Shilchar Technologies Ltd (NSE: SHILCTECH) Q2 2025 Earnings Call dated Oct. 25, 2024
Corporate Participants:
Alay Shah — Managing Director
Analysts:
Yash Gandhi — Analyst
Abhi Jain — Analyst
Naman Parmar — Analyst
Vivek Gautam — Analyst
Arjun Agarwal — Analyst
Amit Kumar. — Analyst
Yash Sinha — Analyst
Ashish Upganwal — Analyst
Chintan Shah — Analyst
Akshay Shah — Analyst
Gunjan Kabra — Analyst
Yogesh Sarod — Analyst
Venkateshvarlu Vellupalli — Analyst
Unidentified Participant
Bhavin Solanki — Analyst
Waseem Ahmed — Analyst
Jehan Bhadha — Analyst
Presentation:
Operator
Welcome, everyone. Good evening, and thanks for joining this Q2 and H1 FY ’25 Earnings Conference Call of Shilchar Technologies Limited. The investor updates have been uploaded on the stock exchange and on the company website. In case anyone does not have a copy, please feel free to write to us and we will add you to our email list. To take us through today’s results, we have with us from the management team, Mr. Alay Shah, Managing Director; Mr Aatman Shah, Manager Operations; Mr. Prajesh Purohit, Chief Financial Officer. We will start with a brief opening remarks on the business performance of the quarter and half year from Alay sir and then open the floor for Q&A session.
I would like to remind you all that anything and everything that is said on this call that represents any outlook for the future that can be construed as a forward-looking statement must be viewed in conjunction with the risks and uncertainties that we face. These risks and uncertainties have been mentioned in our annual reports. Over to you, Alay sir.
Alay Shah — Managing Director
Thank you, Sam. I appreciate you all joining us today and I would like to take a moment to provide a brief update on performance for the quarter and half year for year ’24, ’25, as well as share some insight into our business outlook. Following my remarks, we’ll open for the floor — open the floor for the questions. The demand scenario for transformer industry remain buoyant across key market segments. India’s power consumption is on the rise with the country gearing up to meet this surge in demand through substantial capacity addition in both renewable and conventional energy sources. According to the recent commentary from CEA [Phonetic] officials, peak electric demand in year ’26 is projected to reach more than 270 gigawatts and by 2035, it could soar to more than 500 gigawatts. This significant growth in power consumption is expected to drive considerable investment in the transmission sector as well of which the transformers are very key beneficiary. Apart from domestic demand, even export demand is looking up. As I have alluded in my earlier remarks, there are significant investment being made in Western market, be it in the existing aging grid infrastructure or in line with global increase in power consumption.
All of this comes down to a very well demand of transformer for us and at least for coming few years. Coming to the company updates, after fully utilizing our 4,000 MVA capacity last financial year, we have successfully commercialized an incremental 3,500 MVA capacity in August 2024, taking our total installed capacity to 7,500 MVA. The result of this expansion are already becoming evident. We observed a notable increase in production during September, contributing to both year-over-year and quarter-over-quarter growth in Q2.
This higher top line has enabled us to achieve positive operating leverage while maintaining healthy gross margin, resulting in improved EBITDA margin and higher profitability in growth. The new capacity base will be available for utilization in H2 and we are fully prepared to maximize this potential as capacity utilization rates increase each quarter going forward. In line with our expanding operation, we are also onboarding and training a significant amount of new talent into the company to meet the requirement of our new set of operation. We are also streamlining production process at our new plant and effectively ramping up the production capacity. We remain committed to achieving our target of INR550 crores during financial year ’24, ’25 and look forward to fully utilizing the incremental capacity in year ’25, ’26. This can result into a turnover of INR750 crores to INR800 crores. The demand outlook we are witnessing indicating strong domestic and export inquiries across various applications, including our existing stronghold sectors. We plan to maintain a similar domestic to export revenue mix for the upcoming financial year as well. Overall, we are optimistic about the future and remain committed to achieving our growth objectives while maintaining operational excellence. Thank you all for your attention. Once again, thank you for joining this call and I now invite you for any questions you may have.
