Prostarm Info Systems Ltd

Ladies and gentlemen, good day and welcome to the Prostarm Info Systems Limited Q3 and nine month FY’2026 Earnings Conference Call hosted by Valorem Advisors. 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 “*” then “0” on your touchtone phone. Please note that this conference is being recorded.

I now hand the conference over to Ms. Purvangi Jain from Valorem Advisors. Thank you and over to you, ma'am.

Good afternoon everyone and a warm welcome to you all. My name is Purvangi Jain from Valorem Advisors. We represent the investor relations of Prostarm Info Systems Limited. On behalf of the company, I would like to thank you all for participating in the company's earnings conference call for the third quarter and nine months ended of the financial year 2026.

Before we begin, let me mention a short cautionary statement. Some of the statements made in today's earnings call may be forward-looking in nature. Such forward-looking statements are subject to risk and uncertainties which could cause actual results to differ from those anticipated. Such statements are based on management's belief as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decision. The purpose of today's earnings call is probably to educate and bring awareness about the company's fundamental business and financial quarter under review.

Now let me introduce you to the management participating with us in today's earnings call and hand it over to them for their opening remarks. We have with us Mr. Ram Agarwal - Chief Executive Officer and Whole-Time Director and Mr. Abhishek Jain - Chief Financial Officer.

Without any delay, I request Mr. Ram Agarwal to start with his opening remarks. Thank you and over to you, sir.

Good afternoon to everyone and a warm welcome to all of you for joining our first ever earnings conference call for the third quarter and nine months of the financial year 2026. For some of you who may not be familiar with the company, let me begin by giving you a brief

Page 2 of 23 overview of the company. After that, our CFO will take you through the financial and operational performance of the period under review.

Prostarm Info Systems Limited was established in 2008 with the objective of becoming a power electronics solution provider. Over the years, we have evolved from being a specialized equipment supplier into a comprehensive power solutions company with strong manufacturing and service capabilities. Today, we focus on designing, manufacturing, assembling, and servicing energy storage and other power conditioning equipments. Our product portfolio includes UPS systems, solar hybrid inverters, lithium-ion battery packs, servo- controlled voltage stabilizers, isolation transformers, battery energy storage systems, and other customized power solution products. In addition to our manufactured products, we also execute solar EPC, end-user computing solutions, and provide value-added services such as installation, annual maintenance contracts, and rental solutions. We cater to a diversified customer base, including government departments, public sector undertakings, utilities, railways, infrastructure companies, healthcare institutions, BFSI, and industrial enterprises.

Our ability to provide reliable and customized power solutions has enabled us to build long- term relationships and establish strong credibility in the market. To support this growth and to support this growing customer base and strengthen our execution capabilities, we have continuously expanded and upgraded our manufacturing infrastructure. As part of strengthening our manufacturing footprint, we currently operate three manufacturing facilities. Three of these facilities are fully operational and commercialized, including two units in Pune focused on UPS systems and related power conditioning products, and the lithium-ion battery pack facility in New Mumbai. In addition, we are doing CAPEX of two more facilities that will significantly enhance our capabilities. We are adding a 1.2 gigawatt, our best manufacturing facility in Jhajjar, Haryana, which is nearing commissioning and is expected to be operational in Q4, financial year’26. We also have initiated an expansion in Bakrol in Ahmedabad, Gujarat, for manufacturing UPS systems ranging from 1KV to 600KVA, which is expected to become operational by Q1 next financial year. This expansion plan positions us well to cater to increased demand for advanced energy storage and power solutions. In parallel, we are currently in the initial phase of launching lithium-based batch solutions for the commercial and industrial segment, and are working towards introducing a comprehensive range of home energy storage solutions. Additionally, we have introduced QR codes on our products to improve traceability, service responsiveness, and overall customer satisfaction. We are also implementing SAP B1 and Salesforce systems to strengthen internal controls, improve operational efficiency, and enhance customer relationship management.

With this brief overview, I would request our CFO – Mr. Abhishek Jain, to share the financials for the quarter and nine months. Over to you, Abhishek.

Thank you, Ram ji, and good afternoon, everyone. Let me take you through the financials and operational highlights for the third quarter and nine months ended of financial year 2026.

Page 3 of 23 Operating revenue for the quarter stood at INR 161 crores, representing a growth of 110% year-on-year and 141% sequentially. The strong sequentially growth was driven by execution of large scale orders during the quarter. EBITDA for the quarter stood at approximately INR 20 crores, reflecting a year-on-year growth of about 81%, with an EBITDA margin of 12.65%. Profit after tax stood at approximately INR 15 crores, representing a growth of nearly 101% year-on- year. PAT margin for the quarter was 9.28%. While margin moderated compared to the previous quarter, this was primarily attributable to the margin profile of specific projects executed during the period. Given the project-based nature of our business, margin may vary depending on execution mix and timing of revenue recognition. However, as revenue scaled up, we witnessed operating leverage benefits and margin to become more sustainable.

