Ladies and gentlemen, good day and welcome to the Q2 and H1 FY 2026 earnings conference call of TD Power Systems Limited. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need any assistance during the conference call, please signal an operator by pressing star then zero on your touchtone telephone. Please note that this conference is being recorded. Before we begin, I would like to remind participants that this conference call may contain forward-looking statements about the company, which are based on the beliefs and opinions and expectations of the company as on the date of this call. These statements are not the guarantees of a future performance and involve risks and uncertainties that are difficult to predict.
I now hand the call over to Mr. Nikhil Kumar, Managing Director of TD Power Systems. Thank you, and over to you, sir.
Thank you. Good morning, and thank you all for joining us today on this call to discuss the financial results of TD Power Systems for the six months period ended 30th September 2025. I have my colleagues, M. N. Varalakshmi and Vinay Hegde, Head of Marketing and Sales, on this call. Moving on to the financial performance of the company for six months period. Stand-alone basis, our total income for H1 on a stand-alone basis was INR 7.64 billion versus INR 5.77 billion over the same period last year, an increase of 33%. EBITDA for H1 is 18.42%, including other income, excluding exceptional and treasury income, versus 18.04% of the same period in the previous year. Profit after tax and comprehensive income for H1 is INR 9 89 million versus a profit of INR 720 million for the same period previous year, an increase of 37%.
Order book of manufacturing segment is INR 15.87 billion, out of which INR 12.35 billion is generator business and motor business, INR 3.16 billion is the railway business, and spares and aftermarket business is INR 0.07 billion, and INR 0.29 billion is the Turkey business. Export and deemed export, excluding railway orders, growth is 8%. Order inflow during the quarter is INR 5.24 billion, an increase of 45% year-over-year on QoQ basis. The order inflow for H1 basis was INR 9.16 billion for this half, H1 versus previous H1 is INR 6.68 billion, an increase of 39%. Order inflow from direct and deemed exports is INR 6.95 billion compared to INR 4.78 billion in the previous year, 76% of our H1 order inflows, exports, and 24% is domestic.
Consolidated, our total income for six months on a consolidated basis is INR 8.33 billion versus INR 5.89 billion, an increase of 42%, and profit after tax and comprehensive income for H1 is INR 1.108 billion versus a profit of INR 764 million, an increase of 45%. We continue to maintain a gross cash balance of INR 1.93 billion. Order book market situation and guidance. The market conditions are similar to in all segments as compared to the last quarter, except for the gas turbine and gas engine business, which is completely turbocharged and demand has increased dramatically. Let me go through each segment and market in some level of detail. In India, the steam turbine business, the market continues to grow at the rate that we said earlier, with no surprises both on the upside and downside.
The market is steady with around 10%-12% growth taking place in captive power plant business, biomass, and waste heat recovery. We have received a large number of orders for larger sites, four-pole units, and we expect further orders to continue in the upcoming quarters also for larger machines for steam turbine generators. In the export market, the pipeline is also strong and overall, we expect on the export market also 10%-12% increase in steam turbine business. We're getting steam turbine orders from all over the world and demand is strong and steady. Coming to the gas turbine and gas engine business. The demand and forecast on U.S. and Europe are extremely high and we're experiencing a very large uptake in orders. The forecasts made by our prime mover partners are extremely high and are exceeding expectations.
Based on the surge in orders in this segment, we increase our guidance to this financial year to INR 18 billion and over INR 20 billion for next financial year. Order booking in Q3 continues to be very strong and we will end this quarter with extremely strong good order booking numbers. Currently, what we are seeing is that we have ramped up our order booking to an average of INR 550 crore per quarter, which we will sustain into next year. This gives us an indication of what could be the expected business on a minimum basis for next financial year. We're getting orders from, as I said, all markets and particularly from the U.S. market despite the duties and we expect further order inflows once the trade deal between India and the U.S. materializes sometime in November and December.
Hydro, we have achieved excellent order inflow in this segment and next year will be one of the highest in the history of our company for Hydro. I've mentioned in the last quarter, we're also bidding for large refurbishment projects. Even then, we are hopeful that we'll be successful in a few of them. Our motor business is growing at the rate that we earlier mentioned. We don't have anything special to report in the motor business. We'll be on track with our plans. The railway business is also going on track. We are producing the trial units for both the U.S. market and the Europe market. Both the trial units for both these jobs should be handed over to the customer by the end of this quarter, that's Q3.
