Quality Power Electrical Equipments Ltd (NSE: QPOWER) Q1 2026 Earnings Call dated Aug. 08, 2025
Corporate Participants:
Unidentified Speaker
Siddarth Bhamre — Head of Institutional Research
Bharanidharan Pandyan — Joint Managing Director
Sarika Jadhav — Senior Vice President, Finance
Rajesh Jayaraman — Chief Financial Officer
Sachin Shetti — Vice President, Finance
Analysts:
Unidentified Participant
Pritesh Chheda — Lucky Investment Managers
Nemish Sundar — Analyst
Rahul Agarwal — Analyst
Dev Gulwani — Analyst
Nishita — Analyst
Sanjay Jain — Analyst
Viraj Mahadevia — Analyst
Akshay Kaila — Analyst
Hitesh Randhawa — Analyst
Yashovardhan Banka — Analyst
Sahil Garg — Analyst
Nilabja Dey — Analyst
Aniket Jain — Analyst
Naman Parmar — Analyst
Raj Vyas — Analyst
Aaditya Agrawal — Analyst
Saurabh Garg — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Q1FY26 earnings conference call of Quality Power Electrical Equipment Limited hosted by Asad C. Mehta Investment Intermediates. 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 Star then zero on your touchstone phone. Please note that this conference is being recorded. I would now hand the conference over to Mr. Siddharth Bhamre from Assets Sri Mehta Investment Intermediates.
Thank you. And over to you, sir.
Siddarth Bhamre — Head of Institutional Research
Thank you. Good afternoon everyone. I am Siddharth Bahamde, Head Institutional Research at ASIT C. Mehta Investment Intermediaries Limited. It gives us immense pleasure at Assetsee Meta to host this conference. Call for Q1FY26 for Quality Power Electrical Equipments Limited. I would also like to state the. Fact that our group company Pantomat Capital Advisors Private Limited was the merchant banker for the IPO of Quality Power. It is the largest issue done by a single merchant banker till date in India this quarter. Quality Power on standalone basis has delivered excellent set of numbers. Also the group companies have witnessed heightened execution. Let me now introduce you to management from Quality power. On today’s Q1FY26 phone call we have Mr. Bernidaran Pandyan, Joint Managing Director. Mr. Rajesh Jayaraman, CFO. Mrs. Sarika Jadav, Senior VP Finance. And Mr. Sachin Sethi, VP Finance. Over to you, Bani.
Bharanidharan Pandyan — Joint Managing Director
Thank you, Siddharth. Good afternoon, ladies and gentlemen. On behalf of the board and the management team, I thank you all for joining us today and for your continued trust in the company. We are pleased to report another quarter of consistent performance. The sector we operate, that is High voltage electrical equipment and power Quality Solutions is witnessing a structural load long term demand surge driven by grid modernization, renewable energy integration and digital infrastructure. This momentum is intensifying globally. It is important to note that this demand is now constrained by supply. Especially for technical advanced products like ours.
This is creating a shift towards a supply driven environment. Our traditional coil products group under Quality Power delivered a record high margins of 34%. And NDOCs delivered a margin of 27% with an exponential increase in revenue growth. Nehru, the recent entrant in the family also has an increase of 45% this quarter over the last year’s operating margins. This quarter also saw us sign a binding term sheet for an acquisition of Sucrot Electric through a joint venture with Yash High Voltage Limited. This great Gen is again a value buy and allows us access to hundreds of transform manufacturers in India and abroad for our instrument, transformer and composite product lines.
Over the last several years we have made conscious, sustained investments in technology, global approvals and manufacturing quality. Today that work is translating into opportunities of scale and strategic importance. We are now approved suppliers of HVDC and Statcom products with all the leading global companies including the Chinese OEMs. This opens up doors not just to immediate orders but to long term participation in global grid stability projects. Further, we are on track for key HVDC order announcements in the near term. These projects are at the highest end of technical complexity and signify a growing confidence in our capabilities.
Our qualifications for such projects reflect our technological achievements. This quarter’s numbers highlight our gradual shift from participating in the market to playing a more defining role in it. Our order pipeline remains strong with healthy visibility across sectors and geographies. While we remain optimistic, we are mindful of ongoing supply chain fluctuations and are planning accordingly. We remain committed to transparent communication, capital discipline and long term value creation. Thank you once again all the investors for being a part of the journey. I now invite our CFO Mr. Jayaraman to share his thoughts with this distinguished gathering. Jai Hind.
Rajesh Jayaraman — Chief Financial Officer
Thank you. Good afternoon everyone. It’s a pleasure to share this quarter’s highlights. We have seen strong top line growth. Consolidated revenue rose from Rupees 80 crores to 194 crores, more than doubling year on year. This reflects sustained demand across product lines and strong execution across entities. On profitability, Quality power Standalone delivered a historic EBITDA margin of 34% our highest ever. Ndocs maintained healthy margin of 27% driven by operating discipline and a solid product pipeline. Meru’s margin stands at 9.5% but importantly profitability has improved by 47% in its first full quarter post acquisition showing our integration strategy is on track.
We expect further improvement as synergies play out. The higher consolidated expenditure is due to meru’s consolidation. Core cost structures and quality power and end up remain stable and efficient. Cash flows remains strong enabling growth investment without impacting profitability on pack. The quarter on quarter moderation is due to a one time forex gain in the previous quarter adjusted for tax underlining. Profitability remains healthy and growing across businesses. Looking ahead with new additions like SUCREP and continued group level consolidation, we are confident of meeting our revenue and earning guidance for the year. I would also like to note a minor correction yesterday’s limited review profit loss account.
The controlling interest profit for Q1 financial year 25 was reported as 31.12 crores. The correct figure is rupees 19 point. The increase in debt this quarter stems from a temporary promoter support as Rupees 70 crore interest free soft loan for proposed acquisition which also raised net assets. This is purely strategic with no operational impact. Group Debt stands at Rupees 13 crores against cash and cash equivalents of Rupees 250 crores. Thank you for your trust and support. Now I’ll open the floor for discussion.
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 one on their touchtone phone. If you wish to remove yourself from the question queue, you may press star and 2. 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 Pritesh Sheda from Lucky. Please go ahead.
