Sansera Engineering Ltd
NSE:SANSERA
Sansera Engineering Ltd
NSE:SANSERA
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Earnings Call Transcript
Transcript
Other Earnings Calls
Ladies and gentlemen, good day, and welcome to Sansera Engineering Limited Q2 Earnings Conference 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 date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Preetham, Executive Director and Group CEO. Thank you, and over to you, sir.
Thank you. Good morning, and welcome to all, and thanks for joining this call. On this call, I'm joined by our CFO, Mr. Vikas Goel; Mr. Praveen Chauhan, our Head of Corporate Strategy; and Mr. Raul Cole, our CEO; and also our Investor Relations advisers. The results and the presentation are uploaded on the stock exchange and the company website, and I hope everybody has had a chance to look at them.
To start with, we are pleased to report that our financial and operational performance in Q2 FY '25 has been quite strong compared to the existing market conditions. On a year-on-year basis, our revenue has increased by 10% to INR 634 million, along with an improvement in EBITDA margins, which stood at 17.4%.
Having completed QIP of INR 12,000 million in the month of October, our balance sheet position has strengthened significantly. This capital will be instrumental in supporting our future growth plans, giving us financial flexibility we need to pursue the growth opportunities.
Now let's take a look at the broader industry landscape. In the domestic market, 2-wheelers maintained a healthy momentum in Q2 FY '25 with volumes increasing at a double-digit rates on a year-on-year basis. While the passenger vehicles saw a slight dip.
On the export front, 2-wheeler volumes showed similar growth trajectory. And as we look forward, festive sales have come in strongly in the month of October. Having said that, we are seeing some softness in the demand on the export side.
Let's take a closer look at our performance across sectors in Q2 FY '25. While our Auto ICE business had a healthy growth, there was a mixed bag performance in our emerging business, namely tech agnostic, HCV and non-auto. The tech agnostic and HCV business continues to be the fastest-growing sector with a growth of 55% year-on-year basis. This was primarily driven by the ramp-up order execution of our large North American-based TV customers.
And interestingly, we are yet to achieve the peak execution level. However, our non-auto sector saw a degrowth of 20% year-on-year. This was mainly due to weak performance in our off-road and agriculture business. Off-road segment revenue stood at INR 166 million during the quarter. Agriculture sales during the quarter stood at INR 101 million. With a stronger monsoon, we expect this segment to be better in the coming quarters.
I would like to inform you that we have already started order execution for a large stationary engine and HCV customers with 1 order started giving revenues and another one will start in the next few months. These orders will reach their optimum value by FY '26.
Speaking of aerospace business, it was also under pressure due to some headwinds faced by our large customers -- faced headwinds faced by our large customer, which resulted in delay of orderly execution. Having said that, we look forward for a gradual production recovery at their end. Broadly, the demand for the aerospace remains robust, driven by the healthy air traffic growth.
The underproduction of the aircraft-s in the recent years have resulted in a very large order backlog. And with the ending of strike at Boeing, we expect the business to be back on the expected growth trajectory.
We have entered into a strategic MOU with Dynamatic Technologies, allowing us to leverage our manufacturing and engineering expertise introducing high-friction parts going into the Airbus 8 to 28 craft door assemblies.
Coming to our auto ICE business. it witnessed a growth of 9% year-on-year and stood at INR 567 million, which is the highest ever quarterly revenue. This performance was mainly driven by the 2-wheeler business, which showed a growth of around 21% year-on-year. We are positive on this business as we continue to get new orders for the 2-wheeler components in the tech-agnostic and high end of the market, and expect it to demonstrate a similar kind of growth in the coming future as well.
Our PV business fueled by the slowness in the export market degrew by 8% year-on-year, which is in line with the overall industry scenario of slower demand.
Now let's turn our -- turn to our order book. As of September 2024, our order book stood at over INR 20 billion with 60% of these orders coming from international markets. I would like to mention that this quarter was a very good quarter in terms of order booking as well. We booked around INR 3.2 billion worth of orders during the quarter and major order inflows of auto as well as non-auto sectors.