Qualification will take place early in Q4, and we'll start producing volume production in Q1 next year. Similarly, for the Russian traction motors, we have also handed over, offered our the motors to the Russian customer as qualification units. After they will test the motors in, say, in Q4 next year, we should see a ramp-up taking place in the railway business for Europe, U.S., and Russia. The guidance, as mentioned earlier, revised guidance for the current year is INR 1,800 crore, and initial guidance for next year is over INR 2,000 crore. This brings me to the end of my initial remarks. I'll now be happy to answer any questions that you may have. Thank you.
Thank you. We will now begin the question -and -answer session. Anyone who wishes to ask a question may press star one on their touchtone phone. If you wish to remove yourself from the question queue, you may press star 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 is from the line of Mihir Manohar from TRUST Fund. Please go ahead.
Hi, thanks for giving the opportunity. Congratulations on great set of numbers, and also for providing the guidance.
Thank you.
Largely wanted to know on the capacity expansion side, because when we see, I think end of this quarter or the start of the next quarter, we are expecting capacity to kick in. If I recollect, I mean, even after the debottlenecking and all, our overall potential comes out to be INR 2,300 crore-INR 2,400 crore. It takes us roughly, I think, 9 - 12 months for our capacity to come in. I think, will we be looking at capacity expansion because if the demand is so strong, beyond the level, we will end up having constraints on capacity. What is your thought around this particular topic as to when will you look to expand capacity further from here on?
Yeah, we will never be in a situation that we will be short of capacity, so we will not let that happen. The current capacity, we constantly find ways to push our capacity. For example, we have already, without the third plant being fully operational, we already ramped up our production pretty significantly. The third plant will be fully commissioned in this quarter, and it'll be fully in production. We will see a ramp-up in our production and sales in Q4 further compared to what we expect in Q3. There is a lot of scope for us to push this number even beyond INR 2,400 crore-INR 2,500 crore. We've done a lot of capacity analysis once again with some further debottlenecking. We don't expect to make any major investments up to FY 2028.
Of course, if the demand further pushes the requirement to go beyond INR 3,000 crore, then we have enough of land. We have in our buildings also, we have created 25% extra space in each building so that we can expand capacity. We can put new more machines up to 25% in the existing buildings, so we don't have to create new buildings. We have taken that buffer space in our existing new factory. I don't see a problem of capacity, honestly speaking, and that's the last thing on my mind right now.
Okay, understood. Basically, all three plants put together, I think the overall potential, max potential can be INR 2,500 crore-INR 2,600 crore. Is that a fair number to look at?
Yes, that is the goal. With some incremental investments, we don't have to do any bulk investments.
Okay, understood. Sure. Second question was on the order inflow side, let's say 1H. For the first half, what was the order inflow from the U.S. and what was that number, let's say, for 2025?
No, we don't give market-wise breakup like that. We don't. We don't give customer-wise breakup, and we don't give market-wise breakup.
Sure. No issues. Okay, sure. Third question was just on the GP side. I think when I see the GPs for the 1H, even second quarter as well as the first half, gross profits-
Sorry to interrupt, sir.
Yeah, yes.
To ensure that the management is able to address.
It's okay. I'll answer this question.
Sure.
No, I'll answer this question and then we can. Go ahead. I know your question.
Sure.
The question is why is the GP down by 250 basis points compared to-
Right.
Varalakshmi, you can take this question.
This is mainly because of the product mix. We had some services and sales jobs that we had done in Q1. We will be getting back to the normal GP range in Q3 and Q4.
Yeah. We are very confident that we will get back to our earlier numbers of GP by the end of Q4. We have some excellent orders in the next two quarters. This quarter, next quarter, we will get back our numbers.
Also, it's good to look at the GP on an annual basis rather than quarter-on-quarter or H-on-H basis.
Yeah. Totally.
Understood. That's it, sir. Thank you very much.
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please limit yourselves to two questions per participant. Should you have any follow-up questions, you may rejoin the queue. The next question is from the line of Mohit Surana from Monarch Networth Capital. Please go ahead.
Thank you for the opportunity. Sir, congratulations on a great set of results. My first question is with respect to the overall industry dynamics. I believe overall the demand for turbines and the generators are very strong in almost all the segments, particularly in the gas engine, particularly for the data centers and grid stabilization. In this scenario, do we expect some kind of realization improvement over the next one or two years? As you said, the volume would remain strong, but any thoughts or any comments on the realizations front? That is my first question.
Yeah. This question about the demand from the U.S. and data centers, there's a lot of newspaper articles about the AI bubble and everything. Those who have access to The Wall Street Journal, I would recommend you to read an article which was published yesterday, the headline goes as follows, and refers to this article, "Big Tech Spending More Than Ever in AI and It's Still Not Enough," is the headline.
