TD Power Systems Limited (NSE: TDPOWERSYS) Q1 2026 Earnings Call dated Aug. 07, 2025
Corporate Participants:
Unidentified Speaker
Nikhil Kumar — Managing Director
Analysts:
Unidentified Participant
Mohit Kumar — Analyst
Amit Anwani — Analyst
Ganeshram — Analyst
CA Garvit Goyal — Analyst
Vinit Thakur — Analyst
Presentation:
Unidentified Speaker
Sam Ram.
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Unidentified Speaker
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operator
Ladies and gentlemen, good day and welcome to the Q1 FY26 earnings conference call of TD Power Systems Limited. 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. Before we begin, I would like to remind participants that this conference call may contain forward looking statements about the company which are based on beliefs, opinions and expectations of the company as on date of this call.
These statements are not the guarantee of future performance and involve risks and uncertainties that are difficult to predict. With this, I now hand the conference over to Mr. Nikhil Kumar, Managing Director of TD Power Systems Ltd. Thank you. And over to you, sir.
Nikhil Kumar — Managing Director
Thank you.
Nikhil Kumar — Managing Director
Good morning everybody. Thank you once again for joining us on today’s earnings call. I trust all of you would have received our results in investor presentation. Let me start now with the financial performance for the quarter ended 30th June 2025.
Nikhil Kumar — Managing Director
Standalone first our total income for Q1.
Nikhil Kumar — Managing Director
On a standalone basis was Rupees 3.63 billion versus Rupees 2.66 billion over the same period previously. An increase of 36%. EBITDA for the quarter is 18.7% including other income excluding exceptional and treasury income versus 17.17% over the same period previous year. Profit after tax and comprehensive income for the quarter was Rupees 471 million versus profit of 312 million over the same quarter last year. Increase of 51%. Order book for the manufacturing segment is 14.68 billion out of which 10.8 billion is identity drive, motor business 3.84 billion, railways, spares and aftermarket business 0.11 billion. 0.29 billion is the Turkey business.
Auto Inflow statistics. Order inflow during the quarter is 3.92 billion INR and increase of 32% in a quarter on quarter basis. Order inflow from exports and deemed exports is 2.57 billion compared to 2.14 billion previous year. 66% of our quarterly order inflow is.
Nikhil Kumar — Managing Director
From exports.
Nikhil Kumar — Managing Director
24% is domestic consolidated. Our total income on Consolidated basis for Q1 is 3.76 billion versus 2.77 billion to 36%. Profit after tax and comprehensive income for the quarter is 500 million versus 35.6 million increase of 40%. We continue to maintain a strong cash.
Nikhil Kumar — Managing Director
Position of 2.3 billion.
Nikhil Kumar — Managing Director
Order book Market.
Nikhil Kumar — Managing Director
Situation and guidance.
Nikhil Kumar — Managing Director
Let me now go through this.
Nikhil Kumar — Managing Director
The market conditions are fairly similar to the commentary given during the last earnings call.
Nikhil Kumar — Managing Director
Of course, geopolitical situations have changed quite.
Nikhil Kumar — Managing Director
Dramatically over the past one week, but.
Nikhil Kumar — Managing Director
I will be happy to discuss with you everything in the level of detail possible to the extent possible given the.
Nikhil Kumar — Managing Director
Information available at this point of time. Let me now go through each segment and market in some level of detail. India Steam Turbine Market India and Steam Turbine Market Export the market continues to grow at the rate we predicted with no surprises.
Nikhil Kumar — Managing Director
With no surprises both on the upside or the downside.
Nikhil Kumar — Managing Director
The market is steady with around 10 to 12% growth taking place in the capital, power plant business, biomass and waste heat recovery. We have received a good number of orders for larger size 4 pole machines in Q1. There is a strong pipeline of similar orders in Q2. These orders are mainly domestic. In the export market the pipeline is also strong and overall we expect the steam turbine business for our domestic plus.
Nikhil Kumar — Managing Director
Export to grow around 10 to 12%.
Nikhil Kumar — Managing Director
We’re getting steam turbine orders from all over the world and demand is strong and steady. Now coming to the international markets Gas Turbine and Gas Engineering at first I’d like to talk about the tariffs and the impact of tariffs on our business. I’ve been saying all along for quite a while that TDPS will have to move its production to Turkey in the event that the tariffs from India to.
Nikhil Kumar — Managing Director
The US becomes uncomfortably high.
Nikhil Kumar — Managing Director
I think we have reset the situation yesterday after the announcement of the additional 25% tariffs and we will have to move part of our production to Turkey to avoid or to do valuation over.
Nikhil Kumar — Managing Director
There to have the made in Turkey.
Nikhil Kumar — Managing Director
Nameplate which will then attract 15% duty.
Nikhil Kumar — Managing Director
Which is what Turkey has.
Nikhil Kumar — Managing Director
Last earnings call I had mentioned that around 50 to 20% of our sales will be to us. This should be further divided into two parts. Around 3/4 of that, around 75% of this goes to European OEMs who in turn package the generator along with their engine or the gas turbine and do a lot of further value addition on the generator like adding protection panels, control systems and these will then be re exported as a turbine generator set or engine gas engine set to the US market and these will then attract 15%.
Nikhil Kumar — Managing Director
Duty which is the duty which the European Union has now negotiated with the US.
Nikhil Kumar — Managing Director
The remaining 25% direct exports that will 25% off the exports that will have to be diverted to Turkey. That’s about 4 or 5% of our overall business and we have Already been discussing with our customers over a period of time about this possibility that in the event that we have high tariffs we will have to move to the situation. So they are well aware of our Plan B. Now that we have a situation where Plan B might become the reality, we.
Nikhil Kumar — Managing Director
Will still wait and see what happens.
Nikhil Kumar — Managing Director
Till the end of August. Whether this situation will actually continue or.
Nikhil Kumar — Managing Director
Whether India will be able to come.