Questions and Answers:
Operator
Yash Gandhi [Phonetic], you may please go ahead.
Yash Gandhi
Hi Alay sir, thank you so much for the opportunity. Am I audible? I can’t hear you, Alay sir. Sorry. I think your mic was on mute.
Alay Shah
Yeah, we can hear you. Please go ahead.
Yash Gandhi
Yes, congratulations again on a great set of numbers. So my question was basically, given the demand environment that you’re seeing, my question is more about FY ’27. Do you think that we should — is there a risk of more capacity coming in the next two years or do you think in FY ’27 as well, there is so much demand potential that will be still able to grow revenues by 40%, 45%?
Alay Shah
Yeah. So we are expecting a demand for coming next four to five years for sure. And once we utilize the full capacity in year ’25, ’26, we will have to increase the production capacity to meet this demand. And for that, we may take a call-in coming December or January, whether to go for an expansion, further expansion and at what capacity. So we will be taking a call in next couple of months.
Yash Gandhi
Right, right. Okay, thank you.
Operator
Abhi Jain [Phonetic], you may please go ahead.
Abhi Jain
Good afternoon, sir. Am I audible?
Alay Shah
Yes, go ahead, please.
Abhi Jain
So just a hygiene question. Any plans on getting the share listed on NSE as well? It’s just currently listed on the BSE, right?
Alay Shah
Yeah, we are seriously thinking on this line also. Of course, decision has not been taken, but we will be again taking decision maybe next quarter.
Abhi Jain
Okay perfect. Sir, just a follow-up question and this is basically on the business demand that you’re seeing. Just wanted to segregate in terms of the demand that you’re seeing for FY ’25 and FY ’26. Could you break the demand in terms of whether it’s consistent across your exports and domestic or whether you’re seeing a higher demand in domestic? And what sort of players or what sort of customers are these repeat orders, repeat customers? Are you seeing newer customers enter into the market, because I just wanted to understand what are the dynamics of the market, this ever evolving market, this huge demand that is growing [Phonetic] in? Just want to understand how sustainable this is.
Alay Shah
Sir, we are mainly catering the renewable energy sector and because of this government push for more and more production of electricity by way of renewable energy, we are expecting huge demand in coming few years and that is the only sector which we are serving. The demand in local market is going to increase quite a bit. And even in export market, as I said in my opening remark that those export demand is also increasing quite a bit. But if you are, I mean, talking to me on the sure shot of demand growth, I am bullish on the domestic market.
Abhi Jain
Yeah. Thank you. Thank you so much for your time, sir. Have a good day.
Alay Shah
Thank you
Operator
We’ll take the next question from Naman Parmar [Phonetic].
Naman Parmar
Yeah, hi, good afternoon, sir. Congratulations on a good set of numbers.
Alay Shah
Thank you.
Naman Parmar
So first question is on my macro side. So how has been the lead-time over the export market? You have seen in previously, the lead-time has been increased from one year to two year? Now currently you are seeing the similar type of lead-time or what has been in the macro, our export market?.
Alay Shah
No. So our biggest strength is our quality, our service, our brand value and our lead-time and our lead-time to our customer has not increased much. So that is the main advantage which we have, which customer finds it attractive and they prefer us over our competitors.
Naman Parmar
No, industry-wide also, there is not increase in the lead-time. It has remained at the similar level or it has decreased.
Alay Shah
It has not decreased for sure. But it has increased slightly. It’s nothing major. I mean.
Naman Parmar
Okay.
Alay Shah
So I would say like instead of 12 weeks now, it has become 14 weeks, 13 or 14 weeks, something like that.
Naman Parmar
Okay. And secondly, how much contribution would be of the IDT or renewable transfer in the overall revenue around 80%, 90%?
Alay Shah
I would say almost 60%.
Naman Parmar
Okay. And lastly on how has been the CRGO supply. There has been any issue on that side in procuring the CRGO lamination and core on [Phonetic].
Alay Shah
Yeah. So there are some issues going on with CRGO imports, which is related to the BIS approval. But material is available and we are not facing any problem in-sourcing this material.
