TD Power Systems Limited (NSE: TDPOWERSYS) Q4 2025 Earnings Call dated May. 13, 2025
Corporate Participants:
Unidentified Speaker
M. Varalakshmi — Chief Financial Officer
Nikhil Kumar — Managing Director & Executive Director
Vinay Hegde — Head of Sales & Marketing
M. N. Varalakshmi — Chief Financial Officer
Nikhil Kumar — Managing Director
Vinay Hegde — Global Head, Sales & Marketing
Analysts:
Unidentified Participant
Piyush Sevaldasani — Analyst
Deepesh Agarwal — Analyst
Mohit Kumar — Analyst
Mythili Balakrishnan — Analyst
Ganesh Rajagopalan — Analyst
Shyam Maheshwari — Analyst
Jainam Jain — Analyst
Himanshu Upadhyay — Analyst
V.P. Rajesh — Analyst
Prolin Nandu — Analyst
Aman Saifee — Analyst
Krupa Desai — Analyst
Nupur Kogta — Analyst
Kushal Goenka — Analyst
Vinit Thakur — Analyst
Akshay Jogani — Analyst
Presentation:
operator
Ladies and gentlemen, good morning and welcome to the TD Power Systems Limited Q4FY25 earnings conference call. This conference call may contain forward looking statements about the company which are based on the beliefs, opinions and expectations of the company as of date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will remain in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes.
Should you need assistance during the conference call, please signal the operator by pressing Star then zero on your touchstone telephone. Please note that this conference is being recorded. I now hand the conference over to Mr. Nikul Kumar, managing Director. Thank you. And over to you sir. Nikhil sir, please go ahead ladies and gentlemen. Ladies and gentlemen, please stay connected while I go ahead and rejoin Nicole sir. Thank you. IT Ladies and gentlemen, due to technical issues, Nikhil sir will connect us shortly. Now we have Valalakshmi Ma’ am. Please go ahead.
M. Varalakshmi — Chief Financial Officer
Good morning everyone. Thank you once again for joining us today on our earnings call.
I trust all of you have received our results and investor presentation. Now I would like to Discuss with you TDPS financial performance for the year ended 31st March 2025 moving on to the financial performance for the 12 months ended 31st March 2025 on standalone basis. Our full year total income on standalone basis was 12.88 billion versus 10.07 billion over the same period previous year. Increase of 28%. EBITDA for the full year is 17.46% including other income excluding exceptional and treasury income versus 17.59% over the same period previous year. Profit after tax and comprehensive income is 1530 million versus profit of rupees 1,223 million same period previous year and increase of 25% during the year.
The company has provided for diminution in the value of investment of Rupees 30 million being 50% of its investment in its subsidiary DF Power Systems Private Limited Order Book Order book of manufacturing segment is 13.66 billion. 68 billion. 10.12 billion. Regular manufacturing business 3.16 billion. Railway business space and aftermarket 0.11 billion. 0.29 billion. Turkey business export and themed export excluding railway order is 62%. Order inflow statistics. Order inflow for the quarter is 4.13 billion. Highest ever since inception of our company. Order inflow has increased 43% Q2Q basis and 41% over a YOY comparison basis. Current year order book is 14.79 billion.
Previous year order book 10.51 billion. 68% of our quarterly order inflow is exports while 32% is domestic. Domestic order inflow for the last few four quarters have been 28%, 27%, 32% and 40% which is rupees 81 crores, 96 crores, 130 crores and 153 crores respectively. Order inflow from deemed and Direct export is 9.8 compared to rupees 5.9 billion. Previous year export and deemed export order inflow is 68% of total order on a console basis. Our total income on console basis is 13.02 billion versus 10.17 billion. An increase of 28% profit after tax and other comprehensive income for the year is 1734 million versus 1156 million increase of 50%.
We continue to maintain a strong cash position of 1.99 bpm. Order book. Market situation and guidance Market condition. The order inflow continues to be very strong from exports. In our generator and Merca business we give our initial guidance at thousand five hundred crores with a strong upward potential. Given the sustained order inflow as well as the third Plant Commission coming on stream in H2 of this financial year, EBITDA margins will be in the range of 18 to 18.25% with an upward movement potential Market scenario. Domestic market Looking at the entire year of FY25 versus FY24, the domestic part of order inflow has increased from 4.41 million to rupees 4.6 million.
4% growth. However, the rate of growth has moderated and right now we are factoring in 3.2% growth and.
Nikhil Kumar — Managing Director & Executive Director
Back on the call. Okay.
M. Varalakshmi — Chief Financial Officer
You’ll take it forward, sir, from here?
Nikhil Kumar — Managing Director & Executive Director
Yeah, I’ll take it forward from here. Sorry everybody. I think I become disconnected. So the rate of growth in the domestic market is just 4%. And we are factoring in 4% growth in domestic market for this year. Also, the market in India is still a single dimensional market in capital power plant business. So it depends on brownfield and greenfield private sector investment. Biomass and garbage burning plants are relatively underperforming in terms of potential versus actual.
In the hydro market in India, we’re expecting some large orders in the refurbishment sector. If these are successful, we can see double digit growth of the domestic market in terms of order inflow for FY26 to be excluded in FY27 for GDPF it is the export business which is the main backbone of the business international market. We have extremely strong growth in the order book and export business from gas turbines, engines and motors. Order inflow from direct and deemed exports has increased by 3.95 billion from 5.9 billion to 9.85 billion, which is 67% growth on a year on year basis.
These numbers are a clear evidence of our business results. Exports will continue to be a growth driver for the future and we have many more applications which are generated in the international market. Compared to India. We continue to win orders in gas engines and gas turbine generators. There is a huge growth in fracking, data centers, AI server farms, grid stabilization units and of course Ukraine. The demand is simply huge and the market growth presents the company with the most exciting growth opportunities ever since its infection. For example, the new German government has caused the expedited installation of 20 gigawatts of gas power only for grid stabilization.