Nikhil Kumar — Managing Director
To a compromise deal with the U.S. we don’t know. But at the moment we are going full steam ahead with Plan B and.
Nikhil Kumar — Managing Director
Our customers are fully aware of that.
Nikhil Kumar — Managing Director
Some negotiations and lot of extra work.
Nikhil Kumar — Managing Director
Is necessary for us to make this a reality, but no choice to protect our market and our business, we will.
Nikhil Kumar — Managing Director
Have to do what is required.
Nikhil Kumar — Managing Director
Now coming to the market itself, the demand forecast from the US and Europe are extremely high for both gas engine and gas turbine generators and we are expecting a big uptake of orders. Currently, even if the forecast is 180% correct, we expect to exceed the guidance.
Nikhil Kumar — Managing Director
Made for this year and next year.
Nikhil Kumar — Managing Director
Currently they’re given a guidance of 15 billion iron arconsol for this year and 18 billion INR consol for next year. Looking at the way that the orders are flowing in and the forecast given by our OEMs, we will exceed these guidances. Order booking in Q2 continues to be very strong and we will end the quarter with extremely good order booking numbers. During the next earnings call we will provide a detailed upgrade on the guidance for FY26 which is this financial year and give a tentative guidance for FY27. By that time we expect all tariff related questions to be answered and we also expect to know where exactly we stand, where the market stands with respect to tariffs.
Hydro we have achieved excellent order inflow in this segment and next year will be one of the highest in the history of the company. In Hydro, we have also received a big refurbishment job in the last quarter. We are also bidding for further refurbishment projects in India. Even if we are successful in one or two, the order values and margins are very attractive, very large and that will significantly give a big uptick to our domestic order inflow as well as our overall order booking numbers. We are very optimistic about this particular segment. There are a number of jobs in the market and TDPS is well placed.
Nikhil Kumar — Managing Director
To maybe get one or two large jobs.
Nikhil Kumar — Managing Director
Our motor business is growing at the rate that we mentioned earlier this year. We’ll be still on track to achieve the targets. What we have mentioned should be something like 1.5 billion rupees and next year.
Nikhil Kumar — Managing Director
We’Re going to do 2 plus billion INR for the motor business.
Nikhil Kumar — Managing Director
There are a number of orders in the pipeline mainly for synchronous motors, induction motors for export and in particular there are a large number of orders in the synchronous motor segment which will be finalized very shortly. Railways. We have orders now for the US market, for the European market and the Russian market. We’ll be supplying to all these three markets next year. And of course the al storm order for India still continues. So next year we’ll be supplying to all the four markets and we’ll see a significant uptick in our railway business in the next financial year.
Nikhil Kumar — Managing Director
General guidance.
Nikhil Kumar — Managing Director
As mentioned earlier I still stick to 1500 crore for this financial year with a certain upside potential and which will be confirmed in the next quarter and margins will be maintained.
Nikhil Kumar — Managing Director
The current level plus minus 0.5%.
Nikhil Kumar — Managing Director
This brings me to the end of my initial remarks. I’d be now happy to address questions that you may have. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchstone phone. If you wish to remove yourself from the question queue you may press Star and two participants are requested to use answers 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 Mohit Kumar from ICICI Securities. Please go ahead.
Mohit Kumar
Yeah, good morning sir and thanks for the opportunity.
Mohit Kumar
You must have.
Mohit Kumar
Congratulations on a very good quarter order inflow and profitability. My question is given of course the tariff, 25% tariff is imposed on July going up to 50%. My question is do you see the risk of delay of postponement on the existing order and how do you mitigate?
Nikhil Kumar
As I said there are two segments. So one is that 75% of our.
Nikhil Kumar
Exports to the US is actually routed through the OEMs which, which will go to Europe and then there’s evaluation done over there and then from there it is re exported.
Nikhil Kumar
The second part is the 25% makes.
Nikhil Kumar
Direct exports which if all the pending.
Nikhil Kumar
Orders also we will start now trying.
Nikhil Kumar
To convert as much as possible to redirecting that through our Turkish operation. And customers are you know, committed to.
Nikhil Kumar
Still continuing with the order inflow for.
Nikhil Kumar
Months because it’s not easy for them or for us right now to backtrack from the commitments which have already been made. Most of these orders are already signed with the end users and our name.
Nikhil Kumar
Is there on those contracts. So we have to find a way.
Nikhil Kumar
To ensure that the cost that we deliver highly to the end users is within the range of what we discussed earlier, which we had all expected to have a 25% tariff range. So we have to make sure that even if we deliver through a third country, because we manufacture in the third country, then the overall costs, additional costs, are not going to exceed that 25%, which is what we are planning to achieve.
Nikhil Kumar
So our turbine customers are fully aware.
Nikhil Kumar
Of these calculations and fully aware of this because we’ve been talking about this for quite a while, ever since the first round of tariffs took place, say about two or three weeks ago. When the first 25% hit.
Nikhil Kumar
I expected reverse. And we told our customers, let’s expect the worst.
Nikhil Kumar
If things get better, it’s great. But now the worst case situation has happened and people are fully aware and people are fully aligned with our plans.
Nikhil Kumar
So yes, to answer your question, very.
Nikhil Kumar
Long way, we don’t expect any order delays or cancellations.
Mohit Kumar
Understood, sir.
Mohit Kumar
The second question is how much time.
Mohit Kumar
People are fully awareness of what we are doing.
Mohit Kumar
My second question is how much time it will take to ramp up the Turkey production.
Nikhil Kumar
We are already producing in Turkey. It’s not that the plant is idle.
Nikhil Kumar
We have production in Q2 and Q3 both put together. We’ll be doing something like 5 million euros, 4 million to 5 million euros in Turkey in Q2 and Q3. So the plant is running right now.
Nikhil Kumar
Now we have to beef up a.
Nikhil Kumar
Little bit on the manpower and we’ll.
