Triveni Turbine Ltd (NSE: TRITURBINE) Q3 2025 Earnings Call dated Feb. 03, 2025
Corporate Participants:
Rishab Barar — Investor Relations
Nikhil Sawhney — Vice Chairman and Managing Director
S Narayana Prasad — Chief Executive Officer
Parab Sachin — Chief Operating Officer
Analysts:
Ravi Swaminathan — Analyst
Amit Anwani — Analyst
Harshit Patel — Analyst
Mahesh Bendre — Analyst
Amit Mahawar — Analyst
Prolin Nandu — Analyst
Unidentified Participant
Chirag Muchhala — Analyst
Presentation:
Operator
Hello, ladies and gentlemen, good day and welcome to the Triveni Turbine Limited Q3 FY ’25 Earnings Conference Call. [Operator Instructions] I now hand the conference over to Mr Rishab Parar from CDR India. Thank you, and over to you, sir.
Rishab Barar — Investor Relations
Good day, everyone, and a warm welcome to all of you participating in the Q3 and nine months FY ’25 earnings conference call of Turbine Limited. We have with us today on the call, Mr Nikhil Soni, Vice-Chairman and Managing Director; Mr SN Prasad, Chief Executive Officer; Mr Sachin, Chief — Chief Operating Officer; Mr Lalit Agarwal, Chief Financial Officer; and Ms Survi, Investor Relations and Value Creation.
Before we begin, I would like to mention that some statements made in today’s discussion may be forward-looking in nature and a statement to this effect has been included in the invite, which was mailed to everybody earlier. I would now like to emphasize that while this call is all — is open to all invites, it may not be broadcasted or reproduced in any form or manner. We will start this call with opening remarks from the management, following which we will have an interactive question-and-answer session. I now request Mr Nikhil to share some perspectives with you with regard to the operations and outlook for the business. Over to you, Mr. Thank you.
Nikhil Sawhney — Vice Chairman and Managing Director
Thank you very much,. A very good afternoon or good evening, ladies and gentlemen, and welcome to the Q3 nine months FY ’25 earnings call for Turbine Limited. Again, I’m very pleased to report the highest-ever quarterly revenue and EBITDA along with a record closing order book for turbine. In the 3rd-quarter of financial year ’25, we had a revenue of INR5.03 billion, which is an increase of 17% year-over-year.
Domestic sales increased by 5% to INR2.5 billion, while export sales increased 31% to INR2.5 billion as well. Export as a percentage of sales increased to 49% in this quarter as compared to 44% in the previous year. We also had, as I said, the highest-ever quarterly EBITDA of INR1.31 billion, which was up 30% year-over-year with a margin of 26.1%, which was an increase of 20 — sorry, 270 basis-points year-over-year. The profit-after-tax for the quarter was at INR926 million, an increase of 36% year-over-year. We have a healthy quarterly order booking of INR5.26 billion during the 3rd-quarter and a record carry-forward order book as on 31st of December of INR18.19 billion, which is an increase of 15% year-over-year.
The Board of Directors of the company has approved — have approved a payment of an interim dividend of 200%, which is INR2 per equity share of INR1 each for the financial year of March 31 March 2025, and this represents a 54% increase in the interim dividend. For the nine-month period, the operations grew by 23% year-over-year to INR14.7 billion, a record again for the company and domestic sales increased by 20% to INR7.8 billion, while exports increased by 25% to INR6.9 billion. In the nine months, the mix of domestic versus exports stood at 53 to 47% as compared to 54 to 46 in the previous period. EBITDA as well has increased by 38% and EBITDA margins have increased by 280 basis-points to 25.7% for this nine-month period.
The profit-after-tax for the nine-month period has grown to INR2.6 billion for this period. As far as order booking goes, the company has achieved a record order booking in the 3rd-quarter of INR5.3 billion. I’m sorry, it’s not a record of order booking, but it’s the highest order booking of INR5.3 billion, which was largely flat on a year-on-year basis. While order booking from India has remained subdued in the quarter and I’m happy to take questions on this during the Q&A. The company continues to see good international demand, which is reflected in the export order booking, which grew by 9% year-over-year to INR3.46 billion.
The export order booking contributed to 66% of our overall order booking in Q3 and this includes repeat orders as well — from new — as well as new orders from new geographies as well as new applications in the — in Q3. The order booking continues to reflect good demand in the renewable energy space, particularly from waste-to-energy segments as well as biomass-based energy generation segments. We are hopeful and confident of a rebound in the domestic order booking. Our inquiry book from the domestic order booking as of the nine-month period is higher by 75% as of the previous period in the corresponding period last year, which seems to augur very well.
We were hopeful that this may have translated to an increased order booking in the domestic market in Q3, but this is obviously not the case. And while we cannot be — while we cannot directly drive demand for orders of our product, we are confident that of the underlying nature of some of the systems of the industries in which we — in which our clients participate that this demand will ultimately come through. Thank you. As far as order booking for the nine-month period for the company is concerned, we’ve achieved an order booking of INR17.3 billion as opposed to an order booking of INR14.4 billion in the same-period of FY ’24, which is an increase of 20% and domestic order booking has seen a decline of 3% to INR6.6 billion, while export order booking has increased by 41% to INR10.7 billion and now constitutes 62% of the overall order booking in the nine-month period.
As far as the segments grow, the product order booking has increased by 6% year-over-year in the 3rd-quarter and was at 3 point — was at INR4 billion and the product segment turnover was at INR3.3 billion during the quarter, an increase of 14%. And the nine-month period was. The product order booking has increased by 30% to INR12.8 billion and the product segment turnover was at INR9.7 billion, which is a 21% increase of the previous year. The aftermarket segment, which is a segment which constitutes not only our own shares and services, but also our refurbishment business, which caters to third-party has registered an order booking of INR1.3 billion in the third — in the 3rd-quarter, a decline of 17% when compared with the corresponding period of the previous year.
