DCX Systems ₹1,250 Cr L&T Order Win, Synergies From It? | Expansion & FY25 Plans| HS Raghavendra Rao

And talk about DCS, DCX Systems. Now we do have HS Raghavendra Rao, CMD at DCX System joining in with us. Thank you so much, Mr. Rao, for joining in with us this afternoon on ET. Now it's a pleasure having you on the show. And let's start with the recent order in 1250 crores order you all have got from L&T. What is the impact in terms of the revenues? When do we start seeing that coming in for the company in your top line as well as overall? How does your order book now stand at the end of Q1? Then firstly namaste and what we received the order just we announced yesterday about 1250 crores. Of course, yes, we received, we are working towards the execution plan and we need to see is the completely the difference. We need to see the availability of the component and of course there is a urgent requirement for a lend to deliver on time. We are working towards that. See the all the of course we are ready with the manufacturing plan, everything we need to see the lead time of component we'll go into schedule and we just started working just of course we received a two days back of the Opio. We are start teams working on the supply chain system and the complete ecosystem. We will definitely work and update you the plan. What is our thing and we are on the job to complaint and presently our order book was on the March 31st we have at 832 crores and now we added about 1250 crore. We added totally it is coming about nearly 2000 crore be on hand today as per the latest update on that. Fair enough. So now the order book is just about 2000 crore rupees after getting this big order. But just if you could highlight a bit more in terms of what's the timeline of the execution when you start a production for it, when will it start hitting the revenue and what kind of margin has it come in at? Was it very competitively bid and you decided to let go of some of the margins or margins are pretty much at the similar levels as rest of your orders line? And of course, this is the Make India program, domestic supply L&D is the number one company in the defense sector and other sector and we are very proud. And I want to likely to highlight in the DCX history of last 7-8 years, this is the first biggest single PO. What we received in the earlier customer was about 900 crore. This is the biggest PO in the single PO what we received and everything is intact and of course the price margin we need to work out. We never compromise on the earlier price and other thing we start working because we need to see the production ability operationals on the logistic and many other thing to be considered. And definitely we are work to better our margin this time to the ecosystem built and now we are spread over many area. We started backward integration definitely. We worked out to improve our margins definitely. But your margins are still single digit, just around 5% mark. Do you anticipate them to head towards double digit mark in the next 12 to 18 months or do you think it'll take a bit more time to achieve that number? What's the immediate target for margins per Southeast in the margin sector, what we are able to print guide actually the they're going to OEM use the bill and we used to get the backward integration earlier for APCD assembly to outsource which we didn't had a facility. Now we have a announced facility for our whole 100% subsidy called running technology. We can definitely improve margin because we are all integrated. It will be better finance control, better supply chain system, better margin, those things can be added and more all on the single digit from the last seven years going up to the double digit, our target to achieve very shortly and there are big opportunity. As you know we are depend on 95% on single customer in Israel. We are also improve our marketing capability. We have taken a big account like we can add, we added Borat Electronics, we added L&T, we had Lockheed Martin, there are a couple, a couple of more too in the converting stage. Now we are also enhancing our customer base as the domestic, as the international definitely we are working for the improve our margin better. So for many reasons we can improve the production capability, backward integration, supply chain system, logistic, many things are there. Company is fully focused to improve margins also to have a very good pipeline as the pipeline order in upcoming days. That is also we are concentrating, but we are fully focused. We are confident we're going to improve our margin and taking all this consideration in future coming days. Mr. Rao, you know since you're talking about margins and how you expanded your client base as well a lot more in the conversion state in terms of the clients that you're talking about, one, which segments are these clients coming in for? And also given that wire cable harness side segment is a higher margin business, so would that also be a key focus area now and are you receiving more enquiries on that front? And cable and wire hardness, you can see compared to I, I do about four segment. So the number one, cable and wire hardness, system integration and electronic kitting also we do that now is a backward integration PCB assembly now higher margin, higher revenue comes out of the system integration, what we received from the L&T, this is the complete module we received and supplied to them. Secondly, cable and wire hardness, you can see the improvement I think last month we announced about, but the whole history of see the DCX, we used to do about 30-40 crores of business on the whole year. We got one single order. There's a multiple vendor for the this thing. We have about 3235 crores cable harness business that is also we enhanced our capacity, our target to achieve more and the cable we have it not like system integration level but we have a target to achieve in the much more bigger figure which we are working. There are big opportunity in cable and wire harness. We can definitely get some more. We are working towards to get in the convert some order. It is a big quantity with big value. We're working definitely in that we'll give a lot of the margin boost to our pack in fact and the cable also we started optical cable where we didn't had a facility. Now we put up our facility about last year and there are a lot of enquiries and a lot of requirement is coming, coming out for this cable harness too. Definitely we are on the focus. We are on the already we received couple of order in the cable wire RMS even the last year revenue take about 4045 crore in the single order we received about 30 crores, 32 crores and we are expecting some more to come in the next couple of coming months. Cable and wire harness site segment is seeing good growth and you know seeing more orders coming in just on an overall level. Mr. Rao, I want to know, while in the last couple of years at 1314% revenue growth is what the company has managed to see, what is the outlook that you have for F-525-F526 in terms of a revenue growth? Given that now you are seeing more order tractions coming in, what is the growth rate that one could envisage for the company? See basically as you know we are increasing our cable in the optical side and the normal cables to also must be were aware we are getting to the entry with the railway market with a joint venture with the Alta Systems. There are very good margins and the the visibility on the order book we are working toward that. Also we are concentrating on the more on make in India apart from the opposite opposite is still is pending. There are you can see in the Dom WR 12/13 dollar still offset is spending from the Indian company to execute that is going on parallel is a good bold decision by Government of India to convert all this make in India program. What we are all the new order, what we are new enquiries coming towards the Make in India program where definitely our revenue we are expecting to go up on the drastical level in the upcoming years. We are expecting about 3035% to growth in the revenue order book and health now presently have a very good healthy pipeline. What I shown you today is the only sample there are very healthy pipeline is available and we will let you know shortly on that. OK, Mr. Rao, on that note, we let you appreciate you making time and speaking with us. A quick break. And on the other, if you like this video, then like, share and subscribe to ET Now.