Pritesh Chheda
Yeah. Sir, can you share the revenue for Meru and revenue for Indocs for Fi for the quarter one and let’s say at the current capacity in Meru and the current capacity. Okay, we make first give out the first answer. Then I’ll ask the following question.
Bharanidharan Pandyan
Good morning, Pritish ji. Thank you for always being with us. The numbers for Ndocs is 91.91 crores in sales. And Nehru is 61.5 crores in sales. For electrical equipments it’s 41.8 crores in sales. And projects which is our subsidiary which is related party Transaction is about 4 crores in sales. And capacity utilization at Nehru at this moment is close to 95%. But they are scaling up every month as the new ovens for the addition is coming over.
Pritesh Chheda
So Meru Capacity utilization is 91% at this moment.
Bharanidharan Pandyan
But they are scaling every month because they’ve ordered new ovens. They have got into warehouses, put in a lot more effort into what we say, into expanding the factory capacity. So that is. That will come up in the next few quarters. You will see the capacity utilization always around 95% because of the order book. Even with the expanded capacities.
Pritesh Chheda
Meru, you guys mentioned that it’s 9 and a half percent EBITDA margin. What will be the indox EBITDA margin?
Bharanidharan Pandyan
The end of margin is about 27% profit before tax.
Pritesh Chheda
Product standalone the Ebitda.
Bharanidharan Pandyan
And for Quality power which is a coil product. The coil products which is Quality power is about 34% for HVDC and Sachs where we are expanding the factory. Okay.
Pritesh Chheda
And docs, you mentioned 27% margin, right?
Bharanidharan Pandyan
Correct.
Pritesh Chheda
Okay. Now from the capacity utilization perspective even quality is at a high capacity utilization, right?
Bharanidharan Pandyan
Correct, sir.
Pritesh Chheda
Correct. And Meru, based on whatever ovens and all that you are adding. So let’s say this 60 crores is 90% capacity utilization. So what kind of capacity and a business size will we see in Meru as we progress ahead with whatever capacity expansion that you have planned.
Bharanidharan Pandyan
We are anticipating that the numbers may improve by about 20 to 30% in the next quarter for Meru.
Pritesh Chheda
And if you take a slightly longer opinion over the next two years based on the capacity that you’re adding in Meru or sorry the capacity which will get commercialized in Meru, what kind of business size will Meru reach to?
Bharanidharan Pandyan
The maximum capacity that the current factory can deliver is about 450 to 500 crores depending on the pricing advantages. Our current focus is to bring them to the mid teens margin. That has been our guidance. That is where our focus is at this moment as management.
Pritesh Chheda
So basically it’s 110 to 125 crores per quarter at.
operator
Sorry to interrupt. Pratish, can you please hold the device a bit distance from you because there is an airy noise when you are speaking.
Pritesh Chheda
No problem. Wait a sec. So is it clear now?
operator
Yes, sir. Now it’s clear. Please go ahead.
Pritesh Chheda
It’s actually an electrical equipment. So at 110 to 125 crore per quarter and 18 margin is what you mentioned in Meru right at.
Bharanidharan Pandyan
At this moment our current focus is to bring them to around 15.
Pritesh Chheda
And when do you see this happening? Is it two quarters from now? Four quarters from now?
Bharanidharan Pandyan
Ideally we are attempting in the next four quarters. Okay.
Pritesh Chheda
Okay. And my last question is on the order backlog of 775 crores that you guys have mentioned. Can you give quality power backlog in this Meru and Indox the split.
Bharanidharan Pandyan
Nehru is about 200, 350 crores. Quality power is about I think 250 crores. And the balance is end up.
Pritesh Chheda
And execution timeline.
Bharanidharan Pandyan
Most of the execution is about 12 to 15 months.
Pritesh Chheda
And what is the progress on your new site and when should we see?
Bharanidharan Pandyan
We are ahead of schedule, sir. We are ahead of schedule. A lot of people have been put in. We are working with the best companies in the country. We are slightly ahead of schedule at this point. Okay.
Pritesh Chheda
Thank you very much, Bharaniji.
Bharanidharan Pandyan
And all the best. Thank you.
operator
Thank you. A request to all Participants, please restrict your questions to two questions per participant. Our next question is from the line of Nemesis Sundar from Elara Capital. Please go ahead.
Nemish Sundar
Yeah, thank you for the opportunity. Just wanted to expand on the previous capacity related question a bit. So I want to understand is the capacity hindering our ability to get new large orders especially in the hvdc Given the capacities are coming up.
Bharanidharan Pandyan
I believe it is not hindering us but we are not able to take the entire HVDC order. So let’s assume our HVDC order is a hundred rupees. We are only able to eat 30 or 40 rupees because that is what we are able to deliver and not more than that. When I say 30 or 40 rupees it is just not my own factory. It is also the current set of supply chain. That is why we are also putting a CTC factory, what you typically call it the electrical magnet wire. We are also putting across a huge backward integration of that would have an advantage but not only of capacity supply but small improvement in operating margins also.
Nemish Sundar
So by when could you expect to cater to let’s say more than about 50 to 60 or 70% of the HVDC order that you are.
Bharanidharan Pandyan
You would see some orders as we guided sometime in the H2 of this year we will be delivering even recently we won a very prestigious order from PA Grid along with partnership with Hitachi. We want a 500kv HVDC smoothing coil. Each coil is about 250 megawatt. This is one of the world’s largest coil. This opens up not only approvals with power drift but also domestic supply as being the only guys who can supply this part of the world.
Nemish Sundar
Okay. And sir, is there any impact of the tariff situation on your exports to us?
Bharanidharan Pandyan
Very tricky question at this moment as you are aware, tariffs is changing every quarter every week. So the orders and the projects of ours are already predetermined, pre linked. So I would not see an impact in the next 12 to 15 months. After 15 months we need to see how the geopolitics comes in. However, as I said right now it’s a capacity allocation. If the Americans don’t want it, we can sell the capacity to anybody. So we just announced a large order intake from Middle east that is for the UAE transmission company. So customers. Because we sell in over 100 countries, we are not short of customers.
Nemish Sundar
Okay, thanks sir. And could you just give your revenue guidance for the year Last question we.
Bharanidharan Pandyan
Had given a guidance of between 700 and 800 crores conservatively at the starting beginning of the year.
Nemish Sundar
This is including all your subsidiaries, including the new acquisition. Also.