So the aftermarket turnover was a record INR1.8 billion during the quarter, up 22% year-over-year. The order booking in the aftermarket segment is something that we’re very confident of on a year-on-year basis to continue our growth in this segment to move from what may be slightly lower-value added segments such as overhaul to higher value-added and higher-margin segments. We are confident that the aftermarket will represent a strong growth segment for the company in the quarters and years ahead. The outstanding total order booking position stands at INR18.2 billion as of the 31st of December 2024, which is 15% higher than the previous year and the domestic outstanding order book stands at INR6.4 billion, which is lower by 22% as compared to the previous year, while export outstanding order book stood at INR11.8 billion, which is a 55% increase year-over-year and contributes 65% to the closing order book.
As far as technology and R&D goes, the company continues to focus on improving and expanding its research and development efforts. Our efforts in terms of expenditure on this will increase as I’ve spoken about in the previous quarters. We will continue to invest not only in the manpower that is necessary to expand our efforts into technology and R&D, but also capital investment, which will be required to adequately test and ensure that we are reaching the pinnacle of what these investments can achieve. As was reported about a week ago, we are pleased to report that in January 2025, the company received a notice of award to set-up a 160 megawatt-hour long-duration energy storage system at NTPC’s goodke thermal Supercritical Thermal power plant premises.
The greenfield development will be undertaken by Turbine for consideration of approximately INR2.9 billion. The scope of the work involves design, engineering, fabrication, erection commissioning and testing for setting up of the CO2-based energy storage system. In this long-duration energy storage, CO2 gas undergoes a thermodynamic transformation in a closed-loop to store energy. This system enables storage and dispatch of variable renewable energy power to stabilize the grid. This development showcases the collaborative efforts of the company prioritizing local innovation and manufacturing to support this initiative.
While an engineer to order subcritical CO2 turbine used to power this ESS is condigenously developed and manufactured by turbine, other storage system components will also be largely manufactured and sourced from India. Is in response to the growing demand for higher efficiencies and sustainable power generation, companies also pursuing a robust R&D program in allied carbon dioxide-based systems, which include both supercritical as well as transcritical products, but also continuing to invest in our steam cycle for not only enhancing the efficiencies of our blade parts, but also enabling a reduction in costs so that we can cater to a wider variety of applications while reducing our costs into those markets.
This will include not only modularization of our engineering platforms, but also a variety of efforts on our supply-chain base, including vendors and subcontractors. We are deeply committed to integrating digital technologies as well and hope to come out with discrete and concrete digital services as revenue streams in the near-future. Our people strategy is the center of the company as you would have seen from our low asset-base. And recognizing this, our teams and skills are pivotal in driving innovation and sustaining growth. We invest in continuous training and capacity building initiatives that empower our workforce, expand our collective capabilities, ensuring that we are well-equipped to navigate the rapidly changing market landscape.
Furthermore, we’ve maintained a competitive edge through global collaborations with leading experts around universities and design houses, leveraging these partnerships to amplify our research efforts and fuel sustainable long-term growth for all stakeholders. The company’s people strategy is a cornerstone of its success and meticulously aligned with its overarching business strategy. This is a driving force behind the ability to innovate and adapt as well as deliver exceptional value to our customers and stakeholders. As far as the outlook of the business goes, we expect to maintain a robust business performance in the medium-term, not only for this year, but for the coming years.
Our inquiry book and order book gives up — gives us very good visibility for the coming couple of years and we are extremely confident that with our new product introductions, which not only expand our order booking scope, we have greater visibility to weather the cyclicality of not only geographic order placements, which is between the domestic and international markets, but specifically on alternate applications, which would vary from industrial process for generation and industrial capacity expansion to renewable energy power generations on the steam cycle as well as those now from the carbon dioxide side as well.
The aftermarket business also shows a very promising growth aspect and we are extremely bullish on this market segment for both our own products in terms of providing upgrades and providing greater value to our customers, but more so from third-party applications that we would have in — both in international as well as domestic markets. The company operates in the industrial heat and power market, which is a market segment which necessarily for efficiency purposes is necessarily driven by a decentralized generation platform.
The company is adequately and very well-placed to be able to deliver these solutions to our clients regardless of what may happen in the decarbonization efforts. We are agnostic to the fuel that may be used to generate heat, but we are adequately and superly placed to be able to capture that heat and use it to the best extent possible for our clients. And we believe that this is the focus of the company going-forward to be able to derisk the company from macro trends and decarbonization, but to actually use that to an advantage to propel further innovation in new products and services to be able to cater to our customers’ requirements, while keeping in mind macro trends. So with that, I’d like to open the question — the floor to question-and-answers. Over to you, moderator.
Questions and Answers:
Operator
Thank you. [Operator Instructions] The first question is from the line of Ravi Swaminathan from Avendus Sparks. Please go-ahead.
Ravi Swaminathan
Hi, sir. Thanks for taking my question and congrats on a good set of numbers. My first question is with respect to the CO2-based energy storage system. What is the size of the addressable market in the country? What is the TAM that Turbine would be looking at over the next two to three years? Andy, how are these projects different from the core business that we entered into and what kind of profitability should we think about these orders?
Nikhil Sawhney
So, so Ravi, this is a new product [Technical Issue]
Operator
[Operator Instructions]
Nikhil Sawhney
Hello. Sorry about that, Ravi. I don’t know where I left off, but I was talking about our current project and our scope of the project here, which is to — which to provide 160 megawatt-hours of battery storage capacity to NTPC. The fluid which will be used for the battery storage will be carbon dioxide and we would be working on this project through our collaboration partner, which is energy dome for this is for a long-duration perspective. To put it in — to give you an idea of TAM, I think that is a calculation that you may wish to calculate in reverse yourself.
