Atlanta Electricals Ltd Q3 2026 Earnings Call Transcript

Operator

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue samples.

The first question is from the line of Kunal Sheth from BNK361. Please go ahead.

Kunal Sheth

Yeah hi, good morning sir. Thank you for the opportunity. Just quickly wanted to get your views on this whole Chinese thing which you obviously clarified in your opening remarks but just wanted to get your sense on. So what is the background where this discussion started? And like you mentioned, you know, if you can reiterate what their intent is.

Anand Sharma

Morning sir. Anisha Madhi I am sure this question is, let's say is on top of the mind for the entire nation or the transmission sector of India actually which has been expanding in tune to match the requirements given by the government of India to generate 500 gigawatts of energy through renewables by 2030. This whole thing possibly is to bridge the supply chain gap, more so in the BTG sector or the boiler turbine generator segment. But I am sure this transmission equipment segment also will not be untouched by this particular. This is what we get to hear from the different sources sitting in the comment.

What we have been able to gather from the sources is that while participation from the overseas parties shall be allowed in the tenders or government tenders, the worry part possibly is coming from the Chinese participation because for other countries it was always open. As far as Chinese participation is concerned, we also are told that fully finished transformers possibly would not be allowed to be imported. So which again zeros us down to the supply of transformer from a manufacturer who is sitting in India which is one manufacturer only. Given the nature of their plant and the kind of voltage capacity manufacturer they are doing, we believe that their order book also is quite healthy because it's not about the. India growth story. The same growth stories getting repeated in the Middle east also is there in US also in Europe also and they have been catering to different kind of export orders since this restriction came in place. So this is what we know as of now. And further, whatever time Niti Aayog or government will roll out some specific, specific inputs, we shall certainly be able to take a note of it and move accordingly.

Niral Krupeshbhai Patel

Just to add to what Anand Bhai mentioned, this is Neeral Patel. Again the initial in the Indian power growth story. India was completely focusing on renewable and recent developments. India had started to move also towards Tamil which has created a surge in demand for boiler turbines and that's the reason this development has taken place. It's more of global economic scenario rather than focusing on one part.

And it's a myth that Chinese transformers would be cheaper. We are in Indian transformer manufacturers and Indian transformer rates are fairly competitive to Chinese rates.

Kunal Sheth

Right. Appreciate it sir. But any clue on when they say, you know this was done to in the supply chain issue, what exactly are they referring to? Because as you clearly mentioned that they are not going to allow fully built transformers or for them fully built boilers or any equipment which are fully built. So what exactly which part of the supply chain are they referring to?

Anand Sharma

People, I would like to repeat my earlier statement that this is primarily to bridge the gap between supply and demand of boiler turbine and generator. As Neel sir just now mentioned that like we saw the announcements of renewable energy generation about two to three years back, Government of India or the Ministry of Power has also felt the need of bringing in more thermal and hydropower generation to stabilize the grid.

And this whole development, I guess the existing players possibly were not prepared and hence this move is allowed to bridge the gap between supply and demand of boiler turbine and generator. So this is primary for btg but other transmission equipments also. We will see the impact coming in. But what exactly would be the impact is something which we would get to know as we get more clarity from the government opinion.

Kunal Sheth

Thank you so much for the answer and best of luck for the future.

Niral Krupeshbhai Patel

Thank you.

Operator

Thank you ladies and gentlemen. In order to ensure that the management will be able to address all. All the questions from the participants in the conference call. We request you to kindly limit your questions to per participant. If you have a follow up question, please rejoin the queue. Again the next question is from the line of Nikhil Abhyankar from UTI Asset Management company. Please go ahead.

Nikhil Abhyankar

Thank you sir and congrats on a good set of numbers. If I see your margins quarterly, I mean bulk of the EBITDA growth is coming from gross margin expansion. So do you think this is sustainable given the commodity price hikes that we are seeing cross going ahead?