Bharanidharan Pandyan
Sukhrut would not be consolidated. It would be a associated company because it’s going under a joint venture. So I believe it would come not come in the main PNDL but would come as investments. If I’m not given if I’m correct.
Nemish Sundar
Okay, thank you. Thanks a lot, sir. I’ll get back into.
Bharanidharan Pandyan
Thank you, Nimish.
operator
Thank you. Our next question is from the line of Rahul Agarwal from Aventus Capital. Please go ahead.
Rahul Agarwal
Yeah. Hi. Am I audible?
Bharanidharan Pandyan
Yes, sir, loud and clear.
Rahul Agarwal
All. Oh, thanks. Thanks a lot for giving me this opportunity. So sir, the first question that I. Had was when I was looking at. The recent con calls. I just wanted to clarify the numbers for the bid success ratios that we have for HVDC and sacts. If you could just tell me for domestic and international.
Bharanidharan Pandyan
So Rahul, in the domestic we are the only people. So it is how much deliveries we can give would depend on whether it is 100% or 80%. So because a lot of tenders are coming simultaneously every month, we are. Our supply chains are not able to take it. It’s just not our factory. It’s also the supply chain. So we are working together to be able to take 100% in India.
Globally, we are still at a favorable stage. By the end of next year when our entire factory is up and running at full swing, I think we would not miss so much right now. Our hit and wind ratio is not because of pricing. It is on deliveries.
Rahul Agarwal
Okay. Understood, sir. So the next question that I had was that, you know, in the documents that are there, the public documents for qp, we were a little confused to. Understand the peers and your clients.
Bharanidharan Pandyan
So the same names were mentioned. Hitachi, Siemens, all of the companies that you said were mentioned as clients and peers. So can you just clarify how this relationship works between us and them? In high technology businesses, all of us are customers, suppliers, competitors, partners and peers. So in our fax business we buy components from Hitachi, Siemens and ge. In their fax and HVDC business, they buy components from our facilities. Because these are not overlapping components and overlapping supply chains. So we are a supplier to all the three big guys that you mentioned across the world.
Okay. We are also in competing them in certain businesses, we are partnering them in certain businesses and we also buy from them in certain businesses.
Rahul Agarwal
Understood, sir.
Bharanidharan Pandyan
So there is no, especially in the part where we are competing with them, there is no threat of, you know, sort of them Making those same products later down the line and you know, eating the market share. For us, is there, is there any threat for us, it is not determined by the middlemen in between. When I say middlemen, it is like companies like Quality Power and others. It is determined by the utility at the end of the day. So something like we are now working with Transco in Abu Dhabi. We are working with Svenska Craft Net in Sweden, Fingrid in Finland.
So those are the guys who approve the company. And people in between are just component and solution providers. So we are Approved in over 100 countries. The technology is well proven. The moat is normally between 5 and 10 years. So competition outbound would still take between 5 and 7 years. Even better with the best people across the world. Because there is so many utilities. Even in India, if you see a transmission utility, we have three large players being the largest, Adani and Starlight and the new ones coming in for the HDC line. So all these you, they will have to approve you.
Rahul Agarwal
Okay, understood.
Bharanidharan Pandyan
And just have one last thing. Could you just tell us the CAPEX number? Like the amount of capex that is being done? I know the capacity number. I just wanted to know the CAPEX amount. I believe it should be around 125 crores at post IPO. That is what a lot of money has been spent pre IPO Also a lot of the equipment that we bought. About 20, 27 crores of equipment that we bought during the IPO is also being used for the same project. So Motamoti bought 125 crores. Okay. Thanks a lot, sir. Thank you, Rahul.
operator
Thank you. Our next question is from the line of Dave Gulwani from CARE pms. Please go ahead.
Dev Gulwani
Good morning. Thank you for the opportunity. My first question is what is the market size of our products while making a HVDC substation?
Bharanidharan Pandyan
So how much percentage of our products contribute? At this moment we deliver three key product lines in hvdc. That is reactors, various types of reactors, instrument transformers and special purpose medium voltage transformers like zigzag, connected earthing, transformer. These are the three product lines which we do in the components lines with all the transformers in hvdc. We have now components from Sukrut that get into those transformers that is as accessories. @ this current moment we are sitting on these four different opportunities, right? In a normal HVDC project, we believe the opportunity size for us is about 200 crores per order.
Okay.
Dev Gulwani
And what is the competitive edge of our products that we are getting so many orders? How are we different from others.
Bharanidharan Pandyan
I believe we have given our peers and global competition. We have two guys in Europe for the high voltage. We are the only guys in this. Part of the world. So obviously whatever comes or the demand comes in the first preference is given to us. Because we are local, we are able to service better. And we have proven ourselves in over 100 geographies. It’s only when we are not able to deliver them on the time that we request that it is gone normally outside the country.
Dev Gulwani
And last question. How much percentage of order book consists from India?
Bharanidharan Pandyan
At the current moment we should be about 50. 50 or maybe 60. 40. 60 bring export. 40 being domestic.
Dev Gulwani
Okay, thank you so much.
operator
Thank you. Our next question is from the line of Nishita from Sapphire Capital. Please go ahead. Hello.
Nishita
So congratulations on a very good set of numbers. I would just like to know that. Do you have any new acquisition plans like you’d mentioned in quarter three, FY25 that you are in talks of potential acquisition of Statcon Energy. So what is the update on that.
Bharanidharan Pandyan
Nishita? Good question. So the stack on deal has been called off in what we say about three, four months back. It’s been mutually called off with regards to other acquisitions I believe. Yes. We are normally hungry for acquisitions based on technology and pricing. Apart from the culture that the company brings along, we are in talks with a few nothing concluded as of yet. You would see some small debt that we have put into the company for certain bids as and when it happens, I’m sure the markets will know about it.
Nishita
Okay. Also just wanted to know that from the new global quality factory that you built in family, how much revenue do you expect to generate from that factory?
Bharanidharan Pandyan
The facility is quite large. The facility can also make apart from coils a lot more products including mid sized power transformers. So at the peak revenue from the facility is expected to be between 1500 and 2000 crores depending on the pricing policies that we may have at this moment. Our focus is to get the facility immediately on staff the facility and get the raw material aligned. Our focus instead of numbers is more on execution at this moment.
