This conference is being recorded. Before we begin, I would like to point out that this conference call will contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectation of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. I now hand the conference over to Mr. Nikhil Kumar, Managing Director of TD Power Systems Limited. Thank you, over to you, sir.
Thank you. Good morning, everybody. Thank you once again for joining us today on our earnings call. I trust all of you would have received our results and investor presentation. I'd like to move on to discuss with you the financial performance for nine months ending 31st December, 2025. Standalone. Our total income for nine months on standalone basis was INR 11.94 billion versus INR 9.02 billion over the same period in the previous year, an increase of 32%. EBITDA for nine months is 18.60%, including other income, excluding exceptional treasury income, versus 17.45% over the same period in the previous year.
Profit after tax and comprehensive income for nine months is INR 1.45 billion, versus the profit of INR 1.09 billion over the same period in the previous year, an increase of 41%. The order book for the manufacturing segment is INR 18.45 billion, out of which INR 15.6 billion is the manufacturing business, INR 2.85 billion is the railway business. INR 2.85 billion railway business is further divided into INR 1.87 billion, which is the Indian locomotive business, INR 0.98 billion would be the new orders. Sales aftermarket is INR 0.1 billion, INR 0.72 billion is the turnkey business. Exports and deemed exports excluding railway orders on the pending order basis is 75%.
Order inflow during the quarter is INR 6.56 billion, an all-time record, an increase of 61% on a Q1 to date basis. Export order inflow, including deemed export during the quarter, is 84% at INR 5.1 billion. Nine months order inflow from direct and deemed exports is INR 12.05 billion compared to INR 7.52 billion in the previous year, a growth of 52%. 79% of our nine-month order inflow is exports and only 21% is domestic. We would like to point out that the growth in the pending order for nine months at FY 2026 for generators and motors excluding railways, the growth is 54% compared to nine months FY 2025 and 1.2% from nine months FY 2024.
This shows that the pending order has more than doubled in the past 24 months. Consolidated. Our total income for nine months period on a consolidated is INR 12.8 billion versus INR 9.43 billion, increased by 36%. Profit after tax and other comprehensive income for nine months is INR 1.66 billion versus profit of INR 1.21 billion, increased to 37%. We continue to maintain a strong cash position of INR 1.96 billion. Coming to market conditions and guidance. The market conditions continue to be very strong for TDPS in all segments of the business. The gas turbine and gas engine business continues to be the strongest segment with the highest growth and the highest growth potential in the years to come.
Before going on to the individual segments, I'd like to add a few words about our third plant and capacity. In the past two quarters, we have achieved the sales of around INR 450 crores per quarter, which is around INR 1,800 crores on an annualized basis. This shows that we have really pushed our capacity utilization towards levels beyond what we expected. We declared our third plant as operational on 18th December, so we really have not felt the impact of this new capacity on our sales. We have already seen increases in the factory expenses in Q3 due to additions of manpower, but also in other areas of existing plants to support the higher productions that will follow in Q4 and quarters to come.
We also had some one-off shifting charges in Q3 while we shifted some critical machinery like robots from our existing units to the new factory. In Q4, we'll ramp up to INR 550-INR 575 crores per quarter production and sales, and then move on to around INR 600 crores per quarter in Q1 onwards. This will be in line with the expected order inflow that is sitting in the pipeline. We have started a number of activities to further make our production more efficient, and we will not add bulk capacity for sales up to FY 2028. However, investment will take place for two pole generator production and for motors, which will be a major growth area for the company in FY 2028 onwards. Meanwhile, we continue to invest in automation and lean manufacturing. Now let me go through the segments one by one.
Indian steam turbines, the market continues to grow at the rate that we mentioned a little earlier, with no surprises on upside or downside. The market is steady with around 10% growth taking place in the captive power plant business, biomass, and waste heat recovery. The export market pattern is also strong, and overall, we're expecting a 20% growth in steam turbine market. We're getting steam turbine orders from all over the world, and demand is steady. Gas engines, generators, and gas turbine generators. The demand is focused in Europe and U.S. Seem to be very, very high and experiencing a big uptake of orders. There's an increasing trend for all data centers to use only captive power and not be grid dependent.