For the nine month period, the operating revenue stood at INR 281 crores, reflecting a growth of approximately 5% year-on-year. EBITDA stood at approximately INR 35 crores, representing a growth of about 3% year-on-year, with an EBITDA margin of 12.55%. Profit after tax stood at around INR 25 crores, showing a growth of approximately 13% year-on-year. PAT margin for the period was approximately 8.89%.

Page 4 of 23 Overall, the quarter reflects steady execution, strengthening of our operational foundation and continued progress in capacity expansion and capability enhancement. We continue to maintain disciplined working capital management aligned with project execution cycles.

With that, I now open the floor for a question and answer session. Thank you.

Thank you very much. We will now begin the question and answer session. The first question is from the line of Paras Chheda from Purple One Vertex Ventures. Please go ahead.

Hello, sir. Thank you for this opportunity and congratulations for a great set of results. Just a couple of queries. One is on EBITDA margin, you said this was project-specific. Going forward, what kind of EBITDA margins can we expect? Can we expect those margins to revert back to 13%, 14% or it will be sort of project-specific? That is question one.

Thank you so much for your question. The EBITDA margin, if you see our earlier trend as well, it has been the mix of various revenue and the margin that we built up across the project. On an overall basis, you would find the margin to be in the range of 12% to 15% as earlier.

So, it will probably revert back to that region of, let us say, 14% to 15% response. Yes.

Understood sir. Sir, out of the current order book, what percentage is expected to be executed in FY’26 versus FY’27?

The total order book that we have, this would have a pipeline of around from current quarter to up to 18 months time horizon. So, if you take roughly out of this, roughly around 20% would be executed in the current financial year.

Okay sir. And a large part of that in FY’27?

And a large part of it in FY’27 and going forward. Yes.

Right. So, in terms of just general revenue guidance, for FY’26, my understanding was about Rs. 430 crores or somewhere in that region. So, what guidance would you put for FY’26 and FY’27 generally?

Page 5 of 23 Right. And for FY’27, a similar trajectory can be sort of Yes. Which I have answered through your point, through your first question, which was Sir, just going forward, one more question. I mean, what portion of our BESS revenue is expected from the manufacturing versus the EPC and integration activities? And when do you see that meaningful revenue contribution from the BESS? It will be in FY’27?

Yes, it would be a meaningful contribution from BESS. Right now, our factory, we are putting up a factory in Jhajjar, which you must be aware, and that is expected to be operational by the end of this financial year. So, that factory has the capability to give me a contribution of around 40%. I mean, if I look at the capacity utilization of around 40%, 45% in next financial year that should give me a good amount of contribution from BESS segment.

Understood And most of our revenues in BESS will be from the manufacturing or the OEM supply?

This is what our target segment is. We do not want to work more like a developer, but want to be in this segment as an OEM or a EPC player.

If I recall correctly, one of those EPC projects you are looking to sell down, I guess.

We are focusing on that. But right now, I would not be able to comment on that completely.

But yes, we are targeting. Let the time be the essence for it, how it gets executed.

Right sir. And sir, last query of mine, in terms of receivable days, now the execution has, of course, gone up in Q3. So, you know, sir, what are the receivable days and working capital cycle as of now looking like?

Working capital cycle currently for me would be around 150 plus days because of the Debtors being towards last month. I mean, as you know, we always have the revenue booking done on the last month of the quarter. And big chunk of revenue has come up in the month of December. So, but this will be always cyclical depending upon the order that we execute. The Debtors cycle would go up or go down based on the order that we execute on a timeframe and a timeline to be looked into.

Sir, average receivable days would be in what region?

This is what average receivable days currently would be. I am just still working on it. It would be something around roughly 190 days. Okay. I understood.

Page 6 of 23 This is again, it is because of the factor of the Debtors, huge Debtors being booked up. I have booked up around Rs. 160 crore of revenue in the, in Quarter 3. So, you can very well imagine if Rs. 160 crore of revenue, which is without GST, that itself is a big chunk of Debtors which comes up on my books.

But by the time we exit the year, FY’26, broadly the receivable days will come down.

This would come down. Aging would definitely come down. Right. Okay. Thank you so much, sir.

Thank you. The next question is from the line of Aniket Madhwani from Step Trade Capital. Please go ahead. Yes. Hi, sir. Am I audible? Hi. Yes, sir. You are.

Yes. I just want the bifurcation of the order book. I mean, how much amount of orders have you received from BESS and how much order is under bid pipeline?

Currently, bid, I told already that bid under evaluation is around Rs. 750 plus crore. And in terms of the order that we have right now, Rs. 890 plus crores is under the BESS segment.

And what conversion rate should we expect for the bid pipeline Out of BESS of around Rs. 890 crores, Rs. 43 crores would be booked in the current financial year.

I am just asking for the bid under consideration. Rs. 750 crores, you are referring to bid right?

Yes, that is under bid under evaluation. The strike rate should be around 20%. 20%. Yes.