Great.
Meta, Alphabet, Microsoft, and Amazon have all said that they will increase spending in 2026. I think that there's no doubt that this spending and this investment in data centers and this AI boom is going to continue for some more time. Investments which are being announced right now will fructify after, say, about a year or so. The actual investments for power plants and everything will take place. Our OEM customers are already talking about 2027, 2028, and increase of demand, increase of capacities. Powergrid's talking to us about further demand, further capacities for 2027 and 2028, forget about 2026.
I would say that while we obviously would be always keeping an eye on the market, at this point of time, we are really focused on execution and staying very closely connected to our customers and making sure that we deliver what is required by the market. This is what we're doing right now. The second question you had was on margin, right?
No, sir. I'm yet to ask, sir. With respect to the first question, sir, we have guided for a revenue of around INR 20 billion for FY 2027 versus INR 18 billion for FY 2026. Is it fair to say this is on the conservative side?
At minimum, INR 2,000 crore next year, minimum INR 20 billion next year. I also mentioned to you that right now our order inflow rate is running something like INR 550 crore per quarter.
Right.
That gives an indication that we're going to be somewhere around INR 2,000 crore-INR 2,200 crore next year at the minimum level.
Understood.
There's an upside potential on top of this, we will only guide and project what we can do for sure. As and when the upside potential materializes, we will announce it to the market.
Got it, sir. Sir, last question with respect to the cash conversion. This time our CFO to EBITDA conversion has been less than 10%, similar to the same period last year. Just wanted to have an understanding, will this reverse course going forward and what was the reason for low EBITDA conversion?
The reason is obvious, right? We're ramping up our production so rapidly, we need to buy a lot of material. We're ramping up 30%, so we need inventory. We need to buy material. That's what we're doing. In a period where you have flat sales or low growth, or even declining growth, that's when you start having very strong cash flows, free cash flow. At this point of time, all our retained earnings are going back into inventory because of buying more material. If this growth rate continues, we will continue to grow our business, and that you need working capital. Why we're not borrowing from the market, obviously, we are using our own funds for working capital. It affects the cash flows for a short period of time.
Right.
As long as we have this high growth, I don't see us generating huge amounts of free cash flow. It may change in the future if the growth rate tapers off.
Understood. Sir, thank you so much. I will fall back in queue.
Yeah.
Thank you. The next question is from the line of Sandeep Tulsiyan from Sundaram Alternates. Please go ahead.
Yeah. Hi, good morning. First question was on the overall order inflows that you're seeing. Now you're touching roughly INR 550 crore of quarterly run rate inflows. Were you planning further capacity expansion? How do you envisage this number?
I just spoke about capacity two questions ago, so I'm not going to repeat it again.
Right. The idea is to just understand how are you thinking of this number moving forward of let's say INR 550 crore growing by 25%, 30% going forward? Are you being selective in booking orders? Because there are just much more orders than what you can service for the next two years. Or you will rather find ways to expand capacity and just take in whatever orders come in, and the growth can continue in excess of 20%, 25% or so.
Yeah, basically. That is the answer.
Reluctant of-
We're not going to be selective. We are here to grow our business. We have a third plant. We have space in the third plant to expand. Our buildings are larger than what we need right now. We have space within the existing buildings to grow. We have empty land where we can double what we have already created. We are here to grow our business. We're not here to be selective.
All right. Second question was on the OEM relationships that you have. Are there any further new relationships that you are developing in the U.S., or it's more from rising demand from existing relationships that's driving these order inflows?
Yes. U.S., even overall worldwide, if you look at the large players, it's a highly concentrated market. There's a lot of concentration of power from the prime mover side. There are just four or five companies that dominate the entire worldwide market for gas engines and gas turbines. We are working with all the big ones except for one.
Okay. They will continue to also source the generator part. Are there any plans of any of the large OEMs to do some portion of these generators in-house as well?
No, of course not. Why would they do that?
Okay. All right, sure. Those were the questions from my side. Thank you so much, Nikhil.
Yeah.
Thank you. The next question is from the line of Aniket Jain from YES Securities. Please go ahead.
Hi. Morning, sir. I just had one question on data center. Data center is seeing increasing traction in India as well. Are you seeing some kind of inquiries or an increase in inquiries from Indian data center players? What kind of addressable market would be there in India for you? Probably another one would be whether Indian markets will rely more on the diesel engines or more on gas turbines. What would be your sense on that? That's it from my side.
