CG Power and Industrial Solutions Ltd (NSE: CROMPGREAV) Q1 2026 Earnings Call dated Jul. 24, 2025
Corporate Participants:
Renu Baid Pugalia — Senior Vice President, Research
Unidentified Speaker
Amar Kaul — Managing Director and Chief Executive Officer
Ajay Jain — Vice President
Analysts:
Ravi Swaminathan — Analyst
Unidentified Participant
Ankur Sharma — Analyst
Bhoomika Nair — Analyst
Harshit Patel — Analyst
Aditya Mongia — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the CG Power Q1 FY ’26 Earnings Conference Call. 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 the conference call, please signal an operator by pressing star then zero on your touchstone phone.
Please note that this conference is being recorded. I now hand the conference over to Ms Reno Bait Bogalia from IIFL Capital.
Renu Baid Pugalia — Senior Vice President, Research
Thank you, and over to you, ma’am. Thank you. A very good evening, everyone. We are here for the 1Q FY ’26 earnings conference call of CG Power Industrial Solutions. From the management team, we have with us today Mr Amar, Managing Director; Mr Sushil Todi; Chief Financial Officer; Mr, EVP, Automation and Industrial Motors Business; Mr Gaurav Makhija, Vice-President for and ECD Business; Mr Ajay Jain, Vice-President, Transformer Business; Mr Balakrishnan, Vice-President, Railway Business; Mr Kahl, EVP Motors Business, India Subcontinent and Mr Sriram Rangarajal, EVP, Head Consumer Products Business.
With these words, I now hand over the call to Mr Amar Kahl for his opening remarks, thereafter we can start with the Q&A. Thank you, and over to you, sir. Thank you. Thank you,, and thanks everybody there. Good evening, everybody, and welcome to the CG earnings call today. Let me start with the summary of results. We have a very strong start of this fiscal year with all-time high quarterly standalone revenue and PBT. After accounting for exceptional items, further, we have also started seeing improvement in our operating margins. Our Q1 sales grew by 25% year-over-year. Profit-after-tax grew by 23% and order intake grew by 56% year-over-year, making it one of the strongest quarterly performance in recent times. Further, our order backlog remains robust at INR11,971 crores and continues to be on the upward trajectory, giving us strong revenue visibility. Now as I go deeper into Q1 standalone performance, we achieved aggregate sales of INR2,643 crores, recording a growth of 25%. Our profit-after-tax, as mentioned, was high with a growth of 23% at INR286 crores as against INR232 crores in Q1 FY ’25. Free-cash flow generated for the quarter was INR339 crores, which is about 119% of PAT and return on capital employed annualized for the quarter was 35%. Order intake for the quarter was INR4,764 crores, which is 56% growth and our unexecuted order backlog as of end-of-the quarter 30th June 2025 was INR11,971 crores, which is approximately 70% higher year-over-year. Now moving to the segment-wise performance, starting with industrials. Aggregate sales for the quarter was higher at INR1,574 crores, recording a growth of 16% year-over-year. PBIT was at INR172 crores of as against INR182 crores in Q1 financial year ’25. And margin changes that you see there is due to rise in commodity prices, which could not be fully passed on to the customers and the increasing share of railway business as well as a mix change there within the railway business is what impacted us. Order for the quarter was at about INR1,06269 crores and unexecuted order backlog at the end-of-the quarter was INR2,920 crores, which is about 19% up year-over-year. If I jump to the Power Systems, aggregate sales for the quarter was at INR1,070 crores with a growth of 43%. Year-over-year, PBIT was at INR225 crores, which is 21% of sales as against INR149 crores in Q1 last year. Margins were higher year-over-year on account of better price realization driven by robust underlying demand and better operating leverage and order intake for the quarter was INR3,495 crores, 111% growth year-over-year and unexecuted order backlog as of 30th June 2025 was at INR9,051 crores, which is 97% up year-over-year. With that, we conclude deep-dive into our standalone performance and I’ll now move to the consolidated performance. At the outset, I would like to share that our consolidated performance for the quarter for the first time includes the operational performance of Xero,which if you would remember, houses our radio-frequency semiconductor components business acquired by us from Renaissource and other affiliate entities during the year — during the last year. Aggregate sales for the quarter was — were up at INR2,878 crores at a growth of 29% year-over-year and profit-after-tax was 11%, higher at INR267 crores against INR241 crores last year’s same quarter. Margin impact due to the invest investment in CG, the impact was approximately INR11 crores and also lower absorption on the fixed-cost in driver automation business in Europe on account of lower sales during the quarter, even though the bookings are seeing the upward trend now. Operating cash-flow generated for the quarter was INR441 crores, which is 165% of profit-after-tax and INR383 crores capex done by the subsidiaries, primarily CGSME. And return on capital capital employed for the quarter was 33%. Order intake for the quarter was INR5,138 crores, 62% growth year-over-year and unexecuted order backlog as of 30th June ’25 was INR13,072 crores, which is 