Our scope here is to provide a solution for battery storage, which where not only is the subcritical carbon dioxide turbine a critical component, but so would other off-the-shelf components such as compressor and heat exchangers be part of the scope. The civil work as part of the entire scope is not going to be more than 10% or 12% of the entire project. So it does very squarely sit in the electromechanical balance of plant come rotating throughput space, which is what we already provide. We will have to go through this project to actually sense our capabilities to be able to execute projects like this.
As you know, this fits very squarely within the scope of the company to be able to deliver solutions to clients. Not only is the team adequately prepared, but so is our subcontracting and vendor base prepared. We will, of course be working very closely with NTPC on this to see that this is a successful project so that this can be scaled. Having said that, in terms of our projection that we’ve been talking about with you as investors and analysts, this really has not been taken as part of projections. So these — what we believe is that this provides another and alternate revenue stream, which we will provide greater — greater visibility on in the quarters to come. But we think that this can provide a very a stable and growing, very rapidly-growing market for turbines to be able to utilize it not only its manufacturing, but also its our entire supply-chain base.
Ravi Swaminathan
And thanks. And by how much time will this be project executed? I mean, this particular project, what is the time period of execution and the profitability also given the fact that some of them would be outsourced component and there’ll be civil orders which are there, what would be.
Nikhil Sawhney
No, you’re right. The fact is that this is not immensely profitable order as this has been taken in the short-term. We hope to be able to value engineer as we do go about costing — go about executing this project. But we’re confident that in the overall sense of the company continuing to perform in newer product segments such as — such as this project, it will not be dilutive to the company’s earnings in the — as we as we forecasted because much like in this current year, we’ve taken a hit in terms of incubating our US operations, which is still perfectly absorbed within the — as you’ve seen our margins have expanded despite the fact that we’ve taken incubation costs.
These will all get normalized over-time. What we can assume over a period of time is that we would earn normal domestic margins on this product going-forward. Ultimately, the point is how much cost can we rationalize out-of-the system. Again, it’s a little premature for us to talk about it right now. I think that this orders come in within Q4. Let us wait for the end of this quarter, we’ll have much more to disclose at that point in time. But what it does provide a — what I would like to say is that this provides another avenue for us to — for us to expand and grow our solutions and products.
Ravi Swaminathan
Got it, sir. And my second question, so our domestic order inflow kind of was on the softer side this quarter and commentary from not only, I mean, from other capital goods companies also have been relatively on the softer side in terms of order inflow over the past one, two quarters. Do we — are you seeing any kind of weakness in the domestic market? If so, what sectors are you seeing weakness? Which sectors are still doing fine, if you can give your commentary on that? That’ll be.
Nikhil Sawhney
So I want to ask — thank you, Ravi. I’m going to ask SN Prasad as CEO to give you a little idea as to what he’s seeing on the inquiry side as well as specifically on the order booking and inquiry generation that is happening in the domestic market. Prasad, can you just give some idea.
S Narayana Prasad
Yeah, yes. Yes,. So the inquiry generation wise, yes, Q3 is a quite interesting quarter for us. We have seen a good traction in inquiry pipeline. So in Q3 alone in the domestic side, we saw around 59% year-on-year growth on the inquiry pipeline, whereas the YTD growth is something like around 75%. So inquiry pipeline-wise also compared to muted Q1, Q2, Q3 is a very, very interesting quarter. But yes, when it comes to order booking, yes, Q1, Q2, yes, there is a lot period. Even Q3, we started seeing some sort of a finalization movement is there, but we are optimistic in Q4. As on today, things are looking more progressive.
So coming to the sectors wise, what we are seeing is in Q3, yes, process core generation, yes, there is a good traction in terms of inquiry pipeline as well as order finalization. Slowly inquiry pipeline-wise, we started seeing steel segment is picking-up on inquiry pipeline. Cement also we started seeing inquiry pipeline picking-up on oil and gas. In orders wise, we are seeing some orders getting finalized in this thing. Otherwise, it is a mixed bag for domestic. Inquiry pipeline is strong, order booking, we are hopeful Q4 and coming quarter will go back to the normal momentum.
Ravi Swaminathan
Thank you. Thanks a lot, sir. Thanks a lot. That’s my question.
Operator
Thank you very much. We have the next question from the line of Amit Arvani from PL Capital. Please go-ahead.
Amit Anwani
Hi, sir. Thank you for taking my question. My first question and congratulations for the good numbers. My first question is on exports. You highlighted that there were few geographies where you got the incremental or the new revenue this quarter. Now that we would like to understand which kind of — what categories of product and which markets? And second, now what is the impact of current geopolitical situations, which are changing the tariff wars on each of your markets, if possible for you to highlight? Is it a negative positive impact anywhere of this?
Nikhil Sawhney
So firstly, unfortunately, we don’t break-up our export markets both in terms of products or applications that we get. But I will say something that our typical customer profile from the export market is more on the renewable side. So this includes conventional renewable as well as new renewable applications, which could be anywhere from geothermal to a small modular reactors coming down to biomass and other waste-based applications. In terms of geopolitics, in fact, we have a — as you know, we have installation in the United States.
And what we found is that some customers ask it for a greater degree of localization, but we have the capacity to be able to localize. And so very frankly, the way that we see it from a geopolitical perspective in terms of customers are asking for local sourcing, we are perfectly capable to do that. As far as our supply-chain base goes, we have a largely indigenous supply-chain base. So we’re quite agnostic to any tariff that may be put with neighboring countries, etc. So at this point in time, we feel that we’re quite agnostic to the disruption and volatility that may happen both on the climate change side because very frankly, we’re seeing very good demand coming from process cogeneration in the oil and gas market as well.