Naman Parmar
Okay. So if you see, if you backward integrate more on the radiator tanks or all that in the in-house only. So don’t you think you can also increase margin from here also? Even though quarter two, you have shown a good set of margin. But do you think that more backward integration you can do of?
Alay Shah
We can always do backward integration, but it depends on the kind of model which we want to adopt. I think for now, we would like to concentrate on producing transformers rather than anything else. So we don’t have any plan at present for any backward integration.
Naman Parmar
Okay. Yeah thank you so much, sir for answering all the questions. Best of luck for the future.
Alay Shah
Thank you.
Operator
We’ll take the next question from Mr. Gyan Prakash Yadav. Okay, we’ll go ahead to Mr. Vivek Gautam [Phonetic].
Vivek Gautam
Hello?
Alay Shah
Vivek?
Vivek Gautam
Am I audible?
Alay Shah
Yes, please go ahead.
Vivek Gautam
Hello, Vivek Gautam this side. Am I audible?
Alay Shah
Yes, we can hear you, please go ahead.
Vivek Gautam
Sir, I wanted to know — raise some questions on the sustainability of the growth and the expected opportunity size and total addressable market, sir.
Alay Shah
So like I said, I mean, there is a lot of demand right now. Yes. Like I said, there is lot of demand of transformers.
Vivek Gautam
Hello?
Alay Shah
Hello, can you hear us? Hello. Can you hear us Vivek ji? Hello.
Operator
We’ll take the next question from Mr. Gyan Prakash Yadav. Please go ahead. Mr. Yadav, please go ahead. We’ll take the next question from Mr. Arjun Agarwal [Phonetic].
Arjun Agarwal
Alay, sir.
Alay Shah
Yes, please go ahead. Yeah. Good afternoon,
Arjun Agarwal
Sir. Congratulations on a good set of results. Sir, I just — I have got couple of questions. Sir, first question is, sir, can you just give a bit of light on what is our — means what is our kind of share if you can give any data in renewable projects like — and what kind of MVA we envisage for like per year like if we install — if India install 30 gigawatt of solar annually, so what kind of MVA do we envisage as a TAM for renewable in India?
Alay Shah
Yes, so I mean, India targets almost 25 gigawatt to 30 gigawatts every year. And practically I think about 15 gigawatt to 20 gigawatt is what gets installed every year. Now we have right now with the additional capacity, 7,500 megawatts of transformer, which is like 7.5 gigawatts. And out of that almost 60% is for renewable energy. So that is what our contribution to the renewable energy sector.
Arjun Agarwal
Okay. And sir, and regarding the capacity expansion, so what is the maximum capacity that we can and that we are looking up to from the existing facility means from the existing land parcel that we have available — that is available?
Alay Shah
Yeah. So I mean in terms of MVA, we can have installed capacity of almost 25,000 MVA to 30,000 MVA if we utilize the complete land parcel what we already have right now.
Arjun Agarwal
Okay. Okay. Okay, sir. And one last question is, sir, in your product — specific in your products in the presentation, I have gone through the products and there was 132 kv hydro transformer. So the same transformer will be if it allow, it can be used into pumped hydro projects?
Alay Shah
Yes, it can be used.
Arjun Agarwal
Okay. Okay. Thank you. I’ll get back in the queue, sir. Thank you.
Alay Shah
All right. Thank you.
Operator
We will take the next question from Mr. Rudresh Kalyani. Mr. Kalyani. We will take the next question from Mr. Amit Kumar [Phonetic]. Mr. Amit, please go ahead.
Amit Kumar.
Thank you, sir. Congratulations for the good set of numbers, sir. Sir, I just wanted to know like if you can provide the bifurcation like how many — I was going through the company details, how many transformers we sold in H1 like linear, telecom, and R4, standard line, high frequency, toroidal, controlled, HV Choke. Is it possible to give that kind of bifurcation?
Alay Shah
No, it would be extremely difficult because there are too many varieties. But we have basically two segments. One is the electronic and telecommunication transformer, which includes all these high-frequency, toroidal, R4, linear transformers and so on. And another category is for distribution and power transformer, which includes all renewable energy distribution, substation transformers. So our electronic and telecommunication transformer division is a very small part of our total sales. It contributes less than 5%. So all rest is coming from the oil-pooled distribution and power transformers.