Niral Krupeshbhai Patel

Sir, this is Neeril Patel. Commodity prices for transformer manufacturing when we are talking about large transformers, predominantly transformers beyond 66 to 20kV class and 400 majority of them are driven through price variation clause and there's a price pass through mechanism and hence the commodity prices do not end up squeezing the gross margins.

With that said, smaller transformers which are one off requirements from the private sector come with firm pricing and we do book our material rates when and when the order comes. So commodity price inflation we don't see gross margin reduction on that front.

Nikhil Abhyankar

Okay. And sir, for the nine months your sales volume would be somewhere around 13,000 MBA.

Niral Krupeshbhai Patel

Yes it is 13,500 MBA.

Nikhil Abhyankar

And for the full year what would be the guidance?

Niral Krupeshbhai Patel

So it'll be difficult to give you exact guidance on the MBA front but the exact terms that we've been maintaining that we feel continuing with a growth rate of 40% year on year basis and we expect nothing less this year on revenue front.

Nikhil Abhyankar

Understood. And just a clarity on this China thing again. So as you mentioned in the earlier answer. So is the, is the government thinking of not allowing direct imports only from China but might look to import from other countries directly?

Anand Sharma

Nikhil Vaianesh Sharmatisai Imports from other countries was always allowed actually but there is, there are few, let's say reasons because of which nobody possibly other than the incumbent players who have been there in the Indian territory in operating for decades together like so Hitachi and ge, nobody actually has put up any plant in last so many years when the requirement was good or bad actually so there are reasons because the market. Beyond India is more profitable for them. And anybody and everybody, including the Chinese according to us, would like to invest their energies and their efficiencies and their investments for the supply of equipment to the other markets. India has not been a lucrative market for any of these players.

Nikhil Abhyankar

Okay sir, understood. Thank you and all the best.

Niral Krupeshbhai Patel

Thank you sir.

Operator

A reminder to all the participants, please submit your questions to per participant. If you have a follow up question, please rejoin the queue. Again the next question is from the line of Arafat from Indusin Nippon Live. Please go ahead.

Arafat Saiyed

Hi, I'm audible.

Niral Krupeshbhai Patel

Yes, Arafat. Good morning.

Arafat Saiyed

Yes, yes, good morning sir. Thanks for start taking a question and congrats on great set of numbers. The first question is on again. Firstly starting with the revenue growth. So you have a very strong print with the 80% revenue growth. So is it possible to quantify let's say how much come from the volume and also let's say product mix or let's say pricing improvement or and also comment on growth visibility for FY27.

Mehul Sureshbhai Mehta

Good morning sir. So sir, as I told you the revenue growth which came the volume is 13,500 MBA for nine months, 132kV segment contributes 19% and 66kV contributes 32%.

Arafat Saiyed

Okay. And sir, I just want to compile it, I will take it from the let's say, you know, post phone call. And secondly sir, if you look at the margin expanded significantly during the process again led by the gross margin. So just want to understand what is the sustainable EBITDA margin we should factor in for let's say next couple of years, let's say for 20s and 28.

Mehul Sureshbhai Mehta

The margins that have come out from the results they are more or less fair and sustainable. The reason being as we have maintained lower the KV class, more competitive, higher the KV class it is less competitive and the expansion in our growth has come predominantly from 220kV class. Hence higher KV class is contributing better margins.

Arafat Saiyed

Got it sir. Thanks. That's it for myself.

Mehul Sureshbhai Mehta

Thank you.

Operator

The next question is from the line of Anut Shah from Philip Capital. Please go ahead.

Anuj Shah

Congratulations to the entire team of Atlanta Electricals for delivering an exceptional performance and thank you for taking my question. Just a quick question sir. Just wanted to understand that if you can share an update on the approval status from power grid for the Atlanta Trafal plant and if the expected timeline for receiving the clearance.