The recent blackout in Spain and Portugal has suddenly increased awareness of grid stabilization and what can happen when the grid is overly dependent on renewable power. AI farms and data centers in the US continue to be a huge market with massive requirements and we are very well positioned with the OEM customers to give the part of this exciting growth. Coming to traction, we’re in the way to deliver prototype units for Germany, US and CIS countries. We expect strong volumes. We have strong volume contracts for FY27 and we will see a sharp increase in this segment.
In FY27 Hydro, the order inflow continues to be strong and steady. The new mission business is all export. As I mentioned earlier, there are a number of refurbishment jobs in the market in India and we hope to win a few of them. In general, the export business is a key driver for our growth. For generators with big orders in gas, hydro and traction, we are participating and winning business in larger AI data farms, AI server farms, data centers and this year we put larger generators into the market, up to 40 megawatt, even 45 megawatt size.
And this segment of the market is equal to the in size compared to the market where we’re currently operating in. So this will open up a huge market potential for TDPs in FY27 and beyond. In the motor business, we are on track to achieve the numbers we indicated earlier. Once again, our markets are mainly exports and we see a big pattern of orders in the Middle east and India. Turkey. We have received the orders from Turkey after a long pause in the market. We deliver the generators this year. It is certain the Turkish plant will deliver good numbers and profit for this year.
However, the outlook for the Turkish market is very bleak and this year could be the last year of operations in this market. As the company enters new markets and more complicated applications, there is a clear need for advanced talent to design new machines that meet the stringent requirements of new applications. DDPS is going to set up a design center in the uk, initially with two or three highly qualified individuals who will be responsible for developing new generators and more products for the future. In conclusion, with a new plant and more opportunities coming our way, we’re well positioned to exceed our guidance of 15 billion INR for this year.
We’re also focused on FY27 and new products in large generators, large motors and of course execution of the traction motors for Europe, US and the CIS countries which will drive the company towards the 19 to 20 billion mark in FY27. This brings me to my initial remarks. I’ll be happy to address questions that you have. Sorry for the break in the link of communication.
Questions and Answers:
operator
Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press STAR and two participants are requested to use their handsets while asking a question.
Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Piyush Sevaldasani from Sundara Maltinates. Please go ahead.
Piyush Sevaldasani
Yeah, hi. Thank you for the opportunity and congrats for great set of numbers. My first question is on the margins. We have seen an improvement in the margins for this quarter. Can you help us understand on the gross MARGINS Is this 36% sustainable? And also on the staff cost which has been controlled really well. I was under the impression that we are hiring new people for the new plan.
That’s why there would be an increase. So is that incremental cost capitalized? That’s why we are not seeing this?
Nikhil Kumar
No, no, no. Who will incur, who knows, Capitalize staff costs. That is not at all our accounting policy. We are hiring people, but that is mainly at the blue collar level at the moment. So we are not going to see big increases in the numbers immediately. But the white collar hiring will start now and then we will start seeing some increases in the employee costs coming in this year. Coming to the gross contribution margin in general, they have been delivering fairly consistent numbers for the past few quarters.
So it’s sustainable in this range for sure. 1% here and there it could vary from quarter to quarter. But in general we can say sustainable in this range.
Piyush Sevaldasani
Sure, sir. And so my second question is on the working capital. So the net working capital base has seen an increase this year. So that is leading to weak operating cash flow. So how should we think about it going forward?
Nikhil Kumar
Yeah, we had to take certain very drastic decisions. For example, when the copper prices dropped recently we purchased a lot of copper and we also bought a lot of electrical steel.
Because we saw prices were coming down when these duties were. You know, when the whole turmoil for duties and everything was trump duties, trump tariffs was in the market. So we saw buying opportunity. So we have purchased a lot of material. We will see a big improvement in the operating cash flow starting from Q1 onwards. We will see because we’ll not be buying steel and copper. We’ll be consuming from inventory. Second reason is that of course March is always a very heavy month for invoicing. So those will end up in receivables. But collections are now taking place in Q1 and Q2.
So we will see, we’ll see the cash flow improvement. Cash flow numbers dramatically improving in Q1 and Q2. But end of H1 we will show very good cash flow numbers. Where we can, we can give you by the next quarter we will tell you exactly what it’s going to be for each one.
Piyush Sevaldasani
Sure, sir. So just last one question. On other income we have seen a sharp jump of 10 crore. If you can just help me on that.
Nikhil Kumar
Yes, that is mainly foreign exchange gains. Varvakshmi. Correct please. You can maybe take this question please.
M. Varalakshmi
Yeah, it’s a foreign exchange gain.
We had a lot of forward thinking.
Piyush Sevaldasani
Sure. Thank you sir.
Nikhil Kumar
Yeah, so we have been, of course we have been exploiting the opportunity which has been created with the euro. In the recent times. The Euro had become very strong against the rupee almost going up to 96, 97 levels. We would also get a benefit of that in Q4. So we have exploited that opportunity with our forward rates and hedging. We will continue to take the benefit of this for this entire financial year. We have used that narrow window of time to book a large number of forwards with very, very favorable rates.
So the company will get solid foreign exchange gains coming from forward booking from Europe for this kind of entire financial year.
Piyush Sevaldasani
Thank you sir.
operator
Thank you. Ladies and gentlemen, in the interest of time and fairness to others we request you to restrict to two questions per participant and rejoin the question queue. The next question comes from the line of Dipesh Agarwal. From UTI amc. Please go ahead.
Deepesh Agarwal
Yeah, good morning and congratulations, Nikhil and team for the good numbers. My first question is, Nikhil, if you can explain us what is the share of revenue coming from us and what is your view of the potential impact of the tariffs after that 30 or 90 days? Pause.
