Glass Wall Systems (India) Ltd (GLASSWALL) Q1FY27 Concall Transcript - Jun-2026 Qtr
Moderator (IIFL Capital): Ladies and gentlemen, good day and welcome to the Q1 FY27 Glass Wall Systems (India) Ltd conference call hosted by IIFL Capital. This conference call may contain forward-looking statements about the company which are based on the beliefs, opinions, and expectations
Moderator (IIFL Capital): 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. 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 touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Mohit Agarwal from IIFL Capital. Thank you, and over to you, sir.
Mohit Agarwal (IIFL Capital): Thanks. Good afternoon, everyone. Welcome to Glass Wall Systems India Limited first quarter FY '27 earnings conference call. From the management side today, we have with us, Mr. Jawahar Hemrajani, Chairman and Whole Time Director, Mr. Ishan Hemrajani, Managing Director and CEO, and Mr. Sanjay Sawant, the CFO of the company. I will now hand over the call to Mr. Ishan Hemrajani for his opening remarks. Thank you, and over to you, sir.
Ishan Hemrajani (Glass Wall Systems (India) Ltd): Yes. Hi. Thank you, and good afternoon, and a very warm welcome to everyone present on the call. Thank you so much, Mohit, for introducing myself and my father, who are both on the call today. We also have Mr. Sanjay Sawant, who is the Chief Financial Officer at the company, and SGA Strategic Growth Advisors, they are our Investor Relations Advisors. They are also on call. I think to begin with, I'd like to thank and congratulate all our stakeholders, investment bankers and business partners for helping us achieve this milestone of getting listed on the Indian Stock Exchange. Since, obviously, this is our first earnings call, I'd like to take you through Glass Wall System's journey, business overview, industry opportunity, and growth strategy, followed by which we can talk about the financial findings of the first quarter, and post that, we can jump into the Q&A. We have also uploaded the investor presentation deck on the stock exchange, and I'm sure everyone has had a chance to go through that. Right. So, let me start by introducing the company briefly. Glass Wall Systems has been operating, we are facade solution providers, and we have been operating in this industry for more than two decades. Our business has started in 2002 and was founded by Mr. Jawahar Hemrajani, who is the Chairman of the company. So, it's been almost now 24 years for us in doing this business. Let's start by introducing what we do exactly. We are, as I said, facade solution providers. So, facade is everything on the exterior of the building that you see today. Our major product is, obviously, aluminum frames with glass that you see on a lot of commercial buildings, but our expertise is is expanded into everything on the external building envelope. So, we have capabilities to design, manufacture, and install not only aluminum and glass, but also railings, louvers, ACP cladding, stone cladding, any sorts of rainscreen cladding, windows and doors. So, expertise of our company is to provide turnkey solutions for everything on the external building envelope. Obviously, this is a premium segment. We define the skylines of the city. So, we are an important trade to the developers. It is only after we finish that the developer can start his handover procedures and also get his fire NOC and Occupation Certificate. So, in that sense, we are a very important trade. We define the aesthetic of the building. We also need to make sure that the functional requirements of the building are met by the product that we put on to the building. So, because it is the external face of the building, it is subjected to all natural elements. So, when we design facades, we take care of the fact that the facade is going to be subject to air, water, acoustic performance, thermal performance, building movements, seismic or earthquake earthquake movements. So, all of these natural elements, the facade has to cater and fight and accommodate the worst natural elements. So, we are heavy on engineering, we are heavy on manufacturing. This industry is is very niche in the sense that every project is different and we engineer for every project from the ground up. We are operating in three business
Ishan Hemrajani (Glass Wall Systems (India) Ltd): as today. The first business vertical is the domestic facade solution. On the domestic facade, we are working with the Grade A developers in the country today, where our nature is turnkey, turnkey jobs, so that means, as I told you, we do everything from the beginning. We do the engineering, we do the manufacturing and we also do the install. So, we work with closely with the developer. All of our contracts are through the developer. And, and our focus predominantly on the domestic side is to do non-residential real estate. So, all of our order book today on the domestic side is commercial real estate where, more often than not, it is already a leased out property, and the developer is building to cater to a particular demand of lease, and we are executing the job. So, that is our first business vertical, which is domestic facades. We are a pan-India company, so we have presence around the country, but our major markets are Mumbai, Pune, Ahmedabad, Bangalore, Hyderabad, Gurgaon, Noida. So, all Tier 1 cities is where we, is our focus markets. The second business vertical that we are in is the international facade business. Here, our job scope is that of doing the engineering, doing the manufacturing, and then only supplying the goods as a ready-to-install product around the world, right? So, our clients in the international business is, are people like ourselves, facade contractors in US, in Australia, and elsewhere in the country who hold the main contract. So, they do the install, but they buy the product from offshore. So, we come in and we engineer and supply the product to them as a ready-to-install product, and they install on site. So, it's a purely product supply sort of a business where B2B product supply, where obviously margins are slightly better, and we don't hold the execution risk of projects. We started this business in 2022 with US, and today we are operating in the US and in Australia. We are also exploring new geographies. As I take this call, I'm sitting in Canada, in my hotel room. And why I'm here is to basically try to develop Canada as a country