Concord Enviro Systems Ltd

Good morning ladies and gentlemen and welcome to the Concord Enviro Systems Limited Earnings Conference Call. 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 this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded.

I now hand the conference over to Mr. Kanav Khanna. Thank you and over to you, sir.

Thanks and good morning to all the participants on the call and thank you for joining our Q3 and 9 months FY26 earnings call of Concord Enviro Systems Limited. Please note that we have mailed out the results to everyone and you can also see it on our website. It's also uploaded on the stock exchanges. In case you have not received it, you can write to us; we'll be happy to send it over.

And before we proceed to the call, let me remind you that the discussions may contain some forward-looking statements and may invoke known or unknown risks, uncertainties and factors.

It must be viewed in the conjunction with our business model and could also cause future results or performance to vary significantly from what is expressed or implied.

To take the results of this quarter and answer all your queries, we have the management of Concord Enviro Systems Limited with us. Please welcome Mr. Prayas Goel, Chairman and Managing Director; Mr. Prerak Goel, Executive Director; Mr. Anish Goel, Group CFO. We'll be starting the call with a brief overview of the quarter, gone past and then we'll follow it up with some question and answers.

Now with that being said, I'll transfer the call to the management. Over to you.

Hello, good morning. My name is Prayas Goel. A very warm welcome to Concord Enviro's Third Quarter and 9 months FY26 earnings call, thank you for taking the time to join us today.

We are beginning a very exciting chapter of our journey with the launch of our H-Xtreme heat exchanger product that we launched in Q3 and showcased with the recently concluded Chemtech exhibition in Mumbai. This cements our place in the process industry where we can apply a mix of our membrane and thermal products generating higher value for the clients, as well as getting a larger wallet share from the same clients.

The H-Xtreme heat exchanger, our next generation shell-and-tube system is engineered for highly corrosive industrial environments. This product directly complements our focus on waste heat recovery for zero liquid discharge applications in making the zero liquid discharge not only greener but also lower in cost.

This H-Xtreme product range fits directly into flue gas carbon capture applications for both Concord's own carbon capture and utilization solutions and the broader carbon capture and utilization market where Flue Gas cooling is an inevitable first step. Our solution makes recovering energy a simplified step.

The focus from the government through a budget allocation for carbon capture and utilization makes us very excited about the future opportunities in the near term for this product range. We

believe this complements our broader strategy of expanding beyond wastewater treatment into adjacent process separations and sustainability led applications such as solar photovoltaic, green hydrogen, carbon capture and semiconductors. We will continue to share updates as these initiatives translate into commercial traction over the coming quarters.

With the introduction of this product, Concord Enviro is leveraging its over three decades of experience in water and wastewater management and has evolved into a technology driven, globally integrated solutions provider. Our focus continues to be on zero liquid discharge and energy efficient technologies that enable industries to meet their sustainability goals while optimizing life cycle costs.

We continue to serve a diversified client base across pharmaceuticals, chemicals, food and beverage, defense, automotive, energy, steel, textiles, reflecting the adaptability and scalability of our solutions. The order received from one of the largest tequila brands in Mexico is proof of the superiority of our solutions for wastewater globally.

In line with our strategy to strengthen our technology capabilities, we have also made a strategic investment of $2 million for an equity stake in a US-based polymer company. This investment enhances our access to advanced material science capabilities and supports our long-term product development roadmap. This is our second investment in the US in a membrane technology company.

On the raw effluent membrane space, we have expanded our field trials and are changing the face of wastewater treatment with our partnership with great technology companies in the international marketplace. FY '26 we have also faced challenges with delayed project executions.

Post Africa, we have also seen delays in land acquisition for the BOO project being undertaken by our service arm; this has resulted in rescheduling of delivery of the systems.

Given these shifts, a SAP re-implementation taking place this quarter and higher engineering lead time for large projects currently on order, for FY '26 we are guiding towards a revenue of approximately INR600 crores, implying an expected growth band of 2% for the year. While near-term execution timelines remain important, we believe this range reflects a balanced view of current visibility and conversion schedules.