And at the same time, we do have new product introductions, which do cater to future demands for energy and future energy. So at this point, we’re reasonably diversified not only geographically, but also product-wise and application wise to be able to, what I would say sustain a level of growth that we’ve shown in the last several years. And that is our aim. Our aim is to be able to diversify enough to be able to sustain the growth because there is going to be a time of volatility in individual markets and individual market segments and applications.
Amit Anwani
Sure. So which were the new markets or export markets this quarter, you highlighted in your opening remarks?
Nikhil Sawhney
Yeah. So like I said, we don’t talk about specific markets.
Amit Anwani
Okay. So next on the US, is it possible for you to highlight what is now the total investment or expense there? And in the first leg, which kind of client is possible for you to name or which kind of capacity?
Nikhil Sawhney
For very micro details. Unfortunately, I’m not going to be able to answer that. You can take it offline with our Investor Relations manager to the extent that we are able to share. But the US is a key market for us and it’s good that you bring this up. We — this is a market that is an investment market for us at this time-being. Like I’ve said in the previous calls that we would be incurring a loss in this market in excess of about INR20 crores, which is fully factored into not only the Nine-Month results, but will be into the full-year results.
But having said that, the full-year results will show tremendous growth over FY ’24, both on-top line, bottom-line margins and we’re quite confident to be able to sustain that into the coming quarters. The business, of course, reflects the order booking that the company has. The company has had greater order booking in the aftermarket as well as export segments, which is — which is better from a margin perspective. And when we look at the US operations coming into FY ’26, like we are quite — we’re very optimistic based on not only the inquiry generation, the order flow that we’ve had within Q4 of this current year and the traction that we’ll have towards the latter half of the quarter.
So the applications would be wide. It varies from not only oil and gas, but to process co-generation, as I said, as well as into new — as well as into new markets into new renewable energy market applications.
Amit Anwani
Thank you. Sir, lastly on API turbine, any sense you would like to give on the inquiry pipeline in domestic and export markets and revenue contribution?
Nikhil Sawhney
No, sorry yeah. I think you’re asking very micro questions, which we typically do not give answers to.
Amit Anwani
No worry, sir. Thank you so much. Thanks.
Nikhil Sawhney
Thank you.
Operator
Thank you. The next question is from the line of Harshit Patel from Equirus Securities. Please go-ahead.
Harshit Patel
Thank you very much for the opportunity, sir. Sir, firstly, on the CO2-based system, the order that we have received, as you have mentioned, we will do the engineer to order turbine heat exchangers as well as the CO2 compressor, even the civil work will be in high domain, then what exactly will be done by our technology partner? So if you can just bifurcate the scope between them and us that will be very helpful.
Nikhil Sawhney
You know, unfortunately, when we’re ready to disclose those factors, we’ll do that towards the end-of-the quarter. But having said that, this is a collaboration to ultimately come out with a system which provides an alternate to lithium-ion as, as not only short-duration, but long-duration energy storage the, the partnership and the scope of work and split of that is something that’s commensurate with the value that is being brought into a project.
The details of the split exactly is something that is difficult for us to disclose at this point in time directly because we have not — we have not informed it to the exchange. And once we’re able to do that, we’ll be able to speak to all of you about it. But I would expect for you to get more information in our Q4 call and maybe prior to that. Having said that, the ambition here, as I’ve said, is to diversify our product range to have a new product to apply. Again, the ambition is to have a cost level which reaches parity with what lithium-ion is currently providing so that it can provide value to our customers at the end-of-the day. The indigital supply-chain base is something that we are quite keen on being able to develop. And ultimately, lastly is that this is something that we want to want to be able to make a mainstay as an offering of the company in the coming years.
Harshit Patel
Understood. Sure. Sir, just a small follow-up to that. This INR290 crores that is entirely our share guide from our order booking perspective?
Nikhil Sawhney
Yes, it is.
Harshit Patel
Sure. Sir, my second question is on the aftermarket.
Nikhil Sawhney
INR290 crores is valued entire contract, which is for 160 megawatt-hour CO2-based long-duration energy storage project, which includes end-to-end responsibility for not only a order placement, but synchronization to the — to the customers’ requirement.
Harshit Patel
Understood. But this INR290 crore entirely flows to our order book. Would that be right understanding?
Nikhil Sawhney
Yes.
Harshit Patel
Sure. Sir, my second question is on the aftermarket and you have highlighted quite a lot of efforts that we have made in past few years, including the expansion into South Africa into North-America, expanding our offerings towards refurbishment and other large-scale turbines as well. Despite all these efforts, the overall orders have not increased much in the first-nine months of FY ’25. So could you highlight some end-user industry pockets, geographies or product categories where there has been a slowness?
Nikhil Sawhney
So firstly, when you talk about the South African market, the largest order that we had for there was from — was from the SADC region where we were providing services or service offerings to utility customers. And what you would have noticed and I think that the company can take some credit for this is that in the entire region, the quantum of brownouts and blackouts that they’ve had have considerably reduced, which obviously lowers the quantum of orders for us, but what retails the testimony is that the value that we are providing our customer. So while the — while the quantum of orders may have come down, the value addition within the orders has gone up, which means that now we’re providing further value addition to our customers in terms of being able to do more parts business with them. But I’ll ask Mr. Sachin Parab to speak a little bit about the order booking situation in both these markets, Sachin?