Nishita
Okay, perfect. And you in the margin guidance of FY26 of 15 to 16%. Are we still on the same line?
Bharanidharan Pandyan
I believe so. If you look at most of the margins that the parent companies are delivering, I think pre Mehru, we are still at very very high numbers. I think closer to 30% console. It’s only with Meru coming down. We have been pushed on the numbers. But as soon as Nehru starts Increasing, I believe the average would also start pushing. So we are still in the guidance. No bad news from that side.
Nishita
Thank you so much. Thank you so much. Thank you.
operator
Thank you. A request to all participants. Please restrict your questions to two questions per participants. Our next question is from the line of Sanjay Jain from intellect capital fund. Please go ahead.
Sanjay Jain
Hello. Good afternoon, sir. Thank you for the opportunity. My question was from the transformer side. So historically we have seen that the transformers capacity, utilization of quality power was on the lower side and with Mehru coming in. So how does this help? Can you give us a visibility on how does this help with the orders? As in if the synergy is going to work out or how are we going to use the existing capacity that we have of transformers?
Bharanidharan Pandyan
So Sanjay, to clarify, transformers and instrument transformers are two different product lines. Transformers are used to convert energy from high voltage to low voltage. What we normally call as distribution or power to be able to feed power to utilities or houses. Whereas instrument transformers are used to measure electricity. So these are much smaller transformers but still at the same high voltage and more complex. Technically speaking. Now instrument transformers are totally different. Business line has nothing to do with transformers. Even though all transformers use instrument transformers a B. We have been making transformers, non standard custom design transformers for the past 25 years.
Sometimes we worry about the over capacity coming across the world. So we have been also trying to slowly reduce our dependence on transformers. However, we still do deliver transformers to some of our key customers and we still continue to export some transformers. The new factory will be able to. We will be able to take a little bit more transformer orders. In the current factory, our coil products being delivering almost 30, 34% margins. We are more focused on high profit businesses because the factory is fungible on product lines.
Sanjay Jain
Okay. Okay. Understood, sir. Thank you for the clarification. Thank you very much.
Bharanidharan Pandyan
Thank you, Mr. Jain.
operator
Thank you. Our next question is from the line of Viraj Mahadevia from Moneygrow. Please go ahead. Virat sir. Please go ahead.
Viraj Mahadevia
Hi sir. Congratulations on stable and upward results. Can you give us some color as to why you did a joint deal to acquire Sukrut with Yash Voltage, the thought process behind that, as opposed to acquiring it outside.
Bharanidharan Pandyan
So that’s a very, very tricky question. So I will answer it like this. So we put a factory, the first factory in England in 2010 and we had to close it down in 2017. And one of the key learnings when we ran the factory in England is the management bandwidth. Now as we are growing rapidly, we want to preserve the management bandwidth, we were approached by the management of Sucrot, a German company.
We had negotiated a good deal. But transformer manufacturers are, even though strategically important, a very large customer. A growing business is not in the vicinity of our current sales and strategic team. So we did not want to open up another front end war. So yes, High Voltage, which was already establishing themselves in the us, Europe and already had a large set of customers in in India, seem like a natural partner. So what our intention to do together is to use a brand and legacy of 70 years of Sucro to be able to consolidate more companies in the transformer component and create it as a board level company.
So that is why right from day one it is taken as a board level company. And this is primarily to ensure that we don’t lose focus on HODC and sacs which is high growth, high profit business. Understood. So this business is like touch for you, mainly run by just 5 o’, clock, is that right? I would say that we have access to technology, marketing, customer base and also internally their customers happen to our customers, to our instrument run composite products. But Yash would bring a significant advantage of customer connect. So from a customer side of things, I would say Yash definitely would need to take the front end.
Viraj Mahadevia
Understood, sir. Second question is regarding your raw material security. Can you give a sense as to your raw material basket? Whether it comes largely from India, from Europe, US or China, Are there any sort of certain market dependencies?
Bharanidharan Pandyan
So our raw materials traditionally been 100% India. We make our own special cables in our vendor, works with our own machinery. However, we are not able to scale up that factory because we are typically the only guys in this part of the world who make those kind of equipment. So we are spending our own money in developing that facility where we should be almost delivering 50% of our needs from that facility.
A B Now for global orders we are also looking at importing from China primarily because the Indian orders do not allow Chinese original raw material. So what we are trying to do is we are trying to use the Indian raw material for Indian projects and global raw material for global projects. At this moment we do not foresee a problem on cable so much. But we see a huge problem on porcelain or what we call as insulators. Understood. And is there a reason you choose to source from China for global orders versus elsewhere or India? Is it purely just pricing and product.
Viraj Mahadevia
Availability or the Chinese are actually more expensive?
Bharanidharan Pandyan
When you compare the freight, info, duties and everything, it is just availability. At this moment we simply pass it on to the customer. Understood, sir. All the very best on your journey. Thank you, Viraj.
operator
Thank you. Next question is from the line of Akshay from AK Investment. Please go ahead.
Akshay Kaila
Hello sir. Am I audible?
operator
Yes, sir. You’re audible.
Akshay Kaila
Yeah. Thanks for giving me the opportunity. Sir, our order book currently is 775 crore. So can you please guide us. How much consolidated order inflow are we expecting in FY26? And what would be our order book. At the end of FY26?
Bharanidharan Pandyan
Akshay? Ideally we would like to have about one year of order book forward cover. Because more than one year the metal prices swing too much for our likes. And also the raw material disability starts diminishing. Ideally we would like to be having about one year to 14 months of order book. That is what as a management is a guidance to the sales team. At this moment we are very comfortable on that. You would see that we started the quarter with 750 crore of order book. Now we have done about 194 crores in sales. And we still increase order book by 25 crores.
With some of the HVDP orders that we are planning in the H2. I think we should be comfortable. We have already guided that we may have another additional 500 crores of orders by the end of the year. Sure, sir.
Akshay Kaila
And sir, my second question is more on the fundamentals. Right. Currently there is a huge shortage of. Transformers especially in the European markets. There is a very huge replacement demand in US and the European market. So as per your perspective, how do you see this market evolving in the. Next five to 10 years? Is this a temporary demand or is this structured demand?