Okay. Currently, if we bifurcate your revenue in this quarter, how much amount have you achieved from BESS segment and other segments?

Okay. As of now, till December, we have not achieved any revenue from BESS. Total around Rs. 40 crores would be booked in the quarter four from BESS project.

Page 7 of 23 Okay. And lastly, talking about your capacity. So, what is your current capacity under? I mean, how much is it operational and what are you planning to expand?

Okay. And so, your total capacity for BESS will be 1.4 gigawatt, right?

See, 1.2 gigawatt is our single shift. If we go for two shifts, it will be, immediately, it can be 2.4 gigawatt or 2.5 gigawatt of plant for the two shifts.

All right. And you are expecting around 40% to 50% of utilization in the next financial year?

Next financial year, we are very hopeful because some policies likely to come from the government of India, where we are making a mandatory 50% Make In India for all tenders published from 1st April. So, ministry is in close touch with us. Us means people like us and it is likely to come anytime. So, there will not be any pressure on the price and the margin both in competition with China. Regarding what policy?

This is just to support or protect the local manufacturers.

So, this will actually improve your margins, I guess.

Definitely, it will improve the margin and the business overall. Definitely.

Okay. So, going forward, do you see to be in range of 12% to 15% only or you are being conservative right now?

Let us be conservative and practical. We are always hoping for better. Things are on very improvement side only. All this will help us further but we cannot say anything and we would like to maintain the conservative side or minimum side of 12% to 14% or 14% to 15%. Okay. Got it. Okay. Thank you.

Thank you. The next question is from the line of Deepak Poddar from Sapphire Capital. Please

Page 8 of 23 Yes. Am I audible, sir? Yes. You are audible.

Thank you very much for this opportunity. I just wanted to understand this 1.2 gigawatt capacity in BESS is coming by this fourth quarter, right? Yes.

And what is the CAPEX involved and what can be the revenue potential of this at optimum utilization?

Okay. See, CAPEX involved is a direct Rs. 25 crore and rest is a working capital. And our commercial process should start from Q1. And next financial year, we are hoping and targeting to use 40% to 50% of our production capability. So, like we are targeting 500 to 600 per megawatt.

That I heard. I mean, you mentioned that. I was just wanting to understand that at optimum utilization of this, what can be the revenue potential? I mean, per megawatt, what would be the revenue potential?

As per today's calculation, it should be Rs. 1000 crores to Rs. 1200 crores if it is fully utilized.

Rs. 1000 crores to Rs. 1200 crores revenue potential, right? At optimum. Correct. Correct.

So, ideally, I mean, at only a Rs. 25 crores CAPEX, we can have a potential of Rs. 1000 crores to Rs. 1200 crores revenue, right?

Because here we are doing the rest of assembling and manufacturing. The main product that is the core, the main raw material that is lithium cell is coming from third party. Today from China, tomorrow may be from local other party. So, that becomes a major raw material for the whole batch. And Rs. 25 crores is the only plant, assembly plant. And rest all will be the working capital.

Okay. So, mainly we are doing assembly, right? I mean, this plant that is Actually, electronics, assembly and manufacturing has a very, very single, minor difference between assembly and manufacturing, particularly in our industry, electronics.

Okay. And the main product, lithium cell is coming from China. That is what you mentioned, right?

Page 9 of 23 As of today, coming from China, but so many developments are happening. So, I am very hopeful that this current calendar year end, something should start within India.

Okay. And what can be the margin profile here in this segment?

As a manufacturer, we should expect the minimum margin in overall. And as the policy is likely to come in our favor from 1st April. So, we are very hopeful that we will maintain minimum conservative 15%, 14% to 15% EBITDA. And we are hoping it will be, it can be better on the, maybe the situation for the next financial year, we are hoping. But this is a conservative and minimum side.

Okay. So, minimum 14%, 15% EBITDA margin one can expect from BESS right? Yes. We are hoping to get So, return on investment is very high, right? I mean, only with Rs. 25 crores CAPEX at full utilization, you can do Rs. 140 crores, Rs. 150 crores of EBITDA.

Yes, this you can take it up. See, actually, what assembling line, what Ram ji told, this assembling is not a standard assembling. You have to be from a power, we are from power electronic space. So, we understand to some extent, and we already been doing lithium for last five years on a smaller capacity. So, we understand nuances, it is electronic, which require augmentation, calibration, then how to maintain the temperature. Also, there would be a demography challenge. All those things would be there when you are executing it. So, it is not a very, very vanilla category product. So, assembling, as you heard, but it is a customized assembling.

Correct. But given the kind of return this segment is offering and do not we expect any competition will catch up and ideally our EBITDA margin will go down in the medium term. So, any comment on that?

See, if you look at it here, there can be few players, there can be more players coming into it.

There can be. And we have not, market size is very, very big. And if you look at the capacity that what we have right now, the market access is too big to handle. And with the things coming up for Make In India, you would find that margin should be stable for Indian players. So, I do not see it as of now, unless there is something other on the regulatory side.