The huge power consumption of grid power by data centers has increased grid power prices, and this is the reason for data centers to move towards having their own power. This increases the opportunity size for TDPS. The forecast given to us by a brand new world customer shows a huge increase year-on-year until 2030, and the demand is not only coming from data centers. This demand is also forecast to come from grid stabilization, internal condensing and other applications. This is a real demand and this is also good from a risk spreading perspective. In other words, we are not being dependent on a single market and a single segment to drive our growth. Hydro, we have achieved excellent order inflow in the segment, and next year will be the highest in the history of the company for hydro.
In particular, TDPS is very active in the refurbishment business in India and abroad. This segment is growing and will become a large vertical for TDPS within hydro. Our motor business is growing in great dimension earlier this year. We should be on track to achieve around INR 150 crore top line. The number of orders in the pipeline for synchronous motors, induction motors, and export for all types of motors, in particular, the number of orders in synchronous motor segments that will be finalized very shortly. Railways, we have orders in the U.S. market, Europe market, and Russia market. We will be supplying all three markets next year and if one includes India, then four markets.
General guidance, we will cross INR 1,800 crore this financial year, and we give an upward guidance for FY 2027 at INR 2,200 crore plus growth, which is a conservative guidance based on the ramp-up of the order booking that we are seeing, which is around INR 575 crore to INR 600 crore per quarter. We see an extremely high probability to increase our guidance further. This brings me to the end of my initial remarks. I will be now happy to answer your questions. Thank you.
Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on your touchtone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Ganeshram with Unifi Capital. Please go ahead.
Thank you, Nikhil, and congratulations on the results. I have two questions. The first question is generally, what is happening in the domestic market? Do we have any capacity constraints? Are we being selective with orders or do we expect any large orders to be finalized in the coming quarters? Just in context of the sequential movement of domestic orders downwards. Just trying to understand that portion.
I'll ask my colleague, Vinay Hegde, who is attending with me to answer this question.
Yeah, hi. Vinay here. Are you able to hear me?
Yeah. Vinay, go ahead, please.
Domestic sector, as Nikhil told in the beginning, we are expecting a moderate growth of 10%-12%. Sizes of the machines are on the bigger side, beyond 20 MW, 25 MW. We are expecting some number of orders in the steam turbine segment, from steam plants, mainly from the steel industry. Also the hydro segment in India is opening up, and we are already seeing good order input from the hydro segment from the Indian market as well. As we said, the two major segments for us in India is mainly the steam turbine and the hydro turbine. Both the segments are doing moderate. We would say that around 10%-12% growth year-over-year.
We are not losing any orders because of capacity or we are not turning away any orders. Whatever business that is there in the market, we are taking, and we are accepting all the business from the domestic market.
That is very clear. Just if you could clarify this, there was some news a few weeks back that there might be some relaxations on Chinese equipment coming to India. Would there be any impact to the segment from that or it is too early to say?
In the captive power plant business, up to 100 MW, we do not see any impact of any Chinese equipment coming into the country. They can come into the country even now. There are no restrictions for Chinese equipment to come into the country even now. There are no special import licenses or anything required. They can come in even now.
Okay, Nikhil, that's very clear. The second is just on the bookkeeping side. If you could help us understand with the new facility coming in and a ramp-up to 600 crores per quarter, what would be the incremental overheads that it'll incur? In terms of how the commodities basket has been moving, if you could just refresh how we are sort of dealing with that and if you're seeing any cost pressures and how you mitigate that.
Yes. Most of the increase in cost for the new plant we're seeing already, most of it already coming into Q3. We don't expect a dramatic increase taking place from this point onwards in Q4. There could be further increases, not to the extent that we've seen in Q3. You could take another 5% increase on the costs that we've taken, really the 5% increase what we've seen already. Coming to the second question, commodity prices. Copper prices have gone up drastically. We are renegotiating all our prices with all our customers, and we will ensure that we pass on this by price increases or cost increases to our customers. We have absolutely no problem in getting the price increases what we need.
