Transrail Lighting Ltd (NSE: TRANSRAILL) Q3 2026 Earnings Call dated Feb. 03, 2026
Corporate Participants:
Randeep Narang — Managing Director and Chief Executive Officer
Deepak Khandelwal — Chief Financial Officer
Analysts:
Anuj Shah — Analyst
Pritesh Chheda — Analyst
Jainam Doshi — Analyst
Mahima Gidwani — Analyst
Balasubramanian — Analyst
Naman Parmar — Analyst
Shubhankar Gupta — Analyst
Khushbu Gandhi — Analyst
Nikhil Poptani — Analyst
Mahek Talati — Analyst
Disha — Analyst
Anshul Jethi — Analyst
Aryan Bhatia — Analyst
Hrishit Jhaveri — Analyst
Nikunj Bhanushali — Analyst
Presentation:
operator
Ladies and gentlemen, you are connected to Transl Lighting Q3 and 9 months FY26 earnings conference call. Please stay connected, the conference will begin shortly. Foreign. Ladies and gentlemen, good day and welcome to The TransRail Lighting Q3 and 9 months FY26 earnings conference call hosted by Philip Capital Private Client Group. As a reminder all participants line will be in 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 and zero on your touch tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Anuj Shah from Philip Capital Private Client Group. Thank you and over to you.
Anuj Shah — Analyst
Good afternoon everyone. On behalf of Philip Capital Private Client Group I welcome you all the nine month FY26 earnings conference call of Translate Lighting Limited today from the management we have Mr. Randeep Narang managing Director and Chief Executive Officer of the company and Mr. Deepak Khandelwal who is the Chief Financial Officer of the company. I would now like to hand over the call to Mr. Randeep Naran for his opening remarks and then we’ll open the floor for the question and answer session. Over to you sir.
Randeep Narang — Managing Director and Chief Executive Officer
Thank you very much and good afternoon and welcome to everybody on the call to our Q3 and 9 month 26 earning call transtrail Lighting. It’s a pleasure to have you all on board. I’m pleased to share that the third quarter and nine month period has been very encouraging and good for us in terms of both execution and profitability which clearly demonstrates the momentum we have built over the course of the year. Our performance reflects the strength of our core transmission and distribution business, disciplined execution across projects and continued focus on profitability and cash flow management.
Starting with the quarterly performance the Q3 revenue from operations has grown by 32% year on year to 1796 crores. EBITDA margin stood at 12.7% resulting in a 27% year on year increase in absolute EBITDA of 228 crores. Our operating PBT stood at 168 crores which is 33% increase and operating pad grew by 36% to 126 crores. Operating pad margins for the quarter are 7% reflecting stable operating performance, cost discipline and a healthy project mix. More importantly for the nine month period we delivered strong and broad based growth for nine months revenue from operations increased by an impressive 49% to 5,000 plus crores 5,017 to be precise EBITDA margins for the period stood at 12.2% and absolute EBITDA growing by 40% year on year to 614 crores.
Operating PBT grew by 51% to 437 crores. Operating PAT registered a significant 61% year on year growth in absolute terms of 320 crores while the margins improved to 6.3. This performance reflects the scaling of our operation, disciplined execution, effective cost management, tighter cash flow controls and balanced mix of domestic and international business both during this period we have taken one time exceptional item for statutory expenses related to new labor codes of 17 crores. Alongside strong profitability, we’ve continued to strengthen our balance sheet. As of December 31st our net debt stood at 463 crores with debt equity ratio on just 0.39 times reflecting prudent capital allocation controlling working costs deployed, Our interest cost as a percentage of revenue improved to 3.3% for the nine months from 4.1% nine months last year.
This improvement is supported by our improvement in credit rating upgrade reflecting lower leverage, improving cash flows and disciplined balance sheet management. YTD we have achieved 5,017 crores and continue to showcase our primary focus on TND which is around 90% followed by civil, railways and pole business. Cash equivalents stood at 80 crores for nine months, increase of 293 crores over H1 supported by improved cash flows. Strengthening of cash flow remains a key priority as we scale up our business. Turning to the order inflows, during Q3 we secured orders of 1396 crores taking cumulative order inflows to 5135 crores from for 9 month period 26.
In addition to this our L1 position stands at 3483 crores which we expect to convert in the near term. These inflows and well diversified geography and largely driven by transmission and distributed segment reaffirms our strength in our core business. During this period we entered new geographies including GCC region for EPC works, further strengthening our overseas footprint. Overall order inflow during nine month period is 55% from domestic and 45% from international as per our annual operating plan as of December 31, unregited order book stood at 14,733 crores and including L1 an effective order book standard 18,216 crores.
