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Dai Axis <4245> is focusing on India, where the market is strong and the operation of the new factory, including the stabilization of manufacturing quality, has started to become more pronounced, with revenue reaching 328 million yen (153 million yen in the same period last year) and an operating loss of 20 million yen (loss of 90 million yen in the same period). A significant increase in revenue has been achieved, and profitability is becoming visible. Similarly, in Sri Lanka, the revenue achieved 141 million yen (36 million yen in the same period), and operating profit was 9 million yen (loss of 9 million yen in the same period), leading to profitability. Indonesia also saw an increase in revenue to 152 million yen (124 million yen in the same period) and a decrease in operating loss to 20 million yen (51 million yen loss in the same period). While large projects are steadily being awarded, completion is expected in the second half of the fiscal year, leading to an anticipated profitability for the full year. On the other hand, China, where there is a decreasing trend in equipment investment demand from Japanese companies, saw a significant decline in revenue to 66 million yen (164 million yen in the same period) and an operating loss of 32 million yen (profit of 46 million yen in the same period), resulting in a substantial decrease and recording of an operating loss. Despite the challenges faced in China, there is a view that the momentum of growth in India and Sri Lanka surpasses those challenges.

On the operational front, in India, progress is being made on the state-owned railway's "Station Renewal Project" and the Ganges River purification project, as well as in Sri Lanka, where projects such as the successful order of a residential project from the largest developer are progressing smoothly. Additionally, in Bangladesh, where a new base has been established, efforts are being made to establish relationships with local government agencies and construction contractors.

Regarding ※1, the manufacturing of septic tanks for the first batch of 10 stations around Delhi has commenced. Additionally, additional orders for septic tanks for 4 more stations have been received, along with the signing of a 10-year maintenance contract.

For ※2, the first section of the first phase of the tributary purification project under the Ganges River purification project, awarded in March 2022, has been completed, and construction is progressing on the second section (due to the impact of the Indian Lower House general elections, the schedule is currently being reevaluated and reconstructed). Also, the civil engineering work for the second phase project is completed, and product shipments are being prepared.

Regarding ※3, it includes holding a commemorative ceremony aimed at establishing partnerships with local government agencies and construction contractors, exchanging views with the Minister of Housing and Public Works who visited from Japan, conducting factory tours, as well as the first order for a government residence septic tank as a local subsidiary.

(Written by Fisco Guest Analyst Ikuo Shibata)