No, actually, we hear something in the news, but we don't see any actual ground-level, I would say, investment taking place for large AI data centers or something, server farms in India right now. Diesel is not an option. If you're talking about 100 MW, 150 MW per site, it's not an option. You can't run such things with diesel. What kind of fuels will be used as an alternative? You can't use renewables, gas is the only solution. How are we going to get gas into India? How are we going to make sure gas is available for power generation for data centers is a question mark. Until that problem is solved, I think the investment, the emergence of data centers in India would be a question mark, I feel. Because they are so power intensive, and you need reliable power. You need 24/7 power.
You need clean power. I think that problem has to be addressed. We don't really see clarity on that right now.
Understood, sir. All right. Thank you.
Thank you. The next question is from the line of Abhijeet Singh from Systematix. Please go ahead.
Yeah. Thank you for the opportunity.
No problem.
Congratulations on a very strong set of results.
Thank you.
Sir, my first question is on the peak revenue that you can achieve from the current capacity. What is the current capacity in terms of megawatts? In a typical data center, let's say for exports application in U.S. and Europe, is that the case that every data center is going for gas as their main power source? If you can give a rough split between different data centers using different power sources of energy. In a typical project for a data center, what is the cost of a generator as a percentage of overall cost of the project? Lastly, sir, if you could talk about competition in the international space that we face. How are we placed in terms of competing with the other larger players across the globe and where the competition is coming from?
I don't know. You have asked so many questions. It's hard for me to answer everything. Just in general, data centers run in Europe and in the U.S. are primarily being fueled by gas. They can be either used for primary power or for backup power or both. You could have gas turbines and gas engines for primary power, and you'll have a similar amount for backup power. The economics of the data center is beyond my scope. I don't know. I don't know what is the percentage of generator in the overall data center cost, because it varies on what kind of configuration and it varies on lots of things. I don't have an idea about that number. Then what were the other questions? You asked so many questions, I'm sorry, I lost track.
Sir, the first question was the peak revenue that we shall achieve from the capacity and what is the capacity right now?
That I already answered. See, I already answered this capacity question. The first question which was put to me, I already answered this capacity question. I'm not going to keep answering it again and again. Please forgive me.
Sure, sir. Lastly, sir, the competition that you face in the international markets.
Yeah.
If you can talk about the value there.
The competition that we face in international markets, in the generator business, our competitors are large multinational companies. All the big names are there. Certainly, our own people have advantages coming to us. One, we can deliver faster. We have a lower cost. Everyone has a lot of business. Everyone is full. I think that the right market situation is that those who have capacity, those who can deliver faster, are getting more business.
Sure, sir. Thanks a lot for answering the questions. I'll get back into queue.
Actually, this was an option which we were considering to go.
Thank you. A kind reminder to all the participants, please restrict yourself to two questions per person. A reminder to all the participants, please restrict yourself to two questions. The next question is from the line of Deval Shah from 360 ONE. Please go ahead.
Good morning, sir, and thank you for the opportunity. First question is, any update on the large generators of 50 MW-150 MW where you are setting up the design center in the U.K.? Any update on that front?
Yeah, we have an update. This machine will be offered to the customer by end of December, early January. Once the testing is complete and the qualification is complete, we expect to start getting larger orders by second half of 2026. It could be another big business, or it will be another big business for TDPS. If this works out well, multi-hundred crore opportunity is there in front of us.
Understood. This would be in that 50 MW-100 MW range?
Yes.
The second, on the traction motors exports opportunity. We were securing some orders in Western Europe. Any update on that front? Any new orders or opportunity we are looking at and ramp-up in second half of 2026 or FY 2027?
No, we're not looking at any new opportunities. The status of the existing project, I already mentioned it during my earnings call speech. Forgive me, I'm not going to repeat it. Please get back to the earnings call speech. It's written over there clearly what I said.
Sure. Thanks so much.
Thank you.
Thank you. The next question is from the line of Ganesh ram from Unifi Capital. Please go ahead.
Nikhil and team, congratulations on your performance. Indeed, I can imagine how tough it would have been to execute. I just have one bookkeeping question and maybe another strategic one. The bookkeeping question, if you can hear me clearly, is I just want to understand on a constant currency basis, maybe Varalakshmi can take this, but this year, I mean, this quarter, top line was INR 450 crore. Comparable period last year was INR 300 crore. On a constant currency basis, what would have been our revenue this quarter?
I don't think we've done that calculation, Ganesh.
Okay, no problem. I'll follow up with you later on that. Yeah, okay. That will be it. Yeah. Sorry, Nikhil?