This provides us with strong revenue visibility and long Runway for growth in the coming quarters. The geographic mix remains healthy with 57% domestic and 43% international while our core TND business continues to remain at 90% beyond the size of the order book. What is more important is the quality of the order book which is profitable and in line with our current performance. During Q3 we successfully executed three lines in 765kB double circuit K3 Narella transmission line project playing a key role as an EPC partner in this project home national importance. The commissioning of the high capacity line is significant milestone in strengthening the grid reliability in North India and supporting renewable energy integration and enhancing long distance bulk power transfer capability, therefore improving power availability in Delhi, NCR Isan adjoining areas.
Our teams and I’m talking about our project teams demonstrated exceptional commitment in executing the project across challenging terrain adverse weather conditions a feat which is well appreciated by our client. In addition, during the quarter we completed 765kV double circuit Ahmedabad, Lakhadiya and overhead electrification projects of RVNL which gives us well executed highly operational discipline and safety compliance. On CAPEX front production has partly commenced in the expanded brownfield projects and is ramping up to support the ongoing execution. The balance expansion initiatives include the greenfield facility and is progressing well and will be inaugurated shortly. In this quarter our phase wise CAPEX remains in track and effectively doubling our capacity for towers and conductors and will significantly strengthen our manufacturing backbone to support our project and the growth in future.
As part of our transformation journey we have initiated upgradation of our ERP systems from SAP Hana to SAP Rise as a strategic transformation initiative aiming at deepening cost discipline, strengthening compliance across factories and project sites and enabling real time data driven decision making. This reinforces our progressive digitization led approach which builds scale and future readiness of our operating platform. Now I hand over this to Mr. Deepak Khandelwal our CFO for the financial overview.
Deepak Khandelwal — Chief Financial Officer
Thank you sir. Good afternoon to everyone. I will now take you through our financial performance for the third quarter and nine months ended financial year 2526 for Q3FY26 revenue from operation stood at 1796 crore registering a year on year growth of 32%. For the nine month period revenue stood at 5017 crore representing a year on year growth of 49%. Imitida for the Q3FY26 was 228 crore up 27% year on year while EBITDA for nine month FY26 stood at 614 crore reflecting a 40% growth. EBITDA margin stood at 12.7% for Q3FY26 and 12.2% for nine months.
FY26 supported by stable project execution and cost discipline. Operating profit before tax for Q3FY26 was 168 crores which was up by 33% while profit after tax PAT for the quarter increased by 16% year on year to rupees 108 crore for nine month financial year 26. Operating PVT improved by 51% year on year to 437 crore and PAT increased by 61% year on year to 320 crore. This performance was driven by steady execution, margin discipline and effective cost control. From a balance sheet perspective, our working capital days improved to 83 days compared to 84 days in H1FY26 and 91 days in FY25 reflecting better working capital management.
Our net debt reduced to 463 crore from 703 crore in H1 financial year 26 and our debt to EBITDA ratio stood at 0.57 times highlighting strengthening balance sheet parameters. Return on capital employed has remained consistently above 24% over the past three years and stood at 25.25% for nine months FY26 reflecting efficient capital utilization. With this I would now hand the call back to Mr. Naran after which we will open the floor for questions.
Randeep Narang — Managing Director and Chief Executive Officer
Thank you Deepak. So just to summarize, looking ahead, the outlook of transmission and distribution sector, both India and international markets remain structurally strong driven by sustained urbanization, acceleration of industry activities, large scale renewable energy integration and rising power demand. These tailwinds are further reinforced by continued investments in grid modernization across cross border connectivity and border broader energy transition across multiple geographies. We continue to see healthy momentum in the industry tendering activity both domestically and overseas. Addressable market visibility in the next 12 months is more than 1 lakh crore which provides strong opportunity set up for our disciplined growth.
This optimism is evident across both our domestic and international markets, particularly domestic. Our focus remains on securing high quality margin assertive projects that align well with our execution strengths and we continue to follow the quality bidding approach which is selective yet is giving us enough opportunities to improve the bidding pipeline prioritizing on the right margins, the right clients and the geographies rather than pursuing growth at any cost which is a key key area of focus for us. This disciplined strategy has consistently supported profitability and remains central to our long term growth approach. We believe that disciplined approach supported by structurally strong and growth oriented industry outlook positions transil very well to deliver sustained profitability and continued long term value for our stakeholders.
Now I request the moderator to open the floor for Questions which I and Mr. Deepak Khandulwala 3 or 4 will answer.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch tone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use handsets while asking a question and are requested to limit your question to two per participants. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Pritesh from Lucky Investments. Please go ahead.