Bharanidharan Pandyan
It will be evolved over the five to 10 years. I would say at 400kV and above we are seeing a demand of at least a decade. At least a decade. That is 400kv and above, 132kv and below. I think the capacity that is coming in is so shocking across the world that we keep our fingers crossed. And because we operate our transformer businesses around that voltage, we have been very conservative on that. However, on the transformer play, where there is anywhere demand irrespective of what the supply is. We have already had one hand with Sukrut where Sukruth has only two or three peers in India and about 10 peers across the world.
We will contribute at full contribution about 1% of the transformer value from the component space, which itself is a big business. So with Yash, we intend to consolidate more transformer components companies under the support. Okay, so we Will have a play in the transform business.
Akshay Kaila
Yes. So we are more on the high. Voltage demand especially above the 400kV, right?
Bharanidharan Pandyan
Correct. That is where we see that the demand. Because to enter that 400kV you still need that five or seven or ten years of experience. So the utilities normally would not allow new entrants into 400 or 760 without them experience irrespective of demand. Because the cost of shutdown is too high. Unlike 11kv or a 33kv or IDT transformer. So at that voltage even if people develop right now, by the time they come in it will be seven, eight years.
Nemish Sundar
Okay sir. Okay. Thank you so much for giving me the experience.
operator
Thank you. Our next question is from the line of Hitesh Randhava from Kara Cagr Quest Capital. Please go ahead.
Hitesh Randhawa
My question is on the lines of. Accounting as far as other income is concerned. I think in the last quarter we said that out of 53 crores of other income 40 crores were attributable to hyperinflation accounting actually in Turkey. So in this quarter sir, how much of other income is attributable to that? I will ask CFO Mr. Rajesh to answer that please.
Rajesh Jayaraman
Yeah, thank you. Now it is now other income. Hyper. Hyperinflation in this quarter coming down drastically. No, not that. Other is interest and other things. So practically it’s a very minimum. It was there in earlier quarters.
Bharanidharan Pandyan
Ritesh, this hyper inflation formula or whatever we call as a forward hedge is based on the inflation rate in Turkey. As the inflation rate is reducing there automatically the other income goes into traditional income operating income at this quarter I think the other income is only 2 to 3 crores rest of coming in into operational. Because inflation is softening in that part of the world. Right.
Hitesh Randhawa
So my sorry to stretch this a bit further. So what is the exact amount this. Quarter and other point being. Could you. Please elaborate on why would this flow into operating income? Because these are hyperinflation related adjustments. So once Turkey is out of hyperinflation. Then shouldn’t this just kind of go. Out of other income? That’s it. And it shouldn’t be or it wouldn’t be part of our operating income in that case. So the extra benefit. Second because this is kind of an extra benefit. Right. So that should go away. Right?
Bharanidharan Pandyan
There is accounting. As an engineer I can only answer this. Accounting queries do not. Accounting entries don’t create profits and balance sheets. Profits are created by sales and purchase. Okay, that doesn’t change. However what changes is that? Let’s Assume if I do a forward hedge or what we say, I have to account for what is a hedge call where we have to have a dollar hedge against the depreciation. Now what happens over the course of a contract? You lose money because you know the inflation is 60%. So 60% goes off in your operating income and the 60% comes in one quarter as a hyper inflation adjustment.
So what happened that adjustment comes into other income. In my operating, I would operate at 3% margin. But if your inflation is only sitting at about say 10, 20%, then what happens is you do not lose so much in operations or your hedge call is not so profitable. But eventually when you hedge, you have technically what we say, close your profit at the time of the order.
Hitesh Randhawa
Okay, sir, thanks for that.
Bharanidharan Pandyan
And as far as the capacity is concerned, I think 85 and Sahli, Cochin. And Mehru, all of these kind of should most probably go live by November 2020. So my question is incrementally, how much of potential peak revenue would these three. Facilities add actually by going live in November 2025. So Sanvi is not going live in November 2025. Sangli will go down as per the guidance that is given in Q2 of what we say next year Kochiel will go live. It’s a small incremental capacity. Meru is giving an incremental capacity. At this current moment, we would like to stick to the guidance of 700 to 800 crores. With the next quarter. We would give you any change in guidance if required.
Hitesh Randhawa
Okay, sir, sure. Thanks very much. Thank you.
operator
Thank you. Our next question is from the line of Yashavardhan Banka from Tiger Assets. Please go ahead.
Yashovardhan Banka
Thank you. Hello, Bernie. Sir. Hope you’re doing well. So I wanted to understand. Am I audible?
operator
Yes, sir, you’re audible loud and clear.
Yashovardhan Banka
So I wanted to understand a bit more on Nabisky, sir, because you increased. Our state in the same.
Bharanidharan Pandyan
Yes. I think as a returning customer I should give you the first preference of normally starting. Because you’re there in every earnings call. Thank you for believing in us. So Nabisky, as I told you is in the IoT and embedded space now in Sukrut where we bought in the transformer components business. Now to develop the next generation of transformer components where every component is connected. Because a transformer, the core and copper is not connected. That is iron and steel cannot be connected. It is the accessories in the transformer which are normally connected. Which means that they need to go from an analog to a digital transformation to be able to Be ready for the next generation grids.
Now Sukrut as a team do not have the access to that. Whereas Netsq in an embedded IoT network with a kind of edge computing data space can help them get there. So this becomes our in house product lab technology center for digitization of all the high voltage equipment that we are doing. Nabesky is also working with Nehru for creating a separate device again for digitization of analog to digital. Siemens. They are also internally working with us for some other R and D projects. So we use them for critical R and D projects to be able to create technologies especially on IoT software and embedded systems.
That’s why we decided to keep them slowly and steadily. Understood. So the developments are moving well, right? Yes.
Yashovardhan Banka
Okay. And so the second question was regarding our best, you know, applications which you. Mentioned in the last call.
Bharanidharan Pandyan
So I think we’ve executed two 5 megawatt projects where we are supplying a. Few on the EMS BMS side. So if you can just touch upon. That a bit more and the progress as well. So we have already developed two projects on best. Not as an epc, we are a component manufacturer in best. So we have some sort of EMS and power conversion already deployed for two projects. Maybe in a year, year and a half we may qualify for most of the tenders in that part of the world. But as I said, these are two 5 megawatt or 4 megawatt ones. Not at a gigawatt level. At a gigawatt level. We are scouting for acquisitions which we can bring in because there is a new policy change in India where the EMS has to be totally domestic from Indian origin sources.