Okay. Understood and in terms of growth next year, you mentioned the base business will grow at about 20%, 25% and the BESS will be over and above that. Is that the right understanding? I mean, 40%, 50% out of Rs. 1000 crores will be Rs. 400 crores, Rs. 500 crores additional revenue from BESS and the base business will grow at 20%. Would that be right understanding?

Yes, not exactly to mention it. But yes, we will be targeting to have such revenue occurrence.

Page 10 of 23 Okay. That is it from my side. Wish you all the best. Thank you. Thank you so much.

Thank you. The next question is on the line of Nitin Babulal Gandhi from Inoquest Advisors. Please go ahead.

Yes, thanks for taking my question. Can you share the working capital like expected in BESS business?

Yes, see, what I am targeting around 40%, 50% of capacity utilization in our BESS factory. So, on a full year basis, the requirement should be around Rs. 200 crores. However, since we are focusing more towards the EPC side, that would help us to have a better working capital management. Because generally, there is no too much of credit engaged when you do as a manufacturer or as like an EPC player.

So, basically Rs. 200 crore working capital for Rs. 500 crores of revenue. Right.

And can you share some more thoughts on this Ahmedabad unit, which you are likely to commission Q1 FY’27, what is CAPEX and how is the revenue profile of that?

See, for Ahmedabad project, we are putting a CAPEX of around Rs. 6 crores. And this is mainly a strategic call for focusing mainly on UPS, which is our core main product, and to totally come out of dependence on China. Because today we are bringing complete UPS also from China, which we want to come out of it. So, we are coming, we have set up this facility only for UPS, not for any other product. And to target the next financial year end, we will come out of stock, bringing the complete UPS from China. This is our target. It is not commitment, but it is our target.

How much is current year end import? FY’26, nine months, how much is the import? 13% is our import contribution. 13% of 281, so approximately 35 crores? Yes.

Okay. And what will be the capacity to produce at Ahmedabad unit?

Ahmedabad unit, it cannot be said in terms of capacity, because the small capacity, 1 KV, it can be in thousands. A bigger capacity, 500 KV, it will be in hundreds. So, overall, there can be a

Page 11 of 23 minimum daily capacity, it can be 3,000 to 5,000 units per day. There is a capacity we can do.

A small capacity number will be high, big capacity number will be small. So, it is difficult to say in terms of capacity, like gigawatt hour in terms of BESS.

Okay. So, 1 KVA to 6 KVA, 3,000 to 5,000 units?

Single phase, 1 KV to 10 KV, we can target around 3,000 to 5,000 units per month. Okay. Thank you very much.

Thank you. The next question is from the line of Darshil Jha from Nirvana Capital. Please go ahead.

Hi. Good afternoon. How are you, Abhishek ji?

Good afternoon. Everything is fine. How are you, sir?

Good. My question was on the BESS side. So, currently, whatever order book we have up around Rs. 900 crores. So, that is mainly on built-on operator, right? That is not on the EPC side?

Mainly, yes. Out of which, Rs. 40 crores is on EPC model and remaining two are on the rental model.

Okay. So, Abhishek ji, how much CAPEX will be used in that particular built-on operator model, I understand that our initial thought process is to kind of make our name here and then probably majority of the projects will take into EPC only. So, this is just a trial which we are doing in built-on operator model. So, how much money would we need to put in to set up this facility?

If we do the complete project, the funding requirement would be around Rs. 400 crores to Rs. 450 crores, if we do the complete project on a boot-or-boo model. However, we are also looking for some other alternates which is to be discussed, which I cannot, It is still on the card and on the drawing board where we are in discussion for some other nature of business for these two projects as these two projects have been taken at a very, very good rental and at a viability gap funding of Rs. 27 lakhs as against Rs. 18 lakhs. So, overall commercials are better for both the projects.

Got it. So, I mean, would we need to raise funds for this exhibition or we are looking for some other modes through that we will not be looking to raise funds for this particular project?

Yes, we are open on both the sides. It can be and it cannot be because we are also exploring other options which we would come and tell you at the right time. And here, even these

Page 12 of 23 projects are backed by LC and it is backed by LC from DISCOMS, unconditional. And if they delayed payment, then there is a penal liability of 5% over the SBI benchmark rate. But that is one side of it. But other side is that we are also looking for some other venues which we are exploring aggressively.

Got it. And the revenue recognition would be the EPC, I mean what we will be doing for these projects? Yes. Yes, exactly.

Okay. And secondly, on the base business, you know, our order book currently is roughly around maybe Rs. 80 crore, if I exclude the BESS part. So, in that Rs. 750 odd crore, which is the bidding pipeline, I assume that that majority is for the base business, not the BESS, right?

Sir, for your information, since last six months, we have not bidded for any of the BESS projects.