where we could possibly export panels into. I'm also heading to Israel next week, which is another country that we are exploring very closely to expand our international business. This is the second business vertical, which is B2B product supply. The third business that we are in is fenestration business. Fenestration, for easy understanding, is doors and windows that you see in residential projects. But we operate in the premium segment here, where we are doing ultra-luxury projects and ultra-luxury residences. This is led by my brother, Amit, who's also on the call today. He's an architect by qualification. And here, we are doing very niche projects. We have, we have tie-ups with companies in Europe and all around the world, where we import the engineering. We do the local assembly, and we do the local installation. So, the engineering is basically with partner companies based out of Europe. And we have exclusivity with a lot of companies supplying product into India, fenestration products, very high end. And we do the manufacturing and we do the install. So, here, there are two client bases. One, traditional client base was very B2C. So, because we were doing private houses and residences, so it was a B2C sort of a business model. Now, that has migrated a little bit into B2B, because now we are seeing that in the country, there are multiple luxurious projects that are coming up that demand demand the best window products available in the world. And this is the market that we are increasingly catering to. So, it's while the B2C will continue, we see that there's a B2B element also that is coming up here. So, so you have the domestic turnkey facade vertical, you have the international product supply, and then you have the fenestration, which is a high-end window, very niche, obviously, higher margins, lower volumes, but higher margins, very niche fenestration business. So, these are the three verticals that we operate out of. In terms of our product portfolio, I've already mentioned to you earlier, we do everything on the exterior of the building. And we also have products that we have listed on the International EPD System, which is our sustainability play
Ishan Hemrajani (Glass Wall Systems (India) Ltd): A lot of a lot of developers today are becoming very conscious of the sustainability angles. And we have products, we have our own products that we have listed on we have third party audited and listed on international EPD system which says that our products that we put on to the building are are much more sustainable than the global average values. So, the, while we do everything on the external, we have a huge sustainability play where we are ahead of the market in terms of our, having our products registered. We are a Mumbai based company, so office is in Lower Parel. Our manufacturing is 2 and 1/2 hours away from Mumbai city in an industrial area called as Vile Bhagad, Mangaon. It's an ownership land parcel in MIDC. It's a 1 lakh square meter land area. What we have developed with the recent expansion is around 32,000 square meters. And we are building up our own glass processing unit which I'll come to in a bit. So right now we are a Mumbai based company. All the design offices, all the central operations are run through the Lower Parel office and all the manufacturing is done through the Vile Bhagad factory. Wherein, in that, in the same land parcel we have only developed around 30% as of now. We are developing the glass processing unit which is going to add maybe another 25% or so. So that land as of today, even with the future expansion of glass processing unit, is around 55-60% occupied. So, there is good and enough room available for us in the same piece of land to expand further. Right now, our capacity is around 130 panels a day. And we have four dedicated production lines. with a lot of people working in the factory. All our CNC machinery which is for cutting, notching, drilling, is all from Germany and Italy. So very top-of-the-line. Our glazing pumps are from Graco, USA, which is again top-of-the-line. Our entire sheet metal factory is with Amada and Japanese machinery. So the infra that we've put in is very high-end in our factory. It is the best available in our industry. And we are fairly automated operations through the factory floor. We have 400 running meters of conveyors. And we have around 350-odd workers working of which around 120 are on, on our payroll, the rest are contractual workers. So, we also have a test facility that we have made in the same piece of land. The test facility is basically to put up all the facade products before it goes onto the building and actually test it to real life situations. So we do testing for air and water leakage. We do testing for seismic or earthquake movements. We do testing for structural load. We do testing for building movements, that is inter-story, that is a vertical movement. We do sway which is which is a horizontal movement. So, before, one is to do all the mathematics on paper and one is to actually put it on a test lab and, and test it out for real life scenarios, right? So we do have a test lab in-house. We are the only ones in the country to have this as facade fabricators. And it is a third-party lab accredited from NABL, which is the certifying body for all Indian labs in as, as third party labs. So, our manufacturing setup is world-class. We are also expanding and doing the backward integration for which we have raised the primary money. Obviously, the construction is underway for that. What we are desiring to do is do our own processing of glass, which we are today doing from third party entities. So obviously, for us, this is more control over supply chain and also there is a, there is a bottom line saving for us, cuz we are going to be vertically integrated to that extent. So, the monies that we raised for the primary on account of the glass processing is already being put to use where the construction is underway. The entire project cost was 80 crores. We have raised 50 crores through primary and the rest was through internal accruals. In terms of client base, in the domestic segment, obviously we work with the creme de la creme. So companies like Bagmane, Prestige, K Raheja, Embassy, Lodha. These are the kind of clients whom we deal with. On the, on the export side, we now have customers in the US which is Reflection Window + Wall and Win-Pro. That is our major client in, in the US.