Parab Sachin
Yeah. Good evening. See in South Africa, as our Vice-Chairman mentioned, our performance in the outages and running maintenance contract with the large power utility has been really appreciated by the local economy. The outages have significantly reduced and they have more than 200 days of new outage and we are happy to take credit for that. So although the quantum of order booking has gone down in FY ’25, but the mix of business that we are doing is much more value-added and we are getting better margins from that market. So that is as far as South Africa is concerned. In the United States, our inquiry book is growing and we are seeing that there is better awareness for our offerings in the US market and we are getting more inquiries, although the revenues have not yet started flowing in to the extent we would like them to, but definitely the inquiry pipeline gives us the confidence of good order booking in the coming quarters.
Harshit Patel
Thank you. Understood, sir. Thank you very much for taking my questions and all the very best. Thank you.
Nikhil Sawhney
Thank you.
Operator
Thank you. The next question is from the line of Mahesh Bendre from LIC Mutual Fund. Please go-ahead.
Mahesh Bendre
Thank you. Hi, sir, my questions have been answered. Thank you so much, sir.
Nikhil Sawhney
Thank you.
Operator
Thank you. We have the next question from the line of Amit Mahawar from UBS. Please go-ahead.
Amit Mahawar
Thank you. Hi, Nikhil. Congratulations on great results. I have two quick questions, and maybe Sachin and can chip-in and help. If I compare your entry and expansion in the SAD region where in less than five years that became more than 10% of our total business. And how is the experience and market dynamics different in the North American market considering that’s a much bigger installed-base and a huge you know, consolidation-oriented after-market. So if somebody can help us compare the two markets for us? That’s first question.
Nikhil Sawhney
So it’s a very good question because it’s a learning for the company in terms of being able to operate a industrial activity and infrastructure in different geographies. As you rightly put it, the South African market is even less than the requirement of one state in the US. So it’s a much, much, much smaller market. Also, the problems that exist here in terms of the capital stock in South Africa and then sub-Saharan in the SADC region is significantly less in terms of potential that exists. I’ll leave the capital.
So when we set-up capacity in any — both in South Africa as well as in the US now, we look at it in three forms. One is for it to be able to drive a serviceability of our current turbines in the region to generate further value addition in terms of spares and service. Secondly, and this is a more immediate result is to be able to generate a refurbishment requirement from capital assets that actually exist and sit out there in the market.
And thirdly is, is so to be closer to customers which allow for greater confidence to be able to place orders for us on the product segment. Now this is actually all three have been validated well in the — in our expansion into the SADC market. What — and we — and our current reading of the US market is similar, except the real difference in the US market and South African market is a degree of bureaucracy in terms of permits and the way that business is conducted in the two in the two geographies. The US is similar to and possibly even maybe a little bit more bureaucratic than Europe is in terms of permits, but I believe that we are well on our way to be able to secure all of those that are required, not only in terms of credentials and capacities that are required to be able to quote to customers and to be able to visit a customer and provide them with the services necessary. So that’s one.
Number two is, actually the US has turned out to be quite a dynamic market for new product — new product offerings. Again, like I ended my opening observations with was to say that we provide industrial heat and power and renewable power-based solutions. And what we’re finding in the US is they’re being extremely entrepreneurial and innovative in the applications of new industrial heat and power. And we’ve had some extremely breakthrough orders in Q4 for applications which are very novel. And I think we’d be able to disclose that during the course of our next conference call, but the market is much more dynamic. The learnings are that of course, we need to put capabilities in-place in the US because the customers are much more demanding.
It is a more competitive market in terms of third-party offers as well as OEMs, while the South African market isn’t. So it’s a little bit slower in terms of being able to gain market-share while we — what we were able to do in the South African market. But maybe, Sachin, you could provide a little bit more clarity and then Prasad, you could also add-on to what I’ve said.
Parab Sachin
So the US market, needless to say, is extremely large. As we are just making a beginning, we are learning about this market, but the initial signs are very, very encouraging. What our Vice-Chairman mentioned in terms of being a little bit bureaucratic is more to do with the certifications that we have to take first before we actually start offering our services. So these are some of the reasons why there is a delay in terms of building up the order book. But this is definitely a capability building for us. And as we gear up for the future, I think we are well-placed to take a — even if it’s a small pie of the large market, it would be significantly bigger than the business that we are doing in the US besides having our own workshop facility gives the confidence to our customers for new products that these are players who are there for the long-term, well-entrenched, getting well-entrenched into the market and there to support them 24 hours. That’s the philosophy of service and our key differentiator that we have been offering in the Indian market that we are taking also to these.
Amit Mahawar
Yeah. Thank you, Sachin. And the second and last question, Nikhil, is if I see the run-rate and straight away talk about numbers, the nine and this year run-rate product is a sorted thing. We have a large contract which will report in Q4, which already announced over MTPC. Services seems to be a flat number after a very strong momentum in last two to three years as we entered global markets. Our market-share might still be less than 6%, 7% globally on services. And please correct me if I’m wrong. Is fiscal ’26, ’27 is the year of inflection again for services, particularly on the new market, be it US, North-America or SADC or do you think I’m slightly early in my comment, you know that ’26, ’27 might not be the inflection year? And again, Mr can chip-in and help.
Nikhil Sawhney
Thanks. Thank you. Yeah. So firstly, actually, the aftermarket is a very good — very big growth segment for us, including this current year. While we don’t break-down our contribution in the aftermarket coming from the SADC order, that because it’s come down in value — because it is lower-margin as well is impacting overall order booking. But having said that, we — the aftermarket segment is a growth segment for us. It will grow to faster than our product growth segments. And so we’re actually very bullish on that market. Prasal, do you want to provide a little bit of clarity to Amit about how you’re viewing aftermarket as a full segment, including refurbishment.