Anand Sharma

Good morning sir. Ranish. On this side we have got the assessment dates from the power grid for our BDOSE facility which is unit four. So we are expecting to finish that assessment audit within this particular month only. So this shall be a fresh assessment and a fresh approval when it comes to Atlanta Trafo which is erstwhile. Btw Atlanta, that plant was approved by power grid till the time it was in operation. So once we are done with the approval process of Bado's facility we shall initiate a dialogue with power grid for the re approval of the Atlanta TRAPO facility. So that we expect that in next couple of months time it should also happen.

Anuj Shah

Okay sir. Thank you. And what. What is the kind of order book that we are targeting by FY26 sensor?

Niral Krupeshbhai Patel

Approximately 700 crore is our quarterly intake. We expect that to be about 600 crores quarterly intake this year, this quarter also.

Anuj Shah

Okay. Okay sir. That's it. From my side. Thank you so much.

Niral Krupeshbhai Patel

Thank you.

Operator

A reminder to all to limit your questions to two per participant. The next question is from the line of Praveen Motwani from Bank of India Mutual fund. Please go ahead.

Praveen Motwani

Yeah. Hi. Hi team. Thanks for this opportunity. I have one quick question on the order intake of 796 crore. So just wanted to understand are these orders carrying a better margin for you?

Niral Krupeshbhai Patel

Sir, the order intake is coming gradually and all orders are having reasonable amount of margins. These are predominantly coming from our existing customers which we would like to continue in IPT for a long term. Hence the margins are kept pretty reasonable. Only I would not say better or not good. The margins are as as equal as the current quarter last quarter order intake.

Praveen Motwani

So you are saying margins in these orders are equal to what you reported margins in the last quarter, correct?

Niral Krupeshbhai Patel

Yes. Yes.

Praveen Motwani

Got it. So sir, just wanted to understand is there any pricing pressure or the margin pressure in the industry? Because a lot of capacity additions are taking place right across the transformer manufacturers. So are you seeing any sort of pressure in terms of you know, you getting the order from?

Anand Sharma

Good morning sir. Anish, this is certainly a very very hot topic and being discussed on every earnings SC and we get to hear this concern from our investors also. We have been explaining and this is our firm belief that the kind of requirement which is there on the plate against which we if we let's say try to match up the supply side even after expanding, let's say all the players expanding, there would still be some amount of vacuum in the supply side. And hence we do not feel feel that there shall be any pressure on the pricing and a time to come also. It's not there at the moment but we do not expect that to come in a time of next three to four years at least.

Praveen Motwani

Okay. Got it. Got it. Thank you. Those were the questions from my end.

Anand Sharma

Thank you sir.

Niral Krupeshbhai Patel

Thank you sir.

Operator

Thank you. The next question is from the line of Seb Shorabh from ICCA Prudential Asset Management company. Please go ahead.

Saif Sohrab Gujar

Yeah. Thanks for the opportunity. So first question on the order book which is around 2400 crores, what is the average execution period now for these?

Niral Krupeshbhai Patel

Sorry sir, we didn't get your question. If you can repeat once again.

Saif Sohrab Gujar

On the order book part which is roughly around 2450 crores, what is the average execution period now? So this is still one year but now it is much longer.

Niral Krupeshbhai Patel

Sir, we possibly have not calculated the blended average of the order book. But typically it will vary for the voltage class to voltage class. For 220kV class. The minimum commencement period as of date also stands at 9 months to 10 months. For 66kv class it is close to 4 months. And for 132kv class it would be somewhere around 6 months or so. So we certainly can calculate a blended average of the order book we have. But as of now possibly we do not have or we have figured.

Mehul Sureshbhai Mehta

So Sir Nehru decide. So current order book which is unexhibited amounting to 2451cr. We anticipate this to be executed within next one and half year. It will be blended. Few orders will be completed this year itself and few will be spilled over to next.

Saif Sohrab Gujar

Sure. Okay. Just second one. The get go order the 298 crores which we have received for 25 capacity transformers. I think I missed on the opening remarks but what are the say delivery timelines on These and what KV Class Transformers? These are.