Nikhil Kumar
Yeah, I think that India is close to finalizing some kind of a trade deal with the US And I think that first of all, I don’t think that India, the whole world is going to get back to those huge duty what Trump was initially proposing. But even if it does for us, the US market is basically the US market for our products are all outsourced from international, from outside the US so there’s no US manufacturer making anything about something like maybe 10 to 12 megawatt. There’s one person who’s making up to about 12 megawatt, but he’s completely booked out.
So there is. So the smaller machines, of course we have competition with this one player, but as I said, he’s booked out. But all the larger data centers AI business, the machines are imported from Europe. So as long as Europe and India have comparable tariff rates, I think that there’s going to be no big advantage for one country versus the other for the US Customer. There’s going to not be a big advantage for buying from India or buying from Europe in terms of tariffs. Of course, if India is able to finalize a deal faster and we have lower tariff rates compared to Europe, then we will see a big advantage for us and then that will correspondingly result in more orders for the company.
These are all highly uncertain things that change from week to week. And as far as our customers are concerned, they need to import generators. They know that they have to pay the import duties. It’s not coming on to us. Demand is very, very strong. Customers, our OEM customers have started making all their contracts passing on these import duties to the end user. They also are unaffected by this. Right now, demand continues to be strong. So I feel that ddps will not, will not be affected by this, the US market at all.
Deepesh Agarwal
Sure. You mentioned that you are setting up a design center in uk.
If you can throw some more light and need for it and what potential benefits it can bring for the company.
Nikhil Kumar
Yeah, once you know, these basically for larger machines we are, you know, as you know, we are developing our own design for larger machines up to 100 megawatt. And these data center applications are also moving towards the larger sizes where each unit could be 30, 40, 50 megawatt in size. These machines Are we need technology? I mean, we need to upgrade our technology levels quite significantly to be able to compete in this space. We need better talent.
We have identified talent who can do this. And these people are located in the uk. So we have decided now to put up a design center over there. But they’re not only talented, not only very capable in the large venator space, they’re also very capable in the large motor space. And they can also help us in our current designs in optimizing the designs and optimizing rates, efficiencies and things like that. So we will also see benefits coming downstream for our products in terms of cost optimization. So it’s really, it’s going to be, I would say the potential of what we can do with these extremely talented people is quite large.
You see big benefits coming into the company downstream with this design center.
Deepesh Agarwal
Sure. And last question. What percentage of our revenue would be dependent on data centers and AI farms? And in terms of your interaction with the customer, what is the commitment in containing those investment? Are they concerned about the new tech impacting the future investment?
Nikhil Kumar
I don’t think anybody that. All right now the market is completely on fire and there’s no slowing down. There is a fight for capacity. People who are putting up the data centers, fighting for capacity. They’re booking up capacity from OEMs like gas turbine manufacturers, gas engine manufacturers, generator manufacturers.
That is a situation right now. Booking capacity for 26, booking capacity for 27. That is what is happening. And there’s no, there’s no signs of the slowing down. As the applications and the use of AI keeps getting more and more widespread. The demand for this power is getting more and more and more. Plus grid stabilization. As I said, stabilization. What happened in Spain and Portugal has really opened the eyes of people in Europe especially what can happen when they in the grid. I’ll tell you, it’s. It’s about. It will be something like 25%. 25.
Deepesh Agarwal
Okay.
Okay, thank you.
operator
Thank you. The next question comes from the line of Mohit Kumar from ICICI Securities. Please go ahead.
Mohit Kumar
Yes, sir. Good morning and congratulations on a very good quarter and a fantastic year. My first question is given the, given where we are. So what is our revenue guidance and ordering flow guidance for FY 2016 broad outlook?
Nikhil Kumar
Well, I said 1500 crores is the first guidance for FY26 with a strong upward potential to improve the numbers. And see based on the order inflows appear with what we are seeing, order inflow guidance will be something like between the region of 1600-1700 crores a year.
Mohit Kumar
Understood, sir. My second question is. Of course you have. Just in the presentation I mentioned that you have got 225 megawatt gas turbine generator order from data center, right? What is the timeline for delivery? Delivery of this order. And are you working with only one OEM
Nikhil Kumar
next 12 months?
Mohit Kumar
And are you working only with one OEM? Is there a possibility of adding more OEM as you go forward?
Nikhil Kumar
There are only two, three OEMs in the world. Three or three big OEMs in the world who make these Castor wines. So we are working with all three of them.
Mohit Kumar
Okay. Understood, sir.
Nikhil Kumar
One of them is having a very large market share. The other two smaller amounts. But the one that is having the largest market share is our most important customer. And that is the customer from where we are getting the most amount of business.
Mohit Kumar
Last question. The domestic. I think you mentioned about hybrid generators, right? I’m assuming these are all old machines. Is it a single generator? Could be a sizable order. Maybe get a hundred megawatt. Or are these smaller size generators?
Nikhil Kumar
Vinay, can you answer this question please?
Vinay Hegde
Yeah. Good morning. These are smaller size machines, what we call as small hydro, which is in the range of up to 35 megawatt, not more than that.
Mohit Kumar
Understood, sir. Thank you. Thank you.
operator
Thank you. Ladies and gentlemen, we request you to restrict to two questions per participant. The next question comes from the line of Metali Balakrishnan from Alchemy Capital Management. Please go ahead.
Mythili Balakrishnan
Thank you for the opportunity. A couple of questions. I wanted to get a sense from you about what is happening on the railway side. You had mentioned earlier that more than domestic we are looking more at exports. So could you just elaborate a little bit on what are you seen in terms of orders and is that any traction there?
Nikhil Kumar
The domestic side is fairly dormant, let me say.