S Narayana Prasad
Yeah. So aftermarket wise, what we are seeing as our Vice-Chairman mentioned and Pachin also mentioned, so we are seeing now the traction whatever the inquiry pipeline is basically for our repo the inquiry pipeline has increased and at a considerable amount. So new geographies also, new service offerings, what we are proposing to the customer. So that way what we are seeing is, yes, aftermarket today, whatever the market just be tapped, it is not a small, small miniscule percentage of the overall market. But okay, aftermarket country-wise, region-wise has its own challenges. But as Sachin mentioned that as we are building the capabilities going-forward, yes, the pipeline is a strong pipeline we have, we will be able to do much, much better than what we are anticipating as on today.
Nikhil Sawhney
So Amit, you said that we may have a 6% odd market-share in our reading of the market in terms of — which includes both product, which includes both parts and services for the entire steam market. Forget about the fact that in our refurbishment, we cater to other rotating equipments as well would definitely not be 5% or 6%. In my opinion, it would be anywhere between 0.5% to 1%.
Amit Mahawar
Okay. Okay, that’s very helpful, Nikhil. Can I just add one small question, a bookkeeping one, if you allow.
Nikhil Sawhney
Yes, please.
Amit Mahawar
What is the plan for, you know hiring for service network people in ’25 and ’26, especially outside India?
Nikhil Sawhney
So you bring up a good question about — so our entire workforce now has grown by, I would say, about 100% over the course of the last three, four years. And we continue to be a growth company. We want to be the preferred employer for technical staff coming out of top-flung engineering schools for R&D and engineering applications, but equally so from the service side that we need people to be able to be flexible — to have the right attitude. In servicing, it’s a question of having the right attitude to be customer-oriented, to be able to work with the customer not only on our product, but to be able to solve this problem. And so we are always in the lookout for the most stable and capable service engineers and our demand for service engineers is unlimited.
Amit Mahawar
Okay, okay. But will we add like is there a number you know you can throw to us?
Nikhil Sawhney
Like I said, the demand is unlimited, so the fact is the issue is really finding capable and competent service engineers who can cater to our requirements and obviously within the price points that work for us. So actually the number of service engineers that we may wish to employ over the next several years will be in the hundreds.
Amit Mahawar
Okay, sure. Thank you, Nikhil, and good luck to the team. Thank you.
Nikhil Sawhney
Thank you.
Operator
Thank you. [Operator Instructions] We have the next question from the line of B Nandu from Public Alternatives. Please go-ahead.
Prolin Nandu
Yeah. Hi, Nikhil. Thank you for taking my question. Two questions from my side, right. One is, you know, on this overall transition towards sustainable energy, right, given whatever we hear on macro and you know, some of the energy prices also easing out in one of your key markets of Europe, right? Are you seeing any reduction in focus for some of these alternate channels to generate energy like waste to heat, waste-to-energy, biomass, is that what you are sensing? And is that something which is impacting your order book or inquiry?
Nikhil Sawhney
No, actually no because in this segment of steam and steam-based renewable, largely when you look at renewable steam-based power project, the constraint is the availability of the waste. You know, it could be waste-heat, it could be waste biomass, could be waste, municipal waste, variety. And so as long as that waste exists and can be accumulated, it actually always makes economic sense to do so, regardless of the orientation and exposure towards a decarbonization.
And I’ll give you an example of this. For example, in municipal waste exists, it has other externalities in terms of for a municipality to not to not process that waste. If you — and similarly on waste-heat, if you have waste-heat with the current cost-of-capital being high and energy prices being high, it makes economic sense for people to utilize that waste street to generate power. So there’s a — so as long as the waste exists and can be accumulated, it actually makes sense for you to go about doing it. And so we’re not really seeing a decline in it.
We’re not seeing a huge spurt in it either. What we have seen is a — and what we’ve maintained over the course of the last couple of years is a growth in the API market, which is now forming quite a mainstay of our order booking. We believe that oil and gas investments both on efficiency as well as capacity expansions are here to stay. But this has been a long journey for the company to be able to provide solutions here, but it doesn’t take-away our focus from being able to provide renewable energy-based solutions either. So we’re a solutions-based company which provides industrial heat and power and renewable energy offerings.
So in general, the markets are a little choppy in terms of where the demand is coming from geographically, but also in terms of applications. But we think normalized over the course of a year in the next couple of years, renewable energy will continue to maintain a strong majority of our order booking because of the fact of economics rather than subsidies.
Prolin Nandu
Okay. Sure, that’s very encouraging to hear. The second and the last question would be, again, if I look at three, four years, right, we have made significant progress in new products or new solution that we offer, right? It may be 30 to 100 megawatt categories or API. Now we are talking about also CO2. So let’s say, if we think about next couple of years, which is FY ’26 and FY ’27, would there — would these be years to ramp-up some of these white space which we have filled or you see enough opportunity to enter some of the white spaces beyond something which you have already announced, right, or you have already ventured into, how should one think about the next two years from these opportunity perspective?
Nikhil Sawhney
You know, so some of these are mature markets and some are not mature markets. So for example, 30 to 100 megawatts is a mature market, CO2 turbines is not a mature market. And so the different approaches to those because there is no consistent demand in certain areas — in certain segments, unless you’re able to prove your value proposition. So we are a little bit more cautious to be able to prove value our value proposition with — before customers before we can actually say that it is a distinct market segment in which we wish to spend a lot of time and money on.
We’re confident on the engineering and the economics what it points to, but ultimately, as you would know in the industrial space, branding only happens when you’re able to show successful installations. So that is the way that we look at it. Now as far as the different market segments for turbine go, we believe that the next several years will be quite volatile. And given that, we believe that the diversification that we have not only in terms of small turbines, process cogeneration turbines as well as viewable energy-based turbines, larger 30 megawatt plus turbines, API-based turbines and growth from our aftermarket will only aid the diversification that we have in our CO2.