Anand Sharma

These are 220 KV Class Power Transformers and auto transformers with a lead time of nine months and then supplies of equal supplies of transformers on quarterly basis. So it will last for around 3/4 post 9 months. There's a condition in utility tenders wherein if you're able to manufacture faster, they're okay to take delivery early. When we say quarterly, they will come out to be about five or six numbers per quarter. So that's how the deadlines are given in the contracts. I hope I answered your question, sir.

Saif Sohrab Gujar

Yeah. Thanks and all the way.

Anand Sharma

Thank you sir.

Operator

Thank you. A reminder to all to limit their questions to two per participant. The next question is from the line of Viral Shah from Ambit Capital. Please go ahead.

Unidentified Participant

Hello. Yeah. Good morning sir. Congratulations on a great set of numbers. Just wanted to understand when you looked at the new facility. Yeah. The wardrobe had started to contribute, right? Yes. For the quarter.

Niral Krupeshbhai Patel

Yeah.

Unidentified Participant

And the depreciation effect which we are seeing for the quarter for the water plant it is completely set in, right?

Niral Krupeshbhai Patel

Right.

Unidentified Participant

And lastly the new new plant. When do we expect the contribution from the last facility which is coming? 15,000 the subs.

Niral Krupeshbhai Patel

The December quarter accounted for one transformer from the fifth facility, the E Truffle facility. Please understand, when the facilities do start there are hiccups. And those hiccups are really supposed to be taken care of. Which we took care of in Vadod. Now we're taking care of it the unit 5 and it will start contributing in this quarter.

Unidentified Participant

So basically and in terms of run rate of order inflow per se. Given that all the five units will be operational, what kind of run rate in terms of order info? Because can we take as a unit.

Niral Krupeshbhai Patel

This is a business strategic decision. We have taken a very bold move of not to take further 400 KV class orders till we execute our first order. We don't want to expose ourselves to the market without a proven product prototype first. As soon as we open up and we develop the first polet KV class transformer, the order intake will substantially improve. Because 400kv class orders do last for about two years. The lead times are month to 18 months, not even 12 months. So they last for more than about two years. And hence the order book pylon will substantially go up once we open the floodgates for 400kV. Current 400kV class orders are actually very very minute orders that we have taken just to prove our prototypes. And these are those prototypes which are generally taken by the Indian transformer sector.

Unidentified Participant

Got it. Got it. Thank you. Thank you Neel Bhai and all the rest of you, thank you so much.

Niral Krupeshbhai Patel

Thank you.

Operator

Thank you. The next question is from the line of Ishwar R from I thought bms. Please go ahead.

Eshwar Arumugam

Hi sir. Thank you for taking my call. So my question is about the broader industry context. As for the our national electricity plan laid out by the government for the period between FY22 and 27 we had a plan, a lot of planned addition. The 400 and 765 KV class, about 3.5 lakh MBA and 2.5, 2.8 lakh MBA approximately. And in between 27 to 32 we have about 3.2 and 1.35 lakh capacity in the 761400 KV class almost. So how much of the 22 to 27 plan is still to be executed and the transformation capacity and how much can be expected to spill over to the next period? Because what we've been heard and we've been hearing from the ground is that there has been a lot of execution delays and right of way issues. So how much do you expect to spill over to the next period? That's my first question sir.

Niral Krupeshbhai Patel

This is a national level issue that you are referring to and unfortunately we would not have those numbers readily available. We can certainly work and provide you these numbers. Yes, there have been certain issues on right of way, on execution delays. But please understand the pace at which India is moving. It is a considerably high pace that the country is moving towards. And in this space certain delays are bound to happen in terms of execution, in terms of taking our weather into consideration in terms of right of way.

However, people once invested would be certainly motivated to capitalize investment by charging the solar power generating side or substations. So the efforts are there in all direction. Whatever this is translating. On our front, we don't see any product movement delays as in a manufactured product usually is sent at site and we don't see any delays on that front.

Eshwar Arumugam

Right, understood. And I wanted to understand how much is our manufacturing capacity for the 765kV class transformers and there's a lot of domestic players are also putting up capacity. How do you expect supply and demand dynamics to look in this particular class and let's say in the coming 3 to 4 year period.