I don’t want to use the word debt, but fairly dormant. So there’s nothing new coming up in the domestic market. So we have been focusing our attention on opportunities outside India. We are focusing on three opportunities. One in the Europe, one in the US and one in CIS countries. All three are active. We have contracts for all three. And as I said, we’ve been developing the prototypes this year. We have the orders for the prototypes. So they are being built right now and the volume production will start by about, I think by Q4. And so we should see the full revenues coming in in next financial year.
Mythili Balakrishnan
And just to get a sense, these are prototypes which has been tested.
Nikhil Kumar
Yeah, they’ll be tested. Put on the locomotives and then they’ll be tested. And that’s the plan for this year. But you know, these are fairly established designs, so we don’t see a problem in meeting the full requirements. And there’s been a lot of quality checks are done along the way. We’ll be successful in meeting the requirements.
Mythili Balakrishnan
Got it, Got it. And also wanted to check with you when you spoke about larger generators and sizes, what is the competition there? Is it done in house by the audience currently or is there someone else who’s providing? And just if you could give us a little bit of an indication of the competitive landscape.
Nikhil Kumar
It’s very limited competitor, actually just one big competitor in this range which dominates the market. So we want to take away the market is also looking for a second player. I think that we are right place, right time and it’s such a huge market and just one single player dominating the market. You know, there’s scope for us. All I can say is we are seeing big scope, but we need to have the right product in terms of being able to compete against the party who’s there as a market leader. He’s got an extremely, extremely good product and we need to do some work to get there.
Mythili Balakrishnan
Got it. And the last question is on the capex. Could you just help us with the timeline of when do you think this is coming on board for us and how to sort of think about it. You mentioned H2 just to get a sense of some timelines on that. That’s what smart. Thank you.
Nikhil Kumar
We have started by the end of this month. By end of May, we will start commissioning the first and progressively the second shed and third shed. You know, all the equipment and everything, all the trials and everything will start. So we are more or less on schedule.
But I said the production, when we see the impact on our numbers, we start seeing that only towards age two, installing machines and commissioning machines. And the first shed was already started.
Mythili Balakrishnan
Got it. Thanks. That’s awesome. Thank you very much.
operator
Thank you. The next question comes from the line of Ganesh Ram from Unified Capital. Please go ahead.
Ganesh Rajagopalan
Thank you, Mikhil. And congratulations on a great set of numbers to the whole team. Most of my questions have been answered. Most of my questions have been answered, Nikhil. But I was just trying to get. Trying to understand this thing in Turkey.
The order info has improved. But did I hear you right in saying that this would be the last year of operations in that market?
Nikhil Kumar
Most probably.
Ganesh Rajagopalan
Okay, could you just help me?
Nikhil Kumar
They will again change the calculations for local content. Calculations have been changed once again of Course it will not be applicable for this order, but it will be applicable for future orders. I think it will be almost impossible for anyone to meet those new guidelines. And the market itself is. There are no inquiries in the market. And with these new guidelines, local production will become very expensive.
And even with the incentives, it will be cheaper for someone to buy a imported machine. So it’s quite senseless what’s going on over there in terms of the regulations. You know, now it’s gone, it’s been totally over regulated. So I don’t see a future in locally made machines anymore. And so after we finish this order we will, we will consider this shutting down the plant. There’s no point in having any cost over there anymore.
Ganesh Rajagopalan
I totally understand. So would there be any come from it? That’s the first part. And second thing is in terms of, I mean if they’re not making it locally, would it still be attractive for us to export there out of a manufacturing base here?
Nikhil Kumar
Yes, yes, it will be all, it will be all, it’ll be all imported machine part is concerned and we have a very strong market presence, very strong brand name in that country.
So whatever, whatever you know, gets imported probably will be still very competitive in the market. But we’ll be. What will be. There’ll be hardly any impact on the balance sheet. Right. Or if we stock a plant over there.
M. Varalakshmi
Yeah, maybe around 3, 4 crore. The investments that we have done, we try to bring back.
Nikhil Kumar
But, but we have those reserves also. Right. So it’ll get value side.
Ganesh Rajagopalan
Yeah, yes, understood. That’s very clear. The second thing is I went to that exhaustive list of winds and the hydro refurb orders, the nuclear order. There’s quite a lot happening for us as we’ve been aware for some time.
Right. Is there anything new this quarter that you think has come up that you haven’t had previously that could scale quickly or is a very large addressable, growing market beyond the AI data centers and server farms and motors.
Nikhil Kumar
No, that’s asking for too much. Right. I mean we have this aiization I think will become. So what has happened in Europe, in Spain and Portugal has really shocked everybody in the continent. So all governments are now really looking at gas power to stabilize grids very seriously and start first. The problem is that once again everyone is again competing for the same capacity for gas turbines and gas engines which is completely oversold for the air market in the US So that’s the situation right now.
There are a huge demand coming from the stabilization units and AI or gas for larger Gas units, there’s no capacity. It’s a good thing. Of course, you know, we are, we’re right in the middle of all this, so we also, I guess, you know, the demand situation is going to be very strong for foreseeable future because these are two fundamental things which are driving the demand which is going to be sustainable for some time.
Ganesh Rajagopalan
Yeah, yeah. And maybe just the last question from me is on the tariffs. Right. I just want to get a bit more nuanced here because I know there’s a lot of moving parts.
One thing I was asking is if US is importing a lot of these generators from Europe, are they primarily importing this from the UK or is it from outside the uk? Because my understanding is they have a featured agreement going on there. So that’s the first part. And the second is if the cost of importing these generators go in and even if the OEM is passing through these costs, how much is the effective impact for the demand? Is there going to be an impact on second or third order impact on demand because of this?
Nikhil Kumar
The cost of the power unit or power demand from the overall data center or overall AI server farm is estimated to be something like 5 to 6% of the total cost.