In order to meet the increasing demand for our products as well as necessity for launching of new products to meet our customer specifications, we have also set out our plans to expand our capabilities including establishment of a new manufacturing facility in order to accommodate new forging lines and machining lines.
Towards this, we have signed a letter of allotment of 55 acres of land in Harita. We are also expanding our factory building at Plant 9 to accommodate a new special process setup. Further, we will be upgrading and adding some more missions in these facilities as well.
We have also set up -- we have also expanded our manufacturing facility at our Pantnagar plant having acquired a new manufacturing in place with a 1 lakh 20,000 square foot area, and we hope to continue our low-cost manufacturing base at our continued facility. Broadly speaking, beyond the land and building, we would -- we intend to spend more than 60% of our future CapEx towards the new age components in tech-agnostic and HCV and non-auto site.
We are also focused on expanding our professional team and have recently rolled in multiple members at a senior level. To name a few, Mr. Rahul Kale, who has recently joined us as CEO of the company, brings in a significant amount of experience and leadership expertise with a demonstrated history of more than 20 years in automotive and M&C. Mr. Madhukar Bad, CHRO, has over 2 decades of experience in HI leadership experience. Mr. Streeter, who has joined as Head of -- COO of our Forging division also comes with more than 2 decades of experience in forging-related industry.
If you recollect, we have already added experienced professional to take their leadership roles such as: Mr. Amin Partin, our CTO, who has over 2 decades of experience in quality management and operational excellence across automotive OEMs; Mr. Pat Raman Raman, our CFSO, who has over 2 decades of experience in managing sourcing and supply chain management; and Mr. Patina Patel, Head of our Business Finance, who has also over 2 decades of experience.
Along with our strong existing team, collectively, all of them bring a wealth of industry experience that will be instrumental in driving our growth journey forward. At Sansera, we are driven by a passion of engineering to effectively seize market opportunities and drive continued growth in the years ahead.
Now I hand over this to our CFO, Mr. Vikas Goel.
Thank you, Preetham. Good morning, and let me tal of the consolidated financial performance during the second quarter of this financial year.
Our revenue from operations rose by 10% to INR 7,634 million. We have delivered our highest ever quarterly revenue despite the challenging macro environment in the auto industry in domestic as well as international markets.
Our gross margin expanded by approximately 1.3 percentage points due to evolved product mix and certain efficiency projects, which we've been working on, which have now started delivering benefits. During the quarter, our gross margin stood at 41.3%.
Other expenses, we had a marginal improvement in -- on a sequential basis, on a few items. And this is basically a result of our cost control measures. So that also helped us improve our -- maintain a good performance.
The EBITDA for the quarter stood at about INR 1,331 million versus INR 1,178 million in the same period last year. Our EBITDA margin for the quarter stood at 17.4%, which is marked improvement on an ongoing basis. Interest cost was higher on a sequential basis, partially due to higher debt and largely due to the discontinuation of interest bench on export credit. Going forward, we expect this to get nullified as we are deploying the proceeds of our QIP for repayment of most of these loans. And so we should have some positive reflection on the results going forward on this account.
Our depreciation and amortization expenses stood at about INR 425 million in line with our ongoing asset capitalization. We were able to maintain our PAT margin level and closed the quarter at INR 516 million of PAT.
Talking about the performance during first half. The revenue from operations rose by 11% to INR 5 15,073 million with a healthy margin profile. EBITDA for the half year stood at INR 2,607 million, with a year-on-year growth of 12% and a margin percentage of 17.3%. PAT stood at INR 1,018 million with a margin of 6.8%.
And on the debt front, our net debt stood at INR 8,797 million as of September 2024, owing to higher CapEx during the first half and a slightly elevated inventory which is basically to build up for the ongoing festive season.
CapEx investments were largely -- sorry, CapEx investment to the tune of INR 2,937 million, in this period of first half. And the details of which were already explained by Preetham in his address. Cash flow from operations stood at INR 1,959 million, and I would like to highlight that health of QIP proceeds, we are currently net cash positive.
