Trishakti Indus — Q4 FY26 earnings call

the only reason why our trade receivable cycle is about 200 days, is because there is a very small amount of a family settlement which we hired when we were taking over the company in 2023. So that amount is not much. Even in this year's balance sheet if you see, we have written off INR 1 crore worth of trade receivables from -- that was an inter-transaction happening between us.

Analyst challenged the high receivable days given the company's focus on Tier-1 clients, revealing a specific historical reason for the elevated number.

Asked by Rohan Mehta

this is basically an accounting transaction, which we have, we do with the OEMs and we have seen in bankers which we are getting the machine financed from. So over there, we do get some kind of benefits in terms of interest rates and all, which the bankers pass it back to us in terms of subvention.

Clarified that the INR 4.58 crores subvention income, though classified as 'other income', is operational in nature and directly reduces financing costs, impacting margin perception.

Asked by Rishi Maheshwari

So in income tax, if we have got hypothetically INR 20 crores worth of depreciation, right? And in the books in the P&L we've got INR 12 crores worth of depreciation. So whatever my income tax liable is going to be, it will be 20 minus 12. So INR 8 crores will be the amount, which is a taxable amount. But when it is deferred tax, since in the income tax, we are getting more depreciation which is going to be carried over to the next year. So on that amount, we it's just an accounting entry. You see, technically we don't have to pay that tax, but according to company law, we have to mention that in the P&L, hence our PBT goes down. Our PAT comes down. But this INR 1.7 crores is not to be paid to the government, that is the whole point.

Addressed a concern about a deferred tax liability, explaining it as a non-cash accounting entry related to depreciation differences, not an actual payment.

Asked by Rishi Maheshwari

Actually, we have given guidance and clarification on that, that the other income is actually part of our core hiring business itself. And to prove that, you can actually just turn the first page and see in the second page that in the segmental revenue, our core hiring business has that income. But according to company law, we, our auditors have to mention that as other income. So that is why we have given a clarification on that, yeah. So, technically the margins are stable.

Clarified that the perceived dip in margins was due to the accounting classification of subvention income, which is operationally part of core business, implying stable underlying margins.

Asked by Ravinder

So, see, whenever we are going through a very big expansion phase, then this -- there is a -- we have to work as a team, the bankers, the OEMs, and us as the contractors as well. So in this case, what happens is that some machines have been delivered on-site today. Some will be delivered in a few days. So the funding and all, it takes a lot of time. So this particular time which is being taken, those machines will stay in our trade payables, but eventually, it will come to our asset. It will eventually come to our borrowings, the liability side.

Explained the increase in payables as a temporary effect of rapid CapEx and machine delivery, indicating it will eventually convert to assets and borrowings.

Asked by Ravinder

See, these rental rates are very much sustainable, I can say that with good confidence. It's just that the 3% mark is mostly for the machines below 100 tons. When you go above 100 tons, then your margin increases and your top line decreases. So this happens only when you go way above 100 ton machines, where the yields are low, the margins are higher. So these yields are when you see the net blended yield, then you'll be able to see that it's very much sustainable, like I can say that.

Provided insight into the yield structure, explaining that while 3% is for smaller machines, larger machines have lower yields but higher margins, leading to sustainable blended yields.

Asked by Rahul Singhania

So when we purchase machines, so along with the machines, we have to purchase many other things for the machines. So, for example, a few spare parts and all these things for the machines we have purchased in FY24. So those spare parts and all also, we have to now the FOCs for those machines are getting over. So because of that, these the other expenses have gone up slightly.

Explained that increased other expenses were due to purchasing spare parts and other necessities for the rapidly expanding fleet, particularly for machines acquired in FY24.

Asked by Yash Junjhunwala

See, currently, I'm talking about that the only issue which we can face is operational challenges. But for now, all our contracts have been extended to 31st December. Over the next eight, nine months, we don't have any problem with the order book. There are many contracts which will be extended. More from my experience, I can tell you that all these contracts will again be extended for another 12 months.

Management identified operational challenges as the primary risk, while reassuring about demand and order book visibility for the short to medium term.

Asked by Rohan Mehta