Thank you. The next question is from the line of Pritesh from Lucky. Please go ahead.
Yeah. My question is on the hydro generator side. Is there any comments on the market? Is there any comment on the pickup in the hydro generators, India, internationally? If you could give some comments there.
Vinay, could you please take this question?
Can you hear me?
Yes.
We can hear you.
Already Nikhil told in the opening meeting. We are getting very good orders and mainly from the outside India market. There are two big markets, which is Nepal and Vietnam. In India, it has not picked up really, but there are a few projects in India. There are some refurbishment jobs going on in India. Those are government jobs, and we got an order in the last quarter, which we have already mentioned. As Nikhil said in the beginning, we are going to have one of the best years for the hydro segment business FY 2027.
Okay. This best year, is it linked to activity in India or a large activity in India?
No.
No. Okay.
No.
Any activity-
From outside India.
Outside India. Any activity that you see happening in the PSP pumps, PSP hydro projects?
Yeah, it is happening. Those are larger capacity machines.
Okay.
Pumped storage, those are huge, larger capacity machines. We are not really in that segment. We are mainly into the power generation segments.
Okay. Done, sir. Thank you very much.
These pumps will be somewhere around 100 MW- 200 MW.
Yeah.
Thank you.
Does it answer your question?
Okay.
Yeah. Thank you. The next question is from the line of Prathamesh Rane from Elara Securities. Please go ahead.
Hello, am I audible?
Yes.
Yeah.
Please go ahead.
Congratulations on a good quarter. Just one question from my side. India has a hydroelectric evacuation plan of INR 6.6 trillion from CY 2025 to 2037 per se. Do you see any opportunities in that space?
Hydrogen?
Yeah. Hydro density. India wants to evacuate some gigawatts from the Brahmaputra Basin. Are you seeing any traction, like what sort of a product?
As I told you, these are all large hydropower plants, and we are in medium hydropower plant segment that is up to 50 MW. This, what you are talking about, Brahmaputra, these are coming under the large power plants. We are not in that segment. Whatever is there in India, there are some projects coming in the range of 10 MW-20 MW. There, we are very much there, and we have got some of the orders, but it is not to the extent of what we expect. If you see in the total sales of hydro business, the contribution from the Indian market is less than 10% of our total turnover in hydro.
Sure, sir. Got it. Thank you, sir.
Okay. Yeah, thanks.
Thank you. The next question is from the line of Salil Desai from Marcellus Investment Managers. Please go ahead.
Thank you. Hi, Nikhil. My first question, in your opening remarks, you mentioned about the U.S. trade deal that could be a little more positive for you. Does it mean that the INR 2,000 crore minimum revenue is if the deal gets done, or if the deal gets done, you could do far, far higher than that?
Yeah. The number that we have put on the table is meaning things will not change. We also believe that if things don't change between India and the U.S., then a lot of customers will go for the Turkey option that we already placed in front of them. That's what they have also told us, that in case the India trade deal does not materialize by the end of December, then a lot of production for us will start getting shifted to Turkey. They have accepted that plan that we have offered to them. People are waiting.
Yes.
The number that I put, INR 2,200 crore, will be on the basis of the current status. If we have a good trade deal with something like 15%-20% import duties, I expect our business to go further up.
All right, great. Second is on supplies to the Middle East, especially on the API compliant or the API certified products. In the current quarter, you had one of the first supplies to ADNOC, right? Is this a part of that ramp-up, or you think that there's more to go before you see Middle East really scaling up in terms of what revenues you do from that region?
Vinay, you can answer this question. I believe it's very early stages.
Yeah. This is the first order we have got from the oil and gas segment from ADNOC. The first machine has been built, it has been tested and cleared for dispatch. There are a couple of more machines coming in the quarter three. We have also got one more order, which is a new order, which for execution, it will be coming in the next year. It all depends. Now we are approved by ADNOC, it depends on the success of the first machine. Successfully, the first machine has been tested and cleared by them. There are a lot of we have already taken and this segment definitely is going to increase because this first reference is what we would have.
Typically, after the first delivery, it will take what? 12 odd months before you think that. Hello?
Yeah. This ramp-up is not going to happen overnight. Like Vinay said, we are- I think Vinay's voice is breaking, right?
Even I.
Yes.
I thought it was just me, correct.
Yeah.
Yeah.
I thought it was just me, too. I'll just answer for him. I think his voice is breaking. Any ramp-up with any new market, any new customer takes two to three years. We have put the initial machines in. They have to work. We've already started getting orders, even though the first few machines are not yet fully commissioned. The real ramp-up takes place after the first few units are commissioned, the customer is happy. That will take six to eight months.