So even if we leave the CO2 out for the time-being, we see enough growth within our diversification of our historic markets to be able to sustain the growth. As an industrial company, what we are most cautious of is to be able to have a trouble-free installations for our customers. And so the growth has to be moderated to the extent that you’re able to execute and execute successfully. And we believe that the growth rate that we’ve exhibited in the last several years is a type of ambition that we should maintain going-forward with our current product profile because that is something that we’re confident that we’d be able to achieve customer satisfaction on. And that is what’s most important is to be able to sustain the growth rather than for us to have any failures.
Prolin Nandu
Great. Thank you so much for answering that question and all the very best.
Nikhil Sawhney
Thank you.
Operator
Thank you. The next question is from the line of Bimal, an Individual investor. Please go-ahead.
Unidentified Participant
Yeah, good evening, management team. So two questions. One is now with US, we have some six months, one year experience and also this new segment of CO2 coming up. So I mean, capex, earlier we used to have very less about INR30 crores INR40 crores per year. Now will our capex go up or what is the.
Nikhil Sawhney
Yes, yes. So actually that’s a very good question. In fact, given the expansion that we’ve had in our order booking, what we had forecast for us to — for what we had forecast in terms of the capacity that we have in terms of assembly and manufacturing in Bangalore will need to be augmented. I’ll ask Sachin Parab to speak a little bit about what that would mean in terms of an additional bay. But you already have an idea of the costing of what we’ve done in terms of previous expansion. But we will be investing, as I’ve said further on more R&D infrastructure. So there are two components to R&D expenditure.
One is operating expenditure for people and softwares and other continuing expenditures. But the other is capital investment that is required for testing infrastructure, which we believe does not exist at — in any meaningful manner in India. And we think that for us to go-forward, we need to indigenize these capabilities. And so both of these — so not only the capacity — so not only would we have the capex in terms of capacity expansion, but also for this R&D expenditure over and above what we’ve already spent for the US operations and I believe that we provide more clarity, but it would be more than a historic INR30 crores of capex, but it is well within a range of — somewhere in the region of, I would say INR120 crores to INR150 crores over the next couple of years.
Parab Sachin
Okay. And yeah, just to add to the — sorry, just to add to our voice point, we are expanding our modern facility with an additional base. We should be setting up test beds for R&D and for testing of our new product range. Besides, we are increasing our expenditure on R&D, both in terms of manpower and the software and of course, the physical infrastructure, also to cater to the increased volume of our business.
Unidentified Participant
Thank you. So we had four bays which were operational in Sompura and we had placed for another, I think, two or three days. So are we going to activate those new two, three base.
Nikhil Sawhney
So one more bay will come up now.
Unidentified Participant
Okay. So still — and we are looking to add land because for future expansion.
Nikhil Sawhney
No, we don’t need land. We had some expenditure to change our current land in Sampura to freehold. That’s already been part of our capex for the year.
Unidentified Participant
Okay. And last is this with this exchange rate depreciation, how are we affected positively or there is something to?
Nikhil Sawhney
No, it is positive. There has been some mark-to-market gains already in this quarter. We’ve run a hedging policy, which is pretty much hedged. So given the fact that we have more exports as a percentage of turnover, which are dollar-based, the company will only benefit going-forward because there’s been a rapid depreciation of the rupee. But the fact is that those will all come as benefits going-forward. We’re quite confident of our hedging policy of the way that we sit right now. And it — on a quarter-to-quarter basis on a mark-to-market, there may be adjustments because we’ve done a pretty much hedged book. But if you look at on a year-to-year basis, it will add to income only for the company and other income.
Unidentified Participant
Right. Thank you. Thank you very much.
Nikhil Sawhney
Thank you.
Operator
Thank you. The next question is from the line of Chirag Muchala from Centrum Broking. Please go-ahead.
Chirag Muchhala
Yes, sir, thank you for my — for this opportunity. So first question is on domestic market. So sir, what would be the domestic market size in megawatt terms currently? And so — and also some color on the competitive intensity. So considering that we have really broad-based our products and offerings in international markets, both for aftermarket and turbines. So I mean, are we letting go off some less profitable orders in domestic market? What is our current market-share in domestic market? If you can elaborate that a bit.
Nikhil Sawhney
Yeah, our current market-share in the domestic market would be somewhere around 50%. That’s why we’ve typically maintained and for the nine months period, which we’d be somewhere there only. Certain market segments, but you’re right, because the entire market has come down in terms of required demand. And in fact, we’ve seen a degrowth in the market for the nine months period from the previous year. The competitive intensity has gone up. And what happens with that competitive intensity up is typically with the largest player in the global market as well.
There is the — there is a very healthy competition, very intense competition, as you would understand. We believe that pricing really isn’t the best way to compete. So very frankly, when it comes down — it comes to price competition, we may back-off at times because there are other attributes that are — that are value-additive to a customer, be it in terms of services or the other peripheral investments that he makes. So competition based on price is really not what we think is the best competition. The market, like I said, has come down and as pointed out, and given the fact that we’ve seen quite a robust inquiry book growth that we think Q4 may be better.
But having said that, the general sentiment as I’m seeing right now from the budget, et-cetera, it doesn’t mean that we’re suddenly going to go back to a growth rate, which is going to be rapid. You have to keep in mind that Q4 of last year of FY ’24 was a weak quarter. It is a weak quarter given the fact that elections were just around the corner. So even if there is a rapid growth in Q4 of this year, you really do need to look at it in a year — like a full-year to full-year rather than look at Q4 to Q4. I just caution you on that before you think that there’s a rapid growth in the domestic market.
Chirag Muchhala
That’s correct, sir. So thanks for that. And is it possible to give in megawatt tons either for zero to 30 or zero to 100, whatever you feel?