Nikhil Kumar
Be doing mainly assembly and testing operations over there.
Nikhil Kumar
So it’s not a lot of manufacturing and we’ll be able to meet the requirements. So as I said, it’s only something.
Nikhil Kumar
Like 4 to 5% of our overall.
Nikhil Kumar
Sales is going to go through Turkey and that kind of capacity is already available for the, for the US market. And as I said, you know, highly likely that hopefully, hopefully highly likely that.
Nikhil Kumar
We don’t have to do all these.
Nikhil Kumar
Things by the end of the month. But in the worst case, if you have to expand the operations over there, we will.
Mohit Kumar
Understood, sir. Thank you. And all the visa. Thank you.
Nikhil Kumar
Yeah, thank you.
operator
Thank you. Our next question is from the line of Amit Anwani from PL Capital. Please go ahead.
Amit Anwani
Hi sir.
Amit Anwani
Thanks for taking my question. So first question on the very strong commentary for exports and you have delivered good orders in export market also this quarter as well. Just wanted to understand a couple of things. What will, which key markets will drive the exports? Is it the same markets getting better response or the demand Scenario has changed and what has led to the demand scenario changing or is it the tariff where. Which is kind of favorable to US versus other competitions? Some sense on why the export market is growing for us? Is it product competitiveness or the market itself, if you could give some highlight.
And the key markets also?
Nikhil Kumar
Yeah.
Nikhil Kumar
Markets are basically the same. You know, I mean we have been working to develop these markets, Europe and.
Nikhil Kumar
Us for I would say a decade. So this is not something that switches overnight. We have been working on developing these markets and penetrating these markets for a long period of time.
Nikhil Kumar
And as I have been saying for.
Nikhil Kumar
Many quarters right now, the environment or the macro situation for power generation in both the US market and the European market in general is very favorable for us. One is because of the move towards renewables, then the move towards grid stabilization in the European market. Also data center market and AI is starting to pick up in the European market too. US is driven mainly by data center and AI, which is a big boom which is going to continue for some more time.
Nikhil Kumar
And there is an overall shortage of power equipment in the world.
Nikhil Kumar
So you know, as a part of this overall landscape in our DDPS is, is very much a large participant in this market and we have a big capacity which is coming on stream. Our customers are fully aware of it and are banking on this capacity to meet the demand.
Nikhil Kumar
We have to find a way to.
Nikhil Kumar
Deliver the machines to them at a reasonable cost and we have the flexibility of operating in manufacturing in another country.
Nikhil Kumar
So we will make sure that we.
Nikhil Kumar
Protect our markets and deliver the numbers that we have committed.
Amit Anwani
Sure. Second question on the domestic market, where we have given a marginal growth guidance for FY26, barring that if we get a large order from hydro refurbishment, this would be kind of lumpy order.
Amit Anwani
But having said that X of that.
Amit Anwani
What are the underlying reasons for marginal growth for domestic and is the market is kind of tepid in India or particular sectors not growing? Particular sectors growing. So if you could give some sense why we are featuring the marginal growth for domestic market.
Nikhil Kumar
I think I’ve been saying this for, again, I’ve been saying this for a few quarters. This is not something new.
Nikhil Kumar
I’ve been saying, I’ve been saying that the domestic market on the captive steam turbine side is growing steadily and I don’t see that, you know, I mean I said if we have 10 to.
Nikhil Kumar
12% growth, steady growth year on year.
Nikhil Kumar
It is a much better way for the market to grow and steady growth on a long term basis rather than having a boom cycle of 25, 30% growth for one or two years and then crashing to zero after that.
Nikhil Kumar
So I’m happy with this that it’s growing steadily.
Nikhil Kumar
It can depend on this growth. It’s a steady growth and it’s a broad grid growth. So I would say this is a.
Nikhil Kumar
Very positive situation for the domestic market.
Nikhil Kumar
You can expect a steady growth taking place this year and next year and I’m happy with it. But whether it satisfies the overall demand or growth for the company as a whole, it does not. That’s why we have multiple products, multiple geographies and you can see that we.
Nikhil Kumar
Have a very, very broad based line of products which overall delivers a much.
Nikhil Kumar
Higher growth for the company in the region of 20% plus.
Nikhil Kumar
That’s been our strategy also for I.
Nikhil Kumar
Would say we have been talking about this for years right now and now we’re delivering on that strategy.
Amit Anwani
Right. So lastly on the data center we have been supplying to us directly and directly to data centers and you have been highlighting a strong growth there. Any sense on Indian market? Have we worked on the data center side or is there any pipeline for data centers, especially in the domestic market?
Nikhil Kumar
Data center market in India is also quite there.
Nikhil Kumar
I mean it’s quite a big market at the moment. But.
Nikhil Kumar
The data center market is.
Nikhil Kumar
You have to look at it from different segments. It’s a data center market where you.
Nikhil Kumar
Have storage of data.
Nikhil Kumar
That’s what the Indian market is right.
Nikhil Kumar
Now, where you have. It’s a big business.
Nikhil Kumar
It’s a huge business actually.
Nikhil Kumar
But those are limited to smaller size.
Nikhil Kumar
Backup power where you have 10 megawatt or 5 megawatt, maybe larger, one 15 megawatt which is mainly met through diesel engines which are supplied by Cummins or Caterpillar, those kind of machines. The TDPS is not in this market.
Nikhil Kumar
The US market, but India. If India gets into high inputting in large AI server farms and things like that, then the power demand will go.
Nikhil Kumar
To 50, 60 megawatt, even 100 megawatts per server farm.
Nikhil Kumar
That’s when we, our business will then.
Nikhil Kumar
You know, our business will then kick in for the Indian market.
Nikhil Kumar
It’s going to happen.
Nikhil Kumar
You know, at some point in time India also is going to make investments in AI having these servers located in our country.
Nikhil Kumar
So at that point of time, of.