We are waiting for market to settle in that, as you must be aware. So, we have not bidded for any of the BESS projects, considering the current tariff, what is going on. We are sitting on a good order on BESS, which is there on my books, with a very, very handsome margin. Rs. 750 crores are all from non-BESS segment, mean our core product. Traditional business. Traditional. Yes. Traditional business.

Okay. Got it. And we do expect for full year, this traditional business year-on-year would We are looking for at least 20% conversion out of it from this segment. And one thing I just need to give you as a highlight that always remember in our core product category, any order that we win, the timeline for executing those projects is very small. It is generally from three months to six months timeline. Correct.

So, the conversion ratio is very, very fast. Got it. Yes.

And sir, lastly on, Ram ji, you said that the policy which will come from 1st April, where 50% domestic content would be required for any BESS tenders coming from the government. So, you said it will be beneficial for companies like us. So, can you little bit highlight like how it will be beneficial for us? As per, I mean in comparison.

Page 13 of 23 Because anybody, because our, when we go for local manufacturing, definitely we may be little, price wise, little less competitive from China. But as we are going to be a hindrance or entry barrier for China to come directly in the market. So, price level will go up and the minimum sales level and minimum business will be there for all the manufacturers. And as the market size is so big, like even 10 or 20 more manufacturers will come, there is space for everybody.

So, both in terms of quantity and in terms of quality, both will be taken care by research support. If you go into solar, solar also government has put 40% duty and now they have come up with ALMM, everything. So, very soon they will come out with ALBM also to support the battery manufacturers.

Correct. So, my point was that there would be no domestic manufactured within our country.

So, what do you mean to say specifically? With this regulation coming in, the pricing will definitely go up because See, pricing, operating price has already gone up in last one month. So, it has gone to below cost level in last few months, three, four months. So, price has already started going up. But because of this entry barrier, these local manufacturers get an edge on the company who will directly import from China and supply to government or in the market. So, we always have some price edge and the entry barrier will have a upper hand on them.

Got it. Thank you, sir. I will come back in the queue. Thank you.

Thank you. The next question is on the line of Meet Mehta from Parasan Exponentials. Please Yes. Hi. Thank you for the opportunity. My question is not answered. But one question, what are the current tariff trends that you are seeing in BESS biddings? So, can you throw some light on that?

The current price, what is going in the tariff-based project, if you see, price has gone up by almost 20%. Already, it has gone up. Like for two hours, it has gone below 1.7, 1.69 or whatever.

Last one was 2.15. So, price has gone up and will further go up because there is a lot of supply chain issues from China. And as China has announced the, I think, reduction in the export incentive on BESS from 1st April. So, price will go up further. And if you see, our price is like 2.54, which is already, I can say, like highest in this segment. And with more 27 lakhs VGF. So, our numbers are very good compared to current. Even if its price goes up, still we are on very better position. But yes, price is going to go up.

Okay. Understood. And another question, is that what parts of exactly in BESS that you are manufacturing in-house? And like, what percentage? Can you throw some light on that also?

Page 14 of 23 See, there are five, six main components of the BESS. Like the lithium cell, BMS, EMS, cabinet or containers, firefighting and cooling. Out of which we are the OEM for the PCS. So, PCS and EMS too are, we are going to focus on becoming a complete OEM of these two components.

And gradually, we are tying up with the cooling company and the firefighting company. So, that we buy the component or raw material from them. And we can do in-house integration as per the requirement. Because no ready-made product or component can fit inside the BESS. All are customized. So, we will have the in-house capability to customize and to assemble as per the customer requirement. So, it is not a standard which will be requiring for every project or every site. Okay. That is helpful. Thank you.

Thank you. The next question is from Chaitanya Agarwal, an Individual Investor. Please go ahead.

Yes sir, first of all, the congratulations for the good set of numbers. And I have a question regarding the working capital for the BESS projects. Are we going for the funding part? And if we are going for the funding part, when it will be complied? And when will be the revenue will be recognized from those areas?

Yes. Funding part, as already earlier told, we are expecting 40% to 50% capacity utilization in the next financial year. So, the total, if I look on the full capacity side, the requirement would be around Rs. 200 crores for executing this project. But we are also trying to manage the working capital of it because we want to work like an EPC or like an OEM. Under this category, there is hardly any major credit being offered by the OEMs or the manufacturer. So, that would help me to calibrate the working capital requirement. So, that can be assessed completely in the next financial year as to what based on the price movement and how we can manage the pricing and the working capital part of it.

And sir, for the battery part, are we importing the batteries or like we will make the batteries on by own and then we will put it up there?

We would only be importing the lithium cell. The rest of the integration would be done at our factory. Means from cell to module, module to rack and rack to containerization. Everything would be done at our premises.

Okay. And the last part, the revenue, which will be coming from the PPA things, that will generate from FY’27 or FY’26 end? That would generate from FY’27 end. FY’27 end?

Page 15 of 23 FY’27, yes. And the project completion time?

Yes, at the project completion. The project would be completed in the next financial year. So, the earlier we execute it, the revenue would start. Though we have sufficient time to do that project. Okay, got it. Okay, sir. Thank you.