From an order book perspective, our lifetime order book continues to remain very healthy with meaningful execution expected over the mid-term. That said, we recognize the need to enhance disclosure granularity going forward. We have issued TCV and ACV metrics this quarter so that investors can better track down inflows, execution progress, and recurring revenue visibility.

Looking ahead to FY '27, several growth drivers are beginning to take shape. We expect CETP- related orders to start contributing, supporting revenues in the next financial year. Export

markets are also witnessing strong traction and we see this segment emerging as an important contributor to incremental growth. We therefore see a strong order book for FY '27 to meet our growth targets for the year.

Our solutions-as-a-service or a SaaS business, Roserve, is scaling up meaningfully. Water-as-a- service as a concept is gaining popularity the world over and we believe that partnering with the right global partners will help us scale up Roserve to the heights it can achieve.

Our focus on the solar PV industry has resulted in our first order consisting of both ultra-pure water or UPW and wastewater recycling and reuse. The systems supplied to a leading power company to generate desalinated water for solar panel cleaning have also been successfully commissioned at a large solar farm in Western India.

We believe this segment will continue to scale steadily. The energy efficiency of our solutions is what drives us apart from others and is being recognized by the market. Discussions with other leading industries in the solar PV manufacturing space are currently at an advanced negotiation stage and we expect momentum in this area to build from Q4 onwards. Overall, we remain focused on execution discipline, strengthening technology differentiation, and building diversified growth drivers across geographies and segments.

With that, I'd like to now hand over to Mr. Prerak Goel, Executive Director, to walk you through the financial performance for Q3 and 9 months of FY '26. Thank you.

Thank you, Prayas. Good morning, everyone. For the quarter ended December 25, revenue from operations stood at INR1,245.75 million compared to INR1,248.45 million in Q2 and INR1,228.21 million in Q3 FY '25, reflecting a marginal decline of 0.2% quarter-on-quarter and a growth of about 1.4% year-on-year.

EBITDA for the quarter stood at INR43 million compared to INR76.57 million in Q2 FY '26 and INR17.15 million in Q3 FY '25. This represents a decline of 43.8% sequentially while growing at 150.7% year-on-year. EBITDA margin for the quarter stood at 3.5% compared to 6.1% in Q2 FY '26 and 1.4% in Q3 FY '25.

Net loss after tax for the quarter stood at INR81.77 million compared to a net profit of INR44.91 million in quarter 2 FY '26 and a net loss of INR85.64 million in Q3 FY '25. For the 9-month period ended December 25, revenue from operations stood at INR3,518.12 million as against INR3,874.46 million in the corresponding period last year, reflecting a decline of 9.2% year-on- year.

EBITDA for the 9-month period stood at INR110.69 million compared to INR342.91 million in the corresponding period last year, reflecting a decline of about 67.7% year-on-year. EBITDA margins for 9-month FY '26 stood at 3.1% versus 8.9% in 9-month FY '25. The net profit after tax for the 9-month period stood at INR4.33 million compared to INR43.62 million in the corresponding period last year.

While the near-term performance reflects the impact of project delays, our order visibility remains strong. We are confident that the strategic investments we're making in talent technology and execution will enable us to deliver sustainable long-term value.

With that, we now open the floor for questions.

We have the first question from the line of Sucrit D Patil from Eyesight Fintrade Private Limited.

Two questions; my first question to the CEO is, looking beyond the guidance which you have given, what will be the key priorities guiding the company's strategy to strengthen growth and profitability? How do you plan to balance expansion in waste management services with sustaining margins over the next few quarters? That’s my first question; I’ll ask my second question after this. Thank you.

Yes, thank you, and that remains a strong priority for us in terms of balancing margins and frankly the focus comes from differentiated technology and looking at value-added solutions for the same industrial space. And I'll take an example of the solar market where the type of solution and the value-add that Concord as a solution provider delivers is very differentiated and which allows us to remain, focused on margins. So that will remain a continued focus going forward.