Nikhil Sawhney
I don’t have that with me right now, but I think you could take that offline and get it from our Investor Relations contact.
Chirag Muchhala
Sure, sure. And the second is on this super — sorry, CO2 turbine order that we received from NTPC. So sir, if I recall correctly, in last quarter also, you had mentioned that you also had a 20 megawatt order from Italy, if I’m not wrong. So that is correct, sir.
Nikhil Sawhney
Same configuration. Same configuration.
Chirag Muchhala
Yeah. So sir, was that also equally large a three-digit order or we had.
Nikhil Sawhney
That was only for the — that was only for the turbine. And so this includes the turbine plus all peripherals and other value-add. We think that there’s a lot more to be done when you provide a solution to a client. Now we have to be able to execute this along with our partners and to come up with a coherent value proposition. Again, as you would understand that the real value proposition for long-duration energy storage is versus pumped hydro and certain flow batteries as well as lithium-ion. And so unless we can achieve a cost parity for a customer here to be able for him to have confidence, these will be niche products. So the point here is to be able to rationalize costs so that it can become a mainstream product and not niche.
Chirag Muchhala
Correct, sir. So sir, what would be the CO2 turbine product itself in the entire you know, I mean product.
Nikhil Sawhney
We don’t give that breakup in terms of value. Okay, but suffice to say that it is technically a very meaningful component to the entire to the entire scheme.
Chirag Muchhala
Okay. And sir, last question on that topic. So I understand that this is globally also still in developmental phase with very, very limited companies having the CO2 turbines. So how should we look at — should we look at it in the sense that the couple of initial orders that we have received since this is in developmental phase, so once over an 18-month period, we executed and then the performance is tested and then should we expect a meaningful orders or decisions to be made in terms of ramp-up of this field or should we expect.
Nikhil Sawhney
Yeah, let’s have this conversation next quarter. The reason is a couple of things. One is that we would have greater confidence in the performance of our own turbine, which would — which like you said, we exported to Italy and that performance would be known as well as the fact that we’ll have greater clarity in terms of where this would go in terms of our conversation that we’re having with different market participants. So right now what I can say is that we were compelled in a sense to disclose this to the exchanges because of the meaningful nature as a material transaction.
But I would be happier to have had this discussion at the end of Q4 where we would be able to provide greater clarity on the thought behind this market for us. But suffice to say that this provides another avenue for diversification to be able to sustain growth. That is why I think that is the best. Is it going to become a really big game-changer? I think it’s a little premature for us to be able to say that. But as far as the company goes and for this business segment to allow us to grow our top-line and bottom-line, I think we would — even without this, we have a good growth path.
Chirag Muchhala
Sure, sir, sure. So no doubt, no problem. Next quarter, we’ll discuss this more. Thank you.
Nikhil Sawhney
Sure. Yeah. Thanks.
Operator
Thank you. Thank you. Ladies and gentlemen, we will now take the last question, which will be from the line of Shreyan Gatani from SG Securities. Please go-ahead.
Unidentified Participant
Hi, good evening. I just had a question just following-up on the CO2 turbine. So just wanted to know what is the current cost parity versus lithium-ion like as we see lithium-ion capacity.
Nikhil Sawhney
Current cost is somewhere in the region of about $200,000 a megawatt-hour. Our tent would be to get this to somewhere in the region of about $120,000 to $125,000 per megawatt-hour.
Unidentified Participant
Okay. Okay. Okay. So is this — so $200,000 is the $290 crore order that you have that’s executed at that point or?
Nikhil Sawhney
Yes. Okay, okay.
Unidentified Participant
And so just trying to understand what’s the difference in terms of lifetime versus the lithium-ion battery.
Nikhil Sawhney
So this is a 30-year product, a 35-year product operating costs are at minimal? Minimal. Got it. The main thing is that it has a long — it doesn’t have degradation over a long-duration long-duration. But I think technically as well as market-wise, we’d be able to give you more clarity later. I think the point is that this complements our entire research into the area of carbon dioxide, which we think is going to be money well spent for us in terms of not only being able to develop a carbon dio — subcritical carbon dioxide-based product, but also supercritical and transcritical.
Those will also have successes in the coming quarters and years, which will open up newer markets and applications to us. Sriveni turbine is quite keen to be able to deliver value, but the technology landscape is changing very rapidly and cost points are changing very rapidly. So unless we can provide the value to our customers, which happens over with new offerings and newer solutions, I don’t think that we’d be relevant as a company. So we want to stay up the value chain, be able to provide technological solutions. So even here, I think that there are two, three aspects to it.
One is to be able to provide a solution for long-duration energy storage, which is a separate application by itself from battery storage. And then within that you have to be able to provide the cost point versus the comparative that exists. And then you have to look at the supply-chain resources to be able to scale it. So I think we take a lot of those boxes currently with this offering, and we’re quite confident of it becoming meaningful in the medium term. I think that like I said, let us work on it a little bit more, and then we get back. But this doesn’t take away our focus on the steam side. This steam is a main state for the company. We think that there is enormous potential for us to not only capture market share but to expand and grow our offerings. So I think that we’re straddling both to newer technologies and newer product introductions along with a legacy market, which by itself is we’re looking to expand markets and expand applications and also our services along with those products.
Unidentified Participant
Perfect. That’s all from my end. Thank you. Thank you very much.
Operator
Thank you. I would now like to hand the conference over to Mr Nikhil Soni for closing comments. Over to you, sir.
Nikhil Sawhney
Thank you very much. Thank you, ladies and gentlemen, for joining our nine months Q3 FY ’25 conference call. I look-forward to speaking to you again in May for our full-year FY ’25 results. Again, the company is very well-poised for us to have again another record quarter and we look-forward to joining us then. Thank you.
Operator
[Operator Closing Remarks]