But there are other means also what we are targeting. If that is being done, the revenue recognition would happen much earlier. Okay, okay. Yes, got it, sir.

Thank you. The next question is from the line of Jigar Jani from Nuvama PCG Research. Please Hi, sir. Congratulations on the great set of results. Hi, Jigar.

Hi, sir. So, sir, just continuing on the previous participant's question on revenue recognition for this BESS project. So, what I understand from the call is there are two parts to it. One is on the EPC part and then there is a normal tariff that you would be receiving based on a monthly basis.

So, and I see you have two SPVs also set up for both these Karnataka and Bihar projects. So, can you just elaborate how this will happen? So, first we will book the EPC part in your standalone business and the normal revenue recognition will happen in the SPVs? Yes.

So, and these margins for the EPC are a separate contract apart from the order book because I believe in the order book you are just calculating based on the monthly tariff into the Yes, we have covered based on the tariff itself, only based on the tariff.

Right. So, the EPC part is a separate part of the business for these two?

Yes, because EPC would be different, separate margin and rental would be different, it says it would be deferred over multiple years. So, rental would be a different margin.

Okay. So, could we see some of these from an EPC perspective?

Page 16 of 23 Sorry, Jigar, your voice is somewhat unclear.

Yes, I was saying that from an EPC perspective, how big will be these two projects on a broad basis, the Bihar and Karnataka?

From the EPC perspective, this project cost would be something around Rs. 450 crores. If we take two of the projects together.

Okay. Okay, understood. And this rental business will be in the SPV, correct?

Yes, the rental business would be in the SPV.

And the CAPEX that you would be moving will also be, this project will be booked in the SPV, right?

Yes, otherwise, so you cannot have the tariff. It has to be part of the SPV, yes.

Correct, correct. Okay. And sir, again, circling back on the working capital, so on the working capital, Rs. 200 crores for this capacity will this again go up when you fully utilize this capacity or it should not go up substantially?

See, what I am considering as, if I use it on a full capacity, it should be around Rs. 400 crores, but Rs. 400 crores would be the lifetime requirement. So, then there would be a cycle by which what project you are executing. So, there would not be a requirement of that particular amount at any point of time. But what I am calculating is a peak on an yearly basis, on the utilization side of it. And then if we are doing an EPC based or like an OEM, then generally you do not require to offer credit. So, your realization would be better off. Right, understood.

And the advantage would be more towards private than being government.

Correct. And would we be open to selling down these projects once it is set up? 100%. If it works out, we would explore that opportunity.

Okay, understood. And sir, lastly, on the supply chain side, we were speaking to other BESS manufacturers. There seems to be some issues in terms of procuring lithium cells, etcetera. At least it was the case two, three weeks back. Are you guys also facing issues in terms of sourcing of cells?

See, it is not an issue. This is a price challenge. These are geopolitical issues. There is no increase in any raw material price or shortage of any raw material. Due to some political issues, prices

Page 17 of 23 are jacking up. And due to the policy change in China, prices will go up further. As India government is also bringing out a policy to support our manufacturers, same is happening with China. So, it is a short term disruption will always be there. But it will further stabilize the manufacturing activity in our country.

Correct, sir. But in case these cell prices go up, then the IRRs for the BO projects also kind of decrease, right?

No, but our project price is already so much on higher side. Like today, the lowest level what it has gone, we are almost 50% higher than what has gone in the market on the tariff side. So, our case are very safe and secure. And in terms of VGF also, we are Rs. 27 lakh, Rs. 18 lakh is a going VGF incentive. So, overall, we are much better space, much better and secured space.

And as we are going to, we are working on two, three options to offload this project in the market. So, where we want to remain focused as an OEM, as a technology and solution provider and not as a like a developer in the coming months or in future.

Great, sir. Great. Thank you so much for answering my questions and best of luck, sir.

Thank you. The next question is a follow up question from Chaitanya Agarwal, an individual investor. Please go ahead. Hello. Yes, hi.

Yes. Sir, as you told that you will import the cells and make the BESS system in your factory.

And for that, if we put up in the BESS project of Karnataka and Bihar, and there will be a margin in the manufacturing business as well?

See, as an OEM, definitely there will be. We are splitting these two activities into two different.

One is the OEM and EPC, what we are going to do in our parent company. And the other activity is the selling of power as a PPA, which will happen in our subsidiary. So, both this entity will have their own margin. As EPC will have our own margin, as the selling of power will have their own margin in the respective entity.

Okay, sir. And for like the PPA thing and the BESS project one, are the land and the evacuation finalized?

See, there is no land in our scope of work. We are getting free land by the respective utilities company. Secondly, they are installing this BESS inside their substations. So, virtually, evacuation of power is minimal in our case.

Page 18 of 23 Okay, got it. Got it, sir. Thank you. And the EPC and the OEM part will be generated in the Prostarm Info Systems, and the selling of PPA will be in the SPV?