Thank you. My second question to the CFO is, as Concord plans forward, what financial signals will drive decisions on cost control, capital allocation, and debt management? How will these signals influence long-term earning stability and shareholder value creation? Want to understand the plan of action and a point of view on this? Thank you.

Yes, so hi, Prerak here. So see, I think from a long-term value creation perspective, you know, we are obviously targeting the sectors which are adjacent to our business, our core business which is water and wastewater. We obviously see the need and the drive to, you know, move into larger project executions, and that's where the company has been pivoting to over the last few years, both in the international and the Indian market space.

So I think, you know, looking at sectors like CETP etc. which will add or bring in that value.

Now coming to capital allocation etc., see the company has put in capacity over the last, I would say five to six years where we have built in enough strong capacity to be able to achieve our next scale of growth.

The focus today remains on new products and technologies which we feel are big contributors to both our existing product and technology and also, you know, expanding the market for ourselves, especially going into process industry or going into more value-add components that we are seeing a demand for in the market and currently, let's say there's no other or any other vendor who's kind of creating that that kind of product in the market. So that that remains the strategic focus. I'll just hand over to Anish to add some more points.

Hi, Anish here. Regarding capital allocation and need for capital, for up to with our recent IPO and the funds we have, we don't see any need to raise any equity for a at least couple of years or at least we are at least double the top line that we have today and we are adequately funded. So

in terms of ROE or investor's return, I think we will not ask for any more capital if that answers.

Thank you. We have the next question from the line of Agam Shah, an Individual Investor.

Hi sir. Can you briefly - I mean you explained, commented, but can you explain in detail I mean what is happening? Why is the execution lagging since last two quarters? And you've cut the guidance for this year's growth also. So, I mean, where is it that we are lagging? So, I mean, it's quite a long that the execution has somehow been not happening and the order book and the opportunity size is too huge?

Yes, thank you, Agam. Agam, I think, you know, there are a couple of things that have happened this year. I think last quarter we had talked about the Kenya project which had got revised to an FY27 year because of some internal aspects at the client's end. We've seen some similar kind of project delays that have taken place with a couple of our key clients.

Also, one of our projects which was being implemented by a leasing company had some land acquisition delays. So there too we missed one quarter's, let's say execution what should have been done in Q3 is now looking to be a Q4 come Q1 sort of a number and that was also one of our larger projects in this financial year.

So yes, there has been some slippage in terms of execution, but there have been factors which have kind of been beyond our control as well. We are currently in the midst of an SAP implementation - re-implementation because obviously the company is realigning, so that is creating some challenges in being able to catch up with execution in Q4.

So that is the main reason why we're kind of lowering the guidance for this year because given that we had a flat Q3 and the Q4 while being on track would only be able to help us reach our revenue target of INR600 crores. So that's really been the hit. I think long term with the aspects that we're putting into place for our long-term growth in terms of our team building, the project teams have come into place with the new products as well, we have teams in place. So I think it's reflecting that over the next couple of quarters these things will stabilize and execution will be back on track, but Yes, there is a minor hit in this financial year because of this.

Hello. Considering the two hits which happened this quarter, so I mean, I am talking in terms of a longer term, so what are we doing? I mean, let's say some other hit might happen next quarter, something else might come up. So what is the strategy out here or what is the thought process?

Have you thought anything, I mean, how to tackle these things?

Yes, sir. So I think in recognizing the fact obviously that the growth has to be sustained. So what we are seeing is a couple of things. First and foremost, more importantly we are seeing a stronger order book with a bigger focus on Q1 and Q2 and that's what we are, if you look at the current order book and we can probably separately talk granularly as well to look at how the current order book is in fact going to transform into quarter 1 and quarter 2 deliveries.