Niral Krupeshbhai Patel

Our unit 5 sir is 765kb capable. It is currently situated at 15,000 MVA capacity with provisions of 3 fold expansions to taking it to 45,000 which we have not started yet. Again with 15,000 MVA manufacturing capacity on annual basis it's a fairly low quantum against the demand that is there in the industry right now.

Eshwar Arumugam

Correct. Okay, and how do you see the domestic market evolving as almost all of the players are putting on capacities and the capacity is almost set to double in the medium term, the two to three year time frame.

Anand Sharma

So this is the need of the hour actually. If people will not expand today, when will they do it actually? So this is the national need and everybody is, has announced the expansion plans. We were a little ahead in our planning and execution of putting up additional facilities. So this is in line with the requirement of the nation actually.

Eshwar Arumugam

Right, right. So that's all the questions I have. So thank you for.

Anand Sharma

Thank you.

Operator

A reminder to all to limit their questions to two per participant. If you have a follow up question, please rejoin the queue. Again, the next question is from the line of Vignesh Iyer from Sequent Investments. Please go ahead.

Vignesh Iyer

Thank you sir for the opportunity. So my first question is regarding the PGCIL audit that was expected to happened in November. Could you give any update regarding the same.

Anand Sharma

Yes, as we talked in our last earnings call also that was expected to be done in the month of November but because of some, let's say issues at the power grid side only this particular thing has been delayed and now we have got a firm date and this particular audit of unit four, which is what was calculated, should finish in this particular month only.

Vignesh Iyer

Okay. Okay. And sir, I read it in your presentation about you know, good amount of revenue around one third of a quarterly revenue coming from. Can you. So can you give me the utilization capacity utilizing for unit for the quarter three.

Mehul Sureshbhai Mehta

Unit has contributed around 160 crores of revenue in Q3.

Vignesh Iyer

Yes, that I. Yeah, I got it. But because that is in rupee term, I just wanted to understand what would have been the utilization of the unit for the quarter. As in the volume.

Mehul Sureshbhai Mehta

Close to 30%.

Vignesh Iyer

Okay. Okay, sir. Yeah, that's all from my side. Thank you.

Mehul Sureshbhai Mehta

Thank you sir.

Operator

Thank you. The next question is from the line of Naman Panwar from Divasia Investments. Please go ahead.

Unidentified Participant

Yeah. Good morning sir. Thank you so much for the opportunity. So on the industry perspective, I just wanted to understand on the best side you have any provided any transformer on that particular project and which type of transfer mostly used to go in that particular project.

Anand Sharma

The best is picking up pace and picking up pace very well. And we expect requirements coming from the best projects in a time to come very heavily. We recently have got one order for one of the best projects. While there are many inquiries which is, which are in the pipeline and which are under active consideration and discussion. So we expect let's say some inquiries to be for getting converted fruitfully in our favor in a time to come in this particular quarter.

Unidentified Participant

And this type of the transformer data you get an order for the basis what type. Basically it's IDT or instrument or.

Anand Sharma

This power transformer only which is in terms of the renewable energy side is counted as a pooling transformer.

Unidentified Participant

Okay, the pooling transfer. Understood. And secondly on the export side, so head up now we don't have a much contribution on the global or export side. So as we see any big opportunity to tap to the global market also or we will be stick towards the domestic only.

Anand Sharma

So our majority focus is going to be on the domestic market only because that's where we are situated. And we certainly have obligation and our duty to fulfill a national requirement. But. Alongside that we certainly have our export specific team working in getting our footprint expanded into the different territories or the geographies across the globe. We received our first sizable order for the export in the last quarter and there are many inquiries which are under active discussions in this particular quarter also. And we are sure that we shall be adding to the tally of the export order book in this particular quarter and that will continue in in a time to come for sure.

Vignesh Iyer

Okay, understood. And lastly, on the bass only. So how much big the big pipeline would be for the best related projects?