In the meanwhile, whatever copper that we have in the pipeline should insulate us for some time, after that the cost increase, price increases will kick in and those will cover the costs.
Got it. Last question, if I may, is just any updates on what customers are saying with the U.S. tariff situation staying where it is over the last two quarters? I know you've clarified this multiple times, but just to stay updated on if there is any change that we should be aware of.
No, I think people are disappointed that there's no India-U.S. trade deal. People have more or less resigned themselves to the fact that there's probably not going to be a trade deal. None of our customers right now are insisting that we move our production to Turkey just because of the additional risk perception or/and also the extra lead time that's required. Right now everything is being produced out of India and delivered out of India, and we're getting our order inflows that we're seeing right now. There's no stoppage, there's no letup, there's no hesitation. It's going at full swing.
Okay, Nikhil. Thank you very much and good luck.
Thank you.
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants, please limit your questions to two per participant. The next question comes from the line of Mohit Surana with Monarch Networth Capital. Please go ahead.
Thank you for the opportunity. First of all, congratulations on the great set of numbers. My first question is with respect to the global demand for gas turbines and gas engines. As you mentioned and also confirmed by various news flow, it remains very strong and fair to say until 2030 we have good visibility. On those lines, is it fair to say that our guidance of INR 220 crores for FY 2027, that could be on the conservative side?
I mentioned that already during the opening speech that this is a conservative guidance.
Okay.
This is a guidance of INR 2,200 crores. I also hinted that, not hinted, it's pretty obvious that I said that we expected quarterly inflows into something in the region of INR 575 crores to INR 600 crores, and the production rate would be matching that order inflow. That's what we would broadly expect the numbers to be next year. Further upside potential, whatever is there, that's in the second half of the year, then we will be happy to ask for the real upside. Right now we're saying INR 2,200 crores plus, and that's a conservative estimate. Yes, your question is correct.
Understood, sir. Just one more question. Have there been any new customer addition, I mean, apart from the already set of customers that we have, the global OEMs? This time we have got a couple of marquee breakthrough orders. Just wanted to understand how big these can be in the future.
Yeah. We do have one customer acquisition, which is in the U.S. market for gas turbines. Which is right now in the engineering order phase. They're doing the engineering, we present presentation also, which will be converted into a machine order in the next couple of weeks, there's a big program that they have for next year. We can't name the customer, but we are very close to acquiring a big new customer in the U.S. market.
Understood, sir. That's very helpful. That's all from my end.
Thank you. The next question comes from the line of Garvit Goel with Serene Alpha. Please go ahead.
Hi. I'm I audible?
Yes.
Congrats for the good set of numbers, sir. Just one question in reference to the earlier participant. Like all commodities are firing, and you also mentioned you will be trying to renegotiate the prices with end customers. How should we interpret it? Like, will it take some time and maybe for near term, we can expect a little bit pressure on our margins, sir?
No, because we have a certain pipeline of booked copper at lower prices. Those will be consumed. By the time we consume it, we will have.
Sorry, what is not clear, sir. Sorry.
Yeah. I just said that. I said, no, we have a certain pipeline of previously booked copper at lower prices. By the time that's fully consumed, we expect new prices to kick in.
Understood. Sir, secondly, on the domestic side, the EPT you have mentioned, there is a big demand that you are anticipating in the domestic market from the hydro segment, sir. Can you put some color on that, like what is driving this demand? What kind of structural changes are taking place? How long do you see this kind of visibility in the market for the hydro segment?
I'll hand over this question to my colleague, Vinay.
Hydro segment was not very active for the last four or five years. Mainly when I say hydro segment, there were investments happening on the large hydro. As you know, we are in the small hydro segment that is up to 45 MW. We have recently got a couple of orders. Also now we are focusing on the refurbishment market, and there are some government jobs coming up. In the last quarter, we have received one big order for the refurbishment business, and also there are a couple of tenders. That is why I said in the domestic market, the hydro segment is also picking up.