With this, we would like to conclude our presentation and open the floor for Q&A. Thank you.
[Operator Instructions] The first question is from the line of Mukesh Saraf from Avendus Spark Institutional Equities.
My first question is on the order book. You have seen the order book kind of expand now this quarter. And moreover, it seems like the non-auto segment has seen a good order increase now about INR 500 crores. Could you give some more sense on this number? Is this largely aerospace? Or is there -- some of the other orders that we are getting in the non-aerospace and nonauto segment as well?
Thank you, Mukesh. Yes, see, while the overall order book is quite healthy. The orders have flown from all the segments. Overall, if you really look at our order book, which is about INR 2,055 crores. More than 50% of this has come from nonauto tech agnostic and HCV, approximately about INR 500 crores from nonautomotive. Tech agnostic is about INR 205 crores. HCV is about INR 315 crores. And auto ICE also is quite healthy with INR 979 crores.
So -- and if you really look at domestic versus this thing, again, about 40% of this is from domestic and about 60% is coming from exports. So there is in a healthy order inflow from each of the sectors and also from the geography as well.
So my question was specifically on that INR 500 crore non-auto order book. Just trying to understand this incremental quarterly improvement that we have seen, is this largely only aerospace? Or is there other segments to...
Also a portion of -- we have been able to add some new segment as well. So invest about 36% -- about 37% of the orders have come from aerospace. About 4% from agri but then we have also added a customer in semiconductor business. So we have been able to get a good entry into this. This is for a semiconductor equipment manufacturer, and that constitutes about 55% of the non-auto order book.
Got that. Got it. And secondly, on the money that we have raised, the INR 200-odd number, could you kind of spell out the plans that -- obviously, you mentioned about some debt repayment, et cetera. But any strategic plans there in terms of M&A? And even if you're not able to kind of specifically talk about M&A, could you tell us what kind of areas we're looking at? Is it more a geographic expansion that we're looking at?
Is it a capability building bonfim. We do have a fit well, but is that anything that we're looking there on the side? Or is it like a customer acquisition? So could you kind of spell out a little more in detail on the usage of these funds? Obviously, there's a U.S. plant as well that you're looking at. So if you could give those details.
Yes. See, broadly, what we have strategy is that to begin with, immediately, we would actually net off our debt. So we have become mostly debt free. That will also give us a leverage for any further expansion as and when the opportunity comes up. We have also, as I specified that we are expanding in 2 places on our land and building because we have almost run out of land bank. So we are acquiring about 55 acres, which is in an EV path coming up very close to the industry an area where government has identified a parcel of 55 acres and allotted. Where we expect that all our future order book execution would happen.
We have also added a manufacturing base, which we intend to keep it as a low-cost manufacturing base in an. Now post this, we are also setting up a special process plant in our aerospace facility. This will also accelerate our growth in aerospace and also in other nonautomotive sectors because special process being extremely critical to these sectors.
Now apart from this, as you said that we are on the -- very actively pursuing our plans into starting up of a small assembly plant to begin with in the U.S. And with the change in government that is due to happen in U.S., we are closely watching what kind of policy shift will happen, which would also help us to take further decisions on this.
Now just coming -- and you know that we have already invested in a deep technology startup where in MMRFIC, and we would definitely look at much faster growth in that. Of course, aluminum would play a key part in our expansion strategy. we are definitely open to looking at more and more warm forged as well as hot forge components critical to our component strategy.
Some of our key members who have joined us would also come with that expedite. So we expect that, that will also leverage our -- propel our growth.
Right. Any number you can tell us on the U.S. CapEx will be a small -- I mean are you starting off with a very small number now because you've raised on.
Yes, it is not a significant number at all. To begin with, it would be only a lease premises with some final inspection and assembly and operations. So it would not have any material impact at all.
Got it. Got it. And just lastly, margins, while we have maintained a ballpark around the 17.5 number, what are the kind of levers from here you're seeing because -- how are you seeing some of these initiatives you're taking in terms of product diversification, et cetera, might take some more time. What is the trajectory you're seeing on these margins?