I see. All right. That answers. Thank you so much. All the best.
Thank you. The next question is from the line of C.A. Garvit Goyal from Nvest Analytics. Please go ahead.
Hello. Am I audible?
Yes.
Yes.
Hello.
Please go ahead.
Congratulations, sir. Good set of numbers. I have one question. I just want to understand more on our target addressable market from here, and the sustainability of demand for our products. Our growth trajectory is upward in last three years, that we understand. If I look at a bit longer history of ten years, our sales has grown by 3x only. Can you please spend some minutes on explaining what exactly has changed for us in last two years? Like, what are the key areas from where we are getting the demand, and how sustainable it is, and why only TD Power Systems? Like, what is the edge here, because of which large export orders are coming to us? That's my first question, sir.
We have been building up our brand name, our TDPS brand name in the international market since 2012, 2013. It's been a long road, a long hard road for the company to establish its product into international markets. Acceptance also was very slow during the initial years. It's only, say around 2018, 2019, 2020, that we started seeing the acceptance of our products increasing in the international markets. Now we're seeing it's like a hockey stick curve where you suddenly see that there's more acceptance, then we get on the proven list for larger projects, more prestigious projects, larger customers, and that's how you build up the market share. We are offering high-quality products at very competitive prices to our international competitors. Basically, we are in a situation where we are addressing a larger part of the market.
In terms of our overall scope to growth, we are still something like single-digit market share on a global basis, we have a lot of potential to grow. In this current environment, where all generator manufacturers, all the big major generator manufacturers worldwide are full, I think it's a great opportunity for us to actually get more market share because we have taken the decision to put up the third plant, new capacity. We know that our competitors have not done that. They're well behind the curve in terms of adding capacity. We are in a situation where we're being really aggressive to take more market share. I think that this is one of the key reasons why we're seeing a big increase in our orders, because we have the capacity. Today, the market is in a situation where they are hungry for capacity.
The decision that we took last year to put the plant has been the very correct decision for our company and for the shareholders.
Got it. Sir, just a follow-up. You mentioned about the market share. Can you give some rough idea, what is the relevant TAM as of now, and how fast is it growing? Competitors will also. Right now, they may be lag behind in terms of the capacity, but they must be doing the CapEx, right?
Yeah, they do the CapEx, and it may take a little bit of time for them to get ready. We were impressed ourselves. It's hard then for anyone to push out a competitor who's offering high-quality products, the same quality product, a better quality product at lower prices. It's hard to push a competitor like that out of the way. As I said, we have single-digit market share still worldwide, and we have a lot of space to grow, and we will grow.
Any rough idea of the TAM?
I'm going to give my guidance here on your basis.
No, sir. Actually, I was asking about the market size here. What are the guidance on year-over-year market?
Yeah, I think that we should have a one-on-one investor meet for an hour to look at the entire business. These are not the kind of questions to be asked on an earnings call. Forgive me please, but these are not the kind of questions for an earnings call. If you have interest in our company, please contact our investor relations team, and we'll be happy to give you a complete presentation about our business.
Understood. Okay, sir. Thank you.
Yeah.
Thank you. The next question is from the line of Himanshu Upadhyay from Stanford Investment Managers . Please go ahead.
Yeah. Good afternoon, congrats on the-
Hello, Himanshu.
-great set of results.
Thank you, Himanshu.
One question which was last quarter, a lot of discussion happened was on scaling up of operations in Turkey and transferring some business of U.S. to Turkey. Any updates on that front you would like to give since in the intermediate, till the deal gets done or does not happen, are we getting more manufacturing done in Turkey or manufacturing currently is only in India?
We are prepared, Himanshu. We are prepared to do that. We have used the past few months, last three months, to prepare ourselves to create There's a certain amount of cost also which is going to come. Not a very big amount, but there's going to be a certain amount of cost which is coming to being prepared for the worst case situation where India and U.S. don't have a trade deal by end of this year. The Turkey facility will be used for the U.S. market for all the manufactured exports to the U.S. market. We're preparing ourselves for that is all I can say. We have offered the solution to our customers. Customers have accepted the solution.
Everyone is hoping that, our customers and us are hoping that we will have a trade deal with the U.S. by the end of this year, and they don't have to buy this machine through Turkey. That's where it is. At the moment, everyone is just keeping the status quo. Right now the business is such that there is an extreme high demand situation and people are paying this 50% duty. I don't believe it is sustainable beyond six months or so. If we don't have a trade deal, then we will fall back on Turkey. That's what our customers also have told us. That's where it stands.