The software that will be integrated into grid, I’m sure even the power conversion would come up. This would be a large play. We have one hand and one leg in it already with the software and hardware through NDOCs. How do we indigenous it? How do we bring it to scale? Is a part of execution strategy our M and A team is looking at and we are deliberating at every board meeting.
Yashovardhan Banka
Perfect, sir. Understood. Thank you so much and all the best. Thank you.
operator
Thank you. Our next question is from the line of Sahil Garg from CCV Emerging Opportunities Fund. Please go ahead.
Sahil Garg
Hi sir. Good afternoon sir. I have only one question. So what kind of EBITDA margins and PAT margins we are expecting on a consolidated basis for the given estimated revenue of 700 to 800 crore for FY26? Why I’m asking this question is because when company grows both organically and inorganically, so it Is easy to know estimate the top line. But it is difficult to estimate the bottom line. So that’s why I’m asking you.
Bharanidharan Pandyan
I will answer your question, Mr. Garg. If you look at even without Mehru, I will just for a sake remove Mehru. Last quarter our numbers was 61 crores. 194 minus 61. We are still about 130 crores organically. We are expanding organically 9x. We are also bullish on technologies with our own current set of numbers and technologies. But the acquisitions what we are doing. When you see a blended margins can go reducing. But at the magnitude level, our pat will continue to increase significantly. Because these are businesses that we are buying in for the next two, three years.
Like as I just told you, Nehru, we got a 47% increase in margins in one single quarter. Now a business of say about 300 crores give and take. If I am able to improve another say 50, 60% from where they are, my acquisition is paid for.
Sahil Garg
Okay, so can you also. That is the kind of value that we normally bring into companies. Sir, can you also put the number. To the statement on consolidated level.
Bharanidharan Pandyan
At this moment, the companies that we currently operate, we have given a guidance of high teens. That is the guidance at this moment. As I said earlier in the second quarter. High teens.
Sahil Garg
Sorry, I miss it.
Bharanidharan Pandyan
High teens between 17 and 20%. That is where we have given a guidance high teams.
Sahil Garg
Okay. Okay. Okay. Okay. Thank you so much.
Bharanidharan Pandyan
Thank you, Mr. Gar.
operator
Thank you. Our next question is from the line of Nilaza Day from Ashmore Research. Please go ahead.
Nilabja Dey
Okay. Congratulations on a very good number, sir. My question is that given the. Usually we have seen that margins are higher on in the export sides. So is there and you have a subsidiary in Turkey. And now after this particular EU deal has been signed, I think the tariff situation that area is more or less stimulus. So why are you scaling up or focusing more on the export side or you are more on the domestic sides? Also in terms of the premium equip equipments where the demands are more. Because as we understand from some of the cable or conductor they are saying that premiums surprisingly premium products are giving better margin in India and they are getting decent margin from the standard products.
Can you just throw some lights on this specifically on since you are on the power equipment sides.
Bharanidharan Pandyan
So Mr. Dev, with regards to exports to domestic. We have worked the past 15 years in developing customers in over 100 countries. We do not want to just give away the customer and the market share that we have Developed just because the Indian market is booming. The margins in India and globally are similar and not different. There may be a small advantage when you export because of what we say, the reduction in finance cost or some duty drawbacks and nothing more. With regards to what we say, the supply, what we call from when we say from an Indian markets.
In the Indian markets and advantages you get paid faster because you are not waiting 90 days end of the month receiving at the site. So there is not much of a difference in margins. However, the demand I can just tell you if you take a simple piece of data, a normal search data on a Google search takes you about 0.3 watt hour of data. If you use an AI agent for doing the same search, it takes you 2.7 watt hour of data which is 9 times increase. Now we would say how many people ChatGPT use, but I would say how many people use Samsung phone because every photograph is now digitally enhanced through AI.
As you are doing quant trading, there are driverless cars which are continuously using AI. So the surge in demand of AI and AI technologies would also mean 9 times to 10 times increase in power consumption. Even if you look at an EV charger. EV charger which used to be now a good charger would start at 150 kilowatts, whereas the average house in Bombay has about 3 kilowatt of power. Now imagine 10 or 20% of the houses going into EV in the next five years. The entire distribution and transmission system is designed to deliver at about 5, 6% growth per year, not 5 times 6 times in 2, 3 years.
So that is a structural mismatch that we have in the demand side from I would say on a distribution side, say at sub 33kV, there is not much of a moat on technology or branding. So there can be a lot of more players. Even so, the market gets bigger. The competition also catches up. However, in the transmission side. When I say 220, 400, 765kV, the most of that five or ten years means that nobody wants to enter because the Rewards are after seven or 10 years. So that becomes a basic supply demand mismatch. And as we are going forward we see that even getting worser.
Now you asked about global demand and Indian demand. I think in the last phone call I pointed out one HVDC order frame contract in England awarded in March is £59 billion, okay, which is about 6,25,000 crores, one single framework contract. If you look at say a power grid contract in India, it’s typically about 10, 20,000 crores. So even if you have five contracts is only 100,000 crores compared to six times higher for one single contract in England. So the global markets are even larger than the Indian markets. Even though we are gungo about India, we also want to ensure that we have 50% of our hand and legs in other part of the world that we have created over time.
Nilabja Dey
Thank you.
Bharanidharan Pandyan
Thank you, Mr. Dev.
operator
Thank you. Our next question is from the line of Aniket Jain from yes, securities. Please go ahead.
Aniket Jain
Hi sir, I wanted to check if any service intensity in the components of products.
operator
Sorry to interrupt. Your voice is breaking.
Aniket Jain
Just a. No. Hello. Is it better?
operator
Yes, now it’s clear. Please go ahead.
Aniket Jain
I wanted to check if there’s any service intensity in the components or products that you’re supplying. And are you also doing any EPC business as well along with supply of those components?
Bharanidharan Pandyan
Hello. Sorry, we lost you.
Aniket Jain
Sorry, I’ll repeat the question. So I wanted to check on the service side.
Bharanidharan Pandyan
No, most of our equipments don’t require service. It’s either it operates or it doesn’t operate. We sometimes do get pulled into a service contract where we are used to commission our own equipment and nothing more.
Aniket Jain
Okay. And so what is the typical replacement cycle for these components that you’re supplying? Can those be replaced after 10 years, 15 years or is it slightly shorter?