So as I explained earlier, the margin is definitely you rightly said, there are project diversification or higher product mix is 1 lever. The second lever is the cost improvement initiatives. On the indirect costs, we are taking control measures. And also, we are looking at efficiency improvement projects. There are a few projects running already in the company.
So these are 2 levers that we have. The third lever is the volume expansion on an overall basis and a higher capacity utilization, which will probably also materialize over a period of time.
Right, right, right. So immediately -- I mean, so basically, it would take some time as we see these business be at basically.
Yes, absolutely.
[Operator Instructions] The next question is from the line of Arjun from Kotak Mahindra Asset Management.
Congratulations on a great set of numbers. Sir, the first question is just on the CapEx, while you did cover it. We had indicated roughly INR 450 crores of CapEx for this year. Has there been any change in thought process post raising money in the QIP?
No, Arjun, we continue to work as per the guidelines, except that this between 4 25 and 4 50 what we had indicated was not inclusive of this land parcel that we have mentioned. So that would be additional. And apart from that -- yes, those 2 land portions. And apart from that, it should be more in line with whatever we had indicated. Of course, we will also take the overall macroeconomic condition in the market momentum into consideration while slightly adjusting in case that we need to curtail or accelerate any of this thing.
So because as I said that we have added some more sector, there could be some capability that needs to be added into those, which may also require some additional equipment. But that, again, having said that, that should be well within the projections that we have made.
Sure. Sir, just on the margin side of it, while you did also articulate. Going forward, if I look at your order book, entering into semiconductor equipment, et cetera. Would it be fair to say that the margins of the order book potentially could be higher than the existing margins?
Yes, while the new sectors, especially nonautomotive and also tech-agnostic HCV, these are primarily driven by the export. Geographically, it is meant for exports. So this -- all this comes with higher margins, of course. But then we also have some learning, as I had already said that we are optimizing our learning in our tech-agnostic components especially in aluminum forged and machine components.
I expect that we would take another couple of quarters before we reach those optimum levels, which also currently attract. So -- and definitely, the order book as it represents, should give us a positive momentum in margin expansion and also some of the initiatives that we are taking in our Swedish facility along with the new order additions there and some automation projects that we have taken up.
Beginning of the next quarter, we should see a better -- going back to our normal margin the thing. And you'll see the full year next year going back to normalcy in our Swedish facility as well. So with all these things, definitely, we expect that there will be some expansion in the margins.
Sure. Sir, just a final question, a quick one. Obviously, things are fluid globally. But just if you look at the aerospace and defense piece, we had earlier indicated that we could look at maybe INR 350 crores of peak revenues over the next couple of years. Obviously, there have been global-related occurrences. But how do we see the ramp-up now going forward? Is our order book yet intact? Or has there been some change in the orders or anything has been canceled?
No. In fact, our order book has expanded in aerospace and defense. And with the recent -- one of the largest OEMs, you are aware that there was a labor issue and then it has been resolved. And we expect that they would really put their efforts to catch up the lost ground.
So since we have also expanded our customer base, we have been able to work through with the newer orders. We really, very firmly, we are working towards achieving whatever is our targets. Of course, external factors do play a big role. But we have tried to -- we have also added, as I said, the new sector would also get added into this facility. So this achieving and setting up of special process line, our facility into this is also towards achieving those numbers much faster than what we had thought.
So we continue to hold a positive outlook on aerospace and defense. And definitely, again, as I reiterate, that the company intends to grow by 40% to 50% CAGR in this sector for the next 2 to 3 years with a strong outlook on the order book.
So what would be your peak revenues currently in terms of order book and current business?
I think -- see, if I add the new sector also into it, we are already very close to about INR 325 crores to INR 350 crores worth of order book, both aerospace, defense and semicon put together.
[Operator Instructions] The next question is from the line of Siddhartha Bera from Nomura.