Anand Sharma

Come again sir? Did not get your question.

Unidentified Participant

So yeah, so for the beat pipeline for the best related project. So transform for the best only majorly how much would be.

Anand Sharma

We shall have to check a specific figure and get back to you, sir.

Unidentified Participant

Okay then.

Anand Sharma

Yeah.

Unidentified Participant

Okay. Thank you so much for answering.

Niral Krupeshbhai Patel

Thank you sir.

Operator

Thank you. A reminder to all the participants to limit their questions to two per participant. If you have a follow up question, please rejoin the queue. Again, the next question is from the line of Nishita from Sapphire Capital. Please go ahead.

Nishita

Yes, hello.

Anand Sharma

Yeah, hi.

Nishita

Yeah, yeah. Congratulations on a very good set of numbers. So I'm looking at this company for the first time. So I apologize if the questions are repetitive. So I just wanted to ask you mentioned that we get and we enjoy better margins than the industry because we focus more on the higher KV class transformers. So is that going to be our strategy going forward? Like you mentioned that our expansion, growth and expansion comes from 220kv class. So are we going to focus on higher kv class going forward also? And are the margins going to be sustainable at 19% or are there any chance to improve these margins as well?

Niral Krupeshbhai Patel

So it's, it's. I'm sorry if we miscommunicated. It's not that we have better margins than the industry. It is the industry standard wherein the lower KV class is fairly competitive. The higher we go on the KV class front, the margins continue to be getting better and better. Atlanta Electricals historically has been operating under 220kv, so 220kv and below right till 33kv.

And very recent times we have expanded our facility to 400kV and 765kV class orders. As a part of starting, we've received our first 400kv class order and certainly the margins in 400kv class are better than the 200kv class segment. The margin improvement that we see in this particular quarter is because of the output that is coming from the bedod facility. And the borough facility mainly contributes in addition of execution of 220kb glass transformers which is showing a substantial input on our gross margins. So it is not that we enjoy better margins. The whole entire industry enjoys better margins when we go up the KV class ladder. I hope I have answered your question.

Nishita

Yes. Yes, understood. And also you mentioned. Actually I couldn't hear your voices breaking. You mentioned that our quarterly intake for revenue is 700 crores. And how much do we expect that going forward?

Niral Krupeshbhai Patel

Ma', Am, it'll be very difficult to give you a forward guidance on the. On the revenue front. Our quarterly intake of orders is approximately 700 crores as we speak right now. However, going forward we have been maintaining that There is a 40% growth ratio that Atlanta has always been maintained historically. And we intend to continue with the same 40% this year. Nothing less than 40% is what we would expect. We are at about 33% as on today.

Nishita

Okay, understood. Thank you so much.

Niral Krupeshbhai Patel

Thank you.

Operator

Thank you. The next question is from the line of Bala Subramanian from Aryan Capital. Please go ahead.

Balasubramanian A

Good morning, sir. Congratulations for good set of numbers. Sir, earlier you have mentioned engagement with hyperscale data center developers. What technical specifications they are demanding and how does our product portfolio align with that. And secondly, I think we also evaluating radiators and tanks integrations. Is there any plan for a CAPEX for these backward integrations and is there any cost savings are expected because of this insourcing.

Niral Krupeshbhai Patel

On the technology plant? Atlanta Electricus is well equipped for supplying transformers to data centers. We have been continuously quoting on inquiries. These inquiries do take time to find that yes, there will be a separate set of quality requirement on the tank and radiator front. We are also in the process of doing a backward integration capex which is also disclosed in the DRHP that we filed with sebi. The backward integration projects are under planning stage as of now. And we intend to start the possibly by Q1 of next year.

Balasubramanian A

Okay, sir. So how does the order intake pipeline for next FY27 especially for renewables comparative. Traditional grid projects. You could talk about Inverter 2T transformers order pipeline especially.

