift and whether you guys bill on FOB or CIF basis?
Rishab Gupta:
Sorry, could you repeat that? I something on transportation I lost you. It's all being done by air right now. It's air-freighted. All the, everything we supply is air-freighted. Was that the question?
Ankur Gulati:
Yes, that's fine. And second, FOB basis or CIF? I mean you pay for freight or the customer pays for freight?
Rishab Gupta:
No, the customer pays for it. Please correct me if I'm wrong, Senthil, Zeena. The customer pays for it, right?
Senthil Balasubramanian:
No, that is correct. Predominantly all the shipment cost is paid by the customers. Yes.
Ankur Gulati:
Yes. Okay, thanks. All the best.
Moderator:
Thank you. Next question is from the line of Ankush Mahajan from Sanctum Wealth. Please go ahead.
Ankush Mahajan:
Sir, thanks for the opportunity to ask my question. So I joined later. Just try to understand, sir, if I see the year-on-year basis the margins are on the lower side, EBITDA margins. So what was
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the reasons behind it? It's a one-time or recurring something? Or what is the guidance for FY27 for the margins?
Rishab Gupta:
Definitely there'll be an improvement in our in our margins on EBITDA and our PBT in this financial year, which is '26, '27. The reasons why our margins were a bit lower in the year '25, '26, as I mentioned earlier, Rossell is making a lot of investments in infrastructure, in training, in tooling, in people, in processes.
We're doing a lot of qualifications right now with our new customers. That requires a lot of investment and the revenue comes in subsequent years once that product is qualified. So we're doing a lot of FAIs, which are first article inspections, where the time taken and the effort and the cost taken to qualify that component is much higher in the in the initial days and once qualified, we'll see much better margins moving forward because we're doing a lot of automation for our non-defence customers, so our profit margins will be much higher moving forward.
Ankush Mahajan:
Thank you. Thank you, sir.
Moderator:
Thank you. That was the last question for today. I now hand the conference back to Mr. Rishab Mohan Gupta for closing comments. Over to you, sir.
Rishab Gupta:
We would like to thank everyone for joining. Rossell is on a very good growth trajectory. We've been able to build the confidence of all our customers. We are a very reputable company. We deal with the best of the best globally and we are very well positioned and to grab the scale that we foresee and we're very excited about the future and sky's the limit. So thank you all for all your support these years and look forward to your continued support moving forward. Thank you all very much.
Moderator:
Thank you very much, members of the management. On behalf of Rossell Techsys Limited, that concludes this conference. Thank you all for joining us today and you may now disconnect your lines.
Rishab Gupta:
Thank you.
Jayanth V.:
Thank you.
Senthil Balasubramanian:
Thank you everyone.
Zeena Philip:
Thank you.
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