There's a good visibility at least for the next two, three years in the hydro segment because these projects can be long gestation projects, and there are now a large number of inquiries in the pipeline. I am not worried about the sustainability of the hydro order inflow at all.
Got it. When compared with the turbines, when compared with the data center demand, what kind of margin profile difference do we generally see in the hydro segment?
Generally, we talk about a margin profile across all products being approximately the same. But of course, when we are dealing with foreign currencies in the current environment, with either dollar or with euro, we do see upside potential in margins due to the depreciation of the rupee. In the current situation, in the case of euro, it's been quite extreme. It's very positive for the company. We will see those numbers flowing into the bottom line from Q4 itself, and definitely the major extent in Q1. The dollar also has moved to 91, 92. That also really benefits, helps us in the bottom line. That would be the big difference on the margin profile, let's say, between rupee-based order and Forex-based orders.
Got it, sir. That's it from my side, sir, and all the best for the future. Thank you.
Thank you.
The next question comes from the line of Kiran with Table Tree Capital. Please go ahead.
Thank you for the opportunity. Many congratulations on a great set of results and revised outlook, sir. A couple of questions from my side. There has been a massive talk in the U.S. around slowing down AI investments, not getting enough return on AI investments. Obviously, power is basically the infrastructure that drives all these investments. Just wanted to kind of get your sense on the commentary that's going on in the U.S. around AI investments per se, vis-à-vis what you are seeing on the power sector for the next two, three years. I mean, do they continue? Are you seeing any slowdown because these orders are long-dated as well. Any slowdown that you see in the two, three-year time frame from an order book perspective?
Absolutely not. Absolutely not.
Okay.
I don't know how else to answer this question.
Got it. Got it. You are seeing only acceleration in terms of getting the power thing getting done, and the AI investment slowdown.
Yes.
Upwards through the value chain. Is that how I should understand?
I don't see any slowdown in any AI investments taking place. I don't know where this information is coming from. As far as I know, all the tech companies have increased their AI spending. Nobody's cutting it down. Yesterday, you might have seen the Microsoft results and seen the massive spend that they have on AI. Of course, the reaction from the market may not be very positive to what they're doing, but they're spending. In the end, that's what matters.
Got it. This is, I should think of this as slightly longer term than any immediate quantum bump up in orders.
Yeah, look, just a few minutes earlier, another investor had said that there's a clear demand situation after 2030. I fully agree with that. There is a clear demand profile, a demand situation forecast, a firm forecast from our OEM up to 2030. This trend or this backlog what they're seeing, what the way the market is seeing backlog on the prime mover side, turbine side and engine side is growing up to 2030. That's a good visibility that we have right now, four years. More than that, I don't think anyone can expect in the capital goods business.
Got it, sir. Second question, sir, is around on the copper pricing. I'm sure other investors will also ask. Should we look that our existing copper inventory will help us sustain these margins and any new orders that we book from here on will have new copper pricing incorporated and therefore no hit to margins?
I think I've answered that question a number of times already, twice already. I think I will stick to my earlier answer. Obviously, all new orders will go to the new prices.
Got it.
We will renegotiate. We are renegotiating with all our customers.
Got it. Sir, any last update on motors, how the traction is happening? Is there any increased traction or it is continuing as it is?
It is continuing not at an exceptional rate. It is continuing at the rate that we have earlier projected. As I mentioned last earnings call also, and I am again repeating it right now, the entire company is highly occupied with dealing with the massive increase in the generator business. It is not just data center business, it is across the board. We have a number of new products in the pipeline. We are also acquiring new customers, developing new products for customers. Capacities are fully booked in this part of the business right now, and it is delivering high growth. We are focusing more on the generator business right now. We have not completely forgotten about the motor business, but it is not having the same priority at the moment. It will grow, but it is not going to grow at some exceptional rate. Maybe 10%-15% per year from now on.
Got it. Thank you so much, sir, for the answer.
Thank you. The next question comes from the line of Piyush with Sundaram Alternates. Please go ahead.
Hi, sir. Thank you for the opportunity and congrats for a good set of numbers. We have been hearing some of our customers talking about capacity additions even beyond FY 2028 till FY 2030. Any plans do we have to further expand our capacities?