Bharanidharan Pandyan
Ideally my customers would not want to replace it for 30 years.
Aniket Jain
Okay, got it. That is the kind of reliability that. Is put in that you’re putting. And second question would be how is the competition from China and the international markets for example in Europe or US and who are the main competitors that you’re mainly dealing with?
Bharanidharan Pandyan
The Chinese competition has been there for a very long time. We have been fighting them outside the country also for a very long time. Even today morning we got a 34 and a half crore order against the Chinese and Abu Dhabi with similar margins. So I do not think that we fear Chinese competition from a price standpoint. But yes, Chinese have one advantage on scale which we are building internally with ourselves also. So I believe in next year we should be apples to apples with the Chinese.
Aniket Jain
Got it, sir, thank you so much for the answers and best of luck.
Bharanidharan Pandyan
Thank you, Mr. Jain.
operator
Thank you. Our next question is from the line of Naman Parmar from Nivesha Investments. Please go ahead.
Naman Parmar
Yeah. Good afternoon, sir. Thanks so much for the opportunity. So firstly I wanted to understand on the bookkeeping there is a slight error, I think in financial result. You have shown a 177 crore of revenue console. And in presentation it’s showing 194. So what’s the correct number?
Bharanidharan Pandyan
My colleague Sarika will answer the question. Okay.
Sarika Jadhav
That 177 crores is the revenue from operation. And our total revenue is 194. 194 crores. Okay. You are including the other income also. Okay. Other income. Yes, sir. Yeah, yeah. So what will be the bifurcation in other income? How much will be interest income and hyperinflation part? Hyperinflationary part is only 2 to 3 crores. And there is the interest income.
Naman Parmar
Okay. And currently how much cash is there in the Turkey plant? Last quarter it was around 75 crores. Just one second.
Sarika Jadhav
Yes. Now it is 72 crores, sir. Okay. Okay. Understand. And on the business side. So how much percentage of revenue would be coming from the major three, four products? Like how much is from the coil reactors and transformers.
Bharanidharan Pandyan
Quality power is basically coil products. Nehru transfer products. ENDOCS is power quality products. If you look at it, I think the numbers are clear for you.
Naman Parmar
Yeah. Understood. And what will be the path of the all three meru, NDOCS and Sucrose?
Bharanidharan Pandyan
The path is already guided server. We have given for different companies. We have given PAT forecasting also on. On the margin side. Even I had just retreated sometime before.
Naman Parmar
No, no, no. On the future not. I am telling you for the current quarter what will be the PET of the MERU and DOCS.
Bharanidharan Pandyan
In the current quarter. PAT of which a consolidated level.
Naman Parmar
No, no. For MERU for endocs like you mentioned.
Bharanidharan Pandyan
The revenue okay for equipment spat for electrical equipments is 10.9 crores. Along with projects is about 11.4 crores. Indoct is 21.8 crores. And Nehru is 4.2 crores.
Naman Parmar
Okay. And Sukrut has ended the year with how much revenue are pet in FY25 sukrut.
Bharanidharan Pandyan
I believe this year they will be doing about 24 to 26 crores. That is the number that we have been projected. At this moment they are not at cash loss.
Naman Parmar
Okay. And how much would be. Yeah.
operator
Sorry. Sorry to interrupt, sir. Please rejoin the queue for more questions. A request to all participants. Please restrict your questions to two questions per participants. Our next question is from the line of Raj Vyas from TM Investment Technologies Private limited. Please go ahead.
Raj Vyas
And congratulations on the good set of numbers, sir. So as I can see we have the order book of order backlog of 775 crore. So if you can give me the bifurcation for MERU and quality power and what will be the execution timeline for completing all these orders?
Bharanidharan Pandyan
I’ve already answered that question earlier. 350 crores. Mehru, 250 crores. Quality power rest is N docs and the delivery would be between 12 and 15 months.
Raj Vyas
Okay, and I might have missed that. So other than this we have as you mentioned that we are, we are in international market and we cater to more than 120 plus countries. So what is the dependency on each and every or what is the highest dependency on countries that you can provide? And earlier as well, in the last phone call you have mentioned that we are in the ongoing projects and bid with Finland, Brazil, Canada. So what is the progress with respect to those bids? If you can provide some details.
Bharanidharan Pandyan
We are project and country agnostic. For us everything is 1 market, 1 margin. In the recent past week we have had orders from the U.S. abu Dhabi, we have orders from Finland, we have more incoming orders from say the Middle East. We see some good traction in Southeast Asia, Australia. So we are country agnostic. What we say company. We go as per projects and as I said depending on our relationship with the customer, we are at this moment having a capacity allocation. We also see a lot of domestic demand especially on the platform markets where we cannot ignore the customer customers.
Raj Vyas
If my memory shows me right in the earlier con calls that we have had. So you have mentioned that the dependency is not more than 5 to 7%, is that right?
Bharanidharan Pandyan
Correct. The the biggest market would not be more than 5% compared to Indian market where I would say at this moment we have said a 40% kind of a revenue in India.
Raj Vyas
And also you have mentioned that there is no impact of tariff. But we can see that From FI like FY24 to FY25 the dependence on America has significantly dropped from 20 to 25% to just 1 to 2%. So but you have said that it all depends upon the execution. And after 12.
Bharanidharan Pandyan
I think, I think you’re misunderstanding, understood the dependency. I believe that we have no problems on the tariff for the next 12 months because the projects which are supposed to be awarded to us will be awarded because those are made with our technical bits cannot be changed. That is point one. Point two, we keep changing markets every year depending on the size of scale of projects. So if we have some major HBDC orders in India this year, we may have India as a big customer this year. Next year if you get a huge contract saying South Korea, we may have South Korea is a big market.
So because we are starting with a smaller Base. So you would see the flavor of country changing every year at this moment. But traditionally at the end of say about two, three years, we would say India would continue to deliver that 40, 50% and 50% globally and those markets would change depending on the size and type of the project. Now if you get a very large order for an oil coal equipment in America and in Abu Dhabi, we do not have further capacity to sell in Europe. So it depends a lot how much capacity you can deliver.