We have plan B in place, it could be that we do have a trade deal by the end of this year, in which case the Turkish facility will be, whatever money we spent to be prepared will not be in place. It's not a big amount of money. It's like INR 1 crore or INR 2 crore.
Okay. The second question was, we had spoken about a large generator development of 40 MW- 45 MW with deliveries in FY 2026 and expected large potential in FY 2027 onwards. Can you give some update on that and some of the orders when we see in Q2, which are 50 MW and 60 MW, are those-
Those are one-off orders. Those are not the ones that we are targeting. The ones I had given an update about two or three quarters ago, that this machine is going to be offered to our customer in end of December and January. There'll be after qualification. It's a multi-hundred crore opportunity for TDPS. If the customer, if everything goes well, we will report to the market, I'll say maybe in February, what the status is, next earnings call. When the business is going to pick up and how we see the track for this business. As I said, it's a multi-hundred crore opportunity, we are extremely focused on making that happen.
This is the same as what we had spoken in annual report of 40 MW - 45 MW with delivery starting in 2026, or it's a separate business?
Correct. That is the same one. It's a two-pole generator with larger gas turbine. Then there's another larger, one size higher gas turbine, 60 MW-70 MW, which we're also targeting. First we'll do this 40 MW-50 MW, then we'll do the 60 MW-70 MW after that.
Thank you. Congrats again on the great results.
Thank you, Himanshu.
Thank you. The next question is from the line of Balasubramanian from Arihant Capital. Please go ahead.
Good afternoon, sir. Thank you so much for the opportunity. Congratulations for good set of numbers. Sir, for Energy Dome CO2 battery project, our role is for only forward supplying or is there any potential for deeper technology partnership or IP sharing? Secondly, what is the addressable market for long duration energy storage side? What is our scope of work for next five to 10 years, especially for generator side?
Vinay, please answer this question. Vinay, you there?
Hello.
I think Vinay maybe having connection problems. We are in this Energy Dome CO2 storage. We are supplying the generator and there's also a large motor. We're supplying the generator and the motor. We're not interested in getting into any further scope on these projects. One of our very close long-term customers is deeply involved with this, and we will supply to them.
Okay, sir. Sir, we are shifting U.S.-bound production to Turkey to mitigate tariff impacts. What is the quantified operational logistics cost associated with this shift? Especially for in the gas segment, I think you mentioned about 50% of costs are arbitrated over European or Japanese competitors. This arbitrage is sustainable if raw material cost rises or if European competitors also move production to low-cost regions.
The first question is that regarding the Turkey facility, I'll give the updates next year in the next earnings call in November. By that time, everything's going to be clear. I think I'm not in a position to give any further updates other than what I've already spoken right now. Regarding the cost arbitrage with our international competitors, yes, if they do manufacture in India, the cost arbitrage will come down. It would be that Indian factory versus our Indian factory, their overhead versus our overhead, who has the lower cost structure. Definitely, if people put up large manufacturing facilities in India to compete against us, our situation will become more competitive, that's for sure.
Okay, sir. Got it. Thank you.
Thank you. The next question is from the line of Ashwani Sharma from Emkay Global Financial Services. Please go ahead.
Good afternoon to the team, and congratulations for your set of performance. Nikhil, basically wanted some inputs on growth in the domestic market. You did allude it in your opening remarks, some more granularity will help us in this.
The Indian market is, for us, getting to be a smaller and smaller percentage of the overall business. It's also a single-dimensional market. It's only steam turbines. Whereas in international markets, we deal with multiple fuels, multiple prime movers, hydro, gas engine, gas turbine, geothermal. We have far more applications and far we're dealing with multiple OEMs all over the world. Indian market, as I mentioned to you, is growing around 10%- 12% per year. It's a steady growth. It's a healthy situation. That's where it is. I don't know what further information I can give you, Ashwani, what exactly would you like to know?
No, that's helpful. Secondly, on your revised guidance, what would be the breakup in terms of generators and motors now?
The motor business would still remain around INR 150 crore. The rest will all be generators.
Okay. Thirdly, just bookkeeping questions. If I look at the employee cost, this was up by around 35% during the quarter on a YoY basis and 11% on a quarter-on-quarter. I understand there's a commissioning of new facility. This will be the run rate going ahead?
Yes. Further increases may take place.
Okay.
It is not just that we are not just increasing the capacity or adding people for the first plant, but we're also, if you have been noticing, various updates have been given to the exchange from the company. We have also been hiring at the top management level. We'll continue to keep hiring at the top management level because we need more management capability also for the larger operations.