Pritesh Chheda
Yes, sir. So based on the execution that you have so far and order backlog, what kind of order inflow now that you see for this year and next year? Order inflow or order inflow growth, whatever you’re comfortable in sharing. And what kind of execution growth do you see this year and next year?
Randeep Narang
So I think that’s a good question. The core question, as we mentioned, the order intake with 5100 odd crores plus the L1 of 3483. We will cross the last year’s boundaries of 9 and a half 10,000 crores. We also have already bid for around another 15,000 odd crores of jobs which we are assuming the results will come in the next two months. So we are quite confident that our order intake plan will be as per the AOP we planned and the guidance we have given on the revenue front. We had improved our guidance from 24, 25% to 27%.
And we’ve seen good execution momentum post monsoons. Because if you remember the monsoons were pretty heavy in India this year. So we are hopeful to maintain the 27% plus guidance and we are stretching to see if we can do more.
Pritesh Chheda
This is the 25th.
Randeep Narang
Yeah, this is for this year. Next year again I said 12 months. We have a good 1 lakh crore of order book opportunity, tendering opportunity which we will look at a 10 to 12, maybe even 13, 14% order intake and our growth as we had already planned, we are looking at 20, 25% growth going forward in the next couple of years. Our order book today with L1 is booked to build 2.5 times which gives us a clear trajectory of growth.
Pritesh Chheda
Okay. Do you wish to give out a ballpark revenue figure for FY26?
Randeep Narang
I did mention that that 27% over last year and maybe we stretch and do more but we are trying our best.
Pritesh Chheda
Okay. Thank you very much, sir. All the best.
Randeep Narang
Thank you.
operator
Thank you. The next question is from the Line of Jainam Doshi from Chris pms. Please go ahead.
Jainam Doshi
Yeah, good afternoon, sir. So like how much has been the contract assets including the retention money at the end of this quarter and how much have we net realized that to the last quarter?
Randeep Narang
Just a second. I asked Deepak to give you the details.
Deepak Khandelwal
So contract Asset has been 2,643 crore this nine month ending 31st of December 2025 which was as on 31st March 25, 22 crore approximately.
Jainam Doshi
Okay, so we have seen like increase in the cash and cash equivalent due to the realizations of these contract assets. Am I right in understanding?
Deepak Khandelwal
Yeah. It is both on part of execution and internal accruals as well as working capital management
Randeep Narang
and better inventory management also.
Jainam Doshi
Got it. Got it. And on the Bangladesh project execution, like how much have we executed this quarter and by end of this year, how much would Bangladesh order comprise of our total order book. And also.
Randeep Narang
We are right now planning to finish this job by June, July next year. By end of this year we would have around approximately 600 to 700 crores left for next year. We are on track with, in fact we are doing better than what we had planned in terms of execution. So we are in the right zone. We did execute around 300 to 400 crores this quarter. So overall we are sustaining the delivery commitment to the client and we will finish the job by next six months of the next financial year.
Jainam Doshi
What the kind of the receivables from Bangladesh project, how much are they currently.
Randeep Narang
Receivables? Basically we are getting money on time, actually before time because this is project of national importance. And the receivables overall would be in the range of what 800-488-crores receivables from.
Jainam Doshi
Bangladesh.
Randeep Narang
Which is not too much looking at the size of the project.
Jainam Doshi
Okay. Okay, got it. Thank you. Thank you. Thanks a lot.
Randeep Narang
Thank you.
operator
Thank you. The next question is from the line of Mahima Gitwani from Philip Capital. Please go ahead.
Mahima Gidwani
Hello.
Randeep Narang
Yes, ma’. Am.
Mahima Gidwani
Okay, so I have four questions. First, while revenue growth has remained healthy. We have seen a sharp moderation in order inflows on a quarter on quarter. Basis down by nearly 30%. Could you help us understand whether this reflects a broader slowdown in tendering activity across T and D sector or is. This specific to our company?
Randeep Narang
Ma’, am, contrary to the understanding, in the same period versus last year we have grown our order intake for the nine month period. And if you see that we have grown by around 9 to 10% over last year. Same time our internal order intake has not reduced. The L1 position also is much better than last year. So the order pipeline going forward as we said 9,500 10,000 will happen. In fact we are hoping that we can better that also because we already bid for around another 15,000 crores of orders. So therefore the first question is that we are good to go as per our guidelines and promise.
Mahima Gidwani
Okay, understood. Our second is under a recent union budget the power grids capex outlay for FY27 has increased by around 32% to 37,000 crores. So how should we think about the potential impact of this on our order inflows over the next few quarters?