If you take the cost of the servers, land, water, whatever, everything, all water systems, everything put together, it’s only like 5%. So even if it goes up 20%, it is 1% of the overall cost. Nobody cares about it.
Ganesh Rajagopalan
Yeah. All right, thank you so much, Nikhil.
operator
Thank you. Thank you. The next question comes from the line of VP Rajesh from Banyan Capital. Please go ahead.
V.P. Rajesh
Congratulations on a big set of numbers. Just two questions. One on the new plant, the third plant that you talked about. Rajesh, I’m sorry to interrupt you there, but your audio is not clear.
Is it better now? Let him continue. I can. Yeah, now I can hear. Yeah, okay. So I was just saying. Yeah, yeah, I was just saying by March 26, what kind of ramp up can we expect? Will it be, let’s say closer to 80% or so, or will that happen in fiscal 27?
Nikhil Kumar
It’ll happen in FY27.
V.P. Rajesh
Okay. And then secondly on the railway business, if you can just touch upon that, what has been the progress on that particular order? I just, just spoke about it a few, few minutes ago, but I’ll repeat myself. Sorry, I missed that.
Nikhil Kumar
Railway. Yeah. So the railway business in India is fairly dormant. There’s nothing much happening over there. And we are focusing on three orders that we have, contracts that we have with Europe, US and cis, we are building prototypes this year. Testing will take place this year and volume production will start by Q4. But the impact will be felt in FY27. And these are something like three to three and a half year contracts starting from FY27.
V.P. Rajesh
Got it. And just one clarification. You said your business is now 25% because of the AI and data centers in the US.Is that the right way to understand it?
Nikhil Kumar
Approximately. Approximately. It will end up being around that number. 20 to 25% it will be end up being that number. But if we penetrate with the larger machines in FY27 into that market, then this share could be. This shake will grow. I see.
Nikhil Kumar
Got it. Okay. Thank you. And all the best. Yeah, thank you.
operator
The next question comes from the line of Prolin Nandu from Edelweiss Public Alternatives. Please go ahead.
Prolin Nandu
Yeah, Nikhil, I apologize if my questions are repetitive. I joined a bit late. My first question is on motors.
Right. And the margins that you intend to earn there. Right. See, in generators we have a very dominant position. We have been doing this for years. Motor relatively is a newer venture for us. So how comfortable are we to earn? I’m not asking the specific number, but to earn a similar margin in our motor business as well. That’s my first question, Nikhil. We are going after markets only where we can earn good margins in the motor business.
Nikhil Kumar
We’re not going after the market where the margins are bad and that the market where the margins are bad is a huge market.
But we’re not going after that market. We’re going after the market where the margins are better. So we will be in the market where we can deliver good margins.
Prolin Nandu
Understood. And my second question is the two tailwinds that you mentioned. One is the gas based AI data centers in US and what happened in Europe in terms of power shortage. Now if I think about to cater these two tailwinds, are we approaching these two tailwinds in a similar manner as we approach some of the other avenues of our revenue? Where I’m coming from is that is it still part of the entire package of turbine and generator which go together or the way to probably approach this market is slightly different than our traditional routes away is the same.
Nikhil Kumar
The prime mover companies, turbine manufacturers, engine companies will get the orders and we are tied up with them and we will get, we’ll get some part of the business.
Prolin Nandu
Okay, understood. Can I just add one follow on if that’s fine?
Nikhil Kumar
Yeah, yeah, go ahead.
Prolin Nandu
Yeah. So just to understand this whole blackout that happened In Spain and Portugal. Right. And you mentioned that as a tailwind there. What? Where? I mean, is it like, is it like a particular part of the grid which was not doing well and which was something related to let’s say having some of the excess generator capacity at few places in the grid? Is it, is it, can we pinpoint as to what was wrong there and is that the cause of, I mean whatever is the cause, is that the main reason for, let’s say this tailwind that you mentioned? Can you just give some more color on this aspect?
Nikhil Kumar
What happened was that there was a sudden drop in renewable production in the grid.
Something like 4 or 5 gigawatts came off the grid instantly because the wind stopped blowing, sun stopped shining in different parts of Spain and Portugal and that caused a complete outage because there was nothing that could come and replace that 5 gigawatts of power instantly. So overall the grid everywhere, one by one by one just collapsed. Right, Nikki, so what the, I mean how. This is a domino, this is a domino effect, but this is a domino effect. What takes place when you have say something like one part of the grid just completely collapsed and the remaining part of the grid cannot meet the demand, then that part of the grid gets overloaded and then it’s a domino effect that takes place.
So the only way is to, is to make sure that you have gas power which is, which can come onto the grid very quickly to be able to fill in that gap. Then the renewable power comes off the grid.
Prolin Nandu
Got your point, Nikhil, thank you so much for that and all the very best. Thank you.
operator
Thank you. The next question comes from the line of Shyam Maheshwari from Aditya Birlam Mutual Fund. Please go ahead.
Shyam Maheshwari
Yeah. Hi Nikhil and team. Congratulations on a brilliant set of results. Couple of questions from my side. Yeah, just a couple of questions from my side.
Firstly on the domestic inflows. So while you’re mentioning that the market looks to be little dormant this quarter, we have shown our best inflows for nine quarters, for the last nine quarters. And this is coming in conjunction with probably Triveni reporting inflow decline this quarter except the large order that they won. So just trying to, was very curious to understand how we have been able to deliver, you know, 40% growth in domestic inflows this quarter. Was there a one off large order here or is it slightly steam turbine?
Nikhil Kumar
Right. We also got some orders from the domestic market for large Dupole generators that’s also included 80 megawatt, 90 megawatt machines.