Amit Kumar.
And sir, what is the export percentage of revenue in H1? And if you could provide the geography-wise allocation like North America, Europe, Middle-East, Africa, just any insight on this?
Alay Shah
So I think almost 45% of our sales came from export and we are mainly exporting to North American countries like US, Canada and Middle-East countries.
Amit Kumar.
Okay. And would you like to provide some guidance for the next five years on volume and top-line guidance?
Alay Shah
So I mean it’s — next year for — like I said in my opening remark for year ’25, ’26, once we fully utilize our production capacity, we can do a turnover of about INR750 crores to INR800 crores. But going forward from that point onwards, if we have to increase the sales, we’ll have to put up new capacity and for which we will be taking decision in next two months for the further expansion and at what capacity and what rating.
Amit Kumar.
Thank you very much, sir, all the best.
Alay Shah
Thank you.
Operator
We will take the next question again from Mr. Vivek Gautam. Mr. Gautam, please go ahead. We’ll take the next question from Mr. Yash Sinha [Phonetic].
Yash Sinha
Hi, congratulations on a great set of numbers. I had two questions. Broadly wanted to understand the split in margin profile between your domestic orders and your export orders. And the second one was more of an industry question. Looking at your competitors, they operate at significantly lower EBITDA margins. So just wanted to understand how you guys are able to do, say, north of 25% EBITDA margins consistently.
Alay Shah
So of course, I mean, I cannot share the exact numbers for profitability, but export sales have much more margin than the domestic sales. And though domestic margins are also improving because of the higher demand, why we make more profit compared to our competitor is because we run a very efficient operation. We have low overheads. We do not have any finance cost. So these are some of the reasons why our profitability is on higher side.
Yash Sinha
Understood. Just following up on this. In the last year, you guys took about six months to get the new CapEx up and running, right? You mentioned that about two-thirds of your land parcel is still available. If you notice that the demand is picking up, what would be the turnaround time in setting up, say, increased capacity on the remaining land?
Alay Shah
Yeah. So again, I mean, we will be taking a call in next two months, but it all depends on what kind of capacity we are installing. But in our case, it is very fast. So if suppose that we decide on setting up a 5,000 MVA new capacity, we can up and running in less than one year.
Yash Sinha
Okay. Okay. That’s helpful. Thank you guys and all the best.
Alay Shah
Yeah. Thank you.
Operator
We’ll take the next question from Ashish Upganwal [Phonetic].
Ashish Upganwal
Can you hear me?
Alay Shah
Yes, we can hear you.
Ashish Upganwal
Yeah. Thank you for this, sir. Sir, there was a question earlier about the current demand is very good versus the supplies and supplies are catching up probably. So any insights on — I mean the supplies that are coming and what sort of demand environment that you see for the next two, three years because these kind of margins I think on domestics are possible when the supply-side is constrained. So your views on how this would go will be very helpful actually.
Alay Shah
Yes, so demand, like I said, is increasing and it will continue to increase as according to my estimate. And I think for next four, five years, we’ll be having a very robust demand of this kind of transformers. And this will continue to give us the good margin. Of course, everybody is expanding capacity and I think once they come in the market with their the exit — I mean the expansion, I think there will be some price pressure, but still the demand will be on higher side. So I would say that going forward, there will be some pressure on the margin, but at the same time, it won’t be that low that you know there will be a problem or there will be a substantial reduction in EBITDA or in the net profit.
Ashish Upganwal
So sir, how — I mean, when do you see this supply catching up? Any — because you are in the industry, so you would know who is putting how much and there would be a kind of a match between the supply, demand. Is it like ’26 or is it away from there also, ’27, ’28 given the opportunity in the market overall?
Alay Shah
I would say that from last quarter of year ’25, ’26, the new capacity will start coming into the market. That’s what my estimate is, yeah.
Ashish Upganwal
Okay. And sir, on the export side, that’s another thing which probably can hedge the overall pricing and margins. So since you are already exporting 50% of your turnover, so is — can you spell out for us how is that opportunity? Is it pretty near-term or is it kind of a very substantial opportunity, which is a continuous one for us? Is it too big yeah.