Randeep Narang
So ma’, am, what I know of their capex. So this year against 28,000 they are talking about 32,000 crores. They are our key clients. We are doing 20 plus jobs with them and if their CAPEX is increasing it is part of our potential opportunity and we look forward to working with them and increasing our market share. So that’s a very positive development for us and we look forward to more contracts and bids coming from them.
Mahima Gidwani
Okay, that would be from my side. Thank you.
Randeep Narang
Yeah, thank you.
operator
Thank you. The next question is from the line of Bala Subrahmanyam from Arihant Capital. Please go ahead.
Balasubramanian
Good afternoon sir. Thank you so much for the opportunities. So could you please share the order book mix? In terms of domestic Africa, Asia excluding India and CGC and Americas and Europe generally we given the breakup of domestic and exports only. But if you could detail the breakup that would be really helpful.
Randeep Narang
So the India is around 8,000 plus crores. I’ll give you general guidelines not specific.
Balasubramanian
Yeah yeah.
Randeep Narang
Africa would be approximately 4000 odd crores. Saad which includes Bangladesh of course would be around 1200. And of course we just entered Mena so that will be in the range of 750 to 800 crores. So it’s well diversified and it is in line with the way we want to grow in a diversified geographical manner.
Balasubramanian
Okay sir, what is our debt level currently I think we plan to increase nearly 200 to 300 crore especially for capacs. Just want to understand what’s the current debt levels and how it will be shaping up by end of this FY26 and whether it’s a debt it will increase gradually till FY27. So what do we understand?
Deepak Khandelwal
So as you can observe the long term borrowing remains around 90 crore odd and short term borrowing remains around 750 crore. And as we are going to incur the capex. So there’s some part of the borrowings will increase but it is not going to be very substantial because the CAPEX was funded by internal accruals and money received from the IPO as well.
Randeep Narang
So we had mentioned in the last call also that we are doing it in a staggered manner. And from a level of 600 it reached 722 and now 750 and will be marginal increase. But it’s well covered in terms of the way we are managing it.
Balasubramanian
Okay sir, so working capital day is nearly 83 days as of 9 month FY26 if you exclude IPO funds and unpaid dividends. Like what is the normalized working capital days And I think we have 18,200 crore order book and what kind of specific initiatives we are taking in terms of milestone billing terms in place to prevent further working capital stretch especially in international projects.
Randeep Narang
So I think our working capital days are one of the best. What we have seen from 91 coming down to 83 and our clear focus is on net working capital days. The whole organization is focused on cash and controls. So therefore we are in a good zone today going forward as we build our order book obviously the retention money will increase. But we have to look at how we manage our cash. So our working capital today what we are utilizing is in line with our growth projections. And if you see our growth projections they are tempered and they are planned in a manner that the working capital from internal accrual will support this process.
Balasubramanian
Okay sir, so my last question on the solar EPC side.
operator
Mr. Bala, sorry to interrupt you. Can you please rejoin the queue for more?
Balasubramanian
Okay. Yeah. Okay. Thank you.
Randeep Narang
Thank you so much for your questions.
operator
The next question is from the line of Naman Parmar from Niwashe Investment. Please go ahead.
Naman Parmar
Yeah. Good afternoon sir. Thank you so much for the opportunity. So firstly I wanted to understand on the 1 lakh crore opportunity that you are telling it also include the HVDC projects that we will be waiting for.
Randeep Narang
Yes. So we are already doing an HVDC project for power grid and we have already done HVDC projects. So we are looking at around 59 or 60 odd thousand crores from domestic and for 40,000 odd crores from international. So this includes that we already are doing 800 KV HVDC Nagpur project. So this is included. Now this is not what we do for. This is for transmission in particular. So therefore we are in the right zone. This 1 lakh crore, 60% will be domestic and 40% will be international. Okay.
Naman Parmar
And in the current order book only, how much would be the HVDC orders?
Randeep Narang
We have one order only right now and we are in the bidding pipeline for more as they come and as they announced.
Naman Parmar
Okay. And secondly on the execution on the export or international side. So it has been a very slow down in the international execution. So what would be the reason for that?
Randeep Narang
Well, I don’t tend to agree because our revenue from execution in international is stable. It is in fact there is a growth of 30% over last year. So we for the nine month period. So we are good in terms of international execution. Of course there could be a delay in one or two projects but overall we are good in terms of the execution progress. And of course monsoon hampered some delays in July, August, internationally also.
Naman Parmar
Because if we see the segmental data. So I think in the quarter three of FY20 you have done around 800 crore execution in the international business. In current quarter you have done the 723 crore. So that’s why seeing a degrow, that’s why asking what will be a result.