Sir, my first question is on the non-auto site again now given these improvements with our key customers, ramping up now and your orders also, we are starting there. Should we expect that this segment start growing in that 30%, 40% or maybe in high teens from current quarter onwards? Or do you think some of that recovery may take longer?
No. See, that as the -- now we see that there's already a momentum started seeing. We are also looking at the entire supply chain to definitely support this growth story. And I expect that while the third quarter should maintain the momentum and you'd see an improvement. But in the fourth quarter, you would see a significantly improved performance because already, we are towards the middle of November, and these things would start taking some time into -- coming into the production line.
So I expect the full recovery and a full back to normalcy from the fourth quarter. So there you will see the kind of growth that we have been speaking about.
Got it, sir. Sir, second question is on the PV side. We have seen a quite soft growth in the last first half of this year. What are the issues here? And given the lot of potential even in Indian market as well as in the export customers, when can we expect some of these trends to sort pickup for us going ahead?
See, TV, both headwinds, so there is headwinds in both the domestic as well as the export market. But for our -- having said that, while 1 macro conditions are not yet very favorable, -- but some of the programs initiatives that we have taken, which will start kicking in the next couple of quarters would cover us for the -- we expect that even the industry would not continue to demonstrate the same slowness. And in a quarter or 2, it should be back to the normalcy.
But added to that, we also have programs, which are now going to start in the first quarter of next financial year. So we definitely are quite positive on the passenger vehicle industry.
Got it, sir. Sir, lastly, on Sweden, would it be possible to share the EBITDA towards this Q3 for the Sweden entity?
You mean our Swedish entity, what kind of numbers it return?
Yes, the EBITDA level?
Return is about 5.5% for the Swedish facility. And as Preetham explained earlier, with the -- closer to. With the improvement in the outlook for that business, especially due to price revision with the customer and the new orders, we expect to reach double digit by end of next year.
So as for the overall H1, it was about 6.7%. I mean H1, it was 6%, but Q2, it was 6.7%. But then what we see is already from Q3 to Q4, you will see a performance improvement. And towards the end of the Q4, we should be back to our normalcy. We expect that between 10% to 12% EBITDA to sustain deeper ongoing quarters.
The next question is from the line of Mumuksh Mandlesha from Anand Rathi Institutional Equities.
Firstly, how do you view and overall growth has been around 10% to 20%, and we expect to do like 10% better than industry also a key segment 2-wheeler that has been being. Just want to understand, in terms of the new orders execution, how that has performed because it seems broadly growth has been broadly closer both industry growth, not much an outperformance we have seen sir. Just want to understand, I mean, why is the low growth then of what we expect, sir?
Sorry, Mumuksh, now if you really look at -- while our overall business is both distributed across about 32% coming from international business, 68% coming from domestic business. And if you really see about 28% of our business, 27%, 28% of our business coming from passenger vehicle. While the 2-wheeler itself has done reasonably well, and we have also done this thing in line with or slightly better than the 2-wheeler growth. But then what you need to consider is, apart from that, there is a lot of headwinds across TV, across aerospace because of one of the customers that being then.
If you really average out all those things, we still have significantly outperformed the industry numbers. And this is because we have been able to ramp up our newer programs, especially on tech agnostic and non-auto, which is tech agnostic and HCV, which has actually given us almost 50% growth. And these are all newer components coming into production in this program. And we expect that this would add to the momentum going forward.
While we keep maintaining that overall industry, if you average out all the sectors, both domestic and passenger vehicle we still have outperformed the industry growth.
Sir, do you see that going ahead with the new programs coming up and the pace of growth further improve, assuming the industry more or less speed around this level, sir?
Yes, we will. Because like I had said that some of the sectors, which had faced the headwinds like one of the sectors that we have seen. Almost 25% reduction in the industry level is on the off-road and the customer expectation and the market expectation is next financial year, it should be back to normal. We have already spoken about aerospace where we see a momentum -- significant momentum to improve. In the Quarter 4 itself, we will demonstrate that.
And with the addition of new sector, we should be able to outperform as we have committed in our previous and we have been saying that we would outperform the industry by 8% to 10%. So we are working towards that, and I'm quite hopeful that we will be able to achieve that.