Correct. And whatever, tomorrow any offloading will happen, it will happen in subsidiary, our SPV, and not in our parent company. Okay, sir. Got it.

Thank you. The next question is on the line of Ayush Jain, from Xequity Securities Advisor Services. Please go ahead.

Congratulations on good numbers. Just two, three questions on the front of cash flow position. Hello. Yes, please.

Yes, cash flow position. I just wanted to ask about cash flow position. You are on an operating cash negative, right? Right.

Right. So, when can we expect it to jump back to positive?

We are expecting that to be there from next financial year onward. Because of the project that we execute, it results into a negative cash flow. But we do it with a good margin, which you have already seen in our past and even in the current returns. So, we are focusing to make it cash positive in next financial year. It will take some time, but it will come up.

In mid of the financial year, Quarter 2, Quarter 3?

Quarter 3, around. Quarter 2, you will start seeing the effect coming in, because we would be focusing on making also our revenue more consistent. So, that would also result into a better realization instead of just getting skewed in terms of number. So, that all controls and mechanisms should help me to bring the cash flow to this position in next year from Quarter 3 onward.

Okay. Got it. And second question is about the segmental revenue breakup in this quarter. So, you are telling me you have EPC order that got fulfilled, right? You booked an EPC revenue in this quarter? No. We have not booked the EPC revenue.

Okay. So, on what account the revenue jumped so much?

Page 19 of 23 Revenue jump is because we have executed the major order under CCTNS, which was a big size order that we have taken in the month of October and which was executed in the Quarter 3 itself. Quarter 3.

Yes. You would always find when we are, it is about the timing difference what you would find in terms of getting the order. When we are getting the order, once we get the order, the execution is always very fast.

Okay. So, it is an end-user computing, I will say. The order was about end-user computing from the segment, end-user computing, right?

Yes. That is a part of our important core strategy. If you are aware that there is all digitization, smart cities, and whether it is revenue records or hospitals or your Thana or IGR or anything.

So, there is a continuous replacement and good business coming up in terms of end-user computing where we provide end-to-end solution, including delivery, supply, installation, warranty, everything has to be done by Prostarm. So, it is not like only selling one product, but it is like selling a complete solution at multiple locations for the entity.

Okay. You behave like a system integrator for those companies.

Yes. We behave like a system integrator there. It is a big value-added service for us because we are already into UPS manufacturing and all other products are to be bundled up with UPS.

Yes. That is correct. But when you go towards UPS, I just wanted to ask your Pune site, your Pune factory is not going to 80% or 90% of the capacity, right? You are not utilizing that much of capacity. You are in mid-teens, I guess, the capacity.

Yes. I would answer that. See, the Pune unit, what you are finding, there we are more focused towards the customized category product, not on the all entire regular range of product. Yes, we have a very good list of our very, very well-known manufacturers who work like a subcontractor to us. So, it is not putting the right energy to the right space. It also helps you to minimize the cost. And the project cost at which it is implemented is not very high.

So, you have put up a factory at Pune for UPS and you are telling me that you are outsourcing some parts of the components manufactured outwards?

Yes. As I already mentioned earlier as well.

Then why are you putting up the next factory in Ahmedabad?

Page 20 of 23 Now, for putting up unit in Ahmedabad is because we want to focus completely on UPS. There, in our existing setup, we also do UPS, we also do servo, we also do solar hybrid inverter or railway specialized products and other things. But in Ahmedabad, we will be completely and completely focusing on UPS, which would be ranging from 1 kV to 600 kV. So, same resources and same manpower cannot be applied. And here also, the CAPEX size is around Rs. 6 crores.

So, it would be optimization of the production capability and reduce dependence on China.

So, now tell me, what will be the effect for the Pune factory then? What value Pune factory will do to the company?

Pune factory will be totally focused on hybrid solar inverter, customized solutions and this PCS, what we are going to focus for the BESS. So, battery part will happen in Jhajjar, electronic part will happen in Pune factory. So, our regular product UPS will shift to Ahmedabad. All customized and industrial application solutions, where UPS work becomes common, but UPS special is not common, is not standard. So, we want to remain focused in all these supply as a vertical and as a strategic call, we have devoted all our regular business to Ahmedabad, so that we can have more number. And as the supply chain in Ahmedabad has improved like anything, so where we can get a good supplier and good grades for a regular product. And Pune is a place for all strong quality and technicals. So, we want to focus in Pune for all customized and other solutions and standard UPS in our Ahmedabad.

Okay. So, you will be shifting the plant and machinery from Pune to Ahmedabad?

No, nothing. No plant machinery will shift from Pune. Everything is a new procurement. We want to have an add-on. We do not want to have anything from Pune. Everything will be going to new procurement of plant machinery in Ahmedabad.

So, can I ask you the bottom line analysis? You are estimating that Pune factory will have a better utilization with the UPS plant and machinery division in the next year?

