Triveni Turbine Ltd Q1 FY23 Earnings Conference Call Insights

Key highlights from Triveni Turbine Ltd (TRITURBINE) Q1 FY23 Earnings Concall

Management Update:

• [00:07:34] TRITURBINE said that the company’s capacity expansion that it started in 4Q22 and 3Q22 will be completed by Sept. 2022 and the augmented capacity will be sufficient to cater to the demand of the order book.

Q&A Highlights:

• [00:10:44] Ravi Swaminathan from Spark Capital enquired about the domestic growth environment being reasonable in order inflow and the nature of those orders. Nikhil Sawhney MD said that the company is seeing a robust ordering environment both in domestic and export market. In domestic market, distillery and process co-generation are leading the demand.

• [00:12:54] Ravi Swaminathan from Spark Capital asked if the company is starting to see orders in the current order inflow in the 30 to 100 mw range. Nikhil Sawhney MD answered that orders in that range are of larger value and are lumpier. These orders are not part of 1Q23 order book but in 2Q23, the company is having good success already.

• [00:17:22] Ahmed Madha with Unifi Capital asked if the company is seeing an upside in margin post the correction from the current base. Nikhil Sawhney MD said that the company has possibilities to expand margin, and they should in terms of the fact that TRITURBINE has a better revenue mix and declining commodity prices as well as higher aftermarket sales.

• [00:19:32] Ahmed Madha with Unifi Capital enquired about the percentage share of 30-100 mw segment in current closing order book. Nikhil Sawhney MD answered that it’s upwards of 10% of current order book and it will increase in coming quarters.

• [00:29:05] Himanshu Upadhyay from O3 Securities asked if the company is seeing any price preference for the market with domestic PSUs in the oil and gas segment. S.N Prasad President replied that there is no price preference for domestic suppliers as of now. Even the competitors also manufacture the turbine in India.

• [00:32:05] Tushar asked about the capex of INR35-40 crores expanding the facility to 200-250 turbines, if it’s fair to assume the company can get incremental revenue of INR100-120 crore. Nikhil Sawhney MD replied that asset turn may be more. TRITURBINE is seeing 35%-plus growth in the next couple of years which should give an indication of revenue growth.

• [00:35:14] Tushar enquired that in the coming 2-3 years where does the company see the topline growing. Nikhil Sawhney MD said the company is quite confident of company’s growth for the next couple of years in terms of being reflected tangibly by the order bookings.

• [00:36:49] Mihir Manohar of Carnelian Asset asked about the longevity of the demand environment. Nikhil Sawhney MD replied that in the API market, TRITURBINE should aim to get a better market share and see a greater presence on the ground with its customers, aiding in getting more revenue.

• [00:37:08] Mihir Manohar of Carnelian Asset asked about the margin profile with turbine capacity increasing. Nikhil Sawhney MD replied that margin profiles don’t change substantially with the capacity of turbines. It depends on competitive intensity and more so on specifications; the higher the specification, the higher the margins.

• [00:41:47] Payal Lad with Progressive Shares asked about the newly developed sub-3 mw products that cater to demand for the PRVS in terms of market size. Arun Prabhakar ED said these are standard turbines and these are made and stocked and stocked and sold. It’s a developing thing. These are not against the orders. It will go through not only the sales force but also through a distributor network.

• [00:53:57] Abhilash Kiran asked about the domestic market share currently and why it’s falling. Nikhil Sawhney replied that it‘s  in excess of 50%. On the fall, the company is expanding the market as it speaks. There is also some competitive intensity in the market and the focus being more on the export market that’s impacting the fall.