Got it. Yeah. Thank you very much. All the best.
Thank you. The next question is from the line of Rucheeta Kadge from I-Wealth. Please go ahead.
Yes, sir. Good afternoon. Sir, my question was on the sales side. If you could give a bifurcation of how much was the export and how much was domestic sales for us during the quarter?
Domestically, we give export, domestic export sales. I don't have that number with me right now compared to domestic.
I'll just give an estimate. The exports were 66% for H1.
Okay. On the CapEx part of it. On the CWIP, we have around INR 50 crore. This quarter, have we commissioned some part of the plant or it's going to come from the next quarter?
It will come in the next quarter.
Yeah. Q3 is something like 30%. Already we have commissioned something like 30%. We have three large sheds over there. One is completely commissioned. Second one will be commissioned by end of November. Third one will be commissioned by end of December. The plant will be fully commissioned by end of December. Will be in full operational capability in middle of January.
In this quarter, the new plant was not commissioned, right?
It's commissioned. It's running.
Okay. 33% you were saying.
Yes. Only 33%, but it's completely operational, three shifts a day.
In September 21st, 33% of the new plant was commissioned, right?
Yeah. I would say not exactly September. I would say maybe partly September. In October you can say it is fully operational.
Okay. Understood. Thank you.
That 33% is fully operational in October.
Okay. Understood.
Thank you. The next question is from the line of Kiran D. from Table Tree Capital. Please go ahead.
Hi, congrats on a very good set of numbers and continued growth, Nikhil. A couple of questions, one business, one financial. On the business side, I know we're laser-focused on the large execution gas turbines and gas engines, apart from super traction on other lines of business. On the motors, which is probably more sustainable beyond data centers, right? Are we continuing to focus on growing motors to a substantial part of our portfolio to INR 500 crore, or has that taken a back seat given the data center demand and obviously the people bandwidth?
We have a separate team for the motor group. It's a separate group of people. We also separated out the production facility for the motor. They have a different focus, and their focus is definitely to grow this business to INR 500 crore. We're not taking our attention off that. As I said, the groups are separate. They have the separate targets, and they are focusing on their own business.
Got it. Okay. Cool. Do we see that large traction coming in for motors, Nikhil, or not yet, and it's still in a ramp-up phase and will take a couple of years before we can start to ramp up the motors?
It's still very much in the initial stages, ramp-up stages. It will take a little bit more time.
Got it.
Yes, you are right. You are totally right, if you look from a five, six-year perspective, we have to grow this business, and we will grow it.
Perfect. Yes, that makes sense. Second, on the financial question, Nikhil, you've grown quite substantially, right? From INR 1,000 crore sales over the last couple of years. Now we'll probably reach INR 1,800 crore and probably much more than INR 2,000 crore next year. I understand your answer previously was around focusing on market share, so the 35% gross margin makes sense. We're still not seeing the improvements into EBITDA, right? Are you kind of seeing through FY 2027, do you see the EBITDA margin moving to 20%+ , or you still don't see that coming through?
I see it. I don't want to give a commitment on it, the plan is to get there. Okay? Because if the third plant is running at full capacity, the ramp-up is taking place, the costs are fully absorbed, running at full capacity, we will get there. We will discuss that in more detail in February next year. Most certainly, that is the goal of the management.
Got it. Makes sense, Nikhil. Thank you so much.
Thank you. In the interest of the time, we will take the last question from V.P. Rajesh from Banyan Capital. Please go ahead.
Hi, thanks for the opportunity and congratulations on the excellent numbers, Nikhil, and team. Just two quick questions. Any update on the railway business? Secondly, on the order book that we booked this quarter, how much was domestic versus exports? Thank you.
Rajesh, I answered both the questions in my earnings call speech, yeah, I think this is the last question. I'll repeat it. Railway business update is too long. I've already given it, so I'm not going to give it once again. What's the breakup Varalakshmi of the order inflow? Order inflow H1 , I think export is 74% and domestic is 26%. Correct, Varalakshmi?
Correct, sir.
Yeah.
Okay. Thank you. Wonderful.
Thank you.
Ladies and gentlemen, that was the last question for today. I would now like to hand over the conference to the management for closing comments.
Yeah, thank you very much for all the questions. I look forward to seeing many of you during one of the many upcoming investor conferences in November. Thank you very much, all of you, for your time. I look forward to seeing you in person in the future. Bye-bye.
Thank you.
Thank you. On behalf of TD Power Systems Limited, that concludes this conference. Thank you for joining us. You may now disconnect your line.