But as we speak we are negotiating larger contracts in the US market. The customers don’t seem to be worried so much on the tariffs. They are more worried about delivery. If you see the big beautiful bill that Mr. Trump had given, the energy subsidies are closing in 27 which means most of the renewable energy projects need to be commissioned by 27. Elsewhere tariffs, the subsidies go off. So in the US they are ready to even airlift equipment. It is only how much delivery you can give to them.
operator
Please rejoin the queue as there are many participants in the queue. The next question is a follow up question and it’s from the line of Pritesh Chera from Lucky. Please go ahead. Yes Prates sir, please go ahead. As there is no response from the current participant, we’ll move to the next question. The next question is from the line of Aditya Agarwal from Finn Avenue. Please go ahead. No sir, your voice is sounding very low. Please come close to the device.
Pritesh Chheda
Am I audible now?
operator
Yes sir, now you’re clearly audible. Please go ahead.
Pritesh Chheda
Thank you so much for the opportunity. So I just wanted to ask like the kind of work or the kind of product that we are making. So how difficult will it be for a, you know, established player in the HVDC market like you know, ge, TND. Or Hitachi to open up a new. Vertical because we are receiving orders from them. So to open up a new business vertical and deliver the same products to our for, you know, getting it in house. So just wanted to know about the same.
Bharanidharan Pandyan
So Nothing is impossible Mr. Agarwal. If anybody is intending to do it, yes, they can do it. I believe the timeline for them to do that would be five to seven years. Not because technology is not available in the world. They can always find technology but they still have to wait that five or seven years for them to enter the market based on market qualifications. Point one, point two. By then we would have consolidated the market share with the capacity people and we what we are envisaging, we will be the lowest, one of the lowest cost producers in the world.
So eventually when the competition kicks in you still have a lot of margin to sacrifice for volume.
Pritesh Chheda
Okay. And sir, what will be like, like according to us what is the exact total total addressable market for us? And I mean on our prospectus it it is mentioned something but you know in the Google the industry growth is somewhat different for different HVDC players in different sources. It is showing difference. So can you just guide like what is the you know absolute TAM that we are projecting and the kind of industry growth for next three to five years, the overall industry growth?
Bharanidharan Pandyan
Mr. Agarwal, we are not a one product, one location company. We are a multi product, multi location company say in the likes of say CG Power or I wouldn’t compare myself with Hitachi but I would say we are multi product, multi technology. We go from embedded power electronics in Turkey to say components in Pune to say instrument transformers in Delhi to coil products and transformers in Sanghi. Having said that if I talk about the largest growth prospect of HVDC and facts when we had to go to Sebi, the regulation says that we need to use a research agency from India and most of the research has to be sourced from peer reviewed research in India.
Because HVDC and FAX is such a closed market there’s not much of peer reviewed a class data that was available. But if you look at the Google data of say HVDC order of say UK or you put HVDC and tenant you would see multibillion dollar orders coming in. If you look at the volume of data the HVDC market was about 8 or $11 billion last year as per the research report I just told you in England they released an order for $59 billion in one single year. So the data is at this moment not technically proper available online.
But I would say that you can do an industry check with the users in the market that would be typically targeted Adanis or satellites of the world.
Pritesh Chheda
Okay sir, okay.
Bharanidharan Pandyan
And the kind of growth in the. Industry domain are we still projecting that 60 to 70% growth which was mentioned earlier, I mean the HVDC and fat side for next 3 to 5 years. I believe our order book is already reflecting that kind of growth. Because for all renewable energy interconnections in this country and most parts of the world SPACS is now compulsory which means no new renewable plant is delivered without a fax interconnection. And in the fax interconnection which can be SVC or Statcom or bets, we have our components in it already and we are approved and we Are creating capacity to deliver.
Pritesh Chheda
Thank you so much.
Bharanidharan Pandyan
Thank you, Mr. Garbh.
operator
Thank you. Ladies and gentlemen, due to paucity of time, we will take the last question. Saurabh Garg from Prancy Investments. Please go ahead.
Saurabh Garg
Yeah, Afternoon. Am I audible?
operator
Yes, sir, you’re audible.
Saurabh Garg
Yeah. Congratulations on a good set of numbers. I just want to inquire on the consolidated sheet. Employee benefit expenses have risen a lot. So what is the full year projection for this? And what will be the hand called for this quarter? And are we going to increase it as our capacity expands?
operator
Hello, sir, am I audible?
Saurabh Garg
Hello. Yeah. Hello. Sir, our current, current employee benefit expenses. So on consolidated basis is 25 crores. Yeah. Sir, what is your next question? Sir, they have reason lost a lot as compared to the last quarter ended on March 25. So what is the full year projection for that?
Bharanidharan Pandyan
So the employee benefit expenses increased because. Also because we had to increase Nehru in it. Include Nehru in it. Without Nehru, our employee benefit expense is only about 12 crores. 12. Sorry, Meru, was 12 crores that came as an incremental into our employee benefit. Our employee benefit has more or less been stagnant. Okay. It’s just that when we acquire companies, these things come into our pendant.
Saurabh Garg
Okay. So as our capacity expands, so are we looking to expand our increase or headcount also? And what would be the full year projection for this employee benefit expenses that are we looking at?
Bharanidharan Pandyan
Very difficult to answer that question at this moment. But yes, we have started recruiting people across divisions, across companies. As number of people grow up in Sangli. Because the plant is such a huge plant, we may require another 6, 700 people at various levels and capacities coming up in the next year. And they need to be ideally taken before the plant opens so that we can train them. So we would see a small spike in employee benefit analysis. That is an endocs and quality path Nehru. I believe it will be stable.
Saurabh Garg
Okay, thank you.
Bharanidharan Pandyan
So it will not be much of a difference. I would say the 25 crores, what was there last year would be say about say 30 crores or 32 crores this year.
Saurabh Garg
Okay, thank you very much.
Bharanidharan Pandyan
Thank you, Mr. Gar.
operator
Thank you. Ladies and gentlemen. That was the last question for today. I now hand the conference over to Mr. Siddharth Bhamre from Asad C. Mehta Investment Intermediaries.
Siddarth Bhamre
Thank you to all the participants for participating in this conquel. And also once again would like to thank management of Quality Power to give us this opportunity to host phone call on their behalf. Thank you.
operator
Thank you. On behalf of assetsi Meta Investment Intermediates. That concludes this conference. Thank you for joining us. And you may now disconnect your line.