82% up year-over-year. Now moving to few notable events for the last quarter, CG got a large order for supply and servicing of 765 KV transformer package from PowerGrid Corporation, valuing approximately INR641 crores, making it the single highest single order received by Transformer business in CG. The order is expected to be completed over a period of 18 to 36 months, even though I think we can do it much ahead of time. GG subsidiary of the company received a prestigious order towards station train collision avoidance system and referred to as Kavage for about INR148 crores. The scope includes supply installation, commissioning of station coverage and other associated system in Northwestern Railway executable for over a period of two years. CG secured the largest single order of INR244 crores for EHP business from Technoelectric for supply of packaging instrument transformer circuit breaker and also the Lightning estras. CG launched and successfully completed QIP of equity shares and raised about INR3,000 crores and the issue was opened on 30th June 25 and closed on 3rd of July. It was oversubscribed by more than three times and saw the participation from Indian and global marquee investors. With this, I will conclude my opening remarks. Unaudited financial statements with detailed notes are available as part of the stock exchange filing as well as on our company website. Thank you for listening-in and over to you, Renu, for Q&A.
Questions and Answers:
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 1 on their 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 assembles. The first question is from the line of Ravish from Avendus Spark. Please proceed.
Ravi Swaminathan
Hello. Hi, sir. Thanks for taking my question and congrats on a good set of numbers. My first question is with respect to the industrial segment. We have seen around 15% kind of revenue growth during this quarter. If you can give a flavor of how the growth was in certain key sub-products like LT motor, HD motor and even within railways, the regular propulsion systems for locomotives, the ones for Bharat, how the revenue has panned out and visibility for coverage orders and also exports, if you can give a flavor on how the growth is trending on all of these sub-segments, it will be really great.
Renu Baid Pugalia
Yeah, sure. Thanks for the question. So on the industrial segment, if you see the growth has primarily come from the railway side. Having said that, the good news for motors also, even though if you look at the indices for industrial, both for IIP as well as the EMA data showed the negative trend for the quarter as well, which has been consistent for last couple of quarters.
But good news is that motors business went up, of course, not on the very-high digits in growth, but then yes, some decent progress on that. So which shows that the efforts and the actions we are taking in the business, not only from the commercial point-of-view in the market as well as the operational OpEx piece of work that we are doing it started showing some bit of results on that.
And you talked about even drives and drives and automation business, as I mentioned, for the subsidiary, the revenue numbers are not-so-good there, but the good news is that bookings have started flowing in, which means it’s just the execution now. So yeah, some bit of improvement you will continue to see there.
Ravi Swaminathan
Understood. And with respect to the coverage order, last year, we got around INR800 crores of orders and this year first-quarter around INR180 crores of orders we have got. What kind of — what kind of run-rate should we kind of look at every year annually over the next few years for coverage should be — should it be in that INR800 crore to INR1,000 crore kind of range?
Renu Baid Pugalia
See,, I think the focus, I would say almost 99% focus is on the execution piece of it. And we are almost reaching that stage to start executing it now because the approval process is almost — I think all the test results have happened, passenger trials are in-progress right now. So we are progressing fairly well on that. So having said that, I would expect at least every month at least 100 installation commissioning happening starting in next couple of months there. So that is one-piece of it. And second, of course, I’m not giving any guidance or forward-looking Statement, but the point is the business opportunity is phenomenal. It’s just the strength of our designing and executing these orders on-track. So the better we do it on-time and at the lowest time of executing and commissioning the coverage both for as illustration, more-and-more orders will keep getting. And with respect to the propulsion systems for the kind of trains.
Ravi Swaminathan
We had last year won a contract from the RVNL JV. Is there more to come from that particular JV? And is there a possibility of securing orders from other people who are executing or other companies which are executing the trains.
Renu Baid Pugalia
Yeah, of course, I think one is the order that we receive that team, they are busy into designing and executing that order. Having said that, appetite is much bigger. So we are also exploring other opportunities, not only with, yes, with other partners as well. Got it. And if you — my final question is, if you can give a broad split of the industrial segment.
Operator
Sorry to interrupt, sir. May we request you to join the queue again for your follow-up question.