And secondly is more of the product diversification wherein we are going to be bringing in revenues not only from the core ZLD segment, so these are two sections which should help things improve going forward, sir.

And on the new product which you have launched, can we expect commercialization and revenue from next quarter on the Q1 onwards?

Yes, we expect the ramp up of orders to start in we are starting to receive orders in this in Q4 which will be for deliveries in Q1 FY27.

Okay. And any big projects which you're working on for the solar or the semiconductor space?

Any big orders or anything which you have built for and can commercialize?

Yes, sir, as we mentioned earlier, we are in as we are negotiating final negotiation stages with one of the largest players in this space. This is going to be a more Brownfield kind of a play, but it is a significantly large one. Along with that, we are also in the final stages for a large steel and other metals and mining zero liquid discharge. So as Prerak mentioned earlier from a ramp up to larger project sizes, there has been quite a successful traction there and if all goes well, we hope that we'll be able to announce some good news very soon.

What is the timeline for this? So I mean, when we will come to know whether we are winning the order or no or whatever it is? It should be in the next six weeks, sir. Next six weeks? Yes. Okay. Thank you.

Thank you. We have the next question from the line of Maulik Patel from Equirus Securities.

Yes, hi. Thanks for the opportunity. So I understand that we have some slippages in that Kenya order and one more order which led to this muted execution in the Q3 and Q2. But if I look at the gross margin, it has dipped significantly over the last year and if I look at, if I just go back to one year before that, we used to have around some 47% kind of a gross margin two-three years back. Now we are about 37, 38%. So what’s leading to this kind of big dip in the margin?

Hi Maulik. Sorry, Maulik, I'm not able to see the numbers that you're reflecting because I think our gross margins have been pretty consistently stable. I think we've been fluctuating between the 48% to 51%, that's where the band has been over the last couple, I mean, I would say couple of years in fact. So right now, I think if you look at Q3, our gross margin is 49% and if you look at Q2 it was 50%. So I hope you're calculating.

Okay. So I consider service charge as a part of the cost only because it's linked to that. So in that and if okay, if look at from that perspective, Yes, so if I remove the service charge, we used to have close to around 53% gross margin in 3Q FY24, which was close to around 60% in 3Q FY25, right? And last year this quarter it's close to around 49% or so. I mean that number, 50% or so. So why there is an a dip in that number?

Okay. No, I mean see, honestly from a business perspective, we haven't really seen any big change in margins or services because I think see right now if you look at the O&M business it's kind of been at the let's say, I mean, from an overall percentage of overall turnover right now the O&M is probably higher.

So therefore the service charges are higher. But yes, on the project execution side the exports which are generally a slightly higher gross margin product have been lower. We have some export projects which will go out in Q4 as well. So that will probably set right some of the numbers in terms of consumption.

But overall on a on a granular level across the board for the organization, we're not seeing any change in gross margins. What we have done over the last quarter is we have brought in the teams which are looking at implementation of the new heat exchanger business, the CBG business, those teams are strengthened.

So in fact the major hit that we're seeing this year is because of the higher employee costs that that have arisen because of this. Now part of that will obviously come from the growth, I mean, the turnover to EBITDA will come once the growth from these divisions starts to scale up. But otherwise, I mean, on an overall water wastewater business perspective, I think we're seeing margins to be pretty similar to what they have been.

So in your assessment for the last when if I look at that first nine months we have not seen any growth. We're still expecting to do the same kind of revenue which was last year of around INR600 crores. That implies close to around INR250 crores of top line in Q4. How confident of you are? Because see, what's happening is that every quarter, we started the year with some around 18%, 20% number, then we came down to 12% growth number.

Now we are talking about another flattish number kind of a growth. Every quarter there has been a downward revision in the guidance, that's number one. And second is this guidance versus given that this financial year is very, very flattish number and you've seen that slippage of the order to the next financial year, next financial year can be very, very big number. Are we looking at the 30%, 40% kind of a growth because of the slippage of this FY26 projects to the FY27?