I mentioned this in my opening remarks that we will flog our existing assets until FY 2028 and if we have to add new capacity, we have more than adequate land in our current plant. We can duplicate our investments once again. I will take that call if we have to make any bulk investment. I'll take that call sometime next year around this time.
Sure, sir. Thank you, sir. That's it from my side. Thank you.
The next question comes from the line of Rohit with iThought PMS. Please go ahead.
Hi, good morning. Good afternoon, Nikhil. Congratulations on the stellar quarter. Just most of the questions have been already answered. I just wanted to understand from you about the railway business. Both in India and I think we also won something outside India and I think a few years back you had talked about it also. I just wanted to get your sense about how, is that a decent opportunity outside India and also in India, what is happening? Because I saw you did win something directly, but it's been a bit slow. If you can just give an update on that.
I think it's going at whatever rate that we said it's going to happen earlier. Earlier we said that this Indian railway contract is going to expire by FY 2028, and it's going to expire. Then it's going to be replaced by some export contract. Those export contracts we already have started getting orders. At the moment, we see a transition moving from the Indian business to the export business, but there's going to be no massive growth taking place in this segment. We will have a steady state situation for the next few years over here.
Okay. In the export business, is there an opportunity to get other customers also beyond what we have?
Opportunities are there. We're not pursuing.
Okay.
Railway business, locomotive business from that perspective. There are very limited opportunities because most railway manufacturers, locomotive manufacturers make their own motors. Because the motor is a very integral part of the entire drive system.
Right.
There are limited opportunities. I would say that we're not focusing on that right now. What we have on hand is what we're executing. As I said, we have a steady state situation for the next couple of years. After that, we will see.
Got it. Okay. I think this.
Mr. Rohit, I would request you to please come back in the queue for further questions.
Okay. Thank you.
Thank you. The next question comes from the line of Salil Desai with Marcellus Investment Managers. Please go ahead.
Hi, Nikhil. Nikhil, one question following up from what you were responding on the railways business. In this quarter's presentation, you have split the railway business into something called as a new railway business. What exactly is this?
Varalakshmi will explain.
We just split the entire railway orders of INR 2.85 billion because we always kept telling this year some order that we have from the Indian market will close in 2027, 2028. We wanted to tell the market what is the balance in that and what is the new orders that we got in this segment.
This would be domestic, I assume, right? The new business and the railways.
INR 1.87 is domestic. INR 1.87 is domestic. The rest is export.
Understood. Thanks. Secondly, again, one clarification on refurbishment. This I'm assuming is agnostic of who the original equipment supplier was, right? Or are you doing it just for TD Power or OEMs that you worked with earlier?
No, it is totally agnostic.
Okay, got it. Thank you.
Thank you. The next question comes from the line of Ganeshr am with Unifi Capital. Please go ahead.
Thank you. I think we've understood the existing parts fairly well. I just wanted to talk a little bit more about medium to longer term, the new initiatives. The 20, 40, and up to 100 MW generators and the motors business. If you could just give us a sense as to how they're progressing, any shipments done in the 20 MW now, and how the motors business you're thinking of will shape in the next two to three years.
I think I already answered the question on the motor business.
Oh, yeah. Okay.
Yeah. On the larger generator business, we are delivering the first unit this month and they will go through some testing. I've always maintained that we need to ramp up with this business in calendar 2027, and we still stick to that schedule.
Okay, Nikhil. Just on FX, how far out are we hedged right now?
Sorry?
How far?
How far out are we hedged?
We hedge only.
Very small volumes.
Very small volumes.
10% of our business.
Okay, got it. Thank you.
We took a conscious decision to stop hedging about six months ago because we were seeing a rapid depreciation of the Indian rupee, and we decided to stop hedging, and that was a correct decision because we were locked in rates that are The spot rates have now gone way below that. It was the correct decision that we took to stop, and I think we're going to see the big benefit coming in from that.
Yeah. The rate's going, absolutely yes. Last, if you have the data, in the order info that you're getting now of INR 650 odd crores, would you know by any chance how much of this would be data center driven?