Randeep Narang
No, if you see the nine months we are growing over last year in terms of the to see the overall growth of how we have grown in international and we are actually in a zone where we have improved by 30%. Last year was around 1700 crores, this year we already done 2500 crores.
Naman Parmar
Okay, understood. And lastly, on any orders that you are expecting to enter into the best related. Best related project in the future?
Randeep Narang
Well, we are evaluating the best business. We are still not ready to start bidding. But it is something which definitely with the opportunity in India and the projections in the budget, we will look at this opportunity.
Naman Parmar
Okay, understood. Thank you so much for answering.
Randeep Narang
Thank you.
operator
Thank you. Ladies and gentlemen. In order to ensure that the management is able to address questions from all participants in the conference, please limit your question to two per participant. The next question is from the line of Shubhankar Gupta from Equity Capital. Please go ahead.
Shubhankar Gupta
Am I audible?
Randeep Narang
Yes, very much. Thank you.
Shubhankar Gupta
So firstly, congratulations on a great set of numbers. Once again thank you for you know, sticking to your word and always delivering. Well. So my first question is around. So we as analysts basically look at a metric called CO2 EBITDA which acts as a metric to how much cash the company is converting on an EBITDA level. Right. You can take it pre tax. So on that specific metric, our public transfer is not as high as one or two of our peers. So I just wanted to get a sense of like from your end as to is there a metric which we should see from the PNL which we can you know convert to the cash flow from operations and gauge if the company has improved or not.
So can you guide something on that bit?
Randeep Narang
So I request Deepak to answer this question. For nine months last year versus this year. So if we consider the last year.
Deepak Khandelwal
Nine months our cash generated from operation pre tax was around 300 crore and which has increased to 440 crore this nine months.
Shubhankar Gupta
Can you just repeat?
Deepak Khandelwal
So our last year nine month cash flow from operations the direct tax was 300 crore which has increased to 440 crore this 9 month. So there is a substantial increment in the cash flow from operations. This.
Shubhankar Gupta
Actually that’s fair. That’s fair. The question is more centered around the metric of CO4 to EBITDA. Right. And when you look at that our company typically ranges, the range of CO2 to EBITDA conversion is around 30, 35% which is a tad bit lower than our peers. So my what I’m trying to send, you know, get a sense on is is there a number which we can pick from the P L which we can benchmark the cash flow.
Deepak Khandelwal
If you see my profit before tax for this nine month has been 430 crore. And whereas my cash flow from generation is more than than 440 crore.
Randeep Narang
So it is not 25 to 30%.
Deepak Khandelwal
It is substantially higher than that. And previously Also in the nine months profit before tax was 300 crore and my cash flow from generation was 305 crore to be very precise. So I think these are the figures which are there.
Shubhankar Gupta
Got it. Okay. So I’ll just probably you know get take a quick check on this one and if there is some concern I’ll probably mail it to you. The second question is sir, around the provisions made towards labor code changes. So I wanted to just get a sense on how have these labor code changes have they led to a change in our earlier estimates for EBITDA and pat margins and how do you see look at them or you know, factor those in going forward.
Randeep Narang
So this is as per the norms of compliance. We’ve already done that. 17 crores have have been provided and we still don’t change our EBITDA profile. I think this is something which is part of the change which happens in a normal course of business and we are comfortable to maintain our ebitda profile of 11 and a half to 12%. In fact, 12% is what we’re talking about.
Shubhankar Gupta
Okay, so that remains.
Randeep Narang
Yeah.
Shubhankar Gupta
Okay, perfect sir. Thank you so much, sir Artist, congratulations once again on the good results.
Randeep Narang
Thank you.
Shubhankar Gupta
Thank you.
operator
Thank you. The next question is from the line of Khushboo Gandhi from Ambit Capital. Please go ahead.
Khushbu Gandhi
Yeah. Good morning, sir. Thank you for giving me the opportunity.
Randeep Narang
Thank you.
Khushbu Gandhi
So I have this one question on the revenue guidance which you have given. I appreciate that you have upgraded the guidance from 20 to 25%. 27%. But when I see the nine month revenue growth itself. So we have done a nine month revenue growth of 50% and when we see a 27% growth. So in Q4, you are expecting a T growth compared to last year’s Q4 or. We are very much conservative on quoting the numbers.
Randeep Narang
So actually it’s a mix of both. We are not looking at, you know, minimizing our growth, but there is a certain amount of, let’s say say we have some row issues, some forest issues in several projects in domestic and some issues on row and international. So we are giving you a conservative guidance. And I said 27% plus. So we are hopeful that we resolve that and we improve from where we are. But at this stage I would rather be, you know, giving the right guidance and hopefully we are stretching to improve this which should happen because if I.