Got it, sir. And also any steel pass-through impact any steel price has come down. So any pass-through impact of that, sir?
Steel is not a big impact. Whatever is the nominal reduction that has happened has already been executed. But it's a very small impact.
We have a similar offset of this in these scrap rates because that also has been falling. And so largely, we see a nullification of that benefit as of now.
Okay, sir. Sir, coming to this aerospace MOU with Dynamite. Can you just share us how this business potential is there? And just more on this particular order win from 8 to 20 growth parts, sir?
Yes. I think as we had communicated in our press release also, they have secured the supply of orders for supply of complete door assemblies for this A220 programs. And we would be missioning a lot of critical components to one of the door assemblies. And this is approximately about INR 40 crores, INR 45 crores -- INR 50 crores of annual revenue. About INR 53 crores of annual revenue to start with.
And we expect that once the program is launched, we would have higher opportunities in this. And this also gives us a good entry into the ecosystem of Airbus, where we are working with multiple tire ones and also with OEMs to -- on numerous new upcoming projects as well.
Got it. And this order will start by when, sir?
We have already started submitting the FIs, and we expect that Q1 of next year, it should start getting into commercial production.
Got it, sir. Just lastly, on the aluminum volume, sir, how that is gaining traction, sir? And can you indicate what would be the order book for this segment, sir?
Totally aluminum forging, as we had also said that we have actually -- overall, we would be having about 8 operational by end of this year. And with a total order book of what we are currently executing as well as overall order book is close to about INR 350 crores. And I think by towards the end of next financial year because these are also going into some newer programs starting in Europe for the high-end motorcycle business. There's some couple of components, which are getting into passenger EV car exports as well.
And by towards the end of the next financial year, quarterly hit rate, I think we should be very close to executing the full -- at least about 80% to 85% of this order book.
Got it. And sir, currently, it will be in the double-digit growth, sir? Full year basis this year?
Yes, yes, yes.
[Operator Instructions] The next question is from the line of Abhishek Jain from AlfAccurate Advisors.
Congrats for a strong set of numbers despite a challenging environment. Sir, in ICE segment, our goals around 9%. So if you can explain the new products and the client additions in the ICE segment?
No. See, ICE segment, of course, we -- two-wheeler itself has grown well. Of course, there has been a degrowth in our passenger vehicle segment, both domestic as well as the export -- domestic export being slightly more than domestic. But we have been able to expand our business with -- as we have said that Tata Motors has been -- we have been expanding our testing business with Tata Motors.
We have also been able to -- in line with the growth in 2-wheeler business, we have been able to grow with our existing customers, namely Bajaj and HMS and as well as TVS. We have also added Ford Motor Company where the development is on for a connecting road, which would be largely exported. But -- so that's it. I mean, we see that the momentum continues in this quarter as well.
So how do you see the revenue growth for the medium terms in the ICE segment? In a stable growth, the industry will grow by the 6% to 7%, how much outperformance can be possible because of the new client addition and expansion?
No, we expect that -- see, a very significant portion of our auto ICE will also come from passenger vehicle. While the domestic industry has grown well, but we still await our recovery in the export segment. So all put together, I think we should be between 8% to 10% better than the overall industry, including exports and domestic.
Okay. And are we looking at some big orders from the export segment in the passenger vehicle side, in EVs or ICE, sir?
No. That's an ongoing process. We can't stop working with our existing and new customers to acquire new businesses. Of course, at any point of time, there will be a lot of projects, which we will be working on, including some of the big ones going into both North America, Latin America as well. So we expect that, that's an ongoing process. We are quite hopeful with the favorable manufacturing conditions in India and also China plus this thing. We would expect that our inflows will start getting better and better in this segment.
Okay, sir. In non-auto segment, revenue on quarterly basis is INR 65 crores to INR 80 crores. So how do you see the medium-term revenue on the basis of the new orders wins now? So new orders in the monitor segment is quite healthy. So the -- what kind of revenue you are targeting for the medium term in the next 2 to 3 years in non-auto selling?