No, we're not going to get that information, Ganesh.
Okay. Understood. That is fair. Thank you, Nikhil.
Yeah.
Thank you. The next question comes from the line of Ankur Kumar with Alpha Capital. Please go ahead.
Hello, sir. Thank you for getting my question. Sir, given our new capacity is coming, what will be our peak revenue after that capacity comes?
Yeah, it's a really good question. I generally mention we're not going to make any bulk investments until FY 2028. I think somewhere between INR 2,600 crore-INR 2,800 crore, we will not make any further bulk investment. After that, around next year this time, we're going to be looking at what's going to be happening FY 2029 and FY 2030. If the market is going to continue to grow at the same rate, we will have to add capacity. That's a decision I will take next time, around this time next year.
I've got it, sir. Sir, on the tariff side, you said there is no stoppage, orders are coming in. The customer is paying for the tariff right now, and how are we getting so much order? We're supplying directly from India only, and they are paying the tariff, is that so?
Yes. Not from current tariff. Yes.
Got it, sir. Sir, on the gross margin side, given you have already answered this to a couple of guys, we should expect this gross margin to sustain here at around 35%?
Yes.
Got it, sir. Thank you. All the best for the upcoming quarters.
Yeah, thank you.
The next question comes from the line of Basant Bansal with NBG Investment. Please go ahead.
Hi, good afternoon. My question is on this Chinese issue. While answering one of the participant question, you said that the Chinese can come and set up the shop in India. What is the new thing which is being talked right now?
Sir, I couldn't understand your question. Could you repeat it?
My question is that Chinese people can come and set up shop in India. Now recently this news came that government will allow China. What is the new thing which government is planning to do?
Sir, anybody can come set up shop in India.
Yes. That's true. What is the new thing?
The Indian government has restricted any particular country from setting up shop in India, and this has been the situation for a long time.
Yeah, that I understand. Now what is the new thing which is coming up? My question.
Something I cannot understand.
Hello. Sir, my question is that if they can come and set up the shop in India, what is the new policy happening or which is under discussion?
We lost the call.
Hello, sir. Can you hear us?
Yeah, I can hear you.
Yes, sir. Just a second.
I think management is not able to hear me.
Hello. We lost the call. I think we lost the call. Yeah. I don't know whether my answer was audible to everybody, but I will answer once again.
Please. Sorry, I didn't get you.
Anybody can import power equipment into India.
That means they may not try to import.
The voice is not very clear for some reason, sir. Can you just please come to a landline or something where.
Yeah, I will come back with it.
Still not clear at all. It's breaking. Anyway, I just want to say something. Anybody can set up shop in India to make any type of power equipment. Anybody can import from any country, any type of power equipment. I don't see why this has suddenly become an issue. What has changed? Why has this suddenly become an issue?
Hello.
Yes, sir. We'll move on to the next question. It's from the line of Mohit Surana with Monarch Networth Capital. Please go ahead.
Thanks for another opportunity. Sir, my question is our guidance for FY 2027, does that take only volume growth into account, or there is some pricing growth element as well in that? Because the global commentary, according to that, the global OEMs are increasing their pricing for turbines and gas engines.
Mohit, sorry to interrupt. Could you please repeat your question?
Sure. The guidance for FY 2027, I wanted to understand, is there a volume growth angle only, or we have baked in some price increases as well for our products?
Both.
Sir, can you give us some indication of what kind of price growth has been built in, just in case if you can share?
No.
Understood, sir. Okay. Thank you. That's all from my end.
I know the previous question I didn't answer maybe, or I didn't answer correctly, but maybe the gentleman can come back into the queue and ask the question. We can go for that.
Yes, sir. Thank you. Ladies and gentlemen, this was the last question for today. I now hand the conference over to the management for closing comments.
Yes, thank you everyone for joining us on this call, and we will look forward to meeting many of you face-to-face in our upcoming investor meeting. Otherwise, we will talk to you again at the end of next quarter. Thank you very much for your time today. Bye-bye.
Thank you. On behalf of TD Power Systems Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.