Nikhil Kumar
Course the demand will go up. Those kind of 50, 60 megawatts, 100.
Nikhil Kumar
Megawatts cannot be met by diesel engines.
Nikhil Kumar
People will have to go for larger size gas engines or gas turbines and that’s where we will then come in but at the moment the hottest market is the US market, I would say followed by Europe. And India is right now still in the talking stage.
Amit Anwani
Yes sir. Thank you. Thank you so much for answering.
operator
Thank you. Our next question is from the line of Ganesh Ram from Unified Capital. Please go ahead.
Ganeshram
Thank you. Are you able to hear me clearly?
operator
Yes sir.
Ganeshram
Doing well. Nikhil, congratulations to the results and I must say you keep your introductory part as a mark concise and to the point, which is very helpful. So I would just like to follow up on some of this. Right. The Paris situation is volatile and quite frankly a bit frustrating to watch because it keeps changing every now and then. I’m asking this question from a customer point of view. Are you seeing any fatigue from their end? Are they saying, okay, let’s wait and watch what happens? Are you seeing any scaling back in demand? And compared to other geographies where the tires also keep changing, are we still maintaining that arbitrage versus the other geographies?
Nikhil Kumar
So I see that I was recently in the us I spent the whole, I was there the whole last week.
Nikhil Kumar
My feeling is that the customers are.
Nikhil Kumar
Prepared to pay between, let’s say 15 to 25% more for power generation products.
Nikhil Kumar
I think they already break into the number.
Nikhil Kumar
So I think the threshold is something.
Nikhil Kumar
Like 25 to 30% additional cost on tariffs.
Nikhil Kumar
European products are basically so that for power generation equipment, very little is manufactured.
Nikhil Kumar
In the US Most of it is manufactured in Europe and to a smaller extent manufactured in Japan. We are I would say an outlier supplying generators from India. We are probably the only non European or non Japanese company which is supplying to the US market in a big way.
Nikhil Kumar
So you already have 15% on European.
Nikhil Kumar
Imports to the US and I think.
Nikhil Kumar
The customers have reconciled themselves to that number. These investments are going to go on.
Nikhil Kumar
Regardless because the power plant as a.
Nikhil Kumar
Percentage, the overall investment in an AI.
Nikhil Kumar
Server farm is something like 3 to 4%.
Nikhil Kumar
So even if up at 25% it’s.
Nikhil Kumar
Going to be something like 1 to 1 to 1 and a half percent over an increase in cost, which is not significant from a point of view of someone like a large tech company putting up these kind of investments, someone like Microsoft or Meta or Google or whatever it is.
Nikhil Kumar
So we don’t see any let up of demand. But we have to make sure that from PDP has pointed you, we have.
Nikhil Kumar
To make sure that we are in that range where our products can deliver to the customers cross that threshold of paying. And that’s why I’m saying again and Again, that for a direct exports to the US if this 50% tariff continues beyond August, we will have to manufacture our generators in another country to avail of the lower tariffs from that third country.
Nikhil Kumar
And for us, we have an existing.
Nikhil Kumar
Plant in Turkey, so the fastest way.
Nikhil Kumar
For us to do this is to.
Nikhil Kumar
Go to our existing plant in Turkey.
Nikhil Kumar
So that’s what probably we will do as a first step. And then if this thing continues, it continues to get dragged on for a.
Nikhil Kumar
Longer time, we may look at another, more efficient option in some other place. All those things are right now very fluid. But at the moment what we can respond to immediately is that we’ve always been talking about in this event, we will go to Turkey. And that’s what we have on hand right now. And this situation has now come to.
Nikhil Kumar
The point where we have to take.
Nikhil Kumar
That call provided by end of August.
Nikhil Kumar
We don’t see any change in the current situation.
Ganeshram
Understood, that’s really helpful. And in Turkey, this geography tends to be a bit difficult to navigate for businesses. Last I saw in some other call, there were about 500 companies going bankrupt every month or so. Right. What’s going to be the challenges in scaling this up? I know you have staff and already manufacturing some of it, but are there any of the operational risks? Because this is a geography we once considered exiting. Right. And what would be the financial impact on us? Because we have to read out production through Turkey now compared to the shipping out directly from India.
Nikhil Kumar
So we have been there for seven.
Nikhil Kumar
Years already in Turkey and we have good experience in managing and operating our plant in that, in that region. So you know, if you’re doing dollar or Euro based sales, which you know, the situation is quite stable, but this moment you start doing Celtic lira kind of business, then it becomes from a currency point of view, unstable.
Nikhil Kumar
I don’t expect any problems in doing in manufacturing the smaller number of machines.
Nikhil Kumar
Which are now required, which are right there to the us.
Nikhil Kumar
And as I said, the threshold is that we have to make sure that.
Nikhil Kumar
The cost, the additional cost to our customers doesn’t cross that threshold of pain. What I earlier mentioned, it is going to cost something more to move the products to Turkey and to do ship them there, ship the components over there, do the further manufacturing over there, reassemble them there again, ship it from there to the us it’s going to cost something more.
Nikhil Kumar
But with this negotiation, what we have.
Nikhil Kumar
Done, we can manage the cost to be within that threshold of pain so that our customers are not going to get turned off by those numbers.
Ganeshram
That Makes a lot of sense, especially from.
Ganeshram
The currency point of view.
Ganeshram
If I could just ask for one clarification. I’m sure you mentioned this before, but just to remind us or clarify, status quo, what is the cost advantage of Europe and Japan and with the tariffs and rerouting to Turkey, what will be the situation? If you could just give us a sense.
Nikhil Kumar
So the, you know, let’s say that, let’s say our product is, let’s say.
Nikhil Kumar
100 European or other products would be something like 125 or something like that. 25% more on a baseline before tariffs, you know, and then you have a 15% tariff on European products. It goes to something like 150.