Maulik, I would probably not be able to comment on that completely right now, but I mean see, Yes, the orders are not gone away, the orders have just been delayed to FY27. So we have to look at execution, we have to look at a lot of other internal requirements while doing that.

While yes, in principle that should translate, especially we have seen good order traction in the last quarter. So if you see the order book we have replaced more than what we have supplied in the last quarter. So we continue to see that in fact even in this quarter our expectation is that our order book will exceed.

So given that execution challenges are there in the business with respect to certain contracts do move depending on what the client's requirement is, we have a lot of sites where civil works are not completed. So therefore clients are delayed deliveries. So these things do keep happening as projects keep getting executed.

So I think that risk will remain with us, but Yes, I mean, a lot of the orders which we are talking about are translating into revenue in FY27. So that should kind of add up numbers. Now whether that translates into a 30%., 40% growth, I I would refrain from committing on that right now. Sure, great. Thank you.

Thank you. We have the next question from the line of Soniya Varnekar from Dalal and Broacha PMS. Please go ahead.

Hello, thank you for the opportunity. So last quarter in the con call you had revised your EBITDA margin guidance from 16% to 17% to 15% to 16%. Now considering Q3's performance, do you think for full year we'll be able to deliver at 15% to 16% EBITDA margin?

No, Soniya, hi. Soniya, so there will be an impact because of the lower revenue, there will be an impact in terms of the EBITDA. I think given the higher employee cost and everything, I think that's almost we're looking at a 2% to 3% impact there. So yes, I mean it would kind of go down.

We're looking at anywhere between 10% to 12% at the current moment.

Okay. And the thing what you were discussing that these orders which were impacted, there is likely chance that it will come in FY27. So from FY27 perspective, will your margin come back to the same trajectory, this 15%, 16% or 17% in that range we'll be able to achieve that?

Yes, see that's the target. I think given that couple of the products that we've been working on over the last 12 months, 18 months are now at commercialization stage. So obviously a lot of the investment that has gone in there in developing products, trial and testing them, obviously all of that will also kind of go away and start translating into margins. So our target EBITDA does remain between the 14% to 16% band for next year. Okay. Thank you, sir.

Thank you. We have the next question from the line of Balasubramanian from Arihant Capital.

Good morning, sir. Thank you so much for the opportunities. Sir, our 7.5 ton per day CO2 capture pilot is slated for H2 FY27. Sir, I'm trying to understand cost competitiveness and penalties in this side. The government penalty for non-compliance is set at 2x of the average carbon credit price?

I'm trying to understand what is the estimated levelized cost of capture per ton of CO2 using your biological system? And obviously it should be below the penalty rate for that cost. I'm trying to understand what is the difference between the penalty rate and the cost of using our biological system. So I'm trying to understand how this is scalable in future?

Yes, hi Mr. Balasubramanian. Good morning. So yes, I think maybe we can share some information separately with you on the details of the cost. But largely speaking, there are two or three points which I'd like to highlight to you. One is the biological carbon capture systems tend to be more capital efficient than the chemical capture systems.

So there is a significant advantage in the biological carbon capture kind of technology with heat recovery that we provide. On the cost versus the let's say the penalty for not meeting the targets, it's a function largely of the scale of the projects and this is something which I guess we will have a little bit more clarity once we are through with the pilots.

We are developing models for the larger scale projects as well. And the third thing which I'd like to draw your attention to is that I think we are seeing interest across the sector which is not only driven by the penalty for not matching, which is only let's say limited to a set of sectors today.

But we are also seeing that there is genuine demand from switching over to being becoming green, becoming carbon neutral from a customer driven focus which we see in textiles and pharmaceuticals from export driven industries where selling to the EU. for example, there is there is not necessarily a government set target in the Indian marketplace which is driving demand there. So there are a lot of factors, but we'll certainly reach out to you and share more information on the scale up and the cost economics.

Balasubramanian, does that answer your question?