Alay Shah
So export demand has also increased and it has continued to increase. There is lot of demand in the export market as well. So I personally feel that it will also continue to grow.
Ashish Upganwal
Okay. So if there is a maybe oversupply in the domestic market, exports is big enough to absorb that. Is it right to say that?
Alay Shah
No, I think there is lot of demand in domestic markets. So you cannot say right now that there is an oversupply.
Ashish Upganwal
No, not right now. Maybe two years down the line when capacities just keep flooding in domestic market. That’s what I’m trying to say.
Alay Shah
It’s very difficult to say right now, very, very difficult to say.
Ashish Upganwal
Okay. Okay. But for the next 12 to 18 months, the margins like 25% plus, you see that these can be maintained probably.
Alay Shah
Yes, we are quite confident on that.
Ashish Upganwal
Okay. Okay. Okay, sir. Thank you.
Alay Shah
All right. Thank you.
Operator
Thank you. We’ll take the next question from Mr. Chintan Shah [Phonetic].
Chintan Shah
Thank you so much for the opportunity. Sir, two questions. So one is you explained on the supply side, but I just wanted to understand in terms of capacities that are coming in, is it majorly from the existing customers or existing players who are there in the industry or you see that there are — new players are entering as well. And secondly, from a customer point-of-view also, if you can help us understand, I mean, how so to say, inclined they would be to just stick to the current suppliers or they would be willing to go to some new suppliers as well. So if you can explain that.
Alay Shah
So major production capacity increase is coming from the existing suppliers and there are new entrants also, but transformer is a very important product for any project. So customer always prefer to buy from the established existing supplier who has a very good track record. So they will always get a preference over the new entrant. I mean there is — this is sort of like an entry barrier for the new supplier because without having a trial, without taking — having a track record, nobody would trust for such an important product and for project. So of course, the existing suppliers will have a preference going forward.
Chintan Shah
So I’d understood. And one of our large peers, I mean, who were not present in this renewable IDT transformers that we do. So they are adding a huge capacity, which is coming, say, in December, I believe. Do you think that can change the industry scenario in terms of margins as well as the demand-supply imbalance?
Alay Shah
I don’t think so. I mean, because there is lot of demand right now, I don’t think there will be any impact on any orders or any margins, at least not for coming couple of years.
Chintan Shah
Okay. Got it. Understood. And but last question from my side. I mean, will we ever consider to do a larger size transformers, which are also required or we would stick to the current size of transformers that we do? And so if, can you just explain, I mean, how easy or difficult it is to get into that segment?
Alay Shah
So right now, we have no plan to make any bigger or higher rating of transformer. We would like to concentrate on the present product range what we have considering the demand. But going forward, then anything can happen. It all depends on the market scenario.
Chintan Shah
Okay. Got it. Understood. Thank you. That’s all from my side.
Alay Shah
Thank you.
Operator
We’ll take the next question from Akshay Shah [Phonetic].
Akshay Shah
Thank you for opportunity, sir. Sir, in the last AGM, we have mentioned that we have got — we have received one order from Europe. So what is the opportunity size in that market?
Alay Shah
So the European market is also very good, especially for renewable energy projects. And we had never concentrated on European market. We were more focused on the North America and Middle-East. Now we have started putting efforts in European market and we have got a breakthrough recently. So I’m sure that slowly, slowly that market will get developed and we’ll continue to get more and more orders from there.
Akshay Shah
Okay. And sir, we see more demand from domestic side. And domestic side margin is lesser. So can it impact our margin going forward in at least one year?
Alay Shah
No, like I said earlier, I mean, we are quite confident to maintain our margins, at least for next couple of years.
Akshay Shah
Margins of 30% [Phonetic] that.
Alay Shah
Yes, whatever margin we are having right now.
Akshay Shah
Okay. Thank you, sir.
Operator
We’ll take the next question from Gunjan Kabra [Phonetic].