Nikhil Kumar
Our 100 should be somewhere in the.
Nikhil Kumar
Region of 125 or 130 at the maximum. So we still maintain a arbitrage of around 20.
Nikhil Kumar
And then we see an absolute number.
Nikhil Kumar
The gas gets reduced to some extent.
Nikhil Kumar
But not to an extent where it.
Nikhil Kumar
Jeopardizes our cost advantage. There’s still a significant gap.
Ganeshram
Got it. So you’re saying after rerouting you’ll still be at125,130, which is. Although the gap is smaller. The gap exists.
Nikhil Kumar
Because they have the 15% duty. So we still have still that 20.
Nikhil Kumar
Gap is still there.
Nikhil Kumar
This is a rough number, the plus, plus, minus. But in general, this is.
Nikhil Kumar
The arbitrage still remains.
Ganeshram
Okay, that makes perfect sense. And last question, and I’ll give some SC after that, is the increase in employee cost this quarter, I assume is coming with the new shed being commissioned. So are we on track with that?
Nikhil Kumar
We are on track with that. There are some small delays, but we will start commissioning the third plan progressively.
Nikhil Kumar
From Q2 and it will go on in Q3.
Nikhil Kumar
There are some small delays.
Ganeshram
Okay, understood. Thank you. Thank you, Mrs. And good luck.
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 Ca Garved Goel from Envest Analytics Advisory llp. Please go ahead.
CA Garvit Goyal
Hi, good afternoon.
CA Garvit Goyal
And most of my questions are answered. Just one clarification, like we are going to scale up our production in Turkey.
CA Garvit Goyal
That we spoke about.
CA Garvit Goyal
Do you think, like, looking at the recent things happened between India and Turkey.
CA Garvit Goyal
During the war season, do you believe.
CA Garvit Goyal
Like, is it going to be a permanent solution for TD Power in longer term?
Nikhil Kumar
As I said, I just mentioned a.
Nikhil Kumar
Little bit earlier that for the moment.
Nikhil Kumar
This is our fastest way to do.
Nikhil Kumar
This and that’s what we’re going to do because we have the plant running and it’s 100% subsidiary of TDPI.
Nikhil Kumar
So this is the fastest way for.
Nikhil Kumar
Us to do we do it once we. You know we need to breathe a little bit right now. Right.
Nikhil Kumar
So we need to have something and start breathing.
Nikhil Kumar
So.
Nikhil Kumar
Once we have the flow of products going in through our Turkish operation.
Nikhil Kumar
And the situation stabilizes, of course we’re.
Nikhil Kumar
Going to look at a more efficient.
Nikhil Kumar
Solution and look at whether more efficient and more stable solution somewhere else. We will look at it, we’ll examine it and then we will take a call.
Nikhil Kumar
But right now I’m keeping this option open.
Nikhil Kumar
I’m not committing myself that I’m going to go somewhere else.
Nikhil Kumar
But like you are just saying, you know, one has to evaluate the risks.
Nikhil Kumar
And we have to take a call and do what’s best.
CA Garvit Goyal
Got it.
CA Garvit Goyal
Thank you very much.
Nikhil Kumar
But I don’t think in general, I don’t think that political differences between two.
Nikhil Kumar
Governments really trickles down to business. I don’t think that happens. At least it’s not happening between India and Turkey.
CA Garvit Goyal
Got it.
CA Garvit Goyal
Thank you, sir.
CA Garvit Goyal
Thank you very much.
operator
Thank you. The next question is from the line of Jainam Jain from ICICI Security. Please go ahead.
Unidentified Participant
Thank you for the opportunity. Congratulations on a great set of numbers. So my question is on the pricing side for motors and generators. Sir, what is the average relation of motors and generators? We have maybe some broad range.
Nikhil Kumar
I can’t give that number. Every motor is different. Every generator is different. Sorry, I can’t really give a number to you.
Unidentified Participant
Okay, sir. Thank you. Okay.
operator
Thank you. Our next question is from the line of Vinit Thakur from Plus 91AMC. Please go ahead.
Vinit Thakur
Thank you for the opportunity. Congratulations. Amazing results.
Vinit Thakur
I had just one quick question regarding promoter holding. Decline has been fixed.
operator
Sorry to interrupt. So your voice is breaking a lot.
Vinit Thakur
Oh.
operator
Hello. No, sir, your voice is still breaking. I request you to read.
Vinit Thakur
Is it better now?
operator
Could you speak something long sentence?
Vinit Thakur
Yeah, I saw basic.
operator
Your voice is still breaking the. Thank you. Our next question is from the line of Himanshu from Bugle Rock Asia. Please go ahead.
Vinit Thakur
Yeah, Hi Nikhil. Good setup. But I. I had a some confusion. Okay. On the statement what you gave. Okay. About U.S. business. Okay. So if I look at your. Our annual report of this year now. 145 crore of sales was through US subsidiary and 216 crore is through German subsidiary. Okay. So you are saying that out of this 216crore 3 4th goes to us when we repackage. And that is what we like to build in or bring it back to Turkey for manufacturing. Is that the way or how should we understand it?
Nikhil Kumar
Because somehow it’s far more complicated than that. Himanshu, I can’t give you an explanation on the way that the European sales and US sales takes place.
Nikhil Kumar
In relation.
Nikhil Kumar
To whatever I have been talking to you.
Nikhil Kumar
It can’t be tied up one to one like that. So because there are so many other products that are sold through our US.
Nikhil Kumar
Customers, so many other products go through our European subsidiary. We do hydro, we do steam turbine, we do other products, we do geothermal. We do so many products through our other subsidies. So it’s not possible to say that only data center business has been done and therefore you can do a one to one to one to one explanation in just a few sentences. I can’t answer this question to you in a very simplified way.
Vinit Thakur
I’m sorry, but would it be right to say that 150 type crore of sale is to us and a portion of that goes through Europe?