Ravi Swaminathan
Sure.
Operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your question to two-to-one per participant. The next question is from the line of Jonas from Birla Mutual Fund. Please proceed.
Unidentified Participant
Congrats team on a great set of numbers. You know two quick questions. First, what explains the increase in the power inflows, the power segment inflows, which were trending more closer to INR1,800 crore to say maybe INR2,000 crores quarterly, they seem to have come in closer to INR4,000 crores. So are we to assume that this is in anticipation of the new plant going-live probably during the year?
And if you can explain given that you have outgrown the industry in terms of order inflows, at what incremental margin levels have these orders come?, I
Renu Baid Pugalia
Think good question on that. So these are across power sector transformers as well as switchgear and included together. Why we are outgrowing is because we are expanding in terms of our pipeline, our go-to-market rather than being conservative on requests or code that we are getting, we are actually going out-of-the market to make sure that we are capturing and increasing the pie of pipeline of orders and that’s where the win percentage is also increasing.
To your question specific to margins, yes, they are at decent margin that we would look-forward to. So we are not compromising on margins to get more orders.
Unidentified Participant
Just a continuation, what would be the mix of the power order backlog now between, say, PP and switchgears? Roughly.
Renu Baid Pugalia
See, the split we are not giving, but I can only say that both are trying to beat each other. So it’s a good game to have.
Unidentified Participant
Understood. And the second quick one is on the margins of the Industrial Systems, so you know, either on a Y-o-Y or on a Q-on-Q basis, we’ve seen a deterioration in margins while you’ve elaborated what led to that. If at all, you can give us a broad bridge as to if there was a 300 basis-points deterioration in on a year-on-year basis.
How much of that came through the sales mix impact due to railways and how much of it is because of this raw mat impact?
Renu Baid Pugalia
Your question is specific to industrial or motors?
Unidentified Participant
Yeah, industrial, so we’ve seen roughly 300 basis-points of margin deterioration.
Renu Baid Pugalia
So how much of it is on the rate. Yeah. Yeah. It’s — I would say the majority of the impact is coming from railways because of this PVC clause, which is price variation clause that is there. I think it’s a bit complex from Indian Railways. So you really don’t end-up getting a complete inflation back into your numbers, so you keep on getting the impact.
So having said that, what the team — railways team is doing is also they worked on I2V, which is more of VAV kind of a thing, what can we improvise over and above what you are not able to pass-on. As you know, it’s a tender business. So back to your question, majority of the impact is from railways and a bit from motor side and then motors, as I mentioned last quarter as well, the action that we are taking, we recently increased our prices by almost 5% starting 1st of July. I think that is — that will start showing us some results in the subsequent months.
Not immediately because you take about two, three months for it to show off. But yes, we are taking actions on the commercial side for the market and also what can we keep eliminating the non-value added activity in the system.
Unidentified Participant
Got it. Thank you. I’ll fall-back in the queue. And all the best.
Operator
Thank you. Thank you. The next question is from the line of Ankur from HDFC Life. Please proceed.
Ankur Sharma
Yeah, hi, sir. Good evening. Thanks as always for your time. One question on the LT motor side, and I know you’ve been flagging off the fact that the LT Motor market has been kind of stagnant to maybe a marginal decline for maybe four, five quarters. So one, are you starting to see any hints of a recovery?
And I understand we’ve been growing because of our own initiatives, but more from an industry point-of-view, when do you believe this growth kind of comes back, which sectors do you believe need to start firing to get this growth back?
Renu Baid Pugalia
Yeah. So I think LT motor important is hello. Ladies and gentlemen the master, I’ve got disconnected yeah ladies and gentlemen we have Mr Amur on the line yeah coming back to the LT motor question that you had yes, market has further deteriorated. So we don’t see that revival happening.
But as I said, it’s positive, but he has a bit of impact on the margins, which as I mentioned, we are countering by already increasing the prices in the market effective July?
Ankur Sharma
Okay. And in your view, when do you believe we could start seeing some recovery? Is it going to be more second-half? Are you seeing any signs there? And also which segment end-markets you believe could drive that recovery
Renu Baid Pugalia
Even the market recovery, I don’t see — again, market recovery, I cannot forecast. It purely depends on the way it works on the industrial piece is when this smaller capex starts coming in. Now that we are not able to see in a large way, yes, a bit of activity we can see, but not too much of it.
So that obviously will depend on the sentiments and the mood and how this market will come. But having said that, we are not 100% dependent or important is to see which areas or verticals we are not there, that’s where we’re trying to penetrate into. And that’s where we see the — that we are doing better than the market.