Gunjan Kabra
Hello. Hi, Alay. Thank you so much for the opportunity. So one question technically I wanted to understand that for example, right now the demand for transformers have increased because suddenly there is energy transition happening and additional power demand and all of that. So if 100 gigawatts have got installed, so the increase — so post this though that huge demand is because of the new 100 gigawatts of solar getting installed. Then next, if 100 gigawatts get installed, then the incremental demand for the transformer industry will slow down a bit or how does that happen?
Alay Shah
So the — I mean, like I said earlier, the government is pushing for more and more renewable projects and the target is 25 gigawatts every year right now, which is not happening, but the actual installation is almost like 15 to 20 gigawatts every year. So this will continue for next five, seven years and probably it will increase also going forward. So demand will continue to be there for next few years.
Gunjan Kabra
So this incremental demand will come in, that is where the target for solar is there. So the incremental solar installations will happen. But for the transform — transformer demand I’m asking with first 100 gigawatts of installation versus the incremental increase in solar installation, I’m asking. Then the demand for transformers will increase at the same rate or it will taper down a bit?
Alay Shah
No. So I think in renewable projects, especially in solar or wind, whatever you are installing that many gigawatts of transformer you will require to install that capacity. So if you are installing, say, 10 gigawatts, so you need 10 gigawatts of transformer. If you are installing 25 gigawatts, you need 25 gigawatts of transformers. So there is no incremental or anything. Whatever you install that many transformers are needed.
Gunjan Kabra
Okay. So it’s one-to-one thing. Okay.
Alay Shah
Yes, exactly.
Gunjan Kabra
Second, I wanted to ask that last one or two weeks back, power ministry actually came up with this thing of CRGO shortage and asked the transformers companies to also tell them that because of all this additional demand that is coming in. So you mentioned that you don’t have any issues in-sourcing it, then — but is there a problem industry level side or what was this circular all about?
Alay Shah
Yeah. So there is a restriction of BIS for the import of CRGO and that has created a temporary shortage. Now the material is available, only thing that prices have gone up slightly. And in our case, since we do a lot of export, we can always import CRGO against the advanced license. So we are not impacted with this kind of shortage.
Gunjan Kabra
No, but industry level this — is there a scarcity because of the circular that came in or because we have tie-ups, that is why there is no shortage for us.
Alay Shah
There is no shortage in the market right now. CRGO is available. Only thing that prices have gone up slightly. That’s it.
Gunjan Kabra
Okay. And if you can explain the supply dynamics in the Europe and US and Middle-East countries and how much are they looking-forward to India as a sourcing destination or in terms of their own demand situation like how much is — are they sourcing it domestically only and how much are they looking forward to import?
Alay Shah
So in foreign countries, to enter into the market and gain the customer confidence, it requires a lot of hard work and you really need to put in lot of efforts. I mean, we have been in this market since last 10 years and we have done a lot of efforts. Now customer trusts us with our service, with our quality and everything and that is the reason now we have started enjoying fruits. But for any new entrant, it would be very difficult. It will take a lot of time for them to penetrate.
Gunjan Kabra
That is true, but how much are they looking forward to you — for India and then you will be the biggest beneficiary because you have worked for 10, 12 years in this space to get export certificate and supply to them. But is there an opportunity like how their demand-supply is governed right now? Are they having their own domestic sourcing or they are looking forward to India or China is what I wanted to.
Alay Shah
No, so every country has a local manufacturer. So you are competing against them and you have to be better in terms of price quality, service, lead-time, everything only then you will get an opportunity. And there is nothing like India focus or China focus. I mean, customer has to have a comfortable — they have to be comfortable with you and they should be able to trust your product and then you will get the orders. Very simple.
Gunjan Kabra
Got it. So we are keeping 50-50 as our domestic and export targets for next two, three years also?
Alay Shah
Yes. I mean it can vary, I would say 60-40 or 40-60 something like that, but pretty much in that ratio only.
Gunjan Kabra
Very much in that ratio. Okay. Got it. Thank you, so much and good luck to you.
Alay Shah
Thank you.
Operator
We’ll take the next question from Yogesh Sarod [Phonetic].