Nikhil Kumar
I said to you that about 15 to 20% of our overall sales is.
Nikhil Kumar
To the US market.
Nikhil Kumar
So if we are going to do.
Nikhil Kumar
1,500 crores, 20% of that will be 300 crores.
Vinit Thakur
And so nearly what the question comes that 3 4th can be. So can the Turkey subsidiary scale up so quickly in next one year?
Nikhil Kumar
We have done. The capacity of our Turkish unit is, you know, we have done in the.
Nikhil Kumar
Past 120 crores of sales in one year complete manufacturing in the Turkish unit.
Nikhil Kumar
So here we’re not doing complete manufacturing.
Nikhil Kumar
We’re going to be doing a partial manufacturing. So yes, it can take.
Vinit Thakur
Okay. And one last question. Bookkeeping. What was the trade receivable at the end of the quarter? If burial action can give that number.
Unidentified Speaker
Yes, it is 425 crores.
Vinit Thakur
Okay. The whole quarter sales number nearly is in there.
Unidentified Speaker
Okay.
operator
Thank you. Our next question is from the line of Aditya Trivedi from Nipian Capital. Please go ahead.
Unidentified Participant
Yeah. Hi. So given TD Power’s entry into long duration energy storage and this is as I’ve seen on the investor presentation through the commissioning of a generator for Energy Dome in Italy, what is the potential market size of a CO2 battery storage plant globally and what growth outlook do you foresee for similar projects for td?
Nikhil Kumar
I don’t have an answer for that.
Nikhil Kumar
In terms of what is the growth potential in terms of numbers.
Nikhil Kumar
One of our major customers in India.
Nikhil Kumar
Has also tied up with this company.
Nikhil Kumar
And they’re also going in a big way into the CO2 market with the same company and.
Nikhil Kumar
This Italian company is.
Nikhil Kumar
Also licensing this technology to other companies all over the world. I don’t know, it could be, it.
Nikhil Kumar
Could enter into hundreds of megawatts after some time.
Nikhil Kumar
But it’s very, very hard for us to say today just the pilot plants being commissioned whether you know, how quickly this technology is going to be absorbed and rolled out across the world. Normally these things take a little bit of time but it’s really a very exciting technology and it takes CO2 from the air, from the atmosphere. So it’s very, very environmentally friendly. I can expect this to be very large business in the future. And as I said, one of our major Indian customers also getting into this in a big way. We’re working with them very closely on.
Nikhil Kumar
This and I think that they will.
Nikhil Kumar
Do very well in this segment.
Unidentified Participant
Okay, thank you so much. That’s it from mine.
operator
Thank you. Our next question is from the line of Amit Agicha from Edgy Hawa. Please go ahead.
Unidentified Participant
Yeah, thank you for the opportunity. Sir, what is the current size of the order book and how much of it exhibitable in FY26?
Nikhil Kumar
I think that we have 1400 crore order book.
Nikhil Kumar
So many?
Unidentified Speaker
Yeah, we have executable order for this year 1450. And you know as Nikhil said there is a upward, you know, revenue possible but we have given an indication of 1500 so book and bill looks to be only 50 crores. So already we are in a very, very comfortable situation for 1500.
Unidentified Participant
And the second question out of the 4045 crore capex plan for FY23, how much is growth versus maintenance versus automation?
Nikhil Kumar
Madhalaspi, you can take this question please.
Unidentified Speaker
Yeah, see replacement is around 20 crores which is equal to the depreciation amount.
Unidentified Participant
And the other is for the growth. Thank you for the reply and all the best for the future.
operator
Thank you. Our next question is from the line of Akshay Ji from Exponent tribe. Please go ahead.
Unidentified Participant
Thank you for the opportunity.
Unidentified Participant
In the earlier questions you spoke about the fact that when data centers become larger the legal genset backups are not useful and one needs to sort of put gas in these device. Two questions here. One is that why is it that diesel gensets are not sort of usable? Is it that they cannot give high power requirement? And B are genset are gas engines and gas turbines interchangeable or are they part of the same product that we would give.
Nikhil Kumar
Diesel engines? Largest diesel engines go up to Maybe.
Nikhil Kumar
I think 2, 3 megawatts. The large manufacturers That I mentioned. Who Nims I mentioned a little bit earlier. 2 megawatt to 2.5 megawatts.
Nikhil Kumar
If you have 100 megawatts requirement, you.
Nikhil Kumar
Can’T have 50 engines running in parallel. It’s very, very complicated and no one invests like that. You would prefer to have three or four machines of 25 megawatt size. So that’s how power plants are built. Nobody puts 50 engines or 100 engines running in parallel to meet a requirement of 100 megawatt. Gas engines go up to 10 to 12 megawatts. So depending on the overall size you have flexibility of which type of engine to use. And in general, diesel is not preferred as a.
Nikhil Kumar
It’s not possible to burn diesel to.
Nikhil Kumar
Meet environmental requirements in the western countries. You have to use gas. So gas is the only solution for this kind of power generation in the western countries.
Unidentified Participant
Sure.
Unidentified Participant
But when we, when you’re speaking about that in terms of India Capex built out. So we would. Our expectation is that when we have much larger data centers sort of running in India that they would run on gas backup and not on diesel. That’s a fair assumption.
Nikhil Kumar
India is at a talking stage right now. So I think let’s see how it evolves. It’s still, you know, it’s going to, I don’t know, it’s going to take.
Nikhil Kumar
India needs to first figure out how.
Nikhil Kumar
To get power for, you know, basic infrastructure and then you can talk about power for AI, but it’s for India.
Nikhil Kumar
I mean it’s just, it’s just a little, it’s just a conversation that you.
Nikhil Kumar
Can have not done reality right now. So I think I’m not certainly it’s not on my data screen right now.
Unidentified Participant
The second is the center that we.
Unidentified Participant
Are developing in the UK for larger size products that you spoke about last call and in the annual report.