When the market is negative and we are still positive, I think that’s where the growth is coming from.
Ankur Sharma
Sure. I get it. And just the second one on the power side, if you could help us on your current utilization levels across your plants and are you facing any capacity constraints there. On the power sector, that’s right. On the power side, on the power sector side?
Renu Baid Pugalia
Yeah. I mean the capacity is of course the issue right now for the — across the globe, not only in India and that’s why you see huge impetus that we have on increasing our capacity. So yeah, so it’s in a full acceleration mode. And two things. One, one is the existing plant getting up to 40,000 capacity — MBA capacity that we had already mentioned.
So by September, we’ll be up and running to that from current approximately 20,000 MBA. And also this 45,000 MBA, the work has already started construction for the new plant. That’s already bigger.
Ankur Sharma
Okay, got it. Thanks.
Operator
Thank you. The next question is from the line of Anikit from Motilal. Please proceed hello Aniket sir As we have no response, we move on to the next participant. The next participant is — the next question is from the line of from Nuvama. Please proceed.
Unidentified Participant
Good evening, sir, and thank you for the opportunity. Just wanted to get a sense of if we have to take a view over the next 12 to 18 months, how do you see the longer-term margin stabilizing across power, railways and the industrial piece,
Renu Baid Pugalia
See, I think it can only get better in my opinion and there I think we can keep talking for next couple of hours on why do I say that it’ll continue to go better. And overall at company-level, if you tell me, I think at some stage, we’ll bounce-back to, 14% 15% PBT margins.
Unidentified Participant
Understood. So do you see the current levels of margins, at least on the power side, which seems to be the highest traction you know that continuing around this 20% odd levels?
Renu Baid Pugalia
It should go even better than that. My expiration is much bigger.
Unidentified Participant
Understood. And sir, lastly, I think you had talked about some large potential for exports, especially on the motor side, I think in the last call. Just wanted to understand what is the progress on that side, where do you think — where you see things moving?
Renu Baid Pugalia
No, I think it’s progressing well. As I told you, we have been doing the foundational work, which JK has been increasing and improving on the capacity, working in collaboration with Murray, who has been making investments in terms of go-to-market, having our people in respective regions.
So today, if you see, we have the presence in Northwest, French Africa, in Africa, even Europe, some of the countries we have added some of the headcounts to increase on the channel. So the action is on. And of course, as you know, to get — to see the real effect, it takes you couple of quarters to reach there.
So getting partners onboarded, having our people footprint on the role and also having the manufacturing capability building. So that all is going on. So good to share that in fact, when we had the business review couple of days back, I’m happy to see the progress we are making in those areas. So yes, good days ahead.
Unidentified Participant
Understood. Last question from my side. On the semiconductor piece, by when do you expect to start seeing the larger ramp-up and meaningful revenues and bottom-line coming from this.
Renu Baid Pugalia
Any JD. It’s — so semiconductor, you know, there are two portions to that. One is CG semi and one is at zero. Now CG semi is absolutely on-track. The mini plant as we had projected ’26, it will start production and the main plant, which is a large — larger one will start production in ’27.
So we reviewed the project and I think they are in fact little ahead of the target. So that is doing good. And Xero, which is our radio-frequency design — chip designing facility, the business that we acquired, in fact, their revenue will start already flowing in. So — because that was a direct movement at acquisition of this facility.
Unidentified Participant
So, yeah. Understood. Thank you so much.
Operator
Thank you. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your question to two per participant. Thank you. The next question is from the line of Richard from SBI Pension Funds. Please proceed.
Unidentified Participant
Good evening, sir. So this is just a broad policy level question because over past few months, if you have seen Chinese actions, it seems that they are indicating that they don’t want India to become a manufacturing hub. So in light of that, I mean, has there been any change in the attitude of government towards companies which are specializing in manufacturing?
And that is the first one. And the second one is, what is SIG’s thought process about this because this opens up a lot of avenue for a company like us. Are we looking at the newer areas?
Renu Baid Pugalia
Yeah, thanks. Thanks for the question. So first one, obviously see macroeconomic trends and the political discussion between the countries, honestly, that will keep happening. So we don’t tweak our strategy every second day-in line with that. So if not China, if not others, you will have opportunity for the whole world.
So it doesn’t change our manufacturing footprint strategy at all. We continue to progress on what we have planned for. To your second question was more on the same thing. How — what the company is thinking about that if these things are happening. Yeah. So I think we will keep on investing.