Yes, madam. Sir, my next question on the nuclear side, we have seen lots of nuclear orders awarded to players in the industry. I'm trying to understand like what is the margin profile in our core area for especially in the nuclear specific? And secondly, if you could touch upon green hydrogen side and especially what's the total addressable market share especially in electrolyzer cooling loop or the feed water for the hydrogen model side.

Yes, sorry. To the first part of your question is, what was sorry could you please repeat the first part?

So first part like especially in the nuclear side, nuclear grade desalination required a specific safety and quality certifications. That's the first thing, whether we have all the certification in place and whether we can able to participate all the nuclear related contracts. And what is the margin profile in those nuclear areas? The margin profile is lower or higher because of stringent compliance cost.

Yes, what we are seeing on the nuclear side is we have projects and in fact orders which are currently in the in under execution. So the margin profile we are seeing is quite in the range of the regular margin. This remains a significantly competitive space here, sir.

Okay sir. And the second part on the green hydrogen side, I'm trying to understand what is the total addressable market size for electrolyzer cooling loop and the feed water for the hydrogen models. And what are the opportunity size for our forte area?

Yes, as you have probably seen over the last few years, this has been, I mean there are several reports and numbers on the TAM in this in this segment. But we have seen significant lag in terms of execution when projects being announced and actually kicking off ground. So my sense is that there is a significant difference on this and projects are moving slowly.

Okay, sir. So my last question I think we have entered into solar PV wastewater and steel and semiconductor water treatment side. On the solar PV side what is the contract value and if you could share further pipeline or opportunity side. You can also share some details detail support semiconductor because we have seen lot of fabrication plants are coming up like Micron, CG Power. I'm just trying to understand like what kind of inquiry pipelines we have on steel, semiconductor, and solar PV wastewater side?

Yes, sorry, did you mention steel as well, sir? Yes, sir. Waste pickle liquor system?

Yes, that's right. So I think if you look at the whole steel, solar, semiconductor, the pipeline would probably be worth of INR800 crores at the current moment, which is what I would call kind of the active or the very active pipeline. On the on the steel side, it's a lot of wastewater zero liquid discharge, it's a lot of waste pickle liquor recovery which, the industry spend a lot of money on external disposal.

On the solar side, we have some great solutions for dealing with the concentrated alkali and concentrated acid streams which is really an hazardous waste where the industry spends a lot of money again in in really external disposal of these waste streams, which we are today able to conveniently offer a low cost green ZLD type of modules to them. So between both the steel semiconductor and solar markets there's considerable traction. Okay, thank you, sir.

Thank you. We will take the next question from the line of Dheeraj Ram from B&K securities.

Hi, sir. Thank you for taking up my question. So just circling back to the previous participant's question, what is giving the guidance of INR600 crores maintaining for FY '26 while in last call you'd committed that some of our orders are in finalization of completion which is expected to give us the boost of top line in margins, which hasn't happened so far. So what is giving the confidence to maintain it at INR600 crores for FY '26?

Hi Dheeraj. Dheeraj, these orders are currently firmed up, in fact, I mean we're midway through our quarter, so a lot of this is also supplied. So, right now we're not banking on any new orders.

This is basically all orders in hand which we are executing through to 31st of March.

So Yes, the INR600 crores number should not go astray. We have a couple of discussions ongoing with respect to deliveries for the deferred projects. So they could go either ways; we're still obviously hoping for the best, but I think as a conservative practice we're giving a guidance which we know is again, we're going to try and meet.

Okay. And second one is your order inflow guidance in Q1 you've guided for INR600 crores to INR700 crores of order inflow, and even order inflow has also remained a little below your guidance. What order book do you want to close by the end of FY '26 so that we can look up to FY '27?

Yes, Dheeraj. So I think see Dheeraj we have, I mean roughly about INR300-odd crores is revenue that is coming from the after-sales business, right? That's the O&M and the spares and consumables. So I mean, leaving that aside, I mean ideally we would like to our target is always to get to at least 1x coverage.