Unidentified Participant
Just can you help us understand maybe.
Unidentified Participant
A little bit more detail what kind of products that we are not picking right now that we will end up sort of developing there? What is the opportunity we are seeing there and when does it sort of start rectifying in terms of orders?
Nikhil Kumar
So we are developing our own range.
Nikhil Kumar
Of products from larger machines, say 50 megawatt to 150 megawatt, our own design. And we need the design talent required to develop these products. The talent we have located in the UK and UK nationals would like to work out of the UK and that’s the reason why we have selected these people and creating infrastructure for them to work for us all over the UK.
Nikhil Kumar
The product I already mentioned, and this.
Nikhil Kumar
Business above 50 megawatt is a very large business worldwide.
Nikhil Kumar
So far we have worked with another.
Nikhil Kumar
Licensed partner to a large company which has a lot of restrictions. And now we have come to an end to that contract and developing our own products which can address a much, much larger market.
Nikhil Kumar
So this is something for our growth.
Nikhil Kumar
Which we’ve been looking at 28 onwards. But we’re building the foundation right now. You have to build in the design capability, manufacturing capability, and then go out in the market in a big way with our own products. But all these things take time. And so we are looking at this to be a big area of our business 28 onwards.
Unidentified Participant
Sure.
Unidentified Participant
So if you look at your history.
Unidentified Participant
And how you kind of went from being the domestic focused company to a global, you know, much larger global business, it took us a while to build credibility and be able to sell different markets. Right. I mean, if I can take a few steps back and look at a 10 year kind of a now for the newer, larger products, would the journey be as long? Because you’re saying 28, which seems really short compared to at least what it may have taken in the past. So is this something that we think.
Unidentified Participant
Because of the credibility you’ve generated so.
Unidentified Participant
Far, that the speed to market for larger product will be changing?
Nikhil Kumar
Yeah, yeah.
Nikhil Kumar
Of course.
Nikhil Kumar
We’re not an unknown entity in the market right now as we were 10 years ago. So we are a known entity and therefore you take less time.
Unidentified Participant
Sure, certainly. Okay, that’s helpful. Thank you for that.
operator
Thank you. I request to all participants, please restrict your questions to two question per participant. Our next question is from the line of Soham Dingra from Philip Capital. Please go ahead.
Unidentified Participant
Hello, sir. So my question was with respect to the recent talks at the government that there have been rumors about private sector participation in the nuclear sector in India. So what kind of tailwinds do you see specifically for the company in case this actually happens and private sector is allowed to participate in the nuclear sector?
Nikhil Kumar
Yeah. We will certainly see a lot of increasing motor business.
Unidentified Participant
Sorry, sir Lauder.
Nikhil Kumar
We see a lot of increase in the motor business.
Unidentified Participant
Okay, okay. And on the generator side?
Nikhil Kumar
No, those will be way beyond our size still.
Nikhil Kumar
So we’re not going to be participating in the generative cycle. We’re not going to be making 300, 400 megawatt machines. So that’s not going to be our target even for the smaller nuclear power plant which will be in the private sector.
Nikhil Kumar
But there will be a lot of.
Nikhil Kumar
Motors required in each and every plant. And that’s what we’re targeting.
Unidentified Participant
Okay, thank you so much sir.
operator
Thank you. Our next question is from the line of Karthik from Suyash Advisors. Please go ahead.
Unidentified Participant
Yeah, hi, good afternoon. I just wanted to clarify the example you gave earlier of the cost difference between India and European manufacturers. So you said 100 going to say 125 to 130. I’m assuming that the 100 already embeds the 10% tariff being imposed by the US so would be, you know so can you split the remaining 30 into say 15% of incremental duty and 15%, how much of that would be? What I’m trying to really understand is how different would be the cost structure for doing stuff in Turkey versus India.
Nikhil Kumar
Yeah, so I, you know these are, these are numbers. So 100 cost goes to 100 and.
Nikhil Kumar
115 will then have a duty on top of that. So we go to 130 somewhere. 130 that’s approximately where it’s going to be.
Unidentified Participant
So I, I, what I wanted to understand is the cost of mansfac doing things. How is it different in Turkey versus India? So like to like would Turkey be.
Nikhil Kumar
More expensive earlier cost of hundred from India would become 115ex Turkey.
Unidentified Participant
Yeah. How much of that would be great? You know, I know you answered it but thanks, thanks.
operator
Thank you. Our next question is from the line of Naman Parmar from Navisha Investments. Please go ahead.
Unidentified Participant
Yeah. Good afternoon sir. Thank you so much for the opportunity. Firstly I wanted to understand with the current 2 facility how much revenue potential can you do? And the third plant will be commissioning.
Unidentified Participant
By.
Nikhil Kumar
The third plant we progressively commissioned as I said in Q2 and Q3 we initially we will have an additional.
Nikhil Kumar
Capacity of around to take us to around 2000 crores. But we are already working on optimization and better manufacturing, lean manufacturing and other things like that. So we easily see a potential to take this to 2,300 2400 crores.
Nikhil Kumar
So we will not be making an.
Nikhil Kumar
Further investment, large investment at least for the next two years and we want to utilize our assets in a much better way.
Unidentified Participant
Okay, understood. And secondly on the order book side can you just give the breakup how much is from the generator and the motors?
Nikhil Kumar
Yeah, I don’t have the number with.
Nikhil Kumar
Me but you can give it to your fine.
Unidentified Participant
Okay. Yeah, thank you. And lastly on the labor sourcing side as you mentioned only that the manufacturing, major manufacturing is not happening in the Turkey but don’t you think the sorting of the labor is a Very key challenge in the Turkey region. So how you will manage that risk?
Nikhil Kumar
We need some five or 10 people. It’s not a big deal. It’s not. We don’t need 500 people.
Unidentified Participant
Okay. Okay. And lastly on the tariff side, so current situation, what is perceiving in the US like you are getting a major order and all the impact of the tariff has been won by the customer only.