Ishan Hemrajani (Glass Wall Systems (India) Ltd): Clients like SRG Global in Australia. They they are also fairly big in in in Australia. So, SRG Global and Multiplex are the two clients that we have in Australia. Overall, we have completed around 158 projects. 158 projects since our inception, and in in US and Australia, today, we have around 15, 16 projects that we have completed. Our strengths are that, obviously, the business model is diversified into three business verticals. Our capacities are fungible. So, it is the same factory, it is the same design team. So, tomorrow, if the if an opportunity presents itself, the company is flexible to address that opportunity in a particular segment because our capacities are interchangeable or fungible between the three business verticals. We have a strong client relationship. Obviously, a lot of the business that we do is with repeat clients, which I think everyone knows on the call. So, very relationship driven business. Yes, we are trying to introduce new clients, and that's the reason that we are all traveling and we are doing it on a yearly basis, too. But a lot of our client is is repeat, and that is also reflection of the fact that we've been delivering quality and timelines over a substantial period. So, a lot of developers today feel very comfortable with continuing business relationship with us. Obviously, our design engineering and manufacturing are are amongst the best in the world. And we spoke about it. The softwares on design that we use are again top of the line available in our industry. So, in terms of infra and people availability, I think we are well poised for future growth. We spoke about sustainability and also experience management. Obviously, my father has been is a veteran businessman. He's been in business for the past 40 years. He acts as a good guide for us in Glass Wall. I myself, I have more than 12 years of experience in Glass Wall. I'm an I'm a civil engineer by qualification. And today in my capacity, I lead the entire operations of the business. So, so overall, we are a very niche business. We account for let's say on a project as a total project cost, facade is anywhere between 7% to 11%, 12%. So, we're a substantial bit of work for for the developer. We hold great leverage over over our clients in terms of the nature of work that we do. Company is diversified into multiple business verticals, and our infra is geared up to allow for growth for the next couple of years without any incremental capex. So, this is this is the business. In terms of the industry opportunity, obviously, there are research reports around this. What I can briefly touch upon is how the business verticals are growing. The domestic facade is poised to grow at a CAGR of approximately 15.9%. Today, it's a 9,000 crore market. And it is it is assumed to grow at around 16 odd percent CAGR and reach around 14 and 1/2 thousand crores by FY30. The global facade market is extremely big. Obviously, you can't even quantify it. It is but we have in in the US the facade market for someone like us who's supplying product into the US is close to 30,000 crores. So, and that is growing at around 6 and 1/2% or 7%. So, I think there's huge opportunity in the export segment, also, for a company like us, who is playing around with a China-plus-one model and where we see that all these countries want to actively de- de-risk themselves from being 100% dependent on China. So, we see that there's a good opportunity there for our company to keep growing. Fenestration is again is is again growing fairly quickly. I think that is growing at 25% CAGR. And it is today a 9,700 crore sorry, it is a it is a 1,000 crore market increasing to a 3,000 crore market over a period of time. So, what's our strategy for going ahead is doing the same things that we're doing. It is it is a new journey for us to be listed. So, while we are learning how to how to you know, communicate and put our story across on the public market, but the basic intent of the business remains the same. It is to keep these three verticals growing, explore new markets on the international side. It is to grow our domestic presence and
Ishan Hemrajani (Glass Wall Systems (India) Ltd): we scale the fenestration side of things where we see that there's good opportunity, so so the future growth is is to keep all these three verticals growing. The three verticals are very different to each other, but the aim is to maintain a good balance going forward between all three. I think before handing over to the CFO, I would quickly recap the deal that we did at the listing time. The IPO size was 428 crores. The fresh issue was 60 crores. The OFS was 368 crores. The 60 crores is obviously what we spoke earlier for the backward integration of the glass processing unit that we spoke about. One needs to understand that our business is obviously a project business, so we get projects and we complete projects, so a lot of our revenue recognition and profit recognition depends on project