See, non-auto -- see, if you really have to dissect the non-auto. Non-auto primarily consists of aero defense as well as off-road. So off-road still, we think that another 1 or 2 quarters, it will take for it to come back to its normalcy because the sector itself is struggling. In U.S., one of our major customers is having -- this year, they had already projected that they are looking at between 15%, 20% degrowth.
So that is in line with whatever the market had expected on that. But other than that, we are quite bullish and you will see us growing much faster in aerospace as well as defense. And you would also see a kind of recovery in agriculture sector, which also is part of the non-auto for us.
So see, overall, if you really look at the off-road coming to its normalcy over the next couple of quarters, I don't expect that to happen in this quarter or the next quarter, but at least from the Q1 of the next financial year, we should really look at about 40% -- 35% to 40% growth in our non-auto business.
Okay. Sir, my last question on the regime fund you have raised around INR 1,200 crores, and you are also looking for the repayment of the date. So how much date would be repaid? And how much in tag cost will go down in FY '26?
So we have stated that we will be repaying INR 700 crores of debt and the process has already started. By March, we should be able to complete this entire process. Approximately this should reduce our interest cost by about INR 55 crores per annum on an annualized basis.
[Operator Instructions] The next question is from the line of Goral Ghandi from Glorital Capital Management.
Just 1 question, sir. This order regarding semiconductor equipment you are talking about, will this order be recurring in nature or onetime? And is there any more better opportunity in this space for the company?
Yes. This is definitely a recurring order, and we expect that once you start establishing yourself in any sector, you would have definitely higher opportunity, both with the same customer as well as with a few more of these players who are dominant in this industry.
We are creating certain kind of facilities, which are very, very typical for this sector, including plus 1,000 clean room. Also with some of the very high-end capability of machining. All these things should definitely aid us to improve our standing in the sector.
The next question is from the line of Deep Shah from YES Securities.
A question on aerospace and defence, if you can share what's the bearer share for the quarter for the segment aerospace?
In this quarter, what was the revenue is what is your question?
Yes. From aerospace and defense.
Approximately, it's close to 4%. That's the average share from this segment that we've been having for some time now.
Right. And the related question to that is with this supply input from dynamic media technologies 1 starts with analyze about INR 50 crores to INR 60 crores. Where do you see the revenue share from this segment to grow. I mean the other question to that is how are the margins in terms of win from this particular segment. Is it like it's a critical equipment? How is the margin profile different versus the other company. So that's the question?
See, overall, I don't see too much of a change between 6% to 7% that is what we see aerospace, defense and semicon put together to happen in the short term in the next 2 to 3 years. While we see that this growth would have about 35%, 40% CAGR on year-on-year. But since our other sectors are also growing and this being a smaller base would not really improve a lot from current 4%, 4.5%, it would probably go up to about 5.5%, 6%.
As far as the margin is concerned, it is like we have said earlier, this is definitely margin accretive compared to any of the domestic business that we have. It is in line with all our other export components that we do, probably slightly better. But just also one needs to understand that this would also come with a higher working capital cycle and a longer inventory period. So this would definitely be margin accretive, definitely being much better than our domestic margins.
Sure. And the last question is about the other deals of INR 50 crores that you have just mentioned, about INR 55 odd crores for 20 per gram. Do we see a chance of damaging exit, let's say, other families of the flights like for a company et cetera?
Yes, yes, yes. So we like see, as we have capability expansion in this, we are already working with similar components with one more tire one thing. So we also see that once you get into a range of family of components, the opportunities to work with various other models would come up. So we are already pursuing such opportunities.
[Operator Instructions] As there are no further questions from the participants. I now hand the conference over to the management for closing comments.
So thank you very much for all your patience hearing and participating in this. I conclude this call. If you have any further queries, you can contact the SGA, our investor relation advisers or directly, you can be in touch with us and we will give you further clarifications if you have. Thank you very much.
Thank you.
Thank you.
On behalf of Sansera Engineering Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.