Khushbu Gandhi
Just compare like even if you don’t do any growth in Q4, still we’ll be doing a 30% growth. So is it fair to assume that 29 to 30% is the minimum growth we should expect considering there is no growth in Q4 and generally Q4 is the best.
Randeep Narang
You have to see this in nine months period. And not only see Q1 Q eventually the year is more important. I would be looking at stretching and improving the Q4 numbers. But if you see on a nine month basis leading to 12 months, we will have a very healthy growth for the year. And that’s also equally important.
Khushbu Gandhi
Okay, sir, thank you.
operator
Thank you. The next question is from the line of Nikhil from Kizuna Wealth. Please go ahead.
Nikhil Poptani
Yeah. Hi sir. Thank you for giving me the opportunity and the congratulations on very great set of numbers. So my first question is on the cash flow itself. Like when I look at your net of promote contract assets and our contract liabilities to the percentage of sales, it is coming out to be 27 to 28, 29 to 25 to 29% while the peers are in the range of 18 to 20%. So is there any particular reason for that?
Randeep Narang
Can you repeat your question? Sorry, I missed it.
Nikhil Poptani
So my question is on cash flow perspective.
Randeep Narang
So there are Certain amount of. So we are also within the industry norms. There are one or two areas where we are awaiting collections which are little delayed and it will be in the same range as you mentioned. So it’s more about just waiting till March which will normalize.
Nikhil Poptani
Okay. So we are expecting the collections to get even better in the Q4.
Randeep Narang
Yes.
Nikhil Poptani
It’s also on the update on the loan given to our related party Burberry infra. So that is due on Q4 and we will receive the whole payment and the rest in c. September of 2026. Right.
Deepak Khandelwal
Sir, there is agreement with the party and they will be giving part payment by Q4 and balance payment in the next financial year. So we this is on track and the party has committed to give the money as per the commitment.
Nikhil Poptani
Okay, so that’s it from us. Thank you. Thank you.
Randeep Narang
Yeah, thank you so much.
operator
Thank you. The next question is from the line of Meht Talati from Agility Advisors. Please go ahead.
Mahek Talati
Yeah.
Randeep Narang
Please. Yeah, you’re audible. Please go ahead.
Mahek Talati
Yeah. Thank you so much for the opportunity. Sir, wanted to understand on the raw mater from the raw material point of view there has been a sharp increase in the raw material for especially copper. So how are we seeing is this a price or lower margins will be impacted.
Randeep Narang
So actually we don’t use copper in our business. In terms of what we do it’s more applicable to the cable industry who are using copper mould. So we are actually insulated from this copper increase and therefore it doesn’t impact us.
Mahek Talati
But sir, the cable prices will increase. Right. And.
Randeep Narang
But we are not doing underground cabling in a big way. We have marginal jobs and the orders have already product has been supplied. So we are in a good zone.
Mahek Talati
So no major impact on the.
Deepak Khandelwal
Yeah, we don’t see any impact of copper.
Mahek Talati
Okay, by. By. When can we expect.
Randeep Narang
Sorry, can you repeat this last bit? I couldn’t hear you.
Mahek Talati
When can we expect our capexs to go live? Both Brownfield and Greenfield?
Randeep Narang
Okay, that’s a good question. So 70% of our brownfield is already started the production and we are hopeful that the complete 100% will happen by February. This is what our forecast is. The new tower factory we are looking at March, April. So we are on track and this will definitely support our growth and diversification backward integration for next year’s business. So all this will happen by end of this Q4 in this financial year.
Mahek Talati
Our dependence on the outside companies for our procurement will decrease. Right.
Randeep Narang
Normally we are doubling our capacity in line with the order book. So we are not too dependent outside anyway. But with this, the kind of growth we are looking at, this will help us to support the project execution and also give us some leeway for product sale which we want to improve.
Mahek Talati
Understood. So no major impact on something.
Randeep Narang
Yeah, thank you.
operator
Thank you. The next question is from the line of Disha from Sapphire Capital. Please go ahead.
Disha
Hello.
Randeep Narang
Yeah, welcome.
Disha
I’m audible sir.
Randeep Narang
Yes, very much.
Disha
Yeah, thank you so much for this opportunity and congratulations for a steady quarter. So, just a couple of questions. So this subcontracting expenses as I was seeing there was a sharp increase in Q2 and then they remain elevated in Q3 as well. So when, what is the cost for that and when do you expect that to normalize?