One is the portfolio that we have across different businesses. I think that itself is a huge opportunity across the globe that we have, including India. And of course, as we move forward, anything on the adjacencies of each of the businesses that makes sense for it, yeah, we’ll be open to look at those opportunities.
Unidentified Participant
Okay, sir, maybe I’ll come back later. Thank you.
Operator
Okay. Thank you. The next question is from the line of Humika Nayer from DAM Capital. Please proceed.
Bhoomika Nair
Yeah, good evening, sir, and congratulations on a good set of numbers. Sir, my first question is on motors. You spoke about the weak demand and how we’ve outgrown the industry for the last several quarters. Now in this weak demand environment, we’ve taken a 5% price hike effective July.
Is this something that the rest of the peer set has also seen? And do we expect that this could possibly impact our market-share gains that we’ve seen in the last couple of quarters?
Renu Baid Pugalia
Yeah, Vumita, thanks for the question. See, the point is, we for the motors — LT motors, we are the market. So we got to define what should the pricing in the market. So after we increased our pricing by 5%, the good news is a lot of competitors are following what we are doing.
And I think that’s the way you actually continue to be the market-leader. So I’m happy with what I’m doing. So it doesn’t mean that when we increase by 5%, you will not have the yield of 5%. So even if you have a yield of 50%, I think from pricing discipline point-of-view, that’s a good step forward.
Bhoomika Nair
Sure. And there’s not a similar price increase in the HD motor. HD motor, the pricing has not been changed.
Renu Baid Pugalia
HT Motor, it’s more of customized motors because every motor would be unique, it’s like building a Taj. So every time you have to carve-out a different design and then accordingly price it.
Bhoomika Nair
Sure. So I mean, how is the demand on the HD motor panning out with these niche solutions, our market-share is obviously there is — while it has increased but is not as strong as the LT motors, so how is the demand and our share kind of increasing as we moving ahead?
Renu Baid Pugalia
I’ll pass-on that question if JK, if you are there, how do you feel about SG Motors market?
Unidentified Speaker
Hey, absolutely. Thanks, Amar, and thank you for the question. There is a big demand in the market and we are right now or serve market is very small. We are we are serving a smaller portion of the market. We have plans in-place where we are going to invest on the design and we want to expand.
We want to expand — have more of verticals attacked to work with. This is one of the priorities I am personally working is how to have a bigger market-share and a better market-share and expand the overall market — served market for us. This will be our key focus area. The demand there definitely is — there is a big demand, but we will have to have the right set of solution for our customers.
Bhoomika Nair
Sure, sure. That helps, sir. So just secondly on power.
Operator
May we request you to join the question queue as we have other participants in the queue.
Bhoomika Nair
Sure, I’ll come back. Thank you and all the best.
Operator
Thank you. The next question is from the line of from IIFL Capital. Please proceed.
Unidentified Participant
Hi. Yeah. Hi, good evening, sir. Just two quick questions. First, can you share updates on where are we with respect to commercial volumes for EV motors? And secondly, on the export front for motors, can you also elaborate for what type of applications are we targeting the export and any particular region which are high-priority regions for us apart from Africa, Europe where you mentioned you’re setting up distribution and GTM? Thank you.
Amar Kaul
Yeah, so thanks,. So I think on the EV motor, I would say we’re still in the beginning of it. I would not claim that we have got the secret sauce. So first thing is for the three-wheeler motor and the drive, we are ready there. The motors have already been tested. They have passed the homologation for individual motor and inverter.
They are at testing at the OEM levels at the auto company-level . So hopefully next few months, we’ll get the approval and that will start the supplies piece of it. So for others, we are actually still in the development-stage for the larger trucks. The development of that is still in phase. So, still a bit of long way to go there.
Bhoomika Nair
Sure. Anish, can you elaborate the specific applications are we targeting on the export segment for motors or these would be standard motors — anti-motor segment only?
Amar Kaul
You mean EV or are you talking about reduction?
Bhoomika Nair
No, conventional motors for exports.
Amar Kaul
Conventional motors for exports will be the similar portfolio that we have. One is the industrial priests, which are those small multimotors as well as the customized motors. As we get more-and-more experience into we have the right skill-set team sitting across divisions because when you’re exporting motors, you also need to have service centers there. And that’s what the team Maray and team is busy setting up right now. So it will be for both.
Bhoomika Nair
Got it. Thank you and best wish team.
Operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your question to two per participant. Thank you ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to one per participant.
The next question is from the line of from Motilal. Please proceed.