For all customized and different power solutions, Pune will be there. And for our regular UPS, for all type of segment, but for regular UPS, Ahmedabad will be there.

Okay. So, what kind of capacity utilization we can expect for in the coming year for the Pune factory?

Pune factory, we will going to maintain or we are going to improve further on what is capital utilization happened in this current financial year. Because now we are focusing on more on customized solutions, projects like oil and gas, wells and other metro and aviation projects. So, capital utilization will be further improved in Pune and it will also going to be a good utilization in Ahmedabad also as we are focusing on the private channel business for the next financial year. So, our business in the regular UPS will also going to go up.

Page 21 of 23 Okay. And one more question, Ram ji. I want to ask you one question in hindi, what your business is, actually what I am able to understand that you are shifting your business towards BESS slowly.

No. We are making three segments. Three segments and three focus areas and three dedicated teams. One team is for only for UPS because UPS is our core product so that we do not get diverged into other businesses from UPS. So, we are focusing on UPS and we will do it in Ahmedabad. Second, we will do BESS only in Jhajjar, so it is a different team and a different vertical. So, it will be add-on to all our sales and development growth, everything. And Pune will remain on all the product and solution other than regular UPS and BESS. So, you have to understand So, we will be able to make UPS cash cow and BESS a growth engine.

Okay. So, you have a, what would I tell? Are you a direct competitor with Microtek or Luminous in UPS?

See, I will tell you, you have asked a very good question from me, Microtek or Luminous is working in the domestic segment. Till now we were not in domestic segment. Now, we are going to target domestic segment. We are going to target additional three segments. One is domestic segment, second is IT segment, typically with the computer the small UPS which is seen, we do not focus on that. And the other one is typical as a power partner who sell UPS as UPS, no integration as such. And the other one is system integrator which takes UPS, add four more items, they integrate and sell. So, these three verticals, we are now targeting and focusing. If you will see Luminous, traditionally they sell inverters with tubular batteries or lead- acid batteries. But from day one we want to focus on technology. We are coming out with inverter with lithium battery only. We have made IA-based, AI-based software. All the product of the company which are manufactured will be controlled, monitored from any remote location anywhere in India, provided customer gives the connectivity. Then we want to give the service which nobody can match. Like, if machine will stop working then it itself will call log us. Customer do not have to call log us. And the call log in real time will go to our nearest engineer’s app. Every call can be monitored. Every customer can see anything and everything in their mobile based app or the desktop. So, the technology driven setup that we are trying to make, you will see Microtek, Luminous and who all are working in this segment, that thing is not available. So, technology enabled what we are going to do, because for this we have taken

Page 22 of 23 Salesforce software and we want to completely integrate our entire operation with this digitization.

Okay. And we can expect that our after sales service is going to be really strong as compared to the other companies?

Very strong. We are going to do out of the box which is not in the market. There no precedent of that in the market and we are going to be in evert kind of segment.

And it will create a mood in the market because of which the visibility of our product will also increase and our product will be more acceptable.

No. Visibility will increase and we will also bring referral scope to every user and customer in coming time. So, at referral point, if one person refers to the other, so it automatically adds to our customer base in coming months and we want to improve on numbers, not only on one vertical or one geography or one product. We are focusing on every vertical to have a vertical wise growth which justify or which will sustain the growth for next three to five years. If we will focus on one or two verticals then we will not sustain. So, you Sorry to interrupt. Last two questions. Sir, this is all the time we had.

Last two question, Ram ji if you will say, please. Management can we go ahead? Yes, please.

Ram ji I have two more questions. What I am able to understand about the company, that in the next five years, I can understand that in the next five years you must have created a niche category in the powered value chain, in India Power Transmissions value chain etcetera.

Page 23 of 23 All right. And Ram ji, my last question is on lithium ion. You source it from China, people in the industry are really skeptical that going forward the lithium ion that we are sourcing, that we will be able to do it rightly or not? Right now, you were saying that geopolitical scenario is bad?

Five years ago same story happened for solar. There was a lot of disruption but today it has tripled. Today solar cell is being manufactured in India, and everything is happening. Have you singed MOU with anyone?

A lot of discussions are going on. As and when it gets final it will be in open forum in front of you all. We cannot share it right now, but a lot of options are being discussed and explored.

Okay Ram ji. Thank you. Thank you so much. Thank you.

Thank you. Ladies and gentlemen, due to time constraint, that was the last question. I now hand the conference over to the management for the closing comments.

As a promoter and as a CEO of the company, shareholders, investors, prospective, existing, I just want to pass on one message that we are not going to be conventional or traditional company in this domain. We are working on too many strategies, too many opportunities. We are going to add on at least five to eight verticals in coming months, where each vertical is capable of doing three-digit number. So, it will give us overall good growth and sustainability in the organization for long run. With this, I would like to sum up and thank all of you, each one of you, for joining us today.

Thank you, sir. On behalf of Prostarm Info Systems Limited, that concludes this conference.

Thank you for joining us. You may now disconnect your lines.