That’s not in the range that Trainee operates in. Okay, they do, but I think they’re not. They didn’t, they didn’t get these orders. So that adds, that adds to our numbers. We got a couple of motor orders from Nuclear power Corporation in Q4 that is also added to domestic. So if you take the generator sizes below 50 megawatt to split this domestic order book, there’s a lot of background noise coming from you. Shyam, if you could just please silence. Yeah, so if you take the domestic market only for the steam generators below 50 megawatt, I think our numbers would be following the trend what Trinity is supporting.
Shyam Maheshwari
Interesting, interesting. And secondly on the export size of the SEGAS terminal has been a big vector of growth for us. I wanted to understand what would be our current market share. You mentioned there are limited players here. What would be our current market share in which segment, Sorry, Gas turbines. Gas turbines, generators. A very small. Less than 3% of the global market share. Okay. And that probably with this, these machines up to 40 megawatt that we are trying to produce that should ideally inch up over the next few years.
Nikhil Kumar
Yeah, we have big plans to.
We have a lot of new products for the gas turbine market which we’ll be bringing in this year. New. We also have a new OEM which we have signed up. We’re also getting new orders from the new oem. So this year we will be putting a lot of machines into the gas turbine business up to 25 megawatt. Also putting in the trial orders, trial machines for the 40 to 45 megawatt. And the demand, as I said, is extraordinarily huge. The opportunity size is extraordinarily huge. So there’s a lot of pressure on us also coming from our OEM customers to move faster.
They want everything yesterday. There’s also big opportunities coming from the IAS engine side where once again there’s some new products which have been developed exclusively for the data center market by our engine customers with big gigawatt size order commitments. Where we are the chosen generator manufacturer which will start coming in on stream October, November, December this year and going well into next, next financial year. That’s why we are very upbeat about revising our guidance upwards. We are extremely upbeat about it. Vinay will be happy to report better numbers and next, next quarter when we talk, once we see, you know, all these things gel together and come to the point where we can announce it to all of you.
But there. But the way things are going, it will gel together unless you know, earthquake or something like that or some asteroid hits the earth. It’s really going gangbusters right now.
Shyam Maheshwari
Perfect. That’s wonderful to hear, Nikhil. All the best for the year ahead. Thank you.
operator
Thank you. The next question comes from the line of Aman from Stallion Asset. Please go ahead.
Aman Saifee
Hi sir, I hope I’m audible. Yes Aman, you are audible. Yeah. Sir, I request you to can you please give some more color on the domestic side of our business, what kind of a headwinds we have been facing challenges and what’s the customer behavior there and what is the sign we can track in order to see some recovery on that side?
Nikhil Kumar
You know, we are fairly well entrenched player on the domestic side.
We have two major customers to whom we deliver our stinker line generators. We have long standard relationships to both of them. And so when the market turns and when the market picks up, they will get the business and we will correspondingly get the business. It is practically impossible for any one of us, all of us who are in this call, who track the domestic market for us, any one of us on this call to predict or to say what’s going to happen in the next six months, next one year with the domestic market. So I don’t have a better insight compared to all of you who are looking at indicators day in, day out and who are in the market day in, day out in the domestic side.
So I think you guys are the better experts compared to me. What I see is I see something like a conservative growth in the domestic market which we have factored into the business plan. Of course, if things get better we’ll be happy to. And that business will then come to us. We’ll be happy to deliver to the domestic market. But at the moment I’m being realistic about where we are.
Aman Saifee
Understood. Sir, just one last question on the, you know, number side to just understand. So sir, historically for the last four, five years we have been executing around 60 to 70% of the order book which we have on the annual basis.
So last year on 1189 crores of order book, you closed this year around 1278, so which is around 110% execution on the order book. And currently as well you are guiding around 1500 crores of revenue on 1368 crores of order book, roughly so, which is again 110% of execution on the order book. Am I missing on something which is not recorded in the. And how is this number?
Nikhil Kumar
Yeah, I think, I think the, you know, your analysis is really good. That’s, that’s that’s realistic. What you’re. What you’re looking at. That’s what we have performed in the past.
And that’s what you know, that’s a trend for the future. The upside potential will come based on whatever I spoke about earlier on this call. And we are confident that we have products, new products, new applications which will then give us the opportunity to exceed the guidance, whatever we talked about. Generally your analysis is correct. And this is something that we also do internally just to be. Just to say that you learn a good analysis. This is something we also do. When we do our analysis, order book versus achievement and looking at the. Looking at the past five years and looking at the numbers.
Yes, we also do the same thing.
Aman Saifee
Got it, sir. Understood. So this trend is going to continue going ahead as well. I just wanted to understand.
Nikhil Kumar
Correct. Yes, yes, absolutely.
Aman Saifee
Yes. Understood. Thank you so much. All the best for the future. Yeah, thanks.
operator
Thank you. We take the next question from the line of Himanshu Upaday from Bugle Rock Capital Private Limited. Please go ahead.
Himanshu Upadhyay
Yeah, hi, good morning. My first question was to Oral Lakshmi. The trade receivables have gone to 437 crore from 4th from 300 crores of the last year. Can you give some aging of receivables in terms of how much is less than 90 days and how much is more than 90 days and if anything is more than 180 days, some color on that will be helpful.
And secondly, what are we doing to improve the cash flow on the receivables?
Nikhil Kumar
Almost 80% of the receivables are below 90 days.
Himanshu Upadhyay
Okay. And anything above,
M. N. Varalakshmi
there’ll be some small receivable, hardly 3 to 4%. But they are all connected.
Himanshu Upadhyay
And the next question is, we have nearly 240 crores of cash on balance sheet and we will be completing the new plan. Any plans on how to use cash and any inorganic opportunities you will evaluate. And also the dividend payout ratio has been less than 20% for last five years. This year it is around 11%. What are your thoughts on payout, dividends and cash flow usage in the near future?
Nikhil Kumar
We are investing heavily into the future in our.