Yogesh Sarod
Hello. Thank you so much. All right, sir. Thank you for the opportunity. Congratulations on the great set of numbers, sir. Sir, few things I wanted to understand from the industry-specific as well as company-specific. One is, sir, our per MVA realization, what can we quote as per MVA realization?
Alay Shah
In our case, it is roughly INR10 lakh.
Yogesh Sarod
Roughly INR10 lakhs. Okay. Got it. And sir, about the capacity that we just increased, we — how much is the utilization for the older capacity and the newer, if you can talk in that term and then when will be — how will be ramping up the production on the newer capacity?
Alay Shah
I think, I already said this in my opening remarks. I mean the old capacity we are fully utilizing, the new capacity we started utilizing from month of September only and we are expected to utilize fully in year ’25, ’26.
Yogesh Sarod
Yeah. Okay. Okay. Got it. And sir, the growth guidance that we have for the INR550 crores for this year and then for the next few years, so on the volume terms, we are considering only the volume growth. Sir, on the price side, do you expect any price fluctuations to come in future or how does the pricing work in here? If the copper prices increase, are they then passed directly to the customers or you will enjoy the margin’s expansion?
Alay Shah
No, sir, all the orders what we received is at fixed price and we have to hedge our risk, which we do it very efficiently and we don’t take any risk. I mean as soon as we get the order, we book the raw material. So we are not concerned with the deviation in the no [Phonetic] commodity prices.
Yogesh Sarod
Perfect, perfect. And sir, for this whole half yearly, sir, have you added any new logos, new customers or all this demand is coming from the existing customers only?
Alay Shah
So majority of our customers are repeat customers, but we do add new customer as well. But right now, the priority goes to our existing customer only.
Yogesh Sarod
Got it. Got it. And so if I can ask one more question.
Alay Shah
Sorry.
Yogesh Sarod
If I can ask one more question.
Alay Shah
Yeah, sure. go ahead.
Yogesh Sarod
Sir, what we are saying is we are currently focusing only on the renewable transformers. So on the power transformer side, sir, what would be the size of the transformer that we are catering to in the MVA terms for the solar? And do we see that when we go towards the higher MVAs, do we see any margin benefit over there and would we like to exploit that?
Alay Shah
Right now, we have no plans to go for higher MVA transformer. Whatever installed capacity what we have, we would like to continue and cater transformer in that segment only.
Yogesh Sarod
So 5 and 50 MVA, 33, 132. Is that the one that we are currently building?
Alay Shah
Yeah, we — I mean in solar, it’s about, 17, 18 MVA transformer, 33 KV or 66 KV plus.
Yogesh Sarod
Okay. Okay. And the margin is straight similar in all of them or the margin also varies across these?
Alay Shah
Yeah, pretty much. I mean it — again, it depends on the demand, depends on the specification, depends on the customer.
Yogesh Sarod
Got it. Got it. I think that answers all my questions, sir. Thank you so much.
Alay Shah
Thank you.
Operator
We’ll take the next question from Mr. Venkateshvarlu Vellupalli [Phonetic]
Venkateshvarlu Vellupalli
Hello sir.
Alay Shah
Hello. Yes, I can hear you go ahead.
Venkateshvarlu Vellupalli
Thank you for taking my call. I just wanted to ask one question. Are you anticipating any risk?
Alay Shah
Business is always a big risk, but right now, I think everything is looking good. I don’t expect any major risk at the moment.
Venkateshvarlu Vellupalli
Thank you, sir. That answers my question. All the best.
Alay Shah
Thank you.
Operator
Next question from the line of Mr. Gunal Bansal. Mr Bansul, please go ahead. We’ll take the next question from Mr. Rakesh. We’ll take the next question from Sarvesh Wode. Mr. Sarvesh, please go ahead. We will take the next question from Mr. Abhishek Jain. Mr. Jain, please go ahead. Abhishek, please unmute and go ahead. Mr. Abhishek Jain?
We’ll take the next question from Chinmai Upadhyay [Phonetic]. Mr. Upadhyay, please go ahead.
Unidentified Participant
Hello, am I audible? Hello?
Operator
We’ll take the next question from Mr. Bhavin Solanki.