Right now if you look at the current order book that we have, we are at about 60% coverage of let's say a 20%-25% growth target for FY '27 if we set that, then we are at about 60% of that. So Yes, we're looking for anywhere between order intake of about INR160 crores to INR180 crores in this quarter. Obviously as Prayas mentioned, we're six weeks away from a large order discussion, so I think that is something that will shape up our order book.

But given the three or four large projects that we have currently in pipeline we're bidding for that, I think if we do not win something which is imminent in the in this quarter we'll probably close out a couple of the larger projects in by Q1 of FY '27, so that should kind of give us a 1x coverage if not by 31st March, at least by 30th June for FY '27.

Okay, just last question sir. So the orders that you have seen for the delay in this financial year, since these has rolled forward to FY '27, what is the kind of margins that you're expecting? Do we still have any margin dilutive orders in the order book apart from those few orders which got delayed?

I mean see, they're not margin dilutive; it's more like the shift has happened, so delivery and top line will get booked in the next year. But I think, if you look at our current order book, the mix of orders that we have are pretty healthy. It's quite regular for our business. So, if you ignore the increase in manpower cost that we've seen this year, slight increase in expenses, I wouldn't say our gross margins are really moving too much, they're pretty much in the same band.

So it's just the translation to EBITDA because of some of these expenses that is going to be a little bit margin negative, so as I said, we are targeting between 10% to 12% EBITDA for this financial year, which is lower than the 14% that we had, but that's purely a hit because of the lower absorption of fixed overheads to the top line that we are now projecting.

Okay, okay. Just last question, I'll come back in the queue. Since you're talking about some large orders, previously we've seen working capital getting affected due to some large orders from Diageo. Now again you're talking about some large orders, so do we see an increase from current levels of working capital next year or how do we have to see these?

Hi, Anish here. Yes, Diageo, there was working capital which got there, the project is already executed, so that working capital will be allocated in these projects, so there will not be any increase. Now these projects are little smaller in chunks than what Diageo as a single project was. We don't see any increase in working capital, rather there will be some 5% to 10% reduction only.

Got it, any target of working capital days that you want to have sir for FY '27?

It will be in the same range. Today on a net-net working capital, we are close to 127 days; we will be closer to 120-125 days while we'll attempt to reduce the days even more. Thank you. Okay, got it. Thank you.

Thank you. We have the next question from the line of Siddhartha Biyanee, an Individual Investor. Please go ahead.

Just wanted to understand that last quarter you had guided that, there were a couple of CBG projects that you are looking at for an execution perspective starting Q3. Just wanted to get an update on that and how are you looking at the overall landscape, because we are seeing that, you know, there have been a lot of CBG plants that are getting implemented under the SATAT scheme. Just wanted some thoughts from you on that?

Yes, hi. Yes, so the current kind of projects that we have we've started execution in Q3 and I think we will complete most of it by Q1 end of Q1 from the current order book standpoint. We are seeing good inquiry traction as well. There are from standalone operators to larger kind of more consolidated players who are looking for, good technology, low captive energy consumption and reliability in terms of operation. So we have several active conversations ongoing with again the industry, with customers. We definitely see this to be interesting for FY '27.

Okay, sure sir. And just one more follow up, there was I think in the last earnings call you had, informed us about a desalination project where you were sort of shortlisted as the L1 for that entire project. Any updates on that project, if it is going forward or not?

Yes, that's converted to an order. It's in our order book this this quarter. Okay, great. Thank you so much, sir.

Thank you. As there are no further questions from the participants, that concludes the question and answer session. I now hand the conference back to the management for closing comments. Thank you and over to you, sir.

All right, thank you everyone for your time. We look forward to speaking to you in the next quarter. Thank you.

Thank you members of the management. On behalf of Concord Enviro Systems Limited, that concludes this conference. Thank you for joining us today, and you may now disconnect your lines.