schedules, and I'm sure everyone on the call knows that there is a certain amount of let's say let's say a preponement or a delay or a move move from initial estimated project timeline on a project related business, so our business also because it is project completely project-based, can move a little bit here and there depending on the project schedule. So, I encourage all the investors today on call to look at this business from a long term perspective at a yearly level, as opposed to quarterly levels which could fluctuate a little bit here and there based on the project schedules. While while we've been delivering consistent growth on a year-on-year basis, and and the same is going to happen this year, my only request is to to have cognizance of the fact of the earlier statement as to the little bit seasonality of our business where we typically see that the first two quarters are fairly slow, and the last two quarters are fairly heavy. So, this trend has been historical, and is is is probably going to continue to be the same. In FY27, we have said this earlier with all our meetings, we are expecting around 25% growth on revenue, and EBITDA margins will be historically in the same range that we have delivered over the past two years, where EBITDAs are what we are aiming to deliver is around 23% to 25% EBITDAs, and 18% to 20% PAT at the consolidated levels. Today, our order book as on 31st July is 982 crores, which is the unexecuted order book that we that the company has on hand. And this is almost twice the revenue of last year. So, this is good visibility for us for the next 18 to 24 months, and a good amount of that will be executed in the balance of the year, as well. So, from a visibility standpoint, I think the company has good visibility. We are we have a strong pipeline. I am trying to develop new markets. We are trying to develop new markets. So, overall, I think from a order book standpoint, the company's very comfortable, and and from a margin standpoint also, we are fairly confident that the end of the year will will be what we are seeing, because we know that the margins that we have taken the jobs at are are at the same level that we are committing. So, I think that's it from my end. I will probably hand over to Sanjay Sawant, who is the CFO of the company, to just briefly touch upon the Q1 results.
Sanjay Sawant (Glass Wall Systems (India) Ltd): Hello. Thank you, Ishaan, and good afternoon to everyone. Basically, let me now take you through the key financial and the operational highlights for the first quarter, FY27. For Q1 FY27, revenue from operations stood at 107 crores, registering a strong year-on-year growth of 36%. Revenue mix, I will just go through this. Domestic business, revenue was 62 crores, up of 93% year-on-year driven by driven by the strong project execution. International business, revenue of 39 crores, down by the 12 12% year-on-year, reflecting the timing of order execution with delivered delivery schedule over the coming quarters, which is generally happens in the third and fourth quarter. Then fenestration business, the revenue of 6 crores, up of rupees 127% year-on-year, driven by the rising demand from the luxury residential segment. EBITDA for Q1 FY27 came at Rs. 23 crore, reflecting the growth of 9% year-on-year on EBITDA EBITDA. EBITDA margin stood at 21.3%. Now, the EBITDA margin were impacted due to a lower contribution from the international business, which is a 36.3% which typically carries a higher margin,
Sanjay Sawant (Glass Wall Systems (India) Ltd): impacted the overall margin performance during the quarter. Employee cost, there is an increase in the employee increase manpower requirement for the expansion and operationalization of the new capacity, coupled with the periodic salary revisions, led to increase in the employee cost. In other expenses, basically include the freight cost, which is now being born by the company in this quarter, and is billed to the customer on cost-to-cost basis, on that we don't get any margin. As per the revised commercial agreement versus a ex-factory billing during the same period in the last quarter. In Q1 FY '26, we were supplying the goods as a ex-works, so all the freight cost was born by the client. Then profit after tax, which is a 17 crore, grew at a lower space compared to the EBITDA growth led by. This is basically lower other income, since Q1 FY '26 we had a 1.6 crore income on account of the property sale. And during this quarter, Q1 FY '27, we have a higher depreciation on account of new capacity expansion commercialization. So, basically this is all from our end. We now open for the question Q&A section.
Moderator (IIFL Capital): Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and then two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. A reminder to all the participants, you may press star and one to ask a question. The first question is from the line of Srikanth from Pinpoint X Capital. Please go ahead.
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