Deepak Khandelwal
Yeah, basically subcontracting expenses, this mix of the material consumption and subcontracting expenses depend upon the project mix which is under execution, so at which stage it is going to get executed. So when you compare the figures you have to see all two things put together. Cost of metal consumed and subcontracting expenses as a percentage to the revenue. So if you see that in September quarter these were 69% and this quarter it also remained at 69% and and similar quarter for the previous year it was 66%. So 3% increase has taken place. That is nothing because of hike in election and stinging price.
Randeep Narang
Basically we are looking at higher execution and ramping up of our execution and therefore the subcontractor cost has gone up.
Disha
So we’ll expect this to like sustain.
Randeep Narang
For Q4 or Q4 again and come down eventually to the last year’s level because projects are getting completed in the high priority jobs.
Disha
Okay. All right. And as for the bid pipeline, I think you mentioned 15,000 crores we have currently. Right. So what is any sort of targets you have for order inflow for the next year?
Randeep Narang
So this 15,000 crores, I’m talking only for this year, right. Finishing gone next year, 12 months we talked about 1 lakh crores. So the bid pipeline is strong even in this 15,000. We’re looking at at least getting 10 to 15% orders and a normal win ratio is 10 to 12%. And therefore we are hopeful that we’ll maintain and continue and grow this bid pipeline next year also.
Disha
Okay. And in terms of the margins because of our brownfield and greenfield expansion coming up mostly in Q in FY27, what sort of improvement in margins we expect?
Randeep Narang
Well, this is going to help us execute jobs faster. If you do the EPC job faster, obviously you save on margins. There Will not be areas where you can quantify it directly in terms of margin change. But project execution on time will definitely help us to improve the cost outlay. And the impact of margins is very difficult to say, man.
Disha
Okay. But yeah, timely execution is appreciated. So I think that will help.
Randeep Narang
Yeah, it will help for sure. But I can’t put a number to the improvement but it’ll definitely help.
Disha
Okay, so this 27% guidance, although you mentioned that it seems a bit conservative. But even if like we do 50, 35% that will be. If we suppose take 27% that means we’ll be DE growing in Q4 which seems very unlikely.
Randeep Narang
So as I mentioned we have some, you know, headway needed for clearances and some of the jobs. And if the row clearances happen, we will definitely improve on the 27%. So the whole organization, the execution organization, the project management team is working to see that we beat this number of 27%.
Disha
All right, thank you. That will be it from my side.
Randeep Narang
Thank you.
operator
Thank you. The next question is from the line of Anshul JT from LKP securities limited. Please go ahead.
Anshul Jethi
Hello sir. First of all congratulations on a great set of numbers. Always delivering more than what you guide. So most of my questions have been answered. Just wanted you know, more clarity on the new segment, new countries or new region we have entered which is made a lease. What will be our margin profile in the Middle East? Will it be on same terms like what we do in Africa or will it be less owing to the competition? And do we have an escalation clause here as well?
Randeep Narang
So principally as we mentioned we have a very clear risk matrix. We do not go to geographies and countries where we feel that the over overall potential and the margin profile will get eroded over the years. So we believe that we are focusing internationally only on TND and we are hopeful that we will maintain our margin profile in TND in the new countries we have entered.
Anshul Jethi
Okay, so you have mentioned a bid pipeline of 1 lakh crores for the next year as well. What would be the future of Middle east in that bed pipeline.
Randeep Narang
So as I mentioned to you internationally we’re looking at 40,000 to 50,000 odd crores. Middle east, we are not in Saudi so we are in three, four countries there. Principally we are in Abu Dhabi, Oman, Jordan. And we feel that this potential will be 10 to 15,000 crores which we will try and bid.
Anshul Jethi
Okay sir, that’s all. Thank you.
Randeep Narang
Thank you.
operator
Thank you. The next question is from the line of Aryan Bhatia from Invid Research. Please go ahead.
Aryan Bhatia
Thank you for the opportunity, sir.
Randeep Narang
Yes, very audible. Thank you.
Aryan Bhatia
My question is on our civil business. So in the previous order we acquired an entity which is looking to acquire Gammon civil business. So I just wanted to know what is the side of that business and are we looking to you know get more into the civil side. Currently we are more into poverty and.
Randeep Narang
No, we already are doing civil business. Bridges, we are doing cooling towers and elevated roads. So we want to only look at heavy engineering led jobs. And right now there is no interaction or discussion on anything which you just mentioned on the bridges and hydro business. So we are doing all the jobs on our own with our own capability and managing this. We are currently running six to seven jobs in civil business in the same lines as the product categories I mentioned. We are not into residential building nor we are into roads and we don’t intend to get there.