Bhavin Solanki
Hello. Hello. Hello.
Operator
Mr. Solanki?
Bhavin Solanki
[Foreign Speech] Hello. Hello, hello.
Operator
Mr. Bhavin Solanki, please go ahead.
Bhavin Solanki
[Foreign Speech]
Alay Shah
Yes, yes. Go ahead, please.
Bhavin Solanki
[Foreign Speech]
Alay Shah
Okay. I’ll explain you. So basically we make IDTs. We don’t make the substation transformer. So for — that’s what I explained that if there is a solar park of say, 2 gigawatts, then it requires 2 gigawatts of IDT, inverter duty transformers. That is what we supply. Then there is a substation. Substation depends on how many such parks are over there, whether they have any future expansion plan or anything. And based on that, they can decide and put up a right capacity of substation transformer. Now those substation transformers are called basically big power transformers, which are in range of 100 megawatts or 200 megawatts and so on.
Bhavin Solanki
Okay. Okay, okay. Got it, got it, sir. Thank you. That’s it from my side.
Operator
Mr. Sarvesh Wode please go ahead. Please go ahead. I will just read out the questions which are there in the chat box. We have expected some [Phonetic] capacity stabilization. Are all those initial issues behind us and can we expect 100% utilization in Q3 [Technical Issues]
Alay Shah
Yeah. So I mean, we will be utilizing a major capacity since we have a lot of orders on hand. We will try and utilize the full capacity in Q3 and Q4 as well. But obviously, with any new production capacity there might be a lot of teething troubles but if we are able to gear up the production fast, yes, we will be utilizing full capacity in Q3 and Q4.
Operator
We will take the next question from Mr. Naman Parmar. Mr. Naman, please go ahead.
Naman Parmar
Thank you for the follow-up question. Just wanted to know what is the current order book.
Alay Shah
We have order book of almost INR450 crores right now.
Naman Parmar
And is executable in how much time?
Alay Shah
I would say by next six to nine months,
Naman Parmar
Six to nine months. Okay, that’s it. Thank you.
Operator
We will take the next question from Mr. Waseem Ahmed [Phonetic]. Mr. Ahmed, please go ahead.
Waseem Ahmed
Am I audible, sir?
Alay Shah
Yes, please go ahead.
Waseem Ahmed
Sir, actually I wanted to understand what portion of the total solar installation cost this IDT is.
Alay Shah
Sorry, can you repeat it again, please?
Waseem Ahmed
Sir suppose solar installation is going on and that cost — full-cost is INR100 crores. So what portion of that cost goes to this IDT transformer?
Alay Shah
Very difficult to say because it varies from project to project. That depends on the site condition, the land cost, the panel cost, inverter cost and so on. But I would say that transformer cost would be maybe around 15% to 20%. It’s very difficult to say. I’m just giving you a very rough estimate.
Waseem Ahmed
Okay, sir. Okay. Fine, sir.
Operator
We’ll take the next question from Jehan from Nirmal Bang. Please go ahead.
Jehan Bhadha
Yeah. Sir, if you can provide some clarity on the competitive intensity in the — in our segments where we operate less than 66 KV, especially on the IDT side? And are there any unorganized players here and how many players would there be overall in India?
Alay Shah
So I would say that in organized sector, there are maybe around good, 15 different suppliers, but then there are lot of small suppliers who cater to the small projects or small solar projects and that number can be anywhere between 20 to [Phonetic] 25, 30 suppliers all over India.
Jehan Bhadha
Okay. And sir, secondly, if you can provide the revenue breakup let’s say, ballpark between captive users, and how much is being demanded by utility-scale private producers and any particular industries which are driving growth?
Alay Shah
So we are supplying mainly to renewable energy sector. We don’t supply any transformer to state utility companies. I said earlier that almost 60% of our sales come from the renewable energy transformers and the balance comes from either export or distribution transformers.
Jehan Bhadha
Got it. Thank you. Thank you.
Operator
Thank you. That was the last question for the day. I would hand over the mic to Mr. Alay Shah for closing remarks. Thank you everyone for participating and it was nice talking to you and we look forward to having similar call in future. Thank you once again.