Unidentified Participant
Hello. This is Shinde from Motilal Oswal agency. Sir the recent order which we received of INR400 crores from Kinet Energy railways. That we have started executing and that is actually impacting our industrial Systems segment ordering — sorry, profitability or it is yet to execute?
Amar Kaul
No, I don’t think so. I think execution has just started. So the team has started working on it. And I think that should give us good days ahead. So it is the routine business and the mix that has changed between more skewed towards traction electronics, that’s where the impact on the margins has come with the railways, whatever reverse auction that they do and that’s where the impact has come. But yes, to your question, no, nothing related to Kinnet.
Unidentified Participant
Okay. Okay. And in power, if you can provide insights that the kind of a trajectory which we are seeing in the order inflows, what kind of a visibility we see over next one year, especially because of the T&D capex going on? And how we see our capacities which are going to come, will be utilized over next two to three years.
Amar Kaul
I think, the — for power, honestly, I’m very, very bullish for even next five years. I would not worry about. I think we’ll keep expanding our capacity. Obviously, as we progress and keep looking at-the-market, get our feet on-the-ground, we’ll keep expanding it further. I don’t think with even 85,000 MVE capacity that we have invested, we’ll be satisfied with that.
But again, it will not be a knee-jerk reaction. As we get more stronghold on our pipeline, it keeps swelling, we’ll keep adding capacity. So basis all the data that you see, all the forecast and what we see on-the-ground next five years, nothing is going to happen. It will keep going up.
There will still be capacity — the capacity versus the demand gap will always stay there globally.
Unidentified Participant
Got it. Thanks, sir. I’ll come back for the question.
Operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to one per participant. The next question is from the line of Umesh from Nuvama. Nomura. Please proceed.
Unidentified Participant
Hi, sir, good evening and congrats for the healthy set of numbers. Sir, my first question is pertaining to employee cost. So we have seen 52% increase in the cost year-on-year basis. Is it largely on the account of new operations getting started for or investment into CD Semicon?, hi. So you are looking at a total consolidated number, am I right?
Amar Kaul
Yes, yes, sir. Yeah. So it’s coming out to as well as that you know that we did an acquisition of. So that also is coming as you know in that business the staff cost and the employee cost would be much high.
Unidentified Participant
So any other costs you have incurred upfront for the because margins for looking like are lower single-digit range currently. So when we can expect stabilization for that particular business?
Amar Kaul
So, yeah. So these are as a part of the transaction, the initial setup that we have put up there. So I think that is what is showing there. But yes, first year, as you know, any acquisition that happens will be the transition year and then you will see the upside going there. And that’s specific to zero.
And I think CGME itself, if you’re looking at employee costs at a consolidated level, yes, I think there are almost 170 people almost already on-board and with no revenue. But again, we’ve made that investment. It’s more strategic investment because they are — most of them have been trained right from operators to engineers in various plants of our partners outside India. And right now they are on-the-job of learning.
So our lead-time to from manufacturing start till you start the shipments will be compressed with the investment that we are doing now.
Unidentified Participant
Got it. Thank you. Thank you so much.
Operator
Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your question to one per participant. The next question is from the line of Atul Tiwari from JPMorgan. Please proceed.
Unidentified Participant
Yeah. Thanks a lot, sir, and congrats on good set of numbers. Sir, in CG streaming, how much is the total capex that you have done so-far so that’s approximately around INR400 crores and between now and end of 2027 you will end-up doing roughly 76 billion so the entire thing will happen now like over next two years. Is that right understanding?
Amar Kaul
So for overall including subsidy, yes, including subsidy, you are right. Or I would say the capital support from the government, not a subsidy. So our contribution — our contribution would be around INR1,700 crores.
Unidentified Participant
Okay. So the — so I thought the subsidy was 50%, right? So if the total capex is INR76, then your contribution will be higher. Is there some change in that or?
Amar Kaul
No, so that we said, we initially we have been talking about the 50%, it’s a kind of support, capital support from the central government and between 20% to 25% support from the state government and rest would be given by CG and other partners of the CG.
Unidentified Participant
Okay. And the support from the state government will also be available before the production starts or it will come only after production.
Amar Kaul
So that discussion is going on with the state government and might be — it may be on the similar line what the central government is doing.
Unidentified Participant
Okay. And in this.
Operator
Thank you. The next question is from the line of Harshit Patel from Equirus Securities. Please proceed.
Harshit Patel
Thank you very much for the opportunity, sir. Sir, my question is on the Xero. You have explained that given that this is the year of transition, the margins are slightly on the lower side over here. So sir, over the medium to long-term, what could be the stabilized steady-state margin for this particular business for us?