Yeah, we are investing heavily into the future for our company’s growth and that gives the best returns to the shareholders. So giving dividend, we have been steadily increasing the dividend as a percentage by like 10 12% per year. And we will continue to do that. But that’s not the first priority. We are in an exciting growth stage looking at the way that the business is Growing. It looks like the third plant also is going to be filled up fairly quickly. Then we need to again start building up cash for the next set of investments. Right.
So we are definitely looking one step beyond the third plant also right now and looking at funding that through internal approvals. And so if this trend continues like this, even after making efficiency improvements in the plant and everything, taking the existing plant utilization to 2,200 2300 crore at some point in time we would need to again make investments. So that is the thinking that we are conserving. Conserving our strength for the future.
Himanshu Upadhyay
Okay, and one last question. We had won an order for geothermal green to 43 megawatt plant in US in Q2. Okay. And that was phase one.
We stated that the company is looking for phase two which will be nearly 1,000 megawatt. What happened on that business? Did we chaotic? It is still.
Nikhil Kumar
Yeah, we are still. We are still. We are still the preferred party. It’s not yet finalized but it will get finalized soon I think in the next three months. And we should be able to deliver good news to the market about this. Yes, it is definitely a very important project for us on the radar screen. We’re actively working with the customers. They’ve changed the configuration of the generator a number of times.
So it is still under active discussion. Thank you. From myself.
operator
Thank you. Ladies and gentlemen, we request you to restrict to two questions per participant. The next question comes from the line of Krupa Desai from Electrum Capital. Please go ahead.
Krupa Desai
Hi sir. Congratulations for your good set of numbers. So my question was on the NPCIL order. So who are the other players in this case? What is execution timeline for this order and the opportunity size for this further Opportunity size in the space?
Nikhil Kumar
No NPCIL of course the biggest competitor with dhel. But for the replacement motors, what we are.
What this. This is a specific market segment within NTCL that we are pursuing. There’s a lot of scope because all the existing nuclear power plants in India are with Russian equipment. There is a big market for it. I can’t give you the exact size but every year we could be getting some good, say I don’t know some good numbers from this, from this business. And of course once you start doing more and more and more business on the refurbishment side, on the replacement side with NPCL and you establish the performance of the machines in the existing plants and automatically for the new plants you have the opportunity to deliver motor for the new plants.
But the big huge investments are taking place for the future for nuclear power operations. So it will deliver steady revenues to the company year on year competition. Is BHEL okay? Only BHEL now? Yes, at the moment. Established. They are established. Execution timeline is next 12 months. Okay. And what is the order value? If you can provide a number. We gave that. We announced it already on the exchange when we got the order. I remember it to be somewhere around 50 crores. I remember something like that. Nec. I could be wrong. Plus minus, but around 50.
Krupa Desai
Okay sir. Thank you.
operator
Thank you. The next question comes from the line of Nupur Kokda from Narevi Investments. Please go ahead.
Nupur Kogta
Hello sir. Good morning. My question is regarding the promoter stage. As we see it has declined significantly from 58% in 2023 to around 33.2% in the recent quarter. We could also see a reduction of approximately 1.05% in the recent quarter. So can you please elaborate the reasons behind this reduction? Also is there any possibility of further reduction going forward?
Nikhil Kumar
The reduction in the reduction from 58% to 34% took place two years ago. So I think that’s not something which is relevant for today.
The recent reduction took place due to declassification of one of the promoters as non promoter. So it’s not that those shares were sold. The shares were only declassified. The shares are still intact. Future plans. I have to ask the other my co promoters what they want to do. But there’s no plans on right now. Thank you. Thank you. Thank you.
operator
Thank you. The next question comes from the line of Jainam Jain from ICICI Securities. Please go ahead.
Jainam Jain
Good morning management and congratulations. So sir, my first question is can you quantify the NPCL order in terms of megawatt?
Nikhil Kumar
It’s three megawatt something.
And yeah, three megawatt something. Thirteen motors. It’s whatever 40 megawatt. I don’t see how it does. Anyway, whatever information it conveys, I don’t know. But yeah, that’s exercise.
Jainam Jain
And so what is the breakup of motor and generator business in the revenue generation about?
Nikhil Kumar
If you take out only pure motor business not including traction motors, I think if you take only motors it’s something like 6, 7%.
Jainam Jain
Okay sir, what is the average utilization of motor and megawatt like we have currently and how are we seeing increase in max?
Nikhil Kumar
I don’t have that information right now.
operator
Thank you.
The next question comes from the line of Kushal Goenka from Mangal Kesha Financial institution. Please go ahead.
Kushal Goenka
Hi sir. Thank you so much and congratulations on a good set of numbers. So my first question was. As per my understanding the current capacity can be around 350 to 360 crore per quarter. And only in H2FY26 we can see increase in quarterly revenue. Is my estimation correct?
Nikhil Kumar
Yes, approximately correct.
Kushal Goenka
Okay. Okay. And the second question was. So did you mention in the opening remark that for FY27 we are guiding for 2000 crore.
Nikhil Kumar
I said that there is a path forward to 2000 crore.
With the new products and the railway business. Export. Railway business and the new products that we are getting into. There is. We see a clear path towards 1,900 to 2,000 crores. Yes, I am confident that we will see the path there.
Kushal Goenka
Okay. So that can be achieved with the new capacity that is coming live. We will not put any new capacity until about 2,200 crores. We will optimize and we will make this existing capacity extremely efficient to produce more.
Nikhil Kumar
Okay. But like before starting any capacity you would need time, right? So beyond 2,200 crores also like you will need to plan like before one year or something.
We will of course if you will plan and we will do it. We will. We will make sure we don’t lose any opportunities. That’s our job. And we’ll keep the market informed. Congratulations. Thank you.
operator
Thank you. The next question comes from the line of the lead from Plus 91 Technologies. Please go ahead.