Niral Krupeshbhai Patel

The inverter duty transformers that order intake that we have is sufficient for the company till our unit 6 which we have recently started construction for inverter duties comes up. Once the unit is started, we would be opening our floodgates also for incremental floodgates for the IDT orders. The inquiry pipeline will continue to be the same till we take a strategic call of not to take. I mean to start taking more of 400 KV class orders. A 600 to 700 crore order pipeline on quarterly basis is sufficient enough to keep the facilities the existing unit 1, 2 and 3 running in running condition. Once we develop the first 400kV prototype is when the strategic call would be there in place to start taking further 400kb class orders. And yes, the pipelines of 400kb class is significantly larger than the lower kb segments.

Balasubramanian A

Got it sir. Thank you.

Operator

Thank you. A reminder to all to limit their questions to two per participant. If you have a follow up question, please rejoin the queue. Again the next question is from the line of Jainam from Sal Toro Investments. Please go ahead.

Unidentified Participant

Hi. Congratulations on a great set of numbers. I just wanted to understand the finance cost which is kind of gone up substantially. So for the first half if I look at it it was about 20 crores and for the quarter three also it was about 20 crores and I think most of the IPO proceeds have been utilized. Going forward what would the finance cost and what is the current debt level of the company? That would be great.

Mehul Sureshbhai Mehta

Sir. Finance cost for Q3 is 20 crores. It has gone up because of the interest cost incurred on TAM loan which was taken for borrowed and BTW acquisition. However as income during our Q2 earning call as well we have repaid varot thumb loan fully and we have also repaid part of the loan which was taken for acquisition. Current long term debt sitting on the book as on 31st December is 65.57 crores. This is primarily for the loan which was taken for VTW acquisition and working capital short term loan. It has 120 corros as on 31st December. Total tallies to 186 corrodes as on 31st December.

Unidentified Participant

So going forward do we see any incremental reduction in debt or are we comfortable with this level of debt and what would the interest cost?

Unidentified Participant

On a sustainable basis. I understand that probably quarter three is a aberration. But what would it be going forward?

Mehul Sureshbhai Mehta

We expect after repaying few of the long term debt our finance cost will come down during Q4. However, this 65 crore long term debt we project and we wish to repay during this fiscal year only.

Unidentified Participant

Okay, understood. And I also wanted to understand regarding an increase in the employee cost quarter on quarter also and year on year. So as well as the depreciation. So what is the reason for particularly for employee cost? First if you could explain why is it increased? Are we and where are we essentially what level of management or which particular function sales function or somewhere else that we are probably adding? If you could provide some texture that would be helpful. And also for the depreciation, does it account for the BTW facility as well for Q3?

Mehul Sureshbhai Mehta

The consolidated balance sheet would definitely account for the BTW depreciation. Also to answer your question, the depreciations are basically coming in as calculated by charge. The reason of employee cost going up is new hiring for unit 4 and unit 5 which were there also partially there in Q1, then in Q2 and then incrementally in Q3.

Also to let you know, the Q3 numbers also account for the increment cycles and the areas paid to the team members who are there, who are there in the company. We would certainly be. Partial increment cycles have kicked in. Partial increment cycles will be kicking in in Q4 for the balance team members.

Unidentified Participant

Got it. And what is the current order pipeline across the board that we are participating in? And what is the typical run rate? Win rate for atlant.

Niral Krupeshbhai Patel

Pipeline is close to 10,000 crores and we have been witnessing hit ratio of close to 10 to 15% in this particular year.

Unidentified Participant

Understood. Got it. Those were my questions. Thank you and all the very best.

Niral Krupeshbhai Patel

Thank you sir.

Operator

Thank you very much. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Niril Krapeshpai Patel. Please the closing comments. Thank you. And over to you sir.

Niral Krupeshbhai Patel

Thank you everyone for joining and for your valuable suggestions and questions and thank you for your confidence in the company. Thanks everyone.

Operator

Thank you very much on behalf of Atlanta Electricals Ltd. That concludes this conference. Thank you for joining with us today. And you may now disconnect your lines. Thank you.