Unidentified Participant
Right.
Unidentified Participant
You are not bearing any impact on the tariffs. And as you mentioned that the other competitors in the Europe and Japanese are mostly cost, mostly costly above around 20 rupees if you’re. If your product costs around 100.
Nikhil Kumar
Yeah, I have already given the numbers on all this. You know, I don’t want to. Please, please excuse me.
Nikhil Kumar
I don’t want to repeat it the third time.
Unidentified Participant
Okay. Okay. Thank you so much.
operator
Thank you. Our next question is from the line of Bala Subramanian from Aryan Capital Markets Ltd. Please go ahead.
Unidentified Participant
Good afternoon sir. That UK design center is majorly focused on develop larger generators like 4200 megawatt. What is the CAPEX for this initiative and what is the expected timeline for commissioning this 100 megawatt generators? Is there any requirement JP with OEM for this initiative?
Nikhil Kumar
We have already made the manufacturing investment.
Nikhil Kumar
A long time ago and we don’t have to make major investments to do.
Nikhil Kumar
This.
Unidentified Participant
When we can expect a commercialization. Sir.
Nikhil Kumar
We have just started the design center.
Nikhil Kumar
We will update you on progress in the upcoming quarters.
Unidentified Participant
Okay, sir, thank you.
Nikhil Kumar
It will take time.
Nikhil Kumar
We will get back.
operator
Thank you. Our next follow up question is from the line of Ganesh Ram from Unifi Capital. Please go ahead.
Ganeshram
Thank you. Just some bookkeeping questions. If you could just clarify the situation on working capital such as receivables, payables and inventory and on other income. What’s the extent of forwards we’ve booked and how should we see this pan out? What’s the sensitivity to forex here?
Nikhil Kumar
One last thing.
Nikhil Kumar
Can you take this question?
Unidentified Participant
Yeah. Working capital actually it is running around 120 days and this is what it would be because revenues are also, you know, towards the end of the quarter there is very high billing and also it comes into the details. So 120 days is what you can estimate. And the forward booking of euros we have done for this year and we are quite well placed on those numbers.
Unidentified Participant
I’m just trying to get a sense of where this other income number is going to land up and if there’s anything that you should know from the forex point of view because it was Quite elevated last year. That’s.
Unidentified Participant
That’s have to be taken on a quarter, on quarter basis depending on the moment of euros because of what time what we have booked it will. It will have to be reviewed on a quarter, on quarter basis only. It’s difficult to make any commitment on for the full year right now. Okay.
Ganeshram
And currently how many people do we have employed in Turkey? Who manufacturing staff?
Nikhil Kumar
Currently about five to six.
Ganeshram
Okay. Ten more people from here. Understood? Okay. Understood. Understood. Understood. Okay. Thank you.
operator
Thank you. Our next question is from the line of Kiran from Table Tree Capital. Please go. Go ahead.
Unidentified Participant
Hi. Thanks for the question.
Unidentified Participant
Tough times. I hope we all come out of this together. So my question is more on the promoter selling that’s happened. So in terms of further selling or is it, I mean because we’ve been promote shareholding is lower as it is. So there’s been further selling that has happened over the past three months back or two months back. So in terms of any, is there any assurances that there’s no not going.
Unidentified Participant
To be any more promoter selling or.
Unidentified Participant
There’s nothing of that sort. If you can get some clarity on.
Unidentified Participant
That.
Nikhil Kumar
There is nothing of that sort planned for at least for the next.
Nikhil Kumar
Two to three years.
Nikhil Kumar
At this point of time. I can say that we are not.
Nikhil Kumar
At all, not at all looking at that for the next 24 months at least.
Unidentified Participant
Okay.
Unidentified Participant
Okay.
Unidentified Participant
Sure.
Unidentified Participant
Okay, thank you.
operator
Thank you. Our next question is from the line of Amit Anwani from PL Capital. Please go ahead.
Amit Anwani
Yeah, this one follows around the aftermarkets and stairs. If you could give some sense for aftermarket since there’s business growth from here for us, will it be at company rate? And second, are we doing this? Is there any possibility of market expansion? Are we doing aftermarkets? And there also, are we seeing the opportunity in export market, some color on the aftermarkets and spares business for next.
Unidentified Participant
Two years here.
Nikhil Kumar
Can you answer?
Unidentified Participant
Yes.
Unidentified Participant
Aftermarket business as it as we told in the last quarter also we are focusing more on that and as a result of that we have got very big orders in the last quarter for the refurbishment job, mainly in the hydro. So this aftermarket business is mainly coming from the hydro market also we are looking for aftermarket business outside India and we also participated in one big exhibition in the US to last week. And yeah, it is going to grow and there are good number of orders. We are participating in the tenders and if they get converted into orders, those are big numbers.
Amit Anwani
What is the current contribution and will it grow faster than the products business.
Unidentified Speaker
It will not grow faster than the product business. New product is the main growing business for us because in generators, you know, our own generator fleets are quite young and we are not targeting our own fleet of generators. We are targeting all our competitors machines as well. One is the replacement business and other one is the refurbishment business.
Nikhil Kumar
So we said that our aftermarket business will be something like 6, 7% of sales and we stick to that.
Amit Anwani
So thank you so much and all the best.
operator
Thank you. Ladies and gentlemen. As there are no further questions, I now hand the conference over to Mr. Nikhil Kumar, Managing Director of TD Power Systems Ltd. For closing comments. Thank you. And over to you sir.
Nikhil Kumar
Thank you everybody for joining our call. If you have any further questions, please feel free to get in touch with us. We look forward to interacting with you.
Nikhil Kumar
Or seeing you personally at some upcoming investor conference in office in September.
Nikhil Kumar
Thank you.
operator
Thank you on behalf of TD Power System limited. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.
Unidentified Participant
Thank you.