Aryan Bhatia
Okay. And sir, can you share the pipeline for international as well as domestic. And second question is the order intake has been like increased by 10% by. So if there is a slowdown in the order with pipeline.
Randeep Narang
No, actually we are good. We grew by 9% over last year. In the same period of nine months our L1 is around 3500 crores and 15,000 crores we already bid so we’re looking at another 1500-2000. So we will better and beat our last year’s order intake. And we are in track for that. So we are very positive on the order intake that we will be reaching the guidance given to the stakeholders.
Aryan Bhatia
This is the big pipeline if you can repeat. And the closing order book we are.
Randeep Narang
Targeting our current order book with L1 which is uneducated order book is 18,200 and we’re looking at another 1500 to 2000 crores of orders. And looking at our execution pipeline we should be in the range, you know around 16 odd thousand plus crores the way we are looking at to start next year. So we, as I said we are stretching on both the order pipeline and the execution for this quarter.
Aryan Bhatia
Thank you. And discomfort. That’s from my side.
Randeep Narang
Thank you.
operator
Thank you. The next question is from the line of Rishi Javeri from CBA Asset Managers llp. Please go ahead.
Hrishit Jhaveri
Hi sir. Congratulations on a good set of numbers. So a follow up from previous participants question that I agree. Our raw material is basically steel, aluminum. Given your volatility and increase in the steel prices as well, do we have enough inventory or will we have to then acquire it at a high Rate.
Randeep Narang
Can you repeat the question, sir? I could not.
Hrishit Jhaveri
The steel price volatility, how will it impact our margins going forward?
Randeep Narang
Steel volatility. So steel, we had steel softening over the last six months. It is now in line with what we had projected. So it’s not going to impact our margin profile for this year and going forward. And when we bid on steel we look at some contingency and we look at how do we look at marking up the cost based on global trend. So we are very careful when we look at the projects for epc.
Hrishit Jhaveri
Okay, thank you. GIS substations, how are we seeing the demand spanning in the northeast India for GIS substation?
Randeep Narang
So substation is a business. We are growing. We have already done four to five jobs. The demand in northeast, you’re right, is coming but it will take six months to fructify in terms of the bid pipeline. The visibility is still not there to the extent we want. But definitely we will be bidding for these jobs in northeast.
Hrishit Jhaveri
Okay sir, thank you and all the best.
Randeep Narang
Thank you.
operator
Thank you. We will take the last question from the line of Nikunj Bhanushali from Kosh Wealth. Please go ahead.
Nikunj Bhanushali
Hi sir. Congratulations for the good numbers and thank you for the opportunity. So I just wanted to ask if you could comment on the overall transmission capacity and the outlay in the domestic in India basically. And because if you see the transmission lines added in the last two years is very less in the current year, in the last year is very less compared to the entire decade. And so if you could just comment on what the outlay is and what are the future plans.
Randeep Narang
So actually there have been some delays in execution thanks to row and agitation stroke forest and that is changing for sure. There’s a lot of effort by the government authorities to improve the execution. We are looking at currently from 5 lakh circuit kilometers. We are expecting it to go to 648,000 circuit kilometers in the next three to four years. The energy transition push of 500 gigawatts of non facile capacity also will help for grid expansion and execution. So we are very buoyant on the India piece. We feel that the way the infrastructure investment has happened in the current budget will help the transmission industry and the substation industry to grow.
So this really helps in the way we are looking at our growth and transferring.
Nikunj Bhanushali
Right, because. So when do you expect the push to come in? Because as per the plan, I think by FY27 what the capacity was to be added on in the transmission lines we have only covered 50% of that.
Randeep Narang
If you have heard on this call, Power grid has already changed their estimate to 32,000 crores on capex. So the way the TBCB jobs are coming and the expansion is happening, we are quite positive that the bid pipeline and execution will also happen parallelly. So the India story on infrastructure is really good and what we see is it going to continue for the next three to five years without a problem.
Nikunj Bhanushali
Okay. Okay, that’s it. From aside and all the best for the future. Thank you.
Randeep Narang
Okay. Yeah, thank you. So I’ll summarize the call. Thank you very much for all the participants. So as we mentioned, we remain in Transrail focused on disciplined execution, selective bidding and expanding our TND business with a strong and high quality order book. And we are upgrading our digital systems to SAP rise robust processes and a capable leadership team and teams at all levels. We are very buoyant that our team right people, processes and systems will make us future ready to sustain growth and create stakeholder value. So I thank you for joining on the call and on a very positive note, we say goodbye.
operator
On behalf of Philip Capital private client group. That concludes this conference. Thank you for joining us and you may now disconnect your lines.