Amar Kaul
So see, as I said, first year for any acquisition will be the transition year, there’ll be some upfront cost setting up, we set-up the office in Bangalore with the lab there. So all that is transition. So it won’t be apple-to-apple conversion. But yes, specific, we are not giving any guidance, but the way they have performed before, it will be easily a double-digit margin.
Harshit Patel
Understood, sir. Thank you. Thank you very much.
Operator
Thank you. The next question is from the line of Aditya from Kotak Securities. Please proceed
Aditya Mongia
Yeah, thank you for the opportunity and congratulations on a very strong set of numbers. I just wanted to get more color on the big uptick in inflows happening in the power side and the go-to-market strategy. Could you give us a sense of the split of the orders that you have won between domestic and international? And any more color and as to what exactly is the company doing to gain market-share would be would be useful. Thank you. That is only questions?
Amar Kaul
Yeah. So I think the majority of orders one are all domestic. It’s primarily from India. So there’s not a big skew that has happened before And after for exports. So it’s almost in the same proportion. So not much of a change here. But important is we will continue and we are continuing to keep building on our pipeline. And pipeline from where, obviously that is little bit company confidential, so not reveal that too much unless it gets converted into the order.
Aditya Mongia
Okay. Understood. That is my only question. Thank you.
Operator
Thank you. The next question is from the line of from Ambit Capital. Please proceed.
Unidentified Participant
Hi, thanks. I just want. So if you can just elaborate on service business, what efforts you are taking there? And if you have any target in your mind, let’s say, by 2030? Thanks.
Amar Kaul
I think very good question and I love that service is my passion. So, but as of today, if you tell me, give me a clear roadmap of service business till 2030, my answer is, I’m not ready right now. But is that the business that will show us results in future? Absolutely. And are we working on that?
Yes, for at least three of three or four and four business leaders in this call, they are actively working with their teams along with me and the strategy team to develop a model, which will be unique. When I say service business is actually a multi-stage service business. It’s not simple that you get a spare part order or you get a service order.
I mean that will continue to happen. What I’m talking about is full-fledged five years, 10 years contract and taking the full responsibility of the products that we are supplying or also at some stage, we get into, for example, motors like the way you have SaaS, we have motor as a service kind of a package where we make the investment for you and we sell you the energy efficiency.
So those are the steps where we will get into. But yes, we are not prepared already on that right now because it requires a lot of hard work, which we are doing.
Unidentified Participant
Okay. I’ll get back-in the queue.
Operator
Thank you. The next question is from the line of from Jefferies. Please proceed.
Unidentified Participant
Okay. Hi, thanks for the opportunity. Just wanted to get a bit more sense on the semiconductors, the incentive. I think it was very referred to in a previous question, but just could you clarify? So the subsidies that you are or the incentives that you’re set to receive, are they already being booked as received or only once the facilities are operational?
And yeah, just if you could give some clarity on that.
Amar Kaul
Okay. No. So this is not a subsidiary support like capital support. So subsidies always it comes little later once we invest it. So it would be more like a Pari, like we — the money going into the pool and then coming from the every stakeholders and then you’ll go into the suppliers. So this is the way it will enter model will work.
Unidentified Participant
So it only come — so it will come while you’re investing, not necessarily only once the facility is operation like a subsidy. It’s being put in all yet together from the start?
Amar Kaul
Yeah, yeah. You are right.
Unidentified Participant
Got it. Got it. Thank you so much.
Operator
Thank you. The next question is from the line of from SBI Life Insurance. Please proceed.
Unidentified Participant
Thank you. Sir, we have a strong inflow in the power segment in this quarter. Just trying to understand, have we started booking orders for the new facility which is coming in September for Transforma yeah.
Amar Kaul
I think that’s a very good question. And as I said, the construction has just begun there. So hopefully next two months, we’ll start booking the orders. Ajay, you want to add to that?
Ajay Jain
Yes,, once the construction starts, we will start taking orders. Our focus is on taking short delivery orders there. So where we can start delivering within 12 months.
Unidentified Participant
Okay. And sir, actually, I was working for the extension of the existing facility transforming facility, which was supposed to come in September.
Amar Kaul
Yeah. So that is on-track as I mentioned. So it will go to about 40,000 NBA by September.
Unidentified Participant
Okay. And sir, the second one, sorry to-end up.
Operator
Can you just get-in the question queue. Okay. Thank you. Thank you. The next question is from the line of Uttam Kumar from Avendus Spark. Please proceed.