Vinit Thakur
Hi. Good morning sir. Congratulations on great set of numbers this quarter. We have a couple of questions. You cited Ukraine was a good market for us. And you have below and you have mentioned as a key export driver this quarter as well. What revenue did recognize from Ukraine this quarter did have some numbers about it.
Nikhil Kumar
We don’t give country wise data.
Vinit Thakur
Okay. And as we see that 67% of our order is coming from export. And do we expect this percentage share to be increasing or order from domestic market would increase as well in the coming years?
Nikhil Kumar
Well, it depends on whether we win some of those large hydro orders or not from replacement and take that out. Then I think the ratio will be approximately the same. 65 to 70% will be export.
operator
Thank you. The next question comes from the line of Kiran from Tabletree capital. Please go ahead.
Unidentified Speaker
Hi Nikhil. Congratulations on great setup number.
Thank you. The one first question is. I mean I’m not looking for exact numbers per se but us approximately going by the past con calls about 10% 8 to 10% of our revenue over the next two years. Given the trend in data center, given the demand would we expect US business to go about 25% of our business because US is a big deal, right? Compared to Europe or are both similar market sizes. So Those are the two sub questions. US will it go to 25% of
Nikhil Kumar
20, 25% to the market of our total business coming from the US is definitely a very realistic possibility.
We expect that to happen. And yes, the US right now is a very big market. Continues to be. So risk stabilization units and everything from Europe is also a big market. But it is going to take a little bit. It’s not going to move as fast because it’s government investment driven. Whereas in the US market it is completely private sector tech company driven business. So it’s a different thing. It’s moving much faster. It’s already moving. It’s already an existing market.
Unidentified Speaker
Super. Got it. And the second question that I have is two sub questions. One is the entry into two pole generator replacement market.
I mean going by your investor presentation, looks like a very, very huge market size. Is this opportunity restricted for us in India or is this a huge opportunity for us in the world? Or do we have to test it in India and through success and only then can it go to the world?
Nikhil Kumar
Yeah, Vinay, take this question please.
Vinay Hegde
So there is nothing to be tested as a prototype. So you know, we have developed our own machines below 60 megawatt range for the replacement market. We don’t have to restrict this only to India. We have the complete market open.
And this is the first orders you know, we have received. There are many installations in India with the world, Russian and Chinese machines as well as VHEL machines. So we are going after that. There’s big potential not only in India, outside India as well.
Unidentified Speaker
Sorry Vinay, my question was more what is the right to win? Because everything that we are targeting is huge market, right? Geothermal is huge and everything is huge. So is there a right to win for us after this installation or even before installation because of all other installations in the world, we have a right to win to install these two pole generator regression market.
Vinay Hegde
Yeah, I got it. So basically, you know, this will be the reference with our own design where we’ll be replacing a competitor’s machine. But we don’t have to wait for the, you know, installation and go off to the market. There are three, four, you know, jobs we are already, you know, quoting and in the advanced stage of finalization. So we have the capabilities, we don’t have to prove to the world that we know the first installation and the reference. So it is not like that before the installation of the machine itself, you know, we are already in the market.
Thanks. And the only thing is the customer. Only thing is, you know. Okay. Only thing is the customer should have the machine which has multiple failures and then he should make up his mind to go for a new one. So that is when, you know, we enter that and then we give then the company drop in solution.
Unidentified Speaker
Got it, got it, got it. Question that I had was you haven’t had any commentary around motors and how it’s progressing other than saying it’s according to plan. Any concrete, you know, commentary around any particular geographies we are targeting? Any particular industries we are targeting.
Nikhil Kumar
I mentioned we are targeting. We’re targeting Middle east, we’re targeting India. So it’s going as per plan. I don’t see. I mean, I don’t have to. I have not talked about it in great detail, but it’s going as per plan. So I have nothing. Yes. Yeah. I have nothing exceptional to report.
Unidentified Speaker
Sure. Thank you so much. Those are my questions all the way. Thank you.
Nikhil Kumar
Thank you. I think we take the last question.
operator
Yes, sir, we take the last question from the line of Akshay from Exponent Tribe. Please go ahead.
Akshay Jogani
Thank you. For the opportunity on the geothermal front.
Can you help us understand, sort of for a 100 million megawatt kind of a project, what is the size of work that we would do? Basically, if one had to try to size the opportunity for us, how should one think about it?
Nikhil Kumar
This is a very difficult question because it all depends on the geology of that particular site. It depends on how many wells they would need to dig for 100 megawatt. It depends on the size of the wells, depends on the environmental conditions, whether there is a lot of H2S gas over there which needs equipment protection or not and part of the environmental regulations in that particular zone.
It’s almost impossible for me to answer your question.
Akshay Jogani
Sure. So maybe I can. I can kind of put it in a different way. And while I hear you, just for the further project that we have done in the US I understand the page one that
Nikhil Kumar
I don’t have the data for. What is the total outlay for the investment? Sure. Thank you. Thank you. That’s all from it. I’m sorry, I really can’t help with that because it’s. It’s very, you know, the market is about whatever, 2, 3 gigawatts per year worldwide, 1 gigawatt, sometimes 2 gigawatts per year.
It depends.
Akshay Jogani
Sure, sure. No, that’s helpful. That’s also my question.
operator
Yeah. Thank you. Ladies and gentlemen, due to time constraint that was the last question and we conclude the question and answer session. I now hand the conference over to the management for their closing comments.
Nikhil Kumar
Thank you everybody for this extremely thoughtful, insightful earnings call. We will be in touch with all of you. I hope to see some of you in some investor conference or face to face meetings in the next course of time. Otherwise we will connect with you at the end of the next quarter.
Once again, thank you very much everybody for your time today. Bye bye.
operator
Thank you on behalf of TD Power Systems limited that concludes this conference. Thank you for joining us. And you may now disconnect your name. Thank you.