Unidentified Participant
So thank you for taking my question. My question pertains to power systems. So today, we have close to INR9,000 crores of orders and we are continuously seeing strong traction in terms of order inflows. The first thing is, I want to understand on this INR9,000 crore order book which we have, what is the execution period for this?
And what is the kind of revenue which we are looking at for this full-year? I mean a rough range, it is also I think would surprise. And the question from that is on the export market. So what’s happening on the transformer side? Because we have been stating that we have been also trying to look at the exports side of it for the transformer space. Have you started any exports or is it going to be at the later-stage of the year? More color on those also will be helpful.
Amar Kaul
Yeah. Yeah. The backlog that we have for Transformers specifically, I think with the latest order that we got, big one, it’s up to 26 months, but I don’t think we have to really wait for that long. We should be able to execute everything in next 18 to 2022 months. And then that’s the reason also why we have to keep filling up the pie and bring it there.
To your question on export piece of it, yes, the work is continuing there, what we have been doing, but we’re also looking at strategic lever how to play a bigger game in that market as well. So that work is in-progress.
Unidentified Participant
Got it, sir. Thank you.
Operator
Thank you. Thank you. The next question is from the line of Omesh Shah from Nomura. Please proceed.
Unidentified Participant
Yeah, hi, sir. Thank you so much for the opportunity. My one question. MR. Omesh, can you be a bit closer to the handset? Is it audible now? Yes, sir. Yeah. So my question is pertaining to Industrial Systems and for subsidiary business. So if I look at performance for subsidiary business for Industrial Systems, it has remained more of volatile since last few quarters and I think margins are also hovering in the range of negative to about say as 10%.
We have done margins of about 10% to 15% few quarters back-in this particular business. But I think now those are quite struggling. So any reason over here and how soon we can expect margins kind of reverting back to low double-digit range for Industrial Systems systems export business or subsidiary business hello, am I audible?
Operator
So the line may have got disconnected Ladies and gentlemen, we have the management again on the line. Yes, sir, you may proceed.
Unidentified Participant
Hello moderator yes sir. Yeah, so should I repeat my question?
Operator
Yes, please.
Unidentified Participant
Yeah. So sir, if I look at our business in the Industrial Systems, which is falling under subsidiaries, so there we have seen — quite a bit of volatility in terms of margin performance. So I just wanted to understand this is also kind of impacting on the overall margins for industrial business. So how soon we can expect more of steady performance from those subsidiaries?
Amar Kaul
Yeah. So from subsidiary piece, yes, it’s — I think what we could control, that has been done in terms of cost and control, but the good news is that the bookings has seen the upward trend. So which means that we continue that momentum and it will show-up in revenue in the forthcoming months.
So fixed-cost is already taken care of. So any increase in revenue will actually make sure that your margins are improving consecutively. And that impact on the overall industrial business, I would say that is the third one, very, very small portion because the size itself is not very big.
Unidentified Participant
So important for us in terms of exports as we have signed now and there is a probable engineering goods export opportunity for us from it?
Amar Kaul
So can you repeat your lost you in-between?
Unidentified Participant
So I was asking about a freight agreement, which has now signed today between India and UK and possible engineering goods export opportunity because it is coming under zero tariff now. So what are your views on this particular opportunity?
Amar Kaul
I think we will have high-level because it just happened. And so we have to see what does it mean in terms of exports, honestly, we are not very, very big. So yeah, we have to evaluate and then look at it. And if you see honestly, this trade agreement and tariffs, et-cetera, it doesn’t impact us too much because if you look at our model for exports, it’s mostly FOB or ex-works kind of thing.
So it still goes to customer. And when we interact with customers, most of them are like any change like that happens, we’ll have to pick it up, so they don’t dump it back on us. So we won’t be too worried about these macroeconomical changes.
Operator
Thank you. Due to time constraints, that was the last question. I would now like to hand the conference over to Ms Pogalia for closing comments. Thank you and over to you, ma’am.
Renu Baid Pugalia
On behalf of IIC Securities, I would like to thank everyone for the patience preference and the management for giving us the opportunity to host the call. Amer, any closing comments that you would like to make for the day?
Amar Kaul
No, thank you so much. Thanks,, and thanks everybody for joining us. Really appreciate and value your relationship with us. Keep investing with us and we’ll keep working hard to make sure your investments are secure and keep growing. Thank you.
Renu Baid Pugalia
Thank you.
Operator
Thank you. Thank you. On behalf of IIFM Capital Services, that concludes this conference. Thank you for joining us and you may now disconnect your line